UCB SA (UCB) Earnings Call Transcript

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Thanks very much. Good morning, good afternoon to everyone, and thanks very much for joining both Sophia and me for the UCB installment of our 2026 JPMorgan CEO Call Series. It's our great pleasure to have the CEO from UCB Jean-Christophe Tellier, with us today. Before I hand over to Jean Christoph for a few introductory remarks, I'd like to remind you that this is primarily a call for your questions. So Saphira and I will ask a few upfront, and then you can ask your questions either by raising your hand. -- dialing Star 9 or alternatively, you can send an e-mail to me, and that's to Richard. -- at JPMorgan.com. -- and we'll ask you a question for you. With that, welcome, JC. Great to have you with us, and I hand over to you for a few introductory remarks.

Thank you, Richard. It's always a pleasure to participate to your CEO call, Savis,and thank you for your invitations to participate and thanks all of you for your interest into the company. I'm really looking forward to answering your questions and potentially continue to engage the dialogue with you. So -- and thank you for the time for premium remarks. What I would like to share with you before answering the question is it's a very simple type of statements that rely on a couple of few components. First component is -- for the last 2 years, I've been starting all of my presentation, I think by mentioning that we are entering in the period of growth, and this period of growth will be during a decade plus ahead of us. And I'm very pleased to see that after 6 months and presentation after presentation, I can continue to confirm that we are pleased with the current execution of the plan. We are pleased with our ability to deliver the results, and we are entering into this period of growth. And our growth drivers, our 5 growth drivers are performing accordingly to plan and expectation. And that put us really in a very particular situation. When you look about the competition and the environment in the marketplace. I don't think there is a lot of companies who can claim that they will have and benefit from such a long period of growth ahead of us right now. And that gave us a benefit of 2 things. One, we have an ability to continue to invest in our pipeline. And you know that for UCB, the strategy of innovation always have been at the heart of what we are doing because we think that is important that for a company our size, in particular, we continue to invest in what can be translated into differentiated medicine. And I think that we have seen during the last 10 years, a good example of this strategy in motion with the ability to discover, to develop and to launch differentiated medicines that create unique outcome for the patient, which is really the mission that we are in. So thanks to the growth that we are now engaging into. We can continue to invest not only into the success of the launch product, but in the preparation of the future with investments in the pipeline. The second component is we have a very good balance sheet that gives us strategic flexibility. We have reduced our level of debt. We have already made 4 acquisitions this year, and we are in a situation where we can even do more. And I think you agree with me that the acquisition that we have done, and I just can mention Norona and candid in both neurology and immunology or ways to strengthen our 2 pillars that have been strictly important for UCB. And that could give us if things goes well, of course, but that could give us potential additional growth beyond 2037 beyond the period by which Vimedix will lose exclusivity. So we are not only in a good shape because we are in a growth period right now. we are reinforcing our ability to invest in innovation. And we have also to inorganic growth, strengthen our pipeline and portfolio to be even more secure potentially or to have in our hands potential to continue to grow above and beyond the market growth after 2030 or 2035 for the decade after. And that's the third element that I would like you to keep in mind is this ability thanks to the target we are in and thanks to the success that we have been able to deliver to continue to strengthen. Last but not least, this strategic flexibility will remain. And because of the period we are in and the stability we are in and the visibility that we have we have also the potential not to be under the pressure of time and to try and to start to think about how we best continue to grow and to develop and to deliver value for our shareholders for our patients and for our employees. And this is to be consistent with our purpose. So this is maybe, Richard, a quick introduction that I wanted to share with you and now I hand over to -- back to you, Richard and Sophia, maybe for the questions that you may have.

Thanks, Jean-Christophe. We definitely want to talk about the continuation of the innovation. But I think to start with, maybe we could talk about some of the growth that's going to fuel that investment but also fuel the top line. And I think most Binselex,you mentioned, of course, is 1 of the key growth drivers we all know. So wanted to ask to start with just about how Bimzovex is going. You took the decisions in the first half to invest in expanding access which was announced with the results. So how is that going? How should we think about the unlocks in terms of volume and growth potential for Bimbvex in the U.S. across the different indications?

