On Tuesday, TD Cowen reaffirmed a Buy rating on shares of Sage Therapeutics (NASDAQ:SAGE), with a price target of $16.00. The company recently announced the results from its Phase 2 SURVEYOR study, which evaluated the cognitive impairment in Huntington's Disease (HD) patients compared to healthy volunteers (HVs). The study demonstrated a statistically significant difference in baseline HD Cognitive Assessment Battery (HD-CAB) scores with a p-value of less than 0.0001.
In the placebo-controlled part of the treatment study, Sage Therapeutics reported a slight numerical difference between its drug, dalzanemdor, and the placebo on the HD-CAB at day 28. The company plans to use the topline results and a forthcoming subscale analysis to fine-tune the upcoming Phase 2 DIMENSION readout, which is also focused on cognitive impairment in HD, expected in late 2024.
The analyst from TD Cowen noted that the SURVEYOR study was not designed to show a statistically significant difference in HD-CAB scores between dalzanemdor and the placebo. It was mentioned that dalzanemdor previously did not meet expectations in a Phase 2 study for Parkinson's Disease Mild Cognitive Impairment (PD-MCI). However, Sage Therapeutics has pointed out that these results may not predict the drug's performance in HD and Alzheimer's Disease (AD) Phase 2 studies, due to the unique disease pathologies, NMDA signaling mechanisms, and different endpoint measures involved.
The report also highlighted a broader concern regarding the potential of dalzanemdor to address cognitive deficits. Given the NMDA receptor dysfunction is a common factor in various cognitive disorders, the lack of a strong signal from both the PD-MCI and HD cognitive studies was cited as a reason for caution regarding the drug's promise in treating cognitive impairments.
In other recent news, Sage Therapeutics has seen a flurry of analyst activity. Citi has maintained its sell rating on the biopharmaceutical company's stock, citing insufficient data from the Phase 2 SURVEYOR study for the drug dalzanemdor, intended to treat cognitive impairment in Huntington's disease. The firm was critical of Sage's decision to withhold specific numerical changes observed post-treatment, which did not aid in assessing the risks associated with the upcoming Phase 2 DIMENSION study.
Baird initiated coverage on Sage Therapeutics with a neutral rating and a price target of $15. The firm's analysis projects gradual sales growth from the postpartum depression treatment, Zurzuvae. Meanwhile, Mizuho Securities reduced its price target to $18 while maintaining a neutral stance, despite better-than-expected quarterly results. Truist Securities also adjusted its price target to $18, noting limited potential for significant profit growth due to a profit-share agreement with Biogen (NASDAQ:BIIB) on Zurzuvae.
Scotiabank reduced its price target to $19 following a setback in the Phase 2 trial of dalzanemdor, a drug aimed at treating cognitive impairment associated with Parkinson’s disease. These are recent developments that underline the cautious optimism surrounding Sage Therapeutics' prospects, with the company's performance and the success of its clinical trials likely to be critical factors influencing its future trajectory.
InvestingPro Insights
As Sage Therapeutics (NASDAQ:SAGE) navigates the development of its drug dalzanemdor, financial metrics and analyst insights provide a context for investors monitoring the company's progress. With a market capitalization of $634.32M and a striking revenue growth of 868.96% in the last twelve months as of Q1 2024, Sage's financial data reflects a dynamic but challenging landscape. The company's cash position is a positive sign, holding more cash than debt, which aligns with an InvestingPro Tip highlighting its ability to cover short-term obligations with liquid assets.
However, the company's current valuation reflects investor skepticism, as evidenced by a Price / Book ratio of 0.89 and a stock price hovering near its 52-week low. This may connect to concerns raised by analysts, including those from TD Cowen, about the potential of dalzanemdor in cognitive impairment treatment. Sage's financial health is further underscored by the fact that it is not expected to be profitable this year, a sentiment echoed by analysts who have revised earnings downwards for the upcoming period. For readers interested in a deeper dive into Sage's financials and future prospects, InvestingPro provides additional insights, including 12 more InvestingPro Tips for a comprehensive analysis. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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