Paris (France), 28 July 2022 – Ipsen (Euronext: IPN; ADR: IPSEY), a global specialty-driven biopharmaceutical company, presents its financial results for the first half of 2022:
H1 2022 financial results
- Strong sales growth of 10.5% at CER1 (15.2% as reported)
- Core operating margin of 39.6%; IFRS operating margin of 35.7%
- Core consolidated net profit of €420m, growing by 19.9%. IFRS net profit up by 30.0% to €394m
- Solid cash-flow generation and strong balance sheet (€2m closing net debt)
- Agreement to acquire Epizyme, expanding Ipsen’s portfolio in oncology
- Completion of the divestment of Ipsen’s Consumer HealthCare business (CHC) to Mayoly Spindler
- Submission acceptance by U.S. FDA for New Drug Application (NDA) for palovarotene
Upgraded 2022 financial guidance
- Total-sales growth greater than 7.0% at CER1 (prior guidance: >2.0%)
- Core operating margin greater than 36.0% (prior guidance: >35.0%)
David Loew, Chief Executive Officer, commented:
“In the first half of the year, the continuing execution of our strategy yielded strong results. Our innovative brands delivered double-digit growth, while sales of Somatuline remained stable. By divesting our consumer healthcare business, we are focusing Ipsen on Specialty Care. The transaction with Epizyme will further enrich our portfolio and pipeline in oncology. I am pleased with the recent positive regulatory developments for palovarotene.
The ongoing positive momentum at Ipsen is reflected in today’s upgraded sales and margin guidance. While we recognize an increasingly competitive environment for Somatuline in Europe and the U.S., our innovative brands will continue to deliver strong growth. With patients at the core of our purpose, we are well on track to execute on our four-pillar strategy, including the maximization of our brands and the replenishment of our pipeline.”
Consumer HealthCare: completion of divestment
Ipsen today announces the closing of its agreement to divest its CHC business to Mayoly Spindler, with which it had entered into exclusive negotiations in February 2022. The consideration represents an enterprise value of €350m, including an earnout contingent payment of €50m.
The combination of Ipsen’s and Mayoly Spindler’s respective CHC businesses will create a global consumer-healthcare platform with a critical size and the capacity to support its growth. This was a major step forward in the Company’s execution of its strategic roadmap, presented in December 2020, towards building a more-focused Ipsen, centring on Specialty Care.
Review of results
In accordance with IFRS 5, the H1 2022 consolidated net profit and free cash flow resulting from the CHC business have been reclassified in separate line items: ‘Net profit/(loss) from discontinued operations’ in the profit and loss account and ‘Change in net cash/(debt) from discontinued operations’ in the cash-flow statement. The comparative figures for last year have been restated accordingly.
The performance of the CHC business is recorded within discontinued operations and, as such, all commentary on performance excludes the impact of CHC, unless stated otherwise.
Extract of half-year 2022 and 2021 condensed consolidated financial statements2:
– Total-sales growth in H1 2022 of 10.5% at CER3, or 15.2% as reported, to €1,433.7m, driven by double-digit growth of key medicines Cabometyx® (cabozantinib), Dysport® (botulinum toxin type A), Decapeptyl® (triptorelin) and Onivyde® (irinotecan), and stable sales of Somatuline® (lanreotide)
– Core operating income of €568.0m, an increase of 21.8%, reflecting the strong growth in total sales and other revenue and a moderate increase in operating costs; core operating margin of 39.6%, an increase of 2.1 percentage points
– Core consolidated net profit of €420.5m, growing by 19.9% in line with the increase in core operating income; core EPS4 (fully diluted) up by 20.4% to reach €5.06
– IFRS operating income of €511.2m, increasing by 27.9% after higher amortization of intangible assets and lower other operating expenses
– IFRS consolidated net profit of €394.3m, an increase of 30.0% driven by a lower effective tax rate. IFRS EPS4 (fully diluted) up by 8% to €4.74
– Free cash flow of €339.0m, an increase of 17.3%, reflecting higher operating cash flow, partly offset by an increase in income tax
– Reduction in net debt to €2.3m, driven by the strong free cash flow of the period, the dividend distribution and milestones paid related to business development
The Board of Directors approved the condensed consolidated financial statements on 27 July 2022. The Company’s auditors performed a limited review of the H1 2022 condensed consolidated financial statements. The interim financial report, with regards to the regulated information, is available on ipsen.com, under the Regulated Information tab in the Investor Relations section.
