UCB Needs Clinical Success To Drive Upside

Not unlike Denmark's Lundbeck (OTCPK:HLUYY) (LUN.KO), which I own, Ipsen (OTCPK:IPSEY), and Almirall (OTC:LBTSF), UCB SA (OTCPK:UCBJY) (UCB.BR) is an interesting mid-cap European pharmaceutical company that gets relatively little attention from U.S. investors, even though UCB generates close to half of its revenue in the U.S. Part of the issue is likely the low liquidity of the ADRs, and I would suggest that investors who are considering UCB look at the European shares instead.

I think UCB's price today is interesting for investors who can take on higher-than-average risk. Unlike Lundbeck, which doesn't have an especially robust early-stage pipeline, UCB has numerous NMEs in trials, and clinical data read-outs in 2017 should help frame some of the long-term opportunity. What's more, the company is approaching the release of very significant Phase III data on romosozumab (or "romo") in osteoporosis and strong data on non-vertebral fractures could be a meaningful driver. Success with romo and those high-risk Phase II read-outs could drive another $5 to $8 per share in value.

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UCB Needs Clinical Success To Drive Upside