Shares of Sage Therapeutics (SAGE) surged 6.88% in after-hours trading on Monday, despite the biopharmaceutical company reporting a wider loss for the third quarter of 2024 compared to analysts' expectations.

The late rally came as Sage provided an update on its key depression drug Zurzuvae, which is marketed in partnership with Biogen. Zurzuvae sales brought in $11 million in collaboration revenue for Sage during Q3, up 49% sequentially. The company said around 2,000 prescriptions for the oral postpartum depression treatment were shipped and delivered, marking a 40% increase from the previous quarter.

However, Sage and Biogen announced they will stop further development of Zurzuvae for major depressive disorder in the U.S. after the FDA recommended conducting additional clinical studies, following a Complete Response Letter issued last year. This decision, coupled with the winding down of Sage's older depression drug Zulresso, dampened investor sentiment and likely contributed to the initial after-hours stock decline.