Sage Therapeutics, Inc.
Q1 2017 Earnings Call Transcript

Published: 10 May 2017

[Operator:]

Good afternoon and welcome to the SAGE Therapeutics First Quarter 2016 Financial Results Conference Call. At this time, all participants are in a listen-only mode. 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 express written consent of SAGE Therapeutics is strictly prohibited. Please note that this call is being recorded. I would now like to introduce Paul Cox, Head of Investor Relations at SAGE.

[Paul Cox:]

Good afternoon. Today after market closed, we issued a press release with our fourth quarter 2017 financial results, along with recent company highlights, upcoming milestones, and progress on our corporate strategy. The press release and the presentation slides used on this call can be found on the Investor and Media section of our website at sagerx.com. On Slide 2 of the presentation, is the agenda for today's call. We will begin the call with prepared remarks by Dr. Jeff Jonas, our Chief Executive Officer, Dr. Steve Kanes, our Chief Medical Officer and Kimi Iguchi, our Chief Financial Officer. On Slide 3 is our Safe Harbor statement. During today's call, we may make forward-looking statements, including statements about our expectations, plans and timelines for to Clinical Development, reporting of clinical trial results and regulatory activities, success of our development efforts and product candidates, our financial projections and expectations regarding other upcoming events. Actual results may differ materially. The risks and other factors that could cause actual results to differ are discussed in today's press release and in the Risk Factors section of our most recent annual report on Form 10-K filed with the Securities and Exchange Commission and other reports filed with the SEC. Any forward-looking statements represent our views as of today only. We may update these statements in the future, but we disclaim any obligation to do so. I would now like to turn the call over to Jeff.

[Jeff Jonas:]

