Company Reports

UCB reported solid half-year results in line with our expectations, highlighted by revenue of EUR 2.79 billion, representing 8% growth year over year. Psoriasis drug Bimzelx has had a strong launch, and the number of patients globally using the drug has exceeded 35,000. We forecast Bimzelx will be a major growth driver for UCB over our 10-year forecast, as it is on track to become a blockbuster drug, generating over EUR 1 billion in sales as early as 2025. UCB is working to expand Bimzelx into additional disease indications, which will help expand its addressable patient population. Positive long-term safety and efficacy data for Bimzelx should also help increase patient uptake, as most patients treated for moderate to severe plaque psoriasis achieved complete skin clearance at year four. We anticipate Bimzelx could account for more than 40% of total company sales by 2033.

UCB remains focused on expanding its addressable patient population and developing its pipeline as the company continues to face generic competition. UCB’s epilepsy drug Briviact received approval in Japan for the treatment of focal onset seizures. This is the fourth approval of Briviact in the Asia-Pacific region, which reinforces UCB’s commitment to expanding treatment to people with epilepsy across the globe. We forecast Briviact will achieve peak sales of roughly EUR 700 million in 2026 and then it will face declining sales due to its loss of patent exclusivity in the United States and European Union in 2026.

UCB emerged as a major biopharmaceutical player in the 1990s with the development of blockbuster drugs Zyrtec and Keppra. Throughout the 1990s and early 2000s, UCB transformed from a hybrid pharma/chemical firm into a pure-play biopharmaceutical company by shedding its packaging, film, and chemical businesses. Acquisitions of Celltech (2004) and Schwarz Pharma (2006) strengthened the biopharmaceutical pipeline, bringing in late-stage assets that would eventually be approved as Cimzia (immunology), Vimpat (epilepsy), and Neupro (Parkinson's disease). These key products helped offset the impact of Zyrtec and Keppra's patent losses, and the company has continued to shape its expertise in immunology and central nervous system disorders.

UCB released long-term safety and efficacy data for Bimzelx, demonstrating that most patients treated for moderate to severe plaque psoriasis achieved complete skin clearance at year four. The results from this long-term study further support the safety and efficacy profile for Bimzelx, which was approved by the US Food and Drug Administration in October 2023. UCB plans to continue the global launch of Bimzelx in Europe and Japan, and the positive long-term data should help increase patient uptake.

UCB emerged as a major biopharmaceutical player in the 1990s with the development of blockbuster drugs Zyrtec and Keppra. Throughout the 1990s and early 2000s, UCB transformed from a hybrid pharma/chemical firm into a pure-play biopharmaceutical company by shedding its packaging, film, and chemical businesses. Acquisitions of Celltech (2004) and Schwarz Pharma (2006) strengthened the biopharmaceutical pipeline, bringing in late-stage assets that would eventually be approved as Cimzia (immunology), Vimpat (epilepsy), and Neupro (Parkinson's disease). These key products helped offset the impact of Zyrtec and Keppra's patent losses, and the company has continued to shape its expertise in immunology and central nervous system disorders.

UCB has received approval from the European Commission, the U.S. Food and Drug Administration, and the Japanese Ministry of Health, Labor and Welfare for Zilbrysq (pipeline candidate: zilucoplan) for the treatment of adults with generalized myasthenia gravis. We maintain our fair value estimate of EUR 99 per share and no-moat rating for UCB. The stock is currently trading in 5-star territory about 28% below our fair value estimate.

UCB emerged as a major biopharmaceutical player in the 1990s with the development of blockbuster drugs Zyrtec and Keppra. Throughout the 1990s and early 2000s, UCB transformed from a hybrid pharma/chemical firm into a pure-play biopharmaceutical company by shedding its packaging, film, and chemical businesses. Acquisitions of Celltech (2004) and Schwarz Pharma (2006) strengthened the biopharmaceutical pipeline, bringing in late-stage assets that would eventually be approved as Cimzia (immunology), Vimpat (epilepsy), and Neupro (Parkinson's disease). These key products helped offset the impact of Zyrtec and Keppra's patent losses, and the company has continued to shape its expertise in immunology and central nervous system disorders.

