Longboard Pharmaceuticals has entered into an agreement to be acquired by Danish pharmaceutical company H. Lundbeck, in a significant transaction valued at approximately $2.6 billion. Under the terms of the deal, Lundbeck will initiate a tender offer to purchase all of Longboard's outstanding shares at a price of $60 per share in cash.
This represents a notable 77% premium over Longboard's average share price over the past 30 days as of September 30, resulting in a 52% surge in Longboard's stock during premarket trading. The valuation of the transaction, adjusted for cash, is around $2.5 billion on a fully diluted basis, as disclosed by both companies in a joint statement.
The completion of this acquisition is contingent upon regulatory approvals, as well as a tender by at least a majority of Longboard’s shares, and is aimed for completion in the fourth quarter of the year. Additionally, Lundbeck intends to acquire any shares that remain untendered through a merger, providing the same per-share cash consideration. Kevin Lind, the Chief Executive of Longboard, emphasized the strategic significance of the acquisition, stating, "Lundbeck's remarkable capabilities will accelerate our vision to provide increased equity and access for underserved patients suffering from developmental and epileptic encephalopathy, who have significant unmet medical needs." This acquisition will enable Lundbeck to gain access to Longboard's lead therapeutic candidate, bexicaserin, which targets seizures associated with developmental and epileptic encephalopathies.
Lundbeck is optimistic that this deal will enhance its portfolio related to rare neurological diseases and diversify its revenue streams. Currently, bexicaserin is in the evaluation stage of a global phase 3 clinical program. Lundbeck anticipates that the product holds substantial global peak sales potential, estimated to be between $1.5 billion and $2 billion. Lundbeck’s CEO, Charl van Zyl, highlighted the transformative nature of this transaction, describing it as a cornerstone for Lundbeck's neuro-rare franchise, which is expected to facilitate their growth into the next decade.
"With this acquisition, we continue to execute on our focused innovator strategy," he remarked. To fund this acquisition, Lundbeck plans to utilize its existing cash reserves along with its banking facilities. The firm has projected integration costs related to this transaction to be roughly $80 million. In a recent financial update, Longboard reported a second-quarter loss of $0.56 per share, which is an improvement from a loss of $0.65 per share in the same quarter the previous year.
At the close of the June quarter, Longboard held $304.9 million in cash, cash equivalents, and investments. Price: 58.92, Change: +20.02, Percent Change: +51.47.