Lundbeck partners with Proximagen, buying around a 9%equity stake in the firm

Danish central nervous system specialist Lundbeck (LUND: DC) and the UK’s Proximagen Group (AIM: PRX), have entered into a strategic partnership agreement under which they will jointly apply their expertise in CNS drug development towards achieving their collective strategic and growth objectives.

As part of the accord, a steering committee involving experts from both companies will focus on developing three of Proximagen’s programs, with the aim of identifying novel innovative therapies for serious diseases such as epilepsy, pain and inflammatory disorders. Lundbeck will also receive certain negotiation rights in relation to these programs.

Under the terms of the deal, Proximagen will issue 5,738,100 new ordinary 1 pence shares to Lundbeck at a price of 180 pence per new share, meaning the Danish firm will get an equity stake of around 9%. The total consideration paid for the new shares will be around £10.3 million ($15.9 million). The subscription price of 180 pence represents a premium of 36% over the average daily closing price of Proximagen’s shares in the six month period from March 29 to September 28, 2011. Proximagen shares leapt 13.9% to 139 pence following the announcement.