A lot of things are going right for Lundbeck (OTCPK:HLUYY) (LUN.CO) these days. Kare Schultz has made a definite positive impact on the company's cost structure, but without compromising the launches of several important new drugs. Lundbeck has also been the recipient of what I'd call good luck, as a couple of large off-patent franchises aren't declining quite as rapidly as expected.
For now, my concerns on Lundbeck remain basically the same. The pipeline is very, very thin (and two of the drugs are high-risk Alzheimer's candidates) and I continue to wonder and worry whether Lundbeck has boxed itself in a little too tightly with its R&D focus. I also continue to believe that Brintellix/Trintellix will disappoint unless and until the company can coax the FDA into approving a differentiated label.
All of that said, I'm a content holder at these levels. I believe Lundbeck can generate over 6% revenue growth over the next 10 years and there is upside potential from the Alzheimer's pipeline. I likewise believe that this can/will be a very profitable business in a few years' time, supporting a cash flow-based fair value of close to $43/ADR.
Lundbeck Continues Its Beat-And-Raise Trend