This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Lundbeck to Buy Chelsea Therapeutics for $658M

NEW YORK (The Deal) -- Central nervous system disorder specialist Chelsea Therapeutics International (CHTP) on Thursday, May 8, said it had signed up to a bid from Denmark's H. Lundbeck that values its stock at up to $658 million.

Chelsea, of Charlotte, N.C., said Lundbeck will offer $6.44 per share and so-called contingent value rights that could pay out another $1.50 if its Northera treatment meets targets after it is launched later this year. The two elements represent a per-share premium of 59% over Chelsea's Wednesday closing price, it noted.

Northera received FDA approval in February for the treatment of symptomatic neurogenic orthostatic hypotension, which causes dizziness as blood pressure falls. The deal ends months of speculation that Chelsea would choose a partner to commercialize the drug, though the Nasdaq-listed company has always insisted it could go it alone.

Chelsea in March reported a 2013 net loss of $16.4 million, down from a loss of $31.7 million the year earlier as R&D costs fell.

Must Read: Freeport-McMoRan Expands in Gulf of Mexico With $1.4B Deal

"This transaction provides attractive and certain upfront value to our stockholders, and enables them to participate in the potential commercial upside of Northera," said Chelsea Therapeutics President and CEO Joseph G. Oliveto in a statement. "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."

Oliveto's counterpart at Lundbeck, Ulf Winberg, said the acquisition reflects the company's "strategic and disciplined approach to acquisitions," and noted that Lundbeck will finance it out of existing resources.

Lundbeck is a brain disease specialist. Last year it partnered with Otsuka Pharmaceutical Co. Ltd. over an Alzheimer's drug it is developing in a deal that could net it $825 million. Lundbeck had a market value of Dkr29.9 billion on the Copenhagen exchange as of Thursday afternoon, with its share price little changed from Wednesday's close.

Lundeck said the Chelsea purchase will dilute cash flow and Ebit in 2014 though will boost earnings in 2016. Lundbeck expects to incur 500 million Danish kroner ($92.9 million) of costs related to the purchase assuming it closes on July 1.

The companies don't know exactly when it will close but are targeting third-quarter completion. Lundbeck has premised its offer on gaining a majority of acceptances. The deal also needs various regulatory clearances.

Moelis & Co. is advising Lundbeck, whose law firm is Cravath, Swaine & Moore LLP. Deutsche Bank Securities Inc. and Torreya Capital are financial advisers to Chelsea, and Morgan, Lewis & Bockius LLP is providing legal advice.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
CHTP $0.00 0.00%
AAPL $121.30 0.00%
FB $94.01 0.00%
GOOG $625.61 0.00%
TSLA $266.15 0.00%

Markets

Chart of I:DJI
DOW 17,689.86 -56.12 -0.32%
S&P 500 2,103.84 -4.79 -0.23%
NASDAQ 5,128.2810 -0.5040 -0.01%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs