[March 03, 2015] |
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Ipsen's 2014 Results and 2015 Financial Objectives
Regulatory News:
The Board of Directors of Ipsen (Euronext: IPN; ADR: IPSEY), chaired by
Marc de Garidel, met on 2 March 2015 to review the Group's results for
2014, published today. The annual financial report, with regards to the
regulated information, will be available on the Group's website, www.ipsen.com,
Investor Relations section.
Extract from audited consolidated results for 2014 and 2013 restated2
(in million euros)
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2014
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2013 restated2
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% change
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Drug sales
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1 259.0
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1 191.3
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+7.4%3
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Sales
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1 274.8
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1 224.8
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+5.7%3
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Total revenues
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1 332.4
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1 281.8
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+4.0%
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Core operating profit
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260.6
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228.0
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+14.3%
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Core operating margin1
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20.4%
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18.6%
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-
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Operating profit
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221.4
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210.5
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+5.2%
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Operating margin
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17.4%
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17.2%
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-
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Consolidated net profit
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154.0
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153.1
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+0.6%
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Earnings per share - fully diluted (€)
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1.87
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1.83
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+2.2%
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Core consolidated net profit
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182.6
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153.7
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+18.8%
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Core EPS - fully diluted (€)
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2.22
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1.84
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+20.3%
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Weighted average number of shares:
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Outstanding
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82,093,561
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83,029,957
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Fully diluted
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82,220,289
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83,163,230
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-
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Commenting on the full year 2014 performance, Marc de Garidel,
Chairman and Chief Executive Officer of Ipsen, said: "In 2014,
Ipsen exhibits an improvement in all key performance indicators, with an
acceleration of sales growth and a core operating margin above
expectations, demonstrating continuous cost control. 2014 was marked by
major regulatory milestones for the Group with the US approval of
Somatuline® in GEP-NETs4
and the filing of Dysport® in adult upper limb
spasticity. Finally, we expanded our neurotoxin research and marketing
partnership with Galderma to now include the US territory". Marc
de Garidel added: "As a result of a good 2014 performance, we are
pleased to propose a 6% dividend increase to the general shareholders'
meeting. In 2015, we intend to continue to deliver sustained sales
growth and maintain a good level of operating margin, despite the
required investments to launch Somatuline® in
GEP-NETs in various geographies and prepare for tasquinimod in prostate
cancer, the phase 3 clinical results of which are expected in the second
quarter of 2015".
________________________ 1 In % of sales 2 For
purposes of comparison between the two financial years, the 2013 income
statement has been restated in accordance with IAS 19 revised (see
appendix 5) 3 Growth at constant currency 4
GEP-NET: Gastroenteropancreatic neuroendocrine tumor
Comparison of 2014 performance with financial objectives announced
for the period
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Financial objectives1
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Realized in 2014
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Specialty care sales
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[+9% ; +10%]2
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+9.9%2
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Primary care sales
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[-1% ; +1%]2
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+0.5%2
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Core operating marging
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Around 20.0% of sales
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20.4% of sales
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Highlights of the full year 2014 sales
In 2014, Group drug sales increased 7.4% excluding foreign
exchange impact or 5.7% at current exchange rate.
Consolidated Group sales reached €1,274.8 million in 2014, up
4.1% year-on-year and up 5.7% excluding foreign exchange impact.
Other revenues totaled €57.6 million, up 1.2% over the €57.0
million generated in 2013.
Total revenues reached €1,332.4 million, up 4.0% compared to 2013.
The cost of goods sold amounted to €310.0 million, representing
24.3% of sales, compared to €305.3 million representing 24.9% of sales
for the same period in 2013. The higher cost of goods sold was mainly
driven by the positive mix effect resulting from the 10% growth in
specialty care sale volumes. The cost of goods sold, however, benefited
from a change in the method of consolidation of the Swiss company
Linnea. The costs borne by Linnea are now consolidated using the equity
method3.
Research and development expenses reached €186.9 million,
representing 14.7% of sales, compared with 16.0% of sales a year
earlier. The year-on-year decline stemmed from the favorable impact of
research tax credits, with other research and development costs up
slightly. The main research and development projects undertaken in 2014
concerned Dysport® in spasticity and glabellar lines
indications with the liquid formulation (Dysport® Next
Generation), tasquinimod's phase II proof of concept and phase III
prostate cancer in China, Somatuline® and Dopastatin
(endocrinology).
Selling expenses totaled €464.1 million, representing 36.4% of
sales, up 4.8% versus 2013. The increase was driven by organic growth
and recruitment by the US affiliate of an oncology sales force to launch
Somatuline® Depot® (lanreotide) 120 mg Injection
in the treatment of gastrointestinal and pancreatic neuroendocrine
tumors (GEP NETs). The US Food and Drug Administration (FDA) approved
the treatment on 16 December 2014. The rise in selling expenses was
partially offset by the favorable tail-end impact from the primary care
sales forces restructuring in France and the Dysport® sales
force restructuring in the US, both carried out in 2013.
_________________________ 1 2014 revised financial
objectives communicated on 29 October 2014 2 Sales
growth excluding foreign exchange impact, calculated by applying the
average 2014 rates to the 31 December 2013 sales figures 3
In accordance with the norm IFRS11 « Partnerships » applicable since 1st
January 2014 on the accounting treatment of joint ventures
General and administrative expenses amounted to €111.2 million,
up 7.2%.
Core operating income amounted to €260.6 million, representing
20.4% of sales. The accelerated implementation of the Group's strategy,
in particular the transformation and the business unit organization,
triggered strong sales performance and led to tightly managed costs,
enabling the Group to improve its profitability by 1.8 percentage points
in 2014.
Restructuring costs reached €21.9 million. They correspond mainly
to costs incurred by the Group to accelerate the rollout of the
transformation project, such as measures to adapt support functions, to
continue the restructuring of R&D activities, and to restructure the
specialty care business model, as well as the costs incurred from
transferring the operations of US-based subsidiary Ipsen Bioscience Inc.
from Milford to Cambridge. At 31 December 2013, restructuring costs
totaled €0.2 million and were derived chiefly from the reversal of an
accrual related to the primary care restructuring plan in France, offset
by restructuring costs in the US.
An impairment loss of €8.0 million was recorded as a result of
the write-down of a Syntaxin Ltd. intangible asset, which has no impact
on ongoing studies. At 31 December 2013, the Group recognized an €11.6
million impairment loss on the Increlex® IGF-1 active
ingredient following supply interruptions in the market and uncertainty
over the date of resupply in the US. Ipsen also recognized a €1.0
million impairment loss following a decision by the Group not to
exercise its right to develop a neurology program.
Net financing costs showed expense of €3.0 million, compared to
income of €5.8 million a year earlier. The 2013 net income stemmed
mainly from a financial gain on the repayment of Debtor-in-Possession
(DIP)-type financing granted by Ipsen to Inspiration Biopharmaceuticals
Inc. at the end of 2012, following the sale of its hemophilia assets to
Baxter and Cangene.
Other financial expenses amounted to €12.0 million, a €2.8
million improvement over the prior year. The 2014 expense arose
primarily from a negative €10.1 million foreign exchange impact
resulting mainly from the sharp depreciation of the Russian ruble in the
fourth quarter of the year. In 2013, other financial expenses stemmed
primarily from a negative €11.2 million foreign exchange impact and €2.0
million in write-down on convertible bonds subscribed by the Group to
develop a neurology program.
The effective tax rate amounted to 26.1% of pre-tax profit from
continuing operations, compared with an effective rate of 29.4% a year
earlier. The Group benefitted from the favorable outcome of a number of
tax audits ended in 2014. Furthermore, the effective tax rate benefitted
from a decline in non-deductible spending from 2013 to 2014.
Profit from continuing operations came to €154.5 million, up 8.6%
from €142.2 million at 31 December 2013.
Net loss from discontinued operations totaled €0.5 million. It
included the rebilling of production costs for OBI-1 clinical samples to
Baxter. At 31 December 2013, net profit from discontinued operations
totaled €10.9 million. That result stemmed primarily from the rebilling
of production costs for OBI-1 clinical samples to Baxter, prior to the
effective transfer of the production site and personnel, as well as from
the negotiated repayment of advisory fees paid by Ipsen during the joint
asset-sale process with Inspiration Biopharmaceuticals Inc., and the tax
impact related to the compensation paid by the Group to the US
subsidiary that sold the assets.
Consolidated net profit came to €154.0 million (€153.5 million
attributable to Ipsen S.A. shareholders), relatively flat against €153.1
million (€152.5 million attributable to Ipsen S.A shareholders) at 31
December 2013.
Core net profit amounted to 182.6 million euros, sharply up
compared to the 153.7 million euros recorded at 31 December 2013.
Net cash flow from operating activities amounted to 246.2 million
euros, up 64.8 million euros year-on-year. At 31 December 2014, closing
cash and cash equivalents reached 180.1 million euros, compared to
cash and cash equivalents of 125.4 million euros in 2013.
Dividend for the 2014 financial year proposed
for the approval of Ipsen's shareholders
Ipsen S.A. Board of Directors, which met on 2 March 2015, has decided to
propose at Ipsen's annual shareholders' meeting to be held on 27 May
2015 the payment of a dividend of €0.85 per share, up €0.05
year-on-year, representing a pay-out ratio of approximately 45% of
consolidated net profit (attributable to the Group's shareholders),
compared to a pay-out ratio of approximately 44% for the 2013 financial
year.
Update on European regulatory review for
Somatuline®
Autogel®
in gastroenteropancreatic neuroendocrine tumors (GEP NETs)
After the approval granted by the U.S. Food and Drug Administration
(FDA) in December 2014, the EU procedure recommended granting a new
indication for the treatment of gastroenteropancreatic neuroendocrine
tumors (GEP NETs) for Somatuline® Autogel®
(lanreotide) 120mg Injection in 25 countries of the European Union. The
decision will be implemented by the competent authority in each of these
countries. The first approval was granted in the UK on 27 February 2015.
2015 financial objectives
Based on information currently available, the Group has set the
following financial targets for 2015:
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Specialty Care drug sales growth year-on-year between 8.0%
and 10.0%;
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Primary Care drug sales decline year-on-year between -3.0%
and 0.0%;
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Core operating income between 19.0% and 20.0% of sales,
excluding any major further deterioration of the economic environment
in Russia.
Sales objectives are set at constant currency and, from 2015 onwards,
the drug-related sales (active substances and raw materials) will be
recorded in the Primary Care sales line.
Press conference (in French)
Ipsen will host a press conference on Tuesday 3 March 2015 at 9:00 a.m.
(Paris time, GMT +1) at Pavillon Kléber - 7 rue Cimarosa - 75116 Paris
(France).
Meeting, webcast and Conference Call (in English) for the financial
community
Ipsen will host an analyst meeting on Tuesday 3 March 2015 at 14:30 p.m.
(Paris time, GMT+1) at its headquarters in Boulogne-Billancourt
(France). A web conference (audio and video webcast) and conference call
will take place simultaneously. The web conference will be available at www.ipsen.com.
Participants in the conference call should dial in approximately 5 to 10
minutes prior to its start. No reservation is required to participate.
The reference for the conference is ID 951405. No access code is
required. Phone numbers to call in order to connect to the conference
are: from France and continental Europe +33 (0)17 0993 209, from UK +44
(0)207 1312 711 and from the United States +1 646 461 1757. A recording
will be available shortly after the call. Phone numbers to access the
replay of the conference are: from France and continental Europe +33
(0)1 70 99 35 29, from UK +44 (0)20 7031 4064 and from the United States
+1 954 334 0342 and access code is 951405. This replay will be available
for one week following the meeting.
About Ipsen
Ipsen is a global specialty-driven pharmaceutical company with total
sales exceeding €1.2 billion in 2014. Ipsen's ambition is to become a
leader in specialty healthcare solutions for targeted debilitating
diseases. Its development strategy is supported by 3 franchises:
neurology, endocrinology and urology-oncology. Moreover, the Group has
an active policy of partnerships. Ipsen's R&D is focused on its
innovative and differentiated technological platforms, peptides and
toxins. In 2014, R&D expenditure totaled close to €187 million,
representing about 15% of Group sales. Moreover, Ipsen also has a
significant presence in primary care. The Group has more than 4,500
employees worldwide. Ipsen's shares are traded on segment A of Euronext
Paris (stock code: IPN, ISIN code: FR0010259150) and eligible to the
"Service de Règlement Différé" ("SRD"). The Group is part of the SBF 120
index. Ipsen has implemented a Sponsored Level I American Depositary
Receipt (ADR) program, which trade on the over-the-counter market in the
United States under the symbol IPSEY. For more information on Ipsen,
visit www.ipsen.com.
