Earnings call transcript: Lundbeck raises guidance for 2025

Lundbeck (LUN.CO), a pharmaceutical company with a market capitalization of $7.79 billion, reported a strong performance in the first quarter of 2025, with revenue reaching 6.2 billion Danish kroner, marking a 16% increase at constant exchange rates. According to InvestingPro data, the company’s current valuation appears elevated compared to its Fair Value, with analysts setting price targets between $8.44 and $13.67. The company raised its full-year guidance, expecting revenue growth between 8% and 11% and adjusted EBITDA growth from 8% to 14%. Despite these positive results, the stock price remained stable, with no significant change in trading.

Key Takeaways

• Lundbeck’s Q1 2025 revenue grew by 16% at constant exchange rates.
• Strategic brands now account for 77% of total revenue.
• The company raised its full-year revenue and EBITDA growth guidance.
• Rexulti and Vyepti showed robust growth, contributing significantly to overall performance.

Company Performance

Lundbeck demonstrated a strong start to 2025, with significant revenue growth driven by its strategic brands, which saw a 24% increase. InvestingPro analysis reveals impressive revenue growth of 27.45% over the last twelve months, supported by a healthy gross profit margin of 45.17%. The company continues to expand its market presence, particularly in the U.S. and Europe, capitalizing on growth in the migraine prevention and psychiatry markets. Get deeper insights into Lundbeck’s performance with InvestingPro’s comprehensive research report, part of our coverage of 1,400+ top stocks. Lundbeck’s focus on innovation and product development has bolstered its competitive position, especially in the antidepressants and neurological disorder segments.

Financial Highlights

• Revenue: 6.2 billion DKK, up 16% YoY
• Adjusted EBITDA: Increased by 25.4%, with a margin of 34.9%
• Adjusted EPS: Increased by 11% to 1.5 billion DKK
• Strategic brands: 24% growth, making up 77% of total revenue

Outlook & Guidance

Lundbeck raised its full-year guidance, anticipating revenue growth between 8% and 11% and adjusted EBITDA growth from 8% to 14%. With current EBITDA at $1.43 billion and an overall Financial Health Score of "GOOD" from InvestingPro, the company appears well-positioned for growth. The company expects continued strong performance from Rexulti and Vyepti, with potential new indications and market expansions on the horizon. Analysts maintain a positive outlook, with a consensus recommendation of 1.9 (where 1 is Strong Buy). Lundbeck is also preparing for potential generic competition in Canada and Europe, which could impact future revenue streams.

Executive Commentary

• "Strong results of the first quarter are really serving as another proof point of the path we are on," stated Charles Van Siel, CEO.
• "Vyepti remains on track to achieve over $1.3 billion peak year sales," noted Tom, Commercial Operations Lead.
• "We are an execution-focused company," emphasized Charles Van Siel, CEO.

Risks and Challenges

• Potential generic competition in Canada and Europe could affect revenue.
• Pricing policy changes might impact profitability.
• The company faces challenges in maintaining market share amid increasing competition in key therapeutic areas.
• Economic uncertainties and exchange rate fluctuations could affect financial performance.

Q&A

During the earnings call, analysts inquired about the upcoming PTSD AdCom meeting in July and the development of the anti-PACAP molecule. Lundbeck also addressed questions about market exclusivity for key brands and potential impacts of pricing policies.

Full transcript - H Lundbeck A/S (LUN) Q1 2025:

Sandra, Chorus Call Operator: Ladies and gentlemen, welcome to the Lundbeck AES Financial Statement for the First Three Months of the ’20 ’20 ’5 Conference Call. I am Sandra, the Chorus Call operator. I would like to remind you that all participants are in listen only mode and the conference is being recorded. The presentation will be followed by a Q and A session. The conference must not be recorded for publication or broadcast.

At this time, it’s my pleasure to hand over to Charles Van Siel, President and CEO. Please go ahead, sir.

Charles Van Siel, President and CEO, Lundbeck: So, everybody to the Lundbeck earnings call for quarter one twenty twenty five. From the outset, I want to just make a quick statement to say again, these strong results of the first quarter are really serving as another proof point of the path we are on in terms of a focused innovative strategy, confirming very much that the path is very strong for us going forward. So let’s go to the next slide, please. Of course, what we discussed today are forward looking statements and, of course, subject to change. Let me then go to the next slide, please.

Of course, I have the privilege of being joined by my exceptional team here who will cover, of course, the commercial update but also R and D, the financial update as well as the outlook for the 2025 period. So let’s go to the key summary slide. And here, again, I want to emphasize, as we’ve been consistent with you on a very clear equity story, which is one of advancing a focused innovative strategy around three areas: growing the assets we have, growing them well making sure that we build a compelling innovative pipeline that will sustain the growth for the long term of the company, sustainable growth and of course, funding, thinking through very careful allocation and deployment of our capital to where we see the most opportunities for growth or innovation. And of course, I’m really pleased with the first quarter results, which are a strong validation of a lot of the effort and work we’ve done over the last eighteen months to build the path going forward for Lundbeck. Firstly, our total revenue is growing at 16%, and our strategic brands, which now make up 77% of our revenue, is growing at 24%.

