SAGE Therapeutics Inc (NASDAQ:SAGE) shares plummeted by 24% today as the company announced the total failure of Phase 3 STATUS trial for its therapy SAGE-547 (brexanolone). The drug was developed as a cure for Super Refractory Status Epilepticus (SRSE), a rare neurological condition that leaves patients unresponsive first or second line antiepileptic treatments. During the trial, 43.9% of patients on brexanolone and 42.4% placed on placebos met primary endpoints, proving the inefficiency of the drug.

Analyst Cory Kasimov of J.P. Morgan indicates that the failure of Phase 3 might be a changing point for how investors view the stock overall, noting: “We are not surprised by the ~24% drop pre-market […] As we’ve previewed in the past, we thought investor expectations were generally low for this particular study (given the nature of the disease, the myriad intricacies of diagnosis and treatment in this setting, and limited prior data, etc.). The magnitude of the miss, however, might give investors pause.”

However, emphasizing the differentiating nature of future trials vs. SRSE, Kasimov opines: “The attractive setup for SAGE (at least in our view) was built upon the series of higher conviction catalysts later this year (registrational PPD, randomized MDD, and, to a lesser extent, ET/Parkinson’s), but it remains to be seen how much confidence is shaken by today’s outcome… We’d note that the key upcoming trials are based on randomized data (SRSE was not), and if confidence holds, this could still serve to abrogate the downside from today’s failure as investors buy into the weakness.”

As such, the analyst reiterates an Overweight rating on SAGE stock without mentioning a price tag. (To follow Kasimov’s track record, click here)

Tipranks analytics reveal SAGE as a Strong Buy. Out of 9 analysts polled by TipRanks (in the past 3 months), 8 are bullish, while 1 is sidelined on SAGE Therapeutics stock. With a 31% upside potential the stock’s consensus price target stands at $97.29.