H. Lundbeck A/s Class A · OMXCOP:HLUN_A
H. Lundbeck A/s Class A — FY2007 Earnings Presentation
55 slides from H. Lundbeck A/s Class A's earnings presentation, February 2008
Slide 1: Investor presentation – H. Lundbeck A/S FY 2007 financial results
Investor presentation – H. Lundbeck A/S FY 2007 financial results
Slide 2: Safe Harbour Statement
Safe Harbour Statement This presentation contains forward-looking statements that provide our expectations or forecasts of future events such as new product introductions, product approvals and financial performance. Such forward-looking statements are subject to risks, uncertainties and inaccurate
Slide 3: The foundation for long-term value creation
The foundation for long-term value creation Focused strategy Research-based/ Long-term Financial Building the platform shareholder performance for the future value Optimize opportunities in current business 3
Slide 4: The foundation for long-term value creation
The foundation for long-term value creation Focused strategy Research-based/ Long-term Financial Building the platform shareholder performance for the future value Optimize opportunities in current business 4
Slide 5: Lundbeck – a fully integrated company focusing exclusively on CNS
Lundbeck – a fully integrated company focusing exclusively on CNS 2006 CNS market USD Lundbeck focus 100.7 billion (+7%) Depression, N6A 20% Psychosis, N5A (+2%) CAGR of 13% 1990-2006 Alzheimer’s disease, N7D 17% (+11%) Parkinson’s disease, N4A 5% (+16%) Sleep, N5B 3% (+12%) 5% (+19%) Alcohol depend
Slide 6: Lundbeck is involved in indications with high unmet medical needs
Lundbeck is involved in indications with high unmet medical needs Rank of disease burden*) Disease area Products and pipeline projects #2 Unipolar depressive Cipralex®/Lexapro®; disorder + anxiety Lu AA21004 (ph3); Lu AA24530 (ph2); Lu AA37096 (ph1) #7 Cerebrovascular disease Desmoteplase (ph3); Lu
Slide 7: Focus and flexibility address future healthcare environment
Focus and flexibility address future healthcare environment The traditional business model is Lundbeck has >50 years of experience likely to change in CNS Increased price pressure Focused strategy in the value chain J Reality in EU – emerging in US? Flexible organisation The Health Care Payers NOT t
Slide 8: Lundbeck – a growth company in CNS
Lundbeck – a growth company in CNS CNS in ad er le orld e aw Leverage on CNS om capabilities to be c develop novel is to compounds to ion vi s Manage patent address unmet e ck’s expirations medical needs db Lun - Establish presence in Japan Potential launch of: - Margin improvements - Lu AA39959 Pot
Slide 9: The foundation for long-term value creation
The foundation for long-term value creation Focused strategy Research-based/ Long-term Financial Building the platform shareholder performance for the future value Optimize opportunities in current business 9
Slide 10: Focus on CNS capabilities reduces R&D cycle times
Focus on CNS capabilities reduces R&D cycle times Development time from pre-clinical to submission CNS development has high attrition rates CNS Lead J Complexity of the brain Projects J Blood-brain barrier J CNS-mediated side effects J Lack of biomarkers Lundbeck On average it takes 12.6 years to de
Slide 11: The broadest pipeline in company history
The broadest pipeline in company history Indication Development step Registration Expected Compound Activity Phase I Phase II Phase III application launch Schizophrenia Dopamine/ Serdolect US serotonin 2008 2009 Schizophrenia Dopamine/ Bifeprunox serotonin 2010+ Stroke Desmoteplase Plasminogen activ
Slide 12: Addressing unmet medical needs
Addressing unmet medical needs Lundbeck’s emerging Indication Biggest unmet needs compounds Depression/bipolar/ - Improved efficacy – lower remission rates Lu AA21004; Lu AA24530; PTSD/anxiety - Faster onset of action+less side effects Lu AA34893; Lu AA37096 Psychosis/bipolar - Improved maintenance
Slide 13: Depression and anxiety – efficacy and onset of action needs improvement
