Annual Report
2022
H. Lundbeck A/S
Ottiliavej 9
2500 Valby
Denmark
CVR no. 56759913
Jenna Humphries
Living with migraine
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Lundbeck Annual Report 2022
Management Review 2022 in Brief Our Business Governance Financial Statements
Our Business Model 3
Patient Perspective: A Bit of Understanding 4
2022 IN BRIEF
Financial Key Figures 6
Key Events 7
Sustainability Key Figures 8
Letter to Shareholders 9
OUR BUSINESS
Strategy Update 12
Performance Review and Outlook 2023 14
Science and Innovation 19
Markets and Products 24
Summary for the Group 2018-2022 27
GOVERNANCE
Corporate Governance 31
Sustainability 33
Business Ethics and Code of Conduct 35
Risk Management 37
Board of Directors 39
Executive Management 42
The Lundbeck Share 44
Consolidated Financial Statements 49
Financial Statements of the Parent
Company 90
Management Statement 101
Independent Auditor’s Reports 102
Also find our Sustainability Report,
Remuneration Report and Corporate
Governance Report on →
Lundbeck.com
Contents
MANAGEMENT REVIEW
FINANCIAL STATEMENTS
OTHER REPORTS
Cover
Jenna Humphries is an Australian national and has been
living with migraine since childhood. Read her story on
page 4.
Photography: Søren Svendsen, Sune Høegh, Chantal Mathieu,
and Patryk Chorny.
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Lundbeck Annual Report 2022
Management Review 2022 in Brief Our Business Governance Financial Statements
Our Business Model
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Lundbeck Annual Report 2022
Management Review 2022 in Brief Our Business Governance Financial Statements
We are tirelessly dedicated to restoring brain
health, so every person can be their best.
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Lundbeck Annual Report 2022
Management Review 2022 in Brief Our Business Governance Financial Statements
It happened when she was only seven years old,
an age that is usually remembered as carefree by
most adults in Australia. “I ended up in the
hospital and throwing up all over doctors,” Jenna
says, vividly remembering her first severe attack.
Throughout high school, she lived with migraine.
She had to push herself through it and take
painkillers almost daily.
“I JUST LIVED LIFE AS I COULD”
While the teenage years are usually exciting and
packed with social events, due to her migraine,
Jenna had to say no to most social activities - the
pain was just too draining. “Growing up, I’ve
always been in constant pain, so for me, there
was nothing different. I didn’t go out very often
because I was in too much pain, or I was
throwing up a lot. I just lived life as I could,” she
elaborates.
Despite symptoms ranging from severe
headaches to light sensitivity (photophobia) and
vomiting every 20 minutes, Jenna experienced a
lot of discrimination at school from teachers and
friends who did not understand.
“IT’S JUST A HEADACHE”
The most debilitating part of living with migraine
for Jenna was that she felt that people often did
not believe her. Eventually, Jenna decided to
stop asking for help because she felt there was
no point. “This was the attitude of most people
while I was growing up: ‘it’s just a headache’. No
one believed that you can be so young and get
migraine,” Jenna says.
“It’s hard for people to understand what I am
going through. No one believes that I can be in
so much pain and just still be going about my
day. I do it because I must, I don’t have a
choice,” she adds.
It’s hard for people to
understand what I am
going through. No one
believes that you can be
in so much pain.
A BIT OF UNDERSTANDING
Thanks to the right treatment that works for her,
Jenna is now able to travel and fully enjoy playing
with her two kids. Today, she very rarely
experiences severe attacks. Around once a
month, she experiences what she calls a small
migraine, which is not as bad as it used to be.
If there was one thing Jenna could change in
society to support people with migraines, it would
be a bit more understanding from others. “I just
want a bit of understanding and leniency. If I don’t
want to talk due to a bad headache, people
should not be offended by that.”
PATIENT PERSPECTIVE
A Bit of Understanding
We are sharing the voices
of people living with brain
diseases, because patients
are at the heart of all we do.
Read Jenna’s full story on
→ www.lundbeck.com
Jenna Humphries from Australia has been living with migraine since
childhood. This is her story about growing up with migraine and
finding her purpose in a life marked by pain.
Jenna Humphries with her husband
and two daughters.
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Lundbeck Annual Report 2022
Management Review 2022 in Brief Our Business Governance Financial Statements
2022 in Brief
IN THIS SECTION
06 Financial Key Figures
07 Key Events
08 Sustainability Key Figures
09 Letter to Shareholders
Jorge Botello
Director, People & Communication
Hyun Jin Song
Director, People & Communication
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Management Review 2022 in Brief Our Business Governance Financial Statements
Financial Key Figures
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Management Review 2022 in Brief Our Business Governance Financial Statements
2022 saw exceptional growth
of our strategic brands. We
also saw accelerated revenue
growth across our three
regions.
REVENUE FROM STRATEGIC BRANDS
DKKm
12,135
1,631 EURm 1,709 USDm
In aggregate, strategic brands grew 31%, representing 67%
of total revenue, which amounted to DKK 18,246 million in
2022.
OPERATING PROFIT BEFORE DEPRECIATION AND
AMORTIZATION (EBITDA)
DKKm
4,663
627 EURm 657 USDm
Following the solid growth in revenue and prudent cost spend,
EBITDA increased 25%. The EBITDA-margin increased
from 23% to 26%.
PROFIT FROM OPERATIONS (EBIT)
DKKm
2,852
383 EURm 402 USDm
EBIT grew 42% compared to 2021, and EBIT margin
reached 15.6%.
NET DEBT
DKKm
2,183
293 EURm 308 USDm
Net debt has decreased to DKK 2,183 million in 2022 from
DKK 3,189 million at year-end 2021.
12.135
9.287
8.086
7.057
2022 2021 2020 2019
4.663
3.720
4.783
4.823
2022 2021 2020 2019
2.852
2.010
1.990
3.153
2022 2021 2020 2019
2.183
3.189
4.106
6.566
2022 2021 2020 2019
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Key Events*
* The list of events is ordered chronologically
** Announced in January 2023
Lundbeck’s shareholders approved
a new share structure with A-shares
and B-shares to increase financial
capacity to fund future growth
opportunities.
Joerg Hornstein joined Lundbeck as
Chief Financial Officer and Head of
Corporate Functions.
Lundbeck reported positive study
results, assessing the efficacy of
vortioxetine in a head-to-head
comparison to desvenlafaxine in
patients suffering from Major
Depressive Disorder (MDD).
Lundbeck made strides in the field
of digital biomarkers via a
collaboration with French company
FeetMe focusing on the use of
sensor shoe soles that monitor
walking ability in people living with
Parkinson’s.
Lundbeck in China launched a new
digital Patient Care Solution
program. The program strives to
address the challenge of treatment
access and other major pain points
Chinese patients and healthcare
professionals face.
Lundbeck and Otsuka Pharmaceutical
Co., Ltd. (Otsuka) announced positive
results showing reduced agitation in
patients with Alzheimer’s dementia
treated with brexpiprazole.
Lundbeck announced that results
from a clinical study with
eptinezumab have been recognized
for their importance for the scientific
and medical community and
accepted for publication in the
prestigious journal Lancet
Neurology.
Otsuka and Lundbeck announced
that the European Medicines
Agency (EMA) has accepted the
Marketing Authorization Application
for aripiprazole as a 2-month,
ready-to-use, long-acting injectable.
Lundbeck conducted the largest
study ever to observe early-stage
multiple system atrophy (MSA).
Lundbeck celebrated Copenhagen
Pride with a local Pride Parade at
the Lundbeck Headquarters,
supporting employees’ and other
external stakeholders’ freedom to
be themselves.
Lundbeck announced that the
company has become a partner of the
EHDEN Consortium. Lundbeck now
joins the 11 public partners, and 12
industry partners, adding our
expertise, resources, and support.
Lundbeck signed a credit
agreement concerning the existing
EUR 1.5 billion revolving credit
facility to incorporate sustainability-
linked targets.
Lundbeck and Otsuka announced
U.S. Food and Drug Administration
(FDA) acceptance of New Drug
Application for aripiprazole 2-month,
ready-to-use, long-acting injectable
to treat schizophrenia and bipolar I
disorder in adults.
Vyepti
®
, Lundbeck’s treatment for
migraine, launched in a total of nine
markets in 2022, furthering
Lundbeck’s ambitious launch plan.
Lundbeck celebrated World Mental
Health Day across the globe, putting
a focus on the growing burden of
global mental health issues and the
importance of mental wellbeing for
all.
Lundbeck announced positive data
showing Trintellix
®
/Brintellix
®
significantly reduced depressive
symptoms and improved cognitive
performance in people living with
MDD and co-morbid dementia.
Lundbeck announced FDA
acceptance and priority review of a
supplemental New Drug Application
(sNDA) for brexpiprazole for the
treatment of agitation associated with
Alzheimer’s dementia**.
Lundbeck announced that Thomas
Gibbs will join Lundbeck as
Executive Vice President and Head
of Lundbeck in the U.S. by the end of
February 2023.**
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Management Review 2022 in Brief Our Business Governance Financial Statements
Sustainability Key Figures
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Management Review 2022 in Brief Our Business Governance Financial Statements
ACCESS TO BRAIN HEALTH
+8 million
Our portfolio of products reaches more than 8 million people
on a daily average*
BUSINESS ETHICS COMPLIANCE
98.6%
employees completed the annual e-learning
on the Code of Conduct
CLIMATE ACTION
▼29%
reduction in scope 1 & 2
carbon emissions vs. 2019
SBTi target baseline
▼3%
estimated decrease in
scope 3 carbon emissions
vs. 2019 SBTi target
baseline
CHEMICAL RECYCLING
65%
Recovery and reuse of the organic compounds used in
chemical production**
WOMEN IN MANAGEMENT
43.1%
Gender split for all people managers globally of 43.1%
women and 56.9% men
HEALTH & SAFETY
5.8
.
Frequency of lost time accidents per one million
working hours for all employees globally
* Estimated patient years, based on 2022 sales data for Lundbeck products, excluding
Otsuka partner products
** Targets are set annually based on expected production volume and mix
Read more in our Sustainability Report
65%
65%
68%
2022 2021 2020
43,1%
42,6%
42,4%
2022 2021 2020
5,8
6,5
5,5
2022 2021 2020
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Lundbeck Annual Report 2022
Management Review 2022 in Brief Our Business Governance Financial Statements
We continue to reorient our business to discover
and develop transformative medications for
indications in niche neurology and psychiatry
treated by specialists, and rare diseases in
neurology, so we can best deliver to patients.
Life-cycle management activities around our
strategic brands are also yielding results. We
are pleased that brexpiprazole (Rexulti
®
/Rxulti
®
)
has been accepted for priority review by the
FDA to treat agitation in Alzheimer’s dementia.
This is the first drug proven to address an
indication in a debilitating disease impacting
both patients and their caregivers.
We also submitted for approval the 2-month,
long-acting injectable formulation of aripiprazole
in the U.S., Canada, and Europe. This will better
support schizophrenia patients in adhering to
their treatment plans.
We are effectively
maximizing our existing
brands; they are
showing a steady pace
of growth across all
regions of the world
With the initiation of the HOPE study, we are
assessing efficacy, safety, and tolerability of
PACAP (pituitary adenylate cyclase-activating
polypeptide) inhibition, initially as a treatment for
the prevention of migraine. We believe this is
another promising pathway to addressing
migraine and other pain disorders, and we are
excited about the potential to help patients who
may require a new approach for migraine
prevention.
We have also initiated a phase II study for a
potential new treatment of the rapidly
progressive, neurodegenerative disease called
multiple system atrophy (MSA). We have high
expectations for this project, as it has the
potential to be the first disease-modifying
treatment to be approved for the treatment of
patients with MSA.
MAINTAINING A STEADY PACE OF
GROWTH
We are effectively maximizing our existing
brands; they are showing a steady pace of
growth across all regions of the world.
Our newest brand, Vyepti
®
(eptinezumab), is
increasing momentum in the U.S. and was
launched in nine additional countries in 2022
and is delivering relief to patients most impacted
by migraine. In China, we did hit a setback with
the SUNLIGHT study, which was conceived to
get faster track access for Vyepti
®
through
studying it in patients with migraine and
concurrent medication overuse headache
(MOH). The learnings from our first use of
eptinezumab in Chinese patients have been
incorporated into the pivotal pan-Asian
SUNRISE study, for which headline results are
expected in 2025. Vyepti
®
is both a new
category and modality for us, and we are proud
how the team has been able to pivot and apply
learnings as they move forward. We will
continue to invest behind the global launch of
Vyepti
®
as our first independent global launch.
Managing mental health is an issue at the
forefront of society which is garnering increased
attention. In line with this increased global focus,
we are seeing strong growth of our products that
help to manage depression and anxiety. Our
largest brand, Brintellix
®
/Trintellix
®
, marketed
together with our partner Takeda
Pharmaceutical Company Limited (Takeda),
continues to show accelerated growth
particularly in Japan and Europe. Our major
brands, Rexulti
®
and Abilify Maintena
®
,
partnered with Otsuka, have continued to grow
strongly in all the markets where they are
launched. We look forward to launching new
indications and formulations of these two brands
in 2023.
BUILDING A MORE ROBUST PIPELINE
Four years ago, we set out to rebuild our
pipeline and now we have a more robust mid-
stage pipeline, with two compounds having
moved into phase II in late 2021. Multiple
focused phase Ib studies are guiding the future
development of other promising compounds
within an interesting phase I portfolio.
Letter to Shareholders
In 2022, we stayed the course on our strategy to Expand and Invest to
Grow. We are learning and adapting as we forge ahead, enabling
greater impact across all that we do. Strong focus on execution of our
strategic brands resulted in significant revenue growth. Our newest
strategic brand, Vyepti
®
, continues to grow strongly, gaining
momentum due to its proven efficacy for patients.
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Our internal discovery work is focused around
four biological clusters that our therapies of the
future would address. We are rebuilding our
pipeline, adressing new biologies, with new
approaches and new technologies, while also
taking what we have built up over the years in
new directions.
More products across the portfolio are being
developed together with biomarkers, making the
path through to phase III less risky.
To accelerate our advancements in
neuroimmunology, we acquired a promising
CD40L inhibitor from AprilBio (Lu AG22515) in
2021. In early 2022, we achieved the first-in-
human dosing of Lu AG22515, our first program
of the neuroimmunology cluster to move into
clinical development. Lu AG22515 binds to
CD40L with rich opportunities to treat immune-
mediated central nervous system (CNS)
disorders.
RESILIENCE IN UNPRECEDENTED TIMES
We live in unprecedented times, where within a
few short years we have had to navigate our
business through a global pandemic, a war, and
high levels of inflation and other forms of global
uncertainty.
Ensuring that we remain agile, invest in our
pipeline and technology, and take the right
decisions to secure the long-term, sustainable
future of the business has been of the utmost
importance. In 2022, Lundbeck signed a credit
agreement concerning the existing EUR 1.5
billion revolving credit facility to incorporate
sustainability-linked targets.
This existing 4-year sustainability-linked loan
underscores Lundbeck's commitment to
environmental, social, and governance targets.
ENSURING FINANCIAL CAPACITY FOR
GROWTH
Earlier this year, the Lundbeck Foundation
proposed and worked together with Lundbeck to
initiate a split of the H. Lundbeck A/S share.
This facility gives us an additional tool in our
financial toolbox as we seek to expand our
options for growth and value creation, while at
the same time securing the long-term stability
ensured by the Lundbeck Foundation's majority
holding. The growth opportunities we seek to
include will build and strengthen our pipeline
and marketed product portfolio to the benefit of
all stakeholders.
Although there are currently no immediate plans
to use this facility, it does give us additional
capacity to invest down the line into the long-
term future of the business.
Every day we are
impressed how our
people strive for the
highest levels of
excellence across all
that they do
THANKS TO A STELLAR TEAM
We want to take this opportunity to thank
Lundbeck´s employees for their dedication and
hard work for patients. We have a great team
that is truly dedicated to restoring brain health,
so every person can be their best.
Every day we are impressed how our people
strive for the highest levels of excellence across
all that they do; Lundbeck is mid-sized and
ambitious, with a can-do spirit, finding the best
ways to ensure significant presence in all
matters related to furthering brain health, so
every person can be their best.
Deborah Dunsire
President and CEO
Lars Søren Rasmussen
Chair of the Board
Deborah Dunsire
President and CEO
Lars Rasmussen
Chair of the Board
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Our Business
IN THIS SECTION
12 Strategy Update
14 Performance Review and Outlook 2023
19 Science and Innovation
24 Markets and Products
27 Summary for the Group 2018-2022
José Luis Molinuevo
Vice President and Head of Experimental Medicine
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EXPAND & INVEST TO GROW:
OUR STRATEGY IN BRIEF
We have taken significant strides to expand our
operating space through the acquisitions of
Abide and Alder in 2019, which gave us the
platforms needed to expand our areas of focus
in neuroscience. With the 2020 launch
of Vyepti
®
in the U.S. and the global roll-out
which was initiated in 2021, we are establishing
a new frontier in migraine prevention for the
patients that need it the most and expanding our
presence into protein-based therapies.
Furthermore, we are continuously expanding
our existing portfolio of medicines into new
markets. The changes we made to how we
approach R&D enable us to de-risk our internal
pipeline compounds in early development.
We utilize an experimental medicine approach
to identify the effects of a drug in carefully
selected patient populations, to find the most
efficient clinical pathway powered by biomarkers
and study designs and advance the most
promising drug candidates into full
development.
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
our future.
We have made choices on where to accelerate
and enhance the use of digital solutions within
our operations and R&D. Also, we have taken
steps to fortify our winning culture with
increased agility, collaboration, diversity, and
inclusion.
These are just a few of the many actions that
are helping us deliver on the promise of our
strategy to yield sustainable, long-term
profitable growth.
CREATING VALUE THROUGH OUR
UNIQUE POSITION
Our goal continues to be providing innovative
treatments for patients that create value for
Lundbeck.
Achieving our fullest potential as a mid-size,
highly specialized pharmaceutical company
requires that we thoughtfully concentrate our
efforts where we can make the most difference
for patients.
