ANNUAL RePORT 2007 - Alle jaarverslagen

ANNUAL RePORT
2007
DESTINATION
NEXT DECADE

DESTINATION
NEXT DECADE
Cover photo:
Eric Wainwright is a psychiatrist and works as Medical
Advisor for Lundbeck Argentina where he is responsible
for education about depression in Argentina and Chile.
Read about Eric Wainwright and his work in the
Lundbeck Magazine 2008.

Lundbeck
at a glance
H. Lundbeck A/S is an international pharmaceutical company with more than 50
years of experience in research, development, production, marketing and sale of
pharmaceuticals for the treatment of diseases of the central nervous system (CNS).
The Group employs more than 5,300 employees in 54 countries.
F
ocus on research and
development
One of Lundbeck’s most important
tasks is to develop new and innovative pharmaceuticals
to help people who suffer from
CNS diseases. Accordingly, Lundbeck ploughs
about 20% of its revenue back into research
and development each year.
Latest pharmaceuticals
Azilect® (rasagiline)
Azilect® for the treatment of Parkinson’s disease
was developed in collaboration with Teva
Pharmaceutical Industries Ltd. and launched in
the first market in Europe in 2005. Lundbeck
currently markets Azilect® in 24 countries and
plans to launch it in additional markets. According
to WHO, there are five million cases of
Parkinson’s disease worldwide at any given
time.
Cipralex®/Lexapro® (escitalopram)
Cipralex®/Lexapro® for the treatment of depression
and anxiety was launched in 2002
and is currently the most frequently prescribed
branded antidepressant in Europe and the
USA. Lexapro® is marketed in the USA by
Forest Laboratories, Inc. In 2007, Cipralex® was
approved in the EU for the treatment of obsessive-compulsive
disorder (OCD). According to
WHO, there are 150 million cases of depression
worldwide at any given time.
Circadin® (melatonin)
In 2007, Lundbeck in-licensed Circadin® for
the treatment of primary insomnia from
Neurim Pharmaceuticals Ltd. with rights to
about 80% of the European market. Lundbeck
expects to launch Circadin® in the first markets
in Europe in 2008. Insomnia is very common
and is estimated to affect about 27% of
any population.
Ebixa® (memantine)
Ebixa® for the treatment of moderate to
severe Alzheimer’s disease was launched in
2002 and is marketed in cooperation with
Merz Pharmaceuticals GmbH. Memantine is
currently the second-most prescribed pharmaceutical
in the world for the treatment of
Alzheimer’s disease. According to WHO, there
are 38 million cases of Alzheimer’s disease and
other dementia disorders worldwide at any
given time.
Serdolect® (sertindole)
Serdolect® for the treatment of schizophrenia
has been on the market since the beginning of
2006. Serdolect® was launched in 28 countries
within the first two years. According to WHO,
there are 25 million cases of schizophrenia
worldwide at any given time.
Lundbeck’s clinical development projects as of 4 March 2008
Development stage Registration Expected
Indication | Compound Mechanism of action Phase I Phase II Phase III application launch
Schizophrenia | Serdolect® USA Dopamine/serotonin 2008 2009
Schizophrenia | Bifeprunox Dopamine/serotonin 2010+
Stroke | Desmoteplase Plasminogen activator 2010+
Alcohol dependence | Nalmefene Specific opioid receptor antagonist 2010+
Depression | Lu AA21004 Serotonin modulator & stimulator 2010 2010+
Psychosis | Lu 31-130 Monoaminergic 2010+
Depression | Lu AA24530 Multiple target 2010+
Depression | Lu AA34893 Multiple target 2010+
Psychosis/bipolar disorder | Lu AA39959 Ion channel modulator 2010+
Stroke/neuronal damage | Lu AA24493 Tissue protecting cytokine 2010+
Neurological diseases | Lu AA47070 Adenosine receptor antagonist 2010+
Mood and anxiety disorders | Lu AA37096 Multiple target 2010+
2

Lundbeck worldwide
Parent company
Denmark
Production
Denmark
Italy
United Kingdom
Research
Denmark
USA
Sales
Europe
Austria
Belgium
Bulgaria
Croatia
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Netherlands
Iceland
Ireland
Italy
Latvia
Lithuania
Norway
Poland
Portugal
Romania
Serbia & Montenegro
Slovakia
Slovenia
Spain
Sweden
Switzerland
United Kingdom
International Markets
Argentina
Australia
Belarus
Brazil
Canada
Chile
China
Egypt
Hong Kong
India
Israel
Japan
Malaysia
Mexico
Pakistan
Philippines
Russia
Saudi Arabia
Singapore
South Africa
South Korea
Turkey
Ukraine
United Arab Emirates
Venezuela
USA
Foundations & institutes
Lundbeck International Neuroscience Foundation
Lundbeck Institute
Countries are listed under Europe, International
Markets and USA in accordance with Lundbeck’s
market regions.
3

Contents
5
6
12
16
24
26
27
32
36
40
46
51
54
59
Financial highlights 2003-2007
Business review
Marketed pharmaceuticals
Progress in the regions
Strategic focus
Strategic initiatives
Growth through innovation
Corporate governance
Risk management
The Lundbeck share
Focused efforts: Environment, health and safety
The right skills for the new decade
Research and knowledge sharing
Financial statements 2007
Information about disease areas
10
22
30
34
38
44
56
Alzheimer’s disease
Depression and mood disorders
Alcohol dependence
Parkinson’s disease
Primary insomnia
Schizophrenia and psychotic disorders
Acute ischaemic stroke
4

Financial highlights
2003-2007
Revenue DKK 10,985 million
Research and development DKK 2,187 million
Profit from operations DKK 2,695 million
Net profit for the year DKK 1,770 million
Group financial highlights 2003-2007
2003 2004 2005 2006 2007 2007
DKKm DKKm DKKm DKKm DKKm EURm 1
Revenue 9,941 9,733 9,070 9,221 10,985 1,474
Research and development costs 1,931 1,776 1,782 1,958 2,187 294
Profit from operations 2,147 2,554 2,170 1,784 2,695 362
Net financials (76) 16 108 (64) (50) (7)
Net profit for the year 1,384 1,689 1,574 1,107 1,770 238
Total assets 11,070 11,509 11,628 11,631 12,326 1,653
Equity 6,901 7,839 7,492 6,765 7,185 964
Cash flows from operating and investing activities 2 84 884 1,587 1,633 1,610 216
Property, plant and equipment investments, gross 962 305 447 567 474 64
% % % % % %
EBIT margin 21.6 26.2 23.9 19.3 24.5 24.5
Return on capital employed 37.3 37.0 32.0 25.2 34.9 34.9
Return on equity 21.9 23.2 20.7 15.6 25.3 25.3
Research and development costs as a percentage of revenue 19.4 18.2 19.6 21.2 19.9 19.9
Solvency ratio 62.3 68.1 64.4 58.2 58.3 58.3
Capital turnover 89.8 84.6 78.0 79.3 89.1 89.1
DKK DKK DKK DKK DKK EUR 1
Earnings per share (EPS) 3, 4 5.98 7.42 7.04 5.24 8.63 1.16
Diluted earnings per share (DEPS) 3, 4 5.98 7.42 7.02 5.23 8.63 1.16
Proposed dividend per share 3 1.77 2.21 2.10 1.57 2.56 0.34
Cash flow per share 3 8.19 11.62 9.20 6.59 13.18 1.77
Net asset value per share 3 29.71 34.21 33.99 32.40 35.81 4.80
Market capitalisation (million) 23,098 28,517 29,630 33,060 28,605 3,836
2003 2004 2005 2006 2007
Average number of employees 5,223 5,155 5,022 5,111 5,134
1) Income statement items are translated using the average EUR exchange rate for the year (745.11). Balance sheet items are translated at the EUR exchange rate on
31 December 2007 (745.66).
2) Comparative figures have been restated so that securities are included in cash flows from investing activities.
3) The calculation is based on a share denomination of DKK 5.
4) Calculated according to IAS 33 Earnings per share.
Comparative figures involving number of shares have been adjusted by an adjustment factor of 0.9988 for the effect of employees exercising warrants.
5

Business
review
Lundbeck achieved its best ever results and also achieved its target of an EBIT margin
of 25% in 2007. The Group recorded considerable growth for its new pharmaceuticals
and the current development pipeline is the largest and broadest in the history of the
Lundbeck Group.
I
n 2007, the Group continued to record
sales growth for its new pharmaceuticals,
leading to the highest revenue ever
recorded; just under DKK 11 billion.
The Group’s financial performance in 2007 was
affected by three non-recurring items. In 2007,
Lundbeck received two non-recurring payments
from Takeda Pharmaceutical Company
Limited totalling DKK 420 million, which had a
favourable impact on consolidated revenue.
The development of an optimised production
process for one of Lundbeck’s pharmaceuticals
has enabled the Group to consolidate its inhouse
production of active pharmaceutical ingredients
at two factories instead of the three
facilities used today. As a result, Lundbeck is considering
whether the Seal Sands manufacturing
unit in the UK can continue to be a part of the
Group’s production of pharmaceuticals in the
long run. Lundbeck is investigating the opportunities
for divesting the facility in an attempt to
maintain production at the Seal Sands site. If
these attempts are not successful, a closedown
of the facility may become a reality during 2008.
The reduced need for production capacity for
the total Group has led to a DKK 381 million
write-down of the value of the Seal Sands facility
in 2007, adversely impacting the Group’s
production costs. In the coming years, Lundbeck
expects annual production cost savings of
approximately DKK 70 million by the production
consolidation, but for 2008 production
costs will not be impacted.
Overall, non-recurring items had a DKK 39
million favourable impact on profit from operations
for 2007.
6
Revenue
Revenue amounted to DKK 10,985 million
in 2007, equivalent to an increase of 19%.
Measured at constant exchange rates, revenue
was up 21%. Exclusive of two non-recurring
payments from Takeda totalling DKK 420
million, the Group generated revenue of DKK
10,565 million, an increase of 17% on 2006.
Sales of the Group’s new pharmaceuticals –
Cipralex®/Lexapro®, Ebixa®, Azilect® and Serdolect®
– were DKK 8,544 million in 2007, up
DKK 1,671 million, or 24%, on 2006. Revenue
derived from the Group’s new pharmaceuticals
accounted for 78% of total consolidated revenue
in 2007 compared to 75% in 2006. Revenue
from the Group’s mature pharmaceuticals
only decreased by DKK 223 million in 2007.
Profit from operations
Profit from operations amounted to DKK 2,695
million. Exclusive of non-recurring items, profit
from operations amounted to DKK 2,657 million,
63% higher than in 2006. With this financial
performance, the Group met the financial
forecasts for profit from operations set out in
connection with the presentation of the annual
report for 2006, and which were later revised
in connection with the presentation of
the Group’s interim report for the third quarter
of 2007. The consolidated EBIT margin in 2007
was 25.1% exclusive of non-recurring items, in
line with the Group’s guidance which was initially
announced in connection with the presentation
of the annual report for 2004.
The Group’s investments totalled DKK 739
million in 2007 inclusive of the payment for
in-licensing of Circadin® for the treatment of
primary insomnia.
2007 Forecasts, DKK Realised*, DKK
Profit from operations* More than 2.6bn 2,657m
EBIT margin* 25% 25.1%
Investments Approx. 650m 739m
* Exclusive of non-recurring items.
Expenses
Lundbeck’s total expenses, exclusive of net financials
and tax, were DKK 8,290 million in
2007, or 11% more than in 2006. Excluding
the write-down on the Group’s production assets,
costs totalled DKK 7,909 million, corresponding
to an increase of 6% on 2006.
Lundbeck maintains a high level of research
and development activities, and expenses
amounted to DKK 2,187 million in 2007, an increase
of 12% on the previous year and representing
21% of revenue (exclusive of non-recurring
items). Production costs amounted to
DKK 2,198 million in 2007. Exclusive of nonrecurring
items, production costs totalled DKK
1,817 million, corresponding to 17% of revenue
and an increase of 10% compared to 2006.
Costs incurred for sales and distribution decreased
by 0.4% to DKK 2,409 million, whilst
administrative expenses were up by 7% to DKK
1,514 million.
Net profit for the year
The tax charge for 2007 was DKK 792 million,
compared with DKK 526 million in 2006. The
effective tax rate was 30.9% in 2007 as compared
with 32.2% in 2006.
Lundbeck’s future basic tax rate is expected to
be reduced to 30% as a consequence of the
new tax reform passed by the Danish parliament
in July 2007. A result of the reform is
that the Danish corporate tax rate has been
reduced from 28% to 25%.

2007: DKK 10,985 million
Revenue 2006: DKK 9,221 million
Net profit for the year amounted to DKK
1,770 million, corresponding to an increase of
60% relative to 2006.
In 2007, the Lundbeck Group bought back own
shares amounting to DKK 1.2 billion.
It is proposed to the Annual General Meeting
that a dividend of 30% of net profit for the
year be paid, corresponding to DKK 2.56 per
share.
Growth in all regions
During 2007, Lundbeck’s new pharmaceuticals
continued to record positive growth rates in
the Group’s three market regions: Europe, USA
and International Markets. The Group generated
the highest revenue in Europe, DKK 5,501
million, which was 7% more than in 2006. International
Markets achieved growth of 22%
on the year before, generating revenue of DKK
2,194 million. After shipments to Forest
Laboratories, Inc. had been normalised in 2007,
income from sales in the US market amounted
to DKK 2,599 million, which was an increase of
35% relative to 2006.
Cipralex®/Lexapro® is the Group’s best-selling
pharmaceutical in terms of revenue and is the
most frequently prescribed branded pharmaceutical
for the treatment of depression in Europe
and the USA. At the end of 2007, Cipralex®
had a share of 15.2% of the European
market for antidepressants. Cipralex® revenue
in Europe amounted to DKK 2,827 million in
2007, an increase of 10% on last year. Lundbeck’s
income from Lexapro® sales in the USA
amounted to DKK 2,594 million, corresponding
to an increase of 35% relative to 2006. At the
end of 2007, Lexapro® held 22.7% of the US
market for antidepressants.
In the third quarter of 2007, Cipralex®/Lexapro®
had a market share of 9.4% in International
Markets. Revenue from Cipralex®/Lexapro®
in International Markets amounted to
DKK 1,267 million, corresponding to an increase
of 34%.
In January 2007, Cipralex® consolidated its
market position in Europe when the product
was approved for the treatment of obsessivecompulsive
disorder (OCD). In the EU,
Cipralex® is approved for the treatment of
depression, generalised anxiety disorder, panic
disorder, social anxiety disorder and OCD.
Furthermore, in June 2007 Lundbeck once
again announced the results of clinical studies
which demonstrate that Cipralex® is superior
to Cymbalta® (duloxetine) in the treatment of
major depressive disorder. Also, in November
2007 Lundbeck and its business partner Forest
in the USA announced positive results of a
phase III trial with Lexapro® in adolescents
with major depressive disorder.
Ebixa®, Lundbeck’s second-largest pharmaceutical,
held 16,0% of the European market for
pharmaceuticals to treat Alzheimer’s disease
at the end of 2007. Sales of Ebixa® in Europe
were up 20% in 2007 to DKK 1,359 million. In
the International Markets region, Ebixa® had a
market share of 10.9% in the third quarter of
2007 and revenue of DKK 295 million in 2007,
an increase of 29% on the year before.
Memantine, the active ingredient in Ebixa®, is
currently the second-most prescribed pharmaceutical
in Europe and International Markets
for treating Alzheimer’s disease.
Azilect® has now been launched in 23 countries
across Europe. Marketing of the pharmaceutical
is progressing well, exceeding management’s
expectations for the product prior
to the launch. At the end of 2007, Azilect®
held 4.6% of the European market for pharmaceuticals
to treat Parkinson’s disease. Azilect®
revenue in Europe amounted to DKK 156 million
in 2007, an increase of 122% on 2006.
Azilect® has been launched in only one market
in the International Markets region, and revenue
is therefore at a relatively low level.
The launch of Serdolect® for the treatment of
schizophrenia fell short of management’s expectations
for the pharmaceutical. Sales
amounted to DKK 34 million in 2007, or DKK
25 million higher than in 2006. At the end of
2007, Serdolect® had been launched in 28
markets.
Partnerships
A large part of Lundbeck’s business operations
are rooted in the establishment of partnership
agreements, and 2007 was no exception.
In September 2007, Lundbeck entered into a
strategic alliance with Japan-based Takeda for
the exclusive co-development and co-commercialisation
in the USA and Japan of several
compounds in Lundbeck’s pipeline for the
treatment of mood and anxiety disorders. The
partnership will initially focus on co-development
and co-commercialisation of the two
most advanced compounds in Lundbeck’s
pipeline for the treatment of mood and anxiety
disorders, Lu AA21004 in clinical phase III and
Lu AA24530 in clinical phase II, with the possibility
of, under certain conditions, including
two other compounds of the same class which
are in clinical phase II and clinical phase I, respectively.
Assuming approvals, the companies
plan to co-promote the compounds in the
USA and Japan. The collaboration is important
for Lundbeck in connection with resource allocation
for the development of other pharmaceutical
candidates, and at the same time it
solves the Group’s strategic challenge related
to setting up its own commercial presence in
the USA and Japan. Management currently expects
that the Group will have set up its own
commercial presence in the USA around the
turn of the next decade.
In September 2007, Lundbeck in-licensed the
approved drug Circadin® for the treatment of
primary insomnia from the Israeli company
Neurim Pharmaceuticals Ltd. with exclusive
rights for the majority of markets in Europe,
including the five major markets (France, Germany,
Italy, Spain, United Kingdom). Lundbeck
expects to launch Circadin® in the first markets
in 2008.
A broader development portfolio
The year 2007 involved many changes to
Lundbeck’s development portfolio. At the beginning
of 2007, Lundbeck and partner Merck
& Co., Inc. decided to discontinue the further
development of gaboxadol for the treatment
of sleep disorders. Data from the pivotal clinical
trial suggested that the overall clinical profile
for gaboxadol in insomnia did not support
further development.
However, Lundbeck’s development portfolio
has subsequently progressed successfully, and
in 2007 the Group’s research and development
efforts enabled Lundbeck to advance three
pharmaceutical candidates into clinical phase
7

Revenue growth:
+17% +22% +136% +250%
I, two pharmaceutical candidates into clinical
phase II and one candidate (Lu AA21004) into
clinical phase III.
In October 2007, Lundbeck announced that Lu
AA21004 showed highly significant results in a
phase II clinical trial on the primary efficacy
endpoints with both 5 and 10 mg compared to
placebo and that the compound also had an
attractive safety profile.
In December 2007, the Group further consolidated
its development portfolio by expanding
its agreement with partner PAION AG concerning
desmoteplase for the treatment of
acute ischaemic stroke. The agreement came
into effect in January 2008 after a satisfactory
due diligence. Under the terms of the new
agreement Lundbeck has obtained global exclusive
rights to desmoteplase with full control
of development and commercialisation of the
pharmaceutical. The new agreement is based
on a new analysis of the non-significant results
announced by PAION and Forest in the spring
of 2007. The analysis has shown that a large
proportion of the patients enrolled in the trial
contrary to expectations did not to a sufficient
degree have a blood clot, and this may explain
why desmoteplase, which is a clot-dissolving
agent, failed to demonstrate positive results
compared to placebo.
Lundbeck has thus consolidated its clinical
foundation, and by the end of 2007, Lundbeck
had the largest and broadest pipeline of pharmaceutical
candidates in the history of the
Group.
Protection of patents and other
intellectual property rights
USA
On 5 September 2007, Lundbeck and Forest
announced that the U.S. Court of Appeals for
the Federal Circuit had affirmed a 13 July 2006
decision by the U.S. District Court for the District
of Delaware, which determined that the
U.S. patent covering escitalopram is valid. The
decision upholds the injunction preventing
IVAX Corporation/Teva Pharmaceutical Industries
Ltd.’s proposed launch of generic escitalopram
in the USA. This confirms Lundbeck’s and
Forest’s US patent rights concerning Lexapro®,
which expire in March 2012.
Lundbeck believes that IVAX/Teva does not
have any further appeal options and finds that
the ruling in this case is final, thereby closing
the case against IVAX/Teva.
United Kingdom
At the beginning of May 2007, a UK court
ruled that escitalopram is innovative and new,
and that it was not obvious that separating
r-citalopram and s-citalopram, which citalopram
consists of, would lead to the benefits
offered by escitalopram. However, the court
found in favour of the generic plaintiffs that
the patent underlying escitalopram should not
be valid with reference to specific English case
law. Lundbeck has appealed the ruling.
Germany
On 24 August 2007, a German court returned
a first-instance decision, which ruled against
Lundbeck in respect of escitalopram. The case
has been appealed, and Lundbeck does not expect
a decision by the appeals court within the
next couple of years.
Efforts in Europe to protect intellectual property
rights and patents have gradually been
improved in recent years. As a result of these
efforts, there are now more uniform guidelines
for the issuance of exclusivity periods in the
European countries, and the rules for issuing
patents have also been harmonised. When
Lundbeck took out a patent for Cipralex®, the
rules were not harmonised to the same extent,
and for this reason the patent situation for the
primary patent for Cipralex® is different than it
would have been under the present rules. In
most countries, Cipralex® is protected by a primary
patent until 2014, while in other countries
protection is based on patents for the
Cipralex® manufacturing process. At the end of
2007, this applies to a number of European
countries, where Cipralex® either has no protection
or where Cipralex® is protected exclusively
by process patents.
Towards the end of October 2007, the German
health authorities approved a generic version
of escitalopram. Lundbeck finds that this goes
against the applicable rules and practices, and
at Lundbeck’s request, the approval has been
suspended in Germany while the case is being
assessed. A number of countries have followed
the approval in Germany, which acts as reference
country in this context. In most of the
countries, however, the marketing approvals
have no practical implications as Cipralex® is
protected by a composition-of-matter patent.
A prerequisite for Lundbeck’s continued substantial
investments in innovative pharmaceuticals
is that intellectual property rights are respected.
Lundbeck believes that the Group’s intellectual
property rights are valid and enforceable, and
it is Lundbeck’s policy to defend its intellectual
property rights energetically, wherever they
may be violated.
Lundbeck is involved in pending patent trials in
the USA, the UK, Australia, Canada, France and
Germany.
Events reported after the end
of the financial year
On 3 January 2008, Lundbeck announced that
the Group had decided to initiate phase I clinical
trials with Lu AA37096 to investigate
safety, tolerability and the pharmacokinetic
profile of the compound in humans. At the
same time, Lundbeck decided to discontinue
the phase I clinical development of Lu
AA44608 for the potential treatment of mood
disorders.
On 18 February 2008, Lundbeck announced
that clinical phase II trials had been initiated to
investigate Lu AA34893 for the treatment of
bipolar disorder.
Outlook for 2008
During the past six years, Lundbeck has marketed
four pharmaceuticals which have contributed
strong growth rates to the Group’s
consolidated revenue since they were
launched. The Group expects that all of its new
pharmaceuticals will continue to grow and
contribute positively to consolidated revenue
in 2008 despite the fact that Lundbeck anticipates
continuing price pressure from the European
health authorities and pressure from generic
competition for Cipralex® in specific
markets in Europe.
Lundbeck expects to launch Circadin® for the
treatment of primary insomnia in the first
markets in 2008 and that this pharmaceutical
will have a minor favourable impact on consolidated
revenue.
8

Being a research-based company, Lundbeck
believes that it is important to be able to expand
and strengthen its pipeline of pharmaceutical
development candidates to complement
its existing business. During 2008,
Lundbeck expects to advance more pharmaceutical
candidates into clinical trials or to the
next clinical development stage. Moreover,
Lundbeck expects to initiate pivotal clinical trials
for a number of the Group’s late-stage
projects. These projects include desmoteplase
for the treatment of acute ischaemic stroke
and nalmefene for the treatment of alcohol
dependence.
Financial forecasts for 2008
Lundbeck management looks forward to continuing
growth in consolidated revenue and
earnings in 2008. Lundbeck expects revenue
for 2008 to amount to DKK 11-11.5 billion
and that profit from operations (EBIT) will be
DKK 2.8-2.9 billion in 2008, which will sustain
the Group’s EBIT margin at approximately
25%, while Lundbeck expects to spend more
than 20% of revenue on research and development.
Investments in 2008 are expected to
amount to approximately DKK 500 million
(exclusive of financial investments).
Lundbeck’s financial forecast for 2008 is based
on the exchange rates that Lundbeck regularly
hedges pursuant to its hedging policy. The
most important currency in respect of Lundbeck’s
financial results is the US dollar (USD),
which is hedged at an average exchange rate
of 5.31 DKK/USD for 2008.
2008 forecast
Revenue
Profit from operations (EBIT)
Investments
DKK 11-11.5bn
DKK 2.8-2.9bn
Approx. DKK 500 million
Share buyback programme
Lundbeck has continued the ongoing share
buyback programme, under which Lundbeck
intends to buy back shares of up to DKK 6 billion.
At the end of 2007, Lundbeck had bought
back shares worth DKK 3.5 billion, corresponding
to 59% of the complete programme. The
share buyback programme is expected to be
completed by the end of 2008.
As previously announced, Lundbeck maintains
that the share buyback programme may be
terminated at any time as a consequence of
changes to the company’s financial position or
changes in the market, including acquisitions
or in-licensing opportunities.
Dividend policy
Since 2003, Lundbeck has paid dividends of
about 30% of the net profit for the year, and it
is still the intention to pay out dividends of
between 25% and 35% in the future.
Reservations
Forward-looking statements are subject to
risks, uncertainties and inaccurate assumptions.
This may cause actual results to differ
materially from expectations. Factors that may
affect future results include interest rate and
exchange rate fluctuations, delay or failure of
development projects, production problems,
unexpected contract breaches or terminations,
government-mandated or market-driven price
decreases for Lundbeck’s products, introduction
of competing products, Lundbeck’s ability
to successfully market both new and existing
products, exposure to product liability and
other lawsuits, changes in reimbursement rules
and governmental laws and related interpretation
thereof and unexpected growth in costs
and expenses.
In accordance with section 107a of the Danish
Financial Statements Act, listed companies
must consider whether or not they will disclose
any consequences for substantial agreements
if the control of the company changes.
Lundbeck does not wish to disclose this information
for competitive reasons.
9

Neurobiology scientist Lone Helboe is looking at the image of
brain structures in an X-ray film, which can help her to locate
and analyse the areas of the brain in which compounds such
as memantine (the active ingredient in Ebixa®) are bound and
may affect brain function.

Alzheimer’s
disease
A
lzheimer’s disease is the most common
form of dementia. Alzheimer’s
disease involves a progressive deterioration
of human mental faculties. The disease
affects a person’s memory, language and logical
thinking, and it also has an impact on the
ability to perform everyday activities and
changes patient behaviour.
The disease usually sets in after the age of 60.
Certain nerve cells die, causing a gradual reduction
of the function in the affected areas of
the brain.
Alzheimer’s disease is divided into three stages:
mild, moderate and severe. In the late stages
of the disease, sufferers will no longer be able
to live an independent life and will require
nursing care, either at home, in a sheltered
home or a nursing home.
As the disease progresses, various symptoms
appear. In the mild stages, the symptoms related
to memory are most noticeable. In the
late stages, the patient will also have functional
and behavioural symptoms.
According to WHO, there are 38 million cases
of Alzheimer’s disease and other dementia disorders
worldwide at any given time.
Lundbeck markets Ebixa® (memantine) for the
treatment of moderate to severe Alzheimer’s
disease in cooperation with Merz Pharmaceuticals
GmbH.
11

Marketed
pharmaceuticals
Lundbeck markets 14 pharmaceuticals worldwide for the treatment of diseases of
the central nervous system (CNS). Most of Lundbeck’s pharmaceuticals are for the
treatment of psychiatric disorders, but during the past few years the Group has also
marketed pharmaceuticals for the treatment of neurological disorders.
S
ince 2002, Lundbeck has marketed
four new pharmaceuticals – Cipralex®/
Lexapro® for the treatment of depression
and anxiety, Ebixa® for the treatment of
Alzheimer’s disease, Azilect® for the treatment
of Parkinson’s disease and Serdolect® for the
treatment of schizophrenia. Most of the revenue
derived from these pharmaceuticals is as a
minimum protected by intellectual property
rights some years into the next decade.
In terms of revenue, Cipralex®/Lexapro® is
Lundbeck’s largest pharmaceutical, followed by
Ebixa®. Both pharmaceuticals were launched
in the first markets in 2002. Since being
launched in 2005, Azilect® has exceeded management’s
sales expectations, while Serdolect®,
launched in 2006, has fallen short of
expectations. Lundbeck expects to launch its
new pharmaceutical Circadin® for the treatment
of primary insomnia in the first markets
in 2008.
Lundbeck’s mature pharmaceuticals represent
a stable foundation for consolidated revenue,
with the exception of citalopram, the revenue
of which continued to decline in 2007 due to
generic competition. Lundbeck expects that
citalopram revenue will continue to decline in
2008, albeit at a slower pace than previously.
Cipralex®/Lexapro® (escitalopram)
– depression and anxiety
Cipralex®/Lexapro® is the most frequently
prescribed branded pharmaceutical for the
treatment of depression, both in the USA and
in Europe, and the second most prescribed in
International Markets. This position was retained
in 2007.
Escitalopram, the active ingredient in Cipralex®/
Lexapro®, is a so-called allosteric serotonin
reuptake inhibitor (ASRI). This means that escitalopram
increases the level of serotonin and
allows the nerve cells to communicate with
each other again, thereby alleviating depression
and anxiety symptoms. This mechanism
of action makes escitalopram a very effective
compound, which also offers an attractive
safety profile.
In addition to depression, Cipralex®/Lexapro®
is approved for the treatment of panic disorder,
generalised anxiety disorder, social anxiety
disorder and obsessive-compulsive disorder
(OCD) in the European Union and for the
treatment of generalised anxiety disorder in
the USA. During the past few years, the
Cipralex® profile has gradually been strengthened
as additional clinical data have been published.
A large number of clinical trials have
demonstrated that Cipralex® is efficacious
both in short-term and long-term treatment of
depression, whilst also offering an attractive
safety profile. Furthermore, a large number of
clinical trials have demonstrated therapeutic
benefits of using Cipralex® in the treatment of
2007 2006
DKKm DKKm Growth
Total revenue 10,985 9,221 19%
Cipralex® 4,094 3,508 17%
Income from Lexapro® 2,594 1,923 35%
Ebixa® 1,655 1,361 22%
Azilect® 168 71 136%
Serdolect® 34 10 250%
Other pharmaceuticals 1,750 1,973 -11%
Other revenue 690 375 84%
Profit from operations 2,695 1,784 51%
Net profit for the year 1,770 1,107 60%
12

oth depression and anxiety in comparison
with a number of other antidepressants. For
example, a study released in June 2007
showed that Cipralex® was superior to Cymbalta®
(duloxetine) in the acute treatment of
patients with major depressive disorder and
was at least as efficacious in long-term treatment.
Also, results of a head-to-head study
announced in November 2007 once again
showed that Cipralex® is significantly more
efficacious than Cipramil® (citalopram).
Other important news in 2007 included a
phase III trial announced in November 2007
by Lundbeck and its business partner Forest
Laboratories, Inc., showing positive results for
Lexapro® in adolescents with major depressive
disorder in the USA.
Ebixa® (memantine)
– Alzheimer’s disease
In-licensed from Merz Pharmaceuticals GmbH
in Germany, Ebixa® is marketed in 58 countries
worldwide. Lundbeck markets Ebixa® in
Europe – in certain countries together with its
inventor Merz – and in the rest of the world,
excluding the USA and Japan.
In a number of clinical trials, Ebixa® has shown
to be efficacious and demonstrated an attractive
safety profile in patients with moderate to
severe Alzheimer’s disease. Compared with placebo,
treatment with Ebixa® offers improvements,
stabilisation or less marked worsening
of three important domains: cognition, daily
functioning and behaviour.
Results of head-to-head clinical studies of Cipralex® (escitalopram) and competing
pharmaceuticals in the treatment of depression
Comparator Presented Main outcome
Venlafaxine XR (Effexor®) SCNP, April 2003 Escitalopram was at least as efficacious and was
better tolerated than venlafaxine XR. Patients
treated with escitalopram reached sustained
response and remission significantly faster.
Venlafaxine XR (Effexor®) ECNP, September 2003 Escitalopram was at least as effective and was
better tolerated than venlafaxine XR. Escitalopram
was significantly more efficacious than venlafaxine
XR in treating patients with severe MDD.
Sertraline (Zoloft®) ACNP, December 2003 The starting dose of escitalopram was comparably
efficacious to optimally dosed sertraline.
Citalopram (Celexa®/Cipramil®)
International Clinical Psycho- Escitalopram was significantly more efficacious
pharmacology, April 2005 than citalopram.
Paroxetine (Paxil®) IADC, February 2006 Escitalopram was significantly more efficacious
than paroxetine in 24-week treatment of patients
with severe MDD.
Duloxetine (Cymbalta®) ACNP, December 2006 Escitalopram was better tolerated and at least as
efficacious as duloxetine in the treatment of MDD.
Duloxetine (Cymbalta®)
Company release, June 2007 Cipralex® (escitalopram) was superior to Cymbalta®
(duloxetine) in the acute treatment of patients with
MDD and was at least as efficacious in long-term
treatment.
Citalopram (Celexa®/Cipramil®) Clinical Therapeutics, Escitalopram was significantly more efficacious
Volume 29, Number 11, than citalopram. The prevalence of adverse effects
2007 was significantly lower in the escitalopram group.
Results of head-to-head clinical studies of Cipralex® (escitalopram) and competing
pharmaceuticals in the treatment of anxiety
Comparator Presented Main outcome
Paroxetine (Paxil®) SCNP, April 2003 Escitalopram was significantly superior to paroxetine
after 24 weeks of treatment of SAD and showed
fewer discontinuation effects.
Paroxetine (Paxil®) ACNP, December 2003 Escitalopram was as efficacious as paroxetine in the
long-term treatment of GAD and was better
tolerated.
Paroxetine (Paxil®) ECNP, October 2004 Escitalopram was superior to paroxetine in the
change from baseline to week 12 in the treatment
of GAD and showed fewer discontinuation
effects.
MDD = Major depressive disorder
SAD = Social anxiety disorder
GAD = Generalised anxiety disorder
13

Concurrently with its in-house development activities, Lundbeck dedicates an increasing amount
of resources to in-licensing pharmaceuticals developed by other pharmaceutical companies. In
2007, Lundbeck in-licensed Circadin® for the treatment of primary insomnia. Insomnia is very
common, and it is estimated that about 27% of a population suffers from insomnia.
Read the article The sleep command centre
in the Lundbeck Magazine 2008
Azilect® (rasagiline)
– Parkinson’s disease
Azilect® has been in-licensed from Teva Pharmaceutical
Industries Ltd., and is used both as
monotherapy and in combination treatments
of Parkinson’s disease.
Azilect® is a potent and selective monoamine
oxidase type B inhibitor that blocks the breakdown
of dopamine, a neurotransmitter used by
the brain to regulate movement. In addition to
being effective, Azilect® is well-tolerated by
patients and has only few adverse effects. Unlike
competing pharmaceuticals which the patient
must administer in multiple doses during
the course of one day, the dosage of Azilect® is
simple with a single tablet once a day.
Serdolect® (sertindole)
– schizophrenia
Serdolect® is an effective antipsychotic for the
treatment of schizophrenia without sedative
effect and with placebo-level extrapyramidal
symptoms (i.e. motor side effects such as slow
movements and tremors).
Serdolect’s clinical and pharmacological profile
indicates that the pharmaceutical may increase
the likelihood of patients remaining in
therapy, which will increase the quality of life
for patients and relatives alike.
Serdolect® is a result of Lundbeck’s in-house
research, and Lundbeck holds the global rights.
Circadin® (melatonin)
– primary insomnia
In September 2007, Lundbeck in-licensed the
exclusive rights to Circadin® for the treatment
of primary insomnia in a number of markets in
Europe, including the five major markets. Furthermore,
Lundbeck holds the exclusive option
to evaluate commercialisation of the drug in
markets outside Europe.
Circadin® was approved by the European
Medicines Agency (EMEA) on 29 June 2007
indicated as monotherapy for the short-term
treatment of primary insomnia in patients
aged 55 or over. The approval was based on
clinical studies showing positive effects on
sleep quality and daytime functioning as well
as quality of life. The trials also showed that
there are no signs of development of dependency.
Circadin® is the first and only IP-protected,
prolonged-release, melatonin-containing prescription
drug approved in the EU. Melatonin is
a naturally occurring hormone produced by
the pineal glands; and it has a pivotal role in
the regulation of circadian rhythm and sleep.
Endogenous melatonin levels decrease with
age and may contribute to the common complaint
of poor sleep quality seen amongst
those in middle age and in the elderly. Administration
of Circadin®, which essentially mimics
the normal nocturnal melatonin profile, improves
sleep quality and morning alertness in
patients aged 55 or over. Lundbeck expects to
launch Circadin® in the first markets in 2008.
14

Lundbeck’s pharmaceuticals
Mechanism of
First Approved, no.
Compound action Indication Trademark registration of countries
Melatonin Regulation of circadian Primary insomnia Circadin® 2007 29
rhythm
Escitalopram ASRI Depression, generalised anxiety disorder, Cipralex®, Lexapro®, Sipralexa®, Sipralex® 2001 92
panic disorder, social anxiety disorder, OCD
Citalopram SSRI Depression, panic disorder, OCD Cipramil®, Seropram®, Cipram®, Celexa® 1989 81
Memantine NMDA-antagonist Moderate to severe Alzheimer’s disease Ebixa®, Ebix® 2002 65
Rasagiline MAO-B inhibitor Parkinson’s disease Azilect® 2005 33
Sertindole Atypical antipsychotic Schizophrenia Serdolect®, Serlect® 1996 43
Flupentixol Typical antipsychotic Mild depression Deanxit® 1971 28
+melitracene + TCA
Nortriptylin TCA Depression Noritren®, Nortrilen®, Sensaval® 1963 26
Amitriptylin TCA Depression Saroten®, Sarotex®, Redomex® 1961 31
Zuclopenthixol Typical antipsychotic Schizophrenia and other psychotic disorders, Cisordinol®, Clopixol® 1982 77
anxiety, restlessness, insomnia
Zuclopenthixol Depot antipsychotic Maintenance treatment Cisordinol Depot®, Clopixol Depot®, 1976 77
decanoate of chronic psychotic disorders Ciatyl-Z Depot®
Zuclopenthixol Typical antipsychotic Acute psychotic episodes, Cisordinol-Acutard®, Clopixol-Acutard®, 1986 73
acetate exacerbation of psychotic disorders Clopixol-Acuphase®, Ciatyl-Z-Acuphase®
Flupentixol Typical antipsychotic Schizophrenia and other psychotic disorders, Fluanxol®, Fluanxol Mite®, Depixol® 1965 69
mild depression
Cis(Z)- Depot antipsychotic Maintenance treatment Fluanxol Depot®, Depixol® 1970 73
flupentixoldecanoate
of chronic psychotic disorders
Chlorprothixene Typical antipsychotic Schizophrenia and other psychotic disorders, Truxal®, Truxaletten® 1959 23
anxiety, restlessness, withdrawal
symptoms in drug addicts
15

