On Friday, Mizuho Securities adjusted its outlook on Sage Therapeutics (NASDAQ:SAGE), a pharmaceutical company specializing in central nervous system disorders.
The firm's analyst maintained a Neutral stance on the stock but reduced the price target to $16.00 from the previous $18.00. The adjustment follows an analysis of the second-quarter sales performance for Zurzuvae, Sage's treatment for post-partum depression, in partnership with Biogen (NASDAQ:BIIB).
According to the firm's analyst, the revised sales forecast for Zurzuvae in the second quarter of 2024 has been increased from $15 million to $18 million, with Sage's share being half of the total sales.
This new estimate surpasses the consensus of $14 million in total sales, or $7.1 million for Sage, which was provided by the company itself. The revision was prompted by strong quarter-over-quarter prescription data from IQVIA.
Despite the positive sales trajectory for Zurzuvae, Mizuho Securities remains cautious about projecting long-term sales beyond $300 million by the year 2030.
This figure is significantly lower than the consensus forecast of $500 million. The firm's conservative stance is due to the need for more clarity on the adoption rate of the treatment.
The reduction in the price target for Sage Therapeutics is primarily attributed to modified assumptions regarding the launch year for another of Sage's products, dalzanemdor.
While the specifics of these assumptions were not detailed, they have led to a more subdued valuation of the company's stock by Mizuho Securities.
The report indicates that while the initial uptake of Zurzuvae is encouraging, the market's long-term expectations for the drug's performance are still to be determined. Sage Therapeutics and its investors will be watching closely as more data becomes available in the coming months and years.
In other recent news, Sage Therapeutics has been in the spotlight due to various developments. The biopharmaceutical company is on the verge of releasing results from its Phase 2b Essential Tremor study with SAGE-324 and preparing for results from two additional studies on dalzanemdor for Alzheimer's Disease and Huntington's Disease.
Despite a recent setback in a Parkinson's Disease trial, H.C. Wainwright maintains a neutral rating on Sage Therapeutics with a price target of $25.00.
Other firms such as Scotiabank and TD Cowen have maintained their respective ratings with a price target of $19.00 and $16.00, while BofA Securities and Citi reaffirmed underperform and sell ratings with price targets of $14.00 and $8.00 respectively. Baird initiated coverage with a neutral rating and a $15.00 price target.
InvestingPro Insights
As Sage Therapeutics navigates the competitive landscape of central nervous system disorder treatments, recent data from InvestingPro provides a snapshot of the company’s financial health and market performance. With a market capitalization of $732.42 million, Sage holds more cash than debt on its balance sheet, which is a positive sign for investors concerned about the company's financial stability. However, it is important to note that analysts are anticipating a sales decline in the current year and do not expect the company to be profitable within this timeframe. This aligns with Mizuho Securities' cautious outlook on the company's long-term sales potential.
On the brighter side, Sage's recent price performance shows a strong return over the last month, with a 13.21% increase, potentially indicating investor optimism in the short term. Nonetheless, the stock has experienced significant declines over the last six months and year, with a 53.21% and 73.31% drop respectively, reflecting broader market sentiment and the challenges faced by the company.
InvestingPro Tips highlight that Sage is quickly burning through cash and suffers from weak gross profit margins, which could be areas of concern for investors evaluating the company's operational efficiency and long-term growth prospects. For those looking for deeper insights and additional tips, InvestingPro offers 11 more tips for Sage Therapeutics, which can be accessed through the platform. Interested readers can use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, providing valuable perspectives for making informed investment decisions.
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