Neurocrine, with latest deal, gets a foothold in Europe

Neurocrine Biosciences, a San Diego-based drugmaker focused on neuroscience, said Tuesday that it has agreed to acquire a specialty pharmaceutical company in the U.K. to, among other reasons, more quickly establish a research and commercial foothold in Europe.

Neurocrine is offering 27.5 British pence for each share of the target company, named Diurnal, reflecting a 144% premium to its share price at market’s close on Aug. 26 — the most recent business day in which shares were traded, as Monday was a bank holiday in the U.K. In total, the all-cash deal is valued at approximately 48.3 million British pounds, or roughly $56.5 million.

The companies expect their deal to close in late October or early November.

Whereas Neurocrine has marketed drugs for Parkinson’s disease and a movement disorder known as tardive dyskinesia, Diurnal’s business revolves around treatments for chronic hormonal diseases. Still, Kyle Gano, Neurocrine’s head of business development and strategy, called the acquisition a “good strategic fit that offers benefits for both companies’ stakeholders and the physician and patient communities we both serve.”

Diurnal’s location is important as well. In documents released Tuesday, Neurocrine leadership explained how the company has been following Diurnal’s development for years, and now sees an acquisition as means to “accelerate the establishment of clinical development and commercial activities in Europe.”

For Diurnal, non-executive chairman Anders Härfstrand said that Neurocrine’s financial and operational resources will “substantially accelerate the development of a leading franchise” for diseases hallmarked by a deficiency of cortisol, a steroid hormone.

Last year, Neurocrine reported $1.1 billion in net sales from its products, reflecting an almost 10% increase from 2020.

Meanwhile, at Diurnal, net sales and royalties for the 12 months leading up to June 30, 2022, totaled 4.6 million British pounds. Diurnal has two marketed products — Alkindi, a treatment for adrenal insufficiency in children, and Efmody, a treatment for congenital adrenal hyperplasia — as well as experimental programs.

In those Tuesday documents, Diurnal’s leadership wrote that while the company “could potentially have a very strong future as an independent business,” its directors recognize the challenges to getting there. Those include potential setbacks in clinical trials, commercial risks, the need for further funding as well as the company’s “relative lack of scale.”

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