Sage Therapeutics scraps plans for Parkinson's drug after mid-stage failure

By Mariam Sunny

(Reuters) -Sage Therapeutics said on Wednesday it would stop working on its experimental drug for Parkinson's disease after the treatment failed a mid-stage study, sending the company's shares to a record low in morning trading.

The failure is the latest setback for Sage Therapeutics after it and partner Biogen's pill, Zurzuvae, won U.S. approval for treating postpartum depression, but was rejected for clinical depression, which is a much larger market, forcing the company to cut about 40% of its workforce.

Sage said on Wednesday that the drug, dalzanemdor, did not show statistically significant differences in patients with mild cognitive impairment due to Parkinson's, compared with a placebo, based on a test that measures cognitive ability.

Dalzanemdor is being tested to treat other diseases associated with cognitive impairment, including Alzheimer's and Huntington's disease.

These results are "not necessarily predictive" of the results in the other ongoing studies for dalzanemdor, Chief Medical Officer Laura Gault said on a conference call with analysts.

However, analysts believe that the data could negatively impact confidence in subsequent trials for the drug.

"With today's dalzanemdor failure in Parkinson's disease, we are not altogether surprised by the stock move, considering the lack of any efficacy signals in the trial that may have perpetuated hopes in other indications," RBC capital markets analyst Brian Abrahams wrote in a note.

Parkinson's disease, a movement disorder of the nervous system which causes progressive brain damage, affects about 1 million people in the United States.

The study, which enrolled 86 patients, had the drug showing no difference from placebo on secondary goals of treatment-related adverse events, according to Sage. Most of these safety events were mild-to-moderate, it said.

Shares of Sage tumbled about 22% to $12.20.

(Reporting by Anil D'Silva)