Lundbeck jumps after a tweak to a collaboration deal

H. Lundbeck A/S (OMX: LUN) surged in early trading after it announced a license and development agreement with and Otsuka Pharmaceutical Co., Ltd (TYO: 4578) for 5HT6 receptor antagonist Lu AE58054 which is being developed as a treatment candidate for Alzheimer's disease . Lundbeck will get 150 million USD upfront upon signing and possibly up to 675 million in regulatory and sales milestones in exchange for co-development and co-commercialization rights in the U.S., Canada, East Asia including Japan, major European countries and Nordic countries. The companies will share sales, development, and commercialization costs based on the agreement with further financial details remaining undisclosed.

Last year Lundbeck announced that a 24-week Phase II study in 278 patients suffering from moderate Alzheimer's disease met its primary endpoint of an improvement in cognitive performance as measured by the ADAS-cog (Alzheimer's Disease Assessment Scale-cognitive sub-scale). The drug was administered in combination with plus10mg/day donepezil, a commonly used acetylcholinesterase inhibitor, and was placebo controlled vs. donepezil alone. Data from the study will be presented at the Alzheimer's Association International Conference (AAIC) in Boston on 13-18 July 2013. Pivotal phase- III program involving over 2500 patients is expected to begin this year.

The deal has an impact on Lundbeck’s financial guidance for 2013. The company now expects revenue of 14.4-15 billion DKK and EBIT of 1.9-2.4 billion DKK this year. . A further two co-development and co-promotion deal for Lundbeck’s drugs are expected to follow from the cooperation of the two companies. Lundbeck’s stock is still up more than 8% for the day above 107 DKK having briefly touched above 110 DKK in early trading.

Aripiprazole extended release FDA approved

H. Lundbeck A/S rose in Copenhagen for second day in a row with another marketing approval. This time it was the U.S. FDA granting once-monthly Abilify Maintena (aripiprazole) extended release injectable suspension for the treatment of schizophrenia specifically in relapse prevention. The approval was based on a statistically significant 52-week Phase 3 study reading on time to relapse delay. The dopamine D2 partial agonist product has been developed in a global CNS therapies alliance with Otsuka Pharmaceutical Co., Ltd (TYO: 4578).

Selinco receives EU approval

H. Lundbeck A/S (OMX: LUN) and its partner Biotie Therapies (OMXH: BTH1V) said that Selincro (nalmefene) has been approved as a treatment for the reduction of alcohol consumption in high drinking risk individuals. Predicting sales is an arduous tasks given the pioneering nature of the drug with the new treatment paradigm and the need to administer the drug in combination with continuous psychosocial support. The drug is expected to launch mid-year.

Lundbeck expects falling profits

Danish pharmaceutical company H. Lundbeck A/S (OMX: LUN), which focuses on central nervous system drugs communicated near term plans yesterday. ITs financial guidance for 2013 was significantly below expectations with new investments and high R&D expenditures expected with Lu AE58054 pivotal Alzheimer trials on tap. Launch of new products including Selincro™ and Brintellix™will also be costly. This all compounds the Lexapro (and impending Cipralex) patent protection loss revenue impact.

The preliminary revenue guidance is 14.1-14.7 DKK and EBIT is expected to fall in between 1.6-2.1 billion. The following year sales are expected to dip further to around 14 billion while EBIT is expected to show a similar trajectory and fall below 1 billion but above half a billion. Previously EBIT guidance was above 2 billion for both years. Markets have been giving the company a beating. The stock retreated 15% yesterday and it is still showing weakness today following some downgrades and overall poor sentiment in the pharmaceutical industry following some high profile trial failures from smaller biotech companies.

CHMP recommends Selincro approval

The European Medicines Agency’s Committee for Medicinal Products for Human Use (CHMP) said it has recommended granting marketing authorization for Lundbeck’s (OMX: LUN) and Biotie’s (OMXH: BTH1V) Selincro (nalmefene) for the reduction of alcohol consumption in adults with alcohol dependence. The aim is to help lower alcohol consumption with high risk drinkers and the recommendation is that the drug should be prescribed in combination with psychosocial support that focuses on treatment adherence and reducing alcohol consumption.

A positive opinion had been rather unanimously expected. The bigger issue was what kind of label would be given. The requirement for psychosocial support wasn't unexpected but it does make sales predictions rather difficult and analysts appear really torn on peak sales guidance. Lundbeck too has referred to the drug as some kind of a wild card with the entire treatment concept being completely novel. Both companies responded with a rather mild positive uptick. Final approval decision is expected in 2-3 months.

Lundbeck cuts 600 positions in Europe

H. Lundbeck A/S (OMX: LUN) says it is cutting around 600 jobs with most of the redundancies in Europe. The pharmaceutical company spins this to be because it wants to ”establish a more flexible commercial organization” and ”maintain cost control” and that the initiative ”aims at paving the way for a successful and profitable transition of Lundbeck’s product portfolio in Europe with several potential product launches in the coming years”.

