SAGE THERAPEUTICS, INC. You should read the following discussion and analysis of our financial condition
and results of operations together with our condensed consolidated financial
statements and related notes appearing elsewhere in this Quarterly Report on
Form 10-Q, or Quarterly Report, and the audited financial statements and related
notes contained in our Annual Report on Form 10-K for the year ended
Overview
We are a biopharmaceutical company committed to developing and commercializing
novel medicines with the potential to transform the lives of people with
debilitating disorders of the brain. Our first product, ZULRESSO™ (brexanolone)
injection, was approved by the
The COVID-19 pandemic is causing major disruptions to businesses and financial markets worldwide. We are closely monitoring the impact of COVID-19 on our employees, and our business operations. We have adopted a series of precautionary measures in an effort to protect our employees and mitigate the potential spread of COVID-19 in the community. For example, we have instituted a remote work policy for our employees, including our field-based employees, and have temporarily replaced all in-person meetings and interactions with virtual interactions.
The recent rapid spread of COVID-19 in the
27
--------------------------------------------------------------------------------
The following table summarizes the status of our product and product candidate portfolio as of the filing date of this Quarterly Report.
[[Image Removed]]
Our first product, ZULRESSO™ (brexanolone) injection, is a proprietary
intravenous, or IV, formulation of brexanolone. Brexanolone is chemically
identical to allopregnanolone, a naturally occurring neuroactive steroid that
acts as a positive allosteric modulator of GABAA receptors. In
ZULRESSO is administered as a continuous infusion given over two and a half days. Because of the risk of serious harm resulting from excessive sedation or sudden loss of consciousness during the ZULRESSO infusion, ZULRESSO is approved for administration in a medically-supervised healthcare setting that has been certified under a Risk Evaluation and Mitigation Strategy, or REMS, program and meets the other requirements of the REMS program, including requirements related to monitoring of the patient during the infusion. Patients who are prescribed ZULRESSO are required to enroll in a registry which may allow us to compile additional information to further our understanding of the risk of excessive sedation or sudden loss of consciousness during administration of ZULRESSO and management of the risk. Given the mode and setting of administration of ZULRESSO and the requirements of the REMS program, ZULRESSO has been administered to date primarily to treat women with severe PPD, and we expect that to continue to be the case. We estimate that about 20% to 30% of women diagnosed with PPD fall into this category.
Our next most advanced product candidate is zuranolone (SAGE-217), an oral compound that is currently in Phase 3 clinical development for PPD and major depressive disorder, or MDD. Zuranolone is a novel neuroactive steroid that, like brexanolone, is a positive allosteric modulator of GABAA receptors, targeting both synaptic and extrasynaptic GABAA receptors. The FDA has granted Breakthrough Therapy designation and Fast Track designation to zuranolone in the treatment of MDD. To date, we have completed three pivotal clinical trials of zuranolone, two in MDD and one in PPD. The first completed pivotal trial evaluating zuranolone in the treatment of MDD and the completed pivotal trial evaluating zuranolone in the treatment of PPD both met their primary endpoints. The pivotal Phase 3 clinical trial evaluating the effect of zuranolone on depressive symptoms in adults with MDD, known as the MOUNTAIN study, did not meet its primary endpoint. Following discussions with the FDA, we plan to initiate the following three new Phase 3 clinical trials of zuranolone in 2020:
-a placebo-controlled trial evaluating a two-week course of zuranolone 50 mg in women with PPD, with additional short-term follow-up;
28
--------------------------------------------------------------------------------
-a placebo-controlled trial evaluating a two-week course of zuranolone 50 mg, when co-initiated with a new open-label selective serotonin reuptake inhibitor, or SSRI, as an acute rapid response treatment in patients with MDD, with additional short-term follow-up; and
-a placebo-controlled trial evaluating a two-week course of zuranolone 50 mg in patients with MDD, with additional short-term follow-up.
