Biogen, Sage face challenges as FDA rejects pill for clinical depression

(Reuters) -The approval of Biogen and Sage Therapeutics’ depression pill for a smaller-than-expected patient cohort has fueled concerns over its growth prospects, analysts said on Monday.

The U.S. Food and Drug Administration (FDA) on Friday approved the pill, Zurzuvae, as the first oral drug for postpartum depression (PPD), while simultaneously rejecting it as a treatment for major depressive disorder (MDD).

Shares of Sage Therapeutics crashed 50%, while Biogen fell 2%, as analysts said the market for a PPD drug is expected to be much smaller than that for MDD, or clinical depression.

PDD is a common complication that impacts one in eight women during and after pregnancy, and affects their ability to return to normal functioning.

Zurzuvae, which was shown to relieve PDD symptoms in just days in clinical studies, is required to be given for two weeks, while the only other existing treatment warrants continuous intravenous infusion for 60 hours. Other common anti-depressants take several weeks to work.

While PDD treatments are an important societal need, given that the condition is frequently overlooked, it represents a small market, according to Biogen.

PDD “is going to be a tough indication to build a big market out of, even at a high premium price,” Baird analyst Brian Skorney said.

The FDA said that additional studies might be required to support the drug’s approval for major depressive disorder.

Biogen is unlikely to “quickly move forward on another late-stage study for MDD”, given its focus on saving costs and job cuts, Jefferies analyst Michael Yee said.

Zurzuvae’s use as a clinical depression treatment represents a more than $1 billion sales opportunity compared with $250 million to $500 million potential for postpartum depression, Yee added.

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