Lundbeck, a Denmark-based global pharmaceutical company, has announced a new restructuring program in order to improve profitability and improve the company’s value creation.
In the past few years, Lundbeck has gone through major restructurings of its European commercial infrastructure. The company, however, believes it is necessary to further adjust the commercial setup, primarily in Europe. Lundbeck intends to focus on products including Abilify Maintena, Brintellix, Northera, Onfi and Rexulti. Furthermore, Lundbeck plans to capture savings through restructuring of all headquarters functions, further minimize G&A functions at affiliates and expand the newly established Business Service Center in Krakow in Poland. In R&D, a number of cost-reduction initiatives have been identified including closure of selected early-stage projects.
Lundbeck expects that the restructuring program will affect about 1,000 employees.
Lundbeck expects to recognize provisions for some $164 million for severance payments and restructuring costs. In the third quarter, Lundbeck expects to recognize about $89.7 million in impairment loss due to changed management estimates of certain intangible rights and fixed assets.
It is expected that the program will reduce the total cost base by about $448.7 million in 2017.