Inspired by patients.
`Driven by science.
`
`Anna,
`living with epilepsy
`
`2014
`
`ANNUAL REPORT
`
`ARGENTUM Exhibit 1165
`Argentum Pharmaceuticals LLC v. Research Corporation Technologies, Inc.
`IPR2016-00204
`
`00001
`
`

`
`CONTENT
`
`
`
`I.
`
`II.
`
`
`
`
`
`
`
`OUR VISION
`
` LETTER TO OUR
`STAKEHOLDERS
`
` MANAGEMENT
`REPORT
`OF THE BOARD
`OF DIRECTORS
`
`1. Corporate
`governance
`statement
`2. Business
`performance
`review
`3. Operating and
`financial review
`
`III. CONSOLIDATED
`FINANCIAL
`STATEMENTS
`
`IV.
`
` NOTES TO THE
`CONSOLIDATED
`FINANCIAL
`STATEMENTS
`
`2
`
` 10
`
`24
`
`26
`
`54
`
`58
`
`66
`
`74
`
`V.
`
` RESPONSIBILITY
`STATEMENT
`
`144
`
`VI.
`
` REPORT OF
`THE STATUTORY
`AUDITOR
`
`146
`
`VII. ABBREVIATED
`STATUTORY
`FINANCIAL
`STATEMENTS
`OF UCB SA
`
`148
`
`VIII. CORPORATE SOCIETAL
`RESPONSIBLITY
`PERFORMANCE
`REPORT
`
`152
`
`IX. GLOSSARY
`
`176
`
`Philip, living with
`axial spondyloarthritis
`
`OUR VISION
`
`Meeting patients’ unmet needs
`
`Just because our medicines treat thousands of
`people around the world does not mean our
`job is done. For us, it is vital that we listen to the
`constantly evolving needs of patients and their
`families. Working with physicians and healthcare
`professionals, we are engaging more with patients
`to better understand their clinical, economic,
`social and personal needs. What matters most
`is how they feel in their everyday life as they
`progress on their healthcare journey. Because we
`are not just treating a disease. We are caring for
`individual people.
`
`Patients inspire us to bring them value through
`more cutting-edge science, more innovative
`drugs, and more practical solutions – so that they,
`and their carers, can get on with their lives.
`
`2
`
`O U R V I S I O N
`
`U C B A N N U A L R E P O R T 2 0 1 4
`
`00002
`
`

`
`People with severe diseases inspire us to
`make a meaningful difference to as many
`lives as possible.
`I demand the best of myself and
`others. I execute flawlessly and
`strive for continuous improvement.
`
`>
`
`PERFORMANCE
`PASSION FOR
`
`IN N O VATIO N
`
`E
`
`R
`
`E N T
`
`>
`
`S H I P
`
`R
`
`U
`
`E N E
`
`R
`
`P
`
`INTEGRITY
`
`>
`
`People living with severe diseases rely on
`us to develop new creative solutions that
`will have a positive impact on their lives.
`I understand patient needs
`better than the competition and
`translate this insight into distinctive
`solutions.
`
`>
`
`Entrepreneurs think big and constantly
`focus on creating superior customer value.
`I relentlessly take on selected
`initiatives with energy, resilience
`and a “can do” attitude.
`
`Overarching principle by which we
`operate, engage and interact with
`customers and other stakeholders,
`as well as one another.
`I constantly act in a transparent,
`authentic and ethical way.
`
`EMBRACING
`DIFFERENCES
`
`C
`
`O
`
`A C
`
`C A R E
`
`>
`
`Diversity of thoughts and an inclusive
`approach are cornerstones of success.
`I actively listen, seek and embrace
`different perspectives.
`
`>
`
`Holding ourselves and each other
`accountable delivers superior and
`sustainable value to patients.
`I’m empowered and act as if UCB’s
`success as a whole depends on
`my contribution.
`
`U
`
`N T A BILIT Y
`
`>
`
`Caring for people with severe diseases,
`customers and colleagues is at the heart
`of what we do and makes us better.
`I act with empathy, openness,
`generosity and helpfulness – and I treat
`others as I would like to be treated.
`
`O U R V I S I O N
`
`3
`
`U C B A N N U A L R E P O R T 2 0 1 4
`
`00003
`
`

`
`2014 MILESTONES (JAN.-JUNE)
`
`2
`
`FEBRUARY
`
`Jean-Christophe Tellier
`appointed as next Chief Executive
`Officer (effective January 2015)
`
`H
`
`C
`
`A R
`
`M
`
`3
`
`Partnership with Sanofi for breakthrough
`innovation in immune-mediated diseases
`
`UCB returned the global rights of
`tozadenant to Biotie
`
`E Keppra® filed for monotherapy in Japan
`
` UCB convertible bond conversion
`
`Publication in the New England
`Journal of Medicine of results
`from a Phase 2 trial evaluating
`romosozumab in postmenopausal
`women with low bone mass
`
`Partnership with Biogen Idec
`to develop and commercialize
`multiple sclerosis and hemophilia
`therapies in Asia
`
`APRIL
`
`4
`
`AGM: Kay Davies appointed
`as Independent Director
`and Cédric van Rijckevorsel
`as Director
`Strategic research alliance
`launched with Weill Cornell
`Medical College (U.S.)
