The Danish pharmaceutical company Lundbeck has entered into the largest cooperation agreement in the company’s history. Together with Japanese Otsuka Pharmaceutical Lundbeck will develop psychiatric medicines, the company wrote in a stock exchange announcement today.
“We are very pleased to have entered into this collaboration with Otsuska,” said President and CEO Ulf Wiinberg at Lundbeck.
“It is fully in line with our strategy to expand our business and reduce our risks through partnerships and our goal to create long-term growth,” Wiinberg wrote in a press release.
He also notes that this agreement is the largest ever made by Lundbeck:
“It has great perspectives to us and will improve our possibilities to develop and improve treatment for patients with brain disorders,” Ulf Wiinberg said.
He estimates that the potential of the agreement is total accumulated revenue of over DKK 50 billion.
To begin with Lundbeck will pay the Japanese company about DKK 1.1 billion.
Otsuka will receive about USD 1.4 billion (approx.. DKK 7.6 billion) from Lundbeck in upfront payment and development and regulatory milestone payments, Lundbeck wrote. Including sales milestones, Lundbeck will pay up to approx. USD 1.8 billion, approx. DKK 9.7 billion, to Otsuka.
The agreement significantly enhances Lundbeck’s long-term growth prospects, the company wrote, but noted that increased costs in connection with the alliance is likely to put pressure on earnings in the period 2012-14, however Lundbeck’s long-term floor guidance is maintained.
The agreement does not affect Lundbeck’s expectations for the current financial year.