Earnings Call: H2 2020

Feb 25, 2021

Thank you, Marie, very much. Hello. Hope you're doing well, safe and sound. Good day to you. Welcome to this call. On the next slide, you will find our disclaimer and safe harbor statement under which this call and the following Q&A session, as usual, is to be seen, and we kindly request that you read this carefully. On the next slide, you find the panel of today's presentation, and very soon I will hand over to Jean-Christophe Tellier, our CEO. We then have Emmanuel Caeymaex, our Executive Vice President for Immunology Solutions, who will talk to you about Cimzia, Evenity, and of course, bimekizumab. We have our Chief Medical Officer, Iris Löw-Friedrich, to introduce you to myasthenia gravis treatment options and give you the pipeline update. Followed by our CFO, Sandrine Dufour, who will give you the solid foundation enabling our future growth. We will finish with Jean-Christophe to give you the insights where we want to be in 2025. Thank you so much, Jean-Christophe. The floor is yours. Thank you very much, Antje. Good morning. Good afternoon, everyone. I hope you are all well, and a warm welcome from my side also to our 2020 full year results. 2020 has been, by many ways, an exceptional year, and a year which tested resilience, agility, and efficiency of teams and organization. In this context, I'm particularly happy to report strong results for UCB. As you can see in this slide, we delivered a seventh year in a row of growth as our revenue moved up 19% to reach EUR 5.3 billion. Our underlying profitability remained at EUR 1.4 million, which is a testimony on our ability to continue to invest in our pipeline and also to invest in our future launch product. Future products, which is illustrated here by bimekizumab, which has been filed with the FDA and EMA for psoriasis in time, as we have no delay from the pandemic. With this very solid and strong result from 2020, as you have seen, we are happy to share with you our outlook for 2021, where we will be able to deliver revenue between EUR 5.45 billion and EUR 5.65 billion, and an adjusted EBITDA from 27% and 28%. We didn't want to stop there, and we wanted also to give you the confidence that we have and share with you the confidence that we have in our future by sharing with you for the first time our outlook for 2025 and where we aim to be. For 2025, we will be pleased to get at least EUR 6 billion of revenue and improve our profits to low to mid-30s. If I can have the next slide, please. As I said in introduction, 2020 was a very particular year. You can argue that the pandemic was an accelerator for a lot of emerging trends, which was already there before, and not just a disruption. You see here four of them, which I think are maybe important to keep in mind. First, the pandemic has created a tremendous acceleration of digital transformation. Things that we thought was not possible before suddenly became a habit within days. It's also created even more uncertainty and volatility in our environment from an access, pricing, and demand management. But it's also, and you see that on the left side of the slide, you can see also that for me, it's critical, and it was a critical demonstration of the value of innovation. It was also a revelation of how important the sustainability and the societal impact is for our business. Next slide. With this in mind, I think that for us, like for everybody, it's even more important to be more connected to our sense of purpose. It is very clear that for us, creating more value for patients, meaning more differentiated clinical outcome, best experience, and access for the patients who need them, will even more ensure our success in the long term. So focusing on these elements were even more important in 2020. But focusing on purpose, it's also an objective and a way to stimulate everyone, energy, and engagements to what they are doing and contributing to our common goal and objectives. It's an opportunity for each of us to be even more at our best. So gaining efficiency through focus and being even more at our best by managing our sense-driven leadership was maybe two elements that I would like to take away also from 2020. Next slide, please. The final elements which I take away from 2020 is the necessity for all of us to integrate even more sustainability in our business approach. Because we cannot create value for patients if it is not connected for value for society. The four pillars of our sustainability engagements, focus on innovation, access, well-being of our people, and health for the planet, are fully integrated into everything we do in our patient value strategy. Next slide, please. So all of that help us to continue to deliver on our strategic growth path in 2020. You have seen this slide before. It's a slide that we are presenting to you every year, our strategic growth path. We are now in the accelerate and expand phase, and you have seen what we have been able to deliver so far on this accelerated growth phase. 2020 in this context, was a very important year as a year where we were able to demonstrate our ability to care, to grow, and to deliver. To care first, caring for our people, caring for our patients, ensuring continuity of care for them, caring for our communities, but also caring for science and making sure that we contribute to the science in this period of COVID-19, was an important element to remind us how valuable our industry is for society. Growth, because we were able to grow in that context for the seventh year in a row, and this was based on the solid performance of our core drivers. Deliver, because we continue to deliver on the pipeline, delivering the third phase III clinical trials on bimekizumab plus the phase IIIb against treatment of reference, was an illustration of this positive evolution of the pipeline. Deliver also on our strategic agenda with the acquisitions of Ra Pharmaceuticals, of Engage Therapeutics, the partnership with Ferring, the acquisitions of Handl Therapeutics, the partnership with Lacerta. All of these elements demonstrates our continued focus to make sure that we are delivering on our strategic agenda. Now I would invite you to go a little bit deeper in these elements, and I would like to hand over to Emmanuel. Thank you very much, Jean-Christophe, and greetings everyone. Over the next few minutes, I will briefly touch on how our immunology business is strengthening by touching on Cimzia's continued growth, on Evenity with the first full year of results, as well as bimekizumab and our launch readiness, as well as the progress in the clinical field. Starting with Cimzia, you can see that we achieved to grow our sales to $1.8 billion in 2020. That is a 7% growth at constant rates. All the regions contributed to the volume growth. The U.S. was the main driver for value growth, and it is noteworthy that in 2020, our at-home prefilled syringe formulation growth exceeded that of the in-office lyophilized formulation. The prefilled syringe business in the U.S. represents 37% of our worldwide sales, whereas the lyophilized formulation accounts for 28% of worldwide Cimzia sales in 2020. Now, the asset has grown particularly in fields where we have had recent label expansions or indications, and as you can see on the left panel of the slide