Sage Therapuetics (SAGE) is skyrocketing today inresponse to its announcement of positive results from a Phase 2 clinical trial assessing SAGE-217 for the treatment of adult patients with moderate-to-severe major depressive disorder (MDD), a Fast Track indication in the U.S. It also has drugs going for Postpartum depression, which is a is depression that occurs after childbirth. After giving birth a woman with postpartum depression has problems with multiple symptoms such as: Insomnia, loss of appetite, intense irritability, and difficulty bonding with the baby. This occurs in at least 15% of the 3.9 million births that occurs in the United States each year. Millions more are impacted by depression in general. In this column we share the results in detail and give our take on the stock.

The 89-subject study met its primary endpoint of a statistically significant average reduction in HAM-D score from baseline to day 15 (p<0.0001) versus placebo. HAM-D is a rating scale for depression. At day 15, 64% of patients in the treatment group achieved remission compared to 23% for placebo (p=0.0005). Other secondary endpoints were also met:

SAGE-217 was generally well-tolerated with no serious or severe adverse events observed. The most common adverse events were headache, dizziness, nausea and drowsiness.

SAGE-217, a neuroactive steroid, is next-generation GABA modulator. The GABA system, the major inhibitory signaling pathway in the brain and central nervous system (CNS), plays a key role in regulating CNS function. The company intends to advance the program into Phase 3 development.

Results in detail

top-line results from the Phase 2, double-blind, placebo-controlled clinical trial of SAGE-217 in the treatment of 89 adult patients with moderate to severe major depressive disorder (MDD). In the trial, treatment for 14 days with SAGE-217 was associated with a statistically significant mean reduction in the Hamilton Rating Scale for Depression (HAM-D) 17-Item total score from baseline to Day 15 (the time of the primary endpoint) of 17.6 points for SAGE-217, compared to 10.7 for placebo (p<0.0001). Statistically significant improvements were observed in the HAM-D compared to placebo by the morning following the first dose through Week 4 and the effects of SAGE-217 remained numerically greater than placebo through the end of follow-up at Week 6. At Day 15, 64  percent of patients who received SAGE-217 achieved remission, defined as a score of 7 or less on the HAM-D scale, compared with 23 percent of patients who received placebo (p=0.0005). Other secondary endpoints were all similarly highly significant at Day 15 (p<0.002).

SAGE-217 was generally well-tolerated with no serious or severe adverse events; the most common adverse events (AEs) in theSAGE-217 group were headache, dizziness, nausea, and somnolence. A low rate of discontinuations due to AEs was reported; overall reports of AEs were similar between drug (53%) and placebo (46%), with a safety profile consistent with that seen in earlier trials. SAGE-217 was granted Fast Track Designation by the U.S. Food and Drug Administration (FDA) in May 2017.

Commentary

“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 Jeff Jonas M.D., chief executive officer of Sage Therapeutics. “There has been little innovation in the discovery and development of treatments for depression in the last two decades. Coupled with our recent positive Phase 3 dataread-out evaluating brexanolone for the treatment of postpartum depression, the findings in this study suggest our pipeline of proprietary GABA modulators may impact novel and fundamental brain mechanisms, offering potential development opportunities in a variety of indications. The positive activity and safety findings of SAGE-217 in MDD support advancing the program into later stage clinical development and we will work with the FDA to determine next steps in the further development ofSAGE-217.”

Our take on the stock

The biggest risk here would would be whether or not the FDA approves the treatment. It will come down to whether or not the FDA feels that the improvement on the depression score scale is adequate enough over placebo to warrant approval. That means that approval is not guaranteed, but the company has a good chance to obtain it. The second risk would be the potential of a cash raise at any moment.  The studies should be enough to obtain FDA approval for postpartum depression.  Analysts predict that peak sales for this product could be upwards of $650 million. This means that the market opportunity for Sage is pretty substantial.

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