Lundbeck’s new leader Schultz faces tough task

Instead of easing into the chief executive role at a buoyant Novo Nordisk, Kåre Schultz has taken on a more challenging role steering crosstown rival Lundbeck through some choppy waters.

Kåre Schultz: taking on a big challenge at Lundbeck

He takes over at central nervous system (CNS) therapy specialist Lundbeck as it continues to feel the effects of generic competition to products that have driven growth in recent years, and before a new generation of brands have started to show much traction.

Formerly chief operating officer at Novo Nordisk, Schultz had been widely expected to replace Lars Rebien Sørensen as chief executive until his role was effectively removed by a change in management structure at the company, and Sørensen decided to remain in his role until 2019.

With just days elapsing between the departure from Novo Nordisk and the announcement of the role at Lundbeck, it seems certain that the move has been planned for some time. However, the news seemed to take Lundbeck investors by surprise, and prompted a 15% increase the company’s share price yesterday.

Shareholders will no doubt be relieved to have an experienced pharma figure at the helm of Lundbeck after months without a CEO following the departure of former incumbent Ulf Wiinberg last year, who resigned after breaching the company’s code of conduct on investments.

The company’s Swedish chairman Håkan Björklund said that Schultz has developed “exactly the right skills to face the challenges that Lundbeck faces” during his 25-year tenure at Novo Nordisk.

Michael Friis Jorgensen, an analyst at Alm. Brand Markets, told financial daily Børsen that while Schultz’ primary challenge will be to bring Lundbeck’s strong pipeline, he is interested to hear about future strategic plans for the company after he takes office on 20 May, and particularly whether that might include a streamlining of the group to reduce its cost base.

Sales of Lundbeck’s big-selling antidepressant Cipralex (escitalopram) are now in steep decline as a result of generic competition, and Lundbeck needs to make the most of recently-launched products such as antipsychotic depot Abilify Maintena (aripiprazole), Selincro (nalmefene) for alcohol dependency and new-generation depression therapy Brintellix (vortioxetine).

Jorgensen highlighted two pipeline candidates – brexpiprazole for schizophrenia and major depression and idalopirdine for improving cognition in Alzheimer’s disease – as having the potential to reinvigorate Lundbeck in the coming years.

Partnered with Otsuka, brexpiprazole has already been filed for approval in the US and could get an FDA verdict in July, and is in late-stage clinical development in Europe. Idalopirdine meanwhile is in phase III testing, and could be the first in a new class of 5-HT6 receptor antagonists for Alzheimer’s, used in combination with existing therapies such as cholinesterase inhibitors.

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