Danish pharma company Lundbeck cut its financial forecasts for 2013 and 2014 yesterday as it deals with the loss of patent protection to its big-selling antidepressant Cipralex/Lexapro.
Lundbeck said sales would be around 14bn kroner ($2.5bn) in 2013 – around 700m kroner lower than analyst estimates – and will and stay at the same level in 2014. Earnings before interest and taxes (EBIT) are predicted to be in the 500m-1bn kroner range, well shy of earlier expectations.
The news caused Lundbeck’s shares to drop as much as 16 per cent yesterday as it blamed the declines on escalating R&D costs and the effect of austerity measures in the Eurozone which are resulting in “pressure on pricing, faster generic erosion and longer time to achieve market access for new products.”
The size of the share price decline surprised some observers, given that Lundbeck is on the brink of bringing three new products to market in the next few quarters.
The company closed in on EU approval for its alcohol dependency product Selincro (nalmefene) after the Committee for Medicinal Products for Human Use (CHMP) issued a positive opinion on its application earlier this month.
Lundbeck is also on the brink of bringing a once-monthly formulation of its Abilify (aripiprazole) antipsychotic product to market, while a new antidepressant, Brintellix (vortioxetine), is due for launch in early 2014.
The company needs its new products to gain momentum quickly as it copes with plummeting sales for former blockbuster Cipralex (escitalopram), which fell 89 per cent in the third quarter to 54 million kroner after generic rivals were approved in the US in March.
Another reason for the cut in profits is anticipated costs associated with the start of late-stage clinical trials for Lu AE58054, a selective serotonin 5HT6 receptor antagonist which could form the basis of a new treatment approach for Alzheimer’s disease.
As part of a programme aimed at restoring profitability, last week Lundbeck said it had signed a $100m agreement to divest a portfolio of non-core products, sold primarily in the US, to Italian drugmaker Recordati. The products had annual revenues of approximately $45m in 2011.