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Sage Therapeutics Falls Hard After Brexanolone Drug Fails Phase III Testing

Sage Therapeutics Falls Hard After Brexanolone Drug Fails Phase III Testing
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Shares of SAGE Therapeutics Inc (NASDAQ: SAGE) plunged Tuesday after the biopharma company announced its treatment for super-refractory status epilepticus failed its phase III trial.

Chardan analyst Gbola Amusa rated the stock a Hold and said a price target was under review.

Shares Fall Off A Cliff

Sage sank 24 percent in premarket trading Tuesday. It was down 17.32 percent at $73.19 in early trading following the opening bell.

Status epilepticus is a medical emergency of persistent, unremitting seizure lasting longer than five minutes.

“We note the STATUS trial was the basis of our prior Sell rating on SAGE, established 24 May 2016 in our initiation,” Amusa wrote. “Instead of Sage releasing STATUS results in 2H16 as had been guided, the STATUS results timing was pushed back multiple times, with the results released today, in 4Q17. The brexanolone (SAGE-547) failure is consistent with our long-held thesis from our 24 May 2016 initiation.”

The company said it would continue to examine data from the trial in coming weeks in order to help develop future treatments.

"Although we did not meet the primary endpoint, this first-ever trial in a highly variable and complex patient population confirms that research in a critical care unit is possible and deepens our understanding of GABA mechanisms and their effect on brain circuitry," said CEO Jeff Jonas.

By late morning, Sage Therapeutics had regained some of its losses, and at time of publication, shares were down 13.73 percent at $76.37.

Related Link: Short Thesis On Sage Therapeutics: Lead Drug ‘Likely To Fail’ In Phase 3

Latest Ratings for SAGE

Jul 2018Morgan StanleyMaintainsOverweightOverweight
Jun 2018Canaccord GenuityMaintainsBuyBuy
Jun 2018Ladenburg ThalmannInitiates Coverage OnBuy

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