On Wednesday, TD Cowen maintained its Buy rating on Sage Therapeutics (NASDAQ:SAGE) but reduced the price target from $30.00 to $16.00. The adjustment follows the announcement that Sage's investigational drug, SAGE-718, did not meet the primary endpoint in a Phase 2 trial for Parkinson's Disease Mild Cognitive Impairment (PD-MCI). Despite the setback, the drug demonstrated a good safety profile without new safety signals.
SAGE-718's development for PD-MCI will cease, as confirmed by Sage Therapeutics. However, the company remains focused on its ongoing studies in other cognitive impairment conditions. Upcoming milestones include the release of topline data from the Phase 2 SURVEYOR study in Huntington's Disease (HD) cognitive impairment, expected in mid-2024. Additional data from the Phase 2 DIMENSION HD study and LIGHTWAVE Alzheimer's Disease (AD) study are anticipated later in the year.
The company has emphasized that the recent trial results do not necessarily predict outcomes in the ongoing studies for HD and AD due to differences in disease pathophysiology, NMDA signaling, and cognitive assessment endpoints. TD Cowen highlighted the potential value in the HD cognitive impairment program, given the disease's association with NMDA receptor dysfunction, despite the fact that secondary and exploratory endpoints in the PD-MCI trial were also not met.
Key opinion leaders (KOLs) surveyed at TD Cowen's annual Health Care Conference in March 2024 expressed cautious optimism about the drug's prospects in HD. Approximately 60% of KOLs considered the likelihood of Phase 2 success for SAGE-718 in HD as somewhat promising, acknowledging the complexity of treating cognitive impairment in HD.
Sage Therapeutics remains hopeful for the first Phase 2 SURVEYOR HD data readout in mid-2024, with the understanding that patient populations, disease progression, and trial endpoints differ significantly, potentially leading to different outcomes in HD and AD studies compared to the PD-MCI trial.
InvestingPro Insights
As Sage Therapeutics (NASDAQ:SAGE) navigates the aftermath of the SAGE-718 trial results and looks ahead to future studies, investors are closely monitoring the company's financial health and stock performance. According to InvestingPro data, Sage holds a market cap of approximately $751.33 million and a price to book ratio as of the last twelve months of Q4 2023 at 1.25, indicating the market's valuation of the company relative to its book value. Despite a substantial revenue growth reported in the last twelve months, the company's gross profit margin was deeply negative at -314.54%, reflecting significant costs outweighing revenue.
InvestingPro Tips suggest that Sage's stock might be in oversold territory based on its RSI, which could interest contrarian investors looking for potential rebounds. Additionally, with liquid assets exceeding short-term obligations, the company's near-term financial position appears stable. However, analysts are cautious, expecting a sales decline in the current year and not anticipating profitability. With the stock having declined over recent months, these insights could be pivotal for investors considering Sage Therapeutics' potential recovery or further volatility.
For a deeper dive into Sage Therapeutics' financials and expert analytics, visit https://www.investing.com/pro/SAGE. There are 11 additional InvestingPro Tips available for Sage, which can be accessed with an exclusive 10% discount on a yearly or biyearly Pro and Pro+ subscription using the coupon code PRONEWS24.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.