Lundbeck Foundation – the first 60 years

KURT JACOBSEN

L

UNDBECK oundation

F

the first 60 years

LUNDBECK FOUNDATION

L

KURT JACOBSEN

UNDBECK oundation

F

THE FIRST 60 YEARS

CONTENTS

8 Foreword

58 New chairman, new foundation legislation,

10 T he formation and first years of the Lundbeck Foundation

61

The first grant guidelines

64

“Special applications”

12

H. Lundbeck & Co.

66

The first annual report

13

Growing share holding in Lundbeck

68

Prioritisation of Lundbeck-related research

69

Openness, PR and public debate

and new trust deed

15 Break with the Goldschmidt family and a new trust deed 18

Open war over Lundbeck

22

Acquisition of Helia Goldschmidt’s shares

72 F rom slumbering billion foundation to active investor 73

A more active investment policy?

28 C onsolidation, tidying up and allergological adventure

75 Agreement with Gudme Raaschou

30

Discussion about the composition of the boards

78

Results of investment of free funds

32

Simplification and tidying up

78

Takeover of Chr. Hansen Holding A/S

34

Niro Atomizer A/S

81 “A slumbering billion foundation becomes

36

Support for allergological research

38 The acquisition of Allergologisk

Asset Management

an active investor” 83

DAKO A/S and BIODAN

Laboratorium A/S

86

No to NeuroSearch A/S

40

Brief and costly ownership

87 Strengthened international portfolio

42

ALK is sold to Chr. Hansen A/S

management

46 Donations 1972-1989

90 Ownership and grants policy

50

Book on an historic building

93

Parity between Lundbeck and Chr. Hansen?

51

Restoration of Tersløsegaard

94

The “useful effect” of Foundation support

96

Dividend years and grant years

52 Support for staff, former employees and spouses 53

Special prioritisation of medical science

54

A preliminary high point

57

A change

98 Standing committees and new guidelines for grants 100 The same chairman for Lundbeck and the Lundbeck Foundation?

largest grant

152 N ew investment strategy and new focus areas

Grants in the second half of the 1990s

153

New investment strategy

155

Returns above benchmark

106 Stock exchange listing of Lundbeck

156

Two support preferences

107

Steering towards stock exchange listing

158 Grants 2011-2014

110

Setback after setback – and a ray of hope

162

Lundbeckfond Emerge

112

Valuation close to “the pain threshold”

163

Lectures, communication and teaching

113

Stock exchange listing

101 The Lundbeck Foundation’s hitherto 102

116 L undbeckfond Invest, Kontiki and a ‘third pillar’

166 S ixty years of the Lundbeck Foundation

118 The Lundbeck Foundation as an “active investor” 121

The Kontiki project

123

Disposal of Chr. Hansen A/S

126

Self-evaluation and corporate governance

128

Lundbeckfond Ventures

130

Obel-LFI Ejendomme A/S

132

The search for a third pillar

133

Falck A/S

136 R esearch centres, young researchers and the Brain Prize 137

Research Professorships and research prizes

139

New grants organisation

141

Lundbeck Foundation Research Centres

178 C hairs and managing directors of the Lundbeck Foundation 180 G rants to the Lundbeck Foundation’s Centres of Excellence – strategic grants 186 R ecipients of the Lundbeck Foundation annual research prize

144 Focus on young researchers and research groups 148

Junior Group Leader Fellowships

150

The Brain Prize

188 Index of names 192 Notes

TIMELINE

1915 H. Lundbeck & Co. is founded.

1954 Grete Lundbeck establishes the Lundbeck Foundation.

1967 The Lundbeck Foundation becomes sole owner of Lundbeck.

1989 The Lundbeck Foundation buys the controlling shareholding in Chr. Hansens Laboratorium A/S. The Foundation grants DKK 26 million.

1999

H. Lundbeck A/S is listed. The Foundation’s owner share is reduced to 70 percent. The Foundation grants DKK 22 million.

2005

Disposal of the ingredients part of Chr. Hansen Holding.

The allergy part, ALK, is retained. The Foundation grants DKK 222 million.

2010/2011

Purchase of the controlling shareholding in Falck.

The Foundation grants DKK 504 million.

Grete Lundbeck (1900-1965), founder of the Lundbeck Foundation.

T H E L U N D B E C K F O U N D AT I O N

7

FOREWORD

FOREWORD

Grete Lundbeck, the majority shareholder in the pharmaceutical firm, H. Lundbeck & Co. A/S, established the Lundbeck Foundation in 1954 to safeguard the future of the company and provide financial support for medical research. At that time, the company was relatively small with an annual turnover of approximately DKK 10 million and about 225 employees, mainly in Denmark.

Today, 60 years later, H. Lundbeck A/S is a global pharmaceutical company with an annual turnover of DKK 13.5 billion and 5,700 employees in more than 50 countries. After having been listed on the stock exchange in 1999, today the Lundbeck Foundation owns 70 percent of the shares in the company, in addition to controlling shareholdings in the allergy company ALK-Abelló A/S and the ambulance and rescue group Falck A/S. The assets of the Foundation amount to about DKK 40 billion. The Lundbeck Foundation’s companies employ about 30,000 people in most of the world, and the annual turnover has reached approximately DKK 30 billion.

The Foundation’s annual grants, chiefly to research in medical science, have grown from a modest DKK 15,000 in 1962 to around DKK 500 million in recent years.

What made this development possible? What choices have the Board of Trustees of the Foundation made over the years and what have they decided not to do? Which persons have influenced this development and how have the Foundation, the companies and society interacted?

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T H E L U N D B E C K F O U N D AT I O N

These key questions are also interesting in a larger context, not least because of the legitimate and growing interest in the activities of commercial foundations in recent years. The Board of Trustees of the Lundbeck Foundation emphasises openness and has taken the initiative to conduct research on the history of the Foundation and make it accessible. We have done this both to learn about ourselves and to inform the public about our conditions in order to contribute to a knowledge-based foundation for discussion about commercial foundations.

We asked the historian Professor Kurt Jacobsen, dr. phil., of Copenhagen Business School to undertake this task. Kurt Jacobsen has had free hands in his research, with full access to the Foundation’s archives including all board minutes. In preparing an anniversary publication about H. Lundbeck A/S, Kurt Jacobsen has had similar access to the company’s files. In this connection, they have been enhanced and systematised, with the assistance of the former director of the Foundation, Steen Hemmingsen.

The Board wishes to thank Kurt Jacobsen and Steen Hemmingsen for their work, which is hereby made available to business partners and other interested parties at research institutions, authorities, associated companies and a wider group of people through libraries as well as on the Foundation’s website.

Copenhagen, March 2015 Jørgen Huno Rasmussen, Chairman of the Board of Trustees of the Lundbeck Foundation

9

CHAPTER 1

THE FORMATION AND FIRST YEARS OF THE LUNDBECK FOUNDATION

T H E L U N D B E C K F O U N D AT I O N

O

n March 4 1954, majority shareholder and Chair of the Board of

Directors of the pharmaceutical company H. Lundbeck & Co. A/S, Grete Lundbeck, set up a foundation called the Lundbeck Founda-

tion, the same day as she signed the trust deed. As well as Grete Lundbeck as lifelong Chair, the Board of Trustees of the Foundation consisted of Kaj Seth Oppenhejm, solicitor of the high court, banker Erik Birger Christensen, who became the Foundation’s business manager, and director Chr. Sørensen.

The Board of Trustees held its initial meeting on March 5 1957, after the Lundbeck Foundation had received its first assets in the form of shares in Lundbeck for a nominal value of DKK 250,000 in the middle of December 1956. A similar donation was made to another foundation, Fabrikant Edward Goldschmidts Fond, established by Helia Goldschmidt in memory of her late husband. In both cases, the donor was the company Kefalas A/S, which was affiliated to Lundbeck, with the objective of owning this company’s patents.

On the occasion of the 40th anniversary of the Foundation of Lundbeck, Kefalas’ Board of Directors, which was identical to Lundbeck’s, wished to commemorate the founder of the company, manufacturer Hans Lundbeck, and its long-standing co-owner, the manufacturer Eduard Goldschmidt.1 At its meeting the Board of Trustees signed the trust deed, which inter alia laid down that 25 percent of the net income of the Foundation was to be deposited in a reserve fund which was to be invested in “good securities and preferably utilised for subscribing for or buying shares in the companies of the Lundbeck Group”. The remaining 75 percent was to be2 used for medical research, whether by individuals or institutions, or for research projects within H. Lundbeck & Co. A/S or companies of the Group, as determined by the Board of Trustees.

Resources not awarded were to be carried forward to the next year’s grants or added to the Foundation’s capital. There was a further irreversible provision that “the founder of the Foundation may never obtain any grant from the Foundation nor withdraw any of the Foundation’s capital”. Grete Lundbeck informed the Board of Trustees at this meeting that the shares with a nominal value of DKK 250,000 which the Foundation had received from Kefalas were deposited in a bank box in Den Danske Landmandsbank.3

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T H E F O R M AT I O N A N D F I R S T Y E A R S O F T H E L U N D B E C K F O U N D AT I O N

H. Lundbeck & Co. On August 14 1915, the merchant Hans Lundbeck founded H. Lundbeck & Co. It was a mixed agency and trading company and the first years were hard because of World War I and the blockade policy, which had a severe impact on Denmark’s foreign trade. However, the situation improved when the war ended in November 1918, and on November 1 1919, the first employee was appointed, 19 year old office clerk Alma Emilie Sterregaard. As time went by she gained a key position in the company and in 1938 she was given the authority to sign for the firm. She married Hans Lundbeck in 1940, and in 1946 she adopted the name Grete Lundbeck.

In 1926, Hans Lundbeck acquired a partner, Czech-born businessman Eduard Goldschmidt, who brought with him agency agreements for several medicines. The firm gradually developed into a pharmaceutical company proper which produced a constantly increasing number of drugs on foreign licences during the 1930s. Turnover steadily grew and in 1938 In 1915, Hans Lundbeck (1885-1943) founded the agency and trading company H. Lundbeck & Co., which

Lundbeck launched its first original chemical preparation, an ointment for treating sores, Epicutan. The firm became a research pharmaceutical company, and in 1942 the breakthrough occurred with the launching

formed the basis of the present-day

of Lucosil, a sulphate preparation against inflammation that is still in use

global pharmaceutical group H. Lund-

today. The following year a synthesis laboratory was set up for the develop-

beck A/S. He had a clerical back-

ment of new, chemically-based pharmaceuticals, which was to be the future

ground and good business sense. Af-

of the company.

ter Eduard Goldschmidt joined the

In 1943, Hans Lundbeck died and left his entire estate, including half of

firm in 1926, it developed into a re-

the firm, to Grete Lundbeck. The other half was owned by Eduard Gold-

search-based pharmaceutical firm up through the 1930s. Hans Lundbeck mar-ried Alma Sterregaard (Grete Lundbeck) in 1940, and after his

schmidt, who had to leave the firm the same year and flee to Sweden due to the German occupation forces’ action against the Danish Jews in October 1943. Following the liberation in 1945, Eduard Goldschmidt re-entered the

death in 1943, she inherited his share

firm on an equal footing with Grete Lundbeck, and they subsequently ran the

of the company.

company based on equal ownership.

In 1946, Grete Lundbeck and Eduard Goldschmidt entered a partnership agreement that determined that upon the death of one of the partners, Lundbeck was to be carried on as a limited liability company and the survivor was

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T H E L U N D B E C K F O U N D AT I O N

to have a modest 1 percent majority of the shares. It was simultaneously agreed that when the survivor left the board of the company, turned 70 years of age or died the two blocks of shares were to be adjusted to make them equally large.

When Eduard Goldschmidt passed away in autumn 1950, as had been agreed Lundbeck was reorganised as a limited liability company, the shares in which were divided with 50.4 percent to Grete Lundbeck and 49.6 to Eduard Goldschmidt’s widow, Helia Goldschmidt. As majority shareholder, Grete Lundbeck became both chair of the board and managing director in the company, and up through the 1950s under her leadership Lundbeck experienced sturdy growth based on a wide portfolio of antibiotics. The company built up considerable exports and had subsidiaries in several European countries and the USA. At the same time, the synthesis laboratory, led by chemical engineer P.V. Petersen, was developing several products within a completely new, revolutionary type of psychoactive drugs for treating mental illness.

At the same time, Grete Lundbeck, who was childless, together with her closest adviser and support, banker Erik Birger Christensen, began to consider the future of the company. In October 1951 she had established Fabrikant Hans Lundbeck og hustru Grete, f. Sterregaards Legat (manufacturer Hans Lundbeck and wife Grete, née Sterregaard’s Trust), but now she decided to establish a foundation to own her block of shares in Lundbeck and run the company after her death. This led to the establishment of the Lundbeck Foundation, which became the sole heir in her will. The trust deed was amended several times in subsequent years without any alteration in the two fundamental objectives: the ownership and support of Lundbeck and support for medical research. This established the basis for the Lundbeck Foundation eventually owning not only Grete Lundbeck’s original block of shares but also the entire share capital in Lundbeck.

Growing share holding in Lundbeck Once the Lundbeck Foundation had been initiated, its capital began to increase as Grete Lundbeck transferred shares to the Foundation or assisted with the purchase of her shares in the Lundbeck Group. Thus on 19 November 1958 she offered the Foundation shares with a nominal value of DKK 29,000 at a price of 225, which was accepted. At the same meeting, Mrs

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T H E F O R M AT I O N A N D F I R S T Y E A R S O F T H E L U N D B E C K F O U N D AT I O N

Lundbeck offered the Foundation a loan to subscribe for shares in forthcoming capital increases in Lundbeck with DKK 250,000 and in the subsidiary Kefalas with DKK 500,000.4 On December 8 1958, the Board of Trustees agreed that Grete Lundbeck should subscribe to the shares she was entitled to in both companies, and that the Lundbeck Foundation should subscribe to the parts that it had a right to as a shareholder. The Foundation financed its purchase of shares with a loan from Grete Lundbeck of approximately DKK 140,000, which was to be repaid “as soon as possible”.5 In July 1962, further considerable increases were made to the Foundation’s share portfolio in both Lundbeck and Kefalas, as the Foundation received shares in Lundbeck for a nominal value of DKK 192,000 and in Kefalas for a nominal value of DKK 69,000. The Foundation also took part in a share increase in both companies of a nominal value of DKK 73,500 and DKK 23,700, respectively. In addition, there was a stake in the issue of bonus shares in both companies of DKK 1,692,200 and DKK 150,200, respectively. The Lundbeck Foundation’s share portfolio in the two companies now consisted of 2,611,800 shares in Lundbeck and 324,100 shares in Kefalas. Some of the share purchases were financed with a DKK 78,000 loan from Grete Lundbeck.6 Although the Foundation’s share portfolio in the two companies was thus substantial, the balance in relation to the other major shareholder, Helia Goldschmidt, who also participated in the capital increases and received bonus shares, was carefully maintained. Similarly, at each capital increase Grete Lundbeck and Helia Goldschmidt signed a reverse concerning adjustment of the two group’s proportion of shares so that they would be equal in size when Grete Lundbeck retired from the Board of Trustees or upon her 70th birthday or her death.

In addition to shares in the two Lundbeck companies, over the years the Lundbeck Foundation invested a small part of its capital in easily negotiable securities such as bonds and listed shares. At a meeting of the Board of Trustees on July 4 1962, however, Grete Lundbeck and Erik Birger Christensen were authorized to realise the Foundation’s bonds portfolio and Landmandsbank shares for a nominal value of DKK 116,000 to be in a position to repay the debt to Grete Lundbeck. However, the debt remained considerable and amounted to a total of DKK 785,353 as per December 31 1962.7

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T H E L U N D B E C K F O U N D AT I O N

The Lundbeck Foundation made no awards during the first years as the annual earnings were transferred to build up the Foundation’s capital. This procedure was also followed in Fabrikant Edward Goldschmidt’s Foundation and the Foundations exchanged information. To judge from the board minutes, the two foundations had no further contact and overall the relationship seems to have been chilly.

The Lundbeck Foundation made its first grants in 1962 when four doctors received honorary awards of DKK 2,500 each and one doctor received an honorary award of DKK 5,000. This amounted to total awards of DKK 15,000 in a year when the net profit was DKK 162,763. The following year, when the net profit was DKK 109,106, DKK 15,000 was granted in honorary awards to four doctors in two portions of DKK 3,500 and two portions of DKK 4,000. In 1964, a total of DKK 15,000 was once more granted, divided among three doctors as honorary awards. No more awards were made for a number of years after that.8

Break with the Goldschmidt family and a new trust deed In December 1958, a major disagreement occurred regarding yet another in-

Eduard Goldschmidt (1901-1950) became a partner in H. Lundbeck & Co. in 1926 and formally an equal business partner in 1933. He had received

crease of the share capital. Helia Goldschmidt did not wish to participate, but

clerical training in Germany, and dur-

she was forced to do so if she did not want to reduce her share interest in

ing the 1930s, he was the driving

Lundbeck. This led to an actual break. In February 1959, Grete Lundbeck re-

force in the company’s development

fused to take part in amending Lundbeck’s Articles of Association whereby

into a research-based pharmaceutical

future increases in the share capital could take place by the issuing of B

firm. He was forced to flee to Sweden

shares with no voting rights, meaning that Helia Goldschmidt did not lose her influence if she did not participate in new increases of share capital.

On April 23 1963, Kaj Seth Oppenhejm and Chr. Sørensen retired from the Lundbeck Foundation’s Board of Trustees in accordance with a provision re-

with his family in October 1943 because of the German action against the Danish Jews. However, he remained in contact with the firm and was active in the resistance move-

garding retirement at 70 years of age. The board now consisted of the Chair,

ment. He returned to Denmark in

Grete Lundbeck, the banker Erik Birger Christensen and the CEO of PFA,

1945 and resumed his position in the

Børge Sørensen, who had been elected the previous year.9

firm on an equal footing with Grete

On April 28 1964 the following year, Grete Lundbeck presented a draft

Lundbeck. He was the architect be-

amended trust deed to the Board of Trustees. The draft was the result of a

hind the firm’s growth and nas-cent

lengthy process during which the members of the board had discussed sev-

internationalisation in the post-war years until his sudden death in June 1950.

15

KAPITEL 1

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T H E L U N D B E C K F O U N D AT I O N

eral drafts, and following a discussion at the meeting, the trust deed could therefore be signed without further changes. In the trust deed, the Foundation’s securities portfolio as per December 31 was computed as follows:10

Grete Lundbeck relaxing with the daily newspaper in the company of Erik Birger Christensen, her closest adviser in the years after the Second World War. Grete Lundbeck grew up

Shares (nominal): 324,100

in modest circumstances in Copenha-

Kefalas:

DKK

Lundbeck:

DKK 2,611,800

and got a job in H. Lundbeck & Co. in

Bonds (nominal):

DKK

1919. She quickly gained a key role in

156.000

gen, but she trained as an office clerk

the rapidly growing firm. Following a

By far the major part of the Lundbeck Foundation’s capital was thus placed in shares in the Lundbeck Group’s two principal companies, and chiefly in Lundbeck.

In the terms of the trust deed, the Foundation’s resources were to be in-

lengthy engagement, she married Hans Lundbeck in 1940 and inherited his share of the company after his death in 1943. She carried on the firm together with Eduard Goldschmidt in

vested in bonds, private mortgage deeds, real property, shares or other “

the post war years, and when it be-

good securities at the discretion of the Board of Trustees”. A minimum 20

came a joint-stock company in 1950,

percent of the total capital should consist of liquid assets if the investment

she became chair of the board. In

was not made in the Lundbeck Group’s companies.

1954, she established the Lundbeck

Twenty five percent of the Foundation’s net profit was to be lodged in a reserve fund until this had reached a size of 25 percent of the Foundation’s capital. Up to 25 percent was to be lodged in an account for acquiring and

Foundation to own her shareholding and carry Lundbeck on after she had passed away.

managing properties intended as free residences for current and former employees of the Lundbeck Group and their surviving spouses as well as descendants of Hans and Grete Lundbeck’s parents. In addition to that, “at the discretion of the Board of Trustees” the profit was to be used for a number of non-prioritised purposes: 1. Support for current and former employees of the Lundbeck Group, including for education and holidays.

2. Honorary awards for doctors, scientists or others.

3. Support for scientific purposes, chiefly special projects.

4. Particular research projects within the Lundbeck Group.

5. Hospitals and combating diseases.

6. Nurses.

7. Fabrikant Hans Lundbeck and hustru Grete, f. Sterregaards Trust.

8. Other purposes adopted by the Board of Trustees, with the proviso that the amount should not exceed 25 percent of the sum available for awards.

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T H E F O R M AT I O N A N D F I R S T Y E A R S O F T H E L U N D B E C K F O U N D AT I O N

Grete Lundbeck was a very empathic person, both as an employer and in private. When Russia crushed the

The grants were to be undertaken by the Foundation’s Board of Trustees, which was to consist of three to five members and of at least four members

Hungarian uprising in 1956, she in-

when the founder had retired. Should Erik Birger Christensen survive Grete

vited two Hungarian sisters, Kati and

Lundbeck, if he so desired, he was to become the chair and business manager

Ruti, 10 and 12 years of age respec-

and be succeeded by Børge Sørensen under the same conditions.

tively, to Denmark as her holiday chil-

An innovation was the introduction of a pension scheme according to

dren. They lived with Grete Lundbeck

which a member who retired at the end of his/her 65th year could receive a

in her house on Tuborgvej for three

pension from the Foundation for one year at a time. The condition was that

months, and when their stay ended, she drove them back to Hungary herself. She sent packages with clothes to the two sisters until her death, and

the person in question should place their experience at the disposal of the Board of Trustees when this was required. In December 1968, after Grete Lundbeck’s death, the scheme was expanded to make it possible for the

she sewed wristwatches and money

Board to provide the widow with a pension after the death of a member or a

into the lining as hidden financial sup-

member who had retired.11

port.

After the founder had left the board, at least one board member should be a law graduate or a “prominent figure” from the trade or industrial organisations or the Danish medical profession or medical research. With the exception of Erik Birger Christensen and Børge Sørensen, who remained members until the end of their 75th year, the Board of Trustees itself elected its members for three-year periods, with a pensionable age of 72.

Persons engaged in businesses that could be in direct or indirect competition with the companies in the Lundbeck Group could not become members of the Board of Trustees without being granted an exemption by a unanimous Board. It was also laid down that: A member of the Board of Trustees of the present Foundation may not also be a member of the Board of Trustees of Fabrikant Edward Goldschmidt og hustru Helia, født Wiingaard Nielsens Legat (manufacturer Edward Goldschmidt and wife Helia, née Wiingaard Nielsen’s Trust), Fabrikant Edward Goldschmidt’s Foundation, or other bursaries or foundations that Mrs Helia Goldschmidt might establish.

This stipulation would soon cease to be relevant.

Open war over Lundbeck Grete Lundbeck died on August 17 1965, and on September 20 the two remaining members of the Foundation’s Board of Trustees, Erik Birger Chris-

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T H E L U N D B E C K F O U N D AT I O N

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T H E F O R M AT I O N A N D F I R S T Y E A R S O F T H E L U N D B E C K F O U N D AT I O N

tensen and Børge Sørensen met. The meeting commenced with the election to the board of civil engineer A. Kann Rasmussen and high court solicitor Knud Ehlers, after which Erik Birger Christensen was elected chairman – a position he also held in Lundbeck and Kefalas following Grete Lundbeck’s death. Erik Birger Christensen then informed the meeting that the Foundation had been appointed sole heir in Grete Lundbeck’s last will and testament. He and Børge Sørensen were appointed executors and the lawyer Holger Byfeldt was engaged as the trustee of the estate. It was unanimously decided to accept the inheritance and acknowledge the legacy and the debts, and Erik Birger Christensen and Børge Sørensen were authorised to “in turn represent the Foundation in all respects”.12 As a result of Grete Lundbeck’s death, no grants were made in 1965 and the entire net profit of DKK 148,661 was used for consolidation, i.a. to meet extraordinary anticipated extra expenses to pay inheritance tax. At the meeting of the Board of Trustees on May 12 1966, Erik Birger Christensen reported that the inheritance was DKK 7,989,459 and inheritance tax amounted to DKK 2,396,835. As per April 14 1966, the Foundation’s capital stood at DKK 10,622,828 and, in addition, the reserve and value adjustment reserve fund etc. amounted to approximately DKK 1.8 million. The Foundation’s total capital thus amounted to DKK 12.4 million.13 Erik Birger Christensen also informed the Board that the Lundbeck Foundation had made over shares in Lundbeck to Mrs Helia Goldschmidt in order to equalise her share of the ownership. According to the minutes, he did not elaborate on the likely consequences of this, but later in the meeting he stated that the adjustment of the two blocks of shares had resulted in conflicts in both Lundbeck’s and Kefalas’ Boards of Directors concerning the chairmanship of both companies’ boards, where the two groups of shareholders were now equally strong.

On behalf of Helia Goldschmidt, her son, Sven-Erik Goldschmidt, and her son-in-law, high court solicitor Ole Schiørring, who now represented her on the boards of both Lundbeck and Kefalas, demanded that their group of shareholders should obtain one of the chairs. This was unanimously rejected by the Lundbeck Foundation’s Board of Trustees, who “found it decisively important to secure continuity in all administrative matters to the greatest possible extent”. It was then unanimously recommended that Erik Birger

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T H E L U N D B E C K F O U N D AT I O N

Christensen should be re-elected as chairman in both companies, a post he had been elected to after Grete Lundbeck’s death. This met with a flat refusal from the Goldschmidt faction, and neither board could proceed with the election of a Chair.14 The situation was now at a deadlock, and the atmosphere did not improve when in December 1966 the Lundbeck Foundation rejected Helia Goldschmidt’s request to be allowed to make over shares to her children without herself surrendering voting rights and in this way avoid considerable inheritance tax.

Subsequently, the Goldschmidt faction also wanted to change the practice whereby Erik Birger Christensen was the board’s adviser in both Lundbeck’s and Kefalas’ management. Instead, they wanted a scheme where each of the two parties had an adviser in the two managements, or that each of the parties had an adviser in one of the companies. In March 1967, the Lundbeck Foundation categorically rejected the demand and, moreover, decided unanimously that they “had always been prepared to cooperate loyally with the Goldschmidt faction’s representatives on the boards of the respective companies”. The Goldschmidt faction, however, had not shown any accommodation – on the contrary:15 From the day he was admitted to the boards and later, high court solicitor Schiørring had adopted such an attitude that the Board of Trustees of the present Foundation was unable to leave any decisions involving the interests of the Lundbeck Group up to him. Nor did the Foundation wish to take part in creating positions for him or Mr Sv. Erik Goldschmidt that are not necessary, either in the companies in this country or in other countries.

During the subsequent discussion concerning whether to follow the Goldschmidt faction’s proposal completely to abolish the position of adviser, the Board of Trustees of the Lundbeck Foundation agreed that should the Goldschmidt faction demand a vote in this regard, Erik Birger Christensen and Kaj Seth Oppenhejm should abstain. The proposal would then be adopted with the votes of the Goldschmidt faction alone, and this is what took place.16

21

LUNDBECKFONDENS OPRETTELSE OG FØRSTE ÅR

As managing director, Grete Lundbeck was active in what was exclusively a man’s world with respect to

Acquisition of Helia Goldschmidt’s shares At the annual general meeting of the Board of the Foundation on June 6

business contacts, supporters, and

1967, the Chairman of the Lundbeck Foundation, Erik Birger Christensen,

advisers. Number three from the left

took stock of the dramatic development in the wake of Grete Lundbeck’s

is Erik Birger Christensen; among the

death, which had resulted in the two boards being without a Chair and with-

other persons in the picture are mem-

out advisers in the two managements.17

bers of the board of the Swedish subsidiary, Leo AB where Lundbeck was the majority shareholder in the period 1946-1983.

Concerning the operation of the Foundation, the net profit for 1966 amounted to DKK 462,245 because, over and above expenses of DKK 54,917, interest of DKK 73,628 on the inheritance tax, which was being paid in instalments, was also deducted. As in the previous year, the net profit was being used to consolidate the economy of the Foundation, marked by the inheritance tax, which had now been brought down by DKK 915,000. Erik Birger Christensen therefore hoped that the remaining amount plus interest could be paid before the end of 1967.

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T H E L U N D B E C K F O U N D AT I O N

Before things got that far, however, the situation changed dramatically for both the Lundbeck Foundation and Lundbeck. On October 3 1967, the board received an offer from Mrs Helia Goldschmidt concerning the sale to the Lundbeck Foundation of the block of shares of a nominal value of DKK 7,500,000 and DKK 3,750,000 in the two companies that she controlled directly or through her foundation and trust. The total selling price was DKK 39,750,000. It would demand a great deal of effort and transactions on the part of the Lundbeck Group as a whole including the Foundation to raise this sum.18 When the Board of Trustees held its meeting on October 16 1967, Erik Birger Christensen had previously received a commitment from Svenska Handelsbanken, Helsingborg, for a loan of SEK 12,000,000 to a Swedish subsidiary, Leo Interessenter A/B, which this company would then lend to its parent company, Kefalas. Over and above this, Kefalas hoped to be able to provide the sum of DKK 18,750,000 in the form of a loan, after which the Lundbeck Foundation would have an available sum of DKK 34,750,000 including the Foundation’s own means. Approximately DKK 5-5.5 million was thus lacking.19 After a discussion, the Lundbeck Foundation’s auditor was asked to give a statement regarding the market value of the shares, which the Board of Trustees found “very high”. Furthermore, the consequences for the Foundation and the companies of the transactions that were discussed would be investigated “with respect to both profitability and liquidity”. From Erik Birger Christensen’s statement at the conclusion of the meeting it is clear that this would have a severe impact on the economy of the Foundation. He said that the loan from Kefalas would if possible “be instalment-free for some years” and preferably interest-free. Similar conditions could, however, not be expected regarding the loan from Leo Interessenter AB, which was granted to Kefalas.20 Erik Birger Christensen informed the Board of Trustees at its meeting on November 28 1967 that, following negotiations with Ole Schiørring, agreement had been reached on an alternative offer in terms of which the shares of the Goldschmidt faction would be taken over for a cash sum of DKK 31,875,000 plus an estimated sum of minimum DKK 300,000 as a share of the profits for the previous part of the year. An official offer could therefore be

23

T H E F O R M AT I O N A N D F I R S T Y E A R S O F T H E L U N D B E C K F O U N D AT I O N

expected in accordance with this. In the light of this, it was the unanimous opinion of the Board of Trustees that “there was now a basis for purchasing the shares in the two companies”. Against this background, the Board of Trustees was in agreement to ask Erik Birger Christensen to “do what was necessary”.21 Nothing is known about the further negotiations nor about the details of the financial transactions, but at a meeting of the Board of Trustees on May 30 1968, Erik Birger Christensen reported that the purchase of the Goldschmidt faction’s shares in Lundbeck and Kefalas had been completed. During the final negotiations, Erik Birger Christensen had achieved a further, though smaller, reduction of the purchase price, plus half stock exchange stamp duty, after which the offer had been accepted on December 5 1967.

The eligibility of the transaction finally took place on December 22 1967, and it proceeded as follows.22 Lundbeck bought own shares DKK 1,500,000 – market price DKK 340.05

5,113,502.00

The Lundbeck Foundation bought Lundbeck shares DKK 4,848,150 – market price DKK 340.05

16,527,349.58

The Lundbeck Foundation bought Kefalas shares DKK 2,427,400 – market price 280

6,813,712.00

Kefalas bought own shares DKK 1, 113, 00 – market price 280

3,124,191.00

Total price including half stock exchange stamp duty

24

DKK 31,578,754.58

T H E L U N D B E C K F O U N D AT I O N

In order to finance its share of the takeover the Lundbeck Foundation had taken two loans in Kefalas, which had previously borrowed SEK 12 million in Leo Interessenter AB:

Loan I: (6¾ %)

17,303,542.80

Loan II (6½ %)

6,037,519.78

Total borrowing

23,341,062.58

In addition to the above shares, the Lundbeck Foundation took over shares of a nominal value of DKK 1,151,850 in Lundbeck and a nominal value of DKK that were in Fabrikant Edward Goldschmidts Fond. This took place by the Lundbeck Foundation taking over the Goldschmidt Foundation, which, however, previously had transferred mortgage deeds of a book value of DKK 183,016 as well as a bankbook containing DKK 253,418 to a newly established foundation with the name Edward og Helia Goldschmidts Fond, which the Goldschmidt family continued.23 On December 22 1967, having before this elected Erik Birger Christensen, Børge Sørensen and Knud Ehlers as their replacements, the members of the board of the Goldschmidt Foundation then proceeded to resign their seats.

On November 30 1968, the Goldschmidt Foundation was merged with the Lundbeck Foundation under the latter’s trust deed.24 Following several prior internal transactions within the Lundbeck Group, the balance sheet of the group after the two Foundations had merged was as follows:25

25

T H E F O R M AT I O N A N D F I R S T Y E A R S O F T H E L U N D B E C K F O U N D AT I O N

Assets: Shares, nominal value - 6,087,000 in Kefalas

14,608.800

- 12,410,000 in Lundbeck

21,717,500

- 6,000 in Crome & Goldschmidt

12,990

- 8,000 in Dansk Svovlsyre

13,320

- 5,890 in Kgl. Brand

17,376

Bonds, nominal value 159,900

93,376

Mortgage deeds, nominal value 400,118

280,082

Foundation’s resources in Sparekassen for Kjøbenhavn og Omegn

2,797

Operational resources in Sparekassen for Kjøbenhavn og Omegn Total assets:

62,508 DKK

36,808,749

Liabilities: Foundation capital Reserve fund

1,368,933

Value adjustment reserve

- 2,543,963

Loan, in total, from Kefalas:

17,682,534

Loan from the trust fund:

144.417

Loan in Den Danske Landmandsbank

3,000,000

Profit and loss account:

2,955,378

Total liabilities:

26

14,201,450

36,808,749

T H E L U N D B E C K F O U N D AT I O N

The Lundbeck Foundation did not own the total share capital in either Lundbeck or Kefalas, partly because of cross ownership between the two companies and partly because the Lundbeck trust fund also owned shares. However, the Foundation held the exclusive majority in both companies, and as the Board of the Foundation was identical to the Board of the trust fund, in practice the Lundbeck Foundation was the sole owner of Lundbeck and Kefalas.

27

CHAPTER 2

CONSOLIDATION, TIDYING UP AND ALLERGOLOGICAL ADVENTURE

T H E L U N D B E C K F O U N D AT I O N

T

aking over the Goldschmidt shares and the ensuing indebtedness meant that the Lundbeck Foundation did not make any grants in 1968. The accounts otherwise showed a net profit of DKK 2,562,361

after deduction of DKK 1,525,683 in interest on the debt to Kefalas and expenses of DKK 53,433. However, the profit was used to consolidate, as DKK 637,694 was transferred to the reserve fund and DKK 600,000 to the value adjustment fund, while DKK 1,274,550 was allocated to the Foundation capital. The remaining DKK 50,118 was transferred to the next financial year.1 Several years were now to pass before the grants were resumed due to the

large repayment and interest obligations that the whole group contributed to paying, at the same time as the Lundbeck Foundation was further consolidated by means of a number of internal transactions. In December 1968, the Foundation received DKK 4,136,667 worth of bonus shares from Lundbeck, and in December 1969 a further DKK 8,273,000 in bonus shares. In January 1969, Kefalas donated DKK 1,113,000 in shares in “acknowledgement of the burden assumed by the Foundation” when it bought the Goldschmidt faction’s shares. By issuing bonus shares, the next month the Lundbeck Foundation received DKK 2,400,000 in shares, and the following year, after February 11 1970, further bonus shares for a nominal value of DKK 2,400,000.

Concurrently with this, the Lundbeck Foundation’s annual dividends from the two companies were used to pay interest and reduce debt until a final and large-scale financial transaction made it possible to discharge the last debt by the end of 1970. Erik Birger Christensen informed the Board at a meeting in the Lundbeck Foundation that he had conducted “confidential” talks with the board and management of Kefalas about the possibility of the company buying its own shares at a nominal value of DKK 2.5 million from the Foundation at a market price of 260, and the DKK 6.5 million thus received being used to reduce the Foundation’s debt.

On the same day, Kefalas decided to pay a 3 percent dividend on account, and Fabrikant Hans Lundbeck og fru Grete Lundbeck, f. Sterregaards Legat (Manufacturer Hans Lundbeck and Mrs Grete Lundbeck, née Sterregaard’s Trust) granted the Foundation an interest-free loan of DKK 150,000. Against this background, Erik Birger Christensen proposed that the Foundation should pay back the entire outstanding debt to clear it before the end of the year. The Board agreed with this proposal.2

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C O N S O L I D AT I O N , T I D Y I N G U P A N D A L L E R G O L O G I C A L A D V E N T U R E

This was no sooner said than done, and at the Board meeting on June 25 1971, Erik Birger Christensen could inform the Board that the Lundbeck Foundation was debt-free, apart from a newly obtained, interest-free loan of DKK 550,000 granted by Fabrikant Hans Lundbeck og fru Grete, f. Sterregaards Legat. The deep, long-term effects of taking over the Goldschmidt shares are apparent from the fact that it was only in May 1975 that the Lundbeck Foundation was able to repay the final DKK 200,000 debt to the trust.3

Discussion about the composition of the boards When the Lundbeck Foundation had discharged its debts, in summer 1971 the Board discussed the connections between the Foundation and the companies. The three units were not tied together by a formal group structure, but all the financial interaction between the companies to reduce and finally discharge the debt, had made clear the companies’ internal muGrete Lundbeck selected Erik Birger Christensen (1898-1982) to inherit her position in the management of

tual dependency and relationship. They resembled a family.

This was probably why the Board of the Lundbeck Foundation convened a meeting on July 19 with just one item on the agenda: whether the boards

the Lundbeck Foundation and Lund-

of the Foundation, Lundbeck and Kefalas should be identical. While it was

beck. From the beginning, he was a

explicitly stated in the trust deeds of the Foundation and the trust that the

member of the Board of Trustees of

boards of both should also consist of the same persons, the requirement was

the Lundbeck Foundation and of the

‘only’ that the two boards ‘as far as possible’ should be represented in the two

board of Lundbeck. After Grete Lund-

companies.4

beck’s death, he became chairman of both boards and was the main architect behind the Lundbeck Foundation’s takeover of all the shares in Lundbeck in 1967. He resigned as

In fact, the whole of the board of the Lundbeck Foundation, with the exception of Børge Sørensen, were on the boards of the two companies, while Kaj Seth Oppenhejm, having left the board of the Foundation, still had a seat on the boards of the two companies. There is, however, no record in the Min-

chairman and left the board of Lund-

utes that this had been mentioned as problematic. Opinion on this question

beck in 1972 and the board of the

was divided on the Foundation Board. Erik Birger Christensen stated that

Lundbeck Foundation in 1973.

“the best” would be if all board members in the two companies also sat on the

(Photo: Private archive)

boards of the Foundation and trust, while he found it “less important”, if an individual member of the Boards of the Foundation and trust was not a mem-

30

T H E L U N D B E C K F O U N D AT I O N

ber of the boards of the companies. In other words, it would be best if this were the case.5 Knud Ehlers stated that he agreed that there was much in favour of full identity between the four boards, but “that there is much that is not in favour” without specifying what this was – at any rate there is no record of it in the minutes. Børge Sørensen and A. Kann Rasmussen both opposed Erik Birger Christensen, but there is no record of their argument, either. However, all agreed to carry on as before, and there can be no doubt that some of the arguments presented against identical boards can be gathered from Erik Birger Christensen’s concluding remarks. He said,6 that he could appreciate that the companies would seek to ensure the inclusion of a person with special qualifications, but that it should be possible to disregard the fact that the person in question did not join the boards of both the Foundation and the trust. It could also be envisaged that a person could be regarded as of such value to the Foundation and the trust that it would have to be accepted that the person in question did not wish to become a member of the boards of the companies.

This was the first recorded discussion in both the Lundbeck Foundation and the whole Group concerning the relationship between the Foundation as owner and the two companies. It was as such the first ‘corporate governance’ discussion in the history of the entire Lundbeck Group, and many years would pass before the subject was raised again.

The reason for the discussion was probably that chemistry professor Jannik Bjerrum, who had led Copenhagen University’s Inorganic Chemistry Laboratory since 1960, was being considered as a new board member. At any rate, he was elected to the boards of both Lundbeck and Kefalas at the two companies’ annual general meetings in autumn 1971.

