Sage sues Biogen after unsolicited takeover bid

Sage Therapeutics has left its view of Biogen's recent takeover bid in little doubt – it has just filed a lawsuit seeking to block the deal.

Specific details of the lawsuit are not yet available as the complaint remains under seal at Delaware Court of Chancery. However, Sage confirmed in a related filing that it was asking for a standstill ruling to prevent Biogen from continuing with its unsolicited bid, according to a Bloomberg report.

Just a week ago, Biogen offered to buy all the shares in Sage that it doesn't already own for $7.22 apiece, valuing the neuroscience specialist at around $442 million. It currently holds around a 10% stake in the company.

Biogen has a longstanding alliance in place with Sage and co-markets Zurzuvae (zuranolone), which is FDA-approved for post-partum depression (PPD).

However, its takeover bid has been viewed in some quarters as opportunistic, given that Sage's share price has plummeted more than 90% over the last couple of years following a series of regulatory and pipeline setbacks and its market cap – currently at $433 million – is around a third of what it was at the start of 2024.

The first blow came when the FDA declined to approve Zurzuvae (zuranolone) for major depressive disorder (MDD), as well as PPD, cutting off a much larger potential market from the drug, with the two partners subsequently agreeing to abandon any further attempt to pursue approval of the drug in that indication.

Meanwhile, Sage reported failed phase 2 trials of dalzanemdor in Alzheimer's, Parkinson's, and Huntington's disease, and Biogen decided to opt out of their partnership on essential tremor candidate SAGE-324 after disappointing results in the mid-stage KINETIC 2 study.

Towards the end of last year, Sage also announced sweeping job losses and a cut in its R&D programmes to reduce costs, and also decided to discontinue older PPD therapy Zulresso (brexanolone), whose sales have been in decline.

Once tipped as a blockbuster, Zurzuvae has started slowly with sales of $49 million in the first nine months of last year, following its launch in the US towards the end of 2023. Biogen paid Sage $11 million in collaboration revenues in the third quarter, during which the drug made $22 million, and buying Sage would give it total control of the brand.

At last week's JPMorgan conference, Biogen chief executive Chris Viehbacher said the company is open to additional bolt-on acquisitions, like its 2023 purchase of Reata Pharma and its rare disease therapy Skyclarys (omaveloxolone) for $7.3 billion and last year's $1.1 billion takeover of immunology player HI-Bio – but does not need to rush into a deal.

Biogen has been under pressure from increased competition for some of its older drugs and slow growth of new Alzheimer's disease therapy Leqembi (lecanemab) – partnered with Eisai – leading some investors to push for more business development.

Photo by Sandy Millar on Unsplash