Biogen offers to acquire Sage Therapeutics for US $442 million

USA – Biogen has proposed to acquire the remaining shares of Sage Therapeutics, aiming to take full control of the antidepressant Zurzuvae (zuranolone).

The US $7.22-per-share offer, which represents a 30% premium over Sage’s closing stock price last Friday, is estimated by Reuters to be worth approximately US $442 million.

Biogen already owns 10.2% of Sage, and the companies have had a longstanding partnership, co-marketing Zurzuvae, an FDA-approved treatment for postpartum depression (PPD).

The offer comes at a challenging time for Sage, whose shares have dropped nearly 80% over the past year.

This decline began after the FDA approved Zurzuvae for PPD but not for the broader indication of major depressive disorder (MDD), significantly dampening the drug’s commercial prospects.

The company faced further setbacks in 2024, including failed trials of dalzanemdor in Alzheimer’s, Parkinson’s, and Huntington’s diseases, and Biogen’s decision to exit a partnered program for essential tremor. Sage also abandoned its pursuit of an MDD indication for Zurzuvae.

With the discontinuation of dalzanemdor, Sage’s pipeline is now focused on early-stage programs targeting NMDA and GABA neurotransmitters for conditions like epilepsy and neurodevelopmental disorders.

The company also discontinued its older PPD therapy, Zulresso (brexanolone), which had seen declining sales.

In response to these challenges, Sage implemented significant cost-cutting measures late in 2024, including widespread job cuts and a scaled-back research and development pipeline.

Sage also emphasized that there is no guarantee the proposal will result in a transaction. It described Biogen’s offer as “unsolicited” and “nonbinding” in a statement, noting that its board would carefully evaluate the proposal to determine the best course of action for the company and its shareholders.

Biogen and Sage’s partnership dates back to November 2020, when the two companies agreed to develop and commercialize zuranolone for MDD, PPD, and other psychiatric disorders, along with SAGE-324 for essential tremor and neurological conditions.

At the time, Biogen paid Sage US $875 million upfront and made a US $650 million equity investment in the company.

Sage’s shares, which traded at around US $75 during the deal announcement, briefly peaked at US $91 in early 2021 before plunging into single digits last year.

For Biogen, this acquisition could provide a new revenue stream while strengthening its early-stage pipeline.

The company has faced its own challenges, including a slow rollout of its Alzheimer’s therapy Leqembi (lecanemab), which it co-developed with Eisai.

Biogen’s bid for Sage may be seen as a strategic move to diversify its portfolio and bolster its position in the neuroscience space.

Despite early optimism, Zurzuvae’s commercial performance has been modest due to its limited label, generating US $22 million in sales for Biogen in the third quarter of 2024 and contributing US $11 million to Sage in collaboration revenue.

Following the announcement of Biogen’s offer, Sage’s stock rose from US $5.55 to US $8.11 in pre-market trading, while Biogen’s shares dipped slightly by 2%.