Forward Looking Statement
The forward-looking statements, objectives and targets contained herein
are based on the Group's management strategy, current views and
assumptions. Such statements involve known and unknown risks and
uncertainties that may cause actual results, performance or events to
differ materially from those anticipated herein. All of the above risks
could affect the Group's future ability to achieve its financial
targets, which were set assuming reasonable macroeconomic conditions
based on the information available today. Use of the words "believes,"
"anticipates" and "expects" and similar expressions are intended to
identify forward-looking statements, including the Group's expectations
regarding future events, including regulatory filings and
determinations. Moreover, the targets described in this document were
prepared without taking into account external growth assumptions and
potential future acquisitions, which may alter these parameters. These
objectives are based on data and assumptions regarded as reasonable by
the Group. These targets depend on conditions or facts likely to happen
in the future, and not exclusively on historical data. Actual results
may depart significantly from these targets given the occurrence of
certain risks and uncertainties, notably the fact that a promising
product in early development phase or clinical trial may end up never
being launched on the market or reaching its commercial targets, notably
for regulatory or competition reasons. The Group must face or might face
competition from generic products that might translate into a loss of
market share. Furthermore, the Research and Development process involves
several stages each of which involves the substantial risk that the
Group may fail to achieve its objectives and be forced to abandon its
efforts with regards to a product in which it has invested significant
sums. Therefore, the Group cannot be certain that favourable results
obtained during pre-clinical trials will be confirmed subsequently
during clinical trials, or that the results of clinical trials will be
sufficient to demonstrate the safe and effective nature of the product
concerned. There can be no guarantees a product will receive the
necessary regulatory approvals or that the product will prove to be
commercially successful. If underlying assumptions prove inaccurate or
risks or uncertainties materialize, actual results may differ materially
from those set forth in the forward-looking statements. Other risks and
uncertainties include but are not limited to, general industry
conditions and competition; general economic factors, including interest
rate and currency exchange rate fluctuations; the impact of
pharmaceutical industry regulation and health care legislation; global
trends toward health care cost containment; technological advances, new
products and patents attained by competitors; challenges inherent in new
product development, including obtaining regulatory approval; the
Group's ability to accurately predict future market conditions;
manufacturing difficulties or delays; financial instability of
international economies and sovereign risk; dependence on the
effectiveness of the Group's patents and other protections for
innovative products; and the exposure to litigation, including patent
litigation, and/or regulatory actions. The Group also depends on third
parties to develop and market some of its products which could
potentially generate substantial royalties; these partners could behave
in such ways which could cause damage to the Group's activities and
financial results. The Group cannot be certain that its partners will
fulfil their obligations. It might be unable to obtain any benefit from
those agreements. A default by any of the Group's partners could
generate lower revenues than expected. Such situations could have a
negative impact on the Group's business, financial position or
performance. The Group expressly disclaims any obligation or undertaking
to update or revise any forward looking statements, targets or estimates
contained in this press release to reflect any change in events,
conditions, assumptions or circumstances on which any such statements
are based, unless so required by applicable law. The Group's business is
subject to the risk factors outlined in its registration documents filed
with the French Autorité des Marchés Financiers.
RISK FACTORS
The Group operates in an environment which is undergoing rapid change
and exposes its operations to a number of risks, some of which are
outside its control. The risks and uncertainties set out below are not
exhaustive and the reader is advised to refer to the Group's 2013
Registration Document available on its website (www.ipsen.com).
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The Group is faced with uncertainty in relation to the prices set for
all its products, in so far as medication prices have come under
severe pressure over the last few years as a result of various
factors, including the tendency for governments and payers to reduce
prices or reimbursement rates for certain drugs marketed by the Group
in the countries in which it operates, or even to remove those drugs
from lists of reimbursable drugs.
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The Group depends on third parties to develop and market some of its
products, which generates or may generate substantial royalties for
the Group, but these third parties could behave in ways that cause
damage to the Group's business. The Group cannot be certain that its
partners will fulfill their obligations. It might be unable to obtain
any benefit from those agreements. A default by any of the Group's
partners could generate lower revenues than expected. Such situations
could have a negative impact on the Group's business, financial
position or performance.
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Actual results may depart significantly from the objectives given that
a new product can appear to be promising at a development stage, or
after clinical trials, but never be launched on the market, or be
launched on the market but fail to sell, notably for regulatory or
competitive reasons.
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The Research and Development process typically lasts between eight and
twelve years from the date of discovery to a product being brought to
market. This process involves several stages; at each stage, there is
a substantial risk that the Group could fail to achieve its objectives
and be forced to abandon its efforts in respect of products in which
it has invested significant amounts. Thus, in order to develop viable
products from a commercial point of view, the Group must demonstrate,
by means of pre-clinical and clinical trials, that the molecules in
question are effective and are not harmful to humans. The Group cannot
be certain that favorable results obtained during pre-clinical trials
will subsequently be confirmed during clinical trials, or that the
results of clinical trials will be sufficient to demonstrate the
safety and efficacy of the product in question such that the required
marketing approvals can be obtained.
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The Group must deal with or may have to deal with competition (i) from
generic products, particularly in relation to Group products which are
not protected by patents, such as Forlax® and Smecta®
(ii), products which, although they are not strictly identical to the
Group's products or which have not demonstrated their bioequivalence,
may obtain a marketing authorization for indications similar to those
of the Group's products pursuant to the bibliographic reference
regulatory procedure (well established medicinal use) before the
patents protecting its products expire. Such a situation could result
in the Group losing market share which could affect its current level
of growth in sales or profitability.
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Third parties might claim the benefit of intellectual property rights
with respect to the Group's inventions. The Group provides the third
parties with which it collaborates (including universities and other
public or private entities) with information and data in various forms
relating to the research, development, manufacturing and marketing of
its products. Despite the precautions taken by the Group with regard
to these entities, in particular of a contractual nature, they (or
certain of their members or affiliates) could claim ownership of
intellectual property rights arising from the trials carried out by
their employees or any other intellectual property right relating to
the Group's products or molecules in development.
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The Group's strategy includes acquiring companies or assets which may
enable or facilitate access to new markets, research projects or
geographical regions or enable the Group to realize synergies with its
existing businesses. Should the growth prospects or earnings potential
of such assets as well as valuation assumptions change materially from
initial assumptions, the Group might be under the obligation to adjust
the values of these assets in its balance sheet, thereby negatively
impacting its results and financial situation.
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The marketing of certain products by the Group has been and could be
affected by supply shortages and other disruptions. Such difficulties
may be of both a regulatory nature (the need to correct certain
technical problems in order to bring production sites into compliance
with applicable regulations) and a technical nature (difficulties in
obtaining supplies of satisfactory quality or difficulties in
manufacturing active ingredients or drugs complying with their
technical specifications on a sufficiently reliable and uniform
basis). This situation may result in inventory shortages and/or in a
significant reduction in the sales of one or more products. More
specifically, in their US Hopkinton facility, Lonza, our supplier of
IGF-1 (Increlex® drug substance), experienced manufacturing
issues with Increlex® which led in 2013 to supply
interruption in the US, Europe and the rest of the world.
Consultations with the National competent authorities of the European
Union have allowed a resupply in Europe early 2014. In the United
States, Ipsen has released a first batch of Increlex®'s
active ingredient on 2 June 2014 and a second one in September 2014.
Ipsen anticipates that additional lots will be released in the coming
months, as the company continues to work closely with the FDA to make
additional Increlex® lots available as soon as possible.
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In certain countries exposed to significant public deficits, and where
the Group sells its drugs directly to public hospitals, the Group
could face discount or lengthened payment terms or difficulties in
recovering its receivables in full. The Group closely monitors the
evolution of the situation in Southern Europe where hospital payment
terms are especially long. More generally, the Group may also be
unable to purchase sufficient credit insurance to protect itself
adequately against the risk of payment default from certain customers
worldwide. Such situations could negatively impact the Group's
activities, financial situation and results.
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In the normal course of business, the Group is or may be involved in
legal or administrative proceedings. Financial claims are or may be
brought against the Group in connection with some of these proceedings.
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The cash pooling arrangements for foreign subsidiaries outside the
euro zone expose the Group to financial foreign exchange risk. The
variation of these exchange rates may impact significantly the Group's
results.
MAJOR DEVELOPMENTS
During 2014, major developments included:
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On 10 January 2014 - Ipsen announced the appointment of
Jonathan Barnsley as Executive Vice President in charge of Technical
Operations. He is a member of the Executive Committee of the Ipsen
group. He took up his new position on April 1st, 2014,
reporting directly to Christel Bories, Deputy CEO of the Ipsen group.
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On 14 January 2014 - Ipsen and GW Pharmaceuticals plc announced
that they have entered into an exclusive agreement for Ipsen to
promote and distribute Sativex®, a sublingual cannabis
extract spray intended for the treatment of spasticity due to multiple
sclerosis in Latin America (excluding Mexico and the Islands of the
Caribbean). GW will be responsible for commercial product supply to
Ipsen. GW Pharmaceuticals and Ipsen aim to start regulatory filings in
selected countries in Latin America during 2014 for the multiple
sclerosis spasticity indication.
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On 14 January 2014 - Ipsen announced its decision to set up its
own oncology team to commercialize Somatuline® Depot®
(lanreotide) 120 mg Injection (« Somatuline® ») in
neuroendocrine tumors in the US. Over the past few months, the Group
had been considering both a "go-it-alone" and a partnership strategy
following the communication of the data from the investigational
CLARINET® phase III clinical study evaluating the
antiproliferative effect of Somatuline® in the treatment of
non-functioning gastrointestinal & pancreatic NETs (GEP NETs). Ipsen
expects that these encouraging results will support a key long-term
opportunity for the Group to access an US addressable market in excess
of $500 million1. Ipsen considers success in the US
as a strategic priority. The "go-it-alone" option maximizes long term
value creation and helps the US affiliate in reaching critical mass.
Ipsen anticipates filing a Supplemental New Drug Application seeking
an indication for Somatuline® in NETs in the first half of
2014. Maximum incremental annual cost associated with the launch of
Somatuline® in the NET indication in the US is expected to
range from €30 million to €40 million. As a result, US breakeven2,
initially expected in 2014, is postponed to 2017. Ipsen will continue
to implement cost containment initiatives to minimize impact on
overall Group profitability.
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On 17 January 2014 - Ipsen announced at ASCO GI that ELECT®
clinical trial of Somatuline® in the control of symptoms in
GEP-NET patients with carcinoid syndrome met its primary endpoint.
Results of the ELECT® phase III study (poster 268) showed
that treatment with Somatuline® 120 mg versus placebo
resulted in a statistically significant reduction in the number of
days in which immediate release octreotide was used as rescue
medication, representing a mean difference of -14.8% (95%CI: -26.8,
-2.8; p = 0.017). Somatuline® significantly improved the
rates of complete/partial treatment success versus placebo (odds ratio
= 2.4; 95%CI: 1.1, 5.3; p = 0.036).
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On 22 January 2014 - Ipsen announced the implementation of new
governance in the United States, following its recently announced
decision to launch Somatuline® for oncology indications.
Marc de Garidel will personally oversee this projected launch. Cynthia
Schwalm will join Ipsen's US Operations to head up the
Endocrinology/Oncology Business Unit as of 3 February, 2014. As of
mid-August 2014, she will take over as General Manager of the US
commercial affiliate.
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On 5 February 2014 - Ipsen announced the results of the
international Phase III clinical trial of Dysport® Next
Generation (DNG) in cervical dystonia and the results of the European
Phase II clinical trial of DNG in glabellar lines. In the light of
these results, Ipsen announces its intention to file the first
ready-to-use liquid toxin A in Europe and in the Rest of the World3
(ROW). DNG was clinically and statistically superior to placebo in the
cervical dystonia Phase III study at the dose of 500 units at week 4
after single dose (adjusted mean reduction of 12.5 with DNG versus 3.9
with placebo as assessed by the Toronto Western Spasmodic Torticollis
Rating Scale, or TWSTRS, total score). When compared to Dysport®,
DNG did not demonstrate the statistical non-inferiority in efficacy at
week 4 (adjusted mean reduction of 12.5 with DNG versus 14.0 with
Dysport® in TWSTRS total score). This efficacy difference
is unlikely to be of clinical relevance. After repeated dose, DNG
showed comparable efficacy to that of Dysport® as observed
in former Phase III studies4. DNG was clinically and
statistically superior to placebo and comparable to Dysport®
in the glabellar lines Phase II study at the dose of 50 units after
single dose. Across the studies, DNG showed safety profiles consistent
with the known safety profile of Dysport®. Regarding DNG
stability, analysis is still ongoing. The stability data trends are
positive, providing confidence of achieving a commercially viable
product. Ipsen is continuing stability testing to establish maximum
shelf life across full product range. On the basis of these results
and feedback from the Principal Investigator of the Phase III study,
Ipsen intends to initiate a dialog with key agencies on the regulatory
approach to file the first ready-to-use liquid toxin A in Europe and
ROW1.
_______________________ 1 Ipsen 2013 estimates of US NET
market 2 Commercial contribution excluding Increlex®
(mecasermin [rDNA origin]) Injection sales and revenues from US
collaboration withGalderma in aesthetic medicine 3 Latin
America, Middle East and Asia (excl. China and Japan) 4
Truong D. et al. Mov. Disord., 2005; 20 (7) 783-791; Truong et al.,
Parkinsonism Relat Disord. 2010 Jun;16(5):316-23
-
On 7 February 2014 - Ipsen announced that the phase III
clinical trial evaluating Decapeptyl® (triptorelin pamoate)
11.25 mg administered subcutaneously in patients with locally advanced
or metastatic prostate cancer has met its primary endpoints. The full
study results will be presented this year during a medical congress.
Based on these results, Ipsen intends to apply for the addition of the
subcutaneous route, alongside the intramuscular route, to the label of
triptorelin pamoate 11.25 mg.
