April 7, 2020 9:29pm
RIF of 340 employees, 53% of workforce
Sage closed up +$0.66 to $29.03 and is up in the aftermarket +$0.31 or +1.07%
Based on the current operating plan and assumptions, SAGE’s balance of cash assets (approximately) $1 billion at the end of 2019 will support its “runway” into 2022. SAGE expects to incur a one-time cost of approximately $31 million, associated with the reduction in workforce, primarily in Q2/2020
SAGE announced a restructuring intended to enable it to cost save anticipating an annualized savings of approximately $170 million, of which $150 million is related to SG&A.
The workforce reduction will primarily affect the ZULRESSO™ (brexanolone) CIV injection commercial operation and related SG&A support functions.
SAGE remains committed ZULRESSO, but commercial efforts will be focused on geographies that have existing, active ZULRESSO treating sites.
SAGE continues to focus on its three (3) brain health franchises – depression, neurology and neuropsychiatry – and anticipated 2020 and 2021 R&D milestones remain unchanged.
The Bottom line: it’s a tough, harsh but a strategic move in these tough times however it is just the first of many companies who will be forced to explore their alternatives … guidance will be provided in Q1/2020 quarterly earnings update in May.
Many will consider this an excuse ... although “Zulresso is a hospital-based treatment, so we are in competition for beds with COVID-19”.