Sage Therapeutics’ latest attempt to shrink its pipeline and workforce will see a third of the biotech’s employees heading for the exits along with a swath of the company's leadership.
At least 165 employees will be laid off, including 55% of the R&D workforce, the company said in an Oct. 17 release. Amy Schacterle, Ph.D., senior vice president of R&D strategy and business management, will be joining them along with C-suite colleagues like General Counsel Anne Marie Cook, Chief Financial Officer Kimi Iguchi and Chief Technology and Innovation Officer Matt Lasmanis.
The changes are expected to be complete by the end of the year, resulting in costs of somewhere between $26 million and $28 million. Sage, which ended June with $647 million at hand, said the restructuring would extend its cash runway but didn’t go into further details.
The moves follow a pair of clinical misses for the biotech's clinical front-runner dalzanemdor in recent months, leading the company to give up hopes of pursuing the NMDA receptor positive allosteric modulator (PAM) in Parkinson’s and Alzheimer’s diseases.
Sage’s remaining hopes for the asset lie with a Huntington’s trial due to read out later this year, and the company said today’s restructuring was designed to channel resources toward this readout as well as the ongoing launch of the Biogen-partnered Zurzuvae in postpartum depression (PPD).
“We are being deliberate and purposeful in our efforts to reorganize the company with the goal of having the flexibility to execute immediate priorities and build for long-term growth and value creation,” Sage CEO Barry Greene said in the release.
“This is difficult but necessary and we believe it will right-size Sage for future growth potential,” Greene added. “This move allows for continued focused investment in the ongoing launch of Zurzuvae for women with postpartum depression and development of our prioritized portfolio.”
It’s only the latest upheaval for Sage’s employees, who endured a 40% reduction in force back in August 2023 as part of Greene’s attempts to create a “leaner and stronger company.” The top team wasn’t immune to those layoffs, either, with former Chief Scientific Officer Al Robichaud, Ph.D., and former Chief Development Officer Jim Doherty, Ph.D., among the departures.
That shake-up followed the FDA’s decision to decide against approving Zurzuvae in major depressive disorder and only greenlight the drug in the less financially lucrative indication of PPD.
While Biogen has remained a partner on Zurzuvae, the company walked away last month from a collaboration on SAGE-324 in the wake of the GABBA PAM’s failure in a phase 2 essential tremor study. Biogen’s decision shut the door on almost $1 billion in potential milestones that could have come Sage's way.
At the time, Sage said it planned “to continue to evaluate other potential indications, if any, for SAGE-324.” Today’s release references an “early-stage pipeline prioritization” underway at the company, but it doesn't explicitly refer to the asset.