UCB now at the inflection point – ready to start a new phase of growth
UCB Half-Year Report 2023, Brussels (Belgium), 27 July 2023 – 7:00 (CEST) – regulated information
"We had a robust first half 2023, delivered good product growth and strong launches while absorbing the impacts from the anticipated loss of exclusivity for E KEPPRA® and VIMPAT®. These impacts are receding, and we have now reached the inflection point with overall company growth going forward," Jean-Christophe Tellier, CEO UCB commented. "We are pleased to serve more than 10 000 people living with psoriasis around the globe where BIMZELX® is available for patients. BIMZELX® now captures greater than one third of new prescriptions of IL17 products for psoriasis. We are working with the U.S. agency FDA and are expecting action for bimekizumab in Q3 2023. We are looking forward to bringing our newly U.S. approved RYSTIGGO® to people living with generalized myasthenia gravis. We like to thank our employees and partners for their great efforts and together, we are working towards our strong long-term growth and our ambition to create value for all stakeholders, now and into the future.”
HY 2023 revenue reached € 2.6 billion (-11%; -13% CER1). Net sales reached € 2.4 billion (-12%; -14% CER1). This reflects the anticipated generic erosion of VIMPAT® in the U.S. and the EU and of E KEPPRA® in Japan. The growth of the UCB product portfolio was driven by CIMZIA®, BRIVIACT®, BIMZELX®, FINTEPLA® and EVENITY®.
Underlying profitability (adjusted EBITDA2) reached € 801 million (-2%; -9% CER1), reflecting lower revenue and lower operating expenses. These were driven by higher marketing and selling expenses, lower research and development expenses, lower general and administrative expenses and significantly higher other operating income – also supported by a one-time income from a product sale. The adjusted EBITDA ratio for the first six months of 2023 (in % of revenue) reached 31%, compared to the first six months 2022 with 28%.
Profit amounted to € 311 million (-22%; -33% CER1). Core EPS3 were € 2.63 after € 3.15 in the first six months 2022.
Sandrine Dufour, CFO UCB says: “We are pleased to deliver healthy financial results for the first six months 2023 and to confirm our financial guidance for 2023. We see the inflection point in the net sales performance, leaving the loss of exclusivity impacts behind us and bringing company growth. We successfully integrated Zogenix which is becoming earnings accretive as expected. The second half of the year is planned to be marked by significant investments behind the ongoing and upcoming launches.”
Regulatory and Clinical Pipeline Update
UCB continuously innovates and strives to find new ways to deliver solutions to people living with severe immunological and neurological diseases, with an unprecedented regulatory and clinical pipeline, set to help people live their best possible lives.
UCB is expecting action from the U.S. agency for bimekizumab in Q3 2023.
In June, the European Commission granted marketing authorization for BIMZELX® (bimekizumab) for the treatment of adult patients with active psoriatic arthritis (PsA) and adult patients with active axial spondyloarthritis (axSpA).
In July, the European Medicines Agency (EMA) has accepted for review the marketing authorization application of bimekizumab for the treatment of adults with moderate to severe hidradenitis suppurativa (HS).
In June, fenfluramine was filed with the Japanese regulatory authority for the treatment of patients with Lennox-Gastaut syndrome (LGS) and orphan drug designation was granted in May 2023.
In February, the regulatory agency in Japan accepted the filing for review of rozanolixizumab for the treatment of adults with generalized myasthenia gravis (gMG).
In June, FDA granted marketing authorization for RYSTIGGO® (rozanolixizumab-noli) for the treatment of gMG. Rozanolixizumab is a subcutaneous (SC) monoclonal antibody targeting the neonatal Fc receptor (FcRn) for the treatment of adults with gMG who are anti-acetylcholine receptor (AChR) or anti-muscle-specific tyrosine kinase (MuSK) antibody positive.
In June, E Keppra® (levetiracetam) was approved in Japan for the treatment of partial-onset epileptic seizures in young patients (1m-4years of age)
All other clinical development programs are continuing as planned.
Net sales break-down by product
Due to rounding, some financial data may not add up in the tables.
CIMZIA® (certolizumab pegol) serving people living with inflammatory TNF-mediated diseases is showing a stronger volume growth than the anti-TNF market – based on differentiation and driven by continued growth in the U.S. and strong growth in international markets. In Japan, order pattens by partner Astellas led to lower net sales in the first half of 2023. The underlying prescription trend, however, is positive.
KEPPRA® (levetiracetam) for people living with epilepsy reported lower net sales. The generic erosion in Japan started early January 2022 and was stronger than expected due to multiple generics and governmental support for generic levetiracetam. The erosion continued during the first six months of 2023, however, at a slower pace than expected. The loss of exclusivity in the U.S. and Europe occurred more than 10 years ago.
BRIVIACT® (brivaracetam) is available for people living with epilepsy and showed significant growth in all regions. Briviact® has a different mode of action from Vimpat® and differentiates from Keppra®. UCB expects peak sales of €600 million by 2026.
VIMPAT® (lacosamide) is available for people living with epilepsy. The expected generic erosion in the U.S. and the EU started in March and September 2022, respectively, negatively impacted the overall net sales. The other regions showed good, continued growth.
FINTEPLA® (fenfluramine) was acquired via Zogenix in March 2022 and is approved for seizures associated with rare epileptic syndromes, Dravet syndrome and Lennox Gastaut syndrome, providing new treatment options for patients and families living with these rare syndromes that are particularly challenging to treat.
