- Revenue reached EUR 4.6 billion: +2%, +5% CER(1); net sales increased to EUR 4.4 billion: +5%, +8% CER, driven by core products (+6%, +10% CER)
- Underlying profitability (rEBITDA) increased to EUR 1 398 million: 2%, +5% CER
- R&D update: Evenity(®) approved in Japan; Vimpat(®) approved in China
- Financial outlook for 2019: Revenue expected in the range of EUR 4.6 - 4.7 billion, recurring EBITDA(2) in the range of 27% - 29% of revenue, reflecting higher R&D investments
BRUSSELS, Feb. 28, 2019 /PRNewswire/ -- "We are confident for the future growth of UCB based on strong delivery in 2018, marking the fifth year of profitable growth in a row and a new blockbuster for UCB, Vimpat(®)," said Jean-Christophe Tellier, CEO UCB. "We are expecting Cimzia(®) to reach EUR 1.7 billion net sales by 2024 and Vimpat(®) should reach 1.4 billion by 2022. Our strong late stage pipeline currently offers six potential product launches in the next five years. Based on our solid foundation we will as planned accelerate our investments in future growth drivers."
Core product net sales
Revenue for 2018 reached EUR 4.63 billion, +2% at actual and +5% at constant exchange rates (CER). Net sales went up by 5% (+8% CER) to EUR 4.41 billion, driven by the continued growth of UCB's five core products, with combined net sales of EUR 3.8 billion (+6%; +10% CER), representing 82% of UCB's revenue.
Underlying profitability (rEBITDA(2)) improved by 2% (+5% CER) to EUR 1 398 million - thanks to core product growth and despite higher R&D expense.
Profit of the Group, supported by a tax rate of 19.7%, increased to EUR 823 million - of which EUR 800 million (+6%; +10% CER) is attributable to the UCB shareholders. The Board of directors of UCB proposes a dividend of EUR1.21 per share (gross), +2.5%.
UCB's financial results FY 2018:
EUR million FY 2018
Revenue 4 632 4 530 2% 5%
Net sales 4 412 4 182 5% 8%
rEBITDA(2) 1 398 1 375 2% 5%
Number of shares (m) 188 188
Core EPS(3) (EUR) 4.78 4.82 -1% 3%
Dividend per share (EUR) 1.21 1.18 2.5%
Latest R&D update
In October, UCB announced positive results from a phase 2 study with a novel, subcutaneous FcRn (neonatal Fc receptor) monoclonal antibody, rozanolixizumab, in patients with myasthenia gravis (MG), achieving proof-of-concept. These results support the rozanolixizumab development with a confirmatory study in MG starting in Q2 2019.
In December, Vimpat(®) (lacosamide) was approved in China as adjunctive therapy in the treatment of partial-onset seizures with or without secondary generalization in adult and adolescent patients 16 years of age and older with epilepsy. In January 2019, Vimpat(®) was approved in Japan for the treatment of partial onset seizures in children 4 years of age and older. In addition, two new formulations have been approved, IV (intravenous) and dry syrup.
At the end of 2018, one phase 1 project in neurology, UCB3491, was terminated due to lack of patients for recruitment - driven by sufficient standard of care.
In December, Keppra(®) (levetiracetam) for monotherapy of epilepsy as well as an updated pregnancy language was submitted to the U.S. authorities. The application was accepted for filing by the FDA in January 2019. The Keppra(®) pregnancy label has been approved in the EU in April 2018.
In October, UCB and its partner Biogen announced top-line results from a Phase 2b study with dapirolizumab pegol in moderately-to-severely active systemic lupus erythematosus. While the primary endpoint of the study was not met (p=0.06), the study did demonstrate consistent and potentially meaningful improvements for the majority of clinical endpoints in patients treated with dapirolizumab pegol compared with placebo. UCB and Biogen continue to further evaluate these data while assessing potential next steps.
At the end of 2018, the phase 1 project UCB6673 was returned to the partner - due to prioritization within the UCB pipeline.
In September and in Japan, positive phase 3 results were achieved for Cimzia(®) (certolizumab pegol) in patients with psoriasis and psoriatic arthritis. Submission to the Japanese agency took place in January 2019.