At the same time Erik Birger Christensen was approaching his 75th birthday and thus the Lundbeck Foundation’s retirement age. He retired at the end of 1973 and was the first board member to be awarded a pension by the Foundation; it amounted to DKK 22,500 annually. Likewise, following an amendment of the regulation in 1968, Erik Birger Christensen’s wife was eligible for a pension upon his death, a scheme that included all board mem-

31

C O N S O L I D AT I O N , T I D Y I N G U P A N D A L L E R G O L O G I C A L A D V E N T U R E

bers. After Erik Birger Christensen’s retirement, Børge Sørensen became the new Chair, and Erik Birger Christensen would also continue to participate in board meetings. This took place when the board had asked him to “make his experience available” and take part in the meetings. For a period of years following this, formally the board functioned with only three members, until Jannik Bjerrum was appointed at the board’s annual general meeting on July 2 1975.7 Professor Per Søltoft, dr. techn., had apparently also been considered as a possible candidate to join the Lundbeck Group’s boards. At any rate, both he and Børge Sørensen were present in June 1971 when the board of Lundbeck were on a conducted tour of the factory in Lumsås in connection with a board meeting.8 Nevertheless, it was not until the annual general meetings were held in Kefalas and Lundbeck in spring 1978 that Per Søltoft was elected to the boards of the two companies to replace A. Kann Rasmussen, who retired on grounds of age. The following year, Per Søltoft also joined the board of the Lundbeck Foundation.

Simplification and tidying up When the debt had been settled, the Lundbeck Foundation continued to consolidate. In December 1972, the Foundation first received bonus shares of a nominal value of DKK 4,136,500 from Lundbeck, and in spring 1973 further bonus shares in Kefalas for DKK 4,800,000. Later in the year, the Foundation purchased a block of shares from Lundbeck in Kefalas of a nominal value of DKK 350,000. At the end of 1973, the Lundbeck Foundation owned shares in the two companies worth DKK 28,955,500 and DKK 17,150,000, respectively.

The share capital in both companies amounted to DKK 35 million because, despite a block of shares of under 50, the Foundation still had full control of Kefalas as the Trust and Lundbeck owned the remaining shares.9 Likewise, all the other financial dealings between the two companies were cleared up after the Danish Business Authority had written to Kefalas in the middle of June 1975 asking for explanation of the outstanding amount of DKK 3,033,000 in Lundbeck. The 1973/74 annual accounts of the latter stated a debt to Kefalas A/S of DKK 1,533,000, and it apparently was the difference between the two amounts – combined with the two companies’ other mutual relations – that had aroused the interest of the Danish Business Authority.10

32

T H E L U N D B E C K F O U N D AT I O N

P.V. Petersen (1920-1988) was a chemical engineer and in 1943, he started at Lundbeck as head of laboratory. He later became head of research and a director. He was the main figure behind the research and development of psychopharmaceuticals in Lundbeck when the company achieved its breakthrough with the launching of the anti-psychotic medicine Truxal in 1959. In 1987, in recognition of his lifelong contribution and his importance for the development of Lundbeck, the Lundbeck Foundation honoured him with the establishment of the P.V. Petersen Prize – the pre-cursor of the Brain Prize – which he was the first to receive that same year.

The reason for the difference between the two figures was that after the close of the financial year 1973/74, Lundbeck had contracted a further debt of DKK 1.5 million in Kefalas that appeared on the company’s annual accounts for 1974 because of the different financial years. The indebtedness continued in the new year with a loan of a further DKK 2.5 million, meaning that at the end of June 1975 Lundbeck owed Kefalas a total of DKK 5,533,000. To this was added a loan in the Lundbeck Foundation of DKK 1 million.11 Borrowing between the two companies had gone on for years, but the letter from the Danish Business Authority caused the board to discuss in particular Lundbeck’s “financial situation … especially the financial relations between the two companies” at the annual meeting on July 2 1972.12 Lundbeck had liquidity problems and the Lundbeck Foundation board decided to grant a loan of DKK 1,533,000 to the company so that the liability that had interested the Danish Business Authority could be disposed of. As a

33

C O N S O L I D AT I O N , T I D Y I N G U P A N D A L L E R G O L O G I C A L A D V E N T U R E

matter of principle and with reference to the fact that “loans between the two companies can cause problems and are inappropriate on several grounds”, it was further decided to grant yet another loan of DKK 4 million to enable the company’s remaining debt to be settled.13 Before the financial matters between the two companies were cleared up at the end of 1975, however, the Lundbeck Foundation had to place further funds at Lundbeck’s disposal.

Lundbeck continued to have major liquidity problems and the total amount ended at a little over DKK 9.3 million.14 The entire course of events and the amount of the loan are an eloquent expression of the continued burden on the overall financial situation of the company after the purchase of the Goldschmidt shares. To this was added the impact of the financial crisis from the beginning of the 1970s with stagnating or even declining market shares, rising wage costs and hence falling profitability and increasing liquidity problems. 1974/75 was thus the first year in Lundbeck’s history with a loss on Swedish professor of pharmacology, Arvid Carlsson (born 1923) visited Lundbeck in 1971 and presented his research, setting the company’s re-

primary activities, and at the annual general meeting on May 31 1976, the Board of the Foundation had to state that no dividend would be paid out from either Lundbeck or Kefalas.15 In order to create a definitive and clear division and separation between

searchers on the track of discovering

the two companies, the Board of Trustees decided in May 1975 ‘to the extent

the antidepressive citalopram in the

possible’ that the Lundbeck Foundation should take over the shares owned by

next year, which laid the ground for

the two companies in each other’s subsidiaries. Therefore, later in the year,

Lundbeck’s later development into a

the Foundation bought Kefalas’ block of shares in Lundbeck’s subsidiaries in

global pharmaceutical enterprise.

Paris and Brussels as well as in the Finnish Oy H. Lundbeck & Co. AB.16

Arvid Carlsson received the Lundbeck Foundation’s Research Prize in 1995 for his neuroscientific research and his contribution to the understanding of receptor mechanisms in the brain and the significance of the transmit-

Matters were first definitively simplified at the end of 1983 when the division of the Group into two main companies, Lundbeck and Kefalas, finally ended. The two companies merged with Lundbeck as the company that would continue – and the Lundbeck Foundation as sole owner.

ter substance dopamine. He received

Niro Atomizer A/S

the Nobel Prize for medicine in 2000.

With the exception of small blocks of shares in some major listed Danish firms, the Lundbeck Foundation invested its funds quite predominantly in

34

T H E L U N D B E C K F O U N D AT I O N

bonds. However, at the meeting on July 9 1973, the board decided to suspend further purchase of bonds “for a while” and “new activities” would be sought, so that the Foundation’s shares could be spread to a certain extent”.17 The opportunity arose less than a year later when Erik Birger Christensen announced at a board meeting that it might be possible to purchase a block of shares in the Danish firm, Niro Atomizer A/S, as an American shareholder wished to sell his shares. According to Erik Birger Christensen, the firm was “known to all members of the board” and therefore did not need any further presentation.18 Erik Birger Christensen himself had been associated with Niro Atomizer ever since the start of the company. It was established back in November 1933 and was based on a drying technique called Niro that built on atomisation, using a fast centrifuging jet invented and patented by the Danish engineer, Johan Nyrop. He had not had the means to finance the application of his invention, but had received assistance from his childhood friend, Erik Birger Christensen, who also had a financial engagement in the enterprise.

At the founding of the company, the share capital was DKK 12,000 divided as follows: DKK 4,400 to Johan Nyrop and his wife, DKK 3,600 to the investment company Kipa A/S, which was jointly owned by Erik Birger Christensen and Kaj Seth Oppenhejm, DKK 2,000 to Johan Nyrop’s friend, the surgeon Dr. Viggo Schmidt and his wife, and finally DKK 2,000 to Titan A/S, which manufactured centrifuges and housed Niro Atomizer for the first years and supplied fast-running atomizers, which were the core of the drying plant.

Kaj Seth Oppenhejm was part of the inner circle as a board member, where he represented “K.S. Oppenhejm’s clients”, by which was meant the company Kipa, and he was elected chairman in 1935. Erik Birger Christensen also joined the board later. Kaj Seth Oppenhejm retired as chairman of Niro Atomizer in 1971, but continued on the board. In 1973, A. Kann Rasmussen became the new chairman, positions they both still held as Erik Birger Christensen had left the board earlier but still clearly had connections with the firm.

Niro Atomizer had grown since 1933 and now had a share capital of DKK 15 million distributed among 16 shareholders and 13 foreign subsidiaries in Europe, USA, South America and Australia. The block of shares that the

35

C O N S O L I D AT I O N , T I D Y I N G U P A N D A L L E R G O L O G I C A L A D V E N T U R E

Lundbeck Foundation could now possibly buy had a nominal value of DKK 1 million, and the board authorised Erik Birger Christensen to negotiate with the seller and the Board of Niro Atomizer. A market value of 420 was asked for, which the Board of the Foundation found too high, but they were willing to buy a nominal DKK 1 million shares if the market value could be negotiated down to 300 – and DKK 750,000 shares if the market value could be 325.19 To judge from the minutes of the board meeting, the purchase of the block of shares was only intended as a passive investment with no plan of becoming involved in the running and management of the company. The block of shares’ relatively modest part of the total share capital points in the same direction. Nevertheless this was the first time the board of the Foundation had decided to invest in a specific enterprise, as former purchases of small blocks of shares in Danish enterprises had been undertaken by the chairman without any prior discussion by the board – at any rate there is no record of such discussions in the minutes.

The extent to which the intentions were more far-reaching than the immediate impression cannot be uncovered because the shares were not bought, without any reason for this appearing. Nevertheless, a new line had been initiated in the development of the Lundbeck Foundation, and only a few years went by before a new chance arose as repeated financial support for research within a selected medical specialisation brought larger and more far-reaching investments with it.

Support for allergological research In autumn 1972, the Lundbeck Foundation resumed its donations. One of the first was a donation of DKK 20,000 to Bent Weeke, dr. med., of Copenhagen City Hospital and Copenhagen University’s Protein Laboratory, which had applied for support for an allergological research project. The project had two objectives: to strengthen the diagnostics of allergic diseases and to follow the effect of different treatments for allergy and characterise and purify the allergen extracts used in diagnosing and treating patients suffering from allergies.20 In spring 1974, Bent Weeke submitted another application, this time together with a chemist, Henning Løwenstein, cand. scient., also of Copenhagen University’s Protein Laboratory. Each of them applied for further support

36

T H E L U N D B E C K F O U N D AT I O N

for the project: DKK 20,000 and DKK 33,293, respectively, the second amount being for equipment. These amounts were granted and the board was also positive when in autumn 1974 the young medical student, Per Stahl Skov, applied for DKK 120,000 to finance his appointment as academic assistant at the Department of Pharmacology to develop a new method of examination for diagnosing allergic diseases. The Lundbeck Foundation decided to grant DKK 50,000 in support, but an approach to the head of the project, Svend Norn, dr. pharm., revealed that in the meantime Per Stahl Skov’s appointment had been resolved in another way. On the other hand, the DKK 55,000 for equipment for the department was granted.21 The Foundation continued to support allergological research when on May 27 1975, it responded positively to an application and granted Henning Løwenstein DKK 8,338 for equipment. A short time later the Foundation – or rather Lundbeck – received an unusual application.22 In the autumn of 1975, Lundbeck received a telex from Bent Weeke, now senior registrar at Copenhagen City Hospital’s Laboratory for Clinical Allergology, which he had built up over the previous three years with financial support from the Lundbeck Foundation, among others. The telex contained “an urgent request” for financial support for the laboratory’s research and treatment with the purer drugs the laboratory was able to produce. According to the telex, the laboratory spent approximately DKK 200,000 a year on payroll, financed through funds and bequests. The Lundbeck Foundation’s donations had chiefly been used for equipment, and there was no information about the source of the rest of the support.23 The board found that the form and content of the request indicated “faulty budgeting”, and “the untraditional method … of applying directly via telex” made it difficult to assess the need for support. Nevertheless, the board decided to award DKK 50,000 in the grant year 1976 if “closer examination of the matters mentioned” did not indicate otherwise. This was not the case.

The DKK 50,000 was granted together with a further DKK 10,000 to Henning Løwenstein following a proper application.24 The decision was made at Erik Birger Christensen’s suggestion, and this may be where the reason may be found both for the many applications to the Lundbeck Foundation for financial support for allergological research and the board’s benevolent stance in spite of applications by telex and faulty budgets.

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C O N S O L I D AT I O N , T I D Y I N G U P A N D A L L E R G O L O G I C A L A D V E N T U R E

Erik Birger Christensen’s daughter, the pharmacologist Suzanne Gravesen, worked in Allergologisk Laboratorium A/S, known as ALK, which specialised in allergy research and the manufacture of allergy vaccines. Both Bent Weeke and Henning Løwenstein cooperated with the firm, Løwenstein as a consultant since 1974. It is probably this connection that built bridges between the Lundbeck Foundation and the allergological research environment and led to the Lundbeck Foundation purchasing its first business in February 1977.

The acquisition of Allergologisk Laboratorium A/S When ALK had emerged from 1975 with a deficit for the first time in its history, by the summer of 1976 it was clear that the firm was heading for yet another deficit. At the same time, there was a desperate need for more investment in development and laboratory facilities, including a diagnostics laboratory. The company was also under increasing pressure from foreign competitors in the Danish market and internationally. The situation was critical, and in September 1976 ALK’s major shareholder and managing director, Helle Olrik, commenced negotiations with the Lundbeck Foundation concerning the sale of the business.25 Erik Birger Christensen and Lundbeck’s managing director, Holger Byfeldt, conducted negotiations on behalf of the Foundation. ALK had a share capital of DKK 100,000, and the Lundbeck Foundation’s starting point was an estimation of the equity value of the shares’ at a price of 1,140, which Helle Olrik found far from satisfactory. The negotiations ground to a halt because of “the owners’ unrealistic ideas about the value of the shares”, as stated at a meeting of the Board of Trustees on December10 1976.26 Meanwhile, Helle Olrik was negotiating with other parties, and on January 26 1977, she signed an agreement with Novo Industri A/S to sell the entire share capital at market value 2.500, a total of DKK 2.5 million. Helle Olrik was also to continue as a consultant in the company for another five years at an index-linked annual salary of DKK 250,000 as well as a favourable pension insurance. ALK had been saved, but when the agreement was presented to the staff later that day, ten key staff members including Suzanne Gravesen protested and threatened to resign. Henning Løwenstein supported this, and without him and the rest of the staff, the business had no value and the basis of the agreement has disappeared.

38

T H E L U N D B E C K F O U N D AT I O N

Instead, on February 8 1977 the Lundbeck Foundation received an offer from ALK for the purchase of the whole share capital on the same terms as had been agreed with Novo Industri A/S, with some amendments, inter alia concerning Helle Olrik’s association. The Foundation was given a deadline of 12.00 Monday February 14, and at a meeting on February 9, the Board unanimously decided to accept the offer as presented. At the same meeting it was decided to ask Dr. Niels Harboe, the head of the Protein Laboratory, to join the newly elected board of ALK together with Børge Sørensen and Holger Byfeldt. The latter was also appointed interim managing director.27 It became obvious that it was no gilt-edged asset that the Lundbeck Foundation had taken over when an estimate of the 1976 annual accounts of the newly-acquired subsidiary was presented to the board at the end of May 1977. An operating loss of DKK 275,000 was anticipated in addition to remunerations of DKK 56,000 for the former board. Besides, sales of allergy vaccines had fallen so that by the end of April 1977 they were 33 percent under the corresponding period the previous year. The Lundbeck Foundation had already injected more than half a million DKK in working capital, and it was now decided to implement a capital increase of DKK 900,000 by injecting cash also from the Foundation. This took place in

Concurrently with his position as a CEO in Lundbeck, Holger Byfeldt (1917-1990) was a lawyer and business manager in the Lundbeck Foundation in 1979-1984

June 1977.28 When the final accounts for 1976 were available later in the year, an inventory of stocks and maximum depreciations had limited the loss to ‘only’ DKK 41,000. At the same time, sales had picked up and at the end of November had reached 4 percent over 1976. However, interim accounts for the first half of 1977 of DKK 227,000 before depreciations meant that a new loss loomed for 1977.29 On August 1 1977, in order to correct this development, Bjarne Knudsen was appointed managing director while Henning Løwenstein became director of research. Bjarne Knudsen was headhunted from the American Miles Dome Laboratories/Bayer, one of ALK’s most serious competitors, and he was also appointed managing director of Diagnoselaboratoriet af 1977 A/S

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C O N S O L I D AT I O N , T I D Y I N G U P A N D A L L E R G O L O G I C A L A D V E N T U R E

(the Diagnosis Laboratory of 1977 A/S), which was established in August with a share capital of DKK 250,000 fully paid by the Lundbeck Foundation.

The task of the Diagnosis Laboratory would be to diagnose the substances to which the patients were allergic while ALK supplied the vaccines.

At the end of 1977, the Board of the Lundbeck Foundation could establish that over and above the purchase price of DKK 2.5 million it had also paid a further DKK 900,000 and DKK 250,000 in share capital in ALK and the Diagnosis Laboratory, respectively. Additionally, the Foundation had an outstanding amount due of DKK 1,955,000 in the intercompany accounts; DKK 300,000 was expected to be repaid before the end of the year. Finally, the Foundation had to refund research support of a total of DKK 67,000 that ALK had granted to four external allergological projects.30

Brief and costly ownership Neither the Lundbeck Foundation’s nor Lundbeck’s board minutes contain details of the deliberations concerning the perspectives for the purchase of ALK. However, at the time of the takeover, because of research conducted by Bent Weeke and Henning Løwenstein, the firm was ready to launch its own hydrogel-based products on the market, so it seemed like a good investment.

In 1978, the company was the first in the world also to launch standardised allergen extracts in a product line marketed internationally under the brand name of Alutard.

However, ALK did not have an international sales organisation, and according to managing director Bjarne Knudsen’s’ unpublished memoirs, the idea was to market Alutard through Lundbeck’s export organisation. On the other hand, Lundbeck was short of new products, so the synergy effect seemed obvious and Bjarne Knudsen was positively received on his round trip to Lundbeck’s European subsidiaries and agencies.31 In the meantime, the economy of both ALK and the Diagnosis Laboratory deteriorated. When the two companies held their annual general meetings on June 28 1978, ALK’s annual accounts for 1977 showed a turnover of DKK 3,834,000 and a DKK 997,350 loss after maximum depreciations on operating equipment and the laboratory’s property. One of the major expenses was an agreed annual consultancy fee to Helle Olrik, who had received DKK 335,000.

A statement for the Diagnosis Laboratory for August 2 to December 31 1977

40

T H E L U N D B E C K F O U N D AT I O N

showed a deficit of DKK 359,653, again after maximum depreciations of operating equipment. In addition, at the end of 1977 the Diagnosis Laboratory had a debt of DKK 529,000 to ALK, while ALK’s debt to the Lundbeck Foundation amounted to just over DKK 2 million, including due interest of 9 percent.32

The pharmaceutical company ALK, which the Lundbeck Foundation owned for the first time in 1977-1979 and again from 1989, is today a world leader in the development and mar-

In addition, there were more expenses for the Lundbeck Foundation.

keting of allergy vaccines. The com-

When the annual accounts for the two companies were presented at a board

pany is Danish-based and its history

meeting on July 7 1978, it was decided that the Foundation should take over

goes back to the beginning of the

some grants amounting to a total of DKK 180,000, which ALK and the Diag-

1920s. The photograph shows a

nosis Laboratory “at present” were granting Copenhagen City Hospital Allergy Clinic and its laboratory, as well as donating a further annual DKK 120,000 initially for 1978 and 1979. The total amount, entered as a donation in the Foundation’s accounts, was to form part of the bequest and foundation

stage in the production of Alutard SQ, a depot medication that guarantees long-term boosting of the body’s own immune system and thus protection against allergies. (Photo: ALK)

resources that financed the running of the clinic.33 This was a waste of money, and it got worse. In the middle of December 1978, Børge Sørensen ascertained that the equity in both ALK and the Diagno-

41

C O N S O L I D AT I O N , T I D Y I N G U P A N D A L L E R G O L O G I C A L A D V E N T U R E

sis Laboratory was lost. In order to reorganise the economy of the two companies, the chairman was authorized to use up to DKK 2 million, and he was further authorised to increase the share capital in ALK to DKK 2 million and to DKK 1 million in the Diagnosis Laboratory. These increases were “to a significant extent” to be offset against the Foundation’s credit balance.34 It increasingly resembled a fight for the survival of ALK and the Diagnosis Laboratory. In the midst of all this, the Chairman of the Lundbeck Foundation, Børge Sørensen, died on March 23 1979 during a business trip to Sweden, where he was trying to persuade the Board of Leo AB to take over the two companies, which the Swedish company was interested in. However, the agreement came to nothing with the death of Børge Sørensen.35

ALK is sold to Chr. Hansen A/S On May 7 1979, A. Kann Rasmussen was elected the new Chairman of the Lundbeck Foundation, and at the same time, Olaf Thrane (1915-1990) was a member of the Board of Trustees of the Lundbeck Foundations between

the Board of Trustees was increased with Per Søltoft, dr. techn. and Director C.E. Askgaard Olsen. Niels Harboe had been elected to the board the previous year while high court solicitor, Knud Ehlers, had

1979 and 1990, and Chairman 1979-

passed away on November 19 1978. The agreement was that A. Kann Rasmus-

1982. He had a commercial educa-

sen was only to remain chairman until the board’s annual meeting later in

tion in the pharmaceutical industry,

the year, as he was due to retire on grounds of age. This took place on August

and in 1945, he was employed as a

8 1979, when Olaf Thrane, director of sales and marketing in Lundbeck and

submanager in Lundbeck. When the

Kefalas, was elected to the board and subsequently elected chairman. He

firm became a joint-stock company

immediately resigned his position in the two companies’ executive manage-

in 1950, he became a director, responsible for finances and administration – where he remained until he became Chairman of the Lundbeck Founda-

ment teams.36 These changes on the board did not lead to any break in the endeavour to find a solution to the problems with ALK and the Diagnosis Laboratory. At an

tion. He was also a Member of the

extraordinary general meeting in the two companies on June 22 1979, Per

Board of Lundbeck in the period

Søltoft was elected to both boards and elected chairman of both. The situa-

1973-1989.

tion was critical, and later in the day, when A. Kann Rasmussen went through the estimates of the two companies’ annual accounts for 1978 for the Board of the Lundbeck Foundation, he stated that “in his view a profitable opera-

42

T H E L U N D B E C K F O U N D AT I O N

tion was not a possibility in the foreseeable future”. On the contrary, a need for considerable investment in research was to be expected with respect to keener competiveness and the growing requirements concerning registration of drugs.37 A. Kann Rasmussen informed the board that the Swedish enterprise Pharmacia had already expressed an interest in buying the two companies, but even through there might be “pessimism with respect to the future of the companies”, the board agreed to explore other possibilities. Pharmacia was informed that the Lundbeck Foundation could not respond to the enquiry “at this time”.38 Impending doom was, however, obvious when at their annual general meeting on July 20 1979 the two companies presented their annual accounts.

ALK’s showed a deficit of DKK 973,587 in 1978, while the deficit of the Diagnosis Laboratory since the laboratory had started up on August 22 1977 was just under DKK 725,000. These figures caused the board to deliberate the appropriateness of continuing the annual grants to Copenhagen City Hospital’s Allergy Clinic, and the question of selling off was also seriously discussed. There had been “various enquiries from companies that seemed interested”, and Holger Byfeldt was authorized “to examine the possibilities for the sale”.39 There appeared to be several possibilities. Apart from the offer from Pharmacia AB, the American Miles Dome Laboratories expressed “great interest”, but a Danish ingredients company, Chr. Hansens Laboratorium, was selected. On October 8 1979, this company tendered an offer of DKK 9 million.

The Board of the Lundbeck Foundation met one week later when the assessment was that it might be possible to get a higher price by selling to either a Swedish or an American company. Per Søltoft also expressed the opinion that an effort could possibly be made to invite further offers, but then he undoubtedly expressed the views of the whole board in the following as recorded in the minutes40 [he] agreed that it must be in the general interest of the Foundation that the laboratory should continue to be run by a Danish company, and this must also be assumed to be of decisive importance for the employees.

43

C O N S O L I D AT I O N , T I D Y I N G U P A N D A L L E R G O L O G I C A L A D V E N T U R E

This was no sooner said than done when an agreement was signed. Chr. Hansen was experiencing difficulties following several years of management crisis and threatening bottom line figures. The key figure in the transaction was Niels Harboe, whose wife, Annelise Uldall-Hansen, was a major stockholder in the enterprise. Niels Harboe succeeding in persuading Chr. Hansen’s managing director Steen Engel, who had joined the company in 1976, to buy ALK. Steen Engel now became board chairman of the ailing ALK, while the Lundbeck Foundation had got out of its brief allergological adventure. The Foundation was, however, held indemnified as the purchase price of DKK 9 million corresponded to the amount that had been invested during the approximately three years it had owned ALK. This had not been a success, and ten years would pass before the Foundation once again took over an enterprise. In November 1989, the Foundation purchased the majority holding in Chr. Hansen – and thus brought ALK under its wing once more.

44

CHAPTER 3

DONATIONS 1972-1989

T H E L U N D B E C K F O U N D AT I O N

T

he DKK 20,000 donation to Bent Weeke, who had started the entire allergological adventure, was only the second granted by the Foundation when it had taken over the Goldschmidt faction’s shares back

in 1968. The first was awarded to Foreningen Norden (the Nordic Association), which, on October 11 1972, was granted DKK 100,000 in financial sup-

port for its activity. Only these two donations were made that year, totalling DKK 120,000. This was a new start as such, after the donations in 1962 and 1963, at the same time as the donations changed in nature. They were no longer honorary awards but financial support for medical research; although for a number of years support for projects that served the common good was granted at the discretion of the board and formed a considerable part of the donations.1 The following year three donations were made: DKK 1,000 to a Miss Tove Meedom, an employee at Lundbeck, without any further details being recorded in the Foundation’s minute book. DKK 40,000 was also granted for the restoration of Tersløsegaard, a small manor house.2 A larger donation, DKK 300,000 was made to the Danish Medical Research Council. This donation was made without an application having been submitted, but following a recommendation by the executive management in Lundbeck, who urged the Foundation to support a new education programme for clinical pharmacologists, which the Research Council could not finance as planned due to the government’s savings plans. This was a major project, initiated by Professor Eigill Hvidberg, dr. med., and DKK 300,000 was sufficient to safeguard the first year. The Board of Trustees was in agreement about the necessity of supporting “this very important study programme, the commencement of which could not be postponed”. The DKK 300,000 could finance the first year of the programme, and the grant was made as an offer to the Research Council, which “gratefully and with interest” accepted it. It was agreed that the Research Council should invite applications through Ugeskrift for Læger (Danish Medical Journal) from potential students of the new study programme. The Council requested separate disbursement of the amounts that, upon application, would be awarded to the individual applicants.3 The type of education and how the money would be spent is unclear, but Eigill Hvidberg was the first in Denmark to call himself a clinical pharmacol-

47

KAPITEL 1

On the occasion of the 50th anniversary of Lundbeck, the company gave its first donation of DKK 100,000 to

ogist in public. In 1973, he was appointed to Denmark’s first Research Council Professorship as Director of the Danish Medical Research Council’s Clinical

the Danish Medical Association for

Pharmacological Research Unit in association with Medical Department A,

research in general practice. The As-

Copenhagen City Hospital. This was during the earliest phase of clinical

sociation was to distribute the funds

pharmacology in Denmark, as the Danish Society of Clinical Pharmacology

in the form of small grants to general

was only established in 1976, and the specialisation was first recognised in

practitioners. Attending the presenta-

1996. When the professorship was created, support was granted from foun-

tion were, from the left, the Chairman

dations, including the Lundbeck Foundation, for a number of activities that

of the Danish Medical Association, chief physician Jens Larsen, the Chairman of the Lundbeck Foundation and Lundbeck, Erik Birger Christensen and the two directors in Lund-

cannot be specified.

In 1974, a donation of DKK 53,293 went to Bent Weeke and Henning Løwenstein as well as DKK 50,000 to Per Stahl Skov; the following year this last-mentioned donation was converted to support for Dr. Svend Norn of

beck, Oluf Hübner and Olaf Thrane.

DKK 55,000. The World Wildlife Fund was granted DKK 10,000 when the

The donation was repeated in the

members of the board had had the opportunity to study material sent to

years that followed until it was taken

them and become familiar with the work and objectives of the Fund. At the

over by the Lundbeck Foundation.

end of the year, DKK 36,135 was donated for the procurement of an incubator with ancillary equipment for Copenhagen University’s Department of Medi-

48

T H E L U N D B E C K F O U N D AT I O N

cal Microbiology for a research project led by Peter Ebbesen, dr. med., on age-related cell sensitivity to the sarcoma virus.4 In 1975, a sum of up to DKK 5,500 was granted to psychiatrist Professor Ole Rafaelsen, dr. med., who had forwarded an application through P.V. Petersen for support to participate in a psychiatry congress in New York. It was also in 1975 that the Lundbeck Foundation gave its first registered rejection when it turned down an application from Dansk Samvirke (now Danes Worldwide) for a contribution to the society’s news coverage for Danes abroad: “the application was found to lie outside of the purposes that the Foundation can support”, was the reason given. Otherwise, there were not very many applications that year and the processing of Bent Weeke’s telex application was transferred to the following year.5 In 1976, there were more applications and likewise more grants were awarded. DKK 30,000 was granted in support for a Festschrift about the Copenhagen City Hospital’s Department of Surgery, which was celebrating its centenary as an independent department. When the decision was taken, it was noted that the applicant, Professor Flemming Lund, had been in charge of the first clinical trials in Denmark of the Lundbeck subsidiary Leo AB’s new cancer drug, Estracyt. DKK 80,000 was donated for a symposium of psychiatrists in Copenhagen, and the work of restoring Tersløsegaard received a further DKK 30,000. On the other hand, two applications were rejected: one for the publication of a book on the theory of medical science; and one for an application for DKK 35,000 from Komiteen til forebyggelse af Blindhed (the Committee for the Prevention of Blindness), which needed funds to respond favourably to applications for support for research and the prevention of blindness all over the world.6 One donation of a special nature was made to the Danish Medical Association, DADL. Since its 50th anniversary in 1965, Lundbeck had made five such donations to support research by general practitioners in Denmark, but in all likelihood because of the company’s strained financial situation, the Board of Trustees now discussed “the appropriateness” of taking over the donations. In the first instance the board enquired whether DADL was still interested in such donations, and when the Board of the Medical Association stated that they would be “grateful” for a donation from the Lundbeck Foundation, DKK 100,000 was granted.7

49

D O N AT I O N S 1 9 7 2 - 1 9 8 9

Book on an historic building Finally, in 1976 DKK 109,479 was granted for the publication of a book about Det kgl. Assistenshus (an historical pawnbroker institution), to which was added a further DKK 15,000 in author’s fees to complete the work. This is an interesting grant, among other things because it provides insight into how the board worked at this time.

The donation had roots back in autumn 1974, when the former director of Det kgl. Assistenshus, Hans Thueslev, cand. jur., had applied for financial support to publish a book he had written about the history of Assistenshuset.

The Board of Trustees were in favour, and when Børge Sørensen had read the manuscript, he recommended that the board should proceed in the matter.

Vagn Dybdahl, dr. phil., chief archivist of the State’s Historical Archives in Aarhus, had examined the manuscript and was positive although he suggested a number of additions and omissions, which Børge Sørensen took partly into account when editing the manuscript.8 The Board of Trustees discussed the possibility of Lundbeck using the book as a gift for doctors. They agreed that if that were the case, they would ask chief physician and medical historian Egill Snorrason, dr. med. et phil., to write a foreword. However, a number of other matters would have to be clarified before any final decision was made about the donation, but any amount granted would have to be “required for the publisher to take on the publication”. It was agreed that Børge Sørensen should speak with Director Thueslev, and that further work concerning the publication should be handed over to Erik Birger Christensen.9 A fully prepared manuscript and a proof impression, suggestions for binding and illustrations etc. were ready at the end of 1975. A financial estimate had also been prepared and it showed the need for a donation of approximately DKK 100,000 because Gads Forlag (the publisher Gad), who were responsible for production and publication, did not want to run any financial risk. It was decided that 900 copies should be printed, of which 100 were for the author and reviewers, 300 for Lundbeck for gifts, 200 for the Lundbeck Foundation to send to the members of the Danish Parliament, and 300 copies that Gads Forlag got on consignment for sale through the bookshops.10 The Board of Trustees were engaged in several details of the process of production, especially the binding and appearance of the book as a whole,

50

T H E L U N D B E C K F O U N D AT I O N

before it finally went into print in spring 1976. The total cost for the Lundbeck Foundation was DKK 109,479, to which was added a separate author’s fee of DKK 15,000 for Director Thueslev, who also received the proceeds of the sale

From the beginning of the 1970s and up to 2011, the Lundbeck Foundation provided financial support for the restoration and main-

in the bookshops. All copies of the book stated that the publication had re-

tenance of the Danish manor house

ceived support from the Lundbeck Foundation.

Tersløsegaard, which Ludvig Holberg had bequeathed to Sorø Akademi

Restoration of Tersløsegaard Another donation – or series of donations – in which the Lundbeck Foundation was engaged, although merely financially, was support for the restoration of Tersløsegaard, which commenced in 1973 with a first donation of DKK 40,000. Kann Rasmussen had suggested that the Foundation should donate a sum for the restoration of the small manor house, Tersløsegaard,

in 1945. The manor house is today a centre for Constitution Day events and cultural activities, including plays and music events that, among other things, celebrate Holberg’s life and works. (Photo: Den Holbergske Stiftelse Tersløsegaard)

where the writer Ludvig Holberg had spent his last summers after having bought the property in 1745. In his will, Holberg left the property to Sorø Akademi, which sold the home farm in 1818. In 1905, the main building and side wings were sold to Soransk Samfund (the union of former Sorø students), which asked the architect Martin Nyrop to do the restoration. In 1921, Den Holbergske Stiftelse Tersløsegaard, (the Holberg Foundation, Tersløsegaard) was established but the building retained its association with Soransk Samfund. It was the dedicated graduate of Sorø Akademi, board

51

D O N AT I O N S 1 9 7 2 - 1 9 8 9

member of Soransk Samfund 1963-69 and Chairman of Den Holbergske Stiftelse Tersløsegaard, A. Kann Rasmussen, who became engaged in the conservation of the building.

Conversion and renovation were urgently needed and would cost approximately DKK 80,000 of which Den Holbergske Stiftelse Tersløsegaard had only raised DKK 40,000. A. Kann Rasmussen therefore suggested that the Lundbeck Foundation should grant the remaining DKK 40,000, and this was carried unanimously at the board meeting on December 4 1973. Yet another grant of DKK 25,000 followed in March 1976 as a precondition for a grant from Det Særlige Bygningstilsyn (a building conservation association) of DKK 75,000. Later that year, another grant of DKK 10,000 was made, after which A. Kann Rasmussen expressed his thanks for the financial assistance for the work of restoration, “which there now was money to complete”.11 However, yet another donation to Tersløsegaard was made, although only in 1979 when A. Kann Rasmussen suggested that a sum of up to DKK 200,000 should be granted to Den Holbergske Stiftelse, Tersløsegaard. The money was to be used to establish sanitary facilities, which was necessary to attract a larger number of visitors. Referring to the earlier “interest in the property and Foundation” a unanimous board agreed to the chairman’s proposal.12 Later, the Lundbeck Foundation also granted financial support to Tersløsegaard, including for thorough renovation and restoration, which was finalised in 2011.

Support for staff, former employees and spouses Personnel and former employees in Lundbeck constituted a group that received particular attention, in accordance with the provisions of the trust deed. In March 1974 DKK 50,000 was donated to the Hjælpefonden for Medarbejdere i Lundbeck (Assistance fund for staff of Lundbeck). This fund had reacted favourably to so many loan applications that there was a risk it would have to suspend its loan and assistance activity for a period. In 1976, a further DKK 100,000 was granted to the Hjælpefonden, which from now on continued to receive donations when the need arose.13 A specific type of support for staff or former employees that Grete Lundbeck had inserted in the trust deed was a provision concerning the acquisi-

52

T H E L U N D B E C K F O U N D AT I O N

tion of a property to be used for fully or partly free residences. In former times, foundations had been a widespread form of housing assistance, established by professional organisations, guilds and other professional bodies or private philanthropists. However, with the housing market and the general development in welfare with housing benefit and sheltered housing for the elderly, such schemes had become outdated and the Foundations were gradually closed down.

At the board meeting of the Lundbeck Foundation on June 11 1974, Holger Byfeldt also stated that “there had been no need for such a property up to now”, and that “the need would hardly arise in the foreseeable future”. In addition, there could be “unfortunate tax repercussions” for the Foundation if it owned property. Therefore, Byfeldt suggested that the board lived up to the intentions of the trust deed by placing a sum of money at the disposal of former employees and their widowed spouses as rent subsidies. He estimated that around 20 people would be involved, and on that basis, the board decided to donate up to DKK 20,000 each year for the years 1974 and 1975 to be disbursed in portions of DKK 1,000. This sum was raised to DKK 25,000 for 1976.14 More ordinary fringe benefits that were granted at the end of 1975, were DKK 1,500 to the Sportsforeningens Julelotteri (Sports club’s Christmas lottery), DKK 1,000 to the Christmas tree party and DKK 4,000 to the celebration by the Fællesklubben (joint workplace club) on the occasion of its 25th anniversary.15

Special prioritisation of medical science By the end of 1976, since it had resumed awarding grants in 1972 the Lundbeck Foundation had donated a total of DKK 1,319,245, here shown in relation to the Foundation’s net surplus:16 Year

Net surplus

Donations

1972

2,487,980 120,000

1973

4,426,050 341,000

1974

2,759,348 145,293

1975

5,643,206 133,472

1976 Total

5,559,389 579,479 20,875,973 1,319,244

53

D O N AT I O N S 1 9 7 2 - 1 9 8 9

The figures reveal that this was to a great extent a deliberate expansion of the Foundation’s capital, primarily achieved by buying bonds. On the other hand, there was no actually formulated grants policy apart from the provisions in the trust deed, which left a great deal up to the discretion of the board. The grants to Tersløsegaard and the book about Det kgl. Assistenshus had amounted to almost a quarter of the donations in all. Despite this, it also appears that medical research nevertheless had been highly prioritised, not least with grants to allergology, which received more than DKK 150,000 in all over the five years. To this were added grants of DKK 100,000 to DADL, DKK 300,000 to the Danish Medical Research Council and DKK 80,000 to the psychiatry symposium.

Special prioritisation of medical research also appears from the fact that at one point the board considered placing an announcement of the annual grants in Ugeskrift for Læger (Danish Medical Journal). It was decided not to do this without any reasons being recorded.17 Despite the prioritisation of medical research, the number of grants for this area fell in 1977 when the Lundbeck Foundation’s net surplus was DKK 7,450,259, while total donations fell to DKK 343,646. The lion’s share went to support for staff and former employees at Lundbeck, as the Hjælpefonden received no less than DKK 200,000, and DKK 20,000 was granted in rental assistance. At the request of high court solicitor Knud Ehlers, DKK 40,000 of the other funds was granted to the 8th Annual Congress of the International Federation for European Law, which was to be held in Copenhagen in 1978.

DKK 83,600 or just over 24 percent remained, all of which went to medical research, apart from DKK 4,000 to support the publication of psychiatrist Jørgen Ravn’s memoirs. The largest sum of DKK 51,173 was donated to the Department of Neurosurgery at Hvidovre Hospital for the purchase of equipment for measuring intracranial pressure.18

A preliminary high point The large amount granted to Hjælpefonden was undoubtedly due to the financial crisis and the high unemployment rate, and in July 1978 another DKK 50,000 was also donated with reference to “the liquidity of Hjælpekassen [being] under a strain at the moment”. It was likewise decided to raise the sum for rental assistance to DKK 40,000 and to increase the portions to DKK

54

T H E L U N D B E C K F O U N D AT I O N

2,000 a year. This looked like business as usual, but 1978 was to constitute a preliminary high point in the development of the Lundbeck Foundation.19 The net surplus for that year was DKK 8,362,999, but the amount granted had more than quadrupled in relation to the previous year and at DKK 1,497,383, it was almost as big as the total grants awarded since 1972. Although the amount included the annual DKK 300,000 to the Allergy Laboratory at Copenhagen City Hospital, which had been taken over from ALK, the amount was still on the better side of DKK 1 million.20 A massive increase in support for medicine, not merely in absolute figures but also relatively, was a new departure when it came to allocations.

