Having witnessed a 90%-plus stock price slide during recent years, Sage Therapeutics’ leadership must decide whether now is the right time to accept a buyout offer.
Biogen has offered to purchase Sage’s outstanding shares for $7.22 each, according to a securities filing from Friday. The proposal values Sage at around $442 million.
A yearslong partner of neuroscience player Sage, Biogen already owns 10.2% of the Cambridge, Massachusetts-based biotech, according to the filing.
In its own press release, Sage called the proposal “unsolicited and “nonbinding.” The company’s board “will carefully review and evaluate the proposal,” the company said in the release, noting that shareholders “do not need to take any action at this time.”
Back in November 2020, Sage and Biogen teamed up to develop and commercialize zuranolone in major depressive disorder (MDD), postpartum depression (PPD) another other psychiatric disorders, as well as SAGE-324 in essential tremor and other neurological disorders. The blockbuster deal featured an upfront payment of $875 million from Biogen and a $650 million equity investment in Sage.
At that time, Sage’s shares were trading at around $75. The biotech's shares climbed to $91 apiece by January 2021 before sliding into the single digits last year.
Several factors have played into the sharp decline, notably including the failure of zuranolone to break into MDD. While the FDA cleared the drug to treat PPD last summer, the agency’s rejection in MDD denied the partners a launch opportunity in a large and lucrative market.
In the wake of the MDD rejection, Sage instituted sizable layoff rounds in August 2023 and October 2024.
Besides the MDD disappointment, Sage’s pipeline drug dalzanemdor flunked a series of midstage trials in 2024. After a series of trail failures in Alzheimer’s disease, Huntington’s disease and Parkinson’s disease, Sage dropped the asset in November.
In addition, Sage and Biogen discontinued SAGE-324 in essential tremor in July after a midstage trial flop.
Now, Sage's pipeline consists of several programs in GABA hypofuction and a candidate in NMDA hypofunction. The company and Biogen continue to work to grow Zurzuvae in PPD as well.
Sage’s stock closed Friday at a price of $5.55 per share, so the Biogen offer represented a 30% premium to Friday’s trading price. After-hours trading Friday sent Sage’s shares to $8.11.