Early January 2019, UCB and Amgen announced the approval of Evenity(®) (romosozumab) in Japan. Evenity(®) is approved to reduce the risk of fractures and increase bone mineral density in men and post-menopausal women with osteoporosis at high risk of fracture. One week later, the U.S. Food and Drug Administration (FDA) Bone, Reproductive and Urologic Drugs Advisory Committee (BRUDAC) voted positively for the approval of romosozumab. While the FDA is not bound by the Advisory Committee's recommendations, it takes the advice into consideration when making its decision.
All other clinical development programs are continuing as planned.
Immunology Cimzia(®) (certolizumab pegol) for patients living with autoimmune and inflammatory TNF mediated diseases, net sales went up to EUR 1.4 billion, driven by continued, sustainable growth in all regions at constant exchange rates. In 2018, in the EU and the U.S., the Cimzia(®) label was enhanced with data in pregnancy and breastfeeding. In addition, Cimzia was launched for adults with moderate-to-severe plaque psoriasis.
EUR million FY 2018 FY 2017
U.S. 896 918 -2% 2%
Europe 400 370 8% 8%
International markets 150 136 10% 19%
Total Cimzia(R) 1 446 1 424 2% 5%
Neurology: UCB's epilepsy franchise reached net sales of EUR 2.0 billion, a plus of 10%.
Vimpat® (lacosamide) with net sales of EUR 1.1 billion, is reaching more and more people living with epilepsy, marking a new blockbuster for UCB and showing strong, double-digit growth in all regions.
EUR million FY 2018 FY 2017
U.S. 822 746 10% 15%
Europe 206 177 16% 17%
International markets 70 53 33% 42%
Total Vimpat(R) 1,099 976 13% 17%
Keppra® (levetiracetam) for epilepsy, reported net sales of EUR 790 million. The evolution reflects the established brand and the maturity of the product while showing good growth in international markets.
EUR million FY 2018 FY 2017
U.S. 221 232 -5% 0%
Europe 216 235 -8% -8%
International markets 352 311 13% 19%
Total Keppra(R) 790 778 2% 5%
Briviact® (brivaracetam), is being made available to more and more patients and reached net sales of EUR 142 million. In 2018, Briviact® was approved in the U.S. and the EU for young patients from 4 years of age.
EUR million FY 2018 FY 2017
U.S. 109 63 72% 80%
Europe 29 22 32% 33%
International markets 4 1 > 100% > 100%
Total Briviact(R) 142 87 63% 70%
Neupro® (rotigotine), the patch for Parkinson's disease, reported net sales of EUR 321 million. Neupro® has reached its peak sales and is expected to mature in its lifecycle going forward.
EUR million FY 2018 FY 2017 Act
U.S. 101 96 5% 10%
Europe 174 168 3% 4%
International markets 46 50 -7% -4%
Total Neupro(R) 321 314 2% 4%
Revenue and net sales in 2018 reached EUR 4 632 million (+2%; +5% at constant exchange rates (CER)) and EUR 4 412 million (+5%; +8% CER) respectively. This growth was especially driven by the continued performance of UCB's core products. Royalty income and fees decreased to EUR 92 million from EUR 108 million. Other revenue reached EUR 128 million from EUR 240 million in 2017, due to the one-time other revenue in 2017 of EUR 56 million for out-licensing of the over-the-counter allergy drug Xyzal(®) (levoceterizine) in the U.S.
Gross profit went up to EUR 3 434 million (+3%) reflecting an improved gross margin of 74.1% from 73.5%.
Operating expenses went up to EUR 2 329 million (+6%; +8% CER) due to 3% higher marketing and selling expenses of EUR 964 million and 10% higher research and development (R&D) expenses of EUR 1 160 million, reflecting a R&D ratio of 25%, compensated by 6% lower general and administrative expenses of EUR 180 million. This resulted in an increased operating expense ratio (in relation to revenue) of 50.3% up from 48.6%.
Underlying profitability - rEBITDA(2)- reached EUR 1 398 million after EUR 1 375 million (+2%; +5% CER) driven by the improved gross margin compensating higher marketing and selling and higher R&D expenses. The recurring EBITDA ratio (in % of revenue) surpassed for the second year in a row the 30%-mark, namely 30.2%, after 30.4% in 2017.
