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The healthy Q2 23 results were driven by sustained growth for Lundbeck’s four key brands and, aside from the top-line dynamics, profitability benefitted from moderating R&D expenses. Consequently, the management improved its full-year guidance. Overall, strong momentum for the strategic offerings and their fairly long exclusivity periods, along with a robust balance sheet, underpin our BUY recommendation on Lundbeck.
Companies: H. Lundbeck
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Lundbeck exceeded the street’s expectations with its Q1 23 results, driven by healthy performances from the key brands. Also, the recent approvals for additional indications/newer doses of its marketed products bode well for sustaining the growth momentum. The 2023 guidance remains unchanged. Overall, despite the recent months’ strong run-up in the share price, we reiterate our BUY recommendation, supported by the ongoing operational recovery, healthy growth prospects for its strategic products
The main drugs continued driving the business/recovery momentum for Lundbeck, with Q4 again exceeding expectations, as full-year sales and EBITDA reached the upper-end of guidance. Moreover, the 2023 and medium-term guidance was healthy. With reasonably long remaining patent lives, the key drugs are likely to sustain the momentum in the medium term, supported by newer indications and conducive formulations, which combined with on-going profitability improvements and a robust balance sheet, suppo
The Q3 results were well ahead of expectations, driven by strong performances from Lundbeck’s key drugs, which more than compensated for the expected weaker performance of the older drugs. Moreover, profitability was aided by lower R&D expenses. Unsurprisingly, the management upgraded the full-year guidance. Overall, our positive view on the stock is maintained as Lundbeck remains on track to make-up for its underperformance in the past many months.
In the Q2 Lundbeck continued its solid top-line momentum, driven by strong growth seen in the main-marketed drugs. However, lower profitability due to a steep rise in marketing expenses took the sheen off the results. Having said that, this is an investment in growth and they are also high now due to lower marketing activity during the pandemic. Hence, our positive stance on the group is maintained driven by recovering target markets and the solid performance of its product portfolio.
Lundbeck has started the year on a decent note. While sales declined in constant currency terms, this had largely been expected due to Northera’s patent expiry. Encouragingly, substantial growth momentum was witnessed for all the major drugs, which should support strong growth in the coming quarters. Even the 2022 outlook was maintained despite escalating geopolitical and economic concerns. Hence, our positive stance on the neurology specialist is reiterated.
Lundbeck’s issues persisted in Q4, with newer drugs ‘again’ failing to offset the decline in older offerings. Moreover, the 2022 outlook was also below expectations due to the sustained pandemic headwinds. Management also unveiled a new shareholding structure, which is expected to increase further the founding family’s control, but with limited near-term implications/benefits for a performance revival. Hence, our estimates/target price should be slashed materially.
Impacted by higher-than-expected generics erosion for Northera and sustained pandemic headwinds, Lundbeck reported weaker sales in Q2 and management has further narrowed down its already-weak FY21 sales outlook. Resurfacing COVID-19 concerns, a modest pipeline and a history of big R&D failures also cast uncertainties over the group’s fortunes. The only silver lining is the profitability outlook, which has been narrowed upwards on the back of lower promotional activities. We wouldn’t be surprised
Q1 sales came in ahead of expectations as the robust performance in the core portfolio, particularly the recently-launched Vyepti, made up for the generic erosion of Northera. The profitability beat was driven by lower promotional activities amidst the pandemic. While management now anticipates a much bigger decline in Northera sales in FY21, increasing patient visits to clinics (as vaccination programmes gather momentum) should make up for the shortfall. Thus, FY21 targets were maintained. None
The second wave of lockdowns hampered the recovery in new prescriptions of core brands in Q4 and the generic erosion in matured drugs also weighed on the performance. Although a strong recovery is expected in H2 21, the upcoming patent expiry of Northera is a sentiment dampener. Ergo, management has guided for a soft FY21. However, strong underlying demand for the migraine drug, Vyepti could provide some respite in the mid-term. Furthermore, Brexpiprazole’s probable success would not only improv
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