Annual Report 2023
Management review
In Brief Performance Partner to Society Governance Consolidated financial statements Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 2
In Brief
Our business model 3
At a glance 4
Letter from the Chair and the CEO 5
Delivering on our strategy towards 2030 7
Financial highlights 10
Five-year summary 11
Performance
Financial performance 12
Lundbeckfonden Strategic Ownerships 15
Lundbeckfonden Invest 23
Lundbeckfonden BioCapital 25
Partner to Society
Grants & Prizes 28
Active public voice 31
Governance
Risk management 33
Sustainability 36
Governance 40
Grant policy 43
Board of Directors 45
Management 48
Financial statements Lundbeckfonden Group 51
Financial statements of the Parent Foundation 123
Management statement 132
Independent Auditor’s Report 133
Other reports
Sustainability Report
Our 2023 Sustainability Report
provides detailed information
on our sustainability efforts and
responsible business behaviour.
Read the report
Contents
Management Review
Financial statements
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Our 2030 strategy
Bringing
discoveries
to lives
The common thread for our
commercial and philanthropic
endeavours.
Click to read highlights from our strategy
Management review
In Brief Performance Partner to Society Governance Consolidated financial statements Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 3
Our business model
Strategic Ownerships
The Lundbeck
Foundation is a long-term owner of multiple
healthcare companies headquartered in Denmark. Our ambition is
to position and maintain the companies as international market
leaders within their industry segment. Business ownerships is a
key element of the Fou
ndation's financial and societal value
creation and of building the route to market for new treatments
and therapies for patients all over the world.
Asset Management
Financial investments is the engine that ensures long
-term
financial stability and allows the Foundation to invest in the
future of healthcare and support new scientific research. The
Foundation's biotech investments contribute to the financial
value creation while also developing people and businesses in the
Danish life science ecosystem.
Partner to Society
The Foundation channels profits back to society through
grants and partnerships, which are anchored in the
Foundation’s purpose of 'Bringing discoveries to lives'. Our
strategic ambition is to improve the world's understanding of
the brain and create better treatments of brain disorders while
also developing the Danish life science ecosystem through
advancing and enhancing the conditions for science,
innovation and economic growth in Denmark.
Partner to Society
•
Supporting public research and science
through grants and activities to bring
forward new discoveries
•
Disseminating knowledge through
programmes and activities
•
Strengthening a vibrant Danish ecosystem
for life science, research, innovation, and
economic growth
Management review
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Lundbeck Foundation Annual Report 2023 Page 4
We live our purpose every day through engaged
ownership of our strategic ownerships and biotech
portfolio companies, all of which strive to improve
patients’ and customers’ lives. Our investment
activities enable us to continuously award significant
independent research grants to advance Danish-based
biomedical research with a specific focus on
neuroscience. Established in 1954, the Lundbeck
Foundation is one of Denmark’s largest enterprise
foundations, with a net wealth at the end of 2023
of DKK 59bn.
The purpose of the Lundbeck
Foundation is to create
powerful ripple effects that
bring discoveries to lives
through investing actively in
business and science at the
frontiers of their fields
At a lance
Revenue
DKK
36,659
m
of which
in DKKm
Lundbeck 19,912
ALK 4,824
Falck 11,913
The increase in revenue was
primarily attributable to
Lundbeck (1,666m) and ALK
(313m).
Operating
profit
DKK 3,790m
of which
in DKKm
Lundbeck 3,195
ALK 666
Falck 388
The increase in operating profit
was primarily
attributable to
Lundbeck (343m) and ALK (196m).
Net profit
DKK
6,273m
of which
in DKKm
Lundbeck 2,290
ALK 486
Falck 334
Foundation 3,163
Overall profit for the Group was
DKK 6,273m (2022: DKK 1,211m).
The Foundation’s share of
Group
profit was DKK 5,159m
(2022: DKK
-126m).
Net wealth
DKK
58,807m
of which
in DKKm
Strategic
Ownership
34,589
Invest 23,000
BioCapital 2,886
Net wealth was significantly
affected by the increase in
Lundbeck’s share price and the
profit in
Invest.
+3%
+11%
+418%
+14%
Grants and Prizes
592DKKm
grants awarded in 2023
BioCapital
772DKKm
in net return for the year. Total market value at
31 December 2023 amounted to DKK 2,886m
Invest
2,832DKKm
generated return in 2023 primarily driven
by listed equities. Total market value at
31 December 2023 amounted to DKK 23bn
Strategic Ownership
34%
stake was acquired in Ellab in late 2023
Management review
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Lundbeck Foundation Annual Report 2023 Page 5
In line with expectations, the Group generated an
operating profit of DKK 3,790m, while the Foundation’s
investment activities delivered satisfactory returns for
the year. The profit for the year thus amounted to
DKK 6,273m, significantly higher than last year’s profit
of DKK 1,211m.
As an enterprise foundation, we pursue commercial and
philanthropic objectives with a long-term perspective
and an ambition of creating financial and societal
value. We circulate profits back to society through
investments in science, talents and innovation, and
we use our public voice to strengthen the Danish life
science ecosystem.
Our strategic ownerships continued their respective
journeys to become international leaders within their
respective segments and we welcomed two new CEOs
to the Group: Charl van Zyl took over the CEO position
in H. Lundbeck from Deborah Dunsire in September and
in ALK, Peter Halling took over as CEO from Carsten
Hellmann in November.
H. Lundbeck delivered solid financial results with a
robust sales growth and an increased profit margin. We
see considerable momentum for Lundbeck as its
strategic brands show strong performance and its R&D
pipeline continues to evolve and mature.
2023 was also a strong year for ALK, which delivered
solid sales growth and further improved its operating
profit. We see continued good performance ahead
enabled by a strong operational platform as well as a
promising R&D portfolio that targets several global
market opportunities.
Falck delivered solid growth and profit in very
challenging markets while continuing its development
towards becoming an integrated healthcare provider.
This journey is supported by the initiation of a
significant investment programme in digitalisation and
other strategic initiatives.
Ferrosan Medical Devices delivered as expected while
continuing its market expansion, supply chain renewal
and product innovation activities.
In late 2023, we acquired a 34% stake in Ellab, an
international medtech company which offers high-end
validation and monitoring solutions to life science
customers.
2023 saw challenging financial markets with continued
geopolitical instability and fears of a recession. Despite
these challenges, the Foundation’s financial investment
portfolio, Invest, delivered strong returns primarily
driven by listed equities.
Letter from the Chair and the CEO
The Foundation delivered strong results across all areas and continued
to execute
its 2030 strategy ‘Bringing discoveries to lives’.
Lene Skole, CEO and Steffen Kragh, Chair
Management review
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Lundbeck Foundation Annual Report 2023 Page 6
In continued subdued biotech markets, Lundbeckfonden
BioCapital, which focuses on investments in the Danish
biotech sector, invested in two new biotech companies,
Notify Therapeutics and Dania Therapeutics. Moreover,
two companies in the portfolio, Vesper Bio and Cytoki
Pharma, transitioned from preclinical to clinical stage.
2023 marked yet another important year for our
philanthropic and societal impact priorities, and we
continued and progressed our quest of driving
innovation and bringing new scientific discoveries to the
lives of patients and their families.
Our grants amounted to DKK 592m, which was above
our stated annual commitment of DKK 500m. We took
steps towards our strategic aspiration of enhancing
the neuroscience community in Denmark, and several
grants were awarded in the area of psychiatry, with the
aim of building a strong clinical community for
psychiatry in Denmark.
In 2023, the Foundation also continued its support to
outstanding scientific talents in biomedical research,
with a particularly strong commitment to talents in
basic and clinical neuroscience. We used a wide range of
grants and funding types to support scientists and
researchers at different career levels and from different
research fields.
2023 was also a year of working with our many partners
and stakeholders - universities, public authorities,
patient organisations, businesses, investors and other
foundations - who share our commitment of building
the local life science eco-system in Denmark. Our range
of activities included thematic roundtable, conferences
and public events, reflecting topics related to
innovation, entrepreneurship, talent development and
diversity.
As always, the Brain Prize was a highlight of the year
and awarded to three international scientists for their
outstanding scientific contributions to neuroscience.
Professors Michael Greenberg (US), Christine Holt (UK)
and Erin Schuman (Germany) received the prize for their
discoveries of how the synthesis of new proteins is
triggered in different parts of the neuron, thereby
guiding brain development and plasticity in ways that
impact our behaviour for a lifetime.
The celebration of the three winners took place in
Copenhagen and the subsequent scientific outreach
activities included multiple international webinars,
plenary lectures and educational films, which were
delivered to the global scientific community
throughout 2023.
Our purpose and our strategy, ‘Bringing discoveries to
lives’, is the common thread for our commercial and
philanthropic endeavours, which are focused on
advancing healthcare and neuroscience in Denmark and
elsewhere.
We have high aspirations for the future of healthcare
and neuroscience and engage with our stakeholders and
partners to develop and nurture the scientific
community and business sector in Denmark.
As an enterprise foundation in Denmark, we share a
responsibility for the future and we believe that our
business model with a strong link between commercial
and philanthropic activities has a special place to create
economic and societal value for Denmark.
We want to take this opportunity to thank the
Lundbeck Foundation employees for their ongoing
commitment to our value creation and our many
partners for their strong and constructive collaboration.
Steffen Kragh,
Chair of the Board
Lene Skole,
CEO
Our grants amounted to
DKK 592m, which was above
our stated annual
commitment of DKK 500m.
Management review
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Lundbeck Foundation Annual Report 2023 Page 7
Deliverin on our stratey towards 2030
2023 marked the third year since the launch of the Foundation’s 2030
strategy, ‘Bringing Discoveries to Lives’. The Foundation strives to
create
value across five key themes, where solid progress was made
across all areas
.
Top
-tier neuroscience
Close collaboration between
research and business
Active public voice
Attractive financial returns
Leading healthcare companies
We create value when we fund Danish
-
based research that results in a better
understanding of the brain and better
prevention, diagnosis and treatment of
brain diseases
.
We create value when we invest in research
talents, entrepreneurs and innovation in
Danish healthcare, and when we strengthen
the collaboration between universities,
hospitals and companies in Denmark
.
We create value when we develop and
internationalise Danish healthcare research
and business culture and when we improve
society's understanding of the brain and
its diseases
.
We create value when our return on
investment enables us to increase our
grants to society and secures our long
-term
economic robustness and growth
.
We create value when, as a competent
and engaged owner, we develop and
grow healthcare companies to become
international market leaders within
their categories
.
Our ambition is that, by 2030, Lundbeck Foundation
-
funded research will have led to a better
understanding of the brain and to groundbreaking
new programmes and treatments in clinical trials or
on their way to the market
.
Our ambition is that, by 2030, the Lundbeck
Foundation will have contributed to innovative
healthcare solutions and/or started new healthcare
companies in Denmark
.
Our ambition for 2030 is that the Foundation has
increased the public understanding of the importance
of brain health, improved the conditions for research in
Denmark
and further developed the role of enterprise
foundations
.
Our ambition for 2030 is
for our investment activities to
deliver a competitive return equal to or better than that
of relevant peers, and that we at least double our annual
fixed grants and our assets
.
Our ambition is that, by 2030, we will be a long
-
term and
significant owner of a portfolio of 5
-8 small or large
healthcare companies, preferably in Denmark, that are
international market leaders or on their way to
becoming leaders
.
Management review
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Lundbeck Foundation Annual Report 2023 Page 8
The 2030 strategy: ‘Bringing
Discoveries to Lives’
The Lundbeck Foundation is an enterprise foundation
engaged in a broad range of commercial and
philanthropic activities. The activities differ widely but
also support each other, and this creates a clear path for
the Foundation’s value creation across five thematic
areas.
Top-tier neuroscience
The Foundation’s scientific focus in 2023 was centred on
the tremendous complexity of the brain, which makes it
one of mankind’s most challenging scientific topics. As
today’s world lacks basic knowledge about the brain,
both with regard to the brain’s normal functioning and
with regard to brain disorders, the need for new insights
and knowledge remains imminent, and an important
ambition for the Foundation towards 2030 is to
generate new knowledge that can lead to better
prevention, diagnosis and treatment of brain disorders.
In 2023, 82% of the Foundation’s grants (a total of DKK
485m) were awarded to neuroscience research across all
levels, from PhD students to Professors, through a mix
of strategic programmes, open calls and talent
development activities – driving insights and knowledge
for the benefit of patients, doctors and therapists, and
further strengthening the neuroscience community in
Denmark.
The Foundation has a clear priority to nurture the next
generation of talents in neuroscience research. The
Foundation therefore launched the Neuroscience
Academy Denmark (NAD) in 2022 to give young
scientists the opportunity to explore neuroscientific
topics and to meet other scientists who are interested
in this research field. 2023 saw over 300 applicants for
the 2024 cohort of 16 PhD NAD fellows, including 8
students from outside Denmark. 2023 was also the year
of the first pre-PhD year in addition to a number of
events for the broader NAD community all over
Denmark.
In 2023, three significant LF Professor grants were
awarded to researchers to build new research
environments and programmes in Denmark within the
important research fields in neuroscience: pain,
hydrocephalus, and ion pumps.
The Foundation also continued the buildup of the open
knowledge platform, Neurotorium, which was launched
in 2022. The Neurotorium platform develops and
disseminates learning materials covering topics about
the brain and its diseases. All new content is curated by
an international board consisting of renowned
neurologists and psychiatrists from around the world. In
2023, Neurotorium reported a global reach of more than
180,000 active users from 181 countries. In 2023, two new
scientific themes were added to Neurotorium’s content
library; migraine and substance abuse disorders and
other additions, further expanding the scientific
content, which is freely accessible on Neurotorium.org
to clinicians and other users from all around the world.
In 2023, the Foundation awarded the world’s largest
brain prize for research in neuroscience, The Brain Prize,
to three outstanding scientists, Michael Greenberg,
Christine Holt and Erin Schuman, for their ground-
breaking discoveries in the synthesis of new proteins
triggering brain development and plasticity. The Brain
Prize winners were selected from among a diverse and
outstanding field of nominees from all over the world,
and the prize was complemented by a series of seminars
as part of the Foundation’s global scientific outreach
programme.
Close collaboration between
research and business
Healthcare innovation and entrepreneurship requires
constructive dialogue and collaboration between the
scientific research community and the commercial
business world. This is seen in the world’s most
innovative healthcare communities, where talents can
make the leap from science to business and back again.
This journey is not easy to make in Denmark, and an
important aspiration for the Foundation is therefore to
strengthen the dialogue and collaboration between
Denmark’s academic research institutions and the local
commercial biotech and pharmaceutical communities,
allowing scientific academic talent to explore, develop,
innovate and, eventually, make the leap from science to
business.
The Foundation therefore pioneered Frontier Grants in
2022 to support and facilitate transitions from basic
research projects to attractive prospects for biotech
investors to consider. The purpose is to advance and
mature research projects within biomedicine or health
science to become financeable and commercially
tangible venture opportunities while, in parallel, also
supporting their scientific project owners in their early
commercial endeavours. In 2023, four Frontier Grants
were awarded to scientists working on innovative new
treatments related to CGRP (migraine), Huntington’s
disease, liver fibrosis and cardiac diseases.
2023 was the first full year of operations for
Lundbeckfonden BioCapital, the Foundation’s biotech
investment arm, which was introduced in 2022 with a
new mandate and continues the work of the
Foundation’s two former biotech-investment teams.
In 2023, Lundbeckfonden BioCapital invested in two new
Danish start-up companies, Notify Therapeutics and
Dania Therapeutics, developing novel treatments for
infertility and cancer, respectively.
The past year continued the trends from 2022 with the
downturn in the biotech market, but despite these
challenges the portfolio of 20 companies continued to
perform well with several successful private as well as
public fundraisings and many positive clinical updates.
Leading healthcare companies
The engaged ownership of Danish healthcare companies
is at the core of the Foundation’s value creation. The
companies create products and treatments that benefit
patients all over the world while also driving financial
returns that enable new investments in science and
business development.
Management review
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Lundbeck Foundation Annual Report 2023 Page 9
Since 2010, the Foundation’s ownership portfolio has
comprised Lundbeck, ALK and Falck, with the
Foundation as the majority owner. The ownership
portfolio was expanded in 2022, when the Foundation
took a 30% stake in the Danish medtech company
Ferrosan Medical Devices (FeMD).
In 2023, the Foundation further expanded its ownership
portfolio with a 34% stake in Ellab, a market leading
player offering high-end validation and monitoring
solutions and other services which enable customer
safety and regulatory compliance within the healthcare
industry. The ownership of Ellab is shared with Novo
Holdings.
With the new ownership of Ellab, the Foundation has
reached an important milestone in its strategy
execution as significant long-term owner of five to eight
Danish healthcare companies.
The Foundation’s ambition is to grow and develop its
ownerships on a global scale, and to help the companies
become leaders within their industrial segments,
bringing innovations, products and treatments to
patients. In 2023, Lundbeck, ALK, Falck and FeMD each
made progress on their strategy execution.
Lundbeck delivered solid operational and financial
results while also bolstering its R&D pipeline.
ALK delivered 9% revenue growth in local currencies and
further advanced its ambition of becoming a broad-
based allergy company.
For Falck, 2023 marked the adoption of the new
strategy Care for more ‘27, which is an important step in
the transition to become a global provider of integrated
healthcare services covering a broad range of healthcare
services from prevention to acute care to rehabilitation.
Attractive financial returns
The investment activities of the Foundation are split
into three categories: Lundbeckfonden Strategic
Ownerships (Lundbeck, ALK, Falck, FeMD and Ellab),
Lundbeckfonden Invest (financial investments), and
Lundbeckfonden BioCapital (biotech investments). The
ambition for all investment teams towards 2030 is to
deliver annual financial returns which are above those of
its market peers, doubling the Foundation’s net wealth
by 2030 and growing the minimum philanthropic grants
to DKK 1bn annually in 2030 while safeguarding long-
term financial robustness.
2023 picked up after a challenging 2022 and the
Foundation’s total wealth increased to approximately
DKK 59bn. The long-term robustness of the
Foundation’s portfolio remains undiminished, as all
investment teams were able to execute their strategies
despite the market turmoil and instability.
Active public voice
As an enterprise foundation in Denmark with
considerable assets, the Foundation has many
obligations and dependencies to consider and strives to
be an active contributor to Denmark’s development as
an important research and science hub in the global
healthcare community.
In 2023, the Foundation continued to advance three
strategic agendas in its external communication and
activities:
• The importance of brain health
• Denmark as a science hub in healthcare
• Enterprise foundations’ unique value creation as
business owners
For more information on active public voice, please
see page 31.
Management
re
view
In
Brief
Performance Partner
to
Society
Governance
Consolidated financial statements Parent financial statements
Financial
highlights
Revenue (DKKm) and revenue growth (%) Profit for the year (DKKm)
37,000
{6,65<;)
7%
8,000
6%
6,27l
35,000
5%
4%
6,000
3%
33,000
2%
4,000
1%
31,000
0%
-
1%
2,000
-2%
29,000
-3%
0
•
2019
2020
2021
2022 2023 2019
2020
2021
2022 2023
Revenue reached
DKK
36,659m representing a grow
th
of
3.5
% compared
to
2022 Profit
for
the year inc
rea
sed
from
DKK
1,
211m
to
DKK
6,
27
3m
Operating
profit
(DKKm) and
operating
profit
margin
(%)
Return
on
equity
(%)
5,000
12%
16%
4,000
10%
14%
12%
12
11
'0
3,000
8%
10%
6%
8%
2,
000
4%
6%
1,000
2%
4%
0
0%
2%
0%
•
2019
2020
2021
2022
2023
2019
2020
2021
2022 2023
Operating
profit
incr
ease
d to
DKK
3,790m, re
pr
ese
nting
10.3
% of revenue Return on equity incr
ease
d to 1
2%
Lundbeck Foundation Annual Report 2023
Reports
Lundbeckfonden's share
of
equity (DKKm)
50,000
45,000
40,000
35,000
30,000
25,000
20,000
15,000
10,000
2019
2020
2021
2022 2023
Lundbeckfonden's share
of
equity increased
by
DKK
4,288m in 2023
Average
number
of
employees
(FTE
s)
40,000
30,000
-27,lSO
20,000
10,000
2019
2020
2021
2022 2023
Average
number
of
employees d
ec
re
as
ed by
3%
, primarily due to Falck
's
significant
numb
er
of
public t
es
ting
ac
tivi
ti
es
in Ql 2022 th
at
impacted the annual average
Page
10
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Lundbeck Foundation Annual Report 2023 Page 11
For the definitions of key figures, please see note 36.
Five-year summary
DKKm
2023
2022
2021
2020
2019
Revenue 36,659 35,426 35,403 33,520 34,134
Operating profit 3,790 3,427 3,872 2,340 2,902
Profit for the year
6,273 1,211 6,928 2,415 5,214
Lundbeckfonden's share of profit 5,159 -126 5,880 1,998 4,672
Financial items, Invest etc. 2,832 -1,430 4,608 1,244 2,187
Financial items, BioCapital
772 -565 -141 -6 1,452
Net financial items
3,200 -1,662 3,872 653 3,307
Grants awarded 592 550 803 600 666
Dividends from subsidiaries
545 1,286 343 563 1,648
Cash flow from operating activities 5,584 3,974 4,569 5,635 3,659
Cash flow from investing activities
-1,731 -2,096 -1,368 -1,131 -8,757
Cash flow from operating and investing activities (free
cash flow)
3,853 1,878 3,201 4,504 -5,098
Cash flow from financing and grant-making activities
-2,348 -1,610 -4,840 -3,494 4,419
Subsidiaries' acquisitions 101 1,079 680 - 10,516
Investments in intangible assets
298 516 255 171 158
Investments in property, plant and equipment
800 912 738 606 677
Equity 55,146 50,164 49,422 42,852 41,802
Lundbeckfonden's share of equity
45,859 41,571 41,621 36,108 35,053
Total assets
81,732 77,633 78,022 74,563 76,502
Debt to financial institutions and others
8,625 9,669 9,310 12,549 15,766
Net wealth
58,807 51,608 67,114 64,411 65,301
DKKm
2023
2022
2021
2020
2019
Key figures
Revenue growth 3.5% 0.1% 5.6% -1.8% -2.5%
Operating profit margin 10.3% 9.7% 10.9% 7.0% 8.5%
Return on equity
11.9% 2.4% 15.0% 5.7% 13.2%
Average number of employees (FTE)
27,350 28,086 28,932 29,084 31,818
Management review
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Lundbeck Foundation Annual Report 2023 Page 12
In 2023, the Lundbeck Foundation
delivered Group revenue and operating
profit in line with expectations, and
Group profit for the year amounted
to DKK 6,273m.
In line with the Foundation’s expectations of higher
Group revenue and operating profit than was achieved
in 2022, Group revenue and operating profit increased
to DKK 36,659m and DKK 3,790m, respectively.
Group profit for the year, at DKK 6,273m (DKK 1,211m),
was positively impacted by solid financial results from
the Foundation’s investment activities.
Grants totalled DKK 592m compared to DKK 550m
in 2022.
Operating Activities
Reported revenue for the year increased to DKK
36,659m (DKK 35,426m), largely thanks to Lundbeck,
which delivered record revenue of DKK 19,912m (DKK
18,246m), corresponding to an increase of 9% on 2022.
Revenue at ALK increased by DKK 313m, or 7%, while
revenue at Falck decreased by DKK 734m, or 6%. The
decline in Falck’s revenue was driven by the
discontinuation of COVID-19 antigen testing activities in
2022. Excluding testing activities, Falck’s revenue
decreased by DKK 117m, or 1%.
Gross profit was DKK 20,931m, versus DKK 19,521m in
2022. The increase was primarily attributable to
Lundbeck, where gross profit increased by DKK 1,132m.
Gross profit at ALK and Falck increased by DKK 244m
and DKK 81m, respectively.
The Group’s gross margin was 57%, up from 55%
in 2022.
Research and development (R&D) costs decreased by
DKK 321m to DKK 4,155m (DKK 4,476m).
Overall sales and distribution costs increased to
DKK 9,317m (DKK 8,400m), driven by higher costs at
Lundbeck of DKK 872m. Overall sales and distribution
costs represented 25% of total revenue in 2023 (24%).
Overall administration costs amounted to DKK 3,663m
(DKK 3,166m), with the increase largely attributable to
Falck and Lundbeck.
The Foundation’s own net administration and operating
costs amounted to DKK 162m versus DKK 170m in 2022,
which was affected by one-off costs.
Financial performance
Revenue
+3
%
DKK
36,659m
(DKK 35,
426m)
R
eported revenue at Lundbeck and
ALK increased by
9% and 7%,
respectively,
on 2022.
Group operating profit
+
11%
DKK
3,790m
(DKK 3,427m)
The increase in Group operating
profit was
primarily attributable
to Lundbeck (+
343m) and
ALK (+
196m).
Net wealth
+
14%
DKK 5
8,807m
(DKK 51,608m)
The increase was primarily
attributable
to increase in Lundbeck’s
share price and the investment
portfolio in Invest
.
Revenue
DKKm 2023 2022
Lundbeck 19,912
18,246
ALK 4,824
4,511
Falck 11,913
12,647
Other business 10
22
Total 36,659
35,426
Management review
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Lundbeck Foundation Annual Report 2023 Page 13
Total operating costs thus amounted to DKK 17,135m in
total versus DKK 16,042m in 2022.
Other operating items, net, amounted to an expense of
DKK 6m (expense of DKK 52m). In 2022, other operating
items, net, included a DKK 113m impairment to the
goodwill of Falck’s activities in the USA.
Operating profit increased to DKK 3,790m (DKK 3,427m).
The improvement was attributable to Lundbeck and
ALK, which saw increases of DKK 343m and DKK 196m,
respectively.
Operating profit
DKKm 2023 2022
Lundbeck 3,195
2,852
ALK 666
470
Falck 388
493
Lundbeckfonden -162
-170
Other business -297
-218
Total 3,790
3,427
Investment activities
The Foundation’s investment activities saw a profit of
DKK 3,570m compared to a loss of DKK 1,995m in 2022.
The investment portfolio in Invest generated a profit of
DKK 2,832m versus a loss of DKK 1,430m in 2022. The
return, which was primarily driven by listed equities, was
marginally better than the benchmark.
Meanwhile, the Foundation’s BioCapital portfolio
delivered a net profit totalling DKK 772m (net loss of
DKK 565m). Profit in 2023 was positively impacted by
the valuation of the private portfolio on the back of
clinical progress and selected positive market
developments during the year, which compensated for
the decrease in the value of the public portfolio.
Tax
The effective tax rate of 10% (2022: 31%) was below the
Danish income tax rate primarily due to deductible
grants recognised directly in equity and the
Foundation’s utilisation of tax assets – in accordance
with the accounting policy – not being recognised.
Net effective tax rate of the three strategic subsidiaries
was 19% (2022: 19%) impacted by a positive effect from
capitalisation of deferred tax assets, mainly in the USA.
Net results and grants
In 2023, overall profit for the Group was DKK 6,273m
(DKK 1,211m). The Foundation’s share of Group profit was
DKK 5,159m (DKK -126m).
The Foundation awarded a total of DKK 592m in grants
(DKK 550m) in 2023.
Assets
Total assets at 31 December 2023 amounted to DKK
81,732m versus DKK 77,633m at the end of 2022.
Intangible assets amounted to DKK 26,086m at 31
December 2023 (DKK 27,952m), of which product rights
accounted for DKK 14,903m (DKK 16,741m). Amortisation
and impairment of product rights amounted to DKK
1,711m (DKK 1,483m). Goodwill at year-end amounted to
DKK 9,977m (DKK 10,037m).
The Foundation’s financial assets at 31 December 2023
amounted to DKK 24,423m (DKK 22,511m), equivalent to
an increase of DKK 1,912m compared to year-end 2022.
Cash and bank balances at 31 December 2023 amounted
to DKK 6,080m (DKK 4,609m).
Equity and liabilities
Total Group equity at 31 December 2023 amounted to
DKK 55,146m (DKK 50,164m), reflecting an increase of
DKK 4,982m in 2023. The Foundation’s share of equity
increased to DKK 45,859m (DKK 41,571m).
At 31 December 2023, total debt to financial institutions
etc., including lease liabilities, decreased to DKK 8,625m
(DKK 9,669m). Consequently, net interest-bearing debt,
excluding the Foundation’s financial assets, amounted
to DKK 2,545m (DKK 5,060m).
Cash Flow
Total cash flow from operating activities amounted to
DKK 5,584m versus DKK 3,974m in 2022. The increase
was primarily driven by higher operating profit.
Total cash flow from investment activities amounted to
an outflow of DKK 1,731m (outflow of DKK 2,096m).
Excluding the purchase and sale of financial assets, cash
flow from investment activities was an outflow of DKK
1,103m (outflow of DKK 1,494m). Acquisition and
divestment of businesses, net, accounted for DKK 101m
of this outflow (outflow of DKK 81m).
In 2023, the total cash flow from grants paid and
dividends paid to non-controlling interests amounted to
an outflow of DKK 680m (outflow of DKK 1,410m).
Repayment of debt to financial institutions etc.,
amounted to a net outflow of DKK 1,618m (net outflow
of DKK 87m).
Net cash flow in 2023 amounted to an inflow of
DKK 1,505m (inflow of DKK 268m). At the end of 2023,
the Group’s cash balance totalled DKK 6,080m versus
DKK 4,609m at the end of 2022.
The Lundbeck Foundation’s share of equity and
debt to financial institutions etc.
0
10
20
30
40
50
2019 2020 2021 2022 2023
DKKbn
Equity Debt
Management review
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Lundbeck Foundation Annual Report 2023 Page 14
Net wealth
At 31 December 2023, the Group’s net wealth amounted
to DKK 58,807m (DKK 51,608m). Net wealth was
significantly affected by the increase in Lundbeck’s
share price and the profit in Lundbeckfonden Invest,
which had positive effects of DKK 4,704m and DKK
2,801m, respectively.
Outlook
The financial performance of the Group depends on
developments in the commercial activities of Lundbeck,
ALK and Falck, as well as returns generated by the
Foundation’s investment activities, including strategic
ownerships (Ferrosan Medical Devices and Ellab) and the
biotech portfolio. Returns provided by investment
activities largely depend on the overall performance of
the financial markets, whereas returns from the biotech
portfolio also depend on the development of products
and similar factors at the portfolio companies.
For 2024, Group revenue is expected to reach between
DKK 37bn and DKK 39bn. Group operating profit is
expected to be between DKK 4.6bn and DKK 5.2bn. The
expected increase in Group revenue and operating profit
compared to 2023 is related to expected higher revenue
and improvements at all subsidiaries.
Based on the financial strength of the Foundation, the
expenditure on grants is expected to remain at a high
level of at least DKK 500m.
These expectations are based on the exchange rates
prevailing at the end of January 2024.
Please refer to the respective annual reports of
Lundbeck, ALK and Falck for further details about
the companies’ individual expectations.
Lundbeck Foundation (parent entity)
The Foundation’s profit for the year amounted to
DKK 969m versus DKK 1,297m in 2022. The 2023 result
was positively affected by a net financial profit of
DKK 1,063m (loss of DKK 809m). In 2022, profit for
the year was positively impacted by dividends from
Lundbeckfond Invest A/S of DKK 2,192m.
In total, grants awarded in 2023 amounted to
DKK 592m versus DKK 550m in 2022. Net grants
amounted to DKK 580m (DKK 539m) in 2023, as grants
of DKK 12m (DKK 11m) were reversed or repaid during
the year. Subsequently, the carrying equity at
31 December 2023 amounted to DKK 10,712m
(DKK 10,323m).
Distribution of net wealth
Net wealth
DKKm
Value
Contribution to net
wealth 2023
Strategic ownerships
34,589 4,222
Invest
23,000
2,801
BioCapital
2,886 875
Grants, corporate
functions, etc.
-1,668
-699
Net wealth
58,807 7,199
The strategic ownerships’ contributions to net wealth differed
from the contribution recognised and measured in accordance
with the accounting policies of the Lundbeck Foundation Group.
The fair value of the Foundation’s net assets is based on market
prices, where available
- for ALK and Lundbeck - and, for other
companies, an estimated fair value based on a trading
-multiple
model.
Figures for 2022 are shown in brackets
For 2024, Group revenue is
expected to reach between
DKK
37bn and DKK 39bn
Net wealth
DKK 59bn
Management review
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Lundbeck Foundation Annual Report 2023 Page 15
Long-term value creation
The Lundbeck Foundation is a long-term owner of
healthcare companies based in Denmark which are
either global leaders or heading in that direction. The
Foundation invests in both public and private
companies and can take minority as well as majority
ownership positions. The ambition is to own between
five and eight companies in this category by 2030. The
Foundation is therefore looking to invest in companies
rooted in Denmark with the potential to become global
leaders in their fields.
The Foundation’s aim is to develop both small- and
large-scale healthcare companies and help them
become global leaders. The Foundation is able to do this
because skills have been built in the field of healthcare
throughout the Foundation’s entire existence. Over the
past decades, the Foundation has established itself as
a competent and engaged owner and, in close
collaboration with the companies’ management teams,
has played an active role in creating long-term value.
As an enterprise foundation, the Foundation takes a
long-term approach to the strategic ownerships and can
ensure the right conditions for these companies to
become global leaders in their fields. The enterprise
foundation model is a strong, sustainable type of
ownership that ensures long-term value creation, keeps
companies in Danish ownership as long as possible and
contributes to society by - in the case of the Foundation
- awarding grants to Danish-based biomedical sciences
research. The Foundation wishes to spread the unique
potential of the enterprise foundation model to more
Danish healthcare companies.
What we invest in
• Healthcare companies headquartered in Denmark
• Companies leading in their field, or with the potential
to become a leader
• Companies delivering financially attractive returns
that could contribute to growing the Foundation’s net
wealth long term
Lundbeckfonden Strateic Ownerships
The Foundation’s department for strategic ownerships is responsible
for the Foundation’s portfolio of long
-term ownerships and for
identifying and making new strategic investments. Today, the portfolio
includes H. Lundbeck, ALK, Falck, Ferrosan Medical Dev
ices and Ellab.
Global pharmaceutical company
specialising in the development of
innovative therapeutics for brain
disorders.
Leading developer and manufacturer of
innovative haemostatic products used by
healthcare professionals in the fields of
surgery and diagnostics.
Year of investment 1954 Year of investment 2022
Ownership 69% (76% voting rights) Ownership 30%
Partner Listed Partner ATP & Kirk Kapital
Leading global developer and producer of
a wider range of allergy treatments,
products and services that meet the
unique needs of allergy sufferers.
Leading global player within high-end
validation and monitoring solutions, as
well as field service and consulting to
primarily life science customers.
Year of investment 2005 Year of investment 2023
Ownership 40% (67% voting rights) Ownership 34%
Partner Listed Partner Novo Holdings
Global supplier of healthcare and
emergency services to help people
live healthy lives.
Year of investment 2011
Ownership 58%
Partner Kirkbi & TryghedsGruppen
Management review
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Lundbeck Foundation Annual Report 2023 Page 16
In 2023, Lundbeck continued a strong growth trajectory,
while also seeing results of the successful R&D
transformation. 2023 saw robust sales growth from the
strategic brands
1
and the launch of Vyepti® in numerous
markets, along with the launch of Rexulti® with the
additional indication AADAD and the launch of Abilify
Asimtufii® in the USA.
In 2023, Lundbeck continued to rethink and de-risk the
pipeline and how clinical trials are carried out. Lundbeck
has been redirecting the research focus to areas where
they have a profound understanding of biology and,
importantly, biomarkers that can help understand and
reduce risks during development. More products in the
portfolio are developed using biomarkers, allowing for
further de-risking of Lundbeck’s clinical development.
During Q3 2023, Lundbeck smoothly executed the
planned transition from Deborah Dunsire to Lundbeck’s
new CEO, Charl van Zyl.
Now, Lundbeck is in the process of strengthening the
position as a focused innovator to ensure a sustainable
long-term future for the products, innovation, R&D, and
profitability. As Lundbeck is witnessing the results of
the ‘Expand and Invest to Grow’ strategy, implemented
in 2019, Lundbeck is now looking into how it can
accelerate the business further. Lundbeck is striving to
build and develop a rich pipeline through a combination
of organic growth and strategic initiatives, such as
partnerships, in-licensing and acquisitions.
Throughout 2023, Lundbeck further continued its “Let
the patient speak” events focusing on innovative ways
of integrating patients’ perspectives into the migraine
and Parkinson’s disease development programmes. With
this, Lundbeck invites patients and caregivers to share
their perspectives, ultimately helping Lundbeck to
incorporate insights into innovation and integrated
evidence generation efforts.
Executing the R&D strategy
In 2023, Lundbeck advanced towards becoming a leader
in neuroscience. By nurturing a dedicated, flexible, and
diverse working environment, maintaining focus on
programmes with a strong biological rationale,
integrating patient insights, and building close external
collaborations, Lundbeck is successfully progressing its
pipeline.
In April 2023, the HOPE Phase II trial with Lu AG09222
(anti-PACAP mAb) successfully met its primary endpoint
in migraine prevention. Patients failing prior therapy
and treated with this monoclonal antibody had a
statistically significantly greater reduction vs. placebo in
the number of monthly migraine days and data has
subsequently been presented at medical conferences.
The data supports this anti-PACAP mAb as a potential
preventive treatment of migraine, and Lundbeck is
excited about the potential to help patients who may
require a new approach for migraine prevention. A
Phase IIb trial is planned to start in the first half of 2024
with the purpose of establishing the dose range
relationship when Lu AG09222 is given after
subcutaneous multiple dosing.
Life-cycle management activities around Lundbeck’s
strategic brands were also yielding results during 2023.
In April 2023, the FDA approved the New Drug
Application (NDA) for Abilify Asimtufii® (aripiprazole)
extended-release injectable suspension for
intramuscular use, a once-every-two-months injection
for the treatment of schizophrenia in adults or for
maintenance monotherapy treatment of bipolar I
disorder in adults. This new two-month formulation is
an innovative addition to the long-acting injectable
franchise and has patent protection until the early part
of the next decade.
In May 2023, the FDA approved the supplemental New
Drug Application (sNDA) of Rexulti® (brexpiprazole) for
use in the treatment of agitation associated with
dementia due to Alzheimer’s disease (AADAD). This
approval made Rexulti® the first and only
pharmacological treatment approved for AADAD and
the first full approval of a new chemical entity within
Alzheimer’s disease in 20 years in the USA.
In September 2023, Lundbeck and Otsuka
Pharmaceutical announced topline results from two
Phase III trials of brexpiprazole as combination therapy
with sertraline for the treatment of post-traumatic
stress disorder in adults. Overall, the safety and
tolerability results were consistent with the profile of
brexpiprazole as observed in the clinical trials for
schizophrenia, AADAD and adjunctive treatment of
major depressive disorder (MDD). The flexible dose
Phase III trial met its primary endpoint, while the fixed
dose Phase III trial missed its primary endpoint.
Lundbeck and Otsuka are now discussing the data with
the FDA to determine the next steps.
H. Lundbeck A/S
Lundbeck is a global pharmaceutical company that specialises
in brain health. The Lundbeck Foundation owns 69% of the
share capital and 76% of the votes
.
1
Rexulti®/Rxulti® (depression/schizophrenia), Brintellix®/Trintellix® (depression), Abilify Maintena®/Asimtufii® (schizophrenia) and Vyepti® (prevention of migraine)
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Lundbeck Foundation Annual Report 2023 Page 17
The geographical expansion of Vyepti® and the
continuing efforts to grow and expand strategic brands,
along with several other life-cycle management projects,
are all crucial to Lundbeck’s future. Altogether, the
emerging scientific developments in 2023 are promising,
and Lundbeck will continue to invest to realise the full
potential of the R&D engine.
Financial performance
Sales
In 2023, Lundbeck reached a record revenue of DKK
19,912m (DKK 18,246m), mainly driven by growth of the
strategic brands in the USA and Europe. On aggregate,
the revenue of Lundbeck’s strategic brands increased by
13% and accounted for 69% of total revenue.
The US constituted 49% of total revenue in 2023 and
represented Lundbeck’s largest market. The revenue
growth of Vyepti®, Rexulti® and Abilify Maintena®/
Asimtufii® in the USA during 2023 was mainly driven by
strong demand and price increases as well as a negative
currency impact. Sales of Trintellix® continued to be
negatively impacted by declining demand and higher
gross-to-net following a shift in the payer mix, offset by
price increase. Revenue development in the USA was
furthermore impacted by the erosion of mature brands.
Europe saw robust revenue growth of 9% driven by
higher sales across all strategic brands.
Operating profit
Cost of sales increased by 14% to DKK 4,485m in 2023,
mainly driven by higher sales, the Vyepti® provision for
inventory obsolescence, and an increased Vyepti®
amortisation recognised in 2023 related to the
European approval of Vyepti® and environmental
provisions. The gross margin was 77.5% compared to
78.3% for 2022.
Sales and distribution costs were DKK 7,482m in 2023,
an increase of 13% compared to 2022, primarily due to
higher Rexulti® and Vyepti® sales and promotion
activities in the USA, global roll-out of Vyepti® and
restructuring provisions related to commercial structure
in certain international markets. Sales and distribution
cost corresponded to 37.6% of revenue in 2023,
compared to 36.2% for 2022.
Administrative expenses increased by 20% to DKK
1,293m, corresponding to 6.5% of total revenue. The
increase was mainly a result of higher legal provisions
for ongoing litigations, expenses from digital
investments, and the CEO transition.
R&D costs were DKK 3,457m in 2023 (DKK 3,754m) with
an R&D ratio of 17.4%. The lower R&D costs reflect a
reduced late development and Phase IV activities in
2023 compared to 2022.
Operating profit grew by 12%, thereby reaching DKK
3,195m in 2023. The operating profit margin reached
16.0%, compared to 15.6% in 2022.