Yes. Thank you very much for the question. And first of all, I may would like to remind all of you about the particular competitive situation that Vimedix are in because I feel that sometimes we take for granted, but we forgot exactly what does it mean? First and foremost, Bimzedix is a unique monoclonal antibody were able to target at the same time, -- 2 very important information mediator in dermatological disease, aromatic disease, IL-17A and IL-17F. There is no other compound today with this ability to do this at the same time. And it's not a bispecific per se because we have added 1 arm that target the A and 1 arm that target the -- it's the same 1 antibody, they are able to get the same type of affinity for both internal, which is really quite unique. This has been based on a better understanding and knowledge of human biology where the F is present in a position to animal model, which is very often used in a preclinical study, where there is no importance of the F. And so it's based on a human biological evaluation that we understood the role of the F, and we get these scientific hypothesis by targeting the 2, we can translate that into a differentiated medicine for people suffering from these diseases. So that's 1 element. The second element is by doing so, and I always have shared that with you, I always have asked you to look at the result of Bimzalix from a data standpoint on 3 criteria: one, which is the speed onset of action; 2, which is the depth of the efficacy; and three, which is the durability of this action. I think it's fair to say that on these 3 components, we are raising the bar of what a product can deliver for patients. The third component that I would like to highlight is sometimes, we have a tendency to forgot that. We have a unique product that have been able during the clinical development program to study and demonstrate that the product is superior to the standard of care in psoriasis. And earlier this year, we have done the same superiority clinical trial versus Skyris inscicantritis. So I just would like to come back on this framework just to make sure that this is clear that when we talk about competition, when we talk about access, when we talk about how much and how well Bemis is doing, we are building a unique set of data, in fact, which are not only unprecedented because nobody has done that before, but two, we have been able to demonstrate clinically the added value the differentiation that we are able to deliver to the patient. And this has been confirmed since the launch and before talking about access, I just would like also to remind all of you that when you look at the launch curve in terms of prescription by all of the competitors in oasis in this indication for the product in the class of IL-17 or IL-23 and you look at the performance of Bison terms of take off this launch, we are at the top of the package. So we have been able to demonstrate the fact that the product is superior to deliver clinical outcome for patients. And we have been able as an organization to demonstrate that we have been able to translate that into value and to prescriptions into adoption. And by the way, when you -- and some of you have done that and Richard, I know you have done that also. But when you ask a key opinion leaders, when you ask dermatologists or hematologists, what is their experience with Bemenscompared to others, what I've just shared with you. I'm sure he's also shared by them. So that should give you as well as that have given us the confidence about the perspective and the performance of benzoic on the long term because if we are building on the evidence which every physician should do, DimZelix should be the product of choice. Now of course, we are operating in a different type of environment. There are different hurdles. There are different resistance to the adoption, and we need to change the habit. So none of that, of course, is done obviously immediately and the change management remain -- still needs to be done. But fundamentally, the outcome to the patient since the day of launch have more than confirmed what we have observed during the clinical trial. I have not seen so far 1 physician. I have not seen so far 1 patient for who the Biblis has been a success we have not shared with the how different the experience of the success was with Bindelx compared to other treatments in the past. The speed, the depth, the percentage of patients having full clear skin and the durability because now we have studies in 3 and 4 and 5 years. We have all of this data available to show that -- we are -- we have everything in our hands to become a vested disease in the different disease we are present because of the quality of the product. So when you have such a great product and when you have an asset like that in your hands and particularly in the U.S, where access is dependent on price and on negotiation with the 3 major PBMs, you need to make sure that you adjust and address the access to the maturity of the physician to prescribe. And at the same time, you want to ensure that the experience for the physician or the experience for the patient will be the best possible. What does it mean the best possible. That means reducing the burden of the administrative hurdles that paint between the patient and the drug, reducing and facilitating the prior authorization and the benefit of litigation increasing the percentage of success, increasing the facility by which and the easiness for the patient and for the physicians to get to the product. And this is kind of an art because you don't want at the beginning to give up too much of a price in order to get an access that you will not be able to benefit because the physician is not ready to prescribe you at an early stage, physicians need to have the experience of the products to be reassured by the products. We have now almost 150,000 patients treated by Venizelx.. We have this experience a little by little the numbers of physicians who are very confident to treat patients with the drugs are more and more important. So we are trying to get access earlier and earlier, which is what we have been able to achieve. By the way, -- since the beginning, we have been able to avoid to have exclusion in our main indication, PSO, PSA and a in all -- with all of the 3 major PBMs, which is quite unique when you compare to even the more and the more important product of our companies. Now where we are, we are now moving from double set to first step to single step edits to in 1 of the 3 major PBMs across indication of first line, which, of course, gives us more facility to prescribe, make the life of the vision and the patient easier will increase over time, the volume, but the price reduction that you have is immediate. But once again, what I would like you to keep in mind in the way to modernize, objective is to be as productive enough to the price not to give up too much, and particularly with regard with the level of differentiation and the quality of the product. And at the same time, being at the place where we have -- we fit the best with the mindset and the readiness of the prescribers to propane. So we are now in this phase where we need to translate the quality of the product into an easiness to prescribe and an easiness for the patients to get the product that we had initially with our bridge program, which was really highly successful and now is translated into this access piece. And so I'm very confident that we have today into this phase, we are maneuvering into the access program very well. We kind of managed to have the best possible balance between speed between easiness and between sales and revenue. And we will continue to do that in the next coming years, too little by little, joining what will be the place of Bimelix over time, which will be the first.