Depression and anxiety – efficacy and onset of action needs improvement Efficacy Major Depressive Disorder (MDD) is the Only some 50- leading cause of disability in the US and 60% of patients established market economies worldwide respond to therapy WHO estimates 150 million people (higher for e
Slide 14: Lundbeck's portfolio within mood disorders potentially addresses unmet medical needs
Lundbeck’s portfolio within mood disorders potentially addresses unmet medical needs Portfolio of four novel compounds: Clinical programme: Lu AA21004; Lu AA24530; Lu AA34893 Clinical phase III programme with Lu and Lu AA37096 AA21004 recruiting 2,000+ patients Approaches that are markedly ini
Slide 15: Psychosis – major unmet medical needs
Psychosis – major unmet medical needs Need for several therapies when treating schizophrenia Schizophrenia affects about 24mn people worldwide 7% 2% More than 50% of persons with schizophrenia USA 32% 40% 20% are not receiving appropriate care ~50% in EU and ~70% in the US receives more than o
Slide 16: Lundbeck has a portfolio of compounds to treat psychosis
Lundbeck has a portfolio of compounds to treat psychosis Besides from Serdolect® Lundbeck is Clinical programme: investigating bifeprunox, Lu 31-130 and Lu AA39959 in psychosis Explorative clinical phase II programme with Lu 31-130 recruiting 210 patients Lu 31-130 is suggested to show beneficial
Slide 17: Stroke is an immature market with huge unmet medical needs
Stroke is an immature market with huge unmet medical needs Disease management Around 600,000 cases annually in the US 12% Ischaemic 20% 15% Before 3 Third leading cause of death hours Haemorrhagic Betw een 3-9 hours Leading cause of long-term After 9 hours disability 88% One of the most costly
Slide 18: Desmoteplase (ph III) – a possible improvement of existing stroke therapy
Desmoteplase (ph III) – a possible improvement of existing stroke therapy Responder rates Nine hour time window increases DIAS/DEDAS DIAS-2 (pooled) addressable market to approx. 80% 50% (from approx. 15%) Potential to decrease bleeding 40% complications Potential to improve neurological 30% o
Slide 19: Alcohol misuse – an un-developed market due to non-compliance and lack of effective agents
Alcohol misuse – an un-developed market due to non-compliance and lack of effective agents Medication An estimated 50mn people is defined as alcohol mis-users in major markets -Ineffective -Side effects More than 80% of prevalent population is undiagnosed -Complex -Cost Only around 13% of diag
Slide 20: Nalmefene (ph III) – a potential new treatment paradigm
Nalmefene (ph III) – a potential new treatment paradigm Heavy Drinking In clinical trials nalmefene reduces Days per month J Heavy Drinking Days 15 J Total consumption Nalmefene improves 10 J Clinical global impression Nalmefene can leverage on Lundbeck’s * existing European GP and specialist 5 sale
Slide 21: The foundation for long-term value creation
The foundation for long-term value creation Focused strategy Research-based/ Long-term Financial Building the platform shareholder performance for the future value Optimize opportunities in current business 21
Slide 22: Cipralex® - continued positive performance in Europe
Cipralex® - continued positive performance in Europe Antidepressant market Europe Market share, value – market growth, volume Cipralex® is the most frequently 20% 20% prescribed branded anti- combined 18.1% depressant in Europe 15% Cipralex® 15.2% 15% Cipralex® is approved for depression, panic
Slide 23: Cipralex® / Lexapro® - strong underlying growth in International Markets
Cipralex® / Lexapro® - strong underlying growth in International Markets International markets Market share, value – market growth, volume 20% 20% Second most prescribed anti- depressant in International Markets 15% 15% combined 11.6% Strong growth rates despite generic competition in many marke
Slide 24: Lexapro® - maintaining branded market position in US
