Obligation UCB Société Anonyme 7.75% ( BE6213104605 ) en EUR

UCB Société Anonyme

100 % ▼

Belgique

BE6213104605 ( en EUR )

7.75% par an ( paiement annuel )

Perpétuelle

Prospectus brochure de l'obligation UCB S.A BE6213104605 en EUR 7.75%, échéance Perpétuelle

50 000 EUR

300 000 000 EUR

18/03/2027 ( Dans 314 jours )

UCB S.A. est une société biopharmaceutique internationale spécialisée dans les neurosciences et l'immunologie, développant et commercialisant des traitements pour des maladies chroniques.

L'Obligation émise par UCB Société Anonyme ( Belgique ) , en EUR, avec le code ISIN BE6213104605, paye un coupon de 7.75% par an.
Le paiement des coupons est annuel et la maturité de l'Obligation est le Perpétuelle

UCB SA
(incorporated in the Kingdom of Belgium with limited liability)
Issue of EUR 300,000,000
Fixed-to-Floating Rate Perpetual Subordinated Securities
Issue Price: 99.499 per cent.
Issue Date: 18 March 2011
JOINT BOOKRUNNER AND STRUCTURING MANAGER
BofA Merrill Lynch
JOINT BOOKRUNNERS
BNP PARIBAS
ING Belgium SA/NV
SENIOR CO-LEAD MANAGER
The Royal Bank of Scotland
CO-LEAD MANAGERS
Crédit Agricole CIB
Mitsubishi UFJ Securities International plc
Prospectus dated 16 March 2011
1

