Cowen Raises Sage Value On New Phase 2 Trial Success

SAGE Therapeutics Inc SAGE released Thursday positive top-line data from its Phase 2 study of SAGE-217 in major depressive disorder (MDD).

The news immediately propelled Sage's stock, rocketing it past previous highs to $169.58. Cowen thinks there’s still upside.

The Rating

Cowen analyst Ritu Baral maintained an Outperform rating on Sage and raised his price target from $135 to $202.

The Thesis

The treatment demonstrated statistical significance within 12 hours, sustained efficacy for four weeks, and met primary endpoints with “impressive, rapid, durable effectiveness.”

It also showed a positive safety profile with broad tolerance and common adverse effects. Previous concerns about elevated sedation levels were largely mitigated by night-time dosing and an altered capsule formulation.

“With a unique mechanism, superior efficacy, faster onset and good tolerability (as well potential benefits on sleep) compared to SSRIs, '217 can potentially become the first-line treatment for MDD with a potential for premium pricing to even branded SSRIs,” Baral wrote, noting that the program is ready for Phase 3.

Baral expects regulatory approval particularly considering the indication’s fast-track designation and Sage’s plan to pursue breakthrough designation. She anticipates peak MDD sales of $1.5 billion with potential additional sales for Parkinson’s and Essential tremor.

Price Action

At time of publication, Sage was trading up 76.5 percent at a rate of $162.22.

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