Lexapro® - maintaining branded market position in US Antidepressant market USA Market share, value – market growth, volume 25% 25% combined 22.9% Lexapro® is the most prescribed branded antidepressant in the US 20% 20% Lexapro® 22.7% Marketed by Forest Laboratories, 15% 15% Inc. Approved for t
Slide 25: Ebixa® (memantine) – the second most prescribed anti-Alzheimer's product in Europe
Ebixa® (memantine) – the second most prescribed anti-Alzheimer’s product in Europe Anti-Alzheimer’s market Europe Market share, value – market growth, volume 25% combined 23.3% 50% Ebixa® is the only NMDA receptor antagonist approved for the treatment 20% 40% of Alzheimer’s disease Ebixa® 16.0%
Slide 26: Ebixa® (memantine) – the leading Alzheimer's medication in Latin America
Ebixa® (memantine) – the leading Alzheimer’s medication in Latin America Anti-Alzheimer’s market International markets Market share, value – market growth, volume 15% 45% Ebixa® is the only NMDA receptor combined 12.9% antagonist approved for the treatment Alzheimer’s disease 10% 30% Ebixa® 10.9%
Slide 27: Azilect® – the success continues
Azilect® – the success continues Anti-Parkinson’s market Europe Azilect® by Lundbeck in more than 20 Market share, value – market growth, volume countries in Europe and International 5% 5% Markets Azilect® 4.6% Once-daily treatment 4% 4% Approved for monotherapy and adjunct 3% 3% therapy with
Slide 28: Launch of Circadin® - a new mechanism of action and a new treatment paradigm
Launch of Circadin® - a new mechanism of action and a new treatment paradigm Insomnia: 70 million adults suffer from insomnia – 25 million with chronic and/or severe insomnia Only around 20% take an prescription sleep aid Fear of dependence Fear of side effects – hangover, sedation and addic
Slide 29: The foundation for long-term value creation
The foundation for long-term value creation Focused strategy Research-based/ Long-term Financial Building the platform shareholder performance for the future value Optimize opportunities in current business 29
Slide 30: Financial figures – distribution of revenue in 2007
Financial figures – distribution of revenue in 2007 As percentage of total revenue Reported figures (excl. one-off items in brackets) 6% (3%) Cipralex® (+17%) DKKm 2007 2006 Growth 16% Lexapro® (+35%) Revenue 10,985 9,221 19% (17%) 37% (38%) Ebixa® (+22%) R&D 2,187 1,958 12% 0.3% (0.3%) 2% (2%) Azil
Slide 31: Financial figures – distribution of costs in 2007
Financial figures – distribution of costs in 2007 Costs and EBIT as percentage of revenue (excl. one-off items in brackets) 24% 20% (17%) (25%) Excl. one-off items DKKm 2007 Growth 2007 Growth Revenue 10,985 19% 10,565 17% 22% 20% (21%) (23%) CoGS 2,198 34% 1,817 10% Distribution costs 2,409 0% 2,40
Slide 32: Margins - continued focus on cost optimisation
Margins - continued focus on cost optimisation EBIT and cost margin development Gross-margin has remained flat Margins * Royalties for in-licensed products drive EBIT, DKK billion * production costs upward 3.0 50% Consolidation of production of active pharmaceutical ingredients at two 2.5 40%
Slide 33: The foundation for long-term value creation
The foundation for long-term value creation Focused strategy Research-based/ Long-term Financial Building the platform shareholder performance for the future value Optimize opportunities in current business 33
Slide 34: Key deliverables the next 18 months
Key deliverables the next 18 months Existing products J Life-cycle management initiatives for escitalopram J File Serdolect® in the US for schizophrenia J Defend IP rights vigorously if challenged Product launches J Circadin® in several European markets Pipeline J Initiate additional phase III study
Slide 35: Driving long-term shareholder value
Driving long-term shareholder value Exciting future opportunities Financial guidance J Alcohol misuse 2007 actual* 2008 guidance J Bipolar/mood disorders DKK 10,565 million Revenue DKK 11-11.5 billion J Insomnia J Ischaemic stroke DKK 2,657 million EBIT DKK 2.8-2.9 billion J Psychosis Build commerci
Slide 36: More information please contact Investor Relations
