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Sage Therapeutics Inc (NASDAQ:SAGE)
Q1 2020 Earnings Call
May 9, 2020, 8:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Sage Therapeutics Announced First Quarter 2020 Financial Results Conference Call. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Jeff Boyle. Thank you. Please go ahead, sir.

Jeff Boyle -- Investor Relations

Hello, and thank you for joining Sage Therapeutics' First Quarter 2020 Financial Results Conference Call. Before we begin, I encourage everyone to go to the Investors and Media section of our website at sagerx.com, where you can find the press release related to today's call. I would like to point out that we will be making forward-looking statements, which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. Please consult the risk factors discussed in today's press release, and in our SEC filings for additional details. We will begin the call with prepared remarks by Dr. Jeff Jonas, our Chief Executive Officer; Mike Cloonan, our Chief Operating Officer; and Kimi Iguchi, our Chief Financial Officer. We will be joined for the Q&A session of the call by Dr. Steve Kanes, our Chief Medical Officer.

I will now turn the call over to Jeff.

Jeff Jonas -- Chief Executive Officer and Board Of Directors

Thanks, Jeff, and thanks, everyone, for joining us this afternoon. We are pleased to update you today on our first quarter results. First, let me congratulate Mike on his promotion to Chief Operating Officer. Mike and I have worked closely together over the last three years, and we share a bold vision for Sage. I'm confident that in his new position, Mike will help fulfill the potential of our brain health pipeline through his knowledge of our business and industry, his passion to help patients and his strong leadership skills. Now I'll provide an overview of our first quarter activity and discuss our depression, neuropsychiatry and neurology franchises. Then Mike will provide a more detailed business update. And lastly, Kimi will provide an update on financials. I want to take a moment to acknowledge the challenges faced by the global COVID-19 pandemic. I'm extremely proud of the way our employees, partners and the community have responded in this unprecedented time. I'm happy to say that our teams at Sage are handling virtual work quite well, and our progress across the pipeline to date remains strong. Mike will provide additional detail about potential impact to our business, although, at this point, our timelines remain intact. Sage remains committed to discovering and developing new treatment options for people with brain health disorders.

And we believe today, executing on this mission is even more important than ever as mental health issues are coming to the forefront, and will continue to have a significant impact even after the current phase that the pandemic goes over. We believe the strategic decisions we made in the first quarter have us on the right track to continue our pipeline development of potentially important medicines. So let me start first with our depression franchise. First, we made the difficult but prudent decision to reduce our investment in ZULRESSO, resulting in an expected annualized cost savings from the ZULRESSO-related expenses of approximately $150 million. We remain committed to working with healthcare providers, sites of care and patients seeking access to ZULRESSO, but our downsized commercial efforts will now focus primarily on geographies that have existing and active treating sites. With zuranolone, following our earlier discussions with the FDA, we plan to initiate three new short-term clinical studies in 2020, with the potential, if successful, for three distinct indications. Each of these studies are independent of each other in terms of potential filings. So this is an efficient pathway, requiring, we believe, just one additional positive acute study to demonstrate efficacy in order to bring this medicine to patients in each of the first indications.

Of note, if we're successful, this can be achieved while maintaining a longer-term strategy with the episodic treatment of major depressive disorder, or MDD. One of the questions we've been hearing over the last several weeks is related to our decision to add a 50-milligram dose to the Phase III program. While we won't disclose proprietary data regarding this decision, you may recall that overall reports of adverse events in the MOUNTAIN study were similar between zuranolone 30 milligrams and placebo, signaling the ability to go higher in dose. In fact, zuranolone has been well tolerated in our pivotal clinical studies to date, with no reports of loss of consciousness. To be clear, we have provided and discussed our available data set with the FDA, which includes subjects treated across a broad range of doses and formulations. And these data include our proprietary PK biomarker, adverse event and response data. So we have agreed and a gained agreement to proceed with a 50-milligram dose in our ongoing and upcoming studies. Clinically, we already believe from our studies that 30 milligrams is active, with two positive pivotal trials, one in postpartum depression and another in MDD, and one that just missed the primary endpoint, while still demonstrating rapid onset. If the new Phase III trials with 50-milligram doses are successful, having multiple dose options makes sense for a patient, clinician and the payor.

Let me turn now to our neurology franchise in SAGE-324, our next GABA PAM. We remain on track to initiate a Phase II trial with SAGE-324, 60 milligrams in essential tremor in the first half of this year. As a reminder, essential tremor is the most common movement disorder and affects an estimated six million people in the U.S. alone, and there has not been innovation in the treatment of this disorder in 50 years. Earlier open-label data with Phase III SAGE-324 demonstrated it is a compound with the pharmacologic characteristics, we believe are well suited for development opportunities, not only in essential tremor, but also in epilepsy and Parkinson's disease. We're also progressing the development of SAGE-718 and NMDA PAM as the lead asset in our neuropsychiatry franchise. We plan to initiate one or more Phase IIa open-label studies in disorders associated with cognitive dysfunction in the second half of this year. As a reminder, in a Phase I study of patients with early Huntington's disease, SAGE-718 was well tolerated, and patients demonstrated improved performance compared to baseline on assessments of executive function. We believe these data support our belief that SAGE-718 may have potential as a treatment in multiple disorders within payer cognitive function, including Huntington's, Alzheimer's and Parkinson's disease. Before I turn it over to Mike, there's one more point I'd like to make. Our teams have been hard at work assessing the potential impact of COVID-19 on trial conduct. As of today, our analysis continued to indicate paths forward, including the enrollment of studies at open sites that have put procedures in place for social distancing and have available patients who desire to participate in clinical trials.

