'A tougher narrative into 2024' - MS starts Lundbeck with 'underweight'

H Lundbeck A/S

14/11/2023 11:19

** Morgan Stanley initiates H Lundbeck  HLUNb.CO  with
"underweight" seeing "a tougher narrative" into 2024 for the
Danish drugmaker 
    ** The launch of Rexulti in Alzheimer's Agitation (AAD), a
drug used to treat agitation in patients with Alzheimer's-type
dementia, could underwhelm, says MS, adding it foresees margin
pressure into 2024 as R&D investments step up
    ** MS is cautious on Rexulti's potential due to lack of
perceived differentiation on efficacy versus cheaper generic
alternatives, struggles with access, and competition on the
horizon
    ** The broker sees little to move the shares in the coming
months, despite an improving pipeline narrative
    ** However, it sees the CEO's M&A strategy "an encouraging
start", noting the encouraging commentary to target several
smaller opportunities in niche neurology indications that are
synergistic with the existing portfolio 
    ** The broker expects the Phase 2 multiple system atrophy
(MSA) readout in Q2 2024 to likely have a strong bearing on
near-term M&A
    ** Moreover, it expects strong cash generation should
continue in the near-term

     

 (Reporting by Marta Frąckowiak)
 ((marta.frackowiak@thomsonreuters.com))