UCB looks to new products to offset loss of patent protection

UCB expects that three recently launched drugs will drive the company’s growth for the next decade following a period of extensive restructuring.

At a briefing for journalists on 2 March 2010, the company’s chief executive, Roch Doliveux, said the products – Cimzia (certolizumab) for Crohn’s disease and rheumatoid arthritis; Neupro (rotigotine) for Parkinson’s disease and restless legs syndrome, and Vimpat (lacosamide) for epilepsy – form the core of the company’s product portfolio going forward. This follows the company’s loss of patent protection for its biggest revenue-generator, Keppra, an anti-epileptic drug.

Presenting the company’s results for 2009, Mr Doliveux said UCB had partially offset its loss of Keppra revenues by launching new products. However, the loss of patent protection has been very difficult. “Losing 30% of sales on a product with revenue of more than €1 billion is very hurtful,” he commented.

In addition, the company had to refinance debt maturing in 2009 and 2011. This involved terminating a €3.3 billion credit facility and issuing various types of bonds and arranging a smaller credit facility. The new instruments mature over four years starting in 2012.

“We now have a debt maturity profile that is much more in line with our [expected] cash generation,” the executive said.

In the period under review, UCB reported a 13% drop in revenue to €3.1 billion, a decline that was largely due to loss of Keppra income and loss of revenue from businesses that were sold. Earnings before interest, taxes, depreciation and amortisation (EBITDA) were €698 million, down by 5% from the previous year. The company reported core earnings per share of €1.74 compared with €1.86 a year earlier which is based on its calculation of non-diluted share capital of 180 million. It is proposing to raise its net dividend by 4% to €0.72 per share.

Going forward, the management is looking to generate peak sales of €1.5 billion from Cimzia; €1.2 billion from Vimpat and €400 million from Neupro in the second half the decade. Patents on these products expire in 2020 or shortly thereafter.

Coming up from behind are products such as epratuzumab for lupus which is expected to enter Phase 3 in the second half of 2010, and new indications for other medicines. Meanwhile, UCB has hired the former chief scientific officer of Schering Plough Corp, Ismail Kola, to drive growth in its early pipeline. At the briefing, Mr Kola said new compounds for autoimmune diseases, oncology and cognitive disorder indications recently moved into Phase 1. One of these products, a mitogen-activated protein kinase (MEK) inhibitor for cancer, is being developed jointly with Wilex AG of Germany.

In 2010, UCB expects to report revenue of €3 billion and recurring EBITDA of about €700 million.

Copyright 2010 Evernow Publishing Ltd

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