H. Lundbeck A/s Class A · OMXCOP:HLUN_A
H. Lundbeck A/s Class A — 9M 2019 Earnings Presentation
63 slides from H. Lundbeck A/s Class A's earnings presentation, November 2019
Slide 1: Investor & Analyst Presentation
Investor & Analyst Presentation November 2019
Slide 2: Company disclaimer
Company disclaimer 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 assu
Slide 3: Lundbeck in brief
Lundbeck in brief SPECIALIZED IN BRAIN HEALTH REVENUE (FY2018) GLOBAL PRESENCE ➢ ~70 years of expertise in CNS ➢ Headquartered in Denmark ➢ ~60% generated in North ➢ Among the first to develop and market ➢ Operating in 50+ countries America antipsychotics ➢ China 2nd largest market 70 yrs ~$2.8bn 50
Slide 4: 9M 2019 highlights: Continued strong performance of strategic brands
9M 2019 highlights: Continued strong performance of strategic brands and executing on our Expand and Invest to Grow strategy +29% +8% +7% Strategic Brands International Markets Europe • +24% in local currencies • Strategic brands grew 38% and • Strategic brands grew 27% and • Strategic brands consti
Slide 5: Lundbeck's four strategic brands added DKK 1.5 billion in sales in 9M 2019
Lundbeck’s four strategic brands* added DKK 1.5 billion in sales in 9M 2019 compared to 9M 2018 Strategic brands*: Up 29% (24% Strategic brands’ growth Sales split# in L.C.) to DKK 6,706 million (9M 2019 - DKKm) (9M 2019) representing 53% of revenue Brintellix/Trintellix: Up 31% to Brintellix/Trinte
Slide 6: Brintellix/Trintellix continues its significant growth momentum
Brintellix/Trintellix continues its significant growth momentum Brintellix/Trintellix sales Brintellix/Trintellix sales Grew 31% (28% in L.C.) to DKK 2,023 million in 9M 2019 (Quarterly - DKKm) (9M - DKKm) Continued solid traction in 800 +33% 2.400 North America volume share gains +31% Int. Markets
Slide 7: Rexulti shows significant growth driven by demand
Rexulti shows significant growth driven by demand - roll-out in new markets continues Rexulti sales* Rexulti sales* Grew 35% (27% in L.C.) to DKK (Quarterly - DKKm) (9M - DKKm) 1,620 million in 9M 2019 +30% 600 North America 1.800 +35% In the U.S., volume is up 22% Other regions y/y in Q31) 1.500 La
Slide 8: Abilify Maintena continues its robust growth
Abilify Maintena continues its robust growth Abilify Maintena sales* Abilify Maintena sales* Grew 23% (21% in L.C.) to DKK (Quarterly - DKKm) (9M - DKKm) 1,457 million in 9M 2019 +23% Abilify Maintena is Lundbeck’s 600 1.500 best selling product in Europe North America +24% Int. Markets LAI market c
Slide 9: Northera shows solid growth in sales and demand
Northera shows solid growth in sales and demand Northera sales Northera sales Grew 25% (18% in L.C.) to DKK (9M – DKKm) (Quarterly - DKKm) 1,606 million in 9M 2019 +38% 1.750 +25% Volume is up 18%1) compared to 600 Q3 2018 1.500 Northera impacted by normal 450 1.250 quarterly fluctuations driven by
Slide 10: North America – strategic brands up 28% in 9M 2019
North America – strategic brands up 28% in 9M 2019 North America revenue North America – strategic brands Declined 14% (19% in L.C.) to (9M - DKKm) (Quarterly – DKKm) DKK 6,937 million in 9M 2019 9.000 2.000 +32% Total sales impacted by generic -14% introductions of clobazam in 8.000 October 2018 7.