And most importantly, two key growth drivers for the long term, Viepti at 62% and Rexulti at 28%. So again, a validation of a strong execution mindset of the company and making sure we focus our investment on where we can grow sufficiently for the midterm. On the innovation side, we are advancing, of course, the pipeline under two areas, neurosepecialty and neuroreare. And in neurosepecialty, anti in its Phase 2b is progressing now to Part B, which is the intravenous administration of anti PACAP. We’ve also, of course, in the first quarter, focused significantly on the integration and smooth transition of longboard with bexicastrin, which is now in full speed on enrollment in Phase III as well as amlena2 and enrolling according to our plan.

And we’re also advancing anti ACTH in congenital adrenal hyperplasia in Phase Ib. So, of course, significant ongoing evolution of the pipeline with more of the late stage Phase III opportunities emerging. From a financial perspective, of course, the first quarter results, as I said, is a clear confidence in terms of our underlying performance, the investment we’ve made, the operating model that we’ve established, which allows us to put ourselves in a position to raise the guidance as indicated on this slide. So when you think about Lundbeck going forward here, it’s a company with clear strategic path, one of strategic clarity of where we focus. It’s a company that is consistently delivering and executing on what we said we will do, and this is execution focused company.

And of course, you also see very briefly here, and as you will hear from my colleagues, it’s a company that is in transformation and progressing very well. So with that, I would like to hand it over to my team and have Tom and Mikhila comment specifically on the asset performance. Tom, please.

Tom, Commercial Operations Lead, Lundbeck: Great. Thank you, Charl. As Cheryl mentioned, we are pleased with our commercial performance for 1Q twenty twenty five, and this was primarily driven by 24% growth of our strategic brands. I’ll first review the performance details for Rigsulti. Next slide, please.

Rexulti continues to perform well and deliver consistent growth, and this is propelled by the continued strong progress within the AADAD segment in The US. US reported revenue increased 29% for the first quarter of twenty twenty five versus the prior year. Importantly, this revenue growth was driven by strong underlying TRx demand growth in The US with 22% growth during first quarter twenty twenty five versus the same period last year. Rexulti demand growth accelerated through the first quarter of twenty twenty five in The US recording record highs in market share, TRX and NRX volume. This demand growth is attributable to continued improvement and execution across the marketing mix and this includes sales force execution across the alliance and optimized direct to consumer media mix and patient affordability programs.

Growth in The US was supplemented by continued strong demand growth in Europe and international operations, delivering growth of 27% versus the same period last year. Looking forward, we expect Rexulti to be a key driver of growth for Lundbeck and this growth will primarily be driven by continued expansion of the AADAD franchise supported by solid growth of our base business in MDD. Let’s take a deeper look at our progress in AADAD. Next slide please. Rexulti AADAD volume is becoming increasingly important to overall Rexulti brand growth, and we expect this to continue through 2025 and beyond.

AADAD monthly TRx volume has increased 472% versus baseline, and the AADAD contribution to overall demand for the brand has grown to nearly 21% based upon the most recent patient claims data. Growth is being primarily delivered by expansion of the HCP prescriber base growing 374% since launch to over 11,800 prescribers. Rexulti AADAD market share has grown from 0.67 share points prelaunch to 3.44 share points based upon February claims data. Importantly, we continue to see consistent growth on the non AADAD side of the business achieving 11.1% growth when comparing January 2025 monthly claims TRX volume to January 2024. The AADAD launch has also had a positive halo effect on the overall brand.

AADAD has fueled 907% growth in the 65 plus segment when we look across all indications. The the team is continuing to focus on the levers to even further accelerate growth for Exalti, and this is informed by our marginal return on investment quarterly analyses. We are applying our dynamic resource allocation focused innovator principle and redirecting a portion of our AADAD direct to consumer funds to expand our primary care footprint and this will allow us to drive greater breadth and depth of prescribing. Let’s move on to Vyepti. Next slide please.

Vyepti again delivered strong results during the quarter and this performance has been fueled by continued strong growth in The US and supported by robust adoption of Vyepti in prioritized ex US markets including Canada, France, Spain and Germany. Viepti global net revenue for 1Q twenty twenty five was 1,042,000,000.000 DKK, and this represents 62% growth over the same period last year. Net revenue for Viepi in The US was 916,000,000 DKK representing 60% growth over first quarter twenty twenty four. Importantly, we are beginning to see meaningful contribution to global sales by ex US markets with Vyepti now available in some 29 markets. These markets are exhibiting strong anti CGRP market growth and Viepti continues to gain meaningful market share across these markets.

Ex US sales will receive a significant boost if approved in Asia based upon the positive SUNRISE trial and we expect to submit for approval by the end of twenty twenty five. I do want to take a moment to focus on The U. S. Over the past eighteen months, we have made purposeful investments to refine our specialty patient centric commercial model to support Viepti. We believe our model is a competitive advantage because it enables our team to appropriately support the patient throughout their patient journey.

We continue to see accelerating demand by driving depth and breadth of prescribing and continued positive momentum in new patient starts supported by higher written to infusion conversion ratios and best in class patient persistency. Looking forward, we expect Vyepti to continue to deliver strong growth driven by new patient starts in The U. S. And expanded usage of Vyepti in all ex U. S.

Markets where the brand has launched. Vyepti remains on track to achieve over $1,300,000,000 peak year sales at peak. Micola, over to you.

