Chelsea stockholders would receive $6.44 a share in cash and contingent value rights of up to $1.50 a share.
The deal would give H. Lundbeck the rights to Chelsea's drug Northera, which the U.S. Food and Drug Administration recently approved and should release in the third quarter of 2014. The drug treats a rare form of low blood pressure linked to neurological disorders such as Parkinson's disease.
The stock was up 30.2% to $6.51 at 10 a.m.
For more on this story, read TheStreet's Adam Feuerstein's article here.