The EUR 300,000,000 Fixed-to-Floating Rate Perpetual Subordinated Securities (the "Securities") will be issued by UCB SA. The Securities will bear interest from (and including) 18 March
2011 (the "Issue Date") at a rate of 7.750 per cent. per annum to (but excluding) 18 March 2016 (the "First Call Date") and, thereafter, at the Floating Interest Rate (as defined in the terms and
conditions of the Securities (the "Terms and Conditions"). Interest on the Securities is payable annually in arrear on 18 March in each year up to (and including) the First Call Date, the first
payment being on 18 March 2012, and, after the First Call Date, quarterly in arrear on the Interest Payment Dates falling on, 18 June, 18 September, 18 December and 18 March in each year
(subject to adjustment for non business days). The Issuer may elect to defer any interest payment at its sole discretion, except in certain circumstances as described in Condition 5 of
the Terms and Conditions. The Issuer may pay such deferred interest at any time and must pay such deferred interest under certain circumstances as described in Condition 5 of the
Terms and Conditions.
The Securities are perpetual securities in respect of which there is no stated maturity and the Issuer is under no obligation to redeem the Securities at any time. The Holders have no
right to call for their redemption. Prospective investors should be aware that they may be required to bear the financial risks of an investment in the Securities for an indefinite
period of time.
The Securities are redeemable in whole but not in part at the option of the Issuer at their principal amount together with any accrued and unpaid interest thereon up to (but
excluding) the redemption date and any outstanding Arrears of Interest, on the First Call Date or on any Interest Payment Date thereafter. If a Special Event or a Change of Control
Event has occurred, the Issuer may also elect to redeem the Securities in whole but not in part at any time at their (i) Premium Redemption Price (in the case of an Accounting Event
or a Tax Event where such redemption occurs prior to the First Call Date), (ii) Make-Whole Redemption Price (in case of a Rating Event) or (iii) principal amount (in the case of an
Accounting Event or a Tax Event where such redemption occurs on or after the First Call Date or in the case of a Substantial Repurchase Event, a Change of Control Event or a
Withholding Tax Event where such redemption occurs at any time), in each case together with any accrued and unpaid interest up to (but excluding) the redemption date and any
outstanding Arrears of Interests (see "Terms and Conditions").
The Securities constitute direct, unsecured and undated subordinated obligations of the Issuer and in the event of a Winding -Up (as defined in "Terms and Conditions"), will be
subordinated to the claims of holders of all Senior Obligations (as defined in "Terms and Conditions"). In the event of a Winding-Up, no payments will be made under the Securities
until the claims of holders of all Senior Obligations shall first have been satisfied in full.
The denomination of the Securities shall be EUR 50,000.
Application has been made to the Commission de Surveillance du Secteur Financier (the "CSSF") in its capacity as competent authority under the Luxembourg Act dated 10 July 2005 relating
to prospectuses for securities (the "Luxembourg Act") for the approval of the Prospectus, for the purposes of Directive 2003/71/EC (the "Prospectus Directive"). Application has also been
made to the Luxembourg Stock Exchange for the Securities to be listed on to the official list of the Luxembourg Stock Exchange (the "Official List") and to be admitted to trading on the
Luxembourg Stock Exchange's regulated market. References in this Prospectus to the Securities being "listed" (and all related references) shall mean that the Securities have been listed on the
Official List and admitted to trading on the Luxembourg Stock Exchange's regulated market. The Luxembourg Stock Exchange's regulated market is a regulated market for the purposes of
Directive 2004/39/EC of the European Parliament and of the Council on markets in financial instruments.
The Securities will be issued in dematerialised form under the Belgian Company Code (Wetboek van Vennootschappen / Code des Sociétés) (the "Belgian Company Code") and cannot be
physically delivered. The Securities will be represented exclusively by book entries in the records of the X/N securities and cash clearing system operated by the National Bank of Belgium (the
"NBB") or any successor thereto (the "Clearing System"). Access to the Clearing System is available through those of its Clearing System participants whose membership extends to securities
such as the Securities. Clearing System participants include certain banks, stockbrokers (beursvennootschappen / sociétés de bourse), Euroclear Bank SA/NV ("Euroclear") and Clearstream
