H. Lundbeck A/s Class A · OMXCOP:HLUN_A
H. Lundbeck A/s Class A — FY2003 Earnings Presentation
50 slides from H. Lundbeck A/s Class A's earnings presentation, Mar 10, 2004
Slide 1: Full-year results 2003
Full-year results 2003 10/03/2004 1
Slide 2: Safe Harbour Statement
Safe Harbour Statement This presentation contains forward-looking statements that reflect the Management’s current views with respect to certain future events and financial performance. Statements containing the outlook for 2004 and the following years naturally involve uncertainties, and consequent
Slide 3: Outlook & Issues
Outlook & Issues 10/03/2004 3
Slide 4: Significant events in 2003
Significant events in 2003 Financials Financial results in line with guidance at 9M 2003 Products Cipralex® now available in almost 50 countries Cipralex® data presented shows advantages over Paxil®, Effexor® XR, Zoloft® and Cipramil® Cipralex® approved for SAD Ebixa® available in more tha
Slide 5: Financial Outlook 2004
Financial Outlook 2004 Revenue EBIT Lower than 2003 in reported Approximately DKK 2.5 bill. currency including the gaboxadol initial payment Cash flow At 2003 level excluding gaboxadol initial payment Free cash flow of more than DKK 1 billion Market consensus for 2005 among 16 sell-side anal
Slide 6: Managing transition Cipralex and Ebixa
Managing transition Challenges Generic erosion of citalopram franchise US-dollar decline Pricing and reimbursement of Cipralex® Risk management Converting revenue risk Cost control measures – Continued roll-out of – Production efficiency Cipralex® and Ebixa® – Workforce optimisation – Laun
Slide 7: Increased efficiency
Increased efficiency Dkkm Operating costs as % of revenue FTE Workforce 30.0% 5600 5550 5500 20.0% 5450 5400 10.0% 5350 5300 5250 0.0% 5200 Production Distribution Admin* R&D Q1 2003 Q2 2003 Q3 2003 Q4 2003 2002 2003 *) Excluding DKK 287 mill. provision in 2003 10/03/2004 7
Slide 8: Strong cash generation – to benefit shareholders
Strong cash generation – to benefit shareholders Share buy back programme Buy back of own shares up to DKK 400 million The shares to be bought in the market on an ongoing basis through 2004 and cancelled at appropriate time Pro rata scheme with the Lundbeck Foundation – in order to limit the i
Slide 9: Financial Highlights
Financial Highlights 10/03/2004 9
Slide 10: 2003 - Highlights
2003 - Highlights DKKm DKK CER growth growth Revenue 9,941 5% 9% - Cipralex® 645 729% - LexaproTM 1,928 148% - Cipramil® 4,340 -16% - CelexaTM 1,725 -27% - Ebixa® 286 893% - Other revenue 1,017 -2% EBIT 2,132 -10% Finance income, net* (76) 74% Net profit 1,377 8% Free cash flow 421 295% EPS 5.89 8%
Slide 11: Revenue development
Revenue development 2.5 9.9 Other revenue 3% 2.4 2% 2% 9.5 3% Mature 8% 8% 9% Ebixa 9% 3% 1% 5% Cipralex/Lexapro 9% 10% Cipramil/Celexa 25% 32% 80% 78% 61% 52% FY 2002 FY 2003 Q4 2002 Q4 2003 10/03/2004 11
Slide 12: Citalopram/escitalopram revenue on the largest markets for antidepressants
Citalopram/escitalopram revenue on the 7 largest markets for antidepressants DKKm 2003 2002 Change UK 506.5 791.4 -36% - Cipramil ® 343.9 764.1 -55% - Cipralex® 162.6 27.3 495% France 678.2 668.9 1% Germany 151.1 207,9 -27% - Cipramil® 133.3 207.9 -36% - Cipralex® 17.8 Spain 264.6 265.9 0% Italy 395
Slide 13: Increasing importance in US income at a decreasing US$ exchange rate
Increasing importance in US income at a decreasing US$ exchange rate 4000 9 8,5 3500 8.42 8.21 8 3000 7.83 7,5 2500 7 DKKm US $ 2000 6,5 6.59 6 1500 5,5 1000 1916 3155 3652 5 500 4,5 0 4 FY FY FY FY 2001 2002 2003 2004 Yearly US inc ome Average US$ exc hange rate Average hedging US$ rate 10/03/2004
Slide 14: Lower production costs – flat SG&A – increased R&D investment
Lower production costs – flat SG&A (ex. provision) – significant increased investment level in R&D Cost structure EBIT 9 3 2004 guidance DKK 287m provision 8 SG&A 7 COGS 6 2 Including gaboxadol R&D 41.3% 4,102 DKK billion 3,767 D K K Billio n 5 39.7% 4 1 1,759 3 1,573 1,818 17.7% 19.2% 2 1,933 1 19.