here, psoriasis was an important growth contributor as well as the two spondyloarthropathies. Looking forward to 2021, I would say that with a strong exit in 2020, with those growth drivers being intact, I would see continued strong volume growth, and also anticipate further price pressure as a result of the availability of biosimilars, but also government-induced pricing measures that are likely to take place. I'm very proud about the agility that our teams have shown in 2020 in engaging in a meaningful way with our customers, and I believe that that is one of the reasons why Cimzia has continued to grow. Now, if we think about the TNF market, Cimzia has actually exceeded the growth of the TNF market very significantly in the U.S. and significantly in Japan, and has been able to continue to grow in Europe, even though the market has grown a little faster. If we now move to Evenity. Evenity has reached more than 100,000 people since it was first approved about a year and a half ago. 2020 was the first full year of launch, and in the context of the pandemic, which obviously impacts on the ability for this target demographic to visit physicians in the clinic, as well as our and our partners' ability to detail those physicians, it has been a very good result. In fact, we have achieved breakeven with Evenity in 2020. Evenity is now a net contributor. The asset is very well-differentiated, as you can see on the left panel, and it is very well-positioned now as the treatment to grow bone after a fracture in a person, women mostly, with severe osteoporosis. Based on that, and based on the fact that the asset has achieved more than EUR 400 million in market sales across our partnership with Amgen and their partner Astellas, we can look forward to the future with a lot of optimism. Europe contributed EUR 2 million in that EUR 400 million, arguably still small. But the feedback of payers has been very positive, and I would say also that the market share uptake in Germany is actually tracking the uptake we have had in the U.S. I believe that the main area of focus will need to be to actually grow this market, and that is why we have captured a fracture partnership with Oxford University, the IOF, as well Amgen. Our aim is to reduce the incidence of osteoporosis-related hip and vertebral fractures by 25% by 2025. In summary, the outlook is very promising for Evenity. When the pandemic restrictions will lift, I am sure that this will translate into re-acceleration. This will also be a good time to start focusing on addressing the silent epidemic, which osteoporosis and osteoporotic fractures are. Next, we will move to bimekizumab. We have been very pleased, in 2020, to be able to share the phase III results of bimekizumab in psoriasis. We know that patients prefer achieving completely clear skin, and that it is very important for that result to be maintained over time. As we have set it out in the last few years, we believe that the IL-17A and F inhibition is a mechanism with an elegant antibody that enables us to achieve truly unique outcomes. That is true for speed with a single dose achieving what is commonly regarded as a peak TNF efficacy. More than 75% of patients achieving PASI 75. The depth of response is very impressive with 6 out of 10 patients achieving PASI 100, completely clear skin at week 16, which is the typical duration for a primary endpoint. Very importantly, the ability to maintain this. On an intention-to-treat population, you can see, or you have seen, for example, in the BE SURE study, that 70% of patients achieved completely clear skin, so essentially expanding the number of people that benefit from that unique outcome between week 16 and week 56. What is remarkable is that that has been achieved at an every 4 weeks dose, but it also seems that the every 8 weeks dose is achieving similarly impressive results. That is very intriguing, not only as a differentiator in the IL-17 category, but also from a mode-of-action point of view. PASI 100 at week 16 and at one year are also the primary and the key secondary endpoint in the superiority head-to-head study, which we will report the results about with Cosentyx as an active comparator. This is hopefully going to be shared end of April at the American Academy of Dermatology. If we move beyond psoriasis on the next slide, you know that we have three phase III programs in different indications. It is important to explore those indications because many patients suffer from progression from one disease to another. Most well known from psoriasis to psoriatic arthritis, but also because of the considerable overlap between those conditions. For example, there seems to be a 10% overlap between HS and axial spondyloarthritis. The phase II-B data in PsA and in axial spondyloarthritis with bimekizumab were very impressive and have been published. Our proof-of-concept results, including Humira as an active comparator in HS, equally shows that bimekizumab has the potential to bring unique outcomes and a unique depth of response for HS patients. The PsA and the axial spondyloarthritis phase III results will start yielding results at the end of this year as per plan, and we are looking forward to updating you in due time towards the end of the year. If we move to the next slide, a few data points here to share the awareness and the high anticipation that exists for bimekizumab with dermatologists. With the scientific meetings and the publications, it has really become an asset that healthcare professionals are waiting for, and we were pleased to see that their understanding of the relevance of the dual inhibition of IL-17A and IL-17F is high. Our launch readiness is progressing very well. We have fully staffed our teams in sales, marketing, medical affairs, and access in Europe and in the U.S. Of course, with Cimzia, we have an opportunity to practice, and the discussions with the regulators, the payers, and reactive scientific engagements are going on with high intensity. We are very much looking forward to bring bimekizumab to patients with psoriasis, a transformational experience, and with this, we will have three growth drivers in our portfolio. With this, I would like to hand over to Iris. Yeah. Thank you very much, Emmanuel, and a very warm welcome to all of you. I will take you on a deep dive into generalized myasthenia gravis, gMG. As you all know, this is an autoimmune disorder that occurs in about 10 out of 100,000 people, and we all know that estimates vary quite widely. gMG can strike any person, any age, any social and ethnic background. It is clinically characterized by severe weakness in several muscle groups. Accordingly, there is typical symptoms: drooping eyelids, double vision, difficulties to speak, to swallow, to raise to a stand, to walk stairs, or to exert firm grips. This means that patients' quality of life is quite severely impacted, starting with the inability to perform activities of daily living like, for example, combing, preparing and chewing solid food, participating in a conversation. For many patients, it becomes almost impossible to concentrate and to fulfill the demands of a job. For some patients, even breathing can be difficult. The underlying biology of gMG is well understood. It is a deficient transmission of nerve impulses to