While we maximize the great medicines and
brands that we already have, we simultaneously
focus on growing our pipeline with treatments
for brain diseases for which there are few, if
any, treatment options.
By focusing on niche and rare disease
neurology and psychiatry indications which are
treated by specialist physicians, we can best
take advantage of our size and strong
relationships with these healthcare providers to
deliver powerful solutions to challenging
diseases.
We currently promote medicines that, in some
countries, both primary care physicians and
specialists treat. We will continue to promote
these excellent medicines, working with our
partners to reach these larger numbers of
physicians.
Just as important to growing our pipeline and
selling our medicines is the manufacturing of our
medicines, whether internally or via external
contract manufacturing.
Strategy Update
Since launching our Expand and Invest to Grow strategy in 2019, we
continue to make strong progress, fueled by our purpose, to restore
brain health so every person can be their best.
Amanpreet Kaur Sekhon
Lead Consultant
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We have strong internal capabilities within small
and large molecules to support our R&D
pipeline, including monoclonal antibody design,
process and formulation development
capabilities, as well as end-to-end internal small
molecule manufacturing facilities.
Figure 1: Lundbeck’s strategic imperatives
Our three priorities across “Production,
Development & Supply” remain quality,
reliability, and cost. We have a robust track
record on all three parameters and ambitious
goals to continuously improve performance with
a strong focus on operational excellence and
sustainable sourcing.
We aim to build on what we have achieved and
capitalize further on the strong fundamentals
that are deeply ingrained in Lundbeck; our rich
heritage of developing and producing life-
changing treatments for patients, our deep
scientific knowledge in psychiatry and
neurology, and our patient-centric mindset.
We will focus on embracing new biologies and
technologies, adjusting and learning as we forge
ahead.
In the future, we will work with even more agility
and collaboration across geographies,
simplifying our processes and accelerating our
ability to test and learn for faster, higher-quality
decision making.
This will fully leverage our diverse talent,
knowledge, and skillsets so that we can pursue
solving some of the biggest brain disease
challenges with the greatest patient reward.
OUR LONG-TERM AMBITION
Over the past two years, we have made
strategic choices around where we put our
efforts across our entire business.
Besides providing innovative and life-changing
treatments for brain disease, we aim to be a
strong advocate in reducing stigma.
We believe in educating influential stakeholders
that there is no health without brain health, so
more people get access to the care they need.
Our long-term ambition is to be #1 in Brain
Health in the eyes of the patients we tirelessly
serve. We strive to learn and adapt, aiming high
to find ways to serve patients even better.
What does it mean to be #1
in Brain Health?
We aim high and strive for more in all that we
do. We aim to be the leader in brain health, in
the eyes of our patients. We know we are well
on our way when:
We have top quartile financial results in our
peer group. By focusing on our patients and
our products, top financial performance will
follow.
We have a premier neuroscience pipeline filled
with assets that will make a difference to our
patients.
We have an established and focused
commercial footprint around commercially
attractive patient segments in niche and rare
neurology and psychiatry, treated by
specialists.
We are best in class in terms of how we use
digital technologies to improve patient
outcomes.
We are a company leveraging diversity, where
top talents within neuroscience aspire to work.
We continue to deliver sustainable growth in
revenue and profitability.
And finally, we are on track to be carbon
neutral before 2050. Giving back to society is
equally as important as financial
performance.
The culmination of all this together is what will
make us #1 in Brain Health, serving the
people who need new medicines to help them
conquer brain diseases. It will take every brain
being fully “in the game” to achieve it. We
continue to prioritize and act, year by year to
stay on track.
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Overall, revenue and EBIT are in line with the
revised financial guidance provided on
November 8, 2022 as a result of solid product
sales and tailwinds from favorable foreign
exchange rates, mainly U.S. dollars (USD) and
Canadian dollars (CAD).
Revenue reached DKK 18,246 million in 2022
compared to DKK 16,299 million in 2021. EBIT
grew 42% compared to 2021 and reached DKK
2,852 million. EBIT margin reached 15.6%. Net
profit for the year ended at DKK 1,916 million
(DKK 1,318 million in 2021), corresponding to a
growth of 45%.
We continue to see strong growth in our
strategic brands which include Abilify Maintena
®
(schizophrenia), Brintellix
®
/Trintellix
®
(depression), Rexulti
®
/Rxulti
®
(depression/schizophrenia) and our newest
product, Vyepti
®
(prevention of migraine).
In 2022, we continued the global roll-out
program of Vyepti
®
.
In aggregate, strategic brands grew 20% in local
currencies, reaching DKK 12,135 million in 2022
or 67% of total revenue.
The newest product in the portfolio, Vyepti
®
,
launched in April 2020 in the U.S., has now
reached DKK 1,004 million in 2022 compared to
DKK 492 million in 2021. Vyepti
®
continues its
steady, upward growth trajectory, as it has
launched in nine markets in 2022 alone.
In 2019, Lundbeck set up commercial
operations in Japan to co-commercialize
Trintellix
®
together with Takeda. The product
continues to be very successful in Japan and
holds 9% market share after three years of
being on the market, making it one of the most
successful Brintellix
®
/Trintellix
®
launches to
date.
Lundbeck’s early-stage pipeline continued to
progress, but also saw data driven terminations.
The two projects that entered Proof of Concept
(phase II) testing at the end of 2021, Lu
AF82422 and Lu AG09222, are progressing well
with expected headline results within the next 12
months.
Additionally, the clinical program for
brexpiprazole provided very positive results from
the phase III trial in patients suffering from
agitation in Alzheimer’s dementia.
Our top priority continues to be to provide
innovative treatments that create value for
patients; value for Lundbeck will then ultimately
follow.
With the global launch of Vyepti
®
, we are in the
process of building a migraine and specialty
pain franchise and we continue the
transformation of our R&D organization to build
a pipeline around high unmet medical needs, in
specialist treated neuroscience indications.
Performance Review and
Outlook 2023
* Northera
®
lost exclusivity in February 2021 and from January 1, 2022 onward is reported together with Other pharmaceuticals
2022 saw exceptional growth of our strategic brands and accelerated
revenue growth across our three regions. We continue to make good
progress on our Expand and Invest to Grow strategy and revitalizing
our pipeline, with two projects entering clinical phase II trials.
TOTAL REVENUE 2022
DKKm
2022
2021
Growth
Growth
in local currencies
Brintellix
®
/Trintellix
®
4,277
3,526
21%
13%
Rexulti
®
/Rxulti
®
3,890
2,849
37%
21%
Abilify Maintena
®
2,964
2,420
22%
16%
Vyepti
®
1,004
492
104%
80%
Strategic brands
12,135
9,287
31%
20%
Cipralex
®
/Lexapro
®
2,360
2,346
1%
(2%)
Onfi
®
636
657
(3%)
(14%)
Sabril
®
426
505
(16%)
(25%)
Other pharmaceuticals*
3,000
3,104
(3%)
(9%)
Other revenue
277
347
(20%)
(22%)
Effects from hedging
(588)
53
-
-
Total revenue
18,246
16,299
12%
7%
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2022 product portfolio
Our strategic brands are:
• Abilify Maintena
®
(schizophrenia)
• Brintellix
®
/Trintellix
®
(depression)
• Rexulti
®
/Rxulti
®
(depression/schizophrenia)
• Vyepti
®
(migraine prevention)
Our product portfolio also includes:
• Azilect
®
(Parkinson’s disease)
• Cipralex
®
/Lexapro
®
(depression)
• Ebixa
®
(Alzheimer’s dementia)
• Northera
®
(symptomatic neurogenic
orthostatic hypotension)
• Onfi
®
(Lennox-Gastaut syndrome)
• Sabril
®
(epilepsy)
• Xenazine
®
(chorea associated with
Huntington’s disease)
• Other mature products
Read more on pages 25-26.
SALES PERFORMANCE
Revenue reached DKK 18,246 million in 2022
compared to DKK 16,299 million in 2021. The
strategic brands grew 20% in local currencies
(31% reported) and reached DKK 12,135 million
or 67% of total revenue.
Lundbeck’s geographical structure was changed
as of January 1, 2022. Following the change,
the geographical split of revenue has been
subject to modifications. With the new
geographical structure, Canada was moved to
International Markets and smaller markets were
moved between International Markets and
Europe. The United States (U.S.) is now
reported on a stand-alone basis.
U.S.
Revenue reached DKK 9,102 million in 2022
compared to DKK 7,481 million in 2021. The
strategic brands increased by 19% in local
currency (35% reported) and reached DKK
7,324 million or 80% of total revenue, compared
to 72% in 2021. The sales growth was primarily
driven by strong demand but also positively
impacted by the appreciation of the U.S. dollar.
U.S constituted 49% of total revenue (excluding
effects from hedging and Other revenue), which
is a small increase from last year.
Rexulti
®
is Lundbeck’s largest product in the
U.S. Lundbeck’s share of revenue reached DKK
3,645 million following a growth of 20% in local
currency (36% reported). Rexulti
®
has a stable
volume market share of 2.3% as of October
2022*. Patient data suggest that more than 3/4
of prescriptions are for MDD.
Trintellix
®
sales reached DKK 1,650 million in
revenue for Lundbeck representing a growth of
1% in local currency (15% reported). Prescribing
dynamics in the MDD market has changed
following the pandemic. This can be attributed to
several factors, including the continued
increased use of telehealth among psychiatrists,
lower impact on generics from the pandemic
compared to branded products, and medications
for adjunct MDD. The lower number of
prescriptions (NBRx) remains at a lower level for
the total market compared to pre-pandemic.
While Lundbeck and our partner Takeda have
optimized promotional efforts for Trintellix
®
over
recent years, we are actively addressing
changed prescribing patterns. The volume
market share is slightly down to 0.9% as of
November 2022.* The value market share of the
total anti-depressant market has increased from
24.2% in January 2021 to 30% as of October
2022.*
Financial Performance
* IQVIA
** Northera
®
lost exclusivity in February 2021 and from January 1, 2022 onward is reported together with Other pharmaceuticals
REVENUE – U.S.
DKKm
2022
2021
Growth
Growth
in local currencies
Rexulti
®
3,645
2,675
36%
20%
Trintellix
®
1,650
1,435
15%
1%
Abilify Maintena
®
1,047
812
29%
14%
Vyepti
®
982
489
101%
77%
Strategic brands
7,324
5,411
35%
19%
Sabril
®
636
657
(3%)
(14%)
Onfi
®
426
505
(16%)
(25%)
Other pharmaceuticals**
716
908
(21%)
(30%)
Total revenue
9,102
7,481
22%
7%
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Management Review 2022 in Brief Our Business Governance Financial Statements
Abilify Maintena
®
revenue reached DKK 1,047
million, representing Lundbeck’s share of total
net sales. Abilify Maintena
®
has a stable volume
market share of 23% as of October 2022.*
Vyepti
®
was approved by the FDA on February
21, 2020, for the preventive treatment of
migraine in adults. The product was made
available on April 6, 2020 and reached a
doubling of sales to DKK 982 million in 2022
compared to 2021. Vyepti
®
has around 5%
volume share of the migraine prevention market.
Sabril
®
revenue is stable and reached DKK 636
million and Onfi
®
revenue reached DKK 426
million.
In Other pharmaceuticals, Northera
®
sales
reached DKK 488 million for the year compared
to DKK 665 million for 2021 following the launch
of generic versions of droxidopa in February
2021.
INTERNATIONAL MARKETS
Revenue from International Markets reached
DKK 5,203 million in 2022. As of January 1,
2022, International Markets included Canada,
alongside all Lundbeck’s markets outside of
Europe and the U.S. The revenue growth of 6%
in local currencies (13% reported) was mainly
driven by Brintellix
®
and Abilify Maintena
®
in
China, Canada, Japan, Brazil, and Australia.
The strategic brands increased by 21% in local
currencies (30% reported) and reached DKK
2,066 million or 40% of sales.
International Markets constituted 28% of total
revenue (excluding effects from hedging and
Other revenue), which is an increase from last
year.
Brintellix
®
/Trintellix
®
is Lundbeck’s second
largest product in International Markets after
Cipralex
®
/ Lexapro
®
. Sales reached DKK 1,316
million in revenue or an increase of 21% in local
currencies (30% reported). Brintellix
®
realized
exceptional growth across several markets
including Brazil, Japan, China, and Canada, but
growth was also impacted by quarterly
fluctuations in shipments. 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 and value market share
of 7.5% and 10.1%, respectively as of October
2022.* In December 2021, Trintellix
®
had a
value share of 5.8%.
Abilify Maintena
®
reached DKK 535 million in
revenue representing a growth of 16% in local
currencies (25% reported). Sales are mainly
derived from Canada and Australia, where
Abilify Maintena
®
showed robust sales
performance despite pandemic-related
restrictions. In Australia, the volume share has
reached 31% and in Canada, it has reached
34% as of October 2022.* Countries such as
Saudi Arabia, the United Arab Emirates
(U.A.E.), and Kuwait also positively contributed.
Rexulti
®
reached DKK 204 million in sales and
grew by 27% in local currencies (38% reported).
In International Markets, the product has its
highest sales in Canada followed by Brazil and
Australia. In Canada, the volume share of
Rexulti
®
has increased to 3.7% as of October
2022, compared to 3.2% as of December 2021.*
In Australia, Rexulti
®
has maintained a market
share of around 2.3% in volume as of October
2022*. In Brazil, Rexulti
®
has a stable market
share of 1.8% compared to 1.6% as of
December 2021* and most of the product
growth in the region came from Brazil.
Vyepti
®
was launched in Australia, Canada and
Singapore in 2022. Sales reached DKK 11
million in 2022. Vyepti
®
was launched in the
U.A.E as the first market outside the U.S. in
2020 and has obtained a volume market share
among the other aCGRP’s and gepants of
13%.*
Cipralex
®
/Lexapro
®
continues to be Lundbeck’s
largest product in the region. The product
generated revenue of DKK 1,698 million
representing a growth of 2% (down 2% in local
currencies). Japan, China, South Korea, Brazil,
and Canada are the largest markets for
Cipralex
®
/Lexapro
®
in International Markets.
Other pharmaceuticals generated revenue of
DKK 1,439 million. Azilect
®
is promoted by
Lundbeck in some countries in Asia. Azilect
®
generated revenue of DKK 196 million,
compared to DKK 132 millon in 2021, while
Ebixa
®
generated revenue of DKK 439 million,
compared to DKK 381 million in 2021.
* IQVIA
REVENUE – INTERNATIONAL MARKETS
DKKm
2022
2021
Growth
Growth
in local currencies
Brintellix
®
/Trintellix
®
1,316
1,013
30%
21%
Abilify Maintena
®
535
427
25%
16%
Rexulti
®
/Rxulti
®
204
148
38%
27%
Vyepti
®
11
3
267%
233%
Strategic brands
2,066
1,591
30%
21%
Cipralex
®
/Lexapro
®
1,698
1,662
2%
(2%)
Other pharmaceuticals
1,439
1,344
7%
0%
Total revenue
5,203
4,597
13%
6%
17
Lundbeck Annual Report 2022
Management Review 2022 in Brief Our Business Governance Financial Statements
EUROPE
Revenue reached DKK 4,252 million in 2022
compared to DKK 3,821 million in 2021. In
general, Europe sees robust underlying demand
offset by a continuous negative average price
development and continued generic erosion on
the mature product portfolio. The strategic
brands increased by 20% in local currencies
and reached DKK 2,745 million or 65% of sales.
The largest markets in Europe are Spain, Italy,
France, Switzerland, and United Kingdom
(U.K.). Europe constituted 23% of total revenue
(excluding effects from hedging and Other
revenue), which is the same as last year.
Abilify Maintena
®
is Lundbeck’s largest product
in Europe. Sales uptake of Abilify Maintena
®
is
robust with revenue reaching DKK 1,382 million.
Abilify Maintena
®
is the second most prescribed
long-acting injectable treatment for patients with
schizophrenia in many markets. In markets such
as the U.K. and Finland, it is the most
prescribed product in the category. Spain, Italy,
and France are the largest European markets
for Abilify Maintena
®
.
Brintellix
®
/Trintellix
®
revenue grew 22% in
local currencies reaching DKK 1,311 million.
Brintellix
®
is Lundbeck’s second largest product
in Europe and realized solid growth across
many markets. Brintellix
®
has seen significant
market share gains across Europe, but
especially in markets such as Spain and Italy.
Rexulti
®
/Rxulti
®
revenue reached DKK 41
million following a growth of 50% in local
currencies compared to 2021. The product is
launched in 10 markets in Europe for the
treatment of schizophrenia and will be launched
in Ukraine and Hungary later in 2023.
Rexulti
®
/Rxulti
®
is co-promoted with Otsuka in
most markets in Europe.
Vyepti
®
was granted marketing authorization in
the European Union (E.U.) in January 2022.
Revenue reached DKK 11 million in 2022.
Vyepti
®
is now launched in Finland, Germany,
and Switzerland. Lundbeck plans to launch in
additional E.U. markets in 2023 and many more
markets onwards, following pricing and market
access discussions in each market.
EXPENSES AND PROFITS
In 2022, total costs increased by 8% to DKK
15,394 million compared to DKK 14,289 million
for 2021.
Cost of sales increased by 8% to DKK 3,951
million in 2022 and the gross margin was
78.3% compared to 77.6% for 2021. Part of cost
of sales relates to amortization of product rights
which was DKK 1,371 million compared to DKK
1,274 million for 2021. Amortizations have
increased due to appreciation of USD and
additional amortization of Vyepti
®
following the
European approval. The core gross margin
increased from 85.7% to 85.9%.
Sales and distribution costs were DKK 6,610
million in 2022, an increase of 12% compared to
2021, as the activity level in general is
increasing especially for Vyepti
®
launch
preparations and patient activation programs in
the U.S. Sales and distribution costs
corresponded to 36.2% of revenue in 2022,
compared to 36.1% for 2021.
Administrative expenses compared to 2021
increased by 16% to DKK 1,079 million,
corresponding to 5.9% of total revenue. The
increase is mainly a result of legal costs, cloud-
based software that is recognized directly in the
income statement, FX development and a
donation to The Red Cross communicated in the
financial report for the first half of 2022.
Research & development costs were DKK
3,754 million in 2022 with an R&D ratio of
20.6%. R&D costs are mainly impacted by the
completion of phase IV study on vortioxetine.
