Corporate Release
Valby, Denmark, May 11, 2022
Corporate Release No 720/2022
Quarterly corporate release for the period January 1 to March 31, 2022
Focus on strategic brands continues to ensure solid operational
performance in Q1 2022
HIGHLIGHTS
First quarter of 2022 was strong. In aggregate, strategic brands grew 25% in the first quarter of 2022 reaching DKK
2,668 million or 61% of total revenue. Total revenue reached DKK 4,372 million in the quarter, an increase of 2%,
as the quarter was impacted by lower revenue of Northera
®
following its loss of exclusivity in the first quarter of 2021
while also benefitting from appreciation of main currencies.
EBIT reached DKK 875 million compared to DKK 882 million for the first quarter of 2021. Core EPS reached DKK
4.67 for the first quarter of 2022 compared to a Core EPS of DKK 4.65 in 2021.
Strategic brand performance:
➢ Revenue of Brintellix
®
/Trintellix
®
: DKK 990 million (+23%).
➢ Revenue of Rexulti
®
/Rxulti
®
: DKK 831 million (+24%).
➢ Revenue of Abilify Maintena
®
: DKK 677 million (+16%).
➢ Revenue of Vyepti
®
: DKK 170 million (+124%).
Market performance:
➢ Revenue in the United States: DKK 1,918 million (down 1%).
➢ Revenue in International Markets: DKK 1,456 million (+16%).
➢ Revenue in Europe: DKK 1,022 million (+11%).
Outlook 2022 maintained
• Revenue expected at DKK 16.7 – 17.3 billion.
• Core EBIT expected at DKK 3.6 – 4.0 billion.
• EBIT expected at DKK 2.2 – 2.6 billion.
In connection with the quarterly corporate release, Lundbeck’s President and CEO, Deborah Dunsire
said:
“Lundbeck continues to deliver robust financial performance with its strong portfolio of brands. Vyepti is growing as
the pandemic impact on face-to-face interactions diminishes. We are delighted with the new data from the VIVRE
study comparing Brintellix/Trintellix to desvenlafaxine, further strengthening its profile as a great choice for people
facing depression. Our pipeline continues to progress, and we look forward to important clinical data readouts from
ongoing studies with Rexulti, Vyepti and our early-stage projects in the coming quarters.”
Key figures:
*For definition of the measures “Core Revenue”, “Core EBIT”, “Core EBIT margin” and “Core EPS”, see note 4 Core reporting
DKK million
Q1 2022
Q1 2021
Growth
Core Revenue*
4,372
4,273
2%
Core EBIT*
1,184
1,253
(6%)
Core EPS* (DKK)
4.67
4.65
-
Core EBIT margin*
27.1%
29.3%
Reported Revenue
4,372
4,273
2%
Reported EBIT
875
882
(1%)
Reported EPS (DKK)
2.07
3.13
(34%)
Reported EBIT margin
20.0%
20.6%
Corporate Release
Valby, Denmark, May 11, 2022
Corporate Release No 720/2022
The newest product in the portfolio, Vyepti, continues to grow, reaching DKK 170 million for the quarter compared
to DKK 76 million in the first quarter of 2021. Following approval in several markets including EU, the global roll-out
will increase pace in 2022. Vyepti has also been launched in Australia, Singapore and Switzerland now. All patients
are enrolled in the SUNLIGHT phase III study within Chronic Migraine and Medication Overuse Headache in Asia,
thus ensuring on-track headline results in the second half of 2022.
The last patients have been enrolled in the phase III study of brexpiprazole in patients facing Agitation in Alzheimer's
Disease, thus on track for headline results by mid-2022.
The early-stage pipeline is also progressing as planned. The first subject was dosed in Single-Ascending Dose
(SAD) phase I study with Lu AG22515 (CD40L inhibitor).
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Corporate Release No 720/2022
CONTENTS
FINANCIAL HIGHLIGHTS AND KEY FIGURES ..................................................4
MANAGEMENT REVIEW ..............................................................................5
Financial guidance and forward-looking statements .....................................5
Revenue ...............................................................................................6
Expenses and profits ............................................................................ 11
Cash flows .......................................................................................... 13
Financial position ................................................................................. 13
Lundbeck's development portfolio ........................................................... 14
Sustainability update ............................................................................ 18
General corporate matters .................................................................... 19
STATEMENT OF THE BOARD OF DIRECTORS AND THE REGISTERED EXECUTIVE
MANAGEMENT ........................................................................................ 21
CONDENSED FINANCIAL STATEMENTS ....................................................... 22
FINANCIAL CALENDAR 2022 ..................................................................... 29
QUARTERLY RELEASE FOR THE PERIOD JANUARY 1 TO MARCH 31, 2022 Page 4
Corporate Release No 720/2022
FINANCIAL HIGHLIGHTS AND KEY FIGURES
Q1 2022
Q1 2021
FY 2021
Financial highlights (DKK million)
Core revenue
4,372
4,273
16,299
Core profit from operations (core EBIT)
1,184
1,253
3,517
Reported revenue
4,372
4,273
16,299
Operating profit before depreciation and amortization (EBITDA)
1,290
1,352
3,720
Reported profit from operations (EBIT)
875
882
2,010
Net financials, expenses
347
85
429
Profit before tax
528
797
1,581
Tax
116
176
263
Profit for the period
412
621
1,318
Equity
18,446
17,223
18,279
Assets
35,071
34,465
34,653
Cash flows from operating and investing activities (free cash flow)
(1,368)
24
1,662
Purchase of property, plant and equipment, gross
56
61
410
Key figures
Core EBIT margin (%)
27.1
29.3
21.6
EBIT margin (%)
20.0
20.6
12.3
Return on equity (%)
2.2
3.6
7.5
Return on equity (%) – rolling four quarters
6.2
12.6
7.5
Net debt/EBITDA (x) – rolling four quarters
1.4
1.0
0.9
Share data
Number of shares for the calculation of EPS (millions)
198.7
198.7
198.7
Number of shares for the calculation of DEPS (millions)
198.7
198.7
198.7
Earnings per share, basic (EPS) (DKK)
2.07
3.13
6.63
Earnings per share, diluted (DEPS) (DKK)
2.07
3.13
6.63
Other
Number of employees (FTE) – end of period
5,353
5,551
5,348
QUARTERLY RELEASE FOR THE PERIOD JANUARY 1 TO MARCH 31, 2022 Page 5
Corporate Release No 720/2022
MANAGEMENT REVIEW
Financial guidance and forward-looking statements
Financial guidance
DKK
FY 2021 actual
2022 guidance
Revenue
16,299 million
DKK 16.7 – 17.3 billion
EBITDA
3,720 million
DKK 4.0 – 4.4 billion
Core EBIT
3,517 million
DKK 3.6 – 4.0 billion
Profit from operations (EBIT)
2,010 million
DKK 2.2 – 2.6 billion
Lundbeck’s financial guidance for 2022 is maintained
and will be driven by the continued growth of Abilify
Maintena, Brintellix/Trintellix, Rexulti/Rxulti and the
strong growth of Vyepti.
The Russian war against Ukraine has had limited
impact on Lundbeck’s financial results for the first
quarter. Lundbeck has ceased new investments and
further accrual to clinical trials as well as diminished
promotional activities in Russia. The situation
increases uncertainty and Lundbeck continues to
monitor any potential impact on an ongoing basis.
Lundbeck has foreign currency risk mainly in USD,
CNY and CAD. The financial guidance for 2022 is
based on the currencies prevailing by the end of the
first quarter. The hedging rates for the main
currencies, i.e., USD/DKK (6.36), CNY/DKK (0.98)
and CAD/DKK (5.01) and the financial guidance
includes an expected hedging loss of approximately
DKK 330 million.
Based on the assumptions for product and
geographical mix, it is estimated that a 5% change of
the USD/DKK exchange rate will impact revenue by
around DKK 200 million.
The current positive impact on product revenue from
the appreciating currencies is offset by the negative
hedging effect.
Lundbeck plans to launch Vyepti in around ten
markets during 2022. Therefore, SG&A is expected
to increase over the coming quarters.
The proposed A- and B-share structure
Lundbeck still expects that the proposed new share
structure with A-shares and B-shares will be put
forward by Lundbeck for approval by the
shareholders at an extraordinary general meeting
(EGM) to be held in the first half of June 2022. The
notice for the EGM will be published no less than
three weeks prior to the date of the EGM. The share
split is expected to take effect two business days after
approval at the EGM, without any need for the
shareholders to subscribe for the shares. The
proposed share split and admission to listing and
trading of the two new share classes require
publication of a listing document, which will be
published prior to the EGM.
