Lundbeck increases its share of Xenazine® and strengthens the U.S.
profitability - transaction immed
Lundbeck increases its share of Xenazine® and strengthens the U.S. profitability - transaction immediately accretive
(Thomson Reuters ONE) - In March 2009 H. Lundbeck A/S (Lundbeck) acquired OvationPharmaceuticals, Inc. (now Lundbeck Inc.) to establish a US platformand Xenazine® is an important growth driver at Lundbeck Inc.Lundbeck and UK-based LifeHealth Limited (LifeHealth) today announcedthat the companies have entered into a definitive agreement underwhich Lundbeck acquires all shares of LifeHealth, the holder ofXenazine rights. The deal is an all-cash transaction valuingLifeHealth at USD 147 million or approximately DKK 780 million. TheSupervisory Board at Lundbeck and the Board of Directors ofLifeHealth have unanimously approved the transaction.Strategic rationaleThe acquisition is a logical next step in the acquisition andintegration of Lundbeck Inc. earlier in 2009 as LifeHealth ownsapproximately 25 percent of the sales in the U.S. and Canada ofXenazine (tetrabenazine) less production costs and about 50 percentof non-North American sales of the product to distributors into theterritories. By acquiring LifeHealth, Lundbeck substantiallyincreases its economic share of the tetrabenazine asset and retainscertain rights to all future indications, including thecontrolled-release formulation currently in development. In addition,as the company responsible for selling and marketing Xenazine in theU.S., this further enhances Lundbeck's opportunities in this veryimportant market."Xenazine is the only FDA-approved product for patients sufferingfrom chorea associated with Huntington's disease and we are veryencouraged by what our U.S. subsidiary, Lundbeck Inc., has achievedsince they launched Xenazine in the U.S. at the end of last year",says Ulf Wiinberg, President and CEO at Lundbeck. "This newtransaction strengthens Lundbeck's U.S. platform and materiallyimproves the earnings outlook in the U.S."In November 2008, Xenazine for the treatment of chorea associatedwith Huntington's disease was launched in the USA, whereapproximately 20,000 to 25,000 patients suffer from the disease.Xenazine is expected to provide significant revenue contribution toLundbeck and Lundbeck expects the US sales potential to be more thanUSD 250 million.Financial highlightsUnder the terms of the transaction, Lundbeck will make an upfrontpayment of USD 147 million (or approximately DKK 780 million)immediately upon closing of the transaction.The transaction will reduce the royalty range paid to a third partyon Xenazine from approximately 65-72% to approximately 40-47%, andthe acquisition is therefore expected to be immediately accretive toLundbeck's EBIT. The transaction will be financed using currentlyavailable cash resources.The acquisition price of LifeHealth will be booked as "Productrights" under intangible assets in Lundbeck's balance sheet and willbe amortised with approximately DKK 90 million annually and DKK 45million in 2009.Lundbeck financial guidanceLundbeck is maintaining the financial guidance for 2009. Theacquisition of LifeHealth will have a positive impact on EBITDA andto a low degree EBIT. For 2009 Lundbeck expects an EBITDA of DKK3.5-3.7 billion and following the acquisition of LifeHealth Lundbeckexpects EBITDA to be in the higher end of the interval for 2009.About LifeHealth LimitedLifeHealth, based in Berkshire, United Kingdom, was established inFebruary 1995. The company holds certain rights to tetrabenazine in17 countries throughout the world.About Xenazine (tetrabenazine)Xenazine is the first and only FDA-approved therapy for the treatmentof chorea associated with Huntington's disease. Xenazine was approvedby the FDA in August 2008 and was launched by Lundbeck Inc. inNovember 2008. Xenazine was granted Orphan Drug status from the FDA,providing seven years of market exclusivity.About chorea associated with Huntington's diseaseChorea is the most common symptom of Huntington's disease, whichaffects approximately 20,000 to 25,000 people in the U.S. It ischaracterized by jerky, involuntary movements throughout the body,often appearing as writhing, twisting and turning in a constant,uncontrollable dance-like motion. As chorea progresses, theinvoluntary movements worsen, making it difficult for individuals tocarry out voluntary movements associated with daily living, such asspeaking, eating and dressing. Over time, chorea presents anincreasing safety risk to Huntington's disease patients, oftenresulting in the need for assistance and supervision, and eveninstitutionalisation. Currently, there is no known cure forHuntington's disease and the disease is ultimately fatal.Important Safety Information and Boxed WarningXenazine can increase the risk of depression and suicidal thoughtsand behaviour (suicidality) in patients with Huntington's disease.Anyone considering the use of Xenazine must balance the risks ofdepression and suicidality with the clinical need for control ofchoreiform movements. Close observation of patients for the emergenceor worsening of depression, suicidality, or unusual changes inbehaviour should accompany therapy. Patients, their caregivers, andfamilies should be informed of the risk of depression and suicidalityand should be instructed to report behaviours of concern promptly tothe treating physician.Particular caution should be exercised in treating patients with ahistory of depression or prior suicide attempts or ideation, whichare increased in frequency in Huntington's disease. Xenazine iscontraindicated in patients who are actively suicidal, and inpatients with untreated or inadequately treated depression.Xenazine is also contraindicated in patients with impaired hepaticfunction, and in patients taking monoamine oxidase inhibitors orreserpine. At least 20 days should elapse after stopping reserpinebefore starting Xenazine. Although Xenazine has been shown todecrease the chorea associated with Huntington's disease, it was alsoshown to cause slight worsening in mood, cognition, rigidity andfunctional capacity and prescribers should periodically re-evaluatethe need for therapy. Some adverse effects such as depression,fatigue, insomnia, sedation/somnolence, parkinsonism, akathisia, QTcprolongation and interactions with CYP2D6 inhibitors may be dosedependent, and resolve or lessen with dose adjustment. The mostfrequent adverse events reported with Xenazine compared to placebo ina randomized, 12-week, placebo controlled clinical trial ofHuntington's disease subjects include sedation/somnolence (31% vs.3%), fatigue (22% vs. 13%), insomnia (22% vs. 0%), depression (19%vs. 0%), akathisia (19% vs. 0%), anxiety (15% vs. 3%) and nausea (13%vs. 7%). For more information, please see full prescribinginformation including Boxed Warning or go to www.xenazineusa.com.Lundbeck contactsInvestors: Media:Jacob Tolstrup Mads KronborgDirector, IR & Communication Media Relations+45 36 43 30 79 +45 36 43 28 51Palle Holm Olesen Kasper RiisHead of Investor Relations Media Relations+45 36 43 24 26 +45 36 43 28 33Magnus Thorstholm JensenInvestor Relations Officer+45 36 43 38 16About LundbeckH. Lundbeck A/S (LUN.CO, LUN DC, HLUKY) is an internationalpharmaceutical company highly committed to improve the quality oflife for people suffering from central nervous system (CNS)disorders. For this purpose Lundbeck is engaged in the research anddevelopment, production, marketing and sale of pharmaceuticals acrossthe world, targeted at disorders like depression and anxiety,schizophrenia, insomnia, Huntington's, Alzheimer's and Parkinson'sdiseases.Lundbeck was founded in 1915 by Hans Lundbeck in Copenhagen, Denmark,and employs today over 5,500 people worldwide. Lundbeck is one of theworld's leading pharmaceutical companies working with CNS disorders.In 2008, the company's revenue was DKK 11.3 billion (approximatelyEUR 1.5 billion or USD 2.2 billion). For more information, pleasevisit www.lundbeck.com.http://hugin.info/130085/R/1327465/312744.pdfThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
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Datum: 07.07.2009 - 09:55 Uhr
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