Total operational costs (OPEX) reached DKK
11,443 million in 2022 compared to DKK 10,641
million in 2021 corresponding to an increase of
8%.
Reported EBIT grew by 42% thereby reaching
DKK 2,852 million in 2022. The EBIT margin
reached 15.6% compared to 12.3% in 2021.
Core EBIT* increased by 18% to DKK 4,155
million compared to DKK 3,517 million in 2021
and Core EBIT margin was 22.8% compared to
21.8% in 2021.
Following the solid growth in revenue and
prudent cost spend, EBITDA increased 25%
thereby reaching DKK 4,663 million. EBITDA-
margin increased from 23% to 26%.
TAX
The effective tax rate for 2022 was 22.6%
compared to 16.6% for 2021.** The effective tax
rate has increased significantly compared to
2021, as 2021 was positively impacted by
recognition of tax credits not previously
recognized. The FY2022 tax rate is negatively
impacted by the non-deductible CVR payment
regarding Vyepti EMA approval but offset by the
Danish research and development incentive.
* For definition of the measure “Core EBIT” and “Core EBIT margin”, see pages 106-107 on Core Reconciliation
** Please find Lundbeck’s tax policy on https://www.lundbeck.com/content/dam/lundbeck-com/masters/global-
site/pdf/Lundbeck_Tax_Policy_2022.pdf
REVENUE – EUROPE
DKKm
2022
2021
Growth
Growth
in local currencies
Abilify Maintena
®
1,382
1,181
17%
17%
Brintellix
®
/Trintellix
®
1,311
1,078
22%
22%
Rexulti
®
/Rxulti
®
41
26
58%
50%
Vyepti
®
11
0
-
-
Strategic brands
2,745
2,285
20%
20%
Cipralex
®
662
684
(3%)
0%
Other pharmaceuticals
845
852
(1%)
0%
Total revenue
4,252
3,821
11%
12%
18
Lundbeck Annual Report 2022
Management Review 2022 in Brief Our Business Governance Financial Statements
PROFIT AND EPS
Profit for 2022 reached DKK 1,916 million
compared to DKK 1,318 million in 2021. The
reported net profit corresponded to an EPS of
DKK 1.93 versus an EPS of DKK 1.33 for 2021.
Core EPS was DKK 3.22 for 2022, compared to
a Core EPS of DKK 2.51 in 2021.
CASH FLOW
Cash flow from operating activities amounted
to an inflow of DKK 3,519 million in 2022
compared to an inflow of DKK 2,272 million in
2021. The development compared to 2021 is
impacted by higher EBITDA, offset by 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 the former Alder
BioPharmaceuticals’ shareholders of USD 2 per
share. This resulted in a payment of DKK 1,566
million, which is recognized with DKK 490
million in operating activities and DKK 1,076
million in investing activities.
Cash flow from investing activities was an
outflow of DKK 1,892 million in 2022 compared
to an outflow of DKK 610 million in 2021. In
2022, the cash flow was primarily driven by the
payment of contingent consideration related to
the EMA approval of Vyepti
®
.
Cash flow from financing activities was an
outflow of DKK 387 million in 2022 compared to
an outflow of DKK 3,336 million in 2021. The
main decrease in cash outflow related to the
drawing on the Revolving Credit Facility needed
for the payment triggered by the EMA approval
of Vyepti
®
.
The net cash inflow reached DKK 1,240 million
compared to a net outflow of DKK 1,674 million
in 2021, which included repayment of a DKK 2
billion loan. The net cash inflow in 2022 was
negatively 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.
DIVIDEND
The Board of Directors proposes a dividend of
30% of net profit for 2022 in line with our pay-
out policy of 30-60%. This corresponds to DKK
0.58 per share for both A- and B-shares or a
total of DKK 578 million. The dividend pay-out is
subject to approval at the Annual General
Meeting on March 21, 2023.
PRELIMINARY FINANCIAL
GUIDANCE 2023
For the financial guidance for 2023 and going
forward, Lundbeck will focus on revenue
performance and from first quarter 2023 and
onwards, Adjusted EBITDA, providing an
improved and more consistent assessment of
the underlying business performance.
In 2023, Lundbeck will continue the global roll-
out of Vyepti with approximately 15 launches.
Additionally, Lundbeck plans to launch
aripiprazole two-month ready-to-use (2M RTU)
and brexpiprazole for significant unmet need for
patients with Alzheimer’s dementia manifesting
the severe symptom of agitation, pending
approvals later in 2023.
The financial guidance for 2023 reflects the
investments needed in these important launches
driving significant future growth.
Lundbeck continues to expect strong growth for
its strategic brands despite continued pricing
pressure and loss of exclusivity (LoE) in some
geographies. Inflation will have a significantly
higher impact on 2023 than seen in 2022.
Further, a provision of approximately DKK 300
million for Vyepti inventory obsolescence is
reflected in the guidance for 2023.
Lundbeck carries foreign currency risk mainly in
USD, CNY and CAD. The financial guidance for
2023 is based on the exchange rates at the end
of November 2022. The financial guidance for
2023 is based on current hedging rates for the
main currencies, i.e. USD/DKK (7.02),
CNY/DKK (1.03) and CAD/DKK (5.26) and the
financial guidance for 2023 includes an
expected hedging loss of approximately DKK 75
million.
Based on our 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 350 million.
Current expectations for 2023 are summarized
below:
FINANCIAL GUIDANCE 2023
DKK
FY 2022 actual
FY 2023 guidance
Revenue
18,246 million
19.4–20.0 billion
EBITDA
4,663 million
4.8–5.2 billion
MID-TERM TARGETS
Lundbeck is in a period with limited impact from
major regional losses of exclusivity and
anticipates solid growth of its strategic brands.
We expect that in 2023 and 2024 there will be
targeted investments behind the potential
blockbuster opportunity for brexpiprazole for the
treatment of agitation associated with
Alzheimer’s dementia. Based on organic growth,
we expect revenue to show a mid-single digit
compound annual growth rate (CAGR) over the
mid-term period (3-4 years).
At the same time, we remain focused on driving
efficiencies and being prudent in our spending.
Based on these assumptions, we target an
EBITDA-margin of 30-32% for the current
business, excluding any business development
activities by the end of the mid-term period.
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,
incl. 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.
19
Lundbeck Annual Report 2022
Management Review 2022 in Brief Our Business Governance Financial Statements
Being dedicated to brain health, we have the
heritage, expertise, and passion to translate
forefront science into transformative treatment
outcomes for patients. There are huge
opportunities to make a difference; the unmet
patient needs are enormous, and the number of
affected people is rising, while the scientific
progress in the area opens up for new
possibilities to develop impactful treatments.
EXECUTING THE R&D STRATEGY
The unmet medical needs of the patients we
serve, guide everything we do in R&D, spanning
from early research to support of marketed
products.
In 2022, Lundbeck continued to advance the
R&D strategy to be premier in neuroscience. By
nurturing a dedicated, flexible, and diverse
working environment, maintaining focus on
programs with a strong biological rationale,
integrating patient insights in everything we do,
and building strong external collaborations, we
are successfully progressing our pipeline.
In January 2022, Vyepti
®
(eptinezumab) was
approved by the E.U. Commission for the
preventive treatment of migraine in adults.
During the year we continued registering and
launching Vyepti
®
in markets across the world
and we will continue our ambitious launch plan
during 2023.
In June 2022, Lundbeck, in partnership with
Otsuka, announced positive results showing
reduced agitation in patients with Alzheimer’s
dementia treated with brexpiprazole in a phase
III study (NCT03548584).
Agitation is a very prevalent clinical
manifestation in Alzheimer’s dementia and one
of the most complex and stressful aspects of
care in patients affected by dementia. It is
associated with greater caregiver burden, earlier
nursing home placement, increased morbidity
and mortality, and a substantial economic
burden. Currently, there are no FDA-approved
pharmacological treatments for agitation
associated with Alzheimer’s dementia.
In July 2022, the primary and key secondary
results on Vyepti
®
(eptinezumab) from the
DELIVER study (NCT04418765) in patients with
chronic or episodic migraine and prior
preventive treatment failures was published in
the high-impact medical journal Lancet
Neurology.
In September 2022, Lundbeck completed the
recruitment ahead of time for the Lu AF82422
phase II trial (AMULET) for potential new
treatment of MSA.
In October 2022, Lundbeck successfully
completed the Life Cycle Management program
for Brintellix
®
/Trintellix
®
with the MEMORY trial
(NCT04294654) showing reduced depressive
symptoms, improved cognitive performance,
and quality of life in MDD patients with mild to
moderate dementia.
DEVELOPMENT PORTFOLIO
We believe that what fuels innovative drug
discovery is a focus on the most promising
science. We want to be in touch with, and at the
leading edge of, where the neuroscience field is
headed in our understanding of the brain and
the pathophysiology that underpins brain health.
Through pursuit of novel targets within four
biological clusters upon which we are focused,
we are advancing truly innovative solutions to
areas of significant unmet need in brain
diseases.
The four biology clusters are:
1. Hormonal / neuropeptide signaling:
Targeting selected pathways of pain
signaling, stress, and other neurohormonal
responses.
2. Circuit / neuronal biology: Targeting
neurotransmission / synaptic dysfunction to
restore brain circuits and
reduceneurological, psychiatric, and pain
symptoms.
3. Neuroinflammation / neuroimmunology:
Targeting neuronal loss due to an
overactive immune system, relevant across
many niche and rare neurological disorders.
4. Protein aggregation, folding, and
clearance: Targeting neurodegenerative
proteinopathies involved in a range of
neurodegenerative conditions, e.g.,
Alzheimer’s dementia and Parkinson’s
disease as well as rare diseases
characterized by proteinopathy such as
MSA.
Science and Innovation
Over the past year, we have consistently demonstrated leadership in the
CNS space through our approach to science and innovation. It’s an
approach rooted in our commitment to persist in a complex space,
shaped by our agile mindset and defined by our bold ambition to
restore brain health.
20
Lundbeck Annual Report 2022
Management Review 2022 in Brief Our Business Governance Financial Statements
HORMONAL / NEUROPEPTIDE SIGNALING
Eptinezumab – development and regulatory
status
Eptinezumab is a monoclonal antibody (mAb)
that binds to the calcitonin gene-related peptide
(CGRP), a neuropeptide that play a key role
initiating and maintaining migraine.
Eptinezumab is administered as a quarterly 30-
minute intravenous (IV) infusion, providing
immediate and complete bioavailability.
In February 2020, Vyepti
®
was approved by the
FDA as the first FDA-approved IV treatment for
prevention of migraine in adults. Eptinezumab
has subsequently been approved by around 45
regulatory authorities, including the E.U., and is
currently under regulatory review in additional
countries.
To enable expansion into Asia, the SUN-trials
(NCT04921384, NCT05064371) are ongoing. A
small, spearheading trial, SUNLIGHT
(NCT04772742), conceived as a potential
accelerated path for migraine patients with MOH
in China, did not achieve statistically significant
separation from placebo, although numerical
differences were seen favoring eptinezumab.
Based on these results, we increased the
sample size in the SUNRISE trial
(NCT04921384).
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 been 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) with headline results planned
for mid-year 2023. A total of 230 patients,
recruited from specialist settings, have been
randomly allocated to one of three treatment
groups: high/low dose of Lu AG09222 or
placebo. This study has completed enrollment.
Recently, Lundbeck completed a multi-dose
study conducted in allergic rhinitis subjects
(NCT05126316) demonstrating dose-
proportionality following sub-cutaneous
administration of Lu AG09222 and further
validating its good safety and tolerability profile.
Also, exploratory readout of pharmacodynamic
(PD) allergic responses was obtained guiding
the compound’s further development.
Lu AC13909 – phase I
Lu AG13909 is a novel approach to target
neuro-hormonal dysfunctions of the
hypothalamic–pituitary–adrenal (HPA) axis
caused by elevated levels of adrenocorticotropic
hormone (ACTH) produced in the pituitary
gland. Lu AG13909 is a humanized anti-ACTH
IgG1 monoclonal antibody that neutralizes
ACTH-induced signaling in the adrenal glands
by blocking ACTH binding to the melanocortin 2
receptor (MC2R).
A phase I first in human trial (NCT05669950)
has been initiated December 2022 in patients
with Congenital Adrenal Hyperplasia (CAH),
which encompasses a group of autosomal
recessive rare disorders affecting 1 out of 10-
20,000 live births. The phase I trial aims at
establishing the safety and efficacy profile of Lu
AG13909 after single and multiple doses.
CIRCUITRY / NEURONAL BIOLOGY
Brexpiprazole – phase III
in Alzheimer’s agitation
In June 2022, Lundbeck and Otsuka reported
positive results showing reduced agitation in
patients with Alzheimer’s dementia treated with
brexpiprazole (NCT03548584). In the study, the
improvements from baseline on the primary
endpoint of Cohen-Mansfield Agitation Inventory
(CMAI) for patients receiving brexpiprazole or 2
mg/day or 3 mg/day were statistically greater
than for those receiving placebo (p=0.0026).
This result was supported by a statistically
superior improvement on the key secondary
endpoint of CGI-S, as related to agitation
(p=0.0055).
Brexpiprazole was generally well tolerated, and
no new safety signals were observed. The only
Treatment Emergent Adverse Event (TEAE)
with more than 5% incidence in patients treated
with brexpiprazole was headache (6.6% vs.
6.9% for placebo). The following TEAEs
occurred at an incidence of at least 2% in the
brexpiprazole treatment group and greater than
that of placebo: somnolence, nasopharyngitis,
dizziness, diarrhea, urinary tract infection, and
asthenia.
Based on this outcome, Lundbeck and Otsuka
filed an sNDA to the FDA in the 4
th
quarter of
2022, which was accepted for priority review at
the beginning of January 2023. The sNDA
application includes the above-mentioned trial
as well as two earlier trials.
Plain language
summaries of clinical
trials
To support a broader understanding of
Lundbeck’s clinical research, and to make
our R&D efforts more accessible to patients
and carers, Lundbeck has started to create
plain language summaries of our clinical trial
results.
A plain language summary explains what
happened during a clinical trial in easy-to-
understand language. It includes information
about the purpose, results, and other facts
about the trial. These are made available to
all patients that participate in a Lundbeck-
sponsored clinical trial in the same language
as their signed Informed Consent Form. We
post our plain language summaries on
Lundbeck.com.
In Lundbeck, we are continuously increasing
our efforts to support our patient-centric
belief, including prioritizing initiatives that
take into consideration the patient
perspective in our trial designs.
21
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Brexpiprazole – phase III
in post-traumatic stress disorder (PTSD)
Lundbeck and Otsuka reported positive findings
for the combination treatment of brexpiprazole
and sertraline for the treatment of PTSD in
November 2018 from an exploratory 4 arm
phase II trial. Based on these data, Lundbeck
and Otsuka 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, after an End of Phase II meeting with the
FDA in May 2019. The execution of those two
ongoing studies was severely challenged by the
COVID-19 pandemic, primarily impacting
enrollment rates. After FDA feedback, it was
decided that the two trials will be concluded with
reduced sample size. HLR expected in the
second half of 2023.
Aripiprazole – 2-Month Injectable (LAI)
formulation
A long-acting injectable formulation ensures
substantially prolonged exposure to medication.
Through such a simplified treatment regimen,
many of the challenges with poor treatment
adherence may be reduced, resulting in a
potentially improved impact on patient
outcomes.
In July 2019, Lundbeck and Otsuka 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 using a new formulation aimed at
proloinging further the duration of aripiprazole
exposure at clinically effective concentrations.
The study was an open-label, multiple-dose,
randomized, parallel-arm, multicenter study.
In addition to the 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 a new 2-
month formulation provided effective plasma
concentrations of aripiprazole for two months,
while being safe and tolerable. The new 2-
month formulation is an innovative addition to
the long-acting injectable (LAI) franchise and
has patent protection until the early part of the
next decade.
Lundbeck and Otsuka have during 2022
submitted the Marketing Authorization
Application (MAA) for aripiprazole as a 2-month
ready-to-use (RTU) LAI for the maintenance
treatment of schizophrenia in adult patients
stabilized with aripiprazole to the EMA, as well
as to the FDA and Health Canada for the
treatment of schizophrenia and bipolar disorder.
Lu AG06466 – phase Ib
Lu AG06466 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). This exploratory
study using biomarkers and clinical outcome
measures will, together with previous studies
conducted in small phase Ib patient population,
guide decision making for future development of
Lu AG06466 and other molecules of the MAGL
inhibitor class that the company has in the
pipeline,
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 on Lu
AF28996 with the purpose to investigate the
safety and tolerability as well as
pharmacokinetics of Lu AF28996 in patients
with Parkinson's disease (NCT04291859).
NEUROINFLAMMATION /
NEUROIMMUNOLOGY
Lu AG22515 – phase I
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 recombinant bispecific fusion
protein that binds to albumin for longer half-life.
The CD40L inhibitor interferes with the
activation of the adaptive immune response by
blocking the CD40L/CD40 co-stimulatory
interaction on immune cells. Lu AG22515 holds
strong promise in the potential 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. A
First-in-Human study (NCT05136053) testing
single ascending doses of Lu AG22515 in
healthy volunteers was initiated in the U.S. in
March 2022.
Betina Wandel Frederiksen
Director, Quality Control
22
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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
MSA, Parkinson’s disease, and other
neurodegenerative disorders. 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. A phase II proof-of-concept
trial commenced in November 2021 to
investigate the safety and efficacy of Lu
AF82422 in MSA. Recruitment was completed
in November 2022. Orphan drug designation for
MSA was granted by the 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 dementia 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 commenced 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 dementia
(NCT04149860).
OTHER PROJECTS
Lundbeck’s long experience and continuous
work within diseases of the brain have provided
us with a strong global network in preclinical and
clinical neuroscience research. It is essential for
us to maintain our strong internal R&D
capabilities and to build external alliances to
supplement our internal capabilities, taking
advantage of the increased opportunities
provided by innovative technologies.
With the support from the world-renowned
Michael J. Fox Foundation, Lundbeck is
combining its biomarker discoveries with leading
microfluidic experts at the Danish Technical
University (DTU) to develop a state-of-the-art
biomarker assay for Parkinson's disease.
