After rebuffing Biogen, Sage pairs off with Supernus

Sage Therapeutics has agreed to be acquired by Supernus Pharma in a deal valued at around $571 million, bringing together two companies working on central nervous system therapies that have suffered recent setbacks.

The terms include an upfront payment of $8.50 per share for Sage, giving Supernus rights to its FDA-approved post-partum depression (PPD) therapy, Zurzuvae (zuranolone), with another $3.50 on offer if certain sales and commercial milestones are met, which would raise the value of the deal to $795 million.

The agreement comes after Sage filed a lawsuit to block a $469 million takeover from Biogen, its longstanding partner for Zurzuvae, saying the offer significantly undervalued its business.

That offer was seen as opportunistic, given that Sage's share price has lost more than 90% of its value over the last couple of years due to a string of regulatory and pipeline setbacks including the FDA's decision not to approve Zurzuvae in the much larger major depressive disorder (MDD) indication and multiple trial failures for dalzanemdor in neurodegenerative diseases.

Supernus has had some challenges of its own of late, including less-than-stellar data from a phase 2b trial of treatment-resistant depression candidate SPN-820, although it recently claimed FDA approval – at the fourth attempt – for Parkinson's disease therapy Onapgo (apomorphine hydrochloride infusion), which is delivered via a subcutaneous pump device.

The company also sells Qelbree (viloxazine) for attention-deficit hyperactivity disorder (ADHD) and oral Parkinson's therapy Gocovri (amantadine), and reported first-quarter sales of nearly $150 million.

Supernus' chief executive, Jack Khattar, said that combining with Sage "augments our growth profile by adding a significant fourth growth product to our portfolio and further diversifies our sources of future growth."

Zurzuvae sales reached just under $14 million in the first three months of this year, and Supernus will make additional payments to Sage shareholders in the form of contingent value rights (CVR) worth a dollar apiece if annual sales going to Supernus top $250 million in the US by 2027 and $300 million by 2028.

Hitting US sales of $375 million by 2030 will earn Sage's investors another $1, with the final $0.50 CVR tied to the achievement of approval of Zurzuvae in Japan before 30th June next year. Under the terms of its alliance with Biogen, Sage currently gets 50% of net Zurzuvae revenues.

Sage's pipeline also includes SAGE-319 for behavioural symptoms associated with neurodevelopmental disorders in phase 1, two preclinical programmes for neurodevelopmental disorders, and SAGE-324, a potential treatment for seizures associated with developmental and epileptic encephalopathies that is ready for phase 2 but currently under evaluation by management.

Supernus, meanwhile, is also developing SPN-817, an AChE inhibitor candidate for severe epilepsy in phase 2 trials, and a novel stimulant for ADHD (SPN-443) which is in early-stage clinical testing.

Sage chief executive Barry Greene said the transaction with Supernus "follows a comprehensive strategic review by our board of directors, and I am confident this deal maximises value for shareholders."

The deal is scheduled to be completed in the third quarter and start contributing to Supernus' profitability next year.