Exclusive of support for present and past employees at Lundbeck as well as pension obligations to former board members of DKK 30,000, which had not previously been entered into the accounts under donations, all of the remaining DKK 1,371,388, or 92 percent, was donated to “scientific purposes” and predominantly to medical science. Some of the larger donations were: a renewed DKK 100,000 to DADL for research in general practice, DKK 103,840 to the mental institution Sct. Hans Hospital for procuring an integrator for mathematical calculations, DKK 200,000 to Dansk Selskab for Radioterapi (the Danish association for radiotherapy), and no less than DKK 560,000 to Radiumstationen på Finseninstituttet (Radium station at the Finsen Institute) to procure equipment for cell kinetic examination of cancer patients.21 Furthermore, for the first time the minute book of the Lundbeck Foundation contains an indication of a targeted grants policy. When the board decided to support three projects on July 7 1978, this was accompanied by the remark that “all applications are within areas in which the Foundation has shown special interest, namely cancer and psychiatry”, reflecting Lundbeck’s interests in the development and production of new drugs in precisely these two areas. The chairman, Børge Sørensen, therefore recommended that all three applications be granted, two of which were to Dansk Selskab for Radioterapi and Sct. Hans Hospital.22 After the huge increase in grants, there was a minor decrease to DKK 1,140,223 in 1979, less than half of which went to medical science. DKK 922,223 remained when DKK 70,000 had been paid out in pensions and support amounting to DKK 148,000 to present and past staff in the Lundbeck

55

D O N AT I O N S 1 9 7 2 - 1 9 8 9

Group. DKK 435,000 of this was donated to “other purposes decided by the board”, namely the further DKK 200,000 to Tersløsegaard at the suggestion of A. Kann Rasmussen, DKK 200,000 to support the publication of a book in English about rhododendrons, proposed by A. Kann Rasmussen, and at Niels Harboe’s suggestion DKK 35,000 in support for a book about the Danish nobleman Jens Holgersen Ulfstand’s fortress, Glimmingehus.23 The remaining DKK 487,223, or about 43 percent, went to medical science in various ways. Another DKK 300,000 was donated to Copenhagen City Hospital’s Allergy Laboratory for “hospitals and combating diseases” while Sct. Hans Hospital was granted DKK 37,223 for the procurement of a stereotactical instrument. The DKK 150,000 that was left over was donated to “scientific purposes”, DKK 100,000 of which went to DADL, and the rest was divided over four smaller donations, among these DKK 20,000 to the Literature Committee of the Danish Arts Foundation, without the specific purpose being Per Søltoft (1912-2003) joined the Board of the Lundbeck Foundation in 1978 and was chairman from 1982 to

mentioned.24 1980 saw yet another decrease in grants to DKK 877,500. On the other hand, after the sale of ALK the Foundation was no longer obliged to grant the

1987. He was a chemical engineer,

annual donation of DKK 300,000 to the Copenhagen City Hospital Allergy

and, in 1952, became head of labora-

Clinic, and when this sum is deducted, the grants that year were on the same

tory and professor of technical chem-

level as the previous year. With respect to the distribution of donations, the

istry at Polyteknisk Læreanstalt (Poly-

Foundation was back on the track from 1978, as DKK 681,000, about 78 per-

techncial College, now the Technical

cent, went to medical science. A separate DKK 133,362 for hospitals and com-

University of Denmark). In his time as

bating diseases went to the Finsen Institute for technical equipment, as well

Chairman of the Lundbeck Foundation, the annual grants were raised and the donations became bigger and multiannual. At the beginning of 1986, he

as DKK 46,400 to the nurse Kirsten Bruun for a visit to the USA to study intensive nursing. The remaining DKK 501,728 was donated to scientific purposes, DKK 100,000 of which went to DADL. In addition, DKK 70,000 was

presented a proposal for the first ac-

donated to pensions and DKK 46,000 in support to present and past employ-

tual guidelines for grants by the Lund-

ees. Moreover, Holger Byfeldt’s son, Hans Byfeldt, cand. jur., received DKK

beck Foundation. He was a Member of

80,000 for participation in a course at I.M.E.D.E. (the Institute for Business

the Board of Lundbeck from 1978 and

Management), today part of IMD, the internationally recognised business

Chairman from 1979-1986.

school in Switzerland.25

56

T H E L U N D B E C K F O U N D AT I O N

In 1981 the donations once more fell to DKK 646,864 – a record low since 1978 – while DKK 339,503 went to medical science. Two grants for other purposes decided by the board together received DKK 157,760 in all – of which DKK 100,000 to an international chemistry congress, which must be said to be a scientific purpose related to research in Lundbeck – while pensions and support for employees together comprised DKK 152,667.26

A change Then something happened again. In 1982, the donations were increased to a record high of DKK 2,369,165, of which DKK 1,800,291, or 76 percent, was for scientific purposes and quite predominantly medical research. “Support for nurses” constituted a modest DKK 4,000, but was recorded as an independent, although minor category in the future also, signalling a new orientation in the grants policy. “Other purposes determined by the board” received DKK 215,874, including DKK 155,874 for the completion of a geological research project, DKK 10,000 for studying ancient Egyptian graffiti – and DKK 50,000 was donated for the purchase of art for the offices on Ottiliavej. Finally, there were the two usual items: pensions and support for present and past employees, of DKK 60,000 and DKK 289,000, respectively.27 The significant rise was not a one-off event as in 1978, but marked a turning point in Lundbeck Foundation donations. The amount donated was increased once more in 1983, this time to DKK 3,121,647, and in 1984 once more to DKK 5,590,225, most of both years’ donations going to health science purposes in the broad sense, the major part to actual research. Following a decrease in 1985, in 1986 the donations again rose to a record high DKK 6,050,471. This was followed by a dramatic jump to just under DKK 24 million. The previous ten years’ donations were as follows (in DKK):

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D O N AT I O N S 1 9 7 2 - 1 9 8 9

Year

Net surplus

Donations

1977

7,450, 259

343,673

1978

8,362,999

1,497,383

1979

9,083,763

1,126,997

1980

10,849,220

877,500

1981

16,712,498

684,397

1982

20,247,219

2,369,165

1983

26,970,469

3,121,647

1984

41,465,471

5,590,225

1985

50,547,862

4,560,433

1986

52,850,730

6,057,471

1987

42,681,729

23,919,334

After the first boost in the annual donations in 1978 had been succeeded by a declining tendency, a new and further increased rise came in 1982, followed by stable growth in the annual donations up to and including 1986. In 1987, there was a quite extraordinary increase in the annual donations, folNiels Harboe (1918-2006) was a Member of the Board of Trustees of the Lundbeck Foundation from 1978 to 1993, and chairman from 1987. He

lowed by constant, sustained growth in the subsequent years.

This means that the donations were raised to a quite different level, which had both internal and external causes.

research and business activities, he

New chairman, new foundation legislation, and new trust deed

strove to build bridges between re-

Otto Thrane’s period as Chairman of the Lundbeck Foundation was short as

search at universities and the Danish

he retired from this position already in April 1982, but continued as a rank-

corporate sector. As chairman, Niels

and-file member. Professor P. Søltoft, dr. techn., became the new chairman.

trained as a doctor and through his

Harboe accomplished a considerable increase in Lundbeck Foundation donations for research, and he was the key figure when the Foundation ac-

It was precisely in 1982 that the second large-scale and continued increase in donations commenced. This was hardly a coincidence; a couple of years later it became clear that Per Søltoft had intentions concerning a new, more am-

quired the ingredients company, Chr.

bitious and targeted donation policy. This was influenced by events outside

Hansens Laboratorium A/S, in 1989.

both the Lundbeck Foundation and the Lundbeck Group as a whole.

He was also a Member of the Board of Lundbeck 1985-1992.

On May 31 1983 a law on the registration of Danish Foundations in a foundation register in the Ministry of Justice was ratified, and the following year, on June 6 1984, both a general foundations’ bill and the Lov om Erhvervsdriv-

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ende Fonde (Bill on Business Foundations) were ratified. The legislation followed several years of public and political debate about foundations and not least the question of taxation – or rather lack of taxation – of these. A Lov om Beskatning af Fonde, visse Foreninger og Institutter m.v. (Bill on Taxation of Foundations, Certain Societies and Institutes etc.) was, in fact, being drafted and it was adopted on March 19 1986, to take effect from January 1 1987.

In the terms of the new legislation, business foundations such as the Lundbeck Foundation were to be registered in the Register of Companies with their CVR number (Central Business Registration Number). A 50 percent tax was introduced after deduction of provisions of consolidation as well as allotments to social/charitable purposes and provisions for these.

Provisions for consolidation were not to comprise more than 25 percent of the total allotments, and provision for allotment was to be utilised within the space of five years.

The minutes of the board meeting on May 13 1987 show that the greatly increased grants were related to the legislation when the board was informed that calculations showed that in the case of a corresponding tax obligation as in 1986, the Foundation would have had to pay approximately DKK 21.9 million in tax.28 The Folketing (Danish Parliament) fundamentally changed the rules of the game for Danish foundations, and for business foundations in particular with this legislation. Because of this, the Board of the Lundbeck Foundation decided to amend its trust deed, and at the same time thoroughly to reorganise the sections and provisions, many of which – in spite of ongoing adaptation and adjustments over the years – had remained unchanged since Grete Lundbeck’s time. A carefully prepared proposal that had been discussed at length was presented for adoption by the board on January 21 1986. However, the board decided to postpone the final decision until the next meeting, when they could make a final decision on the accompanying amendments in the rules of procedure.29 The trust deed was then adopted at the next meeting of the board on March 18 1986, where a new member, Director Sven Dyrløv Madsen, participated for the first time, having been elected member at the previous meeting.

Sven Dyrløv Madsen was a veterinary surgeon and between 1970 and 1985, he had been the managing director of Danske Slagterier og ESS-Food (Dan-

59

KAPITEL 1

The first to be awarded the P.V. Petersen Prize after P.V. Petersen himself was Professor Mogens Schou

ish Abattoirs and ESS-Food), after which he had joined Lauritzen Holding A/S, also as managing director. Jannik Bjerrum had left the board in Febru-

(1918-2005) of the Psychiatric Hospi-

ary 1984 on grounds of age, after which director Torben Grandt was elected

tal in Aarhus, who was awarded the

to replace him. The board had now been expanded from four to five mem-

prize in 1988 for his work with lithium

bers.

for treating bipolar disorder. Here he

To judge from the minute book, the adoption of the new trust deed pro-

is together with the Chairman of the

ceeded smoothly in spite of the many amended sections and provisions, al-

Board of Trustees of the Lundbeck

though no substantial changes had been made. One innovation was adapta-

Foundation, Niels Harboe, when the prize was awarded.

tion to legislation according to which the personnel in the Foundation’s subsidiaries were given the opportunity to elect members to the board. If this were to happen, it was, however, important, that these board members only took part in the “Foundation’s business activity” and not in decisions about grants. At a meeting on September 2 1986, the first staff members of Lundbeck, John Holst, smith, Henriette Lund, packer, and Torben Nielsen, production manager, took their places on the board.

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T H E L U N D B E C K F O U N D AT I O N

The first grant guidelines At its meeting on January 21 1986 it was clear that Per Søltoft wished to change the grants policy when he presented a set of “Guidelines for grants from the Lundbeck Foundation” together with a set of “Views concerning grants from the Lundbeck Foundation” for the board to discuss. While the contents of these two written documents are not known and the subsequent discussion is not recorded in the minute book, the discussion ended in agreement not to adopt “any formal guidelines for the Foundation’s grants policy”.

However, the board agreed to support large-scale projects at Danish research institutions “to a greater extent than hitherto”. Moreover, the project descriptions in such cases were to be drawn up “in cooperation between the institution in question and the Board of the Foundation”, and the board was to request advisory assistance from Lundbeck or others.30 Even though written guidelines had not been formulated, Per Søltoft’s views would seem to have had consequences, and no matter how limited they may appear, the board’s conclusions were to leave their mark on the grants policy of the Foundation from now on. A new development had been initiated, and although the results were hardly evident yet, Per Søltoft was duly praised for this and for his overall contribution to the Foundation when he retired as chairman at the board meeting on May 13 1987, and left the board an grounds of age.

Instead, the CEO of Cheminova A/S, the chemical engineer Arne V. Jensen, who had been elected to the board of Lundbeck in 1984, was now appointed to the board of the Foundation, as was the Director of the State Serum Institute, Nils Axelsen. Dr. med. Niels Harboe was elected new chairman and a new management executive was engaged when Poul A. Christensen, former CFO of Lundbeck, was welcomed after having been appointed on May 15 1987 to replace the solicitor Hans Byfeldt, who had suddenly retired from the whole group earlier in the year.31 Concluding the annual general meeting, Niels Harboe thanked Per Søltoft for his contribution, both for having taken part in “major decisions” at a time when the Foundation’s capital had grown “to a very substantial sum”, but also for having broached the idea of principles for grants on the basis of consideration both for Lundbeck and the legislation and altered tax rules, which had already led to “the first big grants”.32

61

D O N AT I O N S 1 9 7 2 - 1 9 8 9

Niels Harboe was undoubtedly referring to three large grants that were made during Per Søltoft’s term of office. The first was a donation of SEK 1,859,000, corresponding to DKK 2.23 million, over three years, granted in February 1984 to the Swedish professor Urban Ungerstedt, dr. med., of Karolinska Institute. Ungerstedt was one of the world’s leading and best-known researchers in the field of pharmacology, and he had applied for support partly to purchase equipment and partly for operational expenses, including remuneration of “necessary assistance” for three years for operating the equipment. The project was to be carried out in collaboration with researchers at Lundbeck, and following a report on the project by the company’s director of research P.V. Petersen, the amount applied for was granted unanimously.33 The second donation was DKK 2,090,000 over three years and it was granted in December 1985 to Povl Krogsgaard-Larsen, dr. pharm., Associate Professor of the Department of Chemistry at the Danish School of Pharmaceutical Sciences for a research project on “Design and development of model substances to regulate neuro-degenerative processes in the central nervous system”. The application was elaborated and recommended by P.V. Petersen and deputy director A.V. Christensen of Lundbeck. The money was granted with the proviso that the Lundbeck Foundation was the sole donor.34 The third donation was DKK 1,980,000 over two years and it was granted in May 1987 to Professor Hans Bundgaard, dr. pharm., of the Danish School of Pharmaceutical Sciences for a research project in the area of “Improvement of the therapeutic effects of medicine through the development of new prodrugs”. The project was to facilitate the development of new pharmaceuticals that were more effective and had fewer side effects. At the meeting, the project was explained and warmly recommended by the director of research A.V. Christensen, who stressed that it had to do with a technique that Lundbeck did not master, but would be “very interested in”.35 At the same meeting, the board decided to set up the Lundbeck Foundation P.V. Petersen Award of DKK 100,000 tax-free. Some weeks prior to this, on April 30 1987, the award had been made to P.V. Petersen for his “many years of outstanding work with psychotropic drugs etc.” In the future, this was to be given as an honorary award to researchers “who have worked within scientific areas related to Lundbeck’s activities.”36

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T H E L U N D B E C K F O U N D AT I O N

The donations that Niels Harboe referred to had their size and multi-annual term in common as well as their immediate relation to and significance for research and development in Lundbeck. The last donation was decided at the annual general meeting of the board on May 13 1987, and thus it was one of the last grants that Per Søltoft took part in allocating.

Besides these very large donations, there were many small, medium and

In 1987, Research Professor Niels A. Lassen dr.med. (1926-1997) received DKK 10 million for the procurement of a gamma ray tomograph that could take three-dimensional images of parts of the body or the whole body.

Niels A. Lassen performed ground-

large grants, ranging from a couple of thousand to several hundred thousand

breaking research in the field of phys-

Danish kroner, made possible by the greatly increased annual sum available

iology, including blood circulation and

for grants. The donations to DADL – which, on application, then awarded

brain function. In 1968, he described

“Lundbeck’s Bequest” for research in general practice – still existed. From 1983 the model was copied when the Scandinavian Society for Psychopharmacology was granted DKK 250,000 to pass on awards in the form of “Lundbeck fellowships”, while DADL received DKK 200,000 the same year. Up to now, the

increased blood flow in areas of the brain that had been affected by a blood clot, giving the phenomenon the name luxury perfusion. The purpose of the total gamma ray tomo-

donations to DADL had been the only exception to the Foundation’s general

graph was not solely to support Niels

principle not to relinquish the right to itself make decisions about donations.

A. Lassen’s research, but also to in-

However, referring to the fact that the area of the Scandinavian Society for

crease treatment options for patients.

Psychopharmacology “is of key importance for H. Lundbeck & Co. A/S”, the

Even in the light of later donations,

amount applied for was granted for the desired purpose. In 1985, the two or-

this was a quite substantial grant.

ganisations once more received DKK 200,000 and DKK 250,000, respectively.37

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D O N AT I O N S 1 9 7 2 - 1 9 8 9

The donation of DKK 1 million to research at Sct. Hans Hospital should also be mentioned. This donation, proposed by the executive management of Lundbeck on the occasion of the centenary of the birth of Hans Lundbeck, was made in the middle of May 1985. The background was “the close cooperation that has taken place between research at the hospital and research at H. Lundbeck & Co. A/S”, and because research at Sct. Hans was thought to be in danger due to public cuts and savings in appropriations for the hospital.38 Finally, in 1986 a donation of DKK 3 million was made to Bent Weeke for the development of a new method for allergological diagnosis. This donation, however, differed from the usual grants by having a direct commercial aim from the beginning, and with immediate effect. In 1987, this led to the establishment of H. Lundbeck Diagnostics A/S, owned by the Lundbeck Foundation, which transferred ownership to Lundbeck at the end of the year with a view to marketing under the name Lucotest-HR. However, the method never functioned as intended and Lundbeck Diagnostics was dissolved in autumn 1989.

“Special applications” It was apparent that the new grants practice introduced by Per Søltoft had come to stay when at its meeting on October 2 1987 the board gave preferential treatment to “special applications”, having made decisions regarding 56 submissions. Peter Nansen, dr. med. vet., Research Professor of the Department of Veterinary Microbiology and Hygiene at the Royal Danish and Veterinary and Agricultural University, was granted DKK 3 million for a threeyear research project with the objective of establishing a basis of knowledge for the potential development and production of vaccines or other methods of protection against parasitic disease in animals and humans. Lars-Inge Larsson, dr. med., Research Professor of the Department of Pathology and Anatomy at Copenhagen University, was granted up to DKK 4.5 million, which would finance half of a cancer research project on the “Localisation and function of cybernins in normal and neoplastic cells”.39 Finally, Niels A. Lassen, dr. med., Research Professor of Bispebjerg Hospital, was granted DKK 10,248,000 for the procurement of a total body gamma ray tomograph, which could take three-dimensional cross-section pictures of the heart and brain and also of the entire body, which was important for di-

64

T H E L U N D B E C K F O U N D AT I O N

agnosing and therefore for combating certain forms of cancer. However, this was not a piece of equipment that could just be bought; it would have to be built by the Danish company, Medimatic A/S, allegedly within a period of one to two years. A contract was signed between the Lundbeck Foundation and Medimatic A/S in spring 1988, and delivery was expected to take place at the beginning of 1989.40 However, this was not to be, although the details of an apparently dramatic course of events are not known. Already when the contract was being signed the Lundbeck Foundation noted that while Medimatic had “excellent technical expertise”, the financial situation of the firm was “weak and uncertain”. The Foundation tried to safeguard itself, but nevertheless a risk of up to DKK 6 million would have to be reckoned with until the finished and approved gamma tomograph had been delivered.41 Later in the year in September 1988, Professor Niels A. Lassen informed the Lundbeck Foundation that Medimatic had now completed the “computer part”, but the Board of Trustees was quite clearly not confident about the situation. At any rate, the chairman, Niels Harboe, informed the board that he would contact the firm’s executive management “to ascertain the company’s situation”.42 The minute book of the Lundbeck Foundation contains no mention of the donation for almost nine months, and the relief is evident when at the beginning of June 1989 the chairman could inform the board that it now seemed that the project was nearing completion. The delay was due in particular to Medimatics “weak and very unsure financial situation”, but after a number of large creditors had agreed to a reconstruction proposal where the unsecured debt was reduced by 85 percent, the firm was once more solvent. It was now regarded as “probable”, that the gamma tomograph could be completed and delivered within three to four months.43 There is no more mention of the project in the minutes of the Lundbeck Foundation but this does not mean that the prediction about the completion and delivery of the gamma ray tomograph proved true. A prototype was set up at Bispebjerg Hospital and more software and hardware were developed.

However, the project came to a halt and the gamma tomograph was never put into service, although for a number of years the computer part was used in brain research.44

65

D O N AT I O N S 1 9 7 2 - 1 9 8 9

The first annual report The total body gamma ray tomograph and Niels A. Lassen’ work and expectations regarding the new acquisition was among the supported projects that received mention in the 1987 annual report – the first ever of its kind. It appeared in autumn 1988 and dealt with the Foundation’s activity in 1987, with a report on the financial situation, a complete list of all donations and detailed accounts of a selected number of grants.45 Besides the total body gamma ray tomograph, Professor Hans Bundgaard’s work with a method to develop more effective medicine with fewer side effects was mentioned, as well as Research Professor Peter Nansen’s work with protection against parasites and its importance in among other areas pig production. A nursing project involving families with children who had been operated for congenital heart defects and a project concerning the effect of the current remuneration system on the conduct of general practitioners were also mentioned. Dr. Rasmus Fog, dr. med., the chief physician of Sct. Hans Hospital, gave an account of work with new neuroleptics and its significance. Finally, the P.V. Petersen Prize was presented in connection with a tribute to P.V. Petersen himself, who had been the first to be awarded the prize in recognition of his importance to Lundbeck’s psychopharmacological research.

This quite new openness was undoubtedly due to the fact that 1988 was also the very first year that Lundbeck issued a written annual report dealing with the running and development of the firm in 1987.

It was also the first time that the Lundbeck Foundation publicly presented a grants policy, as explained by Niels Harboe in his “Chairman’s report 1987”.

The starting point was that from 1986 to 1987 the Foundation had increased its grants from DKK 6 million to DKK 24 million. This was not due to more applications but “a change of policy which had been under consideration for some time.”

There were two motives. On the one hand, the founder, Mrs Grete Lundbeck, had wanted the Foundation to work for the best interests of Lundbeck.

This could be done by placing venture capital at disposal, but also by “playing a helping part in active and broad research being conducted in Denmark in the areas in which the firm is active.” On the other hand, a “very dangerous development” could be observed, namely that over time the state research

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T H E L U N D B E C K F O U N D AT I O N

councils had only “very small possibilities for granting substantial support to the few researchers who had genuinely great talents”. This was why they often went abroad. The alternative was that “their talents were starved”, giv-

In 1989, the Lundbeck Foundation donated DKK 5 million towards the construction and layout of a science and activity centre, Experimentarium, in

ing them little possibility of “influencing the next generation of researchers

Hellerup, north of Copenhagen with

and personnel in the industry”. Both in this question and in general Niels

the objective of promoting interest in

Harboe was of the opinion that the Lundbeck Foundation could play a role

natural science and technology. The

for the common good:

Egmont Foundation took the initiative for the centre and it donated DKK 25

The Lundbeck Foundation’s massive and multi-annual support is an important precondition for several long-term research projects being initiated and for retaining the accomplished personnel who were trained on site and whose creativity and manpower are of great importance for the implementation of the projects.

million, while Tuborgs Bryggerier A/S placed a bottling plant at disposal free of charge for 20 years. In addition, the Ministry of Higher Education and Science granted DKK 10 million.

Experimentarium opened on January

The Lundbeck Foundation’s enormous increase in grants was, therefore, no

9, 1991 and has had more than eight

one-off affair but a permanent occurrence. In the coming year the Founda-

million visitors. The Lundbeck Foun-

tion planned to spend approximately DKK 10 million per year on research

dation has made several grants to Ex-

groups that the research councils had judged excellent but whose applica-

perimentarium, most recently for a

tions had been turned down and who were working in areas that the Lundbeck Group would like to see “flourish”. The establishment of the P.V. Petersen Prize was part of this orientation as it was to be presented to “espe-

large-scale temporary exhibition about the brain. (Photo: Experimentarium)

cially eminent researchers who work or have worked in fields within the Lundbeck enterprise’s areas of interest.”

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D O N AT I O N S 1 9 7 2 - 1 9 8 9

In addition, the Foundation was to spend an annual DKK 5-7 million on more project-related research, where the projects were formulated by the universities and institutions of higher education in collaboration with Lundbeck or the Lundbeck Foundation. Finally DKK 8-10 million a year was to be used for other medical research, research in the natural sciences and veterinary science, research on nursing and other purposes that served the common good – all following appropriate application.

The financial basis of the changed grants policy was the capital of the Foundation, which had grown “very significantly” in recent years and amounted to DKK 573,165,634 at the end of 1987:46 This is the basis for the Foundation now being in a position to make a long-term contribution to society. This is a contribution that will be felt because it is concentrated in fields that are neglected in a society that often finds it difficult to plan further than to the next election.

The main figures in the profit and loss statement and balance sheet were also announced. In general, the annual reports from 1987 and the following years represent a breakthrough compared to the lack of openness that the Foundation had hitherto shared with most other Danish foundations on the principle of ‘keeping one’s head down’ in relation to both capital and donations.

The decision back in 1975 not to disclose the donations in Ugeskrift for Læger (Danish Medical Journal) was in all likelihood an expression of this position.

Prioritisation of Lundbeck-related research In addition to mention of a selected number of large donations and their significance, the 1987 Annual Report also contained the first ever comprehensive and complete overview of the year’s donations. It was, furthermore, the first time that the purposes that the Foundation could support by the terms of its trust deed were made public.47 • Scientific purposes • Hospitals and combating diseases • Honorary awards for doctors, scientists or others • Grants to nurses

68

T H E L U N D B E C K F O U N D AT I O N

The Lundbeck Foundation made no secret of the fact that when administering these provisions, the Board of Trustees prioritised “to a special degree Danish researchers and research groups whose fields are within or close to H. Lundbeck A/S’ sphere of interest, as well as projects of a high international standard.”48 Within the Lundbeck Group, there was also a focus on financing the Group’s own internal research. When the 1988 budget was being determined, a grants portfolio of approximately DKK 25 million was expected, DKK 17 million of which was for scientific purposes and DKK 5 million for “special research assignments within the Lundbeck Group”. All in all, the Board of the Foundation was calling for internally initiated projects from Lundbeck “the implementation of which would be of value to Lundbeck and which can be financed by the Foundation”.49 However, in 1988 donations of “a mere” DKK 2,544,000 divided into three grants were awarded for “special research projects” in Lundbeck. They were all mentioned in the annual report: DKK 510,000 for the development of prodrugs for oral ingestion; DKK 489,000 for pharmaceutical, technological research concerning the release of pharmaceutical substances from polymer matrix substances; and DKK

From 1989, the Lundbeck Foundation made its voice heard in public political-economic debate by organizing a series of prize projects. The first two

1,545,000 for psychopharmacological and biological psychiatric research at

to receive prizes were Professor and

Sct. Hans Hospital, primarily two years’ payroll costs for research personnel.50

former Chief Economic Adviser Bent

There were no donations for internal Lundbeck projects the following

Rold Andersen (born 1929) and Asso-

year, apart from DKK 220,000 in support for Lundbeck Pharma A/S for sci-

ciate Professor, later Professor and

entific lectures at a symposium. The Lundbeck Foundation granted a total of

Chief Economic Adviser Peter Birch

just under DKK 27 million in 1989, of which DKK 19 million went to research.

DKK 5 million of the remainder was donated for setting up and equipping the science centre Experimentarium and DKK 1.8 million for the publication of the composer Niels W. Gade’s collected works.51

Openness, PR and public debate

Sørensen (born 1955). Here, they have just received the prize from the Chairman of the Lundbeck Foundation, Niels Harboe. The subject of the prize project was “Financing public expenditure in Denmark in the 1990s.”

The reason for the new openness was probably the sometimes heated public and political debate from the beginning of the 1980s about tax conditions for

69

D O N AT I O N S 1 9 7 2 - 1 9 8 9

the Foundations and their conditions generally, but also a desire to profile both the Lundbeck Foundation and Lundbeck in public. It is hardly a coincidence that it was in 1987 that the company also issued its first annual report.

Another expression of the new openness was the board’s decision on October 2 1987 to present the big grants at a large-scale public event in the presence of the Minister for Education and others. Freelance journalist Marianne Scheele was hired to organise the arrangement, and also to draw up the annual report, as well as Torben Busekist, Public Relations A/S. The board also decided that Marianne Scheele should “handle PR” in the nursing periodical Sygeplejersken concerning a grant totalling DKK 150,000 for nurses. These initiatives had no permanent significance, but they anticipated a more conscious, public-oriented attitude that followed some years later. 52 Much more effort than previously was devoted to linking the Lundbeck name to specific grants. Negotiations with the Danish Medical Research Council, SLF, began in autumn 1987 to establish as many as ten combined SLF/Lundbeck professorships. However, the negotiations came to nothing due to disagreement about the criteria for selecting the people in question.

The Research Council could not accept the Lundbeck Foundation’s demand to have a say as to who should be appointed to the professorships.53 On the other hand, in 1988 a four-year Lundbeck stipend was donated to Povl Krogsgaard-Larsen, Research Professor at Denmark’s School of Pharmaceutical Sciences in connection with his ongoing research project, which the Lundbeck Foundation also supported. In addition, he received a three-year postgraduate fellowship from Grete and Hans Lundbeck’s Bequest for the same project. From 1988, donations from Grete and Hans Lundbeck’s Bequest were also publicised in the Lundbeck Foundation’s annual reports, and they typically consisted of a number of Lundbeck stipends – scholar stipends or postgraduate fellowships for young researchers. Bequests were also donated to researchers, who themselves then selected the desired scholar54 Finally, Lundbeck made its voice heard in the public political-economic debate when in May 1989 it organised a prize project about the always highly topical subject, “Financing public expenditure in Denmark in the 1990s”, with a prize of up to DKK 450,000. To this was added remunerations for the assessment committee, which consisted of Professor Karsten Laursen, Hans Zeuthen, State Statistician, and Linda Hulgaard, lawyer. The prize-winners

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T H E L U N D B E C K F O U N D AT I O N

were Associate Professor Peter Birch Sørensen, cand. et lic. polit., and Professor Bent Rold Andersen, cand. polit., who together received DKK 350,000.55 The Foundation continued to organise prize projects on topical and fundamental societal issues in the years that followed, taking the initiative “from time to time”. The topic of the 1990 prize project was “The structure and financing of the Danish health care system in the 1990s” when the prize was divided into three portions and awarded to director, Professor Kjeld Møller Pedersen, Øjvind Lidegaard, senior registrar, Jens Peter Steensen, head of department, and Torben Larsen, cand. oecon., consultant. The topic in 1992 was “Policy for the elderly in the future”, with the prize being divided between Professor Bent Rold Andersen, Assistant Professor Svend Erik Hougaard Jensen, cand. oecon., Associate Professor Søren Bo Nielsen, cand. scient. oecon., City Manager Svend Lundtorp, cand. polit., and Director of Social Services Torben Lindved Hansen, cand. polit., There were no more prize projects after this. Although the Foundation organised yet another prize project in 1996 entitled “A socio-economic analysis of improving the functional capacity of the elderly”, the prize was not awarded and no reason was given. At any rate, no more prizes were announced.56

71

CHAPTER 4

FROM SLUMBERING BILLION FOUNDATION TO ACTIVE INVESTOR

T H E L U N D B E C K F O U N D AT I O N

T

he Lundbeck Foundation’s new grants policy soon led to increased administration, which, as predicted in autumn 1987, would continue to grow. This raised two issues: the need for more personnel

and the future demand for premises. It was reckoned that the gradual freeing of rooms at the address Ottiliavej 9, where Lundbeck had its headquarters, would gradually cover the need for more space, while it was left up to the chairman and deputy chairman to manage the question of personnel and other administration, including accounting, where Lundbeck’s resources could be drawn on.1 More specifically, as far as the grants were concerned a medical consult-

ant would also be needed to assist in evaluating applications and to follow up on the donations that were granted. Therefore, on January 1 1988 Henrik Hertz, dr. med., chief physician of Copenhagen City Hospital, specialist in clinical chemistry and paediatrics, was associated as a consultant to evaluate and follow up on applications in the area of medicine.2 Likewise, on March 1 1988, a secretary was appointed for a preliminary period of 12 months because the expansion of administrative capacity would have to be adapted to the expected rising need due to the growing activities of the Foundation. One of the objectives was to take over the Foundation’s bookkeeping from Lundbeck, as the capacity of a new computer system that the company was acquiring could be utilised.3

A more active investment policy?

At the same time as the Lundbeck Foundation was making an effort to meet the growing medical and administrative demands caused by the increased grants activity, the need arose for expert assistance to administer the Foundation’s asset portfolio, which, aside from shares in the Lundbeck Group, had from the beginning largely been placed in bonds. This meant that the new orientation in the grants policy led to keener focus on the administration of the asset portfolio and the possibility of a greater yield.

The first time discussion about the Lundbeck Foundation’s investment policy was reported in the minute book is July 9 1973, when it was decided to suspend investments in bonds “for the time being” because the board wished to find new activities to spread the investments. The following year negotiations were conducted for the purchase of shares in Niro A/S – perhaps with

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KAPITEL 1

For many years, the domicile of the Lundbeck Foundation was in Lundbeck’s administration building

the intention of pursuing a more active ownership than the passive investments in the big listed Danish companies that, to a limited extent, had been

at Ottiliavej 9 in Valby, Copenhagen.

the practice hitherto. For unknown reasons, no shares were purchased in

During the years before 2001, the

Niro, but with the acquisition of ALK in 1977, the efforts paid off in both re-

Foundation’s offices were on the

spects. The Foundation’s subsequent investment of both capital and work

fourth floor of this building.

force showed that it was meant seriously.

However, this was not a successful acquisition, and it is reasonable to assume that the unsuccessful investment left its mark on the Lundbeck Foundation’s investment policy from then on as the board elected to invest in secure and easily negotiable securities and predominantly in bonds. At any rate, for the next many years the board’s minute book contains no report of the possibility of investing in securities other than bonds. On the contrary, as late as September 5 1984 the minutes of the meeting record as the unanimous view of the board that “the business manager should continue the present investment policy, in accordance with which re-investment is to take place in liquid, medium-dated stocks, bank shares and the like”.4

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It was only when the newly-elected employee representative, head of production Torben Nielsen, stated at the board meeting on February 13 that “the Foundation should aim at more active utilisation of the capital” that the question was once more taken up. This took place during a discussion about the budget for 1987, when it was announced that per December 31 1986, the equity was expected to be approximately DKK 785 million, “the greater part of which is placed in bonds”. In the final internal accounts for 1986, the Foundation’s equity was stated as DKK 798,183,678 and the investment income as:5 Dividends: 10,247,181 Interest: 53,292,607 Total: 63,539,781

The other members of the board were in agreement with Torben Nielsen.

Before the board meeting on October 2 1987, an overview of the Foundation’s investment of capital funds was issued as well as a list of the stock holdings.

The statement showed that in August and September, DKK 18 million had been invested in Danish listed shares “in outline in all the branches that are represented on the Copenhagen Stock Exchange”. Then followed the first recorded discussion since 1973 about the Foundation’s investment strategy.

“The different investment opportunities were discussed” and a decision was made on that basis that in the future the board should be kept informed when new securities were purchased.6

Agreement with Gudme Raaschou Asset Management When the 1988 budget was discussed at the next board meeting on December 16 1987, it had been drawn up on the premise that “no substantial changes take place in investment policy in 1988”. Nonetheless, a breakthrough was imminent, and at the following board meeting on March 23 1988, a list of shares bought in the first months of the year having been issued beforehand, the Foundation’s investments in shares in other companies were discussed and it was decided to place the Foundation’s investment policy on the agenda at a coming meeting.7 This took place on June 8 1988 when the design of an investment policy per se for the Lundbeck Foundation was considered. According to the min-

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utes, the board was in principle prepared to invest a considerably larger proportion of the Foundation’s asset portfolio in shares “than has previously been the case”. However, as this could be a risky affair and under all circumstances required special insight, it was decided to contact a professional investment consultancy firm. Gudme Raaschou Bankaktieselskab (Gudme Raaschou Asset Management) was proposed, and on this basis a concrete proposal was drawn up.8 The chairman then held a meeting with Gudme Raaschou, who, on the basis of material forwarded to them, were asked to draw up a proposal for an actual “strategy for the Foundation’s investment activity”, which would also apply to the bequest. It was exclusively a matter of consultancy, as Gudme Raaschou was not to manage the Lundbeck Foundation’s asset portfolio. This remained the responsibility of the board, and therefore it asked that when the financial accounts were presented in the future, information was provided about the “management of the securities holdings”, The antidepressive Truxal, launched in 1959, was Lundbeck’s breakthrough in the area of psychopharmacology. Lundbeck was one of the pioneers in the development

including any large-scale readjustments. At the same time, the board acknowledged that when the future investment policy was being drawn up, the chairman and deputy chairman should be granted “a certain right of disposal”.9 At the board meeting of December 14 1988, Gudme Raaschou’s proposal

of psychopharmaceuticals, and

for an agreement was presented, an agreement that could be terminated in

Truxal and the later products laid

part or in whole by both parties without prior notice. “Especially in view of the

the foundation for the company’s

quite considerable fee stipulated by Gudme Raaschou”, according to the min-

growth and development throughout

utes the board agreed to have the firm advise on about half of the Founda-

the 1960s and 1970s. This created the financial basis for the growing assets and grants of the Lundbeck Foundation.

tion’s total securities holdings, exclusive of shares in the companies of the Lundbeck Group. In addition, there was support for a proposal by the chairman, Niels Harboe, that the asset portfolio should in future be invested so that approximately one third was placed in Danish and foreign shares and the remainder in Danish and foreign bonds. Furthermore, as regards the shares, a 1:2 distribution between Danish and foreign shares should be aimed at.10 There is no record of the more detailed considerations on which this distribution was based, but at the next meeting on March 6 1989, Niels Harboe

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informed the board that an agreement had been reached with Gudme Raaschou concerning investment consulting for the Lundbeck Foundation’s total securities holdings. The annual fee was DKK 1.3 million and both parties could terminate the agreement without notice.11 In order to create “simplicity” in the composition of the portfolio, it was endeavoured to invest one third of the funds in shares and two-thirds in bonds. A proposal at the meeting to invest in foreign bonds was supported, as it was decided that up to half of the bond holdings should be converted from Danish to foreign bonds. It was, moreover, agreed that decisions regarding conversion should be made by a committee consisting of the Foundation’s chairman, deputy chairman and director based on Gudme Raaschou’s recommendations. In order to keep abreast of developments, every quarter the board was to receive a clear statement concerning the investments, including how they had developed with respect to placing, value and yield etc.

At the board meeting on June 7 1989, a statement of holdings and yield on securities for the period from January 1 to March 31 1989 was presented. On the advice of Gudme Raaschou, in this period, readjustments had been undertaken from bonds to foreign shares for a total sum of approximately DKK 125 million, and readjustments had also taken place in the holdings of Danish shares.12 The results of the new investment policy were quickly visible. At the board meeting on December 6 1989, the internal accounts for the first three quarters of the year were presented. These showed a profit before reserves and tax of DKK 74.4 million compared to DKK 37.4 million the previous year, which is twice the amount. According to the minutes, this increase was due to “essentially, extraordinary capital gains from the sale of securities”. This explanation disguised a new direction because previously the Lundbeck Foundation – when it did so – had invested in shares to obtain dividends; shares were now bought and sold to obtain capital gains. This outcome also led to a unanimous decision to discuss “a more active investment policy” concerning the whole of the Foundation’s securities holdings, with Gudme Raaschou as the investment counsellor.13 The results of the new, more active investment policy can clearly be seen in the Lundbeck Foundation’s statement in the annual reports for 1987-

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Results of investment of free funds Year

Dividend

Interest

Capital gains

Total

1987

1,495,191

49,429,667

2,809,618

53,734,476

1988

2,250,335 50,041.997 3,457,904 55,750,236

1989

4,858,560 39,918.681 51,371,041 95,148,282

1989.14 The profit, predominantly due to capital gains on purchase and sale of shares, was significant, and as was pointed out at the board meeting of the Foundation on March 20 1990, should be viewed in relation to the fact that Gudme Raaschou’s fee was approximately DKK 1.3 million.15

Takeover of Chr. Hansen Holding A/S At the end of 1989, alongside the more active investment policy, the Lundbeck Foundation bought a large share interest in the Danish ingredients firm Chr. Hansen Holding A/S. This was not an investment with a view to profit or future speculative short term profits, but a purchase with a view to achieving decisive influence in the firm. In addition to the ingredients firm Chr. Hansen A/S, the holding company also owned the allergy company ALK A/S, which the Lundbeck Foundation had sold to Chr. Hansen in 1979.

The purchase was not the result of a targeted search for potential takeovers, but of an opportunity which, according to the Foundation’s’ minute book, arose almost by chance. At the board meeting on May 11 1989, the chairman, Niels Harboe, presented a proposal that the Lundbeck Foundation should give “a more closely defined guarantee” to the holders of class A shares in Chr. Hansen Holding concerning the purchase of class A shares.

The total share capital was approximately DKK 65.28 million divided between approximately DKK 5.86 million class A shares and approximately DKK 59.68 million Class B shares.

