UCB ASPIRING TO BE THE PATIENTCENTRIC BIOPHARMA LEADER

UCB ASPIRING TO BE THE PATIENT-CENTRIC BIOPHARMA LEADER BOST Chloé , BOUQUET Franck, HAMMER Caroline, HOUNNOU Carmelle, MILADI Majdi 1

SUMMARY HISTORY AND VISION PRODUCTS BIOPHARMA’S PERSPECTIVES : R&D, PIPELINE STRATEGY FINANCIALS SWOT 2

ABOUT UCB Biopharmaceutical company in more than 40 countries 8 500 employees 3. 2 billion in 2010 3

UCB VISION: “ To be the patient-centric global biopharmaceutical leader, transforming the lives of people living with severe diseases” Connecting science in new way By integrating biology and chemistry Connecting people In a knowledge- and ideas-based industry, human capital is the lifeblood of success Connecting patients with each other, partners and opinion formers 4

HISTORY: CENTURY OF DISCOVERY 1960 s – 1990 s Most important pharmaceutical discovery(Nootropyl®, Zyrtec®, Keppra®) Visionary research into biotechnology Expansion in other continent 1950 s First therapeutic breakthoughs 1920 s -1940 s Creation of UCB (1928) ü primarily focusing on industrial chemicals ü Expansion into industrial films and pharmaceutical research 5

CENTURY OF GREAT CHANGES 2000 -2004 Becoming a pharmaceutical compagny ü Transformation into a pure biopharma started ü Sell of surface specialties ü Acquired the leading British biotechnology company, Celltech 6

CENTURY OF GREAT CHANGES 2008 -2010 2005 - 2007 Several launches in core areas News products, news forms and news indications But Keppra® lost its patent in U. S 2008/Europe in 2010 First filing of a biologic and a major acquisition ü Cimzia® approval in the U S ü Acquisition of Schwarz Pharma But Zyrtec® lost its patent in 2007 2000 -2004 7

UCB’S INTERESTS Fast, straightforward and flexible partnering process : Opportunity confirmation Detailed evaluation Due diligence and negotiation Implementation and alliance management Neurology Epilepsy Parkinson's disease Cognitive disorders Orphan indication in neurology Immunology Rheumatology Gastroenterology 8

UCB’S PARTNERSHIPS : STRATEGIC PARTNERS Research Product Development Marketed Products ü ü ü ü Astra. Zeneca/Millenium Biowa Chem. Bridge Emerald Harvard University K. U. Leuven Gene Logics gene express Axiom, Sareum Crucell, Zobio Biopharm AG Ariadne Genomics's Chem. Bridge Corp Proteros Bioseek, biofocus http: //www. ucb. com/ ü ü ü Amgen Biogen Idec Biotie Therapies Immunomedics Pfizer Wilex ü ü ü ü Abbott Laboratories Astra. Zeneca Bayer Chiesi Glaxo. Smith. Kline Jazz Pharmaceuticals J & J Novartis Otsuka OXO Pfizer Rovi Lonza 9

UCB’S PRODUCTS 10

2 MAJOR THERAPEUTIC AREAS IMMUNOLOGY ZYRTEC® CIMZIA® CNS KEPPRA® VIMPAT® NEUPRO® 11

IMMUNOLOGY 12

ZYRTEC® 13

WHAT IS ZYRTEC®? Active substance : Cetirizine Mechanism of action: Strong antagonist of peripheral H 1 receptors, antihistamine Indication: Allergies 14

ZYRTEC® REVENUE Loss of 53 % of the sales 15

CIMZIA® 16

WHAT IS CIMZIA®? The first pegylated antibody A new PEGylated anti-TNF PEG improved drug solubility and stability Extended circulating life Reduced dosage frequency 17

INDICATIONS Crohn’s Disease Rheumatoïd arthritis 18

27 000 patients treated in 2010 § Expected peak sales of at least € 1. 5 billion in 2015 § 4 additional development projects: § ankylosing spondylitis § juvenile rheumatoid arthritis § psoriatic arthritis § rheumatoid arthritis (Japan) 19

CIMZIA® AND IMMUNOLOGY DISORDERS CROHN’S DISEASE Prevalence: 1 million people Market: € 0, 9 billion RHEUMATOID ARTHRITIS Prevalence: 5, 1 millions people Market: € 5, 8 billion 20 UCB annual report 2007 and 2008