So with that, I'll turn it over now to Mike.

Mike Cloonan -- Chief Operating Officer

Thanks Jeff, and good afternoon, everyone. As Jeff mentioned, during the first quarter, we continued a rigorous prioritization and resource allocation process to provide a clearly defined path forward, allowing us to advance programs across our depression, neurology and neuropsychiatry franchises. Let me start with ZULRESSO. I want to first acknowledge it was a difficult decision to reduce our investment in this innovative treatment. As Jeff noted earlier, we will maintain a level of access to ZULRESSO by focusing primarily on geographies with existing treating sites and continuing to support women with PPD. During the first quarter, we continued navigating the barriers to treatment with ZULRESSO, and revenue was $2.3 million, a 17% increase over Q4 2019. The number of moms infused in the first quarter increased by more than 20% compared to the previous quarter, and 12 new treating sites of care were added in the first quarter, increasing the total number of sites that have treated patients with ZULRESSO to 41 since launch. That said, the recent rapid spread of COVID-19 in the U.S. had resulted in a significant reduction in patient demand and sites of care paused treating new patients with ZULRESSO. We started to see this trend in March, and the number of sites pausing treatment has increased. As a result, only 15% of sites that were active in the first quarter, remained active in April.

We also believe that concerns about exposure to the virus have caused a reduction in the number of women with PPD seeking treatment with ZULRESSO, as evidenced by the approximately 75% decline in monthly start form volume in April compared to the average monthly volume in Q1. Given the impact of the COVID-19 pandemic in the U.S., we expect de minimis revenues from sales of ZULRESSO in the second quarter of 2020. We do not plan to provide revenue guidance for the balance of 2020, but we believe the COVID-19 pandemic will continue to have an adverse impact on ZULRESSO sales even after pandemic-related restrictions are eased as we anticipate sites of care will focus efforts on adjusting to new processes and addressing ongoing concerns stemming from the evolving situation. Beyond the impact of COVID-19 on ZULRESSO, I want to spend a few minutes updating you on the potential impact to our clinical programs from the pandemic, and on our efforts to create risk mitigation strategies. We are actively monitoring the guidelines offered by regulatory authorities related to conducting clinical trials during the COVID-19 pandemic. We are aware of many clinical sites that are operating during the pandemic, continue to see trial subjects in person, instituting social distancing measures. Given that the primary endpoint in all zuranolone trials is assessed by subject interview, if a site pauses in-person visits for some or all participants due to the pandemic, we have the potential to implement telemedicine approaches with the appropriate documentation as directed by the regulators.

If that were to recur, we would evaluate the potential impact on the trial and consider whether to make any adjustments if we thought adjustments were warranted. At this time, our timelines for initiating new trials with zuranolone as well as the two Phase II trials with SAGE-324 and SAGE-718 remain unchanged with anticipated initiations for this year, and we are executing against the variables we can control, focusing on patient safety and data collection. With zuranolone, our plans include initiating three new short-term clinical studies in 2020, with the potential, if successful, for three distinct indications, postpartum depression, acute rapid response therapy, or RRT, and MDD when coinitiated with a new standard antidepressant, and episodic treatment of MDD. Importantly, these pending studies are designed to allow for an NDA submission for Zuranolone, potentially for a range of dosing with only one additional positive study to support efficacy in PPD and in RRT when coinitiated with a new standard antidepressant. For the episodic indication, we would need one additional positive efficacy study, plus data from the REDWOOD study. We're also currently evaluating the ongoing zuranolone clinical pharmacology and safety program and plan to finalize requirements to support a potential future NDA with the FDA. This is a good example of our overall approach. We leverage learnings, quickly adapt our new and existing trials and create multiple shots on goal, all with the mission of bringing medicines that matter to people with brain health disorders.

As we prepare to initiate these trials, our efforts are currently focused on database developments, IRB approvals, contracting, investigator meetings and site activation, all of which can be managed remotely and are, therefore, minimally affected by the COVID-19 pandemic at this time. In addition, sites conducting the ongoing SHORELINE trial remain active by utilizing social distancing policies, and where necessary, remote resources. From a sequencing perspective, we expect that the new 50-milligram cohort for the SHORELINE study and the placebo-controlled 301b study, which we are now calling waterfall study, we'll begin enrolling at sites that are able to see subjects in person. We also plan to initiate the PPD study and, finally, the RRT study later this year. We also expect to initiate the Phase II trial with SAGE-324 in essential tremor by the end of the second quarter, and one or more open-label Phase IIa studies with SAGE-718 in disorders associated with cognitive dysfunction in the second half of this year. And again, we are currently focused on database development, IRB approvals, contracting, investigator meetings and finalizing site activation. Before I hand it off to Kimi, I want to reinforce our commitment to leverage learnings and creating medicines that matter. We look for multiple pathways to deliver on our mission, including innovative clinical trial designs, business development opportunities and executing against well thought out strategies to get medicines that matter to patients as quickly as possible.

And now I'll turn the call over to Kimi to review our financials.

Kimi Iguchi -- Chief Financial Officer

Thanks, Mike, and good afternoon, everyone. Before I update you on our financial performance for the quarter, I want to take just a moment to mention how pleased we are with the progress the team has made over the last few months in the face of some truly unprecedented circumstances. As an organization, we've leveraged our resilience to make difficult decisions. I remain as confident as ever that we have a strong financial foundation and the discipline to enable us to operate efficiently as we execute against our current goals. While these unprecedented time has the potential to impact our business, we believe we're well capitalized financially to advance programs across our three brain health franchises for the remainder of 2020. Back in December of 2019, with the MOUNTAIN data readout, we made difficult prioritization and resource allocation decisions. At that point, we paused noncritical investments as we awaited clear direction on our path forward for zuranolone. With that clear path forward for zuranolone, and in the light of the pace of ZULRESSO uptake, we determined the need for restructuring. This was a difficult decision. This encompassed major cost reductions and a reallocation of resources intended to help Sage advance our mission of bringing medicines that matter to people with brain health disorders.

