CORPORATE RELEASE
MAY 10, 2023
Corporate Release No 741/2023
Financial report for the period January 1 to March 31, 2023
Lundbeck’s sales increased by 15% (+11% at constant exchange
rates) to DKK 5 billion in the first quarter of 2023
Key highlights
Lundbeck’s sales increased by 15% (+11% CER
1
) to DKK 5,044 million, with all regions growing and the U.S. and
Europe contributing strongly
• United States: DKK 2,337 million (+22%; +16% CER)
• International Markets: DKK 1,499 million (+3%; +3% CER)
• Europe: DKK 1,174 million (+15%; +14% CER)
The growth of Lundbeck’s strategic brands grew further with an increase of 23% (+19% CER), reaching DKK
3,273 million, representing 65% of total revenue
• Brintellix
®
/Trintellix
®
: DKK 1,077 million (+9%; +7% CER)
• Rexulti
®
/Rxulti
®
: DKK 1,060 million (+28%; +22% CER)
• Abilify Maintena
®
: DKK 785 million (+16%; +14% CER)
• Vyepti
®
: DKK 351 million (+106%; +97% CER)
Adjusted EBITDA
2
increased to DKK 1,845 million (+43%; +39% CER) and adjusted EBITDA margin reached
36.6% equivalent to an increase of 7.1 percentage points. Adjusted earnings per share (EPS) reached DKK 1.36
equivalent to an increase of 33%.
In connection with the corporate release, Lundbeck’s President and CEO, Deborah Dunsire said:
“I am very pleased with our operational performance in the first quarter. Lundbeck continues to show excellent
growth driven by our strategic brands also driving profitability in the quarter. In the first quarter of 2023, Lundbeck
delivered the highest quarterly revenue ever. I am delighted with the impact of our R&D transformation, delivering
a positive Advisory committee vote for Rexulti in AAD, the on-time FDA approval for Abilify Asimtufii and the
positive proof of concept for our novel PACAP-inhibitor.”
Key figures:
* Revenue change at CER does not include effects from hedging.
** 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.
1
Constant Exchange Rates (CER) previously denominated Local Currencies (LC).
2
EBITDA refers to Earnings Before Interest, Taxes, Depreciation and Amortization. Adjusted EBITDA is defined as EBITDA adjusted by certain items, for details see
section 4 Notes, note 3 Adjusted EBITDA.
DKK million
Q1 2023
Q1 2022
Change
Change
(CER)
Revenue
5,044
4,372
15%
11%*
EBITDA
1,744
1,290
35%
31%
Adjusted EBITDA
1,845
1,290
43%
39%
EPS (DKK)
**
0.89
0.41
117%
Adjusted EPS (DKK)
1.36
1.02
33%
FINANCIAL REPORT FOR THE PERIOD JANUARY 1 TO MARCH 31, 2023 Page 2
Corporate Release No 741/2023
Recent events
On April 27, 2023, Lundbeck and Otsuka Pharmaceutical, Inc. (Otsuka) announced that FDA has approved the
New Drug Application (NDA) for Abilify Asimtufii
®
(aripiprazole) extended-release injectable suspension for
intramuscular use, a once-every-two-months injection for the treatment of schizophrenia in adults or for
maintenance monotherapy treatment of bipolar I disorder in adults. Abilify Asimtufii offers two months of sustained
therapeutic concentrations with one dose.
On April 16, 2023, Lundbeck and Otsuka announced that the Joint Meeting of the Psychopharmacologic Drugs
Advisory Committee and the Peripheral and Central Nervous System Drugs Advisory Committee of the U.S. Food
and Drug Administration (FDA) met to discuss the supplemental New Drug Application (sNDA) of brexpiprazole
for the treatment of agitation associated with dementia due to Alzheimer’s disease. The committees voted
9-1 that Otsuka and Lundbeck provided sufficient data to allow the identification of a population in whom the
benefits of treating agitation associated with dementia due to Alzheimer’s disease with brexpiprazole outweigh its
risks. If approved, brexpiprazole would be the first FDA-approved treatment indicated for the treatment of agitation
associated with dementia due to Alzheimer’s disease in the U.S. The FDA will address the feedback from the
committee as it reviews the sNDA for brexpiprazole in advance of the May 10, 2023 Prescription Drug User Fee
Act (PDUFA) target action date.
On April 19, 2023, Lundbeck announced headline results from the HOPE trial with the anti-PACAP (“`222”). ‘222
met its primary endpoint in migraine prevention; patients treated with this monoclonal antibody, had a statistically
significantly greater reduction vs. placebo in the number of monthly migraine days from baseline to week 4 of
treatment. The efficacy was consistent across multiple endpoints and ´222 was well tolerated by the patients at
the doses tested. The elimination of PACAP with ‘222 and thereby the interruption of its downstream signaling via
a set of receptors, represents a new therapeutic possibility. The mode of action is distinct from the calcitonin gene-
related peptide (CGRP) biology, which is targeted by the recently available migraine treatment drug class.
2023 Guidance
On February 7, 2023, Lundbeck communicated the financial guidance for 2023 focusing on revenue performance
and, from the first quarter of 2023 and onwards, on adjusted EBITDA.
Lundbeck maintains its full year guidance for 2023; however, in order to reflect this change, the guidance has
been updated to incorporate the adjusted EBITDA measure replacing the previous EBITDA measure.
• Revenue expected at DKK 19.4 – 20.0 billion
• Adjusted EBITDA expected at DKK 5.1 – 5.5 billion (previous EBITDA expected at DKK 4.8 – 5.2 billion)
The previously communicated expected provision of approximately DKK 300 million for Vyepti inventory
obsolescence is reflected in the Adjusted EBITDA guidance for 2023. Of the total expected provision, DKK 101
million has been recognized in the first quarter of 2023.
FINANCIAL REPORT FOR THE PERIOD JANUARY 1 TO MARCH 31, 2023 Page 3
Corporate Release No 741/2023
CONTENT
1 Financial highlights .............................................................................................................. 4
2 Business performance ........................................................................................................ 5
2.1 Revenue by product ..................................................................................................... 5
2.2 Revenue by geographical area ..................................................................................... 6
2.3 Gross profit ................................................................................................................... 7
2.4 EBIT and adjusted EBITDA .......................................................................................... 8
2.5 Net profit and Adjusted EPS ......................................................................................... 9
2.6 Cash flow and balance sheet........................................................................................ 9
2.7 Outlook ....................................................................................................................... 10
2.8 Lundbeck’s development portfolio .............................................................................. 11
2.9 Sustainability update .................................................................................................. 15
2.10 General corporate matters ........................................................................................ 17
3 Condensed financial statements ....................................................................................... 21
4 Notes ................................................................................................................................ 26
Financial calendar 2023 ....................................................................................................... 28
FINANCIAL REPORT FOR THE PERIOD JANUARY 1 TO MARCH 31, 2023 Page 4
Corporate Release No 741/2023
1 FINANCIAL HIGHLIGHTS
For the three months ended March 31
DKK million
Q1 2023
Q1 2022
Change
Change
(CER)
Revenue
5,044
4,372
15%
11%
1
Gross profit
4,003
3,527
13%
11%
Gross margin
79.4%
80.7%
Adjusted gross profit
2
4,568
3,895
17%
15%
Adjusted gross margin
90.6%
89.1%
Sales and distribution costs
1,673
1,435
17%
15%
S&D ratio
33.2%
32.8%
Administrative expenses
258
236
9%
8%
Administrative expenses ratio
5.1%
5.4%
Research and development costs
839
981
(14%)
(15%)
R&D ratio
16.6%
22.4%
EBIT (profit from operations)
1,233
875
41%
35%
EBIT margin
24.4%
20.0%
EBITDA
3
1,744
1,290
35%
31%
EBITDA margin
34.6%
29.5%
Adjusted EBITDA
4
1,845
1,290
43%
39%
Adjusted EBITDA margin
36.6%
29.5%
Net financials, expenses
83
347
(76%)
Profit before tax
1,150
528
118%
Income taxes
270
116
133%
Effective tax rate (reported)
23.5%
22.0%
Net profit
880
412
114%
Adjusted net profit
1,355
1,009
34%
Other key numbers
Assets
36,624
35,071
4%
Equity
20,980
18,446
14%
Cash flows from operating and investing activities
(free cash flow)
301
(1,368)
(122%)
Net cash flow for the period
(654)
(699)
(6%)
Return on invested capital – rolling four quarters
10.5%
7.4%
Net debt/EBITDA – rolling four quarters
0.5
1.4
(64%)
Number of shares for the calculation of EPS (millions)
5
993.0
993.4
Earnings per share, basic (EPS) (DKK)
4
0.89
0.41
117%
Adjusted earnings per share, basic (DKK)
1.36
1.02
33%
1 Revenue change at CER does not include effects from hedging.
2 Adjusted gross profit is the gross profit excluding depreciation and amortization and other adjustments linked to sales.
