It wasn't a wise move for investors to hold or buy Sage Therapeutics (SAGE 0.81%) shares on Tuesday. Its price tumbled by nearly 5% as the market digested the healthcare company's third-quarter results. This was on a day when stocks were generally performing well -- the S&P 500 index landed in positive territory, with a 0.3% rise.
Sage's third-quarter double miss
For the quarter, Sage posted revenue that landed just shy of $2.72 million. That was notably higher than the almost $1.74 million in the third quarter of 2022; however, it didn't come close to hitting the consensus analyst estimate of $4.63 million.
Another miss occurred on the bottom line, with the biotech company's headline net loss deepening to nearly $202 million ($3.37 per share), from the year-ago shortfall of $137 million. Prognosticators had been projecting a per-share net loss of $2.68.
Sage draws revenue from postpartum depression treatment Zulresso, up until recently its only drug approved by the U.S. Food and Drug Administration (FDA). In August, it won approval for another depression medication, zuranolone, but only for (again) postpartum depression; the nod did not include treatment for major depressive disorder.
A new stock issue
Compounding Sage's double miss and the widening net loss, the company revealed in a regulatory document that it's launching a share sale. It has entered into an agreement with financial services company Cowen to sell up to $250 million worth of its common stock in an at-the-market (ATM) offering.
Sage said that it aims to use the proceeds from the sale to invest "in a variety of capital preservation investments," which includes interest-bearing instruments such as bonds.
The company currently has a market cap of just under $1.18 billion.