Topline results from these three studies are anticipated in 2021. We are also continuing our SHORELINE study, an open-label Phase 3 clinical trial (MDD-303) evaluating the safety of as-needed repeat treatment with zuranolone in which patients receive an initial two-week course of zuranolone and as needed retreatment for up to one year. Enrollment of patients receiving the 30 mg dose in the SHORELINE study was completed in the third quarter of 2019, and we expect to report top-line results as to patients at the 30 mg dose in 2020. We have also amended the protocol to allow currently enrolled patients to receive retreatment with zuranolone 50 mg. Additionally, we expect to enroll a new cohort of patients with MDD in the SHORELINE study who will receive zuranolone 50 mg.
In the fourth quarter of 2019, we paused enrollment in our REDWOOD study, a placebo-controlled Phase 3 clinical trial in MDD evaluating the efficacy (time to first relapse) and long-term safety of fixed interval zuranolone monotherapy maintenance treatment (treatment without traditional antidepressants) in which randomized patients receive a two-week course of zuranolone or placebo every two months until the first relapse for up to one year. We also paused enrollment in our RAINFOREST study, a placebo-controlled polysomnography Phase 3 clinical trial of zuranolone in patients with MDD who have co-morbid insomnia. We are in the process of closing all clinical trial sites for both of these studies while we focus our resources and activities on enrollment in the three new planned Phase 3 clinical studies. We plan to reevaluate whether and when to reinitiate the REDWOOD and RAINFOREST studies at a later date. We also continue to evaluate the ongoing zuranolone clinical pharmacology and safety program.
In addition to zuranolone, we have a portfolio of other novel compounds that target GABA A receptors. SAGE-324 is a novel GABA A receptor positive allosteric modulator with preclinical pharmacokinetic and pharmacodynamic properties that suggest suitability for chronic oral dosing. We plan to develop SAGE-324 for a number of neurological conditions, including potentially essential tremor, epileptiform disorders and Parkinson's disease. Based on the results of the Phase 1 clinical program, including a positive signal observed in a small cohort of patients with essential tremor, and our other work in this area to date, we initiated study-related activities for a Phase 2 clinical trial evaluating SAGE-324 in the treatment of essential tremor in the fourth quarter of 2019, and plan to commence dosing in the first half of 2020. Our portfolio of novel GABA A receptor positive allosteric modulators also includes SAGE-689, intended for intramuscular administration, for which we have completed the non-clinical studies required to move into a Phase 1 clinical development program, and other compounds at earlier stages of development with a focus on both acute and chronic CNS disorders.
29
--------------------------------------------------------------------------------
Our second area of focus is the development of novel compounds that target the NMDA receptor. The first product candidate selected for development from this program is SAGE-718, an oxysterol-based positive allosteric modulator of the NMDA receptor, which we are exploring in certain cognition-related disorders associated with NMDA receptor dysfunction, including Huntington's disease. Examples of indications involving NMDA receptor dysfunction also include certain types, aspects or subpopulations of a number of diseases such as depression, Alzheimer's disease, attention deficit hyperactivity disorder, schizophrenia, and neuropathic pain. As part of our Phase 1 clinical program, we evaluated the safety, tolerability and pharmacokinetics of SAGE-718 in a small cohort of patients with early Huntington's disease. As part of this study, we also conducted assessments of executive functioning with measures relevant to the core cognitive decline observed in people with Huntington's disease. Based on the signals observed in this study and in similar measures during an earlier Phase 1 cohort of healthy volunteers without Huntington's disease, we plan to evaluate SAGE-718 in one or more Phase 2a open-label studies evaluating patients with certain other cognition-related disorders, which will inform potential advancement of SAGE-718 into further Phase 2 clinical development, including potentially in Huntington's disease. Our second product candidate targeting the NMDA receptor, SAGE-904, is in development as a potential oral therapy for disorders associated with NMDA hypofunction. We initiated a Phase 1 clinical trial of SAGE-904 in healthy volunteers in the third quarter of 2019.