Slide 15: 2005 cost structure targets
2005 cost structure targets DKKm 3,815 Affected positively by cost (excl. provision) containment program Around the same level in SG&A absolute figures in 2005 Affected negatively by product launches 2003 Affected positively by DKKm 1,759 increased efficiency Around the same level in COGS absolute f
Slide 16: Short-term cost structure guidance
Short-term cost structure guidance Short-term cost structure ->3 years SG&A 32-35% Production costs 17-20% R&D 20% EBIT margin >25% 10/03/2004 16
Slide 17: Cash flow
Cash flow (DKK million) 2003 2002 Cash flow from operating 1,900 1,293 activities Capital expenditure* -1,479 -1,186 Free cash flow 421 107 Cash and cash equivalents 1,334 861 *) 2003 includes DKK 875 million for the acquisition of Synaptic Pharmaceutical Corporation 10/03/2004 17
Slide 18: Key figures per share
Key figures per share DKK 10 9 8 7 6 5 4 3 2 1 0 Earnings per share Dividend per share Cash flow per share 1999 2000 2001 2002 2003 10/03/2004 18
Slide 19: Share buy back programme
Share buy back programme Up to a maximum of DKK 400 million and within the 10% authorization granted at the Annual General Meetings The open market 26.6% Designated Bank H. Lundbeck A/S 100% LFI A/S (owned by the 73.4% Lundbeck Foundation) The price for the shares to be bought at LFI A/S is the
Slide 20: Business Update Europe
Business Update Europe 10/03/2004 20
Slide 21: 70% of total revenue generated on the largest markets for antidepressants
70% of total revenue generated on the 7 largest markets for antidepressants in the world 2002 2003 Canada UK Canada France UK 7% 9% 8% France 8% 6% 8% Germany 4% Germany 4% Spain Spain 3% US 3% US 37% 33% Italy Italy 4% 4% Rest of Rest of Europe Europe RoW 25% 23% 7% RoW 7% 10/03/2004 21
Slide 22: Cipramil market share and generic loss
Generic loss taken on markets with generics for more than 12 months Generic entry 40% Cipramil® market share in 35% value (N6A) 30% 25% 20% 15% Q4 - 03 Q4 - 03 10% 5% Q4 - 03 Q4 - 03 0% -1Q 0 +1Q +2Q +3Q +4Q +5Q +6Q +7Q Nordic UK Germany Others Spain 10/03/2004 22
Slide 23: A true global Cipralex/Lexapro launch
A true global Cipralex®/Lexapro™ launch – getting access to the markets 88% 100% Cipralex® /Lexapro™ market share Antidepressant market (N6A) 80% 60% 40% 20% 7.5% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2002 2002 2002 2002 2003 2003 2003 2003 2004 2004 2004 2004 Source: IMS, 2003 Lundbeck markets: 27
Slide 24: Cipralex now launched in almost 50 countries
Cipralex® now launched in almost 50 countries Cipralex® Launched Launch 2004 Asian countries New Zealand Asian countries Australia Middle East countries Canada Austria Norway Egypt Belgium Portugal France Denmark South America Hungary Eastern Europe Sweden Middle East countries Finland Switzerland R
Slide 25: Launches of Cipralex in major markets, Europe
Launches of Cipralex® in major markets, Europe 6% From launch with reimbursement I 5% UK Market share in value (N6A) 4% 3% GER 2% 1% 0% 10 11 12 13 14 15 16 17 18 19 20 21 1 2 3 4 5 6 7 8 9 0 + + + + + + + + + + + + + + + + + + + + + ® Months after Cipralex launch UK I GER Source: IMS, N6A 10/03/200
Slide 26: Launches of Cipralex in the last months, Europe
Launches of Cipralex® in the last 12 months, Europe From launch with reimbursement 14% Market share in value (N6A) 12% N TR B 10% USA 8% FIN 6% 4% P US introduction of Lexapro™ is in the top 2% 5 of most successful launches of prescription drugs in US history 0% 0 +1 +2 +3 +4 +5 +6 +7 +8 +9 +10 +11