`
`JANUARY
`
`1
`
`MAY
`
`5
`
` UCB wins Employer (global)
`of the Year award in the U.K.
`
`6
`
`JUNE
`
`Partnership with the European Investment
`Bank (EIB) to accelerate development of
`new medicines for patients
`UCB4940: Phase 2 started; results expected
`in H2 2015
` UCB’s first ever Global Green Planet Day
`
`4
`
`O U R V I S I O N
`
`U C B A N N U A L R E P O R T 2 0 1 4
`
`00004
`
`

`
`2014 MILESTONES (JULY-DEC.)
`
`Dermatology partnership with Dermira
`to broaden patient access to Cimzia®
`
`Brivaracetam positive topline results from
`the latest Phase 3 study
`
`E Keppra® injectable formulation received
`marketing authorization in Japan
`Launch of the Mozambique Epilepsy
`Initiative in collaboration with WHO
`
`J U L
`
`Y
`
`7
`
`8
`
`A U G U S T
`
` UCB joined industry peers
`in committing to more
`data transparency through
`responsible sharing of our
`clinical trials data
`
`S E P T E M B E R
`
`9
`
`Vimpat® monotherapy approved
`and launched in the U.S.
`Global employee survey:
`72% engagement rate
`
`OCTOBER
`
`10
`
`Vimpat® positive Phase 3
`study in Asia
`
`Official opening of biotech
`plant in Bulle, Switzerland
`
`UCB honored by The Lupus
`Foundation of America
`
`N
`
`11
`
`O V E M B E R
`
`Decision to divest U.S. specialty
`generics business, Kremers Urban
`Partnership with Daiichi
`Sankyo in Japan to broaden
`access to Vimpat®
`AkzoNobel 2014 Sustainability
`Award in China
`
`CESS
`
`2015
`
`O N O
`
`C
`
`U
`
`S
`
`U R W
`
`AY TO
`
`Farewell to Roch Doliveux
`
`12
`
`DECEMBER
`
`O U R V I S I O N
`
`5
`
`U C B A N N U A L R E P O R T 2 0 1 4
`
`00005
`
`

`
`UCB TODAY
`
`Cimzia®
`
`Vimpat®
`
`Neupro®
`
`Keppra®
`
`• Crohn’s disease
`• Rheumatoid arthritis
`• Psoriatic arthritis
`• Axial
`spondyloarthritis/
`ankylosing
`spondylitis
`
`Reaching more than
`
`patients, across
`
`64 000
`55 countries
`797 million
`
`net sales
`
`Astellas (Japan)
`Dermira (psoriasis)
`
`Phase 3
`• juvenile idiopathic
`arthritis
`• psoriasis
`
`€
`
`€
`
`Epilepsy POS1
`
`Reaching more than
`
`patients across
`
`383 000
`46 countries
`471 million
`
`net sales
`
`Daiichi Sankyo
`(Japan)
`
` Approval in epilepsy
`
`POS1 monotherapy
`(U.S.)
`
`Phase 3:
`• epilepsy POS1 –
`monotherapy EU
`• epilepsy PGTCS2
`• epilepsy POS1
`pediatric
`
`€
`
`• Parkinson’s disease
`• Restless legs
`syndrome
`
`Reaching more than
`
`• Epilepsy POS1
`• Epilepsy PGTCS2
`• Epilepsy myoclonic
`seizures
`
`patients across
`
`263 000
`46 countries
`200 million
`
`net sales
`
`€
`
`Reaching more than
`
`of patients across
`
`1.1 million
`47 countries
`665 million
`
`net sales
`
`Otsuka (Japan)
`
`Otsuka (Japan)
`
`Approval in epilepsy
`POS1 monotherapy
`and IV formulation
`(Japan)
`
`6
`
`O U R V I S I O N
`
`Lakeisha,
`living with
`epilepsy
`
`U C B A N N U A L R E P O R T 2 0 1 4
`
`00006
`
`

`
`UCB TOMORROW
`
`romozosumab
`
`epratuzumab
`
`brivaracetam
`
`POTENTIAL
`INDICATION
`
`PREVALENCE
`
`Osteoporosis
`
`75 million
`
`people4
`
`Systemic lupus
`erythematosus (SLE)
`
`650 000 people5
`
`PARTNER
`
`Amgen
`
`Immunomedics
`
`R&D
`PHASE
`
`Phase 3
`• postmenopausal
`women (results:
`H1 2016)
`• men (results: H2 2016)
`
`STUDY
`
`• ARCH
`• FRAME
`
` Phase 3
`(results: H1 2015)
`
`• Embody™ 1
`• Embody™ 2
`
`Epilepsy POS1
`
`5 million
`
`people6
`
`Filings
`(U.S. & EU)
`
`• N° 1252
`• N° 1253
`• N° 1254
`• N° 1358
`
`R&D MILESTONES
`
`2015
`H1
`
`2015
`H2
`
`2016
`H1
`
`2016
`H2
`
`2017
`
`brivaracetam
`epilepsy POS1 –
`adj. therapy
`U.S. and EU filings
`
`UCB0942
`highly drug
`resistant epilepsy
`Phase 2 start
`
`romosozumab
`osteoporosis in post-
`menopausal women
`Phase 3 results
`
`romosozumab
`osteoporosis in men
`Phase 3 results
`
`Vimpat®
`epilepsy POS1 – ped.