Net profit
The effective tax rate for 2023 was 23.5% compared to
22.6% for 2022. The tax rate reflects the reduced
deduction benefit from the Danish research &
development incentive.
Profit for 2023 reached DKK 2,290m (DKK 1,916m).
Figures for 2022 are shown in brackets
Revenue (DKKm)
1
9,912
Operating profit (DKKm)
3
,195
Net profit (DKKm)
2
,290
Number of employees (FTEs)
5,
566
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Lundbeck Foundation Annual Report 2023 Page 18
ALK is a global specialty
pharmaceutical company focused
on allergy and allergic asthma. It
markets allergy immunotherapy
treatments and other products and
services for people with allergy and
allergy doctors. The Lundbeck
Foundation owns 40% of the share
capital and 67% of the votes.
ALK delivered solid growth in 2023 and remains
committed to delivering best in class treatments to
improve the lives of the many people living with
moderate to severe allergies.
During 2023, ALK faced a challenging market
environment, including a one-year mandated increase in
rebates in its largest market, Germany, stagnating
tablet sales in Europe during the first half of the year,
supply chain issues affecting the adrenaline auto-
injector Jext®, continued inflation, and a complex
geopolitical situation.
ALK navigated these challenges and the leadership
changes, delivering both strategic and financial
progress. Revenue increased by 9% based on organic
growth in all sales regions, and with gains in market
shares across key markets, ALK solidified its position
as the global market leader in AIT in 2023.
Four strategic focus areas
ALK continued to execute its business strategy in 2023,
making progress with all four of its strategic focus
areas:
• Succeed in North America
• Complete and commercialise tablet portfolio
• Consumer engagement and new horizons
• Optimise for excellence
In 2023, a primary strategic objective for the US tablet
organisation was to initiate the establishment of new
sales and prescription channels, with particular
emphasis on paediatricians and exploring commercial
partnerships with retail pharmacies, urgent care clinics
and on-demand virtual care providers. Many
paediatricians manage a sizeable inflow of patients with
uncontrolled allergies and possess a good
understanding of immunology and allergy, mirroring
the dynamics observed among allergists. A noteworthy
distinction lies in the fact that paediatricians do not
face the same financial disincentives as allergists when
it comes to prescribing tablets. According to plan, ALK
established an initial, though modest, prescriber base
amongst US paediatricians during 2023.
Tablet sales in North America saw growth of 26% in
local currencies in 2023, and ALK expects continued
growth in 2024. However, success with tablets in the
USA – unlike in Europe and Japan – is a long-haul effort,
but the potential rewards remain attractive.
Efforts were made to advance the tablet portfolio in
2023, with the overarching goal of expanding the use of
tablets to new patient groups and geographical
markets. A key strategic focus in 2023 was to restore the
growth in tablet sales in Europe, primarily by increasing
the number of new patients undergoing treatment,
particularly in key markets such as Germany and the
Nordics. Addressing the previous year's lower-than-
expected enrolment of new patients onto tablets during
the initiation season, ALK undertook further initiatives
to actively engage people with allergies, capture a larger
share of the market, broaden prescriber bases, and
encourage healthcare professionals to initiate patients
earlier than the typical timeline. The number of new
patient initiations in key markets exceeded last year’s
numbers by more than 10%, and ALK recorded a
noteworthy 13% increase in European tablet sales during
the second half of 2023.
Progress was also achieved in supporting the long-term
commercial potential of the respiratory tablet portfolio.
Two pivotal Phase III clinical trials involving the house
dust mite and tree pollen tablets in children were
successfully completed, both demonstrating the
advantages of initiating allergy treatment with ALK's
tablets from early childhood. These outcomes are crucial
to ALK's aspirations to introduce tablets to patients at
an earlier stage in life, thus facilitating the expansion of
both patient and prescriber demographics. ALK is now
handling the regulatory processes for paediatric
approvals with the authorities in Europe and North
America.
Progress on increasing consumer engagement
continued during 2023, as the digital mobilisation of
individuals living with allergies saw further progress,
with over 960,000 users connecting with doctors
through the tools within ALK’s online clarify universe.
This marked an increase from approximately 700,000
users in 2022. The digitally driven patient journey proved
particularly valuable in key European markets, where
ALK’s digital platforms played an important role in
mobilising AIT-eligible patients towards relevant doctors
ahead of the latest initiation season.
ALK’s 'new horizons' priority covers innovations aimed at
securing and potentially accelerating ALK’s long-term
growth by establishing a more extensive presence in the
broader allergy space, including a focus on food allergy.
In early 2024, ALK announced that it had successfully
completed the first part of the Phase I clinical trial with
its novel once-daily SLIT-tablet for peanut allergy
treatment. This part showed that for all investigated
ALK-Abelló A/S
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Lundbeck Foundation Annual Report 2023 Page 19
doses, the tablet was safe and tolerable. The trial now
progresses into its second part, which is expected to
complete later in 2024. Furthermore, ALK has made a
provisional decision to extend the trial with a third part
allowing it to explore efficacy of the tablet as well.
ALK’s two concurrent projects aimed at developing a
next-generation adrenaline auto-injector (AAI) - the in-
house Genesis project and a collaboration with the
company Windgap - continued in 2023. However, the
anaphylaxis market is likely to change, driven by new
product innovations. In response, ALK is currently
reviewing its anaphylaxis strategy to adapt to the
changing dynamics. Meanwhile, China-based
Grandpharma continues to work toward the registration
and launch of ALK’s existing AAI, Jext®, aiming to make
it the first AAI available in mainland China.
The priority ‘optimise for excellence’ covers ALK’s
product and site strategy (PASS) programme, among
other initiatives. Under the PASS programme, in 2023,
ALK continued to upgrade production facilities and
processes to ensure that legacy products remain viable
in the longer term. Streamlining the portfolio will allow
ALK to consolidate production around fewer production
lines and so reduce complexity. In addition, to support
the planned growth in tablet volumes, ALK invested
during 2023 in expanding tablet manufacturing
capacity. ALK’s ongoing investment programme seeks to
increase current tablet capacity by up to 300% by 2030,
compared to the capacity in 2022.
Financial performance
Sales
2023 revenue increased by 9% in local currencies to
DKK 4,824m (DKK 4,511m). Exchange rates impacted
reported revenue growth negatively by 2 percentage
points. Tablets and SCIT were the main growth drivers
globally with double-digit growth for both segments.
Sales of SLIT-drops increased slightly, despite the
ongoing market transition in France. Meanwhile, Jext®
sales in the second half of 2023 were impacted by
intermittent supply shortages from ALK’s contract
manufacturer of adrenaline-filled cartridges.
Operating profit
Cost of sales increased 5% in local currencies to
DKK 1,789m (DKK 1,720m). The gross profit of
DKK 3,035m (DKK 2,791m) yielded an improved
gross margin of 63% (62%), mainly reflecting higher
sales and production efficiencies, partly offset by
increasing tablet shipments to Torii at lower margins.
ALK continued to implement its product and site
strategy, involving investments in upgrading products
and associated manufacturing facilities to secure quality
and robustness in product supply.
Capacity costs increased by 3% in local currencies to
DKK 2,371m (DKK 2,322m). As planned, R&D expenses
decreased 7% in local currencies reflecting the recent
completion of late-stage clinical trials of the respiratory
tablet portfolio. Sales and marketing expenses were up
5% in local currencies, in support of continued growth.
Administrative expenses increased 20% in local
currencies, mainly reflecting one-off costs in Q2
associated with the leadership changes as well as
increased activity levels.
Operating profit increased by 50% in local currencies to
DKK 666m (DKK 470m), improving the EBIT margin from
10% to 14%. Progress was due to higher sales, improved
gross margin and a lower capacity cost-to-revenue ratio.
Net profit
Net financials were a loss of DKK 19m (loss of DKK 23m).
Tax on the profit totalled DKK 161m (DKK 112m), and net
profit increased to DKK 486m (DKK 335m).
Figures for 2022 are shown in brackets
Revenue (DKKm)
4,
824
Operating profit (DKKm)
666
Net profit (DKKm)
486
Number of employees (FTEs)
2,
752
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Lundbeck Foundation Annual Report 2023 Page 20
Falck employs +25,000 highly skilled
professionals present in 26 countries,
delivering more than 9 million
emergency response and healthcare
services every year. The Lundbeck
Foundation owns 58% of Falck.
2023 was another successful year for Falck, with solid
progress made on the strategy. Falck achieved broad-
based organic growth of 3.9% driven by both price
increases and subscription growth more than offsetting
contract volume changes in Ambulance Denmark. In
addition, Falck commenced a comprehensive
digitalisation programme, forged partnerships to
develop healthcare services and progressed on its
sustainability strategy.
During the year, Falck faced a looming macroeconomic
recession and retrenchments among private and
corporate customers, while the labour market for
healthcare professionals remained tight. The full-year
financial results were in line with expectations, as
revenue amounted to DKK 11,913m and operating profit
was DKK 388m. Operating profit was negatively
impacted by divestments and foreign exchange effects.
In Emergency Health and Safety, the business area
covering ambulance and fire operations, total revenue in
2023 increased to DKK 7,564m (DKK 7,378m) impacted
by underlying organic growth of 4%. The increase was
mainly driven by price increases implemented in
response to elevated cost inflation during the past two
years as well as increased activity in the USA. This made
up for lower revenue in Denmark as the result of
contract changes.
In Healthcare, the business area with healthcare
services, organic growth of 3.6% was achieved. Falck
experienced further growth in the number of healthcare
subscriptions delivered in Colombia and Denmark.
However, macroeconomic conditions in the first half of
the year, especially in Sweden, led to a weak and volatile
demand for healthcare services to corporate and public
customers. Positive organic growth was offset by the
significant negative impact from foreign exchange
effects and, as a result, revenue in 2023 amounted to
DKK 4,354m (DKK 4,347m).
Overall, Falck generated positive organic growth and
financial results in both business areas under
challenging market conditions with surging salary
inflation and rising interest rates.
Solid progress on the strategy execution
During 2023, Falck invested in a wide range of
innovation initiatives, usually together with partners,
and in further refining its services. In several markets,
Falck worked intensively with remote patient
monitoring and ways for people to stay at home with
support rather than being hospitalised. These
operations and innovation projects are aimed to
counter the challenge of aging populations and rising
healthcare demands.
Another innovation theme during 2023 has been to
boost preventive care to alleviate pressure on the
healthcare systems for the long term. On this account,
Falck launched a pilot on by-stander psychology support
in the Danish region Zealand, created new B2B
healthcare services in Denmark, and progressed on
materialising mobile healthcare services in the USA.
Accelerated investments to deliver more
Falck initiated an accelerated investment programme to
digitalise Falck, improve the operation and services, and
to spark the development of new healthcare services in
partnerships. This was done in conjunction with the
launch of the corporate strategy Care for More ’27 in
early 2023. Altogether, Falck invested about DKK 200m
in digitalisation and business development in 2023 and
will expand digital investments to reach DKK 225m in
2024, up from DKK 153m, which was the amount solely
invested in digitalisation in 2023. This will form the
backbone for stronger, data-driven business operations,
service solutions and customer experiences.
At the end of 2023, Falck expanded its position within
telemedicine with the acquisition of Hejdoktor, a leader
in online healthcare in Denmark. This acquisition is part
of Falck’s long-term strategy to disseminate more
digital healthcare solutions to curb hospitalisations and
increase access to health This holds great potential in
relation to making healthcare more accessible to more
people and accelerating several strategic initiatives
in Falck.
Falck A/S
Falck has grouped its activities into two
business areas:
• Emergency Health and Safety business area
provides ambulance and fire services in Europe
and the USA. Services span across both
prevention and treatment. They include
emergency response, paramedics services, fire
and safety training, firefighting, search and
rescue as well as qualified medical
transportation services
• Healthcare business area provides a diverse
offering of healthcare services to supplement
and work in tandem with established
healthcare systems in Europe and Latin
America. Services span across prevention,
treatment and rehabilitation and include e.g.,
health and safety training, organisational
health checks and courses, emergency travel
assistance, patient transport services,
treatments and consultation performed by
psychologists, physio therapists, nurses, and
doctors
Management review
In Brief Performance Partner to Society Governance Consolidated financial statements Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 21
Ready to continue growth
In the years ahead, Falck will explore the opportunities
to build a full pan-Scandinavian presence, offering a
complete range of healthcare services in all countries,
addressing B2B, B2G, B2I as well as B2C markets. In the
USA, Falck will primarily expand its running of 911
emergency services and an emerging Mobile Health
solution in California. The growth strategy in Latin
America is to launch service lines and proactively
approach additional potential customers.
Financial performance
Sales
In 2023, Falck delivered organic growth of 3.9% driven by
price increases and subscription growth, more than
offsetting contract volume changes in Ambulance
Denmark. However, divested revenue had a negative
impact on growth of 2.7 percentage points, while foreign
exchange effects had a negative impact of 2.2
percentage points. As a result, total reported revenue in
2023 amounted to DKK 11,913m (DKK 12,030m).
Operating profit
Cost of services decreased to DKK 9,253m (DKK 9,571m)
due to divestments made last year and foreign
exchange effects. The OPEX ratio was positively
impacted by the improved operational efficiency and
price increases in both the Emergency Health and Safety
and the Healthcare business areas.
Sales and administrative expenses increased to DKK
2,230m (DKK 2,011m) partly driven by increased costs of
various strategic initiatives to support the execution of
Falck’s strategy. In total, these costs amounted to
DKK 203m. The remaining part of the increase was
driven by a combination of salary inflation, higher sales
and marketing costs, strengthened commercial
capabilities as well as increased provisions.
Operating profit increased to DKK 388m (DKK 293m),
corresponding to an operating profit margin of 3.3%
(2.4%). In 2022, the margin was negatively impacted by
an impairment of goodwill of DKK 113m, related to
Ambulance US.
Net profit
Net financial expenses increased to DKK 181m (DKK 74m)
driven by increased interest expenses due to higher
interest rate levels.
Income tax amounted to an income of DKK 129m,
impacted by a positive effect from capitalisation of
deferred tax assets, mainly in the USA. Excluding this
impact, the effective tax rate was 36.6% in 2023 (12.0%).
Profit for the year was DKK 334m (DKK 921m).
Revenue (DKKm)
11
,913
Operating profit (DKKm)
388
Net profit (DKKm)
33
4
Number of employees (FTEs)
18
,953
All numbers in the commentary relating to the components of
operating profit are stated excluding the financial impact of the
public testing activities in Q1 2022
.
Figures for 202
2 are shown in brackets
Management review
In Brief Performance Partner to Society Governance Consolidated financial statements Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 22
End October 2023, the Foundation
acquired 34% of Ellab. This became the
fifth strategic ownership of the
Foundation. Ellab, together with
Ferrosan Medical Devices, make up our
two significant minority shareholdings.
Ferrosan Medical Devices
Ferrosan Medical Devices (FeMD) is an international
medical device company that develops and
manufactures medical devices used in surgical care.
FeMD’s biomaterial devices are gelatine-based
adjunctive haemostatic agents used by clinical
professionals in the operation room to control
intraoperative bleeding in a fast and effective manner,
allowing surgeons to carry out surgery.
The portfolio of haemostatic devices includes three
formulations, flowable matrices, sponges and powder.
The devices are sold under the trademarks SURGIFLO™,
SPONGOSTAN™ and SURGIFOAM™, and are all marketed
and distributed in more than 100 countries through
FeMD’s partnership with Ethicon, Inc. (part of Johnson
& Johnson).
In addition, FeMD develops and produces handheld
biopsy devices used by physicians for breast cancer
diagnostics. These are developed and distributed in
collaboration with a global partner.
Today, FeMD manufactures the second-generation
biopsy device at its manufacturing site in Poland.
Since 1947, FeMD has developed and manufactured
surgical haemostatic devices for use by healthcare
professionals. Today, FeMD has approximately 360
employees; 245 employees at the headquarters in
Søborg, Denmark, and 115 employees in Szczecin, Poland.
The Foundation has a 30% ownership stake in FeMD in
an ownership consortium with Kirk Kapital and ATP.
Ellab
Ellab is the market leading player within high-end
validation and monitoring solutions, as well as field
service & consulting to primarily life science customers
where accurate and complete documentation is
essential.
Ellab serves both small and large companies, including
the top 40 pharma and top 20 biotech companies in the
world. The company designs, develops and
manufactures high-precision equipment and software
for temperature, pressure and humidity validation and
monitoring.
Ellab has solutions for applications such as sterilisation,
freeze drying, environmental chamber testing,
depyrogenation, warehouse mapping, pasteurisation
and many more. The product portfolio comprises a
comprehensive range of wireless data loggers,
thermocouple systems, wireless environmental
monitoring systems, calibration equipment, software
solutions and accessories.
Ellab was established in Denmark in 1949. Today, Ellab is
headquartered in Hillerød, Denmark, and has a
worldwide presence, with R&D and production in
Denmark, and 24 sales and service centres and over 50
distributors around the globe. Ellab has close to 800
employees.
The Foundation owns 34% of Ellab in a partnership with
Novo Holdings.
Ferrosan Medical Devices and Ellab
Ferrosan Medical Devices’ Surgiflo kit
Ellab’s data logger and monitoring device
Management review
In Brief Performance Partner to Society Governance Consolidated financial statements Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 23
Invest generates returns with the
primary purpose of securing sufficient
reserves to protect the long-term
ownership of the Foundation’s
strategic ownerships and to maintain
philanthropic grant activities. The
financial investments are spread
across a diversified investment
portfolio.
2023 was a year with a vast array of geopolitical events
continuing to undermine world peace. This, combined
with global interest rates peaking at levels not seen for
more than 10 years followed by a sudden and significant
decline late in the year, made 2023 a year when
investors were constantly anticipating “something
breaking” in the economies.
Financial markets nevertheless showed great resilience,
with global equities yielding a total return of more than
20%. The result came in the aftermath of a turbulent
2022 with rocketing inflation, war, geopolitical
instability, increasing fears of recession and significantly
higher interest rates. Most of those worries subsided
in 2023.
A traditional ‘60/40 portfolio’ – which sees investments
allocated 60% to equities and 40% to bonds – would
have experienced a return of nearly 13% over the full
year, as both equity and bond prices experienced
substantial growth. Against this backdrop, Invest
delivered a return of 13%.
Equity returns were heavily impacted by steeply rising
technology stocks fuelled by potentially substantial
corporate productivity gains from the deployment of
generative artificial intelligence (GenAI), developed
primarily by mega-cap US IT companies.
Towards the end of 2023, markets saw evidence of
inflation finally receding, even as wars continued to rage
in hotspots around the world. Expectations shifted
towards inflation cooling even further in 2024, which
eased US central bank and hence investor worries about
the interest rate path and further escalated the “risk-
on” mode towards year-end. A soft landing for Western
economies is now the prevailing narrative for 2024.
Consumers are holding up well, helped by savings and
very low unemployment figures. The US labour market
remained extremely strong throughout most of 2023
but cooled off towards the end of the year, though
without any major spike in unemployment. Despite the
gloomy economic backdrop in Germany and France, in
particular, European labour markets proved resilient,
with historically low unemployment rates underscoring
market tightness. The energy price shock in 2022
triggered by Russia’s invasion of Ukraine reversed in
2023, lending an additional helping hand to companies
and consumers.
Return on the investment portfolio
Invest generated a return of DKK 2,832m in 2023, versus a
loss of DKK 1,430m in 2022. The return was very
satisfactory and primarily driven by listed equities, which
generated a return of DKK 2,247m or 21% – materially
better than the benchmark return of 18%. Consumer
discretionary and financial sector investments earned the
largest positive returns in absolute terms, while no
individual sector had any meaningful negative impact on
the year. FLSmidth delivered a total return of 15% and
hence contributed to absolute return.
The bond portfolio delivered a positive return of 7%,
better than the comparison benchmark portfolio, which
recorded 5%. Invest benefited from a hedge instigated in
2022 to lower bond duration in anticipation of higher
interest rates. The hedge was successfully closed in the
autumn.
Corporate debt/credit delivered a positive return of 11%,
which was also better than the benchmark portfolio yield
of 9%. The positive result was driven by distressed debt
investments, direct loans and the internally managed
high-yield corporate debt portfolio.
Private equity generated a total return of -1%. Real assets,
including real estate and woodland, generated a 0%
return. Infrastructure investments, Obel-LFI Ejendomme
A/S and the woodland investments of LFI Silva
Investments A/S contributed negatively to total return.
Investment strategy
Invest generates returns with the primary purpose of (a)
securing sufficient reserves to protect the long-term
future of the Foundation’s strategic ownerships; (b)
increasing philanthropic grant activities; and (c)
increasing the overall asset base.
Invest manages DKK 23bn, which is allocated to listed
equities (53%), credit (14%), bonds and cash (13%),
private equity (11%) and real assets (9%). Illiquid assets
represented 23% of the portfolio by year-end 2023.
Lundbeckfonden Invest
Invest gener
ated a return of
DKK 2,
832m in 2023, versus a
loss of DKK 1,430m in 2022
primarily driven by listed
equities, which
generated a
return of DKK 2,247m or 21%.
Management review
In Brief Performance Partner to Society Governance Consolidated financial statements Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 24
Invest Portfolio
The majority (70%) of the assets are managed internally
by the investment team. Real asset investments are
mainly invested via partnerships (Obel-LFI Ejendomme
A/S and LFI Silva Investments A/S), while private equity is
fully outsourced.
The investment philosophy is centred around a long-
term fundamental investment focus with a balanced
approach to risk, quality and valuation. All investments
undergo a thorough due diligence process and
investments are selected based on absolute return
potential and risk assessment.
Invest prefers quality companies whose revenues
undergo secular growth, driven by forces that will likely
be in place for an extended period. Examples include
energy transition, IT technology and healthcare. Invest
also seeks investments in quality cyclical companies
with deep intrinsic value.
Long-term investment returns
Invest entered 2023 with a cautious macro view and a
selective approach to risk taking. Many attractive long-
term investment opportunities have emerged post the
2022 equity market sell-off that led to a general risk-off
environment within several pockets of the equity
market. In 2023, Invest has taken advantage of these
opportunities and added quality exposure within cyclical
and defensive segments of the equity market.
Invest maintained its long-term track record in 2023
with annual total returns of 10% and 11% over three and
five years, respectively – materially higher than the
benchmark returns of 4% and 6%, respectively. The
accumulated five-year return for Invest is thus 67%
compared to the benchmark return of 36%.
The long-term returns endorse the investment
philosophy of investing in high quality companies across
different sectors with a goal of generating attractive
long-term return without compromising strong near-
term risk management.
Investment risk
Invest manages both short- and long-term investment
risks, ensuring adequate reserves to protect the long-
term future of the Foundation's strategic ownerships.
The main risk in relation to long-term returns is the
investment team's ability to select the right
investments and external managers. Invest has
developed a structured process and a solid fundamental
due diligence investment framework for each asset
class, with the key aim of opting out of weak
investments and understanding the risks in each
investment.
Portfolio construction takes into account the quality of
the investments, expected return potential, risk
assessment and overall knowledge level of the sector
and company. The portfolio is well diversified.
Short-term risks mainly relate to external risks such as
geopolitics and macro risk. Invest manages these risks
ad hoc and seeks to take advantage of excessive market
movements. In 2022-23, Invest successfully navigated
the turbulence in the bond market and generated
positive bond returns in both years, in part due to
overlay strategies that benefited from rising interest
rates.
Investment portfolio
Market value (DKKm)
Return (%)
Assets
31.12.2023
31.12.2022
2023
2022
Bonds and liquid funds
3,022
3,904
7.0%
2.2%
Credit etc.
3,245
3,468
11.2%
0.8%
Listed equities
12,266
10,765
21.5%
-11.7%
Private equities
2,554
2,321
-0.5%
-2.3%
Real assets
1,913
1,820
0.1%
6.5%
Total
23,000
22,278
13.0%
-5.9%
Return past five years (%)
19%
8%
24%
-6%
13%
-10%
0%
10%
20%
30%
2019 2020 2021 2022 2023
DKK 23bn
Management review
In Brief Performance Partner to Society Governance Consolidated financial statements Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 25
BioCapital is the Foundation’s
evergreen life science venture fund.
The fund creates and finances biotech
companies based on pioneering
research with the potential to deliver
significant innovation to patients in
areas of high unmet medical need.
2023 was the first full year of operations for
Lundbeckfonden BioCapital. It was also a year when we
began executing on our new strategy of increasing our
impact on the Danish Biotech ecosystem. The year thus
saw us investing in two new Danish start-up companies,
Notify Therapeutics and Dania Therapeutics, developing
novel treatments for infertility and cancer, respectively.
The past year saw the trends from 2022 continue, with
the downturn in the biotech market putting pressure on
company valuations and in turn complicating
fundraising activities for both public and private
companies across the biotech industry as a whole.
Despite these challenges our portfolio continued to
perform well, with several successful private as well as
public fundraisings and many positive clinical updates.
IO Biotech continued the successful execution of their
pivotal study in first-line treatment for advanced
melanoma, completing the enrolment of 380 patients in
November. The trial is expected to read out in 2025, with
an interim analysis of the first 225 patients in 2024. The
company also reported encouraging preliminary data
from an ongoing Phase II trial in patients with non-
small cell lung cancer and head and neck cancer at the
European Society for Medical Oncology (ESMO)
congress. To increase the runway, IO Biotech raised USD
75m in private placement with the participation of
existing investors including Lundbeckfonden BioCapital.
NMD Pharma built on last year’s positive clinical data in
myasthenia gravis by raising EUR 75m in a series B
financing round. During 2023, the company expanded
into additional neuromuscular indications by launching
a Phase II study in Spinal Muscular Atrophy (SMA) and
completing an observational study in Charcot-Marie-
Tooth disease.
Elsewhere in the local Danish portfolio, Vesper Bio and
Cytoki Pharma both successfully transitioned from
preclinical to clinical stage companies. Cytoki Pharma
initiated a Phase I study to evaluate its lead programme,
a long-acting IL-22 analog, in healthy volunteers with
and without obesity. Vesper Bio launched a Phase I
study to evaluate its lead asset VES001 in healthy
volunteers. VES001 is being developed for the treatment
of frontotemporal dementia (FTD), an area of great
unmet need.
Our international portfolio also reported good progress
as several companies met significant development
milestones including the launch of approved products,
listing on the public markets through initial public
offerings (IPO) and the initiation of clinical studies
which potentially could lead to FDA approval.
scPharmaceuticals followed up on their FDA approval by
launching FUROSCIX®, a self-administered, subcutaneous
loop diuretic for at-home treatment of congestion in
chronic heart failure. The company reported Q3 revenue
of USD 3.8m, thus tracking well within analysts’
expectations. The company is also working with the FDA
to explore expanding the label to include the more
severe Class IV heart failure indication as well as fluid
overload in patients with chronic kidney disease (CKD).
Lexeo Therapeutics bucked the market trend by
successfully completing a listing on the Nasdaq
exchange, raising USD 112m - one of only 21 successful
biotech IPOs in 2023. The listing followed a year of
robust progress in Lexeo’s portfolio of AAV-based gene
therapies. The company completed enrolment of a
Phase I/II clinical trial in Alzheimer’s disease and in
addition completed the dosing of the first cohort in a
Phase I trial in Friedreich ataxia (FA) cardiomyopathy.
Finally, Lexeo secured Fast Track and Orphan Drug
Designation for the second cardiovascular programme
in PKP2 Arrhythmogenic Cardiomyopathy (ACM), which
is expected to enter clinical trials in 2024.
Several other companies from BioCapital’s international
portfolio raised capital in 2023. Aura Biosciences used
their Nasdaq listing to raise USD 93m, while Enliven
raised USD 165m in a private placement in connection
with the reverse merger with Imara. The private
portfolio companies Enterome and VarmX each closed
new funding rounds, with VarmX raising EUR 30m with
the participation of existing as well as new investors,
and Enterome raising EUR 3m from the Leukemia &
Lymphoma Society’s Therapy Acceleration Program.
Aura, Akamis, Sorriso, Enterome and Trevi all provided
positive clinical updates from ongoing trials or initiated
important new clinical studies. Aura provided 12-month
follow-up data from their Phase IIb study in choroidal
melanoma, confirming the efficacy and safety seen in
earlier readouts. Building on the success of that study
they dosed the first patient in a registrational Phase III
trial in the same indication. Trevi also followed up on a
Lundbeckfonden BioCapital
In 2023, we demonstrated our
commitment to promoting
innovation in the local
ecosystem by making two new
investments and two large
follow
-on investments in
Danish companies. This
reflects the execution of
BioCapital’s strategy and is a
testament to the strength
and innovative potentia
l of
Danish biotech and academia.
Management review
In Brief Performance Partner to Society Governance Consolidated financial statements Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 26
successful Phase II study in chronic cough in idiopathic
pulmonary fibrosis (IPF) by launching a Phase IIb
dose range finding study in preparation for a pivotal
Phase III study. Enterome presented the first data from
their Phase I/II study in non-Hodgkin lymphoma
demonstrating early signs of mono-therapy activity and
initiated a study in metastatic colorectal cancer.
Meanwhile, Sorriso transitioned to become a clinical
stage company by initiating Phase I studies for their
lead candidate for the treatment of inflammatory bowel
disease (IBD). Last but not least, Akamis demonstrated
improved response rates compared to historical controls
in a Phase I study in rectal cancer combining their
oncolytic virus with radiotherapy.
It was not all positive news in 2023. Dysis Medical faced
significant challenges building commercial momentum
for their digital colposcope products throughout 2023
and in December Reneo announced that their pivotal
study in primary mitochondrial myopathies failed to
meet the prespecified endpoints.
Financial results
The net return for the year was DKK 772m, versus
DKK -565m in 2022. The result reflected an increase in
the valuation of the private portfolio driven by the
clinical progress and selected positive market
developments during the year which compensated for
the decrease in the value of the public portfolio.
BioCapital’s investments in new and existing companies
amounted to DKK 315m.
At year-end, the BioCapital portfolio comprised 20
companies, of which eight were listed. The fair market
value of the portfolio was DKK 2,886m at 31 December
2023, compared to DKK 1,682m at the end of 2022. The
complete portfolio is listed to the right and on the
following page.
Public Portfolio Companies
Aura is a clinical stage company developing a virus-like
drug conjugate (VDC) in ocular melanoma and bladder
cancer (AURA Nasdaq).
Enliven Therapeutics is a clinical stage company
developing best-in-class small molecule inhibitors of
BCR-ABL and HER2 for the treatment of solid tumours
(ELVN Nasdaq).
IO Biotech is a clinical stage biotech company
developing disruptive immune modulating anti-cancer
therapies (IOBT Nasdaq).
Lexeo Therapeutics is a clinical stage company
developing a broad pipeline of gene therapies for
genetically defined cardiovascular and central nervous
system diseases (LXEO Nasdaq).
Reneo Pharmaceuticals was developing a drug that
enhances mitochondrial function to treat rare
mitochondrial diseases. The company has reduced its
workforce (RPHM Nasdaq).
scPharmaceuticals markets subcutaneous furosemide
for heart failure diuresis and medicines for bacterial
infections delivered via an on-body infuser (SCPH
Nasdaq).
Spero Therapeutics is a clinical-stage company
developing treatments for serious rare orphan diseases
and life-threatening bacterial infections (SPRO Nasdaq).
Trevi Therapeutics is a clinical stage company
developing treatments for chronic cough in patients
with idiopathic pulmonary fibrosis and for pruritus in
prurigo nodularis (TRVI Nasdaq).
Management review
In Brief Performance Partner to Society Governance Consolidated financial statements Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 27
Private Portfolio Companies
Akamis Bio is a clinical stage company developing
immuno-oncology treatments for solid tumours using
their proprietary intravenously administered T-SIGn
virus platform.
CytoKi Pharma is a clinical stage biotechnology
company pioneering a new class of medicines to address
metabolic diseases and conditions characterised by
epithelial injury, such as inflammatory diseases.
Dania Therapeutics is a preclinical company developing
novel small molecule therapies to treat Acute myeloid
leukaemia (AML) and other life-threatening cancers.
Dysis Medical markets a high resolution digital
colposcope to help with the identification of biopsy sites
when cancerous and pre-cancerous cervical cancer
lesions are suspected.
Enterome is a clinical stage company pioneering the
development of novel microbiome-derived peptide
vaccines to treat a range of solid tumours and
lymphomas.
Folium Science is a company that develops feed
additives using CRISPR gene technology to eliminate
pathogenic bacteria in animal feed, combat food-borne
illness and reduce the use of antibiotics in livestock and
animal agriculture.
NMD Pharma is a clinical stage biotech company
developing small molecule treatments for
neuromuscular diseases.
Notify Therapeutics is a preclinical stage company that
aims to develop a first-in-class, non-hormonal treatment
for infertile women who do not benefit from standard
hormone therapy.
SNIPR Biome is a biotech company pioneering CRISPR-
based microbial gene therapies for metabolic diseases
and for precision killing of bacteria.
VarmX is a clinical stage company developing a reversal
agent to safely and effectively restore haemostasis in
case of bleeding or emergency surgery in patients
taking oral factor Xa inhibitors.
Vesper Bio is a clinical stage biotech company
developing therapies for frontotemporal dementia.
Sorriso Pharmaceuticals is a clinical stage company
developing GI restricted antibodies to treat IBD and
other inflammatory diseases.
Management review
In Brief Performance Partner to Society Governance Consolidated financial statements Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 28
In 2023, the Foundation continued its support of
outstanding biomedical research, with a strong
commitment to talent development and research in
basic and clinical neuroscience. The Foundation used a
wide range of funding types to support researchers at
different career levels and from different research fields.
Alongside research grants and prizes, the Foundation
supported activities to strengthen and facilitate
networks between scientists, as well as to increase
awareness about the brain and the importance of brain
health among the Danish population.
The total grant sum amounted to DKK 592m, versus
DKK 550m in 2022. The grant sum reflected the
commitment to the ordinary programmes. Of these
programmes more than DKK 110m was awarded to
research in psychiatric disorder.
Discussions are ongoing with Danish universities and
hospitals on larger initiatives to strengthen
infrastructures supporting translational research in
neurology, and strategies to develop biological and
clinical psychiatry.
The 2023 awards were distributed across five main
groups.
Grants supporting research in neuroscience
Grants in this category support research aimed at
solving a fundamental problem in neuroscience or
research into brain-related diseases. A total of DKK 178m
was awarded, including salaries for 208 full-time
equivalents. The grants were:
• LF Professors supports the very best neuroscience
researchers, thereby helping to build excellent
research environments and programmes in Denmark.
DKK 80m was awarded to three projects studying
pain, hydrocephalus, and ion pumps.
• LF Projects in psychiatry, such as Epi-Psych, VIA-19
and VIA-family, characterising the epidemiological,
developmental or treatment aspects of psychiatric
disorders were awarded DKK 88m.
• Establishing a molecular and cellular atlas for
glioblastomas was granted DKK 10m.
Grants supporting research with the potential
to benefit neuroscience
Grants in this category broadly support research or
technologies where the applicant can propose a
potential benefit for neuroscience and therapies for
nervous system disorders. A total of DKK 254m was
awarded, including salaries for 276 full-time equivalents.
The major grants were:
• LF Postdoc grants support postdoctoral scientists
who wish to strengthen their research development
through changes in research environment or topics.
DKK 41m was awarded to 17 postdocs, of which 6 bring
international experience to Denmark and 8 gain
international experience by studying outside
Denmark.
• LF Ascending Investigators are independent
researchers leading smaller groups with projects to
build the groups or redirect their research. DKK 68m
was awarded to 13 investigators (six professors and
seven associate professors). Four grantees used the
Grants & Prizes
The Lundbeck Foundation’s ambition is to make Denmark a
frontrunner in the field of neuroscience by funding Danish
-based
research that promotes an improved understanding of the brain as
well as better prevention, diagnosis, and treatment of brain disorders.
Th
e Foundation also supports activities to improve collaboration
between research and
business.
Total grants (DKKm)
5
92
Number of grants
15
4
Support for brain research (DKKm)
4
85
Number of full time employees funded
6
44
DKKm
Prizes 13
Talent development in biomedical science 86
Research benefitting neuroscience 254
Research in neuroscience 178
Science, education and communication 25
Other grants 36
Total grants in 2023 592
Other purposes include donations of DKK 196,200 to descendants.
Management review
In Brief Performance Partner to Society Governance Consolidated financial statements Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 29
new option in 2023 for an additional DKK 1m to
support international exchange.
• LF Experiments focuses on funding high-risk, ground-
breaking research ideas. DKK 63m was awarded to 32
projects.
• Pioneer Centres is an ambitious national programme
initiated by the Ministry of Higher Education and
Science to attract the very best researchers to
establish three to four world class research centres
specialising in artificial intelligence and
climate/energy. Pioneer Centres is a collaboration
between the Ministry, the Danish National Research
Foundation, Carlsberg Foundation, Lundbeck
Foundation, Novo Nordisk Foundation and Villum
Fonden. In 2023, the Lundbeck Foundation awarded
DKK 80m out of DKK 240m to ‘The Pioneer Centre for
Statistical and Computational Methods for Advanced
Research to Transform Biomedicine’: SMART-Biomed.
Grants supporting talent development in
biomedical and health-related science
Grants in this category support the development of
talented researchers in all aspects of biomedical and
health-related science. A total of DKK 86m was awarded,
including salaries for 138 full-time equivalents. The
major grants were:
• Early-Career Clinician Scientist grants aim to
support talented medical doctors who, concurrent
with their clinical specialisation, want to retain an
active research career. DKK 16m was awarded to eight
medical doctors and three of the projects were in
neuroscience (headache, psychosis and bipolar
disease).
• LF Fellows are talented, young researchers who wish
to establish or expand their own independent
research groups in Denmark. DKK 60m was awarded
to six scientists: one in neuroscience (role of sleep
architecture for cognition), and five in other areas
(implant rejection, cancer biomarkers, liver fibrosis,
single cell proteomics and bioinformatics).
Prizes
The Brain Prize is the world’s largest international
neuroscience prize, dedicated to scientists who have
made an outstanding contribution to neuroscience. The
DKK 10m Brain Prize 2023 was awarded to Professors
Michael Greenberg (US), Christine Holt (UK), and Erin
Schuman (Germany) for their discoveries of how the
synthesis of new proteins is triggered in different parts
of the neuron, thereby guiding brain development and
plasticity in ways that impact our behaviour for a
lifetime.
His Royal Highness Crown Prince Frederik presented The
Brain Prize to the 2023 winners at an awards ceremony
in Copenhagen.
Brain Prize outreach activities bring the outstanding
science behind each year’s Brain Prize to the scientific
community. Six webinars on ‘mRNA transport,
trafficking, localisation’ were organised and chaired by
the Brain Prize winners together with 15 other leading
scientists who provided in-depth insights. A series of
Brain Prize plenary lectures were also given at several
international meetings. A film collection covering the
winners’ scientific journey, patient case stories and
educational films was also produced.
The Scientific Enrichment Prize is a personal prize of
DKK 100,000, awarded in 2023 to Professor Nanna
MacAulay, Copenhagen University, for her systematic
approach to using diversity in her research group and
strong efforts to build an inclusive and diverse research
environment at the NeuroGrad PhD school at University
of Copenhagen.
The Young Investigator Prize of DKK 1m, for promising
researchers under the age of 40, was awarded to
Professor Tor Biering-Sørensen, Copenhagen University,
for his research on early diagnosis of cardiac
dysfunction using advanced imaging technologies and
his contribution to developing pragmatic randomised
trials.
Five Talent Prizes of DKK 300,000 each for promising
young researchers under the age of 30 were awarded to
postdoc Tenna Henriksen, Aarhus University Hospital
(colon cancer detection), PhD student Sia Viborg
Lindskrog, Aarhus University Hospital (sub-categories of
bladder cancer), MD and PhD Student Kristoffer
Grundtvig Skaarup, University Hospital Herlev &
Gentofte (detection of early signs of heart disease),
postdoc Connar Stanley James Westgate, Rigshospitalet
(headache disorder IIH), and MD and postdoc Amani
Meaidi, Danish Cancer Society (medical abortion and
contraception safety studies.
Professor Grith Lykke
Sørensen
Frontier Grant recipient
Professor Grith Lykke Sørensen PhD, DMSc, from
the University of Southern Denmark (SDU) has
together with her team discovered a mechanism
for pathological scarring (fibrosis) involving a
protein called MFAP4. Furthermore, they have
generated a novel drug that selectively blocks
this disease mechanism.
A unique feature of the proposed treatment is
that it prevents the initiation of fibrosis. In
contrast, the current drugs in development are
mainly reducing undue accumulation of lipids, a
known risk factor for fibrosis in the liver.
The Frontier Grant will progress the
groundbreaking research significantly closer to a
novel treatment for individuals suffering from
fibrosis.
There is reason to believe that as this treatment
principle evolves, it can be expanded to fibrosis in
other organ systems than the liver.
The grant amounts to DKK 5m over 18 months.
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Science education and communication
The Foundation supports science education projects at
high school level and above, which helps to promote a
better understanding of the brain and brain disorders,
as well as science communication projects to promote a
better understanding of brain disorders and their
consequences. In 2023, the Foundation granted DKK
25m to 14 projects, including the podcast Brainstorm
and Bloom, and the Hearts and Minds festival. In
addition to a centre for research in how to improve
technology understanding. The Foundation also
provided five scholarships for medical students to study
for one year at Stanford University or the University of
California, San Francisco, USA. In addition, more than 30
scholarships were awarded by seven scientific societies
through grants totalling DKK 6m.
Other activities
Frontier Grants serve a dual purpose by supporting
advanced research ideas to a stage where they can
become attractive for investors while at the same time
supporting the training of the lead scientists. Four
grants totalling DKK 19m were awarded to explore a
novel approach to treating acute myocardial infarction,
Huntington’s disease, fibrosis, and prostate cancer.
Neurotorium is an open, online platform launched in
2022 aimed at clinicians and educators of clinicians,
covering topics about the brain and its diseases.
