Hold Rating on SAGE Therapeutics Amid Limited Revenue Prospects and Pipeline Uncertainty

In a report released today, Joon Lee from Truist Financial maintained a Hold rating on SAGE Therapeutics (SAGE – Research Report), with a price target of $18.00.

Joon Lee has given his Hold rating due to a combination of factors, including the promising but limited revenue potential of SAGE Therapeutics’ new product launch and the uncertain prospects of the company’s drug pipeline. The recent launch of Zurzuvae has shown a strong start, reflected in significant prescription numbers and positive feedback from a diverse group of prescribers. However, the profit-sharing agreement with Biogen limits the financial upside for SAGE. Additionally, the market for the drug is not as large as for other medications, such as Auvelity by Axsome, which targets a broader patient population.

Regarding the pipeline, there are concerns about the competitive landscape and recent clinical setbacks. The failure of dalzanemdor in Parkinson’s disease trials casts a shadow over the upcoming data readouts for the same drug in Huntington’s and Alzheimer’s diseases. Moreover, there is heightened competition in the essential tremor space, where SAGE’s SAGE-324 will face off against other T-Type calcium channel targeting drugs. These factors contribute to the poor visibility and heightened risk profile, prompting a cautious stance from Joon Lee, thus maintaining a Hold rating with an adjusted price target.

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SAGE Therapeutics (SAGE) Company Description:

SAGE Therapeutics, Inc. is a clinical stage biopharmaceutical company, which engages in the development and commercialization of novel medicines to treat life-altering central nervous system. Its programs include brexanolone, which is an acute interventional treatment for postpartum depression; and SAGE-217, an oral therapy for treatment of various CNS disorders. The company was founded by Steven Marc Paul and Douglas Covey in April 2010 and is headquartered in Cambridge, MA.