PRESCRIPTIONS IN 2009 FOR CROHN’S DISEASE FOR RHEUMATOID ARTHRITIS 21 UCB annual report 2009

CIMZIA® REVENUE Almost triple in 1 year ! 22

CNS 23

KEPPRA® 24

KEPPRA® Different from the mechanisms of current antiepileptic medicinal products 25 http: //www. cimzia. com

KEPPRA® AND EPILEPSY 50 millions people worldwide Incidence in developed countries 50/100, 000 personyears Incidence increase in developing country: Africa 63 -158 /100, 000 person-years Latin America 78 -190/100, 000 person-years High unmet medical need in 1/3 of treated epilepsy patients Keppra: one of the most prescribe drug for epilepsy 26 UCB annual report 2009

UCB ANTIEPILEPTIC EXPERIENCE About 50 millions people worldwide 300, 000 U. S people have a first convulsion each year The major firms include: - Abbott laboratories - Cephalon - GSK - J&J - Novartis AG - Pfizer - Sanofi-Aventis SA - Shire - UCB Pharma 27

UCB ANTIEPILEPTIC EXPERIENCE Antiepileptics Market Share by Revenue, 2008 Keppra Rank 3 in revenue 28

IN 2009… Keppra loss his patent in US…. But Launch of KEPPRA XR once-a-day extended-release epilepsy medication 29

KEPPRA® REVENUE Decrease since 2008 30

VIMPAT® 31

WHAT IS VIMPAT? 1 Indication: Epilpepsy adjunctive therapy 30% of patients with epilepsy do not have seizure control even with the best available medications No drug-drug interactions Can become a major adjunctive therapy 32

Reaching more than 135 000 patients Available in 23 countries 4 additional development projects: § adjunctive therapy p. Gt. CS § monotherapy (europe and U. S. ) § paediatric adjunctive therapy 33

VIMPAT® IN EPILEPSY Successfull launch in AED market ! Vimpat® quarterly sales evolution in North America (US$ million) Vimpat® quarterly sales evolution in Europe (€ million) 34 UCB annual report 2011

VIMPAT® REVENUE Triple in 1 year ! 35

NEUPRO® 36

WHAT IS NEUPRO? 2 indications: Parkinson’s disease (4 million patients) Restless legs syndrom (52 million people) Available in 20 countries 37

HOW IT WORKS First and only transdermal patch for every stage of parkinson Reaching more than 73 000 patients 38

PARKINSON DISEASE MARKET Market size (2008) ≈ $ 2. 1 billion in 7 major markets % of more than 65 years old Demographic changes an ageing population U. E U. S Parkinson market : future major market without universal drug 39

RESTLESS LEGS SYNDROME MARKET Curent treatment: Ropinirol (dopamine agonist) Prevalence (2008)≈ 54 millions patients in 7 major markets Market size (2007)≈ $ 588 millions in 7 major markets 40 UCB annual report 2007

NEUPRO® REVENUE Regular increase 41

UCB’S OTHER PRODUCTS 42

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THE ONLY CELLTECH SMALL DRUGS KEPT BY UCB XYREM® FILED IN FIBROMYALGIA CHRONIC SYNDROME - characterised by widespread muscle pain, stiffness and tenderness at specific points - Around 14 millions people BUT on 17 th March 2011 - No prescription medicines approved yet for fibromyalgia in Europe REJECT OF TYPE II VARIATION BY E. M. A. 44 UCB annual report 2010

UCB’S PERSPECTIVES IN DRUG DEVELOPMENT 45

UCB’S PIPELINE IN CNS Targets severe diseases and unmet medical needs as Parkinson and epilepsy Several indications for a given drug and Search for different therapeutic protocols All are small molecule drugs or NCE 46 http: //www. ucb. com/rd/pipeline/new-development

UCB’S PIPELINE IN IMMUNOLOGY All are antibody-based drugs Diversity : arthritis, lupus erythematosus, fracture healing, osteoporosis Several indications for a given drug 47 http: //www. ucb. com/rd/pipeline/new-development

RESEARCH AND DEVELOPMENT : A LEADER IN CNS AND IMMUNOLOGY “To develop breakthrough medicines of the future” Research : two centres of excellence Braine-l'Alleud (Belgium): CNS disorders Slough (U. K. ): immunology (UCB's R&D headquarters) Development : Atlanta (U. S. , main development sites) Braine-l'Alleud (Belgium) Monheim (Germany), Research Triangle Park (U. S. ), Slough (U. K. ) Tokyo (Japan) 48 www. ucb. com

