Biogen Inc.
BIIB
and
Sage Therapeutics, Inc.
SAGE
announced that they have entered into a global collaboration and license agreement for developing and commercializing potential breakthrough therapies in depression and movement disorders. The agreement includes development of two candidate from Sage Therapeutics’ pipeline — zuranolone (SAGE-217) and SAGE-324. The transaction, expected to close by the end of January 2021, is subject to antitrust laws.
Zuranolone is a late-stage candidate, which will be developed for treating major depressive disorder (“MDD”), postpartum depression (“PPD”) and other psychiatric disorders under the agreement. Multiple late-stage studies are evaluating the candidate in several indications including MDD and PPD. The two-week, once-daily therapy is being evaluated as acute rapid response therapy in MDD patients in combination with new standard antidepressant therapy and as “as-needed,” or episodic, treatment of MDD. SAGE-324, a mid-stage candidate, will be developed for treating for essential tremor and other neurological disorders.
Shares of Biogen have declined 17.9% so far this year against the
industry
’s 3.1% rise.
Please note that Biogen has a strong portfolio of drugs and pipeline candidates targeting neurological indications. The company is one of the leaders involved in developing a treatment for the deadly Alzheimer’s disease. Several patients with neurological disease suffer from depression. A successful development of zuranolone and SAGE-324 will likely complement Biogen’s drug portfolio. Moreover, there are an estimated 17 million people in the United States who suffer from MDD every year. This indicates huge potential for the candidate due to the underserved patient population.
We note that Sage Therapeutics has completed two pivotal studies, MDD-201 and ROBIN, on zuranolone evaluating it in MDD and PPD patients, respectively. Another four studies are evaluating the candidate either in PPD patients or MDD patients in different treatment settings. Data from these studies are expected next year.
Per the terms of the deal, Biogen will pay Sage Therapeutics $875 million in cash as upfront payment and will make an equity investment worth $650 million by purchasing approximately 6.2 million newly issued shares of Sage common stock at a price of $104.14 per share. Sage Therapeutics is also eligible to receive up to $1.6 billion in potential milestone payments. The companies will equally split responsibility and costs for development as well as profits and losses for potential commercialization in the United States. Biogen will hold exclusive license to develop and commercialize zuranolone and SAGE-324 outside of the United States except in Japan, Taiwan and South Korea.
Zacks Rank & Stocks to Consider
Biogen currently carries a Zacks Rank #4 (Sell).
A couple of better-ranked biotech stocks to consider include Catalyst Biosciences
CBIO
and Abeona Therapeutics Inc.
ABEO
, both carrying a Zacks Rank #2 (Buy). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
Catalyst Biosciences’ loss estimates for 2021 have narrowed from $3.23 to $2.98 over the past 60 days.
Abeona Therapeutics’ loss estimates for 2021 have narrowed from 68 cents to 62 cents over the past 60 days.
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