Form 4: Sage Therapeutics Executive Disposes of Holdings Post-Merger with Supernus

Michael C. Quirk, Chief Scientific Officer of Sage Therapeutics, has disposed of all his common stock, restricted stock units, and stock options following the company's merger with Supernus Pharmaceuticals, receiving cash and contingent value rights.

Summary

• Sage Therapeutics, Inc. completed its merger with Supernus Pharmaceuticals, Inc. on July 31, 2025, following a cash tender offer by Supernus's subsidiary, Saphire, Inc.
• Each outstanding Sage common share was converted into $8.50 in cash (the 'Closing Amount') and one Contingent Value Right (CVR).
• Each CVR represents the right to receive up to an additional $3.50 per share in cash upon the satisfaction of specified milestones, as detailed in a prior Form 8-K filing.
• Reporting Person Michael C. Quirk disposed of 24,999 shares of common stock as part of this merger.
• 7,962 Restricted Stock Units (RSUs) held by Mr. Quirk were fully vested, cancelled, and converted into a cash payment equal to the product of the $8.50 Closing Amount multiplied by the number of shares subject to the RSU, plus one CVR per RSU.
• Stock options with an exercise price less than the $8.50 Closing Amount were fully vested, cancelled, and converted into a cash payment equal to the excess of the Closing Amount over the exercise price, multiplied by the number of shares, plus one CVR per option.
• Specifically, 36,000 stock options with an exercise price of $6.97 and 4,000 stock options with an exercise price of $7.86 were converted under these terms.
• Stock options with an exercise price greater than or equal to the Closing Amount were cancelled with no consideration.
• Following these transactions, Mr. Quirk holds no beneficial ownership in Sage Therapeutics, Inc.

Sentiment

Score: 7

Explanation: The filing reports the expected completion of a merger, resulting in the conversion of securities into cash and CVRs for the reporting person. This provides a clear exit and potential upside via CVRs, which is generally positive for the individual. For the company, it signifies the finalization of an acquisition, which can be seen as a strategic move, though the overall sentiment for shareholders depends on the perceived value of the $8.50 cash plus CVR compared to Sage's standalone prospects.

Positives

• Reporting person received immediate cash consideration of $8.50 per share for common stock, restricted stock units, and in-the-money stock options.
• Contingent Value Rights (CVRs) provide potential additional cash upside of up to $3.50 per share, contingent on future milestone achievements.
• All unvested restricted stock units and in-the-money stock options were fully vested and converted into cash and CVRs as part of the merger, providing immediate liquidity and value realization for the reporting person's equity compensation.

Negatives

• Stock options with an exercise price greater than or equal to the $8.50 closing amount were cancelled with no consideration, representing a loss of potential value for any such options.
• The value of the Contingent Value Rights (CVRs) is not guaranteed and depends on the satisfaction of specified future milestones, introducing an element of uncertainty to the total consideration.

Risks

• The value of the Contingent Value Rights (CVRs) is subject to the satisfaction of specified milestones, meaning the full potential payout of $3.50 per share is not guaranteed and may not be realized.

Future Outlook

The filing details the completed merger and the conversion of securities into cash and contingent value rights, indicating the finalization of the acquisition. The future outlook for the CVRs depends on the achievement of specified milestones, which are not detailed in this Form 4 but were referenced in a prior Form 8-K.

Management Comments

• Michael C. Quirk is identified as the Chief Scientific Officer and Interim Head of R&D.

Industry Context

This filing reflects the finalization of an acquisition in the biotechnology/pharmaceutical sector, where larger pharmaceutical companies often acquire smaller biotech firms to gain access to new drug pipelines or technologies. The use of Contingent Value Rights (CVRs) is a common mechanism in biotech mergers to bridge valuation gaps and share future development risks/rewards, particularly for assets in clinical development.

Comparison to Industry Standards

• The use of a cash-plus-CVR structure is a common acquisition strategy in the pharmaceutical and biotechnology industries, similar to deals like the acquisition of Acceleron Pharma by Merck (which included a CVR for sotatercept) or the acquisition of MyoKardia by Bristol Myers Squibb (which also included a CVR for mavacamten).
• The specific cash component of $8.50 per share and a potential $3.50 CVR per share should be evaluated against recent comparable biotech acquisitions based on factors such as the target company's pipeline stage, market capitalization, and therapeutic area. Without specific details on Sage's pipeline and market conditions at the time of the merger agreement (June 2025), a direct quantitative comparison to specific companies like BioMarin Pharmaceutical or Sarepta Therapeutics is not possible from this filing alone, but the structure aligns with industry norms for risk-sharing in contingent payouts.

Stakeholder Impact

• Shareholders: Received cash and Contingent Value Rights (CVRs) for their shares, providing liquidity and potential future upside.
• Employees (specifically Reporting Person): Realized value from their equity compensation (Restricted Stock Units and stock options) through cash and CVRs.

Next Steps

• Achievement of specified milestones for the Contingent Value Rights (CVRs) to trigger additional cash payments.
• Further details regarding CVR milestones are expected to be found in the Form 8-K filed by the Issuer on June 16, 2025.

Key Dates

Keywords

Sage Therapeutics, Supernus Pharmaceuticals, Merger, Acquisition, Tender Offer, Form 4, Insider Transaction, Beneficial Ownership, Contingent Value Rights, CVR, Stock Options, Restricted Stock Units, RSU, Biotechnology, Pharmaceuticals