On Thursday, Deutsche Bank updated its stance on H Lundbeck A/S (HLUNB:DC) (OTC: HLUYY) stock, raising the price target to DKK53.00 from DKK44.00, while maintaining a Buy rating. The adjustment follows Lundbeck's recent second-quarter results, which not only met but exceeded expectations, prompting a guidance upgrade and highlighting the absence of downside risks.
The pharmaceutical company's strong performance in the second quarter was anticipated by Deutsche Bank in its July 23, 2024, preview, where it predicted Lundbeck would continue to perform well. The bank's confidence in the stock was further bolstered by the successful commercial trajectories of Vyepti and Rexulti, which are expected to compensate for anticipated sales erosion from older brands later in the decade.
Deutsche Bank initially upgraded Lundbeck to a Buy rating in February 2024, when the stock was priced at DKK32.00 per share. This decision was based on the belief that Vyepti and Rexulti would effectively counterbalance declining sales from mature products. The latest data, including prescription projections for AADAD/Rexulti, suggest that the commercial story for Lundbeck is not only solid but potentially improving.
Additionally, the company's progress in the development of a treatment for PTSD, which was once considered a high-risk venture with low expectations, has now reached a stage of acceptance with a filing. This development led to Deutsche Bank's reiterated Buy rating on May 13, 2024. With a February PDUFA date set, there is potential for Lundbeck to achieve another surprise approval, akin to its success with AADAD.
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