ANNUAL REPORT 2021

LUNDBECK ANNUAL REPORT 2021 E CONTENTS CONSOLIDATED FINANCIAL STATEMENTS NOTE 16 77/111 16 CONTINGENT ASSETS AND CONTINGENT LIABILITIES - CONTINUED In Canada, Lundbeck 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. Lundbeck) 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. Lundbeck strongly disagrees with the claims raised. In 2018, Lundbeck entered into settlements with three of four generic companies involved in an Australian federal court case, in which Lundbeck was pursuing patent infringement and damages claims over the sale of escitalopram products in Australia. Lundbeck received AUD 51.7 million (DKK 242 million) in 2018. In Lundbeck's case against the last of the four generic companies, Sandoz Pty Ltd, the Federal Court found that Sandoz Pty Ltd had infringed Lundbeck's escitalopram patent between 2009 and 2012 and awarded Lundbeck 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. Lundbeck'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 Lundbeck's appeal is successful, the case will go back to the Federal Court for recalculation and Lundbeck's appeal of the Australian Patent Office's decision to grant Sandoz a license will be restarted. Together with Takeda, Lundbeck 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U.S. FDA seeking to obtain marketing approval for generic versions of TrintellixⓇ in the U.S. Two opponents have since withdrawn and Lundbeck has settled with eight opponents. As communicated by Lundbeck 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 Lundbeck'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 Lundbeck'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 Lundbeck 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, Lundbeck has instituted patent infringement proceedings against several generic companies that have applied for marketing authorization for generic versions of RexultiⓇ in the U.S. Lundbeck 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. Lundbeck received a Civil Investigative Demand ("CID") from the U.S. Department of Justice ("DOJ") in March 2020. The CID seeks information regarding the sales, marketing, and promotion of Trintellix. Lundbeck is cooperating with the DOJ. In the U.S., Lundbeck is involved in three product liability lawsuits relating to LexaproⓇ (alleging LexaproⓇ induces birth defects). The cases are in the preliminary stages. Lexapro was marketed by Forest Labs. in the U.S. Lundbeck will vigorously defend against the claims raised. Joint taxation H. Lundbeck A/S and Danish subsidiaries are part of a Danish joint taxation scheme with Lundbeckfonden (Lundbeckfond Invest A/S including subsidiaries of Lundbeckfond Invest A/S), according to which the Company has partly a joint and several liability and partly a secondary liability with respect to corporate income taxes etc. for the jointly-taxed companies. In addition, H. Lundbeck A/S has partly a joint and several liability and partly a secondary liability with respect to any obligations to withhold tax on interest, royalties and dividends for these companies. However, in both cases the secondary liability is capped at an amount equal to the share of the capital of the Company directly or indirectly owned by the ultimate parent company. The total tax obligation under the joint taxation scheme is shown in the financial statements of Lundbeckfond Invest A/S.

View entire presentation