At the annual general meeting on 16 May 1997, the employee bonus/profit distribution scheme that had been in operation since 1994 was made into a permanent bonus scheme for the companys employees. In 1997, the bonus amounted to DKK 4.8 million. The Board recommends to the general meeting that a dividend of DKK 35 million be paid out of the profit of H. Lundbeck A/S for 1997, DKK 294 million, and that DKK 259 million be allocated to reserves. In connection with Lundbecks expansion in Eastern Europe, a close watch was kept on developments in Russia for several years in view of the significant potential that the Russian market offers the pharmaceutical industry. The activities carried out since Lundbeck established itself in Russia in 1997 underline our possibilities in this market. In the USA, the Group has entered into an agreement with Forest Laboratories, Inc. on the launch of Cipramil®/Seropram®. An application for marketing authorisation has been filed with the FDA (the American health authorities), and the product launch in the USA is expected to take place in mid-1998. Cipramil®/Seropram® will be marketed in the USA under the name Celexa. The development of Serdolect®/Serlect® for the American market was carried out in collaboration with Abbott Laboratories, Inc. Abbott Laboratories was unable to achieve satisfactory registration of Serdolect®/ Serlect® and decided therefore, in January 1998, to withdraw the application with a view to expanding the documentation so as to achieve satisfactory registration later. At the beginning of 1998, Lundbeck discontinued its cooperation with Shionogi & Co. Ltd. on the development of Serdolect®/ Serlect® for the Japanese market. With a view to intensifying the marketing of Cipramil®/Seropram® in Germany, Lundbeck entered into a co-marketing agreement with Bayer AG, a leading German supplier of CNS products, in 1997. In 1996, Lundbeck entered into collaboration with the American company Centaur Pharmaceuticals, Inc. on the development of new substances for treating Parkinsons disease. This collaboration ended in March 1998. In March 1998, a strategic alliance was established with Forest Laboratories, Inc. for creating a platform for Lundbecks future activities on the US market. Sales - breakdown by product Sales The 15% improvement in turnover was due primarily to the continued success of Cipramil®/Seropram®, which has given Lundbeck a leading position in sales of antidepressants. The product is the Groups biggest-ever success and sales are still growing. Compared with 1996, sales of Cipramil®/ Seropram® rose by 30% to DKK 1.6 billion. Growth is expected to continue in the coming years owing to sales of Cipramil®/Seropram® in the major European markets, where the product was not launched until 1995 and 1996. At the end of 1997, Cipramil®/Seropram® was registered in 57 countries around the world. Today, the product is registered in 63 countries, and in eight of these it is the most-used antidepressant on the market. Sales of Lundbecks other products grew by 1% after adjustment for the disposal of the rights to Ketogan® and Bleomycin®. At the end of 1997, Lundbeck has subsidiaries in 24 countries and covers the whole of Western Europe with the exception of Portugal. At the same time, expansion in Eastern Europe is well under way, and Lundbeck established its own subsidiary in Hungary in 1997. Through the establishment of subsidiaries, Lundbeck has managed to turn Europe into its home market. In addition, Lundbeck has overseas subsidiaries - in Canada, Australia, New Zealand and South Africa - and a number of branch and representative offices in Eastern Europe, the Middle East and the Far East. Other EU-countries Other Europe Other world Denmark 67.2% 16.9% 9.3% 6.6% Cipramil®/Seropram® Other antidepressants Serdolect®/Serlect® Other antipsychotics Other turnover 60% 9.7% 0.9% 21.5% 7.9% Sales - breakdown by market Partnerships Lundbecks business strategy is focused on continued international expansion through organic growth and strategic alliances. In 1997, Lundbeck changed its strategy for clinical development so that, in future, it will retain control of the global development of its pharmaceuticals all the way to the registration of the products. 15 Contents Supervisory Board and Board of Management A clear vision The way forward A continuously dev Supervisory Board Arne V. Jensen (Chairman) Jørgen Fakstorp (Vice-Chairman) Lars Bruhn Henrik He Board of Management Erik Sprunk-Jansen President Eva Steiness Executive Vice President Research an Georgios Peros, Abstract, 1990 A clear vision Lundbeck has a clear vision. We intend to become one The way forward Strategy is planning - the ability to see where we are, where we are going and how A visionary goal Our goal is to become one of the worlds leading companies in the treatment of psych A continuously developing organisation Lundbeck is a continuously developing company. Growing inter Group structure The Lundbeck Foundation H. Lundbeck A/S Synthesis factories Region Scandinavia &am The pharmaceutical industry Market conditions in the pharmaceutical industry In 1996, the global ph K. Nathanael, Sunset, 1997 Sales and marketing The sales figure for 1997 places Lundbeck as one of Lundbecks products Lundbecks research and development activities are concentrated on developing new Koprianos, Town, 1996 Lastly, Lundbeck has a promising substance under development for treatment of The Supervisory Boards Report Net turnover (DKKm) 3,000 2,662 Net turnover 2,500 2,000 1,500 1,000 During the last few years, the pharmaceutical industry has undergone marked changes, resulting in a The Supervisory Boards Report Average number of employees 2,500 Subsidiaries Parent companies 2,000 At the annual general meeting on 16 May 1997, the employee bonus/profit distribution scheme that had The Supervisory Boards Report Lundbeck International Psychiatric Institute As a specialist in psych Spyros Loukidis, Windows, 1995 17 Environmental Report The Managements Declaration Lundbeck regards openness about the companys healt Environmental Report 1997 In 1997, Lundbeck continued developing a health, safety and environmental Environmental Report Lundbeck - general Lundbeck has its headquarters, with its management, adminis K. Fyra, Abstract, 1994 The first steps in the process are often carried out in Seal Sands, while t Environmental Report Summary of the Groups environmental status Below a short summary is given of t the waste water, while the remaining approx. 