Thanks, Paul. Good morning, everyone and welcome to our call. Turning to Slide 4, our primary focus at Sage is on building a company although with differentiated medicines developed through innovative approaches to research and development combined with a corporate dedication to making people's lives better. We discussed on prior calls, our vision of developing novel treatments for central nervous system disorders repeating CNS and our attempt to close the innovation gap in areas where more breakthroughs are needed. To date we've made great stage into a leading company capable of potentially addressing this innovation gap through our novel R&D approaches. Our company building mission is to position Sage for long-term multiproduct neuroscience drug company. Our wholly-owned internally generated pipeline, which you can see on Slide 5 and a great team we've assembled at Sage we believe provides strategic possibility to maximize the opportunity for leadership in neuroscience R&D with the goal of bringing to the market innovative medicines to address life altering CNS diseases and disorders. I would now like to update you on our progress across the portfolio, so please turn to Slide 6, for our Phase 3 status trial of brexanolone and super-refractory status epilepticus or SRSE for epilepticus for the we're nearing completion of a moment in the phase 3 status for global randomized placebo-controlled trial in SRSE. And as an overview SRSE is a life threatening persistent state of seizure, which continue to recur for over 24 hours despite multiple therapeutic interventions. So, this disorder of the burden of disease is very high. Evidence based treatment options and there are currently no FDA approved treatment for SRSE. The goal of SRSE therapy is to minimize brain damage by terminating seizures while minimizing long-term exposure to intravenous general anesthetics and other third line agents. Clearing the seizure is a necessary prerequisite to the ultimate recovery of the patient, regardless of the underlying disorder causing the initial seizure. Pleasure turn now to Slide 7, through our brexanolone clinical program and the Global Phase 3 status trial Sage is attempting to develop the first ever evidence based treatment for SRSE. We believe that positive results in this study could be a potential game changer and have SRSE is treated that can represent the paradigm shift for patients and their families. As I mentioned, we're now nearing the end of enrollment. Through this process, we've learned a great deal about the SRSE indication a highly valuable and complex patient population. We've long spoken about the complex nature of treating this disease and the designing of study that will enroll the right patient population, minimize variability and thus lead to a clear safety and efficacy for this indication. I can say today that we're confident in our trial design and the accounting of the trial and we remain focused on ensuring the highest levels of quality control possible. Further, as most of you know, the primary endpoint of this study is based on a 24-hour period after brexanolone is stopped without the reemergence of the status epilepticus or the need for reinstituting third line anesthetics. We understand that the complexity of this illness has also created interest in variables beyond the primary endpoint. In order to preserve the utility of potentially important secondary endpoints such as relapse and the effective retreatment, we plan to maintain the study line completion of all study follow-up areas. As a result of these decisions, we now expect to report topline results in a third quarter after enrollment of an anticipated 126 valuable patents and completion of all follow-up periods and data analysis. We expect topline data to include the primary endpoint, safety and tolerability and select secondary endpoints including open label retreatment arm response and the CGI scale. We also expect to provide information on trial metrics such as the response of resistance status epilepticus or RSE patients should through the diagnostic screen and numbers of patients presenting for first for greater granularity regarding potential populations at risk. Finally, while we anticipate topline results are little later than initially planned, I want to note that we are not planning any changes to the conduct of the statistical analysis or endpoints. Please turn now to Slide 8. We're making great progress in our other brexanolone program, our Phase 3 trials for developing brexanolone as a treatment for postpartum depression or PPD. This is a Hummingbird Program consisting of two separate trials study 202B and 202C. Both or these rolling on track and we continue to expect topline results in the second half of 2017. As many of you recall, the FDA has granted breakthrough therapy designation and the EMA has granted time designation to brexanolone for the treatment of PPD. Now as part of the Prime program, we recently conducted our prime meeting with EMA authorities and look forward to receiving formal scientific advice. The company is now focused on completing Phase 3 clinical development of brexanolone in both SRSE and PPD in 2017 and if successful, moving forward with efficient filings for regulatory approval in the U.S. and EU. The EU filings will incorporate the advice on EMA and we look forward to that advice to better inform the timing both in PPD and the EU. Please turn now to Slide 9. I would like to discuss now our lead oral product candidate SAGE-217 currently in Phase 2 development for both mood and movement disorders with four Phase 2 clinical programs now underway. SAGE-217 is a novel, highly potent, orally active neurosteroid that like brexanolone is a positive allosteric modulator of a GABA A receptors targeting both synaptic and extrasynaptic receptors. We have two important updates today regarding SAGE-217. We announced topline results from our Phase 2A part A open label proof of concept study of SAGE-217 as a potential treatment for Parkinson's disease. In this portion of the open label first signal of activity in tremor-predominant subjects in the open label study evaluating 12 patients with moderate Parkinson's disease. Steve will go over the details later in the call, but I want to emphasize a few points here. First, please recall that this is an open label trial, designed primarily to help with designing methodology and determining how SAGE-217 might fit into the Parkinson's disease armamentarium. These initial results, they are open label need to interpret cautiously. Overall, the study suggested that as a great monotherapy, given at lower doses in the morning during a short duration of therapy, SAGE-217 did not have an impact on certain Parkinson's disease symptoms in general but did have an impact in reducing tremor. Based on the signal of activity and reducing Parkinsonian tremor in these patients, we see plan to proceed to an open label Part B study evaluating SAGE-217 as an adjuvant herp waiting phase 217 as a therapy to levodopa carbidopa in tremor predominate patients with the dosing being administered at night. In addition, we have also recently initiated dosing in our Phase 2 Part B trial of SAGE-217 in MDD or major depressive disorder. This is a randomized double-blind placebo controlled study which follows our positive open label Part A results reported earlier this year. We anticipate data from this study in the first half of 2018. Steve will run through these studies in more detail along with an update on the rest of our pipeline, but first I would like to say that we're very pleased with the progress we're making across the portfolio with brexanolone and both SRSE and PPD with SAGE-217 across our Phase 2 programs and with our earlier stage compounds including SAGE-217, our first-in-class NMDA receptor modulator now enrolling in Phase 1. So, 2017 promises to be a busy year. We expect to report results from a number of clinical trials this year, including our two Phase 3 clinical programs, which were positive, will put us on the cusp of a potential product commercialization in 2018. As we have had R&D success, we've continued to prudently build our team and organization in order to capitalize on the potential we see in our development portfolio. We've expected with over 175 employees, including key development research technical operations and medical affairs appointments. We also continue to make important progress in expanding our commercial team to potential for near-term commercialization -- to Mike Clinton and Vice President of Sales and Marketing, Frank Sanders. On a personal note, I want to say, I am proud of the great work and progress achieved by the Sage team as well as with their continued enthusiasm to develop unique drugs for people with CNS disorders. With that, let me turn the call over to Steve for more detail on our clinical programs.

[Steve Kanes:]

