Sage Therapeutics to lay off 40% of staff as it gears up for launch of post-partum depression treatment

Sage Therapeutics Inc. (SAGE) said Thursday it is reorganizing its business operations and workforce as it gears up for the launch of its post partum depression treatment Zurzuvae in late 2023. The move includes a 40% reduction in its workforce as well as a plan to advance SAGE-718 and SAGE-324, while pausing other earlier-stage programs. As of Feb. 2023, the company had 689 full-time employees, according to its 10-K annual report filing with the SEC. The company also plans to align its leadership team structure to scale with pipeline and commercial goals. Al Robichaud, its chief scientific officer since its founding 2011, has decided to leave the company, but will remains as a consultant and member of its Medicinal Chemistry and Pre-Clinical Scientific Advisory Boards. Robichaud will be replaced by Mike Quirk, who is currently SVP of discovery research. Chief Development Officer Jim Doherty, who is a founding member of Sage, will leave the company to pursue new opportunities. The company is expecting annualized net savings of about $240 million from the moves, about 60% of which is related to R&D. It expects to book a one-time charge of about $36 million to $38 million mostly in the third quarter. The company has the potential to earn a milestone payment of $75 million from Biogen related to the first commercial sale of Zurzuvae. It has cash of about $1.0 billion as of June 30. The FDA approved the company's Zurzuvae treatment for postpartum depression in early August. But it did not approve it for major depressive disorder which has a far bigger potential patient base. The stock has fallen 48% in the year to date, while the S&P 500 has gained 17.6%.

-Ciara Linnane

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08-31-23 0800ET

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