H. Lundbeck A/s Class A · OMXCOP:HLUN_A
H. Lundbeck A/s Class A — Lundbeck — Q1 2020 Earnings Presentation
60 slides from H. Lundbeck A/s Class A's earnings presentation, May 12, 2020
Slide 1: Investor Presentation Q1 2020
Investor Presentation Q1 2020 COPENHAGEN, 12 MAY 2020 Lundbeck1
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 at a glance
Lundbeck at a glance History Ownership Specialized in brain health Lundbeck was founded by Hans Largest shareholder is the ~70 years of expertise in treatments of Lundbeck in 1915 in Lundbeck Foundation, which brain diseases Copenhagen annually grants DKK ~500 million Among the first to develop and
Slide 4: Diverse portfolio across products and regions with geographical footprint aligned to global CNS market
HIGHLIGHTS AND STRATEGIC UPDATE Diverse portfolio across products and regions with geographical footprint well aligned to global CNS market Lundbeck product diversity Lundbeck geographic split Global CNS market split(1) Sales by product (Q1 2020) Sales by region (Q1 2020) Sales by region (FY 2018) S
Slide 5: Strong financial performance in Q1 2020
HIGHLIGHTS AND STRATEGY UPDATE Strong financial performance in Q1 2020 Revenue Strategic brands Core EBIT Core EBIT margin DKK 4,564 million DKK 2,680 million DKK 1,357 million 29.7% +8% +35% -4% -3.6pp • Revenue grew due to strongly increased demand of medicines • Growth was partly due to increase
Slide 6: Lundbeck's revenue shows solid growth momentum, earnings impacted by Vyepti launch costs
HIGHLIGHTS AND STRATEGY UPDATE Lundbeck’s revenue shows solid growth momentum, eanings impacted by Vyepti launch costs Revenue performance Core EBIT performance (DKKm) (DKKm) 20.000 -6% 8.000 -19% 15.000 6.000 10.000 4.000 +5% +8% -4% 5.000 2.000 +4% 0 0 FY 2018 FY 2019 Q4.18 Q4.19 Q1.19 Q1.20 FY 20
Slide 7: Update on COVID-19
HIGHLIGHTS AND STRATEGY UPDATE Update on COVID-19 Lundbeck’s priorities have been and still are the health and safety of our employees, product supply to ensure patients’ access to medicine and business continuity Q1 2020: Current business: • Safeguarding product supply, production, • Continued stro
Slide 8: Vyepti launch update – very early days, but encouraging interest
HIGHLIGHTS AND STRATEGY UPDATE Vyepti launch update – very early days, but encouraging interest • Vyepti was made available to patients on 6 April 2020, and the first patients received therapy on 7 April • Several key clinics received Vyepti already in the first week and many more since • Phased lau
Slide 9: Maximising the value of Vyepti
HIGHLIGHTS AND STRATEGY UPDATE Maximising the value of Vyepti • RELIEF study continues to randomize patients. Conclude Q4.20 • Indication expansion in cluster headache planned to start Q4.20 • European market access study (phase IIIb) to start mid-2020 • First phase of Japanese PK/PD study finalized
Slide 10: Robust financial performance in Q1 2020
FINANCE – Q1 2020 PERFORMANCE Robust financial performance in Q1 2020 - Investments in new products and reduced exposure to generic erosion Revenue • Continued strong momentum for strategic DKKm Q1 2020 Δ% y/y FY 2019 Δ% y/y brands Revenue 4,564 8% 17,036 (6%) • Positive impact from patient refillin
Slide 11: Revenue up 22% excluding sales from U.S. neurology products currently exposed to LOE
FINANCE - Q1 2020 PERFORMANCE Revenue up 22% excluding sales from U.S. neurology products* currently exposed to impact from LOE Revenue distribution • Strategic brands up 35% in the quarter (Q1 2020 - DKKm) • Excluding U.S. neurology products* with LOE, revenue up by 22% +22% *Onfi, Sabril, Xenazine
Slide 12: Lundbeck's four strategic brands added DKK 701 million in additional revenue
FINANCE - Q1 2020 PERFORMANCE Lundbeck’s four strategic brands added DKK 701 million in additional revenue in Q1 2020 Strategic brands’ growth (Q1 2020 – DKKm and CER growth) • Strategic brands*: Up 35% (32% in L.C.) to DKK 2,680 million representing 59% of total revenue Rexulti/Rxulti +43% • Rexult