Slide 11: International Markets - strategic brands up 38% in 9M 2019
International Markets - strategic brands up 38% in 9M 2019 Grew 8% (8% in. L.C.) to DKK International Markets revenue International Markets – (9M - DKKm) strategic brands (DKKm) 3,022 million in 9M 2019 +8% Strategic brands# grew by 38% 3.200 240 to DKK 549 million and 2.800 +44% constituted 18% of
Slide 12: Europe – strategic brands up 27% in 9M 2019
Europe – strategic brands up 27% in 9M 2019 Grew 7% (6% in L.C.) to DKK Europe revenue Europe – strategic brands 2,417 million in 9M 2019 (9M - DKKm) (Quarterly – DKKm) Strategic brands# grew 27% to 2.600 +7% 500 DKK 1,245 million and 2.400 +25% constituted 51% of sales in 9M 2.200 400 2019 2.000 Ot
Slide 13: Expand and Invest to Grow has significantly strengthened the pipeline
Expand and Invest to Grow has significantly strengthened the pipeline Project Indication/label expansion Phase I Phase II (PoC) Phase III Filing Eptinezumab (anti-CGRP mAb) Migraine prevention Eptinezumab (anti-CGRP mAb) ”Treat and Prevent”, migraine - Brexpiprazole Agitation in Alzheimer’s disease
Slide 14: Lundbeck continues to execute on its Expand and Invest to Grow strategy through Alder
Lundbeck continues to execute on its Expand and Invest to Grow strategy through the acquisition of Alder BioPharmaceuticals Maintaining the former Eptinezumab Alder site in Bothell, just U.S. PDUFA action date: 21 Feb. 2020 outside of Seattle, Planned fillings: Canada (Q1.20), EU Washington in the U
Slide 15: Eptinezumab has the potential to transform the treatment paradigm for migraine prevention
Eptinezumab has the potential to transform the treatment paradigm for migraine prevention Eptinezumab will serve a large underserved patient population POWERFUL in a seriously debilitating disease ≥50%, ≥75% and Eptinezumab provides a differentiated clinical profile 100% reductions in migraine days
Slide 16: Two large pivotal studies demonstrated sustained efficacy and good tolerability
Two large pivotal studies including ~2,000 patients demonstrated sustained efficacy and good tolerability PROMISE 1 in Episodic Migraine PROMISE 2 in Chronic Migraine POWERFUL ≥50%, ≥75% and Patients Patients (N=1,072; baseline ~16 migraine days/month) 100% reductions in (N=888; baseline ~9 migraine
Slide 17: Significant reduction in monthly migraine days with eptinezumab
Significant reduction in monthly migraine days (MMDs) with eptinezumab at both 100mg and 300 mg PROMISE-1 PROMISE-2 Eptinezumab has shown high (Change from baseline in MMDs) (Change from baseline in MMDs) response rates, especially in adult 0 patients experiencing frequent, chronic migraine -2 ~60%
Slide 18: Eptinezumab demonstrated rapid onset from Day 1
Eptinezumab demonstrated rapid onset from Day 1 Key secondary endpoint: Percentage reduction on Day 1 PROMISE 1: Eptinezumab 100mg: 52.3% Eptinezumab 300mg: 54.9% Placebo: 24.5% PROMISE 2: Eptinezumab 100mg: 50.3% Eptinezumab 300mg: 51.6% *p=0.0159 vs placebo, unadjusted; †p=0.0312 vs placebo, unadj
Slide 19: Eptinezumab treatment well-tolerated across doses as compared to placebo
Eptinezumab treatment well-tolerated across doses as compared to placebo Safety and tolerability were evaluated in the PROMISE 1 and Adverse reaction occurring with an incidence of ≥2% for either PROMISE 2 trials dose of eptinezumab and ≥2% greater than placebo for PROMISE 1 In pooled data assessmen
Slide 20: Eptinezumab – Powerful, Fast and Sustained action
Eptinezumab – Powerful, Fast and Sustained action Eptinezumab promise Rapid onset of prevention by Day 1 driven by IV formulation and 100% bioavailability, addressing unmet medical need Strong response rate data from two phase III studies Good tolerability profile similar to placebo at all dosages O
Slide 21: Eptinezumab – Exciting upcoming newsflow with interesting LCM potential