Slide 27: Cipralex market position
Cipralex® market position 14% 12% Market share in value (N6A) Cipralex marketshare 10% 8% 6% 4% 2% 0% %-growth in A N B TR IRL DK CH FIN I S UK P GER market share 6 months 6 158 78 NA 33 3 14 NA NA 47 36 NA NA Source: IMS, N6A 10/03/2004 27
Slide 28: Ebixa launch – getting access to the markets
Ebixa® launch – getting access to the markets 35% 26% 30% Market share in value 25% 20% (N7D) 15% 10% 5% 0% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2002 2002 2002 2003 2003 2003 2003 2004 2004 2004 2004 Source: IMS, 2003 Lundbeck markets: 34% of total N7D market US: 55% of total N7D market Japan & RoW: 11%
Slide 29: Ebixa launch update
Ebixa® launch update Ebixa® Launched Launch 2004 Australia* Mexico Argentina Austria Scandinavia Asian countries Brazil Eastern Europe Canada France Singapore Chile Germany Ukraine Czech Republic Greece Spain India Holland Switzerland Italy UK Turkey Middle East countries Ireland Belgium *Awaits rei
Slide 30: Launches of Ebixa during last months in major markets, Europe
Launches of Ebixa® during last 12 months in major markets, Europe From launch with reimbursement 15% F Market share in value (N7D) 12% 9% ESP 6% 3% 0% 0 +1 +2 +3 +4 +5 +6 +7 +8 +9 +10 +11 +12 +13 +14 +15 +16 +17 ® Months after Ebixa launch ESP F Source: IMS, N7D 10/03/2004 30
Slide 31: Ebixa market position
Ebixa® market position 35% Ebixa marketshare Market share in value (N7D) 30% 25% 20% 15% 10% 5% 0% H F FIN P DK GER S A N NL ESP TR GR UK %-growth in market share 6 months 6 >999 89 NA 22 20 41 24 87 40 57 NA 20 43 Source: IMS, N7D 10/03/2004 31
Slide 32: Memantine has surpassed galantamine in Europe
Memantine has surpassed galantamine in Europe Donepezil Rivastigmine Galantamine Memantine Anti-Alzheimer's market 100 160 146 90 132 140 80 124 112 120 110 70 Euro mill. 101 100 60 Euro mill. 50 80 40 60 30 40 20 20 10 0 0 Memantine split Q3 2002 Q4 2002 Q1 2003 Q2 2003 Q3 2003 Q4 2003 Ebixa® 7% 16
Slide 33: Quarterly Ebixa and Cipralex group revenue figures
Quarterly Ebixa® and Cipralex® group revenue figures 450 Ebixa Cipralex 392 400 350 300 266 250 270.6 DKKm 200 166 179.3 150 107 100 117.2 78.1 121.8 50 86.6 29.1 48.4 0 Q1 2003 Q2 2003 Q3 2003 Q4 2003 10/03/2004 33
Slide 34: Business Update US & RoW
Business Update US & RoW 10/03/2004 34
Slide 35: A major part of revenue is now generated outside Europe
A major part of revenue is now generated outside Europe 2002 2003 Canada Canada 7% 8% US 37% US Europe Europe 34% 52% 48% RoW RoW 7% 7% 10/03/2004 35
Slide 36: Growth in markets outside Europe
Growth in markets outside Europe 2002 2003 DKK CER DKKm growth growth US 3,172 3,695 16% 19% Canada 618 767 24% 34% Latin America 128 159 24% 61% Australia 152 112 -26% -26% Asia 77 109 41% 67% Others 297 286 -4% 4% Total 4,444 5,127 14% 21% Figures includes total revenue generated in each market/
Slide 37: Significant launches of Lexapro outside Europe
Significant launches of LexaproTM outside Europe 12% From launch with reimbursement 10% Market share in value (N6A) USA 8% MEX 6% BRA 4% CHL ARG AUS 2% 0% 10 11 12 13 14 15 16 17 18 19 20 21 1 2 3 4 5 6 7 8 9 0 + + + + + + + + + + + + + + + + + + + + + Months after Lexapro™ launch USA MEX AUS BRA AR
Slide 38: Lundbeck's US business model
