Sage Therapeutics, Inc. (SAGE): Business Model Canvas [10-2024 Updated]

In the rapidly evolving landscape of mental health treatments, Sage Therapeutics, Inc. (SAGE) stands out with its innovative approach and strategic collaborations. This blog post delves into the Business Model Canvas of Sage Therapeutics, highlighting key aspects such as their partnerships with industry leaders like Biogen and Shionogi, their groundbreaking product ZURZUVAE, and the comprehensive support systems they provide for patients. Discover how Sage is addressing critical unmet needs in mental health and paving the way for future advancements.

Sage Therapeutics, Inc. (SAGE) - Business Model: Key Partnerships

Collaboration with Biogen for ZURZUVAE commercialization

Sage Therapeutics has established a significant collaboration with Biogen for the commercialization of ZURZUVAE, a treatment for postpartum depression (PPD). Under the Biogen Collaboration Agreement, Sage receives 50% of the net sales from ZURZUVAE. In the nine months ended September 30, 2024, Sage recognized $24.7 million in collaboration revenue related to Biogen's net sales of ZURZUVAE. Additionally, Sage achieved a milestone payment of $75.0 million for the first commercial sale of ZURZUVAE, which was received in January 2024.

Partnership with Shionogi for zuranolone development

Sage Therapeutics has partnered with Shionogi to develop zuranolone. In the nine months ended September 30, 2024, Sage recognized $0.6 million in collaboration revenue related to the supply of zuranolone API under its agreement with Shionogi. This partnership is crucial for advancing the development of zuranolone, which is positioned as a key product in Sage's pipeline for treating mood disorders.

Long-term supply agreements with contract manufacturers

Sage Therapeutics has established long-term supply agreements with contract manufacturers to ensure the production of its therapeutic products. These agreements are essential for maintaining a consistent supply chain for ZURZUVAE and other products. In the nine months ended September 30, 2024, the cost of revenues amounted to $7.96 million, which includes costs related to third-party manufacturing.

Collaborations for research and development of new products

Sage Therapeutics actively collaborates with various organizations for research and development efforts aimed at introducing new products. The company reported a total of $188.9 million in research and development expenses for the nine months ended September 30, 2024, a decrease from $291.9 million in the same period of the previous year. The reduction in expenses reflects a strategic shift in focus towards more advanced stages of development and potential commercialization of existing products.

Partnership	Details	Financial Impact
Biogen	Commercialization of ZURZUVAE (zuranolone)	Collaboration revenue of $24.7 million; Milestone payment of $75 million
Shionogi	Development of zuranolone	Collaboration revenue of $0.6 million
Contract Manufacturers	Long-term supply agreements for product manufacturing	Cost of revenues of $7.96 million
Research Collaborations	Development of new products and therapies	R&D expenses of $188.9 million

Sage Therapeutics, Inc. (SAGE) - Business Model: Key Activities

Clinical trials for product candidates

Sage Therapeutics, Inc. has focused on several key product candidates, notably zuranolone (ZURZUVAE) and dalzanemdor (SAGE-718). As of September 30, 2024, the company reported research and development expenses of approximately $188.9 million for the nine months ended, with specific allocations of:

Product Candidate	2024 Expenses (in thousands)	2023 Expenses (in thousands)	Increase/Decrease (in thousands)
Zuranolone (ZURZUVAE)	$1,637	$100,654	$(99,017)
SAGE-324	$20,377	$24,852	$(4,475)
Dalzanemdor (SAGE-718)	$49,224	$40,910	$8,314
Other Research Programs	$34,546	$61,024	$(26,478)
Unallocated Expenses	$80,928	$112,225	$(31,297)

The significant reduction in expenses for zuranolone reflects the completion of clinical trials and a shift in focus post-approval for postpartum depression (PPD) indications.

Co-commercialization of ZURZUVAE with Biogen

Sage Therapeutics has entered a collaboration agreement with Biogen for the commercialization of ZURZUVAE. During the nine months ending September 30, 2024, Sage recognized $24.7 million in collaboration revenue related to Biogen’s net sales of ZURZUVAE. This marked a significant increase from zero collaboration revenue in the same period of 2023.

The collaboration is structured such that Sage receives 50% of the net sales reported by Biogen, enhancing its revenue stream from this partnership.

