Lundbeck to acquire US-based Ovation Pharmaceuticals, Inc.

11-Feb-2009 - USA

H. Lundbeck A/S and Ovation Pharmaceuticals, Inc. announced that they have entered into a definitive transaction agreement under which Lundbeck, through the wholly owned subsidiary Lundbeck, Inc., will acquire Ovation in an all cash transaction valuing Ovation at up to USD 900 million or approximately DKK 5.2 billion. The Supervisory Board at Lundbeck and the Board of Directors of Ovation have unanimously approved the transaction.

"This transaction marks a very important milestone for Lundbeck. Ovation is an excellent match for Lundbeck and will help us realise our strategic goals. Ovation will provide a commercial platform in the US with a highly experienced management team and specialty sales force, a late-stage development pipeline and a proven scientific and regulatory expertise in areas of high unmet medical needs", says Ulf Wiinberg, President & Chief Executive Officer at Lundbeck. "We are very encouraged by what Ovation has achieved in the short time since the company was founded and we look forward to working together in the common interest of both companies."

The acquisition of Ovation delivers on Lundbeck's strategic goal to build a commercial infrastructure in the US. Ovation is a private, US-based, profitable and fast growing company, with a broad portfolio of marketed products and an attractive pipeline of new, innovative products primarily focused on CNS. The pipeline is expected to significantly drive growth in the coming years through multiple new product launches. Following the transaction Lundbeck will have a diverse portfolio of marketed products and a broader pipeline primarily focused on CNS.

Under the terms of the transaction, Lundbeck will make an upfront payment of USD 600 million (or approximately DKK 3.5 billion) immediately upon closing of the transaction. Additional payments of up to USD 300 million (or approximately DKK 1.7 billion) within one year of closing are contingent upon the achievement of certain product regulatory milestones relating to the approvals of Sabril® by the FDA.

The transaction will be financed through a combination of existing cash resources and new DKK 2.5 billion acquisition debt underwritten by Nordea and Danske Bank. Lundbeck estimates that the new debt will be fully repaid in little more than one year of closing of the transaction through the expected operating cash flows.

The transaction is expected to be accretive to Lundbeck's net profit post transaction costs and amortisation related to the acquisition in 2010.

https://www.bionity.com/en/news/96712/lundbeck-to-acquire-us-based-ovation-pharmaceuticals-inc.html