Sage shares skyrocket after FDA allows expediting development of depression drug

Shares of Sage Therapeutics (SAGE) rose nearly 6% before the bell today after the FDA allowed it to accelerate the development of the company’s experimental depression drug SAGE -217 that is intended to treat two types of depression.

The FDA chief Scott Gottlieb has improved the drug approval process significantly. Not only did he encourage faster approvals but the entire process has gone more transparent. In order to streamline drug approvals, the FDA has introduced various designations. SAGE-217 benefited from one such designation — the breakthrough therapy. This is used to speed approvals.

Shares of Sage Therapeutics (SAGE) rose nearly 6% before the bell today after the FDA allowed it to accelerate the development of the company’s experimental depression drug SAGE -217

The drug SAGE – 217 had won the breakthrough therapy designation from the regulators early this year. Following a meeting with the FDA, the Cambridge-based company will now speed up its development plan for the antidepressant that can cure major depression and postnatal depression that affects 1 in 7 women during the initial months after childbirth.

Based on the quickened development plan, Sage will conduct a single Phase 3 trial in major depression. For post-delivery depression, the company will use the ongoing Phase 2 study, whose results are expected during Q4. The Phase 3 trial is expected to begin during the second half of 2018. If the company gets positive results from the trials, then the FDA will permit SAGE to seek approval for daily oral dosing antidepressant. SAGE-217 is also being evaluated to treat Parkinson’s disease and insomnia.

Over the last three months, Sage shares dropped 17.8% and year-to-date, the stock fell nearly 11%. However, backed by the FDA’s decision, Sage had surged 17% during the morning session today.