Shares of Sage Therapeutics experienced a significant drop of over 45% in premarket trading on Monday, following the news that the U.S. Food and Drug Administration (FDA) had rejected a crucial use of their depression drug, Zurzuvae. The drug was developed in partnership with Biogen.
Sage and Biogen had sought FDA approval for Zurzuvae’s use in two conditions – major depressive disorder (MDD) and postpartum depression. However, while the FDA granted approval for Zurzuvae in postpartum depression, they declined to approve the drug for MDD. The regulatory body cited the need for additional studies as the reason for the rejection.
Both Biogen and Sage, headquartered in Cambridge, Mass., are now reviewing their options for Zurzuvae’s potential application in MDD. Sage has also announced its plans to evaluate various measures to extend its financial resources, which include prioritizing their pipeline and reorganizing their workforce.
As a result of the FDA rejection, Sage’s shares plummeted by nearly 47% in premarket trading, with shares of Biogen experiencing a 3% decline. Prior to this announcement, Sage’s shares closed at $36.10 but fell to $19.24 in premarket trading, while Biogen’s shares dropped to $261.