We expect to continue our work on allosteric modulation of the GABAA and NMDA receptor systems in the brain. The GABAA and NMDA receptor systems are broadly accepted as impacting many psychiatric and neurological disorders, spanning disorders of mood, seizure, cognition, anxiety, sleep, pain, and movement, among others. We believe that we may have the opportunity to develop molecules from our internal portfolio with the goal of addressing a number of these disorders in the future. We also continue to evaluate development opportunities in potential new areas of interest as well as to explore partnering opportunities where we believe a partner may add significant value to our efforts, including through capabilities, infrastructure, speed or financial resources.
We began to generate revenue from product sales in the second quarter of 2019 in
conjunction with the launch of our first product, ZULRESSO, which commenced on
We have incurred net losses in each year since our inception, and we have an
accumulated deficit of
We expect that we will incur significant expenses in the foreseeable future in connection with our ongoing activities, as we:
• continue to advance Phase 3 clinical development of zuranolone;
• continue our commercialization efforts with respect to ZULRESSO in the
treatment of PPD with a primary focus in geographies in the U.S. that have
existing, active ZULRESSO treating sites;
• continue to advance clinical development of SAGE-324 with an initial focus
on development in essential tremor and potentially certain epileptiform
disorders and other neurological conditions;
• continue to advance clinical development of SAGE-718 with an initial focus
on development in indications involving NMDA receptor hypofunction,
including potentially Huntington's disease;
• advance one or more non-clinical stage compounds into Phase 1 clinical
development, and conduct Phase 1 clinical trials;
• continue our research and development efforts to evaluate the potential
for our existing product candidates in the treatment of additional
indications or in new formulations, and to identify new product
candidates;
30
--------------------------------------------------------------------------------
• prepare for potential new drug applications and pre-launch activities with
respect to our product candidates at the appropriate time to support next
steps if our pivotal programs are successful and support a filing;
• seek regulatory approvals for any product candidates that successfully
complete clinical development;
• refine the formulation and improve the manufacturing process for our
product candidates; and manufacture clinical supplies as development
progresses;
• at the appropriate time if our development efforts progress successfully,
add personnel, including personnel to support our product development and
ongoing and future commercialization efforts, and incur increases in
stock-based compensation expense related to existing and new personnel
with respect to both service-based and performance-based awards;
• evaluate market opportunities for our products and product candidates in
markets outside the U.S. ;
• evaluate new areas of interest and business development opportunities;
• add or optimize operational, financial and management information systems;
and
• maintain, leverage and expand our intellectual property portfolio.
Until such time that we can generate significant revenue from product sales, if ever, we expect to also finance our operations through a combination of revenue, equity or debt financings or other sources, which may include collaborations with third parties. We may not be successful in our commercialization of ZULRESSO, and may not generate meaningful revenue or revenue at the levels or on the timing necessary to support our investment and goals. We may never successfully complete development of any of our current or future product candidates, obtain necessary regulatory approval for such product candidates, or achieve commercial viability for any resulting approved product. We may not obtain or maintain adequate patent protection or other exclusivity for our products or product candidates. Adequate additional financing may not be available to us on acceptable terms, or at all. Our inability to raise capital as and when needed would have a negative impact on our financial condition and on our ability to pursue our business strategy. Arrangements with collaborators or others may require us to relinquish rights to certain of our technologies or product candidates. We will need to generate significant revenue to achieve profitability, and we may never do so.
We expect that our existing cash, cash equivalents and marketable securities as
of
Financial Operations Overview
Revenue
We began to generate revenue from product sales in the second quarter of 2019 in
conjunction with the launch of our first product, ZULRESSO, which commenced on
Our revenue from sales of ZULRESSO has been negatively impacted by significant
barriers to treatment arising from the complex requirements for a site to become
treatment ready and, more recently, by the rapid spread of COVID-19 in the
31
--------------------------------------------------------------------------------
about exposure to the virus have also caused a significant reduction in the
number of women with PPD seeking treatment with ZULRESSO and in physicians
willing to prescribe it, as evidenced by a 75% decline in monthly new patient
start form volume in
In
We expect that ZULRESSO revenues are likely to fluctuate quarter to quarter. We will not generate revenue from other products unless and until we successfully develop, obtain regulatory approval of, and commercialize one of our current or future product candidates. If we enter into additional collaboration agreements with third parties for our product candidates, we may generate revenue from those product candidates. We expect that revenue, if any, we generate under collaboration agreements will fluctuate from quarter to quarter as a result of the timing and amount of license fees, research and development services and related reimbursements, payments for clinical materials or manufacturing services, and milestone and other payments.
