Denmark’s Lundbeck has boosted its neurology portfolio with a $658m agreement to buy US company Chelsea Therapeutics.
The cash deal – valued at up to $7.94 per share – would add a marketed drug for symptoms associated with Parkinson’s disease and conditions to Lundbeck’s product portfolio, as well as a series of pipeline compounds with potential in immunological disorders.
Chelsea’s marketed product – Northera (droxidopa) – was given a green light by the US FDA in February as the first drug specifically approved to treat symptomatic neurogenic orthostatic hypotension (NOH), a disorder caused by failure to produce and or release adequate amounts of norepinephrine upon standing.
NOH is seen in patients with Parkinson’s as well as other autonomic disorders multiple system atrophy and pure autonomic failure – as well as dopamine beta hydroxylase deficiency and non-diabetic autonomic neuropathy – and affects between 80,000 and 150,000 people in the US. In extreme cases patients can stand for as little as a few minutes per day.
Northera is due to be launched in the US later this year and will flesh out Lundbeck’s portfolio of rare neurological disorder therapies, which include epilepsy drugs Onfi (clobazam) and Sabril (vigabatrin) and Xenazine (tetrabenazine) for Huntington’s disease, as well as late-stage pipeline candidates desmoteplase for stroke and Lu AE58054 for Alzheimer’s disease.
The drug acts as an oral prodrug that is converted into norepinephrine in the body, in a similar manner to how Parkinson’s therapy levodopa is converted to dopamine, and has been on the market in Japan for more than two decades.
“I believe this offer represents an attractive offer to the stockholders of Chelsea and is consistent with Lundbeck’s strategic and disciplined approach to acquisitions,” said Ulf Wiinberg, the Danish pharma company’s chief executive.
The deal comes as Lundbeck saw first-quarter revenues slide 7 per cent to 3.59bn krone ($667m), as generic erosion ate into older products and it waits for new drugs such as antidepressant Brintellix (vortioxetine) and Abilify Maintena (aripiprazole) to build sales momentum.
“Lundbeck’s expertise in commercializing rare disorder CNS products will enable a rapid and successful launch of NORTHERA into the U.S. market and ultimately will provide added benefit to patients suffering from NOH,” said Wiinberg. Chelsea has predicted in the past that Northera could achieve sales of $300m or more at peak in the US market alone.
Lundbeck said the agreement is a 59 per cent premium to Chelsea’s closing share price on May 7.