SAGE Therapeutics Inc (SAGE) Attains 52-Week High on Encouraging Clinical Results; Needham Cheers

Brexanolone poised to become first approved therapy for PPD, says Needham's Danielle Brill.


So what to make of SAGE Therapeutics Inc’s (NASDAQ:SAGE) latest success? On Thursday, the mid-size biopharmaceutical company stunned Wall Street with positive topline results from two phase 3 clinical trials (202B and 202C) of its lead program Brexanolone in postpartum depression (PPD). SAGE shares reacted to the news, skyrocketing nearly 50% to $92.63, and reaching 52-week high.

In reaction, Needham analyst Danielle Brill reiterates a Buy rating on SAGE Therapeutics shares, and raised his price target to $100 (from $86), which implies an upside of nearly 5% from current levels. (To watch Brill’s track record,  click here)

Brill commented, “Brexanolone has both Breakthrough status and PRIME designation and we expect FDA approval/launch in 2H18. We have modest expectations for overall commercial opportunity w/ brexanolone as a 60-hr IV infusion, but we highlight that it will address an unmet need as the first drug approved for PPD. We ultimately expect oral ‘217 to replace brexanolone for this indication and view outcome as a positive for ‘217 program as mechanism is now validated. We still see significant upside opportunity for Sage shares w/ Phase 2 ‘217 MDD data reporting out by YE. Positive results would signify potential for broad utility across mood disorders.”

“We adjusted our POS for brexanolone to 100% (was 75%) and slightly moved up estimated timing of launch in 4Q18. Our new brexanolone 2018 sales estimates are $3.8M (was $1.7M),” the analyst added.

When it comes to Wall Street’s bet, the odds are on this biotech player, with TipRanks analytics showcasing SAGE as a Strong Buy. Out of 10 analysts polled in the last 3 months, 9 are bullish on SAGE stock while 1 remains sidelined. However. with a potential downside of nearly 3%, the stock’s consensus target price stands at $91.13. Analysts will have to revise their price targets to be inline with today’s news.

Sage Therapeutics is a clinical-stage biopharmaceutical company committed to developing novel medicines to transform the lives of patients with life-altering central nervous system (CNS) disorders. Sage has a portfolio of novel product candidates targeting critical CNS receptor systems, GABA and NMDA.