Earnings Call: H2 2014

Feb 27, 2015

Okay, may I suggest that we get started? Thank you for joining us, and good morning, and good afternoon for those of you who are joining from the U.S. It's a privilege and a pleasure to be with you today to present our full year results 2014. I am here with some of the executive committee members, and we will present to you these results based on, first of all, slide view on the environment and how we look at the environment right now. We will then focus on the presentations on the key results from our core products mainly. We will then move to the financial outcome and portfolio before conclusions and an opening to, of course, a Q&A. The first thing that maybe I would like to address, it's the environment. We all know that the environment is becoming more and more complex, integrated, and volatile by all many ways in a lot of very different geography. What we think is that despite all of these constraints, there are still room to deliver value for patients and through that, to deliver value for shareholders and for the company. Objective for us is to concentrate it on the patients and making sure that we better understand the reality of the disease, the diversity of expression of the disease in the therapeutic area we are focusing on in order to ensure better adaptations and better likelihood of success between our solution and certain patient population. For us, integrating the patient into our operating model from science and innovations to clinical development and commercialization is for us the best way to ensure higher value delivered for shareholders and for the company. This is what we would like to really continue to develop in order to ensure sustainable value. As you may remember, we have adapted our organizational model earlier this year. We have communicated about that earlier this year to ensure better alignment from our organizational model towards these patients' value organizations. You see here the four pillars around which we are creating this value for each of the patients, centered by the different disease and the different patient populations we want to focus on. Integrated more and more cross-functional teams around these different patients populations are, for us, the best way to ensure that we will be able to deliver more value in the future. By doing that, we still are, of course, a very focused organization. You can see here our top priorities and where we want to continue to focus on in terms of KPIs in the future. The first thing, of course, is the growth of our core products. We are very pleased with our solid growth that we have today with Cimzia, Vimpat, and Neupro, +24% you've seen in the deck in the press release. That give us a strong base to continue to grow in the future. Company-wide, the growth was +7% in revenue and +6% in concentrated net sales. We think that it is a strong base for us to build the future. The other milestone that we have reached this year, which is for us an important one, is the fact that with CVN, we have now more than 50% of the sales of the company based on these three products. And if you add Keppra, our key pillars also in epilepsy is almost 75%, actually it's 73% of the sales of the company based on this product. The other elements of which we want to concentrate on, of course, is to be able to advance our pipeline and to prepare the future. We were very pleased 2014 with the results of our phase III for brivaracetam in epilepsy. Very solid results. We have five as expected at the end of last year, and that's paved the way for future growth for UCB. This year, 2015, will be the year of the result of the phase III of Epratuzumab, as you all know, and next year will be Romosozumab. These three products are the next wave of our solution that will continue to drive differentiated products and innovative product for patients suffering from lupus, for osteoporosis, when we will get the results. And it's also another achievement of 2014. As you have seen, we are not only maturing our late-stage product as planned, we are also moving towards clinical solutions and future breakthrough that have been before in a pre-clinical phase. And if you have seen in the results, and Ismail will comment on that later on, we will have three products in phase II, which are a better way for us to continue to develop future value. The last but not least points, we are constantly evaluating our highest weight to have better impact. And we are focusing more and more our investments towards activities and fields where we can get the best possible impact. And of course, R&D is one of them, but even within R&D, we are constantly recharging ourselves in order to make sure that we are allocating our investments towards the assets and the products that can deliver the best possible solutions for the patients in the future. By doing that, we are able, on one hand, to have a stricter control of our costs and on the other hand, to continue to have higher investments in R&D, focusing on areas when we may have higher return. Doing that with, of course, a constant focus on compliance and on quality, as well as an ability to engage more patients, stakeholders, and our people within UCB. We think that we are evolving in a world which is more and more connected, more and more open, and it's important for us as a company to continue to connect and engage an active dialogue with all of the different stakeholders to be able to build and to strengthen the potential value for the patient in the future. So having said that, let's focus first on the core products, Cimzia, Vimpat, Neupro, and Keppra. As I said, you see here we have with these four products, we are reaching now 73% of our total sales. So let's start with Cimzia. Cimzia, you know, has been for a few years now a point of attention because first it was our first move into the biotech and big molecules environment. It's a very competitive environment, where we arrived as the fifth anti-TNF. We thought and we always have trust in our products to be sufficiently differentiated to find a way to develop a nice share in the environment. I think that you can see here the results of these years of work in the different geographies. Why we think these results are very positive? First, it's an acceleration of growth year after year. You can see here at the end of 2014, a nice acceleration of the sales. This acceleration is based first on the new indication that we have been able to get at the end of 2013, but it's also a recognition of the quality and the differentiation of the products as we are also growing in our classical or more classical indication such as rheumatoid arthritis. The second element is you can see here from a geographical standpoint that we are growing in all of the different geographies that we are present. We have a nice growth in the U.S., a very steady growth also in Europe. You can see also a positive growth in Japan where we are with Astellas as a partner. The second component is on top of the net sales. If you look at the in demand and the trending from a TRX or a patient share perspective, both in Europe and in the U.S., you see here two very positive elements. First one, once again is the nice trend from a TRX perspective or from a patient share perspective, and the second is an ability to continue to grow at least 3.5 times above the class, which is a very dynamic element. Last but not least, you know also that in the U.S. in particular, we are constantly looking at our ability to cover more and more life in a preferred or in a co-preferred situation. You see here the latest update from January 2015, and you can see here like it was for the previous year after year, despite pressure or challenge from the environment, we have been able to slightly increase our numbers of life covered in the U.S. in the two categories, preferred or non-preferred. The good news also from this last data point is the gain in the preferred situation. Let's move to Vimpat now. Vimpat, we are really also pleased with the results of Vimpat. It's a different environment. It's an environment where there are, let's say, a more conservative approach. It's always a little bit slow to gain new confidence in the different areas. You see here also a very good and solid growth both globally in Europe and in the U.S. If you compare what we have been able to achieve from a top-line standpoint in net sales as well as from prescriptions and the TRX prescriptions in the U.S. and in Europe, you see here also a nice evolution. In particular in the U.S., you see a beginning of an uplift in the last quarter of last year linked to the launch of the new indication. You know that we have the monotherapy for Vimpat in the U.S. since the third quarter, and we have launched in the fourth quarter of last year. You see here in TRX an uplift. If you remember that in epilepsy, when a patient is well-controlled, nobody is changing the treatment and the dynamic part of the patient population is very limited. Achieving such an uplift from a TRX perspective is really a very nice achievement and very promising for the future. We do not have the monotherapy in Europe. We are running the clinical trial right now. We will expect that in the future. But for now it's just U.S. You can see also that despite all of the different cost containment and pressure to continue to push generics in this area in terms of volume of prescriptions both in Europe and in U.S., despite some negative trends in Europe in particular, we have a very solid growth from an in-market and in-demand perspective. Neupro, on the other side, Neupro for our Parkinson's disease. Overall, the growth of Neupro has been positive. You will see the trend in TRX is also very positive. We had some negative impact of some return in North America that explain the trend in minus 3%. This minus 3% is more one of effects of one year linked to the return that we had, in the U.S. than a particular trend. You see the trends in the scripts are positive, less positive than for Vimpat because the demand is less important, but still positive. 