Q2 2023 SAGE Therapeutics Inc Earnings Call

Participants

Ashley Kaplowitz

Barry E. Greene; President, CEO & Director; Sage Therapeutics, Inc.

Christopher Benecchi; Chief Business Officer; Sage Therapeutics, Inc.

Kimi E. Iguchi; CFO & Treasurer; Sage Therapeutics, Inc.

Laura Gault; Chief Medical Officer; Sage Therapeutics, Inc.

Akash Tewari; Equity Analyst; Jefferies LLC, Research Division

Anupam Rama; VP and Analyst; JPMorgan Chase & Co, Research Division

Brian Corey Abrahams; Senior Biotechnology Analyst; RBC Capital Markets, Research Division

Eason Lee; Research Analyst; Needham & Company, LLC, Research Division

George Farmer; Analyst; Scotiabank Global Banking and Markets, Research Division

Jay Olson; Executive Director & Senior Analyst; Oppenheimer & Co. Inc., Research Division

Laura Kathryn Chico; SVP of Equity Research; Wedbush Securities Inc., Research Division

Marc Harold Goodman; Senior MD of Neuroscience & Senior Research Analyst; Leerink Partners LLC, Research Division

Paul Andrew Matteis; Co-Head of the Biotech Team, MD & Senior Analyst; Stifel, Nicolaus & Company, Incorporated, Research Division

Ritu Subhalaksmi Baral; MD & Senior Biotechnology Analyst; TD Cowen, Research Division

Salveen Jaswal Richter; VP; Goldman Sachs Group, Inc., Research Division

Sumant Satchidanand Kulkarni; Analyst; Canaccord Genuity Corp., Research Division

Tazeen Ahmad; MD in Equity Research & Research Analyst; BofA Securities, Research Division

Timothy Francis Lugo; Co-Group Head of Biopharma Equity Research, Partner & Research Analyst; William Blair & Company L.L.C., Research Division

Unidentified Analyst

Uy Sieng Ear; VP; Mizuho Securities USA LLC, Research Division

Yasmeen Rahimi; MD & Senior Research Analyst; Piper Sandler & Co., Research Division

Yatin Suneja; MD & Senior Biotechnology Analyst; Guggenheim Securities, LLC, Research Division

Presentation

Operator

Good morning, and welcome to Sage Therapeutics business update.
(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. Please go ahead.

Ashley Kaplowitz

Good morning, and thank you for joining Sage Therapeutics' conference call to discuss business updates, including the FDA approval of zuranolone now branded in the United States as Zurzuvae as a treatment for results with postpartum depression or PPD.
Before we begin, I encourage everyone to go to the Investor and Media section of our website at sagerx.com, where you can find the press release related to today's call as well as slides that we will be reviewing today. 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. Then Laura Gault, our Chief Medical Officer, will review the label for Zurzuvae and supporting clinical data. Our Chief Business Officer, Chris Benecchi, will highlight our commercial preparations and launch plans for Zurzuvae and PPD; and Kimi Iguchi, our Chief Financial Officer, will close with a financial update. Jim Doherty, our Chief Development Officer, will also be available during the Q&A portion of the call.
With that, I'll now turn the call over to Barry.

Barry E. Greene

Thanks, Ashley, and thank you, everyone, for joining us today. This is a historic moment for all women suffering from PPD. On Friday, we and our collaboration partner, Biogen received approval from the FDA for zuranolone now known as Zurzuvae for the treatment of adults with PPD. Zurzuvae is the first and only oral treatment specifically indicated for PPD. Hundreds of thousands of women have been waiting and hoping for this moment. We hear so many devastating stories about the impact of PPD, and many of us have been personally touched by this often neglected condition that's estimated to affect approximately 500,000 women each year. Today, there is a new source of hope.
Before we begin, I'd like to take a moment to sincerely thank the dedicated health care providers, patients, caregivers and advocates who have made today possible, especially the patients who have placed their immense trust in us throughout our clinical trials. We are and will always be an inspiration for us. We applaud your dedication to seeking new treatment options for PPD. I'd also like to comment on the status of our NDA seeking approval for zuranolone in the treatment of major depressive disorder, or MDD. As many of you have seen, late on Friday, we received a complete response letter from the FDA for zuranolone as a treatment for adults with MDD.
We are devastated for patients and deeply disappointed with the FDA's position in issuing the CRL. We are reviewing feedback from the FDA and evaluating next steps. As we have clarity, we'll share more. Many have questions will affect we can answer and others that we just simply can't at this time. Now just to be clear, progress in treating depression is not keeping pace with the accelerated prevalence and burden deviating disease. Despite current treatment options, people with depression continue to struggle, a change in the treatment paradigm and approval of novel options is desperately needed. Later in the call, Kimi will provide an update on the financial implications given this development.
For those of us who have been biopharmaceutical industry for decades, going through adversity is an opportunity to come out more lean and agile on the other side. We will work through this. But I can say for now, for Sage is that we'll be making smart, disciplined decisions intended to maintain a robust balance sheet. This is an opportunity to emerge as a stronger company with a refined strategy and a focused approach.
Now turning back to our primary focus for today's call. Following Friday's approval, we have the first and only oral treatment specifically indicated for women with PPD. As a 14-day short course treatment, we believe that Zurzuvae will provide women with PPD, a desperately needed new treatment option with the potential to treat their depressive symptoms quickly without the need for chronic treatment. Given the limited treatment options available for women with PPD, we're excited about the opportunity to bring Zurzuvae to those patients. We expect Zurzuvae to launch and be commercially available in the fourth quarter of 2023 shortly following the completion of scheduling as a controlled substance by the U.S. DEA, which is expected to occur within 90 days of this approval. The widespread national media attention on the approval of Zurzuvae for a treatment of women with PPD reinforces that this is truly a critical milestone given the significant unmet need that currently exists for the treatment of women with this disease.
PPD is a serious medical condition. We know that women with PPD often face extreme challenges in their daily lives and with (inaudible), often feeling overwhelmed, anxious and isolated. If less untreated, depressive symptoms can persist beyond a year post part, which can be associated with prolonged maternal morbidity and mortality. While women's PPD can be associated with short-term consequences of newborn, it can also result in long-term developmental, psychological, cognitive and physical ramifications for children. The devastating generational impact of PPD has been often overlooked. With the approval of Zurzuvae, we now have the first and only oral treatment indicated for women with PPD, and we stand ready to help. I want to take a moment to recognize the entire Sage and Biogen teams and our collaborators who brought us to this important day for women with PPD. None of what we do is possible without your hard work, dedication and faltering belief that, together, we have the potential to change the mental health landscape. I thank everyone of you for your contributions towards our mission.
With that, I'll now turn the call over to Laura.

