By Sage Therapeutics, a biopharmaceutical company based in Cambridge, Massachusetts, is implementing a comprehensive restructuring plan following the recent FDA approval setback of its depression drug Zurzuvae in major depressive disorder. As part of this restructuring, the company will reduce its workforce by 40% and witness the departure of three top executives. The anticipated annual savings from these measures are approximately $240 million, which will extend the company’s cash runway until 2026.
Currently, Sage employs nearly 700 professionals, according to data from FactSet. Although Zurzuvae received FDA approval as the first pill for postpartum depression treatment, it faced rejection for major depressive disorder due to insufficient evidence of effectiveness. The FDA demanded additional studies to support its efficacy in this larger market opportunity.
In light of this development, Sage has outlined its strategy going forward. The company plans to concentrate on the commercial launch of Zurzuvae for postpartum depression by late 2023. Additionally, they will prioritize the advancement of their SAGE-718 and SAGE-324 drug candidates while placing certain earlier-stage programs on hold.
Among the changes resulting from the restructuring, Al Robichaud, who has served as Chief Scientific Officer since the company’s establishment in 2011, will be leaving, along with Jim Doherty, a founding member who currently holds the role of Chief Development Officer. Similarly, Mark Pollack, Senior Vice President of Medical Affairs, will also be departing.
Sage expects to incur a charge of $36 million to $38 million in relation to the reorganization, primarily within the third quarter of the fiscal year. However, the company remains confident in its financial position. With approximately $1 billion in cash, equivalents, and marketable securities as of June 30, along with anticipated funding from collaborations and potential revenue, Sage is well-equipped to sustain its operations through 2026.
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