Exchange offer by the Lundbeck Foundation
As previously announced, the Lundbeck Foundation
has informed Lundbeck, that the Lundbeck
Foundation, subject to the Danish Financial
Supervisory Authority's approval of the listing
document (prospectus), will offer eligible
shareholders a 1:1 exchange of their A-shares with
the Lundbeck Foundation’s B-shares to
accommodate shareholders who prefer to hold B-
shares. The Lundbeck Foundation has informed
Lundbeck that it expects the exchange offer will be
made shortly after the new A- and B-shares have
been admitted to trading on Nasdaq Copenhagen,
which is expected to be two business days after the
anticipated adoption of the dual share structure at the
EGM. The intended exchange offer will end
approximately 20 business days after the admission
to trading of the new shares and the offer period will
thus be longer than the 14 days mentioned in the
Lundbeck Foundation's press release from February
9, 2022.
QUARTERLY RELEASE FOR THE PERIOD JANUARY 1 TO MARCH 31, 2022 Page 6
Corporate Release No 720/2022
None of the securities referred to herein have been
or will be registered under the United States
Securities Act of 1933, as amended (the “Securities
Act”), or the securities laws of any state or other
jurisdiction in the United States, and may not be
offered, pledged, sold, delivered or otherwise
transferred, directly or indirectly, except pursuant to
an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act
and in compliance with applicable other securities
laws. There will not be any public offering of any of
the securities in the United States.
Termination of U.S. ADR program
In consideration of the intention to split Lundbeck’s
shares into an A-share and a B-share following the
EGM in June 2022, Lundbeck's American Depositary
Receipt (ADR) program, currently managed by
Deutsche Bank will be terminated following the
required notice period. Deutsche Bank will alert the
ADR holders directly.
Forward-looking statements
Forward-looking statements are subject to risks,
uncertainties, and inaccurate assumptions. This may
cause actual results to differ materially from
expectations. Various factors may affect future
results, including interest rates and exchange rate
fluctuations, delay or failure of development projects,
production problems, unexpected contract breaches
or terminations, governance-mandated or market-
driven price decreases for products, introduction of
competing products, Lundbeck’s ability to
successfully market both new and existing products,
exposure to product liability and other lawsuits,
changes in reimbursement rules and governmental
laws, and unexpected growth in expenses.
Revenue
Revenue reached DKK 4,372 million in the first
quarter of 2022 compared to DKK 4,273 million in the
first quarter of 2021. Adjusted for the impact from
Northera erosion, revenue grew by 9%. The strategic
brands (Abilify Maintena, Brintellix/Trintellix, Rexulti/
Rxulti and Vyepti) grew 25% and reached DKK 2,668
million or 61% of total revenue. Lundbeck’s biggest
markets for the strategic brands are the U.S.,
Canada, Spain, Italy and France.
The growth in total sales is primarily a consequence
of strong growth of the strategic brands and
appreciation of main currencies which to some extent
has been countered by generic erosion of Northera
from February 2021. Lundbeck’s biggest markets are
the U.S., China, Canada, Italy, Spain and Japan.
Hedging
Lundbeck hedges a significant part of the currency
risk for a period of 12 - 18 months. Hedging had a
negative impact of DKK 89 million for the first quarter
of 2022, compared to a positive impact of DKK 68
million for the first quarter of 2021.
QUARTERLY RELEASE FOR THE PERIOD JANUARY 1 TO MARCH 31, 2022 Page 7
Corporate Release No 720/2022
Revenue - products and regions
DKK million
Q1 2022
Q1 2021
Growth
Growth in local
currencies
Q4 2021
Brintellix/Trintellix
990
804
23%
17%
961
Rexulti
831
672
24%
14%
737
Abilify Maintena
677
584
16%
11%
610
Vyepti
170
76
124%
105%
164
Cipralex/Lexapro
682
666
2%
1%
511
Sabril
152
167
(9%)
(16%)
170
Onfi
82
146
(44%)
(49%)
123
Other pharmaceuticals
812
1,009
(20%)
(24%)
666
Other revenue
65
81
(20%)
(21%)
136
Effects from hedging
(89)
68
(25)
Total revenue
4,372
4,273
2%
(1%)
4,053
United States
1,918
1,947
(1%)
(9%)
1,948
International Markets
1,456
1,256
16%
10%
1,025
Europe
1,022
921
11%
12%
969
Products
Abilify Maintena (aripiprazole once-monthly
injection) is approved for the treatment of
schizophrenia in the EU and for both schizophrenia
and bipolar I disorder in the U.S., Canada and
Australia. Sales reached DKK 677 million
representing a growth of 16%. The regional
distribution of sales was 34%, 18% and 48% in the
U.S., International Markets and Europe, respectively.
The largest markets are the U.S., Spain, Canada,
Australia and Italy.
Brintellix/Trintellix (vortioxetine) is Lundbeck’s
largest product and is approved for the treatment of
major depressive disorder (MDD). Sales grew 23%
and reached DKK 990 million. The regional
distribution of sales was 35%, 34% and 31% in the
U.S., International Markets and Europe, respectively.
The largest markets for the product are the U.S.,
Canada, Spain, China and Brazil.
Rexulti/Rxulti (brexpiprazole) is Lundbeck’s second
largest product and is approved as an adjunctive
therapy for the treatment of adults with MDD and as
a treatment for adults with schizophrenia in markets
such as the U.S., Canada and Saudi Arabia. In
Australia and Europe, the product is approved for
schizophrenia. Lundbeck’s share of revenue reached
DKK 831 million for the quarter representing a growth
of 24%. The regional distribution of sales was 93%,
6% and 1% in the U.S., International Markets and
Europe, respectively.
Vyepti (eptinezumab) is approved in around 40
markets including the U.S., Australia, Canada and
Europe for the preventive treatment of migraine in
adults. The product reached sales of DKK 170 million
in the first quarter of 2022 mainly following strong
demand. Vyepti was launched in April 2020 in the
U.S. and it has since been launched in Australia,
Kuwait, Singapore, Switzerland and U.A.E. During
2022, Vyepti is expected to be launched in around 10
markets including the first countries in EU.
Cipralex
®
/Lexapro
®
(escitalopram) is approved for
the treatment of MDD. Sales reached DKK 682
million. The regional distribution of sales was 75%
and 25% in International Markets and Europe,
respectively. The largest markets are Japan, China,
Brazil, South Korea and Italy.
Revenue from Other pharmaceuticals, which
comprise the remainder of Lundbeck’s products,
reached DKK 812 million compared to DKK 1,009
million in 2021 following lower sales of mature
QUARTERLY RELEASE FOR THE PERIOD JANUARY 1 TO MARCH 31, 2022 Page 8
Corporate Release No 720/2022
products such as Northera. Northera lost exclusivity
in February 2021 and is now reported together with
Other pharmaceuticals. Sales reached DKK 111
million compared to DKK 348 million in 2021. The
largest markets for Other pharmaceuticals are China,
the U.S., France, South Korea and the UK.
Other revenue, which mainly consists of contract
manufacturing, reached DKK 65 million compared to
DKK 81 million in 2021. The decline in revenue is due
to lower volumes for one of the third-party contracts.
Figure 1 – Revenue per region Q1 2022 vs Q1 2021 (excluding Other revenue and Effects from hedging)
United States
Revenue reached DKK 1,918 million in the first
quarter of 2022 compared to DKK 1,947 million in
2021. The strategic brands increased by 24% and
reached DKK 1,522 million or 79% of sales. The
overall sales growth was significantly impacted by
generic erosion of mature neurology products and
especially Northera.
Revenue – United States
DKK million
Q1 2022
Q1 2021
Growth
Growth in local
currencies
Q4 2021
Rexulti
774
636
22%
12%
693
Trintellix
349
317
10%
1%
399
Abilify Maintena
232
196
18%
10%
205
Vyepti
167
76
120%
101%
162
Sabril
152
167
(9%)
(16%)
170
Onfi
82
146
(44%)
(49%)
123
Other pharmaceuticals
162
409
(60%)
(64%)
196
Total revenue
1,918
1,947
(1%)
(9%)
1,948
Products
Abilify Maintena revenue reached DKK 232 million,
representing Lundbeck’s share of total net sales.
Abilify Maintena has a stable volume market share of
around 21% by January 2022 (source: IQVIA).
Trintellix sales reached DKK 349 million in revenue
for Lundbeck representing a growth of 10%. The
volume market share has been stable around 0.8%
by January 2022 (source: IQVIA). The value market
share of the total anti-depressant market has
increased from 24.2% by January 2021 to 25.8% by
January 2022 (source: IQVIA).
United States
48%
International
Markets
30%
Europe
22%
Q1 2021
United States
44%
International
Markets
33%
Europe
23%
Q1 2022
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Corporate Release No 720/2022
Lundbeck’s share of Rexulti revenue reached DKK
774 million following a growth of 22%. Rexulti has a
volume market share of 2.2% by January 2022, which
is unchanged from January 2021 (source: IQVIA).
Patient data suggest that more than 3/4 of
prescriptions are for MDD. In December 2021, the
U.S. Food and Drug Administration (FDA) approved
the supplemental new drug application (sNDA) of
Rexulti for the treatment of schizophrenia in pediatric
patients 13 to 17 years of age.