7% growth in Europe, which is a very nice growth there. Here you see the very successful launch in Japan with our partner Otsuka. As I told you can see still positive trends in prescriptions both in Europe and in the U.S., around 8% in Europe, 6.5% in the U.S. So you can see here more a close trend Europe and U.S. That's also explained the fact that it was more sort of an environmental one-off issue that we had in the U.S. So very solid growth of our key core products, 24% growth. You can see almost EUR 1.5 billion sales combined. So that make us very confident to confirm our at least EUR 3.1 billion of sales for these three products before the end of the decade. Last product that I just would like to quickly update you with, Keppra. You can see the curve into Keppra, and you can see the classical trend from the different geographical perspective. The patents expired in the U.S. in 2008, in Europe in 2010. You can see the quick impact of this loss of exclusivity in the U.S. immediately in 2009, and then roughly kind of stabilizations quickly, while you see in Europe, a more longer impact of the loss of patent as of 2010, which is linked to the different pricing systems in each of the different country that make the slope of the curve slightly different in Europe versus the U.S. Anyway, you can see that in 2014, the decline of Keppra in the Europe has been less important than the prior year, and you can see nicely the two curve now getting closer together. On the other hand, we are still growing in Japan. Please take in consideration that the pattern of the sales in Japan are linked also to the order of our partner, which is a reason why sometimes you have some differences here. The launch of Keppra in Japan with our partner Otsuka has been very successful, and the in-demand trends are really very positive here. Last but not least, as you can see here, we have just got last week the positive results, and Keppra is now approved in the Japan in monotherapy, which is a very good news if you take in consideration the fact that there the product is protected until 2018. This is a summary of our core products and key messages from an overall performance standpoint. I would like now to hand over to Detlef that will go a little bit more into the detail of the top line growth and financial impact. Thank you. As you would imagine, if the products are doing well, everything else should be also not too disturbing. That is why we see a lot of green here. I do not go into the individual numbers, as we have already heard that for the top line. It is fair to say that while there was some cost increases, you might have expected a different composition of these cost increases. We heard about the launches of new indications, and usually your SG&A should go up, but it did not. It was moving down. R&D, you might have expected a bit less because you were not taking into consideration that now the early pipeline is expanding so quick. What I want to say is more or less reiterating what Jean-Christophe told you. We are managing very strictly towards impacts. We are managing very strictly in terms of long-term value. We are also taking the opportunity when things are going a bit better, or we make some deals that are helping us to manage the overall results, to invest into long-term value, which then you see in R&D expenses. In terms of the REBITDA, as you all know, it is in the middle of our guidance, so really nothing to report. We will go more into the details of it. On net profit, we will see also that there is tax elements and core EPS is high. So your first indication might be how taxes helped a lot. Let me just help you a bit on that. When I take the tax effect out of my core EPS, I am still on the high range of the guidance. So just to put that in perspective. This is an interesting one. We talked about the importance of being focused, and that has something to do with cost management, too. If you are focused both in terms of your product ranges, but also in terms of regions, that makes a lot of a difference, and we will continue. So please expect that we will continue also on both sides of this equation to take decisions on continuing or not continuing some of these topics. Kremers Urban, we might come later to, just have three, four words on that. We have seen the strong trend. We have overcome the needs to have Kremers Urban. We are not happy, as you can imagine, that this did not come to fruition. Nothing that could be done about. But the strategic situation has not changed. We are working through what needs to be worked through, and we will divest it. That is our plan. Moving into the P&L. As I mentioned, there is some more other revenue, and throughout the year, you have seen that we have been very successful, which I think talks to the quality of our pipeline to have deals done with other companies or institutions. These, due to the accounting standards that have changed, we have this famous IFRS 10 that you all learned about last year. This is now shown here in the other revenue, and we will not net it anymore against R&D. Also here, so keep that in mind when you make your comparisons against something that you have seen in the past. The second to say is the cost has been going up a bit with the dynamic that I've shown you, and there's nothing that is to be mentioned on top of that. When we go to the next line, the below the line items, one thing that is very clearly to see, and it's very difficult also to predict, is the restructuring expenses. You know that we are always working on getting the capabilities right to what we need to do in the future to drive the value. There, we have done quite a substantial shift this year, and it shows. On top of that, we have also in the line impairment, quite significant changes. You recall that we stopped the program with Biotie, Trepezikum. You'll see impact on the impairment charge. You see also an impact on the net financial expense line because the shares of Biotie have not been trading well, and as a shareholder, had to reflect that. The second thing that you see here on the financial expense is that due to the IFRS 10, for these profit financing companies that we don't own, but have now to be accounted for, that some of their financing vehicles are going in there. So probably EUR 30 million of the number is not even ours, and it's then taken out below the line, and that is the reason why you see different effects below the line, where you get something added back. This is more or less leading to what I think a nice profit movement, which is well within the guidance that we have given, and this is then also shown in terms of the nice development from last year and core EPS. So without the tax stuff, we would have been around 153, just to give you an idea. So from my point of view, a good year. We have seen top line doing what we wanted. We have seen validation of our strength in R&D by deals that help us to drive more forward. We see that the products in the late stage are advancing. We see that on top of that, the promise of bringing new products into the pipeline and more and more of these products being real breakthrough nature is giving us a very strong foundation for moving forward. The cash flow and with that, also the impact of CapEx is more or less as seen when you compare to last year. CapEx is significantly down. The investment in Switzerland has more or less come to an end. We did not have a lot of acquisitions disposal, so this was at bay. The net interest paid, I talked about the financial expense and the interest line in that, which is a bit lower than what it was last year, just due to the fact that the convertible has converted. Therefore, as you also have seen in our results, the net debt has dropped. Coming to the guidance. Based on these positive trends on the top line, we can further drive growth on the top line now towards EUR 3.55 billion to EUR 3.65 billion. This is mainly driven by the core products. We will achieve revenue TA of EUR 710 million to EUR 740 million. Keep in mind, as in an R&D investment that will be within the guided parameters of 29% plus minus 1% of revenues. This leads then, just calculated through to core EPS of EUR 1.90 to EUR 2.05. We are very committed and feel that we are on a very good track to reach the 30% EBITDA margin in 2018. Just to remind you, from 2013 to 2014, it is 1% increase. If you were to look into these numbers, in terms of percent of revenue, it is 2% for next year. If you just have in mind my words of acceleration towards the later years, I think you can follow my line of thinking. Yes, at the end of the day, with increase of profitability, also, the one-to-one on net debt to EBITDA will stick. This is something that is also our goal, because it will also increase our strategic flexibility, that at a certain moment in time, we might want to add to already a very strong internal growth potential. With that, I think if it works, I can let you go to the real interesting stuff, which is our upcoming products. Iris, please. Thank you for the introduction, Detlef. Good afternoon and good morning. Of course, I am very happy to update you on the patients with severe diseases whom we want to serve and the molecules that we are developing to do so. I will start with epilepsy and brivaracetam. Please keep in mind that despite the antiepileptic drugs that are available, roundabout 30% of patients with epilepsy still cannot be treated satisfactorily. So they still suffer from a severe impairment of their quality of life. We had an interesting conversation out there over lunch, that the spectrum of patients