The last two posts on this blog detail how - for all practical purposes - UCB (the large Belgian pharmaceutical company) has lost the patent to one of its main drugs (Vimpat) and not told the market. See here and here.
EBIT is likely to fall 30-40 percent eventually. The company might dain one day to fill shareholders in on the details. The numbers are really not pretty but without proper company disclosure it is impossible to make an accurate estimate.
For almost two weeks I have expected the UCB to make a statement. But they have kept silent failing to disclose key information to the market.
The patent's death certificate was only sent by the United States Patent and Trademark office last Monday and there are different time-zones and languages to deal with. So I drafted the blog-posts gently, expecting a confirming press release along with accurate statement of prognosis from the company.
The patents death certificate is however almost certainly final. This is a clear statement of fact by the Patent Office against the patent. Appeals against patents are almost always on matters of law - and courts are reluctant to overturn fact-finders. All previous actions against this patent have been on law. A finding of fact against UCB is devastating.
This is not ordinary course of business patent litigation. In the ordinary course of business UCB has wound up in patent disputes with other companies (eg Mylan, Argentum). And those disputes have been where the assumption is that UCB has a valid patent.
This time it is in dispute with the US Government. And the US Government is stating there is no valid patent.
Ask other European companies how disputes with the US Government pan out.
Moreover the burden of proof has changed. UCB now has to get its patent approved under de-novo standards when the Patent Office has already rejected the patent.
Of course none of this seems to warrant any statement from UCB.
I am going to be blunt. Withholding a piece of information this significant from the market in the US would result in a fairly nasty SEC inquiry complete with subpoenas to determine who knew what and when. I have made relatively few investments in Belgium so I can't tell whether the Belgian regulatory standards are lower or the standards are just lower at UCB.
But standards are very low here.
In the US if a single insider has sold whilst in possession of this information (which was unreleased to the market) they could expect close investigation by Preet Bharara. I don't know what standards apply in Belgium.
As stated in previous postsI found the IR officers we met of very high integrity. But this has to extend higher than this. I think it has to rise to the level of Jean-Christophe Tellier - the well regarded CEO.
The Jean-Christophe Tellier was described in the press release announcing his appointment as playing "a key role in driving the growth of UCB’s three core medicines, Cimzia®, Vimpat® and Neupro®."
Presumably he knows that his strategy surrounding those drugs is dead. Presumably he is part of withholding that information from the market.
In the US his days as CEO would be numbered.
I can only presume that standards are lower in Belgium. But if UCB claims to have high standards Mr Tellier should be fired.