3 EBITDA refers to Earnings Before Interest, Taxes, Depreciation and Amortization.
4 Adjusted EBITDA is defined as EBITDA adjusted by certain items. For details see note 3 Adjusted EBITDA.
5 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.
FINANCIAL REPORT FOR THE PERIOD JANUARY 1 TO MARCH 31, 2023 Page 5
Corporate Release No 741/2023
2 BUSINESS PERFORMANCE
2.1 REVENUE BY PRODUCT
Revenue reached DKK 5,044 million representing a
growth of 15% (+11% CER). The revenue growth is
primarily driven by strong performance of the
strategic brands (Abilify Maintena, Brintellix/
Trintellix, Rexulti/Rxulti and Vyepti) reaching DKK
3,273 million, representing a growth of 23% (+19%
CER) and equivalent to 65% of total revenue. The
largest markets for the strategic brands are the U.S.,
Canada, Spain, Italy and Australia.
For the three months ended March 31
DKK million
Q1 2023
Q1 2022
Growth
Growth
(CER)
Brintellix/Trintellix
1,077
990
9%
7%
Rexulti
1,060
831
28%
22%
Abilify Maintena
785
677
16%
14%
Vyepti
351
170
106%
97%
Strategic brands
3,273
2,668
23%
19%
Cipralex/Lexapro
664
682
(3%)
(3%)
Sabril
110
152
(28%)
(31%)
Other pharmaceuticals
963
894
8%
6%
Mature brands
1,737
1,728
1%
(1%)
Other revenue
63
65
(3%)
(5%)
Total revenue before hedging
5,073
4,461
14%
11%
Effects from hedging
(29)
(89)
Total revenue
5,044
4,372
15%
11%
Strategic brands
Brintellix/Trintellix (vortioxetine) is approved for the
treatment of major depressive disorder (MDD). Sales
reached DKK 1,077 million representing a growth of
9% (+7% CER) following a continued robust demand
in markets outside the U.S. International Markets
were slightly impacted by inventory fluctuations in
China. In Europe, Brintellix is showing strong growth
in Spain. In the U.S., Trintellix is still facing some
competitive pressure, however, new-to-brand
prescriptions (NBRx) have reversed a negative trend
and are starting to show growth. The regional
distribution of sales was 31%, 34% and 35% in the
U.S., International Markets and Europe, respectively.
The largest markets for the product are the U.S.,
Canada, Spain, Italy and Brazil.
Rexulti/Rxulti (brexpiprazole) is approved as an
adjunctive therapy for the treatment of adults with
MDD and as a treatment for adults with schizophrenia
in markets such as the U.S., Canada, Brazil and
Saudi Arabia. In Australia and Europe, the product is
approved only for schizophrenia. Sales reached DKK
1,060 million representing a growth of 28% (+22%
CER) mainly driven by demand. The regional
distribution of sales was 92%, 7% and 1% in the U.S.,
International Markets and Europe, respectively. The
largest markets are the U.S., Brazil, Canada,
Australia and Saudi Arabia.
Abilify Maintena (aripiprazole once-monthly
injection) is approved for the treatment of
schizophrenia in the EU and for both schizophrenia
and bipolar I disorder in the U.S., Canada and
Australia. Sales reached DKK 785 million
representing a growth of 16% (+14% CER) mainly
driven by demand. The regional distribution of sales
was 36%, 19% and 45% in the U.S., International
Markets and Europe, respectively. The largest
markets are the U.S., Spain, Canada, Australia and
Italy.
Vyepti (eptinezumab) is approved as preventive
treatment of migraine in adults and it doubled in sales
compared to the same period last year and reached
DKK 351 million following a growth of 106% (+97%
CER) driven by strong demand. The regional
distribution of sales was 94%, 3% and 3% in the U.S.,
FINANCIAL REPORT FOR THE PERIOD JANUARY 1 TO MARCH 31, 2023 Page 6
Corporate Release No 741/2023
International Markets and Europe, respectively. The
product is approved in around 45 markets including
the U.S., Australia, Canada and Europe for the
preventive treatment of migraine in adults. Vyepti was
launched in April 2020 in the U.S. and has since been
launched in around 15 markets and the majority of
those happening recently including Germany, France
and the UK. The largest markets are the U.S., U.A.E.,
Germany, Switzerland and U.K. In 2023, Vyepti is
expected to be launched in around 10 additional
markets.
Mature brands
Cipralex
®
/Lexapro
®
(escitalopram) is approved for
the treatment of MDD. Sales reached DKK 664
million representing a decline of 3% (-3% CER). The
regional distribution of sales was 72% and 28% in
International Markets and Europe, respectively. The
largest markets are China, Saudi Arabia, Brazil,
Japan and South Korea.
Revenue from Other pharmaceuticals, which
comprise the remainder of Lundbeck’s products,
reached DKK 963 million representing a growth of 8%
(+6% CER) following lower sales of mature products
such as Northera. As of January 1, 2023, Onfi is
being reported together with Other pharmaceuticals,
comparative figures for 2022 have been adjusted
accordingly. The largest markets for Other
pharmaceuticals are China, the U.S., France and
South Korea.
2.2 REVENUE BY GEOGRAPHICAL AREA
For the three months ended March 31
DKK million
Q1 2023
Q1 2022
Growth
Growth
(CER)
United States
Rexulti
979
774
26%
20%
Trintellix
338
349
(3%)
(7%)
Vyepti
328
167
96%
87%
Abilify Maintena
282
232
22%
16%
Strategic brands
1,927
1,522
27%
21%
Mature brands
410
396
4%
(1%)
Revenue – United States
2,337
1,918
22%
16%
International Markets
Brintellix
368
340
8%
9%
Abilify Maintena
148
118
25%
25%
Rexulti
68
46
48%
43%
Vyepti
11
3
267%
267%
Strategic brands
595
507
17%
17%
Mature brands
904
949
(5%)
(4%)
Revenue – International Markets
1,499
1,456
3%
3%
Europe
Brintellix
371
301
23%
22%
Abilify Maintena
355
327
9%
9%
Rexulti/Rxulti
13
11
18%
18%
Vyepti
12
-
-
-
Strategic brands
751
639
18%
17%
Mature brands
423
383
10%
8%
Revenue - Europe
1,174
1,022
15%
14%
Total revenue before hedging
5,073
4,461
14%
11%
Effects from hedging
(29)
(89)
Total revenue
5,044
4,372
15%
11%
FINANCIAL REPORT FOR THE PERIOD JANUARY 1 TO MARCH 31, 2023 Page 7
Corporate Release No 741/2023
Lundbeck’s largest markets are the U.S., China,
Canada, Italy and Spain. For strategic brands,
Lundbeck largest markets are the U.S., Canada,
Spain, Italy and Australia.
United States revenue reached DKK 2,337 million
representing a growth of 22% (+16% CER). The
strategic brands reached DKK 1,927 million
increasing by 27% (+21% CER) or 82% of revenue.
The sales growth was driven by strong demand for
Rexulti and Vyepti and positively impacted by the
appreciation of the USD.
International Markets comprise all Lundbeck’s
markets outside the U.S. and Europe. Revenue
reached DKK 1,499 million representing a growth of
3% (+3% CER) driven by all four strategic brands
offsetting the erosion of the mature brands. Lexapro
in Japan is negatively impacted by the entry of
generic versions at the end of 2022. The biggest
markets are China, Canada, Brazil, Saudi Arabia and
Australia. China and Japan constitute approximately
31% of regional revenue. The strategic brands
reached DKK 595 million increasing by 17% (+17%
CER) or 40% of revenue.
Revenue in Europe reached DKK 1,174 million
representing a growth of 15% (+14% CER). The
strategic brands reached DKK 751 million increasing
by 18% (+17% CER) or 64% of revenue. In general,
Europe continues to realize robust underlying
demand countering a continuous negative average
price development and continued generic erosion of
the mature product portfolio. The largest markets in
Europe are Spain, Italy and France.
Lundbeck hedges a significant part of the currency
risk for a period of 12 - 18 months. Hedging had a
minor negative impact of DKK 29 million in the first
quarter of 2023, compared to a negative impact of
DKK 89 million in the same period last year. Effects
from hedging are not included in the CER calculation.
2.3 GROSS PROFIT
For the three months ended March 31
DKK million
Q1 2023
Q1 2022
Change
Change
(CER)
Revenue
5,044
4,372
15%
11%
Cost of sales
1,041
845
23%
23%
thereof adjustments
101
-
-
-
thereof amortization of product rights
404
309
31%
28%
thereof depreciation/amortization
60
59
2%
2%
Gross profit
4,003
3,527
13%
11%
Gross margin (%)
79.4%
80.7%
Adjusted gross profit
4,568
3,895
17%
15%
Adjusted gross margin (%)
90.6%
89.1%
In the first quarter of 2023, gross profit reached DKK
4,003 million increasing by 13% (+11% CER). The
gross margin was 79.4% representing a decline of
1.3 percentage point.
Adjusted gross profit is the gross profit excluding
depreciation and amortization and other adjustments
linked to sales. Adjusted gross margin was 90.6% in
the first quarter of 2023 representing an increase of
1.5 percentage point.
Cost of sales increased to DKK 1,041 million, driven
by higher revenue, impact from increased Vyepti
amortization and provision for Vyepti inventory
obsolescence of DKK 101 million recognized in the
first quarter of 2023.
Amortization of product rights was DKK 404 million in
the period, increasing by 31% (+28% CER).
FINANCIAL REPORT FOR THE PERIOD JANUARY 1 TO MARCH 31, 2023 Page 8
Corporate Release No 741/2023
2.4 EBIT AND ADJUSTED EBITDA
For the three months ended March 31
DKK million
Q1 2023
Q1 2022
Change
Change
(CER)
Revenue
5,044
4,372
15%
11%
Gross profit
4,003
3,527
13%
11%
thereof adjustments
101
-
-
-
thereof depreciation/amortization
464
368
26%
24%
Sales and distribution costs
1,673
1,435
17%
15%
thereof depreciation/amortization
24
23
4%
4%
S&D-ratio
33.2%
32.8%
Administrative expenses
258
236
9%
8%
thereof depreciation/amortization
5
4
25%
25%
Administrative expenses ratio
5.1%
5.4%
Research and development costs
839
981
(14%)
(15%)
thereof depreciation/amortization
18
20
(10%)
(10%)
R&D-ratio
16.6%
22.4%
Total operating expenses
2,770
2,652
4%
3%
OPEX-ratio
54.9%
60.7%
EBIT (profit from operations)
1,233
875
41%
35%
Depreciation/amortization
511
415
23%
21%
EBITDA
1,744
1,290
35%
31%
EBITDA margin (%)
34.6%
29.5%
Other adjustments
101
-
-
-
Adjusted EBITDA
1,845
1,290
43%
39%
Adjusted EBITDA margin (%)
36.6%
29.5%
Total operating expenses (OPEX) reached DKK
2,770 million corresponding to an increase of 4%
(+3% CER) mainly driven by higher sales and
distribution costs offset by lower R&D costs. OPEX-
ratio declined 5.8 percentage point.
Sales and distribution costs reached DKK 1,673
million corresponding to an increase of 17% (+15%
CER) driven by an increasing activity level especially
for Vyepti launch preparation and cost related to the
expected launch of brexpiprazole for the treatment of
agitation associated with dementia due to
Alzheimer’s disease in the U.S.
Sales and distribution costs corresponded to 33.2%
of revenue in the first quarter of 2023, representing
an increase of 0.4 percentage point.
Administrative expenses reached DKK 258 million
increasing by 9% (+8% CER) corresponding to 5.1%
of total revenue.
Research and development costs reached DKK
839 million with a R&D ratio of 16.6%. The decline in
R&D costs of 14% (-15% CER) was driven by lower
project costs related to the completion of phase IV
studies on marketed products such as
Brintellix/Trintellix as well as the AAD phase III
program for Rexulti.
EBIT reached DKK 1,233 million increasing by 41%
(+35% CER) reflecting higher revenue, lower OPEX-
ratio and the Vyepti provision for obsolescence.
Amortization of product rights amounted to DKK
404 million corresponding to an increase of 31%
(+28% CER). Total amortization, depreciation and
impairment losses reached DKK 511 million
representing an increase of 23% (+21% CER) driven
mainly by an increase in Vyepti amortization.
Adjusted EBITDA reached DKK 1,845 million
representing a growth of 43% (+39% CER) reflecting
higher revenue and lower OPEX-ratio.
FINANCIAL REPORT FOR THE PERIOD JANUARY 1 TO MARCH 31, 2023 Page 9
Corporate Release No 741/2023
2.5 NET PROFIT AND ADJUSTED EPS
For the three months ended March 31
DKK million
Q1 2023
Q1 2022
Change
EBIT (profit from operations)
1,233
875
41%
Net financials, expenses
83
347
(76%)
Profit before tax
1,150
528
118%
Net profit
880
412
114%
thereof other adjustments
101
-
-
thereof depreciation/amortization
511
415
23%
thereof adjustments on financial items
-
278
-
thereof tax on adjustments
137
96
43%
Adjusted net profit
1,355
1,009
34%
Adjusted EPS (DKK)*
1.36
1.02
33%
* 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.
Net profit
Net financial expenses reached DKK 83 million
equivalent to a decline of 76%. The first quarter of
2022 was impacted by the Vyepti EMA approval
which triggered a fair value adjustment of contingent
consideration of CVR to former Alder shareholders
amounting to DKK 278 million.
The effective tax rate for the first quarter of 2023
was 23.5%. The tax rate is in line with the full year
expectation, reflecting the reduced deduction from
the Danish research & development incentive of
108% (130% in 2022).
Net profit reached DKK 880 million corresponding to
a growth of 114%.
Adjusted net profit and EPS
Adjusted net profit is the net profit excluding
depreciation and amortization and other adjustments,
net of taxes. Adjusted net profit reached DKK 1,355
million, representing an increase of 34%. The
adjustments mainly relate to the amortization of
product rights, provision for Vyepti inventory
obsolescence and the fair value adjustment of
contingent consideration of CVR. Adjusted EPS was
DKK 1.36 increasing by 33%.
2.6 CASH FLOW AND BALANCE SHEET
Cash flows from operating activities amounted to
an inflow of DKK 378 million compared to an outflow
of DKK 205 million in the first quarter of 2022. The
positive development is primarily driven by higher
sales in 2023 and 2022 being negatively impacted by
the Vyepti EMA approval CVR.
Lundbeck’s net cash flows from investing
activities were an outflow of DKK 77 million
compared to an outflow of DKK 1,163 million in the
first quarter of 2022. The impact is mainly driven by
the CVR payment triggered by the EMA approval of
Vyepti in the first quarter of 2022.
Lundbeck’s net cash flows from financing
activities were an outflow of DKK 955 million
compared to an inflow of DKK 669 million in the first
quarter of 2022. The financing cash flows in 2023
mainly relate to a dividend payment of DKK 576
million which was approved at the Annual General
Meeting in March 2023 as well as repayment of
debts. The first quarter of 2022 was impacted by a
FINANCIAL REPORT FOR THE PERIOD JANUARY 1 TO MARCH 31, 2023 Page 10
Corporate Release No 741/2023
drawdown on a loan to pay the CVR following the
Vyepti EMA approval.
In the first quarter of 2023, the net cash outflow
reached DKK 654 million compared to an outflow of
DKK 699 million in the first quarter of 2022.
