Sage Therapeutics announced plans to layoff 40% of workforce as it plans to launch its postpartum depression drug later this year. Image Credit: Shutterstock / Nicoleta Ionescu.

will reduce its workforce by 40% following the US Food and Drug Administration鈥檚 (FDA) rejection of its drug Zurzuvae (zuranolone) in adults with major depressive disorder (MDD).

The US-based company will pause some undisclosed early-stage programs and focus instead on the refinement of its compounds SAGE-718 and SAGE-324, . Sage鈥檚 leadership will also change with the departure of the current chief scientific officer (CSO) Al Robichaud and the chief development officer (CDO) Jim Doherty.

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The restructuring comes at a time when the company plans the commercial launch of Zurzuvae for treating postpartum depression which is expected in late 2023. On 4 August, the FDA approved Zurzuvae鈥檚 use in women with postpartum depression while simultaneously issuing a complete response letter (CRL) for the treatment鈥檚 use in MDD. The CRL stated that the drug鈥檚 application did not provide substantial evidence of effectiveness in MDD and that further studies are needed.

The drug鈥檚 approval in postpartum depression was based on the NEST program, which included the Phase III ROBIN (NCT02978326) and SKYLARK (NCT04442503) studies. Both trials met their primary endpoints. Zurzuvae is a neuroactive steroid GABA-A receptor positive allosteric modulator. The GABA system is the major signalling pathway in the brain and central nervous system and contributes to regulating brain function, based on the company鈥檚 website.

According to consensus forecasts from GlobalData鈥檚 Pharma Intelligence Centre, Zurzuvae can earn an estimated to earn $2.94bn in global sales in 2029. GlobalData is the parent company of Pharmaceutical Technology.

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Soon after the approval, the company stated that it was evaluating resource allocation options, which included pipeline prioritisation and workforce reorganisation to stretch out its cash runway, .

Sage has a global collaboration agreement with for the development of Zurzuvae, and SAGE-324, which is being  explored in indications such as essential tremors, epileptiform disorders, and Parkinson鈥檚 disease.

As part of the agreement, and Sage split responsibilities and costs for the development and commercialisation of the treatments in the US, while Biogen is responsible for the those functions  abroad, except for Zurzuvae鈥檚 development in Japan, South Korea, and Taiwan.

Sage has an existing collaboration agreement with that gave the Japanese company the right for all clinical development, regulatory filings, and commercialisation of Zurzuvae in these three countries, from 2018.