Biogen and Sage Therapeutics Halt Development of Depression Drug

Biogen and Sage Therapeutics have decided to cease further development of their drug, Zurzuvae, as a treatment for major depressive disorder, following the FDA's rejection of the therapy for this condition last year. The FDA had requested additional evidence of efficacy through further clinical trials. In its third-quarter financial report for 2024, Biogen cited the significant investment and time required for additional studies as the reason for discontinuing the development.

Moving forward, the companies will concentrate their efforts on commercializing Zurzuvae for postpartum depression, a condition for which it received approval last year. However, the market for postpartum depression is considerably smaller than that for major depressive disorder, suggesting that Zurzuvae may not achieve the high sales once anticipated.

With this strategic shift, Sage Therapeutics has decided to discontinue Zulresso, a drug that became the first FDA-approved treatment for postpartum depression in 2019. Zulresso’s 60-hour infusion regimen posed significant challenges for market adoption. In contrast, Zurzuvae is a more convenient option, taken as a once-daily pill for 14 days. For the nine months ending September 30, Sage reported that Zulresso generated $3.1 million in revenue, a 63% decline compared to the same period in 2023. Zulresso will remain commercially available until December 31.

The partnership between Biogen and Sage began in 2020, with Biogen investing $1.5 billion upfront to initiate the research and development alliance focused on depression and movement disorders. However, the results have been underwhelming. In addition to Zurzuvae’s rejection for major depressive disorder, the collaboration on the movement disorders program SAGE-324 has also ended. In July, the companies announced that this oral drug failed a Phase 2 trial for essential tremor. Biogen issued a termination notice for SAGE-324 to Sage last month, and the termination will be effective in February. Sage will then assume full responsibility for the program and plans to explore other potential uses for the drug.

Marc Goodman, an analyst with Leerink Partners, noted in a communication to investors that the discontinuation of Zurzuvae's development for major depressive disorder was anticipated. Leerink projects that the drug could achieve peak sales of $200 million to $300 million in the postpartum depression market. However, Goodman mentioned that physicians are skeptical about a significant change in treatment approach, and the black box warning on Zurzuvae’s label could further limit its use.

Sage does have other programs in its development pipeline but will operate with a reduced workforce. The company announced a business restructuring in its quarterly report to strengthen its financial position and focus on the ongoing launch of Zurzuvae for postpartum depression. As part of the restructuring, Sage plans to reduce its workforce by about 33%. The company expects that these measures will provide sufficient capital to support operations through 2026.