The restructuring included a workforce reduction of more than 50% as well as decreases in external spend. This will result in expected annualized cost savings of approximately $170 million. A significant portion of those cost savings are related to ZULRESSO commercial operations and related G&A support. As part of the restructuring, we will record a charge of $31 million. These costs are principally associated with the workforce reduction. I'll now walk you through the highlights of our first quarter 2020 financial results. Starting with our balance sheet, we ended the first quarter with approximately $875 million in cash, cash equivalents, restricted cash and marketable securities. That's compared with $1 billion at the beginning of the year. We continue to have a strong balance sheet, and I want to emphasize that we anticipate our cash on hand will support operations into 2022 as we advance programs across three brain health franchises. Net revenues were $2.3 million in the first quarter from the sales of ZULRESSO compared to $0.5 million in collaboration revenues from Shionogi for the same period in 2019. As Mike mentioned earlier, as a result of the ongoing impact of the COVID-19 pandemic in the U.S., we expect de minimis revenue from ZULRESSO sales in the second quarter of 2020. We do not plan on providing revenue guidance for the balance of 2020. Our R&D expense decreased to $64 million in the first quarter, including $12 million of noncash stock-based compensation expense.

This compares to $86 million, including $21 million of noncash stock-based compensation expense for the same period in 2019. The decrease is primarily related to the completion of the MOUNTAIN study and positive enrollment of the REDWOOD and RAINFOREST studies with zuranolone. This is part of the resource allocation decision to pause noncritical investments and activities and totally understood our path forward for zuranolone. We remain focused on key strategic areas and supporting ongoing development activities across our depression, neurology and neuropsychiatry franchise. We continue to execute with a deliberate and disciplined approach to capital allocation to advance our pipeline. Selling, general and administrative expenses were $70 million, including $19 million of noncash stock-based compensation expense in the first quarter of 2020. This compares to $84 million, including $23 million of noncash stock-based compensation expense for the same period in 2019.

The decrease in SG&A expenses was primarily due to a decrease in the professional fees related to preparations in the first quarter of 2019 for the commercial launch of ZULRESSO in the U.S. Finally, we reported a net loss in the first quarter of $127 million as compared to a net loss of $163 million for the same period in 2019. Based on our current operating plan, we anticipate our balance of cash, cash equivalents, restricted cash and marketable securities will be at least $550 million at the end of 2020. Our current operating plan does not require us to raise money in 2020. We anticipate our current cash balance of $875 million will support our operations into 2022. But as we've always said, we'll continue to consider sources of capital and other business development opportunities. As you've heard me say before, we take a deliberate approach to our resource allocation. Looking at the year ahead, we'll continue to invest thoughtfully to sequence assets we believe will create near, mid- and long-term value for our stakeholders.

I'll now turn it over to Jeff for closing comments.

Jeff Jonas -- Chief Executive Officer and Board Of Directors

Thank you, Kimi. We have a clearly defined development path to advance programs across our three brain health franchises. I'm proud of how the Sage team has responded to the current COVID-19 pandemic, remaining flexible and resilient as they continue their work to advance our mission. Our business remains strong, we have implemented business continuity policies and practices intended to save proud employees and help reduce the spread of COVID-19. We're working closely with clinical site teams to develop strategies to help mitigate potential disruptions caused by COVID-19 and, at this time, we do not anticipate there will be a significant impact on our time lines for our planned or ongoing clinical programs. Before we open the call for Q&A, I'll leave you with three key points as we move into the second half of the year. First, we have a clearly defined development path forward with the runway expected to support operations into 2022 to advance programs across our three brain health franchises. Second, we are leveraging learnings and making strategic decisions in the context of a very rich portfolio, resulting in several viable pathways we can follow. And third, we believe we will have five data readouts before the end of 2021, with the SHORELINE 30-milligram data readout by the end of 2020.

So with that, I'd like to open the call for questions. Operator?

Questions and Answers:

Operator

[Operator Instructions] Our first question comes from the line of Salveen Richter from Goldman Sachs. Your line is now open.

Salveen Richter -- Goldman Sachs -- Analyst

Hi, thanks for taking the question. So as we look to the year-end data readout with SHORELINE, what do you view as incrementally positive here? And how should we think about interpreting the data, given that this is a single arm study? So just trying to tease out if it will be difficult to assess the efficacy as with no placebo here?

Jeff Jonas -- Chief Executive Officer and Board Of Directors

Great. So this is Jeff. I think we're I'm trying to get Steve on the line, and we're having some technical difficulties. But so again, thanks, everybody. Hope everyone is healthy, and welcome to the call. Remember, SHORELINE is we still have is basically a naturalistic study. It's a real world study, and it's a sort of study that we've been asked to conduct or people have expected to be conducted in the area of antidepressant work. Our right now, it's a pretty classical study. We'll be looking at relatively endpoints such as overall treatment response. We'll be looking at how many people come back for retreatment and once twice or never. And we may be looking at other demographic factors. So what you can expect is a data that suggests how the drug performs in a real-world situation, without any kind of style any kind of clinical intervention beyond what physicians best practices may be. So we believe it's going to be highly informative and something that will help frame our label moving forward about how zuranolone potentially might be best used.

Salveen Richter -- Goldman Sachs -- Analyst

Great, thank you.

