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Edited Transcript of UCB.BR earnings conference call or presentation 28-Feb-19 1:00pm GMT

Q4 2018 Ucb SA Earnings Call

Brussels Mar 7, 2019 (Thomson StreetEvents) -- Edited Transcript of UCB SA earnings conference call or presentation Thursday, February 28, 2019 at 1:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Antje Witte

UCB SA - VP of IR

* Detlef Thielgen

UCB SA - CFO & Executive VP

* Emmanuel Caeymaex

UCB SA - Executive VP & Head of Immunology Patient Value Unit

* Iris Löw-Friedrich

UCB SA - Chief Medical Officer, Head of Development & Medical Patient Value Practices and Executive VP

* Jean-Christophe Tellier

UCB SA - CEO & Executive Director

* Jeffrey S. Wren

UCB SA - Executive VP & Head of Neurology Patient Value Unit

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Conference Call Participants

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* Jean-Jacques Le Fur

Bryan Garnier & Co Ltd, Research Division - Analyst

* Michael Leuchten

UBS Investment Bank, Research Division - Co-Head of Pharmaceuticals Research of Equity Research

* Peter Verdult

Citigroup Inc, Research Division - Director

* Peter James Welford

Jefferies LLC, Research Division - Senior Equity Analyst

* Richard J. Parkes

Deutsche Bank AG, Research Division - Director

* Richard Vosser

JP Morgan Chase & Co, Research Division - Senior Analyst

* Trung Chuong Huynh

Crédit Suisse AG, Research Division - Research Analyst

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Presentation

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Operator [1]

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Ladies and gentlemen, welcome to the UCB Conference Call. (Operator Instructions) Please note that this conference call will be recorded and that a replay of the webcast will be available later today on UCB's website under the Investor section.

I am pleased to present Ms. Antje Witte, Head of Investor Relations, who will be the moderator of this conference. Ms. Witte, the floor is yours.

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Antje Witte, UCB SA - VP of IR [2]

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Thank you very much, Philip. So good morning from my side as well good afternoon and good evening. Welcome to the full year results call of UCB.

This call and the following question-and-answer session is covered with the disclaimer and safe harbor statement, which you'll find on Page 2 of our presentation. The presentation you find also on our website in the Investor Relations section.

We have for you here to present to you and answer your questions, Jean-Christophe Tellier, the CEO; Iris Löw-Friedrich, our Chief Medical Officer; and of course, last but not least, Detlef Thielgen, our Chief Financial Officer. And we have also Jeff Wren here as well as Emmanuel Caeymaex, who will answer your questions around immunology and neurology divisions.

I would like to hand over to Jean-Christophe now.

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Jean-Christophe Tellier, UCB SA - CEO & Executive Director [3]

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Thank you, Antje. Good morning, good afternoon, good evening, everyone. It's a pleasure to welcome you at our full year results conference call. As you have seen our press release and in the title of today, we are pleased with our results of 2018. It has been an additional good year for UCB and, actually, a fifth consecutive year of profitable growth that build a solid foundation for future growth.

So when I'm thinking about the achievements of 2018, let's get started with some significant progress that we have made towards our patient value strategy. You know that we aim to better connect the patient to the science in order to discover a more differentiated medicine than we connect back to the patients. And differentiation is a key word for us as it is the trigger to provide clinical outcome and new differentiation for the patients as well as possible best experience for the patients.

You have here a few examples of progress that we have made in 2018. I will not go through all of them, but I would like to comment just a few of them. When we think about better connecting the patient with science to have differentiated hypotheses, let's get -- let's me started with bimekizumab. And Iris will comment more on bimekizumab, but bimekizumab has been specifically designed to completely blocks twin cytokines IL-17A and F, which up till now have never been able to be targeted with the same molecule. And that's lead to potentially a better clinical outcome.

The certain example that I would like to illustrate from this patient to science connection is our anti-tau antibody, UCB0107, which has the potential to be a disease-modifying therapeutic for PSP, progressive supranuclear palsy. And this product is designed from patient's material.

If you move down the slide up to the set of connections between the solution and the patient, 2 example that I would like to illustrate. First is midazolam. The nasal spray will provide a new and, I think, well-expected solution for patients with acute repetitive seizures that today has not an ability to be comfortably treated where they suffer from this disease. This is an addition that we got from Proximagen and that we acquired last year, which is a natural addition to our growing portfolio.

And last but not least that I would like to highlight is the additional indication of Cimzia for women of childbearing age. Our update label confirmed that even if the product is on the market for now multiple years, we have been able, thanks to the design of the molecule, to demonstrate its unique differentiation for patients. So yes, indeed, the patient value strategy tends to provide differentiation, which is for us the reason for belief in its continuous success moving forward.

So I mentioned that '18 has been a good year for us. This was our objective at the beginning of the year. And you can see here that we are pleased with what we have achieved in 2018. We wanted to maximize our core portfolio growth. This has been achieved with now a 10% growth at constant rate for our core product that are reaching EUR 3.8 billion. They represent more than 82% of our revenue today.

Two, we wanted to further advance and prepare the launches of our late-stage portfolio. And here, also, '18 has been a year of significant progress. You have seen earlier in January the approval in Japan for Evenity that we are very pleased with. And we continue the process in the U.S. and in Europe.

We are filing -- we have filed also midazolam, our newest acquisition in our epilepsy portfolio, in the U.S. And the Phase III program in psoriasis for bimekizumab is now fully recruited. But not only we had to make significant advancement in our late-stage pipeline, we have also progressed earlier-stage pipeline. And Iris will comment on rozanolixizumab with the proof of concept in ITP and myasthenia gravis. We have seen also earlier this year the proof of concept of dapirolizumab in lupus and our anti-tau I just mentioned in human.

We wanted also to continue our focus on our key growth and core capabilities, neurology, in particular epilepsy and neurodegeneration as well as immunology. And you can see here that we have also progressed for creating even more focus. The spinoff of Syndesi, where we funded this new company with one of our assets, SV2A modulator, who have potentially some cognitive property but not really in our focus. So Syndesi was created with this asset in 2018. And we have acquired also midazolam, I mentioned it, and Element Genomics to strengthen our research engine. Last but not least, and Detlef will mention that, and we come back, of course, on that, we have achieved our 2018 financial outlook.

So yes, for '18, we are very pleased. And as I said, our focus is on immunology and neurology. And particularly in neurology, you will see a few illustrations of our leadership in epilepsy. I will just mention 3 of them. First, but the most important one is, of course, the numbers of patient that we are able to reach all over the globe. You see here almost 3 million patients who use Keppra, Vimpat or Briviact. I mentioned also the new launches of midazolam that will happen this year.

I would like also to mention the new indication and the innovation that we continue to push in epilepsy. The extrapolations and usage of advanced analytics to get new indications not only provide us an acceleration in the ability to get new indications such as monotherapy or pediatric indication for our drugs, such as Briviact and Vimpat, but it's also a significant value for the patient who don't have to wait until the clinical trial are done before getting access to new solutions. Padsevonil will be commented by Iris, so I will not comment more on this one.