Mikaela, Commercial Lead, Lundbeck: Thank you, Tom. Let’s start with looking at the performance of Brintellix in the Q1 twenty twenty five results, where we see a very strong performance overall, growing at 7% versus Q1 twenty twenty four and now delivering DKK1.254 billion. We see a continued strong momentum in Europe and International Operations where we have seen double digit growth in most of our markets. It’s worth highlighting that we have a 17% growth in Europe, which was driven by Spain at 29% and Italy at 23%, as well as continued strong growth in international operations at 8% with Japan delivering 12 and Canada growing at 22% compared to same period last year. In Japan, I’m also pleased to share that we achieved in the month of April, we achieved a significant milestone and now hold value market share leadership in the market for antidepressants at an impressive 22.6 value market share.

When we look ahead, we expect to see continued solid demand growth in Europe and Japan. And I want to remind you that we extended our market exclusivity in Japan by two years and now with loss of exclusivity in 02/1931. If we look to The U. S, you can now see the effects of the revised agreement with Takeda, which reflects a lower revenue, but certainly also a higher profitability and this is a dynamic that we expect will continue throughout the year. I also want to remind you that while we have seen an impressive growth of 22% in Canada in quarter one, we do expect to see generic competition sometime during the year.

Next slide, please. If we look at our Abilify franchise, also here we see a solid performance in Q1 twenty twenty five growing at 16% and just now a little above DKK1 billion versus quarter one last year. In The U. S. Specifically, we see an accelerated growth at 18% versus Q1 twenty twenty four and this has been driven by Abilify Simplify a one and with a 1.6 market share growth for the franchise.

Encouragingly, we continue to see a very strong uptake for Abilify Asymptify with approximately fifty two percent of the patients Abilify Asymptify neutral brand patients coming from either oral antipsychotics, other long acting injectables or naive patients. In Europe and International Operations, we saw growth of 15% versus Q1 twenty twenty four and the Abilify LAI franchise continued to see strong growth across many markets also driven by additional rollout and launches of Abilify nine sixty milligram, the Asymptify name in Europe. When we look ahead, we expect to continue to see strong uptake of Abilify Asymptify or Abilify nine sixty milligram, while we at the same time expect a negative impact in Europe from generic launches towards the end of this year. Let’s zoom in specifically on the Abilify Asymptify or Abilify nine sixty milligram performance. Next slide, please.

When we specifically look at the performance of our Abilify Asymptify nine sixty milligram, we do see the penetration ramping up very nicely. In The U. S, Asymptify growth is now outpacing other LAIs, as I just said, and more than fifty two percent of new to brand patients are coming from orals, other long acting injectables or naive patients. When we look at the conversion rate in The U. S, we see that Assyntify has had an aggressive conversion rate, now constituting 16% of total franchise in TRx volume.

And importantly, we now also see that 20% of the NBRxs, which is a leading indicator of future TRx development are Asymptify prescriptions. As you may recall, we started launching Abilify Maintena nine sixty milligram in Europe June Of Last Year, and we now have the drug available in 18 EIO or international operations markets with Australia launching just here in May. We see a strong increase in the conversion rate and have seen that both Spain and Finland have actually exceeded 20% conversion rate. The feedback we received from physicians is very positive and early market research has suggested that around a third of the patients are coming from oral Aripiprazole. The rollout of Abilify nine sixty milligram continues throughout the rest of 2025 across Europe international operations markets as we continue to see our regulatory approvals.

That concludes the business update. I’d now like to hand over to Johan to give us an update from R and D.

Johan, R&D Lead, Lundbeck: Thank you, Mikaela, and thank you, Tom. It’s very impressive to see the momentum of our key brands, a testament to their strong therapeutic characteristics in the indications we’re pursuing. So let us turn Page April R25 from an R and D perspective. Our two Phase III and neuro rare programs, bexacathrine in developmental and epileptic encephalopathies and namblinitog and multiple system atrophy are progressing well, although still at the early stages of enrollment in their pivotal trials. The deep sea and the deep ocean trials for bexicasrin are active in The U.

S. And are gradually starting in Europe with more countries expected to be coming on board mid-twenty five including from the Asia region. We are not yet however at the time point of the trials where we have a firm validation of the predicted timelines. From Linitug, our alpha synuclein antibody, the pivotal mascot trial continues to expand into further geographies with enrollment expected to be active globally within the coming months. That means that we successfully completed regulatory activities for the trial with all key agencies, a critical achievement for this pioneering innovative program.

In addition, FDA has granted Fast Track designation in February for the program. And also in February, Japan granted orphan drug designation from Linne Tug. With the latter, we have now an orphan drug designation from U. S, Europe and Japan. These destinations are a testament to the high medical need this program is aiming to address.

Concerning the sNDA FDA application for brexpiprazole in combination with sertraline for the treatment of PTSD. FDA and early January informed about the postponed decision date and that they like to host an advisory committee meeting. After some delay, we now have a communication from the agency that this will be held on July. For Rexulti, we are also pleased to have received approval in March for the treatment of adolescents in schizophrenia in Europe. Turning to Vyepti, eptinezumab.

