H. Lundbeck A/s Class A · OMXCOP:HLUN_A
H. Lundbeck A/s Class A — Q1 2019 Earnings Presentation
47 slides from H. Lundbeck A/s Class A's earnings presentation, May 2019
Slide 1: Investor & Analyst Presentation Q1 2019
Investor & Analyst Presentation - Q1 2019 May 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: Q1 2019 highlights: Continued strong performance of strategic brands
Q1 2019 highlights: Continued strong performance of strategic brands and executing on Expand and Invest to Grow +24% +13% +10% Strategic Brands International Markets Europe +19% in local currencies +13% in local currencies +10% in local currencies Strong growth in all regions Minor positive impact f
Slide 5: Lundbeck's four strategic brands added DKK 0.4 billion in sales
Lundbeck’s four strategic brands* added DKK 0.4 billion in sales in Q1 2019 compared to Q1 2018 Strategic brands*: Up 24% (19% Strategic brands’ growth Sales by product# in L.C.) to DKK 1,979 million (Q1 2019 - DKKm) (Q1 2019) representing 46% of revenue# Brintellix/Trintellix: Up 29% to 11% Brintel
Slide 6: Brintellix/Trintellix continues consistent strong momentum
Brintellix/Trintellix continues consistent strong momentum Grew 29% (27% in L.C.) to DKK Brintellix/Trintellix sales Brintellix/Trintellix sales 601 million in Q1 2019 (Quarterly - DKKm) (FY - DKKm) Continued solid traction in 800 2.400 +31% volume share gains North America >3%: Finland, Italy, Sout
Slide 7: Rexulti shows significant growth driven by demand
Rexulti shows significant growth driven by demand and roll-out in new markets continues Rexulti sales Rexulti sales Grew 30% (22% in L.C.) to DKK (Quarterly - DKKm) (FY - DKKm) 481 million in Q1 2019 +38% 600 North America 1.800 In the U.S., volume is up 28% Other +30% y/y but down 1% q/q in line 1.
Slide 8: Abilify Maintena continues its solid growth
Abilify Maintena continues its solid growth Abilify Maintena sales Abilify Maintena sales Grew 27% (24% in L.C.) to DKK 462 million in Q1 2019 (Quarterly - DKKm) (FY - DKKm) Largest markets are the U.S., 500 +27% 1.800 North America +20% Australia, Canada, France and Spain which are also the main In
Slide 9: Northera shows solid volume growth but negative revenue impact
Northera shows solid volume growth but negative impact on revenue from quarterly fluctuations Northera sales Northera demand Grew 10% (3% in L.C.) to DKK (Quarterly - TRx) (Quarterly - DKKm) 435 million in Q1 2019 600 12.000 Volume is up 16% y/y but down +10% +16% 5% q/q in line with normal Q1 slowd
Slide 10: Europe and International Markets have returned to strong growth
Europe and International Markets have returned to strong dynamic growth Regional growth Sales by region# Strong improvement in both growth and profitability in (Q1 2019 - DKKm) (Q1 2019) Europe North America impacted by North America -17% 20% generic erosion, mainly Onfi International Markets show s
Slide 11: Promising early-stage pipeline
Promising early-stage pipeline with efforts under way to ensure depth in all phases of development Project Indication Phase I Phase II (PoC) Phase III (pivotal) Exp. filing Brexpiprazole Agitation in Alzheimer’s disease ~2021 Brexpiprazole PTSD ≥2025 Foliglurax (MGLUR4 PAM) Parkinson’s ~2025 Lu AF11
Slide 12: Executing on Expand and Invest to Grow
Executing on Expand and Invest to Grow Abide Therapeutics is a company Lundbeck has entered into an agreement to acquire, where closing is pending 12
Slide 13: 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 The deal is subject to Hart- Scott-Rodino review Focused on Serine Hydrolase (S-H) One of the largest and most biol
Slide 14: 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 15: ABX-1431: First-In-Class Drug with Broad Potential in CNS
ABX-1431: First-In-Class Drug with Broad Potential in CNS ABX-1431 modulates the Exploratory phase IIa trial ongoing ABX-1431: First-in-Class drug (NCT03625453) with broad potential in CNS endocannabinoid system preferentially in areas where Initiated in October 2018 neuronal circuits are excessivel
Slide 16: Brexpiprazole in pivotal programme for agitation in Alzheimer's
Brexpiprazole in pivotal programme for the treatment of agitation in Alzheimer’s Ongoing phase III study1: Agitation in Alzheimer’s Two studies in the pivotal (AAD) programme finalized Compares the efficacy of 2 doses of brexpiprazole with >20% of individuals in a A third study commenced In placebo
Slide 17: Positive phase II results for brexpiprazole and sertraline in PTSD
