H. Lundbeck (LUN) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition advances a focused innovator strategy, expanding the neuro-rare franchise and rare epilepsy expertise, particularly in developmental and epileptic encephalopathies (DEEs).

• Adds bexicaserin (also referred to as bexigcitrin), a late-stage, highly differentiated asset with FDA Breakthrough Therapy Designation, targeting Dravet, Lennox-Gastaut, and other DEEs.

• Addresses significant unmet needs, with broad potential across multiple DEEs and complements existing neuroscience expertise.

• Supports long-term sustainable growth ambitions and leverages existing U.S. presence in rare epilepsies.

• Integration expected to be low complexity, leveraging Longboard’s 85-employee base and ongoing phase III programs.

Financial terms and conditions

• All-cash transaction valued at $2.5 billion net of cash (approx. $2.6 billion equity value), at $60 per share, a 54% premium to prior closing and 77% premium to 30-day VWAP.

• Funded through existing cash, committed credit facilities, and bank financing.

• Integration costs estimated at $80 million, mainly impacting 2024, with no effect on full-year adjusted EBITDA guidance.

• EBITDA accretion expected two to three years after launch in Q4 2028.

• Commitment to maintain investment grade rating and financial flexibility for future business development.

Synergies and expected cost savings

• Acquisition complements the current late-stage pipeline and supports long-term growth, addressing loss of exclusivity for other products.

• Commercial synergies anticipated with existing neurorare infrastructure and assets.

• Opportunity for multiple indications supports continued revenue growth, with global peak sales potential of $1.5–2 billion.