LETTER FROM THE CHAIR AND THE CEO

2022 was a year of challenges, but also a year of accomplishments and progress for the Foundation, reflecting momentum in the execution of our 2030 strategy. We delivered a broad range of new activities and initiatives, while also strengthening our organisation and competencies to further solidify our platform for future success.

Revenue exceeded our expectations and reached an all-time high, and Group operating profit of DKK 3.4bn was as expected whereas we saw a sharp decline across investment classes. Despite this, we continued to drive societal impact, and invested in building our platform for the future.

The year began with a growing optimism after the lifting of COVID-19 restrictions, and the reopening of society after two years of pandemic. However, Russia’s invasion of Ukraine in February marked the return of war to Europe, which triggered an energy crisis, increased risk perception, and pushed inflation and interest rates higher.

Profit for the year was DKK 1,211m, which was significantly below last year’s profit of DKK 6,928m. However, the Foundation’s finances remained robust, and we made grants to the value of DKK 550m, which was above our stated annual commitment of DKK 500m.

Despite the challenges in the financial markets, 2022 was also a year of accomplishments and progress for the Foundation, reflecting momentum in the execution of our 2030 strategy. We delivered a broad range of new activities and initiatives, while also strengthening our organisation and competencies in order to further solidify our platform for future success.

A highlight of 2022 was our acquisition of a 30% stake in Ferrosan Medical Devices A/S (FeMD), which marked an important step in realising our strategic goal of being a significant owner of a portfolio of five-to-eight Danish healthcare companies. FeMD is an important asset in our portfolio and has strong financial potential and a unique product, which broadens our long-term investments in healthcare offerings to patients and customers. We look forward to seeing this strategic investment grow internationally in the years to come.

Lundbeck delivered solid financial results for the year, with record high sales, including solid progress on the uptake of Vyepti® (prevention of migraine), while significantly improving its R&D pipeline. Lundbeck adopted an A/B shareclass structure, which mirrors the share structure seen in other listed companies with foundation ownership. The change was instigated by the Foundation to increase Lundbeck’s financial capacity in the general pursuit of long-term external growth opportunities, while maintaining the benefits of long-term ownership.

2022 was another year of strong performance for ALK , which delivered double-digit sales growth and cemented its position as the global leader in allergy immunotherapy. We remain very positive about the company in view of both its market potential, and its continued stellar financial performance.

Falck started 2022 by announcing its ambition to steer the company towards a future initial public offering. However, even at the outset of the year, the company faced significant challenges due to higher costs, resulting from staff shortages and surging energy prices. 2022 was therefore a year of cost streamlining and strategic planning, but also marked the start of a new strategic chapter that will guide Falck’s development towards becoming an integrated healthcare provider.

The challenging market conditions impacted the Foundation’s investment portfolio, and resulted in a decline across asset classes. The year began with the merger of our two biotech investment units and the creation of a new combined unit –Lundbeckfonden BioCapital. The new unit has a portfolio of 20 Danish and international companies, and a focus on building new Danish biotech companies. While 2022 was a challenging year for the biotech industry as a whole, BioCapital s portfolio continued to perform well in terms of reaching important clinical and regulatory milestones, as well as ensuring capital to drive further pipeline development.

For our philanthropic activities and societal impact priorities, 2022 was an important year, as we continued and progressed our quest of driving innovation and bringing new scientific discoveries to the lives of patients and their families. As brain disorders continue to challenge people and societies all over the world, and with the brain remaining a conundrum for scientists, we remain fully committed to supporting the best minds in neuroscience and brain research in general.

Thus, in 2022, we continued our investments in science and talents through our broad range of talent programmes and activities, and the new online platform Neurotorium.

We grew our ability to identify new scientific ideas and projects, and expanded our reach in disseminating insights and knowledge to scientists, clinicians, and educators across the global healthcare industry, who focus on the brain.

The Brain Prize is a highlight of the year and the world’s largest neuroscience prize. In 2022, the prize was awarded to three international scientists for their outstanding scientific contributions to neuroscience. The three professors, Silvia Arber (Switzerland), Martyn Goulding (USA) and Ole Kiehn (Denmark), have revolutionised our understanding of the neuronal cell types and circuits that control movement. The celebration of the winners took place in Copenhagen and the subsequent scientific outreach activities included international webinars, plenary lectures, patient case stories and educational films, and were delivered to the global scientific community throughout 2022.

As an enterprise foundation in Denmark, we pursue both business and philanthropic objectives, and steer our activities with a long-term perspective, and a broad ambition of driving financial and societal value creation in a way that is both environmentally and socially sustainable. We circulate profits back to society through investments in science and talent, and in early biotech, and we use our voice to evolve and strengthen the local life-science ecosystem, which is vital for our purpose and to strengthen the Danish life science industry.

Our strategy, ‘Bringing discoveries to lives’, is the common thread for our commercial and philanthropic endeavours. However, there are times when circumstances impel us to step outside our strategy, which was the case in 2022, when the Foundation donated funds to the Danish Refugee Council’s emergency relief for Ukraine, and later to its mental health programme for Ukrainian refugees in Denmark.

The Foundation is committed to advancing healthcare, neuroscience and business. Our activities trigger ripple effects that go beyond national borders, and we share and acknowledge, as an enterprise foundation in Denmark, an important responsibility for the future.

We want to take this opportunity to thank all Lundbeck Foundation employees for their ongoing contribution to value creation.