SAGE Therapeutics (NASDAQ:SAGE) has announced a major reorganization, including laying off about 40% of its workforce, after the US Food & Drug Administration rejected its drug application for major depressive disorder (MDD).
The reorganization, which has also resulted in a shake-up of its C-suite executives, is aimed at making the company leaner as it targets the drug, to be marketed as Zurzuvae (zuranolone), on the less lucrative postpartum depression (PPD) market.
Sage partnered with Biogen Inc (NASDAQ:BIIB) on the therapy which was approved by the FDA as the first oral medication indicated to treat PPD in adults.
“Our goal is to think big, start small and scale fast as we look to launch Zurzuvae and help women suffering with PPD,” CEO Barry Greene said in a statement.
“Executing on launch and our potential long-term growth catalysts requires us to allocate resources strategically. Part of our efforts to become a leaner and stronger company means having to reorganize our workforce.”
Following a strategic review, the company said it will refine pipeline development efforts to advance SAGE-718 and SAGE-324, as well as pause certain earlier-stage programs, with the goal of making evidence-driven investments.
Additionally, it will align its leadership team structure to scale with pipeline and commercial priorities.
Al Robichaud, Sage’s chief scientific officer since its founding in 2011, has decided to depart the company and will be replaced by Mike Quirk, who has been promoted from senior vice president of Discovery.
Also leaving are chief development officer Jim Doherty and Mark Pollack, senior vice president of Medical Affairs, who will be replaced by chief medical officer Laura Gault and chief business officer Chris Benecchi respectively.
Based on the post-reorganization operating plan, Sage said it expects annualised net savings of approximately $240 million and a non-recurring charge of approximately $36 million to $38 million associated with the reorganization.
It said there is also 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
The company said it had cash, cash equivalents, and marketable securities of approximately $1 billion as of June 30, 2023, along with anticipated funding from ongoing collaborations and potential revenue to support its operations into 2026.
Sage's shares were up 1.5% at $20.02 in early morning trading on Thursday. Biogen rose 0.26% to $266.61.
Contact the author at stephen.gunnion@proactiveinvestors.com