So we should imagine going forward when we think about formulary discussions. And going forward, as you said, it's sort of a gradual improvement in access and a gradual sort of increase in rebates reduction in price that's sort of not matching that but facilitating that. Is that how we should think about it?

You can think about it this way. if you keep in mind the fact that we have already accessed 80% of the marketplace. So the majority in the sense we have already done a lot in this progression. And so we need not to continue to move. And you're right, this will continue to increase the volume and have a net price per patient that will balance but the volume increase will compensate. And in the end, if you want to lead in the market, you need to create an experience, which is the easy one. I have not seen a leader on the market being double step or single step. So what we are doing, it's not exceptional. Everybody has done that before. It's just that natural expansion when you are not the first 1 in the marketplace in order to reach the leadership position while protecting as much as possible, the best possible brands.

And maybe 1 more for me. Did the -- and that's the same in HS. So HS is obviously was launched slightly later -- so maybe slightly less access slightly -- probably the same rebates these days, but that's something you're building, and we should expect that just to follow behind in sync with a slight delay effectively?

So HS is different, as you mentioned, because the timing of the launch was a little bit delayed versus the rest of the indication -- but now everybody is talking about HS. I can remind you maybe that 3, 4 years ago, nobody was talking about HS. And so it's funny how our things are moving quickly. So I just would like to remind everyone that HS is a very -- it's not just an additional arm towards the psoriatic type of disease in dermatology. It is a very specific disease. And this disease compared to oasis 3 maybe element that I would like us to keep in mind. First, it has been a disease for loose disease, which is not very well known. It's a very complex disease. -- the pathway that the physiopathology of the disease is more complex than Tobias. And so it's much likely that in the future, there will be different types of pathways that would be potentially active in employees. So the first, it's a very complex severe disease where the biology is not exactly comparable to what you have in Solesis. So I met sometimes, I met once a dermatologist expert in AS, and he told me look, each time I need to train physicians and dermatologists on HS. My first message is, please forget everything you know about psoriasis because HS is completely different. So that's also my message to you. Please be aware that HS is at the beginning of the story. It's the beginning of the better knowledge of the disease. It's the beginning of this ability to provide the best treatment. The second message about HS, it's a more complex disease. It's a more severe disease. It's not just about an ability to treat the skin, you get abscesses, you get tonnes, you get fistulas. -- sometimes you need surgery that you never need for SoS.So it's a disease that requires sometimes more dramatic treatment than just a treatment or biologics or appeal. The third element is because it's the beginning of the knowledge of the disease. And the reason why is it the beginning of the knowledge of the disease is because very often, it's a catch-22 between treatment and understanding a diagnostic. If you don't have the right tool, to treat the patient. Well, guess what? Well, the patient will not visit the physician because they are not pleased with the outcome. And of course, they are frustrated because there is not a lot of solutions for them. So it's not illogical that in this environment for us, a patient with access have suffered from a lack of diagnostic, a delay of diagnostic, a lack of treatment, the severity of their state. So we are in this phase thanks to Bialas in particular, that the patients and the physicians get new tools in their toolbox where they can treat these patients. So little by little, this is the patients who are not treated we are even not tensed are coming back to teldermatologists want to be back to the dermatologists and have access to potential solution that will help them -- last but not least, I do feel that there will be a moment where not only the diagnostic will increase, we will be much better into bringing this patient to the dermatologist. But at the same time, we will be able to treat the patients earlier. And hopefully, it will happen in AS what 30 years ago when I started at Bebchool, we have seen in rheumatoid arthritis when I was a young most I still remember before the