UCB’s Pipeline Pushes Forward

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Analysts are maintaining the fair value estimate for UCB of EUR 37 per share after reviewing the progress of the firm’s pipeline. Highlights of the firm’s central nervous system program include efforts to broaden Vimpat’s label and expansion of Neupro into new geographies.

UCB plans to submit regulatory filings for Vimpat, which is currently approved as an adjunctive seizure therapy, as a monotherapy in the second half of this year. Vimpat brought in EUR 334 million in 2012 (a fraction of the firm’s leading seizure medicine Keppra’s sales), but we think label expansion activities for Vimpat could ultimately help sales rise to EUR 1 billion.

Transdermal patch Neupro, currently approved for Parkinson’s disease and restless legs syndrome, has also hit the market now in Japan, which should help the firm grow sales from EUR 133 million last year to our peak estimate of EUR 350 million as it gains traction across multiple geographies. We also look forward to Phase III results from brivaracetam, which could soon help expand UCB’s robust epilepsy lineup. In immunology, label expansion activities for Cimzia are ongoing, and UCB’s launch (along with partner Astellas) of the drug in Japan should help accelerate near-term growth.

Analysts continue to think the novel biologic compound holds the most promise and provides UCB with a foothold in the multibillion-dollar rheumatoid arthritis market. Despite the sales potential of Vimpat, Neupro, and Cimzia, we are maintaining our no moat, stable trend rating as we remain skeptical about the company’s ability to offset patent losses for key flagship drugs.

 

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