ANNUAL REPORT 2021

LUNDBECK ANNUAL REPORT 2021 = CONTENTS FINANCIAL STATEMENTS OF THE PARENT COMPANY NOTE 12 101/111 12 CONTINGENT ASSETS AND CONTINGENT LIABILITIES Pending legal proceedings H. Lundbeck A/S (the "Company") is involved in a number of legal proceedings, including patent disputes, the most significant of which are described below. The outcome of these proceedings is not expected to have a material impact on the financial position or cash flows beyond the amount already provided for in the financial statements, or it is too uncertain to make a reliable provision. Such proceedings will, however, develop over time, and new proceedings may occur which could have a material impact on the financial position and/or cash flows. In June 2013, the Company received the European Commission's decision that agreements concluded with four generic competitors concerning citalopram violated competition law. The decision included fining the Company EUR 93.8 million (approximately DKK 700 million). The Company paid and expensed the fine in the third quarter of 2013. In March 2021, the European Court of Justice rejected the Company's final appeal of the European Commission's decision. So-called "follow-on claims" for reimbursement of alleged losses, resulting from alleged violation of competition law, often arise when decisions and fines issued by the European Commission are upheld by the European Court of Justice. Health authorities in the UK and an umbrella organization of Dutch health insurance companies have taken formal protective steps against the Company with the principal purpose of preventing potential claims from being time-barred under the applicable statutes of limitation. In September 2021, the UK proceedings were transferred from the High Court to the Competition Appeal Tribunal at the request of the parties. The Company expects that the UK health authorities will now pursue their alleged claims. Further, in late October 2021, the Company received a writ of summons from a German health care company claiming compensation for an alleged loss of profit plus interest payments, allegedly resulting from the Company's conclusion of agreements with two of the four generic competitors, which were comprised by the EU Court of Justice ruling. The Company is preparing its defense and it may take several years before a final conclusion is reached by the German courts. The Company disagrees with the claims and will defend itself against the claims. In Canada, the Company is involved in three product liability class-action lawsuits relating to CipralexⓇ/CelexaⓇ (two cases alleging various CelexaⓇ-induced birth defects and one case against several SSRI manufacturers (incl. the Company) alleging that SSRI (CelexaⓇ/LexaproⓇ) induces autism birth defect, three relating to Abilify MaintenaⓇ (alleging i.a. failure to warn about compulsive behaviour side effects) and one relating to RexultiⓇ (also alleging i.a. failure to warn about compulsive behaviour side effects). The cases are in the preliminary stages and as such there is significant uncertainty as to how these lawsuits will be resolved. The Company strongly disagrees with the claims raised. In 2018, the Company entered into settlements with three of four generic companies involved in an Australian federal court case, in which the Company was pursuing patent infringement and damages claims over the sale of escitalopram products in Australia. The Company received AUD 51.7 million (DKK 242 million) in 2018. In the Company's case against the last of the four generic companies, Sandoz Pty Ltd, the Federal Court found that Sandoz Pty Ltd had infringed the Company's escitalopram patent between 2009 and 2012 and awarded the Company AUD 26.3 million in damages. Sandoz' appeal of the decision was heard in May 2019 and the Full Federal Court has in August 2020 allowed Sandoz' appeal and decided that Sandoz is not liable for damages. The Company's application for special leave to appeal the decision to the High Court was granted in February 2021, and the appeal was heard on 8 October 2021. A decision is expected within 3 - 6 months from the hearing. If the Company's appeal is successful, the case will go back to the Federal Court for recalculation and the Company's appeal of the Australian Patent Office's decision to grant Sandoz a license will be restarted. Together with Takeda, the Company instituted patent infringement proceedings against 16 generic companies in response to their filing of Abbreviated New Drug Applications ("ANDAS") with the U.S. FDA seeking to obtain marketing approval for generic versions of Trintellix in the U.S. Two opponents have since withdrawn and the Company has settled with eight opponents. As communicated by the Company in company release no. 706 dated 1 October 2021, the cases against the six remaining opponents (the "ANDA Filers") has been decided by the U.S. District Court for the District of Delaware (the 'Court'). The Court found that the Company's patent protecting the active ingredient in TrintellixⓇ, vortioxetine (U.S. Patent No. 7,144,884) is valid. The active ingredient patent expires on 17 June 2026, with an expected six-month paediatric exclusivity period extending to 17 December 2026. Assuming the ruling is confirmed at appeal, final approval will not be granted to the relevant ANDA Filers until after expiration of the active ingredient patent, including any extension or additional periods of exclusivity. A total of seven other patents asserted at trial were found by the Court to be valid or their validity was not challenged during the trial. The Court decided that none of the seven other patents were infringed by the relevant ANDA Filers, except that Lupin was found to infringe a patent covering the Company's process for manufacturing vortioxetine. Unless and until the Court's ruling is reversed on appeal, the patents found not infringed by a particular ANDA Filer will not prevent that ANDA Filer from receiving final approval. For details on each of the patents comprised by the case, please see the company release no. 706. The Court's decision has been appealed by the Company to the U.S. Court of Appeals for the Federal Circuit. Lupin has appealed with respect to the process patent and the ANDA Filers have cross appealed with respect to the validity of two of the seven other patents. Together with Otsuka Pharmaceutical, the Company has instituted patent infringement proceedings against several generic companies that have applied for marketing authorization for generic versions of RexultiⓇ in the U.S. The Company has strong confidence in the RexultiⓇ patents. The U.S. FDA cannot grant marketing authorization in the U.S. to the generic companies before the patents expire, unless the generic companies receive decisions in their favour. Trial is scheduled to begin on 25 July 2022. The compound patent, including patent term extensions, will expire in the U.S. on 23 June 2029. A patent for the specific formulation used will expire 12 September 2032.