Delivering
`for patients
`
`through
`innovation
`
`Annual report 2009
`
`ARGENTUM Exhibit 1175
`Argentum Pharmaceuticals LLC v. Research Corporation Technologies, inc.
`IPR2016-00204
`
`Page 00001
`
`

`
`4 000
`
`Key Data
`
`3 000
`
`2 000
`
`Gross dividend
`
`Operating expenses
`
`800
`
`600
`
`400
`
`200
`
`0
`
`2 500
`
`2 000
`
`1 500
`
`1 000
`
`500
`
`0
`
`R&D as % of revenue
`
`Year end share price
`
`40
`
`30
`
`513
`
`30
`
`21.7
`
`21.3
`
`21.6
`
`20
`
`REBITDA
`
`10
`
`20
`
`800
`
`Revenue
`€ million
`Revenue
`
`3 626
`
`3 601
`
`3 116
`
`4 000
`
`3 000
`
`2 000
`
`1 000
`
`0
`
`800
`
`600
`
`400
`
`200
`
`0
`
`1 000
`REBITDA
`
`0
`
`1.0
`
`0.8
`
`0.6
`
`0.4
`
`2007
`
`2008
`
`2009
`
`Gross dividend
`
`Operating expenses
`
`0.2
`
`1.0
`REBITDA
`€ million
`0.8
`
`REBITDA
`
`741
`
`733
`
`698
`
`REBITDA
`
`800
`0.6
`
`600
`0.4
`
`0.2
`400
`800
`
`2 500
`
`2 000
`
`1 500
`
`1 000
`
`500
`
`0
`
`Net profit
`0
`€ million
`Net pro(cid:31)t
`
`600
`
`500
`
`400
`
`Revenue
`300
`4 000
`
`200
`
`160
`
`42
`
`2007
`
`2008
`
`2009
`
`Year end share price
`3 000
`100
`
`0
`2 000
`
`1 000
`
`Gross dividend
`0
`€ per share
`
`40
`
`30
`
`20
`
`10
`
`0
`
`10
`
`600
`
`0
`
`400
`
`200
`
`0
`
`0
`
`2007
`
`2008
`
`2009
`
`Market capitalisation
`€ billion
`
`0
`200
`Net pro(cid:31)t
`600
`
`600
`
`0
`400
`500
`
`2007
`
`2008
`
`2009
`
`Operating expenses
`400
`200
`2 500
`
`300
`Operating expenses
`2 000
`0
`€ million
`200
`
`1 500
`Operating expenses
`100
`
`2 500
`0
`1 000
`
`2 000
`500
`
`1 500
`0
`
`2 098
`
`1 924
`
`1 638
`
`Year end share price
`1 000
`
`40
`500
`
`30
`0
`
`2008
`
`2009
`
`Gross dividend
`
`Operating expenses
`
`0.92
`
`0.92
`
`0.96
`
`1.0
`
`0.8
`
`0.6
`
`0.4
`
`0.2
`
`0
`
`5.7
`
`5.4
`
`4.3
`
`2 500
`
`2 000
`
`1 500
`
`1 000
`
`500
`
`0
`
`6
`
`4
`
`2
`
`0
`
`2007
`Net pro(cid:31)t
`
`2008
`
`2009
`
`Year end share price
`
`2007
`
`2008
`
`2009
`
`30
`
`2007
`Year end share price
`20
`600
`40
`40
`Note: see the Operating and Financial Review in the separate Management Report at the back of this Annual Report for the consolidated financial statements and
`a full commentary on our 2009 financial results.
`500
`10
`30
`
`Page 00002
`
`

`
`UCB aspires to be the patient-centric
`global biopharmaceutical leader
`transforming the lives of people living
`with severe diseases
`
`Vision & strategy
`bringing our vision to life
`
`Financial
`results
`delivering for our
`shareholders
`
`Delivering
`for patients today
`
`Fostering
`our talent & capabilities
`
`Researching &
`developing
`tomorrow’s breakthrough
`therapies
`
`photo: Veronica, living with epilepsy
`
`Page 00003
`
`

