Please ensure Javascript is enabled for purposes of website accessibility

Here's Why Sage Therapeutics Gained 48.9% in January

By Maxx Chatsko – Updated Apr 19, 2019 at 10:54AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The pharma company reported positive results from an important phase 3 trial.

What happened

After sliding 41.8% in 2018, shares of Sage Therapeutics (SAGE 0.34%) jumped nearly 49% last month, according to data from S&P Global Market Intelligence. The sudden leap came after the company reported impressive results for SAGE-217 in a phase 3 trial studying the drug candidate as a potential treatment for postpartum depression.

Forty-five percent of patients taking SAGE-217 achieved remission after two weeks, compared with just 23% for those taking a placebo. The results held up at the four-week follow-up. The data for SAGE-217 should allow the drug candidate to receive marketing approval in the United States, especially considering it had previously received breakthrough therapy designation from the U.S. Food and Drug Administration. 

Two drawings of brains represented by colorful blocks, with one jumbled and the other orderly.

Image source: Getty Images.

So what

Wall Street is excited over the potential for SAGE-217, which is essentially the company's next-generation version of brexanolone. An intravenous formulation of brexanolone cleared two phase 3 trials for postpartum depression in 2017 and could win FDA approval soon. That was expected to occur in November, but an unexpected three-month delay pushed the date for a regulatory decision to March 19. 

That's creating somewhat of an awkward situation for Sage Therapeutics, which could receive regulatory approval for both intravenous brexanolone and its assumed replacement, oral SAGE-217, in the same calendar year. Investors certainly don't mind. More important, SAGE-217 is likely to be the company's future, as it's also being evaluated as a treatment for major depressive disorder, insomnia, and bipolar depression. 

Now what

The focus of Sage Therapeutics shareholders will shift from clinical development to commercialization in 2019. The company will need to earn marketing approval, ramp up marketing activity, and hit the ground running to deliver its novel depression treatment(s) into the hands of the most individuals. Wall Street will be closely watching the pace of progress as it eyes blockbuster potential for SAGE-217.

Check out the latest earnings call transcripts for companies we cover.  

Maxx Chatsko has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Sage Therapeutics Stock Quote
Sage Therapeutics
$37.92 (0.34%) $0.13

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.