Slide 13: Abilify Maintena continues its robust growth
FINANCE – Q1 2020 PERFORMANCE Abilify Maintena continues its robust growth but also benefitting from inventory increases in the U.S. following COVID-19 • Grew 33% (30% in L.C.) to DKK 612 Abilify Maintena sales per region* Abilify Maintena sales* million in Q1 2020 (Quarterly - DKKm) (FY - DKKm) • C
Slide 14: Brintellix/Trintellix continues its significant growth momentum
FINANCE – Q1 2020 PERFORMANCE Brintellix/Trintellix continues its significant growth momentum • Grew 36% (34% in L.C.) to DKK 817 Brintellix/Trintellix sales per region Brintellix/Trintellix sales million in Q1 2020 (Quarterly - DKKm) (FY - DKKm) 1.000 3.000 +30% • Continued solid traction in value
Slide 15: Northera shows solid growth in sales and demand
FINANCE – Q1 2020 PERFORMANCE Northera shows solid growth in sales and demand • Grew 24% (20% in L.C.) to Northera sales Northera sales DKK 538 million in Q1 2020 (Quarterly - DKKm) (FY – DKKm) • Volume is up 8%1) compared to 900 2.700 +29% Q1 2019 +24% • Northera impacted by normal quarterly fluctu
Slide 16: Rexulti shows significant growth driven by demand
FINANCE – Q1 2020 PERFORMANCE Rexulti shows significant growth mainly driven by demand, but is also benefitting from inventory increases in the U.S. • Grew 48% (43% in L.C.) to DKK 713 Rexulti sales per region* Rexulti sales* million in Q1 2020 (Quarterly - DKKm) (FY - DKKm) • In the U.S., volume is
Slide 17: All regions have returned to solid growth
FINANCE – Q1 2020 PERFORMANCE All regions have returned to solid growth Regional growth Sales by region# • Strong improvement in both growth and profitability in Europe (Q1 2020 - DKKm) (Q1 2020) • International Markets shows solid growth driven by e.g. Australia and North America +10% Japan 20% • N
Slide 18: Solid growth in all three regions
FINANCE – Q1 2020 PERFORMANCE Solid growth in all three regions North America revenue International Markets revenue Europe revenue (Q1 - DKKm) (Q1 - DKKm) (Q1 - DKKm) 3.000 1.000 1.500 +9% +10% +16% 2.500 Other Other products products 2.000 1.000 Other products 1.500 500 1.000 500 500 0 0 0 Q1.19 Q1
Slide 19: Solid financial position
FINANCE – Q1 2020 PERFORMANCE Solid financial position Selected cash flow figures Selected balance sheet figures DKKm Q1 2020 Q1 2019 FY 2019 DKKm 31.03.2020 31.12.2019 Intangible assets 22,652 23,399 Cash flows from 188 837 2,609 operating activities Total assets 34,867 35,757 Equity 14,074 14,554
Slide 20: 2020 guidance maintained
FINANCE – Q1 2020 PERFORMANCE 2020 guidance maintained • Continued strong growth for strategic brands 2020 financial guidance • Increased uncertainty following the COVID-19 pandemic DKK FY 2019 FY 2020 actual guidance • Substantial investments in launch Revenue 17,036m 17.4 ̶ 18.0bn and R&D activiti
Slide 21: Project status
RESEARCH AND DEVELOPMENT Project status All studies heavily impacted by COVID-19 Intensive LCM programme for Rexulti continues Continued emphasize on Lundbeck La Jolla research platform to reveal full potential of serine hydrolases • Focused effort for Lu AG06466 in exploratory clinical studies in p
Slide 22: Brintellix/Trintellix: COMPLETE study finalized with significant reduction in emotional blunting in MDD
RESEARCH AND DEVELOPMENT Brintellix/Trintellix: COMPLETE study finalized with significant reduction in emotional blunting in MDD • Nearly half of patients treated with SSRIs or SNRIs report suffering from ‘blunted emotions’ • Blunted emotions have real functional consequences for patients’ social, f
Slide 23: Migraine prevention represents a large and under served market
VYEPTI - EPTINEZUMAB Migraine prevention represents a large and under served market Migraine is divided into two major categories, episodic Addressable population and chronic depending on the frequency of headaches (major countries1) ~134m – Migraine prevalence 1-14 headache days >14 headache days p
Slide 24: Ready to launch Vyepti in the U.S.