muscles. The normal communication between the nerves and the muscles they control is interrupted at their natural interface, which we call the neuromuscular junction. In health, the nerves release a transmitter, acetylcholine, that binds to its receptors on the muscle. Thereby, acetylcholine activates the muscle and causes a contracture. In gMG, autoantibodies block signal transmission and alter or destroy the microarchitecture of the neuromuscular junction. This then prevents the muscle from contracting and causes the known weakness. Autoantibodies against the acetylcholine receptor, I will abbreviate this as AChR going forward, are the most frequent source of damage, and they occur in about 80% of gMG patients. However, other autoantibodies, like those against muscle-specific kinase, MuSK, also have harmful effects, and they occur in about 10% of patients. AChR autoantibodies are mainly of IgG1 and IgG3 isotype, and they have three different ways to attack. They can directly block individual acetylcholine receptors. They can lead to receptor internalization, and they activate the complement cascade. Activation of the complement cascade leads to the formation of the membrane attack complex, which destroys the postsynaptic membrane of the neuromuscular junction and thereby impacts muscle function. MuSK antibodies act similarly, but due to their IgG4 isotype, they do not affect the complement cascade. Next slide, please. In consequence, there are two potent and complementary novel ways to treat gMG. One pathway is the enhanced degradation of all autoantibodies via blockage of the neonatal Fc receptor, which leads to the reduction of AChR and MuSK antibodies. This is, of course, the mechanism of action of rozanolixizumab. The other approach, which is very specific for AChR autoantibody-mediated gMG, is through complement inhibition. This is the mechanism of action of zilucoplan, which blocks the terminal complement pathway very effectively. In UCB, we are very mindful that each patient is different and that each person living with gMG will need different medicines at different times in their lives. In the spirit of tailoring treatments to the disease biology for each individual patient, we have identified an emerging treatment algorithm for gMG, which could look like this. Initially, treatments are allocated based on a patient's dominant autoantibody. For the 80% of patients with AChR autoantibodies, treatment with a complement C5 inhibitor, zilucoplan, might address the root cause of their disease in the most effective way. This is where we see the place for zilucoplan in future treatment regimens. We aspire an efficacious and safe treatment for patients with AChR autoantibody positive gMG. zilucoplan in these patients would offer a maintenance therapy that will allow high quality of life, stable symptom control, and ideally also reduction of immunosuppressants and corticosteroids. zilucoplan is easy to administer with a quick, well-tolerated daily subcutaneous injection. It is truly suitable for lifetime therapy, we imagine. We believe that patients with moderate to severe disease should be able to access zilucoplan regardless of disease duration or treatment history. We are very conscious that zilucoplan might not work for each patient. There are three distinct patient groups who will need the elimination of their autoantibodies and therefore treatment with an FcRn blocker, rozanolixizumab. First, these are the people with MuSK antibodies. Still 10% of the gMG population, who due to their pathogenic autoantibody, will not benefit at all from complement inhibition. Then there are also the AChR antibody positive patients who may not respond to zilucoplan. Then there are those patients who experience an exacerbation of their disease while being treated with zilucoplan. For these three very distinct patient groups, the treatment with an FcRn inhibitor, rozanolixizumab, is an obvious solution. This is our vision for the future of gMG treatment, and it is very much in line with our commitment to develop individualized treatment approaches, connecting truly our scientific understanding with the patient. Our confirmatory studies with zilucoplan and rozanolixizumab are designed to address these options. The RAISE study, this is the confirmatory study with zilucoplan, is recruiting patients with moderate to severe gMG who are AChR antibody positive. These are patients who are recruited irrespective of their prior treatments. The study is placebo-controlled and offers daily treatment over 12 weeks, followed by an open-label extension study. In contrast, the phase III study with rozanolixizumab is recruiting patients with moderate to severe gMG. Those who are AChR antibody or MuSK antibody positive, those who are treatment refractory, and who are considered for IVIG or plasmapheresis treatment. The study is also placebo-controlled versus two different doses of rozanolixizumab. Of course, the study has a short treatment duration, six weeks, and is followed by an open-label extension study that supports further treatment cycles as necessary. Of course, our phase III results and our regulatory submissions and approvals are still to come. I wanted to share our vision with you. We expect the RAISE study with zilucoplan to read out in the end of this year, and we expect the phase III study with rozanolixizumab to read out in first quarter next year. If I could please have the next slide. This is our pipeline chart, and you are very familiar with it. I will stay for a moment on rozanolixizumab. You have heard about our commitment to rozanolixizumab. It stands firm. The mechanism of action is largely de-risked, and we have phase III programs in gMG and in immune thrombocytopenia underway. We also continue to focus our resources on those new patient populations where autoantibodies are clearly the underlying disease biology and where there is high unmet need. Following this paradigm, we are preparing the start of two additional clinical programs already in 2021 in new patient populations. Please stay tuned. In contrast, people living with CIDP, chronic inflammatory demyelinating polyneuropathy, are a heterogeneous patient population with very is only 80% of the autoantibodies. This is well-researched, well understood, and you will find publications there, for example, in Nature. While it's understood that the disease biology is complex, again, we are lacking the research to really identify the underlying root causes for CIDP. While our Phase IIa study in CIDP patients supports the conduct of a confirmatory clinical study, we decided to prioritize those conditions that are solely autoantibody mediated in underserved populations over CIDP. Now let's really take a quick look at the clinical stage pipeline in its entirety. We have commented on most of our assets already, and I will not go into any further details. However, I'm really pleased that I can confirm the timelines for all of our ongoing programs, which we shared with you last summer. These timelines stand solid and are still valid despite the still very palpable impact of the pandemic. Pandemic is really omnipresent and unpredictable, and I'm deeply grateful, and we owe this performance to the resilience of our patients, our investigator sites, and of our clinical teams, and also