Cost of goods sold
Cost of goods sold includes direct and indirect costs related to the manufacturing and distribution of ZULRESSO, including third-party manufacturing costs, packaging services, freight, third-party royalties payable on our net product revenues and amortization of intangible assets associated with ZULRESSO.
Operating Expenses
Our operating expenses since inception have consisted primarily of costs associated with research and development activities and selling, general and administrative activities.
Research and Development Expenses
Research and development expenses, which consist primarily of costs associated with our product research and development efforts, are expensed as incurred. Research and development expenses consist primarily of:
• personnel costs, including salaries, benefits, stock-based compensation
and travel expenses, for employees engaged in research and development
functions;
• expenses incurred under agreements with contract research organizations,
or CROs, and sites that conduct our non-clinical studies and clinical
trials;
• expenses associated with manufacturing materials for use in clinical
trials and developing external manufacturing capabilities;
• costs of outside consultants engaged in research and development
activities, including their fees and travel expenses;
• other expenses related to our non-clinical studies and clinical trials and
expenses related to our regulatory activities; and
• payments made under our third-party license agreements.
Costs for certain development activities are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and our clinical sites.
32
--------------------------------------------------------------------------------
We have been developing our product candidates and focusing on other research and development programs, including exploratory efforts to identify new compounds, target validation for identified compounds and lead optimization for our earlier-validated programs. Our direct research and development expenses are tracked on a program-by-program basis, and consist primarily of external costs, such as fees paid to investigators, central laboratories, CROs and contract manufacturing organizations, or CMOs, in connection with our non-clinical studies and clinical trials; third-party license fees related to our product candidates; and fees paid to outside consultants who perform work on our programs. We do not allocate employee-related costs and other indirect costs to specific research and development programs because these costs are deployed across multiple product programs under research and development and, as such, are separately classified as unallocated or stock-based compensation in research and development expenses.
Research and development activities are central to our business. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect that our research and development expenses will continue to increase in the foreseeable future as we continue or initiate clinical trials and non-clinical studies for certain product candidates, and pursue later stages of clinical development of our product candidates.
We cannot determine with certainty the duration and costs of the current or future clinical trials of our product candidates. The duration, costs, and timing of clinical trials and development of our product candidates will depend on a variety of factors, including:
• the scope, size, rate of progress, and expense of our ongoing as well as
any additional clinical trials, non-clinical studies, and other research
and development activities;
• future clinical trial and non-clinical study results;
• decisions by regulatory authorities related to our product candidates;
• uncertainties in clinical trial enrollment rate or design;
• significant and changing government regulation; and
• the receipt and timing of regulatory approvals, if any.
In addition, the COVID-19 pandemic and the rapid spread of the virus in the
A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. For example, if the FDA or another regulatory authority were to require us to conduct clinical trials beyond those that we currently anticipate will be required for the completion of clinical development of a product candidate or for regulatory approval, or if we experience significant delays in enrollment in any of our clinical trials or need to enroll additional patients, we could be required to expend significant additional financial resources and time on the completion of clinical development.
Any failure to complete any stage of the development of any potential product candidates in a timely manner could have a material adverse effect on our operations, financial position and liquidity. A discussion of some of the risks and uncertainties associated with not completing our programs on schedule, or at all, and the potential consequences of failing to do so, are set forth in Part II, Item 1A of this Quarterly Report under the heading "Risk Factors."
Selling, General and Administrative Expenses
Selling, general and administrative expenses consist primarily of personnel costs, including salaries, benefits and travel expenses for our executive, finance, business, commercial, corporate development and other administrative functions; and stock-based compensation expense. Selling, general and administrative expenses also include facilities and other related expenses, including rent, depreciation, maintenance of facilities, insurance and supplies; professional fees for
33
--------------------------------------------------------------------------------
expenses incurred under agreements with third parties relating to the commercialization of ZULRESSO; and for public relations, audit, tax and legal services, including legal expenses to pursue patent protection of our intellectual property.
