Massachusetts based Biotechnology Company Biogen Inc. (BIIB) said it will be pumping in a $1.5 billion investment in fellow biotechnology company Sage Therapeutics Inc. (SAGE). This investment is set to help the two companies jointly develop treatments for depression and other neurological disorders.
Biogen will be making an upfront payment of$875 million for the investment.
Following the investment, Biogen will gain access to zuranolone, an oral therapy made for postpartum depression and Major Depressive Disorder (MDD) being developed by Sage for essential tremor and other neurological disorders.
Citing data from U.S. Center for Disease Control and Prevention, it’s estimated that around 16 million Americans experience symptoms of major depressive disorder annually.
Under terms and conditions of the deal, Biogen will purchase a total of 6.2 million shares of recently issued Sage’s shares for $104.14 per share representing a 26% share premium.
Additionally, Sage will also be allowed to get potential milestone payment of up to $1.6billion.
After the deal is closed, the two companies will jointly market the drug in the United States and secure rights to sell the drug across the world excluding Taiwan, South Korea and Japan.
