RBC Capital cuts Sage to sector perform, calls FDA decision "major setback"
Waldemarus
RBC Capital lowered its rating on Sage Therapeutics to sector perform on Monday, calling the FDA's decision not to approve zuranolone for major depressive disorder, or MDD, a "major setback" for the company.
RBC said that while it believes the shares already reflected uncertainty about the FDA decision following partner Biogen's recent "lukewarm commentary" about the drug and 10-Q changes, "we still expect meaningful downside on this setback" and "little reason to buy shares here pending further clarity."
The investment bank also slashed its price target for Sage to $25 from $71.
On Friday, Sage disclosed that the FDA had approved zuranolone for the treatment of post-partum depression, but not for MDD, a much larger market. The drug was co-developed with Biogen (NASDAQ:BIIB).
More on Sage Therapeutics:
Sage Therapeutics, Inc. SAGE Business Update Call Transcript
Sage plummets 46% after FDA declines zuranolone in major depression
Sage Therapeutics GAAP EPS of -$2.68 misses by $0.11, revenue of $2.47M misses by $0.44M
Sage, Biogen zuranolone OKd for postpartum, but not major, depression
Sage Therapeutics' Zuranolone Is A Lost Cause In Depression Market