`adj. therapy
`Phase 3 results
`
`Vimpat®
`PGCTS2 –
`adj. therapy
`Phase 3 start
`
`UCB5857
`immunology
`Phase 2 start
`
`Cimzia®
`C-Early™
`Phase 3 results
`
`Cimzia®
`Exxelerate™
`Phase 3 results
`
`Cimzia®
`psoriasis
`Phase 3 results
`
`epratuzumab
`SLE3
`Phase 3 results
`
`UCB4940
`psoriatic arthritis
`Phase 2 results
`
`Cimzia®
`psoriasis
`Phase 3 start
`
`Vimpat®
`epilepsy POS1
`monotherapy EU
`Phase 3 results
`
`Cimzia®
`juvenile IA 7
`Phase 3 results
`
`dapirolizumab
`pegol
`SLE3
`Phase 2 start
`
`Immunology
`Neurology
`
`For more details, please refer to the R&D update (p. 56-57)
`1 POS: partial-onset seizures
`2 PGTCS: primary generalized tonic-clonic seizures
`3 SLE: systemic lupus erythematosus
`4 International Osteoporosis Foundation.”Facts and Statistics.” Accessed 10 February 2015 from www.iofbonehealth.org/facts-statistics#category-16
`5 Decision Resource – December 2014 – Number of diagnosed prevalent cases of systemic lupus erythematosus in the major pharmaceutical markets – 2014
`6 Decision Resource – December 2014 – Number of diagnosed prevalent cases of epilepsy in the major pharmaceutical markets – 2014
`7 IA: idiopathic arthritis
`
`O U R V I S I O N
`
`7
`
`U C B A N N U A L R E P O R T 2 0 1 4
`
`00007
`
`

`
`2014 KEY PERFORMANCE INDICATORS
`
`710 000
`PATIENTS
`
`€ 1.69
`
`core EPS
`
`8 684
`
`employees
` globally
`
`€ 609
`
`million REBITDA
`
`R&D
`
`expenses
`
`of revenues28%
`
`€ 199
`
`million NET PROFIT
`
`€ 3.3
`
`billion revenue
`
`c
`
`o unt
`
`rie s
`
`8
`
`O U R V I S I O N
`
`U C B A N N U A L R E P O R T 2 0 1 4
`
`00008
`
`

`
`REACHING PATIENTS AROUND THE WORLD
`
`In recent years we have extended our presence to more global regions and patients than
`ever before. And we continue to grow. Our high rate of investment in pioneering science,
`backed up by strong alliances with professional partners, allows us to bring our neurology
`and immunology drugs to hundreds of new patients every day and across the globe.
`
`Our planned sustainable growth will come from ground-breaking science and from bringing
`added value to patients, as well as being the preferred partner to all our other stakeholders.
`
`It’s summed up by UCB’s twin motivations: Inspired by patients. Driven by science.
`
`NORTH AMERICA
`
`EUROPE
`
`JAPAN
`
`€ 1 154 m
`% 39
` 1 815
`
`NET SALES
`
`NET SALES
`
`EMPLOYEES
`
`
`
`
`
`
`
`€ 1 146 m
`% 39
` 4 237
`
`NET SALES
`
`NET SALES
`
`EMPLOYEES
`
`
`
`
`
`
`
`€ 197 m
`% 7
` 319
`
`NET SALES
`
`NET SALES
`
`EMPLOYEES
`
`
`
`
`
`
`
`REST OF THE WORLD
`
`EMERGING MARKETS
`
`€ 115 m
`% 4
` 137
`
`NET SALES
`
`NET SALES
`
`EMPLOYEES
`
`
`
`
`
`
`
`
`
`
`
`
`
`€ 326 m
`% 11
` 2 176
`
`NET SALES
`
`NET SALES
`
`EMPLOYEES
`
`O U R V I S I O N
`
`U C B A N N U A L R E P O R T 2 0 1 4
`
`99
`
`U C B A N N U A L R E P O R T 2 0 1 4
`
`00009
`
`

`
`LETTER TO OUR STAKEHOLDERS
`
`Jean-Christophe Tellier,
`CEO (as of January 2015)
`
`Roch Doliveux,
`CEO (until December 2014)
`
`Gerhard Mayr,
`Chairman of the Board
`
`CONTINUING OUR GROWTH PATH
`
`1 0
`
`I.