MOH is a headache that results from the
frequent use of acute medicines or painkillers.
Today, no specific diagnosis code exists for
MOH, which complicates identification of
patients suffering from MOH. Lundbeck has
developed a machine-learning algorithm to
identify patients with MOH, based on data from
electronic health records and insurance claims
data. Once validated, such an algorithm can
give us much better insight into health-related
information about patients with MOH such as
demographics, diagnoses, and medication use.
This will be important for possible future
development of treatment for patients with
MOH.
In 2022, Lundbeck became a partner of the
EHDEN Consortium. Lundbeck joined the 11
public partners, and 12 industry partners to add
our expertise, resources, and support in creating
an ecosystem for working with real-world data
across Europe.
In 2022, Lundbeck organized two ‘Let the
patient speak’ events, inviting patients and
caregivers to share their perspectives about
their disease and treatment experience,
ultimately helping Lundbeck to incorporate
insights into innovation and integrated evidence
generation efforts. The events focused on the
topic of patient engagement in clinical trial
design and execution as well as on input from
personal disease management and community
experiences, which in turn can help Lundbeck
improve our drug discovery efforts.
Commitment to diversity
in clinical trials
Lundbeck understands that brain diseases
wreak havoc without bias. Whether it be
genetics, age, race, sex, ethnicity,
socioeconomics, or access to healthcare,
understanding and fully evaluating the
multitude of factors that influence a person’s
health are key to both the development of
good medicine and equitable advances in
brain health. As part of our ongoing
commitment to sustain a diverse clinical trial
infrastructure, we have established the below
Clinical Trial Diversity Principles and
committed to tracking and monitoring progress
against them.
Develop and execute a clear strategy to
achieve diversity in our trials globally
We aim for each trial to be designed with
intention to ensure participants mirror the full
diversity of the patient population in the
country or region AND the disease we are
studying. This will require a concentrated effort
to involve underrepresented populations in our
marketed regions through focused patient-
inclusion criteria; attention to the diversity of
clinical trial sites and investigators; removal of
barriers that could impede the participation of
certain groups in clinical trials; and use of real-
world data to inform development efforts and
improve understanding of diseases and
products.
Collaborate with patient advocacy groups
choosing to make diversity a priority
Lundbeck has a longstanding focus on
community outreach, and we are committed to
expanding partnerships with organizations
that possess a like-minded focus on diversity.
In collaboration with external partners, we
strive to establish trust with diverse patient
and caregiver populations, gain deeper insight
into unmet patient needs, and build
awareness about open clinical trials to further
enhance the diversity of our clinical trials.
Implement integrated oversight approach
to inform, analyze, and act
We aim to continuously inform and reform our
internal thinking and processes by actively
monitoring clinical trial diversity targets and
utilizing real-world data to ensure we are
driving inclusion of underrepresented
populations in our clinical trials.
23
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Management Review 2022 in Brief Our Business Governance Financial Statements
Pipeline
Pipeline
PROJECT
BIOLOGY
AREA
PHASE I
PHASE II
PHASE III
FILING / LAUNCH
Eptinezumab (anti-CGRP mAb)
1
Hormonal /
neuropeptide
signaling
Migraine prevention
2
Eptinezumab (anti-CGRP mAb)
1
Cluster headache
Lu AG09222 (anti-PACAP mAb)
3
Migraine prevention
Lu AG13909 (anti-ACTH mAb)
4
Neurohormonal dysfunctions
Aripiprazole 2-month injectable formulation
5
Schizophrenia & bipolar I disorder
Brexpiprazole
6
Circuitry /
neuronal biology
Agitation in Alzheimer’s dementia
Brexpiprazole
6
PTSD
7
Lu AF28996 (D1/D2 agonist)
8
Parkinson’s disease
Lu AG06466 (MAGL inhibitor)
9
PTSD
7
Lu AF82422 (anti-α-synuclein mAb)
Protein aggregation,
folding and clearance
Synucleinopathies (MSA)
10
Lu AF87908 (anti-Tau mAb)
Tauopathies
Lu AG22515 (CD40L antagonist)
11
Neuroinflammation /
neuroimmunology
Neurology
1) CGRP: Calcitonin gene-related peptide
2) Three phase III clinical trials (SUNLIGHT, SUNRISE, and SUNSET) are related to the Asia registration activities
3) PACAP: Pituitary adenylate cyclase activating peptide
4) ACTH: Adrenocorticotropic hormone
5) Life cycle management in partnership with Otsuka
6) Acts as a partial agonist at 5-HT1A and dopamine D2 receptors at similar potency, and an antagonist at 5-HT2A and
noradrenaline alpha1B/2C receptors
7) Post-traumatic stress disorder
8) Dopamine receptor D1 and D2
9) MAGL: Monoacylglycerol lipase i (“MAGlipase”)
10) Multiple system atrophy
11) CD40L/serum-albumin bispecific antibody-fragment ((scFv)2-Fab)) based on AprilBio’s SAFA™ technology platform
24
Lundbeck Annual Report 2022
Management Review 2022 in Brief Our Business Governance Financial Statements
Markets
Markets
Lundbeck’s products are registered in
more than 100 countries and we have
employees in more than 50 countries.
Our largest markets are the U.S., China,
Canada, Spain, Italy, France, Japan,
Brazil, Australia, and South Korea.
* The figures above are excluding Other revenue of DKK 277 million and negative hedging effects of DKK 588 million
U.S.*
INTERNATIONAL MARKETS*
EUROPE*
REVENUE (DKKm)
9,102
REVENUE FROM STRATEGIC
BRANDS (DKKm)
7,324
SHARE OF GROUP REVENUE
49%
STRATEGIC BRANDS
Abilify Maintena
®
Brintellix
®
/Trintellix
®
Rexulti
®
/Rxulti
®
Vyepti
®
REVENUE (DKKm)
5,203
REVENUE FROM STRATEGIC
BRANDS (DKKm)
2,066
SHARE OF GROUP REVENUE
28%
STRATEGIC BRANDS
Abilify Maintena
®
Brintellix
®
/Trintellix
®
Rexulti
®
/Rxulti
®
Vyepti
®
REVENUE (DKKm)
4,252
REVENUE FROM
STRATEGIC BRANDS (DKKm)
2,745
SHARE OF GROUP REVENUE
23%
STRATEGIC BRANDS
Abilify Maintena
®
Brintellix
®
/Trintellix
®
Rexulti
®
/Rxulti
®
Vyepti
®
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Lundbeck Annual Report 2022
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Products
Products
STRATEGIC BRANDS
Abilify Maintena
®
(aripiprazole once-monthly)
Monthly intramuscular injection indicated for
the treatment of schizophrenia. Lundbeck
markets Abilify Maintena
®
in the U.S. in
collaboration with Otsuka and in Europe and
International Markets either alone or in
collaboration with Otsuka. Launched in the
U.S. in 2013, hereafter launched in close to
40 countries.
Brintellix
®
/Trintellix
®
(vortioxetine)
Indicated for the treatment of MDD. Lundbeck
markets Brintellix
®
/Trintellix
®
in Europe and
International Markets. In the U.S. and Japan,
Takeda is our co-promotion partner. Launched
in the first markets in 2014 and now available
in approximately 60 countries.
Rexulti®/Rxulti
®
(brexpiprazole)
Indicated for adjunctive therapy for the
treatment of adults with MDD and as a
treatment for adults with schizophrenia.
Launched in the U.S. in 2015 in collaboration
with Otsuka, hereafter in a number of other
countries.
Vyepti
®
(eptizumab)
Indicated for the preventive treatment of
migraine in adults. Lundbeck markets Vyepti
®
across all three regions in the U.S., E.U., and
International Markets. Launched in the U.S. at
the beginning of 2020, and now available in
12 countries across the world.
REVENUE (DKKm)
2,964
% OF TOTAL REVENUE
16%
REVENUE (DKKm)
4,277
% OF TOTAL REVENUE
23%
REVENUE (DKKm)
3,890
% OF TOTAL REVENUE
21%
REVENUE (DKKm)
1,004
% OF TOTAL REVENUE
6%
▲22%
▲21%
▲37%
▲104%
26
Lundbeck Annual Report 2022
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Products
MATURE BRANDS
Cipralex
®
/Lexapro
®
(escitalopram)
Indicated for the treatment of depression. First
launched in 2002 and today available in more
than 100 countries around the world.
Onfi
®
(clobazam)
Indicated as adjunctive treatment of
Lennox-Gastaut syndrome for people aged
two years or older. Launched in the U.S.
in 2012.
Sabril
®
(vigabatrin)
Indicated for the treatment of refractory
complex partial seizures (rCPS) and infantile
spasms (IS). Launched in the U.S. in 2009.
Other pharmaceuticals
Northera
®
(symptomatic neurogenic
orthostatic hypotension (nOH)), Ebixa
®
(dementia), Azilect
®
(Parkinson’s disease),
Xenazine
®
(chorea), Deanxit
®
(depression),
Cipramil
®
(depression and anxiety), and
Cisordinol
®
(psychosis) are among the biggest
of our other mature brands.
REVENUE (DKKm)
2,360
% OF TOTAL REVENUE
13%
REVENUE (DKKm)
426
% OF TOTAL REVENUE
2%
REVENUE (DKKm)
636
% OF TOTAL REVENUE
3%
REVENUE (DKKm)
3,000
% OF TOTAL REVENUE
16%
▲1%
▼16%
▼3%
▼3%
27
Lundbeck Annual Report 2022
Management Review 2022 in brief Our Business Governance Financial Statements
Summary for
the Group
2018-2022
Statement of profit or loss (DKKm)
2022
2021
2020
2019¹⁾
2018¹⁾
Revenue
18,246
16,299
17,672
17,036
18,117
Research and development costs
3,754
3,823
4,545
3,116
3,277
Operating profit before depreciation and amortization (EBITDA)
4,663
3,720
4,783
4,823
6,436
Profit from operations (EBIT)
2,852
2,010
1,990
3,153
4,846
Net financials, expenses
378
429
84
127
12
Profit before tax
2,474
1,581
1,906
3,026
4,834
Profit for the year
1,916
1,318
1,581
2,313
3,553
Assets (DKKm)
2022
2021
2020
2019¹⁾
2018¹⁾
Non-current assets
26,040
26,041
25,924
29,095
13,944
Inventories
4,046
3,031
2,163
2,204
1,753
Receivables
3,818
3,302
4,018
3,822
3,261
Cash, bank balances and securities²⁾
3,548
2,279
3,924
3,012
6,635
Total assets
37,452
34,653
36,029
38,133
25,593
Equity and liabilities (DKKm)
2022
2021
2020
2019¹⁾
2018¹⁾
Equity
20,779
18,279
16,973
16,782
16,833
Non-current liabilities
8,474
7,556
9,044
11,071
1,184
Current liabilities
8,199
8,818
10,012
10,280
7,576
Total equity and liabilities
37,452
34,653
36,029
38,133
25,593
Statement of cash flows (DKKm)
2022
2021
2020
2019
2018
Cash flows from operating activities
3,519
2,272
3,837
2,609
5,981
Cash flows from investing activities
(1,892)
(610)
(467)
(7,755)
(2,907)
Cash flows from operating and investing activities (free cash flow)
1,627
1,662
3,370
(5,146)
3,074
Cash flows from financing activities
(387)
(3,336)
(2,394)
4,548
(1,607)
Interest-bearing debt, cash, bank balances and securities, net, year-end
– net cash/(net debt)²⁾
(2,183)
(3,189)
(4,106)
(6,566)
6,635
1) 2018-2019 have been restated to reflect the reversal of an impairment loss on the Rexulti
®
product rights in 2017.
2) In 2020-2022, securities amounted to DKK 0 million.
28
Lundbeck Annual Report 2022
Management Review 2022 in brief Our Business Governance Financial Statements
Summary for
the Group
2018-2022
Continued
Key figures
2022
2021
2020
2019¹⁾
2018¹⁾
EBIT margin (%)
15.6
12.3
11.3
18.5
26.7
Research and development ratio (%)
20.6
23.5
25.7
18.3
18.1
Return on equity (%)
9.8
7.5
9.4
13.8
22.2
Equity ratio (%)
55.5
52.7
47.1
44.0
65.8
Invested capital (DKKm)
14,490
21,468
21,079
23,348
10,198
Net debt/EBITDA
0.5
0.9
0.9
1.4
(1.0)
Effective tax rate (%)
22.6
16.6
17.0
23.6
26.5
Purchase of intangible assets, gross (DKKm)
449
202
114
88
1,149
Purchase of property, plant and equipment, gross (DKKm)
371
410
364
356
300
Purchase of financial assets, gross (DKKm)
-
-
17
18
1,524
Average number of employees
5,399
5,488
5,717
5,475
5,060
Share data²⁾
2022
2021
2020
2019¹⁾
2018¹⁾
Number of shares for the calculation of EPS (millions)²⁾
992.9
993.3
993.7
993.5
993.4
Earnings per share, basic (EPS) (DKK)²⁾
1.93
1.33
1.59
2.33
3.58
Earnings per share, diluted (DEPS) (DKK)²⁾
1.93
1.33
1.59
2.33
3.58
Proposed dividend per share (DKK)²⁾
0.58
0.40
0.50
0.82
2.40
Cash flows from operating activities per share, diluted (DKK)²⁾
3.54
2.29
3.86
2.63
6.02
Net asset value per share, diluted (DKK)²⁾
20.93
18.40
17.08
16.89
16.95
Market capitalization (DKKm)
25,507
33,626
41,582
50,660
56,825
Price/Earnings, diluted (DKK)
25.87
25.47
26.25
21.86
15.97
Price/Cash flow, diluted (DKK)
14.09
14.76
10.82
19.38
9.48
Price/Net asset value, diluted (DKK)
2.39
1.84
2.44
3.01
3.37
1) 2018-2019 have been restated to reflect the reversal of an impairment loss on the Rexulti
®
product rights in 2017.
2) The calculation of EPS is based on a share denomination of DKK 1 as a result of the share split completed on 8 June 2022. Comparative figures have been restated to reflect the change
in trading unit from a nominal value of DKK 5 to DKK 1.
29
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Management Review 2022 in brief Our Business Governance Financial Statements
Summary for
the Group
2018-2022
Continued
Definitions
Interest-bearing debt
Debt and financial instruments (including financial leases) carrying interest.
Interest-bearing net cash
Cash, bank balances and securities less interest-bearing debt.
EBIT margin³⁾
Profit from operations as a percentage of revenue.
EBITDA
Profit before interest, tax, depreciation, amortization and gain on divestment of
properties.
Return on equity³⁾
Net profit/(loss) for the year as a percentage of shareholders' equity (average).
Equity ratio³⁾
Shareholders' equity, year-end, as a percentage of total assets.
Invested capital
Shareholders' equity, year-end, plus net interest-bearing debt.
Net debt
Interest-bearing debt less cash, bank balances and securities.
Net debt/EBITDA²⁾
Net interest-bearing debt divided by EBITDA.
Earnings per share, basic (EPS)²⁾ ³⁾
Net profit/(loss) for the year divided by average number of shares, excl. treasury
shares.
Earnings per share, diluted (DEPS)²⁾ ³⁾
Net profit/(loss) for the year divided by average number of shares, excl. treasury
shares, incl. warrants, fully diluted.
Cash flows from operating activities per share, diluted³⁾
Cash flows from operating activities divided by average number of shares, excl.
treasury shares, incl. warrants, fully diluted.
Net asset value per share, diluted
Shareholder's equity, year-end, divided by number of shares, year-end, excl. treasury
shares, incl. warrants, fully diluted.
Market capitalization³⁾
Total number of shares, year-end, multiplied by the official price quoted on Nasdaq
Copenhagen, year-end.
Price/Earnings, diluted³⁾
The official price quoted on Nasdaq Copenhagen, year-end, divided by earnings per
share, diluted.
Price/Cash flows, diluted³⁾
The official price quoted on Nasdaq Copenhagen, year-end, divided by cash flows
from operating activities per share, diluted.
Price/Net asset value, diluted
The official price quoted on Nasdaq Copenhagen, year-end, divided by net asset
value per share, diluted.
EBITDA calculation (DKKm)
2022
2021
2020
2019¹
2018¹
EBIT
2,852
2,010
1,990
3,153
4,846
+ Depreciation, amortization and impairment losses
1,811
1,710
2,793
1,670
1,638
- Gain on divestment of properties recognized in other operating expenses,
net
-
-
-
-
(48)
EBITDA
4,663
3,720
4,783
4,823
6,436
1) 2018-2019 have been restated to reflect the reversal of an impairment loss on the Rexulti
®
product rights in 2017.
2) The calculation of EPS is based on a share denomination of DKK 1 as a result of the share split completed on June 8, 2022. Comparative figures have been restated to reflect the change
in trading unit from a nominal value of DKK 5 to DKK 1.
3) Definitions according to the Danish Finance Society's Recommendations & Financial Ratios.
30
Lundbeck Annual Report 2022
Management Review 2022 in Brief Our Business Governance Financial Statements
Governance
IN THIS SECTION
31 Corporate Governance
33 Sustainability
35 Business Ethics and Code of Conduct
37 Risk Management
39 Board of Directors
42 Executive Management
44 The Lundbeck Share
Valerie Barogiannis
Senior Manager, Information Technology
31
Lundbeck Annual Report 2022
Management Review 2022 in Brief Our Business Governance Financial Statements
The supreme governing body of Lundbeck is the
general meeting, where the shareholders of
Lundbeck exercises their rights. Some matters
are always handled by the general meeting, i.e.,
adoption and amending of the company’s
Articles of Association, approval of the annual
report, and election of members of the Board of
Directors among other things.
Any shareholder has the right to raise questions
and suggestions at general meetings.
Resolutions can generally be passed by a
simple majority. However, resolutions to amend
the Articles of Association require two-thirds of
the votes cast and capital represented, unless
other adoption requirements are imposed by the
Danish Companies Act.
Lundbeck has a two-tier board structure
consisting of the Board of Directors and the
Executive Management. The two bodies are
separated, and no person serves as a member
of both.