Vyepti was approved by the U.S. Food and Drug
Administration (FDA) on February 21, 2020, for the
preventive treatment of migraine in adults. The
product was made available on April 6, 2020 and
reached sales of DKK 167 million in the first quarter
of 2022 which is in line with expectations.
Sabril
®
reached DKK 152 million and Onfi
®
revenue
reached DKK 82 million as Onfi was impacted by
quarterly fluctuations. In Other pharmaceuticals,
Northera sales reached DKK 111 million for the
period following the launch of several generic
versions in February 2021.
International Markets
Revenue from International Markets, which now also
includes Canada (see note 1 Accounting policies)
and therefore comprises all Lundbeck’s markets
outside of Europe and the U.S., reached DKK 1,456
million in the first quarter of 2022. The growth of 16%
was driven by Rexulti and Brintellix. The biggest
markets are China, Canada, Japan, Brazil and South
Korea. China and Canada constitute approximately
40% of regional revenue. The strategic brands
increased by 38% and reached DKK 507 million or
35% of sales.
Revenue – International Markets
DKK million
Q1 2022
Q1 2021
Growth
Growth in local
currencies
Q4 2021
Brintellix
340
237
43%
34%
261
Abilify Maintena
118
100
18%
12%
113
Rexulti
46
31
48%
42%
38
Vyepti
3
-
-
-
2
Cipralex/Lexapro
511
504
1%
(2%)
346
Other pharmaceuticals
438
384
14%
6%
265
Total revenue
1,456
1,256
16%
10%
1,025
Products
Abilify Maintena reached DKK 118 million in
revenue representing a growth of 18%. Sales are
mainly derived from Australia and Canada, where
Abilify Maintena shows robust sales performance in
spite of pandemic-related restrictions last year. In
Australia the volume share has reached 29.5% and
in Canada it has reached 32.4% by January 2022
(source: IQVIA). Countries such as Kuwait, Saudi
Arabia and United Arab Emirates (U.A.E.) also
contributed positively.
Brintellix/Trintellix reached DKK 340 million in
revenue or an increase of 43%. Brintellix realized
solid growth across several markets including China,
Canada, Brazil and Japan, but the growth is also
impacted by quarterly fluctuations. Canada, China,
Brazil, Japan and South Korea are the largest
markets for Brintellix in the region. In Japan, Trintellix
is showing a strong momentum and has reached a
volume market share of 6.4% by March 2022 (source:
IQVIA). Measured by volume market share, it is the
highest market share achieved by the product in the
main markets at this point of the launch. In China,
Brintellix has a volume share of 0.24% (source:
IQVIA). Brintellix is not included in the National
Reimbursement Drug List (NRDL) in China and is not
reimbursed.
Rexulti reached DKK 46 million in sales and grew by
48%. In International Markets, the product has its
highest sales in Brazil followed by Canada. In
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Corporate Release No 720/2022
Australia, Rexulti has maintained a market share of
around 2.3% in volume by January 2022 (source:
IQVIA). In Brazil, Rexulti has now reached a volume
share of 1.8% compared to 0.9% by January 2021
(source: IQVIA) and the majority of product growth in
the region has come from Brazil during the quarter.
Vyepti was introduced in U.A.E. and in Kuwait in the
second half of 2021. In the beginning of 2022, Vyepti
has been launched in Singapore and Australia.
Additional launches are planned for 2022.
Cipralex/Lexapro generated revenue of DKK 511
million representing a growth of 1% (down 2% in local
currencies). Japan, China, Brazil, South Korea and
Hong Kong are the largest markets for
Cipralex/Lexapro in the region.
Other pharmaceuticals generated revenue of DKK
438 million. Azilect is promoted by Lundbeck in some
countries in Asia. Azilect generated revenue of DKK
60 million with some inventory adjustments in China.
Ebixa generated revenue of DKK 132 million, which
is 10% higher compared to 2021.
Europe
Revenue reached DKK 1,022 million in the first
quarter of 2022 compared to DKK 921 million in 2021.
In general, Europe sees continued robust underlying
demand offsetting a continuous negative average
price development and continued generic erosion on
the mature product portfolio. The strategic brands
increased by 18% and reached DKK 639 million or
63% of sales. The largest markets in Europe are
Spain, Italy, France, Switzerland and the UK.
Revenue – Europe
DKK million
Q1 2022
Q1 2021
Growth
Growth in local
currencies
Q4 2021
Abilify Maintena
327
288
14%
13%
292
Brintellix
301
250
20%
21%
301
Rexulti/Rxulti
11
5
120%
100%
6
Cipralex
171
162
6%
10%
165
Other pharmaceuticals
212
216
(2%)
-
205
Total revenue
1,022
921
11%
12%
969
Products
Abilify Maintena is Lundbeck’s largest product in the
region. Sales uptake of Abilify Maintena is robust with
revenue reaching DKK 327 million, a growth of 14%
compared to 2021. In Europe, the penetration of long-
acting atypical antipsychotics is generally higher than
seen in the U.S. (volume). Driven by increasing
demand from patients, sales of Abilify Maintena are
growing across Europe and the product has achieved
a 25% or more market share (volume) in most
markets. In some markets, the volume market share
is approaching or has exceeded 30% (source:
IQVIA). Abilify Maintena is the second most
prescribed long-acting injectable treatment for
patients with schizophrenia in many markets. Spain,
Italy and France are the largest European markets for
Abilify Maintena.
Brintellix revenue grew 20% reaching DKK 301
million. Brintellix is Lundbeck’s second largest
product in Europe and realized solid growth across
many markets. In main countries, Spain, Italy and
France, the product has achieved value market
shares of 10.9%, 10.1% and 11.4%, respectively by
January 2022 (source: IQVIA). The volume shares
have been stable around 3.8%, 3.8% and 3.5%,
respectively (source: IQVIA). The solid growth in
Europe has in some markets been weighted down by
the COVID-19 dynamics; however, a strengthened
uptake is observed in impacted markets as
restrictions are removed.
Rexulti/Rxulti revenue reached DKK 11 million
following a growth of 120%. The product was
launched in Italy in 2021 where it has a volume share
of 0.7% by January 2022 representing a slight
QUARTERLY RELEASE FOR THE PERIOD JANUARY 1 TO MARCH 31, 2022 Page 11
Corporate Release No 720/2022
increase from August 2021 (source: IQVIA).
Rexulti/Rxulti is in most markets co-promoted with
Otsuka Pharmaceuticals.
Vyepti was granted marketing authorization in the
European Union (EU) for the prophylactic treatment
of migraine in adults who have at least four migraine
days per month. The marketing authorization is valid
in all EU Member States, Iceland, Norway and
Liechtenstein. The formal EU approval means that
the milestone for the Contingent Value Rights (CVRs)
of USD 2 per share relating to the acquisition of Alder
BioPharmaceuticals, Inc. in 2019 was met. The
amount payable by Lundbeck to the CVR holders was
totaling approximately USD 230 million (DKK ~1.5
billion) and was paid in the quarter. Additionally,
Vyepti is now approved and launched in Switzerland.
Lundbeck plans to launch in selected markets in the
coming months.
Cipralex generated revenue of DKK 171 million. The
product has been resilient and sees good growth in
some countries but is also positively impacted by
quarterly fluctuations in selected markets and stock
build-up in selected markets.
Revenue from Other pharmaceuticals was DKK
212 million, a decline of 2% compared to 2021, as a
result of continued generic erosion of mature
products.
Expenses and profits
In the first quarter of 2022, total costs increased by
3% to DKK 3,497 million compared to DKK 3,391
million in 2021.
Adjusted for non-core costs, total costs increased by
6% to DKK 3,188 million mainly as a result of
increased activity level post COVID-19 and launch
preparation for Vyepti.
Distribution of costs
Cost of sales declined by 11% to DKK 845 million in
the first quarter of 2022 and the gross margin was
80.7% compared to 77.9% in 2021. Cost of sales was
positively impacted by the loss of exclusivity on
Northera, as the asset was fully depreciated during
the first quarter of 2021, and, also by reduced royalty
costs. Amortization of product rights was DKK 309
million for the quarter compared to DKK 371 million in
2021 due to Northera being fully amortized during the
first quarter of 2021.
Sales and distribution costs were DKK 1,435
million, an increase of 9% compared to 2021 as the
activity level is increasing for e.g. Vyepti launch
preparation, following the COVID-19-related cost
avoidance last year. Additionally, costs were slightly
inflated by provisions made in the first quarter of
2022. Sales and distribution costs corresponded to
32.8% of revenue, compared to 30.8% in 2021.
DKK million
Q1 2022
Q1 2021
Growth
Q4 2021
Cost of sales
845
946
(11%)
1,000
COS-ratio
19.3%
22.1%
24.7%
Sales and distribution costs
1,435
1,318
9%
1,782
S&D-ratio
32.8%
30.8%
44.0%
Administrative expenses
236
210
12%
270
G&A-ratio
5.4%
4.9%
6.7%
Research & development costs
981
917
7%
995
R&D-ratio
22.4%
21.5%
24.5%
Total costs
3,497
3,391
3%
4,047
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Corporate Release No 720/2022
Administrative expenses increased 12% to DKK
236 million, corresponding to 5.4% of total revenue.
