Longboard Pharmaceuticals shares soar on $2.6 billion Lundbeck acquisition deal

Investing.com -- Shares in Longboard Pharmaceuticals (NASDAQ:LBPH ) jumped by more than 51% in premarket US trading on Monday after Denmark's H Lundbeck A/S announced that it had agreed to purchase the company in a $2.6 billion deal.

In a statement, Lundbeck said it would buy Longboard, which is known for its potential epilepsy medication, for $60 per share, representing a premium of 54.2% to the stock's last closing price of $38.90.

Longboard has said its lead asset, bexicaserin, has shown encouraging anti-seizure reduction to date in preclinical and clinical studies. Bexicaserin is now being evaluated in a global late-stage clinical program.

"This transformative transaction will become a cornerstone in Lundbeck’s neuro-rare franchise, with a potential to drive growth into the next decade," said Lundbeck CEO Charl van Zyl in a statement.

"Bexicaserin addresses a critical unmet need for patients suffering from rare and severe epilepsies, for which there are very few good treatment options available."

The deal, which Lundbeck has said it will fund through cash resources on hand and existing bank financing facilities, is expected to close in the fourth quarter pending regulatory clearance. The merger would occur "as soon as practicable" after the closing of the tender offer, the firm said.

Lundbeck said it plans to launch bexicaserin in the fourth quarter of 2028, adding that the drug is estimated to reach global peak sales of between $1.5 billion to $2 billion.

"We believe the long-term opportunity for bexicaserin is significant, and we currently model [approximately $2 billion] in peak global sales," analysts at Guggenheim Partners said in a note to clients following the announcement.

"Overall, we like the deal and believe it bodes well for other epilepsy names in our space, such as Xenon Pharmaceuticals (NASDAQ:XENE ) and Praxis Precision Medicines (NASDAQ:PRAX )."

Source: Investing.com