February 5, 2019 / 12:06 PM / 4 months ago

UPDATE 1-Danish drugmaker Lundbeck lowers dividend range to fuel growth

* Lowers dividend range to 30-60 percent of net profit

* Looking for acquisitions and partnerships

* Posts quarterly operating profit below analyst expectations (Adds detail, background, more quotes and share price)

By Jacob Gronholt-Pedersen

COPENHAGEN, Feb 5 (Reuters) - Drugmaker Lundbeck will lower dividends as it seeks to increase investment to counter declining sales of older drugs, it said on Tuesday, sending its shares down 3.6 percent.

Lundbeck, which specialises in neurological and psychological diseases such as depression and Alzheimer’s, is under pressure from generic competition as patents of existing drugs expire.

The Danish company said it would pay 30-60 percent of net profit in dividends instead of 60-80 percent, aiming to boost its financial muscle for acquisitions and new partnerships to return to growth.

“We’re not pressed to do the first thing that comes along. We have a sense of urgency but not a sense of panic,” Chief Executive Deborah Dunsire told Reuters.

Dunsire took over as chief executive in September last year after former CEO Kaare Schultz was poached by Teva in 2017.

Lundbeck’s share price had more than tripled under Schultz, whose cust-cutting programme restored profitability at the company.

However, the share price has tumbled by 40 percent since August after Lundbeck revised its full-year profit outlook and then announced an unsuccessful phase III clinical trial of a drug for treatment-resistant schizophrenia.

The stock was trading 3.6 percent down at 1121 GMT on Tuesday.

The focus on brain disorders has increased with big pharmaceutical companies potentially coming back into the field, Dunsire said.

Driving the market is a rise in cases of post-traumatic stress disorder, anxiety disorders and depression, as well as neurological diseases such as Alzheimer’s among ageing populations.

Lundbeck expects sales of epilepsy disorder drug Onfi, its biggest brand, to slide further after the patent expired in October last year.

To revive growth the company will look to buy drugs in phase 3 clinical trial or products that are ready for the market.

“Those are not thick on the ground and they’re expensive,” said Dunsire.

“But we don’t feel we’re standing on a burning platform,” she added, referring to the strong profitability of its existing products.

The company said it expects 2019 revenue between 16.1 billion Danish crowns ($2.47 billion) and 16.7 billion crowns, down from 18.1 billion crowns last year.

Fourth-quarter sales stood at 4.2 billion crowns, down 4 percent year on year but above the 4.09 billion expected by analysts in a poll. Operating profit came in at 848 million crowns, against analyst expectations of 889 million crowns. ($1 = 6.5308 Danish crowns) (Reporting by Jacob Gronholt-Pedersen Editing by Louise Heavens and David Goodman)

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