UCB FY net halves, beating forecasts; sees major profit growth this yr UPDATE

UCB FY net halves, beating forecasts; sees major profit growth this yr UPDATE

	Published : Wed, 28 Feb 2007 10:32 By : Agencies Print this Story

(Updates with detail on possible FDA approval for Cimzia, other comment)

BRUSSELS (AFX) - Belgian pharmaceuticals group UCB SA posted a 50 pct drop in full year net profit, due to divestments and increased costs.

It said it expects profit to grow significantly in 2007 when Schwarz Pharma becomes fully integrated into the company.

Full year net came in at 367 mln eur, down from 755 mln last year. The figure exceeded analysts' expectations of 242-311 mln.

Sales totaled 2.523 bln eur, up from 2.341 bln, at the top end of analysts' forecasts of 2.20-2.53 bln.

REBIT (recurring earnings before interest and tax) were 475 mln eur, up from 437 mln last year. The figure went beyond analysts' expectations of 395-406 mln.

The company proposed a gross dividend of 0.90 eur, up 2.3 pct on last year.

UCB described 2006 as 'another landmark year', noting that it 'generated double-digit growth despite increasing investments in R&D and sales and marketing.'

Full-year results were driven by the performance of the group's epilepsy drug Keppra in the US and Europe. Net sales of the drug were up 36 pct on last year to 761 mln eur.

Sales for the allergy drug Zyrtec in the US increased by 12 pct to 273 mln eur.

The sales figures for UCB's other products, however, dropped by 9 pct to 722 mln eur, due to the group's divestment of its peptides manufacturing business and various trademarks.

The company's marketing and sales expenses increased by 12 pct to 733 mln eur, representing 33.5 pct of net sales -- mainly due to preparation for the launch of its Crohn's disease drug Cimzia later this year.

Research and development costs went up by 21 pct to 615 mln eur, representing 28 pct of net sales.

'The increase reflects substantial investments in clinical trials of Cimzia (...), in clinical programmes of Keppra successors and in promising early stage pipeline projects,' the group said.

UCB said Schwarz Pharma's financial accounts will be 'fully consolidated' into the group's books in 2007.

It expects net profit to go up, but warned of the impact of higher amortization charges and financial expenses in connection with the Schwarz acquisition.

UCB said it plans to focus on new product launches, cost improvements, research development and changing its product portfolio to specialist pharmaceuticals in the next two to three years.

'All the trees which are planted right now will start to bear fruit,' said

CEO Roch Doliveux in a conference call.

The group said it will meet with the US Food and Drug Administration to discuss approval for Cimzia in March, but would not reveal a specific date.

UCB said it will 'keep the market informed' about the outcome of the meeting before the end of March.

nina.chestney@thomson.com

nc/abr/nc/abr

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