`
`2 UCB Annual Report 2009
`
`Delivering for
`Patients through
`Innovation
`
`2009 marked an important turning
`point in the execution phase of
`our strategy, with the launch of
`three new products in major
`markets. In the course of the year,
`we gained regulatory approvals
`for and launched Cimzia®, Vimpat®
`and Neupro® in either the U.S. or
`Europe, or in both.
`
`Vision and foundation
`
`These developments, together with other achievements during the
`year, have strengthened our confidence in our potential and in our
`aspiration to become the patient-centric global biopharmaceutical
`leader in severe diseases of the central nervous system and in
`immunology.
`
`The looming expiry of our U.S. patents for Zyrtec® in 2007 and
`Keppra® in late 2008 led UCB to initiate its transformation from a
`medium-sized chemicals and pharmaceuticals conglomerate into
`a higher-growth, higher-margin biopharmaceutical company. This
`led to us selling our non-pharmaceutical businesses in 2004 and
`2005 and acquiring the British biotechnology company Celltech
`in 2004. With this acquisition, we gained a leading capability in
`large-molecule, or antibody-based, research focused on diseases
`in immunology, as well a pipeline of antibody-based drugs. The
`
`2006 acquisition of the German pharmaceutical company, Schwarz
`Pharma, gave UCB additional late-stage pipeline in epilepsy, where
`we were already strong, and generally broadened our presence in
`neurology beyond that disease. With these foundations in place,
`we set our sights on becoming a biopharmaceutical leader in the
`treatment of severe diseases with high unmet medical need in the
`central nervous system (CNS) and in immunology.
`
`As expected, the expiry of our U.S. patents for Zyrtec ® and
`Keppra® in 2007 and 2008 respectively, hit us hard and we lost
`over € 700 million of recurring operating profit (REBIT). We were
`able to absorb around 90% of the impact, however, so that our
`recurring operating profit of € 480 million in 2007 only reduced
`to € 453 million in 2009. Having weathered this storm, we can
`now move forward with the larger part of our patent-expiry
`losses behind us.
`
`Delivering new products
`
`In 2009, we not only obtained approval (in May for the U.S. and
`in October for Europe) for Cimzia® for adults suffering from
`rheumatoid arthritis (RA), but also launched the product in
`the U.S. within two days of approval, and in Germany, the first
`European country, within two hours of approval.
`
`In June 2009, we obtained approval to launch Vimpat® in the U.S.
`for the treatment of the most common form of epilepsy, launching
`the product only a few days later. In Europe, where Vimpat® was
`approved in September 2008, we launched the therapy in 11 new
`countries in 2009 including France, Greece, Italy and Scandinavia.
`
`Neupro® was made available in Europe in June 2009 for all
`patients suffering from Parkinson’s disease and was additionally
`approved for the treatment of restless legs syndrome. With the
`recent successful launch in Italy, Neupro® is now available in most
`EU countries with the exception of France and Belgium.
`
`Page 00004
`
`

`
`Letter to the shareholders
`
` 3
`
`
`
`Roch Doliveux, CEO
`and Jamie, living with rheumatoid arthritis
`
`Finally, Toviaz® was approved in the U.S. for the treatment of over-
`active bladder, following its earlier approval in Europe in October
`2008. This enabled Pfizer, which has worldwide marketing rights, to
`launch the therapy in the U.S. in April 2009.
`
`approved for the re-initiation of promotion. Sales of Neupro®
`reached € 61 million in 2009 and are growing well.
`
`Advancing UCB’s new product pipeline
`
`Between 2008 and 2009, approval of new molecular entities
`developed by UCB was unmatched by any other company in its
`peer group.
`
`Cimzia®, Vimpat® and Neupro® uptake
`
`Cimzia® has made encouraging progress. By the end of 2009,
`more than 9 200 patients had been treated with Cimzia®, aided
`by a patient-friendly self-injection device developed by RA
`patients in collaboration with our partner, OXO®. Overall, Cimzia®
`has already achieved a 2.3% share of new prescriptions in the
`subcutaneous anti-TNF market for RA in the U.S. since its launch
`for this disease in May 2009, and a 18% share of new prescriptions
`for Crohn’s disease since launching for this indication in April 2008.
`
`In the EU, Cimzia® uptake in the countries where it has been
`launched for RA, Germany, Denmark and the U.K., has been
`equally positive. Moreover, Cimzia® patient-friendly packaging
`received a prestigious ‘Red Dot’ award at the largest and most
`renowned design competition in the world. Worldwide sales of
`Cimzia® reached € 75 million in 2009 and are growing strongly.
`
`Vimpat® has also delivered strong results, becoming the most
`successful anti-epileptic drug ever launched in the U.S. in terms of
`prescription uptake. In Europe, Vimpat® is now widely available. By
`the end of 2009, 46 000 patients were being treated with Vimpat®.
`Sales of Vimpat® reached € 46 million in 2009 and are growing
`rapidly.
`
`Neupro® is once again available in many European countries.
`By the end of 2009, 53 000 patients were being treated with
`Neupro®, up from 30 000 in June when the product was
`
`Beyond Cimzia®, Vimpat® and Neupro®, progress was made with
`epratuzumab, a novel antibody for systemic lupus erythematosus,
`with the successful completion of its Phase IIb dose-ranging study.
`In addition, we underscored the value of our strategic partnerships
`by working with our partner, Amgen, to advance CDP7851, or
`anti-sclerostin, a novel antibody for the treatment of bone loss
`disorders, into Phase II with trials for the treatment of post-
`menopausal osteoporosis as well as in fracture healing.
`
`UCB completed two Phase III clinical trials that investigated the
`efficacy of brivaracetam, a new treatment for epilepsy, with one
`of these trials demonstrating a significant reduction in seizure
`frequency. After review of these results and discussions with
`opinion leaders and regulatory authorities, we plan to carry out
`another Phase III study to confirm the drug’s efficacy.
`
`To strengthen and accelerate our drug discovery, we
`welcomed Dr Ismail Kola to our company as the new leader of
`UCB NewMedicines™, our drug-discovery-to-proof-of-concept
`organisation. Ismail has a strong track record in pharmaceutical
`research of bringing breakthrough medicines from drug discovery
`into clinical development.
`
`We strengthened our early pipeline in 2009 by moving UCB2892,
`an H3 antagonist for neurology, into clinical research Phase I.
`
`Strict management of costs
`
`Launching three new medicines in numerous countries while
`absorbing the patent loss on two major products required
`rigorous cost management. In 2008, UCB introduced SHAPE, a
`programme designed to transform and focus the organisation
`
`Page 00005
`
`

