Biopharmaceutical company H. Lundbeck A/S (Lundbeck) and Longboard Pharmaceuticals Inc (NASDAQ: LBPH), a clinical-stage biopharmaceutical company, on Monday announced an agreement for Lundbeck to acquire Longboard in a deal valued at approximately USD2.6bn.

This strategic move is aimed at bolstering Lundbeck's Focused Innovator strategy and enhancing its capabilities in treating rare neurological conditions, particularly Developmental and Epileptic Encephalopathies (DEEs), an area with significant unmet medical needs.

The acquisition focuses on Longboard's lead asset, bexicaserin, which is in late-stage development for treating DEEs, including Dravet syndrome and Lennox-Gastaut syndrome. Bexicaserin has demonstrated promising anti-seizure effects and employs a novel mechanism targeting 5-HT2C receptors, positioning it as a potential best-in-class treatment. A global phase III trial for bexicaserin commenced in September 2024.

Under the terms of the agreement, Lundbeck will initiate a tender offer at USD60.00 per share for Longboard's outstanding stock, representing a 77% premium over the 30-day volume-weighted average price. The deal is expected to close in the fourth quarter of 2024, pending regulatory approvals and shareholder agreements. Funding will come from Lundbeck's existing cash resources and bank financing.

This acquisition not only complements Lundbeck's pipeline but also aims to establish a strong franchise in neuro-rare diseases, with global peak sales potential for bexicaserin estimated between USD1.5bn and USD2bn. The transaction is set to incur approximately USD80m in integration costs, which will affect Lundbeck's financials in 2024.

Lundbeck's commitment to advancing brain health aligns with its goal of delivering innovative treatments for neurological disorders, reinforcing its leadership in this critical therapeutic area.