Progress
in the regions
Lundbeck divides its operations into three market regions: Europe, the USA and
International Markets. All three regions recorded positive growth in 2007, especially
International Markets, which posted an increase of 22% on the year before.
Europe
Lundbeck considers Europe its home market,
and Europe is Lundbeck’s largest region. Revenue
from European operations amounted to
DKK 5,501 million in 2007, an increase of 7%
on 2006. Cipralex® and Ebixa® are still Lundbeck’s
largest pharmaceuticals in Europe in
terms of revenue and continue to make positive
contributions to growth in Europe, posting
growth rates of 10% and 20%, respectively,
relative to 2006.
The markets in Europe are characterised by
constant price pressure from healthcare reforms
in the individual countries, and a price
change in one European market may affect
prices in a number of other markets through a
reference price system. Generic competition is
expected to grow in the years ahead, with a
resulting adverse impact on Cipralex® growth
in Europe.
These factors contribute to restricting the
growth potential in Europe and call for constant
changes in the way Lundbeck organises
its group infrastructure to face and compensate
for the changed market conditions. As a
result, Lundbeck has been compelled to regularly
adjust the number of employees in the
Group’s subsidiaries. Lundbeck has with this
adjustment succeeded in maintaining earnings.
Cipralex® – extended indications
and growth
Cipralex® (escitalopram) represented 51% of
revenue in Europe in 2007, and Lundbeck recorded
strong growth in Cipralex® sales in Europe
of 10% to DKK 2,827 million.
At the end of December 2007, Cipralex® represented
15.2% of total antidepressants sales in
Europe, an increase of 19% compared to the
end of December 2006.
Launched in the first European market in 2002,
Cipralex® has achieved a stable and high market
share. In terms of volume, Cipralex® is the
most widely used branded antidepressant in
Europe.
In early 2007, Cipralex® was approved in the
EU for the treatment of obsessive-compulsive
disorder (OCD). This approval further strengthens
Cipralex’s position as the best treatment
option for depression and anxiety currently
available in the market. In Europe, Cipralex® is
approved for the treatment of depression,
panic disorder, generalised anxiety disorder, social
anxiety disorder and obsessive-compulsive
disorder (OCD).
Ebixa® – second-largest in Europe
Ebixa® (memantine) accounted for 25% of
Lundbeck’s revenue in Europe in 2007, and revenue
from Ebixa® grew by 20% to DKK 1,359
million.
Ebixa® is approved for the treatment of moderate
to severe Alzheimer’s disease and is the
first pharmaceutical in the world for treating
patients with severe Alzheimer’s disease. This
approval allows for Ebixa® to be used in about
80% of all Alzheimer’s patients.
Memantine, the active ingredient in Ebixa®, is
currently the second-most prescribed pharmaceutical
in Europe for treating Alzheimer’s dis-
16

Europe, revenue, DKKm
Growth in
Growth in
Q4 ’07 Q4 ’06 Growth local currency 2007 2006 Growth local currency
Cipralex® 720 675 7% 9% 2,827 2,561 10% 11%
Ebixa® 350 311 13% 14% 1,359 1,132 20% 20%
Azilect® 44 27 61% 62% 156 70 122% 122%
Serdolect® 7 3 157% 152% 24 7 247% 244%
Other revenue 275 313 -12% -11% 1,135 1,353 -16% -16%
Total revenue 1,396 1,329 5% 7% 5,501 5,123 7% 8%
ease. At the end of December 2007, memantine
held 23.3% of the European market for
pharmaceuticals to treat Alzheimer’s disease,
as compared with a share of 19.3% at the
same time in 2006.
Successful launch of Azilect®
In 2007, Lundbeck generated revenue from
Azilect® (rasagiline) in Europe of DKK 156 million,
which was an increase of 122% relative to
2006. Since 2005, Lundbeck has launched Azilect®
in 23 countries across Europe. The launch
of Azilect® has progressed well and better than
Lundbeck had expected. At the end of December
2007, Azilect® held 4.6% in terms of value
of the composite European market for pharmaceuticals
to treat Parkinson’s disease.
Mature pharmaceuticals
Lundbeck’s revenue from mature pharmaceuticals
decreased from DKK 1,353 million in 2006
to DKK 1,135 million in 2007. The decline was
driven by falling sales of citalopram, which has
been exposed to generic competition since
2002. Revenue from other mature pharmaceuticals
in the Group was stable in 2007.
Foreign currency exposure
Foreign currency management is handled centrally
by the parent company, and Lundbeck
aims as a minimum to hedge its anticipated
cash flows for any future period of approximately
9-15 months. In 2007, 81% of Lundbeck’s
sales in Europe were exposed to the
euro (EUR) as compared with 74% in 2006.
The second-highest exposure in Europe in
2007 was vis-à-vis the British pound (GBP),
at 6%.
17

Lundbeck is one of the world’s leading companies in the development of antidepressants.
In addition to the development and sale of antidepressants, Lundbeck
has taken a number of other initiatives to help people suffering from depression.
One of these initiatives is an online community on the internet.
Read the article Untreated depression is terrible
in the Lundbeck Magazine 2008
USA
Lundbeck’s income from the Group’s pharmaceuticals
in the USA amounted to DKK 2,599
million in 2007.
Lundbeck’s pharmaceuticals are presently sold
in the US market through an agreement with
business partner Forest Laboratories, Inc., who
handles the marketing of Lexapro® (escitalopram)
and Lundbeck’s mature pharmaceutical
Celexa® (citalopram) for the treatment of depression.
Since entering into the agreement in
the mid-1990s, Lundbeck and Forest have enjoyed
a good and successful partnership, and
the launches of Celexa® in 1998 and Lexapro®
in 2002 were among the most successful drug
launches in US history measured in terms of
rapidly achieving relatively high market shares
(see notes 1-2 in Financial statements 2007 for
more information about income from Forest).
Lexapro®
Lundbeck’s income from sales of Lexapro® in
the USA was DKK 2,594 million in 2007, compared
with DKK 1,923 million in 2006, an increase
of 35%. The increase was partly attributable
to a low income level for Lexapro® in
2006 due to the inventory reductions, partly
to rising Lexapro® sales in the US market. At
31 December 2007, inventories were at a level
corresponding to about eight months of commercial
supply.
At the end of December 2007, Lexapro® represented
22.7% of total antidepressants sales in
the USA, as compared with a market share of
17.9% at the same time in 2006. Measured by
the total number of prescriptions (TRx), Lexapro®
grew by 2% in 2007.
Growth forecasts (in terms of value) for the US
market for branded pharmaceuticals to treat
depression have been toned down due to the
launch of inexpensive generic pharmaceuticals.
In terms of volume, Lundbeck projects limited
growth, and a volume decline in the US market
could prove a negative surprise for Lundbeck.
Lundbeck expects to be able to raise the price
of Lexapro®, not least because the product remains
the least expensive branded antidepressant
in the US market.
Foreign currency exposure
Foreign currency management is handled centrally
by the parent company, and Lundbeck
aims to hedge its anticipated cash flows for
any future period of approximately 12 months.
At the same time, Lundbeck’s accounting policies
concerning recognition of income from
Lexapro® stipulate that the hedged part of the
income is recognised in the Group’s balance
sheet together with that part of the income
that corresponds to the difference between the
invoiced price and the minimum price, and
which is not recognised in the consolidated income
statement until the volumes in question
have been sold in the market. At the end of
2007, the inventories were at a level corresponding
to about eight months of commercial
supply. In practice, this means that the Group’s
present USD hedging will impact on the consolidated
income statement in about 20
months.
The average forward rate for 2008 will be approximately
5.31 DKK/USD, using the existing
hedging contracts. The corresponding forward
rate for 2007 was approximately 5.75 DKK/
USD.
Establishing future operations
in the USA
Representing 45% of the global market in
2006, the USA is the world’s largest pharmaceutical
market. The USA is an even larger mar-
ket in terms of pharmaceuticals to treat disorders
of the central nervous system (CNS). Thus,
the USA accounted for 56% of the global market
for pharmaceuticals to treat CNS disorders
in 2006.
The large part of the global market held by the
USA is not explained exclusively by the size of
the country’s population. The larger market is
primarily attributable to the fact that prices of
pharmaceuticals generally are higher in the
USA than in other parts of the world, and at
the same time the consumption of pharmaceuticals
here is generally higher. This applies
especially to the latest generation of pharmaceuticals.
Lundbeck is currently established in the USA
with 147 employees, the majority of whom
work at Lundbeck’s research facility in New
Jersey. It is Lundbeck’s strategy to establish its
own commercial presence in the US market.
Establishing a commercial presence in the USA
must be seen in relation to the fact that Lundbeck
has pharmaceutical candidates within
two areas that can potentially be launched in
the USA within three years. They include a
number of drug candidates for the treatment
of mood and anxiety disorders, which are currently
under development with the most advanced
project in pivotal clinical trials. The
products also include Serdolect® for the treatment
of schizophrenia and pharmaceutical
candidates in clinical development for the
treatment of psychotic disorders.
Partnership with Takeda
In September 2007, Lundbeck and Takeda
Pharmaceutical Company Limited of Japan announced
that the companies had formed a
strategic alliance for the development and
marketing of several new compounds discov-
USA, revenue, DKKm
Growth in
Growth in
Q4 ’07 Q4 ’06 Growth local currency 2007 2006 Growth local currency
Lexapro® 626 525 19% 24% 2,594 1,923 35% 39%
Other revenue 0 5 -107% -108% 6 7 -21% -16%
Total revenue 626 530 18% 22% 2,599 1,930 35% 39%
18

ered by Lundbeck for the treatment of mood
and anxiety disorders. The compounds are
Lu AA21004 and Lu AA24530, which are in
phase III and phase II clinical development,
respectively, and the agreement includes the
possibility of, under certain conditions, including
two other compounds. However, a maximum
of three compounds can be included in
the collaboration at the same time.
Lundbeck believes that the agreement offers
great potential for the joint development
projects as well as providing Lundbeck with a
unique opportunity to build a commercial specialist
sales force in the USA with a view to a
planned launch of Lu AA21004 in 2011.
Serdolect®
Lundbeck expects to file for approval of its
own pharmaceutical Serdolect® with the U.S.
Food and Drug Administration (FDA) in the
first half of 2008. Serdolect® may thus become
Lundbeck’s next pharmaceutical in the
US market. Lundbeck believes that the experience
learned from the rollout in Europe, where
the pharmaceutical has had a difficult launch
with a small market share, cannot necessarily
be transferred to the US market. Serdolect®
will not become a dominant antipsychotic in
the US market, but due to the compound’s
unique profile, it will be a good alternative to
existing treatments.
19

International Markets
Revenue from International Markets rose 22%
relative to 2006 to DKK 2,194 million in 2007.
Sales in International Markets in 2007 accounted
for 21% of Lundbeck’s consolidated
revenue (exclusive of non-recurring items). In
comparison, three years ago International Markets
revenue in 2004 made up only 14% of
Lundbeck’s revenue.
The International Markets region covers a
combination of more mature markets such as
Canada, Australia and South Africa and developing
markets such as Brazil, China and other
markets in Asia.
Revenue in International Markets is driven primarily
by sales of Lundbeck’s two best-selling
pharmaceuticals Cipralex®/Lexapro® and
Ebixa®. These two pharmaceuticals made up
71% of 2007 revenue in the region. At the
same time, revenue from the company’s mature
pharmaceuticals in International Markets
was maintained on a level with 2006.
Conditions in International Markets
The markets outside Europe and the USA traditionally
make up a small proportion of the
combined market for pharmaceuticals to treat
CNS diseases. In 2006, International Markets
accounted for 17% of the global CNS market.
Japan, Canada and Brazil are the largest markets
of this geographic segment, accounting
for more than 50% of its market value.
In several markets of the region, therapies for
CNS disorders are not as common as they are
in the USA and in Europe. Accordingly, Lundbeck
has in recent years given priority to establishing
a position in the key markets of the
region to exploit the growth potential and in
order to contribute to disseminating knowl-
edge of therapies for psychiatric and neurological
disorders.
Lundbeck previously opted to minimise its risk
in the region by having distributors build a
sales infrastructure and handle its marketing
initiatives. Under these conditions, Lundbeck’s
pharmaceuticals have already been available in
some of the markets for many years; for example
in Thailand for about 45 years.
Lundbeck set up its first subsidiary in the International
Markets region in South Africa in
1984 and has since established subsidiaries
and representative offices in a total of 24 markets
in the region. By the end of 2007, Lundbeck
had its own sales force in the most important
markets of the segment with the
exception of Japan.
In China, Cipramil® is currently marketed by
Lundbeck’s business partner Xian-Janssen, and
Lundbeck expects to launch Lexapro® in China
during 2008. In 2005, Lundbeck started to
build its own commercial presence in China,
and at the end of 2007 Lundbeck’s subsidiary
in China counted about 45 medical representatives
who market Ebixa®.
In International Markets, the protection of intellectual
property rights represents a risk factor,
and in a number of markets, Lundbeck expects
to be unable to protect intellectual
property rights for its existing pharmaceuticals.
In some of these markets, Lundbeck’s pharmaceuticals
are already exposed to generic competition,
but as a large proportion of the population
uses branded pharmaceuticals, the
impact from generic competition is less dramatic
than elsewhere.
Cipralex®/Lexapro®
Cipralex®/Lexapro® is by far Lundbeck’s bestselling
product in International Markets, where
it accounts for more than half of total revenue.
In spite of competition from generic products
in a number of these markets, Cipralex® has
posted very strong growth rates.
In the third quarter of 2007, Cipralex®/Lexapro®
held a market share of 9.4% of the aggregate
market for antidepressants in terms of
value in International Markets, an increase of
24% compared with the third quarter of 2006.
In several markets, Lundbeck is now the market-leading
provider of treatments for depression
and anxiety, even if there is no patent
protection. Thus, in Latin America Lundbeck
was the market leader at the end of 2007 in
Brazil, Mexico and Chile, and Lundbeck continues
to see growth in the small markets of the
region. In the Asian markets, Cipralex® is the
market leader in countries such as South
Korea, which ranks among the world’s 15 largest
antidepressant markets. Cipralex® has also
been successfully launched in the Middle East,
having gained market shares in excess of 10%
in terms of value in the major markets.
Ebixa®
Ebixa® is Lundbeck’s second-largest pharmaceutical
in International Markets. Also in these
markets, the efficacy and attractive safety profile
offered by the product help to generate
decent growth rates. In the third quarter of
2007, Ebixa® held 10.9% of the total market
for pharmaceuticals to treat Alzheimer’s disease
in International Markets. In Asia, Ebixa®
has been launched in markets such as China as
the first pharmaceutical marketed by Lundbeck
itself, and the product has already conquered
a double-digit market share after only
one year in the market. In Egypt, Ebixa® is the
International Markets, revenue, DKKm
Growth in
Growth in
Q4 ’07 Q4 ’06 Growth local currency 2007 2006 Growth local currency
Cipralex®/Lexapro® 311 262 19% 11% 1,267 948 34% 36%
Ebixa® 72 63 14% 4% 295 230 29% 29%
Azilect® 4 1 613% 612% 11 1 1210% 1210%
Serdolect® 2 1 41% 123% 11 3 257% 311%
Other revenue 134 149 -10% -14% 609 613 -1% 3%
Total revenue 523 476 10% 3% 2,194 1,794 22% 25%
20

Foreign currency exposure
Foreign currency management is handled cenmost
frequently used pharmaceutical to treat
Alzheimer’s disease, and Ebixa® continues to
grow in the Arabic countries.
Other pharmaceuticals
Azilect® and Serdolect® have only been
launched in a few markets in the International
Markets region, but in specific markets the
products have achieved great success by winning
relatively high market shares. For example,
Serdolect® experienced a successful
launch in the Russian market, and Russia is expected
to become one of the principal markets
for Serdolect® in International Markets. In International
Markets, Azilect® has only been
launched in Turkey, where the launch progressed
well.
Mature pharmaceuticals
Revenue from mature pharmaceuticals stabilised
during 2007 and amounted to DKK 609
million. This trend is expected to continue in
2008.
Strategy for Japan
Japan is currently the second-largest pharmaceutical
market in the world, but in the field of
pharmaceuticals to treat CNS diseases, Japan
is only the world’s third-largest market. Lundbeck
has had its own subsidiary in Japan since
2001 with the main objective of developing a
number of Lundbeck’s pharmaceuticals for the
Japanese market. These products include escitalopram
for the treatment of depression,
Lundbeck’s pharmaceutical development
candidates for the treatment of mood and
anxiety disorders and desmoteplase for the
treatment of acute ischaemic stroke.
Even though the size of the CNS market is only
comparable to the largest markets in Europe,
the Japanese market offers attractive growth
potential, but it is also a market which foreign
companies have historically found it difficult
to enter. Thus, Lundbeck cannot register new
pharmaceuticals in Japan if the application is
based exclusively on documentation generated
in other countries. However, it looks as if the
health authorities are changing their position
on the issue, making it easier for pharmaceutical
businesses to obtain approval of pharmaceuticals
based on preclinical and clinical data
prepared in other countries.
In Japan, Lundbeck is developing escitalopram
in collaboration with Mochida Pharmaceutical
Co., Ltd., and escitalopram is currently in phase
III clinical trials with Japanese patients. Lundbeck
has exclusive rights to desmoteplase in
Japan and is currently planning the clinical development
phases for the compound in Japan.
Moreover, the agreement with Takeda will increase
the opportunities for Lundbeck to start
marketing pharmaceuticals in Japan after 2010.
Alzheimer’s disease – Ebixa®
market shares and market growth
in International Markets
Market share, value (%) Market growth, volume (%)
15
10
5
0
Q3-04
Depression – Cipralex®/Lexapro®
market shares and market growth
in International Markets
Market share, value (%) Market growth, volume (%)
20
15
10
5
0
Q3-04
20
15
10
0
Q3-05 Q3-06 Q3-07
Volume market growth (three-month average)
Market share: Cipralex®/Lexapro®
Source: IMS sales data
60
40
20
0
Q3-05 Q3-06 Q3-07
Volume market growth (three-month average)
Market shares:
Ebixa® Other memantine Total memantine
Source: IMS sales data
5
trally by the parent company, and Lundbeck
aims as a minimum to hedge its anticipated
cash flows for any future period of approximately
9-15 months. In 2007, 26% of Lundbeck’s
sales in International Markets were exposed
to the US dollar (USD) and 17% to the
Canadian dollar (CAD).
21

22
In recent years, Lundbeck’s scientists have invented
a number of novel and innovative compounds for
the treatment of mood and anxiety disorders. Medical
chemist Anette Graven Sams is making preparations
for the synthesis of a new compound in Lundbeck’s
medical chemistry research.

Depression
and mood disorders
D
epression is a serious disease with
symptoms that include persistent low
mood, diminished energy, low selfesteem,
difficulty concentrating and suicidal
thoughts. The patient is no longer in control of
his own mood and feelings and functions inadequately
socially and in the workplace. For this
reason, it is important that people suffering
from depression receive treatment.
Mood disorders include bipolar disorder (previously
referred to as manic-depressive illness),
and whereas depression is characterised by
low mood, mood disorders affect the mood to
varying degrees and directions, for example
between depression and mania.
There is a close correlation between depression
and various anxiety disorders. It is estimated
that more than half of the patients suffering
from anxiety also suffer from another
psychiatric disorder, primarily depression. Consequently,
it is a huge advantage if an antidepressant
also has a documented effect in the
treatment of anxiety disorders.
Lundbeck currently markets six different pharmaceuticals
for the treatment of depression.
The most recent pharmaceutical is Cipralex®,
which is marketed in the USA by Lundbeck’s
partner Forest Laboratories, Inc. under the
Lexapro® brand.
Furthermore, Lundbeck has four development
compounds for the treatment of depression,
anxiety and mood disorders: Lu AA21004,
Lu AA24530, Lu AA34893 and Lu AA37096.
According to WHO, there are 150 million cases
of depression worldwide at any given time.
23

Strategic
focus
Lundbeck is a research-based specialist company dedicated to the treatment of
disorders of the central nervous system. To be successful in a global pharmaceuticals
market characterised by much larger companies and intense competition, Lundbeck
has developed a strategy aimed at providing sufficient innovative capacity whilst at
the same time maintaining a competitive cost structure.
L
undbeck’s vision is to become one of
the world’s leading psychiatry and neurology
businesses by developing pharmaceuticals
for the treatment of central nervous
system (CNS) disorders. It follows from
this ambitious vision that Lundbeck must continue
to expand the Group’s professional and
commercial position in psychiatry and neurology.
At the same time, Lundbeck must exploit
its flexibility as a small pharmaceutical company
by responding quickly and constantly optimising
all links of the value chain and expanding
its global competitive strength.
Through its extensive and dedicated operations
as a specialist company, Lundbeck has
built a strong foundation of resources that offers
a number of competitive benefits:
• a solid position in the CNS market with
more than 50 years’ research and commercialisation
experience and insight with
respect to innovative pharmaceuticals
• skilful and highly specialised employees with
competencies across the value chain
• a competitive research organisation with
access to innovation based on in-depth
understanding of patients and unmet CNS
needs
• a broad pipeline
• dedicated market coverage and sales
companies with a strong local presence
• the ability to form and extensive experience
in forming partnerships with large and small
companies.
Lundbeck’s business is rooted in a focused
niche strategy, integration and control of the
entire value chain, global market coverage and
partnering.
24
Specialised
Lundbeck’s focused niche strategy has been
and continues to be instrumental in the
Group’s success. A focused approach offers obvious
benefits in terms of research and development,
but it also means that Lundbeck’s
medical representatives can communicate
knowledge about diseases and pharmaceuticals
at a high technical level to the authorities,
specialists and general practitioners.
Integrated
All links of the pharmaceutical value chain are
important if success is to be achieved in the
pharmaceuticals market. Lundbeck is a fully integrated
pharmaceutical company, and management
believes that knowledge and control
of research into and development of new
pharmaceuticals and of production, marketing
and sales provide Lundbeck with a number of
competitive benefits.
A fully integrated pharmaceutical value chain
does not mean that Lundbeck’s interests are
best served by owning or performing all the
activities itself. In all parts of its operations,
Lundbeck evaluates which activities Lundbeck
should perform itself and which activities the
company can benefit from outsourcing.
Global presence
The global market for pharmaceuticals to treat
CNS disorders is the largest pharmaceutical
therapy area, and today represents a value of
more than DKK 500 billion.
Lundbeck’s activities in the form of marketed
pharmaceuticals and late-stage projects in
clinical development target diseases that represent
about half of the CNS market. Lundbeck
wishes to optimise the value of its pharmaceuticals
by ensuring their availability in all relevant
markets.
Lundbeck currently has registered pharmaceuticals
in over 90 countries. For each market,
Lundbeck evaluates whether the Group should
be present with its own organisation or
whether it should market its products through
partnerships.
Lundbeck currently has a presence in 54 countries
through its own sales entities, but has yet
to establish a direct presence in two important
countries: Japan and the USA. These two countries
combine to represent two-thirds of the
global market for pharmaceuticals to treat
psychiatric and neurological disorders. The collaboration
with Takeda Pharmaceutical Company
Limited on the exclusive co-development
and co-commercialisation in the USA and
Japan of a number of compounds in Lundbeck’s
pipeline gives Lundbeck the opportunity to build
its own commercial presence in the USA and
Japan; an approach which will provide a higher
return than conventional out-licensing without
substantially increasing the risk involved.
A direct presence in these two markets is instrumental
if Lundbeck is to build a foundation
for long-term growth and thereby accomplish
its vision of being a leading specialist CNS
company.
Even though Lundbeck’s headquarters are
located in Denmark and Lundbeck expects to
continue to carry out large parts of its activities
here in the future, the Group will site new
activities in the locations that are most appropriate
with respect to quality, price and access
to commodities and labour.

Partnering
Developing new pharmaceuticals today is a
more difficult and resource consuming process
than ever before. In addition, companies have
less time in which to earn back their investment.
In order to face these challenges, network
agreements and partnering have become
more common in the pharmaceutical industry.
PAION AG) and the already approved product
Circadin® (from Neurim Pharmaceuticals Ltd.),
Lundbeck has been able to considerably add to
its own pharmaceutical pipeline.
Each year, Lundbeck investigates about 200
potential in-licensing projects, and a due diligence
review is performed in connection with
about 10% of these projects. In recent years,
Lundbeck has in-licensed a new pharmaceutical
candidate every year as a result of these efforts.
Lundbeck will continue to focus on partnering
and in-licensing pharmaceuticals to
complement the Group’s existing operations
and help underpin our continuing development
and growth.
Lundbeck has pursued a partnering strategy for
years, providing the possibility of compensating
for the Group’s limited size and financial
resources. Also, partnerships allow Lundbeck
access to the competencies, know-how and resources
important for clinical research and
commercialisation of pharmaceuticals.
Lundbeck currently enjoys a reputation as a
solid and reliable partner in the field of CNS.
In 2007, Lundbeck and the Japanese company
Takeda formed a strategic alliance for the
exclusive co-development and co-commercialisation
in the USA and Japan of several compounds
in Lundbeck’s pipeline for the treatment
of mood and anxiety disorders. This gives
Lundbeck the opportunity to scale up the
development of these compounds and allocate
resources to other projects.
Major partnerships
Company Compound Indication
BioTie Therapies Corp. Nalmefene Alcohol dependence
Forest Laboratories, Inc. Escitalopram Depression
Merz Pharmaceuticals GmbH Memantine Alzheimer’s disease
Neurim Pharmaceuticals Ltd. Melatonin Primary insomnia
PAION AG Desmoteplase Stroke
Solvay Pharmaceuticals B.V. Bifeprunox Schizophrenia
Takeda Pharmaceutical Company Limited Lu AA21004/ Depression, mood
Lu AA24530
disorders and anxiety
Teva Pharmaceutical Industries Ltd. Rasagiline Parkinson’s disease
In recent years, Lundbeck has also in-licensed
pharmaceuticals from other companies. At the
end of 2007, revenue from the pharmaceuticals
Ebixa® (in-licensed from Merz Pharmaceuticals
GmbH) and Azilect® (in-licensed
from Teva Pharmaceutical Industries Ltd.) represented
17% of Lundbeck’s consolidated revenue.
Also, with the late-stage projects
nalmefene (in collaboration with BioTie Therapies
Corp.), desmoteplase (together with
25

Strategic
initiatives
Lundbeck aims to become a high-growth research-based CNS company. The Group’s
development and growth initiatives are based on three focus areas: streamlining
and simplifying its business to ensure efficiency and flexibility in the organisation,
extending and protecting Lundbeck’s marketed pharmaceuticals, and creating a
platform for future growth.
S
treamline and simplify
Lundbeck ensures a competitive cost
structure and optimises the Group’s
flexibility and response times. In all parts of the
Group, we have initiated projects to simplify
and streamline the organisation to optimise
consumption of resources.
Streamlined infrastructure in clinical
development
Lundbeck expects to scale up the number of clinical
trials for pharmaceutical candidates in the
Group’s development pipeline. At the same time,
regulatory requirements with respect to documentation
from clinical trials are steadily growing.
To optimise its resource consumption, Lundbeck
has begun building an electronic infrastructure
for its clinical development efforts. The new and
streamlined infrastructure is intended to ensure
a simpler and more effective process in terms of
reporting and handling clinical data without
compromising on quality.
Lundbeck initiated the first trial based on the
new electronic platform in 2007. In 2008, clinical
trials launched in connection with Lundbeck’s
depression projects will be implemented using
this platform. Management believes that the
new infrastructure will very much help optimise
the resources Lundbeck uses in clinical development
and also ensure adherence to the regulatory
guidelines on clinical trials.
European distribution
In recent years, Lundbeck’s manufacturing organisation
has focused its efforts on establishing
two centralised distribution centres in Europe
instead of maintaining inventories and
handling distribution locally in each country.
The objective is to increase transparency in the
26
supply chain while reducing distribution costs.
Over the course of the past few years, inventories
in the Nordic countries have gradually been
transferred to a central warehouse adjacent to
the Lundbeck headquarters in Denmark, and in
2007 Lundbeck established a similar central
warehouse in Germany to handle distribution to
other European countries.
The new distribution structure allows Lundbeck
to act as a single entity across Europe. Lundbeck
has already obtained substantial savings in
connection with the negotiation of new distribution
agreements, and management believes
that Lundbeck will continue to be able to
achieve additional savings when entering into
agreements on the distribution of the Group’s
pharmaceuticals.
Targeted sales and marketing
In recent years, Lundbeck has adjusted its sales
and marketing initiatives so that its medical
representatives visit the doctors and specialists
who focus most on CNS disorders. Furthermore,
by adjusting its sales organisations in the individual
markets, Lundbeck has achieved lower
sales and marketing costs.
As a result of these efforts, Lundbeck has since
2005 launched two new pharmaceuticals and
increased its revenue from DKK 4,680 million to
DKK 5,501 million in the Group’s European
markets while also reducing the number of
medical representatives.
In the International Markets region, Lundbeck
also managed to increase the profitability of
the Group’s sales initiatives, resulting in a reduction
of sales, general and administrative expenses
(SG&A margin) from 46% to 42% between
2006 and 2007.
Maintain and expand existing business
In 2007, Lundbeck recorded strong trends and
growth in its existing business. Lundbeck derives
78% of its revenue from the Group’s new and
proprietary pharmaceuticals Cipralex®/Lexapro®,
Ebixa®, Azilect® and Serdolect®. Also in
2007, Lundbeck in-licensed Circadin®, an already
approved pharmaceutical for insomnia. In the
years ahead, these pharmaceuticals will represent
a solid foundation for Lundbeck’s business,
and the Group aims to retain and protect the
market position held by these products, ensure
that they are disseminated in all relevant markets,
and launch life-cycle initiatives to capitalise
fully on the potential of its pharmaceuticals.
Platform for long-term growth
Management is committed to ensuring that
Lundbeck, also in the long term, remains a
healthy and well-managed business that constantly
evolves and demonstrates a substantial
growth potential.
The ability to develop and disseminate innovative
pharmaceuticals has been the key driver
behind Lundbeck’s successful track record. Management
finds that innovation will continue to
be the key prerequisite for success in the pharmaceutical
industry and that this will apply in
particular to Lundbeck’s long-term growth.
The protection that Lundbeck enjoys for certain
of the Group’s pharmaceuticals will expire in
most markets in 2012-2014. In 2007, these
pharmaceuticals accounted for 78% of consolidated
revenue. Consequently, Lundbeck aims to
capitalise on the Group’s favourable financial
position to create a foundation for long-term
growth based on in-house research and inlicensing
of innovative pharmaceuticals.

Growth through
innovation
Lundbeck expects to continue to invest heavily in research and development in the
years to come, allowing the Group’s pipeline of pharmaceutical candidates to be its
development and growth driver, also in the years ahead.
O
ver the past decade, Lundbeck has
invested heavily in research and
development. In the past couple of
years, these efforts have yielded a steady flow
of new and innovative pharmaceutical candidates
in clinical development. Whereas Lundbeck
previously had its key strengths in the
field of psychiatry, intensified research in neurology
has produced new research and development
projects in Parkinson’s disease, Alzheimer’s
disease, epilepsy and stroke.
In the past few years, Lundbeck has ploughed
about 20% of its revenue back into research
and development, a figure above the industry
average of approximately 17%. In addition,
Lundbeck’s partners contribute substantially to
Lundbeck’s research and development, resulting
in a total investment in research and development
that is actually much higher than 20% of
Lundbeck’s revenue.
Lundbeck expects to continue to invest heavily
in research and development in the years to
come, allowing the Group’s pipeline of pharmaceutical
candidates to be its development and
growth driver, also in the years ahead.
A strong pipeline
In the course of 2007, Lundbeck was able to
ensure progress and expand the Group’s development
pipeline by a number of new pharmaceutical
candidates, but also had to discontinue
the advanced development project with gaboxadol
for the treatment of sleep disorders.
Management believes that Lundbeck’s pipeline
will provide the foundation for the Group’s
long-term progress and growth. Also, the portfolio
of late-stage projects coupled with the
in-licensing of one or two pharmaceutical candidates
in the years ahead will provide medium-term
growth, thus compensating for the
slowing sales of Lundbeck’s current range of
pharmaceuticals from 2012 onwards.
Phase III projects
In 2007, Lundbeck initiated phase III clinical trials
with Lu AA21004, the most advanced pharmaceutical
candidate in Lundbeck’s pipeline of
new and innovative compounds for the treatment
of mood and anxiety disorders. Lu
AA21004, discovered by Lundbeck and being
jointly developed by Lundbeck and Takeda
Pharmaceutical Company Limited, belongs to a
new chemical class of compounds with a mode
of action that is different from currently marketed
antidepressants. In a phase II clinical trial
Lu AA21004 showed highly significant improvements
on the primary efficacy endpoints
for both 5 and 10 mg doses compared to placebo.
Lu AA21004 also showed an attractive
safety profile.
In 2007, Lundbeck in-licensed the European
rights for the pharmaceutical candidate
nalmefene for the treatment of alcohol dependence
from Finnish biotech company Bio-
Tie Therapies Corp. Nalmefene is a specific opioid
receptor antagonist and the first oral drug
showing efficacy in reducing heavy drinking in
multicentre, controlled studies. BioTie has studied
the safety and efficacy of nalmefene in a
total of 1,200 patients suffering from alcoholism
and alcohol dependence, including two
phase III trials in the UK and Finland. Lundbeck
and BioTie expect to seek marketing authorisation
simultaneously in all 27 EU member states
via the centralised procedure. To this end, Lundbeck
plans to further strengthen the existing
nalmefene registration dossier in its alcohol dependence
indication by initiating additional
phase III clinical trials during 2008.
Lundbeck has in-licensed the global rights to
desmoteplase for the treatment of acute ischaemic
stroke from German biotech company
PAION AG and expects to commence new
phase III clinical trials of desmoteplase in acute
ischaemic stroke in the second half of 2008.
Desmoteplase has the potential to become the
first pharmaceutical that extends the time window
within which patients can reach the hospital,
be diagnosed and receive treatment.
Desmoteplase may thus provide treatment for
many of those patients who currently have no
treatment options. Desmoteplase has shown
positive results in phase II clinical trials. In
2007, PAION announced results from the first
phase III trial in which desmoteplase was not
statistically significantly different from placebo
on the primary efficacy endpoints. Subsequent
analyses of data from the trial have shown that
patients with a sufficient degree of blood clot
benefited from desmoteplase.
In collaboration with Solvay Pharmaceuticals
B.V., Lundbeck is developing bifeprunox for the
treatment of schizophrenia and possibly mood
disorders such as bipolar disorder in Europe and
the rest of the world apart from North America,
Argentina, Brazil, Japan and Mexico. Bifeprunox
is currently in phase III.
Results of phase II and phase III clinical trials in
patients with schizophrenia show that bifeprunox
demonstrated a clinical effect and a favourable
weight and metabolic profile. Weight gain
and metabolic disturbances are common and
serious side effects of many antipsychotic pharmaceuticals
which can cause some patients with
schizophrenia to stop taking their medication.
27

Clinical trials are a key component in the
development and approval of new pharmaceuticals.
The requirements for safety and
efficacy documentation are international and
comprise clinical trials that involve thousands
of patients.
Read the article Safe
and efficacious in the
Lundbeck Magazine 2008
Phase II projects
In 2007, Lundbeck initiated phase II clinical trials
with Lu 31-130 in 210 patients suffering
from schizophrenia. Based on preclinical and
clinical data, Lu 31-130 is expected to show a
beneficial effect on both the positive and the
negative symptoms and to demonstrate a good
balance between efficacy and safety. Lu 31-130
has a multi receptor profile, and data from a
PET study of healthy individuals in combination
with preclinical studies have shown that Lu
31-130 has a unique dopamine and serotonin
receptor binding profile.
In 2007, Lundbeck and Takeda jointly initiated
phase II clinical trials with Lu AA24530, which
is the second most advanced compound in the
collaboration on a new class of compounds to
treat mood and anxiety disorders. Lundbeck expects
to see the initial results from the phase II
trials in early 2009.
Furthermore, at the beginning of 2008, Lundbeck
embarked on phase II clinical trials to
investigate Lu AA34893 for the treatment of
bipolar disorder.
Phase I projects
In 2007, Lundbeck initiated phase I clinical trials
with the pharmaceutical candidate Lu
AA39959 for the treatment of bipolar disorder
and psychoses. Lu AA39959, invented by Lundbeck’s
own scientists, modulates ion channels
in the brain via a new mechanism of action. In
preclinical models of schizophrenia, the compound
has demonstrated a highly convincing
potential as an antipsychotic. Schizophrenia
and bipolar disorder are long-term illnesses
with significant problems despite the existing
treatments.
In 2007, Lundbeck initiated phase I clinical trials
with the pharmaceutical candidate Lu
AA24493 in patients suffering from acute ischaemic
stroke. Lu AA24493 is a novel carbamoylated
form of human erythropoietin
(EPO) – a modification of EPO that results in
loss of haematopoietic effects but maintains
the tissue protective effect. This tissue protective
effect translates into very positive effects
in a number of animal models for neuronal
damage including models for cerebral stroke. Lu
AA24493 is developed in collaboration between
Lundbeck and Warren Pharmaceuticals,
Inc. and is in-licensed from Warren as part of
the license agreement that the companies announced
in 2002. Lundbeck holds worldwide
rights for indications related to the central
nervous system.
In 2007, Lundbeck initiated phase I clinical trials
with Lu AA47070 for the treatment of Parkinson’s
disease. Lu AA47070 is discovered by
Lundbeck and is the first compound within the
neurology area from Lundbeck’s internal research.
Lu AA47070 is a novel adenosine receptor
antagonist that has shown efficacy in a
number of animal models for neurological diseases,
including models of Parkinson’s disease.
It is therefore expected that Lu AA47070 may
have a potential in certain neurological indications
and could be an alternative to e.g.
dopamine agonists in the treatment of
Parkinson’s disease.
In 2008, Lundbeck has initiated phase I clinical
trials with Lu AA37096. Lu AA37096 has been
discovered based on findings involving the
unique mechanism of action of escitalopram
(Cipralex®) but incorporates effects on a
number of additional targets in the brain.
Lu AA37096 has shown very convincing effects
in animal models of mood disorders as well as
in pain models.
Lundbeck has a number of preclinical development
projects and expects to initiate additional
clinical studies of pharmaceutical candidates
from its in-house research activities during 2008.
28

At Lundbeck, research into new pharmaceuticals
is the cornerstone of the company’s
operations. The goal is to develop pharmaceuticals
which, by the end of the next
decade, will represent a novel and innovative
approach in the treatment of psychiatric and
neurological disorders.
Read the article Strategy in
place for new drugs in the
Lundbeck Magazine 2008
Pharmaceuticals in clinical development as of 4 March 2008
Development stage Registration Expected
Indication | Compound Mechanism of action Phase I Phase II Phase III application launch
Schizophrenia | Serdolect® USA Dopamine/serotonin 2008 2009
Schizophrenia | Bifeprunox Dopamine/serotonin 2010+
Stroke | Desmoteplase Plasminogen activator 2010+
Alcohol dependence | Nalmefene Specific opioid receptor antagonist 2010+
Depression | Lu AA21004 Serotonin modulator & stimulator 2010 2010+
Psychosis | Lu 31-130 Monoaminergic 2010+
Depression | Lu AA24530 Multiple target 2010+
Depression | Lu AA34893 Multiple target 2010+
Psychosis/bipolar disorder | Lu AA39959 Ion channel modulator 2010+
Stroke/neuronal damage | Lu AA24493 Tissue protecting cytokine 2010+
Neurological diseases | Lu AA47070 Adenosine receptor antagonist 2010+
Mood and anxiety disorders | Lu AA37096 Multiple target 2010+
29

30
Using methods such as microscopy, senior specialist
Heidi Lopez de Diego analyses the crystals in the
compound nalmefene for the treatment of alcohol
dependence. The shape and the size of the crystals
are important to ensure the right composition in
the subsequent tablet manufacturing process.

