UCB Full Year Report 2017: UCB, with a strong year 2017, is reinforcing a solid foundation for investing in future growth
Brussels (Belgium), 22 February 2018 – 7:00 (CET) – regulated information – UCB Full Year Report 2017:
- Positive growth momentum of core products drive top and bottom line growth
- Profitability surpasses 30% rEBITDA margin – one year ahead of guidance
- R&D update: positive Phase 2b results for bimekizumab with impressive joint and skin responses in three indications; Cimzia® approved in the EU for women with chronic inflammatory disease throughout the pregnancy journey; romosozumab filed in the EU
- Financial outlook for 2018: Revenue expected to reach € 4.5 - 4.6 billion, recurring EBITDA2 should reach € 1.3 - 1.4 billion, Core EPS of € 4.30 - 4.70 expected
In September, in the U.S., Briviact® (brivaracetam) as monotherapy in the treatment of partial-onset seizures in patients 16 years of age and older with epilepsy was approved, based on extrapolation of data.
In July, UCB filed a marketing authorization in the EU for Briviact® for children with epilepsy of four years of age and older, for the adjunctive treatment of partial-onset seizures and with the U.S. authorities for the monotherapy and adjunctive treatment.
In September, Vimpat® (lacosamide) was approved in the EU for the treatment of epilepsy in children from 4 to 16 years of age. In November, Vimpat® was approved in the U.S. for the treatment of pediatric patients living with partial-onset epilepsy at four years and older, based on extrapolation of data from adult patients. In August, the Japanese health authorities approved Vimpat® for use as monotherapy for partial-onset seizure in adult patients with epilepsy. In January 2018, UCB filed Vimpat® for pediatric patients living with partial-onset epilepsy at four years and older in Japan.
In February 2018, the phase 2b study with padsevonil started for drug resistant epilepsy patients. First results are expected in H1 2020.
In July, positive results from a phase 2b study in patients with psoriasis were reached for bimekizumab. UCB started the Phase 3 clinical development program in December; topline results are expected at the end of 2019.
In December, positive results in ankylosing spondylitis (AS) were reported for bimekizumab showing statistical significance in multiple dose groups: The primary endpoint (ASAS40) was achieved with up to 47% of patients receiving bimekizumab achieving at least 40% improvement in AS symptoms, versus 13% of patients receiving placebo, at week 12.
Also in December, positive top line results from the phase 2b study in psoriatic arthritis (PsA) were obtained: bimekizumab showed impressive joint and skin responses for these patients. The study achieved a stringent primary endpoint, with up to 46% of PsA patients who received bimekizumab experiencing at least 50% improvement in PsA joint symptoms (ACR50), versus 7% with placebo, at week 12. Among patients with active skin lesions (BSA ≥ 3), up to 65% of patients who received bimekizumab also experienced at least 90% skin clearance (PASI90) versus 7% of patients who received placebo. These results were achieved in a mixed patient population, both biologic naïve and previously biologic exposed patients.
In December 2017, a label change for Cimzia® (certolizumab pegol) was approved in the EU, making it the first anti-TNF treatment option that could be considered for women with chronic inflammatory disease throughout the pregnancy journey.
In December, rozanolixizumab (UCB7665) reached “proof of concept” in patients with immune thrombocytopenia (ITP) based on positive phase 2a results in the two initial dose arms. Recruitment for higher doses is ongoing with further results expected in Q3 2018.
In December, the European Medicines Agency accepted the Marketing Authorization Application for Evenity™ (romosozumab) for the treatment of osteoporosis in post-menopausal women and in men at increased risk of fracture, filed by UCB and Amgen.
All other clinical development programs are continuing as planned.
Revenue and net sales increased by 9% to € 4 530 million and by 9% to € 4 182 million respectively. This growth was driven by the continued performance of the core products in immunology, Cimzia®, the epilepsy franchise: Vimpat®, Keppra® and the launch of Briviact®, as well as the Parkinson drug Neupro®.
Royalty income and fees reached € 108 million (-13%). Other revenue increased to € 240 million mainly due to the one-time other revenue of € 56 million for out-licensing the OTC-allergy drug Xyzal® (levoceterizine).
