Lundbeck will launch a tender offer for all outstanding shares of Chelsea, offering Chelsea stockholders an upfront payment and contingent value rights (CVRs), up to a total of $7.94 per share, or $658 million on a fully diluted basis. That total represents a 59% premium over the closing price on May 7.
The deal will allow Lundbeck to leverage its experience in rare neurologic disorders in the U.S. through the upcoming launch of NORTHERA, which was approved by the FDA Feb. 18 for the treatment of symptomatic neurogenic orthostatic hypotension (NOH). NORTHERA is the only therapy approved by the FDA that demonstrates symptomatic benefit in adult patients with NOH caused by primary autonomic failure (Parkinson's disease, multiple system atrophy and pure autonomic failure), dopamine beta hydroxylase deficiency and non-diabetic autonomic neuropathy. NORTHERA is expected to be launched in the second half of 2014 and will strengthen Lundbeck's existing neurology franchise in the U.S., which currently includes Onfi, Sabril and Xenazine, and ahead of potential future products like desmoteplase and Lu AE58054 currently in phase III trials.
Lundbeck intends to acquire any shares of Chelsea not tendered into the tender offer through a merger for the same per share consideration as will be payable in the tender offer. The merger will be effected as soon as possible after the closing of the tender offer. Chelsea’s board of directors has unanimously approved the transaction, expected to close in the third quarter of 2014.
“The proposed strategic acquisition of Chelsea—and the launch of its lead therapy, NORTHERA—aligns with Lundbeck's core strengths in addressing rare and challenging neurological disorders,” said Ulf Wiinberg, president and CEO of Lundbeck. “As a company committed to people living with brain disorders, we are uniquely positioned to make NORTHERA available to those who need it most.”
Joseph G. Oliveto, president and CEO of Chelsea Therapeutics, said, “This transaction provides attractive and certain upfront value to our stockholders, and enables them to participate in the potential commercial upside of NORTHERA. 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.”