Lundbeck to buy Alder BioPharmaceuticals for nearly $2 billion, gaining rights to CGRP inhibitor eptinezumab

Lundbeck agreed to acquire Alder BioPharmaceuticals for $18.00 per share in cash, as well as a contingent value right (CVR) worth as much as $2.00 per share, the companies said Monday. Under the deal, which is valued at up to $1.95 billion, Lundbeck will gain rights to two experimental therapies for the prevention of migraine, including the CGRP inhibitor eptinezumab and the PACAP inhibitor ALD1910.

Commenting on the transaction, which is expected to close in the fourth quarter, Lundbeck CEO Deborah Dunsire said "Alder is an excellent strategic fit," adding "migraine prevention is an attractive indication for us that leverages our specialised commercial expertise in delivering medicines for brain diseases." The companies noted that the upfront cash portion of the deal represents a 79% premium to Alder's closing share price on September 13.

Eptinezumab is currently under regulatory review in the US, with the FDA expected to make a decision on approval of the intravenous monoclonal antibody by February 21 next year. The drugmakers noted that the CVR is tied to European clearance of eptinezumab, with Lundbeck indicating that it expects to file the therapy for approval in this region during 2020, followed by submissions in other markets, including China and Japan. 

In 2017, Alder announced that eptinezumab had met the primary and key secondary goals in the Phase III PROMISE 1 trial of patients with frequent episodic migraine. The high and low doses of the drug demonstrated significant reductions in monthly migraine days from baseline over weeks one through 12 of 4.3 days and 3.9 days, respectively, compared to an average 3.2 days for placebo. However, Alder's shares still declined at the time as the results fell short of expectations. 

The company later reported that the late-stage PROMISE 2 study of eptinezumab for chronic migraine prevention had also met its main goal and all key secondary endpoints. Meanwhile, Alder plans to initiate a Phase III study evaluating the drug, also known as ALD403, as a treatment for acute migraine in the second half of 2019. 

According to Lundbeck, the purchase of Alder will accelerate "the build of [our] late-stage pipeline," while Dunsire noted that "with patent protection going into the 2030's, eptinezumab will be a significant and sustainable growth driver." The company explained that the transaction "is expected to accelerate and diversify…revenue growth with the expected US launch of eptinezumab for preventive treatment of episodic and chronic migraine in 2020 and the expected expansion of indications for the product." 

Alder's board has unanimously approved the transaction with Lundbeck noting that the purchase is forecast to be dilutive to earnings this year. Meanwhile, the Danish company indicated that the acquisition is expected to be accretive to core earnings in 2023 assuming FDA approval in the first quarter of 2020.

"The deal comes as no surprise. There are some patent expirations due on key products in the coming years, so they have to strengthen their product portfolio," remarked Sydbank analyst Soren Lontoft. The analyst added "they have been missing late-stage products, and that is what they get with this acquisition." In May, Lundbeck agreed to acquire Abide Therapeutics for $250 million upfront, gaining access to the latter's lead candidate ABX 1431, an inhibitor of the serine hydrolase monoacylglycerol lipase under development for Tourette's syndrome and neuropathic pain.

For related analysis, see ViewPoints: The dude may Abide but investors want more from Lundbeck.

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