In our last call, I spoke about the interesting lifecycle management trial resolution, reconfirming its strong efficacy. Let us now take a closer look at the trial as we obtain results from the twelve week open label part of the trial. In the twelve week double bind period of RESOLUTION trial, Vyepti reconfirmed the strong efficacy seen consistently with the drug. The RESOLUTION results show rapid treatment effects even in the most severely impacted migraine population, those with chronic migraine and medication overuse headache. As is evident from the right side of the graph, after the dotted line, patients switching from placebo to Viepti going into the open label period saw similar improvements to that seen in Vyepti treated patients during the placebo controlled period reaching a similar level of efficacy.

In addition, the twelve week open label period demonstrated sustained efficacy from onset of placebo controlled phase to the end of the open label trial. The robust and sustained efficacy seen on the primary endpoint was also confirmed on all key secondary endpoints in the placebo controlled as well as during the open label period. So yet another data set on Vyepti that verifies a strong clinical profile in very severe migraine conditions, underlining its best in class profile, not only in the CGRP area, but overall in migraine prevention treatment. Next slide please. Anti PACAP IV holds the potential to address an unmet medical need.

I already been talking about we are looking forward to be sorry. Around last time last year, we moved our next generation migraine program two twenty two, an anti PACAP IDT1 antibody into Phase 2b trial called Proceed. The Proceed trial is an adaptive trial exploring different doses and road administration of two twenty two in patients with migraine for whom one to four previous preventive treatments have failed to provide the benefit. Also the PRESIDE trial has a twelve week as main readout time point, while our previous HOPE trial had a readout at four weeks. Thus, we are aiming to expand our understanding of the molecules potential to the PROCEED trial before initiating a future pivotal program.

In the first part of PROCEED, we explored a range of subcu doses. In late March, a pre planned interim analysis triggered initiation of an IV dose finding part to build on the previous positive HOPE trial. The first patient was randomized to IV administration already in early April. Next slide, please. I’d like to remind you that the anti PEGA program two twenty two is investigating a new and differentiated mode of action compared to anti CGRP treatments.

PACAP and its receptors are broadly expressed. Moreover, abnormal PACAP signaling is involved in pain sensation and neurogenic inflammation. Interference with PACAP signaling has therefore potential to affect motipasib symptoms of headache disorders. It has also been shown in experimental human studies that PACAP induces migraine like attacks that differs from CGRP induced headache. PACAP induces a more delayed migraine like attack associated with more premonitory effects like photophobia and facial pain.

With these biological and functional characteristics, we have the potential to see differentiated clinical profile of anti PACAP different from anti CDRPs. In more severe types of migraine, anti CDRPs have established themselves as effective treatments. However, still thirty percent to forty percent of patients do not achieve adequate response, leaving a major unmet medical need. Anti PACAP IV host potential to address this unmet need. Also, I’d like to mention that Vyepti, we have a well established efficacy by IV treatment and we built an infrastructure in migraine prevention.

Future IV anti PACAP can leverage this established clinical infusion infrastructure. Next slide, please. I am already been talking about looking forward to Bebel Holding Advisory Committee meeting for brexpiprazole. Also in the coming months, we have a better clarity on the progression in our late stage development programs for bexicathrin and linitug once the trials are fully active globally. And to pick up, as I just spoke about, is enrolling very well in the IV part of the PROCEED trial.

What I’d like to highlight here is more our early pipeline, where we see strong biology supporting our programs translating to interesting clinical data. A recent review of data for 09/2009, the anti ACTH program in congenital adrenal hyperplasia in Cushing’s syndrome supported progressing towards formal proof of concept evaluations. We’re also very pleased to note that the regulatory agencies are also seeing a breakthrough potential of this program that includes obtaining an orphan drug designation from FDA yesterday for the congenital adrenal hyperplasia indication. Also for the nine ninety six, the orally active D1D2 agonist program for symptomatic treatment in Parkinson’s disease, we have now a very encouraging dataset on so called good on time, supporting progressing towards a formal proof of concept trial. We are also outlining right now a more clear overall development plan for this program.

This summer, we are also building Phase I further by a new chemical entity going into first in human initial evaluation. I hope that will be working out, so you will hear more about that program in the coming years. With that, I’d like to hand over to Jorg.

Jorg, Financial Lead, Lundbeck: Thank you, Johan. Before we go into the key figures of Q1, let me summarize the following. We had a strong start to the year. Revenue reached an all time high, up 16% at constant exchange rates, with Strategic Brands growing 24% now making up 77% of our total revenue. Growth was led by Viepti and Rexulti in The U.

S. And supported by strong demand momentum across our key strategic brands and regions. Importantly, this was not just about revenue. We saw solid underlying demand trends with volume growth as the primary driver of performance, particularly for our growth brands. Adjusted EBITDA increased by 25.4% and the margin expanded to 34.9%, reflecting strong operating leverage and disciplined resource allocation.

We’ve been able to reinvest through our capital reallocation program while continuing to improve cost ratios. EBIT was up 33% and adjusted EPS increased 11% despite higher financial expenses from the Longboard acquisition, a clear indication of robust underlying profitability. Let’s move to the next slide to look at the financial highlights in more detail. Our revenue reached DKK 6,200,000,000.0, growing 16% in the first quarter of twenty twenty five at constant exchange rates driven by the continued strong performance of our strategic brands, which grew 24%. The adjusted gross margin was 88.9% and was in line with the same period last year.