VYEPTI - EPTINEZUMAB Ready to launch Vyepti in the U.S. Migraine prevention market: 13.9m1, 2 Diagnosed, 47% untreated Breakout of 27% treated group Untreated, Preventive Treatment % of Use3 undiagnosed Botox 10% people with migraine Anti-CGRPs 5% Diagnosed & preventively Other preventive treatments
Slide 25: Two large pivotal studies demonstrated sustained efficacy and good tolerability
VYEPTI - EPTINEZUMAB Two large pivotal studies including ~2,000 patients demonstrated sustained efficacy and good tolerability Promise 1 Promise 2 Powerful ≥50%, ≥75% and in Episodic Migraine Patients in Chronic Migraine Patients 100% reductions in migraine days (N=888) (N=1,072;) • Primary endpoint
Slide 26: PROMISE 1: phase III study of eptinezumab in frequent episodic migraine
VYEPTI - EPTINEZUMAB PROMISE 1: A phase III study to evaluate the efficacy and safety of eptinezumab for prevention of frequent episodic migraine • Eptinezumab reaching statistical significance for the primary and all key secondary endpoints • Migraine day prevalence dropped over 50% on Day 1 and re
Slide 27: Eptinezumab achieved meaningful reductions in migraine activity: PROMISE 2 results
VYEPTI - EPTINEZUMAB Eptinezumab achieved meaningful reductions in migraine activity as early as Day 1 that were sustained through Week 12: results from PROMISE 2 phase III trial in chronic migraine Day 1 Reductions from baseline in ≥75% Migraine Responder Rates (RR) • In subjects with chronic migra
Slide 28: HIT-6 is a widely used patient-reported outcome measure
VYEPTI - EPTINEZUMAB HIT-6 is a widely used patient-reported outcome measure in headache and migraine research • General measure of impact of headache on daily life1 • Six-item scale (severe pain, limits daily activities, lie down, too tired, felt fed up or irritated, limits concentration)1 • Scorin
Slide 29: RELIEF-study: Starting migraine prevention during attack
VYEPTI - EPTINEZUMAB RELIEF-study: Starting migraine prevention during attack • Enrollment commenced in November 2019 (n=450 subjects who are candidates for preventive therapy)* 100 mg eptinezumab vs. placebo • Single-dose study with a 4-week follow-up period • Study planned to complete by the end o
Slide 30: Success for Vyepti is a marathon, not a sprint
VYEPTI - EPTINEZUMAB Success for Vyepti is a marathon, not a sprint LOE ~2035 China + Japan Europe ~2025 Selected regions in Int. Markets Eptinezumab PDUFA Date ~2022 Other indications currently 2021 under evaluation; clinical activity RELIEF study – Nov. 2019 to commence by the end of 2020 BLA Acce
Slide 31: Alzheimer's progresses as planned
BREXPIPRAZOLE Third study in brexpiprazole pivotal programme in Agitation in Alzheimer’s progresses as planned Third study out of three in the pivotal programme (phase III): Study objective1 Brexpiprazole (fixed dose 2mg and 3mg) and placebo To compare the efficacy of 2 doses of brexpiprazole with P
Slide 32: Brexpiprazole in pivotal programme for agitation in Alzheimer's disease
BREXPIPRAZOLE Brexpiprazole in pivotal programme for the treatment of agitation in Alzheimer’s disease Agitation in Associated with: Alzheimer’s Alzheimer’s disease Disease (AD) (AAD) 50 million people worldwide have dementia >20% of individuals in a Increased caregiver (Alzheimer’s is the most comm
Slide 33: PTSD offers an exciting opportunity for brexpiprazole
BREXPIPRAZOLE PTSD offers an exciting opportunity for brexpiprazole PTSD epidemiology Post-traumatic Stress Disorder PoC study4 showed… (PTSD) >8m – U.S. prevalence Combination of brexpiprazole and (2.5%-3.6%)1, 2 ~8.6m U.S. adults affected, but sertraline demonstrated ~80% estimated to be undiagnos
Slide 34: Both studies in brexpiprazole pivotal programme in PTSD ongoing
BREXPIPRAZOLE Both studies in brexpiprazole pivotal programme in PTSD ongoing Two studies initiated in the pivotal programme (phase Study objective1 III) To evaluate the efficacy, safety, Brexpiprazole (fixed 2 , 3mg and flexible dose up to 3mg) in and tolerability of 12-week combination with sertra
Slide 35: Borderline Personality Disorder offers an opportunity for brexpiprazole
