UCB raises guidance for 2008 above consensus

UCB has issued financial projections for full-year 2007 and 2008 that exceed analysts' expectations. According to the Belgian drugmaker, full-year 2007 revenues will exceed last year's, with recurring earnings before interest, depreciation and amortization expected at over 720.0 million euros ($1.06 billion) and net profit set to top 100.0 million euros.

The firm warned that 2008 revenues would fall to 3.4 billion euros due to the expiration of the US patent on its allergy treatment Zyrtec (cetirizine HCl), although this is higher than many analysts had predicted. Recurring 2008 EBITDA is expected to reach 650.0 million euros, with 100.0 million euros net profit.

Analysts at ING Financial Markets upgraded UCB from sell to hold, reassured by the fact that its EBITDA was above the consensus, a benefit they attributed to merger-related synergies. Meanwhile, in a note to investors, analysts at Lehman Brothers stated that the higher first-time 2008 guidance suggests that UCB's Keppra (levetiracetam) is more profitable than they expected, as the anti-epileptic will be the main growth driver in the short term.