What happened?
After surging on receding US tariff/Moonlake concerns, and the significant potential of galvokimig in atopic dermatitis becoming better appreciated (details here), the shares have pulled back sharply on apparent ''softening'' Bimzelx Rx trends. This has been compounded by Novartis commentary that the HS market (20% of Bimzelx volume) is slowing as efforts to reduce Cosentyx switches to Bimzelx are stepping up. UCB cite Rx data from an unnamed but Top 5 specialty pharmacy has been disrupted since Oct-10th, on the back of a software upgrade implementation issue. While this has now been resolved UCB claim there is a residual backlog of prescriptions (~10% of weekly TRx to clear in 2-3 weeks). We use this note to publish encouraging IQVIA data from EU/Japan/China, and provide sensitivity analysis on US trends. We find it difficult to concur with bear arguments that Bimzelx growth has permanently stalled. With a bull-bear valuation range of EUR373-130, and UCB set to become net cash at end-2026e we maintain Outperform.
Bull-bear valuation range EUR373-130
We forecast Bimzelx sales rising from EUR2bn in 2025 to a peak of EUR7bn in 2035e, taking into account accelerating pricing pressure from 2029, when Cosentyx faces biosimilars, as well as the opportunity from further label expansion (e.g. paediatric indications and palmoplantar pustulosis, addressable population 500k). We forecast group sales rising from EUR7bn in 2025 to a peak of EUR17bn in 2037e, with erosion thereafter to just EUR11bn in 2040 despite cumulative RandD/capex spend of EUR36/9bn. We conservatively assume UCB''s growing cash pile end-2026e earns a return of just 2% per annum. Taking the following additional factors into account; Bimzelx/Rystiggo/Zilbrysq patent term extension through 2035-37, underappreciated growth prospects for the Evenity profit share (30% of group EBITDA), pipeline potential (galvo peak risk adjusted sales EUR4.5bn) implies the shares are now discounting peak Bimzelx...