-
On 18 March 2014 - Ipsen announced positive results from its
phase IIa clinical trial assessing Dysport® in the
treatment of Neurogenic Detrusor Overactivity (NDO) in patients with
urinary incontinence not adequately managed by anticholinergics.
Results show that treatment with Dysport® was associated
with a mean reduction from baseline of urinary incontinence episodes
greater than 75%, 12 weeks after the injection, regardless of how the
drug is administered. These results were achieved with a single dose
of Dysport® 750 Units injected in either 15 or 30 sites in
the detrusor muscle. Efficacy was confirmed by improvement in
urodynamic parameters and quality of life. The safety profile observed
in the study is consistent with the safety profile expected in this
indication.
-
On 20 March 2014 - Ipsen announced that Mayroy, its controlling
shareholder, had completed an institutional private placement of 5 888
290 shares representing c.7% of Ipsen's share capital, at a price of
€29.50 per share. As part of this transaction, Ipsen purchased 842 542
of its own shares (representing 1% of its share capital) to be
cancelled.Ipsen has been informed that the proceeds of this sale will
be used to partially finance the repurchase by Mayroy of the entire
stake held in its share capital by its minority shareholder, Opera
Finance Europe, a Luxembourg-registered company controlled by Mrs
Véronique Beaufour. Opera Finance Europe and its stakeholders do not
sit on the Board of Directors of Ipsen and play no active role in the
management of the Group. The repurchase of the balance of the stake of
Opera Finance Europe will be financed by the delivery by Mayroy of
Ipsen shares representing c.4% of Ipsen share capital. These shares
will be placed into an escrow account for a period of 12 months
following completion of the transaction.
As a result of
this transaction, Ipsen's free-float increases to c.40%2
from c.30%. Mayroy's stake in Ipsen's share capital and voting rights
now amounts to c.57.6%3 and c.73.3%3
respectively. The indirect stake held by Beech Tree (controlling
shareholder of Mayroy) in Ipsen has slightly increased. Ipsen has also
been informed that the shareholders' agreement between Beech Tree, its
subsidiaries and the Schwabe family, which was entered into on
December 31, 2008 in order to preserve the stability of Mayroy's
controlling share ownership structure, has been renewed until 30 June
2015.
-
On 9 April 2014 - Ipsen confirmed its eligibility for the
PEA-PME scheme, in accordance with the French decree n° 2014-283 of 4
March 2014. The Group complies with the thresholds set by the
legislator for eligibility to the PEA-PME scheme, namely having less
than 5,000 employees and total revenue below €1,500 million or total
assets below €2,000 million. As a consequence, investment in company
shares can be made through PEA-PME accounts, benefiting from the same
tax advantages as the traditional Equity Savings Plan (PEA). Ipsen was
included by Euronext in the CAC® PME index.
-
On 12 April 2014 - Ipsen announced that a first set of results
on phase III clinical study of Dysport® in the treatment of
adults suffering from Upper Limb Spasticity was presented on Saturday,
April 12th, at the 8th World Congress for
NeuroRehabilitation in Istanbul (Turkey). Four weeks after Dysport®
injection, the Phase III clinical study results demonstrated that:
-
Patients treated with Dysport® showed a statistically
significantly (p<0.0001) higher proportion of responders in muscle
tone improvement versus placebo (i.e. exhibiting =1 point
improvement as measured by the Modified Ashworth Scale, MAS). At
week 4, patients treated with Dysport® 500 units and
1000 units showed responding rates of 73.8% and 78.5%,
respectively, compared to 22.8% in the placebo arm;
-
Patients treated with Dysport® showed a statistically
significantly (p<0.0001) higher clinical benefit versus placebo,
as measured by the Physician Global Assessment (PGA). At week 4,
the mean PGA score for patients treated with Dysport®
500 units and 1000 units were 1.4 and 1.8, respectively, compared
to 0.6 in the placebo arm.
-
Additionally, patients treated with Dysport® showed a
higher proportion of responders from baseline in improved passive
function versus placebo (exhibiting =1 grade decrease as measured
by the disability assessment scale). At week 4, patients treated
with Dysport® 1000 units showed a statistically
significant response rate of 62%. Patients treated with Dysport®
500 units showed a clinically relevant response rate of 50%.
Placebo arm showed a 39% response rate.
_________________________ 1 Latin America, Middle East
and Asia (excl. China and Japan) 2 Calculation taking
into account the placement aforementioned, the cancellation of the Ipsen
shares purchased as part of this transaction, and the cancellation of
the 800 000 shares purchased as part of the program announced on 6
November 2013
-
On 13 May 2014 - Ipsen announced that a supply of Increlex®
will be available in the U.S. starting 2 June 2014. In collaboration
with the FDA (Food and Drug Administration), Ipsen is releasing one
batch of Increlex®'s active ingredient. Ipsen anticipates
that additional lots will be released in the coming months, as the
company continues to work closely with the FDA to make additional
Increlex® lots available as soon as possible.
-
On 1 July 2014 - Ipsen announced that it has submitted a
Supplemental New Drug Application to the U.S. Food and Drug
Administration (FDA) for Somatuline® Depot®
120mg injection for the treatment of gastroenteropancreatic
neuroendocrine tumors (GEP-NETs). In the European Union, Ipsen has
submitted national marketing authorization variations for Somatuline®
Autogel® 120mg injection to the drug regulatory authorities
in 25 countries of the European Union. Following EU and US
submissions, Ipsen intends to implement worldwide submission roll-out.
-
On 11 July 2014 - Ipsen and Galderma, a global healthcare
company focused on dermatology and skin health, announced that they
have significantly expanded the scope of their neurotoxin partnership.
Under the terms of the agreement, the Dysport® distribution
rights in the US and Canada, held originally by Valeant, have been
included in the partnership between Ipsen and Galderma for the
distribution of Dysport®/Azzalure® in aesthetic
and dermatology indications. This partnership now covers the US,
Canada, Brazil and Europe1 for a period extending to 2036.
As part of this renegotiated agreement, Galderma will pay €25 million
to Ipsen and benefit from improved margins in those territories. Ipsen
will manufacture and supply the finished product to Galderma and
receive royalties from Galderma. In addition, the companies will
increase the scope of their R&D collaboration through which each
company will benefit from the other party's research compounds within
its respective and exclusive areas of focus. In this regard, Ipsen
will gain control of the intellectual property for Galderma's liquid
toxin in the US, Canada, Brazil and Europe1 in exchange for
a €10 million payment, while Galderma retains commercialization rights.
-
On 17 July 2014 - Ipsen announced that the New England Journal
of Medicine has published clinical trial results showing that
Somatuline® Autogel® / Somatuline®
Depot® (lanreotide) Injection 120 mg (referred to as
Somatuline®) achieved statistically significant
prolongation of progression free survival over placebo in patients
with metastatic gastroenteropancreatic neuroendocrine tumors
(GEP-NETs). CLARINET®, an investigational phase III
randomized, double-blind, placebo-controlled study of the
antiproliferative effects of Somatuline® was conducted in
48 centers across 14 countries. The article titled "Lanreotide in
Metastatic Enteropancreatic Neuroendocrine Tumors" is available online
at NEJM.org and has been published in the July 17th edition
(N. Engl. J. Med. 2014; 371: 224-233). The data gathered from 204
GEP-NET patients over the 96-week study showed that placebo-treated
patients had a median PFS of 18.0 months and 33.0% had not progressed
or died at 96 weeks, whereas the median PFS for Somatuline® treated
patients was not reached and 65.1% had not progressed or died at 96
weeks (stratified logrank test, p<0.001). This represented a 53%
reduction in risk of disease progression or death based on a hazard
ratio of 0.47 (95% CI: 0.30-0.73). These statistically and clinically
significant antiproliferative effects of Somatuline® were
observed in a large population of patients with grade G1 or G2 (World
Health Organization classification) GEP-NETs, and independent of
hepatic tumor volume (=25% or >25%). Quality of life measures were not
different between the Somatuline® and placebo groups.
Safety data generated from the study are consistent with the known
safety profile of Somatuline®.
________________________ 1 Excluding Russia
-
On 26 August 2014 - The North-American affiliate announced that
a new supply of Increlex® would be available starting in
September 2014. In collaboration with the U.S. Food and Drug
Administration (FDA), Ipsen released a second batch of Increlex® in
2014. The first batch was made available for distribution in June of
2014.
-
On 1st September 2014 - Ipsen
announced that the U.S. Food and Drug Administration (FDA) had
accepted and granted priority review of its supplemental New Drug
Application (sNDA) for Somatuline® Depot® 120mg
injection in the treatment of gastroenteropancreatic neuroendocrine
tumors (GEP-NETs). The FDA designates priority review status to drug
candidates that have the potential to offer a significant improvement
in treatment compared to currently approved options. Decision is
expected in early Q1 2015. In the European Union, the dossier of the
national marketing authorization variations for Somatuline®
Autogel® 120mg injection has been validated by all national
25 drug regulatory authorities. The first decisions are expected by Q2
2015.The regulatory submissions and variations were supported by the
results of the CLARINET® Phase III study, which
demonstrated the antitumor effect of Somatuline® in the
treatment of patients with GEP-NETs, and which was recently published
in the July 17th issue of The New England Journal of
Medicine.
-
On 27 September 2014 - Ipsen announced the presentation at the
ESMO 2014 Congress (26-30 September in Madrid) of the preliminary
results of the phase II proof-of-concept clinical trial with
tasquinimod in monotherapy, evaluating the compound in four advanced
tumor types. The main objective of the study was to determine the
clinical activity of tasquinimod in advanced hepatocellular (HCC),
ovarian (OC), renal cell (RCC) and gastric (GC) carcinomas in patients
who had progressed after standard anti-tumor therapies. Primary
endpoint was the PFS rate at a predefined time for each cohort.
Secondary objectives included PFS, response rate, OS, safety,
pharmacokinetics and biomarkers.The data did not support further
development of tasquinimod in monotherapy in heavily pretreated
patients with advanced OC, RCC and GC. Pharmacokinetic and biomarkers
analyses are ongoing. Preliminary results from the futility analysis
reported sufficient clinical activity to complete the recruitment of
the HCC cohort for which results are expected in 2015.The safety
profile was consistent with the known safety profile of tasquinimod in
previous studies.
-
On 2nd October 2014 - Ipsen announced
that Susheel Surpal would step down as Chief Financial Officer of
Ipsen as of 31st October 2014 to pursue new opportunities.
-
On 10 October 2014 - Ipsen announced the appointment of Aymeric
Le Chatelier as Executive Vice President, Chief Financial Officer
effective as of 3 November 2014. He will report directly to Marc de
Garidel, Chairman and Chief Executive Officer and to Christel Bories,
Deputy Chief Executive Officer. He will be a member of the Chairman
Committee and of the Executive Committee.
-
On 10 October 2014 - Ipsen announced positive results from the
phase III study of triptorelin pamoate 11.25 mg (Decapeptyl®
3 months) administered subcutaneously in patients with locally
advanced or metastatic prostate cancer at the European Association of
Urology (EAU) 14th Central European Meeting in Cracow, Poland (10-12
October 2014). The primary objective of the study was to assess the
efficacy and safety profile of the sustained-release triptorelin
pamoate 11.25 mg (Decapeptyl® 3 months) formulation when
administered by the subcutaneous route in men with locally advanced or
metastatic prostate cancer. This objective was met with castration
levels of testosterone achieved in 97.6% [95% CI: 93.2-99.5] of men at
week 4 and castration maintained in 96.6% of these men [95% CI:
91.6-99.1] at week 26.
-
On 22 October 2014 - Ipsen and Lexicon Pharmaceuticals, Inc.
announced that they have entered into an exclusive licensing agreement
for Ipsen to commercialize telotristat etiprate outside of North
America and Japan, with a focus on the treatment of carcinoid
syndrome. Lexicon retains sole rights to commercialize telotristat
etiprate in the United States, Canada and Japan. Lexicon will continue
to lead the global Phase 3 clinical program for telotristat etiprate
in carcinoid syndrome, from which data are expected in 2015. The
pivotal Phase 3 trial is comparing telotristat etiprate to placebo on
a background of somatostatin analog (SSA) therapy, the current
standard of care, in patients whose carcinoid syndrome is not
adequately controlled with lanreotide or octreotide. The clinical
Phase 3 study is recruiting in approximately 70 centers worldwide.
Lexicon will continue to be responsible for the potential registration
of telotristat etiprate in the U.S., Canada and Japan, while Lexicon
and Ipsen will collaborate to seek regulatory approvals in Europe and
other countries within the Ipsen licensed territory, with Ipsen
assuming the lead responsibility in those markets. Under the financial
terms of the agreement, Lexicon is eligible to receive up to $145
million, comprising $23 million upfront payment and additional
payments contingent upon achievement of clinical, regulatory and
commercial milestones. In addition, Lexicon is also eligible to
receive royalties on net sales of telotristat etiprate in the licensed
territory.
-
On 6 November 2014 - Otonomy, Inc., a clinical-stage
biopharmaceutical company focused on the development and
commercialization of innovative therapeutics for diseases and
disorders of the inner and middle ear, and Ipsen, a global
specialty-driven pharmaceutical company, announced that they have
entered into an exclusive licensing agreement enabling Otonomy to
utilize Ipsen's gacyclidine data in the development and registration
of OTO-311. OTO-311 is Otonomy's sustained-exposure formulation of
gacyclidine, an N-MethylD-Aspartate (NMDA) receptor antagonist, in
development for the treatment of tinnitus.