UCB reported half-yearly revenue of EUR 2.6 billion, representing an 11% decline year over year due to generic erosion having an impact on some of the company’s drugs. We maintain our fair value estimate of EUR 99 per share and no-moat rating for UCB. The stock is currently trading in 4-star territory, about 19% below our fair value estimate. Our no-moat rating is due to ongoing generic erosion and upcoming patent losses that will weaken UCB’s intangible assets.

UCB emerged as a major biopharmaceutical player in the 1990s with the development of blockbuster drugs Zyrtec and Keppra. Throughout the 1990s and early 2000s, UCB transformed from a hybrid pharma/chemical firm into a pure-play biopharmaceutical company by shedding its packaging, film, and chemical businesses. Acquisitions of Celltech (2004) and Schwarz Pharma (2006) strengthened the biopharmaceutical pipeline, bringing in late-stage assets that would eventually be approved as Cimzia (immunology), Vimpat (epilepsy), and Neupro (Parkinson's disease). These key products helped offset the impact of Zyrtec and Keppra's patent losses, and the company has continued to shape its expertise in immunology and central nervous system disorders.

UCB remains focused on expanding its addressable patient population and developing its pipeline as the company continues to face generic competition. UCB received positive opinions from the European Medicines Agency for two additional indications of Bimzelx (bimekizumab) for the treatment of adults with active axial spondyloarthritis and for adults with active psoriatic arthritis based on data from phase 3 studies. If approved by the European Commission, these would represent the second and third indications for bimekizumab in the EU, following its initial approval for the treatment of moderate to severe plaque psoriasis in 2021. We forecast Bimzelx could contribute about EUR 1.5 billion in revenue globally in 2027.

UCB reported 2022 results broadly in line with our expectations, with overall revenue of EUR 5.5 billion declining about 4% from 2021 as generic competition for Vimpat has affected sales. Vimpat is UCB’s second-largest drug (accounting for over 20% of 2022 revenue), and it reported a year-over-year decline of 27% as it lost its patent exclusivity in the U.S in early 2022.

UCB announced the FDA has accepted its new drug application for pipeline candidate zilucoplan. Zilucoplan is a once-daily subcutaneous, self-administered peptide inhibitor of complement component 5 for the treatment of adult patients with acetylcholine receptor antibody positive (AChR-Ab+) generalized myasthenia gravis, or gMG. This is a rare autoimmune disease that affects about 700,000 people worldwide. We’ve raised our fair value estimate to EUR 99 per share from EUR 97, which reflects increased optimism for the approval of zilucoplan. We view shares as undervalued, currently trading in 4-star territory.

UCB emerged as a major biopharmaceutical player in the 1990s with the development of blockbuster drugs Zyrtec and Keppra. Throughout the 1990s and early 2000s, UCB transformed from a hybrid pharma/chemical firm into a pure-play biopharmaceutical company by shedding its packaging, film, and chemical businesses. Acquisitions of Celltech (2004) and Schwarz Pharma (2006) strengthened the biopharmaceutical pipeline, bringing in late-stage assets that would eventually be approved as Cimzia (immunology), Vimpat (epilepsy), and Neupro (Parkinson's disease). These key products helped offset the impact of Zyrtec and Keppra's patent losses, and the company has continued to shape its expertise in immunology and central nervous system disorders.

UCB emerged as a major biopharmaceutical player in the 1990s with the development of blockbuster drugs Zyrtec and Keppra. Throughout the 1990s and early 2000s, UCB transformed from a hybrid pharma/chemical firm into a pure-play biopharmaceutical company by shedding its packaging, film, and chemical businesses. Acquisitions of Celltech (2004) and Schwarz Pharma (2006) strengthened the biopharmaceutical pipeline, bringing in late-stage assets that would eventually be approved as Cimzia (immunology), Vimpat (epilepsy), and Neupro (Parkinson's disease). These key products helped offset the impact of Zyrtec and Keppra's patent losses, and the company has continued to shape its expertise in immunology and central nervous system disorders.

