07:46 AM EDT, 10/04/2024 (MT Newswires) -- Sage Therapeutics ( SAGE ) faces a high-risk outlook as it awaits the year-end phase 2 readout for its Huntington's disease treatment, dalzanemdor, RBC Capital Markets said in a report Friday.

RBC's analysis suggests dalzanemdor is unlikely to show clear, clinically meaningful effects in Huntington's or Alzheimer's. Without success, long-term profitability will be difficult, even if Zurzuvae stays "on its current reasonable initial launch trajectory" for postpartum depression, RBC analysts wrote.

Sage's future largely hinges on the DIMENSION trial, but concerns over previous data, study endpoints and potential safety risks lower the probability of positive results, according to the report.

If the data disappoints, Sage could face significant challenges in maintaining profitability, even with cost-cutting measures. RBC sees Sage's limited pipeline and high costs as unsustainable without major sales growth from Zurzuvae.

RBC downgraded the stock to underperform from sector perform and also lowered the price target to $4 from $10.

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