who are not well-controlled is a very large one, from patients who just have a few seizures left, to patients who still have chronic disease pipeline, to patients suffering with partial onset seizures. We have submitted a very robust package of data, including one of the largest studies ever done in epilepsy to the European Medicines Agency and to U.S. FDA, and both authorities have accepted our filing. So we're in an ongoing review process right now, which is exciting for us because it's an important step on our way to bringing brivaracetam to patients. We have shared the top-line results of our pivotal study with the public at last year's American Epilepsy Society meeting. I've brought with me the results, which again point to the robustness. We are measuring seizure frequency in patients, but you know that for the authorities, we have to analyze them in different ways. U.S. FDA is looking at the percent seizure reduction over placebo. The European Medicines Agency is looking at the percentage of patients who achieve at least a 50% reduction in seizure frequency. That's why you have two analyses based on the same set of data. You see that we have studied two dose regimens, 100 milligrams and 200 milligrams per day, and we see very solid, very consistent data. It's roundabout 22% seizure reduction over placebo, and we have about 38% of patients who have more than 50% seizure reduction. If you look at the comparison between the dose groups, you get already an idea that brivaracetam might be a very easy-to-use antiepileptic drug. There's no titration, and you could imagine you start with 100 milligrams, and most of the patients continue and do well on 100 milligrams. We have submitted also 200 milligrams, because what you see here is, of course, the overall population in the study, which were more than 800 patients. We have seen that individual patients benefited from going up to 200 milligrams. That's why we have submitted both dosing regimens. So very exciting. Very excited to bring this molecule forward to patients suffering from partial onset seizures. With that, I move to patients living with systemic lupus erythematosus and epratuzumab. When you think of patients living with lupus, I would encourage you to think, for example, about a young woman, 20 years old, who cannot leave home because she has a very severe liver affection due to her disease, and because she's suffering also from impairment of her cardiac function due to pericarditis. Or you could also think about a mother in her mid-40s, really in trouble taking care of her kids because she is so fatigued. She has severe joint pain, and she has a skin affection that prevents her from going out. The reason why I'm illustrating that is I really want you to keep in mind that patients with lupus are very diverse. There's no one patient with the same symptoms. That's important. That's important for patients because they have a long journey until they have their diagnosis, but that's also important for us as we are striving to develop drugs to treat the disease, because it's a very heterogeneous condition, and it's high risk to develop drugs in lupus. So please keep this in mind in the illustration by the patients we want to serve. I deeply believe, and you have heard this from me before, that we have done everything in our power to control the risk of lupus development in our epratuzumab program, but it's still there, and it's still very high, and please keep this in mind as we are approaching results this summer. I have talked to some of you before, and I think we are all excited to get to this point. But again, keep in mind, it is much needed therapeutic progress, but high risk during the development phase. That brings me forward to people living with osteoporosis and romosozumab. Please keep in mind, every woman is at risk of osteoporosis, and eventually, 1 in 3 women will suffer an osteoporotic fracture, and eventually, 1 in 5 men will suffer an osteoporotic fracture. I am looking around here, and some of us eventually will suffer from osteoporotic fracture. That will have a severe impact on our quality of life because it means surgery, it means hospitalization, particularly if it is a hip fracture. It means rehabilitation, and if osteoporotic fractures hit us at old age, then there is a high probability that we cannot recover to the full functionality that we had before. There is a high number of patients with osteoporosis who die from the consequences of the hip fracture. So it is a very serious disease affecting hundreds of millions of patients. Romosozumab holds the promise of a very novel approach to the treatment of osteoporosis. It is a bone-forming agent, and we have formed this hypothesis based on a human model in quotation marks. There are human beings who live with a deficiency of sclerostin, and they are known to have very strong bones, very high bone mass, high bone mineral density, and resistance to fractures. So these patients, they suffer from a disease called sclerosteosis. They do not have sclerostin. What we do with romosozumab, we bind sclerostin so that it cannot come to its natural target, mimicking a deficiency of sclerostin. The data that we have seen so far support that by that, we are building bone. I am sure you have all read the publication of our phase II study, which was run against placebo, but also against standard of care, like alendronate, a bisphosphonate, like teriparatide, also an anabolic principle. What we have seen in this phase II study based on bone mineral density is that we exceed the increase in bone mineral density with romosozumab by far, compared to what you can achieve with the comparator treatments. So superiority based on a surrogate variable of bone mineral density, and of course, that gives us high hope for the phase III studies in osteoporosis that are currently ongoing. We are running these together with our partner, Amgen. It is phase III studies in osteoporosis, and just to be clear, we started with a phase III program in women suffering from osteoporosis. We have added a program in men suffering from osteoporosis, and they are both progressing. We will see results from the phase III program in the first half of next year. So exciting times to come, and I hope that you share with me the excitement that we are approaching results phase for epratuzumab and romosozumab. With that, I thank you, and I hand over to Ismail for more excitement from the early-stage pipeline. Thank you. Thanks, Iris. It's my privilege to update you on the early to mid-stage pipeline. I'd like to do that by starting off and explaining to you clearly what the aim is of the early to mid-stage pipeline. What we want to do is deliver transformational molecules that can give sustained value to patients in the clinic relative to standard of care. We set this very high bar, and we do that intentionally because we believe we need to bring this value to patients. That will also create a growth perspective for the company where we have a steady state of molecules in phase III. The scaffolding that we use to do that is to focus on the right target, and we do that in collaboration with many external collaborations we set up. We are focusing specifically on genetically validated targets like you heard from Iris on romosozumab. We're looking in populations. We have a huge study with Weill Cornell in Qatar, where we're looking for specific genetic mutations, and then in this manner, identifying the right targets. After that, we make the right molecule, and at UCB, we have the capability to do small molecules, like you saw with Vimpat, and we have the capability to do large molecules, like you saw with Cimzia. The right indication is critical. What's the best indication for these targets, and where should these molecules go into? Of course, we're also trying to ensure that we get it to the right population, that the model of treating everybody with the same medicine that has the same symptomology is probably going to be redundant in the pharmaceutical industry. This is the key aim where we're driving the pipeline to. How do we do that? What's the strategy? We are committed to deliver innovative first-in-class molecules. That's a very high bar for us. As I'll show you, we have two points. I'll explain that later on. We increase the success rates and kill early because it's cheaper to do the experiments very early on. It doesn't cost as much. The expensive phase is the phase III development. We want to reduce attrition later on, but we are prepared to do the confirmatory experiments in men early on, so we fail early, and we fail cheaply, and we pick the winners, which we advance in the pipeline. Of course, if we're going to get innovative first-in-class molecules, we need to be able to have a source of this innovation, which is why we've expanded our super network and our open innovation model, where we have partners like Harvard University, Oxford University, Weill Cornell, and others. We continually, and in this year, added many more collaborations to do that. Enhance scientific excellence. We've recruited the best scientists. We continue to do that. You heard from Detlef that we continue to assess the capabilities of our people, and we ensure we continue to bring in the talent so we can deliver on this very high bar. Of course, we want to be efficient, which is part of the efficiency is failing early, failing cheaply, but it's also making sure that every EUR we invest in our programs is well spent. And then sixthly, and importantly, is strategic asset partnering. This is both to increase our bandwidth to be able to do more, but also a validation that what we're seeing in-house and our scientific advisory boards are advising is being valued by others. They're prepared to sign the check. You read earlier this year about our Sanofi deal. You read about our