Banking, société anonyme, Luxembourg ("Clearstream, Luxembourg"). Accordingly, the Securities will be eligible to clear through, and therefore accepted by, Euroclear and Clearstream,
Luxembourg and investors can hold their Securities within securities accounts in Euroclear and Clearstream, Luxembourg.
Securities may be held only by, and transferred only to, eligible investors referred to in Article 4 of the Belgian Royal Decree of 26 May 1994 on the deduction of withholding tax (the "Eligible
Investors") holding their securities in an exempt securities account that has been opened with a financial institution that is a direct or indirect participant in the X/N Clearing System operated
by the National Bank of Belgium.
Unless otherwise stated, capitalised terms used in this Prospectus have the meanings set out in this Prospectus. Where reference is made to the "Conditions of the Securities" or to the
"Conditions" reference is made to the "Terms and Conditions of the Securities".
An investment in the Securities involves certain risks. Prospective investors should have regard to the factors described under the heading "Risk Factors" on page 7.
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RESPONSIBLE PERSON
This prospectus dated 16 March 2011 (the "Prospectus") is a prospectus for the purposes of Article 5.3 of
Directive 2003/71/EC (the "Prospectus Directive") and the Luxembourg Act and for the purpose of giving
information with regard to UCB SA, having its registered office at 60 Allée de la Recherche, 1070 Brussels,
Belgium (the "Issuer") and its affiliates (the "UCB Group" or the "Group") and the EUR 300,000,000 Fixed-to-
Floating Rate Perpetual Subordinated Securities (the "Securities") which according to the particular nature of the
Issuer and the Securities, is necessary to enable investors to make an informed assessment of the Securities and of
the assets and liabilities, financial position, profit and losses and prospects of the Issuer. The Issuer (the
"Responsible Person") accepts responsibility for the information contained in this Prospectus. To the best of the
knowledge of the Issuer (having taken all reasonable care to ensure that such is the case), the information contained
in this Prospectus is in accordance with the facts and does not omit anything likely to affect the import of such
information.
This Prospectus is to be read in conjunction with all the documents which are incorporated herein by reference (see
"Documents Incorporated by Reference").
This Prospectus does not constitute an offer to sell or the solicitation of an offer to buy the Securities in any
jurisdiction to any person to whom it is unlawful to make the offer or solicitation in such jurisdiction. The
distribution of this Prospectus and the offer or sale of Securities may be restricted by law in certain jurisdictions.
The Issuer and the Managers do not represent that this Prospectus may be lawfully distributed, or that the Securities
may be lawfully offered, in compliance with any applicable registration or other requirements in any such
jurisdiction, or pursuant to an exemption available thereunder, or assume any responsibility for facilitating any
such distribution or offering. In particular, no action has been taken by the Issuer or the Managers which is
intended to permit a public offering of the Securities or the distribution of this Prospectus in any jurisdiction where
action for that purpose is required. Accordingly, no Securities may be offered or sold, directly or indirectly, and
neither this Prospectus nor any advertisement or other offering material may be distributed or published in any
jurisdiction, except under circumstances that will result in compliance with any applicable laws and regulations.
Persons into whose possession this Prospectus or any Securities may come must inform themselves about, and
observe, any such restrictions on the distribution of this Prospectus and the offering and sale of Securities.
For a description of further restrictions on offers and sales of Securities and distribution of this Prospectus see
"Subscription and Sale" below.
IN CONNECTION WITH THE ISSUE OF THE SECURITIES, MERRILL LYNCH INTERNATIONAL AS
STABILISING MANAGER (THE "STABILISING MANAGER") (OR PERSONS ACTING ON BEHALF OF
THE STABILISING MANAGER) MAY OVER-ALLOT SECURITIES OR EFFECT TRANSACTIONS WITH A
VIEW TO SUPPORTING THE MARKET PRICE OF THE SECURITIES AT A LEVEL HIGHER THAN THAT
WHICH MIGHT OTHERWISE PREVAIL. HOWEVER, THERE IS NO ASSURANCE THAT THE
STABILISING MANAGER (OR PERSONS ACTING ON BEHALF OF THE STABILISING MANAGER) WILL
UNDERTAKE STABILISATION ACTION. ANY STABILISATION ACTION MAY BEGIN ON OR AFTER THE
DATE ON WHICH ADEQUATE PUBLIC DISCLOSURE OF THE TERMS OF THE OFFER OF THE
SECURITIES IS MADE AND, IF BEGUN, MAY BE ENDED AT ANY TIME, BUT IT MUST END NO LATER
THAN THE EARLIER OF 30 DAYS AFTER THE ISSUE DATE OF THE SECURITIES AND 60 DAYS AFTER
THE DATE OF THE ALLOTMENT OF THE SECURITIES. ANY STABILISATION ACTION OR OVER-
ALLOTMENT MUST BE CONDUCTED BY THE STABILISING MANAGER (OR PERSONS ACTING ON
