Lundbeck, a Danish pharmaceutical company, has announced its acquisition of Longboard Pharmaceuticals for $2.6 billion. The purpose of this acquisition is to strengthen Lundbeck's portfolio with an experimental brain drug that has the potential to treat rare neurological disorders.
Lundbeck will pay $60 in cash for each outstanding share of Longboard, representing a 54% premium over the biotech's stock price. The deal is expected to close by the end of the year, allowing Lundbeck to expand its offerings in the neuro-rare disease market.
The focus of this acquisition is Longboard's drug, bexicaserin, which is currently undergoing late-stage clinical trials for Dravet syndrome and Lennox-Gastaut syndrome. Lundbeck believes that bexicaserin has the potential to treat all developmental and epileptic encephalopathies (DEEs), benefiting approximately 220,000 individuals in the U.S. The company estimates that peak annual sales for bexicaserin could reach between $1.5 billion and $2 billion.
Lundbeck's CEO, Charl van Zyl, sees this acquisition as transformative for the company's neuro-rare franchise and future growth. By acquiring bexicaserin, Lundbeck aims to mitigate the risks associated with impending patent expirations on its key products and ensure a strong pipeline of innovative therapies. Bexicaserin's mechanism of action enhances the release of GABA, a neurotransmitter that calms brain activity, making it valuable for treating conditions like epilepsy. The drug's patent protection extends until 2041, giving Lundbeck a competitive advantage.
The acquisition of Longboard Pharmaceuticals is a significant move for Lundbeck, especially in a period of slowdown in merger and acquisition activity in the biopharmaceutical sector. Longboard Pharmaceuticals, which was spun out from Arena Pharmaceuticals, has quickly established itself in the biotech landscape. Lundbeck's investment reflects its commitment to expanding capabilities in the neuropharmaceutical space and capitalizing on the growing market for treatments targeting DEEs.