Laura Gault

Thanks, Barry, and good morning, everyone. The approval of Zurzuvae in adults with PPD is a pivotal moment for the women who stand to benefit from this important therapy and a great moment for Sage and Biogen. The approval of Zurzuvae further builds the [PAM] foundation laid with Sage's first approved treatment for PPD and reaffirms our commitment to helping mothers in need.
I will start by providing background on Zurzuvae, then I will highlight details of the prescribing information. The mechanism of action of Zurzuvae in the treatment of PPD is thought to be related to its positive allosteric modulation of GABA-A receptors, though the mechanism of action is not fully understood. As the primary inhibitory neurotransmitter, GABA immunobuteric acid or GABA, it's widely distributed throughout the brain. It is present in brain regions functionally associated with mood, decision-making and other behaviors. GABAergic's neurotransmission is vital for normal brain function and evidence shows that GABAergic function may be disrupted in postpartum depression.
Now I will summarize the clinical data supporting approval of Zurzuvae in women with PPD. The approval is based on data from the NEST clinical development program, which included the SKYLARK and ROBIN study. These studies were Phase III randomized, double-blind, placebo-controlled trials that evaluated a 14-day treatment course of Zurzuvae once daily, used alone or as an adjunct to oral antidepressant therapy in women aged 18 to 45 with PPD. Both studies met the primary end point showing a statistically significant improvement over placebo at day 15 on the 17-item Hamilton Depression Rating Scale, a common measure of depression severity. As shown in the figures, in both the SKYLARK and ROBIN studies and improvement in depressive symptoms was seen as early as day 3 and was maintained at day 45, 4 weeks post treatment. The potential for rapid onset and the magnitude and durability of effect are all very important to women living with PPD.
Now I'll provide an overview of the prescribing information, including the safety information. The recommended dosage of Zurzuvae is 50 milligrams taken orally once daily in the evening for 14 days with fat-containing food. The dose may be reduced to 40 milligrams once daily, if CNS-depressant effects occur. Zurzuvae can be used alone or as an adjunct to oral antidepressant therapy. Importantly, there are no contraindications in the label. In terms of safety, the boxed warning state that Zurzuvae causes driving impairment and patients are advised not to drive or engage in other potentially hazardous activities until at least 12 hours after each dose.
Patients should also be advised that they may not be able to assess their own driving competence or the degree of impairment caused by Zurzuvae. The label also describes the most common adverse reactions that occurred in at least 5% of patients who received Zurzuvae and at a higher rate than placebo. These were somnolence, nasopharyngitis, dizziness, fatigue, urinary tract infection and diarrhea. And finally, while I am personally disappointed that we will not be able to provide a new treatment option to patients living with MDD today as we had hoped. I am also truly excited that we and Biogen will be offering the first oral rapid-acting short course treatment for women with PPD. I can tell you from my clinical experience, that we have the potential to help a lot of women with this debilitating condition.
With that, I'll turn the call over to Chris. Chris?

