Sage to abandon development of neurological disorder drug after multiple failures
Adds graphic, updates shares, adds company comment in paragraph 4, analyst comment in paragraph 5
By Mariam Sunny
Nov 20 (Reuters) -Sage Therapeutics SAGE.O said on Wednesday it would stop the development of its experimental drug following the latest failure in a study testing it in patients with Huntington's disease, a rare neurological disorder.
The company's shares, down more than 77% this year, fell as much as 5% to $4.66 in morning trading, as some analysts raised questions about the company's profitability.
Earlier this year, the drug, dalzanemdor, failed to meet the main goals in Alzheimer's and Parkinson's disease studies, which prompted Sage to stop its development for those conditions too.
Sage said it plans to evaluate options across its early-stage drug candidates and focus on its postpartum depression (PPD) drug, Zurzuvae, which it developed with partner Biogen BIIB.O.
"With limited pipeline opportunities beyond dalzanemdor and Zurzuvae marketed only in the narrow PPD population, we believe Sage will likely face a long and uncertain road to achieve future profitability even with likely very significant cost-cutting measures," RBC Capital analyst Brian Abrahams said.
Last month, Sage announced the departure of its finance chief and said it would lay off more than 165 employees to focus on the launch of Zurzuvae.
Sage recently also scrapped the development of another neurological disorder drug it was developing with Biogen.
Dalzanemdor did not significantly improve cognitive function in patients with Huntington's disease compared to a placebo after 84 days, failing to meet the main goal of a mid-stage study.
In the trial of 189 patients, dalzanemdor also failed to achieve "statistical significance" in secondary goals.
Sage said it will also close a separate open-label safety study of dalzanemdor in patients with Huntington's.
Huntington's disease is an inherited disorder that causes nerve cells in parts of the brain to gradually break down and die. About 30,000 people in the United States have Huntington's disease, according to the National Organization for Rare Disorders.
Sage shares fall on disappointing trial data https://tmsnrt.rs/4hZ3uPG
Reporting by Mariam Sunny in Bengaluru; Editing by Shinjini Ganguli and Sriraj Kalluvila
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