The Board of Directors has eleven members, of
which seven are elected at the Annual General
Meeting for a one-year term and four are
elected by Lundbeck’s employees for a four-
year term. The current members of the Board of
Directors bring deep industry knowledge and
solid top management experience to Lundbeck,
which are essential for the Board to perform its
tasks.**
Lundbeck’s Board of Directors is responsible for
approving the corporate strategy and its
implementation, setting goals for Executive
Management, and for ensuring that members of
Executive Management and other senior
managers have the right qualifications.
The Board of Directors also evaluates
management performance and remuneration.
Furthermore, the Board of Directors has the
overall responsibility for ensuring that adequate
internal and external controls are in place, and
for identifying and addressing any relevant risks.
These responsibilities are defined in the Danish
Companies Act and stipulated in the rules of
procedures for the Board of Directors.
The Board of Directors regularly evaluates
Lundbeck’s strategy, business, performance,
financial strategies, and policies, and ensures
that day-to-day management is carried out in
accordance with such policies.
Following initial analysis and proposal from
Executive Management, the Board of Directors
assesses Lundbeck’s need for capital on an
ongoing basis, and regularly reviews
Lundbeck’s capital structure.
There is no universal answer to the question of
what the optimum capital structure is for a
specific company because the relationship
between equity and interest-bearing debt relies
on the specific characteristics that apply within
the particular industry in which the business
operates and, by extension, the operating and
financial risk.
However, companies in the pharmaceutical
industry are often particularly well-funded which
may be explained by the extended development
projects and risks associated with research
activities.
Our dividend policy is currently to pay out 30-60
% of the net profits as dividend to the
shareholders. The Board of Directors pursues
the policy that equity beyond the level which,
based on a conservative estimate, would be
considered sufficient to support the underlying
business should be distributed to the
shareholders. The distribution to our
shareholders takes place through annual
dividends and if appropriate share buyback
programs.
The Board of Directors has established a self-
evaluation procedure covering, among other
things, board composition, contribution and
results, Board agenda and discussions,
cooperation between the Board of Directors and
Executive Management, committee work, and
structure.
The 2022 Board evaluation was conducted by
an external vendor. This evaluation was an in-
depth assessment where the Board of Directors
and Executive Management answered a
questionnaire and were interviewed individually.
Corporate Governance
Corporate governance concerns the way Lundbeck is managed and
controlled, while creating value for both the company and its
stakeholders. More information on the mandatory annual Corporate
Governance report is disclosed on www.lundbeck.com* in accordance
with section 107(b) in the Danish Financial Statements Act.
* https://www.lundbeck.com/content/dam/lundbeck-com/masters/global-site/pdf/corporate-governance/2022/corporate_governance_report.pdf
** Detailed description of the Board members and their competencies and qualifications can be found on
https://www.lundbeck.com/global/about-us/our-leadership/board-of-directors
32
Lundbeck Annual Report 2022
Management Review 2022 in Brief Our Business Governance Financial Statements
Process description and the result showed an
increase to an already high level of satisfaction
with the collaboration and interaction between
the Board of Directors and Executive
Management. The collaboration was described
as transparent, constructive, effective, and
involving.
The survey also included an update of the
competencies on the Board of Directors. We
saw an increase of competencies and
knowledge relevant for the future strategic path
of Lundbeck, e.g., scientific knowledge and
experience, which is now at an even more
satisfactory level.
More details regarding the work performed by
the Board of Directors, the evaluation procedure
and results hereof can be found at
www.lundbeck.com.*
Also, the remuneration of Lundbeck’s Executive
Management and Board of Directors can be
found at www.lundbeck.com.**
DISCLOSURE REGARDING CHANGE
OF CONTROL
The E.U. Takeover Bids Directive, as partially
implemented in the Danish Financial Statements
Act, requires listed companies to disclose
information about significant agreements that
may be affected in case of a completed
takeover bid, in particular in relation to
disclosure of change-of-control provisions.
Lundbeck discloses that the Group has a major
partnership agreement in place under which an
acquiring entity must divest any competing
product according to an agreed process and,
in the absence of such divesture, Lundbeck’s
partner may terminate the agreement.
The Lundbeck Group may be met with demands
for repayment on its debt portfolio should
Lundbeckfond Invest A/S hold less than 50% of
the share capital or voting rights in H. Lundbeck
A/S (change of control).
In the event Lundbeck is acquired or merges,
certain Executive Management members may,
depending on the impact on their position, be
entitled to terminate employment with Lundbeck
with three (3) months’ notice and receive a
compensation of up to eighteen (18) months’
remuneration.
Given the ownership structure of Lundbeck the
risks are considered remote. For information
about the ownership structure of Lundbeck,
see pages 44-45.
* Detailed description of the Board of Directors’ work, evaluation procedure and results can be found on
https://www.lundbeck.com/global/about-us/corporate-governance/board-tasks
** Detailed description of the remuneration can be found on
https://www.lundbeck.com/global/about-us/corporate-governance/remuneration
Joanna Gluszczak
Finance Specialist
33
Lundbeck Annual Report 2022
Management Review 2022 in Brief Our Business Governance Financial Statements
OUR APPROACH TO SUSTAINABILITY
Sustainability is an imperative to Lundbeck and
an integral part of our strategy and culture.
Lundbeck’s sustainability activities aim to
mitigate risks and adverse impacts related to
our business activities and contribute to solving
societal challenges where we can. We remain
committed to the UN Global Compact Principles
and contribute to addressing seven of the
Sustainable Development Goals (SDGs).
OUR MOST MATERIAL SUSTAINABILITY
MATTERS
Our most material sustainability issues are
reflected in the SDGs that our business model
has very significant impact on. Our biggest
contribution to sustainable development is our
medical treatments and the good health and
wellbeing they bring to people. Closely related
to this is being compliant in all aspects of
product and patient safety as well as taking a
strict stance on anti-corruption in our
collaborations with business partners,
healthcare professionals, and regulators.
Our strategy includes taking a leading role in
climate action, environmental management in
general, and promoting an ethical, safe,
motivating, and inclusive culture in our value
chain.
In September, Lundbeck announced that we
have signed a credit agreement concerning our
existing EUR 1.5 billion revolving credit facility to
incorporate sustainability-linked targets.
By integrating environmental and social targets
into Lundbeck’s finance approach, sustainability
benefits our cost of finance and underscores our
commitment to our sustainability targets.
Lundbeck will direct realized interest savings
towards new sustainability-related initiatives
focused on increasing access to brain health
between 2022 and 2025.
GOVERNANCE AND MANAGEMENT OF
SUSTAINABILITY
Executive Management is the steering group for
Lundbeck's sustainability strategy. The CEO has
the highest responsibility for the sustainability
strategy and presents major decisions to the
Board of Directors when relevant.
All Executive Management members have
sustainability-related targets included in their
roles that they are assessed on by the
Renumeration and Nomination Committee.
A dedicated team in “Compliance, Legal, and
Sustainability” is responsible for improving,
monitoring, and reporting on Environmental,
Social, and Governance (ESG) and
sustainability performance in close collaboration
with relevant functions in the organization.
The approach taken is to integrate and
disseminate ownership of sustainability to the
relevant line functions.
CSRD READINESS
In June 2022, a Corporate Sustainability
Reporting Directive (CSRD) Readiness Working
Group under the CFO was established with a
core group from Compliance, Legal, and
Sustainability and Group Finance.
Simultaneously, the Audit Committee Charter
was updated to reflect that the Audit Committee
monitors processes related to sustainability
reporting and reviews changes in accounting
policies to determine the appropriateness of
changes in sustainability disclosure practices.
Starting in 2023, we will be updating our
sustainability strategy to align with the
disclosure and due diligence requirement set
out in the E.U. Directives related to corporate
sustainability conduct and reporting.
SUSTAINABILITY REVIEW OF 2022
We continuously set ambitious targets, report
progress on the targets and disclose a set of
externally reviewed non-financial indicators
across all areas of corporate sustainability and
business ethics compliance.
Sustainability
* https://www.lundbeck.com/content/dam/lundbeck-com/masters/global-site/pdf/Sustainability_Report_2022.pdf
Sustainability is an integral part of how we do business at Lundbeck.In
our annual Sustainability Report, you can find detailed information on
our impacts, risks, strategy, activities during the year, progress on our
targets, as well as metric and material sustainability information. Our
mandatory annual statutory sustainability reporting in accordance with
the Danish Financial Statements Act on 99a, 99b, 99d,107d and the
E.U. Sustainable Finance Taxonomy can be found in our Sustainability
Report*.
34
Lundbeck Annual Report 2022
Management Review 2022 in Brief Our Business Governance Financial Statements
All in all, nine out of the 11 sustainability targets
for 2022 were achieved or are on track as
shown in the following table.
The recycling target for general waste was not
met for temporary reasons. At our site
Valbonne, leaflets and cartons were mistakenly
sent to incineration instead of recycling. Our site
in Valby has undergone renovation of the
employee canteen over a period of six months,
which has resulted in increased use of
disposable packaging and a lack of sorting of
food waste at the temporarily established street
kitchen.
We have also not met our target for reduction in
lost time accident frequency. Based on an
analysis of previous year’s accidents, we had
identified the root causes of accidents and
implemented mitigating actions. Our trainings
and refinforcement of a safety conscious culture
led to a reduction in accidents in both our Valby
site and our site in Valbonne. However, there
was an increase in accidents at our site in
Lumsås due to ergonomics. Therefore, we will
be conducting a training in correct lifting and
implement a revised action prevention plan in
2023.
Issue
2022 target
SDG impact
ACCESS TO BRAIN HEALTH
Ensure all disease awareness sponsorships measurably support
brain health in general, mental health and suicide prevention, or
migraine
Donate treatment for at least 1,000 patients in low- and middle-
income countries through product donation partnership
BUSINESS ETHICS
Annual Code of Conduct training completed by all employees at
work globally
Increase the share of employees stating in the annual ESS that
they are confident in raising an ethical or compliance concern
CLIMATE ACTION
Reduce total carbon footprint across own operations, supply, and
distribution in line with our Science-Based Target*
ENVIRONMENTAL MANAGEMENT
Recycle 63% of the organic compounds used in chemical
production
Recycle 70% of general waste
DIVERSITY & INCLUSION
Build an even more inclusive organization with a specific 2022
initiative focusing on cultural awareness across the organization
Increase in share of underrepresented gender at senior
management level**
HEALTH AND SAFETY
Reduce lost time accident frequency ≤ 5
Not more than four high consequence work related accidents with
absence
* We report progress annually on our 15-year targets in Scope 1 & 2 (own produced energy and purchased energy) and Scope 3 (emissions from supply, services, distribution and more)
** EVP, SVP and VP
Achieved
Not achieved
On track
35
Lundbeck Annual Report 2022
Management Review 2022 in Brief Our Business Governance Financial Statements
The regulatory landscape Lundbeck operates in
is constantly changing. Our business activities
and application of technologies also evolve in
the pursuit of meeting patient needs and offering
efficacious treatment options. These conditions
call for a responsive Compliance Program that
can help our employees globally to stay in
accordance with applicable regulations and
attuned with societal expectations.
TONE AT THE TOP SETS OUR
PRIORITIES
Our ethics are formed at the top in the
Compliance Committee with Executive
Management members and key compliance
functions, who review and maintain Lundbeck’s
ethical standards. Each year, the Compliance
Committee sets the global priorities for the
coming year based on a careful review of our
Code of Conduct Risk Register.
The translation of the priorities into operational
requirements is driven by our Global
Compliance Organization consisting of
Headquarter compliance functions and the 17
Regional Compliance Officers who represent
our global affiliates. Collectively, they help
prevent misconduct, detect compliance issues,
and take prompt corrective and preventive
action. They support Lundbeck’s Senior
Management who are held accountable for
ethics and compliance within their organization.
DOING THE RIGHT THING EVERY DAY
For the first time since the pandemic, we
gathered the members of the Global
Compliance Organization in person in
Copenhagen for a two-day Compliance Summit.
A sense of unity came instantly and drove the
sharing of ideas and perspectives in a series of
workshops, presentations, and best practices
sharing.
One of the outcomes from the Summit was
establishing a set of specific metrics that will be
used to support and monitor the global
implementation of our Compliance Program
across our 17 commercial business areas.
Another result was defining the overriding theme
and topics for the global Code of Conduct
eLearning that is assigned and completed by all
employees annually. Under the theme “Doing
the right thing” and a set of fictitious cases, our
employees practice the application of key
principles in the Code of Conduct. All people
managers were asked to lead local discussions
on what “Doing the right thing” means to their
teams.
EMPOWERED, TRUSTED, AND
SUPPORTED
The annual compliance training aims to
empower our employees to make informed and
responsible decisions. This year it also
reiterated that Lundbeck’s foundation is built on
our great people and culture. This was
expressed in multiple video statements where
colleagues shared their personal and
professional perspective on Lundbeck’s five
beliefs: patient-driven, courageous, ambitious,
passionate, and responsible.
These internal voices illustrate the great trust
that we have in our colleagues.
The training is supplemented by our audits and
monitoring efforts that aim to validate the
understanding of the requirements and capture
suggestions for improvements of processes and
controls. Specific feedback is provided to ensure
local management ownership and follow-up.
OPEN DIALOGUE AND ACCESS TO
RAISING CONCERNS
We encourage everyone to have ongoing
dialogue on compliance and ethics with their
colleagues and manager. However, we realize
that some questions, dilemmas, or concerns
might not be discussed openly.
Our Compliance Hotline* is a secure line that is
open for everyone to raise concerns about a
potential violation of the Code of Conduct. It is a
cornerstone in our Compliance Program that
helps protect Lundbeck.
All reports are investigated in line with our global
procedure that safeguards individuals who
report concerns, participate in investigations, or
are suspected of misconduct.
Business Ethics and Code of Conduct
We pursue our business purpose guided by our Code of Conduct. The
Code of Conduct conveys Lundbeck’s commitments and the
expectations to its employees for areas that are critical to the
pharmaceutical industry.
* https://www.lundbeck.com/global/compliance-hotline
36
Lundbeck Annual Report 2022
Management Review 2022 in Brief Our Business Governance Financial Statements
Our investigations are guided by principles that
manifest Lundbeck’s beliefs, including:
• Independence
Lundbeck’s Audit Committee provides oversight
of Lundbeck’s Compliance Program, including
the investigation procedures and outcomes. Our
Chief Compliance Officer provides briefings on
current developments at the Audit Committee
meetings, which aims to ensure the Code of
Conduct Compliance Program and organization
is kept effective, sufficiently positioned, and
resourced.
Yuichi Mitsui
Medical Representative
37
Lundbeck Annual Report 2022
Management Review 2022 in Brief Our Business Governance Financial Statements
RISK MANAGEMENT GOVERNANCE
STRUCTURE
Lundbeck is exposed to risks throughout the
value chain, from the initial stages of developing
innovative pharmaceuticals in our in-house
facilities to the proven pharmaceuticals reaching
the patients.
Lundbeck’s risk management processes are
continually updated and adapted to match
internal and external requirements, where risks
related to trends, global economic
developments, geopolitics, and long-term
forecasts are assessed as part of Lundbeck’s
long-term strategic planning. With this
understanding of the wider context and an
accurate and complete overview of Lundbeck’s
activities and resources, Executive Management
has a clear basis for decision-making on our
overall risk exposure and mitigating actions.
The Board of Directors has the overall
responsibility for ensuring that Lundbeck has
implemented necessary procedures for risk
management.
The oversight of compliance within the
established enterprise risk management
framework is delegated to the Audit Committee.
RISK MANAGEMENT FRAMEWORK
In Lundbeck, enterprise risk management is
considered an integral part of doing business,
which is reflected in the risk management
process.
The process starts in the decentralized teams
within each Executive Management area. The
teams have detailed and extensive knowledge
of the risks within their areas of responsibility.
They systematically identify, quantify, respond
to and monitor risks. They are ideally placed to
mitigate our risk exposure in the first instance.
Each area shares the risks with the central Risk
Office when there are material updates, and at
least on a semi-annual basis. The central Risk
Office provides the risk framework and conducts
interviews with management, risk contributors,
and risk responsible individuals.
This represents an integral part in the alignment
of risks reported to the Risk Office.
In cooperation with each Executive
Management area, the Risk Office assesses the
likelihood of an event occurring and the potential
impact on the Group in terms of financial loss.
The key risk overview is presented to Executive
Management for their assessment and approval
before it is reported to the Audit Committee and
approved by the Board of Directors.
The corporate risk register kept by the Risk
Office provides a consolidated overview of
Lundbeck’s risk exposure by detailing each risk,
risk category, and type. The risk descriptions
provide details on the event, its current status,
the status of the response, and the likelihood
and potential impact.
Our reporting process defines six risk
categories:
• Research and Development
• Market, Commercial, and Strategy
• Supply, Quality, and Product Safety
• IT security
• Legal and Compliance
• Financial
Lundbeck has developed a concise process
covering day-to-day risk identification,
monitoring, mitigation, and reporting within each
Executive Management area, all the way to the
final reporting to Executive Management. This
process enables Executive Management to
control Lundbeck’s risk appetite when deciding
strategy and practice, and when making day-to-
day decisions.
Risk Management
Lundbeck’s risk management processes ensure close monitoring,
systematic risk assessment, and the ability to identify, manage and
report internal and external risks in a changing environment.
38
Lundbeck Annual Report 2022
Management Review 2022 in Brief Our Business Governance Financial Statements
Key Risks
Key Risks
RISK AREA
DESCRIPTION
POTENTIAL CONSEQUENCES
MITIGATING ACTIONS
RESEARCH AND
DEVELOPMENT
Exposure to delays of regulatory approval
or failure in the development of new and
innovative medicines.
Increased regulatory requirements for
clinical trials.
Data requirements from production of non-
clinical and clinical studies.
Delays or failure of new products could impact patients who cannot benefit
from these products and decrease earnings expectations for Lundbeck
and its shareholders.
Delay in regulatory approval may impact the patient’s drug access.
Issues with data integrity could lead to delays in studies and production –
ultimately leading to withdrawals and failure to gain approval.
Clinical trials are run and evaluated throughout the research and
development phase.
Ongoing evaluation of the product pipeline, regulatory requirements, and
product benefit.
