Baird predicts steady growth for SAGE Therapeutics at $15 target

Investing.com - Baird Equity Research has initiated coverage of SAGE Therapeutics Inc (NASDAQ:SAGE), assigning it a neutral rating with a price target of $15.

Following the launch of Zurzuvae, SAGE's treatment for postpartum depression (PPD (NASDAQ:PPD)), the research firm is predicting a gradual increase in sales.

The analysts noted "We project Zurzuvae sales reaching $262M in 2029, of which $131M is recognized by Sage, given the 50/50 partnership with Biogen (NASDAQ:BIIB)."

The research note also assigns a 20% probability of success to SAGE's dalzanemdor, a potential treatment for Huntington's disease, and SAGE-324, under investigation for essential tremor.

Zurzuvae's sales are anticipated to constitute approximately 0.5% of all US births, treating an estimated 16% of US women receiving pharmacological treatment for PPD. This projection is based on a net price of around $14,000. Sales outside the US are seen as potential upside to these estimates.

Several factors contribute to the projected uptake of Zurzuvae. Early indications suggest that insurance coverage for the treatment is relatively unrestricted. Obstetricians and gynecologists, who traditionally have shown reluctance in prescribing SSRIs, may be more open to prescribing Zurzuvae. Additionally, Zurzuvae's ability to complement existing therapies could ensure its continued use, even among healthcare professionals who prefer SSRIs as a first-line treatment.

However, Baird also identifies a few factors that might limit Zurzuvae's use. These include a black box warning against operating vehicles for at least 12 hours after each daily dose during the 14-day therapy, potential sleepiness, theoretical risks associated with breastfeeding while on the medication, and the requirement to take Zurzuvae with a fatty meal.

As for SAGE-324, a potential treatment for essential tremor, Baird assigns it a 20% probability of success. The outlook for SAGE-324 might be influenced by the phase 2b results from competitor JAZZ's suvecaltamide, expected in June.

Similarly, dalzanemdor, being developed for Huntington's disease, also receives a 20% probability of success. Baird considers the drug's mechanism plausible, given the observed cognitive function improvement in healthy volunteers challenged with ketamine. However, the research firm remains cautious about the applicability of these findings to other diseases like Huntington's disease and Alzheimer's disease, especially in light of the recent phase 2 failure in Parkinson's disease.