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Lundbeck Expects to Deliver Solid Profits During A Period of New Product Launches and Patent Expiries

·         Lundbeck expects to generate a minimum annual revenue and EBIT of DKK 14 billion and DKK 2 billion, respectively, in the period 2012-2014

·         Lundbeck expects to continue its strong cash flow generation, and in the period 2012-2014 plans to pay out dividend in the upper end of the payout target of 25-35%

·         Lundbeck expects to stay profitable, although launch activities connected to Sycrest® and Lu AA21004 are expected to reduce profits especially in 2012 and 2013

·         Floor guidance includes new launch of escitalopram in Japan and investments in the launches of Sycrest® and clobazam

·         After 2014 Lundbeck plans for growth in both revenue and profit driven by product launches from the existing pipeline

H. Lundbeck A/S (Lundbeck) today announces the financial floor guidance for the company. The guidance addresses a period of transition for Lundbeck, but also a period where we will maintain our strong financial position.

"We are pleased to continue to deliver solid profits while investing in new product launches and research and development efforts to make a positive difference for patients," said Ulf Wiinberg, President & Chief Executive Officer at Lundbeck. "We believe we have laid out a solid platform for the floor guidance and continue to plan for growth from 2015 and onwards."

From March 2012, as a consequence of the loss of patent protection in the United States, Lundbeck expects that Lexapro® will be exposed to generic competition, which will affect Lexapro® revenue. In spite of the impact from the loss of Lexapro® income, Lundbeck expects to deliver solid profits during 2011-2014 and maintain its strong cash flow generation.

As part of its strategy, Lundbeck has identified and executed on a number of initiatives that will have a positive impact on revenue and profits throughout 2011-14. The initiatives are separated into three categories: Decisions Now, R&D pipeline and business development where the goal is to optimise and maximise Lundbeck as well as invest significantly in the pipeline. Finally, in terms of business development, the acquisition of Lundbeck Inc. in 2009 and the recent in-licensing of Sycrest® from Merck & Co., along with escitalopram in Japan, have created additional opportunities.

The revenue guidance for Lundbeck is primarily based on performance by previously launched products. The floor guidance includes revenue from Sycrest®, which already has been approved in Europe; escitalopram in Japan from 2012 pending approval and clobazam, which has shown very encouraging clinical results in the clinical phase III programme but is pending filing later in 2010 and approval in the United States. The guidance also includes Lu AA21004, however, primarily as a cost in the form of related development and pre-marketing costs in connection with the planned US/EU filing in 2012. Less than 20% of revenue in any year during the floor guidance period is expected to come from products currently in Lundbeck's pipeline and therefore not yet launched.

In connection with the launch of new products, including LU AA21004 and Sycrest® significant higher sales costs and promotion costs have also been included for 2012-14. The guidance does not include any potential business development activity. Furthermore, the guidance includes milestone payments related to escitalopram in Japan and Lu AA21004.

Lundbeck will continue to develop and execute on initiatives that will improve the mid and long-term outlook for the company. Therefore, it is Lundbeck's intention always to strive to exceed this guidance.



2010e 1)





Revenue2) 3)

14.6-14.8 bn

>14.5 bn

>14 bn

>14 bn

>14 bn

SG&A costs






R&D costs







3.3-3.4 bn

>3 bn

>2 bn

>2 bn

>2 bn


4.2-4.3 bn





1)       Guidance provided on 4 March 2010 and revised on 3 November 2010

2)       Included in the floor guidance are new product launches such as Sycrest®, clobazam, escitalopram in Japan as well as Lu AA21004-related development and pre-marketing costs in connection with the planned US/EU filing in 2012

3)       Not included in the floor guidance is the impact from desmoteplase, Lu AA24530, nalmefene and zicronapine


Given the long-term view of the floor guidance, it may be subject to greater variability and higher uncertainty. This is related to events such as the uptake of newly introduced products, foreign exchange fluctuations, macro-economic activity including inflation, and industry-specific challenges such as changes to government healthcare policy, generic competition and legal litigation.

After 2014, Lundbeck plans for growth in both revenue and profit driven by potential product launches from the existing late-stage pipeline such as Lu AA21004, clobazam, escitalopram in Japan, as well as products not included in the floor guidance, such as desmoteplase, Lu AA24530, nalmefene, zicronapine and others.

Lundbeck will provide further financial guidance for 2011 in connection with the announcement of the 2010 annual report.

Dividend and financial policy
Lundbeck's financial strategy is to manage its capital structure as if the company would carry an investment-grade rating from a rating agency. Lundbeck expects to continue its strong cash generation, but will also retain the flexibility to pursuit strategic opportunities in order to strengthen long-term growth prospects.

Lundbeck has historically offered a dividend payout ratio of 30%. The target for the payout ratio is 25% to 35% of the company's net profit. In the period 2012-2014, Lundbeck expects the payout ratio to be in the upper end of the long-term range.


Lundbeck contacts





Palle Holm Olesen

Mads Kronborg

Chief Specialist, Investor Relations

Media Relations Manager

+45 36 43 24 26

+45 36 43 28 51



Magnus Thorstholm Jensen

Stine Hove Marsling

Investor Relations Officer

External Communication Specialist

+45 36 43 38 16

+45 36 43 28 33



Jacob Tolstrup


Vice President


+1 847 282 5713





About Lundbeck
H. Lundbeck A/S (LUN.CO, LUN DC, HLUKY) is an international pharmaceutical company highly committed to improving the quality of life for people suffering from central nervous system (CNS) disorders. For this purpose Lundbeck is engaged in the research and development, production, marketing and sale of pharmaceuticals across the world. The company's products are targeted at disorders such as depression and anxiety, schizophrenia, insomnia, epilepsy and Huntington's, Alzheimer's and Parkinson's diseases.

Lundbeck was founded in 1915 by Hans Lundbeck in Copenhagen, Denmark. Today Lundbeck employs today approximately 5,900 people worldwide. Lundbeck is one of the world's leading pharmaceutical companies working with CNS disorders. In 2009, the company's revenue was DKK 13.7 billion (approximately EUR 1.8 billion or USD 2.6 billion). For more information, please visit


Posted: November 2010