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Sage Therapeutics to Reduce Workforce by 33%, Stock Down
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Sage Therapeutics, Inc. (SAGE - Free Report) announced a strategic reorganization and a portfolio reprioritization plan to support its ongoing business operations.
As part of this strategic reorganization, SAGE is looking to reduce its current workforce by 33% and implement changes in the leadership team. Shares of the company were down 4.3% in after-hours trading on Thursday, following the announcement of the news.
Owing to this reorganization, the company expects to record a non-recurring charge of around $26-$28 million in the fourth quarter of 2024. The restructuring process is likely to extend the company’s cash runway in the near future and support the long-term growth of its business.
As part of the reprioritization, SAGE will focus on the commercialization of its depression drug Zurzuvae (zuranolone), which is marketed in partnership with drug giant, Biogen (BIIB - Free Report) .
Sage Therapeutics will also focus on its neuropsychiatric candidate, dalzanemdor (SAGE-718), which is being evaluated in various mid-to-late-stage studies as a potential treatment for patients with cognition dysfunction associated with Huntington’s disease (HD).
Year to date, shares of Sage Therapeutics have plunged 66.7% compared with the industry’s decline of 0.7%.
Image Source: Zacks Investment Research
SAGE's Licensing Agreement With BIIB
Sage Therapeutics and Biogen, equally share profits and losses for the commercialization of Zurzuvae in the United States. In ex-U.S. markets, BIIB records product sales (excluding Japan, Taiwan and South Korea) and pays royalties to Sage Therapeutics.
Zurzuvae, the first and only oral treatment indicated for adults with postpartum depression (PPD), was approved by the FDA in August 2023 and commercially launched in December.
However, the FDA issued a complete response letter (CRL) for the new drug application (NDA) for zuranolone for another indication, major depressive disorder (MDD) in August 2023. Per the FDA, the data supporting the NDA filing did not provide substantial evidence of effectiveness to support a potential approval. It recommended conducting additional clinical studies.
Following the FDA’s CRL to Zurzuvae in the MDD indication, Sage Therapeutics implemented a strategic reorganization plan. Back then, the company reduced its workforce by around 40% and reprioritized its pipeline development efforts to focus on the development of dalzanemdor.
SAGE's Recent Pipeline Setbacks a Worry
Earlier this month, Sage Therapeutics announced that the phase II LIGHTWAVE study, which evaluated dalzanemdor for treating mild cognitive impairment (MCI) and mild dementia in Alzheimer’s Disease (AD), failed to meet the primary endpoint.
Also, in April 2024, Sage Therapeutics reported that the phase II PRECEDENT study, which investigated dalzanemdor in patients with MCI associated with Parkinson’s disease (PD), failed to achieve its primary endpoint.
Following the disappointing data from the LIGHTWAVE study and the PRECEDENT study, SAGE decided to stop further development of dalzanemdor for the AD and PD indications.
Currently, two phase II studies (DIMENSION and SURVEYOR) and a phase III study (PURVIEW) are evaluating dalzanemdor for treating cognition dysfunction associated with HD. Top-line data from the phase II DIMENSION study is expected later in 2024.
In light of the setbacks faced by Sage Therapeutics within the AD and PD indications for dalzanemdor, the successful development of the candidate for the HD indication remains questionable.
SAGE's Zacks Rank & Stocks to Consider
Sage Therapeutics currently carries a Zacks Rank #3 (Hold).
In the past 60 days, estimates for ANI Pharmaceuticals’ 2024 earnings per share have moved up from $4.69 to $4.81. Earnings per share estimates for 2025 have improved from $5.37 to $5.86. Year to date, shares of ANIP have risen 8.2%.
ANIP’s earnings beat estimates in each of the trailing four quarters, with the average surprise being 31.32%.
In the past 60 days, estimates for Voyager Therapeutics’ 2024 loss per share have narrowed from $1.47 to $1.44. Loss per share estimates for 2025 have narrowed from $1.95 to $1.94. Year to date, shares of VYGR have declined 6.2%.
VYGR’s earnings beat estimates in three of the trailing four quarters while missing on the remaining occasion, the average surprise being 104.33%.