Gross profit reached € 3 330 million (+13%), driven by the net sales growth and continued improved product mix. The gross margin improved to 74% (2016: 71%).
Operating expenses reached € 2 200 million (+2%) reflecting stable marketing and selling expenses of € 940 million, 4% higher research and development expenses of € 1 057 million and 4% higher general and administrative expenses of € 192 million.
Underlying profitability – rEBITDA2- increased to € 1 375 million after € 1 031 million (+33%), driven by the higher gross profit and the low growth rate of operating expenses in 2017. The recurring EBITDA ratio (in % of revenue) reached 30.3%, from 24.9% in 2016.
Non-recurring expenses was € 42 million after € 80 million income in 2016 due to the income from the divestiture of UCB’s established brands in 2016.
Net financial expenses decreased to € 99 million from € 112 million. In 2016, the expenses included the € 28 million impairment of the Lannett warrant (in connection with the Kremers Urban divestiture).
Income tax was € 218 million compared to € 199 million in 2016. The average effective tax rate was 22% compared to 26% in 2016.
Profit of the Group amounted to € 771 million (+42%), of which € 753 million (+45%) is attributable to UCB shareholders and € 18 million (-17%) to non-controlling interests.
Core earnings per share, which reflect profit attributable to UCB shareholders, adjusted for the after-tax impact of non-recurring items, the financial one-offs, the after-tax contribution from discontinued operations and the net amortization of intangibles linked to sales, reached € 4.82 (+51%) based on 188 million weighted average shares outstanding.
Dividend - The Board of Directors of UCB proposes a dividend of € 1.18 per share (gross), an increase by three €-Cents or by 2.6%.
Outlook 2018 - UCB expects the continued growth of its core products driving company growth. UCB will also advance its development pipeline to offer potential new solutions for patients and complement existing pipeline assets with external opportunities. 2018 revenue is expected to reach approximately € 4.5 – 4.6 billion. Recurring EBITDA in the range of € 1.3 – 1.4 billion. Core earnings per share are therefore expected in the range of € 4.30 – 4.70 based on an average of 188 million shares outstanding.
FY 2017 – Financial highlights
Find the FY financial reports on the UCB website: http://www.ucb.com/investors/Download-center
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UCB, Brussels, Belgium (www.ucb.com) is a global biopharmaceutical company focused on the discovery and development of innovative medicines and solutions to transform the lives of people living with severe diseases of the immune system or of the central nervous system. With more than 7 500 people in approximately 40 countries, the company generated revenue of € 4.5 billion in 2017. UCB is listed on Euronext Brussels (symbol: UCB). Follow us on Twitter: @UCB_news
Forward looking statements
This press release contains forward-looking statements based on current plans, estimates and beliefs of management. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements, including estimates of revenues, operating margins, capital expenditures, cash, other financial information, expected legal, political, regulatory or clinical results and other such estimates and results. By their nature, such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions which could cause actual results to differ materially from those that may be implied by such forward-looking statements contained in this press release. Important factors that could result in such differences include: changes in general economic, business and competitive conditions, the inability to obtain necessary regulatory approvals or to obtain them on acceptable terms, costs associated with research and development, changes in the prospects for products in the pipeline or under development by UCB, effects of future judicial decisions or governmental investigations, product liability claims, challenges to patent protection for products or product candidates, changes in laws or regulations, exchange rate fluctuations, changes or uncertainties in tax laws or the administration of such laws and hiring and retention of its employees.
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There is no guarantee that new product candidates in the pipeline will progress to product approval or that new indications for existing products will be developed and approved. Products or potential products which are the subject of partnerships, joint ventures or licensing collaborations may be subject to differences between the partners. Also, UCB or others could discover safety, side effects or manufacturing problems with its products after they are marketed.
Moreover, sales may be impacted by international and domestic trends toward managed care and health care cost containment and the reimbursement policies imposed by third-party payers as well as legislation affecting biopharmaceutical pricing and reimbursement.
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