Sales and distribution costs increased 2% to DKK 1,900,000,000.0. The slight increase reflects targeted investments in Vyepti and the normalization of Rexulti promotion activities in The U. S, including sales force expansion. These were partially offset by resource redeployment following the Trintellix U. S.

Transition and ongoing commercial model optimization. Administrative expenses increased 34.5% to €359,000,000 The increase was primarily driven by legal provisions for ongoing litigation, structural investments including longboard integration and indexation effects. A portion of this increase reflect timing increases. R and D costs increased by 19.6%, reaching €1,200,000,000 mainly driven by the Phase III costs of bexicasrin and the anti alfasunoclean antibody. Adjusted EBITDA grew 24% at constant exchange rates as a result of the strong revenue growth despite continued investments in building the R and D pipeline.

The adjusted EBITDA margin was 34.9%, representing an increase of 1.9 percentage points, reflecting strong operational leverage supported by disciplined capital reallocation, which helped fund investments in R and D and brand growth while continuing to improve cost ratios. Next slide, please. Our EBIT rose 33% to 1,700,000,000.0, reflecting the strong revenue performance, solid cost leverage and lower amortization of product rights despite continued investments in R and D pipeline progression and structural investments. Net financials reached an expense of €221,000,000 The development is mainly driven by higher interest costs due to the new debt obtained in connection with the acquisition of Longboard and unfavorable currency effects mainly due to the U. S.

Dollar. Our effective tax rate was 22%, down from 23% in the same period last year. Net profit increased by 15% to DKK1.2 billion, while adjusted net profit and EPS rose by 11%, reaching DKK1.5 billion. This growth reflects strong EBIT performance, partially offset by higher financial expenses. Next slide, please.

Cash flow from operations was in line with EBIT performance and offset by higher prepaid taxes, which reflected the expected income for the full year, resulting in total inflow from operating activities in the first quarter of twenty five million of €632,000,000 The cash flows from investing activities were an outflow of 111,000,000 mainly due to purchase of PP and E. The cash flow from financing activities were an outflow of DKK 2,500,000,000.0 in the first quarter of ’twenty five, primarily driven by the repayment of part of the loan facility for the acquisition of Longbaud and higher dividends paid to shareholders in March 25. Next slide, please. The performance in Q1 gives us confidence that we are seeing sustained momentum across our strategic brands, particularly Rexulti and Vyepti, and that our resource reallocation efforts are supporting continued investment without compromising profitability. Based on the strong underlying demand trends and the progress in our disciplined capital reallocation program, we’re raising our full year guidance.

We now expect revenue to grow between 811% at constant exchange rates and adjusted EBITDA to grow between 814%. On a reported basis, revenue growth is now expected to be equal to constant exchange rate compared to around one percentage point higher previously. Adjusted EBITDA is expected to be around zero five percentage point below constant exchange rates versus two percentage points higher previously. Both changes are due to updated FX assumptions primarily related to the U. S.

Dollar. Our full year guidance is based on exchange rates at the March with the U. S. Dollar at 6.9%, now closely aligned with our hedge rate of 6.79%. This neutralizes the prior expected upside from significantly reduces our expected hedge loss to around €150,000,000 compared to $425,000,000 to €450,000,000 previously.

We continue to guide for an adjusted gross margin between 8889% and R and D spend between 5,000,000,000 to €5,200,000,000 In addition, depreciation and amortization impairment losses are expected to be in the range of 1,700,000,000.0 to €1,900,000,000 Net financial expenses are expected between $535,000,000 and $585,000,000 primarily reflecting the impact of longboard related financing. Effective tax rate is unchanged at 21% to 24%. We remain mindful of the challenges ahead, particularly the anticipated loss of exclusivity on some of our strategic brands later in this year, including Printellix, which is expected to face generic entry in Canada and the continued transition to Takeda in The U. S. We also expect further erosion in the mature brand portfolio with a projected mid single digit revenue decline.

These dynamics remain fully reflected in our outlook and will continue to be closely monitored. With that, I would like to hand over to Charles.

Charles Van Siel, President and CEO, Lundbeck: Thank you, Jorg, and thank you to the team for the updates. Let me make some closing remarks before we go to questions. So if we could have the next slide, please. Again, what you heard from us today is certainly a strong confidence and strong validation of our path towards the focused innovator and the strategy that we follow, strong business momentum that we see across the board, across our key strategic assets and across the geographies. So the growth engine remains very strong, and it’s a proof point, of course, of the work we’ve done over the last eighteen months to ensure that engine is well funded for this growth.

We see the advancement of the pipeline, as Johan had mentioned, but also see earlier pipeline opportunities coming to the fore. And of course, with this, we are able to with the confidence we have in the underlying performance, able to raise our guidance and maintain a very healthy financial picture in our capital, the redeployment either to innovation or growth. So again, strong performance, strong momentum and strong confidence from the management team on where we are heading with Lundbeck. With that, I think we can now open it for questions.

Sandra, Chorus Call Operator: We will now begin the question and answer session. Our first question comes from Mark Goodman from Leerink Partners. Please go ahead.

Basma, Analyst, Leerink Partners: Hi, good morning. Thank you for taking our question. This is Basma on for Mark. Our first question has to do with bixiecafferin. Could you please provide some updates regarding the enrollment in both TEACHE and TPOTION trials?

