Biogen, Sage admit a defeat in major depression

Dive Brief:

• Sage Therapeutics and Biogen will focus on ramping up sales of their Zurzuvae medicine for postpartum depression, giving up on attempts to win approval in the wider market for major depressive disorder.
• Analysts at one time predicted the drug could generate sales of $1 billion a year, but the Food and Drug Administration’s decision in August 2023 to clear Zurzuvae only for postpartum depression in new mothers drastically limited its potential. Sage said Tuesday its decision to stop development for major depressive disorder, or MDD, was based on “the significant new investment and time” new studies would require.
• “We’re prioritizing our resources,” Sage CEO Barry Greene told analysts on a conference call. The decision to focus on postpartum depression makes sense based on the company’s balance sheet and appetite for risk, he said.

Dive Insight:

Sage’s fortunes have been closely tied to the ups and downs of Zurzuvae. In late 2019, the company’s stock was trading above $150 and then crashed below $65 after the drug, then known as SAGE-217, failed in a clinical trial. Although a later study in 2021 showed positive results in major depressive disorder, the FDA wasn’t convinced.

Soon after the FDA’s rejection of the wider indication, Sage announced it would lay off 40% of its workforce. Another round of job cuts and restructuring followed earlier this month. Shares of the company dropped 19% to just under $7 apiece in early trading Wednesday.

Despite the disappointment in MDD, company executives said they are bullish about the drug’s prospects in postpartum depression. Prescription trends are encouraging, and insurers by and large are covering the medicine, they said. In the third quarter, Sage’s share of the revenue from the Biogen collaboration for Zurzuvae rose 49% to $11 million.

“In all, things seems to be progressing reasonably well” with the launch, Stifel analyst Paul Matteis wrote in a note to clients.

Zurzuvae is a once-a-day capsule taken orally for 14 days. It offers a simper option for patients compared with Sage’s Zulresso, the very first medicine approved for postpartum depression. Zulresso, which requires a 60-hour infusion, never brought in significant sales for Sage, and the company is now planning to discontinue it after this year.

This article was originally published here.