The Company leases office space and certain equipment. All of the leases recorded on the consolidated balance sheets are operating leases. The Company’s leases have remaining lease terms ranging from less than one year to approximately five years. Some of the leases include options to extend the leases for up to five years. These options were not included for the purpose of determining the right-of-use assets and associated lease liabilities as the Company determined that the renewal of these leases is not reasonably certain so only the original lease term was taken into consideration. The leases do not include any restrictions or covenants that had to be accounted for under the lease guidance.

During the fiscal years ended December 31, 2024, 2023, and 2022, the Company leased office space in three multi-tenant buildings in Cambridge, Massachusetts, consisting of 63,017 square feet in the first building, under an operating lease that expired on August 31, 2024; 40,419 square feet in the second building, under an operating lease that expired on August 31, 2024; and 30,567 square feet in the third building, under an operating lease that commenced in August 2024 that will expire on February 28, 2030; and in a multi-tenant building in Raleigh, North Carolina, consisting of 15,525 square feet under an operating lease that expired on November 30, 2024.

In January 2024, the Company entered into the lease agreement (the “New Lease”) for office space in a multi-tenant building in Cambridge, Massachusetts (the “New Premises”). The accounting lease commencement in accordance with ASC 842, Leases, occurred on August 2, 2024, and the Company recorded a total associated right-of-use asset of $11.6 million and the corresponding lease liability of $10.0 million. This includes a reclassification of $1.5 million from prepaid expenses and other current assets to right-of-use asset related to build out costs which were determined to be owned by the lessor. The contractual term of the New Lease commenced on September 1, 2024 (the “Term Commencement Date”), which is the date the Company relocated its headquarters to the New Premises. The Company’s

obligation for the payment of rent for the New Premises begins six months after the Term Commencement Date (the “Rent Commencement Date”). The New Lease has an initial term of approximately sixty-six months, measured from the Term Commencement Date (the “New Lease Term”). The Company has the option to extend the New Lease one time for an additional five-year period, subject to the terms therein; however, the exercise of the option to extend the lease term was not determined to be reasonably certain, and the Company will therefore recognize lease expense through the expiration of the New Lease Term in February 2030.

In connection with its entry into the New Lease, and as a security deposit, the Company has provided the Landlord a letter of credit in the amount of approximately $1.4 million, classified within long-term restricted cash on the consolidated balance sheets, which the Company and the Landlord have agreed may be reduced to approximately $1.2 million following the third anniversary of the Rent Commencement Date, provided that no event of default by the Company has occurred. The Landlord has the right to terminate the New Lease upon customary events of default.

During the year ended December 31, 2021, the Company entered into a sublease for a portion of the leased office space in the second multi-tenant building in Cambridge, Massachusetts, which was terminated effective April 5, 2024.

The following table shows the amounts of operating leases in the balance sheets as of December 31, 2024 and 2023:


		December 31,
Balance sheet location	Balance sheet caption	2024		2023
		(in thousands)
Assets
Right-of-use operating asset	Right-of-use operating asset	$	10,753	$	4,458

Liabilities
Current operating lease liabilities	Operating lease liability, current portion		1,318		5,165
Long-term operating lease liabilities	Operating lease liability, net of current portion		10,518		—
		$	11,836	$	5,165

The following table shows the amounts of lease expense by lease type that was recognized during the years ended December 31, 2024, 2023, and 2022:


	Year Ended December 31,
	2024		2023			2022
	(in thousands)
Operating lease cost	$	5,972	$	6,748		$	6,748
Variable lease cost		1,454		1,957			1,846
Short-term lease cost		20		20			206
Sublease income		—		(434	)		(421	)
	$	7,446	$	8,291		$	8,379

The Company made an accounting policy election not to apply the recognition requirements to short-term leases. The Company recognizes the lease payments for short-term leases as expense on a straight-line basis over the lease term, and variable lease payments in the period in which the obligation for those payments is incurred.

The minimum lease payments are expected to be as follows:


Years Ending December 31,	(In thousands)
2025	$	2,461
2026		2,976
2027		3,059
2028		3,144
2029		3,232
Thereafter		542
Total lease payments		15,414
Less imputed interest		(3,578	)
Present value of operating lease liabilities	$	11,836

The following table shows the weighted average remaining lease term and weighted average discount rate of the operating leases:


	Year ended December 31,
	2024	2023
Weighted average remaining lease term in years	5.17	0.69
Weighted average discount rate	10.0%	7.5%

The interest rate implicit in lease contracts is typically not readily determinable and as such, the Company uses its incremental borrowing rate based on the information available at the lease commencement date, which represents an internally developed rate that would be incurred to borrow, on a collateralized basis, over a similar term, an amount equal to the lease payments in a similar economic environment.

The following table shows the supplemental disclosure of cash flow information related to the operating leases included in cash flows used by operating activities in the consolidated statements of cash flows:


	Year Ended December 31,
	2024		2023		2022
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities	$	3,958	$	7,643	$	7,468

Right-of-use assets obtained in exchange for operating lease obligations:	$	11,597	$	—	$	—

On August 28, 2024, named plaintiff Darren Korver filed a purported federal securities class action lawsuit in the Southern District of New York against the Company and individuals, Barry E. Greene and Kimi Iguchi (the “Securities Class Action”). The complaint in the Securities Class Action alleges violations of U.S. securities laws under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder and seeks an as-yet unspecified amount of damages allegedly sustained by parties who purchased Sage stock between April 12, 2021 and July 23, 2024, as well as applicable attorneys’ fees and costs. The Company denies any allegations of wrongdoing and intends to vigorously defend against the Securities Class Action.

On October 16, 2024, the Company received a subpoena from the Enforcement Division of the SEC requesting documents and information related to the Company’s NDA for zuranolone for the treatment of MDD, including communications with the FDA and any communications containing material nonpublic information. The Company is cooperating with the SEC and intends to continue to provide information responsive to the SEC’s requests.

At this time, the Company is unable to predict the outcome of the Securities Class Action or the SEC investigation or reasonably estimate a range of possible losses.

On January 16, 2025, the Company commenced litigation against Biogen in the Delaware Court of Chancery seeking declaratory, injunctive and other relief. In its complaint, the Company alleges that Biogen breached the standstill provision in the stock purchase agreement it entered into with Biogen on November 27, 2020 (the “Biogen Stock Purchase Agreement”), by making an unsolicited acquisition proposal and related public disclosures. On this basis, the Company also sought a temporary restraining order enjoining Biogen from future breaches of the standstill provision. At a hearing held on January 28, 2025, the Court granted the Company’s motion for a temporary restraining order against Biogen MA Inc., and entered an implementing order on January 30, 2025 (the “TRO Order”). Pursuant to the TRO Order, unless consented to by the Company in writing or otherwise ordered by the court, Biogen MA Inc. and its directors, officers, agents, employees, attorneys, representatives, persons in active concert or participation with it, and anyone acting under its direction or control are enjoined from taking any action inconsistent with the Biogen Stock Purchase Agreement’s contractual prohibitions against (i) making a public acquisition proposal, (ii) making a private acquisition proposal that is reasonably expected to require public disclosure, or (iii) publicly encouraging any acquisition proposal. Various motions and related items (whether procedural, discovery-related and/or substantive in nature) occur from time to time with respect to this matter. The Company intends to continue to vigorously pursue its claims against Biogen, but the Company is unable to predict the outcome of the litigation at this time.