Lundbeck to Buy Longboard Pharma in $2.6 Billion Deal
(Bloomberg) -- H. Lundbeck A/S agreed to acquire Longboard Pharmaceuticals Inc in a $2.6 billion deal that boosts its drug pipeline for serious brain diseases.
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The Danish pharmaceutical company is offering shareholders $60 per share in cash for US-based Longboard, in a transaction that has been unanimously approved by the boards of both companies, according to a statement.
Shares of Lundbeck fell as much as 5.9% following the news. Longboard Pharmaceuticals rose as much as 52% to hit a record high at the New York market open.
Lundbeck specializes in treatments for serious brain diseases and its proposed acquisition of Longboard will boost its development pipeline in rare neurological conditions. Longboard’s main asset is bexicaserin, a potential blockbuster treatment for patients suffering from rare and severe epilepsies, for which there are currently very few good treatments available.
Bexicaserin is currently being tested on patients diagnosed with Dravet syndrome, Lennox-Gastaut syndrome and other similar conditions. Lundbeck said the drug has shown encouraging anti-seizure effects in early trials. A global late-stage study evaluating the drug for the treatment of seizures associated with Dravet syndrome began in September.
Acquiring Longboard is an important deal as it will help build a late-stage pipeline for Lundbeck, said Charl van Zyl, the company’s chief executive officer, in a phone interview, adding: “And, of course, it has blockbuster potential for us.”
Lundbeck expects to be able to launch bexicaserin in the final quarter of 2028, focusing on the US market, Chief Financial Officer Joerg Hornstein said on a call with analysts Monday. The Danish company said the drug has an estimated global annual revenue potential of between $1.5 billion and $2 billion at sales peak.
The deal will be funded through existing cash resources and bank financing and is expected to close in the final quarter of this year. Once concluded, Lundbeck is open to making more acquisitions, according to van Zyl.
“We will continue to look at other opportunities,” he told Bloomberg. “But with this deal we are certainly answering a number of questions around long-term growth alongside the other assets we have in the pipeline.”
Earlier this year van Zyl said Lundbeck had a “war chest” of as much as €6 billion ($6.5 billion) to spend in the medium term on acquisitions without having to tap the equity market.
(Updates with shares, CFO, CEO comments from seventh paragraph)
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