Net debt has decreased from DKK 5,003 million at
the end of March 2022 to DKK 2,491 million at the
end of March 2023. Interest-bearing debt was DKK
5,373 million at the end of March 2023 compared to
DKK 6,617 million at the end of March 2022.
At March 31, 2023, Lundbeck’s total assets
amounted to DKK 36,624 million compared to DKK
37,452 million at the end of 2022.
At March 31, 2023, Lundbeck's equity amounted to
DKK 20,980 million.
2.7 OUTLOOK
Financial guidance 2023 updated
On February 7, 2023, Lundbeck communicated the
financial guidance for 2023 focusing on revenue
performance and, from the first quarter of 2023 and
onwards on adjusted EBITDA.
Lundbeck continues to expect strong growth for its
strategic brands despite continued pricing pressure
and loss of exclusivity (LoE) in some geographies.
Lundbeck maintains its full year guidance for 2023;
however, in order to reflect this change, the guidance
has been updated to incorporate the adjusted
EBITDA measure replacing the previous EBITDA
measure. The previously communicated expected
provision of approximately DKK 300 million for Vyepti
inventory obsolescence was reflected in the EBITDA
guidance for 2023. Of the total expected provision,
DKK 101 million has been recognized in the first
quarter of 2023.
In the remainder of 2023, Lundbeck will continue the
global roll-out of Vyepti with approximately 10
launches. Additionally, Lundbeck plans to launch
Abilify Asimtufii which was approved on April 27,
2023. Furthermore, Lundbeck plans to launch
brexpiprazole for the significant unmet need for
patients suffering from agitation associated with
dementia due to Alzheimer’s disease, pending
approval May 10, 2023 (PDUFA target action date).
The financial guidance for 2023 reflects the
investments needed in these important launches
driving significant future growth. Therefore, the SG&A
costs are expected to increase due to the launches.
The R&D costs are expected to be broadly stable
compared to 2022. Lundbeck continues to expect
strong growth for its strategic brands despite
continued pricing pressure and loss of exclusivity
(LoE) in some geographies.
Inflation is expected to have a higher impact on 2023
than seen in 2022.
Lundbeck mainly carries foreign currency risk in USD,
CNY and CAD. The financial guidance for 2023 is
maintained on the exchange rates at the end of
March 2023. The financial guidance for 2023 is also
based on current hedging rates for the main
currencies, i.e. USD/DKK (7.11), CNY/DKK (1.02)
and CAD/DKK (5.24) and includes an expected
hedging gain of approximately DKK 130 million.
Based on assumptions for product and geographical
mix, it is estimated that a 5% change of the USD/DKK
exchange rate will impact revenue by approximately
DKK 300 million.
FINANCIAL REPORT FOR THE PERIOD JANUARY 1 TO MARCH 31, 2023 Page 11
Corporate Release No 741/2023
Financial guidance
FY 2022 actual
Former 2023 guidance
Updated 2023 guidance
Revenue
DKK 18,246 million
DKK 19.4 - 20.0 billion
DKK 19.4 - 20.0 billion
Adjusted EBITDA
DKK 4,823 million
-
DKK 5.1 - 5.5 billion
EBITDA
DKK 4,663 million
DKK 4.8 - 5.2 billion
-
Mid-term targets are confirmed
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 in 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, (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 Adjusted
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, including interest rates and exchange rate
fluctuations, delay or failure of development projects,
production problems, unexpected contract breaches
or terminations, governance-mandated or market-
driven price decreases for products, introduction of
competing products, Lundbeck’s ability to
successfully market both new and existing products,
exposure to product liability and other lawsuits,
changes in reimbursement rules and governmental
laws, and unexpected growth in expenses.
2.8 LUNDBECK’S DEVELOPMENT PORTFOLIO
Lundbeck is developing several new and promising
medicines for the treatment of brain diseases.
Pipeline developments are summarized below.
1) CGRP: Calcitonin gene-related peptide. 2) Two phase III clinical trials, supporting registration in Asia, including China and Japan: SUNRISE, and SUNSET trials. 3) Long-
term safety study. 4) PACAP: Pituitary adenylate cyclase activating peptide. 5) Adrenocorticotropic hormone. 6) Acts as a partial agonist at 5-HT
1A
and dopamine D
2
receptors
at similar potency, and an antagonist at 5-HT
2A
and noradrenaline alpha
1B/2C
receptors. 7) Monoacylglycerol lipase inhibitor (“MAGlipase”).
Project
Area
Phase I
Phase II
Phase III
Filing/
Launch
Hormonal / neuropeptide signaling:
Eptinezumab (anti-CGRP)
1)
Migraine prevention
SUN-studies
2)
PROMISE 1 & 2
Cluster headache
CHRONICLE
3)
ALLEVIATE
‘222/Lu AG09222 (anti-PACAP mAb)
4)
Migraine prevention
HOPE
‘909/Lu AG13909 (anti-ACTH mAb)
5)
Neuro-hormonal dysfunctions
Circuitry / neuronal biology:
Brexpiprazole
6)
Agitation in Alzheimer’s disease
PTSD
Aripiprazole 2-months injectable
Schizophrenia/bipolar I disorder
‘466/Lu AG06466
7)
PTSD
’996/Lu AF28996 (D
1
/D
2
agonist)
Parkinson’s disease
Protein aggregation, folding and clearance:
’422/Lu AF82422 (anti-α-synuclein mAb)
Multiple system atrophy
AMULET
’908/Lu AF87908 (anti-Tau mAb)
Tauopathies
Neuroinflammation / neuroimmunology:
‘151/Lu AG22151 (anti-CD40L blocker)
Neurology
FINANCIAL REPORT FOR THE PERIOD JANUARY 1 TO MARCH 31, 2023 Page 12
Corporate Release No 741/2023
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 plays 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 EU, and is currently under regulatory
review in additional countries.
To enable expansion into Asia, the SUN-trials
(NCT04921384, NCT05064371) are ongoing.
The SUNRISE trial (NCT04921384) evaluates the
efficacy of eptinezumab to prevent migraine and
headache in patients with chronic migraine. This
study forms the base case for Asian approval across
Japan, China and Korea. Patients will be randomly
allocated to placebo or two treatment groups:
eptinezumab 100 mg or 300 mg given by IV infusion
(n=513). The total study duration is either
approximately 36 weeks, including screening period
and safety follow-up; or 24 weeks for patients in
Japan that enter a separate open label extension trial,
the SUNSET trial (NCT05064371). The SUNSET
study will enroll approximately 100 patients with a
total study duration of approximately 68 weeks.
Lundbeck is planning to expand the indication for
eptinezumab to include treatment of episodic cluster
headache (eCH) and is currently conducting a clinical
development program for this indication.
In December 2020, Lundbeck initiated a phase III
clinical study investigating the efficacy of
eptinezumab in patients with episodic cluster
headache (ALLEVIATE). The study (NCT04688775)
is planned to recruit around 300 patients that will be
randomly assigned to receive treatment consisting of
two infusions of either eptinezumab or placebo in a
cross-over manner. The total duration of the study is
24 weeks, including a safety follow up period of 8
weeks. During 2021, Lundbeck further initiated a one-
year safety and tolerability trial in participants with
chronic cluster headache (CHRONICLE). The study
(NCT05064397) recently completed recruitment.
Also, in 2022, Lundbeck initiated a phase IV study
investigating the add-on efficacy of eptinezumab
treatment to brief educational intervention, for the
preventive treatment of migraine in patients with a
dual diagnosis of migraine and medication overuse
headache (RESOLUTION). The study
(NCT05452239) is planned to recruit around 570
patients that will be randomly assigned to receive
either eptinezumab 100mg or placebo given by IV
infusion. The total study duration is approximately 36
weeks including screening period and safety follow-
up.
Lu AG09222 (‘222) – phase II
’222 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, ’222 has shown to bind
with high affinity to PACAP, thereby preventing
PACAP from activating its receptors.
