Sage Therapeutics Ends Collaboration on SAGE-324
Sage Therapeutics, Inc. (NASDAQ: SAGE) recently announced a significant change in its strategy as its partner, Biogen (NASDAQ: BIIB), has chosen to terminate its rights to the investigational neurology candidate, SAGE-324. This decision comes after a phase II study aimed at treating essential tremor, which did not achieve its primary endpoint in a review conducted earlier this year.
This collaboration termination will become effective on a date specified by the company. Following this change, Sage Therapeutics is set to regain full ownership and rights related to SAGE-324, with plans to investigate other potential uses for the candidate in the future.
This year has not been particularly kind to Sage Therapeutics, as its shares have seen a substantial downturn, plummeting 66.9% to date, contrasting sharply with the overall industry decline of merely 1.9%.
Details of the Licensing Agreement with Biogen
The partnership between Sage Therapeutics and Biogen, established to lead the clinical development of SAGE-324, bore mixed results. In July, both companies revealed the top-line data from the phase II KINETIC 2 study, which was designed to assess the drug's effectiveness as a treatment for essential tremor. Unfortunately, the data failed to show a statistically significant dose-response relationship regarding the study’s primary objective.
Disappointed by these results, both Sage Therapeutics and Biogen agreed to halt any further clinical development of SAGE-324 for this specific indication. The focus has now shifted towards SAGE's other ongoing projects.
Current Developments in Sage Therapeutics' Portfolio
While SAGE-324's journey takes a pause, Sage Therapeutics is actively marketing Zurzuvae (zuranolone), an innovative treatment developed in conjunction with Biogen. This medication has gained traction as the first oral treatment approved for postpartum depression in adults, receiving its FDA approval in a recent review.
Launched commercially in a prior month, Zurzuvae holds significant promise in addressing a critical area of mental health treatment. The two companies share the financial responsibilities arising from Zurzuvae's commercialization in the United States, while Biogen handles sales in several international markets, paying royalties back to Sage for this innovative therapy.
Both firms are working diligently to position Zurzuvae as a primary treatment option for women experiencing postpartum depression. However, the FDA recently issued a complete response letter concerning a new drug application for zuranolone aimed at major depressive disorder, stating that the existing data did not substantiate effective treatment claims, prompting additional clinical studies.
Stock Performance and Future Prospects
At present, Sage Therapeutics holds a Zacks Rank of #3, indicating a Hold recommendation. Investors are keen on how the company will adapt and pivot following this termination.
In the biotech sector, some stocks show strong momentum and rank at #1 (Strong Buy). Noteworthy mentions include Krystal Biotech, Inc. (NASDAQ: KRYS) and Fulcrum Therapeutics, Inc. (NASDAQ: FULC).
Over the preceding two months, estimates for Krystal Biotech's earnings per share for 2024 have surged, with projections increasing from $2.09 to $2.38. Additionally, their 2025 earnings forecasts have escalated significantly. Year-to-date, shares of Krystal Biotech have experienced a robust 43.8% growth.
For Fulcrum Therapeutics, the outlook for 2024 has improved with losses per share estimates narrowing recently, which bodes well for the company's financial resilience. Despite an overall plunge of 40.8% in the year to date, Fulcrum has managed to beat estimates across recent quarters.
Looking Ahead for Sage Therapeutics
The shift in strategy following the termination of the collaboration with Biogen signifies an important turning point for Sage Therapeutics. With renewed focus on SAGE-324 and the successful commercialization of Zurzuvae, the company is poised to explore various pathways as it navigates through future developments in mental health treatments.
Frequently Asked Questions
What led to the termination of the partnership between Sage and Biogen?
The partnership was terminated after the phase II study of SAGE-324 for treating essential tremor failed to meet its primary endpoint.
What is Sage Therapeutics' main current product on the market?
Sage's leading product in the market is Zurzuvae (zuranolone), an oral treatment approved for postpartum depression.
How has Sage Therapeutics' stock performed this year?
The stock has seen a significant decline of 66.9% this year, contrasting with the industry average decrease of 1.9%.
What are Sage's plans for SAGE-324 moving forward?
Sage intends to explore other indications for SAGE-324 after regaining full ownership of the therapy.
What is the current outlook for Zurzuvae?
Zurzuvae is being positioned as a first-line therapy for postpartum depression, with Sage and Biogen aiming to establish it as a standard treatment.
