Sage Therapeutics has faced a setback in its efforts to develop a treatment for Alzheimer's disease.
The company's experimental drug, dalzanemdor (SAGE-718), did not show a meaningful effect on cognition compared to a placebo in a mid-stage clinical trial involving 174 participants with mild cognitive impairment or mild dementia due to Alzheimer's. As a result, Sage has decided to discontinue further development of the drug for this indication.
This decision has had an impact on the biotechnology sector, with Sage's stock price dropping more than 10% initially. The failure of dalzanemdor is significant considering the complexity of Alzheimer's disease. Sage's CEO expressed disappointment but emphasized the importance of these findings for future research efforts.
The market reaction reflects concerns about Sage's viability, as the company's stock has declined in value over the past year. Analysts have noted that the failure of dalzanemdor removes a potential upside driver for the company. Sage's struggles are indicative of the challenges faced by the pharmaceutical industry in developing treatments for neurodegenerative diseases.
Dalzanemdor takes a different approach by targeting proteins on the outside of nerve cells that bind to glutamate, but it has not shown positive results in previous trials. The company's financial health is also a concern, as it reported a net loss in the first half of the year.
Looking ahead, Sage faces a critical juncture and may need to reevaluate its cost structure and research priorities to remain viable in the market.