Why Is Epilepsy Focused Longboard Pharmaceuticals Stock Trading Higher On Monday?

Denmark-based H. Lundbeck A/S on Monday agreed to acquire Longboard Pharmaceuticals, Inc LBPH for $60.00 per share in cash.

The transaction is valued at approximately $2.6 billion in equity value and $2.5 billion (approximately 17 billion Danish krone) net of cash on a fully diluted basis.

The M&A transaction is expected to close in the fourth quarter of 2024.

Also Read: Longboard Pharmaceuticals Boasts High-Value Epilepsy Assets, Analyst Initiates Coverage.

Longboard is a clinical-stage biopharmaceutical company focused on developing medicines for neurological diseases.

The company’s lead asset, bexicaserin is under development for several neurological indications.

Last month, the company released interim results from its ongoing 52-week open-label extension of the PACIFIC Study evaluating bexicaserin (LP352) in participants ages 12-65 with Developmental and Epileptic Encephalopathies (DEEs).

Recently, bexicaserin received FDA Rare Pediatric Disease designation and Orphan Drug designation for Dravet syndrome.

The company initiated a global Phase 3 DEEp SEA Study with bexicaserin for seizures associated with Dravet syndrome in participants two years of age and older.

The bexicaserin asset complements Lundbeck’s mid-to-late-stage pipeline and diversifies revenue growth following its expected launch in the fourth quarter of 2028. Lundbeck estimates the global peak sales potential between $1.5 billion and $2 billion.

Following the closing of the transaction, Lundbeck will focus on de-leveraging, and leverage is expected to be in Lundbeck’s target range of <2.5x NIBD/EBITDA within 18-24 months.

The company expects to recognize integration costs of ~$80 million (approximately 550 million Danish krone), which predominantly will impact 2024 and will be adjusted for in Adjusted EBITDA.

Price Action: At last check on Monday, LBPH stock was up 51.3% to $58.84 during the premarket session.

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Image via Longboard Pharmaceuticals