In
Results of Operations
Comparison of the Three Months Ended
The following table summarizes our results of operations for the three months
ended
Three Months Ended
March 31, Increase
2020 2019 (Decrease)
(in thousands)
Product revenue, net $ 2,286 $ - $ 2,286
Collaboration revenue - 465 (465 )
Total revenue 2,286 465 1,821
Operating costs and expenses:
Cost of goods sold 170 - 170
Research and development 63,610 86,398 (22,788 )
Selling, general and administrative 70,130 83,919 (13,789 )
Total operating costs and expenses 133,910 170,317 (36,407 )
Loss from operations (131,624 ) (169,852 ) 38,228
Interest income, net 4,729 6,442 (1,713 )
Other income, net 155 4 151
Net loss $ (126,740 ) $ (163,406 ) $ 36,666
Product revenue, net
We began to record net product revenues in the second quarter of 2019 following
the approval of ZULRESSO by the FDA on
Collaboration revenue
For the three months ended
34
--------------------------------------------------------------------------------
Shionogi and the accounting for revenue from collaboration agreements, refer to Note 6, Collaboration Agreement in the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report.
Effective
Cost of goods sold
Cost of goods sold of
Research and development expenses
Three Months Ended
March 31, Increase
2020 2019 (Decrease)
(in thousands)
zuranolone (SAGE-217) $ 20,142 $ 30,229 $ (10,087 )
SAGE-324 3,418 2,910 508
SAGE-718 672 5,496 (4,824 )
Other research and development programs 8,222 9,142 (920 )
Unallocated expenses 18,932 17,876 1,056
Stock-based compensation 12,224 20,745 (8,521 )
Total research and development expenses
Research and development expenses for the three months ended
• a decrease of $10.1 million in expenses related to pauses in enrollment of
certain Phase 3 clinical trials of zuranolone in MDD and the completion of
the MOUNTAIN Study, a Phase 3 clinical trial of zuranolone in MDD;
• a decrease of $4.8 million in expenses related to the timing of studies; and
• a decrease of $8.5 million in non-cash stock-based compensation expense.
There was no non-cash stock-based compensation expense recognized related
to the achievement of performance-based vesting criteria during the three
months ended March 31, 2020 . The amount of non-cash stock-based
compensation expense related to the achievement of performance-based
vesting criteria was $8.5 million for the three months ended March 31,
2019 .
35
--------------------------------------------------------------------------------
Selling, general and administrative expenses
Three Months Ended
March 31, Increase
2020 2019 (Decrease)
(in thousands)
Personnel-related $ 28,753 $ 30,172 $ (1,419 )
Stock-based compensation 18,886 23,371 (4,485 )
Professional fees 11,051 18,375 (7,324 )
Other 11,440 12,001 (561 )
Total selling, general and administrative expenses
Selling, general and administrative expenses for the three months ended
• a decrease of $4.5 million in non-cash stock-based compensation expense.
There was no non-cash stock-based compensation expense recognized related
to the achievement of performance-based vesting criteria during the three
months ended March 31, 2020 . The amount of non-cash stock-based
compensation expense related to the achievement of performance-based
vesting criteria was $5.7 million during the three months ended March 31,
2019 ; and
• of a decrease of $7.3 million in professional fees, primarily due to costs
incurred in the three months ended March 31, 2019 , related to preparations
for the commercial launch of ZULRESSO in the U.S. , which commenced on June
24, 2019 .
