Less than a couple weeks ago, yours truly penned a list of biotech names with catalysts on the calendar for the third quarter that could drive that stock much higher … or much lower. One of those names was Sage Therapeutics Inc (NASDAQ:SAGE); an update on the phase-2 trial of postpartum depression drug SAGE-547 was scheduled for sometime in July.
That report came today. The results were compelling, to say the least, catapulting SAGE stock a whopping 40%-plus. Hopefully a few of you were willing to take on the risk of such a trade, as the reward has been more than juicy.
Whether you’re in a SAGE trade or not right now, however, this is a drug/trial worth a closer look, es$pecially now that the market knows it has a good reason to expect efficacy success as its R&D moves forward.
SAGE-547
SAGE-547 is an “allosteric modulator of both synaptic and extra-synaptic GABA-A receptors.” In English, the drug makes nerve cells less likely to “fire” when they’re not supposed to. (The Q&D science: GABA-A allows a neuron cell’s chloride channel to remain open for longer than usual, allowing more chlorine ions in to make that cell better +/- balanced.)
It’s not a mechanism of action one would expect from a postpartum depression drug; most depression therapies aim to maintain or increase serotonin levels in the body. SAGE-547 sounds more like a treatment that would be appropriate as a therapy for epilepsy, which it is — SAGE-547 is also in phase-3 trials as a therapy for super-refractory status epilepticus, or SRSE. As is the case with so many other drugs, however, Sage found this one to be an effective treatment of more than one condition.
Success
In short, SAGE-547 met its primary phase-2 trial goals as a therapy for postpartum depression, or PPD. Namely, 70% of the trial’s patients experienced a measurable level of remission within 60 hours of receiving the treatment, and that remission was maintained for one month. On the HAM-D scale (the Hamilton Depression Rating Scale), depression levels were on average reduced from 26 or more to seven or less. The placebo group, on the other hand, only saw such remission success about 10% of the time at the 60 hour mark as well as at the 30-day mark.
Sage Therapeutics CEO Jeff Jonas, M.D., commented:
“These data speak for themselves. The unmet need in the PPD patient population cannot be overstated. Given the societal impact of this condition, and the possible identification of a biological basis for treating these women, we are hopeful these data will point to a new understanding of this disorder and the development of effective therapies. Further, as the second positive placebo-controlled trial involving SAGE-547, the first being in essential tremor, this demonstrates the potential broad utility of our differentiated GABA mechanism and the candidate molecules in our pipeline, not only for neurological disorders, but now for mood and affective disorders as well.”
He is right about the lack of truly effective therapies for PPD. There are several treatment options, most of which are serotonin reuptake inhibitors, and a few of which are tricyclics. None of them, however, would do what most would consider a great job of reeling in postpartum depression. It’s interesting and telling that an entirely new approach to treat PPD — which many believe is hormonally related — was able to achieve such strong levels of efficacy.
Bottom Line for Sage Therapeutics
Getting a bead on the postpartum depression market is difficult in that it’s often treated like more typical depression cases, or not treated at all. But, the depression therapy market is worth something on the order of $10 billion per year. At least some of those are PPD cases.
At the same time, an estimated 15% of women who give birth develop postpartum depression. That translates into 600,000 cases each year in the United States alone. Adding stillborn and miscarriage cases, that figure ramps up to 900,000. Yet, only an estimated 15% of those women actually seek out treatment for their PPD.
For perspective, about 15 million adults in the U.S. suffer from major depressive disorder. Yes, PPD is a smaller market, but it’s also a market that’s not effectively, directly addressed by any drug company. Sage Therapeutics may well fill that void with SAGE-547, stepping into a nine-figure if not a ten-figure opportunity.
There’s still work to be done. Though the phase-2 results are promising, the company has to maintain similar results over the course of a much bigger phase-3 trial. Based on what can be seen and measured this far, though, there’s good reason to be optimistic.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