Operator

Thank you. Our next question comes from the line of Andrew Tsai from Jefferies. Your line is now open.

Andrew. Your line is now open. Andrew Tsai from Jefferies. Your line is now open.

Andrew Tsai -- Jefferies -- Analyst

Hi, Can you hear me?

Jeff Jonas -- Chief Executive Officer and Board Of Directors

Yes.

Andrew Tsai -- Jefferies -- Analyst

Hi, glad everyone is doing OK. Maybe just a follow-up on the SHORELINE question. I'm actually curious, what kind of information can you see for the enrolled patients so far? I'm curious if you can actually see details on, for example, patient baseline characteristics as well as whether you can monitor for instances of AEs or dropout rates on an ongoing basis. Just very curious to see basically whether you have ability to see that data as patients start to retreat themselves with a higher 50-milligram dose?

Jeff Jonas -- Chief Executive Officer and Board Of Directors

Thanks for the question. If everyone can hear me, I'm hoping you can. Basically, we're treating this like any other typical pivotal program. And that is, we are not doing real-time analysis of the study, save for serious adverse events or anything that might require a 15-day report. But again, that has not been an issue in the program. The way we're planning to do this because, as you know, enrollment is complete, is, at some point later this year, we will lock the data and then undergo an analysis. I think one of the pitfalls we want to avoid is the idea that somehow we're managing an ongoing trial by looking at open label data. So as I think we've talked about this before, our approach to this study is to keep the data within the data monitoring group, but otherwise not to do any real-time analysis.

Akash Tewari -- Wolfe Research -- Analyst

Thanks, Jeff.

Jeff Jonas -- Chief Executive Officer and Board Of Directors

You bet.

Operator

Thank you. Our next question comes from the line of Akash Tewari from Wolfe Research. Your line is now open.

Akash Tewari -- Wolfe Research -- Analyst

Hey, guys. Thanks so much. So given the formulation issues seen in the MOUNTAIN study with the 30-milligram dose, do you have any color on if you saw a similar dynamic show up in ROBIN? Basically, were there patients in that study that you suspected didn't receive an efficacious dose? And if not, could there be different efficacy thresholds in PPD versus MDD? I also noticed you recently published an interesting subgroup analysis from the ROBIN study, where you showed non-SAT efficacy in patients who had a HAM-D under about 28.6, and then stats state over 28.6. Given the trial only included patients with a HAM-D of 26 or greater, what do you think is an appropriate HAM-D inclusion cutoff for your three new pivotal trial?

Jeff Jonas -- Chief Executive Officer and Board Of Directors

So I'm going to start, and then I'm going to turn this over to Jim or Steve, actually, Steve, can you hear me?

Steve Kanes -- Chief Medical Officer

I can hear you, yes.

Jeff Jonas -- Chief Executive Officer and Board Of Directors

Just. Okay. Good. So basically, I think there's a couple of points. As we take a look at this mostly initially to look at the question of so-called severity. But in terms of actual trial metrics, I think we've had I think we've discussed this before, but really, it's an important point, which is the trade-offs in any of these studies are always as follows: as you go higher with HAM-D, it's easier to you expect to it's easier to show a larger treatment effect for obvious reasons, you have more room to move. You have smaller rates of enrollment due to the contingencies of looking for higher HAM-Ds. So with respect to overall depression, if you take a look at most depression trials, most of these decisions are made on trial metrics versus any particular heuristic rationale for why you would use one cut off or the other. The so I think, just generally speaking, most people will look anywhere between a 22% to 24%. We've learned we're not we can't talk about a lot of it. Well, some of it's proprietary. We do have some maneuvers in thinking about how we'll recruit in the future. But I think most people will argue 22%, 24% in that area up to 26%, a reasonable inclusion criteria contingent upon the cut of patients you want to take a look at, level of severity. I'm going to turn this over to Steve then.

Steve Kanes -- Chief Medical Officer

Yes. Thanks, Jeff, and apologies for the technical difficulties. Yes, part of it is, and Jeff is right from the technical perspective, and that's actually the way we look at it. The other piece of it is we want to have a variety of inclusion criterias at time of enrollment. That allows us to get the most general label so that we're not only having to specify a level of severity for patients that are included in the studies, but be able to have a more general label related to the treatments of depression or postpartum depression. So it's both of those things together that we look at as we think about the inclusion criteria for such studies.

Akash Tewari -- Wolfe Research -- Analyst

Yes. And any color on if you saw a similar dynamic in ROBIN that you saw in Mountain where some patients maybe may have not received an efficacious dose?

Steve Kanes -- Chief Medical Officer

The kinds of things that we've talked about is we look at these are standard things that you look at all trials. We pointed it out specifically from MOUNTAIN to really help us and help others understand that there wasn't something fundamental about the trial and the drug. There's always some level of people who don't take medication. However, what we've seen across all of our studies is a very rapid and sustained response. That's been true across all of our studies. We always I think we said it in the call, we leverage our learnings procedures that allow us to track these, and that's what we're doing for the studies moving forward.

Akash Tewari -- Wolfe Research -- Analyst

Thank you so much. Appreciate it.

Operator

Thank you. Our next question comes from the line of Yatin Suneja from Guggenheim. Your line is now open.

Eddie -- Guggenheim -- Analyst

Hey, guys. This is Eddie [Phonetic]on for Yatin. I have a question about the episodic treatment trial that you're going to run. You mentioned in the press release that you'll need the REDWOOD study as well to file in the episodic indication. But you also mentioned that you're sort of winding down sites in the REDWOOD study? So can you just help us understand sort of what the timing is for the readout of the REDWOOD study? And if we should expect it before after the new episodic trial?