Eptinezumab – Exciting upcoming newsflow with interesting LCM potential Regulatory: There are several life cycle management opportunities Indication U.S. PDUFA action date: 21 February 2020 RELIEF study - “Treat & Prevent” (NCT04152083) Assessing the efficacy of eptinezumab for acute migraine, defin
Slide 22: Migraine is one of the most debilitating diseases globally
Migraine is one of the most debilitating diseases globally Most disabling disease for ~18m individuals are people under 50 years - the candidates for prevention most productive years of – less than 50% are treated3 people’s lives1 Attacks usually last Significant unmet medical 4-72 hours2 needs rema
Slide 23: Migraine profoundly affects patients' lives
Migraine profoundly affects patients’ lives Patients value efficacy and onset of efficacy 93% say 86% say regardless of the mode of administration migraine affects migraine affects their ability to work1 their ability to maintain 87% rate effectiveness as relationships with important in determining
Slide 24: Migraine prevention represents a large and under served market
Migraine prevention represents a large and under served market Addressable population Migraine is divided into two major categories, episodic (major countries1) and chronic depending on the frequency of headaches >14 migraine 1-14 migraine days per month days per month ~134m – Migraine prevalence ~4
Slide 25: Both studies in brexpiprazole pivotal programme in PTSD commenced
Both studies in brexpiprazole pivotal programme in PTSD commenced Post-traumatic Stress Disorder (PTSD) ~8.6m U.S. adults affected, but ~80% estimated to be undiagnosed Growing economic and social burden of care Inadequate response with approved SSRIs - polypharmacy the norm Study To evaluate the ef
Slide 26: Brexpiprazole PoC study in borderline personality disorder commenced
Brexpiprazole PoC study in borderline personality disorder commenced Borderline Personality Disorder (BPD) Pharmacotherapy focuses on key symptoms (aggression, irritability, depressed mood, behavioural dyscontrol and affective dysregulation, anxiety, psychoticism and hostility) Substantial unmet med
Slide 27: Third study in brexpiprazole pivotal programme in agitation Alzheimer's
Third study in brexpiprazole pivotal programme in agitation Alzheimer's progresses as planned Agitation in Alzheimer’s (AAD) >20% of individuals in a community setting and >50% of nursing home residents with dementia have agitation 1.5-2m dementia patients in the U.S. with agitation / aggression No
Slide 28: Abide - adding new drug discovery platform
Abide - adding new drug discovery platform with potential to deliver first-in-class compounds across multiple CNS indications The transaction: Serine hydrolase (S-H) Enzyme Superfamily Upfront payment: USD 250 million Now Lundbeck La Jolla Research One of the largest and most Center diverse enzyme c
Slide 29: Lundbeck La Jolla Research Center now established
Lundbeck La Jolla Research Center now established Transition of Abide to pure discovery site is completed Lu AG06466 currently in phase IIa progressing as planned Headline results due 2020 Strong progress of the early portfolio FIH for next project expected in 2020 29
Slide 30: First Target: Endocannabinoid modulation through MGLL inhibition
First Target: Endocannabinoid modulation through MGLL inhibition - A compelling therapeutic target for a wide range of CNS diseases Monoacylglycerol lipase inhibitors MGLL inhibition Multiple future potential (MGLLi) regulate endocannabinoid indications in psychiatry and tone, which regulates Increa
Slide 31: Lu AG06466: First-In-Class drug with broad potential in CNS
