Skip to main content

Sage Therapeutic Com(SAGE-Q)

Today's Change
Real-Time Last Update Last Sale Cboe BZX Real-Time

Why Shares of Sage Therapeutics Slumped This Week

Motley Fool - Fri Aug 11, 2023

What happened

Shares of Sage Therapeutics (NASDAQ: SAGE) were down by more than 40% for the week at 11 a.m. on Friday, according to data provided by S&P Global Market Intelligence. The pharmaceutical company's stock closed last week at $36.10, then fell to a 52-week loss of $16.52 on Monday. The stock is down more than 44% this year.

What happened

The stock suffered a double whammy of news that drove it lower. First, last Friday, after the markets closed, Sage and Biogen announced that their therapy Zurzuvae (zuranolone) had been approved by the Food and Drug Administration (FDA) for postpartum depression (PPD) but not for major depressive disorder (MDD). The FDA sent a complete response letter to Sage regarding Zurzuvae's New Drug Application for its use on MDD patients, asking for more studies before approval. The problem for Sage is that roughly 600,000 women every year may have PPD symptoms, while MDD has a much larger patient population. According to the Anxiety and Depression Association of America, in 2020, roughly 14.8 million U.S. adults had at least one major depressive episode with severe impairment.

The second blow came when the company announced second-quarter earnings on Monday. Sage's revenue was reported as $2.5 million, up 66% year over year. However, the company also had a net loss of $160.3, compared to a loss of $126.3 million in the same period a year ago.

Now what

Sage's slump may be short-lived. The company is seeing increased sales from PPD therapy Zulresso, and Zurzuvae could ultimately be approved to treat MDD. The company has $1 billion in cash, enough to fund operations into 2025, it said. The company also said it is looking at possible cutbacks and workplace reorganizations to extend its cash runway.

10 stocks we like better than Sage Therapeutics
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

They just revealed what they believe are the ten best stocks for investors to buy right now... and Sage Therapeutics wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of August 1, 2023

Jim Halley has no position in any of the stocks mentioned. The Motley Fool recommends Biogen. The Motley Fool has a disclosure policy.

Paid Post: Content produced by Motley Fool. The Globe and Mail was not involved, and material was not reviewed prior to publication.

More from The Globe

inside the market
Short sales on the TSX: What bearish investors are betting against
Larry MacDonald