Another quarter, another Lexapro blow for Lundbeck. The antidepressant, sold in the U.S. by Forest Laboratories, is suffering severely from generic competition. That suffering moves across the Atlantic to Lundbeck's Danish headquarters, forcing CEO Ulf Wiinberg to promise a turnaround.
Lundbeck's sales dropped 13% for the first half, to 3.56 billion Danish crowns, or about $590 million. But Wiinburg was able to point to a 65% increase in new-drug sales during the first half of the year. That performance emboldened him to predict that new products could make up the gap from Lexapro's U.S. sales--if not surpass it. "The development of our business foundation with more drugs has gone very well in the first half of the year," he said in a statement.
The launch of new products was a double-edged sword for the period, however. Those costs helped push Lundbeck to an operating loss of 118 million crowns, or $19.6 million; analysts had been expecting a profit of more than twice that much. Plus, the company booked a 500 million crown restructuring charge, as it prepares for some 600 job cuts.
To end on a hopeful note, the company is scouting around for a partner on another new product. It's years away, but the Alzheimer's treatment could be big, provided it works. It's not a disease-modification drug like the Pfizer ($PFE)/Johnson & Johnson ($JNJ) candidate, bapineuzumab, that hit the wall this week. It's a cognition booster that targets brain receptors in regions associated with learning and memory processes.
"[W]ith the [phase II] results that we have announced, this may be one of the lead compounds in Alzheimer's development," Wiinburg told Bloomberg. "[A] lot of companies" are "very interested" in partnering up for phase III, Wiinburg said, which could begin before year's end.