`
`4 UCB Annual Report 2009
`
`Karel Boone, Chairman,
`and Hanna, living with epilepsy
`
`on our new products in the market and important projects in
`our pipeline. By the end of 2009, more than € 150 million had
`been re-allocated to support the launch and roll-out of Cimzia®,
`Vimpat® and Neupro®. We also prioritised our country markets,
`concentrating on North America, Europe, Japan, China, India,
`Russia, Turkey, Mexico, South Korea and Australia, and divested
`non-core products in non-strategic emerging markets. In addition,
`we outsourced, or ‘incubated’, the development of our preclinical
`oncology portfolio.
`
`UCB people: strength through adversity
`
`The SHAPE programme and other organisational adjustments
`in 2008 and 2009 resulted in a 22% reduction in our workforce.
`While our employees understood the need for this programme,
`many of our colleagues who had invested many years of their
`working lives in UCB had to leave the company. A job platform
`was created to help them take the next step in their professional
`development, and we are pleased to report that more than 70%
`of the people who left UCB during this time have found new jobs
`or alternative career paths.
`
`At the end of 2009, 9 324 people were working for UCB. We
`want to thank them sincerely for their hard work, resilience and
`persistence in what has been an unusually challenging year. In
`addition to seeing their friends and colleagues leave the company
`as part of the SHAPE programme, they had to adjust to a new
`organisation, new teams, and new ways of working, as well as
`overcome product-approval delays and other hurdles essential for
`success in the biopharmaceutical industry. They also, of course, had
`to cope with the financial crisis and economic recession, although
`our business was less affected than many others.
`
`Despite these changes and challenges, more than 2 000 of our
`colleagues were engaged in patient-centric activities, while our
`annual management survey reinforced our confidence and pride in
`
`our colleagues’ ability and their determination to help UCB realise
`its full potential.
`
`Delivering financial results
`
`UCB revenues reached € 3 116 million in 2009 compared to
`€ 3 601 million in 2008, with underlying profitability (recurring
`EBITDA) ahead of company guidance at € 698 million compared
`to € 733 million in 2008. Net profit of € 513 million was
`impacted positively by one-time gains from divestments, and
`negatively by one-time costs from restructuring and debt
`refinancing, and compares to € 42 million in 2008.
`
`UCB’s former credit facility, which was due to mature in 2011,
`was paid down through the successful offering of three bonds
`and the negotiation of a new credit facility, enabling us to align the
`maturity profile of our debt much more closely with our expected
`cashflow, and to improve our financial stability.
`
`Based on our dividend policy, which rewards long-term
`shareholders and considers the company’s longer-term potential,
`the Board has proposed a gross dividend of € 0.96 per share,
`which is an increase of 4% over 2008.
`
`Preparing for growth
`
`As we enter a new decade, UCB is well placed to compete in
`the biopharmaceutical market. While many of our competitors
`face major patent expiries in the coming years, UCB has now
`largely overcome the challenges caused by the loss of the Zyrtec®
`patent and of U.S. exclusivity for Keppra®, although some loss
`of exclusivity is still to come and this will restrict our growth in
`2010 and 2011. After this, we anticipate strong growth driven
`by Cimzia®, Vimpat® and Neupro® without any further loss of
`patent exclusivity for many years. In drug discovery and in clinical
`development, we are also working on a new wave of medicines
`
`Page 00006
`
`

