Alder’s migraine drug attracted plenty of dealmakers. The company, not so much
- In search of a partner that could help market its main drug outside the U.S., Alder BioPharmaceuticals contacted more than 20 parties. While a handful of them expressed interest, only one showed “any indication” of wanting to pursue an all-out acquisition of the company, according to a regulatory document filed Monday.
- That party, a Danish drugmaker named Lundbeck, has since received unanimous backing from Alder’s board to acquire the company for $2 billion. The deal is expected to close in the fourth quarter.
- According to Monday’s filing, Alder received proposed term sheets from five parties interested in ex-U.S. rights to eptinezumab, an experimental migraine drug that’s part of a relatively new class of therapies called CGRP inhibitors. Unlike other, injectable members of the class, eptinezumab comes as an intravenous infusion that Alder has said could reach $1.3 billion in peak sales.
Alder’s experience reflects larger trends in neuroscience drug development. The field is notorious for clinical failures, so drugs or deals that look like they can mitigate risk are especially attractive.
Eptinezumab could be considered de-risked since it’s backed by positive late-stage data. Alder expects that by Feb. 21, the Food and Drug Administration will have made an approval decision on eptinezumab’s use in migraine prevention. The company also plans to submit the drug to European regulators in 2020, followed by filings elsewhere, including China and Japan.
Alder is based in Bothell, Washington. Ahead of its international filings and at the instruction of the company’s board, Alder management in September 2018 began looking for partners that could help commercialize the drug outside the U.S.
Lundbeck, a business built around neuroscience drugs, was one of 21 parties contacted and one of the five that submitted term sheets. By March, however, Lundbeck leadership had floated the idea of a larger deal.
On July 21, the company gave its initial offer of $14.50 per Alder share with a contingent value right of $4.50 per share that hinged on three things: eptinezumab’s approval in the U.S., its approval in the European Union, and it hitting annual worldwide net sales of more than $1 billion within 10 years of coming to market.
Alder pushed for a better offer, and the companies ultimately settled for one valued at $2 billion where Alder investors received $18 per share upfront and a contingent value right potentially worth another $2 per share.
Lundbeck, maker of Abilify (aripiprazole) and Lexapro (escitalopram), recorded revenue of 1.6 billion Danish krone (about $252 million) in 2018, reflecting 5% growth year over year.
Its Alder acquisition brings more than just eptinezumab. The target company employed 202 people as of Dec. 31, and has another migraine prevention drug in its pipeline, though in preclinical testing.
In the U.S., Alder faces an already crowded migraine prevention market with the recent approvals of CGRP inhibitors from Amgen, Eli Lilly and Teva Pharmaceutical. Allergan’s working in the space as well, with a late-stage oral CGRP called atogepant.