deal with Neuropore, and clearly, we also have now the opt-in from Biogen Idec on the CD40 ligand program. So lots of partnerships to drive the pipeline. Before I go on and show you the pipeline, I want to emphasize that when we go into development, we're in the learn phase of development. This is up to proof of concept in men. So we have a hypothesis, we have pre-clinical data. We often have experiments. We're wanting to focus on targets where the genetics has shown us and done the experiment in men. We then take those molecules, and we have very gated steps. Is the molecule good enough? Does it do what it does in an efficacy model? We measure PoC light. Does it give us an early indication that it's going to work? Like you'll hear about the CD40 ligand program, where we actually went in a phase I-B study into patients, and we look for an efficacy signal. And then finally, we go into proof of concept in men, where we modulate the registerable endpoint, and that's when the molecule's going to pivotal development. So important to remember, when we go through the two major gating steps, the candidate approval, which means that we have this and we have experimental evidence in animals that this molecule works. And then finally, the proof of concept in men where we modulate the registerable endpoint. And we call between the first and the second step, the learn phase of clinical development. And then we move into the confirmed phase. So now our pipeline, as you heard from JC, we will have by the end of this year, three molecules in phase II. That's not happened at UCB, in several decades. The first molecule, which we'd promised you results previously last year when we explained to you, we promised you that we will have the results of the CD40 ligand program announced at this meeting. That was because we would have those results second half of 2014. I'm happy to say that the SL 14 study, which is a phase I-B study in lupus patients, read out. The molecule was very well tolerated. That's important because you remember that previously there were CD40 ligands in the clinic, but these were stopped because of thromboembolic events. We were able to engineer out these thromboembolic events and show that the molecule is safe and well tolerated. Additionally, we got very promising results in our in-patients, where we had some early efficacy readouts. And on the basis of that, Biogen Idec, that had an opt-in option to opt in on the basis of these results, exercised their opt-in seven months before time, because they, in fact, had the opt-in option till July 2015. We then have two other programs, the IL-17A and F. Now, you've read a lot about the IL-17. The ones you've read about are IL-17A. Our antibody antagonizes both IL-17A and IL-17F. And the important thing is that IL-17F is the most abundantly expressed cytokine in the joints of rheumatoid arthritis patients. So if we look at the synovial fluid, we find extremely high levels of IL-17F. In the learn phase, we are testing the hypothesis, does this bring significant value to patients? If it does not, we will not advance the molecule. If it does, we will continue the molecule. The PPSI is a pre- and post-synaptic inhibitor, also about to start phase II in 2015. This molecule actually has dual activity before the synapse and at the end of the synapse. We will test this in refractory epilepsy patients. Like CD40 ligand, it is a novel target that, as far as we know, nobody else is working on. In fact, the chemistry is very hard to recapitulate getting that molecule to hit both targets. The PI3 kinase delta inhibitor is the most specific oral anti-PI3 kinase delta. So it is very specific for the delta isoform. In fact, you have heard of PI3 kinase mainly applied in oncology. This one is going to be used, and it has to be exquisitely clean from a safety profile to be able to be used in this population. Then finally, and we are not announcing the mechanism, but this is a novel mechanism, molecule UCB7665, which advanced into phase I of development. So very good year. You can see the early and mid-stage pipeline maturing very nicely. Concentration of novel targets, and in some instances, when we are working on other target, we have a novel hypothesis to test whether we will bring significant differentiation and value to patients. With that, I would hand over to JC to finish off. Thank you, Ismail. This is the summary of our 2014. We see 2014 as a good year with very solid results. A good growth that passed the way to even further more growth in the future to deliver more value for patients and for shareholders. If you look at the key components of this growth, first and foremost is the accelerations of the growth of the overall company, +7% in revenue, +6% in net sales. A good acceleration versus last year, based mainly on our core product that reached now the threshold of 50% of our sales with CVN. Secondly, we have a nice maturation of our portfolio, late stage first, with positive results on brivaracetam. We will have this year epratuzumab and next year romosozumab as planned, as Iris has shared with you the data. Thirdly, the potential breakthrough that have passed the first decision point. You have seen with Ismail the results. We are very pleased because that was a phase that we were a little bit weak at the beginning of the clinical phase. You can see now that our pipeline are more balanced between the different phases, still focusing on our two therapeutic areas and delivering potential breakthrough or very differentiated potential products and solution for patients. We are able to do that because we constantly and strictly focus our investments where we can see highest impact for the future and for the patients. This is 2014 in a nutshell, and I would like now to invite my colleagues to join me in the chairs and open the Q&A. Ladies and gentlemen, please get ready to ask your questions. Please press 01 on your telephone keypad if you wish to ask a question. Okay. Here on stage you of course have the presenters, and I would like to introduce Emmanuel Caeymaex, who we've recently take a new position. You remember I showed the new organizations we have within our patients value units. One around immunology that will be led by, is led now since February 1st by Emmanuel, who will join me also. Try another one. Try another one. All right. This one. First one for Jeff, I have one on the gross margin. If you look at that next rule, you see benefits from bringing the manufacturing in-house. The second one was related to Vimpat. You've seen a nice uptick in terms of the prescription trajectory following the first-line approval. I'm just wondering what initial experience has been with reimbursement in that setting. It doesn't look like it's been an issue, but just wondering what experience is. Then third question was on, Iris, on romosozumab. I'm just wondering what's been designed into the phase III studies in terms of any futility or efficacy interim analyses, and have you been through any of those yet? I start with gross margin. When we look into the gross margin, there are a number of effects in there. You have seen that we have an over proportional decrease in some of the mature products, but also still a sizable decrease in Keppra on the gross margin that is playing a role. This has partly been compensated already by the new product. I expect that this continues and turns around to a higher gross margin over the next year. It will be accelerated very likely starting from 2016, but for sure 2017, when our site in Switzerland, in Bulle, comes into place for Cimzia, and then we have some of the benefits, both on the gross margin, but also going forward on the tax, from this investment. I can continue with your question on romosozumab. There has been no interim analysis of utility analysis built into the phase III program. We go through to the very end, which is completion of 2 years in every patient. The confidence for going without an interim analysis is built on the phase II data that we have seen, that were very robust, very convincing, and on the fact that the general design of trials in osteoporosis is well established. There is also a factor that these trials are very large. You are aware that the whole program includes more than 17,000 patients. Every interim analysis would eat up some of our statistical power, would require additional patients. If you take all of this together, we have taken a decision to not include any interim or futility analysis. What can you remind us of the second question? Yeah, the last one was just on the impact in the frontline setting. What our experience has been with reimbursement, whether there has been any response. What I have heard, it does not look like there has been any impact there. Well, you can see, you saw the difference, if you look at the Vimpat in the U.S., for example, versus what you see in the underlying trend in TRX, you see some type of differences there. There is an element of the channel mix that explaining that. But nothing that goes above what was really what you can expect in these type of changes of environment in the U.S. The fourth quarter has been relatively positive on that extent at the beginning of the trending in TRX is very positive also. Vimpat, we see some pressure on pricing everywhere in Europe and U.S. The underlying trend is still very positive. Okay, thank you. Yeah. Thanks. Pete, Citi. Three questions. JC, when we look at Neupro, we have seen the impact from generic pressure and reimbursement take its toll. When we think about Cimzia going forward and biosimilar TNFs in both the U.S. and Europe, why is it going to be different for Cimzia? That is question number one. Then for Iris on Briva, it seems that the data is stronger than you are expecting. So in terms of, I think the previous guidance on peak sales of Briva was