And the second question has to do with the Phase 1b of the 14800, What should we expect about the data that’s going to be released? Is it going to be safety data only? Or is it going to be some target engagement data as well? And could you please remind us again how many of those cohorts were assessed in this trial? Thank you very much.

Charles Van Siel, President and CEO, Lundbeck: Thank you for the question. Johan?

Johan, R&D Lead, Lundbeck: Yes. I’m not sure I heard the second question, but I will try. So Bexicasrin, your question was about Enrollment. Enrollment rates, right. And that’s why what I mentioned was that we are fairly early stage of the trials.

We are just opening up more globally. So this is not a fully global open trial yet. So we are not reached the stage where you really have solid proof points where you are. But so far, it’s going well. We have had a number of regulatory interactions that also been very supportive.

So we’re kind of through that phase of the trial and opening up through site activations right now. That’s all I can say at this stage. The second one was about again, I didn’t hear exactly which did you talk about? CTH. CTH, yes, zero nine, Yes, that’s a program we’ve been actually presenting a little bit before.

It’s the dual indication program that is going for both congenital adrenal hyperplasia in Cushing, and we have data from both populations at this stage. We have mostly had open label approach with that study. And we’re looking at exploring further doses in a more controlled environment. That will be the next step of the trial. So basically, more referring to a placebo response in building it up.

As I also said, we have an orphan drug designation on it now for congenital adrenal hyperplasia, but the program is really built on both indications moving forward. But we have flexibility in the program going for either of those two indications. In terms of doses, we are not at the stage where we’re about the doses because we’re still at an exploratory stage.

Basma, Analyst, Leerink Partners: Thank you very much. That’s very helpful.

Sandra, Chorus Call Operator: The next question comes from Michael Novod from Nordea. Please go ahead. Thank

Michael Novod, Analyst, Nordea: you very much. First one for Johan in terms of can you try to detail a bit more the what you sort of sense being the main topics on the AdCom for Rexulti and PTSD? And also how fast a potential decision can be made afterwards? Because now it’s been in the hands of the FDA for quite a long time. So are you do you think they will be able to act fast following outcome of the vote?

And then secondly, on the guide, can you try to sort of elaborate a bit more maybe in actual numbers how much actually sort of put in, in terms of generic erosion? Because if you just take your first quarter and multiply by four, then you get to 13% growth in reported terms. So just to get a feeling for how much you actually put in, how conservative you actually are and also whether you have already taken some cautiousness in, should there be any thing on tariffs, etcetera? Thanks a lot.

Charles Van Siel, President and CEO, Lundbeck: Thank you, Michael. So Johan, you want to comment on PTSD?

Johan, R&D Lead, Lundbeck: Yes. I mean, obviously, the main topics we can expect to be for the outcome, we can expect to be the usual two, three questions. Have we demonstrated efficacy sufficiently? Risk benefit profile and then it’s obviously a last question about the provability. Those are the general ones.

There may be more specific questions. And obviously, in the actual meeting, there will be many more topics to discuss. We are basically looking forward to get to this meeting. It’s been delayed a few times. In terms of the decision, we have no indication from FDA when and how we can expect a decision after the outcome.

I think they probably like to hear the outcome and they like to mull over what they get from the outcome before they reach a decision. So we have no new date for decision. And as you know, they canceled the PDUFA date, which was the official approval date in February.

Jorg, Financial Lead, Lundbeck: Take the second question. Michael, first of all, I think I would not just extrapolate Q1 because as we’ve also stated, in Q1, you had a, you can say, normalization of inventory levels. That’s an effect we would quantify approximately at €150,000,000 that impacted our Q1 numbers. That, of course, is not reoccurring in the following quarters. I think when it then comes to the outlook, it’s mostly around the three areas we talked about.

It’s the early, somewhat mid year expected generic erosion on Trintellix in Canada. It’s basically the generics entry for the latter half of the year for Abilify Maintainer in Europe. And it is clearly also the divestment of our Takeda agreement or basically Trintellix agreement back to Takeda, which fully shifted into royalties. And that, of course, is on the back of an eroding brand towards the end of this year. And I think your last aspect was in terms of impact on tariffs on our guidance.

We have given a disclaimer that, of course, our guidance focuses here on the operating part of our business and excludes impacts from macroeconomic environment. But I think it’s fair to say that $425,000,000 we see from a tariff perspective so far not a significant impact.

Michael Novod, Analyst, Nordea: Maybe just one follow-up to Abilify Maintain. What is sort of the status for what you’ve seen in terms of generic activities trying to get approvals? What about price listings? Because I guess price listings are extremely important in those markets as well. If you don’t have sort of applied for price listing, then it won’t happen, at least not in 2025.

So can you give an update to that?

Mikaela, Commercial Lead, Lundbeck: I can give an update that the latest we’ve heard is that it’s still a clock stop with EMA. So the regulatory file is still being processed. And in terms of payer activity, I don’t have a lot of specifics at this point. But of course, that of course also follows a regulatory approval by EMA. Hope that helps Thank very you.

Michael Novod, Analyst, Nordea: Sugar. Thanks a lot.

Sandra, Chorus Call Operator: The next question comes from Manos Mastorakis from Deutsche Bank. Please go ahead.

Manos Mastorakis, Analyst, Deutsche Bank: Hello. Thank you very much and congrats on the results. So two, if I may. First for Johan, what more can you share about what you’ve learned so far about the biology or administration of the take up molecule given the outcome with the subcutaneous? And what would you say is the impact on your strategy and investments moving forward?