SG&A costs were DKK 1,671 million compared to
DKK 1,528 million in 2021. The SG&A ratio was
38.2%, compared to 35.8% in 2021 as activities were
increased with the lifting of pandemic restrictions.
Research & development costs were DKK 981
million in the quarter with an R&D ratio of 22.4%.
Compared to 2021, the R&D costs increased 7%.
Total operational costs (OPEX) reached DKK 2,652
million compared to DKK 2,445 million in 2021.
Depreciation, amortization and impairment
losses
Depreciation, amortization and impairment losses,
which are included in the individual expense
categories, amounted to DKK 415 million in the first
quarter of 2022 compared to DKK 470 million in 2021.
Amortization of product rights was DKK 309 million
compared to DKK 371 million in 2021.
Depreciation, amortization and impairment losses
DKK million
Q1 2022
Q1 2021
Growth
Q4 2021
Cost of sales
368
418
(12%)
374
Sales and distribution cost
23
23
-
24
Administrative expenses
4
5
(20%)
7
Research & development costs
20
24
(17%)
29
Total depreciation, amortization
and impairment charges
415
470
(12%)
434
Profit from operations (EBIT and core EBIT)
Reported EBIT declined by 1% thereby reaching DKK
875 million. The EBIT margin reached 20.0%
compared to 20.6% in 2021. Core EBIT declined by
6% to DKK 1,184 million compared to 2021 and Core
EBIT margin was 27.1%. This development should
be seen in the light of the expected increased activity
level following the waning COVID-19 restrictions.
For definitions of the measures “Core Revenue”,
“Core EBIT”, “Core EBIT margin” and “Core EPS”,
see note 4 Core reporting.
Net financials, expenses
Lundbeck generated a net financial expense of DKK
347 million in the first quarter of 2022, compared to a
net financial expense of DKK 85 million in 2021.
The expenses are primarily derived from the fair
value adjustments on contingent consideration for the
European Medicines Agency’s (EMA) approval of
Vyepti amounting to DKK 319 million, along with
interest costs on the debt portfolio (including interest
rate swaps), and banking costs.
Tax
The effective tax rate for the first quarter of 2022 is
22.0%. The tax rate is negatively impacted by the
non-deductible CVR payment regarding Vyepti EMA
approval but offset by the Danish research &
development incentive.
Profit and EPS
Profits reached DKK 412 million for the first quarter
of 2022 compared to DKK 621 million in 2021, as a
consequence of increased activity level. The reported
net profit corresponded to an EPS of DKK 2.07
versus an EPS of DKK 3.13 in 2021. Core EPS
reached DKK 4.67 in the first quarter of 2022,
compared to a Core EPS of DKK 4.65 in 2021.
QUARTERLY RELEASE FOR THE PERIOD JANUARY 1 TO MARCH 31, 2022 Page 13
Corporate Release No 720/2022
Cash flows
Cash flows from operating activities amounted to
an outflow of DKK 205 million in the first quarter of
2022 compared to an inflow DKK 108 million in 2021.
The development compared to 2021 primarily relates
to the realized financial expense in connection with
the payment of the contingent consideration for the
EMA approval of Vyepti. The EMA approval of Vyepti
triggered a payment to former Alder shareholders of
USD 2/share. This resulted in a payment of DKK
1,566 million, consisting of DKK 490 million in
operating activities and DKK 1,076 million in investing
activities.
Lundbeck’s net cash flows from investing
activities were an outflow of DKK 1,163 million in the
first quarter of 2022 compared to an outflow of DKK
84 million in first quarter of 2021. In 2022, the cash
flow was driven by payment of contingent
consideration related to the EMA approval of Vyepti.
The cash flows from financing activities were an
inflow of DKK 669 million in the first quarter of 2022
compared to an outflow of DKK 2,303 million in 2021.
The cash inflow mainly related to the drawing on the
RCF needed for the payment triggered by the EMA
approval of Vyepti.
In the first quarter of 2022, the net cash outflow
reached DKK 699 million compared to an outflow of
DKK 2,279 million in 2021 which included repayment
of DKK 2.0 billion loan. The net cash flow in 2022 is
impacted by the EMA approval of Vyepti and the
dividend payout of DKK 397 million which was
approved at the Annual General Meeting in March
2022.
Net debt has increased from DKK 4,711 million at the
end of first quarter 2021 to DKK 5,003 million the
same period in 2022. Interest bearing debt was
DKK 6,617 million at the end of the first quarter of
2022 compared to DKK 6,372 million at the end of the
first quarter of 2021.
Selected cash flow figures
DKK million
Q1 2022
Q1 2021
Q4 2021
Profit from operations (EBIT)
875
882
6
Cash flows from operating activities
(205)
108
424
Cash flows from investing activities
(1,163)
(84)
(319)
Cash flows from operating and investing
activities (free cash flow)
(1,368)
24
105
Cash flows from financing activities
669
(2,303)
(341)
Net cash flow for the period
(699)
(2,279)
(236)
Financial position
At 31 March 2022, Lundbeck’s total assets
amounted to DKK 35,071 million compared to DKK
34,653 million at the end of 2021.
At 31 March 2022, Lundbeck's equity amounted to
DKK 18,446 million, corresponding to an equity ratio
of 52.6% compared to 52.7% at the end of 2021.
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Corporate Release No 720/2022
Lundbeck's development portfolio
Lundbeck is developing several new and promising
medicines for the treatment of brain diseases.
Pipeline developments are summarized below.
1) CGRP: Calcitonin gene-related peptide. 2) Three phase III clinical trials, supporting registration in Asia, including China and Japan: SUNLIGHT, SUNRISE, and SUNSET
trials. 3) PACAP: Pituitary adenylate cyclase activating peptide. 4) Acts as a partial agonist at 5-HT
1A
and dopamine D
2
receptors at similar potency, and an antagonist at 5-
HT
2A
and noradrenaline alpha
1B/2C
receptors. 5) Pivotal phase I study finalized; In mid-2022, Lundbeck and Otsuka Pharmaceutical are planning to submit the aripiprazole 2-
month injectable formulation to the European Medicines Agency (EMA) for marketing authorization application (MAA) review and to submit the NDA for review by the U.S.
FDA. 6) Monoacylglycerol lipase inhibitor (“MAGlipase”). 7) Spasticity in participants with Multiple Sclerosis.
Hormonal / neuropeptide signaling:
Eptinezumab - development and regulatory
status
Eptinezumab is a monoclonal antibody (mAb) that
binds to calcitonin gene-related peptide (CGRP), a
neuropeptide believed to play a key role in mediating
and initiating migraines, with high specificity and
potency. Eptinezumab is administered as a 30-
minute intravenous (IV) infusion every three months,
providing immediate and complete bioavailability.
In February 2020, Vyepti (eptinezumab-jjmr) was
approved by the U.S. Food and Drug Administration
(FDA) as the first FDA-approved IV treatment for the
treatment of migraine in adults. In January 2022,
Lundbeck announced that the European Commission
has granted marketing authorization for Vyepti in the
European Union (EU) for the prophylactic treatment
of migraine in adults who have at least four migraine
days per month. The approval follows the positive
opinion on November 11, 2021, from the European
Medicines Agency’s (EMA) Committee for Medicinal
Products for Human Use (CHMP). The EU marketing
authorization is valid in all EU Member States,
Iceland, Norway, and Liechtenstein.
Furthermore, Vyepti has been approved in U.A.E.
(December 2020), in Canada (January 2021), in
Kuwait (May 2021), in Australia (June 2021), in
Singapore (September 2021), in Switzerland
(October 2021), in Israel (December 2021), in Great
Britain (January 2022), and in Brazil (February 2022).
Eptinezumab has been submitted for regulatory
review in 12 additional markets: Argentina, Chile,
Columbia, Indonesia, Hong Kong, Mexico,
Philippines, Russia, Saudi Arabia, South Africa,
Taiwan, and Thailand.