Christopher Benecchi

Thanks, Laura. I'm excited to be with all of you to share updates on our preparations for the planned commercial launch of Zurzuvae as treatment for adults with PPD.
Today is the day of celebration, the approval of Zurzuvae reaffirms our call to action and the urgency that exists to bring this critical new treatment to women suffering with PPD. We know that PPD is all too prevalent in our society and the burdens that it places on new mothers can seem insurmountable. With this in mind, we are incredibly excited about the opportunity to bring a novel treatment option to market that we believe brings us closer to transforming the care of women living with PPD. We have been preparing for a potential launch for many months by advancing permitted pre-approval information exchange with payers continuing scientific exchange with health care providers and engaging with patient advocacy organizations.
Further, we have built an internal team of experienced commercial leaders whose depth and breadth of knowledge and experience to further expand our go-to-market capability. We believe our preparations will enable us to be fully ready to execute the launch of Zurzuvae to treat women with PPD by year-end. The tremendous opportunity exists in PPD with estimates of approximately 1 in 8 women experiencing PPD symptoms in the U.S. each year. That's about 0.5 million women. Today, we know that only about 50% of PPD cases are diagnosed due to an adequate screening or too many women with PPD are not getting the care that they need because of the limited options available to them.
With the approval of Zurzuvae, we believe we have the potential to be a first-line therapy and become the standard of care. Our planned launch focus will be on women diagnosed with PPD requiring treatment. We believe the addressable patient population at launch includes those who are newly diagnosed and those experiencing unresolved symptoms despite taking antidepressant treatment. We're not going to stop there with our efforts to help women with PPD. We believe it will also be important to support efforts to increase diagnosis rates in PPD building upon the recent guidelines updated by the American College of Obstetricians and Gynecologists, which recommends increased screening during the pre and postpartum periods.
While thinking big about the unmet need in treating women with PPD, we, alongside our collaboration partner, Biogen, expect to implement a focused launch strategy that can be scaled with success to reach more women with PPD. We plan to leverage our omnichannel capabilities powered by data and predictive analytics that we expect will enable us to efficiently reach a broad base of health care professionals who treat PPD. At launch, we plan to have our focused field sales teams targeting high-prescribing psychiatrists OB/GYN and PCPs who treat women with PPD with a consistent frequency of promotional messages and resources.
Additionally, we plan to advance nonpersonal promotion efforts with digital platforms designed to reach a broad set of HCPs treating these patients. These digital platforms are intended to unite data from our content, media and in-person interactions. It's also vital that our omnichannel work directly reaches women with PPD at launch. Our planned efforts are intended to directly engage these women with education and resources so they are aware of Zurzuvae as a treatment option in PPD and are prepared to have a meaningful discussion about Zurzuvae with their HCPs. HCPs will be a central focus of this planned omnichannel approach as they will ultimately be directly responsible for making the decision to prescribe Zurzuvae in the treatment of women with PPD. We believe early and positive clinical experience and accessibility for women with PPD will be critical to building confidence and accelerating adoption of Zurzuvae in this indication.
HCP experience with Zurzuvae and treating women with PPD will be instrumental to update. We plan to have initiatives at launch in support of this. First, a full course therapy sample program that will distribute a 14-day short course of therapy to appropriate HCPs to trial Zurzuvae in the treatment of women with PPD. We believe this targeted early experience program will be critical to enabling rapid clinical experience with Zurzuvae that will ultimately drive long-term uptake in this PPD population.
The second planned initiative is intended to help enable our goal that every woman with PPD whose prescribed Zurzuvae can access it, regardless of their financial circumstances. We plan to facilitate this effort through patient access programs at launch including co-pay assistance for eligible women with PPD, who are commercially insured. We intend to discuss our planned commercial strategy, these initiatives and other planned support for women with PPD closer to the time of launch. We are collaborating across the ecosystem with payers, health care providers, patient advocates and policymakers with the goal of providing a model for care that works in the best interest of patients to PPD.
In every state, there is a call to action to prioritize expanding and increasing access to treatment for maternal mental health. There is a need for solutions to address the significant gaps in care. As a new standard of care for women with PPD and a harbinger for change, Zurzuvae could improve outcomes for these patients, potentially lessen the overall burden and costs on society and more importantly, support these mothers and their intent to help them thrive. We believe that a combination of these efforts will help build a positive experience with Zurzuvae both for women with PPD and HCPs who treat them.
Finally, let's turn to market access. While it's too early to talk about price, here's how we're thinking about it. We plan to implement a PPD access strategy that recognizes the unmet need considerable economic burden and a novel clinical profile of Zurzuvae. We will continue to work with payers with the goal of favorable access and identify ways we might partner, including the potential role of value-based agreements. We have had numerous permitted engagements with payers in the month leading up to PDUFA, and payers recognize the significant unmet need for new treatment options in PPD and have been enthusiastic about the clinical profile of Zurzuvae in this indication.
As we said, our goal is that every woman with PPD who is prescribed Zurzuvae can access it regardless of financial circumstances. As part of our final preparation, Sage and Biogen are currently working to determine adjustments to our thinking on price given the PPD label. We plan to provide more clarity on our overall thinking closer to product launch. What we can say now is that approximately 55% of U.S. births are covered by commercial insurance and our planned patient access approach for women with PPD were commercially insured as the goal of enabling a vast majority of these women have access to Zurzuvae with minimal out-of-pocket-costs. The remaining birds received covers through Medicaid, which requires little or no financial responsibility for the patient. We expect decisions by payers is to cover Zurzuvae the treatment for women with PPD to be made in the months following DEA scheduling.
We are prepared and eager to implement this launch strategy that we believe has the potential to maximize the impact of Zurzuvae in the treatment of women with PPD by aligning with each of our stakeholders. Through our planned commercialization efforts, we expect to rapidly reach both women with PPD and the HCPs to treat them. Finally, our goal is to enable a favorable access environment so that women with PPD who are prescribed Zurzuvae are able to get it both rapidly and affordably. We feel this urgency because women with PPD are waiting.
I'll now turn it over to Kimi to provide a financial update. Kimi?

Kimi E. Iguchi

Thanks, Chris, and good morning, everyone. I want to share my excitement for this new chapter of opportunity and hope for women with PPD. We're energized to push forward and help so many of these women. And as Barry noted earlier, we are reviewing the feedback from the FDA and the CRL for MDD and evaluating next steps.
Given these recent developments, I'd like to briefly comment on what this update means for our financial position. We will continue to make smart, disciplined decisions as we work to balance cash on hand and revenue generation with our operating expenses. We believe we are well capitalized with $1 billion in cash as of June 30. And based upon our current estimates, we expect that our cash, cash equivalents and marketable securities, along with anticipated funding from ongoing collaboration and potential revenue will support operations into 2025.
With that said, given the update relating to the CRL and MTD, we are refining our strategy. We plan to take action with the goal of extending our cash runway and are currently evaluating resource allocation, including pipeline prioritization and a workforce reorganization. As a result, we also anticipate operating expenses to decrease in 2024. As Barry said, we are working towards a successful launch in PPD and believe the changes we plan to make will enable us to be a stronger, leaner and a more focused company. We expect to provide greater detail and next steps before the end of the third quarter as our plans unfold.
Before I turn the call over to Ashley for Q&A., I want to reiterate our excitement around this monumental milestone for Sage. We look forward to the commercial availability of Zurzuvae later this year and will act with urgency to help enable women with PPD who are prescribed Zurzuvae to have access to it. Let me also add that I know there are many questions out there given the CRL and MDD. As we always have, we'll provide updates when we can.
With that, I'll turn the call over to Ashley.

