Sage Therapeutics
stock was tumbling sharply in premarket trading after the biopharmaceutical company and partner
Biogen
didn’t receive Food and Drug Administration approval for a treatment of major depressive disorder.
“While we believe we are well-capitalized, given the impact of the Complete Response Letter for zuranolone in Major Depressive Disorder on our plans, we are currently evaluating resource allocation, including pipeline prioritization and a workforce reorganization with a goal of extending our cash runway,” wrote Barry Greene, CEO of Sage.
The FDA on Friday, however, approved Zurzuvae (zuranolone) as the first pill to treat postpartum depression.
That combination of announcements “represents an unanticipated outcome,” Wedbush analysts wrote in a report on Monday.
“The key unanswered questions at this point are what will Zurzuvae pricing look like, and will the BIIB/SAGE collaboration persist?” they continued. “From our view, it’s difficult to envision BIIB investing in additional clinical trials as their turnaround efforts unfold,” the analysts said.
Wedbush downgraded Sage to Neutral from Outperform and slashed the price target to $22 from $51. It maintained its Neutral rating on
Biogen
but trimmed the price target to $269 from $276.
Shares of Sage (ticker: SAGE) were sliding 44% to $20.15 in premarket trading.
Biogen
(BIIB) fell 1.9% to $263.95.
Write to Emily Dattilo at [email protected]
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