During 2021, Lundbeck initiated three phase III
clinical trials, supporting registration in Asia, including
China and Japan. The SUNLIGHT trial
(NCT04772742) evaluates the efficacy of
eptinezumab to prevent migraine and headache in
patients with the combined diagnosis of chronic
migraine and medication overuse headache. Patients
are randomly allocated to placebo or eptinezumab
Project
Area
Phase I
Phase II
Phase III
Filing/
Launch
Hormonal / neuropeptide signaling:
Eptinezumab (anti-CGRP)
1)
Migraine prevention
PROMISE 1 & 2
Migraine prevention (Asia)
2)
SUN-studies
Episodic cluster headache
ALLEVIATE
Chronic cluster headache
CHRONICLE
Lu AG09222 (anti-PACAP mAb)
3)
Migraine prevention
HOPE
Circuitry / neuronal biology:
Brexpiprazole
4)
Agitation in Alzheimer’s disease
PTSD
Aripiprazole 2-months injectable
Schizophrenia/bipolar I disorder
To be submitted mid-2022
Lu AG06466
5)
Focal epilepsy, MS spasticity
7)
, PTSD
Lu AF28996 (D
1
/D
2
agonist)
Parkinson’s disease
Protein aggregation, folding and clearance:
Lu AF82422 (anti-α-synuclein mAb)
Multiple system atrophy
AMULET
Lu AF87908 (anti-Tau mAb)
Tauopathies
Neuroinflammation / neuroimmunology:
Lu AG22151 (CD40L inhibitor)
Neurology
QUARTERLY RELEASE FOR THE PERIOD JANUARY 1 TO MARCH 31, 2022 Page 15
Corporate Release No 720/2022
100 mg given by IV infusion (n=182). The total study
duration is approximately 36 weeks and includes a
Screening Period (28-30 days), a Placebo-controlled
Period (12 weeks), an Open-Label Period (12
weeks), and a Safety Follow-up Period (8 weeks).
The SUNLIGHT study recently completed
recruitment. The SUNRISE trial (NCT04921384)
evaluates the efficacy of eptinezumab to prevent
migraine and headache in patients with chronic
migraine. Patients will be randomly allocated to
placebo or two treatment groups: eptinezumab 100
mg or 300 mg given by IV infusion (n=513). The total
study duration is either approximately 36 weeks,
including screening period and safety follow-up; or 24
weeks for patients in Japan that enter a separate
open label extension trial, the SUNSET trial
(NCT05064371). The SUNSET study will enroll
approximately 100 patients with a total study duration
of approximately 68 weeks.
In December 2020, Lundbeck initiated a phase III
clinical study investigating the efficacy of
eptinezumab in patients with episodic cluster
headache (ALLEVIATE). The study (NCT04688775)
is planned to recruit around 300 patients that will be
randomly assigned to receive treatment consisting of
two infusions of either eptinezumab or placebo in a
cross-over manner. The total duration of the study is
24 weeks, including a safety follow up period of 8
weeks. During 2021, Lundbeck further initiated a 1-
year safety and tolerability trial in participants with
chronic cluster headache (CHRONICLE). The study
(NCT05064397) is planned to recruit around 125
patients.
In March 2022, Lundbeck initiated an explorative,
randomized, pragmatic open label study to evaluate
the comparative effectiveness of eptinezumab
against other advanced preventive medications in a
real-world community setting in adult participants with
episodic or chronic migraine (EVEC, NCT05284019).
The objectives include exploring the comparative
effectiveness on patient reported outcomes. The
study is planned to enroll 200 patients.
Lu AG09222 – phase II
Lu AG09222 represents a potential new therapeutic
option for the treatment of migraine, which unlike the
recently available calcitonin gene-related peptide
(CGRP) migraine treatment drug class, targets
pituitary adenylate cyclase-activating polypeptide
(PACAP). PACAP and its receptors are broadly
expressed in the nervous system, including at sites
implicated in migraine pathophysiology. In pre-clinical
and clinical studies in healthy subjects, Lu AG09222
has shown to bind with high affinity to PACAP,
thereby preventing PACAP from activating its
receptors.
In 2021, Lundbeck completed a study confirming the
target engagement of Lu AG09222 with PACAP
(NCT04976309). In this study, the preventive effect
of Lu AG09222 on vasodilation induced by PACAP
was investigated and confirmed. Subsequently, in
November 2021, Lundbeck initiated the HOPE-study,
a randomized, double-blind, phase II, proof of
concept study to assess efficacy, safety, and
tolerability of Lu AG09222 as a treatment for the
prevention of migraine (NCT05133323). A total of 230
patients, recruited from specialist settings, will be
randomly allocated to one of three treatment groups:
high/low dose of Lu AG09222 or placebo. In parallel
with this, in 2021, Lundbeck initiated a multiple dose
safety, pharmacokinetic (PK) and pharmacodynamic
(PD) trial in subjects with allergic rhinitis
(NCT05126316) to explore effects of Lu AG09222 in
patients with elevated, circulating inflammatory
biomarkers. The study aims to enroll 36 participants
to receive AG09222 high dose, low dose, or placebo.
Circuitry / neuronal biology:
Brexpiprazole – phase III in Alzheimer’s agitation
In April 2021, Lundbeck and Otsuka Pharmaceutical
announced the decision to continue the recruitment
of patients in a third phase III clinical trial of
brexpiprazole in the treatment of agitation in patients
with dementia of the Alzheimer's type
(NCT03548584). The decision to continue the trial is
based on the results of an independent interim
analysis, supporting to progress the trial to the
planned full enrollment of 330 patients.
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Corporate Release No 720/2022
The study is designed to assess the safety,
tolerability and efficacy of brexpiprazole in the
treatment of patients with agitation in Alzheimer’s
dementia. The trial consists of a continuous 12-week
double-blind treatment period with a 30-day follow-
up. The trial population is planned to include 330
male and female patients, aged 55–90 years, with a
diagnosis of probable Alzheimer’s disease.
The continuation of the study enables Lundbeck and
Otsuka to further explore the efficacy of brexpiprazole
to address the high unmet medical need in patients
suffering from agitation in Alzheimer’s type dementia.
The study completed enrolment of all patients early
2022 and is on track for results readout mid-2022.
The primary outcome in the study is change in the
Cohen-Mansfield Agitation Inventory (CMAI) Total
score. The key secondary outcome measure is
change in the Clinical Global Impression – Severity of
Illness (CGI-S) score, as related to symptoms of
agitation.
Brexpiprazole – phase III in Post-Traumatic
Stress Disorder (PTSD)
PTSD is a psychiatric disorder that can develop as a
response to traumatic events, such as interpersonal
violence, combat, life-threatening accidents or
natural disasters. Core features of PTSD include a
variety of symptoms, such as re-experiencing
phenomena (i.e., flashbacks and nightmares),
avoidance behavior, numbing (i.e., amnesia,
anhedonia, withdrawal, negativism) and increased
arousal (i.e., insomnia, irritability, poor concentration,
hypervigilance). Psychiatric co-morbidities are
common, and PTSD sufferers can also present with
substance abuse, mood and other anxiety disorders,
impulsive and dangerous behavior, and self-harm.
Lundbeck and Otsuka Pharmaceutical reported
positive phase II data for the combination treatment
of brexpiprazole and sertraline for the treatment of
PTSD in November 2018. On basis of these data,
Lundbeck and Otsuka Pharmaceutical initiated two
pivotal phase III trials (NCT04124614; n=577 and
NCT04174170; n=733), investigating the use of
brexpiprazole in combination with sertraline in the
treatment of PTSD, subsequent to an End of Phase
II meeting with the U.S. FDA in May 2019. The
execution of those two ongoing studies is challenged
by the COVID-19 pandemic, primarily impacting
enrollment rates. Therefore, Lundbeck and Otsuka
Pharmaceutical have been seeking phase III program
advice from the U.S. FDA. At a Type C meeting, the
proposal for how to address the slow enrollment rates
was discussed with the FDA. Provided FDA accepts
the proposal, headline results are expected within the
next 12 months.
Aripiprazole – 2-Month Injectable (LAI)
formulation
Dosing every second month can add important
benefits in terms of convenience for the patients and
may increase treatment adherence as well as
minimizing risk of missing doses, and it may reduce
the potential need for medication monitoring by
healthcare professionals, family, and caregivers.
In July 2019, Lundbeck and Otsuka Pharmaceutical
initiated a pivotal phase Ib study (NCT04030143) to
determine the safety, tolerability, and
pharmacokinetics of multiple-dose administrations of
aripiprazole to adult participants with schizophrenia
or bipolar I disorder. The study was an open-label,
multiple-dose, randomized, parallel-arm, multicenter
study. In addition to assessment of safety and
tolerability, the objective was to establish the
similarity of aripiprazole concentrations on the last
day of the dosing interval and the exposure in the last
dosing interval following the final administration of
aripiprazole into the gluteal muscle site. The study
showed that the new 2-month formulation, while
being safe and tolerable, provided effective plasma
concentrations of aripiprazole for two months.
No further clinical studies are expected to be required
and as a next step the regulatory agencies in the U.S.
and the EU will be approached. Scale-up of
manufacturing capacity is progressing at Otsuka
Pharmaceuticals with regulatory submission gated on
completing build and validation of new manufacturing
capacity at Otsuka. The new 2-month formulation is
an innovative addition to the LAI franchise and has
patent protection until the early part of the next
decade.
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Corporate Release No 720/2022
Lundbeck and Otsuka Pharmaceutical are planning
to submit the aripiprazole 2-month injectable
formulation to the European Medicines Agency
(EMA) for marketing authorization application (MAA)
review by mid-2022. In addition, an NDA submission
for review by the U.S. FDA is planned for mid-2022.