More information please contact Investor Relations Jacob Tolstrup Palle Holm Olesen Thomas Bay-Wedel Joan Loua Director Head of Investor Relations Investor Relations officer Investor Relations coordinator Tel: +45 36 43 30 79 Tel: +45 36 43 24 26 Tel: +45 36 43 39 80 Tel: +45 36 43 45 98 Fax: +45 36
Slide 37: Lundbeck share
Lundbeck share Share information: Trading code: Free float (approximately 60m Reuters (LUN.CO) / Bloomberg (LUN DC) shares) is traded 2+ times over ISIN Number DK0010287234 Unsponsored ADR programmes annually (daily trade of HLUKY, CUSIP 40422M107 approximately 0.7m) Index examples: End of
Slide 38: Revenue – by product / by region
Revenue – by product / by region International Total Europe USA Markets DKKm 2007 2006 2007 2006 2007 2006 2007 2006 Total revenue 10,985 9,221 5,501 5,123 2,599 1,930 2,194 1,794 Growth 19% 7% 35% 22% Cipralex® 4,094 3,508 2,827 2,561 - - 1,267 948 Growth 17% 10% 34% Lexapro® 2,594 1,923 - - 2,594
Slide 39: Revenue, 5 year figures
Revenue, 5 year figures Revenue, DKK million Growth, % 2003 2004 2005 2006 2007 2004 2005 2006 2007 Total revenue 9,941 9,733 9,070 9,221 10,985 -2% -7% 2% 19% Cipralex® 645 1,661 2,625 3,508 4,094 157% 58% 34% 17% Lexapro® 1,928 2,420 2,552 1,923 2,594 26% 5% -25% 35% Ebixa® 286 722 1,105 1,361 1,6
Slide 40: Revenue, quarterly figures
Revenue, quarterly figures Revenue, DKK million Growth, Y/Y, % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2007 2007 2007 2007 2007 2007 2007 2007 Total revenue 2,583 2,612 2,960 2,830 16% 19% 32% 11% Cipralex® 990 1,027 1,046 1,031 18% 20% 19% 10% Lexapro® 628 641 699 626 30% 47% 46% 19% Ebixa® 391 409 432 422 26% 21%
Slide 41: Cost, 5 year figures
Cost, 5 year figures DKK million Growth, Y/Y, % 2003 2004 2005 2006 2007 2004 2005 2006 2007 Revenue 9,941 9,733 9,070 9,221 10,985 -2% -7% 2% 19% Production costs 1,758 1,725 1,488 1,646 2,198 -2% -14% 11% 34% Distribution costs 2,478 2,302 2,337 2,419 2,409 -7% 2% 4% 0% Administration costs 1,612
Slide 42: Cost, quarterly figures
Cost, quarterly figures DKK million Growth, Y/Y, % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2007 2007 2007 2007 2007 2007 2007 2007 Revenue 2,583 2,612 2,960 2,830 16% 19% 32% 11% Production costs 497 398 457 846 18% -9% 23% 103% Distribution costs 578 590 584 657 -2% -9% 17% -4% Administration costs 377 384 358 395
Slide 43: Lundbeck hedge the USD on a rolling basis around 12 months ahead – 2008
Lundbeck hedge the USD on a rolling basis around 12 months ahead – 2008 USD hedge rate of 5.31 Actual rates Forward rates 10 9 8 7.90 7 6.68 6.00 6 5.89 5.75 5.48 5.41 5 5.24 5.11 Quarterly figures 4 '03 '04 '05 '06 '07 Q1 Q2 Q3 Q4 '08 '08 '08 '08 Average US$ exchange rate Average hedging US$ rate N
Slide 44: Lundbeck recognition of income from Forest
Lundbeck recognition of income from Forest Settlement to full royalty P&L Expected sales price Balance P&L (prepayment at USD spot at bulk delivery) Minimum price P&L* At bulk delivery At US sales * Hedging effect at bulk delivery recognised on P&L: Gain/loss from difference in delivery at expected
Slide 45: Depression: Cipralex® / Lexapro® - best-in-class
Cipralex® / Lexapro® - best-in-class Comparator Presented Main outcome Venlafaxine XR SCNP, April 2003 Escitalopram was at least as effective and was better tolerated than (Effexor) venlafaxine XR.Escitalopram treated patients reached sustained response and remission significantly faster. Venlafaxin
Slide 46: Anxiety: Cipralex® / Lexapro® - best-in-class
Cipralex® / Lexapro® - best-in-class Comparator Presented Main outcome Paroxetine SCNP, April 2003 Escitalopram was significantly superior to paroxetine after 24 weeks of (Paxil) treatment of SAD and showed fewer discontinuation effects. Anxiety Paroxetine ACNP, December 2003 Escitalopram was as eff
Slide 47: Global IP position
Global IP position Europe Bifeprunox: Compound patent in majority of countries to Feb. 2022 Escitalopram: Compound patent in majority of countries to May-June 2014. Process patent in majority of countries to June 2014 Memantine: Data exclusivity until 2012. Rasagiline: Compound patent to 2011, excl.
