Biogen, Sage's postpartum depression approval overshadowed by larger rejection

While an FDA approval is typically cause for celebration, Sage Therapeutics and Biogen have a tough road ahead to market their new postpartum depression (PPD) drug.

Friday, the U.S. FDA gave the green light to zuranolone. Now going by the commercial moniker Zurzuvae, the partners’ drug represents the first and only oral treatment for women with PPD, which affects some 500,000 patients in the U.S. each year, according to Biogen and Sage.

But PPD represents just a fraction of the total market Biogen and Sage were hoping to tap into. Alongside Friday’s approval, the partners also received a rejection for Zurzuvae in adults with major depressive disorder (MDD). The FDA told the partners their application didn’t provide “substantial evidence of effectiveness” and that additional studies would be needed. Sage and Biogen said they are reviewing possible next steps.

The dual approval and rejection was “more disappointing than good,” according to analysts from Mizuho Securities. Further, the team wrote in a note to clients that “we have to question Biogen’s interest at this point” without an MDD nod.

Biogen had been counting on zuranolone—plus its Eisai-partnered Alzheimer’s disease drug Leqembi—to help turn things around for the company, which has been struggling ever since the ill-fated launch of Aduhelm. Earlier this year, Biogen’s CEO Christopher Viehbacher said zuranolone “is clearly a top priority in the short term in the U.S.”

At the time, assuming an MDD nod was in the cards, Viehbacher added that the company saw both Leqembi and zuranolone as “major contributors to revenue.” Now, those dreams have been dashed.

In light of the development, Biogen’s stock was down about 0.26% Monday, while Sage’s dropped nearly 48%.

The analysts pointed out that MDD would have offered a “meaningfully larger opportunity” for Zurzuvae, with projected 2030 sales in MDD of about $1.3 billion versus roughly $200 million for PPD.

The Mizuho team also questioned the companies’ willingness to pursue further trials in MDD, given Zurzuvae’s poor showing thus far. First, a 30-mg dose of the drug failed to hit statistical significance in the MOUNTAIN trial. Things went slightly better in the WATERFALL study, where a 50-mg dose was statistically significant on its primary endpoint, but the Mizuho team notes Zurzuvae “only modestly improved from 30mg.”

Overall, “it looks like increasing dose moderately doesn't appear to improve the treatment effect meaningfully and going significantly higher could lead to an undesirably higher sedation rate,” the Mizuho team said, adding that “[a]s such, it’s not clear what Biogen/Sage could do if they choose to run additional clinical trials.”

Still, Sage is forging ahead in PPD. The company expects to launch Zurzuvae in the fourth quarter of 2023, shortly after scheduling as a controlled substance by the U.S. Drug Enforcement Administration, which is expected to happen within 90 days.

The FDA granted Zurzuvae the PPD nod on data from the NEST clinical development program, which included two studies, ROBIN and SKYLARK. Both studies met their primary endpoint, a significant average reduction at Day 15 from baseline on the Hamilton Rating Scale, which is a common measure of depression severity, Sage explained.

In PPD, Zurzuvae will join Sage’s drug Zulresso, which was approved in 2019. Still, that med’s “draconian administration” by infusion should make Zurzuvae the clear preference, the Mizuho team said, calling the drug’s approval as the only oral antidepressant specifically cleared for PPD a “key advantage.”

The analysts also flagged the absence of a black box warning for suicidal thoughts and behavior—which is included in the labels for other drugs—as a potential perk.

Looking ahead to the drug’s launch in the back half of the year, the Mizuho analysts are skeptical. Biogen was ominously absent from Sage’s press release and in turn, “we question Biogen’s interest level in Zurzuvae with only a PPD indication,” they said.

“While Biogen noted to us over the weekend that both Biogen and Sage will be ready to commercialize Zurzuvae in 4Q23, we question the [return of investment] and whether Biogen's interest will change, given the limited sales we expect in PPD,” they added.

Meanwhile, the complete response letter in MDD could take a toll on Sage’s workforce.

“While we believe we are well capitalized, given the impact of the CRL for zuranolone in MDD on our plans, we are currently evaluating resource allocation, including pipeline prioritization and a workforce reorganization with a goal of extending our cash runway,” the company said in its second-quarter earnings release Monday.