Positive phase II headline results for the combination treatment of brexpiprazole and sertraline for treatment of PTSD Post-Traumatic Stress Combination of brexpiprazole and sertraline demonstrated Disorder (PTSD) improvement in symptoms of ~8.6m U.S. adults affected1) PTSD versus placebo (p<0.01) o
Slide 18: Comprehensive LCM programme for brexpiprazole
Comprehensive LCM programme ongoing for brexpiprazole for further product value expansion Brexpiprazole • Several clinical programmes ongoing to address unmet medical needs and aiming for product value maximation Agitation in • Programme to compare the efficacy of 2 doses (2 mg and 3 mg) of brexpipr
Slide 19: Foliglurax in PoC testing in Parkinson's patients
Foliglurax – an interesting new pipeline asset currently in PoC testing in Parkinson’s patients Foliglurax Levodopa-induced Motor complications of Increase activity of a specific dyskinesia levodopa glutamatergic target (mGluR4) PD-LID is the most important unmet Symptomatic treatment of OFF-time me
Slide 20: 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 21: Lu AF82422: Potential disease modifying antibody in Parkinson's
Lu AF82422: Potential disease modifying antibody in Parkinson’s Pathogenesis of Parkinson’s Ongoing phase I study1: Lu AF82422 is a human IgG1 (PD) mAb that recognizes all major Healthy non-Japanese and alpha-synuclein forms including Lewy body Genetic Japanese subjects and in Cellular aging aggrega
Slide 22: Lu AF28996: Oral treatment for Parkinson's motor fluctuations
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 23: ABX-1431 in phase Ib study in neuropathic pain
ABX-1431 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 ABX-1431
Slide 24: New tools to potentially improve data translation in drug development
New tools to potentially improve data translation, increase efficiency in drug development and ultimately improve patient outcome Patient experience Drug Clinical Disease Pre-clinical interception Diagnosis Treatment Follow-up discovery development Designing, screening and Target and Digital endpoin
Slide 25: 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, 25
Slide 26: Q1 2019: Strong growth from strategic brands, generic erosion impact
Q1 2019: Continued strong growth from strategic brands and negative impact from generic erosion on mature products as expected Revenue Core EBIT Revenue: Down 8% (6% in L.C.) (Quarterly – DKKm) (Quarterly – DKKm) to DKK 4.2 billion 5.000 2.000 Performance driven by strategic -8% -22% brands mitigati
Slide 27: Strong focus on cost spend, cost ratios impacted by lower revenue
Still strong focus on cost spend, but cost ratios impacted by lower revenue following generic erosion Gross margin: Down from 82.0% DKKm Q1 2019 Δ% y/y FY 2018 to 80.5% Revenue 4,234 (8%) 18,117 SG&A ratio: Up from 31.4% to Gross margin 80.5% -1.5pp 80.9% 34.5% Operating expenses 2,209 3% 9,316 R&D
Slide 28: Continued solid operating cash flow
Continued solid operating cash flow Cash flow from operating Operating cash flow Net cash flow activities: Reached DKK 837 million (Quarterly - DKKm) (Quarterly - DKKm) following negative impact from 2.400 800 working capital 2017 2.000 400 Working capital: Lower gross-to- 2018 net accruals in the U
Slide 29: Strong financial position provides flexibility
Strong financial position provides flexibility to pursue further growth Net cash flow: Down DKK 1,264 Dividend and Net cash and million to DKK 1,644 million free cash flow (DKKm) Net debt/EBITDA 8.000 3 Net debt/EBITDA: -0.8x based on 4.000 rolling four quarters Lundbeck manages its capital 3.000 6.
Slide 30: Financial guidance for 2019
Lundbeck’s financial guidance for 2019 revenue is narrowed, EBIT is maintained Continued growth for strategic brands 2019 financial guidance 2018 2019e ~ ∆% Significant negative impact from (DKKm) (DKKbn) (y/y) generic erosion Revenue 18,117 16.3 − 16.7 -10% − -8% Effects from hedging is a loss of D
Slide 31: Selected deliverables
Selected deliverables Start PoC study on Lu AF11167 in schizophrenia Commence the launch of Rxulti/Rexulti in Europe Abide acquisition – acting in line with strategy Pivotal data for Rexulti in bipolar mania Headline results (PoC) for foliglurax in Parkinson’s (postponed to turn of the year) Obtain
Slide 32: Lundbeck continues its mission to restore brain health
Lundbeck continues its mission to restore brain health, leveraging a strong platform and heritage to grow Strong financial foundation Highly profitable with strong cash generation, no debt Solid growth across key products Global footprint with growth in all regions of the world Long-standing reputat
Slide 33: Thank you!
Thank you!