-
On 18 November 2014 - Ipsen and the Salk Institute for
Biological Studies (Salk Institute) announced that they have agreed to
renew their collaboration in medical sciences for another three years.
The common objective for Ipsen and the Salk Institute is to achieve
critical insights in the understanding of human diseases so as to
develop new therapies for the treatment of patients afflicted with
serious medical conditions.
-
On 20 November 2014 - Ipsen and French National Center for
Scientific Research (CNRS) announced the creation of the Archi-Pex
(peptide architectures and formulations) joint research and innovation
lab in collaboration with the French Alternative Energies and Atomic
Energy Commission (CEA) and the University of Rennes 1. This is the
result of a public-private partnership active since 1999. The joint
Archi-Pex lab, supported by the French National Research Agency, seeks
to conduct multi-disciplinary research bringing together academic
teams in physics and biology with the researchers at Ipsen's center
for pharmaceutical development based in Dreux (France). The aim is to
innovate in the formulation of hormonal peptides and to reduce the
development time. Understanding of the pharmaceutical efficacy arising
from basic knowledge is the key to Archi-Pex project.
-
On 28 November 2014 - Ipsen announced that the U.S. Food and
Drug Administration (FDA) has accepted for review its supplemental
Biologics License Application (sBLA) for Dysport®
(abobotulinumtoxinA) in the treatment of upper limb spasticity in
adult patients. The regulatory filing was based on a clinical Phase
III study involving nearly 250 adult patients with upper limb
spasticity. The international, multi-center, double-blind, randomized,
placebo controlled trial compared the efficacy of Dysport®
versus placebo in hemiparetic patients following a stroke or brain
trauma. The data showed that those treated with Dysport®
demonstrated a statistically significant (p<0.0001) improvement in
muscle tone and a higher clinical benefit, versus placebo. The safety
profile observed in the study was consistent with the known safety
profile of Dysport®.
-
On 12 December 2014 - Ipsen announced that the International
Breast Cancer Study Group (IBCSG) presented results of the randomized
phase III SOFT clinical trial at the 2014 San Antonio Breast Cancer
Symposium. Suppression of Ovarian Function Trial (SOFT) assessed the
value of ovarian suppression in reducing breast cancer recurrence in
young women receiving tamoxifen, and evaluated the role of the
aromatase inhibitor exemestane plus ovarian suppression in this
population. Ovarian suppression was obtained entirely by monthly
injections of triptorelin (active ingredient of Ipsen's Decapeptyl®)
over 5 years for 81% of patients. Treatment combining tamoxifen plus
ovarian suppression reduced the relative risk of developing invasive
breast cancer recurrence by 22% in women who did not transition into
menopause after receiving chemotherapy, when compared to treatment
with tamoxifen alone.
-
On 16 December 2014 - François Garnier has been appointed
Executive Vice President, General Counsel for the Ipsen Group
effective as of January 5, 2015. As such, he will sit on the
Chairman's Committee and on the Executive Committee.
-
On 16 December 2014 - Ipsen announced that Somatuline®
Depot® (lanreotide) Injection 120 mg (referred to as
Somatuline®) was approved by the U.S. Food and Drug
Administration (FDA) for the treatment of adult patients with
unresectable, well- or moderately-differentiated, locally advanced or
metastatic gastroenteropancreatic neuroendocrine tumors
(GEP-NETs).Somatuline®'s approval was based on
demonstration of improved progression-free survival (PFS) in CLARINET®
multi-center, international, randomized (1:1), double-blind, placebo
controlled study that enrolled 204 patients with unresectable, well-
or moderately-differentiated, locally advanced or metastatic,
non-functioning GEP-NETs. Patients were randomized to receive either
Somatuline® (lanreotide) 120 mg or placebo subcutaneously
every 28 days. The primary efficacy endpoint was PFS as determined by
independent central radiology review. The trial demonstrated a
significant prolongation of PFS for the Somatuline®
(lanreotide) arm [HR 0.47 (95% CI: 0.30, 0.73); p < 0.001; stratified
log-rank test]. The median PFS in the Somatuline®
(lanreotide) arm had not been reached at the time of the final
analysis and therefore is greater than 22 months. The median PFS in
the placebo arm was 16.6 months. Safety data were evaluated in 101
patients who received at least one dose of Somatuline®
(lanreotide). The most commonly (greater than or equal to 10%)
reported adverse reactions in Somatuline®
(lanreotide)-treated patients were abdominal pain, musculoskeletal
pain, vomiting, headache, injection site reaction, hyperglycemia,
hypertension, and cholelithiasis. The most common serious adverse
reaction of Somatuline® (lanreotide) observed in this trial
was vomiting (4%).
After 31 December 2014, major developments included:
-
On 26 January 2015 - Ipsen announced topline results for two
double-blind phase III studies of Dysport®
(abobotulinumtoxinA) in Pediatric Lower Limb (PLL) spasticity in
children with cerebral palsy and in Adult Lower Limb (ALL) spasticity
in patients who had experienced a stroke or traumatic brain injury. In
the PLL phase III study, conducted in children with hemiparetic or
diplegic cerebral palsy, treatment with Dysport® showed a
statistically significant response versus placebo in the improvement
of muscle tone, as measured by the Modified Ashworth Scale (MAS;
primary endpoint), and a statistically significant overall benefit
versus placebo, as measured by the Physician Global Assessment (PGA;
first secondary endpoint). In the ALL phase III study, conducted in
hemiparetic patients who had experienced a stroke or traumatic brain
injury, treatment with Dysport® at the dose of 1500U showed
a statistically significant response versus placebo in the improvement
of muscle tone, as measured by the Modified Ashworth Scale (MAS;
primary endpoint). An overall benefit (measured by the Physician
Global Assessment (PGA); first secondary endpoint) versus placebo was
observed but did not reach statistical significance according to the
pre-specified statistical analysis. Other spasticity and functional
outcome results are currently being analyzed. The safety profile
observed in the studies was consistent with the known safety profile
of Dysport® in these indications. Comprehensive results
from these double-blind studies will be disclosed in the next few
months at major international congresses. Ipsen will share these
results with key regulatory agencies this year.
-
On 24 February 2015 - Ipsen and Canbex Therapeutics Ltd
(Canbex) announced that Canbex has granted Ipsen an option giving
Ipsen the exclusive right to purchase 100% of Canbex shares upon
completion of the Phase IIa study of Canbex's lead candidate for the
treatment of spasticity in people with multiple sclerosis (MS), known
as VSN16R. Canbex is a spin-off of University College London (UCL)
that raised a Series A financing of GBP 2.3 million in 2013 from MS
Ventures (the corporate venture arm of Merck Serono, Merck KGaA), the
Wellcome Trust and UCL Business Plc. Under the financial terms of the
agreement, Ipsen has paid an option fee of €6 million to Canbex. If
Ipsen elects to exercise its option to acquire Canbex at the end of
the proof of concept Phase IIa study, Canbex's shareholders will be
eligible to receive a total of up to an additional €90 million ,
comprising an acquisition payment, and additional milestone payments
contingent upon launch subsequent to achievement of clinical and
regulatory success. In addition, Canbex shareholders will be eligible
to receive royalties on world-wide annual net sales of VSN16R.
-
On 2 March 2015 - Ipsen announced that Dominique Laymand has
been appointed Senior Vice President, Chief Ethics and Compliance
Officer for the Ipsen group, effective as of 16th of March.
She will report directly to Marc de Garidel, Chairman and CEO of
Ipsen. Dominique Laymand will be a member of the Chairman's Committee.
-
On 2 March 2015 - Ipsen announced that additional supply
of Increlex® has been made available in the United States.
In collaboration with the FDA (Food and Drug Administration), Ipsen is
releasing a third batch of Increlex® since product supply
was resumed in May 2014.
GOVERNMENT MEASURES
In the current context of financial and economic crisis, the governments
of many countries in which the Group operates continue to introduce new
measures to reduce public health expenses, some of which have affected
the Group sales and profitability in 2014. In addition, certain measures
introduced in 2013 have continued to affect the Group's accounts
year-on-year.
Measures that have impacted 2014
In the Major Western European countries:
-
In France, the price of Smecta® was cut by 7.5% as of 1st
July 2014, following a first price cut of the same magnitude as of 1st
January 2014. Moreover, health authorities have required a 4.0% price
cut on Decapeptyl® as of 1st April 2014;
-
In the UK, Decapeptyl® has been sold at 100.0% of the NHS (National
Health Service) price since March 2014.
In the Other European countries:
-
In Belgium, Dysport® experienced a 2.4% price decrease as
of January 2015 as the product has been reimbursed for more than 15
years in the market. In Luxemburg, Dysport® will be
impacted by the same decrease as the country references the Belgium
price;
-
In Czech Republic, as of October 2014, the Ministry of Health decided
to increase drug prices to compensate for the Czech Kroun devaluation.
Ipsen benefited from a price increase of around 7.0% on all its
products;
-
In Denmark, in May 2014, the DHMA (The Danish Health and Medicines
Authority) granted a 50.0% price increase on Increlex®,
based on the Pharmacist Purchase Price;
-
In Estonia, the Ministry of Health decreased the price of Decapeptyl®
1M by 9.7% following application of international reference pricing.
However, the reimbursement rate increased to 100.0% from 50.0% for use
as adjuvant therapy to radiotherapy;
-
In Greece, the €2.44 billion claw-back introduced end of 2013 has not
been readjusted by the Ministry of Health as initially anticipated.
Health authorities are targeting €2 billion for 2014. Decapeptyl®
was impacted by a significant increase in patient co-payment. In
addition, since 1st April 2014, the Ministry of Health has
recognized the difference between biological products, biosimilars and
generics. It will therefore not be possible for these different
product types to be part of common tenders;
-
In Italy, Hexvix® experienced a 13.0% price cut in February
2014 after it became eligible for reimbursement at the national level;
-
In Lithuania, Somatuline® was granted national
reimbursement in April 2014 in the acromegaly indication;
-
In Poland, Decapeptyl® and Somatuline® have been
affected by a price revision applicable as of 1st January
2014. Dysport® obtained reimbursement in spasticity
indications, effective from July 2014 to July 2016. In Primary Care,
the price of Fortrans® increased by 10.0% in September 2014
following strong support from the Polish Endoscopy Medical Society;
-
In Portugal, the Ministry of Health is pressing the local
pharmaceutical association (APIFARMA) in the context of negotiations
with the industry on the spending exceeding a certain threshold in
2014. For the 2015 government budget, the Ministry of Finance
contemplates the introduction of an extraordinary tax with a
particular attention to pharmaceutical industry profits;
-
In the Netherlands, the application of international reference pricing
led to a price decrease on NutropinAq® and to price
increases on Somatuline®, Dysport® and Decapeptyl®
as of 1st April 2014. Somatuline® benefited from
a second price increase as of 1st October 2014;
-
In Norway, the December 2013 review of international reference pricing
led to price cuts on Dysport® and NutropinAq®,
and to a price increase on Somatuline®. In addition,
Somatuline® benefited from a price increase in November
2014 following the application of international reference pricing;
-
In Slovakia, in April 2014, Ipsen submitted prices for the second
yearly revision based on the average 3 lowest prices in EU 28. This
led to price decreases on all Ipsen products;
-
In Slovenia, the official price of Dysport® was cut in June
2014 to be aligned with the reimbursed price;
-
In Sweden, since January 2014, products that have been marketed for
more than 15 years (notably Decapeptyl®) are subject to a
mandatory price cut of 7.5%. In June 2014, TLV (The Dental and
Pharmaceutical Benefits Agency) granted a 25.0% price increase on
the Pharmacist Purchase Price to Increlex®;
-
In Switzerland, Dysport® was impacted by a price cut in
December 2013 following the application of international reference
price;
In the Rest of the World:
-
In Brazil, products with no generics on the market benefited from a
1.0% price increase in 2014;
-
In Colombia, the "National Committee of Drug Prices" (Comisión
Nacional de Precios de Medicamentos) imposed a price cut on 364
medicines in December 2013, including Dysport®. In August
2013, the prices of 195 medicines had already been regulated,
including Somatuline®;
-
In China, the NDRC (National Development & Reform Commission) issued a
"Low-Price Drug List" in May 2014 to align the prices of all ginkgo
biloba tablets. However, Tanakan® is excluded from this
list and will keep its original retail price;
-
In Turkey, due to a revision of international reference pricing in
September 2014, the price of Somatuline® was raised.
However, the mandatory rebate on the reimbursement price was also
raised.
Furthermore, and in the context of the financial and economic crisis,
governments of many countries in which the Group operates continue to
introduce new measures to reduce public health expenses, some of which
will affect the Group sales and profitability beyond 2014.
