Sage Theraputic RG (SAGE) Message Board

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Biotech / Medical : Sage Theraputic RG (SAGE)

SAGE 8.680

0.0%

Jul 31 5:00 PM EST

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From: Lynn	6/12/2018 10:32:54 AM
	of 16

Morgan Stanley [12 June 2018]: SAGE Therapeutics Inc - SAGE-217 PhIII Plan A Positive Stock Rating Overweight Industry View In-Line Price target $225.00 FDA meeting yields positive outcome for SAGE-217. We see three key takeaways: (1) Mgt. has been able to advance SAGE-217 with only one additional study, a new placebo controlled study in MDD; (2) The on-going PPD study is now a pivotal study and will read-out in 4Q18; and (3) The prior PhII MDD study has also been designated as pivotal. Mgt. plans to start the final PhIII study in MDD in 2H18 using two weeks of treatment at either 20mg or 30mg with four weeks of follow-up. Importantly, all studies must be positive for the PPD and MDD studies to be designated as pivotal. Further, mgt. must also complete a long-term follow-up study with 300 patients followed for 6 months and 100 patients followed for 1 year. Based on these requirements, we would expect a filing potentially as early as YE19 (though more likely in 2020). We await further information from mgt.'s 8:00am call, but see this as a positive for SAGE and expect SAGE up ~5% on today's news. Valuation methodology and risks SAGE: Our $225 PT is derived from a DCF that uses a 10% discount rate and a 1.0% terminal growth rate beyond 2030E to value Sage's other neurology programs. We assume brexanolone is launched in 2019 for PPD. SAGE-217 provides bulk of valuation, with launches for MDD and bipoloar in 2021 and for insomnia in 2022. Risks to our price target include failure of brexanolone or SAGE-217 to receive regulatory approval, limited uptake of SAGE-217 due to generic competition and unexpected safety risks for SAGE-217.

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