TNF alpha time where people have huge joint damage because we didn't have a downtime the right solution that can access and reduce the level of information in their joint. Hopefully, we will play the same card with HS. And by being able to control the inflammation earlier in the HS patients will be able to reduce the damage of the patient. So -- my first message is HS is a disease which was not very well known, not very well treated, not very well diagnosed. So we are in this phase that we are gaining maturity of the market -- the market is expected to grow significantly in the next few years. We think the patient will come back, thanks to new solution and by nature, we will get access to these. So when you think about access, there is also a component which is increasing the numbers of patients coming in. But yes, you're right. HS was also for us a bit delayed because the studies was done a little bit after, even if it's done very quickly. We get now even 3 years of observations of patients in clinical trial. So the durability that we have seen in our 2 Phase III, which have been really, really strong in terms of efficacy, we can also have data now that shows the data that we have as employees have a very long durability -- and so we think that a little blip, as you said, we'll be able, IHS also to move the PBMs towards an earlier usage of the product. But we think that we have also the patient with us to do so. It's not just a transaction or a negotiation argument thing about price with the PBMs. I think there is also the power of the patients that are benefiting from Bemis and who make pressure also on their plan to say, look, why I don't have access to this drug because frankly, it's very good. So gaining our dynamic market share and during the first half of this year, we have gained dynamic market share gaining dynamic market share and becoming so with a big volume and with a great feedback of the patient, it's not like if you can substitute Bilic by a lot of different drugs and everything is okay. we are different, keep that in mind. And so I feel very confident that over time, we will also NHS gain an ability to get access and not to be excluded in on PBMs and to get good access for the patients suffering from rates.

And to this point on how we're at the beginning of our understanding of the disease and HS and the scope for further innovation and market expansion. How are you thinking about some of the upcoming competitor readout specifically remibrutinib and lutikizumab? How do you think they're going to compare to Bezalex from an efficacy and tolerability perspective? And if they're successful, where do you see the fitting into the treatment paradigm? Do you see these additional entrants as potential drivers of HS market expansion?

First of all, there is a very generic low that when you add new mechanisms and new compound in a market, the market is expanding. So that's not necessarily linked to the quality of the product. it's linked to the increase on the offering. And so there is no doubt that having newcomers will help to inform the patients about the possibility of being treated and will bring more patients to the physicians to be treated. So I'm very confident that newcomers will help to expand the marketplace and will help patients to go to the physicians. Now towards what is the value of this competitor, I have a basic rule myself I look at the data, and I'll not comment on something else than the data. And so far, I haven't seen any data that can tell me that there is a promise of a product that can be superior to bill -- now if someone wants to do a Phase III, what we have done ourselves, which is demonstrating that their value is superior to us, they are very welcome to do a superiority clinical trial. But I think that we and the patients deserve more than just extrapolation or just assumptions based on a very small of data on a very small numbers of patients to imagine that the result will be fantastic I don't know that. I'm waiting until I will see the data, and I will accept the results if a superiority clinical trial demonstrate superiority versus mix -- but so far, I have not seen any of these data, and I haven't seen any plan towards demonstrating that a product can show superiority versus BizX. I can tell you, we have had the courage to do this. We have done that. with 4 products and particularly the IL-23 in transit. We had the courage because we think and we continue to think that we have a very good product that we have been able to demonstrate superiority versus standard of care. That's, to me, the trigger and the judge to demonstrate superiority. If you don't have that, don't talk about superiority and let's see the data to see what this product really can bring.