Full-year 2022 guidance
Ipsen has upgraded its financial guidance for FY 2022. Guidance assumes a closing of the Epizyme acquisition in Q3 2022 and excludes any contribution from the CHC business:
– Total-sales growth greater than 7.0%, at constant currency. Based on the average level of exchange rates in June 2022, an anticipated additional favorable impact on total sales of 5% from currencies
– Core operating margin greater than 36.0% of total sales, excluding any potential impact of incremental investments from future external-innovation transactions
This guidance incorporates expectations of an increasing adverse impact from competitive activity on Somatuline in Europe and the U.S.
In June 2022, Ipsen and Epizyme announced that they had entered into a definitive merger agreement under which Ipsen will acquire Epizyme, a fully integrated, commercial-stage biopharmaceutical company developing and delivering transformative therapies against novel epigenetic targets for cancer patients. The terms of the agreement include an offer to acquire all outstanding shares of Epizyme for $1.45 per share in cash at closing for an initial estimated consideration of around $247m, and a contingent-value right (CVR) of up to $1.00 per share, based on the success of Tazverik® (tazemetostat). The transaction is anticipated to close in the third quarter of 2022, subject to the satisfaction of all closing conditions.
In June 2022, Ipsen announced that the U.S. FDA had accepted for Priority Review its resubmitted NDA for investigational palovarotene for the treatment of patients with fibrodysplasia ossificans progressiva, an ultra-rare genetic disorder. The FDA has assigned 29 December 2022 as the Prescription Drug User Fee Act goal date.
Company Social Responsibility: Generation Ipsen
Ipsen has recently refocused its company social-responsibility strategy. The new Generation Ipsen identity centers on the four key pillars of Environment, Society represented by Patients and People, and Governance. Good progress was made in the first half of the year, including the examples below:
– Environment: a 20% year-on-year reduction in carbon emissions, reflecting the switch of European-based manufacturing and R&D to green electricity in April 2021, plus less gas being consumed at manufacturing sites, despite significant sales-volume growth
– Patients: a donation of €1.5m to The Red Cross and Tulipe (a pharmaceutical distributor managing donations from health companies to meet the emergency needs of populations in distress) and a donation of medicines to support patients in Ukraine
– People: 45% of the Global Leadership Team now represented by women
– Governance: renewal of ISO 37001 anti-bribery certification
A conference call and webcast for investors and analysts will begin today at 1.30pm Paris time. Participants can join the call by dialling +1 785 424 1102 or, for U.S. participants, 800-791-4813 toll-free; the passcode is 33569. A recording will be available on ipsen.com, while the webcast can be accessed here.
Ipsen intends to publish its year-to-date and third-quarter sales update on 27 October 2022.
All financial figures are in € millions (€m). The performance shown in this announcement covers the six-month period to 30 June 2022 (the first half or H1 2022) and the three-month period to 30 June 2022 (the second quarter or Q2 2022), compared to six-month period to 30 June 2021 (H1 2021) and the three-month period to 30 June 2021 (Q2 2021) respectively, unless stated otherwise. Commentary is based on the performance in H1 2022, unless stated otherwise.
Ipsen is a global, mid-sized biopharmaceutical company focused on transformative medicines in Oncology, Rare Disease and Neuroscience. With Specialty Care sales of €2.6bn in FY 2021, Ipsen sells medicines in over 100 countries. Alongside its external-innovation strategy, the Company’s research and development efforts are focused on its innovative and differentiated technological platforms located in the heart of leading biotechnological and life-science hubs: Paris-Saclay, France; Oxford, U.K.; Cambridge, U.S.; Shanghai, China. Ipsen has around 4,500 colleagues worldwide and is listed in Paris (Euronext: IPN) and in the U.S. through a Sponsored Level I American Depositary Receipt program (ADR: IPSEY). For more information, visit ipsen.com.
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- At constant exchange rates (CER), which exclude any foreign-exchange impact by recalculating the performance for the relevant period by applying the exchange rates used for the prior period.
- Extract of consolidated results. The Company’s auditors performed a limited review of the condensed consolidated financial statements.
- At CER, which excludes any foreign-exchange impact by recalculating the performance for the relevant period by applying the exchange rates used for the prior period.
- Earnings per share.