-=Sage Therapeutics (SAGE) : Depression drug unexpectedly fails

• Reports top-line results from pivotal Phase 3 MOUNTAIN Study evaluating the effect of SAGE-217 on depressive symptoms in adults with major depressive disorder; study did not meet primary endpoint at Day 15.

Sage Therapeutics (SAGE) collapsed Thursday after the biotech company's depression treatment failed to pass muster in a Phase 3 study. In early action on today's stock market, Sage stock plunged near 60%, and stood at roughly 60 a share.

This is the first time Sage's depression treatment, SAGE-217, missed its key goal in a test for major depressive disorder, SVB Leerink analyst Marc Goodman said in a note to clients. He has an underperform rating on Sage stock.

"The stock in premarket trading is down in the $60 range that we had previously outlined ($55-$90) as the worst case scenario," he said.

Depression Treatment Misses Its Mark

Patients took a daily pill of SAGE-217 as a depression treatment. The drug showed a statistically significant improvement on the symptoms of depression compared to a placebo on days three, eight and 12. Researchers used a scale called the Hamilton Rating Scale for Depression.

But on day 15, the depression treatment showed an average reduction of 12.6 points on that scale, compared to an average reduction of 11.2 points for the placebo. The results were not statistically significant.

In an analysis following the study, the biotech company noted two key issues. It appeared 9% of patients weren't compliant in taking a daily dose of the depression treatment. In addition, the study enrolled patients with milder symptoms than previous studies.

Sage suggested if these patients were excluded, the study would have hit its mark.

Treatment Well Tolerated

Sage noted the depression treatment was generally well tolerated. Overall adverse events in the 14-day treatment window and during 28 days of follow-up were similar between SAGE-217 and the placebo.

Chief Executive Jess Jonas reiterated his hopes for the depression treatment, noting SAGE-217 displays "good activity on most measures."

"We understand the drug development is an iterative process," he said in a written statement. "In the study, we've gathered new data on SAGE-217, data we believe support our hypothesis that SAGE-217 has a unique profile with the potential for rapid and robust onset with durable effect."