Sage plots comeback plan for its experimental oral antidepressant
Trials testing depression drugs invariably tend to disappoint. Perhaps the most keenly-anticipated depression trial of 2019, despite great analyst and investor optimism, also failed in patients with major depressive disorder (MDD), evaporating billions from its drugmaker Sage Therapeutics’ market value in early December.
The company — which last spring secured the landmark approval of its injectable postpartum depression drug Zulresso — now has an FDA-endorsed path forward for its experimental oral antidepressant.
The plan is to pursue two new indications for the drug, zuranolone (or SAGE-217), on the basis of two-week trials: postpartum depression and the acute treatment of MDD, in combination with an existing antidepressant. These indications are expected to supplement the original plan to get the drug approved for the treatment of MDD as an episodic therapy.
“Overall we believe SAGE’s updated ‘217 plan makes sense: it offers two more independent shots on goal in MDD and one additional study in PPD, without the need to imminently raise cash at a distressed valuation,” Stifel’s Paul Matteis wrote on Wednesday.
In December, Sage reported that SAGE-217 had failed to induce a statistically significant improvement over placebo in the 581-patient late-stage MOUNTAIN study in patients with MDD. In the trial, patients were either given a 20 mg or 30 mg dose of the drug, or placebo, once-nightly for two-weeks.
The hope was the drug would help MDD patients quicker and more effectively than the existing crop of antidepressants, which can take weeks to kick in. Although the 20 mg dose was not active, the performance of 30 mg dose was “directionally” positive, Sage chief Jeff Jonas had asserted in an interview with Endpoints News.
This data is “like winning the silver medal,” Jonas said. “This is not a giant step for mankind we thought we would take, but it is a step in the right direction.”
In response to the MOUNTAIN failure, Stifel’s Matteis had stressed that all hope was not lost for the drug.
“The failure is a surprise in one sense, but in another sense, not at all unprecedented: even Prozac failed in a number of efficacy studies,” he wrote in a note. “It’s for the latter reason that we’re reluctant here to throw in the towel on the SAGE bull case that ‘217 still has the potential to become a blockbuster drug.”
Jonas, meanwhile, hinted that given the 30 mg dose was well tolerated, Sage could potentially enhance the size of the dose in the other trials encompassing the larger SAGE-217 program.
The new path forward for the drug does exactly that — the three additional trials will evaluate 50 mg dose of SAGE-217, and are all expected to readout in 2021.
“Given the state of the world, there’s potentially some risk to 2021 timelines (as is the case for all biotech trials), however, we note that the MOUNTAIN study only took 8 months to complete,” Matteis said.
The so-called Rapid Response Trial assessing co-initiation of SAGE-217 with a Selective Serotonin Reuptake Inhibitor in MDD is essentially a first-of-its-kind trial reflecting the FDA’s recent distinction between rapid-acting and slower-acting maintenance antidepressants. “We like this trial since it aligns with how we think many psychiatrists would like to use the drug in the real world,” he added.
Sage, which ended 2019 with $1 billion in its coffers, has concerned investors with its spending — last year’s operating expenses hit $719 million — as Zulresso’s launch has been slower than anticipated. Spending could be cut for Zulresso given the difficulties of that launch, Matteis said.
The Cambridge, Massachusetts-based company’s shares $SAGE have lost more than 80% of their value since Zulresso’s March 2019 approval, closing at $28.80 on Tuesday. The stock was down more than 9% at $26.11 on Wednesday morning.
“Bottom line, the stock looks cheap ($1.5B cap) and we think it just takes some patience, given our view that it isn’t a question of “if”, but “when” ‘217 becomes approved for PPD/MDD,” Jefferies Andrew Tsai said.
Social image: Jeff Jonas (NBCU Photo Bank via Getty Images)