H. Lundbeck has agreed to acquire Alder BioPharmaceuticals for up to $1.95 billion, in a deal designed to expand the buyer’s range of brain disease treatments to include Alder’s intravenous therapy for migraine prevention now under FDA review.

Eptinezumab (ALD403) is a monoclonal antibody (mAb) designed to prevent migraines in adults by targeting the calcitonin gene-related peptide (CGRP). If approved by the agency, eptinezumab would be the first IV CGRP therapy for migraine prevention to reach the market in the United States.

Alder submitted its BLA for eptinezumab in February; the FDA has set a PDUFA target decision date of February 21, 2020. Lundbeck said it intends to launch the drug soon after in the United States and worldwide. The company said it expects to submit eptinezumab for approval in Europe in 2020, followed by submissions elsewhere in the world.

Lundbeck said the commercialization of eptinezumab would accelerate and diversify Lundbeck’s revenue growth—and align with the company’s revised strategy, articulated in February, which calls in part for focusing on a broader range of brain diseases.

Also indicated for migraine prevention is Alder’s other pipeline candidate ALD1910, a preclinical mAb designed to inhibit pituitary adenylate cyclase-activating polypeptide (PACAP). Alder and Lundbeck said GMP and IND-enabling studies are underway for ALD1910.

In reporting second-quarter results on August 6, Alder included advancement of ALD1910 into the clinic among key milestones it said it anticipated would occur in the second half of this year—though no similar timeframe was cited in yesterday’s statement announcing the acquisition.

“Alder is an excellent strategic fit for Lundbeck’s focused expertise in brain diseases and organizational capabilities,” Lundbeck president and CEO Deborah Dunsire, MD, said in a statement. “This transaction flows from our strategic intent to expand and invest to grow. Migraine prevention is an attractive indication for us that leverages our specialized commercial expertise in delivering medicines for brain diseases.”

Alder president and CEO Bob Azelby cited Lundbeck’s network of neurology specialists and successful registration of products in more than 100 countries.

“Ideal partner”

“Lundbeck is the ideal partner to advance Alder’s mission of changing the treatment paradigm for migraine prevention. We believe this positions eptinezumab for a successful launch both in and outside of the United States,” Azelby stated.

Alder would be the second biopharma that Lundbeck acquires this year. On May 29, Lundbeck completed its up-to-$400 million purchase of Abide Therapeutics, a deal designed to bolster the buyer’s drug discovery efforts and pipeline in a key therapeutic area, neurology. Under Dunsire, who took office in September 2018, Lundbeck has focused on rebuilding its pipeline to make up for revenue lost after Onfi (clobazam) lost U.S. patent exclusivity last year.

Lundbeck projected that the acquisition of Alder would add to its core earnings per share in 2023, assuming FDA approval of eptinezumab in the first quarter of 2020, followed by regulatory approvals in other regions including Europe.

Lundbeck said it will commence a tender offer for all outstanding Alder shares. Alder shareholders will be offered $18 cash per share upfront, plus one non-tradeable Contingent Value Right (CVR) that entitles them to an additional $2 per share upon approval of eptinezumab by the European Medicines Agency (EMA), for a total potential consideration of $20 per share.

The upfront cash consideration represents a 79% premium to Alder’s shareholders based on the closing price on September 13, 2019 and an approximately 3% discount based on the 52-week high share price, Lundbeck said.

According to Lundbeck, the non-tradeable CVR will be paid upon the approval by the European Commission of a marketing authorization application. Lundbeck will acquire any shares of Alder not tendered into the tender offer through a merger for the same per share consideration as will be payable in the tender offer.

Lundbeck said it expects to fund the acquisition through existing cash resources and bank financing.

Alder’s board has unanimously approved the transaction, and will recommend that shareholders tender their shares to Lundbeck. The acquisition is expected to close in the fourth quarter of 2019, Lundbeck said, subject to customary closing conditions, including the tender of more than 50% of all shares of Alder outstanding at the expiration of the offer, and regulatory clearances that include a Hart-Scott-Rodino review in the U.S.

In addition to expanding in brain disease, Lundbeck’s strategy also includes pursuing new indications and improved formulations for existing brands; rebuilding the pipeline through internal R&D and external collaborations; maintaining its focus on high profitability with room for added investment; and enhancing our organizational agility and collaboration.

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