Sage Therapeutics Gets $1.53B From Biogen in a Collaboration Deal

Sage Therapeutics received $1.525 billion from Biogen under the earlier announced collaboration and license agreement to jointly develop treatments for depression and other neurological disorders.

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Per the deal, Sage Therapeutics (SAGE) has received an upfront payment of $875 million from Biogen. Further, Biogen has made an equity investment of about $650 million in Sage and purchased about 6.24 million newly issued Sage shares at $104.14 per share.

On Nov. 27, Biogen’s (BIIB) CEO Michel Vounatsos said, “We are excited about the potential to bring together Biogen’s leading capabilities in neuroscience with Sage’s deep expertise in psychiatry.” He added, “Major depressive disorder affects approximately 17 million people in the U.S. alone, and is a common co-morbidity of multiple neurological disorders in Biogen’s core therapeutic areas.”

Sage’s COO Mike Cloonan said, “Through this collaboration, Sage and Biogen have the potential to build something greater together than either could have done alone. We will leverage each other’s existing expertise while continuing to build new capabilities in our efforts to create paradigm shifts in the treatment of depression, PPD [Postpartum Depression] and essential tremor — disorders that have gone too long with few treatment innovations.” (See SAGE stock analysis on TipRanks)

On Dec. 17, Mizuho Securities analyst Vamil Divan reiterated a Buy rating and a price target of $81 (6.4% downside potential) on the stock. After a conversation with the newly-appointed CEO Barry Greene and CFO Kimi Iguchi, Divan said, “We expect to hear more from Barry Greene and the team in January as they lay out their plan for 2021 and their vision for the company for the next 3-5 years. Much of the long-term plan of course will be determined by key data readouts in 2021.”

From the rest of the Street, the stock scores a cautiously optimistic analyst consensus of a Moderate Buy based on 11 Buys and 6 Holds. The average analyst price target stands at $87.07, which implies that the shares are almost fully priced at current levels. Shares have gained 19.8% in 2020.