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Research Tree provides access to ongoing research coverage, media content and regulatory news on H LUNDBECK A S. We currently have 7 research reports from 1 professional analysts.
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H LUNDBECK A S
H LUNDBECK A S
Another guidance upgrade
10 Nov 16
Lundbeck continued on its solid transformation journey with another consensus-beating quarter. Q3 16 total revenue was up 8% yoy to DKK3.9bn (+6% in LC), primarily driven by five key products (all in LC) – Rexulti (+324%), Northera (+142%), Brintellix/Trintellix (+65%), Abilify Maintena (+51%) and Onfi (+37%). These were more than able to cushion the negative impact stemming from the generic erosion of Xenazine (-38%) and the loss of sales on Azilect (-73%) due to the returning of the European rights to Teva. Profitability came in even better, with core EBIT showing a growth of 134% to DKK988m (the margin improved by c.13ppt to c.25%), mainly benefiting from the ongoing restructuring programme and positive product mix. Management again raised its full-year outlook at CER (third time this year) – while revenue guidance was increased to DKK15.3-15.7bn from an earlier DKK14.6-15bn, the EBIT outlook was upped to DKK2.1-2.3bn from a previous DKK1.5-1.7bn.
Another Alzheimer's drug bites the dust
26 Sep 16
One of Lundbeck’s key pipeline drugs, Idalopirdine, for the treatment of Alzheimer’s disease (being developed in collaboration with Otsuka) flunked in a phase III study called STARSHINE. The drug failed to meet both primary and secondary end-points in either of the two doses, sending the shares down by c.15% on last Friday (23 September 2016). This was the first of the three phase III trials (data from the remaining trials is expected in Q1 17). The news had a ripple effect on Axovant Sciences (stock price down c.12%), which is developing a similar type (5-HT6 receptor antagonist) of Alzheimer’s drug.
Excellent quarter; second successive guidance upgrade this year
30 Aug 16
Lundbeck reported solid Q2 16 numbers, with both top line and bottom line coming in ahead of both consensus and our estimates. Revenue increased 3% yoy to DKK3.8bn (+5% at LC), driven by the continued outperformance of five key products (all at LC) – Abilify Maintena (+82%), Brintellix/Trintellix (+82%), Northera (+143%), Onfi (+46%) and Rexulti (sales of DKK193m), which more than offset the generic erosion of Xenazine (-38%) and the negative impact from the return of Azilect’s rights in Europe and certain other countries to Teva (-78%; Lundbeck now receives only royalties in these countries). Core EBIT increased 438% to DKK726m (the margin improved c.15.6ppt to 19.4%), led by benefits from the restructuring programme and the improving product mix. Net income came in at DKK232m, compared with a loss of DKK3.9bn in Q2 15, which was negatively impacted by the recognition of impairment losses of DKK4.8bn (primarily related to Rexulti). Buoyed by these results, management upgraded (for the second time this year) its FY 16 revenue guidance to DKK14.6-15bn (from an earlier DKK14.2-14.6bn) and the EBIT outlook to DKK1.5-1.7bn (from the previous DKK1.3-1.5bn).
Strong Q4 as Brintellix gets closer to cognition
07 Mar 16
Q4 15 ahead of expectations Lundbeck’s core numbers for Q4 15 and FY 15 came in ahead of market expectations as well as its own guidance. Sales for the quarter grew 7% at LC and 15% in DKK to c.DKK3.7bn (against our expectation of c.DKK3.3bn), fuelled by strong growth in five key products (combined up 142%) as well as healthy forex benefits, offset to some extent by the generic erosion of Cipralex (Europe and Canada) and Ebixa (Europe). The key development, however, was on the profitability front, where excellent cost control in administration and R&D (thanks to restructuring efforts) allowed the company to report higher-than-expected core EBIT of DKK73m. For the full year, while sales were flat at LC (+8% in DKK) to DKK14.6bn (vs. the company’s guidance of DKK14bn), core EBIT declined 31% to DKK847m (vs. the company guidance of DKK700m). At the reported level, EBIT and net profit came in slightly below our expectations at a loss of DKK6.8bn and DKK5.7bn, respectively, mainly on account of the impairment/reclassification of products’ rights charges of c.DKK5.7bn (mainly related to Rexulti and Abilify Maintena) and the restructuring expenses of c.DKK1.1bn recognised during the year. For FY 16, management sees (at LC) revenue of DKK13.8-14.2bn and EBIT of DKK1-1.2bn. This factors in the loss of Azilect sales in Europe (FY 15: DKK1.3bn) as it returned rights back to Teva. While there will be no dividend pay-out for FY 15, the company has revised its dividend pay-out range from 25-35% to 30-40%. It has also announced its long-term EBIT margin target of 25% (three to five years). It has doubled its executive management team by adding three new members – Lars Bang, Staffan Schüberg and Jacob Tolstrup.
