Sage Therapeutics, in collaboration with partner Biogen, has experienced a setback in their efforts to secure U.S. Food and Drug Administration (FDA) approval for their depression drug Zurzuvae in major depressive disorder. As a result, the company is now considering measures to prolong its cash runway, including staff reductions and pipeline adjustments.
While currently well-capitalized, Sage is reassessing its resource allocation in light of the FDA’s decision. This evaluation involves prioritizing their pipeline and potentially implementing a workforce reorganization. The recent FDA approval of Zurzuvae for the treatment of postpartum depression provides some positive momentum. However, the drug’s rejection for major depressive disorder represents a significant missed opportunity. The FDA cited a lack of substantial evidence regarding effectiveness and called for additional studies.
Sage and Biogen are currently evaluating their next steps to address this setback. Sage reported having $1 billion in cash, equivalents, and marketable securities at the end of the second quarter. The company believes this, along with anticipated funding from collaborations and potential revenue, will be sufficient to support operations until 2025. Nevertheless, Sage plans to right-size its organization and portfolio to extend its financial runway and reduce expenses in the coming year. These actions aim to position the company as an even stronger entity moving forward.
Further details regarding Sage’s plans and next steps will be disclosed before the end of the third quarter.
