Sage Therapeutics has rejected Biogen’s $469m takeover offer, with its board of directors unanimously concluding that the bid “significantly undervalues” the company.

Made earlier this year, the proposal offered $7.22 per share, a 30% premium on Sage’s share price at the time. The company responded by suing Biogen to “enforce a standstill agreement” between the two companies. Biogen currently co-markets Sage’s postpartum depression (PPD) drug Zurzuvae (zuranolone).

Despite rejecting the offer, Sage’s board has stated it will consider “strategic alternatives” to maximise shareholder value. This review could result in a combination, sale, or other transaction. The company has not provided a timeline for this process and emphasised that it may not lead to any deal, and “remains focused on establishing Zurzuvae as the standard of care for women with PPD”.

Erela Dana, an analyst at GlobalData, highlighted Biogen’s recent shift in R&D strategy, moving away from internal development and towards mergers and acquisitions (M&As): “Given the previous collaboration agreements between Sage and Biogen for assets that treat indications such as depression, I believe they might have seen Sage as a company that has a good complimentary pipeline and potentially also an R&D and commercial structure that fits well with the ethos of Biogen.”

However, she found Sage’s strong rejection of the unsolicited offer noteworthy, suggesting it aligns with a broader strategy of maintaining multiple partnerships with large pharmaceutical companies across its pipeline, which “might be a more lucrative longer-term option”.

GlobalData is the parent company of Pharmaceutical Technology.

The proposed acquisition comes amid challenges for Sage, including a 70% drop in its market value over last year. The setbacks include disappointing clinical trial results, regulatory challenges, and substantial layoffs. Although Zurzuvae gained US Food and Drug Administration (FDA) approval in August 2023 as the first oral treatment for PPD, approval was limited to this indication.

Plans to develop the drug for major depressive disorder (MDD) were derailed when the FDA issued a complete response letter (CRL) requiring additional studies to demonstrate efficacy. By late last year, Sage abandoned efforts to pursue the MDD indication for Zurzuvae entirely.

Other therapies in Sage’s pipeline have also encountered difficulties. Its small molecule therapy dalzanemdor (SAGE-718) failed to meet its primary and secondary endpoints in a Huntington’s disease trial (NCT05107128), leading the company to halt further development.

In October 2024, Sage announced a restructuring plan to address its financial and strategic challenges. This included laying off 165 employees – representing 55% of its R&D staff and 33% of its total workforce – to extend its cash reserves and focus on Zurzuvae’s launch. 

William Blair analysts have characterised Biogen’s offer as a “financially prudent move”, given the shared responsibilities and costs associated with Zurzuvae’s development. They noted that while the acquisition is unlikely to drive growth in Biogen shares, it could help maximise the value of Zurzuvae’s franchise. 

According to GlobalData’s Pharma Intelligence Center, Zurzuvae is forecast to generate $656m in sales by 2030.