Ongoing research and development efforts

Research and development remains a core activity for Sage Therapeutics. For the nine months ended September 30, 2024, total research and development expenses were $188.9 million, a decrease of $103.0 million compared to the same period in 2023. Key drivers of this expense included:

• Completion of clinical trials for zuranolone, resulting in a decrease of $99 million.
• Increased spending on dalzanemdor as it progresses through clinical trials, with expenses rising by $8.3 million.
• Reduction in spending for other programs due to the strategic focus on prioritized candidates.

Regulatory submissions and compliance activities

Sage Therapeutics is actively engaged in regulatory submissions, particularly concerning new drug applications (NDAs) for its product candidates. As of September 30, 2024, the company had a net loss of $304.9 million, attributed largely to costs associated with ongoing regulatory compliance and submissions. The company anticipates further regulatory activities in 2024, focusing on potential new applications for its pipeline products.

Sage Therapeutics, Inc. (SAGE) - Business Model: Key Resources

Experienced sales and marketing teams

Sage Therapeutics has established a robust sales and marketing structure to support the commercialization of its products. The company engages in direct sales efforts for its products, including ZURZUVAE for postpartum depression (PPD). The sales force is supported by experienced marketing professionals specializing in access and reimbursement, market research, and commercial operations.

Intellectual property portfolio

The intellectual property portfolio of Sage Therapeutics is a crucial asset, encompassing patents related to its key products, including ZULRESSO and ZURZUVAE. The company has entered into collaboration agreements that grant co-exclusive licenses for several of its product candidates, enhancing its market position and potential revenue streams.

Cash reserves of $569.2 million as of September 30, 2024

As of September 30, 2024, Sage Therapeutics reported cash, cash equivalents, and marketable securities totaling $569.2 million. This financial position is essential for funding ongoing research and development, operational expenses, and potential future collaborations.

Strong collaboration agreements with Biogen and Shionogi

Sage Therapeutics has entered into significant collaboration agreements with Biogen and Shionogi, which provide substantial financial and operational support. Under the Biogen Collaboration Agreement, Sage received upfront payments totaling $1.0 billion and is eligible for tiered royalties on net sales of its products. Additionally, Sage recognized a milestone payment of $75.0 million from Biogen for the first commercial sale of ZURZUVAE in early 2024.

Key Resource	Description	Value/Amount
Sales and Marketing Teams	Experienced teams supporting commercialization efforts	Not quantifiable
Intellectual Property Portfolio	Patents related to ZULRESSO and ZURZUVAE	Not quantifiable
Cash Reserves	Cash, cash equivalents, and marketable securities	$569.2 million
Collaboration Agreements	Agreements with Biogen and Shionogi	Upfront payments of $1.0 billion, milestone payment of $75.0 million

Sage Therapeutics, Inc. (SAGE) - Business Model: Value Propositions

First oral product approved for postpartum depression (PPD)

Sage Therapeutics has achieved a significant milestone with the FDA approval of ZURZUVAE (zuranolone), marking the first oral treatment specifically approved for postpartum depression. This innovation addresses a critical need in mental health care, offering a new therapeutic option for women experiencing PPD, which affects approximately 1 in 7 women after childbirth.

Unique treatment options targeting brain health disorders

The company's focus on developing unique treatment options for brain health disorders sets it apart from competitors. In addition to ZURZUVAE, Sage is advancing several other compounds in its pipeline, such as SAGE-324 and SAGE-718, which target various neurological and psychiatric conditions. The total revenue from collaboration related to ZURZUVAE sales reached approximately $24.7 million for the nine months ended September 30, 2024, reflecting the product's market potential.

Comprehensive patient support programs for ZURZUVAE

Sage Therapeutics has implemented comprehensive patient support programs to enhance the treatment experience for ZURZUVAE users. These programs are designed to assist patients in navigating their treatment journey, ensuring they receive the necessary support and resources. The company's commitment to patient care is evident in its efforts to foster adherence and optimize treatment outcomes.

Commitment to addressing unmet medical needs in mental health

Sage Therapeutics is dedicated to addressing unmet medical needs in the mental health domain. The company’s research and development expenses for the nine months ended September 30, 2024, amounted to $188.9 million, demonstrating its investment in discovering and developing innovative therapies. With an accumulated deficit of $2.9 billion as of September 30, 2024, Sage is focused on long-term growth and the advancement of its product candidates.

