Sage Therapeutics, Inc. SAGE reported a loss of $1.53 per share for the third quarter of 2024, wider than the Zacks Consensus Estimate of a loss of $1.52. The company had reported a loss of $2.81 per share (excluding the restructuring expenses) in the year-ago quarter.

Revenues in the third quarter totaled $11.8 million, significantly up from $2.7 million reported in the year-ago period. The upside can be attributed to sales of new depression drug Zurzuvae (zuranolone), which is marketed in partnership with drug giant Biogen BIIB. Revenues marginally beat the Zacks Consensus Estimate of $11 million.

Zurzuvae, the first and only oral treatment indicated for adults with PPD, was approved in August 2023 and was commercially launched last December.

Shares of Sage Therapeutics were down 11.6% in after-hours trading on Oct. 29 following the announcement of the results.

Year to date, shares of Sage Therapeutics have plunged 60.9% compared with the industry’s decline of 4.8%.

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More on SAGE's Q3 Earnings

Total revenues in the reported quarter comprised product and collaboration revenues.

Product revenues came in at $0.8 million, recorded from the company’s first marketed drug, Zulresso (brexanolone), which was approved by the FDA in 2019 as the first-ever FDA-approved treatment for adults with postpartum depression (PPD). Zulresso sales plunged 69.1% year over year due to cannibalization from Zurzuvae.

Collaboration revenues from the sale of Zurzuvae were $11 million in the third quarter of 2024, up 49% on a sequential basis.

Sage Therapeutics, along with partner Biogen, equally shares profits and losses for the commercialization of Zurzuvae in the United States. In ex-U.S. markets, Biogen records product sales (excluding Japan, Taiwan and South Korea, where Shionogi holds the rights) and pays royalties to SAGE.

Collaboration revenues accounted for 50% of net revenues recorded when Biogen ships the drug to distributors. BIIB recorded around $22 million in Zurzuvae product sales in the third quarter.

Per Sage Therapeutics, around 2000 prescriptions were shipped and delivered during the quarter, representing an increase of almost 40% sequentially.

Research & development (R&D) expenses were $54.6 million, down 46.4% from the year-ago quarter’s levels. The downside was due to restructuring measures, including reduced headcount and lower spending on early-stage pipeline programs.

Selling, general and administrative expenses (SG&A) declined 31.9% from the prior-year quarter’s figure to $53.2 million. The downside was caused by reduced headcount, lower expenditures, and one-time vesting events that occurred in the year-ago quarter.

The company had $569 million in cash, cash equivalents and marketable securities as of Sept 30, 2024, compared with $647 million on Jun 30, 2024. This cash balance, combined with expected funding from collaboration revenues and potential savings from the recent reorganization, is expected to support SAGE’s ongoing operations into 2026.

2024 Guidance

Management does not expect to receive any milestone payments from collaborations in the remainder of 2024.

The company anticipates operating expenses to decline in 2025 compared with 2024. Also, revenues from Zulresso sales will continue to decline in the upcoming quarters due to the availability and strong uptake of Zurzuvae.

Owing to the continuous decline in Zulresso sales and the strategic shift to focus on the commercialization of Zurzuvae, Sage Therapeutics decided that it would stop selling Zulresso going forward. The drug will be commercially available until Dec. 31, 2024.

SAGE and BIIB are focused on establishing Zurzuvae as a first-line therapy and the standard of care for women with PPD.

SAGE's Recent Pipeline Updates

Sage Therapeutics and Biogen pursued the development of zuranolone for another indication, major depressive disorder (MDD).

However, the FDA issued a complete response letter (CRL) for the new drug application (NDA) for zuranolone in MDD in August 2023. Per the FDA, the data supporting the NDA filing did not provide substantial evidence of effectiveness to support a potential approval. It recommended conducting additional clinical studies.

Per the latest earnings release, SAGE and BIIB said they would stop further development of zuranolone as a treatment for MDD in the United States, as more time and investment would be required for conducting additional studies.

This might have hurt investors' sentiments and resulted in the stock to decline in after-hours trading on Oct. 29.

In September 2024, Biogen terminated its rights related to the investigational neurology candidate, SAGE-324. A phase II study on SAGE-324 for treating essential tremor (ET) failed to meet the primary endpoint in July. The termination will be effective from Feb. 17, 2025.

Following the termination of the deal by BIIB, Sage Therapeutics will obtain full ownership and rights to SAGE-324. The company plans to evaluate potential indications, if any, for SAGE-324.

Earlier this month, Sage Therapeutics announced that the phase II LIGHTWAVE study, which evaluated its neuropsychiatric candidate, dalzanemdor (SAGE-718), for treating mild cognitive impairment (MCI) and mild dementia in Alzheimer’s Disease (AD), failed to meet the primary endpoint. Following this, the company decided to stop further development of dalzanemdor for the AD indication.

Previously, dalzanemdor failed in the phase II PRECEDENT study, which investigated the candidate in patients with MCI associated with Parkinson’s disease (PD). SAGE had stopped the further development of dalzanemdor for the PD indication as well.

The phase II DIMENSION study is evaluating dalzanemdor for treating cognition dysfunction associated with Huntington’s Disease (HD). Top-line data from the phase II DIMENSION study is expected later in 2024.

However, the successful development of dalzanemdor for the HD indication remains questionable, given the candidate has already failed in the AD and PD indications.

SAGE's Zacks Rank

Sage Therapeutics currently carries a Zacks Rank #3 (Hold).

Our Key Picks Among Biotech Stocks

Some better-ranked stocks from the sector are ANI Pharmaceuticals, Inc. ANIP and Elevation Oncology, Inc. ELEV, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 60 days, estimates for ANI Pharmaceuticals’ 2024 earnings per share have moved up from $4.68 to $4.73. Earnings per share estimates for 2025 have improved from $5.25 to $5.67 during the same time. Year to date, shares of ANIP have increased 7%.

ANIP’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 31.32%.

In the past 60 days, estimates for Elevation Oncology’s 2024 loss per share have narrowed from 86 cents to 82 cents. Loss per share estimates for 2025 have narrowed from 90 cents to 86 cents during the same time. Year to date, shares of ELEV have rallied 10.4%.

ELEV’s earnings beat estimates in three of the trailing four quarters while missing on the remaining occasion, the average surprise being 12.05%.

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