So definitely, the fifth year of growth, you see here the numbers. If you remember, in 2014, we had the sales of -- revenue of EUR 3.3 billion and a rEBITDA of EUR 609 million. '18, we have been able to reach sales of EUR 4.6 billion and a rEBITDA of almost EUR 1.4 billion, so a significant growth on both and in particularly on the profitability.

These growth have been the result of our core product that you see on the right-hand side of the slide. And the dotted line is this magical line of the blockbuster status. So we are also pleased in 2018 to have an additional blockbuster in our portfolio with Vimpat, who have reached almost, let's say, EUR 1.1 billion this year, and the continuous growth of Cimzia, which have reached EUR 1.446 billion this year.

We are now entering in 2019. 2019 will be for us the first year of a new cycle that we have named Accelerate & Expand. And this is what we wanted to achieve starting to this phase. First, we want to continue to maximize our growth and increase the number of patients who are positively impacted by our key product. Two, we want to expand the patient population that we are able to treat with new products, such as Evenity in postfracture osteoporosis or midazolam for acute repetitive seizures, but also continue to expand our new indications with our established products, such as Cimzia, with the new label of nonradiographic axSpA that we're expecting in the U.S. this year.

Finally, we need to continue to advance our pipeline, late stage with confirmatory stage for bimekizumab, rozanolixizumab, padsevonil and again getting the Phase Ib outcome for the anti-tau and continue to enrich our pipeline with new populations with our early pipeline as well as looking for opportunistic external potential additions to our portfolio or our discovery engine.

We want to continue to invest. That's the reason why we are aiming to reduce a little bit our profitability in this year, but we have plan and commit to go back to more than 30% and actually 31% in 2021. This is what we have shared already with you last year.

So my closing slide before handing over to Iris is on translating this solidity and the growth that we have been able to achieve and delivered over the last 5 years to have reached to a confidence in the future and in future growth with this ability to potentially launch 6 products in the next 5 years. And I have mentioned them during the short presentation. You have them here on the right-hand side: romosozumab, Evenity; midazolam, Nazolam; bimekizumab; rozanolixizumab; padsevonil and anti-tau. But it's not only 6 potential product that we'll be able to launch in the next 5 years. It's 10 new patient population that may benefit from this solution. And that's, I think, the best way for me to close this part of the presentation to give you strength and confidence in our future with this potential solution for new patients.

And now I'm pleased to hand over to Iris for more illustrations of this pipeline. Iris?

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Iris Löw-Friedrich, UCB SA - Chief Medical Officer, Head of Development & Medical Patient Value Practices and Executive VP [4]

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Yes. Thank you very much, Jean-Christophe, and hello to everybody on the call. It's my pleasure to walk you through our late-stage pipeline, which is, of course, the foundation for the anticipated successful launches that Jean-Christophe mentioned.

And I would like to [share] in our courageous clinical approaches that come with very novel design ideas and that are all set up to demonstrate the differentiation of our assets based on very clear patient value propositions.

This is a view of the pipeline, and I will focus today on romosozumab, Evenity; bimekizumab; padsevonil and rozanolixizumab. I will not comment on midazolam nasal spray, which is in the final stages of regulatory review in the U.S., and I will not comment on our rich Phase I pipeline. I just want to assure you that the assets that we are developing early stage are all designed with excellent science as the foundation and with the ambition to demonstrate future differentiation and to meet future unmet medical needs.

We have a very busy and exciting year ahead of us as you see by the anticipated news flow. And again, we'll touch on most of these items going forward. The anti-tau project will read out its Phase I results more towards the end of the year, so not for today, but more discussion of this molecule at a later stage.

So now let's jump into the late-stage pipeline and let's start with Evenity, romosozumab. I would like to remind all of you that by blocking sclerostin, Evenity is a bone-forming agent that has 2 mechanisms of action. On one side, it increases very potently bone formation, and simultaneously, it reduces bone resorption. And these 2 mechanisms result in increased bone strength and bone mass and both reduce the risk of fragility fractures. And we have talked very often in the past about the burden of fragility fractures to individual patients, their families and society, requiring surgery, prolonged rehabilitation, loss of independence, eventually nursing home stays and death.

And I also want to remind you of the very compelling efficacy that we have shown together with our partner, Amgen, for Evenity. I want to remind you that we have conducted the first-ever regulatory study that has demonstrated superiority of Evenity over standard of care alendronate on all fracture endpoints, just a moment to remember that. Yes, we are all conscious of the potential cardiovascular risk that was observed in one of our Phase III studies, and we are working very diligently with regulatory authorities around the world to establish the proper benefit-risk assessment and reflect this adequately in our labels.

You have seen that the new year started with the approval of Evenity in Japan. And I think you have also witnessed our successful advisory committee to FDA where 18 out of 19 members voted in favor of approval of Evenity, of course, with appropriate postmarketing requirements. And so again, we continue the final path with FDA. We continue the regulatory processes in Europe and in other geographies. And we will keep you posted most likely in second quarter this year on the progress.

With this, I would like to move over to bimekizumab, our antibody targeting IL-17A and IL-17F. When our researchers evaluated the relevant IL-17 cytokines, they very quickly found out that not only IL-17A is relevant, but that there is paramount importance of IL-17. And they have established the evidence that both cytokines, IL-17A and F, are not redundant but that they have similar pro-inflammatory functions, and more importantly, they also synergize with other cytokines, altogether amplifying the inflammation. So it's very obvious that when a molecule blocks both cytokines that this blockage would result in enhanced efficacy.

And actually, we have been able to demonstrate this more complete clinical response in our Phase IIb results. And you have seen this before so just take the slide here as a summary. We have investigated bimekizumab in 3 patient populations: psoriasis, psoriatic arthritis and axial spondyloarthritis. And all of these 3 programs have several components in common. First of all, we have used endpoints -- clinical trial endpoints that are way more ambitious than usual clinical trial endpoints in these diseases. And we have done this consciously because we wanted to illustrate from the beginning that we have a high ambition for differentiation and that we trust in bimekizumab to be able to deliver a differentiated solution for patients.

Across all of the 3 patient populations, we have seen a steep, early increase and onset of efficacy, and we have seen sustained efficacy all across. So very exciting value proposition that we have confirmed in Phase II.

Let me walk you through the challenges of the individual patient population. People suffering from psoriasis suffer from a systemic disease, but they bear the symptoms of their disease on their skin, very visible to the outside world. So it is red, scaly, itchy, painful skin disease that really comes with a lot of social stigma and it comes with a lot of isolation and emotional burden. And then imagine if a lot of your skin is covered with these disease symptoms and if you then have the opportunity to get almost clear skin. And what we have seen in our Phase II study is that, as evidenced by PASI90, which means almost clear skin, the vast majority of patients, actually up to 80%, have achieved this goal.

And I just want you to imagine what this does to the emotional burden and the feeling of isolation of patients. They're ultimately able to revert back to normal social and working life. We have shown you here the 12-week results. We are releasing this weekend the long-term study results, which are so promising that the American Academy of Dermatology has given them a late-breaking oral explanation.

