Lundbeck Acquires Longboard Pharmaceuticals for $2.6 Billion, Bolstering Neurological Disease Portfolio
Danish pharmaceutical leader H. Lundbeck A/S has made a significant move in the neurological disease space by acquiring Longboard Pharmaceuticals, Inc. in a cash deal valued at $60.00 per share, totaling approximately $2.6 billion in equity value and $2.5 billion net of cash on a fully diluted basis. The acquisition is expected to close in the fourth quarter of 2024.
This strategic acquisition brings Longboard’s promising clinical-stage biopharmaceutical assets, particularly bexicaserin, under Lundbeck’s umbrella. Bexicaserin is currently in development for various neurological indications, showcasing its potential to treat a range of neurological conditions.
Longboard’s bexicaserin has garnered significant attention for its potential in treating Developmental and Epileptic Encephalopathies (DEEs), a group of severe neurological disorders characterized by seizures and developmental delays. The company recently released interim results from its ongoing 52-week open-label extension of the PACIFIC Study evaluating bexicaserin in participants ages 12-65 with DEEs. Furthermore, bexicaserin has received both FDA Rare Pediatric Disease designation and Orphan Drug designation for Dravet syndrome, a severe form of epilepsy.
Longboard has also initiated a global Phase 3 DEEp SEA Study with bexicaserin for seizures associated with Dravet syndrome in participants two years of age and older. The acquisition of Longboard’s bexicaserin asset is a strategic move for Lundbeck, bolstering its mid-to-late-stage pipeline and diversifying revenue growth following its expected launch in the fourth quarter of 2028. Lundbeck anticipates global peak sales potential for bexicaserin to reach between $1.5 billion and $2 billion.
Following the acquisition, Lundbeck will focus on de-leveraging, aiming to bring its leverage within its target range of <2.5x NIBD/EBITDA within 18-24 months. The company expects to recognize integration costs of approximately $80 million, primarily impacting 2024, which will be adjusted for in Adjusted EBITDA.
Market Reaction:
The news of the acquisition was met with a positive response from the market. LBPH stock surged by 51.3% to $58.84 during the premarket session on Monday, reflecting investor confidence in the deal's potential. This acquisition highlights Lundbeck's commitment to expanding its presence in the neurological disease market, leveraging Longboard's innovative treatments to address unmet patient needs. As the acquisition progresses, the market will closely watch the development of bexicaserin and its potential impact on Lundbeck's overall financial performance.