In 2021, Lundbeck completed a study confirming the
target engagement of ’222 with PACAP
(NCT04976309). In this study, the preventive effect
of ’222 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 ’222 as a treatment for the
prevention of migraine (NCT05133323) which
recently reported results. The target population for
this trial was defined as patients diagnosed with
migraine as outlined in the International Classification
FINANCIAL REPORT FOR THE PERIOD JANUARY 1 TO MARCH 31, 2023 Page 13
Corporate Release No 741/2023
of Headache Disorders Third Edition (ICHD-3) and
with unsuccessful prior preventive treatments. A total
of 237 patients, recruited from specialist settings, was
randomly allocated to one of three treatment groups:
high/low dose of ’222 or placebo. The study took
place in six countries (Georgia, Poland, Czech
Republic, Slovakia, Denmark, and the U.S.). The
primary analysis concluded that there was a
statistically significant difference (p=0.01) between
’222 and placebo in the mean change from baseline
in the number of monthly migraine days over weeks
1 to 4. ‘222 was generally well tolerated.
LU AG13909 (‘909) – phase I
’909 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. ’909 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) was
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 ’909
after single and multiple doses
Circuitry / neuronal biology:
Brexpiprazole – phase III in patients with agitation
associated with dementia due to Alzheimer’s
Disease
In June 2022, Lundbeck and Otsuka Pharmaceutical
reported positive results showing reduced agitation in
patients with dementia due to Alzheimer’s disease
treated with brexpiprazole. In the study, the
improvements from baseline on the primary endpoint
of 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 brexpiprazole treatment
group and greater than that of placebo: somnolence,
nasopharyngitis, dizziness, diarrhea, urinary tract
infection, and asthenia. There was one death
observed in the 3 mg/day treatment group, assessed
by the investigator as not related to treatment.
Based on this outcome, Lundbeck and Otsuka filed a
supplemental New Drug Application (sNDA) to the
FDA in the fourth 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.
Furthermore, a sNDS with Health Canada was
accepted for review on April 12, 2023.
On April 14, 2023 a Joint Meeting of the
Psychopharmacologic Drugs Advisory Committee
and the Peripheral and Central Nervous System
Drugs Advisory Committee of FDA met to discuss the
sNDA of brexpiprazole for the treatment of agitation
associated with dementia due to Alzheimer’s
disease.
The committee voted 9-1 in favor of Lundbeck and
Otsuka having provided sufficient data to allow the
identification of a population in whom the benefits of
treating agitation associated with dementia due to AD
with brexpiprazole outweigh its risks.
The Prescription Drug User Fee Act (PDUFA) target
action date is May 10, 2023.
Brexpiprazole – phase III in Post-Traumatic
Stress Disorder (PTSD)
PTSD is a psychiatric disorder that can develop as a
response to traumatic events, such as interpersonal
violence, combat, life-threatening accidents or
natural disasters. Core features of PTSD include a
variety of symptoms, such as re-experiencing
phenomena (i.e., flashbacks and nightmares),
avoidance behavior, numbing (i.e., amnesia,
FINANCIAL REPORT FOR THE PERIOD JANUARY 1 TO MARCH 31, 2023 Page 14
Corporate Release No 741/2023
anhedonia, withdrawal, negativism) and increased
arousal (i.e., insomnia, irritability, poor concentration,
hypervigilance). Psychiatric co-morbidities are
common, and PTSD sufferers can also present with
substance abuse, mood and other anxiety disorders,
impulsive and dangerous behavior, and self-harm.
In November 2018, Lundbeck and Otsuka reported
data from an explorative phase II study in PTSD, with
positive findings from the treatment arm that
examined a combination treatment of brexpiprazole
and sertraline. On basis of 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, subsequent
to an End of Phase II meeting with the FDA in May
2019. The execution of those two ongoing studies
was 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. Recruitment of
both studies concluded in April 2023 and headline
results are expected in the second half of 2023.
Aripiprazole – 2-Month Injectable (LAI)
formulation
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.
The study was an open-label, multiple-dose,
randomized, parallel-arm, multicenter study. In
addition to assessment of safety and tolerability, the
objective was to establish the similarity of aripiprazole
concentrations on the last day of the dosing interval
and the exposure in the last dosing interval following
the final administration of aripiprazole into the gluteal
muscle site. The study showed that the new 2-month
formulation provided effective plasma concentrations
of aripiprazole for two months, while being safe and
tolerable.
A long-acting injectable formulation ensures
continuous exposure to medication and through a
simplified treatment regimen, many of the challenges
with poor treatment adherence may be mitigated,
resulting in a potential positive impact on patient
outcomes.
The new 2-month formulation is an innovative
addition to the LAI franchise and has patent
protection until the early part of the next decade.
On April 27, 2023, Lundbeck and Otsuka announced
that the FDA has approved the New Drug Application
(NDA) for Abilify Asimtufii extended-release
injectable suspension for intramuscular use, a once-
every-two-months injection for the treatment of
schizophrenia in adults or for maintenance
monotherapy treatment of bipolar I disorder in adults.
Abilify Asimtufii offers two months of sustained
therapeutic concentrations with one dose.
Lundbeck and Otsuka submitted the Marketing
Authorisation Application (MAA) for aripiprazole as a
2-month ready-to-use (RTU) long-acting injectable
(LAI) for the maintenance treatment of schizophrenia
in adult patients stabilized with aripiprazole to the
European Medicines Agency (EMA) on May 26,
2022. Due to a CHMP procedural objection,
Lundbeck has withdrawn its MAA under the “hybrid”
procedure and intends to re-submit to EMA as soon
as possible under the “line-extension” procedure
instead. This change is procedural only, and
unrelated to product quality or safety.
The submission to Health Canada for the treatment
of schizophrenia and bipolar I disorder was submitted
in the third quarter of 2022 and Health Canada sNDS
was formally accepted for review on April 12, 2023.
Lu AG06466 (‘466) – phase Ib
’466 (formerly ABX1431) is an inhibitor of the
monoacylglycerol lipase (MAGL) and selective
modulator of the endocannabinoid system, and
thereby works to reduce excessive neuro-
transmission and neuroinflammation that are known
pathophysiological hallmarks for a range of
psychiatric and neurological disorders. Recruitment
in a phase Ib exploratory study in patients with PTSD
(NCT04597450) was finalized. This exploratory study
using biomarkers and clinical outcome measures will,
together with previous studies conducted in small
phase Ib patient populations, guide decision making
FINANCIAL REPORT FOR THE PERIOD JANUARY 1 TO MARCH 31, 2023 Page 15
Corporate Release No 741/2023
for future development of ’466 and other molecules of
the MAGL inhibitor class in the pipeline.
Lu AF28996 (‘996) – phase I
’996 is a small molecule with agonistic properties
towards D1 and D2 receptors. Continuous D1 and D2
dopamine receptor stimulation may play an important
role in motor control of Parkinson’s disease patients.
A phase Ib study was initiated in February 2020 with
the purpose to investigate the safety and tolerability
as well as pharmacokinetics of ’996 in patients with
Parkinson's disease (NCT04291859).
Protein aggregation, folding and clearance:
Lu AF82422 (‘422) – phase II
’422 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 neurodegenerative diseases such
as multiple system atrophy (MSA), Parkinson’s
disease (PD), and other synucleinopathies. By
targeting pathological alpha-synuclein with an
antibody that will inhibit aggregation and potentially
clear pathological alpha-synuclein from the brain, the
project aims to demonstrate delay of disease
progression and therapeutic effect on disease burden
and function. ’422 has been demonstrated to be well-
tolerated in a phase I single-ascending dose study,
which was completed in July 2021. A phase II study
(AMULET) was initiated in November 2021
(NCT05104476) and is presently fully accrued with
ongoing follow-up in the U.S. and Japan. The primary
objective of the study is to evaluate the efficacy of
’422 versus placebo on disease progression in
patients with MSA.
A natural history study (TALISMAN) for early MSA
patients has been initiated in China in June 2022, and
opened for recruitment in the EU (France, Germany,
Italy) in October 2022.
Orphan drug designation for MSA was granted by
EMA in April 2021 and SAKIGAKE pioneering drug
designation was granted by the Japanese Health
Authorities in March 2023.
