Supernus to acquire Sage Therapeutics stock for $8.50 per share

Supernus Pharmaceuticals (NASDAQ:SUPN) has entered into a definitive agreement to acquire Sage Therapeutics (NASDAQ:SAGE) for $8.50 per share in cash, Sage announced Monday. The deal values Sage at approximately $561 million in total equity value and includes a contingent value right potentially worth an additional $3.50 per share. The announcement has driven significant investor interest, with Sage’s stock showing an impressive 82% return over the past six months. According to InvestingPro data, the stock’s current trading price reflects this momentum, with analysis suggesting the stock is currently fairly valued.

The acquisition comes after Sage rejected an unsolicited offer from Biogen (NASDAQ:BIIB) of $7.22 per share in January, following which Sage’s board disclosed it was evaluating strategic alternatives. Sage and Biogen are currently partners on Zurzuvae, splitting revenues 50/50 on the medication.

With $424 million in cash on Sage’s balance sheet, the enterprise value of the transaction is approximately $137 million, though the company was still burning cash despite recent restructurings that had extended its runway into mid-2027. InvestingPro analysis confirms Sage’s strong liquidity position, with a current ratio of 9.13 and more cash than debt on its balance sheet. While H.C. Wainwright maintained its Neutral rating and $12.00 price target on Sage following the announcement, InvestingPro’s comprehensive financial health assessment gives the company a "GOOD" overall rating, with particularly strong scores in price momentum and relative value metrics. For deeper insights into Sage’s financial position and future prospects, investors can access the detailed Pro Research Report, available exclusively to InvestingPro subscribers.

Sage’s pipeline includes SAGE-319, a GABAA receptor PAM with Phase 1 multiple ascending dose study results expected in late 2025, though H.C. Wainwright notes the translational value into potential indications will be limited. The company had also planned to provide an update on SAGE-324 in mid-2025, though the analyst indicated investors would likely view further development with caution due to tolerability issues.

The transaction will proceed through a tender offer from Supernus for Sage shares, representing a premium over Biogen’s earlier rejected offer and providing Sage shareholders with immediate cash value plus potential additional returns through the contingent value right. The deal comes at a time when Sage’s stock has demonstrated strong momentum, with InvestingPro data showing a 35% return in just the past week and a 68% year-to-date price return.

In other recent news, Supernus Pharmaceuticals announced its acquisition of Sage Therapeutics in a deal valued at up to $795 million. This acquisition includes an upfront payment of $8.50 per share and a contingent value right (CVR) potentially worth an additional $3.50 per share, bringing the total possible value to $12.00 per share. The CVR payments are linked to specific sales milestones for Sage’s postpartum depression treatment, Zurzuvae, in the U.S. and Japan. Analysts have responded to the acquisition with mixed adjustments to Sage’s price target. TD Cowen lowered its target to $8.50 while maintaining a Hold rating, citing the acquisition offer as the reason. In contrast, Truist Securities raised its target to $9.00, factoring in the potential value of the CVR. Piper Sandler downgraded Sage to Neutral from Overweight, aligning its price target with the acquisition offer. The transaction, expected to close in the third quarter of 2025, is predicted to face minimal regulatory hurdles.

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