Investors questioned the durability of Sage Therapeutics' depression treatment on Wednesday, and Sage stock collapsed nearly to a two-year low.
In a study, the experimental treatment called zuranolone led to improvements in symptoms of depression through 12 days. But the effect appeared to taper off after roughly two weeks. Nearly two months into treatment, zuranolone's results were in line with standard drugs.
Researchers evaluated a combination of zuranolone and standard depression drugs. The results are solid enough that Sage and partner Biogen can ask the Food and Drug Administration to approve the combination.
"However, since it did not meet the day 15 (goal), it raises a concern around the persistency of effect," Needham analyst Ami Fadia said in a note to clients.
On the stock market today, Sage stock toppled 17.5% to 35.91. Shares of Biogen fell 1.3% to 214.55.
Sage Stock: Improvement Tapers Off
Sage and Biogen compared a regimen of zuranolone and standard depression treatment vs. the latter alone. They compared symptoms on the 17-point Hamilton Depression Rating Scale.
Patients who received the combination had a statistically significant improvement in symptoms on the third day. But the results were only numerically superior by day 15. On day 42, symptom improvement between the two patient groups was equivalent.
Despite the rapid response, "investor debate will likely continue to focus on the durability of response," Wedbush analyst Laura Chico said in a note. She kept her outperform rating and 79 price target on Sage stock.
Side Effects Higher
There were more side effects in the zuranolone combination group, including sleepiness and dizziness. But the rate of nausea was higher among patients who received standard drugs.
The companies are also studying zuranolone in patients with postpartum depression. Results from the Phase 3 study are expected midyear and could add to an FDA submission for approval.
"On the key debate points — simply put, we do continue to see zuranolone as both approvable and commercially viable," Chico said.
Needham's Fadia acknowledged the difficulty of outperforming in this study, which added the experimental drug to already approved drugs. Previous studies evaluated zuranolone alone. She kept her buy rating on Sage stock.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