Steve Kanes -- Chief Medical Officer

Yes. So thanks for that. The things that you need to think about for the entire program is, right now, we're prioritizing the initiation of the studies for both postpartum depression as well as RRT. What we're committed to is going after episodic treatment. But for the moment, the most important things for us are really the most efficient pathway to filing. So as we look at the program together, PPD is something that we can file on with just one additional study. Same thing with RRT. One additional trial without the need for the long-term data is what we would require or would be required for filing for either of those indications. So when you look about prioritization, we look at what kind of data we need now and what data we need in the future. We've paused enrollment in the REDWOOD study. We'll reinitiate that when it's appropriate, and that's kind of the way we think about it. We're trying to be very prudent with the way that we focus our efforts as well as our resources.

Mike Cloonan -- Chief Operating Officer

Yes. And I think, Steve, maybe just to add on, this is Mike. I mean, this really is a portfolio prioritization process, right? We went through the restructure. We looked at the three paths that we had with 217, and we determined that there's still a great path for all three and we can hold on the 302 study, the REDWOOD study now, but still very much committed to the episodic treatment, right? So we're excited about the three paths and giving us a single-shot on goal for both PPD and RRT. And then we'll prosecute and move the 302 study at the right time, but it really is a resource allocation, portfolio allocation and strategy that we laid out.

Jeff Jonas -- Chief Executive Officer and Board Of Directors

Yes. One actually additional comment, which is practical. So practically speaking, is we have we've been working on a lot of these trials since the first quarter. And as we open up sites and the sites are opening, it's not usually advisable to have competitively enrolling trials with the same medication. So there's also quite a practical issue here, which is, we'd like to make sure we move these trials that are necessary could give us rapid registration first. And so they there's some pragmatics here as well.

Operator

Thank you. Our next question comes from the line of Paul Mattias from Stifel. Your line is now open.

Paul Mattias -- Stifel -- Analyst

Great, thanks so much for taking my questions. Two for me. One on the questions surrounding the therapeutic index of 50 mg. How much can you tell us about what additional data you've submitted to the FDA? And how many total exposures you have above 30 milligrams of 217 just across different types of studies? And then in terms of SHORELINE, can you just talk a little bit about how you might handle dropouts? and for the clinical data in different scenarios? There's I guess there's an element to this where, if a patient does great on one dose, it might be hard to track that patient out to a year. So how do you think about that kind of funky scenario where you could be a victim of your own success in certain populations?

Jeff Jonas -- Chief Executive Officer and Board Of Directors

Great. So a couple of comments. With SHORELINE, we have we'll take it when the staff finds to Kaplan-Meier and there are different maneuvers that one can do. And as you've already pointed out, in any study where you have naturalistic treatment, both responders may drop out and nonresponders may drop out. So very almost equal and opposite reasons. So there are ways to do that. One of the maneuvers is to simply assume that you're an analytic your analysis denominator are the patients who, at least make it to your first official follow-up, which, in SHORELINE, is in 60 days. And there are other maneuvers as well. Now I think one of the questions you didn't ask, but certainly one we have to consider is COVID and what that will do with people's accessibility to follow-up. So I think that's something we'll also take into account. But in any Kaplan-Meier discussion, you'll be doing sensitivity analysis in the analysis plan to take a look at those eventualities. With respect to the 50, I think a lot of the data that we have is proprietary.

And with respect to biomarkers, exposures and what we've done. I think it's fair to say that you have to remember that this was a program it is a program that has a large cohort of studies that are conducted as part of the NDA, that are part of an NDA that where we don't disclose things like driving studies, drug abuse liking studies and things. And so we've gone substantially higher than 50 in these studies. Again, I don't we can't provide any more of a breakdown at this point for competitive reasons. I think what's important to point out is all of the data has been seen by the agency, including the population pkaE data and all these kind of cross exposure and all formulations, with various levels of exposure, and we're comfortable that 50 has an as you know, by regulation, has an adequate safety margin, and we're very comfortable that this is the right dose to test.

Paul Mattias -- Stifel -- Analyst

That's really helpful. Will we see any 50 data later this year when we get the SHORELINE results?

Jeff Jonas -- Chief Executive Officer and Board Of Directors

That's your third question.

Paul Mattias -- Stifel -- Analyst

Sorry.

Jeff Jonas -- Chief Executive Officer and Board Of Directors

That was well done, but I'll talk so our plan is to enroll patients with 50 insurer line and to allow retreatment with 50. I think the presentation of data for that study is really it's still premature to estimate when those 50-milligram data would be coming out. And so we'll keep you posted.

Steve Kanes -- Chief Medical Officer

Yes. We have it. Yes, Paul, what we have said is that we'll have we'll certainly have data at 30 with SHORELINE with this year, and I think that's something that we're very confident in.

Operator

Thank you. Our next question comes from the line of Cory Kasimo from Jpmorgan. Your line is now open.

Turner -- Jpmorgan -- Analyst

Hey, this is Turner [Phonetic] on for Corey. I'm hoping you just provide any additional details for the Phase III RRT trial, in particular, just the sizing of the study? And what do you need to achieve on top of standard of care and antidepressants?

Steve Kanes -- Chief Medical Officer

So thanks for the questions. The RRT study is really just to raise it up a notch is this is really a study to look at the opportunity to get patients better quickly in addition to a newly started antidepressant. So the study will be comparing two arms, one patient one group where they're taking the new antidepressant plus placebo, the other arm is a new antidepressant plus SAGE-217 and zuranolone at 50 milligrams. When we initiate the trial, we really get it under way. We'll share all of the details, including the size of the patient numbers, the sizing and all the statistical assumptions. But I would say this, it's in line with the kinds of studies that we've done for our Phase III programs and their Phase II studies. The approaches that we're taking are very similar and say, for the 50-milligram dose, which is what Jeff was just describing, that the endpoints and the approach that we're taking is very similar.

