On Thursday, Mizuho Securities adjusted its outlook on Sage Therapeutics (NASDAQ:SAGE) shares, reducing the price target to $13 from the previous $16 while maintaining a Neutral rating on the company's stock.
The adjustment follows the announcement of underwhelming results from the KINETIC-2 Phase 2b trial of SAGE-324, which Sage Therapeutics is developing in collaboration with Biogen (NASDAQ:BIIB).
The trial, aimed at treating essential tremor (ET), did not meet its primary endpoint, which was to show a statistically significant dose-response relationship and a statistically significant difference between SAGE-324 and a placebo.
As a consequence of these findings, the companies have decided to halt the development of SAGE-324 for ET and are currently considering potential next steps for the drug in other indications.
The analyst expressed concerns about the future of SAGE-324, noting that the difficulty in identifying a dose with an acceptable tolerability profile could hinder its development for other medical conditions. This setback is seen as a potential blow to Sage's partnership with Biogen, particularly regarding the collaboration on the Zurzuvae project.
Despite the disappointing outcomes for SAGE-324, Sage Therapeutics may still have an opportunity with its proprietary next-generation GABAA PAM, SAGE-319. The analyst pointed out that this compound could potentially offer a better balance of efficacy and tolerability. Following the removal of SAGE-324 from their projections, Mizuho has revised the price target for Sage Therapeutics accordingly.
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