Lu AG06466: First-In-Class drug with broad potential in CNS Lu AG06466 modulates the Exploratory phase IIa trial ongoing Lu AG06466: First-in-Class drug (NCT03625453) with broad potential in CNS endocannabinoid system preferentially in areas where Initiated in October 2018 neuronal circuits are exce
Slide 32: Foliglurax – an interesting new pipeline asset in Parkinson's
Foliglurax – an interesting new pipeline asset currently in PoC testing in Parkinson’s patients Increase activity of a specific Levodopa-induced Motor complications of glutamatergic target (mGluR4) dyskinesia levodopa Symptomatic treatment of OFF-time in Parkinson’s and levodopa induced PD-LID is th
Slide 33: Lu AF11167: Addresses negative symptoms of schizophrenia
Lu AF11167: Addresses negative symptoms of schizophrenia that trouble patients most Negative symptoms most Prevalence bothersome symptom for patients (major countries) Phosphodiesterase 10A inhibitor with schizophrenia (PDE10Ai) Primary cause for inability to live Potential novel MoA for the treatme
Slide 34: Lu AF82422: Potential disease modifying antibody in Parkinson's
Lu AF82422: Potential disease modifying antibody in Parkinson’s Pathogenesis of Parkinson’s (PD) Ongoing phase I study1: Lu AF82422 is a human IgG1 mAb that recognizes all major Healthy non-Japanese and alpha-synuclein forms including Lewy body Genetic Japanese subjects and in Cellular aging aggrega
Slide 35: Lu AF28996: A potentially highly efficacious oral treatment for Parkinson's
Lu AF28996: A potentially highly efficacious oral treatment for Parkinson’s patients experiencing motor fluctuations Ongoing phase I study1: Lu AF28996 is highly potent agonist at the D1- and D2-type Single- and sequential- dopamine receptors ascending-dose of Lu AF28996 to healthy young men D1/D2-t
Slide 36: Lu AG06466 in phase Ib study in neuropathic pain
Lu AG06466 in phase Ib study in neuropathic pain MGLLi have shown to reduce Neuropathic pain (NP) Ongoing phase I study1: pain in preclinical models of NP results from damage to the Designed to identify a titration inflammatory, post-surgical, nervous system in the brain or spinal regimen of Lu AG06
Slide 37: Three new projects enter first-in-humans testing
Three new projects enter first-in-humans testing Lu AF884341) Lu AF879082) Lu AG09222 Lu AF88434 is a potent and Lu AF87908 is a humanized Lu AG09222 mAb inhibits selective phosphodiesterase IgG1 Tau mAb pituitary adenylate cyclase- PDE1b inhibitor (PDE1b-i) activating polypeptide SAD study in healt
Slide 38: Potential to build a migraine franchise with ALD1910 PACAP mAb
Potential to build a migraine franchise in the future with ALD1910 early- stage PACAP2 inhibitor mAb A differentiated approach to migraine prevention Highly potent and selective humanized PACAP binding antibody Preclinical data1 indicate that PACAP2 and CGRP3 have differentiated pharmacology with re
Slide 39: Finance
Finance x PATIENTS ON INNOVATIONS | PROFITABILITY oncanizarion a=) | 30 USED icioe TES a SIBLE2 cae 2014 x SLOBAL LEADERSHIP PSYCHIATRY NEUROLOGY IMPROVING LIVES OF PATIENTS ANNUAL REPORT 2016, 39
Slide 40: Alder represents a compelling opportunity to deliver long term sustainable growth
Alder represents a compelling opportunity to deliver long term sustainable growth Alder-related items impacting Launch of eptinezumab will the 2019 guidance strengthen Lundbeck’s growth profile for years to come Transaction costs: Approximately DKK 200 million Short term earnings dilution from inves
Slide 41: Strong financial performance
Strong financial performance Strong growth for strategic DKKm 9M 2019 Δ% y/y Q3 2019 Δ% y/y brands of 29% Revenue 12,615 (9%) 4,135 (11%) Gross margin 80.7% -0.6pp 80.7% - Onfi decline of 69% in line Gross margin (core) 85.7% - 85.9% +0.9pp with expectations Operating expenses 6,862 2% 2,327 2% Disc
Slide 42: Lundbeck's financial guidance for 2019 raised
