First half report 2010 - Lundbeck reports strongly increasing profits with EBIT growth of 30%
H. Lundbeck A/S (Lundbeck) reports second quarter revenue of DKK 3,767 million.
An increase of 7% compared to the second quarter results of 2009. Profit from
operations was DKK 936 million, an increase of 30% compared to the same period
last year. The EBIT margin for the quarter increased to 24.8% up from 20.4% in
2009.
* Cipralex(®), Ebixa(®) and Azilect(®) continue to show solid growth,
increasing 5%, 9% and 42% respectively at constant exchange rates.
* Xenazine(®) revenue was DKK 147 million, increasing 70% at constant
exchange rates. Sabril(®) revenue for the quarter was DKK 37 million.
* Operating profit before depreciation and amortisation (EBITDA) was DKK
1,206 million corresponding to an EBITDA margin of 32.0% compared to an
EBITDA margin of 24.7% in the second quarter of 2009.
* For the first half of 2010 revenue was DKK 7,616 million and EBIT was DKK
2,190 million.
* Financial guidance for the full year is maintained. Lundbeck expects
revenue of DKK 14.3-14.8 billion, an EBITDA of DKK 3.9-4.3 billion and EBIT
of DKK 3.0-3.4 billion for 2010.
* Lundbeck will provide long term financial forecasts in connection with
the announcement of the third quarter results, 3 November 2010.
+-----------------------+-----------+-----------+------+-------+
| | Q2 2010| Q2 2009| | Growth|
|Distribution of revenue+-----------+-----------+------+-------+
| |DKK million|DKK million|Growth|at CER*|
+-----------------------+-----------+-----------+------+-------+
|Cipralex(®) | 1,507| 1,345| 12%| 5%|
+-----------------------+-----------+-----------+------+-------+
|Lexapro(®) | 630| 625| 1%| (13%)|
+-----------------------+-----------+-----------+------+-------+
|Ebixa(®) | 610| 539| 13%| 9%|
+-----------------------+-----------+-----------+------+-------+
|Azilect(®) | 267| 185| 44%| 42%|
+-----------------------+-----------+-----------+------+-------+
|Xenazine(®) | 147| 81| 82%| 70%|
+-----------------------+-----------+-----------+------+-------+
|Sabril(®) | 37| -| -| -|
+-----------------------+-----------+-----------+------+-------+
+-----------------------+-----------+-----------+------+-------+
|Europe | 1,982| 1,799| 10%| 9%|
+-----------------------+-----------+-----------+------+-------+
|USA | 950| 1,025| (7%)| (18%)|
+-----------------------+-----------+-----------+------+-------+
|International Markets | 780| 680| 15%| (3%)|
+-----------------------+-----------+-----------+------+-------+
+-----------------------+-----------+-----------+------+-------+
|Total revenue | 3,767| 3,528| 7%| (1%)|
+-----------------------+-----------+-----------+------+-------+
* Constant exchange rates
In connection with the second quarter report, Lundbeck's President and CEO Ulf
Wiinberg said: "We are pleased to deliver yet another quarter with continued
progress in our core financials, despite challenges from health care reforms and
generic competition. In development, we have also experienced significant
progress during the quarter, with encouraging clinical results for both clobazam
in the US and escitalopram in Japan. Furthermore, I am delighted that the
development program for Lu AA21004 is progressing, and I am confident that we
will bring Lu AA21004 to the market according to plan."
Management review
Financial highlights and key figures
+------------------------------------------+------+------+------+------+-------+
| | 2010| 2009| 2010| 2009| 2009|
+------------------------------------------+------+------+------+------+-------+
| | Q2| Q2| H1| H1| FY|
+------------------------------------------+------+------+------+------+-------+
+------------------------------------------+------+------+------+------+-------+
|Financial highlights (DKK million) | | | | | |
+------------------------------------------+------+------+------+------+-------+
|Revenue | 3,767| 3,528| 7,616| 6,840| 13,747|
+------------------------------------------+------+------+------+------+-------+
|Operating profit before depreciation and | 1,206| 872| 2,684| 1,951| 3,728|
|amortisation (EBITDA) | | | | | |
+------------------------------------------+------+------+------+------+-------+
|Profit from operations (EBIT) | 936| 719| 2,190| 1,666| 2,858|
+------------------------------------------+------+------+------+------+-------+
|Net financials | (55)| (109)| (66)| (89)| (192)|
+------------------------------------------+------+------+------+------+-------+
|Profit before tax | 881| 609| 2,124| 1,577| 2,666|
+------------------------------------------+------+------+------+------+-------+
|Tax | 220| 139| 518| 410| 659|
+------------------------------------------+------+------+------+------+-------+
|Profit for the period | 661| 470| 1,606| 1,167| 2,007|
+------------------------------------------+------+------+------+------+-------+
+------------------------------------------+------+------+------+------+-------+
|Equity |10,559| 8,101|10,559| 8,101| 8,803|
+------------------------------------------+------+------+------+------+-------+
|Assets |18,314|16,984|18,314|16,984| 17,127|
+------------------------------------------+------+------+------+------+-------+
+------------------------------------------+------+------+------+------+-------+
|Cash flows from operating and investing | 1,174| 852| 2,038| (950)|(2,040)|
|activities | | | | | |
+------------------------------------------+------+------+------+------+-------+
|Property, plant and equipment investments,| 57| 44| 95| 85| 258|
|gross | | | | | |
+------------------------------------------+------+------+------+------+-------+
+------------------------------------------+------+------+------+------+-------+
|Key figures | | | | | |
+------------------------------------------+------+------+------+------+-------+
|EBIT margin (%)(1) | 24.8| 20.4| 28.8| 24.4| 20.8|
+------------------------------------------+------+------+------+------+-------+
|Return on capital employed (%) | 7.8| 6.8| 18.5| 18.1| 28.0|
+------------------------------------------+------+------+------+------+-------+
|Research and development ratio (%) | 18.8| 23.4| 17.5| 22.6| 23.2|
+------------------------------------------+------+------+------+------+-------+
|Return on equity (%)(1) | 6.4| 5.8| 16.6| 14.9| 24.6|
+------------------------------------------+------+------+------+------+-------+
|Solvency ratio (%)(1) | 57.7| 47.7| 57.7| 47.7| 51.4|
+------------------------------------------+------+------+------+------+-------+
|Capital employed (DKK million) |12,522|10,772|12,522|10,772| 12,278|
+------------------------------------------+------+------+------+------+-------+
+------------------------------------------+------+------+------+------+-------+
|Share data | | | | | |
+------------------------------------------+------+------+------+------+-------+
|Number of shares for the calculation of | 196.1| 196.1| 196.1| 196.1| 196.1|
|EPS (million) | | | | | |
+------------------------------------------+------+------+------+------+-------+
|Number of shares for the calculation of | 196.1| 196.1| 196.1| 196.1| 196.1|
|DEPS (million) | | | | | |
+------------------------------------------+------+------+------+------+-------+
|Earnings per share (EPS) (DKK)( 1) | 3.37| 2.40| 8.19| 5.95| 10.24|
+------------------------------------------+------+------+------+------+-------+
|Diluted earnings per share (DEPS) (DKK)( | 3.37| 2.40| 8.19| 5.95| 10.24|
|1) | | | | | |
+------------------------------------------+------+------+------+------+-------+
|Cash flow per share (DKK)( 1) | 6.35| 4.60| 11.02| 7.61| 15.47|
+------------------------------------------+------+------+------+------+-------+
|Net asset value per share (DKK)( 1) | 53.84| 41.31| 53.84| 41.31| 44.89|
+------------------------------------------+------+------+------+------+-------+
|Market capitalisation (DKK million) |16,444|19,761|16,444|19,761| 18,582|
+------------------------------------------+------+------+------+------+-------+
|Share price end of period (DKK) | 83.85|100.37| 83.85|100.37| 94.75|
+------------------------------------------+------+------+------+------+-------+
+------------------------------------------+------+------+------+------+-------+
|OTHER | | | | | |
+------------------------------------------+------+------+------+------+-------+
|Number of employees | 5,726| 5,750| 5,726| 5,750| 5,733|
+------------------------------------------+------+------+------+------+-------+
1)( )Definitions according to the Danish Society of Financial Analysts'
Recommendations & Financial Ratios 2010.
