Biogen CEO's tight-lipped zuranolone commentary not enough for Sage investors

Analysts and investors wanted the tea on the FDA review of Sage Therapeutics’ zuranolone, but Biogen CEO Chris Viehbacher wouldn’t spill it.

The lack of prepared remarks or discussion of the would-be depression drug cooled Sage's shares, which dropped 8% over Tuesday after Biogen’s second-quarter earnings call. The stock rested at $41.84 as of close Tuesday, compared to $43.95 at open. Wednesday didn't bring better news, with the biotech's stock sinking another 10% to $37.54 in the opening hour of trading.

“Am I overly reading into this?” one analyst wondered on the call.

“Look, we're in late-stage review, so, I think it's pretty normal that we don't want to disturb that process, and don't want to say anything that affects the FDA,” Viehbacher said.

Sage and Biogen, which partnered to develop zuranolone, have asked the FDA for approval to treat patients with major depressive disorder (MDD) and postpartum depression (PPD). The application was accepted in February and granted priority review. The therapy is meant to be a 14-day, fast-acting treatment—which stands in contrast to commonly approved depression therapies that can take weeks to kick in.

Biogen CEO Christopher Viehbacher
Biogen CEO Chris Viehbacher (Biogen)

Investors see huge potential in zuranolone, if approved. Mizuho Securities analyst Uy Ear said “investors were spooked this morning by the dearth of focus on the potential zuranolone approval in MDD/PPD in Biogen's earnings call, whereas the company was significantly more bullish previously.”

Last quarter, Viehbacher lumped zuranolone in with the company’s potential blockbuster Alzheimer’s disease medicine Leqembi, calling them a “super priority” with potential to be “major contributors to revenue.” He later called the Sage-partnered therapy “an underestimated asset in our portfolio.”

Now, investors are worried that the sudden quieting could signal that a complete response letter from the FDA for the MDD indication is on the horizon, according to Mizuho. That would be the larger of the two indications for which the companies have requested clearance. Investors were concerned that Biogen didn’t dedicate a single slide to the therapy during the earnings presentation nor did Viehbacher and crew have sufficient responses to sell-side analysts’ questions.

Also adding to the uneasiness is Biogen’s cost reductions, which include shaving off $700 million in operating expenses and another 1,000 employees cut from the roster. With all that going on, analysts wondered if Biogen would still be committed to a big commercial launch for zuranolone.

I have to confess to a little bit of superstitiousness on my side. I'd like to see the FDA decision, and then we'll be happy to talk lots about it." — Biogen CEO Chris Viehbacher

Viehbacher continued on the earnings call: “I have to confess to a little bit of superstitiousness on my side. I'd like to see the FDA decision, and then we'll be happy to talk lots about it, but the opportunity is huge out there.”

If you ask Sage, it’s standard practice to remain mum as the agency deliberates. In a statement provided to Fierce Biotech this morning, a spokesperson said that CEO Barry Greene first signaled that radio silence would be the plan during the biotech’s fourth quarter 2022 earnings call.

“It’s standard practice to not comment on the review process, the label, or interactions with the agency this close to our PDUFA date,” the spokesperson said.

Besides, who investors really want to hear from is the FDA. And they will—one way or another—by that PDUFA date of Aug. 5.