SAGE - Sage Therapeutics: Mid-2023 Data Readout And Possible FDA Approval Make This A Must Watch

2023-05-09 05:56:59 ET

Summary

• PDUFA date of August 5, 2023, was established to review zuranolone for the treatment of patients with major depressive disorder and postpartum depression.
• Biogen is a partner who is helping Sage advance zuranolone for the treatment of patients with MDD and PD.
• Additional results from the phase 3 open-label SHORELINE study, using zuranolone for the treatment of patients with MDD for an extended period, are expected in mid-2023.
• Sage Therapeutics had $1.1 billion in cash as of March 31, 2023, with enough cash to fund its operations through 2024; Will likely need to raise cash again in 2023.

Sage Therapeutics ( SAGE ) is a good speculative biotech play to look into. That's because it holds the potential to receive approval from the FDA of zuranolone for the treatment of patients with Major Depressive Disorder [MDD] and Postpartum Depression [PPD]. There is a PDUFA date established for August 5, 2023 and the drug could be approved to treat this patient population at any time before or on that date. Why I believe there is a high probability for U.S. marketing approval of this drug for these indications would be the mere fact that the FDA has already concluded that it doesn't want to convene an FDA advisory panel first to review the drug. This doesn't necessarily mean FDA approval is assured, but it does improve the odds of it being obtained. Sage should have an easy time getting the drug to market, because it is not advancing this drug for this patient population alone. Matter of fact, Biogen ( BIIB ) is a partner onboard helping to advance zuranolone for the treatment of patients with MDD and PPD. This isn't the only catalyst to have to wait for either. It is expected that additional results from the open-label SHORELINE study, which is using zuranolone for the treatment of patients with MDD, are expected to be released in mid-2023. With potential for FDA approval of zuranolone for two indications, plus additional data from the SHORELINE study to be released in mid-2023, these are the reasons why I believe that Sage Therapeutics is a good speculative biotech play to look into.

Potential FDA Approval Of Zuranolone For Two Large Market Indications

A good thing about Sage Therapeutics is that it has the potential to receive FDA approval of zuranolone for the treatment of patients with Major Depressive Disorder [MDD] and Postpartum Depression [PPD]. Major Depressive Disorder is characterized as where a person has an intense and persistent form of sadness for an extended period of time. For instance, you might experience sadness when a loved one dies or a very bad event happens for a day or a few weeks. However, people with MDD experience sadness for an even longer period of time. The major depressive disorder market is expected to grow to $7.9 billion by 2029 . Should Sage receive FDA approval for this indication then it would be a large market opportunity for it. Postpartum Depression is a type of depression that occurs after childbirth. However, once someone does have PPD then they have an increased risk of major depression thereafter. There are several types of symptoms that these patients might experience such as:

• Loss of appetite
• Intense irritability
• Difficulty in bonding with newborn
• Insomnia

This type of depression, like MDD, can last many months or even longer. How long it lasts highly depends upon whether or not treatment is successful. Such treatment options might include: Hormone therapy, counseling, antidepressants. The hope is that zuranolone can be approved so that both MDD and PPD patients can be helped.

The New Drug Application [NDA] of zuranolone for the treatment of patients with MDD and PPD was accepted by the FDA in February of 2023 . As I stated above, the FDA has set a PDUFA action date of August 5, 2023, to review this drug for the potential approval for the treatment of this patient population. It's hard to say for sure whether or not the agency will approve this drug for this indication, but there are two factors to consider which improves the odds of it happening. The first factor would be the fact that the FDA had decided not to convent an Adcom panel (Advisory FDA panel) to review zuranolone. Again, this doesn't necessarily mean that U.S. marketing approval is guaranteed, but it is a positive development nonetheless. The second factor would be the positive results that were released from two programs. The NEST clinical program included the use of zuranolone to treat patients with PPD in two studies, which were the ROBIN and SKYLARK studies. The LANDSCAPE program included a total of 5 studies exploring the use of this drug for the treatment of the MDD patient population. It was shown across the board that treatment with zuranolone helped patients achieved rapid and sustained relief of depressive symptoms. Besides the ability to receive FDA approval of zuranolone for the treatment of patients with MDD/PPD, there is another catalyst for traders/investors to look forward to. That is, Sage Therapeutics expects to release results from the open-label SHORELINE study in mid-2023. This is an open-label study which was done to test out the use of repeated zuranolone treatment in patients with MDD.

Financials

According to the 10-Q SEC Filing , Sage Therapeutics had cash, cash equivalents and marketable securities of $1.1 billion as of March 31, 2023. The biotech believes that it has enough cash on hand to fund its operations through 2024. Although, being that biotech tend not to wait to raise cash it should do so a lot earlier than anticipated. Especially if it receives FDA approval of zuranolone for the treatment of patients with MDD and PPD. Then, it will likely have to raise additional cash at some point in 2023. My belief is that it may choose to raise additional cash immediately upon receiving FDA approval of zuranolone for the treatment of patients with MDD and PD.

Risks To Business

There are several risks that traders/investors should be aware of before investing in this biotech. The first risk to consider would be with respect to the ongoing FDA reviews of zuranolone for the treatment of patients with MDD and PD. The PDUFA date has been established for August 5, 2023 and there is no guarantee that Sage will receive U.S. marketing approval for one or both of these indications. A second risk to consider would be with respect to the expected release of results from the phase 3 open-label SHORELINE study. This late-stage study recruited patients for treatment of zuranolone as a long-term open-label study. The company anticipate that it will release additional results from this SHORELINE study in mid-2023. A final risk to consider would be with respect to its financials. That's because it has estimated that it only has enough cash to fund its operations through 2024. This means, I would expect it to raise cash at some point during this year. Especially, if it does ultimately receive FDA approval of zuranolone for the treatment of patients with MDD and PD.

Conclusion

The final conclusion is that Sage Therapeutics is a good speculative biotech play to look into. That's because it provides investors with a major catalyst to look forward to into the 2nd half of 2023. That is, there is a PDUFA date of August 5, 2023 established by the FDA, to review the drug zuranolone for the treatment of patients with MDD and PD. In addition, there is the anticipation of an earlier catalyst opportunity for traders/investors to look forward to before then. That is, Sage expects to report additional results from the phase 3 open-label SHORELINE study in mid-2023. These additional results might reinforce and shed additional light of how patients fare when treated with zuranolone for an extended period of time. With potential FDA approval of zuranolone for MDD and PD in August of 2023, plus a data readout of the phase 3 open-label SHORELINE study in mid-2023, these are the reasons why I believe that Sage Therapeutics is a good speculative biotech play to look into.

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