Citi starts Lundbeck with 'neutral' as patent expiries loom

H Lundbeck A/S

23/01/2023 13:34

** Citi initiates H Lundbeck A/S  LUN.CO  with "neutral",
saying nearing patent expirations are a "key concern" for the
Danish drugmaker in the next decade
    ** The brokerage sees limits to Lundbeck's growth outlook
past 2026, with patents for four of its strategic brands set to
expire and an "underwhelming" pipeline for phase two trials
failing to bridge the earnings decline
    ** The brokerage forecasts average sales decline of more
than 10% beyond 2026, due to expirations including Trintellix in
2026, Rexulti in 2029, and Vyepti in 2034
    ** It says Lundbeck's 40-50% discount to its European peers
is "justified", citing nearly flat earnings growth estimates for
2024-2029, compared to 5-9% for peers
    ** Citi's preferred mid-cap picks in the sector include
Hikma  HIK.L , Grifols  GRLS.MC  and Bavarian Nordic  BAVA.CO 
    ** Out of 12 analysts that cover Lundbeck, three rate it
"strong buy"/"buy" and nine "hold"
    ** The stock is down around 2% in afternoon trade
 (Reporting by Greta Rosen Fondahn)
 ((Greta.RosenFondahn@thomsonreuters.com))