After FDA's mixed approval decisions, Sage now says it's 'highly encouraged' by Zurzuvae launch

Sage Therapeutics and Biogen may not have the broad label that they had hoped for with Zurzuvae, but the two companies are still touting the med’s initial launch performance in postpartum depression (PPD).

Sage’s early efforts to establish Zurzuvae as the first-line therapy for women with PPD have begun to pay off, Sage CEO Barry Greene said during an investor call Wednesday. In a separate call Tuesday, Biogen CEO Chris Viehbacher described the launch as “well above expectations” and “extremely positive.”

After winning an FDA approval in August for Zurzuvae as the first oral drug for PPD, Sage and Biogen made the drug commercially available in mid-December following an inspection from the Drug Enforcement Administration. 

In about 10 business days leading into the end of 2023, nearly 120 prescriptions were written for Zurzuvae, representing $2 million in sales for Biogen and $800,000 in collaboration revenue for Sage.

Despite winning the PPD approval, the companies had hoped for a green light in the much larger use of major depressive disorder. The FDA instead rejected that application, and Sage laid off 40% of its staff in response.

As Zurzuvae remains very early in its PPD launch, Sage declined to provide specific revenue projection. Still, the company is “highly encouraged” by the initial progress, Greene said.

To Sage, it’s a good sign that the initial scripts are coming from psychiatrists, OB-GYNs and primary care physicians.

“We believe that the strong engagement across specialties and providers represents HCP appreciation for the need to treat PPD as an urgent medical condition regardless of the practice setting,” Sage’s chief business officer, Chris Benecchi, said on Wednesday’s call.

In one weakness, though, many scripts took longer to ship to patients than Sage had wanted. But Benecchi expects the situation will improve as certain facets of the launch are worked out.

Coverage discussions are ongoing, and commercial formulary decisions are expected in the first half of the year, Benecchi said. Talks with Medicaid are expected to stretch into the second half.

Sage would not disclose the level of discounts it has offered in reimbursement talks. But the company does not anticipate the type of discounting typically seen for other branded drugs for central nervous system disorders, Chief Financial Officer Kimi Iguchi said. That's because Zurzuvae is the only approved oral treatment for PPD.

That first-of-its-kind designation won Zurzuvae wide media coverage when it was approved by the FDA in August. But on Wednesday’s call, one analyst from TD Cowen raised an uncertainty shared among some investors about whether Zurzuvae can sustain its momentum as the publicity quiets down.

Sage is not seeing any sign of slowing in Zurzuvae’s momentum, Greene said. As the chief executive noted, a shift in the perception of PPD is taking place. The condition is now seen as a serious medical condition and not a moral failing, he said.

“The big trend here is that we’re seeing some healthcare providers move from the suspicion of depression and the referral to the diagnosis and treatment,” Greene said. “And the fact that the prescriptions have come equally from psychiatrists and OB-GYN is a good proof point of that trend that we’re seeing.”

After the FDA snubbed Zurzuvae in the much bigger indication of major depressive disorder back in August, Sage soon launched a major layoff round that eliminated 40% of the company’s workforce. The company's stock price plummeted by around 50% after the mixed approval decisions. While it has recovered some ground since then, it hasn't come close to paring all of its losses of the last year.

With existing cash in hand and anticipated funding supporting from collaborations and revenues, Sage expects it has enough money to support operations into 2026.

For the rest of 2024, Sage anticipates several trial readouts for dalzanemdor across Huntington’s, Alzheimer’s and Parkinson’s diseases.