Biopharmaceutical company Sage Therapeutics (SAGE) has unanimously rejected a $469 million takeover offer from biotechnology firm Biogen (BIIB) because it ‘significantly undervalues’ the business.
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Biogen, which has a 10.2% stake in Sage, had proposed earlier this month to buy the rest of Sage’s shares at $7.22 per share. Sage, which has filed a lawsuit seeking to block the Biogen deal, said it would not serve its shareholders interests.
Sage Launches a Strategic Review
But the company kept the door open to potentially other offers. It said that it had launched a process to explore ‘strategic alternatives’ for the company. This, it added, would include an evaluation of a “broad range of opportunities to maximize value for shareholders, including but not limited to a potential strategic transaction, business combination or sale”.
Sage’s shares closed up 4.79% whilst Biogen’s stock was up 1.75%.
Sage did not say how long this review period would last and stressed that it may not lead to a transaction or any other outcome. It said that it would continue to focus, in the meantime, on its Zurzuvae postpartum depression pill for women, which it has partnered on with Biogen. It was approved by the U.S. Food and Drug Administration in 2023, marking the first approved drug for the condition.
In its most recent results covering Q3 Sage reported that Zurzuvae generated $11 million in revenues, up 49% on the second quarter.
Sage Feeling Poorly in Recent Months
Sage has had a troubled last few months with its share price sliding 72% over the last year. Its problems have included discontinuing the development of its experimental drug dalzanemdor due to trial failures in the treatment of Parkinson’s and Alzheimer’s.
In October, the company announced the departure of Chief Financial Officer Kimi Iguchi and laid off over 165 employees, a third of its workforce, as part of a reorganization plan.
Is SAGE a Good Stock to Buy Now?
On TipRanks, SAGE has a Hold consensus based on 2 Buy, 15 Hold and 1 Sell rating. It has a highest price target of $14. SAGE stock’s consensus price target of $8.53 implies an 14.80% upside.
