Charlotte-based drug company to be acquired in $658M deal
05/08/2014 11:21 AM
05/08/2014 11:54 AM
Charlotte-based drug development company Chelsea Therapeutics has agreed to be acquired by Danish pharmaceutical company Lundbeck for up to $658 million, following the FDA’s approval earlier this year of Chelsea’s medication for treating dizziness and fainting in adults.
Chelsea, based off Johnston Road in south Charlotte, is an early stage drug development company. Lundbeck is planning to buy all outstanding shares of Chelsea for up to $7.94 a share, a 59 percent premium of the company’s closing price on Wednesday.
Chelsea’s signature drug, Northera, won approval in February. Northera is meant to treat people suffering from dizziness, fatigue and fainting upon standing in adults with Parkinson’s disease, multiple-system atrophy and other neurological disorders.
The company estimates that the market for Northera might include 300,000 patients in the U.S. and European Union. The FDA said in a press release that the condition such patients suffer from, called neurogenic orthostatic hypotension causes “a rare, chronic and often debilitating drop in blood pressure upon standing.”
Medical care for patients suffering from this condition who fall costs billions of dollars, and preventing 30 percent of such falls could save $5 billion a year, Chelsea estimates.
Northera is still required to undergo testing to determine its long-term clinical benefits. The company has not generated any revenue so far from its portfolio of drug candidates, and Northera is its only drug under active development.
“The proposed strategic acquisition of Chelsea – and the launch of its lead therapy, Northera – aligns with Lundbeck’s core strengths in addressing rare and challenging neurological disorders,” said Ulf Wiinberg, Lundbeck’s CEO. “As a company committed to people living with brain disorders, we are uniquely positioned to make Northera available to those who need it most.”
The deal is expected to close in the third quarter this year. Lundbeck is financing the acquisition with cash on hand.
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