The class A shares belonged predominantly to descendants of the founder of the company, Chr. Hansen, while institutional investors, of which the largest were the Employees Capital Pension Fund, ATP, and the Danish Labour Market Supplementary Pension Scheme, LD, held the class B shares, besides a number of minor personal shareholders. Since the class A shares had a tenfold voting right, these exercised just under half of the voting right. By the

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terms of a shareholder agreement covering about 95 percent of the class A shares, holders of class A shares could act as a unit vis-à-vis a buyer outside the family.16 Paradoxically enough, the problem for the holders of class A shares was that following many years of crisis, Chr. Hansen had entered a favourable development path with rapid growth. This would lead to demand for considerable capital increases, and the holders of class A shares would be able to participate in this to a limited degree only. Therefore, they were interested in the Lundbeck Foundation giving a guarantee that it would buy class A shares that the class A shareholders could not themselves purchase during capital increases or did not wish to keep. In this case, the market price should correspond to the listed price of the class B shares.17 It is unclear who among the class A shareholders was behind the proposal, but besides the fact that Niels Harboe was married to the large shareholder, Annelise Uldall-Hansen, he had also been a member of the board of Chr. Hansen since 1958 and had recently been elected chairman. It is, therefore, reasonable to assume that the suggestion was made by a group of class A shareholders with him as the intermediary. Under all circumstances, the “basic attitude [in the

As the photograph indicates, Niels Harboe thrived in the border area between research in natural science and medicine and business management

Lundbeck Foundation] was positive”. However, a final decision could not be

and development. He was the driving

made until an actual agreement existed in consultation with both Chr.

force when the Lundbeck Foundation

Hansen Holding’s and the Lundbeck Foundation’s advisers – which it was

took over the controlling interest in

implied was awaited now.

Chr. Hansen Holding in 1989, and

18

The process had been initiated and the question appeared on the agenda once more at an extraordinary meeting of the board of the Lundbeck Foundation on September 12 1989. A working group consisting of members of the

later in negotiations about the Foundation’s possible engagement in DAKO A/S.

board, deputy chairman Torben Grandt and Arne V. Jensen as well as the director of the Foundation, Poul A. Christensen, in consultation with the Foundation’s legal adviser, had previously investigated the whole issue. The soundings had uncovered among other things that several holders of class A shares in Chr. Hansen Holding were already interested in selling some of the shares to the Lundbeck Foundation.19

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Furthermore, Torben Grandt and Arne V. Jensen had held a meeting with Chr. Hansen Holding’s managing director, Steen Engel, who had provided an “in depth orientation” about the whole Chr. Hansen Group, including ALK. The result was that in the longer term, all expected “good cooperation possibilities with synergy effects” between the companies in the Chr. Hansen and Lundbeck Groups. Following a recent, small capital increase, the total share capital stood at nominal DKK 66,932,500. The class A shares constituted DKK 5,856,500 and exercised 48.95 percent of the voting right. It is unclear how many of the class A shares were for sale, but the price was 2,500. Having discussed the possibility of acquiring all the class A shares, the Lundbeck Foundation’s board – keeping in mind the Stock Exchange Code of Ethics – decided to aim at acquiring shares corresponding approximately to a 40 percent share of the votes.20 In order to move the process along, Torben Grandt and Arne V. Jensen had to have a mandate. While Niels Harboe left the meeting as he had a conflict of interest, the rest of the board granted the two a mandate to purchase shares in Chr. Hansen Holding with a voting share of about 40 percent at a price corresponding to the latest official price of class B shares plus 50 percent. If necessary, a price up to 2,500 could be offered.21 The board met again as early as September 25 and again on October 6 1989. Niels Harboe stated that a majority of 80-90 percent of class A shareholders was interested in selling to the Lundbeck Foundation and Grete and Hans Lundbeck’s Bequest. A transfer price of 2,400 had also been agreed, provided that at least 80 percent of the class A shareholders were willing to sell at that price.22 As the Lundbeck Foundation would then gain actual control of Chr. Hansen Holding, all the other class A shareholders as well as class B shareholders should also be offered a takeover. This could result in “a substantial strain on liquidity” for the Foundation. An upper limit of DKK 400 million for the investment was therefore decided, and on this basis a bid was entered to take over all the A share capital in Chr. Hansen Holding at a price of 2,400.

An offer was also made to take over all the class B shares at a price recommended by Danske Bank and Gudme Raaschou, which was the result.23 After the acquisition, as per January 1 1991 the Lundbeck Foundation merged with Grete and Hans Lundbeck’s Foundation, and for the first time

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the Foundation’s total capital passed DKK 1 billion – DKK 1.06 billion to be precise – of which DKK 232 million originated from the bequest.

“A slumbering billion foundation becomes an active investor” The news of the Lundbeck Foundation’s impending takeover of Chr. Hansen Holding received a great deal of attention in the press: “A slumbering billion foundation becomes an active investor”, was the headline in Berlingske Tidende’s business pages, and the paper published half a page about the takeover. With this purchase, the “enormously wealthy Lundbeck Foundation”, according to the newspaper, “had now really abandoned the role of passive and half-hidden billionaire”, and the acquisition of the class A shares in Chr. Hansen Holding “marked an active high point in the history of the 35-yearold billionaire”.24 The newspaper also wrote that the Lundbeck Foundation had not merely become active as an investor. According to the paper, in its first 30 years the Foundation had “not granted very much money”, but it was now on its way out of this “somewhat passive role”. In recent years the Foundation had “asserted itself more and more strongly in

Poul A. Christensen (born 1930) was CEO of the Lundbeck Foundation from 1987 to 1999. Before that, he had been CFO in Lundbeck.

that it granted millions for scientific purposes”. The chairman of the Founda-

As managing director, he took part

tion, Niels Harboe, told the newspaper that the Board of the Foundation had

in implement-ing the Lundbeck

decided to award grants “in the areas we would like to see flourish”, and that

Foundation’s more active investment

the Foundation would award DKK 25-30 million a year in the future.

policy and portfolio management

25

Niels Harboe explained the background of the announced purchase of

throughout the 1990s.

Chr. Hansen Holding by saying that “things were going almost too well” for the firm, and that the class A shareholders would be unable to fulfil the capital requirements of the coming years. The consequence could be that “an outsider” would buy up the class B shares and the A shareholders would lose their influence. For this reason they had decided to sell to the Lundbeck Foundation to ensure that the company “remains Danish and intact”, removing the risk of the research department being moved, which Harboe stressed as a particular danger. A merger with Lundbeck was, however, not on the

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agenda, as this would not give any particular synergy advantages. The two companies could exploit the fact that they could exchange experience “in full confidence”, as they now had the same owner.26 When the newspaper, referring to Niels Harboe’s double role as board chairman in both the Lundbeck Foundation and Chr. Hansen Holding, asked if he had been working for the takeover in recent years, he replied: “That is what I have spent the last three years of my life on.”27 The purchase agreement was signed in late November 1989, after which the Lundbeck Foundation owned approximately 90 percent of the A share capital and a smaller block of class B shares, and now had just under half of the votes in the company. As a consequence, Sven Dyrløv Madsen became the new chairman of Chr. Hansen Holding.

In the months that followed, a further smaller number of shares were acquired, and by June 1990 the Lundbeck Foundation had the absolute majority with about 52 percent of the votes. At the end of 1990, the Foundation owned 96.5 percent of the A share capital and 3.5 percent of the B share capital, corresponding to approximately 13 percent of the total share capital. However, as a result of the distribution of votes the Foundation exercised 52.7 percent of the voting right and thus had full control of the company.28 The two largest class B shareholders, ATP and LD, owned 13.69 and 12.29 percent, respectively, of the total share capital. The Lundbeck Foundation had an interest both in principle and probably also symbolically in being the biggest shareholder, and therefore it acquired more class B shares. This goal was not, however, systematically pursued as the Foundation regularly bought and sold Chr. Hansen shares with a view to capital gains and tax advantages, making sure that it still held a “suitable voting majority”.

In 1992, the Foundation obtained a tax-free profit of DKK 3.8 million on the sale of class B shares and a profit of DKK 11.2 million, half of which was tax-free, by selling subscription rights. In the first quarter of 1993, a further tax-free profit margin of DKK 9.5 million was obtained by selling class B shares. It was not until summer 1997 that the Lundbeck Foundation became the biggest shareholder in Chr. Hansen Holding.29

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DAKO A/S and BIODAN The Lundbeck Foundation’s annual report described the purchase of shares in Chr. Hansen as an indication that the board of the Foundation “had [wished] to engage in business investment proper more directly and in a more binding manner”. New engagements in Danish companies were also under way, once again instigated by Niels Harboe.30 Prior to the meeting of the Foundation on March 15 1991, a memorandum concerning the possible acquisition of shares in DAKO A/S by purchase or in connection with an issue had been sent out. The memorandum had been drawn up by Gudme Raaschou, which had also prepared a draft shareholders’ agreement. DAKO had been founded as DAKOPATTS in 1966 by Niels Harboe and his brother Gunnar Harboe with Niels as majority shareholder, which he still was. The company successfully researched and developed antibodies for cancer diagnosis. In 1979, the company set up in the USA, and the next year a number of foreign sales companies were established.

DAKO was a family-owned company, and Niels Harboe was both chairman of the board and a member of the executive management. Sven Dyrløv Madsen was also a member of the company board. At the meeting of the board of the Lundbeck Foundation Niels Harboe informed the board members of the DAKO shareholders’ deliberations about an alternative ownership structure, without details of these deliberations appearing in the minutes.

Consequently, the possibility had arisen for the Lundbeck Foundation to become co-owner with shares worth a nominal DKK 1.6 million, corresponding approximately to 10 percent of the share capital of DKK 16.8 million.31 Niels Harboe left the meeting and the rest of the board discussed the possibility, ending with a unanimously positive view. However, the board wanted an alternative financial analysis of DAKO to be prepared by Danske Bank, and if an agreement were reached, the board wished to take over as large a part of the share capital as possible with no distinction between A and B class shares.32 The possibility of active investment in DAKO caused the Lundbeck Foundation to consider establishing a holding structure where the shares in Lundbeck, Chr. Hansen Holding and DAKO were owned by a holding company called BIODAN. One of the purposes was to achieve greater flexibility as well as anticipated better utilisation of the synergy effects between the

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three biotechnology companies. At the board meeting on May 22 1991, it was decided to continue preparing a BIODAN construction, including an initial public offering of the holding company. The practical establishment would have to wait until Lundbeck had achieved “substantial improvement of earning power” through the registration and marketing of the new antidepressant, Cipramil, of which there were great hopes.33 Niels Harboe stated that DAKO’s shareholders would offer the Lundbeck Foundation shares corresponding to 11 percent of the total share capital, which the board accepted. The hope was expressed that the Foundation would later have the opportunity to acquire more shares, so that the block comprised at least one third and in the longer run minimum 51 percent of the share capital as a prerequisite for DAKO forming part of BIODAN. Moreover, the board found it “very important” that Niels Harboe should retain his influence in DAKO’s board and executive management. It was also agreed that “in the near Sven Dyrløv Madsen (1935-2003) was Chairman of the Board of Trustees of the Lundbeck Foundation be-

future” Gudme Raaschou should present plans for BIODAN to DAKO’s group of shareholders.34 It is not clear whether the Lundbeck Foundation was given the opportu-

tween 1995 and 2003 and a Member

nity it desired to increase its block of shares at a later date. However, it is

of the Board since 1986. He was also

obvious from the bid made by the board on June 13 1991 that the Foundation

a Member of the Board of Lundbeck

was extremely interested in acquiring at least one third of the company with

1993-2003, and between 1991 and

a view to creating BIODAN. The board offered to buy 11 percent of the share

2003, Chairman of the Board of Chr.

capital from DAKO’s shareholders for a cash price of DKK 24 million corre-

Hansen Holding A/S, in which the

sponding to market price 1,300, at the same time as indicating “a desired al-

Lundbeck Foundation had acquired a decisive shareholding in 1989.

ternative” of taking over 34 percent of the share capital for a cash price of DKK 90 million, corresponding to a market price of 1,575. Irrespective of the outcome, in connection with the purchase a written agreement was to be drawn up between the Foundation and Niels Harboe concerning his continued position in DAKO, as his influence in both the board and the executive management was considered very important.35 Following a series of negotiations, at the end of the year the parties reached a compromise, which was finally dealt with in the Board of the

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Foundation on December 16 1991. The Lundbeck Foundation could acquire a block of shares corresponding to one third of the total share capital plus DKK 1,000. This was to take place in connection with a capital increase of a nominal DKK 4.2 million. This was subscribed for by the Foundation, which also acquired a nominal DKK 2,801,000 of the existing shares. The market price was fixed at 1,575 corresponding to just over DKK 110 million in both cases.36 Meanwhile, for the sake of the BIODAN construction, the Lundbeck Foundation regarded a minimum shareholding of 51 percent as a necessity, and therefore the board wished to add a provision to the shareholders’ agreement giving the shareholders preemptive rights to offerings of shares proportionate to their shareholdings. Niels Harboe did not participate in discussions about the agreement due to his double position, but he had already discussed the issue with the deputy chairman of the Foundation, Torben Grandt, and had indicated that should the Lundbeck Foundation insist on this wish, agreement concerning a transaction could not be reached.37 This was indeed the wish of the Foundation, out of consideration for the BIODAN construction and a possible stock exchange listing of the holding company. “Without proportional preemptive rights for share offerings, the Foundation is uncertain how such a percentage can be obtained,” was the reason given, which Arne V. Jensen then communicated to Niels Harboe when he returned to the meeting. Niels Harboe stated that in order to safeguard the future of DAKO, he had wished to “attach the company to a qualified group of owners”, but that he and his fellow shareholders could not accept this condition. Arne V. Jensen replied by expressing the board’s appreciation that Niels Harboe had raised the issue and unconditionally acknowledged the legitimate interests of both parties. Nonetheless, it had to be said that the goals of the DAKO shareholders and the Lundbeck Foundation “were not fully compatible”.38 The negotiations thus ended unsuccessfully, as was the case with the Lundbeck Foundation’s plans for the BIODAN construction. Niels Harboe and his fellow shareholders then approached Novo Nordisk, from whom DAKO had just acquired the subsidiary Novo Nordisk Diagnostics in Cambridge, England. In 1992, Novo Nordisk entered DAKO’s group of owners and

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by degrees ended by owning a 27 percent share interest. This would prove to be a gilt-edged investment. In 2007 – a year after Niels Harboe’s death – the capital fund EQT bought the company for DKK 7.25 billion, DKK 1.5 billion of which went to Novo Nordisk. In 2012, DAKO was taken over by Agilent Technologies Inc. for DKK 12.8 billion.

No to NeuroSearch A/S Niels Harboe, whose time in Lundbeck was running out, had been the principal organiser and key person behind the purchase of Chr. Hansen Holding and the failed negotiations on DAKO. In 1992, he left the boards of Lundbeck and Chr. Hansen, and the board of the Lundbeck Foundation at its annual general meeting on June 4 1993 as he had reached the age limit of 75. He was replaced by the Foundation’s medical consultant, Henrik Hertz, dr. med., who was elected to the board at the same meeting. The civil engineer Torben Grandt became the new chairman.39 If the agreement about the takeover of the block of shares in DAKO had worked out, it would have had decisive influence not merely on the further development of the Lundbeck Foundation, but also on that of both Lundbeck and Chr. Hansen Holding, irrespective of what it contained. However, this was not to be, and the potential takeover of DAKO was the last specific and serious consideration of the purchase of new companies for a number of years – at any rate there is no reference to others in the board minutes.

Another opportunity arose soon after Niels Harboe’s retirement, when at the end of 1993 the Lundbeck Foundation received an inquiry from the Danish biotech firm NeuroSearch A/S through Arne V. Jensen. The firm asked whether the Foundation would be interested in investing in it, perhaps as a minority shareholder. NeuroSearch was a relatively new Danish biotechnology firm that had been established in 1989 by a group of former employees from Ferrosan, which had been taken over by Novo Nordisk the previous year. The company had a private investment share capital of DKK 30 million and about 25 staff. Ferrosan’s head of research and development since 1980, Jørgen Buus Larsen, and Ferrosan’s managing director 1981-1988, Asger Aamund, a majority shareholder with a 10 percent share, were among the founders. The two were now managing director and board chairman, respectively, in NeuroSearch.

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Lundbeck had considered buying Ferrosan in 1988 with a view to the company’s research and development activities, but had refrained. Additionally, in 1989-1990 Lundbeck had laid out a strategy focusing on treatment of diseases of the central nervous system, the CNS area, but even though NeuroSearch was working to develop CNS products, the board of the Lundbeck Foundation concluded that they had no interest in investing in the company.

When NeuroSearch made a new approach in spring 1995 suggesting that Lundbeck should buy a small block of shares in the company, the response of the boards of both the company and the Lundbeck Foundation was again negative.40 NeuroSearch’s proposal was not rejected because the Lundbeck Foundation had no appetite for more acquisitions. On the contrary, at the beginning of September 1993, concurrently with the negotiations with DAKO’s shareholders, the board of the Foundation had discussed a proposal by Sven Dyrløv Madsen to trim the annual grants in order to build up “a readiness to expand its business activities if required”. The board agreed in principle that a “substantial” reduction of the annual grants should be a goal, but also that this could not take place “immediately”.41

Strengthened international portfolio management Some years were to pass before the Lundbeck Foundation once more expanded its business activities by acquiring companies. However, in summer 1994, like Lundbeck the previous year, the Foundation invested USD 2 million in the American mutual fund, Cross Atlantic Partners, CAP, which invested in shares in American biotechnology companies. It was not primarily the expectation of a high yield that prompted the investment, as the board of the Foundation42 was more interested in the opportunity of supporting the Lundbeck company in acquiring information and making contact with interesting companies within its research areas.

Both the Foundation and the company were quickly “extremely satisfied” with the research and business contacts obtained through CAP, and the investment produced a satisfactory yield. This satisfaction was not least due to

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Lundbeck’s contact, through CAP, with the American pharmaceutical enterprise Forest Laboratories. This company not only undertook to obtain an otherwise unsuccessful approval of Cipramil in the USA; it also became a strategic partner for Lundbeck in the company’s own endeavour to enter the American CNS market. The Foundation and the company did not, however, invest in CAP II, but did so subsequently in CAP III. The investments in CAP I and CAP III did not only have the strategic goal for Lundbeck of forming contacts with American biotechnology enterprises; they were also part of the Lundbeck Foundation’s active portfolio management, which was further strengthened in the middle of the 1990s. In spring 1995 a discussion arose about moving the administration and portfolio management of the Foundation’s foreign shareholdings to a company in London.

The reason was a considerable negative yield on the Foundation’s foreign shares in 1994, which Gudme Raaschou frankly acknowledged was unsatisfactory. The company, however, stated that a significant explanation “was that the share market in Copenhagen was too small for effective management of an international share portfolio” which should instead be managed by a London-based finance company. They specifically recommended Lazard Investors Ltd., a 100 percent owned subsidiary of the internationally recognised Lazard Brothers & Co. Ltd.43 The board agreed to consider the proposal in more detail. The recently appointed chairman, Sven Dyrløv Madsen, and Arne V. Jensen flew to London to visit Lazard Investors Ltd., who gave “a convincing presentation of the finance company, its activities and results”.44 Consequently, at the beginning of September 1995, the board of the Lundbeck Foundation decided to have the English finance company take over the European part of the Foundation’s foreign shares, minus Denmark, while the rest of the foreign securities were placed in foreign investment funds.45 It was also decided that the securities portfolio should in future consist of 60 percent Danish bonds, 20 percent Danish shares and 20 percent foreign shares. Gudme Raaschou would continue to be in charge of the general management, coordination and reporting concerning the portfolio as well as undertaking investments apart from the European shares. The new organisa-

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tion of the portfolio management, including the agreement with Lazard Investors Ltd., lasted until the end of the 1990s when the area was reorganised as part of a major restructuring of the whole of the Lundbeck Group’s organisation and structure.46

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T H E L U N D B E C K F O U N D AT I O N

U

p to the time that Chr. Hansen’s Laboratory was purchased, research of relevance for Lundbeck had taken precedence in the Lundbeck Foundation’s grants policy. This was now changed, and

Chr. Hansen was accorded equal priority with Lundbeck. The change was formulated as follows in the 1989 annual report:1 With respect to fields of study, the scientific disciplines that H. Lundbeck A/S and Chr. Hansen’s Laboratory A/S would like to see flourish have received first priority, although this has not excluded other qualified research from being supported.

In the middle of March 1990, when the board established the framework for the year’s grants of DKK 25 million, it was also anticipated that more applications than before would be submitted for “special research projects within the Lundbeck Group and now the CHL Group also”, although no estimate was made.2 In the end, the total amount granted in 1990 took another jump – far beyond the framework that had been fixed – to a total of DKK 32,325,258, and only a modest share of less than DKK 1 million went to non-scientific purposes. All donations were published in the Lundbeck Foundation’s Annual Report, including the internal grants to both Lundbeck and the Chr. Hansen Group, with a statement of each amount, its recipient and the title of the project.3 A total of DKK 10.4 million was donated to internal Lundbeck research – or “special purposes in the Group”, as it was called in the internal accounts.

DKK 2.6 million was granted to head of department Jørn Arnt, dr. pharm., for a three-year project on “a pathological animal model for schizophrenia”, while John Hyttel, dr. scient., also of Lundbeck, together with Dorte Linnemann, dr. med., of the Protein Laboratory at Copenhagen University received DKK 5,660,000 for a three-year project on “comparison between receptor-density, neural proteins and cell reactions in rats with different degrees of reduced learning ability”. DKK 27,000 in support went to Lundbeck Pharma A/S, Lundbeck’s Danish subsidiary, for the scientific part of a Cipramil symposium in connection with the launching of the new drug.4

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A total of DKK 3,392,000 was granted for internal Chr. Hansen research. Of this, Head of Department Egon Bech Hansen, lic. techn., received DKK 1.16 million for a project on “The genetics of lactic acid bacteria”, while the head of research in ALK, Henning Løwenstein, dr. med., received DKK 2,232,000 for a project on “Allergen splicing”.5 A considerable share of the other grants for scientific purposes was given to other projects connected with the CNS area, and in this respect projects that were relevant to Lundbeck’s areas of focus were still at the forefront.

Undoubtedly, one of the main reasons was that the entire CNS research environment was familiar with the Lundbeck Foundation and its possibilities, while it was new to research environments related to Chr. Hansen’s and ALK’s areas.

The Lundbeck name was also in the foreground in connection with eight Lundbeck stipends granted by Grete and Hans Lundbeck’s Bequest, one of DKK 300,000 for medical research in Lundbeck. The Scandinavian Society for Psychopharmacology also received DKK 250,000 to award Lundbeck stipends. Attempts to establish a Lundbeck professorship were finally successful in spring 1990 when the Foundation received an application from the Medical Faculty at Copenhagen University for the establishment of a Lundbeck Foundation professorship in molecular biology. The faculty wanted to appoint Associate Professor Hans Sjöström, dr. med., to the professorship for a provisional period of five years at a cost of DKK 400,000 a year, a total of DKK 2 million, which was granted.6 Later in the year negotiations were conducted with the Medical Faculty at Aarhus University to establish a Lundbeck professorship for Jens Zimmer Rasmussen, Reader, dr. med., whose research had been supported by the Lundbeck Foundation in 1988 with a donation of DKK 3 million. However, the negotiations did not lead to anything as the University would not accept that the Lundbeck Foundation could have a say about who among the applicants considered qualified by an impartial evaluation committee should have the professorship. On the other hand, two three-year positions as Associate Professor in research were granted: one to Dorte Linnemann, dr. med., of Copenhagen University’s Protein Laboratory, and one to Peter Lind, dr. scient., of the Royal Danish Veterinary and Agricultural University.7

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Parity between Lundbeck and Chr. Hansen?

In spite of the fundamental objective of promoting research related to both Lundbeck’s and Chr. Hansen Holding’s areas of interest, grants connected to Lundbeck’s interests dominated. Furthermore, Lundbeck received the lion’s share of the internal grants. However, it was far from certain that this would continue to be the case. Had the negotiations with DAKO ended successfully, the Lundbeck Foundation would suddenly have become, if not legally then morally obliged also to grant financial support to this company’s scientific areas of interest, if the new strategy following the takeover of Chr. Hansen Holding were to be carried on and also included DAKO. All other things being equal, this could have considerably thinned out the Foundation’s support for Lundbeck-related research.

It was presumably this perspective that caused the two employee representatives on the board of the Lundbeck Foundation to dig their heels in when negotiations with DAKO entered a crucial phase. At the board meeting on October 10 1991, Torben Nielsen and Jeanette Lassen, head of production and laboratory assistant, respectively, in Lundbeck stated that they could not support the proposed compromise that was on the table and about which a decision had to be made. They would have to oppose further strategic investments “as a matter of principle” as long as the board of the Foundation did not clearly separate the Foundation’s strategic investments from its grants policy.

They pointed out that “as a matter of principle”, the Foundation gave equal status to Lundbeck and Chr. Hansen in its grants policy, and that the takeover of the latter was thus not only an investment with a view to increased earnings that could be used for Lundbeck-related research. In general, the two of them would like to see long-term plans drawn up for investments in companies, including an assessment of any later need to buy shares because of capital increases in the Foundation’s companies. The issue was relevant as preparations were under way for an expansion of the share capital in Chr. Hansen with the issue of a nominal DKK 2,251,100 class A shares, of which the Lundbeck Foundation subscribed for a nominal DKK 2,199,200 in exchange for DKK 66.8 million.8 The DAKO shares were not purchased, but the problem pointed out by the two employee representatives was nevertheless pivotal. On the one hand, it

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had to do with the role of the Lundbeck Foundation as an active investor and as a responsible owner of enterprises with everything that entailed, including capital increases, research support etc. On the other hand, it was about the Lundbeck Foundation’s historical and trust-deed-based connection with Lundbeck, and in this connection not least the grants policy, which in the opinion of the two “did not pay sufficient regard to the interests of the Lundbeck Group”.9 The failed plans regarding BIODAN could be seen as the expression of an intention to create a more or less integrated Danish biotechnology complex around Lundbeck, Chr. Hansen, ALK and DAKO, all of which were research-based and would therefore be natural for the Foundation to support through its grants policy.

The other board members fully acknowledged the problem and its importance. Even though the majority approved the compromise proposal concerning investment in DAKO against the votes of the two employee representatives, the Henrik Hertz dr.med. (born 1934) was a Member of the Board of Trustees of the Lundbeck Foundation from 1993 to 2002. He was the first head of research in the Foundation between

board was in full agreement that this question should be discussed at a later point in time. Ownership of Chr. Hansen also meant that the problem would not disappear, even though the engagement in DAKO and thus the whole BIODAN construction collapsed at the end of 1991.10

2002 and 2004 after having served as

The “useful effect” of Foundation support

medical consultant since 1988. He

As Torben Nielsen and Jeanette Lassen had pointed out, it was a question of

was also a Member of the Board of

the distribution of the annual grants and especially of the division between

Lundbeck 1992-2001.

Lundbeck and Chr. Hansen, including ALK. However, it was also the case that the use of the resources of the Foundation to buy more companies as well as to increase capital in the existing companies – all other things being equal – would inevitably lead to a decrease in the annual grants. It could be added that financial support from the Lundbeck Foundation for research in Chr. Hansen and ALK would also benefit the other shareholders in Chr. Hansen Holding – a theme that is, however, not recorded in the board minutes.

Already at the next meeting after Torben Nielsen and Jeanette Lassen had raised the question, Niels Harboe presented a proposal for a new arrange-

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ment for research support for the Lundbeck Foundation’s two companies.

The idea was that internally in both Lundbeck and Chr. Hansen Holding annual sums agreed on should be allocated for research purposes, and that a group should distribute this money for each company. The groups were to consist of persons from the company in question and from the board of the Lundbeck Foundation. In the case of Lundbeck, the sums were to replace dividends for the Foundation, and in the case of Chr. Hansen Holding represent compensation for unintended interest-rate advantages in connection with capital increase.

This was as such financial support from the Lundbeck Foundation, which waived an income, which the two companies would instead be allowed to make use of following negotiation and a more detailed agreement. There was positive interest on the board of the Foundation, but both Arne V. Jensen and Sven Dyrløv Madsen wanted the proposal to be discussed by the boards of the two companies. It would seem that the proposal was ‘buried’ at this stage; at any rate it was not taken up by the board of the Foundation again.11 In spring 1992 a broader debate more on matters of principle took place when the last year’s grants amounting to DKK 26.5 were being reviewed. It was agreed that there was a general need to determine a strategy for the grants policy, and that the question should be taken up separately at a later meeting. For this purpose, the executive management of Lundbeck was asked to draw up an account of the benefits that previous grants had brought the firm, and to identify the research projects and research groups the Foundation should support in the future. Chr. Hansen Holding did not receive the same request.12 Lundbeck’s Director of Research, Eva Steiness, presented the requested report at the board meeting on September 4 1992, and she stressed that all neurological, neurobiological, psychiatric and related research was “in principle” relevant for the company. Since 1989, the Foundation had supported such research “to a wide extent”, which the company had reason to be satisfied with. In particular, this support had been granted to long-term projects and associated methodological development that was more in the nature of basic research which Lundbeck itself had not been able to carry out due to the necessary prioritisation of product development.13

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The company had the greatest direct benefit from research that was conducted either internally in Lundbeck or in collaboration with external research environments. The benefits consisted of fresh knowledge, even though long-term projects were “commercially uncertain”, but also of recruitment opportunities and the possible enhancement of the research standard of the staff. In general it was “desirable” that all Lundbeck’s research departments conducted long-term projects.14 The issue of the Foundation’s grants policy was then placed on the agenda for the following board meeting with a view to a definitive clarification. The direction that would be taken was, however, clear from the board’s simultaneous decisions on a number of applications for grants for Lundbeck-related research. In this respect, the chairman was authorised to come to an agreement with Lundbeck’s executive management on the degree to which the company itself wished to finance the applications. This was motivated by “the Foundation’s wish to considerably reduce its grants” in order to be in a position to increase its investment activity.15

Dividend years and grant years The issue of the value of the Foundation’s grants to Lundbeck had previously been on the board’s agenda on May 22 1991 in the form of a briefing by Eva Steiness on collaboration with external research groups. The reason it was on the agenda again, this time as part of a more exhaustive discussion, was that it was an element in the overall discussion of the connection between investment strategy and grants policy. It was equally a discussion that had arisen concerning Lundbeck’s prospective payments of dividends.

The Lundbeck Foundation had not received dividends from Lundbeck since 1987, but the introduction of Cipramil and the company’s rapidly growing turnover and significantly better earning capacity led to deliberations in the board of the Foundation as to whether the time had come when it would once more be “natural” for Lundbeck to pay out dividends. This was “however, not expedient” from the point of view of tax. Instead, it would be more advantageous for the Lundbeck Group as a whole for Lundbeck to spend an amount corresponding to the dividends plus the VAT and tax savings on both internal and external, long-term Lundbeck projects.16

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However, at the board meeting on September 1992 Lundbeck’s managing director, Erik Sprunk-Jansen, opposed such a scheme as it was “for psychological reasons among others ... unsatisfactory for Lundbeck not to pay out dividends”.17 This question also came up at the next meeting of the board on December 4 1992, but from a new and different angle. It was now clear that the company should pay out dividends, but Lundbeck’s company auditor had previously suggested that the Lundbeck Foundation should begin operating with dividend years and tax years in order to benefit from the legal possibilities of taking full advantage of both tax-free dividends from Lundbeck and tax deductions for the grants. This could be done in principle by receiving a “double” dividend from Lundbeck every second year and no dividends in the intervening years. In these years, on the other hand, fully tax-deductible grants could be made.18 The board agreed to continue working on the proposal, and two committees were formed to draw up a basis for the more detailed composition of the Foundation’s grants policy. One was a scientific committee that was to make proposals for new guidelines for the Foundation’s donations, including which “well-defined areas” in the field of medical science and other research the Foundation should support in the future. Its members were Niels Harboe, Nils Axelsen and Arne V. Jensen from the Foundation, and Eva Steiness from Lundbeck. The second was a tax committee that was charged with investigating tax matters and uncovering the taxation implications of operating with grant and dividend years. Its members were Niels Harboe, Torben Grandt and the state-authorised accountant Søren Bjerre-Nielsen, who had presented the proposal.19 At the suggestion of the tax committee, a unanimous decision was reached at the board meeting on April 2 1993 – that there would in principle be a distinction between dividend and grant years with effect from January 1 1994. Thus, 1993 would be a year without dividends from Lundbeck, but in 1994 the Foundation could expect dividends “of a considerable amount” stemming from 1992 and especially 1993 – and so on. Accordingly, it had now been established that Lundbeck was to pay out dividends in the future. It was decided to postpone discussion of the rest of the Foundation’s grants policy and finalise it after the summer holiday.20

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Standing committees and new guidelines for grants When the Board of the Foundation met on September 7 1993, at the suggestion of the new chairman, Torben Grandt, the meeting began with the appointment of a number of permanent committees for grants policy, research support, the P.V. Petersen Prize, prize papers, investments and seminars. The first three committees focused on the Foundation’s grants: the Grants Policy Committee was concerned with the size and distribution of the grants, while the Research Support Committee reviewed the applications and made recommendations to the board. The P.V. Petersen Prize Committee found candidates and made recommendations on awarding the prize.21 This was the first time the Foundation had appointed a committee to evaluate applications and make recommendations. It is not clear how this had been managed previously, but apparently the chairman had dealt with this in cooperaNils Axelsen, chief physician, dr.med. (born 1942), chairman of the Foundation for the Grete Lundbeck European Brain Research Prize and a Member

tion with the researchers on the board. There had been no external assessment apart from the cases where the chairman had consulted individuals in research institutions.

The Research Support Committee consisted of Henrik Hertz (chairman),

of the Board of Trustees of the Lund-

Nils Axelsen and Erling Juhl Nielsen, and the same three also formed the P.V.

beck Foundation in 1987-2011. He

Petersen Prize Committee, with Nils Axelsen in the chair, and Eva Steiness

was the driving force behind the

was to be consulted in connection with Lundbeck. For the next many years,

Lundbeck Foundation’s decision to

the internal research committee was in charge of examining the applications

establish the Brain Prize, the world’s

and making recommendations. While the individuals were replaced regu-

biggest prize for brain research, which was first awarded in 2011.

larly with changes in the composition of the board, Nils Axelsen and Henrik Hertz were constant members.

The Grants Committee had already met prior to the September meeting, and on its recommendation, the margin of expenditure for the coming years’ grants was determined. As of 1994, it was limited to DKK 15 million after the “substantial” grants of recent years. Sven Dyrløv Madsen expressed a wish for a further limit of DKK 12-13 million to allow the Foundation to build up “funds to be able to expand its business activities, if required”. While the other mem-

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bers of the board agreed with the intention, they emphasised that this could not take place immediately, and the framework was accordingly fixed.22 The question was now within which scientific and other fields the Foundation should award the DKK 15 million. At its meeting on December 4 1992, the board of the Foundation had decided that in the future Lundbeck, Chr. Hansen and ALK should finance their own long-term internal research. In other words, the days of top-down support for the individual companies’ internal research were over, in spite of Eva Steiness’ emphasis on its importance at the board’s previous meeting. In this respect the companies now had equal status.23 On the other hand, this was not the case when it came to the new policy guidelines. In December 1992, the board had already discussed dividing the support into three categories. Against this background, at the meeting on December 16 1993 the committee presented a proposal for guidelines for the grants of the Lundbeck Foundation based on a 5+5+5-model, which a unanimous board carried:24 Category 1: Financial obligations and recurring grants, approximately DKK 5 million Category 2: Significant, multi-annual medical research projects, approximately DKK 5 million Category 3: Other purposes worthy of support, approximately DKK 5 million, distributed as follows: Other medical objectives, approximately DKK 3 million Other scientific objectives, approximately DKK 1 million Other objectives, approximately DKK 1 million

It was also determined with respect to grants for medical research that25 the board of the Foundation accords special priority to researchers or research groups in Denmark whose fields of study lie within the neurosciences as well as other projects of a high international standard.

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This means that it was also determined that it was only, or at any rate quite predominantly, research related to Lundbeck’s research and product areas that was in focus, although no direct mention was made of the company. This was also fully in agreement with the Lundbeck Foundation’s trust deed, which made it clear that the objective of the Foundation was “to secure and develop the activity of the Lundbeck Group as determined by the board of the Foundation”.

The same chairman for Lundbeck and the Lundbeck Foundation?

The whole discussion about the grants policy and the final guidelines had in general established that there was a special organic relationship between the Lundbeck Foundation and Lundbeck, while Chr. Hansen, including ALK, was ‘only’ a strategic investment. It appears from the discussions in the context of the formation of the board and the election of a new chairman when Torben Grandt retired on grounds of age on June 1 1995, that Lundbeck was of the opinion and wished to make it clear that the Lundbeck Foundation and Lundbeck constituted one group, which owned the Chr. Hansen group.26 As chairman of Lundbeck A/S, Arne V. Jensen stated that it was “known to the Board of the Foundation” that wishes had been expressed in the company concerning convergence in the chairmanship of the Lundbeck Foundation and Lundbeck, and he therefore requested a discussion of the board’s position in principle on such convergence. He himself considered a joint chairmanship “the most desirable to avoid any situation of conflict between Foundation and company”. He added, however, that in his capacity as chairman of the company he was a candidate for the position of chairman “for reasons of principle only”, and only in the event that the board of the Foundation was in favour of such convergence.27 Opinion was divided. While the two employee representatives from Lundbeck, Torben Nielsen and Jeanette Lassen, supported Arne V. Jensen’s view, Henrik Hertz, dr. med., did not. In his opinion, this would be “inappropriate” because in a situation where the Foundation was dissatisfied with the management of the company, it would be difficult to criticise. Nils Axelsen, chief physician, dr. med., was also against any such convergence of persons, since the Foundation “needed to demonstrate its ownership vis-à-vis Lundbeck”.28

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In general, the discussion showed that there was no majority in the board for a convergence of persons in the company and the Foundation, and against that background Arne V. Jensen declared that he was no longer a candidate for the position.

Sven Dyrløv Madsen was then elected as the new chairman and Arne V. Jensen was re-elected as deputy chairman.

With Sven Dyrløv Madsen’s position as Chairman of Chr. Hansen Holding since 1991 – and simultaneously as a Member of the Board of Lundbeck – the new formation appears to have established a balance of power on the board of the Foundation. The objective was that the Foundation – despite its close links with Lundbeck – would be in a position to demonstrate its ownership vis-à-vis Lundbeck, as Nils Axelsen had expressed it, at the same time as demonstrating Chr. Hansen’s importance and position.

Professor Povl Krogsgaard-Larsen (b. 1941), School of Pharmaceutical Sciences, was awarded the P.V. Petersen Prize in 1989 for his 20 years of pioneering work on discovering substances that inhibit or activate cer-

The Lundbeck Foundation’s hitherto largest grant

tain receptors in the brain. Two years

In the context of the discussion about the new guidelines for the Founda-

previously, he had received a research

tion’s grants, the board decided that the financial framework for 1993 should

grant of DKK 2 million from the Foun-

be approximately DKK 15-20 million, but it was considerably higher: almost DKK 38.5 million. This was because of a quite exceptional grant of DKK 25.5 million for a multi-disciplinary and inter-institutional research programme carried out by six groups of researchers at the Panum Institute and Den-

dation, and in 1993 he received yet another donation of DKK 25.5 million, the largest single grant made by the Lundbeck Foundation up to then. Povl Krogsgaard-Larsen has been a Mem-

mark’s School of Pharmaceutical Sciences under the leadership of Professor

ber of the Board of Trustees of the

Povl Krogsgaard-Larsen, dr. pharm. In 1971, Professor Krogsgaard-Larsen

Lundbeck Foundation since 2011 and

had established a medical chemistry group at the School of Pharmaceutical

since 2013 Chairman of the Founda-

Sciences, since when he had received substantial funds for his research from

tion for the Grete Lundbeck Brain Re-

the Lundbeck Foundation and had also been awarded the P.V. Petersen Prize

search Prize.

in 1989.

