Lundbeck Finds Its Next CEO, But Finding The Next Spark Could Be Harder

The performance of Danish drugmaker H. Lundbeck A/S (OTCPK:HLUYY) (LUN.CO) since former CEO Kåre Schultz left for Teva (TEVA) would perhaps argue against the idea that drug companies need dynamic CEOs in place to do well – the shares are up about 20% from the time of Schultz’s departure with no replacement in place until now. To be fair, Lundbeck has been coasting on the tailwinds established by Schultz, as the company has been delivering surprisingly strong margin performances with its new streamlined cost structure.

Now Lundbeck has filled the role of CEO, hiring Deborah Dunsire for her first major CEO role since leading Millennium into and through its merger with Takeda Pharmaceutical (OTCPK:TKPYY). I do have some concerns about this hire, and I don’t think the company has managed to catch lightning in a bottle a second time as it did with the hiring of Schultz (an opportunity that was created by a change in the succession planning at Novo Nordisk (NVO)). Moreover, with the shares having performed well, I worry that this could be a “sell the news” excuse for institutions to take profits, sapping the momentum in the shares.

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Lundbeck Finds Its Next CEO, But Finding The Next Spark Could Be Harder