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Sage Therapeutics to Reduce Workforce by 33%, Stock Down
Sage Therapeutics, Inc. (SAGE - Free Report) announced a strategic reorganization and a portfolio reprioritization plan to support its ongoing business operations.
As part of this strategic reorganization, SAGE is looking to reduce its current workforce by 33% and implement changes in the leadership team. Shares of the company were down 4.3% in after-hours trading on Thursday, following the announcement of the news.
Owing to this reorganization, the company expects to record a non-recurring charge of around $26-$28 million in the fourth quarter of 2024. The restructuring process is likely to extend the company’s cash runway in the near future and support the long-term growth of its business.
As part of the reprioritization, SAGE will focus on the commercialization of its depression drug Zurzuvae (zuranolone), which is marketed in partnership with drug giant, Biogen (BIIB - Free Report) .
Sage Therapeutics will also focus on its neuropsychiatric candidate, dalzanemdor (SAGE-718), which is being evaluated in various mid-to-late-stage studies as a potential treatment for patients with cognition dysfunction associated with Huntington’s disease (HD).
Year to date, shares of Sage Therapeutics have plunged 66.7% compared with the industry’s decline of 0.7%.
Image Source: Zacks Investment Research
SAGE's Licensing Agreement With BIIB
Sage Therapeutics and Biogen, equally share profits and losses for the commercialization of Zurzuvae in the United States. In ex-U.S. markets, BIIB records product sales (excluding Japan, Taiwan and South Korea) and pays royalties to Sage Therapeutics.
Zurzuvae, the first and only oral treatment indicated for adults with postpartum depression (PPD), was approved by the FDA in August 2023 and commercially launched in December.
However, the FDA issued a complete response letter (CRL) for the new drug application (NDA) for zuranolone for another indication, major depressive disorder (MDD) in August 2023. Per the FDA, the data supporting the NDA filing did not provide substantial evidence of effectiveness to support a potential approval. It recommended conducting additional clinical studies.
Following the FDA’s CRL to Zurzuvae in the MDD indication, Sage Therapeutics implemented a strategic reorganization plan. Back then, the company reduced its workforce by around 40% and reprioritized its pipeline development efforts to focus on the development of dalzanemdor.
SAGE's Recent Pipeline Setbacks a Worry
Earlier this month, Sage Therapeutics announced that the phase II LIGHTWAVE study, which evaluated dalzanemdor for treating mild cognitive impairment (MCI) and mild dementia in Alzheimer’s Disease (AD), failed to meet the primary endpoint.
Also, in April 2024, Sage Therapeutics reported that the phase II PRECEDENT study, which investigated dalzanemdor in patients with MCI associated with Parkinson’s disease (PD), failed to achieve its primary endpoint.
Following the disappointing data from the LIGHTWAVE study and the PRECEDENT study, SAGE decided to stop further development of dalzanemdor for the AD and PD indications.
Currently, two phase II studies (DIMENSION and SURVEYOR) and a phase III study (PURVIEW) are evaluating dalzanemdor for treating cognition dysfunction associated with HD. Top-line data from the phase II DIMENSION study is expected later in 2024.
In light of the setbacks faced by Sage Therapeutics within the AD and PD indications for dalzanemdor, the successful development of the candidate for the HD indication remains questionable.
SAGE's Zacks Rank & Stocks to Consider
Sage Therapeutics currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the biotech sector are ANI Pharmaceuticals, Inc. (ANIP - Free Report) and Voyager Therapeutics, Inc. (VYGR - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, estimates for ANI Pharmaceuticals’ 2024 earnings per share have moved up from $4.69 to $4.81. Earnings per share estimates for 2025 have improved from $5.37 to $5.86. Year to date, shares of ANIP have risen 8.2%.
ANIP’s earnings beat estimates in each of the trailing four quarters, with the average surprise being 31.32%.
In the past 60 days, estimates for Voyager Therapeutics’ 2024 loss per share have narrowed from $1.47 to $1.44. Loss per share estimates for 2025 have narrowed from $1.95 to $1.94. Year to date, shares of VYGR have declined 6.2%.
VYGR’s earnings beat estimates in three of the trailing four quarters while missing on the remaining occasion, the average surprise being 104.33%.