Sage Therapeutics, Inc. (SAGE) Earnings Call Transcript & Summary

Good morning. Welcome to Sage Therapeutics Conference Call to discuss top line results from the PRECEDENT study. [Operator Instructions]. This call is being webcast live on the Investors and Media section of Sage's website at sagerx.com. This call is the property of Sage Therapeutics and recording, reproduction or transmission of this call without the expressed written consent of Sage Therapeutics is strictly prohibited. Please note that this call is being recorded. I would now like to introduce Ashley Kaplowitz, Vice President of Investor Relations and Capital Markets at Sage.

Good morning, and thank you for joining Sage Therapeutics' conference call to discuss top line results from the PRECEDENT study of dalzanemdor in patients with mild cognitive impairment or MCI in Parkinson's disease or PD. Before we begin, I encourage everyone to go to the Investors & Media section of our website at sagerx.com, where you can find the press release and slides related to today's call. I would like to point out that we will be making forward-looking statements, which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. Please review the risk factors discussed in today's press release and in our SEC filings for additional details. We will begin the call with prepared remarks by Barry Greene, our Chief Executive Officer. We will also be joined by Laura Gault, our Chief Medical Officer, who will review the results from the PRECEDENT study in more detail. We will have a brief question-and-answer session at the end of the call. Kimi Iguchi, our Chief Financial Officer, will be joining for Q&A. With that, I will turn the call over to Barry.

Thanks, Ashley, and thank you, everyone, for joining us for a brief call this morning. This morning, we announced results from the Phase II PRECEDENT study of dalzanemdor in mild cognitive impairment in Parkinson's disease. Dalzanemdor, also known as SAGE-718 is our wholly-owned, first-in-class NMDA receptor positive allosteric modulator or PAM. It's being investigated as a potential oral therapy for cognitive disorders associated with neurological diseases. As a reminder, we're also conducting several Phase II studies in Huntington's disease and Alzheimer's disease with readouts expected in 2024. As you saw in our press release filed this morning that contained the PRECEDENT results, statistically significant differences versus placebo on the primary endpoint were not observed in participants with mild cognitive impairment related to Parkinson's disease. The PRECEDENT study was a small, placebo-controlled study designed to evaluate efficacy and safety in mild cognitive impairment in Parkinson's disease. We are deeply disappointed for patients. We know MCI and Parkinson's disease can have a significant impact on an individual's daily functioning and ability to remain independent. The prevalence of neurodegenerative disease is only increasing and patients urgently need effective treatments, especially in Parkinson's disease mild cognitive impairment where there's no approved FDA therapies. Before turning the call to Laura, I want to thank all the participants in the PRECEDENT study, their families and caregivers, the trial investigators, the advocacy community, everyone at the clinical sites and our Sage team who contributed to this research. This was a well-conducted trial. We remain committed to developing innovative therapies to support the millions of patients with brain health disorders who are waiting for new treatment options. With that, I'll call -- I'll turn the call over to Laura to discuss results in more detail. Laura?

Thanks, Barry, and good morning, everyone. I'd like to echo Barry's comments and express my gratitude to the participants, investigators, Sage employees and all other stakeholders for their contributions to the PRECEDENT study. As a clinician, I am deeply disappointed for patients and families living with Parkinson's disease, as I understand how important new therapies are for this community. As you can see on Slide 5, the PRECEDENT study was a randomized, double-blind, placebo-controlled study to evaluate the effects of dalzanemdor in mild cognitive impairment in Parkinson's disease. The study consisted of a 6-week treatment period and a 4-week follow-up period. In the study, patients were randomized to receive either once-daily oral dalzanemdor or placebo. The primary endpoint of the study was the change from baseline in the Wechsler Adult Intelligence Scale 4 Coding test or the WAIS-IV coding test. This test assesses several domains of cognition and results on this measure correlate with patient relevant functional outcomes. Secondary endpoints in the study were focused on safety and exploratory endpoints were included such as the SCOPA-Cog, another measure of cognition as well as functional and global measures. In total, 86 patients were enrolled in the study. They were randomized to receive either placebo or 1.2 milligrams of dalzanemdor once daily over the 6 weeks of treatment. Of the 86 participants randomized, 81 subjects completed the study. There were no study discontinuations due to treatment-emergent adverse events in either treatment group. Demographics and clinical characteristics at baseline were generally balanced across the treatment arms and are representative of the Parkinson's disease population with mild cognitive impairment. Patients treated with dalzanemdor did not demonstrate a statistically significant difference from baseline compared to placebo on the WAIS-IV coding test at Day 42. Further analysis do not suggest any meaningful differences in the other endpoints, including the SCOPA-Cog. With regards to safety and tolerability, dalzanemdor was generally well tolerated with no discontinuations from the treatment emergent adverse events and no new observed safety signals. The incidence of treatment emergent adverse events was similar between drug and placebo and the vast majority of events were mild to moderate in severity. Overall, dalzanemdor safety profile was consistent with that seen in earlier studies. Before I turn the call over to Barry for closing remarks, I would like to note that while the PRECEDENT study in Parkinson's disease didn't meet its primary endpoint, we believe these results are not necessarily predictive of the results in our other ongoing studies. It is important to remember that although cognitive impairment is common across Parkinson's, Huntington's and Alzheimer's diseases, the underlying pathophysiology and symptomatology of these diseases are very distinct. Further, the dalzanemdor studies differ in terms of indication, patient selection criteria, duration of treatment, sample size and certain endpoints. We look forward to sharing results from these additional Phase II studies expected later this year. With that, I will turn the call over to Barry.