to our stringent digitalization. Again, we will deliver as we have promised last summer. With this, I'm pleased to hand over to Sandrine Dufour, our CFO. Over to you, Sandrine. Thank you, Iris. Good afternoon, everyone. It is my pleasure to present a solid performance for our 2020 financials. Our results reflect the continued growth of our product portfolio, the investment to support the rich development pipeline that Iris has just presented, and the preparations for launches. These three factors will enable future growth. What you see on this slide is how to position these 2020 financial results in a long-term trajectory. We can highlight a solid growth, both top line and bottom line, with 8% of revenue CAGR for the revenue over the last 7 years, and a faster double-digit EBITDA growth of 16%. A very solid foundation. On this trajectory, 2020 is the second year of the accelerate and expand phase. In the challenging context of the pandemic, it has shown a very resilient growth and profitability level. Moving to the next slide. What we show here is where the 7% constant rate net sales growth originates. Driven by the continued positive and resilient performance of the product portfolio. What you see on the left side is by therapeutic areas, and on the right side by product. Emmanuel has already commented on Cimzia and Evenity, let me share some highlights on our epilepsy portfolio. It represents more than half of our net sales, as you can see on the left side of the chart. The total net sales in epilepsy grew by 12% at constant rate. We now have 3 million patients using UCB epilepsy treatments, and UCB is ranked number 1 on the global epilepsy market, with a market share of 20%. I would like to highlight the 12% growth at constant rate for Vimpat, which is quite remarkable at this stage of the life cycle of the product. Also, another element to highlight is that since October last year, in Japan, UCB has been distributing directly Keppra, while before, it was co-promoted with our local partner, Otsuka. This is having a positive effect on sales in Japan for Keppra. In last comment in the epilepsy portfolio, you can see as well that Nayzilam was successfully launched and has reached EUR 26 million net sales in 2020. All in all, a solid growth of our core products. Next slide. We are moving to the financials, and let me take you through our P&L and how our revenues are flowing down to the earnings. Revenue growth is largely driven by the net sales progression that we have just seen. On the OpEx, at this stage of our strategy, the OpEx are growing faster than the revenues as we are supporting the launches, the pre-launches, and the R&D pipeline. Zooming on marketing and selling expenses. They increased by 10%, and this was driven by the launches and the pre-launch activity. Cimzia in non-radiographic axial spondyloarthritis in the U.S., launches in China, launches in Japan. Nayzilam, it was launched in December 2019 in the U.S., and Evenity was launched in Europe, in March. As well you have, as Emmanuel commented, the launch preparations for bimekizumab for the treatment of psoriasis. Also to note, in the context of the pandemics, we have accelerated our digital transformation, in the way we interact remotely with physicians in our targeted marketing approach, in our data and analytic capabilities, in our CRM tools. All this explains as well a part of the increase. Now, if I move to R&D expenses, they represent 29% of our revenues, and they have grown by 23%. That includes the impact of our new acquisition, the R&D development program for Ra Pharmaceuticals, Engage Therapeutics, and Handl Therapeutics. They also reflect the investments in the progress of our pipeline with five late-stage assets, also digital transformation, I just mentioned that, investments as well. Lastly, it includes the termination cost of the project at padsevonil. In the first half, remember, we had slightly lower R&D expense growth due to the recruitment pause. In the second half of 2020, we were able to progress on the recruitment of patients. We had new R&D programs, and we also put in place some measures for the patient safety, which were linked to the COVID-19 context. All in all, we end up with an adjusted EBITDA margin ratio of 27% at the top end of our guidance. It includes, as Emmanuel Caeymaex said, for the first time, the contribution of Evenity. As you know, it is only consolidated for the European sales on the top line, EUR 2 million. It supports our costs, it supports what we recharge to our partner, and also the part of the profit we get from our partners. The whole contribution has turned positive for the first time in 2020. Now if I move to the profit, here the evolution reflects the one-off expense of the M&A activity with Ra Pharmaceuticals and Engage Therapeutics acquisitions, but it also reflects a 13% tax rate in 2020. Our core EPS is at EUR 5.36 per share, and here it reflects the lower tax rate, but also the lower financial expenses. For that, on the one side, we had lower hedging costs, and we repaid bonds in March 2020. On the other hand, we had the interest expenses due to the debt financing of the Ra Pharmaceuticals acquisition. All in all, solid results, profitability, which reflects the higher investments we are making into the future growth of UCB. Now, if we move to the next slide. I would like to share with you how we articulate our capital allocation, supporting our strategic priorities, ensuring a sustainable return to our shareholders, and maintaining a strong and flexible balance sheet. Starting with the capital we allocate to our strategic priorities. First, as you know, we are investing in innovation for patients with a high level of R&D expenses. Second, we are also funding some growth initiatives and key transformation programs, digital transformation, production and manufacturing capabilities. On that, remember, we had announced EUR 300 million investments in the biotech plants. We also announced last October, the acquisition of a new research and development campus in the U.K., and this will explain the temporary increase of our CapEx. Last, our M&A and business development approach. The strategy is to sustain and complement growth in key strategic areas. We are more focused, as you have seen with the examples in 2020 with Ra Pharmaceuticals, Engage Therapeutics, and Handl. We are more focused on bolt-on transactions than on transformational deals. Second, our dividend distribution. Our cash flow generation has been solid, and it allows to offer a gradual increase of our dividend, which is consistent with the long-term growth prospects of the company. The board of directors will propose a dividend of EUR 1.27 per share to the next AGM. And just as a reminder, we have a share repurchase program in place to compensate for the dilution of our equity-based long-term incentives. Last point on our balance sheets. Despite the acquisitions done in 2020, we end up with a net debt to adjusted EBITDA ratio at a healthy level of one time, which is directionally where we want to be, and of course, without the temporary impact of potential acquisitions, which can take us above this level if we have the right investment opportunity. Now, moving to the next slide on our guidance in 2021. We have framed it in the global