(Reuters) - Drug developer Sage Therapeutics Inc's shares soared as much as 85 percent to a record high on Thursday after its experimental drug to reduce the symptoms of depression succeeded in a mid-stage trial.
Sage's shares were up 73 percent at $159, on track to add about $2.75 billion to the company's market capitalization.
This is Sage's second success in as many months. The company's postpartum depression drug aced two key studies in November, paving the way for it to bring to market the first FDA-approved treatment for the disorder.
Data reported on Thursday showed that the drug, SAGE-217, was statistically significant in reducing symptoms of depression, compared to a placebo.
"If we can substantiate these findings in Phase 3, this could be an important first-line therapeutic option for everybody with depression," Chief Executive Jeff Jonas told Reuters.
Pfizer Inc's Pristiq, Takeda Pharmaceutical Co Ltd and Lundbeck's Brintellix have been approved in the United States for the treatment of adults with major depression.
Alkermes Plc, Eli Lilly and Co and Allergan Plc all have their drugs in late-stage trials for the treatment of depression.
Analysts said Thursday's data backs the drug's mechanism, which is different from other treatments approved by the FDA in the last two decades.
"SAGE-217 would be an important drug as it offers a new mechanism in an area where the vast majority of options generally modulate the same pathways," Leerink Research's Paul Matteis wrote in a client note.
Sage's drug works by selecting and binding together the GABA receptors - which manage the flow of information in the brain - to help put brakes on nerve activity and thereby calming the brain.
Any dysfunction to the receptors can cause a variety of central nervous system (CNS) disorders.
CEO Jonas said the company would not seek to partner with big pharma companies.
"What would be the goal of a big pharma partner besides cash, we can obtain that from the market," Jonas said, adding the biotech was well-positioned to grow into a leading CNS company.
Sage had $134.9 million in cash and cash equivalents as of Sept. 30.
The company's shares had risen 80 percent this year to Wednesday's close.
(Reporting by Akankshita Mukhopadhyay and Divya Grover in Bengaluru; Editing by Shounak Dasgupta and Sriraj Kalluvila)
