After a series of late-stage disappointments, Lundbeck needs to act quickly to fill its pipeline, according to the Danish firm’s chief executive, and is ready to open its wallet.
Claus Braestrup is all too aware that the company remains exposed to the weak US dollar and looming patent expiries starting in 2012 of its big-earning antidepressant Cipralex (escitalopram), sold in the USA by partner Forest Lab as Lexapro. The company also announced disappointing Phase III data for the new stroke drug desmoteplase last month, which came a couple of months after Lundbeck and partner Merck & Co said that data from Phase III studies suggested that the clinical profile for gaboxadol in insomnia did not support further development.
Life is not terribly rosy but “it's definitely not a catastrophe or a deep crisis. But a crisis, yes," Mr Braestrup told the Danish daily newspaper Jyllands-Posten, reported by Reuters. "I have told the organisation that if there is a drug that fits and that we can buy for a fair price, we must bloody well have it."
He added that the firm’s newly-hired chief financial officer Anders Gotzsche's job will be to establish a structure that will allow Lundbeck to make acquisitions if the possibility arises. As to where its options lie, analysts say that Lundbeck could do with establishing a presence of its own in the USA, but the high prices being paid for firms and products may prove prohibitive. Observers have also noted that the Lundbeck Foundation, which owns nearly 73% of the company may choose to sell the firm but it has not made any noises to suggest this is a likely move.
GeneLogic signed up to give life to abandoned projects
In the meantime, the Danish firm has announced that it is going to work with the USA’s GeneLogic “to seek alternative development paths for certain Lundbeck drug candidates”.
The compounds referred to have been discontinued or de-prioritised in clinical trials for reasons other than safety and it was noted that agreement provides for milestones and royalties similar to those paid for development-stage in-licensing deals, “discounted to account for Lundbeck's contribution as the originator of the compound”. The agreement also provides Gene Logic with the option to receive an exclusive licence to any of these drug candidates "for which it identifies a potential new use and that Lundbeck chooses not to pursue", in which case the latter would receive success-based milestone and royalty payments.
In a separate agreement, Gene Logic said it expects to get approximately $2.5 million in fees from Lundbeck for a licence to certain technology rights.