SAGE Therapeutics: Hold Rating Reiterated Amid Clinical Trial Setbacks and Uncertainties

Needham analyst Ami Fadia has reiterated their neutral stance on SAGE stock, giving a Hold rating yesterday.

Ami Fadia has given his Hold rating due to a combination of factors surrounding SAGE Therapeutics’ recent developments. The primary concern stems from the unsuccessful trial of SAGE-718 in Parkinson’s Disease (PD) patients. The Phase 2 PRECEDENT study showed no significant difference between the treatment and the placebo, which led to a sharp 20% drop in SAGE’s stock. This outcome not only casts doubt on the efficacy of SAGE-718 in PD but also raises skepticism about its potential success in treating cognitive impairments in Huntington’s Disease (HD) and Alzheimer’s Disease (AD) patients, despite management’s note that the HD trial endpoints differ.
Fadia’s assessment has led to the removal of the PD indication from his model, and a halving of the probability of success (PoS) for the AD indication, from 10% to 5%. The rationale behind this adjustment is due to the AD trial sharing the same primary endpoint as the PD trial. The upcoming earnings call on April 25th, which will provide updates on the launch trends of Zurzuvae in Postpartum Depression (PPD), is anticipated with interest. Nevertheless, the setbacks and uncertainties have resulted in Fadia reiterating a Hold rating on SAGE Therapeutics, reflecting a cautious stance until more definitive progress is observed.

In another report released yesterday, RBC Capital also maintained a Hold rating on the stock with a $26.00 price target.

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SAGE Therapeutics (SAGE) Company Description:

SAGE Therapeutics, Inc. is a clinical stage biopharmaceutical company, which engages in the development and commercialization of novel medicines to treat life-altering central nervous system. Its programs include brexanolone, which is an acute interventional treatment for postpartum depression; and SAGE-217, an oral therapy for treatment of various CNS disorders. The company was founded by Steven Marc Paul and Douglas Covey in April 2010 and is headquartered in Cambridge, MA.