Citing migraine drug growth and pandemic, Lundbeck to cut 300 jobs and close India facility
The Danish biopharma Lundbeck has seen its fair share of R&D setbacks over the years but it’s taken pride in Vyepti, the CGRP migraine drug approved in February 2020. And according to Lundbeck execs, the drug is proving so successful it’s forcing layoffs in other parts of the company.
Lundbeck will terminate 300 employees across its divisions, CFO Anders Götzsche said in the company’s third quarter earnings call Thursday, and shut down its facility in India he said wasn’t profitable. Some of the cuts have already been made, Götzsche added, and the move is expected to save between roughly $15 million and $31 million.
The CFO also blamed the pandemic for the need to “fine-tune” Lundbeck’s R&D.
“It’s following more the global nature of the business, our global R&D organization, but also the fact that Vyepti is a global brand,” Götzsche said. “And therefore, we have adjusted some cost structures.”
Götzsche noted the main reason for the cutbacks is to invest in Vyepti’s growth and other R&D aspects. In conjunction with the layoffs, the biopharma plans on hiring about 100 to 200 new sales reps over the next several years as Lundbeck prepares to enter the European market.
Vyepti has proven it will likely fuel Lundbeck’s future revenue stream for at least the next few years, as the company reported its sales grew more than 43% from the second quarter to the third. And it comes at a time Lundbeck is facing competition in other areas, with the low blood pressure drug Northera seeing a generic enter the market in February.
Lundbeck noted it’s seen a “very aggressive erosion curve” for generic uptake, projecting Northera sales to fall 75% this year compared to 2020.
And even though Vyepti growth is climbing, there are many other CGRP migraine drugs already approved in both injectable and pill form, such as Amgen’s Aimovig, Eli Lilly’s Emgality and AbbVie’s Qulipta, approved in September.
Thursday’s announcement comes after a 2020 where Lundbeck saw several setbacks across its R&D operations. Despite the early Vyepti approval in February, the biopharma admitted defeat in March for a $1.1 billion Parkinson’s drug that Götzsche acquired while filling in as interim CEO, and chopped off another CNS drug in August after a mid-stage failure.
The new layoffs also come after Lundbeck revealed it would cut 160 jobs in June 2020 in the wake of the Parkinson’s flop and the company’s $2 billion acquisition of Alder in late 2019. That included 100 layoffs from Lundbeck’s home country of Denmark.