Alcohol
dependence
I
t is estimated that more than 30 million
people in the USA, Europe and Japan
suffer from alcohol dependence and
alcohol abuse.
Alcohol abuse involves major social consequences
and in the longer term leads to
damage of many body organs. For example,
in the UK alone, there are 150,000 hospital admissions
and 20,000 premature deaths directly
due to alcohol and 1.2 million alcohol-related
violent incidents. The UK National Health
Service (NHS) estimates the annual costs of
alcohol abuse to GBP 1.4-1.7 billion.
Lundbeck collaborates with BioTie Therapies
Corp. on the development of nalmefene for the
treatment of alcohol dependence. Nalmefene
is an opioid receptor antagonist which acts by
blocking a few specific opioid receptors in the
brain. When you drink alcohol, the body releases
endorphins. They work by binding to the
opioid receptors, which trigger a process in the
brain that gives a good feeling in the body; a
reward. Nalmefene is intended to block the
opioid receptors, preventing the endorphins
from binding to the receptors. This eliminates
the reward and reduces the incentive for consuming
alcohol.
31

Corporate
governance
Owing to recent years’ focus on corporate governance, many listed companies
have adopted a clear and uniform position on the topic, ensuring the necessary
transparency and control while at the same time giving Executive Management
as well as employees the trust and manoeuvring space required to implement
innovative strategies and exploit market opportunities.
L
undbeck’s Supervisory Board and Executive
Management consistently seek to
ensure that Lundbeck pursues adequate
policies and procedures to ensure good
corporate governance and strong business ethics.
Corporate governance recommendations
Already in 2005, Lundbeck management implemented
the revised corporate governance recommendations
set out by the OMX Nordic Exchange
Copenhagen. The Supervisory Board
believes that the Group meets these corporate
governance recommendations, except for the
combined specified remuneration of the individual
members of Executive Management and
the Supervisory Board. Furthermore, Lundbeck
does not disclose the number of shares held by
each individual member of the Supervisory
Board nor any changes to the number of shares
held. Lundbeck does not believe that this would
provide relevant further information.
Lundbeck has opted not to disclose the remuneration
paid to each individual member of Executive
Management but only the remuneration
paid to the President & CEO and the combined
remuneration paid to Executive Management.
The individual members of Executive Management
basically receive the same remuneration,
and the Supervisory Board believes that disclosing
differences in the overall remuneration that
result from individual bonus schemes, etc. would
not provide additional value.
A detailed description of the Supervisory
Board’s considerations in respect of the OMX
Nordic Exchange Copenhagen recommendations
is available on lundbeck.com/about us.
32
Policies and procedures for business
ethics
Lundbeck aims to run its operations on the basis
of integrity and responsibility.
Lundbeck’s corporate values and rules of conduct
represent the overall management tool
for ensuring that Lundbeck achieves its business
goals in an ethically responsible manner.
The pharmaceutical market is subject to strict
regulation. Lundbeck’s management believes
that it is pivotal for the Group’s operations that
it complies with all relevant national and international
legislation, rules and guidelines issued
by public institutions such as the U.S. Food and
Drug Administration (FDA) and the European
Medicines Agency (EMEA).
In a number of specific areas, Lundbeck has established
additional policies and procedures to
ensure responsible business ethics. This applies
to areas in which Lundbeck intends to ensure
higher ethical standards than those required by
local legislation. For example, Lundbeck has defined
special rules on marketing of pharmaceuticals,
business intelligence, corruption and areas
such as animal ethics and health, safety
and environmental aspects.
At Lundbeck’s headquarters, a person has been
appointed to be in charge of ensuring compliance
with good marketing practice in the Group’s
international marketing activities. Similarly, each
sales entity employs a person responsible for ensuring
that Lundbeck complies with local rules
and industrial codes on good marketing practice.
As a member of the European Federation of
Pharmaceutical Industries and Associations (EF-
PIA), Lundbeck also complies with the EFPIA
code on the promotion of pharmaceuticals.
Lundbeck’s policy on business ethics explicitly
states that Lundbeck does not accept corruption,
including bribery, kickbacks or similar illegal
methods of any kind. Lundbeck has established
an in-house audit function that reports
to the Audit Committee under the Supervisory
Board. As part of its duties, Internal Audit must
ensure compliance with Lundbeck’s business
ethics policies. Furthermore, Lundbeck has established
a whistleblower system that all employees
may use via the Group’s intranet if
they experience non-compliance with Lundbeck’s
business ethics policies. Reporting of
non-compliance may be made anonymously.
European Commission inspection
In 2005, representatives from the European
Commission conducted an inspection of Lundbeck’s
premises. The purpose was to identify
whether Lundbeck had misused a dominant
position or had been involved in anticompetitive
agreements in the markets for antidepressants.
Lundbeck is cooperating fully with the
European Commission. Lundbeck is confident
that the Group has complied with all relevant
national and international competition legislation,
and expects the European Commission to
reach the same conclusion.
Board practice
Lundbeck’s Supervisory Board held 11 board
meetings in 2007. In connection with the Annual
General Meeting and in connection with
Flemming Lindeløv’s retirement as chairman of
the Board, the Supervisory Board held constitutive
meetings. Furthermore, the Supervisory
Board and the Executive Management held a
joint two-day strategy seminar. During 2007,
the chairman and deputy chairman held eight
meetings.

Lundbeck.com/about us
Position on corporate governance
Lundbeck’s Supervisory Board has considered the revised corporate governance recommendations issued by the OMX Nordic Exchange Copenhagen.
A detailed description hereof is available on Lundbeck’s website.
Articles of Association of H. Lundbeck A/S
The Articles of Association of H. Lundbeck A/S are available on the Lundbeck website.
The Articles of Association include rules concerning the election of members to the company’s Supervisory Board
and rules for changing the Articles of Association.
Competencies
The Supervisory Board must define Lundbeck’s
overall strategy and set clear goals for the
Group’s Executive Management. In order to
carry out these assignments effectively and
successfully, it is appropriate that the Supervisory
Board possesses the required competencies.
The chairman and deputy chairman find
that the existing board members possess the
financial, pharmaceutical, information technology
and production competencies required to
serve on the board of an international group
such as Lundbeck.
Lundbeck’s Supervisory Board has started the
process of recruiting a new board member following
Flemming Lindeløv’s decision to step
down from the Supervisory Board. The Supervisory
Board wishes to recruit a new member
whose competencies complement those of the
existing board members, and expects to be able
to present the new board member in connection
with Lundbeck’s Annual General Meeting,
which is scheduled for 22 April 2008.
Independence
The OMX Nordic Exchange Copenhagen recommends
that half of a company’s board members
(except those elected by the employees) be independent
persons. The issue of board member
independence is particularly relevant for companies
that, like Lundbeck, have a single principal
shareholder, the Lundbeck Foundation, holding
more than half of the Group’s shares. Based on
the OMX Nordic Exchange Copenhagen’s definition
of independence, the Supervisory Board believes
that at least half of the board members
elected at the Annual General Meeting are independent.
Two of the five members, Thorleif
Krarup, the deputy chairman, and Jes Østergaard,
are not independent due to their close ties with
the Group’s principal shareholder. The same applies
to the three board members elected by
Lundbeck’s Danish employees.
Committees
The Supervisory Board has set up a remuneration
committee and an audit committee.
Audit Committee
In December 2007, the Danish Commerce and
Companies Agency published a bill on implementation
of the EU’s eighth company law directive’s
proposal on implementation of audit
committees in listed companies. The provision
is to be implemented in Danish legislation by
July 2008. Lundbeck’s Supervisory Board has
already set up an audit committee that consists
of Peter Kürstein (chairman), Per Wold-
Olsen and Thorleif Krarup. The Audit Committee
held three meetings in 2007.
The duties of the Audit Committee are advisory
to the Supervisory Board and comprise:
• review of the Group’s financial reporting
procedures, including the procedures for reviewing
interim and annual reports
• evaluation of the Group’s financial reporting
and other financial information published by
the Group, including information about related
parties
• internal controls in relation to financial reporting
to ensure consistency and transparency
• review of the reports submitted by the auditors
and communicating with the auditors
• submitting recommendations to the Supervisory
Board for use by the board in its recommendation
at the Annual General Meeting
concerning the appointment of external
auditors.
Lundbeck’s Supervisory Board concluded in
2007 that the new regulations in connection
with the EU’s eighth company law directive
will not give grounds for significant alterations
in the operations of the Supervisory Board, including
the Audit Committee.
Remuneration Committee
The Remuneration Committee set up by the
Supervisory Board consists of Per Wold-Olsen
(chairman), Mats Pettersson and Jes Østergaard.
In 2007, the committee held three meetings.
The purpose of the Remuneration Committee
is to provide the members of the Supervisory
Board with the best possible decision-making
basis concerning the total remuneration provided
to the members of Executive Management.
The committee prepares its recommendation
to the Supervisory Board on the basis of
general trends among industry peers in Denmark
and other regions.
Remuneration of the Supervisory Board
Members of Lundbeck’s Supervisory Board receive
a fixed remuneration and are not included
in the Group’s other bonus and incentive
programmes. In addition, the members of
the board’s audit and remuneration committees
receive a fee for their committee work.
Summary of the remuneration
guidelines for Executive Management
The 2008 remuneration for Executive Management
members will be based on the remuneration
guidelines to be presented for approval at
the Annual General Meeting on 22 April 2008.
The comprehensive guidelines will subsequently
be available on Lundbeck’s website.
The composition of the remuneration reflects
Lundbeck’s objective of being a high-growth
research-based CNS company. The Executive
Management members are rewarded for
achieving stretched targets for short and longterm
performance, including outperforming a
peer group.
Remuneration of the Executive Management
members comprises base salary, pension, cash
bonus, share-based payments and benefits. The
Executive Management members are offered a
base salary slightly below the average of the
remuneration peer group as well as a variable
bonus and a long-term incentive opportunity
that depend on the achieved value creation for
the company.
The pension scheme for Executive Management
is a defined contribution scheme, which
corresponds to the market level in the country
of residence of the executive.
The short-term incentive programme provides
a cash bonus for the achievement of pre-determined
group goals and individual goals. The
CEO and the Non-CEO members of Executive
Management have the possibility of receiving a
maximum of nine months’ and six months’
base salary respectively as a bonus on condition
of achievement of exceptional results.
The members of Executive Management participate
in a three-year revolving long-term incentive
programme that includes shares as well
as warrants. The performance criteria for the
long-term incentive programme are based on
relative stock price development against a
group of selected pharmaceutical companies.
In the programme, the CEO and the Non-CEO
members of Executive Management can
achieve a maximum of twelve months’ and
eight months’ base salary respectively. However,
this can only be obtained if the company
experiences an extraordinarily favourable stock
price development
33

Lundbeck is developing a novel potential pharmaceutical
compound which has demonstrated promising properties
in models of Parkinson’s disease. In the picture, head of
department Mads Kreilgård is analysing a PET scan on his
computer. The PET scan shows the areas of the brain in
which a compound such as Lu AA47070 works.

Parkinson’s
disease
P
arkinson’s disease is a progressive,
degenerative disorder caused by the
degeneration of dopamine-producing
cells in the brain. Symptoms associated with
the disease are rigidity, tremors, slower and
involuntary movements and impaired balance.
It is estimated that the disease affects about
1% of the population over the age of 65. The
disease is both chronic and progressive. The
precise cause of Parkinson’s disease is unknown
and is believed to be multifactorial,
including genes, environmental factors and
age.
As the disease progresses, the characteristic
motor and facial expressions manifest themselves,
and inhibited and rigid movements
may leave the patient unable to take care of
himself. In the late stage of the disease, the
patient’s condition has deteriorated strongly,
often confining him to a chair or bed.
Lundbeck markets Azilect® for the treatment
of Parkinson’s disease in collaboration with
Teva Pharmaceutical Industries Ltd. and has
also initiated phase I trials with Lu AA47070,
which is expected to have a potential in
certain neurological indications, including
Parkinson’s disease.
According to WHO, there are five million cases
of Parkinson’s disease worldwide at any given
time.
35

Risk
management
To a company conducting research and international operations such as Lundbeck,
avoiding risk is neither possible, nor is it a defined goal. Rather, one of Lundbeck’s
goals is to handle such risk by maintaining a reasonable balance between the Group’s
overall risk exposure and the anticipated value-generation and that the Group
maintains the systems necessary to swiftly respond to any risk changes.
L
undbeck’s risk management systems
are consistently updated and adapted
to external and intra-Group requirements
and needs. Such revisions help provide
the Group management with a solid foundation
from which to decide on Lundbeck’s overall
risk exposure and an overview of the activities
and resources available to handle specific
risks.
The pharmaceutical industry is characterised
by a high number of risks which a group such
as Lundbeck must handle. The general risks
found in a pharmaceutical business are illustrated
in the figure below.
Lundbeck pursues decentralised management
of specific risks in those parts of the organisation
that have the most extensive knowledge
of such risks and the best possibility of minimising
such exposure. The individual business
units take a systematic approach to monitoring,
identifying, quantifying and responding to
risks relative to their activities. Furthermore,
Lundbeck has defined reporting, decision-making
and follow-up procedures and routines.
Particularly critical risks
Based on reports received from its business
entities, every six months Lundbeck management
identifies the risks that are particularly
critical for Lundbeck’s ability to achieve the
Group’s business targets. These risks are monitored
and evaluated in an ongoing process and,
where possible, risk-reducing initiatives are
made.
The risks identified by management as particularly
critical relative to the Group’s present risk
exposure are described below. The risk factors
are not listed in any order of priority.
Risks associated with the Group’s research
and development portfolio
Lundbeck’s future success depends on its ability
to develop new innovative pharmaceuticals.
Risks in the pharmaceutical value chain
Risks associated with corporate governance, business ethics and public reputation
Y
Risks associated with mergers, acquisitions and partnerships
Financial risks
Risks associated with employees and organisation
Research Development Y
Production
Y
Sales & marketing
• Portfolio risk
• In-licensing risk
• Out-licensing risk
• Technology risk
• Protection of intellectual
property rights
• Partnership risk
• Portfolio risk
• Trial and product approval risk
• Supply of materials for clinical
trials
• In-licensing risk
• Out-licensing risk
• Partnership risk
• Regulatory risk
• Risk related to reliability of supply
• Supplier risk
• Distribution risk
• Protection of intellectual property
rights
• Generic competition
• Adherence to sales and marketing
guidelines
• Product liability risk
• Product recall
• Risk in connection with price decrease
and market access restrictions
• Partnership risk
36

Prior to obtaining regulatory approval for the
sale of a product, Lundbeck must demonstrate
for each specific indication the safety and efficacy
of the drug candidate for the treatment
of humans by conducting preclinical studies
and clinical trials. Throughout the development
stage, there is a risk of a development project
suffering delays or being discontinued altogether.
For example, in 2007 Lundbeck was
compelled to discontinue the development of
gaboxadol for the treatment of sleep disorders,
although the pharmaceutical candidate had
reached the late development stage.
To minimise the business risks associated with
the development of pharmaceuticals, Lundbeck
consistently seeks, through in-house research
and in-licensing of pharmaceuticals, to
ensure a sufficiently broad portfolio of pharmaceutical
candidates. In 2007, Lundbeck initiated
phase I trials with three new pharmaceutical
candidates and in-licensed Circadin® for
the treatment of primary insomnia.
Risks associated with intellectual property
rights and generic competition
Lundbeck’s continued success hinges on its
ability to protect intellectual rights for new
pharmaceuticals and to operate its business
without infringing on other’s rights. However,
patents and the patent application process in
pharmaceutical companies such as Lundbeck
are legally and scientifically complicated processes
and may be subject to uncertainty.
To minimise the business risks associated with
intellectual property rights and generic competition,
Lundbeck thoroughly monitors and
analyses the generic market and actively protects
the company’s portfolio of intellectual
property rights. In 2007, Lundbeck was involved
in pending patent trials in the USA, the
UK, Australia, Canada, France and Germany. It
is Lundbeck’s policy to defend the company’s
intellectual property rights energetically, wherever
they may be violated.
Financial risks
The bulk of the Group’s commercial transactions
are settled in foreign currency. The foreign
currency exposure is reduced by hedging
positions in the most important foreign currencies
through forward and option contracts
and, to a minor extent, by raising foreign currency
loans. The interest rate risk related to the
Group’s bond portfolio, debt portfolio and cash
holdings is reduced by seeking short duration
on both the asset side and the liabilities side.
The credit risk that arises in connection with
the sale of goods, the Group’s bond portfolio
and cash holdings is reduced by avoiding credit
risk concentration and by diversifying receivables
on a large number of creditworthy trading
partners. In addition, the Group exclusively
deals with banks that have a high credit rating.
At the present time, the currency risk associated
with the depreciating US dollar (USD) is
the most critical financial risk to Lundbeck’s
operations. At the end of 2007, Lundbeck has
hedged income in US dollars for the entire
2008. Accordingly, if the US dollar depreciates
further in 2008, this will not have any impact
on Lundbeck’s financial results for 2008, but it
may affect the company’s financial performance
from 2009 onwards.
Risks associated with price pressure and
restricted market access
The pharmaceutical market is characterised by
the aim of the authorities to reduce prices and
regulate access to the market in order to minimise
increases in government healthcare
budgets. Unexpected market changes such as
price reductions may have a material impact
on the earnings potential of each individual
pharmaceutical.
Lundbeck expects that new healthcare reforms
will be initiated in 2008 in several of Lundbeck’s
markets, reducing prices and restricting
access for Lundbeck’s pharmaceuticals. Lundbeck
has established functions to ensure systematic
and coordinated monitoring and
response with a view to maintaining pharmaceutical
prices as well as market access. Also,
Lundbeck continuously seeks to adjust its
organisation to accommodate the effect of
changes in market conditions for the Group’s
pharmaceuticals.
Risks associated with reliability of supply
Managing reliability of supply is pivotal for
Lundbeck, enabling the Group to secure patients’
access to Lundbeck’s pharmaceuticals
at all times.
To handle the risk associated with reliability of
supply, Lundbeck carefully monitors the supply
situation, and in principle the aim is to maintain
an inventory level that will help overcome
a production breakdown. In addition, Lundbeck
has prepared plans for accessing alternative
production facilities. Conversely, having too
high an inventory level may entail e.g. a financial
risk, which the Group takes into account
when evaluating the size of inventories held by
Lundbeck or its collaboration partners.
It sometimes happens that pharmaceutical
companies have to recall a product from the
market due to the safety or quality of the
pharmaceutical. Fortunately, pharmaceuticals
are seldom recalled because the health of the
patients is in jeopardy. However, due to the serious
consequences that such situations may
have, it is paramount that pharmaceutical
companies thoroughly monitor the safety and
quality of their pharmaceuticals. At Lundbeck,
quality and safety is a key concern, and the
company has procedures and systems to ensure
the quality and safety of its pharmaceuticals.
If, despite high levels of quality and safety,
Lundbeck should be faced with a situation in
which the company has to recall a product,
procedures to ensure a swift and efficient response
have been set up and risk-reducing
measures to minimise the impact of a product
recall have been launched.
The sale of counterfeit medicine in the pharmaceuticals
market has become a growing
problem in recent years. In particular, this has
been a problem with respect to pharmaceuticals
to treat impotence and regulate weight,
which is not the type of pharmaceuticals that
Lundbeck markets. So far, Lundbeck has only
experienced very few cases where attempts
have been made to sell counterfeit medicine in
the Group’s markets in Asia and the Middle
East.
However, counterfeit pharmaceuticals represent
a very serious problem as they jeopardise
patient health and generally contribute to undermining
confidence in the healthcare system.
Lundbeck therefore continuously seeks to
limit and counter any attempt to adulterate
the Group’s pharmaceuticals.
37

Nils Ole Dalby works as a scientist in Lundbeck’s department for
electrophysiology. He measures neuronal activity in the parts of
the brain that affect human sleep. Through the thin plastic tube
he makes a pore in the cell membrane in order to penetrate the
cell and measure the level of activity.

Primary
insomnia
P
rimary insomnia is characterised by a
person experiencing inadequate or
poor-quality sleep. This may include
difficulty falling asleep, waking up frequently
during the night with difficulty returning to
sleep, and/or experiencing unrefreshing sleep.
Primary insomnia is not associated with other
medical illnesses such as depression and is not
caused by the intake of substances such as
caffeine, nor that a person is kept awake by
factors such as pain in connection with an injury
or disease. Insomnia is very common, and
it is estimated that about 27% of a population
suffers from insomnia and that it affects about
15% of people aged 20-54 and 30% of those
aged 55 or over. Insomnia is more common
among women than among men.
Insomnia affects a person’s ability to function
during the daytime and may in the long term
affect quality of life and have adverse economic
implications.
Lundbeck has in-licensed Circadin® for the
treatment of primary insomnia for patients
aged 55 or over from Neurim Pharmaceuticals
Ltd. and expects to launch the pharmaceutical
in the first markets in Europe during 2008.
39

The Lundbeck
share
In connection with the ongoing share buyback programme, Lundbeck bought
back shares at a value of DKK 1.2 billion in 2007. This corresponds to 3.6% of the
market capitalisation at the beginning of the year. Lundbeck’s Supervisory Board
recommends that dividends of DKK 2.56 per share be paid for the year.
T
he Lundbeck share ranks among the 20
most traded shares on OMX Nordic
Exchange Copenhagen*. The price of
the Lundbeck share fluctuated heavily in 2007.
The share price closed at a year-high of DKK
170.25 on 7 February 2007 and was quoted at
the lowest closing price on 17 August 2007 at
DKK 125.50. On 31 December 2007, the share
closed at a price of DKK 138.00.
Trading of shares
Total trading in Lundbeck shares in 2007
amounted to DKK 23.5 billion on OMX Nordic
Exchange Copenhagen, an increase of 3% relative
to 2006. The number of shares traded fell
by 2% from 168 million traded shares in 2006
to 164 million traded shares in 2007.
Dividend
Lundbeck’s Supervisory Board proposes the
payment of dividend of 30% of the net profit
for the year after tax, corresponding to DKK
2.56 per share.
The dividend for the year will be paid automatically
via the Danish Securities Centre no
later than five days after Lundbeck has held its
Annual General Meeting on 22 April 2008.
Share capital
The denomination of each share is DKK 5
nominal value. The number of shares at 31
December 2007 was 207,279,631, corresponding
to a nominal share capital of DKK
1,036,398,155. The company has only one
class of shares, and all shares rank equally. The
shares are negotiable instruments with no restrictions
on their transferability.
The company changed its share capital on six
occasions during 2007 as a result of employees
exercising warrants. A total of 992,121
new shares were issued in 2007. The authorisation
to issue new shares and increase the share
capital appears from article 4 of Lundbeck’s
Articles of Association.
As a result of the resolution passed at the Annual
General Meeting to cancel treasury shares
acquired, on 3 August 2007 the company’s
share capital was reduced by 5,867,644 shares,
corresponding to DKK 29,338,220.
Facts about the Lundbeck share on OMX
Nordic Exchange Copenhagen:
ISIN-number DK0010287234
Ticker symbol Reuters (LUN.CO)
Bloomberg (LUN DC)
Facts about unsponsored ADR programmes:
CUSIP-number 40422M107
ADR ticker symbol HLUKY
* Formerly called the Copenhagen Stock Exchange
40

Annual General Meeting
Lundbeck’s Annual General Meeting will be held on 22 April 2008
at 10am at H. Lundbeck A/S, Ottiliavej 9, DK-2500 Valby.
The Annual General Meeting will be transmitted live in Danish and
English and may be downloaded later from lundbeck.com/investor.
At the end of 2007, Lundbeck held treasury
shares equivalent to 3.21% of the total
number of shares issued.
Share buyback programme
Lundbeck continues the ongoing share buyback
programme, under which Lundbeck intends
to buy back shares of up to DKK 6 billion
until the end of 2008. The programme was initiated
in 2005.
As Lundbeck has appointed an external bank
(Danske Markets from 1 January 2008) as lead
manager of its share buyback programme, the
bank will buy back shares on behalf of Lundbeck
and make trading decisions in respect of
Lundbeck shares independently of and without
influence from Lundbeck as to the timing of
the purchases. The bank will also carry out the
buyback within the schedule set out.
Lundbeck is entitled to terminate the programme
at any time as a consequence of
changes to the company’s financial position or
changes in the market, for example acquisition
or in-licensing opportunities.
In 2007, Lundbeck bought back shares for DKK
1.2 billion, corresponding to approximately
20% of the combined programme of DKK 6
billion. Thus, Lundbeck has completed 59% of
the combined programme.
Share capital
Share Cancellation
2006, Share capital of shares 2007,
year-end buyback increase bought back year-end
Shares issued 212,155,154 992,121 (5,867,644) 207,279,631
Treasury shares 3,963,353 8,557,204 (5,867,644) 6,652,913
Share capital 1.87% 3.21%
Share buyback, 2005-2007
Number of shares Value, DKK Average price, DKK
Q3 93,458 14,929,608 159.75
Q4 5,147,176 712,030,953 138.33
Total 2005 5,240,634 726,960,561 138.72
Q1 8,048,509 1,064,656,508 132.28
Q2 1,688,736 219,924,665 130.23
Q3 1,843,524 245,739,480 133.30
Q4 431,093 60,733,434 140.88
Total 2006 12,011,862 1,591,054,086 132.46
Q1 1,904,291 280,961,907 147.54
Q2 1,993,588 258,267,537 129.55
Q3 1,878,152 245,205,051 130.56
Q4 2,781,173 406,866,308 146.29
Total 2007 8,557,204 1,191,300,802 139.22
Accumulated 25,809,700 3,509,315,449 135.97
The Lundbeck Foundation will through its
wholly owned subsidiary LFI a/s participate in
the buyback on a pro rata basis in order to
maintain the free float at approximately 30%.
See release no. 166 to the OMX Nordic Exchange
Copenhagen at www.lundbeck.com/investor.
41

Website
Lundbeck aims to provide a good overview of the company’s development to its shareholders and stakeholders.
Lundbeck.com/investor provides releases to OMX Nordic Exchange Copenhagen, financial presentations, background
material about products and annual and interim reports since the company’s IPO in 1999. Moreover, the
website allows for the viewing of transmissions from general meetings and access to quarterly conference calls,
at which the Lundbeck management comments on business developments.
Composition of shareholders
The company’s shares are registered by name
and entered in the register of shareholders. At
the end of 2007, approximately 25,200 registered
shareholders held about 97% of the
share capital.
Through its wholly owned company LFI a/s,
the Lundbeck Foundation, which is the company’s
largest shareholder, held 141,443,241
shares at the end of 2007, corresponding to
approximately 70% of the shares and votes in
H. Lundbeck A/S. LFI a/s is the only shareholder
who has notified the company that it holds
more than 5% of the share capital.
Institutional investors in North America increased
their holdings of Lundbeck shares
throughout 2007 to hold approximately 28%
of the free float at 31 December 2007. This is
an increase of 231% or more than 40 million
shares compared with 2006. International institutional
investors now hold more than 50%
of the free float.
During 2007, Danish institutional investors reduced
their holdings of Lundbeck shares in free
float from 33% to 24%. European institutional
investors kept their ownership at a fairly constant
level, but their stake was reduced as a result
of the company issuing treasury shares.
The share of the free float held by private investors
has declined to approximately 15%.
Share ratios
Ratios per share, DKK 2007 2006
Earnings per share (EPS)* 8.63 5.24
Diluted earnings per share (DEPS)** 8.63 5.23
Cash flow 13.18 6.59
Net asset value 35.81 32.40
Dividend 2.56 1.57
Dividend pay-out ratio 30% 30%
Price-related data, DKK 2007 2006
Market price, year-end 138.00 155.75
High market price 170.25 155.75
Low market price 125.50 122.25
Average price 144.33 136.12
H. Lundbeck A/S, growth -11.4% 19.5%
OMXC20, growth 5.1% 12.2%
CX35PI, growth 9.0% 34.4%
Price/earnings 16.0 29.80
Price/cash flow 10.47 23.66
Price/net asset value 3.85 4.81
Market capitalisation, year-end, DKKbn 28.6 33.1
Annual trading, million of shares 164.3 167.9
* Number of shares used for EPS calculation: 204,990,396
** Number of shares used for DEPS calculation: 205,153,080
At the end of 2007, members of Lundbeck’s
Supervisory Board and Executive Management
held a total of 81,630 Lundbeck shares.
42

Analyst coverage
Company Name Website
ABG Sundal Collier Peter Hugreffe Ankersen www.abgsc.com
Blue Oak Capital John Reeve www.blueoakcapital.com
Carnegie Bank Carsten Lønborg Madsen www.carnegie.dk
Credit Suisse Ravi Mehrotra www.credit-suisse.com
Dansk Aktie Analyse Peter Falk-Sørensen www.danskaktieanalyse.dk
Danske Equities Martin Parkhøi www.danskeequities.com
Deutsche Bank Brian White www.db.com
Dresdner Kleinwort Wasserstein Tero Weckroth www.drkwresearch.com
Exane BNP Paribas Jonathan Kwok www.exane.com
Goldman Sachs Dani Saurymper www.gs.com
Handelsbanken Michael Novod www.handelsbanken.com
ING Tim Race www.ing.com
JP Morgan Annie J. Cheng www.jpmorgan.com
Jyske Bank Peter B. Andersen www.jyskebank.com
Kaupthing Poul La Cour www.kaupthing.com
Merrill Lynch Erica Whittaker www.ml.com
Brigitte de Lima
Morgan Stanley Caius Christoe www.morganstanley.com
Oppenheim Peter A. Düllmann www.oppenheim.com
Redburn Partners Paul Major www.redburn.com
SEB Enskilda Henrik D. Simonsen www.enskilda.com
Societe Generale Ian Wainwright www.sgcib.com
Standard & Poors Torben Vest www.standardandpoors.com
Sydbank Rune Majlund Dahl www.sydbank.dk
Investor Relations contacts
Jacob Tolstrup
Director
Tel. +45 36 43 30 79
Fax + 45 36 43 82 62
jtl@lundbeck.com
Palle Holm Olesen
Head of Investor Relations
Tel. + +45 36 43 24 26
Fax + 45 36 43 82 62
palo@lundbeck.com
Thomas Bay-Wedel
Investor Relations Officer
Tel. + 45 36 43 39 80
Fax + 45 36 43 82 62
tbw@lundbeck.com
Financial calendar 2008
Date
Event
4 March Announcement of the financial results for the period
1 January-31 December 2007
22 April Annual General Meeting 2008
7 May Interim report for the first quarter of 2008 (January-March)
13 August Interim report for the second quarter of 2008 (April-June)
12 November Interim report for the third quarter of 2008 (July-September)
43

In Lundbeck’s department for analytical chemistry, senior laboratory
technician Rikke García Andreasen is examining how the release of
the active ingredient Lu 31-130 for the treatment of schizophrenia
is progressing. The tablets are put into so-called dissolution vessels,
and samples are taken for subsequent analysis. The results are used
to sketch a dissolution profile that can indicate how quickly the
compound is released from the tablet after administration.