Ashley Kaplowitz

Thanks, Kimi.
(Operator Instructions)
Now I'll turn it over to the operator to handle Q&A. Operator?

Question and Answer Session

Operator

(Operator Instructions)
We'll go first to Salveen Richter with Goldman Sachs.

Salveen Jaswal Richter

Congratulations on the approval here in PPD. Maybe just to start here with the launch. You talked about the outreach effort with the prescribers. Could you just quantify the prescriber base for us and help us understand the targeted approach and also how a sampling program will work in the context of ensuring you're not soaking up all that initial demand?

Barry E. Greene

Yes, Salveen, thanks for the congratulatory note. We're really excited about the approval of Zurzuvae in the treatment of women for PPD, and we're really looking forward to helping these women. We're excited about the opportunity and believe we have a strong business case with a right-sized organization at the right price, we've got many tailwinds that may help us in launching Zurzuvae for the treatment of women. As we noted, it's a big unmet need, about 0.5 million women in the U.S. experienced symptoms each year. The fact that this first and only oral treatment approved for women with PPD. And we believe health care providers are looking for a tool like this to solve their dilemma and what to do when they diagnose the mom with PPD. And we know that the payers, and I'll ask Chris to comment more about the sample program. .
We are looking forward to a new option for PPD. And certainly -- and we mentioned this in the script that every state and policies, they're implementing policies that we believe will enable access for women at PPD. We can't talk about yet our target numbers per se or the size of the sampling program, but maybe Chris can talk about the importance of the full course treatment and activating health care providers to see the results and with their own eyes.

Christopher Benecchi

Yes. Thanks, Barry. So at launch, we're going to focus our field sales team, as I said in my opening remarks on high prescribing OB/GYN psychiatrists and PCPs. And as you noted, it's going to be really important for that group of physicians to have early experience with Zurzuvae and what that entails is giving them access to a 14-day full course therapy sample so that they have that experience to see the impact that Zurzuvae can have on women living with PPD in that practice.

Salveen Jaswal Richter

Can I just follow up just quickly just to get a sense of quantification of that physician base that you're targeting initially? And just help us understand the flexibility you have on pricing and PPD?

Barry E. Greene

Yes. So right now, we really can't talk about the kind of the size of the physician base. As you're well aware, we and our collaborators Biogen have been working wholeheartedly on preparing for a PPD and MDD launch. It has done a lot of work. Of course, we have PPD scenarios that played out, but now the work begins for our PPD focused launch. As we closer to launch, we'll come back out with specifics about how we're targeting it. As Chris said in his remarks, we're thinking big about the opportunity, but we're going to start in a very focused way and have clear metrics to scale with success. In terms of pricing, as I said, we think that with the right price and the right sized organization, we have a very strong business case, and we're setting about to do that work now.

Operator

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

Ritu Subhalaksmi Baral

And I'd like to add my congratulations that the drug is available for PPD patients. I would like to focus a little bit on MDD, Barry. I know you can't talk too much about the interactions and the status. But could you go through at least what happened during the review? Any review issues that were discussed at the mid-cycle review that are now a focus of unresolved questions? And then what is your expectations of timing for a typing needing to reach clarity on what else is needed?

Barry E. Greene

Yes, Ritu, thank you for the congratulatory note. And as you asked, we'll focus on this MDD. So just to be clear, we're extremely disappointed for patients with MDD. We're more devastated that we're not able to help them right now. And actually, we do not agree with the FDA's view on Zurzuvae for MDD. Mental health crisis is having a devastating impact on our communities, as you know, and we're in desperate need of innovation. So if I back up we in accordance with FDA last year filed our NDA package, and we have started the roll in submission earlier in the year with some of the modules.
In the clinical section, we had what we believe was 6 of 7 placebo-controlled, positive clinical studies to support of that package, which we believe was supportive of both PPD and MDD. We learned late in the review cycle about FDA's view on approvability for MDD. And as we noted, we received the CRL late on Friday. So the review they did filing pack involves an analysis of the submitted information. And we really can't speculate on the FDA's thinking or decision making. We can simply reflect on what they put in the CRL, which again, we got late Friday. So we're reviewing the feedback and evaluating the next steps and we're excited to launch Zurzuvae in PPD as we work with our collaborative Biogen in understanding what our next steps with FDA on MDD are.

Ritu Subhalaksmi Baral

Do you anticipate interaction even before a Type A meetings?

Barry E. Greene

I really can't say anything else you took except that we advise and reviewing the feedback and evaluating the next steps. We've got the right team on it.

Operator

We'll go next to Paul Matteis with Stifel.

Paul Andrew Matteis

I guess without being able to talk about the price, which was sort of my first question, I wanted to ask a little bit about the label because I think there are a few things on there that surprised investors that might have read through onto the pipeline. One was commentary around abuse. Another was a commentary on a prior dog study, which seems like it might have been an impediment to chronic administration. And then also restrictions around driving. How do -- are those surprising to you that they were on the label, one? And two, do those put into question the profile of SAGE-324, which has been given chronically and has the same mechanism of action?

