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Sage braces for make-or-break depression data

On Tuesday, Sage Therapeutics found that investors aren’t so concerned about its sales and revenue. At least, not right now.

Rather, the main focus of Sage’s first quarter earnings report was an experimental drug that may provide a major lift to the company’s business later on. Important data that could help the drug get approved as a treatment for major depressive disorder, or MDD, are expected soon.

Based in Cambridge, Massachusetts, Sage develops brain drugs. Its first, Zulresso, made history in early 2019, becoming the only therapy for postpartum depression cleared by the Food and Drug Administration.

But in spite of that landmark approval, Zulresso hasn’t made much money for Sage. Net revenue from the drug totaled $1.6 million in the first quarter, down from $2.3 million during the same three-month stretch last year. Sales have been hamstrung, in large part, because Zulresso is difficult to administer, requiring a 60-hour infusion that must be given at certified health facilities.

Sage ended the first quarter with a net loss of nearly $100 million, and remains under pressure to get more products on the market. That potential treatment for MDD, known as zuranolone, is the closest of Sage’s experimental drugs to getting an FDA approval.

Yet, like many brain drugs, zuranolone has hit setbacks. While data from earlier clinical trials indicated that it could be a quicker, safer treatment than existing antidepressants, zuranolone ultimately missed on the main goal of a larger study in late 2019. Those results erased more than half of Sage’s market value, and forced the company to redraw its development plans.

Sage is now evaluating zuranolone across four late-stage clinical trials, with each testing a two-week course of the drug at a higher dose than what was used in the larger, failed study. These trials are designed so that, should they read out positive, Sage could ask the FDA to approve zuranolone either as a treatment for postpartum depression, as an episodic therapy in MDD, or as an acute, “rapid response” therapy given alongside another antidepressant for MDD.

Already, one of those trials, called SHORELINE, has generated positive results, showing 80% of patients with MDD who received the higher zuranolone dose had a positive response 15 days into treatment.

“The ability to get patients better within two weeks is what got the FDA interested in this program, it’s what’s unique about the profile,” said Steve Kanes, Sage’s chief medical officer, on a Tuesday morning call with investors.

In its new earnings report, Sage revealed plans to reopen enrollment in high dose arm of SHORELINE, thereby increasing the target enrollment to 500 patients. Additionally, the company said it will allow patients in another study called CORAL to roll over into SHORELINE.

Executives noted that these plans were not made to respond to FDA requests, but rather to collect more long-term data on patients treated with the higher zuranolone dose. “The bigger the safety database, the better,” said Sage CEO Barry Greene, who joined the company in December last year.

Sage and its investors are also awaiting data from WATERFALL, a study with more than 500 participants that’s pitting zuranolone against placebo. The company expects results by the end of June.

WATERFALL stands to be a major, perhaps make-or-break test of whether zuranolone has a future in MDD. On Sage’s end, the company says it’s confident the drug offers a benefit over currently available antidepressants — both because of how quick it works and because of side effects.

“The numbers that we’re reporting are actually comparable, if not better than many drugs that are used right now to treat depression,” Kanes said. “Take a look at the labels for antidepressants that are in common use. The reports that we have — for either somnolence, sedation and so forth — they are well within the parameters of drugs that are approved for the treatment of depression.”

Still, there are concerns. Paul Matteis, an analyst at Stifel, asked Sage executives on Tuesday call whether they were prepared for scenarios in which zuranolone doesn’t live up to expectations. If the drug fails the MDD studies but succeeds in postpartum depression, for example, would Sage launch it in that market and then work through other challenges later?

Sage said it’s done some “very high level” scenario planning with Biogen, which is helping develop zuranolone through a potentially $3 billion deal inked last year. However, zuranolone needs to hit in the late-stage trials for there to be a chance at approval.

“We sat down with the [FDA] and mapped out three very unique approaches, three different ways to potentially get approval,” Greene said. “We believe that one of those three needs to be positive for us to have a drug on the market.”

That uncertainty doesn’t appear to be sitting well with investors, as Sage shares were down more than 7% in Tuesday morning trading.