The CRL stated that the application did not provide substantial evidence of effectiveness to support the approval of zuranolone for the treatment of MDD and that additional study or studies will be needed. 

Wedbush says it is difficult to imagine Biogen investing in additional trials as their turnaround efforts unfold. Further clarity from the agency will likely be needed to make a call. 

William Blair analysts Tim Lugo, Myles Minter, Lachlan Hanbury-Brown, John Boyle, Sarah Schram, and Tiffany Marchell say the benefits observed in the WATERFALL and CORAL studies were viewed as marginal and zuranolone as a niche MDD treatment. However, the CRL is the worst-case scenario in the indication. 

The analysts also say the data from the LANDSCAPE program, which included five studies in MDD, was substantial, and it is difficult envisioning what additional data could be generated to support a resubmission, given zuranolone's reduced effectiveness and questionable durability in large Phase 3 studies of MDD. 

Needham analysts Ami Fadia and Eason Lee note that the WATERFALL study took around 13 months from study start to topline readout, and along with an FDA resubmission that would be classified as Class 2 with a 6-month review timeframe, this could put the total timelines for the delay in MDD approval close to 2 years.

 The analysts reiterate the Buy rating with a price target of $70.

Truist Securities analysts Joon Lee and Les Sulewski note multiple failed Phase 2 and Phase 3 studies for depression, showing that it is unclear sufficient knowledge on the pathway to target MDD.

HC Wainwright notes that while not completely surprising, the announcement that the agency issued a CRL for MDD was still a disappointment.

The analyst Douglas Tsao, notes reservations regarding the robustness of the data package for zuranolone in MDD, specifically the lack of replicate studies evaluating the same dose and the rapid loss of efficacy seen in the CORAL study.

Price Action: SAGE shares are down 52.30% at $17.21 on the last check Monday.