Shares of biotech company, Sage Therapeutics Inc (NASDAQ: SAGE) jumped 35 per cent after the announcement of its acquisition by Supernus Pharmaceuticals Inc (NASDAQ: SUPN).
Announced on Monday, the company values the deal at USD$795 million at USD$8.50 per share in cash upfront, including a contingent value right (CVR) up to USD$3.50 per share based on future milestones.
Supernus Pharma sells treatments for epilepsy, migraine, Parkinson’s disease, and attention deficit hyperactivity disorder (ADHD). Additionally, acquiring Sage expands Supernus’s presence in nonpsychiatric conditions. Sage Therapeutics sells Zurzuvae, a postpartum depression treatment, in partnership with Biogen. This acquisition also broadens Supernus Pharma’s portfolio beyond its traditional focus.
In 2024, ZURZUVAE generated USD$36.1 million in U.S. net sales. Additionally, it earned USD$13.8 million in the first quarter of 2025 alone, a 21 per cent increase from the prior quarter.
Meanwhile, prescriptions for ZURZUVAE rose 22 per cent in Q1 2025, with nearly 80 per cent coming from obstetricians and gynecologists. This indicates strong adoption within the medical community.
Furthermore, Supernus plans to leverage ZURZUVAE to bolster its neuropsychiatry portfolio, especially in the depression drug market. The company expects the acquisition to be significantly accretive by 2026 and projects potential annual cost synergies up to USD$200 million.
The CVR milestones highlight ZURZUVAE’s growth potential. Payments tie to U.S. net sales targets of USD$250 million in 2027, USD$300 million in 2028, and USD$375 million in 2030. Also, milestones depend on regulatory success in Japan. These targets reflect Supernus’s confidence in ZURZUVAE’s commercial trajectory and its ability to meet unmet mental health needs.
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Multiple Sage drugs failed in testing
Sage Therapeutics faced numerous setbacks in recent years, including the limited approval of Zurzuvae. Initially, Sage had hoped the Food and Drug Administration would approve the drug as a treatment for major depressive disorder (MDD). Additionally, multiple Sage drugs failed in testing for Parkinson’s, Alzheimer’s, Huntington’s diseases, and essential tremor. As a result, Sage’s stock plummeted from just under 200 in 2018 to below 10 this year.
“We see the SUPN bid as a best-case scenario for SAGE given the recent pipeline setbacks,” said Laura Chico, Wedbush analyst, in a report.
“Could another bidder emerge? This is a logical question to ask given neutral-rated BIIB’s prior interest in the company and collaborative relationship.”
Investors and analysts have reacted positively to the acquisition. Social media sentiment focuses on the deal’s significance, noting the 35 per cent pre-market surge and Supernus’s strategic portfolio boost. Analysts from Stifel called the deal a “good end” to Sage’s story. This is especially after financial struggles like a USD$62.2 million net loss in Q1 2025 and negative cash flows.
The acquisition offers Sage shareholders a clear exit strategy, with a premium over the stock’s recent trading range of USD$4.62 to USD$13.47 in the past 12 months. It also reduces risks tied to Sage’s standalone operations.
However, some analysts remain cautious about Sage’s pre-acquisition fundamentals. Seventeen research firms held a consensus “Hold” rating, with a target price of USD$8.87, slightly below the upfront acquisition price. Recent downgrades, such as Wall Street Zen’s “Sell” rating on June 7, 2025, cited concerns over declining revenues and operational losses.
Nevertheless, the acquisition news has largely overshadowed these worries. The deal’s premium and potential CVR payouts offer a more immediate value proposition.
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joseph@mugglehead.com