Let's move over to psoriatic arthritis. About 30% of patients with the skin disease psoriasis also suffer from a very painful, quite debilitating joint disease called psoriatic arthritis. And very often the disease starts with skin symptoms. Sometimes the disease also starts with joint symptoms, and it's very difficult to predict what the evolution will be.

The real dilemma that patients and physicians are faced -- is that no medicine that's currently available does equal justice to the joint disease and to the skin disease. So patients and their treating physicians almost have to make a tradeoff whether they take particular care of the joints or whether the skin is the priority. And again, based on what we have seen on the efficacy of bimekizumab in psoriasis and based on the data here in psoriatic arthritis, we are convinced that bimekizumab bears the potential to be this medicine that does equal justice to joints and skin for patients with psoriatic arthritis.

And then, of course, we have also looked into axial spondyloarthritis, the inflammatory disease of the spine, which burdens younger patients in the middle of their social and working life with very serious pain of the spine and the loss of function. And again, we have chosen a very high threshold here of ASAS40, and we have seen almost 50% of patients showing a dramatic response.

So all in all, the story of bimekizumab is very intact with the original scientific hypothesis. And based on the evidence that we have generated in Phase II, we have designed a quite bold and courageous Phase III program. We are running currently 3 studies in psoriasis in Phase III. These studies are fully recruited, so we will have results from these studies in fourth quarter this year. And these studies compare bimekizumab with the aim to be superior for bimekizumab. They compare bimekizumab with the current standard of care, adalimumab and ustekinumab. When you talk to payers, when you talk to physicians, these are very relevant comparisons in their mind.

We have also started a Phase IIIb study in psoriasis, and we have deliberately started it a little bit later. And here, we are investigating the superiority of bimekizumab over secukinumab on the hardest endpoint that you can imagine, namely complete clearance of the skin, PASI100. And we will deliver the results of this study in time for approval and launch in the third quarter of 2020.

The Phase III program for psoriatic arthritis and for axial spondyloarthritis is designed and will be expect to bring the molecule as fast as possible to patients. So again, we are comparing here with adalimumab, which is currently the most potent TNF blocker, is currently the most potent principal for the treatment of the joint disease. And we will then take the entirety of evidence that we have from the psoriasis program from this Phase III program to design a Phase IIIb that will include all of the then relevant competitors. And similar approach is what we have taken for axial spondyloarthritis. Again, those programs are due to start in second quarter this year.

Now let's move on to epilepsy. Padsevonil is our newest antiepileptic drug that we want to bring to patients, and it is designed with a dual mechanism of action. That padsevonil has a very high and selective affinity for the presynaptic SV2 proteins, and it has a moderate affinity for the postsynaptic GABA-A receptor and, again, designed to deliver utmost efficacy with a good safety profile.

And we are developing padsevonil in patients with focal epilepsies with very high unmet medical need. When you look at the definition of drug-resistant epilepsy that the International League Against Epilepsy has issued, you find the definition that says drug-resistant epilepsy is the failure of 2 antiepileptic drugs that have been used adequately either in monotherapy or in combination.

Here, we are recruiting patients who have failed at least 4 antiepileptic drugs and who still have a significant seizure burden. And again, we have given ourselves a very high hurdle of efficacy because, in this drug-resistant population, we want to show at least a 75% reduction in seizure frequency.

And we have achieved that already in our Phase II study, where we recruited patients with at least 4 seizures per week and where 30% of patients were a responder, 75% responder versus only 11% on placebo. This has given us the confidence to go into a large Phase IIb and III program that will recruit about 900 patients. And we have taken an approach to not wait for the Phase IIb results before we start Phase III. We have trust in our dose selection. And we know that, with this staggered approach, we can save many months to bring this molecule earlier to patients.

So we expect to have initial results in first half of 2020, and we expect to have the results from the second study in the second half of 2021. And again, I hope you see that this is the continuation of our deep commitment and legacy to serve patients with unmet medical needs who have to live with epilepsy.

Moving on to rozanolixizumab, which is designed to block the activity of the neonatal Fc receptor and thereby accelerate the catabolism of IgG antibodies, and of course, that includes autoantibodies that can be the source of severe diseases. Thereby, we believe that rozanolixizumab has the potential to become a life-changing treatment for patients with a variety of autoimmune diseases.

And these patients are currently dependent on quite cumbersome treatment regimens. They either have to be hospitalized for many hours and several days of IVIG infusions or they have to undergo plasmapheresis or they have to live with high doses of corticosteroids.

Rozanolixizumab has already demonstrated efficacy in our Phase II program in myasthenia gravis and in immune thrombocytopenia. It is readily available as a short subcutaneous infusion that can also be self-administered if so wished by patients. What we're also trying to achieve with the rozanolixizumab development program is, on one side relief from relapses, so when patients have an acute exacerbation of their disease, rozanolixizumab will provide an opportunity for treatment, but we also want to relieve patients from having to live with fear of the next relapse. And we try to develop also a maintenance therapy with rozanolixizumab that will allow patients to be well-maintained and to live a normal life without fear of the next relapse.

We are progressing the development programs in myasthenia gravis and immune thrombocytopenia to confirmatory stage. The confirmatory study for myasthenia gravis will start in second quarter this year. The confirmatory study in immune thrombocytopenia, a little bit later, more towards fourth quarter this year.

And any day now, we will start the Phase II study in CIDP, chronic inflammatory demyelinating polyneuropathy. And we are enrolling round about 40 patients who have, over the last 18 months, been dependent on immunoglobulin therapy. We are treating these patients for about 12 weeks. And we are taking well-established endpoints to see and demonstrate the efficacy and safety of rozanolixizumab in this patient population who are heavily suffering from their neurological disease so a very comprehensive program that will allow us to demonstrate efficacy of rozanolixizumab across a number of autoimmune diseases.

And with that, I'm very confident of the fact that all of this needs to be paid for and requires heavy investment. And I hand over to my colleague, Detlef, who handles our finances.

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Detlef Thielgen, UCB SA - CFO & Executive VP [5]

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Yes. Thank you, Iris. And listening to Iris, I was thinking to myself, do you prefer to be before the pipeline and in the way of something, getting to something exciting or do you prefer to be after the pipeline discussion when it's difficult to get more excitement up. So I'll give my best, at least, and I'd like to present to you the financials for 2018 as well as the outlook.

I think also you commented, from what I saw, that 2018 really delivered very strong results, and I think that it's fair to say when both on revenue and core EPS we were going beyond our guidance and as well on for rEBITDA on the high end of our guidance so I would subscribe to that.

Looking a bit more in detail to qualify the results a bit. What is important to say on revenue is that this revenue growth really has been driven by our core products, which have been able to have a 6% increase year-by-year and having in mind -- oops. Thank you. I'm not so good with my technology. I will have to ask my CIO to train me up.

