On Wednesday, RBC Capital maintained its Sector Perform rating and $26.00 stock price target for Sage Therapeutics (NASDAQ:SAGE) following the announcement of clinical trial results. Sage Therapeutics disclosed top-line data from the Phase II PRECEDENT trial of dalzanemdor in Parkinson's disease (PD) patients with mild cognitive impairment, which did not meet its primary endpoint.
The trial aimed to demonstrate a statistically significant improvement in the WAIS-IV Coding Test at Day 42 but failed to show any notable difference from the placebo. Similarly, no secondary endpoints were achieved. Safety appeared comparable between the drug and placebo groups, although there were fewer treatment-emergent adverse events (TEAEs) in the drug arm but a higher discontinuation rate.
RBC Capital expressed concerns regarding the dosing of dalzanemdor, speculating that the 1.2mg daily dose might have been too low compared to a previous study that used a 3mg daily dose. This underdosing could cast doubt on the potential success of upcoming trials for Alzheimer's disease (AD) and Huntington's disease (HD), which are also using low doses.
Despite Sage Therapeutics cautioning against extrapolating the PD trial results to the forthcoming AD and HD trials, RBC Capital notes that the lack of improvement in cognition observed in this PD trial could diminish confidence in these subsequent studies. The LIGHTWAVE trial for AD also uses the WAIS-IV scale as its primary endpoint, raising further questions about the efficacy of dalzanemdor in cognitive conditions.
Still, RBC Capital sees a stronger mechanistic rationale for dalzanemdor in HD due to its similarity to 24(S)-hydroxycholesterol. Lower levels of this compound have been linked to cognitive decline in HD, suggesting a potential for dalzanemdor to show efficacy in the upcoming DIMENSION study for HD, despite the high risk associated with these trials.
In conclusion, the lack of efficacy signals from the dalzanemdor trial in PD has not significantly altered RBC Capital's stance on Sage Therapeutics' stock. The firm notes the gradual initial launch of Zurzuvae and limited enthusiasm for other pipeline programs, indicating that more commercial and clinical certainty would be necessary for a more positive outlook on the company's shares.
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