Shares of Sage Therapeutics were climbing fast on Thursday after the company announced positive mid-stage trial results on one of its depression drugs.
The company saw its market cap soar over $2.5 billion as traders gobbled up shares. Shares closed up over 70%. It was the biggest one day ever price percentage gain for the stock.
The Cambridge-based company announced that its drug, SAGE-217, was successful in reducing symptoms of major depressive disorder in a Phase 2 study. The company is now planning on moving the drug into a Phase 3 trial before possibly seeking to get approval from the Food & Drug Administration.
According to the company, if SAGE-217 is approved, it would be the very first drug in more than 20 years to treat depression through a new mechanism of action.
Leerink analysts remarked, “With the caveat of cross-trial comparisons, this difference is both larger — and attained faster — than what’s observed for other antidepressants today.” The firm raised its stock price target to $246 from $123. RBC analysts also raised ther price target on the stock to $280.
64% of the patients achieved remission by day 15 in the trial, “which is a very important data point that’s often not cited as a selling point for standard-of-care medicines (such as SSRIs) because the bar is so high,” according to Leerink.
“It’s hard to understate how meaningful these data are in the backdrop of the very significant unmet medical need in depression: even if the SAGE data on a placebo-adjusted basis weren’t differentiated via cross-trial comparisons, we still think ‘217 would be an important drug as it offers a new mechanism (extra-synaptic GABA-modulation) in an area where the vast majority of options generally modulate the same pathways (serotonin, dopamine, norepinephrine),” the firm noted.
“These very encouraging data suggest the potential of SAGE-217 in the treatment of MDD as well as other mood-related disorders that we may pursue,”said CEO Jeff Jonas.
Disclaimer: We have no position in Sage Therapeutics, Inc. (NASDAQ: SAGE) and have not been compensated for this article.