H. Lundbeck A/S (LUN), the second-biggest Nordic drug company, rose to its highest price in nine months in Copenhagen on speculation its new treatment for depression will succeed in replacing Lexapro.
Lundbeck rose 5.5 percent, making it today’s best performer in the benchmark Copenhagen 20 Index. (KFX) The stock advanced 6.5 kroner to close at 123.90 kroner, its highest since Aug 17.
“The discussion moves from ‘if’ to ‘how big’,” on the revenue potential for Lundbeck’s experimental LU AA21004 medicine, Deutsche Bank AG said today in a note to clients, raising its recommendation on the shares to buy from hold.
The Copenhagen-based company said May 14 the drug showed statistically significant results in eight of 10 late-stage studies that will support regulatory filings in the U.S. and Europe this year. The new medicine could help Lundbeck replace lost revenue from its best-selling Lexapro antidepressant, which went off-patent in the U.S. in March, Deutsche Bank said.
“Investors had little hope from new antidepressant Lu AA21004, but its clinical success now hints at significant long- term growth and security,” Deutsche Bank said. “That’s clearly still not represented in the share price.
The drug addresses “a huge unmet need” as more than 40 percent of patients stop taking available medications because of side effects or because they don’t feel much better, Chief Executive Officer Ulf Wiinberg said in an interview in London last week. Lundbeck, which focuses on illnesses related to the central nervous system, has several other drugs in late-stage clinical trials, including treatments for psychosis, schizophrenia and stroke.
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