BEHALF OF THE STABILISING MANAGER) IN ACCORDANCE WITH ALL APPLICABLE LAWS AND
RULES.
No person is or has been authorised to give any information or to make any representation not contained in or not
consistent with this Prospectus and any information or representation not so contained or inconsistent with this
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Prospectus or any other information supplied in connection with the Securities and, if given or made, such
information must not be relied upon as having been authorised by or on behalf of the Issuer or the Managers.
Neither the delivery of this Prospectus nor any sale made in connection herewith shall, under any circumstances,
create any implication that the information contained in this Prospectus is true subsequent to the date hereof or
otherwise that there has been no change in the affairs of the Issuer since the date hereof or the date upon which this
Prospectus has been most recently amended or supplemented or that there has been no adverse change, or any
event likely to involve any adverse change, in the condition (financial or otherwise) of the Issuer since the date
hereof or, if later, the date upon which this Prospectus has been most recently amended or supplemented or that the
information contained in it or any other information supplied in connection with the Securities is correct at any
time subsequent to the date on which it is supplied or, if different, the date indicated in the document containing the
same. The Managers and the Issuer expressly do not undertake to review the financial condition or affairs of the
Issuer during the life of the Securities.
Neither this Prospectus nor any other information supplied in connection with the offering of the Securities (a) is
intended to provide the basis of any credit or other evaluation or (b) should be considered as a recommendation by
the Issuer or any of the Managers that any recipient of this Prospectus or any other information supplied in
connection with the offering of the Securities should purchase any Securities. Each investor contemplating
purchasing any Securities should make its own independent investigation of the financial condition and affairs, and
its own appraisal of the creditworthiness, of the Issuer. Neither this Prospectus nor any other information supplied
in connection with the offering of the Securities constitutes an offer or invitation by or on behalf of the Issuer or
any of the Managers to any person to subscribe for or to purchase any Securities.
No representation, warranty or undertaking, express or implied, is made and no responsibility or liability is
accepted by the Managers as to the accuracy or completeness of the information contained or incorporated in this
Prospectus or any other information in connection with the Issuer or the offering of the Securities. No Manager
accepts any liability, whether arising in tort or in contract or in any other event, in relation to the information
contained or incorporated by reference in this Prospectus or any other information in connection with the Issuer,
the offering of the Securities or the distribution of the Securities.
The Securities have not been and will not be registered under the United States Securities Act of 1933, as amended
(the "Securities Act") or any state securities laws and are subject to U.S. tax law requirements. Subject to certain
exceptions, the Securities may not be offered, sold or delivered within the United States or to, or for the account or
benefit of U.S. persons (as defined in Regulation S under the Securities Act). For a further description of certain
restrictions on the offering and sale of the Securities and on the distribution of this document, see "Subscription
and Sale" below.
All references in this document to "euro" and "" refer to the currency introduced at the start of the third stage of
European economic and monetary union pursuant to the Treaty establishing the European Community, as amended.
WARNING
The Prospectus has been prepared to provide information on the listing of the Securities. When potential investors
make a decision to invest in the Securities, they should base this decision on their own research of the Issuer and
the conditions of the Securities, including, but not limited to, the associated benefits and risks, as well as the
conditions of the offer itself. The investors must themselves assess, with their own advisors if necessary, whether
the Securities are suitable for them, considering their personal income and financial situation. In case of any doubt
about the risk involved in purchasing the Securities, investors should abstain from investing in the Securities.
The summaries and descriptions of legal provisions, accounting principles or comparisons of such principles, legal
company forms or contractual relationships reported in the Prospectus may in no circumstances be interpreted as
investment, legal or tax advice for potential investors. They are urged to consult their own advisor, bookkeeper or
4

