The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 has expired pertaining to Lundbeck's planned acquisition of Chelsea Therapeutics (CHTP). It will acquire Chelsea for $6.44/share plus on contingent value right for up to $1.50/share for an aggregate of $658M on a fully diluted basis.
The expiration of the waiting period satisfies one of the conditions necessary for the closing of the offer and merger.
By acquiring Chelsea Therapeutics (CHTP), Lundbeck (HLUKF) gains the rights to Chelsea's Northera treatment for neurogenic orthostatic hypotension, a disease that is associated with neurological disorders such as Parkinson's.
Northera recently won FDA approval and is due to be launched later this year.
Lundbeck's offer of $7.94 a share comprises $6.44 a share in cash and up to $1.50 of contingent value rights (CVRs) that will be related to Northera's commercial performance.
The transaction is expected to close in Q3.
Chelsea Therapeutics' shares are +32% at $6.60. (PR)
Chelsea Therapeutics (CHTP) has agreed to sell itself to Lundbeck (HLUKF) for as much as $658M, with the offer of up to $7.94 a share representing a premium of 59% over Chelsea's closing price yesterday of $5. (PR)
Deutsche Bank raises its price target for Chelsea Therapeutics (CHTP) to $8 following the FDA's approval of the company's Northera treatment. Needham ups its target to $10.
Shares are surging 33% to $6.61.
The drug is indicated for preventing sudden drops in blood pressure, which can lead to dizziness and fainting, in patients with neurogenic orthostatic hypotension, a disease that is associated with neurological disorders such as Parkinson's.
Wedbush analyst Liana Moussatos expects the company to explore partnerships or to even be acquired, although it could launch Northera on its own. Moussatos estimates that the treatment could generate $430M in global peak sales.
The FDA authorized Northera on an "accelerated basis", which means patients will get access to it while the company carries out a post-market study of 1,400 people to see whether Northera has a durable effect - efficacy beyond two weeks has yet to be demonstrated.
Northera will contain a boxed warning to alert doctors and patients about applicable risks, and the package insert indicates that effectiveness beyond two weeks of treatment has not yet been demonstrated, but there's no restriction on prescription use.
The suspense continues: Chelsea Therapeutics (CHTP) says the FDA has notified it that the decision date for the Northera new drug application has been extended to Feb. 18 due to an office closure caused by severe weather.
Shares, which had been down more than 20% AH, now +1.4%.
With nervous Chelsea Therapeutics (CHTP -4%) still awaiting word from the FDA on Northera, Deutshce Bank's Robyn Karnauskas sees fair value for the stock in the $8-$9 range if the drug is approved and - more or less - $0 for the shares if declined.
Her team is modeling market share of 50% and peak sales of about $550M worldwide. Possibly higher market share and peak sales of about $780M could bring the stock up to the $12-$13 area.
Cash on the balance sheet in the case of non-approval is $21M, or $0.27 per share.
Chelsea Therapeutics International, Ltd., is a pharmaceutical company focused on acquisition, development and commercialization of pharmaceutical products for the treatment of a variety of human diseases.