This time, analyst speculation turned out to be true. A little over a week after offloading some of its investments to its foundation, Danish pharma Lundbeck has inked a deal to buy Ovation Pharma for $600 million plus $300 million in potential milestone payments.
Industry observers had speculated that Lundbeck's sale of its LifeCycle Pharma stake, which raised some $50 million, was an attempt to raise cash to make a deal. Lundbeck plans to finance the all-cash transaction with some funds on hand, plus kr.2.5 billion ($433 million) in acquisition financing underwritten by Nordea and Danske Bank.
Why Ovation? Lundbeck had been wanting a commercial platform in the U.S., for one thing. Ovation offers the infrastructure Lundbeck wanted, said Lundbeck CEO Ulf Wiinberg in a company statement. It has a "highly experienced management team" and a specialty-oriented sales force. It also has a portfolio of central nervous system products, built in part by snapping up drugs from larger pharmas, including epilepsy and neurological treatments.
Then there's the pipeline, of course, because no pharma deal these days is made without an eye to the new products that could come to market. Ovation has one drug under FDA review already: Sabril, an older med approved for epilepsy treatment in other countries but not in the U.S. Ovation wants to market it as a treatment for a severe form of epilepsy in adults and for infantile spasms. And Ovation has a "promising late stage pipeline" of CNS-oriented meds addressing "significant unmet medical needs," Lundbeck says. We'll see how that plays out as time goes on.