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Although Undervalued, Lundbeck Likely Stuck Until New Drugs Start Ramping

H. Lundbeck A/S (OTCPK:HLUYY) (or "Lundbeck") is running out of time to convince investors that its new drug launches will meaningfully offset sales erosion due to patent expirations and competitive product category launches. I continue to believe that the potential is here for Lundbeck to be a much more interesting company (and a better-performing stock), but absent better execution that potential is all but worthless.

This will likely be a year defined by how well management addresses the challenges with Brintellix, Abilify Maintena and Northera. The data are there to support differentiation and sizable sales potential, but FDA cooperation and sales execution is critical. The company's choice of new CEO will also be telling and represents another opportunity to demonstrate an attractive long-term vision for the company. While I believe the shares are more than 20% below fair value today, a better sales trajectory is the real driver for these… Read More …