Seeking Alpha: Ongoing Skepticism Toward Lundbeck Still Leaves An Opportunity

Danish mid-cap CNS drug specialist H Lundbeck (or "Lundbeck") (OTC:HLUYY) (LUN.CO) doesn't get all that much attention in the U.S., even though drugs like Lexapro, Namenda, and Abilify Maintena may be a little more familiar to many readers. What is also familiar here is Lundbeck's story over the next few years - one where revenue and profits will come under serious pressure from branded drugs going generic, and where investors have to look to a relatively narrow list of drugs/drug candidates to offset the losses.

As it stands now, I believe the Street is overestimating the profit pressures that Lundbeck will experience and underestimating the extent to which management can cut costs to compensate. While pipeline risks are real, I believe these shares are still undervalued. These shares are up 40% from my earlier recommendation, but I believe there could be another 20% to go, as well potential positive drivers from better-than-expected pipeline and business developments.

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Ongoing Skepticism Toward Lundbeck Still Leaves An Opportunity