Sage Therapeutics shares up 77% on hope for severe-depression treatment

Sage Therapeutics Inc. stock soared more than 73% Thursday to mark its biggest-ever one-day price and percentage gain, after the company reported of a treatment for severe depression that could offer doctors a new mechanism to treat the disease.

Sage  said the Phase 2 trial of its Sage-217 drug involving 89 adult patients with moderate to severe major depressive disorder (MDD) met its primary and secondary endpoints. Patients showed a statistically significant mean reduction in the Hamilton Rating Scale for Depression after just 14 days of treatment compared with the placebo. The drug was well-tolerated with no serious or adverse events, said Sage.

“With the caveat of cross-trial comparisons, this difference is both larger — and attained faster — than what’s observed for other antidepressants today,” Leerink analysts wrote in a note, as they raised their stock price target to $246 from $123, equal to 53% above its current trading level.

Sage said that 64% of patients in the trial achieved remission by day 15, “which is a very important data point that’s often not cited as a selling point for standard-of-care medicines (such as SSRIs) because the bar is so high,” said Leerink.

“It’s hard to understate how meaningful these data are in the backdrop of the very significant unmet medical need in depression.” Leerink Research

Most depression-drug trials run for four to six weeks, on the assumption that it takes that long for them to show an effect. For patients suffering from severe depressive symptoms, that waiting period can be hard to tolerate.

“It’s hard to understate how meaningful these data are in the backdrop of the very significant unmet medical need in depression: even if the SAGE data on a placebo-adjusted basis weren’t differentiated via cross-trial comparisons, we still think ‘217 would be an important drug as it offers a new mechanism (extra-synaptic GABA-modulation) in an area where the vast majority of options generally modulate the same pathways (serotonin, dopamine, norepinephrine),” said Leerink.

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Sage Chief Executive Jeff Jonas M.D. agreed that there has been little innovation in depression treatments for the last two decades. Most depressive patients are still treated with selective serotonin reuptake inhibitors, or SSRI’s, the family that includes Prozac and zoloft.

Sage-217 shares pharmacology properties with Sage’s other drug, brexanolone, a derivative of a compound found naturally in the brain that recently produced

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“These very encouraging data suggest the potential of SAGE-217 in the treatment of MDD as well as other mood-related disorders that we may pursue,”said Jonas.

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The GABA system — GABA stands for gamma-Aminobutyric acid — is the neurotransmitter that regulates impulses between nerve cells in the brain. Low levels are linked to mood disorders, including depression.

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Leerink reiterated its outperform rating on Sage. The stock has a mean rating of buy among analysts on FactSet.

Shares have gained 207% in 2017, while the SPDR S&P Pharmaceuticals ETF  has gained 8%, the S&P 500  has gained 18% and the Dow Jones Industrial Average  has gained 22%.

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