IHS Global Insight Perspective | |
Significance | Belgian top pharma UCB's revenue increased by 3% year-on-year to reach EUR3.2 billion in 2010, fuelled by the solid performance of new lead products Cimzia, Vimpat, and Neupro. |
Implications | UCB's core products Cimzia, Vimpat, and Neupro garnered combined sales of EUR413 million in the first full year of sales in Europe and the US. Their strong performance more than offset the negative impact of generic competition. |
Outlook | UCB has warned that 2011 will be a tough year with sales expected to be lower than in 2010 amid intensified generic competition and further sales erosion of mature products. |
Belgian pharma company UCB has reported a 3% year-on-year (y/y) rise in revenues to EUR3.2 billion (USD4.44 billion) during 2010. Over the period, growth was mainly driven by the strong performance of its new products Cimzia (certolizumab pegol), Vimpat (lacosamide), and Neupro (rotigotine transdermal patch) whose combined sales reached EUR413 million. Their performance as well as the strong sales of Keppra in Europe and of venlafaxine XR in North America more than offset the impact of the generic competition to its mature products over the period.
UCB: 2010 Financial Results | |||
2010 | 2009 | Y/Y Growth Rate (%) | |
Revenue | 3218 | 3116 | 3 |
Net sales | 2786 | 2683 | 4 |
Royalty income and fees | 220 | 227 | -3 |
Other revenue | 212 | 206 | 3 |
Cost of good sold | 621 | 518 | 20 |
Marketing and selling expenses | 797 | 781 | 2 |
Research and Development expenses | 705 | 674 | 5 |
General and administrative expenses | 194 | 189 | 3 |
Operating Income* | 469 | 521 | -10.0 |
Operating Margin** | 16.8% | 19.4% | 2.6 pp lower |
Net profit of the Group | 103 | 513 | -80 |
* IHS Global Insight estimate: Net Sales minus cost of goods sold, selling, R&D, and general and administration expenses. | |||
Core Products Show Growing Momentum
UCB's anti-TNF therapy Cimzia (certolizumab pegol), approved in patients with Crohn's Disease (CD) in the United States and for the treatment of rheumatoid arthritis in Europe and in the US, achieved net sales of EUR198 million in 2010, up 163% y/y. Meanwhile the anti-epileptic treatment Vimpat (lacosamide), available in Europe and the US as an add-on therapy for the treatment of partial-onset seizures, garnered sales of EUR133 million, up 190% y/y. Sales of Neupro, the patch for Parkinson's disease and restless legs syndrome (RLS), were up 34% y/y to EUR82 million despite the delay to market experienced in the US (see United States: 26 April 2010: FDA Postpones Relaunch of UCB's PD and RLS Treatment Neupro).
Sales Erosion for Mature Products
The good sales performance of UCB's anti-epileptic drug Keppra (levetiracetam) in Europe more than offset post-patent expiry erosion in North America. As a consequence, UCB's top selling drug achieved net sales up 3% y/y to EUR942 million. Allergy drugs Zyrtec (cetirizine) and Xyzal (levocetirizine) garnered respective sales of EUR229 million and EUR115 million in 2010. Zyrtec's net sales were down 15% y/y due to the divestment of non-strategic small markets to United Kingdom-based GlaxoSmithKline (GSK) in the first quarter of 2009 while sales of Xyzal were down 13% y/y due to generic competition in Europe.
Outlook and Implications
UCB expects lower revenues of between EUR3.0-3.1 billion in 2011, mainly due to generic competition in the EU and US. UCB's results will be driven by the continued growth of its three new lead products Cimzia, Vimpat and Neupro, whose sales will partially and to a large extent compensate post-patent expiry erosion in 2011. In the medium-to-long term, thus from 2012 onwards, UCB does not expect any major patent expiration for at least a decade.