Barry E. Greene

Paul, thank you for the question. Let me just start out and then I'll turn it to Laura to talk about some of the specifics. So we believe that the label that's provided for us for the treatment of PPD is a fine label. It's a label that is instructive. It's protective and it's instructive for health care providers and their patients. Certainly a label that allows us to sell Zurzuvae for the treatment of PPD for women and a label we can move forward. So nothing in the label is surprising per se or problematic. But maybe Laura can talk more about that.

Laura Gault

Sure. Thanks for the question, Paul. I'll start first with your question related to driving. So as you see in the label, there is a box warning for driving that instructs prescribers to counsel their patients not to drive or are engaged in other potentially hazardous activities into at least 12 hours after each dose of Zurzuvae for the duration of the 14-day treatment course. This recommendation was based on data that's included at the end of the label that summarizes the results of 2 driving studies that Sage conducted. I can summarize briefly the results from the 50-milligram dose because that's the most relevant since it's the clinical dose. At the 50-milligram dose, Zurzuvae caused driving impairment after 1 day of dosing and after 7 days of dosing, which was the last time point measured. The label contains very clear instructions for patients. And from our perspective, patient safety has to be top of mind. And it's good that these clear instructions are in the label because it will enable physicians to have good discussions with our patients about the benefit risk profile of Zurzuvae.
With regard to abuse liability. This is not unexpected for a drug with a mechanism of action like Zurzuvae. It -- as you can see from what's in the label, there are results from these liability studies that show that Zurzuvae at 30 and 60 milligrams has less abuse potential than the control, which was a benzodiazepine. But at the 90-milligram dose was approximately equivalent in a best potential to vetoes. Based on this, we expect that Zurzuvae will be DEA-scheduled likely Schedule IV like similar drugs like benzodiazepines. The prescribers who will be prescribing medications for PPD are experienced in prescribing Schedule IV agents, and we don't expect this to be an impediment to use.

Barry E. Greene

Yes. Let me wrap back with your question about the rest of the pipeline or GABA PAM. So as we stated, we intend to complete the KINETIC 2 study for SAGE-324 at the end of the year. Every new chemical entity has it's unique entity, and it's hard to understand if there are any read-throughs in this label or not, Typically, labeling occurs on the basis of data for each individual product. So that's what we can say right now.

Operator

We'll go next to Yasmeen Rahimi with Piper Sandler.

Yasmeen Rahimi

I know there's a lot that you can tell us about MDD, but could you maybe comment on what are some of the requirements that you would want to maybe not go through in case like if there's multiple additional studies required. Is that something that you would want to do I guess what we're trying to figure out is like your commitment to really move this forward in getting this approved? And then the second question for me is just sort of helping us understand how many courses or (inaudible) would be used in patients with PPD, whether you would recommend 1 or 2? And if you could maybe help us understand sort of the use of this product within 1 year? And I'll jump back into the queue.

Barry E. Greene

Yes, thanks for the question. Let me start with PPD, and I'll circle back. So what we saw in our clinical studies on the profile of Zurzuvae was these women that took Zurzuvae in the evening with a meal, saw rapid response as early as 3 days, continued response up to day 15, that's clinically relevant and statistically different than placebo. And that effect has lasted out to day 45 with statistical significance to clinical relevant. So with that profile, we envision that a mom would take 1 14-day course in the course of the year because the trigger event was getting pregnant or having that baby.
So I guess the short answer is one. Now looping back to this year. I'll repeat it, and we're extremely disappointed for patients, and we don't agree with the FDA's view. They issued the CRL related to NDA for zuranolone for the treatment of adults with MDD and looking at which is, the application did not provide substantial evidence of effectiveness to support the approval of zuranolone, the treatment of MDD and that additional study or studies are needed. We're reviewing the feedback and evaluating next steps, and we really can't comment further other than that.

Operator

We'll go next to Anupam Rama with JPMorgan.

Anupam Rama

And congrats on the PPD approval here. Barry, you've mentioned a couple of times the right price in PPD. Maybe you could give us a little bit of color on the book end to kind of consider, whether it's ZULRESSO or other products. And what are the key considerations to getting to that right price?

Barry E. Greene

Yes, Anupam, I'll start and I'll turn it over to Chris up and again, thank you very much for the congratulatory note. Again, we're really excited to help women suffering from PPD. Just to be clear, we can't comment on price or bookends right now. As I mentioned, we did a significant amount of approved pre-commercial payer introduction with the plan to launch MDD and PPD. We had significant amount of conversations about what the value-based agreements would look like. And frankly, we're prepared for PPD, MDD launch with payers to move forward in contracting. We now have to go back, given the results from Friday and the fact that we got the CRL Friday and reengaged payers, but we have some basis to do that. Maybe Chris will talk more about that.

Christopher Benecchi

Yes, sure. Thanks, Barry. We've historically said to be truly transformational. We must be accessible with Zurzuvae. We're committed to the goal of rapid and equitable access to Zurzuvae for the hundreds of thousands of women who live with PPD. When we think about the approval of Zurzuvae and the treatment of women with PPD in the absence of an MDD indication, we'll need to consider the size of the patient population, obviously, the strength of the clinical data, including statistical significance at all time points and the clinical potential of Zurzuvae to address significant unmet need for new innovative options in the treatment of postpartum depression. These factors ultimately are what will influence our target wholesale acquisition cost. However, regardless of the WACC, our goal is that every woman, as I said, with PPD is prescribed Zurzuvae access it regardless of the financial circumstances.

