Investing in up-and-coming biotech companies like Sage Therapeutics (NASDAQ: SAGE) is a risky business, so smart investors should pay careful attention to how Sage might fit into their portfolio. Sage's mission is to develop drugs that treat neurological disorders, including depression, Huntington's disease, and epilepsy.
With a market cap of $2.2 billion and trailing 12-month revenues of only $8.69 million, Sage is neither a start-up nor a fully established company in the biotech sector. Sage currently has one drug on the market, a postpartum depression therapy called Zulresso. Zulresso is the first therapy anywhere to be indicated for postpartum depression, so Sage has access to an otherwise untouched market.
Given Sage's privileged access to the market for postpartum depression therapies and its plans to produce drugs for other neurological and mood disorders, the company's future may appear to be bright at first glance. Unfortunately for potential investors, the broader picture is more complicated, and it's also less attractive.
Source Fool.com