Measures impacting beyond 2014
In the Major Western European countries:
-
In France, the 2014 Social Security Finance Bill (PLFSS) was
introduced, with the possibility for the first time for the pharmacist
to substitute biotechnology products by biosimilars, except when
forbidden by the physician on the prescription. This rule was not
enforced yet, pending the publication of a decree. In addition,
the French government presented the new Social Security Finance Bill
(PLFSS), which sets forth expenditure targets in the healthcare sector
for 2015. The target growth of healthcare expenditure has been fixed
at 2.1% year-on-year, down from 2.4% in 2014. This is expected to
result in €3.2 billion savings. In addition, Decapeptyl®
will experience a 3.0% price decrease as of 1st January
2015. Finally, the two Smecta® price cuts will fully impact
countries that reference French prices (incl. European Union,
sub-Saharan Africa) in 2015;
-
In Germany, the mandatory sales rebate for the official price of
prescription drugs, initially set at 16.0%, was reduced to 7.0% as of 1st
January 2014;
-
In Spain, the final Royal Decree List arising from the implementation
of the Reference Price System was published on 15 July 2014. As a
result, the official published prices of Decapeptyl® and
Dysport® will be affected. Additionally, the mandatory
rebate of 15.0% applicable on the official price of Decapeptyl®
was canceled;
-
In the UK, the new PPRS (Pharmaceutical Price Regulation Scheme)
was implemented, with the option for pharmaceutical companies to apply
a 5.0% to 7.0% price cut on the NHS (National Health Service)
selling price modulated over the whole portfolio, or the option to
reimburse this amount through pay back. Moreover, since January 2014,
tenders are managed at the regional level instead of the hospital
level.
In the Other European countries:
-
In Bulgaria, the Ministry of Health published a new ordinance to
extend the limitation of price increases of over-the-counter (OTC)
medicines to 1.0% for another year;
-
In Czech Republic, the Parliament approved the introduction of a
reduced VAT rate on medicines, down to 10.0% from 21.0% as of 2015.
The reduced VAT rate will have a positive impact on access to
medicines;
-
In Croatia, Czech Republic replaced France in the basket of countries
included in the international reference pricing system;
-
In Kazakhstan, pressurized to address corruption issues, the Ministry
of Healthcare and Social Development will amend the methodology and
mechanism for price determination, hence increasing transparency
within government procurement process. It intends to create a national
drug formulary that will include maximum pricing for medications with
proven clinical efficacy and for brands within the context of
international non-proprietary name (INN);
-
In Ukraine, the Ministry of Health published a draft resolution that
introduces Internal and External Reference Pricing for prescription
drugs and for medicines procured through state funds. Rule will be to
take the average price of the countries of origin: Bulgaria, the Czech
Republic, Hungary, Latvia, Moldova, Poland, Serbia, Slovakia. This
development reflects the intent of the Ukrainian government to monitor
drug prices, notably given the average price rise of 16.0% reported
this year, resulting from the "anti-crisis" measures (currency
devaluation and implementation of a 7.0% VAT on drug prices as of 1st
April 2014). The potential state price regulation would reportedly
affect 10,000 drugs, or approximately 80.0% of the market, with the
maximum margin on bulk purchases being 10.0%, and retail mark-up of
25.0%;
In the Rest of the World:
-
In Algeria, marketing authorisations for the Primary Care portfolio
were renewed. In addition, Smecta® "localization" has
successfully undergone review from the Algerian Price Committee. Ipsen
secured a price for the next 5 years and price revision will only
occur when a Smecta® generic is approved. In the context of
the sharp and continuous decline in oil prices, authorities are
looking at drastically reducing import costs, as of January 2015. This
will impact pharmaceuticals which account for €3 billion in the state
budget;
-
In South Africa, the Department of Health published draft legislation
governing pricing of novel drugs in the country. The guidelines set
forth a potential international reference pricing system. No timeline
for advancement is known yet;
-
In China, the NDRC (National Development & Reform Commission) will
deregulate the national drug pricing system from 2015. It will
theoretically allow the free setting of drug prices, rather than
forcing companies to adhere to government regulated price caps on drug
retail prices. However, local government tender centers will keep
control over the bidding price, which is the price to patients plus
the hospital margin;
-
In Morocco, the Ministry of Health is looking at lowering the prices
of several ranges of medications. This will affect drugs used for the
treatment of various chronic conditions, including cardiovascular
diseases, diabetes, inflammatory, infectious, digestive diseases, as
well as some cancer drugs and treatments for benign prostatic
hyperplasia;
-
In Tunisia, the creation of a National Medicines Agency ("Agence
nationale du Médicament") is at an advanced stage of preparation.
The Ministry of Health updated existing texts on regulatory and
clinical requirements so as to meet the highest international
standards;
-
In Turkey, authorities are thinking of introducing a flexible price
system in 2014. The exact content is not yet known but measures such
as not including countries under Troïka (countries where policies are
imposed by the European Commission, the European Central Bank and the
International Monetary Fund), an update of foreign exchange rates, and
a price increase for products under shortage, are currently under
consideration.
Comparison of consolidated income statement for 2014 and 2013
(in million euros)
|
|
|
31 december 2014
|
|
31 december 2013
restated
|
|
Change
|
|
|
|
|
|
% Sales
|
|
|
|
% Sales
|
|
|
Sales
|
|
|
1 274.8
|
|
100.0%
|
|
1 224.8
|
|
100.0%
|
|
4.1%
|
Other revenues
|
|
|
57.6
|
|
4.5%
|
|
57.0
|
|
4.7%
|
|
1.2%
|
Revenues
|
|
|
1 332.4
|
|
104.5%
|
|
1 281.8
|
|
104.7%
|
|
4.0%
|
Cost of goods sold
|
|
|
(310.0)
|
|
-24.3%
|
|
(305.3)
|
|
-24.9%
|
|
1.5%
|
Selling and marketing expenses
|
|
|
(464.1)
|
|
-36.4%
|
|
(442.9)
|
|
-36.2%
|
|
4.8%
|
Research and development expenses
|
|
|
(186.9)
|
|
-14.7%
|
|
(195.8)
|
|
-16.0%
|
|
-4.5%
|
General and administrative expenses
|
|
|
(111.2)
|
|
-8.7%
|
|
(103.8)
|
|
-8.5%
|
|
7.2%
|
Other core operating income
|
|
|
9.4
|
|
0.7%
|
|
3.8
|
|
0.3%
|
|
147.5%
|
Other core operating expenses
|
|
|
(9.1)
|
|
-0.7%
|
|
(9.8)
|
|
-0.8%
|
|
-6.9%
|
Core Operating Income
|
|
|
260.6
|
|
20.4%
|
|
228.0
|
|
18.6%
|
|
14.3%
|
Other operating income
|
|
|
0.4
|
|
0.0%
|
|
1.9
|
|
0.2%
|
|
-81.8%
|
Other operating expenses
|
|
|
(9.6)
|
|
-0.8%
|
|
(6.6)
|
|
-0.5%
|
|
44.7%
|
Restructuring costs
|
|
|
(21.9)
|
|
-1.7%
|
|
(0.2)
|
|
0.0%
|
|
-
|
Impairment losses
|
|
|
(8.0)
|
|
-0.6%
|
|
(12.6)
|
|
-1.0%
|
|
-36.5%
|
Operating Income
|
|
|
221.4
|
|
17.4%
|
|
210.5
|
|
17.2%
|
|
5.2%
|
Investment income
|
|
|
1.7
|
|
0.1%
|
|
8.0
|
|
0.7%
|
|
-79.2%
|
Financing costs
|
|
|
(4.7)
|
|
-0.4%
|
|
(2.2)
|
|
-0.2%
|
|
108.6%
|
Net financing costs
|
|
|
(3.0)
|
|
-0.2%
|
|
5.8
|
|
0.5%
|
|
-
|
Other financial income and expenses
|
|
|
(12.0)
|
|
-0.9%
|
|
(14.8)
|
|
-1.2%
|
|
-
|
Income taxes
|
|
|
(53.8)
|
|
-4.2%
|
|
(59.3)
|
|
-4.8%
|
|
-
|
Share of profit (loss) from associates and joint ventures
|
|
|
1.9
|
|
0.1%
|
|
0.0
|
|
-
|
|
-
|
Net profit / (loss) from continuing operations
|
|
|
154.5
|
|
12.1%
|
|
142.2
|
|
11.6%
|
|
8.6%
|
Net profit / (loss) from discontinued operations
|
|
|
(0.5)
|
|
0.0%
|
|
10.9
|
|
0.9%
|
|
-
|
Consolidated net profit
|
|
|
154.0
|
|
12.1%
|
|
153.1
|
|
12.5%
|
|
0.6%
|
- Attributable to shareholders of Ipsen S.A.
|
|
|
153.5
|
|
|
|
152.5
|
|
|
|
|
- Non-controlling interest
|
|
|
0.5
|
|
|
|
0.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Group sales reached €1,274.8 million in 2014, up 4.1%
year-on-year and up 5.7% excluding foreign exchange impact1.
__________________ 1 Excluding foreign exchange impact,
variations were calculated by restating the 31 December 2013
consolidated financial statements with currency rates at 31 December 2014
Other revenues totaled €57.6 million at 31 December 2014, up 1.2% over
the €57.0 million generated in 2013.
The growth stemmed from the following:
-
Higher royalties received from Group partners, in particular for
Adenuric® and for Dysport® following a contract
renegotiation with Galderma in July 2014;
-
Lower milestone payments related to licensing agreements after
receiving a milestone payment in 2013 for meeting a Somatuline®
sales target;
-
Lower Group co-promotion income after recognizing in 2013 remaining
compensation paid by Novartis, following the termination of the
Exforge co-promotion agreement in April 2012.
Other revenues break down as follows:
(in millions of euros)
|
|
|
31 december 2014
|
|
31 december 2013 restated
|
|
Change
|
|
|
|
|
|
|
|
in value
|
|
in %
|
Breakdown by type of revenue
|
|
|
|
|
|
|
|
|
|
- Royalties received
|
|
|
18,6
|
|
15,3
|
|
3,3
|
|
21,9%
|
- Milestone payments - Licensing agreements (1)
|
|
|
23,0
|
|
24,0
|
|
(1,0)
|
|
-4,0%
|
- Other (co-promotion revenues, re-billings)
|
|
|
16,0
|
|
17,7
|
|
(1,7)
|
|
-9,8%
|
Total
|
|
|
57,6
|
|
57,0
|
|
0,6
|
|
1,2%
|
|
|
|
|
|
|
|
|
|
|
(1) Milestone payments relating to licensing agreements are
recognized primarily as milestone payments received on a pro rata basis
over the life of the licensing agreements
At 31 December 2014, the cost of goods sold amounted to €310.0 million,
representing 24.3% of sales, compared to €305.3 million representing
24.9% of sales for the same period in 2013.
The higher cost of goods sold resulted primarily from the increase in
royalties paid - as the later are correlated with sales, from a nearly
10% growth in specialty care sale volumes and from a decrease in the
restated value of inventories related to lower industrial cost prices in
2014.
The cost of goods sold, however, benefited from a change in the method
of consolidation of the Swiss company Linnea. The costs borne by Linnea
are now consolidated using the equity method1.
___________________ 1 In accordance with the norm IFRS11
« Partnerships » applicable since 1st January 2014 on the
accounting treatment of joint ventures
At 31 December 2014, selling expenses totaled €464.1 million,
representing 36.4% of sales, up 4.8% versus 2013. The increase was
driven by organic growth and recruitment by the US affiliate of an
oncology sales force to launch Somatuline® Depot®
(lanreotide) 120 mg Injection in the treatment of gastrointestinal and
pancreatic neuroendocrine tumors (GEP NETs). The US Food and Drug
Administration (FDA) approved the treatment on 16 December 2014. The
rise in selling expenses was partially offset by the favorable tail-end
impact from the primary care sales forces restructuring in France and
the Dysport® sales force restructuring in the US, both
carried out in 2013.
-
Research and development expenses
At 31 December 2014, research and development expenses reached €186.9
million, representing 14.7% of sales, compared with 16.0% of sales a
year earlier.
The year-on-year decline stemmed from the favorable impact of research
tax credits, with other research and development costs up slightly.
The main research and development projects undertaken in 2014 concerned
Dysport® in spasticity and glabellar lines indications with
the liquid formulation (Dysport® Next Generation),
tasquinimod's phase II proof of concept and phase III prostate cancer in
China, Somatuline® and Dopastatin (endocrinology).
A comparison of research and development expenses for the years ended 31
December 2014 and 2013 is presented in the following table.
(in millions of euros)
|
|
|
31 december 2014
|
|
31 december 2013 restated
|
|
Change
|
|
|
|
|
|
|
|
in value
|
|
in %
|
Breakdown by type of expense
|
|
|
|
|
|
|
|
|
|
- Drug-related research and development (1)
|
|
|
(168,8)
|
|
(167,4)
|
|
(1,4)
|
|
0,9%
|
- Industrial and pharmaceutical development (2)
|
|
|
(41,2)
|
|
(40,9)
|
|
(0,3)
|
|
0,6%
|
- Strategic development (3)
|
|
|
(7,2)
|
|
(7,2)
|
|
0,0
|
|
-0,1%
|
- Research tax credits (4)
|
|
|
30,3
|
|
19,7
|
|
10,6
|
|
53,4%
|
Total
|
|
|
(186,9)
|
|
(195,8)
|
|
8,9
|
|
-4,5%
|
|
|
|
|
|
|
|
|
|
|
(1) Drug-related research & development is aimed at
identifying new agents, determining their biological characteristics and
developing small-scale manufacturing processes. Patent-related expenses
are included in this type of expense.
