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Ipsen Delivers Strong H1 2022 Results and Upgrades Its Full-Year Guidance

BusinessWire

PARIS–(BUSINESS WIRE)–Regulatory News:

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

Strategic roadmap

Upgraded 2022 financial guidance

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:

 

 

H1 2022

H1 2021

% change

 

€m

€m

Actual

CER3

 

 

 

 

 

 

Total Sales

 

1,433.7

1,244.5

15.2%

10.5%

Oncology

 

1,164.2

1,013.1

14.9%

10.0%

Neuroscience

 

246.9

205.8

20.0%

16.0%

Rare Disease

 

22.6

25.6

-11.9%

-13.9%

 

 

 

 

 

 

Core Operating Income

 

568.0

466.3

21.8%

 

Core operating margin

 

39.6%

37.5%

2.1% pts

 

Core Consolidated Net Profit

 

420.5

350.6

19.9%

 

Core EPS4 (fully diluted)

 

€5.06

€4.20

20.4%

 

 

 

 

 

 

 

IFRS Operating Income

 

511.2

399.7

27.9%

 

IFRS operating margin

 

35.7%

32.1%

3.5% pts

 

IFRS Consolidated Net Profit

 

394.3

303.3

30.0%

 

IFRS EPS4 (fully diluted)

 

€4.74

€3.63

30.8%

 

 

 

 

 

 

 

Free cash flow

 

339.0

289.1

17.3%

 

Closing net cash/(debt)

 

(2.3)

(336.5)

–

 

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:

This guidance incorporates expectations of an increasing adverse impact from competitive activity on Somatuline in Europe and the U.S.

Business development

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.

Pipeline update

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:

Conference call

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.

Calendar

Ipsen intends to publish its year-to-date and third-quarter sales update on 27 October 2022.

Notes

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

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.

Total sales by therapy area and medicine

 

H1 2022

H1 2021

% change

 

Q2 2022

Q2 2021

% change

 

€m

€m

Actual

CER5

 

€m

€m

Actual

CER5

 

 

 

 

 

 

 

 

 

 

 

Oncology

 

1,164.2

1,013.1

14.9%

10.0%

 

607.8

517.7

17.4%

11.0%

Somatuline

 

600.0

561.4

6.9%

1.1%

 

314.0

284.5

10.4%

2.9%

Decapeptyl

 

264.6

222.5

18.9%

15.9%

 

135.4

116.2

16.4%

13.1%

Cabometyx

 

212.2

166.8

27.2%

25.4%

 

113.3

83.6

35.6%

32.4%

Onivyde

 

83.2

57.8

44.0%

30.4%

 

43.1

31.3

37.7%

21.6%

Other Oncology

 

4.3

4.5

-5.9%

-6.5%

 

2.1

2.1

-2.9%

-3.4%

 

 

 

 

 

 

 

 

 

 

 

Neuroscience

 

246.9

205.8

20.0%

16.0%

 

126.7

102.7

23.5%

16.4%

Dysport

 

242.3

202.8

19.5%

15.5%

 

123.9

101.0

22.7%

15.9%

Other Neuroscience

 

4.6

3.0

53.1%

47.0%

 

2.8

1.7

67.4%

44.9%

 

 

 

 

 

 

 

 

 

 

 

Rare Disease

 

22.6

25.6

-11.9%

-13.9%

 

11.3

12.6

-10.2%

-12.8%

NutropinAq®

 

14.5

17.0

-14.9%

-15.1%

 

7.4

8.6

-14.0%

-14.2%

Increlex®

 

8.0

8.6

-7.0%

-12.6%

 

3.8

4.0

-4.7%

-12.1%

 

 

 

 

 

 

 

 

 

 

 

Total Sales

 

1,433.7

1,244.5

15.2%

10.5%

 

745.8

632.9

17.8%

11.4%

Oncology

Oncology sales of €1,164.2m in H1 2022 represented growth of 10.0%5 and comprised 81.2% of total sales (H1 2021: 81.4%).

  1. Somatuline sales increased by 1.1%5 to €600.0m. In North America, sales were stable, with volume growth supported by continued market-share gains, despite the entry of lanreotide competition. This was offset by adverse pricing driven by an increased level of commercial rebates and unfavorable movements in channel mix, as well as lower wholesaler inventories. In Europe6, sales declined by 4.0%5, reflecting effects from the launch of generic lanreotide in some markets including Germany, the Nordics and Spain, while sales in the Rest of the World grew by 33.7%5.
  2. Decapeptyl sales of €264.6m represented growth of 15.9%5, mainly driven by continued market-share gains in Europe, primarily in France and Italy, along with higher volumes in Russia and Korea. In China, sales continued to grow but were impacted by the ongoing effects of the COVID-19, as well as adverse pricing.
  3. Cabometyx sales reached €212.2m, up by 25.4%5, reflecting strong volume uptakes across most geographies, mainly in the second-line renal cell carcinoma indication, and by the launch of the first-line combination with nivolumab.
  4. Onivyde sales of €83.2m, growing by 30.4%5, were driven by market-share gains and favorable pricing in the U.S., as well as increased sales to Ipsen’s ex-U.S. partner.