around EUR 200 million to EUR 300 million. Is the clinical profile strong enough for you to update us on that? Then Ismael, lastly, on IL-17, Novartis are out there aggressively talking up expectations for IL-17. You have got a number of other big boys, so to say, in phase III development. Depending on how strong the signal is, would UCB be willing to pursue phase III development on its own or would you be looking for a partner? Thank you. I may start, and Emmanuel, I may ask you to build on the first question. We do see, as you have mentioned, continuous pressure from the environment. The solution for us and the answer to these additional pressures is to continue to provide either new indications and differentiated indication. It is true for Vimpat. We have the monotherapy, and you have seen the impact of adding a new indication such as monotherapy through the trends of Vimpat. We have also new geographies that are always a little bit after the classical one. We had very positive results for Vimpat, for example, in China and Japan that have been able for us to find a new partner for Vimpat in Japan in the future that may help. Maybe for the Cimzia and biosimilar, Emmanuel, if you want to comment on that. Yes certainly, and thank you for your question. You may know that we have a head-to-head study running against Humira. It is a two-year study, results 2016, and we also recently started a study comparing Cimzia with Enbrel in psoriasis through our partner, Dermira. The reason why those studies have been started is because we believe that all those anti-TNFs don't produce the same results in those populations and in a biosimilar environment, let's not forget that Cimzia has exclusivity until 2024. There is going to be an interest to see whether those products are actually equivalent to each other or not. In addition, there is the whole question of whether the competing set of biosimilars will be interchangeable with the originals. I think that this will take a bit of time, maybe even a long time. This market therefore is quite different from the Parkinson's or the epilepsy market, which you referred, where small molecules can be interchanged freely. For all those reasons, we believe that the guidance that has been given is still very much within what we will be able to achieve. On the brivaracetam data, yes these are strong and robust data, particularly in the light of the population that was included in the trial. More than 80% of patients had tried two anti-epileptic drugs before and were not successful. Round about 50% of patients had tried five or more anti-epileptic drugs before and were not successful, and all of them were on two concomitant anti-epileptic drugs. So very strong results in a patient population that per ILAE guideline, International League Against Epilepsy, would be classified as treatment-resistant. Having said that, it is not a good time to talk about guidance, and it is not a good time to talk about any changes of guidance. You know that, and you will forgive me. The third question. Just to remind you, when we started our program, Novartis had data which actually looked disappointing on the joint and good on the skin, right? So that was the hypothesis that does the app bring extra value. What has moved since then is their very exciting phase III data, which didn't replicate their phase II data. So we are moving forward in two programs, one which we have talked about, which is the psoriatic arthritis. The other one we don't want to disclose right now, but we do believe has an angle where we may have some unique value proposition for patients, and we are testing that in a clinic as well. But clearly, with all of these things, as I said, strategic asset partnering is one of our core pillars, and we are always open to partnering or talking to partners about possibly partnering. At this point, we haven't made a firm decision either way, and it's still updated. Hi. Three questions continuing the trend. Firstly, on Cimzia in the U.S., I was wondering if you could perhaps give us at least an indication what proportion of the sales are in the new indications, the ankylosing spondylitis and the psoriatic arthritis. Secondly, brivaracetam. Is there a potential here to get or seek to get tiering payer benefits together with Vimpat? We've seen in the U.S. some companies with a sort of portfolio have benefited. Is that possible with Briva as well as Vimpat, or is the epilepsy market where that will be challenging? Thirdly, just a depth on R&D. Do you think you've got a big picture how you manage this? This, I guess, comes back to the IL-17 question. Is this a number that's given you confidence in the 30% EBITDA margin target? Do decisions have to be made based on here, the buffer you've been given, or how flexible are you willing to be, I guess, given the long-term value opportunity UCB could get, given the program's development? Well, as it's such a nice question, I start. I hope we have given you the answer already in the last years. We have been always flexible in terms of looking long-term value, and we have managed to still deliver on the promises. So long-term value always has to come first. I would prefer to come back to you and have to explain something when I really believe there is something outstanding that you will be excited and understand. All of that has certain borders. Up to now, we have been, I think, very successful in managing that we are getting the peaks out and getting the real value drivers kept in our portfolios as long as we can do it ourselves. It's not only money, it's also capabilities, the opportunity to drive something in parallel. So it's a very complex one. But if you ask me in principles, value always comes first. Then you look into how can you bring the value best to the topics, then you end up also with the R&D investment. But there is one thing that is crystal clear, that R&D investment can only be maintained when you are really driving the value. What we have heard from Ismail is also very clear, what we heard from Iris as well, from Christophe and Emmanuel, the value proposition is changing. It's a much tougher job to get there. Therefore, you can expect that we are also very restrictive with our money that is put in. Then you want to take the other one? Yes, I'll take the Cimzia question. So good question around the new indications and what they represent today. Let me perhaps start answering this question by highlighting the fact that in the U.S., about half of the market for biologics, or let's say TNF is in rheumatoid arthritis. If you add up PSA and ankylosing spondylitis use, you have about 20%. So 20 and 50 is 40%. Now, if we look at the shares that Cimzia have obtained exiting 2014 in the last quarter, then just looking at TRX and ignoring or using in-office administration with the life formulation, we're slightly above 4%, I believe, in RA. In AS and PSA, we're already above 2%. So in less than a year, we've already accomplished half the way that we accomplished in RA since 2009. So I think this bodes really well. Now, in the U.S., Cimzia is also indicated for Crohn's disease, which is about 40% of our sales there. So as a total percentage, the new indication is still small because we have CD and because RA is much bigger. But I think that going forward, this is going to increase because the start has been really good. In Europe, it's a little different in the sense that axial spondyloarthritis plus PSA is a slightly higher proportion of the market, and certainly compared to RA than it is in the U.S. So here, the challenge is how quickly do you get access and reimbursement. So far, this really has been very quick. Within a few quarters, we will have all the major markets covered in Europe. Thank you, Emmanuel. Just to maybe build on that, as maybe I've mentioned earlier, the new indications have also a positive effect on our dynamism in the rheumatoid arthritis indication. It's not only that you get growth because you get the new indications, it's also that provide you additional legitimacy in the marketplace. You get also some kind of benefits on the classical indications now that we have the broader spectrum of indication. Now on the brivaracetam versus Vimpat, if you allow me, it's a little bit too early to talk about the pricing strategy in the U.S. Let's make sure that first we will get the indication. My just comment would be about the dynamism and the cycle of epilepsy. Please keep in mind that the epileptic market is not only a stable market, let's say it's an area where people take time to get new solution in their habit of prescription. They used to start with the very severe patients. Try to test the molecule. Even if you get the first add-on of the add-on therapy as an indication, very often in the beginning it's not that much the first add-on, but the third or the seventh or the third add-on that you start. Little by little you get confidence in the product, so you get closer to the first add-on. Then if you get the data, you get to the monotherapy. I think that our portfolio in epilepsy has a very good maturity with Keppra XR enhanced, Vimpat moving to monotherapy, and Briva that will come as a cycle of maturity of the marketplace, which is very good. From a mechanism of action standpoint, it's different mechanism from Vimpat, so the two are well compatible. But we will talk about the strategy of pricing when we'll be maybe closer to the launch. Jo Walton, Credit Suisse. A couple on Cimzia and a couple of financials. On Cimzia, you've shown us that you've had quite a big uplift in the number of patients where you're the preferred player. What should we think about the price concession that you might have had to have given to get to that third indication? Should we expect to see effectively a bigger discount between the gross sales that we see in IMS and your