Boston, MA 05/08/2014 (wallstreetpr) – The drug developer Chelsea Therapeutics International Ltd. (NASDAQ:CHTP) has agreed to be acquired for $658 million in a transaction that its board of directors has unanimously supported. The company, however, sought to clarify why the deal is worth pursuing, and it seems it all has to do with seeking maximum value for the shareholders. And the company said that is properly addressed in the planned transaction.
Chelsea Therapeutics International Ltd. (NASDAQ:CHTP) will be acquired by H. Lundbeck A/S, a Danish drug company that is best known for the developing and marketing of brain disorder treatments. A look into the agreement reveals that the issue at the center of the acquisition is Chelsea’s Northera drug that won the U.S. Food and Drug Administration approval early this year.
As such, H. Lundbeck is expected to speed up the launch of the drug because it also believes it has the potential to support its brain treatment segment. If all goes well, Northera is expected to be available on the shelves by 2Q2014. In any case, Chelsea remarked that H. Lundbeck has the expertise in commercializing such drugs like Northera. Therefore, it expects the drug to be available on the U.S. market faster than it would have done it on its own.
The narrative about Northera is important in the just declared deal because Chelsea Therapeutics International Ltd. (NASDAQ:CHTP) shareholders stand to benefit a great deal if milestone payments tied Northera sales. Northera is targeted for the treatment of blurred vision and dizziness, conditions that are also associated with many brain illnesses.
Outstanding shares transaction
The announced acquisition will involve the purchase of the outstanding shares of Chelsea Therapeutics International Ltd. (NASDAQ:CHTP) at the price of $7.94 per share. The companies also agreed to a $6.44 per share in cash payment as part of the transaction. The per-share transaction price suggests 59 percent premium over Chelsea’s Wednesday closing price of $5 per share.
Executive comments
According to Chelsea Therapeutics International Ltd. (NASDAQ:CHTP) CEO Joseph Oliveto, the transaction presents an opportunity to maximize shareholder value almost overnight. Besides the premium per-share transaction, shareholders will benefit from the commercial upside tied to the sale of Northera. Furthermore, the fact that H. Lundbeck will work on speedy commercialization of the drug means that shareholders will not have to wait for a long time to experience the benefits.