Schizophrenia and
psychotic disorders
S
chizophrenia is a mental disorder that
occurs in varying degrees but is most
often chronic. Up to 1% of the population
is directly affected by schizophrenia.
Schizophrenia is the most common psychotic
disorder. The disease most often occurs in late
adolescence or early adulthood and is characterised
by distinct changes in the patient’s way
of thinking and perception of the outside
world. Furthermore, schizophrenia is characterised
by short or long periods during which the
patient is in an acute psychotic condition, suffering
from definite hallucinations and delusions.
But there are also stable periods during
which the patient experiences a significant reduction
in symptoms or is symptom-free.
Even in stable periods, many patients have difficulty
in establishing social contact, complete
an education programme or hold a normal job.
Schizophrenia patients have difficulty in performing
even everyday activities such as cooking,
personal hygiene and cleaning.
The disease is often disabling and can be very
painful, first and foremost to the patient, but
also to the patient’s relatives.
According to WHO, there are 25 million cases
of schizophrenia worldwide at any given time.
Lundbeck markets Serdolect® for the treatment
of schizophrenia. In addition, Lundbeck is
developing bifeprunox for the treatment of
schizophrenia, Lu 31-130 for the treatment of
psychoses and Lu AA39959 for the treatment
of psychoses and bipolar disorder.
45

Focused efforts:
Environment, health
and safety
Lundbeck aims to conduct its activities in a way that harms neither its employees nor its
local communities in the countries in which it operates. In 2007, Lundbeck increased its
production without recording a corresponding increase in its consumption of raw materials,
energy and water and also recorded the lowest number of accidents in four years.
In addition, Lundbeck has defined a new goal to reduce Lundbeck’s CO 2
emissions by 2016.
L
undbeck’s development of pharmaceuticals
and manufacturing processes is
based on chemical synthesis. This
means that Lundbeck’s most significant effects
on humans and the environment derive from
consumption of raw materials – primarily organic
solvents, energy and water – along with
waste production and the emission of solvents
into the air.
The active ingredients in Lundbeck’s pharmaceuticals
are manufactured at Seal Sands in
the UK, Lumsås in Denmark and Padova in
Italy. These factories have been certified to
the ISO 14001 environmental standard for a
number of years. In 2007, this certification was
extended to Lundbeck’s production of finished
pharmaceuticals. All Lundbeck’s production
sites now follow the same system in their environment,
health and safety initiatives: Lundbeck’s
HS&E 1 system, which complies with
ISO 14001 and OHSAS 18001.
Certification of the HS&E system will be completed
in 2008 with the inclusion of the remaining
areas of Lundbeck’s Valby headquarters
and its research unit in New Jersey, USA.
This will conclude a four-year strategic initiative
aimed at ensuring that Lundbeck will, also
in the years ahead, show a continuing commitment
to constantly improve its environmental
protection measures and the health and safety
conditions offered to its employees.
Read more about the specific improvements
made to Lundbeck’s production facilities in
2007 at lundbeck.com/sustainability.
1) Health, Safety and Environment
HS&E strategy 2010 updated
Lundbeck aims to ensure a safe and healthy
working environment for its employees and
take responsibility for its environmental impact.
The ambition is to be one of the leading
businesses in the field of health, safety and the
environment. To put action behind its words,
Lundbeck management adopted a focused
strategy in 2004 involving ten focus areas as
outlined in the figure on the next page. Management
is very satisfied to note that the
strategy is progressing according to plan. By
the end of 2007, halfway through the
2005-2010 strategy period, more than half of
the strategy’s activities had been implemented
in the company’s day-to-day operations.
With the support of management and employees
alike, the strategy has helped to ensure
significant progress in accordance with the
company’s health, safety and environment
(HS&E) policy. The specific improvements involve
a reduced resource consumption, lower
solvent emissions, the introduction of routines
for environmental assessment of new pharmaceuticals
and an evaluation of suppliers with
respect to environmental and employee conditions.
Also, data compilation and communication
about Lundbeck HS&E matters and initiatives
have been expanded and improved.
One of Lundbeck’s goals for 2007 was to update
Lundbeck’s HS&E strategy 2010, which
will enable the company to continue the positive
trends in the years ahead.
The updated strategy builds on experience
gained and on improved systems for analysis
and follow-up. This provides for a more precise
analysis of problems, allowing the company to
customise more effective solutions. In the
years ahead, Lundbeck will use this platform to
increase its focus on matters such as HS&E
considerations when developing new pharmaceuticals,
minimising resource consumption
and waste in the business, and implementing
Lundbeck’s CO 2
strategy.
For all strategy focus areas, Lundbeck has defined
clear success criteria to determine when
an initiative has been accomplished. Lundbeck
has also defined a number of indicators for its
impact on people and the environment for inhouse
and external benchmarking purposes.
Lundbeck intends to use these success criteria
and indicators to regularly monitor whether
Lundbeck ranks among the leading companies
in the HS&E field.
Lundbeck defines targets for
CO 2
emissions
Energy, carbon dioxide and the climate are
topics that dominate in the media and affect
the political debate. Companies and others are
expected to take responsibility for their actions
and reduce greenhouse gas emissions as
much as possible.
Lundbeck intends to act responsibly in terms
of energy consumption and CO 2
emissions.
Thus, in 2007, Lundbeck’s Executive Management
adopted a long-term CO 2
strategy defining
targets for reductions in the company’s
CO 2
emissions. As part of this strategy, Lundbeck
intends to sever the connection between
business growth, energy consumption and resultant
CO 2
emissions. The specific target is for
CO 2
emissions in 2016 not to exceed the level
recorded in 2006.
46

Lundbeck sets high standards not only for the
Group’s in-house health, safety and environment
initiatives, but also expects that its
suppliers maintain high standards with respect
to the environment and employee conditions.
Read the article Inge’s forest in
the Lundbeck Magazine 2008
In 2006, Lundbeck emitted 45,000 tonnes of
CO 2
, 27% deriving from the burning of fossil
fuels in its own boiler plants and 73% from
external supplies of power and heating. These
calculated CO 2
emissions include those from
Lundbeck’s facilities for research, development
and production.
Lundbeck is not under any legal obligation to
reduce its CO 2
emissions, but adopting this
goal is a natural next step in the company’s
long-standing efforts to optimise its energy
consumption.
Until 2016, this CO 2
strategy will lay the foundation
for energy conservation efforts
throughout the Group. The efforts involve the
systematic mapping and implementation of
projects aimed at energy savings and reducing
CO 2
emissions from Lundbeck’s research, development
and manufacturing locations.
The initiatives will be coordinated from Lundbeck’s
headquarters, and this will centralise the
prioritisation of projects so that Lundbeck can
achieve optimum energy savings and reductions
in CO 2
emissions.
The CO 2
strategy matches well with Lundbeck’s
traditions for research, development and
process optimisation. It also fits well with Lundbeck’s
Lean programme, which aims to eliminate
waste and boost quality in the production
department. A number of improvements have
already been made that benefit productivity
and reduce energy consumption, which will
help achieve the CO 2
target for 2016.
Lundbeck is off to a good start with these initiatives.
Total emissions in 2007 amounted to
Lundbeck’s HS&E strategy 2005-2010 05 06 07 08 09 10
HS&E system
HS&E system certified to ISO 14001 and OHSAS 18001 in
research and development, production and headquarters.
Targets and data
Determine and follow up on HS&E targets.
Compile and report HS&E data.
HS&E considerations in pharmaceutical development
Environmental toxicology studies of new pharmaceuticals.
System for including HS&E considerations in development projects.
Consumption and waste
System for including HS&E considerations in productivity
improvements.
Action plan to minimise consumption and waste and recycle more.
Energy optimisation and CO 2
strategy
Action plan for energy optimisation.
Lundbeck CO 2
strategy with the main emphasis on energy optimisation.
Evaluation of suppliers
System for evaluation of suppliers based on environmental
and employee conditions.
Prevent physical and psychological health and safety issues
Create a safe and healthy working environment through
prevention and training.
Health-promoting policy.
Communication
Strategy for in-house and external HS&E communication
about Lundbeck’s HS&E initiatives.
Legislation and requirements
System for monitoring and implementing statutory
and non-mandatory requirements.
Strategy and organisation
HS&E strategy for decisions and organisation of HS&E work.
= Establish = Maintain and develop
47

44,100 tonnes, which was slightly less than in
2006. This single figure actually covers two different
elements: lower energy consumption
levels at Lundbeck’s research, development and
production facilities in Denmark, Italy and the
UK and new data added for energy consumption
from Lundbeck’s research unit in New Jersey
in the USA.
Lundbeck’s long-term growth targets and the
expansion of its facilities in Denmark and the
USA do not make its CO 2
targets for 2016 any
less ambitious.
Health and safety
Lundbeck aims to ensure that its employees
enjoy a safe and healthy working environment.
As in previous years, Lundbeck improved both
its physical and psychological working environment
in 2007.
The number of industrial accidents occurring at
Lundbeck has been very low for many years
and below the industry average. Hence it is particularly
pleasing to see that the positive trend
in registering near-misses between 2003 and
2006 continued in 2007. This means that more
problems are being resolved before they develop;
a trend which is reflected in the number
of lost-time accidents and the frequency of accidents,
as both figures dropped in 2007 to
their lowest level in four years. The accidents
that did occur in 2007 were less serious ones,
and the number of lost workdays per accident
remained unchanged compared with 2006.
In 2007, Lundbeck contributed to the development
of a Danish information campaign on
safety in the workplace. The campaign was conducted
by Industriens Branchearbejdsmiljøråd
(a board that advises industry on matters related
to health and safety) and involved a spot
on national television and a website. The aim
was to promote dialogue on safety in the workplace,
as there has been an increase in the
number of accidents in Danish industrial workplaces
in recent years.
The work to ensure a good psychological working
environment at Lundbeck continued in
2007 with the cross-organisational project entitled
No Stress. The project group consists of
employees and managers from Human Resources,
the HS&E department, the works
council and the safety organisation.
The project involved planning courses on the
topic for Lundbeck’s managers, shop stewards
and safety representatives. Other specific results
from the projects are presented on the
Lundbeck intranet together with good advice
and tools that can be used by departments and
individual employees to prevent and handle
stress. The intranet provides a number of case
stories on the prevention and handling of stress
told by Lundbeck managers and staff. These
cases show that an increasing number of departments
are taking preventive measures in
this often difficult and tabooed topic.
Lundbeck has added a stress indicator in the
company’s employee satisfaction survey to the
range of tools it uses to monitor the psychological
working environment. The aim is to
maintain a focus on the topic and to monitor
changes in the factors that affect employee
stress levels. With these initiatives, Lundbeck
aims to maintain a healthy psychological working
environment, also in the long term.
Health and safety statistics, 2003-2007
2003 2004 2005 2006 2007
Lost-time accidents 19 32 25 27 22
Recorded near-misses 41 78 160 258 250
Indicators for prevention of accidents: near-misses per registered
lost-time accident 2.2 2.4 6.4 9.6 11.4
Number of lost workdays per accident 8.1 9.7 9.0 10.9 11.0
Accident frequency: number of lost-time accidents per million hours of work 4.5 8.8 7.2 7.8 5.9
48

Environmental impact under full control
The positive trends in the key environmental impact figures from Lundbeck’s pharmaceutical research, development
and production continued in 2007. Although Lundbeck recorded an increase in the consumption of raw materials,
energy and water in 2007, the rise was lower than the increase in production, which is what has the greatest impact
on these indicators. Starting in 2007, the calculation includes Lundbeck’s research unit in New Jersey, USA, which
also raises consumption and emission levels. The complete set of data is available at lundbeck.com/sustainability.
Production up and raw materials consumption down
In 2007, Lundbeck used 4,440 tonnes of solvents in its chemical production, 32 of which were used
in research, development and pharmaceutical production at Group headquarters. Lundbeck’s research
unit in the USA used three tonnes of solvents in 2007.
Production of active ingredients and intermediates rose 10% and production of finished goods 14%
relative to 2006. Lundbeck’s research laboratories optimised their work routines, increased their focus
on small-scale synthesis chemistry and outsourced a number of medium-scale synthesis
projects to contract laboratories.
Overall consumption of raw materials was up by a mere 4%. This figure reflects a 1% decline in the
consumption of solvents and a 13% increase in the use of other raw materials, including the active
ingredients used in Lundbeck’s pharmaceuticals.
Total energy consumption in 2007 was 127,200 MWh, with a resultant total of 44,100 tonnes of
CO 2
emissions from Lundbeck’s boiler plant and external supplies of power and district heating.
Lundbeck’s combined energy consumption was 7,100 MWh higher than in 2006, but this increase
was exclusively due to the addition of data from the research unit in the USA. Without this addition,
total energy consumption would have been 7,400 MWh lower than in 2006. The total consumption
of water rose 2% relative to 2006, again due to the addition of consumption figures from
the research unit in the USA.
Low solvent emissions despite increase in 2007
When you work with organic solvents, there is no way to avoid a low level of emissions into the
atmosphere through ventilation air. Lundbeck has been successfully reducing emissions over a
number of years, partly by planning its work so processing takes place in a closed system and partly
by purifying the ventilation air before releasing it outdoors. The total loss of solvents in Lundbeck’s
ventilation air in 2007 was thus less than 1% of total solvent consumption.
For the first time in five years, 2007 saw an increase in total emissions of organic solvents to a level
of 35 tonnes, which is 57% more than in 2006. This undesirable trend is now under control. The increase
was solely due to higher emissions from the Lumsås
manufacturing
facility. The increase was
the result not only of a higher production output and consumption of solvents, but also of a
number of independent changes made to production and operation conditions for the machinery
that purifies the air before it is emitted. It is important to emphasise that 2007 emissions remained
at a low level and were hazardous to neither people nor the environment.
Construction activity adds to total waste volumes
Lundbeck’s waste consists primarily of chemical waste, which accounts for 75% of the total waste
volume. This percentage has remained stable over the past five years, but the total volume of waste
has dropped. During this same five-year period, the waste volume remained proportional to the
production of active ingredients and intermediates.
Relative to 2006, the total waste volume rose by 2,800 tonnes in 2007. The increase was primarily
due to the expansion of Lundbeck’s Danish headquarters with new buildings. Most of the construction
waste was recycled. Chemical waste accounts for only one-fifth of the increase in terms of to-
tal waste volume. This increase was lower than the corresponding increase in the production of active
ingredients and intermediates.
Less than 1% of Lundbeck’s total waste volume was disposed of in landfills in 2007.
49

Lundbeck’s HS&E strategy 2010, target status in 2007 and new targets for 2008
Lundbeck HS&E strategy 2010
HS&E system
• HS&E system certified to ISO 14001 and OH-
SAS 18001 in research and development, production
and headquarters.
HS&E considerations in drug development
• Environmental toxicology studies of new
pharmaceuticals.
• System for including HS&E considerations in
development projects.
Consumption and waste
• System for including HS&E considerations in
productivity improvements.
• Action plan to minimise consumption and
waste and to recycle more.
Energy optimisation and CO 2
strategy
• Action plan for energy optimisation.
• Lundbeck CO 2
strategy with the main
emphasis on energy optimisation.
Evaluation of suppliers
• System for evaluation of suppliers based on
environmental and employee conditions.
Preventing physical and psychological
health and safety issues
• Create a safe and healthy working environment
through prevention and training.
• Health-promoting policy.
Communication
• Strategy for in-house and external HS&E
communication about Lundbeck’s HS&E
initiatives.
Strategy and organisation
• HS&E strategy for decisions and organisation
of HS&E work.
Target status in 2007
+
+
–
+
+
–
+
+
+
+
–
+
+
+
+
Implement the HS&E system in Lundbeck,
Denmark.
Achieve ISO 14001 and OHSAS 18001 certification
of Lundbeck’s production sites.
Conduct environmental toxicology studies of
the development candidate bifeprunox.
Replace substances or materials that have an
adverse impact on the environment or working
environment.
Reduce emissions of volatiles through the use
of solvent savers, solvent supermarkets,
process optimisation or substitution in all
relevant areas.
Prepare a minimum of four business cases
that illustrate the financial impact of Lundbeck’s
HS&E initiatives.
Define a CO 2
strategy and adopt long-term
targets for CO 2
emissions.
Conduct at least 20 energy and resourcesaving
activities, including identification and
energy investigations.
Perform audits of two suppliers with respect
to environmental and employee conditions.
Identify unwanted noise in the APV (workplace
assessment) and attenuate all noise
above 80 dB(A) at stationary work stations
when technically and financially feasible.
Launch an HS&E module in Lundbeck’s management
training programme.
Reduce the number of lost-time accidents in
2007 relative to 2006.
Reduce the frequency of lost-time accidents
in 2007 relative to 2006.
Register at least seven near-misses per registered
lost-time accident.
No specific targets had been defined for this
area for 2007.
Update Lundbeck’s HS&E strategy in collaboration
with relevant stakeholders.
Targets for 2008
• Complete ISO 14001 and OHSAS 18001
certification of Lundbeck’s HS&E system.
• Define method for systematic HS&E
assessment of development projects.
• Identify Lundbeck’s consumption of goods and
handling of waste and draw up a combined
action plan.
• Optimise consumption of raw materials and
minimise the volume of waste through local
activities in at least 15 departments.
• Contribute to Lundbeck’s CO 2
strategy by
accomplishing specific energy-saving initiatives
in at least 15 departments.
• Define guidelines for HS&E assessment of
commercial purchasing.
Noise and harmful noise
• Conduct activities related to noise action plan
2008-2010 in Denmark.
• Reduce harmful and unnecessary noise through
local activities in at least 15 departments.
Working positions and heavy lifts
• Conduct a combined mapping of heavy lifts
and inappropriate work positions.
• Reduce heavy lifts and inappropriate working
positions through local activities in at least 15
departments.
Psychological working environment
• Conduct activities to focus on the psychological
working environment in at least 25 departments.
Accidents
• Launch global Lundbeck accident database.
• Reduce the number of lost-time accidents in
2008 relative to 2007.
• Reduce the frequency of lost-time accidents
in 2008 relative to 2007.
Health promotion
• Implement Lundbeck’s strategy for health promotion
with goals, targets and measurements.
• Update websites at lundbeck.com/
sustainability.
• Update Lundbeck’s HS&E strategy in collaboration
with relevant stakeholders.
+
–
= Target met = Target not met
50

The right skills
for the new decade
In 2007, Lundbeck strengthened its efforts to recruit and retain the employees that it
needs to successfully lead the company into the next decade. Accordingly, the company
developed plans and programmes for management development, talent management
and employer branding and invested extensively in employee health and competencybuilding
initiatives.
L
undbeck is an international company
with more than 5,300 employees.
Headquartered in Denmark, the Group
has employees in 54 countries. More than 62%
of Lundbeck’s employees are employed outside
Denmark, a figure that has increased steadily
over the past six years.
Lundbeck is a fully integrated pharmaceutical
company, possessing competencies throughout
its value chain. Of total staff, 22% are engaged
in research and development, 18% in
production, 44% in sales and marketing, and
15% in administrative functions.
In 2007, Lundbeck’s HR organisation focused
on three development areas: manager and employee
development, recruiting and retaining
talent and well-being in the workplace.
A single leadership development
programme
In 2007, Lundbeck’s HR organisation focused
on setting up a single and targeted leadership
development programme with the aim of preparing
the Group’s managers for present and
future challenges.
The programme aims to enable all managers
to motivate, develop and coach employees so
that everyone knows his or her role and is able
to make valuable contributions to Lundbeck
achieving its vision, mission and goals.
Over the course of 2007, a number of extensive
interviews were carried out in order to
identify the requirements imposed by Lundbeck’s
strategy and business targets with respect
to leadership competencies. This survey
provided the basis for a new leadership development
programme, which offers tailor-made
coaching for each individual manager. The individual
components of the development programme
also reflect a stronger focus on management
tools and skills in areas such as
motivation, targets and change management.
Also, as a second component of Lundbeck’s efforts
to recognise and develop leadership skills,
a performance-rewarding bonus scheme for all
managers above head of department level in
the Danish part of the organisation has been
introduced. As part of their salary, these managers
are now eligible for a variable annual bonus
if they meet certain specific targets. The
scheme will be expanded to include head of
department level managers in 2008.
Developing employee competencies
Lundbeck recognises the fact that employee
training is vital in ensuring that its employees
consistently possess the necessary skills in a
rapidly evolving company, and it is also crucial
in retaining the company’s position as an attractive
workplace. Accordingly, in 2007 as
well, Lundbeck scaled up its talent management
programme, which is aimed at identifying
and developing management and specialist
talent. To this end, three multi-level career
paths for salaried employees at Lundbeck have
been established: the line manager path, the
project manager path and the specialist path.
For each employee who follows one of these
career paths, an individualised plan is prepared
that maps the development path and is
adapted to the needs of that manager or specialist.
51

Lundbeck aims to be a workplace at which
employees feel comfortable and would like
to stay.
Marie-Claude Ballandras is HR Director of
Lundbeck France, where she is responsible
for recruitment and retention of the right
employees.
Read the article Prepared for
the future in the Lundbeck
Magazine 2008.
At the end of 2007, a total of 120 employees
at Lundbeck headquarters and the synthesis
factory in Denmark had embarked on the specialist
and project manager career path and
228 employees on the line manager path.
Among employees currently underway on one
of these career paths, 16% were at the divisional
director level, 38% at the head of department
level, and 46% at the head of section
level.
Each year, Lundbeck devotes substantial resources
to developing employee competencies.
In 2007, the Lundbeck HR organisation arranged
in excess of 85 courses for more than
1,300 managers and other employees. In addition,
the individual business areas arranged local
activities of particular importance to their
own employees.
At least once every year, the goals defined for
each employee are followed up at individual
manager/employee performance reviews. At
these reviews, goals are revised for the upcoming
year and the employee and manager agree
on initiatives for competence building aimed
at ensuring that the employee possesses the
skills required to achieve the goals.
Competing for the best employees
Lundbeck’s total staff turnover in 2007 was
16%, an increase on the 13% recorded in
2006. The increase was partly due to a reduction
of the sales forces in several European
subsidiaries in 2007. Staff turnover based on
voluntary resignations was 10%, which is an
increase from 2006, when the figure was 8%.
This increase could to a large extent be ascribed
to the current lack of available workforce,
which makes it attractive for employees
to seek new employment opportunities. Lundbeck
is aware of the increased competition for
qualified employees that will characterise the
coming years. Consequently, Lundbeck must
establish itself as an attractive workplace. The
company began building an employer branding
strategy in 2007, which is expected to lead to
a number of tools in 2008 that can support
Lundbeck’s efforts to attract and retain employees
with the professional and social skills
that match Lundbeck’s mission, targets and
competency requirements.
Streamlined organisational processes
One of the initiatives required to prepare Lundbeck
for the future is a streamlining of all
processes. As a result, Lundbeck has given high
priority over the past couple of years to introducing
a Lean culture at Lundbeck. Since the
first Lean pilot project in 2006, the culture has
been spread to all parts of the Danish production
organisation and to IT operations. In January
2007, Lean ceased to be simply a project,
and the activities were scaled up by setting up
an independent organisational Lean entity that
reports directly to Executive Management.
In 2007, employees at Lundbeck’s manufacturing
facilities received training in basic Lean
principles at the Lundbeck Lean Academy. Also,
32 Lean specialists were trained in 2007, so
Lundbeck now has a total of 50 employees
with an in-depth knowledge of and experience
in Lean tools and principles. By the end of
2007, just under 100 Kaizen events (improvement
workshops) have been carried out, and
more than 50% of the employees in Lundbeck’s
production organisation have now participated
in Kaizen events.
In 2008, all managers in Lundbeck’s production
organisation in Denmark will complete an ambitious
training programme that aims to put
the principles of good leadership into a Lean
perspective. A total of 120 managers will receive
twelve days of intensive training. The
purpose of the programme is to ensure that
production managers apply Lean as an integral
part of their day-to-day management work so
that Lean becomes the basic culture of the organisation.
In 2006, Lundbeck’s research organisation
launched a large-scale innovation project
whose first phase focused on communication
within and across research areas and on optimising
key processes and building an innovation
culture in the organisation. The project
was evaluated as part of an employee satisfaction
survey in the autumn of 2007. The survey
showed that employees now have a better understanding
of innovation and the importance
of innovation, that the organisation has succeeded
in optimising a number of key processes,
and that the research organisation now
has more projects with a high level of innovation.
In addition, an important initiative referred
to as the Lundbeck Research Way of
Working (LWW) has emerged from the innovation
project. The LWW programme is a fourday
course involving three focus areas: Lundbeck’s
culture and values, pharmaceutical
innovation in Lundbeck’s research and development,
and the interaction between specialists,
project managers and line managers in
pharmaceutical innovation. The second phase
of the research organisation’s innovation
project will begin towards the end of 2008 and
52

will focus on projects in the drug discovery and
development organisation.
Well-being in the workplace
As in previous years, employee health and
well-being was on the Lundbeck agenda in
2007. A good work environment helps attract
and retain enthusiastic employees, so it is natural
for Lundbeck to be aware of its employees’
level of satisfaction with their working
conditions and their workplace in general. Lundbeck
regularly carries out online questionnaire
surveys to measure employee satisfaction by
certain parameters such as management, collaboration
and competency building. In 2007,
the questionnaire framework was extended to
optimise it for use as a tool for management
and dialogue. A high average response rate was
recorded (91%) for the satisfaction surveys
conducted in 2007, with an employee satisfaction
score of 69 on a scale from 1 to 100. The
average for companies using the same analytical
method is 67.
Read more about Lundbeck’s recruitment and
HR development policy at lundbeck.com/careers.
53

Research and
knowledge sharing
Lundbeck contributes to society’s treatment of patients with disorders of the central
nervous system through the development of innovative pharmaceuticals and by sharing
knowledge of research and clinical practice. In addition, the Lundbeck Foundation
makes substantial contributions to scientific research for the benefit of society.
E
ach year, Lundbeck ploughs about 20%
of its revenue back into research and
development, a figure above the industry
average of approximately 17%. In 2007,
Lundbeck invested just over DKK 2,187 million
in the research into and development of new
pharmaceuticals.
Knowledge sharing
Knowledge is the cornerstone of optimum therapeutic
treatments. Accordingly, an important
part of Lundbeck’s operations involves offering
training programmes for specialists in depression,
anxiety, schizophrenia and dementia.
The Lundbeck Institute was established in 1997
as an international non-commercial forum with
the aim of helping improve the quality of life
for patients suffering from disorders of the central
nervous system.
All activities build on objective knowledge and
involve interactive and international seminars
for specialists, educational materials, professional
websites and resources for specialists,
and web-based forums on depression and dementia
that allow experts, patients and their
relatives to exchange information.
The seminars held by the Lundbeck Institute are
accredited by the European Accreditation Committee
in CNS, and the training activities are
approved by the institute’s faculty, which counts
86 leading psychiatrists and neurologists from
around the world.
Donations for independent research
The Lundbeck Foundation, the principal shareholder
of the Lundbeck Group, holds approximately
70% of the shares, making it the primary
recipient of dividends from Lundbeck
Group operations.
Since Lundbeck’s IPO in 1999, the Lundbeck
Foundation has in its capacity of principal
shareholder received substantial distributions
in the form of dividends and share buybacks.
The objectives of the Lundbeck Foundation are
to support and expand the activities of the
Lundbeck Group and to grant financial support
to high-quality scientific research.
Group management is pleased with the fact
that Lundbeck’s value-generating initiatives
also benefit society at large through the donations
made by the Lundbeck Foundation. Donations
from the Lundbeck Foundation have
risen considerably in recent years, with an increase
in donations from DKK 22 million in
1999 to DKK 281 million in 2007.
Towards the end of 2007, the Lundbeck
Foundation announced its decision to
distribute DKK 1 billion for research in health
and natural sciences over the next three years.
The Lundbeck Institute
• In 2007, the Lundbeck Institute held 12
seminars attended by 295 people from 28
countries.
• Since it was established in 1997, the Lundbeck
Institute has held 134 one-week seminars
for a total of 3,055 specialists from 55
countries.
• These specialists hold additional seminars
and workshops in their home countries, so
about 100,000 specialists around the world
have benefited from the Lundbeck Institute’s
direct and indirect training activities
over the past 11 years.
• The Lundbeck Institute’s web-based forum
for patients and relatives, DepNet (about
depression), is now available in 17 countries.
• DementiaNet, which provides information
about dementia for patients and relatives, is
available in two countries.
• Local Lundbeck institutes have been set up
in 16 countries.
• The Institute issues a large number of publications
and an Institute Magazine.
The Association of European Psychiatrists
(AEP), Collegium Internationale Neuro-
Psychopharmacologicum (CINP), the European
Federation of Neurological Societies (EFNS),
the European College of Neuropsychopharmacology
(ECNP) and the World Psychiatric Association
(WPA) support the work of the institute
and are represented in the Lundbeck
International Neuroscience Foundation, which
manages the institute’s activities.
Read more at cnsforum.com/lundbeck institute.
54

The Lundbeck Foundation is one of the largest private financial
contributors to public health care research in Denmark.
Read the article The Lundbeck Foundation
increases donations to research in the
Lundbeck Magazine 2008
Examples of donations from the Lundbeck Foundation in 2007
• In 2007 and 2008, the foundation will donate
funds for establishing research centres
with a view to bringing the results obtained
in basic research faster and more effectively
into use to the benefit of the patients. Accordingly,
in October 2007 the Lundbeck
Foundation donated a total of DKK 100 million
for three research centres:
- DKK 20 million for a research centre to
develop and test new markers that may
predict whether a given cancer patient’s
disease will turn aggressive or stop progressing.
- DKK 60 million for a research centre to investigate
any apparent differences in the
exposure to early atherosclerosis caused
by obesity, hypertension and Type 2
diabetes. The centre is a Danish-Chinese
collaboration.
- DKK 20 million for a research centre to
uncover the impact of genetic disposition
and bacterial flora in the respiratory tract
of infants on early development of
asthma, allergy and eczema in children.
• DKK 1.1 million for the development of new
methods to record how the brain of a schizophrenic
patient processes information
compared with healthy persons and for a
description of the disturbances seen in patients
with schizophrenia. It has been demonstrated
that the disturbances are more
important to disease process than the actual
symptoms of schizophrenia.
• DKK 240,000 to examine the correlation between
EPO and rehabilitation after a patient
has been confined to a bed for a long time.
It has been demonstrated that EPO prevents
cell death in a number of cell types, and
that new muscle fibres may be formed if we
stimulate the EPO receptor in muscle satellite
cells. This may help prevent prolonged
and expensive attempts of rehabilitation,
especially among older patients.
• DKK 1.54 million for a basic research project
aimed at constructing Denmark’s first
atomic clock. Such an atomic clock would
provide fundamental knowledge about the
picture of our universe.
• DKK 1.07 million to analyse DNA from 900
patients suffering from multiple sclerosis
and DNA from a comparator group of
healthy individuals. The objective is to
examine inherited differences in specific
genes in order to obtain new knowledge
about the disease mechanisms in connection
with multiple sclerosis. Furthermore,
the objective is to develop new prevention
and treatment methods.
55

Section leader Lars Torup and molecular biologist Jacob Nielsen
are looking at a 3D image of the CEPO molecule, a novel and
innovative compound developed by Lundbeck scientists in
collaboration with Warren. CEPO has a neuroprotective effect
that may help to limit damage following an incident such as
a blood clot in the brain, where parts of the brain are damaged
by lack of oxygen due to impaired blood supply.

Acute ischaemic
stroke
S
troke is the third leading cause of death
in the industrialised world and a leading
cause of serious, long-term disability.
In the USA alone, 600,000 people suffer
from a stroke each year, and around 20% of
them die within four weeks.
Ischaemic stroke is the most common type of
stroke and occurs when an artery in the brain
is obstructed by a blood clot.
The only currently available clot-dissolving
agent must be administered within three hours
of symptom onset; however, approximately
80% of stroke patients arrive at the hospital
after the three-hour limit.
Lundbeck is developing desmoteplase for the
treatment of acute ischaemic stroke and
– in collaboration with the American biotech
company Warren Pharmaceuticals, Inc. –
Lu AA24493 for the treatment of acute
ischaemic stroke and other diseases with
neuronal damage.
57

Financial statements
2007
Revenue DKK 10,985 million
Profit from operations DKK 2,695 million
Net profit for the year DKK 1,770 million
60
62
63
64
66
68
69
116
117
118
120
Summary for the Group
Financial review 2007
Income statement
Balance sheet
Statement of changes in equity
Cash flow statement
Notes to the financial statements
Management statement
Independent auditors’ report
Supervisory Board
Executive Management
59

Summary for the Group
2003-2007
Income statement (DKKm) 2003 2004 2005 2006 2007
Revenue 9,941 9,733 9,070 9,221 10,985
Profit before research and development costs 4,093 4,342 3,943 3,738 4,865
Research and development costs 1,931 1,776 1,782 1,958 2,187
Profit from operations 2,147 2,554 2,170 1,784 2,695
Net financials (76) 16 108 (64) (50)
Profit before tax 2,068 2,521 2,242 1,633 2,562
Net profit for the year 1,384 1,689 1,574 1,107 1,770
Net profit for the year, shareholders in the parent company 1,387 1,709 1,584 1,107 1,770
Assets (DKKm) 2003 2004 2005 2006 2007
Non-current assets 5,972 5,555 5,754 6,104 5,726
Inventories 1,334 1,282 1,267 1,155 924
Receivables 2,430 1,770 1,938 1,994 2,368
Cash and securities 1,334 2,902 2,669 2,378 3,308
Total assets 11,070 11,509 11,628 11,631 12,326
Equity and liabilities (DKKm) 2003 2004 2005 2006 2007
Equity 6,901 7,839 7,492 6,765 7,185
Non-current liabilities 667 867 900 2,171 2,502
Current liabilities 3,502 2,803 3,236 2,695 2,639
Total equity and liabilities 11,070 11,509 11,628 11,631 12,326
Cash flow statement (DKKm) 2003 2004 2005 2006 2007
Cash flows from operating activities 1,900 2,678 2,074 1,394 2,705
Cash flows from investing activities 1 (1,816) (1,794) (487) 239 (1,095)
Cash flows from operating and investing activities 1 84 884 1,587 1,633 1,610
Cash flows from financing activities 55 (863) (1,682) (901) (1,012)
Interest-bearing net cash at year end 788 2,391 2,240 876 1,405
Key figures 2003 2004 2005 2006 2007
EBIT margin (%) 21.6 26.2 23.9 19.3 24.5
Return on capital employed (%) 37.3 37.0 32.0 25.2 34.9
Return on equity (%) 21.9 23.2 20.7 15.6 25.3
Research and development costs as a percentage of revenue 19.4 18.2 19.6 21.2 19.9
Solvency ratio (%) 62.3 68.1 64.4 58.2 58.3
Capital employed (DKKm) 7,447 8,351 7,920 8,267 9,088
Capital turnover (%) 89.8 84.6 78.0 79.3 89.1
Intangible assets investments, gross (DKKm) 913 8 159 190 274
Property, plant and equipment investments, gross (DKKm) 962 305 447 567 474
Financial investments, gross (DKKm) 1 2,992 5,211 4,059 3,556 844
Average number of employees 5,223 5,155 5,022 5,111 5,134
1) Comparative figures have been restated so that securities are included in cash flows from investing activities.
60

Share data 2003 2004 2005 2006 2007
Average number of shares, excl. treasury shares (million) 1 231.4 229.6 224.6 211.1 205.0
Earnings per share (EPS) (DKK) 1 5.98 7.42 7.04 5.24 8.63
Diluted earnings per share (DEPS) (DKK) 1 5.98 7.42 7.02 5.23 8.63
Proposed dividend per share (DKK) 1 1.77 2.21 2.10 1.57 2.56
Cash flow per share (DKK) 1 8.19 11.62 9.20 6.59 13.18
Net asset value per share (DKK) 1 29.71 34.21 33.99 32.40 35.81
Market capitalisation (DKKm) 23,098 28,517 29,630 33,060 28,605
Price/Earnings (DKK) 16.53 16.45 18.57 29.80 16.00
Price/Cash flow (DKK) 12.07 10.50 14.18 23.66 10.47
Price/Net asset value (DKK) 3.33 3.57 3.84 4.81 3.85
Definitions
Interest-bearing net cash
EBIT margin 2
Return on capital employed
2, 4, 5
Return on equity Profit
Solvency ratio 2
Capital employed
Capital turnover
2, 3, 5
Earnings per share (EPS) Profit
2, 3, 5
Diluted earnings per share (DEPS) Profit
Cash flow per share 2
Net asset value per share 2, 4
Market capitalisation
Price/Earnings 2
Price/Cash flow 2
Price/Net asset value 2
Cash and securities less interest-bearing debt
Profit from operations as a percentage of revenue
Profit from operations plus financial income as a percentage of average capital employed
attributable to shareholders in the parent company as a percentage of average equity, H. Lundbeck A/S’ shareholders
Equity, year-end, as a percentage of equity and liabilities, year-end
Total equity and liabilities less non-interest bearing liabilities
Revenue as a percentage of total assets, year-end
attributable to shareholders in the parent company divided by average number of shares, excl. treasury shares
attributable to shareholders in the parent company divided by average number of shares, excl. treasury shares,
incl. warrants, fully diluted
Cash flow from operating activities divided by average number of shares, excl. treasury shares, incl. warrants, fully diluted
Equity, H. Lundbeck A/S’ shareholders, year-end, divided by number of shares, year-end, excl. treasury shares, incl.
warrants, fully diluted
Total number of shares, year-end, multiplied by the official price quoted on OMX Nordic Exchange Copenhagen,
year-end
The official price quoted on OMX Nordic Exchange Copenhagen, year-end, divided by diluted earnings per share
The official price quoted on OMX Nordic Exchange Copenhagen, year-end, divided by cash flow per share
The official price quoted on OMX Nordic Exchange Copenhagen, year-end, divided by equity per share
1) Calculation is based on a share denomination of DKK 5.
2) Definitions according to the Danish Society of Financial Analysts’ Recommendations & Financial Ratios 2005.
3) Calculated according to IAS 33 Earnings per share.
4) Equity, H. Lundbeck A/S’ shareholders equals the Group’s total equity in 2007 and 2006.
5) In 2007 and 2006, profit attributable to shareholders in the parent company equals the Group’s consolidated profit.
Comparative figures involving number of shares have been adjusted by an adjustment factor of 0.9988 for the effect of employees exercising warrants.
61

Financial review 2007
Income statement
The Group generated revenue of DKK 10,985
million in 2007, an increase of 19% relative to
the previous year. Revenue was positively affected
by two non-recurring payments from
Takeda Pharmaceutical Company Limited totalling
DKK 420 million. The payments relate
to the collaboration formed in 2007 concerning
the development and commercialisation of
new products in the US and Japanese markets.
Net of these payments, revenue amounted to
DKK 10,565 million, corresponding to an increase
of 17% on 2006.
Sales of Lundbeck’s new products in own markets,
primarily of Cipralex® and Ebixa®, continued
the positive trends, contributing DKK 1 billion
to the revenue increase, which was 74% of
the Group’s combined revenue improvement
exclusive of income from Takeda. Also, revenue
was positively impacted by higher income
from sales of Lexapro® in the USA relative to
2006. The increase in income from Lexapro®
amounted to DKK 671 million, or 35%, and
was partly attributable to a low level of income
in 2006 due to Forest’s inventory reductions,
partly to rising Lexapro® sales in the US
market in 2007.
Foreign currency hedging had an adverse DKK
53 million impact on revenue. Of this amount,
DKK 48 million related to a hedging loss concerning
hedging of USD income from Lexapro®.
The realised hedging loss on USD relates to
hedging of the inventories consumed at Forest,
which Lundbeck hedged against exchange rate
fluctuations and delivered in 2005 and 2006.
Lundbeck’s total expenses, exclusive of net
financials and tax, were DKK 8,290 million, up
from DKK 7,437 million in 2006. The increase
was driven primarily by higher cost of sales due
to a DKK 381 million impairment loss on production
assets in the Group’s manufacturing
unit in Seal Sands, UK, and higher cost of
goods sold due to the higher revenue.
Administrative expenses were DKK 1,514 million,
a 7% increase on 2006. The increase was
due to factors such as costs of closing down
Lundbeck’s commercial office in Philadelphia,
USA, the continuing expansion of the Group’s
information technology infrastructure and expenses
relating to the establishment of a warrant
programme.
Research and development costs accounted
for 20% of consolidated revenue compared to
21% in 2006. Adjusted for the DKK 420 million
income from Takeda, research and development
costs represented 21% of revenue in
2007. Overall, there was a high level of activity
in 2007 with several pipeline projects being
advanced to the next phase.
The Group’s net financials were positively
affected by higher return on bonds and cash,
while exchange rate losses and interest
expenses were higher than in 2006.
Tax on profit for 2007 amounted to DKK 792
million, corresponding to an effective tax rate
of 30.9%, against 32.2% in 2006. The effective
tax rate was influenced by factors such as the
lowering of the Danish corporate tax rate from
28% to 25%.
At DKK 1,770 million, profit for the year was
up 60% compared with 2006. Earnings per
share increased 65% to DKK 8.63.
Balance sheet
The increase in intangible assets of DKK 114
million was driven primarily by the addition of
product rights on the conclusion of partnership
agreements, including with Biotie Therapies
Corp. and Neurim Pharmaceuticals Ltd., and
the continuing expansion of the Group’s IT
infrastructure.
Property, plant and equipment fell by DKK 292
million, or 8%, relative to 2006 due to impairment
of assets in the Group’s manufacturing
facility in Seal Sands, UK.
Financial assets amounted to DKK 457 million,
which was DKK 200 million lower than in
2006. The decline was due partly to an impairment
loss on the investment in and receivables
from the associate CF Pharma Gyógyszergyártó
Kft., partly to a drop in the Group’s
deferred tax assets.
Inventories were reduced by DKK 231 million
to DKK 924 million. The reduction was partly
the result of a dedicated effort to reduce inventories,
partly an impairment loss on inventories
at the manufacturing facility in Seal
Sands, UK.
The DKK 374 million increase in receivables to
DKK 2,368 million was attributable to higher
revenue in 2007 compared with the year before
and a DKK 248 million receivable from
Takeda concerning the alliance formed.
Equity rose to DKK 7,185 million, which was
an increase of DKK 420 million, or 6%. Acquisition
of treasury shares and dividends paid reduced
equity by a total of DKK 1,516 million
in 2007.
Non-current liabilities were up by DKK 331
million to DKK 2,502 million. The increase was
due to a mortgage loan, and combined with
the share buyback programme it reflects
Lundbeck’s aim of optimising the Group’s
capital structure.
Cash flow statement
Cash flows from operating activities improved
by DKK 1,311 million in 2007 compared with
the year before. The improvement was attributable
to a higher profit from operations and
positive trends in working capital relative to
2006.
Net investments in intangible assets and property,
plant and equipment were DKK 739 million,
which was in line with 2006. The investments
were driven primarily by maintenance
and expansion of the Group’s facilities in Denmark
and the USA.
Net investments in financial assets were DKK
345 million against a net sale of DKK 1,007
million in 2006. Investments in financial assets
consist primarily of buying and selling of
Danish listed bonds, which are recognised as
investments in the cash flow statement as
from 2007. The comparative figures have been
restated.
Cash outflows from financing activities
amounted to DKK 1,012 million against an
outflow of DKK 901 million the year before
and were primarily affected by lower proceeds
from loans in 2007, which were however offset
by lower share buybacks than in 2006.
The Group generated a net cash inflow of DKK
597 million compared with an inflow of DKK
732 million in 2006.
62

