ALDR stock is the biggest gainer in the biotech space on the news that H. Lundbeck A/S will acquire Alder BioPharmaceuticals Inc (NASDAQ:ALDR) for $2 billion.
Solid Boost for Shareholders
When it comes to the biggest pharmaceutical companies in the world, then it is a well-known fact that many of those companies use mergers and acquisition as a path to further growth. Acquisitions help large companies to come into possession of lucrative drugs, which in turn leads to more growth, and that is what Danish pharmaceutical company Lundbeck has done.
In a fresh development, it has emerged that Lundbeck has completed an agreement with Alder BioPharmaceuticals to acquire the latter in a deal worth $2 billion. It is believed that the motivation of the deal is primarily rooted in the new migraine medicine produced by Alder that has proven to be a massive hit.
It is believed that the decision to make the acquisition came from Lundbeck, which is currently in a bit of a flux as a company. It is primarily involved in medicines that are meant for the treatment of depression and Alzheimer’s.
Alder had been offered a whopping 79% premium on its stock price as of Friday this past week, and it is understandable why the deal went through quickly at the board level. ALDR stock soared 85% to $18.54 after hitting a 2-year high of $18.88.
However, it is now in a bit of a squeeze in those niches due to the upcoming expiration of patents and also due to intense competition from generic pharmaceutical companies. The offer was generous enough, and the members of the board at Alder approved the deal unanimously.
Alder BioPharmaceuticals is mainly involved in developing treatments that are meant for the prevention of migraines, and earlier in February, it filed for an FDA license for its eptinezumab antibody product. Lundbeck believes that the product in question should hit the markets in the United States within the first six months of 2020. In a statement, the company’s Chief Executive Officer Deborah Dunsire said that it should prove to be a big boost for the company. It will aid the growth in revenues and also diversify the company’s product lines.
Following today’s rally, ALDR stock is up 70% so far in 2019.
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