other advisors concerning the legal, tax, economic, financial and other aspects associated with the subscription to
the Securities.
In the event of important new developments, material errors or inaccuracies that could affect the assessment of the
securities, and which occur or are identified between the time of the approval of the Prospectus and the time at
which trading on a regulated market commences, the Issuer will have a supplement to the Prospectus published
containing this information. This supplement will be published in compliance with at least the same regulations as
the Prospectus, and will be published on the websites of the Issuer. The Issuer must ensure that this supplement is
published as soon as possible after the occurrence of such new significant factor.
5

TABLE OF CONTENTS
Page
TABLE OF CONTENTS ................................................................................................................................. 6
PART I: RISK FACTORS ............................................................................................................................... 7
PART II: DOCUMENTS INCORPORATED BY REFERENCE.............................................................. 26
PART III: TERMS AND CONDITIONS OF THE SECURITIES............................................................. 30
PART IV: CLEARING................................................................................................................................... 48
PART V: DESCRIPTION OF THE ISSUER ............................................................................................... 49
PART VI: MANAGEMENT AND CORPORATE GOVERNANCE......................................................... 89
PART VII. PRINCIPAL SHAREHOLDERS............................................................................................ 105
PART VIII: RELATED PARTY TRANSACTIONS ................................................................................. 107
PART IX: ASSOCIATED COMPANIES AND SHAREHOLDINGS...................................................... 108
PART X: DESCRIPTION OF THE SHARES AND ARTICLES OF ASSOCIATION ..........................115
PART XI: USE OF PROCEEDS................................................................................................................. 122
PART XII: TAXATION ............................................................................................................................... 123
PART XIII: SUBSCRIPTION AND SALE ................................................................................................ 128
PART XIV: GENERAL INFORMATION.................................................................................................. 132
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PART I: RISK FACTORS
The following is a description of risk factors which are material in respect of the Securities and the financial
situation of the Issuer and which may affect the Issuer's ability to fulfil its repayment obligations under the
Securities and which prospective investors should consider carefully before deciding to purchase the Securities.
The sequence in which the following risk factors are listed is not an indication of their likelihood to occur or of the
extent of their commercial consequences. The following statements are not exhaustive: prospective investors should
read and consider all of the information provided in this Prospectus or incorporated by reference in this
Prospectus and should make their own independent evaluations of all risk factors and consult with their own
professional advisers if they consider it necessary. Terms defined in "Terms and Conditions of the Securities"
below shall have the same meaning where used below.
1.
FACTORS THAT MAY AFFECT THE ISSUER'S ABILITY TO FULFIL ITS
OBLIGATIONS UNDER THE SECURITIES
(a)
The loss of patent protection or other exclusivity or ineffective patent protection for marketed
products may result in loss of sales to competing products.
Patent protection is considered, in the aggregate, to be of material importance in the UCB Group's
marketing of its products in the EU, the U.S. and in most other major markets. Patents covering
products that the Group has introduced normally provide market exclusivity, which is important for the
successful marketing and sale of its products and its ability to reinvest the proceeds of sales into
research and development. Similarly, many products, upon approval by regulatory authorities, benefit
from "data exclusivity". This exclusivity is a recognition of the unique work (typically clinical work)
performed to demonstrate the safety and efficacy of a product. Exclusivity is an important asset
enabling the UCB Group to lawfully sell its protected products for a period of time unimpeded by
competition from identical or similar products. The UCB Group will seek patents and data exclusivity,
where the opportunity exists, covering each of its products in each of the markets where it intends to sell
the products and where meaningful patent protection is available.
Even if the Group succeeds in obtaining patents covering its product, third parties may challenge or
seek to invalidate or circumvent its patents and patent applications. It is important for the business of
the UCB Group to successfully defend the patent rights that provide market exclusivity for its products.
Patent litigation and other challenges to the patents of the UCB Group are costly and unpredictable and
may deprive the Group of market exclusivity for a patented product or, in some cases, third party
patents may prevent the Group from marketing and selling a product in a particular geographic area.
Generic drug manufacturers, particularly in the U.S., may seek marketing approval for pharmaceutical
products currently under patent protection by attacking the validity or enforceability of a patent through
a Paragraph IV patent certification under 21 U.S.C. §355(j)(2)(A)(vii). If a generic manufacturer
succeeds in invalidating a patent protecting one of the products of the UCB Group, that product could
be exposed to generic competition before the expected expiration date of the patent and data
exclusively. If one or more important products lose patent protection in profitable markets, sales of
those products are likely to decline significantly as a result of generic versions of those products
becoming available. The results of operations of the UCB Group may be adversely affected by such
sales decline. Decisions adversely impacting the Group's patents could also result in third party claims
by, for example, direct and indirect purchasers and state and federal governmental entities, seeking
damages for having wrongly precluded competition in the market place.
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During the life of its patent related to the compound per se, a patented product is normally only subject
to competition from different products with similar indications. After a patent expires or a product loses
exclusivity, the owner of the formerly patented product is likely to face increased competition from
generic products entering the market, the extent of which will very much depend on various factors like
the geographical market, the therapeutic area and the type of disease, the existing competition and the
volume of sales of the original product. The loss of patent protection in the U.S. and subsequent generic
erosion in relation to Keppra® has impacted the UCB Group in accordance with predictions, with an
approximate market share retention of less than 20 per cent more than 12 months after the loss of such
protection. In Europe, Keppra® has lost data exclusivity in September 2010 but it is too soon to be able
to assess the impact on the market share. With a number of products coming off patent in various
jurisdictions in the coming years, the sustainability of the projected market share in the face of generic
competition will become important for the UCB Group. In the event that the sales of any product differ
from those anticipated after the loss of patent protection, this may have a negative impact on the profits
of the Group. As such, the introduction in the US in October 2010 of a generic version of Tussionex® is
expected to have a significant impact on sales thereof for 2010 and onwards.
The extent of patent protection varies from country to country. In some of the countries in which the
UCB Group currently operates, patent protection may be significantly weaker and/or more difficult to
enforce than in the European Union or the United States. Piracy of patent protected intellectual property
has occurred in recent years, especially in some Asian countries. In particular, these countries could
facilitate competition within their markets from generic manufacturers who would otherwise be unable
to introduce competing products for a number of years.
Separately, in its report on the pharmaceutical sector adopted in July 2009, the European Commission
seemed to suggest an intention to challenge the existence of patent rights in certain circumstances, in an
attempt to address the perceived difficulties encountered by generic companies in getting to market
once a product patent has expired, and to counter the apparent decline in the number of novel medicines
entering the market. The report addressed certain practices by pharmaceutical companies as being
among the causes of these problems, and the European Commission is now expected to intensify its
scrutiny of the pharmaceutical sector under antitrust law, including increased monitoring of settlement
arrangements between originators and generic drug companies. The report also calls on European
member states to introduce legislation to facilitate the uptake of generic drugs. In the event that such
legislation is proposed or implemented, or, in the future, the UCB Group becomes the subject of an
antitrust investigation, this could have a material adverse effect on the Group's business.
The UCB Group also is currently assessing and will carefully monitor the potential impact on the
organization of the key areas of healthcare reform in the U.S. For example, there is pending legislation
called the Preserving Access to Affordable Generics, which if passed would give the Federal Trade
Commission (FTC) broad authority to bring enforcement actions against parties who settle patent
infringement claims related to the sale of drug products. Under this proposed legislation, if the FTC
initiates proceedings against parties to any such settlement agreements then such agreements where a
generic manufacturer receives anything of value and agrees to limit research, development,
manufacturing or marketing of its product for any period of time would be presumptively
anticompetitive. The UCB Group is also preparing for the implementation of the Patient Protection and
Affordable Care Act of 2009 ("PPACA") that was signed into law in the U.S. on 23 March 2010, as
amended by the Healthcare and Education Reconciliation Act of 2010. PPACA significantly changes
how health care is delivered, financed and regulated in the U.S. and significantly impacts
biopharmaceutical companies like the UCB Group. Among other changes, PPACA establishes
mechanisms that may serve to limit access to particular therapies and/or discourage bringing particular
therapies to market (e.g., comparative effectiveness). The new legislation will significantly increase the
8