Income statement
for the year ended 31 December 2007
Parent Parent Group Group
2006 2007 2007 2006
DKKm DKKm Notes DKKm DKKm
5,976.7 7,741.7 Revenue 2, 24 10,984.9 9,221.0
1,597.1 2,239.2 Cost of sales 3, 4 2,197.8 1,645.8
4,379.6 5,502.5 Gross profit 8,787.1 7,575.2
359.9 262.3 Distribution costs 3, 4 2,408.7 2,418.7
670.1 798.7 Administrative expenses 3-5 1,513.9 1,418.9
3,349.6 4,441.5 Profit before research and development costs 4,864.5 3,737.6
2,063.5 2,232.9 Research and development costs 3, 4 2,187.2 1,957.7
1,286.1 2,208.6 Profit before other operating items 2,677.3 1,779.9
7.9 7.2 Other operating income 38.5 26.1
17.0 9.1 Other operating expenses 20.4 22.0
1,277.0 2,206.7 Profit from operations 2,695.4 1,784.0
75.6 120.2 Income from investments in subsidiaries 9 - -
- (57.0) Income from investments in associates 10 (84.0) (87.4)
213.9 225.0 Financial income 6 337.1 250.1
212.4 213.4 Financial expenses 6 387.0 313.9
1,354.1 2,281.5 Profit before tax 2,561.5 1,632.8
386.4 530.8 Tax on profit for the year 7 792.0 525.9
967.7 1,750.7 Net profit for the year 1,769.5 1,106.9
Proposed distribution
333.1 530.6 Proposed dividend for the year 14 530.6 333.1
634.6 1,220.1 Transferred to distributable reserves 1,238.9 773.8
967.7 1,750.7 1,769.5 1,106.9
Earnings per share (EPS) (DKK) 25 8.63 5.24
Diluted earnings per share (DEPS) (DKK) 25 8.63 5.23
Proposed dividend per share (DKK) 14 2.56 1.57
63

Balance sheet at 31 December 2007
Assets
Parent Parent Group Group
2006 2007 2007 2006
DKKm DKKm Notes DKKm DKKm
- - Goodwill 882.2 882.2
410.4 363.8 Patent rights 312.8 342.7
287.5 405.4 Product rights 467.9 352.5
- - Other rights 7.7 5.6
72.7 118.9 IT projects 124.6 78.1
- - Process projects 5.1 11.1
105.1 84.8 Projects in progress 94.5 108.5
875.7 972.9 Intangible assets 8 1,894.8 1,780.7
1,822.8 1,804.7 Land and buildings 2,047.6 2,126.6
206.9 256.3 Plant and machinery 393.2 592.3
263.4 246.6 Other fixtures and fittings, tools and equipment 334.4 364.0
459.1 541.0 Prepayments and plant and equipment in progress 599.5 583.8
2,752.2 2,848.6 Property, plant and equipment 8 3,374.7 3,666.7
2,732.0 2,735.1 Investments in subsidiaries 9 - -
154.4 97.4 Investments in associates 10 82.9 166.9
745.9 609.0 Receivables from subsidiaries 11 - -
19.2 - Receivables from associates 11 - 19.2
125.7 149.1 Available-for-sale financial assets 11 150.7 127.6
41.7 31.5 Other receivables 11 60.6 63.6
- - Value of deferred tax assets 16 162.7 279.1
3,818.9 3,622.1 Financial assets 456.9 656.4
7,446.8 7,443.6 Non-current assets 5,726.4 6,103.8
315.7 364.3 Raw materials and consumables 76.3 161.6
576.9 346.0 Work in progress 676.4 770.4
159.8 154.2 Manufactured goods and goods for resale 171.6 223.0
1,052.4 864.5 Inventories 12 924.3 1,155.0
256.9 179.9 Trade receivables 13 1,560.1 1,463.2
407.3 485.9 Receivables from subsidiaries - -
- - Income taxes receivable 36.8 56.8
249.0 486.9 Other receivables 13 582.2 359.4
60.4 133.2 Prepayments 188.5 114.6
973.6 1,285.9 Receivables 2,367.6 1,994.0
1,182.0 1,517.3 Securities 29 1,535.7 1,201.6
772.4 1,389.2 Cash 29 1,772.0 1,176.6
3,980.4 5,056.9 Current assets 6,599.6 5,527.2
11,427.2 12,500.5 Assets 12,326.0 11,631.0
64

Balance sheet at 31 December 2007
Equity and liabilities
Parent Parent Group Group
2006 2007 2007 2006
DKKm DKKm Notes DKKm DKKm
1,060.8 1,036.4 Share capital 14 1,036.4 1,060.8
121.6 223.9 Share premium 14 223.9 121.6
5,423.1 5,750.1 Retained earnings 5,924.6 5,582.4
6,605.5 7,010.4 Equity 7,184.9 6,764.8
- - Pension obligations and similar obligations 15 188.7 204.5
251.7 176.9 Deferred tax liabilities 16 327.3 431.5
84.2 80.4 Provisions 17 92.4 92.7
1,424.8 1,858.6 Mortgage debt 18 1,858.6 1,427.8
12.6 31.5 Employee bonds 31.5 12.6
886.7 1,067.3 Payables to subsidiaries - -
1.1 1.2 Other long-term debt 3.5 1.8
2,661.1 3,215.9 Non-current liabilities 2,502.0 2,170.9
- 311.2 Provisions 3,17 15.4 2.4
2.8 - Bank debt 18 4.4 55.0
2.1 2.1 Mortgage debt 18 5.1 5.1
555.6 579.6 Trade payables 773.9 743.2
394.6 296.4 Payables to subsidiaries - -
94.2 6.2 Income taxes 72.2 130.0
117.1 126.8 VAT, taxes and holiday pay commitments 268.0 251.8
138.6 112.1 Other payables 660.3 652.2
854.7 839.5 Prepayments from Forest 839.5 854.7
0.9 0.3 Deferred income 0.3 0.9
2,160.6 2,274.2 Current liabilities 2,639.1 2,695.3
4,821.7 5,490.1 Liabilities 5,141.1 4,866.2
11,427.2 12,500.5 Equity and liabilities 12,326.0 11,631.0
65

Statement of changes in equity
at 31 December 2007 – Group
Share Share Retained Equity
capital premium earnings Group 1
2007 DKKm DKKm DKKm DKKm
Equity at 01.01.2007 1,060.8 121.6 5,582.4 6,764.8
Adjustment, deferred gains/losses, hedging - - 157.9 157.9
Realised gains/losses, hedging - - (122.0) (122.0)
Realised gains/losses, trading (transferred from hedging) - - (0.4) (0.4)
Fair value adjustment of available-for-sale financial assets - - 12.8 12.8
Tax on equity entries - - (5.5) (5.5)
Recognised directly in equity - - 42.8 42.8
Net profit for the year less proposed dividend - - 1,238.9 1,238.9
Proposed dividend for the financial year - - 530.6 530.6
Net income - - 1,812.3 1,812.3
Distribution of dividend, gross - - (333.8) (333.8)
Distribution of dividend, treasury shares - - 9.2 9.2
Capital increase through exercise of warrants 5.0 102.3 - 107.3
Capital reduction (29.4) - - (29.4)
Nominal value of cancelled treasury shares - - 29.4 29.4
Buyback of treasury shares - - (1,191.3) (1,191.3)
Incentive plans - - 16.4 16.4
Other transactions (24.4) 102.3 (1,470.1) (1,392.2)
Equity at 31.12.2007 1,036.4 223.9 5,924.6 7,184.9
2006
Equity at 01.01.2006 1,136.1 69.5 6,286.1 7,491.7
Adjustment, deferred gains/losses, hedging - - 173.5 173.5
Realised gains/losses, hedging - - 41.3 41.3
Realised gains/losses, trading (transferred from hedging) - - 33.2 33.2
Exchange adjustment, associates - - (0.5) (0.5)
Fair value adjustment of available-for-sale financial assets - - (31.5) (31.5)
Tax on equity entries - - (68.9) (68.9)
Recognised directly in equity - - 147.1 147.1
Net profit for the year less proposed dividend - - 773.8 773.8
Proposed dividend for the financial year - - 333.1 333.1
Net income - - 1,254.0 1,254.0
Distribution of dividend, gross - - (477.2) (477.2)
Distribution of dividend, treasury shares - - 32.7 32.7
Capital increase through exercise of warrants 2.6 52.1 - 54.7
Capital reduction (77.9) - - (77.9)
Nominal value of cancelled treasury shares - - 77.9 77.9
Buyback of treasury shares - - (1,591.1) (1,591.1)
Other transactions (75.3) 52.1 (1,957.7) (1,980.9)
Equity at 31.12.2006 1,060.8 121.6 5,582.4 6,764.8
1) The Group’s equity equals equity, H. Lundbeck A/S’ shareholders.
66

Statement of changes in equity
at 31 December 2007 – Parent company
Share Share Retained Equity
capital premium earnings Parent
2007 DKKm DKKm DKKm DKKm
Equity at 01.01.2007 1,060.8 121.6 5,423.1 6,605.5
Adjustment, deferred gains/losses, hedging - - 157.9 157.9
Realised gains/losses, hedging - - (122.0) (122.0)
Realised gains/losses, trading (transferred from hedging) - - (0.4) (0.4)
Fair value adjustment of available-for-sale financial assets - - 12.8 12.8
Tax on equity entries - - (8.9) (8.9)
Recognised directly in equity - - 39.4 39.4
Net profit for the year less proposed dividend - - 1,220.1 1,220.1
Proposed dividend for the financial year - - 530.6 530.6
Net income - - 1,790.1 1,790.1
Distribution of dividend, gross - - (333.8) (333.8)
Distribution of dividend, treasury shares - - 9.2 9.2
Capital increase through exercise of warrants 5.0 102.3 - 107.3
Capital reduction (29.4) - - (29.4)
Nominal value of cancelled treasury shares - - 29.4 29.4
Buyback of treasury shares - - (1,191.3) (1,191.3)
Incentive plans - - 23.4 23.4
Other transactions (24.4) 102.3 (1,463.1) (1,385.2)
Equity at 31.12.2007 1,036.4 223.9 5,750.1 7,010.4
2006
Equity at 01.01.2006 1,136.1 69.5 6,262.4 7,468.0
Adjustment, deferred gains/losses, hedging - - 173.5 173.5
Realised gains/losses, hedging - - 41.3 41.3
Realised gains/losses, trading (transferred from hedging) - - 33.2 33.2
Fair value adjustment of available-for-sale financial assets - - (31.5) (31.5)
Tax on equity entries - - (69.4) (69.4)
Recognised directly in equity - - 147.1 147.1
Net profit for the year less proposed dividend - - 634.6 634.6
Proposed dividend for the financial year - - 333.1 333.1
Net income - - 1,114.8 1,114.8
Distribution of dividend, gross - - (477.2) (477.2)
Distribution of dividend, treasury shares - - 32.7 32.7
Capital increase through exercise of warrants 2.6 52.1 - 54.7
Capital reduction (77.9) - - (77.9)
Nominal value of cancelled treasury shares - - 77.9 77.9
Buyback of treasury shares - - (1,591.1) (1,591.1)
Incentive plans - - 3.6 3.6
Other transactions (75.3) 52.1 (1,954.1) (1,977.3)
Equity at 31.12.2006 1,060.8 121.6 5,423.1 6,605.5
67

Cash flow statement
1 January – 31 December 2007
Parent Parent Group Group
2006 2007 2007 2006
DKKm DKKm Notes DKKm DKKm
1,277.0 2,206.7 Profit from operations 2,695.4 1,784.0
465.6 774.8 Adjustments 26 929.1 377.8
(424.8) 154.4 Working capital changes 27 (100.8) (352.2)
1,317.8 3,135.9 Cash flows from operations before net financials 3,523.7 1,809.6
123.9 164.6 Financial receipts 165.8 137.6
(151.9) (150.6) Financial payments (150.2) (178.4)
1,289.8 3,149.9 Cash flows from ordinary activities 3,539.3 1,768.8
(226.6) (619.4) Income tax paid for the year (784.4) (382.0)
46.9 (83.1) Income tax paid for previous years (50.1) 7.2
1,110.1 2,447.4 Cash flows from operating activities 2,704.8 1,394.0
(32.4) (3.1) Capital contributions to subsidiaries 9 - -
75.6 120.2 Dividends from subsidiaries 9 - -
(61.8) 6.4 Change in payables to/receivables from subsidiaries - -
- - Business combinations 28 - 3.1
(19.2) (12.0) Change in payables to/receivables from associates 11 (12.0) (19.2)
(175.3) (254.1) Investments in intangible assets (273.9) (190.5)
- - Sale of intangible assets 1.1 -
(326.0) (388.1) Investments in property, plant and equipment (474.2) (567.1)
- 4.6 Sale of property, plant and equipment 8.5 5.6
(3,555.6) (843.7) Investments in financial assets (843.7) (3,556.0)
4,554.8 497.8 Sale of financial assets 499.0 4,562.6
460.1 (872.0) Cash flows from investing activities (1,095.2) 238.5
1,570.2 1,575.4 Cash flows from operating and investing activities 1,609.6 1,632.5
1,059.2 433.2 Loan proceeds 431.1 1,073.6
(2.1) (2.1) Repayments of loans (53.7) (6.1)
(1,591.1) (1,191.3) Buyback of treasury shares (1,191.3) (1,591.1)
12.6 18.9 Employee bonds 18.9 12.6
54.7 107.3 Capital contributions 107.3 54.7
(444.5) (324.6) Dividends paid in the financial year (324.6) (444.5)
(911.2) (958.6) Cash flows from financing activities (1,012.3) (900.8)
659.0 616.8 Change in cash 597.3 731.7
113.4 772.4 Cash at 01.01. 1,176.6 458.1
- - Unrealised exchange differences for the year (1.9) (13.2)
659.0 616.8 Change for the year 597.3 731.7
772.4 1,389.2 Cash at 31.12. 29 1,772.0 1,176.6
Interest-bearing net cash is composed as follows:
772.4 1,389.2 Cash 1,772.0 1,176.6
1,182.0 1,517.3 Securities 1,535.7 1,201.6
(2,330.1) (2,960.7) Interest-bearing debt (1,903.1) (1,502.3)
(375.7) (54.2) Interest-bearing net cash at 31.12. 1,404.6 875.9
68

Notes
to the financial statements
70 Note 1 Accounting policies
77 Note 2 Revenue
78 Note 3 Staff costs
82 Note 4 Amortisation and depreciation
83 Note 5 Audit fees
84 Note 6 Net financials
85 Note 7 Tax on profit for the year
86 Note 8 Intangible assets and property, plant and equipment
91 Note 9 Investments in subsidiaries
92 Note 10 Investments in associates
93 Note 11 Other investments and other receivables
94 Note 12 Inventories
94 Note 13 Trade receivables and other receivables
95 Note 14 Share capital
96 Note 15 Pension obligations and similar obligations
99 Note 16 Deferred tax liabilities
101 Note 17 Provisions
101 Note 18 Mortgage and bank debt
104 Note 19 Treasury shares
104 Note 20 Contractual obligations
105 Note 21 Contingent liabilities
106 Note 22 Financial instruments
111 Note 23 Related parties
112 Note 24 Segment information
112 Note 25 Earnings per share
113 Note 26 Adjustments
113 Note 27 Working capital changes
113 Note 28 Business combinations
114 Note 29 Cash resources
115 Note 30 Releases from H. Lundbeck A/S in 2007
69

1
Notes
1. Accounting policies
The annual report of H. Lundbeck A/S, comprising
the financial statements of the parent company
and the consolidated financial statements, is presented
in accordance with International Financial
Reporting Standards as adopted by the EU and
additional Danish disclosure requirements for annual
reports of listed companies, including the
disclosure requirements imposed by the OMX
Nordic Exchange Copenhagen on annual reports
of listed companies and the Danish Statutory
Order on Adoption of IFRS. The annual report also
complies with the International Financial Reporting
Standards issued by the International Accounting
Standards Board (IASB).
The annual report is presented in Danish kroner
(DKK), which also is the functional currency of the
Group.
Changes in accounting policies
The annual report for 2007 is presented in accordance
with the new and revised standards (IFRS/
IAS) and interpretations (IFRIC) which apply for
the financial year. This has not resulted in any
changes in accounting policies. However, the implementation
of IFRS 7 Financial instruments: Disclosure
and related changes to IAS 1 Presentation
of financial statements has resulted in additional
disclosures in the annual report on financial instruments
and capital structure.
The presentation of short-term securities has
changed so that they are now recognised in cash
flows from investing activities. Comparative figures
have been restated.
Future IFRS changes
At the date of the publication of this annual report,
a number of new and amended standards
and interpretations have not yet entered into
force or been adopted by the EU, and are therefore
not included in this annual report.
Such future IFRS changes are not expected to
materially affect the annual report, except for the
additional disclosure requirements that follow
from the implementation of IFRS 8 Operating
segments, which will be implemented in the
annual report for 2009 at the latest.
Accounting policies critical to financial
reporting
Management believes that the following accounting
policies are most important to the Group’s financial
reporting.
Income from Forest
The invoiced price is agreed between Forest and
Lundbeck at the beginning of each calendar year.
The price is calculated on the basis of expectations
for the coming year’s development in the
elements included in the royalty calculation. These
elements are: Forest’s net selling prices, quantities
used in sold products, quantities used in samples,
quantities wasted during processing, and the various
dosage levels of the finished goods. Income
from sales of citalopram and escitalopram to Forest
is recognised as follows:
• Sales of both citalopram and escitalopram are
invoiced at the agreed price but only a proportion
(the minimum price) of the invoiced price
is recognised as income at the time of delivery.
• The difference between the invoiced price and
the minimum price of Forest’s inventories is recorded
in the balance sheet as prepayments.
• After the end of each quarter, the final settlement
price is calculated. The difference between
the final calculated settlement price and
the invoiced price is recognised as income and
settled with Forest, and the difference between
the invoiced price and the minimum price recorded
in the balance sheet as prepayments at
the time of delivery is recognised as income.
License income and income from research
collaborations
Revenue includes license income and royalties
from outlicensed products as well as non-refundable
down-payments and milestone payments
relating to research collaborations, which are recognised
as income in the income statement when
the rights are obtained, subject to the following
criteria being met:
• The payment relates to research results already
obtained.
• The most significant risks and benefits associated
with the asset sold are transferred to the
buyer.
• Lundbeck does not retain management control
of the asset sold.
• Revenue from the individual payments in an
overall agreement can be clearly separated and
calculated reliably at fair value.
• It is probable that Lundbeck will receive payment
for the asset sold.
• There are no further delivery obligations for
Lundbeck concerning the asset sold.
Development costs
Development costs are capitalised if the criteria
for such capitalisation are deemed to have been
met and it is found to be probable that future
earnings will cover the development costs. Due to
a very long development period and significant
uncertainty in relation to the development of new
products, in the opinion of the Group, development
costs should not normally be capitalised in
the balance sheet until the development of the
product has been completed and all the necessary
public registration and marketing approvals have
been obtained. Otherwise, development costs will
be recognised in the income statement as they
are incurred.
Recognition and measurement
Assets are recognised in the balance sheet if it is
probable that future economic benefits will flow
to the Group and that the value of the asset can
be measured reliably.
Liabilities are recognised in the balance sheet if
they are probable and can be measured reliably.
On initial recognition assets and liabilities are
measured at cost or fair value. Subsequently assets
and liabilities are measured as described for
each item below.
Certain financial assets and liabilities are measured
at amortised cost, implying the recognition
of a constant effective rate of interest to maturity.
Amortised cost is calculated as original cost less
any repayments and plus/less the cumulative
amortisation of the difference between cost and
the nominal amount.
Recognition and measurement take into consideration
gains, losses and risks that arise before the
time of presentation of the annual report and that
confirm or invalidate matters existing at the balance
sheet date.
70

Income is recognised in the income statement as
earned and includes value adjustments of financial
assets and liabilities measured at fair value or
amortised cost. In addition, expenses incurred to
generate the income for the year are recognised,
including depreciation, amortisation, impairment
losses and provisions as well as reversals of
amounts previously recognised in the income
statement as a result of changed accounting estimates.
Consolidated financial statements
The consolidated financial statements comprise
the parent company H. Lundbeck A/S and subsidiaries
controlled by the parent company. Control is
achieved where the parent company directly or
indirectly holds more than 50% of the voting
rights or is otherwise able to exercise or actually
exercises control.
Companies in which the Group holds between
20% and 50% of the voting rights and exercises
significant influence but not control are regarded
as associates.
Basis of consolidation
The consolidated financial statements are prepared
on the basis of the financial statements of
the parent company and the subsidiaries, which
are all prepared in accordance with the Group’s
accounting policies.
The consolidated financial statements are prepared
by adding together uniform items and eliminating
intra-group income and expenses, investments,
balances and dividends as well as realised
and unrealised gains and losses on transactions
between the consolidated companies. Account is
taken of the tax effect of these eliminations.
Business combinations
Newly acquired or newly formed companies are
recognised in the consolidated financial statements
from the date of acquisition. Companies
sold or discontinued are recognised in the consolidated
income statement up to the time of sale
or discontinuance. Expected divestment costs are
included in the calculation of gains or losses.
Newly acquired subsidiaries are accounted for using
the purchase method of accounting, according
to which the identifiable assets, liabilities and
contingent liabilities of the newly acquired companies
are measured at fair value at the time of
acquisition. Account is taken of the tax effect of
the revaluations made.
The cost of a company is the fair value of the
consideration paid plus costs directly attributable
to the business combination.
Positive differences (goodwill) between the cost
of the acquisition and the fair value of the acquired
identifiable assets, liabilities and contingent
liabilities are recognised under intangible assets.
Negative differences (negative goodwill)
between the cost of the acquisition and the fair
value of the acquired identifiable assets, liabilities
and contingent liabilities are recognised in the income
statement at the time of acquisition.
Minority interests are recognised at the time of
acquisition at the proportionate share of the fair
value of the acquired identifiable assets, liabilities
and contingent liabilities.
Goodwill arising from acquired companies is adjusted
until the end of the year following acquisition
if additional information about the fair value
at the time of acquisition of assets, liabilities and
contingent liabilities acquired is obtained after
acquisition. However, goodwill will not be recognised
by an amount exceeding the expectations
of future income from the acquiree.
Goodwill and adjustments to fair value in connection
with the acquisition of independent foreign
entities (subsidiaries or associates) are accounted
for as assets and liabilities in the acquiree and
translated at the exchange rates at the balance
sheet date.
Gains or losses on disposal or discontinuance of
subsidiaries and associates
Gains or losses on the disposal or discontinuance
of subsidiaries and associates are calculated as
the difference between the selling price or the
discontinuance amount and the carrying amount
of net assets at the time of sale as well as anticipated
expenses relating to sale or discontinuance.
Minority interests
The subsidiaries’ items are fully consolidated in
the consolidated financial statements. Minority
interests’ proportionate share of the subsidiaries’
results and equity is shown as separate items in
the income statement and in equity.
Translation of foreign currency
On initial recognition, transactions denominated
in foreign currencies are translated at standard
rates which equal the actual exchange rates at
the transaction date. Exchange differences arising
between the rate at the transaction date and the
rate at the date of payment are recognised in the
income statement as net financials.
Receivables, payables and other monetary items
denominated in foreign currencies that have not
been settled at the balance sheet date are translated
at the exchange rates at the balance sheet
date. The difference between the exchange rates
at the balance sheet date and the rates at the
time the receivable or payable is created or recognised
in the latest annual report is recognised in
the income statement under net financials.
Non-monetary assets acquired in foreign currencies
are translated at the exchange rates at the
time of acquisition.
Where foreign subsidiaries are regarded as an integral
part of the parent’s activities, the transactions
in the subsidiaries will be accounted for as if
they had been executed in the parent company.
On recognition of foreign subsidiaries, monetary
items are translated at the exchange rates at the
balance sheet date. Non-monetary items, including
goodwill in integrated entities, are translated
at the exchange rates at the time of acquisition
or at the time of any subsequent revaluation or
writedown of the asset. Income statement items
are translated at average exchange rates for the
year which approximate the actual exchange
rates at the transaction date. However, items
derived from non-monetary items are translated
at the historical exchange rates that apply to the
non-monetary item.
Exchange differences arising from the translation
of both the balance sheets and the income statements
of the foreign subsidiaries are recognised in
the Group’s income statement as net financials.
When recognising foreign associates that use a
reporting currency different from that used by the
parent company, assets and liabilities are translated
at the exchange rates at the balance sheet
date, while the income statement is translated at
average exchange rates for the year.
71

1
Notes
Exchange differences arising from the translation
of foreign associates are recognised in the Group
directly in equity.
Derivative financial instruments
Forward exchange contracts and other derivative
financial instruments are initially recognised in
the balance sheet at fair value on the value date
and are subsequently remeasured at fair value at
the balance sheet date. Positive and negative fair
values are included in other receivables and other
payables respectively.
Changes in the fair value of derivative financial
instruments classified as hedging instruments and
meeting the criteria for hedging future cash flows
are recognised directly in equity. Income and
expenses related to such hedging transactions are
transferred from equity on realisation of the
hedged item and included in the same item as
the hedged item.
Changes in the fair value of derivative financial
instruments classified as hedging instruments and
meeting the criteria for hedging the fair value of a
recognised asset or liability are recognised in the
income statement together with changes in the
value of the hedged asset or liability.
For derivative financial instruments which do not
qualify for hedge accounting, changes in fair value
are recognised in the income statement under net
financials as they arise.
Changes in the fair value of derivative financial
instruments used to hedge net investments in
independent foreign subsidiaries or associates
and which otherwise meet the relevant criteria
are recognised directly in equity.
Income statement
Revenue
Revenue comprises invoiced sales for the year less
returned goods and revenue-based taxes consisting
mainly of value added taxes and foreign revenue-based
drug taxes.
Sales subject to a price adjustment clause are included
in revenue at the time of delivery at the
minimum price. The balance of the invoiced price
is recognised in the balance sheet as a prepayment
and is subsequently included in revenue
when the price has been finally determined. The
price is finally determined as the product is resold
by the customer.
Moreover, revenue includes license income and
royalties from outlicensed products as well as
non-refundable downpayments and milestone
payments relating to research collaborations.
In addition, income from the reduction of investments
in research enterprises, considered to represent
the sale of research results, is recognised
as revenue.
See Accounting policies critical to financial reporting
on page 70 for a description of the accounting
treatment of income from Forest and of license
income and income from research collaborations.
Cost of sales
Cost of sales comprises the cost of goods sold.
Cost includes the cost of raw materials, consumables
and goods for resale, direct labour and indirect
costs of production, including operating
costs, amortisation/depreciation and impairment
losses relating to manufacturing facilities. Cost of
sales moreover includes expenses in connection
with quality certification of sold products and any
writedown to net realisable value of unsaleable
and slow moving items.
Distribution costs
Distribution costs comprise expenses incurred in
connection with the distribution of the Group’s
products sold during the year and in connection
with sales campaigns, etc. launched during the
year under review, including direct distribution
and marketing costs, salaries etc. for the sales and
marketing functions, as well as amortisation/
depreciation and other indirect costs.
Administrative expenses
Administrative expenses comprise expenses incurred
during the year for the management and
administration of the Group, including expenses in
connection with the administrative functions,
management, office premises and office expenses,
as well as amortisation/depreciation and other
indirect costs.
Research and development costs
Research and development costs comprise expenses
incurred during the year in connection
with the Group’s research and development functions,
including wages and salaries, amortisation/
depreciation and other indirect costs as well as
costs relating to research and development collaborations
on in-licensed products.
Research costs are always recognised in the income
statement as they are incurred.
Development costs are capitalised if a number of
specific criteria for capitalising these costs are
deemed to have been met. Otherwise, development
costs will be recognised in the income
statement as they are incurred.
See Accounting policies critical to financial reporting
on page 70 for a description of conditions for
capitalising development costs.
Other operating income and expenses
Other operating income and expenses comprise
items of a secondary nature in relation to the
Group’s activities.
Results of investments in subsidiaries and
associates in the parent company’s financial
statements
Dividends from subsidiaries and associates are
recognised in the parent company’s income statement
when the shareholder’s right to receive dividend
has been approved, less any writedowns of
the equity investments.
Results of investments in associates in the
consolidated financial statements
The proportionate share of the results of associates
is recognised in the consolidated income
statement after tax and elimination of the proportionate
share of any intra-group gains and
losses and after deduction of any writedowns of
the equity investments.
Net financials
Net financials include interest income and expenses
which are recognised in the income statement
at the amounts relating to the financial
year. Value adjustments of financial assets and
realised and unrealised gains and losses on investments,
items denominated in foreign currencies
as well as forward contracts and other derivative
financial instruments not used for hedging purposes
according to the hedge accounting principle
are also included in net financials.
72

Tax
As from 2005, the Danish companies of the
Group are jointly taxed with the parent company
LFI a/s and are included in the Danish provisional
tax scheme. The current Danish income tax liability
is allocated among the companies of the
Danish tax pool in proportion to their taxable
income with due consideration to foreign taxes
paid.
Tax for the year, which consists of the year’s current
tax and the change in deferred tax, is recognised
in the income statement as regards the
amount that can be attributed to the net profit or
loss for the year and directly in equity as regards
the amount that can be attributed to equity
items. Exchange rate adjustments of deferred tax
are recognised as part of the movements in deferred
tax.
Balance sheet
Intangible assets
Goodwill
On initial recognition, goodwill is measured and
recognised as the excess of the cost of the acquired
enterprise over the fair value of the acquired
assets, liabilities and contingent liabilities.
On recognition of goodwill, the goodwill amount
is allocated to those of the Group’s activities that
generate separate cash flows (cash-generating
units). The determination of cash-generating units
is based on the Group’s management structure
and the internal financial management and reporting.
Goodwill is not amortised, but is tested for impairment
at least once a year.
Development projects
Clearly defined and identifiable development
projects are recognised as intangible assets where
the technical rate of utilisation of the project, the
availability of adequate resources and a potential
future market or development opportunity in the
company can be demonstrated and where the intention
is to manufacture, market or use the
project if the cost can be measured reliably and it
is probable that the future earnings can cover
production and selling expenses, administrative
expenses as well as the development costs. Other
development costs are recognised in the income
statement as the costs are incurred.
After completion of the development work development
costs are amortised on a straight-line
basis over the expected useful life, however with
a maximum period of 20 years. For development
projects protected by intellectual property rights,
the maximum amortisation period is the remaining
term of the rights concerned, however with a
maximum period of 20 years.
Other intangible assets
Acquired intellectual property rights in the form of
product rights, patents, licenses and software are
measured at cost less accumulated amortisation.
The cost of software comprises the cost of planning,
including direct labour and costs directly attributable
to the project. Product rights are amortised on
a straight-line basis over the economic lives of the
underlying products. Patents are amortised over the
remaining patent period, and licenses are amortised
over the period of agreement, however with a maximum
period of 20 years.
Gains and losses on the disposal of development
projects, patents and licenses are measured as the
difference between the selling price less cost to
sell and the carrying amount at the time of sale.
Property, plant and equipment
Property, plant and equipment are measured at
cost less accumulated depreciation and accumulated
impairment losses. Land is not depreciated.
Cost includes the costs of purchase and expenses
directly attributable to the purchase until the asset
is ready for use. In the case of assets manufactured
by the company, cost includes expenses directly
attributable to the manufacture of the
asset, including materials, components, thirdparty
suppliers and labour.
Interest relating to property, plant and equipment
during the period of building and erection is not
capitalised.
Property, plant and equipment are depreciated on
a straight-line basis over the expected useful lives
of the assets, which are expected to be as follows:
Buildings
Installations
Plant and machinery
Other fixtures and fittings,
tools and equipment
Leasehold improvements
30 years
10 years
3-10 years
3-10 years
max. 10 years
The depreciation base is cost less the estimated
residual value at the end of the expected useful
life. The cost of a total asset is divided into
smaller components that are depreciated separately
if such components have different useful
lives. Depreciation methods, useful lives and residual
values are reassessed annually.
Depreciation is recognised in the income statement
under cost of sales, distribution costs, administrative
expenses and research and development
costs, respectively.
The costs of maintaining property, plant and
equipment are recognised in the income statement
as they are incurred, either directly in the
income statement or as part of indirect costs of
production.
Costs incurred that increase the recoverable
amount of the asset concerned are added to the
asset’s cost as an improvement and are depreciated
over the expected useful life of the improvement.
Gains or losses on the disposal or retirement of
items of property, plant and equipment are calculated
as the difference between the carrying
amount and the selling price reduced by dismantling
expenses and cost to sell. Gains and
losses are recognised in the income statement
under the same items as the associated depreciation.
Impairment losses
The carrying amount of intangible assets and
property, plant and equipment is analysed in connection
with the preparation of the annual report
if there is an indication that the carrying amount
of an asset may exceed the expectations of future
income from the asset (recoverable amount). If
this analysis concludes that the future expected
net income from the asset will be lower than the
carrying amount, the carrying amount will be reduced
to the higher of fair value less cost to sell
and value in use. Impairment losses are recognised
in the income statement under the same
items as the associated depreciation or amortisation.
If the asset does not generate any cash flows independently
of other assets, the recoverable
amount is calculated for the smallest cash-generating
unit that includes the asset.
73

1
Notes
Goodwill is amortised through the income statement
in those cases where the carrying amount
exceeds the future net income expected from the
cash-generating unit to which the goodwill relates
(recoverable amount).
Investments in subsidiaries and associates in
the parent company’s financial statements
Investments in subsidiaries and associates are
measured at cost in the parent company’s financial
statements. Where the recoverable amount of
the investments is lower than cost, the investments
are written down to this lower value. In
addition, cost is written down to the extent that
dividend distributed exceeds the accumulated
earnings in the company since the acquisition date.
Investments in associates in the consolidated
financial statements
Investments in associates are recognised and
measured in the consolidated financial statements
according to the equity method, which entails
that the investments are measured in the
balance sheet at the proportionate share of the
associate’s net asset value calculated in accordance
with the Group’ accounting policies less or
plus unrealised intra-group gains and losses and
plus the carrying amount of goodwill.
The proportionate share of the results of the associate
is recognised in the income statement after
tax and elimination of the proportionate share
of any intra-group gains and losses and after deduction
of any writedowns of the investments.
Consolidated equity includes the proportionate
share of all transactions and events recognised directly
in the equity of the associate.
Investments in associates with a negative carrying
amount are recognised at DKK 0. Receivables
and other long-term financial assets considered
to form part of the overall investment in the associate
are written down by any remaining negative
net asset value. Trade receivables and other
receivables are written down to the extent they
are deemed to be irrecoverable. A provision to
cover the remaining negative net asset value will
only be made if the Group has a legal or constructive
obligation to cover the liabilities of the relevant
associate.
Other financial assets
Other equity investments that are included in the
Group’s documented investment strategy in accordance
with the fair value option of IAS 39
Financial instruments: Recognition and measurement
are recognised on the basis of the value
date and are measured at market price or estimated
fair value at the balance sheet date. Both
realised and unrealised gains and losses are recognised
in the income statement under net financials.
On initial recognition, other investments outside
the scope of the documented investment strategy
are available for sale and measured at fair value
with the addition of directly attributable costs.
Other investments are subsequently measured at
fair value at the balance sheet date, and changes
to the fair value are recognised in equity with the
exception of impairment losses and dividends,
which are taken to the income statement. When
securities are sold or settled, the accumulated fair
value adjustments are recognised in the income
statement.
Other receivables with a fixed maturity are measured
at amortised cost less impairment losses as
a result of diminution in value. Other receivables
without a fixed maturity are recognised at cost.
Inventories
Raw materials, packaging and goods for resale are
measured at the latest known cost at the balance
sheet date, which equals cost computed according
to the FIFO method. The cost of raw materials,
packaging and goods for resale includes the costs
of purchase plus costs incurred in bringing the inventories
to their present location and condition.
Work in progress and finished goods manufactured
by the company are measured at cost, i.e.
the cost of raw materials, consumables, direct labour
and indirect costs of production. Indirect
costs of production include materials and labour
as well as maintenance of and depreciation on
the machines, factory buildings and equipment
used in the manufacturing process as well as the
cost of factory management and administration.
Indirect production overheads are allocated based
on the normal capacity of the production plant.
Writedown to net realisable value is made if it is
lower than cost. The net realisable value of inventories
is calculated as the selling price less costs
of conversion and costs incurred to execute the
sale and it is determined having regard to marketability,
obsolescence and expected selling price
movements.
Receivables
Short-duration receivables arising in the Group’s
normal course of business are measured at nominal
value less impairment losses to counter the
risk of loss calculated on the basis of an individual
evaluation.
Other securities
Other securities, including the bond portfolio, that
are included in the Group’s documented investment
strategy and recognised under current assets
are recognised on the basis of the value date
and are measured at the market price at the balance
sheet date. Both realised and unrealised
gains and losses are recognised in the income
statement under net financials.
On initial recognition, other securities outside the
scope of the documented investment strategy are
measured at fair value with the addition of directly
attributable costs. They are subsequently
measured at fair value at the balance sheet date,
and changes to the fair value are recognised in
equity and dividends are recognised in the income
statement. When securities are sold or
settled, the accumulated fair value adjustments
are recognised in the income statement.
The fair value is calculated according to official
stock exchange listings/OTC listings or estimated
fair value at the most recent round of capital
contributions.
Equity
Dividend
Proposed dividend is recognised as a liability at
the time of adoption of the dividend resolution at
the annual general meeting (the time of declaration).
Dividend expected to be paid for the year is
shown as a separate item in the statement of equity.
Treasury shares
Cost and selling prices of treasury shares as well
as dividends are recognised directly in retained
earnings under equity. Gains and losses on sales
are therefore not recognised in the income statement.
Other equity instruments
Cost and selling prices of other equity instruments,
including option premiums in connection
with option contracts for the purchase of treasury
shares, are recognised directly in retained earnings
under equity.
74

