Sage Therapeutics has announced that dalzanemdor, its lead therapeutic asset, failed in the Phase II DIMENSION trial for Huntington's disease. This failure marks the third consecutive mid-stage miss for the company, leading to the discontinuation of dalzanemdor's development and leaving Sage with a significantly reduced clinical pipeline.
DIMENSION Trial Results and Implications
The Phase II DIMENSION trial's failure in Huntington's disease adds to previous setbacks for dalzanemdor, which had also failed in mid-stage trials for Parkinson's and Alzheimer's diseases. Despite meeting the primary endpoint in the Phase II SURVEYOR trial for Huntington's, analysts had already expressed reservations about the drug's potential. The discontinuation of dalzanemdor frees up capital for the company, but also raises questions about Sage's future profitability.
Broader Struggles and Strategic Shifts
Sage's challenges began in August 2023 when, in partnership with Biogen, it received FDA approval for Zurzuvae in postpartum depression (PPD) but failed to secure approval for major depressive disorder (MDD). The company has since decided not to pursue approval of Zurzuvae in MDD. In July 2024, SAGE-324/BIIB124, partnered with Biogen, also failed to meet the primary endpoint in a Phase II essential tremor study.
To support the launch of Zurzuvae, Sage has implemented strategic reorganizations, including layoffs of 40% of its workforce after the MDD rejection and an additional 33% following the Alzheimer's flop. The company also discontinued Zulresso, an older PPD drug, to focus on Zurzuvae's commercialization.
Financial Outlook and Analyst Perspectives
As of September 30, Sage had $569 million in cash, cash equivalents, and marketable securities. While the Zurzuvae launch is progressing well in PPD, expenses remain high, with a quarterly cash burn of approximately $80 million. Analysts at Truist Securities noted that while restructuring should reduce costs, the path to profitability remains unclear. Bank of America Securities analysts believe considerable clinical validation is needed before assigning additional value to Sage's remaining assets.