cost of compliance, impose new taxes on sales to US government health plans, and impose increased
rebates on pharmaceutical companies. PPACA is anticipated to increase the number of insured
beginning in 2014 thereby potentially increasing access to the UCB Group and other therapies.
Finally, PPACA provides a regulatory approval pathway for follow-on biologics which includes a period
of market exclusivity of twelve years for originators; however, how this pathway will operate in practice
remains to be seen. Open questions include the design and number of clinical trials required and non-
US. product referencing and naming requirements. In addition, President Obama's budget proposal for
2012 proposes reducing the period of data exclusivity for innovative biologics manufacturers to 7 years.
Such a reduction faces stiff opposition from BIO and PhRMA and would have to be approved by
Congress to take effect. Answers to these outstanding questions will help determine the timing and
impact of the introduction of this new form of competition. Despite the questions and concerns, the net
impact of PPACA may not be understood fully until implementing regulations are established and
operating. The recent shift of power in the U.S. House of Representatives (to those generally
disfavouring PPACA) also may result in amendments to the legislation. Such legislative changes may
have a significant impact on the business of the Group.
There also are several pieces of legislation pending in the U.S. that, if passed, might impact UCB's
intellectual property, including:
1) The Preserving Access to Affordable Generics (S.27) would give the Federal Trade Commission
(FTC) broad authority to bring enforcement actions against parties who settle patent infringement
claims related to the sale of drug products. Under this proposed legislation, if the FTC initiates
proceedings against parties to any such settlement agreements then such agreements would be
presumptively anticompetitive where a generic manufacturer receives anything of value and agrees to
limit research, development, manufacturing or marketing of its product for any period of time.
2) The Patent Reform Act of 2011 (S.23) contains several intellectual property-related provisions
supported by the biopharmaceutical community. Among other provisions, it would reform the current
"inter partes reexamination" process in the Patent Office by removing inefficiencies that currently cause
such proceeding to last for five years or more. It would establish other efficiencies and incentives to
speed the process. It would provide the Patent Office with expanded fee-setting authority and a
proposed amendment would ensure that such fees are not diverted away from the Patent Office. The bill
would transition the U.S. patent system from the current "first to invent" to a "first to file" system
thereby harmonizing the process more with the patent process of other industrialized countries to make
more efficient use of the patent system. It also would create a process for patent owners to submit new
or corrected information relevant to the examination of their issued patents. This "supplemental
examination" is hoped to lead to more unambiguously valid and enforceable patents.
3) The Equal Access to Tax Planning Act (S.139) would deem any strategy to reduce, avoid or defer tax
liability insufficient to differentiate invention from prior art when evaluating an invention under section
102 or 103 of title 35, United States Code.
Other than the potential legislation referenced above, the UCB Group is not aware of any proposed
patent law modifications or other imminent legislation that will affect it materially. Nevertheless, if a
country in which the UCB Group currently sells a substantial volume of an important product were to
effectively invalidate its patent rights in that product, the revenues of the Group could suffer.
(b)
Failure to develop new products and production technologies will have a negative impact on the
competitive position of the UCB Group.
The UCB Group significantly depends on the development of commercially viable and sustainable new
products and technologies. Because of the lengthy development process, technological challenges and
9

