Lundbeck to acquire Longboard Pharmaceuticals in $2.6B deal
- Lundbeck has announced a $2.6 billion acquisition of Longboard Pharmaceuticals, strengthening its focus on rare neurological disorders, particularly epilepsy.
- The acquisition centers around Longboard’s lead drug, bexicaserin, which has demonstrated promising results in reducing seizure frequency in rare epilepsy conditions and is currently in late-stage clinical trials.
- Lundbeck aims to leverage bexicaserin to bolster its neuro-rare disease portfolio, with expectations of peak sales reaching $1.5 to $2 billion by 2028, highlighting the strategic importance of the acquisition for the company's growth.
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A Major Move in the World of Neuroscience and Rare Diseases
In a significant development in the pharmaceutical industry, Danish company Lundbeck A/S has announced its intention to acquire U.S.-based Longboard Pharmaceuticals for $2.6 billion. This acquisition marks a major expansion for Lundbeck into the realm of rare neurological disorders, particularly in the treatment of epilepsy.
The Acquisition Details
Lundbeck, a global pharmaceutical company with a long history, has agreed to purchase all outstanding shares of Longboard Pharmaceuticals for $60 per share in cash. This acquisition represents a 54.2% premium to Longboard’s closing stock price on the day prior to the announcement and a 77% premium to the average stock price for the month of September.
The Strategic Move
The acquisition is a strategic move by Lundbeck to enhance its portfolio of therapies for rare neurological disorders. Longboard Pharmaceuticals has been a key player in the development of treatments for severe and rare epilepsies, particularly those associated with developmental and epileptic encephalopathies (DEEs). The company’s lead asset, bexicaserin, is currently in late-stage clinical development and has shown promising results in reducing seizure frequency in patients with DEEs.
Bexicaserin: A Promising New Drug
Bexicaserin, the focal point of the acquisition, is an orally available and centrally acting superagonist of the 5-HT2C receptor. This receptor plays a crucial role in regulating seizure severity, and bexicaserin’s high specificity and selectivity for the 5-HT2C receptor subtype could limit adverse effects associated with other 5-HT2-targeting drugs. The drug has received significant attention for its potential to treat both Dravet syndrome and Lennox-Gastaut syndrome, two rare and severe forms of epilepsy that have few approved treatments.
Clinical Trials and Efficacy
Bexicaserin has already shown impressive efficacy in clinical trials. In a Phase 1b/2a study, patients with DEEs experienced a median 53.3% reduction in seizure frequency during the 75-day treatment period. More recently, nine-month open-label data have demonstrated a 57.7% reduction in countable motor seizures. The drug is currently undergoing global Phase 3 testing in Dravet patients aged 2 and older as part of a broader program to evaluate its efficacy in approximately 480 patients with various DEEs.
Regulatory Pathway
The acquisition is contingent on regulatory clearances and customary conditions. The transaction must pass through several hurdles, including the tendering of Longboard’s outstanding voting shares and obtaining necessary approvals from regulatory bodies. Despite these challenges, both companies are optimistic about the future of bexicaserin and its potential to drive growth for Lundbeck into the next decade.
Lundbeck’s Neuro-Rare Pipeline
Lundbeck has been focusing on rare neurological diseases as a key area for pipeline expansion. The company’s top-selling product, Rexulti, has seen significant growth in recent years, expanding its approved uses to include agitation caused by Alzheimer’s disease. This expansion has contributed to a 16% increase in revenue last year, reaching approximately $661 million.
The acquisition of Longboard Pharmaceuticals aligns with Lundbeck’s strategy to strengthen its neuro-rare franchise. The company projects that bexicaserin could achieve peak sales of $1.5 billion to $2 billion by 2028, making it a cornerstone of their neuro-rare disease portfolio.
Market Impact and Industry Reactions
The acquisition has generated significant interest in the pharmaceutical industry. Analysts at Truist Securities have noted that the deal came earlier than expected and may have undervalued bexicaserin. However, they acknowledge that Lundbeck believes the drug can generate $1.5-2 billion in peak sales, which could be a significant boon to their neuro-rare franchise.
Other companies involved in treating DEEs, such as Jazz Pharmaceuticals and Takeda Pharmaceutical, have also been making headlines. Jazz Pharmaceuticals’ cannabis-derived Epidiolex, for example, is approved for Dravet syndrome and Lennox-Gastaut syndrome but carries no black box warning for cardiovascular complications. Takeda Pharmaceutical’s drug candidate soticlestat recently failed Phase 3 trials in Dravet and Lennox-Gastaut syndromes, highlighting the challenges in treating these rare conditions.
Future Outlook
The acquisition of Longboard Pharmaceuticals is a transformative step for Lundbeck, positioning the company as a leader in the treatment of rare neurological disorders. With bexicaserin poised to enter the market in 2028, Lundbeck is set to address a critical unmet need for patients suffering from severe and rare epilepsies. The deal underscores the growing interest in DEEs and rare epilepsies, with several companies investing heavily in this area.
In conclusion, the acquisition of Longboard Pharmaceuticals by Lundbeck marks a significant milestone in the treatment of rare neurological disorders. With bexicaserin at the forefront, Lundbeck is poised to revolutionize the management of DEEs, offering new hope to patients and their families affected by these debilitating conditions.