RESEARCH AND DEVELOPMENT AT UCB : A MAJOR STRENGTH “Research is the lifeblood of UCB's future and is vital to the organisation” More than 20% of revenue are invested in R&D every year. UCB’s major goals: ü a strong understanding of selected therapeutic areas and disease targets ü connecting chemistry and biology, to leverage the potential of these two disciplines ü discovery technologies to develop breakthrough medicines 49 www. ucb. com

AN EXPERTISE IN SLAM AND IN TARGETING SV 2 A PROTEIN 50

AN EXPERTISE IN SLAM AND IN TARGETING SV 2 A PROTEIN SLAM : « Selected Lymphocyte Antibody Method » In-licensed from Abgenix, then developed by UCB Expertise in ANTIBODY DISCOVERY SV 2 A : «Synaptic vesicle protein SV 2 A » Is targeted by the anti-epileptic drug levetiracetam A NEW CLASS of target proteins to cure NEUROLOGICAL DISORDERS 51 www. ucb. com; Tickel et al, JALA 2009

THE UCB SLAM TECHNOLOGY : PRIMARY B CELLS SELECTION B cells extracted from immunized animals B cells in culture ≈ 250 000 wells (5000 cells/w) 7500 positives 52 www. anl. gov/techtransfer (Argonne national laboratory); www. millipore. com; Tickel et al, JALA 2009

THE UCB SLAM TECHNOLOGY : SECONDARY ASSAYS AND SINGLE B CELL ISOLATION Secondary screening : affinity, functional activity, site of action, cross reactivity. Single B cell isolation 53 www. anl. gov/techtransfer (Argonne national laboratory); Tickel et al, JALA 2009

THE UCB SLAM TECHNOLOGY : CLONING OF AB’S VARIABLE REGION GENES DNA extraction from single B cell Cloning of Ab variable regions’ genes High-scale production of highly-specific antibodies 100 gene pairs cloned 1 Humanized V region selected as therapeutic 54 Tickel et al, JALA 2009; www. anl. gov/techtransfer (Argonne national laboratory)

ADVANTAGES OF THE SLAM TECHNOLOGY FOR UCB : A positive and dramatic effect on candidate antibodies’ selection : ü All extracted B cells are available for screening ü Automation / high-throughput : isolation of one specific B-cell out of more than a billion B-cells in a few week ü Produces antibodies with an extremely high affinity A fundamental tool for UCB : - All UCB's therapeutic antibodies and research reagents are generated using UCB’s SLAM technology 55 www. ucb. com

RESEARCH AND DEVELOPMENT : UNRAVEL THE ROLE OF SV 2 A PROTEIN ü SV 2 A protein is a pre-synaptic protein bound by Keppra® ü A unique mechanism of action (no mudulation of ion channels, neurotransmitter receptors or pathway enzymes) 56 Meir Bialer et al, Nature Reviews Drug Discovery 2010; www. ucb. com

UNRAVEL THE ROLE OF SV 2 A PROTEIN : POSSIBLE APPLICATIONS TO NEUROLOGICAL DISORDERS Active research programmes aimed at : Studying the function of SV 2 proteins Understanding the patho-physiological basis of epilepsy Refining the treatment of epilepsy and other neurological disorders involving abnormalities in neural excitability. 57 www. ucb. com

A WIDE RANGE OF PROPRIETARY TECHNOLOGIES TO MEET INNOVATION Hit discovery : Screen a small molecules’ library (MTS or HTS up to 106 compounds). UCB has a compound library covering a broad spectrum of targets, being continuously expanded. Gene-to-drug : Genetic mapping and extensive genomic sequencing allowed the identification of the mutation in the sclerostin gene responsible for sclerosteosic patients (high bone density) application in osteoporosis (collaboration with Amgen) 58 www. ucb. com

A WIDE RANGE OF PROPRIETARY TECHNOLOGIES TO MEET INNOVATION CADD or “Computer-assisted drug discovery” : Application of advanced modelling, simulation and data visualisation techniques for a structure-based drug design (virtual screening) A 2 Hit or “Antibody to Hit Technology » : Synergy between biologicals and small molecule research. Integration of advanced antibody technology, structural biology and computational chemistry to derive novel small molecules Genomics : Investment in genomic analysis technology including Affymetrix microarrays and Taq. Man® Real-Time Quantative PCR to indentify biomarkers. 59 www. ucb. com

