UCB SA (UCB) Earnings Call Transcript & Summary

Welcome to Wednesday at the JPMorgan Healthcare Conference. I'm Richard Vosser, European pharma analyst at JPMorgan. It's my great pleasure to introduce the CEO of UCB, Jean-Christophe Tellier. Before I hand over to Jean-Christophe, I'd just remind you that we will take questions after Jean-Christophe's presentation. So you can either put up your hand, wait for a microphone or you can submit questions through the portal. Jean-Christophe, welcome to the conference.

Thank you, Richard. Good morning, everyone, and thank you for being here, and thank you for your interest into the company. It's a pleasure to be back here and share with you progress that we have made with the company and where do we stand at the beginning of 2025. So after the classical slide on the disclaimer, maybe for some of you who don't know fully yet UCB, a quick reminder of who we are. We are a company almost 100 years old, created in 1928 by the Janssen family. And since then, we have been focusing more and more on biopharmaceuticals and on biotech specialty. We have today more than 9,000 people in the company, and we are impacting more than 3.2 million of people. There are 2 messages that I would like you to keep in mind at the beginning of this presentation. One is the fact that for a company outside the strategy always has been to focus on innovation and to make sure that we were able to have an impact on life of patients through the product that we are able to discover, develop and commercialize. And that's the reason why you can see on the top line right-hand side of the slide that we always have invested more than the average of our industry in R&D. The reason why we are doing that and the reason why we are focusing on research is because it's one of the criteria by which, in a sense, size is not equivalent to success. And so for a company our size, it's important to realize that we want to focus where quality make a difference more than quantity. And so the differentiated innovations play an important role for us. We have planned for 2024, and we will publish the full year result later in February. But the latest update of our guidelines for '24 was projected sales around EUR 6 billion with a profitability between 23% and 24.5%. On the left side of the slide, I think there is a quite quick summary of what do we mean by patient value. Actually, the point is relatively simple, right? I mean, if you are focusing on innovation, you want to better connect the patient to the science because you want the science to then be translated into a differentiated medicine. And so value for patients start, of course, with the ability to make product available for the society and for the market that make a difference for this patient's life. You would say the majority of pharma company, it's already a very good objective and a good goal. We feel that we need to go a little bit further. Because if the product that we are able to put on the market doesn't create a good experience for the patient, then we may not have achieved our goal. And if the patients who need our products in order to be treated doesn't have access to our drugs, we may not have achieved our goal. So on top of discovery, delivering, commercializing differentiated medicine, these notions of full value for the patient, meaning being able for the patient to get access and to get the best possible experience so they can have the life that they want. Last but not least, we want to be successful in the long-term in the sustainability areas. So we are very pleased to be among few biopharma company to have a validated net zero target by the Science-Based Target initiative, and we are the first company of the BEL20 to have been able to reach this objective. So the patient value strategy started 10 years ago, and you see here the last journey of the next -- of the last 10 years, starting with a phase where we wanted to solidify the platform that we named, grow and prepare. Then we move to the phase where we wanted to accelerate and expand, meaning gaining more patient populations and producing data that would be compelling for the society and for the different stakeholders. And in the last phase, which was a breakthrough in lead, that we are in the end of this phase right now, transforming the work that has been done in order to really reach the impact that we can have today. And on the right-hand side, you start to see some of the elements to illustrate these achievements: the 25 approvals and launches in the last 24 months; the R&D productivity, we had 12 consecutive Phase III positive in the last 4 years and making sure that, in a sense, we can deliver this differentiation to the patient. Now certain illustrations of what differentiation means. We are starting a period of growth with a decade-plus of growth with 5 products that are in a launching phase right now. Each of them has a unique value proposition. So if I start with BIMZELX, which is today at the heart of our growth and with a lot of attention. BIMZELX is the first and only monoclonal antibody that target at the same time IL-17A and IL-17F. It's not a bispecific, per se, from a construct -- from an antibody engineering. It is one antibody who have the same time have the same affinity for both target, which is unique in the system. Second, product