At the end of 1992, Povl Krogsgaard-Larsen’s group had applied to the Danish National Research Foundation for the sum in question for a five-year research programme entitled “Neuro-medicinal chemistry. Molecular design, specificity and recognition”. Both he and the Board of the Lundbeck Foundation were apparently convinced that the Danish National Research Foundation would grant the money. As he had simultaneously applied to the Lundbeck Foundation for DKK 2.5 million for a four-year research project

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that included a postgraduate fellowship and two senior fellowships, it had been decided to grant provisional support “until the grant from the Danish National Research Foundation comes through”.29 However, a grant from the National Research Foundation was not forthcoming, and as soon as Niels Harboe learned of the decision he contacted Povl Krogsgaard-Larsen for a copy of the application. This was then sent to the board of the Lundbeck Foundation and discussed at a meeting on June 4 1993. According to Niels Harboe, “the whole Krogsgaard-Larsen group were probably the most important group of researchers for H Lundbeck A/S”, and Eva Steiness, who was informed, had also said she was willing to take part in the further deliberations concerning the Lundbeck Foundation’s possible financing of the project.30 The research programme was the result of and part of a neuro- and molecular biological revolution, and in the words of Povl Krogsgaard-Larsen himself, its key element was “exploring the structure and function of neuroreceptors that are at the root of their recognition and activation of small molecules”. The intention was that in a joint project the six groups of researchers wished to “translate biological problems into a chemistry language “ with the objective of constructing molecules with a specific effect on an unbalanced biological system. In the words of Povl Krogsgaard-Larsen again: “The research group wishes to create a basis for and contribute to the design of new pharmaceuticals on a rational basis.”31 This was basic research but with a practical, functional goal, both pharmacologically and medically aimed at the development of new pharmaceuticals in the CNS area. In other words, it was a research programme which was absolutely central to Lundbeck’s area of interest, after the company had moved into neurological and molecular research at the beginning of the 1990s. DKK 25.5 million evenly divided over five years between January 1 1994 and December 31 1998 was therefore granted at the Lundbeck Foundation’s board meeting on September 7 1993.

Grants in the second half of the 1990s The grant to Povl Krogsgaard-Larsen’s research programme was by far the biggest donation ever awarded by the Foundation, and many years were to pass before single donations of the same magnitude were again made. In

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1993 there were two more grants exceeding DKK 1 million: DKK 1.2 million over two years for research in nursing and travelling scholarships for nurses. From January 1 1994, the Foundation transferred the administration of this area to the newly formed Universitetshospitalernes Center for Sygeplejeforskning, UCSF (the University Hospitals’ Centre for Nursing Research, UCSF). Approximately SEK 1.3 million was, furthermore, granted to a two-year microbiological research project on “Study of phospholipids induced by tricyclic antidepressants in human lymphocytes. The significance for the effects on cellular functions”. The grantee was Dr. Lennart Nässberger, Professor of Medicinal Microbiology at the University Hospital in Lund.32 However, then the new policy of limiting the annual margin of expenditure took effect. In 1994, a total sum of only DKK 2.2 million was granted – in all likelihood a consequence of the exceptional grant to Povl Krogsgaard-Larsen the previous year– and the only donation mentioned in the annual report is support for the publication of art historian Hans-Edvard Nørregård-Nielsen’s book on København og den danske Guldalder (Copenhagen and the Danish Golden Age). There was also, of course, the Lundbeck Foundation’s Research Prize, as the P.V. Petersen Prize was called from 1993 on, which was awarded to chief physician Niels A. Lassen, dr. med.33 In 1995, the Lundbeck Foundation’s Research Prize went to the Swedish professor and later Nobel laureate in 2000 Arvid Carlsson, who had not only been of great importance for Lundbeck’s development but also for pharmacology as a whole. All in all, this year the Foundation filled out the annual margin of expenditure that had been set with grants amounting to just over DKK 14 million, but there were no larger grants despite the declared prioritisation of such, preferably including multi-annual research projects. The exception was a DKK 2 million donation to a nation-wide information and health campaign in the planned Heart Year of 1997. Otherwise, no grants of more than a million were made. In 1996 a total of approximately DKK 10 million was granted, DKK 1.125 million of this to a three-year project on “Cerebral late complications of radiotherapy and chemotherapy in childhood years” conducted by head of department Jørn Müller, dr. med., Department of Growth and Reproduction at Copenhagen City Hospital. There were also smaller grants.34

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In 1997 just over DKK 15 million was granted, including DKK 3.9 million to a Lundbeck Foundation Research Professorship in molecular genetics at the University of Copenhagen following an application by the University’s rector, Kjeld Møllgård. In March 1999, the professorship was filled by Niels A. Jensen, Associate Research Professor at Aarhus University. DKK 2.74 million was granted to Professor Olaf B. Paulsen, dr. med., of Copenhagen City Hospital’s Neurocenter for a project on “the serotonergic transmitter system”.

DKK 1.2 million over three years was donated for a three-year assistant professor project on “the serotonin transporter” to Ove Wiborg, Assistant Professor, lic. scient., of the Department of Molecular and Structural Biology and the Department of Chemistry at Aarhus University.

The Danish Medical Association received the usual DKK 400,000 from the Lundbeck Foundation’s Bequest to support research by general practitioners, and the Scandinavian Society for Psychopharmacology once more received DKK 250,000 for awarding the Lundbeck Foundation’s stipends in 1997 and 1998.35 In 1998, the margin of expenditure was expanded by DKK 5 million to DKK 20 million. This had been proposed by Henrik Hertz, who had experienced that “researchers were of the opinion that to an increasing extent the Lundbeck Foundation seemingly was allocating its funds to research with relation to the activities in H. Lundbeck A/S”. In his view, it could perhaps “better serve Lundbeck’s interests” if the Foundation “to a somewhat higher degree” considered a broader target group. As this should not adversely affect the size of support for neurobiological research, an expansion of the margin of expenditure would be “desirable”.36 The expanded framework was distributed as follows: DKK 5 million for scientific research, DKK 5 million for large-scale, multi-annual research projects, DKK 5 million targeted at neurobiological research, and DKK 5 million for other scientific projects. To this was added DKK 5 million to cover financial obligations that had previously been decided, and recurring annual grants.37 DKK 6 million of the approximately DKK 20 million granted in 1998 went to a three-year continuation of Povl Krogsgaard-Larsen’s research programme on “Neuro-medicinal chemistry. Molecular design, specificity and recognition”. The continuation was a more focused and integrated neu-

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ro-medicinal chemistry project conducted by three research groups in the areas of ligand design and synthesis, computer chemistry and X-ray crystallography. In addition to this, grants of around DKK one million were made for CNS-related and other medical research projects, as well as smaller grants, for example in support of the Danish Natural Sciences Festival 1998 and the Second Danish International Chemistry Olympiad in Denmark in 2000.38 In 1999, the margin of expenditure was also DKK 20 million.

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CHAPTER 6

STOCK EXCHANGE LISTING OF LUNDBECK

T H E L U N D B E C K F O U N D AT I O N

A

part from 1994, grants up through the 1990s were evenly divided in spite of the scheme of ‘dividend years’ and ‘grant years’ because provisions for grants the following year were deductible in line

with the actual grants of the year. On the other hand, Lundbeck only paid out dividends every second year and, furthermore, relatively small dividends, partly in order to finance the rapid growth and expansion driven by Lundbeck’s antidepressant, Cipramil, which sold very well, and partly to fund its research and development, not least the registration and introduction of the new antipsychotic, Serdolect. From 1993 to 1996, Lundbeck paid out an annual average DKK 11 million in dividends corresponding to a payout ratio of 3-4 percent. This stopped in 1997 because in the opinion of the Board of the Lundbeck Foundation, a payout ratio of 10-11 percent was more reasonable.

Accordingly, for the year 1997 Lundbeck paid out a dividend of DKK 35 million and DKK 40 million for 1998.

The reason for the new policy on paying out dividends was that at the end of 1997, and after a long run-up, the Lundbeck Foundation and Lundbeck were heading for an initial public offering (IPO) of the company in the autumn or at the end of 1998. When Lundbeck’s board was formally informed of this on February 2 1998, it was with the comment that “a stock exchange listing would probably require higher dividends to be paid out in future”. The same tone was struck on the Board of the Lundbeck Foundation later in the month: “In the years to come, and especially after a flotation, Lundbeck must be prepared to pay out a significantly higher dividend.”1

Steering towards stock exchange listing It is not clear when expanding the company’s share capital by means of stock exchange listing was first discussed in the managements of Lundbeck and the Lundbeck Foundation, but the company’s management would seem to have had ambitions in this direction at an early stage. After Erik Sprunk-Jansen became managing director in 1987 and the first annual report had been issued, the objective was to draw up the accounts according to the principles that applied to listed companies, even though this was not necessary.2 In 1993, Lundbeck received the newspaper Børsen’s Accounting Prize for its 1992 annual report in recognition of its high quality and level of information.

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Erik Sprunk-Jansen (born 1937), was CEO in Lundbeck from 1987 to 2003.

He is a chemical engineer, from 1962

The first time a possible stock exchange listing was mentioned in the minutes of the two boards was in the Lundbeck Foundation on December 4 1992. Arne

to 1972, he was director of the Silicon

V. Jensen reported the deliberations in Lundbeck concerning profit sharing,

factory at the firm of Haldor Topsøe,

possibly in the form of a bond scheme, later a share scheme, “if or when H.

and from 1973, CEO at Greenex A/S,

Lundbeck is listed on the stock exchange at a later date”. While this was prob-

before he was invited to join Lund-

ably a hypothetical statement, it nevertheless documents the fact that the

beck. He headed Lundbeck’s develop-

subject was discussed and was under consideration by the management of

ment from a stagnating, regional me-

Lundbeck.3

dicinal firm to a growth-focused and globally oriented pharmaceutical conglomerate. He also worked towards the stock market listing of the company from an early stage.

It became more specific and targeted at the board meeting on March 17 1995, when Arne V. Jensen stated that “in preparation for possible stock exchange listing at a later date – the introduction of two classes of shares (A and B) in the company was being considered”. A construction with A and B shares – as in Chr. Hansen – could enable the Foundation to retain full control of Lundbeck despite the injection of share capital from the outside and irrespective of the scope of this, depending on the distribution of votes between the two classes of shares. It is unclear who more specifically was deliberating, but the rest of the board concurred and work on the issue continued.4

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Nothing more seems to have happened – at any rate the topic was not on the boards’ agendas for the next two and a half years, but it reappeared in the Lundbeck Foundation on September 8 1997. It was the chairman of the Foundation, Sven Dyrløv Madsen, who raised the issue, following discussions with the deputy chairman, and board chairman in Lundbeck, Arne V. Jensen, referring to developments in the pharmaceutical industry, where competition was becoming increasingly keen and mergers and acquisitions were taking place widely across national borders.

Neither Lundbeck nor the Lundbeck Foundation had thought along these lines, but there had been interest abroad in the company’s growth and progress in recent years. Both the company and the Foundation had received many enquiries about mergers, alliances and stock exchange listing etc., and four or five “quite separate, well-renowned foreign investment banks” had suggested stock exchange listing in Copenhagen and abroad in a such a manner that the Lundbeck Foundation would retain a very large majority.5 Lundbeck had been very successful in its focus on pharmaceuticals to treat diseases of the central nervous system, the CNS area, while all other business areas had been sold off, but as Sven Dyrløv Madsen pointed out:6 Even though H. Lundbeck A/S has several interesting products in the pipeline, the company could also be vulnerable if a major research project had to be abandoned at the same time as the patent for a main product was about to expire and the product would thus face generic competition.

Sven Dyrløv Madsen was not referring to a hypothetical situation with no relation to reality. The patents and rights to Lundbeck’s top product, Cipramil, would begin to expire in the first countries in 2002. At the same time, the new antipsychotic, Serdolect, had run into grave problems in achieving approval in Europe and especially in the USA, and registration had also been delayed in Japan.

Neither the company nor the Foundation was short of capital. However, in the opinion of Sven Dyrløv Madsen and Arne V. Jensen it would be desirable to be ready, for example, to acquire an interesting company quickly or to launch a research project that required a large amount of capital. The rest of

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STOCK EXCHANGE LISTING OF LUNDBECK

the board agreed, and a separate strategy committee was charged with drawing up a memorandum on the issue.7 On the basis of the committee’s memorandum and a memorandum from Gudme Raaschou, both boards discussed the question once more in December 1997 in connection with deliberations concerning Lundbeck’s strategy in the USA and Germany. A stock exchange listing with an increase in the share capital where the Lundbeck Foundation retained 85 percent of the shares would provide Lundbeck with an estimated DKK 1-1.5 billion. This would initiate the setting-up of the company in the USA where the company itself handled the registration and approval. Similarly, an independent Lundbeck company could be established in Germany. Prospectively, this meant a significant boost to the whole company, and both boards agreed to prepare the implementation of an IPO at a favourable point in time. The listing would probably only take place in Copenhagen, but the aim was to attract American investors. The plan was to sell or issue new shares corresponding to about 20 percent of the value of the company, and the distribution of the proceeds between the Lundbeck Foundation and the company would primarily depend on the company’s need for capital.8 The direction was clear, and at the beginning of 1998 it was decided to implement a stock exchange listing in the course of the year, probably after the summer holiday. A bank consortium consisting of Gudme Raaschou, Danske Bank and Goldman Sachs International was established in connection with the decision.9

Setback after setback – and a ray of hope What was crucial to the outcome of the stock exchange listing was not Cipramil’s current success, but the company’s product pipeline. Precisely when the preparations for the listing began, the pipeline began to crack, so what Sven Dyrløv Madsen had warned against was happening – and was actually far worse. The difficulties with Serdolect, and not least the fact that the American business partner, the pharmaceutical company Abbot, had given up trying to have the product approved in the USA, weakened the basis for a stock exchange listing, and the beginning of 1998 also saw the end of the collaboration with the pharmaceutical firm Shionogi, who were dealing with approval in Japan.

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The antidepressive Cipramil is without doubt Lundbeck’s most important product ever, as it formed the basis of the company’s rapid growth and internationalisation throughout the 1990s. Marketing was launched in 1989, and after a slow start, turnover exploded globally under differ-ent names, including Seropram as in this photograph. The drug was marketed in the USA from 1998 with the name Celexa, and was a very important contributory cause of Lundbeck’s successful flotation in 1999.

At the same time, there were several setbacks in the pipeline. At the beginning of 1998, cooperation with an American company on developing a substance to treat Parkinson’s disease ran into problems because of the toxicology, and Lundbeck terminated the cooperation in March 1998. Yet another grave setback occurred in summer 1998 when a clinical trial with a substance against Alzheimer’s disease clearly showed that the substance had no therapeutic effect and had to be abandoned. The consequence was “a considerable hole in the company’s pipeline”, which did not contain any other candidates against the disease.10 The big setback came in November 1998 when the Dutch authorities unexpectedly suspended the marketing authorisation for Serdolect. A number of European countries, including Spain, Portugal and Italy, quickly followed suit, and in the same month Lundbeck itself chose to withdraw Serdolect from all markets while the suspensions were being dealt with at EU level.11 It was decided to postpone the stock exchange listing. At the same time, however, in the midst of adversity there was a substantial ray of hope when

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Lundbeck’s business partner Forest Laboratories launched the American version of Cipramil, called Celexa, in the USA in autumn 1998. In ten weeks this made Celexa the fastest-growing prescription pharmaceutical ever in the USA.12 Celexa’s success was much-needed positive news for Lundbeck, and simultaneously the drug’s active substance, citalopram, came to play an important role in another way. As a substance, citalopram is a “racemate” consisting of two substances or forms – called enantiomers – which are mirror images of each other. It surprisingly transpired that the active substance only or quite predominantly was in the one enantiomer – the S form – while the R form was inactive. Lundbeck had originally decided not to develop the pure S form, but at the suggestion of Forest Laboratories this decision was changed in autumn 1997. The two then together started to develop the S form under the name of escitalopram for a new drug to be launched in 2002.13 In spring, Lundbeck presented the substance as “a refined pharmaceutical”, offering patients “a unique combination of optimal effect at the lowest dose and less strain on the organism”. The IPO that had been postponed was implemented within a few months.

Valuation close to “the pain threshold” The withdrawal of Serdolect and the thinning-out of Lundbeck’s pipeline left a mark on expectations regarding the imminent IPO, even though the successful launching of Celexa in the USA pulled in the other direction. At the so-called ‘beauty contest’ in October 1998, the average of the banks’ valuations was DKK 15.7 billion, but in February 1999 the bank consortium conducted a new valuation that was contingent on the different possible scenarios for Serdolect. In the most unfavourable circumstances, the value would be in the area of DKK 9-13 billion, which the board of Lundbeck found was “a greater reduction than immediately comprehensible”. It would, however, be “extremely awkward” to cancel the IPO as that would be an “extremely negative signal” to send to both employees and business partners, and therefore it was decided to proceed as planned.14 The valuation had not changed when the bank consortium presented its latest assessment of the company’s value in March 1999. The valuation was based on the fact that to a considerable extent Lundbeck appeared to be a

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“one-product company” with an uncertain future, as no important alliances had been entered as yet, nor was there any significant in-licensing. Furthermore, it was the opinion of Goldman Sachs that investors would not have such a positive assessment of escitalopram as the company had, while on the other hand Celexa had a positive effect, especially among American investors. On this basis, the value of the company was reduced to DKK 10-12 billion before the IPO discount, or about DKK 9-11 billion after the IPO discount.15 Although several board members found the valuation low and that it could very well be close to “the pain threshold”, it was once more decided to proceed. Likewise, the date of the initial public offering was fixed for June, even though Goldman Sachs had suggested that it should be postponed until the autumn.16

Stock exchange listing The members of the bank consortium, however, did not agree with one another, which emerged at a joint meeting of the boards of Lundbeck and the Lundbeck Foundation at the end of May 1999. While Gudme Raaschou and Den Danske Bank wanted to recommend an indicative price interval of DKK 9.5-11.5 billion, Goldman Sachs recommended a price interval of DKK 9-10.5 billion. According to the minutes, the two boards were “somewhat disappointed” about the valuation, but on the other hand they had to admit that the withdrawal of Serdolect had “considerably” reduced the value of the company and that the pipeline was “thin”. Abandoning or postponing the stock exchange listing was, however, rejected once more, among other reasons because, according to the executive management of the company, this would have “very awkward consequences” for the company’s position.17 Meanwhile, the bank consortium, who were meeting in another room at the same time, reached agreement, and they now collectively recommended a price interval of DKK 9-10.5 billion. On that basis, the two boards decided to proceed with the stock exchange listing. New shares were to be issued, giving Lundbeck a yield of DKK 0.5 billion, and the share issue as a whole was to be of such a size that the Lundbeck Foundation would subsequently hold approximately 80 percent of the share capital.18 On June 17 1999, the board of Lundbeck decided to issue 60 million new shares at a nominal value of DKK 20 at market price without pre-emptive

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T H E L U N D B E C K F O U N D AT I O N

rights for the company’s existing shareholders. The subscription took place on the same day at market price 175 with a yield of DKK 525 million, which went to Lundbeck, minus expected costs of approximately DKK 25 million.19 In addition, the Lundbeck Foundation offered shares of a nominal DKK

The cover of the prospectus for the stock exchange listing of Lundbeck in 1999. The Lundbeck Foundation had been the sole owner of the company since 1967, but this now changed.

142 million of its existing holding at DKK 20, also sold at market price 175, as

From then on, the Lundbeck Founda-

the combined offering was subscribed 7.5 times. The issuing banks could of-

tion had to have consideration for the

fer a further nominal DKK 30.3 million shares placed at disposal by the Lund-

other shareholders when handling its

beck Foundation before June 16 to cover any over-allotment of shares. The

majority ownership, among other

total yield of the offering amounted to DKK 1.8 billion, and with the banks’

things, by paying higher dividends.

utilisation of their possible enlargement of the offering, the issue would bring in DKK 2,033 million. DKK 1,508 million went to the Foundation.20 After the issue, the Lundbeck Foundation owned about 80 percent of the share capital. A nominal DKK 10 million would have to be deducted from this, intended for an option scheme for the Lundbeck management, so that the Foundation’s final shareholding was 79.1 percent. The shares that were sold were placed with a number of institutional investors and approximately 11,700 private investors in Denmark. About 70 percent of the shares were placed in the Nordic countries, and about 30 percent with international institutional investors.21 After the many setbacks during the whole process with respect to Serdolect and the other projects that came to nothing, and the downward adjustment of the value of the company, at the end of the day there was agreement that the IPO had been a success. For the Lundbeck Foundation, the issue meant that it had realised a part of its assets that had been tied up in the company, but now could be used for other investments and risk diversification. For Lundbeck, it meant that the company now had an additional DKK 0.5 billion, and it had gained access to a new source of financing through future capital increases, when and if necessary.

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CHAPTER 7

LUNDBECKFOND INVEST, KONTIKI AND A ‘THIRD PILLAR’

T H E L U N D B E C K F O U N D AT I O N

O

nce Lundbeck had been listed on the stock exchange, on November 23 1999 the Board of the Lundbeck Foundation decided to set up a holding company placed between the Foundation and its compa-

nies. The idea was to transfer the Foundation’s shares in Lundbeck and Chr. Hansen Holding as well as part of the Foundation’s cash and other securities to the new company while a “suitable holding” of the securities was to remain in the Lundbeck Foundation. This decision was made on the recommendation of the designated Director of the Foundation, Steen Hemmingsen, whose other positions had included CEO of Sparekassen Sydjylland, Baltica Forsikring and Baltica Holding and CFO in ØK. Steen Hemmingsen was at the disposal of the Lundbeck Foundation from September 1999, and the ba-

sis for his recommendations included accounting and tax calculation models drawn up by the group’s joint firm of auditors, Deloitte & Touche, which showed that establishing such a holding company would be “a clear financial advantage”.1 The scheme would mean that in future the dividends from Lundbeck and Chr. Hansen Holding as well as other shareholdings would be included in the holding company and not in the Lundbeck Foundation, as previously. This would prevent – as in fact stipulated in the prioritisation rule in the legislation on the taxation of foundations – the tax-free dividends from reducing the Foundation’s tax allowance for grants.

Other advantages were that the dividend from the holding company could be freely adapted to the needs of the Foundation, after the stock exchange listing had placed limits on this in the case of Lundbeck. Finally, there was a clear separation of grant and business activities. It was, however, a precondition for the whole construction that it received the approval of the tax authorities, which included a tax-free exchange of the Lundbeck Foundation’s shares in Lundbeck and Chr. Hansen Holding with shares in the holding company.2 Even before the final permission was issued by the tax authorities the holding company was established by acquiring an already-formed limited company that had not conducted business. The nominal share capital of DKK 500,000 was raised by DKK 99.5 million to a nominal DKK 100 million at an extraordinary general meeting on December 8 1999. The amount was subscribed through cash payment from the Lundbeck Foundation at a market

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rate of 900, after which the holding company had assets amounting to DKK 896 million intended for portfolio investments, primarily in shares bought from the Lundbeck Foundation or on the market. During 2000, the Foundation’s shares in Lundbeck and Chr. Hansen Holding were to be transferred to the holding company.3 The board of the new company, which was named LFI A/S (Lundbeckfond Invest A/S), consisted of the board members of the Lundbeck Foundation elected according to the statutes. In the first instance the employee representatives on the Foundation’s board did not become members of the board of LFI A/S, but they followed the board meetings in LFI, as the question of their membership was to be clarified when the shares of the two companies had been transferred. In May 2002, the personnel of Lundbeck and the Chr. Hansen Group decided that they also wished to have formal representation in LFI, and they elected the same representatives as on the board of the Foundation.4 Steen Hemmingsen, who would also become director of the Foundation on January 1 2000, became the director of the new holding company. Like the Lundbeck Foundation, the company’s address was at Ottiliavej 9 in Valby, but when the Foundation bought the property at Vestagervej 17 in Hellerup north of Copenhagen for its new domicile in June 2001, LFI moved in too. The Foundation held its first board meeting at the new address on October 2, 2001.5

The Lundbeck Foundation as an “active investor” The establishment of LFI A/S did not change the fact that the Lundbeck Foundation continued to be an industrial foundation in that its business activities were conducted through the newly established holding company, which owned a number of portfolio shares in addition to its stake in Lundbeck and Chr. Hansen Holding. At the same time, the stock exchange listing of Lundbeck had meant that the Lundbeck Foundation – and thus LFI – in this company too had to pay attention to the interests of the other shareholders. In actual fact, the relationship of the Lundbeck Foundation to Lundbeck and Chr. Hansen Holding had been equalised or made parallel. This was expressed in the 1999 annual report where the Foundation stated that its perception of its role in the two companies was that of an “active investor”.6

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The engagement in Lundbeck and Chr. Hansen Holding was described as “two important, active investments” where the Foundation as “controlling shareholder (is) focused on creating shareholder value for the benefit of all shareholders”. This perspective was further emphasised by the declared objective “that both companies should have a high level of earnings compared with similar companies globally”.7 It was the intention that both companies should continue to be listed, partly to make it possible to obtain capital to expand their activities, and partly to enable the companies to be ranked relative to other companies on the international stock markets. At the same time it was made clear that the Lundbeck Foundation “at present has no plans to resign control in either H. Lundbeck A/S or in Chr. Hansen Holding A/S”, but that it would continue to monitor developments and needs in the two companies “to achieve optimal ownership”.8 The Lundbeck Foundation’s interest in and care for the two companies and its other shareholders was further manifested in a statement that the Foundation would “assess and support” their participation in the ongoing restructuring and consolidation within the pharmaceutical and ingredients industry “with a view to safeguarding the compa-

Steen Hemmingsen (born 1945) was managing director of the Lundbeck Foundation from 2000 to 2011. He came to the Lundbeck Foundation af-

nies’ possibility for further growth and value creation for all shareholders”.

ter holding positions in Baltica

Finally, the Foundation’s engagement also had a national base as the invest-

Forsikring A/S and A/S Det Øst-

ment strategy in Lundbeck and Chr. Hansen Holding “had until now been

asiatiske Kompagni (East Asiatic

able to contribute to the growth of Danish-based pharmaceutical and bio-

Company). The Lundbeck Founda-

technological activity”.9

tion’s investment and grants policy

With respect to the leadership of the two companies, the Foundation “found it extremely important” that the boards were composed in a manner that ensured “a broad field of expertise that benefited the individual company and thereby the shareholders”. Therefore, members were selected ei-

underwent rapid professionalisation under Steen Hemmingsen’s leadership. There was an eightfold increase in the free investment funds and a 17fold growth in the grants. In addition,

ther on grounds of their “distinguished business experience or because of

he was the architect behind the ac-

their health- or research-related insight”. In both boards of six persons, half

quisition of Falck A/S in 2011. Follow-

of them were also members of the board of the Lundbeck Foundation, while

ing his retirement, Steen Hem-

the other members had no association with the Foundation.

mingsen is now associated with the

10

Lundbeck Foundation as an adviser.

119

KAPITEL 1

When Lundbeck was listed in 1999, it was considered appropriate to move the Lundbeck Foundation’s domicile

The Lundbeck Foundation’s role as an active investor and the strong emphasis on its engagement in both companies as well as its declared consideration

from Lundbeck’s premises in Valby, at

for all shareholders did not, however, mean that the historically based, al-

the same time as the increasing ad-

most organic relationship between the Foundation and Lundbeck has been

ministration involved in investment

broken. In the preamble to the trust deed it was still stated that the purpose

and grants activity required more

of the Foundation was “to safeguard and develop the activity of the Lund-

space. In 2001, the Lundbeck Founda-

beck Group as determined by the board of the Foundation”.11

tion therefore moved to Vestagervej 17 in Hellerup north of Copenhagen, where its domicile was situated until 2013.

Taking this at face value, the Lundbeck Foundation existed for the sake of Lundbeck; at any rate, the Foundation had a special responsibility for the wellbeing of Lundbeck. On the other hand, the engagement in Chr. Hansen Holding was an active investment based on the trust deed giving the board of the Foundation “a free hand to decide the businesses in which the Foundation should invest”.12 In its role as “active investor” and “controlling shareholder” in both Lundbeck and Chr. Hansen Holding, however, the Foundation had committed itself equally vis-à-vis both companies and their other shareholders. The trans-

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fer in August 2000 of the Foundation’s shares in the two companies to LFI A/S placed the management of this role in the latter company. The share capital of LFI A/S had been expanded by a nominal DKK 350 million to a nominal DKK 450 million in connection with the transfer.13

The Kontiki project Following the transfer of the shares in Lundbeck and Chr. Hansen to LFI, the Lundbeck Foundation discussed and made decisions about development in the two companies, or “operative units” as they were called, through LFI. It was not long before LFI, apart from monitoring the development in both companies, as majority shareholder had to make a far-reaching decision about the future of the Chr. Hansen Group.

It is unclear when the idea of a deconglomeration of the Chr. Hansen Group arose. The first time the topic was mentioned in the Lundbeck Foundation was at a board meeting on August 30 2001 in LFI A/S when Arne V. Jensen stated that “as previously mentioned” the board of Chr. Hansen Holding was working on divesting itself of ALK but would retain the ingredients company Chr. Hansen.14 In spring, however, these efforts were discontinued, and instead the focus was on finding a strong international pharma company that could improve the development and commercialisation of ALK’s pipeline, which also contained the grass allergy vaccine Grazax, among other things. However, “splitting up” the group and establishing ALK and Chr. Hansen as two independent listed companies was still under consideration.15 On November 7 2002, the “Kontiki” project to split ALK and Chr. Hansen into two separate listed companies was presented to the board of LFI. Among the advantages would be the elimination of the existing holding company discount and the opportunity to invest directly in the two companies, which simultaneously would obtain a stronger and clearer position. The plan, however, involved a prior preemptive share issue of DKK 1.1 billion that was to be used to strengthen ALK’s capital base and reduce Chr. Hansen’s interest-bearing debt. The implementation of the issue presupposed the participation of LFI with approximately DKK 350 million.

The plan was to implement the project quickly by presenting a demerger at an extraordinary annual meeting in Chr. Hansen Holding at the end of

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February 2003. It was precisely the timing that was at the centre of the LFI board’s subsequent discussion because of the many uncertainties in the project. While board chairman Sven Dyrløv Madsen – who was also chairman of the board of Chr. Hansen Holdings – spoke in favour of executing the project in 2003, deputy chairman Arne V. Jensen preferred to wait until 2004. Everybody supported the objective, including a separation of the two companies as well as a capital increase. It was therefore decided that Steen Hemmingsen should contact Christian Dyvig in Morgan Stanley, which LFI had earlier used as adviser concerning the Chr. Hansen Group, and hear their assessment before a decision was made.16 Nine days later LFI’s board met once more for an extraordinary meeting that had only one item on the agenda: Kontiki. Since Sven Dyrløv Madsen had presented “a convincing argument” for implementing the plan in 2003 at a board meeting in Chr. Hansen Holding, and Steen Hemmingsen had, among other things, examined Danske Securities’ material and reported that Morgan Stanley endorsed the project being implemented in 2003, and that it also would “increase value creation for the shareholders”, the board decided unanimously that LFI would approve Chr. Hansen Holding’s plan. However, this presupposed that the Employees Capital Pension Fund, ATP, and the Danish Labour Market Supplementary Pension Scheme, LD, both participated proportionately, and that LFI’s future shareholding would not drop below 40 percent.17 The process subsequently ground to a halt. At an LFI board meeting on Feb­r uary 27 2003, Arne V. Jensen asked why, as had been decided, Chr. Hansen Holding had not taken steps to increase the capital and separate the two companies. Steen Hemmingsen replied that the Chr. Hansen Holding Management “had not wished to implement the capital increase because the amount was too insignificant for a demerger”. Besides, ATP and LD did not wish to commit themselves. However, the Kontiki Project had not been completely shelved as Sven Dyrløv Madsen said that “the LFI board is still evaluating the situation”.18 As for the Kontiki Project, at the LFI board meeting on December 11 2003, it was announced that it was not yet clear whether, and if so, when the preconditions would be met”.19

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Arne V. Jensen (b. 1933) was a Member of the Board of Trustees of the Lundbeck Foundation from 1987 and Chairman in 2003-2008. He is a chemical engineer and between 1974 and 1990, he was CEO of Cheminova A/S and of Cheminova Holding A/S in 1990-1999. During his chairmanship, the Lundbeck Foundation concentrated on increasingly bigger, multi-annual grants with a focus on establishing centres of excellence.

Grants were also professionalised, using external experts and a committee system. In addition, he worked to professionalise the work of the Board with self-evaluations and developing a corporate governance basis for the

Disposal of Chr. Hansen A/S The exchange of opinion between Arne V. Jensen and Sven Dyrløv Madsen reflected a disagreement on the Board of the Lundbeck Foundation about the separation of ALK and Chr. Hansen A/S. There was consensus about the necessity of a separation but not about the speed or about which of the two companies should be sold off and where the Lundbeck Foundation would

role of the Lundbeck Foundation as company owner. Arne V. Jensen was also Chairman of the Board of Lundbeck from 1986 to 2003 when the company became a significant, European based player in the global psychopharmaceutical industry.

have to relinquish control. While Arne V. Jensen was in favour of a swift separation and disposal of Chr. Hansen, Sven Dyrløv Madsen was pulling in the other direction.

However, the Kontiki project was soon realised, and in a different way than originally envisaged. A factor that probably contributed to the final split-up and sell-off of the Chr. Hansen Group was a change of chairman in the Lundbeck Foundation and LFI. Sven Dyrløv Madsen died on November 25 2003, after which Arne V. Jensen was appointed temporary chairman in both the Foundation and LFI. Arne V. Jensen, who had resigned as Chairman of the Board of Lundbeck earlier in the year, continued in both chairmanships after the Lundbeck Foundation and LFI’s annual meetings, while Jørgen Worning became the new Chairman of the Board of Chr. Hansen Holding.

123

KAPITEL 1

A rare photograph of four chairmen of the Lundbeck Foundation Board of Trustees, taken in 2003 at the offices

In early 2004, deliberations about taking a different direction than originally envisaged in the Kontiki project would seem to have reached a conclusion in

of the Foundation. From left to right:

the Lundbeck Foundation and LFI. At a meeting of the Board of the Lundbeck

Niels Harboe, Chairman 1987-1993;

Foundation on February 2 2004, Arne V. Jensen said that a large ingredients

Torben Grandt, Chairman 1993-1995;

firm had made enquiries about a possible takeover of Chr. Hansen. Both Car-

Per Søltoft, Chairman 1982-1987;

negie and Morgan Stanley estimated that the class B shares had a potential

and Sven Dyrløv Madsen, Chairman

market value of 500 to an individual buyer, while the current market price

1995-2003.

was 325. LFI’s chairmanship therefore asked Jørgen Worning if, given the present group of owners, Chr. Hansen Holding could close this gap, which in his opinion they could not. Arne V. Jensen consequently considered that the Foundation would have to decide20 whether the Board of Chr. Hansen Holding should be urged to find a better owner for the firm as a whole, or possibly of the ingredients section where the greatest synergies in a sale were expected to be.

After intensive discussions, the Board of the Foundation was unanimous in asking the Board of Chr. Hansen Holding to “try to realise the increased value in the company, even if this meant complete divestment of the Foundation’s shareholding in the company”. Moreover, the Foundation would be

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open to the possibility of retaining a stake in ALK, “if this could take place on commercial terms”.21 At a board meeting in LFI on March 17 2004, the decision was then taken to make Kontiki a project that primarily sought to dispose of the ingredients section in order to realise the associated additional value. The board was sceptical about investing capital in the allergy part, and instead suggested that Jørgen Worning should sell ALK later.22 The decisions were confirmed at the Lundbeck Foundation’s strategy seminar on August 18 2004. At the same time it was spelled out that if Chr. Hansen Holding were unable to sell the allergy section – which would “clearly be preferable “ – LFI would assist in the whole process by, as a back-up, entering a buyers’ consortium to take over ALK.23 Following the strategy seminar, the chairmanship of the Lundbeck Foundation/LFI and Steen Hemmingsen held a meeting with ATP and LD, who shared the Foundation’s view of ALK. The three shareholders therefore urged the board of Chr. Hansen Holding to consider “whether the two business units should each enter an industrial consolidation”. Chr. Hansen Holding’s board followed the recommendation and started an investigation of how best to realise the additional value. They also contacted a French competitor/partner concerning ALK. As such, preparations were made to sell off both the ingredients and the allergy section of the Chr. Hansen Group, but this was not to be.24 On September 23 2004, at a board meeting of LFI, deputy chairman Thorleif Krarup referred to the recent rises in the market price of the Chr. Hansen Holding share and an analysis of the group by Skandinaviska Enskilda Banken, and he concluded that ALK was driving the rise. Nils Axelsen added that in his opinion the prospects for ALK were “rather positive” and that the management of the company “were doing a good job”. At the request of Arne V. Jensen, Steen Hemmingsen also related that a potential buyer with whom he had been in contact was mainly interested in the ingredients section.25 In other words, there was a growing opinion that instead of disposing of its whole engagement in Chr. Hansen Holding, the Lundbeck Foundation/ LFI should sell Chr. Hansen and maintain its engagement in ALK where the future seemed brighter than earlier. At any rate, this is what happened.

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After a meeting with ATP and LD, on November 24 2004 it was announced that Chr. Hansen Holding was putting the ingredients section up for sale.

Around the turn of the year, 46 expressions of interest had been received, equally divided between industrial enterprises and financial investors. About 30 were regarded as genuine offers, and at the end of January 2005, eight were selected with a view to the submission of binding offers, which were delivered on April 22 2005.26 ‘The winner’ was the French-based private equity fund, PAI Partners, and an agreement could be signed after only four days of negotiation with an acquisition price of DKK 8.2 billion on a debt-free basis. The profit from the sale was DKK 4.2 billion, DKK 4 billion of which was distributed to the shareholders with 35 percent or DKK 1.409 billion to LFI A/S, which was able to book a net profit of DKK 1.512 billion in 2005 from Chr. Hansen Holding.27 On December 13 2005, Chr. Hansen Holding and ALK merged as per September 1, with ALK as the continuing, listed company. On the same occasion, all class A and B shares in Chr. Hansen Holding were exchanged with class A and B shares in ALK, after which LFI continued to own 35 percent of the shares and exercised 64 percent of the votes, thereby giving the Lundbeck Foundation the controlling ownership of two purely pharmaceutical companies.

Self-evaluation and corporate governance Once LFI had been established, in 2001 the Lundbeck Foundation drew up its statement for the year, divided into the profits of the Foundation and LFI, respectively. However, a change of legislation in 2002 meant that the Foundation’s business earnings and not merely the related yield would have to be allowed for in its net profit. On this basis, the Foundation’s profit in 2002 was DKK 867 million before grants compared to DKK 917 the previous year. In 2003, the annual result increased to DKK 1,235 million and to DKK 1,556 million the next year, after which it took a major leap to DKK 4,307 million in 2005.28 In addition to the income from Chr. Hansen Holding’s sale of the ingredients section, in 2005 the Lundbeck Foundation received an extraordinary income from reducing LFI’s owner’s share in Lundbeck to about 70 percent.

This had been done partly to increase the Foundation’s free funds, and partly

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to increase the liquidity in the share. The proceeds from this, DKK 925 million, contributed to a record-high income for the Lundbeck Foundation in 2005 of DKK 4,307 million, DKK 4,180 million of which came from LFI A/S, and the remaining DKK 127 million from the Foundation’s own holding of bonds.

Thus, the Lundbeck Foundation had no problems financing the increased grants framework, which was filled in with a modest dividend from LFI of DKK 153 million.29 In other words, 2005 was a quite unusual year, and in 2006 the financial situation was once more ‘normalised’ in that there were no similar extraordinary incomes and thereby a net profit of DKK 1,414 million. In the course of the year, the Foundation’s total assets, with Lundbeck and ALK included at stock market value, grew from DKK 31.2 billion to DKK 38.3 billion; at the end of 2006, the Foundation’s share of the stock market value of the two companies stood at DKK 27.8 billion and the free funds amounted to DKK 10.8 billion.30 Given the scope of the Lundbeck Foundation’s financial activities, and not least the controlled ownership of Lundbeck and ALK, and with a simultaneous pronounced growth in the annual grants, a need arose in the Foundation’s board and administration to professionalise the work of the board, in relation to investments and business activities and in relation to the grants policy.

Accordingly, a self-evaluation of the work of the board was taken up at the

Bertil From cand.polit. (b. 1968), CFO in the Lundbeck Foundation since 2009. He came to the Lundbeck Foundation in June 2006 as Director of Investments after a career in Danske Bank and previous positions in

strategy seminar in August 2004. The reason was that, unlike the situation in

the secretariat of the Danish Econo-

limited companies, the members of the board were not accountable to an an-

mic Councils and the National Bank

nual general meeting or a group of owners, but were self-evaluating, self-per-

of Denmark.

petuating members. Before the meeting Arne V. Jensen had distributed a form to be used in self-evaluation, which he suggested the individual members each filled in and returned to Steen Hemmingsen, who would then, together with Arne V. Jensen, process the responses and present the board with feedback. One of the objectives was to investigate whether the board members addressed the correct assignments and used their time appropriately.

The board supported the initiative, and from then on self-evaluation every three years became the standard procedure in the work of the board.31

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The Foundation board’s relation to the boards of Lundbeck and ALK was also discussed, and this led to a set of rules being drawn up on “The Management of the Foundation and Corporate Governance”, which was published for the first time in the Lundbeck Foundation’s Annual Review for 2006 and developed over the following years. The guiding principle was to stay at “arm’s length” from the boards of the two companies, first and foremost by ensuring that the majority in the two boards, usually including the chairman, were “at all times” independent of the Lundbeck Foundation. This was formulated as follows in the annual review for 2007:32 The Board of the Foundation does not involve itself in the day-today running of the companies, but regards it an important duty that the companies have qualified and dynamic boards that can develop the companies for the benefit of all shareholders.