`
`00010
`
`

`
`Dear shareholders, partners, colleagues,
`
`and those living with severe diseases,
`
`At UCB we share an ambition to transform the lives of people living with severe diseases.
`Our focus is on neurology and immunology disorders – putting patients at the center
`of our world. Everything we do begins with one simple question, “How will this make
`a difference to the lives of people living with severe diseases?” We aim to deliver
`differentiated and sustainable value to patients, which leads to increased value for UCB
`and its shareholders.
`
`In 2014, 710 000 people, 22% more compared to 2013, living with severe diseases such
`as inflammatory TNF-mediated diseases, epilepsy or Parkinson’s disease have used one
`of our core medicines, Cimzia®, Vimpat® or Neupro®. This made it a year special to us
`at UCB and encourages us to move forward.
`
`2014 was also the year of the CEO-transition: from Roch Doliveux, who successfully
`transformed UCB from a conglomerate into a biopharma leader and who implemented
`the vision of a patient-centric organization, to Jean-Christophe Tellier. Under his
`leadership, UCB teams are now working to bring patient centricity to the next level
`by further enhancing connection to patients, improving access to our medicines,
`strengthening the current focus of the company.
`
`In the following pages, we illustrate the progress made on our growth principles in 2014:
`
`1. Grow Cimzia®, Vimpat® and Neupro®
`2. Prepare brivaracetam, epratuzumab and romosozumab
`3. Deliver breakthrough medicines
`4. Reach competitive profitability
`5. Ensure quality and compliance with laws and regulations
`6. Develop passionately engaged colleagues and business partners
`7. Focus and new solutions in a changing and challenging environment
`
`1 1
`
`00011
`
`

`
`1.
`
`GROW CIMZIA®, VIMPAT® AND NEUPRO®
`
`In 2014, combined net sales of
`Cimzia®, Vimpat® and Neupro® grew
`to € 1 468 million, representing 50%
`of UCB’s global net sales.
`
`Cimzia® (certolizumab pegol)
`reached 64 000 patients (+25%) and
`is now available to people living with
`inflammatory TNF-mediated diseases
`in more than 55 countries, including
`Brazil and Japan (partner: Astellas),
`and generated world-wide net sales of
`€ 797 million (+34% or 35% at constant
`exchange rates). To meet the growing
`demand for Cimzia® across the world,
`UCB invested into its new biotech plant
`in Bulle (Switzerland) – one of the
`largest and most modern in Europe.
`The plant now needs to be validated
`by international regulatory authorities
`over the next 18 months.
`
`In September 2014, FDA approved
`Vimpat® (lacosamide) as monotherapy
`in partial onset seizures; this approval
`broadened the therapeutic choices
`of patients living with epilepsy in the
`U.S. A separate Vimpat® monotherapy
`development program is under way
`for patients in Europe and Japan as the
`regulatory requirements are different.
`The monotherapy indication represents
`an important opportunity to reach even
`
`more adult epilepsy patients still living
`with uncontrolled seizures. Following
`the positive results of the Phase 3
`clinical trial in Asia, UCB partnered
`with Daiichi Sankyo for bringing
`Vimpat® to Japan, and a filing for
`marketing authorization is scheduled
`for 2015. Vimpat® is now available to
`383 000 people living with epilepsy in
`46 countries, including Russia, Mexico
`and Brazil, where Vimpat® is approved
`as adjunctive therapy in the treatment
`of partial-onset seizures in adults with
`epilepsy since February 2014. Vimpat®
`generated world-wide net sales of
`€ 471 million (+15% at actual and
`constant exchange rates).
`
`Neupro® (rotigotine), the patch for
`Parkinson’s disease and restless legs
`syndrome, is available in 46 countries
`and continues to grow especially
`supported by our partner in Japan,
`Otsuka. The world-wide net sales of
`Neupro® reached € 200 million, an
`increase of 10%. In Brazil, Neupro® was
`approved as a treatment for Parkinson’s
`disease; making it the second UCB
`neurology approval within 2014. In
`China, Neupro® reported positive
`Phase 3 results; submission is planned
`in 2015.