Lundbeck's development portfolio
Lundbeck is developing a number of new and promising pharmaceuticals for the
treatment of central nerve system (CNS) disorders. The pipeline projects are
targeting areas where Lundbeck currently have a market presence such as
depression, anxiety and other psychiatric disorders - as well as new areas
including epilepsy, stroke and alcohol dependence. Lundbeck's pipeline includes:
Six compounds in clinical phase III
Five compounds in clinical phase II
Two compounds in clinical phase I
Eight compounds in Lundbeck's pipeline have demonstrated proof of concept, and
two of the five compounds in phase II are expected to enter clinical phase III
later in 2010.
Following discussions with the U.S. Food and Drug Administration (FDA) regarding
Serdolect(®), Lundbeck has been given the option to perform further studies to
secure an approval in the US. However, in view of the timing and the other
investment opportunities in the pipeline, it has been decided to cease the
project and the
product has therefore been removed from the pipeline. Serdolect(®) continues to
be marketed by Lundbeck in more than 40 countries outside the US.
Pipeline development is summarised as follows:
Clinical phase III
In May 2010, Lundbeck announced positive and highly statistically significant
findings from the pivotal clinical phase III study with clobazam. A New Drug
Application (NDA) for clobazam is anticipated to be submitted with the FDA
before year-end 2010.
In the four-armed placebo-controlled phase III study, including add-on treatment
in 238 patients with Lennox-Gastaut Syndrome, clobazam met its primary endpoint
and was further supported by results for several key secondary endpoints.
Top-line data demonstrated that the two highest doses of clobazam, tested versus
placebo, showed a highly statistically significant reduction in the number of
drop seizures (average per week) from the 4-week baseline period to the 12-week
maintenance period. In the study, clobazam was generally well tolerated and the
overall safety profile was positive.
Lundbeck expects clobazam to provide additional growth opportunities for the US
operation as well as for the entire group.
Also in May 2010, Lundbeck announced the results from the pivotal study with
escitalopram in Japan. The results were positive and according to expectations.
The study was initiated in April 2008 by Mochida Pharmaceutical Co., Ltd.
(Mochida) and was a phase III, placebo-controlled study in major depression
(MDD). Approximately 480 patients with MDD were randomised to receive
escitalopram (10 or 20 mg), paroxetine or a placebo.
Following the results of the pivotal trial in Japan, Mochida will proceed
towards a regulatory filing of escitalopram in Japan. If approved, Lundbeck
expects that escitalopram in Japan could be an important contributor to
Lundbeck's financial performance in the coming years.
The new phase III programme with Lu AA21004 in Major Depressive Disorder (MDD)
has started. The programme consists of four clinical phase III studies, which
will include approximately 2,000 patients with moderate to severe depression. In
order to explore the full potential of Lu AA21004, the planned doses are 10 mg,
15 mg and 20 mg. The programme is based on the clinical data obtained to date,
which shows positive results for the potential efficacy and the tolerability
profile of Lu AA21004. The phase III programme aims to recruit patients from
Europe, as well as the US and Canada in cooperation with our partner Takeda.
The phase III programme studying the use of nalmefene in alcohol dependence is
progressing as planned and two of the three studies are ahead of schedule and
all three studies have finished recruiting patients. Data from the clinical
programme is expected around year-end 2010. Expectations regarding filing in
Europe in the second half of 2011 are unchanged.
The phase III studies for desmoteplase in ischaemic stroke, DIAS-3 and DIAS-4,
have experienced slow patient recruitment. Additional centres will be opened and
other initiatives are ongoing in order to speed up recruitment. Desmoteplase
could be eligible for priority review by the FDA.
Clinical phase II
Lu AA24530, in development for the treatment of depression, is progressing
according to plan. Based on the solid clinical phase II data reported in July
2009, a pivotal phase III programme is set to start in late 2010, which is
planned to include approximately 2,000 patients.
Lundbeck is finalising the plans for additional clinical work with zicronapine,
including plans for the pivotal programme. Zicronapine is in development for the
treatment of schizophrenia.
Lu AA24493 is in clinical phase II in the treatment of Friedreich's ataxia and
in clinical phase I in the treatment of acute ischaemic stroke. Ongoing studies
in both programmes are expected to be concluded in the second half of 2010.
Financial forecasts and forward-looking statements
Financial guidance 2010
Financial guidance for the full year remains unchanged and reflects the guidance
that was reported in the annual report 2009.
+-----------------------------+-----------+-----------+
| | 2009| 2010|
|Lundbeck's financial guidance| reported| guidance|
| |DKK million|DKK billion|
+-----------------------------+-----------+-----------+
|Revenue | 13,747| 14.3-14.8|
+-----------------------------+-----------+-----------+
|EBITDA | 3,728| 3.9-4.3|
+-----------------------------+-----------+-----------+
|EBIT | 2,858| 3.0-3.4|
+-----------------------------+-----------+-----------+
+-----------------------------+-----------+-----------+
|Tax rate | 24.7%| 24-25%|
+-----------------------------+-----------+-----------+
|R&D ratio | 23.2%| ~21%|
+-----------------------------+-----------+-----------+
Long term financial forecasts
As earlier communicated, Lundbeck plans to provide long term financial forecasts
during the second half of 2010. The forecasts will be announced in connection
with the third quarter results, 3 November 2010.
Forward-looking statements
Forward-looking statements provide current expectations or forecasts for events,
such as product launches, product approvals and financial performance.
Forward-looking statements are subject to risks, uncertainties and inaccurate
assumptions. Actual results may differ from expected results. Factors that may
affect future results include fluctuations in interest rates and exchange rates,
a delay in or failure of development projects, production problems, unexpected
contract breaches or terminations, government-mandated or market-driven price
decreases for Lundbeck's products, introduction of a competing product,
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 their interpretation and unexpected growth in costs
and expenses.
Revenue
Lundbeck recorded second quarter revenue of DKK 3,767 million, growing 7%
compared to the second quarter last year, corresponding to a decrease of 1% at
constant exchange rates.
