Biopharmaceutical company Sage Therapeutics (SAGE) has rejected Biogen’s (BIIB) $469 million takeover offer, citing valuation concerns in the proposal. Biogen, which already owns a 10.2% stake in Sage, had proposed acquiring the remaining shares for $7.22 each. However, Sage’s board rejected the offer, stating that it significantly undervalued the company. Additionally, the company launched a strategic review process to explore various alternatives.
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Sage and Biogen are both dedicated to developing treatments for central nervous system disorders. In 2023, they jointly launched ZURZUVAE in the U.S., marking it as the first and only oral treatment for women experiencing postpartum depression (PPD). In Q3 2024, ZURZUVAE generated approximately $22 million in sales, reflecting a 49% growth and surpassing consensus expectations by around 20%.
Sage Shares Gain Traction
Despite the rejection of Biogen’s acquisition offer, investors seem to have reacted positively to the news of the strategic review. Consequently, Sage shares gained nearly 5% on Monday, reflecting market confidence in the potential of the strategic alternatives being considered. Meanwhile, Biogen shares increased by 1.75%.
As the situation unfolds, shareholders and potential investors will closely monitor the outcome of the review process.
Sage Kicks Off Strategic Review
According to its update, Sage is evaluating several strategic options, including potential transactions, mergers, or a sale, to enhance shareholder value.
The company further stated that it has not established a timeline for the review process and has not made any decisions regarding potential strategic alternatives at this stage. Meanwhile, there is no guarantee that the review will lead to any transaction or strategic outcome.
Is Sage Therapeutics a Good Stock to Buy?
According to TipRanks’ consensus, SAGE stock has a Hold rating based on 15 Hold, two Buy, and one Sell recommendations. The average share price target for Sage is $8.53, which is 15% above the current trading levels.
Year-to-date, Sage shares have gained over 37%.