Non-recurring income was EUR 4 million due to gain on disposals from divestitures of UCB's non-core assets after expenses of EUR 43 million in 2017 relating to restructuring and litigation.
Net financial expenses decreased to EUR 93 million from EUR 99 million.
Income tax expenses were EUR 200 million, down from EUR 218 million. The average effective tax rate on recurring activities was 19.7% - driven by R&D incentives - compared to 22.1% in 2017.
Profit of the Group amounted to EUR 823 million (from EUR 771 million) of which EUR 800 (+6%; +10% CER) million is attributable to the UCB shareholders and EUR 23 million 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 EUR 4.78 (-1%; +3% CER) based on 188 million weighted average shares outstanding.
Dividend - the Board of directors of UCB proposes a dividend of EUR1.21 per share (gross; +2.5%).
Financial outlook 2019 and updated peak sales for Cimzia(®) and Vimpat(®) - 2019 revenue is expected in the range of EUR 4.6-4.7 billion - thanks to core product growth. Driven by higher R&D investments into UCB's strong pipeline, recurring EBITDA is expected in the range of 27% - 29% of revenue. Core earnings per share are therefore expected in the range of EUR 4.40 - 4.80 based on an average of 188 million shares outstanding.
UCB is updating the peak sales guidance for its core products Cimzia(®) and Vimpat(®): Cimzia is expected to reach EUR 1.7 billion by 2024 and Vimpat should reach 1.4 billion by 2022. Expected peak sales for Briviact (EUR 600 million by 2026) remain unchanged. Neupro(®) has reached its peak sales in 2018 and is expected to mature in its lifecycle going forward. While showing good growth in international markets, global net sales of Keppra(®) are continuing to mature.
FY 2018 - Financial highlights Find the FY financial reports on UCB website: http://www.ucb.com/investors/Download-center [http://www.ucb.com/investors/Download-center]
EUR million 2018 2017
Revenue 4 632 4 530 2% 5%
4 182 5% 8%
Royalty income and fees 92 108 -15% -11%
Other revenue 128 240 -47% -46%
Gross Profit 3 434 3 330 3% 6%
Marketing and selling expenses
- 940 3% 6%
Research and development expenses
-1 057 10% 11%
General and administrative expenses
- 192 -6% -5%
Other operating income/expenses (-)
- 11 >100% >100%
Recurring EBIT (rEBIT) 1 105 1 130 -2% 1%
Non recurring income/expenses (-) 4
- 43 >-100% >-100%
EBIT (operating profit) 1 109 1 087 2% 5%
Net financial expenses
- 99 -6% -5%
Profit before income taxes 1 015 988 3% 6%
Income tax expenses
- 218 -8% -5%
Profit from continuing operations 815 770 6% 9%
Profit/loss (-) from discontinued operations 8 1 >100% >100%
Profit 823 771 7% 10%
Attributable to UCB shareholders 800 753 6% 10%
Attributable to non-controlling interests 23 18 26% 32%
Recurring EBITDA 1 398 1 375 2% 5%
Capital expenditure (including intangible assets) 341 209 63%
Net financial debt 237 525 -55%
Operating cash flow from continuing operations
1 098 896 23%
Weighted average number of shares - non diluted (million) 188 188 0%
EPS (EUR per weighted average number of shares - non diluted) 4.24 4.00 6% 6%
Core EPS (EUR per weighted average number of shares - non diluted) 4.78 4.82 -1% 3%
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 27 February 2019 on the company's consolidated accounts as of and for the year ended 31 December 2018, 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."
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Details are available on http://www.ucb.com/investors/UCB-financials/Full-year-financial-results [http://www.ucb.com/investors/UCB-financials/Full-year-financial-results].
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 around 7 500 people in approximately 40 countries, the company generated revenue of EUR 4.6 billion in 2018. UCB is listed on Euronext Brussels . 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.
Additionally, information contained in this document shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any offer, solicitation or sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such jurisdiction. UCB is providing this information as of the date of this document and expressly disclaims any duty to update any information contained in this press release, either to confirm the actual results or to report a change in its expectations.
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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