+---------------------+-----------+-----------+------+------+-----------+
| | Q2 2010| Q2 2009| |Growth| Q1 2010|
|Total revenue +-----------+-----------+------+------+-----------+
| |DKK million|DKK million|Growth|at CER|DKK million|
+---------------------+-----------+-----------+------+------+-----------+
|Cipralex(®) | 1,507| 1,345| 12%| 5%| 1,454|
+---------------------+-----------+-----------+------+------+-----------+
|Lexapro(®) | 630| 625| 1%| (13%)| 727|
+---------------------+-----------+-----------+------+------+-----------+
|Ebixa(®) | 610| 539| 13%| 9%| 611|
+---------------------+-----------+-----------+------+------+-----------+
|Azilect(®) | 267| 185| 44%| 42%| 240|
+---------------------+-----------+-----------+------+------+-----------+
|Xenazine(®) | 147| 81| 82%| 70%| 119|
+---------------------+-----------+-----------+------+------+-----------+
|Sabril(®) | 37| -| -| -| 34|
+---------------------+-----------+-----------+------+------+-----------+
|Other pharmaceuticals| 514| 729| (30%)| (35%)| 575|
+---------------------+-----------+-----------+------+------+-----------+
|Other revenue | 55| 24| 132%| 125%| 89|
+---------------------+-----------+-----------+------+------+-----------+
|Total revenue | 3,767| 3,528| 7%| (1%)| 3,849|
+---------------------+-----------+-----------+------+------+-----------+
Revenue from Cipralex(®) (escitalopram) for the treatment of depression and
anxiety rose to DKK 1,507 million, an increase of 12% or 5% at constant exchange
rates. Revenue from Lexapro(®), escitalopram marketed in the US by Forest
Laboratories, Inc. (Forest), was DKK 630 million for the quarter. This was an
increase of 1%, or a decrease of 13% at constant exchange rates compared to the
same period last year.
Ebixa(®) (memantine), for the treatment of Alzheimer's disease, generated second
quarter revenue of DKK 610 million, an increase of 13% compared to the same
period last year. The increase corresponds to 9% growth at constant exchange
rates. Lundbeck has the marketing rights to Ebixa(® )in most of the world,
except Japan and the US.
Revenue from Azilect(®) (rasagiline) for the treatment of Parkinson's disease
rose 44% during the period to DKK 267 million (42% at constant exchange rates).
Lundbeck has commercial rights to Azilect(®) in Europe (in co-promotion with
Teva Pharmaceutical Industries Inc. in France, Germany and the UK) and some
markets outside Europe, including six Asian countries.
Xenazine(® )((1)) (tetrabenazine), for the treatment of chorea associated with
Huntington's disease, generated revenue of DKK 147 million in the second
quarter, an increase of 82% or 70% at constant exchange rates compared to the
same period last year. Xenazine(®) was launched in November 2008 in the US.
Sabril(®) (vigabatrin), for the treatment of refractory complex partial seizures
(rCPS) and infantile spasms (IS), generated second quarter revenue of DKK 37
million. Sabril(®) was launched in the US in September 2009.
Other pharmaceuticals, which comprise the remainder of Lundbeck's products,
decreased 30% to DKK 514 million.
Other revenue was DKK 55 million, compared to DKK 24 million for the second
quarter of 2009. The increase is due to income from Elaiapharm, acquired in
October 2009.
Europe
Revenue in Europe rose 9% at constant exchange rates to DKK 1,982 million. The
increase was driven by solid performances by all key products, with Cipralex(®),
Ebixa(®) and Azilect(®) increasing 6%, 12% and 43% respectively.
Revenue from other pharmaceuticals was DKK 229 million, a decline of 11% at
constant exchange rates.
+---------------------+-----------+-----------+------+------+-----------+
| | Q2 2010| Q2 2009| |Growth| Q1 2010|
|Revenue Europe +-----------+-----------+------+------+-----------+
| |DKK million|DKK million|Growth|at CER|DKK million|
+---------------------+-----------+-----------+------+------+-----------+
|Cipralex(®) | 1,001| 926| 8%| 6%| 1,007|
+---------------------+-----------+-----------+------+------+-----------+
|Ebixa(®) | 509| 448| 13%| 12%| 514|
+---------------------+-----------+-----------+------+------+-----------+
|Azilect(®) | 243| 169| 44%| 43%| 218|
+---------------------+-----------+-----------+------+------+-----------+
|Other pharmaceuticals| 229| 256| (11%)| (11%)| 243|
+---------------------+-----------+-----------+------+------+-----------+
|Total revenue | 1,982| 1,799| 10%| 9%| 1,982|
+---------------------+-----------+-----------+------+------+-----------+
Cipralex(®) generated second quarter revenue of DKK 1,001 million in Europe and
continues to gain market shares and enforce its leading position in the European
antidepressant market. Revenue was driven by the continued growth in most major
markets supported by the increasing understanding of Cipralex(®) as a leading
antidepressant. At the end of May 2010, Cipralex(®) held a market share in value
of 20.5% of the European antidepressant market, compared with a market share of
18.8% a year earlier.
Revenue from Ebixa(®) rose to DKK 509 million during the period, and at the end
of May 2010 the product held 17.9% of the European Alzheimer's market, compared
to a market share of 16.4% at the same time in 2009. In Italy, Ebixa(®
)continues to experience very positive growth since the product obtained
reimbursement in April 2009. Ebixa(®) has a market share of 26.3% in the Italian
Alzheimer's market (May 2010) compared to a market share of 18.1% one year ago.
The launch of the Ebixa(®) Once Daily formulation in Italy in April 2010 has
supported sales even further. Memantine, the active ingredient in Ebixa(®), is
the second-most prescribed pharmaceutical in Europe for the treatment of
Alzheimer's disease.
Second quarter revenue from Azilect(®) amounted to DKK 229 million, an increase
of 43% at constant exchange rates. Azilect(®) now holds a market share in value
of 9.8% of the total European Parkinson's market (May 2010). This compares to a
market share of 7.6% at the same time in 2009. Azilect(® )continues to gain
market shares in Europe, as it is increasingly recognised as an effective and
easy-to-administer medication.
In the beginning of January 2010, Azilect(®) received public reimbursement in
France, and the product continues to experience a very solid uptake. The launch
of Azilect(®) in France is now the most successful launch of a branded
anti-Parkinson's medication to date, and at the end of May 2010 Azilect(®) had a
market share in value of 9.7% in France. The Parkinson's disease market in
France generates annual sales of more than DKK 750 million.
USA
Lundbeck's second quarter revenue in the US was DKK 950 million. A decrease of
7% or 18% at constant exchange rates compared to second quarter 2009.
+---------------------+-----------+-----------+------+------+-----------+
| | Q2 2010| Q2 2009| |Growth| Q1 2010|
|Revenue USA +-----------+-----------+------+------+-----------+
| |DKK million|DKK million|Growth|at CER|DKK million|
+---------------------+-----------+-----------+------+------+-----------+
|Lexapro(®) | 630| 625| 1%| (13%)| 727|
+---------------------+-----------+-----------+------+------+-----------+
|Xenazine(®) | 139| 81| 72%| 61%| 107|
+---------------------+-----------+-----------+------+------+-----------+
|Sabril(®) | 37| -| -| -| 34|
+---------------------+-----------+-----------+------+------+-----------+
|Other pharmaceuticals| 144| 319| (55%)| (59%)| 176|
+---------------------+-----------+-----------+------+------+-----------+
|Total revenue | 950| 1,025| (7%)| (18%)| 1,044|
+---------------------+-----------+-----------+------+------+-----------+
Revenue from Lexapro(®) was DKK 630 million, an increase of 1% compared to the
same quarter last year, but down 13% at constant exchange rates. Revenue was
impacted by lower bulk deliveries compared to the same quarter last year. At the
end of May 2010, Lexapro(®) held a market share in value of 23.4% of the US
aggregate market for antidepressants, compared to a market share of 23.8% in May
2009.
Prepayments from Forest, recorded in Lundbeck's balance sheet as the difference
between the invoiced price and the minimum price of Forest's inventories, was
DKK 619 million as of 30 June 2010. This compares to DKK 563 million as of 30
June 2009. Excluding related hedging contracts, prepayments from Forest are
roughly unchanged. At the end of the second quarter, the inventory levels
corresponded to approximately seven months of commercial supply.