context of the pandemic, and of course, we will continue to closely monitor the impact it can have. So for 2021, we are guiding a revenue between EUR 5.45 billion, EUR 5.65 billion, which reflects the continued growth of our core products. There is a bit of an FX headwind, which is included in these numbers. As you can see on the right side of the slide, we confirm our estimated peak sales for the future sales of Cimzia, Vimpat, and Briviact. I can add that we should achieve the EUR 1.5 billion peak sales of Vimpat already this year. Adjusted EBITDA margin is estimated between 27% and 28% with an R&D expenses around 30%. Our EPS is estimated between EUR 5.6 and EUR 6.1 per share. It is built with an estimated tax rate around mid-teens. I would add that the second half of our financial costs in 2020 is more reflective of our expectations for the financial cost in 2021. So that is it for our 2021 guidance, and with that, let me hand over to Jean-Christophe. Thank you very much, Sandrine. To close the first part of this presentation, let me explain to you a little bit where we aim to be in 2025. You have seen the progress that we have made in our pipeline. You have seen the strong financial results that we are delivering this year. Sandrine has just shared with you the guidance and the outlook for 2021, which will represent an eighth year of continuous growth for the company. But we wanted to go further, and we wanted also to share with you the confidence that we have on our long-term and sustainable growth, and that is the reason why we would like to share with you where we want to be in 2025. So I think you will see that on the next slide. I think I mentioned that in the introduction, we are living in a transition period from an environment standpoint, and the pandemic, no doubt, will create a new environment moving forward. But I would like also to share with you that we are also transforming the company, and you see progress year after year of our growth strategy and the addition of the pipeline that we are putting together. So you see this transforming itself first by these new products, and these new products will create additional growth and will help us to, of course, overcome the loss of exclusivity that we will have in the coming years. But on top of new potential launches and new product in our portfolio, we are also investing into new platform and new technology. The partnership with Lacerta, the acquisitions of Handl Therapeutics earlier at the end of last year, demonstrated, illustrates this desire and this strategic objective to strengthen our capabilities in gene therapy. The third element on this slide is the digital transformations. I mentioned it as an accelerator because of COVID, and UCB is also transforming itself through this digital transformation. I just would like to illustrate this point with few concrete examples. The first is the partnership that you have seen that we have signed 2 days ago with Microsoft. This partnership is a follow-up of the first partnership that we had with them around the COVID Moonshot Initiative. This partnership for us is built on 4 key elements and pillars. First, it's the ability to accelerate the cycle of discovery, leveraging their ability and our scientists to try to accelerate the ability to detect earlier on and to fast-track the discovery of new candidates. Two, it's also with the aim in mind to accelerate clinical development. Three, it's making sure that we get a better understanding of human biology, and by doing so, create new insights on the causes of disease, and particularly the chronic disease we are particularly interested in. Finally, thanks to these partnerships, we aim to better understand the whole patient journey and discover more patient-related outcomes that can help to understand different phenotypes that can be translated into more precisions in the treatment that we will create. Microsoft is a partnership that we have started and continue in the future, but the digital transformation started a few years ago at UCB, and we are today already benefiting from some of that. I would like to illustrate that quickly with few examples. Iris Löw-Friedrich mentioned the digitalizations of our clinical development program. Roughly now 60% of our patients' visits are done remotely. By doing so, we increase, of course, the security, and we protect the clinical continuity of our trials as well as the patient safety. Two, because of COVID, of course, we had to move to a virtual contact with a lot of our stakeholders. In 2020, thanks to the digitalizations of this operating model, we have been able to compensate almost fully the lack of face-to-face meetings with our stakeholders. We have also been able, through predictive analytics, and Emmanuel Caeymaex mentioned that, to improve the efficiency of our go-to-market model by being much more precise and value-based on our activities. The last example that I can illustrate with you is our patient safety monitoring and processes, where, thanks to digitalizations, we have been able to reduce costs by 70% and increase speed of treatment of the cases. These are just few elements to illustrate that the digitalizations is already ongoing, and it is something that will accelerate in the future. Last but not least, we are able to do all of that because of our people. The ability to create an environment that allow our people to be at their best is a critical component of building a strong future for the company. Next slide. That is the reason why we are optimistic in our ability to lead in five patients population in the future. You can see here these different patients populations and the products that will help us to lead in these indications. You will not see any surprises here. We do feel that we are already leading, and we will continue to lead in epilepsy in the five years period. Thanks to the portfolio in immunoinflammation, we are confident that we will be able to lead with our differentiated assets and the complement that bimekizumab will create to Cimzia in the near future in psoriatic arthritis patients. You know that with Cimzia and the unique structure of the molecule, but also with Keppra and the experience that we have acquired with Keppra, we are on our way to lead for treating this disease for women of childbearing age. Iris mentioned the complementarity and the synergy in our portfolio in myasthenia gravis with zilucoplan and rozanolixizumab that will allow us to lead in this population. So our aim, our objective, is clearly to become leader, if not already there, for these patients population, thanks to the pipeline that we have and the product that we have in our hands. I forgot to mention Evenity. Emmanuel mentioned it. Evenity, with the unique ability to build bone after a fragility fracture, which is such an important medical need. Evenity is a unique product that can deliver that. Next slide, please. That is the reason why building on this ability to lead in these five patients populations, we are confident that we will be able to overcome the loss of exclusivity of a few products in the coming years and continue to growth. We will be able to reach at least EUR 6 billion of top line revenue by 2025, with the ambitions to continue to grow and to be able to be more profitable in the future