NEW YORK (TheStreet) -- Shares of Sage Therapeutics (SAGE) - Get Report are dipping by 14.58% to $28.53 on heavy trading volume Wednesday afternoon, after Kerrisdale Capital Management said it had shorted the stock and that the biopharmaceutical company's experimental drug would likely fail an important late stage study.

Sage's lead product candidate SAGE-547 is in clinical development for the treatment of super refractory status epilepticus (SRSE), a life-threatening condition where the brain is in a state of persistent seizure.

New York-based Kerrisdale said the drug "is little more than a Band-Aid, achieving, at best, a temporary reduction in brain activity - very similar to many other treatments that doctors already use," in a report released today.

The hedge fund added that the treatment "leaves the underlying causes of SRSE untouched," and will fail to outperform a placebo to a statistically significant degree in a phase 3 study.

"As a result, Sage is worth little more than its cash balance, 70% below the current stock price," Kerrisdale said.

The Cambridge, MA-based company is engaged in developing and commercializing medicines to treat life-threatening and rare central nervous system disorders.

About 3.69 million of the company's shares changed hands so far today, well above its average volume of 498,764 shares per day.

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