Was the Market too critical of the SAGE-217 data?

The SAGE bears won this week. The stock is down over 30% on “positive” results of zuranalone (SAGE-217) in major depressive disorder (MDD) (See data release press release and presentation). Was the market too hard on SAGE? Here are some of the things SAGE bulls and bears are thinking about SAGE and specifically SAGE-217.

BULLS

• SAGE-217 is a paradigm-shifting drug with respect to depression because of its rapid onset, with a statistically significant effect in as short as 3 days.

• Regarding any issues with the length of response, as demonstrated in a study, SAGE-217 can be effectively readministered multiple times.

• As far as side effects, the fact that a higher percentage of patients on the SAGE-217 arm (90.3%) vs. the placebo arm (87.4%) completed the study, is a practical testament for the excellent tolerability of the drug candidate.

BEARS

• With less than a 2 point improvement difference vs. placebo on the 56 point HAM-D scale (See here) of 14.1 vs 12.3, the “improvement” seen with SAGE-217 administration is not impactful enough to be meaningful to doctors and patients.

• The small improvement observed with SAGE-217 over placebo is not sustained for a long enough period of time to be meaningful (Statistical significance only until day 15).

• Biogen will be a poor partner for SAGE for SAGE-217 because Biogen does not have a large presence in psychiatry. Its commercial focuses on other specialties such as neurology.

Major depressive disorder (MDD) is a debilitating, chronic, biologically-based disorder characterized by low mood, inability to feel pleasure, feelings of guilt and worthlessness, low energy, and other emotional and physical symptoms, and which impairs social, occupational, educational, or other important functioning. In severe cases, MDD can result in suicide. According to the Department of Health and Human Services, an estimated 7.8% of U.S. adults, or approximately 19.4 million, experience MDD each year1. Nearly two-thirds of diagnosed and treated patients do not experience adequate treatment response with currently available first-line therapy, highlighting the need for additional therapies with new mechanisms of action. The majority of initial failures also fail second-line treatment.

Based on this high unmet healthcare need, there are a number of small and mid-cap biotech companies that are on the hunt to develop better MDD therapies. In fact, one of these has an FDA PDUFA deadline date scheduled for August of this year. For a detailed table of these companies, their MDD drug candidates, their current trial phase, next readout event, and their stock movement for 2021 and for this week vs. SAGE, see our forum post (HERE) (requires BPIQ.com subscription - see HERE for a free 30-day trial (no credit card) and lock in introductory price under $20/month while it lasts).