BIMZELX® (bimekizumab) for people living with psoriasis is being launched throughout Europe, the UK, Japan, Canada and further countries. Total net sales were € 52 million (after € 10 million), thereof € 43 million in Europe (after € 9 million). UCB is serving more than 10 000 people living with psoriasis around the globe, where BIMZELX® is available for patients and it now captures more than one third of new prescriptions of IL17 products for psoriasis. For the U.S., the regulatory review is ongoing with an expected action by the U.S. authority in Q3 2023.
EVENITY® (romosozumab) for women living with severe postmenopausal osteoporosis at high risk of fracture saw its net sales in Europe increased to € 24 million after € 9 million. EVENITY® is being launched successfully globally by Amgen, Astellas and UCB since 2019, with net sales outside Europe reported by the partners.
NAYZILAM® (midazolam) Nasal SprayCIV, a nasal rescue treatment for epilepsy seizure clusters reached net sales of € 42 million in the U.S., an increase of 17% (+16% CER).
2023 HY financial highlights
Due to rounding, some financial data may not add up in the tables.
“The statutory auditor has issued an unqualified report with no emphasis of matter paragraph dated 26 July 2023 on the company’s consolidated accounts as of and for the year ended 30 June 2023 and has confirmed that the accounting data reported in the accompanying press release is consistent, in all material respects, with the accounts from which it has been derived.”
Revenue in the first six months of 2023 reached € 2 589 million (-11%; -13% CER1) and net sales were € 2 378 million (-12%; -14% CER1). Net sales reflect the generic erosion of VIMPAT® in the U.S. and Europe and of E KEPPRA® in Japan – compensated by positive CIMZIA® growth and strong launches of FINTEPLA®, EVENITY® and BIMZELX®.
Royalty income and fees were € 42 million (-7%; -8% CER1) and other revenue was € 169 million (-3%; -3% CER1) due to milestones – including a one-time amount of € 70 million for VIMPAT® partnership activities in Japan – and other payments from R&D partners.
Adjusted gross profit before “amortization of intangible assets linked to sales” was € 2 004 million (-11%; ‑13% CER1) and in-line with the net sales performance. The adjusted gross margin is stable at 77%.
Gross profit after “amortization of intangible assets linked to sales” reached € 1 787 million – a gross margin of 69% after 71% in June 2022 and reflecting the addition of FINTEPLA® amortization.
Operating expenses decreased to € 1 302 million (-15%; -14 CER1) reflecting lower expenses and higher other operating income. Operating expenses are consisting of:
- higher marketing and selling expenses of € 753 million (+3%; +4% CER1) – reflecting investments behind the launches and pre-launch activities: Global FINTEPLA® launch activities, global BIMZELX® launch activities as well as preparation for the U.S., and global launch preparations for RYSTIGGO® (rozanolixizumab) and zilucoplan in generalized myasthenia gravis.
- lower research and development expenses of € 759 million (-5%; -4% CER1) reflecting the continued investments in UCB’s progressing late-stage pipeline encompassing five phase 3 projects and four phase 2 projects as well as two projects in phase 1b as well as ongoing earlier stage research activities. The R&D ratio reached 29% after 27% due to the lower topline.
- lower general and administrative expenses of € 104 million (-9%; -9% CER1), thanks to improved value-focused allocation of resources and ceasing integration costs for Zogenix as planned.
- higher other operating income of € 315 million following € 114 million in the first six months of 2022 – driven by the net contribution from Amgen in connection with the commercialization of EVENITY® of €156 million after € 108 million and by other operating income from the sale of a portfolio of established brands in Europe (€ 145 million).
Underlying operational profitability – adjusted EBITDA2 – reached € 801 million (-2%; -9% CER1) driven by lower revenue and lower operating expenses. The adjusted EBITDA ratio (in % of revenue) reached 31%, after 28% in June 2022.
Total impairment, restructuring and other expenses decreased to € 6 million, after € 61 million. Last year this was mainly driven by fees and restructuring expenses related to the acquisition of Zogenix.
Net financial expenses went up to € 79 million from € 9 million, stemming from higher net debt after the acquisition of Zogenix in March 2022, higher interest rates and a positive currency impact in 2022, not reoccurring in 2023.
Income tax expenses were € 90 million (+10%; +8% CER1). The average effective tax rate was 22% compared to 17% in June 2022. The increase in tax rate is explained by two items: an expected drop in profit before tax compared to 2022 where the tax charge remains stable and a one-off reversal of a deferred tax liability in 2022 which does not occur in 2023.
Profit decreased to € 311 million (-22%; -33% CER1) driven by lower revenue, lower operating expenses and lower other expenses, higher financial expenses, and higher taxes. The full amount is attributable to UCB shareholders.
Core earnings per share, which reflect profit attributable to UCB shareholders, adjusted for the after-tax impact of to be adjusted items, the financial one-offs, the after-tax contribution from discontinued operations and the net amortization of intangibles linked to sales, reached € 2.63 after € 3.15 in June 2022, based on 189 million weighted average shares outstanding.
Financial guidance for 2023 confirmed: Revenue is expected to reach € 5.15 - 5.35 billion, adjusted EBITDA2 22.5 - 23.5% of revenue and core EPS3 of € 3.40 - 3.80. The financial guidance for 2025 is unchanged.
1 CER = constant exchange rates
2 adj. EBITDA = adjusted Earnings Before Interest, Taxes, Depreciation and Amortization charges
3 Core EPS = core earnings per share
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Investor Relations
Antje Witte
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email antje.witte@ucb.com
Julien Bayet
T: +32 2 559 9580
Julien.bayet@ucb.com
Corporate Communications
Laurent Schots
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email laurent.schots@ucb.com
About UCB
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 approximately 8 700 people in approximately 40 countries, the company generated revenue of € 5.5 billion in 2022. UCB is listed on Euronext Brussels (symbol: UCB). Follow us on Twitter: @UCB_news
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