EVENITY for fragility fracture. We are the only anti-sclerostin inhibitors. We are the only product available on the market with our partner, Amgen, who is able to reduce the fracture rate by 50% for fragility fracture and who rebuild bone. And as you all know, we have reached our peak bone at 25 years old. And the only objective and opportunity and possibility after 25 years is to lose bone. So with life extension, with risk of additional fracture, the only possibility to rebuild bone is a 1-year treatment with EVENITY. FINTEPLA is a product that we have acquired from Zogenix in Dravet syndrome and Lennox-Gastaut Syndrome. It's a unique value proposition, in particular for Dravet syndrome and it's now the base of the treatment and the recommendation. And then we have 2 products in myasthenia gravis: RYSTIGGO, anti-FcRn; and ZILBRYSQ and anti-C5. For our anti-FcRn, we have the indications in both patient populations, the MuSK and the anti-cholinesterase receptors population. And then for ZILBRYSQ, we are the only one anti-C5 with a daily injection, which ensure a control of the inflammations every day. So you can see that we are entering into this period of growth for the company with products which have unique value propositions. And on the right-hand side, you can see the rest of the pipeline. We have 5 Phase II where we are waiting for some results, 4 for Phase III and 1 submission ready. So the platform is very solid. We have growth for the near future and we have promising pipelines coming in. Two products I just wanted to highlight. Bepranemab is an anti-tau antibody, where we have presented the data at the end of last year when we think that we have a signal in the subpopulation of patients suffering from Alzheimer's disease. And dapirolizumab is an anti-CD40 ligand that we have with our partner, Biogen, where we had positive Phase III study in lupus. It's only the third time in history of lupus that a positive Phase III has been achieved. So when you look at the last 10 years or so and when we are mentioning that we are starting a period of growth, I wanted also to share with you that we are starting this kind of growth with a very solid and successful foundation. And if you look at the last 9 years, as presented here, in terms of annual revenue, in terms of adjusted EBITDA or in terms of evolutions of the market cap, you can see the trend and the dynamism of the company right now. Now I want to make a specific focus on BIMZELX first because we have some recent news that I wanted to share with you and particularly at the beginning of the year, for 2025 in the U.S., these notions of access and contracting with PBMs is an important one. So maybe I would like to take the time to help you to go through this slide. I'm sure you're interested on the right-hand side, but I would like you to focus on the left-hand side for a few minutes, if you don't mind. So you see here the evolution of the weekly prescriptions of BIMZELX in the psoriasis marketplace. And you can see all of our different competitors, and the bold line is the line with BIMZELX. So you can see that since the beginning, since day 1 actually, we have been able to demonstrate the value of the product for the prescribers and for the patients. And allow me to share with you 2 anecdotes which has been quite compelling, for me at least. First, it's the first asset that have been launched with 3 comparative trial versus standard of care demonstrating superiority. So we have been able to start to launch these products and to enter into the marketplace with 3 superior study that is standard of care. So what you see here is not an outcome of hazard. It's the result of the work that has been done before. Two, the power of the results in psoriasis, you need to look at it with 3 lenses. There is one which is a speed on set of action. And on these standpoints, the product has been able to be remarkably quick. We have patients coming back to the physicians after just 1 dose who have been resistant to a lot of different treatment and suddenly psoriasis have disappeared. Two is the depth of the response, 6 patients out of 10 do not have any plaque of psoriasis on their skin, which is significantly above anybody else. And for a patient, you may argue that 90% is good enough and so 100% is better, yes. But is it significant? Well, it is. It is for 2 reasons. First reason, you never know when the next plaque of psoriasis will happen. And when you suffer from this disease, you never know what will be your ability to do certain activity, social life, professional life as long as you have a risk to get some plaque. Having 100% of the skin clear means that you trust your product enough, then you can have a normal life. And normal life is what we achieve to get for this patient population. And three is the durability. We have 4 years now of follow-up open-label extension with clinical studies where we can demonstrate the sustainability of the results. So we knew we had this product in our hands. And the second element, which is compelling is that not just that the physician told us during the clinical study, it's not really a double blind because we know quickly what is the group with the active treatment. But we have physicians that also come back to us and say, "I've never seen that before." So my message here is that we have here a