Thank you, Jeff. We believe that Sage is pursuing a unique data-driven approach to CNS drug development by employing efficient human proof of concept studies not only to uncover activity signals but also to guide the design of future clinical trial before investing in larger programs. This approach is demonstrated very clearly in our development to SAGE-217 in both [Audio gap] illustrated on Slide 11. On Slide 12 as Jeff mentioned, we're interested in studying Parkinson's disease a neuro degenerated disorder with motor and nonmotor symptoms. Today we announced topline results from our first study of SAGE-217 in Parkinson's disease the Part A open label portion of our Phase 2 program. Slide 13. In this study sought to understand safety tolerability, pharmacokinetics and activity of SAGE-217 and the cohort of 12 open label Parkinson's patients in order to determine whether there is a suitable activity signal to justify further development and if so to help develop the methodology needed to expedite progress into more formal Phase 2 testing. We evaluated SAGE-217 in Parkinson's disease patients with moderate severity who were on stable doses of the anti-Parkinsonian agent levodopa carbidopa many the carbidopa prior to the trial importantly for exploratory study phase enrolled in all comer population that was not enriched based on tremor severity or any other particular Parkinson's symptom complex. All patients continue to take levodopa carbidopa in the morning of days 1 to 3 after which they were withdrawn from the treatment and received once daily SAGE-217 administration in the morning of days four through seven. The design allowed us to examine which symptoms were responsive to levodopa/carbidopa or responsive to SAGE-217's mechanism action in this there were responses unique to 217 worthy of continued investigation. The primary endpoint was change from baseline in MDS, UPDRS, part three score on day seven. This is a standardized position rating scale of the movement to sort of severity. Patients were then followed out for day 14 for safety. you should endorse that the majority of patients only received four doses of SAGE-217 at 10 to 20 milligrams. So, we were not testing its steady state. Slide 14, in this trial we observed that levodopa/carbidopa activity was primarily focused on the motor symptoms of bradykinesia and rigidity. In contrast SAGE-217 activity was primarily focused on tremor symptoms. In subjects with over tremor, we observed an approximate 20% to 30% improvement in tremor symptoms of the four days of SAGE-217 open label treatment as assessed by change in the MDS UPDRS Part 3 tremor score. This improvement in tremor score during the SAGE-217 dosing phase was longer-lasting than the effects observed in these subjects during the levodopa/carbidopa phase. These rescue medication was similar during both periods of treatment. In this population of Parkinson's disease patients administration of SAGE-217 during the day was found to be generally well-tolerated with no SADs or discontinuations. However, similar to findings of the Phase 1 program, the most common adverse events were sedation and somnolence occurring two to four hours of post dose. As a result, while we started dosing of 30 milligrams per day MTD established Phase 1 program the majority of patients were down titrated to 10 to 20 milligrams per day. This initial cohort provides a great deal of methodologic information. We believe these data justify proceeding to an additional open label Part B study where we plan to SAGE-217 as an adjunctive treatment to anit-Parkinson in agents. We are seeking to confirm this activity signal in an adjunctive crossover design prior to designing a formal placebo controlled Phase 2 program. Based on the findings we've described the patient population for the next 12 cohort in part will be targeted now to recruit patients with tremor predominant symptoms. Were also interested in further evaluating non-motor symptoms of Parkinson's disease including depression, anxiety, cognition and sleep. We expect to study approximately 10 open label patients with one slight dosing of SAGE-217 at 30 milligrams and consistent with other early data in MDD we expect better tolerability with night time dosing. We expect to initiate Part B of this trial in the first half of 2017 with top results expected in the second half. Slide 15, we also announced today that we've initiated dosing of SAGE-217 in the Phase 2 Part B randomized double-blind placebo-controlled study in major depressive disorder, following the positive open label Part 8. The Part B study is evaluating moderate to severe major depressive disorder patients with baseline HAM-D total scores of 22 or greater. We plan to evaluate up to 66 patients for two weeks of once a night treatment of 30 milligrams SAGE-217. Patients will be followed out-to-day 42. We expect the study to involve each sites in the United States. Alone with safety and tolerability, and the end of Part B, it's a determine of treatment with SAGE-217 improves depressive symptoms in patients compared to placebo. The topline results are expected in the first-half of 2018. In addition, the Part A open label NDD results were recently accepted for lead breaking presentation at the Society of Biological Psychiatry Annual Scientific on May 19 in San Diego. Now turning to Slide 16 we also month initiate a phase 1 single ascending dose trial say 718 and only volunteers. SAGE-718 is a novel-oral first in class oxysterol-based positive allosteric modulator of the NMDA receptor. Positive modulation of NMDA receptors may have potential in the treatment of a range of neurological disorders associated with a variety of cognitive neurological and behavioral symptoms. Topline results from the single ascending dose study are expected in second half of 2017. Slide 17, on the GABAA receptor modulation side of our portfolio we are pleased to announce that we selected SAGE-324 as our next novel oral development candidate in intuitive develop through the focus on indications involving GABA hypofunction including epilepsy. SAGE-324 is currently in IND enabling studies. Before I close, I’d like to thanks the patients who are participation [audio gap] our clinical collaborators and of course our SAGE team. Many of our studies our first of their kind of and it takes a tremendous level of perseverance and commitment to bring new potential therapies to those who need the most. With that I’ll turn the call over to Kimi.

[Kimi Iguchi:]