Now if that was the only thing changing, it would be hard to see the need for this but alas those issues that truly do justify such a shift, aka increased pressure from healthcare reforms, generic competition (as the company also faces patent expirations, mainly that of Cipralex, which as Lexapro in the US already did that and revenues fell off a cliff while in Europe the protection is lost gradually depending on the region in the next couple of years), and pricing/reimbursement uncertainty in Europe facing more austerity are mentioned towards the end. Lundbeck continues to expect EBITDA of 3-35 billion DKK and EBIT of 2-2.5 billion before non-recurring costs from this restructuring. Those costs are estimated to amount to half a billion kroner depending on negotiations with employer representative groups and the timing of the cuts.

Lundbeck to file NDA and MAA for a major depressive disorder drug

H. Lundbeck A/S (OMX: LUN) said the statistically significant data of its multimodal antidepressant drug candidate Lu AA21004 from Phase III provides a basis for regulatory filing. The compound was compared vs. placebo in the treatment of major depressive disorder of MDD. Lundbeck says taht data from eight of out 10 short-term pivotal studies shows repeated statistical significance in reducing depression symptoms vs. placebo. It has also conducted a long term relapse-prevention study in MDD, confirming positive efficacy.

Lundbeck’s partner Takeda plans to file for US registration in H2 2012 and Lundbeck aims to submit the package for European and Canadian registration around the same time. The drug was generally well tolerated at increased doses. Thus far around 5000 individuals have received the drug. The companies also aim to continue to investigate the compound in cognitive dysfunction in depression.

Generic Lexapro coming to USA

The U.S. FDA said in a press release that it has approved first generic Lexapro (escitalopram) to treat both depression and anxiety disorder in adults. Teva Pharmaceuticals gained the approval for 5,10 and 20mg tablets. Teva has been granted 180 day generic exclusivity period.

H. Lundbeck A/S (OMX: LUN) has previously said it expects a major decline in revenues due to generic competition. For 2011 Lundbeck said the drug grossed 2.54 billion USD. Lexapro is sold in the U.S by partner Forest Laboratories, to whom the loss is proportionally even greater.

Strong placebo effect dulls investor mood over Selincro results

H. Lundbeck A/S (OMX: LUN) announced results of the three large Phase 3 studies with Selincro (nalmefene) for the treatment of alcohol dependence in connection with its presentations at the 2012 European Congress of Psychiatry. The headline statistic shows that patients treated with the drug were able to reduce alcohol intake by 66% on average after six months of treatment.

The drug aims to change treatment paradigm of alcoholism from total abstinence to reduction in consumption empowering the patient to take the drug on as-needed basis when they feel the urge to start drinking. Lundbeck had previously said that not all clinical endpoints were statistically significant albeit they all showed a positive trend vs. placebo. This was what investors were focusing on in today’s results.

Heavy drinking days dipped over 60% in both placebo and Selincro over a 6 month period with a statistically significant improvement at 5% confidence level for Selincro group. It would certainly have been preferable to be able to use a tighter criteria, particularly when it comes to commercial potential of the drug. A further 50% reduction over the next six months was seen in the one longer-term study, which was mainly looking at safety and tolerability, where as placebo group did not show further improvement.

The null-hypothesis for superiority of the drug over placebo in lessening total alcohol consumption could not be rejected at 5% level in ESENSE 2. In ESENSE1 the p value was below 0.05 in that endpoint as well. Statistically significant improvement in secondary endpoint of liver enzymes over placebo group is positive sign toward approval. Biotie Therapies (OMXH: BTH1V), which stands to gain a milestone from approval and royalties from sales has gained 6% for the day. Lundbeck is down slightly.

Lundbeck strengthens control over desmoteplase

H. Lundbeck A/S (OMX: LUN) acquires Paion AG’s (FWB: PA8) remaining rights to desmoteplase in a 20.1 million Euro deal. Lundbeck had acquired most of the global rights in the years past. Paion had retained some rights to participate in commercializing in German-speaking countries. It now aims to focus in specialty pharma strategy in anaesthesia and says its negotiating position for partnering of i.v anaesthetic/sedative candidate Remimazolam is considerably improved as a result of this transaction.

Desmoteplase is the most fibrin-specific thrombolytic agent known today. It is in phase III development for the treatment of patients who have suffered an acute ischaemic stroke 3-9 hours ago. Two of the three phase 3 studies of the plasminogen-activator have enrolled over half of the target number of patients, with the first study expected to be completed in H1 2013.

Paion had an agreement in place with Bayer Pharma AG. This will also transfer to Lundbeck as a part of the transaction. Lundbeck says it is to pay single-digit royalties on sales and ”insigificant milestones” to Bayer. Lundbeck expects to file MAA and NDA in H1 2014, although it does consider the project as high-risk. The fast-track designated drug candidate is genetically engineered version of a protein found in the saliva of the vampire bat.