reported sales because of that? I'm particularly interested because we hear a lot from the payers saying that the next category that they'd like to go to look at are the specialty drugs. Really, the RA market seems to be an obvious area where some doctors are less bothered about which drug that they are told to give in a first-line setting. So that's on the U.S. side. In Europe, have you seen any impact of the very early generic Remicade making payers or governments say, "Look, I can get something cheaper here. Can I have another discount from you as you're in the same vague area?" On the finance side, I wonder if you could just give us a couple of bits of information of more assumptions behind the guidance that you've given us. Firstly, what sort of exchange rate you've set your plan at, because we note from last year that there may not have been much sensitivity at the top line, only 1%, but there was a very big sensitivity to exchange rates at the earnings level. Also what the tax rate is that we should use in our numbers for 2015. Thank you. I start with that again? Yeah, that is a difficult question with the tax numbers, because I do not have a good answer to it. If I will know how all the different tax dealings that are ongoing will come out, and if I will know the statutes of limitations that are running out before there's action, and if all the tax structuring that we are doing, what impact this would have, then I could give you probably a better number. But I just don't know it. So that is the reason why I always come back to trying to help you with the modeling, which just tells you going with the high twenties in your model is the best way. The second why I think the tax number that you see in the results is less relevant for you because this number has nothing to do with the underlying cash outlay. When you take this here, it looks like it is very little, but the cash outlay on taxes is very high. A very opposite number. If you would be just going with these type of numbers, you really would run wrong. Coming to that, we are always going with a middle of the line approach and taking this into consideration and having the positives and negatives that we are then mixing to each other. Therefore, just following I think the financial expense is very visible for you. In the meantime, there is not too much more than less as tax. I think that can be calculated reasonably well. But whether it will end up at that level, yes or no, we will have to see. That is the tax one. In terms of FX, this is much easier. Why do you see more swings on the profit numbers? Because the numbers are very small. EUR 10 million on EUR 100 million is making a lot more difference than EUR 10 million on EUR 3 billion. These swings will happen in proportion. They are normal. But just follow the guidance in that regard, that we are hedging nearly 100% of the transactional volumes for all the different currencies. We have taken some precaution in some very uncertain situations like, for example, Russia with the ruble. I would not expect that you would see a negative surprise on these if the world is not breaking down. I can qualify it this way. Fabien, you want to take it? Let me start with the question on the infliximab by Pfizer in Europe so far. First point to note is that infliximab doesn't have a very high market share in the rheumatology indications anymore, and in fact, it is going down. That is one. Second, it is an infused product. It is an IV product. In those markets where, let's say in developed markets, in Western markets where cost of labor, et cetera, is high, there is a clear compartment for IV products and a compartment for subject products. If you add those two things together, the impact on our business have been minimal. Infliximab, of course, is a bigger product in Crohn's disease. But since we don't have the Crohn's disease in Europe, it doesn't really bite. Then the other question was related to- US. Oh, yes. U.S. sales. Right. Yes. Look, we're not pulling back from the market, right? The discounts are not going to diminish, right? At the same time, we have a prefilled syringe. We have an in-office administration formulation. We're trying to strike this right balance between growing our share and making sure that it is sustainable, that we maintain competitive profitability. Nathan? I think you're right. We have never used aggressive pricing strategy in order to penetrate the market. We are always trying to convince that we have the best possible solution for the patient. Then we offer the differentiated solution for the patients. Actually, if you look at our results, in our development clinic, we are effective in patients that have failed through previous TNF alpha, anti-TNF alpha. We try to demonstrate year after year that we are bringing elements and data differentiations, and Emmanuel highlighted our future clinical program that will hopefully continue to prove that. I think that from a payer standpoint, it's always tempting, let's say, to try to push for a certain level of exclusivity with an additional discount. We think that it's a very dangerous strategy, in the immunology area and in RA particularly. I have, of course, a bias of a physician here, but my sense is that there is such a high level of diversity of patients in RA, and we put the label RA above a lot of very different situation. Pushing for only one product or solution for everyone based on an ability to achieve some type of rebate may be dangerous and may be not the best solution for the patient. In particular, you should consider that controlling the inflammation at early stage is the best possible way to control morbidity on the long term. I can see the temptations to do so. We continue to bring value by adding data that demonstrate that we have a very differentiated solutions, and we hope that by doing so, we will be able to protect the power. We are not playing the price, to answer your question. We are trying to continue to have good coverage, and we are trying to continue to demonstrate that through our data. Differentiation in this particular area is very important to maintain. Is that it? Yeah. I have two more financial questions. One is following on to the question on the guidance. You say the financials is quite visible. I was just wondering, it looks to me like you budget not a lot of decline in the financials, but you also do not put anything in for good cause. In a way, it might be right that you are basically not selling good cause so quickly, so the interest might not go down, but then you do not put anything in for good cause. If we are thinking about the next years, should we think that there is significant deleveraging, or should we think that these proceeds will be likely to be redeployed very quickly and more likely in a long-term investigation rather than near-term accretion? The second question is on R&D. Seems to be that you are increasing this year, but is it right to assume that basically 2016, 2017, the total budget should go down because the big trials for Romo and Lupus come to an end? Is it right to think that basically next year maybe there is still a bit of marginal expansion, but then it is way back end loaded to get into the 2018 target? Starting the financial income expense. When we look into this, first of all, everything that we go on to cash flow is out of the P&L. It can only be the impact of proceeds that then leads to paying down debt. When you look into paying down debt, in 2015, there is not a lot to come to pay down. If you are waiting for relief, then it would be first in 2016, where there is EUR 800 million of reimbursement. In that regard, that explains a bit why you are not seeing too much on 2015. Carrying money today, as we unfortunately know, is not granting a lot of income. So that to the financial income question. In terms of R&D, we have to think in two different boxes, and I will make a choice on one because we have guides on this. We have an absolute number of R&D, and this number can still increase, but under proportionately towards the revenue, which then goes to the relative number that we are always guiding on. Here, what we are guiding on for the next one, two years is the 29% plus or minus 1% that we have given you just with the new guidance. This I find very realistic from what I see at this moment in time. That brings us well into your time horizon that you were mentioning, and it brings us closer to the 30% that we want to reach in 2018. We will for sure see over time a decrease of the relative size of R&D, but that does not always mean that it has to be an absolute one. That will be very dependable on the success of our programs, the decisions that we make in terms of partnering and in terms of the development of our top line. In that regard, there is, I think, a good reason to follow the guidance for the next year or two, and then we will reintroduce with more knowledge about where these programs stand. That would then come into the more costly phase, would then give you an update on that. If I may, I have a question from the webcast. Guillaume from UBS is asking, in the context of biosimilar Humira possibly coming to market in 2016, could you comment on what position of Cimzia patients, what portion of Cimzia patients are Humira refractory patients? The second question is from Guillaume on generic Concerta. Could you provide us with an update? Have you filed with FDA your new bioequivalence data, and when do you expect an answer? These are the two questions from Guillaume. Thank you. Emmanuel, do you have something on the first one? It is not an easy one because we are not tracking all of our patients in and out according to what was the first experience. What we know, and maybe you can add on that, is two things. First is that, as I mentioned, we know that we are efficient after another TNF