`
`Letter to the shareholders
`
` 5
`
`Roch Doliveux, CEO,
`and Colleen, living with Parkinson’s disease
`
`pipeline projects, and develop the agility to absorb the unavoidable
`effects of healthcare cost containment which are expected to
`increase around the world.
`
`We want to thank once more all our colleagues at UCB for
`their persistence, resilience and delivery, our shareholders for
`their support, our ever-increasing number of partners for their
`contribution to our mutual success, and the Board for its unique
`ability to both challenge and encourage us.
`
`Roch Doliveux
`Chief Executive Officer
`
`Karel Boone
`Chairman
`
`that could offer significant breakthroughs for patients with severe
`diseases in CNS and immunology.
`
`Putting patients at the heart of our work
`
`Our quest to succeed is ultimately inspired and driven by the
`millions of patients who suffer from RA, Crohn’s disease, lupus,
`epilepsy, movement disorders and other neurological and
`immunological disorders. During the year, we continued to involve
`these people in our work, together with their carers and specialist
`physicians, so that we can develop added-value therapies that
`address their unmet needs, both therapeutically and practically,
`as well as enhance UCB’s performance. Examples of our patient-
`centric approach included: working closely with patients to
`design a more user-friendly delivery device for Cimzia®; involving
`sufferers of severe disease in our genetic biology research in order
`to improve our drug discovery efforts; and producing patient-
`reported outcomes to strengthen our drug development efforts
`and regulatory submissions. Our U.S. team spent time renovating
`the homes of RA patients, amongst other initiatives described in
`more detail on the following pages.
`
`Priorities for 2010
`
`Our top priority for 2010 is the continued launch and growth of
`Cimzia®, Vimpat® and Neupro® around the world. UCB’s future
`clearly depends on the performance of its new products and
`early indicators of sales of these products are promising. Also key
`is the continued development of our pipeline of next-generation
`therapies and the enrichment of our early-stage pipeline.
`Developing the potential of our people is a high priority and we
`expect to invest significantly in this activity in 2010.
`
`To become a lean, world-class biopharmaceutical company, we
`have to continue to adapt and strengthen our core processes so
`that we focus more effectively on our core products, markets and
`
`Page 00007
`
`

`
`6 UCB Annual Report 2009
`
`Page 00008
`
`

`
`
`
`
`
` 7Vision & strategy, bringing our vision to life
`
`Bringing
`our vision to life
`
` 2009 marked an important turning point in
`the execution of our strategy. Major milestones
`achieved are presented in this report.
`
`Juan, living with restless legs syndrome
`
`Page 00009
`
`

`
`8 UCB Annual Report 2009
`
`2009
`Milestones
`
`During 2009, we delivered significant
`improvements across every facet
`of our business, from research and
`development to sales and finance,
`enabling us to provide patients
`with more innovative, effective
`therapies and our shareholders with
`sustainable returns.
`
`Four new products
`launched
`
`• Cimzia®: U.S. and Europe launch for rheumatoid
`arthritis
`• Vimpat®: U.S. launch for epilepsy
`• Neupro®: Europe launch for restless legs
`syndrome and re-introduction for Parkinson’s
`disease
`• Toviaz®: U.S. launch (by Pfizer) for overactive
`bladder
`
`Five compounds
`in our pipeline
`progressed
`
`• Brivaracetam: Phase III results in epilepsy
`• Keppra® XR: Phase III results in epilepsy
`monotherapy
`• Xyrem®: Phase III results in fibromyalgia
`• Epratuzumab: Phase IIb results in systemic
`lupus erythematosus
`• CDP7851: moved to Phase II for fracture healing
`and post-menopausal osteoporosis
`
`Five regulatory
`approvals
`
`• Cimzia®: U.S. approval for rheumatoid arthritis
`• Cimzia®: EU approval for rheumatoid arthritis
`• Neupro®: EU approval for restless legs syndrome
`• Neupro®: EU approval to re-launch for
`Parkinson’s disease
`• Keppra®: EU approval for epilepsy in infants and
`young children
`
`Page 00010
`
`

