UCB (UCBJF) posted first-half fiscal 2011 adjusted earnings of $2.02 per share, reflecting an increase of 29.8% from the year-ago earnings. Higher revenues and increased gross profit helped boost earnings.
Revenues
Half-yearly revenues increased 7.7% to $2,355.3 million, driven by strong sales of Cimzia, Vimpat, Neupro and Keppra.
While Cimzia (Crohn’s disease and rheumatoid arthritis) sales went up 72% in the first half of 2011, Vimpat (epilepsy) sales increased 76%. Neupro, which is marketed as a treatment for Parkinson’s disease and restless legs syndrome, posted a sales growth of 17% from the year-ago figure. Sales of Keppra, also for epilepsy treatment, increased 10%. A strong allergy season boosted the sales of allergy treatment drug Zyrtec by 11%.
The sales of all three drugs – Cimzia, Vimpat and Neupro – experienced the growth in sales riding on improved patient demand. Increased market penetration in the ex-US markets helped drive Keppra sales.
Other Details
In the first half of 2011, gross profit went up 5%, as a result of higher sales and reduced cost of sales. Operating expenses inched up a mere 1% during the reported period, following flat marketing & selling expenses, higher research & development expenses, almost offset by lower general & administrative expenses.
Investment in late-stage pipeline and the initiation of multiple development programs led to the hike in research & development expenses.
Forecast for 2011
UCB expects fiscal 2011 adjusted earnings per share to be at the upper end of the guided range of €1.60 to €1.70, on revenues of €3.1 billion.
The company anticipates fiscal 2011 results to be driven by the continued growth of Cimzia, Vimpat and Neupro.
Our View
We currently have a Zacks #1 Rank (short-term Strong Buy rating) on UCB. We expect UCB to continue posting strong results riding on Cimzia, Vimpat, Neupro and Keppra.
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