Sage Therapeutics, Inc. (SAGE)·Q4 2024 Earnings Summary

Executive Summary

• Q4 2024 showed strong commercial momentum for ZURZUVAE despite modest revenue growth: total revenues were $12.8M, with $11.4M collaboration revenue from ZURZUVAE; net loss was $95.8M and EPS was $(1.56) . Shipments to women with PPD were nearly 2,500, up 21% q/q, and >95% of Commercial/Medicaid lives now have coverage or a path to coverage .
• Cash, cash equivalents, and marketable securities were $504M at 12/31/24; management extended cash runway guidance to mid-2027 and expects overall operating expenses to substantially decrease in 2025 despite higher ZURZUVAE commercialization spend .
• Management emphasized a promotionally responsive PPD market and early impact from salesforce expansion (33% shipment growth in expanded territories), plus planned DTC/digital media to accelerate topline growth in 2025 .
• A strategic reorganization in October drove $22.5M of Q4 restructuring expense, aiding 2025 OpEx reductions; ZULRESSO net revenue fell to $0.4M as the brand was sunset by 12/31/24 .

What Went Well and What Went Wrong

What Went Well

• Sustained demand growth: nearly 2,500 ZURZUVAE prescriptions shipped in Q4 (+21% q/q), over 6,600 shipments for FY24; collaboration revenue from ZURZUVAE reached $11.4M in Q4 .
• Coverage and prescriber traction: >95% Commercial/Medicaid coverage; OBGYNs accounted for ~80% of Q4 prescriptions; strong repeat rate (~60% of targeted HCPs wrote repeat scripts); >70% of patients received ZURZUVAE as first new PPD treatment .
• Salesforce expansion impact: territories expanded in Q4 saw a 33% shipment growth; management sees a “promotionally responsive market” and plans robust media/DTC investment in 2025 to drive topline growth .

Quotes:

• “The first year of launch exceeded expectations, and we plan to invest in 2025 to fuel top line revenue growth.” — Barry Greene, CEO .
• “In the territories where we expanded our sales force in the fourth quarter, we saw a 33% growth rate in patient shipments.” — Chris Benecchi, COO .
• “Greater than 95% of commercial and Medicaid lives are covered or have a path to coverage.” — Company update .

What Went Wrong

• Modest q/q revenue growth vs stronger shipment growth: collaboration revenue up ~4% q/q as channel inventory dynamics at wholesalers and specialty pharmacies decoupled revenue from shipment demand .
• Elevated GAAP losses: Q4 net loss was $95.8M (vs $93.6M in Q3), driven by SG&A ($54.0M), R&D ($37.0M), and restructuring expense ($22.5M) tied to the October reorganization .
• Declining legacy product revenue: ZULRESSO net revenue fell to $0.4M in Q4 as the brand was sunset at year-end 2024, increasing reliance on ZURZUVAE collaboration revenues .

Financial Results

Quarterly Trend (oldest → newest)

Margins and Profitability (derived from reported figures)

Note: Margins are computed from reported totals (Loss from operations / Total revenues; Net loss / Total revenues) using press release tables .

Q4 2024 vs Prior Periods and Estimates

*Values retrieved from S&P Global were unavailable due to a CIQ mapping issue.

Segment/Component Breakdown

KPIs

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• Strategic priorities: “We entered 2025 with a plan to build on ZURZUVAE's commercial momentum, a recalibrated R&D approach and a commitment to financial discipline.” — Barry Greene .
• Market activation: “We are seeing PPD to be a promotionally responsive market with significant growth potential.” — Chris Benecchi .
• Demand vs revenue: “Revenue may fluctuate based on inventory dynamics… we continue to see strong quarter-over-quarter demand growth in patient shipments.” — Chris Benecchi .
• Coverage tailwinds: “Greater than 95% of commercial and Medicaid lives are covered or have a path to coverage… all three national PBMs have developed favorable coverage policies.” — Company update .
• Pipeline focus: “We are prioritizing our pipeline to focus on neuropsych and neurodevelopmental disorders.” — Barry Greene .

Q&A Highlights

• Biogen alignment and spend: Management confirmed an aligned 50/50 co-commercial plan for 2025, including sales force expansion and non-personal promotion (social media, connected TV DTC) .
• Inventory impact: Revenue recognition tied to shipments to wholesalers, while demand reflected in shipments to patients; Q4 inventory fluctuations at wholesalers/specialty pharmacies caused a disconnect; focus remains on demand shipments .
• Seasonality: No Medicare-related donut hole effect; fewer holiday selling days impacted Q4; management anticipates continued q/q growth in Q1 .
• First-line use and prescriber behavior: >70% of patients receiving ZURZUVAE as first new PPD treatment; historical bias among some clinicians but minimal out-of-pocket barriers; repeat prescribing increases after initial use .
• Japan collaboration: If MDD is approved in Japan, Sage is entitled to ~$55M in regulatory milestones; none assumed in current cash runway .

Estimates Context

• Wall Street consensus via S&P Global was unavailable due to a CIQ mapping issue; as a result, we cannot provide quantitative comparisons vs consensus for Q4 2024, Q3 2024, or Q2 2024 at this time. Values retrieved from S&P Global were unavailable due to a CIQ mapping issue (no CIQ company mapping for SAGE).

Where estimates may need to adjust:

• Shipment demand growth (+21% q/q) and >95% coverage could support upward revisions to ZURZUVAE revenue trajectories, while noted inventory dynamics argue for caution in near-term revenue recognition volatility .

Key Takeaways for Investors

• Demand strength outpaced revenue in Q4: shipments rose ~21% q/q while collaboration revenue increased ~4% q/q due to channel inventory; watch for normalization in 2025 as promotional investments ramp .
• Coverage is now a differentiated tailwind: >95% of lives covered/path to coverage and all PBMs favorable should reduce access friction; expect continued first-line adoption among OBGYNs (~80% of scripts) .
• Cost base is resetting: $22.5M Q4 restructuring and strategic reorg underpin management’s expectation of substantially lower 2025 OpEx even as commercialization spend increases .
• Cash runway extended: $504M cash and runway to mid-2027 provide funding visibility through commercial scaling and focused R&D (SAGE-319 MAD data late 2025), without assuming milestones .
• Near-term narrative drivers: evidence of DTC/connected TV impact and salesforce expansion efficacy (33% shipment growth in expanded territories) are key KPIs to track for topline acceleration .
• Monitor inventory and revenue decoupling: specialty pharmacy/wholesaler inventory management can mask demand trends; use shipments as the leading indicator for future revenue .
• Corporate optionality: the strategic review following Biogen’s unsolicited proposal introduces potential corporate catalysts; management is not commenting further, but investors should monitor developments .