Lundbeck's stock took a sharp downturn yesterday (Wednesday) as investors got nervous over news that the firm has cut its financial outlook for the next couple of years.
The Danish drugmaker was trading almost 17% lower on the Copenhagen exchange by early afternoon, after announcing a trimmer profit forecast on the back of the tough climate in Europe - including pricing pressures, generic competition and medicines access issues - and a greater investment in new products.
In 2010, Lundbeck said it expected annual revenues to exceed 14 billion Danish kroner a year from 2012-2014, with earnings before interest and tax (EBIT) overshooting the 2 billion kroner mark.
Now, the company has forecast 2013 revenues in the range of 14.1-14.7 billion kroner and EBIT of 1.6-2.1 billion kroner, dropping even further to 14 billion kroner and 0.5-1 billion kroner, respectively, for 2014.
According to Ulf Wiinberg, Lundbeck's chief executive, the revised forecasts are a result of the company boosting investment in its late-stage pipeline and new product launches to maximise long-term growth.
The firm is expecting to launch Abilify (aripiprazole) once-monthly for schizophrenia in early 2013, and is also shelling out on prelaunch activities for its next-generation antidepressant Brintellix (vortioxetine) as well as the initiation of a pivotal development programme for its investigational Alzheimer's disease drug Lu AE58054.
The company said it expects to provide more detailed guidance on these issues with its full-year results for 2012, which are due on February 6, 2013.