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Sage's First-Of-Its-Kind Postpartum Depression Drug Clears FDA Hurdle: What You Need to Know

March 20, 2019 11:21 am
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Shares of mid-cap biotech SAGE Therapeutics Inc (NASDAQ:SAGE), which focuses on therapies for central nervous system disorders, were trading higher Wednesday.

What Happened

Sage said the FDA approved its Zulresso — chemically brexanolone — an injection for the treatment of postpartum depression.

With the approval, Zulresso becomes the first and only medicine specifically approved for treating postpartum depression, or PPD, Sage said in a Tuesday evening press release. 

The approval required an in-line label that included a REMS program for the drug to be administered at certified sites.

Zulresso has both Priority Review status as well as a Breakthrough Therapy Designation from the FDA.

The FDA nod was based on findings from three multicenter, double-blind, placebo-controlled trials that evaluated Zulresso in women with moderate and severe PPD ages 18-45. 

Why It's Important

PPD, according to the company, is the most common medical complication of childbirth, estimated to affect about 400,000 women annually in the U.S.

"The potential to rapidly reduce symptoms in this critical disorder is an exciting milestone in women's mental health," said Samantha Meltzer, the primary investigator of the Zulresso clinical trials.

"PPD is recognized to have a significant and long-term impact on women and their families, but with Zulresso we may finally have the opportunity to change that."

The Zulresso approval is a key box check as Sage builds out its commercial sales capacity, RBC Capital Markets analyst Brian Abrahams said in a Tuesday note.

That said, the drug is unlikely to contribute meaningfully to revenue in 2019 in light of the remaining steps required for the launch, including DEA signing, site certifications and reimbursement, the analyst said.

Abrahams estimates a $13-million contribution from Zulresso in 2019, with potential for upside from incrementally favorable pricing, and about a 12-percent contribution to valuation.

RBC estimates peak Zulresso sales are at $370 million.

Abrahams sees Sage's late-stage asset SAGE-217, which is being evaluated for major depressive disorder, as more important for Sage than Zulresso, given the former's peak opportunity of over $3.5 billion.

What's Next

Sage said the drug will be available in late June following scheduling by the DEA, which is expected to occur within 90 days.

"We continue to be buyers on what we view as significantly underappreciated $4-billion annual sales potential for SAGE's emerging neuropsych platform," said RBC's Abrahams. 

RBC has an Outperform rating on Sage with a $249 price target.

Sage shares were trading up 0.92 percent to $157.53 at the time of publication Wednesday. 

Related Links:

The Daily Biotech Pulse: FDA Nod For Sage's Postpartum Depression Drug, Pfizer Invests In Gene Therapy Company

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