UCB’S STRATEGY 60

UCB TRANSFORMATION : To become “the patient-centric global biopharma leader” UCB choose a clear long-term strategy Before 2004 films Pharmaceutical Chemicals UCB in 2004 UCB annual report 2010 Want to become a biopharma With………. 61

UCB TRANSFORMATION : SUMMARY OF UCB ACTIVITIES IN 2004 Keppra+Zyrtec =67% of revenue UCB had strong knowledge in CNS & allergy with Nootropil, Keppra and Zyrtec and want to be a leader …………. . Biopharmaceuticals drugs are more innovative ü complex molecules, ü expensive to manufacture, ü hard to manufacture for generic company In 2002 with € 1, 5 billion of revenue biopharmaceutical is promising sector 62 UCB annual report 2004

UCB TRANSFORMATION : HOW 1 st Because a big transformation need money… UCB sold all out-of area strategies 2004 Divestment of Surface specialities sector: Sale of film business € 320 millions Sale of speciality chemical business € 1. 415 millions € 1. 735 millions 2 nd 2006 Divestment of UCB-Bioproducts Peptide synthesis € 120 millions But UCB has no knowledge in biopharma… UCB annual report 2004 and 2006 63

UCB TRANSFORMATION : HOW UCB acquires Celltech in 2004 for $2. 7 billions financed by the sale of film - surface specialities Celltech is an English Biotechnology company created in 2000 ü Celltech. Chiroscience (leader in advanced antibody technologies) ü Medeva PLC: Small molecules company 64

UCB TRANSFORMATION : SCALE With celltech group…… 2 Therapeutic areas CNS Allergy/Respiratory 4 Therapeutic areas Allergy/ Oncology Respiratory Inflammation During 2005, global sales were increased by 11% and R&D were made strong (325 M in 2004 vs 511 M in 2005) But UCB needs quickly new drugs on the market……… 65

UCB TRANSFORMATION : SCALE BUILDING A NEW GENERATION BIOPHARMA LE ADER Leadership in antibodies technology and others ü ü Sareum for access to its Crystal Bank (protein targets) Crucell for its STAR monoclonal antibody production technology Biogen IDEC, to develop CDP 323 initially targeted at multiple sclerosis. Amgen to develop a novel molecule that helps to re-build bones affected by bone disorders, ü Ariadne Genomics’s Pathway Studio to support drug discovery ü Oxford Genome Sciences But that is not all……. 66 Schwarz Pharma annual report 2004

UCB TRANSFORMATION : SCALE LEAPING FORWARD UCB acquires Schwarz Pharma in 2006 for $4. 4 billions the largest in UCB's history Innovative R&D (enriching UCB pipeline) ü Two new molecules in development pipeline, bringing the total to eleven ü New fields, notably Parkinson's disease SHARE PRICE (€) 60 2006 was the best years for UCB share Price (51, 96 euro) 50 40 30 20 10 0 2003 2004 2005 2006 2007 2008 2009 2010 67

UCB STRATEGY : Execution Phase of significant investment for the future. Most important investments in R&D to build our new product pipeline (€ 788 million) With………. . News collaborations ü Bio. Wa's to develop of antibodydependant cellular cytotoxicity-enhanced antibodies, ü Zo. Bio to screen its discovery targets for ligands using its Target Immobilized NMR Screening technology Despite Zyrtec lost it patent in 2007 and Keppra in 2008 (47% of revenue) ` Three major products were developed, approved and launched: Cimzia®, Vimpat® and Neupro®. UCB also obtained approval for Keppra XR, Zyzal and Toviaz 68

UCB STRATEGY : Growing Continuing to make progress sales 3500 3000 2500 2000 sales 1500 1000 500 ü Realise the full commercial potential of new products Cimzia, Vimpat, Neupro 0 2004 2005 2006 2007 2008 2009 2010 R&D MILLIONS € 900 800 700 600 500 400 300 200 100 0 2003 2004 2005 2006 2007 2008 2009 2010 ü Accelerate growth and further investments in new product development 69