Share-based payment
Share-based incentive plans in which employees
may opt only to buy shares in the parent company
(equity schemes) are measured at the equity
instruments’ fair value at the date of grant
and recognised in the income statement under
staff costs when the employee obtains the right
to buy the shares. The balancing item is recognised
directly in equity.
Share-based incentive plans in which employees
have the difference between the agreed price and
the actual share price settled in cash are measured
at fair value at the date of grant and recognised
in the income statement under staff costs
when the final right of cash-settlement is obtained.
The incentive plans are subsequently remeasured
on each balance sheet date and upon
final settlement, and any changes in the fair value
of the plans are recognised in the income statement
under staff costs. The balancing item is recognised
under liabilities.
Pension obligations
The Group has entered into pension agreements
and similar agreements with most of the Group’s
employees.
Periodical payments to defined contribution plans
are recognised in the income statement at the
due date and any contributions payable are recognised
in the balance sheet under liabilities.
The present value of the Group’s liabilities relating
to future pension payments according to defined
benefit plans is measured on an actuarial basis at
intervals of not more than three years on the basis
of the pensionable period of employment up
to the time of the actuarial valuation. The Projected
Unit Credit Method is applied to determine
the present value. The present value is calculated
based on assumptions of the future developments
of salary, interest, inflation, mortality rates, disability
and other factors. Actuarial gains and losses
are recognised in the income statement as they
are calculated.
The present value of the liability according to defined
benefit plans is measured less the fair value
of the plan assets, and any net obligation is recognised
in the balance sheet under non-current liabilities.
Any net asset is recognised in the balance
sheet as a financial asset.
The year’s changes in the provisions relating to
defined benefit plans are recognised in the income
statement.
Income tax and deferred tax
Current tax liabilities and current tax receivables
are recognised in the balance sheet, computed as
tax calculated on the taxable income for the year,
adjusted for provisional taxes paid. Tax payments
for the jointly taxed companies of the Group are
settled with the parent company LFI a/s.
Deferred tax is recognised according to the balance
sheet liability method on all temporary differences
between the carrying amounts of assets
and liabilities and their tax base, except for temporary
differences arising either on initial recognition
of goodwill or initial recognition of a transaction
that is not a business combination and with
the temporary difference ascertained at the time
of the initial recognition affecting neither the financial
results nor the taxable income.
Deferred income tax is provided on temporary differences
arising on investments in subsidiaries and
associates, unless the parent company has a possibility
of controlling when the deferred tax is to
be realised and it is likely that the deferred tax will
not crystallise as current tax.
Deferred tax is calculated based on the planned
use of each asset and settlement of each liability,
respectively.
Deferred tax is measured by using the tax rates
and tax rules that, based on legislation in force or
in reality in force at the balance sheet date, are
expected to apply in the respective countries
when the deferred tax is expected to crystallise as
current tax. Changes in deferred tax as a result of
changed tax rates or tax rules are recognised in
the income statement.
Deferred tax assets, including the tax value of tax
loss carry-forwards, are recognised in the balance
sheet at the value at which the asset is expected
to be realised, either through a set-off against deferred
tax liabilities or as net assets to be offset
against future positive taxable income.
Deferred tax concerning recaptured losses in
jointly taxed foreign subsidiaries in previous years
is recognised to the extent a tax liability is expected
to arise in connection with future profits
or on the disposal of the asset.
Tax on equity items relating to deferred income
and expenses in connection with financial instruments,
treasury shares and options to purchase
treasury shares as well as payments concerning
share option plans and other share price based
plans is recognised in equity. However, changes in
deferred tax concerning the cost of share-based
payments are generally recognised in the income
statement.
Provisions
Provisions are recognised when the Group has a
legal or constructive obligation that arises from
past events and it is probable that an outflow of
financial resources will be required to settle the
obligation.
Return obligations imposed on the industry are
recognised in the balance sheet under provisions.
Debt
Mortgage debt and debt to credit institutions are
recognised at the time of the raising of the loan
at proceeds received less transaction costs paid.
In subsequent periods the financial liabilities are
measured at amortised cost, equivalent to the
capitalised value when the effective rate of interest
is used, so that the difference between the
proceeds and the nominal value is recognised in
the income statement over the loan period.
Debt included in the short-term financial liquidity
is also measured at amortised cost in subsequent
periods.
Other payables, which include trade payables,
payables to subsidiaries and associates, as well as
other debt are measured at amortised cost.
Cash flow statement
The consolidated cash flow statement is presented
according to the indirect method and
shows the composition of cash flows, divided into
operating, investing and financing activities respectively,
and the cash at the beginning and the
end of the year.
75

1-2
Notes
Cash flows from acquisitions and divestments of
companies are shown separately under cash flows
from investing activities. The cash flow statement
includes cash flows from acquired companies
from the date of acquisition and cash flows from
divested companies until the time of divestment.
Cash flows from operating activities are calculated
as the Group’s results before net financials,
adjusted for non-cash operating items, working
capital changes, financial items paid and received
and income taxes paid.
Cash flows from investing activities include payments
in connection with purchases and sales of
intangible assets, property, plant and equipment
and financial assets, including equity investments
in companies. Also included are securities classified
as current assets.
Cash flows from financing activities include payments
to and from shareholders and related expenses
as well as the raising of and repayments
on mortgage debt and other non-current liabilities.
Cash comprises cash less short-term bank debt
falling due on demand.
Cash flows denominated in foreign currencies, including
cash flows in foreign subsidiaries, are
translated at the average exchange rates during
the year because they approximate the actual
rates at the date of payment. Cash at year-end is
translated at the rates at the balance sheet date,
and the effect of exchange rate changes on cash
is shown as a separate item in the cash flow
statement.
Segment reporting
The Group’s activities are exclusively in the business
segment of ‘pharmaceuticals for the treatment
of illnesses in the field of CNS’. Revenue,
segment assets and additions to intangible assets
and property, plant and equipment in the segment
are disclosed within the secondary geographical
segments. Segment information is provided
in accordance with the Group’s accounting
policies, risks and internal financial management
policies.
Segment assets are those operating assets that are
employed by a segment in its operating activity
and that are either directly attributable or can be
allocated to the segment on a reasonable basis.
Transactions between geographical segments are
made at market value.
Key figures
Financial key figures are calculated according
to Recommendations and Financial Ratios 2005
issued by the Danish Society of Financial Analysts.
For definitions of key figures see Summary for the
Group 2003 - 2007, pages 60-61.
76

2. Revenue
Parent Parent Group Group
2006 2007 2007 2006
DKKm DKKm DKKm DKKm
306.5 354.2 Denmark 73.7 238.5
3,189.8 3,695.3 Rest of Europe 5,504.4 5,103.2
1,957.6 2,652.0 USA 2,652.0 1,957.6
522.8 1,040.2 Rest of the world 2,754.8 1,921.7
5,976.7 7,741.7 Total 10,984.9 9,221.0
Including
5.5 419.9 Downpayments and milestone payments 419.9 5.5
489.0 657.6 Royalty 658.0 489.2
- - Income from reduction of shareholding in LifeCycle Pharma A/S - 154.6
Income from Forest in the USA
Income from sales of citalopram and escitalopram to Forest amounted to DKK 2,599.3 million in 2007 (DKK 1,930.0 million in 2006) based on the minimum price for
shipments made during the year and adjustments of prepayments concerning prior-year shipments. Prepayments, which is the difference between the invoiced price
and the minimum price, were DKK 839.5 million at 31 December 2007 (DKK 854.7 million in 2006). See Note 1 Accounting policies for a more elaborate description
hereof.
The invoiced price is agreed between Forest and Lundbeck at the beginning of each calendar year. The price is calculated on the basis of expectations for the coming
year’s development in the elements included in the royalty calculation. These elements are: Forest’s net selling prices, quantities used in sold products, quantities used
in samples, quantities wasted during processing, and the various dosage levels of the finished goods.
The agreement with Forest takes into consideration the expiry of the escitalopram patent protection in the USA in 2012. Prior to any launch of generic escitalopram,
Forest is expected to reduce its escitalopram inventories to a low level.
In connection with a launch of generic escitalopram, the agreement allows Forest to convert inventories of escitalopram into generic escitalopram. In connection with
any conversion of escitalopram inventories, the minimum price will be adjusted by any repayment to Forest of part of the recognised minimum payment.
Lundbeck monitors the development in Forest’s inventories and net selling price thoroughly, and regularly assesses the risk of the price adjustment clause and
repayment of the advance payment being applied. Lundbeck believes that there is no repayment risk at 31 December 2007.
Income from Takeda
Revenue for 2007 includes DKK 419.5 million concerning the strategic alliance formed with Takeda Pharmaceutical Company Limited. In September 2007,
Lundbeck sold know-how and license rights to develop and market new compounds for the treatment of mood and anxiety disorders. The compounds are
Lu AA21004 and Lu AA24530, which are in Phase III and Phase II clinical development, respectively, and the agreement includes an option under certain conditions
to include two other compounds. Lundbeck has received the preliminary payment in the form of a non-refundable downpayment of USD 40 million in September
2007, and a milestone payment of USD 40 million in December 2007.
In accordance with Lundbeck’s accounting policies, payments for the sale of know-how and license rights are recognised when such know-how and rights are
obtained pursuant to the agreement, and as the conditions for milestone and royalty payments are met, while the estimated value of the option of DKK 10.0 million
to include another two compounds in the collaboration is recognised in the balance sheet and taken to income at a later date.
77

3
Notes
3. Staff costs
Parent Parent Group Group
2006 2007 2007 2006
DKKm DKKm DKKm DKKm
Wages and salaries, etc.
893.1 947.6 Short-term staff benefits 2,255.0 2,148.6
85.1 89.4 Pension benefits 124.3 144.1
18.5 18.2 Other social security costs 303.6 296.2
996.7 1,055.2 Total 2,682.9 2,588.9
The year’s staff costs are analysed as follows
292.3 312.2 Cost of sales 384.5 363.7
8.5 8.0 Distribution costs 929.0 924.6
258.0 266.9 Administrative expenses 679.2 650.0
437.9 468.1 Research and development costs 690.2 650.6
996.7 1,055.2 Total 2,682.9 2,588.9
Executives
Parent Parent Group Group
2006 2007 2007 2006
DKKm DKKm DKKm DKKm
28.8 37.0 Short-term staff benefits 47.0 65.0
4.4 5.6 Pension benefits 6.4 7.7
0.3 0.3 Other social security costs 1.3 2.8
- 6.3 Share-based payments 7.2 0.1
33.5 49.2 Total 61.9 75.6
Total remuneration to executives in the Group was lower in 2007 than in 2006 due to an organisational reshuffle at the beginning of 2007, which reduced the
number of persons falling under the Group category of executives.
Parent Parent Group Group
2006 2007 2007 2006
DKKm DKKm DKKm DKKm
Executive Management
20.7 18.7 Short-term staff benefits 18.7 20.7
- 7.0 Severance payment 7.0 -
2.0 1.3 Pension benefits 1.3 2.0
- 3.3 Share-based payments 3.3 -
22.7 30.3 Total 30.3 22.7
In January 2007, the Executive Management was reduced from five to four members.
The total remuneration of the President and CEO, including bonus, which is a combination of company strategic and individual targets, and share-based payment,
for the 2007 financial year amounted to DKK 8.6 million (DKK 6.3 million in 2006). Of this amount, the value of share-based payment amounts to DKK 1.0 million
(DKK 0 in 2006).
The value of the warrant schemes for the Executive Management, calculated according to the Black-Scholes formula, was DKK 3.6 million at 31 December 2007
(DKK 7.4 million in 2006).
For 2007, the value of the bonus programme for Executive Management will not exceed three months’ salary.
A special severance payment of DKK 7.0 million was agreed for the Executive Vice President who stepped down in 2007.
78

3. Staff costs – continued
Supervisory Board
Remuneration of members of the Supervisory Board for 2007 amounted to DKK 3.7 million (DKK 3.0 million in 2006). To this amount should be added remuneration
for participation in the Audit Committee of DKK 0.4 million (DKK 0.4 million in 2006), and for participation in the Remuneration Committee of DKK 0.2 million
(DKK 0.2 million in 2006). The members of the Supervisory Board held a total of 29,332 Lundbeck shares at 31 December 2007 (11,910 shares in 2006).
The total remuneration of the chairman of the Supervisory Board amounted to DKK 1.3 million (DKK 0.9 million in 2006) including remuneration for participation
in the Audit Committee and the Remuneration Committee. The total remuneration of the deputy chairman of the Supervisory Board for 2007 amounted to
DKK 0.7 million (DKK 0.6 million in 2006) including remuneration for participation in the Audit Committee. The standard annual remuneration of the chairman of
the Supervisory Board amounts to DKK 1.1 million. Some of the board members were replaced in 2007, including the chairman.
Employees
Parent Parent Group Group
2006 2007 2007 2006
1,903 1,935 Average number of full-time employees in the financial year 5,134 5,111
Number of full-time employees at 31.12.
1,907 1,963 In Denmark 1,989 1,941
- - Abroad 3,108 3,230
1,907 1,963 Total 5,097 5,171
Incentive plans
Warrant scheme for the Executive Management and key employees (2004 plan)
In 2004, the company established a warrant scheme for the Executive Management and a number of key employees in Denmark and abroad. Approximately 1,100
employees were granted a total of 2,554,092 warrants, including 160,000 granted to the Executive Management at the time. The warrants had vested fully from the
commencement of the scheme and could be exercised during the period from 9 December 2004 to 30 August 2007. The exercise price was DKK 108.11 throughout the
exercise period.
In 2007, 992,121 warrants (505,609 in 2006) were exercised under this scheme. Unexercised warrants were cancelled at 1 September 2007.
The scheme was subject to the transition rules of IFRS 2 Share-based payments as the warrants vested before 1 January 2005 and therefore had not been recognised in
the income statement and the balance sheet. The scheme expired in 2007 and the market value based on the Black-Scholes formula was DKK 0 at 31 December 2007
(DKK 65.1 million in 2006).
Executive Market value Total
Management Executives Other Total per warrant market value
Number Number Number Number DKK DKKm
Outstanding at 01.01.2006 160,000 178,000 1,510,304 1,848,304 27.73 51.3
Exercised (44,500) (95,000) (366,109) (505,609)
Recategorised, granted and cancelled - 10,400 (10,400) -
Outstanding at 31.12.2006 115,500 93,400 1,133,795 1,342,695 48.47 65.1
Exercised (75,500) (77,400) (839,221) (992,121)
Cancelled (40,000) (16,000) (294,574) (350,574)
Outstanding at 31.12.2007 - - - -
In 2006, the calculated market value per warrant was based on an exercise price of DKK 108.11, a quoted price of DKK 155.83, a volatility of 22.08%, a dividend
payout ratio of 1.44% and a risk-free interest rate of 3.90%.
79

3
Notes
3. Staff costs – continued
Warrant scheme for the Executive Management and Danish and foreign executives (2005 plan)
In 2005, the company established a warrant scheme for the Executive Management and Danish and foreign executives. 76 employees were granted a total of
647,000 warrants, 160,000 of which were allocated to the Executive Management at the time. The warrants had vested fully from the commencement of the
scheme and may be exercised during the period from 2 October 2006 to 31 March 2009. The exercise price is DKK 179.00 throughout the exercise period.
No warrants have been exercised under this scheme.
Executive Market value Total
Management Executives Other Total per warrant market value
Number Number Number Number DKK DKKm
Outstanding at 01.01.2006 160,000 306,000 181,000 647,000 8.83 5.7
Recategorised - 37,000 (37,000) -
Outstanding at 31.12.2006 160,000 343,000 144,000 647,000 11.40 7.4
Recategorised (60,000) (105,000) 165,000 -
Outstanding at 31.12.2007 100,000 238,000 309,000 647,000 3.24 2.1
At 31 December 2007, the calculated market value per warrant was based on the Black-Scholes formula for valuation of options. The calculation is based on an
exercise price of DKK 179.00, a quoted price of DKK 138.00 (DKK 155.83 in 2006), a volatility of 32.13% (24.43% in 2006), a dividend payout ratio of 1.18%
(1.44% in 2006) and a risk-free interest rate of 4.35% (4.19% in 2006).
Warrant scheme for the Executive Management and Danish and foreign executives (2007 plan)
In 2007, the company established a warrant scheme for the Executive Management and Danish and foreign executives. 80 employees were granted a total of
844,500 warrants, 173,000 of which were allocated to the Executive Management. The warrants had vested fully from the commencement of the scheme and may
be exercised during the period from 1 August 2008 to 31 March 2011. The exercise price is DKK 156.00 throughout the exercise period.
The market value per warrant at the time of grant is calculated using the Black-Scholes formula and is based on a volatility of the Lundbeck share of 28.60%,
a dividend payout ratio of 1.22%, a risk-free interest rate of 4.25%, an average maturity of approximately 32 months and a quoted price of DKK 132.35. This translates
into a market value of DKK 19.44 per warrant.
The warrants granted are recognised in the income statement for 2007 at an expense of DKK 16.4 million, which corresponds to the market value at the time of
grant calculated according to the Black-Scholes formula.
Executive Market value Total
Management Executives Other Total per warrant market value
Number Number Number Number DKK DKKm
Granted 173,000 366,800 304,700 844,500
Outstanding at 31.12.2007 173,000 366,800 304,700 844,500 19.31 16.3
At 31 December 2007, the calculated market value per warrant was based on the Black-Scholes formula for valuation of options. The calculation is based on an
exercise price of DKK 156.00, a quoted price of DKK 138.00, a volatility of 30.23%, a dividend payout ratio of 1.18% and a risk-free interest rate of 4.25%.
80

3. Staff costs – continued
Share price based plan for employees in foreign subsidiaries (2002 plan)
In 2002, the employees of foreign subsidiaries received a share price based plan, according to which employees employed by the Group throughout the period
1 June 2002 - 2 January 2006 received a cash amount equal to 50% of the value of the plan. The remaining 50% of the value of the plan will be paid if the employees
have been employed by the Group throughout the period 1 June 2002 - 2 January 2008. The size of the amount depends on how much the price of the
Lundbeck share at 2 January 2006 and 2 January 2008 respectively exceeds DKK 81.00 per share (equal to the special price of the Danish employee share plan). The
share price based plan cannot be converted into shares because the value of the plan will be distributed as a cash amount.
The year’s adjustment of the calculation basis of the share price based plan for employees employed by the Group amounted to 10,212 shares and was due to
resignations (143,068 in 2006 due to expiry of 50% of the plan and resignations).
The plan is subject to the rules of IFRS 2 Share-based payments. The value adjustment for the year is recognised in the income statement for 2007 at an income of
DKK 0.7 million (expense of DKK 4.7 million in 2006). The obligation at 31 December 2007 was DKK 7.9 million (DKK 8.6 million in 2006), including social contributions.
The calculation of the obligation is adjusted for anticipated employee attrition until the time of payout.
Executive Other Market value Total
Management Executives employees Total per option obligation
Number Number Number Number DKK DKKm
Obligation at 01.01.2006 1,200 16,660 247,800 265,660 51.03 12.6
Paid out (600) (5,370) (126,860) (132,830)
Cancelled and recategorised - (6,020) (4,218) (10,238)
Obligation at 31.12.2006 600 5,270 116,722 122,592 75.96 8.6
Cancelled and recategorised (600) (3,180) (6,432) (10,212)
Obligation at 31.12.2007 - 2,090 110,290 112,380 57.01 7.9
At 31 December 2007 the calculated market value per option was based on the Black-Scholes formula for valuation of options. The calculation is based on an
exercise price of DKK 81.00, a quoted price of DKK 138.00 (DKK 155.83 in 2006), a volatility of 21.91% (23.35% in 2006), a dividend payout ratio of 1.18%
(1.44% in 2006) and a risk-free interest rate of 4.25% (4.19% in 2006).
Stock Appreciation Rights for employees of US subsidiaries (2004 plan)
In 2004, key employees of US subsidiaries were granted Stock Appreciation Rights (SARs), a share price based plan with conditions similar to those of the warrant
scheme granted in 2004 to the company’s Executive Management and a number of key employees. The granted SARs were exercisable during the period from
9 December 2004 to 30 August 2007. The size of the amount depended on how much the price of the Lundbeck share at the exercise date exceeded DKK 108.11
per share (equal to the exercise price of the warrant scheme). The share price based plan for employees of the Group’s US subsidiaries could not be converted into
shares because the value of the plan was distributed as a cash amount.
In 2007, 46,092 SARs (23,004 in 2006) were exercised under this plan. Unexercised SARs were cancelled at 1 September 2007.
The plan is subject to the rules of IFRS 2 Share-based payments. The plan is recognised in the income statement for 2007 at an income of DKK 0.8 million (expense
of DKK 1.5 million in 2006). The plan expired in 2007 and the obligation at 31 December 2007 amounted to DKK 0 (DKK 2.4 million in 2006), including social
contributions. The intrinsic value of outstanding SARs was DKK 0 at 31 December 2007 (DKK 2.2 million in 2006).
81

3-5
Notes
3. Staff costs – continued
Executive Market value Total
Management Executives Other Total per SAR obligation
Number Number Number Number DKK DKKm
Obligation at 01.01.2006 - 4,400 67,196 71,596 27.73 2.1
Exercised - - (23,004) (23,004)
Recategorised, granted and cancelled - - (2,000) (2,000)
Obligation at 31.12.2006 - 4,400 42,192 46,592 48.38 2.4
Exercised - (4,400) (41,692) (46,092)
Cancelled - - (500) (500)
Obligation at 31.12.2007 - - - -
In 2006, the calculated market value per SAR was based on the Black-Scholes formula for valuation of options. The calculation was based on an exercise price of DKK
108.11, a quoted price of DKK 155.83, a volatility of 22.08%, a dividend payout ratio of 1.44% and a risk-free interest rate of 3.90%.
General information applying to all incentive plans
The total number of warrants which are exercisable and in-the-money at 31 December 2007 was 0 (1,342,695 in 2006).
The total expense recognised in the income statement concerning all incentive plans was DKK 14.9 million in 2007 (DKK 6.2 million in 2006), and the total
obligation concerning the debt plans at 31 December 2007 was DKK 7.9 million (DKK 11.0 million in 2006).
The performance of Lundbeck’s shares in 2007 is illustrated in the chart on page 40 in the section The Lundbeck share.
4. Amortisation and depreciation
2007
Parent Parent Parent Group Group Group
Property,
Property,
Intangible plant and Intangible plant and
assets equipment Total assets equipment Total
DKKm DKKm DKKm DKKm DKKm DKKm
Amortisation, depreciation and impairment for the year
are analysed as follows
62.3 116.5 178.8 Cost of sales 68.1 571.6 639.7
- 0.4 0.4 Distribution costs 5.3 10.8 16.1
6.3 48.1 54.4 Administrative expenses 8.8 59.7 68.5
88.3 122.1 210.4 Research and development costs 77.2 114.3 191.5
156.9 287.1 444.0 Total 159.4 756.4 915.8
Impairment losses on intangible assets are recognised under research and development costs.
Cost of sales includes a DKK 342.8 million impairment writedown to estimated market value of property, plant and equipment in the manufacturing unit Lundbeck
Pharmaceuticals Ltd. in Seal Sands, UK, following a reassessment of production capacity.
Losses and gains on the sale of intangible assets and property, plant and equipment are recognised in the amount of DKK 15.5 million in respect of the parent company
and DKK 25.7 million in respect of the Group.
82

4. Amortisation and depreciation – continued
2006
Parent Parent Parent Group Group Group
Property,
Property,
Intangible plant and Intangible plant and
assets equipment Total assets equipment Total
DKKm DKKm DKKm DKKm DKKm DKKm
Amortisation, depreciation and impairment for the year
are analysed as follows
54.8 101.1 155.9 Cost of sales 57.1 163.2 220.3
- 0.5 0.5 Distribution costs 4.9 10.0 14.9
3.6 45.8 49.4 Administrative expenses 11.4 69.1 80.5
142.8 116.7 259.5 Research and development costs 73.8 136.5 210.3
201.2 264.1 465.3 Total 147.2 378.8 526.0
Impairment losses on intangible assets are recognised under research and development costs.
Losses and gains on the sale of intangible assets and property, plant and equipment are recognised in the amount of DKK 0 in respect of the parent company and
DKK 5.0 million in respect of the Group.
5. Audit fees
Parent Parent Group Group
2006 2007 2007 2006
DKKm DKKm DKKm DKKm
Deloitte
0.9 1.0 Auditing services 5.8 6.0
1.7 1.8 Non-auditing services 2.9 3.0
2.6 2.8 Total 8.7 9.0
Grant Thornton
0.6 0.6 Auditing services 0.6 0.6
0.4 0.9 Non-auditing services 1.0 0.5
1.0 1.5 Total 1.6 1.1
A few small foreign subsidiaries are not audited by the parent company’s auditors, a foreign business partner of the auditors, or by an internationally recognised
accountancy firm.
83

6-7
Notes
6. Net financials
Parent Parent Group Group
2006 2007 2007 2006
DKKm DKKm DKKm DKKm
73.1 103.8 Interest, cash and securities, etc. 124.5 84.6
26.3 24.2 Interest, subsidiaries - -
99.4 128.0 Total interest 124.5 84.6
45.4 47.4 Exchange gains 163.0 96.4
31.8 45.8 Dividend received 45.8 31.8
Realised and unrealised gains:
9.5 0.9 - Bonds 0.9 9.5
27.8 2.9 - Derivative financial instruments, trading 2.9 27.8
213.9 225.0 Total financial income 337.1 250.1
35.7 73.9 Interest, bank and mortgage debt, etc. 101.9 55.8
30.1 42.7 Interest, subsidiaries - -
65.8 116.6 Total interest 101.9 55.8
2.6 1.8 Other financial expenses 2.7 3.3
- 31.2 Writedown of receivables from associates 31.2 -
52.1 51.9 Exchange losses 239.3 162.9
Realised and unrealised losses:
57.6 11.1 - Bonds 11.1 57.6
34.1 0.8 - Derivative financial instruments, trading 0.8 34.1
0.2 - - Mortgage debt - 0.2
212.4 213.4 Total financial expenses 387.0 313.9
1.5 11.6 Net financials (49.9) (63.8)
The Group’s net realised and unrealised gains/losses on bonds for the year amounted to a loss of DKK 10.2 million (DKK 48.1 million in 2006). The Group’s net
realised and unrealised gains/losses on derivative financial instruments (trading) for the year amounted to a gain of DKK 2.1 million (a loss of DKK 6.3 million in
2006).
84

7. Tax on profit for the year
Parent Parent Group Group
2006 2007 2007 2006
DKKm DKKm DKKm DKKm
320.2 625.6 Current tax 796.7 434.6
(11.7) (11.1) Prior year adjustment, current tax 1.5 (12.3)
2.3 9.5 Prior year adjustment, deferred tax (5.2) 5.0
145.0 (62.9) Change of deferred tax for the year 28.7 170.5
- (21.4) Change of deferred tax as a result of changed income tax rates (24.2) (3.0)
455.8 539.7 Total tax for the year 797.5 594.8
Tax for the year is composed of
69.4 8.9 Tax on equity entries 5.5 68.9
386.4 530.8 Tax on profit for the year 792.0 525.9
455.8 539.7 Total tax for the year 797.5 594.8
Explanation of the Group’s effective tax rate relative to the Danish tax rate
2007 2007 2006 2006
DKKm
DKKm
Profit before tax 2,561.5 1,632.8
Calculated tax on pre-tax profit, 25% (28% in 2006) 640.3 25.0% 457.2 28.0%
Tax effect of:
Differences in the tax rates of foreign subsidiaries from the Danish rate of 25% (28% in 2006) 43.5 1.7% 35.6 2.2%
Non-deductible expenses/non-taxable income and other permanent differences 124.6 4.8% 72.0 4.4%
Change of deferred tax as a result of changed income tax rates (24.2) -0.9% (3.0) -0.2%
Prior year tax adjustments, etc., total effect on operations (3.7) -0.1% (7.3) -0.4%
Effective tax for the year before market value adjustment of other investments 780.5 30.5% 554.5 34.0%
Non-deductible losses/non-taxable gains on shares and other equity investments (9.5) -0.4% (9.8) -0.6%
Tax effect of result in associates 21.0 0.8% (18.8) -1.2%
Effective tax for the year 792.0 30.9% 525.9 32.2%
Explanation of the parent company’s effective tax rate
2007 2007 2006 2006
DKKm
DKKm
Profit before tax 2,281.5 1,354.1
Calculated tax on pre-tax profit, 25% (28% in 2006) 570.4 25.0% 379.1 28.0%
Tax effect of:
Non-deductible expenses/non-taxable income and other permanent differences (21.5) -0.9% 26.5 2.0%
Change of deferred tax as a result of changed income tax rates (21.4) -0.9% - -
Prior year tax adjustments, etc., total effect on operations (1.6) -0.1% (9.4) -0.7%
Effective tax for the year before market value adjustment of other investments 525.9 23.1% 396.2 29.3%
Non-deductible losses/non-taxable gains on shares and other equity investments (9.5) -0.4% (9.8) -0.7%
Tax effect of result in associates 14.4 0.6% - -
Effective tax for the year 530.8 23.3% 386.4 28.6%
Tax on equity entries comprises the tax effect of deferred gains on hedging contracts and the tax effect of exercised warrants.
85

8
Notes
8. Intangible assets and property, plant and equipment
Group
Patent Product Other Process Projects Intangible
Goodwill rights rights rights IT projects 1 projects in progress 1 assets
2007 DKKm DKKm DKKm DKKm DKKm DKKm DKKm DKKm
Cost at 01.01.2007 882.2 489.5 574.6 154.5 273.7 13.2 108.5 2,496.2
Exchange differences - - - (0.7) 0.1 - - (0.6)
Reclassification - - - - 8.1 - - 8.1
Additions - 16.8 151.9 6.2 112.2 0.8 36.6 324.5
Disposals - - - (7.0) - (7.5) (50.6) (65.1)
Cost at 31.12.2007 882.2 506.3 726.5 153.0 394.1 6.5 94.5 2,763.1
Amortisation at 01.01.2007 - 146.8 222.1 148.9 195.6 2.1 - 715.5
Exchange differences - - - (0.7) 0.1 - - (0.6)
Reclassification - - - - 7.4 - - 7.4
Amortisation during the year - 34.7 36.5 4.1 66.4 0.7 - 142.4
Impairment during the year - 12.0 - - - - - 12.0
Amortisation on disposals - - - (7.0) - (1.4) - (8.4)
Amortisation at 31.12.2007 - 193.5 258.6 145.3 269.5 1.4 - 868.3
Carrying amount at 31.12.2007 882.2 312.8 467.9 7.7 124.6 5.1 94.5 1,894.8
2006
Cost at 01.01.2006 882.6 487.0 435.2 149.0 256.5 2.0 26.9 2,239.2
Exchange differences - - (0.1) (0.5) - - 0.1 (0.5)
Reclassification - - - 1.5 1.4 - - 2.9
Additions - 2.5 74.6 4.8 15.9 11.2 103.8 212.8
Additions through company acquisition - - 64.9 - - - - 64.9
Disposals (0.4) - - (0.3) (0.1) - (22.3) (23.1)
Cost at 31.12.2006 882.2 489.5 574.6 154.5 273.7 13.2 108.5 2,496.2
Amortisation at 01.01.2006 - 94.2 191.5 141.6 140.5 0.2 - 568.0
Exchange differences - - (0.1) (0.2) (0.1) - - (0.4)
Reclassification - - - 1.4 0.7 - - 2.1
Amortisation during the year - 35.7 30.7 6.6 54.5 1.9 - 129.4
Impairment during the year - 16.9 - - - - - 16.9
Amortisation on disposals - - - (0.5) - - - (0.5)
Amortisation at 31.12.2006 - 146.8 222.1 148.9 195.6 2.1 - 715.5
Carrying amount at 31.12.2006 882.2 342.7 352.5 5.6 78.1 11.1 108.5 1,780.7
1) IT projects and projects in progress primarily comprise SAP. The amounts include capitalised internal expenses.
86

8. Intangible assets and property, plant and equipment – continued
Group Other fixtures Prepayments
and fittings, and plant and Property,
Land and Plant and tools and equipment in plant and
buildings machinery equipment 1 progress equipment
2007 DKKm DKKm DKKm DKKm DKKm
Cost at 01.01.2007 2,967.3 1,531.0 1,075.6 583.8 6,157.7
Exchange differences 13.8 (6.4) (0.8) (14.4) (7.8)
Reclassification - 0.3 (8.4) - (8.1)
Additions 190.1 146.7 106.0 398.9 841.7
Disposals (7.4) (74.4) (47.4) (367.5) (496.7)
Cost at 31.12.2007 3,163.8 1,597.2 1,125.0 600.8 6,486.8
Depreciation at 01.01.2007 840.7 938.7 711.6 - 2,491.0
Exchange differences (0.4) (3.6) (3.2) - (7.2)
Reclassification - 0.1 (7.5) - (7.4)
Depreciation during the year 143.4 121.4 128.1 - 392.9
Impairment during the year 137.3 204.1 0.1 1.3 342.8
Depreciation on disposals (4.8) (56.7) (38.5) - (100.0)
Depreciation at 31.12.2007 1,116.2 1,204.0 790.6 1.3 3,112.1
Carrying amount at 31.12.2007 2,047.6 393.2 334.4 599.5 3,374.7
2006
Cost at 01.01.2006 2,793.7 1,490.7 1,023.7 313.1 5,621.2
Exchange differences 9.9 (1.2) (8.0) 1.0 1.7
Reclassification 31.3 (31.3) (2.9) - (2.9)
Additions 136.1 74.7 86.2 423.2 720.2
Additions through company acquisition - - - - -
Disposals (3.7) (1.9) (23.4) (153.5) (182.5)
Cost at 31.12.2006 2,967.3 1,531.0 1,075.6 583.8 6,157.7
Depreciation at 01.01.2006 702.9 828.1 609.8 - 2,140.8
Exchange differences - 0.5 (3.8) - (3.3)
Reclassification - - (2.1) - (2.1)
Depreciation during the year 138.5 112.0 124.2 - 374.7
Impairment during the year - - - - -
Depreciation on disposals (0.7) (1.9) (16.5) - (19.1)
Depreciation at 31.12.2006 840.7 938.7 711.6 - 2,491.0
Carrying amount at 31.12.2006 2,126.6 592.3 364.0 583.8 3,666.7
1) Including leasehold improvements.
87

8
Notes
8. Intangible assets and property, plant and equipment – continued
Parent company
Patent Product Other Process Projects Intangible
Goodwill rights rights rights IT projects 1 projects in progress 1 assets
2007 DKKm DKKm DKKm DKKm DKKm DKKm DKKm DKKm
Cost at 01.01.2007 - 628.7 448.6 - 260.8 - 105.1 1,443.2
Reclassification - - - - - - - -
Additions - 16.4 150.0 - 108.0 - 26.4 300.8
Disposals - - - - - - (46.7) (46.7)
Cost at 31.12.2007 - 645.1 598.6 - 368.8 - 84.8 1,697.3
Amortisation at 01.01.2007 - 218.3 161.1 - 188.1 - - 567.5
Reclassification - - - - - - - -
Amortisation during the year - 41.3 32.1 - 61.8 - - 135.2
Impairment during the year - 21.7 - - - - - 21.7
Amortisation on disposals - - - - - - - -
Amortisation at 31.12.2007 - 281.3 193.2 - 249.9 - - 724.4
Carrying amount at 31.12.2007 - 363.8 405.4 - 118.9 - 84.8 972.9
2006
Cost at 01.01.2006 - 626.5 374.1 - 247.5 - 19.8 1,267.9
Reclassification - - - - - - - -
Additions - 2.2 74.5 - 13.3 - 95.2 185.2
Additions through company acquisition - - - - - - - -
Disposals - - - - - - (9.9) (9.9)
Cost at 31.12.2006 - 628.7 448.6 - 260.8 - 105.1 1,443.2
Amortisation at 01.01.2006 - 96.4 132.5 - 137.4 - - 366.3
Reclassification - - - - - - - -
Amortisation during the year - 48.2 28.6 - 50.7 - - 127.5
Impairment during the year - 73.7 - - - - - 73.7
Amortisation on disposals - - - - - - - -
Amortisation at 31.12.2006 - 218.3 161.1 - 188.1 - - 567.5
Carrying amount at 31.12.2006 - 410.4 287.5 - 72.7 - 105.1 875.7
1) IT projects and projects in progress primarily comprise SAP. The amounts include capitalised internal expenses.
88

8. Intangible assets and property, plant and equipment – continued
Parent company Other fixtures Prepayments
and fittings, and plant and Property,
Land and Plant and tools and equipment in plant and
buildings machinery equipment 1 progress equipment
2007 DKKm DKKm DKKm DKKm DKKm
Cost at 01.01.2007 2,601.2 627.2 801.6 459.1 4,489.1
Reclassification - 0.5 (0.5) - -
Additions 111.8 118.0 76.4 332.4 638.6
Disposals (7.3) (46.1) (15.9) (250.5) (319.8)
Cost at 31.12.2007 2,705.7 699.6 861.6 541.0 4,807.9
Depreciation at 01.01.2007 778.4 420.3 538.2 - 1,736.9
Reclassification - 0.2 (0.2) - -
Depreciation during the year 127.3 53.1 91.2 - 271.6
Impairment during the year - - - - -
Depreciation on disposals (4.7) (30.3) (14.2) - (49.2)
Depreciation at 31.12.2007 901.0 443.3 615.0 - 1,959.3
Carrying amount at 31.12.2007 1,804.7 256.3 246.6 541.0 2,848.6
2006
Cost at 01.01.2006 2,570.0 583.0 747.5 262.6 4,163.1
Reclassification - - - - -
Additions 31.2 44.2 54.1 302.4 431.9
Additions through company acquisition - - - - -
Disposals - - - (105.9) (105.9)
Cost at 31.12.2006 2,601.2 627.2 801.6 459.1 4,489.1
Depreciation at 01.01.2006 654.6 367.1 451.1 - 1,472.8
Reclassification - - - - -
Depreciation during the year 123.8 53.2 87.1 - 264.1
Impairment during the year - - - - -
Depreciation on disposals - - - - -
Depreciation at 31.12.2006 778.4 420.3 538.2 - 1,736.9
Carrying amount at 31.12.2006 1,822.8 206.9 263.4 459.1 2,752.2
1) Including leasehold improvements.
The carrying amount of mortgaged fixed assets in the parent company was DKK 1,790.7 million at 31 December 2007 (DKK 1,810.9 million in 2006).
89