and reach low to mid-30s EBITDA by the same period of time. You see here also our green strategy objective that we have already disclosed a few years ago for 2030 that are confirmed with this carbon neutrality by 2030, the reductions by 20% of water consumptions, and waste productions by 25%. So really a strong ambitions, a very good confidence in our pipeline moving forward and an ability to continue to grow and to provide sustainable growth for the company. It is the last slide, if I can move to the next slide. Based on our ability to really create value for patients, which is our sense of purpose. With that, I would like to thank you for your patience and would go back to Antje to open up the Q&A. Antje? Thank you very much. I am happy to start the Q&A session as of now. Please, if you have done so, very many, many questions. If I may, I start with Richard Foster from JP Morgan. He is asking how, on the midterm targets, could you give us an idea how you see the trajectory of margins developing through to 2025? I think this goes to Sandrine. Second question, this goes to Sandrine Dufour from Richard Foster, is how should we think about the other revenue line developing through 2021 and 2022 and beyond? He also has a question about CIDP. He says he is asking, "Oops. You mentioned that the rozanolixizumab phase II CIDP efficacy data would support a complementary trial in the 30% of CIDP patients you cite with detectable autoantibodies. How strong was the efficacy you saw with the rozanolixizumab combo, and was it similar to IVIG mono or substantially better? I think this goes to Iris. Perhaps Sandrine, you start? Yes. Thank you, Ansha. Thank you for the question. I will start by the question on the 2025 trajectory. What I would say is that we are committed to this long-term growth and improved profitability. I do not want to comment on the shape of that, but what I would say is that when we model that, we certainly take into account the dynamic of the sales, including the expected launches, including the loss of exclusivity, and I think that is what we can say now on that. On the second question, which was on the other revenue line, how we see this. It was a one-off, I would say, in our 2020 numbers. You should more look at the level of 2019, to get a sense of what we would expect this year. Yeah. Richard, thank you for the question on CIDP. I indicated that the phase II study would support going into confirmatory development. We still have, I believe, the last patient ongoing in the phase II study. As always, we will share the results at an upcoming congress. Of course, we have an independent data monitoring committee that continues to monitor patients' efficacy and safety, and that has assured us that rozanolixizumab has behaved as it should behave. The decision related to CIDP is a strategic decision. I want to reiterate that, because we have evaluated and we have discussed that before, the potential patient populations that are underserved and where we have autoantibodies as the sole or predominant reason for the disease biology. This is where we have identified in the strategic review, patient populations which are underserved, high unmet medical need, and where the disease biology is clear, namely related to autoantibodies. With CIDP, as I have mentioned, the picture is less clear. You have humoral and you have cellular immunology involved. There is not enough basic research and understanding. It is a heterogeneous patient population, and we see that heterogeneity also in our blinded phase II data. So we think that we can allocate our resources to more targeted therapeutic approach for those patients with clearly defined autoantibodies as the sole or primary underlying disease condition. That is the only driver for the decision to not continue in CIDP, but to move into new patient populations. We will update you in due time on these populations. Thank you very much, Iris. Next questions are coming from Laura Sutcliffe from UBS, and I think this goes to Emmanuel and Charl. What impact do you think anti-TNF reference pricing in Europe will have for UCB, and to what extent is this captured in your guidance? How do you see Cimzia's price evolving in major European markets over the coming 2 to 3 years? A question on Vimpat. Do you think consensus already adequately captures the erosion you expect for Vimpat? Perhaps, Emmanuel, you start. Yes. Thank you. So on reference pricing in Europe, it is not necessarily a mechanism that every country is using. I believe, Laura, you are referring to the jumbo group, in Germany, which has been moved forward by 6 months from October to April. So first, it is limited to anti-TNFs. Second, yes, we have included this in our guidance, and to give you a sense, it is costing us a point of growth on Cimzia global sales. I would not expect the erosion of prices in Europe to go much beyond that on an annual basis, given that this is the largest market and it is also a pretty significant move. The last point I would say is, as those things take place, it gives us an opportunity to reduce other rebates as well. So there are some compensating effects at play here as well. Was there another question about Cimzia? What do you expect in the European markets in the next 2 to 3 years? I think you answered this, so I think you can give it to Charl for the Vimpat question. Yeah. Thank you, Laura, for that question. I think just to reiterate how we have also given guidance in the past, our assumptions for the Vimpat LOE is that the U.S. erosion will be 80% in the first 12 months, and for the European markets, 50% in a period of two years. From all the assumptions we have today, we see that guidance remain firm, and that is what you would use as your modeling and guidance for your understanding of Vimpat LOE impact on UCB. Thank you very much. This also is preempting one of the questions I got from Trung Huynh, Credit Suisse. There is still left something. Sandrine, the 2022 guidance, how do you stand to your guidance of 31% for 2022 given earlier? He wants to talk a little bit about 2025 guidance. Is the EUR 6 billion revenue guidance probability adjusted or an aspirational guidance? On rozanolixizumab, he would like to know from Charl or Iris, I would say Iris, what are the other neurology indications you pursue for rozanolixizumab, and he is proposing two acronyms, NMO and ALS as a proposal. Sandrine, do you want to start with the two guidance questions? Yes. Can you hear me? Yes. So, on the first one, what I would say is that we are committed to the long-term growth and the improved profitability, and we are confident to achieve the low to mid-30% EBITDA margin by 2025. As for 2022, we will come back in one year with providing the detailed guidance, all the KPI one year from now. So that's really to frame how we want to project the guidance for the future. On your question on the 2025 one, the way it is, it's based on what we call our working scenario. So it's not probabilized. It reflects our best estimates of the future outcomes. Trang, thank you very much for your engagement and for your contribution to our strategic discussions. Much appreciated. You will understand that I reiterate that we will talk about the two additional patient populations with autoantibodies as underlying disease in the neurology space when the right moment comes, and I'm really looking forward at the right point in time to sharing more details with you. Thanks very much for your understanding. Thank you. The next question is from Jean-Jacques Lefebvre from Bryan, Garnier. Emmanuel, he likes to know, for Evenity, should we expect another difficult year in 2021, or do you see some encouraging signals since the beginning of this year? Second, how do you see the battle with argenx in myasthenia gravis, ITP, CIDP, since they are slightly ahead of UCB? Perhaps, Emmanuel, you start. Yes. Thank you, Antje, and thank you, Jean-Jacques. 