The shares of Sage Therapeutics, Inc. (NASDAQ: SAGE) increased significantly after the firm acknowledged receiving a non-binding buyout proposal from Biogen Inc. Following the news, SAGE’s stock price jumped 46.11% in after-hours trading, reaching $8.11 per share.
The Proposal and Strategic Offer of Biogen
An unsolicited proposal has been made by Biogen, which already owns 10.2% of Sage, to buy all of Sage Therapeutics’ outstanding shares that Biogen does not currently control. The offer increases the total value of the proposed purchase to over $441.7 million at a price of $7.22 per share, which is 30% more than the previous closing price.
Biogen’s suggestion comes as the company has been battling problems with the cost, efficacy, and side effects of Leqembi, its Alzheimer’s drug. In contrast, Sage is focusing on the commercialization of Zurzuvae, a drug developed in partnership with Biogen to treat postpartum depression (PPD).
Sage’s Refocused Strategy and Priorities
Sage Therapeutics has made several strategic decisions recently, including halting the development of its drug dalzanemdor after multiple clinical trial failures. The company announced that it will now concentrate its efforts on Zurzuvae, which has shown promise as a once-daily oral treatment for postpartum depression.
Barry Greene, CEO of Sage, is expected to highlight these efforts at the 43rd Annual J.P. Morgan Healthcare Conference in San Francisco, where he will discuss the company’s vision for 2025, its growth plans for Zurzuvae, and its revised approach to research and development.
Financial Outlook and Cost-Cutting Measures
Moving ahead, Sage expects general and administrative (G&A) and research and development (R&D) costs to be significantly reduced in 2025. The business anticipates that its current cash reserves and partnership income will sustain operations through the middle of 2027.
Despite the joint commercialization efforts for Zurzuvae with Biogen, Sage Therapeutics expects overall operating expenses to decrease due to strategic prioritization and cost savings from a reorganization initiated in 2024.