Lundbeck is expected to increase its focus on acquisitions in the coming years to strengthen the late-stage pipeline ahead of the patent expiry of Rexulti in 2029.

This writes analyst Rune Majlund Dahl from the financial institution DNB in a note in the wake of the pharmaceutical company’s research and development day in London on Thursday.

”At Lundbeck’s R&D event in London, the focus was on pipeline progression and its R&D commitment. Lundbeck believes that two of the six pipeline candidates discussed could reach the market in 2029,” writes the DNB analyst.

Lundbeck is expected to hit a patent cliff in 2029, when Rexulti goes off patent in the US, which is expected to lead to a drop in sales from 2028 of DKK 3.9 billion, according to DNB.

Rexulti is used to treat schizophrenia and depression, but has also been approved for the treatment of agitation - outbursts of anger - in Alzheimer’s patients in the US.

DNB believes management is looking for smaller potential acquisitions in niche indications, with possible peak sales of €500 million or higher.

”To facilitate timely product launches, we expect at least one acquisition to be completed in 2024,” says Rune Majlund Dahl, who believes that optimal candidates should have completed a Phase II trial or be early in Phase III.

DNB reiterates the positive recommendation ”buy” and the price target of DKK 44.

Lundbeck shares closed Thursday with a plus of 0.3% at DKK 32.70.