Sage Therapeutics to halve its total workforce in radical cost-cutting move
pharmafile | April 8, 2020 | News story | Research and Development, Sales and Marketing | Sage Therapeutics, pharma, staff cuts
Sage Therapeutics has revealed a radical restructuring effort to cut costs and “enable the company to advance its corporate strategy and pipeline”. To this end, the company confirmed it would be axing 53% of its workforce, equivalent to 340 employees.
This drastic staff cut, alongside decreased external spending, is expected to generate cost savings of around $170 million per year for the company, with around $150 million related to selling, general and administrative expenses (SG&A).
However, the reduced operational capacity that comes with these cuts will, the company admitted, impact the availability of its FDA-approved post-partum depression therapy Zulresso (brexanolone), with many of the cuts coming from the drug’s sales team. Zulresso’s 60-hour infusion process has become difficult to deliver under the ongoing COVID-19 pandemic, and while the company said it was committed to ensuring access to the drug, it confirmed it would be focusing its commercial efforts on “geographies that have existing, active Zulresso treating sites”.
Instead, the company will focus on its clinical development projects, including its depression therapy zuranolone, which failed in a major depressive disorder study in December last year.
“The headwinds we are facing individually and collectively, along with a recognition of our need to move forward as a company, have led to this difficult decision,” remarked Jeff Jonas, Chief Executive Officer at Sage Therapeutics. “We believe this cost reduction and reallocation of resources will help Sage advance our portfolio in a way that is consistent with our mission of delivering medicines that matter to people with serious brain health disorders.
“Unfortunately, we will be saying goodbye to some of our valued colleagues and I want to thank them for their dedication to always doing what’s best for patients,” he continued. “Moving forward, we are confident that we have a great team that will continue to execute on our multi-franchise strategy. We believe Sage’s mission is more important than ever, especially as mental health issues are coming to the forefront and will continue to have significant impact, even after the current phase of the pandemic.”
The company expects that these restructuring efforts will be enough to operate on until 2022, factoring in a one-time cost of around $31 million that Sage says will be the price of delivering the changes. Beyond that, the company said its R&D milestones for 2020 and 2021 would remain unchanged.
Matt Fellows
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