Lundbeck Acquires Longboard for $2.6B to Boost Neurology Portfolio

October 15, 2024
Lundbeck Acquires Longboard for $2.6B to Boost Neurology Portfolio

Lundbeck, the Danish drugmaker, has announced its acquisition of Longboard Pharmaceuticals for $2.6 billion, centering the deal around Longboard’s promising experimental brain medicine, bexicaserin. This medicine is in late-stage clinical testing for treating developmental and epileptic encephalopathies (DEEs), a group of rare brain disorders characterized by seizures and developmental delays. Affecting over 220,000 people in the United States, about half of these DEE patients lack approved treatments, highlighting an urgent need for new therapies.

Strategic Importance of the Acquisition

Lundbeck will acquire Longboard at $60 per share, representing a significant 54% premium over Longboard’s stock price before the announcement. With the transaction expected to close by the end of the year, Lundbeck aims to fill a critical treatment gap for DEEs and potentially position bexicaserin as a blockbuster product. The expectation is for annual sales to reach between $1.5 billion and $2 billion, with bexicaserin anticipated to enter the market by late 2028. This timeline aligns perfectly with the expiration of the main patent protecting Lundbeck’s top-selling antipsychotic medication, Rexulti, in 2029.

Potential of Bexicaserin

Bexicaserin has shown compelling effectiveness in mid-stage studies by boosting a protein that releases the calming neurotransmitter GABA, which is valuable in treating excited brain conditions like epilepsies. Its patent protection until 2041 offers a lengthy period of market exclusivity, safeguarding its revenue stream against generic competition. This strategic acquisition aims to bolster Lundbeck’s neuro-rare franchise and sustain growth into the next decade, coinciding with the patent cliff for some of its significant drugs.

Market and Patent Protection

Launched from Arena Pharmaceuticals in late 2020, Longboard brings a focused approach to neurological conditions, enabled by significant funding during its inception and subsequent IPO. The acquisition occurs during a slow period for high-value biopharmaceutical deals, marking one of the more significant transactions in 2024. It highlights an overarching trend of strategic acquisitions aimed at securing innovative treatments for neurological disorders, reflecting the intense competition and patent expirations facing established pharmaceutical companies.

Conclusion

Lundbeck, a pharmaceutical company based in Denmark, has announced it will acquire Longboard Pharmaceuticals for $2.6 billion. This acquisition is primarily focused on Longboard’s innovative brain drug, bexicaserin, which is currently in the late stages of clinical trials. Bexicaserin is designed to treat developmental and epileptic encephalopathies (DEEs), a group of uncommon brain disorders that manifest as seizures and developmental delays. In the United States alone, DEEs affect more than 220,000 individuals. Among these patients, approximately fifty percent have no approved treatment options available, which underscores the pressing need for new therapeutic interventions. This acquisition highlights both companies’ commitment to addressing unmet medical needs and could potentially bring significant advancements in care for those suffering from these challenging neurological conditions. The move also signals Lundbeck’s strategic intent to expand its neuroscience portfolio and reinforce its position as a leader in developing treatments for brain disorders.

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