`
`2009 Milestones
`
` 9
`
`Revenue and
`REBITDA as
`expected
`• Revenue of € 3 116 million
`• Recurring EBITDA of € 698 million
`• Net profit of € 513 million
`
`108 000 new patients
`treated with new
`products at year end
`2009
`
`• 9 000 patients treated with Cimzia®
`• 46 000 patients treated with Vimpat®
`• 53 000 patients treated with Neupro®
`
`Debt successfully
`re-financed
`
`• € 1.5 billion revolving credit facility
`• € 750 million retail bonds, due 2014
`• € 500 million convertible bonds, due 2015
`• € 500 million institutional bonds, due 2016
`• Lender base diversified
`• Maturity profile improved
`• Old debt paid down
`
`New partnerships
`forged
`
`• Pre-clinical oncology projects ‘incubated’ with
`Wilex AG
`• Co-marketing in Germany expanded with
` Novartis AG
`• Cimzia® commercialisation agreement for Brazil
`with AstraZeneca plc
`• Joined NeuroAllianz consortium
`• On-line community for epilepsy patients begun
`with PatientsLikeMe
`
`Organisation focused
`
`• € 150 million re-allocated to Cimzia®, Vimpat®,
`Neupro®
`• Geographical markets prioritised
`• Non-strategic emerging markets divested
`• Pre-clinical oncology products ‘incubated’
`• New research facility opened in the U.K.
`• Workforce reduced by 22%
`• Operating expenses reduced by 15%
`• Cost of sales reduced by 9%
`
`Page 00011
`
`

`
`10 UCB Annual Report 2009
`
`2009 Results
`
`Absorbing most of the first full year of Keppra® generic erosion in the U.S., UCB delivered revenue of € 3 116 million and recurring
`EBITDA of € 698 million in 2009. Net profit of € 513 million was increased by one-time non-recurring gains from divestments and
`was reduced by one-time non-recurring restructuring and re-financing charges.
`
`Major products
`
`Products
`
`Compound
`
`Indications
`
`Net sales
`2007
`
`Net sales
`2008
`
`Net sales
`2009
`€ million
`
`CNS
`
`Keppra®
`
`levetiracetam
`
`venlafaxine XR
`Metadate™ CD/
`Equasym™ XL
`Nootropil®
`
`venlafaxine
`methylphenidate HCl
`
`Neupro®
`
`rotigotine transdermal system
`
`Vimpat®
`
`lacosamide
`
`Immunology & Allergy
`
`Zyrtec®
`
`cetirizine
`
`piracetam
`
`Regulating cerebral functions
`
`levocetirizine
`
`certolizumab pegol
`
`Xyzal®
`
`Cimzia®
`
`Other areas
`
`Tussionex™
`
`omeprazole
`
`hydrocodone polistirex and
`chlorpheniramine polistirex
`omeprazole
`
`Coughs and colds
`
`Gastrointestinal ulcers and reflux
`oesophagitis
`
`Several types of epilepsy, including
`partial onset-seizures
`Depressive and social anxiety disorders
`Attention deficit hyperactivity disorder
`
`Restless legs syndrome + Parkinson’s
`disease
`Partial-onset-seizures, epilepsy
`
`Allergic rhinitis and chronic idiopathic
`urticaria
`Allergic rhinitis and chronic idiopathic
`urticaria
`Rheumatoid arthritis + Crohn’s disease
`
`1 026
`
`1 266
`
`-
`79
`
`101
`
`52
`
`-
`
`487
`
`168
`
`1
`
`114
`
`147
`
`10
`77
`
`93
`
`58
`
`2
`
`249
`
`173
`
`10
`
`147
`
`75
`
`913
`
`109
`72
`
`70
`
`61
`
`46
`
`268
`
`132
`
`75
`
`147
`
`64
`
`Page 00012
`
`

