In a significant corporate development, Longboard Pharmaceuticals, Inc. (NASDAQ:LBPH) has finalized its acquisition by H. Lundbeck A/S, a Danish pharmaceutical firm, as of Monday. This transaction follows the Merger Agreement dated October 14, 2024, and the successful tender offer of $60.00 per share for Longboard's common stock.
The acquisition price represents a remarkable premium, as shown by InvestingPro data indicating a staggering 1,399% return over the past year, with the stock trading near its 52-week high of $60.03.
The acquisition led to the termination of Longboard's 2020 and 2021 Equity Incentive Plans and its 2021 Employee Stock Purchase Plan. Longboard's common stock, which maintained strong financial health with a current ratio of 15.97 according to InvestingPro data, has been delisted from the Nasdaq Global Market as of Monday, following the transfer of ownership.
Stock options and restricted stock units (RSUs) held by Longboard employees were converted to the right to receive cash equal to the difference between the merger consideration and the exercise price for each share. Longboard has become a wholly owned subsidiary of H. Lundbeck A/S, and all previous directors and officers have resigned, with the directors and officers of the acquiring subsidiary stepping into their roles.
The merger has resulted in significant changes in the rights of Longboard's security holders, as all outstanding shares have been converted to the right to receive the offer price in cash. The completion of this acquisition marks a change in control of the registrant, with Longboard now operating under the full ownership of its parent company, H. Lundbeck A/S.
The Company's certificate of incorporation and bylaws were also amended and restated to reflect the new corporate structure. This news is based on a press release statement and provides key insights for investors regarding the recent changes in Longboard Pharmaceuticals' corporate governance and ownership.
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In other recent news, Longboard Pharmaceuticals has been the focus of several significant developments. The company has been downgraded from Buy to Neutral by a B.Riley analyst, despite a price target increase to $60 from $45, following the announcement of a $2.6 billion acquisition by Lundbeck. This acquisition, unanimously approved by the boards of both companies, is expected to finalize in the fourth quarter of this year.
Longboard's lead asset, bexicaserin, which is currently in phase III trials, has received Breakthrough Therapy Designation from the U.S. FDA. The company has also initiated a global Phase 3 clinical trial for bexicaserin, a treatment for seizures associated with Developmental and Epileptic Encephalopathies (DEEs).
Lundbeck's acquisition of Longboard is seen as a strategic move, especially considering the promising data generated by Longboard and its potential for market expansion. Analyst firms, including H.C. Wainwright, Baird, and Truist Securities, have expressed confidence in Longboard's growth prospects, maintaining positive ratings for the company. These recent developments highlight the ongoing efforts of Lundbeck and Longboard to address the significant unmet needs in epilepsy treatment.
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