product that can deliver a significant value for the patient. And as I said, patients value means clinical -- unique clinical outcome, but it also means experience for the patient and it means also access. And this is where I would like to move to the right-hand side of the slide. You know how difficult it is to achieve access in the U.S., and particularly when you are launching a new product with a relatively heavy competition. We are really pleased with what we have been able to achieve for '25. So you can see on the left side of the slide, the before 2025, which is what we had until December '24, where for 2 out of 3 PBMs -- major PBMs in psoriasis, we get a double-step edit, meaning that the patient needed to get at least 2 biologics before being able to be covered for BIMZELX and one was excluded. And if you move to the right-hand side for the psoriasis, now we have no exclusion anymore. We're in one first line for one PBM and one single step edit. And when I told you that in terms of patient value, our objective was making sure that the patients who can -- who need the product could have access to the drug, this is what we mean by evolutions of this access. And we are very pleased with the evolution. Of course, it's an ability to make sure that we can continue to make it simple for the physician, for the patients to get access. And then on top of the psoriasis, you can see that we have also the rheumatological indications that what you see with PsA, AS and non-radiographic axSpA, so for the [indiscernible] arthritis, ankylosis, spondylitis and non-radiographic axSpA. You see where we were before, 2 excluded, 1 double-step. And we moved to double-step for 2 and single step 1. So it will be a year where we can really reach the scale where we can be able to provide the best possible solution for the patient at scale with an easy access for the majority of them. Now quickly, I would like to move to the other growth drivers that we have. So RYSTIGGO and ZILBRYSQ would have been launched more or less at the same period of time last year. We are now in more than 20 countries for these 2 products. As I mentioned, each of them have a specificity in terms of profile and in terms of patient profile and type. What we have seen from the first feedback of these patients' population is that it's really a very good and significant advantage to get different mechanism of action for treatment of these patients. Some of these patients like to get the control -- continuous control, the self-medication. Some of them prefer maybe a more classical approach. And that's what we can offer with these 2 plans. On top of that, it's 2 different mechanism of actions. One is really an anti-complement, acting at the heart of inflammation. The other is an anti-FcRn, which is accelerating the cleaning of the circulation for the high level of IgG. EVENITY, I mentioned it, the unique product and unique value proposition for the patients suffering from [ risk ] fracture. And here, the limit is the fact that sometimes people don't feel that they need to be treated because fragility fracture is not perceived as a disease. But it's really -- we still have a lot of patients who are not treated, and that's the only limit of this product. And FINTEPLA is now approved U.S., Europe and Japan, and we have 17 countries actually available. So as you can see, a strong foundation, a strong platform, a focus on research, innovation and a decade of growth ahead of us. So moving forward, our objective is really to continue to elevate the lives of people through our medicine with these 3 components. The first component, which is an ability to go beyond the symptoms and to go at the heart of the disease at the heart of the inflammation to have a chance to potentially modify the evolution of the disease. For a company like us focusing on chronic disease, the ability to modify the evolution of the disease, it's an objective that can help the patient to have the life that they want. Two, we need to make sure that we produce benefit and data who are compelling for the different stakeholders. It doesn't -- it's not sufficient to have a clinical -- statistical difference if it's not clinically meaningful. It's not sufficient to be clinically meaningful if it doesn't mean value for the society and for the payers and for the other stakeholders. And by doing that, we need to embrace and to engage the different stakeholders all together. And that's the third point. We need to really make sure that we can create value for the society as a whole and not just bringing a product on behalf of other part of society. And that 3 components: ability to have a significant impact on the patient, the benefits which are meaningful for society and an ability to work together is, I feel, the recipe for us as for others to be successful over the long-term. And this will help us to continue to deliver on a decade-plus of growth. You will see the portfolio. You have seen the differentiation of the portfolio. You have seen the first data points. We are very confident that 2025 will continue to illustrate the success of the strategy that the company that have been in place for the last 10 years and prepare the next phase of growth ahead of us. So with that, I would like to thank you very much, and then we are moving for the question, I guess. Thank you.