`
`Keppra®
`
`N e u p r o ®
`
`V i m
`
`p
`
`a t®
`
`m un olo gy
`Allergy
`
`S
`
`O T H E R
`
`Im
`
`N
`
`C
`
` 1 8 %
`
` 9 %
` 1
` 1
`
`%
`
`%
`
`3 0
`
`6 5
`
`259
`1
`
`3%
`
` 2
`
` 7 %
`
`1 6
`
`%
`
`665
`
` 2 0 0
`
`4
`
`7 1
`
` 27%
`
`797
`
`€ 2 938
`
`million net sales
`
`Cimzia®
`
`THERAPEUTIC
`BREAKDOWN 2014
`
`Immunology
`
`Neurology
`
`Cimzia®
`
`Inflammatory TNF–
`mediated diseases and
`Crohn’s disease
`
`EXPECTED AT LEAST
`
`€ 1.5 billion
`€ 797 million
`
`peak sales*
`
`
`
`2014 NET SALES
`
`Vimpat®
`
`Epilepsy partial
`onset seizures
`
`EXPECTED AT LEAST
`
`€ 1.2 billion
`€ 471 million
`
`peak sales*
`
`
`
`2014 NET SALES
`
`Neupro®
`
`Parkinson’s disease and
`restless legs syndrome
`
`EXPECTED AT LEAST
`
`€ 400 million
`€ 200 million
`
`peak sales*
`
`
`
`2014 NET SALES
`
`* by the end of the decade
`
`1 2
`
`U C B A N N U A L R E P O R T 2 0 1 4
`
`L E T T E R T O O U R S T A K E H O L D E R S
`
`00012
`
`

`
`Chen Guoqiong,
`living with epilepsy
`
`Augmenting our growth potential
`for our core medicines in emerging
`markets, in January 2014 we
`announced an important partnership
`with Biogen Idec, a U.S.-based
`biopharma company, to develop
`and commercialize selected Biogen
`Idec neurology and hematology
`products across South East Asian
`markets, and China. This partnership
`significantly enhances UCB’s neurology
`presence in Asia, and represents a
`strong endorsement for our growing
`capabilities in this important region.
`
`1 3
`
`P E
`
`O
`
`R
`
`E U
`
`J A P A N
`
`EMERGING MARKETS
`
`OTHER
`
` 7 %
`
` 11%
`
` 4%
`
` 3 9 %
`
` 1 1 4 6
` 1 9 7
` 326
` 115
`
` 1 154
`
` 39
`
`%
`
`N
`
`ORTH AMERICA
`
`Keppra® (levetiracetam) continues
`to be an important treatment option
`for people living with epilepsy world-
`wide. In March 2014, E Keppra® was
`filed with the Japanese authorities for
`monotherapy in partial onset seizures
`and approved in February 2015. The
`impact of generic erosion following
`loss of exclusivity first in the U.S. (2008)
`followed by EU (2010) continues to
`be meaningful, driving global Keppra®
`net sales down 7% to € 665 million
`(-5% at constant exchange rates).
`These were mitigated by net sales in
`Japan (partner: Otsuka), and emerging
`markets such as China growing by
`double digit rates.
`
`In collaboration with the China
`Association Against Epilepsy (CAAE),
`UCB has launched Project Dandelion,
`a medical education initiative in China
`to cultivate quality and sustainable
`care for patients living with epilepsy.
`This training program for health care
`professionals aims to improve accurate
`diagnosis, appropriate treatment
`and adherence for epilepsy patients
`in cities, as well as in rural areas. To
`meet the growing demand for UCB
`medicines in China, we expanded our
`manufacturing facilities in Zuhai.
`
`GEOGRAPHICAL
`BREAKDOWN 2014
`
`€ 2 938
`
`million net sales
`
`L E T T E R T O O U R S T A K E H O L D E R S
`
`U C B A N N U A L R E P O R T 2 0 1 4
`
`00013
`
`

`
`2.
`
`PREPARE BRIVARACETAM,
`EPRATUZUMAB AND ROMOSOZUMAB
`
`We are on our way to bring three new
`potential medicines to people living
`with severe diseases. Our development
`projects in neurology and immunology
`are advancing as planned in multiple
`Phase 3 studies, the last development
`phase before regulatory review and
`approval, the foundation for potential
`patients’ access:
`
`Romosozumab, co-developed with
`our partner Amgen, is a potential
`breakthrough treatment for people
`living with bone loss disorders like
`osteoporosis. Romosozumab is a
`humanized monoclonal antibody
`that binds to sclerostin, a naturally
`occurring protein secreted from bone
`cells that regulates bone formation.
`By binding to and blocking sclerostin,
`romosozumab stimulates bone
`formation and reduces bone resorption
`(break-down), making it different
`from most available treatments for
`osteoporosis. Due to its bone-forming
`properties, romosozumab may result
`in new treatment strategies to help
`manage bone diseases. Two large
`Phase 3 studies involving more than
`10 000 women with osteoporosis are
`underway in the U.S., Europe, Japan
`
`and South America. Osteoporosis
`however, is not “just a women’s
`disease”. Worldwide, approximately 1 in
`5 men over 50 will break a bone due
`to osteoporosis. This is why we have
`another Phase 3 study underway for in
`men with osteoporosis.