So anyway, I'm coming back. The results are still very good. They are still very strong. And revenue -- our revenue also is still driven by the core products. And what is more to say to revenue is, when you look a bit more into detail, you for sure, have seen that in 2017 there was quite a substantial amount of other revenue which did not repeat in 2018, which makes this increase of 5% even much stronger because the underlying, the non-one-event growth is really strong.

We have been helped a bit by some positive hedging. And you know that we always give you a guidance that includes all the hedging. And in 2018, we benefited from some very smart hedging that took place already in 2017 that helped us to deliver these very good results on the revenue but also on the recurring EBITDA.

When we look to operating expenses, I'm very pleased with the cost management that we have shown. We already told you that we would deliver less profitability, especially when the Phase III studies will be in full swing. And I'm very happy to say that, the second year in a row, we were still able to keep the 30% threshold in terms of EBITDA to revenue ratio despite the 10% increase of R&D and despite some investment into new launches of different indications that we had. That I really was very pleased to see again that G&A costs were dropping and also efficiencies have been taken into account and also shift of investment. Now if we talk about Neupro later, a bit has been taken to really drive this positive result.

When we look into recurring EBITDA, we talked about the strong number that we delivered. And I'm very happy about that.

Profit of the group, I think, for the first time is higher than EUR 800 million. And we are quite happy with this because, as you know, this is really also telling you about cash coming to the balance sheet. And cash is important to keep financial and strategic flexibility.

Core earnings per share were more or less on last year's level mainly due to the fact that we had lesser nonrecurring cost than the year before. And we are on a very nice level, which also, as we will see, is allowing us to propose a higher dividend.

Looking into the products themselves. The most important thing to mention here is that our core products are now 88% of our net sales. As you might remember, we are divesting opportunistically when the price is right. And this is usually 1% to 2% of our revenue, which you might also want to keep in consideration when you look at the top line performance year-by-year.

Jean-Christophe already alluded to the very strong growth trend both on revenue and on recurring EBITDA. And having in mind that we had at least EUR 100 million more spent in R&D, you could see how good the underlying profitability really is that you can still then make a slight increase in overall profitability year-by-year.

Coming to 2019 and the mid-term guidance. As we mentioned already last year to you, we would be dropping a number of percentage points in terms of profitability and revenue due to the factors that I mentioned before is, again, including all the FX, which this year is less favorable than the years before. All the divestitures that we have been made and potentially will be making is already taken into consideration. So therefore, the revenue guidance is between EUR 4.6 billion and EUR 4.7 billion. I would like to point out that there is continued strong growth of the core products, which you also feel -- hopefully, feel represented in what we discuss later, the upgrade of the longer-term guidance.

The rEBITDA is between 27% and 29%. And after we mentioned last year already that we would drop a few percentage points, and I felt that it would be helpful to be very, very clear on what this means, we have given you this time a percentage of revenue rEBITDA guidance so that it's easier for you to follow that in your models.

This is based on our assumption that R&D expenses will go up again. And now we estimate 27% plus/minus 1 point. I might remind you that this year was 25%. And we achieved also that guidance quite to the point. And the year before, it was 23%. So we have been making quite significant progress in terms of the underlying profitability to be able to keep the rEBITDA at this level. And that translates just more or less 1 on 1 into core EPS, where we now give a guidance of EUR 4.40 to EUR 4.80 per share. I'd like to point out that the tax ratio will be easily consistent with this year around 20%, which is compared to a few years ago also a very nice improvement that we can show.

Looking into the mid-term guidance. It's very clear that we will stay and confirm with our guidance for 31% of rEBITDA/revenue ratio for 2021.

And I now come to our upgrade of our peak sales. I start with Vimpat, which now is more than EUR 1.4 billion. You remember, it was more than EUR 1.2 billion in our last guidance. I like to then move to Cimzia, which is now more than EUR 1.7 billion. And I know that this will be an important reference for you to see our confidence in this product as the consensus was showing quite a significant difference to our own expectations to the product.

With that, we have been investing more into these 2 products and have shifted investments away from Neupro as we could reach more patients in these other products. And therefore, we feel that Neupro has probably reached somewhat a plateau with small volatility going forward, which we feel is very positive and will contribute very nicely to our profitability going forward until loss of exclusivity.

Last but not least, Briviact will stay with its old guidance, more than EUR 600 million. And I'd just like to point it out, if you did not calculate it yourself, that our old peak guidance for CVN has now increased to EUR 3.4 billion instead of EUR 3.1 billion, so really very nice achievement.

Perhaps one thing that I'd like to mention so that we don't have surprises going through the year. We will change a bit the way that we are reporting. We will not report quarterly top line anymore because we have gotten the feedback that this information is available also through other sources, and therefore, it was not seen as relevant. And we feel that what we started already in last quarter that a bit more event-driven communication when questions come up as a result of clinical trials or other developments within our business would be more helpful to you. And therefore, we go this pathway, which will also, I think, eliminate a bit of the uncertainties that the volatility between individual quarters have always created in terms of understanding the underlying performance of the products.

With that, I think I can close out the segment and hand over back to Jean-Christophe.

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Jean-Christophe Tellier, UCB SA - CEO & Executive Director [6]

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Thank you, Detlef, and thank you, Iris, for this overview of the pipeline and of our financial results.

So just to close before opening the Q&A session. Once again, we are pleased with the result of 2018. We have achieved our fifth consecutive years of profitable growth, which have created a solid platform and a strong foundation for our future growth. And I would like just to close with this slide summarizing the 6 potential launches that we're expecting in the next 5 years, which may create value for the patient living with these different diseases. And if you look at them, it's already 10 -- as I mentioned earlier, 10 different patient populations that we are aiming to reach out thanks to this maturity of the pipeline and these potential launches.

So with that, I would like to open the session of the Q&A. Thank you.

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Antje Witte, UCB SA - VP of IR [7]

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Thank you very much. Could you please, Philip, open the question-and-answer session?

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Questions and Answers

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Operator [1]

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(Operator Instructions) We have a first question from Richard Parkes from Deutsche Bank.

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Richard J. Parkes, Deutsche Bank AG, Research Division - Director [2]

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I've got 3 questions. I'll ask them in turn, if that's okay. First one for Detlef. Just wondered if you could help us to understand what your revenue guidance implies in terms of CER revenue growth and sort of help us understand the hedging because you said the FX is kind of less favorable. I've got FX being a positive tailwind in 2019. So is what you're saying is that we need to factor in some negative revenue from the hedging this year? So that's the first question.