The scientific content is governed by a board of
internationally renowned neurologists and psychiatrists.
The platform contains comprehensive slide decks
covering selected indications, including in 2023 a deck
on substance use disorder, videos, illustrations and a
three-dimensional brain atlas.
Neurotorium Bipolar Disorder Expert Meeting, Tarragona, Spain
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The Foundation pursues three
strategic agendas in its external
communication and public affairs
activities: the importance of brain
health, Denmark as a science hub in
healthcare, and enterprise foundations
as a responsible and sustainable
business ownership model.
In 2023, the Foundation put a strong emphasis on the
importance of talent development and diversity in the
scientific community both within the academic
institutions and in the business community. Attracting
and nurturing the next generation of scientists is an
integral part of a vibrant and world-leading scientific
research community and therefore also a precondition
for Denmark’s ambitions to become an even stronger
international science hub for healthcare and
neuroscience research.
Innovation in neuroscience and other scientific
disciplines requires diversity of thought and, in 2022, the
Foundation instituted the LF Scientific Enrichment
Prize. In 2023, the scientific enrichment prize was
awarded to Professor Nanna MacAulay for her work on
bringing expertise in play across different human and
professional fields, and bringing universities, hospitals
and industry together.
Active public voice
1) Folkemødet 2023 (The Democracy Festival of Denmark): The influence and role of foundations in Denmark with CEO, Lene Skole 2) CBS Corporate Governance Conference; the Foundation’s CEO shares insights
regarding the close link between purpose and Enterprise Foundations, November 2023 3) Brain Awareness Week March 2023 4) Folkemødet 2023: Session on memory training and brain health 5) Copenhagen
Culture night October 2023: Session on memory training and brain health 6) Folkemødet 2023: Who deserves the research funds with Science Director, Jan Egebjerg 7) Folkemødet 2023: Sharing perspectives
regarding the importance of international talents with the Foundation’s SVP Corporate affairs, Inge Berneke
1
2
3
4
5
6
7
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A credible and legitimate active public voice requires a
sound, fact-based approach based on knowledge and
insight. In 2023, the Foundation brought together
representatives from the Danish universities and
business communities in life science around the
importance of prioritising the discipline of talent
development and diversity in their organisations. This
led to the publishment of a comparative analysis, which
compares and shares learnings across the academic and
business communities regarding the work on talent
development and diversity.
Together with the Novo Foundation, the Foundation
also initiated a study into the current barriers
experienced by international highly educated talents
who move to Denmark to continue their career as
scientists. The study has been carried out by the local
think tank, Axcelfuture and the law firm Kromann
Reumert, who reviewed the current legal framework and
developed a list of potential legal solutions to current
problems. The study was published and launched in
January 2024.
The importance of talent development and diversity was
a key topic at ‘Folkemødet 2023’, where the Foundation
organised, facilitated and participated in multiple
discussions highlighting the importance of international
talent attraction as well as the need for prioritising
talent development and diversity as a key discipline in a
world-class innovative community.
Brain health was the underlying theme for the
Foundation’s two roundtable discussions with Danish
patient organisations in 2023. The Spring roundtable
2023 was centred around learnings from The Brain
Council in Norway (Hjernerådet) and the dialogue
between patient organisation and politicians around
brain health in Denmark. The Autumn roundtable 2023
was focused on the two ongoing government initiatives
which review the state of the nation in Danish
healthcare and also cover brain health topics. The
roundtable discussions will be continued in 2024.
During 2023, the Foundation also continued its efforts
to bring new insights and knowledge about brain health
to a broader audience in Denmark. ‘Memory’ was
therefore a key theme in the Foundation’s external
communication and was communicated broadly
through a range of events, articles, and interviews with
prominent sleep scientists.
Management review
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Lundbeck Foundation Annual Report 2023 Page 33
The Lundbeck Foundation’s risk
management framework provides a
systematic approach to identifying,
monitoring, managing and reporting
risks and opportunities in a changing
environment.
The Lundbeck Foundation strives for a reasonable
balance between value creation and risk exposure in its
work to deliver on its longer-term strategic targets.
Risk assessment is an important part of the
Foundation’s business procedures, allowing it to
respond appropriately to changing circumstances and
to integrate risk management into the development of
the Foundation’s strategy. The risk management
framework includes a ‘top-down’ as well as a ‘bottom-up’
approach to risk mapping, which identifies key risks that
the Foundation faces.
The most important risks relate to the business risks of
the Foundation’s strategic ownerships – in particular,
the subsidiaries – as well as the financial risks related to
its portfolio of other investments. Assessing and
mitigating these risks is important for long-term value
creation, as well as for the ability of the Foundation and
its subsidiaries to execute on the strategy.
As a foundation with significant positions in the Danish
business and research communities, reputational risk is
an important factor. In relation to grant-making, there
is a strong governance framework in place to cover
these activities, setting high standards designed to
protect the Foundation from excessive risk.
Risk assessment and management
As a business owner and investor, risks are a natural and
integral part of the Foundation’s activities. However, by
incorporating risk management at both entity and
group level into the risk assessment framework, and by
balancing its capital allocation, the Foundation
mitigates risk to what it considers to be an acceptable
level.
The Foundation is faced with several types of risks,
including business, operational, cyber and market risks –
including fluctuations in interest rates, share prices,
exchange rates and credit spreads – as well as
reputational risks. Through understanding of its
ownerships and of its own internal operations, other
investments and grant activities, the Foundation
aggregates the various risk factors and identifies the
most important ones in terms of probability and
potential impact.
A risk analysis report – including proposed mitigating
actions – is prepared and submitted biannually to the
Foundation’s Board of Directors. More frequently,
updates on exposure to risk factors, such as industry
and geographical concentrations, are submitted to the
Investment Committee, which meets on a quarterly
basis. The Foundation’s Management Team monitors
the development of current and potential risks on an
ongoing basis.
The overall risk level is assessed in the risk reports. The
Foundation has a long-term horizon for its activities,
and the current strategy spans until 2030. Similarly, the
Foundation takes a long-term view on potential risks
and risk management, spanning at least 10 years.
Diversification across the Foundation’s different
investments and activities is a central part of the
Foundation’s approach to risk management, and this is
adjusted continuously, depending on the risk
assessment, to ensure that there are sufficient financial
resources to support the Foundation’s activities.
The most recent risk assessment exercise resulted in
the identification of a range of strategic, operational,
financial, political and reputational risks that could
potentially pose a threat to the Foundation. A key
priority for the subsequent work has been to ensure
that no single risk has the ability to materially damage
the Foundation, and that the Foundation would be able
to continue its operations and strategy should any one
or more of the risk factors materialise. To ensure this is
the case, each of the risks identified has an assigned
owner who is responsible for actively managing and
mitigating the risk.
The key risks that have been identified are presented in
the table on page 35, together with details of the
mitigation measures that have been put in place.
Risks related to the strategic ownerships
Business and financial risks associated with the
operation and performance of the Foundation’s five
strategic ownerships, Lundbeck, ALK, Falck, Ferrosan
Medical Devices and Ellab, are most effectively managed
within each business. Consequently, the boards of
directors and management teams at each individual
company define their own risk management policies
and procedures.
The Foundation is represented on the board of directors
of each strategic ownership and monitors the business
performance of the companies closely. Descriptions of
each company’s approach to risk management are given
by each of the companies in their own annual reports.
Reports on business- and risk-related issues associated
with the strategic ownerships are provided monthly to
the Foundation’s Board of Directors.
Risks related to the Foundation’s other investments
The Board of Directors defines the Foundation’s
investment policy, while compliance with the policy is
monitored by the Investment Committee.
The Foundation manages the market risk of its
investments by having limits for its exposure to
individual asset classes and their underlying assets. This
policy covers the whole portfolio, including investments
by BioCapital.
To manage interest rate risk, limits for the duration of
bond investments are defined. Derivative financial
Risk manaement
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instruments, such as swaps, options and forward
contracts, are used for risk management purposes and
as an alternative to buying the underlying assets.
The investment policy governs the use of such
instruments regarding maturity, quantity and
counterparty requirements.
Weekly portfolio performance reports are prepared for
the CEO and detailed monthly reports are prepared for
the Board of Directors.
Finally, all investments must comply with the
Foundation’s environmental, social and governance
(ESG) principles. The portfolio investments are
monitored for issues related to ESG principles. An ESG
status report is reviewed and approved by the CEO and
the Investment Committee twice a year. In 2023, no
investments were identified as being in violation of the
ESG principles.
Risks related to IT security
In recent years, several major cyber-attacks have been
launched against companies and organisations around
the world.
Each of the ownerships and the Foundation rely on their
IT platforms to run their businesses and the Group
owns various types of intellectual property rights.
Consequently, the Group is a potential target for cyber-
attacks or industrial espionage, and it is a strategic
priority to continuously improve cyber-security.
As IT platforms differ across the Group, cyber-security is
managed by each company and the Foundation
separately. Each has programmes designed to improve
resilience against cyber-attacks. In addition, cyber-risk
awareness campaigns are conducted regularly
throughout each organisation to minimise risks
resulting from phishing emails and similar threats.
Risk reporting and management
The Foundation’s risk reporting and management
framework is illustrated in the figure to the right.
[Image text]
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Risks and Mitigation
Risk
Context
Mitigation
1. Distress in the Foundation’s strategic ownerships
The strategic ownerships account for 59% of the Foundation’s total net wealth
Poor performance, ultimately resulting in value destruction of the
Foundation’s shareholdings in the companies
Engaged ownership with a focus on:
• The overall strategy and key activities
• Board and executive management composition to ensure the right competencies
• A sound capital structure to support the strategy
• Good governance with delegation of duties
• Representation on the boards
• Diversification through several different companies
• The companies’ own risk management procedures and their mitigating actions
2. Research and development risk in pharmaceutical subsidiaries
Lack of a successful pipeline in pharmaceutical subsidiaries will limit long-
term growth in the companies and result in value destruction
High quality research and development with a focus on:
• New, innovative drugs in areas with unmet medical needs
• Ongoing evaluation of the product pipelines, regulatory requirements and product benefits
Active involvement through:
• Board and executive management composition to ensure the right competencies
• Representation on the scientific committees in the subsidiaries
•
A sound capital structure to support research and development
3. Financial market crisis effect on Invest
The financial investments account for more than 39% of the Foundation’s
total net wealth
Financial losses due to financial turmoil and possible economic recession
Diversified portfolio
Close monitoring of risks in
the portfolio and dynamic hedging and adjustment of exposure
Limits on market and concentration risk
s through investment policy
4. BioCapital – loss on investments
The portfolio companies account for 5% of the Foundation’s total net wealth
Unsuccessful development and/or commercial failure of portfolio companies
Close monitoring of risks in the portfolio and active participation on boards
Diversified investment in a broad portfolio of life science companies
Understanding the risk in portfolio companies and investing in tranches
5. Misuse of grants
Fraud or scientific misconduct by grant recipients
Transparent grants allocation processes
Peer reviews by external scientists
Status reports and budget follow
-ups
Code of conduct signed by grant recipients
6. Geographical exposure to the USA
Group exposure to the US market is estimated at 39% of total revenue
Exposure to the USA through the strategic ownerships and investments
Ongoing monitoring of exposure to the USA and adjustment of exposure
Hedging against exchange rate risk (USD) and financing of companies in USD
(strategic subsidiaries)
Lower
than benchmark exposure to the USA in the Foundation’s liquid investment portfolio
7. Price pressure in the healthcare sector
Group exposure to healthcare accounts for 62% of the Foundation’s total net
wealth
Regulation or market dynamic that lowers the prices for drugs
Limit on exposure to pharmaceutical companies in the Foundation’s liquid investment portfolio
Focus in pharmaceutical com
panies on:
• Innovation and generating strong clinical data
• Cooperation with healthcare authorities to document the value of the companies’ products
•
Stringent process for managing price changes
8. Legal and compliance
Non-compliance with applicable laws, industry standards and regulations
Loss, expiration or infringement of intellectual property rights
Regulatory changes may affect future profit and level of grants
Code of Conduct, Compliance Programs and training the employees
Whistle
-blower system
Internal reviews and monitoring of compliance with laws and
industry standards
Policies and processes to safeguard intellectual property rights
Close monitoring and evaluation of legislative proposals
9. IT security
Cyber-attacks and cyber-fraud
System down
-time
IT policies and procedures are in place to safeguard systems and data
Cyber
-defences are tested on a regular basis
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The Foundation strives to improve lives through
healthcare innovation with a specific focus on
neuroscience. Over the years, the Foundation has grown
to become one of Denmark’s largest enterprise
foundations with close to DKK 59bn under
management. The commitment to sustainable
development is rooted in the founding principles,
strategy, and business model of the foundation.
The Foundation’s societal impact can be seen
throughout all its activities. The Foundation’s
ownerships and investments generate dividends and
profits, which are channelled back to society. In 2023,
the Foundation awarded DKK 592m, of which DKK 485m
was dedicated to top-tier science and research with a
specific focus on neuroscience. The foundation
contributed a total of DKK 315m in investments to
the Danish life science ecosystem. The Foundation
Group has more than 33,000 employees, reaches more
than 19 million patients, and has spent more than
DKK 4,000m on research and development. The
Foundation’s position as a partner to society provides
unique opportunities and significant responsibilities,
demanding a high degree of openness and
transparency. As a long-term owner, the Foundation’s
goal is to support sustainable business development
and initiatives. Research has shown that companies with
enterprise foundation ownership operate with a
stronger focus on innovation and social aspects. This
includes talent development, employee engagement,
pay equality, and diversity.
The Foundation took several steps in 2023 to enhance
sustainability. A Sustainability Policy was published,
defining the guiding principles for the Foundation’s
work on sustainability and covering all areas. A new ESG
Governance framework for the Foundation was set up
anchored in the Board of Directors, with the CEO having
overall responsibility and with clear responsibilities
distributed throughout the organisation. The
Foundation’s sustainability work was strengthened
with new dedicated resources.
Sustainability
Sustainability is embedded in the Lundbeck Foundation’s purpose,
strategy, business model, and activities. With its 2030 strategy,
Bringing Discoveries to Lives, the Foundation articulated a clear
commitment to making a positive and sustainable impact on s
ociety.
With
the strategy, the Foundation will continue to drive sustainable
outcomes in health, innovation, economic growth, and good
governance
.
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2023 also marked the year in which the Lundbeck
Foundation started preparing for reporting on impact
and initiatives in line with the requirements of new ESG
regulation, namely the Corporate Sustainability
Reporting Directive (CSRD) which the Foundation will
follow for its 2025 reporting. The new set of regulations
comes with a number of challenges but is a necessary
step on the way to a more transparent and data-driven
approach to sustainability.
The Foundation’s commitment to society
The purpose, business model, and 2030 strategy of the
Foundation provide a clear foundation and direction for
the societal impact that is pursued within health,
innovation, economic growth, and good governance. The
material sustainability issues are reflected in the
following four Sustainability Development Goals (SDG)
to the right.
Activity: Strategic ownerships
The Foundation is the engaged owner of five
international healthcare companies. Group revenue
amounts to more than DKK 36bn, employing more than
30,000 employees. This role entails a responsibility to
drive sustainable economic growth, job creation, and to
be a responsible employer, providing a healthy working
environment. The Foundation stays committed to
supporting development through long-term ownership.
The goal is to help the companies become global leaders
within their fields, operating with a strong focus on
innovation and social aspects, such as talent
development, employee engagement, pay equality,
and diversity.
Sustainability is a key pillar of the Foundation’s
ownership model, and while decisions are ultimately
made by the companies’ boards and leaderships, the
Foundation encourages the companies to assess,
evaluate and report on relevant sustainability measures
and initiatives in their respective annual reports and as
part of the sustainability reporting. The Foundation uses
its Board representation to push sustainability agendas
and expects the ownerships to comply with the
sustainability policy’s minimum standards.
The reduction targets of the five strategic ownerships
are all approved by, in the process to be so, or in
alignment with the Science Based Targets initiative. This
provides the companies with a clearly defined path to
reducing greenhouse gas emissions. The Foundation
also leads initiatives to share knowledge and strategic
considerations across ownerships in order to promote
sustainable practices and learnings across companies,
such as access to health.
Activity: Financial investments
To fulfil our purpose and pursue our strategy, the
Foundation’s returns on investments ensure economic
robustness while enabling increasing and stable
distribution of dividends to society through grants and
partner activities.
The Foundation’s investment decisions are made based
on the view that companies that act responsibly and
ethically create important financial value and are
therefore relevant investment targets. The investment
policy guides the Foundation’s approach to asset
management, and integrates environmental, social and
governance (ESG) factors into decision-making and due
diligence. All financial investments must comply with
the Foundation’s ESG principles, and screening is
conducted twice a year.
Activity: Biotech investments
By investing in people, businesses, and science at the
frontiers of their fields, with the aspiration of pushing
the boundaries of current insight and knowledge and
identifying the health solutions of tomorrow, the
Foundation invests in the future of healthcare. One of
the Foundation's ambitions is to pioneer innovations
and bring new treatments to patients and their
relatives. This requires a dynamic biotech industry with
seamless collaboration between the scientific and
business communities.
Supporting the growth of Danish life science while
contributing to both patient health and sustainable
economic growth is at the core of the Foundation’s
collaboration with its investments. Through new
investments and the existing portfolio of 20
international and Danish life science companies, the
Foundation supports innovation in healthcare as well as
ensuring the Foundation’s economic robustness and
continuing grant activity.
The Foundation identifies companies and teams with a
relevant commercial potential that can solve unmet
medical needs. By engaging in a proactive approach
combining guidance, policies, advisory, and resource
allocation, the Foundation works to embed sustainable
The Foundation’s philanthropic and
commercial activities
, developing top-tier
neuroscience and leading healthcare
companies, supports SDG 3
- especially sub-
target 3.4 regarding treatment of non
-
communicable diseases and mental health.
As part of its engaged ownership and
responsible asset management, the
Foundation
contributes to SDG 8 through
the sub
-targets 8.1 - GDP growth - and 8.5 -
Decent work for all men and women.
Long
-
term ownerships, biotech investments,
and support for collaboration in research
are
key components of the Foundation’s
impact on society, with a clear link to SDG 9
and sub
-target 9.5 of encouraging
innovation and research development.
The
footprint of the Lundbeck Foundation
is primarily defined by the companies it
owns, the investments it makes, and the
recipients of its grants. The basis for
promoting sustainable development is good
governance in line with SDG 16, contributing
to effectiv
e, accountable, and inclusive
organisations.
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practices in the companies’ early commercial
development.
The Foundation is currently developing an integrated
sustainability programme to strengthen collaboration
on strategic sustainable development in life science
investments.
Activity: Supporting new knowledge
The number of people suffering from brain diseases is
growing globally and affects over 3 billion people around
the world, with devastating personal consequences and
significant socio-economic effects. Despite the severe
health situation and the far-reaching societal
challenges, brain health remains an under-prioritised
scientific research area, and the world lacks biomedical
knowledge about the brain.
The Lundbeck Foundation funds outstanding scientific
contributions and new biomedical and health science
research talents. In 2023, DKK 485m, or 82% of the total
grants, was dedicated to neuroscience at all research
levels. This resulted in research ranging from studies on
psychoses to neurogenerative disorders with more than
650 scientific publications. To support research that
may not only result in a better fundamental
understanding of the brain but also provide treatments
for patients, the ability to measure and document grant
impact is now integral to the Foundation's grant
requirements, contributing to the translation from
scientific research to patient impact.
Activity: Disseminating knowledge
Bringing science to patients’ lives requires not only
outstanding new knowledge, but also the dissemination
of knowledge to clinicians, patients, business, and the
wider society, as well as strong collaboration between
research and business to bring new treatments to
patients.
In 2023, the Foundation’s online platform, Neurotorium
- which provides curated free educational material on
neurology and mental diseases intended for clinicians
and educators – reached more than 190,000 active users
from a total of 181 countries.
In 2023, four Frontier Grants were awarded to scientists
working on early commercial endeavours to bring new
treatments to patients within the areas of CGRP
(migraine), Huntington’s disease, liver fibrosis, cardiac
diseases, and more.
Activity: Improving conditions for the life
science ecosystem
The Foundation aims to build partnerships that can
support the Foundation’s goal of driving positive change
throughout society. As a partner to society, the
Foundation has a responsibility to be an active voice.
The aim is to contribute to the development and
internationalisation of a vibrant Danish healthcare
research and business culture while improving society’s
understanding of the brain and its diseases.
The Lundbeck Foundation works to improve the
academic and public understanding of the brain and to
destigmatise patients with brain diseases. This supports
the well-being of patients with brain disorders and their
relatives while reducing the large cost to society of brain
diseases.
By pushing for better research conditions in Denmark,
the Foundation works to strengthen Denmark’s position
as a research and business hub in the international
healthcare community. Through collaboration between
business and science, active talent management, access
to funding, and more, the Foundation supports the
development of new research talents and fosters new
discoveries and treatments.
The enterprise foundation model links the worlds of
business and philanthropy and has underpinned and
matured some of Denmark’s largest and globally
successful companies. While the model is widespread in
Denmark, the general awareness of foundations - and in
particular the effects of the long-term ownership model
- is low. The Foundation works continuously to grow and
broaden the public’s knowledge of enterprise
foundations and their unique ability to combine
financial and societal value.
Other ESG initiatives
Reducing greenhouse gas emissions
Climate change is among the most important issues
facing the planet. While the Foundation’s strategic focus
is on health and innovation, the Foundation recognises
the shared responsibility to live and promote
environmentally sustainable practices. The Foundation’s
climate footprint is primarily driven through scope 3
activities, but initiatives on heating, transportation, and
resource management have nevertheless been taken to
tackle scope 1 and 2.
The energy efficiency of the Foundation’s office building
remains a continuous focus area, with solar panels now
contributing to 18% of the Foundation’s electricity use.
Focusing on emissions from airline travel emissions as a
starting point, a 2022 baseline of 152 tonnes in CO2
emissions was established. In 2023, the Foundation
purchased high-quality carbon offset credits based on
carbon removal projects to compensate for these
emissions, and this will continue in the years to come.
Additionally, the Foundation took steps to limit the
emissions of grant holders by instituting restrictions on
travel budgets for some of its grants. However, as
international collaboration remains a key element in all
scientific discovery projects, grant recipients’
international travel and collaboration remain an
important priority for the Foundation’s grant
administration.
Gender diversity
The Lundbeck Foundation presents its Statutory Report
cf. Section 99b of the financial statements in line with
the section’s purpose of ensuring that all Danish
companies of a certain size have a diversity policy. The
Lundbeck Foundation is committed to building gender
equality and diversity and inclusion across all areas.
The Foundation’s Board of Directors comprises one
woman and six men, excluding employee
Management review
In Brief Performance Partner to Society Governance Consolidated financial statements Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 39
representatives. Hence, the gender balance is not in
accordance with the guidelines on gender equality
issued by the Danish Business Authority (‘Guidelines on
target figures, policies and reporting on the gender
composition of management’).
When electing new members to the Board of Directors,
the Board strives to ensure diversity in competencies as
well as gender. The Board will continue to pursue equal
representation in the coming elections. This was also
the case in 2023.
In the short term, the Board of Directors strives towards
complying with the guidelines by having at least two
members of each gender among the seven members
elected according to the statutes. Currently, the board
expects this target will be realised by no later than 2027.
In the day-to-day operations, the management
members of the Lundbeck Foundation and
Lundbeckfond Invest A/S operates as one team. The
Management Team comprises seven members including
the CEO and counts two women and five men.
Management members employed by the Foundation
comprises of four persons with equal gender
representation. In total, the two entities count 23
females out of a total of 47. Diversity and inclusion will
remain focus areas for the Foundation in the years to
come.
Since the Foundation has less than 50 employees, it falls
below the employee threshold in section 99b, and
therefore no additional reporting is required.
In 2023, the Foundation awarded 51% of its grants to
women, while additional measures aim to promote
diversity in general in its grants administration. This was
spearheaded by the launch of the first annual LF
Scientific Enrichment Prize, established in 2021. This
prize celebrates science leaders at Danish universities
who champion diversity and inclusion in order to
develop creative solutions to complex scientific
problems. The prize is accompanied by the Scientific
Enrichment Call, to support new initiatives harnessing
and promoting diversity for the benefit of scientific
progress and culture.
The diversity focus was also reflected in the
Foundation’s three subsidiaries, each of which has
defined gender-balance targets for its board of
management. Falck’s board of management consists of
40% women. Lundbeck’s and ALK’s board of
management and their direct reports consist of 35%
and 42% women, respectively. Furthermore, Lundbeck,
ALK and Falck reported individual targets in their 2023
annual reports and defined individual policies
concerning gender balance at other management levels.
ESG Governance at the Lundbeck Foundation
Good governance is central to integrating sustainability
considerations into day-to-day business decisions and
strategy. As both owner, investor and philanthropist, the
Lundbeck Foundation has many opportunities and a
responsibility to promote sustainable practices both
inside and outside its organisation. The Foundation
does this with a clear governance model based on four
key principles (see next page for more information):
• Compliance with Danish recommendations on good
governance
• Board director independence
• Transparency in reporting and grant decisions
• Internal checks and balances in decision-making
In 2023, the Lundbeck Foundation implemented a clear
ESG governance-framework that is anchored in the
Board of Directors with the CEO having overall
responsibility and with clear responsibilities distributed
throughout the organisation.
Moreover, the Foundation has developed six policies to
guide key activities: grant administration, investments,
communication, tax, remuneration and sustainability
policy. The sustainability policy was adopted in 2023 and
applies to the Foundation, grant recipients, investments,
and ownerships, encouraging the strategic ownerships
and direct investments to pursue ambitious
sustainability agendas. The goal is for the Foundation to
fulfil a role in business and society in a way that is
environmentally, socially, and financially sustainable. All
policies can be found on the Foundation’s website. The
Foundation has also implemented a whistleblower
system, which can be used by external and internal
parties in case of concerns involving legal or other
serious risks. The whistleblower system can also be
accessed via the Foundation’s website. No cases were
reported in 2023.
Gender diversity in the Lundbeck Foundation Target 2027 2023 2022
Members of the Board of Directors 7
7 7
Board of Directors, underrepresented gender 29% 14% 29%
Members of the Management Team
7 7
Management Team, underrepresented gender
29% 29%
Underrepresented gender in the Lundbeck Foundation and Lundbeckfond Invest A/S -
reported as one unit
46% 44%
Learn more about sustainability at
the Lundbeck Foundation Group
For more information on the Lundbeck Foundation
’s impact as well
as
important developments in 2023, please refer to the Foundation’s
Sustainability Report 202
3
(
https://www.lundbeckfonden.com/en/sustainability).
This report is the Lundbeck Foundation’s statutory statement on
sustainability in accordance with sections 99a and 99d of the Danish
Financial Statements Act.
For information about Lundbeck, ALK and Falck’s approaches to
sustainability, please visit their websites.
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Lundbeck Foundation Annual Report 2023 Page 40
The Lundbeck Foundation values
transparency and integrity and
operates with a clear governance
model and relevant policies that
define the operating model for the
Foundation’s broad range of
commercial investments and
philanthropic grant activities.
Enterprise foundations play an important role in Danish
society. As majority owners of some of Denmark’s
largest business corporations, but also a significant
philanthropic contributor, enterprise foundations can
influence social and economic development in Denmark.
Such influence comes with responsibility.
The Foundation is committed to transparency and has
defined a clear governance model that seeks to comply
with two sets of principles issued by two Danish
governance committees. Firstly, The Committee on
Foundation Governance, which issues recommendations
for the governance of enterprise foundations. Secondly,
the Danish Committee on Corporate Governance, which
guides the listed companies in Denmark. As an
enterprise foundation and the majority owner of two
listed companies, both sets of recommendations are
relevant and used as guiding principles by the
Foundation.
The Foundation follows the recommendations issued by
The Committee on Foundation Governance, with two
exceptions:
• Board members’ tenure: In accordance with the
statutes of the Foundation, Board members serve for
one year, which reflects the rules issued by The Danish
Committee on Corporate Governance rather than the
rules issued by The Committee on Foundation
Governance, which recommends a tenure of two to
four years.
• CEO bonus model: The Board of Directors has
decided to incorporate a bonus model into the
remuneration of the CEO. The bonus model is based
on several elements, including the financial results of
the subsidiaries and the Foundation’s financial
investment activities. The bonus elements are
determined to ensure alignment between the CEO’s
remuneration and the long-term development of the
Foundation Group.
For a full overview of the Foundation’s compliance with
the Recommendations on Foundation Governance, cf.
section 77a of the Financial Statements Act, please use
the following link:
(https://www.lundbeckfonden.com/en/foundationgovern
ance).
The Foundation follows the recommendations issued by
The Danish Committee on Corporate Governance where
relevant, with two exceptions:
Governance
The Lundbeck Foundation’s four governance principles
Compliance
• As an enterprise foundation, the Foundation strives to comply with two sets of
recommendations:
1) Recommendations on Foundation Governance issued by the Danish Committee
on Foundation Governance
2) Recommendations on Corporate Governance issued by the Danish Committee
on Corporate Governance
• Where the Foundation does not comply with these recommendations, this is
explicitly stated and explained
Independence
• The Foundation is headed by the Board of Directors. Seven Board members,
including the Chair, are independent. Four Board members are elected by
employees in the subsidiaries
• Former executives of the Foundation and its subsidiaries cannot be appointed to
the Foundation’s Board of Directors
• Only one Board member elected according to the statutes can hold board
memberships in each individual subsidiary of the Foundation
• The Foundation’s Chair cannot hold board membership positions in the
Foundation’s subsidiaries
Transparency
• The Foundation publishes its annual accounts in alignment with listed companies
• All key policies and governance documents are made public on the Foundation’s
website
• Major decisions on philanthropic grants are communicated proactively via the
website, social media and the media
Checks and balances
• The Foundation’s organisation and key processes are designed to prevent the
concentration of decision-making power
• The majority of all grant-making decisions are subject to external reviews by
international experts to ensure appropriate quality levels are met
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• Diversity policy: The Foundation has not formulated
a concrete diversity policy, but principles and priorities
are stated in the Sustainability Policy, which is
available on the Foundation’s website.
• Audit Committee and internal audit function: As an
independent Foundation with no shareholders,
financial information is only shared in the Annual
Report but is complemented by its subsidiaries, which
share information on a quarterly basis. Further, the
Foundation has chosen not to have an audit
committee or internal audit function.
For a full overview of the Foundation’s compliance with
the Recommendations on Corporate Governance, please
use the following link:
(https://www.lundbeckfonden.com/en/corporategoverna
nce).
The Foundation’s governance principles are described
more fully on the Foundation’s website and in the box
on the previous page.
The Board of Directors
The Lundbeck Foundation is managed by the Board of
Directors in collaboration with the CEO. The Board
members are presented on pages 45-46.
The Board’s primary responsibilities are to:
• Decide the Foundation’s strategy
• Make decisions of major significance or of an
exceptional nature
• Make final decisions on the allocation of grants
• Supervise the organisation to ensure the Foundation
is managed appropriately and in accordance with
applicable laws and the Foundation’s statutes
• Approve the Foundation’s policies for investments,
communication, remuneration, etc.
• Appoint the Foundation’s CEO
The Board of Directors meets a minimum of four times
each year and holds an annual seminar to review,
discuss and refine the strategy.
The Board has set up two committees and the Grants
and Prizes Panel with members from the Board of
Directors to prepare the meetings of the Board of
Directors. The two committees are the Research and
Prize Committee and the Investment Committee. The
two committees and the panel meet on a regular basis
to prepare and discuss issues related to the
Foundation’s grants and prizes, and investments,
respectively.
Active involvement in strategic ownerships
The Foundation is long-term strategic shareholder of
five companies: Lundbeck, ALK, Falck, Ferrosan Medical
Devices and Ellab. It monitors their performances and
contributes to value creation as a long-term owner
exerting influence through its representation on the
companies’ boards.
As stated previously, the Foundation has a strong focus
on good governance and the independence of board
members. Please see page 40 for a full description.
Board member’s attendance at meetings in 2023 Board meetings
Investment
Committee
meetings
Research
and Prize
Committee
meetings
Grants and
Prizes Panel
meetings
Steffen Kragh, Chair of the Foundation and Lundbeckfond Invest A/S
and member of the Investment Committee
●●●●●●●●
●●●●●●
Peter Schütze, Deputy Chair of the Foundation and Lundbeckfond
Invest A/S and member of the Investment Committee
●●●●●●●○
●●●●●●
Lars Holmqvist, Chair of the Investment Committee
●○○●●●●●
●●●●●●
Michael Kjær, member of the Research Committee
●●●●●●●●
●●●●●●●●
●●
Susanne Krüger Kjær, Chair of the Research Committee since 27 March
2023
●●●●●●●●
●●●●●●●●
●●
Svend Andersen, member of the Investment Committee
●●●●●●●●
●●●●●●
Thomas Mears Werge, member of the Research Committee since 27
March 2023
●●●●●●●●
●●□●□●
●
Henrik Sindal Jensen, employee representative from H. Lundbeck A/S
●●●●●●●●
Katja Barnkob, employee representative from ALK-Abelló A/S
●●●●●●●●
Mikkel Helmer Nielsen, employee representative from Falck A/S
●●●●●●●●
Morten Egholm Aagaard, employee representative from Falck A/S
●●●●●●●●
Gunhild Waldemar, former Chair of the Research Committee, stepped
down on 27 March 2023
●●●●●●●●
●●●●●●●●
●●
●
Attended
○
Did not attend
□ Conflicted
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Lundbeck Foundation Annual Report 2023 Page 42
Grant governance
The Board of Directors has established a Research and
Prize Committee and appoints three committee
members from among its members elected according to
the statutes. The Committee meets four times a year or
as required by special circumstances.
The basic criteria for the allocation of research funding
are the scientific content of the application, the
qualifications of the applicant, and the academic
environment at the host institution, all of which must
be of a high international standard.
The Lundbeck Foundation seeks to ensure the
consistent and equal assessment of all applications.
Consequently, all significant applications must be peer
reviewed by experts. In addition to the Research and
Prize Committee, the Board of Directors has established
the Selection Committee to oversee The Brain Prize – as
well as four permanent evaluation panels: the Grants
and Prizes Panel, the Talent Panel, the
Internationalisation Panel and the Scientific Enrichment
Panel. Please see page 44 for information about the
committees and panels.
Furthermore, ad hoc evaluation panels with
international experts are established as required to
assess personal and strategic applications. The
members of the committees and panels must comply
with the Foundation’s impartiality rules.
The Research and Prize Committee and the Grants and
Prizes Panel report to the Board of Directors. The
Selection Committee for The Brain Prize reports to the
Board of Directors through the Research and Prize
Committee to ensure that its recommendations comply
with the provisions for The Brain Prize.
The Board of Directors decides on the allocation of
grants in accordance with statutory requirements.
However, the Foundation has developed a model that
has been approved by the Danish Business Authority
whereby the Board, as part of its decision-making on the
allocation of grants, can issue a grant mandate to a
panel formed by the Board of Directors to implement
the Board’s grant decisions.
The following panels allocate grants under a grant
mandate:
• The Talent Panel evaluates LF Postdocs, LF Clinical
Postdocs, LF Ascending Investigators and LF
Experiments
• The Internationalisation Panel evaluates scientific
meetings and conferences, visiting professorships and
senior researcher sabbaticals
The Board of Directors has also issued a grant mandate
to the CEO to implement the Board’s decisions on
Frontier Grants.
In general, assessment procedures for applications and
recommendations are adjusted on an ongoing basis to
accommodate the development and implementation of
new initiatives.
Distribution of responsibility
The Senior Vice President, Grants & Prizes, Director of
Science, is responsible for managing day-to-day
operations in the Grants & Prizes department.
The Board of Directors approves all of the Foundation’s
prizes before they are awarded.
Investment governance
The Board of Directors has established an Investment
Committee and appoints four committee members
from among its members elected according to the
statutes. The Committee meets four times a year or as
required by special circumstances.
The Committee is responsible for preparing decisions
and recommendations for consideration and approval
by the Board of Directors, and for ensuring that the
Board of Directors is informed of all material matters.
Supervision of the Foundation’s investment activities is
delegated to the Investment Committee in accordance
with the investment policy, which is described in the
Risk Management section on page 33.
Policies
Each year, the Board of Directors discusses and approves a
number of policies which are a vital part of the framework for the
Foundation’s activities.
Please find the Foundation’s policies at the Foundation’s websi
te:
https://www.lundbeckfonden.com/en/policies.
Management review
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Lundbeck Foundation Annual Report 2023 Page 43
Statutory report cf. section 77b
of the Financial Statements Act
In accordance with the statutes of the Lundbeck
Foundation, the Foundation has two primary objectives:
a. To consolidate and expand the activities of the
Lundbeck Group
b. To make distributions for the purposes mentioned
in article 6 of the statutes
At the annual strategy seminar, the Board takes a
position on the overall strategy and grant policy. The
grant objectives of the Foundation are divided into the
following categories:
• Social causes
• Research
• Cultural purposes
• Relatives of the Founder
• Employees of the Lundbeck Group
• Subsidiaries
The Foundation may, in accordance with its statutes
prescribed charitable objectives, donate grants to a wide
range of different charitable purposes, and the
Foundations' founder has granted great flexibility to the
Board of Directors to decide upon the Foundation's
grants, including to decide upon which of the charitable
purposes to support, as well as the individual donation
terms. The Board of Directors therefore each year
carefully considers which grants are to be made,
including which of the charitable categories that are to
be supported in light of the flexibility that the
Foundation's statutes provides.
The grant objectives listed under section 6 in the
statutes are categorised as follows:
Grant policy
Statutes
Grant objective
Article 6a
(Relatives of the Founder)
The Foundation may make grants to descendants of the parents of the founder and her spouse.
Article 6b (Employees of the Lundbeck Group) The Foundation may provide financial support to, and otherwise make distributions for the benefit of, existing and former employees of the
Lundbeck Group, including for training and education, for holidays and for holiday purposes. In so far as there is no need in each individual case to
make distributions at any other time of the year, such distributions will only be made once a year on 20 July, which is the birthday of the deceased
Mr Hans Lundbeck, manufacturer.
Article 6c (Research) The Foundation may grant honorary awards to physicians, scientists and others.
Article 6d (Research) The Foundation may grant support for scientific purposes, primarily for specific projects.
Article 6e (Subsidiaries) The Foundation may support special research projects within the Lundbeck Group.
Article 6f (Research) The Foundation may grant support to hospitals and for disease prevention.
Article 6g (Research) The Foundation may provide support for training and education in the widest sense of the words, if relevant, by way of interest-free loans.
Article 6h (Research) The Foundation may make grants for nurses.
Article 6i (Social causes) The Foundation may distribute up to 3% of the profit for the year, before tax, less retained earnings, in subsidiaries and associates, including LFI a/s,
for the support of old and/or sick people, as well as those in need.
Article 6j (All categories) The Foundation may support other purposes, as decided by the Board of Directors. However, support for such purposes may only account for 25%
of the total annual distributions in each calendar year.
Management review
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Lundbeck Foundation Annual Report 2023 Page 44
The aim of the grant activities is to fulfil the
Foundation’s grant strategy as based on the grant
objectives set out in the statutes’ section 6. The grant
strategy is an integral part of this grant policy.
The Board of Directors has overall responsibility for the
allocation of all grants. The Board of Directors has
decided that the previously mentioned objectives should
be met mainly through support for research in
biomedicine with a focus on strengthening Danish
neuroscience. The Board of Directors may decide on
grants based upon recommendations from
committees/expert panels or issue a grant mandate to
an expert panel that will make the final decisions within
certain grant programmes. Grants for the support of
research are primarily awarded to projects invited
through open calls for applications. Grants may also be
awarded without calls for applications.
Committees
To facilitate grant and prize activities within the
aforementioned categories, the Foundation has
established two committees that serve as advisory
bodies and submit recommendations for decisions to
the Board of Directors.
Research and Prize Committee
This committee comprises the three members of the
Board of Directors who are appointed for their research
expertise according to the statutes. The CEO and the
Senior Vice President, Grants & Prizes, Director of
Science, neither of whom are members of the Research
and Prize Committee, assist this committee. The
members of the Research and Prize Committee, who are
also members of the Grants and Prizes Panel (see
below), are tasked with the following:
• Advising and submitting recommendations for
decisions to the Board of Directors regarding
applications, prize nominations and strategic research
policy issues
• Supervising the implementation of the Foundation’s
strategy within grants and prizes
The selection committee for The Brain Prize
The selection committee for The Brain Prize reviews the
nominations for The Brain Prize. Its members, all of
whom are external and independent of the Foundation,
represent the highest possible level of expertise within
the field of brain research, bringing to the committee
relevant and comprehensive knowledge about the
international scientific world.
Expert panels
The Foundation has set up four expert panels to
evaluate applications and make decisions on grants.
The Grants and Prizes Panel
This panel comprises the three members of the Board of
Directors appointed for their research expertise
according to the statutes as well as three external
experts from within the field of neuroscience. The panel
evaluates applications for LF Fellows, LF Professors and
LF Collaborative Projects, and submits
recommendations for decisions to the Board of
Directors.
The Talent Panel
This panel comprises 14 external experts spanning the
field of biomedical research. The panel evaluates
applications for LF Postdocs, Early-Career Clinician
Scientist grants, LF Ascending Investigators and
LF Experiments. The panel makes decisions on grants
according to a grant mandate issued by the Board of
Directors.
The Internationalisation Panel
This panel comprises two of the three members of the
Board of Directors appointed for their research expertise
according to the statutes as well as the Senior Vice
President, Grants & Prizes, Director of Science, and the
Senior Grant Manager. The panel evaluates applications
for meetings, visiting professorships and senior
researcher sabbaticals. The panel makes decisions on
grants according to a grant mandate issued by the
Board of Directors.
