Sage to cut one-third of workforce, streamline drug pipeline
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Sage Therapeutics is restructuring yet again, announcing Thursday a company shakeup that will involve layoffs for about one-third of its workforce and a reprioritization of its early-stage drug pipeline.
Alongside the cuts, five senior executives will depart, including Sage’s top lawyer, CFO and chief technical officer. Overall, about 165 employees will be affected by the layoffs, more than half of whom are in research.
The restructuring, which Sage expects to complete by the end of this quarter, will extend the company’s operating runway. It follows a series of clinical and regulatory setbacks that have hurt the company’s prospects.
Last year, Sage and partner Biogen gained Food and Drug Administration approval for their drug Zurzuvae to treat postpartum depression. However, the regulator chose not to grant clearance for use in major depressive disorder, or MDD, after clinical studies had shown mixed results. The narrow-than-anticipated approval crimped Zurzuvae’s market, forcing Sage soon after to cut 40% of its workforce.
This year, Sage has encountered difficulties developing its pipeline of treatments for other neurological disorders.
In April, a drug candidate it was testing in Parkinson’s failed to improve mental function compared to placebo in a Phase 2 study. And earlier this month, the same experimental drug, called dalzanemdor, fell short in a study of people with mild dementia due to Alzheimer’s. Sage will not develop it further for that indication, but is still testing it for treating people with Huntington’s disease.
Over the summer, a Sage drug that Biogen licensed failed a mid-stage study in people with a common type of tremor.
Sage plans to prioritize launching Zurzuvae, which entered the U.S. market at the end of last year. Sales have grown only gradually, amounting to about $15 million in total during the second quarter. Yet physicians wrote more than 60% more prescriptions for the drug during the second quarter than they did in the first, according to Sage.
On the research front, the company said it would “focus its pipeline development efforts” as it awaits the study readout for dalzanemdor in Huntington’s.