`
`The monoclonal antibody
`epratuzumab, in-licensed from
`Immunomedics, is a potential novel
`treatment for the auto-immune disease
`lupus (systemic lupus erythematosus
`or SLE). Auto-antibodies, produced by
`autoreactive B cells, are known as key
`factors in the origin and maintenance
`of SLE resulting in inflammation
`and tissue damage. Epratuzumab
`inhibits the activation of B cells,
`while preserving immune function.
`The Phase 3 program is expected
`to report first results later this year.
`In October 2014, the Lupus Foundation
`of America (LFA), a U.S. organization
`focused on research, education and
`advocacy in lupus, honored UCB for
`the company’s pioneering research in
`the development of new treatments for
`lupus and commitment to improving
`the quality of life for those living with
`the chronic disease.
`
`AROUND THE WORLD, 1 IN 3 WOMEN AND 1 IN 5 MEN
`OVER 50 ARE AT RISK OF AN OSTEOPOROTIC FRACTURE1
`
`HEALTHY BONE
`
`OSTEOPOROUS BONE
`
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`UCB’S LATE-STAGE DEVELOPMENT PIPELINE
`
`brivaracetam
`epilepsy POS/adjunctive therapy
`
`epratuzumab
`systemic lupus erythematosus
`romosozumab
`osteoporosis in
`postmenopausal women
`romosozumab
`osteoporosis in men
`
`POS: partial-onset seizures
`
`PHASE 1
`
`PHASE 2
`
`PHASE 3
`
`FILING
`
`Filed (Jan. 2015)
`
`Phase 3 results: H1 2015
`(Partner: Immunomedics)
`
`Phase 3 results: H1 2016
`(Partner: Amgen)
`
`Phase 3 results: H2 2016
`(Partner: Amgen)
`
`Brivaracetam, a next generation
`compound for epilepsy is supported
`by one of the largest Phase 3
`programs in the disease, with more
`than 3 000 patients already treated
`with brivaracetam, some for over
`8 years. Patients taking brivaracetam
`do not need dose titration, receiving
`a therapeutic dose from treatment
`initiation. In July 2014, positive
`topline results from the latest Phase 3
`
`study with brivaracetam showed
`reduced partial-onset seizure
`(POS) frequency and improved
`responder rates, both with statistical
`significance. We just filed marketing
`authorization applications with the
`U.S. and EU regulatory authorities
`to obtain approval for brivaracetam
`as adjunctive treatment for partial
`onset seizures in patients 16 years
`and older with epilepsy.
`
`1 International Osteoporosis Foundation.”Facts and Statistics.” Accessed 10 February 2015
`from www.iofbonehealth.org/facts-statistics#category-16
`
`R&D
`
`PROCESS
`
`REGULATORY
`DECISION
`• Approval
`• Rejection
`• Further data
`required
`
`FILING
`Review of
`extensive
`documentation
`by health
`authorities (FDA,
`EMA, PMDA, etc.)
`
`3
`
`PHASE
`• Safety
`• Efficacy
`• Tolerability
`• Large
`patients
`population
`(1 000-3 000)
`
`2
`
`PHASE
`• Safety
`• Efficacy
`• Tolerability
`• Patients
`(100-300)
`
`1
`
`PHASE
`• Safety
`• Tolerability
`• Healthy
`volunteers
`(< 100)
`
`PRE-CLINICAL
`RESEARCH
`
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`3.
`
`DELIVER BREAKTHROUGH MEDICINES
`
`In our early stage pipeline, we focus
`on potential breakthroughs that offer
`true differentiation and value added for
`patients and systematically discontinue
`projects that do not. Our established
`research strategy for the breakthrough
`focuses on first or second-in class
`innovative approaches, prioritizing
`projects that have a clear proof of
`concept and clear end points. The
`productivity, wealth and quality of our
`pipeline – internal and external – allow
`us to make these choices.
`
` We are passionate about science.
` And this is what drives us to create
` a pipeline that will make a real difference
` in people’s lives.
` How do we do it? We maximize our key
` asset: our pioneering expertise in both
` small and large molecules.
` We prioritize clearly. We make robust
` decisions. All of which means we can
` rapidly advance promising molecules
` into innovative therapies.
`
`In 2014, we significantly broadened
`our early pipeline and saw positive
`results across the assets in Phase 1
`(first test in humans/safety in patients)
`and moving into Phase 2 (proof of
`concept test in patients).