Thanks Steve, let me start with a quick summary of our financial results for the first quarter and then provide an overview of our financial guidance. On Slide 18 we have a summary of our financial results for the first quarter. We ended the first quarter with $342.6 in cash, cash equivalents and marketable securities. Research and development expenses were $45.2 million including $3.6 million of non-cash stock-based compensation expenses in the first quarter of 2017 that’s compared to $23.6 million including $1.6 million of noncash stock-based compensation expenses for the same period of 2016. The increased in spending was primarily due to several factors related to expanding the portfolio and the team. These factors included the ongoing clinical development of brexanolone or SAGE-547 in SRSE and PPD including one the expense related to the enrollment of the Phase 3 status trial in SRSE. Two, the expenses related to the ongoing Phase 3 trial of brexanolone in PPD. Third, the expenses associated with activities in preparation for a potential launch for regulatory approval. The factors contributing to the increase in spending included the four ongoing Phase 2 clinical programs for SAGE-217 in the areas of mood and movement disorders, the completion of IND enabling studies in preparation for Phase 1 development for SAGE-718 our continuing discovery efforts to identify new development candidates and investments in R&D headcounts is for the growth in SAGE’s pipeline and operations. Turning to general and administrative expense they were $12.3 million including $2.6 million of non-cash stock-based compensation in the first quarter of 2017 compared to $7.1 million including $2.1 million of non-cash stock-based compensation expense for the same period of 2016. The increase in G&A expenses was primarily due to the increase in personnel related expenses, professional fees and facilities to support expanding operations as well as continued preparations for potential commercial launch. We reported a net loss in the first quarter of $56.8 million compared to net loss of $30.5 million for the same period of 2016. As of May 3 we had 37.3 million shares outstanding. Turning to guidance we are reiterating our financial guidance. We expect that our existing cash, cash equivalents and marketable securities will fund the anticipated level of operations based on our current operating plans into the second quarter of 2018. This guidance takes into account the continuing Phase 3 clinical development of brexanolone in SRSE and PPD. Our current ongoing Phase 2 development of SAGE-217 in mood and movement disorders the Phase 1 clinical development program for our first NMDA positive allosteric modulator SAGE-718, the expanded research effort within our GABA and NMDA based portfolio in earlier stage pipeline including IND enabling studies for our next generation GABA modulator development candidates SAGE-324. And our ongoing activities for potential launch of brexanolone such as continued build out of the medical affairs functions including field based MSLs and commercial planning and preparations. We continue to make progress in the growth of our commercial team and infrastructure in advance of our potential commercial launches in SRSE and PPD including a key near-term hires in market access, payer management and sales and marketing. We are excited by continued progress and we look forward to the rest of 2017. As you can see on Slide 19 we have a number of important milestones and data reads out over the next several months each of which has the potential to further our efforts to develop innovative treatment for patients. With that we will now like to open the call for Q&A. Please limit yourself two questions each so that we can leave enough time to get to everyone. Operator?

[Operator:]

[Operator Instructions] And our first question from the line of John Newman with Canaccord. Your line is now open.

[John Newman:]

Hi guys, thanks for taking my question. Question I had was the change in timing for the 547 Phase 3 data more related to the decision to maintain the blind through the secondary analyses or the pace of enrollment? Thanks.

[Jeff Jonas:]

Thanks John and thanks for the question. As you know this was the first ever trial in a really valuable and complex patient population and we’re setting the benchmark for how this type of trial might be inducted so we’ve always try to keep you updated and right now we are nearing completion of enrollment in the 122 valuable patients. So, we are confident in the trial behind, we’re confident that about the quality of the trial which is our top priority and with that we made the decision as we said as I earlier that we bought that maintaining the blind through all the secondary endpoints that we think might be critical frankly both understanding the activity of this drug and for the value proposition was critical. So we made that decision to basically have only one single data and lock it. And one of the reason so we’re doing that and in order to give people some understanding of how we’ve look at this we are planning to include the full follow up from the study. To give you complex data that including some of the trial metrics which I’ll Steve describe now.

[Steve Kanes:]

We think it should be very important as we get the data out to walk through with everybody not just the primary endpoints but the secondary endpoints as well. And then some of the details related to what we've been seeing the number of patients that were presenting the number that were consensus and so forth so really, we’re going to feel for the number of the patients and flow to the trial that I think will give a lot of color to exactly the questions you were asking.

[John Newman:]

Great. If I could ask one more question. It sounds like you will have quite a wealth of data in the secondary endpoints, would it be safe to assume that one piece of that data might include the durability of the initial response I think there is a two to three weeks time point after the primary endpoint where you'll take a look again?

[Jeff Jonas:]

That’s exactly right. One of the area that we think we can show value is not only in response to the primary endpoint and remember they are really almost three studies combined after primary endpoint. So, we want to look at that and then the number of patient to respond to the retreatment arm we think could be important and we actually wanted to keep blinding for that. And then finally we will look at relapse over the follow-up period and we think all of those will give us important further information about the value of this intervention.

[John Newman:]

Excellent. Thanks very much.

[Operator:]

Thank you. And our next question comes from the line of Cory Kasimov with JPMorgan. Your line is now open.

[Unidentified Analyst:]

Hi guys this is [Shawn Firon] [ph] for Cory thanks for taking my question. I actually have a question about the design of the Phase 2 MDD trial. So, I noticed that right now it’s look it’s going to be a two-week dosing schedule from the prelim data though we saw that initially there is about an 85% of patients who respond initially and then response kind of drops off to about 50% at data 28 which is about two weeks post the last dose on a two-week regimen. So, and it looks like it kind of tails off a little bit so considering MDD is more of a chronic disease where are you guys thinking the event for dosing will be for this drug. Are you thinking that they might be a chronic administration like with as we saw hives or will it be like an induction regimen followed by maintenance dosing I am looking into the Q3?

