Lundbeck Plans to Establish A More Flexible Commercial Organisation in Europe
•Lundbeck proposes to restructure its commercial
organisation in Europe to build a more flexible commercial
infrastructure and to maintain cost control
•The initiative aims at paving the way for a successful and profitable transition of Lundbeck's product portfolio in Europe
•This initiative is expected to involve the reduction of around 600 positions in our subsidiaries primarily in Europe
•Guidance for 2012 EBITDA and EBIT is maintained before restructuring costs. The level of these non-recurring items are uncertain but could amount to up to DKK 500 million
H. Lundbeck A/S (Lundbeck) today announced plans to restructure its commercial organisation in Europe. The aim is partly to establish a more flexible commercial infrastructure with respect to detailing to general practitioners ahead of multiple future product launches and partly to maintain cost control. The plan is to uphold Lundbeck's position as a leading CNS specialist and secure successful launches of new products.
The proposed restructuring is intended to pave the way for a successful transition of Lundbeck's European product portfolio with several potential product launches in the coming years. Furthermore, the initiative aims to mitigate increased pressure from healthcare reforms, generic competition and uncertainty regarding pricing and reimbursement in Europe.
"The market environment in Europe is changing rapidly at a time when Lundbeck has numerous new products to launch. To ensure a successful transition of our product portfolio in Europe we need a more flexible commercial infrastructure and to maintain cost control," says Ulf Wiinberg, President and CEO of Lundbeck.
Lundbeck continues to invest in growth markets
This project is expected to involve the reduction of around 600 positions in our subsidiaries primarily in Europe. Lundbeck will continue with the current plans for investments in markets of growth comprising the US and International Markets.
Lundbeck cares for employees who may be laid off. We will do our utmost to manage the process in a respectful way and will now initiate a consultation process regarding the anticipated staff reductions with the works councils in the most affected markets.
Lundbeck has informed the company's European Works Council about the restructuring plans.
The content of this release is expected to have some influence on the Lundbeck Group's financial guidance for 2012 EBITDA and EBIT which was provided on 8 February 2012 in connection with the release of the financial results for 2011.
Lundbeck still expects to deliver an EBITDA of DKK 3.0-3.5 billion and an EBIT of DKK 2.0-2.5 billion in 2012 before costs connected to the restructuring plans. The level of these restructuring costs are currently estimated to amount to a non-recurring amount of up to DKK 500 million for 2012, but the exact amount will be dependent on the implementation and the execution of the plan as well as negotiations with various local stakeholders.
Palle Holm Olesen Mads Kronborg
Chief Specialist, Head of Investor Relations Media Relations Manager
+45 36 43 24 26 +45 36 43 28 51
Magnus Thorstholm Jensen Simon Mehl Augustesen
Investor Relations Officer International Media Specialist
+45 36 43 38 16 +45 36 43 49 80
H. Lundbeck A/S (LUN.CO, LUN DC, HLUYY) is an international pharmaceutical company highly committed to improving the quality of life for people suffering from brain disorders. For this purpose, Lundbeck is engaged in the research, development, production, marketing and sale of pharmaceuticals across the world. The company's products are targeted at disorders such as depression and anxiety, psychotic disorders, epilepsy and Huntington's, Alzheimer's and Parkinson's diseases.
Lundbeck was founded in 1915 by Hans Lundbeck in Copenhagen, Denmark. Today Lundbeck employs approximately 6,000 people worldwide. Lundbeck is one of the world's leading pharmaceutical companies working with brain disorders. In 2011, the company's revenue was DKK 16.0 billion (approximately EUR 2.1 billion or USD 3.0 billion). For more information, please visit www.lundbeck.com.
Safe Harbor/Forward-Looking Statements
The above information contains forward-looking statements that provide our expectations or forecasts of future events such as new product introductions, product approvals and financial performance.
Such forward-looking statements are subject to risks, uncertainties and inaccurate assumptions. This may cause actual results to differ materially from expectations and it may cause any or all of our forward-looking statements here or in other publications to be wrong. Factors that may affect future results include interest rate and currency exchange rate fluctuations, delay or failure of development projects, production problems, unexpected contract breaches or terminations, government-mandated or market-driven price decreases for Lundbeck's products, introduction of competing products, Lundbeck's ability to successfully market both new and existing products, exposure to product liability and other lawsuits, changes in reimbursement rules and governmental laws and related interpretation thereof, and unexpected growth in costs and expenses.
Certain assumptions made by Lundbeck are required by Danish Securities Law for full disclosure of material corporate information. Some assumptions, including assumptions relating to sales associated with product that is prescribed for unapproved uses, are made taking into account past performances of other similar drugs for similar disease states or past performance of the same drug in other regions where the product is currently marketed. It is important to note that although physicians may, as part of their freedom to practice medicine in the US, prescribe approved drugs for any use they deem appropriate, including unapproved uses, at Lundbeck, promotion of unapproved uses is strictly prohibited.
Posted: June 2012