Lundbeck Really Needs Clinical Wins And Post-Pandemic Re-Acceleration

 

I called H. Lundbeck (OTCPK:HLUYY) (LUN.CO) (“Lundbeck”) a high-risk/high-reward proposition in my last update on the company, and since then it is the risks that have materialized. Although first quarter results weren’t bad, and revenue should improve in the second half of the year on post-pandemic normalization, the company didn’t get the big clinical win it needed with its Rexulti label extension efforts in Alzheimer’s-associated agitation.

I do believe that a resumption of more normal in-person sales calls and patient appointments will help the business, but 2021 looks like another tough year for sentiment unless the high-risk Rexulti study in borderline personality disorder delivers an unexpected win and/or Vyepti really picks up momentum. Expectations are low, and I do see some value here, but it will difficult for undervaluation to translate into stock outperformance without some sentiment-shifting good news.

 

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Lundbeck Really Needs Clinical Wins And Post-Pandemic Re-Acceleration