(2) Industrial development includes the chemical,
biotechnical and development-process research costs to industrialize the
small-scale production of agents developed by the research laboratories.
The role of pharmaceutical development is to lead new product
development projects, such as bibliographic research, formulation
feasibility studies, method adaptation, method development and
validation, and transpositions.
(3) Strategic development includes costs incurred for
research into new product licenses and establishing partnership
agreements.
(4) In accordance with IAS 20 - Accounting for Government
Grants and Disclosure of Government Assistance, research tax credits are
now recognized in core operating income.
-
General and administrative expenses
General and administrative expenses increased 7.2% in 2014, notably as a
result of measures aimed at supporting the Group's transformation and a
heavier tax burden in France.
-
Other core operating income and expenses
Other core operating income came to €0.3 million, versus other core
operating expenses of €6.0 million in 2013. The income stemmed primarily
from revenue generated by subleasing Ipsen's headquarters, as well as
the favorable impact of the cash flow hedging policy put into place at
the end of 2013.
At 31 December 2014, core operating income amounted to €260.6 million,
representing 20.4% of sales. The accelerated implementation of the
Group's strategy, in particular the transformation and the business unit
organization, triggered strong sales performance and led to tightly
managed costs, which - when coupled with the favorable impact of
research tax credits - enabled the Group to improve its profitability by
1.8 percentage points in 2014.
-
Operating segments: Core operating income by therapeutic area
Segment information is now presented to reflect the primary care
business and the specialty care business, the Group's two operating
segments, in line with the new organization put into place and announced
by the Group on 2 October 2013.
There is no allocation of general and administrative expenses between
these two segments. Likewise, the Group's research and development
spending is not allocated according to the two operating segments. R&D
continues to be managed on a global basis, with investment decisions
made independently by the Executive Committee, even when a successful
program generates revenue for just one of the two segments.
The Group uses core operating income to measure its segment performance
and to allocate resources.
For purposes of comparison between the two financial years, operating
segment information was restated for the financial year ended 31
December 2013.
Sales, revenue and core operating income are presented by therapeutic
area for the 2014 and 2013 financial years in the following table.
(in millions of euros)
|
|
|
31 december 2014
|
|
31 december 2013 restated
|
|
Change
|
|
|
|
|
|
% sales
|
|
|
|
% sales
|
|
|
|
%
|
Specialty Care
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
947,1
|
|
100,0%
|
|
871,1
|
|
100,0%
|
|
76,0
|
|
8,7%
|
Revenue
|
|
|
974,9
|
|
102,9%
|
|
901,0
|
|
103,4%
|
|
73,9
|
|
8,2%
|
Core operating income
|
|
|
400,5
|
|
42,3%
|
|
361,7
|
|
41,5%
|
|
38,8
|
|
10,7%
|
Primary care (*)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
327,8
|
|
100,0%
|
|
353,7
|
|
100,0%
|
|
(25,9)
|
|
-7,3%
|
Revenue
|
|
|
357,5
|
|
109,1%
|
|
380,8
|
|
107,7%
|
|
(23,3)
|
|
-6,1%
|
Core operating income
|
|
|
127,2
|
|
38,8%
|
|
133,1
|
|
37,6%
|
|
(5,9)
|
|
-4,4%
|
Total allocated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
1 274,8
|
|
100,0%
|
|
1 224,8
|
|
100,0%
|
|
50,0
|
|
4,1%
|
Revenue
|
|
|
1 332,4
|
|
104,5%
|
|
1 281,8
|
|
104,7%
|
|
50,6
|
|
4,0%
|
Core operating income
|
|
|
527,7
|
|
41,4%
|
|
494,7
|
|
40,4%
|
|
33,0
|
|
6,7%
|
Total unallocated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core operating income (expenses)
|
|
|
(267,2)
|
|
-
|
|
(266,7)
|
|
-
|
|
(0,5)
|
|
0,2%
|
Group total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
1 274,8
|
|
100,0%
|
|
1 224,8
|
|
100,0%
|
|
50,0
|
|
4,1%
|
Revenue
|
|
|
1 332,4
|
|
104,5%
|
|
1 281,8
|
|
104,7%
|
|
50,6
|
|
4,0%
|
Core operating income
|
|
|
260,6
|
|
20,4%
|
|
228,0
|
|
18,6%
|
|
32,6
|
|
14,3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) including active ingredients and raw materials
Specialty care sales grew 8.7% to €947.1 million in 2014. The
relative weight of specialty care products continued to increase to
reach 74.3% of total Group sales, compared to 71.1% in 2013.
Decapeptyl® sales, up 6.0% in 2014, benefitted from the
product's weak performance in China during the first nine months of
2013, and a favorable base effect in the Middle East. Somatuline®
sales, which increased 16.4% to €287.5 million, were driven by strong
volume and value growth in the United States, strong volume growth in
Germany together with a reduction in mandatory rebates on prescription
drug sales, and solid volume momentum in the United Kingdom. Sales of
Increlex® grew 1.4% year-on-year to €12.9 million, after
supply gradually resumed in Europe in early 2014 and in the United
States in June 2014. Dysport® sales increased 5.1% to €254.5
million, but were severely penalized by an unfavorable foreign exchange
impact. Dysport® sales were fuelled by the strong volume
performance of the therapeutic and aesthetic segments in Brazil, as well
as by the supply of the product to Galderma for aesthetic indications.
In 2014, core operating income totaled €400.5 million, representing
42.3% of sales. That result compares to 2013 core operating income of
€361.7 million, representing 41.5% of sales. The improvement reflects
the favorable sales trend and the positive tail-end impact of the Dysport®
sales force restructuring in the United States, offset by expenses
incurred to set up US sales operations and to launch Somatuline®
in neuroendocrine tumors.
In 2014, sales of primary care products, including active
ingredients and raw materials, came to €327.8 million, down 7.3%
year-on-year. The decline was mainly triggered by the unfavorable impact
of the change in consolidation method1 for the Swiss company
Linnea. Excluding Linnea, sales of primary care drugs decreased 2.6%. In
France, sales fell 9.9% as a result of two consecutive 7.5% price
reductions for Smecta® and the launch of a competing product
to Tanakan® in March 2013. Internationally, sales grew 0.6%,
driven by strong performances in China, Algeria and Russia, offsetting
the decline in France. Primary care sales in France accounted for 27.8%
of the Group's total primary care sales in 2014, compared with 30.1% in
the previous year. In 2014, core operating income for primary care
amounted €127.2 million, representing 38.8% of sales. That result
compares to 2013 core operating income of €133.1 million, representing
37.6% of sales. The increase in profitability mainly resulted from the
ultimate impact of the primary care sales force restructuring in France.
___________________ 1 In accordance with the norm IFRS11
« Partnerships » applicable since 1st January 2014 on the
accounting treatment of joint ventures
Unallocated core operating income (expenses) came to (€267.2)
million, compared with (€266.7) million in 2013. The expenses consisted
mainly of the Group's research and development costs, which totaled
€183.4 million in 2014, compared with €190.7 million in 2013, and
unallocated general and administrative expenses.
-
Other operating income and expenses
At 31 December 2014, non-core other operating expenses amounted to €9.2
million, compared with non-core other operating expenses of €4.7 million
a year earlier. Non-core other operating expenses at 31 December 2014
arose primarily from costs related to the transfer of the Group's
US-based subsidiary Ipsen Bioscience Inc.'s operations from Milford to
Cambridge, and expenses related to the renegotiation of the partnership
contract with Galderma. In 2013, non-core other operating expenses
primarily included costs related to the acquisition of Syntaxin Ltd.,
the reorganization of the US-based subsidiary Ipsen Biopharmaceuticals
Inc., and the settlement of a trade dispute with a partner, as well as
the settlement of an administrative proceeding brought against the Group.
Restructuring costs reached €21.9 million at 31 December 2014. They
correspond mainly to costs incurred by the Group to accelerate the
rollout of the transformation project, such as measures to adapt support
functions, to continue the restructuring of R&D activities, and to
restructure the specialty care business model, as well as the costs
incurred from transferring the operations of US-based subsidiary Ipsen
Bioscience Inc. from Milford to Cambridge.
At 31 December 2013, restructuring costs totaled €0.2 million and were
derived chiefly from the reversal of an accrual related to the primary
care restructuring plan in France, offset by restructuring costs in the
US.
At 31 December 2014, the Group recorded an €8.0 million impairment loss
resulting from the write-down of a Syntaxin Ltd. intangible asset, which
has no impact on ongoing studies.
At 31 December 2013, the Group recognized an €11.6 million impairment
loss on the Increlex® IGF-1 active ingredient following
supply interruptions in the market and uncertainty over the date of
resupply in the US. Ipsen also recognized a €1.0 million impairment loss
following a decision by the Group not to exercise its right to develop a
neurology program.
-
Net financing costs and other financial income and expenses
At 31 December 2014, the Group had net financial expense of €15.1
million, versus net financial expense of €9.0 million a year earlier.
-
Net financing costs amounted to €3.0 million, compared to
income of €5.8 million a year earlier. The 2013 net income stemmed
mainly from a financial gain on the repayment of Debtor-in-Possession
(DIP)-type financing granted by Ipsen to Inspiration
Biopharmaceuticals Inc. at the end of 2012, following the sale of its
hemophilia assets to Baxter and Cangene.
-
At 31 December 2014, other financial expenses amounted to €12.0
million, a €2.8 million improvement over the prior year. The
2014 expense arose primarily from a negative €10.1 million foreign
exchange impact resulting mainly from the sharp depreciation of the
Russian ruble in the fourth quarter of the year. In 2013, other
financial expenses stemmed primarily from a negative €11.2 million
foreign exchange impact and €2.0 million in write-down on convertible
bonds subscribed by the Group to develop a neurology program.
At 31 December 2014, the effective tax rate amounted to 26.1% of pre-tax
profit from continuing operations, compared with an effective rate of
29.4% a year earlier.
The Group benefitted from the favorable outcome of a number of tax
audits ended in 2014. Furthermore, the effective tax rate benefitted
from a decline in non-deductible spending from 2013 to 2014.
-
Share of profit (loss) from associated companies and joint ventures
During the 2014 financial year, Ipsen recorded €1.9 million in profit
from associated companies and joint ventures owing to a change in the
method for consolidating sales of the Swiss company Linnea. Ipsen's
share of the profit of Linnea, a company jointly controlled by Ipsen and
the Schwabe Group, is now consolidated using the equity method, in
accordance with the norm IFRS11 « Partnerships » applicable since 1st
January 2014 on the accounting treatment of joint ventures.
-
Net profit (loss) from continuing operations
As a result of the items above, at 31 December 2014, profit from
continuing operations came to €154.5 million, up 8.6% from €142.2
million at 31 December 2013.
-
Net profit (loss) from discontinued operations
At 31 December 2014, the net loss from discontinued operations totaled
€0.5 million. It included the rebilling of production costs for OBI-1
clinical samples to Baxter.
At 31 December 2013, net profit from discontinued operations totaled
€10.9 million. That result stemmed primarily from the rebilling of
production costs for OBI-1 clinical samples to Baxter, prior to the
effective transfer of the production site and personnel, as well as from
the negotiated repayment of advisory fees paid by Ipsen during the joint
asset-sale process with Inspiration Biopharmaceuticals Inc., and the tax
impact related to the compensation paid by the Group to the US
subsidiary that sold the assets.
Consolidated net profit came to €154.0 million (€153.5 million
attributable to Ipsen S.A. shareholders), relatively flat against €153.1
million (€152.5 million attributable to Ipsen S.A shareholders) at 31
December 2013.
At 31 December 2014, basic earnings attributable to the Group amounted
to €1.87 per share, up from 1.84 a year earlier.
-
Milestone payments collected but not yet recognized in the Group's
income statement
At 31 December 2014, milestone payments collected by the Group but not
yet recognized in the income statement amounted to €143.5 million,
compared with €125.7 million a year earlier.
For the 2014 financial year, the Group recorded €25.0 million as part of
the renegotiated partnership contract with Galderma.
Deferred income will be recognized in the Group's future income
statement as follows:
(in millions of euros)
|
|
|
31 december 2014
|
|
|
31 december 2013
|
Total (*)
|
|
|
143,5
|
|
|
125,7
|
The deferred income will be recognized over time as follows:
|
|
|
|
|
|
|
In the year n+1
|
|
|
24,9
|
|
|
21,7
|
In the years n+2 and subsequent
|
|
|
118,6
|
|
|
104,0
|
|
|
|
|
|
|
|
(*) Amounts converted at average exchange rates respectively
at 31 December 2014 and 31 December 2013.
CASH FLOW AND CAPITAL
The consolidated cash flow statement at 31 December 2014 shows that the
Group generated net cash flow of €54.4 million, up €46.5 million over
the prior year.
