Here's Why SAGE Therapeutics Inc. Is Surging Today

By Markets Fool.com

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What:It's a great day to be an investor in SAGE Therapeutics . Shares of the clinical-stage biotech are up more than 37% as of 12:00 p.m. EDT after the company reported promising data from an important clinical trial.

So what:SAGE Therapeutics announced top-line results from its phase 2 clinical trial of SAGE-547, which is being tested as a potential treatment for severe postpartum depression, or PPD.

The results from the 21-patient trial showed that SAGE-547 was able to meet its primary goal, which was a statistically significant reduction in the HamiltonRating Scale for Depression, or HAM-D. The HAM-D is a questionnaire that is used by mental health professionals to measure the level of depression in a patient.

Data from the study showed that 70% of the patients who used SAGE-547 were in remission from their depression at the 60-hour mark, which was the primary endpoint of the trial. That result compared very favorably to the 10% observed in the placebo group.What's more, the effect appears to be long-lasting, as a similar rate of remission was able observed during a 30-day follow-up visit.

Dr. Samantha Meltzer-Brody, the primary investigator for the trial, had this to say about the results:

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This is potentially one of the most important clinical findings in the pharmacologic treatment of postpartum depression to date. The rapid onset of action of this drug observed in the trial is unlike anything else available in the field to date. The data show the potential of the drug to provide relief from the debilitating symptoms of PPD, and to markedly decrease suffering in women who are severely affected.

SAGE Therapeutics isn't the only stock that is reacting positively to today's news. Shares ofLigandPharmaceuticals are also in the green today, which makes sense since SAGE licenses Ligand's technology in order to produce SAGE-547. If SAGE-547 does eventually find its way to market, then Ligand Pharmaceuticals isentitled to receive a 3% royalty sales plusadditional milestone payments.

Right now, there are no approved drugs on the market that are designed to specially treat severe postpartum depression. Given that up to 15% of mothers can develop PPD, the opportunity ahead for SAGE-547 looks quite large.

From here, SAGE Therapeutics plans on initiating an expansion phase 2 study of SAGE-547 that willbe designed to test different dosing levels of the drug. The trial will also enroll women with both moderate and severe postpartum depression.

Now what: The data from this trial was about as good as it gets for clinical-stage companies, so it's not hard to understand why its shares are skyrocketing today. After all, PPD is very common disease and it can greatly increase the risk of suicide, so there is a real need for effective treatment options.

Still, it's worth remembering that this data is from a phase 2 clinical trial, so SAGE-547 still has a long road ahead of it before it could bring in revenue. In addition, SAGE-547 requirescontinuous infusion for 60 hours, so the product in its current form might be unattractive to many patients.

SAGE isn't sitting still, though. The company is also moving forward with SAGE-217, which is an oral version of SAGE-547. That might be a far more attractive product candidate for patients and providers to consider.

Today's news is a real win for SAGE Therapeutics, but given that it will be quite some time before SAGE-547 can find its way to market, it's likely that the stock will still face a bumpy ride ahead.

The article Here's Why SAGE Therapeutics Inc. Is Surging Today originally appeared on Fool.com.

Brian Feroldi has no position in any stocks mentioned.Like this article? Follow him onTwitter where he goes by the handle@Longtermmindsetor connect with him on LinkedIn to see more articles like this.The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.