Lundbeck to Buy Alder BioPharma in US$2 Billion Deal

Alder BioPharmaceuticals (NASDAQ:ALDR) announced on Monday (September 16) that it has struck a deal to be acquired by Lundbeck (OTC Pink:HLUYY) in a US$2 billion takeover.

The Denmark-based company’s move to acquire Alder BioPharma puts Lundbeck in a position to potentially divert its pending patent expirations by adding Alder BioPharma’s migraine drug eptinezumab.

According to the press release, Lundbeck will initiate a tender offer to acquire all of the outstanding shares of Alder BioPharma at US$18 each up front with an additional US$2 per share once eptinezumab is approved by the European Medicines Agency.

Shares of Alder BioPharma skyrocketed nearly 84 percent from its previous close of US$10.06 to finish Monday’s trading session at US$18.50.

In a Lundbeck conference call with investors on Monday, Lundbeck CEO Deborah Dunsire said the acquisition of Alder BioPharma will extend Lundbeck’s hand in therapies for brain diseases and building a market for migraines. “(This is a) large market with substantial unmet medical needs,” she said.

Dunsire added that eptinezumab has the potential to become a blockbuster drug — a label used for treatments that reach sales of roughly US$1 billion per year.

A biologics license application for eptinezumab was submitted to the US Food and Drug Administration (FDA) by Alder BioPharma in February of this year. According to the FDA, when companies develop new biological products, they must submit this application to the agency to ask for permission to market the product.

The FDA has given the company a Prescription Drug User Fee Act action date of February 21, 2020. Should the drug be approved, it will be the first quarterly calcitonin gene-related peptide (CGRP) infusion therapy designated for preventing migraines.

Lundbeck will then submit eptinezumab to the European Union for approval sometime next year in addition to other regions such as China and Japan.

To date, eptinezumab has been the focus of various studies to determine its safety and efficacy in chronic and episodic migraines. More than 3,000 patients have participated in studies, and an open-label safety study is currently ongoing.

According to the Migraine Research Foundation, migraines are the third most common illness in the world and the sixth most debilitating condition worldwide. In the US alone, roughly 39 million people are impacted by migraines. That number is estimated to be one billion globally. Migraines typically last between four and 72 hours with symptoms including nausea, vomiting, loss of appetite and sensitivity to light.

A research report from GlobalData estimates that drug sales for migraines totaled US$3.3 billion in 2016 and are projected to reach US$8.7 billion by 2026, growing at a compound annual growth rate of 10.3 percent. The report said the market for these sales is split between the US, France, Germany, Italy, Spain, the UK and Japan.

The report further says sales will surge based on at least seven late-stage pipeline drugs, which are split into three different categories: CGRP monoclonal antibodies, gepants and ditans.

In light of Monday’s announcement, EvaluatePharma analysis says that the anti-CGRP market is now overcrowded, leading to a price war. It also says that CGRP sales had a rough start to the year on the heels of three similar drugs entering the market months apart.

According to EvaluatePharma’s analysis, anti-CGRP drug revenues for 2024 are projected as follows: Amgen (NASDAQ:AMGN) and Novartis’ (NYSE:NVS) treatment aimovig is projected to reach US$2.05 billion; Eli Lilly & Co.’s (NYSE:LLY) drug Emgality will touch US$1.5 billion; Teva Pharmaceuticals’ (NYSE:TEVA) treatment Ajovy is estimated to generate US$847 million; and Alder BioPharma and Lundbeck’s eptinezumab is estimated to reach US$773 million in sales.

In addition to adding eptinezumab to its pipeline, Lundbeck will also add an early-stage antibody to its pipeline called ALD1910, which targets migraines and other pain-related conditions. The deal is projected to close sometime in the fourth quarter of this year if all closing conditions are met.

While shares of Alder BioPharma soared on Monday, Lundbeck’s share price on the OTC Markets dipped 0.89 percent to close the trading session at US$34.63.

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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.