Lundbeck (Pharma)

Note: This is a daily stock update and the information stands true as of 15/10/24, 09:00 CET.

Company Update: Longboard Pharmaceuticals is a small pharma firm with it a phase III drug candidate (bexicaserin) for a rare form of epilepsy.? Bexicaserin is expected to be launched in Q4 28 with peak sales expected at $1.5-2bn (DKK10.3-13.7bn), perhaps after 4-5 years of being launched.

Expert Opinion:This is a substantial acquisition for a company like Lundbeck. I tend to be cautious on acquisition as most of deals are value destroying. Yet Pharma is slightly different as it is an increasingly accepted alternative to R&D, enabling companies to seize interesting opportunities when they see one. With its positioning on Central Neuro System diseases, Lundbeck was ideally placed for that acquisition. Furthermore their track record in the matter is rather good. Concern about leveraged balance sheet should be limited as the company was net cash and post acquisition its net debt to EBITDA will be of c 2.3x, which is highly manageable considering the strong CF generation of Lundbeck.

In all, a positive move in our view and Lundbeck remains a very attractive specialized play in the Pharma sector.

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