Operator

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

Tazeen Ahmad

I just wanted to clarify, did FDA asked you to submit both applications for PPD and MDD at the same time? Or was it the preference or was the safest preference to do it together? Also, you mentioned that the comments from FDA about the concerns around MDD didn't comment so late in the review cycle. Would there have been any opportunity to have an AdCom when they brought up the concerns in order to be able to flush it out better?

Barry E. Greene

Yes, Tazeen, several different questions in there. So if I go back historically 2.5, 3 years. We did, as Sage, announced that we were going to file the NDA for both PPD and MDD. You might remember, at some point, it looks like our PPD study was delayed. And at that point, we went out and said, we're going to file MDD first and PPD after that. And then as the PPD study caught up, we announced that we were going to start a rolling submission and then launch both PPD and MDD at the end of the year. All of that was done in concordance with the FDA. In terms of what I can say about the interactions, as you noted, we filed the NDA. The FDA in February, we announced the FDA gave us a PDUFA date, August 5 and prior year review. And the FDA told us there was no AdCom required, which at the time, obviously, we took a good positive sum. And then just to add to that, we found out late in the review cycle about the FDA's view on the approvability of MDD. Other than that, I can't say much more.

Operator

We'll go next to Brian Abrahams with RBC Capital Markets.

Brian Corey Abrahams

My congratulations as well on the approval in PPD. Maybe a question on MDD. Do you see a potential for a more narrow or refined indication like the treatment of an acute depressive episode or adjunctive treatment? Is this something that was ever discussed with the agency or potentially on the table? And if this is a possibility, do you think additional studies would be required to support that or not?

Barry E. Greene

Brian, thank you very much for a very insightful question. I guess what we can say at this time is we're extremely disappointed for patients, whether it's for the treatment of MDD or different indications, and we don't agree with the FDA's view. We are evaluating the CRL. And as soon as we can provide more clarity, we will on what the next steps are. We really do believe that zuranolone should be available to treat patients with MDD, but we've got to get there. And until we're there, we'll be solely focused in marketing for Zurzuvae to treat women with PPD.

Operator

We'll go next to Jay Olson with Oppenheimer.

Jay Olson

Congrats on the PPD approval. We have a financial question. Since you'll be eligible for a $225 million milestone from Biogen and you'll also experience potentially significant cost savings in the near term without an MDD launch. Are you in a financial position to accelerate the development of SAGE-718 and do you plan to continue that development independently or potentially seek a partnership?

Barry E. Greene

Yes, Jay, first of all, thanks for the congratulatory note. I'll let Kimi talk about the milestone and some of our financial thinking. But in terms of SAGE-718, we continue to be really excited by developing SAGE-718 or wholly owned an NDA. PAM, the data we've seen to date is exciting in terms of cognitive improvement that we saw in Huntington's, Parkinson's and Alzheimer's, albeit probe studies and open-label studies. As you're well aware, we have a significant #5 well-controlled studies underway right now, several in Huntington's and then Parkinson's and Alzheimer's. Those should set us up for a very [de] rich year next year in terms of SAGE-718, and as we've commented before, we believe that the Huntington's package is set up in a way that if we see robust data and given that it's an orphan indication, we do believe there's some regulatory flexibility, and we'll pursue that a flexible approach.
Whether it accelerates or not is another question. That's a matter of clinical studies enrolling in -- and how rapid they enroll. But we have said previously that we're excited at Sage alone to launch SAGE-718 in Huntington's given the orphan nature and the sort of smaller capital footprint that needs, we're excited to do that. Kimi, can you talk about kind of milestones and other financial guidance?

Kimi E. Iguchi

Sure. It's a great question. So just a reminder, earlier I talked about that based on our current estimates, we expect that the cash on hand anticipated funding from collaborations and potential revenue will support our operations into 2025. And we also mentioned that we have the potential to earn a milestone payment of $75 million from Biogen related to the first commercial sale of Zurzuvae for the treatment of PPD. But to be clear, based on the receipt of the CRL on Friday evening, we are looking forward to and plan to refine our strategy and spend. So that's going to really include an evaluation of our resource allocation. We'll be looking at the pipeline. We'll be looking at a workforce reorganization and that's all with the goal of extending our cash runway. We expect our evaluation of our resource allocation will incorporate the feedback from the FDA that we have in that quick time. So we expect that we'll be able to update all of you by the end of the third quarter, and we'll certainly talk to you once we have it on (inaudible).

Barry E. Greene

And Jay, just some additional color since you mentioned it, as Chris Benecchi said, we're thinking big about the opportunity to help on PPD is 0.5 million women, but it certainly starts with a very focused footprint in terms of commercialization, omnichannel. And then we'll have markers that scale that with success, but we're certainly not going to overscale the launch for PPD.

Operator

We'll go next to Sumant Kulkarni with Canaccord.

Sumant Satchidanand Kulkarni

How collaborative with Biogen do you expect the Zurzuvae launch to be? And do you expect to announce pricing on PPD prior to interacting with the FDA on MDD or after?

Barry E. Greene

Sumant, thank you for those questions. So in terms of Biogen, we at Biogen have been working extraordinarily collaboratively preparing for the potential of an MDD and PPD launch if approved. We -- and they got the label and the approval for PPD Friday night and the CRL for Friday night. And then as you saw, we together issued a joint press release a couple of hours later, announcing that we plan to launch Zurzuvae for PPD and have that launch available in the fourth quarter of this year and shortly after the DEA scheduling, which we -- it takes approximately 90 days. So that was a joint collaborative press release. Now with the approval of PPD in front of us and the CRL, we now turn our attention to working towards the appropriate launch of PPD in response to CRL and plan on doing that, as I said together. In terms of price timing, as we get closer to launch, we will be talking about our access strategy as well as some of the other aspects of our commercialization because that will be closer to launch.