1,200 tonnes are sent to a special chemical waste dispo The Lundbeck International Psychiatric Institute The Lundbeck International Psychiatric Institute Ex ment, education of patients and their families, and Quality Management within psychiatric treatment. Art can overcome prejudices In Greece, as in many other countries, the general attitude to psychiat Giannis Papadakis, Abstract, 1997 Strengthening local collaboration The exhibitions are held in col PsychiatryLink an Internet introduction http://www.psychiatrylink.com will give you the possibility Lundbeck presents http://www.psychiatrylink.com The development of the first version of Lundbecks ne EPOS EPOS: European Post-marketing Observational Serdolect®/Serlect® project: increasing our unders Giannis Pachis, Excommunication, 1997 Unlike controlled clinical trials, the EPOS project has been My dream changes from colour to black and white Depression is about the worst thing anyone can exper The pieces fall into place That was the start of a life with changing psychopharmacological drugs, a Lundbeck worldwide Parent company H. Lundbeck A/S Ottiliavej 9 DK-2500 Copenhagen - Valby Tel: +45 Slovenia Lundbeck Pharma AS Presernova 1 (2. nadstropje) SLO-2000 Maribor Tel/Fax: +386 62 221 943 R The Lundbeck Foundation Award for Outstanding Research The Lundbeck Foundation, which makes substant V. Kafivas, Garden, 1996 Accounts 37 Summary for the Group 1993-1997 Profit and loss account (DKKm) Net turnover Profit before R&D c Key figures Average number of employees Average number of shares (million)*) Earnings per share (DKK Comments on the accounts Profit for the year In 1997, profit developed positively. Profit for the y The limited effect of the policy changes in 1997 is due to the movement in the size and composition Comments on the accounts Under the changed accounting policies, the results of foreign subsidiaries At the end of 1997, Lundbecks new antipsychotic drug, Serdolect®/Serlect®, had been launched in 10 E Comments on the accounts Other operating income, net Other operating income, net, amounted to DKK 8 In 1997, capital investments totalled DKK 188 million against DKK 224 million in 1996. As in 1996, t Financial comments General In 1997, the Lundbeck Groups financial income and expenses were affected The Groups loans on mortgage credit-like terms at 31 December 1997 Outstanding debt CIBOR-based loan Financial comments At the present moment it is very likely that Italy, Spain and Portugal will also Lundbecks exchange rate index (1988 = 100) 104 102 100 98 96 94 92 90 88 (Jan.) 89 90 91 92 93 94 95 Accounting policies General The annual accounts and the consolidated accounts have been prepared in The consolidated accounts are prepared on the basis of the accounts of the parent company and the su Accounting policies Provision is made in the balance sheet for the present value of plans which are The cost of new buildings and erection by the company of its own technical installations and machine Profit and loss account for the year ended 31 December 1997 Parent company 1996 DKKm 1,411.1 503.6 Per share ratios (DKKm) 150 137 Net asset values Cash flow 125 100 80 82 114 Earnings per share Balance sheetat Assets Parent company 1996 DKKm 18.0 9.6 27.6 386.1 140.4 101.5 146.6 774.6 95.4 5. Balance sheetat Liabilities Parent company 1996 DKKm 110.0 56.1 1,086.2 1,252.3 1997 DKKm 110.0 77. Statement of sources and application of funds for the year ended 31 December 1997 Group Notes Oper Signatures Copenhagen, 12 March 1998 The Supervisory Board and the Board of Management have today c Notes to the profit and loss account 1 Net turnover Parent company 1996 DKKm 263.0 874.7 176.9 96.5 Production, distribution, administration, and research and development costs incl. depreciation etc. Notes to the profit and loss account 4 Other operating income Parent company 1996 DKKm 3.1 3.1 1997 6 Tax on the profit for the year Parent company 1996 DKKm 1.3 0.8 1997 DKKm 49.7 - 0.1 Tax due on th Notes to the balance sheet 7 Intangible and tangible fixed assets Group: Research and development c Land and buildings DKKm Technical plant and machinery DKKm Other fixtures and fittings, tools and Notes to the balance sheet 8 Shares in subsidiaries Total DKKm Book value at 1.1.1997 Adjustment du 8 Shares in subsidiaries - continued Net asset value at 31.12.1997 DKKm H. Lundbeck A/S, Norway H. L Notes to the accounts 9 Other shareholdings and other receivables Parent company Other shareholding 11 Capital and reserves Group 1996: Share capital DKKm Capital and reserves at 1.1.1996 Adjustment d Notes to the accounts 11 Capital and reserves - continued Parent company 1996: Share capital Revalu 12 Provisions for pensions Group: The Group operates with two types of pension plans: defined contri Notes to the accounts 13 Provisions for deferred tax Group: Temporary differences between calculati 13 Provisions for deferred tax - continued Parent company: Temporary differences between calculation Notes to the accounts 15 Contractual obligations Rentals and leasing obligations Lundbeck has commi Notes to statement of sources and applicational funds 17 Adjustments Group: 1997 DKKm Depreciation e Michalis Manolopoulos, Landscape, 1997 Lundbecks new logo Lundbeck has introduced a new logo that clearly expresses our identity, vision an