“We have started 2010 by adding a growth pillar to Ipsen through our innovative partnership with Inspiration Biopharmaceuticals in hematology, that further paves the way for our successful transition into a leading global biotechnology specialty care company.”
The Board of Directors of Ipsen (Paris: IPN), chaired by Jean-Luc Bélingard, met on 26 February 2010 to review the Group’s results for 2009, published today.
Commenting on performance in 2009, Jean-Luc Bélingard, Chairman and Chief Executive Officer of Ipsen said: “We believe the results published today confirm our profile as a profitable, global biotechnology specialty care company.” Jean-Luc Bélingard added: “In 2009, we have delivered on our objectives. On the regulatory front, we have obtained four approvals: Azzalure® in Europe, Dysport® in two indications in the US and Decapeptyl® 6-month formulation in Europe. On the business development front, we have signed a rich partnership with Menarini for Adenuric® and in-licensed Exforge® for its co-promotion in France from Novartis. On the commercial front, we have launched Dysport® and continued to support the penetration of Somatuline®, Increlex® and Apokyn® in the US. Last but not least, on a clinical perspective, 2009 has been exceptionally rich, with 4 programs moving into phase II/ III and taspoglutide confirming its potential best-in-class profile. Going forward, we will continue to progress this rich R&D pipeline while executing on our strategy, in place for many years now: developing our specialty care activities, notably by improving the efficiency of our R&D organization while optimizing the contribution of our presence in primary care.” Jean-Luc Bélingard concluded: “We have started 2010 by adding a growth pillar to Ipsen through our innovative partnership with Inspiration Biopharmaceuticals in hematology, that further paves the way for our successful transition into a leading global biotechnology specialty care company.”
Review of full year 2009 results
Group drug sales excluding foreign exchange impacts grew 7.6% year-on-year. – in line with the objective set a year ago to grow its sales by 7.0 to 9.0% year-on-year, fuelled notably by the performance of its North American platform. On June 5, 2008, the Group announced the creation of its fully fledged presence in North America, through the acquisitions of Tercica Inc. and the US operations of Vernalis Ltd, thereby significantly enhancing its international footprint and global specialty care drugs portfolio. Today, the Group markets 4 specialty care products in the US, and 3 of its flagship brands - Somatuline®, Increlex® and Dysport® - have become global. A year after taking full control of its US operations, Ipsen’s fully integrated North American commercial platform generated Increlex®, Somatuline®, and Apokyn® sales of $48.5 million, up more than 60% year-on-year on a comparable basis.
Consolidated Group sales reached €1,032.8 million for the full year 2009, up 6.8% year-on-year excluding foreign exchange impact.
Other revenues reached €79.6 million, up 18,6% year-on-year, benefiting from a non recurring income of €39.3 million following the settlement of a dispute with Bayer on a royalty stream which ended in 2009.
Total revenues reached €1,112.4 million, up 7.2% year-on-year.
On the commercial front – directly or with its partners, the Group has rigorously executed its strategy, with the launches of its botulinum toxin type A in therapeutic use in the US and aesthetic use in Europe and the US, and prepared for the launches of Decapeptyl® 6-month formulation and Adenuric® in Europe.
R&D expenses amounted to €197.3 million in 2009, representing 19.1% of sales, marked by the preparation of batches required to start OBI-1’s phase III, the integration of the industrial development functions of Tercica Inc. and costs related to the transfer of the production function of Increlex®, compared to €182.8 million in 2008, representing 18.8% of sales. Following the acquisitions made in 2008, Ipsen has significantly expanded its clinical development capabilities in the US, and is now developing key projects such as its BIM-23A760 and its GH + IGF-1 combination therapy on a worldwide basis. Furthermore, the Group has continued to progress its rich R&D pipeline while putting in place life cycle management initiatives to further feed its US franchise, notably with the phase III clinical trials in non-functioning and functioning NET for Somatuline® and adult and pediatric upper and lower limb spasticity for Dysport®.