Fiscal Year	Net Loss (in thousands)	Product Revenue, Net (in thousands)	Collaboration Revenue (in thousands)	Research and Development Expenses (in thousands)
2024	(304,888)	3,132	24,661	188,873
2023	(508,783)	8,469	0	291,905

These financial figures highlight Sage Therapeutics' ongoing challenges and strategic focus on innovation in the mental health space. The company continues to prioritize its research initiatives while navigating the complexities of bringing new therapies to market.

Sage Therapeutics, Inc. (SAGE) - Business Model: Customer Relationships

Direct engagement through sales force and marketing initiatives

Sage Therapeutics employs a dedicated sales force to directly engage with healthcare providers and institutions. As of September 30, 2024, the company reported selling, general and administrative expenses of $161.8 million for the nine months ended September 30, 2024, compared to $219.4 million for the same period in 2023. This decrease is attributed to a reduction in personnel-related expenses and overhead costs as part of a restructuring initiative aimed at optimizing operational efficiency.

Patient support program providing educational resources

The company has established a robust patient support program aimed at educating patients about their treatment options. In 2024, Sage Therapeutics has focused on providing resources for patients using ZULRESSO and ZURZUVAE, particularly for postpartum depression (PPD) treatment. The program includes educational materials and access to healthcare professionals to assist patients in understanding their treatment journey. The company reported a total revenue of $28.4 million for the nine months ended September 30, 2024, with $11 million generated from collaboration revenue related to ZURZUVAE.

Insurance navigation and financial assistance services

To enhance patient access, Sage Therapeutics offers insurance navigation services and financial assistance programs. These services help patients understand their insurance coverage options and assist them in managing out-of-pocket costs. In conjunction with these initiatives, Sage reported that net cash used in operating activities was $200.6 million for the nine months ended September 30, 2024, indicating substantial investment in operational capabilities to support patient access.

Ongoing communication with healthcare providers and payors

Sage Therapeutics maintains ongoing communication with healthcare providers and payors to ensure alignment on treatment protocols and reimbursement processes. This communication is critical as the company navigates the complexities of the healthcare landscape. The company has recorded an accumulated deficit of $2.9 billion as of September 30, 2024, reflecting its ongoing investment in research, development, and commercial activities.

Financial Metric	Q3 2024	Q3 2023	Change
Revenue	$11.9 million	$2.7 million	+ $9.2 million
Net Loss	$(93.6) million	$(201.6) million	+ $108 million
Cash, Cash Equivalents, and Marketable Securities	$569.2 million	$N/A	N/A
Cost of Revenues	$5.3 million	$0.9 million	+ $4.4 million

Sage Therapeutics, Inc. (SAGE) - Business Model: Channels

Specialty pharmacy distribution model for ZURZUVAE

Sage Therapeutics utilizes a specialty pharmacy distribution model for its product ZURZUVAE (zuranolone), which was approved by the FDA on August 4, 2023, for the treatment of postpartum depression (PPD). As of September 30, 2024, the net collaboration revenue related to ZURZUVAE sales was approximately $24.7 million. This revenue is derived from the company's partnership with Biogen, which serves as the principal in customer transactions for ZURZUVAE sales.

Direct sales force for product promotion

Sage Therapeutics has established a direct sales force to promote ZURZUVAE. This strategic approach is aimed at ensuring effective communication of the product's value proposition to healthcare providers. As of September 30, 2024, the company reported total selling, general, and administrative expenses of $161.8 million for the nine months ended September 30, 2024. The workforce reduction implemented in August 2023, which saw a 40% cut, was part of a broader strategy to optimize resources for the commercialization efforts of ZURZUVAE.

Digital and traditional marketing strategies

Sage Therapeutics employs a combination of digital and traditional marketing strategies to enhance product awareness. For the three months ended September 30, 2024, the company spent approximately $53.2 million on selling, general, and administrative expenses, reflecting its commitment to marketing and promotional activities. The digital strategies likely include targeted online advertising and social media campaigns aimed at healthcare professionals and potential patients, while traditional strategies may involve print advertising and participation in medical conferences.

Collaboration with healthcare professionals for product awareness

The collaboration with healthcare professionals is crucial for increasing product awareness and adoption. As part of its commercialization strategy for ZURZUVAE, Sage Therapeutics actively engages with healthcare providers to educate them about the treatment and its benefits for patients suffering from PPD. This collaboration is reflected in the company's reported revenue of $11.0 million from collaboration revenue - related party for the three months ended September 30, 2024. The company relies on feedback and insights from healthcare professionals to refine its marketing strategies and improve product positioning in the market.

