Denmark’s Lundbeck has agreed to buy Alder BioPharmaceuticals in a deal valued at almost $2 billion, hoping to reap profits from a potential blockbuster migraine drug.
The move comes as Lundbeck, which specializes in treatments for illnesses such as Alzheimer’s and depression, is under pressure from patent expirations and competition from generics.
Alder, whose board unanimously approved a takeover pitched at a 79% premium to Friday’s share price close, develops preventative treatments of migraine in adults.
It submitted a license application for its eptinezumab antibody to the FDA in February.
Lundbeck expects the drug, used in intravenous infusion therapy, to be launched in the United States in the first half of 2020.
“The acquisition will accelerate and diversify Lundbeck’s revenue growth starting in 2020 as well as enhancing our antibody process development capabilities,” said Lundbeck Chief Executive Deborah Dunsire.
In a subsequent call with analysts, the CEO added that eptinezumab was a potential blockbuster drug, a term for popular drugs reaching annual sales of at least $1 billion.
Lundbeck shares fell 3% at Monday’s market open, but were up 4.5% at 1020 GMT following the call with analysts.
It is offering an upfront payment of $18 per Alder share, plus an additional $2 per share contingent upon approval of eptinezumab by the European Medicines Agency.
Lundbeck said it expects the deal, to be funded through cash and bank financing, to close in the fourth quarter of this year.
Lundbeck, which bought U.S.-based research hub Abide Therapeutics in a $250 million deal May, will continue to look for new takeover and licensing opportunities as well as partnerships, Dunsire said.
Copenhagen-based Lundbeck, founded in 1915 as a trading company, began developing and producing pharmaceutical products in the 1930s. It is 70% owned by the Lundbeck Foundation, one of Denmark’s biggest industrial foundations.
Roughly 39 million Americans suffer from migraine headaches, according to the Migraine Research Foundation.
Annual global drug sales to treat migraines could total $8.7 billion by 2026, according to the GlobalData analytics firm.
If the transaction, valued at up to $1.95 billion, is closed on Nov. 1, the company expects transaction costs of about 200 million Danish crowns ($30 million) and integration and retention costs of 400-500 million crowns.
In the same scenario, Lundbeck said it would pay two months of Alder’s operating costs, seen at around 325-400 million crowns.
Lundbeck expects to submit the eptinezumab antibody for regulatory approval in the European Union during 2020, and later in China and Japan.
By Nikolaj Skydsgaard
Source: Reuters
Giovanni Caforio, the former CEO of Bristol Myers Squibb, is set to become the next board chairman of Novartis, which on Tuesday proposed the pharmaceutical industry veteran as its pick to replace Joerg Reinhardt in the role next year. Reinhardt has served as Novartis’ chair since 2013 and plans to retire when his 12-year term ends in 2025.
GE HealthCare has raised the curtain on two ultrasound systems equipped with artificial intelligence programs designed to assist in diagnosing conditions in women’s health, including obstetric exams. The Voluson Signature 20 and 18 imaging systems include AI tools capable of automatically identifying and annotating measurements of fetal anatomy.
Scientists from the University of Edinburgh’s School of Chemistry have revealed a new sustainable method of manufacturing complex molecules that could reduce waste produced during drug production. The method published in Nature Chemistry could help to prevent severe side effects caused by drugs that can exist as enantiomers.
