UCB to divest mature neurology and allergy portfolio in China for $680m to CBC Group and Mubadala

UCB, a Belgian biopharmaceutical company, has announced the divestment of its mature neurology and allergy portfolio in China for $680 million, marking a strategic shift towards innovation and partnerships in one of the world’s fastest-growing pharmaceutical markets. This significant deal involves the sale of well-known products such as Keppra, Vimpat, Neupro, Zyrtec, and Xyzal, along with UCB’s Zhuhai manufacturing site, to CBC Group, Asia’s largest healthcare-focused asset management firm, and Mubadala, the Abu Dhabi-based investment company.

Strategic Shift Towards Innovation in China

This divestment is a part of UCB’s evolving strategy in China, prioritizing innovation and strategic collaborations over maintaining mature product lines. Jean-Christophe Tellier, CEO of UCB, highlighted the company’s commitment to launching novel treatments in areas like immunology, neurology, and rare diseases in China. “Our dedication to serving patients with unmet needs in China remains steadfast,” Tellier stated, reflecting on UCB’s 28-year presence in the Chinese market and its continued focus on improving patient outcomes through partnerships and innovation.

Significance of the Transaction

The portfolio, which has been a reliable source of value and treatment for patients in China, generated approximately €131 million in net sales in 2023. This divestment will allow UCB to focus on growth areas, particularly in developing and launching new medicines. Meanwhile, CBC Group and Mubadala aim to scale the portfolio into a leading neurology entity in China, leveraging their healthcare expertise and investment strength.

Fu Wei, CEO of CBC Group, expressed enthusiasm about the acquisition, stating, “By leveraging CBC’s unique investor-operator approach, we are excited to channel our expertise, resources, and platform synergies to meet the evolving needs of the CNS market in China.” Mohamed Albadr, Head of China at Mubadala, echoed this sentiment, emphasizing the alignment of UCB’s clinical excellence with Mubadala’s commitment to enhancing healthcare access and growth.

Advisory Roles and Financial Impact

The deal, expected to close by the end of 2024 pending regulatory approvals, is supported by financial advisors Lazard and PJT Partners, and legal advisors Freshfields Bruckhaus Deringer and Clifford Chance. Although the transaction is not expected to impact UCB’s financial guidance for 2024, a slight dilution in the adjusted EBITDA margin is anticipated in 2025.

This strategic divestment underscores UCB’s intent to drive future growth through innovation and partnerships, reinforcing its position as a key player in the global biopharmaceutical landscape. As the company exits its mature segments in China, it paves the way for new product launches that could reshape its presence in this crucial market.

By focusing on innovation and strategic collaborations, UCB is positioning itself to maintain a competitive advantage in the global pharmaceutical industry, particularly in the highly significant Chinese market.