Slide 48: Worldwide pharmaceutical market 2006 USD 605.1 billion (+7%)
Worldwide pharmaceutical market 2006 USD 605.1 billion (+7%) 8% (+5%) 17% (+7%) 3% (+3%) 5% (+6%) (N) CNS 5% (+4%) (C) Cardiovascular (A) Alimentary (J) Anti-Infectives 6% (+8%) 16% (+5%) (R) Respiratory (L) A+Immun (B) Blood 8% (+5%) (M) Muscolo-Skeletal (G) G.U.& Sex Hormones (D) Dermatologicals O
Slide 49: Worldwide CNS market 2006 USD 100.7 billion (+7%)
Worldwide CNS market 2006 USD 100.7 billion (+7%) 5% (16%) 21% (+2%) 3% (+16%) N6A Antidepressants N5A Antipsychotics 3% (-4%) N3A Anti-Epileptics 3% (+12%) N2B Non-Narcotic Analgesics 3% (-5%) N2A Narcotic Analgesics 3% (+6%) N5B Hypnotics & Sedatives N2C Anti-Migraine Preps 5% (+19%) 17% (+11%) N5
Slide 50: Alzheimer's (N7D-2006) – USD 4.6 billion (+16%)
Alzheimer’s (N7D-2006) – USD 4.6 billion (+16%) Value Market Shares of N7D Europe M12 2006 Rest of world Rivastigmine USA M12 2006 15% North America Memantine 55% Galantamine Europe Donepezil 30% 0% 10% 20% 30% 40% 50% 60% Source: IMS Health, May 2007, retail Leading product Marketing Corporation Sa
Slide 51: Depression (N6A-2006) – USD 20.3 billion (+2%)
Depression (N6A-2006) – USD 20.3 billion (+2%) North Value Market shares of N6A America CITALOPRAM Rest of world 67% 11% FLUOXETINE PAROXETINE DULOXETINE Europe M12 2006 USA M12 2006 ESCITALOPRAM BUPROPION SERTRALINE Europe VENLAFAXINE 22% 0% 5% 10% 15% 20% 25% Source: IMS Health, May 2007, retail o
Slide 52: Anti-Parkinson's (N4A - 2006) – USD 3.1 billion (+12%)
Anti-Parkinson’s (N4A - 2006) – USD 3.1 billion (+12%) Value Market Shares of N4A - Europe Europe Europe M12 2006 OTHERS 38% North NMDA ANTAGONISTS America MAOI 29% LEVODOPA DERIVATE DOPAMINE AGONISTS COMT INHIBITORS ANTICHOLINERGICS Rest of world 0% 10% 20% 30% 40% 50% 60% 33% Value Market shares o
Slide 53: Antipsychotics (N5A-2006) – USD 18.1 billion (+11%)
Antipsychotics (N5A-2006) – USD 18.1 billion (+11%) North Value Market Shares of N5A America Europe M12 2006 Aripiprazole USA M12 2006 65% Rest of world Risperidone 11% Olanzapine Amisulpride Clozapine Ziprasidone Europe Quetiapine 25% 0% 5% 10% 15% 20% 25% 30% 35% 40% Source: IMS Health, May 2007,
Slide 54: Hypnotics (N5B-2006) – USD 5.4 billion (+19%)
Hypnotics (N5B-2006) – USD 5.4 billion (+19%) North America Value Market Shares of N5B 67% Europe Q4 2006 USA Q4 2006 Zaleplon Europe Zopiclone 18% Zolpidem Rest of world 15% 0% 10% 20% 30% 40% 50% 60% 70% 80% Source: IMS Health, October 2007, retail Leading product Marketing Corporation Sales 2006
Slide 55: Alcohol (N7E-2006) and Stroke, Fibrinolytics (B1D-2006) markets
Alcohol (N7E-2006) – USD 151 million (+20%) Europe 54% North America 28% Rest of world 18% Stroke, Fibrinolytics (B1D - 2006) – USD 675 million (+1%) Europe North 31% America 51% Rest of world 18% 55