Neuroscience

Neuroscience sales increased by 16.0%7 in H1 2022 to €246.9m and comprised 17.2% of total sales (H1 2021: 16.5%).

Dysport

Sales reached €242.3m, up by 15.5%7, driven by good volume uptakes in most therapeutics markets, and strong performances in the aesthetics market, including increased sales to Ipsen’s partner, Galderma, especially in North America.

Rare Disease

Rare Disease sales declined by 13.9%7 in H1 2022 to €22.6m and comprised 1.6% of total sales (H1 2021: 2.1%).

NutropinAq (somatropin) sales of €14.5m, a decline of 15.1%7, reflected competitive pressures in Europe. Increlex (mecasermin) sales of €8.0m, a decrease of 12.6%7, were impacted by lower demand in the U.S.

Total sales by geographical area

 

 

H1 2022

H1 2021

% change

 

Q2 2022

Q2 2021

% change

 

€m

€m

Actual

CER7

 

€m

€m

Actual

CER7

 

 

 

 

 

 

 

 

 

 

 

North America

 

479.4

403.0

18.9%

8.0%

 

253.0

196.1

29.0%

14.6%

Europe

 

623.6

589.8

5.7%

5.1%

 

318.9

301.0

6.0%

5.4%

Rest of the World

 

330.7

251.6

31.4%

27.1%

 

173.8

135.9

27.9%

20.0%

 

 

 

 

 

 

 

 

 

 

 

Total Sales

 

1,433.7

1,244.5

15.2%

10.5%

 

745.8

632.9

17.8%

11.4%

North America

Sales in H1 2022 reached €479.4m, representing growth of 8.0%7, driven by a continued strong performance from Dysport (in the therapeutics market and, in the aesthetics market, through Galderma) and from Onivyde, while Somatuline sales were stable. North America sales comprised 33.4% of total sales (H1 2021: 32.4%).

Europe

Sales in H1 2022 reached €623.6m, an increase of 5.1%7, mainly reflecting strong Cabometyx performances in France, Spain and Germany, and by Decapeptyl’s continued market-share uptakes. Following the launch of generic lanreotide in some European markets, Somatuline sales declined by 4.0%7, while Dysport sales in the aesthetics market were impacted by unfavorable supply phasing. Sales in Europe comprised 43.5% of total sales (H1 2021: 47.4%).

Rest of the World

Sales in H1 2022 reached €330.7m, an increase of 27.1%7, driven by solid volume growth in both Oncology and Neuroscience. The increase in Decapeptyl sales reflected market-share gains in Korea and Russia, and favorable shipment phasing in Algeria. The strong growth of Cabometyx was a result of market-share gains across a number of geographies. The performance also reflected good Somatuline sales in Japan and Russia. Rest of the World sales comprised 23.1% of total sales (H1 2021: 20.2%).

Comparison of core consolidated income statement

Core financial measures are performance indicators. A reconciliation between these indicators and IFRS aggregates is presented in Appendix 4, ‘Bridge from IFRS consolidated net profit to core consolidated net profit’.

 

 

H1 2022

H1 2021

% change

 

€m

% of
total sales

€m

% of
total sales

 

 

 

 

 

 

 

Total Sales

 

1,433.7

100.0%

1,244.5

100.0%

15.2%

Other revenue

 

64.2

4.5%

51.9

4.2%

23.8%

Total Revenue

 

1,497.9

104.5%

1,296.3

104.2%

15.6%

 

 

 

 

 

 

 

Cost of goods sold

 

(242.1)

(16.9)%

(203.5)

(16.4)%

18.9%

 

 

 

 

 

 

 

Selling expenses

 

(391.9)

(27.3)%

(334.4)

(26.9)%

17.2%

Research and development expenses

 

(207.2)

(14.5)%

(205.1)

(16.5)%

1.0%

General and administrative expenses

 

(95.4)

(6.7)%

(93.7)

(7.5)%

1.7%

 

 

 

 

 

 

 

Other core operating income

 

6.5

0.5%

7.0

0.6%

(7.0)%

Other core operating expenses

 

—

—

(0.4)

—

n.a.