The Scientific Enrichment Prize Panel
This panel comprises three members with experience in
handling diversity policies in a variety of research
environments. The panel evaluates nominations for the
Lundbeck Foundation Scientific Enrichment Prize and
submits a recommendation for approval by the Board of
Directors.
General terms and conditions
for research grants
All grant recipients must comply with the Lundbeck
Foundation’s General Terms and Conditions for
Research Grants.
The Foundation expects researchers who receive
funding to conduct their research according to
recognised codes of Good Research Practice, including
the Danish Ministry of Higher Education and Science’s
Code of Conduct for Research Integrity, the Medical
Research Council’s Good Research Practice, and the
International Society for Pharmacoepidemiology’s
Guidelines for Good Pharmacoepidemiology Practice.
This also applies to interactions with other researchers,
the collection, generation and analysis of data,
applications for research funding, the publication of
research results, and the recognition of direct and
indirect contributions by colleagues, partners and
others.
It is a prerequisite that researchers who receive funding
from the Lundbeck Foundation are affiliated with
institutions that have their own published codes and
guidelines for Good Research Practice, and that grant
recipients comply with such guidelines. In addition, it is
a prerequisite that these institutions have formally
described procedures that must be adhered to when
handling any suspicion of scientific dishonesty.
To be eligible for a grant from the Foundation, the grant
recipient and their host institution, as well as
researchers and third parties affiliated with the research
project, must also comply with all laws and rules
relevant to the research project.
Management review
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Lundbeck Foundation Annual Report 2023 Page 45
Board of Directors
Steffen Kragh
C
hair
Considered independent
Born 1964
Male
Danish
Elected 2013
Peter Schütze
D
eputy chair
Considered independent
Born 1948
Male
Danish
Elected 2015
Lars
Holmqvist
Considered independent
Born 1959
Male
Swedish
Elected 2015
Michael Kjær
Considered independent
Born 1957
Male
Danish
Elected 2016
Board committee(s)
Member of the Investment Committee
Member of the Investment Committee
Chair of the
Investment Committee
Member of the Research and Prize Committee
and
Shareholdings
20,000 B
-shares in H. Lundbeck A/S and 8,000 shares in
ALK
-Abelló A/S
1,360 A
-shares and 5,440 B-shares in H. Lundbeck A/S and
4,000 shares in ALK
-Abelló A/S
75,000 B
-shares in H. Lundbeck A/S
200 shares in ALK
-Abelló A/S
Other board and
management positions
·
President & CEO of Egmont Foundation and Egmont
International Holding A/S
·
Chair of companies in the Egmont group
·
Deputy chair of Tryg A/S and Tryg Forsikring A/S
·
Chair of DSB SOV, Nordea-Fonden and Tietgenfonden.
Chair of the Investment Committee at the Danish SDG
Investment Fund K/S
·
Member of the boards of Falck A/S, Axcel Future and
Gösta Enboms Fond
·
Member of The Systemic Risk Council
·
Chair of Dronning Margrethe II's Arkæologiske Fond
·
Chair of the board of Biovica International AB
·
Member of the boards of H. Lundbeck A/S, ALK-Abelló
A/S, Vitrolife AB (Sweden) and Life Healthcare Group
Holdings Limited (South Africa)
·
Professor, Chief Physician, DMSc. Head of Institute of
Sports Medicine, Department of Orthopaedic Surgery,
Bispebjerg Hospital
·
Coordinating Professor (for Bispebjerg-Frederiksberg
Hospital), Institute of Clinical Medicine, University of
Copenhagen
Education and
competencies
M
Sc and MBA
Expertise within strategy, economics, finance and
accounting, capital markets, securities and funding, legal
and regulatory matters of importance to financial
business, corporate management and financial business
management, including IT
MSc (Econ)
Extensive management experience from an international
financial company as well as several board positions both
as chair and member. Skills in accounting, investments,
IT, risk management, strategy and organisational
development
Degree in Business Administration
Experience in management, finance, sales and marketing
in international life science companies, including
medtech and pharmaceutical companies
MD and DMSc
Scientific production within
musculoskeletal and
metabolic research. Skills in research, development and
research evaluation. Experience in research management
and international scientific board work
Management review
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Lundbeck Foundation Annual Report 2023 Page 46
Svend Andersen
Considered independent
Born 1961
Male
Danish
Elected 2020
Susanne Krüger Kjær
Considered independent
Born 1955
Female
Danish
Elected 2014
Thomas Mears Werge
Considered dependent
Born 1962
Male
Danish
Elected 2023
Board committee(s)
Member of the Investment Committee
Chair
of the Research and Prize Committee
Member of the Research and Prize Committee
Shareholdings
Other board and
management positions
·
Executive Vice President and President, Consumer Self-
Care International, Perrigo
·
Professor, MD, DMSc. (Department of Gynaecology),
Rigshospitalet, University of Copenhagen
·
Head of Research, Unit of Virus, Lifestyle and Genes,
Danish Cancer Institute
·
Member of the Board of Johannes Clemmesens
Research Foundation
·
Member of the Human Papillomavirus Prevention and
Control Board
·
Scientific reviewer for AIRC Direzione Scientifica
·
Visiting professor, Johns Hopkins University,
Baltimore,
USA
·
Professor, Director Inst. Biol. Psychiatry, Mental Health
Services, Copenhagen University Hospital
·
Board member of National Genome Centre, and
Member of the Strategic Research Council,
Copenhagen University Hospital
·
Principal Investigator, NIH & EU Initiatives on mental
disorders
·
Expert Witness (WADA) CAS, Court of Arbitration for
Sport, Lausanne (CH)
Education and
competencies
BSc in Economics and Business, and Graduate Diploma in
Bus
iness Administration, Sales & Marketing and
Organisation
Extensive international leadership experience in several
pha
rmaceutical sectors with a proven track record of
creating
sustainable value
MD and DMSc
Substantial scientific
output within oncology. Skills in
research, development, research evaluation and
innovation. Longstanding experience within international
research management
B.Sc. Biochemistry; M.Sc. Mol. Oncology; PhD, Mol.
Neuroscience
Substantial scientific output on Psychiatry and
Neurosciences. Skills in Genetics and epidemiology of
complex traits and disorders. Longstanding experience in
large
-scale, international initiatives
Management review
In Brief Performance Partner to Society Governance Consolidated financial statements Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 47
H
enrik Sindal Jensen
Born 1969
Male
Danish
Elected 2022
Katja Barnkob
Born 1969
Female
Danish
Elected 2022
Mikkel Helmer Nielsen
Born 1977
Male
Danish
Elected 2022
Morten Egholm Aagaard
Born 1976
Male
Danish
Elected 2022
Employee elected
Elected by the employees of H. Lundbeck A/S
Elected by the employees of
ALK-Abelló A/S
Elected by the employees of Falck A/S
Elected by the employees of Falck A/S
Shareholdings
480 shares in ALK
-Abelló A/S
Other board and
management positions
·
Senior Director in Corporate Business Development
& Licensing
·
Project Director
·
Member of the Board of ALK-Abelló A/S
·
Digital Program Manager
·
Paramedic
Education
PhD Neuroscience (University of Copenhagen)
MSc Molecular Biology and BSc Chemistry (University
of Aarhus)
Cand. Scient Biochemistry
Certified Business Economist (CBEcon)
Lieutenant Firefighter
Management review
In Brief Performance Partner to Society Governance Consolidated financial statements Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 48
Manaement
Lene Skole
Born 1959
Female
Danish
Joined 2014
Arne
Due-Hansen
Born 1962
Male
Danish
Joined 2022
Christian Elling
Born 1968
Male
Danish
Joined 2012
Inge Berneke
Born 1970
Female
Danish
Joined 2019
Management position
Chief Executive Officer
Senior Vice President, Strategic
Ownerships
Senior Vice President, BioCapital
Senior Vice President, Corporate Affairs
Shareholdings
61,270 B
-shares in H. Lundbeck A/S and 23,000 shares in
ALK
-Abelló A/S
Board positions
Chair of the board of Ørsted A/S and d
eputy chair of the
boards of H. Lundbeck A/S*, ALK
-Abelló A/S*, Falck A/S*,
Nordea Bank Abp and The Committee on Foundation
Governance
*
Board positions included in the position as CEO of
the Lundbeck Foundation
Chair of the board of Cresco Capital Services A/S and
deputy chair of the board of Obel
-LFI Ejendomme A/S
Member of the boards of Ferrosan Medical Devices Group,
Ellab Group and LFI Silva Investments A/S
Chair of the boards of SNIPR Holdings ApS*, SNIPR Biome
ApS* and CytoKi Pharma ApS*
Member of the boards of IO Biotech, Inc and NMD
Pharma A/S
Member of the boards of Louisiana
-Fonden, Louisiana
Museumsfonden and CfL
Member of the Committee of Representatives, Forenet
Kredit
Management review
In Brief Performance Partner to Society Governance Consolidated financial statements Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 49
Jan Egebjerg
Born 1962
Male
Danish
Joined 2019
Peter
Rothausen
Born 1972
Male
Danish
Joined 2018
Søren Christiansen
Born 1967
Male
Danish
Joined 2017
Management position
Senior Vice President, Grants & Prizes, Director of Science
Senior Vice President, Financial Investments
and Head of Invest
Senior Vice President, Finance & People
Shareholdings
Board positions
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 50
Consolidated
financial statements
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 51
Income statement 52
Balance sheet 53
Cash flow statement 55
Statement of changes in equity 56
Notes 57
1. Basis of preparation 57
2. Revenue 59
3. Employee costs 60
4. Incentive programmes 62
5. Depreciation, amortisation and impairment 65
6. Fees to auditors appointed at the annual meeting 65
7. Other operating items, net 65
8. Financial items 66
9. Tax on profit for the year 67
10. Grants 68
11. Intangible assets 69
12. Property, plant and equipment 74
13. Right-of-use assets 76
14. Biological assets 77
15. Investments in associates 77
16. Financial assets 78
17. Deferred tax 81
18. Inventories 83
19. Trade receivables 83
20. Contract assets 84
21. Liquidity 84
22. Capital base 85
23. Other reserves 85
24. Non-controlling interests 86
25. Provisions 88
26. Bank debt, bond debt and borrowings 92
27. Contract liabilities 95
28. Other payables 96
29. Adjustment for non-cash operating items 96
30. Working capital changes 96
31. Acquisitions and divestments 97
32. Financial risks and financial instruments 99
33. Contractual obligations, contingent assets and
liabilities, and collaterals 107
34. Related parties 109
35. Group overview 110
36. Material accounting policy information 114
37. Events after the balance sheet date 121
Financial statements
Lundbeck Foundation Group
Contents
Notes
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 52
Income statement
For the period 1 January – 31 December
DKKm Note 2023 2022
Revenue 2
36,659 35,426
Cost of sales 3-5 -15,728 -15,905
Gross profit
20,931 19,521
Research and development costs 3-5 -4,155 -4,476
Sales and distribution costs 3-5
-9,317 -8,400
Administrative expenses 3-6
-3,663 -3,166
Other operating items, net 7
-6 -52
Operating profit
3,790 3,427
Share of net profit of associates accounted for using the equity method
15
-34 -
Financial income 8
5,413 3,242
Financial expenses 8
-2,213 -4,904
Profit before tax
6,956 1,765
Tax on profit for the year 9 -683 -554
Profit for the year
6,273 1,211
Profit attributable to:
Lundbeckfonden
5,159 -126
Non-controlling interests 24
1,114 1,337
Profit for the year
6,273 1,211
Grants authorised, gross 10 592 550
Statement of comprehensive income
For the period 1 January – 31 December
DKKm Note 2023 2022
Profit for the year
6,273 1,211
Actuarial gains/losses 25 -25 230
Tax 9
5 -49
Items that will not subsequently be reclassified to the income statement
-20 181
Currency translation reserve:
Currency translation, foreign subsidiaries
-324 617
Currency translation concerning additions to net investments in foreign subsidiaries
-7
25
Hedging of net investments in foreign subsidiaries
17 -163
Deferred gains/losses on cash flow hedge, exchange rate
117 -347
Deferred gains/losses on cash flow hedge, interest rate
-19
39
Deferred gains/losses on cash flow hedge, price
-78 128
Exchange gains/losses, hedging (transferred to revenue)
-137 588
Tax on other comprehensive income
9
18
-64
Items that may subsequently be reclassified to the income statement
-413 823
Other comprehensive income for the year, net of tax
-433 1,004
Total comprehensive income for the year
5,840 2,215
Attributable to:
Lundbeckfonden
4,864 541
Non-controlling interests 24
976 1,674
Total comprehensive income for the year
5,840
2,215
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 53
Balance sheet
At 31 December, Assets
DKKm Note 2023 2022
Goodwill
9,977 10,037
Product rights
14,903 16,741
Brands
514 514
Customer contracts
131 191
Other intangible assets
561 469
Intangible assets 11
26,086 27,952
Property, plant and equipment 12 5,515 5,341
Right-of-use assets
13
1,717
1,682
Biological assets 14 317 289
Tangible assets
7,549 7,312
Investments in associates 15 2,619 874
Financial assets 16
23,887 21,548
Deferred tax 17
1,470 1,324
Income tax
198 193
Other financial assets
410 522
Other non-current assets
28,584 24,461
Non-current assets
62,219
59,725
DKKm Note 2023 2022
Inventories 18
5,892 5,391
Trade receivables 19 5,004 4,660
Other receivables
980 1,278
Prepayments
373 494
Contract assets 20
408 322
Income tax
240 191
Receivables
7,005 6,945
Securities 21 536 963
Cash and bank balances 21 6,080 4,609
Current assets
19,513 17,908
Assets
81,732 77,633
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 54
Balance sheet
At 31 December, Equity and liabilities
DKKm Note 2023 2022
Capital base 22
4,357 4,162
Other reserves 23 2,337 2,744
Retained earnings
39,165 34,665
Lundbeckfonden's share of equity
45,859 41,571
Non-controlling interests’ share of equity
24
9,287
8,593
Total equity
55,146 50,164
Payable grants
1,382 1,205
Provisions 25
935 762
Deferred tax 17
2,475 2,395
Income tax
230 203
Debt to financial institutions and bond debt 26
6,533 7,585
Lease liabilities 26
1,323 1,280
Contract liabilities 27
46 51
Other payables 28
439 428
Non-current liabilities
13,363 13,909
DKKm Note 2023 2022
Payable grants
656 648
Provisions 25 1,207 1,299
Income tax
681 622
Debt to financial institutions 26
293 395
Lease liabilities 26
476 409
Contract liabilities 27
673 732
Other payables 28
9,237 9,455
Current liabilities
13,223 13,560
Liabilities
26,586 27,469
Equity and liabilities
81,732 77,633
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 55
Cash flow statement
For the period 1 January – 31 December
DKKm Note 2023 2022
Operating profit
3,790 3,427
Adjustment for non-cash operating items 29 3,370 2,578
Working capital changes 30
-1,213 -1,547
Cash flows from operating activities before financial receipts and payments and tax
5,947 4,458
Financial receipts
737 701
Financial payments
-419 -804
Income tax paid
-681
-381
Cash flows from operating activities
5,584 3,974
Acquisition of businesses 31 -101 -3
Contingent consideration payment from acquisition of company 31
- -1,076
Divestment of businesses 31
- 998
Investments in intangible assets 11
-298 -516
Investments in property, plant and equipment 12
-800 -912
Investments in biological assets 14
-33 -81
Disposal of intangible assets and property, plant and equipment
129 96
Investments in associated companies
-1,778 -874
Investments in financial assets measured at fair value through profit or loss
-6,029 -5,349
Sale of financial assets measured at fair value through profit or loss
7,175 5,619
Investments in other financial assets, net
4 2
Cash flows from investing activities
-1,731 -2,096
Cash flows from operating and investing activities (free cash flow)
3,853 1,878
DKKm Note 2023 2022
Proceeds from loans and issue of bonds 26
2,155 2,397
Repayment of loans and lease liabilities 26 -3,773 -2,484
Purchase of treasury shares in subsidiaries
-43 -91
Sale of treasury shares in subsidiaries
12 42
Capital increase from non-controlling interests
1 4
Settlement of exercised share options and warrants
-20 -11
Dividends paid to non-controlling interests
-285 -861
Other transactions with non-controlling interests
- -57
Authorised grants paid
-395 -549
Cash flows from financing and grant-making activities
-2,348 -1,610
Cash flows from operations
1,505 268
Net cash flow for the year
1,505 268
Cash at 1 January 21
4,609 4,321
Unrealised exchange rate adjustments for the year
-34 20
Cash at 31 December 21
6,080 4,609
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 56
Statement of changes in equity
For the period 1 January – 31 December
DKKm Capital base
Other
reserves
Retained
earnings
Lundbeck-
fonden’s
share
of equity
Non-con-
trolling
interests’
share
of equity
Total
equity
Equity at 1 January 2023 4,162 2,744 34,665 41,571 8,593 50,164
Profit for the year - - 5,159 5,159 1,114 6,273
Other comprehensive income - -407 112 -295 -138 -433
Comprehensive income - -407 5,271 4,864 976 5,840
Grants for the year, net - -580 - -580 - -580
Provision for future grants - 580 -580 - - -
Non-controlling interests’ share of
dividends
- - - - -285 -285
Purchase of treasury shares in
subsidiaries
- - -30 -30 -13 -43
Sale of treasury shares in subsidiaries - - 7 7 5 12
Change in non-controlling interests - - 5 5 -5 -
Incentive programmes - - 30 30 18 48
Repurchase obligation of treasury
shares
- - -8 -8 -5 -13
Other adjustments - - 1 1 2 3
Tax related to items recognised
directly on equity
- - -1 -1 1 -
Other transactions - - -576 -576 -282 -858
Increase of capital base 195 - -195 - - -
Equity at 31 December 2023 4,357 2,337 39,165 45,859 9,287 55,146
DKKm Capital base
Other
reserves
Retained
earnings
Lundbeck-
fonden’s
share
of equity
Non-con-
trolling
interests’
share
of equity
Total
equity
Equity at 1 January 2022 3,901 1,921 35,799 41,621 7,801 49,422
Profit for the year
-126 -126 1,337 1,211
Other comprehensive income - 823 -156 667 337 1,004
Comprehensive income - 823 -282 541 1,674 2,215
Grants for the year, net
-539 - -539 - -539
Provision for future grants
539 -539 - - -
Non-controlling interests’ share of
dividends
- - -861 -861
Purchase of treasury shares in
subsidiaries
-77 -77 -14 -91
Sale of treasury shares in subsidiaries
17 17 25 42
Change in non-controlling interests
-13 -13 -44 -57
Incentive programmes
27 27 18 45
Other adjustments
- - 4 4
Tax related to items recognised
directly on equity
- - -6 -6 -10 -16
Other transactions - - -591 -591 -882 -1,473
Increase of capital base 261 - -261 - - -
Equity at 31 December 2022 4,162 2,744 34,665 41,571 8,593 50,164
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 57
Basis of preparation - continued
Note 1
Reporting entity
Lundbeckfonden (the Lundbeck Foundation) is
domiciled in Denmark. The Foundation’s registered
office is at Scherfigsvej 7, 2100 Copenhagen. These
consolidated financial statements comprise the Parent
Foundation and its subsidiaries.
Basis of accounting
The consolidated financial statements have been
prepared in accordance with IFRS Accounting Standards
as adopted by the EU and additional requirements of
the Danish Financial Statements Act. The consolidated
financial statements were approved by the Board of
Directors on 12 March 2024.
The statement of financial position is also referred to as
the “balance sheet”.
Details of the Group’s accounting policies are included
in this note and note 36 Material accounting policy
information.
Functional and presentation currency
Items included in the financial statements of each of
the Group’s entities are measured using the currency of
the primary economic environment in which the entity
operates (the functional currency).
The consolidated financial statements are presented in
Danish kroner (DKK), which is also the functional
currency of Lundbeckfonden (the Parent Foundation).
All amounts have been rounded to the nearest DKK
million, unless otherwise indicated.
Principal accounting policies
The consolidated financial statements have been
prepared to give a true and fair view of the Group’s
financial position at 31 December 2023 and financial
performance for the year. The material accounting
policies are described in note 36 Material accounting
policy information. Management believes that the
accounting policies listed in the following section, Use of
judgements and estimates, are principal to the financial
statements.
Use of judgements and estimates
In preparing the consolidated financial statements,
Management has made estimates and judgements that
affect the application of the Group’s accounting policies
and the reported amounts of assets, liabilities, income
and expenses. Actual results may differ from these
estimates.
Estimates and underlying assumptions are reviewed on
an ongoing basis. Revisions of estimates are recognised
prospectively.
Management believes that the accounting estimates,
assumptions and judgments that appear in the table
below are significant to the consolidated financial
statements.
Changes in material accounting policy information
New and amended standards adopted by the group
Effective 1 January 2023, a number of amendments to the
accounting standards were implemented.
None of the amendments have a material impact on the
accounting policies and/or on the consolidated financial
statements. Consequently, no material changes to the
accounting policies or retrospective adjustments have
been made as a result of adopting these standards and/or
amendments. For details, see below.
Global minimum top-up tax (Pillar II)
The Group has adopted the International Tax Reform –
Pillar Two Model Rules (Amendments to IAS 12) upon
their release on 23 May 2023. The amendments provide
a temporary mandatory exception from deferred tax
accounting for the top-up tax, which is effective
immediately, and require new disclosures about Pillar
Two exposure, see note 17 Deferred tax.
The mandatory exception applies retrospectively.
However, because no new legislation to implement the
top-up tax was enacted or substantively enacted at 31
December 2023, in any jurisdiction in which the Group
operates and no related deferred tax was recognised at
that date, the retrospective application has no impact
on the Group’s consolidated financial statements.
Material accounting policy information
The Group adopted Disclosure of Accounting Policies
(Amendments to IAS 1 and IFRS Practice Statement 2)
from 1 January 2023. Although the amendments did not
result in any changes to the accounting policies
themselves, they impacted the accounting policy
information disclosed in the financial statements. The
amendments require the disclosure of ‘material’, rather
than ‘significant’, accounting policies. The amendments
also provide guidance on the application of materiality
to disclosure of accounting policies, assisting entities to
provide useful, entity-specific accounting policy
information that users need to understand other
information in the financial statements.
Note 1
Basis of preparation
Principal accounting policies
Key accounting estimates, assumptions and judgements Notes
Provision for discounts and rebates Estimate of discounts and rebates in the USA
25
Income tax and deferred income taxes
Judgement and estimate of deferred tax assets and liabilities and provision
for uncertain tax positions
9,17
Intangible assets
Judgement and estimates when determining the carrying amounts in
connection with capitalisation of intangible assets
Estimate of the value-in-use methodology for impairment of intangible assets
11
Inventory Judgment and estimate of the provision for obsolescence 18
Financial assets Estimate of fair value of unlisted investments 16,32
Provisions and contingent assets and
liabilities
Estimate of ongoing legal disputes, environmental provisions, litigations and
investigations
25,33
Other payables - contingent
consideration
Assumptions and estimates used in the calculation of the fair value related to
contingent consideration from the businesses acquired
28
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 58
Basis of preparation - continued
Note 1
Management reviewed the accounting policies and
made updates to the information disclosed in note 36
Material accounting policy information (2022:
Significant accounting policies) in certain instances in
line with the amendments.
In addition, the following amendments did not have a
material impact on the amounts recognised in prior
periods and are not expected to significantly affect
current or future periods, the accounting policies and/or
the consolidated financial statements.
• Definition of Accounting Estimate – Amendments to
IAS 8 Accounting Policies, Changes in Accounting
Estimates and Errors
• Deferred Tax related to Assets and Liabilities arising
from a Single Transaction - Amendments to IAS 12
Income Taxes
New standards and amendments issued but
not yet effective
A number of new standards and amendments are
effective for annual periods beginning after 1 January
2023 though not mandatory for annual reporting periods
ending on 31 December 2023. Earlier application is
permitted; however, the new or amended standards have
not been early adopted by the Group.
The amended standards are as follows:
• Classification of liabilities as current or non-current
and non-current liabilities with covenants
(Amendments to IAS 1 Presentation of Financial
Statements)
• Supplier finance arrangements (Amendments to IAS 7
Statement of Cash Flows and IFRS 7 Financial
Instruments: Disclosures)
• Lease liability in a sale and leaseback (Amendments to
IFRS 16 Leases)
• Lack of exchangeability (Amendments to IAS 21 The
Effects of Changes in Foreign Exchange Rates)
The Group expects to adopt the new standards,
improvements, amendments and interpretations when
they become mandatory.
None of the amended standards are expected to
significantly impact the accounting policies and/or on the
consolidated financial statements.
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 59
Revenue - continued
Note 2
Note 2
Revenue
DKKm
2023
2022
Europe
16,080
16,029
North America 14,428 13,273
Rest of the world
6,151 6,124
Total
36,659 35,426
Brain diseases (Lundbeck) 19,912 18,246
Allergy treatment (ALK)
4,824 4,511
Ambulance Europe, Ambulance US, Fire Services, Employee and Labour Market services, Consumer and
Technical services and Community Health services (Falck)
11,913 12,647
Other
10 22
Total
36,659 35,426
Revenue includes:
2023
2022
Sale of goods 24,064 21,930
Rendering of services
11,795
12,520
Downpayments and milestone payments 7 2
Royalties
793 974
Total
36,659 35,426
Revenue in Denmark 4,049 4,813
Brain diseases (Lundbeck)
DKKm 2023 2022
Abilify Maintena®
3,187 2,964
Brintellix®/Trintellix® 4,324 4,277
Rexulti®/Rxulti®
4,525 3,890
Vyepti®
1,697 1,004
Strategic brands
13,733 12,135
Cipralex®/Lexapro® 2,135 2,360
Sabril®
336
636
Other pharmaceuticals 3,244 3,426
Other revenue
327 277
Effects from hedging
137
-588
Total 19,912 18,246
Allergy treatment (ALK)
DKKm 2023 2022
SCIT/SLIT-drops
1,939 1,748
SLIT-tablets 2,296 2,102
Other products and services
589 661
Total
4,824 4,511
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 60
Employee costs - continued
Note 2
Ambulance Europe’s revenue in 2022 included testing activities of DKK 617m.
Note 2
Revenue - continued
Falck
DKKm 2023 2022
Ambulance Europe
3,508 4,270
Ambulance US 2,691 2,412
Fire Services
1,365
1,313
Employee and Labour Market services 1,683 1,777
Consumer and Technical services
1,875 1,845
Community Health services
872
786
Eliminations -76 -61
Total core business
11,918 12,342
Portfolio business - 321
Eliminations -5 -16
Total
11,913 12,647
Note 3
Employee costs
DKKm 2023 2022
Wages and salaries
13,078 12,770
Share-based payments
71
59
Pensions 756 736
Other social security costs
1,418 1,391
Severance and other costs from restructuring activities
59
-
Total 15,382 14,956
The year’s employee costs are specified as follows:
Cost of sales 8,182 8,363
Research and development costs
1,326 1,301
Sales and distribution costs
3,700 3,378
Administrative expenses
2,044 1,842
Other operating items, net
49 9
Included in the cost of assets
81 63
Total
15,382 14,956
Average number of full-time employees during the year 27,350 28,083
Number of employees at year-end
33,963 33,197
DKKm 2023 2022
Remuneration in the Group including remuneration for board positions in subsidiaries:
Total remuneration to key management of Lundbeckfonden 18.1
16.9
Total remuneration (fees) to the Board of Directors of Lundbeckfonden 9.6
8.9
Total 27.7
25.8
Key management, Lene Skole, CEO
Salary 11.8
11.4
Cash bonus 4.3
3.8
Pension 1.7
1.4
Non-cash benefits (company car and telephone) 0.3
0.3
18.1
16.9
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 61
Employee costs - continued
Note 3
Fees to Board of Directors, DKKm Membership
Board
member fee
Committees Subsidiaries 2023 Total
Board
member fee
Committees Subsidiaries 2022 Total
Steffen Kragh Chair of the Foundation and Lundbeckfond Invest A/S and member of the Investment Committee
1.0 0.3 - 1.3
1.0 0.3 - 1.3
Peter Schütze Deputy Chair of the Foundation and Lundbeckfond Invest A/S and member of the Investment Committee 0.6 0.3 0.7 1.6
0.6 0.3 0.7 1.6
Gunhild Waldemar Former Chair of the Research Committee, stepped down on 27 March 2023
0.4 - - 0.4
0.4 0.4 - 0.8
Lars Holmqvist Chair of the Investment Committee
0.3 0.4 1.0 1.7
0.3 0.4 1.0 1.7
Michael Kjær Member of the Research Committee
0.3 0.4 - 0.7
0.3 0.3 - 0.6
Susanne Krüger Kjær Chair of the Research Committee since 27 March 2023
0.3 0.5 - 0.8
0.3 0.3 - 0.6
Svend Andersen Member of the Investment Committee
0.3 0.3 - 0.6
0.2 0.3 - 0.5
Thomas Mears Werge Member of the Research Committee since 27 March 2023
0.3 0.3 - 0.6
- - - -
Henrik Sindal Jensen Employee representative from H. Lundbeck A/S
0.4 - - 0.4
0.3 - - 0.3
Katja Barnkob Employee representative from ALK-Abelló A/S
0.4 - 0.3 0.7
0.3 - 0.2 0.5
Mikkel Helmer Nielsen Employee representative from Falck A/S
0.4 - - 0.4
0.3 - - 0.3
Morten Egholm Aagaard Employee representative from Falck A/S
0.4 - - 0.4
0.3 - - 0.3
Ludovic Tranholm Otterbein Employee representative from H. Lundbeck A/S stepped down on 22 March 2022
- - - -
0.1 - 0.1 0.2
Vagn Flink Møller Pedersen Employee representative from Falck A/S stepped down on 22 March 2022
- - - -
0.1 - - 0.1
Kristian Funding Andersen Employee representative from ALK-Abelló A/S, from 30 June 2021 to 22 March 2022
- - - -
0.1 - - 0.1
Total
5.1 2.5 2.0 9.6
4.6 2.3 2.0 8.9
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 62
Incentive programmes - continued
Note 4
Lundbeckfonden
The Executive Management of Lundbeckfonden
participates in a short-term incentive programme that
provides an annual bonus for the achievement of pre-
determined targets. Bonuses under the programme
amounted to DKK 4.3m in 2023 (DKK 3.8m in 2022),
which was equivalent to 100% of the maximum, and will
be paid out with a delay of 12 months.
In addition, Lundbeckfonden has incentive programmes
to be able to attract and retain skilled and qualified
employees. The costs related to the programmes are
recognised as employee costs when there is certainty
about the amount due and the time of payment.
Subsidiaries
To attract, retain and motivate key employees and align
their interests with those of the shareholders, a number
of incentive programmes have been established in
Lundbeck, ALK and Falck. The Group uses short-term
incentive programmes that provide an annual bonus for
the achievement of pre-determined targets for the
financial year, as well as long-term, equity-based and
debt-based programmes, as described below.
Lundbeck
Lundbeck uses equity- and cash-settled programmes.
Equity-settled programmes
As from 2023, Lundbeck has established a performance
share units (PSU) programme in substitution for the
previous restricted share units (RSU) programme for
Lundbeck’s Registered Executive Management and key
employees, as part of Lundbeck’s recurring long-term
incentive programme. The general terms and conditions
for the PSU programme are similar to those applying to
the RSU programme. In 2023, five of the members of the
Registered Executive Management and some key
employees employed with the Group were granted PSUs.
The total number of options granted to the above-
mentioned employees are disclosed below. The
participants were selected based on job level. All the
PSUs and RSUs vest three years after grant. Vesting is
subject to the Board of Directors’ decision on vesting, to
Lundbeck achieving certain strategic and financial
targets specified by the Board of Directors and to
continuing employment with the Group during the
vesting period. The fair value of PSUs and RSUs has been
calculated based on the share price reduced by an
expected dividend yield of 2.00% p.a. The fair value is
disclosed below for each date of grant.
Comparative figures for 2019 to 2021 have been restated
to reflect the result of the share split completed on 8
June 2022.
Cash-settled programmes
In 2023, the cash-settled programmes consisted of
performance cash units (PCUs) and restricted cash units
(RCUs). The cash-settled programmes cannot be
converted into shares as this programme is settled
in cash.
As from 2023, the Group has established a PCU
programme in substitution for the RCU programme for
a few key employees in the subsidiaries. The general
terms and conditions for the PCU programme are
similar to those applying to the RCU programme. At
31 December 2023, the PCUs granted to key employees
totalled 39,152 PCUs (14,205 RCU for the 2022
programme). All PCUs and RCUs will vest three years
after the grant. Vesting is subject to the Board of
Directors’ decision on vesting, to Lundbeck achieving
certain strategic and financial targets specified by the
Board of Directors and to continuing employment with
the Group during the vesting period. The size of the
amount depends on the value of the Lundbeck share on
the vesting date. The fair value at the time of the initial
grant was DKK 28.29 per PCU (DKK 28.43 per RCU for the
2022 programme).
Fair value, liability and expense recognised in the
statement of profit or loss
The PSUs/RSUs granted are recognised in profit or loss
for 2023 and 2022 at an expense corresponding to the
fair value at the time of grant for the part of the vesting
period attributable to each one. The total expense
recognised in respect of equity-settled programmes
amounted to DKK 36m (DKK 30m in 2022). At
31 December 2023, the fair value of the remaining
equity-settled programmes was DKK 120m (DKK 84m
at 31 December 2022).
The PCUs/RCUs granted are recognised in the statement
of profit or loss at an expense corresponding to the
value adjustment for the year based on the
performance of the Lundbeck share. The total expense
recognised in respect of cash-settled programmes
amounted to DKK 5m (DKK 4m in 2022) and covers all
cash-settled programmes in force at 31 December 2023.
At 31 December 2023, the total liability in respect of
cash-settled programmes was DKK 1m (DKK 10m at
31 December 2022).
The total expense recognised in profit or loss for all
incentive programmes amounted to DKK 41m in 2023
(DKK 34m in 2022).
ALK
The incentive plans consist of share options,
performance share units, and restricted stock units that
are considered sufficiently covered by treasury shares.
The share options entitle the holder to acquire one
existing B share of DKK 0.5 nominal value in the
company per share option. The performance share units
and restricted stock units entitle the holder to receive
one existing B share per performance share unit or
restricted stock unit free of charge.
Note 4
Incentive programmes
1) The Group introduced a performance share units (PSU) programme in 2023. Consequently, information for 2023 comprises details
on PSUs and information for 2019-2022 comprises details on RSUs.
PSU and RSU programmes
1
2023
2022 2021
2020
2019
Number of persons included in the programme
166
176
139
135
139
Total number of PSUs/RSUs granted 1,738,
514
1,592,060
801,
365
695,
595
639,495
Number of PSUs/RSUs granted to the registered
Executive Management
407,
514
385,659
173,
905
149,
615
140,640
Vesting date
01.02.26
01.02.2025
01.02.2024
01.02.2023
01.02.2022
Fair value at the date of grant, DKK 28.
29
28.43
47.
24
51.
68
53.94
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 63
Incentive programmes - continued
Note 4
The vesting period for both share options, performance
share units, and restricted stock units is three years
after grant. Vesting of share options and performance
share units is conditional upon certain targets being
met and upon the participant not having resigned.
Target achievement is met upon fulfilment of strategic
key performance indicators. In case performance is
below the threshold there will be no units vesting, and if
above target, a multiplier is applied that can increase
the vesting by up to 100%. Vesting of restricted stock
units is conditional upon continued employment.
The exercise of share options is possible in the trading
windows following the release of annual and interim
reports conditional upon the share option holder not
having resigned at the time of exercise. For performance
share units and restricted stock units, the final transfer
of ownership takes place at vesting three years after the
grant.
For the 2023 plans, a cap applies to the maximum total
value gain from share options, performance shares, and
restricted stock units at exercise and/or vesting,
respectively, granted in a calendar year. The cap is four
times the annual base salary at the time of award of the
share options, performance share units, and restricted
stock units concerned.
Expensed in the income statement
In 2023, the total cost of share-based payments
included a financial income of DKK 0m due to the
exercise and cash settlement of share options (2022:
DKK 0). The total cost included DKK 8m related to
adjustment in the share options and performance share
units expected to vest (2022: DKK 3m).
Specification of outstanding share options and
performance share units:
The Board of Directors decided for two trading windows
in 2023 to settle share options by cash and a total of
434,219 share options were exercised and total cash
payments amounted to DKK 14m. The Board of Directors
decided not to open two trading windows for exercises
in 2023.
The Board of Directors decided for four trading windows
in 2022 to settle share options by shares and a total of
1,208,060 share options were exercised.
Share options
Performance share units
Restricted stock
units
Units
Board of
Management
Other key
employees
Total
Weighted
average exercise
price, DKK
Board of
Management
Other key
employees
Total
Board of
Management
1 January 2023 590,120 638,740 1,228,860 82
79,020 423,920 502,940
-
Additions 397,661 86,657 484,318 86
25,358 165,452 190,810
151,997
Exercised/settled
-192,320
-241,899
-434,219
48
-42,895
-202,216
-245,111
-
Change in Board of Management
1)
-307,650 307,650 - -
-8,240 8,240 -
-
Cancellations - -24,880 -24,880 106
-24,980 -8,280 -33,260
-
31 December 2023 487,811 766,268 1,254,079 95
28,263 387,116 415,379
151,997
Total number of vested share options
451,150
Average remaining life at year-end (years)
2.6
Exercise prices at year-end (DKK)
59-144
1 January 2022 1,285,800 768,180 2,053,980 59
130,220 518,180 648,400
-
Additions 261,420 227,420 488,840 108
58,860 244,980 303,840
-
Exercised/settled -851,200 -356,860 -1,208,060 48
-92,720 -328,540 -421,260
-
Cancellations -105,900 - -105,900 90
-17,340 -10,700 -28,040
-
31 December 2022 590,120 638,740 1,228,860 82
79,020 423,920 502,940
-
Total number of vested share options
507,180
Average remaining life at year-end (years)
2.0
Exercise prices at year-end (DKK)
41-141
1) The
In relation to the resignation of the previous CEO, it was agreed that he kept his outstanding share options and the related outstanding
costs were accelerated, while outstanding performance share units were cancelled.
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 64
Incentive programmes - continued
Note 4
Outstanding share options and performance share units
have the following characteristics:
Fair value of share options and performance
share units granted
Share options
Fair value at grant date is measured in accordance with
the Black & Scholes model for valuation of share
options, using the following assumptions:
Performance share units
Performance share units have been granted at DKK 104
per share (2022: DKK 141 per share).
Restricted stock units
Restricted stock units have been granted at DKK 105
and DKK 77 per share for the respective 2023 plans. No
restricted stock units were granted in 2022.
Falck
The remuneration of the members of the Executive
Committee consists of three key components: base
salary, a short-term incentive plan and a long-term
incentive plan.
The short-term incentive programme is a cash-based
one-year programme with focus on financial,
commercial and ESG KPIs.
The long-term incentive programme is a cash-based
incentive on a three-year performance period with a
50% EBITA target and 50% on implementation of
strategic Care for more ’27 initiatives at the end of the
three-year period.
Group
Recognised expenses, DKKm 2023 2022
Recognised expenses concerning
equity-based schemes
66
57
Recognised expenses concerning cash-
based schemes
5
4
Total recognised expenses 71
61
Share options
Performance share units
Performance share units
Plan Units
Exercise price,
DKK
Vested as per
Exercise
period (years)
Units Vested as per
Units Vested as per
2019 Plan 106,380
59
01.03.2022
2
2020 Plan 344,770
75
01.03.2023
2
2021 Plan
193,560
125
01.03.2024
2
131,860
01.03.2024
2022 Plan 174,380
150
01.03.2025
2
124,680
01.03.2025
2023 Plan
111,470
104
01.04.2026
4
158,839
01.04.2026
2023 Plan, special
323,519
82
01.06.2026
4
2023 Plan, special
21,925
01.03.2026
2023 Plan, special
130,072
01.11.2026
31 December 2023 1,254,079
415,379
151,997
2023 Plan
2023
Special plan
2022 Plan
Average share price (DKK)
104
82
141
Expected exercise price (DKK) 104
82
152
Expected volatility rate, based on the historical volatility 36% p.a.
38% p.a.
35% p.a.
Expected option life 5 years
5 years
4 years
Expected dividend per share -
-
-
Risk-free interest rate 2.57% p.a.
2.73% p.a.
0.14% p.a.
Calculated fair value of granted share options (DKK) 37
31
33
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 65
Depreciation, amortisation and impairment - continued
Note 5
The amounts include gains and losses on disposal of
intangible and tangible assets.
Note 6
Fees to auditors appointed
at the annual meeting
PwC audits the consolidated financial statements of the
Lundbeck Foundation and a majority of the subsidiaries’
financial statements.
The fee for non-audit services provided to the Group by
PricewaterhouseCoopers Statsautoriseret
Revisionspartnerselskab, Denmark, consisted of
consultancy services, other assurance services and other
accounting and tax advisory services.
In 2022, the change in value of biological assets and
related land included an impairment on property and
land of DKK 7m.
Note 5
Depreciation, amortisation and impairment
DKKm 2023 2022
Depreciation, amortisation and impairment are specified as follows:
Cost of sales 2,613 2,401
Research and development costs
83 95
Sales and distribution costs
132 136
Administrative expenses
124 123
Other operating items, net
-11 112
Total
2,941 2,867
DKKm 2023 2022
Administrative expenses include fees to the Group auditors appointed at the annual meeting in the
amount of:
Statutory audit 24
22
Other assurance engagements 1
2
Tax advisory services 3
2
Other services 3
7
Total 31
33
DKKm 2023 2022
Transaction costs related to acquisitions and divestments
-1
-21
Change in value of biological assets and related land 8
19
Gain on sales of assets, net 11
8
Redundancy and restructuring costs, etc. -63
-9
Impairment of goodwill (Falck) -
-113
Other operating income 39
64
Total -6
-52
Note 7
Other operating items, net
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 66
Financial items - continued
Note 8
Fair value adjustment of contingent consideration in
2022 comprises DKK 278m related to the increase of the
probability of success of milestone payments from
83.2% to 100% which occurred in the first quarter of
2022 following the European Medicines Agency (EMA)
approval. For details, see note 28 Other payables.