8-9
Notes
8. Intangible assets and property, plant and equipment – continued
Goodwill impairment test
The carrying amount of goodwill of DKK 882.2 million (DKK 882.2 million in 2006) relates to the acquisition of Lundbeck Research USA, Inc., USA (DKK 257.5
million), Lundbeck Pharmaceuticals Italy S.p.A., Italy (DKK 163.0 million) and 50% of Lundbeck GmbH, Germany (DKK 461.7 million). The annual impairment tests
are submitted to the Audit Committee for subsequent approval by the Supervisory Board. Based on the impairment tests performed in 2007, it was concluded that
there is no need for writing down the goodwill amount. Lundbeck Pharmaceuticals, Italy S.p.A. and Lundbeck GmbH are defined as independent cash-generating
units (CGU). In the impairment test, the discounted expected future cash flows (value in use) for each CGU are compared to the carrying amounts. The future cash
flows are based on the companies’ business plans for 2008 - 2012. The key parameters in the calculation of the value in use are sales, EBITDA, working capital and
capital investments. The business plans are based on management’s specific assessment of the business units’ expected development during the period 2008 -
2012. For Lundbeck GmbH and Lundbeck Pharmaceuticals, Italy S.p.A., the terminal value for the period after 2012 has been fixed on the assumption of future
growth of 2% p.a. The calculation of the value in use is based on a WACC of 8% before tax (8% in 2006). The WACC applied has been calculated on the basis of an
analysis performed by an external collaboration partner. Lundbeck Research USA, Inc. is not defined as an independent CGU due to its capacity as a research unit.
Goodwill related to the acquisition of the company has therefore been allocated to the uppermost group level along with the other research and development
units. The impairment test of goodwill allocated to the uppermost group level is not carried out as a calculation of the value in use but as an assessment of the ratio
between the carrying amount of goodwill and the Group’s current market value.
Impairment of patents
In 2007, an impairment loss of DKK 21.7 million (DKK 73.7 million in 2006) was recognised concerning a patent in the parent company’s financial statements and
DKK 12.0 million (DKK 16.9 million in 2006) in the consolidated financial statements. In the income statement the impairment loss is recognised under research
and development costs. The impairment loss is higher in the parent company as the patents acquired in connection with the acquisition of Lundbeck Research USA,
Inc. in 2003 were subsequently transferred to the parent company at a value higher than the cost. The patent, which will no longer be used, has been written down
to DKK 0.
Impairment of property, plant and equipment
In 2007, a DKK 342.8 million writedown for impairment to estimated market value was recognised on property, plant and equipment in the manufacturing unit
Lundbeck Pharmaceuticals Ltd. in Seal Sands, UK, following a reassessment of production capacity.
90

9. Investments in subsidiaries
Parent Parent
2007 2006
DKKm DKKm
Cost at 01.01. 2,732.0 2,699.6
Capital contribution 3.1 32.4
Cost at 31.12. 2,735.1 2,732.0
Income from investments in subsidiaries is dividends and amounted to DKK 120.2 million (DKK 75.6 million in 2006).
Share of voting rights
and ownership
Lundbeck Argentina S.A., Argentina 100%
Lundbeck Australia Pty Ltd, Australia, including 100%
- CNS Pharma Pty Ltd, Australia 100%
Lundbeck S.A., Belgium 100%
Lundbeck Brasil Ltda., Brazil 100%
Lundbeck Canada Inc., Canada 100%
Lundbeck Chile Farmaceútica Ltda., Chile 100%
Lundbeck Cognitive Therapeutics A/S, Denmark 100%
Lundbeck Export A/S, Denmark 100%
Lundbeck Insurance A/S, Denmark 100%
Lundbeck Pharma A/S, Denmark 100%
Lundbeck Group Limited, UK, including 100%
- Lundbeck Limited, UK 100%
- Lundbeck Pharmaceuticals Ltd., UK 100%
Lundbeck Eesti A/S, Estonia 100%
OY H. Lundbeck AB, Finland 100%
Lundbeck SA, France 100%
Lundbeck Hellas S.A., Greece 100%
Lundbeck B.V., The Netherlands 100%
Lundbeck (Hong Kong) Limited, Hong Kong 100%
Lundbeck India Private Limited, India 100%
Lundbeck (Ireland) Limited, Ireland 100%
Lundbeck Israel Ltd., Israel 100%
Lundbeck Italia S.p.A., Italy 100%
Lundbeck Pharmaceuticals, Italy S.p.A., Italy, including 100%
- Archid S.a., Luxembourg 100%
Lundbeck Japan Kabushiki Kaisha, Japan 100%
Lundbeck (Beijing) Pharmaceuticals Consulting Co., Ltd., China 100%
Lundbeck Korea Co., Ltd., Korea 100%
Share of voting rights
and ownership
Lundbeck Croatia d.o.o., Croatia 100%
SIA Lundbeck Latvia, Latvia 100%
UAB Lundbeck Lietuva, Lithuania 100%
Lundbeck México, SA de CV, Mexico 100%
Lundbeck New Zealand Limited, New Zealand 100%
H. Lundbeck AS, Norway, including 100%
- CNS Pharma AS, Norway 100%
Lundbeck Pakistan (Private) Limited, Pakistan 100%
Lundbeck Poland Sp.z.o.o., Poland 100%
Lundbeck Portugal - Produtos Farmacêuticos Lda, Portugal 100%
Lundbeck RUS OOO, Russia 100%
Lundbeck (Schweiz) AG, Switzerland 100%
Lundbeck Pharmaceutical GmbH, Switzerland 100%
Lundbeck Slovensko s.r.o., Slovakia 100%
Lundbeck Pharma d.o.o., Slovenia 100%
Axofarma Lab, S.A., Spain 100%
Farmaglia S.A., Spain 100%
Lundbeck España S.A., Spain 100%
H. Lundbeck AB, Sweden, including 100%
- CNS Pharma AB, Sweden 100%
Lundbeck South Africa (Pty) Limited, South Africa 100%
Lundbeck CZ s.r.o., Czech Republic 100%
Lundbeck Ìlac Ticaret Limited Sirketi, Turkey 100%
Lundbeck GmbH, Germany 100%
Lundbeck Hungária KFT, Hungary 100%
Lundbeck Inc., USA 100%
Lundbeck Research USA, Inc., USA 100%
Lundbeck de Venezuela, C.A., Venezuela 100%
Lundbeck Austria GmbH, Austria 100%
91

10-11
Notes
10. Investments in associates
2007
Parent Parent Parent Group Group Group
Accumulated
Accumulated
revaluation/
revaluation/
impairment
impairment
Cost losses Total Cost losses Total
DKKm DKKm DKKm DKKm DKKm DKKm
181.1 (26.7) 154.4 Carrying amount at 01.01.2007 181.1 (14.2) 166.9
- - - Losses in associates - (53.3) (53.3)
- (57.0) (57.0) Impairment on investment - (30.7) (30.7)
181.1 (83.7) 97.4 Carrying amount at 31.12.2007 181.1 (98.2) 82.9
Based on an impairment test, the value of the investment in CF Pharma Gyógyszergyártó Kft. has been written down to DKK 0. The fair value of the investment in
Lifecycle Pharma A/S was DKK 312.4 million at 31 December 2007.
Share of voting rights and ownership
CF Pharma Gyógyszergyártó Kft., Hungary 47.1%
LifeCycle Pharma A/S, Denmark 27.5%
2006
Parent Parent Parent Group Group Group
Accumulated
Accumulated
revaluation/
revaluation/
impairment
impairment
Cost losses Total Cost losses Total
DKKm DKKm DKKm DKKm DKKm DKKm
181.1 (26.7) 154.4 Carrying amount at 01.01.2006 181.1 (80.9) 100.2
- - - Income from reduced ownership interest - 154.6 154.6
- - - Losses in associates - (87.4) (87.4)
- - - Exchange differences - (0.5) (0.5)
181.1 (26.7) 154.4 Carrying amount at 31.12.2006 181.1 (14.2) 166.9
The shares of LifeCycle Pharma A/S were listed on 20 November 2006. In this connection, Lundbeck’s ownership interest was reduced to 28.8%. The fair value of
the investment was DKK 490.0 million at 31 December 2006.
Share of voting rights and ownership
CF Pharma Gyógyszergyártó Kft., Hungary 47.1%
LifeCycle Pharma A/S, Denmark 28.8%
Financial highlights of associates
Parent Parent Group Group
2006 2007 2007 2006
DKKm DKKm DKKm DKKm
717.3 678.7 Assets 678.7 717.3
139.2 275.7 Liabilities 275.7 139.2
578.1 403.0 Net assets 403.0 578.1
188.6 134.9 Share of net assets 134.9 188.6
65.2 100.8 Revenue 100.8 65.2
(179.8) (174.3) Profit/(loss) for the year (174.3) (179.8)
Group’s share of profit/(loss) for the year (53.3) (87.4)
92

11. Other investments and other receivables
Group
Receivables Available-for-sale
from financial Other
2007
associates assets receivables 1
DKKm DKKm DKKm
Carrying amount at 01.01.2007 19.2 127.6 63.6
Additions 12.0 10.6 11.2
Disposals - - (13.3)
Value adjustment - 12.8 (0.1)
Writedown of receivables (31.2) - -
Exchange differences - (0.3) (0.8)
Carrying amount at 31.12.2007 - 150.7 60.6
2006
Carrying amount at 01.01.2006 - 157.1 60.7
Additions 19.2 4.5 9.5
Disposals - (2.1) (4.9)
Value adjustment - (31.5) -
Exchange differences - (0.4) (1.7)
Carrying amount at 31.12.2006 19.2 127.6 63.6
Parent company
Receivables Receivables Available-for-sale
from from financial Other
2007
subsidiaries associates assets receivables 1
DKKm DKKm DKKm DKKm
Carrying amount at 01.01.2007 745.9 19.2 125.7 41.7
Additions - 12.0 10.6 2.1
Disposals (118.6) - - (12.5)
Value adjustment - - 12.8 -
Writedown of receivables - (31.2) - -
Exchange differences (18.3) - - 0.2
Carrying amount at 31.12.2007 609.0 - 149.1 31.5
2006
Carrying amount at 01.01.2006 826.0 - 153.1 41.1
Additions - 19.2 4.1 2.2
Disposals (55.4) - - (0.2)
Value adjustment - - (31.5) -
Exchange differences (24.7) - - (1.4)
Carrying amount at 31.12.2006 745.9 19.2 125.7 41.7
Fair value adjustment of available-for-sale financial assets
Parent Parent Group Group
2006 2007 2007 2006
DKKm DKKm DKKm DKKm
(150.0) (181.5) Fair value adjustment at 01.01. (181.4) (149.9)
17.2 21.6 Revaluation during the year 21.6 17.2
(48.7) (8.8) Impairment losses during the year (8.8) (48.7)
(181.5) (168.7) Fair value adjustment at 31.12. (168.6) (181.4)
1) At 31 December 2007, other receivables are not believed to involve any credit risk.
93

12-14
Notes
12. Inventories
Parent Parent Group Group
2006 2007 2007 2006
DKKm DKKm DKKm DKKm
207.7 220.2 Indirect costs of production 364.5 387.6
15.8 42.0 Impairment loss for the year 97.9 51.1
- - Inventories calculated at net realisable value 11.5 26.5
The total cost of goods sold included in cost of sales for 2007 amounted to DKK 1,124.4 million.
13. Trade receivables and other receivables
Parent Parent Group Group
2006 2007 2007 2006
DKKm DKKm DKKm DKKm
Trade receivables
256.9 179.9 Receivables 1,567.9 1,470.0
- - Impairment of trade receivables (7.8) (6.8)
256.9 179.9 Total 1,560.1 1,463.2
Specification of trade receivables by due date
244.5 173.3 Receivables not due 1,359.5 1,305.2
11.0 - Receivables falling due within 3 months 157.0 115.4
- 6.2 Receivables falling due after more than 3 months and up to 6 months 15.3 28.1
- 0.4 Receivables falling due after more than 6 months and up to 12 months 15.7 7.8
1.4 - Receivables falling due after more than 12 months 20.4 13.5
256.9 179.9 Total 1,567.9 1,470.0
Development in impairment of trade receivables
- - Impairment of trade receivables at 01.01. 6.8 6.5
- - Impairment of receivables during the year (0.1) (0.1)
- - Reversed, unrealised impairment of receivables - (0.1)
- - Change in impairment of receivables 1.0 0.6
- - Exchange differences 0.1 (0.1)
- - Impairment of trade receivables at 31.12. 7.8 6.8
Other receivables
249.0 486.9 Receivables 582.2 359.4
- - Impairment of other receivables - -
249.0 486.9 Total 582.2 359.4
Specification of other receivables by due date
249.0 486.7 Receivables not due 575.5 350.9
- 0.1 Receivables falling due within 3 months 5.3 0.2
- 0.1 Receivables falling due after more than 3 months and up to 6 months 0.3 -
- - Receivables falling due after more than 6 months and up to 12 months 0.1 -
- - Receivables falling due after more than 12 months 1.0 8.3
249.0 486.9 Total 582.2 359.4
94

13. Trade receivables and other receivables – continued
Lundbeck’s products are sold mainly to distributors of pharmaceuticals and hospitals. Historically, the losses sustained have been insignificant. This was also the
case in 2007.
The specific payment conditions for each individual customer, including credit periods and any payment of interest in case of non-payment, vary from one
subsidiary to the next but are based on industry practice in the relevant market. As a result of special trading conditions in specific markets, the credit period
for public hospitals may be up to approximately 200 days.
Changes to the Group’s customer portfolio are limited. When collaboration is established with new customers, a credit assessment is performed, when deemed
necessary. The credit assessment is made either by Lundbeck or through an external credit rating agency.
Undue and due receivables are analysed in an ongoing process. Based on such analyses, historical experience and industry experience, it is estimated whether
the receivables are recoverable. A large part of the due trade receivables relates to public hospitals, for which the risk of losses is considered minimal. In 2007, no
receivable from one single debtor accounted for more than 5% of total trade receivables. In 2006, receivables from Forest accounted for more than 5% of total
trade receivables. In 2007, receivables from Takeda Pharmaceutical Company Limited accounted for more than 5% of total other receivables.
A few of the Group’s receivables are secured through bank guarantees or similar arrangements, but as most of the Group’s customers are distributors of pharmaceuticals
and hospitals, the risk of non-payment is considered minimal.
Credit risks
The primary financial instruments shown in the balance sheet are trade receivables, securities and cash. The amounts of these balance sheet items are identical
to the maximum credit risk. The Group has no major concentration of credit risk, as the risk is spread over a large number of creditworthy trading partners.
Accordingly, the Group has not taken out any credit insurance for receivables.
The securities portfolio consists exclusively of Danish government and mortgage credit bonds with a limited credit risk.
The credit risk of cash and derivative financial instruments (forward exchange contracts and options) is limited because the Group deals only with banks with a
high credit rating. Lundbeck’s in-house management and credit exposure to banks are based on internal credit lines for each counterparty. The credit lines are
monitored and reported pursuant to the company’s treasury policy.
14. Share capital
The share capital of DKK 1,036.4 million at 31 December 2007 is divided into 207,279,631 shares of a nominal value of DKK 5 each.
2007 2006
DKKm DKKm
Share capital at 01.01. 1,060.8 1,136.1
Exercise of warrants 5.0 2.6
Cancellation of treasury shares (29.4) (77.9)
Share capital at 31.12. 1,036.4 1,060.8
The Supervisory Board recommends distribution of dividend for 2007 of 30% (30% in 2006) of the net profit for the year allocated to the shareholders of the
parent company, equivalent to DKK 530.6 million (DKK 333.1 million in 2006) inclusive of dividend on treasury shares, or DKK 2.56 per share (DKK 1.57 in 2006).
The total share premium of DKK 223.9 million, which relates to the exercise of warrants (see note 3 Staff costs), increased by DKK 102.3 million in 2007 from
DKK 121.6 million in 2006.
The share capital is in compliance with the capital requirements of the Danish Public Companies Act and the rules of OMX Nordic Exchange Copenhagen.
95

15
Notes
15. Pension obligations and similar obligations
The majority of the employees of the Group are covered by pension plans paid for by the companies of the Group. The types of plan vary according to regulatory
requirements, tax rules and economic conditions in the countries in which the employees are employed. A summary of the most important plans is given below.
Defined contribution plans
For defined contribution plans, the employer undertakes to pay a defined contribution (e.g. a fixed amount or a fixed percentage of the pay). Under a defined contribution
plan, the employees will usually bear the risk related to future developments in interest and inflation rates etc.
The major defined contribution plans cover employees in Australia, Belgium, Denmark, the UK, Finland, Ireland and Sweden. The cost of defined contribution plans,
representing contributions to the plans, totalled DKK 128.4 million in 2007 (DKK 135.1 million in 2006).
Parent Parent Group Group
2006 2007 2007 2006
DKKm DKKm DKKm DKKm
85.1 89.4 Expenses for the financial year 128.4 135.1
Defined benefit plans
For defined benefit plans, the employer undertakes to pay a defined benefit (e.g. a retirement pension at a fixed amount or a fixed percentage of the employee’s
final salary). Under a defined benefit plan, the company usually bears the risk relating to future developments in interest and inflation rates etc.
For defined benefit plans, the present value of future benefits, which the company is liable to pay under the plan, is computed using actuarial principles. The computation
of present value is based on assumptions about discount rates, increases in pay rates and pensions, investment yield, staff resignation rates, mortality and
disability. Present value is computed exclusively for the benefits to which the employees have earned entitlement through their employment with the company up
till now. Actuarial gains and losses are recognised in the income statement as they are calculated.
Group Group Group
2007 2006 2005
DKKm DKKm DKKm
Present value of funded pension obligations 190.7 216.9 195.1
Fair value of plan assets (155.4) (161.2) (142.6)
Funded pension obligations, net 35.3 55.7 52.5
Present value of unfunded pension obligations 95.5 94.7 108.2
Pension obligations at 31.12. 130.8 150.4 160.7
Other pension-like obligations 57.9 54.1 30.5
Pension obligations and similar obligations at 31.12. 188.7 204.5 191.2
Experience adjustments to pension obligations 32.8 6.6 (34.2)
Experience adjustments to plan assets (12.8) 2.4 16.2
The Group’s most important defined benefit plans cover employees in the UK and Germany.
The UK defined benefit plan is funded by means of an independent pension fund. The actuarial calculation of the liability as at 31 December 2007 is stated in the
Group’s balance sheet at an amount of DKK 22.9 million (DKK 46.3 million in 2006). The liability is calculated as the present value of the future payments of
DKK 162.9 million (DKK 195.4 million in 2006) less the market value of the pension fund’s assets of DKK 140.0 million (DKK 149.1 million in 2006). The actuarial calculation
was based on a discount rate of 5.80% p.a., a pay rate increase of 4.90% p.a. and a pension increase of 3.00% p.a. The calculation does not include an ageweighted
staff resignation rate. The consolidated income statement for 2007 includes a net income of DKK 12.5 million (a net expense of DKK 7.4 million in 2006).
The German defined benefit plan is not funded. The actuarial calculation of the liability derived from the plan as at 31 December 2007 is stated in the Group’s
balance sheet at an amount of DKK 75.1 million (DKK 78.2 million in 2006). The actuarial calculation was based on a discount rate of 5.25% p.a., a pay rate increase
of 2.75% p.a., a pension increase of 2.00% every third year and an age-weighted staff resignation rate of 0-10% p.a. The consolidated income statement for 2007
includes a net income of DKK 1.0 million (DKK 4.2 million in 2006).
In addition, the Group operates a defined benefit plan in Norway, of which the majority is funded. The actuarial calculation of the liability as at 31 December 2007
is stated in the Group’s balance sheet at an amount of DKK 9.5 million (DKK 6.9 million in 2006). The liability is calculated as the present value of the future payments
of DKK 24.9 million (DKK 19.0 million in 2006) less the market value of the pension fund’s assets of DKK 15.4 million (DKK 12.1 million in 2006). The consolidated
income statement includes a net expense of DKK 4.5 million (DKK 3.5 million in 2006).
96

15. Pension obligations and similar obligations – continued
The pension plan in the USA is funded through an insurance/investment asset, which is recognised in the consolidated balance sheet. At 31 December 2007, the
total obligation amounted to DKK 3.2 million (DKK 2.5 million in 2006). At 31 December 2007, the value of the insurance/investment asset was DKK 11.5 million
(DKK 6.3 million in 2006). Lundbeck is obliged, under specific terms and conditions, to make payments and pension disbursements to the employees. In the consolidated
income statement for 2007, the plan is recognised at a net expense of DKK 1.0 million (DKK 0.8 million in 2006).
In addition, the Group has defined benefit plans in France and Pakistan, which are unfunded. The obligation under these plans is recorded in the consolidated balance
sheet at 31 December 2007 at an amount of DKK 20.1 million (DKK 16.5 million in 2006). In the consolidated income statement for 2007, the plans are recognised
at a net expense of DKK 3.9 million (DKK 1.5 million in 2006).
There is no defined benefit plans in Denmark and, by extension, no such plans in the parent company.
Group Group
2007 2006
% distribution % distribution
The fair value of the plan assets breaks down as follows
Shares 50% 57%
Bonds 28% 23%
Property 15% 15%
Other assets 7% 5%
Total 100% 100%
The expected return is calculated on the basis of investment reports prepared by an international, recognised pension and insurance company.
Group Group
2007 2006
DKKm DKKm
Change in present value of funded pension obligations
Present value of funded pension obligations at 01.01. 216.9 195.1
Exchange differences (15.6) 2.4
Transferred from other pension plan - 1.1
Pension expenses 5.3 5.6
Interest expenses relating to the obligation 10.8 9.6
Actuarial (gains)/losses (26.3) 7.1
Disbursements (1.1) (4.9)
Employee contributions 0.7 0.9
Present value of funded pension obligations at 31.12. 190.7 216.9
Change in fair value of plan assets
Fair value of plan assets at 01.01. 161.2 142.6
Exchange differences (12.1) 1.5
Expected return on plan assets 9.7 8.4
Actuarial gains/(losses) (12.8) 2.4
Contributions 9.7 11.0
Disbursements (0.4) (4.9)
Employee contributions 0.1 0.2
Fair value of plan assets at 31.12. 155.4 161.2
97

15-16
Notes
15. Pension obligations and similar obligations – continued
Group Group
2007 2006
DKKm DKKm
Change in present value of unfunded pension obligations
Present value of unfunded pension obligations at 01.01. 94.7 108.2
Exchange differences 0.1 (0.4)
Pension expenses 6.2 7.3
Interest expenses relating to the obligations 3.3 3.9
Actuarial (gains)/losses (6.5) (13.7)
Contributions - (10.6)
Disbursements (2.3) -
Present value of unfunded pension obligations at 31.12. 95.5 94.7
Change in obligations for defined benefit plans
Pension obligations at 01.01. 150.4 160.7
Exchange differences (3.4) 0.5
Transferred from other pension plan - 1.1
Recognised as expense (change recognised in the income statement) (4.1) 9.0
Contributions (9.7) (21.6)
Disbursements (3.0) -
Employee contributions 0.6 0.7
Pension obligations at 31.12. 130.8 150.4
Specification of the change recognised in the income statement
Pension expenses 11.5 12.9
Interest expenses relating to the obligations 14.1 13.5
Expected return on plan assets (9.7) (8.4)
Actuarial (gains)/losses (20.0) (9.0)
Total expenses recognised (4.1) 9.0
Realised return on plan assets (4.0) 9.9
The expected contribution for 2008 for the defined benefit plans is DKK 14.4 million (DKK 13.7 million for 2007).
Other pension-like obligations
An obligation of DKK 57.9 million (DKK 54.1 million in 2006) is recognised in the Group to cover other pension-like obligations, including primarily termination
benefits in a number of subsidiaries. The benefit payments are conditional upon specified requirements being met. Total net expenses for the year were DKK 3.8 million
(DKK 23.6 million in 2006).
98

16. Deferred tax liabilities
Group
Temporary differences between assets and liabilities as stated in the financial statements and as stated in the tax base
Adjustment of
deferred tax
Movement
Balance at at beginning Exchange during Balance at
2007
01.01. of year differences the year 31.12.
DKKm DKKm DKKm DKKm DKKm
Intangible assets 750.5 (23.4) 1.3 107.0 835.4
Property, plant and equipment 1,050.7 17.8 (18.9) 27.9 1,077.5
Inventories (150.6) - 0.2 12.2 (138.2)
Prepayments (854.7) - - 15.2 (839.5)
Other items 107.4 1.1 28.3 (214.8) (78.0)
Tax reserves in subsidiaries 27.3 (8.4) (2.2) (12.9) 3.8
Tax loss carry-forwards (295.5) 6.6 28.1 114.6 (146.2)
Total temporary differences 635.1 (6.3) 36.8 49.2 714.8
(Deferred tax assets)/deferred tax liabilities 152.4 (5.2) 12.9 4.5 164.6
2006
Intangible assets 565.2 23.5 6.5 155.3 750.5
Property, plant and equipment 1,000.1 1.7 3.8 45.1 1,050.7
Inventories 9.1 (34.5) 8.5 (133.7) (150.6)
Prepayments (1,393.1) - - 538.4 (854.7)
Other items (23.5) 31.4 24.7 74.8 107.4
Tax reserves in subsidiaries 30.4 0.2 3.3 (6.6) 27.3
Tax loss carry-forwards (311.7) (5.8) 30.8 (8.8) (295.5)
Total temporary differences (123.5) 16.5 77.6 664.5 635.1
(Deferred tax assets)/deferred tax liabilities (47.0) 5.0 26.9 167.5 152.4
Deferred tax assets/liabilities
Deferred tax Deferred tax Deferred tax Deferred tax
assets liabilities Net assets liabilities Net
2007 2007 2007 2006 2006 2006
DKKm DKKm DKKm DKKm DKKm DKKm
Intangible assets (21.7) 233.0 211.3 (34.4) 250.0 215.6
Property, plant and equipment (8.0) 287.4 279.4 (12.2) 311.1 298.9
Inventories (92.8) 48.8 (44.0) (100.8) 54.8 (46.0)
Prepayments (209.9) - (209.9) (239.3) - (239.3)
Other items (167.7) 149.9 (17.8) (140.9) 172.1 31.2
Tax reserves in subsidiaries (9.4) 11.6 2.2 (6.7) 15.1 8.4
Tax loss carry-forwards (56.6) - (56.6) (116.4) - (116.4)
Tax (assets)/liabilities (566.1) 730.7 164.6 (650.7) 803.1 152.4
Set-off within legal tax entities and jurisdictions 403.4 (403.4) - 371.6 (371.6) -
Total net (tax assets)/liabilities (162.7) 327.3 164.6 (279.1) 431.5 152.4
In 2007, the tax value of non-capitalised tax losses carried forward in the Group which are not expected to be utilised within five years amounted to DKK 19.8 million
(DKK 0 in 2006).
99

16-18
Notes
16. Deferred tax liabilities – continued
Parent company
Temporary differences between assets and liabilities as stated in the financial statements and as stated in the tax base
Adjustment of
deferred tax Movement
Balance at at beginning during Balance at
2007
01.01. of year the year 31.12.
DKKm DKKm DKKm DKKm
Intangible assets 621.2 - 38.1 659.3
Property, plant and equipment 836.2 18.8 34.6 889.6
Inventories 195.6 - (0.3) 195.3
Prepayments (854.7) - 15.2 (839.5)
Other items 100.5 15.3 (313.0) (197.2)
Total temporary differences 898.8 34.1 (225.4) 707.5
(Deferred tax assets)/deferred tax liabilities 251.7 9.5 (84.3) 176.9
2006
Intangible assets 765.8 - (144.6) 621.2
Property, plant and equipment 790.0 9.6 36.6 836.2
Inventories 287.6 (34.5) (57.5) 195.6
Prepayments (1,393.1) - 538.4 (854.7)
Other items (77.3) 33.3 144.5 100.5
Total temporary differences 373.0 8.4 517.4 898.8
(Deferred tax assets)/deferred tax liabilities 104.4 2.3 145.0 251.7
Deferred tax assets/liabilities
Deferred tax Deferred tax Deferred tax Deferred tax
assets liabilities Net assets liabilities Net
2007 2007 2007 2006 2006 2006
DKKm DKKm DKKm DKKm DKKm DKKm
Intangible assets - 164.9 164.9 - 174.0 174.0
Property, plant and equipment - 222.4 222.4 - 234.1 234.1
Inventories - 48.8 48.8 - 54.8 54.8
Prepayments (209.9) - (209.9) (239.3) - (239.3)
Other items (49.3) - (49.3) - 28.1 28.1
Tax (assets)/liabilities (259.2) 436.1 176.9 (239.3) 491.0 251.7
Amount set off 259.2 (259.2) - 239.3 (239.3) -
Total net tax (assets)/liabilities - 176.9 176.9 - 251.7 251.7
The figures stated above show gross deferred tax assets and deferred tax liabilities respectively at an income tax rate of 25% (28% in 2006).
100

17. Provisions
Parent Parent Group Group
2006 2007 2007 2006
DKKm DKKm DKKm DKKm
87.5 84.2 Provisions at 01.01. 95.1 102.0
- 311.1 Provisions charged during the year 19.5 6.2
(3.3) (3.7) Provisions used during the year (5.3) (13.1)
- - Unused provisions reversed during the year (1.5) -
84.2 391.6 Provisions at 31.12. 107.8 95.1
Specification of provisions
84.2 80.4 Long-term provisions 92.4 92.7
- 311.2 Short-term provisions 15.4 2.4
84.2 391.6 Provisions at 31.12. 107.8 95.1
The provisions cover expenses associated with the defence of the company’s intellectual property rights, closing down decentralised warehouses and the Group’s
incentive plans.
Pursuant to a production agreement with the manufacturing unit Lundbeck Pharmaceuticals Ltd., Seal Sands, UK, an amount has been provided in the parent
company to cover expected losses and obligations due to impairment of production assets.
Of the total provisions at 31 December 2007, DKK 7.9 million (DKK 11.0 million in 2006) relates to incentive plans. The total provisions for incentive plans are
short-term. Further details about the incentive plans are provided in note 3 Staff costs.
18. Mortgage and bank debt
Mortgage debt
Parent Parent Group Group
2006 2007 2007 2006
DKKm DKKm DKKm DKKm
Mortgage debt by maturity
2.1 2.1 Within 1 year from the balance sheet date 5.1 5.1
2.1 2.1 Between 1 and 2 years from the balance sheet date 2.1 5.1
2.1 2.1 Between 2 and 3 years from the balance sheet date 2.1 2.1
2.1 2.1 Between 3 and 4 years from the balance sheet date 2.1 2.1
2.2 1.1 Between 4 and 5 years from the balance sheet date 1.1 2.2
1,416.3 1,851.2 After more than 5 years from the balance sheet date 1,851.2 1,416.3
1,426.9 1,860.7 Mortgage debt at 31.12. 1,863.7 1,432.9
Specification of mortgage debt
1,424.8 1,858.6 Long-term liabilities 1,858.6 1,427.8
2.1 2.1 Short-term liabilities 5.1 5.1
1,426.9 1,860.7 Mortgage debt at 31.12. 1,863.7 1,432.9
101

18
Notes
18. Mortgage and bank debt – continued
Group
Weighted
average
effective Amortised Nominal
2007
Fixed/ interest cost value Fair value
Currency Expiry floating rate DKKm DKKm DKKm
Mortgage debt DKK 2012 fixed 5.82% 9.6 9.6 9.8
Mortgage debt, bond loan DKK 2035 floating 4.49% 1,404.3 1,646.9 1,428.2
Mortgage debt, bond loan DKK 2037 floating 5.16% 434.4 440.0 440.9
Mortgage debt, bond loan DKK 2034 floating 5.23% 10.2 10.2 10.3
Mortgage debt, bond loan DKK 2034 floating 5.23% 2.2 2.2 2.2
Mortgage debt EUR 2008 fixed 5.82% 3.0 3.0 3.0
Total 1,863.7 2,111.9 1,894.4
2006
Mortgage debt DKK 2012 fixed 5.82% 11.7 11.7 12.2
Mortgage debt, bond loan DKK 2035 floating 3.93% 1,402.8 1,672.4 1,458.7
Mortgage debt, bond loan DKK 2034 floating 3.39% 10.2 10.2 10.2
Mortgage debt, bond loan DKK 2034 floating 3.39% 2.2 2.2 2.2
Mortgage debt EUR 2008 fixed 5.82% 6.0 6.0 6.0
Total 1,432.9 1,702.5 1,489.3
Amortised cost is calculated as the proceeds received less instalments paid plus or minus amortisation of capital losses. Fair value is calculated as the market value
at 31 December.
Parent company
Weighted
average
effective Amortised Nominal
2007
Fixed/ interest cost value Fair value
Currency Expiry floating rate DKKm DKKm DKKm
Mortgage debt DKK 2012 fixed 5.82% 9.6 9.6 9.8
Mortgage debt, bond loan DKK 2035 floating 4.49% 1,404.3 1,646.9 1,428.2
Mortgage debt, bond loan DKK 2037 floating 5.16% 434.4 440.0 440.9
Mortgage debt, bond loan DKK 2034 floating 5.23% 10.2 10.2 10.3
Mortgage debt, bond loan DKK 2034 floating 5.23% 2.2 2.2 2.2
Total 1,860.7 2,108.9 1,891.4
2006
Mortgage debt DKK 2012 fixed 5.82% 11.7 11.7 12.2
Mortgage debt, bond loan DKK 2035 floating 3.93% 1,402.8 1,672.4 1,458.7
Mortgage debt, bond loan DKK 2034 floating 3.39% 10.2 10.2 10.2
Mortgage debt, bond loan DKK 2034 floating 3.39% 2.2 2.2 2.2
Total 1,426.9 1,696.5 1,483.3
Amortised cost is calculated as the proceeds received less instalments paid plus or minus amortisation of capital losses. Fair value is calculated as the market value
at 31 December.
102

18. Mortgage and bank debt – continued
Bank debt
Parent Parent Group Group
2006 2007 2007 2006
DKKm DKKm DKKm DKKm
Bank debt by maturity
2.8 - Within 1 year from the balance sheet date 4.4 55.0
2.8 - Bank debt at 31.12. 4.4 55.0
Specification of bank debt
- - Long-term liabilities - -
2.8 - Short-term liabilities 4.4 55.0
2.8 - Bank debt at 31.12. 4.4 55.0
Group
Weighted
average Nominal
Fixed/ effective value
2007 Currency Expiry floating interest rate DKKm
Loan TRY 2008 fixed 17.90% 4.4
Total 4.4
2006
Overdraft facility SEK 2007 floating 4.07% 1.1
Overdraft facility CZK 2007 floating 2.97% 1.7
Loan EUR 2007 fixed 3.87% 52.2
Total 55.0
Parent company
2007
The parent company had no bank debt at 31 December 2007.
Weighted
average Nominal
Fixed/ effective value
2006 Currency Expiry floating interest rate DKKm
Overdraft facility SEK 2007 floating 4.07% 1.1
Overdraft facility CZK 2007 floating 2.97% 1.7
Total 2.8
103

19-21
Notes
19. Treasury shares
Parent company and Group
Shares of Nominal Share of
DKK 5 nom. value share capital Cost
2007 Number DKKm DKKm
Holding at 01.01.2007 3,963,353 19.8 1.87% 526.4
Additions 8,557,204 42.8 4.13% 1,191.3
Shares cancelled (5,867,644) (29.4) -2.83% (807.4)
Holding at 31.12.2007 6,652,913 33.2 3.21% 910.3
2006
Holding at 01.01.2006 7,523,399 37.6 3.31% 1,016.0
Additions 12,011,862 60.1 5.66% 1,591.1
Shares cancelled (15,571,908) (77.9) -7.34% (2,080.7)
Holding at 31.12.2006 3,963,353 19.8 1.87% 526.4
Additions of treasury shares consist of shares acquired pursuant to the authority granted by the shareholders in general meeting to purchase treasury shares of up
to 10% of the share capital. The shares were purchased in the open market, and the buyback programme has been implemented with due consideration to market
conditions and current legislation and provisions on share buybacks.
At the annual general meeting held on 24 April 2007, it was resolved to lower the company’s share capital by DKK 29,338,220 nominal value of the company’s
portfolio of treasury shares, corresponding to 5,867,644 shares.
The market value of the entire holding of treasury shares at 31 December 2007 was DKK 918.1 million (DKK 617.9 million in 2006). Deferred tax on shares held
for less than three years was DKK 6.4 million (DKK 25.2 million in 2006).
20. Contractual obligations
Rental and lease obligations
Lundbeck has obligations amounting to DKK 511.1 million (DKK 547.5 million in 2006) in the form of property leases and leasing of operating equipment, primarily
cars. The future rental and lease payments can be analysed as follows:
2007 2007 2007 2006 2006 2006
Land and Operating Land and Operating
buildings equipment Total buildings equipment Total
DKKm DKKm DKKm DKKm DKKm DKKm
Less than 1 year 103.4 56.7 160.1 93.7 73.4 167.1
Between 1 and 5 years 236.4 84.6 321.0 235.6 87.0 322.6
More than 5 years 30.0 - 30.0 57.7 0.1 57.8
Total 369.8 141.3 511.1 387.0 160.5 547.5
Rental and lease payments recognised in the income statement in 2007 amounted to DKK 193.0 million (DKK 196.0 million in 2006).
Other purchase obligations
The parent company has undertaken to purchase property, plant and equipment in the amount of DKK 52.7 million (DKK 177.9 million in 2006).
Research collaborations
The Group is part of multi-year research collaboration projects comprising minimum research and contractual obligations in the order of DKK 32 million
(DKK 28 million in 2006). The total amount of the obligations can increase substantially in line with the favourable development of the projects.
Other contractual obligations
The parent company has capital contribution obligations amounting to DKK 33.2 million (DKK 45.2 million in 2006) and has entered into various service agreements
amounting to DKK 33.2 million (DKK 48.6 million in 2006).
104