Sales from Lundbeck Inc. reached DKK 320 million in the second quarter. Revenue
from Xenazine(®) was DKK 139 million for the quarter. An increase of 61% at
constant exchange rates compared to the second quarter last year.
Sabril(®) revenue for the quarter was DKK 37 million. Sabril(® )is the first
treatment approved by the FDA for the treatment of IS, and an important new
adjunctive therapeutic option for the approximately 30-36% of adults with CPS
whose seizures remain uncontrolled in spite of receiving many of the
antiepileptic therapies already available. The primary focus in the early launch
phase is to enrol prescribing physicians in the Risk Evaluation and Mitigation
Strategy programme (REMS) and increase the awareness of the new treatment among
patients and caregivers.
Revenue from Other pharmaceuticals in the US was DKK 144 million, a decrease of
59% at constant exchange rates compared to same quarter last year. The decrease
in sales was due to the launch of generic chlorothiazide (Diuril(®)) in December
2009 and indomethacin (Indocin(®)) in February 2010, as well as the continuous
erosion of sales of more mature products. Diuril(®) and Indocin(®) were acquired
in connection with the acquisition of Lundbeck Inc. (former Ovation
Pharmaceuticals, Inc.)
During the quarter Lundbeck and GTC Biotherapeutics (GTC) agreed to transfer the
rights to ATryn(®) back to GTC. Lundbeck Inc. originally purchased the US right
to ATryn(®) from GTC in 2008. Lundbeck will receive a single-digit royalty on
annual net sales from GTC beginning in two years as part of the agreement.
International Markets
Revenue in International Markets, which comprises all of Lundbeck's markets
outside Europe and the US, was DKK 780 million. An increase of 15% compared to
the second quarter 2009. However, due to generic competition in some markets and
price reductions in Turkey, revenue in International Markets is down 3% at
constant exchange rates. Underlying growth in the region continues to be high
and is according to expectations.
Cipralex(®) sales increased 1% at constant exchange rates, while Ebixa(®) sales
decreased 6% during the quarter. Azilect(®) continues to only be marketed by
Lundbeck in a few markets in the region and consequently contributes a
relatively small share.
Revenue from other pharmaceuticals was DKK 149 million, a decrease of 16% at
constant exchange rates compared to the second quarter last year.
+---------------------+-----------+-----------+------+------+-----------+
|Revenue | Q2 2010| Q2 2009| |Growth| Q1 2010|
|International Markets+-----------+-----------+------+------+-----------+
| |DKK million|DKK million|Growth|at CER|DKK million|
+---------------------+-----------+-----------+------+------+-----------+
|Cipralex(®) | 506| 419| 21%| 1%| 447|
+---------------------+-----------+-----------+------+------+-----------+
|Ebixa(®) | 101| 91| 11%| (6%)| 97|
+---------------------+-----------+-----------+------+------+-----------+
|Azilect(®) | 24| 16| 43%| 30%| 22|
+---------------------+-----------+-----------+------+------+-----------+
|Other pharmaceuticals| 149| 154| (3%)| (16%)| 168|
+---------------------+-----------+-----------+------+------+-----------+
|Total revenue | 780| 680| 15%| (3%)| 734|
+---------------------+-----------+-----------+------+------+-----------+
Cipralex(®) generated revenue of DKK 506 million in International Markets, an
increase of 21% compared to the same quarter last year, and corresponding to an
increase of 1% at constant exchange rates. Cipralex(®) sales were experiencing
continued growth in most International Markets, but were negatively affected by
price reductions in Turkey at the end of 2009. However, the recent trend in the
Turkish market has been positive and sales are improving. Cipralex(®) sales were
further impacted by the entrance of generic versions of escitalopram in
Australia during 2009. At the end of the second quarter Cipralex(®) held a
market share in terms of value of 11.6% of the aggregate market for
antidepressants in International Markets((2)), compared to a market share of
12.0% in the same period last year.
The reimbursement of Cipralex(®) in Canada continues to support revenue growth
in the country and the brand now holds a market share in terms of value of
11.4% in Canada (May 2010) compared to 8.8% at the same time last year.
Cipralex(®) in Canada now represents more than 25% of Cipralex(®) sales in
International Markets.
Ebixa(®) generated second quarter revenue of DKK 101 million, a decrease of 6%
at constant exchange rates. Revenue continues to be negatively impacted by the
presence of generic versions of memantine in Canada as well as lower prices in
the Turkish market. In the second quarter Ebixa(®) held 8.4% of the total market
in terms of value of pharmaceuticals for the treatment of Alzheimer's disease in
International Markets. This compares to a market share of 10.4% in Q2 2009.
Expenses
Total costs for the quarter were DKK 2,831 million, an increase of 1% compared
to the second quarter last year.
+----------------------+-----------+-----------+------+-----------+
| | Q2 2010| Q2 2009| | Q1 2010|
|Distribution of costs +-----------+-----------+------+-----------+
| |DKK million|DKK million|Growth|DKK million|
+----------------------+-----------+-----------+------+-----------+
|Cost of sales | 706| 720| (2%)| 698|
+----------------------+-----------+-----------+------+-----------+
|Distribution | 914| 800| 14%| 820|
+----------------------+-----------+-----------+------+-----------+
|Administration | 504| 464| 9%| 448|
+----------------------+-----------+-----------+------+-----------+
|Research & Development| 707| 825| (14%)| 629|
+----------------------+-----------+-----------+------+-----------+
|Total costs | 2,831| 2,809| 1%| 2,595|
+----------------------+-----------+-----------+------+-----------+
Total cost of sales decreased 2% to DKK 706 million. This corresponding to 19%
of Lundbeck's total revenue, compared with 21% in the second quarter of 2009.
Cost of sales in Lundbeck Inc. and LifeHealth was DKK 103 million lower than in
the same period last year, as costs for the second quarter 2009 were impacted
negatively by DKK 98 million, as a result of the purchase price accounting used
in connection with the acquisition of Ovation. Furthermore, cost of sales for
the period was affected by the higher cost of goods sold due to increasing
revenue from in-licensed products (i.e. Xenazine(®), Azilect(®) and Ebixa(®)).
Distribution costs were DKK 914 million, corresponding to 24% of revenue and an
increase of 14% compared to the second quarter last year. The increase is mainly
due to amortisation of rights related to the acquisition of Lundbeck Inc. and
LifeHealth (i.e. Sabril(®) and Xenazine(®)). Administrative expenses increased
by 9% to DKK 504 million primarily due to costs related to Lundbeck Inc.
Administrative expenses corresponded to 13% of the total revenue for the period,
which is on par with the second quarter of 2009. SG&A costs were DKK 1,418
million, compared to DKK 1,264 million in the same period in the previous year.
R&D costs for the quarter were DKK 707 million, a decrease of 14% compared to
the same period last year. The decrease is driven by a difference in the timing
of costs over the quarters, primarily due to development costs related to Lu
AA21004. Furthermore, the closure of development activities related to
Serdolect(®) contributed to the decrease. R&D costs for the period corresponded
to 19% of total revenue, compared to 23% in the same period last year. For the
full year, Lundbeck continues to expect R&D costs to amount to approximately
21% of revenue.
Operating profit before depreciation and amortisation (EBITDA)
EBITDA was DKK 1,206 million, compared to DKK 872 million for the second quarter
of 2009. EBITDA margin for the period was 32.0%, up from 24.7% in the same
quarter last year.
Depreciation, amortisation and impairment charges
Depreciation, amortisation and impairment charges, which are included in the
individual expense categories, amounted to DKK 270 million, increasing 77%
compared to the same period of 2009.