Lundbeck’s financial guidance for 2019 raised Continued strong growth for strategic 2019 financial guidance brands Previous Revised 2018 ~ ∆% 2019e 2019e Expected negative impact from generic (DKKm) (y/y) (DKKbn) (DKKbn) erosion Revenue 18,117 16.3 − 16.7 16.7 − 16.9 -8% − -7% Effects from hedging i
Slide 43: Solid financial position provides flexibility
Solid financial position provides flexibility Net cash flow: Down DKK 1,326 million Net cash flow to DKK -632 million (Quarterly - DKKm) 1.600 FY 2019 cash flow will be negatively impacted by 1.200 Lower EBITDA 800 Acquisition of Abide and Alder 400 Dividend payout for 2018 0 Payment of DoJ settleme
Slide 44: Europe and International Markets have returned to strong dynamic growth
Europe and International Markets have returned to strong dynamic growth Regional growth Sales by region# Strong improvement in both growth and profitability in (9M 2019 - DKKm) (9M 2019) Europe International Markets shows North America -14% 20% solid growth driven by Australia, Japan, Korea and Sout
Slide 45: 9M 2019: Continued strong growth from strategic brands and negative impact from generic erosion
9M 2019: Continued strong growth from strategic brands and negative impact from generic erosion on mature products as expected Revenue Core EBIT Revenue: Down 9% (9% in L.C.) (9M – DKKm) (9M – DKKm) to DKK 12.6 billion -9% 14.000 5.500 -23% Performance driven by strategic 13.000 5.000 brands mitigat
Slide 46: Cash flow impacted by acquisition of Abide, DoJ payment and higher dividend pay-out
Cash flow impacted by acquisition of Abide, DoJ payment and higher dividend pay-out Cash flow from operating Operating cash flow Net cash flow activities: Declined 52% and (Quarterly - DKKm) (Quarterly - DKKm) reached DKK 2,215 million in 9M 2.400 1.600 2019 following negative impact from working ca
Slide 47: Core gross margin improved in Q3 2019 despite LOE on Onfi
Core gross margin improved in Q3 2019 despite LOE on Onfi Cost of sales and gross margin (core) 1.000 Core gross margin (%) 90% Cost of Sales (core): Down 10% Cost of sales (DKKm) to DKK 1,798 million in 9M 2019 Gross margin (core): Unchanged 500 85% from 9M 2018 Operational expenses (core OPEX): In
Slide 48: Balance sheet is strong with limited debt and strong operating cash flow
Balance sheet is strong with limited debt and strong operating cash flow Assets (DKKbn) Liabilities (DKKbn) Cash & cash equivalents: Declines following the acquisition of Abide, 23,0 23,5 23,0 23,5 increased dividend pay-out and payment of DoJ settlement 8,0 Intangible assets 10,0 Working capital: D
Slide 49: Selected deliverables for 2019
Selected deliverables for 2019 Start PoC study on Lu AF11167 in schizophrenia Commence the launch of Rxulti/Rexulti in Europe Pivotal data for Rexulti in bipolar mania Headline results (PoC) for foliglurax in Parkinson’s (delayed to H1 2020) Continue LCM activities on brexpiprazole Obtain approval o
Slide 50: Lundbeck continues its mission to restore brain health
Lundbeck continues its mission to restore brain health, leveraging a strong platform and heritage to grow Solid financial foundation Highly profitable with strong cash generation Solid growth across key products Global footprint with growth in all regions of the world Long-standing reputation with p
Slide 51: Thank you!
Thank you!
Slide 52: Total molecule sales (gross) - USDm
Total molecule sales (gross) - USDm 1.250 1.200 1.000 1.000 +58% 800 750 +80% 600 500 400 250 200 0 0 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 1.000 Abilify Maintena: US approval (Feb. 2013); EU approval 800 (Nov. 2013) +161% 600 Brintellix/Trintellix: US approval (Oct. 2013); EU approval 4
Slide 53: Lundbeck's strategic brands deliver strong double-digit revenue growth