`
` 11
`2009 Results
`
`Sales by geographic region - 2009
`Total net sales: € 2 683 million
`
`Sales by therapeutic area - 2009
`Total net sales: € 2 683 million
`
`Europe
`51%
`
`Immunology & Allergy
`18%
`
`North America
`35%
`
`Asia
`11%
`
`Other
`3%
`
`Other
`41%
`
`CNS
`41%
`
`Results
`
`€ million
`
`Revenue
`Recurring EBITDA
`Operating profit (EBIT)
`Net profit (after minority interests)
`
`Share information
`
`Basic earnings per share (€)
`Gross dividend per share (€)
`Number of shares (1)
`Share price (year-end, €)
`Market capitalisation (year-end, € billion)
`
`(1) Weighted average number of ordinary shares.
`
`2007
`
`2008
`
`2009
`
`3 626
`741
`344
`160
`
` 3 601
`733
`113
`42
`
`3 116
`698
`837
`513
`
`2007
`
`2008
`
`2009
`
`0.89
`0.92
`180 173 920
`31.02
`5.7
`
`0.24
`0.92
`180 166 683
`23.30
`4.3
`
`2.85
`0.96
`180 180 255
`29.22
`5.4
`
`See the Operating and Financial Review in the separate Management Report at the back of this Annual Report for the consolidated financial statements and a full
`commentary on our 2009 financial results.
`
`Page 00013
`
`

`
`12 UCB Annual Report 2009
`
`Pipeline
`
`As a medium-sized biopharma company, UCB has a solid pipeline of 10 large and small molecules, spanning 14 separate indications.
`Some of these are intended to strengthen the company’s positions in disease areas such as epilepsy. Some new medicines could take
`the company into new areas of severe disease such as systemic lupus erythematosus and osteoporosis.
`
`CNS
`
`Indication
`
`Phase I
`
`Phase II
`
`Phase III
`
`Filed
`
`Keppra® (levetiracetam)
`
`Epilepsy adjunctive therapy (Japan)
`
`Neupro® (rotigotine transdermal patch)
`
`Advanced Parkinson’s disease (U.S.)
`
`Neupro® (rotigotine transdermal patch)
`
`Restless legs syndrome (U.S.)
`
`Xyrem® (sodium oxybate)
`
`Fibromyalgia
`
`brivaracetam
`
`Vimpat® (lacosamide)
`
`Vimpat® (lacosamide)
`
`Vimpat® (lacosamide)
`
`Epilepsy adjunctive therapy
`
`Epilepsy monotherapy (U.S.)
`
`Epilepsy paediatric adjunctive therapy(1)
`
`Epilepsy adjunctive therapy PGTC(2)
`
`UCB2892 (H3 antagonist)
`
`Central nervous system
`
`Immunology
`
`Indication
`
`Phase I
`
`Phase II
`
`Phase III
`
`Filed
`
`Cimzia® (certoluzimab pegol)
`
`Cimzia® (certoluzimab pegol)
`
`Cimzia® (certoluzimab pegol)
`
`Cimzia® (certoluzimab pegol)
`
`epratuzumab
`
`Ankylosing spondylitis
`
`Psoriatic arthritis
`
`Juvenile rheumatoid arthritis
`
`Rheumatoid arthritis (Japan)
`
`Systemic lupus erythematosus
`
`CDP7851 (anti-sclerostin)
`
`Post-menopausal osteoporosis
`
`CDP7851 (anti-sclerostin)
`
`Fracture healing
`
`CDP6038 (anti-IL6)
`
`Autoimmune diseases
`
` Small molecule drug (chemical production)
`
` Antibody-based large molecule drug (biotechnology production)
`
`(1) Paediatric 2-17 years
`(2) Primary generalised tonic clonic
`
`Page 00014
`
`

