The cull, which will additionally see some R&D projects sidelined to trim costs, is expected to bring annual savings of around $240 million, two-thirds of which will come from its R&D budget, according to the company. The cost of the job cuts will come in at around $36 million to $38 million.
Earlier this month, the FDA approved Zurzuvae (zuranolone) as the first oral therapy for post-partum depression (PPD), but rejected it for major depressive disorder (MDD), a much larger and more lucrative market, prompting analysts at Jefferies to reduce their peak sales projections for the drug by $250 million to $500 million from an earlier estimate of $1 billion-plus.
Abi Robichaud, Sage's chief scientific officer since its founding in 2011, has decided to depart the company, but will retain a consultancy role and become an advisory board member. He will be replaced by Mike Quirk, currently senior vice president of discovery research.
Also leaving is co-founder Jim Doherty, Sage's chief development officer, whose responsibilities will be taken over by chief medical officer Laura Gault. Head of medical affairs Mark Pollack is also stepping down, and his responsibilities will be assumed by chief business officer Chris Benecchi.
In a statement, Sage said the R&D savings would allow it to spend more on the commercial side of the business including new sales reps as it prepares to launch Biogen-partnered Zurzuvae for PPD in the fourth quarter of this year.
There has been some speculation that Biogen may scale back its involvement in the partnership as a result of the limited label and the anticipated cost of securing an MDD indication for the drug, given that it is in the midst of its own cost-cutting exercise.
Sage ended the second quarter with around $1 billion in cash and is in line to receive a $75 million milestone payment from Biogen on the first commercial sales of Zurzuvae for PPD. It also makes a small revenue stream from an IV drug for PPD called Zulresso (brexanolone).
The cost reductions will extend its cash runway from 2025 into 2026, as it looks to data readouts next year for a pair of mid-stage drugs: glutamate NMDA receptor modulator SAGE-718 for cognitive impairment associated with Huntington's and other neurological disorders and zuranolone follow-up SAGE-324, a GABAA drug in development for essential tremor and epilepsies secondary to disorders like Parkinson's disease.
"Our goal is to think big, start small, and scale fast as we look to launch Zurzuvae and help women suffering with PPD," said Sage's CEO, Barry Greene.
"Executing on launch and our potential long-term growth catalysts requires us to allocate resources strategically," he added.