+-----------------------------------+-----------+-----------+------+-----------+
|Depreciation, amortisation and | Q2 2010| Q2 2009| | Q1 2010|
|impairment charges per expense +-----------+-----------+------+-----------+
|category |DKK million|DKK million|Growth|DKK million|
+-----------------------------------+-----------+-----------+------+-----------+
|Cost of sales | 53| 50| 7%| 53|
+-----------------------------------+-----------+-----------+------+-----------+
|Distribution | 129| 28| 365%| 85|
+-----------------------------------+-----------+-----------+------+-----------+
|Administration | 20| 18| 12%| 20|
+-----------------------------------+-----------+-----------+------+-----------+
|Research & Development | 68| 58| 18%| 66|
+-----------------------------------+-----------+-----------+------+-----------+
|Total depreciation, amortisation | | | | |
|and impairment charges | 270| 154| 77%| 224|
+-----------------------------------+-----------+-----------+------+-----------+
The large increase in depreciation and amortisation included in distribution
costs compared to the same period last year, is primarily explained by
amortisation of product rights acquired in connection with the acquisition of
Ovation (Lundbeck Inc.) and LifeHealth Limited.
Profit from operations (EBIT)
EBIT for the second quarter of 2010 amounted to DKK 936 million, corresponding
to an increase of 30% compared to the same period in 2009 (DKK 719 million). The
increase was primarily due to lower R&D costs, as well as increased sales.
The EBIT margin for the period was 24.8%, compared to 20.4% in the same period
the year before.
Net financials
Lundbeck generated net financial expenses of DKK 55 million in the second
quarter, compared with net expenses of DKK 109 million in the second quarter of
2009.
+------------------------------------------+-----------+-----------+-----------+
| | Q2 2010| Q2 2009| Q1 2010|
|Net financials +-----------+-----------+-----------+
| |DKK million|DKK million|DKK million|
+------------------------------------------+-----------+-----------+-----------+
|Net items relating to trading | -| (19)| -|
+------------------------------------------+-----------+-----------+-----------+
|Accounting translation of currency items | (35)| (56)| 23|
+------------------------------------------+-----------+-----------+-----------+
|Net currency items relating to financial | | | |
|items | (35)| (75)| 23|
+------------------------------------------+-----------+-----------+-----------+
|Realised and unrealised gains concerning | | | |
|other investments excl. exchange rate | | | |
|adjustments | 4| 1| -|
+------------------------------------------+-----------+-----------+-----------+
|Net interest income | (24)| (35)| (34)|
+------------------------------------------+-----------+-----------+-----------+
|Net financials | (55)| (109)| (11)|
+------------------------------------------+-----------+-----------+-----------+
Accounting translation of currency items was a loss of DKK 35 million for the
quarter, primarily due to negative movements on balance sheet items.
Net interest income, including realised and unrealised gains and losses on the
bond portfolio, amounted to a net expense of DKK 24 million, as compared to a
net expense of DKK 35 million in the same period in 2009. The difference was
primarily due to the interest on loans related to the acquisition of Ovation
(Lundbeck Inc.) paid in the second quarter last year. The loans were repaid in
full in the first quarter 2010.
Tax
The income tax expense for the period was DKK 220 million, as compared to DKK
139 million in the same period last year. The tax rate was 25%, up from 23% in
the second quarter of last year.
Profit for the period
Profit after tax for the second quarter of 2010 was DKK 661 million compared to
DKK 470 million in the same period last year.
Cash flows
Lundbeck had a cash inflow during the quarter of DKK 564 million, compared to an
inflow of DKK 1,129 million in the same period last year.
+------------------------------------------+-----------+-----------+-----------+
| | Q2 2010| Q2 2009| Q1 2010|
|Cash flows +-----------+-----------+-----------+
| |DKK million|DKK million|DKK million|
+------------------------------------------+-----------+-----------+-----------+
|Cash flows from operating activities | 1,245| 902| 915|
+------------------------------------------+-----------+-----------+-----------+
|Cash flows from investing activities | (71)| (50)| (51)|
+------------------------------------------+-----------+-----------+-----------+
|Cash flows from operating and investing | | | |
|activities | 1,174| 852| 864|
+------------------------------------------+-----------+-----------+-----------+
|Cash flows from financing activities | (610)| 277| (1,511)|
+------------------------------------------+-----------+-----------+-----------+
|Change in cash | 564| 1,129| (647)|
+------------------------------------------+-----------+-----------+-----------+
+------------------------------------------+-----------+-----------+-----------+
|Cash at beginning of period | 1,330| 1,123| 1,960|
+------------------------------------------+-----------+-----------+-----------+
|Unrealised exchange differences for the | 26| 4| 17|
|period | | | |
+------------------------------------------+-----------+-----------+-----------+
|Cash at end of period | 1,920| 2,256| 1,330|
+------------------------------------------+-----------+-----------+-----------+
Operating activities generated a second quarter cash inflow of DKK 1,245 million
compared to DKK 902 million in the same period last year. Cash flows from
investing activities represented an outflow of DKK 71 million, compared to an
outflow of DKK 50 million in the same period in 2009.
Cash flows from financing activities were an outflow of DKK 610 million, which
was primarily due to the payment of dividends.
Cash as of 30 June 2010 was DKK 1,920 million. This compares to DKK 2,256
million at the end of June 2009 and DKK 1,960 million at 31 December 2009. At
the end of the June 2010 Lundbeck had a net cash position of DKK 13 million
compared to a net debt of DKK 365 million at the end of June 2009.
Balance sheet
As of 30 June 2010, Lundbeck had total assets of DKK 18,314 million, compared to
DKK 16,984 million at the end of the second quarter of 2009.
As of 30 June 2010, Lundbeck's equity amounted to DKK 10,559 million,
corresponding to a solvency ratio of 57.7%, compared to 47.7% at the end of June
2009.
In the first quarter of 2010 Lundbeck finalised the purchase price allocation
related to the acquisition of Ovation (Lundbeck Inc.). As a consequence
immaterial reclassifications have been made within intangible assets in the
first quarter of the year.
Hedging
Lundbeck hedges income from its products through currency hedging. As a result
of Lundbeck's currency hedging policy, foreign exchange losses and gains on
hedging transactions are allocated directly to the hedged transaction. Hedging
had a positive effect on profit of DKK 18 million in the second quarter of
2010, compared with a situation where the income is not hedged and included at
the current rates of exchange during the period. The effect was a DKK 9 million
loss in the second quarter 2009. The currency with the most financial impact in
the second quarter of 2010 was the US dollar and of the total effect, DKK 42
million stems from the hedging of the US dollar. This compares to a loss of DKK
9 million in the second quarter of 2009.
Lundbeck hedges cash flow in US dollars on a rolling basis, approximately 12
months in advance. The average rate for the existing US dollar hedging contracts
for 2010 is approximately USD/DKK 541. The corresponding rate for 2009 was
approximately USD/DKK 536. For the next 12 months, the average rate for the
existing US dollar hedging contracts is approximately USD/DKK 549.
Accounting policies
The interim report is presented in accordance with IAS 34 "Interim Financial
Reporting" as adopted by the EU.
Accounting policies are unchanged compared to the annual report 2009, which
contains a more detailed description of the Group's accounting policies.
