Major restructuring initiative announced and 2015 guidance revised

Valby, Denmark, 2015-08-19 07:46 CEST (GLOBE NEWSWIRE) -- HIGHLIGHTS

• Lundbeck is initiating a restructuring programme which will reduce the total cost base by approximately DKK 3 billion with full effect in 2017. Lundbeck will restructure headquarter functions and commercial operations in Europe and  other markets which are expected to lead to a reduction of around 1,000 employees (see separate release)
• In connection with the restructuring programme provisions and write-downs at the level of DKK 1.7 billion will be made in the third quarter 2015
• As part of the restructuring programme a reclassification of DKK 4.8 billion is included as research and development costs in the second quarter. The reclassification is a change in accounting estimate based on management’s reassessment of certain previously capitalized product rights
• In first half of 2015, core revenue reached DKK 7,192 million representing an increase of 2% reported (7% decline in local currencies). The performance was driven by the launch of new products, but also strong performance from Onfi^® and Xenazine^® which mitigated the effect of generic erosion
• Reported revenue from key products (Abilify Maintena, Brintellix^®, Northera^®, Onfi) grew 190% (143% in local currencies) to DKK 1,456 million in the first six months representing 20% of total revenue
• Reported US revenue increased 77% (46% in local currencies) and reached DKK 2,882 million, representing 40% of Lundbeck’s revenue
• International Markets, representing 30% of revenue, was stable at DKK 2,141 million (declined 8% in local currencies) as generic erosion of Cipralex^® was partly mitigated by growth of other products
• Revenue in Europe declined 35% to DKK 1,952 million following generic erosion on e.g. Cipralex
• Brintellix sales reached DKK 238 million, with non-US markets contributing DKK 70 million. Outside the US, Brintellix has now been launched in more than 25 countries and sales uptake is in line with expectations
• Onfi continues its solid performance growing 105% (reported) to DKK 793 million
• FDA has approved Rexulti™ (brexpiprazole) as adjunctive treatment for adults with major depressive disorder and as a treatment for adults with schizophrenia. Rexulti was launched early August 2015
• Financial guidance for 2015 is revised. Lundbeck now expects revenue of around DKK 14.0 billion and core EBIT of around DKK 0.5 billion. Reported EBIT is expected to be negative at around DKK 7.0 billion

In connection with the financial report, Lundbeck’s President and CEO, Kåre Schultz said:

“I am pleased with the sales growth of our new products but I am not satisfied with our profitability. Together with my leadership team, I believe the restructuring programme announced today is necessary and will make Lundbeck drive sustainable value creation for all our stakeholders. We are aware that these decisions will affect many employees and we will strive to support our people as we implement these changes.”

#) For definition of the measures “Core Revenue”, “Core EBIT” and “Core EPS”, see page 15, and reconciliation to reported figures, see page 22