`
`UCB and Sanofi have entered into a
`scientific and strategic collaboration
`for the discovery and development
`of innovative anti-inflammatory small
`molecules which have the potential
`to treat a wide range of immune-
`mediated diseases in areas such as
`gastroenterology and arthritis. We are
`partnering Sanofi’s significant expertise,
`strong capabilities and resources with
`UCB’s cutting-edge research skills
`and breakthrough innovations. We
`strongly believe that together we can
`maximize the opportunity to treat
`diseases currently treated by biologic
`agents with small molecules and thus
`benefit millions of people suffering
`from severe diseases. The project is at
`pre-clinical stage.
`
`PHASE 1
`
`PHASE 2
`
`PHASE 3
`
`FILING
`
`UCB4940 (IL 17 A/F)
`psoriatic arthritis
`
`UCB0942 (PPSI)
`highly drug resistant epilepsy
`
`UCB5857 (PI3K Delta inhibitor)
`immune-inflammatory diseases
`
`dapirolizumab pegol/
`CDP7657 (CD40L antibody)
`systemic lupus erythematosus
`
`UCB7665
`immunological diseases
`
`
`
`
`
`
`
`Phase 2 results: H2 2015
`
` Phase 2 start: H2 2015
`
` Phase 2 start: H2 2015
`
` Phase 2 start: 2016
`
`(Partner: Biogen Idec)
`
` Phase 1 ongoing
`
`Immunology
`Neurology
`
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`4.
`
`REACH COMPETITIVE PROFITABILITY
`
`We invested 28% of revenue for a
`promising early and late-stage pipeline
`of potential new medicines. UCB has
`made the conscious strategic decision
`to invest a high amount in R&D (above
`industry average), to build the basis
`for sustainable long-term growth in
`an environment that continues to
`increasingly demand levels of clear
`differentiation and value for patients
`compared to what is already available
`on the market. As a result of this long-
`term strategic growth decision, UCB’s
`short-term profitability margin is below
`industry average.
`
`We reached our financial targets
`in 2014, with revenues totaling at
`€ 3.3 billion, generating an underlying
`profitability (recurring EBITDA) of
`€ 609 million and core earnings per
`share of € 1.69. The Board of Directors
`is proposing a gross dividend of € 1.06
`(2013: € 1.04), in-line with the dividend
`policy of UCB. Marketing and selling
`expenses benefited from synergies
`and efficiencies and tight expense
`management showed results and
`decreased 2% versus 2013, while R&D
`expenses of € 928 million remained
`stable at 28% of our revenues to fund
`our highly innovative pipeline and
`breakthrough research.
`
`In November 2014, UCB announced
`its decision to divest its U.S. specialty
`generics business Kremers Urban.
`Our growing core business and UCB’s
`progressing early and late-stage
`pipeline now allows us to focus even
`more on providing innovative solutions
`to patients living with severe diseases.
`Following this decision, the Kremers
`Urban assets are treated differently
`within UCB Group accounts: Kremers
`Urban is now treated as “discontinued
`operation” since 2013 onwards; hence
`it is also no longer included in the
`key performance indicators for UCB’s
`recurring underlying performance.
`
`We are targeting a 30% recurring
`EBITDA margin in 2018, bringing UCB
`to industry average margin level. To
`reach our competitive profitability, we
`expect that the increase in net sales
`generated by Cimzia®, Vimpat® and
`Neupro® world-wide, the continuously
`improved reallocation of resources
`as well as tight cost management
`through a disciplined activity based
`approach should gradually improve our
`competitive profitability and accelerate
`towards peer level in 2018.
`
`€ million
`
`REVENUE
`Research and development expenses
` R&D expense/revenue ratio
`Recurring EBIT
`RECURRING EBITDA
` REBITDA/revenue ratio
`Net profit (including non-controlling interests)
`Core EPS (€ per non-diluted share)
`Net debt
` Net debt/REBITDA ratio
`Equity ratio
`Cash flow from operating activities
`Capital expenditure (including intangible assets)
`
`2010
`
`3 218
`705
`22%
`467
`731
`23%
`103
`1.99
`1 525
`2.09
`51%
`506
`78
`
`2011
`
`3 246
`778
`24%
`439
`687
`21%
`238
`1.91
`1 548
`2.25
`51%
`292
`137
`
`2012
`
`3 462
`861
`25%
`444
`684
`20%
`245
`2.10
`1 766
`2.58
`49%
`355
`221
`
`2013
`RESTATED1
`3 133
`886
`28%
`297
`536
`17%
`145
`1.24
`1 998
`3.73
`44%
`288
`344
`
`1. The 2013 financials have been restated for IFRS 10 and Kremers Urban divestiture decision.
`
`2014
`
`FINANCIAL
`PERFORMANCE
`
`2014
`
`3 344
`928
`28%
`379
`609
`18%
`199
`1.69
`1 611
`2.65
`48%
`512
`161
`
`1 7
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`
`

`
`5.
