Lundbeck disappoints with cuts to sales, profits forecasts
Lundbeck's struggle to rebuild after the loss of its now-off-patent antidepressant Cipralex will take more of a toll on its finances than previously thought. The company has cut its outlook for 2013 and 2014, citing Europe's economic woes and its own R&D expenses.
As Reuters reports, Lundbeck was more optimistic two years ago, when it predicted that annual sales from 2012 to 2014 would top 14 billion crowns per year, with earnings before interest and taxes of 2 billion crowns-plus. But CEO Ulf Wiinberg now says that Europe's healthcare cuts have cut more deeply into sales than previously expected, at a time when generic competition is taking a major bite out of sales.
So, Lundbeck now says sales won't surpass 14 billion crowns (about $2.5 billion), but hover at that level for 2014. Profits will fall even farther short of earlier estimates; Wiinberg now expects operating profits of half a billion to 1 billion crowns. Analysts had been forecasting 2014 sales of more than 14.7 billion crowns, with profits of more than 2.5 billion.
The profits shortfall stems from bigger expenses on development and on anticipated drug launches. Its alcohol addiction treatment Selincro was recommended for European approval last week, in time for a launch next year, and it's expecting to win an OK for a new antidepressant for launch in 2014. "You only get one chance to launch a product and we have to do it well," Wiinberg told investors at a briefing (as quoted by Reuters).
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