Lu AF87908 (*908) – phase I
’908 is a monoclonal antibody (mAb) targeting the
pathological form of the hyper-phosphorylated tau
protein, which is believed to play a pivotal role in the
development and progression of Alzheimer’s disease
and other tau-driven neuro-degenerative disorders
(primary tauopathies). ’908 binds to a specific tau
epitope (pS396-tau) which is a dominating
phosphorylation site in pathological tau. A phase I
program on ’908 was initiated in September 2019 to
investigate the safety and tolerability as well as
pharmacokinetics of a single dose of ’908, in healthy
subjects and patients with Alzheimer's Disease
(NCT04149860). Trial execution has been delayed
as accrual of patients has been impacted by COVID-
19.
Neuroinflammation / neuroimmunology:
Lu AG22515 (‘515)– phase I
In October 2021, Lundbeck acquired an exclusive
license to *515 (formerly APB-A1) from AprilBio Co.
Ltd in South Korea. ’515 is a CD40L/serum-albumin
bispecific antibody-fragment that blocks the
CD40L/CD40 pathway through direct neutralization
of CD40L, thereby affecting adaptive and innate
immune responses. ’515 holds strong promise in the
treatment of a wide range of autoimmune-related
CNS disorders and neurological diseases with
autoreactive T-cells, B-cells and marked presence of
autoantibodies and inflammation. A First-in-Human
study (NCT05136053) testing single ascending
doses of ’515 in healthy volunteers was initiated in the
U.S. in March 2022.
2.9 SUSTAINABILITY UPDATE
KPIs and relevant activities
Scope 1 and 2 total GHG emissions have increased
by 2%. The increase of total GHG scope 1 and 2
emissions is primarily due to temporary challenges
with biooil supply and increased use of solvents for
Regenerative Thermal Oxidizer. Energy consumption
in the first quarter of 2023 has decreased 4.5%. This
is primarily due to less energy being used at the
production sites as a consequence of mild weather
conditions, energy efficiency improvement and
FINANCIAL REPORT FOR THE PERIOD JANUARY 1 TO MARCH 31, 2023 Page 16
Corporate Release No 741/2023
scheduled production stops. The decrease in energy
consumption has also led to a decrease in scope 2
GHG emissions. Despite the increase in total
emissions, we are confident we will remain on track
to reach our annual target.
In the first quarter of 2023, the number of work-
related accidents with absence is nine and the Lost
Time Accident Frequency is 3.8. There has been a
change in the scope of reporting in 2023 regarding
health and safety in order to include the employees in
the sales affiliates. This means our reporting includes
approximately 3,000 more employees than in 2022.
Using the previous scope, the number of work-related
accidents in the first quarter of 2023 is six and the
Lost Time Accident Frequency is 6.4, decreasing by
one work related accident with absence and a
decrease of 1.7 percentage point in frequency.
Lundbeck has received 28 Compliance hotline cases
in the first quarter of 2023, which is an increase of
75%. Of the 28 cases, 14 cases are still being
investigated, while other 14 have been closed; out of
these, seven cases are closed as substantiated, two
cases as unsubstantiated and five cases as out of
scope.
Update on PFAS soil pollution at Lumsås
Until 2011, Lundbeck used fire extinguishing foam
containing PFOS at its Lumsås facility as was the
common practice at the time, after which we switched
to an alternative fire extinguishing foam in compliance
with new regulation. PFASs are synthetic chemicals
used for production in many industrial applications
worldwide. One of the derivatives of PFASs is PFOS,
which was widely used in fire extinguishing prior to
2011.
In 2021, the Danish Environmental Protection
Agency (EPA) asked Danish companies who had
used, or could have used, PFOS to investigate
potential traces of PFOS. The Lundbeck investigation
for traces of PFOS and other PFAS derivates in the
soil at the facility was reported to EPA in 2022, and
the conclusion was that PFAS compounds were
found. The investigations have continued to
understand the magnitude of the findings. The most
recent results have been reported to the EPA in the
first quarter of 2023.
The nationwide issue with PFAS is a challenge that
is beyond Lundbeck. The Danish government
announced in January 2023 that they are working on
a national action plan regarding PFAS. Lundbeck
continues to collaborate fully and openly with the
authorities on this matter, as well as engage with
neighbors and the municipality to address concerns
in the local community.
Sustainability Key Performance Indicators
* Energy reporting is partly based on estimates.
** Scope for accidents has changed to include sales force.
Note: See Lundbeck Sustainability Report 2022 for accounting policies and definitions.
Category
Q1 2023
Q1 2022
Change
Scope 1 GHGs (Tonne CO
2-
e)
5,851
5,607
4%
Scope 2 GHGs – market based (Tonne CO
2-
e)
1,003
1,141
(12%)
Scope 1+2 GHGs (Tonne CO
2-
e)
6,854
6,748
2%
Energy consumption (MWh)
30,438*
31,865
(4%)
Frequency of lost time accidents (Frequency)
3.8**
7.6
N/A
Work-related accidents with absence (Number)
9**
7
N/A
Compliance Hotline reports (Number)
28
16
75%
Due Diligence screenings of suppliers and third parties (Number)
52
22
136%
FINANCIAL REPORT FOR THE PERIOD JANUARY 1 TO MARCH 31, 2023 Page 17
Corporate Release No 741/2023
2.10 GENERAL CORPORATE MATTERS
Pending legal proceedings
Legal cases and proceedings for which it is either not
probable that there will be an outflow of resources or
for which it is not practicable possible to make a
reliable estimate is disclosed in this section and is
considered contingent liabilities.
Lundbeck is involved in a number of cases and legal
proceedings, including patent disputes, the most
significant of which are described below. Some of
these involve significant amounts and are subject to
considerable uncertainty. Management continuously
assesses the risks associated with the cases and
legal proceedings, and their likely outcome. It is the
opinion of Management that, apart from items
recognized in the financial statements, the outcome
of these cases and disputes are not probable or
cannot be reliably estimated in terms of amount or
timing. Such proceedings may, however, develop
over time, and new proceedings may occur, in a way
which could have a material impact on the Group’s
financial position and/or cash flows.
In June 2013, Lundbeck received the European
Commission’s decision that agreements concluded
with four generic competitors concerning citalopram
violated competition law. The decision included fining
Lundbeck EUR 93.8 million (approximately DKK 700
million). Lundbeck paid and expensed the fine in the
third quarter of 2013. In March 2021, the European
Court of Justice rejected Lundbeck’s final appeal of
the European Commission’s decision. So-called
“follow-on claims” for reimbursement of alleged
losses, resulting from alleged violation of competition
law, often arise when decisions and fines issued by
the European Commission are upheld by the
European Court of Justice. The below mentioned
“follow-on claims” are ongoing or threatened.
Lundbeck disagrees with all claims and intends to
defend itself against them.
Health authorities in the UK (England and Wales) and
an umbrella organization of Dutch health insurance
companies have previously taken formal protective
steps against Lundbeck with the principal purpose of
preventing potential “follow on 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. The transfer order required the UK health
authorities to give eight weeks’ notice prior to serving
the claim form, which they gave on September 30,
2022, meaning that the claim could be served on or
after November 25, 2022. At the end of first quarter
2023, the UK health authorities served its claim form
on Lundbeck.
In late October 2021, Lundbeck received a writ of
summons from a German health care company
claiming compensation for an alleged loss of profit
plus interest payments, allegedly resulting from
Lundbeck’s conclusion of agreements with two of the
four generic competitors, which were comprised by
the EU Court of Justice ruling. Lundbeck 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.
In March and April 2022 and again in March 2023
Lundbeck received letters from several regional
health authorities in Spain with an out-of-court “follow
on claim” for compensation. The letters specifically
states that they are intended to interrupt the statute
of limitation. It is still uncertain whether the health
authorities in Spain will actively pursue any claims.
In Canada, Lundbeck is involved in three product
liability class-action lawsuits relating to
Cipralex/Celexa
®
(two cases alleging various Celexa-
induced birth defects and one case against several
SSRI manufacturers (incl. Lundbeck) alleging that
SSRI (Celexa/Lexapro) induces autism birth defect),
three relating to Abilify Maintena (alleging i.a. failure
to warn about compulsive behavior side effects) and
one relating to Rexulti (also alleging i.a. failure to
warn about compulsive behavior side effects). The
FINANCIAL REPORT FOR THE PERIOD JANUARY 1 TO MARCH 31, 2023 Page 18
Corporate Release No 741/2023
cases are in the preliminary stages and as such there
is significant uncertainty as to how these lawsuits will
be resolved. Lundbeck strongly disagrees with the
claims raised.