Operator

We'll go next to Laura Chico with Wedbush Securities.

Laura Kathryn Chico

I guess just kind of following up on that. I don't know if there's any additional color you can provide on kind of the remainder of '23 in terms of the acceleration on SG&A in terms of PPD launch preparation. And I guess I'm trying to understand kind of the allocation of resources also between you and Biogen. And I guess I'm just trying to understand more broadly, Barry, you had some good comments with respect to how those 2 partners have interacted over the weekend here. But what is Biogen's commitment to a PPD launch that would just seem a little bit of a difference than if MDD was involved? Not sure if you can add any color there.

Barry E. Greene

Yes, Laura, thanks for all those questions and one question. So I guess what I can say is that, look, I can point to the joint press release where we and Biogen committed that we have Zurzuvae to available for PPD in the fourth quarter, shortly after DA scheduling. I can't really talk more about the allocation of resource yet. As I said, we worked really hard and preparing for the potential of an MDD and PPD launch if approved and had that clearly well mapped. With the news on Friday, the approval of PPD, the CRL for MDD, we're now turning our attention to do the work necessary for what the launch of PPD looks like. And as we get closer to launch, we can talk more about what that looks like. In terms of SG&A or other builds, as Kimi said, we anticipate looking at all resources as well as our workforce. And as I've commented earlier, we do believe that even in PPD with the right price and the right size of organization, we've got a really strong business case.

Operator

We'll go to our next caller from Ami Fadia with Needham & Company.

Eason Lee

This is Eason Lee on for Ami. Maybe just kind of on -- regarding kind of Biogen again. I mean -- just I think just kind of the recent comments on earnings and the acquisition they announced it just -- I think it's created kind of a perception by some that maybe there could be less committed to MDD. So I kind of hear you on the joint press release and stuff. But maybe like how much -- I mean, can you give us a sense just like how much commitment do you think Biogen is on surround alone and MDD? And then with regards to a potential kind of resubmission effort and kind of the effort that would be required for that, like, I mean, what role would you anticipate Biogen kind of playing in that?

Barry E. Greene

Yes, Eason, thank you for the question. I really can't say anything more than we've already said. We're preparing for the launch of the Zurzuvae and PPD and examining the CRL. We're reviewing the feedback and evaluating the next steps. I can't really comment more than that.

Operator

We'll go next to Vikram Purohit with Morgan Stanley.

Unidentified Analyst

This is (inaudible) on for Vikram and congrats approvals. I have a quick question about PPD. What do you expect the (inaudible) gross to net to be for Zurzuvae? And how long do you think you can you can get there?

Barry E. Greene

It's -- since we already talked about the idea that we're going to turn our intention to work on WACC and launch. It's too early to talk about gross to net.

Operator

We'll go next to Marc Goodman with Leerink.

Marc Harold Goodman

My question is around MDD. And you -- in guidance from FDA, they talk about 2 drug placebo controlled studies that have to show duration of effect. And you clearly had that in one of your studies, but it's not clear that you had that in a second study. And I was curious if that was the reason that the FDA did not approve the MDD? And if that is the case or whatever the case is, are you and your partner has committed to doing another study in order to do whatever the FDA needs to get MDD?

Barry E. Greene

Thanks for the question, Marc. As I said, we're extremely disappointed for patients with the CRL, and we don't agree with the FDA's views. So that's going to say right now. All we can say is what we did, which in accordance with FDA, we filed our NDA last year with what we believe was 6 of 7 positive studies and at the end point the oral-controlled studies. That was our belief set when we filed the NDA, of course. And we cannot just say with the CRL states as I've already said, which is that the application labs, substantial evidence of effectiveness and that additional study or studies are required. So we intend on evaluating the CRL and pursuing next steps in Biogen.

Marc Harold Goodman

But if you need to do another study, which the FDA is saying, are you -- we're going to do another study, we'll do whatever it takes to get MDD or it's that clear yet?

Barry E. Greene

So Marc, let me just repeat. We're disappointed for patients that we don't agree with the FDA. We're evaluating the feedback and reviewing next steps.

Operator

We'll go next to Akash Tewari with Jefferies.

Akash Tewari

Congrats on the PPD approval. I guess in your collaboration agreement, it mentioned that Biogen could terminate the contract on a product-by-product basis by giving 150 days in advanced written notice. Is there a development juncture where Biogen wouldn't be able to terminate the agreement, let's say, for zuranolone? And have you received any notice from Biogen at this point? I just wanted to confirm.

Barry E. Greene

Yes, Akash. I guess what I can say is there are termination provisions in the agreement. I can also say that after receiving the PPD approval and the CRL, we jointly worked on the press release that you saw committed to launch of Zurzuvae in the fourth quarter for PPD shortly after the DEA scheduling. So I'll leave it at that.

Operator

We'll go next to Tim Lugo with William Blair.

Timothy Francis Lugo

Can you walk us through the scheduling process in the next few months? It seems like most are viewing it as a formality. However, we've had rises in benzo, they're assuming abuse in recent years and sometimes class-wide issues can get wrapped up into single product discussions. So you just help us frame the risk around that process?

