Sage crushed by MOUNTAIN as phase 3 depression data fall short

Sage Therapeutics’ key phase 3 trial in major depressive disorder has missed its primary endpoint. The failure of SAGE-217 to beat placebo wiped more than 50% off Sage’s share price as investors digested the implications of the data for a critical asset.

SAGE-217 successfully came through a phase 3 trial in postpartum depression at the start of the year, raising hopes that the candidate, an oral take on Sage’s approved infused drug Zulresso, could rattle through some relatively short trials and emerge as a blockbuster in waiting. Those hopes took a big hit today when Sage shared results from a phase 3 trial in major depressive disorder.

At day 15, patients on 30 mg of SAGE-217 had improved 12.6 points on a depression scale, compared to an 11.2 point improvement in the placebo arm. That resulted in the trial missing its primary endpoint with a p-value of 0.115.

Investors responded quickly and brutally, wiping out more than half of Sage’s near-$8 billion market cap in premarket trading. Analysts also expressed alarm, pointing to the fact that the usual explanation for failed depression trials doesn't apply to the SAGE-217 study.

"In our view, the concerning aspect of the MOUNTAIN study is that it did not fail on a high placebo response rate but rather from issues with the SAGE-217 arms," J.P. Morgan Securities analyst Cory Kasimov wrote in a note to investors. 

Sage was publicly more sanguine about the results, pointing to post hoc analyses to argue that SAGE-217 emerged from the trial in credit.

One post hoc analysis found no measurable quantities of SAGE-217 in 9% of patients in the 30 mg arm, suggesting around 1 in 10 people did not comply with the treatment regimen. The phase 3 sneaked under the bar for statistical significance when those patients were excluded. Sage also found removing patients with relatively mild symptoms from the analysis led to statistical significance.

Post hoc analyses can give a misleading impression of the effects of a drug, but Sage also saw efficacy in the complete study population at different time points. Scores on the depression scale were better in the SAGE-217 arm at days three, eight and 12. 

Those findings led Sage CEO Jeff Jonas to argue in a statement that “the data are supportive of the activity of SAGE-217” in the indication, adding that the “drug displays good activity on most measures.” Many analysts are also giving SAGE-217 the benefit of the doubt for now. 

"This is not the disaster scenario we previously outlined, given the drug’s overall safety profile looked good/consistent. We are still inclined to believe that there’s a path forward for SAGE-217 and that it’s an active drug, but its optimal place in the treatment landscape is back up for debate and will require more data to figure this out," Kasimov wrote. 

Attention will now turn to three other studies of SAGE-217 in depression and insomnia that Sage has already initiated. Changes to the SAGE-217 pivotal program are possible, with Jonas stating that “drug development is an iterative process.”