Sage slashes 40% of staff, reshuffles leadership after zuranolone setback

Sage Therapeutics, major depressive disorder, Zurzuvae, Layoff

Sage Therapeutics is set to undergo a significant transformation by reducing its workforce by 40% following a setback in gaining FDA approval for its Biogen-partnered drug as a treatment for major depressive disorder (MDD). The company had hinted at potential job cuts earlier in August when its MDD application was rejected. While the drug, named Zurzuvae, received approval for postpartum depression (PPD), which is a less financially lucrative indication, the company is now focusing on a successful launch for PPD treatment, necessitating a right-sizing of its organization.

This strategic move aims to enable commercial hiring to support the forthcoming launch of Zurzuvae for women with PPD, while also refining the company’s pipeline to prioritize the advancement of its lead neuropsychiatric drug candidate, SAGE-718. SAGE-718, a positive allosteric modulator of the NMDA receptor, is being developed for cognitive disorders such as Huntington’s, Parkinson’s, and Alzheimer’s diseases. Anticipated data readouts are scheduled for the coming year.

“Our goal is to think big, start small and scale fast as we look to launch ZURZUVAE and help women suffering with PPD​. Executing on launch and our potential long-term growth catalysts requires us to allocate resources strategically. Part of our efforts to become a leaner and stronger company means having to reorganize our workforce. The departing employees contributed so much to our mission and I’m grateful for their incredible dedication to helping patients. Our business fundamentals are strong, we are well capitalized, and our goal is to put Sage in a solid position to optimize commercial execution and develop our pipeline with the goal of significant value creation.”

– Barry Greene, Chief Executive Officer at Sage Therapeutics

Sage’s commitment to its neurology program, SAGE-324, is unwavering. This program, currently in a phase 2 trial for essential tremor and being explored for movement disorders like epilepsy and Parkinson’s, remains a focal point of the company’s efforts.

To optimize resource allocation, some early-stage projects will be paused, allowing the company to make informed investments based on evidence. Specific details on these programs are not provided, but Sage’s pipeline includes SAGE-319 for GABA hypofunction and SAGE-421 for NMDA hypofunction.

In a strategic realignment, Sage will also adjust its leadership team structure to match the scale of its pipeline and commercial priorities. This will involve the departure of longstanding Chief Scientific Officer Al Robichaud, Ph.D., Chief Development Officer Jim Doherty, and Mark Pollack, Senior Vice President of Medical Affairs. In their stead, Mike Quirk, currently Senior Vice President of Discovery Research, will assume the role of Chief Scientific Officer, while Chief Medical Officer Laura Gault, M.D., Ph.D., will take on Doherty’s responsibilities.

These comprehensive changes across the pipeline, workforce, and leadership are projected to yield approximately $240 million in annualized net savings, with 60% attributed to research and development efforts. Additionally, Sage remains on track to receive a $75 million milestone payment from Biogen once Zurzuvae achieves its first sale for PPD.

As of June, Sage had approximately $1 billion in cash and equivalents, providing financial stability through 2026. This strategic overhaul reflects Sage Therapeutics’ determination to navigate challenges, streamline its focus, and drive future growth in the ever-evolving biotech landscape.

Share This News