Robust quality management system is in place to ensure consistent quality,
data integrity, and the compliance of clinical trials and clinical safety
activities.
MARKET,
COMMERCIAL AND
STRATEGY
Price pressure, new legislation, regulation
of reimbursement and healthcare reforms
in key markets, etc.
Market dynamic change derived from
COVID-19 or ongoing war between Russia
and Ukraine.
Market restrictions could impact patients’ access to Lundbeck products.
Changes in market conditions and healthcare reforms could affect the
pricing landscape as well as rebates and discounts.
These changes could decrease earnings for Lundbeck and its
shareholders.
Understanding the price development in main markets.
Working with healthcare authorities around the world to document the value
of our pharmaceuticals.
Monitor political developments and requirements.
SUPPLY, QUALITY
AND PRODUCT
SAFETY
Disruption of production or supply or
unpredictable demand and stock-out.
Loss of licenses to manufacture or sell
pharmaceuticals.
Defects in product quality or safety.
Product shortage, not giving patients needed access to the
pharmaceuticals they require.
Systems, policies, and procedures are in place to ensure product supply,
quality, and safety.
Dual sourcing strategy and high level of safety stock of key products.
Robust pharmacovigilance system.
IT SECURITY
Cyber attacks and cyber fraud.
System down-time.
Disruption or compromise of IT security could affect all parts of Lundbeck’s
operations and product supply to patients.
Data loss.
IT policies and procedures are in place to safeguard systems and data.
Cyber defenses are tested on a regular basis.
Annual testing of IT disaster recovery plan.
LEGAL AND
COMPLIANCE
Loss, expiration or infringement of
intellectual property rights.
Non-compliance with laws, industry
standards, regulations, and our Code of
Conduct.
Exposure to legal claims or investigations.
Loss, expiration, infringement, or invalidation of intellectual property rights
could decrease earnings for Lundbeck and its shareholders.
Non-compliance with laws, industry standards, regulations, or our Code of
Conduct could affect our ‘license to operate’, result in litigations or
investigations, expose Lundbeck to significant fines, and impact our
reputation and earnings for Lundbeck and its shareholders.
Policies and processes are in place to safeguard intellectual property rights.
The Code of Conduct Compliance Program and global organization are
pivotal in sustaining our compliance culture. The Code of Conduct
Compliance Program includes global activities and ensures continuous
monitoring of compliance with laws and industry standards and annual
training to all employees.
Third parties are committed to observe our legal and ethical standards in
mutually binding agreements and are subject to monitoring.
Global Compliance Hotline and investigation procedure.
FINANCIAL
Fluctuations in exchange rates incl. impact
from currency devaluations.
Lundbeck’s cash flow and earnings could be impacted in cases of
fluctuations in key currencies.
Treasury policy.
Monitoring the financial exposure and hedging a significant part of
Lundbeck’s currency risk up to 18 months in advance.
39
Lundbeck Annual Report 2022
Management Review 2022 in Brief Our Business Governance Financial Statements
Board of Directors
Board of Directors
*
Per 31.12 2022
C = Chair, DC = Deputy Chair, M = Member
* For more information about the Board of Directors and their competencies, please visit https://www.lundbeck.com/global/about-us/our-leadership/board-of-directors
LARS SØREN RASMUSSEN
Chair
LENE SKOLE-SØRENSEN
Deputy Chair
LARS ERIK HOLMQVIST
JEREMY MAX LEVIN
• Born 1959
• Elected 2013
• Considered independent
Lundbeck Committees
• Audit Committee (M)
• Remuneration & Nomination Committee (C)
Directorships
• Chair of the Boards of Directors of: Coloplast A/S;
Danish Industry (DI) Committee on Diversity;
Danish Committee of Corporate Governance;
Equalis; Life Science Council under the Danish
Ministry of Industry, Business & Financial Affairs;
LimaCorporate
• Copenhagen University (M)
Holding of A-shares
20,000
Holding of B-shares
80,000
• Born 1959
• CEO, Lundbeck Foundation
• Elected 2015
• Considered dependent
Lundbeck Committees
• Remuneration & Nomination Committee (M)
• Scientific Committee (M)
Directorships
• ALK-Abelló A/S (DC)
• Falck A/S (DC)
• Ørsted A/S (DC)
• Nordea Bank Abp (M)
Holding of A-shares
None
Holding of B-shares
61,270
• Born 1959
• Elected 2015
• Considered dependent
Lundbeck Committees
• Audit Committee (M)
Directorships
• Biovica International AB (C)
• Lundbeck Foundation (M)
• ALK-Abelló A/S (M)
• Vitrolife AB (M)
• Life Healthcare (M)
Holding of A-shares
None
Holding of B-shares
75,000
• Born 1953
• CEO, Ovid Therapeutics
• Elected 2017
• Considered independent
Lundbeck Committees
• Scientific Committee (C)
Directorships
• Ovid Therapeutics (C)
• Opthea (C)
• BIO (the Biotechnology Innovation Organization)
(M)
Holding of A-shares
None
Holding of B-shares
None
40
Lundbeck Annual Report 2022
Management Review 2022 in Brief Our Business Governance Financial Statements
Board of Directors
*
[Caption]
JEFFREY BERKOWITZ
ILSE DOROTHEA WENZEL
SANTIAGO ARROYO
• Born 1966
• CEO, Real Endpoints
• Elected 2018
• Considered independent
Lundbeck Committees
• Remuneration & Nomination Committee (M)
• Scientific Committee (M)
Directorships
• PharmaTwoB (C)
• Click Therapeutics (M)
• Esperion Therapeutics, Inc. (M)
• Zealand Pharma A/S (M)
• Uniphar PLC (M)
Holding of A-shares
None
Holding of B-shares
None
• Born 1969
• Elected 2021
• Considered independent
Lundbeck Committees
• Audit Committee (C)
Directorships
• Fresenius Medical Care AG & Co. KGaA (M)
• Dentsply Sirona Inc. (M)
Holding of A-shares
None
Holding of B-shares
None
• Born 1960
• Chief Medical Officer, Fulcrum Therapeutics
• Elected 2021
• Considered independent
Lundbeck Committees
• Scientific Committee (M)
Directorships
None
Holding of A-shares
None
Holding of B-shares
None
Per 31.12 2022
C = Chair, DC = Deputy Chair, M = Member
*For more information about the Board of Directors and their competencies, please visit https://www.lundbeck.com/global/about-us/our-leadership/board-of-directors
41
Lundbeck Annual Report 2022
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Board of Directors
*
[Caption]
[Caption]
[Caption]
CAMILLA GRAM ANDERSSON
HOSSEIN ARMANDI
DORTE CLAUSEN
LASSE SKIBSBYE
• Born 1972
• Director, Corporate Health, Safety & Environment
• Elected by employees in 2022
Directorships
• Industrial Sectorial Board of Occupational Health
and Safety (DI) (M)
• Specialized Committee of Chemistry (DI) (M)
• Environment, Health & Safety Expert Group
(EFPIA) (M)
Holding of A-shares
202
Holding of B-shares
808
• Born 1962
• Research Technician
• Elected by employees in 2022
Directorships
None
Holding of A-shares
None
Holding of B-shares
None
• Born 1984
• Clinical Trial Manager, Specialist, Psychiatry
• Elected by employees in 2022
Directorships
• Pharmadanmark (M)
• Training & Conference Center Pharmakon (M)
Holding of A-shares
220
Holding of B-shares
880
• Born 1983
• Principle Scientist
• Elected by employees in 2022
Directorships
• Safety Pharmacology Society (M)
Holding of A-shares
None
Holding of B-shares
None
Per 31.12 2022
C = Chair, DC = Deputy Chair, M = Member
* For more information about the Board of Directors and their competencies, please visit https://www.lundbeck.com/global/about-us/our-leadership/board-of-directors
42
Lundbeck Annual Report 2022
Management Review 2022 in Brief Our Business Governance Financial Statements
Executive
Management
Executive Management
*
[Caption]
DEBORAH DUNSIRE
President and CEO
LARS BANG
Executive Vice President,
Product Development & Supply
ELISE HAUGE **
Executive Vice President,
People & Communication
JOERG HORNSTEIN
CFO & Executive Vice President,
Corporate Functions
• Born 1962
• Joined Lundbeck in 2018
Directorships
• Syros Pharmaceuticals (M)
• Ultragenyx Pharmaceutical Inc. (M)
Holding of A-shares
11,124
Holding of B-shares
44,496
• Born 1962
• Joined Lundbeck in 1988
Directorships
None
Holding of A-shares
61,974
Holding of B-shares
247,896
• Born 1967
• Joined Lundbeck in 2019
Directorships
• CBS Executive Fonden (M)
Holding of A-shares
1,225
Holding of B-shares
4,900
• Born 1977
• Joined Lundbeck in 2022
Directorships
None
Holding of A-shares
None
Holding of B-shares
None
Per 31.12 2022
C = Chair, DC = Deputy Chair, M = Member
* For more information about Executive Management and their competencies, please visit https://www.lundbeck.com/global/about-us/our-leadership/executive-management
** Elise Hauge (Executive Vice President, People & Communication) and Keld Flintholm Jørgensen (Executive Vice President, Corporate Strategy & Business Development) participate in
the Executive Management in their respective roles but are not members of the Executive Management as registered with the Danish Business Authority
43
Lundbeck Annual Report 2022
Management Review 2022 in Brief Our Business Governance Financial Statements
Executive Management
*
KELD FLINTHOLM JØRGENSEN **
Executive Vice President,
Corporate Strategy & Business Development
PER JOHAN LUTHMAN
Executive Vice President,
Research & Development
JACOB TOLSTRUP
Executive Vice President,
Commercial Operations
• Born 1971
• Joined Lundbeck in 2019
Directorships
• Scandion Oncology (M)
Holding of A-shares
7,570
Holding of B-shares
30,280
• Born 1959
• Joined Lundbeck in 2019
Directorships
• Brain+ (M)
Holding of A-shares
12,574
Holding of B-shares
50,296
• Born 1972
• Joined Lundbeck in 1999
Directorships
• Pharmacosmos A/S (C)
Holding of A-shares
569
Holding of B-shares
2,276
Per 31.12 2022
C = Chair, DC = Deputy Chair, M = Member
* For more information about Executive Management and their competencies, please visit https://www.lundbeck.com/global/about-us/our-leadership/executive-management
** Elise Hauge (Executive Vice President, People & Communication) and Keld Flintholm Jørgensen (Executive Vice President, Corporate Strategy & Business Development)
participate in the Executive Management in their respective roles but are not members of the Executive Management as registered with the Danish Business Authority
44
Lundbeck Annual Report 2022
Management Review 2022 in Brief Our Business Governance Financial Statements
STOCK SPLIT
Lundbeck announced that the extraordinary
general meeting of Lundbeck held on June 8,
2022, had adopted the proposed share split of
Lundbeck’s existing shares.
The approval meant that each existing
Lundbeck-share with a nominal value of DKK 5
was split into one (1) A-share with a nominal
value of DKK 1 and four (4) B-shares each with
a nominal value of DKK 1. Each A-share carries
ten (10) votes, and each B-share carries one (1)
vote.
Both the A-shares and the B-shares are traded
and listed on Nasdaq Copenhagen. The A-
shares are issued in the new ISIN
DK0061804697 and are admitted to trading
under the Nasdaq symbol “HLUN A”. The B-
shares are issued in the new ISIN
DK0061804770 and are admitted to trading
under the Nasdaq symbol “HLUN B”.
In consideration of the split of Lundbeck’s
shares into an A-share and a B-share following
the EGM, Lundbeck's American Depositary
Receipt (ADR) program was terminated
following the required notice period.
TURNOVER
Following the stock split 2022 with two new
shares there are no available comparison data
on turnover and the available data only covers
the July-December period. Total trading in
Lundbeck shares for the available period
amounted to DKK 5.3 billion in 2022, while the
average daily turnover was DKK 36.5 million.
SHARE CAPITAL
Lundbeck shares are listed on the Copenhagen
Stock Exchange, Nasdaq Copenhagen. The
shares are negotiable and there are no
restrictions on their transferability. At the end of
2022, Lundbeck’s total share capital amounted
to DKK 996 million, which is equivalent to 996
million shares.
COMPOSITION OF SHAREHOLDERS
According to the Lundbeck share register, the
company had approximately 54,000
shareholders at the end of 2022, representing
approximately 99% of the outstanding shares.
The Lundbeck Foundation (Lundbeckfond Invest
A/S) is the company’s largest shareholder and
holds approximately 80% of the A-shares and
approximately 66% of the B-shares. The total
share capital held by the Foundation is
approximately 69% and the total voting rights
held by the Foundation in Lundbeck is
approximately 76%.
The Lundbeck Foundation is the only
shareholder to report a holding in excess of 5%
of the share capital.
At the end of 2022, investors in North America
held 24% of the free float compared to 28% in
2021; European (excl. Danish) investors held
32% compared to 27% in 2021; Danish
investors held 13% compared to 17% in 2021;
rest of the world held 1%, compared to 2% in
2021, and other investors, incl. private, held
30% compared to 27% in 2021.
The Lundbeck Share
2022 was an eventful year for Lundbeck with solid financial results and
positive news from the R&D pipeline. The Russian war in Ukraine has
also had material impact on global financial markets.
The Lundbeck share price began the year at DKK 168.85 (closing price
end 2021) which adjusted for the share split in June 2022 equals DKK
33.77. The share price (B-share) reached a year high of DKK 37.86 (July
5), recorded a year low of DKK 24.24 (October 5) and ended the year at
DKK 26.05. This is a decrease of 23% for the year. In comparison, the
Danish OMXC25 index declined by 14%, while the MSCI European
Pharmaceutical Index declined by 1%.
LUNDBECK’S TOTAL NUMBER OF VOTING RIGHTS AND TOTAL SHARE CAPITAL
Number of shares (nominal value
of DKK 1 each)
Nominal value (DKK)
Number of votes
A-shares
199,148,222
199,148,222
1,991,482,220
B-shares
796,592,888
796,592,888
796,592,888
Total
995,741,110
995,741,110
2,788,075,108
45
Lundbeck Annual Report 2022
Management Review 2022 in Brief Our Business Governance Financial Statements
In order to fund our long-term share-based
incentive programs, Lundbeck has 2,901,400
shares held as treasury shares at the end of
2022. The holding is split in 580,280 A-shares
and 2,321,120 B-shares.
At the end of 2022, Lundbeck’s Board of
Directors and Executive Management held a
total of 127,712 Lundbeck A-shares and a total
of 585,848 B-shares compared to 156,384
Lundbeck shares at the end of 2021 and
therefore before the share split. The total
number of shares in 2022 corresponds to 0.06%
of the total A-shares outstanding and 0.07% of
the total B-shares outstanding.
LUNDBECK AND THE EQUITY MARKET
Through the Investor Relations (IR) function,
Lundbeck aspires to provide a fair and accurate
view of its activities by providing ongoing
communications with prospective and existing
shareholders and equity analysts. Through
regular meetings and dialogue, we convey
relevant information about our vision and goals,
business areas and financial development.
In 2022, Lundbeck’s Investor Relations team
held more than 250 meetings, most of them
based on digital platforms such as Teams and
Zoom.
Lundbeck has also participated/presented at 12
investor conferences, again most of which were
virtual.
Lundbeck is currently covered by 17 sell-side
analysts, incl. the major global investment banks
that regularly produce research reports on
Lundbeck. A list of analysts covering Lundbeck
is available on www.lundbeck.com.*
After the announcement of our interim and full-
year reports, members of Lundbeck’s Executive
Management and Investor Relations team
conduct roadshows to inform investors and
analysts about the company’s latest
developments. Our investor presentations are
available for download on www.lundbeck.com.**
* https://www.lundbeck.com/global/investors/the-share/analyst-coverage
** https://www.lundbeck.com/global/investors/reports-and-presentations
Financial calendar 2023
21 March 2023
Annual General Meeting 2023
24 March 2023
Dividends for 2022 at the disposal of shareholders
10 May 2023
Financial statements for the first three months of 2023
16 August 2023
Financial statements for the first six months of 2023
8 November 2023
Financial statements for the first nine months of 2023
STOCK PERFORMANCE 2022
STOCK PERFORMANCE 2018-2022
COMPOSITION OF OWNERSHIP, END 2022
COMPOSITION OF FREE FLOAT, END 2022
46
Lundbeck Annual Report 2022
Management Review 2022 in Brief Our Business Governance Financial Statements
Share Ratios*
* Relevant figures for 2018-2022 are adjusted for the stock split, which took place in June 2022
2022
2021
2020
2019
2018
Earnings per share, basic (EPS) (DKK)
1.93
1.33
1.59
2.33
3.58
Earnings per share, diluted (DEPS) (DKK)
1.93
1.33
1.59
2.33
3.58
Cash flow from operating activities per share, diluted (DKK)
3.54
2.29
3.86
2.63
6.02
Proposed dividend per share (DKK)
0.58
0.40
0.50
0.82
2.40
Dividend payout ratio (%)
30
30
31
35
67
Dividend yield (%)
2.2
1.2
1.2
1.6
4.2
Share price (B-shares), year-end (DKK)
26.05
-
-
-
-
Share price (B-shares), high (DKK)
37.86
-
-
-
-
Share price (B-shares), low (DKK)
24.24
Share price (old share structure), year-end (DKK)
-
168.85
208.80
254.4
285.4
Share price (old share structure), high (DKK)
-
258.10
302.4
306.9
475.9
Share price (old share structure), low (DKK)
-
152.45
178.15
217.2
257.0
Price/Earnings, diluted (DKK)
25.87
25.47
26.25
21.86
15.97
Market capitalization (DKKm)
25,507
33,626
41,582
50,660
56,825
47
Lundbeck Annual Report 2022
Management Review 2022 in Brief Our Business Governance Financial Statements
Share Facts
Number of A-shares, year-end
199,148,222
Number of B-shares, year-end
796,592,888
Total
995,741,110
Share capital, year-end (DKK)
995,741,110
Nominal value per share (DKK)
1
Number of treasury A-shares
580,280
Number of treasury B-shares
2,321,120
Total number of treasury shares
2,901,400 (0.29%)
Free float (%)
31
IPO
18 June 1999
Stock exchange
Nasdaq Copenhagen
ISIN code
DK0061804697 (A), DK0061804770 (B)
Ticker
HLUNa / HLUNb (Reuters), HLUNA DC / HLUNB DC (Bloomberg)
48
Lundbeck Annual Report 2022
Management Review 2022 in brief Our Business Governance Financial Statements
Financial
Statements
IN THIS SECTION
49 Consolidated Financial Statements
90 Financial Statements of the Parent Company
101 Management Statement
102 Independent Auditor’s Reports
Michal Piatek
BA Financial Controller, Accounting to Reporting
Katarzyna Owczarska
Finance Associate, Accounting to Reporting
49
Lundbeck Annual Report 2022
Management Review 2022 in brief Our Business Governance Financial Statements
CONTENTS
Statement of profit or loss 50
Statement of comprehensive income 50
Statement of financial position 51
Statement of changes in equity 52
Statement of cash flows 53
Core Reconciliation
(part of Management Review – not audited) 106
Consolidated Financial Statements
NOTES
1 Basis of preparation 54
2 Revenue and segment information 56
3 Employee costs 57
4 Financial income and expenses 58
5 Income taxes 58
6 Intangible assets 62
7 Property, plant and equipment 64
8 Right-of-use assets and lease liabilities 65
9 Inventories 66
10 Trade receivables 66
11 Cash resources 67
12 Equity 67
13 Retirement benefit obligations and similar obligations 70
14 Incentive programs 72
15 Provisions 73
16 Contingent assets and contingent liabilities 73
17 Bank debt, bond debt and borrowings 75
18 Other payables 75
19 Financial instruments 76
20 Audit fees 80
21 Contractual obligations 81
22 Related parties 81
23 List of subsidiaries 82
24 Subsequent events 83
25 Significant accounting policies 83
Consolidated Financial Statements
50
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
2022
2021
Notes
DKKm
DKKm
Revenue
2
Cost of sales
3
Gross profit
Sales and distribution costs
3
Administrative expenses
3
Research and development costs
3
Profit from operations (EBIT)
Financial income
4
Financial expenses
4
Profit before tax
Tax on profit for the year
5
Profit for the year
Earnings per share, basic (EPS) (DKK)¹⁾
12
Earnings per share, diluted (DEPS) (DKK)¹⁾
12
1) The calculation of EPS is based on a share denomination of DKK 1 as a result of the share split completed on 8 June 2022. Comparative
figures have been restated to reflect the change in trading unit from a nominal value of DKK 5 to DKK 1.
