Therapeutic Sage (SAGE) initially jumped on Wednesday when approving his treatment for postpartum depression. But Sage's shares plunged into the red at the end, while Wall Street wondered what was next for biotechnology stocks.
The approval is the first of Sage. But analysts' expectations regarding Zulresso's sales are wide-ranging and the street is significantly more interested in SAGE-217, which is in the clinical testing phase of several depressive disorders and insomnia.
"Although Zulresso is not as important in our assessment as SAGE-217, we view this as a key check when the company is developing its commercial sales capacity," RBC Capital Markets analyst Brian Abrahams said in a note. to customers. He estimates that Sage's entire platform is worth $ 4 billion a year.
Abrahams has an outperformance rating on Sage shares. Today, in the stock market, Sage shares rose 4.5%, but then declined 2.3% to 152.46. On the weekly chart, Sage shares consolidate with a purchase point at 188.92.
First postpartum treatment approved for depression
Zulresso is the first treatment for postpartum depression to obtain FDA approval. It is administered by infusion. Physicians should monitor patients for excessive sedation or unconsciousness. The black box indicates that patients must also be accompanied during interactions with their children.
Before launching the treatment for postpartum depression, Sage will have to meet with the Drug Enforcement Administration, certify sites for perfusion and lightening issues, said Abrahams. He expects Zulresso's sales to represent $ 13 million in 2019.
"We are modeling modest usage in 2019 with a record $ 370 million in business for Zulresso, with increasingly favorable prices that could potentially slightly increase our estimates," he said. Sage listed the treatment of postpartum depression at $ 34,000, above the estimated $ 28,000 Abrahams.
Sage stock up on potential sales of Zulresso
Marc Goodman, an analyst at Leerink, is less optimistic about Zulresso's sales potential. He expects a peak sales of $ 110 million, lower than analysts' forecasts, between $ 200 million and $ 400 million. Both analysts believe that Zulresso is mainly used in the most serious patients.
Investors are likely to overlook missteps when Sage launches treatment for postpartum depression. Shareholders are now interested in SAGE-217, which is being investigated as a treatment for major depressive disorder, postpartum depression, insomnia and bipolar depression.
"It's good news for society," he said in a report. "This is their first product endorsement and offers managers the opportunity to set up a commercial infrastructure."
But Goodman maintained its underperformance rating on Sage shares. The shares have a high relative daily investor strength rating of 91 out of a maximum of 99. The RS rating corrects the 12-month performance of one stock compared to all others. Sage stock ranks in the top 9%.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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