After receiving and considering an "unsolicited" buyout offer from partner Biogen, Sage Therapeutics is kicking the tires on a range of strategic options.
However, the company's board of directors has unanimously rejected the $469 million buyout proposal that Biogen floated earlier this month. Sage's board concluded the proposal "significantly undervalues" the company and is “not in the best interest of shareholders," Sage announced in a Monday press release.
Now, the Massachusetts-based drugmaker is looking to explore a “broad range” of options to maximize value for shareholders, including a potential strategic transaction, a business combination or a sale.
Earlier this month, Biogen offered to purchase Sage’s outstanding shares for an equity value of about $469 million. The drugmaker already owns 10.2% of Sage through a collaboration agreement the partners inked back in 2020.
Considering Sage’s some $569 million in cash and cash equivalents at the end of September and the “blockbuster-plus” potential it sees for postpartum depression (PPD) drug Zurzuvae, Sage seemed “unlikely to accept” the offer, Mizuho analyst Uy Ear said in an investor note after speaking with management.
Sage responded to the proposal with a lawsuit seeking a “temporary restraining order to preserve our rights and enforce the standstill provision previously agreed to with Biogen,” a Sage spokesperson confirmed in a statement to Fierce Pharma last week. In the companies' original pact, Biogen agreed not to acquire securities of Sage or seek a merger between the parties.
The two companies have been involved since 2020, when Biogen signed on to jointly develop and commercialize Sage’s zuranolone and another pipeline prospect. Since then, Sage has weathered numerous pipeline setbacks, but zuranolone has secured FDA approval to treat PPD.
Despite that approval, the FDA simultaneously rejected the drug in major depressive disorder (MDD), a much larger indication with a bigger market opportunity.
Since the MDD rejection, Sage has initiated two rounds of sizable layoffs and retired its PPD intravenous injection Zulresso to save costs and focus on Zurzuvae and its other pipeline efforts. As of 2024’s third quarter, the company expects its existing cash and anticipated revenues to fund operations into 2026.