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Detlef Thielgen, UCB SA - CFO & Executive VP [3]

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Oh, I'm happy to go already on that one. Let me explain a bit how hedging works for us. We are hedging in advance of the years that we are providing guidances for, which does mean when I provide the guidance today, I have hedged already through the entire year before, which does mean that actual rates that you might take into consideration or just taking the sales that are coming out of the year before multiplied by the implied growth rate are not giving you the same result than what we have. And what happens with that is 2 things. More certain possibility to give you credible numbers because we already know the rates we will have to apply, but it also means that you have, depending on the volatility of the FX, between the years, you can have plus or minuses. Last year, we hedged very, very early and for very favorable rates already so there was a positive impact on that. And this is not the case here because our overall hedging is less favorable than it was in last year, and it has probably a 2% to 3% impact on the top line. And therefore, I think looking at what we are guiding and what consensus was displaying, it looks to me like I explained very well the disconnect here, but it's very natural as you cannot see that. And the same is true for either discontinued or divested assets that you also cannot see. In that regard, keeping in mind my 1% to 2% per year that was happening quite regularly is perhaps something that you might want to consider going forward.

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Richard J. Parkes, Deutsche Bank AG, Research Division - Director [4]

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Okay. Perfect. That's very helpful. The second question was, just wondered if Iris could clarify. And I might have missed what she said around the design for the CIDP Phase II study. Did I interpret that correctly that it's just going to be a study where you're recruiting patients who are on IVIG and then looking at whether they relapse when they're switched on to roza. So that's the next question. Maybe you could talk about what's allowed you to accelerate initiation of the Phase III trials as well. I think previously the myasthenia gravis study was second half, now it's second quarter.

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Iris Löw-Friedrich, UCB SA - Chief Medical Officer, Head of Development & Medical Patient Value Practices and Executive VP [5]

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Yes. Thank you, Richard, for 2 very good questions. So let me repeat the design of the CIDP Phase II study. And again, please keep in mind, it is a proof-of-concept study, and CIDP is quite a complex disease also in terms of pathomechanisms. So our intent is to recruit round about 34 patients who have required IVIG treatment before. And we have set kind of the last 18 months because this is a patient population that we want to address in the first instance, and we recruit patients after they have received their last IVIG treatment and then continue on with rozanolixizumab. And it is weekly subcutaneous infusion for about 12 weeks. And again, we're using standard endpoints for the disease. So we found that this is a very appropriate and very elegant solution to find the patient population that will benefit most from rozanolixizumab in this proof-of-concept setting. Your question on the acceleration of the MG Phase III program. We have, as usual, worked diligently through regulatory input. We have worked diligently through payer input. We've worked very, very diligently with patients on the design of the study. And we have clarification of our questions very early. We have a very clear concept. And now we are ready to go. So no magic, but only a very engaged team working in a very networked way bringing all the stakeholders together and giving us confidence that we have the most appropriate study design.

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Richard J. Parkes, Deutsche Bank AG, Research Division - Director [6]

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Okay. Perfect. And then my final question is just a broader one in terms of proposal to remove the safe harbor on rebates in U.S. Medicare. I'm just wondering what impact that might have for you and, in particular, your Cimzia and potential bimekizumab franchise given that mostly you're going up against established incumbents with much larger market share. So I'm just wondering if that would be positive or negative for you.

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Emmanuel Caeymaex, UCB SA - Executive VP & Head of Immunology Patient Value Unit [7]

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Thank you, Richard, Emmanuel here. Any trend in the U.S. moving away from scale and volume towards value is a positive for us. Our products tend to be well differentiated clinically. And it's actually something we observe with higher shares in Europe than in the U.S. with the same products. I think the difference is the rebate wall as some call it. So I would assume that this would be a positive. The other thing I would say is that, currently, the net price of Cimzia is lower than branded TNF competition, which also means that, in a system where value for money matters, this would be a brand that could benefit market share-wise.

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Operator [8]

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Our next question is from Michael Leuchten from UBS.

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Michael Leuchten, UBS Investment Bank, Research Division - Co-Head of Pharmaceuticals Research of Equity Research [9]

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Thank you for taking my questions. Three others in one go. First one on Cimzia in Europe. Just wondered if you could talk to the early experience in the market given biosimilar competition elsewhere in the TNF-alpha group. A question for Iris on roza in ITP. I thought we were waiting for a high-dose cohort out of the initial study. Just wonder where that is. Are we still going to see that or have you made up your mind about dosing in ITP given you've put a date on start of the trial -- in the confirmatory trial? And then thirdly on bimekizumab, just wondered if at any point you would consider going head-to-head with another IL-17A given your optimistic view of the IL-17A and F targeting.

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Emmanuel Caeymaex, UCB SA - Executive VP & Head of Immunology Patient Value Unit [10]

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Thank you very much. I'll start with questions 1 and 3. So with regards to the experience with biosimilars of infliximab, etanercept and adalimumab in Europe, perhaps a few facts first. Today, about half of the Enbrel, etanercept, volume is biosimilar in Europe a few years after launch, yet the share of the molecule itself hasn't really increased. So payers are focused on switching patients from brand to biosimilar. The same is actually true for infliximab, where that rate stands at about 60%. If you now look at the impact on Cimzia, you will have seen in the document that our market share is stable, if not slightly increasing. And that is mostly in the segment of patients where Cimzia is most differentiated, which are women of childbearing age. Of course, with adalimumab biosimilars coming along, we see the payers reacting more quickly. And so the erosion that's been observed over the first few months in Germany, for example, with adalimumab is way faster than with etanercept. However, it doesn't really impact Cimzia in a way that is dramatic. And we've actually modeled how Cimzia would grow without biosimilars. And it would probably grow by about 5% to 10% more. And about half of this is volume and about half of that are rebates or discounts we need to give to be able to continue to be competitive in segments where that is possible. So net-net, I do think that our business in Europe is in good shape, that we will have the opportunity to grow incrementally not only with the increasing women of childbearing age segment, but also with our launch in psoriasis, which will start kicking in this year in Europe. In terms of bimekizumab, so Iris presented 3 Phase III studies, out of which 2 have an active control, superiority studies. And then she also mentioned that there is a study comparing bimekizumab with Cosentyx, secukinumab. And that is actually an IL-17A. And the measure that we will use to demonstrate superiority is PASI100, meaning completely clear skin because that is what the majority of patients want and that is the long-term goal that is now feasible with agents like bimekizumab. And as Iris mentioned, the results will become available by Q3 next year, which will be well ahead of our launch time, which would be scheduled a year after if everything goes to plan.

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Iris Löw-Friedrich, UCB SA - Chief Medical Officer, Head of Development & Medical Patient Value Practices and Executive VP [11]

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Yes. Thank you very much, Emmanuel. And Michael, thank you very much for your questions. You had asked around immune thrombocytopenia and the connectivity between the high doses that we are still exploring as an extension of our proof-of-concept study and the third statement about the start of our confirmatory study. So you're absolutely right. We are continuing to explore high doses in ITP as an extension of our proof-of-concept study because it's always helpful to understand how far can we go and what is the efficacy and safety profile of higher doses. We do not need these doses for the development program, so this is really just to learn as much as we can because we know from the Phase II results with the lower doses and we know from very sophisticated modeling approaches that we have in our hands that we can achieve the target efficacy with the doses that have already been tested. And so we try to combine the best. We move forward as quickly as possible with the program into confirmatory phase, and we learn as much as we can from the proof-of-concept study.

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Operator [12]

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Our next question is from Richard Vosser from JPMorgan.

