Sage Therapeutics has announced a significant restructuring initiative that will result in approximately one-third of its workforce being laid off, which amounts to around 165 employees. The company aims to streamline its operations and refocus its early-stage drug pipeline.
The majority of the layoffs will affect the research sector, with more than half of the affected employees coming from that area. Alongside these cuts, Sage will also see the departure of five senior executives, including its chief legal officer, chief financial officer, and chief technical officer.
The restructuring is expected to be completed by the end of the current quarter and aims to extend the company's operational runway following a series of clinical and regulatory challenges that have negatively impacted its market position.
Last year, Sage, in partnership with Biogen, received FDA approval for its drug Zurzuvae for the treatment of postpartum depression. However, the approval was limited as the FDA did not grant clearance for its use in major depressive disorder (MDD) due to mixed results from clinical studies. This narrower-than-expected approval significantly restricted Zurzuvae's market potential, leading Sage to implement a previous workforce reduction of 40%.
Sage has faced multiple setbacks in its drug development pipeline, including the failure of a candidate drug aimed at improving mental function in Parkinson's patients and the drug dalzanemdor not meeting expectations in a study involving patients with mild dementia due to Alzheimer’s disease. As a result, Sage has decided to halt further development of dalzanemdor for this indication, although it will continue testing the drug for Huntington’s disease.
The company has also encountered difficulties with another drug licensed to Biogen, which failed to achieve positive results in a mid-stage study targeting a common type of tremor. Sage is now prioritizing its pipeline development efforts while awaiting the study readout for dalzanemdor in Huntington’s disease.
The company's ability to successfully launch and market Zurzuvae will be critical in determining its future trajectory, especially in light of the recent setbacks that have raised questions about its drug development capabilities.