Reuters: Hot Stocks: UPDATE 1-Lundbeck shares tumble after profit warning

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UPDATE 1-Lundbeck shares tumble after profit warning Dec 19th 2012, 08:52 Wed Dec 19, 2012 3:52am EST * Cuts profit, revenue guidance for 2013/14 * Europe sales slow, pressure on pricing mounts * Faces increased generic competition * Shares drop 16.8 percent (Adds detail, background, quotes) COPENHAGEN, Dec 19 (Reuters) - Shares in Danish pharmaceuticals group Lundbeck tumbled 16 percent on Wednesday after it cut its financial outlook for next year and 2014 because of slowing European sales, pressure on pricing and generic competition. The company is working to find new drugs to replace lost sales from antidepressant Cipralex, sold as Lexapro in the United States and Japan, which is coming off patent. It said in a statement that it would increase investment in its late-stage pipeline and in product launches, but offered no further details. The cost of this, Chief Executive Ulf Wiinberg said, necessitated the downward revision of the company's guidance for 2013 and 2014. Lundbeck now expects 2014 revenue of about 14 billion Danish crowns ($2.5 billion) and operating profit between 0.5 billion crowns and 1 billion crowns. Two years ago Lundbeck provided its long-term financial floor guidance, in which revenue was expected to exceed 14 billion crowns a year and earnings before interest and tax (EBIT) was expected to exceed 2 billion crowns annually in the period 2012/14. The company's shares dropped 16.8 percent to 80.40 crowns per share at 0821 GMT, underperforming a 0.2 percent rise in the Copenhagen stock exchange's benchmark index. Next years' revenue is forecast in the range of 14.1 billion crowns and 14.7 billion crowns, but there was no change to the company's 2012 guidance. "In the short term, earnings are under pressure," Sydbank analyst Soren Hansen said. Lundbeck added that it expects a dividend payout ratio of about 35 percent of net profit in the 2012/14 period. ($1 = 5.6458 Danish crowns) (Reporting by Mette Fraende; Editing by Dan Lalor and David Goodman) Link this Share this Digg this Email Reprints

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