Thank you, Laura. Based on the data that Laura reviewed, we do not plan any further development of dalzanemdor in Parkinson's disease. As a reminder, we're currently progressing 3 ongoing Phase II trials with dalzanemdor. The DIMENSION and SURVEYOR studies in Huntington's disease, the lead indication for dalzanemdor; and the LIGHTWAVE study in Alzheimer's disease, all of which remain on track to read out in 2024. We look forward to providing updates over the course of the year. We also believe that the launch of ZURZUVAE is going very well, and we'll be sharing an update on specifics during our earnings call next week. Importantly, we continue to progress through 2024 with a strong financial position. As we said on our last earnings call, based on our current operating plan, we anticipate that our existing cash, cash equivalents, marketable securities, anticipated funding from ongoing collaborations and estimated revenues will support operations into 2026. With that, I'll turn the call back over to the operator for Q&A. Operator?

[Operator Instructions] Our first question comes from Anupam Rama with JPMorgan.

Looking to SURVEYOR results in Huntington and the primary endpoint of HD-CAB, are there any similarities and differences, read-throughs that we should consider visa-a-vis the Wechsler endpoint used in PRECEDENT. Just wondering if there's an endpoint sensitivity dynamics that we should be considering here. And also, what's the win scenario for SURVEYOR? We've previously published that dalzanemdor group kind of trending towards that healthy population on HD-CAB as potentially derisking to dementia. Where would you push back on that?

Yes. Anupam, I'll start and I'll turn it over to Laura. Thanks for the question. So I guess what I'll say is the results we've seen here are not necessarily predictive of the results we'll see in Huntington's and Alzheimer's. And as you highlight, the endpoint in the Huntington trials, particularly is very different than the endpoint we saw here. So we anticipate some differences. Your question about trending. Look, we do anticipate that dalzanemdor as designed is meant to improve cognition in these neurodegenerative diseases, not just slow degradation. So we do believe that there will be improvement. The level of improvement we'll have to see when we kind of open the cards for the studies. Laura, you want to add more?

Yes, sure. Relative to your first question, Anupam, about the read-through from one study to the other, I think it's important to keep in mind that the endpoints are different, and the WAIS-IV coding is a single subtest of the WAIS-IV adult intelligence scale, an IQ test, whereas the HD-CAB was actually specifically developed for measuring cognition in patients with Huntington's disease and it's a measure where there are 6 different subtests that comprise the total score. So while they are both measuring cognition, they're doing so in very different ways. As we pointed out in our prepared remarks, it's also true that these populations are very different. And so even though they're both movement disorders, it's true that the relationship between cognition and the movement symptoms is very different, right? In Parkinson's, the motor symptoms and the cognitive impairment typically start around the same time. But in Huntington's, cognitive impairment precedes the onset of the motor symptoms. And so it's easier to differentiate those as you look into the study design. You also asked about the kind of the win scenario for SURVEYOR. And as we've said previously, this is a very small study and its primary purpose is to show the degree of difference in baseline scores in the HD-CAB between healthy volunteers and patients with Huntington's disease. And so win in the study would be a statistically significant difference on the HD-CAB between these 2 measures. That said, we've also included another type of analysis in this study. We've taken the Huntington's disease patients that we used for the first analysis, we've randomized them 1:1 to receive either drug or placebo for a month period. And there's only 20 subjects per group here. So the sample size is very small. What we're looking for here are changes in performance on cognitive measures over time that correlate with changes in function and global measures that will help us put changes in HD-CAB into perspective.

