ANNUAL REPORT 2021
LUNDBECK
ANNUAL REPORT 2021
E CONTENTS
CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6
65/111
6 INTANGIBLE ASSETS - CONTINUED
Description of material product rights
Vyepti®
Tthe eptinezumab product rights (VyeptiⓇ), which is an investigational monoclonal antibody (mAb) for
migraine prevention targeting the calcitonin gene-related peptide (CGRP) was acquired in 2019. The value
of the product rights was DKK 13,421 million at the time of acquisition. The carrying amount of DKK 12,107
million, net of amortization, at 31 December 2021 (DKK 12,076 million in 2020) was affected by
developments in the USD/DKK exchange rate.
RexultiⓇ
RexultiⓇ is a prescription medication used as an adjunctive therapy to antidepressants for the treatment of
MDD and as a treatment for adults with schizophrenia in certain markets. RexultiⓇ is co-marketed in a
partnership collaboration with Otsuka Pharmaceuticals Co., Ltd. The total carrying amount of the RexultiⓇ
product rights amounted to DKK 2,497 million, net of amortization, at 31 December 2021 (DKK 2,823 million
in 2020).
Portfolio of compounds including the product rights to ABX-1431
A portfolio of compounds, including the product rights to ABX-1431; a first-in-class, small-molecule inhibitor
of monoacylglycerol lipase (MGLL) currently being investigated in clinical trials for the treatment of
neurological disorders, and various compounds in the pre-clinical phase, was acquired in 2019. The value of
the portfolio of compounds recognized as product rights was DKK 1,853 million at the time of acquisition.
During 2020, the Parent company H. Lundbeck A/S acquired all intellectual property rights from Lundbeck
La Jolla Research Center, Inc. The carrying amount at 31 December 2021 was DKK 1,871 million (DKK
1,871 million in 2020).
Amortization and impairment losses
Amortization and impairment losses for the year are included in the following functions in the statement of
profit or loss:
Amortization and impairment losses
Cost of sales
Sales and distribution costs
Administrative expenses
Research and development costs
Total
2021
DKKm
2020
DKKm
1,305
1,584
8
33
5
18
32
800
2,435
1,350
In March 2020, it was announced that the phase lla study (AMBLED) of its novel selective positive allosteric
modulator of the glutamate 4 receptor (mGlu4 PAM), foliglurax, for the treatment of Parkinson's disease did
not meet the primary study endpoint. Consequently, Lundbeck recognized an impairment loss of DKK 792
million relating to the foliglurax product rights. The impairment loss was included in research and
development costs in 2020.
Impairment testing
Goodwill
The Group is considered a single cash-generating unit (CGU) as this is how Management makes decisions
and assesses business performance. All subsidiaries are considered fully integrated into the Group as no
entity has significant independent or separately identifiable inflow of cash. Most cash inflows are based on
the output from research and development activities performed by headquarters on behalf of the entire Group.
Accordingly, an impairment test is annually performed based on Lundbeck having one single CGU.
Product rights
In addition to the impairment test for goodwill (based on the CGU), the Group performs impairment tests of
product rights not yet commercialized and for product rights available for use, in case an indication of
impairment is identified.
Methodology
Goodwill
In the impairment test of the CGU, based on the fair value less cost of disposal, the market price of Lundbeck
is compared with its carrying amount.
Product rights
In the impairment tests of product rights, based on value-in-use, the discounted expected future cash flows
for the specific asset tested are compared with the carrying amount of the intangible asset. The expected
future cash flows are based on a forecast period, which is the period used by Management for decision
making, with due consideration of patent expiry.
The assumptions used in the impairment test are based on benchmarked external data and historical trends.
The key parameters in the calculation of the value-in-use are revenue, earnings, working capital, discount
rate and the preconditions for the cash flow period.View entire presentation