Sage Therapeutics shares jump on it depression drug

Sage Therapeutics, Biogen announce collaboration on SAGE-217, SAGE-324

Biogen (BIIB) and Sage Therapeutics (SAGE) announced that they have executed a global collaboration and license agreement to jointly develop and commercialize zuranolone for major depressive disorder, postpartum depression and other psychiatric disorders and SAGE-324 for essential tremor and other neurological disorders.

Sage receives a large investment from Biogen

Zuranolone, a potential first-in-class, two-week, once-daily oral therapy in development for the treatment of MDD and PPD, is currently in Phase 3 development as part of the LANDSCAPE and NEST clinical programs.

Zuranolone has breakthrough therapy designation from the U.S. Food and Drug Administration (FDA) for MDD and, if successfully developed and approved, has the potential to be a novel treatment paradigm in depression.

Biogen gambles on Sage’s depression drug

The vision for zuranolone in MDD and PPD is based on its potential, being evaluated in the LANDSCAPE and NEST development programs, to work rapidly and to continue providing sustained benefit beyond the period of dosing.

Together, these two features, if supported by positive clinical efficacy and safety data, could provide an alternative option to how depression is treated today based on a target profile of an “as-needed” short course of treatment for a depressive episode, with rapid and sustained efficacy and favorable tolerability.

The development of an “as-needed” treatment for depression may help ease the difficulties associated with chronic use of antidepressants and may enhance quality of life and patient adherence.

To date, two positive pivotal studies have been completed with zuranolone 30 mg, one in MDD (MDD-201) and one in PPD.

Additionally, while the Phase 3 MOUNTAIN Study of zuranolone in MDD did not meet its primary endpoint, the encouraging data from the recently announced MOUNTAIN six-month follow-up period and the topline interim SHORELINE Study analysis, suggest the potential for zuranolone, if successfully developed and approved, to be uniquely positioned as a disruptive, distinct and novel treatment approach for patients.

Biogen and Sage believe that zuranolone is clinically active in MDD based on the data compiled to date and look forward to planned data readouts in 2021.

Sage is pursuing three development pathways for zuranolone in the U.S.: PPD; acute rapid response therapy in MDD when co-initiated with new standard antidepressant therapy; and “as-needed,” or episodic, treatment of MDD.

As a result, Sage is advancing four additional pivotal studies evaluating a 50 mg dose of zuranolone: a Phase 3 study in PPD, a Phase 3 study of use as an acute RRT in patients with MDD when co-initiated with new standard antidepressant therapy , a Phase 3 study in the acute treatment of MDD and an open label Phase 3 study evaluating the long-term safety, tolerability and efficacy of “as-needed” repeat treatment. Data from these studies are expected in 2021.

Upon closing of the transaction, Biogen and Sage will collaborate to further define the development and commercialization strategy for zuranolone.

Beyond PPD and MDD, zuranolone may also have potential in other psychiatric disorders including bipolar disorder and generalized anxiety disorder. SAGE-324 is a next-generation positive allosteric modulator of GABAA receptors in Phase 2 development for essential tremor with potential in other neurological conditions such as epilepsy and PD.

Essential tremor is one of the most common movement disorders estimated to affect over six million patients in the U.S., and current standard of care may be inadequate for many.

Following encouraging results from a Phase 1 open-label study in essential tremor, Sage advanced SAGE-324 to the Phase 2a KINETIC Study, which Sage is currently conducting.

The KINETIC Study is a 28-day placebo-controlled study in patients with essential tremor expected to read out in 2021.

Upon closing of the transaction, Biogen and Sage will collaborate to further define the development and commercialization strategy for SAGE-324 in essential tremor and, as appropriate, for potential expansion into other neurological disorders.

The strategic collaboration is global in scope and under the terms of the agreement, Sage will receive $1.525 billion in cash to be comprised of an upfront payment of $875 million and a $650 million equity investment in Sage from the purchase of approximately 6.2 million newly issued shares of Sage common stock at a price of $104.14 per share, representing a premium of 40 percent over the 30-day volume-weighted average share price of $74.39 per share as of November 25, 2020.

Should the zuranolone and SAGE-324 programs achieve certain development and commercial milestones, Sage will be eligible to receive up to approximately $1.6 billion in potential milestone payments. Biogen and Sage will share responsibility and costs for development as well as profits and losses for commercialization in the U.S.. Outside the U.S., Biogen will be responsible for development and commercialization, excluding Japan, Taiwan and South Korea with respect to zuranolone, and will pay Sage tiered royalties in the high teens to low twenties. Closing of the transaction is contingent on completion of review under antitrust laws, including the Hart-Scott-Rodino Antitrust Improvements Act of 1976 in the U.S., and other customary closing conditions. The transaction is expected to close by the end of January 2021.

BIIB last traded at $241.75. SAGE last traded at $84.00.

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