UCB decreased its guidance for 2022, which reflects macroeconomic headwinds leading to upward pressure on costs, the impact from Vimpat’s patent exclusivity loss, and strong generic competition for Keppra in Japan. We’ve updated our model, and we now forecast 2022 revenue of roughly EUR 5.35 billion, reflecting a roughly 7.5% decrease from 2021. Higher costs and continued research and development expenses are dampening adjusted EBITDA margins. Management expects an adjusted EBITDA margin around 21% for 2022, compared with previous guidance of about 26%. We’ve lowered our fair value estimate slightly to EUR 97 per share from EUR 100, reflecting near-term headwinds. We maintain our no-moat and negative trend ratings for UCB and view shares as slightly undervalued.

UCB emerged as a major biopharmaceutical player in the 1990s with the development of blockbuster drugs Zyrtec and Keppra. Throughout the 1990s and early 2000s, UCB transformed from a hybrid pharma/chemical firm into a pure-play biopharmaceutical company by shedding its packaging, film, and chemical businesses. Acquisitions of Celltech (2004) and Schwarz Pharma (2006) strengthened the biopharmaceutical pipeline, bringing in late-stage assets that would eventually be approved as Cimzia (immunology), Vimpat (epilepsy), and Neupro (Parkinson's disease). These key products helped offset the impact of Zyrtec and Keppra's patent losses, and the company has continued to shape its expertise in immunology and central nervous system disorders.

No-moat UCB reported full-year results largely in line with our expectations, with overall revenue of EUR 5.8 billion, up about 8% from 2020. In our view, management’s 2022 full-year guidance, which included sales between EUR 5.15 billion-EUR 5.4 billion and core EPS of EUR 4.80-EUR 5.30 per share, seemed on the lighter side even with upcoming patent losses impacting revenue. After adjusting our model, we are maintaining our EUR 100 fair value estimate, no-moat, and negative trend ratings. Our long-term views remain unchanged as many of UCB’s currently marketed products face patent expirations over our forecast period.

UCB emerged as a major biopharmaceutical player in the 1990s with the development of blockbuster drugs Zyrtec and Keppra. Throughout the 1990s and early 2000s, UCB transformed from a hybrid pharma/chemical firm into a pure-play biopharmaceutical company by shedding its packaging, film, and chemical businesses. Acquisitions of Celltech (2004) and Schwarz Pharma (2006) strengthened the biopharmaceutical pipeline, bringing in late-stage assets that would eventually be approved as Cimzia (immunology), Vimpat (epilepsy), and Neupro (Parkinson's disease). These key products helped offset the impact of Zyrtec and Keppra's patent losses, and the company has continued to shape its expertise in immunology and central nervous system disorders.

UCB emerged as a major biopharmaceutical player in the 1990s with the development of blockbuster drugs Zyrtec and Keppra. Throughout the 1990s and early 2000s, UCB transformed from a hybrid pharma/chemical firm into a pure-play biopharmaceutical company by shedding its packaging, film, and chemical businesses. Acquisitions of Celltech (2004) and Schwarz Pharma (2006) strengthened the biopharmaceutical pipeline, bringing in late-stage assets that would eventually be approved as Cimzia (immunology), Vimpat (epilepsy), and Neupro (Parkinson's disease). These key products helped offset the impact of Zyrtec and Keppra's patent losses, and the company has continued to shape its expertise in immunology and central nervous system disorders.

We’ve increased our fair value estimate for UCB to EUR 100 from EUR 93 per share after taking a fresh look at our estimates for the company's drugs in central nervous system disorders and immunologic diseases. Our increase in fair value estimate is based on a slightly improved near-term outlook for epilepsy drug, Vimpat, and a less severe immediate impact from the 2024 patent loss of Cimzia due to our expectation of a limited number of biosimilars coming available on the market. We maintain our no-moat rating for UCB due to upcoming key patent losses and a high uncertainty around its pipeline.