It could be seen, however, that the Lundbeck Foundation was Mette Kirstine Agger (b. 1964), biologist and MBA, is the managing partner in Lundbeckfond Ventures since

active when in 2004 the board of the Foundation cut things short and initiated the split-up and disposal of the ingredients section of Chr. Hansen Holding. It was also demonstrated that the board did not flinch from

2009. Before joining the Lundbeck

intervening directly and resolutely in management issues in the companies

Foundation for nine years, she was

when in autumn 2007 the chairman of the board of Lundbeck, Flemming

CEO of the bio-tech company 7TM

Lindeløv, was replaced by Per Wold-Olsen.33

Pharma, of which she was a cofounder.

Lundbeckfond Ventures Following the extraordinary profit in 2005, in 2006 the Lundbeck Foundation obtained a profit of DKK 1,414 million before grants. DKK 727 million of this consisted of profits from portfolio investments with DKK 648 million in LFI and DKK 79 million in the Lundbeck Foundation itself. The Foundation’s/LFI’s share of the profits from Lundbeck and ALK amounted to DKK 704 million in all. Since Lundbeck had been listed, the Foundation’s ownership share of the company had, as previously mentioned, been reduced to approximately 70 percent, and correspondingly the Lundbeck shares’ part of the total assets of the Foundation during the same period was reduced from c. 90 to c. 70 percent.34

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This development was the result of a deliberate policy, the objective of which was to spread the activities of the Foundation and increase the share of portfolio investments, which amounted to DKK 10,819 million at the end of 2006 – an increase of DKK 2 billion during the year. The Foundation regarded half of these ‘free funds’ as capital, which primarily – and in the terms of the trust deed – was to “safeguard and develop the Lundbeck Group”. The return on the second half constituted the basis for the grants, given that “financial resources” were also ensured in relation to ALK. Just under half of the free funds were placed in Danish bonds, and a little over a third in foreign shares as the biggest areas of investment.35 In 2007, the annual result increased to DKK 1.7 billion, while the free funds rose to DKK 12.2 billion. Then in 2008, for the first time ever, there was a loss of DKK 757 million in the Lundbeck Foundation due to the financial crisis, which hit portfolio investments hard. While Lundbeck and ALK contributed with profits that together amounted to approximately DKK 1.1 billion, the loss on the portfolio investments came to almost DKK 1.8 billion, but the largest part by far was unrealised. For the same reason, the Foundation’s free funds were reduced by DKK 1.3 billion to DKK 10.8 billion, corresponding to the level at the end of 2006. Nevertheless, the level of the grants was maintained at the previously announced approximately DKK 330 million up to 2010.36 2008 was also the year when the Lundbeck Foundation decided to use some of its free funds for direct investments and move its investment strategy in a more active direction in the field of life science. In late 2008, it was decided to establish a new, internal investment unit in LFI for this purpose, an evergreen life science venture fund called Lundbeckfond Ventures and an investment framework, provisionally of about DKK 100 million a year. In October 2009, the biologist Mette Kirstine Agger, was appointed head of the venture fund. She had been the co-founder of the bio-tech company 7TM Pharma and its CEO for nine years.

Lundbeckfond Ventures made its first investment at the end of 2009 in the young Danish firm EpiTherapeutics, which develops epigenetically-based medicine for the treatment of cancer. The firm originated in the biomedical research centre at the University of Copenhagen, Biotech Research & Innovation Centre (BRIC), which the Lundbeck Foundation had previously supported.37

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The first venture investment had already been made before the new unit was operative, in late January 2009 when LFI took over Lundbeck’s 27.2 percent share of the listed biotech company LifeCycle Pharma A/S. Back in 2005, the Lundbeck Foundation had offered to take over Lundbeck’s stake of 40 percent of shares in the biotech company, but it was decided to wait for a stock exchange listing. This followed in November 2006, and at the same time as the Lundbeck Foundation/LFI bought the shareholding in LifeCycle Pharma in 2009, they also took over Lundbeck’s ownership share in four small private equity funds with investments in the biotech industry.

LifeCycle Pharma develops patented reformulation technology for the improved release and uptake of medicines in the body. The technology was originally developed in Lundbeck, but as the product lay outside the focus of the company, in 2002 the area had been spun off into an independent company with, among others, Novo Nordisk as co-owner. The development of the technology had now come so far that in April 2009 a series of clinical trials commenced that necessitated two capital infusions in 2010 and 2012.

LFI’s share of this totalled DKK 348 million, increasing the ownership share to 42 percent. In 2013, applications were submitted for European and American approval of the marketing and sale of the drug Envarsus for the prevention of organ rejection in kidney transplant patients. In July 2011, the company changed its name to Veloxis Pharmaceuticals A/S. At the end of 2012, Lundbeckfond Ventures’ investment portfolio comprised 12 companies in Denmark, Sweden, USA, France, Finland and UK, and in 2014 the portfolio had grown to 19 companies with most investments in the USA. The geographic reach brought a new global view and momentum to the Lundbeck Foundation’s investments in enterprises. This was not merely a matter of passive investments as Lundbeckfond Ventures also engaged itself in supporting the management of the firms. Since its start, Lundbeckfond Ventures had invested a total of DKK 840 million in private firms, and the annual investment framework was raised to DKK 300-400 million.38

Obel-LFI Ejendomme A/S It was not, however, only about venture investments. For some time, LFI had wanted to invest some of its free funds in property, and had specifically been considering doing so since 2004. The Lundbeck Foundation and LFI

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did not wish to establish real estate management themselves; deliberations were therefore concentrated on entering into partnership with an established property company and/or investing in listed property financing ventures. In 2007, DKK 220 million was invested in a portfolio of listed European real estate companies administered by the Belgian property manager, Petercam. In addition, concrete enquiries were made about buying a shareholding in the unlisted Danish real estate company Dades as well as in the listed real estate company Jeudan. Likewise, in 2006 the Foundation received an offer to become an anchor investor in the listed Danish real estate company Victoria Properties, whose strategy was investing in German properties.

At that juncture, it was LFI’s assessment that the property market was too highly priced, and negotiations with the companies mentioned were suspended, apart from an investment of about DKK 100 million in around 3 percent of the share capital in Jeudan. Deliberations resumed in 2009, resulting at the end of the year in LFI entering into cooperation with the Danish C.W. Obel Ejendomme A/S on the establishment of a joint venture, the real estate company Obel-LFI Ejendomme A/S. By the terms of the agreement, the company was to be administered by C.W. Obel Ejendomme A/S. This meant that LFI would not have to establish its own real estate administration. However, by filling two of the company’s four seats on the board, the Foundation gained an influence on investment decisions. Director Steen Hemmingsen and CFO Bertil From, who had been in the Foundation since June 2006 after a career in Danske Bank among other places, joined the board of Obel/LFI on the part of the Foundation.

C.W. Obel A/S, the parent company of C.W. Obel Ejendomme, was, and is, trust-owned like LFI A/S, and the two owners therefore had, and have, a uniform, long-term approach to the investment strategy. With invested equity capital of DKK 250 million from each party and anticipated gearing of 65 percent, the purchase to the tune of DKK 1-2 billion was expected during the first years. C.W. Obel Ejendomme A/S had been registered as an independent real estate company in 1997, and predominantly invested in properties each priced at less than DKK 300 million. Conversely, the new joint venture would invest in properties worth over DKK 300 million in Copenhagen and Aarhus. The first joint purchase by the new company was the property at the

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KAPITEL 1

In Late 2010 and early 2011, the Lundbeck Foundation acquired the controlling interest in the Danishbased, global rescue company, Falck

corner of Strandboulevarden 92-96 and Århusgade in Østerbro, Copenhagen for a little over DKK 400 million.39

A/S. The company was founded in

The search for a third pillar

1906 and was a pioneer in the area of

Concurrently, and more far-reaching, for some time the Lundbeck Founda-

rescue, private ambulance, and fire

tion/LFI had been on the lookout for “a third pillar”. The Foundation was

fighting services. Today, Falck A/S is

searching for a controlling ownership of a “mature enterprise” of a size that

active in 45 countries on all six conti-

could help to reduce its financial dependence on Lundbeck, whose share

nents and is thus the biggest rescue conglomerate in the world with more than 32,000 employees. The photograph shows a Danish Falck em-

price was volatile as a result of its reliance on patents and approval of new products; this also applied to the ownership of ALK. The question of investing in “a third pillar” was discussed in more detail for the first time at the

ployee in a modernly equipped ambu-

Foundation board’s strategy seminar in August 2005, where there was agree-

lance in Vejle, Jutland. (Photo: Falck

ment that while “this could not be excluded … at the moment there should

Denmark)

be no active search for such investment”.40 The theme reappeared at various intervals in the years that followed, not least inspired by the relatively new board chairman, Mogens Bundgaard-Nielsen. In late August 2009, action was taken at the board’s strategy seminar when a decision was to be made as to whether the Foundation

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should earmark more than DKK 2 billion for this third pillar “if the right opportunity arises”. The board was of the opinion that the Foundation should.

One important argument in favour of this was Lundbeck’s ‘2012-2014’ problem, i.e. that turnover and results could decline drastically with the expiry of patents on Escitalopram and Ebixa.41 It turned out to be a longer process than anticipated. Following extensive screening, three possibilities were being investigated, one of which was a Danish medicinal enterprise that was not in fact up for sale and it was also unknown whether the owners were willing to sell. A more obvious candidate was the firm Swedish Orphan, which had specialised in European distribution of pharmaceuticals to treat rare diseases and which had been put up for auction.42 LFI entered serious negotiations to buy Swedish Orphan. In late 2010, after thorough due diligence, the director of the Lundbeck Foundation, Steen Hemmingsen, recommended that the board should not proceed any further in the purchasing process. In his opinion, it would not be “a prudent investment” to bid a minimum of SEK 3.5 billion plus an earn-out provision for the firm, and the board agreed. Instead, the company was sold to Swedish Biovitrum, while the Lundbeck Foundation/LFI continued its search for its third pillar.43

Falck A/S The opportunity arose in autumn 2010 when LFI/the Lundbeck Foundation got a chance to acquire 36 percent of the shares in the ambulance and rescue services group Falck A/S from the private equity fund, Nordic Capital. Falck was otherwise on the way to being listed for the second time in a mere two years, but in the end the Lundbeck Foundation acquired its third pillar with Falck’s managing director, Allan Søgaard Larsen in an “extremely active role in close dialogue with the managing director of the Lundbeck Foundation, Steen Hemmingsen”.44 Steen Hemmingsen had taken the initiative when the stock market listing of Falck A/S had been cancelled in spring 2010. A telephone call to Allan Søgaard Larsen led to negotiations, but the scepticism in both support bases had to be overcome before a ‘term sheet’ could be signed on November 26 2010. A purchase agreement with a price of just over DKK 2.8 billion was entered on December 14 2010 with a formal handover on January 14 2011.

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However, this was not the end of the matter. With 44 percent of the shares in Falck, Nordic Capital was still the majority shareholder and had planned to sell their shares in connection with a stock exchange listing in the second quarter of 2011. However, the situation on the stock market looked unstable in spring 2011, and as the management of both Falck and LFI considered that it would be advantageous to postpone an initial public offering for three to five years to be able to develop Falck under private ownership. With the consent of Nordic Capital, Steen Hemmingsen and Allan Søgaard Larsen once more set about finding possible alternatives to an IPO.45 This resulted in the Lundbeck Foundation hiring the Swedish investment bank SEB Enskilda to assemble a consortium of investors. At a board meeting in LFI on March 24 2011, Steen Hemmingsen and Thorleif Krarup, who represented LFI in Falck’s board, were authorised to invest a further amount of up to DKK 500 million, which could bring the ownership share up to 57 percent. This would make Falck a subsidiary in line with Lundbeck and ALK. The main task was to assemble a group of investors, and if this were to fail, Steen Hemmingsen and Thorleif Krarup were authorised to support an initial public offering during the second quarter if Nordic Capital so wished.46 The initiative led to an agreement at the end of April 2011, by the terms of which the Lundbeck Foundation, KIRKBI, PFA and Falck’s management bought Nordic Capital’s remaining holding in Falck. LFI’s share of the purchase price was DKK 428 million. This agreement brought the Lundbeck Foundation’s ownership share up to 57.4 percent, while KIRKBI acquired 20 percent of the shares, the management of Falck increased its ownership share to 10.3 percent, and PFA obtained 2.1 percent. At the same time, ATP, which had already invested in Falck, reduced its ownership share to 4.4 percent, while the Swedish insurance company, Folksam, retained its existing share of 3 percent, and the remainder of Falck’s management and personnel collectively had an ownership share of 1.5 percent. The transaction was concluded as per June 30 following approval by the EU Commission.

The Lundbeck Foundation had acquired a ‘third pillar’ through this purchase, a company that was based on neither research nor manufacturing, but which nevertheless had contacts with both Lundbeck and ALK due to its status in the health sectors in Denmark and other countries. This was also an aspect mentioned in the press, although it was not crucial for the Lundbeck

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Foundation, which regarded the purchase as an investment. Furthermore, Falck was not a patent-based company and therefore the share was not as volatile as in the case of Lundbeck and ALK, which was also an important aspect for the Foundation.

A significant parameter for Falck was the Lundbeck Foundation’s activities to benefit society through support for research in the health field, considering Falck’s wide contacts with the public health sector. When the shareholding in Falck was increased, Steen Hemmingsen told the newspaper Børsen that a stock exchange listing could once more be a possibility but that “in that case it would take place several years later”.47

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CHAPTER 8

RESEARCH CENTRES, YOUNG RESEARCHERS AND THE BRAIN PRIZE

T H E L U N D B E C K F O U N D AT I O N

W

hile the board of LFI was busy with the Kontiki project and the possible demerger of the Chr. Hansen Group, the Board of the Lundbeck Foundation concentrated on the grants and develop-

ing the grants policy. Up to now, what had been pivotal to the Foundation’s support for Lundbeck was that the board of the Foundation “to a great extent” prioritised research projects in Denmark whose fields were within the neurosciences as well as other projects “of a high international standard”.

Research Professorships and research prizes Following these guidelines, in September 1999 the board of the Foundation decided to establish five Lundbeck Foundation Research Professorships over five years at a cost of approximately DKK 5 million each, usually with an associated postdoctoral research position, without it having been determined that one should necessarily be established every year. The first of these new Research Professorships was advertised and awarded on June 1 2000 to Mikael Bols, dr. scient. Since 1995, Mikael Bols had been an Associate Professor at the Department of Chemistry in Aarhus, where he now became Research Professor. The second was filled in 2002 by Lars V. Kessing, dr. med., in the field of affective states; the third in 2003 by Robert Madsen, PhD, in the area of organic chemistry; and the fourth in 2004 by Ole Nørregaard Jensen, cand. scient. and PhD, in the field of clinical nursing.1 In autumn 2000, the Foundation’s Board decided to broaden the guidelines in order “to a higher degree” to grant funds for health and natural science research in areas outside the neurosciences, while maintaining the requirement of a high standard. The geographic area for the grants was also expanded to the whole of the Øresund region, and there would also be a possibility of granting up to an annual DKK 4 million for cultural purposes.2 In accordance with this geographic expansion, the Lundbeck Foundation Research Prize, originally the P.V. Petersen Prize, was re-named the Lundbeck Foundation Nordic Research Prize. At the same time, the prize was raised from DKK 300,000 to DKK 400,000, as well as a further amount up to DKK 600,000 for research to be determined by the recipient. In 2000, the ‘new’ prize was awarded for the first time to Professor Karl Anker Jørgensen, dr. scient., who led the Centre for Metal Catalysed Reactions at the Department of Chemistry, Aarhus University.3

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In 2001, the Lundbeck Foundation granted DKK 25 million for a new auditorium when a new elite centre of biomedical research, the Biotech Research & Innovation Centre (BRIC), was established at the University of Copenhagen. In 2006, the foundation granted BRIC further support of DKK 20 million to set up a research group at the centre.

An innovation was the establishment in 2001 of a research prize of DKK 150,000 to be granted as a personal honorary award to a young researcher under the age of 40 who had conducted “outstanding research in health or the natural sciences”. The first recipient was Professor Søren Nielsen, dr. med., of the Department of Anatomy at Aarhus University. Furthermore, it became possible to grant as much as DKK 2.5 million a year for five Lundbeck Foundation postdoc fellowships with a duration of five years – potential total awards of DKK 12.5 million. Finally, it should be possible to support foreign researchers’ sojourns in Denmark as well as Danish researchers’ visits abroad and to grant support for positions combining clinical work and research.4 A new research prize was introduced in 2002, the Lundbeck Foundation Talent Prize of DKK 50,000 to be awarded to young researchers under the age of 30, “who have made a remarkable research contribution or achieved particularly distinguished results of an international standard”. Up to three talent prizes could be awarded every year, and the first three recipients were Associate Professor Milena Penkowa, PhD, of the University of Copenhagen, Jacob Falck Hansen, cand. scient. and PhD student at Kræftens Bekæmpelse (the Danish Cancer Society), and Alexei Komolov, Assistant Research Professor, PhD, of the Department of Chemistry at the University of Copenhagen.5 A new departure for the Lundbeck Foundation was to grant funding for ‘bricks and mortar’ to the universities. When a new elite centre for biomedical research, Biotech Research & Innovation Centre (BRIC) was established

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at the University of Copenhagen in 2001, the Foundation granted no less than DKK 25 million for a new auditorium that could seat 300-500 persons. BRIC’s overall purpose was to gather biotechnological research areas in a community that ranged from molecular biological basic research to clinical research at hospitals focusing on treatment.6

New grants organisation The establishment of the new research prizes did not lead to reductions in the ordinary grants. On the contrary, they were increased and efforts were made to use them predominantly on large-scale projects of more than DKK 1 million. Thus, between 1999 and 2002, the annual amounts granted grew from DKK 21 million to DKK 85 million, followed by a stagnating trend with grants totalling DKK 92 million in 2004. After this, the grants were increased dramatically in 2005, when the amount was almost doubled to DKK 222 million.

The growth in the amount granted and the number of grants made upon application as well as the Foundation’s own initiatives led to a need for a strengthened and more professionalised grants policy. To this end, at the beginning of 2002, on the recommendation of Steen Hemmingsen the Lundbeck Foundation created a position as

Anne-Marie Engel PhD (b. 1962), is the head of research in the Lundbeck Foundation since 2008. Between 1995 and 2003, she was a researcher

head of research to give a new dynamism and new perspectives to the

at the Bartholin Institute at Copenha-

Foundation’s grants policy. Henrik Hertz was appointed to the post and,

gen University Hospital, and from

therefore, withdrew from the board of the Foundation. He retired from this

2004 a clinical coordinator in the re-

position as early as the end of 2004 on grounds of age and was succeeded

search and development department

by chief physician Erik Juhl, dr. med., as the new head of research. In May

of Statens Serum Institut (the State

2005, Anne-Marie Engel, PhD, was appointed assistant head of research.

She came from a job as a researcher and clinical coordinator at the research and development department of Statens Serum Institut (the State Serum

Serum Institute), before becoming assistant head of research in the Lundbeck Foundation in 2005.

Institute).7 With Erik Juhl as the driving force, a decisive further step in the professionalisation of the grants policy with strengthened, independent assessment of applications was taken at the board seminar at the conference hotel Havreholm Slot on August 24-25 2005. A key point at the seminar was a pro-

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posal presented by head of research Erik Juhl for a new grants organisation to process the growing number of applications and the increasingly large grants. This was to consist of a self-developed electronic application system based on a platform used by other foundations, together with the establishment of a committee system to assess the applications.8 Although the new application system would create a “very schematic application procedure”, on the other hand it would improve the possibility of “uniform, qualified assessment and an easily approachable statistical function”.

The purpose of establishing a committee system was to ensure “broader professional expertise” in assessing the applications, and, specifically, Juhl proposed that the Foundation’s existing research support committee, consisting of three board members, should be abolished. The three, together with five new, external experts – three of whom should come from the other Nordic countries – should form an advisory assessment committee, whose professional Erik Juhl dr.med. (b. 1939), head of research at the Lundbeck Foundation in 2004-2008. Erik Juhl came to the Lundbeck Foundation after a long ca-

composition should correspond to the Foundation’s grants strategy. The board approved the new system and its introduction “at a pace which is administratively sound”.9 The electronic application system was introduced such that applications

reer in Denmark and abroad. He was

as per June 1 2006 within the health and natural sciences could only be sub-

the architect behind the professionali-

mitted electronically. Following further discussion about the composition

sation of the Foundation’s grants pol-

and tasks of the scientific advisory committee, it was established with effect

icy with the introduction of an elec-

from the 2007 grants, with Professor Mikael Rørth, dr. med., of the board of

tronic application system in 2006 and

the Lundbeck Foundation in the chair. The eight members of the committee

the international advisory committee in 2007.

were supplemented with an associated consultant, Professor Thorkild Andersen of Aarhus University, in connection with assessing applications in non-life-science research fields such as chemistry and physics, until in 2009 an independent natural sciences committee of four members was set up alongside the health sciences committee.10 The principles for the Foundation’s grants policy were that they were concentrated on “health science research and the area of natural science that borders on and supports health science”. Research in chemistry and physics

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was supported in the field of non-biologically oriented research. “Transparency, uniformity and competence in all decision-making processes” was aimed at and, it was stressed, “the grants are made quite independently of the research conducted in H. Lundbeck A/S and ALK-Abelló A/S”.11

Lundbeck Foundation Research Centres The initiative to set up a new grants organisation was concurrent with the adoption of a new grants strategy, which the board had discussed in the middle of August 2004 at a two-day strategy seminar held at the course facility Sophienberg Slot, where the board decided to increase the amount for the annual grants and the number of areas in which they should be used. The director of the Danish National Research Foundation, Professor Ole Fejerskov, was invited to the seminar, which became a regular annual event. Professor Fejerskov spoke about the grants for and administration of the 33 basic research centres that the National Research Foundation had financed over the years through grants of a total of DKK 2.5 billion. The managing director of the Swedish Wallenberg Foundation and board member Professor Erna Møller was also invited to talk about the Foundation’s support for basic research, which included the establishment of large research centres, and the way in which the Foundation as a private grant-making organisation handled the application and decision-making process, using external experts as advisers and adjudicators.12 Research centres were indeed moving into the centre of the Lundbeck Foundation’s grants policy. Of the five Research Professorships granted in 1999, to which a sixth had been added, four were filled, while two were in the process of being filled. The intention was now to move up a notch, quantitatively and qualitatively. This would make new, growing demands on the basis for financing. However, on the basis of among other things a number of economic projections up to 2013 for the Foundation and LFI, the director of the Foundation, Steen Hemmingsen, concluded that “there was nothing to prevent the grants from being increased to a level of DKK 150200 million a year”. Board chairman Arne V. Jensen found it desirable that the grants over the next three-year period amounted to a total of DKK 500 million; after two years, a decision could be made about the next threeyear period.13

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A proposal from head of research Henrik Hertz pointed in the same direction with the establishment of one or two “Centres of Excellence”, and by and large there was agreement on pursuing this line. It was added that one of the centres should “probably” focus on the central nervous system (CNS). It was decided to go ahead and to concretise the framework conditions for the establishment and running of a research centre and to contact the principals and faculty deans at selected universities to obtain proposals for relevant candidates. The Danish National Research Foundations could also be consulted regarding their experience and expertise with respect to contracts and the like.14 On November 25 2004, the board of the Lundbeck Foundation decided to establish a neuroscientific research centre that followed the grant-making model of the Danish National Research Foundation. Consequently, the grants budget for 2005 was increased to DKK 170 million, DKK 50 million of which was intended for the centres, and it was thought that two centres could possibly be set up. In terms of the grants model, when the grant expired the centres were to become part of the respective universities.15 At the beginning of 2005, in response to its announcement the Foundation received expressions of interest from no fewer than 26 research groups.

After assessment by an international panel of experts, six of these were selected to submit an application. Following yet another international assessment procedure, during which the applicants were interviewed by the international adjudicators and the Foundation’s centre committee, on June 21 2005 the Foundation decided to establish three centres in all and to finance these with DKK 50, DKK 40 and DKK 30 million over five years.16 The decision followed a unanimous recommendation from an internal Centre Committee, but only after Arne V. Jensen had asked the committee to explain why they had recommended three centre proposals, and not two as had been decided by the Foundation Board. In doing so, the committee would “seem to have gone beyond the terms of reference laid down by the board”. Nils Axelsen accounted for the committee’s assessments, where one application was very clearly the best, while the international adjudicators had taken differing views on the prioritisation of the second best application.

After having spoken with several of the international adjudicators, the committee had therefore decided to propose the establishment of three centres.

By doing so, the Foundation would “boost both basic and clinical neuro-re-

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search”, and it was also “a very impressive gesture that would strike a responsive chord in Danish neurological circles”.17 Moreover, when it was confirmed that the Foundation would be able to

The establishment of an international scientific evaluation committee in 2007 constituted a foundation stone in the professionalisation of the Lund-

administer three centres, the board unanimously approved the recommen-

beck Foundation’s grants policy. At

dation. The three Lundbeck Foundation ‘Centres of Excellence’ were then

the front, from right to left: the chair-

established, and on September 20 2005 the grant, totalling DKK 120 million

man, Professor Mikael Rørth dr.med.,

over three years, was marked by a ceremony at the Foundation’s premises on

Director, and Mogens Bund-

Vestagervej, attended by the Minister for Research. The three centres, which

gaard-Nielsen, civil engineer. In the

among other things, were expected to train about 50 PhD students were:18 • Centre for Membrane Receptors in Neuronal Disease (MIND),

next row, from the right: Professor Bertil Hamburger dr.med., Professor Anders Bjørklund dr.med., and Professor Ole Petter Ottersen dr.med.

led by Professor Claus Munck Petersen and Professor Anders Nykjær,

The three at the back are, from the

Aarhus University.

right: Professor Ole William Petersen

• Centre for Integrated Molecular Brain Imaging (CIMBI), led by Professor Gitte Moos Knudsen, H:S Copenhagen University Hospital.

• Centre for Neurovascular Signalling (LUCENS), led by Professor

dr.med., Professor Jørgen Frøkjær dr. med., and chief physician Nils Axelsen dr.med.

Jes Olesen, Glostrup Hospital.

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RESEARCH CENTRES, YOUNG RESEARCHERS AND THE BRAIN PRIZE

The establishment of the three neuroscientific Centres of Excellence was not a one-off event, although a number of the coming new centres focused on other fields of health and natural science. Already when the decision was made to establish the first Lundbeck Foundation Centre of Excellence, the board had discussed future centres which would “not necessarily” have to concern themselves with CNS. At the end of 2005 it was decided to establish yet another centre – several centres perhaps – in the field of chemistry/physics focusing on “theoretical research in quantum systems”.19 This time only five expressions of interest were received, but all were asked to draw up and submit a full application. After assessment by an international committee of experts followed by interviews in Copenhagen, in May 2006 the board of the Lundbeck Foundation decided to grant a total of DKK 65 million over five year for the establishment and running of three new centres:20 • Centre for Theoretical Chemistry (LCTC), led by Professor Poul Jørgensen, Aarhus University.

• Theoretical Centre for Quantum System Research (LTC), led by Professor Klaus Mølmer, Aarhus University.

• Centre for Atomic-scale Materials Design (CAMD), led by Professor Jens Kehlet Nørskov, The Technical University of Denmark.

The grants to establish the – now six – Lundbeck Foundation Centres of Excellence should be viewed in the context of the concurrent increases in the ‘ordinary grants’, at first to DKK 102 million for 136 projects in 2005 and then to DKK 181 million for a total of 215 projects in 2006. In addition, the Lundbeck Foundation Nordic Research Prize, the honorary awards for young researchers and the talent prizes continued to be granted. From 2005, the prizes were increased to, respectively, DKK 1.6 million (DKK 600,000 of this as a personal honorary award), DKK 250.000 and DKK 75,000, and the prizes were regularly increased in the following years.

Focus on young researchers and research groups The Lundbeck Foundation granted a total of DKK 248 million in 2006. The grants this year were significantly more than had been allocated at the strat-

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egy seminar in August 2004, and at the same time, the Foundation announced that it also expected to increase the total sum of the grants in 2007. The increase was made possible by the decisive change in the Lundbeck Foundation’s financial situation when Chr. Hansen was sold off in spring 2005, which had provided the Foundation/LFI with DKK 1.4 billion, to which was added the DKK 925 million in revenue from LFI’s reduction of its ownership share in Lundbeck to approximately 70 percent. Equally crucial, a forthcoming share buyback programme in Lundbeck, if it were realised, would provide the Foundation/LFI with as much as DKK 4.3 billion in the years up to 2008.

The consequence was an increased – and intentional – growth in the Foundation/LFI’s so-called “free funds”, which were not tied to a share interest in Lundbeck and ALK, giving the Foundation greater “room for manoeuvre”. A projection of growth in the free funds in 2006-2010 showed a rise from DKK 10.1 billion to DKK 14.2 billion, with due allowance for anticipated dividends/buy-back and grants/costs.21 During the coming years, the grants also continued to grow, to DKK 281 million in 2007, DKK 328 million in 2008, and then a more modest increase to DKK 340 million in 2009. The establishment of research centres following

The executive management of the Lundbeck Foundation visiting a university in spring 2009. From left to right: managing director, Steen Hem-

the existing model remained a regular component, and the topics for the

mingsen PhD, head of research

annual call for expressions of interest were decided each year at the strategy

Anne-Marie Engel PhD, and the chair-

seminar on the basis of input from the scientific environments.

man, director Mogens Bund-

Thus, in 2007 DKK 100 million was granted over five years for the estab-

gaard-Nielsen, civil engineer.

lishment and running of three Centres of Excellence for clinical, or to be exact, translational research, which is research that has to do with the transfer or ‘translation’ of research results from basic and pre-clinical research to clinical research with a view to later application in clinical practice. In 2008, DKK 95 million was granted for three research centres in the field of clinical intervention research in order to support research environments with the ability to offer advanced diagnostics and treatment.22 DKK 100 million was granted in 2009 for a further three research centres, this time in the field of nanomedicine. The topic had originated at an ‘inspi-

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ration seminar’ the previous year, when Danish universities and university hospitals had been invited to make proposals for areas in which they regarded Danish research as at the forefront internationally and where there was furthermore potential for strengthening this position. On the advice of an international panel of experts, the announcement was formulated, after which the grants were made following the assessment and recommendation of yet another international panel of experts in nanomedicine and nanotechnology.23 And that was that. At a strategy seminar on August 27-28 2009, having launched over 15 research centres with approximately 300 researchers in the space of five years, the Foundation decided, following a proposal by Anne-Marie Engel, its head of research since October 2008, to stop establishing new Centres of Excellence. The reason for this was that a number of research centres had been established in recent years involving both public and private foundations, and that this would be a lasting trend. The need for new investments in centres on the part of the Lundbeck Foundation “was therefore regarded as less pronounced”.24 Instead, the Foundation felt that it could “have a greater impact on Danish research” by increasing its support for “outstanding young researchers” – Danish or foreign – by giving them the opportunity to establish and lead small research groups in an area of their own choice and implement a largescale research project at a Danish research institution. This policy had begun in 2007 following a discussion of the difficulties in repatriating outstanding Danish researchers who had had successful careers at research institutions abroad. Therefore, it was suggested that the Foundation should focus on this younger segment and grant adequate funds to enable excellent researchers to achieve independence in the Danish research environments.

After a number of years of focusing on Foundation-defined areas of investment, as well as maintaining a steadily growing amount for ‘free’ project applications, the Foundation would once again allocate a large portion of its grants budget to “bottom-up research in health and natural science, including neuroscience in the broad sense without any further delimitation of the subjects”. What was crucial for awarding grants was the researchers’ choice of “important front-line projects” and their qualifications for conducting the research.25

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Over the years, the Lundbeck Foundation has donated 43 Lundbeck Foundation Fellowships at a total of DKK 430 million, making this form of support for young researchers a considerable ven-ture. The photograph is from the awards in 2013 and shows six award winners. From left to right: Jacob Sherson, PhD, Associate Professor, Thorsten Hansen, PhD, Associate Professor, Petrine Wellendorph, PhD, Associate Professor, Stephan Pless, PhD, Associate Professor, Pontus Gordon, PhD, Postdoc, and Tania Rinaldi Barkat, PhD, Assistant Professor.

This decision was made over a year after a change of chairman in the Lundbeck Foundation. Arne V. Jensen resigned as chairman of the board and LFI at the annual general meeting in May 2008, having served as a member of the Foundation board since 1987 and chairman since 2003, alongside his membership of the board of Lundbeck in 1984-2003, and as chairman in 1986-2003. The managing director of Sund & Bælt, civil engineering graduate Mogens Bundgaard-Nielsen, who had been elected to the board in 2004, became the new chairman.

The change of chairman did not lead to any changes in the Foundation’s grants policy in the first instance, as another three research centres were established in 2009. Likewise, the annual grants continued to grow to DKK 384 million in 2010, but funding for the establishment of more Lundbeck Foundation Centres of Excellence ceased.

A request from the University of Copenhagen for co-financing with no less than DKK 600 million the establishment of a “neuro megacentre” like the Max Planck Institute, was also rejected on the grounds that such “an invest-

147

KAPITEL 1

Queen Margrethe II of Denmark presenting the Brain Prize 2012 in the Royal Library to French Christine Petit and English researcher Karen Steel

ment would not be relevant, among other reasons because the Foundation would lose its flexibility and the positive effects of established megacentres had not been documented�.26

for their pioneering research in clini-

Instead, the Lundbeck Foundation now directed its focus towards young

cal and genetic matters concerning

researchers and research groups of high international repute, in other words

hearing and deafness. From the left:

the growth layer for the frontline research of the coming years.

Christine Petit, Karen Steel, Queen Margrethe II, and the Chairman of the Brain Prize, Nils Axelsen dr.med.

Junior Group Leader Fellowships The strategic shift to an increased focus on young researchers had been in the pipeline for some time, in the sense that it could be traced back to the honorary award for young researchers and the Talent Prize, both of which were maintained. In 2007, the Foundation had moreover for the first time awarded two Lundbeck Foundation Junior Group Leader Fellowships of DKK 10 million each to give young researchers the opportunity to establish their own research groups in Denmark.

One of the reasons given for the new focus was that studies of Nobel laureates had shown that researchers in the 35-40 age group are often especially

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original and productive, and that the possibility in Denmark, when compared with other countries, of giving “optimal working conditions” to the best in this age group is “hardly prioritised highly enough”. In 2010, therefore, DKK 50 million was again allocated for fellowships for “excellent young research leaders” who wanted to start up their own research group at a Danish research institution. Each of the five Junior Group Leader Fellowships amounted to DKK 10 million.

A further two stipends of DKK 25 million each were earmarked for ‘Grants of Excellence’ projects in the neuroscience area – that is, Lundbeck’s field of interest. This was of course intentional, after the decision by the Foundation board at the strategy seminar in August 2009 to focus more on grants in this area. The objective was “to ensure international competitiveness and more effective neuro-research in Denmark”, as there was a wish to attract “excellent research leaders” preferably from abroad, who would be able to significantly “boost” existing research environments.

All seven stipends were advertised internationally, and were awarded in open competition based on a written evaluation by external experts followed by interviews with the best qualified candidates.27 The intention behind the new stipend, to make it possible for Danish researchers to return from abroad and establish research groups in Denmark, was based on two assumptions: on the one hand an assumption about the value of increased mobility for researchers, and on the other hand, that Danish researchers would thus be given the opportunity to develop and mature during sojourns abroad early on in their career. There was a total of 27 applications for the first two stipends, and this great interest led to three such stipends being advertised the following year and a further five in 2009. Another five stipends followed in 2010 as well as the two Grants of Excellence, after which the board decided in 2011 to discontinue the latter type of grant as the recruitment basis was judged to be too thin.28 In 2010, in order to promote the internationalisation of Danish research, the possibility of granting Visiting Professorships at short notice was introduced. This was a scheme where foreign researchers could be engaged as visiting professors at Danish health-science research environments for a period of up to six months.29

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The Brain Prize It was clear in 2010, when the independent grant-awarding Foundation, Fonden for Grete Lundbecks Europæiske Hjerneforskningspris (The Grete Lundbeck European Brain Research Foundation) was established, that the Lundbeck Foundation had not forgotten the elite in its new grants strategy, with the creation of what the Foundation itself described as “Denmark’s first major international research prize”. The prize, which came to be called ‘The Brain Prize’, is EUR 1 million, and is awarded annually with the objective of “honouring excellent European brain researchers and strengthening the interplay between Danish and other European brain research”.

The board of the Lundbeck Foundation made the decision that the Lundbeck Foundation Nordic Research Prize should be replaced by a “major international research prize” on the recommendation of board chairman Mogens Bundgaard-Nielsen in autumn 2008 following preparatory work by Nils Axelsen, who had been working for a long time to establish a major international prize. At a board meeting on March 25 2009, Erik Juhl and Nils Axelsen were asked to draw up a proposal, which was discussed and became the basis of a final decision at the board meeting on December 9 2009.

It was decided that it definitely should not be a neuroscience prize, but a “brain prize” that was to be awarded for eminent contributions to European brain research, covering everything from basic to clinical research. A “highly skilled” international selection committee was to be established, consisting of leading and internationally recognised brain researchers, to make the assessments. The objective of the Foundation and the prize was to “stimulate Danish brain research” by the recipients of the prize interacting with Danish brain researchers. It was emphasized that the prize was to be awarded without regard to commercial interests (i.e. Lundbeck), and that the selection committee alone should make recommendations to the board of the Foundation concerning the award of the prize, without requiring approval from or cooperation with the board of the Lundbeck Foundation or others. It was to be a purely honorary award with no conditions as to its application to research, for example.30 The financial basis of the new foundation was safeguarded through a donation from the Lundbeck Foundation, with an assurance of willingness to provide further support. At the same time, it was ensured that the majority of the board was independent of the Lundbeck Foun-

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dation, among other ways through the appointment to the board of the principals of the University of Copenhagen, Aarhus University and the University of Southern Denmark. Nils Axelsen became the first chairman of the new foundation, which was also given its own executive management.

An “outreach programme” is connected with the Brain Prize, involving a collaboration of the Foundation with the three major Danish universities and the Danish Society for Neuroscience. Through meetings, master classes, cooperation and the like, the prizewinners meet Danish researchers, especially young scientists, with a view to providing the latter with the opportunity to establish scientific collaboration with top international researchers. The programme also includes travel grants for young researchers.

Once the Brain Prize had been established, the Lundbeck Foundation’s Nordic Research Prize was awarded for the last time in March 2010. This prize had been awarded since 1987, first as the P.V. Petersen Prize, then as the Lundbeck Foundation Research Prize and finally as the Lundbeck Foundation Nordic Research Prize.

The Brain Prize was awarded for the first time on May 2 2011, jointly to three Hungarian researchers, who worked in Hungary, England and USA, respectively. They received the prize for their research in neural circuits in the brain which are important to memory and the ability to orient oneself.

The President of the European Research Council, Helga Nowotny, presented the prize at the Royal Danish Library, Copenhagen. On May 7 2012, HM Queen Margrethe II presented the prize for the second time, to a French and an English researcher for their work on clinical and genetic matters related to hearing and deafness. In 2013, no fewer than six researchers were awarded the prize: three Germans, two Americans and an Austrian, who were behind the establishment of optogenetics, a method of research where light is employed to control the function of genetically modified brain cells. In 2014, the prize went to three recipients from France, Italy and England, respectively, for their pioneering research in consciousness and higher brain mechanisms.

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CHAPTER 9

NEW INVESTMENT STRATEGY AND NEW FOCUS AREAS

T H E L U N D B E C K F O U N D AT I O N

I

n 2011, LFI A/S changed its name to Lundbeckfond Invest A/S. This was not a ‘real’ change of name, but it coincided with the adoption of a new investment strategy, which

included a significant change in portfolio investments, with fewer government and mortgage bonds plus liquid assets and investment in more shares instead, as well as in loans and credit bonds. At the same time, it was decided to transfer a larger part of the management of the assets from external to internal administration.1 This change probably had two causes: the decision by the

board of the Lundbeck Foundation at its strategy seminar in August 2010 to give the Foundation a more business-oriented profile; and the retirement of Steen Hemmingsen, LFI’s director for over 11 years, at the end of May 2011. On June 1 2011, he was replaced by Christian Dyvig, who was known to the Lundbeck Foundation from many years’ cooperation, for example from his time with Morgan Stanley.

