Shares in Lundbeck leapt almost 20% on Wednesday as investors welcomed news of a major restructuring programme that will see a jobs cull of around 1,000 in a bid to save cash and ride out generic competition.
Unveiling the plans, Lundbeck's newly anointed chief executive Kåre Schultz said he is pleased with sales growth of new products but is not satisfied with profitability. The restructuring, he said, “is necessary and will make Lundbeck drive sustainable value creation for all our stakeholders”.
The Danish drugmaker is aiming to cut the total cost base by around 3 billion Danish kroner with full effect in 2017, through a major restructure of its headquarters and commercial operations, which will see a workforce reduction of around 17%.
Going forward, the firm said it will emphasise focus on five key growth drivers - long-acting antipsychotic Abilify Maintena (aripiprazole), the antidepressant Brintellix (vortioxetine), neurology drug Northera (droxidopa), Onfi (clobazam) for Lennox Gastaut-syndrome and the antipyschotic Rexulti (brexpiprazole) - and drop a number of early-stage projects to maximise efficiency and boost profitability.
Lundbeck has also raised its full-year guidance on the back of its plans, now expecting core profit from operations (assuming constant exchange rates) to be around 0.5 billion Danish kroner compared to previous guidance of around 0 Danish kroner.