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Healthcare

UPDATE 2-Lundbeck buys UK firm LifeHealth for $147 mln

* Says acquisition is a platform for growth in Xenazine

* Says acquisition positive for EBITDA, keeps 2009 guidance

* Sees 2009 EBITDA at higher end of DKK 3.5-3.7 bln range

* Sees Xenazine sales potential of more than $250 million

(Adds detail, quotes, updates shares)

By Peter Levring and John Acher

COPENHAGEN, July 7 (Reuters) - Danish pharmaceuticals group Lundbeck LUN.CO agreed to buy Britain's LifeHealth for $147 million on Tuesday, to acquire rights to a treatment related to Huntington's disease.

Lundbeck said the acquisition would have a positive impact on earnings before interest, tax, depreciation and amortisation (EBITDA) for 2009, which it now expects to be at the higher end of its forecast of 3.5-3.7 billion Danish crowns ($656-$694 million).

“This new transaction strengthens Lundbeck’s U.S. platform and materially improves the earnings outlook in the United States,” Chief Executive Ulf Wiinberg said in a statement.

LifeHealth holds rights to Xenazine, also called tetrabenazine, which is a treatment for chorea, a symptom associated with Huntington’s disease. The acquisition follows Lundbeck’s March purchase of Ovation Pharmaceuticals, which also included U.S. rights for Xenazine.

“Xenazine is expected to provide significant revenue contribution to Lundbeck and Lundbeck expects the U.S. sales potential to be more than $250 million,” the company said.

LifeHealth has about 25 percent of the sales in the United States and Canada of Xenazine and about 50 percent of non-North American sales of the product to distributors, Lundbeck said.

The transaction will reduce the royalty range paid to a third party on the drug Xenazine from about 65-72 percent of sales excluding production costs to about 40-47 percent, Lundbeck said. “The acquisition is therefore expected to be immediately accretive to EBIT.”

The third party is Canada's Biovail BVF.TO which holds the residual rights, a Lundbeck spokesman said.

Lundbeck shares were up 2.0 percent to 103 crowns by 1120 GMT, outperforming a 1.2 percent gain in the Copenhagen bluechip index .OMXC20 and a 0.3 percent drop in the DJ Stoxx European drugs sector index .SXDP.

“We are getting control of a drug with very large potential,” Wiinberg told Reuters, adding that the company expects Xenazine annual sales to reach $250 million in 2012-2015. Lundbeck will have exclusive rights to 2016.

“It (Xenazine) is suitable for neurological disorders, and if we find other products within this area, we will naturally be interested,” Wiinberg said.

He said that Lundbeck could also develop Xenazine for treatment of disorders such as Tourette’s syndrome, and the company would decide later this year if it would go in that direction.

The acquisition price of LifeHealth will be booked as “product rights” under intangible assets in the balance sheet and will be amortised by about 90 million crowns annually, with 45 million to be amortised in 2009, Lundbeck said.

Also on Tuesday, Lundbeck said it was to buy small Danish biotech firm NeuronIcon for an undisclosed sum to gain technologies for treatment of brain damage.

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