Note 8
Financial items
Lundbeck, ALK and Falck BioCapital Invest etc. Group
DKKm 2023 2022 2023 2022 2023 2022 2023 2022
Financial income
Interest on financial assets measured at amortised cost
116
48
-
-
-
-
116
48
Interest on financial assets measured at fair value through profit or loss - - - - 333 218 333 218
Interest on receivables from associates
- - 4 6 - - 4 6
Dividends from associates
-
-
-
-
-
100
-
100
Dividends from portfolio investments - - - - 287 309 287 309
Gains on financial assets at fair value through profit or loss
4 31 1,331 165 3,317 1,425 4,652 1,621
Gains from divestments of enterprises
- 808 - - - - - 808
Fair value adjustment of contingent considerations
4 71 - - - - 4 71
Exchange gains
3 21 - - 6 16 9 37
Other financial income
3
1
-
22
5
1
8
24
Total financial income 130 980 1,335 193 3,948 2,069 5,413 3,242
Financial expenses
Interest on financial liabilities measured at amortised cost 195 186 - - 13 3 208 189
Interest component, discounted liabilities
31 34 - - - - 31 34
Losses on financial assets at fair value through profit or loss
25 7 522 758 1,066 3,465 1,613 4,230
Fair value adjustment of contingent considerations
10 300 - - - - 10 300
Exchange losses
212 36 - - 9 16 221 52
Losses from divestment of enterprises
2 - - - - - 2 -
Other financial expenses
59 84 41 - 28 15 128 99
Total financial expenses
534 647 563 758 1,116 3,499 2,213 4,904
Net financials -404 333 772 -565 2,832 -1,430 3,200 -1,662
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 67
Tax on profit for the year - continued
Note 9
Uncertain tax positions
The Group operates in a multinational tax environment.
Complying with tax rules can be complex as the
interpretation of legislation and case law may not
always be clear or may change over time. In addition,
transfer-pricing disputes with tax authorities may occur.
Management’s judgements are applied to assess the
possible effect of exposures and the possible outcome
of disputes or interpretational uncertainties.
The net accrual for uncertain tax positions amounts to
DKK 595m (DKK 568m at 31 December 2022).
Management believes that the accrual is adequate.
However, the actual obligation may differ from the
accrual made and depends on the outcome of
litigations and settlements with the relevant tax
authorities.
Note 9
Tax on profit for the year
DKKm 2023 2022
Current tax
673
542
Prior-year adjustment, current tax 34
-1
Prior-year adjustment, deferred tax -65
-27
Change of deferred tax for the year 17
164
Change of deferred tax as a result of changed income tax rates 1
5
Total tax for the year 660
683
Tax for the year is composed of:
Tax on profit for the year
683
554
Tax on other comprehensive income -23
113
Tax on other transactions in equity -
16
Total tax for the year 660
683
Tax on other comprehensive income, DKKm 2023 2022
Actuarial gains/losses
-5
49
Currency translation, foreign subsidiaries 4
10
Currency translation on additions to net investments in foreign subsidiaries 4
-36
Value adjustment of interest-hedging instruments -5
9
Deferred gains/losses on cash flow hedge, price -17
28
Adjustment, deferred exchange gains/losses, hedging 26
-76
Exchange gains/losses, hedging (transferred to the hedged items) -30
129
Total tax on other comprehensive income -23
113
Explanation of the Group’s effective tax rate relative to the Danish tax rate 2023 DKKm %
Profit before tax
6,956
Calculated tax, 22% 1,530 22
Tax effect of:
Differences in income tax rates of foreign subsidiaries from Danish corporate income tax rate 122 2
Non-deductible/non-taxable items and other permanent differences -157 -2
Non-capitalised tax losses etc., for the year 31 -
Research and development activities (tax credits) -52 -1
Foreign-derived intangible income benefit -31 -
Prior-year tax adjustments etc., total effect on operations -31 -1
Change in valuation of net tax assets -411 -6
Deduction for grants -308 -4
Other taxes and adjustments -11 -
Change of deferred tax as a result of changed income tax rates 1 -
Effective tax for the year 683 10
Explanation of the Group’s effective tax rate relative to the Danish tax rate 2022 DKKm %
Profit before tax
1,765
Calculated tax, 22% 388
22
Tax effect of:
Differences in income tax rates of foreign subsidiaries from Danish corporate income tax rate 44
3
Non-deductible/non-taxable items and other permanent differences -46
-3
Non-capitalised tax losses etc., for the year 233
13
Research and development activities (tax credits) -82
-5
Non-deductible impairment of goodwill 36
2
Foreign-derived intangible income benefit -33
-2
Prior-year tax adjustments etc., total effect on operations -28
-1
Change in valuation of net tax assets 22
1
Other taxes and adjustments 15
1
Change of deferred tax as a result of changed income tax rates 5
-
Effective tax for the year
554
31
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 68
Grants - continued
Note 10
Donations to descendants amounted to DKK 196,200
(DKK 196,200 in 2022).
Note 10
Grants
DKKm 2023 2022
LF Professorships
80
-
LF Collaborative Projects -
174
LF Projects 98
-
LF & NIH Brain Initiative -
6
LF Start-Up Programme -
10
Research in neuroscience 178
190
LF Ascending Investigators 68
54
LF Experiment
63
49
LF Postdocs 41
49
LF Projects -
3
LF Visiting Professor, LF Sabbatical leave & LF Larger international meetings and conferences
2
3
Pioneer centre 80
-
Research benefitting neuroscience 254
158
LF Early-Career Clinician Scientists 16
21
LF Fellowships 61
70
LF Pre-Graduate Scholarships 7
6
Universitetshospitalernes Center for Sundhedsfaglig Forskning 2
2
Talent development in biomedical science 86
99
DKKm 2023 2022
The Brain Prize
10
10
LF Talent Prizes 2
2
LF Young Investigator Prize 1
1
LF Scientific Enrichment Prize -
-
Prizes 13
13
LF Frontier grants, Neurotorium, LF Investigator Network & LF Diversity 29
11
Pioneer centre -
43
Other grants & purposes §6J
7
12
Other purposes 36
66
Science Education & Communication and Diversity 25
24
Grants authorised, gross
592
550
Descendants
-
-
Reversed grants/repayments -12
-11
Grants for the year, net 580
539
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 69
Intangible assets - continued
Note 11
Product rights at 31 December 2023 included
product rights not yet commercialised amounting to
DKK 1,973m.
In 2023, Abilify Maintena® achieved a sales milestone of
EUR 300m triggering the recognition of an addition in
the product rights of Abilify Maintena® of DKK 112m
(EUR 15m). The milestone has been paid in 2023.
Additions on acquisitions are related to Falck’s
acquisition of MedConnect A/S. The acquisitions of
goodwill, customer contracts, software, and other
intangible assets have primarily been made to achieve
synergies with Falck’s existing business units, to further
develop existing markets and to establish a presence in
new markets.
Please refer to note 31.1 for information about additions
on acquisitions.
Note 11
Intangible assets
DKKm Goodwill
Product
rights Brands
Customer
contracts
Other
intangible
assets
Ongoing
projects Total
Cost at 1 January 2023
11,855 33,025 514 250 3,347 131 49,122
Currency translation -138 -499 - -17 -4 - -658
Reclassifications/transfers - - - - 39 -39 -
Additions on acquisitions 71 - - - 40 - 111
Additions - 112 - - 80 106 298
Disposals -22 - - - -41 - -63
Disposals on divestments - - - - - - -
Cost at 31 December 2023 11,766 32,638 514 233 3,461 198 48,810
Amortisation and impairment at 1 January 2023 -1,818 -16,284 - -59 -3,009 - -21,170
Currency translation 7 260 - 4 4 - 275
Amortisation - -1,584 - -47 -118 - -1,749
Impairment - -127 - - - - -127
Amortisation and impairment on disposals 22 - - - 25 - 47
Amortisation and impairment at 31 December 2023 -1,789 -17,735 - -102 -3,098 - -22,724
Carrying amount at 31 December 2023 9,977 14,903 514 131 363 198 26,086
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 70
Intangible assets - continued
Note 11
Product rights at 31 December 2022 included
product rights not yet commercialised amounting
to DKK 1,973m.
In November 2022, Lundbeck’s Rexulti® achieved a sales
milestone of USD 1bn triggering the recognition of an
addition in the product rights of Rexulti® of DKK 359m
(USD 50m). The milestone was paid in the first quarter
of 2023.
Please refer to note 31.1 for information about additions
on acquisitions.
Impairment testing goodwill
As required by IFRS, intangible assets with indefinite
useful lives, intangible assets not yet available for use
and goodwill acquired in a business combination are
tested for impairment annually, irrespective of whether
there is any indication of impairment.
Management has performed impairment tests of
goodwill related to the investments in the subgroups.
The impairment test for 2023 did not result in
recognition of any impairment losses on goodwill.
Based on sensitivity analyses related to the impairment
test for 2023, it is Management’s opinion, that no
probable change in any key assumptions would result in
impairment losses
The impairment test for 2022 identified a need for
impairment of goodwill of DKK 113m related to
Ambulance US. During 2023, both revenue and earnings
for Ambulance US have developed positively.
DKKm Goodwill
Product
rights
Brands
Customer
contracts
Other
intangible
assets
Ongoing
projects
Total
Cost at 1 January 2022 11,769 31,780 556 263 3,451 133 47,952
Currency translation 257 886 -2 -12 6 1 1,136
Reclassifications/transfers - - - - 57 -57 -
Additions on acquisitions 4 - - - - - 4
Additions - 359 - - 83 74 516
Disposals -1 - -40 -1 -209 -20 -271
Disposals on divestments -174 - - - -41 - -215
Cost at 31 December 2022 11,855 33,025 514 250 3,347 131 49,122
Amortisation and impairment at 1 January 2022 -1,709 -14,419 -3 -12 -3,071 - -19,214
Currency translation 4 -382 2 3 -7 - -380
Amortisation
-
-1,396
-39
-51
-137
-
-1,623
Impairment -114 -87 - - - - -201
Amortisation and impairment on disposals 1 - 40 1 168 - 210
Amortisation and impairment on divestments
-
-
-
-
38
-
38
Amortisation and impairment at 31 December 2022 -1,818 -16,284 - -59 -3,009 - -21,170
Carrying amount at 31 December 2022 10,037 16,741 514 191 338 131 27,952
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 71
Intangible assets - continued
Note 11
Furthermore, in 2022, ALK closed down activities in
Turkey which resulted in recognition of impairment of
goodwill of DKK 1m.
Methodology used for Lundbeck
At 31 December 2023, goodwill related to Lundbeck
amounted to DKK 5,507m.
Goodwill has been tested at an aggregated level for
Lundbeck as one cash-generating unit (CGU).
In the impairment test of the CGU, based on the fair
value less cost of disposal, the market price of Lundbeck
is compared with its carrying amount.
Methodology used for ALK
At 31 December 2023, goodwill related to ALK amounted
to DKK 557m.
Goodwill has been tested at an aggregated level for
ALK as one CGU.
In the impairment test of the CGU, based on the fair
value less cost of disposal, the market price of ALK is
compared with its carrying amount.
Methodology used for Falck
At 31 December 2023, goodwill related to Falck
amounted to DKK 3,913m.
Impairment tests are carried out per business segment
which is the lowest level of cash-generating units (CGUs)
to which the carrying amount of intangibles, i.e.
goodwill and customer contracts, can be allocated and
monitored with any reasonable certainty.
Impairment tests are carried out on the business
segments Ambulance Europe, Ambulance US, Fire
services, Employee and Labour Market services,
Consumer and Technical services and Community
Health services.
Goodwill and earnings related to MedConnect A/S
acquired in October 2023 are not included in the
impairment test for 2023. From 2024, the business will
be included in the impairment test for Employee Labour
Market services.
Impairment test of the Falck brand
The carrying amount of the Falck brand is tested at
Falck Group level based on Falck’s Group-wide cash flows
(aggregate cash flows determined for each CGU) less the
total carrying amount of the goodwill and other non-
current assets. The impairment test shows significant
headroom from comparing the value in use to the
carrying amount of all assets in the Falck Group.
Key assumptions in the impairment test
The recoverable amounts for the CGUs are determined
based on the value-in-use.
In the impairment tests, the discounted values of the
future net cash flows of each of the CGUs value-in-use
are compared with their carrying amounts. The value-in-
use is calculated using certain key assumptions for the
expected future cash flows and applied discount factor.
The cash flow projections are based on financial budgets
and business plans approved by Management. In nature,
these projections are subject to judgement and
estimates that are uncertain, though based on
experience. In calculating the present value, discount
rates are applied using WACC, which includes estimates
and external sources.
The value-in-use calculation comprises the following key
assumptions:
• Revenue growth in the forecast period
• EBITA margin
• Discount rates
• Growth rate in terminal period
• Net working capital
Revenue growth
Revenue growth projections in the financial forecast for
2024-2028 are estimated based on current operations
and the expected market development for the
individual CGUs.
For Ambulance Europe, a decrease in revenue is
expected based on the current contract portfolio in the
Swedish market, but growth is expected from other
geographical areas and from pursuing new business
opportunities.
For Ambulance US, revenue growth is expected due to
change in contract models and extension of contracts.
Employee and Labour Market services are expecting an
increase in the revenue through organic growth and
launch of new products from 2024 to 2028.
Consumer and Technical services are expecting an
increase in revenue in the forecast period from new
services and organic growth.
Community Health services expects revenue will grow
from increased number of subscribers in the forecasting
period.
Fire Services also expects overall growth in the
forecasting period.
EBITA margin
When estimating the CGUs EBITA margin in the
financial forecast for 2024-2028, past experiences are
taken into consideration.
The EBITA margin in the forecasting period in
Ambulance Europe is expected to gradually improve
during the forecast period.
The EBITA margin in Ambulance US is still negatively
impacted by labour market conditions, but still expected
to be relatively stable in the forecasting period due to
revenue cycle management and other operational
efficiency initiatives.
The EBITA margin for Consumer and Technical services
is also expected to be stable in the forecasting period.
Employee and Labor Market services, Community Health
services and Fire services expect improvement in the
EBITA margin during the forecast period due to
continuous operational efficiency improvements.
Net working capital is based on historical experience for
each CGU and thus increases on a linear basis as the
level of activity increases.
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 72
Intangible assets - continued
Note 11
Discount rates and terminal growth
The discount rates for 2023 impairment testing
purposes are based on calculation of weighted average
cost of capital (WACC).
The cost of equity is calculated using Capital Asset
Pricing Model (CAPM). The beta applied at year-end
2023 is obtained from comparable peers. Market risk
premiums have been added based on observed market
data.
The cost of debt is based on Falck’s debt margin plus
the risk-free interest to Falck’s spread plus the risk-free
interest of the countries in which the CGU operates.
The terminal growth rates are equal to the International
Monetary Fund (IMF) projections of inflation in 2028.
Carrying amounts and key assumptions
The carrying amount of goodwill and customer
contracts, and the key assumptions used in the
impairment testing at 31 December are presented for
each CGU:
Impairment testing of other intangible assets
Other intangible assets in use with indefinite useful lives
are tested for impairment if there is any indication of
impairment. Furthermore, prior impairment losses are
reviewed for possible reversal at each reporting date.
Lundbeck
Material product rights
Vyepti®
The eptinezumab product rights (Vyepti®), which is an
investigational monoclonal antibody (mAb) for migraine
prevention targeting the calcitonin gene-related peptide
(CGRP), were acquired in 2019. The value of the product
rights was DKK 13,421m at the time of acquisition. At
31 December 2023, the carrying amount, net of
amortisation, was DKK 10,667m (DKK 11,840m at
31 December 2022). The remaining amortisation period
of the Vyepti® product rights is around 12 years.
Rexulti®
Rexulti® is a prescription medication used as an
adjunctive therapy to antidepressants for the
treatment of MDD and as a treatment for adults
with schizophrenia in certain markets. Rexulti® is
co-marketed in a partnership collaboration with Otsuka
Pharmaceuticals Co., Ltd. The total carrying amount of
Carrying amount Forecasting period Terminal period Applied discount rate
2023, DKKm Goodwill
1)
Customer
contracts
Total
Total growth
(avg.)
Margin (avg.) Growth
EBITA
margin
After tax Pre-tax
Ambulance Europe 347 - 347 2.4% 2.8% 2.0% 4.3% 7.2% 8.9%
Ambulance US 286 - 286 1.5% 7.4% 2.1% 8.8% 8.5% 10.8%
Fire Services 348 - 348 2.5% 5.9% 2.0% 7.1% 7.7% 9.4%
Employee and Labour Market services 899 131 1,030 11.0% 5.2% 2.0% 6.7% 7.3% 8.6%
Consumer and Technical services 1,534 - 1,534 6.6% 19.6% 2.0% 21.7% 7.1% 8.3%
Community Health services 499 - 499 12.3% 18.4% 3.5% 18.0% 11.9% 15.7%
Total 3,913 131 4,044
Carrying amount
Forecasting period
Terminal period
Applied discount rate
2022, DKKm
Goodwill
Customer
contracts
Total
Total growth
(avg.)
Margin (avg.)
Growth
EBITA
margin
After tax
Pre-tax
Ambulance Europe 302 - 302 -2.0% 2.9% 2.0% 4.2% 7.9% 9.4%
Ambulance US 301 - 301 -9.4% 3.6% 2.0% 3.5% 8.9% 11.9%
Fire Services 346 - 346 4.9% 7.2% 2.0% 8.5% 8.6% 10.6%
Employee and Labour Market services 853 191 1,044 6.3% 5.9% 2.0% 7.0% 7.9% 9.4%
Consumer and Technical services 1,482 - 1,482 5.0% 24.7% 2.0% 27.7% 7.9% 9.4%
Community Health services 432 - 432 11.1% 17.6% 3.4% 18.3% 14.6% 19.4%
Portfolio business 96 - 96 2.6% 15.2% 2.0% 15.7% 8.3% 10.1%
Total 3,812 191 4,003
1) The goodwill of Portfolio business has been reallocated due to the changes to the business segments. Therefore, the carrying amounts and the key assumptions are not directly comparable with 2022.
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 73
Intangible assets - continued
Note 11
the Rexulti® product rights amounted to DKK 2,143m,
net of amortisation, at 31 December 2023 (DKK 2,524m
at 31 December 2022). The remaining amortisation
period of the Rexulti® product rights is around six years.
Family of MAGLi compounds
A family of compounds; a first-in-class, small-molecule
inhibitor of monoacylglycerol lipase (MAGLi/MGLL)
currently being investigated in clinical trials for the
treatment of neurological disorders, and various
compounds in the pre-clinical phase, was acquired in
2019. The value of the family of compounds recognised
as product rights was DKK 1,853m at the time of
acquisition. At 31 December 2023, the carrying amount
was DKK 1,871m (DKK 1,871m at 31 December 2022). The
family of compounds is not yet commercialised,
consequently amortisation has not commenced.
Lundbeck performs impairment tests of product rights
not yet commercialised and for product rights available
for use, in case an indication of impairment is identified.
In the impairment tests of product rights, based on
value-in-use, the discounted expected future cash flows
for the specific asset tested are compared with the
carrying amount of the intangible asset. The expected
future cash flows are based on a forecast period, which
is the period used by Management for decision making,
with due consideration of patent expiry.
The assumptions used in the impairment test are based
on benchmarked external data and historical trends.
The key parameters in the calculation of the value-in-
use are revenue, earnings, working capital, discount rate
and the preconditions for the cash flow period.
Significant assumptions and estimates are applied to
the discounted expected future cash flows from the
product rights.
The four category elements in the table below are
considered when determining the key parameters for
the value-in-use calculation.
• Financial elements: Prices, rebates, quantities,
patient population, market shares, competition, fill
rates, prescription rates and Lundbeck costs
• Market elements: Healthcare reforms, price reforms,
market access, pharma restrictions, launch success,
product positioning, competing pharmaceuticals and
generics on the market
• R&D elements: R&D spend, collaborations, pipeline
success rate, product labelling and liaison with
regulatory bodies
• Other elements: Supply chain effectiveness and
strength and abilities of partners
The assumptions are based on experience, external
source of information and industry-relevant
observations for each product right.
The calculation of the value-in-use for product rights is
based on a weighted average discount rate pre-tax of
8.64% (9.36% in 2022).
Lundbeck’s impairment tests performed in 2023 and
2022 did not result in the recognition of any
impairment losses.
Impact of possible changes in key assumptions (product
rights not yet commercialised)
If the budgeted revenue had been 5% lower than
Management's estimates, the headroom would have
continued to be positive. If the discount rate after tax
applied to cash flows had been 0.5% higher, the
headroom would have continued to be positive.
The sensitivity analyses are based on a change in an
assumption while holding all other assumptions
constant. The method and types of assumptions used in
preparing the sensitivity analyses did not change
compared to the prior period. The potential changes in
key assumptions are considered within historic
variations experienced by the Group and thus
considered reasonably possible.
DySiS
The impairment test for 2023 identified a need for
impairment on product rights of DKK 127m based on a
value in-use calculation. The impairment loss was
related to continued lower-than-expected commercial
performance. In 2022, the impairment tests resulted in
an impairment of DKK 87m.
ALK and Falck
ALK’s and Falck’s impairment tests performed in 2023
and 2022 did not result in the recognition of any
impairment losses.
Impairment testing total
The impairment losses per intangible asset category can
be specified as follows:
Impairment loss per
intangible asset category,
DKKm
2023 2022
Goodwill
-
114
Product rights 127
87
Impairment loss total
127
201
The impairment loss has been recognised in the income
statement as follows:
Impairment loss recognised
in the income statement,
DKKm
2023 2022
Cost of sales
127
88
Other operating items, net -
113
Impairment loss total 127
201
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 74
Property, plant and equipment - continued
Note 12
Impairment amounted to DKK 11m, of which, DKK 10m
was attributable to DySiS’ production equipment with
no recoverable amount after impairment.
Note 12
Property, plant and equipment
DKKm
Land and
buildings
Plant and
machinery
Other fixtures
and fittings,
tools and
equipment
Leasehold
improvements
Prepayments
and assets
under
construction
Total
Cost at 1 January 2023
6,237
3,097 2,520 187 1,315 13,356
Currency translation -11
-10 3 1 -6 -23
Reclassifications/transfers 163
202 96 - -441 20
Additions 54
76 227 17 426 800
Disposals -37
-48 -190 -8 -1 -284
Transferred from right-of-use assets 61
- 14 3 - 78
Cost at 31 December 2023 6,467
3,317 2,670 200 1,293 13,947
Depreciation and impairment at 1 January 2023
-3,539
-2,222
-2,112
-142
-
-8,015
Currency translation -1
8 -2 - - 5
Depreciation -200
-199 -145 -15 - -559
Impairment
-
-
-10
-
-1
-11
Depreciation and impairment on disposals 33
48 80 7 1 169
Transferred from right-of-use assets -11
- -10 - - -21
Depreciation and impairment at 31 December 2023 -3,718
-2,365 -2,199 -150 - -8,432
Carrying amount at 31 December 2023 2,749
952 471 50 1,293 5,515
Carrying amount of property, plant and equipment provided as loan collateral
497
-
-
-
-
497
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 75
Property, plant and equipment - continued
Note 12
Impairment amounted to DKK 12m, of which, DKK 7m
was attributable to land and buildings related to
forestry activities in Scotland
DKKm
Land and
buildings
Plant and
machinery
Other fixtures
and fittings,
tools and
equipment
Leasehold
improvements
Prepayments
and assets
under
construction
Total
Cost at 1 January 2022
5,906
3,078 2,830 217 981 13,012
Currency translation 23
21 -3 3 5 49
Reclassifications/transfers
189
91 24 - -304 -
Additions on acquisitions
-
- 1 - - 1
Additions
66
51 156 2 637 912
Disposals
-32
-144 -356 -22 -4 -558
Disposals on divestments
-
- -143 -13 - -156
Transferred from right-of-use assets
85
- 11 - - 96
Cost at 31 December 2022
6,237
3,097 2,520 187 1,315 13,356
Depreciation and impairment at 1 January 2022 -3,356
-2,160 -2,363 -158 - -8,037
Currency translation
-4
-10
3
-2
-
-13
Depreciation -186
-192 -147 -15 - -540
Impairment
-10
-2 - - - -12
Depreciation and impairment on disposals
30
142
283
21
-
476
Disposals on divestments -
- 120 12 - 132
Transferred from right-of-use assets
-13
- -8 - - -21
Depreciation and impairment at 31 December 2022
-3,539
-2,222 -2,112 -142 - -8,015
Carrying amount at 31 December 2022 2,698
875 408 45 1,315 5,341
Carrying amount of property, plant and equipment provided as loan collateral
514
-
-
-
-
514
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 76
Right-of-use assets - continued
Note 13
The total cash outflow from recognised lease
agreements amounted to DKK 523m (DKK 626m in
2022) and includes repayment of lease liabilities and
interest.
For disclosures of the lease liabilities, see note 26.3
Lease liabilities.
Note 13
Right-of-use assets
DKKm
Land and
buildings
Other fixtures
and fittings, tools
and equipment
Total
Cost at 1 January 2023
2,395 920
3,315
Currency translation -30 -15
-45
Re-measurement 116 7
123
Additions on acquisitions 2 -
2
Additions 256 231
487
Disposals -155 -23
-178
Transferred to property, plant and equipment -61 -17
-78
Cost at 31 December 2023 2,523 1,103
3,626
Depreciation and impairment at 1 January 2023 -1,112 -521
-1,633
Currency translation 10 10
20
Depreciation
-327
-165
-492
Depreciation and impairment on disposals 153 22
175
Transferred to property, plant and equipment 11 10
21
Depreciation and impairment at 31 December 2023 -1,265 -644
-1,909
Carrying amount at 31 December 2023 1,258 459
1,717
DKKm
Land and
buildings
Other fixtures
and fittings, tools
and equipment
Total
Cost at 1 January 2022 2,472 753 3,225
Currency translation -42 34 -8
Re-measurement -3 -2 -5
Additions 158 180 338
Disposals -25 -16 -41
Disposals on divestments -80 -18 -98
Transferred to property, plant and equipment -85 -11 -96
Cost at 31 December 2022 2,395 920 3,315
Depreciation and impairment at 1 January 2022 -919 -396 -1,315
Currency translation 51 -9 42
Depreciation
-334
-151
-485
Reversal of impairment 7 - 7
Depreciation and impairment on disposals 13 9 22
Disposals on divestments
57
18
75
Transferred to property, plant and equipment 13 8 21
Depreciation and impairment at 31 December 2022 -1,112 -521 -1,633
Carrying amount at 31 December 2022 1,283 399 1,682
Amounts recognised in the income statement, DKKm 2023 2022
Expenses relating to short-term leases, not capitalised
39
46
Expenses related to low value leases, not capitalised 194
181
Interest expenses relating to lease liabilities 49
47
Depreciation 492
485
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 77
Biological assets - continued
Note 14
Biological assets comprise forestry activities in Scotland.
The fair value of the biological assets was based on a
calculation of the present value (by level 3 input from
the fair value hierarchy) of future expected cash flows
from the forests. The cash flows were calculated based
on harvesting volumes according to the Group’s current
plan and assessments of future price and cost changes.
The cash flows were discounted using discount rates
of 2.20 - 3.60% (2.30 – 3.60% at 31 December 2022).
At 31 December 2023, the Group owned 3,407 hectares
of forest farming land being managed actively.
The carrying amount of land related to forestry
activities is recognised under property, plant and
equipment.
The investments in Ellab and Ferrosan Medical Devices
Group were completed end October 2023 and late
December 2022, respectively.
Note 14
Biological assets
DKKm 2023 2022
Fair value at 1 January
289
195
Currency translation 7
-10
Reclassifications/transfers -20
-
Additions 33
81
Disposals -
-3
Change in fair value 8
26
Fair value at 31 December 317
289
Note 15
Investments in associates
DKKm 2023 2022
Cost at 1 January
874 -
Additions
1,778
874
Cost at 31 December 2,652 874
Adjustments at 1 January - -
Share of result for the year
-34 -
Other adjustments
1 -
Adjustments at 31 December
-33 -
Carrying amount at 31 December 2,619 874
Associates
Registered
office
Ownership
Ferrosan Medical Devices HoldCo ApS Søborg 30%
Echo TopCo A/S (Ellab A/S) Hellerup 34%
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 78
Financial assets - continued
Note 16
The Group’s financial investments classified as financial
assets at fair value through profit or loss primarily
relate to Invest’s investments. These investments are
made based on an investment policy approved by the
Board of Directors. The strategy aims for an appropriate
diversification of investments across different asset
classes and geographical markets to achieve an
appropriate diversification of interest rate, exchange
rate, credit and equity risks on the financial
investments. The purpose is to reduce the risk of losses
but also to retain the prospect of gaining a long-term
return on the investments.
Financial assets include investments in listed and
unlisted equity instruments and securities, including life
science investments recognised at their fair value.
Investments in unlisted equity instruments and
securities amounted to DKK 6,190m at 31 December
2023 (DKK 5,312m at 31 December 2022).
The assessment of fair value of unlisted investments is
subject to considerable uncertainty. This applies
especially to life science investments because the value
of these businesses is linked to the companies’ often
long-term investment in the development of new
pharmaceuticals and technologies. Please refer to note
32.3 for information about applied valuation methods
for the determination of fair value.
Credit risks
Credit risks relating to the Group’s financial investments
primarily relate to investment in bonds and unlisted
funds investing in loans to businesses.
To limit the credit risk, a proportion of this asset class
has been invested in Danish government and mortgage
bonds with a high credit rating. To achieve a higher
return, the Group also invests in corporate bonds.
Equity risks
Equity risks relate to the Group’s holding of listed and
unlisted shares, including private equity funds, as part
of the Group’s investment operations. Most of these
investments are placed in listed shares.
To limit the risk of losses on these shares, the
investments are diversified across different geographical
regions and sectors in accordance with the applicable
investment policy. Derivative financial instruments are
used to manage the equity risk. The instruments can be
used both for risk management purposes and as an
alternative to selling or buying the underlying assets.
Other things being equal, a 10% decrease/increase in
equity prices would decrease/increase profits after tax
by DKK 1,430m and DKK 1,372m respectively (decrease by
DKK 1,111m and increase by DKK 1,041m in 2022).
For further information on risks relating to the Group’s
financial investments, see note 21 Liquidity and note 32
Financial risks and financial instruments.
Financial assets included in Invest and BioCapital are
measured at fair value through profit or loss. Other
receivables are measured at amortised cost. At
31 December 2023, investments in associates included
in Lundbeckfonden’s investment strategy amounted to
DKK 1,982m (DKK 1,236m at 31 December 2022). The
associates are not individually material. Consequently,
financial information about the associates are not
disclosed.
Note 16
Financial assets
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 79
Financial assets - continued
Note 16
DKKm
Danish mortgage
and government
bonds
Credit bonds
and loans
Equities
Private equity
funds and other
unlisted funds
Derivative financial
instruments
Other receivables Total
Carrying amount at 1 January 2023
3,246 3,003
13,202 2,709 211 137 22,508
Additions 2,134 195
2,386 788 510 17 6,030
Disposals -2,845 -794
-2,750 -201 -585 - -7,175
Value adjustments, year-end 78 120
3,001 48 -93 -94 3,060
Carrying amount at 31 December 2023 2,613 2,524
15,839 3,344 43 60 24,423
Invest 2,613 2,524
13,484 3,344 43 - 22,008
BioCapital - -
2,355 - - 60 2,415
2,613 2,524
15,839 3,344 43 60 24,423
Recognised in:
Financial assets 2,468 2,133
15,839 3,344 43 60 23,887
Securities 145 391
- - - - 536
2,613 2,524
15,839 3,344 43 60 24,423
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 80
Financial assets - continued
Note 16
Please refer to note 32 for information about exchange
rate and interest rate risks.
DKKm
Danish mortgage
and government
bonds
Credit bonds
and loans
Equities
Private equity
funds and other
unlisted funds
Derivative financial
instruments
Other receivables Total
Carrying amount at 1 January 2022 2,689
3,111
16,641 2,745 99 126 25,411
Additions 2,962 634
913 384 429 27 5,349
Disposals -2,266
-450
-2,007 -260 -636 - -5,619
Transferred 166
14
5 -180 - -5 -
Value adjustments, year-end -305
-306
-2,350 20 319 -11 -2,633
Carrying amount at 31 December 2022 3,246
3,003
13,202 2,709 211 137 22,508
Invest 3,246 3,003
11,945 2,709 211 - 21,114
BioCapital
-
-
1,257
-
-
137
1,394
3,246 3,003
13,202 2,709 211 137 22,508
Recognised in:
Financial assets 2,444 2,842
13,202 2,709 214 137 21,548
Securities 802
161
- - - - 963
Other payables -
-
- - -3 - -3
3,246
3,003
13,202 2,709 211 137 22,508
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 81
Deferred tax - continued
Note 17
Temporary differences between the carrying amount
and the tax base:
Management estimates future income according to
budgets, forecasts, business plans and initiatives
scheduled for the coming years, which support the
recognition of deferred tax assets. When forecasting the
utilisation of tax assets, the Group applies the same
assumptions as for impairment testing. See note 11
Intangible assets.
Accordingly, at 31 December 2023, all deferred tax assets
relating to tax losses carried forward in Denmark going
back to 2015 were capitalised in the amount of DKK
961m (DKK 1,121m at 31 December 2022).
US tax losses and tax credits stemming from
acquisitions have been recognised at an amount of DKK
242m (DKK 424m in 2022), equalling the expected
utilisation within a foreseeable future, whereas an
amount of DKK 15m (DKK 15m in 2022) has not been
recognised in the balance sheet.
Global minimum top-up tax (Pillar II)
The Group is headquartered in Denmark, which has
enacted new legislation to implement the global
minimum top-up tax. In 2024, the Group is not expected
to be materially impacted by OECD’s/EU’s Pillar II Model
Rules and local implementation hereof.
However, since the newly enacted tax legislation
in Denmark is only effective from 1 January 2024,
there is no current tax impact for the year ended
31 December 2023.
The Group has applied a temporary mandatory relief
from deferred tax accounting for the impacts of the
top-up tax and accounts for it as a tax payable when
incurred, see note 1 Basis for preparation (changes in
material accounting policy information). In 2024, the
Group is not expected to be materially impacted by
OECD’s/EU’s Pillar II Model Rules and local
implementation hereof.
Note 17
Deferred tax
DKKm
Balance at
1 January
Currency
translation
Adjustment of
deferred tax at
beginning of year
Addition on
acquisition of
businesses etc.
Movements
during the year
Balance at
31 December
2023
Non-current assets 3,731
-82 1 9 -22 3,637
Current assets -368
3 4 - 98 -263
Other -252
16 23 1 -55 -267
Provisions in subsidiaries -423
-2 -51 - -137 -613
Tax loss carry-forwards etc. -1,480
32 -42 -1 135 -1,356
Research and development activities (tax credits) -137
5 - - -1 -133
Deferred (tax assets)/tax liabilities 1,071
-28 -65 9 18 1,005
2022
Non-current assets 3,658
104 -36 -1 6 3,731
Current assets
-449
1 -3 2 81 -368
Other
-357
-5 -14 2 122 -252
Provisions in subsidiaries
-384
-11 -32 - 4 -423
Tax loss carry-forwards etc.
-1,531
-18 58 5 6 -1,480
Research and development activities (tax credits)
-87
- - - -50 -137
Deferred (tax assets)/tax liabilities
850
71
-27
8
169
1,071
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 82
Deferred tax - continued
Note 17
Unrecognised deferred tax assets primarily relate to net
operating losses and tax credits not expected to be
utilised within a foreseeable future. The majority of the
tax losses have no expiry date.
DKKm 2023 2022
Deferred tax assets relate to the following items:
Non-current assets -44 -21
Current assets
368 456
Provisions and payables
164 137
Other
164 186
Provisions in subsidiaries
613 423
Tax value of tax loss carry-forwards etc.
1,356 1,480
Research and development activities (tax credits)
133 137
Offset within legal tax entities and jurisdictions
-1,284 -1,474
Total
1,470 1,324
Deferred tax liabilities relate to the following items:
Non-current assets 3,593 3,710
Current assets
105 88
Other
61
71
Offset within legal tax entities and jurisdictions -1,284 -1,474
Total
2,475 2,395
Deferred tax, net -1,005 -1,071
DKKm 2023 2022
Unrecognised deferred tax assets:
Unrecognised deferred tax assets at 1 January 396
338
Currency translation -9 7
Prior-year adjustments - 84
Additions 28 51
Disposals - -33
Recognised -236 -51
Unrecognised deferred tax assets at 31 December 179 396
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 83
Inventories - continued
Note 18
The provision for obsolescence and write-down to net
realisable value for the year amounted to DKK 560m
(DKK 368m). Out of the total, DKK 312m (DKK 228m)
relates to a Vyepti provision for obsolescence recognised
in Cost of sales in the year as a consequence of a fixed
batch quantity supply agreement effective for five years
up to 30 June 2023, which was acquired as part of the
acquisition of Alder BioPharmaceuticals Inc. in 2019, a
planned transition of the antibody cell line, higher than
originally expected production yields and a slower
launch ramp-up as a consequence of the pandemic.
Management’s estimate takes into consideration
assumptions on inventory-estimated usage, approval
dates, expected shelf life, etc. Total balance of Vyepti
provision for obsolescence is DKK 540m (DKK 228m at
31 December 2022).
Inventories at 31 December 2023 of DKK 2,724m (DKK
1,984m at 31 December 2022) are expected to be utilised
after more than 12 months.
Credit risks
The Group’s products are sold primarily to distributors
of pharmaceuticals, pharmacies and hospitals. Services
are sold to public authorities, other large customers and
small individual customers.
No single customer contributed 10% or more to total
revenue. The Group has no significant reliance on
specific customers. Internal procedures for evaluating
specific credit risks from new customer relationships,
and changes to the risk profile of existing relationships,
ensure that the risk of loss is reduced to an acceptable
level.
Note 18
Inventories
DKKm 2023 2022
Raw materials and consumables
527 481
Work-in-progress 3,217 2,714
Manufactured goods and goods for resale
2,148 2,123
Prepayments
- 73
Total
5,892 5,391
Indirect costs of production 1,504 1,301
Impairment loss for the year
441 119
Inventories calculated at net realisable value
100
91
The total cost of goods sold is included in cost of sales in the amount of 3,574 3,165
Note 19
Trade receivables
Trade receivables, DKKm Receivables, gross Loss allowance 2023 Total
Expected loss rate %
Days past due
Not due 4,007 11 3,996 0%
1 month to 6 months 1,119 179 940 16%
6 months to 12 months 60 14 46 23%
More than 12 months 55 33 22 60%
Total 5,241 237 5,004
Trade receivables, DKKm Receivables, gross Loss allowance 2022 Total
Expected loss rate %
Days past due
Not due 3,846 10 3,836 0%
1 month to 6 months 850 128 722 15%
6 months to 12 months 101 29 72 29%
More than 12 months 56 26 30 46%
Total 4,853 193 4,660
DKKm
2023
2022
Allowance for doubtful trade receivables:
Allowance at 1 January 193
160
Divestments
-
-7
Losses recognised -158
-112
Adjustment for the year 207
151
Currency translation
-5
5
Reversal -
-4
Allowance at 31 December 237
193
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 84
Contract assets - continued
Note 20
Securities are classified as financial assets measured at
fair value through profit or loss.
Liquidity and credit risk and capital structure
With the present capital structure, the Group is well-
consolidated. The Group aims to retain adequate cash
resources to support business development and
flexibility in case of changes to the market situation,
potential acquisition activities and product in-licensing
opportunities. This is achieved through a combination
of liquidity management, ultra-liquid assets and
guaranteed and unguaranteed credit facilities. The
capital structure is considered appropriate relative to
the Group's strategic plans.
The credit risk of cash, bank balances and derivatives
(forward exchange contracts, currency options, interest-
rate options and share options) is limited because the
Group only deals with banks with a high credit rating. To
further limit the risk of loss, internal limits have been
defined for the credit exposure accepted towards the
banks with which the Group collaborates. Pursuant to
the Group’s policies, the credit lines are presented to the
Board of Directors and boards of directors in sub-
groups, for approval. Furthermore, the Group aims to
maintain counterparty diversification to avoid material
concentration at individual counterparties. The Group
also uses collateral agreements (e.g., International
Swaps and Derivatives Association (ISDA) and Global
Master Repurchase Agreement (GRMA)) and exchange
of collateral with counterparties with which the Group
has hedging business.
Note 20
Contract assets
DKKm 2023 2022
Contract assets (not invoiced)
410
326
Contract assets impairments -2
-4
Total 408
322
Expected loss rate 1% 1%
Note 21
Liquidity
DKKm 2023 2022
Cash and bank balances, Invest
399 613
Cash and bank balances, subsidiaries 5,681 3,996
Cash and bank balances at 31 December
6,080 4,609
Securities with a maturity of less than 3 months 85 114
Securities with a maturity of more than 3 months
451 849
Securities at 31 December
536
963
Cash, bank balances and securities at 31 December 6,616 5,572
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 85
Capital base - continued
Note 22
The present statutes of Lundbeckfonden were approved
by the Board of Directors on 27 March 2023. The Danish
Business Authority acts as supervisory authority.
Of the Foundation’s profit before tax less non-
distributed earnings in the subsidiaries and associates,
at least 20% must first be allocated to the capital base.
Currency translation of foreign subsidiaries and
currency translation concerning additions to net
investments in foreign subsidiaries and tax related to
these items amounted to a net loss of DKK 316m (net
gain of DKK 505m in 2022), and are recognised in the
currency translation reserve in equity. Other items and
tax related to such items are recognised in reserve for
hedging transactions at a net loss of DKK 91m (net gain
of DKK 318m in 2022).
