SAGE Stock Gets Boost on FDA Approval

One analyst is calling the treatment a "niche product," however

Lillian Currens
Mar 20, 2019 at 9:37 AM
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The shares of SAGE Therapeutics Inc (NASDAQ:SAGE) are up 2% at $159.20, after its postpartum depression (PPD) drug, Zulresso, was approved by the Food and Drug Administration (FDA). Some experts' negative comments could be paring back further gains, including Leerink analyst Marc Goodman, who called the new treatment a "niche product" and expects sales to come in well below the current consensus estimate.

Other analysts have chimed in on SAGE, too. SunTrust Robinson lifted its target price to $210 from $203, and Stifel slashed it to $232 from $241. Despite the mixed reviews, sentiment surrounding the stock has been generally optimistic, with 10 "strong buy" ratings, one "buy," and a single "strong sell." What's more, the consensus 12-month target price of $200.44 covers territory never before charted by the equity, and is at a roughly 25% premium to current levels. 

SAGE stock has been grinding higher since its Jan. 7 bull gap. The equity has found its footing atop the 30-day moving average but some pressure from the $160 area has kept it just below its year-over-year breakeven mark. Overall, the stock is up 78% year-to-date. 

A short squeeze could be in the cards for SAGE. While short interest fell slightly the last reporting period, the 4.21 million shares sold short still represent a solid 11.3% of the stock's available float. At the equity's average daily trading volume, it would take more than five sessions to buy back these bearish bets. 


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