Fantastic, Jean-Christophe. Are there any questions in the room? Maybe I'll start. You touched on the strength of the new reimbursement around BIMZELX. But you didn't touch on the new indication that you also have at the end of last year in terms of HS, hidradenitis suppurativa. So maybe you could give us indications of how you see that uptake in '25.

Yes. Thank you, Richard, for the question. So we are in a very unique position in the sense that we have achieved psoriasis indication, the first indication in end of 2023. And then in the end of '24, we got the new indications in rheumatology and in HS very quickly. So we are now in the phase of accelerating of the growth and the launches for each of these indications while, classically, you have a new indication in a sequence, right? You start with one and then after a couple of years, you have another one and another one. So we are in this phase of [ egging ] all of that together. You have seen in the access as, Richard, you mentioned, that we have contracting now for the dermatology for psoriasis and for the rheumatological indication, HS arrived later in the year. It was a couple of months later. So we didn't get this contracting with HS. So it will be for the contracting next year, and we will get that this year. HS is a very -- HS sorry, the summary of what you say, hidradenitis suppurativa, which is almost impossible to pronounce. So HS is much easier. So HS is a very severe disease for which the offering was really poor. And its patients who are really very -- in a very difficult situation. Very often, they had to go to surgery. They have a lot of skin diseases. They have abscesses, they have tunnels, they have leakage that cannot be treated by anything, basically. So I think that the new offering and the biology demonstrates the value of the 17 and the value of the 17F and particularly on top of the [ aim ]. So we are very confident then that our propositions, and we have seen that through the clinical development, will bring significant value for the patient. But having said that, we need 2 things. One, we need to have these patients that started to be diagnostic earlier -- ad because if the lesions are too severe, it's more difficult and it will take time. And 2, we need really to make sure that the community of physicians who are able to treat this patient will be able to get access to these patients. Because very often, the patients are completely fragmented and isolated in the different parts. So we need to bring them back to the dermatologists and making sure that they are well treated. From an access standpoint, that will be covered, let's say, in the contracting in '25. But today, it's an area where there is less competition, there is less offering and the medical need is huge. So it's a very important and significant growth driver for the product. But I don't want to leave you with this idea that this is the main growth driver, right? We still have a lot to go because we are launching the other indications at the same time. So we are pushing that independently from each other with specific and focused people on each patient's population. But psoriasis, psoriatic arthritis, AS, non-radiographic axSpA and HS are really the big indication for us in the future for BIMZELX.

And you've been ahead of the launch a little bit in Europe in terms of the timings of the launch. So across the indications, what have you seen in Europe or ex U.S. in terms of the different indications and the ramp-up?

So first of all, there is no difference from a patient standpoint in terms of feedback that we got from physicians or from patients. It's really amazing to see that real-life data and the real-life experience is really more than confirm what we have achieved in clinical trial. In fact, it's even more. We have some physicians that have been our investigators who have told us the reality of what I see in the patients is even better than what I have seen in the clinical trial because sometimes clinical trials are creating a weight and it's not really a real life. There is no differences also from a geographical standpoint. I mean, the reaction of the patients in Japan, in Europe and U.S. are really the same. And so far, as soon as the physicians have started to have built the confidence with the drug and have started to treat the patients, the ability then to expand the prescription is coming naturally. Now as you have said, we were a little bit earlier in Europe than in the U.S. So you have seen a penetration which was a little bit better because of the timing. And access is already a little bit different in Europe versus the U.S. or in Japan versus U.S. So in certain markets, because of this free access or access which is easier, the penetration is faster than in others where there are some limitation. But the feedback is very strong and very positive. And so every signal that we get from Europe strengthen our confidence in the ability to reach the leadership in U.S.

And in terms of patient retention or duration of treatment, the efficacy is really good. I think some of the clinical trial data had very good durability of response as well. What are you seeing across the different geographies with patients?

So we have been able, through open-label extension, for example, to get some data. And we have now up to 4 years of open-label extensions and data for BIMZELX, where we have seen a very powerful duration of actions and stability of the return. So we are very reassured on the ability to maintain the results over time. We had -- in some European countries, in Germany, in particular, we have been able to get some data after the first year in real life. And the data are at the same level than what we had in the clinical trial. So it's also very assuring. However, the ability of the current systems and environments to get longitudinal data in real life, it's quite difficult. U.S., there is this changement of benefit sometimes every year. So it's not that easy to have a very precise and accurate data on the persistence and the durability. But from what we have seen, we are very reassured on the ability to maintain the results. Now it's quite logic in a sense, right? I mean, if you have suffered from a chronic disease for many years and suddenly you find the treatment that clean your skin from psoriasis completely, you are relatively highly motivated to maintain and to continue to be treated as long as you see the benefit. So the engagement of the patient is strong as long as the data and the outcome is positive. So that's also play a role. The fact that we get 6 patients out of 10 completely with clear skin accelerate the patient engagement.

