Biotech Dealmaking Turns Contentious: Biogen's Sage Bid and Alcon's IPO Battle

In recent weeks, the pharmaceutical industry has witnessed a surge in high-stakes dealmaking, with two notable cases highlighting the increasingly contentious nature of mergers, acquisitions, and public offerings in the biotech sector.

Biogen's Unsolicited Bid for Sage Therapeutics Sparks Legal Battle

Biogen's recent attempt to acquire its long-time partner Sage Therapeutics has erupted into a legal dispute, underscoring the complexities of biotech partnerships and acquisitions. On January 10, Biogen submitted a public proposal to acquire Sage for $7.22 per share, valuing the deal at $469 million. This move, however, was met with strong resistance from Sage's board of directors.

Sage officially rejected the offer, stating that it significantly undervalued the neuroscience biotech and was not in the best interest of shareholders. In response, Sage filed a lawsuit against Biogen, alleging that the company and its CEO Chris Viehbacher breached a standstill agreement signed in November 2020. This agreement, part of a stock purchase arrangement where Biogen acquired 10.7% of Sage's stock, stipulated that any potential deal talks should occur in private.

The public nature of Biogen's offer, disclosed in a Schedule 13D filing with the Securities and Exchange Commission, has become a central point of contention. Sage argues that this public disclosure clearly violates the standstill provision, while Biogen's Head of Development, Priya Singhal, maintains that the company was required to disclose the unsolicited bid.

Industry analysts have been vocal in their criticism of Biogen's approach, with Baird analyst Brian Skorney comparing it to a scene from "The Godfather." As Sage explores strategic alternatives, speculation grows about potential defensive measures, including the possibility of a "poison pill" strategy to fend off Biogen's advances.

Alcon Research's Attempt to Block Aurion Biotech's IPO

In a separate but equally contentious case, Alcon Research is embroiled in a legal battle to prevent Aurion Biotech, a company it heavily invested in, from going public. Alcon, Aurion's largest shareholder with a $165 million investment, filed a lawsuit in October 2024 to block Aurion's planned initial public offering (IPO).

The dispute centers around voting rights and preferred stock, with Alcon making multiple attempts over the years to acquire Aurion outright. When Aurion began exploring an IPO in 2023 and revealed official plans in mid-2024, Alcon refused to support the move, insisting on continuing acquisition talks instead.

Alcon's lawsuit alleges that Aurion requires its consent to pursue the IPO, a claim that Aurion has countered with its own legal action. On January 27, a split decision from the judge cleared the way for Aurion's IPO to proceed, though Alcon has pledged to appeal the ruling.

This unprecedented effort to prevent an IPO highlights the intense competition and strategic maneuvering within the biotech industry, as companies and investors jockey for control and favorable outcomes in an increasingly complex dealmaking landscape.