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12:00 AM
 | 
Feb 16, 2009
 |  BioCentury  |  Strategy

Lundbeck's Ovation

With the patent expiry of its lead products looming for H. Lundbeck A/S, the Danish pharma's acquisition of Ovation Pharmaceuticals Inc. is more about top-line growth than establishing a U.S. bridgehead. While it is true that the acquisition would fulfill Lundbeck's ambition to build a presence in the U.S., the main drivers of the potential $900 million purchase are Sabril vigabatrin and Xenazine tetrabenzine.

"Ovation's pipeline is a great match for our own, and combining the two gives us a lot of opportunities for potential launches of new medicines in the coming years," Lundbeck President and CEO Ulf Wiinberg told BioCentury. "On top of that, we have for some time now been looking for commercial infrastructure in the U.S. and so are happy that we have found one that is up and running, profitable and growing."

On a conference call, CFO Anders Gotzsche said the transaction is expected to be accretive to Lundbeck's net profit in 2010, after subtracting the transaction charges. "From 2011 going forward, there will be a dramatic growth in the top line and in the EBIT," he added.

The company has been busy looking for compounds to replace revenues that will be lost as three of its lead products go off patent between 2012 and 2014. These products accounted for 83% of Lundbeck's DKK8.7 billion ($1.5 billion) in revenues in the first nine months of 2008.

They include Lexapro/Cipralex escitalopram, an allosteric serotonin reuptake inhibitor for depression; NMDA receptor antagonist Ebixa memantine for Alzheimer's disease (AD); and Azilect rasagiline, an irreversible selective inhibitor of monoamine oxidase B...

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