BREXPIPRAZOLE Borderline Personality Disorder (BPD) offers an exciting opportunity for brexpiprazole BPD epidemiology Borderline Personality Disorder (BPD) ~5m – U.S. prevalence Dysfunctions in the serotoninergic and dopaminergic (1.6%, but likely higher)1) systems is considered as possible causes f
Slide 36: Brexpiprazole PoC study in Borderline Personality Disorder ongoing
BREXPIPRAZOLE Brexpiprazole PoC study in Borderline Personality Disorder (BPD) ongoing Study objective1 Phase II To evaluate the efficacy and Brexpiprazole (flexible dose 2-3mg) and placebo safety of 12-week brexpiprazole for the treatment of subjects Primary endpoint: Zanarini Rating Scale for Bord
Slide 37: Lundbeck La Jolla biology platform exploring serine hydrolases
LU AG06466 Lundbeck La Jolla has access to an exciting biology platform exploring serine hydrolases starting with the endocannabinoid system Access to world class MAG-lipase development candidates to bolster our portfolio Pipeline in a drug – many potential indications Discovery site in U.S. World c
Slide 38: PDE10 inhibition: a new approach combining D1 agonist-like and D2 antagonist-like effect
LU AF11167 PDE10 inhibition: A new approach to obtain a combined D1 agonist-like effect and D2 antagonist-like effect D1 Receptor D2 Receptor Stimulator Inhibitor Stimulator Inhibitor R+ AC R- Maintain R+ AC R- Gs Gi Improve Gs Gi ATP control of ATP negative cAMP PDE10 positive cAMP PDE10 AMP sympto
Slide 39: Proof-of-concept study commenced in December 2018
LU AF11167 Proof-of-concept study commenced in December 2018 Monotherapy* Screening 1 Screening 2 Baseline Completion Two fixed-flexible doses, once daily 1-2mg/day Clinically stable patients on antipsychotic 3-4mg/day AF 11167 flex-flexible low dose placebo n = 80 N = ~250 patients AF 11167 flex-fl
Slide 40: Negative symptoms represent a major unmet medical need
LU AF11167 Negative symptoms represent a major unmet medical need Schizophrenia has three core symptoms: Positive, cognitive and negative symptoms Prevalence1) (major countries) Negative symptoms together with impaired cognition are the major cause of the marked functional disability 4.7m Prevalence
Slide 41: Pipeline – investing for the future
RESEARCH & DEVELOPMENT Pipeline – investing for the future Project Area Phase I Phase II Phase III Filing Eptinezumab (anti-CGRP mAb) Migraine prevention Brexpiprazole1) Agitation in Alzheimer’s disease ≥2021 Brexpiprazole1) PTSD ≥2023 Brexpiprazole1) Borderline Personality Disorder ≥2025 Lu AF11167
Slide 42: Maintaining focus on our role and responsibility in society
ESG UPDATE Maintaining focus on our role and responsibility in society During the recent quarter, the COVID-19 pandemic challenged the global community affecting everyone Category Q1 2020 Q1 2019 Δ% y/y • We have adapted our ways of working to preserve employee Energy (MWh) 27,748 27,256 1.8% safety
Slide 43: Commitment to the UN Global Compact Principles and SDGs
ESG UPDATE Commitment to the UN Global Compact Principles and to the Sustainable Development Goals (SDG) underpins our business • Contribute to solving societal Overview of our ambitions, initiatives and targets challenges where we can SUSTAINABLE LUNDBECK’S SUSTAINABILITY - 2020 TARGETS DEVELOPMENT
Slide 44: Near-term priorities
SUMMARY Near-term priorities • Manage the impact from COVID-19 internally and externally • Secure supply of medicines to patients • Ensure strong continued momentum for the strategic brands • Vyepti launch in the U.S., regulatory submissions and indication expansion • Prepare to restart and accelera
Slide 45: Readying Lundbeck for a new growth phase – 2020 and beyond
SUMMARY Readying Lundbeck for a new growth phase – 2020 and beyond • Trintellix launched in Japan Strategic brands - • Rxulti launched in Europe momentum continues Near-term • New LCM studies ongoing with brexpiprazole Invigorate Mid-term Accelerate • Launch Vyepti in migraine prevention globally Es
Slide 46: Thank you
Thank you 46 Lundbeck
Slide 47: Double-digit revenue growth in all regions for the four strategic brands
APPENDIX Continued excellence in commercial execution delivers double- digit revenue growth in all regions for the four strategic brands 1.000 800 +48% North America +36% North America 800 Europe+Int. Markets Europe+Int. Markets +29% 600 +30% 600 400 400 200 200 0 0 Q1.17 Q1.18 Q1.19 Q1.20 Q1.17 Q1.
