Specialty focus enables UCB to repel austerity
This article was originally published in Scrip
By focusing on specialty drugs for severe neurological and immunology disorders UCB CEO Roch Doliveux believes his company is positioned well to cope with payer pressures in the developed world while making major headway in key emerging markets. Indeed, in his last year at the helm, Mr Doliveux is expecting UCB to deliver double digit EBITDA and EPS growth in 2014.
Indeed, while the company learns to cope with life in a post-Keppra world – net global sales declined a further 15% in 2013 to €712 million – combined net sales from its core medicines Cimzia, Vimpat and Neupro increased 27% to €1.19 billion, while sales growth from the emerging markets advanced 13% to €313 million.
Mr Doliveux is expecting Cimzia, Vimpat and Neupro to enable UCB to shake off any austerity chill. "We believe the best way to address austerity measures is to come up with medicines that provide real benefit to patients. Right in the middle of the Greek crisis with Neupro we were able to get a 50% premium over the price of other anti-epileptic drugs," he told a media briefing convened to discuss the company's annual results.
"We will continue to live with austerity which is why UCB continues to focus on severe diseases and more and more we talk about value. It will be a requirement for all of us in this industry to show value for medicines," he added.
It is a strategy that the company is exporting to the emerging markets because Mr Doliveux thinks they too will be looking for value for money. “There will be price pressures in these emerging markets for those pursuing me too medicines and that is why we will maintain the same business model focusing on severe diseases addressing the emerging middle classes that have the means to pay for these medicines and having some specialist access schemes for those that do not,” he added.
UCB is focusing its efforts on south East Asia, Brazil and Mexico in Latin America, Russia and Turkey. Mr Doliveux hinted the company may expand further in the future but as these markets represent 75% of the new pharmerging markets potential this was where the focus would be in the short term.
It is a strategy that seems to be winning some fans. Only last month, Biogen Idec granted UCB commercialization rights for its portfolio of multiple sclerosis (MS) and hemophilia drugs in Asia including the bestselling oral MS therapy, plus Fampyra, Avonex, Tysabri and experimental MS therapies Plegridy and daclizumab (scripintelligence.com, January 30, 2014).
“Our deal with Biogen Idec is a good indicator that we are on the right track. You can imagine that everyone was interested in securing [the Biogen Idec franchise]. However, if you think who in China is best at addressing neurology it is UCB . That is what Chinese neurologists will tell you. Today it is only in 20 cities but it is getting broader and broader,” he added.
Overall, revenues in 2013 reached €3.41 billion, which represents a 1% decline owing to currency fluctuations. Indeed at constant exchange rates the company posted a 2% improvement in revenue.