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24-Oct-2019

Lundbeck completes the acquisition of Alder BioPharmaceuticals – a company committed to transforming migraine treatment and prevention

  • Enhances Lundbeck’s leading portfolio of brain disease therapies with Alder’s highly complementary intravenous (IV) therapy for migraine prevention, eptinezumab
  • Eptinezumab is an investigational monoclonal antibody (mAb) for migraine prevention targeting the calcitonin gene-related peptide (CGRP) with a PDUFA action date of 21 February 2020
  • Following the transaction, Lundbeck now expects core EBIT to reach DKK 4.6-5.0 billion and reported EBIT to reach DKK 3.2-3.6 billion for 2019 compared to previously DKK 5.0-5.4 billion and DKK 4.2-4.6 billion, respectively

Valby, Denmark, 22 October 2019 - H. Lundbeck A/S (Lundbeck) today announced that it has successfully completed the acquisition of Alder BioPharmaceuticals, Inc. (NASDAQ: ALDR) (“Alder”) a migraine-focused company based in Bothell, Washington, for an aggregate cash consideration of up to approximately USD 1.95 billion (DKK 13 billion) net of cash, on a fully diluted basis. The transaction, which was announced on 16 September 2019, significantly accelerates and strengthens the build of Lundbeck’s pipeline. Lundbeck acquired Alder for an upfront payment of USD 18.00 per share, in cash, along with one non-tradeable Contingent Value Right (CVR) of USD 2.00 per share, payable – subject to certain terms and conditions - upon approval of eptinezumab by the European Medicines Agency (EMA), representing a total potential consideration of USD 20.00 per share.

Dr. Deborah Dunsire, President and CEO of Lundbeck, commented “I am very excited to welcome Alder to Lundbeck. The completion of our acquisition of Alder with the exciting investigational drug, eptinezumab, will expand the breadth of our portfolio into migraine and represents a major step in the execution of our Expand and Invest to Grow strategy and Lundbeck can now take part in helping the migraine community where so much unmet need remains.”   

Alder is developing eptinezumab for the preventive treatment of migraine in adults. Eptinezumab is an investigational monoclonal antibody (mAb) that is administered as a quarterly 30-minute IV infusion. Eptinezumab was designed for immediate and complete bioavailability with high specificity and strong binding for suppression of calcitonin gene-related peptide (CGRP), a neuropeptide believed to play a key role in mediating and initiating migraines. Alder submitted a Biologics License Application (BLA) to the U.S. Food and Drug Administration (FDA) for eptinezumab in February 2019 and the FDA has set a Prescription Drug User Fee Act (PDUFA) action date of 21 February 2020. If approved by the FDA, it will be the first IV CGRP therapy for migraine prevention.

Lundbeck expects to submit eptinezumab for approval to regulatory authorities in the European Union during 2020, followed by submissions for approval in other regions around the world, including China and Japan. Alder has also been developing ALD1910, a mAb designed to inhibit pituitary adenylate cyclase-activating polypeptide (PACAP) for migraine prevention. Eptinezumab, together with ALD1910, will help establish Lundbeck as an emerging leader in migraine and other pain syndromes.

The acquisition of Alder will support Lundbeck’s aim to deliver long-term sustainable growth and is consistent with capital allocation priorities. The transaction is expected to accelerate and diversify Lundbeck’s revenue growth with the expected U.S. launch of eptinezumab for preventive treatment of episodic and chronic migraine in 2020 and the expected expansion of indications for the product.

Additional information about the tender offer and acquisition

The tender offer for all of the outstanding shares of Alder common stock expired at midnight, Eastern time, on 21 October 2019 (one minute after 11:59 P.M., Eastern time, on 21 October 2019). 

Computershare Trust Company, N.A., as the depositary for the tender offer, has advised that, as of the expiration of the tender offer, excluding Alder shares tendered by notice of guaranteed delivery, 53,991,109 shares were validly tendered and not withdrawn pursuant to the tender offer, representing approximately 63,8% of the issued and outstanding shares of Alder. The condition to the tender offer that at least one share more than 50% of the outstanding Alder shares at the expiration of the tender offer be validly tendered and not validly withdrawn and all other conditions to the tender offer and the closing and completion of the acquisition have been satisfied. Accordingly, Violet Acquisition Corp., a wholly owned indirect subsidiary of Lundbeck, has accepted for payment and will promptly pay for all shares that were validly tendered and not withdrawn.

Lundbeck will today move forward with a merger of Violet Acquisition Corp. with Alder under Section 251(h) of the General Corporation Law of the State of Delaware (DGCL). Each share issued and outstanding immediately prior to the effective time of the merger (other than shares (i) held in the treasury of Alder or owned by Lundbeck, Violet Acquisition Corp., or Alder, or any direct or indirect wholly-owned subsidiary thereof, immediately prior to the effective time of the merger or (ii) held by a holder who is entitled to demand and has properly demanded appraisal of such shares in accordance with Section 262 of the DGCL) will be cancelled and converted into the right to receive USD 18.00 per share, payable net to the holder in cash, without interest, subject to any withholding of taxes required by applicable law, along with one CVR per share, the same consideration per share offered in the tender offer. The non-tradeable CVR is – subject to certain terms and conditions - payable upon the approval for eptinezumab by the European Commission of a "Marketing Authorization Application" for eptinezumab in the European Union, through the centralized procedure. There can be no assurance such approval will occur or that any contingent payment will be made. Following the acquisition, Alder shares will no longer be listed on NASDAQ.

Lundbeck funded the acquisition through existing cash resources and bank financing.

Financial guidance

As communicated in company release no. 672 dated 16 September 2019, the acquisition of Alder will impact Lundbeck's financial guidance for 2019. While the transaction is not expected to have impact on revenue in 2019, it will be dilutive to both EBIT and cash flow for the year.

Lundbeck expects in 2019 to incur transaction costs of approximately 200 million related to the acquisition of Alder and integration and retention costs of DKK 400-500 million of which DKK 50-100 million will impact the P&L in 2020. Furthermore, Lundbeck will recognize DKK 325-400 million from Alder’s operating costs for the remainder of the year

Lundbeck’s guidance for core EBIT will only be impacted by the recognition of Alder’s operating costs.

Financial guidance

DKK

 

Previous FY 2019 guidance

Revised FY 2019 guidance

Revenue

 

 16.3 - 16.7 billion

 16.3 - 16.7 billion

EBIT

 

 4.2 - 4.6 billion

 3.2 - 3.6 billion

Core EBIT

 

5.0 - 5.4 billion

4.6 - 5.0 billion

Tax rate

 

26-28%

26-28%

 

Editor Details

  • Company:
    • H. Lundbeck A/S
  • Name:
    • H. Lundbeck A/S
Last Updated: 24-Oct-2019