Generic competition, a complete response letter, a new acquisition and external pressures have created a perfect storm for UCB, leading the company to reduce its profit forecast for 2022.
After previously projecting a profit margin of 26% to 27% and earnings per share of 4.80 euros to 5.30 euros this year, UCB has revised those ranges to 21% to 22% and 3.70 euros to 4 euros, respectively.
Like many companies, UCB is feeling the squeeze of “external headwinds” such as inflation and the war in Ukraine. Novartis’ Sandoz, Teva and Viatris can relate. The companies, and others in the trade group Medicines for Europe recently signed an open letter to the EU’s Health Council and the European Commission asking for health leaders to address spiking costs.
Merck KGaA, for its part, also recently warned of volatility in 2022.
As for UCB, its updated forecast also takes into account the generic competition for anti-epileptic drug Vimpat in the U.S., and expected competition in Europe this September.
Then, there’s the company's recent complete response letter (CRL) for plaque psoriasis prospect bimekizumab. The FDA served UCB the rejection back in May, asking the company to address certain manufacturing concerns before a potential approval. UCB expects to submit a response to the letter by the end of 2022.
Meanwhile, the drug has received marketing authorization in Europe, Japan, and recently Canada and Australia.
It’s not all bad news for UCB. The company closed an acquisition of Zogenix back in March in a deal valued at approximately 1.7 billion euros, gaining ownership of Fintepla, an oral treatment for Dravet syndrome and Lennox-Gastaut syndrome.
The new acquisition will be a slight drain on profits in 2022, but will begin to add to earnings next year, the company said.