(Corrected to say that Northera drug could become Lundbeck's
most valuable neurological drug in the United States, not the
most valuable drug in Lundbeck's pipeline)
* Consideration represents a 59 pct premium for Chelsea
* Northera drug could become Lundbeck's most valuable
neurological drug in the U.S
* Criteria for success is a peak sale of $400 mln a yr -
* Deal still requires approval of Chelsea shareholders
By Teis Jensen and Stine Jacobsen
COPENHAGEN, May 8 Danish pharmaceutical company
H. Lundbeck is to buy Chelsea Therapeutics for
up to $658 million in a deal that would give it the rights to
the U.S firm's neurology drug Northera.
Chelsea stockholders will be offered $6.44 per share in cash
and contingent value rights (CVRs) that may pay up to $1.50 per
share, the two firms said. The total would represent a premium
of 59 percent over Wednesday's closing price of Chelsea shares.
By acquiring Chelsea Therapeutics, Lundbeck would gain the
rights to Northera, which was recently approved by the U.S. Food
and Drug Administration and is expected to be launched in the
third quarter of 2014.
The drug treats a rare form of low blood pressure associated
with neurological disorders such as Parkinson's disease.
Northera has the potential to become the most valuable of
Lundbeck's four neurological drugs in the United States, the
Danish company said.
Lundbeck Chief Executive Ulf Wiinberg said at a conference
call that the drug "fits perfectly" into Lundbeck's existing
portfolio of drugs, which mainly consists of drugs for brain
The Chelsea board unanimously approved the transaction but
it still requires the approval of Chelsea shareholders which
Lundbeck said it expected to receive in the summer.
"Lundbeck is doing this to increase its long-term earnings,"
Sydbank analyst Soren Lontoft Hansen told Reuters. "The criteria
for success is whether they can generate a peak (annual) sale
for Northera of $400 million."
Shares in Lundbeck were up 0.4 percent at 1325 GMT,
outperforming the Danish benchmark index which was
down 0.1 percent. Shares in Chelsea Therapeutics were up 32.8
percent in premarket trading.
($1 = 5.3612 Danish Crowns)
(Editing by Pravin Char)