Sage Therapeutics said Wednesday its Parkinson's treatment failed in a midstage study. Sage stock collapsed to a record low.
Wedbush analyst Laura Chico says it's hard to tell whether the drug failed because of the drug, the goals of the study, the disease or a mix of all three. Sage is still testing that drug, dubbed dalzanemdor, in patients with Alzheimer's and Huntington's diseases.
"It's challenging to see a direct read through to the other (diseases) from our vantage point," she said in a client note. However, the (study called) Precedent readout is a reminder the demonstrating improvements in cognitive (goals) is not a trivial task."
On the stock market today, Sage stock plummeted 19.6%, closing at 12.57. Shares hit a record low after falling almost 28% this year, as of Tuesday's close.
Sage Therapeutics Scraps Parkinson's Effort
Sage tested dalzanemdor in patients with mild cognitive impairment due to Parkinson's disease. But the drug didn't show any difference from the placebo. All patients showed a 2-point improvement on a scale measuring cognition after six weeks.
Based on the results, Sage will stop developing dalzanemdor for Parkinson's disease patients. Instead, the company is now focusing on Alzheimer's and Huntington's disease. Sage Therapeutics Chief Executive Barry Greene noted there are differences in the cognitive impairment tied to these diseases.
"Although cognitive impairment is common in neurodegenerative disorders, the underlying pathophysiology and symptomatology in Parkinson's disease is distinctive," he said in a statement. "These results do not necessarily predict results with dalzanemdor in other neurodegenerative conditions."
Sage Stock Remains Depressed
Wedbush's Chico kept her neutral rating on Sage stock. Sage has been under pressure after the Food and Drug Administration approved its postpartum depression treatment, Zurzuvae, but declined to approve the drug for the bigger population of patients with major depressive disorder.
"While Sage shares have pulled back, we do think positive pipeline readouts will be necessary to get shares working in the right direction, and we remain on the sidelines ahead of the forthcoming first-quarter commercial update," she said.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
