Lundbeck buys Chelsea Therapeutics
pharmafile | May 12, 2014 | News story | Research and Development, Sales and Marketing | Chelsea Therapeutics, Lundbeck
Lundbeck could pay as much as $658 million for neurological disorder specialist Chelsea Therapeutics as the firm looks to shore up is pipeline.
By acquiring the company Lundbeck gains the rights to Northera (droxidopa), which was recently approved by the FDA and is expected to be launched in the third quarter.
The drug treats a rare form of low blood pressure associated with neurological disorders such as Parkinson’s disease.
Under the terms of the agreement, Lundbeck will offer Chelsea stockholders an upfront payment and contingent value rights (CVRs), totalling $7.94 per share, or $658 million (around DKK 3.5 billion).
This represents a premium of 59% over the closing price of Chelsea shares on 7 May 2014. The deal includes $6.44 per share in cash, or around $530 million, which could be increased due to the nature of the CVRs.
This may pay up to a total of an additional $1.50 upon achievement of certain commercial milestones related to Northera’s commercial performance in the period 2015-2017.
Northera has the potential to become the most valuable of Lundbeck’s four neurological drugs in the US, the Danish company says.
The firm’s chief executive Ulf Wiinberg said at a conference call that the drug ‘fits perfectly’ into Lundbeck’s existing portfolio of drugs, which mainly consists of drugs for brain diseases.
He went on: “I believe this offer represents an attractive offer to the stockholders of Chelsea and is consistent with Lundbeck’s strategic and disciplined approach to acquisitions.
“The proposed strategic acquisition of Chelsea — and the launch of its lead therapy, Northera — aligns with Lundbeck’s core strengths in addressing rare and challenging neurological disorders. As a company committed to people living with brain disorders, we are uniquely positioned to make Northera available to those who need it most.”
Joseph Oliveto, president and chief executive of Chelsea Therapeutics, adds: “This transaction provides attractive and certain upfront value to our stockholders, and enables them to participate in the potential commercial upside of Northera.
“Lundbeck’s expertise in commercialising rare disorder CNS products will enable a rapid and successful launch of Northera into the US market and ultimately will provide added benefit to patients suffering from NOH.”
“Lundbeck is doing this to increase its long-term earnings,” Sydbank analyst Soren LontoftHansen told Reuters. “The [criterion] for success is whether it can generate peak (annual) sales for Northera of $400 million.”
Ben Adams
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