2020 has been a pretty good year for Evenity. Of course, without the pandemic, our alliance would have achieved further growth, that is for sure. So it's probably too early to speak to 2021 in terms of the first month and a half. But I do think that for Europe, we will be in a situation with a full year in the markets where Evenity has been launched in the middle of the pandemic, and that is Germany, Sweden, Denmark, and a few markets like that. We will also have new markets joining with NICE reviewing Evenity in the first half of the year, and other markets to follow suit. So there's a lot of sources of growth there, and for out of Europe, I would just refer to the optimism from our Amgen partners, which they voiced at their results conference. Jean-Jacques, thank you for your question as well on argenx. First of all, I think just as Iris Löw-Friedrich had reiterated earlier, we have a very strong value proposition with our solutions. We have essentially two modes of actions with zilucoplan and rozanolixizumab, and it provides essentially two options of choices for physicians to treat myasthenia gravis on a continuum of care. Our scientific value proposition, our proposition of these two, we feel is very compelling to provide options, and to meet patients with the needs that they have. In a sense, where I would say the anti-FcRns will really be an important solution in patients who require IVIG treatment. Here, this is an EUR 11 billion plasmapheresis market, so we really should not compete with each other, but really look at the unmet needs in the sense where IVIG patients require a new solution, and we believe anti-FcRns can significantly improve the quality of life and the outcomes for patients in that space. Thank you. I have another question from Vimal Kapadia, Bernstein, and I think it, again, goes to you, Sandrine Dufour, about the guidance. He likes to have some more context on the 2025 guidance. In particular, what assumptions have been made on Cimzia biosimilars, success of rozanolixizumab in myasthenia gravis and ITP, and bimekizumab across the multiple indications. He also would like to know, perhaps, again, a reminder, Charl, on the patent expiration expected for Vimpat in the U.S. What speed of decline should we consider? From you, Emmanuel Caeymaex, he likes to have a little context on the assumptions for the bimekizumab launch in our 2021 guidance. What level of contribution could we expect from the product? How should we think about coverage for the product at launch? You want to start, Sandrine? Okay. Well, I'll start. I'll be quick because the intention is not to give detail on the underlying assumptions of the 25 guidance, but we have reflected as part of our plan, the key underlying assumptions, including pricing environments, and we feel confident with the number that we are aiming to achieve at least the EUR 6 billion. Antje, if we move to the question on ITP and rozanolixizumab, if that is the next question, then I would just reiterate that our- Yes, please. Thank you. As Iris Löw-Friedrich had mentioned, our commitment to rozanolixizumab remains unchanged. Our potential we see is unchanged. We see this asset as a EUR 1 billion-plus potential in peak sales with the indications. And in due course, as we progress, we will be able to disclose more specifically on ITP. I think the second question was related to more specificity on Vimpat LOE. So the date for the LOE is March 2022 in the U.S., and the expectation from all the historical modeling we see is 80% erosion in the first 12 months post-LOE for the U.S. market, specifically. To follow up on the question related to bimekizumab's contribution to our 2021 goals, I would say the first determinant is to actually gain approval. For newly launched assets, the time of approval is conditioning the sales in a given year to a very high extent. That is, of course, in the hand of the regulators. As mentioned earlier, we are expecting to enter the U.S. and certain European markets in the second half of this year. In terms of coverage and access, with the quality of the evidence that we have available, I would say that for most payers it's a relatively straightforward equation. Of course, in the U.S., we will enter a market which has existing contracts in place. What I can say is that there's a good level of eagerness with payers to make this new and differentiated asset available to their patients with moderate to severe psoriasis. Thank you. Yeah, thank you. Next question is from Richard Parkes from Exane. Iris, he likes to go back to the 30% of patients with an identified autoantibody. He thinks that there is a hypothesis of a higher portion of patients than that who might benefit from treatment. So he's trying to understand whether our decision reflects a lowered expectations of these percentage of patients that might benefit versus identifying those patients upfront, versus simply a case of seeing greater opportunities elsewhere. If you want to add something to the bimekizumab comment you just made, Emmanuel, he's asking, can you talk about expectations for bimekizumab market access when you launch? I presume you will initially be limited to the commercial channel. So can you talk about what we might expect for the pace of the launch, given the given need to negotiate access? Iris? Yeah. Thank you, Antje. Richard, thank you. I want to reiterate, this is a strategic decision that we have taken in the light of opportunities around patient populations with unmet need and a very crystal-clear described autoantibody pathology. You are aware that there are different autoantibodies. You even have autoantibody populations in CIDP which do not respond to IVIG. There's a lot of unknown around the cellular contribution, cellular immunity contribution to the pathology. There's other mechanisms that are at play. For us, in the light of this complexity, in the light of the very limited clear contribution of autoantibodies, we have taken a strategic decision to focus on those populations where our paradigm of high unmet medical need and autoantibodies as the clear disease pathology, is the most robust. So that's the explanation. We do not want to participate in basic research in CIDP at this stage. There's a lot of work that still needs to be done to understand the disease mechanisms, which are very broad and again, largely unknown. Thank you. Thank you, Iris. Emmanuel, anything you want to add? Yeah. On bimekizumab access, perhaps to say that in the U.S., the market is mostly a commercial market. The public portion is actually quite limited. We are very focused on commercial payers. It's a little too early to be able to describe in detail how