Sage Therapeutics CEO Jeff Jonas hopes a drug in development for major depressive disorder will be as big as Prozac.
"We are looking at a drug that may offer a distinct side effect and efficacy profile that may be different than anything else available, so we are very optimistic that we could make this first-line therapy," Jonas said on CNBC's "Power Lunch" on Friday.
The biotech company announced Thursday that its new drug, which it calls SAGE-217, had very positive results in a phase 2 trial. The announcement came less than one month after Sage's landmark postpartum depression drug, brexanolone, met its main goal in two late-stage studies.
Shares of the company soared on the news about SAGE-217.
"The optimism is warranted," Jonas said. "We have to do the testing looking at safety and efficacy, but I think that this drug may offer real hope for patients with depression."
The CEO said SAGE-217 takes a different approach to treating major depressive disorder by producing a calming in brain activity. By the close of the 42-day trial, nearly two-thirds of patients had achieved remission, or an elimination of depressive symptoms.
"I've been doing this for 20 years, and I don't think I've ever seen data this dramatic in a mid-stage trial," Jonas said. "The hope for this is a rapidly acting drug, where you can tell patients are getting better in a day or two."
Sage has an exclusive patent for the drug until 2034, giving the company "a lot of time to explore," according to Jonas. And since the National Institute of Mental Health estimates more than 16 million U.S. adults suffer from major depressive disorder, that's a huge potential market for Sage.
"It's an area for significant unmet medical need, so the market potential is quite large," Jonas said.
Shares of Sage were up more than 7 percent at $167.39 late Friday afternoon, and up 124 percent over the past six months.