And you talked about the better access. Does that have any sort of -- I presume with better access, you would push harder maybe on marketing and selling. Does that have any cost implications for -- as we go into '25?

So there was a sequence in that. So maybe I just would like to keep the sequence with you. When we launched the products in the U.S. in particular, we put in place what we name the bridge program. And the bridge program was put in place, in a sense, in order to achieve 2 things. One was to increase as quickly as possible the volume of patients who get the benefit of the drug. And because we had a very positive outcome, we were very confident that the sooner we could get a big numbers of patients having been treated, we will get a positive momentum. So that was one. And the second was to make the life of the patient and the physician easy. You don't want the physicians and the patients to be concerned and to spend a lot of time into benefit investigations, prior authorization, these type of things. So making sure that for the physician standpoint, if the physician decided, yes, I want these patients to be treated with BIMZELX, then it would be easier. We got that very well. So in a sense, we have been able to increase the volume relatively early and to get these numbers of patients following a prescription would be able to get access to the treatment and be covered by the treatment. So that creates an environment, in a sense, by which we have been able to produce a volume of patients and to get data on the reality of these patients that have created an ability to influence, in a sense, the system to recognize this value and so to provide access. And I do feel that if -- as you have seen, if we have no exclusion is because of the quality of the product. And so we didn't want to leverage price as a way to have a better access. We just want to be consistent with the marketplace and making sure that we get the kind of the rules of the market, but not creating an additional incentive surprise. But we also wanted to recognize that because of the superiority that we had versus standard of care and because of the quality of the outcome for the patient, it was important for PBMs also to make sure that we will not exclude such a product for their customer base.

I wanted to pivot to myasthenia gravis and RYSTIGGO. You came a little bit behind, a competitor had a very strong launch of their FcRn product. And yet RYSTIGGO has -- the uptake has been pretty strong as well. Do you think the market might be bigger? Do you think -- what is the secret of the success of that ramp-up?

So there are 2 elements which -- or maybe 3 that I would like to highlight for that. First, don't forget that these patients before these new generations of new treatments and new biologics, these patients had a very limited solutions to be treated at home. The only solution was to go to the hospital a few days per month, 4, 5 days per month, to get either an IVIG or plasmapheresis. So imagine your life, if you have to go to the hospital 4 days every month in terms of planning, in terms of activities, in terms of independence. It's a huge constraint. So initially, we thought that the arrival of these new categories of treatment will create a very quick switch and push from these patients who would be happy to leave hospitals and to go to the infusion centers close to them and to have much less burden and not have to stay several days at the hospitals. It's happening, of course, but it takes time. And so the notion of the market is bigger than expected, I think the market is continuing to evolving to be more treated with this treatment. But there are still patients who are treated in a different way. The second element is it's a market which is quite heterogeneous. It's this heterogeneity and diversity is a diversity from a patient standpoint. A lot of patients have different symptoms, they sometimes have different target, the MuSK versus the ACH. So they have a different way to express the disease. And so the treatment and the responders are not always the same. So there is no one treatment that fits everything, which means also that the reason why for us it's very important and it has been a good value proposition is to get a portfolio of assets to propose for these physicians and these patients. And having a new C5 which was a daily injection, very easy to do to control the inflammation and an anti-FcRn allow us to cover the different needs of the different patient population. So to go back to your point, yes, we were not the first, but we think we have a good value proposition with our products in terms of indication, in terms of specificity. And we think that we cover a broader spectrum of diversity of the patient with the 2 assets.

Maybe on to ZILBRYSQ then. How does that -- you talked about the heterogeneity of patients. How is that fitting in? And what's been the response to that? And how do you go to market with the 2?