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)

Microcap biotech Seelos Therapeutics is halting enrollment of its study in spinocerebellar ataxia type 3 (also known as Machado-Joseph disease) because of “financial considerations,” and in order to focus on other studies, the company said today, adding that the pause would be temporary.

The study will continue with the patients who have already enrolled, and the data from them will be used to decide whether to continue enrolling others in the future.