In 2018, Lundbeck entered into settlements with three
of four generic companies involved in an Australian
federal court case, in which Lundbeck was pursuing
patent infringement and damages claims over the
sale of escitalopram products in Australia. Lundbeck
received AUD 51.7 million (DKK 242 million) in 2018.
In Lundbeck’s case against the last of the four generic
companies, Sandoz Pty Ltd, the Federal Court found
that Sandoz Pty Ltd had infringed Lundbeck’s
escitalopram patent between 2009 and 2012 and
awarded Lundbeck AUD 26.3 million in damages.
Sandoz’ appeal of the decision was heard in May
2019 and the Full Federal Court has in August 2020
allowed Sandoz' appeal and decided that Sandoz is
not liable for damages. The High Court of Australia
has now allowed Lundbeck’s appeal and overturned
the Full Federal Court decision on all major issues.
The case has been sent back to the Federal Court for
recalculation of damages and Lundbeck’s appeal of
the Australian Patent Office’s decision to grant
Sandoz a license will be restarted.
Together with Takeda, Lundbeck instituted patent
infringement proceedings against 16 generic
companies in response to their filing of Abbreviated
New Drug Applications (“ANDAs”) with the FDA
seeking to obtain marketing approval for generic
versions of Trintellix in the U.S. Two opponents have
since withdrawn and Lundbeck has settled with eight
opponents. As communicated by Lundbeck in
company release no. 706 dated October 1, 2021, the
cases against the six remaining opponents (the
“ANDA Filers”) have been decided by the U.S. District
Court for the District of Delaware (the ‘Court’). The
Court found that Lundbeck’s compound patent (U.S.
Patent No. 7,144,884) is valid. The compound patent
expires on June 17, 2026, with an expected six-
month pediatric exclusivity period extending to
December 17, 2026. Assuming the ruling is confirmed
at appeal, final approval will not be granted to the
relevant ANDA Filers until after expiration of the
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 Lundbeck’s process for manufacturing
vortioxetine. Unless and until the Court’s ruling is
reversed on appeal, the patents found not infringed
by a particular ANDA Filer will not prevent that ANDA
Filer from receiving final approval. For details on each
of the patents comprised by the case, please see
company release no. 706. The Court’s decision has
been appealed by Lundbeck to the U.S. Court of
Appeals for the Federal Circuit. Lupin has appealed
with respect to the process patent and the ANDA
Filers have cross appealed with respect to the validity
of two of the seven other patents. The validity of the
compound patent has not been challenged under the
appeal.
Together with Otsuka, Lundbeck 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 June 23, 2029, including expected pediatric
extensions.
Lundbeck received a Civil Investigative Demand
(“CID”) from the U.S. Department of Justice (“DOJ”)
in March 2020. The CID seeks information regarding
the sales, marketing, and promotion (including the
promotional speaker program) of Trintellix. Lundbeck
is cooperating with the DOJ.
Lundbeck and Otsuka have received a Paragraph IV
certification from Mylan Pharmaceuticals with respect
to certain of the patent listed for Abilify Maintena in
the U.S., and Lundbeck and Otsuka have instituted
patent infringement proceedings against Mylan and
Viatris Inc. The 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. The trial has been scheduled
to start on April 1, 2024 and a District Court decision
is currently expected by August 2024. Abilify
Maintena is covered by several U.S. patents relating
FINANCIAL REPORT FOR THE PERIOD JANUARY 1 TO MARCH 31, 2023 Page 19
Corporate Release No 741/2023
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 U.S. being in
2034.
In June 2022 in the U.S., several entities created for
the purpose of receiving assignment of claims from
payors providing health insurance coverage pursuant
to Medicare Parts C and D and Medicaid filed a
complaint against Lundbeck and others. The
complaint alleges that Lundbeck and the other
defendants conspired to increase the unit price and
quantity dispensed of Xenazine. Lundbeck denies the
allegations in the complaint and intends to defend
itself.
Conference call
Today at 13.00 CET, Lundbeck will be hosting a
conference call for the financial community. You can
find dial-ins and a link for webcast online at
www.lundbeck.com under the Investor section.
FINANCIAL REPORT FOR THE PERIOD JANUARY 1 TO MARCH 31, 2023 Page 20
Corporate Release No 741/2023
Registered Executive Management
Board of Directors
FINANCIAL REPORT FOR THE PERIOD JANUARY 1 TO MARCH 31, 2023 Page 21
Corporate Release No 741/2023
3 CONDENSED FINANCIAL STATEMENTS
Condensed statement of profit or loss
DKK million
Q1 2023
Q1 2022
Revenue
Cost of sales
Gross profit
Sales and distribution costs
Administrative expenses
Research and development costs
Profit from operations (EBIT)
Net financials, expenses
Profit before tax
Tax on profit for the period
Profit for the period
Earnings per share, basic (EPS) (DKK)
1
Earnings per share, diluted (DEPS) (DKK)
1
1 The calculation of EPS is based on a share domination 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.
Statement of comprehensive income
DKK million
Q1 2023
Q1 2022
Profit for the period
Actuarial gains/losses
Tax
Items that will not be reclassified subsequently to profit or loss
Exchange rate gains/losses on investments in foreign subsidiaries
(170 )
Exchange rate gains/losses on additions to net investments in foreign
subsidiaries
(1 )
(8 )
Hedging of net investments in foreign subsidiaries
(26 )
Deferred gains/losses on cash flow hedge, exchange rate
(143 )
Deferred gains/losses on cash flow hedge, interest rate
(9 )
Deferred gains/losses on cash flow hedge, price
(41 )
Exchange gains/losses, hedging (transferred to the hedged items)
Tax
(28 )
Items that may be reclassified subsequently to profit or loss
(68 )
Other comprehensive income
(68 )
Comprehensive income
FINANCIAL REPORT FOR THE PERIOD JANUARY 1 TO MARCH 31, 2023 Page 22
Corporate Release No 741/2023
Condensed statement of financial position
DKK million
31.03.2023
31.12.2022
Assets
Intangible assets
Property, plant and equipment
Right-of-use assets
Other financial assets
Other receivables
Deferred tax assets
Non-current assets
Inventories
Receivables
Cash and bank balances
Current assets
Assets
Equity and liabilities
Share capital
Foreign currency translation reserve
Hedging reserve
Retained earnings
Equity
Retirement benefit obligations
Deferred tax liabilities
Provisions
Bank debt and bond debt
Lease liabilities
Other payables
Non-current liabilities
Retirement benefit obligations
Provisions
Trade payables
Lease liabilities
Income taxes payable
Other payables
Current liabilities
Liabilities
Equity and liabilities
FINANCIAL REPORT FOR THE PERIOD JANUARY 1 TO MARCH 31, 2023 Page 23
Corporate Release No 741/2023
Statement of changes in equity
DKK million
Share
capital
Foreign
currency
translation
reserve
Hedging
reserve
Retained
earnings
Total
equity
Equity at January 1, 2023
Profit for the period
Other comprehensive income
(157 )
(68 )
Comprehensive income
(157 )
Distributed dividends, gross
(578 )
(578 )
Dividends received, treasury shares
Buyback of treasury shares
(43 )
(43 )
Incentive programs
Tax on other transactions in equity
Other transactions
(611 )
(611 )
Equity at March 31, 2023
DKK million
Share
capital
Foreign
currency
translation
reserve
Hedging
reserve
Retained
earnings
Total
equity
Equity at January 1, 2022
(162 )
Profit for the period
Other comprehensive income
(23 )
Comprehensive income
(23 )
Distribution of dividends, gross
(398 )
(398 )
Dividends received, treasury shares
Buyback of treasury shares
(45 )
(45 )
Incentive programs
Tax on other transactions in equity
Other transactions
(434 )
(434 )
Equity at March 31, 2022
(185 )
FINANCIAL REPORT FOR THE PERIOD JANUARY 1 TO MARCH 31, 2023 Page 24
Corporate Release No 741/2023
Condensed statement of cash flows
DKK million
Q1 2023
Q1 2022
Profit from operations (EBIT)
Adjustments for non-cash items
Change in working capital
(1,361 )
(879 )
Cash flows from operations before financial receipts and payments
Financial receipts and payments
(51 )
(485 )
Cash flows from ordinary activities
(141 )
Income taxes paid
(66 )
(64 )
