Stifel analyst Paul Matteis expects Sage Therapeutics shares to trade meaningfully lower today on the negative SAGE-217 Mountain data. The failure is a surprise in one sense, but in another sense, not at all unprecedented, says the analyst, who points out that “even Prozac failed in a number of efficacy studies.”
As such, Matteis is reluctant “to throw in the towel” on the bull case that SAGE-217 still has the potential to become a blockbuster drug. The Mountain study “still clearly showed” evidence of efficacy, hitting statistical significance at a number of time points, Matteis tells investors in a research note.
However, it is “puzzling” that the failure was not due to an aberrantly large placebo effect but instead a smaller Hamilton Rating Scale for Depression total score on the drug, adds the analyst. Nonetheless, with the shares down over 50% in the premarket, he’s a buyer on the weakness. Sage Therapeutics is down 59%, or $87.68, to $61.53 in premarket trading.