 

 

 

 

 

 

 

Core Operating Income

 

568.0

39.6%

466.3

37.5%

21.8%

 

 

 

 

 

 

 

Net financing costs

 

(9.5)

(0.7)%

(11.3)

(0.9)%

(16.5)%

Core other financial income and expense

 

(15.4)

(1.1)%

(2.5)

(0.2)%

n.a.

Core income taxes

 

(122.0)

(8.5)%

(102.0)

(8.2)%

19.7%

Share of net profit/(loss) from equity-accounted companies

 

(0.5)

—

0.1

—

n.a.

 

 

 

 

 

 

 

Core Consolidated Net Profit

 

420.5

29.3%

350.6

28.2%

19.9%

– Attributable to Ipsen S.A. shareholders

 

420.5

29.3%

351.3

28.2%

19.7%

– Attributable to non-controlling interests

 

—

—

(0.7)

(0.1)%

n.a.

 

 

 

 

 

 

 

Core EPS8 Fully Diluted – attributable to Ipsen S.A. shareholders

 

€5.06

 

€4.20

 

20.4%

Total sales

Total sales in H1 2022 grew by 15.2% as reported to €1,433.7m, which included a positive impact from currencies of 4.7%.

Other revenue

Other revenue totaled €64.2m, an increase of 23.8%, mainly due to the growth in royalties received from partners, primarily Galderma for Dysport.

Cost of goods sold

Cost of goods sold of €242.1m represented 16.9% of total sales, an increase as a percentage of total sales of 0.5 percentage points (H1 2021: €203.5m, or 16.4%), mainly due to an unfavorable mix impact and an increase of royalties paid to Ipsen’s Cabometyx partner.

Selling expenses

Selling expenses of €391.9m (or 27.3% of total sales) increased by 17.2%, driven by commercial efforts deployed to support sales growth, post COVID-19 restrictions and the impact of foreign exchange, partly offset by the Company’s efficiency program. Selling expenses represented 27.3% of total sales, an increase of half a percentage point (H1 2021: €334.4m, or 26.9%).

Research and development expenses

Research and development expenses totaled €207.2m, representing growth of 1.0%, with lower investments in lifecycle management in Oncology for Onivyde and Cabometyx offset by increased investment in Neuroscience, notably for next-generation neurotoxins and for the investigational treatment, mesdopetam, and in Rare Disease for elafibranor in primary biliary cholangitis. Research and development expenses represented 14.5% of total sales, a decline of two percentage points (H1 2021: €205.1m, or 16.5%).

General and administrative expenses

General and administrative expenses increased by 1.7% to €95.4m. The ratio to total sales declined from 7.5% in H1 2021 to 6.7% in H1 2022.

Other core operating income and expenses

Other core operating income and expenses amounted to an income of €6.5m (H1 2021 income of €6.7m), primarily reflecting the impact of Ipsen’s currency-hedging policy.

Core operating income

Core operating income amounted to €568.0m, growing by 21.8%; the core operating margin reached 39.6% of total sales, an improvement of 2.1 percentage points (H1 2021: 37.5%).

Core net financing costs and other financial income and expense

Net financing costs amounted to €9.5m (H1 2021: €11.3m). Other core financial expenses amounted to €15.4m, driven by the revaluation of Onivyde’s earnout in U.S. dollars.

Core income taxes

Core income tax expense of €122.0m, an increase of 19.7%, reflected a core effective tax rate of 22.5% (H1 2021: 22.5%).

Core consolidated net profit

Core consolidated net profit increased by 19.9% to €420.5m, fully attributable to Ipsen S.A. shareholders (H1 2021: €350.6m).

Core EPS9

Core EPS (fully diluted) came to €5.06, representing growth of 20.4%.

From core financial measures to IFRS reported figures

 

H1 2022

H1 2021

 

€m

€m

 

 

 

 

Core Consolidated Net Profit

 

420.5

350.6

Amortization of intangible assets (excluding software)

 

(35.5)

(29.6)

Other operating income and expenses

 

1.5

(15.9)

Restructuring costs

 

(2.8)

(4.6)

Impairment losses

 

—

—

Net profit/(loss) from discontinued operations

 

12.1

10.0

Others

 

(1.5)

(7.2)

IFRS Consolidated Net Profit

 

394.3

303.3

 

 

 

 

IFRS EPS10 Fully Diluted – attributable to Ipsen S.A. shareholders

 

€4.74

€3.63

A full reconciliation between IFRS June 2021 / June 2022 results and core financial measures is presented in Appendix 4. The main reconciling items between core consolidated net income and IFRS consolidated net income were:

Amortization of intangible assets (excluding software)

Amortization of intangible assets (excluding software) amounted to €46.6m before tax, an increase of 19.9%, due to the amortization of additional Cabometyx intangible assets (H1 2021: €39.5m).