Statement of profit or loss
2022
2021
Notes
DKKm
DKKm
Profit for the year
Actuarial gains/losses
13
(1 )
Tax
12
(19 )
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
(157 )
Hedging of net investments in foreign subsidiaries
19
(163 )
(127 )
Deferred gains/losses on cash flow hedge, exchange rate
19
(347 )
(340 )
Deferred gains/losses on cash flow hedge, interest rate
19
Deferred gains/losses on cash flow hedge, price
19
-
Exchange gains/losses, hedging (transferred to revenue)
19
(53 )
Tax
12
(58 )
Items that may be reclassified subsequently to profit or loss
Other comprehensive income
Total comprehensive income
Statement of comprehensive income
Statement of profit or loss
1 January – 31 December
Statement of comprehensive income
1 January – 31 December
51
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
2022
2021
Notes
DKKm
DKKm
Intangible assets
6
Property, plant and equipment
7
Right-of-use assets
8
Other financial assets
Other receivables
Deferred tax assets
5
Financial and other assets
Non-current assets
Inventories
9
Trade receivables
10
Income taxes receivable
Other receivables
Prepayments
Receivables
Cash and bank balances
11
Current assets
Assets
Statement of financial position - assets
2022
2021
Notes
DKKm
DKKm
Share capital
12
Foreign currency translation reserve
Hedging reserve
19
(162 )
Retained earnings
Equity
Retirement benefit obligations
13
Deferred tax liabilities
5
Provisions
15
Bank debt and bond debt
17
Lease liabilities
8
Other payables
18
Non-current liabilities
Retirement benefit obligations
13
Provisions
15
Trade payables
Lease liabilities
8
Income taxes payable
Other payables
18
Current liabilities
Liabilities
Equity and liabilities
Statement of financial position – equity and liabilities
Statement of financial position –
assets
At 31 December
Statement of financial position –
equity and liabilities
At 31 December
52
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
Statement of changes in equity
Statement of changes in equity
At 31 December
Share capital
Foreign currency
translation reserve
Hedging
reserve
Retained earnings
Total equity
Notes
DKKm
DKKm
DKKm
DKKm
DKKm
2022
Equity at 1 January
(162 )
Profit for the year
Other comprehensive income
12
Comprehensive income
Distributed dividends, gross
12
(398 )
(398 )
Dividends received, treasury shares
12
Buyback of treasury shares
12
(45 )
(45 )
Incentive programs
14
Other transactions
(413 )
(413 )
Equity at 31 December
2021
Equity at 1 January
Profit for the year
Other comprehensive income
12
(257 )
(1 )
Comprehensive income
(257 )
Distributed dividends, gross
(498 )
(498 )
Dividends received, treasury shares
Buyback of treasury shares
12
(34 )
(34 )
Incentive programs
14
Other transactions
(494 )
(494 )
Equity at 31 December
(162 )
53
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
2022
2021
Notes
DKKm
DKKm
Profit from operations (EBIT)
Adjustment for non-cash items:
Amortization, depreciation and impairment losses
Incentive programs
Change in provisions
(244 )
(447 )
Other adjustments
(152 )
Change in working capital:
Change in inventories
(979 )
(828 )
Change in receivables
(504 )
Change in short-term debt
(273 )
Cash flows from operations before financial receipts and payments
Financial receipts
Financial payments
(643 )
(200 )
Cash flows from ordinary activities
Income taxes paid
(449 )
Cash flows from operating activities
Contingent consideration payment from acquisition of company
(1,076 )
Purchase of intangible assets
6
(449 )
(202 )
Purchase of property, plant and equipment
7
(371 )
(410 )
Sale of property, plant and equipment
Cash flows from investing activities
(1,892 )
(610 )
Cash flows from operating and investing activities (free cash flow)
Statement of cash flows
2022
2021
Notes
DKKm
DKKm
Proceeds from loans and issue of bonds
17
Repayment of bank loans and borrowings
17
(1,086 )
(3,123 )
Repayment of lease liabilities
8
(93 )
(82 )
Buyback of treasury shares
12
(45 )
(34 )
Dividends paid in the financial year, net
12
(397 )
(497 )
Cash flows from financing activities
(387 )
(3,336 )
Net cash flows for the year
(1,674 )
Cash and bank balances at 1 January
Unrealized exchange gains/losses on cash and bank balances
Net cash flows for the year
(1,674 )
Cash and bank balances at 31 December
Interest-bearing debt, cash and bank balances, net,
is composed as follows:
Cash and bank balances
11
Interest bearing debt
(5,731 )
(5,468 )
Interest-bearing debt, cash and bank balances, net,
at 31 December – net cash/(net debt)
(2,183 )
(3,189 )
Statement of cash flows
At 31 December
54
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
Note 1
55
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
1 BASIS OF PREPARATION - CONTINUED
Note 1
56
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
Note 2
57
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
Note 3
58
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
Notes 4-5
59
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
5 INCOME TAXES – CONTINUED
Note 5
60
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
5 INCOME TAXES – CONTINUED
Note 5
61
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
5 INCOME TAXES – CONTINUED
Note 5
62
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
Note 6
63
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
6 INTANGIBLE ASSETS - CONTINUED
Note 6
64
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
6 INTANGIBLE ASSETS - CONTINUED
Notes 6-7
65
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
7 PROPERTY, PLANT AND EQUIPMENT - CONTINUED
Notes 7-8
66
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
8 RIGHT-OF-USE ASSETS AND LEASE LIABILITIES - CONTINUED
Notes 8-10
67
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
10 TRADE RECEIVABLES - CONTINUED
Notes 10-12
68
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
12 EQUITY – CONTINUED
Note 12
69
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
12 EQUITY - CONTINUED
Note 12
70
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
Note 13
71
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
13 RETIREMENT BENEFIT OBLIGATIONS AND SIMILAR OBLIGATIONS – CONTINUED
Note 13
72
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
Note 14
73
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
Notes 15-16
74
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
16 CONTINGENT ASSETS AND CONTINGENT LIABILITIES - CONTINUED
Note 16
75
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
Notes 17-18
76
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
18 OTHER PAYABLES - CONTINUED
Notes 18-19
77
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
19 FINANCIAL INSTRUMENTS - CONTINUED
Note 19
78
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
19 FINANCIAL INSTRUMENTS - CONTINUED
Note 19
79
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
19 FINANCIAL INSTRUMENTS - CONTINUED
Note 19
80
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
19 FINANCIAL INSTRUMENTS - CONTINUED
Notes 19-20
81
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
Notes 21-22
82
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
Note 23
83
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
23 LIST OF SUBSIDIARIES – CONTINUED
Notes 23-24
84
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
25 SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Note 25
85
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
25 SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Note 25
86
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
25 SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Note 25
87
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
25 SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Note 25
88
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
25 SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Note 25
89
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
25 SIGNIFICANT ACCOUNTING POLICIES – CONTINUED
Note 25
90
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
CONTENTS
Statement of profit or loss 91
Statement of financial position 92
Statement of changes in equity 93
Financial Statements of the Parent Company
NOTES
1 Revenue 94
2 Employee costs 94
3 Investments in subsidiaries 94
4 Financial income and expenses 95
5 Income taxes 95
6 Distribution of profit 95
7 Intangible assets 96
8 Property, plant and equipment 96
9 Right-of-use assets and lease liabilities 97
10 Inventories 97
11 Provisions 97
12 Contingent assets and contingent liabilities 97
13 Bank debt and bond debt 99
14 Payables to subsidiaries 99
15 Financial instruments 99
16 Audit fees 99
17 Contractual obligations 99
18 Related parties 100
19 Subsequent events 100
20 Significant accounting policies 100
Financial Statements
of the Parent
Company
91
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
2022
2021
Notes
DKKm
DKKm
Revenue
1
12,722
11,298
Cost of sales
2
3,005
2,732
Gross profit
9,717
8,566
Sales and distribution costs
2
3,598
3,247
Administrative expenses
2
789
634
Research and development costs
2
3,428
3,600
Profit from operations (EBIT)
1,902
1,085
Income from investments in subsidiaries
3
345
223
Financial income
4
415
256
Financial expenses
4
461
617
Profit before tax
2,201
947
Tax on profit for the year
5
345
127
Profit for the year
6
1,856
820
Statement of profit or loss
78B77B76B75B74B73B72B71B70B69B68B67B66B65B64B63B62B61B60B59B58B57B56B55B54B53B52B51B50B49B48B47B46B45B44B43B42B41B40B39B38B37B36B35B34B33B32B31B30B29B28B27B26B25B24B23B22B21B20B19B18B17B16B15B14B13B12B11B10B9B8B7B6B5B4B3B2B1B0B79BStatement of profit or loss
1 January – 31 December
92
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
2022
2021
Notes
DKKm
DKKm
Intangible assets
7
9,233
9,583
Property, plant and equipment
8
1,724
1,648
Right-of-use assets
9
174
188
Investments in subsidiaries
3
10,508
10,539
Receivables from subsidiaries
6,028
5,839
Other financial assets
172
56
Other receivables
3
4
Financial assets
16,711
16,438
Non-current assets
27,842
27,857
Inventories
10
2,671
1,848
Trade receivables
787
709
Receivables from subsidiaries
4,647
2,006
Joint taxation contribution
-
48
Other receivables
531
115
Prepayments
24
116
Receivables
5,989
2,994
Cash and bank balances
2,626
1,263
Current assets
11,286
6,105
Assets
39,128
33,962
Statement of financial position - assets
2022
2021
Notes
DKKm
DKKm
Share capital
996
996
Proposed dividends
578
398
Hedging reserve
237
(81)
Retained earnings
13,826
12,567
Equity
15,637
13,880
Deferred tax liabilities
5
923
239
Provisions
11
70
-
Bank debt and bond debt
13
5,096
4,783
Lease liabilities
9
161
174
Payables to subsidiaries
14
9,402
9,066
Other payables
20
20
Non-current liabilities
15,672
14,282
Provisions
11
20
240
Trade payables
1,790
2,062
Lease liabilities
9
14
14
Payables to subsidiaries
4,860
2,786
Income tax payables
6
-
Other payables
1,129
698
Current liabilities
7,819
5,800
Liabilities
23,491
20,082
Equity and liabilities
39,128
33,962
Statement of financial position – equity and liabilities
Statement of financial position –
assets
At 31 December
Statement of financial position –
equity and liabilities
At 31 December
93
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Management Review Consolidated Financial Statements Financial Statements of the Parent Company
Share
capital
Proposed
dividends
Hedging
reserve
Retained
earnings
Equity
Notes
DKKm
DKKm
DKKm
DKKm
DKKm
Equity at 1 January
996
398
(81)
12,567
13,880
Profit for the year
6
-
578
-
1,278
1,856
Distributed dividends, gross
-
(398)
-
-
(398)
Dividends received, treasury shares
-
-
-
1
1
Deferred gains/losses on cash flow
hedge, exchange rate
-
-
(347)
-
(347)
Deferred gains/losses on cash flow
hedge, interest rate
-
-
39
-
39
Deferred gains/losses on cash flow
hedge, price
-
-
128
-
128
Exchange gains/losses, hedging
(transferred to revenue)
-
-
588
-
588
Buyback of treasury shares
-
-
-
(45)
(45)
Incentive programs
-
-
-
25
25
Tax on transactions in equity
5
-
-
(90)
-
(90)
Equity at 31 December
996
578
237
13,826
15,637
See note 12 Equity in the consolidated financial statements.
Statement of changes in equity
Statement of changes in equity
At 31 December
94
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Management Review Consolidated Financial Statements Financial Statements of the Parent Company
1 REVENUE
2022
2021
Revenue by region
DKKm
DKKm
Europe
4,423
3,864
United States
6,454
5,079
International markets
2,347
2,150
Total
13,224
11,093
Other revenue
86
152
Effects from hedging
(588)
53
Total revenue
12,722
11,298
The geographical structure was changed effective 1 January 2022. See note 2 Revenue and segment
information in the consolidated financial statements for details.
2 EMPLOYEE COSTS
2022
2021
Breakdown of employee costs
DKKm
DKKm
Short-term employee benefits
1,447
1,396
Retirement benefits
129
125
Social security costs
17
20
Equity- and cash-settled incentive programs
24
34
Severance and other costs from restructuring activities
-
100
Total
1,617
1,675
Employee costs for the year are included in the following functions in the statement of profit or loss:
2022
2021
Employee costs
DKKm
DKKm
Cost of sales
448
428
Sales and distribution costs
99
177
Administrative expenses
318
347
Research and development costs
752
723
Total
1,617
1,675
Information on employees
2022
2021
Number
Number
Average number of full-time employees in the financial year
1,751
1,721
Number of full-time employees at 31 December
1,769
1,732
Remuneration of the Registered Executive Management
See notes 3 Employee costs and 14 Incentive programs in the consolidated financial statements.
Remuneration of the Board of Directors
See note 3 Employee costs in the consolidated financial statements.
Incentive programs
See note 14 Incentive programs in the consolidated financial statements.
3 INVESTMENTS IN SUBSIDIARIES
2022
DKKm
Cost at 1 January
10,743
Capital contributions to subsidiaries
29
Cost at 31 December
10,772
Impairment at 1 January
204
Impairment of investments in subsidiaries
60
Impairment at 31 December
264
Carrying amount at 31 December
10,508
In 2022, income from investments in subsidiaries relates to dividends received and impairment losses
recognized related to investments in subsidiaries amounting to DKK 345 million. In 2021, income from
investments in subsidiaries related to dividends amounting to DKK 223 million.
See note 23 List of subsidiaries in the consolidated financial statements for an overview of subsidiaries.
Notes 1-3
95
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Management Review Consolidated Financial Statements Financial Statements of the Parent Company
4 FINANCIAL INCOME AND EXPENSES
2022
2021
DKKm
DKKm
Financial income
415
256
Financial expenses
461
617
Net financials, expenses/(income)
46
361
In 2022, out of total financial income and financial expenses, DKK 369 million (DKK 246 million in 2021) and
DKK 173 million (DKK 49 million in 2021) are related to intra-group interest income and expenses, respectively.
In 2022, financial income and financial expenses are impacted by a net exchange loss of DKK 20 million (DKK
163 million in 2021) relating to translation of receivables from and payables to subsidiaries that are considered
part of the overall investment in subsidiaries.
Further, in 2022, financial income and financial expenses are impacted by a loss of DKK 163 million (loss of
DKK 127 million in 2021) relating to the translation of external loans used for hedging net investments in foreign
operations in the U.S.
5 INCOME TAXES
Tax on profit for the year
2022
2021
DKKm
DKKm
Current tax, joint taxation contribution
27
3
Prior-year adjustments, current tax¹⁾
(276)
(51)
Prior-year adjustments, deferred tax¹⁾
266
47
Change in deferred tax for the year
418
55
Total tax for the year
435
54
Tax for the year is composed of:
Tax on profit for the year
345
127
Tax on transactions in equity
90
(73)
Total tax for the year
435
54
1) Movements from prior year adjustments, deferred tax to prior year adjustments, current tax, primarily relate to the utilization of tax losses from
prior years by jointly taxed companies not controlled by Parent Company
Deferred tax balances
Balance at
1 January
Adjustment of
deferred
tax at
beginning
of year
Movements
during
the year
Balance at
31 December
Temporary differences between assets and liabilities as
stated in the financial statements and in the tax base
DKKm
DKKm
DKKm
DKKm
Intangible assets
4,808
-
1,028
5,836
Property, plant and equipment
431
-
(2)
429
Inventories
363
-
49
412
Other items
(500)
(269)
603
(166)
Tax loss carryforwards etc.
(4,017)
1,480
223
(2,314)
Total temporary differences
1,085
1,211
1,901
4,197
Deferred (tax assets)/tax liabilities
239
266
418
923
The major assumptions relating to the recognition and measurement of tax assets are described in
note 5 Income taxes in the consolidated financial statements.