Note 22
Capital base
Capital base, DKKm 2023 2022 2021 2020 2019
Capital base at 1 January
4,162 3,901 3,461 3,236 3,114
Increase in capital base 195 261 440 225 122
Capital base at 31 December
4,357 4,162 3,901 3,461 3,236
Note 23
Other reserves
DKKm 2023 2022
Reserve for future grants:
Balance at 1 January 1,500 1,500
Grants for the year
-580 -539
Transferred to provision for future grants
580 539
Balance at 31 December
1,500 1,500
Currency translation reserve:
Balance at 1 January 1,088 583
Currency translation for the year concerning foreign subsidiaries and additions to net investments in
foreign subsidiaries
-308
479
Tax in relation hereto -8 26
Balance at 31 December
772 1,088
Hedging reserve:
Balance at 1 January 156 -162
Deferred gains/losses on cash flow hedge, exchange rate
117 -347
Deferred gains/losses on cash flow hedge, interest rate
-19 39
Deferred gains/losses on cash flow hedge, price
-78 128
Exchange gains/losses, hedging, transferred to revenue
-137 588
Tax in relation hereto
26 -90
Balance at 31 December
65 156
Other reserves at 31 December 2,337 2,744
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 86
Non-controlling interests - continued
Note 24
Lundbeckfonden's subsidiaries with significant non-
controlling interests include the following:
The minority shareholder’s share of goodwill in acquired
businesses in Falck is recognised in the consolidated
financial statements. Thus, goodwill of DKK 1,791m
(DKK 1,791m at 31 December 2022) arising at the time of
the Foundation’s acquisition of Falck is not recognised
in the consolidated financial statements.
Note 24
Non-controlling interests
DKKm 2023 2022
Non-controlling interests at 1 January
8,593 7,801
Share of profit/loss for the year
1,114
1,337
Share of other comprehensive income for the year -138 337
Incentive programmes
18 18
Dividend
-285
-861
Buyback of shares from non-controlling interests -13 -14
Sale of treasury shares
5 25
Change in non-controlling interests
-5
-44
Repurchase obligation of treasury shares -5 -
Capital increase
1 -
Other adjustments
1
4
Tax on other transactions in equity 1 -10
Non-controlling interests at 31 December
9,287 8,593
Non-controlling
interests
Lundbeckfonden's
percentage of votes
Registered office
H. Lundbeck A/S 31%
76%
Valby
ALK-Abelló A/S 60% 67%
Hørsholm
Falck A/S 42% 58%
Copenhagen
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 87
Non-controlling interests - continued
Note 24
Lundbeck
ALK
Falck
DKKm
2023
2022
2023
2022
2023
2022
Income statement:
Revenue 19,912
18,246
4,824 4,511
11,913 12,647
Profit (loss) for the year
2,290
1,916
486 335
334 921
Total comprehensive income
1,848
2,913
448 466
382 808
Profit (loss) for the year attributable to non-controlling interests
704
591
289 199
141 569
Balance sheet:
Non-current assets 24,118
26,040
3,758 3,663
6,925 6,607
Current assets
13,289
11,412
2,968 2,645
2,081 2,107
Non-current liabilities
7,372
8,474
965 921
3,637 3,105
Current liabilities
7,990
8,199
1,314 1,399
3,115 3,481
Equity
22,045
20,779
4,447 3,988
2,254 2,128
Carrying amount of non-controlling interests of equity
6,783
6,406
2,643 2,368
-153 -214
Statement of cash flows:
Cash flows from operating activities 4,080
3,519
667 416
554 -113
Cash flows from investing activities
-498
-1,892
-375 -351
-184 882
Cash flows from financing activities
-2,085
-387
-31
-42
-384
-1,922
Net cash flow for the year 1,497
1,240
261 23
-14 -1,153
Dividends paid to the non-controlling interests during the year
178
122
- -
107 739
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 88
Provisions - continued
Note 25
25.1 Pensions and similar obligations
Defined contribution plans
In defined contribution plans, the employer is obliged to
pay a certain contribution to a pension fund or the like
but bears no risks regarding the future development in
interest, inflation, mortality, disability rates etc.,
regarding the amount to be paid to the employee.
The cost of defined contribution plans, representing
contributions to the plans, amounted to DKK 717m in
2023 (DKK 695m in 2022).
Defined benefit plans
The defined benefit plans guarantee employees a
certain level of pension benefits for life. The pension is
based on seniority and salary at the time of retirement.
The Group bears the risks regarding the future
development in interest, inflation, mortality, disability
rates etc. regarding the amount to be paid to the
employee.
The Group has defined benefit plans in a few countries.
The most important plans comprise current and former
employees in France, Germany, Switzerland and the UK.
Actuarial assumptions
The following were the key actuarial assumptions at the
reporting date.
Note 25
Provisions
DKKm
Note
2023 2022
Provisions can be specified as follows:
Pensions and similar obligations 25.1 423 408
Other provisions 25.2
1,665 1,595
Total
2,088 2,003
Provisions break down as follows:
Non-current assets
-54
-58
Non-current
935 762
Current
1,207 1,299
Total
2,088 2,003
DKKm 2023 2022
Retirement benefit obligations and similar obligations:
Present value of defined benefit plans 631
589
Limitation due to asset ceiling -
3
Fair value of plan assets -315
-298
Defined benefit plans at 31 December 316
294
Other pension-like obligations 107
114
Retirement benefit obligations and similar obligations at 31 December
423
408
Retirement benefit obligations and similar obligations break down as follows:
Non-current assets -54
-58
Non-current liabilities 476
465
Current liabilities 1
1
Retirement benefit obligations and similar obligations at 31 December 423
408
Key assumptions for the most significant plans 2023 2022
Discount rate
3.30-4.50%
3.70%-5.20%
Inflation rate 2.25-3.05%
2.35%-3.65%
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 89
Provisions - continued
Note 25
25.1 Pensions and similar obligations – continued
Assumptions regarding future longevity are set based
on actuarial advice in accordance with published
statistics and experience in each country. The
longevities underlying the values of the defined benefit
obligation for the most significant plans were as follows:
Sensitivity analysis
The most significant assumptions used in the
calculation of the obligation for defined benefit plans
are discount rate, inflation rate and assumed life
expectations on retirement age for current pensioners.
An increase in the discount rate of 0.25 of a percentage
point would result in a decrease in the obligation of
approximately DKK 19m, before tax (DKK 18m at
31 December 2022) and vice versa. An increase in the
inflation rate of 0.25 of a percentage point would result
Shares and bonds are measured at fair value based on
quoted prices in an active market. Insurance contracts
and other assets are not based on quoted prices in an
active market.
in a decrease in the obligation of approximately
DKK 3m, before tax (increase of DKK 3m at 31 December
2022) and vice versa. An increase in the life expectancy
of 1 year would result in an increase in the obligation of
approximately DKK 22m, before tax (DKK 20m at
31 December 2022) and vice versa. The sensitivity
analysis indicates how a change in the individual
assumptions would change the obligation. However,
the assumptions will most likely be correlated and
consequently result in a different obligation.
Years 2023 2022
Assumed life expectations on retirement age for current pensioners
Female 23.10-24.20
24.00-24.30
Male 20.00-21.40
21.00-21.80
Assumed life expectations on retirement age for current employees (future pensioners)
Female 25.30-26.40
25.60-26.00
Male 22.60-23.50
23.00-23.10
% distribution 2023 2022
The fair value of the plan assets breaks down as follows:
Shares 32
33
Bonds 17
16
Property 12
12
Insurance contracts 21
23
Other assets 18
16
Total 100
100
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 90
Provisions - continued
Note 25
25.1 Pensions and similar obligations – continued
The expected contribution for 2024 for the defined
benefit plans was DKK 28m (DKK 28m in 2023).
Other obligations of a retirement benefit nature
An obligation at 31 December 2023 of DKK 107m
(DKK 114m at 31 December 2022) was recognised to cover
other obligations of a retirement benefit nature, which
primarily include post-employment benefits in a
number of subsidiaries. The benefit payments are
conditional upon specified requirements being met.
DKKm 2023 2022
Change in present value of defined benefit plans:
Present value of defined benefit plans at 1 January 589
815
Effect of foreign exchange differences 11
-6
Current service costs 6
9
Pension expenses 5
8
Interest expenses relating to the obligations 23
11
Experience and assumptions adjustments 22
-240
Benefits paid -26
-17
Used provision -1
-3
Employee contributions 1
1
Other adjustments 1
1
Additions on acquisitions -
2
Divestments -
8
Present value of funded pension obligations at 31 December 631
589
Change in fair value of plan assets:
Fair value of plan assets at 1 January 298
302
Effect of foreign exchange differences 13
-7
Interest income on plan assets 14
5
Experience adjustments -6
-7
Contributions 10
10
Benefits paid -13
-5
Employee contributions 1
1
Administration fee -1
-1
Return on plan assets -1
-
Fair value of plan assets at 31 December 315
298
Realised return on plan assets 8
-2
DKKm 2023 2022
Specification of expenses recognised in the income statement:
Current service costs
6
9
Pension expenses 5
8
Interest expenses relating to the obligations 9
6
Administration fees 1
1
Total expenses recognised 21
24
Specification of amount recognised in the statement of comprehensive income:
Actuarial (gains)/losses 25
-230
Total expenses recognised 25
-230
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 91
Provisions - continued
Note 25
25.2 Other provisions
Discounts and rebates
The most significant sales deductions are in the USA
and comprise discounts and rebates given in connection
with sales under US Federal and State Government
Healthcare programmes, primarily Medicaid.
Management’s estimate of discounts and rebates is
based on a calculation which includes a combination of
historical product/population utilisation mix, price
increases, program/market growth and state-specific
information. Further, the calculation of rebates involves
legal interpretation of relevant regulations and is
subject to changes in interpretive guidance from
governmental authorities. The obligations for discounts
and rebates are incurred at the time the sale is
recorded; however, the actual rebate related to a specific
sale may be invoiced by the authorities six to nine
months later. In addition to this billing time lag, there is
no statute of limitations for states to submit rebate
claims; thus, rebate adjustments in any particular period
may relate to sales from a prior period. Moreover, when
a product loses exclusivity, shifts in payer mix may
cause Medicaid claims/estimates to be more volatile.
Other
At 31 December 2023, other comprised liabilities for legal
disputes, environmental provisions, obligations in
relation to employee benefits, restructuring provision,
etc.
DKKm
Discount and
rebates
Product
returns Other Total
Other provisions at 1 January 2023
890 146 559 1,595
Currency translation -24 -6 -8 -38
Provisions charged 1,629 86 437 2,152
Provisions used during the year -1,877 -20 -105 -2,002
Unused provisions reversed - - -73 -73
Reclassified to and from other balance sheet accounts - - 31 31
Other provisions at 31 December 2023 618 206 841 1,665
Other provisions at 31 December can be specified as follows:
Non-current provisions - 113 346 459
Current provisions 618 93 495 1,206
Total 618 206 841 1,665
DKKm
Discount and
rebates
Product
returns Other Total
Other provisions at 1 January 2022 923 85 897 1,905
Currency translation 59 3 15 77
Divestments - - -12 -12
Provisions charged 2,096 171 216 2,483
Provisions used during the year -2,166 -112 -301 -2,579
Unused provisions reversed -22 -1 -256 -279
Other provisions at 31 December 2022 890 146 559 1,595
Other provisions at 31 December can be specified as follows:
Non-current provisions - 68 229 297
Current provisions 890 78 330 1,298
Total 890 146 559 1,595
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 92
Bank debt, bond debt and borrowings - continued
Note 26
Note 26
Bank debt, bond debt and borrowings
DKKm Note 2023 2022
Debt to financial institutions and others can be specified as follows:
Debt to financial institutions etc.
6,826 7,980
Lease liabilities
1,799 1,689
Total
8,625 9,669
Can be specified as follows:
Non-current liabilities
Mortgage debt 26.1 520 551
Bank debt and bond debt 26.2
6,013 7,034
Lease liabilities
26.3
1,323
1,280
Total
7,856 8,865
Current liabilities
Mortgage debt 26.1 29 28
Bank debt etc. 26.2
264 367
Lease liabilities 26.3
476 409
Total
769 804
Total debt
8,625
9,669
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 93
Bank debt, bond debt and borrowings - continued
Note 26
26.1 Mortgage debt
Fair value was calculated by applying the market value
of the underlying bonds at 31 December and therefore
measured by level 1 input.
DKKm 2023 2022
Mortgage debt by maturity:
Within 1 year 29
28
Between 1 and 5 years 166
112
More than 5 years 354
439
Mortgage debt at 31 December 549
579
DKKm Currency/expiry
Fixed/floating
Weighted
average
effective
interest rates
Amortised cost Nominal value Fair value
2023
Falck DKK/2035-
2045
Floating
5.0% 259
259
259
Falck DKK/2027-
2041
Fixed/floating
1.9% 87
87
77
ALK
DKK/2035
Floating
0.2% 203
203
206
Total
549
549
542
2022
Falck DKK/2035-
2045
Floating
2.50% 262
262
262
Falck DKK/2027-
2041
Fixed/floating
1.90% 96
96
96
ALK
DKK/2035
Floating
0.20% 221
221
225
Total
579
579
583
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 94
Bank debt, bond debt and borrowings - continued
Note 26
26.2 Bank debt and bond debt etc.
Falck
Falck’s primary debt financing is a syndicated Revolving
Credit Facility of EUR 350m (DKK 2,610m) expiring
January 2029.
Lundbeck
The eurobond is issued with a fixed coupon until
October 2027.
Fair value of issued bonds was calculated by level 1
input. Please refer to note 32.5 for information about
interest rate swaps.
DKKm 2023 2022
Bank debt and bond debt by maturity:
Within 1 year 264 367
Between 1 and 5 years
3,714 6,214
More than 5 years
2,299 820
Total
6,277 7,401
DKKm Currency
Expiry Fixed/floating
Weighted
average
effective
interest rates
Carrying amount Fair value
2023
Bank debt, Falck
DKK
2029
Floating
5.80% 1,121
1,121
Bank debt, Falck
EUR
2024
Floating
5.80% 1,181
1,181
Issued bonds, Lundbeck
EUR
2027
Fixed
0.88% 3,714
3,385
Other bank and finance loans, ALK
Various
2024
fixed
4.50% 261
261
Total
6,277
5,948
2022
Bank debt, Falck
DKK
2027
Floating
3.54% 979
979
Bank debt, Falck
EUR
2024
Floating
2.88% 1.118
1,115
Bank debt, Lundbeck
USD
2026
Floating
5.09% 1,393
1,393
Issued bonds, Lundbeck
EUR
2027
Fixed
0.88% 3,703
3,155
Other bank and finance loans, ALK
Various
2023
fixed
2.80-3.30% 208
208
Total
7,401
6,850
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 95
Contract liabilities - continued
Note 26
26.3 Lease liabilities
In 2023, the Group paid DKK 523m (DKK 626m in 2022)
for lease agreements, of which, interest expenses
amounted to DKK 49m (DKK 47m in 2022). See also
note 13 Right-of-use assets.
26.4 Development in mortgage debt, bank debt
and bond debt, etc.
Note 26
Bank debt, bond debt and borrowings - continued
DKKm 2023 2022
Leasing liabilities by maturity:
Within 1 year 476
409
Between 1 and 5 years 956
831
More than 5 years 367
449
Total 1,799
1,689
DKKm
Balance at
1 January
Cash flow,
net
Non-cash
changes
Balance at
31 December
2023
Long-term borrowings 7,585 -1,042 -10 6,533
Short-term borrowings 395 -102 - 293
Lease liabilities 1,689 -474 584 1,799
Total 9,669 -1,618 574 8,625
2022
Long-term borrowings 7,088 361 136 7,585
Short-term borrowings 263 131 1 395
Lease liabilities 1,959 -579 309 1,689
Total
9,310
-87
446
9,669
Note 27
Contract liabilities
DKKm 2023 2022
Stepped-pricing contracts
1
18
Prepayments 718
765
Total 719
783
Within 1 year 673
732
More than 1 year
46
51
Total 719
783
Revenue recognised from amounts included in contract liabilities at the
beginning of the year
712
1.112
Revenue recognised from performance obligations satisfied in previous years -17
-16
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 96
Other payables - continued
Note 28
At 31 December 2023, other payables included debt
related to salaries and holiday payment of DKK 1,943m
(DKK 1,798m at 31 December 2022), VAT and other taxes
of DKK 644m (DKK 454m at 31 December 2022) and
discounts and rebates of DKK 860m (DKK 774m at
31 December 2022).
Contingent consideration recognised through
acquisitions
As part of the acquisition of Alder BioPharmaceuticals,
Inc. (subsequently renamed Lundbeck Seattle
BioPharmaceuticals, Inc.), Lundbeck has recognised a
sales milestone dependent on predefined milestones
being reached. At 31 December 2023, the fair value of
the sales milestone amounted to DKK 306m (DKK 306m
at 31 December 2022).
As part of the acquisition of Abide Therapeutics, Inc.,
(subsequently renamed Lundbeck La Jolla Research
Center, Inc.), Lundbeck has recognised a payable related
to sales milestones dependent on predefined milestones
being reached. At 31 December 2023, the fair value of
the contingent consideration amounted to DKK 32m
(DKK 38m at 31 December 2022).
Contingent considerations are recognised at fair value.
The calculation of the fair value is based on the
discounted cash flow method (DCF method) which
comprises significant assumptions and estimates.
Expected timing of payment (using a specific discount
rate) and probability of success are key inputs to the fair
value of the contingent considerations.
The fair value adjustment of all contingent
considerations amounted to a net loss of DKK 6m, being
DKK 10m of financial expenses and DKK 4m of financial
income.
DKKm 2023 2022
Depreciation, amortisation
and impairment
2,941 2,867
Incentive programmes 68 56
Change in other provisions
104 -344
Change in valuation of
biological assets
-8 -26
Other adjustments
265 25
Total
3,370 2,578
DKKm 2023 2022
Change in inventories
-886 -1,022
Change in contract assets -85 -23
Change in receivables
-146 -697
Change in contract liabilities
-59 -223
Change in liabilities
-37 418
Total
-1,213 -1,547
Note 28
Other payables
DKKm 2023 2022
Trade payables
5,256 5,267
Contingent consideration 338 344
Derivative financial instruments
51 207
Other
4,031 4,065
Total
9,676 9,883
Other payables break down as follows:
Non-current 439 428
Current
9,237
9,455
Total 9,676 9,883
Note 29
Adjustment for non
-cash
operating items
Note 30
Working capital changes
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 97
Acquisitions and divestments - continued
Note 31
The amounts in the table represent the purchase price
allocation to the identifiable assets and liabilities, and
consequently also to goodwill at the acquisition date.
Acquisitions in 2023
In October 2023, Falck signed an agreement to acquire
all shares in MedConnect A/S. The acquisition was
completed by payment of agreed consideration on 31
October 2023 and from this point in time Falck assumed
control of MedConnect A/S.
Additional contingent and deferred consideration has
been agreed for payment 18 months after the closing
date.
MedConnect A/S is a leading company within online
medical consultations in Denmark via the digital
platform Hejdoktor which connects users with doctors
and healthcare specialists. Hejdoktor has around 1.7
million users. The acquisition is in line with the strategy
to strengthen the digital healthcare solutions.
MedConnect A/S is included in the business unit
Employee and Labour Market services from the date of
the acquisition.
The consideration paid on the closing date amounted to
DKK 108m. Adjusted for cash of DKK 7m, the net
consideration amounted to DKK 101m.
The additional contingent and deferred consideration,
which the sellers are entitled to under certain
conditions according to the Share Purchase Agreement
amounts to up to DKK 51m.
The contingent and deferred consideration depends on
the receivers’ continued employment in Falck, which
means that this part of the consideration will be
recognised as salary costs in special items on a straight
line basis over the 18 months after the closing date.
Transaction costs related to the acquisition amounted
to DKK 1m and have been included in special items.
Besides the value of the digital platform amounting to
DKK 40m, no assets or liabilities have been identified
which were not recognised in the company acquired on
the date of acquisition. Goodwill of DKK 71m has been
calculated. The recognised goodwill is not tax
deductible. Goodwill mainly represents the value of
operational synergies from the integration of
MedConnect A/S into Falck Group and the experienced
and knowledgeable MedConnect A/S workforce.
Net assets, goodwill, contingent assets and liabilities
recognised at the reporting date are to some extent still
provisional. Adjustments can be made for a period of 12
months from the acquisition date.
Valuation of intangible assets
An assessment was made of the value of the digital
platform in MedConnect A/S. The valuation thereof was
based on the “Multi Period Excess Earnings Method”
(MEEM-method) in which the value was calculated on
the basis of expected future cash flow. The principle
assumptions were expected earnings generated from
the acquired digital platform and the discounting rate.
It has been assessed that the value of the customer
agreements and the brand Hejdoktor cannot be
separated from the value of the digital platform.
Acquired assets included receivables from sales at fair
value of DKK 2m. The contractual gross receivable was
DKK 2m of which DKK 0 was deemed to be
unrecoverable as of the date of takeover.
MedConnect A/S’s revenue after the date of acquisition
amounted to DKK 6m, and the company was recognised
at a profit of DKK 1m in the consolidated financial
statements for 2023.
Had the company been consolidated at 1 January 2023,
the Group’s consolidated revenue and net profit for
2023 would have been DKK 36,687m and DKK 6,276m,
respectively.
Acquisitions in 2022
In March 2022, Falck signed an agreement to acquire all
shares in the Norwegian company Ringvoll
Bedriftshelsetjeneste AS. The acquisition was completed
by payment of the full consideration in March 2022,
from which point control was gained.
The acquisition was a strategic add-on to the acquisition
of Frisk Gruppen in 2021.
The total consideration amounted to DKK 8m. Adjusted
for cash of DKK 5m, the total net consideration
amounted to DKK 3m. There were no contingent or
deferred consideration arrangements and
Note 31
Acquisitions and divestments
31.1 Acquisitions of businesses etc.
DKKm 2023 2022
Assets:
Product rights 40
-
Property, plant and equipment, including right-of-use assets
2
1
Trade receivables 2
2
Cash and bank balances 7
5
Equity and liabilities:
Deferred tax -9
-
Lease liabilities -2
-
Trade payables
-1
-
Other payables -2
-4
Net assets acquired 37
4
Goodwill 71
4
Purchase price
108
8
Adjustment for cash and bank balances acquired -7
-5
Cash consideration for acquisitions 101
3
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 98
Acquisitions and divestments - continued
Note 31
indemnifications and there were no transaction costs
related to the acquisition.
No net assets were identified which were not recognised
in the company acquired on the date of acquisition.
Goodwill of DKK 4m was calculated. The recognised
goodwill was not tax deductible. Goodwill represented
the strategic strengthening of the market presence in
Østfold to secure an important nationwide presence in
Norway. During 2023, the provisional purchase Price
Allocations was completed. No adjustments were
applied to the provisional amounts.
Ringvoll Bedriftshelsetjeneste’s revenue after the date of
acquisition amounted to DKK 12m, and the company
was recognised at a profit of DKK 0 in the consolidated
financial statements for 2022.
Had the company been consolidated at 1 January 2022,
the Group’s consolidated revenue and net profit for
2022 would have been DKK 35,430m and DKK 1,211m,
respectively.
31.2 Divestment of businesses
In 2022, Falck divested the Roadside Assistance business
in Sweden, Norway, Finland, Estonia and Lithuania. Falck
also divested the Patient Transport Services in the UK.
Net assets divested amounted to DKK 407m. A total
gain from divestment of enterprises of DKK 808m was
recognised in the income statement.
DKKm 2023
2022
Assets
Goodwill -
293
Property, plant and equipment
-
24
Right-of-use assets -
23
Other current assets
-
234
Cash and bank balances
-
86
Equity and liabilities
Provisions -
-4
Current liabilities
-
-249
Net assets divested -
407
Recirculation of exchange rate adjustments from divestments -
12
Gains and losses on divestment of businesses, net
-
655
Sales price
-
1,074
Adjustment for cash and bank balances transferred -
-86
Adjustments related to prior years' divestments
-
10
Cash flows from divestment of subsidiaries and operations
-
998
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 99
Financial risks and financial instruments - continued
Note 32
The Group’s business activities imply that the results
and balance sheet may be affected by various financial
risks. The management of these risks is decentralised
and handled in Lundbeckfonden and in Lundbeck, ALK
and Falck based on policies and guidelines approved by
the Board of Directors or the boards of directors in the
subsidiaries.
See also note 16 Financial assets, note 19 Trade
receivables, and note 21 Liquidity for descriptions of
risks and the management thereof and note 32.5 for
information about derivative financial instruments.
32.1 Exchange rate risks
Exchange rate risks arise because the Group’s expenses
and income in different currencies do not match and
because the Group’s assets and liabilities denominated
in foreign currency do not balance, among other things,
due to Invest's and BioCapital’s investment assets. The
management of these risks is focused on risk
mitigation.
The Group applies various derivative financial
instruments to manage these risks. Some of these
instruments are classified as hedging instruments and
meet the accounting criteria for hedging future cash
flows. Changes in the fair value of these contracts are
recognised in the statement of comprehensive income
under other comprehensive income as they arise and, on
invoicing of the hedged cash flow, transferred from
other comprehensive income for inclusion in the same
item as the hedged cash flow. Hedging contracts that
do not meet the hedge criteria are classified as trading
contracts, and changes in the fair value are recognised
as financial items as they arise. The need for hedging is
assessed separately in Lundbeck, ALK and Falck and in
Invest.
Estimated impact from financial instruments on profit
for the year and equity from a 5% increase in year-end
exchange rates of the major currencies:
DKKm CAD CNY USD
2023
Profit 6
2
402
Equity -17
-27
173
2022
Profit 4
-
355
Equity -17
-35
-16
The shown sensitivities only comprise impact from
financial instruments and reflect a relative change of
the exchange rates at 31 December 2023 and 2022.
The sensitivity analysis includes derivatives, bank loans,
trade receivables, trade payables, intercompany lending
and borrowing, as those are the financial instruments
where the Group has the most currency exposure.
The profit impact comprises financial instruments that
remained open at the balance sheet date and which
have an impact on profit in the current financial year. It
includes foreign exchange differences relating to intra-
group balances that are not eliminated in the
consolidated financial statements. The calculation of
the estimated impact is based on the functional
currency of the entities where the financial instruments
are located. The profit impact is limited as the largest
liabilities are exchange rate adjusted in other
comprehensive income, being part of the Group’s
hedging structure.
The equity impact includes financial instruments that
remained open at the balance sheet date and which are
exchange rate adjusted in other comprehensive income.
The equity effects in 2023 and 2022 primarily consist of
exchange-rate adjustments on bank loans and cross-
currency swaps in USD that are designated as hedges of
net investment and foreign exchange differences on
outstanding cash flow hedging contracts.
Due to Denmark’s long-standing fixed exchange rate
policy against the euro and the expected continuation
of this policy, the foreign currency risk for the euro is
considered immaterial, and the euro is therefore not
included in the table.
32.2 Interest rate risks
Interest rate risk relates to the Group’s interest-bearing
assets and liabilities and, principally, to the Group’s
bonds classified as financial assets measured at fair
value through profit or loss. See note 26 Bank debt,
bond debt and borrowings and note 32.3 Fair value
hierarchy for financial assets and liabilities, measured at
fair value.
Interest income
The duration of the investments when selecting
financing and investment instruments is used to
manage the interest rate risk. In addition, the Group
uses derivative financial instruments to mitigate the
interest rate exposure. The use of financial instruments
to manage interest rate risk does not qualify for hedge
accounting, and the changes in fair value are therefore
recognised as financial income or expenses in an
ongoing process.
At 31 December 20223, the Group’s portfolio of bonds
had a duration of 3.00 years (0.27 years at 31 December
2022). Other things being equal, an increase of 1
percentage point in interest rates would increase the
Group’s profit after tax by DKK 103m (increase of DKK
15m at 31 December 2022).
At 31 December 2023, there were no derivatives at 31
December 2023 to manage interest rate risks because
the distribution of investments carrying floating and
fixed interest at the given times was deemed to be
satisfactory.
Interest expenses
Interest rate risk is primarily related to Lundbeck and
Falck. Lundbeck’s exposure to interest rate risk is low, as
the EUR 500m bond has a fixed coupon. For more
information about interest rate swaps, see note 26.2.
Falck’s exposure to interest rate risk relates to the part
of the mortgage loans which carry a floating interest
rate, and the syndicated loan of DKK 2,097m, which
carries variable interest.
32.2 Interest rate risks - continued
An interest rate change on bank debt and bond debt,
including interest rate swaps, of +/-1 percentage point
would decrease/increase profit for the year after tax by
Note 32
Financial risks and financial instruments
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 100
Financial risks and financial instruments - continued
Note 32
DKK 28m (DKK 22m in 2022) and increase/decrease
equity by DKK 28m in 2023 (DKK 27m at 31 December
2022) on an annual basis.
32.3 Fair value hierarchy for financial assets
and liabilities, measured at fair value
Level 1 includes financial assets for which the fair value
is measured based on quoted prices (unadjusted) in
active markets for identical assets. Level 2 includes
financial assets and financial liabilities for which the fair
value is measured based on directly or indirectly
observable inputs other than the quoted prices included
in level 1. Level 3 includes financial assets for which the
fair value is measured based on valuation methods
which include inputs not based on observable market
data.
The requirement for reclassifications between the levels
is evaluated continually during the year. For individual
financial assets and liabilities, it is evaluated whether
the most critical input variable in connection with
determination of fair value has changed from
unobservable to observable or the other way round. If
this is the case the asset or liability is reclassified from
the recent relevant level to new level from the time
when the change in input variable occurs.
Level 3 liabilities are determined on the basis of profit
prior to the right being exercised, multiplied by an
already agreed multiple, typically less net debt in the
relevant companies. When recognised in the balance
sheet, this liability is made up on the basis of earnings
and net debt at the time when the non-controlling
interests are expected to exercise their right to sell their
shares to the Group. The calculated liability typically
assumes an increase in earnings and a decrease in net
debt in the relevant companies as compared with the
value recognised in the financial statements.
The fair value of derivatives is determined by applying
recognised measurement techniques, whereby
assumptions are based on the market conditions
prevailing on the balance sheet date.
The fair value of contingent consideration is calculated
as the discounted cash outflows from future milestone
payments, taking probability of success into
consideration.
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 101
Financial risks and financial instruments - continued
Note 32
32.3 Fair value hierarchy for financial assets and liabilities, measured at fair value - continued
Financial assets and liabilities measured at fair value through profit or loss
31 December 2023, DKKm Level 1 Level 2 Level 3 Total
Financial assets
Financial assets, Invest
Danish mortgage and government bonds 2,468 - - 2,468
Credit bonds and loans 2,084 - 49 2,133
Equities 12,638 - 846 13,484
Private equity funds and other unlisted funds - 135 3,209 3,344
Derivative financial instruments - 43 - 43
Total financial assets, Invest 17,190 178 4,104 21,472
BioCapital
Equities 665 - 1,690 2,355
Receivables from sale of companies - - 13 13
Other receivables - - 47 47
Total BioCapital 665 - 1,750 2,415
Other financial assets 33 - 27 60
Securities (current assets) 536 - - 536
Total financial assets
18,424
178
5,881
24,483
Financial liabilities
Derivative financial instruments - - - -
Contingent consideration (see note 28) - - 338 338
Total financial liabilities - - 338 338
Financial assets and liabilities measured at fair value through other comprehensive income
31 December 2023, DKKm Level 1 Level 2 Level 3 Total
Financial assets
Derivative financial instruments - 84 49 133
Financial liabilities
Derivative financial instruments - 51 - 51
Financial assets and liabilities measured at fair value through profit or loss
31 December 2022, DKKm Level 1 Level 2 Level 3 Total
Financial assets
Financial assets, Invest
Danish mortgage and government bonds
2,444
-
-
2,444
Credit bonds and loans 2,638 - 204 2,842
Equities 11,082 - 863 11,945
Private equity funds and other unlisted funds - 277 2,432 2,709
Derivative financial instruments - 214 - 214
Total financial assets, Invest 16,164 491 3,499 20,154
BioCapital
Equities 504 - 753 1,257
Receivables from sale of companies - - 59 59
Other receivables - - 78 78
Total BioCapital 504 - 890 1,394
Other financial assets 54 - 27 81
Securities (current assets) 963 - - 963
Total financial assets 17,685 491 4,416 22,592
Financial liabilities
Derivative financial instruments - 3 - 3
Contingent consideration (see note 28) - - 344 344
Total financial liabilities - 3 344 347
Financial assets and liabilities measured at fair value through other comprehensive income
31 December 2022, DKKm
Level 1
Level 2
Level 3
Total
Financial assets
Derivative financial instruments - 277 128 405
Financial liabilities
Derivative financial instruments - 204 - 204
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 102
Financial risks and financial instruments - continued
Note 32
Applied valuation methods for the determination of fair
value of the material categories above are as follows:
32.3 Fair value hierarchy for financial assets and
liabilities, measured at fair value – continued
Financial assets measured at fair value according to level 3, DKKm 2023 2022
Carrying amount at 1 January
4,416 4,691
Additions 954 561
Disposals
-502 -662
Reclassification, from level 3 to level 1 in connection with IPOs
41 -126
Fair value adjustment
972 -48
Carrying amount at 31 December
5,881 4,416
Valuation method used Used unobservable inputs
Sensitivity in fair value in case of changes in
unobservable inputs
Danish mortgage and government bonds and
credit bonds (listed)
Closing prices according to exchange markets N/A N/A
Equities (listed) Closing prices according to exchange markets N/A N/A
Equities, real assets (unlisted) Capitalisation model Required rates on return 4.0-4.5% or cost if under construction
If required rate of return is reduced by 0.25pp the fair value
will be increased by DKK 103m
Equities, BioCapital (unlisted)
Trading multiples, relative adjustment based on predefined value
triggers/business plans, cost at recent transaction and price at
financing round
Trading multiples, value trigger assumptions, cost at recent
transaction and price at financing round
If group of investments increase by 1% the fair value will be
increased by DKK 17m
Private equity funds and other unlisted funds Adjusted reported net asset value (NAV)
Latest reported NAV adjusted for capital calls, capital returns and
pricing development (if relevant)
Data not accessible
Receivables including receivables from sale of portfolio companies Expected discounted cash flow N/A N/A
Securities (current assets) Closing prices according to exchange markets N/A N/A
Derivative financial instruments
Fair value of interest rate swaps is calculated as the present value of
estimated future cash flows based on observable yield curves. Fair
value of foreign exchange contracts is determined using forward
exchange rate at the balance sheet date. Fair value for share and
index options is based on closing prices according to exchange
markets
N/A N/A
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 103
Financial risks and financial instruments - continued
Note 32
The amounts in the tables are including interest.
32.4 Maturity dates for financial assets and financial liabilities
31 December 2023, DKKm
Less than
1 year
1-5 years
More than 5
years
Total
Carrying
amount
Effective
interest
Financial assets
Financial assets, Invest
Danish mortgage and government
bonds
53 586 4,129 4,768 2,468 -1-4%
Credit bonds and loans 504 2,038 204 2,746 2,133 0-44%
Derivative financial instruments 43 - - 43 43 -
Financial assets, BioCapital
Receivables from sale of portfolio
companies
- 13 - 13 13 -
Other receivables 17 57 1 75 47 10-16%
Securities (current assets) 580 - - 580 536
Financial assets at fair value through
profit or loss
1,197 2,694 4,334 8,225 5,240
Derivatives to hedge future cash flows
– exchange rate
85 - - 85 85 -
Derivatives to hedge future cash flows
– interest rate
- - - - - -
Derivatives to hedge future cash flows -
price
10 39 - 49 49 -
Financial assets at fair value through
other comprehensive income
95 39 - 134 134
Receivables 5,468 257 - 5,725 5,725 0-1%
Cash and bank balances 6,080 - - 6,080 6,080 -1-10%
Financial assets measured at
amortised cost
11,548 257 - 11,805 11,805
Total financial assets
12,840
2,990
4,334
20,164
17,179
31 December 2023, DKKm
Less than
1 year 1-5 years
More than 5
years Total
Carrying
amount
Effective
interest
Financial liabilities
Derivatives included in the trading
portfolio
- - - - - -
Contingent consideration
-
-
338
338
338
-
Financial liabilities at fair value
through profit or loss
- - 338 338 338
Derivatives to hedge future cash flows
– exchange rate
51 - - 51 51 -
Derivatives to hedge future cash flows
– interest rate
- - - - - -
Financial liabilities at fair value
through other comprehensive income
51 - - 51 51
Bank debt and bond debt etc. 476 4,563 2,707 7,746 6,826 0-6%
Leasing liabilities 519 1,034 394 1,947 1,799 0-13%
Other payables and non-disbursed
grants
8,532 1,483 - 10,015 10,015 2-4%
Financial liabilities measured at
amortised cost
9,527 7,080 3,101 19,708 18,640
Total financial liabilities 9,578 7,080 3,439 20,097 19,029
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 104
Financial risks and financial instruments - continued
Note 32
The amounts in the tables are including interest.
32.4 Maturity dates for financial assets and financial liabilities
31 December 2022, DKKm
Less than
1 year
1-5 years
More than
5 years
Total
Carrying
amount
Effective
interest
Financial assets
Financial assets, Invest
Danish mortgage and government
bonds
14 1,637 1,374 3,025 2,444 -2-4%
Credit bonds and loans 161 1,055 2,064 3,280 2,842 0-13%
Derivative financial instruments 214 - - 214 214 -
Financial assets, BioCapital
Receivables from sale of portfolio
companies
- 47 12 59 59 -
Other receivables 88 20 1 109 78 8-16%
Securities (current assets) 1,022 - - 1,022 963 -2-14%
Financial assets at fair value through
profit or loss
1,499 2,759 3,451 7,709 6,600
Derivatives to hedge future cash flows
– exchange rate 167 - - 167 167 -
Derivatives to hedge future cash flows
– interest rate
30 - - 30 30 4-6%
Derivatives to hedge future cash flows -
price
36 76 16 128 128 -
Financial assets at fair value through
other comprehensive income 233 76 16 325 325
Receivables 5,268 291 - 5,559 5,559 0%
Cash and bank balances 4,609 - - 4,609 4,609 -1-10%
Financial assets measured at
amortised cost
9,877 291 - 10,168 10,168
Total financial assets 11,609 3,126 3,467 18,202 17,093
31 December 2022, DKKm
Less than
1 year 1-5 years
More than
5 years Total
Carrying
amount
Effective
interest
Financial liabilities
Derivatives included in the trading
portfolio
3 - - 3 3 -
Contingent consideration
-
-
344
344
344
-
Financial liabilities at fair value
through profit or loss
3 - 344 347 347
Derivatives to hedge future cash flows
– exchange rate
114 - - 114 114 -
Derivatives to hedge future cash flows
– interest rate
9 - - 9 9 0-2%
Financial liabilities at fair value
through other comprehensive income
123 - - 123 123
Bank debt and bond debt etc. 576 7,646 572 8,794 7,980 0-6%
Leasing liabilities 434 668 675 1,777 1,689 1-8%
Other payables and non-disbursed
grants 8,772 1,283 - 10,055 10,055 -
Financial liabilities measured at
amortised cost
9,782 9,597 1,247 20,626 19,724
Total financial liabilities 9,908 9,597 1,591 21,096 20,194
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 105
Financial risks and financial instruments - continued
Note 32
Hedging part
The Group uses forward exchange contracts to hedge its
risks related to exchange rates. The fair value of the
effective part of the outstanding foreign exchange
contracts as at 31 December used as hedging
instruments and qualifying for hedge accounting in
respect of future transactions has been recognised
directly in equity through other comprehensive income
until the hedged transactions are recognised in the
income statement. Forward exchange contracts are
used to hedge investments in subsidiaries with a
functional currency other than Danish kroner.
32.5 Net outstanding forward exchange rate
transactions, currency options, interest rate swaps and equity options
Forward contracts, DKKm
Contractual value
according to hedge
accounting
Fair value at year-end
recognised in other
comprehensive income
Realised exchange
gains/losses for the
year recognised in the
income statement/
balance sheet
Average hedge prices of
existing forward
exchange contracts
Maturity
2023
CAD (sell position) 550
-2
6
502.33
Nov 2024
CNY (sell position) 364
11
43
98.04
Oct 2024
KRW (sell position) 230
1
4
0.53
Dec 2024
USD (sell position) 4,009
49
120
676.06
Nov 2024
Other currencies 1,123
-19
-34
-
Dec 2024
Forward contracts 6,276
40
139
2022
CAD (sell position) 237
9
-36
526.29
Nov 2023
CNY (sell position)
584
11
-55
102.83
Nov 2023
KRW (sell position)
227
-4
28
0.56
Dec 2023
USD (sell position)
4,896
81
-263
711.45
Oct 2023 / Dec 2023
Other currencies 1,057
-12
-87
-
Dec 2023
Forward contracts 7,001
85
-413
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 106
Financial risks and financial instruments - continued
Note 32
32.5 Net outstanding forward exchange rate transactions, currency options,
interest rate swaps and equity options
- Continued
Currency option contracts, DKKm
Contractual value
according to hedge
accounting
Fair value at year-end
recognised in other
comprehensive income
Realised exchange
gains/losses for the
year recognised in the
income statement/
balance sheet
Average hedge prices
of existing forward
exchange contracts Maturity
2023
CAD (sell position) 137 -3 8 482.97-495.64 Apr 2024
USD (sell position) 1,855 -3 -11 654.31-708.61 Nov 2024
Other 204 - 1
Currency option contracts 2,196 -6 -2
2022
CAD (sell position) 214 1 -9 525.87 – 567.14 Nov 2023
USD (sell position)
1,028
-31
-84
665.42 – 728.74
Sep 2023
Other - - -2
Currency option contracts 1,242 -30 -95
Interest rate collar/interest rate swap, DKKm
Contractual value
Market value
31 December
Gains/losses
recognised in other
comprehensive income
Fixed interest rate
Expiry
2022
USD interest rate swap 1,325
-9
39
1.56
Jul 2023
DKK interest rate swap 400
65
65
1.80
May 2052
DKK interest rate swap 250
-
-
2.60
Nov 2052
Interest rate collar/interest rate swap
1,975
56
104
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 107
Contractual obligations, contingent assets
and liabilities, and collaterals - continued
Note 33
Trading part
Contingent Assets and liabilities
Pending legal proceedings
The Group is involved in a number of legal proceedings,
including patent disputes and environmental matters,
the most significant of which are described below. Some
of these involve significant amounts and are subject to
considerable uncertainty. Management continuously
assesses the risks associated with the legal proceedings,
and their likely outcome. Management is of the opinion
that, apart from items recognised in the financial
statements, the outcome of these legal proceedings and
disputes are not probable or cannot be reliably
estimated in terms of amount or timing. Such
proceedings may, however, develop over time, and new
proceedings may occur, in a way which could have a
material impact on the Group’s financial position and/or
cash flows.