Protection of patents and other intellectual property rights
The respect of intellectual property rights is a prerequisite for Lundbeck's
continued investments in innovative pharmaceuticals. As the Lundbeck Group's
intellectual property rights are valid and therefore enforceable, it is
Lundbeck's policy to enforce its intellectual property rights wherever they may
be violated. In terms of escitalopram Lundbeck is involved in pending patent
trials in Austria, Belgium, Brazil, Canada, Denmark, Finland, France, Germany,
Hungary, The Netherlands, Norway, Portugal, Rumania, Slovenia, Spain and UK.
Risk factors
Lundbeck's overall risk exposure is unchanged and reflects the risk factors
described in the annual report 2009.
Conference call
Today at 2.00 pm (CET), Lundbeck will be hosting a conference call for the
financial community. You can listen to the call online atwww.lundbeck.com under
the section "Investors - Presentations".
Income statement
+------------------+-----------+-----------+-----------+-----------+-----------+
| | 2010| 2009| 2010| 2009| 2009|
+------------------+-----------+-----------+-----------+-----------+-----------+
| | Q2| Q2| H1| H1| FY|
+------------------+-----------+-----------+-----------+-----------+-----------+
| |DKK million|DKK million|DKK million|DKK million|DKK million|
+------------------+-----------+-----------+-----------+-----------+-----------+
+------------------+-----------+-----------+-----------+-----------+-----------+
|Revenue | 3,767| 3,528| 7,616| 6,840| 13,747|
+------------------+-----------+-----------+-----------+-----------+-----------+
|Cost of sales | 706| 720| 1,404| 1,293| 2,655|
+------------------+-----------+-----------+-----------+-----------+-----------+
|Distribution costs| 914| 800| 1,734| 1,473| 3,174|
+------------------+-----------+-----------+-----------+-----------+-----------+
|Administrative | 504| 464| 952| 865| 1,864|
|expenses | | | | | |
+------------------+-----------+-----------+-----------+-----------+-----------+
|Profit before | | | | | |
|research and | 1,643| 1,544| 3,526| 3,209| 6,054|
|development costs | | | | | |
+------------------+-----------+-----------+-----------+-----------+-----------+
| | | | | | |
+------------------+-----------+-----------+-----------+-----------+-----------+
|Research and | 707| 825| 1,336| 1,543| 3,196|
|development costs | | | | | |
+------------------+-----------+-----------+-----------+-----------+-----------+
|Profit from | 936| 719| 2,190| 1,666| 2,858|
|operations (EBIT) | | | | | |
+------------------+-----------+-----------+-----------+-----------+-----------+
| | | | | | |
+------------------+-----------+-----------+-----------+-----------+-----------+
|Income from | | | | | |
|investments in | -| (1)| -| -| -|
|associates | | | | | |
+------------------+-----------+-----------+-----------+-----------+-----------+
|Net financials | (55)| (109)| (66)| (89)| (192)|
+------------------+-----------+-----------+-----------+-----------+-----------+
|Profit before tax | 881| 609| 2,124| 1,577| 2,666|
+------------------+-----------+-----------+-----------+-----------+-----------+
| | | | | | |
+------------------+-----------+-----------+-----------+-----------+-----------+
|Tax on profit for | 220| 139| 518| 410| 659|
|the period | | | | | |
+------------------+-----------+-----------+-----------+-----------+-----------+
|Profit for the | 661| 470| 1,606| 1,167| 2,007|
|period | | | | | |
+------------------+-----------+-----------+-----------+-----------+-----------+
+------------------+-----------+-----------+-----------+-----------+-----------+
+------------------+-----------+-----------+-----------+-----------+-----------+
|Earnings per share| 3.37| 2.40| 8.19| 5.95| 10.24|
|(EPS) (DKK) | | | | | |
+------------------+-----------+-----------+-----------+-----------+-----------+
|Diluted earnings | | | | | |
|per share (DEPS) | 3.37| 2.40| 8.19| 5.95| 10.24|
|(DKK) | | | | | |
+------------------+-----------+-----------+-----------+-----------+-----------+
Statement of comprehensive income
+----------------------+-----------+----------+----------+----------+----------+
| | 2010| 2009| 2010| 2009| 2009|
+----------------------+-----------+----------+----------+----------+----------+
| | Q2| Q2| H1| H1| FY|
+----------------------+-----------+----------+----------+----------+----------+
| |DKK million| DKK| DKK| DKK| DKK|
| | | million| million| million| million|
+----------------------+-----------+----------+----------+----------+----------+
+----------------------+-----------+----------+----------+----------+----------+
|Profit for the period | 661| 470| 1,606| 1,167| 2,007|
+----------------------+-----------+----------+----------+----------+----------+
| | | | | | |
+----------------------+-----------+----------+----------+----------+----------+
|Currency translation, | 330| (27)| 543| 12| (25)|
|foreign subsidiaries | | | | | |
+----------------------+-----------+----------+----------+----------+----------+
|Currency translation | | | | | |
|concerning additions | 337| (163)| 527| (311)| (396)|
|to net investments in | | | | | |
|foreign subsidiaries | | | | | |
+----------------------+-----------+----------+----------+----------+----------+
|Adjustment, deferred | (150)| 96| (282)| 7| 7|
|gains/losses, hedging | | | | | |
+----------------------+-----------+----------+----------+----------+----------+
|Realised gains/losses,| 65| 56| 33| 113| (1)|
|hedging | | | | | |
+----------------------+-----------+----------+----------+----------+----------+
|Realised gains/losses,| | | | | |
|trading (transferred | -| -| -| -| 22|
|from hedging) | | | | | |
+----------------------+-----------+----------+----------+----------+----------+
|Fair value adjustment | | | | | |
|of available-for-sale | -| 1| 3| 2| 27|
|financial assets | | | | | |
+----------------------+-----------+----------+----------+----------+----------+
|Tax on other | (63)| 1| (79)| 47| 93|
|comprehensive income | | | | | |
+----------------------+-----------+----------+----------+----------+----------+
|Other comprehensive | 519| (36)| 745| (130)| (273)|
|income | | | | | |
+----------------------+-----------+----------+----------+----------+----------+
| | | | | | |
+----------------------+-----------+----------+----------+----------+----------+
|Comprehensive income | 1,180| 434| 2,351| 1,037| 1,734|
+----------------------+-----------+----------+----------+----------+----------+
Balance sheet
+-----------------------------+-----------+-----------+-----------+
+-----------------------------+-----------+-----------+-----------+
| | 30.06.2010| 30.06.2009| 31.12.2009|
+-----------------------------+-----------+-----------+-----------+
| |DKK million|DKK million|DKK million|
+-----------------------------+-----------+-----------+-----------+
|Assets | | | |
+-----------------------------+-----------+-----------+-----------+
|Intangible assets | 8,423| 7,219| 7,724|
+-----------------------------+-----------+-----------+-----------+
|Property, plant and equipment| 3,004| 3,064| 3,049|
+-----------------------------+-----------+-----------+-----------+
|Financial assets | 260| 219| 199|
+-----------------------------+-----------+-----------+-----------+
|Non-current assets | 11,687| 10,502| 10,972|
+-----------------------------+-----------+-----------+-----------+
| | | | |
+-----------------------------+-----------+-----------+-----------+
|Inventories | 1,707| 1,342| 1,481|
+-----------------------------+-----------+-----------+-----------+
|Receivables | 2,944| 2,834| 2,655|
+-----------------------------+-----------+-----------+-----------+
|Securities | 56| 50| 59|
+-----------------------------+-----------+-----------+-----------+