Lundbeck’s US business model Specialty and GP coverage Long term average return Gaboxadol Specialty coverage + GP partner CelexaTM/LexaproTM Outlicensing Risk 10/03/2004 38
Slide 39: Pipeline & Concluding Remarks
Pipeline & Concluding Remarks 10/03/2004 39
Slide 40: Pipeline
Pipeline Compound Activity Indication Dev. stage 2004 2005 2006 2006+ Rasagiline MAO-B Parkinson’s NDA Launch Generalised anxiety Escitalopram SSRI III NDA Launch disorder NMDA Mild to moderate Memantine III NDA Launch antagonist Alzheimer’s Sertindole D2-5HT2 Schizophrenia PMS Launch Dopamine/ Bife
Slide 41: Capital Market Day
Capital Market Day Lundbeck will host a Capital Market Day 16 September 2004 Venue At Lundbeck premises Ottiliavej 7-9, Valby DK-2500 Copenhagen For more information please contact Teresa Zoe Langgaard, Investor Relations 10/03/2004 41
Slide 42: More information please contact Investor Relations
More information please contact Investor Relations Steen Juul Jensen Jacob Tolstrup Niels Christian Hobolt Teresa Zoe Langgård Vice President Investor Relations Investor Relations Event Coordinator Manager Officer Investor Relations & Investor Relations & Investor Relations & Investor Relations & Co
Slide 43: Appendix
Appendix 10/03/2004 43
Slide 44: Worldwide pharmaceutical market 2002
Worldwide pharmaceutical market 2002 USD 400,6 billion, (+7%) Other (D) Dermatologicals 8% (C) Cardiovascular 3% (+2%) 17% (+6%) (B) Blood 5% (+14%) (G) G.U.& Sex Hormones 5% (+5%) (M) Muscolo- (N) CNS Skeletal 16% (+11%) 6% (+6%) (L) A+Immun 7% (+18%) (R) Respiratory 8% (+7%) (A) Alimentary (J) Ant
Slide 45: Worldwide CNS market 2002
Worldwide CNS market 2002 USD 64,4 billion, (+11%) N5A Antipsychotics 15% N2B Non-Narcotic Analgesics 11% N6A Antidepressants 27% N3A Anti-Epileptics 11% Other CNS drugs 6% N2A Narcotic Analgesics N7D1 Anti-Alz Prod 9% Chol Inhib 3% N5C Tranquillisers 4% N1A Anaesthetics N5B Hypnotics & General N4A
Slide 46: Depression market and SSRI/SNRI market shares
Depression – 17.1 bill. USD (+6%) Market shares of SSRI/SNRI Europe Q3 2003 Rest of Mirtazapine USA Q3 2003 world North Fluoxetine 7% America 73% Venlafaxine Citalopram/Escitalopram Sertraline Europe Paroxetine 20% 0% 5% 10% 15% 20% 25% Leading product Marketing Corporation Sales 2002 (USDm) Growth
Slide 47: Alzheimer's market
Alzheimer’s – 1.6 bill. USD (+33%) Europe Q3 2003 North Memantine USA Q3 2003 Rest of America world 57% Galantamine 15% Rivastigmine Donepezil Europe 0% 20% 40% 60% 80% 28% Leading product Marketing Corporation Sales 2002 (USDm) Growth in % Aricept® Pfizer 1,128 22 Exelon® Novartis 290 25 Reminyl® J
Slide 48: Antipsychotics market
Antipsychotics – 9.5 bill. USD (+20%) North Europe Q3 2003 America Aripiprazole Rest of USA Q3 2003 % world Risperidone 69% 10% Olanzapine Amisulpride Clozapine Ziprasidone Europe% Quetiapine 21% 0% 10% 20% 30% 40% 50% Leading product Marketing Corporation Sales 2002 (USDm) Growth in % Zyprexa® Eli
Slide 49: Anti-Parkinson's market
Anti-Parkinson’s – 1.8 bill. USD (+8%) NMDA Europe Q3 North 2003 America MAOI 36% Antikolinergika COMT Europe 37% Levodopa Rest of Dopaminagonister world 0% 10% 20% 30% 40% 27% NMDA USA Q3 2003 MAOI Antikolinergika COMT Levodopa Dopaminagonister 0% 10% 20% 30% 40% 50% 60% 10/03/2004 49
Slide 50: Worldwide sales of insomnia drugs
Worldwide sales of insomnia drugs – 1.7 bill. USD (+22%) North America 78% Rest of world 7% Worldwide Q3 Zaleplon 2003 Europe 15% Zopiclone Zolpidem 0% 10% 20% 30% 40% Source: IMS 10/03/2004 50