[Jeff Jonas:]

Thanks for the call. One thing that when we release the MDD data what we were specifically focusing on the responses in the two weeks dosing period we will have the full data presented at the Society of Biological Psychiatry I know meeting in two weeks will figure while we speak about the long-term follow-up and I think there you’ll get a better sense of what’s really happening but these on a data that we’ve seen from the Phase 2 open label study that we announced, we believe the two weeks gave us a very clear view on to both the response, as well as remission rates and then how we would expect to follow-up and what we would expect over the next three days.

[Steve Kanes:]

I think to the point that we did not see a tail of activity so I am not sure where that came from. I think the point about the design of the trial is largely that no one has ever used this mechanism to treat depression and while we had a very dramatic response with the MDD program that encouraged us because if the pumpkin and almonds looked just like the postpartum depression activity and control data to your point it is a chronic disease and we thought that since the drug is well tolerated, that we would run a two week study to replicate what we saw in a open label but then we will have longer term follow-up at the two weeks treatment.

[Unidentified Analyst:]

Okay, perfect. Thank you. And then in regards to the endpoint that you reported for the Parkinson's trial the 20% to 30% reduction in tremor, just want to get a sense of maybe how clinically meaningful this is, is it something that the patients really notice outright or maybe I think more color there?

[Jeff Jonas:]

So, I’ll start and turn this over to Steve. One of the point I wanted that really emphasize with Parkinson’s study first – it’s a study that designs it firstly inform us about our decision making. And to us it represents the way that we think that we’re approaching development in a rather unique fashion. And that is we started first with the most difficult approach, a short-term study, lower doses really for patients safety, to get a sense of whether or not they were already differentiating levels of activity between dopamine agents which are commonly available and 217 which of course is not. And we do that with an all kind of study because we want you to understand in monotherapy what kind of activity we had. And then we learnt that we thought we saw and I heard Steve talk about this some activity that we had always been specified as one of the things we hope to achieve 20% to 30% reduction on the tremor score and we saw this and now we can expand it to another open label trial or another cohort rather. So, contract that to the conventional way of doing development which is we have a molecule we go into 100, 150 patients in Phase 2 wait a year and a half and then we get basically maybe nothing and we have to start collecting out the data. So, this is the way we think this is the right way to approach development I think what you’re seeing in Parkinson as what we’ve seen is really what we consider are very encouraging initial sign that we think justifies moving forward into the appropriate target population I am going to turn this over Steve for more granularity here.

[Steve Kanes:]

Our main excitement about these outcomes is that with 20% to 30% improvement of symptoms after only several days of treatment we think this really represents a novel signal something that hasn’t been identified over the GABAergic compound. And that’s why we really want to go further with differentiated effect on tremor that we see with our SAGE-217 versus the stated treatment means that this may very well be an ideal complimentary treatment standard of care and that’s why we’re interested in pursuing prior to SAGE-217 into placebo-controlled test. So, overall very important in terms of our signal detection approach.

[Jeff Jonas:]

One of other point to make is we know these are methodology studies so what you learn something a couple of really important points here one is, we saw that the effect on tremor was quite durable throughout the day after single dose. So that allows us now to go to nighttime dosing at higher doses. We also saw that the effect was more durable now that we saw with dopamine agents I want to caution these are open label early data. And we want to replicate these findings in an enrich population which still represents about 40% of the Parkinson’s population with tremor predominant symptomatology. So, in as much as the way we believe development want to proceed this study has really caused us - we’ve been very excited by the initial data very early but we certainly think it justifies moving forward and what’s interesting for us as we see a effect on tremor that's reproducible that’s similar to what we’ve seen with 547 in the control data and open label with 217 on essential tremor. I think Kimi has one point to make.

[Kimi Iguchi:]

I just wanted to add that from a financial perspective it’s a very capital efficient way to do drug development we’re spending very small amount of money on these smaller trials understand activity, understand what next design to be before we make investments in bigger more expensive and longer trials.

[Unidentified Analyst:]

Okay great. Thank you, guys.

[Operator:]

Thank you. And our next question comes from the line of Paul Matteis with Leerink. Your line is now open.

[Paul Matteis:]

Great. Thanks so much for taking my questions. I appreciate it. Jeff I'm just wondering from your seat when you look at the status study, how much of a window you have in the performance of the open label high-dose arm and if that's anything that as you see those data accrue could increase or decrease your confidence in the efficacy of 547 in your treatment hypothesis. And then secondarily I was wondering if you could comment briefly on enrollment trends and the two PPD studies in severe and moderate. I know the initial study in the earlier studies they both enrolled fewer patients than they originally intended. So, I guess I'm wondering if an infusion and the need for an inpatient stay is something that's rate limiting to enrollment or are you still very confident having data by the end of this year. Thanks very much.

