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Sage Therapeutics SAGE announced that its board of directors has rejected the unsolicited, non-binding proposal offer from drug giant Biogen BIIB to acquire the remaining shares of SAGE.
Per Sage Therapeutics, the BIIB offer significantly undervalues the company and is not in the best interest of shareholders.
SAGE’s board of directors has now started exploring strategic alternatives and evaluating other options to maximize its shareholders’ value.
Shares of SAGE were up 4.8% on Jan. 27 following the news announcement.
In the past year, the stock has plunged 72% compared with the industry’s decline of 12.4%.
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BIIB's Recent Offer to Acquire SAGE
Earlier this month, Biogen made an acquisition offer to buy the remaining shares of SAGE that it does not already own for $7.22 per share. The offer price represented a premium of 30% on Sage Therapeutics’ closing price of $5.55 on Jan. 10.
Biogen currently owns a 10.2% stake in SAGE, per a SEC filing by the company.
Sage Therapeutics and Biogen have a collaboration deal for the commercialization of Zurzuvae, which was approved for treating postpartum depression (PPD) in August 2023. The drug was commercially launched in December 2023 and has witnessed an encouraging uptake so far.
SAGE remains focused on establishing Zurzuvae as the standard of care for women with PPD.
SAGE and BIIB equally share profits and losses for the commercialization of Zurzuvae in the United States. In outside U.S. markets, Biogen records product sales (excluding Japan, Taiwan, and South Korea where Shionogi holds the rights) and pays royalties to Sage Therapeutics.
The potential acquisition of SAGE could have given BIIB sole ownership of Zurzuvae.
SAGE's Recent Pipeline Setbacks
Sage Therapeutics has faced several pipeline setbacks in recent times.
Owing to the string of pipeline setbacks related to the development of its neuropsychiatric candidate, dalzanemdor (formerly SAGE-718), the company decided to stop the development of the candidate for all indications in November 2024.
Several phase II studies, which evaluated dalzanemdor for treating cognitive impairment associated with Huntington’s Disease, mild cognitive impairment (MCI) and mild dementia in Alzheimer’s Disease and MCI associated with Parkinson’s disease, have failed to meet the primary endpoints.
In September 2024, Biogen terminated its rights under the collaboration and license agreement with SAGE related to the development of neurology candidate, SAGE-324 for treating essential tremor (ET). A phase II study on SAGE-324 for the chronic treatment of ET failed in July 2024.