The Group’s reported operating profit in 2009 amounted to €172.5 million, representing 16.7% of sales, compared to €179.2 million or 18.5% of sales a year earlier. Excluding the purchase price accounting impacts related to its acquisitions in North America, the Group’s adjusted operating income amounted to €183.6 million in 2009, representing 17.8% of sales, slightly above the objective of 17.0 to 17.5% set a year ago, compared with €181.4 million or 18.7% of sales in 2008.
The effective tax rate amounted to 6.3% of net profit from continuing activities before tax excluding the share of loss from associates compared to an effective tax rate of 17.4% a year earlier. Adjusting for non-recurring items recorded in 2009, the effective recurring tax rate for the Group amounted to 12.9%, compared with 18.9% in 2008.
The Group no longer records share of profit / loss in associates following its buyout of Tercica in October 2008, now fully consolidated in the Group’s accounts. This item represented an expense of €10.8 million in 2008, which corresponded to the first nine months of results for the company, the last quarter being fully consolidated in the Group’s accounts.
Consolidated net profit for 2009 amounted to €157.2 million (share attributable to shareholders of Ipsen S.A.: €156.6 million), up 6.9% compared to €147.1 million in 2008 (share attributable to shareholders of Ipsen S.A: €146.6 million). Ipsen’s Fully Diluted Earnings per share (attributable to shareholders of Ipsen S.A.) amounted to €1.86, up 6.9% year-on-year.
Net cash generated by operating activities grew sharply to €257.6 million compared with €203.7 million a year earlier. At 31 December 2009, the Group’s net cash position stood at €185.6 million, compared with €66.2 million as at December 31, 2008, therefore regaining its 2008 pre-North-American acquisition levels.
Total milestones received in cash by the Group but not yet recognized as revenues in its consolidated income statement amounted to €230.3 million at December 31, 2009, compared with €165.7 million a year earlier, mainly due to the recording of deferred revenues associated with the partnerships with Medicis (US$75.0 million), Galderma (€20.0 million) and Menarini (€20.0 million).
Dividend for the 2009 financial year proposed for the approval of Ipsen’s shareholders
Ipsen’s Board of Directors, confident in the Group’s future prospects and cash flow generation perspectives, has decided to propose payment of a dividend of €0.75 per share, up 7.1% year-on-year and representing a pay-out ratio of 40%, at Ipsen’s annual shareholders’ meeting to be held on may 28, 2010.
Elements of context for the coming years
For a number of years, Ipsen has continued to transition into a leading global biotechnology specialty care company, fuelled by its double-digit growing Specialty Care franchise. In the years to come, this trend will continue, notably driven by the expansion of its US platform, posting significant double-digit growth, the launch of Decapeptyl®’s 6-month formulation in Europe and the strong growth of its international markets.
In the framework of its strategy to develop Specialty Care, the Group has engaged into several partnerships, notably in the botulinum toxin space. These partnerships allow the Group to benefit from significant fast growing markets. Nevertheless, in the short term, the transition of its activities in aesthetics to its partners could negatively affect the Group’s reported sales growth.
Moreover, in the context of its strategy to optimize its Primary care presence, the Group now benefits from a fast growing international franchise, which should account for 50% of total primary Care sales in 2010, compared with 45% in 2009.
In the longer term, notably through its partnership with Inspiration Biopharmaceuticals, closed on January 22, 2010, the progresses of Oristusane (BN-83495), BIM-23A760 in phase II, GH + IGF-I combination therapy in phase III and of the preparation of the filing of taspoglutide, Ipsen will continue to manage dynamically its successful transition into a global biotechnology specialty care company.
Financial objectives for 2010 and beyond
On the basis of currently available information, the Group has set for itself the following objectives for 2010:
In the coming years, the Group’s sales and operating margin performance in North America should continue to increase, however given the evolution of the macroeconomic environment as well as of the Primary Care competitive landscape, the Group today cannot confirm its 2011 and 2012 perspectives, as announced in July 2008, or at least their timeframe.
The above objectives are set excluding any foreign exchange impacts.
Novel dual-target CAR T cell therapy shows promise in treating recurrent glioblastoma