[Jeff Jonas:]

Paul thanks for the questions. I think it's good clinical practice. We're not looking at any blinded data at this point and with respect to the -- so we're not doing that. Obviously, we have an idea enrollment and we do some of those ideas now moving forward, but nothing on the blinded results. But I think one of the points I made earlier and the reason we're not doing two unlocking is that we think that the retreatment may be an important window and something that might be something we can accrue in the label that we maintain data integrity. So that really is our critical point here. With respect to the PPD, it is enrolling on track. We're very happy with the enrollment right now. There is a significant amount of interest. We're all at A Cog this week and there has been a tremendous amount of interest in the study and from potential line trial is to participate and have their patients participate. So that's moving along quite well. There is no evidence at all that their fact is good, it's not as you there is any impediment to treatment of these patients and as I think you heard me say enrollment is moving along very well in that drop.

[Paul Matteis:]

Okay. Thanks. Jeff if you don't mind, can I just ask one quick one, I just remembered on the Parkinson study with the dose reduction that you're seeing in the sedation, is there anything otherwise beyond just reporting sedation, is there any increased risk of falls in elderly patients and what larger motor compromise population or is the sedation pretty mild, thanks so much.

[Jeff Jonas:]

So right now, it's early days for that study. So, what we're seeing is firstly that the window for sedation is as you talk about is pretty brief and what's really encouraging for us is that and remember this is giving in the morning now, what is very encouraging is that the durability of the response persisted well beyond any of the reports of sedation again, very early data. So, we're very comfortable that moving to PM dozing will only attenuate any of that issue, although it's not really an issue because as you probably know and I know you do know Paul, sleep disruption in Parkinson's is a major complaint of these patients and things like that. So, we're very optimistic about moving this dosing which will also allow us to increase the dose and Steve may want to make a comment.

[Steve Kanes:]

It's also important Paul to recall that we specifically tested 217 in these patients at MDD and we dosed because we wanted to make sure that we understood the complete PKPD curve related to tremor. What we learned from the study is who the best patients are? How best to go forward with dosing and really what's the next question asked around the potential activity here? So, a lot must come from the trial based on a very small number of patients.

[Jeff Jonas:]

I think the other point to make, this was a very tough, we're very pleased with this because as you know, this is a very tough study. We have patients unstable in the education and then we would draw them and then we were giving our drug as a monotherapy. So, it's a very tough hurdle and that we're very pleased even with what we've seen. That said, I think elegance of what Steve and his team have done here is to allow us to move forward with the right population with a different dosing scheme given that neither will allow higher dosing over a longer duration not only hopefully it will help tremor but some of the other symptoms associated with Parkinson's that we can attenuate with night time dosing.

[Steve Kanes:]

Okay. Great. Thank you both very much. Appreciate it.

[Operator:]

Thank you. And our next comes from the line of Salveen Richter with Goldman Sachs.

[Salveen Richter:]

Thanks for taking my questions. So, with regard to SRSC, I just wanted to dig in further into the relevance of this secondary endpoint data, so you're really getting us durability for response in number of patients that respond through the retreatment arm, is there anything else we should be expecting here?

[Jeff Jonas:]

Well we will talk about relapse as well. I think that's going to be important. We look at -- we were in a lot of discussions as you know with payers and look things of durability response are going to be very important. There just for one of the better word, the amount of data, remember these are critically ill patients. They are I know you know this, but just to reemphasize, they are very critically I'll. So, the quality of the response and the ability to make the seizure free is really critical value proposition even after the primary endpoint is met you we have to be realistic about this in terms of how we set the pricing and patient benefit. So those are major things you'll see along with safety of course, but beyond that, the complexity of this trial, really these patients who have multiple cardiorespiratory things, they are the phonebook worth of data per patient that we have to clean and validate. So that's all part and parcel of what we'll be looking at. I expect there may be other findings that will come with this, I think we haven’t disclosed that we may use in terms of understanding the value proposition, but the major ones just to go back are going to be either primary endpoint retreatment, mortality and then the other point you have a very good sense because we will have the data on the screen about the generalized ability for patients with SE and RSE and how they respond to a structured weaning protocol. So, we think that the structure of the trial will really inform us well now whether the drug is active. So, we will be, we're very comfortable that what we'll see with be a good answer.

[Salveen Richter:]

And just a follow-up regarding retreatment. So, who qualifies in the blinded portion of this study and on what basis and should we expect that more patients and I initially expected are going to the high-dose five for seven rescue arm?

[Steve Kanes:]

Yeah this is Steve, the patients, the only patients who qualify for retreatment are those patients who fail the initial blinded treatment. So, this is something that we anticipate very early on because we thought it was one of the right thing to do and allowed us to understand whether if the patient unfortunately didn't respond to the initial treatment would benefit from a potential higher level of SAGE-547 brexanolone.

[Salveen Richter:]

Thank you.

[Jeff Jonas:]

With the one point to just reiterate is while the treatment is open label, the status of the patients who enter retreatment remains blinded.

