Lundbeck’s new CEO Kåre Schultz completely restructures the company to regain profitability. About 1/6th of the company’s employees will have to leave for that reason.
In May, former president and COO of Novo Nordisk Kåre Schultz became the new president and CEO of Lundbeck. The Danish drugmaker was struggling at that time because the patent of its blockbuster Cipralex expired in the European and US market in 2012 and 2014, respectively. To transform Lundbeck into a profitable company again, Schulz introduced a major restructuring program.
A big step within the program is cutting about 1,000 of the approximately 6,000 employees. These cuts will especially affect the Danish headquarter and commercial set-ups in Europe, while the newly established Business Service Center in Krakow will be expanded.
The restructuring program is expected to reduce the total costs by about DKK 3 billion (€400M) in 2017. To cash in new money, Lundbeck intends to focus on its already approved psychosis drug Abilify Maintena, the depression therapy Brintellix, the epilepsy drug Onfi, and the Phase II multi-use drug Rexulti.
A look at the stock shows that investors seem to appreciate the rough cutting. Since yesterday, the share price increased from about 167DKK (€22) to 196DKK (26€). Time will tell if Lundbeck remains on the upgrade in the long run.