that might look like. But of course, we're working very hard to make these assets available for those patients that need it the most. In Europe, we have a number of markets where access is actually available from approval date onwards. I would say Germany with pricing and reimbursement negotiations going on in parallel with commercial launch. Of course, we started early with other payers, like in the U.K., for example, so I would expect to derive sales and a fairly good access in these places as well. Thank you. Next question from Lenny, from KBC. Sandrine, he is chewing a little bit on our margin guidance and wonders, while we are maintaining a strong revenue outlook, it indicates higher than expected spending, and he's asking, "Does this signify increased cost of ongoing commercial roll-outs at clinical efforts, or does it reflect an increased willingness to invest into expansion? What I would say on the guidance is that one of the elements that we have mentioned is the expected level of R&D, which is around 30% in 2021, so it is a percentage point higher than 2020. That is one element which explains where we are. As we said, 2021 is the year of launching bimekizumab, and this is reflected as well in our marketing and sales expenditure. So that is the key underlying assumptions for the year. Okay. I am going to combine two questions, one from Charles Pitman and one from Rosie Turner, if you allow me. They want to know from you, Emmanuel, again, formulary access for bimekizumab. Do you think you will have a stepped access, meaning after having failed Cosentyx? Also, Charles wants to know if the Cimzia drop in rheumatoid arthritis, how he should think about the impact of generics, and can you expand a little bit on the mentioned government-induced price pressure expectations? Perhaps you talk a little bit about volume versus price impacts in Europe. Emmanuel. Yes. Thank you. So obviously, a lot of interest around the payer position with bimekizumab. You will understand it is really early to be able to comment here. What I would encourage you to do is to think about access as something that is dynamic with every 6 months, every year, negotiations and renegotiations. Also with the fact that, in 2023, the U.S. market will undergo profound change with Humira losing its exclusivity, which of course, will have a high impact on rebates, in the immunology field, which of course are an important factors that the PBMs are looking at. Could you just repeat the question on Cimzia, Antje, please? The decline of rheumatoid arthritis and the government-induced price reductions you were alluding to during your presentation. If you could elaborate a little bit more on that. Yeah. So the decline in RA is actually incremental. What we are seeing is that women of childbearing age suffering from RA are actually a fast increasing proportion of our rheumatoid arthritis patients. So you have a decline that is triggered by biosimilars and also the expansion of JAK inhibitors, although with the latest safety news that might abate a little bit. And that is almost fully compensated by the increasing market share of Cimzia in the women of childbearing age demographic. So I see this continuing and thereby I am not foreseeing an acceleration, a very significant acceleration of that decline. Then in terms of the pricing pressures, I think frankly, it is anybody's guess, right? What we do know is that governments will be looking for funds to finance COVID-19-related packages, as well as from a little closer to trying to limit debt. Therefore, we are expecting that over time in different geographies, there will be additional asks compared to what we already know. So it is baked in our guidance to the extent that those things are clear and confirmed. So I cannot give you more, it is hard to predict. But I do think that in a large market like immunology with the presence of biosimilars, clearly this will be one of the first places that payers will go at. Yeah. I am looking to the time. I take the liberty to call out the last three questions, if you allow me, and please, you know where to find us so that we can continue the conversation. Alex Kugad is asking, given your vision for the treatment of generalized myasthenia gravis patients, what kind of patient numbers do you expect to be markets for zilucoplan and rozanolixizumab? I think this goes to you, Charl, and to Iris, the question about the bepranemab situation, and a last question on taxes. Peter Welford from Jefferies is asking, Sandrine, can you explain the midterm tax trajectory and why it is now lower than before? Thank you very much. Charl, you like to start? Yeah, I can just Alex, thank you for your question. We will not disclose specific patient numbers at this point, but I would just again emphasize that what we know today from our insights on patients in myasthenia gravis is that at least 50% of patients are not well-controlled. So there is a significant market opportunity for the new entrants and the new solutions we are providing. So we feel very confident with the potential that we see in this market and for these patients. Alex, thank you for your question about bepranemab, which is our tau antibody, and you remember that our tau antibody was designed and developed based on human material. So we are targeting the central epitope, which is quite different from other tau antibodies. We have partnered bepranemab last summer, and that has given us the opportunity to merge our phase II aspirations into an Alzheimer's disease phase II study. What we want to do is, of course, provide proof of concept in a tauopathy, and tau plays a role in Alzheimer's disease. In the context of the partnership that represents a de-risked option and, of course, a great potential of running two phase II studies. We have settled together with our partner on one study to show proof of concept for bepranemab and our tau hypothesis in Alzheimer's. Then I take the question on tax. Angela, you still want me to answer on the tax rate? Yeah. Okay. So, maybe I can start just on 2020 before looking at the tax ratio going forward. On 2020, the effective tax rate, of 13.5% to be precise, was driven by one-off transactions, which increased the benefit of previously unused tax deductions. As you know, the company continues to benefit from tax incentives which are linked to innovation and R&D. If I look at the projection of the tax ratio, we forecast a ratio in the mid-teens going forward, driven by the tax incentives linked to innovation and R&D. Now, I would like to say that there is a large amount of unrecognized tax deductions, which are carried forward from prior years, and it is expected that the rates would temporarily drop in the near term future. Not for this year, probably not for next year, but beyond. Okay. Thank you very much. While not everybody was able to ask every question, I hope I was able to collect those, because, yeah, the main interest was around the guidance 2021 and 2025 as well as CIDP and as well as bimekizumab. So all on me. If you have open questions, please come back to us at the investor relation team. We are here for you and for all investors, we are looking forward to meet you on the virtual street in the coming weeks. Thank you very much all. Stay well and safe, and take care. Bye-bye.