failure. We know also in the U.S., for example, that classically, roughly 90% of the physicians are trying at least two anti-TNFs before moving to another class. It is the usage, let us say, try a molecule and then see if it is working or not, and then going to another one. Then you may add some types of criteria of which physicians may prefer one on the other. Yeah, I think that is the key. The only thing to add is that the results of the EXXELERATE study, which is this head-to-head study, which has a switch arm for the non-responders, will also tell us how Cimzia is doing in patients who do not achieve a best 28 improvement after 12 weeks, which is basically the recommended time from within the guidelines to assess the patient and start making switch decisions. So we will have a more precise answer soon based on a very large sample size. Okay. Coming back to Concerta, what you can expect from that candidate is, first of all, that the bioequivalence study is ongoing, and that we expect within the timeframe that the FDA was giving to the companies to deliver the data. That will be in the six months window, so you can expect that certainly in May. From there was a very easy pathway. Either you show bioequivalence, and then FDA has indicated that they would be supportive for the products to go back to the AB rating, or you do not, and then FDA has indicated that the products might have to be withdrawn from the market. I think there is still a lot of uncertainty around that, because we neither have seen data nor, as we know, there are different pathways of dealing with the FDA request. Also, not only from our point of view, but also other companies that have been involved with that. We will probably have more idea about that in the middle of the year conference. Danny? I saw it. We take Danny, and then we take it from the web, followed by Fran. Yeah, I've got three questions if I can. Could you just update us on any levels of stocking around Cimzia, Vimpat, and Neupro, either de-stocking or stocking in 2014? Specifically, maybe more with Vimpat, it seems you didn't realize any of the price increase that you took in 2014. So I just wanted to know what your expectations are regarding pricing for Vimpat and maybe whether the channel mix impact we've seen in 2014 is actually not apparent in 2015. Secondly, when we look at the R&D budget, could you give us maybe a little bit more granularity between the spending on early stage, late stage, post-marketing commitments, and then the sort of facility central support functions costs, thinking around those buckets? Because I think there's a clear desire to understand better what are the drivers of that cost line item. Just very lastly, you alluded a little bit towards M&A appetite. You talked about net debt-to-EBITDA ratio target, and I just wanted to understand your appetite for leverage and when you look at transactions whether you feel the need to expand further around the pipeline or leverage your infrastructure to enhance your ability to deliver on that 30% EBITDA margin target. First of all, when we look into this, we would only come very late in the game to a situation that we get specific flexibility. Because as we said, accelerating profitability, which does mean decelerating debt. Only late in the game would that be the case. So we have not been planning on needing that for the 30% to make that answer. Let me take the question of inventory levels. Our inventory levels have been very steady. We don't like major swings in our inventory level because they are disturbing the picture. We are really managing that very well with our distributors. That's the general insight on that question of what do you see in terms of price. First of all, we have always said that a good part of price increases that you might have heard from will not end up in our pocket. What we have seen, we have seen shifts of channel mixes based off from ObamaCare, which had an impact, especially this year, because it is resetting the landscape. That has driven some of the consumption into state-funded programs, which, as you know, in terms of price, are less attractive than the other part of the business. That has probably given you the impression, the right impression, that there was less coming to our bottom line on price increases than you have seen in prior years. I think we believe that price increases will not last forever in that market, especially with other questions combined that you have asked yourself, and that there will be diminishing influence of price increases on the top-line growth. We can see that this year that our underlying growth of all the key products was not driven, in some areas hampered, by the price side of it. Thank you, Detlef. Building on that, and maybe on the other questions. We expect this year to have a less movement or less volatility in terms of channel mix. We think 2014, at least for us, was the year when we will get that more. We had more of that in the area where Medicare and Medicaid was more visible. There's a reason why, for us, impact was more impactful than previous. On the other questions about strategy and M&A, I think what you have seen here is two key messages. The first one is that we are doing well in our area of focus today. We can demonstrate that we can really achieve a very attractive growth in sales from the overall company standpoint, based on the accelerations of the growth that we have been able to deliver on our core products. And if you look at the near future, our near future will be focusing on the launches of the new products as they will materialize, if the phase III continue to be positive, which we will see later on. So our focus today is really to continue to deliver sustainable value through our launches and not to be distracted from that. Having said that, we are, of course, open and we are looking at our portfolio to see how we can balance in the best possible way our current focus. And so that's the reasons behind the Neuropore deal and the acquisition of the rights of the products that may have an impact on the disease-modifying in Parkinson's disease, which is definitely an area of interest for us. So I think you see here the logic of the strategy. Continue the focus, build on our internal pipeline, deliver the growth of what we have been able to develop and commercialize them with success, and strengthening the pipeline through either good decisions early on to ensure that we have a good mix of our investment, as well as maybe complementing what we have in our hands, if we see an attractive asset here and there at the early stage. So that's basically where we are looking. Can we have the question from the back, please? Ladies and gentlemen, please be ready to ask your question. Press 01 on your telephone keypad. And our first question is from Simon Baker with Exane. Please go ahead. You're on live phone. Thanks so much. Take my questions. Some have been answered, but I have got a couple of questions. I noticed in the annual report you give us the tokens progress for discontinued operations. I wonder if you could give us a progress within that. Secondly, could you give us some guidance for CapEx going forward now that we have seen a quite significant reduction in 2014 versus 2013? Finally, a pipeline question on UCB4940. IL-17 is also implicated in AFBA. I was wondering if that is something that you have looked at, something you would look at, or if that is a natural candidate to be out-licensed. We had a bit of difficulty to understand, but I hope that the first question was about discontinued operations and what type of products are in there. Yes. It is all Kremers Urban services, so you can take more or less this as 100% Kremers Urban service. So the generic product portfolio. In terms of the second question, I think it was about CapEx, and I would think that the CapEx for this year we are shooting for is under EUR 20 million plus or minus EUR 20 million, which means the ongoing CapEx. The question on UCB4940 in asthma. Clearly, as Detlef said earlier, we do not only partner because we want to get increased bandwidth or share the risk, but we also partner because we want what he brings to the table. So if we do decide to move in something like asthma, and we have thought of this for a number of programs, we would partner it with a company that has a specific expertise and has that capability. Thanks so much. Our next question is from Sachin Soni with Kempen & Co. Please go ahead. Your line is open. Good afternoon, everyone. My questions are, what is your expectation for D4A for phase III in progressive MYASTHENIA? Second is, what is the mix of severe patients versus moderate patients in the trial? 