21. Contingent liabilities
Forest
See note 2 Revenue in respect of the consequences of any launch of generic escitalopram in the USA.
The prepayment from Forest has been translated at the exchange rate at the transaction date or at the forward rate and recognised in the balance sheet at
DKK 839.5 million (DKK 854.7 million in 2006). If the translation had been made at the exchange rate at the balance sheet date, the prepayment would have
amounted to DKK 737.7 million (DKK 738.5 million in 2006).
Letters of intent and bank guarantees
The parent company has entered into agreements to cover operating losses in certain subsidiaries. The parent company has issued letters of intent to subsidiaries
in a total amount of DKK 7.8 million (DKK 67.0 million in 2006). Furthermore, the parent company’s bankers have issued bank guarantees to third parties in
the amount of DKK 10.1 million (DKK 20.1 million in 2006). The Group’s bankers have issued bank guarantees to third parties in the amount of DKK 55.3 million
(DKK 66.6 million in 2006). The parent company has evaluated that the fair value of guarantees is DKK 0 (DKK 0 in 2006).
Pending legal proceedings
The Group is involved in legal proceedings, including cases with generic competitors. In the opinion of management, the outcome of these proceedings will not
have a material impact on the Group’s financial position beyond the amount provided for in the financial statements. Due to uncertainty about the outcome of
the legal proceedings, the final amount of the provision is still unknown. Moreover, as described on page 8, the Group is party to legal proceedings in Germany
against a number of businesses. The company does not expect that this will materially affect its financial position, results of operations or cash flows.
Industry obligations
The Group has return obligations normal for the industry. Management expects no major loss on these obligations.
Joint taxation
The parent company is liable jointly and severally with the other jointly taxed companies for the total income taxes under the joint taxation scheme for the income
year 2004 and earlier. As from 2005, H. Lundbeck A/S and Danish subsidiaries are subject to national joint taxation with LFI a/s and other Danish affiliated
companies. The companies under this joint taxation scheme are separately liable for the payment of own taxes until these have been settled with the administration
company (LFI a/s). After such time, LFI a/s is liable for the combined taxes under the joint taxation scheme.
105

22
Notes
22. Financial instruments
Capital structure
Lundbeck operates in an industry characterised by frequent shifts in market situation that involve a need for in-licensing and acquisition activities. To date, the
company has largely been self-financing in respect of these activities.
Despite a strong cash flow, the company intends to maintain financial resources in the form of cash and binding loan commitments to allow for flexible operations
in case of a rapid shift in the market situation. At 31 December 2007, the company had binding loan commitments for DKK 1.8 billion from two financial
institutions. In addition, the company has a large number of non-binding credit facilities for use in its day-to-day operations. At 31 December 2007, these
amounted to DKK 0.4 billion.
Furthermore, Lundbeck manages its capital structure based on a wish to carry an investment-grade rating. The company does not presently hold an actual rating
from a recognised rating agency, but several financial institutions believe that, on the basis of a calculated implied rating at 31 December 2007, Lundbeck would
be assigned a rating in the A- to BBB+ range using Standard & Poor’s rating scale. The lowest investment-grade rating is BBB-.
The company’s treasury policy, which deals with financial resources, foreign currency exposure, securities portfolio and loan portfolio, is reviewed once a year by
the Supervisory Board. In addition, the Executive Management defines rules concerning selecting financial collaboration partners, commitment lines and types of
business.
Liquidity exceeding the requirement for business development and general business purposes is primarily distributed as dividends or used for share buyback
purposes. The company pursues a policy of distributing between 25% and 35% of the profit for the year as dividends.
Other than small operational changes, no changes were made to the company’s treasury policy compared with 2006.
Foreign currency risks
Foreign currency management is handled centrally by the parent company. The company hedges a significant part of the Group’s anticipated cash flows for a
period of approximately 12 months.
Currency management focuses on risk minimisation and is carried out in conformity with the foreign currency policy approved by the Supervisory Board. The
hedging consists partly of a fixed minimum hedge and partly of a variable part. The fixed part is hedged by forward contracts classified as hedging instruments
and meeting the accounting criteria for hedging future cash flows. Changes in the fair value of these contracts are taken to equity as they arise and - on realisation
of the hedged cash flow - transferred from equity for inclusion in the same item as the hedged cash flow.
The variable part, which is hedged partly by forward contracts and partly by option contracts, is used to hedge the remaining foreign currency risks in the short
term. These contracts are not classified as hedging contracts but as trading contracts, and changes in the fair value are recognised as financials as they arise.
Due to the company’s continuous hedging of net currency flows, a falling exchange rate will not affect the company in the short term. Conversely, the company
will not benefit fully from a rising exchange rate in the short term, either.
106

22. Financial instruments – continued
Net forward exchange contracts and FX swaps outstanding for the Group and the parent company
Hedging part Exchange gain/ Average
Hedge value Market value Exchange (loss) recognised hedge prices
according to (forward gain/(loss) in the income of existing
the hedge exchange recognised in statement/ forward exchange
2007
principle contracts) equity balance sheet contracts Maturity period
DKKm DKKm DKKm DKKm DKK
AUD 88.4 86.0 2.4 (2.7) 454.32 Jan - Dec 2008
CAD 158.6 160.9 (2.3) 2.9 519.66 Jan - Dec 2008
CHF 57.4 56.5 0.9 2.8 455.62 Jan - Dec 2008
CZK 27.5 28.1 (0.6) (0.3) 27.56 Jan - Dec 2008
EUR 82.1 82.1 - 0.5 746.45 Jan - Dec 2008
GBP 80.0 85.9 (5.9) 1.3 1,061.15 Jan - Dec 2008
HUF - - - (0.5) -
ILS 21.3 21.0 0.3 0.5 133.35 Jan - Dec 2008
JPY 26.2 27.4 (1.2) (3.6) 4.74 Jan - Dec 2008
MXN 73.5 72.7 0.8 0.7 47.66 Jan - Dec 2008
NOK 23.1 23.3 (0.2) (0.4) 92.84 Jan - Dec 2008
SKK 42.3 42.4 (0.1) (0.4) 22.29 Jan - Dec 2008
TRY 87.8 93.7 (5.9) (8.1) 417.91 Jan - Mar 2008
USD 2,442.1 2,337.9 104.2 126.9 530.86 Jan - Dec 2008
ZAR 40.0 39.8 0.2 2.4 72.97 Jan - Sep 2008
Forward contracts 3,250.3 3,157.7 92.6 122.0
2006
AUD 75.4 76.5 (1.1) (1.6) 436.33 Jan - Dec 2007
CAD 183.7 173.6 10.1 (8.8) 514.78 Jan - Dec 2007
CHF 57.3 56.0 1.3 2.0 473.25 Jan - Dec 2007
CZK 21.2 21.8 (0.6) 0.2 26.41 Jan - Dec 2007
EUR 283.9 283.6 0.3 - 746.22 Jan - Dec 2007
GBP 79.7 77.3 2.4 3.3 1,072.68 Jan - Dec 2007
HUF 5.4 5.9 (0.5) 0.2 2.73 Jan - Jul 2007
JPY 29.9 32.2 (2.3) (1.3) 5.17 Jan - Dec 2007
MXN 28.3 28.3 - (0.3) 51.22 Jan - Dec 2007
NOK 27.7 27.1 0.6 0.2 91.76 Jan - Dec 2007
SEK - - - (0.4) -
TRY 45.2 47.5 (2.3) (0.3) 375.55 Jan - Mar 2007
USD 1,848.9 1,801.6 47.3 (35.9) 577.79 Jan - Dec 2007
ZAR 56.0 54.1 1.9 1.4 83.20 Jan - Dec 2007
Forward contracts 2,742.6 2,685.5 57.1 (41.3)
The exchange difference between the contract value and the market value of the concluded forward exchange contracts at 31 December 2007 represented a gain
of DKK 99.0 million (DKK 56.1 million in 2006). There were no currency options or FX swaps under the hedging part at 31 December 2007 and 31 December 2006.
The company’s inefficiency on hedging, cf. IAS 39 Financial instruments: Recognition and measurement, relates to few contracts reclassified to trading contracts.
The profit impact at the date of reclassification was a gain of DKK 0.4 million (loss of DKK 33.2 million in 2006).
107

22
Notes
22. Financial instruments – continued
Trading part
Average
Market value Exchange hedge prices
(forward gain/(loss) of existing
exchange recognised in forward exchange
contracts and the income contracts and
2007
FX swaps) statement FX swaps Maturity period
DKKm DKKm DKK
CAD 10.4 (0.1) 517.54 Apr 2008
CHF - 0.5 -
GBP - 0.1 -
TRY - 0.2 -
USD - 1.4 -
Forward contracts 10.4 2.1
EUR 186.4 - 745.56 Jan 2008
FX swaps 186.4 -
Total trading 196.8 2.1
2006
CAD 4.9 2.4 493.31 Jan 2007
CHF 7.0 0.1 475.55 Jun 2007
EUR - 0.1 -
TRY - 0.3 -
USD - (10.0) -
ZAR - 0.8 -
Forward contracts 11.9 (6.3)
The exchange difference between the contract value and the market value of the concluded forward exchange contracts and FX swaps at 31 December 2007
was DKK 0 million (loss of DKK 0.7 million in 2006). There were no currency options under the trading part at 31 December 2007 and 31 December 2006.
Deferred recognition of currency gains/losses taken to equity
Parent Parent Group Group
2006 2007 2007 2006
DKKm DKKm DKKm DKKm
(190.9) 57.1 Deferred exchange gains/losses at 01.01. 57.1 (190.9)
173.5 157.9 Exchange adjustments for the year, hedging, taken to equity 157.9 173.5
5.4 4.9 Realised exchange gains/losses, hedging, transferred to revenue 4.9 5.4
35.9 (126.9) Realised exchange gains/losses, hedging, transferred to prepayments from Forest (balance sheet) (126.9) 35.9
33.2 (0.4) Realised exchange gains/losses, trading, transferred to net financials (transferred from hedging) (0.4) 33.2
57.1 92.6 Deferred exchange gains/losses at 31.12. 92.6 57.1
108

22. Financial instruments – continued
Specification of monetary assets and liabilities for the most important currencies at 31 December
Parent Parent Group Group
2006 2007 2007 2006
DKKm DKKm Monetary assets DKKm DKKm
3.0 1.3 AUD 34.2 49.5
9.2 0.8 CAD 114.1 94.3
2.6 3.4 CHF 27.6 30.1
5.0 3.2 GBP 72.4 7.3
0.3 0.5 TRY 74.6 53.2
145.3 313.8 USD 343.8 300.0
Monetary liabilities
0.7 - AUD 13.8 11.4
- 0.5 CAD 36.0 21.8
5.2 0.2 CHF 23.7 11.5
31.4 36.2 GBP 81.5 40.5
- - TRY 29.9 24.1
19.5 35.0 USD 96.0 128.2
Due to the long-standing fixed exchange rate policy in Denmark, the foreign currency risk for EUR is considered immaterial, and EUR is therefore not included in
the list above.
At the end of 2007, 100% of the company’s anticipated cash flows for 2008 in USD were hedged.
Estimated impact on profit and equity from a 5% fluctuation in year-end exchange rates of the most important currencies
2007
AUD CAD CHF GBP TRY USD
DKKm DKKm DKKm DKKm DKKm DKKm
Profit 2.2 1.0 1.0 24.4 - 39.2
Equity (1.8) (6.4) (1.6) 30.0 (3.5) (77.6)
2006
Profit 1.9 1.3 0.5 11.0 (0.2) 38.0
Equity (1.6) (6.6) (2.0) 14.5 (2.4) (52.1)
The profit impact is included in the impact on equity.
The company’s USD income derives primarily from sales to Forest. According to the Group’s accounting policies, the minimum price is recognised as income
at the time of invoicing, and the excess amount is recognised in the balance sheet as a prepayment. Prepayments and any remaining settlement will be recognised
as Forest subsequently resells the products. Income and expenses relating to hedging contracts covering this part of the hedged cash flows are recognised in the
balance sheet together with the prepayments and subsequently recognised in the income statement as Forest resells the products. At 31 December 2007, this
amount was a gain of DKK 105.7 million (a loss of DKK 69.4 million in 2006) which has been recognised together with the prepayments.
Exchange adjustment of associates according to the equity method
Group Group
2007 2006
DKKm DKKm
Exchange adjustment at 01.01. (1.9) (1.4)
Exchange adjustment for the year - (0.5)
Exchange adjustment at 31.12. (1.9) (1.9)
109

22-23
Notes
22. Financial instruments – continued
Interest rate risks
Interest rate risk management is handled centrally by the parent company. Through the parent company’s treasury policy, the Supervisory Board has approved the limits
for borrowing and investment. Loans secured by real property must be approved by the company’s Supervisory Board. To hedge the interest rate risk on loans, the Supervisory
Board has approved the use of interest rate swaps and forward-rate agreements (FRAs).
Bond investments may only be made in Danish government and mortgage bonds. For managing the interest rate risk on the securities portfolio (the securities portfolio
includes bonds and money market deposits), the company applies a duration target capped at five years for the entire portfolio. The return on the bond portfolio and the
money market deposits in 2007 was DKK 74.5 million (DKK 7.5 million in 2006), corresponding to a return of 3.63% p.a. (0.48% p.a. in 2006). Lundbeck’s benchmark in
2007 was a bond portfolio with a duration of two years. The return on the benchmark portfolio was 3.47% p.a. in 2007 (1.98% p.a. in 2006). At 31 December 2007, the
securities portfolio had a duration of 1.02 years, which translates into a gain/loss of DKK 28.6 million if interest rates should fall/rise by 1 percentage point.
Specification of maturity dates for assets and liabilities of the Group
Less than Between More than Effective
1 year 1 and 5 years 5 years Total interest rates
2007 DKKm DKKm DKKm DKKm
Assets
Receivables 1 2,367.6 60.6 - 2,428.2 0%
Deferred tax assets 162.7 - - 162.7 0%
Securities 2 902.9 400.7 232.1 1,535.7 4-6%
Associates - - 82.9 82.9 0%
Available-for-sale financial assets 3 - 150.7 - 150.7 0%
Fixed-term deposits 1,271.7 - - 1,271.7 3-11%
Other cash resources 500.3 - - 500.3 0-16%
Total financial assets 5,205.2 612.0 315.0 6,132.2
Liabilities
Mortgage debt 5.1 7.4 1,851.2 1,863.7 4-6%
Employee bonds - 12.6 18.9 31.5 4-6%
Other payables 2,614.2 3.5 - 2,617.7 0%
Bank debt 4.4 - - 4.4 18%
Total financial liabilities 2,623.7 23.5 1,870.1 4,517.3
2006
Assets
Receivables 1 2,013.2 63.6 - 2,076.8 0%
Deferred tax assets 279.1 - - 279.1 0%
Securities 2 5.4 1,004.1 192.1 1,201.6 3-6%
Associates - - 166.9 166.9 0%
Available-for-sale financial assets 3 - 127.6 - 127.6 0%
Fixed-term deposits 695.7 - - 695.7 3-9%
Other cash resources 480.9 - - 480.9 0-18%
Total financial assets 3,474.3 1,195.3 359.0 5,028.6
Liabilities
Mortgage debt 5.1 11.5 1,416.3 1,432.9 4-6%
Employee bonds - - 12.6 12.6 4-5%
Other payables 2,632.8 1.8 - 2,634.6 0%
Bank debt 55.0 - - 55.0 3-4%
Total financial liabilities 2,692.9 13.3 1,428.9 4,135.1
1) Including other receivables and receivables from associates.
2) The securities are classified as financial assets measured at fair value with value adjustment through the income statement.
3) The value of available-for-sale financial assets at 31 December 2007 was DKK 150.7 million (DKK 127.6 million in 2006). Of this amount, 84% (89% in 2006) relates to the investments
in Burrill Biotechnology Capital Fund, L.P. and Nordic Biotech K/S.
110

23. Related parties
Lundbeck’s related parties are
- The company’s principal shareholder, LFI a/s, Vestagervej 17, DK-2900 Hellerup, which is wholly owned by the Lundbeck Foundation, and the Lundbeck Foundation
- Companies in which the principal shareholder exercises controlling influence, i.e. ALK-Abelló A/S
- The company’s subsidiaries
- The company’s associates
- Members of the company’s Executive Management and Supervisory Board as well as close relatives of these persons
- Companies in which members of the company’s Executive Management and Supervisory Board as well as close relatives of these persons exercise significant influence
Transactions and balances with the company’s principal shareholder
There have been no transactions or balances with the company’s principal shareholder other than dividends, the share buyback programme, see The Lundbeck share on
page 40, and the payment of on-account tax and residual tax of DKK 664.2 million (repayment of excess tax in the amount of DKK 34.4 million in 2006) concerning the
parent company and Danish subsidiaries, see Joint taxation in note 21 Contingent liabilities. LFI a/s/the Lundbeck Foundation have a controlling influence in H. Lundbeck A/S.
Transactions and balances with ALK-Abelló A/S
There have been no transactions or balance with ALK-Abelló A/S.
Transactions and balances with subsidiaries Parent Parent
2007 2006
DKKm DKKm
Sale of goods 4,325.0 3,672.9
Purchase of goods 299.3 383.3
Sale of production services - 2.9
Purchase of production services 14.0 10.8
Cover of impairment losses in subsidiaries 311.1 -
Purchase of distribution services 188.7 279.9
Sale of administrative services 4.5 3.7
Purchase of administrative services 98.1 34.8
Purchase of research and development services 456.0 440.8
Dividend 120.2 75.6
Financial income 24.2 26.3
Financial expenses 42.7 30.1
Long-term receivables from subsidiaries 609.0 745.9
Short-term receivables from subsidiaries 485.9 407.3
Long-term payables to subsidiaries 1,067.3 886.7
Short-term payables to subsidiaries 296.4 394.6
Provision to cover impairment loss in subsidiaries 311.1 -
Transactions and balances with subsidiaries include on-account tax payments made by the parent company on behalf of the subsidiaries. Transactions and balances
with subsidiaries are eliminated on consolidation.
Transactions and balances with associates
Parent Parent Group Group
2006 2007 2007 2006
DKKm DKKm DKKm DKKm
0.6 0.7 Sale of administrative services 0.7 0.6
0.6 0.8 Financial income 0.8 0.6
19.2 - Long-term receivables from associates - 19.2
Associates comprise CF Pharma Gyógyszergyártó Kft., Hungary, and LifeCycle Pharma A/S, Denmark.
Transactions and balances with the company’s Executive Management and Supervisory Board
In addition to the transactions with members of the company’s Executive Management and Supervisory Board outlined in note 3 Staff costs, the company has paid
dividend on shares in H. Lundbeck A/S held by members of the Executive Management and Supervisory Board. There are no balances with the company’s Executive
Management and Supervisory Board.
Transactions and balances with other related parties
Lundbeck has granted contributions of DKK 4.0 million (DKK 3.4 million in 2006) to Lundbeck International Neuroscience Foundation. Other than this, there have been no
material transactions and balances with related parties.
111

24-28
Notes
24. Segment information
Primary segments
The Group’s activities are exclusively in the business segment of ‘pharmaceuticals for the treatment of illnesses in the field of CNS’.
Secondary segments
The Group’s revenue is divided into the following secondary geographical segments:
Revenue Revenue
2007 2006
DKKm DKKm
Denmark 73.7 238.5
Rest of Europe 5,504.4 5,103.2
USA 2,652.0 1,957.6
Rest of the world 2,754.8 1,921.7
Total 10,984.9 9,221.0
The Group’s assets and additions to intangible assets and property, plant and equipment, analysed by secondary geographical segment, are as follows:
Additions to Additions to
intangible intangible
assets and assets and
property, plant property, plant
Assets 1 Assets 1 and equipment and equipment
2007 2006 2007 2006
DKKm DKKm DKKm DKKm
Denmark 8,795.8 7,691.2 644.2 566.3
Rest of Europe 2,185.5 2,572.6 34.5 58.9
USA 526.8 485.8 62.8 184.3
Rest of the world 655.2 602.3 6.6 13.0
Total 12,163.3 11,351.9 748.1 822.5
1) Exclusive of deferred tax assets.
25. Earnings per share
2007 2006
Profit for the year (DKKm) 1,769.5 1,106.9
Average number of outstanding shares (’000 shares) 210,402 221,129
Average number of treasury shares (’000 shares) (5,412) (10,036)
Average number of shares exclusive of treasury shares (’000 shares) 204,990 211,093
Average number of warrants, fully diluted (’000 warrants) 163 346
Average number of shares, fully diluted (’000 shares) 205,153 211,439
Earnings per share (EPS) (DKK) 8.63 5.24
Diluted earnings per share (DEPS) (DKK) 8.63 5.23
The net profit for the year equals the profit allocated to shareholders of the parent company.
Warrants comprised by the warrant scheme established in 2005 for the Executive Management and Danish and foreign executives, a total of 647,000 warrants, were
not in the money in 2007 and were therefore not exercised. Warrants covered by the warrant scheme established in 2007 for the Executive Management and Danish
and foreign executives, a total of 844,500 warrants, are exercisable from 1 August 2008. The warrants are not included in the calculation of earnings per share (EPS)
and diluted earnings per share (DEPS). The warrants may have a longer term dilutive effect on earnings per share and diluted earnings per share.
112

25. Earnings per share – continued
Warrants comprised by the warrant schemes established in 2005 and 2007, respectively, may be exercised within the given subscription periods if the price of the
Lundbeck share exceeds the fixed exercise price of DKK 179.00 for the 2005 plan and DKK 156.00 for the 2007 plan. At 31 December 2007, 647,000 warrants from
the 2005 plan and 844,500 warrants from the 2007 plan remained outstanding.
See note 3 Staff costs for additional information on incentive plans.
26. Adjustments
Parent Parent Group Group
2006 2007 2007 2006
DKKm DKKm DKKm DKKm
465.3 444.0 Amortisation and depreciation 915.8 526.0
- - Income from reduced ownership interest - (154.6)
3.6 23.4 Incentive plans 16.4 -
- - Change in pension obligations (15.8) 13.3
(3.3) 307.4 Change in provisions 12.7 (6.9)
465.6 774.8 Adjustments 929.1 377.8
27. Working capital changes
Parent Parent Group Group
2006 2007 2007 2006
DKKm DKKm DKKm DKKm
(35.0) 187.9 Change in inventories 219.3 108.3
114.9 (302.1) Change in receivables (397.3) (75.7)
(504.7) 268.6 Change in short-term debt 77.2 (384.8)
(424.8) 154.4 Change in working capital (100.8) (352.2)
28. Business combinations
2007
There were no business combinations in 2007.
2006
In 2006, Lundbeck acquired the SGS-518 development project by way of the company Saegis Pharmaceuticals, Inc. In 2006, the company merged into Cognitive
Therapeutics, LLC, which was wound up in 2007. The development project was in this connection legally assigned to Lundbeck Cognitive Therapeutics A/S in Denmark.
Date of Shareholding Voting Cost
Name Primary activity acquisition acquired share acquired DKKm
Saegis Pharmaceuticals, Inc., Delaware, USA Development of pharmaceuticals 20.12.2006 100% 100% 48.5
Carrying amount Fair value
under IFRS adjustment Fair value
DKKm DKKm DKKm
Ongoing development projects - 66.7 66.7
Tools and equipment 0.1 (0.1) -
Other receivables 0.4 - 0.4
Cash 3.1 - 3.1
Total assets 3.6 66.6 70.2
Trade payables 7.2 - 7.2
Non-interest-bearing debt 0.4 14.1 14.5
Total liabilities 7.6 14.1 21.7
Net assets (4.0) 52.5 48.5
113

28-30
Notes
28. Acquisition of company – continued
Cost of acquisition
Fair value
DKKm
Cash payment in January 2007 18.5
Deferred, expected milestone payment in 2007 28.2
46.7
Transaction costs 1.8
Total cost of acquisition 48.5
Goodwill on acquisition of company -
Cost, paid in cash -
Cash acquired, see above 3.1
Net cash flow impact 3.1
The acquisition price of Saegis Pharmaceuticals Inc., nominally DKK 161.5 million, will be paid in four instalments as the acquired project SGS-518 develops positively
and the regulatory approvals are obtained. The first instalment fell due in January 2007, while the remaining instalments are expected to be paid over a period of
six years. The opening balance sheet and the cost of the company only included the instalments expected to fall due in 2007, a total of DKK 46.7 million. In 2007,
a total of DKK 21.3 million was paid. If the project progresses as expected, and the remaining part of the acquisition price falls due, these payments will be added
to the acquired project.
In the consolidated profit for 2006, Saegis Pharmaceuticals Inc. is recognised at DKK 0, as the company was aquired immediately prior to the balance sheet date.
If the company had been acquired effective 1 January 2006, revenue for 2006 would have been DKK 9,227.8 million and profit for the year DKK 1,085.4 million.
29. Cash resources
Parent Parent Group Group
2006 2007 2007 2006
DKKm DKKm DKKm DKKm
695.7 1,271.0 Fixed-term deposits 1,271.7 695.7
76.7 118.2 Other cash resources 500.3 480.9
772.4 1,389.2 Cash at 31.12. 1,772.0 1,176.6
1.2 641.3 Securities with a maturity of less than 3 months 1 641.3 5.4
1,180.8 876.0 Securities with a maturity of more than 3 months 1 894.4 1,196.2
1,954.4 2,906.5 Cash and securities at 31.12. 3,307.7 2,378.2
1,748.9 1,750.0 Unused guaranteed credit facilities at 31.12. 2 1,750.0 1,748.9
226.7 310.1 Unused credit facilities at 31.12. 419.3 327.9
3,930.0 4,966.6 Cash resources at 31.12. 5,477.0 4,455.0
1) The securities holding consists exclusively of Danish government and mortgage bonds, which are classified as financial assets measured at fair value with value adjustments through the income statement.
2) The unused guaranteed credit facilities consist of a 364-day credit facility of DKK 1 billion and a long-term credit facility of DKK 750 million expiring in 2010. Both credit facilities are guaranteed by
Danish banks.
114

30. Releases from H. Lundbeck A/S in 2007
No. Date
Subject
317 21.12.2007 Lundbeck expands agreement with PAION for
desmoteplase
316 20.12.2007 Financial calendar 2008
315 18.12.2007 Share Buyback in H. Lundbeck A/S
314 18.12.2007 Lu AA21004 for the treatment of mood and anxiety
disorders enters into clinical phase III
313 06.12.2007 Share Buyback in H. Lundbeck A/S
312 29.11.2007 Forest Laboratories and Lundbeck announce positive
results of Lexapro® phase III study in adolescents with
major depression
311 27.11.2007 Share Buyback in H. Lundbeck A/S
310 27.11.2007 Announcement of transactions with shares and linked
securities in H. Lundbeck A/S made by executives and
their closely associated persons and legal entities
309 23.11.2007 Announcement of transactions with shares and linked
securities in H. Lundbeck A/S made by executives and
their closely associated persons and legal entities
308 22.11.2007 Announcement of transactions with shares and linked
securities in H. Lundbeck A/S made by executives and
their closely associated persons and legal entities
307 21.11.2007 Announcement of transactions with shares and linked
securities in H. Lundbeck A/S made by executives and
their closely associated persons and legal entities
306 20.11.2007 Announcement of transactions with shares and linked
securities in H. Lundbeck A/S made by executives and
their closely associated persons and legal entities
305 19.11.2007 Announcement of transactions with shares and linked
securities in H. Lundbeck A/S made by executives and
their closely associated persons and legal entities
304 16.11.2007 Share Buyback in H. Lundbeck A/S
303 14.11.2007 Interim report for the third quarter of 2007
302 13.11.2007 Novel agent for treatment of Parkinson’s disease in
clinical development
301 07.11.2007 Share Buyback in H. Lundbeck A/S
300 24.10.2007 Lu AA24530 for the treatment of mood and anxiety
disorders enters into clinical phase II
299 18.10.2007 Share Buyback in H. Lundbeck A/S
298 18.10.2007 Novel agent for treatment of cerebral stroke and other
diseases with neuronal damage in clinical phase I
297 09.10.2007 Share Buyback in H. Lundbeck A/S
296 02.10.2007 Lu AA21004 shows highly significant results in clinical
phase II trial
295 24.09.2007 Lundbeck in-licenses Circadin®, a drug approved for
the treatment of primary insomnia from Neurim
Pharmaceuticals
294 12.09.2007 Share Buyback in H. Lundbeck A/S
293 05.09.2007 Federal appeals court upholds Lexapro® patent decision
292 05.09.2007 Lundbeck and Takeda form alliance to develop and
commercialize a portfolio of novel compounds in the
US and Japan for the treatment of mood and anxiety
disorders
291 31.08.2007 Share Buyback in H. Lundbeck A/S
290 31.08.2007 Total number of voting rights and size of share capital
in H. Lundbeck A/S as of 31 August 2007
289 30.08.2007 Share capital increase as a result of employees
exercising warrants
No. Date
Subject
288 27.08.2007 Announcement of transactions with shares and linked
securities in H. Lundbeck A/S made by executives and
their closely associated persons and legal entities
287 24.08.2007 Flemming Lindeløv is leaving the Lundbeck Supervisory
Board
286 23.08.2007 Share Buyback in H. Lundbeck A/S
285 21.08.2007 Share capital increase as a result of employees
exercising warrants
284 15.08.2007 Interim report for the second quarter of 2007
283 13.08.2007 Share Buyback in H. Lundbeck A/S
282 03.08.2007 Reduction of the share capital of H. Lundbeck A/S
281 02.08.2007 Share Buyback in H. Lundbeck A/S
280 04.07.2007 Share Buyback in H. Lundbeck A/S
279 20.06.2007 Share Buyback in H. Lundbeck A/S
278 13.06.2007 New incentive plan in the Lundbeck Group
277 11.06.2007 Share Buyback in H. Lundbeck A/S
276 04.06.2007 Cipralex® demonstrates superiority to duloxetine for
acute treatment of depression in new study
275 01.06.2007 Total number of voting rights and size of share capital
in H. Lundbeck A/S as of 1 June 2007
274 31.05.2007 Top line results of phase III study in acute ischemic
stroke (DIAS-2) do not demonstrate difference
between desmoteplase and placebo
273 24.05.2007 Share capital increase as a result of employees
exercising warrants
272 23.05.2007 Nalmefene license enters into force
271 21.05.2007 Share Buyback in H. Lundbeck A/S
270 18.05.2007 Announcement of transactions with shares and linked
securities in H. Lundbeck A/S made by executives and
their closely associated persons and legal entities
269 15.05.2007 Share capital increase as a result of employees
exercising warrants
268 10.05.2007 New Executive Vice President, CFO, in H. Lundbeck A/S
267 09.05.2007 Interim report for the first quarter of 2007
266 24.04.2007 H. Lundbeck A/S held its Annual General Meeting on
24 April 2007 at SAS Radisson Falconer Hotel &
Conference Center
265 04.04.2007 Share Buyback in H. Lundbeck A/S
264 04.04.2007 Notice of annual general meeting
263 28.03.2007 Merck & Co., Inc. and Lundbeck discontinue joint
development program for gaboxadol, an investigational
compound for insomnia
262 21.03.2007 Share capital increase as a result of employees
exercising warrants
261 13.03.2007 Share capital increase as a result of employees
exercising warrants
260 07.03.2007 Annual Report 2006
259 01.03.2007 Share Buyback in H. Lundbeck A/S
258 20.02.2007 Share Buyback in H. Lundbeck A/S
257 31.01.2007 Share Buyback in H. Lundbeck A/S
256 22.01.2007 Change in H. Lundbeck A/S Executive Management
255 12.01.2007 Cipralex® approved for the treatment of obsessive
compulsive disorder (OCD)
254 04.01.2007 Financial calendar 2007
115

Management
statement
We have today presented the annual report of H. Lundbeck A/S for the financial year 1 January - 31 December 2007.
The annual report is prepared in accordance with the International Financial Reporting Standards (IFRS) as issued by the IASB as well as IFRS as adopted
by the EU and additional Danish disclosure requirements for annual reports of listed companies. We consider the accounting policies to be appropriate.
Accordingly, the annual report gives a true and fair view of the Group’s and the parent company’s financial position, cash flows and results of operations.
We recommend that the annual report be approved at the Annual General Meeting.
Copenhagen, 4 March 2008
Executive Management
Claus Bræstrup
President and CEO
Anders Götzsche
Executive Vice President, CFO
Lars Bang
Executive Vice President
Stig Løkke Pedersen
Executive Vice President
Supervisory Board
Per Wold-Olsen Thorleif Krarup Kim Rosenville Christensen
Chairman
Deputy Chairman
Peter Kürstein Mats Pettersson Birgit Bundgaard Rosenmeier
William Watson
Jes Østergaard
116

Independent
auditors’ report
To the shareholders of H. Lundbeck A/S
We have audited the annual report of H. Lundbeck A/S for the financial year 1 January to 31 December 2007. The annual report comprises the statement
by management on the annual report, management’s review, the income statement, the balance sheet, the statement of changes in equity, the
cash flow statement and the notes to the financial statements, including the accounting policies. The annual report has been prepared in accordance
with International Financial Reporting Standards (IFRS) as issued by the IASB as well as IFRS as adopted by the EU and additional Danish disclosure
requirements for listed companies.
Management’s responsibility for the annual report
Management is responsible for the preparation and fair presentation of an annual report in accordance with International Financial Reporting Standards
(IFRS) as issued by the IASB as well as IFRS as adopted by the EU and additional Danish disclosure requirements for listed companies. This responsibility
includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of an annual report that is free
from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates
that are reasonable in the circumstances.
Auditor’s responsibility and basis of opinion
Our responsibility is to express an opinion on the annual report based on our audit. We conducted our audit in accordance with Danish and International
Standards on auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable
assurance that the annual report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the annual report. The procedures selected
depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the annual report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of an annual report
in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by management, as well as evaluating the overall presentation of the annual report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Our audit has not resulted in any qualification.
Opinion
In our opinion, the annual report gives a true and fair view of the Group’s and the parent company’s financial position at 31 December 2007 and of
their financial performance and their cash flows for the financial year 1 January to 31 December 2007 in accordance with International Financial
Reporting Standards (IFRS) as issued by the IASB as well as IFRS as adopted by the EU and additional Danish disclosure requirements for listed companies.
Copenhagen, 4 March 2008
Deloitte
Statsautoriseret Revisionsaktieselskab
Grant Thornton
Statsautoriseret Revisionsaktieselskab
Stig Enevoldsen Anders Dons Svend Ørjan Jensen Ole Fabricius
State Authorised State Authorised State Authorised State Authorised
Public Accountant Public Accountant Public Accountant Public Accountant
117

Supervisory
Board
At 31 December 2007
Mats Pettersson
Elected at the 2003 General Meeting
Born 7 November 1945
Member, Remuneration Committee
Directorships
Ablynx NV
SwedenBio AB (deputy chairman)
to-BBB Holding B.V.
Kim Rosenville Christensen
Kim Rosenville Christensen
Elected by the employees in 2006
Born 17 April 1959
Synthesis Operator
Birgit Bundgaard Rosenmeier
Elected by the employees in 1993
Born 12 August 1952
Qualified Person 1st Deputy
Peter Kürstein
Elected at the 2001 General Meeting
Born 28 January 1956
President and CEO, Radiometer A/S
Chairman, Audit Committee
Directorships
Foss A/S (chairman)
Radiometer Medical ApS
118

William Watson
Elected by the
employees in 2006
Born 28 October 1968
Head of Scientific
Licensing
Per Wold-Olsen
Chairman
Elected at the 2007 General Meeting
Born 6 November 1947
Chairman, Remuneration Committee
Member, Audit Committee
Directorships
BankInvest Biomedical Venture Advisory Board
Gilead Global Advisory Board (chairman)
Glyconics (deputy chairman)
PharmaNet
Thorleif Krarup
Deputy chairman
Elected at the 2004 General Meeting
Born 28 August 1952
Member, Audit Committee
Directorships
ALK-Abelló A/S (deputy chairman)
Bang & Olufsen A/S
Brightpoint, Inc.
Exiqon A/S (chairman)
Group 4 Securicor plc
LFI a/s (deputy chairman)
Lundbeck Foundation
Sport One Danmark A/S (chairman)
Jes Østergaard
Elected at the 2003 General Meeting
Born 5 March 1948
President, ilochip A/S
(until 1 February 2008)
Member, Remuneration Committee
Directorships
aCROnordic A/S
Aresa A/S
ilochip A/S
LFI a/s
Lundbeck Foundation
Scion-DTU a/s
119

Executive
Management
At 31 December 2007
Claus Bræstrup
Born 18 January 1945
President and CEO
Directorships
LifeCycle Pharma A/S (chairman)
Santaris Pharma A/S
University of Copenhagen
Anders Götzsche
Born 31 December 1967
Corporate Finance & IT
Directorships
OL Holding ApS
Stig Løkke Pedersen
Born 17 July 1961
Commercial Operations
Lars Bang
Born 31 July 1962
Supply Operations &
Engineering
Directorships
Nuevolution A/S (chairman)
Vernal A/S (chairman)
Directorships
DentoFit A/S
Fertin Pharma A/S
120

Design: Bysted A/S
Annual Report photos: Nicky Bonne and Lars Bech
Print: Quickly Tryk A/S
March 2008
DESTINATION
NEXT DECADE

The specialist in psychiatry
and pioneer in neurology
H. Lundbeck A/S
Ottiliavej 9
2500 Copenhagen - Valby
Denmark
Corporate Reporting
Tel. +45 36 30 13 11
Fax +45 36 30 19 40
information@lundbeck.com
www.lundbeck.com
CVR nr. 56759913