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The agency said the application granted priority review, fast track. Zurzuvae is expected to launch and be commercially available in the fourth quarter of 2023.
Still, the treatment was rejected for treatment of major depressive disorder (MDD), which analysts believe has greater commercial prospects, based on lack of effectiveness.
The FDA issued a Complete Response Letter (CRL) in the treatment of MDD.
“The CRL stated that the application did not provide substantial evidence of effectiveness to support the approval of zuranolone for the treatment of MDD and that an additional study or studies will be needed. Sage and Biogen are reviewing the feedback and evaluating next steps,” the two companies said in a statement.
Sage’s CEO Barry Greene said the two companies are “highly disappointed for patients, particularly amid the current mental health crisis and millions of people with MDD struggling to find symptom relief.”
“We remain committed to our mission to deliver life-changing brain health medicines.”
As a result, RBC analysts downgraded the SAGE stock to Sector Perform from Outperform with a price target of $25 per share.
“The CRL with requirement for additional clinical work places at considerable risk the drug’s future opportunity in the much more sizable MDD indication,” the analysts said in a note.
“Shares were likely already reflecting greater MDD uncertainty following partner BIIB’s recent lukewarm commentary and 10-Q changes, but we still expect meaningful stock downside on this setback, and now see $25 fair value ($4.50 PPD + $1.50 MDD + $5 pipeline + $14 cash) and little reason to buy shares here pending further clarity.”
Similarly, Oppenheimer analysts downgraded to Perform from Outperform with a price target of $24 per share.
“We view the CRL without Ad Comm as convincing evidence that zuranolone will never be approved for MDD and set our estimated POS to zero,” the analysts said.
Sage Therapeutics also reported earnings for its second quarter today. The company posted a loss per share of $2.68 on revenue of $2.47 million, while analysts were looking for a loss per share of $2.55 on revenue of $2.92M.