Interest income, net and Other expense, net
Interest income, net, and other expense, net, for the three months ended
Liquidity and Capital Resources
Prior to the second quarter of 2019, we had not generated revenue from product
sales. We began to generate revenue from product sales in the second quarter of
2019 in conjunction with the launch of our first product, ZULRESSO, which
commenced on
On
As of
36
--------------------------------------------------------------------------------
The following table summarizes the primary sources and uses of cash for the
three months ended
Three Months Ended March 31,
2020 2019
Net cash provided by (used in):
Operating activities $ (136,691 ) $ (149,934 )
Investing activities 206,270 (274,910 )
Financing activities 3,160 576,196
Total $ 72,739 $ 151,352
Operating Activities
Cash used in operating activities for the three months ended
• An increase of $36.7 million in cash used related to our net loss,
primarily due to a decrease in selling, general and administrative
expenses, mainly due to costs related to preparations for the commercial
launch of ZULRESSO in the U.S. , which commenced on June 24, 2019 ; and a
decrease in research and development activities related to pauses in
enrollment of certain Phase 3 clinical trials of zuranolone in MDD and the
completion of the MOUNTAIN Study, a Phase 3 clinical trial of zuranolone
in MDD;
• A decrease of $9.9 million in non-cash charges, primarily due to a
decrease in stock-based compensation expense due to the achievement of
performance-based vesting criteria resulting in expense of $14.2 million
in three months ended March 31, 2019 , compared to none in the three months
ended March 31, 2020 ; and
• A decrease of $13.5 million in cash used in changes in our operating
assets and liabilities, primarily due to the timing of vendor invoicing
and payments.
Investing Activities
During the three months ended
Financing Activities
During the three months ended
Operating Capital Requirements
We began to generate revenue from product sales in the second quarter of 2019 in
conjunction with the launch of our first product, ZULRESSO, which commenced on
37
--------------------------------------------------------------------------------
Based on our current operating plans, we expect that our existing cash, cash
equivalents and marketable securities as of
• Continue to advance Phase 3 clinical development of zuranolone;
• Continue our commercialization efforts with respect to ZULRESSO in the
treatment of PPD in the U.S. with a primary focus in geographies in the
U.S. that have existing, active ZULRESSO treating sites;
• Support our collaboration with Shionogi for zuranolone in Japan , Taiwan
and South Korea ;
• Advance SAGE-324 through initiation and completion of the planned Phase 2
clinical trial in essential tremor, with potential future development in
certain epileptiform disorders and other neurological conditions;
• Evaluate SAGE-718 in one or more Phase 2a open-label clinical studies in
patients with certain cognition-related disorders, and then determine
potential next steps for advancing SAGE-718 further into Phase 2 clinical
development, including potentially in Huntington's disease;
• Continue our research and development efforts to evaluate the potential
for our existing product candidates in the treatment of additional
indications or in new formulations, and to identify new product
candidates;
• Continue to explore other opportunities to establish agreements or
alliances with pharmaceutical company collaborators or distributors for
our product candidates where we believe the partnering opportunity will
add significant value to our efforts, including through capabilities,
infrastructure, speed or financial contributions, particularly in markets
outside the U.S. ;
• At the appropriate time, prepare for potential new drug applications and
pre-launch activities with respect to our product candidates at the
appropriate time to support next steps if our pivotal programs are
successful and support a filing;
• Enhance the probability of our success by developing unique assets with
differentiated features, and focus our internal development activities on
indications where we can make well-informed and rapid go/no-go decisions;
• Maintain, leverage and expand our intellectual property portfolio,
including by utilizing the strengths of our proprietary chemistry platform
and scientific know-how to expand our portfolio of new chemical
entities to lessen our long-term reliance on the success of any one
program and to facilitate long-term growth;
• Continue to improve the manufacturing process for our product candidates,
and manufacture clinical supplies as development progresses; and
• Incur non-cash stock compensation expense related to existing and new
personnel with respect to both service-based and performance-based awards.
Our current operating plan does not contemplate other development activities that we may pursue or that all of our currently planned activities will proceed at the same pace, or that all of these activities will be fully initiated or completed during that time. We have based our estimates on assumptions that could change, and we may use our available capital resources sooner than we currently expect. We may also choose to change or increase our development, commercialization or other efforts. Because of the numerous risks and uncertainties associated with the development and commercialization of any product or product candidates, we are unable to estimate the amounts of increased capital outlays and operating expenditures necessary to complete development of our current or future product candidates or to commercialize any approved product.
