The company's depression drug met its main goal, but there are long-term concerns
The shares of Sage Therapeutics Inc (NASDAQ:SAGE) are down 16.5% to trade at $60.85 at last check, following lackluster Phase 3 test results for the biotechnology company's depression drug, Zuranolone. While the drug, which Sage is creating with Biogen (BIB), met its main goal of alleviating depression symptoms, concerns were raised about its long-term viability,
Today's plummet has SAGE trading at its lowest level since October, though the $60 mark appears to be serving as a floor for the pullback. Previously middling below the $80 level since March, the equity is down 29.8% year-to-date.
Analysts are split on the side of bullish, with eight of the 19 in coverage carrying a tepid "hold" rating, and 11 a "strong buy." Plus, the 12-month consensus price target of $100.65 is a 65.4% premium to current levels.
Meanwhile, short interest makes up 8.2% of the Sage Therapeutics stock's available float. In other words, it would take nearly nine days to buy back these bearish bets, at the security's average pace of trading -- plenty of pent-up buying power.
There is some pessimism in the options pits as well, per SAGE's 50-day put/call volume ratio of 1.31 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands higher than 89% of readings from the past year, showing long puts being picked up at a faster-than-usual rate.