Mike Cloonan -- Chief Operating Officer

And Steve, maybe just I can add some the commercial strategy and how this kind of ties together too, right? I think it's helpful to remind folks that with RRT is the first indication we could have in MDD, we look at this as an exciting opportunity to get real-world evidence for both patients, physicians and payors with zuranolone. And so when we look at this, as Steve said, there's a treatment gap that exists today that we think zuranolone has the opportunity to fill. And by getting this real-world evidence, while we're waiting for the episodic treatment to come, think there's the potential to accelerate that treatment paradigm shift that we've said. We still really believe in this in the paradigm shift that we're going after with episodic, that is the end game for us. But the elegance of this strategy right now is to get some real-world experience early with RRT. And Steve, I don't know if you want to add one thing on top.

Steve Kanes -- Chief Medical Officer

Yes. I mean, this is where there's a lot of things at Sage that I'm really interested in. As a psychiatrist, I can tell you that being able to fill that gap in therapy that Michael was referring to is a really important one. There's nothing out there that does this people people really have an interest in finding ways to get patients better quickly, and to have that be fully integrated into their way of thinking about treatment. It's why there's a new FDA guidance around this. And it's why I think it's such an important initial step into the MDD world. It's something that we're really, really interested to get going, but as a psychiatrist, I'm really excited to have this data.

Turner -- Jpmorgan -- Analyst

Great, thanks.

Operator

Our next question comes from the line of Ritu Baral from Cowen. Your line is now open.

Lyla -- Cowen -- Analyst

Hi guys, This is Lyla [Phonetic] on for Ritu. Just a quick follow-up for on SHORELINE. You said that you can easily involve telemedicine in the readout. But could you briefly say how maybe a proportion of patients that have already been using telemedicine? And also whether or not you aim to report subjects that have had telemedicine versus those that were able to visit in person?

Steve Kanes -- Chief Medical Officer

So yes, this is Steve. We were talking about what approaches we'll take. I would say that this is giving you an idea of how we'll approach if we need to do these things. And so how we handle the data is it would certainly be premature to speculate on that. What we do know is the FDA has given guidance on how to handle these adaptations during this period for registration programs. So as we work through the program, as we understand what impact that might have, we'll certainly share that. I think the most important thing to keep in mind is that there are ways to implement the key endpoints in ways that are in agreement with the FDA guidance that allows us to move forward in an appropriate way. And I think, Mike said it during the call, we are monitoring this extraordinarily closely. We are in touch with the sites, the CROs, the procedures they're putting in place, including the data collection, and that's, from my perspective, paramount.

Operator

Thank you. Our next question comes from the line of Dane Leone from Raymond James. Your line is now open.

Dane Leone -- Raymond James -- Analyst

Hi, thank you for taking my questions and the update. Just two quick ones for me. One, you said enrollment was complete in SHORELINE. Is was that did you enroll to the target? I thought it was around 600 patients. So that's question one, just what actual enrollment was that's been completed? And the second one, we get a lot of questions in sorry, you want to answer that first?

Steve Kanes -- Chief Medical Officer

Yes, I'll just fire it out there. Yes, we enrolled to our target. It's completed enrollment.

Dane Leone -- Raymond James -- Analyst

Okay. Great. And then the second one, maybe a little bit more complex. You have a peer company that is seemingly going in a similar direction on the RRT basis, but more in treatment resistant. So there's been a lot of questions in the investment community about how your approach in what you characterize as MDD would be different considered clinically versus what you do in traditional treatment? How does your team think about what you would define RRT for major depressive versus treatment-resistant kind of delineate?

Jeff Jonas -- Chief Executive Officer and Board Of Directors

So I'm not aware of which someone has to mute their phone. I'm not aware of which company you're referring to, but it's probably not relevant at this point. If you look at what's required for RRT, there are a few attributes that we believe are necessary for a drug to be useful. And I think one of the reasons we pursue 217 is that when and you've seen and we've made this data available, we published that data. So one is, as you probably know, in all of our trials, even MOUNTAIN and in all the ZULRESSO trials, we've consistently demonstrated rapid and clinically meaningful separation from placebo in a within the first few days or measurement period. So that's #1. Secondly, we've demonstrated what happens after the drug has been withdrawn. And that is we've seen it with both mechanisms, ZULRESSO and in MOUNTAIN. You see overall good stability of the effect. Third, we have extensive drug-drug interaction data, which is critical for the utility in RRT, where it's anticipated these drugs will be and this is what will I think Steve mentioned this, these drugs need to be co-administered with SSRIs. So the ability to avoid drug-drug interaction is very important. And as you know, over 1/3 of our patients in our trials, have shown we have a lot of safety data on that. And fourth, we've shown that there's we've shown no evidence of rebound or withdrawal after the drug has been stopped as well as stability. So if you look at the attributes, and you go through the guidance, I'm not sure who else is looking at that, but I believe, based on the published and public data, 217, we believe, is uniquely situated to meet the FDA requirements for RRT.

Steve Kanes -- Chief Medical Officer

Yes. I would just add. So yes, I would just say that a part of what's so important about this is that statistical separation very early on and clinically meaningful differences that we see right away. And that is a very unique profile, one that we're very interested in continuing to explore in RRT as well as in PPD as well as major depression.

Dane Leone -- Raymond James -- Analyst

Thank you.