Is that potentially where the Viepti increased investment is coming from? Just give us a little bit of a more high level impact of the take up developments. And maybe for Shar, I believe you previously said you’ve been providing more color on how the resource allocation program is progressing. And it’s also a question for Jorg really. But what can you share now to be more specific, how long is this going to go for its reallocation program?

How much more room for further improvement in terms of margins do we have? Thank you.

Johan, R&D Lead, Lundbeck: Yes. I can start with the pickup question. At this stage, we are progressing already control studies, so we don’t have full insights into data. This is a switch that was pre planned in the protocol to be able to occur. So it’s a usual Phase IIab trial where you try to really nail down the doses that are active from the initial very encouraging HOPE trial, which was an IV trial as you may recall.

So the whole idea here is, of course, to explore subcu dose range and IV dose range. So actually, I don’t have much more to say. In terms of differentiation, it’s a strong differentiated profile biologically and quite frankly also clinically as I went through. The translation of that into differentiation against CGRP class or any other class like Botox for prevention of migraine is still unclear at this stage. We have some sniff of this in the PROCEED trial where we look at different populations.

And I’d like to remind you, we’re looking at people that failed prior preventive treatments. So that’s also part to really already at this stage look at how the drug performs, which was also the HOPE population. I think you asked about Vyepti and further yes.

Charles Van Siel, President and CEO, Lundbeck: I think, Manas, your question maybe alludes to, are we, in a sense, focusing in our investment role behind Vyepti? The answer is no. Vyepti remains well funded for its growth And also the investment we make from clinical development in anti PACAP remains unchanged. And as Johan said, we will learn more as we read out the Phase IIb and enter into Phase III. Then I think, Manas, your question was on capital reallocation.

As we’ve always stated, we have, in essence, a target of achieving an ability to have flexibility of around 10% of our capital, so 1,000,000,000 to 1,500,000,000.0 and we are progressing very well with that. That’s coming from either additional growth or from being very efficient in how we operate. And we see that we have a strong line of sight to be able to bake all of that into our midterm. And it allows us, of course, as an example today, to be able to absorb the Phase III results or Phase III program of bexicasiran into our P and L and remain within a healthy financial picture. So I think that gives you a sense that we’re executing against it, transforming the company but also being very mindful around how we redeploy the capital in the best place going forward.

Sandra, Chorus Call Operator: The next question comes from Xiang Deng from UBS.

Xiang Deng, Analyst, UBS: Two, please. The first one is, I know there are still a lot of uncertainties, but just wondering what are your initial thoughts on most favored nations of pricing, especially just wondering for Ruxolitinib, where you have relatively limited European basically launch. Just wondering, I know it’s a lot of uncertainty, just wondering how should what are your initial thoughts on this? That’s the first question. And the second one is for Yuhnn.

If I can if I may just maybe follow-up on the PACAP question. Just wondering because usually the conversion from IV to subcu formulation is relatively straightforward. I mean the KEYTRUDA, a lot of oncology drugs does that. Many use Halozyme technology, which is relatively mature. So just wondering if you could give us color or any theories of what actually happened.

So why do you why the subcu dosing didn’t work out as planned? So

Charles Van Siel, President and CEO, Lundbeck: let me start with the first question on, I think, your question around overall policy outlook. Of course, as we are all, again, stating that today, we don’t have knowledge that gives us a clear indication of where this will go. We are very focused, as we are with all governments across all countries, to make sure that access for patients is the top priority. But at this point, it’s speculative to really quantify what this might mean for us. And so I think as an industry, we’re working closely with all governments to ensure that access for patients to innovation remains unchanged.

Johan, you want to comment on anti PACAP?

Johan, R&D Lead, Lundbeck: Yes. Thanks for the question. Let me start by reminding you about the HOPE trial, where we really went out to test whether this mechanism may work. So we had a high dose, what we call a high dose, which was really hammering the target, very high dose. And then we had somewhat lower dose in a smaller group of patients.

So that was really just finding whether the biology delivers anything. What we’re doing in the PROCEED trial is going down in doses. So we’re pushing it downwards to see how far we can go down, which is extremely important particularly for antibody therapies and the cost of goods etcetera. So we’re pressing the margin downwards. In terms of what happened when you do that, I can only speculate, because as I said, I haven’t seen the data.

They could of course be other factors playing a role, but dose is one of those factors pressing it down. It’s also pharmacodynamics. If you give a drug IV, you have a hit and run pharmacology much more than a subcu. Subcu is much more delayed way of interacting with the target. So it’s very important for us to look at basically pharmacokinetics coupled to target engagement.

Because the turnover of pick up in U. Which is the driver of the biology here is not extremely well known in migraine conditions or not even normal in man. So there are many PKPD related things that we’ll find out hopefully in the dataset. Otherwise, can speculate, but it’s better to get the data and we talk about it once we have it.

Charles Van Siel, President and CEO, Lundbeck0: Thank you.

Sandra, Chorus Call Operator: The next question comes from Charles Pitman King from Barclays. Please go ahead.

Charles Van Siel, President and CEO, Lundbeck1: Hi, guys. Thanks so much for taking my questions. A couple of quick clarifications. Just firstly, on your condensed statement of cash flows, I’ve just noticed there’s a little bit less disclosure. So wondering if you’re going to be providing expanded cash flow financials?

