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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 - Small-cap quantitative research - Momentum screen refresh + 10 focus stocks
12 Jan 17
We have refreshed our momentum style screen for the first time since inception on 26 July 2016. As before, the screen selects the 25 stocks exhibiting the most extreme momentum characteristics, according to our measurement method. From these we have selected 10 to focus on. Since inception the screen has underperformed both the main small-cap and micro-cap indices against a background of generally rising momentum. We have noted a subset of the basket, where decelerating momentum at the time of measurement appears correlated with significant share price falls since selection. We shall monitor this factor with the new screen, albeit there are only two such stocks showing this pattern, namely Lamprell (not rated) and Gear4music (not rated).
N+1 Singer - Best Ideas 2017 - Top picks
04 Jan 17
Today we publish our Best Ideas for 2017 - 12 stocks that we believe have excellent prospects in the current year together with a detailed discussion of what we see as the key sector and market themes for 2017. Our top picks are Cineworld, Elementis, Herald Investment Trust, Hill & Smith, IQE, MySale, Redde, ReNeuron, RhythmOne, SDL, Servelec and Severfield.
N+1 Singer - Morning Song 12-01-2017
12 Jan 17
As anticipated, the second half has again been stronger than H1 and results will be broadly in line with expectations. In line with this, the order book has continued to grow and is at record levels. This confirms that significant progress has been made in the Group’s shift towards its Technology Products division which, as targeted, contributed c.60% of group revenue in FY16. The small acquisition of Cable Power also gives a complementary boost to the product range. It is also worth noting the significant reduction in net debt, £1.0m ahead of our forecast. We remain supportive of the Group’s strategy and continue to see a bright future as this transition towards a design led technology solutions business continues. We look forward to more detail in March at the final results.
10 for 17
09 Jan 17
As always at the start of a year, there are significant uncertainties about the year ahead but I think in 2017, the level of uncertainly has decisively moved up a gear. In fact, a leading economist at the LSE, Ethan Ilzetzki, was recently quoted as saying “I view the current global economic environment as the most uncertain in modern history”. Wow.
The Monthly January 2017
09 Jan 17
Despite all the hullaballoo of the Brexit vote and the subsequent election of Donald Trump as the next US President, the UK stock market prospered last year, especially in the latter few months of 2016. The combination of a depreciating currency – making $ earnings more valuable in relative terms - and the Trump emphasis on infrastructure expenditure drove the stock market higher