Lu AG06466 – phase Ib
Lu AG06466 (formerly ABX1431) is an inhibitor of the
monoacylglycerol lipase (MAGL) and selective
modulator of the endocannabinoid system, and
thereby works to reduce excessive
neurotransmission and neuroinflammation that are
known pathophysiological hallmarks for a range of
psychiatric and neurological disorders. A phase Ib
study was initiated in September 2020 with the
purpose to investigate the effect of Lu AG06466 after
multiple doses in patients with PTSD
(NCT04597450). Additional phase Ib investigational
studies were initiated in multiple sclerosis spasticity
in September 2021 (NCT04990219) and in
treatment-resistant focal epilepsy in September 2021
(NCT05081518).
Lu AF28996 – phase I
Lu AF28996 is a small molecule with agonistic
properties towards D1 and D2 receptors. Continuous
D1 and D2 dopamine receptor stimulation may play
an important role in motor control of Parkinson’s
disease patients. A Phase Ib study was initiated in
February 2020 with the purpose to investigate the
safety and tolerability as well as pharmacokinetics of
Lu AF28996 in patients with Parkinson's disease
(NCT04291859).
Protein aggregation, folding and clearance:
Lu AF82422 – phase II
Lu AF82422 is a monoclonal antibody (mAb)
targeting the pathological form of the protein alpha-
synuclein that is believed to play a pivotal role in the
development and progression of multiple system
atrophy (MSA), Parkinson’s disease (PD), and other
neurodegenerative diseases, such as
synucleinopathies. By targeting pathological alpha-
synuclein with an antibody that will inhibit aggregation
and potentially clear pathological alpha-synuclein
from the brain, the project aims to demonstrate delay
of disease progression with a therapeutic effect on
disease burden and function. Lu AF82422 has been
demonstrated to be well-tolerated in a phase I single-
ascending dose study, which was completed in July
2021. A phase II study (AMULET) was initiated in
November 2021 (NCT05104476). The primary
objective of the study is to evaluate the efficacy of Lu
AF82422 versus placebo on disease progression in
patients with MSA. Orphan drug designation for MSA
was granted by EMA in April 2021.
Lu AF87908 – phase I
Lu AF87908 is a monoclonal antibody (mAb)
targeting the pathological form of the hyper-
phosphorylated tau protein, which is believed to play
a pivotal role in the development and progression of
Alzheimer’s disease and other tau-driven
neurodegenerative disorders (primary tauopathies).
Lu AF87908 binds to a specific tau epitope (pS396-
tau) which is a dominating phosphorylation site in
pathological tau. A phase I program on Lu AF87908
was initiated in September 2019 to investigate the
safety and tolerability as well as pharmacokinetics of
a single dose of Lu AF87908, in healthy subjects and
patients with Alzheimer's Disease (NCT04149860).
Trial execution has been delayed as accrual of
patients has been impacted by COVID-19.
Neuroinflammation / neuroimmunology:
In October 2021, Lundbeck acquired an exclusive
license to Lu AG22515 (formerly APB-A1) from
AprilBio Co. Ltd in South Korea. Lu AG22515 is a
high-affinity human mAb that blocks the
CD40L/CD40 pathway through direct neutralization
of CD40L, thereby affecting adaptive and innate
immune responses. Lu AG22515 holds strong
promise in the treatment of a wide range of
autoimmune-related CNS disorders and neurological
diseases with autoreactive T-cells, B-cells and
marked presence of autoantibodies and
inflammation. An Investigational New Drug (IND) has
been opened in the U.S., and a First in Human study
(NCT05136053) testing single ascending doses of Lu
AG22515 in healthy volunteers was initiated in March
2022.
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Corporate Release No 720/2022
Sustainability update
In the first quarter of 2022, the annual Employee
Satisfaction Survey (ESS) was carried out. Since
2019 and throughout the pandemic we have had an
impressive 94% response rate. Lundbeck continues
to be a top-in-class workplace with results well in the
top quartile across all parameters compared to
benchmark companies. We had a high score of 77 in
Satisfaction & Motivation, on a scale from 0-100 with
scores over 75 being ‘high’ and saw improvements in
scores on collaboration and the working environment.
Lundbeck has set a 2022 sustainability target within
business ethics to improve the score on the ESS
question: “I am confident in raising an ethical or
compliance concern”. The score remained high at
86.9 and increased slightly compared to 86.7 last
year. We also maintain a high score on inclusion of
84. We continue to address Diversity and Inclusion
(D&I) by working via several local and global D&I fora.
A digital training program on unconscious bias has
been completed in the first quarter by 90% of all
employees globally. The remaining employees will
complete the training in the second quarter of 2022,
due to a staggered launch plan.
Sustainability Key Performance Indicators
Category
Q1 2022
Q1 2021
Change (%)
Number of employees (FTE)
5,353
5,551
(3.6%)
Scope 1 GHGs (Tone CO
2-
e)
Scope 2 GHGs – market based (Tone CO
2-
e)
Scope 1+2 GHGs (Tone CO
2-
e)
5,618
1,317
6,935
6,458
1,982
8,440
(13%)
(34%)
(18%)
Energy consumption (MWh)
32,248
31,712
1.6%
Frequency of lost time accidents (Frequency)
7.6
7.9
(3.4%)
Work-related accidents with absence (Number)
7
7
0%
Compliance Hotline reports (Number)
16
9
N.A.
Due Diligence screenings of suppliers and third parties (Number)
22
34
(35%)
Note: See Lundbeck Sustainability Report 2021 for accounting principles and definitions. 2021 company car emission estimated based on annual emission. Compliance
Hotline accounting policy has been updated to include multiple reports involving the same issues and out-of-scope reports to reflect the total number of cases received. Not
comparable with Q1 2021.
Scope 1 and 2 emissions have decreased by 18%.
This is partly due to the Danish power purchase
agreement with renewable electricity supply to the
two Danish sites and partly due to a 22% reduction in
emissions from company cars. The reduction in
emissions from cars can be explained by improved
data quality, more efficient cars and a slight increase
in the number of electric vehicles with lower CO2e
emissions.
Energy consumption in the first quarter has
increased by 0.8%, primarily due to cold weather
conditions requiring more energy and the running of
a new air purification system (Regenerative Thermal
Oxidizer) at our site in Lumsås.
In the first quarter of 2022, the number of work-
related accidents with absence is seven, which
gives a frequency on 7.6 (target is 5.0). We do not
see any trends in the types of accidents. None of the
seven accidents are so-called high-consequence
work-related accidents with absence that results in an
injury from which the employee is not expected to
recover fully to pre-injury health status within six
months. Plans on decreasing the number of
accidents on all production sites have been agreed,
as well as global initiatives, and will be launched
during 2022.
QUARTERLY RELEASE FOR THE PERIOD JANUARY 1 TO MARCH 31, 2022 Page 19
Corporate Release No 720/2022
Sixteen (16) new Compliance Hotline cases were
reported. Note that compared to 2021, the accounting
policy has been updated to include multiple reports
involving the same issues and out-of-scope reports to
reflect the total number of cases received. A Due
Diligence assessment of 22 potential Third Parties
was conducted, which identified five potential cases
where one of more issues will be mitigated and
monitored if the collaboration agreement is executed.
General corporate matters
Pending legal proceedings and regulatory
Lundbeck is involved in a number of legal
proceedings, including patent disputes, the most
significant of which are described below. The
outcome of these proceedings is not expected to
have a material impact on the Group’s financial
position or cash flows beyond the amount already
provided for in the financial statements, or it is too
uncertain to make a reliable provision. Such
proceedings will, however, develop over time, and
new proceedings may occur 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 93.8 million (approximately DKK 700
million). 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 alleged violation of competition
law, often arise when decisions and fines issued by
the European Commission are upheld by the
European Court of Justice. Health authorities in the
UK and an umbrella organization of Dutch health
insurance companies have taken formal protective
steps against Lundbeck with the principal purpose of
preventing potential claims from being time-barred
under the applicable statutes of limitation. In
September 2021, the UK proceedings were
transferred from the High Court to the Competition
Appeal Tribunal at the request of the parties.
Lundbeck expects that the UK health authorities will
now pursue their alleged claims. Further, 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 is preparing
its defense and it may take several years before a
final conclusion is reached by the German courts.
Finally, in March and April 2022 Lundbeck received
letters from several of the regional health authorities
in Spain specifically stating that they are intended to
interrupt the statute of limitation. It is still uncertain
whether the health authorities in Spain will actively
pursue any claims. Lundbeck disagrees with all
claims and intends to defend itself against them.
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 raised.
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 51.7 million (DKK 242 million) in 2018.
In Lundbeck’s case against the last of the four generic
companies, Sandoz Pty Ltd, the Federal Court found
QUARTERLY RELEASE FOR THE PERIOD JANUARY 1 TO MARCH 31, 2022 Page 20
Corporate Release No 720/2022
that Sandoz Pty Ltd had infringed Lundbeck’s
escitalopram patent between 2009 and 2012 and
awarded Lundbeck AUD 26.3 million in damages.
