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With strong financial results, major advances in its R&D portfolio and four new launches in 2009 – including Dysport^® in the US – Ipsen strengthened its position as a global biopharmaceutical group throughout the year.

STRONG RESULTS

Since 2008, the economic and financial crisis has created a disruption in pharmaceutical markets, characterized by a deterioration of the creditworthiness of healthcare paying agencies and reimbursement systems. Under these conditions, the strong growth rates achieved by Ipsen’s drug sales, which reached 7.6% and 13.9% (excluding foreign exchange impacts) for the Group’s specialty care products, illustrate both the relevance of the Group’s positioning and the recognition of the quality of the therapeutic options it offers the medical profession. The strict financial management policy implemented in 2009 enabled the Group to generate adjusted operating income of e184 million (17.8% of sales), and net cash flow from operating activities of €258 million.

MAJOR ADVANCES IN THE R&D PORTFOLIO

With an R&D budget of close to €200 million in 2009, representing nearly 20% of sales, the Ipsen group continued to build its future in its targeted specialty care areas: oncology, endocrinology, neurology and now hematology, following the signing of a strategic partnership with Inspiration Biopharmaceuticals in the US in January 2010.

Several significant programs showed remarkable progress in 2009.

In oncology, Ipsen is developing BN 83495, the first oral inhibitor of the steroid sulfatase. In December 2009, highly promising phase I results were published regarding the efficiency of this agent in the treatment of hormone receptor positive breast cancer. The molecule is also in further clinical development for advanced endometrial cancer (phase II clinical study) and for castration-resistant prostate cancer (phase I in North America).

In endocrinology, Ipsen published encouraging interim results of a phase II trial evaluating the co-administration of recombinant human growth hormone and type 1 insulinmimetic recombinant human growth factor as a potential treatment for short stature in children. Ipsen also presented the results of phase I and phase IIa clinical studies for its BIM 23A760 molecule, a chimeric compound combining a somatostatin analog with a dopamine agonist developed for the treatment of acromegaly and neuroendocrine tumors. Lastly, phase III studies evaluating the effectiveness of Somatuline^® Depot^® in neuroendocrine tumors were initiated in the US.

Concurrently to its efforts to optimize the Group’s presence in primary care, Ipsen grew its specialty care franchise with the addition of a fourth pillar: hematology. The transaction with Inspiration Biopharmaceuticals enables the Group to create a world-class franchise in this field. With the acquisition of the exclusive license for OBI-1 – the recombinant porcine factor VIII developed by Ipsen – Inspiration now has, along with its own recombinant factor IX, IB1001, two recombinant proteins ready to enter phase III in 2010, and two compounds in earlier stages of development for the treatment of coagulation disorders. Under the terms of the agreement, Ipsen acquired an initial 29% stake in Inspiration’s capital (on a diluted basis), with the possibility of gradually raising its stake up to 47%.

In June 2010, Roche will present a review of the phase III clinical studies conducted on a GLP-1 analog, taspoglutide – a very promising anti-diabetic which stems from Ipsen’s research. The development of taspoglutide, which is endowed with specific structural characteristics that provide it with intrinsic sustained-release properties, illustrates Ipsen’s expertise in developing innovative formulations applied to therapeutic peptides and proteins.

FOUR DRUG LAUNCHES

The Group’s therapeutic offer was further strengthened by the launch of four drugs by Ipsen and its partners in 2009.

In April 2009, the FDA granted Dysport^®, Ipsen’s type A botulinum toxin, a marketing authorization for the US for its indications in neurology and esthetic medicine. Dysport^® is marketed by Medicis for esthetic use. The drug was launched in the US for both indications in 2009.

In Europe, under the name Azzalure^®, the same toxin obtained its first marketing approvals for use in the esthetic treatment of frown lines. Galderma, Ipsen’s partner in Europe for the marketing of this product, has already launched Azzalure^® in several countries. In addition, in October 2009, Ipsen and its partner Debiopharm announced the completion of the European decentralized procedure for Decapeptyl^® 6-month for the treatment of locally advanced or metastatic prostate cancer. The first product launches took place in February 2010.

Finally, in October 2009 Ipsen granted Menarini the rights for the development and marketing of Adenuric^® in Europe for the treatment of chronic hyperuricemia in gout patients. The first product launches in Europe took place in March 2010.

Thanks to its recent launches (Somatuline^® Depot^® in North America in 2008 and Increlex^® in Europe in 2008), Ipsen’s global drug portfolio is expanding across all of its targeted therapeutic areas.

A GLOBAL BIOPHARMACEUTICAL GROUP

In a world where scientific and medical knowledge is undergoing rapid change, Ipsen aims to strengthen its ability to discover, develop, register and market innovative treatments that provide true added value to physicians and patients. The permanent improvement of our R&D organization combined with the constant enhancement of our technological platforms in the engineering of peptides, proteins and steroids provide Ipsen with a strong competitive advantage in offering a coherent portfolio of specialty care products. The vitality of our alliances and partnerships is testimony to the international recognition of our expertise in the most advanced biological technologies.

As a result, in 2009, the strong growth of our biopharmaceutical operations allowed Ipsen to further expand the Group’s global footprint. I would like to take this opportunity to thank each and every Ipsen employee, without whom this performance would not have been possible, as well as the Board of Directors, whose trust and strategic vision are key to the Group’s long-term development.

Jean-Luc BÉLINGARD
Chairman and CEO