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Sage Therapeutics Stock Depression Breakthrough


14,000,000 Americans suffer from persistent, tough to treat depression. Current medications leave a lot to be desired. Now Sage Therapeutics is about to launch a totally new way of treating the disease. Is this the opportunity biotech investors have been looking for?


By Nathaniel Suryabudi, Biotech Analyst 

When it comes to treatment, depression is a debilitating mental health condition that poses significant unmet needs. With millions of new cases reported each year, depression is a severe disorder that affects mood, thoughts, and daily functioning, often leading to a sense of hopelessness and despair. The exact cause of depression is not fully understood, but it is believed to involve a complex interplay of genetic, environmental, and biochemical factors.

Depression is particularly challenging to treat due to several factors. First, the diagnostic process for depression can be subjective and complex, relying primarily on self-reported symptoms and clinical assessments. This can lead to variations in diagnosis and difficulty in accurately identifying the condition in some cases.

Secondly, the available treatment options for depression are not universally effective for all individuals. For the past 60 years, monoamine-based antidepressants and SSRIs have served as the established treatment for chronic management of Major Depressive Disorder (MDD). These treatments involve daily administration, necessitating consistent usage and adequate exposure to maintain their therapeutic effects. They may not provide significant relief for everyone or may take upwards of 10 weeks to start working. The response to treatment can vary widely among individuals, and finding the right approach often involves a trial-and-error process. According to the Sequenced Treatment Alternatives to Relieve Depression (STAR*D) study, which was conducted in the early 2000s, around 66% of individuals with major depressive disorder did not achieve remission after the first medication trial. The study followed a sequence of treatment steps, where participants who did not respond to an initial medication were switched to a different medication or combination of medications. Subsequent treatment steps involved different medications, augmentation strategies, or even referral for other treatments like psychotherapy or electroconvulsive therapy.

The birth of Sage Therapeutics and Zuranolone

Sage Therapeutics is a biopharmaceutical company specializing in the development of novel medicines to address critical unmet needs in the field of central nervous system (CNS) disorders. The company was founded in 2010 and is headquartered in Cambridge, Massachusetts, USA.

Sage Therapeutics focuses on developing therapies that target GABA and NMDA receptors, which are key neurotransmitter systems involved in the regulation of mood, cognition, and behavior. The company’s research and development efforts primarily concentrate on conditions such as major depressive disorder (MDD), postpartum depression (PPD), essential tremor, and various forms of epilepsy.

In recent years, Sage Therapeutics has gained attention for its investigational drug called Zuranolone (previously known as SAGE-217), which is being developed for the treatment of MDD and PPD. Zuranolone is designed to modulate GABA receptors and has demonstrated promising results in clinical trials, showing rapid and sustained improvements in depressive symptoms. Zuranolone is an oral drug currently being investigated as a potential treatment for Major Depressive Disorder (MDD). What makes Zuranolone notable is its unique design, which aims to provide a rapid-acting and sustainable therapeutic option for individuals with depression. This novel molecule has the potential to represent a significant breakthrough in the current management of depression.

One of the key advantages of Zuranolone is its proposed treatment duration. Unlike traditional antidepressants that require daily administration over an extended period, Zuranolone is designed as a two-week, once-daily treatment. This shorter treatment duration could offer several benefits, such as increased convenience for patients and potentially improved treatment adherence.

Zuranolone’s rapid-acting properties are another promising aspect. Early clinical trial results suggest that it may lead to a relatively fast onset of antidepressant effects, providing relief for individuals with depression sooner than conventional treatments. This rapid response is particularly crucial for patients experiencing severe depressive symptoms or those in urgent need of relief.

Sage Therapeutics has engaged in several strategic partnerships to further its research and development efforts. One notable collaboration is with Biogen, a well-established biotechnology company specializing in neurological and neurodegenerative diseases. In December 2019, Sage Therapeutics and Biogen entered into a partnership to jointly develop and commercialize Zuranolone for the treatment of MDD and PPD.

Under the terms of the collaboration, Biogen obtained exclusive rights to develop and commercialize Zuranolone outside of the United States, while Sage Therapeutics retained exclusive rights within the United States. The partnership aimed to leverage Biogen’s global reach and expertise in neurology to maximize the potential impact of Zuranolone on a global scale.

By partnering with Biogen, Sage Therapeutics sought to accelerate the development and regulatory processes, expand the clinical program, and ensure the broad availability of Zuranolone to patients worldwide. The collaboration brought together the complementary strengths and resources of both companies to advance the understanding and treatment of depression, ultimately benefiting patients who are in need of new and innovative therapeutic options.

How many people and how much?

In 2020, it is estimated that over 21 million adults experienced at least one major depressive episode, with nearly 14 million individuals diagnosed with major depressive disorder (MDD). Additionally, approximately 500,000 cases of postpartum depression occur annually. The scale of these numbers underscores the substantial total addressable market (TAM) for depression treatments within the United States.

It is important to note that the TAM may fluctuate over time due to factors such as changes in diagnostic criteria, increased awareness and recognition of depression, and evolving treatment practices. Additionally, variations in access to healthcare, regional disparities, and cultural factors can influence the actual market penetration and utilization of depression treatments.

In 2016, individuals diagnosed with major depression exhibited significantly higher rates of healthcare service utilization compared to those without this diagnosis in the United States. This increased utilization was associated with average healthcare costs that were more than two-fold higher for individuals with major depression, amounting to $10,673, compared to $4,283 for those without major depression. The average amount spent per person per year to treat only major depression is $920 meaning the excess amount is due to things like emergency room visits and overnight stays. The price of Zuralone is not yet out yet as the drug has not been registered or marketed yet, but early signs is that it will be around $290 for 25 mg. The depression medication market has shown significant growth and presents exciting opportunities for pharmaceutical companies and healthcare providers. With the increasing prevalence of depression worldwide and a growing recognition of the importance of mental health, the demand for effective treatments has been on the rise. In 2020, the depression drugs market was valued at approximately $13 billion. This substantial market size reflects the significant investment and resources dedicated to the research, development, and marketing of depression medications. Looking ahead, the sales forecast for the depression medication market in 2031 is estimated to reach around $20 billion.

Should I invest?

JNJ’s Spravato is currently the only potential competitor to SAGE-217 in the market. Other candidates, such as Allergan’s Rapastinel and Vistagen’s AV-101, have failed recent clinical trials despite showing promise in earlier stages. Relmada Therapeutics is attempting to target the NMDA receptor with an opiate enantiomer called REL-1017, but research suggests this approach may not be viable due to the potential opioid-related adverse events. The trial methods for REL-1017 have also raised concerns, as they lack long-term evaluation and follow-up for potential opioid addiction/withdrawal. In contrast, SAGE-217 is expected to gain approval, resulting in a duopoly with JNJ’s Esketamine in a multi-billion dollar market. In addition, if the total depression market is $20 Billion by 2031, and if Sage Therapeutics can capture 15% market share, Sage can earn $3 billion in revenue per year. Established companies in this market typically trade for 5 times revenue, so that would be $15 billion for Sage and they are currently valued at just $3 billion. In addition to Zuranalone, the company also boasts a promising pipeline of other neurologic drugs. 

Sage’s stock could be a very powerful investment for one’s portfolio especially in the long-term as Zuranolone is just waiting to be registered. Sage Therapeutics is a worthwhile endeavor barring any obstacles with registration.  With the low competition in a multi-billion market they could be a shining star within the depression medication community. There are few companies that are better set up for success in this industry than Sage Therapeutics. 

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