Release Date: August 21, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- H. Lundbeck AS (HLUBF, Financial) reported a strong first half of 2024 with a 10% increase in total top-line revenue.
- Strategic brands, including Vyepti and Rexulti, showed significant growth, with Vyepti achieving a 78% year-over-year increase in global net revenues.
- The company raised its financial guidance for 2024, reflecting confidence in its strategic direction and performance.
- H. Lundbeck AS (HLUBF) is advancing its R&D pipeline, with promising developments in areas such as PTSD and neuro-rare assets.
- The company has successfully reallocated resources to focus on high-growth areas, enhancing its strategic brand investments and optimizing its commercial strategy.
Negative Points
- The adjusted gross margin decreased by 1.3 percentage points due to higher raw material and manufacturing costs.
- Sales and distribution costs increased by 10%, reflecting continued investments in strategic assets, which may impact short-term profitability.
- Administrative expenses rose by 31%, driven by higher legal and personnel costs, which could affect overall financial performance.
- The adjusted EBITDA margin decreased by 2.1 percentage points, influenced by higher costs and unfavorable currency effects.
- There are concerns about potential generic competition for Abilify Maintena in the US and EU, which could impact future revenue.
Q & A Highlights
Q: What are the latest thoughts on when generic competition for Abilify Maintena is likely to emerge in the US and EU?
A: Thomas Gibbs, Executive Vice President, Head of Lundbeck in the United States, stated that they do not anticipate any impact from generics on their midterm planning. They are focusing on promoting Abilify Maintena and accelerating the conversion to Abilify Asimtufii.
Q: Can you provide details on the Trintellix renegotiation with Takeda and its financial implications?
A: Thomas Gibbs explained that reallocating resources from Trintellix to Rexulti is part of their focused innovator strategy. They do not expect any material financial impact on their midterm planning due to this change.
Q: What is the outlook for the PTSD filing, and how confident are you about approval?
A: Johan Luthman, Executive Vice President, Research & Development, mentioned that the FDA has accepted the filing, and while they have not indicated any outcomes, the comprehensive dataset from three trials provides a strong basis for optimism.
Q: How does the 909 program compare to competitors, and what are the plans for the 996 program in Parkinson's disease?
A: Johan Luthman highlighted that 909 has a unique mechanism of action, differentiating it from competitors. For 996, they are rethinking the approach due to challenges in combining patient populations in early trials.
Q: Can you provide guidance on margin targets and administrative expense adjustments?
A: Joerg Hornstein, Chief Financial Officer, stated that medium-term targets remain in place, and the guidance includes significant pre-commercialization spend for PTSD. The increase in administrative expenses is due to legal costs, personnel expenses, and the focused innovator strategy.
Q: How is Vyepti performing in terms of pricing versus volume dynamics in the US and Europe?
A: Thomas Gibbs noted that Vyepti's growth in the US is driven by demand, with a steady flow of new patients. Michala Fischer-Hansen added that Vyepti is seeing strong uptake and market share progression in Europe.
Q: Are there any plans to adjust peak sales expectations for Vyepti given its strong performance?
A: Charl Van Zyl, CEO, mentioned that they stand by their previously communicated peak sales potential and will provide more insights during their upcoming capital markets event.
Q: Are there any one-off true-ups or wholesaler swings affecting strategic brand performance in the US?
A: Thomas Gibbs confirmed that there were no extraordinary items or material gross-to-net adjustments during the quarter for Vyepti and Rexulti.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
