Two weeks after Supernus Pharmaceuticals unveiled the proposed acquisition of Sage Therapeutics, all 338 employees from the latter company are being canned, according to a Massachusetts Worker Adjustment and Retraining Notification (WARN).
The layoff plan was delivered to authorities Thursday and will take effect on August 22, according to the WARN report. Of the company’s 338 full-time employees, noted in Sage’s first quarter financial regulatory filing, 98 were in R&D and the remaining 240 were engaged in “selling, general and administrative,” functions.
The layoffs came just 11 days after the companies unveiled the acquisition, which is expected to close in the third quarter. Maryland-based Supernus is paying $561 million up front and agreed to a contingent value right (CVR), if a set of milestones are achieved, which would bump up the value of the deal to $795 million.
In a regulatory filing Q&A about the acquisition, Sage addressed the potential for layoffs, writing “in the event of employee redundancies or other decisions impacting specific roles, there will be a comprehensive package of resources provided to employees transitioning out of the organization, including severance and continuation of healthcare benefits.”
But Sage also wrote then that no actions will be taken prior to the close of the transaction.”
The company did not respond immediately to a request for comment.
According to the U.S. Department of Labor, the acquisition of a business alone does not trigger a notice under the WARN Act.
“If the seller’s workforce will have continued employment following the acquisition, notice is not required,” according to the labor department.
The layoffs are an indication that Supernus’ lone goal in the buyout was to gain Sage’s technologies, including Biogen-partnered postpartum depression drug Zurzuvae, which was approved by the FDA in August of 2023. Along with the approval, the U.S. regulator rejected the drug in a much larger indication—major depressive disorder (MDD)—triggering a layoff of 40% of Sage’s staff later in the month, followed by an additional purge of its pipeline and its workers in October of last year.
Thanks in large part to Zurzuvae’s perceived potential to treat MDD, the company was once valued at more than $9 billion.
In the smaller indication, however, Zurzuvae has shown promise, with sales increasing by 21% sequentially from the final quarter of 2024 to the first quarter of this year. The increase equated to $13.8 million in collaboration revenue for Sage in its partnership with Biogen.
Biogen made a buyout bid for Sage early this year, offering $7.22 per share. Supernus eventually got the deal done with an $8.50 per-share offer, which bumps up to $12.00 per share if the CRV conditions are met.