Barry E. Greene

Yes. Thanks for the question, Tim. So the FDA refers to Zurzuvae for DEA for Schedule review. We anticipate that to occur within 90 days. And as you heard Laura say, we expect to have a Class IV label, which is not an issue for prescribers or for patients.

Operator

Will go next to George Farmer with Scotiabank.

George Farmer

Two things with me real quickly. How long do you think that the sampling program will last as we think about modeling drug penetration in the market? And also, can you speak to your comfort level of risk to feeding newborns and if you've done any particular studies to address that?

Barry E. Greene

Yes. Thanks for the question, George. I'm glad for some new questions. Thank you. So let me start a little bit, and then I'll ask Chris to talk about sampling and then Laura to talk about breastfeeding. So if you take a step back, we believe that health care provider experience with Zurzuvae in their own hands, seeing the profound and rapid effects that we saw in clinical trials that Zurzuvae has the potential to have on models with PPD is critical to strategy. So physician or health care provider activation and that's where we use the sampling program. Chris, can you talk about -- you can't talk specific color on Houston and then we can turn it over to Laura for breastfeeding.

Christopher Benecchi

Yes. So Barry, what I can say is that, as in my prepared remarks, we see this as an early experience program that really focuses on giving physicians that experience in and around the time of launch once we have DEA scheduling. That's a finite window of opportunity for physicians to use that. The actual duration more later as we talk about our actual go-to-market strategy and the details of commercialization. But it is a finite window that we see that in around the time of launch.

Barry E. Greene

And what I can add is we're not talking about all the markers, but it's likely in our quarterly calls after the launch of Zurzuvae for PPD, we'll be providing some color on how many samples are out there and how that's going. Laura, do you want to talk about the breastfeeding?

Laura Gault

Sure. Sure, you raised an important question, George, given that this is going to be used in a population that's breastfeeding. Sage has done a clinical observation study and the results of those -- of that study showed that there's very low levels of Zurzuvae present in human milk. In fact, the calculated maximum relative to infant dose for Zurzuvae is less than 1%. So what it says in the label then is that a physician and patient should consider the development on health benefits of breastfeeding weighed with the potential exposure to Zurzuvae in the breast milk. It's really important that we have this data in the label. It differentiates this label from other drugs that are used off-label to treat MDD, where this data is either absent or the levels present in breast milk are much higher.

Operator

We'll go next to Uy Ear with Mizuho.

Uy Sieng Ear

I have two quick ones, if that's okay. So the first one, do you think it's easier now would only PPD indications for you to obtain value base? And second one, just could you sort of remind us in the collaboration with Biogen. What are -- are there any fees if you if the collaboration is terminated any payments in either directions you have to pay Biogen or Biogen have to pay you?

Barry E. Greene

Yes. Let me start with the second, Uy. So there certainly -- there are termination provisions in the contract that's about as far as I can go on that one. And then again, very insightful. We have -- as I mentioned, we have many tailwinds for PPD focused launch. It's a large unmet need with about 0.5 million women in the U.S. experience symptoms each year, only about half of whom are diagnosed per year. So a real big opportunity on improving diagnosis. This will be the first and only oral treatment approved for women with PPD. So that's a big advantage. And then talking to health care providers who prescribe they're anxious to have a product like Zurzuvae.
The issue they have today if they can't get access to ZULRESSO is that the products they use take weeks to work, if at all. And as we know, many patients cycle through many different drugs. And these -- the term that you say often come with comorbidities, weight gain, receptor dysfunction, GI impact. So at a prescriber level, let's say an OB/GYN level the course of treatment just doesn't fit into how they're dealing with mom and baby, whereas Zurzuvae could be the solution to that problem. And certainly, payers have been historically supportive of the syndication. And as we mentioned, maternal mental health is on everybody's mind. It's been on television almost every night. It's at every state level for policies, and we have now the first world treatment that could be a solution set, at least in PPD for maternal mental health and the policies that are happening at the statewide level.

Operator

We'll go next to Yatin Suneja with Guggenheim.

Yatin Suneja

And let me add my congrats on the approval. So just 2 questions, 1 clarification and then 1 follow-up. So with regard to the sampling comment, it is our understanding that the control substance has limitation from a sampling perspective. So could you clarify that would you be able to sample it and also -- yes, just that. And then with regard to the commercial build, I understand, you provide us more detail once you launch. But let's say, if you got approved for MDD and that requires 100 sales rep. Just trying to understand the commercial build around PPD, is it 20 sales rep, 30 sales reps or 20% less, just some sort of ballpark? Just trying to gauge what the spend will be also as we model it?

Barry E. Greene

Yes. So let me quickly answer both questions, I know we're getting at the top of the hour. So what we said about the commercial build is that we're thinking big, but starting with a very focused way, clearly, much more focused in PPD than -- in PPD and MDD, but we really can't provide numbers. You also heard from Kimi that we're prioritizing our pipeline and kind of when we'll resize the organization appropriate for this opportunity in the pipeline in front of us. So we'll communicate that in the next month or so. In terms of sampling, there are certain limitations of controlled states, whether you can use a natural sample or a voucher, but we don't see that being a limitation to the concept on sampling program.

Operator

This does conclude the question-and-answer portion of today's call. I would like to turn the presentation back over to Barry Greene.

Barry E. Greene

Thank you, Ruth, and thanks again to everyone for joining us today. This is a special day for Sage, Biogen and all the women with PPD who stand to benefit from Zurzuvae. We appreciate the continued support of all stakeholders, and we look forward to providing more updates in the coming months. Thanks again, everyone, and have a great day.

Ashley Kaplowitz

Goodbye.

Operator

This does conclude today's call. You may now disconnect.