Early signs of restructuring benefits
25 Dec 15
In the aftermath of the massive restructuring programme announced at the time of Q2 15 earnings release, Lundbeck reported strong Q3 numbers, with both revenue and profitability coming in ahead of market expectations. Total revenue was up 7% yoy at LC to DKK3.7bn, driven by (all at LC) Northera (+696%), Abilify Maintena (+182%), Brintellix (+171%), Onfi (+81%), Sabril (+13%) and Xenazine (+7%), along with the divestment gain of DKK113m related to sale of its stake in Naurex, offset to some extent by the continued generic erosion of Cipralex (-46%) in Europe and Canada, and Ebixa in Europe. Forex contributed 8ppts, pulling the reported growth to 15%. Strong top-line growth coupled with the early benefits of the restructuring plan, led to 42% growth in the core EBIT to DKK423m (margin improved 218bp). However, at the reported level, it posted a loss of DKK1.5bn and DKK1.3bn, at the EBIT and net profit level, respectively, mainly due to one-off expenses of the restructuring charge of DKK1.1bn and an impairment charge of DKK671m. For FY 15, while maintaining the core revenue outlook of DKK14bn, management nudged up core EBIT and reported EBIT guidance to DKK700m (from DKK500m earlier) and loss of DKK6.8bn (from an earlier loss of DKK7bn), respectively.
Recovering and reorganising under the CEO’s ‘Kare’
26 Aug 15
The repackaged Lundbeck under the new CEO, Kare Schultz, reported better than expected Q2 15 results (beating consensus by c.4%), sweetened further by an unexpected guidance upgrade. More critical, however, was the announcement of a major restructuring programme to cut down the total cost base by c.DKK3bn by 2017 (c.DKK1.5bn by 2016) and restore profitability. The programme includes – rationalisation of European commercial operations (management aims to cut headcount by c.1,000, 18% of the current employee base) as well as cutbacks on R&D (including closure of certain early-stage projects). The total cost associated with the restructuring has been estimated at DKK1.7bn, to be recognised in Q3 15. In addition, the company has also recognised DKK4.8bn (included in R&D in Q2 15), related to the change in accounting of product rights/ milestone payments. Based on the above, management has now guided for a full-year operating loss of DKK7bn (we had earlier estimated a DKK1bn loss). On the operational front, Lundbeck recorded a 5% cc decline, better sequentially (10% cc decline in Q1 15), but sluggish on a yoy basis (Q2 14 – up 1% cc) — a currency tailwind of 10%, however, led to a 5% reported growth vs. a 1% and 2% decline in Q1 15 and Q2 14, respectively. Generic erosion on Cipralex and Ebixa remain overhangs, but were offset by strong performances (slightly higher than our estimates) from newer launches including Brintellix, Onfi, and Abilify Maintena. Following the encouraging results, management has upgraded it FY 15 guidance: revenue estimated to be c.DKK14bn from the previous range of DKK13.2–13.7bn, while core EBIT is now expected to be c.DKK500m (c.DKK0m earlier).
N+1 Singer - Morning Song 30-11-2016
30 Nov 16
Sanderson has delivered full year results in line with expectations and the 19 October trading update after a strong finish to the year compensated for a slower start. A healthy level of pre-contracted recurring revenue (50%), incremental sales to existing customers and new customer wins at higher average order values helped deliver solid revenue growth in both the Digital Retail (+9%) and Enterprise (+12%) divisions. A decent order book and good sales momentum suggest that the company is on track to deliver on unchanged profit expectations for the current year. We continue to view the valuation (FY17 EV/EBITDA 8.6x) as undemanding given an attractive combination of accelerating growth potential, strong cash generation and growing dividends.
30 Nov 16
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N+1 Singer - Morning Song 05-12-2016
05 Dec 16
RTHM is acquiring a profitable Canadian listed mobile specialist for equivalent of US$42.5m consideration in shares (88.235m). This helps adds to two growth vectors RTHM is targeting; (i) adds unique exclusive audience (10m unique) and (ii) Exclusive demand Yahoo and Facebook. The business has 15 premium and owned and operated apps which provide users with rewards for activity. The business is expected to deliver c$9m of EBITDA in FY18 including $2m of cost synergies. This equates to just 4.7x EV/EBITDA. This marks what we see the first step in RTHM activity to scale the business and deliver on margin potential (see our initiation notes). Our initial estimates for EPS revisions are very significant - for FY18 are 2.3 cents (currently 0.6) and for FY19 4.3 (currently 2.5). There is a call at 830 for investors and we will revise post this.
N+1 Singer - Morning Song 29-11-2016
29 Nov 16
Vp has reported another impressive set of interims, confirming strong growth in most markets and a positive outlook. Recent acquisitions are bedding in well and the full year outturn is set to exceed previous expectations (5%/6% EPS upgrades in FY17/FY18). The recent Capital Markets Day provided a reminder of Vp’s qualities (specialist focus, high returns, strong cash generation) and its growth potential, which in our view are not reflected in a modest <11x P/E rating. We firmly believe the shares are due a re-rating and see intrinsic value in excess of 800p.
Panmure Morning Note 02-12-16
02 Dec 16
We expect CareTech to report FY results to September on 8th December. A positive trading update in October indicated that performance for the year was in line with market expectations therefore we are focusing on the outlook. We expect a confident statement since the end of 2016 showed positive trends across fee rates, expansion in places and occupancy. We believe CareTech is well positioned for further expansion, and remains at an attractive valuation. We retain our BUY and 380p price target.
Food intolerance driving growth
29 Nov 16
Omega Diagnostics Group has an established core business providing high quality in vitro diagnostic tests within three core areas of competence – Food Intolerance, Allergy & Autoimmune, Infectious Disease – that are sold in over 100 countries. The group offers steady low single-digit growth which is profitable and cash generative. Investment in new products has seen the launch of a new panel of automated allergy tests and progress on Visitect CD4 for monitoring of HIV positive patients. Interim results highlighted the opportunities to accelerate growth of the business, particularly Allersys, which has drawn attention from its partner.