Lundbeck is making a big push on the company’s capital reallocation initiative, handing over its operations in 27 markets to partners.
Lundbeck will transition to a partnership model in 27 markets through collaborations with the Swixx Group, Zuellig Pharma and NewBridge Pharmaceuticals, the Danish pharma said Tuesday.
“The partnership model will ensure continued access to Lundbeck’s medicines through trusted regional partners, while Lundbeck will discontinue its commercial organizations in the countries in scope,” the company said in a Sept. 9 release.
That means the 602 current Lundbeck employees working in those territories will have to leave the company. But Lundbeck said the majority of them are expected to have the opportunity to join those local partners, “who highly value their knowledge and experience.”
Lundbeck plans to finish the transition in all countries by Dec. 1. In addition, Lundbeck said it will consolidate the majority of its current partnerships into the three major collaborations moving forward.
“This step is essential to building the commercial infrastructure that will sustain our long-term strategy and deepen our commitment to serving patients,” Lundbeck CEO Charl van Zyl said in a statement. “By reducing complexity and shifting resources to the markets and brands with the greatest growth potential, we are focusing capital to accelerate progress on our strategic priorities—most notably our growing late-stage pipeline in neuro-rare and neuro-specialty diseases.”
Among the three partners, Swixx will handle the lion’s share of 21 countries, mostly in Eastern Europe and South America. These include Russia, Ukraine and Israel, which are mired in regional conflicts.
Zuellig is responsible for four South Asian countries: Indonesia, Malaysia, the Philippines and Singapore. NewBridge gets Saudi Arabia and the United Arab Emirates.
“The selected partners have strong regional expertise and infrastructure to continue to maintain and expand access to Lundbeck’s medicines for patients,” Lundbeck said.
Lundbeck will continue to book revenues for the markets but will deduct from its earnings based on in-market sales that are shared with the partners. The to-be-partnered markets accounted for 2.68 billion Danish kroner ($421 million), or 12%, of the company’s total revenue in 2024.
The restructuring is expected to cost Lundbeck 390 million Danish kroner, but the company expects no impact on its 2025 guidance nor its midterm targets.
At an investor event last year, van Zyl laid out an updated financial goal for Lundbeck to achieve a mid-single-digit compound annual revenue growth rate from 2023 to 2027, without counting any M&A moves. Excluding any business development activities, the company plans to reach an adjusted EBITDA margin of more than 30% by 2027.
“Lundbeck has conducted a rigorous analysis of how it currently deploys resources across markets, which showed that Lundbeck cannot optimally serve all patients in all markets itself without spreading its resources too thin,” the company said in its Sept. 9 release.
Lundbeck launched a capital reallocation project after van Zyl joined in 2023. Under the initiative, the company last year transferred U.S. rights to its depression drug Trintellix to partner Takeda. The saved costs are being channeled to the company’s growing brands, particularly the CGRP migraine drug Vyepti and the Otsuka-partnered antipsychotic Rexulti, as well as advancement of key R&D programs.
Following the partnership transition, Lundbeck will still have commercial teams in 22 countries.