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Dive Brief:
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Sage Therapeutics’ board of directors has turned back partner Biogen’s opportunitistic attempt at a takeover, unanimously rejecting a $469 million offer from Biogen it said “significantly undervalues” the company.
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Earlier this month, Biogen proposed to buy Sage for $7.22 per share, which represented about a 30% premium to Sage’s share price at the time. Sage sued in response to enforce a “standstill” agreement with Biogen, which co-markets Sage’s postpartum depression drug Zurzuvae and owns about 10% of the company.
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While Sage’s board doesn’t view Biogen’s bid favorably, it will look into “strategic alternativies,” a process that could involve a combination, sale or other transaction that can “maximize value for shareholders.”
Dive Insight:
Analysts viewed Biogen’s offer as a “cold and calculated” move to consolidate control of Zurzuvae, which is on track to earn around $100 million in annual sales. The companies currently split profits.
Zurzuvae is essentially Sage’s only product, as it recently discontinued sales of an earlier postpartum drug called Zulresso. The company’s pipeline has failed to deliver, resulting in a string of setbacks for potential treatments of Huntington’s disease, tremor, Parkinson’s and Alzheimer’s.
Sage has laid off staff and shelved drug research in response. Most recently, the company cut 165 jobs and parted ways with several senior executives. Shares in the company have lost more than 70% of their value over the past year.
While Sage is in a vulnerable spot, the company’s board argues Biogen’s offer “is not in the best interest of shareholders.”
The board hasn’t set a timeline for its review, which it said may not ultimately yield a transaction. While the review is ongoing, the company “remains focused on the goal of establishing Zurzuvae as the standard of care for women with PPD.”
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