Slide 48: Solid volume growth in the U.S. for all strategic brands
APPENDIX Solid volume growth in the U.S. for all strategic brands 125.000 800.000 +22% +15% 100.000 +27% +17% 600.000 +18% +23% 75.000 400.000 50.000 200.000 25.000 0 0 Q1.17 Q1.18 Q1.19 Q1.20 Q1.17 Q1.18 Q1.19 Q1.20 300.000 15.000 +22% +6% +8% +29% 12.000 +17% 200.000 +36% 9.000 6.000 100.000 3.000
Slide 49: Total molecule sales (gross) - USDm
APPENDIX 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: U.S. approval (Feb. 2013); EU approval (Nov. 2013) 800 +161% 600 • Brintellix/Trintellix: U.S. approval (Oct. 201
Slide 50: Lu AF28996: A potentially new oral treatment for Parkinson's
APPENDIX - EARLY PROJECTS Lu AF28996: A potentially new oral treatment for Parkinson’s patients experiencing motor fluctuations D1/D2-type agonists Lu AF28996 Phase I studies1: • Single- and sequential- Known to be highly efficacious A highly potent agonist at the D1- ascending-dose of Lu AF28996 to
Slide 51: Lu AF82422: Potential disease modifying antibody for Parkinson's disease
APPENDIX - EARLY PROJECTS Lu AF82422: Potential disease modifying antibody for Parkinson’s disease Pathological alpha-synuclein is Pathogenesis of Parkinson’s Ongoing phase I study3: released to extracellular space • Healthy non-Japanese and upon cell death and can mediate Japanese subjects and in s
Slide 52: Lu AG09222: Potential to build a migraine franchise with PACAP inhibitor mAb
APPENDIX - EARLY PROJECTS Lu AG09222: Potential to build a migraine franchise in the future with 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 di
Slide 53: Projects with new MoAs in clinical development
APPENDIX - EARLY PROJECTS Projects with new MoAs in clinical development Lu AF88434 Lu AF87908 • Potent and selective phosphodi- • Tau mAb esterase PDE1B inhibitor • Binding to and inhibition of • PDE1 is an intracellular enzyme pathological seeding form of Tau responsible for the degradation of cGM
Slide 54: Cash flow impacted by lower EBIT and acquisitions
APPENDIX - FINANCE Cash flow impacted by lower EBIT and acquisitions, but solid cash generation still provides flexibility • Net cash flow: Up DKK 928 million to DKK -716 million in Q1 2020 vs. Net cash flow Q1 2019 (Quarterly - DKKm) 1.800 • FY 2020 cash flow will be negatively impacted by 1.200 •
Slide 55: Product distribution of revenue – Q1 2020 and FY 2019
APPENDIX - FINANCE Product distribution of revenue – Q1 2020 and FY 2019 DKKm FY 2019 FY 2018 Q1 2020 Q1 2019 Growth Growth in local % of total currencies TOTAL: Abilify Maintena 1,961 1,595 612 462 33% 30% 13% Brintellix/Trintellix 2,826 2,182 817 601 36% 34% 18% Cipralex/Lexapro 2,314 2,257 722 61
Slide 56: Cash generation
APPENDIX - FINANCE Cash generation DKKm Q1 2020 Q1 2019 FY 2019 FY 2018 Cash flows from operating activities 188 837 2,609 5,981 Cash flows from investing activities (68) (63) (7,755) (2,907) Cash flows from operating and investing 120 774 (5,146) 3,074 activities (free cash flow) Cash flows from fi
Slide 57: Balance sheet and dividend
APPENDIX - FINANCE Balance sheet and dividend DKKm 31.03.2020 31.12.2019 Dividend (DKK) Intangible assets 22,652 23,399 15 5% Other non-current assets 3,554 3,320 Dividend 12 4% Current assets 8,661 9,038 Yield (r.h.s.) 9 3% Assets 34,867 35,757 Equity 14,074 14,554 6 2% Non-current liabilities 12,9
Slide 58: Costs – Full year figures
APPENDIX - FINANCE Costs – Full year figures DKKm 2019 2018 2017 2016 2019 (∆%) 2018 (∆%) Revenue 17,036 18,117 17,234 15,634 (6%) 5% Cost of sales 3,385 3,456 3,881 4,082 (2%) (11%) Sales & Distribution costs 5,514 5,277 5,649 5,488 4% (7%) Administrative expenses 899 762 833 805 18% (9%) R&D costs
Slide 59: Strong progress against Expand and Invest to Grow strategy
EXPAND AND INVEST TO GROW Lundbeck has seen strong progress against Expand and Invest to Grow strategy announced in February 2019 • Solid growth across strategic brands • Global footprint with growth in all regions of the world MAXIMIZE EXPAND EXISTING OPERATING • Two acquisitions made in 2019 expan
Slide 60: For more information, please contact Investor Relations
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 435,019 (0.22%) Palle Holm Olesen Insider holdings 130,339 (0.07%) VP; Head of Investor Relations • Deutsche