How Lundbeck turned ambition into acquisition: Lessons from a pharma treasury leader

Danish companies have quietly become some of Europe’s most prolific acquirers. In 2024, they led Nordic M&A activity in absolute terms – and arguably on a per capita basis too. While names like Novo Nordisk, Genmab, Carlsberg and DSV all feature, the pharmaceutical sector stands out. For Denmark, pharma has become something of what the Magnificent Seven tech companies are for the US.

Lundbeck is a case in point. The brain health company has pursued a disciplined and ambitious growth strategy, culminating in the landmark acquisition of Longboard Pharmaceuticals in 2024.

Why Danish pharma is buying

Several structural factors have converged to make Danish pharma companies natural acquirers. Strong balance sheets, low leverage levels and robust cash generation have created financial firepower. Strategy demands more than organic growth alone. In an industry where patent cliffs and loss of exclusivity are constant factors, M&A and partnerships have become essential tools for protecting and reshaping pipelines.

Lundbeck's ownership structure adds another dimension. With the Lundbeck Foundation holding close to 70% of the company, there is a long-term, strategically engaged shareholder backstopping major decisions. 

"Having a strong shareholder with a long-term perspective is really supportive in this kind of transformation," says Peter Kreutzfeldt, Head of Group Treasury and Insurance at Lundbeck.

Building a funding platform for scale

A decade ago, Lundbeck's treasury function was less mature, relying on bilateral bank deals. The company’s journey since then mirrors a pattern seen across ambitious corporates: from bilateral arrangements to club deals, then syndicated facilities and ultimately bond market access supported by a credit rating, according to Immelborn. The pivotal shift came around 2019-2020, when Lundbeck obtained an investment grade rating, established an EMTN (euro medium-term note) programme and issued its first bond. 

"We moved from trying to cater our funding platform for where we are now, to asking how we can best support the strategy and the growth journey," says Kreutzfeldt.

More recently, Lundbeck has embraced bridge financing as a tool for deal execution, a structure that places significant reliance on relationship banks.

Certainty of funds as a competitive advantage

In competitive M&A processes, demonstrating financing certainty is itself a differentiator. "It's about sending a clear signal that financing is not going to be the reason this transaction fails," says Kreutzfeldt. By including bank underwriting in its toolbox, Lundbeck has added a strong option for removing financing risk from the equation.

With strong balance sheets, a clear strategic rationale and a maturing funding infrastructure, the conditions for continued M&A activity across Danish pharma remain firmly in place – and Lundbeck has built the platform to act when the right opportunity arises.