`
`ENSURE QUALITY AND COMPLIANCE WITH LAWS
`AND REGULATIONS
`
`Patient health and safety are of utmost
`importance – patients are at the heart
`of everything we do. Our industry is
`experiencing an unprecedented array
`of regulatory changes and challenges,
`e.g., in drug safety, end-to-end supply
`chain security and sales representative
`physician relationship. Training and
`development is the basis of continuous
`improvement for our people to
`engage in the rapidly changing
`environment and to ensure UCB’s
`sustainable growth.
`
`UCB requires all colleagues to take
`the Code of Conduct, IT Security and
`Drug Safety trainings. The Code of
`Conduct calls for“Performance with
`Integrity” outlining general principles of
`business conduct and ethical behavior
`that are expected from every UCB
`colleague and third parties acting on
`behalf of UCB. The Code of Conduct
`can be found on the UCB website1. We
`have established a reporting system
`to allow each and every colleague
`the opportunity to report confidential
`or anonymous compliance concerns
`anytime in native language – the “UCB
`Integrity Line®”.
`
`Idalia,
`living with
`osteoporosis
`
`WHEN IT COMES TO COMPLIANCE,
`WE OPERATE A ZERO-TOLERANCE POLICY.
`
`In 2014, we continued to pass all
`inspections from regulatory agencies,
`with no critical findings, and we
`also successfully implemented our
`corporate integrity agreement in the
`U.S. for the fourth year running.
`
`We request and appreciate that every
`single colleague at UCB is committed
`to follow the strict regulatory
`standards for research, development,
`manufacturing and distribution of
`our products to ensure we meet
`all safety, quality, regulatory, legal
`and environmental requirements.
`Without our joint efforts, we would
`not be able to deliver sustainable and
`superior value for patients, delivering
`value also for all other stakeholders,
`including shareholders.
`
`Our company joined industry peers in
`committing to more data transparency
`through responsible sharing of our
`clinical trials data2. This is for the
`ultimate goal of advancing public
`health and getting the best end results
`for patients. These commitments to
`data sharing will hopefully open new
`avenues for the scientific community,
`as well as patients, to benefit from
`clinical research – while of course
`maintaining patient privacy. It is in
`line with the five guiding principles
`established by the European
`Federation of Pharmaceutical
`Industries and Associations (EFPIA)
`and the Pharmaceutical Research
`and Manufacturers of America
`(PhRMA) for the responsible sharing
`of clinical trial data.
`
`1 www.ucb.com/investors/Governance/Principles-codes-and-guidelines
`2 www.ucb.com/rd/data-transparency
`
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`
`6.
`
`DEVELOP PASSIONATELY ENGAGED
`COLLEAGUES AND BUSINESS PARTNERS
`
`centricity is at the heart of all we do.
`
`UCB fosters diversity of talents. Our
`ability to understand colleagues’ way of
`working across nations and education,
`our commitment to live values without
`boundaries build the company that
`unites us. At the end of 2014, UCB
`employed 8 684 people world-wide,
`composed of 67 nationalities and
`a workforce consisting of 53% men
`and 47% women.
`
`We believe sharing knowledge and
`expertise is essential for the rapid
`growth of scientific understanding. And
`that bringing innovative therapies to
`patients requires intensive cooperation.
`We recognize that we cannot always
`bring innovative therapies to patients
`on our own; the complexity of severe
`diseases is beyond the expertise and
`resources of a single company. That is
`why we are teaming up with companies
`across the pharmaceutical industry
`and have a strong global network of
`internationally renowned scientists and
`academics. We, in turn, are happy to
`share our own skills and experience with
`peers and with the academic world.
`
`UCB offers an exciting working
`environment where initiative can
`flourish and those with a “can-do”
`attitude can thrive. Every colleague
`is invited to make their mark and to
`become a key part of the company’s
`evolution. Our culture is walking on
`two legs: generosity and helpfulness.
`And we continue to evolve fast.
`Hundreds of new colleagues from
`health care and business backgrounds
`have joined us within the last two
`years. They bring with them a dynamic
`energy, fresh perspectives, and
`new ideas. Scientific excellence…
`innovation… co-creation… lateral
`thinking… reinventing the way we
`do things… these are some of the
`key competencies we are constantly
`developing, and looking for, at UCB.
`
`At the same time, we ensure every
`UCB colleague has the tools and
`environment to engage effectively in
`the work we do. Wherever in the world
`we are based, and no matter what role
`we play in the company, we believe
`every one of us can have an impact
`across our organization. From early
`research right through to manufacturing
`and sales, we all pull together to achieve
`transformative solutions for patients and
`their families. In fact, in yearly surveys,
`a majority of colleagues have said UCB
`is a great place to work because patient
`
`E
`
`R O P
`
`U
`
`E
`
`NORTH AMERICA
`
`%
`
`9
`
` 4
`
` 21%
`
`2
`
`5
`
`%
`
`E
`
`M
`M
`
`E
`A
`
`R
`R
`
`G I N
`
`E
`
`K
`
`T
`