Cash flows from operating activities
(205 )
Contingent consideration, payment from acquisition of company
(1,076 )
Purchase and sale of intangible assets and property, plant and equipment
(77 )
(87 )
Cash flows from investing activities
(77 )
(1,163 )
Cash flows from operating and investing activities
(free cash flow)
(1,368 )
Proceeds from loans and issue of bonds
Repayment of bank loans and borrowings
(314 )
(98 )
Dividends paid in the financial year, net
(576 )
(397 )
Other financing activities
(65 )
(70 )
Cash flows from financing activities
(955 )
Net cash flow for the period
(654 )
(699 )
Cash and bank balances at beginning of period
Unrealized exchange gains/losses on cash and bank balances
(12 )
Net cash flow for the period
(654 )
(699 )
Cash and bank balances at end of period
Interest-bearing debt, cash, bank balances and securities, net, is
composed as follows:
Cash and bank balances
Interest-bearing debt
(5,373 )
(6,617 )
Net cash/(net debt)
(2,491 )
(5,003 )
FINANCIAL REPORT FOR THE PERIOD JANUARY 1 TO MARCH 31, 2023 Page 25
Corporate Release No 741/2023
Statement of profit or loss – Adjusted EBITDA reconciliation (Q1)
Q1 2023
Q1 2022
DKK million
Reported
Adjusted
Reported
Adjusted
Revenue
5,044
5,044
4,372
4,372
Cost of sales
1,041
476
845
477
Gross profit
4,003
4,568
3,527
3,895
Sales and distribution costs
1,673
1,649
1,435
1,412
Administrative expenses
258
253
236
232
Research and development costs
839
821
981
961
Profit from operations (EBIT)
1,233
-
875
-
Depreciation/amortization
511
-
415
-
EBITDA
1,744
1,845
1,290
1,290
EBITDA margin
34.6%
36.6%
29.5%
29.5%
Adjustments to EBITDA
Integration costs
-
-
-
-
Restructuring expenses
-
-
-
-
Gains/losses on divestment of businesses
-
-
-
-
Acquisition expenses
-
-
-
-
Other adjustments
101
-
-
-
Adjusted EBITDA
1,845
1,845
1,290
1,290
Adjusted EBITDA margin
36.6%
36.6%
29.5%
29.5%
FINANCIAL REPORT FOR THE PERIOD JANUARY 1 TO MARCH 31, 2023 Page 26
Corporate Release No 741/2023
4 NOTES
Note 1: Basis of preparation
The interim condensed consolidated financial statements for the three months ended March 31, 2023, have been prepared
in accordance with IAS 34 Interim Financial Reporting as adopted by the EU and additional Danish disclosure requirements
for interim financial reporting of listed companies. The interim condensed consolidated financial statements do not include
all the information and disclosures required in the annual financial statements and should be read in conjunction with the
Group’s annual consolidated financial statements at December 31, 2022, published February 8, 2023. The accounting
policies, judgements and significant estimates are consistent with those applied in the Annual Report 2022.
Further IAS 34 disclosure requirements for interim financial reporting are included in section 2, Business Performance. For
disclosures regarding revenue and segment information see section 2.1 Revenue by product and section 2.2 Revenue by
geographic area, for disclosures regarding inventory obsolescence see section 2.3 Gross profit and for disclosures
regarding pending legal proceedings (contingent liabilities), see section 2.10 General corporate matters.
A number of new amendments came into effect from January 1, 2023. The Group did not have to change its accounting
policies or make retrospective adjustments as a result of adopting these amended standards.
The Group has made some changes in the presentation of the statement of financial position. Management believes that
the new presentation is more aligned with industry practice. The changes have no impact on the statement of financial
position or equity. The comparative figures for 2022 have been changed accordingly.
On June 8, 2022, the Company’s shareholders approved a share split of Lundbeck’s existing shares. The approval entailed
that each existing Lundbeck-share with a nominal value of DKK 5 was split into one A share with a nominal value of DKK
1 and four B shares each with a nominal value of DKK 1. The A-share is carrying ten votes and the B-share is carrying one
vote. The A-shares and the B-shares are ordinary, fully paid shares carrying equal economic rights in all respects. As a
result, all share and per share information has been retrospectively adjusted for all periods presented to reflect the impacts
of the share split transaction.
Note 2: Fair value measurement
Financial assets and financial liabilities measured or disclosed at fair value
DKK million
March 31, 2023
Level 1
Level 2
Level 3
Financial assets
Other financial assets
1
49
-
27
Derivatives
1
-
330
87
Total
49
330
114
Financial liabilities
Contingent consideration
1
-
-
334
Derivatives
1
-
103
-
Bank debt²
-
1,062
-
Bond debt²
3,245
-
-
Total
3,245
1,165
334
1 Measured at fair value
2 Disclosed at fair value
The fair value of listed securities is based on publicly quoted prices of the invested assets. The fair value of derivatives is
calculated by applying recognized measurement techniques, whereby assumptions are based on the market conditions
prevailing at the balance sheet date. The fair value of contingent consideration is calculated as the discounted cash
outflows (DCF method) from future milestone payments, taking probability of success into consideration. The fair value of
FINANCIAL REPORT FOR THE PERIOD JANUARY 1 TO MARCH 31, 2023 Page 27
Corporate Release No 741/2023
other financial assets is calculated through the financial performance of the market inputs (i.e. interest swap rates) and
other market conditions prevailing at the balance sheet date.
Note 3: Adjusted EBITDA
For the financial guidance for 2023 and onwards, Lundbeck will focus on revenue performance and Adjusted EBITDA.
Lundbeck’s previous performance measure (Core EBIT) adjusted for amortization of product rights and for each non-
recurring item that Management deemed exceptional and/or which accumulates or was expected to accumulate to DKK
100 million.
Adjusted EBITDA provides an improved and more consistent indicator, measuring the underlying operational profitability.
Adjusted EBITDA enables a better understanding of the underlying operational performance, as the operating result is
adjusted to exclude depreciation and amortization, impairment losses and reversals of impairment losses, as well as
adjustments restricted to the following categories:
• Integration expenses,
• Restructuring expenses,
• Gains/losses on divestment of businesses,
• Acquisition expenses,
• Other adjustments.
Adjusted EBITDA, adjusted gross profit and adjusted EPS are non-IFRS performance measures.
FINANCIAL REPORT FOR THE PERIOD JANUARY 1 TO MARCH 31, 2023 Page 28
Corporate Release No 741/2023
FINANCIAL CALENDAR 2023
August 16, 2023: Financial statements for the first six months of 2023
November 8, 2023: Financial statements for the first nine months of 2023
Lundbeck contacts
Investors:
Media:
Palle Holm Olesen
Thomas Mikkel Mortensen
Vice President, Investor Relations
Media Relations Lead
+45 30 83 24 26
+45 36 43 40 00
About Lundbeck
brain diseases. For more than 70 years, we have been at the forefront of neuroscience research. We are tirelessly
dedicated to restoring brain health, so every person can be their best.
Too many people worldwide live with brain diseases – complex conditions often invisible to others that nonetheless
take a tremendous toll on individuals, families and societies. We are committed to fighting stigma and discrimination
against people living with brain diseases and advocating for broader social acceptance of people with brain health
conditions. Every day, we strive for improved treatment and a better life for people living with brain disease.
We have approximately 5,500 employees in more than 50 countries, and our products are available in more than
100 countries. Our research programs tackle some of the most complex challenges in neuroscience, and our
pipeline is focused on bringing forward transformative treatments for brain diseases for which there are few, if any
therapeutic options. We have research facilities in Denmark and the United States, and our production facilities are
located in Denmark, France, and Italy. Lundbeck generated revenue of DKK 18.2 billion in 2022 (EUR ~2.5 billion;
USD ~2.6 billion).
For additional information, we encourage you to visit our corporate site www.lundbeck.com and connect with us on
Instagram (h_lundbeck) and via LinkedIn.