Sandoz’ appeal of the decision was heard in May
2019 and the Full Federal Court has in August 2020
allowed Sandoz' appeal and decided that Sandoz is
not liable for damages. The High Court of Australia
has now allowed Lundbeck’s appeal and overturned
the Full Federal Court decision on all major issues.
The case will be sent back to the Federal Court for
recalculation of damages and Lundbeck’s appeal of
the Australian Patent Office’s decision to grant
Sandoz a license will be restarted.
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 U.S. FDA
seeking to obtain marketing approval for generic
versions of Trintellix in the U.S. Two opponents have
since withdrawn and Lundbeck has settled with eight
opponents. As communicated by Lundbeck in
company release no. 706 dated October 1, 2021, the
cases against the six remaining opponents (the
“ANDA Filers”) has been decided by the U.S. District
Court for the District of Delaware (the ‘Court’). The
Court found that Lundbeck’s patent protecting the
active ingredient in Trintellix, vortioxetine (U.S.
Patent No. 7,144,884) is valid. The active ingredient
patent expires on June 17, 2026, with an expected
six-month pediatric exclusivity period extending to
December 17, 2026. Assuming the ruling is confirmed
at appeal, final approval will not be granted to the
relevant ANDA Filers until after expiration of the
active ingredient 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 were infringed by the relevant ANDA Filers,
except that Lupin was found to infringe a patent
covering Lundbeck’s process for manufacturing
vortioxetine. Unless and until the Court’s ruling is
reversed on appeal, 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 the
company release no. 706. The Court’s decision has
been appealed by Lundbeck to the U.S. Court of
Appeals for the Federal Circuit. Lupin has appealed
with respect to the process patent and the ANDA
Filers have cross appealed with respect to the validity
of two of the seven other patents.
Together with Otsuka Pharmaceutical, Lundbeck has
instituted patent infringement proceedings against
several generic companies that have applied for
marketing authorization for generic versions of
Rexulti in the U.S. Lundbeck has strong confidence
in the Rexulti patents. The U.S. FDA cannot grant
marketing authorization in the U.S. to the generic
companies before the patents expire, unless the
generic companies receive decisions in their favor.
Trial is scheduled to begin on later in 2022. The
compound patent, including patent term extensions,
will expire in the U.S. on June 23, 2029. A patent for
the specific formulation used will expire September
12, 2032.
Lundbeck received a Civil Investigative Demand
(“CID”) from the U.S. Department of Justice (“DOJ”)
in March 2020. The CID seeks information regarding
the sales, marketing, and promotion of Trintellix.
Lundbeck is cooperating with the DOJ.
In the U.S., Lundbeck is involved in three product
liability lawsuits relating to Lexapro (alleging Lexapro
induces birth defects). The cases are in the
preliminary stages. Lexapro was marketed by Forest
Labs. in the U.S. Lundbeck will vigorously defend
against the claims raised.
Conference call
Today at 13.00 CET, Lundbeck will be hosting a
conference call for the financial community. You can
find dial-ins and a link for webcast online at
www.lundbeck.com under the Investor section.
QUARTERLY RELEASE FOR THE PERIOD JANUARY 1 TO MARCH 31, 2022 Page 21
Corporate Release No 720/2022
STATEMENT OF THE BOARD OF DIRECTORS AND THE
REGISTERED EXECUTIVE MANAGEMENT
Valby, May 11, 2022
Registered Executive Management
Deborah Dunsire
Lars Bang
Per Johan Luthman
Jacob Tolstrup
President and CEO
Executive Vice President,
Product Development & Supply
Executive Vice President,
Research & Development
Executive Vice President,
Commercial Operations
Board of Directors
Lars Søren Rasmussen
Lene Skole-Sørensen
Santiago Arroyo
Jeffrey Berkowitz
Chairman of the Board
Deputy Chairman of the Board
Lars Erik Holmqvist
Jeremy Max Levin
Ilse Dorothea Wenzel
Hossein Armandi
Dorte Clausen
Lasse Skibsbye
Camilla Gram Andersson
Employee representative
Employee representative
Employee representative
Employee representative
QUARTERLY RELEASE FOR THE PERIOD JANUARY 1 TO MARCH 31, 2022 Page 22
Corporate Release No 720/2022
CONDENSED FINANCIAL STATEMENTS
Statement of profit or loss
DKK million
Q1 2022
Q1 2021
FY 2021
Revenue
Cost of sales
Gross profit
Sales and distribution costs
Administrative expenses
Research and development costs
Profit from operations (EBIT)
Net financials, expenses
Profit before tax
Tax on profit for the period
Profit for the period
Earnings per share, basic (EPS) (DKK)
Earnings per share, diluted (DEPS) (DKK)
Statement of comprehensive income
DKK million
Q1 2022
Q1 2021
FY 2021
Profit for the period
Actuarial gains/losses
(1 )
Tax
Items that will not be reclassified subsequently to
profit or loss
(1 )
Exchange rate gains/losses on investments in foreign
subsidiaries
Exchange rate gains/losses on additions to net
investments in foreign subsidiaries
(8 )
(104 )
(157 )
Hedging of net investments in foreign subsidiaries
(26 )
(90 )
(127 )
Deferred exchange gains/losses, hedging
(143 )
(162 )
(340 )
Deferred fair value of interest rate swaps
Exchange gains/losses, hedging (transferred to the
hedged items)
(68 )
(53 )
Tax
Items that may be reclassified subsequently to
profit or loss
Other comprehensive income
Comprehensive income
QUARTERLY RELEASE FOR THE PERIOD JANUARY 1 TO MARCH 31, 2022 Page 23
Corporate Release No 720/2022
Condensed statement of financial position
DKK million
31.03.2022
31.03.2021
31.12.2021
Assets
Intangible assets
Property, plant and equipment
Other financial assets
Other receivables
Deferred tax assets
Non-current assets
Inventories
Receivables
Cash and bank balances
Current assets
Assets
Equity and liabilities
Share capital
Foreign currency translation reserve
Hedging reserve
(185 )
(81 )
(162 )
Retained earnings
Equity
Retirement benefit obligations
Deferred tax liabilities
Provisions
Bank debt and bond debt
Lease liabilities
Other payables
Non-current liabilities
Retirement benefit obligations
Provisions
Bank debt
Trade payables
Lease liabilities
Income taxes payable
Other payables
Current liabilities
Liabilities
Equity and liabilities
QUARTERLY RELEASE FOR THE PERIOD JANUARY 1 TO MARCH 31, 2022 Page 24
Corporate Release No 720/2022
Statement of changes in equity
DKK million
Share capital
Foreign
currency
translation
reserve
Hedging
reserve
Retained
earnings
Total equity
Equity at 1 January 2022
(162 )
Profit for the period
Other comprehensive income
(23 )
Comprehensive income
(23 )
Distributed dividends, gross
(398 )
(398 )
Dividends received, treasury shares
Buyback of treasury shares
(45 )
(45 )
Incentive programs
Tax on other transactions in equity
Other transactions
(434 )
(434 )
Equity at 31 March 2022
(185 )
DKK million
Share capital
Foreign
currency
translation
reserve
Hedging
reserve
Retained
earnings
Total equity
Equity at 1 January 2021
Profit for the period
Other comprehensive income
(176 )
Comprehensive income
(176 )
Distribution of dividends, gross
(498 )
(498 )
Dividends received, treasury shares
Buyback of treasury shares
(34 )
(34 )
Incentive programs
Tax on other transactions in equity
Other transactions
(473 )
(473 )
Equity at 31 March 2021
(81 )
QUARTERLY RELEASE FOR THE PERIOD JANUARY 1 TO MARCH 31, 2022 Page 25
Corporate Release No 720/2022
Condensed statement of cash flows
DKK million
Q1 2022
Q1 2021
FY 2021
Profit from operations (EBIT)
Adjustments for non-cash items
Change in working capital
(879 )
(915 )
(305 )
Cash flows from operations before financial receipts and
payments
Financial receipts and payments
(485 )
(4 )
(132 )
Cash flows from ordinary activities
(141 )
Income taxes paid
(64 )
(68 )
(449 )
Cash flows from operating activities
(205 )
Contingent consideration, payment from acquisitions of
business
(1,076 )
Purchase and sale of intangible assets and property, plant and
equipment
(87 )
(84 )
(610 )
Cash flows from investing activities
(1,163 )
(84 )
(610 )
Cash flows from operating and investing activities
(free cash flow)
(1,368 )
Proceeds from loans
Repayment of bank loans and borrowings
(98 )
(2,152 )
(3,123 )
Dividends paid in the financial year, net
(397 )
(497 )
(497 )
Other financing activities
(70 )
(54 )
(116 )
Cash flows from financing activities
(2,303 )
(3,336 )
Net cash flow for the period
(699 )
(2,279 )
(1,674 )
Cash and bank balances at beginning of period
Unrealized exchange gains/losses on cash and bank balances
Net cash flow for the period
(699 )
(2,279 )
(1,674 )
Cash and bank balances at end of period
Interest-bearing debt, cash, bank balances and securities,
net, is composed as follows:
Cash and bank balances
Interest-bearing debt
(6,617 )
(6,372 )
(5,468 )
Net cash/(net debt)
(5,003 )
(4,711 )
(3,189 )
QUARTERLY RELEASE FOR THE PERIOD JANUARY 1 TO MARCH 31, 2022 Page 26