UCB STRATEGY : Other UCB’s deals To compensate generic erosion on mature products, UCB also sold some of his products or licensed some of its activities ü UCB'c over-the-counter business based in France, Benelux, Switzerland Greece, was acquired by Pierre Fabre ü UCB's operations in the Far-East, Middle-East, Latin America and Africa for Keppra, Zyrtec, Xyzall was acquired by GSK ü Registration and distribution rights of Cimzia in Brazil was acquired by Astra. Zeneca 70

UCB STRATEGY: 7 Operational strategies 71

UCB STRATEGY: In summary ü ü ü UCB chose to Work on unmet medical need areas Work for specific areas whitch markets are not very important Sell products or license part of its activity to earn money and to decrease expenses Make a deal to have the best expertise To be a major actor in innovation To behave like a start- up with a lot of strategic partners 72

UCB STRATEGY: In summary 5 phases to be a biopharma leader Intense growth Breakthrough Execution Scale Transformation Celltech 2004 2005 Bioproducts + Schwarz Pharma R&D Market Reorganization 2007 Life cycle manageme nt 2010 Launch a new therapies breakthrough innovation to patients with severe disease …and beyond 73

UCB IN 2011 74

UCB IN 2011 UCB has a highly-performing technology in antibody discovery Pipeline 9 products in development Among whitch 3 products subject to indications’ extensions 75

UCB IN 2011 Cimzia remains the most important product after Keppra Cimzia represents 9, 5% of UCB’s net sales 76

IS UCB’S STRATEGY WORTH FROM A FINANCIAL POINT OF VIEW? 77

UCB FINANCIAL ANALYSIS 78

RECORDED REVENUES 79

PROFIT 80

CASH FLOW SUMMARY 81

SALES AND INCOME 3500 3000 2500 2000 R&D _x 000 d_EXPANSE MILLIONS € sales 1500 net income 1000 500 0 2003 2004 2005 2006 2007 2008 2009 2010 82

STOCK : LAST 10 YEARS (2002 -2011) Stock increase from 2003 to 2007 : Correlation with pharmaceutical companies acquisitions (2004 : UCB becomes a pure biopharma) Zyrtec and Keppra sales (1 st and 2 nd blockbusters) Stock decrease from 2007: Loss of patent: Zyrtec (US ≠ in Europe 2004) and Keppra (US 2008 ≠ in Europe 2010) 83

2009 BALANCE SHEET : ASSETS 84

2009 BALANCE SHEET : LIABILITIES 85

2011 BALANCE SHEET (FIRST HALF) : ASSETS 86

2011 BALANCE SHEET (FIRST HALF) : LIABILITIES 87

2006 -2011 BALANCE SHEET ANALYSIS : ASSETS Non-current assets : Intangible assets : - 39 % (progressive decrease) Property, plant and equipment : - 24 % (progressive decrease) Financial and other assets : - 70% (similar since 2008) Current assets : Inventories : + 1, 6 % Receivables : - 13 % (similar since 2007) Cash : - 65 % (similar since 2007) 88

2006 -2011 BALANCE SHEET ANALYSIS : EQUITY AND LIABILITIES Equity : + 3, 9 % (similar) Non-current liabilities: Borrowings : - 98 % (sharp decrease in 2009) Bonds : : stable since 2009 (introduction in 2009 at 1673) Provisions : - 14 % (progressive decrease) Liabilities : - 39 % Current liabilities : Borrowings : - 96 % (sharp decrease since 2009) Liabilities : - 8, 8 % Provisions : + 42 % Income tax payables : - 48 % 89

FORECAST SALES - 2016 CIMZIA VIMPAT KEPPRA NEUPRO ZYRTEC 90

SWOT 91

SWOT ANALYSIS + Strenghts - Weaknesses Ø Market-leading AED franchise ØHigh generic drug exposure ØBiopharmaceutical business model ØNeupro withdrawal in the US Opportunities Threats ØSynergies from Schwarz acquisition Ø Generic erosion of Keppra ØPromising AED pipeline ØFuther regulatory failures for key growth drivers Cimzia and Vimpat 92

CONCLUSION 93

CONCLUSION UCB Made a risky decision in becoming a pure biopharmaceutical industry Is this strategy worth the shot? ü Biopharmacy needs lots of R&D expenses for low incidence deseases (partnership …) ü For the moment, benefices do not appear ü But a lot of hope in the futur: Good forecast sales in 2016 Did UCB have the choice? ü No, because of the Generics ü No, because UCB has always aspired to be leader in the discovery 94

THANK YOU FOR YOUR ATTENTION ANY QUESTION ? 95