Our future capital requirements will depend on many factors, including:
• the amount and timing of revenues from sales of ZULRESSO which will be
impacted by a number of factors, including: the rate, degree and level of
market acceptance for ZULRESSO in the treatment of PPD in the U.S. ; the
impact of our April 2020 restructuring and the decision to focus our
efforts primarily on geographies in the U.S. that have existing, active
ZULRESSO treating sites; the continued availability of healthcare settings
in those geographies to administer ZULRESSO and to make sufficient
capacity available; the level of reimbursement for both ZULRESSO and the
infusion in the healthcare setting both by commercial and government
payors, and the nature of limitations on reimbursement; the number of
healthcare professionals
38
--------------------------------------------------------------------------------
willing to prescribe ZULRESSO and women with PPD who agree to be treated
with ZULRESSO; and the scope, duration and timing of the impact of the
COVID-19 pandemic;
• the timing and amount of costs associated with our commercialization of
ZULRESSO;
• the initiation, progress, timing, costs, and results of ongoing, planned
and future non-clinical studies and clinical trials for zuranolone and our
other existing and future product candidates; the number and length of
clinical trials required by regulatory authorities to support regulatory
approval; and the costs of preparing regulatory filings;
• the length, severity and costs of disruptions associated with the COVID-19
pandemic on initiation and conduct of our clinical trials;
• the ability of zuranolone and our other clinical-stage product candidates
to progress through clinical development successfully; the timing, scope
and outcome of regulatory filings, reviews and approvals of such product
candidates, if we are successful in our development efforts; the scope and
cost of any clinical trials or other commitments required post-approval
for any approved products resulting from such development efforts, if
successful; and the level, timing and amount of costs associated with
preparing for a potential future commercial launch of any such product
candidate that is successfully developed and approved;
• the size of the PPD market and the portion of the population for which
ZULRESSO may be prescribed; the size of the markets for which zuranolone
and our other product candidates may be approved in the future, if
successfully developed; the portion of the population in the approved
indications for which our future products are actually prescribed; the
rate and degree of market acceptance for our products, and the pricing,
availability and level of reimbursement for our products;
• the number and characteristics of the product candidates we pursue in
development and the nature and scope of our discovery and development
programs;
• the costs of preparing, filing and prosecuting patent applications,
maintaining and enforcing our intellectual property rights and defending
intellectual property-related claims;
• the extent to which we acquire or in-license other products and
technologies; and
• our ability to establish any future collaboration arrangements on
favorable terms, if at all.
Until such time, if ever, as we can generate substantial product revenue and achieve profitability, we expect to also finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements and other sources of funding. Even if we believe we have sufficient funds for our current or future operating plans, we may seek additional capital if market conditions are favorable or in light of other strategic considerations. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends and may require the issuance of warrants, which could potentially dilute the ownership interest of our stockholders. If we raise additional funds through collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams or research programs or to grant licenses on terms that may not be favorable to us. Raising funds in the current economic environment may present challenges. The COVID-19 pandemic has caused major volatility in the stock market and a significant global economic downturn. If the pandemic and related economic downturn continue for an extended period or return in waves in the future, or if our business prospects are impaired or the capital markets disrupted for other reasons, additional capital may not be available to us on acceptable terms, or at all. If we are unable to raise additional funds through equity or debt financings or other means when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market products or product candidates that we would otherwise prefer to develop and market ourselves.
39
--------------------------------------------------------------------------------
Contractual Obligations and Commitments
There have been no material changes to our contractual obligations and commitments as included in our Annual Report.
Off-Balance Sheet Arrangements
We do not currently have, nor did we have during the periods presented, any
off-balance sheet arrangements as defined by
Application of Critical Accounting Policies
We have prepared our condensed consolidated financial statements in accordance
with accounting principles generally accepted in the
There have been no material changes to our critical accounting policies from those described in "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report.
Recently Issued Accounting Pronouncements
A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is set forth in Note 2, "Summary of Significant Accounting Policies," in the accompanying Notes to Condensed Consolidated Financial Statements included in Item 1 of Part I of this Quarterly Report.
© Edgar Online, source
