On Monday, Longboard Prescription drugs Inc (NASDAQ:LBPH) was downgraded from Purchase to Impartial by a B.Riley analyst, regardless of a rise within the worth goal to $60 from $45. The adjustment follows Longboard’s announcement of a definitive settlement to be acquired by Lundbeck for roughly $2.6 billion, equal to $60 per share. This acquisition worth represents a 77% premium over Longboard’s 30-day volume-weighted common inventory worth as of September 30, 2024.
The boards of administrators for each Longboard and Lundbeck have given unanimous approval to the transaction, which is anticipated to finalize within the fourth quarter of this yr. The acquisition is thought to be cheap by the analyst, particularly contemplating Longboard’s distinctive method to its pivotal program concentrating on developmental and epileptic encephalopathies (DEEs), making it the primary firm to make use of a basket-style format for such a program.
Longboard’s technique goals to broaden its market attain past Dravet syndrome (DS) and Lennox-Gastaut syndrome (LGS), probably tapping right into a market twice the scale of the DS and LGS area alone. Throughout Lundbeck’s convention name, administration indicated that the acquisition worth is about 1.5 occasions the estimated peak gross sales for Longboard, which is according to premiums paid for comparable pre-phase III belongings.
The analyst agrees with Lundbeck’s administration that Longboard’s generated knowledge has been promising. The acquisition is seen as a strategic transfer by Lundbeck, contemplating the de-risked profile of Longboard’s program and its potential market growth. The closing of this deal is ready to mark a big milestone for Longboard Prescription drugs because it joins forces with Lundbeck.
In different current information, Lundbeck has reached an settlement to accumulate Longboard Prescription drugs in a transaction valued at roughly $2.6 billion. The acquisition is anticipated to reinforce Lundbeck’s neuro-rare illness portfolio with the addition of Longboard’s lead asset, bexicaserin, which is at the moment in part III trials. Bexicaserin, a therapy for seizures related to Developmental and Epileptic Encephalopathies (DEEs), has obtained Breakthrough Remedy Designation from the U.S. FDA.
Longboard has additionally initiated a worldwide Section 3 medical trial for bexicaserin. The drug has been granted each Breakthrough Remedy and Orphan Drug designations by the FDA, which may probably expedite its improvement and assessment course of. Analyst corporations, together with H.C. Wainwright, Baird, and Truist Securities, have expressed confidence in Longboard’s development prospects, sustaining optimistic rankings for the corporate.
These current developments spotlight the continuing efforts of Lundbeck and Longboard to handle the numerous unmet wants in epilepsy therapy, with a deal with enhancing their portfolios and advancing medical trials.
InvestingPro Insights
To enhance the evaluation of Longboard Prescription drugs Inc’s (NASDAQ:LBPH) acquisition by Lundbeck, InvestingPro knowledge gives extra context to the corporate’s monetary place. In response to InvestingPro Suggestions, Longboard holds extra cash than debt on its stability sheet, and its liquid belongings exceed short-term obligations. These components probably contributed to creating the corporate a horny acquisition goal for Lundbeck.
The acquisition worth of $60 per share aligns with InvestingPro’s commentary of a “vital return over the past week” and a “massive worth uptick over the past six months” for Longboard’s inventory. This displays the market’s optimistic response to the corporate’s potential and the premium supplied within the deal.
It’s value noting that previous to the acquisition announcement, InvestingPro knowledge indicated that Longboard was not worthwhile over the past twelve months and analysts didn’t anticipate the corporate to be worthwhile this yr. This context underscores the strategic nature of Lundbeck’s acquisition, specializing in Longboard’s promising pipeline somewhat than its present profitability.
For buyers looking for a deeper understanding of Longboard Prescription drugs and comparable corporations within the biotech sector, InvestingPro gives 12 extra suggestions, offering a complete view of the corporate’s monetary well being and market place.
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