[Operator:]

Thank you. And our next question comes from the line of Katherine Breedis with Stifel. Your line is now open.

[Katherine Breedis:]

Great. Thank you for taking my questions. With respect to SAGE-217 for Parkinson's disease, first of all congratulations on the early signal, it's great to see could you provide us with some insights into the mean UPDRS3 score at baseline and the mean point reduction that translates to the 20% to 30% improvement in tremor score?

[Jeff Jonas:]

We'll be presenting these data and getting them out with better granularity. I think the most important thing to keep in mind is for a single finding study we were really taking a broader approach to let's find moderate patient, let's see whether or not we see an effect and that's so important how we move forward. As we think about the best ways to dose and the duration we really are looking to see one where we go past this very brief signal. So rather than getting into those details, I think it's much more important to understand that yes, we're identifying the very initial signal with T17 and then as we move forward, we'll be able to associate these type of patients we treated.

[Steve Kanes:]

Katherine, we try to have a final score of five or greater and it was 20% to 30%. If these are patients who did not get 10 to 20 milligrams by and large, they didn't get to the dosing, it was only for three days. So, I don't want to make too much of it except to say we think it's a good signal and basically, we had population withdrawn from the chronic therapy. We saw, there is some other minor trends that we think we’re very encouraging, which we'll probably put out in publication. I think the bottom line for us is that we think we now know the right population and the right approach with which to use this. We'll look to replicate as quickly and another and in different cohort of patients with an adjuvant program. We think we'll use a similar design where basically two days on only don't education to them five days on combination agents with only morning dosing. So, we think that will give us a really good read through into the role of this drug as an adjuvant therapy for tremor and potentially sleep.

[Katherine Breedis:]

Great. Thank And then if I may as a second question ask about SAGE-217 MDD I was curious if you are already ready to roll with the oral formulation of SAGE-217 for the Phase 2B and if I may add on to that, just curious why the timeline is so long for the readout given how quickly the Phase 2A enrolled. Are you looking at a longer end point then we saw in the Phase 2A and I'll stop there?

[Jeff Jonas:]

I'll turn this one to Steve.

[Steve Kanes:]

So first of all, thanks for the question. Of course, we always are looking for way to enhance our programs. All of these 217 data that we reported has been the oral initiating solution for the subsequent trial we'll be moving to a solid oral dose formulation use. So, the short answer for your first question is yes, our subsequent MDD trials will be with a solid oral dose formula, which is already done. With the timing, we're looking to move forward as efficiently as possible. This is a somewhat older trial. We'll be dosing for two weeks and then also an extra four weeks of follow-up to understand durability in that response. It's also hard to -- we don't want to do overdo it and get overheated with multiple centers. We have eight centers in the U.S. but the most important thing for us is quality and the data be able to make control over the trials and mostly when we don't want to otherwise compromise our ability to deliver high quality data.

[Jeff Jonas:]

Two other points Katherine, one is we have multiple trials ongoing right now and we're looking at potentially beginning of filing of two NDAs. So, we do have our hands full, that's number one. Number two is and I know you know this as well, this drug if it works the way we think it does, then we can replicate the findings, represent it potentially new paradigm in the treatment of depression. And one of the questions I think you're alluding to and Steve as alluded to as well, is how long you can really treat in two weeks and reset the brain in some way, that would be a real game changer. So, we are going to be very careful in terms of getting more follow-up because I think if the Phase 2 works, we'll have a lot of interest and a lot of pressure to move it very rapidly into a Phase 3 and we'll need to be prepared to discuss the Phase 3 program that more compact than the conventional SSRI type program with multiple trials that this drug continues to perform the way it has.

[Katherine Breedis:]

Great. Thank you for answering those questions.

[Jeff Jonas:]

You bet.

[Operator:]

Thank you. And our next question comes from the line of Raju Prasad with William Blair. Your line is now open.

[Raju Prasad:]

Thanks for taking the question. Initially I was going to ask a question on Prozac because I heard Jeff knows everything about it, so just a follow-up on the status trial to beat the dead horse, but the publication on the two emergency IND patients, did that go, did that play a role in the decision to wait for the follow-up period and kind of only one blinding, can we expect any further information from the other emergency IND patients or a follow-up from the Phase 12 patient. Just trying to figure out how much of this was a strategic decision to present all the data for label purposes or data-driven from the earlier patients treated?

[Jeff Jonas:]

So, couple of points, one is it's not related to the earlier studies. I think it is a strategic decision to preserve the blind. I think we discussed this at one of our earlier calls. We had looked at methodology to do the topline and do the other separate, but there is no way to confidently maintain a blind in that scenario that would at least arouse some suspicion and potentially question the integrity of the trial. So that really was the primary goal for this and the primary motivation was to basically complete the data analysis and make sure we get it right in the first time and that's really, it's as straightforward as that.

[Raju Prasad:]

Okay. Great. And then I guess on the depression study, was is that you're looking for in terms of efficacy for maybe going into more mild patient low 20s scale?

