Sage's $60M swing is the next big test of biotech's IPO window

Third Rock Ventures alum Sage Therapeutics has set terms for an IPO worth $60 million at midpoint, expecting to make its Wall Street debut next week amid an increasingly bearish market for biotech offerings.

Sage plans to flip 4 million shares at between $14 and $16 each, setting aside another 600,000 shares to cover overallotments for a maximum deal value of $73.6 million. The Cambridge, MA, company plans to use the bulk of its proceeds on Phase I/II studies for SAGE-547, a drug designed to treat super-refractory status epilepticus (SE). The disease is a rare, life-threatening seizure condition with no approved therapies, according to Sage.

Meanwhile, after a record-setting first quarter brought in $2.1 billion in biotech IPOs, drug developers have had a rough go on Wall Street in recent weeks. Last month, antibody specialist Ambrx pulled the plug on an $86 million offering due to unfavorable market conditions, and Syndax Pharmaceuticals, Minerva Neurosciences and GlobeImmune failed to pull off planned offerings that would have totaled nearly $400 million.

Sage Therapeutics CEO Jeffrey Jonas

Sage, whose investors include Arch Venture Partners and OrbiMed Advisors, is hoping to buck that trend, touting a nimble business model CEO Jeffrey Jonas has said was designed in response to the industry's many failures in CNS development. The biotech sees itself less as a startup with a single promising drug than as a product engine with a valuable platform, and the plan is to test its candidates against aggressive endpoints in studies with rapid readouts, giving it a chance to quickly pivot if any fail.

Beyond its lead program, Sage is working on the preclinical '689, designed to treat adjunctive SE, and '217, under development as a maintenance therapy for the disease. The company's IPO proceeds will support IND-enabling studies for those candidates, plus early work on a stable of preclinical CNS therapies that modulate the brain's GABAA and NMDA receptors, including treatments for depression, essential tremor, tinnitus and pain, Sage said.

If its IPO works out, Sage will trade on the Nasdaq under "SAGE."

- read Sage's filing

Special Report: Biotech's breathless quarter of IPOs brings in $2.1B for R&D

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