Lundbeck’s strategic brands deliver strong double-digit revenue growth +33% 750 North America 800 Europe+Int. Markets +24% 600 North America 500 Europe+Int. Markets 400 250 200 0 0 Q3.17 Q3.18 Q3.19 Q3.17 Q3.18 Q3.19 +38% 800 600 +30% 600 North America Europe+Int. Markets 400 300 200 0 0 Q3.17 Q3.18
Slide 54: Solid volume growth in the U.S. for all strategic brands
Solid volume growth in the U.S. for all strategic brands +17% 100.000 +21% 800.000 +22% +24% 75.000 600.000 50.000 400.000 25.000 200.000 0 0 Q3.17 Q3.18 Q3.19 Q3.17 Q3.18 Q3.19 +18% 300.000 12.000 -14% +22% +31% 9.000 200.000 6.000 100.000 3.000 0 0 Q3.17 Q3.18 Q3.19 Q3.17 Q3.18 Q3.19 Source: Symph
Slide 55: Onfi impacted negatively by introductions of generic clobazam
Onfi impacted negatively by introductions of generic clobazam Onfi sales Onfi demand Declined 69% (70% in L.C.) to DKK 840 million in 9M 2019 (Quarterly - DKKm) (Quarterly – TRx) 1.000 150.000 Numerous generic tablets and -76% -80% oral suspensions launched from October 2018 800 Aggressive generic p
Slide 56: 9M 2019 and FY 2018 - Product distribution of revenue
9M 2019 and FY 2018 - Product distribution of revenue DKKm FY 2018 FY 2017 9M 2019 9M 2018 Growth Growth in local % of total currencies TOTAL: Abilify Maintena 1,595 1,333 1,457 1,180 23% 21% 12% Brintellix/Trintellix 2,182 1,663 2,023 1,543 31% 28% 16% Cipralex/Lexapro 2,257 2,392 1,809 1,894 (4%)
Slide 57: Geographic distribution of revenue - 1
9M 2019 and FY 2018 - Geographic distribution of revenue - 1 DKKm FY 2018 FY 2017 9M 2019 9M 2018 Growth Growth in local % of total currencies NORTH AMERICA: Abilify Maintena 695 591 618 499 24% 17% 9% Trintellix 1,239 974 1,103 853 29% 22% 16% Northera 1,806 1,644 1,606 1,282 25% 18% 23% Onfi 3,165
Slide 58: Geographic distribution of revenue - 2
9M 2019 and FY 2018 - Geographic distribution of revenue - 2 DKKm FY 2018 FY 2017 9M 2019 9M 2018 Growth Growth in local % of total currencies EUROPE: Abilify Maintena 770 637 715 587 22% 21% 30% Brintellix 547 376 523 396 32% 31% 22% Cipralex 572 643 422 467 (10%) (10%) 17% Rexulti/Rxulti - - 7 - -
Slide 59: 9M 2019 and FY 2018 - Cash generation
9M 2019 and FY 2018 - Cash generation DKKm 9M 2019 9M 2018 FY 2018 Cash flows from operating activities 2,215 4,575 5,981 Cash flows from investing activities (398) (2,298) (2,907) Cash flows from operating and investing activities (free cash flow) 1,817 2,277 3,074 Cash flows from financing activit
Slide 60: 9M 2019 and FY 2018 - Balance sheet and dividend
9M 2019 and FY 2018 - Balance sheet and dividend Dividend (DKK) DKKm 30.09.2019 31.12.2018 Intangible assets 9,962 8,023 15 5% Dividend Other non-current assets 3,706 3,339 12 4% Yield (r.h.s.) Current assets 9,803 11,649 9 3% Assets 23,471 23,011 6 2% Equity 14,367 14,251 3 1% Non-current liabiliti
Slide 61: Costs – Full year figures
Costs – Full year figures DKKm 2018 2017 2016 2015 2018 (∆%) 2017 (∆%) Revenue 18,117 17,234 15,634 14,594 5% 10% Cost of sales 3,456 3,881 4,082 5,395 (11%) (5%) Sales & Distribution costs 5,277 5,649 5,488 6,706 (7%) 3% Administrative expenses 762 833 805 1,160 (9%) 3% R&D costs 3,277 2,705 2,967
Slide 62: Financial terms and territory structure of the Otsuka alliance
Financial terms and territory structure of the Otsuka alliance entered in November 2011 Milestone payments Lundbeck’s share of revenue and costs Payment to: Abilify Abilify Maintena Rexulti Selincro Maintena Rexulti Selincro Development EUR USD 200m USD 600m3) USA 20% 45% - milestones/upfront 105m*
Slide 63: For more information, please contact Investor Relations
For more information, please contact Investor Relations Listed on the Copenhagen Stock Number of shares 199,136,725 IR contact Exchange since 18 June 1999 Treasury shares 366,019 (0.2%) Palle Holm Olesen Insider holdings 122,665 (0.06%) VP; Head of Investor Relations Deutsche Bank sponsored ADR Clas