[Jeff Jonas:]

The only -- there is no -- as you probably know even with the SSRIs the pathway for depression has never really focused, even though there is typically a hand be cut off of or a amount just off, usually the indication is to delivered for depression in general and there is no biological basis for understanding or believing that severity is the determination of treatment. So, we're doing a cutoff 20 in this study, which is moderate, moderate to severe, mostly for and hopefully to achieve some diagnostic homogeneity and as Steve had pointed out, also we're also going to do a scientist to help you with quality control in this, because we all know that was a depression program, but beyond that we'll be looking -- the other specifically is you have more room to move when you have severe patients in terms of improvement. So, three is a powering issue, but that's about it. We don't believe there is any biological specificity with respect to the severity that we have to be concerned about once people meet the diagnostic criteria.

[Raju Prasad:]

Okay. Great. And then just one quick clarifying follow-up on [Audio gap]…

[Operator:]

And our next question comes from the line of Edward Nash with SunTrust. Your line is open.

[Edward Nash:]

[Audio gap] so short only four days I believe you said that non-REITs and despite this short period, majority of patients needed to be down titrated to 10 to 20 milligrams, does that mean that majority patient had sedation somnolence issue.

[Jeff Jonas:]

Sorry, you broke up initially question, but we apologize, so any other you were asking about sedation in the Parkinson's program.

[Edward Nash:]

And also, why the treatment period was so short, only four days without the drug reaching steady state.

[Jeff Jonas:]

There are a few reasons, one is it was a monotherapy study in patients who were really, we put them in a very tough clinical position where we're testing monotherapy. The other is there is a theoretical base, all brains are not the same and there is a theoretical basis for us to have suspected that people with Parkinson's may be more sensitive to a certain GABAergic effect. As you may know the neurons that denigrating the substantia nigra downstream in our GABAergic urging neurons. So, you can imagine that especially in the early stage Parkinson's there may be some sensitivity. So, we were looking for that as well. So that's really, that was the fundamental basis, but the sedation per se was not troublesome. It was transient and we'll give you more data, when we put out all the data and you'll see all this I think as we probably said, a drug is very well tolerated and we view the sedation during the day honestly as reported, but once given at night it becomes we believe beneficial.

[Edward Nash:]

I see and my second question is that if you know that you were going to look at essential tremor at the beginning of the study, when you did not increase patient population and I wonder in the seven patient did not have over essential tremor what was the finding?

[Jeff Jonas:]

So that's why we always we leg with this. There are two points, one is we didn't really know -- no one has ever drug this receptor this potentially. There is no other oral agent that has done this. [audio gap]

[Operator:]

And our next question comes from the line of Laura Chico with Raymond James. Your line is now open.

[Laura Chico:]

Thanks for taking my question. I just wanted to follow up on one comment I think you made earlier just Jeff on the status trial, you mentioned you're still confident in the quality of the enrollment that's occurring here. I wonder if you can remind us what some of the steps you've taken to ensure the studies conducted at a high level and I guess the reason I ask is just with the trial expansion from 150 sites to 180 that you announced a couple months ago, just wondering how these more recent sites are falling in within the queue here and getting everybody familiarized?

[Jeff Jonas:]

Yeah at one point I got cut off earlier, thanks I maybe can do up on a follow-up call. Steve can talk about this, I'll turn it over to Steve. But be quick in case we get cut off again.

[Steve Kanes:]

What's working for us is the five years of data and the price of things that we put in place for this trial amount of what sites they're using and how many there are and these include very close supervision of internal staff over each and every site every time they enroll a patient, something that we've never compromised on since the beginning of this trail. So that is first and foremost. The second thing we've done is put in place a clinical guideline. These are rules that have been developed by industry leaders in collaboration with us that represent standards that sites can make use of as they view some of the very deep procedures inside the trial whether that be weaning of the third line agent and the evaluating things and so forth. And these have been so impactful in fact many hospitals have adopted them in their standards already, even prior to having the trials done. So, clear supervision, very close oversight and use of a global network of experts that allow us to help our sites each and every time they enroll trial, a patient in the trial. So again, that focus is not compromised and what happens no matter how many sites we have.

[Laura Chico:]

Thanks very much.

[Operator:]

Thank you. And our next question comes from the line of Gary Nachman with BMO. Your line is now open. [Audio gap] And I would now like to turn the call back to Dr. Jeff for any closing remarks.

[Jeff Jonas:]

…we executed on a number of important projects. We're focusing only on novel approaches. We're going into areas with high unmet needs where people haven’t really don't studies before and we think we're generating great data using our unique approach. So, I am really -- I can't tell you how excited I am. We have a lot of great programs that we're reporting out this year and I think I speak for all of us and I want to thank all the patients and the people at Sage and we're all looking forward to a great 2017.

[Operator:]

Ladies and gentlemen, thank you participating in today's conference. This does conclude the program and you may now disconnect. Everyone have a great day.