H. Lundbeck A/S (Lundbeck) and Ovation Pharmaceuticals, Inc. (Ovation) announced that they have entered into a definitive transaction agreement under which Lundbeck, through the wholly owned subsidiary Lundbeck, Inc., will acquire Ovation in an all cash transaction valuing Ovation at up to USD 900 million or approximately DKK 5.2 billion. The supervisory board at Lundbeck and the board of directors of Ovation have unanimously approved the transaction.

"This transaction marks a very important milestone for Lundbeck. Ovation is an excellent match for Lundbeck and will help us realise our strategic goals. Ovation will provide a commercial platform in the US with a highly experienced management team and specialty sales force, a late-stage development pipeline and a proven scientific and regulatory expertise in areas of high unmet medical needs", says Ulf Wiinberg, president & chief executive officer at Lundbeck. "We are very encouraged by what Ovation has achieved in the short time since the company was founded and we look forward to working together in the common interest of both companies."

The acquisition of Ovation delivers on Lundbeck's strategic goal to build a commercial infrastructure in the US. Ovation is a private, US-based, profitable and fast growing company, with a broad portfolio of marketed products and an attractive pipeline of new, innovative products primarily focused on CNS. The pipeline is expected to significantly drive growth in the coming years through multiple new product launches.

Following the transaction Lundbeck will have a diverse portfolio of marketed products and a broader pipeline primarily focused on CNS.

"This is an exciting milestone for our employees and our company," says Jeffrey S. Aronin, Ovation president and chief executive officer. "We've succeeded in achieving our mission of building a strong, fast growing business by developing important medications for unmet medical needs of severely ill patients - and Lundbeck shares that commitment. We are very impressed with the Lundbeck management team and joining forces with them will allow us to accelerate our efforts to address complex CNS disorders and expand the range of therapies we can bring to patients in need."

Pending final approvals and antitrust clearances, closing is expected to take place in March 2009, after which Ovation will become a fully-integrated subsidiary of Lundbeck.

Today's announcement will not affect or interfere with any product availability or support for any of the products that Ovation currently has on the market. Likewise, there will be no changes to the availability or support provided for Lundbeck's currently marketed products.

Under the terms of the transaction, Lundbeck will make an upfront payment of USD 600 million (or approximately DKK 3.5 billion) immediately upon closing of the transaction. Additional payments of up to USD 300 million (or approximately DKK 1.7 billion) within one year of closing are contingent upon the achievement of certain product regulatory milestones relating to the approvals of Sabril by the FDA.

The transaction will be financed through a combination of existing cash resources and new DKK 2.5 billion acquisition debt underwritten by Nordea and Danske Bank. Lundbeck estimates that the new debt will be fully repaid in little more than one year of closing of the transaction through the expected operating cash flows.

The transaction is expected to be accretive to Lundbeck's net profit post transaction costs and amortisation related to the acquisition in 2010.

The proposed transaction is only subject to notification and clearance under certain antitrust statutes.

Lundbeck has retained Deutsche Bank as its financial advisor and Morgan Lewis as its lead legal advisor in this transaction. Goldman Sachs is acting as financial advisor to Ovation, who retained Kirkland and Ellis LLP and Katten Muchin Rosenman LLP as its legal advisors.

Based in Deerfield, IL, Ovation was founded in 2000 with a focused strategy to acquire and develop specialty compounds for the US market and for niche indications with high unmet medical needs. Today, the company has a broad portfolio of medicines - both approved and in development. Fueled by a promising CNS specialty pipeline, further product launches are expected in the future and these new medicines will treat a variety of serious neurological conditions.

Lundbeck is retaining its financial guidance for 2008, which is revenue to be between DKK 11-11.5 billion and EBIT to be between DKK 2.8-2.9 billion excluding one-off items.

H. Lundbeck A/S is an international pharmaceutical company engaged in the research and development, production, marketing and sale of pharmaceuticals for the treatment of psychiatric and neurological disorders.