Breakdown of cash flow statement
(in millions of euros)
|
|
|
31 december 2014
|
|
|
31 december 2013
|
Cash flow from operating activities before changes in working
capital requirement
|
|
|
240,9
|
|
|
201,6
|
(Increase) / decrease in working capital requirement for operations
|
|
|
5,3
|
|
|
(20,1)
|
Net cash flow from operating activities
|
|
|
246,2
|
|
|
181,4
|
Net investments in financial and tangible and intangible assets
|
|
|
(84,2)
|
|
|
(62,3)
|
Other cash flow from investments
|
|
|
(9,5)
|
|
|
(41,4)
|
Net cash provided (used) by investment activities
|
|
|
(93,7)
|
|
|
(103,7)
|
Net cash provided (used) by financing activities
|
|
|
(97,7)
|
|
|
(76,5)
|
Net cash provided (used) by discontinued operations
|
|
|
(0,4)
|
|
|
6,7
|
CHANGES IN CASH AND CASH EQUIVALENTS
|
|
|
54,4
|
|
|
7,9
|
Opening cash and cash equivalents
|
|
|
125,4
|
|
|
113,3
|
Impact of exchange rate fluctuations
|
|
|
0,4
|
|
|
4,1
|
Closing cash and cash equivalents
|
|
|
180,1
|
|
|
125,4
|
|
|
|
|
|
|
|
-
Net cash flow from operating activities
In 2014, cash flow from operating activities before changes in working
capital requirement amounted to €240.9 million, up from the €201.6
million generated in 2013.
Working capital requirement for operating activities decreased by €5.3
million in 2014, compared to an increase of €20.1 million in the prior
year. The 2014 decrease stemmed from the following items:
-
In 2014, inventories declined by €7.6 million, versus a decrease of
€2.9 million in 2013. The execution of action plans helped improve the
Group's productivity;
-
In 2014, trade receivables grew by €8.5 million, versus an increase of
€1.8 million at 31 December 2013. Strong business growth accounted for
the lion's share of the increase, which was offset by the collection
of trade receivables in Southern Europe, the unblocking of the
economic situation in some Middle Eastern countries and tighter
management of payment terms in Russia;
-
In 2014, trade payables increased by €19.5 million, compared to a €4.6
million decrease in 2013. The increase resulted primarily from the
seasonal effects of external costs, as well as a favorable base effect
at the end of 2013;
-
In 2014, the net change in other operating assets and liabilities
constituted a source of funds amounting to €11.6 million, versus a use
of funds totaling €30.8 million in 2013. For the 2014 financial year,
the Group recognized €25.0 million in deferred income related to the
renegotiated partnership contract with Galderma;
-
The change in net tax liability in 2014 represented a use of funds
totaling €24.9 million. That result compares to a source of funds a
year earlier amounting to €14.2 million, which stemmed primarily from
the reimbursement in 2013 of an excess amount of tax paid for the 2012
financial year.
-
Net cash flow used by investment activities
In the 2014 financial year, net cash used by investment activities
amounted to €93.7 million in net use of funds, compared with a €103.7
million net use of funds in the prior year. It included:
-
Investments in tangible and intangible assets, net of disposals,
totaling €84.2 million, versus €62.3 million at 31 December 2013. This
cash outflow mainly included:
-
€47.4 million in acquisitions of property, plant and equipment,
compared with €42.0 million in 2013. The increase was generated mainly
by capital spending to transfer the US research and development site
from Milford to Cambridge, capital spending at manufacturing sites, in
particular in the United Kingdom, and spending on IT assets;
-
€37.0 million in acquisitions of intangible assets, compared with
€20.4 million in 2013. In July 2014, Ipsen acquired control of the
intellectual property of Galderma's liquid toxin in the US, Canada,
Brazil, and Europe, in exchange for a €10.0 million payment. In
October 2014, Ipsen invested €18.0 million as part of a licensing
agreement with Lexicon Pharmaceuticals Inc. to market telotristat
etiprate outside of North America and Japan. In 2013, this item
included €12.0 million as part of the Group's partnership policy with
Active Biotech for tasquinimod.
-
In 2014, cash flow used by other investment activities included €3.6
million in changes in the scope of consolidation corresponding to the
change in consolidation method for the Swiss company Linnea1.
In 2013, this item included the use of €26.2 million to acquire
Syntaxin Ltd. on 12 July 2013, and a €12.7 million decrease in working
capital requirement corresponding mainly to a milestone payment made
to Active Biotech for tasquinimod in 2013 and recognized in 2012.
-
Net cash provided (used) by financing activities
In
2014, net cash used in financing activities represented a net use of
funds totaling €97.7 million, compared with €76.5 million in net use
of funds in 2013. The movement resulted primarily from a €65.7 million
dividend payment and €31.7 million in own share purchases.
-
Net cash provided (used) by discontinued operations
At
31 December 2014, net cash provided (used) by discontinued operations
amounted to use of funds totaling €0.4 million related to the supply
of clinical samples to Baxter. That result compares to a €6.7 million
source of funds a year earlier, corresponding primarily to the
recovery of USD 22.5 million in OBI-1 sales rights as part of the
renegotiation of the strategic partnership with Inspiration
Biopharmaceuticals Inc. announced 21 August 2012.
___________________ 1 In accordance with the norm IFRS11
« Partnerships » applicable since 1st January 2014 on the
accounting treatment of joint ventures
-
Breakdown of Group cash flow
(in millions of euros)
|
|
|
31 december 2014
|
|
31 december 2013
|
Cash
|
|
|
69,1
|
|
63,1
|
Short-term investments
|
|
|
117,1
|
|
67,8
|
Interest-bearing deposits
|
|
|
0,1
|
|
0,1
|
Cash and cash equivalents
|
|
|
186,3
|
|
131,0
|
Bank overdrafts
|
|
|
(6,1)
|
|
(5,6)
|
Closing net cash and cash equivalents
|
|
|
180,1
|
|
125,4
|
Other financial liabilities
|
|
|
(12,1)
|
|
(12,3)
|
Non-current liabilities
|
|
|
(12,1)
|
|
(12,3)
|
Bank loans
|
|
|
(4,0)
|
|
(4,0)
|
Financial liabilities
|
|
|
(4,0)
|
|
(3,5)
|
Current liabilities
|
|
|
(8,0)
|
|
(7,5)
|
Debt
|
|
|
(20,1)
|
|
(19,9)
|
Derivative financial instruments
|
|
|
0,8
|
|
0,2
|
Net cash and cash equivalents (*)
|
|
|
160,8
|
|
105,7
|
|
|
|
|
|
|
(*) Net cash and cash equivalents: Cash and cash equivalents,
less bank overdrafts, bank loans and other financial liabilities, with
derivative financial instruments added back.
On 17 October 2014, Ipsen S.A. refinanced a syndicated loan it had
contracted in 2012. As a result, the total amount of the loan increased
from €400 million to €500 million for a duration of five years with two
one-year extension options.
This new, multiple-currency credit line was established to meet the
general financing needs of the Group's operations. At the initiative of
the borrower, the line may be drawn down for short-term periods.
Under the terms of the contract, the Group must respect the following
covenant ratios at the close of each half-year period:
-
Net debt to equity: less than 1x
-
Net debt to EBITDA1: less than 3.5x
In the event of default, the bank syndicate may demand early repayment
of the loan agreement.
At 31 December 2014, the Group had a positive net cash position. As a
result, the net-debt-to-equity and net-debt-to-EBITDA1
covenant ratios were not meaningful.
____________________ 1 EBITDA: Earnings Before interest,
Taxes, Depreciation and Amortization
APPENDIX 1
Consolidated income statement
(in millions of euros)
|
|
|
31 december
2014
|
|
31 december 2013
restated
|
Sales
|
|
|
1 274,8
|
|
1 224,8
|
Other revenues
|
|
|
57,6
|
|
57,0
|
Revenue
|
|
|
1 332,4
|
|
1 281,8
|
Cost of goods sold
|
|
|
(310,0)
|
|
(305,3)
|
Selling expenses
|
|
|
(464,1)
|
|
(442,9)
|
Research and development expenses
|
|
|
(186,9)
|
|
(195,8)
|
General and administrative expenses
|
|
|
(111,2)
|
|
(103,8)
|
Other core operating income
|
|
|
9,4
|
|
3,8
|
Other core operating expenses
|
|
|
(9,1)
|
|
(9,8)
|
Core operating income
|
|
|
260,6
|
|
228,0
|
Other operating income
|
|
|
0,4
|
|
1,9
|
Other operating expenses
|
|
|
(9,6)
|
|
(6,6)
|
Restructuring costs
|
|
|
(21,9)
|
|
(0,2)
|
Impairment losses
|
|
|
(8,0)
|
|
(12,6)
|
Operating income
|
|
|
221,4
|
|
210,5
|
Investment income
|
|
|
1,7
|
|
8,0
|
Financing costs
|
|
|
(4,7)
|
|
(2,2)
|
Net financing costs
|
|
|
(3,0)
|
|
5,8
|
Other financial income and expense
|
|
|
(12,0)
|
|
(14,8)
|
Income taxes
|
|
|
(53,8)
|
|
(59,3)
|
Share of profit (loss) from associates and joint ventures
|
|
|
1,9
|
|
-
|
Net profit (loss) from continuing operations
|
|
|
154,5
|
|
142,2
|
Net profit (loss) from discontinued operations
|
|
|
(0,5)
|
|
10,9
|
Consolidated net profit
|
|
|
154,0
|
|
153,1
|
- Attributable to shareholders of Ipsen S.A.
|
|
|
153,5
|
|
152,5
|
- Non-controlling interest
|
|
|
0,5
|
|
0,6
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share, continuing operations (in € per share)
|
|
|
1,88
|
|
1,71
|
Diluted earnings per share, continuing operations (in € per share)
|
|
|
1,87
|
|
1,70
|
|
|
|
|
|
|
Basic earnings per share, discontinued operations (in € per share)
|
|
|
(0,01)
|
|
0,13
|
Diluted earnings per share, discontinued operations (in € per share)
|
|
|
(0,01)
|
|
0,13
|
|
|
|
|
|
|
Basic earnings per share (in € per share)
|
|
|
1,87
|
|
1,84
|
Diluted earnings per share (in € per share)
|
|
|
1,87
|
|
1,83
|
|
|
|
|
|
|
APPENDIX 2
Consolidated balance sheet before allocation of net profit
|
|
|
|
|
|
(in millions of euros)
|
|
|
31 december 2014
|
|
31 december 2013
|
ASSETS
|
|
|
|
|
|
Goodwill
|
|
|
324,4
|
|
310,7
|
Other intangible assets
|
|
|
160,9
|
|
144,8
|
Property, plant & equipment
|
|
|
309,6
|
|
287,5
|
Equity investments
|
|
|
15,0
|
|
6,7
|
Investments in associates and joint ventures
|
|
|
13,7
|
|
-
|
Non-current financial assets
|
|
|
4,2
|
|
1,5
|
Other non-current assets
|
|
|
9,3
|
|
9,7
|
Deferred tax assets
|
|
|
204,6
|
|
202,5
|
Total non-current assets
|
|
|
1 041,7
|
|
963,5
|
Inventories
|
|
|
105,5
|
|
121,5
|
Trade receivables
|
|
|
243,5
|
|
243,5
|
Current tax assets
|
|
|
65,9
|
|
42,8
|
Other current assets
|
|
|
67,8
|
|
60,3
|
Current financial assets
|
|
|
0,1
|
|
0,2
|
Cash and cash equivalents
|
|
|
186,3
|
|
131,0
|
Assets of disposal group classified as held for sale
|
|
|
2,6
|
|
2,6
|
Total current assets
|
|
|
671,6
|
|
601,8
|
TOTAL ASSETS
|
|
|
1 713,3
|
|
1 565,3
|
|
|
|
|
|
|
EQUITY AND LIABILITIES
|
|
|
|
|
|
Share capital
|
|
|
82,9
|
|
84,2
|
Additional paid-in capital and consolidated reserves
|
|
|
801,7
|
|
743,4
|
Net profit (loss) for the period
|
|
|
153,5
|
|
152,5
|
Exchange differences
|
|
|
27,1
|
|
(8,7)
|
Equity attributable to Ipsen shareholders
|
|
|
1 065,2
|
|
971,5
|
Attributable to minority interests
|
|
|
2,7
|
|
2,2
|
Total shareholders' equity
|
|
|
1 067,9
|
|
973,8
|
Retirement benefit obligation
|
|
|
59,6
|
|
45,7
|
Provisions
|
|
|
42,1
|
|
45,0
|
Other financial liabilities
|
|
|
12,1
|
|
12,3
|
Deferred tax assets
|
|
|
5,6
|
|
6,8
|
Other non-current liabilities
|
|
|
115,8
|
|
105,6
|
Total non-current liabilities
|
|
|
235,2
|
|
215,4
|
Provisions
|
|
|
26,0
|
|
20,7
|
Bank loans
|
|
|
4,0
|
|
4,0
|
Financial liabilities
|
|
|
4,0
|
|
3,5
|
Trade payables
|
|
|
179,8
|
|
154,8
|
Current tax liabilities
|
|
|
4,1
|
|
5,8
|
Other current liabilities