Makes sense. We've just got a question in from an investor on access in psoriasis. And I think in general terms, they're asking around how to think of access in terms of the price and volume dynamics of it. So the question is, do we see price being -- or the rebate level or price being active sort of immediately, you switch over onto a new access plan and then you gain the volume over time coming through at that new price. Just the mechanics of it, this investor is asking if there's any color you can shed Jean-Christophe, that would be helpful?

No. Yes, you're right. price by nature based on the contracting and the negotiation that opened -- that happens on a yearly base, the price impact is immediate, while the volume growth is linked to the ability to facilitate the prescription -- but frankly, there is still a certain time for price to be executed because of the complexity of the market, it's not because they had in the U.S. decide to do something that all of the specialty pharmacy and all of the difference in the different states in the U.S., and particularly are immediately putting that into motion. So that creates a little bit of time -- and on the other hand, the gain in volume when you are in -- for example, when you gain the first line, again, our volume can come relatively quickly because if you have a first line, then it's potentially becoming a reference and a preference. So it can go relatively quickly. So it's not a modernization when you can say from A to B suddenly you get a drop of a certain percentage and the volume go up 2 months later and then you compensate, it's a little bit more complex than that from utilization. However, I guess my message is that there is absolutely a strong signal that TIMSlix will continue to get the preference in the indications we are in because of the quality that we bring for the patient. And so more and more physicians are choosing me -- and for more and more of patients, bezel are really a treatment of reference. So I'm very confident that, yes, from 1 month to the other, you can see sometimes in certain areas, a certain plateau and then going up again. But overall, it is what is needed in order to gain the leadership position, and so we will get there.

And you've spoken to the breadth and the quality of the data we have for Bemzlex and the existing indications and that's continuing to evolve with your ongoing trial in PPP or palmoplantar pustulosis. -- maybe to that end, how is recruitment progressing? How are you thinking about the size of that opportunity relative to existing indications? And are you considering any further indication expansion for these?

So -- so in terms of development, PPP is the next 1 that we have, it's a small disease in terms of numbers of patients, the epitomology is I think something between 0.0%, 0.5% of the population to 0.12 something like that. So it's a very -- it's a real disease. However, -- there is no -- currently, there is no treatment available for the patients suffering from PPP. And by nature, it is a disease which is very much damaging for the patient. If you think about it, imagine that by nature, your fees and your hands suffered from readiness from etching from lesion that creates very much difficulties even to work or to hold something in our hands, right? So -- so I do feel that it's a very severe disease. It's a major burden on patients' lives because there is a huge in comfort you cannot work, you are stuck at home, you have pain. And so that's a very that's a very debilitating disease. So we think that we can be very confident because of the 1 in 3 information connected to this disease, potentially, we will get a benefit from BimZelix for this indication. And so we are very positive. Remember that Basically, we get a big majority of the patient that we have tested in a multicenter study, where we have had achieved a very complete clearance of the hand in the food and the feed based on the treatment. So we are very confident that, that will be a very significant even small number. it will be once again a significant illustration and example that Bemis creating and building the best possible value for the patients. For the time being, the recruitment is doing on track, we have initiated this -- the Phase III in November 2025, so last year, and we would expect to report top line data, I think, in 2028. -- and we are on track with the recruitment. We have also, in terms of development, as you know, a study in HS for adolescent. This is also a very important element because HS is a disease that start earlier. And very often, this is kids at the moment of the adolescent that start to get into the disease. So it's important that patients may have a solution available as early as possible to be able to treat them. So we have also that as a development.

And maybe thinking more generally about the pipeline and starting with Galva. For Phase IIa, the efficacy on EZ90 looked particularly strong compared to DUPIXENT -- so I think you showed on EASI-90 43% placebo adjusted reached that rate, and this was only 26% for DUPIXENT. What do you see as the key underlying drivers of the better efficacy? Do you think this sort of relative differential in efficacy can be replicated in your Phase IIb trial?