Neuroscience drug developer Lundbeck is expanding its scope to epilepsy via the $2.6 billion acquisition of Longboard Pharmaceuticals, a company whose lead asset is in late-stage clinical development for a rare, inherited seizure disorder that has few approved treatments.
According to deal terms announced Monday, Lundbeck will pay $60 in cash for each Longboard share, representing a 54.2% premium to the biotech’s closing stock price on Friday and a 77% premium to the stock’s average price for the month of September. When La Jolla, California-based Longboard went public in 2021, it priced shares at $16 apiece.
Longboard’s lead drug candidate, bexicaserin, is in development for developmental and epileptic encephalopathies (DEEs), a group of disorders that include the rare epilepsies Dravet syndrome and Lennox-Gastaut syndrome. The oral small molecule is an agonist of the 5-HT2C receptor, whose roles include regulating seizure severity. This receptor is already targeted by Fintepla, a UCB drug approved to treat seizures associated with Dravet and Lennox-Gastaut. But Fintepla’s label carries a black box warning for cardiovascular complications. Bexicaserin is designed to selectively target 5-HT2C without also hitting other receptors that can cause adverse effects.
Jazz Pharmaceuticals’ cannabis-derived Epidiolex, approved for Dravet, Lennox-Gastaut, and tuberous sclerosis complex, has no black box warning. Some high-profile efforts in DEEs have encountered setbacks. In June, Takeda Pharmaceutical reported its drug candidate soticlestat failed separate placebo-controlled Phase 3 tests in Dravet and Lennox-Gastaut.
Longboard had been making the case that bexicaserin can stand apart from other approaches to treat epilepsies. In January, the biotech reported Phase 1b/2a data showing a median 53.3% reduction in seizure frequency in patients with DEEs during the 75-day treatment period, results that had the company making claims of best-in-class potential. Shares of the biotech soared more than 300% after that data report.
Bexicaserin’s efficacy results are holding up so far. According to a Lundbeck investor presentation, nine-month open-label data show a 57.7% reduction in countable motor seizures. In September, Longboard began a global Phase 3 test enrolling Dravet patients age 2 and older. This clinical trial is part of a broader program planned to evaluate the drug in about 480 patients who have a range of DEEs.
The Longboard pipeline also includes LP659, a modulator of the S1P receptor that has potential applications in neuroinflammatory disorders. A Phase 1 single-ascending dose study has been completed but plans for a Phase 1 multiple-ascending dose study are subject to resolution of a partial clinical hold. Both bexicaserin and LP659 were licensed from Arena Pharmaceuticals.
Lundbeck focuses on neuroscience drugs. The Copenhagen-based company’s top-selling product is Rexulti, a schizophrenia and depression drug that last year expanded its approved uses to include agitation caused by Alzheimer’s disease. The product accounted for 4.5 billion Danish krone (about $661 million) in revenue last year, a 16% increase compared to the prior year, according to the company’s annual report.
Within neuroscience, Lundbeck executives have identified rare neurological diseases as an opportunity for pipeline expansion. Lundbeck projects a fourth quarter 2028 launch for bexicaserin. The company estimates the drug could achieve peak sales of $1.5 billion to $2 billion.
“This transformative transaction will become a cornerstone in Lundbeck’s neuro-rare franchise, with a potential to drive growth into the next decade,” Lundbeck President and CEO Charl van Zyl said in a prepared statement. “Bexicaserin addresses a critical unmet need for patients suffering from rare and severe epilepsies, for which there are very few good treatment options available.”
The boards of directors of both Lundbeck and Longboard have approved the acquisition, which still needs the majority of Longboard’s outstanding voting shares to be tendered. The deal also must pass regulatory muster. The transaction is expected to close by the end of this year.
Image: Getty Images, Iaremenko
