After building intense interest in its lead drug for super-refractory status epilepticus with data from tiny studies, Sage Therapeutics $SAGE says the drug failed badly in Phase III.
Comparing brexanolone (SAGE-547) with a placebo, the drug acted just like a sugar pill, with a 43.9% response for the drug compared to 42.4% in the placebo arm — and a miserable p-value of 0.8775.
Sage’s shares dropped more than 20% on the news. But by the afternoon the biotech had trimmed its losses, with the stock down about 14% — a modest retreat given the bad judgment this biotech has shown.
Sage created both fierce believers as well as even fiercer critics of its drug for rare cases of protracted seizures as CEO Jeff Jonas confidently predicted success. More than a year ago Sahm Adrangi’s Kerrisdale Capital executed a short attack on Sage, caustically summarizing its move from a small Phase I/II to a pivotal trial as a strategy doomed to failure.
Kerrisdale’s report picked apart data from a single-arm study with no comparison group of patients, which they believe set the stage for the biotech to claim a big win without actually putting the therapy to the test. And they add that there are existing therapies that go after the exact same target with similar outcomes.
The failure here will also cast a cloud over Sage’s other R&D work, including a new drug for postpartum depression which was also touted with small studies illustrating positive results.
Wow p=0.8775. Drug pretty much did nothing. Maybe it is just a benzo? $SAGE
— Maxim Jacobs, CFA (@MaxJacobsEdison) September 12, 2017
But not everyone thinks the ugly flop here reads through to the rest of the pipeline. Notes Paul Matteis at Leerink:
The investment debate this morning centers around the degree to which SRSE reads negatively onto the clinical potential of SAGE-547 in PPD (and by extension other mood disorders); while we understand that the lack of signal in SRSE has rendered some investors more cautious in their interpretation of SAGE‘s many small CNS data sets, for us, it’s hard to see a tangible readthrough onto PPD, which has (1) placebo-controlled data, (2) better understood natural history/placebo effects, and (3) breakthrough therapy designation.
As for Jonas, he still found reasons to applaud the work.
“I’m proud of the Sage team for the significant progress they have made in improving our understanding of how to best treat these critically ill patients,” he said. “SRSE is a complicated condition that is poorly understood, and I want to thank the patients, their families, and the investigators who participated in the STATUS Trial. Although we did not meet the primary endpoint, this first-ever trial in a highly variable and complex patient population confirms that research in a critical care unit is possible and deepens our understanding of GABA mechanisms and their effect on brain circuitry. As we continue examining data from the STATUS Trial in the coming weeks, I’m hopeful this information will inform current treatments, and aid in the development of future treatments for patients with SRSE.”
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