30% EBITDA margin guidance, how much of that improvement is coming from sales growth and how much from cost-cutting? Thank you. Sachin, I am very sorry. This line is very bad. Would you mind to send your question by email? I am happy to read it, but we were not able to understand. Sure. I'll send the questions. Thank you. I apologize. Do we have a further question from the room? Charles, please. Just one quick one. I apologize if I've missed something here, but I was wondering if there was any update on the active axial spondyloarthritis and non-radiographic axial spondyloarthritis in the U.S. market that you could provide us with. You remember that this was the subject of an advisory committee last year where it actually won the vote, but subsequently not the indication for the non-radiographic patient. What has happened since then is that the academic community, the FDA, has taken some more time to consider whether this is indeed a population that deserves treating. We're continuing to engage with those stakeholders to find a way to bring CIMZIA potentially as the first product to this population. At this point, I don't have an answer that I can provide to you, but we're pretty committed to make a difference for those patients, because it's really impacting people in their late 20s, early 30s. A lot of them are getting ill-treated or getting surgery where a much simpler solution is available. Hopefully we'll be able to give more news within the next year or so. Do we have another question from the room while waiting for Sachin's email? Ann. Thanks. It's Amy Walker from Morgan Stanley. I was just going to ask on the EMBODY-1 and EMBODY-2 trial, you mentioned on the slide about the endpoint being primarily around BILAG. Is that materially different from other phase III trials which have been run in lupus? Is it anything that could potentially differentiate your results from some of those other phase IIIs? Yeah, thank you. It's a combined endpoint called BICLA, as you said, focused on BILAG, but with two other components around physician's assessment of disease severity. It's different from other endpoints that have been used. SELENA-SLEDAI is an endpoint that has been used in other programs. The reason why we have opted for the BICLA followed really long and thorough study and consideration. We believe that the advantage of the BICLA is that it gives you a very sensitive assessment of change versus previous examination, and it does so on every body system. The BICLA is structured around 10 body systems and five different grades from A to E. So A really means you have severe flare, E means it's quiet, it's no disease activity currently in this system. That's a granularity that helps to differentiate, first of all, by body systems. Secondly, what is the change that we have seen over the time since the last visit? That is very different from SELENA-SLEDAI, where you, in essence, have 24 categories that give you an absolute statement on activity compared to how it was in the beginning of the study. We also think that the BICLA will allow us to manage placebo response very well, because the way we have defined our responder criteria, patients have to improve in every body system where they had activity in the beginning of the study, and cannot deteriorate in any body system where there was no activity. It is a relatively high demand. We believe that is what we owe to patients, and we believe that this will also help us to manage some of the heterogeneity, because we will have a high threshold that is hard to imagine that placebo will manage that in a 48-week study. Again, I keep repeating this, a lot of consideration went into the topic. Remember, we have our central reading, which is also intended to manage heterogeneity. It is still a very risky program. I just want to make sure that you have heard me on that. Thank you. If I may, the question from Sachin Soni. The first two are on epratuzumab as well. What is the expectation for placebo rate in epratuzumab phase III, and what is the mix of severe to moderate patients in the epratuzumab trial? Then a question for Detlef Thielgen, the 30% EBITDA margin target, how much from sales growth and how much from cost cutting? The statistical analysis plan and the sample size calculation for the EMBODY program anticipate a 30% response rate on placebo, just to be on the very safe side. Again, while we have done everything to manage that and keep that low. Patients in the study all are supposed to be moderate to severe, and whether they are more moderate or more severe really depends on the number of organ system affected and the severity on the grading. As we do not have the data yet, I also cannot tell you how many patients would fit into which category. All of this will come when we have results later this year. In terms of the question, it will be all on sales growth, because when you are looking, the 30% is the relative number, and therefore what I expect is that we show a significant sales growth over that period and under proportionate growth of expenses. Could I foresee that, for example, in a category like G&A, if inflation stays very low, there might also be a chance for a decrease? I could foresee that. But I think if you think more an under proportional growth of expenses and significant increase of gross margins, which does not mean top line plus your cost of sales, that is a better way to think about it. Jo had another question. Thank you. Just a quick follow-up question on that. We have seen a strong decline in Keppra. Have we reached a level where it is now going to be stable? Are there any countries in Europe where effectively all the genericization that was going to happen has happened? Have you cut your price so that you are effectively supplying at a generic price? I am just looking to see how we should model that tail of a product which is, after all, extremely profitable to you still. Whether we have got another 3 years or so of, I do not know, 15%-20% decline or whether it should start to even off now. Let me take that. There is a 7% decline on that year by year, mainly driven out of Europe. We have seen that most of the major countries have been coming to the new pricing in 2014. There will be some impact in 2015. We also know that there is a price sensitive culture, so it would be not good to guide you on there will be no more price decreases coming, because the world is just not going that way. But on the other hand, we are having other regions in the world that are still growing. When you are getting to the point that it is a 7% decrease, and perhaps next year is even less in the developed countries, then you should come more into the range of a normal mature product that is having a perhaps mid-single digit decrease with some ups and downs depending on situation. Do we have further questions? Yeah. One is coming via the web. Isabella. I cannot remember if you have answered this question already, but on the other income, which was a big hike up in 2014, which I think is the payment from Sanofi and the EIB stuff, is that recurring or is that a one-off high level and we should think about the EUR 20 we have seen in the past and going forward? The EIB, the majority of that program, because it was a funding program for a certain amount, the majority has been in 2014, so there will be a bit in 2015, but not for you to get excited about. As we said, Sanofi program is an ongoing program, which is, as you remember, 50/50 partnership. As more we developed the compound in this partnership, as more this might increase. But also you will see the same, it is a fall through to the cost because the R&D cost will be also there. This is more or less irrelevant for modeling, because if you do not have this, you will not have the costs or the other way around. Then we expect always that we have some impact on that line, dependent on decisions we make in terms of partnering, I mentioned that, as well as the other opportunities that we are using there. But it's difficult to predict that also. We are managing that within the flow of the overall P&L. Any further questions? I really think. Thank you very much. We have a question from Jan De Kerpel, KBC. The first one is for Ismail. The IL-17 AF product, is this a dual antibody of which one is targeting IL-17A and the other IL-17F, or is it one antibody targeting both? A second question, looking at the next wave of launch products, brivaracetam, epratuzumab, Romo, do you expect to increase your current sales and marketing functions to commercialize these products, or can it be supported by current sales teams for Vimpat, Keppra, and Cimzia? What kind of MDs will be your target prescriber audience for Romo? To take the first question, Jan, thank you for that. It is one antibody targeting both ligands. In fact, this was a very good display of UCB's proprietary technology. Our scientists, where the antibody first only targeted IL-17A and had very low targeting of IL-17F. They were able to use a proprietary model that we have inside to in silico predict which change we have to make to be able to hit both targets from the same antibody at picomolar concentration. It's one antibody that targets both ligands. Maybe I can answer the second question relative to what kind of capabilities we will need in order to commercialize the next wave of products. It's one of the advantage of our focus into therapeutic areas, in that we can leverage our current capacity. Rivaroxaban in epilepsy, you can anticipate that we will be able to leverage our current structural and organizational capabilities that we have in this area. Epratuzumab for lupus, also with Cimzia. Romo will be slightly different because it's not only, even though the rheumatologists are one of the key MDs that we have to see, there is some others. Please keep also in mind that for this product, we are partnering with Amgen on the 50/50 basis, so we will have also additional muscle to help us to launch this product. Just a very last question on brivaracetam, but given the favorable tax treatment of brivaracetam, how are you going to prioritize your sales forces behind Keppra, Vimpat, and brivaracetam, given the clear incentive on the last one? Because it is a tax treatment question, I'm not entirely sure. Let's try to make it visible. When you see a product like Vimpat that is already in a more mature stage and is bringing in very big profitability, and you are looking into a product like brivaracetam that still has to build that, it will take a quite reasonable time for tax differentials to really play a role. That would be my first question there. Secondly, as these products are complementary and not competing in nature as we see them, we would hope that the infrastructure is set and we can do both at the same time. With that, I would like again to thank you for your interest and participation. Thank you particularly for those of you who have joined us here in London, and wish you a very good rest of the day. Thank you very much.