Sage’s Seek for Lifeline Ran Into Defiant Biogen CEO

After the FDA rejected one out of two indications for the melancholy drug Zurzuvae in the summertime of 2023, Sage Therapeutics launched into a whirlwind tour of the biotech fundraising universe to discover a accomplice or different transaction to maintain afloat.

In line with regulatory paperwork posted Wednesday, that meant assembly with 43 totally different events all through 2024 and into 2025. We now know that the results of that tour was the as much as $795 million acquisition by Supernus Pharma, inked final month.

The main focus of the deal was Zurzuvae, which obtained an FDA nod for post-partum melancholy in August 2023, however missed out on the bigger indication of main depressive dysfunction which might have opened up a a lot wider market. Sage had lengthy been partnered with Biogen on the drug.

The regulatory paperwork present how the Sage-Biogen relationship broke down after Zurzuvae’s combined approval.

Thanks However No Thanks

After the FDA rejection, and the triple failure of main pipeline candidate dalzanemdor, Sage was left looking for a path ahead on the finish of December 2024. The board was pursuing a royalty financing with an unnamed get together, which might have supplied as a lot as $200 million in capital.

Throughout a recurrently scheduled assembly to debate Zurzuvae commercialization efforts that month, Biogen CEO Chris Viehbacher raised the potential for an acquisition with Sage CEO Barry Greene.

At a board assembly later that month, Sage’s executives decided {that a} royalty transaction was prudent. However to take action, they would want Biogen’s cooperation. Days later, Viehbacher returned with a extra concrete supply to accumulate Sage on the present inventory worth plus a 30% premium. Greene declined the supply.

In early January, the royalty transaction was advancing. Viehbacher reached out once more, this time warning Greene that Biogen was about to place in an unsolicited supply to purchase his firm. Greene indicated that he believed public disclosure of this intention would violate the businesses’ standstill provision from Biogen’s unique inventory buy settlement.

Viehbacher stood his floor. The supply was coming.

On January 10, Biogen publicly supplied to purchase Sage for $7.22 per share, which was a 30% premium to the inventory worth that day of $5.55. The deal valued Sage at about $470 million. Sage acknowledged the supply in a press launch.

Sage formally filed a lawsuit in opposition to Biogen on January 16, arguing that the general public disclosure was a violation of their standstill settlement. The board nonetheless agreed to contemplate Biogen’s supply.

Greene and his deputies headed into the J.P. Morgan Healthcare Convention just a few days later to fulfill with buyers. Many inspired them to just accept the Biogen supply however push for extra. Others instructed that Sage ought to search to reacquire the rights to Zurzuvae, which had lengthy been a hope of the Sage crew.

On January 27, Sage introduced a plan to discover strategic options, together with consideration of a sale or different transaction. The board additionally at the moment formally rejected Biogen’s supply. Conferences with potential consumers adopted, together with Supernus, who had lengthy been in contact with Sage a few potential partnership or acquisition.

Throughout this era, shareholders put strain on Sage’s administration to do one thing to cease the money burn and enter into some kind of deal—and rapidly. They instructed that Sage drop its R&D pipeline, amongst different choices.

A courtroom in late January sided with Sage within the standstill litigation, stopping Biogen from issuing any additional public affords. They later settled the litigation.

Greene and Viehbacher met once more in February for his or her recurrently scheduled assembly, throughout which Viehbacher indicated that Biogen wouldn’t put ahead one other bid.

Within the months that adopted, Sage’s board and executives met with a number of events and regarded myriad partnering options. They thought of chopping up the corporate and spinning out the pipeline; handing Zurzuvae rights to Biogen; promoting the whole firm and extra.

Supernus was one of many main corporations within the discussions and finally received out on June 13 with a proposal of $8.50 per share in money, or $561 million, at closing. A contingent worth proper put up one other $3.50 per share, or $234 million, payable upon sure gross sales and industrial milestones. The deal was valued at as much as $12 per share in money or $795 million.

Analysts that day referred to as the Supernus acquisition a “good finish” for Sage, however an “unremarkable final result” for an entity that was as soon as some of the thrilling corporations engaged on central nervous system issues.

Whereas administration had been maneuvering in personal for greater than two years, workers at Sage had a extra abrupt finish; final week, all 338 remaining employees had been despatched out the door.