Solid performance across strategic brands with 19% growth in the first nine months of 2020; financial guidance range for 2020 narrowed

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Nov 3, 2020

Solid performance across strategic brands with 19% growth in the first nine months of 2020; financial guidance range for 2020 narrowed



HIGHLIGHTS

Revenue reached DKK 13,397 million in the first nine months of 2020, a growth of 6% (6% in local currencies) compared to 2019 with growth from all regions. The newest product in the portfolio, Vyepti®, continues to pick up momentum doubling revenue compared to the second quarter of the year, despite the pandemic’s negative impact on HCP administered drugs. Cash flow saw a substantial improvement from same period last year driven by the strong operational performance.

Growth continues to be driven by patient uptake due to the efficacy and reliability of the products in the portfolio, product launches in new markets and the continued resilience of mature brands.

Strategic brand performance:

    • Revenue of Abilify Maintena® increased 19% to DKK 1,729 million (19% in local currencies)
    • Revenue of Brintellix®/Trintellix® increased 14% to DKK 2,308 million (16% in local currencies)
    • Revenue of Northera® increased 16% to DKK 1,865 million (16% in local currency)
    • Revenue of Rexulti®/Rxulti® increased 24% to DKK 2,004 million (23% in local currencies)
    • Revenue of Vyepti reached DKK 42 million following the launch in the U.S. in April 2020.

Market performance:

    • Revenue in North America increased 6% to DKK 7,328 million (6% in local currencies)
    • Revenue in International Markets increased 8% to DKK 3,254 million (12% in local currencies)
    • Revenue in Europe increased 4% to DKK 2,510 million (4% in local currencies)

In connection with the financial report, Lundbeck’s President and CEO Deborah Dunsire said:

“I am very pleased with the results for the first nine months of this unprecedented year. Our brands have demonstrated impressive resilience, continuing to perform well across all markets and delivering solid growth. Patient feedback on the effectiveness of Vyepti is strongly positive and the results of the RELIEF study confirmed the powerful and fast onset profile of the drug, supporting our long-term growth expectations for the brand. Our solid brand performance combined with our strong financial position puts us on robust footing for the future.”

Key Figures:

DKK million 9M 2020 9M 2019 Growth
Core Revenue* 13,397  12,615  6%
Core EBIT* 3,714  4,010  (7%)
Core EPS* 14.87 15.40 (3%)
Core EBIT margin* 27.7% 31.8% -
Reported Revenue 13,397  12,615  6%
Reported EBIT 1,786  3,317  (46%)
Reported EPS 6.06 12.27 (51%)
Reported EBIT margin 13.3% 26.3% -

For definition of the measures “Core Revenue”, “Core EBIT”, “Core EBIT margin” and “Core EPS”, see note 6 Core reporting

Revenue of the five strategic brands combined grew by 19% (19% in local currencies), thereby reaching DKK 7,948 million or 59% of total revenue. Especially Abilify Maintena and Northera are continuing the solid growth momentum. In the third quarter, product sales are significantly impacted by depreciation of main exchange rates.

Core EBIT reached DKK 3,714 million corresponding to a core EBIT margin of 27.7%. Profitability is impacted by substantial investments in our strategic brands which partly is mitigated by a lower activity level in the wake of the COVID-19 pandemic. The manufacturing of Vyepti has shown to be more cost effective and thus production costs will be lower going forward. As a consequence, an inventory valuation adjustment of Vypeti has impacted the third quarter negatively by around DKK 200 million (non-cash).

The free cash flow increased from DKK 1,817 million to DKK 2,521 million following the solid operational performance and improved working capital.

The financial guidance range has been narrowed. Lundbeck now expects revenue to reach DKK 17.5 – 17.8 billion and EBIT to reach DKK 2.0 – 2.2 billion compared to previously DKK 17.4 – 18.0 billion and DKK 1.8 – 2.2 billion, respectively.

H. Lundbeck A/S

Ottiliavej 9, 2500 Valby, Denmark

+45 3630 1311

info@lundbeck.com

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