`
`
`
` 13Pipeline
`
`Market
`
`Approval
`
`Phase III
`
`Phase II
`
`Phase I
`Pre-clinical
`Optimisation
`
`Screening
`
`food, interactions with other drugs etc and if possible some early
`indication of efficacy will be sought.
`
`Clinical Phase II (2-2.5 years)
`Demonstration of therapeutic efficacy
`Phase II trials are carried out in patients (generally 100 to 500)
`and are designed to determine the optimal dosage of the drug to
`show efficacy accompanied by a suitable safety profile.
`
`Clinical Phase III (>2 years)
`Proof of efficacy and safety
`Phase III clinical trials are conducted in large numbers of patients
`(sometimes several thousand) in order to confirm the therapeutic
`efficacy and safety of the new medicine in the target patient
`population.
`
`Approval (14-24 month)
`International approval processes
`Approval to market a new pharmaceutical product is granted
`by the relevant authority (FDA in the U.S., EMA in Europe, etc.)
`after review of extensive documentation. The approval application
`consists of data relating to the synthesis, dosage form, pre-clinical
`characterisation, clinical trial results, packaging, product name and
`package insert.
`
`Market
`About 10 years from the original screening:
`a new drug will be launched
`The new drug is introduced to the market with a brand name
`and is made available to doctors and patients as soon as feasible.
`Even after market launch the sponsors are required to undertake
`post-marketing surveillance to monitor a drug’s safety as some
`adverse reactions are only detected through a substantial patient
`population. On average, only one out of 10 000 molecules reaches
`the market. Thus with a normal patent life of 20 years, about half
`of that is taken up in drug development;
`
`Short introduction
`to the R&D steps
`in the biopharma
`industry
`
`Screening (1-2 years)
`Year ‘0’: identification of new leads
`Research into the causes and mechanisms of diseases leads to
`the identification of targets for pharmaceutical intervention for
`the treatment of the disease. At UCB, as a biopharmaceutical
`company, chemical entities (often several hundred thousand
`molecules) may be screened for activity against the target
`Alternatively biological molecules (for example antibodies) which
`interact with and modify targets may be identified by a number of
`different techniques.
`
`Optimisation (1-2 years)
`The lead substances from the screening process are evaluated in
`more detail by testing in cell cultures, tissue samples and other
`techniques. The most promising entities are further optimised and
`subjected to further testing. This enables substances which have
`potential value as therapeutic agents to be identified and taken
`forward as clinical candidates.
`
`Pre-clinical development (1 year)
`Safety testing and development of dosage form
`During this phase of development, safety testing of the compound
`is started, as well as pharmacological characterisation and the
`evaluation of pharmacokinetic parameters. Although the use of
`animals is avoided wherever possible, some animal studies have
`to be conducted to meet regulatory and scientific requirements.
`Safety testing and monitoring continues in parallel with clinical
`development, in order to ensure the safety of the clinical trial
`participants. An appropriate dosage form for clinical trials will
`be developed and characterised. The activities to develop a
`manufacturing process will continue in parallel with clinical
`development.
`
`Clinical Phase I (1 year)
`Safety and pharmacokinetics in humans
`Phase I clinical trials, which have to be approved by regulatory
`authorities as well as an independent ethics committees, are
`designed to determine tolerability and safety and are generally
`carried out in healthy volunteers. Trials normally consist of 20-80
`subjects and evaluate single and then multiple doses of the new
`drug. Pharmacokinetics will be determined as well as the effects of
`
`Page 00015
`
`

`
`14 UCB Annual Report 2009
`
`Bringing
`our vision to life
`
` Our vision is to be the patient-centric global
`biopharmaceutical leader, transforming the lives of
`people with severe diseases. This report describes the
`progress we made in 2009 in bringing our vision to life.
`
`Stephanie, living with rheumatoid arthritis
`
`Page 00016
`
`

`
`
`
` 15Vision & strategy, bringing our vision to life
`
`Page 00017
`
`

`
`16 UCB Annual Report 2009
`
`Long-term
`Strategy
`
`UCB has a clear long-term strategy
`to realise its vision. Since 2004,
`when the company was a diversified
`pharmaceuticals, chemicals and films
`conglomerate, we have successfully
`delivered the first three stages of
`this five-step strategy and are now
`poised to enter the ‘growth’ phase.
`
`Transformation (2004-2005)
`The transformation of UCB into a biopharmaceutical company
`with a development portfolio of small- and large-molecule drugs
`was achieved through the acquisition in 2004 of Celltech, the
`leading British biotech company, and the divestment of non-
`core businesses in 2005. By the end of 2005, UCB had a globally
`networked research organisation capable of capturing the
`combined potential of biology and chemistry.
`
`Scale (2006)
`The acquisition of Schwarz Pharma in 2006 enriched the
`company’s late-stage pipeline, enhancing the company’s short- to
`mid-term commercial potential.
`
`Execution (2007-2009)
`During this phase we prepared for the growth stage of our
`strategy by making significant investments and changing the shape
`of our organisation. Investments were made in R&D to build
`and progress our new product pipeline and in launching new
`products. Three major products were developed, approved and
`launched: Cimzia®, Vimpat® and Neupro®. Increased focus and
`cost containment mitigated the loss of patents and exclusivity
`protecting Keppra® and Zyrtec® around the world. Country
`markets were also prioritised. In addition, our SHAPE programme
`re-allocated resources and focused activities on the core
`therapeutic areas for UCB of the central nervous system (CNS)
`and immunology, and simplified the organisation, improving our
`agility, competitiveness and profitability.
`
`Growth
`From 2010, UCB expects its new products to lay the foundation
`for a return to growth. We expect new product growth to be
`followed by company growth. This, in turn, will enable increased
`investment in the research and development of new products.
`Currently, UCB has 10 molecules in its development pipeline
`across 14 indications, all of them being developed for the
`treatment of severe diseases of the CNS and immunology.
`
`Breakthrough
`Using our expertise in biology and chemistry, we are working on
`long-term research projects that could transform the way severe
`diseases are treated. These initiatives include four pre-clinical
`projects that are using our proprietary A2Hit™ technology to
`combine the convenience of small orally available molecules with
`the efficacy and precision-targeting of large molecules.
`
`Page 00018
`
`

