UCB SA - BNP Paribas Fortis

(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
intense competition, there is a risk that any of the products which the UCB 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 or manufacturing abnormalities. 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 recently devolved its research and development function, splitting it between UCB
NewMedicines and Global Projects & Development. In the event that either of these groups is not
successful, this may have a negative impact on the pipeline of products being developed. Further, the
success of UCB NewMedicines is in part reliant on the success of its various partnerships. In the
event that such arrangements are unsuccessful, this may have a negative impact on the success of UCB
NewMedicines 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 indications. In the
event that the UCB Group fails 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 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 reinvest in research and development.
(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 include 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 or 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 UCB
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 UCB 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.
A11250830/2.25/23 Oct 2009 16