Slide 34: Strategic brands deliver solid double-digit growth
Lundbeck’s strategic brands deliver solid double-digit growth 500 +27% Europe + Int. Markets North America +29% 600 Europe + Int. Markets North America 400 300 400 200 200 100 0 0 Q1.17 Q1.18 Q1.19 Q1.17 Q1.18 Q1.19 600 +30% 450 North America Europe + Int. Markets +10% 400 300 200 150 0 0 Q1.17 Q1.1
Slide 35: Onfi impacted negatively by generic clobazam
Onfi impacted negatively by introductions of generic clobazam Onfi sales Onfi demand Declined 64% (66% in L.C.) to DKK 325 million in Q1 2019 (Quarterly - DKKm) (Quarterly – TRx) 1.000 150.000 -66% Numerous generic tablets and -64% oral suspensions launched from October 2018 800 Aggressive generic p
Slide 36: North America impacted by generic erosion
North America impacted by generic erosion – strategic brands up 22% North America revenue North America – strategic brands Declined 21% in L.C. (17% (Q1 - DKKm) (Quarterly – DKKm) reported) to DKK 2,168 million in Q1 2019 3.000 2.000 -17% Impacted by generic +22% introductions of clobazam in 1.500 O
Slide 37: International Markets grew 13% in local currencies
International Markets grew 13% in local currencies driven by strategic brands – up 13% reported International Markets – International Markets revenue Grew 13% in L.C. (13% strategic brands (Q1 - DKKm) reported) to DKK 1,059 million (DKKm) in Q1 2019 1.200 180 +25% +13% Strategic brands# grew by 25%
Slide 38: Europe grew 10% driven by Abilify Maintena and Brintellix
Europe grew 10% in both local currencies and reported in Q1 2019 driven by Abilify Maintena and Brintellix Grew 10% in L.C. (10% Europe revenue Europe – strategic brands reported) to DKK 819 million in (Q1 - DKKm) (Quarterly – DKKm) Q1 2019 1.000 500 Strategic brands# grew 32% and +10% +32% constitu
Slide 39: Hedging at Lundbeck
Hedging at Lundbeck USD, CNY and CAD vs. Development of Lundbeck’s key The main currency risk concerns DKK currencies fluctuations in USD, CNY and CAD followed by JPY and KRW 110 Key 2018 Q1.18 Q1.19 Spot currency Avg. Avg. Avg. rate Current hedging rates: USD 105 (6.33), CNY (0.92) and CAD USD 632
Slide 40: Product distribution of revenue
Q1 2019 and FY 2018 - Product distribution of revenue DKKm FY 2018 FY 2017 Q1 2019 Q1 2018 Growth Growth in local % of total currencies TOTAL: Abilify Maintena 1,595 1,333 462 364 27% 24% 11% Brintellix/Trintellix 2,182 1,663 601 467 29% 27% 14% Cipralex/Lexapro 2,257 2,392 619 665 (7%) (7%) 15% Nor
Slide 41: Geographic distribution of revenue - 1
Q1 2019 and FY 2018 - Geographic distribution of revenue - 1 DKKm FY 2018 FY 2017 Q1 2019 Q1 2018 Growth Growth in local % of total currencies NORTH AMERICA: Abilify Maintena 695 591 184 151 22% 15% 8% Trintellix 1,239 974 311 240 29% 23% 14% Northera 1,806 1,644 435 396 10% 3% 20% Onfi 3,165 3,022
Slide 42: Geographic distribution of revenue - 2
Q1 2019 and FY 2018 - Geographic distribution of revenue - 2 DKKm FY 2018 FY 2017 Q1 2019 Q1 2018 Growth Growth in local % of total currencies EUROPE: Abilify Maintena 770 637 236 184 28% 28% 29% Brintellix 547 376 167 122 37% 37% 20% Cipralex 572 643 141 163 (14%) (14%) 17% Rexulti/Rxulti - - 1 - -
Slide 43: Cash generation
Q1 2019 and FY 2018 - Cash generation DKKm Q1 2019 Q1 2018 FY 2018 Cash flows from operating activities 837 2,003 5,981 Cash flows from investing activities (63) (795) (2,907) Cash flows from operating and investing activities (free cash flow) 774 1,208 3,074 Cash flows from financing activities (2,
Slide 44: Balance sheet and dividend
Q1 2019 and FY 2018 - Balance sheet and dividend Dividend (DKK) DKKm 31.03.2019 31.12.2018 Intangible assets 7,910 8,023 15 5% Dividend Other non-current assets 3,715 3,339 12 4% Yield (r.h.s.) Current assets 10,097 11,649 9 3% Assets 21,722 23,011 6 2% Equity 12,719 14,251 3 1% Non-current liabilit
Slide 45: 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 46: Financial terms 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 47: For more information, please contact Investor Relations
For more information, please contact Investor Relations Listed on the Copenhagen Stock Number of shares 199,110,627 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