Channel	Description	Revenue/Expenses (Q3 2024)
Specialty Pharmacy Distribution	Utilizes Biogen's network for ZURZUVAE sales.	$24.7 million (collaboration revenue)
Direct Sales Force	Promotes ZURZUVAE directly to healthcare providers.	$161.8 million (SG&A expenses)
Digital Marketing	Online advertising and social media campaigns.	Included in $53.2 million (total marketing expenses)
Traditional Marketing	Print ads and participation in medical conferences.	Included in $53.2 million (total marketing expenses)
Healthcare Professional Collaboration	Engagement with providers for education and awareness.	$11.0 million (collaboration revenue - related party)

Sage Therapeutics, Inc. (SAGE) - Business Model: Customer Segments

Women with postpartum depression

Sage Therapeutics targets women diagnosed with postpartum depression (PPD), a condition affecting approximately 1 in 7 women after childbirth. The company’s product, ZURZUVAE® (zuranolone), was approved by the FDA on August 4, 2023, and became commercially available in December 2023. This product is the first oral treatment specifically indicated for adults with PPD, designed as a 14-day regimen.

Healthcare providers prescribing mental health treatments

Sage Therapeutics collaborates with healthcare providers, including psychiatrists, obstetricians, and primary care physicians, who diagnose and treat patients with mental health conditions. In the context of PPD, healthcare providers are pivotal in prescribing ZURZUVAE. The company emphasizes the importance of educating healthcare professionals about the benefits and usage of its products, which can significantly influence treatment decisions.

Insurance companies and payors

Insurance companies and payors play a critical role in the commercial success of Sage Therapeutics’ products. The company aims to establish reimbursement pathways for ZURZUVAE, ensuring that it is covered by insurance plans. Understanding the cost-effectiveness and clinical benefits of ZURZUVAE is essential for obtaining favorable reimbursement agreements. As of 2024, Sage anticipates that approximately 70% of the target market for PPD treatments will have some form of insurance coverage that includes mental health treatment.

Research institutions for ongoing clinical studies

Sage Therapeutics partners with research institutions to facilitate ongoing clinical studies for its pipeline products. Collaborations with academic and research entities are crucial for advancing clinical trials and understanding the efficacy of their compounds. As of 2024, Sage has allocated approximately $188.9 million to research and development expenses, with a significant portion dedicated to studying compounds targeting various mental health disorders beyond PPD.

Customer Segment	Key Statistics	Engagement Strategies
Women with postpartum depression	1 in 7 women affected by PPD	Education on ZURZUVAE benefits
Healthcare providers	Targeting psychiatrists and primary care physicians	Workshops and informational sessions
Insurance companies	70% coverage expected for PPD treatments	Negotiations and cost-effectiveness data
Research institutions	$188.9 million allocated to R&D in 2024	Collaborative research initiatives

Sage Therapeutics, Inc. (SAGE) - Business Model: Cost Structure

Significant research and development expenses

Research and development expenses for the nine months ended September 30, 2024, totaled $188.9 million, compared to $291.9 million for the same period in 2023. The decrease of $103.0 million was primarily due to:

• A decrease of $99.0 million in expenses related to the development of zuranolone (ZURZUVAE).
• A decrease of $4.5 million in expenses for the development of SAGE-324.
• An increase of $8.3 million in expenses for dalzanemdor (SAGE-718).
• A decrease of $26.5 million for other research programs.
• A decrease of $31.3 million in unallocated expenses due to restructuring efforts.

The breakdown of research and development expenses for the nine months ended September 30, 2024, is as follows:

Program	2024 (in thousands)	2023 (in thousands)	Increase/Decrease (in thousands)
Zuranolone (ZURZUVAE)	$1,637	$100,654	$(99,017)
SAGE-324	$20,377	$24,852	$(4,475)
Dalzanemdor (SAGE-718)	$49,224	$40,910	$8,314
Other Programs	$34,546	$61,024	$(26,478)
Unallocated Expenses	$80,928	$112,225	$(31,297)
Stock-based Compensation	$16,566	$20,143	$(3,577)
Net Reimbursement from Biogen	$(14,405)	$(67,903)	$53,498
Total R&D Expenses	$188,873	$291,905	$(103,032)

Marketing and sales costs for ZURZUVAE

Selling, general and administrative expenses for the nine months ended September 30, 2024, were $161.8 million, down from $219.4 million in the prior year, representing a decrease of $57.6 million.

