Sage Therapeutics: Hot IPO, Great Start in CNS Print E-mail
By Brian Wilson   
Sunday, 20 July 2014 22:44

Last week, we saw a very successful IPO for Sage Therapeutics (SAGE) - a company that focuses on treating rare diseases that affect the central nervous system. Although the company is still in the relatively early stages of the development cycle, the company has already attained an enterprise valuation of $696 M after investors brought the stock 67% higher last Friday. 

This demonstrated the sheer confidence that the market has regarding this company's prospects despite recent worries of a biotech bubble.

This company's flagship product is a positive allosteric modulator known as SAGE-567, which is in Phase I/II development for a condition known as super-refractory status epilepticus (SRSE). This is a rare but serious and potentially lethal condition where the brain of a patient experiences seizures 24+ hours after anaesthesia. It is also classified as the latest stage of epilepticuses seen after anaesthesia.

Doctors currently treat patients in earlier stages of epileticus with prespecified anti-sezure regimens, but there are few options if the patient reaches the super-refractory state.

Because there have been no real clinical studies performed for SRSE, there is a guaranteed market for any therapy capable of proving its efficacy against SRSE in a trial environment. SAGE-567 is in a position to inherit this market, although this in contingent upon success in human trials.

We have not reviewed the preclinical data produced by SAGE-567, but the company states that the results have been "robust," implying that the drug's mechanism of action looks promising enough to study in humans. We're not sure if preclinical data can justify the company's current price, but we've seen similar enthusiasm with other early-stage companies like Clovis Oncology (CLVS), which did not disappoint with their human data.

With money raised from Sage's IPO, the company should have more than enough to bring us to a point - perhaps in 2015 - when we will have the first round of data for SAGE-567 along with a preclinical drug called SAGE-689 which may also be used for status epilecticus.



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