2022
2021
Movements in deferred tax
DKKm
DKKm
Balance at 1 January
239
137
Movements related to transactions recognized in profit or loss
656
102
Movements related to transactions recognized in equity
28
-
Balance at 31 December
923
239
6 DISTRIBUTION OF PROFIT
2022
2021
Proposed distribution of profit for the year
DKKm
DKKm
Proposed dividends for the year
578
398
Transferred to/from distributable reserves
1,278
422
Total profit for the year
1,856
820
Proposed dividend per share (DKK)
0.58
0.40
See note 12 Equity in the consolidated financial statements for details on treasury shares.
Notes 4-6
96
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
7 INTANGIBLE ASSETS
Product
rights¹⁾
Other
rights²⁾
Projects in
progress²⁾
Total
intangible
assets
Intangible assets
DKKm
DKKm
DKKm
DKKm
Cost at 1 January
16,454
1,749
104
18,307
Transfers
-
50
(50)
-
Additions
359
15
66
440
Disposals
-
(61)
(17)
(78)
Cost at 31 December
16,813
1,753
103
18,669
Amortization and impairment losses at 1 January
7,097
1,627
-
8,724
Amortization
688
52
-
740
Disposals
-
(28)
-
(28)
Amortization and impairment losses at 31 December
7,785
1,651
-
9,436
Carrying amount at 31 December
9,028
102
103
9,233
1) In 2022, product rights not yet commercialized amounted to DKK 2,322 million (DKK 6,341 million in 2021).
2) Other rights and projects in progress primarily include items such as the IT system SAP.
For details on material product rights and impairment testing, see note 6 Intangible assets in the consolidated
financial statements.
8 PROPERTY, PLANT AND EQUIPMENT
Land and
buildings
Plant and
machinery
Other
fixtures
and fittings,
tools and
equipment
Prepayments
and assets
under
construction
Total
property,
plant and
equipment
Property, plant and equipment
DKKm
DKKm
DKKm
DKKm
DKKm
Cost at 1 January
3,195
1,087
507
425
5,214
Transfers
156
31
9
(196)
-
Additions
7
11
2
216
236
Disposals
(20)
(74)
(14)
-
(108)
Cost at 31 December
3,338
1,055
504
445
5,342
Depreciation and impairment losses at
1 January
2,202
907
457
-
3,566
Depreciation
92
42
20
-
154
Impairment losses
3
1
-
-
4
Disposals
(19)
(73)
(14)
-
(106)
Depreciation and impairment losses at
31 December
2,278
877
463
-
3,618
Carrying amount at 31 December
1,060
178
41
445
1,724
Pledged assets
No land and buildings were mortgaged at 31 December 2022. No other assets have been pledged.
Notes 7-8
97
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
9 RIGHT-OF-USE ASSETS AND LEASE LIABILITIES
2022
2021
Land and buildings
DKKm
DKKm
Cost at 1 January
227
220
Adjustment to right-of-use assets during the year¹⁾
-
7
Cost at 31 December
227
227
Depreciation and impairment losses at 1 January
39
26
Depreciation
14
13
Depreciation and impairment losses at 31 December
53
39
Carrying amount at 31 December
174
188
1) Comprises reassessment of lease term and renewal of lease agreements
2022
2021
Amounts recognized in profit or loss
DKKm
DKKm
Expense relating to short-term leases, not capitalized
1
2
Depreciation of right-of-use assets, land and buildings
14
13
Total recognized in profit or loss
15
15
2022
2021
Maturity analysis of lease liabilities
DKKm
DKKm
Within one year
14
14
Between one year and five years
54
54
After five years
107
120
Lease liabilities at 31 December
175
188
10 INVENTORIES
2022
2021
DKKm
DKKm
Raw materials and consumables
185
162
Work in progress
2,066
1,342
Finished goods and goods for resale
420
344
Total
2,671
1,848
11 PROVISIONS
2022
DKKm
Provisions at 1 January
240
Additional provisions recognized
70
Provisions used during the year
(82)
Reversal of unused provisions
(138)
Provisions at 31 December
90
The Parent Company has entered into agreements with individual subsidiaries, under which the Parent
Company will cover expected losses and obligations concerning restructuring programs. The provisions in the
Parent Company therefore cover such losses and obligations.
At 31 December 2022, the total restructuring provision amounted to DKK 20 million (DKK 240 million at 31
December 2021). In 2022, DKK 82 million of the restructuring provision was used and DKK 138 million was
reversed, due to lower than expected usage.
In addition, provisions comprise liabilities relating to items such as legal disputes.
12 CONTINGENT ASSETS AND CONTINGENT LIABILITIES
Pending legal proceedings
H. Lundbeck A/S (the “Company”) 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, the Company received the European Commission’s decision that agreements concluded with
four generic competitors concerning citalopram violated competition law. The decision included fining the
Company EUR 93.8 million (approximately DKK 700 million). The Company paid and expensed the fine in the
third quarter of 2013. In March 2021, the European Court of Justice rejected the Company’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
Notes 9-12
98
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
12 CONTINGENT ASSETS AND CONTINGENT LIABILITIES - CONTINUED
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 the Company
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. Late September 2022, the Company received a required eight
weeks’ notice, which means that the UK health authorities may submit its claim to the court after 25 November
2022. The Company expects that the UK health authorities will now pursue their alleged claims. Further, in late
October 2021, the Company 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 the Company’s
conclusion of agreements with two of the four generic competitors, which were comprised by the EU Court of
Justice ruling. The Company has filed its first defense in May 2022 and the parties have subsequently
exchanged additional pleadings. The court date for the first instance hearing has not yet been fixed and it may
take several years before a final conclusion is reached by the German courts. Finally, in March and April 2022,
the Company received letters from several regional health authorities in Spain specifically stating that they
intend to interrupt the statute of limitation. It is still uncertain whether the health authorities in Spain will actively
pursue any claims. The Company disagrees with all claims and intends to defend itself against them.
In Canada, the Company 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. the Company) 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. The Company
strongly disagrees with the claims raised.
In 2018, the Company entered into settlements with three of four generic companies involved in an Australian
federal court case, in which the Company was pursuing patent infringement and damage claims over the sale
of escitalopram products in Australia. The Company received AUD 51.7 million (DKK 242 million) in 2018. In
the Company’s case against the last of the four generic companies, Sandoz Pty Ltd, the Federal Court found
that Sandoz Pty Ltd had infringed the Company’s escitalopram patent between 2009 and 2012 and awarded
the Company 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 the Company’s appeal and overturned the Full Federal
Court decision on all major issues. The case has been send back to the Federal Court for recalculation of
damages and the Company’s appeal of the Australian Patent Office’s decision to grant Sandoz a license will
be restarted.
Together with Takeda, the Company 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 the
Company has settled with eight opponents. As communicated by the Company in company release no. 706
dated October 1, 2021, the cases against the six remaining opponents (the “ANDA Filers”) have been decided
by the U.S. District Court for the District of Delaware (the ‘Court’). The Court found that the Company’s
compound patent (U.S. Patent No. 7,144,884) is valid. The compound patent expires on 17 June 2026, with
an expected six-month pediatric exclusivity period extending to 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 were infringed by the relevant ANDA Filers, except that
Lupin was found to infringe a patent covering the Company’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 company release no. 706. The Court’s decision has been appealed by the Company 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. The validity
of the compound patent has not been challenged under the appeal.
Together with Otsuka Pharmaceutical, the Company has instituted patent infringement proceedings against
several generic companies that have applied for marketing authorization for generic versions of Rexulti
®
(brexpiprazole) in the U.S. The proceedings have now been resolved. The compound patent remains valid
until 23 June 2029, including expected pediatric extensions.
The Company and Otsuka have received a Paragraph IV certification from Mylan Pharmaceuticals with respect
to certain of the patent listed for Abilify Maintena
®
in the U.S., and Otsuka and the Company have instituted
patent infringement proceedings against Mylan and Viatris Inc. The U.S. FDA cannot grant marketing
authorization in the U.S. to Mylan or Viatris Inc. before the patents expire, unless they receive a decision in
their favor. A District Court decision is currently expected by August 2024. Abilify Maintena
®
is covered by
several U.S. 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
United States being in 2034.
The Parent Company has been involved in environmental investigations. The Company does not consider it
probable that the investigation will result in a liability.
Note 12
99
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Management Review Consolidated Financial Statements Financial Statements of the Parent Company
12 CONTINGENT ASSETS AND CONTINGENT LIABILITIES - CONTINUED
Joint taxation
The Parent Company is part of a Danish joint taxation scheme with Lundbeckfonden (Lundbeckfond Invest
A/S including subsidiaries), according to which the Parent Company has partly a joint and several liability and
partly a secondary liability with respect to corporate income taxes, etc. for the jointly-taxed companies. In
addition, the Parent Company has partly a joint and several liability and partly a secondary liability with respect
to any obligations to withhold tax on interest, royalties and dividends for these companies. However, in both
cases the secondary liability is capped at an amount equal to the share of the capital of the company directly
or indirectly owned by the ultimate parent company. The total tax obligation under the joint taxation scheme is
shown in the financial statements of Lundbeckfond Invest A/S.
Letters of intent
The Parent Company has entered into agreements to cover operating losses in certain subsidiaries.
As collateral for bank guarantees, the Parent Company has issued letter of intent to the banks in the amount
of DKK 7 million (DKK 7 million in 2021) on behalf of subsidiaries.
13 BANK DEBT AND BOND DEBT
Bank debt and bond debt falling due after more than five years from the balance sheet date amounted to
DKK 0 million at 31 December 2022 (DKK 3,700 million at 31 December 2021).
14 PAYABLES TO SUBSIDIARIES
Payables to subsidiaries falling due after more than five years from the balance sheet date amounted to DKK
9,402 million at 31 December 2022 (DKK 9,066 million at 31 December 2021).
15 FINANCIAL INSTRUMENTS
Foreign currency management is handled by the Parent Company. See note 19 Financial instruments in the
consolidated financial statements.
The fair value of derivatives at year-end is disclosed in note 19 Financial instruments in the consolidated
financial statements. The fair value adjustment recognized in equity is disclosed in the statement of changes
in equity in the financial statements of the Parent Company. All fair value adjustments are initially recognized
in equity.
16 AUDIT FEES
2022
2021
DKKm
DKKm
Statutory audit
4
3
Assurance engagements other than audit
1
1
Tax advisory
-
2
Other services
4
3
Fee to PricewaterhouseCoopers
9
9
17 CONTRACTUAL OBLIGATIONS
Research and development milestones and collaborations
The Parent Company 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 the
agreements, Lundbeck is committed to pay certain milestones.
At 31 December 2022, potential future milestone payments totaled to DKK 1,095 million (DKK 1,031 million at
31 December 2021).
Sales milestones
The Parent Company is committed to pay certain commercial sales milestones, royalties or other payments
based on a percentage of sales generated from sale of goods following marketing approval. These amounts
are excluded from the contractual obligations because of their contingent nature, dependent on future sales.
Other purchase obligations
The Parent company has undertaken purchase obligations relating to property, plant and equipment in the
amount of DKK 24 million (DKK 48 million in 2021).
Notes 12-17
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Management Review Consolidated Financial Statements Financial Statements of the Parent Company
18 RELATED PARTIES
For information on related parties exercising controlling influence on the Parent Company, see note 22 Related
parties in the consolidated financial statements.
The Parent Company is included in the consolidated financial statements of Lundbeckfonden.
The Parent Company had transactions with subsidiaries during 2022. The Parent Company’s share of
ownership of all subsidiaries is 100%. The Parent Company did not enter into any transactions with other
related parties that were not on an arm’s length basis.
19 SUBSEQUENT EVENTS
See note 24 Subsequent events in the consolidated financial statements.
20 SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Parent Company H. Lundbeck A/S have been prepared in accordance with the
Danish Financial Statements Act applying to enterprises in reporting class D. The financial statements are
presented in Danish kroner (DKK). All amounts have been rounded to the nearest DKK million, unless
otherwise indicated.
Assets and liabilities are presented in the balance sheet according to a current/non-current classification.
The accounting policies for the financial statements of the Parent Company remain unchanged from the
previous financial year.
Differences relative to the accounting policies for the consolidated financial statements
The Parent Company’s accounting policies for recognition and measurement are consistent with the
accounting policies for the consolidated financial statements with the exceptions stated below. For a description
of the accounting policies of the Group, please refer to the consolidated financial statements.
Statement of profit or loss
Income from investments in subsidiaries
Income from investments in subsidiaries includes dividends from subsidiaries, which are recognized in the
Parent Company’s statement of profit or loss when the Parent Company’s right to receive such dividends has
been approved. Further, income from investments in subsidiaries includes proceeds from liquidation of
subsidiaries and any impairment losses or reversals of impairment losses on investments in subsidiaries.
Exchange gains/losses
Exchange gains/losses on translation of receivables from and payables to subsidiaries that are considered part
of the overall investment in subsidiaries are recognized in profit or loss under financial income or financial
expenses.
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 recognized in profit or loss under financial income or financial expenses.
Statement of financial position
Investments in subsidiaries
Investments in subsidiaries are measured at cost in the Parent Company’s financial statements. Where the
recoverable amount of the investments is lower than cost, the investments are written down to this lower value.
In addition, cost is written down to the extent that dividends distributed exceed the accumulated earnings in
the subsidiary since the acquisition date.
Other financial assets
On initial recognition, investments are measured at cost, corresponding to fair value plus directly attributable
costs. Subsequently, they are measured at fair value at the balance sheet date. Any fair value adjustments on
equity investments recognized in other comprehensive income in the consolidated financial statements are
recognized under financial income or financial expenses in the Parent Company’s statement of profit or loss.
Statement of changes in equity
Pursuant to the Danish Financial Statements Act, entries recognized in the statement of comprehensive
income in the consolidated financial statements are recognized directly in the statement of changes in equity
in the Parent Company’s financial statements, except for entries concerning exchange gains/losses on
translation of receivables from and payables to subsidiaries, entries providing an effective hedge against
foreign exchange gains/losses on the net investment and entries concerning other financial assets.
Statement of cash flows
In accordance with the exemption clause in section 86(4) of the Danish Financial Statements Act, no separate
statement of cash flows has been prepared for the Parent Company as it is included in the consolidated
statement of cash flows.
Notes 18-20
101
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
Management Statement
Management Statement
REGISTERED EXECUTIVE MANAGEMENT
BOARD OF DIRECTORS
Employee representative
Employee representative
Employee representative
102
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
Independent Auditor’s Reports
Report on the audit of
the financial statements
Our opinion
Basis for opinion
Key audit matters
Independent Auditor’s Reports
103
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
Independent Auditor’s Reports
Continued
104
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
Statement on Management review
Management’s responsibilities for the financial
statements
Auditor’s responsibilities for the audit of the
financial statements
Independent Auditor’s Reports
Continued
105
Lundbeck Annual Report 2022
Management Review Consolidated Financial Statements Financial Statements of the Parent Company
Report on compliance with the
ESEF Regulation
Independent Auditor’s Reports
Continued
CVR no. 3 3 7 7 12 31
State Authorized Public Accountant
106
Lundbeck Annual Report 2022
Management Review 2022 in Brief Our Business Governance Financial Statements
Core Reconciliation
Core Reconciliation
(part of Management Review – not audited)
As a general rule, Lundbeck adjusts for amortization of
product rights and for each non-recurring item that
Management deems exceptional and/or 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 relating to settlement of
litigations, government investigations and other
disputes
• Income from settlement of litigations and other disputes
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
Core results
DKKm
DKKm
DKKm
DKKm
DKKm
DKKm
DKKm
DKKm
1 January - 31 December 2022
Revenue
18,246
-
-
-
-
-
-
18,246
Cost of sales
3,951
(1,371)
-
-
-
-
-
2,580
Gross profit
14,295
1,371
-
-
-
-
-
15,666
Sales and distribution costs
6,610
-
-
126
-
-
-
6,736
Administrative expenses
1,079
-
-
7
-
(70)
-
1,016
Research and development costs
3,754
-
-
5
-
-
-
3,759
Profit from operations (EBIT)
2,852
1,371
-
(138)
-
70
-
4,155
Net financials, expenses
378
-
-
-
-
-
(278)
100
Profit before tax
2,474
1,371
-
(138)
-
70
(278)
4,055
Tax on profit for the year
558
315
-
(30)
-
15
-
858
Profit for the year
1,916
1,056
-
(108)
-
55
(278)
3,197
Earnings per share, basic (EPS) (DKK)
1.93
1.06
-
(0.11)
-
0.06
0.28
3.22
107
Lundbeck Annual Report 2022
Management Review 2022 in Brief Our Business Governance Financial Statements
Core Reconciliation
(part of Management Review – not audited)
Continued
Divestments/milestones, including:
• Income/expenses from discontinued operations
• Gains/losses on divestments of assets
• Received or expensed upfront sales and development
milestones
The adjusted core result is taxed at the underlying
corporate tax rate.
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
Core results
DKKm
DKKm
DKKm
DKKm
DKKm
DKKm
DKKm
DKKm
1 January - 31 December 2021
Revenue
16,299
-
-
-
-
-
-
16,299
Cost of sales
3,648
(1,274)
-
(37)
-
-
-
2,337
Gross profit
12,651
1,274
-
37
-
-
-
13,962
Sales and distribution costs
5,885
-
-
(162)
-
-
-
5,723
Administrative expenses
933
-
-
(31)
-
-
-
902
Research and development costs
3,823
-
-
(3)
-
-
-
3,820
Profit from operations (EBIT)
2,010
1,274
-
233
-
-
-
3,517
Net financials, expenses
429
-
-
-
-
-
-
429
Profit before tax
1,581
1,274
-
233
-
-
-
3,088
Tax on profit for the year
263
276
-
51
-
-
-
590
Profit for the year
1,318
998
-
182
-
-
-
2,498
Earnings per share, basic (EPS) (DKK)
1.33
1.00
-
0.18
-
-
-
2.51
108
Lundbeck Annual Report 2022
Management Review 2022 in Brief Our Business Governance Financial Statements
Lundbeck Annual Report 2022
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