What's going on?
You may not have heard of them, but the stock price of Sage Therapeutics jumped 35% on Tuesday after the company reported encouraging results from a trial of a drug it’s developing to treat severe postpartum depression.
What does this mean?
It’s obviously big news for Sage’s shareholders but it’s also, potentially, hugely importantly news for the 10-15% of mothers that suffer from postpartum depression. There are currently no approved treatments specifically developed for postpartum depression, and so a specific drug would likely be in high demand (and be a financial success for the company that’s able to develop it).
Why should I care?
For markets: This is some good news amidst a sea of pain for biotech stocks. The biotech sector has struggled since Hillary Clinton laid out a strategy last year to limit the rising cost of pharmaceutical drugs. Her plan is part of a general backlash against companies that have drastically raised prices on drugs used to treat rare diseases. But Sage appears to be quite a different company: it actually develops its own drugs (rather than simply purchasing them from other developers before raising their prices, as others routinely did). Nevertheless, its stock had fallen more than 40% this year prior to Tuesday’s news.
For you personally: The drug is still a long way from getting approval. The trial investigator called it “potentially one of the most important clinical findings in the pharmacologic treatment of postpartum depressions to date.” But the success of this 21-person trial only means that further tests will take place next year – and so, there are still a number of hurdles to clear before investors get confirmation of its success and the drug becomes available to patients.