Sage Therapeutics (SAGE) Downgraded to Underperform by RBC Capital Markets, Price Target Set at $4.00
RBC Capital Markets recently downgraded Sage Therapeutics (NASDAQ: SAGE) to Underperform with a new price target of $4.00. The downgrade is based on the firm's analysis of the company's key drug candidate, dalzanemdor, and its effectiveness in treating Huntington's and Alzheimer's diseases. RBC Capital expressed concerns about Sage Therapeutics' financial outlook and profitability if the upcoming phase II readouts do not show significant clinical benefits.
In addition, Sage Therapeutics has terminated its collaboration with Biogen on the SAGE-324 drug molecule after negative results from the Phase 2 KINETIC 2 Study. Despite this, the company continues its partnership with Biogen on Zurzuvae, an FDA-approved oral treatment for postpartum depression.
Several financial firms, including Truist Securities and Piper Sandler, have adjusted their outlooks on Sage Therapeutics, with price targets being reduced. Sage reported $7.4 million in collaboration revenue for Q2 2024, but also posted a net loss of $102.9 million. The company has $647 million in cash, projecting funding until 2026.
InvestingPro Insights show that Sage's stock has taken a hit, with a 6-month price total return of -57.84%. The company is not profitable and is quickly burning through cash. Analysts have revised their earnings downwards, supporting RBC's concerns about Sage's path to profitability.
Overall, investors should be cautious about Sage Therapeutics' near-term prospects, especially regarding the potential performance of dalzanemdor. It's important to consider the company's financial situation and market position before making any investment decisions.