Lundbeck 9-month sales grow, but earnings down

Danish CNS specialist Lundbeck (LUND: CO) today released financial results, showing that revenue reached 13,397 million Danish kroner ($2.1 billion) in the first nine months of 2020, a growth of 6% (6% in local currencies) compared to 2019 with growth from all regions. Sales of the five strategic brands combined grew by 19% (19% in local currencies), reaching 7,948 million kroner, or 59% of total revenue.

Core earnings before interest and taxes (EBIT) reached 3,714 million kroner, down 7%, and corresponding to a core EBIT margin of 27.7%. Core earnings per share were 14.87 kroner, down 3%. Lundbeck’s shares fell 2.5% to 181.30 kroner by early afternoon.

Profitability was impacted by substantial investments in strategic brands which partly is mitigated by a lower activity level in the wake of the COVID-19 pandemic. The manufacturing of migraine prevention drug Vyepti (eptinezumab-jjmr) has shown to be more cost effective and thus production costs will be lower going forward. As a consequence, an inventory valuation adjustment of Vypeti has impacted the third quarter negatively by around DKK 200 million (non-cash).