Lundbeck intends to appeal the decision from the European Commission
Lundbeck intends to appeal the decision from the European Commission
- The European Commission has decided that Lundbeck’s agreements concluded with four generic competitors concerning citalopram violated competition law
- The decision includes fining Lundbeck EUR 93 million
- Lundbeck’s financial guidance for 2013 is maintained excluding costs connected to the fine
- Lundbeck is very disappointed that the Commission has come to this conclusion and strongly disagrees with the Commission’s decision which the company believes is erroneous
- The company intends to appeal the decision
Valby, Denmark, 19 June 2013 - H. Lundbeck A/S (Lundbeck) today received the European Commission’s decision that the company’s agreements concluded with four generic competitors concerning citalopram violated competition law. The decision, that Lundbeck intends to appeal, includes fining Lundbeck EUR 93 million (approximately DKK 700 million).
Lundbeck strongly disagrees with the Commission’s decision. It asserts that any settlement agreements involving a transfer of value from an originator to a generic company is a restriction of competition and the value transfer reflects an understanding that the patent is invalid or weak. This approach is erroneous. There is no question about the validity of Lundbeck’s process patents at issue. Patent settlement agreements are efficiency enhancing and legitimate when there are bona fide grounds for dispute.
The agreements did not restrict competition in the market beyond the protection already offered by society via the patent rights Lundbeck already held and as has been confirmed by the European Patent Office (EPO). Over 600 meticulous analyses of the generic citalopram demonstrated that they were all produced with infringing processes. Furthermore, in many concurrent documents the generic companies acknowledged that their products violated Lundbeck’s patents.
Lundbeck welcomes competition between companies. Lundbeck also strongly believes in and advocates for a level-playing field, which includes that intellectual property rights should not be ignored and infringed by third parties, since this seriously damages innovators’ investments and reduce their incentives to innovate.
The company acted transparently and in good faith in trying to protect our patents. Upon entering the agreements they were all reviewed by external anti-trust experts. The agreements were furthermore in 2004 reviewed by both the European Commission and the Danish Competition Authorities who publically stated that it could not be rendered probable that the agreements were restricting competition.
In 2008, the European Commission initiated a wide-ranging sector inquiry of the pharmaceutical industry to review possible anti-competitive conduct.
In 2010, the European Commission opened a formal investigation against Lundbeck to investigate possible infringement of European competition law relating to restrictive business practices and abuse of a dominant market position. Specifically, the Commission has investigated whether Lundbeck's agreements with generic manufacturers have delayed the entry of generic citalopram into markets in the EEA.
In July 2012 the European Commission issued a Statement of Objections to Lundbeck regarding agreements concluded with four generic competitors concerning citalopram.
For the full year 2013, Lundbeck still expects reported revenue to be DKK 14.4-15.0 billion and EBIT to be DKK 1.9-2.4 billion before costs incurred in connection with the fine of EUR 93 million (approximately DKK 700 million). Including the fine, Lundbeck now expects revenue of DKK 14.4-15.0 billion (unchanged) and EBIT of DKK 1.2-1.7 billion.
|Palle Holm Olesen||Mads Kronborg|
|Chief Specialist, Head of Investor Relations||Media Relations Manager|
|+45 36 43 24 26||+45 36 43 28 51|
|Investor Relations Officer|
|+45 36 43 33 86|
Lundbeck is a global pharmaceutical company highly committed to improving the quality of life of people living with brain diseases. For this purpose, Lundbeck is engaged in the entire value chain throughout research, development, production, marketing and sales of pharmaceuticals across the world. The company’s products are targeted at disorders such as depression and anxiety, psychotic disorders, epilepsy, Huntington’s, Alzheimer’s and Parkinson’s diseases. Lundbeck’s pipeline consists of several mid- to late- stage development programs.
Lundbeck employs more than 5,800 people worldwide, 2,000 of whom are based in Denmark. We have employees in 57 countries, and our products are registered in more than 100 countries. We have research centers in Denmark, China and the United States and production facilities in Italy, France, Mexico, China and Denmark. Lundbeck generated revenue of approximately DKK 15 billion in 2012. Lundbeck’s shares are listed on the stock exchange in Copenhagen under the symbol ”LUN”. Lundbeck has a sponsored Level 1 ADR programme listed in the US (OTC) under the symbol ”HLUYY”. For additional information, we encourage you to visit our corporate site www.lundbeck.com.
Safe Harbor/Forward-Looking Statements
The above information 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 assumptions. This may cause actual results to differ materially from expectations and it may cause any or all of our forward-looking statements here or in other publications to be wrong. Factors that may affect future results include interest rate and currency exchange rate fluctuations, delay 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 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 related interpretation thereof, and unexpected growth in costs and expenses.
Certain assumptions made by Lundbeck are required by Danish Securities Law for full disclosure of material corporate information. Some assumptions, including assumptions relating to sales associated with product that is prescribed for unapproved uses, are made taking into account past performances of other similar drugs for similar disease states or past performance of the same drug in other regions where the product is currently marketed. It is important to note that although physicians may, as part of their freedom to practice medicine in the US, prescribe approved drugs for any use they deem appropriate, including unapproved uses, at Lundbeck, promotion of unapproved uses is strictly prohibited.