Sage slashes half its workforce in rejig targeting Zulresso commercial team

Sage Therapeutics Zulresso product image
Zulresso infused postpartum depression drug hit with commercial cuts in Sage restructure. (Sage Therapeutics)

Sage Therapeutics cut more than half of its workforce in a restructuring move that slams postpartum drug Zulresso and the sales team promoting it.

The estimated 340 employees laid off primarily worked in commercial operations for Zulresso, an IV drug with a 60-hour infusion time. The company will stop expanding the network of Zulresso treatment sites and double down on commercial operations at existing sites.

The cuts are part of a Sage restructuring aimed at saving $170 million in costs to plow cash into its advancing pipeline. The news comes just months after a bruising phase 3 failure for major depressive disorder candidate SAGE-217, also known as zuranolone.

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RELATED: Sage strategy for postpartum depression drug Zulresso keys on patient support

Just a few weeks ago, the drugmaker said it's working to bounce back from that failure with three short-term studies testing zuranolone in postpartum depression and in two subsets of major depressive disorder patients, namely those who need acute rapid response therapy or episodic therapy.

Analysts viewed the restructuring as a necessary cost-saving measure with J.P. Morgan analysts noting “some surprise that Sage had that much infrastructure devoted to Zulresso to begin with.”

Analysts pointed out the Zulresso commercial cuts extend Sage’s cash runway well into 2022. The savings will take zuranolone through a phase 3 readout in its Shoreline study this year and pay for continuing the three newer studies.

Leerink analysts called the restructuring “much needed” and highlighted both the bottom-line $170 million in cost savings and Sage’s “confidence that it can successfully enroll patients in three new phase 3 depression studies for [zuranolone] in this difficult environment.”

RELATED: Sage wins OK for depression drug Zulresso. Up next? Major marketing challenges

Sage CEO Jeff Jonas said in a news release that the "headwinds we are facing individually and collectively ... led to this difficult decision. We believe this cost reduction and reallocation of resources will help Sage advance our portfolio in a way that is consistent with our mission of delivering medicines that matter to people with serious brain health disorders.