`
`
`
` 17Vision & strategy, bringing our vision to life
`
`Breakthrough
`
`Launch a new
`generation of
`therapies offering
`breakthrough
`innovation to
`patients with severe
`disease
`
`Intense growth
`
`Company
`growth
`
`Realise the full
`commercial potential
`of Cimzia®, Vimpat®,
`Neupro®
`
`New product
`growth
`
`• Grow Cimzia®, Vimpat®,
`Neupro®
`• Optimise mature base
`business
`• Manage remaining loss
`of exclusivity
`
`lifecycle
`management
`
`first
`breakthroughs
`
`2010
`
`…and
`beyond
`
`Page 00019
`
`

`
`18 UCB Annual Report 2009
`
`Operational
`Strategies
`
`Seven operational strategies have been developed to focus and direct UCB towards its vision, which is to become the patient-centric
`global biopharmaceutical leader, transforming the lives of people living with severe diseases.
`
`Creating
`and acquiring
`innovative new
`medicines
`
`Ensure
`compliance
`
`1
`
`7
`
`Maximise
`sales of
`Cimzia®, Vimpat®
`and Neupro®
`
`2
`
`6
`
`Optimise
`core
`processes
`
`3
`
`Partner
`to increase
`value and
`efficiency
`
`5
`
`4
`
`Continuously
`improve our
`profitability and
`financial structure
`
`Foster
`a One UCB
`workplace
`
`Page 00020
`
`

`
`
`
` 19Vision & strategy, bringing our vision to life
`
`2010
`Priorities
`
`We have set objectives for each of
`our seven operational strategies,
`aligned them across all functions
`and cascaded them down to all
`departments and to individual
`employees.
`
`3. Partner to increase value and efficiency by
`teaming up with organisations who can either
`offer the best technologies and capabilities or
`who can carry out transactional and other less
`differentiating activities
`
`• Implement out- and in-licensing deals to increase the value of
`our assets
`• Enhance cost and quality through partners throughout the
`organisation, from accounting to chemistry research services
`
`4. Foster a ‘One UCB’ workplace where people can
`express their talent and performance
`
`1. Meet unmet patient needs in severe CNS and
`immunology diseases by creating and acquiring
`innovative new medicines, and delivering
`solutions beyond novel medicines
`
`• Move to a learning organisation
`• Encourage all employees to implement their personal
`development plans
`
`• Strengthen our early development pipeline
`• Deliver new solutions for patients, beyond the medicine
`
`5. Continuously improve profitability and financial
`structure
`
`2. Maximise sales of Cimzia®, Vimpat® and Neupro®
`while maximising the value of ‘optimised’ assets
`
`• Clear objectives set for each part of the organisation, addressing
`both profitability and the use of working capital
`
`• Higher sales of Cimzia®, Vimpat® and Neupro® by improving
`patient access
`
`6. Optimise core processes to create a leaner, more
`networked biopharma organisation
`
`• Implement one enterprise resource planning platform globally
`• Invest in quality and lean processes and/or outsource
`
`7. Ensure compliance in everything we do to protect
`our patients and reputation
`
`• Ensure compliance throughout the organisation
`• Ensure compliance in all interactions with external stakeholders
`
`Page 00021
`
`

`
`20 UCB Annual Report 2009
`
`Veronica, living with epilepsy
`
`Page 00022
`
`

`
`
`
` 21Delivering for patient today
`
`Delivering for patients today
`
` UCB focuses on severe diseases in two therapeutic
`areas, the central nervous system (CNS) and
`immunology. In 2009, we and our partners launched
`four new products and continued to develop
`promising new thera