|Cash | 1,920| 2,256| 1,960|
+-----------------------------+-----------+-----------+-----------+
|Current assets | 6,627| 6,482| 6,155|
+-----------------------------+-----------+-----------+-----------+
| | | | |
+-----------------------------+-----------+-----------+-----------+
|Assets | 18,314| 16,984| 17,127|
+-----------------------------+-----------+-----------+-----------+
+-----------------------------+-----------+-----------+-----------+
|Equity and liabilities | | | |
+-----------------------------+-----------+-----------+-----------+
|Share capital | 980| 984| 980|
+-----------------------------+-----------+-----------+-----------+
|Share premium | 224| 224| 224|
+-----------------------------+-----------+-----------+-----------+
|Currency translation reserve | 213| (735)| (857)|
+-----------------------------+-----------+-----------+-----------+
|Retained earnings | 9,142| 7,628| 8,456|
+-----------------------------+-----------+-----------+-----------+
|Equity | 10,559| 8,101| 8,803|
+-----------------------------+-----------+-----------+-----------+
| | | | |
+-----------------------------+-----------+-----------+-----------+
|Provisions | 1,071| 1,322| 1,116|
+-----------------------------+-----------+-----------+-----------+
|Debt | 1,915| 1,920| 2,671|
+-----------------------------+-----------+-----------+-----------+
|Non-current liabilities | 2,986| 3,242| 3,787|
+-----------------------------+-----------+-----------+-----------+
| | | | |
+-----------------------------+-----------+-----------+-----------+
|Provisions | 199| 20| 186|
+-----------------------------+-----------+-----------+-----------+
|Bank and mortgage debt | 48| 751| 804|
+-----------------------------+-----------+-----------+-----------+
|Trade payables | 850| 840| 997|
+-----------------------------+-----------+-----------+-----------+
|Other payables | 3,053| 3,467| 1,857|
+-----------------------------+-----------+-----------+-----------+
|Prepayments from Forest | 619| 563| 693|
+-----------------------------+-----------+-----------+-----------+
|Current liabilities | 4,769| 5,641| 4,537|
+-----------------------------+-----------+-----------+-----------+
| | | | |
+-----------------------------+-----------+-----------+-----------+
|Liabilities | 7,755| 8,883| 8,324|
+-----------------------------+-----------+-----------+-----------+
| | | | |
+-----------------------------+-----------+-----------+-----------+
|Equity and liabilities | 18,314| 16,984| 17,127|
+-----------------------------+-----------+-----------+-----------+
Statement of changes in equity at 30 June 2010
+------------------+-----------+-----------+-----------+-----------+-----------+
| | | | Currency| | |
+------------------+-----------+-----------+-----------+-----------+-----------+
| | Share| Share|translation| Retained| |
+------------------+-----------+-----------+-----------+-----------+-----------+
| | capital| premium| reserve| earnings| Equity|
+------------------+-----------+-----------+-----------+-----------+-----------+
| |DKK million|DKK million|DKK million|DKK million|DKK million|
+------------------+-----------+-----------+-----------+-----------+-----------+
|2010 | | | | | |
+------------------+-----------+-----------+-----------+-----------+-----------+
|Equity at | 980| 224| (857)| 8,456| 8,803|
|31.12.2009 | | | | | |
+------------------+-----------+-----------+-----------+-----------+-----------+
+------------------+-----------+-----------+-----------+-----------+-----------+
|Comprehensive | -| -| 1,070| 1,281| 2,351|
|income | | | | | |
+------------------+-----------+-----------+-----------+-----------+-----------+
+------------------+-----------+-----------+-----------+-----------+-----------+
|Distribution of | -| -| -| (602)| (602)|
|dividends, gross | | | | | |
+------------------+-----------+-----------+-----------+-----------+-----------+
|Incentive | -| -| -| 7| 7|
|programmes | | | | | |
+------------------+-----------+-----------+-----------+-----------+-----------+
|Other transactions| -| -| -| (595)| (595)|
+------------------+-----------+-----------+-----------+-----------+-----------+
+------------------+-----------+-----------+-----------+-----------+-----------+
|Equity at | 980| 224| 213| 9,142| 10,559|
|30.06.2010 | | | | | |
+------------------+-----------+-----------+-----------+-----------+-----------+
+------------------+-----------+-----------+-----------+-----------+-----------+
|2009 | | | | | |
+------------------+-----------+-----------+-----------+-----------+-----------+
|Equity at | 984| 224| -| 6,384| 7,592|
|31.12.2008 | | | | | |
+------------------+-----------+-----------+-----------+-----------+-----------+
|Change in | | | | | |
|accounting | | | | | |
|policies: | | | | | |
+------------------+-----------+-----------+-----------+-----------+-----------+
|Currency | | | | | |
|translation, | -| -| (436)| 355| (81)|
|foreign | | | | | |
|subsidiaries | | | | | |
+------------------+-----------+-----------+-----------+-----------+-----------+
|Equity at | 984| 224| (436)| 6,739| 7,511|
|01.01.2009 | | | | | |
+------------------+-----------+-----------+-----------+-----------+-----------+
+------------------+-----------+-----------+-----------+-----------+-----------+
|Comprehensive | -| -| (299)| 1,336| 1,037|
|income | | | | | |
+------------------+-----------+-----------+-----------+-----------+-----------+
+------------------+-----------+-----------+-----------+-----------+-----------+
|Distribution of | -| -| -| (453)| (453)|
|dividends, gross | | | | | |
+------------------+-----------+-----------+-----------+-----------+-----------+
|Distribution of | | | | | |
|dividends, | -| -| -| 2| 2|
|treasury shares | | | | | |
+------------------+-----------+-----------+-----------+-----------+-----------+
|Incentive | -| -| -| 4| 4|
|programmes | | | | | |
+------------------+-----------+-----------+-----------+-----------+-----------+
|Other transactions| -| -| -| (447)| (447)|
+------------------+-----------+-----------+-----------+-----------+-----------+
+------------------+-----------+-----------+-----------+-----------+-----------+
|Equity at | 984| 224| (735)| 7,628| 8,101|
|30.06.2009 | | | | | |
+------------------+-----------+-----------+-----------+-----------+-----------+
Cash flow statement
+--------------------+-----------+-----------+-----------+----------+----------+
| | 2010| 2009| 2010| 2009| 2009|
+--------------------+-----------+-----------+-----------+----------+----------+
| | Q2| Q2| H1| H1| FY|
+--------------------+-----------+-----------+-----------+----------+----------+
| |DKK million|DKK million|DKK million| DKK| DKK|
| | | | | million| million|
+--------------------+-----------+-----------+-----------+----------+----------+
+--------------------+-----------+-----------+-----------+----------+----------+
|Profit from | 936| 719| 2,190| 1,666| 2,858|
|operations (EBIT) | | | | | |
+--------------------+-----------+-----------+-----------+----------+----------+
| | | | | | |
+--------------------+-----------+-----------+-----------+----------+----------+
|Adjustments | 225| 135| 477| 116| 699|
+--------------------+-----------+-----------+-----------+----------+----------+
|Working capital | 141| 189| (326)| (100)| 312|
|changes | | | | | |
+--------------------+-----------+-----------+-----------+----------+----------+
|Cash flows from | | | | | |
|operations before | 1,302| 1,043| 2,341| 1,682| 3,869|
|financial receipts | | | | | |
|and payments | | | | | |
+--------------------+-----------+-----------+-----------+----------+----------+
| | | | | | |
+--------------------+-----------+-----------+-----------+----------+----------+
|Financial receipts | (9)| (84)| (30)| (14)| (110)|