|
|
|
186,1
|
|
181,7
|
Bank overdrafts
|
|
|
6,1
|
|
5,6
|
Total current liabilities
|
|
|
410,2
|
|
376,2
|
TOTAL EQUITY & LIABILITIES
|
|
|
1 713,3
|
|
1 565,3
|
|
|
|
|
|
|
APPENDIX 3
Consolidated statement of cash flow
(in millions of euros)
|
|
|
31 december 2014
|
|
31 december 2013
|
|
|
|
Continuing operations
|
|
Operations held for sale / discontinued operations
|
|
Total
|
|
Continuing operations
|
|
Operations held for sale / discontinued operations
|
|
Total
|
Consolidated net profit
|
|
|
154,5
|
|
(0,5)
|
|
154,0
|
|
142,2
|
|
10,9
|
|
153,1
|
Share of profit (loss) from associates before impairment losses
|
|
|
(0,3)
|
|
-
|
|
(0,3)
|
|
-
|
|
-
|
|
-
|
Profit (loss) before share from associated companies and join
ventures
|
|
|
154,2
|
|
(0,5)
|
|
153,7
|
|
142,2
|
|
10,9
|
|
153,1
|
Non-cash and non-operating items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Depreciation, amortization, provisions
|
|
|
50,2
|
|
-
|
|
50,2
|
|
25,6
|
|
0,1
|
|
25,7
|
- Impairment losses included in operating income and net financial
income
|
|
|
8,0
|
|
-
|
|
8,0
|
|
12,6
|
|
-
|
|
12,6
|
- Change in fair value of financial derivatives
|
|
|
(2,7)
|
|
-
|
|
(2,7)
|
|
(0,1)
|
|
-
|
|
(0,1)
|
- Profit on disposals of non-current assets
|
|
|
2,6
|
|
-
|
|
2,6
|
|
0,6
|
|
0,1
|
|
0,7
|
- Share of government grants released to profit and loss
|
|
|
(0,0)
|
|
-
|
|
(0,0)
|
|
(0,1)
|
|
-
|
|
(0,1)
|
- Exchange differences
|
|
|
9,8
|
|
-
|
|
9,8
|
|
3,4
|
|
-
|
|
3,4
|
- Change in deferred taxes
|
|
|
13,8
|
|
-
|
|
13,8
|
|
11,6
|
|
(3,4)
|
|
8,2
|
- Share-based payment expense
|
|
|
4,8
|
|
-
|
|
4,8
|
|
5,0
|
|
-
|
|
5,0
|
- Gain or loss on sales of treasury shares
|
|
|
0,1
|
|
-
|
|
0,1
|
|
0,2
|
|
-
|
|
0,2
|
- Other non-cash items
|
|
|
(0,0)
|
|
-
|
|
(0,0)
|
|
0,4
|
|
-
|
|
0,4
|
Cash flow from operating activities before changes in working
capital requirement
|
|
|
240,9
|
|
(0,5)
|
|
240,5
|
|
201,6
|
|
7,7
|
|
209,3
|
- (Increase)/decrease in inventories
|
|
|
7,6
|
|
-
|
|
7,6
|
|
2,9
|
|
-
|
|
2,9
|
- (Increase)/decrease in trade receivables
|
|
|
(8,5)
|
|
-
|
|
(8,5)
|
|
(1,8)
|
|
-
|
|
(1,8)
|
- Increase/(decrease) in trade payables
|
|
|
19,5
|
|
-
|
|
19,5
|
|
(4,6)
|
|
-
|
|
(4,6)
|
- Net change in income tax liability
|
|
|
(24,9)
|
|
-
|
|
(24,9)
|
|
14,2
|
|
(0,2)
|
|
13,9
|
- Net change in other operating assets and liabilities
|
|
|
11,6
|
|
0,0
|
|
11,6
|
|
(30,8)
|
|
(0,7)
|
|
(31,5)
|
Change in working capital requirement related to operating
activities
|
|
|
5,3
|
|
0,0
|
|
5,3
|
|
(20,1)
|
|
(1,0)
|
|
(21,1)
|
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
|
|
|
246,2
|
|
(0,4)
|
|
245,8
|
|
181,4
|
|
6,7
|
|
188,1
|
Acquisition of property, plant & equipment
|
|
|
(47,4)
|
|
-
|
|
(47,4)
|
|
(42,0)
|
|
-
|
|
(42,0)
|
Acquisition of intangible assets
|
|
|
(37,0)
|
|
-
|
|
(37,0)
|
|
(20,4)
|
|
-
|
|
(20,4)
|
Proceeds from disposal of intangible assets and property, plant &
equipment
|
|
|
0,3
|
|
-
|
|
0,3
|
|
0,2
|
|
-
|
|
0,2
|
Acquisition of shares in non-consolidated companies
|
|
|
(0,1)
|
|
-
|
|
(0,1)
|
|
0,0
|
|
-
|
|
0,0
|
Payments to post-employment benefit plans
|
|
|
(1,0)
|
|
-
|
|
(1,0)
|
|
(2,3)
|
|
-
|
|
(2,3)
|
Impact of changes in the consolidation scope
|
|
|
(3,6)
|
|
-
|
|
(3,6)
|
|
(26,2)
|
|
-
|
|
(26,2)
|
Other cash flow related to investment activities
|
|
|
(2,5)
|
|
-
|
|
(2,5)
|
|
(0,4)
|
|
-
|
|
(0,4)
|
Deposits paid
|
|
|
0,3
|
|
-
|
|
0,3
|
|
0,3
|
|
-
|
|
0,3
|
Change in working capital related to operating activities
|
|
|
(2,6)
|
|
-
|
|
(2,6)
|
|
(12,7)
|
|
-
|
|
(12,7)
|
NET CASH PROVIDED (USED) BY INVESTMENT ACTIVITIES
|
|
|
(93,7)
|
|
-
|
|
(93,7)
|
|
(103,7)
|
|
-
|
|
(103,7)
|
Additional long-term borrowings
|
|
|
2,2
|
|
-
|
|
2,2
|
|
-
|
|
-
|
|
-
|
Repayment of long-term borrowings
|
|
|
(5,2)
|
|
-
|
|
(5,2)
|
|
(0,2)
|
|
-
|
|
(0,2)
|
Net change in short-term borrowings
|
|
|
-
|
|
-
|
|
|
|
0,1
|
|
-
|
|
0,1
|
Capital increase by Ipsen
|
|
|
3,1
|
|
-
|
|
3,1
|
|
0,8
|
|
-
|
|
0,8
|
Treasury shares
|
|
|
(31,7)
|
|
-
|
|
(31,7)
|
|
(16,4)
|
|
-
|
|
(16,4)
|
Dividends paid by Ipsen
|
|
|
(65,5)
|
|
-
|
|
(65,5)
|
|
(66,6)
|
|
-
|
|
(66,6)
|
Dividends paid by subsidiaries to minority interests
|
|
|
(0,2)
|
|
-
|
|
(0,2)
|
|
(0,3)
|
|
-
|
|
(0,3)
|
DIP financing
|
|
|
-
|
|
-
|
|
-
|
|
7,1
|
|
-
|
|
7,1
|
Change in working capital related to operating activities
|
|
|
(0,5)
|
|
-
|
|
(0,5)
|
|
(1,0)
|
|
-
|
|
(1,0)
|
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES
|
|
|
(97,7)
|
|
-
|
|
(97,7)
|
|
(76,6)
|
|
-
|
|
(76,6)
|
CHANGE IN CASH AND CASH EQUIVALENTS
|
|
|
54,9
|
|
(0,4)
|
|
54,4
|
|
1,2
|
|
6,7
|
|
7,9
|
Opening cash and cash equivalents
|
|
|
125,4
|
|
-
|
|
125,4
|
|
113,3
|
|
-
|
|
113,3
|
Impact of exchange rate fluctuations
|
|
|
0,4
|
|
-
|
|
0,4
|
|
4,1
|
|
-
|
|
4,1
|
Closing cash and cash equivalents
|
|
|
180,6
|
|
(0,4)
|
|
180,1
|
|
118,6
|
|
6,7
|
|
125,4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
APPENDIX 4
Reconciliation of the income statement reported at 31 December
2013 and the restated income statement at 31 December 2013 released in
2014
As part of the effort to implement its new organization, the Group
reviewed the presentation of its financial statements and changed the
classification of certain items on its income statement, with the view
that the new presentation would provide more relevant information to
financial statement readers.
-
The Group decided to present core operating income as the main
management indicator for understanding and measuring the performance
of its activities going forward. Items not included in core operating
income are not tabbed as "exceptional" or "extraordinary" but
correspond to unusual, abnormal or infrequent items of disclosure
targeted in paragraph 28 of the IASB Framework.
-
Research tax credits were reclassified as operating grants, in
accordance with common practice within the pharmaceutical industry. In
accordance with IAS 20 - Accounting for Government Grants and
Disclosure of Government Assistance, operating grants are now
recognized in core operating income, after the R&D expenses to which
they are directly linked have been deducted. In previous years,
research tax credits were disclosed in income taxes.
-
Royalties paid under a license for products marketed by the Group are
now recognized in the cost of goods sold, in accordance with common
practices within the pharmaceutical industry. In previous years, they
were recognized as selling expenses.
-
The allocation of internal costs within the various functions was
revised on the consolidated income statement following the
implementation of the new organization. As a result, certain support
function expenses previously recognized as research and development
costs were reclassified as selling expenses, a move deemed by the
Group to be more relevant given the activity of the concerned services
and the new organization.
These reclassifications had no impact on net profit.
The Group on 31 December 2014 applied the new income statement format,
which complies with IAS 1 Revised, and restated the comparison reporting
periods in accordance with the new presentation as well.
The impact of the various reclassifications on the consolidated income
statement for the period ended 31 December 2013 is presented in the
following table:
(in millions of euros)
|
|
|
31 december 2013
reported
|
|
Royalties
|
|
Research tax credit
|
|
Internal Medical department
|
|
Reclassification of other operating income and expenses
|
|
Amortization of intangible assets
|
|
|
|
31 december 2013
restated
|
Sales
|
|
|
1 224,8
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Sales
|
|
1 224,8
|
Other revenues
|
|
|
57,0
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Other revenues
|
|
57,0
|
Revenues
|
|
|
1 281,8
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Revenues
|
|
1 281,8
|
Cost of Goods sold
|
|
|
(253,4)
|
|
(51,9)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Cost of Goods sold
|
|
(305,3)
|
Selling expenses
|
|
|
(451,3)
|
|
51,9
|
|
-
|
|
(43,5)
|
|
-
|
|
-
|
|
Selling expenses
|
|
(442,9)
|
Research and development expenses
|
|
|
(259,1)
|
|
-
|
|
19,7
|
|
43,5
|
|
-
|
|
-
|
|
Research and development expenses
|
|
(195,8)
|
General and administrative expenses
|
|
|
(103,8)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
General and administrative expenses
|
|
(103,8)
|
|
|
|
|
|
|
|
|
|
|
|
3,8
|
|
-
|
|
Other Core operating income
|
|
3,8
|
|
|
|
|
|
|
|
|
|
|
|
(5,4)
|
|
(4,4)
|
|
Other Core operating expenses
|
|
(9,8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core Operating income
|
|
228,0
|
Other operating income
|
|
|
5,7
|
|
-
|
|
-
|
|
-
|
|
(3,8)
|
|
-
|
|
Other operating income
|
|
1,9
|
Other operating expenses
|
|
|
(12,0)
|
|
-
|
|
-
|
|
-
|
|
5,4
|
|
-
|
|
Other operating expenses
|
|
(6,6)
|
Amortization of intangible assets
|
|
|
(4,4)
|
|
-
|
|
-
|
|
-
|
|
|
|
4,4
|
|
|
|
-
|
Restructuring costs
|
|
|
(0,2)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Restructuring costs
|
|
(0,2)
|
Impairment gain/(losses)
|
|
|
(12,6)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Impairment gain/(losses)
|
|
(12,6)
|
Operating income
|
|
|
190,7
|
|
-
|
|
19,7
|
|
-
|
|
-
|
|
-
|
|
Operating income
|
|
210,5
|
Adjusted recurring operating income
|
|
|
208,6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net financing costs
|
|
|
5,8
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Net financing costs
|
|
5,8
|
Other financial income and expense
|
|
|
(14,8)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Other financial income and expense
|
|
(14,8)
|
Income taxes
|
|
|
(39,6)
|
|
-
|
|
(19,7)
|
|
-
|
|
-
|
|
-
|
|
Income taxes
|
|
(59,3)
|
Share of profit (loss) from associates
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Share of profit (loss) from associates
|
|
-
|
Net profit (loss) from continuing operations
|
|
|
142,2
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Net profit (loss) from continuing operations
|
|
142,2
|
Net profit (loss) from discontinued operations
|
|
|
10,9
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Net profit (loss) from discontinued operations
|
|
10,9
|
Consolidated net profit
|
|
|
153,1
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Consolidated net profit
|
|
153,1
|
- Attributable to shareholders of Ipsen S.A.
|
|
|
152,5
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
- Attributable to shareholders of Ipsen S.A.
|
|
152,5
|
- Non-controlling interest
|
|
|
0,6
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
- Non-controlling interest
|
|
0,6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
APPENDIX 5
Core consolidated net profit for 2014, versus prior year
Under the new presentation format for its income statement, the Group
uses core operating income as the main management indicator for
understanding and measuring the performance of its activities going
forward. Items not included in core operating income are not tabbed as
"exceptional" or "extraordinary" but correspond to unusual, abnormal or
infrequent items of disclosure targeted in paragraph 28 of the IASB
Framework.
Similarly, core consolidated net profit corresponds to net profit
adjusted for non-core items as defined above, net of taxes.
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