We'll go to our next question from Salveen Richter with Goldman Sachs.

This is Shrunatra on for Salveen. How confident are you into the read-outs in Huntington's later this year? You've mentioned that the results here cannot be extrapolated to other neurodegenerative conditions given the distinct pathophysiology for PD, but could you help us understand how Huntington's might be differentiated in this aspect?

Yes. Thanks for the questions. Send our best to Salveen. So we sort of talked about that already. These Parkinson's results are not necessarily predictive of what we'll see with Huntington's and Alzheimer's. And I think Laura said it on the last call, the pathophysiology of Huntington's and Alzheimer's are very different. We're looking at different endpoints. So we look forward to the results of the next study, and we'll relay more when we have them.

We'll go next to Ritu Baral with TD Cowen.

This is Athena on for Ritu. On your placebo, was it higher than expected? And do you expect such a high placebo rate in your other 3 studies? And then I have a follow-up after.

Yes. Thanks for the question, Athena. Laura, do you want to take that?

Sure. So in studies in neuropsychiatry and cognition as well, the placebo response is something that's observed in studies. And of course, we took steps in the design and execution of the study to control those effects. What I can say at the current time is that, we didn't see any difference between the placebo group and the drug-treated group on the measures of cognition, such as the WAIS-IV coding test and the SCOPA-Cog nor did we see differences on the other endpoints.

So what kind of steps are you taking to manage placebo in your other trials?

Yes. So in the studies, we carefully train the investigators to maintain equipoise that is to not lead the patients to believe that the drug is effective, but instead to engage them as patients who are curious about the effects of the drug and report positive and negative changes and that's really important to manage the placebo response. In addition, on certain measures, we are administering the measures multiple times before baseline so that practice effects are taken into consideration before the baseline score is obtained.

We'll go next to Paul Matteis with Stifel.

This is James on for Paul. Just wondering if you could share any additional color on the secondaries here in terms of what are some of the other endpoints you looked at if they're also being tested in these other studies? And then second, I know you probably can't say much specifics, but just wondering with zuranolone, if you could share what you think the capture rate is in IQVIA data.

Yes, James. So well, let me start with ZURZUVAE, as we said, the launch is going well, and we'll have details to report on the 25th, we do our quarterly call. But again, we're pretty happy with what we're seeing out there as we said multiple times. In terms of the other endpoints, I think we've said it, we saw no difference between drug and placebo. Here, again, the Parkinson's patient population is different than Huntington's and Alzheimer's, and we do not believe these results are necessarily predictive, but we'll see in the other trials.

We'll go next to Tazeen Ahmad with Bank of America.

I was just wondering to get some clarity about time lines for the other 2 studies, Alzheimer's and Huntington's. You've guided to 2024 but should we expect those to be second half of the year updates? And as it relates to the Alzheimer's study, can you just remind us what level of data we should expect to see and what you would consider to be promising?

Yes, I'll take that. Thanks for the question. So the SURVEYOR, LIGHTWAVE and DIMENSION studies are all on track. They're being well executed. The SURVEYOR study is due out in mid-2024 and mid is Q2, Q3; LIGHTWAVE study in Alzheimer's disease and DIMENSION study in Huntington's disease late 2024, Q3, Q4. And just some color, the DIMENSION study due out late this year in Huntington's -- is a large -- relatively large study in Huntington's, designed to show a statistically significant difference between drug and placebo. The SURVEYOR study, as Laura highlighted on the call, is a smaller study where we're looking to confirm the HD-CAB endpoint. And the LIGHTWAVE study in Alzheimer's disease, classic Phase II study, an exploratory study that we're looking at a variety of endpoints to understand the potential impact of dalzanemdor to improve cognitive impairment in Alzheimer's disease. So those are all on track.

Yes. And so with regard to your question, Tazeen, about what we expect to see for the Alzheimer study, I think given the mechanism of action here of NMDA receptor modulation, we expect to see a rapid improvement in cognition over baseline. So as Barry alluded to earlier, these are not disease-modifying programs. These are programs where you actually see a benefit for patients over baseline. And that's what we'll be looking to see in the Alzheimer study.

That will conclude the Q&A portion of today's call. With that, I will turn the call back over to Mr. Greene for closing remarks.

Thank you. Thanks everyone, for joining us today. While we're deeply disappointed by the results of the PRECEDENT study, we continue to believe in the potential of dalzanemdor in the other indications we're studying. We look forward to sharing updates as they become available later this year. Thanks again, and have a great day.

This does conclude today's conference call. Thank you for your participation. You may now disconnect.