|and payments | | | | | |
+--------------------+-----------+-----------+-----------+----------+----------+
|Cash flows from | 1,293| 959| 2,311| 1,668| 3,759|
|ordinary activities | | | | | |
+--------------------+-----------+-----------+-----------+----------+----------+
| | | | | | |
+--------------------+-----------+-----------+-----------+----------+----------+
|Income tax paid | (48)| (57)| (151)| (175)| (725)|
+--------------------+-----------+-----------+-----------+----------+----------+
|Cash flows from | 1,245| 902| 2,160| 1,493| 3,034|
|operating activities| | | | | |
+--------------------+-----------+-----------+-----------+----------+----------+
+--------------------+-----------+-----------+-----------+----------+----------+
|Company acquisitions| -| -| -| (3,535)| (5,110)|
+--------------------+-----------+-----------+-----------+----------+----------+
|Investments in and | -| 3| 9| 944| 1,270|
|sale of bonds | | | | | |
+--------------------+-----------+-----------+-----------+----------+----------+
|Investments in and | | | | | |
|sale of intangible | | | | | |
|assets, property, | (71)| (53)| (131)| 148| (1,234)|
|plant and equipment | | | | | |
|and other financial | | | | | |
|assets | | | | | |
+--------------------+-----------+-----------+-----------+----------+----------+
|Cash flows from | (71)| (50)| (122)| (2,443)| (5,074)|
|investing activities| | | | | |
+--------------------+-----------+-----------+-----------+----------+----------+
| | | | | | |
+--------------------+-----------+-----------+-----------+----------+----------+
|Cash flows from | | | | | |
|operating and | 1,174| 852| 2,038| (950)| (2,040)|
|investing activities| | | | | |
+--------------------+-----------+-----------+-----------+----------+----------+
| | | | | | |
+--------------------+-----------+-----------+-----------+----------+----------+
|Cash flows from | (610)| 277| (2,121)| 277| 1,065|
|financing activities| | | | | |
+--------------------+-----------+-----------+-----------+----------+----------+
| | | | | | |
+--------------------+-----------+-----------+-----------+----------+----------+
|Change in cash | 564| 1,129| (83)| (673)| (975)|
+--------------------+-----------+-----------+-----------+----------+----------+
| | | | | | |
+--------------------+-----------+-----------+-----------+----------+----------+
|Cash at beginning of| 1,330| 1,123| 1,960| 2,921| 2,921|
|period | | | | | |
+--------------------+-----------+-----------+-----------+----------+----------+
|Unrealised exchange | | | | | |
|differences for the | 26| 4| 43| 8| 14|
|period | | | | | |
+--------------------+-----------+-----------+-----------+----------+----------+
|Change for the | 564| 1,129| (83)| (673)| (975)|
|period | | | | | |
+--------------------+-----------+-----------+-----------+----------+----------+
|Cash at end of | 1,920| 2,256| 1,920| 2,256| 1,960|
|period | | | | | |
+--------------------+-----------+-----------+-----------+----------+----------+
+--------------------+-----------+-----------+-----------+----------+----------+
+--------------------+-----------+-----------+-----------+----------+----------+
|Interest-bearing net| | | | | |
|cash and cash | | | | | |
|equivalents is | | | | | |
|composed as follows | | | | | |
+--------------------+-----------+-----------+-----------+----------+----------+
|Cash | 1,920| 2,256| 1,920| 2,256| 1,960|
+--------------------+-----------+-----------+-----------+----------+----------+
|Securities | 56| 50| 56| 50| 59|
+--------------------+-----------+-----------+-----------+----------+----------+
|Interest-bearing | (1,963)| (2,671)| (1,963)| (2,671)| (3,475)|
|debt | | | | | |
+--------------------+-----------+-----------+-----------+----------+----------+
|Interest-bearing net| | | | | |
|cash and cash | 13| (365)| 13| (365)| (1,456)|
|equivalents, end of | | | | | |
|period | | | | | |
+--------------------+-----------+-----------+-----------+----------+----------+
Management statement
The Supervisory Board and the Executive Management have discussed and adopted
the interim report of H. Lundbeck A/S for the period 1 January - 30 June, 2010.
The interim report is presented in accordance with IAS 34 "Interim Financial
Reporting", as adopted by the EU and additional Danish disclosure requirements
for the interim reports of listed companies.
We consider the accounting policies applied to be appropriate. Accordingly, the
interim report gives a true and fair view of the Group's assets, liabilities and
financial position as of 30 June, 2010 and of the results of the Group's
operations and cash flows for the first half of 2010, which ended on 30 June
2010.
In our opinion, the Management's report gives a true and fair view of activity
developments, the Group's general financial position and the results for the
period. It also gives a fair account of the significant risks and uncertainty
factors that may affect the Group.
The interim report is unaudited.
Valby, 13 August 2010
Executive Management
Ulf Wiinberg Peter Høngaard Andersen Lars Bang
President and CEO Executive Vice President Executive Vice President
Anders Götzsche Anders Gersel Pedersen Stig Løkke Pedersen
Executive Vice President, CFO Executive Vice President Executive Vice President
Supervisory Board
Per Wold-Olsen Thorleif Krarup Egil Bodd
Chairman Deputy Chairman
Kim Rosenville Christensen Mona Elizabeth Elster Peter Kürstein
Jørn Mayntzhusen Mats Pettersson Jes Østergaard
Lundbeck contacts
Investors: Media:
Jacob Tolstrup Mads Kronborg
Vice President, Corporate Relations Media Relations Manager
+45 36 43 30 79 +45 36 43 28 51
Palle Holm Olesen Stine Hove Marsling
Chief Specialist; Investor Relations External Communication Specialist
+45 36 43 24 26 +45 36 43 28 33
Magnus Thorstholm Jensen
Investor Relations Officer
+45 36 43 38 16
About Lundbeck
H. Lundbeck A/S (LUN.CO, LUN DC, HLUKY) is an international pharmaceutical
company highly committed to improving the quality of life for people suffering
from central nervous system (CNS) disorders. For this purpose, Lundbeck is
engaged in the research, development, production, marketing and sale of
pharmaceuticals across the world. The company's products are targeted at
disorders such as depression and anxiety, schizophrenia, insomnia, Huntington's,
Alzheimer's and Parkinson's diseases.
Lundbeck was founded in 1915 by Hans Lundbeck in Copenhagen, Denmark. Today
Lundbeck employs approximately 5,900 people worldwide. Lundbeck is one of the
world's leading pharmaceutical companies working with CNS disorders. In 2009,
the company's revenue was DKK 13.7 billion (approximately EUR 1.8 billion or USD
2.6 billion). For more information, please visit www.lundbeck.com.
Recent Corporate Releases from H. Lundbeck A/S
5 August 2010
TEMPO study further demonstrates the benefits of Azilect® in early Parkinson's
disease patients
27 May 2010
First patients recruited in the extended phase III programme using Lu AA21004
in MDD
25 May 2010
Lundbeck will submit an NDA for clobazam for patients with Lennox-Gastaut
syndrome with the FDA before year end 2010
17 May 2010
Positive pivotal results on escitalopram in Japan - Lundbeck's partner Mochida
plans to file escitalopram for regulatory approval in first quarter 2011 at the
latest 10
10 May 2010
Announcement of transactions with shares and linked securities in H. Lundbeck
A/S made by executives and their closely associated persons and legal entities
Please visit www.lundbeck.com for more information.
1 Xenazine(®) is a registered trademark of Biovail Laboratories International
(Barbados) S.R.L.
2 Market shares for International Markets are based on IMS data from: Australia,
Brazil, Canada, China, Mexico, Saudi Arabia, South Korea and Turkey
[HUG#1437478]
