Sage Therapeutics (SAGE 0.19%) is having a tough time today. After releasing the long-awaited phase 3 trial results for its rapid-onset drug zuranolone as a treatment for major depressive disorder (MDD) this morning, the drugmaker's shares immediately hit the skids.
Sage's stock is down by a hefty 16.8% as of 11:25 a.m. ET Wednesday morning. Biotech heavyweight Biogen owns over 10% of Sage's outstanding shares, and the two biopharmaceutical companies have a joint development/commercialization agreement in place for zuranolone.
Even though zuranolone reportedly exhibited a significant clinical benefit as an add-on to standard care at the three-day mark in this late-stage trial, the drug's ability to improve depressive symptoms, compared to standard treatment, appeared to completely vanish by day 15. Sage defended the drug's clinical benefit in an early morning conference call today. Most notably, Sage said that this drug could fill a gap in the treatment paradigm for MDD by providing a rapid-relief option for patients. As things stand now, the current cadre of drugs used to treat MDD generally take several weeks to provide clinically meaningful symptom relief.
Is Sage's stock a buy on this weakness? While zuranolone may indeed be able to gain a regulatory approval from the Food and Drug Administration based on the totality of its clinical data, Sage and Biogen's blockbuster sales targets for the drug might prove hard to hit. That fact shouldn't send investors barreling for the exits. Sage, after all, has a rich pipeline of high-value drug candidates. But the company's near-term growth prospects also don't come across as stellar in light of these mixed trial results. All told, Sage's stock doesn't exactly jump off the page as a table-pounding buy right now.