In June 2013, Lundbeck received the European
Commission’s decision that agreements concluded with
four generic competitors concerning citalopram violated
competition law. The decision included fining Lundbeck
EUR 93.8m (approximately DKK 700m). Lundbeck paid
and expensed the fine in the third quarter of 2013. In
March 2021, the European Court of Justice rejected
Lundbeck’s final appeal of the European Commission’s
decision. So-called ‘follow-on claims’ for reimbursement
of alleged losses, resulting from violation of competition
law, often arise when decisions and fines issued by the
European Commission are upheld by the European
Court of Justice. The below mentioned ‘follow-on claims’
are ongoing or threatened. Lundbeck disagrees with all
claims and intends to defend itself against them.
At the end of first quarter 2023, the UK health
authorities served their claim form on Lundbeck and
several generic companies, and Lundbeck filed its
defence in the third quarter of 2023. In September 2023,
a Case Management Conference was held, at which the
Competition Appeal Tribunal approved an application
for a preliminary issue hearing on whether the claim is
time-barred. The preliminary issue hearing is expected
to be held in the second quarter of 2024 and a ruling on
time-barring is expected in 2024.
In late October 2021, Lundbeck received a writ of
summons from a German health-care company claiming
compensation for an alleged loss of profit plus interest
payments, allegedly resulting from Lundbeck’s
conclusion of agreements with two of the four generic
competitors, which were comprised by the EU Court of
Justice ruling. Lundbeck filed its first defence in May
2022, and the parties have subsequently exchanged
additional pleadings. The first instance court hearing
has been postponed to the first quarter of 2024. It may
take several years before a final conclusion is reached by
the German courts.
Note 32
Financial risks and financial instruments
- continued
32.5 Net outstanding forward exchange rate transactions, currency options,
interest rate swaps and equity options
- Continued
Equity contracts, DKKm Contractual value
Gains/losses
recognised in the
income statement
Market value 31
December
Expiry
2023
Options on indices 618
-176
21
Mar/Apr 2024
Options on shares 847
34
22
Jan/Mar/Sep/Dec 2024
Total
1,465
-142
43
2022
Options on indices 91
11
69
Apr/May 2023
Options on shares -158
-1
-3
Mar 2023
Options on shares 593
-17
-
May 2023/Dec 2024
Total 526
-7
66
Note 33
Contractual obligations, contingent assets and liabilities, and collaterals
DKKm 2023 2022
Purchase obligations relating to property, plant and equipment
692 32
Research and development milestone obligations 1,106 1,095
Guarantee for a third party’s debt
92 199
Capital contribution obligations
1,863 1,543
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 108
Contractual obligations, contingent assets
and liabilities, and collaterals - continued
Note 33
Lundbeck has been informed about potential claims in a
number of other European countries, however, it is still
uncertain whether the potential claims will be actively
pursued.
In Canada, Lundbeck is involved in three product liability
class-action lawsuits relating to Cipralex®/Celexa® (two
cases alleging various Celexa-induced birth defects and
one case against several SSRI manufacturers (incl.
Lundbeck) alleging that SSRI (Celexa®/Lexapro®) induces
autism birth defect), three relating to Abilify Maintena®
(alleging i.a. failure to warn about compulsive behavior
side effects) and one relating to Rexulti® (also alleging
i.a. failure to warn about compulsive behavior side
effects). The cases are in the preliminary stages and as
such there is significant uncertainty as to how these
lawsuits will be resolved. Lundbeck strongly disagrees
with the claims.
In 2018, Lundbeck entered into settlements with three
of four generic companies involved in an Australian
federal court case, in which Lundbeck was pursuing
patent infringement and damages claims over the sale
of escitalopram products in Australia. Lundbeck received
AUD 51.7m(DKK 242m) in 2018. Lundbeck’s case against
the last of the four generic companies, Sandoz Pty Ltd,
went up to the High Court of Australia, who has now
decided that Sandoz Pty Ltd infringed Lundbeck’s
escitalopram patent between 2009 and 2012. The High
Court has now sent the case back to the first instance
court for recalculation of the damages awarded to
Lundbeck in first instance which amounted to AUD
26.3m (DKK 121m). In the meantime, Lundbeck’s appeal
of the Australian Patent Office’s decision to grant
Sandoz a license will be heard on 24 August 2024, and if
a license is maintained in any form, the first instance
court will have to decide if such a license can have
impact on the damage awarded by the High Court.
Together with Takeda, Lundbeck instituted patent
infringement proceedings against 16 generic companies
in response to their filing of Abbreviated New Drug
Applications (“ANDAs”) with the FDA seeking to obtain
marketing approval for generic versions of Trintellix® in
the USA. Two opponents have since withdrawn and
Lundbeck has settled with eight opponents. As
communicated by Lundbeck in company release no. 706
dated 1 October 2021, the cases against the six
remaining opponents (the “ANDA Filers”) have been
decided by the US District Court for the District of
Delaware (the ‘Court’). The Court found that Lundbeck’s
compound patent (US Patent No. 7,144,884) is valid. The
compound patent expires 17 December 2026. Assuming
the ruling is confirmed at appeal, final approval will not
be granted to the relevant ANDA Filers until after
expiration of the compound patent, including any
extension or additional periods of exclusivity. A total of
seven other patents asserted at trial were found by the
Court to be valid, or their validity was not challenged
during the trial. The Court decided that none of the
seven other patents was infringed by the relevant ANDA
Filers, except that Lupin was found to infringe a patent
covering Lundbeck’s process for manufacturing
Trintellix. The patents found not infringed by a
particular ANDA Filer will not prevent that ANDA Filer
from receiving final approval. For details on each of the
patents comprised by the case, please see company
release no. 706. The US Court of Appeals for the Federal
Circuit has affirmed the District Court decision on 7
December 2023, which is now final.
Lundbeck and Otsuka have received a Paragraph IV
certification from Mylan Pharmaceuticals with respect
to certain of the patent listed for Abilify Maintena® in
the USA, and Lundbeck and Otsuka have instituted
patent infringement proceedings against Mylan and
Viatris Inc. The FDA cannot grant marketing
authorisation in the USA to Mylan or Viatris Inc. before
the patents expire unless they receive a decision in their
favor. The trial has been re-scheduled to start on 17 June
2024 and a District Court decision is currently expected
by October 2024. Abilify Maintena® is covered by several
US patents relating to specific forms of the active
ingredient, formulations, processes, devices, indications
and methods of use, which will expire in different years,
with the latest patent expiry date in the US being in
2034.
Lundbeck received a Civil Investigative Demand (“CID”)
from the US Department of Justice (“DOJ”) in March
2020. The CID seeks information regarding the sales,
marketing, and promotion (including the promotional
speaker program) of Trintellix®. Lundbeck is cooperating
with the DOJ.
In June 2022 in the USA, several entities, created for the
purpose of receiving assignment of claims from payors
providing health insurance coverage pursuant to
Medicare Parts C and D and Medicaid, filed a complaint
against Lundbeck and others. The complaint alleges
that Lundbeck and the other defendants conspired to
increase the unit price and quantity dispensed of
Xenazine®. The case was dismissed with prejudice earlier
in 2023 and is currently under appeal.
In June 2023 in the USA, Humana Inc., an insurer, filed a
complaint against Lundbeck US legal entities. The
complaint alleges that Lundbeck engaged in an illegal
kickback scheme to increase the sales and sale price of
Lundbeck’s Xenazine®. The complaint alleges that
Lundbeck’s activities targeted Humana Inc. and other
private Medicare insurers who were forced to bear the
costs of the alleged illegally subsidised drug sales.
Lundbeck denies the allegations in the complaint and
intends to defend itself.
Product return obligations
The Group has product return obligations that are
normal for the industry. Management does not expect
any major losses from these obligations apart from the
amount already recognised.
Usual representations and warranties are made in
connection with the divestment of enterprises and
operations. There are no significant outstanding claims
that are not sufficiently recognised in the balance sheet.
Research and development milestones and collaborations
The Group has entered into a number of agreements
relating to research and development of new products
and intellectual property rights from acquisitions, as
well as other collaborations. According to these
agreements, the Group is committed to pay certain
milestones.
At 31 December 2023, potential future milestone
payments amounted to DKK 1,106m (DKK 1,095m at 31
December 2022).
Sales milestones, royalties and other payments
The Group is committed to paying certain commercial
sales milestones, royalties or other payments based on a
percentage of sales generated from the sale of goods
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 109
Related parties - continued
Note 33
following marketing approval. These amounts are
excluded from the contractual obligations because of
their contingent nature, being dependent on future
sales.
Other purchase obligations
The Group has undertaken purchase obligations relating
to property, plant and equipment in the amount of
DKK 692m (DKK 32m at 31 December 2022).
Environmental obligations
Falck has been involved in a few investigations by
Danish environmental authorities and may, at some
point in the future, be involved in more investigations
regarding PFOS contamination in the portfolio of
properties owned by Falck. Falck does not consider it
probable that the investigations will result in a liability
for Falck.
Collaterals
Land and buildings provided as security for mortgage
debt amounted to DKK 497m (DKK 514m at 31 December
2022) out of mortgage debt of DKK 548m (DKK 579m at
31 December 2022).
Lundbeckfonden is an enterprise foundation established
by Grete Lundbeck in 1954. As a foundation, no party
controls Lundbeckfonden.
Related parties to Lundbeckfonden:
• The Foundation’s Executive Management and Board
of Directors
• Companies in which the Foundation’s Executive
Management and Board of Directors exercise
controlling influence
• Associates
See note 3 Employee costs for information about
remuneration received by the Board of Directors and the
Executive Management.
Note 33
Contractual obligations, contingent
assets
and liabilities, and collaterals - continued
Note 34
Related parties
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 110
Group overview - continued
Note 35
Note 35
Group overview
Company name Country Ownership
Subsidiaries of Lundbeckfonden
Lundbeckfond Invest A/S, including Denmark
100%
- H. Lundbeck A/S
Denmark
69% (76% of the votes)
- ALK-Abelló A/S
Denmark
40% (67% of the votes)
- Falck A/S
Denmark
58%
- LFI Equity A/S
Denmark
100%
- LFI Silva Investments A/S
Denmark
97%
- LFI Silva Investments Ltd.
United Kingdom
100%
- DySIS Medical Ltd., including
United Kingdom
90%
- Forth Photonics Trustees Limited
United Kingdom
100%
- Forth Photonics Limited
United Kingdom
100%
- DYSIS Medical Inc
United States
100%
- Forth Photonics Hellas S.A
Greece
100%
Vesper Bio ApS
Denmark
75%
Associates of Lundbeckfond Invest A/S
Ferrosan Medical Devices HoldCo ApS Denmark
30%
Echo TopCo A/S (Ellab A/S)
Denmark
34%
Obel-LFI Ejendomme A/S
Denmark
50%
Cresco Capital Services A/S
Denmark
25%
CytoKi Pharma ApS
a)
Denmark
29%
IO Biotech, Inc.
a)
United States
21%
SNIPR Biome ApS
a)
Denmark
29%
Subsidiaries of H. Lundbeck A/S
Lundbeck Argentina S.A. Argentina
100%
Lundbeck Australia Pty Ltd, including
Australia
100%
- CNS Pharma Pty Ltd, Australia
Australia
100%
Lundbeck Austria GmbH
Austria
100%
Lundbeck S.A.
Belgium
100%
Lundbeck Brasil Ltda.
Brazil
100%
Lundbeck Canada Inc.
Canada
100%
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 111
Group overview - continued
Note 35
Company name Country Ownership
Lundbeck Chile Farmacéutica Ltda.
Chile
100%
Lundbeck (Beijing) Pharmaceuticals Consulting Co., Ltd. China
100%
Lundbeck Colombia S.A.S.
Colombia
100%
Lundbeck Croatia d.o.o.
Croatia
100%
Lundbeck Czech Republic s.r.o.
Czech Republic
100%
Lundbeck Export A/S
Denmark
100%
Lundbeck Pharma A/S
Denmark
100%
Lundbeck Eesti A/S
Estonia
100%
OY H. Lundbeck AB
Finland
100%
Lundbeck SAS
France
100%
Sofipharm SAS, including
France
100%
- Elaiapharm SAS
France
100%
Lundbeck GmbH Germany 100%
Lundbeck Hellas S.A.
Greece
100%
Lundbeck HK Limited
Hong Kong
100%
Lundbeck Hungária KFT
Hungary
100%
Lundbeck India Private Limited
India
100%
Lundbeck (Ireland) Ltd.
Ireland
100%
Lundbeck Israel Ltd.
Israel
100%
Lundbeck Italia S.p.A.
Italy
100%
Lundbeck Pharmaceuticals, Italy S.p.A., including
Italy
100%
- Archid S.A.
Luxembourg
100%
Lundbeck Japan K.K.
Japan
100%
Lundbeck Korea Co., Ltd.
Republic of Korea
100%
SIA Lundbeck Latvia
Latvia
100%
UAB Lundbeck Lietuva
Lithuania
100%
Lundbeck Malaysia SDN. BHD.
Malaysia
100%
Lundbeck México, SA de CV
Mexico
100%
Lundbeck B.V.
Netherlands
100%
Prexton Therapeutics B.V., including
Netherlands
100%
- Prexton Therapeutics S.A.
Switzerland
100%
Lundbeck New Zealand Limited
New Zealand
100%
H. Lundbeck AS
Norway
100%
Company name Country Ownership
Lundbeck Pakistan (Private) Limited
Pakistan
100%
Lundbeck America Central S.A. Panama
100%
Lundbeck Peru S.A.C.
Peru
100%
Lundbeck Philippines Inc. Philippines 100%
Lundbeck Business Service Centre Sp.z.o.o.
Poland
100%
Lundbeck Poland Sp.z.o.o.
Poland
100%
Lundbeck Portugal - Produtos Farmacêuticos Unipessoal Lda
Portugal
100%
Lundbeck Romania SRL
Romania
100%
Lundbeck RUS LLC
Russia
100%
Lundbeck Singapore PTE. LTD.
Singapore
100%
Lundbeck Slovensko s.r.o.
Slovakia
100%
Lundbeck Pharma d.o.o.
Slovenia
100%
Lundbeck South Africa (Pty) Limited, including
South Africa
100%
- H. Lundbeck (Proprietary) Limited
South Africa
100%
Lundbeck España S.A.
Spain
100%
H. Lundbeck AB
Sweden
100%
Lundbeck (Schweiz) AG
Switzerland
100%
Lundbeck İlaç Ticaret Limited Şirketi
Turkey
100%
Lundbeck Group Ltd. (Holding), including
United Kingdom
100%
- Lundbeck Limited
United Kingdom
100%
- Lundbeck Pharmaceuticals Ltd.
United Kingdom
100%
- Lifehealth Limited
United Kingdom
100%
- Lundbeck UK LLP
b)
United Kingdom
100%
Lundbeck USA Holding LLC, including
United States
100%
- Lundbeck LLC, including
United States
100%
- Chelsea Therapeutics International, Ltd., including
United States
100%
- Lundbeck NA Ltd.
United States
100%
- Lundbeck Pharmaceuticals LLC
United States
100%
- Lundbeck Research USA, Inc.
United States
100%
- Lundbeck La Jolla Research Center, Inc., including
United States
100%
- Abide Therapeutics (UK) Limited
United Kingdom
100%
- Lundbeck Seattle BioPharmaceuticals, Inc., including
United States
100%
- Alder Biopharmaceuticals Pty., Ltd.
Australia
100%
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 112
Group overview - continued
Note 35
Company name Country Ownership
- Alderbio Holdings LLC ("ANEV") United States
100%
Lundbeck de Venezuela, C.A. Venezuela
100%
Subsidiaries of ALK-Abelló A/S
Europe
ALK-Abelló Allergie-Service GmbH Austria
100%
ALK-Abelló Nordic A/S
Denmark
100%
ALK S.A.S.
France
100%
ALK-Abelló Arzneimittel GmbH
Germany
100%
ALK-Abelló B.V.
Netherlands
100%
ALK-Abelló Sp. z o.o.
Poland
100%
ALK Slovakia s.r.o.
Slovakia
100%
ALK-Abelló S.A., including
Spain
100%
- ALK-Abelló S.p.A.
Italy
100%
ALK AG (in liquidation)
Switzerland
100%
ALK-Abelló AG
Switzerland
100%
ALK-Abelló Ltd.
United Kingdom
100%
North America
ALK-Abelló Pharmaceuticals, Inc. Canada
100%
ALK-Abelló, Inc., including
United States
100%
- OKC Allergy Supplies, Inc.
United States
100%
ALK-Abelló Source Materials, Inc., including
United States
100%
- OKC Crystal Laboratory, Inc.
United States
100%
International markets
ALK (Shanghai) Medical Technology Co., Ltd., including China
100%
- ALK (Guangzhou) Medical Technology Co., Ltd.
China
100%
Tasfiye Halinde ALK Ilac ve Alerji Ürünleri Ticaret Anonim Sirketi (in liquidation)
Turkey
100%
Subsidiaries of Falck A/S
Falck (Victoria) Pty. Ltd. Australia
100%
Falck Pty. Ltd.
Australia
100%
Falck Fire Services BE NV
Belgium
100%
Falck Brasil 747 Participações Ltda.
Brazil
100%
Company name Country Ownership
Falck Fire & Safety do Brasil S.A.
Brazil
100%
Falck Global Assistance (China) Limited China
100%
Empresa de Medicina Integral EMI S.A. Servicio de Ambulancia Prepagada – Grupo
EMI S.A.
Colombia
100%
Falck Servicios Logisticos S.A.S.
Colombia
100%
Haces Inversiones y Servicios S.A.S
Colombia
100%
Falck Danmark A/S
Denmark
100%
Falck Digital Technology Denmark A/S
Denmark
100%
Falck Global Assistance A/S
Denmark
100%
Falck Healthcare A/S
Denmark
100%
MedConnect A/S
Denmark
100%
EMI Ecuador S.A.- Emergencia Medica Integral
Ecuador
100%
EMI El Salvador S.A. de C.V.
El Salvador
100%
Falck Global Assistance Oy
Finland
100%
Falck France SAS
France
100%
Falck Arbeitsgemeinschaft Rettungsdienst Plauen GmbH & Co. oHG
Germany
100%
Falck Fire Services DE GmbH
Germany
100%
Falck Notfallrettung und Katastrophenschutz gGmbH
Germany
100%
Falck Notfallrettung und Krankentransport Dortmund GmbH
Germany
100%
Falck Notfallrettung und Krankentransport GmbH
Germany
100%
Falck Notfallrettung und Krankentransport Spree-Neiße GmbH
Germany
100%
Falck Operations Services DE GmbH
Germany
100%
Falck Rettungsdienst GmbH
Germany
100%
Falck Rettungsdienst Hanse GmbH
Germany
100%
Falck Rettungsdienst Holding GmbH
Germany
100%
Falck Rettungsdienst Nord GmbH
Germany
100%
Falck India Pvt. Ltd. (India)
India
100%
Falck Servizi Industriali di Emergenza S.r.l.
Italy
100%
Falck Brann og Redningstjeneste AS
Norway
100%
Falck Global Assistance Norway AS
Norway
100%
Falck Helseformidling AS
Norway
100%
Falck Norge AS
Norway
100%
EMI Holdings Management S.A.
Panama
100%
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 113
Group overview - continued
Note 35
a Associates of Lundbeckfond Invest A/S are recognised in Financial
assets - Invest or Financial assets - Lundbeckfonden BioCapital
b Lundbeck UK LLP is owned by Lundbeck Group Ltd, (Holding),
Lundbeck Limited and Lifehealth Limited, all of which have H,
Lundbeck A/S as the direct or ultimate parent company
Company name Country Ownership
EMI Panama S.A.
Panama
100%
Falck Fire Services Polska Sp. z.o.o. Poland
100%
Falck IT Poland Spółka Z Ograniczoną Odpowiedzialnością
Poland
100%
Falck Medycyna Sp. z.o.o.
Poland
100%
Falck SCI Portugal – Segurança Contra Incêndios, SA.
Portugal
100%
Falck Fire Services S.R.L
Romania
100%
Falck Global Assistance Singapore Pte. Ltd.
Singapore
100%
Falck Emergency AS
Slovakia
100%
Falck Fire Services a.s.
Slovakia
100%
Falck SK a.s.
Slovakia
100%
Falck Záchranná a.s.
Slovakia
100%
Falck Global Assistance Spain S.L. Spain 100%
Falck SCI, S.A. Spain 100%
Falck Servicios Sanitarios, S.L.
Spain
100%
Falck Sverige AB
Sweden
100%
Alviva AB
Sweden
100%
Falck Ambulans AB
Sweden
100%
Falck Global Assistance AB
Sweden
100%
Falck Healthcare AB
Sweden
100%
Falck Hälsopartner AB
Sweden
100%
Falck Räddningstjänst AB
Sweden
100%
Falck Global Assistance (Thailand) Ltd.
Thailand
49%
Falck Global Assistance Ltd.
Thailand
49%
Falck Eurasia B.V.
The Netherlands
100%
Falck Holding B.V.
The Netherlands
100%
Falck Sağlık AŞ
Turkey
100%
Falck Fire Services UK Limited
United Kingdom
100%
Luvtel S.A.
Uruguay
100%
Portovenus S.A.
Uruguay
16%
UCM Uruguay S.A.
Uruguay
100%
Falck Global Assistance, LLC
United States
100%
Company name Country Ownership
Falck HealthNet, Inc.
United States
100%
Falck Mobile Health Corp. United States
100%
Falck Northern California Corp.
United States
100%
Falck Northwest Corp.
United States
100%
Falck Rocky Mountain, Inc.
United States
100%
Falck USA, Inc.
United States
100%
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 114
Material accounting policy information - continued
Note 36
The Group has consistently applied the following
accounting policies to all periods presented in these
consolidated financial statements, unless otherwise
mentioned (see note 1 for information about new
standards and amendments issued but not yet
effective).
Basis of consolidation
The consolidated financial statements comprise the
Parent Foundation Lundbeckfonden and entities
controlled by the Parent Foundation.
Business combinations
Acquisitions are evaluated to determine whether they
constitute a business combination in accordance with
IFRS 3 Business Combinations or a purchase of
individual assets and liabilities.
Acquired assets and liabilities that do not constitute a
business are recognised at cost, i.e., no goodwill or
negative goodwill is recognised.
Newly acquired or newly established companies or
operations are recognised in the consolidated financial
statements from the date of acquisition or
establishment. The date of acquisition is the date when
control of the company actually passes to the Group.
Companies sold or discontinued are recognised in the
consolidated income statement up to the date of
disposal. The date of disposal is the date when control
of the company actually passes to a third party.
Acquisitions are accounted for using the purchase
method, according to which, the identifiable assets,
liabilities and contingent liabilities of companies
acquired are measured at fair value at the date of
acquisition.
Restructuring costs are only recognised in the takeover
balance sheet if they represent a liability to the acquired
company. The tax effect of revaluations is taken into
account.
The cost of a company is the fair value of the
consideration paid. If the final determination of the
consideration is conditional on one or more future
events, these are recognised at their fair value at the
date of acquisition.
Costs that can be attributed directly to the transfer of
ownership are recognised in the income statement
when they are incurred. Adjustments to estimates of
conditional consideration are recognised directly to the
income statement.
If the fair value of the acquired assets or liabilities
subsequently proves different from the values
calculated at the date of acquisition, cost is adjusted for
up to 12 months after the date of acquisition.
Any excess of the cost of an acquired company over the
fair value of the acquired assets, liabilities and
contingent liabilities (goodwill), is recognised as an asset
under intangible assets and tested for impairment at
least annually.
Gains or losses on disposal of subsidiaries are stated as
the difference between the disposal amount and the
carrying amount of net assets including goodwill at the
date of disposal, accumulated foreign exchange
adjustments recognised in other comprehensive income,
and anticipated disposal costs. The disposal amount is
measured as the fair value of the consideration received.
Divestments
Companies divested or discontinued are recognised in
the income statement until the date of divestment or
discontinuation. Divested activities are shown separately
as discontinued operations.
Gains and losses on divestment or winding up of
subsidiaries and associates are stated as the difference
between the sales price and the carrying amount of the
net assets, including goodwill at the time of sale,
accumulated foreign exchange adjustments recognised
in other comprehensive income and anticipated
disposal costs. In addition, any retained non-controlling
interests are measured at fair value. Gains and losses on
the disposal and the effect of renewed measurement of
any retained non-controlling interests are recognised in
the income statement.
Foreign currency
On initial recognition, transactions denominated in
foreign currencies are translated at standard rates
which approximate the exchange rates at the
transaction date. Exchange differences arising between
the exchange rates at the transaction date and the
exchange rates at the date of payment are recognised in
the income statement under financial items.
Receivables, payables and other monetary items
denominated in foreign currencies that have not been
settled at the balance sheet date are translated at the
exchange rates at the balance sheet date. The
differences between the exchange rates at the time of
recognition and the exchange rates at the balance sheet
date or recognition of settlement are recognised in the
income statement under financial items.
On translation of foreign subsidiaries having a
functional currency different from the one used by the
Foundation, items in the income statement are
translated at monthly average exchange rates, and non-
monetary and monetary items are translated at the
exchange rates at the balance sheet date. Exchange
differences arising when translating the income
statements and the balance sheets of foreign
subsidiaries are recognised in other comprehensive
income.
Exchange gains/losses on translation of receivables
from, or payables to, subsidiaries that are considered
part of the Group’s net overall investment in the
subsidiaries are recognised in other comprehensive
income.
Exchange gains/losses on that part of the bank debt in
foreign currency which is used for hedging of the net
investments in subsidiaries, and which provides an
effective hedging of the exchange gains/losses of the
net investments, are recognised in other comprehensive
income.
Financial instruments
Forward exchange contracts, interest rate swaps, equity
options and other derivatives are initially recognised in
the balance sheet at fair value on the contract date and
subsequently remeasured at fair value at the balance
sheet date. The fair value of derivatives is determined by
applying recognised measurement techniques, whereby
assumptions are based on the market conditions
prevailing at the balance sheet date. Positive and
Note 36
Material accounting policy information
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 115
Material accounting policy information - continued
Note 36
negative fair values are included in other receivables and
other payables, respectively.
Changes in the fair value of derivatives classified as
hedging instruments and meeting the criteria for hedge
accounting are recognised in other comprehensive
income. On recognition of hedged items, income and
expenses related to such hedging transactions are
transferred from other comprehensive income and
recognised in the same line item as the hedged item.
Changes in the fair value of derivatives classified as
hedging instruments and meeting the criteria for
hedging the fair value of a recognised asset or liability
are recognised in the income statement together with
changes in the value of the hedged asset or liability.
Changes in the fair value of derivatives used for hedging
net investments in foreign subsidiaries or associates
and that otherwise meet the relevant criteria for
hedging are recognised in other comprehensive income.
Changes in the fair value of derivatives not qualifying
for hedge accounting are recognised in the income
statement under financial items as they arise.
Securities, equity investments recognised in other
financial assets, derivatives and contingent
consideration measured at fair value are classified
according to the fair value hierarchy as belonging to
levels 1-3 depending on the valuation method applied.
Incentive programmes
Share-based incentive programmes (equity-settled
share-based payments) which comprise share option
plans, conditional share plans, and performance shares
are measured at the grant date at fair value and
recognised in the income statement under the
respective functions over the vesting period and offset
in equity.
The fair value of share options is determined using the
Black-Scholes model.
If the share option agreements entitle the Group to
demand cash settlement of the options, the cash-
settled share options are recognised as other liabilities
and adjusted to fair value when the Group has an
obligation to settle in cash. The subsequent adjustment
to fair value is recognised in the income statement
under financial items.
Warrants regarding warrant programmes for the
executive management boards of subsidiaries are issued
at the market value on the date of grant. Payments
received and made in relation to the warrant
programmes are recognised in equity.
Non-controlling interests
On initial recognition, non-controlling interests are
measured either at fair value (including the fair value of
goodwill related to non-controlling interests in the
acquired company) or at the non-controlling interests’
proportionate share of the acquired company’s
identifiable assets, liabilities and contingent liabilities
measured at fair value (excluding the fair value of
goodwill related to non-controlling interests in the
acquired company). The measurement basis for non-
controlling interests is selected for each individual
transaction.
Acquisition and divestment of non-controlling interests
Increases and reductions of non-controlling interests
are accounted for as transactions with shareholders, in
their capacity as shareholders. Thus, any differences
between adjustment to the carrying amount of non-
controlling interests and the fair value of the
consideration received or paid are recognised directly in
equity.
Income statement
Revenue Lundbeck and ALK
Revenue comprises invoiced sales less expected return
of goods for the year less returned goods, sales,
discounts, rebates and revenue-based taxes. Revenue is
recognised when the goods are delivered at the agreed
destination (point in time), meaning that control of
products has transferred to the buyer, and it is probable
that the Group will collect the consideration to which it
is entitled for transferring the products.
Revenue is measured at the amount of consideration to
which the Group expects to be entitled in exchange for
transferring the products. Revenue is recognised net of
sales deductions, including product returns as well as
discounts, rebates and revenue-based taxes.
Moreover, revenue includes licence income and royalties
from out-licensed products as well as non-refundable
down payments and milestone payments relating to
research and development collaborations and income
from collaborations on the commercialisation of
products.
Sales-based licensing income and royalties from out-
licensed products is recognised in profit or loss under
revenue, when the Group provides access to its product
rights as they exist throughout the licence period.
Revenue from sales-based licensing income is
recognised when the performance obligation is satisfied,
i.e., when transferred to the customer. For royalties,
revenue is recognised when the subsequent sale occurs.
As the performance obligations are satisfied over time,
revenue is also recognised over time.
When the Group provides a customer the right to use
the product rights as they exist at the point in time at
which the licence is granted, revenue is recognised at a
point in time when control is transferred to the licensee
and the licence period begins when the customer's right
to the intellectual property is transferred.
Non-refundable down payments and milestone
payments received relating to research collaborations
are recognised in profit or loss under revenue.
Revenue Falck
Revenue includes services and goods delivered together
with invoiced subscriptions attributable to the financial
period. Revenue is recognised in the income statement
if the control of the services or goods are transferred to
the customer. Services are recognised over time when
the customer receives and consumes the benefits as the
service is delivered by Falck.
For long-term contracts with fixed price and
subscriptions, revenue is recognised on a straight-line
basis over the contract period. For pay-by-use contracts,
revenue is recognised in connection with the actual
delivery of the individual service.
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
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Material accounting policy information - continued
Note 36
Services related to long-term contracts with fixed price
and subscriptions are usually prepaid by the customers
(prepayment usually occurs between one and twelve
months before the start of the service period). For pay-
by-use contracts, the payment term is usually between
one and three months after the service has been
delivered.
For contracts with predetermined price reductions, the
transaction price will be recalculated to an average price
covering the total contract period.
For contracts where Falck acts as an agent (mainly
claims handling), the revenue is recognised as the net
amount that Falck is entitled to retain in return for its
services as agent. For contracts where Falck acts as a
principal, the revenue is recognised as the gross amount
to which Falck expects to be entitled.
Revenue is measured at the fair value of the agreed
consideration excluding VAT and other taxes collected
on behalf of third parties. All discounts granted are
recognised in revenue.
Contracts with variable considerations are measured
using the most likely amount and re-measured on a
monthly basis.
Cost of sales
Cost of sales comprises the cost of goods and services
sold. Cost includes the cost of raw materials,
transportation costs, consumables and goods for resale,
direct labour and indirect costs of production, including
operating costs, amortisation/depreciation and
impairment losses relating to product rights and
manufacturing facilities. Moreover, cost of sales includes
royalty payments for in-licensed products, expenses for
quality assurance of products and write-downs to net
realisable value of obsolete and slow-moving goods.
Cost of sales also includes external assistance used to
generate the revenue for the year.
Research and development costs
Research and development costs comprise costs
incurred for the Group’s research and development
functions, i.e., employee costs, amortisation/
depreciation and impairment losses, and other indirect
costs as well as costs, relating to research and
development collaborations.
Research costs are always recognised in the income
statement as they incur.
Due to a very long development period and the
significant uncertainties inherent in the development of
new products, development costs are expensed as
incurred in line with industry practice. Consequently, the
development costs do not qualify for capitalisation as
intangible assets until marketing approval by a
regulatory authority is obtained or considered highly
probable.
Sales and distribution costs
Sales and distribution costs comprise costs incurred for
the sale and distribution of the Group’s products sold
during the year. This includes costs incurred for sales
campaigns, training and administration of the sales
force and direct distribution, marketing and promotion.
Sales and distribution also include salaries and other
costs for the sales, distribution and marketing
functions, amortisation/depreciation and impairment
losses, and other indirect costs.
Administrative expenses
Administrative expenses comprise expenses incurred in
the year for the management and the administration of
the Group, i.e., salaries and other expenses relating to
for example, management, HR, IT and finance functions,
as well as amortisation/depreciation and impairment
losses, and other indirect costs.
Other operating items
Other operating items comprise other income and
expenses relating to operating activities of a secondary
nature to the Group. Other operating items include
integration and transaction costs relating to material
acquisitions, transaction costs relating to divestments,
income and expenses relating to legal settlements and
material gains and losses on the sale or retirement of
items of intangible assets and property, plant and
equipment.
Special items
Special items comprise significant income and expenses
of a special nature in terms of the Group’s revenue-
generating operating activities such as impairment of
goodwill and product rights.
Results of investments in associates measured using the
equity method
The proportionate share of the results of associates is
recognised in the income statement after tax.
Financial items
Financial items comprise:
• Interest income and expenses
• Net gain or loss on financial assets, including
dividends
• Fair value adjustment of contingent consideration
• Fair value adjustment of other financial liabilities
• Interest expenses and income related to uncertain tax
positions are recognised on the balance sheet as tax
liabilities and tax assets, respectively, upon the receipt
of rulings from the tax authorities, and
correspondingly reflected in the income statement as
financial items, net
• Foreign currency gain and loss
• Other financial income and expenses
Interest income and expenses are accrued based on the
principal and the effective rate of interest.
Income tax
Lundbeckfonden’s Danish subsidiaries are jointly taxed
with Lundbeckfond Invest A/S as the administration
company. The current Danish corporate income tax
liability is allocated among the companies of the tax
pool in proportion to their taxable income (full
allocation subject to reimbursement in respect of tax
losses).
Lundbeckfonden has the option to use section 3(4) of
the Danish Corporation Tax Act. Under these rules, the
taxable income of Lundbeckfond Invest A/S is
considered to have been earned by Lundbeckfonden if
the taxable income is distributed as a dividend to
Lundbeckfonden. Since Lundbeckfonden’s taxable
income is regularly offset against grants for the year
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 117
Material accounting policy information - continued
Note 36
and tax provisions for future grants, no deferred tax
asset or liability is recognised owned by
Lundbeckfonden.
Tax for the year, which consists of the year’s current tax
and the change in deferred tax, is recognised in the
income statement as regards the amount that can be
attributed to the net profit or loss for the year, in other
comprehensive income as regards the amount that can
be attributed to items in other comprehensive income,
and in equity as regards the amount that can be
attributed to items in equity. The effect of foreign
exchange differences on deferred tax is recognised in
the balance sheet as part of the movements in deferred
tax.
The Group has determined that the global minimum
top-up tax, which it is required to pay under Pillar Two
legislation, is an income tax in the scope of IAS 12. The
Group has applied a temporary mandatory relief from
deferred tax accounting for the impacts of the top-up
tax and will account for it as a current tax when it incur.
The current income tax charge is calculated based on
the tax laws enacted or substantively enacted at the
end of the reporting period in the countries where the
Group operates and generates taxable income.
Management periodically evaluates positions taken in
tax returns with respect to situations in which
applicable tax regulation is subject to interpretation and
considers whether it is probable that a tax authority will
accept an uncertain tax treatment. The Group measures
its tax balances based on either the most likely amount
or the expected value, depending on which method
provides a better prediction of the resolution of the
uncertainty.
Current tax for the year is calculated based on the
income tax rates and rules applicable at the reporting
date.
Current tax payables and receivables, including
contributions payable and receivable under the Danish
joint taxation scheme, are recognised in the balance
sheet, computed as tax calculated on the taxable
income for the year adjusted for provisional tax paid.
Deferred tax is recognised on all temporary differences
between the carrying amounts of assets and liabilities
and their tax bases. However, deferred tax is not
recognised on temporary differences arising either on
initial recognition of goodwill or from a transaction that
is not a business combination, if the temporary
difference ascertained at the time of the initial
recognition affects neither the financial result nor the
taxable income. The tax value of the assets is calculated
based on the planned use of the individual assets.
Deferred tax is measured based on the income tax rates
and tax rules in force in the respective countries at the
balance sheet date. Changes in deferred tax resulting
from changed income tax rates or tax rules are
recognised in profit or loss.
Deferred tax assets, including the tax value of tax loss
carry-forwards, are recognised in the balance sheet at
the value at which the assets are expected to be
realised, either through an offset against deferred tax
liabilities or as net tax assets to be offset against future
positive taxable income.
Changes in deferred tax concerning expenses for share-
based payments are generally recognised in profit or
loss. However, if the amount of the tax deduction
exceeds the related cumulative expense, it indicates
that the tax deduction relates not only to an operating
expense, but also to an equity item. In such a case, the
excess of the associated current or deferred tax is
recognised directly in equity.
Deferred tax in respect of recaptured losses previously
deducted in foreign subsidiaries is recognised based on
a specific assessment of each individual subsidiary.
Balance sheet
Goodwill
On initial recognition, goodwill is measured and
recognised as the excess of the cost over the fair value
of the acquired assets, liabilities and contingent
liabilities. On recognition, the goodwill amount is
allocated to those of the Group’s activities that generate
separate cash flows (cash generating units).
Development projects
Development costs are recognised in the income
statement as they incur unless the conditions for
capitalisation have been met. Development costs are
capitalised only if the development projects are clearly
defined and identifiable and where the technical rate of
utilisation of the project, the availability of adequate
resources and a potential future market or development
opportunity can be demonstrated. Furthermore, such
costs are capitalised only where the intention is to
manufacture, market or use the project, when the cost
can be measured reliably and when it is probable that
future earnings can cover production, sales and
distribution costs, administrative expenses and
development costs.
After completion of the development work,
development costs are amortised over the expected
useful life. The maximum amortisation period for
development projects protected by intellectual property
rights is consistent with the remaining patent
protection period of the rights concerned. Ongoing
development projects are tested for impairment at least
annually or when there is indication of impairment.
Product rights and other intangible assets
Acquired intellectual property rights in the form of
product rights, patents, licences, customer relationships,
brands and software are measured at cost less
accumulated amortisation and impairment losses. The
cost of software comprises the cost of planning, labour
and costs directly attributable to the project.
Product rights are amortised over the economic lives of
the underlying products, which in all material aspects
follow the patent terms, which are currently between
five and 15 years. Other rights are amortised over the
period of agreement. Intangible assets acquired on
acquisition are amortised over the expected economic
life, estimated to be three-to-10 years. Software is
amortised over the expected economic life, estimated to
be three-to-five years. Amortisation commences when
the asset is ready to be brought into use.
Amortisation is recognised in the income statement
under cost of sales, and research and development
costs, respectively.
Borrowing costs to finance the manufacture of
intangible assets are recognised in the cost price, if such
borrowing costs relate to the production period. Other
borrowing costs are expensed.
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 118
Material accounting policy information - continued
Note 36
Gains and losses on the disposal of development
projects, patents and licences are measured as the
difference between the selling price less cost to sell and
the carrying amount at the time of sale. Gains and
losses are recognised in profit or loss; normally in other
operating items, net, or, if considered immaterial to the
understanding of the consolidated financial statements,
in the same line item as the associated amortisation. In
general, amortisation methods, useful lives and residual
values are reviewed at each reporting date and adjusted
if appropriate.
Property, plant and equipment
Items of property, plant and equipment are measured
at cost less accumulated depreciation and impairment
losses. Land is not depreciated.
Cost includes the cost of acquisition and expenses
directly attributable to the acquisition until the asset is
ready for use. The cost of self-constructed assets
includes costs directly attributable to the construction
of the asset. Borrowing costs to finance the
manufacture of property, plant and equipment are
recognised in the cost price, if such borrowing costs
relate to the production period. Other borrowing costs
are recognised in the income statement.
Right-of-use assets are initially measured at cost, which
comprises the initial amount of the liability adjusted for
any lease payments made at or before the
commencement date, plus any initial direct costs
incurred and an estimate of costs to dismantle and
remove the underlying asset or to restore the
underlying asset or the site on which it is located, less
any lease incentives.
Subsequently, the right-of-use asset is depreciated using
the straight-line method from the commencement date
to the end of the lease term unless it is reasonably
certain that a purchase option will be exercised at the
end of the lease term. In that case, the assets are
depreciated over the full, expected useful life.
