HALISTER1: Lundbeck Gains on Outlook, Focus Now Moves on Rexulti: Jefferies

Lundbeck Gains on Outlook, Focus Now Moves on Rexulti: Jefferies

(Bloomberg) -- Lundbeck shares rose as much as 4.4%, most in 6 months, according to Bloomberg data, after co. raised its outlook for 2017.
  • Shares trade at DKK331.9, up 1.9%, as of 10:04am CET
    • Trading volume 93% of 3-month daily avg
  • Cipralex sales drove 1Q revenue above Jefferies est.; 2017 targets are hiked, but mostly on limited Sabril generic erosion to-date, with cons. already within new ranges, Jefferies analysts Peter Welford and Lucy Codrington write in client note
    • Initial outlook assumed further generic erosion of US Xenazine and launch of U.S. Sabril generics, potentially a “worst” case
  • Focus now is assessing future of Rexulti after mixed success in two Rexulti Phase III in Alzheimer’s Disease, with only one study meeting primary endpoint
  • While typically regulatory authorities require 2 positive studies to support approval, equivocal study outcomes are common in Central Nervous System indications
  • No drugs are U.S.-approved to treat agitation associated with dementia, despite the widespread use of antipsychotics
    • As numerous initiatives are ongoing to decrease off- label use of antipsychotics in nursing homes, Rexulti comparatively clean safety profile could potentially allay class-wide concerns

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
LUN DC (H Lundbeck A/S)

People
Lucy Codrington (Jefferies International Ltd)
Peter Welford (Jefferies LLC)

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