Biopharmaceutical company Sage Therapeutics (NASDAQ:SAGE) is slashing 40% of its workforce as it prepares for the commercial launch of Zurzuvae, a treatment for postpartum depression (PPD), later this year.
In an effort to drive long-term business growth, Sage plans to reorganize its operations and pipeline objectives. After a strategic review, Sage will refine its pipeline toward advancing SAGE-718 and SAGE-324 while hitting a pause on certain early-stage programs. The company is also planning to align its leadership structure to scale with its pipeline and commercial goals. Its product candidates, SAGE-718 and SAGE-324, are targeted for the treatment of cognitive disorders such as Alzheimer’s Disease, Parkinson’s Disease, Huntington’s Disease, and orphan epilepsies.
Furthermore, once the reorganization is complete, Sage expects to realize $240 million in annualized net savings. The company had a cash pile of $1 billion at the end of June and stands to rake in $75 million in a milestone payment from Biogen (NASDAQ:BIIB) with the first commercial sale of Zurzuvae.
Earlier this month, the U.S. Food and Drug Administration approved Zurzuvae in PPD while rejecting the drug for the treatment of major depressive disorder (MDD).
Overall, the Street has a consensus price target of $30.67 on Sage, alongside a Hold consensus rating. After experiencing a nearly 43% price erosion over the past month, the consensus price target points to a massive 55.5% potential upside in the stock.
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