Items of property, plant and equipment are depreciated
on a straight-line basis over the expected useful lives of
the assets:
Years
Buildings 25-50
Installations 10
Plant and machinery 3-10
Vehicles according to category 5-12
Dispatch centres, radio systems, major
administrative systems and networks
8
Fire extinguishers and similar equipment installed
at customers’ locations
3-5
Other fixtures and fittings, tools and equipment 3-10
Leasehold improvements, max. 10
Depreciation methods, useful lives and residual values
are reassessed annually and adjusted if appropriate.
Costs incurred that increase the recoverable amount of
the asset are added to the value of the asset as an
improvement and are depreciated over the estimated
useful life of the improvement.
Gains or losses on the sale or retirement of items of
property, plant and equipment are calculated as the
difference between the carrying amount and the selling
price less cost to sell or discontinuance costs. Gains and
losses are recognised in profit or loss; normally in other
operating items, net or, if considered immaterial to the
understanding of the consolidated financial statements,
in the same line item as the associated depreciation.
Biological assets
Forest assets are divided into growing forests, which are
recognised as biological assets at fair value less cost to
sell, and land, which is measured at cost. The valuation
of biological assets is based on discounted cash flow
models.
Changes in the fair value of biological assets are
recognised in the income statement under other
operating items.
Impairment
Intangible assets with indefinite useful lives and
intangible assets not yet commercialised are not subject
to amortisation and are tested annually for impairment,
or more frequently if events or changes in
circumstances indicate that they may be impaired. The
annual impairment test is performed irrespective of
whether there is any indication of impairment.
Intangible assets and property, plant and equipment in
use with finite useful lives are tested for impairment
whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable.
Impairment losses are reversed only if the assumptions
and estimates underlying the impairment calculation
have changed. Indications of impairment or reversal of
impairment include the following:
• Research and development results for a product
• Changes in expected cash flows due to lower sales
expectations
• Changes in technology
• Changes in assumptions about future use
• Changes in market and legal risks
• Changes in cost structure
An impairment loss is recognised for the amount by
which the asset’s carrying amount exceeds its
recoverable amount. The recoverable amount is the
higher of an asset’s fair value less costs of disposal and
value-in-use. For the purpose of assessing impairment,
assets are grouped at the lowest levels for which there
are separately identifiable cash inflows which are largely
independent of the cash inflows from other assets or
groups of assets (cash-generating unit). Non-financial
assets other than goodwill that suffer an impairment
are reviewed for possible reversal of the impairment at
the end of each reporting period.
Investments in associates
Investments in associates, except for investments in
associates that are included in Lundbeckfonden’s
investment strategy, are measured in the consolidated
financial statements using the equity method and
recognised at the proportionate share of the equity of
the relevant enterprise, made up in accordance with the
Group’s accounting policies, with the addition of values
added on acquisition, including goodwill.
Investments in associates that are included in
Lundbeckfonden’s investment strategy are measured at
fair value and presented together with the investment
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 119
Material accounting policy information - continued
Note 36
assets. Both realised and unrealised gains and losses are
recognised in the income statement under financial
items.
Financial assets
At initial recognition, securities that are included in the
group’s investment strategy are measured at its fair
value. Transaction costs of financial assets are expensed
under financial items.
Subsequently, securities are measured at fair value at
the balance sheet date. Both realised and unrealised
gains and losses are recognised in the income
statement under financial items.
Bonds with a term to maturity of less than one year are
recognised in current assets. Bonds forming part of repo
transactions, i.e., the selling of bonds to be repurchased
at a later date, remain on the balance sheet as financial
assets, and the amount received on repo transactions is
recognised as repo debt. Returns on such bonds are
recognised under financial items.
The fair value of listed investments is calculated using
market prices at the balance sheet date. The calculation
of fair value of unlisted investments, including biotech
investments, is made on the basis of relevant valuation
methods based on discounted cash flows or trading
multiples. If the fair value cannot be determined with
sufficient reliability, the investments in question are
recognised at cost at recent transaction, or price at
financing round, taking into account whether or not the
companies live up to predefined value triggers/business
plans.
Equity investments that are not included in the Group’s
investment strategy are classified as other financial
assets. On initial recognition, these investments are
measured at cost, corresponding to fair value. They are
subsequently measured at fair value at the balance
sheet date, and changes to the fair value are recognised
in the income statement or other comprehensive
income according to an individual decision for each
equity investment.
Inventories
Raw materials, packaging and goods for resale are
measured at the latest known cost at the balance sheet
date, which is equivalent to cost computed according to
the FIFO method. Work in progress and finished goods
manufactured by the Group are measured at cost, i.e.,
the cost of raw materials, goods for resale, consumables
and direct labour and indirect costs of production.
Indirect costs of production include materials and
labour, maintenance of and depreciation on the
machines, factory buildings and equipment used in the
manufacturing process as well as the cost of factory
administration and management. Indirect costs of
production are allocated based on the normal capacity
of the production plant.
Inventories are written down to net realisable value if it
is lower than the cost price. The net realisable value of
inventories is calculated as the selling price less costs of
completion and costs incurred to execute the sale. The
net realisable value is determined having regard to
marketability, obsolescence and expected selling price
developments.
Receivables and contract assets
Current receivables comprise trade receivables and
other receivables arising in the Group’s normal course of
business. Other receivables recognised in financial
assets are financial assets with fixed or determinable
cash flow that are not quoted on an active market and
are not derivative financial instruments.
Contract assets comprise the Group’s right to
consideration regarding completed services which have
not been invoiced at the reporting date.
On initial recognition, receivables and contract assets
are measured at fair value, subsequently at amortised
costs.
Impairments for lifetime expected credit losses (ECL) are
recognised in the income statement upon initial
recognition of the receivable/contract asset. The
expected credit losses are calculated on the portfolio of
receivables/contract assets grouped by shared credit risk
characteristics. Provision matrices are established based
on historical developments in trade receivables/contract
assets and the historical credit losses, adjusted for
forward-looking factors specific to the debtors and the
economic environment.
An impairment loss or reversal of prior impairment loss
is recognised in the income statement.
Prepayments
Prepayments comprise prepaid costs which are
measured at cost.
Securities
On initial recognition, securities including the bond
portfolio, which are included in the Group’s investment
strategy for excess liquidity, or bonds with a term to
maturity of less than one year, are recognised under
current assets and measured at cost, corresponding to
fair value. The securities are subsequently measured at
fair value at the balance sheet date. The fair value is
based on publicly quoted prices of the invested assets.
Both realised and unrealised gains and losses are
recognised in the income statement.
Equity
Authorised grants
Grants are considered equity movements and are
recognised as a liability at the time when the grant has
been authorised by the Board of Directors and
announced to the recipient. Authorised grants not yet
disbursed are recognised in non-current or current
liabilities, respectively.
Reserve for future grants
In accordance with the Danish Act on Commercial
Foundations, a reserve for future grants has been set up
in order for Board of Directors to be able to donate
grants during the period until the approval of the
annual report for the subsequent financial year. The
reserve does not have to be used, but is continuously
reduced with donated grants. Every year at the annual
meeting, the Board of Directors will re-evaluate the size
of the reserve.
Hedging reserve
Hedge transactions that meet the criteria for hedging
future cash flows, and for which the hedged transaction
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 120
Material accounting policy information - continued
Note 36
has yet to be realised, are recognised in equity through
other comprehensive income under the hedging reserve.
Foreign exchange adjustments concerning hedging
transactions used to hedge the Group’s net investment
in such entities are recognised in equity through other
comprehensive income under the hedging reserve.
Currency translation reserve
Foreign exchange adjustments arising on the
translation of financial statements for subsidiaries and
associates which are not part of Lundbeckfonden’s
investment strategy and have a functional currency
other than DKK, and foreign exchange adjustments
relating to financial assets and liabilities representing a
part of the Group’s net investment in such entities, are
recognised in equity through other comprehensive
income under the currency translation reserve.
On full or partial realisation of a net investment, foreign
exchange adjustments are recognised in the income
statement.
Treasury shares in subsidiaries
Acquisition and sale of treasury shares held by
subsidiaries as well as dividends are recognised directly
in equity under retained earnings.
Non-controlling interests
The proportionate shares of the profit and equity of
subsidiaries attributable to non-controlling interests are
recognised as a separate item under equity. On initial
recognition, non-controlling interests are recognised as
described under ‘Business combinations’.
Share-based payments
Share-based incentive programmes in which shares are
granted to employees and in which employees may opt
to buy shares in H. Lundbeck A/S and ALK-Abelló A/S,
and in which shares are granted to employees (equity-
settled programmes), are measured at the equity
instruments’ fair value at the date of grant and
recognised under employee costs, as and when the
employees obtain the right to receive/buy the shares.
The offsetting item is recognised directly in equity,
under retained earnings.
Share price-based incentive programmes in which
employees have the difference between the agreed price
and the actual share price settled in cash (cash-settled
programmes) are measured at fair value at the date of
grant and recognised in the income statement under
employee costs, as and when the employees obtain the
right to such difference settlement. The cash-settled
programmes are subsequently remeasured on each
balance sheet date and upon final settlement, and any
changes in the fair value of the programmes are
recognised under employee costs. The offsetting item is
recognised under liabilities until the time of the final
settlement.
Retirement benefit obligations and similar obligations
Payments to defined contribution plans are recognised
in the income statement at the due date, and any
contributions payable are recognised in the balance
sheet under current liabilities.
The present value of the Group’s liabilities relating to
future pension payments under defined benefit plans is
measured on an actuarial basis once a year based on the
pensionable period of employment up to the time of
the actuarial valuation. The calculation of present value
is based on assumptions of future developments of
salary, interest, inflation, mortality and disability rates
and other factors. Present value is computed exclusively
for the benefits to which the employees have earned
entitlement through their employment with the Group.
Pension expenses, finance costs and administration fees
are recognised in the income statement under
employee costs. Actuarial gains and losses are
recognised in other comprehensive income as they are
calculated and cannot subsequently be recycled through
profit or loss.
The present value of the defined benefit plan liability is
recognised less the fair value of the plan assets, and any
net obligation is recognised in the balance sheet under
non-current liabilities. Any net asset is recognised in the
balance sheet as a financial asset, considering, where
relevant, the provisions of IFRIC 14 The Limit on a
Defined Benefit Asset, Minimum Funding Requirements
and their Interaction.
Provisions
Provisions mainly consist of provisions for discounts and
rebates, product returns, pending lawsuits and
restructuring. A provision is a liability of uncertain
timing or amount.
Unsettled discounts and rebates are recognised as
provisions when the timing or amount is uncertain.
Where absolute amounts are known, the discounts and
rebates are recognised as trade payables.
Return obligations imposed on the Group are
recognised as provisions in the balance sheet.
Amounts relating to pending lawsuits are recognised
when the outflow is probable and the amount is
measured as the best estimate of the costs required to
settle the liabilities at the balance sheet date.
In connection with restructurings in the Group,
provisions are made only for liabilities set out in a
specific restructuring plan based on which the parties
affected can reasonably expect that the Group will carry
out the restructuring, either by starting to implement
the plan or announcing its main components.
Contract liabilities
Prepayments mainly include accrued subscriptions and
prepayment according to contracts. Contract liabilities
also comprise the recalculated transaction price from
predetermined price reductions, where the service is
transferred over time, and are recognised at the same
average consideration over the term of the contract.
Debt
Mortgage debt, bank debt and bond debt are recognised
at the time of the raising of a loan/issuing of bonds at
the fair value of the proceeds received less transaction
costs paid. In subsequent periods, the financial liabilities
are measured at amortised cost, which is equivalent to
the capitalised value when the effective rate of interest
is used. The difference between the proceeds and the
nominal value is recognised in the income statement
under financial items over the loan period. Debt
included in the short-term financial liquidity is
measured at amortised cost in subsequent periods.
Repo debt relates to bonds included in repo
transactions. Repo debt is recognised at amortised cost,
and accumulated repo interest has been accrued.
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 121
Events after the balance sheet date - continued
Note 36
Other payables
Other payables include employee costs payables,
contingent consideration, derivative financial
instruments, debt to public authorities, etc.
Contingent consideration is recognised as part of the
business combination and is recognised at fair value
considering the passage of time and changes in the
applied probability of success. The fair value is assessed
at each reporting date and the effect of any
adjustments relating to the timing of payment and the
probability of success is recognised under financial
income or financial expenses.
Other debts, which include trade payables and debt to
public authorities etc., are measured at amortised cost.
Lease liabilities
On initial recognition, lease liabilities are measured as
the present value of future payments, including
payments relating to reasonably certain extensions. The
lease payments contain fixed payments less any lease
incentives receivable and variable lease payments that
depend on an index or a rate.
On subsequent recognition, lease liabilities are
measured at amortised cost. The difference between the
present value and the nominal value of lease payments
is recognised in the income statement over the term of
the lease as a finance charge.
If the interest rate cannot be determined in the
agreement, the lease payments are discounted using
the Group’s incremental borrowing, adjusted for the
functional currency and length of the lease term. The
lease liability is remeasured if, or when, the future
payment or lease term changes.
Changes to lease agreements after initial recognition
are accounted for either as a modification to an existing
agreement, a separate agreement or a partial disposal,
depending on the nature of the change. Changes will
result in changes to both the lease liability and the
right-of-use asset.
Short-term lease expenses and low value assets are not
recognised as part of lease liabilities. They are
recognised in the income statement when incurred as
an operating expense.
Cash flow statement
The consolidated cash flow statement is presented in
accordance with the indirect method and shows the
composition of cash flows, divided into operating,
investing and financing activities, and cash and bank
balances at the beginning and at the end of the year.
Cash flows include cash flows from companies acquired
as from the date of acquisition and cash flows from
companies divested until the date of divestment.
Cash comprises cash and bank balances.
Cash flows denominated in foreign currencies, including
cash flows in foreign subsidiaries, are translated at the
average exchange rates for the year as they
approximate the actual exchange rates at the date of
payment. Cash and bank balances at year-end are
translated at the exchange rates at the balance sheet
date, and the effect of exchange gains/losses on cash
and bank balances is shown as a separate item in the
cash flow statement.
Key figures
The key figures are calculated according to the Danish
Finance Society’s Recommendations & Financial Ratios.
Operating profit:
Defined as the profit before
special items, financial items
and tax
Operating profit margin: Operating profit x 100 / Revenue
Return on equity:
Profit for the year x 100 / Average
equity
Net wealth
Lundbeckfonden’s net wealth is estimated based on fair
value at the balance sheet date. For the valuation of
Lundbeckfonden’s investment activities, please refer to
the accounting policies above under financial assets.
The fair value of Lundbeckfonden’s shares in H.
Lundbeck A/S and ALK-Abelló A/S is based on market
prices. The fair value of Lundbeckfonden’s shares in
other strategic ownerships are an estimated value based
on a trading multiple model using historical accounting
numbers for the relevant company and a peer group.
On 2 January 2024, the ALK Group acquired the
operating assets of AllerQuest for a total cash
consideration of DKK 125m. The consideration amount
includes an escrow amount of DKK 10m which serves as
reserve for potential indemnifications over 18 months
from acquisition date.
AllerQuest was a US-based company dedicated to
manufacturing PRE-PEN® Skin Antigen Test. This
acquisition makes ALK the sole manufacturer and
distributor of PRE-PEN in the USA and Canada, with
global ownership rights to all assets of AllerQuest. PRE-
PEN is the only FDA-approved diagnostic skin test for
the evaluation of penicillin allergy and is indicated for
the assessment of sensitization to penicillin in patients
suspected to have clinical penicillin hypersensitivity.
AllerQuest was previously a supplier of the ALK Group
and will be fully integrated into ALK during 2024.
The transaction is on a debt and cash free basis. At the
time the financial statements were authorised for issue,
the ALK Group had not yet completed the accounting
for the acquisition as the transaction has just happened.
In particular, the fair values of the assets disclosed
above have only been determined provisionally as the
independent valuations have not been finalised. A
preliminary purchase price allocation has been prepared.
Operating tangible assets and inventories amount to
DKK 7m. Product rights, including production processes,
formulations, approvals and trademarks, amount to
DKK 118m. No liabilities were transferred.
Note 36
Material accounting policy information - continued
Note 37
Events after the balance sheet date
Management review
Financial statements Consolidated financial statements Parent financial statements Notes Reports
Lundbeck Foundation Annual Report 2023 Page 122
Parent financial
statements
Management review
Financial statements Consolidated financial statements Parent financial statements Notes Reports
Lundbeck Foundation Annual Report 2023 Page 123
Income statement 124
Balance sheet 125
Statement of changes in equity 126
Notes 127
1. Accounting policies 127
2. Financial income and expenses 127
3. Employee costs 128
4. Total operating costs of Lundbeckfonden
and Lundbeckfond Invest A/S 128
5. Fees to auditors appointed at the annual
meeting 128
6. Tax on profit for the year 128
7. Proposed distribution of profit 129
8. Intangible assets 129
9. Tangible assets 129
10. Investments in subsidiaries 129
11. Other securities and investments 130
12. Capital base 130
13. Pension obligations 130
14. Financial instruments 131
15. Grants, net 131
16. Contractual obligations 131
17. Related parties 131
18. Events after the balance sheet date 131
Financial statements
Parent
Foundation
Contents
Notes
Management review
Financial statements Consolidated financial statements Parent financial statements Notes Reports
Lundbeck Foundation Annual Report 2023 Page 124
Income statement
For the period 1 January – 31 December
DKKm Note 2023 2022
Dividend from Lundbeckfond Invest A/S
- 2,192
Financial income 2 1,217 270
Financial expenses 2
-154 -1,079
Profit from investment activities
1,063 1,383
Employee costs
3
-46
-42
Other external costs 4-5 -37 -33
Depreciation and amortisation
-5 -5
Profit before tax
975 1,303
Tax on profit for the year 6 -6 -6
Profit for the year 7
969 1,297
Management review
Financial statements Consolidated financial statements Parent financial statements Notes Reports
Lundbeck Foundation Annual Report 2023 Page 125
Balance sheet
At 31 December
Assets, DKKm Note 2023 2022
Other intangible assets
2 2
Intangible assets 8 2 2
Property and equipment
61 65
Tangible assets 9
61 65
Investments in subsidiaries 10 4,075 4,048
Receivables from subsidiaries
135 81
Other securities and investments 11, 14
5,874 5,991
Financial assets
10,084 10,120
Non-current assets
10,147 10,187
Receivables from subsidiaries
2,539 1,812
Income tax
1 -
Other receivables
19 20
Receivables
2,559 1,832
Cash and bank balances
62 177
Current assets
2,621 2,009
Assets
12,768 12,196
Equity and liabilities, DKKm Note 2023 2022
Capital base 12
4,357 4,162
Reserve for future grants
1,500 1,500
Retained earnings
4,855 4,661
Equity
10,712 10,323
Pension obligations etc.
13
4
4
Provisions
4 4
Payable grants, long-term
1,382 1,205
Non-current liabilities
1,382 1,205
Payable grants, short-term
656 648
Income tax
- 3
Other payables 14
14 13
Current liabilities
670
664
Liabilities
2,052 1,869
Equity and liabilities
12,768 12,196
Management review
Financial statements Consolidated financial statements Parent financial statements Notes Reports
Lundbeck Foundation Annual Report 2023 Page 126
Statement of changes in equity
for the period 1 January – 31 December
DKKm Note Capital base
Reserve for
future grants
Retained
earnings
Total
Equity at 1 January 2023
4,162 1,500 4,661 10,323
Grants, net 15 - -580 - -580
Profit for the year 7 195 580 194 969
Equity at 31 December 2023 4,357 1,500 4,855 10,712
Equity at 1 January 2022 3,901 1,500 4,164 9,565
Grants, net 15 - -539 - -539
Profit for the year 7 261 539 497 1,297
Equity at 31 December 2022
4,162
1,500
4,661
10,323
Management review
Financial statements Consolidated financial statements Parent financial statements Notes Reports
Lundbeck Foundation Annual Report 2023 Page 127
Accounting policies - continued
Note 1
The financial statements for Lundbeckfonden (the
Parent Foundation) for 2023 have been prepared in
accordance with the Danish Financial Statements Act
for large reporting enterprises class C.
Other securities and investments are accounted for
using the fair value through the income statement and
accounted for in accordance with IFRS 9.
The financial statements are presented in Danish kroner
(DKK), which is also the functional currency of
Lundbeckfonden. All amounts have been rounded to
millions, unless otherwise indicated.
The accounting policies are unchanged from the
previous year.
Differences relative to the accounting policies for
the consolidated financial statements
The Parent Foundation’s accounting policies for
recognition and measurement are consistent with the
policies for the consolidated financial statements with
the exceptions stated below.
Investments in subsidiaries
Investments in subsidiaries are measured at cost. Costs
include the consideration at fair value plus direct
acquisition costs.
Subsequently, investments in subsidiaries that suffered
an impairment are reviewed for possible reversal of the
impairment at the end of each balance sheet date.
Reversal of impairment is recognised in financial
income.
If there is an indication of impairment, an impairment
test is performed. Where the carrying amount exceeds
the recoverable amount, the investments are written
down to this lower value. The recoverable amount is the
higher of fair value less costs to sell and value-in-use.
Dividends are recognised in the income statement.
Cash flow statement
With reference to section 86(4) of the Danish Financial
Statements Act and the consolidated financial
statements of Lundbeckfonden, the parent has not
prepared a cash flow statement.
Note 1
Accounting policies
Note 2
Financial income and expenses
DKKm 2023 2022
Financial income
Fair value adjustments on financial assets
988
144
Interest on financial assets 77 35
Interest on receivables from subsidiaries
70 12
Reversal of impairment of investments in subsidiaries
27
-
Dividends from portfolio investments 55 66
Exchange gains
- 13
Total financial income
1,217 270
Financial expenses
Fair value adjustments on financial assets 145 1,072
Interest expenses
2 1
Exchange losses
5 2
Other financial expenses
2 4
Total financial expenses
154 1,079
Management review
Financial statements Consolidated financial statements Parent financial statements Notes Reports
Lundbeck Foundation Annual Report 2023 Page 128
Employee costs - continued
Note 3
Members of Executive Management and the Board of
Directors, who also serve as board members in
subsidiaries also receive board remuneration directly
from such subsidiaries. For a complete description
hereof, see note 3 in the consolidated financial
statements.
Note 5
Fees to auditors appointed at the
annual meeting
DKKm 2023 2022
Statutory audit
0.3 0.3
Tax assistance 0.5 -
Other services
0.7 -
Total fees
1.5 0.3
Other external costs include fees to auditors appointed
by the Board of Directors.
Note 6
Tax on profit for the year
DKKm 2023 2022
Current tax
8
11
Prior-year adjustments -2
-5
Tax on profit for the year 6
6
When calculating the taxable income, Lundbeckfonden
has deducted grants and tax provisions for future
grants. No deferred taxes are recognised for accounting
purposes concerning tax provisions for future grants
as these are not expected to materialise. Deferred tax
liabilities not recognised amounted to DKK 1,018m (DKK
631m at 31 December 2022).
Note 3
Employee costs
DKKm 2023 2022
Wages and salaries
40.3
37.8
Pensions 5.0
4.3
Other social security costs 0.2
0.2
Total employee costs 45.5
42.3
Average number of employees during the year 28
25
Number of employees at year-end 30
29
DKKm 2023 2022
Remuneration of the Executive Management (excluding remuneration received from subsidiaries)
6.1
5.5
Fees to the Board of Directors, including committee fees (excluding fees received from subsidiaries) 4.5
4.1
Note 4
Total operating costs of Lundbeckfonden and Lundbeckfond Invest A/S
DKKm 2023 2022
Lundbeckfonden - Employee costs, other external costs, and depreciation and amortisation
88
80
Lundbeckfond Invest A/S - Employee costs and other external costs
74
90
Total costs 162
170
The costs can be allocated to Lundbeckfonden's activities as follows:
Grants & Prizes 31
28
Invest 21
23
Lundbeckfonden BioCapital 29
36
Corporate functions 81
83
Total costs 162
170
Management review
Financial statements Consolidated financial statements Parent financial statements Notes Reports
Lundbeck Foundation Annual Report 2023 Page 129
Proposed distribution of profit - continued
Note 7
DKKm
2023 2022
Capital base
195
261
Reserve for future grants 580
539
Retained earnings 194
497
Profit for the year 969
1,297
Note 8
Intangible assets
Other intangible assets,
DKKm
2023 2022
Cost at 1 January
8
7
Additions 1
1
Cost at 31 December 9
8
Amortisation at 1 January -6
-5
Amortisation -1
-1
Amortisation at 31 December
-7
-6
Carrying amount at 31
December
2
2
Property and equipment,
DKKm
2023 2022
Cost at 1 January
100
100
Cost at 31 December 100
100
Depreciation at 1 January -35
-31
Depreciation
-4
-4
Depreciation at 31 December -39
-35
Carrying amount at 31
December
61
65
Note 7
Proposed distribution of profit
Note 9
Tangible assets
Note 10
Investments in subsidiaries
DKKm
Lundbeckfond
Invest A/S
Vesper Bio ApS Total
Cost at 1 January 2023
4,046 29 4,075
Cost at 31 December 2023 4,046 29 4,075
Impairment at 1 January 2023 - -27 -27
Reversal of impairment - 27 27
Impairment at 31 December 2023 - - -
Carrying amount at 31 December 2023 4,046 29 4,075
DKKm
Lundbeckfond
Invest A/S Vesper Bio ApS Total
Cost at 1 January 2022 4,046 29 4,075
Cost at 31 December 2022 4,046 29 4,075
Impairment at 1 January 2022 - -27 -27
Impairment at 31 December 2022 - -27 -27
Carrying amount at 31 December 2022 4,046 2 4,048
Dividend received in 2022 2,192 - 2,192
Subsidiaries, DKKm
Registered
office Ownership
Profit for the
year 2023
Equity at
31 December
2023
Lundbeckfond Invest A/S Copenhagen
100% 3,954
27,751
Vesper Bio ApS Copenhagen
75% -53
-113
Management review
Financial statements Consolidated financial statements Parent financial statements Notes Reports
Lundbeck Foundation Annual Report 2023 Page 130
Other securities and investments - continued
Note 11
Note 13
Pension obligations
Note 11
Other securities and investments
DKKm
Bonds and
corporate
loans
Equities
Unlisted
investment
funds
Derivative
financial
instruments
Total
Carrying amount at 1 January 2023
2,742 3,136 113 -3 5,988
Additions 1,075 761 61 5 1,902
Disposals -2,277 -560 -8 -14 -2,859
Value adjustments 40 776 15 12 843
Carrying amount at 31 December 2023 1,580 4,113 181 - 5,874
Recognised in:
Financial assets 1,580 4,113 181 - 5,874
Carrying amount at 31 December 2023 1,580 4,113 181 - 5,874
Carrying amount at 1 January 2022 2,728 3,889 67 - 6,684
Additions 2,586 201 34 -2 2,819
Disposals -2,267 -318 -2 - -2,587
Value adjustments -305 -636 14 -1 -928
Carrying amount at 31 December 2022 2,742 3,136 113 -3 5,988
Recognised in:
Financial assets 2,742 3,136 113 - 5,991
Other Payables - - - -3 -3
Carrying amount at 31 December 2022 2,742 3,136 113 -3 5,988
Note 12
Capital base
DKKm 2023 2022 2021 2020 2019
Capital base at 1 January
4,162 3,901 3,461 3,236 3,114
Increase in capital base
195
261
440
225
122
Capital base at 31 December 4,357 4,162 3,901 3,461 3,236
DKKm 2023 2022
Obligations at 1 January
4
4
Adjustment for the year -
-
Obligations at 31 December 4
4
Management review
Financial statements Consolidated financial statements Parent financial statements Notes Reports
Lundbeck Foundation Annual Report 2023 Page 131
Financial instruments - continued
Note 14
Note 15
Grants, net
Note 16
Contractual obligations
Lundbeckfonden has contractual capital contribution
obligations amounting to DKK 27m at 31 December 2023
(DKK 89m at 31 December 2022).
Lundbeckfonden defines related parties as
Lundbeckfonden’s Board of Directors and Executive
Management, its wholly-owned investment and holding
company Lundbeckfond Invest A/S and this company’s
subsidiaries H. Lundbeck A/S, ALK-Abelló A/S, Falck A/S,
LFI Equity A/S, LFI Silva Investments A/S, DySIS Medical
Ltd., and Vesper Bio ApS, including their subsidiaries and
associates.
Lundbeckfond Invest A/S shares the same address as
Lundbeckfonden, and there is duality of membership
between the Executive Management, administration
(partly) and Boards of Directors. Lundbeckfonden
receives dividends from Lundbeckfond Invest A/S, which
are recognised in the income statement.
Lundbeckfonden received payment for administration
costs, net amount DKK 11m in 2023 (DKK 7m in 2022)
from Lundbeckfond Invest A/S. At 31 December 2023
Lundbeckfonden has a receivable from Lundbeckfond
Invest A/S of DKK 2,539m (DKK 1,812m at 31 December
2022) and a receivable from Vesper Bio ApS of DKK 141m
(DKK 83m at 31 December 2022). Lundbeckfonden
received interest on receivables from Lundbeck Invest
A/S and Vesper Bio ApS of DKK 61m (DKK 8m) and DKK
9m (DKK 4m), respectively.
In 2022, Lundbeckfonden received dividend from
Lundbeckfond Invest A/S of DKKm 2,192m.
For information on remuneration paid to the members
of the Executive Management and Board of Directors,
see note 3 in the consolidated financial statements.
Other than the above, there have only been a few
transactions of immaterial importance with related
parties.
The Foundation has not entered into any transactions
with related parties that were not on an arm’s length
basis.
Note 18
Events after the balance sheet date
No events of importance to the annual report have
occurred during the period from the balance sheet date
until the presentation of the financial statements.
Note 14
Financial instruments
Equity contracts, DKKm Contractual value
Share option
gains/losses
recognised in the
income statement
Market value
31 December
Expiry
2022
Options on shares -158
-1
-
3
Mar 23
Equity contracts -158
-1
-
3
DKKm 2023 2022
Grants for the year
592
550
Reversed grants/repayments -12
-11
Net grants for the year 580
539
Note 17
Related parties
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 132
The Executive Management and the Board of Directors
have today considered and adopted the annual report
of Lundbeckfonden for the financial year 1 January -
31 December 2023.
The consolidated financial statements is prepared in
accordance with IFRS Accounting Standards as adopted
by the EU and further requirements in the Danish
Financial Statements Act, and the Parent Foundation
Financial Statements have been prepared in accordance
with the Danish Financial Statements Act.
In our opinion, the Consolidated Financial Statements
and the Parent Foundation Financial Statements
give a true and fair view of the financial position at
31 December 2023 of the Group and the Parent
Foundation, and of the results of the Group’s and the
Parent Foundation’s operations and the Group’s cash
flows for 2023.
In our opinion, Management Review includes a true and
fair account of the development in the operations and
financial circumstances of the Group and the Parent
Foundation, of the results for the year and of the
financial position of the Group and the Parent
Foundation as well as a description of the most
significant risks and elements of uncertainty facing
the Group and the Parent Foundation.
We recommend that the Annual Report be adopted
at the Board of Directors Meeting.
Copenhagen, 12 March 2024
Manaement statement
Executive Management
Lene Skole
CEO
Board of
Directors
Steffen Kragh
Chair
Peter Schütze
Deputy Chair
Lars Holmqvist
Michael Kjær
Susanne Krüger Kjær
Svend Andersen
Thomas Mears Werge
Henrik Sindal Jensen
Elected by the employees
Katja Barnkob
Elected by the employees
Mikkel Helmer Nielsen
Elected by the employees
Morten Egholm Aagaard
Elected by the employees
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 133
To the Board of Directors
of Lundbeckfonden
Opinion
In our opinion, the Consolidated Financial Statements
give a true and fair view of the Group’s financial position
at 31 December 2023 and of the results of the Group’s
operations and cash flows for the financial year 1
January to 31 December 2023 in accordance with IFRS
Accounting Standards as adopted by the EU and further
requirements in the Danish Financial Statements Act.
Moreover, in our opinion, the Parent Foundation
Financial Statements give a true and fair view of the
Parent Foundation’s financial position at 31 December
2023 and of the results of the Parent Foundation’s
operations for the financial year 1 January to
31 December 2023 in accordance with the Danish
Financial Statements Act.
We have audited the Consolidated Financial Statements
and the Parent Foundation Financial Statements of
Lundbeckfonden for the financial year 1 January -
31 December 2023, which comprise income statement,
balance sheet, statement of changes in equity and
notes, including material accounting policy information,
for both the Group and the Parent Foundation, as well
as statement of comprehensive income and cash flow
statement for the Group (“financial statements”).
Basis for Opinion
We conducted our audit in accordance with
International Standards on Auditing (ISAs) and the
additional requirements applicable in Denmark. Our
responsibilities under those standards and
requirements are further described in the
Auditor’s
Responsibilities for the Audit of the Financial
Statements
section of our report. We are independent
of the Group in accordance with the International Ethics
Standards Board for Accountants’ International Code of
Ethics for Professional Accountants (IESBA Code) and
the additional ethical requirements applicable in
Denmark, and we have fulfilled our other ethical
responsibilities in accordance with these requirements
and the IESBA Code. We believe that the audit evidence
we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Statement on Management Review
Management is responsible for Management Review.
Our opinion on the financial statements does not cover
Management Review, and we do not express any form
of assurance conclusion thereon.
In connection with our audit of the financial
statements, our responsibility is to read Management
Review and, in doing so, consider whether Management
Review is materially inconsistent with the financial
statements or our knowledge obtained during the audit,
or otherwise appears to be materially misstated.
Moreover, it is our responsibility to consider whether
Management Review provides the information required
under the Danish Financial Statements Act.
Based on the work we have performed, in our view,
Management Review is in accordance with the
Consolidated Financial Statements and the Parent
Foundation Financial Statements and has been
prepared in accordance with the requirements of the
Danish Financial Statement Act. We did not identify any
material misstatement in Management Review.
Management’s Responsibilities
for the Financial Statements
Management is responsible for the preparation of
Consolidated Financial Statements that give a true and
fair view in accordance with IFRS Accounting Standards
as adopted by the EU and further requirements in the
Danish Financial Statements Act and for the
preparation of Parent Foundation Financial Statements
that give a true and fair view in accordance with the
Danish Financial Statements Act, and for such internal
control as Management determines is necessary to
enable the preparation of financial statements that are
free from material misstatement, whether due to fraud
or error.
In preparing the financial statements, Management is
responsible for assessing the Group’s and the Parent
Foundation’s ability to continue as a going concern,
disclosing, as applicable, matters related to going
concern and using the going concern basis of
accounting in preparing the financial statements unless
Management either intends to liquidate the Group or
the Parent Foundation or to cease operations, or has no
realistic alternative but to do so.
Auditor’s Responsibilities for the Audit
of the Financial Statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free
from material misstatement, whether due to fraud or
error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit
conducted in accordance with ISAs and the additional
requirements applicable in Denmark will always detect a
material misstatement when it exists. Misstatements
can arise from fraud or error and are considered
material if, individually or in the aggregate, they could
reasonably be expected to influence the economic
decisions of users taken on the basis of these financial
statements.
As part of an audit conducted in accordance with ISAs
and the additional requirements applicable in Denmark,
we exercise professional judgement and maintain
professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement
of the financial statements, whether due to fraud or
error, design and perform audit procedures responsive
to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for
one resulting from error as fraud may involve
collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
Independent Auditor’s Report
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 134
• Obtain an understanding of internal control relevant
to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness
of the Group’s and the Parent Foundation’s internal
control.
• Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates
and related disclosures made by Management.
• Conclude on the appropriateness of Management’s
use of the going concern basis of accounting in
preparing the financial statements and, based on the
audit evidence obtained, whether a material
uncertainty exists related to events or conditions that
may cast significant doubt on the Group’s and the
Parent Foundation’s ability to continue as a going
concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our
auditor’s report to the related disclosures in the
financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the
date of our auditor’s report. However, future events or
conditions may cause the Group and the Parent
Foundation to cease to continue as a going concern.
• Evaluate the overall presentation, structure and
contents of the financial statements, including the
disclosures, and whether the financial statements
represent the underlying transactions and events in a
manner that gives a true and fair view.
• Obtain sufficient appropriate audit evidence regarding
the financial information of the entities or business
activities within the Group to express an opinion on
the Consolidated Financial Statements. We are
responsible for the direction, supervision and
performance of the group audit. We remain solely
responsible for our audit opinion.
We communicate with those charged with governance
regarding, among other matters, the planned scope and
timing of the audit and significant audit findings,
including any significant deficiencies in internal control
that we identify during our audit.
Hellerup, 12 March 2024
PricewaterhouseCoopers
Statsautoriseret Revisionspartnerselskab
CVR No 33 77 12 31
Lars Baungaard
State Authorised Public Accountant
mne23331
Torben Jensen
State Authorised Public Accountant
mne18651
Management review
Financial statements Consolidated financial statements Notes Parent financial statements Reports
Lundbeck Foundation Annual Report 2023 Page 135
Lundbeckfonden
Scherfigsvej 7
2100
København Ø
CVR 11814913
Annual reportAuditor's report on audited financial statementsParsePort XBRL Converter2023-01-012023-12-312022-01-012022-12-312024-03-12Lene Skole254900JH964PYU6MC463Reporting class C, large enterprise11814913+4539128000www.lundbeckfonden.commail@lundbeckfonden.comhttps://www.lundbeckfonden.com/en/sustainabilityhttps://www.lundbeckfonden.com/en/sustainability2024-03-12529900VSWLQF0O3GA94633771231PricewaterhouseCoopers Statsautoriseret RevisionspartnerselskabStrandvejen 442900 HellerupOpinionBasis for Opinion2024-03-123377123133771231PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab254900JH964PYU6MC4632023-01-012023-12-31cmn:ConsolidatedMember254900JH964PYU6MC4632023-12-31cmn:ConsolidatedMember254900JH964PYU6MC4632023-01-012023-12-31cmn:ConsolidatedMember1254900JH964PYU6MC4632023-01-012023-12-31cmn:ConsolidatedMember2254900JH964PYU6MC4632023-01-012023-12-31254900JH964PYU6MC4632022-01-012022-12-31254900JH964PYU6MC4632023-12-31254900JH964PYU6MC4632022-12-31254900JH964PYU6MC4632021-12-31254900JH964PYU6MC4632022-12-31ifrs-full:IssuedCapitalMember254900JH964PYU6MC4632023-01-012023-12-31ifrs-full:IssuedCapitalMember254900JH964PYU6MC4632023-12-31ifrs-full:IssuedCapitalMember254900JH964PYU6MC4632022-12-31ifrs-full:OtherReservesMember254900JH964PYU6MC4632023-01-012023-12-31ifrs-full:OtherReservesMember254900JH964PYU6MC4632023-12-31ifrs-full:OtherReservesMember254900JH964PYU6MC4632022-12-31ifrs-full:RetainedEarningsMember254900JH964PYU6MC4632023-01-012023-12-31ifrs-full:RetainedEarningsMember254900JH964PYU6MC4632023-12-31ifrs-full:RetainedEarningsMember254900JH964PYU6MC4632022-12-31ifrs-full:EquityAttributableToOwnersOfParentMember254900JH964PYU6MC4632023-01-012023-12-31ifrs-full:EquityAttributableToOwnersOfParentMember254900JH964PYU6MC4632023-12-31ifrs-full:EquityAttributableToOwnersOfParentMember254900JH964PYU6MC4632022-12-31ifrs-full:NoncontrollingInterestsMember254900JH964PYU6MC4632023-01-012023-12-31ifrs-full:NoncontrollingInterestsMember254900JH964PYU6MC4632023-12-31ifrs-full:NoncontrollingInterestsMember254900JH964PYU6MC4632021-12-31ifrs-full:IssuedCapitalMember254900JH964PYU6MC4632022-01-012022-12-31ifrs-full:IssuedCapitalMember254900JH964PYU6MC4632021-12-31ifrs-full:OtherReservesMember254900JH964PYU6MC4632022-01-012022-12-31ifrs-full:OtherReservesMember254900JH964PYU6MC4632021-12-31ifrs-full:RetainedEarningsMember254900JH964PYU6MC4632022-01-012022-12-31ifrs-full:RetainedEarningsMember254900JH964PYU6MC4632021-12-31ifrs-full:EquityAttributableToOwnersOfParentMember254900JH964PYU6MC4632022-01-012022-12-31ifrs-full:EquityAttributableToOwnersOfParentMember254900JH964PYU6MC4632021-12-31ifrs-full:NoncontrollingInterestsMember254900JH964PYU6MC4632022-01-012022-12-31ifrs-full:NoncontrollingInterestsMember254900JH964PYU6MC4632022-01-012022-12-31cmn:ConsolidatedMember254900JH964PYU6MC4632023-01-012023-12-31cmn:ConsolidatedMember1254900JH964PYU6MC4632023-01-012023-12-31cmn:ConsolidatedMember1254900JH964PYU6MC4632023-01-012023-12-31cmn:ConsolidatedMember2254900JH964PYU6MC4632023-01-012023-12-31cmn:ConsolidatedMember3254900JH964PYU6MC4632023-01-012023-12-31cmn:ConsolidatedMember5254900JH964PYU6MC4632023-01-012023-12-31cmn:ConsolidatedMember6254900JH964PYU6MC4632023-01-012023-12-31cmn:ConsolidatedMember7254900JH964PYU6MC4632023-01-012023-12-31cmn:ConsolidatedMember4254900JH964PYU6MC4632023-01-012023-12-31cmn:ConsolidatedMember8254900JH964PYU6MC4632023-01-012023-12-31cmn:ConsolidatedMember9254900JH964PYU6MC4632023-01-012023-12-31cmn:ConsolidatedMember10254900JH964PYU6MC4632023-01-012023-12-31cmn:ConsolidatedMember11iso4217:DKKxbrli:pure