There were also changes in the position of chairman within a short space of time. At the annual meeting in 2011, Mogens Bundgaard-Nielsen resigned as chairman because of illness and was replaced by the former deputy chairman, Professor Mikael Rørth, dr. med., while the group managing director of FLSmidth (FLS), Jørgen Huno Ras-

Jørgen Huno Rasmussen, (b. 1952), Chairman of the Lundbeck Foundation from 2012 after having served as a board member since 2010. He is

mussen, who had been elected to the board in 2010, became the new deputy

both cand.polyt. and lic.techn. and

chairman. Mikael Rørth stepped down as chairman at the annual meeting in

among his positions were CEO of H.

2012 in order to devote himself to the grant activities of the Foundation, al-

Hoffmann & Sønner 1988-2003 and

though he continued as chairman of the research committee and the health

F.L. Smidth A/S 2004-2013. He has

science committee. Jørgen Huno Rasmussen, who simultaneously stopped

been an honorary pro-fessor at

as group managing director in FLS, became the new chairman, while Mikael Rørth became deputy chairman.

Copenhagen Business School since 2013.

New investment strategy The new investment policy meant that between August 2011 and the end of 2012, the credit part of LFI’s free funds in the form of business loans and corporate bonds increased from 13 to 24 percent. Correspondingly, the part that consisted of bonds and liquid assets decreased from 42 to 21 percent and the

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part consisting of shares from 34 to 44 percent. Concurrently, self-administration increased, and Lundbeckfond Invest took over the portfolio management in 2012. Likewise, a new, more risk-taking investment philosophy, different from the conventional portfolio management philosophy, was implemented.2 It was a basic premise for investing in shares that the companies should be “solid, well-run and global market leaders or leaders in their relevant markets” – and they were not to “act unethically or otherwise be at variance with the UN Global Compact principles”. Investments would only be made “if the shares look attractive”, and they should be companies with sustained economic growth rather than companies with a short-term potential. Examples of these, mentioned in the 2012 annual report, were companies like Volkswagen VW, Google, Cisco and Allianz.3 There were also changes in the relationship with Lundbeck and ALK when the board of the Foundation decided to appoint Christian Dyvig to both boards as deputy chairman at Christian Dyvig (b. 1964) was managing director of the Lundbeck Foundation from 2011 to 2014. He is cand.

the next annual meetings, thereby increasing the Foundation’s representation in both boards to three members. The intention was to involve the Foundation more as an active owner, while at the same time re-

jur., with an MBA, and has held leader-

porting to Lundbeckfond Invest A/S was enhanced with monthly reports

ship positions, i.a. with Morgan Stan-

from the companies to Dyvig, and from him further to the Foundation board,

ley in London and Frankfurt 1993-

together with his analyses and assessments.

2003. He has also been a partner in

An adjustment was made in the Foundation’s principles for corporate gov-

Nordic Capital in 2003-2009, and

ernance because of the Foundation’s increased engagement and representa-

Chairman of the commercial and in-

tion. Now, “at least half” of the members in subsidiaries who were elected by

vestment bank, FIH Erhvervsbank, from 2012 to 2015. As director, he moved more of the administration of the Lundbeck Foundation’s invest-

the annual meeting were independent of the Foundation, and the director of the Foundation would “normally” have a seat on the boards, “typically as deputy chairman”.4 However, Christian Dyvig did not join the board of Falck,

ments in house in order to achieve

where Steen Hemmingsen and Thorleif Krarup represented the Foundation.

greater return, and he established

As previously, the chairman of the Foundation did not join the boards of the

Lundbeckfond Emerge.

companies.

There was yet another change of director in 2014 when Christian Dyvig announced at the beginning of March that he wished to resign because he

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had bought the controlling interest in the playground company KOMPAN. Lene Skole, who came from a position as CFO in Coloplast A/S, became the new managing director. She took up her position on September 1 2014.

Returns above benchmark One of the reasons for changing the investment strategy was the expectation of an upcoming positive change in the financial markets, despite continued economic difficulties globally and in Europe in particular. The expectation proved correct, as investors were turning to the more risky assets because of the low interest rates on government bonds. For the Lundbeck Foundation, this meant that in 2012 it was precisely these assets that yielded most.

The highest return on investments came from credits, with 20 percent, followed by listed shares with a yield of 18 percent – both well above benchmark. The internally managed investments in particular delivered very impressive results, and in all, including cash and bonds, Lundbeckfond Invest delivered a return on investments of 13.1 percent compared to the benchmark of 12.2 percent.5 The positive development continued in 2013 with an overall yield of 11.3

Professor Michael Rørth dr.med., chief physician (b. 1943), was chairman of the Lundbeck Foundation in 2011-2012, chairman of the Founda-

percent. The good results were in particular propelled by the in-house-man-

tion’s international scientific evalua-

aged shares, which generated a yield of 31 percent compared with a bench-

tion com-mittee in 2007-2014, and a

mark of 17, while the in-house-managed credit assets yielded 14 percent com-

Member of the Board of Trustees of

pared with a benchmark of 5 percent.

the Lundbeck Foundation 2002 to

In terms of amounts, the total return on investments in 2013 was DKK 1.2

2014.

billion, while the total surplus of the Lundbeck Foundation grew by 22 percent to DKK 2.8 billion. At the end of 2013, the Lundbeck Foundation’s total net assets comprised just under DKK 37.5 billion. About DKK 12 billion of this was free funds, which was the same level as before the investment in Falck.6 The realization of the new investment strategy continued in 2014, when the Lundbeck Foundation’s total returns on the free investment funds amounted to DKK 2,2 billion, and the total surplus reached about DKK 2,5 billion. At the end of 2014, the Lundbeck Foundation’s total capital com-

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prised about DKK 40 billion, of which the free funds comprised approximately DKK 13 billion.

Two support preferences The grants policy was also changed along with the shift in investment strategy. In 2011, when the Brain Prize was furthermore awarded for the first time, the level of grants was significantly raised by DKK 120 million to DKK 504 million. The level was stabilised with grants of DKK 482 million in 2012. At the same time, it was stated in the 2012 annual review that from 2012 the Foundation’s strategic projects would focus on psychiatry, “but also on research on allergology/immune modulation”.7 This made it clear that the increased prioritisation of bottom-up applications and the prioritisation of fellowships etc. did not mean the end of strategic top-down grants.

Instead, the grants policy of the Lundbeck Foundation now had a triple aim, in the sense that it consisted of three main types of grants: grants for bottom-up research projects On September 1, 2014, Lene Skole (b.

1959) became managing director of the Lundbeck Foundation. She came from a position as CFO in Coloplast,

awarded upon application; grants for fellowships and young researchers; and finally, funding of strategic research projects in the field of brain research and allergology/immune modulation.

This meant a new scientific prioritisation of the Foundation’s grants pol-

and before that, she had worked at

icy. Throughout the years, given the Lundbeck Foundation’s special histori-

A.P. Møller–Mærsk for 27 years, inclu-

cal connection with Lundbeck, research in the CNS area had quite naturally

ding as CFO in Mærsk Company Ltd.,

been accorded high priority in the Foundation’s grants policy. This prioriti-

London. She has management trai-

sation was challenged at the beginning of the ownership of Chr. Hansen. The

ning from IMD in Lausanne and from

result was that all support for research internally in the two companies was

the London Business School.

discontinued, and the CNS area alone was once more given precedence in the grants policy.

However, there continued to be a balance between prioritising research areas of special interest to Lundbeck on the one hand and giving the impression of being an independent foundation that did not unduly favour CNS research on the other hand – and thus the company’s and in the final analysis the Foundation’s – own interests. Over the years, this has given rise to many different formulations of the grants policy.

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August 25-26 2011 saw an important change at the Foundation Board’s strategy seminar. It was formally decided to expand the support preferences to include allergology and immune modulation with a view to supporting the research carried out at universities and hospitals that forms the basis of commercially-oriented research and development in ALK. This was a clear statement of the Foundation’s preferences, which also can be read at the Foundation’s website: “All other things being equal, research priorities are neuroscience, psychiatry, allergology/immune modulation and prehospital care.”8 However, it was still basically the case with projects where the topic of research had not been defined in advance that the first criterion for a grant was the quality of the project irrespective of the field of research. Furthermore, it was only where the quality was equal that priority was given to projects in brain research and allergology/immune modulation. The Foundation, moreover, would strive to support clinical research within the focus areas, as basic research has most frequently dealt with pathological mechanisms in the broader sense.

Yet it was still research relating to psychiatry, neurology and other types of brain research that dominated the grants made by the Foundation. In a way, this was natural enough, if only because the scope of the existing research in allergology and immune modulation was and is modest compared with brain research, as reflected by the different percentages of the two areas in the number of applications made to the Lundbeck Foundation.

In 2013, another change was made in the grants policy when it was decided that in future support would only be given to natural science projects if they had a clear biomedical aim. The Foundation closed its Natural Science Committee for the same reason, since relevant natural science applications would instead be assessed by the Biomedical Committee.

On the other hand, the Lundbeck Foundation decided to expand its fields of support to include projects aimed at raising the quality of teaching and communication in science and research. The applications would have to undergo a stringent evaluation process, like all other research projects. Therefore, the Foundation appointed a committee to evaluate projects focused on increasing interest in science – and in biomedicine in particular – through research, teaching and communication.9

157

KAPITEL 1

In 2013, the Lundbeck Foundation moved its domicile to Scherfigsvej 7 north of Copenhagen. In addition to

At the same time, the Foundation revised its application procedure for the Foundation’s bottom-up and personal grants, so that in future applicants

the management and administration

would have to submit their applications to dedicated grant rounds for PhD

of the Foundation’s own grant and in-

scholarships, national or international postdoc fellowships etc.

vestment activities, the domicile houses Lundbeckfond Ventures and

Grants 2011-2014

Lundbeckfond Emerge as well as the

The change in strategy did not affect the efforts to strengthen the interna-

Foundation for the Grete Lundbeck

tionalisation of Danish research. On the contrary, in 2011, a further seven

European Brain Research Prize. The Lundbeck Institute, an in-ternet-based forum for health personnel with evidence-based educational and clinical

guest professorships were granted for basic health science research and clinical research. Pursuing the same goal, in 2012 the Foundation entered into an agreement with the McGovern Institute at MIT to finance a Lundbeck Fellow

information in the fields of psychiatry

postdoc sojourn at the institute, which focuses on brain research and new

and neurology, also has its offices in

methods for preventing or treating brain disease. In cooperation with the

the building.

Denmark-America Foundation, the Lundbeck Foundation also financed two Fulbright scholarships, in allergology and prehospital treatment, respectively.

In 2011, a special strategic initiative was a grant of DKK 121 million for the first three years of research in a major interdisciplinary project, iPSYCH, focusing on psychiatric research. This was the biggest single grant ever for psychiatric research in Denmark. In 2012, DKK 120 million was granted for the establishment of a Danish ‘satellite’ of the distinguished European basic research organisation, The European Molecular Biology Laboratories (EMBL).

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Following a call for applications and an evaluation process under the auspices of the Danish Council for Independent Research, based on the international evaluation of the applications, the Lundbeck Foundation decided to place the Danish EMBL node at Aarhus University. The node was called DANDRITE, and it will receive up to DKK 120 million from the Lundbeck Foundation for a period of up to ten years.10 In 2012 also, DKK 44 million was granted for a five-year research programme, RESCueH, which includes five studies of non-medicinal treatment of patients who are dependent on alcohol. The programme, which also received support from the Danish Foundation Tryg Fonden, the Region of Southern Denmark and the University of Southern Denmark, centres on maintaining the patients’ motivation and participation in choosing the method of treatment. Finally, DKK 16 million was granted for a five-year research project, “Mental Health in Primary Care” (MEPRICA), at Aarhus University. The objective of the project is to conduct research on how to improve general practitioners’ diagnostics and treatment of mentally ill patients who also suffer from physical illnesses such as diabetes.

There was a pronounced drop in the total amount granted in 2013, which came to DKK 376 million compared with DKK 482 million the previous year.

One reason for this was long-drawn-out negotiations about certain largescale projects; in actual fact the Foundation maintained its grants framework of DKK 400-500 million. As formerly, the major part of the donations went to salaries for researchers at various levels in their careers, from scholarships for senior researchers, including professorships, to a smaller part that went to technical personnel in the research projects. Overall in 2013, the Lundbeck Foundation financed what corresponds to 621 research positions, 64 of which were for technical personnel.11 In a new departure, the Foundation made public its distribution of grants to the different areas: bottom-up upon application, personal, strategic and Lundbeck Emerge (more details about this later). Of DKK 160 million for bottom-up applications, DKK 128 million was granted to biomedicine research projects, of which 80 percent went to basic research and 20 to clinical research. In addition, the distribution of the grants as far back as 2008 was made public, making it possible to follow the development in the Foundation’s grants policy.12

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In 2013, three new strategic grants were donated totalling DKK 81.5 million, continuing with the Foundation’s focus on psychiatric research as well as furthering the efforts to internationalise Danish research. About half, DKK 40 million, went to a project dealing with the blood-brain barrier, conducted by five Danish researchers from different fields. Following an external peer review process, DKK 30 million was donated for a continuation of the Lundbeck Foundation’s Centre for Clinical Intervention and Neuropsychiatric Schizophrenia Research (CINS) for a renewed five-year period (CINS II), for the purpose of a series of further clinical studies. Finally, DKK 11.5 million was donated to the continuation of a research project, Danish Functional Disorders (DanFunD). With this grant, together with a grant of DKK 10 million from Trygfonden, the research project, which is the biggest population study of functional disorders in the world, could be continued, among other things with the creation of a new cohort of 10,000 persons.

2013 was also the year when the Lundbeck Foundation revived an earlier practice. Apart from personal grants to young researchers in particular, the Foundation established a Lundbeck Foundation Professorship for Professor Eske Willerslev at the University of Copenhagen. This, the first Lundbeck Foundation Professorship in a number of years, carried with it a total of DKK 25 million over the next five years for Willerslev’s research in the origin and development of humankind, utilising genetic analyses.13 The grants in 2014 were the same as in 2012 and totalled DKK 475 million.

About DKK 120 million of this went to a three-year continuation of iPSYCH, which had received an amount of the same magnitude in 2011. The overall financial support for the project thus totalled about DKK 240 million, making this the absolutely largest grant ever donated by the Lundbeck Foundation.

Among other large grants was DKK 25 million to the research project PROCRIN led by the managing director in Danish Regions, Adam Wolf, and Clinical Professor Henrik Toft Sørensen of Aarhus University. The aim of the project is to improve patient treatment and safety in Denmark by establishing a national infrastructure programme with the objective of enhancing the quality of Danish clinical research and supporting the increased utilisation of health data in the clinic.

DKK 45 million was granted to the RIMMI project led by Professor William Agace of the Technical University of Denmark. The objective of the project is

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to identify at the cellular level the processes that initiate and maintain inflammatory states in the bowel in patients suffering from colitis ulcerosa and Crohn’s disease. DKK 10 million was granted to Professor Messoud Ashina, Glostrup Hospital, for a five-year research project that focuses on mapping the processes that trigger a migraine attack.

DKK 10 million was granted to Sven Frøkjær, Vice Chancellor of Copenhagen University. In cooperation with the University of British Columbia in Canada, Frøkjær wished to invite Dr. Urs Hafeli to take up a Lundbeck Foundation professorship. Urs Hafeli’s field of research is drug delivery and nanomedicine, and during the grant period, he will divide his time equally between the University of British Columbia and the University of Copenhagen.

Finally, DKK 18.5 million was donated to two five-year clinical Research Associate Professorships and two Research Professorships at the university

Since 2012, the Lundbeck Foundation has given priority to a new area: communication of natural science and, in particular, health research, i.a. by means of the Lundbeckfond Lectures, which are not always lectures in the traditional sense. The talks are held in

hospitals in Aarhus and Odense, with the aim of strengthening clinical re-

venues such as the Bremen Theatre

search at university hospitals in Western Denmark.

in the centre of Copenhagen.

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In addition, among other grants, about DKK 11 million was granted for scholarships, about DKK 46 million for PhD scholarships, just under DKK 51 million for postdoc fellowships and DKK 60 million for fellowships.

Lundbeckfond Emerge In 2012, in the borderline area between grants and commercial activities the Lundbeck Foundation established a seed investment unit, Lundbeckfond Emerge, led by Christian E. Elling. The objective of Emerge is to support the commercialisation of new research results, e.g. at universities, by founding and supporting new enterprises from the very start, as well as their further professionalisation and development. The rationale behind the innovation was that Lundbeckfond Emerge complements, on the one hand, the Foundation’s support for Danish research of the highest standard and, on the other hand, the venture activity in Lundbeckfond Ventures.

The intention was to identify research of a high standard and with strong commercial potential and to be a proactive partner in collaboration with the researchers in question. The financial investment and relevant support were to be on commercial terms, with the further long-term purpose of contributing to the Lundbeck Foundation’s earnings.

The oncology company, EpiTherapeutics, hitherto under the auspices of Lundbeckfond Ventures, was assigned to the new unit from the beginning, but Lundbeckfond Emerge created the basis for the first new enterprise in the same year as it was founded. This was done by signing a licensing agreement with Aarhus University to commercialise the use of a protein, sortilin, which is the focal point in the research of one of the Lundbeck Foundation’s Centres of Excellence, MIND. The result was the establishment of the Insusense Therapeutics company, where the parties would together set up and implement a research and development plan for the further commercial use of sortilin, which had surprisingly proved to play an important role in treating metabolic diseases, including type 2 diabetes. In March 2013, Lundbeckfond Emerge invested a further DKK 15 million in the company, at the same time as Christian E. Elling became the company’s managing director.

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From the left: Troels Petersen, Lundbeck Foundation Fellow, Associate Research Professor of particle physics, Eske Willerslev, Lundbeck Foundation Professor of geogenetics, and Minik Rosing, Professor of geology, discussing “The origin of the universe, Earth, life and human beings,” at an event in the Bremen Theatre in Copenhagen on November 26 2014.

Lectures, communication and teaching A new focus area initiated by the Lundbeck Foundation is the communication of research results and teaching. An innovation in 2012 was the implementation – in cooperation with the Science Centre Experimentarium City Copenhagen and the newspaper Information – of a series of popular- science Lundbeckfond Lectures to give the public the opportunity to hear researchers talk about their work. The topics were primarily in the area of health science, and the lecturers were researchers, practitioners and former patients. There was enormous interest in the lectures, and consequently the Foundation, together with Aarhus University and the open university Folkeuniversitetet in Aarhus, arranged a similar series of Lundbeckfond Lectures in Aarhus at the beginning of 2014.

The same year, the Lundbeck Foundation, together with several other foundations, lent its support to the international science conference, the Euroscience Open Forum (ESOF) 2014, which works to build bridges between science and the rest of society. The conference was held in Carlsberg City District in Copenhagen in June 19-26 2014, simultaneously with the

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popular science festival, Science in the City. The Lundbeck Foundation sponsored the conference track “Learning in the 21st Century”, where over the course of three days a committee each day selected the winner of a prize for the best presentation among the teachers, students and researchers who participated.

Later in the year, the Lundbeck Foundation, together with Nordeafonden (the Nordea Foundation), among others, sponsored an initiative where the National Centre for Science Education and the House of Natural Sciences joined forces to benefit from the fact that in 2015 Denmark’s first astronaut was to go on a ten-day mission to the International Space Station, ISS. The objective is, by means of a long series of course of teaching, conferences and events, to make use of the space mission in 2015 to create greater interest among Danish schoolchildren in science and technology and the many educational and job opportunities in the area.

Another initiative from the Foundation in the communication of research results was its engagement from 2013 in Information’s PhD Cup, which the newspaper, together with Danish universities, had held for the first time in 2012. The objective of the Cup is to give young researchers an opportunity to communicate their research and place it in a societal perspective, so that the knowledge produced by Denmark’s many PhD students can be used in public debate. Each university can nominate eight candidates, whose texts are assessed by an independent panel of judges.

The Danish broadcasting corporation Danmarks Radio (DR) joined the Lundbeck Foundation in organising the event so that the eight best candidates could be celebrated in a show on DR2, where they competed for the prize for the year’s best oral communicator of a PhD project. This event took place for the first time on May 20 2013 and was shown on DR2 before a live audience. The Minister for Research, Innovation and Higher Education, Morten Østergaard, presented the prize to the best communicator. The grant provided by the Lundbeck Foundation covered, among other things, the sponsorship of a media school for a large number of young researchers, where editors, journalists, actors, experts in social media etc. help young researchers to understand and manage their role in public debate.

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Overall and to an increasing extent, the Lundbeck Foundation has supported initiatives and activities in the fields of research communication and teaching, including the work of detecting and encouraging very young research talents of school age.

More generally, in 2013, together with the newspaper Politiken, the Foundation set up an annual prize for the ‘best teacher in Denmark’, i.e. a teacher who had made a special impression with his or her teaching. Pupils, colleagues, head teachers or parents can nominate candidates for the prize. The objective of the prize is to make a contribution to the development of good teaching practice and through this to contribute to the rebuilding of respect for the teaching profession. The prize was awarded for the first time on May 7 2013, when a total of 1,084 candidates were nominated and a panel of experts evaluated them. Six prizes in all were awarded: a first prize of DKK 75,000 as well as a second and third prize in each of the two categories primary and lower secondary schools and youth education programmes. The prizes were awarded in Pressens Hus, and the Minister for Education, Christine Antorini, attended the ceremony.

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SIXTY YEARS OF THE LUNDBECK FOUNDATION

T H E L U N D B E C K F O U N D AT I O N

I

n late 2014, the net assets of the Lundbeck Foundation amounted to approximately DKK 40 billion, which is almost three times the level of the assets at the turn of the millennium. During the same period, the annual

grants increased from DKK 15-20 million to about DKK 450-500 million, cor-

responding to a twenty-fold increase. Both figures are a marked expression of the rapid development undergone by the Lundbeck Foundation since H. Lundbeck A/S went public in 1999.

In the even longer historical perspective, the Foundation is in many ways fundamentally different from when it was established by Grete Lundbeck back in 1954. Over the years, the trust deed of the Foundation has been updated and modernised a number of times, but the original objective of supporting the development of Lundbeck and providing financial support for medical research still holds good.

Apart from the substantial growth in assets and grants, the last 10-15 years have been marked by the increasing professionalisation of the work of the Board of Trustees and the administration of investment and grants policies as well as the active ownership of Lundbeck and the other companies where the Lundbeck Foundation has a controlling owner’s share today: ALK A/S and Falck A/S. However, that is not to say that there was no previous development in these areas. On the contrary, steady progress and new initiatives can be traced from the earliest years of the Foundation, all of which, at different rates of development, point forward to the initiatives of recent years.

The early years of the Lundbeck Foundation were devoted to building up capital whose volume and returns could form the basis for donations. This was done primarily by acquiring shares in Lundbeck and its associated company Kefalas, and to a lesser degree by purchasing listed securities such as bonds and shares The first donations in 1962-1964 were honorary awards to Danish doctors, and no grants were made for a number of years after that. In the first instance, the reason for this was the inheritance tax after Grete Lundbeck’s death in 1965, followed by the purchase of the Goldschmidt faction’s 50 percent owner’s share in Lundbeck in 1967. This ensured the Lundbeck Foundation a 100 percent owner’s share of Lundbeck, but the price was a considera-

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ble debt that was not finally cleared until the spring of 1975. Simultaneously, the Lundbeck Foundation had to make loans to Lundbeck, which experienced liquidity problems from time to time.

The Lundbeck Foundation resumed its grants activity in 1972. The donations were faithful to the trust deed, the greater part going to medical science, but the preferences of members of the Board of Trustees also made themselves felt, with support for a book about Det kgl. Assistenshus and grants for the renovation of Tersløsegaard as notable examples. In addition, during the financial crisis of the 1970s, donations were made to Hjælpefonden for Medarbejdere (Assistance fund for staff of Lundbeck) on repeated occasions.

The donations to allergology throughout the 1970s constitute a special case. Although these grants were within the trust deed’s framework of supporting medical science, they were also probably made because the daughter of the board chairman, Erik Birger Christensen, worked in the allergy company ALK. It was probably for the same reason that the Lundbeck Foundation acquired ALK in February 1977, just beating Novo Industri A/S to the punch.

The purchase of ALK had far-reaching perspectives, and even though personal relations were in evidence, and although it ended badly and ALK was sold off in 1979, the acquisition showed that the Board of Trustees was ready to undertake active ownership of a company outside the Lundbeck family.

At the end of the 1970s, and in particular from 1982, the annual grants were increased, amounting to more than DKK 6 million in 1986. The reason was that the Lundbeck Foundation appointed a new chairman in 1982 and, in general, there were new faces in the Board of Trustees. For the same reason, in 1986 and for the first time in the history of the Lundbeck Foundation, the board discussed actual guidelines for making donations. Consequently, the Foundation began to prioritise large-scale, multi-annual projects at Danish research institutions, a measure which has been central to the Foundation’s grants policy ever since.

A culminating point was reached in 1987 when the grants were raised to a historic DKK 24 million; however, this was also due to a change in the tax law.

The grants were further increased in the following years at the same time as large grants continued to be prioritised. The establishment of an annual re-

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search prize, the P.V. Petersen Prize, which pointed directly forward to the Brain Prize of today, was an innovation.

1987 was also the year when the Lundbeck Foundation set a completely new standard for the openness of Danish foundations about their financial situation and grants. This took place when the Foundation published its first annual report with a statement of its financial situation and a complete list of all donations, including the contents of the projects, the recipients and the amounts donated.

The swift growth in the scope of the grants and a corresponding increase in the number of applications resulted in a need for medical competence to assess the applications and the follow-up on projects that received support.

This led to the appointment of the Lundbeck Foundation’s first medical consultant on January 1 1989, marking an important step in the professionalisation of the grants policy.

The end of the 1980s was also a turning point in the investments policy, following the first minuted discussion of investment strategy by the Board of Trustees. Up to then, the Foundation had predominantly placed its free funds in bonds and mortgage deeds etc., but it now decided to invest a significantly larger amount of its assets in shares and to obtain expert advice. Therefore, at the beginning of 1989 the Lundbeck Foundation entered into an agreement concerning investment consultancy with Gudme Raaschou Asset Management. In 1994, it also entered into an agreement with Lazard Brothers Ltd. to administer the Foundation’s European shares outside Denmark while placing other foreign securities in investment funds abroad.

Concurrently with the implementation of a more active and professionalised investment policy, the Lundbeck Foundation bought another company – the first since ALK – when it acquired a majority of voting shares in the listed company Chr. Hansen Holding A/S in 1989. Personal relations once more played a part, and with this purchase, ALK returned to the Lundbeck Foundation. (The company had been sold to Chr. Hansen in 1979).

The purchase prompted the newspaper headline, “A slumbering billion foundation becomes an active investor”, as an eloquent expression of the Lundbeck Foundation’s new investment policy. The biotek project in 1991, with the planned holding company BIODAN and subsequent stock exchange

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listing, demonstrated that the Foundation had an appetite for more, although the plan collapsed when the Harboe family was unwilling to relinquish control of DAKO. In addition to the implementation of the new investment strategy and the acquisition of Chr. Hansen Holding, from 1987 and ten years on the Lundbeck Foundation supported Lundbeck’s growth and development by drawing no dividends or only modest dividends from the company, which was investing heavily, encouraged by the international success of the pharmaceutical Cipramil. However, this policy of restraint on dividends came to an end in 1997 and, simultaneously, year-long deliberations on initiating a flotation of Lundbeck came to maturity. The company was listed on the stock exchange in June 1999.

The purpose of the listing was to secure financial support for Lundbeck’s growth and development in general, but also to increase the Lundbeck Foundation’s free funds with a view to strengthening investment activity and diversifying. At the end of 1999, the stock exchange listing was followed by the establishment of a holding company, Lundbeckfond Invest A/S, placed between the Lundbeck Foundation and its companies, thus in principle separating investment and grants activity.

The flotation meant that the Lundbeck Foundation, as the controlling majority shareholder, now also had to make allowances for other shareholders in Lundbeck. Although a corresponding situation had existed in relation to Chr. Hansen Holding since the Foundation had taken over this company, the issue was now brought to the fore in a completely new way.

A special relationship has always existed between the Lundbeck Foundation and Lundbeck, and thus between owner and company. As early as 1971, this had given rise to a discussion in the Board of Trustees about whether or not to aim at a convergence of persons in the composition of the two boards.

However, there was a majority against this.

The issue of the relationship between the Foundation and the company came up again at the beginning of the 1990s following the acquisition of Chr. Hansen Holding. The employee representatives were of the opinion that there must be a difference between ownership of Lundbeck and of other companies: the latter should be regarded as strategic investments, not as be-

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ing on an equal footing with Lundbeck. In the wake of this discussion, a new issue arose in the Board of Trustees in 1995 concerning the appropriateness of a convergence of persons in the chairmanship of the Lundbeck Foundation and Lundbeck, something that the majority, however, opposed.

Both discussions were triggered by the role of the Lundbeck Foundation as controlling shareholder of both Lundbeck and Chr. Hansen Holding. The stock exchange listing of Lundbeck actualised the discussion of consideration for other shareholders in both Lundbeck and Chr. Hansen. This resulted in the Foundation defining its own role in the annual report for 1999 as that of an “active investor” and “controlling shareholder”, which would support the growth and development of both companies and would also benefit the other shareholders.

Even though the Lundbeck Foundation’s trust deed still accorded special significance to the relationship with Lundbeck, the two companies and their other shareholders were now given equal status. The Board of Trustees announced its criteria for the composition of the two boards in the 1999 annual report, including the status of the representatives of the Foundation and what was expected of the members and their competencies.

The Foundation’s greater consciousness of its role as active owner with a focus on value creation was expressed in the deliberations in 2001 on the splitting-up of Chr. Hansen Holding. In 2005, this led to the disposal of the ingredients section and the retention of ALK. Following this, for the first time, the Lundbeck Foundation drew up a set of rules for “The Management of the Foundation and Corporate Governance”, based on the principle of arm’s length from the companies it controlled. The set of rules was published in the 2006 annual report and regularly developed in the years that followed. At the same time, the introduction of obligatory three-year self-evaluations strengthened the Board of Trustees and its work.

The significance of the corporate governance regulations was actualised when the Lundbeck Foundation, in two steps in 2010 and 2011, acquired a controlling share in Falck A/S. In contrast to the earlier takeovers of ALK and Chr. Hansen, this time personal relations did not form the point of departure.

This was a focused wish to add a ‘third pillar’ to the Foundation, and several alternatives were considered. The director of the Foundation, who had pre-

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viously been a member of the board of Falck, established the decisive contact.

These years also saw the beginning of the Foundation’s internal activities.

A new type of investment in companies was initiated in autumn 2009 when Lundbeckfond Ventures was established. Lundbeckfond Ventures invests in life science companies and also supports the management of these companies.

The Lundbeck Foundation set a new tone in its grants policy in several ways: in 1999, the Foundation decided to establish five Lundbeck Foundation professorships, and in 2001 it began to target support to young researchers under the age of 40 by establishing a special honorary award for this group.

This was followed the next year by the first award of the Lundbeck Foundation’s Talent Prize for researchers under 30 years of age. These donations were part of a general growth in annual donations, which reached DKK 92 million in 2004.

The grants were raised substantially to DKK 222 million in 2005, and this rise continued until they surpassed DKK 500 million in 2011, after which the level was stabilised. The establishment of 15 Lundbeck Foundation Centres of Excellence between 2005 and 2009 was a contributory factor. Subsequently, the Foundation increased its focus on supporting young researchers, among other ways by establishing the Junior Group Leader Fellowships.

This development meant that there was a need to strengthen and professionalise the grants policy, and in 2002 the position of director of research was created, supplemented by an assistant head of research three years later.

An electronic application system was introduced in 2006, and in 2007 an scientific evaluation committee was established with a majority of external experts to ensure expert, impartial evaluation at the highest level.

Since 2011, the Brain Prize has also been awarded on the recommendation of an autonomous, international selection committee. Independence of both Lundbeck and the Lundbeck Foundation is further emphasised by the fact that the prize is awarded by an independent foundation with its own board.

The first award of the Brain Prize took place at the same time as another change in strategy in both the investment and the grants policy. As regards investments, in 2011 a new scheme was implemented in that the Foundation

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Overview of The Lundbeck Foundation

Lundbeck

70 %

Lundbeck Foundation Grants

Global leader

Annual grants of DKK 400-500

in brain disorders

million for research of the highest

Revenue DKK 13,468 million

international standard

Lundbeckfond Emerge ALK

42 % (69 %)

Global leader

From invention to commercialisation 2 portfolio companies

in allergy vaccines Revenue DKK 2,433 million Lundbeckfond Ventures Investment in life science companies 19 portfolio companies Falck

57 %

International leader in assistance and emergency

Lundbeckfond Invest

Revenue DKK 13,952 million

Portfolio investments in shares, bonds, etc.

Value: DKK 13,735 million

Note: Lundbeck Foundation owns 42% of the share capital and 69% of the votes in ALK after the deduction of treasury shares.

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began to a significantly higher degree to place its free funds in shares, loans and credits while simultaneously beginning to play a larger role in its asset management.

With respect to grants, the shift in strategy meant that from now on the Lundbeck Foundation granted three main types of research support: bottom-up projects upon submission of an application; support for young researchers; and strategic research projects. In 2012, yet another area was included: the communication of research and teaching. Finally, in 2012 the seed investment unit Lundbeckfond Emerge was created in the borderline area between grants and investment.

The Lundbeck Foundation’s investment and grants policy has undergone constant change in the course of the 60 years of the Foundation, and this will undoubtedly continue to be the case in the future. However, support for medical science remains the core of the grants policy, and has been the guiding principle ever since the first grants were made in 1962.

However, it is not just the Lundbeck Foundation that has changed; so has the surrounding world and its interest in the investment and grants activity of foundations. In recent years interest in research integrity has been growing both internationally and in Denmark, where in November 2014 the Ministry of Higher Education and Science published a Danish Code of Conduct for Research Integrity – Denmark’s first national guidelines for good scholarly practice.

The objective of a national code of conduct was and is to ensure credibility, integrity and thus quality in research through common principles and standards for good scholarly practice. The basic principles of the guidelines are honesty, transparency and accountability, and they include six standards for good scholarly practice in the fields of research planning and leadership, handling of data, publication and communication, authorship, research cooperation and conflicts of interest.

A consultation process had preceded this where the Lundbeck Foundation also submitted a response and expressed its support for the proposal and its intentions. The Lundbeck Foundation itself does not conduct research, but it already lived up to the guidelines on essentials, in the sense that in its grants policy it has emphasised that recipients of the donations

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should maintain high standards of scientific conduct. The Foundation is also completely open about its grants and who receives them. In its response, the Lundbeck Foundation also stated that mentioning the role and responsibility of external donors might be considered in order to increase transparency.

The code of conduct is not a legally binding document, but the intention was and is that it should provide a common basis for Danish research at universities and other research institutions, with the research council system, foundations and companies endorsing and implementing it, as the Lundbeck Foundation has also decided to do.

The Foundation’s business activities have also drawn increasing attention, not least in Denmark, where many foundations own companies. The focus of recent years on corporate governance has been combined with an increased awareness of good foundation leadership. In December 2012, this led to the publication of The report of the Commercial Foundation Committee on future regulation of commercial foundations. The report contains, among other things, a proposal for 16 specific “Recommendations for good foundation management”.

Following the report, in July 2013 the Ministry of Business and Growth issued a draft proposal for a new law on commercial foundations for consultation. The result was the adoption of a new Act on Commercial Foundations in June 2014. With inspiration from the recommendations on good leadership of companies, on October 1 2014 a committee was set up for good foundation governance. The committee has subsequently drawn up recommendations for good leadership of commercial foundations.

Neither the bill nor the recommendations have had any appreciable consequences for the Lundbeck Foundation as far as corporate governance is concerned, since the Foundation already meets the recommendations in all essentials. Since 2006, the Lundbeck Foundation has practised the recommendations concerning the composition of the board, the members’ competencies and regular evaluation etc. of these aspects. The same applies to the recommendations regarding the boards of the Foundation’s subsidiaries.

The Lundbeck Foundation also meets the recommendations to provide information about the individual remuneration of board members and manage-

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ment, just as any remuneration they may receive from other corresponding positions within the Group are disclosed.

The report of the Commercial Foundation Committee also deals with the issue of Corporate Social Responsibility, CSR, although no direct recommendations are made. Nevertheless, it is stressed that foundations that run commercial businesses should consider the UN’s 10 Global Compact Principles on human rights, employee rights, the environment and anti-corruption, suggestions with which the Lundbeck Foundation has already concurred.

Thus, the Lundbeck Foundation has kept abreast of developments with respect to good scientific practice in connection with its grants policy as well as good foundation leadership in general and in relation to its commercial activity. This position has been achieved not least with the past 10-15 years’ professionalisation of all the activities of the Foundation, but has deep roots in the Foundation’s 60-year history, during which the basis was laid for its present-day principles and practice.

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C H A I R S A N D M A N A G I N G D I R E C T O R S O F T H E L U N D B E C K F O U N D AT I O N

CHAIRS AND MANAGING DIRECTORS OF THE LUNDBECK FOUNDATION Chairs of the Board of Trustees Grete Lundbeck

4 March 1954 – 17 August 1965

Founder and life-long chair. Died 17 August 1965.

Erik Birger Christensen

20 September 1965 – 31 December 1973

Trust-deed appointed chairman, not elected.

Børge Sørensen

1 January 1974 – 23 March 1979

Trust-deed appointed chairman, not elected. Died 23 March 1979.

Aage Kann Rasmussen

7 May 1979 – 8 August 1979

Appointed ad interim until the next AGM.

Olaf Thrane

8 August 1979 – 27 April 1982

First elected chairman.

Per Søltoft

27 April 1982 – 13 May 1987

Niels Harboe

13 May 1987 – 4 June 1993

Torben Grandt

4 June 1993 – 1 June 1995

Sven Dyrløv Madsen

1 June 1995 – 27 November 2003

Died 27 November 2003.

Arne V. Jensen

11 December 2003 – 28 May 2008

Appointed ad interim and subsequently elected.

Mogens Bundgaard-Nielsen Mikael Rørth Jørgen Huno Rasmussen

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28 May 2008 – 30 May 2011 30 May 2011 – 2 May 2012 2 May 2012 –

T H E L U N D B E C K F O U N D AT I O N

Heads of management and managing directors of the Lundbeck Foundation The position as head of management of the Lundbeck Foundation was established when a new trust deed was adopted on April 28, 1964. The first time the position was filled was on September 20, 1965, when Erik Birger Christensen was appointed at the same time as he was elected chairman of the board. As far as can be judged, he had been a sort of functioning head of management since the foun-dation came into being.

Erik Birger Christensen

20 September 1965 – 31 December 1978

Holger Byfeldt

7 May 1979 – 30 June 1984

Hans Byfeldt

1 June 1984 – 23 February 1987

On February 23, 1987, the Board decided to immediately terminate cooperation with Hans Byfeldt

The position of head of management was then discontinued and a managing director was appointed instead:

Poul A. Christensen

15 May 1987 – 31 December 1999

Steen Hemmingsen

1 January 2000 – 31 May 2011

Christian Dyvig

1 June 2011 – 31 August 2014

Lene Skole

1 September 2014 –

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GRANTS TO THE LUNDBECK FOUNDATION’S CENTRES OF EXCELLENCE – STRATEGIC GRANTS

Project (project leader)

DKK million

Grant period(s)

Description

LUCENS -The Lundbeck Foundation

30 + 6 + 12

2005-2009,

The objective of the centre is to study the way in which the di-

Centre for Neurovascular Signaling.

2010,

ameter of blood vessels in the brain and the blood flow are regu-

(Professor Jes Olesen, Glostrup

2011-2012

lated by the nerves that end in the walls of the blood vessels.

These studies are carried out in experimental animal models

Hospital)

and in patients with migraine, strokes, and schizophrenia.

2005-2009,

The centre addresses fundamental issues concerning differ-

Centre for Integrated Molecular

2010,

ences in behaviour and personality in healthy human beings by

Brain Imaging. (Professor Gitte

2011-2015

coupling knowledge from advanced brain scans with markers

CIMBI - The Lundbeck Foundation

40 + 8 + 32

Moos Knudsen, Copenhagen Uni-

for genetic and biochemical matters and psychological meas-

versity Hospital)

urements of behaviour and personality. The projects have perspectives that overlap with psychiatry.

2005-2009,

This is a basic research centre that focuses on two new

Centre for Membrane-receptors in

2010,

protein substances. The protein substances are found in the

Neuronal Disease. (Professor An-

2011-2015

nerve cell membranes of the human brain, and are involved in

MIND - The Lundbeck Foundation

50 + 10 + 40

ders Nykjær and Professor Claus

a number of functions of great importance for, among other

Munck Petersen, Aarhus University)

things, nerve cell survival, our perception of pain, and the development of nerve cell death in connection with nerve damage and Alzheimer’s disease.

CAMD - The Lundbeck Foundation

25

2006-2010

The centre forms the framework of international research col-

Centre for Atomic-scale Materials

laboration aimed at developing the theories and computer pro-

Design. (Professor Jens K. Nørskov,

grams that will make it possible to predict how a material must

DTU (Now Stanford University))

be built up atom by atom to have certain properties. The objective is to be able to design materials with certain properties based on a quantum physics description of their smallest components.

