{"id":45453,"date":"2023-08-07T11:31:46","date_gmt":"2023-08-07T15:31:46","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/sage-stock-sinks-after-fda-decision-on-depression-drug\/"},"modified":"2023-08-07T11:31:48","modified_gmt":"2023-08-07T15:31:48","slug":"sage-stock-sinks-after-fda-decision-on-depression-drug","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=45453","title":{"rendered":"Sage Stock Sinks After FDA Decision on Depression Drug"},"content":{"rendered":"
\n
<\/p>\n
<\/p>\n<\/figure><\/div>\n

A split Food and Drug Administration decision on a new depression medicine from
\n Sage Therapeutics
\n and
\n Biogen
\n blew holes in the strategies of both companies and raised questions about the future of their collaboration.<\/p>\n

Late on Friday, the FDA approved a two-week course of the pill Zurzuvae as a treatment for postpartum depression, but not for major depressive disorder. Zurzuvae is the first oral treatment, and the second medicine, ever approved specifically for postpartum depression. The major depressive disorder indication, however, is far larger, and investors had expected roughly two-thirds of the drug\u2019s sales to come from those prescriptions.<\/p>\n

\n

The rejection of the major depressive disorder indication appears to be a major setback for
\n Sage
\n (ticker: SAGE), and shares of the biotech were down 50% on Monday morning. The news is bad for
\n Biogen
\n (BIIB) as well, though it seems to have been largely anticipated by investors.<\/p>\n

Investors had gotten a sense that something might be amiss with the application in late July, when Biogen\u2019s CEO barely mentioned Zurzuvae on a quarterly call to discuss earnings. Expectations regarding the drug worsened swiftly, and by Friday a negative outcome of the FDA review had largely been priced into the stock. Biogen shares were down just 0.4% as the market opened on Monday.<\/p>\n

For Sage (SAGE), the implications of the approval are far more dramatic. Zurzuvae is only Sage\u2019s second approved medicine. Without the major depressive disorder indication, Sage\u2019s financial picture is sharply different.<\/p>\n

On a Sage investor call Monday morning, in which Biogen didn\u2019t participate, executives said they were making plans for cost cuts, though they offered no details. The company\u2019s CFO, Kimi Iguchi, said that Sage had $1 billion in cash as of June 3, and said that it company believes it has enough cash and potential revenues to fund its operations into 2025.<\/p>\n

\u201cWith that said\u2026 we are refining our strategy,\u201d Iguchi said. \u201cWe plan to take action with the goal extending our cash runway, and are currently evaluating resource allocation, including pipeline prioritization, and a workforce reorganization. As a result, we also anticipate operating expenses to decrease in 2024.\u201d<\/p>\n

Sage executives criticized the FDA\u2019s rejection in the major depressive disorder indication. \u201cWe do not agree with the FDA\u2019s view on Zurzuvae for MDD,\u201d said CEO Barry Greene on the investor call. \u201cWe learned late in the review cycle about FDA\u2019s view on approvability for MDD.\u201d<\/p>\n

Greene said the company is \u201cevaluating next steps.\u201d Sage executives wouldn\u2019t disclose Zurzuvae\u2019s price. The medicine can\u2019t go on sale until after a review by the Drug Enforcement Administration, which could take three months.<\/p>\n

Zurzuvae works differently than other approved anti-depressants, and is only taken over a two-week period. The FDA label warns patients not to drive for 12 hours after taking Zurzuvae, a warning that analysts hadn\u2019t anticipated.<\/p>\n

Analysts significantly pulled back on expectations around Zurzuvae\u2019s peak sales in response to the news. In a note on Sunday, Leerink Partners analyst Marc Goodman wrote that while he had previously expected Zurzuvae sales in the posptartum depression indication of between $250 million and $400 million per year at peak, he now expects sales \u201cin the lower part of that range,\u201d due to the warning on driving after taking the medicine.<\/p>\n

Sales in the major depressive disorder indication had been projected to be far higher. In a note in May, Citi Research analyst Neena Bitritto-Garg had modeled $1.7 billion in peak year sales in that indication. Those hopes are now effectively dashed.<\/p>\n

In notes on Sunday and Monday, analysts wondered if the medicine still made sense for Biogen. \u201cWe question Biogen\u2019s interest level in Zurzuvae with only a PPD indication,\u201d Mizuho analyst Uy Ear wrote in a Sunday note.<\/p>\n

Earlier this year, Biogen CEO Chris Viehbacher had highlighted Zurzuvae, along with his company\u2019s Alzheimer\u2019s drug Leqembi, as the keys to Biogen\u2019s plan to return to growth. He seemed to be moving away from that line on his investor call in late July, and days later announced a $7.3 billion acquisition that appeared to reflect a shift in strategy.<\/p>\n

Biogen didn\u2019t immediately respond to a request for comment on its commitment to the Sage partnership.<\/p>\n

\u201cWe believe the near-term launch is likely to be challenging and given the profit split arrangement with\u2026Biogen, we are unsure when or if the partnership is ever to turn a profit given the label and likely heavy marketing needs,\u201d William Blair analyst Tim Lugo wrote in a Monday note.<\/p>\n

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com and Emily Dattilo at emily.dattilo@dowjones.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

A split Food and Drug Administration decision on a new depression medicine from Sage Therapeutics and Biogen blew holes in the strategies of both companies and raised questions about the future of their collaboration. Late on Friday, the FDA approved a two-week course of the pill Zurzuvae as a treatment for postpartum depression, but not […]<\/p>\n","protected":false},"author":1,"featured_media":45454,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-45453","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nSage Stock Sinks After FDA Decision on Depression Drug | iFintechWorld<\/title>\n<meta name=\"description\" content=\"A split Food and Drug Administration decision on a new depression medicine from Sage Therapeutics and Biogen blew holes in the strategies of both\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=45453\" \/>\n<meta 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