Or we consider this to be the kind of level of disclosure to expect going forward, for example, the breakdown of depreciation and amortization in your cash flows? Secondly, just going back to the PTSD question. Given the kind of delayed launch timeframe, I know previously you were saying no change to expectations if you achieve by the end of 1H. Eighteenth of July suggests maybe there’s a quarter or two further delay to bring that to market. Does that impact your peak sales expectation for the indication?

And then on the kind of Brintellix strength, you kind of highlighted the double digit European growth. What do kind of credit this rather strong growth to so many years after its launch? Are you kind of reallocating efforts behind that following the end of the Trintellix deal with Takeda? And can I just double check that you are expecting generic competition in Japan by the end of this year for Trintellix given Slide nine’s market exclusivity extension of two years comment? Thank you.

Charles Van Siel, President and CEO, Lundbeck: Thank you, Charles, for that question. Let’s start with cash.

Johan, R&D Lead, Lundbeck: Well, I’m

Jorg, Financial Lead, Lundbeck: happy to take the first question. Of course, we’re in principle providing a condensed statement of cash flows in the current form similar to how we’ve always done it over the past quarters, and that’s actually exactly the way how we will also present it going forward.

Charles Van Siel, President and CEO, Lundbeck: Thank you, Jorg. Tom, would you like to comment on PTSD peak sales, timing of launch?

Tom, Commercial Operations Lead, Lundbeck: Yes. So thank you for the question, Charles. When we look at the PTSD forecast, clearly there will be a delay based upon the AdCom. And once we hear back from the AdCom, we will be able to mobilize our resource and and launch honestly the next day related to beginning to start commercialization. On the forecast, you basically just do a lift and shift as it relates to the peak year sales.

Because we’re going to be going generic in 2029, we had peak year sales projected in 2028, and we believe that we can still achieve that number.

Charles Van Siel, President and CEO, Lundbeck: And I’d just build on your comment, Tom, to remind all of those who have dialed in that, of course, we still remain with a fifty-fifty chance of an approval. Although we have an AdCom, it is not in our midterm guidance. And so this is, of course, just to be very clear how we see this indication with the outside chance of approval. The question then for you, Mikaela, was around Brintellix, your confidence around why it’s growing so well in Europe. Of course, I would say the organization, what you’re putting in place.

And then what is the timing on Japan, Brintellix,

Mikaela, Commercial Lead, Lundbeck: So, thank you for the question, Charles. Let me start with Europe. We continue to see a strong execution of our strategy, which of course has a level of going deeper with our prescribers. But also in some areas, we’ve expanded into new segments of prescribers. So that is what’s bringing us the strong growth.

So a continued strong execution in the marketplace and investing behind Brintellix to the tune that it is still relevant given the stage of the life cycle. With regards to Japan, maybe a misunderstanding, the generic is not has not been intended for Japan this year. That was we were mentioning Canada that we expect to see generics in Canada this year. Japan, I can confirm that we have gotten an extension or the indication that gives us a two year extension to 02/1931. So no generics expected for Brintellix in Japan.

This year, it’s Canada. So just wanted to

Charles Van Siel, President and CEO, Lundbeck: confirm that. Thank you, Nicolas.

Charles Van Siel, President and CEO, Lundbeck1: Perfect. Thanks, Joraj.

Sandra, Chorus Call Operator: The last question for today’s call comes from Shana Harmar from Jefferies. Please go ahead.

Charles Van Siel, President and CEO, Lundbeck0: Hi. A couple from me, please. Could you just clarify how you expect Rexulti’s performance to develop throughout the rest of the year, particularly in terms of the new goal for Alzheimer’s adaptation as a percentage of the Rexulti brand? And then I know, sort of you pointed towards strong performance in Alzheimer’s adaptation and MDD, but are you seeing any weakness or perhaps share taking in schizophrenia? And then finally, your guidance rate of the EBITDA level implies potential for EBITDA growth at a higher level to revenue growth for the year.

Could you just tell us some of the key levers to achieving the top end of that profit range? Thank you so much.

Tom, Commercial Operations Lead, Lundbeck: Yes. Yes. So thank you for the question, Shannon. As we look at Rigsulti performance, we’re pleased with the progress that we made during the first quarter of twenty twenty five and we expect that trajectory to continue for the rest of the year. As I said, this will primarily be driven by the continued uptake of AADAD supported by consistent performance for the MDD franchise as well.

As it relates to schizophrenia, schizophrenia represents about 8% of our total business, so it’s very, very small. And as we think about the if we look at source of business for the new competitors that have entered the marketplace, we really have seen a de minimis impact in terms of switches from Rexulti to the new competitors in schizophrenia.

Jorg, Financial Lead, Lundbeck: And coming back to your question, I think, first of all, it’s the strong revenue growth that drives the improvement of basically 3% increase in our guidance on adjusted EBITDA. But clearly, we have also reflected, I would say, towards specifically 25%, a bit of a higher ambition on cost discipline around especially contribution out of a global procurement for growth program.

Charles Van Siel, President and CEO, Lundbeck: I see no other questions. So with that, I assume we can close the call and want to thank everyone for joining today. Look forward to seeing you very soon.

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