LCTC - The Lundbeck Foundation

20

2006-2010

The work of the Lundbeck Foundation Centre is linked to the

Centre for Theoretical Chemistry.

theoretical and experimental activities of recent years in the

(Professor Poul Jørgensen, Aarhus

field of control, design, and applications of atoms at a funda-

University)

mental quantum physics level.

LCT - The Lundbeck Foundation

20

2006-2010

The objective of the centre’s research is to develop quantum

Theoretical Centre for Quantum

mechanical theories and methods of calculation that can be ap-

System Research. (Professor Klaus

plied to both large and small molecular systems.

Mølmer, Aarhus University)

180

T H E L U N D B E C K F O U N D AT I O N

Project (project leader)

DKK million

Grant period(s)

Description

LUCAMP - The Lundbeck Founda-

60

2007-2011

The centre unites three leading research groups from Steno

tion Centre for Applied Medical

Diabetes Center in Gentofte and three Danish universities with

Genomics in Personalized Disease

three leading researchers from the Beijing Genomics Institute.

Protection. (Professor Oluf Borbye

The objective is to map “programming faults” in the human ge-

Pedersen, University of Copenha-

nome, which in the long term, can contribute to the prevention

gen)

and better treatment of early-onset cardiovascular disease.

20

2007-2011

COPSAC studies the connections between inheritance, environ-

COPSAC - The Lundbeck Founda-

ment, and asthma as well as allergy and eczema. One of the is-

tion Centre for Copenhagen Studies

sues studied is the question of whether special bacteria in in-

on Asthma in Childhood. (Professor

fants’ respitory tracts can play a part in triggering asthma, and

Hans Bisgaard, University of Copen-

whether the bacteria could be combatted with probiotics, e.g.

hagen)

ordinary lactic acid bacteria.

20

2007-2011

CETAME studies molecular markers in the large cancer diagno-

CETAME - The Lundbeck Founda-

ses: bladder cancer, colon cancer, lung cancer, prostate cancer,

tion Centre for Translational Medi-

and breast cancer. In the long-term, the marker profile of the in-

cine. (Professor Torben Ørntoft, Aar-

dividual cancer patient could contribute to more individualised

hus University)

cancer treatments and patient guidance.

30,5 + 30

CINS - The Lundbeck Foundation

2008-2012 &

CINS is a multi-disciplinary research centre, the main objective

2013-2017

of which is to contribute knowledge that, in the long term, could

Centre for Clinical Intervention and

lead to better, more targeted treatment of schizophrenia. This is

Neuropsychiatric Schizophrenia Re-

achieved inter alia by mapping the connection between distur-

search. (Professor Birte Glenthøj,

bances in activity in three of the brain’s transmitter systems in

Copenhagen University Hospital)

patients with schizophrenia.

34,6

2008-2012

Research at the centre focuses on fast-track patient recovery

Fast Track - The Lundbeck Founda-

following hip and knee replacement. There is specific focus on

tion Centre for Fast-Track Pain and

optimising pain management, the patient’s need for blood trans-

Risk Free Hip and Knee Arthro-

fusion, the effect of physiotherapy, the best possible treatment

plasty. (Clinical Professor Henrik

to prevent blood clots, and monitoring patient safety. The target

Kehlet, University of Copenhagen

is to reduce hospitalisation for hip and knee replacement sur-

and Clinical Professor Kjeld Søballe,

gery to 1-2- days while simultaneously improving patient satis-

Aarhus University)

faction and reducing the number of complications.

181

G R A N T S T O T H E L U N D B E C K F O U N D AT I O N ’ S C E N T R E S O F E X C E L L E N C E – S T R AT E G I C G R A N T S

Project (project leader)

DKK million

Grant period(s)

Description

CIRRO - The Lundbeck Foundation

29,9

2008-2012

The focus of the project is to establish a national platform for

Centre for Interventional Research

research in the use of radiotherapy to treat cancer patients. The

in Radiation Oncology. (Professor

centre is responsible for unifying all Danish cancer departments

Jens Overgaard and Clinical Profes-

giving radiotherapy in order for large-scale trials of new forms of

sor Cai Grau, both of Aarhus Univer-

treatment to be set up and to make the implementation of new,

sity)

project-based forms of treatment uniform in all departments

NanoCan - The Lundbeck Founda-

35

2009-2013

The research conducted at the centre combines experts in the

tion Nanomedicine Research for

fields of nanotechnology, molecular biology, cancer and stem cell

Cancer Stem Cell Targeting Thera-

research. The main objective of the centre is to develop intelligent

peutics. (Professor Jan Mollen-

nanopharmaceuticals to treat breast cancer by creating treatment

hauer, University of Southern Den-

specifically aimed at cancer stem cells. The nanopharmaceuticals

mark)

should be able to register if a cell is a cancer stem cell or a normal tissue stem cell and be able to kill the cancer stem cells.

CBN - The Lundbeck Foundation

34

2009-2013

The centre studies the basic biological processes that take

Centre for Biomembranes in Nano-

place in the outer barrier of the cell, the cell membrane, and that

medicine. (Professor Ulrik Gether

forms the basis of the ability of cells to communicate with each

and Associate Professor Dimitrios

other when chemical signals are transferred. In this connection,

Stamou, both of the University of

new nanoscale technologies are examined for studying the

Copenhagen)

membrane processes down to the level of the single molecule.

30

2009-2013

The key hypothesis of the centre is that cardiovascular diseases

LUNA - The Lundbeck Foundation

and diseases of the musculoskeletal system are due to an im-

Nanomedicine Centre for Individual-

balance between the tissue damage caused by illness and the

ized Management of Tissue Damage

body’s natural ability to repair or regenerate tissue that has

and Regeneration. (Professor Allan

been destroyed. The objective of the centre is to establish the

Flybjerg and Professor Jørgen

key mechanisms causing the diseases and develop techniques

Kjems, both of Aarhus University)

that can re-establish this balance and stimulate tissue repair.

ContAct - Mapping, Modulation

25

2010-2014

The project maps information processing in the human brain

& Modeling the Control of Actions.

when devising, planning and performing a certain action such

(Professor Hartwig Siebner,

as writing an email. This makes it possible to study how dis-

Hvidovre Hospital)

eases such as Parkinson’s and apoplexy disturb information processing in the brain.

TCSTST - Targeting cerebrovascular

25

2010-2014

The main focus of the centre is to study how signals from re-

signal transduction in stroke treat-

ceptors in the blood vessels of the brain can be blocked in order

ment. (Professor Lars Edvinsson,

to improve brain blood flow and reduce the extent of brain dam-

Glostrup Hospital)

age following a stroke.

182

T H E L U N D B E C K F O U N D AT I O N

Project (project leader)

DKK million

Grant period(s)

Description

iPSYCH - The Lundbeck Foundation

121 + 120

2012-2014 &

The centre forms the framework for collaboration between,

2015-2017

among others, the State Serum Institute (SSI), Beijing Genomics

Initiative for Integrative Psychiatric Research. (Professor Preben Bo

Institute, deCode Genetics from Iceland, and the Faroese bio-

Mortensen, Aarhus University)

bank. The biological disease mechanisms behind the development of mental illness are identified in the project, and with this new knowledge, iPSYCH will contribute to the basis for better treatment and prevention of grave mental disorders.

EMBL/DANDRITE - The Danish Re-

60

2013-2017

The focus of the project is the brain circuitries that are impor-

search Institute of Translational

tant for human life processes and especially for neurological

Neuroscience. (Professor Poul Nis-

and psychiatric disorders. A particular focus of the research is

sen, Aarhus University)

how patterns arise in communication between the units of the brain, what goes wrong in the communication in case of sickness, and how pharmaceuticals and methods of treatment that will benefit patients can be developed.

RESCUeH. (Professor Bent Nielsen

44

2013-2017

The centre focuses on alcohol dependency and non-medical

and Project Director Anette Søgaard

treatment of alcohol abuse. Approximately 140,000 Danes are

Nielsen, University of Southern Den-

dependent on alcohol, but only 7,000-10,000 are undergoing

mark)

treatment during any one year. At the same time, the rate of relapse is high among those who complete treatment. The objective of the centre is to develop and describe evidence-based, non-medical methods of treatment for this group of patients.

MEPRICA - Mental Health in Pri-

16

2013-2017

The objective of the centre is to study the diagnosis and treat-

mary Care, (Professor Mogens Vest-

ment that patients with simultaneous physical and mental dis-

ergaard, Aarhus University)

orders receive from their general practitioner – and to develop methods to improve the treatment of physical illness in this group of patients. Physical illnesses are often undertreated when they occur together with mental disorders. Three out of four patients with depression, anxiety, or grave mental illness also suffer from one or more physical illnesses such as diabetes, asthma, or hypertension.

BBB - Blood-Brain-Barrier. (Clinical

40

2014-2016

The aim of the project is to increase basic knowledge about how

Professor Martin Lauritzen, Univer-

the blood-brain-barrier functions and is affected. At the same time,

sity of Copenhagen)

the focus is on finding transport routes for pharmaceuticals through the blood-brain-barrier. The barrier protects the brain so effectively that it is a problem to get pharmaceuticals in when treating e.g. brain cancer, dementia, or Parkinson’s. 95 percent of all tested pharmaceutical substances for treating disorders in the brain fail because they cannot pass the blood-brain-barrier.

183

G R A N T S T O T H E L U N D B E C K F O U N D AT I O N ’ S C E N T R E S O F E X C E L L E N C E – S T R AT E G I C G R A N T S

Project (project leader)

DKK million

Grant period(s)

Description

DanFunD - The Danish Study on

11,5

2013-2017

The project is a population study focusing on identifying the bi-

Functional Somatic Disorders. (Clin-

ological causes of functional disorders, e.g. disorders such as

ical Professor Torben Jørgensen,

chronic pain (fibromyalgia), chronic fatigue syndrome, chronic

Glostrup Hospital)

whiplash pain, irritated colon, and sensitivity to odours and chemicals. Among other things, the project is to discover the reasons why so many people develop disorders caused by chronic pain and tiredness

PROCRIN. (Clinical Professor Henrik

25

2015-2016

The objective of PROCRIN is to raise the quality of patient treat-

Toft Sørensen, Aarhus University

ment and safety in Denmark by establishing a national infra-

and managing director Adam Wolf,

structure programme with the aim of strengthening Danish clini-

Danish Regions)

cal research and supporting the increased use of health data in the clinic, inter alia by increasing the quality of reported clinical data. There will also be a focus on data accessibility for researchers with approved research projects.

RIMMI - Regional Immune Modula-

45

2014-2018

The objective of the project is to map the immunological

tion of Mucosal Inflammation. (Pro-

mechanisms that take place in the bowel in connection with

fessor William Agace, the Technical

colitis ulcerosa and Crohn’s disease. The project will identify

University of Denmark)

the immunological processes that start the diseases and the processes that play a part in maintaining them, in animals and humans. A detailed understanding of this will create the possibility of developing medicine that can act at local level in the bowel and thereby avoid interfering with the body’s general immune system.

184

R E C I P I E N T S O F T H E L U N D B E C K F O U N D AT I O N A N N U A L R E S E A R C H P R I Z E

RECIPIENTS OF THE LUNDBECK FOUNDATION ANNUAL RESEARCH PRIZE The P.V. Petersen Prize 1987:

Direktor P.V. Petersen, MSc

1988:

Professor Mogens Schou, MD, Dr. h.c.

1989:

Professor Povl Krogsgaard-Larsen, D.Pharm.

1990:

Professor Erik Strömgren, MD, Dr.Sc.

1991:

Professor Lars-Inge Larsson, MD

1992:

No award was made

1993:

Professor Carl-Gerhard Gottfries, MD

From 1994, the title of the prize was changed to the Lundbeck Foundation Research Prize 1994: Research Professor, chief physician Niels A. Lassen, MD, Dr.Scient. and h.c.

1995:

Professor Arvid Carlsson, MD h.c., D.Pharm. h.c., p.p.

1996:

Professor Per Andersen, MD

1997:

Professor Peter E. Nielsen, Dr.Sc.

1998:

Professor Thue W. Schwartz, MD

1999:

Professor Lars Farde, MD

2000:

Professor Karl Anker Jørgensen, Dr.Sc.

From 2001, the title of the prize was changed to the Lundbeck Foundation Nordic Research Prize 2001:

Professor Keld Danø, MD

2002:

Professor Kari Alitalo, MD, PhD

2003:

Professor, chief physician, Olaf Paulson, MD

2004:

Professor Matthias Mann, PhD

2005: Professor Ole Petter Ottersen, PhD and Professor Jon Storm-Mathiesen, PhD

186

2006:

Professor Jens F. Rehfeld, MD, Dr.Sc.

2007:

Professor Anders Björklund, MD, Dr. h.c.

2008:

Professor, chief physician Niels Erik Skakkebæk, MD

2009:

Professor Mart Saarma, PhD

2010:

Professor Jes Olesen, MD

T H E L U N D B E C K F O U N D AT I O N

After 2010, the Lundbeck Foundation Nordic Research Prize ceased to be awarded. It was replaced by a new prize, The Brain Prize, which was awarded for the first time in 2011: 2011: Professor György Buzsáki, Director Péter Somogyi and Director Tamás Freund 2012:

Professor Christine Petit and Professor Karen Steel

2013: Professor Ernst Bamberg, Professor Edward Boyden, Professor Karl Deisseroth, Professor Peter Hegemann, Professor Gero Miesenböck and Professor Georg Nagel 2014: Professor Stanislas Dehaene, Professor Giacomo Rizzolatti and Professor Trevor Robbins

187

INDEX OF NAMES

INDEX OF NAMES

A

E

Agace, William 160

Ebbesen, Peter 49

Agger, Mette Kirstine 128-29

Ehlers, Knud 20, 25, 31, 43, 54

Andersen, Thorkild 140

Elling, Christian E. 162

Antorini, Christine 165

Engel, Anne-Marie 139, 145-46

Arnt, Jørn 91

Engel, Steen 44, 80

Ashina, Messoud 161 Askgaard Olsen, C.E. 42

F

Axelsen, Nils 61, 97-98, 100-101, 125,

Falck Hansen, Jacob 138

142-43

Fejerskov, Ole 141 Fog, Rasmus 66

B

From, Bertil 127, 131

Barkat, Tania Rinaldi 147

Frøkjær, Jørgen 143

Bech Hansen, Egon 92

Frøkjær, Sven 161

Birch Sørensen, Peter 69, 71 Bjerre-Nielsen, Søren 97

G

Bjerrum, Jannik 31-31, 60

Goldschmidt, Eduard 11-13, 15, 17

Bjørklund, Anders 143

Goldschmidt, Helia 11, 13-15, 20-21, 23

Bols, Mikael 137

Goldschmidt, Svenn-Erik 20-21

Bruun, Kirsten 56

Gordon, Pontus 147

Bundgaard, Hans 62,66

Grandt, Torben 60, 79-80, 85-86, 97-98, 100,

Bundgaard-Nielsen, Mogens 132, 143, 145,

124

147, 150, 153

Gravesen, Suzanne 38

Busekist, Torben 70 Buus Larsen, Jørgen 86

H

Byfeldt, Hans 56,61

Hafeli, Urs 161

Byfeldt, Holger 20, 38-39, 43, 53, 56

Hamburger, Bertil 143 Hansen, Thorsten 147

C

Harboe, Gunnar 82, 170

Carlsson, Arvid 34, 103

Harboe, Niels 39, 42, 44, 56, 58, 60-63, 65-67,

Christensen, A.V. 62

69, 76, 78-86, 94, 97, 102, 124, 170

Christensen, Erik Birger 11, 13-18, 20-25,

Hemmingsen, Steen 117-119, 122, 125, 127,

29-32, 35-38, 48, 50, 168

131, 133-35, 139, 141, 145, 153-54

Christensen, Poul A. 61, 79, 81

Hertz, Henrik 73, 86, 94, 98, 100, 104, 139, 142

188

D

Holst, John 60

Dybdahl, Vagn 50

Hougaard Jensen, Svend Erik 71

Dyrløv Madsen, Sven 59, 82-84, 87-88, 95,

Hulgaard, Linda 70

98, 101, 109-10, 122-24

Huno Rasmussen, Jørgen 153

Dyvig, Christian 122, 153-54

Hvidberg, Eigill 47

T H E L U N D B E C K F O U N D AT I O N

Hübner, Oluf 48

M

Hyttel, John 91

Madsen, Robert 137 Margrethe II, Queen 148, 157

J

Meedom, Tove 47

Jensen, Arne V. 61, 79-80, 85-86, 88, 95, 97,

Moos Knudsen, Gitte 143

100-101, 108-109, 121-25, 127, 141-42, 147

Munck Petersen, Claus 143

Jensen, Niels A. 104

Müller, Jørn 103

Juhl, Erik 139-40, 150

Møller, Erna 141

Juhl Nielsen, Erling 98

Møller Pedersen, Kjeld 71

Jørgensen, Karl Anker 137

Møllgård, Kjeld 104

Jørgensen, Poul 144

Mølmer, Klaus 144

K

N

Kann Rasmussen, A. 20, 31-32, 35, 42-43,

Nansen, Peter 64, 66

51-52, 56

Nielsen, Søren 138

Kessing, Lars V. 137

Nielsen, Søren Bo 71

Knudsen, Bjarne 39-40

Nielsen, Torben 60, 75, 93-93, 100

Komolov, Alexei 138

Norn, Svend 37, 48

Krarup, Thorleif 125, 134, 154

Nowotny, Helga 151

Krogsgaard-Larsen, Povl 62, 70, 101-104

Nykjær, Anders 143 Nyrop, Johan 35

L

Nyrop, Martin 51

Larsen, Jens 48

Nässberger, Lennart 103

Larsen, Torben 71

Nørregaard Jensen, Ole 137

Larsson, Lars-Inge 64

Nørregård-Nielsen, Hans Edvard 103

Lassen, Jeanette 93-94, 100

Nørskov, Jens Kehlet 144

Lassen, Niels A. 63-66, 103 Laursen, Karsten 70

O

Lidegaard, Øjvind 71

Olesen, Jes 143

Lind, Peter 92

Olrik, Helle 38-40

Lindeløv, Flemming 128

Oppenhejm, Kaj Seth 11, 15, 21, 30, 35

Lindved Hansen, Torben 71

Ottersen, Ole Petter 143

Linnemann, Dorte 91-92 Lund, Flemming 49

P

Lund, Henriette 60

Paulsen, Olaf B. 104

Lundbeck, Grete 11-22, 30, 52, 59, 66, 167

Penkowa, Milena 138

Lundbeck, Hans 11-12

Petersen, Ole William 143

Lundtorp, Svend 71

Petersen, P.V. 13, 33, 49, 62, 66

Løwenstein, Henning 36-40, 48, 92

Petersen, Troels 163

189

INDEX OF NAMES

Petit, Christine 148

Wolf, Adam 160

Pless, Stephan 147

Worning, Jørgen 123-25

R

Z

Rafaelsen, Ole 49

Zeuthen, Hans 70

Ravn, Jørgen 54

Zimmer Rasmussen, Jens 92

Rold Andersen, Bent 69, 71 Rosing, Minik 163

Ø

Rørth, Mikael 140, 143, 153, 155

Østergaard, Morten 164

S

Å

Scheele, Marianne 70

Aamund, Asger 86

Schiørring, Ole 20-21, 23 Schmidt, Viggo 35 Sherson, Jacob 147 Sjöström, Hans 92 Skole, Lene 155-56 Skov, Per Stahl 37, 48 Snorrason, Egill 50 Sprunk-Jansen, Erik 97, 107-108 Steel, Karen 148 Steensen, Jens Peter 71 Steiness, Eva 95-99, 102 Søgaard Larsen, Allan 133-34 Søltoft, Per 32, 42-43, 56, 58, 61-64, 124 Sørensen, Børge 15, 18, 20, 25, 30-32, 39, 42, 50, 55 Sørensen, Chr. 11, 15 T Thrane, Olaf 42, 48, 52 Thueslev, Hans 50-51 Toft Sørensen, Henrik 160 U Uldall-Hansen, Annelise 44, 79 Ungerstedt, Urban 62 W Weeke, Bent 36-38, 40, 47-49, 64 Wellendorph, Petrine 147 Wiborg, Ove 104 Willerslev, Eske 160, 163 Wold-Olsen, Per 128

190

NOTES

NOTES This presentation is primarily based on sources from the archives of the Lundbeck Foundation and H. Lundbeck A/S. The notes contain references to other material.

CHAPTER 1

CHAPTER 2

1. The trust deed of the Lundbeck Founda-

1. Ibid., June 29 1969.

tion of December 29 1956.

2. The minutes of the Lundbeck Foundation’s Board of Trustees, March 5 1957.

2. Ibid., June 15 and December 21 1970.

3. Ibid., June 25 and May 27 1975.

4. Ibid., July 19 1971.

3. Ibid.

5. Ibid.

4. Ibid., November 19 1958.

6. Ibid.

5. Ibid., December 8 1958.

7. Ibid., July 2 1975.

6. Ibid., July 4 1962 and April 23 1963.

8. The minutes of the Lundbeck Board of

7. Ibid.

8. Ibid., April 23 1963 and April 28 1964.

9. Ibid., April 23 1963.

10. Ibid., April 28 1964 and the trust deed of

Trustees, June 25 1971.

9. Ibid., June 23 and November 22 1973 and June 11 1974.

10. Ibid., July 2 1975.

the Lundbeck Foundation of April 28

11. Ibid.

1964.

12. Ibid.

11. Ibid., and December 2 1968.

13. Ibid.

12. Ibid., September 20 1965.

14. Statement in ibid, March 4 1976.

13. Ibid., May 12 1966.

15. Ibid., May 31 1976.

14. Ibid.

16. Ibid., May 27 and December 11 1975.

15. Ibid., March 7 1967.

17. Ibid., July 9 1973.

16. Ibid., and June 6 1967.

18. Ibid., June 11 1974.

17. Ibid.

19. Ibid.

18. Ibid., October 16 1967.

20. Ibid., June 23 1973 and March 29 1974.

19. Ibid.

21. Ibid., March 29 and December 6 1974

20. Ibid.

and January 17 1975.

21. Ibid., November 28 1967.

22. Ibid., May 27 December 11 1975.

22. Ibid., May 30 1968.

23. Ibid., December 11 1975

23. The minutes of Fabrikant Edward Gold-

24. Ibid., and March 4 1976.

schmidts Fond, December 22 1967.

24. The minutes of the Lundbeck Founda-

25. For details about ALK’s history, cf. Kurt Jacobsen: Fra Gåsefjer til GRAZAX® –

tion’s Board of Trustees, December 2

Historien om ALK (From goose feathers

1968.

to GRAZAX®. The history of ALK)

25. Ibid. and balance sheet of Foundation I and Foundation II and of total Foundations.

(2008). Lundbeck’s ownership is described p. 65-72.

26. The minutes of the Lundbeck Foundation’s Board of Trustees, December 10 1976.

192

T H E L U N D B E C K F O U N D AT I O N

27. Ibid., February 9 1977.

28. Ibid., May 27 1977.

3. Ibid., September 20 1973 and March 29 1974.

29. Ibid., December 13 1977.

4. Ibid., December 6 1974.

30. Ibid.

5. Ibid., October 9 1975.

31. Bjarne Knudsen: Upublicerede erin-

6. Ibid., March 4, May 6, May 31 and De-

dringer. Kapitel 3. Dr. Bent Weeke – ALK,

cember 10 1976.

Diagnoselaboratoriet A/S og Lundbeck-

7. Ibid., May 6 and 31 1976.

fonden, (Unpublished memoirs. Chapter

8. Ibid., December 4 1974 and January 10

3. Dr. Bent Weeke – ALK, the Diagnosis

1975.

Laboratory A/S and the Lundbeck Foun-

9. Ibid.

dation), p. 30ff.

10. Ibid., December 12 1975, March 3, May

32. The minutes of the Lundbeck Foundation’s Board of Trustees, July 7 1978.

6 and December 10 1976.

11. Ibid., March 4 and December 10 1976.

33. Ibid.

12. Ibid., June 22 1979.

34. Ibid., December 11 1978.

13. Ibid., March 9 1974 and December 10

35. Bjarne Knudsen: Upublicerede erindringer. Kapitel 3. Dr. Bent Weeke – ALK, Diagnoselaboratoriet A/S og Lundbeck-

1976.

14. Ibid., June 11 1974, June 26 and October 11 1975.

fonden, (Unpublished memoirs. Chapter

15. Ibid., December 11 1975.

3. Dr. Bent Weeke – ALK, The Diagnosis

16. Made up in accordance with state-

Laboratory A/S and the Lundbeck Foun-

ments in the minute book. The state-

dation), p. 54.

ment and the point of time at which the

36. The minutes of the Lundbeck Founda-

donations were decided are not always

tion’s Board of Trustees, May 7 and 8

in agreement, as in a number of cases

August 1979.

the latter were only “announced” the fol-

37. Ibid., June 22 1979.

38. Ibid.

39. Ibid., August 8 1979.

40. Ibid., October 16 1979.

lowing year.

17. Ibid., December 6 1974 and January 17 1975.

18. Ibid., July 7 1978. Details of the individual projects appear in the minutes from

CHAPTER 3 1. Ibid., June 23 1973.

2. Ibid., September 20 1973 and June 27

1977, where the applications are referred to briefly.

19. Ibid., July 7 1978.

1974. In the trust deed, Grete Lundbeck

20. Ibid., August 8 1979.

had prioritised acquiring a property to

21. Ibid.

be used for free residences for former

22. Ibid., July 7 1978.

employees or their surviving spouses,

23. Ibid., May 7 1979 and April 21 1980.

but potentially adverse tax repercus-

24. Ibid., April 21 1980.

sions and the lack of an established

25. Ibid., May 20 1981.

need caused the Foundation instead, in

26. Ibid., April 27 1982.

the first instance to place a sum

27. Ibid., May 13 1983.

amounting to DKK 20,000 at disposal

28. Ibid., May 13 1987.

for rent assistance in portions of DKK

29. Ibid., January 21 1986.

1,000 each.

30. Ibid., January 21 and March 18 1986.

193

NOTES

31. Ibid., February 23 and May 13 1987.

CHAPTER 4

32. Ibid.

1. The minutes of the Lundbeck Founda-

33. Ibid., February 27 1984.

34. Ibid., January 21 1986.

tion’s Board of Trustees, October 2 1987.

35. Ibid., May 13 1987.

2. Ibid., December 16 1987.

36. Ibid.

3. Ibid.

37. Ibid., February 16 1983 and March 26

4. Ibid., September 5 1984.

1985.

5. Ibid., February 13 and May 13 1987.

38. Ibid., May 14 1985.

6. Ibid., October 2 1987.

39. Ibid., October 2 1987.

7. Ibid., December 16 1987 and March 23

40. Ibid., June 8 1988.

1988.

41. Ibid.

8. Ibid., June 8 1988.

42. Ibid., September 13 1988.

9. Ibid., September 13 1988.

43. Ibid., June 7 1989.

10. Ibid., December 14 1988.

44. Stated by Niels A. Lassen’s successor,

11. Ibid., March 6 1989.

chief physician Lars Friberg, dr. med.,

12. Ibid., June 7 1989.

in an e-mail dated May 8 2014.

13. Ibid., December 6 1989.

45. The Lundbeck Foundation’s Annual Report 1987. The following is based on this.

46. Ibid.

47. Ibid.

14. The respective annual reports. Shares and bonds are stated at acquisition cost.

15. The minutes of the Lundbeck Foundation’s Board of Trustees, March 20 1990.

48. Ibid.

16. Ibid., May 11 1989.

49. The minutes of the Lundbeck Founda-

17. Ibid.

tion’s Board of Trustees, December 16

18. Ibid.

1987.

19. Ibid., September 12 1989.

50. The Lundbeck Foundation’s Annual Report 1988.

20. Ibid.

21. It was a prerequisite that the Lundbeck

51. Ibid1989.

Foundation and the bequest as well as

52. The minutes of the Lundbeck Founda-

companies controlled by the Lundbeck

tion’s Board of Trustees, October 2

Foundation were covered by the regula-

1987.

tions on a par with Chr. Hansen de-

53. Ibid.

scendants and foundations named in

54. Ibid., September 13 1988. The Lundbeck

the regulation in connection with the

Foundation’s Annual Report 1988 and 1989.

55. Ibid., May 11 1989 and the Lundbeck Foundation’s Annual Report 1990.

56. Relevant annual reports. There is no in-

purchase of shares. Ibid.

22. Ibid., September 25 and October 6 1989.

23. Ibid.

24. Berlingske Tidende, October 19 1989.

25. Ibid.

formation as to whether there were no

26. Ibid.

responses in 1966 or whether those that

27. Ibid.

were received were not found worthy of

28. The minutes of the Lundbeck Founda-

support.

tion’s Board of Trustees, June 13 and December 7 1990.

194

T H E L U N D B E C K F O U N D AT I O N

29. Ibid., December 7 1990, April 2 1993 and June 16 1997. Relations between ATP and LD on the one hand and the

3. Lundbeck Foundation’s Annual Report 1990.

4. Ibid. The minutes of the Lundbeck Foun-

Lundbeck Foundation on the other ran

dation’s Board of Trustees, March 15

into problems when the Foundation

1991. However, only these three projects

had taken over control of Chr. Hansen.

are mentioned in the annual report in

The point of contention does not ap-

connection with Lundbeck.

pear in the minutes, but negotiations

5. Ibid.

reached an impasse and dragged out,

6. Ibid.

which can be followed in the minutes

7. Ibid. and the minutes of the Lundbeck

of the board of the Lundbeck Foundation. On September 23 1991 the board was informed that the negotiations had been “suspended”. Ibid., September 23 1991.

30. Lundbeck Foundation’s Annual Report 1989.

31. The minutes of the board of the Lundbeck Foundation, March 15 1991.

Foundation’s Board of Trustees, March 20 and September 21 1991.

8. The minutes of the Lundbeck Foundation’s Board of Trustees, October 10 1991.

9. Ibid., December 16 1991 and December 4 1992.

10. Ibid., October 10 and December 16 1991.

32. Ibid.

11. Ibid., December 16 1991.

33. Ibid., May 22 1991. It appears from ibid.,

12. Ibid., March 30 1992.

October 10 1991 that an initial public of-

13. Ibid., September 4 1992.

fering was intended for BIODAN.

14. Ibid.

34. Ibid.

15. Ibid.

35. Ibid., June 13 1991.

16. Ibid., June 9 and September 4 1992.

36. Ibid., October 10 and December 16

17. Ibid.

1991.

18. Ibid., December 4 1992.

37. Ibid.

19. Ibid.

38. Ibid.

20. Ibid., April 2 1993.

39. Ibid., June 4 1993.

21. Ibid., September 7 1993.

40. Ibid., December 16 1993 and June 1

22. Ibid.

1995.

23. Ibid., December 4 1992.

41. Ibid., September 7 1993.

24. Ibid., December 16 1993.

42. Ibid., September 1 1995.

25. Ibid. and Lundbeck Foundation’s Annual

43. Ibid., March 17 1995.

44. Ibid., June 1 1995.

45. Ibid., and September 1 1995.

46. Ibid.

Report 1993.

26. The minutes of the Lundbeck Foundation’s Board of Trustees, June 1 1995.

27. Ibid.

28. Ibid.

CHAPTER 5

29. Ibid., December 4 1992 and April 2 1993.

1. Lundbeck Foundation’s Annual Report

30. Ibid., June 4 1993.

1989.

2. The minutes of the Lundbeck Foundation’s Board of Trustees, March 20 1990.

31. Lundbeck Foundation’s Annual Report 1993.

32. Ibid.

195

NOTES

33. Ibid. 1994.

16. Ibid.

34. Ibid. 1995 and 1996.

17. Joint meeting of the boards of Lund-

35. Ibid. 1997.

36. The minutes of the Lundbeck Foundation’s Board of Trustees, June 16 1997.

37. Ibid.

38. Lundbeck Foundation’s Annual Report 1998.

beck and the Lundbeck Foundation, May 27 1999.

18. Ibid.

19. The minutes of Lundbeck Board of Trustees, June 17 1999.

20. The minutes of the Lundbeck Foundation’s Board of Trustees, June 18 1999.

CHAPTER 6

21. Ibid.

1. The minutes of the Lundbeck Board of Trustees, February 2 1998. The minutes

CHAPTER 7

of the Lundbeck Foundation’s Board of

1. The minutes of the Lundbeck Founda-

Trustees, February 27 1998.

2. Appears inter alia from the minutes of

1999.

Lundbeck Board of Trustees, August 25

2. Ibid. and December 8 1999.

1994.

3. Ibid.

3. The minutes of the Lundbeck Founda-

4. Ibid., May 29 2002.

tion’s Board of Trustees, December 4

5. Ibid., March 30 and October 2 2001.

1992.

6. The Lundbeck Foundation’s Annual Re-

4. The minutes of the Lundbeck Founda-

port 1999.

tion’s Board of Trustees, March 17

7. Ibid.

1995. The minutes of Lundbeck Board

8. Ibid.

of Trustees, March 27 1995.

9. Ibid.

5. The minutes of the Lundbeck Foundation’s Board of Trustees, September 8 1997.

6. Ibid.

7. Ibid.

8. The minutes of the Lundbeck Foundation’s Board of Trustees, December 4 1997. Lundbeck board minutes, December 22 1997.

9. Lundbeck board minutes, February 2 1998.

10. Ibid.

11. The trust deed of the Lundbeck Foundation.

12. The Lundbeck Foundation’s Annual Report 1999.

13. The minutes of the Lundbeck Foundation’s Board of Trustees, September 12 2000.

14. LFI minute book, August 30 2001.

15. Ibid., April 2, May 29 and September 20 2002.

10. Ibid., August 14 1998.

16. Ibid., November 7 2002.

11. Ibid., November 24 1998.

17. Ibid., November 16 2002.

12. Ibid., August 14 and November 24 1998,

18. Ibid., February 27 2003.

including annexes. Lundbeck Annual

19. Ibid., December 11 2003.

Report 1998.

20. The minutes of the Lundbeck Founda-

13. Lundbeck board minutes, September 23 1996. Lundbeck Annual Report 1998.

196

tion’s Board of Trustees, November 23

tion’s Board of Trustees, February 2 2004.

14. Ibid., February 8 1999.

21. Ibid.

15. Ibid., March 22 1999.

22. LFI minute book, March 17 2004.

T H E L U N D B E C K F O U N D AT I O N

23. The minutes of the Lundbeck Foundation’s Board of Trustees, strategy semi-

46. Ibid.

47. Børsen, April 29 2011.

nar August 18-19 2004.

24. LFI minute book, September 23 2004.

CHAPTER 8

25. Ibid.

1. The decision was made when the Re-

26. Ibid., May 26 2005.

search Professorship, which the Foun-

27. Ibid.

dation had granted in 1997, finally was

28. The Lundbeck Foundation’s Annual Re-

filled in March 1999. Lundbeck Founda-

port 2001, 2002 and 2003 Annual Review 2004/05.

29. The Lundbeck Foundation’s Annual Review 2005/06.

30. Ibid. 2006/2007.

31. The minutes of the Lundbeck Foundation’s Board of Trustees, strategy seminar August 18-19 2004.

32. Lundbeck Foundation’s Annual Review 2006/07 and 2007/08.

33. The latter was briefly discussed at the

tion’s Annual Report 1999.

2. The minutes of the Lundbeck Foundation Board of Trustees, September 12 2000. Lundbeck Foundation’s Annual Report 1999.

3. Ibid.

4. Lundbeck Foundation’s Annual Report 2000 and 2001.

5. Ibid. 2002.

6. Ibid. 2001.

7. The minutes of the Lundbeck Founda-

Lundbeck Foundation strategy seminar,

tion Board of Trustees, May 29 2002.

4-5 September 2007.

Lundbeck Foundation Annual Report

34. Lundbeck Foundation’s Annual Review 2006/07.

35. Ibid.

36. Lundbeck Foundation’s Annual Review 2007/08 and 2008/09.

37. LFI minute book, December 11 2008.

Lundbeck Foundation’s Annual Review 2009/10.

38. Lundbeck Foundation’s Annual Review 2013 and 2014.

39. LFI minute book, September 28 and December 9 2009.

40. The minutes of the Lundbeck Foundation’s Board of Trustees, strategy seminar August 24-25 2005.

2002 and Annual Review 2004/5.

8. The minutes of the Lundbeck Foundation Board of Trustees, strategy seminar August 24-25 2005.

9. Ibid.

10. Ibid., strategy seminar August 23-24 2006. Lundbeck Foundation Annual Review 2007, 2008 and 2009.

11. Lundbeck Foundation Annual Review 2006/07.

12. The minutes of the Lundbeck Foundation Board of Trustees, strategy seminar August 18-19 2004. The number of basic research centres is ultimo 2004.

13. Ibid.

41. Ibid., August 27-28 2009.

14. Ibid.

42. Ibid.

15. Ibid., November 25 2004.

43. Ibid., August 25-26 2010 and LFI minute

16. Ibid., June 21 2005.

book, September 28, October 27 and De-

17. Ibid.

cember 9 2010.

18. Ibid. and the Lundbeck Foundation’s An-

44. Børsen, April 29 2011.

45. LFI minute book, December 6 2010 and March 24 and May 30 2011.

nual Review 2005/06.

19. Ibid.

20. The minutes of the Lundbeck Founda-

197

NOTES

tion Board of Trustees, May 30 2006.

Lundbeck Foundation Annual Review 2006/07.

21. The minutes of the Lundbeck Founda-

2013.

10. Ibid. 2011 and 2012.

11. Ibid. 2013.

tion Board of Trustees, strategy seminar

12. Ibid.

August 23-24 2006.

13. Ibid.

22. Lundbeck Foundation Annual Review 2007/08 and 2008/09.

23. Ibid. 2009/10.

24. Ibid. and the minutes of the Lundbeck Foundation Board of Trustees, strategy seminar August 27-28 2009.

25. Ibid.

26. The minutes of the Lundbeck Foundation Board of Trustees, strategy seminar August 27-28 2009.

27. Ibid. and Lundbeck Foundation Annual Review 2009/10 and 2010/11.

28. Lundbeck Foundation Annual Review 2007/08 – 2010/11. The minutes of the Lundbeck Foundation Board of Trustees, strategy seminar August 25-26 2011.

29. Ibid. 2010/11.

30. The minutes of the Lundbeck Foundation Board of Trustees, December 9 2009.

CHAPTER 9 1. Lundbeck Foundation Annual Review 2012.

2. Ibid.

3. Ibid.

4. Ibid. and the minutes of the Lundbeck Foundation Board of Trustees, June 11 2011.

5. Lundbeck Foundation Annual Report 2012.

6. Ibid. 2013.

7. Ibid. 2011.

8. The minutes of the Lundbeck Foundation Board of Trustees, August 25-26 2011. The Foundation’s website.

198

9. Lundbeck Foundation Annual Report

LUNDBECK FOUNDATION The First 60 Years Š 2015 Lundbeck Foundation Editor: Anne Mette Palm Translated from the Danish by: Margaret Malone Graphic design: Imperiet Unless otherwise stated, the photos used in this book belong to the Lundbeck Foundation or H. Lundbeck A/S, Repro: Narayana Press Printed by: Clemenstrykkeriet, Lithuania ISBN 978-87-93229-05-1 1. edition 2015

THE LUNDBECK FOUNDATION was established in 1954 with the dual aim of ensuring the development of the Danish pharmaceutical firm H. Lundbeck A/S and granting financial support to scientific research.

From these modest beginnings, the Lundbeck Foundation today has a capital of some DKK 40 billion, including a controlling interest in the global pharmaceutical groups H. Lundbeck A/S and ALK A/S as well as in the international emergency services and ambulance group Falck A/S. Today the Lundbeck Foundation grants DKK 400-500 million a year to health sciences and has from 2005 to 2009 donated a good DKK 1.1 billion to the establishment of Lundbeck Foundation Research Centres in the natural and health sciences. Since 2011, the Foundation has financed the award of one of the world’s major research prizes, The Brain Prize, of EUR 1 million.

The book tells the story of the development of the Lundbeck Foundation up to its present position; of the personalities who have influenced this development and of the decisions which have shaped the Foundation’s policy on grants and investments over the years, including interactions with the companies it controls. The aim is to create openness about the Foundation’s activities and to give researchers and the public insight into how the Foundation has managed its capital and its grant activities over the years.

Kurt Jacobsen (b. 1954), dr. phil., is Professor of History at the Copenhagen Business School.

He has written a large number of books and articles about Danish companies, including Falck A/S, ALK A/S and H. Lundbeck A/S, and is a co-author of the biography of the industrialist Alexander Foss. He has also written about the Danish health service and the ‘Danish model’, and about the working environment and occupational medicine in the historical perspective.