Lundbeck to Acquire Chelsea Therapeutics in $658-Million Deal

H. Lundbeck A/S and Chelsea Therapeutics International, Ltd. recently announced the companies have entered into a definitive agreement under which Lundbeck will acquire Chelsea. Under the terms of the agreement, Lundbeck will commence a tender offer for all outstanding shares of Chelsea, whereby Chelsea stockholders will be offered an upfront payment and contingent value rights (CVRs), representing a total potential consideration of up to USD 7.94 per share, or USD 658 million (approximately DKK 3.5 billion) on a fully diluted basis. The total potential consideration represents an attractive premium of 59% over the closing price of Chelsea shares on May 7, 2014.

Consideration includes USD 6.44 per share in cash, or approximately $530 million on a fully diluted basis, as well as CVRs that may pay up to a total of an additional $1.50 upon achievement of certain commercial milestones related to NORTHERA’s commercial performance in the period 2015-2017. The proposed upfront per-share price represents a premium of approximately 29% over Chelsea’s closing price of $5.00 on May 7, 2014.

The terms of the CVR payments reflect the parties’ agreement over the sharing of potential economic upside benefits from certain future net sales of NORTHERA as described in the CVR agreement and do not necessarily reflect anticipated sales of the product. There can be no assurance such levels of net sales will occur or that any or all of the contingent payments will be made. 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.

The transaction will allow Lundbeck to leverage its expertise in rare neurologic disorders in the US through the upcoming launch of NORTHERA, which was approved by the FDA on February 18, 2014 for the treatment of symptomatic neurogenic orthostatic hypotension (NOH). NORTHERA is the first and 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 US, which currently includes Onfi, Sabril and Xenazine, and ahead of potential future products like desmoteplase and Lu AE58054 currently in clinical Phase III.

“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, President & Chief Executive Officer of Lundbeck. 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. As a company committed to people living with brain disorders, we are uniquely positioned to make NORTHERA available to those who need it most.”

H. Lundbeck A/S is a global pharmaceutical company specialized in brain diseases. For more than 50 years, it has been at the forefront of research within neuroscience. Its development and distribution of pioneering treatments continues to make a difference to people living with brain diseases. For more information, visit www.lundbeck.com.