Corporate Release No 720/2022
Statement of profit or loss – Core results reconciliation (Q1)
Q1 2022
DKK million
((except EPS in DKK)
Reported
result
Amortization
of product
rights
Impairment
and
inventory
valuation
Major
restructuring
Acquisition
and
integration
costs
Legal fees
and
settlements
Divestments
/ sales
milestones
Core result
Revenue
4,372
-
-
-
-
-
-
4,372
Cost of sales
845
(309)
-
-
-
-
536
Gross profit
3,527
309
-
-
-
-
-
3,836
Sales and distribution costs
1,435
-
-
-
-
-
-
1,435
Administrative expenses
236
-
-
-
-
-
-
236
Research and development costs
981
-
-
-
-
-
981
Profit from operations (EBIT)
875
309
-
-
-
-
-
1,184
Net financials, expenses
347
-
-
-
-
-
(278)
69
Profit before tax
528
309
-
-
-
-
278
1,115
Tax on profit for the period
116
71
-
-
-
187
Profit for the period
412
238
-
-
-
-
278
928
Earnings per share, basic (EPS)
2.07
1.20
-
-
-
-
1.40
4.67
Q1 2021
DKK million
((except EPS in DKK)
Reported
result
Amortization
of product
rights
Impairment
and
inventory
valuation
Major
restructuring
Acquisition
and
integration
costs
Legal fees
and
settlements
Divestments
/ sales
milestones
Core result
Revenue
4,273
-
-
-
-
-
-
4,273
Cost of sales
946
(371)
-
-
-
-
575
Gross profit
3,327
371
-
-
-
-
-
3,698
Sales and distribution costs
1,318
-
-
-
-
-
-
1,318
Administrative expenses
210
-
-
-
-
-
-
210
Research and development costs
917
-
-
-
-
-
-
917
Profit from operations (EBIT)
882
371
-
-
-
-
-
1,253
Net financials, expenses
85
-
-
-
-
-
-
85
Profit before tax
797
371
-
-
-
-
-
1,168
Tax on profit for the period
176
68
-
-
-
244
Profit for the period
621
303
-
-
-
-
-
924
Earnings per share, basic (EPS)
3.13
1.52
-
-
-
-
-
4.65
QUARTERLY RELEASE FOR THE PERIOD JANUARY 1 TO MARCH 31, 2022 Page 27
Corporate Release No 720/2022
Notes
Note 1: Accounting policies
The interim condensed consolidated financial statements for the three months ended March 31, 2022, have been
prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU and additional Danish
disclosure requirements for the interim reports of listed companies. The interim condensed consolidated financial
statements do not include all the information and disclosures required in the annual financial statements and should
be read in conjunction with the Group’s annual consolidated financial statements as at December 31, 2021,
published February 9, 2022. The accounting policies, judgements and significant estimates are consistent with those
applied in the Annual Report 2021.
A number of new amendments came into effect from January 1, 2022. None of the amendments have a material
impact on the accounting policies and/or on the condensed consolidated financial statements.
Lundbeck’s geographical structure was changed effective January 1, 2022. Following the change, the geographical
split of revenue has been subject to modifications. With the new geographical structure, Canada moved from North
America to International Markets and smaller entities were moved between International Markets and Europe. The
North America region has been renamed United States to better reflect its new composition. Comparative figures
for 2021 have been adjusted following the new geographical structure.
Note 2: Fair value measurement
Financial assets and financial liabilities measured or
disclosed at fair value
Level 1
Level 2
Level 3
(DKKm)
(DKKm)
(DKKm)
2022:
Financial assets
Other financial assets
1
20
-
34
Derivatives
1
-
83
-
Total
20
83
34
Financial liabilities
Contingent consideration
1
-
-
413
Derivatives
1
-
314
Bank debt²
-
2,244
-
Bond debt²
3,489
-
-
Total
3,489
2,558
413
2021:
Financial assets
Other financial assets
1
22
-
35
Derivatives
1
-
41
-
Total
22
41
35
Financial liabilities
Contingent consideration
1
-
-
1,623
Derivatives
1
-
243
-
Bank debt²
-
1,083
-
Bond debt²
3,755
-
-
Total
3,755
1,326
1,623
1) Measured at fair value. 2) Disclosed at fair value.
The fair value of securities is based on publicly quoted prices of the invested assets. The fair value of derivatives is
calculated by applying recognized measurement techniques, whereby assumptions are based on the market
conditions prevailing at the balance sheet date. The fair value of contingent consideration is calculated as the
discounted cash outflows (DCF method) from future milestone payments, taking probability of success into
consideration.
QUARTERLY RELEASE FOR THE PERIOD JANUARY 1 TO MARCH 31, 2022 Page 28
Corporate Release No 720/2022
During the first quarter of 2022, the Vyepti EMA approval triggered a payment of CVR to former Alder shareholders
(consequently changed to Lundbeck Seattle BioPharmaceuticals, Inc.). The CVR payment amounted to DKK 1,566
million.
The fair value adjustment of contingent consideration amounted to a net loss of DKK 319 million of which DKK 278
million relates to the update of the probability of success of milestone payments.
Total contingent consideration amounted to DKK 413 million at March 31, 2022 (DKK 1,623 million at December
31, 2021). Besides the CVR payment and fair value adjustment, the only change in contingent consideration is
exchange rate adjustments of DKK 37 million.
The carrying amount of other receivables, trade receivables, prepayments, other debt, trade payables and other
payables is believed to be equal to or close to fair value.
Note 3: EBITDA calculation
DKK million
Q1 2022
Q1 2021
FY 2021
EBIT
875
882
2,010
+ Depreciation, amortization and impairment losses
415
470
1,710
= EBITDA
1,290
1,352
3,720
Note 4: Core reporting
As a general rule, Lundbeck adjusts for amortization of product rights and for each non-recurring item that
Management deems exceptional, and which accumulates or is expected to accumulate to an amount exceeding a
DKK 100 million threshold. Lundbeck’s core reporting is a non-IFRS performance measurement. Lundbeck’s core
results, including core operating income (core EBIT) and core EPS, exclude:
Amortization of product rights
Impairment of intangible assets and property, plant and equipment as well as inventory valuation adjustment
Major restructuring costs
Acquisition and integration costs, including:
• Accounting adjustments relating to the consolidation of material acquisitions and disposals of associates,
products and businesses
• Costs associated with the integration of newly acquired companies
• Retention costs
• Transaction costs
Legal fees and settlements, including:
• Legal costs (external), charges (net of insurance recoveries) and expenses related to settlement of
litigations, government investigations and other disputes
• Income from settlements of litigations and other disputes
Divestments/milestones, including:
• Income/expenses from discontinued operations
QUARTERLY RELEASE FOR THE PERIOD JANUARY 1 TO MARCH 31, 2022 Page 29
Corporate Release No 720/2022
• Gains/losses on divestments of assets
• Received or expensed upfront sales and development milestones
• Adjustments in probability of success embedded in milestone calculations
The adjusted core result is taxed at the underlying corporate tax rate.
FINANCIAL CALENDAR 2022
17 August 2022: Financial statements for the first six months of 2022
9 November 2022: Financial statements for the first nine months of 2022
Lundbeck contacts
Investors:
Media:
Palle Holm Olesen
Thomas Mikkel Mortensen
Vice President, Investor Relations
Media Relations Lead
PALO@lundbeck.com
THMR@lundbeck.com
+45 30 83 24 26
+45 36 43 40 00
About Lundbeck
H. Lundbeck A/S (LUN.CO, LUN DC, HLUYY) is a global pharmaceutical company specialized in brain diseases.
For more than 70 years, we have been at the forefront of neuroscience research. We are tirelessly dedicated to
restoring brain health, so every person can be their best.
Too many people worldwide live with brain diseases – complex conditions often invisible to others that nonetheless
take a tremendous toll on individuals, families and societies. We are committed to fighting stigma and discrimination
against people living with brain diseases and advocating for broader social acceptance of people with brain health
conditions. Every day, we strive for improved treatment and a better life for people living with brain disease.
We have approximately 5,600 employees in more than 50 countries, and our products are available in more than
100 countries. Our research programs tackle some of the most complex challenges in neuroscience, and our
pipeline is focused on bringing forward transformative treatments for brain diseases for which there are few, if any
therapeutic options. We have research facilities in Denmark and the United States, and our production facilities are
located in Denmark, France, and Italy. Lundbeck generated revenue of DKK 16.3 billion in 2021 (EUR ~2.2 billion;
USD ~2.6 billion).
For additional information, we encourage you to visit our corporate site www.lundbeck.com and connect with us on
Instagram (h_lundbeck), Twitter at @Lundbeck and via LinkedIn.