Alder's buyout finally arrives

In the summer of 2015, Alder Biopharmaceuticals had a plan to best its larger rivals with a treatment for migraine, and the company’s multibillion-dollar market valuation suggested investors were buying the idea. Surely, the thinking went, some major drug company will swoop and buy Alder at a premium.

That finally came to pass yesterday, when Lundbeck agreed to pay about $2 billion for the company. On the one hand, it’s great news for Alder shareholders: Lundbeck’s offer represents a more than 80% premium to where the company was trading last week. But if you think back to 2015, it doesn’t look so great: Lundbeck is paying a roughly 70% discount to Alder’s earlier price.

Meanwhile, Alder’s treatment, eptinezumab, is far from a sure thing. The treatment can’t win FDA approval until next year, at which point it would compete with on-the-market migraine therapies from Amgen, Eli Lilly, and Teva. Whether Alder’s drug can carve out a share of the market remains to be seen.