Lundbeck sees no slowdown in key drugs despite cautious 2026 outlook, CEO says

• Lundbeck expects 2024 revenue growth of 7-9% at constant exchange rates and adjusted core earnings to jump 8-14%, unchanged despite Q2 beat
• Generic versions of schizophrenia drug Abilify Maintena expected to enter markets in H2 2024, mainly in Australia and Canada, impacting sales
• Company is expanding beyond psychiatry into rare neurological diseases, relying on current brands to fund development as older drugs lose exclusivity

Summary

Danish pharmaceutical company H. Lundbeck reported stronger-than-expected Q2 results while maintaining its full-year guidance and expressing confidence in its key growth drivers despite approaching generic competition.

Financial Performance:

• Q2 revenue rose 7% to 6.46 billion Danish crowns ($1.00 billion), beating analyst expectations of 6.23 billion crowns
• Adjusted EBITDA reached 1.98 billion crowns versus consensus estimate of 1.95 billion crowns
• Full-year outlook unchanged: 7-9% revenue growth at constant exchange rates and 8-14% adjusted core earnings growth

Key Products:

CEO Charl van Zyl emphasized no demand slowdown for the company's two main growth drivers: Vyepti (migraine-preventing infusion drug) and Rexulti (antipsychotic pill). However, generic competition for schizophrenia treatment Abilify Maintena is expected to launch in H2 2024, primarily in Australia and Canada, which will impact sales.

Strategic Outlook:

Lundbeck reiterated its full-year guidance despite strong Q2 performance, citing non-recurring factors that boosted first-half results, including planned inventory build-up related to a new partner-market model. The company is expanding beyond psychiatry and migraine into rare neurological diseases, using cash flow from current brands to fund development as older drugs lose patent exclusivity.

The CEO expressed confidence in managing the potential growth gap between generic competition and new pipeline drugs reaching market, with promising mid-stage trial results for experimental treatments in epilepsy and rare hormonal conditions reported in June. Van Zyl indicated acquisitions are not necessary to bridge this transition period.