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Richard Vosser, JP Morgan Chase & Co, Research Division - Senior Analyst [13]

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Following up just on ITP, first of all -- sorry, on the CIDP trial for roza. Just with 34 patients, I think CIDP's a pretty heterogeneous disease, so how are you going to sort of test various subgroups within CIDP? How are you going to choose the patients? That's the first question. Second question just on following up, I think, from Michael's question on bimekizumab head-to-head versus Cosentyx. I thought one of the elements of differentiation of targeting the F form of IL-17 was the effect on joints compared to the skin. So why not go head-to-head in the psoriatic arthritis straightaway against Cosentyx with adalimumab being superseded by Cosentyx? And then final question just on Evenity. Clearly, coming out of the panel, it seems like the -- or you proposed or Amgen proposed a black box warning for CV risk on the label in the U.S. Just in your preparation for market, what feedback have you had from doctors and KOLs around that labeling and where they think that they'll actually use the product?

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Iris Löw-Friedrich, UCB SA - Chief Medical Officer, Head of Development & Medical Patient Value Practices and Executive VP [14]

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Yes. Thank you very much, Richard, excellent questions. So first of all, on CIDP and the patient population that we want to recruit, keep in mind, we're talking about a proof-of-concept study so round about 40 patients you mentioned, 34 is an appropriate sample size. We will test 1 dose of rozanolixizumab versus placebo, so we'll have relatively small groups for treatment arm. As you rightly said, CIDP patients are very heterogeneous. And it would be not really helpful and productive trying to stratify in a relatively small study. That actually should prepare us for larger-scale development and should prepare us for the reality of the disease. So we have avoided the dilemma that you sketched out by saying we take patients who have been in need of IVIG before because these are the patients that will most likely benefit from rozanolixizumab. It goes without saying that, in such a small study, we will do all kinds of biomarker work. We will look into all kinds of antibody panels, but we don't think that it would be prudent to use those as inclusion and exclusion criteria. So that's the simple explanation for how we got to the patient population that we have chosen. Then on the head-to-head trial against secukinumab. I want to reiterate that we understand and recognize the huge unmet medical need in psoriatic arthritis, where there is no treatment available that really serves the joints and the skin equally well. And that is where we believe that bimekizumab can add tremendous value. I would encourage you to look at the entirety of the program that we have planned so far, which will give us data versus adalimumab, which will give us data versus ustekinumab, will give us data versus secukinumab. And we will reach patients first with the psoriasis program because that's going faster. And then we want to move as quickly as possible on psoriatic arthritis. And here, we have chosen an anti-TNF as comparator because, if you want to specifically look at the joint disease, this is the probably most potent class of molecule. And then in the end of that Phase III program, we will look at everything that we have. We will look at the competition that is existing and emerging, and then we'll take the right decision for Phase IIIb program. Keep in mind that while the scientific excitement might move quickly, physicians and payers are quite conservative so we always have to be mindful that we compare against existing standard of care, while please rest assured, we are not afraid of future standard of care. So we'll take the decision when the right moment comes. And then your last question was on Evenity. And you are correct in the advisory committee that there's a proposal for boxed warning on the potential cardiovascular risk. And I can't comment further on this because, of course, there's ongoing active dialogue with the FDA. We will collect feedback when we have the label in place, but I can tell you that the physicians dealing with osteoporosis are very well versed dealing with an elderly population, are very well versed dealing with the geriatric population with multiple comorbidities, and they know how the comorbidities have to be controlled. And I can also remind you that they are very much used to dealing with medicines who have even black box warning because that's true for the majority of the currently available treatments. So first agenda item for is to work with the regulators towards the best-possible label, which means the label that is most informative for patients and their treating physicians about the benefits of Evenity and the potential cardiovascular risk.

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Operator [15]

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We have a next question from Trung Huynh from Credit Suisse.

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Trung Chuong Huynh, Crédit Suisse AG, Research Division - Research Analyst [16]

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I have 3, if I can. Just following up on Richard's question on your expectations for the Evenity label. When we listened in on the AdComm, the panel was clearly clear that Evenity was an effective treatment for postmenopausal women with osteoporosis. But is there any possibility you could get a label which is broader than those which can carry the high risk of fracture? Or is your discussions with FDA exclusively for this narrower population? And then secondly, just on the level of spend for Evenity. For 2018, your other operating expenses line, that included EUR 11 million for the commercialization of it. What are your expectations for how this evolves in '19? And then finally, just one on Cimzia, can you just give us an update on the rollout of that in psoriasis in both U.S. and EU?

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Iris Löw-Friedrich, UCB SA - Chief Medical Officer, Head of Development & Medical Patient Value Practices and Executive VP [17]

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And thanks very much, and I will start with the question on the Evenity label. You have seen us going in with the label that we found most adequate. Everything else is an ongoing conversation with FDA. And I can only ask for your understanding that I cannot comment on that. Again, as I said, I'm hopeful that we will have news for you in second quarter but not today. So thanks very much for your understanding. I will hand over to Detlef to comment on the financial question, the commercial spend on Evenity that was on the books.

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Detlef Thielgen, UCB SA - CFO & Executive VP [18]

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Yes. You have to have in mind that when you are looking through that line that it's not only Evenity that is in there, so you might underestimate the real expense that is in there. When you are looking between the years, we are expecting that Evenity expenses will go up, which would be expected with the launch. And in general, you could see these expenses in the higher double-digit millions per year.

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Emmanuel Caeymaex, UCB SA - Executive VP & Head of Immunology Patient Value Unit [19]

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And to the question as to the psoriasis launch rollout, let me perhaps start with the U.S. So we're having a very good launch. As you know, the psoriasis market in the U.S. is quite competitive, so we decided to go for a focused launch, what we call For Her. So (inaudible) positioned for women of childbearing age suffering from moderate-to-severe psoriasis. This has been very well accepted by prescribers. And in fact, we have more than 500 individual prescribers to-date. We've put a bridge program together recognizing that, in dermatology, it is necessary to, let's say, make it easy for prescribers. And this bridge program is functioning very well. About 2/3 of our patients are currently paid for. So I think all the fundaments for our launch are in place now. And this year is the year where we should start seeing psoriasis really becoming a key driver to Cimzia sales increases. Of course, in Europe, the launches are more staggered, owing to the national reimbursement agencies. The launch in Germany is going very well. And here, again, the intention to use the product -- the awareness of the product is very high. And the majority of patients that have been receiving Cimzia in psoriasis are women of childbearing age. So I would say that last year has been a year of introducing ourselves to the dermatology community, gaining credibility, gaining the approval and launching Cimzia in a credible manner, and this has worked well. So we will be able to scale our efforts this year and make psoriasis 1 of our 3 drivers for growing Cimzia looking forward.

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Operator [20]

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We have a question from Peter Verdult from Citi.

