Dive Brief:

• Sage Therapeutics, a brain drug developer that’s dealt with a series of clinical setbacks, has agreed to be acquired by Supernus Pharmaceuticals in a deal worth $561 million. 
• Supernus on Monday said it would pay $8.50 per share for Sage, an offer valuing shares at a roughly 27% premium to their previous closing price. The deal also includes a contingent value right worth up to $3.50 per share if certain sales and commercial milestones related Sage’s lone product, the postpartum depression drug Zurzuvae, are met.
• Sage earlier this year turned down a $7.22-per-share offer from Zurzuvae development partner Biogen and sued the company, arguing it was being undervalued. The company has been evaluating “strategic alternatives,” a process that included a search for a buyer, ever since. 

Dive Insight:

Sage has gone through a roller coaster ride since its founding more than a decade ago. 

Launched by Third Rock Ventures and run for many years by biotech veteran Jeff Jonas, the company aimed to develop brain drugs for a variety of conditions, from epilepsy and tremors to Huntington’s disease. The company went public in 2014 to support that work and saw its share price swell to nearly $200 apiece a few years later as a pair of depression medicines advanced through testing. It brought to market not only the first medicine for postpartum depression, Zulresso, but the first pill for the condition, called Zurzuvae. It cut a multibillion-dollar partnership deal with Biogen, too. 

But Zulresso, a 60-hour infusion, never generated significant sales and Sage stopped marketing it at the end of the year. And the company had initially hoped to bring Zurzuvae to market for major depressive disorder — a much larger opportunity — but changed course and laid off staff after U.S. regulators asked for additional testing. 

Sage has suffered setbacks elsewhere, too, with experimental drugs failing studies in epilepsy, tremors, Alzheimer’s, Huntington’s and Parkinson’s disease over the years. Company shares closed on Friday at $6.70 apiece and have fallen so low in recent months that Sage’s board accused Biogen of lowballing the company with an earlier bid.

The deal with Supernus feels “like an unremarkable outcome for a company that was once one of the hottest stories” in brain drug research, wrote Stifel analyst Paul Matteis in a note to clients Monday. Matteis added that, for investors, though, the acquisition “is a good end to the Sage story given the host of challenges facing the company.”

In a separate note, RBC Capital Markets’ Brian Abrahams called Supernus’ offer “fair” given the “considerable time” it would have taken for Sage to become profitable.

Abrahams also wrote that there is a “very low likelihood” that Sage hits the majority of the sales targets that would bump up its sale price. Sage stockholders would get $1 per share if Zurzuvae hits $250 million in sales in the U.S. by 2027, and similar payouts if U.S. drug sales reach $300 million by 2028 and $375 million by 2030. 

Zurzuvae generated $72 million in U.S. sales in 2024. Biogen and Sage split U.S. profits.