CAMBRIDGE, Mass. - Sage Therapeutics, Inc. (NASDAQ: SAGE) announced today that Biogen has opted out of their collaboration on the SAGE-324 program, following unfavorable outcomes in a recent study. The companies will maintain their alliance on ZURZUVAE®, a treatment for postpartum depression (PPD (NASDAQ:PPD)) in women.
The termination of the agreement regarding SAGE-324, which is set to take effect on February 17, 2025, will result in Sage reclaiming full ownership of the asset. Sage intends to explore alternative potential uses for SAGE-324, although its efficacy and safety remain unverified.
ZURZUVAE (zuranolone) is noted as the sole FDA-approved oral medication for PPD. However, the treatment may lead to serious side effects such as sleepiness, dizziness, and decreased alertness, which can affect the ability to perform certain activities safely. It is classified as a controlled substance due to its potential for abuse or dependence.
Sage Therapeutics, established in 2010 and headquartered in Cambridge, Massachusetts, focuses on developing medications for brain health. Despite the setback with SAGE-324, the company continues to offer FDA-approved treatments for PPD and is working on a robust pipeline targeting unmet needs in the domain of brain health.
The discontinuation of SAGE-324's development for essential tremor (ET) and the shift in focus to other potential indications reflect the uncertainties inherent in clinical research. Sage's commitment to addressing PPD with ZURZUVAE remains unaltered, as the company upholds its mission to deliver life-changing treatments. The information in this article is based on a press release statement.
In other recent news, Sage Therapeutics has seen several financial firms adjust their outlook. Truist Securities trimmed its stock target from $18 to $13, maintaining a Hold rating. This comes after evaluations of the company's drug developments, particularly Zurzurvae, a drug addressing postpartum depression, launched in collaboration with Biogen Inc (NASDAQ:BIIB). Despite this success, Truist expressed caution regarding Sage's pipeline updates concerning Alzheimer's and Huntington's disease.
Piper Sandler also revised its outlook, cutting the price target from $70 to $52, but maintaining an Overweight rating. This followed Sage's announcement of $7.4 million in collaboration revenue for Q2 2024, attributed to Zurzurvae. Mizuho Securities and Stifel also adjusted their outlooks, reducing their price targets to $12 and $15 respectively, while maintaining their previous ratings.
Sage reported a Q2 net loss of $102.9 million but has $647 million in cash, projecting funding to last until 2026. The company plans to expand its sales force in Q4 2024 to boost Zurzuvae sales in 2025. These are recent developments that investors should be aware of.
InvestingPro Insights
As Sage Therapeutics (NASDAQ: SAGE) navigates the challenges following Biogen's departure from the SAGE-324 program, the financial health of the company comes into focus. An InvestingPro Tip reveals that Sage holds more cash than debt on its balance sheet, which may provide some financial flexibility as they reassess the future of SAGE-324 and continue supporting their FDA-approved treatment for postpartum depression, ZURZUVAE®.
However, the company's financial data indicates a high burn rate, with an InvestingPro Tip highlighting that Sage is quickly burning through cash. This could raise concerns about the long-term sustainability of their operations without additional successful products or partnerships. Sage's market capitalization stands at approximately $431.63 million, reflecting the size and value of the company in the current market.
InvestingPro Data also shows a substantial year-over-year revenue growth of 837.55% as of Q2 2024, which suggests that despite the recent setbacks, there has been significant growth in revenue. Nevertheless, it's important to note that analysts have revised their earnings downwards for the upcoming period, and they do not anticipate the company will be profitable this year, as per additional InvestingPro Tips. In total, there are 14 additional tips listed in InvestingPro for Sage Therapeutics, offering deeper insights for potential investors.
For investors monitoring Sage's stock performance, the company has experienced a significant price drop over various time frames, with a 6-month total return of -62.3% as of the latest data. This could be a point of consideration for those evaluating the company's stock resilience and long-term prospects. The stock is also trading near its 52-week low, which might be seen as a potential entry point for investors or as a sign of caution, depending on their investment strategy.
As Sage Therapeutics continues to adapt to the evolving landscape of brain health treatments, these financial insights and metrics can help investors make informed decisions. For more detailed analysis and additional tips, interested parties can visit InvestingPro.
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