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Peter Verdult, Citigroup Inc, Research Division - Director [21]

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It's Pete Verdult here from Citi. Forgive me, I've got quite a number of questions, but given that I'm sort of in the back end of the queue, at least not too bad. But quickly kicking off, JC, on romo. Can you just remind us what the 1-year treatment cost is currently in Japan and whether you are willing at this stage to give a global peak sales forecast? Then either JC or Detlef, just on balance sheet utilization. You've clearly expressed an appetite to bolster the neurology portfolio. You've been active in 2018. Just any high-level thoughts and perspective on what you're seeing and whether valuation expectations are becoming more realistic vis-à-vis last year. And then three, if I may, a quick one for Iris and Emmanuel. Just, Iris, you talked about being courageous on trial design. You're going head-to-head against Cosentyx with bimekizumab, but at the same time, we're seeing the IL-23 class emerging as superior to IL-17 and then assuming that their safety profile is fine. We've got the JAKs coming into view as well. So just how you're thinking about bimekizumab in the context of data that's being produced for IL-23. And then just coming back to roza in CIDP. Would any trials in the front-line setting only commence after we see the proof-of-concept study that you laid out in your prepared remarks. And then again, thank you for your patience, the last question maybe for Emmanuel. Cimzia in nonradiographic axSpA, I mean, the docs are clearly enthused by your opportunity in the U.S., but they point out that the market needs to be created, and it's going to be difficult to drive many younger patients through to tertiary centers. So can you lay out how much you're going to put behind trying to build the market? Or are you going to wait versus other parties to come in and join the party. So just how you can really commercialize that nonradiographic axSpA opportunity in the U.S.?

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Jean-Christophe Tellier, UCB SA - CEO & Executive Director [22]

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Thank you, Peter, I can maybe quickly comment on the first 2 questions and then go over to Iris and Cimzia. It's a little bit too early to share with you some views on peak sales. You know that, classically, we do that when the product is on the market after a couple of months of experience of the market. So please keep your questions, and we will comment on that, including Japan, actually a little bit later. But we are very conscious and hopeful that, with the advancement of the regulatory process, we will be able to do that in the coming months or year. On the strategic flexibility, we are very -- I mean, Detlef mentioned that we are very pleased of our current situation. We have been able to reduce our level of debt. The debt has decreased also in '18 that give us a sense to be opportunistic towards potential external or inorganic growth. As you had rightly said, Peter, we are looking constantly on 2 key areas, I would say. One is assets that could fit and add to our portfolio. Midazolam is a nice example of what we have been able to achieve in '18, finding an asset which is a very good complement to what we have, proposing now to patients suffering from epilepsy a full scope of treatment from acute repetitive seizures to chronic treatment. On the other hand, we want also to continue to strengthen our discovery engine, and we are constantly looking at technologies, platforms and potential future new ways of developing drugs that can provide a differentiated solution for the patients. Element Genomics in 2018 was a nice illustration of that. So you can continue to think that way for us moving forward. It's more opportunistic and additions to what we have to anything else. Iris?

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Iris Löw-Friedrich, UCB SA - Chief Medical Officer, Head of Development & Medical Patient Value Practices and Executive VP [23]

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Yes. Thanks very much, Peter, for the question on the trial designs for the head-to-head studies with bimekizumab. A few comments in general. First of all, keep in mind that we are choosing endpoints that are very ambitious, right. We talked about going for PASI90 or even PASI100 in the bimekizumab control study. This means really that we expect clear skin in the majority of patients. Please also keep in mind that we are going for superiority. So there's a clear ambition to demonstrate superiority. And I still believe that this is courageous. I'm with you that this is a fast-moving field. And I can read every week articles where a new molecule has been tested. And of course, we cannot switch our comparators that quickly. And we need to stick to what is current standard of care because we have to convince patients and physicians and payers. And we need to anticipate properly what is future standard of care. You shared your excitement about the IL-23 class of molecules. And like you, I have looked at the skin data and found them compelling. But I've also looked at the joint data, and I've been very reassured looking at the joint data of the IL-23s that bimekizumab is much needed by patients who suffer from psoriatic arthritis or cannot afford only having a good treatment for their skin and not having a good treatment for their joints. So look at them, and I think you will be with me that bimekizumab is a much-needed treatment alternative. And Peter, I apologize, there was a second part to your question which I could not quite capture. And Emmanuel will then talk about Cimzia and the nonradiographic axSpA population.

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Peter Verdult, Citigroup Inc, Research Division - Director [24]

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Sure. I'll be quick, Iris. It was regarding roza, the FcRn agent that you're developing in CIDP. In terms of going to sort of front-line setting in patients that have not experienced Ig before, would that only happen after you have proof-of-concept data for what you laid out during your remarks? Or would you be starting new trials in that front-line setting before.

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Iris Löw-Friedrich, UCB SA - Chief Medical Officer, Head of Development & Medical Patient Value Practices and Executive VP [25]

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Yes. We are exploring that. And thank you for explaining your definition of front-line setting. We're exploring that. And we will have a very thorough look at the results of our proof-of-concept data at the ongoing other programs and our learnings in parallel on the patient population overall. And that will then drive our pathway towards a broad CIDP population if that appears meaningful. So it's really exploratory work that's ongoing. And we want to start with those patients that are really in high need to avoid IVIG therapy going forward and where we want to provide an easy-to-use medication that is very much combinable with a regular social and working life. So step-by-step, we'll evaluate as always. And thank you for the good question and the reminder.

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Emmanuel Caeymaex, UCB SA - Executive VP & Head of Immunology Patient Value Unit [26]

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Yes. And Peter, on Cimzia's entry for nonradiographic axSpA patients in the U.S., you are right that in many ways this market needs to be set up or liberated in a way. Most patients suffer from back pain, probably wait 7 to 9 years before they get diagnosed properly, often undergo unnecessary surgery or take drugs that actually don't work for this condition, so there is an enormous unmet need. And we have established that there's at least 0.5 million patients suffering from this condition in the U.S. So it is indeed a big opportunity. Now if we think about stakeholders, a lot of education is needed. So let me briefly touch upon all of them. So first of all, for health-care professionals, 2/3 of rheumatologists in the U.S. are now familiar with the term nonradiographic axSpA, which is probably about double from what it was 2 years ago. And the ACR guidelines, the American College of Rheumatology guidelines on axial spondyloarthritis is clearly spelling out nonradiographic axSpA. So I think, from a health-care professional point of view in rheumatology, things are now in place, which clearly wasn't the case even a year ago. Then there's the system and the payers. So currently, there's no ICD-10 code for nonradiographic axSpA, which could be a hurdle. And we're in the process of changing this in collaboration with patient advocacy groups. And I'm confident that this will be in place well within this year. We're also educating payers who have an understanding of what it may be and who are very interested in understanding all the health-care resources that are misinvested in this space. So there's a level of interest here that is high. And then finally the patients, and that's really to your point, how will we target patients. Since the difficulty is really to diagnose this, and this usually takes a doctor, what we can do in collaboration with social media platforms and patient advocacy groups is to ensure that those patients who suffer from what they perceive is lower back pain that they start realizing as quickly as possible that there is a significant chance that this could be inflammatory as opposed to mechanical. And so our efforts are really geared towards social media, those platforms and patient advocacy groups that have that outreach over the net. And this way, we believe that we will be able to start growing this market and making sure that patients will access those products. So don't expect a big DTC campaign immediately. I don't think this would be the wisest way to invest. Of course, as more companies join the party, the understanding, et cetera, will continue to evolve. And we actually welcome that. The 2 next products that may get there are IL-17A inhibitors. So different mode of action, different side-effect profile. And I believe there will be space for a few, but we're not waiting for them to act.

