As of the most recent check, the stock price of Longboard Pharmaceuticals, Inc. (NASDAQ: LBPH) has risen 51.62% to $58.98, a significant increase during pre-market activity. The news of a purchase deal by the multinational pharmaceutical company H. Lundbeck A/S caused LBPH shares to soar. The agreement was a strategic effort by Lundbeck to raise its profile in neurological treatments.
Specifics of the Purchase Agreement
The agreement states that Lundbeck will launch a tender offer to buy all of Longboard’s outstanding common stock. A cash payment of $60 per share is made to Longboard stockholders, valuing the deal at around $2.6 billion.
After accounting for net cash and fully diluted, the transaction is valued at $2.5 billion, or around DKK 17 billion. The merger, which has been unanimously approved by the boards of both companies, is anticipated to close in the fourth quarter of 2024, pending regulatory approvals and other customary conditions.
Longboard’s main asset
Longboard Pharmaceuticals specializes on developing innovative treatments for neurological disorders. Bexicaserin, its main product, is a 5-HT2C receptor agonist of the next generation that is intended to lessen seizures. The drug is now finishing phase III clinical trials as part of the DEEp Program and has shown promising results in preclinical and clinical testing.
Bexicaserin’s Breakthrough Therapy Designation from the U.S. Food and Drug Administration emphasizes the medication’s potential as a revolutionary treatment for epilepsy, particularly in rare forms such Dravet syndrome and Lennox-Gastaut syndrome.
Strategic Benefits for Lundbeck
The acquisition of Longboard fits well within Lundbeck’s strategy to build a neuro-rare disease franchise. With bexicaserin projected to achieve global peak sales between $1.5 and $2 billion, this asset diversifies Lundbeck’s portfolio and strengthens its pipeline of neurological treatments.
Lundbeck plans to fund the acquisition through its cash reserves and existing bank facilities, with an emphasis on de-leveraging post-transaction. Following the successful completion of the tender offer, Lundbeck will acquire any remaining shares through a merger, further solidifying its leadership in rare neurological diseases.