Lundbeck’s focus on the U.S. is paying off. And it’s a good thing, too. While revenue in its native Europe slid by one-fourth in the first half of this year, U.S. sales drove the Danish drugmaker to 5% sales growth overall.
The first-half results beat expectations, and they came as welcome news for a company that has been struggling with generic competition and cutting costs to compensate. Lundbeck slashed its payroll by 1,000 jobs last year amid a savings drive, hoping to limit the damage while it works to ramp up sales of its newer meds. The company’s shares were up to a 15-year high on the earnings news.
Those newer drugs, including the long-acting injectable antipsychotic Abilify Maintena and the antidepressant Brintellix, each delivered big increases. Abilify Maintena all but doubled sales to 534 million kroner, while Brintellix, sold as Trintellix in the U.S., grew by 103% to 482 million kroner.
Meanwhile, the brand new antipsychotic Rexulti, approved in the U.S. last July, grew to 309 million kroner, a nice jump for an early launch. It’s approved to treat schizophrenia and as an add-on antidepressant, and Lundbeck and partner Otsuka have been running DTC ads in the U.S. since February.
These products helped offset generic competition to its Huntington’s disease remedy Xenazine, as well as the loss of revenue from the Parkinson’s drug Azilect, which Lundbeck handed back to partner Teva Pharmaceutical Industries last year.
Overall, first-half sales came to 7.5 billion kroner, or about $1.1 billion, as revenue in the U.S. went up by 33% to 3.84 billion kroner ($580 million). Europe dropped by 25% to 1.45 billion kroner, and international markets slipped by 5% to just over 2 billion kroner.
Reeling from the loss of Cipralex exclusivity, Lundbeck hired former Novo Nordisk exec Kåre Schultz to take the reins last May, and he’s been working to engineer a turnaround since. The layoffs and cost cuts, announced last August and designed to save about $445 million annually by 2017, mostly hit the company’s headquarters in Valby, Denmark, and its commercial operations in Europe. At the time, Lundbeck also said it would expand a business services center in Krakow, Poland, to take on admin and accounting functions, and shut down a selection of early-stage R&D projects.
Meanwhile, analysts are looking ahead to a potential Alzheimer’s treatment, idalopirdin, which Lundbeck is developing with longtime partner Otsuka. Phase III trial data is due on that med next year. Alzheimer’s drugs are risky bets, however; a series of promising treatments have proven less so in late-stage trials.
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