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Operator [27]

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We have a question from Peter Welford from Jefferies.

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Peter James Welford, Jefferies LLC, Research Division - Senior Equity Analyst [28]

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I've got 2 ones for Iris, please, and then 2 very quick ones for Detlef. Just for Iris, I believe that the Phase IIb padsevonil trial was enlarged during the course of last year. And is this sufficient for filing, do you think? Or would it potentially be -- do we have to wait for the Phase III data at the end of 2021, I guess, worst case or best case depending which way you look at it before we could potentially file with regulators. And then on bimekizumab. Could you just talk about perhaps, are there any other secondary endpoints you're also looking at within the Phase IIIb psoriasis but also the psoriatic arthritis study that potentially could tease out differentiation features between the competitors? And perhaps just talk about whether these sort of endpoints are to appeal to payers? And then just 2 quick ones for Detlef. Just on the tax rate, is that 20% the core tax rate? Or is that -- you said it was similar to this year, which I think was 20% on a GAAP basis, but it was different on a core basis, I think. And also the amortization. Should that be broadly similar? Or I recall, I think, that the Celltech ensure some of those things have died away now and so actually amortization could be down this year. Could you give us any sort of guide as to what we should be thinking for amortization charges in '19?

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Iris Löw-Friedrich, UCB SA - Chief Medical Officer, Head of Development & Medical Patient Value Practices and Executive VP [29]

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Yes. Thank you very much. First of all, your question on padsevonil and whether the Phase IIb as a stand-alone would be sufficient for regulatory submission. The answer is no. FDA will require in focal onset seizures 2 adequate and well-controlled studies. And our proof-of-concept study, while very successful, would not hold up to that standard. So we need both studies. And that's why we have kind of put them closely together so that we save time in the end, but we will still need the data from both. The bimekizumab Phase III studies have long list of secondary and exploratory endpoints because, as you rightly stated, we would not want to miss an opportunity for differentiation. I think it went beyond the remit of this call to guide you through the entire list. But believe me, we have left no stone unturned, and we will not leave any stone unturned to find further differentiation. For me, it's further differentiation because we have talked today a lot around the basic differentiation that we see already so more to come.

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Detlef Thielgen, UCB SA - CFO & Executive VP [30]

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So then I can go to the tax rate. It will be on the same basis that you see this year. So the comment was on the same basis. And in terms of depreciation, amortization, it will still go up. And the main reason is Cimzia in psoriasis that we started and not a full year in 2018. So it will be a full year in 2019 and midazolam, which will be coming in '19. And I would assume that we are seeing something around perhaps EUR 30 million of upward change.

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Peter James Welford, Jefferies LLC, Research Division - Senior Equity Analyst [31]

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So you have about EUR 30 million incremental you're saying approximately in '19 or '18?

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Detlef Thielgen, UCB SA - CFO & Executive VP [32]

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Yes, exactly.

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Operator [33]

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Our last question is from Jean-Jacques Le Fur from Bryan Garnier.

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Jean-Jacques Le Fur, Bryan Garnier & Co Ltd, Research Division - Analyst [34]

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Three products, if I may. The first is on Cimzia. Sales growth have slowed down at constant exchange rate in all regions in Q4. Is there any specific explanations mainly for Europe and international as I well understood your history on price. The second one is on Neupro. I remember that during H1 last year you expected Neupro to reach EUR 400 million peak sales thanks to China. So what has changed between H1 and today, obviously, in China to revise the peak sales? And lastly on Keppra. In your press release, you stated that sales are continuing to mature. So what does that mean in terms of sales growth or sales decline for the next 2 to 3 years?

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Emmanuel Caeymaex, UCB SA - Executive VP & Head of Immunology Patient Value Unit [35]

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Thank you, Jean-Jacques. On the Cimzia side, in international markets, it's mostly linked to the fact that we work with licensees in a number of markets. And so therefore, the ordering pattern can vary a little bit. Those parties may want to purchase before the end of the year or after the end of the year. And that is essentially the reason why you're seeing that. In terms of Europe, I wouldn't have any specific reason. I think if you look at the intrinsic market share, Cimzia is holding up very well in a growing market. So I don't have any immediate answer for you. I haven't really noticed that the sales were perhaps slower in Europe in Q4. Certainly, compared to Q4 last year, they're up by about 5% or 6%. So I think it's business as usual.

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Jeffrey S. Wren, UCB SA - Executive VP & Head of Neurology Patient Value Unit [36]

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Thank you for your question on both Neupro and Keppra. So one of the things that has changed with Neupro, and Detlef mentioned this, is that we are reinvesting in some stronger growth opportunities right now. And so you've seen this by the growth of Briviact and also of Vimpat. And you have seen probably the market number showing that we see small declines in the U.S. from the TRx growth. We see Europe stabilizing. We still see strong growth of Neupro in Japan, but overall now, we believe that it's a mature market, and that's why we have changed guidance. Now looking at Keppra, it's a unique story, is it not? So Keppra continues to do well. And this is what we see. We see that it continues to decline in the U.S. And we've been saying, it's going to be this mid-single-digit decline. In Europe, it's somewhat stable to slightly declining. And yet on the other side of the equation, we see strong fundamental growth rate in Japan and China, roughly 20% and 26%. Collectively, though, we still think that we'll see sort of mid-digit declines over the next 2 or 3 years.

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Jean-Jacques Le Fur, Bryan Garnier & Co Ltd, Research Division - Analyst [37]

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Yes. But just coming back on Neupro, my question was more directed to China as it was expected during H1 that China may help Neupro. And I well understood the switch in investment, obviously.

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Jeffrey S. Wren, UCB SA - Executive VP & Head of Neurology Patient Value Unit [38]

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Sorry, I failed to answer that part of your question. So we have launched Neupro in China. It received approval in August. We commercialized roughly in November. It does take some time to receive reimbursement, so over the next couple of years, we're looking at our listings at a provincial level. And then hopefully, we'll see some acceleration of growth. But over the next couple of years, it's somewhat slow going as we pursue our reimbursement at a provincial level.

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Operator [39]

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We have no other questions.

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Antje Witte, UCB SA - VP of IR [40]

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Thank you very much. And given the time, I think we can conclude the call here. Thank you all for your interest, for your multiple questions. For any further questions, you know where to find us. The UCB Investor Relation team is available for you and have a good day for you all. Thank you.

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Operator [41]

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Thank you. Ladies and gentlemen, this concludes today's web conference. Thank you all for your participation. You may now disconnect.