HLUYY - Lundbeck Will Benefit From Post-Pandemic Normalization But The Rexulti Agitation Study Is Key To Outperformance
- Lundbeck has posted some lackluster recent quarters, with the pandemic weighing heavily on results for a company where face-to-face doctor visits are important.
- The upcoming interim analysis of a Phase III study of Rexulti in Alzheimer's agitation is a key for the company, potentially adding over $1B in addressable revenue over five years.
- 2021 is likely the trough for Lundbeck, with Northera going off-patent there are no major expiries for several years and at least a few growth drivers.
- M&A remains a key variable. Management has the capital to do deals, and I think the outcome of the Rexulti agitation study will influence near-term M&A decisions.
- Lundbeck shares look undervalued and offer a high single-digit long-term annualized return, with further bull-case upside, but the risk here is larger than for your typical pharma stock.
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Lundbeck Will Benefit From Post-Pandemic Normalization, But The Rexulti Agitation Study Is Key To Outperformance