Biotie up slightly on heavy volume after coverage on Bloomberg

Small Finnish biotech company Biotie (OMXH: BTH1V) made Bloomberg’s front-page as Biotie’s potential Alzheimer medicine SYN120 has been attracting interest. Roche has a one-time option to take back the rights after early-stage data prints later this quarter. Biotie’s investors have been vary of that since they were hoping a similar scenario to take place with the company’s fully human antibody couple years ago but Roche chose not to exercise its option for that compound, which is soon set to enter further clinical studies in orphan indications.

Biotie acquired SYN120 when it merged with Synosia Therapeutics last year. With this the company decided to focus even more on central nervous system drugs and its lead product Selincro (nalmefene), which has been out-licensed to H. Lundbeck A/S (OMX:LUN) has completed an extensive phase 3 program and the results will be presented at the 20th European Congress of Psychiatry (EPA) in Prague, Czech Republic, 3-6 March 2012.

The stock is up 2% on an unusually high volume in Helsinki stock exchange. Veromaa mentioned about the interest for SYN120 last week in a presentation at the 14th Annual BIO CEO & Investor Conference. When interviewed by Bloomberg he was much more direct, saying that “A number of reputable, highly interested pharma companies” have approached Biotie about the drug should Roche decline the option. The Bloomberg article is available here.

Good year for Lundbeck, Lexapro U.S. patent expiry looms

H. Lundbeck A/S (OMX:LUN) 2011 revenue was just over 16 billion (+8%), EBITDA 4.63 billion (+5%) and EBIT 3.4 billion (+1%), meaning that margins were down somewhat. The numbers are the highest so far for the company. Revenue growth was seen in all regions. The company feels that late stage pipeline progress (4 registration applications submitted) and partnership in 2011 have improved growth prospects going forward.

Blockbuster antidepressant Escitalopram sold 2% more in Europe and Japan (brand name Cipralex in Europe) and 2% more in the US (brand name Lexapro marketed by Forest Laboratories) in local currencies during 2011. The growth tamed towards the end of the year. The two other major products selling north of a billion DKK per year Ebixa (Memantine) for Alzheimer's disease and Azilect (Rasagiline) for Parkinson’s disease grew in double digits. Azilect (Tetrabenazine) marketed for chorea associated with Huntington’s disease in the US by Lundbeck was fast approaching one billion DKK level as well.

Escitalopram (Lexapro) patent expires in the USA in March 2012, which is expected to result in a revenue decline for the product. Lexapro was launched in Japan in 2011 together with Mochida Pharmaceutical Co., Ltd. Lexapro revenue from Japan is included in Cipralex sales number. Geographical expansion to China, where the company has a new research centre, with Lexapro, Axilect and Ebixa is also a focus area in cooperation with Xian-Janssen Pharmaceutical Ltd sales force.

While the underlying strong trend is seen to persist, guidance for 2012 shows a reduction in sales and earnings due to above mentioned patent expiring. Lundbeck guides for revenue between 14.5 and 15.2 billion, EBITDA of 3-3.5 billion and EBIT of 2.0-2.5 billion in 2012. The suggested dividend for 2011 is DKK 3.49 per share (30% payout ratio). For 2013-2014 the Danish pharmaceutical company expects revenue above 14 billion and profit from operations (EBIT) above 2 billion DKK. In 2014 the company faces Cipralex's EU patent expiration. The stock was down ever so slightly for the week.

Lundbeck up on positive Q2 numbers

H. Lundbeck A/S (OMX: LUN) reported better than expected second quarter earnings and anticipates revenue and EBITDA to be in the upper end of guidance ranges of 15.3-15.8 billion and 4.3-4.6 billion Danish kroner. Write-offs in the 300-400 million range on buildings and IP resulting from staff cuts of 125-175 employees will offset EBIT and net profit gains, so guidance for those is maintained.

Second quarter revenue was 4.1 billion DKK, which was 9% improvement on 2010 Q2. Operating profit was 1.25 billion (operating margin 30.5%) and profit from operating a hair above 1.1 billion, corresponding to an EBIT margin of 26.9%. The stock had performed well in the market turmoil until the last couple of days and was still in positive territory for the year. Today it is making another move higher.

Ebixa for Alzheimer's disease and Azilect for Parkinson’s disease showed impressive revenue growth numbers at 16% and 12% respectively, but Lundbeck was hoping for even stronger number from Azilect. Lundbeck’s best selling drug antidepressant Cipralex grew revenue by 2% (and US sales for Lexapro were up strongly).

During the quarter, Lundbeck concluded the last of the large phase III trials with Nalmefene for alcohol dependence. The company is still very coy about the results, only saying that the data was encouraging, consistent with previous studies and that the product showed overall positive clinical profile. Lundbeck expects to submit MAA in Europe before the end of the year.

Lundbeck goes lean

H. Lundbeck A/S (OMX: LUN) is highlighted along with Pfizer and GlaxoSmithKline in Industryweek's article on how Lean is now catching on in the pharmaceutical industry. The article states that productivity increases made by Lundbeck as a result of a shift to lean in both its shop floor and supply chain were so meaningful, that Lundbeck brought back much of the outsourced work. You can read the full story by clicking here.