Other operating income and expenses

Other non-core operating expenses of €6.5m included costs related to Ipsen’s transformation programs, the CHC divestment and the discontinuation of a clinical trial, partly offset by the recognition of orphan-drug tax credits in the U.S. (H1 2021: expenses of €22.0m).

Restructuring costs

Restructuring expenses amounted to €3.7m before tax (H1 2021: expense of €5.2m).

Impairment losses

No impairment loss or gain was recognized in H1 2022 and in H1 2021.

Net profit/(loss) from discontinued operations

Net profit from discontinued operations corresponds to the contribution of the CHC business to net profit and amounted to €12.1m (H1 2021: €10.0m).

Others

Other financial income and expenses included financial income of €5.0m before tax, mainly due to the gain realized on equity investments disposal (H1 2021: expense of €2.6m from change in fair value in equity investments).

IFRS financial measures

Operating income

Operating income totaled €511.2m, representing growth of 27.9% (H1 2021: €399.7m).

Consolidated net profit

Consolidated net profit increased by 30.0% to €394.3m.

EPS11

Fully diluted EPS increased by 30.8% in H1 2022 to €4.74.

Net cash flow and financing

Ipsen declined by €124.1m in the half, bringing closing net debt to €2.3m.

 

H1 2022

H1 2021

€m

€m

 

 

 

Opening Cash/(Debt)

(126.43)

(525.26)

 

 

 

Core Operating Income

568.0

466.3

Non-cash items

33.9

66.0

Change in operating working-capital requirements

(87.1)

(67.6)

(Increase)/decrease in other working-capital requirements

24.6

(27.1)

Net capital expenditures (excluding milestones paid)

(68.0)

(52.3)

Dividends received from entities accounted for using the equity method

—

—

Operating Cash Flow

471.4

385.4

 

 

 

Other non-core operating income and expenses and restructuring costs

1.6

(19.3)

Financial income

(22.0)

(13.4)

Current income tax

(103.8)

(64.4)

Other operating cash flow

(8.2)

0.8

Free Cash Flow

339.0

289.1

 

 

 

Distributions paid

(100.2)

(83.1)

Net investments (business development and milestones)

(101.9)

8.8

Share buyback

(6.5)

(5.8)

FX on net indebtedness and change in earn-out

(10.8)

(22.4)

Change in net cash/(debt) from discontinued operations

6.1

1.3

Other

(1.6)

0.8

Shareholders Return and External-Growth Operations

(214.8)

(100.4)

 

 

 

CHANGE IN NET CASH/(DEBT)

124.1

188.7

 

 

Closing Net Cash/(Debt)12

(2.3)

(336.5)

Operating cash flow

Operating cash flow totaled €471.4m, an increase of €86.0m (+22.3%), driven by higher core operating income (an increase of €101.6m) and better other working-capital requirement change (€51.7m, reflecting the reimbursement in 2022 of tax refunds), partly offset by higher operating working-capital requirements (€19.5m mainly from higher trade receivables), higher capital expenditure (€15.7m, including projects to increase efficiency at industrial sites in the U.K., Ireland and France, as well as IT and digital projects) and lower other non-cash items from unrealized cash-flow hedging.

Free cash flow

Free cash flow grew by €49.9m to €339.0m (H1 2021: €289.1m) reflecting higher operating cash flow that was partly offset by an increase in income tax.

Shareholders’ return and external-growth operations

In the half, the distribution payout to Ipsen S.A. shareholders amounted to €99.3m, corresponding to a dividend per share of €1.20 (H1 2021: €82.9m, for a dividend of €1.00 per share).

Net investments of €101.9m mainly related to a Cabometyx commercial milestone for €88.2m paid to Exelixis, and an IPN60130 development milestone for €27.4m paid to Blueprint Medicines (H1 2021: positive impact for €8.8m mainly related to Onivyde’s commercial milestones received and to the proceeds from the divestment in equity-accounted companies, partly offset by additional milestone payments to Exelixis).

Contacts

Investors

Craig Marks
Vice President, Investor Relations

+44 (0)7584 349 193

Adrien Dupin de Saint-Cyr
Investor Relations Manager

+33 6 64 26 17 49

Media

Gwenan White
Executive Vice President, Communications and Public Affairs

+44 (0)7876 391 429

Ioana Piscociu
Senior Manager, Global Media Relations

+33 6 69 09 12 96

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