intense competition, there is a risk that any of the products which the Group is currently developing will
not show the required efficacy and safety, will not be approved by the relevant authorities, will not be
marketable on time or which are launched and subsequently manifest safety issues, manufacturing
abnormalities or other such problems. Balancing current growth and investment for the future remains
a major challenge, and the UCB Group may be unable to meet its expectations and targets with respect
to products which are being developed. The competitive position and operating results of the UCB
Group could be harmed in the long term if it is unsuccessful in developing new products and quality and
cost efficient manufacturing processes, or if its ability to generate sufficient levels of sales through
investments in new products and expenditures on research and development declines.
The UCB Group has devolved its research and development function, splitting it between UCB
NewMedicinesTM and Global Projects & Development. In the event that either of these groups is not
productive, this may have a negative impact on the pipeline of products being developed. Further, the
success of UCB NewMedicinesTM and Global Projects & Development are in part reliant on the success
of their various partnerships. In the event that such arrangements are unsuccessful, this may have a
negative impact on the success of UCB NewMedicinesTM and the pipeline of products for the UCB
Group.
The UCB Group focuses on extracting value from its products by managing their life cycle efficiently
and maximising the patent protection available in various jurisdictions for different and innovative
indications and formulations. In the event that the Group fails or is unable to maximise the value
obtained from the products while such protection is in place, this may have a negative impact on sales in
the medium to long term, since the value of that patent protection will be diminished. Such a reduction
in product sales may have a material adverse effect on the revenues of the UCB Group and its ability to
further reinvest in research and development and sales and marketing. In particular, the introduction in
the U.S. in October 2010 of a generic version of Tussionex®, sooner than anticipated although not
unanticipated, could significantly impact sales thereof from 2010 onwards and the "at risk" launch of a
generic Xyzal® product in the US will similarly impact the market for Xyzal® sales thereafter. The loss
of exclusivity of Keppra® is equally an event that could significantly impact sales thereof in Europe.
(c)
The UCB Group depends in the near term on a small number of products which may also be
subject to competitive forces.
The UCB Group has to date depended, and will continue to depend to a large extent on the sales of a
few products. Historically, key products have included Zyrtec®, Keppra® and Xyzal®, which are
approaching or have reached the end of their patent-protected timeframe. The current key products for
the UCB Group include Cimzia®, Neupro® and Vimpat®. The continuing sales volume of these
products significantly depend on their patent protection but also on other factors such as regulatory
approvals, regulation of pricing, product liability, sales and marketing strategies and investments, and
competition. A significant decrease in the sales of any of these products could have a material adverse
impact on the results of operations of the Group.
The UCB Group cannot predict with accuracy the timing or impact of the introduction of competitive
products or their possible effect on its sales. Products that compete with the Group's products,
including some of its best-selling medicines, are launched from time to time. Launches of a number of
competitive products have occurred in recent years, and certain potentially competitive products are in
various stages of development, some of which have been filed for approval with the FDA and with
regulatory authorities in other countries.
If any of the UCB Group's major products were to become subject to new problems such as loss of
patent protection, changes in prescription growth rates, material product liability litigation, unexpected
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