Danske Bank: Lundbeck – Q2 21

Lundbeck (UW) reported EBITDA of DKK995m in Q2 21 vs. DKK1.2bn in Q2 20 as revenues declined to DKK4.0bn from DKK4.4bn as Lundbeck saw generic erosion on Northera. Excluding Northera sales declined by 1% y/y in reported currency and was up 7% in local currencies. Net debt to EBITDA declined to 0.9x from 1.3x in Q2 20 and was flat vs. end-2020. Lundbeck updates its FY2021 guidance and now expects EBIT of DKK2.0-2.3bn vs previously DKK1.8-2.3bn. Core EBIT is now expected to be DKK3.3-3.6bn vs. previously DKK3.1-3.6bn. News on the pipeline include a delay to the phase 3 trial for Rexulti in PTSD due to difficulties in enrolling patients due to Covid-19. Furthermore the phase 2 proof of concept trial on Rexulti in borderline personality disorder missed on primary endpoint. Overall a credit neutral Q2 21 based on the numbers, outlook and leverage but slightly negative all in all due to the pipeline set-backs.