Operator

Thank you. [Operator Instructions] Our next question comes from the line of Vamil Divan from Mizuho Securities. Your line is now open.

Vamil Divan -- Mizuho Securities -- Analyst

Thanks for all the color on the clinical program. I guess I just have one, maybe more on the numbers and how to think about sort of spending trends for the rest of the year? I know you're not giving formal guidance. It sounds like you're already making some tough decisions back in December, January. You announced the program formally at the beginning of April. I'm just trying to get a sense of how much of the restructuring was already implemented in 1Q versus how much more of a step down might we see or change when we see as we look at our 2Q and the second half of the year, both in terms of R&D and SG&A, if you could?

Kimi Iguchi -- Chief Financial Officer

Great. This is Kimi. Hopefully, everybody here should me. But again, just context setting, remember, we have $875 million at the end of the first quarter in cash, and we said that we would have at least $550 million in cash at the end of the year, at the end 2020, and that the cash that we have on hand will support our operations into 2022. I think the other thing that we've always said consistently is that we've been very disciplined and deliberate in our investing. And I think you saw a bit of that in the first quarter, right? Some of that is with regards to I talked earlier about when we got the data for MOUNTAIN, we said, let's step back and look at nonclinical investments and make those decisions now to pull back, and that's really reflected in the SG&A line in the first quarter. And also within R&D, we had we held on zuranolone until we had our path forward. We waited for our discussions with the agency and understanding what our clear path forward was so there was some reductions in the R&D spend related to that. Those there are not the impacts from the restructuring. Those impacts, you'll see in Q3 and Q4. But again, this just shows that we take a very disciplined approach to it. We identified things early, and we made those adjustments. And lastly, I'll just say, and Jeff has talked about it. There's a lot of trials initiating, a lot of data readouts. And those are a lot of levers that will happen for us, and the way we think about continuing our investing and what we move forward. So as those data readouts happen, that will also impact our thinking on our investment level thank you.

Operator

Thank you. Our next question comes from the line of Matthew Harrison from Morgan Stanley. Your line is now open.

Max Skor -- Morgan Stanley -- Analyst

Okay, thank you. Okay. This is Max Skor on for Matthew Harrison. I was just wondering, have you thought about how COVID-19 could have an effect on placebo responses. How are you potentially controlling for variable region-specific events?

Steve Kanes -- Chief Medical Officer

The one season placebo responses across all our trials are well within industry metrics. Obviously, it's the same answer. As we get rolling with the trials. We'll be looking to see whether or not there's anything about the conduct of those studies that we need to adapt. But the same thing is always true, which is, these are randomized trials. If there are effects that are nonspecific, that we would expect them to be in both arms. But of course, we'll be tracking that closely. And if there's anything we need to do to adapt the trials, we'll do so.

Max Skor -- Morgan Stanley -- Analyst

Thank you.

Operator

Thank you. Our next question comes from the line of Marc Goodman from SVB Leerink. Your line is now open.

Rowan -- SVB Leerink -- Analyst

Hi guys, This is Rowan [Phonetic] on the line for Mark. A quick question about the three upcoming studies for zuranolone. Could you elaborate a little bit on the virtual capabilities that you might be building into these trials, like remote monitoring or things like that? And if you know if your selected sites are already doing this now?

Jeff Jonas -- Chief Executive Officer and Board Of Directors

This is Jeff. I'll start, and I'll turn it over to Steve. I just want to speak a little bit more broadly and which is, we're not alone in saying this. We haven't just recently discovered telemedicine and remote monitoring. We've been doing this in many of our trials from the start. As you may expect, in the 303 trial, in SHORELINE, we've already been we have many of those things in place. We've also had remote data and other, which we haven't disclosed in the MOUNTAIN study. So we have a fair bit of experience already having done that. And we've incorporated a lot of those learnings into these new programs. So I think that, beyond that, I'm not sure we're at liberty today, for proprietary reasons, to talk about what which technologies we've utilized, but suffice it to say, this has been part of our programs from the early days of the company. Steve, I don't know if you want to add anything to that?

Steve Kanes -- Chief Medical Officer

Yes. I would just say, we've been all over this since COVID first popped up. We've been looking at ways that we can file guidance that we can adapt. As you said, many of our endpoints are fully adaptable to be used remotely. It's even part of the trends within medicine, as you're well aware, and in psychiatry, in particular. So as we think about what's going to be useful for us now, also what's going to allow us to continue our work in the future, understanding how to use technologies of all sorts and adapt our trials in accurate ways is exactly what we'll be doing. We'll be getting those data as we move forward. We'll be tracking the trials in real-time to understand what impact they might have. But from where we sit right now, as Jeff said, implementing the kinds of things we need to do in order to move things forward is exactly what we're doing, and we're very confident about it.

Operator

Thank you. Our next question comes from the line of Gary Nachman from BMO Capital Markets. Your line is now open.

Ely -- BMO Capital Markets -- Analyst

Hi guys, thanks for taking the question. This is Ely [Phonetic] on for Gary. I was wondering if you can comment on the status of your collaboration with for Shionogi for zuranolone and what their clinical development efforts have consisted of thus far?

Mike Cloonan -- Chief Operating Officer

Yes. This is Mike. I'll take it first, and then I'll pass it over to Steve. I mean, just at a high level, we've been very pleased with the collaboration with Shionogi right? As you go back to even when we first initiated the collaboration with them, we found a very like-minded partner that has an outstanding track record in CNS in Japan. They are progressing the clinical development well in Japan, continuing to make progress on everything that we've seen there in lockstep with us, taking the learnings that we've had, right from our trials and adapting where necessary. But at this point, they continue to be on track. They have finished the Phase I. And so Steve, I don't know if there's any other color that you want to add to the clinical development there?

