Company History: 1990-2003

Lundbeck's transformation into the dynamic company it is today, picked up steam when former CEO Erik Sprunk-Jansen joined in 1987. Sprunk-Jansen had been the successful managing director of Greenex A/S, which operated mines in Maarmarilik, Uummannaq in Western Greenland, until ore deposits ran dry and the company was sold in 1987. He proved himself to be a natural leader in Greenland, briefing the country's parliament once a year about Greenex, which represented half of Greenland's gross national product.

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Erik Sprunk-Jansen, joined Lundbeck from 1987 to 2003

When he joined Lundbeck, Sprunk-Jansen soon learned that the company did not effectively market its new products, which led to internal management strife and even worse, depleted profits. The 1987 budget yielded a surplus of only 16 million Danish Kroner, and the profit after taxes was just two million. No newly developed drugs had been launched since 1966. The directors on the management board in charge of production and research squabbled on a daily basis, and neither wanted anything to do with marketing because they believed that "Lundbeck's products sell themselves".

 

Sprunk-Jansen immediately patched up the relationship between the directors and emphasized the importance of marketing. He also fired more than 100 employees in the first year, including the general managers of several overseas subsidiaries the Lundbeck product range was much, much too wide.

Sprunk-Jansen felt he was managing a general store; cow-teat salves were a major product and house slippers were sold as late as the 1970s. Sprunk-Jansen refocussed Lundbeck as a specialist in pharmaceuticals for treatment of diseases of the Central Nervous System and throughout the early 1990s, the organization's structure, research, and composition was changed consistently and without compromise.

 

The best card in Lundbeck's hand was the psycho-pharmacological research started by the chemist Povl V. Petersen back in the 1940s. As head of research, he laid the foundations for the preparations for treating illnesses of the central nervous system, a field which is now the company s speciality.

Expectations soared for one particular product, Cipramil®. It was developed in the 1980s from Lundbeck s own research into depression, a widespread mental illness that can, in severe cases, turn people into permanent invalids. Cipramil® is effective and easy to take. Equally important, it has no known side-effects even when taken in conjunction with other medicines. Cipramil® was introduced in Denmark in 1989, and has since been registered in 70 countries around the world. During the 1990s, Cipramil® grew to become Lundbeck s dominant product, representing over 78% of the company s total turnover in 1999.

 

Development throughout the 1990s took great leaps and yielded yearly growth rates that could be matched by only a few other Danish companies. Twenty-one new subsidiaries were created, and marketing activities increased dramatically. Turnover rose from 1.8 billion kroner in 1995 to 4.2 billion in 1999, as research and development costs increased from 257 million to 824 million in that same period. By 2000, turnover had skyrocketed to 1.3 billion in the first quarter alone.

 

Hans Lundbeck's child grew up when its shares were listed on the Copenhagen Stock Exchange (KFX) in June 1999. Though the company didn't lack money at the time, the listing would now give Lundbeck access to new capital in case it wanted to buy up more subsidiaries, of which there were 30 in 2000. And the company became more visible, placing more responsibility on the management but providing a new method of rewarding employees with shares.

 

Lundbeck has successfully overcome the many obstacles it faces in a tight European market. Moreover, in the space of only a few short years, the United States has already become the company's largest national market thanks to the American generics company, Forest Laboratories, introduced Cipramil® under the name Celexa® in September 1998. Forest Laboratories does not engage in research itself, focussing instead on the development and sales of other companies products within the U.S.

 

1 November 2003 Claus Bræstrup replaced Lundbeck's President and CEO, Erik Sprunk-Jansen, who wished to step down after 17 successful years of running the company.

Flemming Lindeløv, Chairman of Lundbeck's Supervisory Board had the following words to say about the new leadership of Lundbeck:

"With Claus Bræstrup at the helm, Lundbeck will have a very experienced, internationally orientated and highly respected CEO, who is widely acknowledged for his contributions to drug research and for running and managing pharmaceutical companies. The next few years will involve both challenges and opportunities for Lundbeck, and everyone on the Supervisory Board is confident that Bræstrup is the right man for the job,"

Describing Erik Sprunk-Jansen's importance to Lundbeck's commercial success, Lindeløv said:

"Under Sprunk-Jansen's management, Lundbeck developed into an international pharmaceutical company with subsidiaries in more than 50 countries, generating revenues of nearly DKK 10 billion in 2002. Sprunk-Jansen's dominant achievement has been to develop and maintain the company's focused CNS strategy. This focus has positioned Lundbeck as the leading player in the antidepressant market. We are very grateful to him for his impressive efforts.

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