For the three months ended September 30, 2024, selling, general and administrative expenses totaled $53.2 million, a significant decrease from $78.1 million in the same period in 2023. The key components included:

• Personnel-related costs: $22.6 million
• Stock-based compensation: $8.7 million
• Professional fees: $12.0 million
• Other expenses: $7.5 million
• Net reimbursement to Biogen: $2.4 million

Expense Type	Q3 2024 (in thousands)	Q3 2023 (in thousands)	Increase/Decrease (in thousands)
Personnel-related	$22,589	$24,368	$(1,779)
Stock-based Compensation	$8,724	$20,979	$(12,255)
Professional Fees	$12,020	$14,180	$(2,160)
Other	$7,467	$12,780	$(5,313)
Net Reimbursement to Biogen	$2,419	$5,835	$(3,416)
Total SG&A Expenses	$53,219	$78,142	$(24,923)

Manufacturing and supply chain expenditures

The cost of revenues for the nine months ended September 30, 2024, was $8.0 million, up from $1.3 million in 2023. This increase reflects the direct and indirect costs related to the manufacturing and distribution of ZULRESSO, including:

• Third-party manufacturing costs
• Packaging services
• Freight expenses
• Royalty payments
• Amortization of intangible assets

In Q3 2024, the cost of revenues was $5.3 million, compared to $0.9 million in Q3 2023, which included $3.6 million of one-time charges related to inventory write-offs and impairment.

Administrative costs associated with corporate operations

Administrative costs, as part of selling, general and administrative expenses, significantly decreased, reflecting the restructuring efforts. For the three months ended September 30, 2024, administrative costs totaled $53.2 million, a decrease from $78.1 million in the previous year, attributed to:

• Reduction in workforce leading to lower personnel expenses.
• Lower stock-based compensation due to previous performance-based vesting criteria.
• Overall reductions in overhead and consulting costs.

Total administrative costs for the nine months ended September 30, 2024, were $161.8 million, down from $219.4 million in 2023.

Sage Therapeutics, Inc. (SAGE) - Business Model: Revenue Streams

Product sales from ZURZUVAE and ZULRESSO

During the nine months ended September 30, 2024, Sage Therapeutics recognized $3.1 million in net product revenue related to sales of ZULRESSO, compared to $8.5 million for the same period in 2023. The company plans to discontinue the commercial availability of ZULRESSO in the U.S. as of December 31, 2024.

For ZURZUVAE, which became commercially available in late 2023, Sage recorded a collaboration revenue - related party of $24.7 million for its share of Biogen's net sales under the Biogen Collaboration Agreement during the nine months ended September 30, 2024.

Collaboration revenue from Biogen and Shionogi

For the nine months ended September 30, 2024, Sage Therapeutics recognized $24.7 million in collaboration revenue - related party from Biogen for ZURZUVAE sales, which reflects a 50% share of Biogen's reported net sales. Additionally, the company recognized $0.6 million in other collaboration revenue related to the supply of zuranolone API under its agreement with Shionogi.

Milestone payments from collaboration agreements

In January 2024, Sage Therapeutics received a milestone payment of $75.0 million from Biogen for the first commercial sale of ZURZUVAE. This milestone reflects the successful launch and initial distribution of the product, which is aimed at treating postpartum depression (PPD).

Potential future revenue from new product candidates and indications

Sage Therapeutics is actively developing additional product candidates, including SAGE-324 and dalzanemdor (SAGE-718), which are in various stages of clinical development. While specific revenue projections for these candidates are not yet available, the company anticipates potential future revenue from new indications and ongoing clinical trials.

Revenue Source	Amount (in millions)	Notes
ZULRESSO Sales	$3.1	Net product revenue for the nine months ended September 30, 2024
ZURZUVAE Collaboration Revenue	$24.7	Share of Biogen's net sales for the nine months ended September 30, 2024
Other Collaboration Revenue (Shionogi)	$0.6	Related to the supply of zuranolone API
Milestone Payment from Biogen	$75.0	Received in January 2024 for the first commercial sale of ZURZUVAE

Article updated on 8 Nov 2024

Resources:

1. Sage Therapeutics, Inc. (SAGE) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Sage Therapeutics, Inc. (SAGE)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Sage Therapeutics, Inc. (SAGE)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.