A pair of Cambridge drug makers Monday postponed setting a price for their newly approved pill to treat postpartum depression as they weighed the financial impact of a US regulatory decision to reject the pill’s use for the more widespread condition of major depressive disorder.
Shares of Sage Therapeutics lost more than half their value Monday on news that the Food and Drug Administration balked at approving wider use of the fast-acting oral antidepressant. Sage’s stock plunged $19.35 to $16.75 a share, a decline of 53.6 percent on the Nasdaq exchange.
Sage said it was contemplating a workforce reorganization, signaling it might have to lay off workers in the aftermath of the split decision.
The company is marketing Zurzuvae (pronounced zoor-zoo-vay) along with its business partner, Biogen. Shares of Biogen, a much larger drug maker, ticked up 0.8 percent to close at $271.23 on Monday. Some analysts suggested Biogen may choose not to underwrite additional clinical trials of the pill to treat major depressive disorder.
“There’s a lot else going on at Biogen,” said Brian Abrahams, biotech analyst for financial services company RBC Capital Markets, citing, among other things, its recently approved Alzheimer’s therapy. By contrast, Zurzuvae “is the primary growth driver for Sage,” he said.
Biogen last month said it plans to pare about 1,000 jobs, or 11 percent of its global workforce. It also paid $6.5 billion to acquire Reata Pharmaceuticals, a Texas-based maker of drugs to treat rare diseases.
Sage’s chief business officer Chris Benecchi told investors Monday that his company and Biogen plan to disclose how much they’ll charge for the depression pill closer to its launch in the fourth quarter of this year. Some analysts had anticipated a pricetag announcement Monday.
Analysts said approval of the pill for the broader depression indication would have made it a “blockbuster” drug, ringing up sales topping $1 billion a year. Selling it for postpartum depression alone will bring in less than half as much revenue, depending on how much the drug makers charge. That could prompt the companies to set a higher price.
Abrahams, in a note to investors Monday, said he expected Zurzuvae to fetch a premium price of about $11,000 per patient for a two-week treatment course for postpartum depression. That would bring in annual revenue of about $300 million to Sage and Biogen.
Zurzuvae was approved by the FDA on Friday for postpartum depression, a condition affecting an estimated 500,000 women in the United States. But fewer than half of women who suffer from the condition are diagnosed, limiting the market for the new drug, according to analysts.
Sage chief executive Barry Greene hailed Zurzuvae, which is meant to be taken orally for 14 days, as a breakthrough for women suffering from postpartum depression. “Hundreds of thousands of women have been waiting and hoping for this moment,” Greene said on a call with stock analysts Monday. “Today there is a new source of hope.”
But the companies’ price-setting calculation was complicated by a so-called complete response letter from the FDA received late Friday night in which the regulators said the drug makers didn’t provide substantial evidence that the pill would be effective in treating major depressive disorder, which affects a much larger patient population.
That setback came as a financial blow for Sage and Biogen. “We are devastated for patients and deeply disappointed with the FDA’s position,” Greene said Monday. He said his company disagreed with the FDA’s decision to reject the pill’s use for major depressive disorder.
FDA officials made it clear that an additional clinical study or studies will be needed for them to evaluate Zurzuvae in the broader depression market. That would require a substantial financial investment from Sage and Biogen, which would have to be negotiated between the partners.
The companies said they are reviewing the feedback and will seek clarity from FDA officials before determining their next steps.
In a note to investors over the weekend, biotech analyst Paul Matteis at the investment banking firm Stifel wrote “we believe that Sage’s stock largely hinges on [Zurzuvae] pricing” for postpartum depression and on whether Sage and Biogen can agree to mount additional studies of the pill in major depressive disorder.
Any new clinical trials among the larger patient population would have to address safety risks the FDA identified on its label for Zurzuvae as a treatment for postpartum depression. The label includes a so-called boxed warning saying the pill can cause driving to be impaired, advising patients not to drive until 12 hours after taking it each day.
The label also said dizziness, fatigue, diarrhea, and urinary tract infection were more common in postpartum women who were given Zurzuvae in clinical trials than those who were given a placebo.
Robert Weisman can be reached at robert.weisman@globe.com.