Steve Kanes -- Chief Medical Officer

Yes. I mean so the ability to track and have us work hand in glove has been part of the original partnership, and that's been going extraordinarily well. They share our vision around the short-term treatment for depression, whether it be for episodic treatment and retreatment and so forth. And they view that as industry leaders in Japan and in Asia in depression, they view that as something that's really important to move the field forward. So all of that is to say that their program has been going well. What they see is what we see. The profiles of the drug is very similar across regions, and they're continuing to move forward as we are.

Ely -- BMO Capital Markets -- Analyst

Thanks.

Operator

Thank you. Our next question comes from the line of Brian Abrahams from RBC Capital Markets. Your line is now open.

Brian Abrahams -- RBC Capital Markets -- Analyst

Hi, thank you for taking my questions. I'm curious what special challenges do you foresee to initiating the new 217 studies into a pandemic environment? I know you mentioned your ability to collect endpoint data through telemedicine. But I guess I'm also curious about whether you might expect inflated baseline HAM-Ds, which obviously could impact placebo effect, or any sort of caps on potential improvement? And how you might manage through that? And then secondarily, I was wondering if you could remind us your latest views on how much durability data beyond the 2-week period for the PPD and RRT studies might be required for approval?

Jeff Jonas -- Chief Executive Officer and Board Of Directors

This is Jeff, and I'll then turn it over to Steve. I think there's a general issue, which is, one, that we always deal in psychiatry, which is what's the impact of the psychosocial stressor on the development of depressed mood? And I think well, I don't think. It's really important to remember that people who come into these kind of studies really ought to meet the criteria for major depressive disorder. So they will meet the DSM-5 criteria. So respective of the no, regardless of what psychosocial precipitants might be, now these are not going to be people with reactive depression, which is what you worry about with people with acute onset sort of grief or that kind of reaction. So we're comfortable that the diagnostic criteria have enough reliability to weed out the so-called reactors. With respect to the general with respect to the issue about durability, we've already discussed this with respect to episodic. With respect to the other two indications, both the RRT indication and postpartum, all that will be required is the same type of design that we've used before, two weeks of acute therapy with an additional with additional four weeks of follow-up, and that will be it. And that's, of course, one of the reasons when we looked at our prioritization, we recognize that those two indications provide a potentially very rapid pathway to for patient access into the market with those two other indications. Steve, I don't know if you have anything else you want to add?

Steve Kanes -- Chief Medical Officer

Yes. The only thing I'd add is the exploration of drugs for depression for psychiatric disorders couldn't be any more important than it is right now. As we emerge from the COVID crisis, the rates of depression, you're already starting to see this in the late press and people are talking about it. The rates of these true depressions, we're not as Jeff said, not reactive depressions, refracs, we're talking about major depressive disorders in the midst of a global crisis. It is going to be critical to be able to provide new rapidly active medicines, not just for the TRD patients, but for everybody. And that's what this program has been about since the beginning. And it's why we're persisting through this, figuring out our way because we really want to get that medicine to patients as efficiently as we can.

Brian Abrahams -- RBC Capital Markets -- Analyst

Really helpful perspective. Thanks, Steve and thanks, Jeff.

Steve Kanes -- Chief Medical Officer

You bet. Thanks so much.

Operator

Thank you. At this time, I'm showing no further questions. I would like to turn the call back over to management for closing remarks.

Jeff Jonas -- Chief Executive Officer and Board Of Directors

Well, first, thanks, everybody, for attending today, and I hope all of you continue to stay safe and healthy. And I want to make a few closing remarks before I release all of you. I think, first, I think Steve made a really important point. We often give a lot of lip service to the need for treating mental health, but we're seeing this more and more today, people under severe stress, under our frontline workers who are working in the ERs and the hospitals, their mental health is a medical medically important aspect of our ability to beat COVID. And we really need to pay attention to it, and it is just going to be a more serious issue as time goes on. With respect to Sage, a few other comments I'd like to make. I think we're now in a very unique position, especially after all post MOUNTAIN. We have a clearly defined development path forward for multiple programs across our brain health franchises. With respect to zuranolone, we fundamentally have three shots on goal in a company with what we believe is potentially one of the richest CNS pipeline still in the CNS space. We have five data readouts to be looking forward to by the end of 2021 and the SHORELINE data for 2020. So we believe that Sage is uniquely positioned with a great team, with great financial strength to execute on our objectives. So with that, I'd like to thank everyone for their attention. I really appreciate your time. I hope everyone stays healthy. And we look forward to our one-on-ones. Thanks, everybody.

Operator

[Operator Closing Remarks]

Duration: 57 minutes

Call participants:

Jeff Boyle -- Investor Relations

Jeff Jonas -- Chief Executive Officer and Board Of Directors

Mike Cloonan -- Chief Operating Officer

Kimi Iguchi -- Chief Financial Officer

Steve Kanes -- Chief Medical Officer

Salveen Richter -- Goldman Sachs -- Analyst

Andrew Tsai -- Jefferies -- Analyst

Akash Tewari -- Wolfe Research -- Analyst

Eddie -- Guggenheim -- Analyst

Paul Mattias -- Stifel -- Analyst

Turner -- Jpmorgan -- Analyst

Lyla -- Cowen -- Analyst

Dane Leone -- Raymond James -- Analyst

Vamil Divan -- Mizuho Securities -- Analyst

Max Skor -- Morgan Stanley -- Analyst

Rowan -- SVB Leerink -- Analyst

Ely -- BMO Capital Markets -- Analyst

Brian Abrahams -- RBC Capital Markets -- Analyst

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