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Longboard (LBPH.US) surged more than 50% before the market opened! Pharmaceutical giant Lundbeck wants to swallow the company for $2.6 billion

AInvestMonday, Oct 14, 2024 8:20 am ET
1min read

Danish pharmaceutical giant Lundbeck said it will acquire Longboard Pharmaceuticals (LBPH.US) for $2.6 billion in equity value. The news boosted Longboard's stock price by more than 50% in pre-market trading in the U.S. As of last week's close of U.S. stock trading, Longboard's total market value was about $1.5 billion, and its share price closed at $38.90, both far below the scale of Lundbeck's acquisition.

According to the information, Lundbeck will start a tender offer for all outstanding shares of Longboard's common stock, and Longboard's shareholders will receive up to $60 per share.

The transaction has been unanimously approved by the boards of directors of both companies, and is expected to be completed in the fourth quarter of this year.

Through this transaction, Danish pharmaceutical giant Lundbeck will successfully obtain bexicaserin, a drug under development for the treatment of seizures associated with DEE, including Dravet syndrome, Lennox-Gastaut syndrome, and other very rare seizure symptoms.

The company is expected to fund the transaction through existing free cash flow resources and a certain amount of bank financing tools.

Lundbeck also expects integration costs of about $80 million, which mainly affects the 2024 financial report, and will be adjusted accordingly in the adjusted core profit.

Analysts said that through this acquisition, Lundbeck hopes to strengthen its leadership in the field of rare neurological diseases and provide patients with more innovative treatment options. By acquiring Longboard's core assets - bexicaserin, Lundbeck can significantly enhance its pipeline and future product scale in the field of rare neurological diseases.

Lundbeck, headquartered in Denmark, is a globally renowned pharmaceutical company that focuses on researching, developing, manufacturing, and selling drugs for the treatment of brain mental diseases and rare neurological diseases, such as depression, schizophrenia, Alzheimer's disease, and Parkinson's disease.

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