Ipsen Sa · EURONEXT:IPN
Ipsen Sa — H1 2014 Earnings Presentation
38 slides from Ipsen Sa's earnings presentation, Sep 4, 2014
Slide 1: 2014 First Half Financial Results
Ipsen 2014 First Half Financial Results Bank of America Merrill Lynch Roadshow - Boston / New York, September 4-5, 2014 IPSEN pour nom de la société - 07/04/2011 / page 1
Slide 2: Disclaimer
Disclaimer This presentation includes only summary information and does not purport to be comprehensive. Forward-looking statements, targets and estimates contained herein are for illustrative purposes only and are based on management’s current views and assumptions. Such statements involve known an
Slide 3: Safe Harbor
Safe Harbor The Group operates in certain geographical regions whose governmental finances, local currencies or inflation rates could be affected by the current crisis, which could in turn erode the local competitiveness of the Group’s products relative to competitors operating in local currency, an
Slide 4: Business update
Business update
Slide 5: Ipsen well positioned to deliver strong results in 2014 and beyond
Ipsen well positioned to deliver strong results in 2014 and beyond Strong sales and operating performance driven by double-digit growth of Somatuline® & Decapeptyl® and appropriate cost control Sales and Core EBIT margin guidance revised upward to reflect good business momentum Somatuline® NET launc
Slide 6: Business update
Business update Somatuline®: NET market opportunity and 1 launch preparation Dysport®: Several growth levers including new 2 Galderma deal Note: NET = Neuroendocrine tumors 6 Bank of America Merrill Lynch Roadshow - Boston / New York, September 4-5, 2014
Slide 7: Significant increase in neuroendocrine tumors (NET) incidence in the US
Significant increase in neuroendocrine tumors (NET) incidence in the US… Evolution of annual NET incidence in the US Per 100 000 Americans 6.4(2) ~x1.2 5.25(1) ~x4.8 1.09 1973 2004 2010 US incidence increased ~6x in 40 years, driven by improved diagnosis and disease awareness (1) Yao JC et al.J Clin
Slide 8: But still high unmet needs in today's US GEP-NET market
… but still high unmet needs in today’s US GEP-NET market Up to (1) 80% >60% (2) up to 54% (3) 0 (4) Patients with Asymptomatic patients 5-year survival rate Number of FDA- GEP-NETs whose disease who receive nothing, or for patients with approved has metastasized at something other than an distant m
Slide 9: Somatuline could potentially be used along the entire treatment paradigm
Somatuline® could potentially be used along the entire treatment paradigm Expansion potential for Somatuline® Somatuline® Aggressive therapies Watch & Wait Competitors Aggressive therapies + SSA Somatuline®, potentially the first and only antitumoral SSA for the treatment of GEP-NETs Note: GEP-NETs
Slide 10: Primary paper in the New England Journal of Medicine echoed by other major publications
Primary paper in the prestigious New England Journal of Medicine echoed by other major publications New England Journal of Medicine Lanreotide in Metastatic Enteropancreatic Neuroendocrine Tumors(1) 17 July 2014 The Lancet Neuroendocrine cancer Clarinet: new option for Nets(2) 25 July 2014 Nature Re
Slide 11: US launch plan for Somatuline in GEP-NETs on track
US launch plan for Somatuline® in GEP-NETs on track H1 2014 H2 2014 H1 2015 Q1 Q2 Q3 Q4 Q1 Q2 Go-it alone decision in the US Cynthia Schwalm & full Cynthia Schwalm appointed US executive team hired for launch President & CEO of IPSEN N.A. Regulatory/ Commercial Marketing authorization Accept
Slide 12: Ipsen and Galderma expand their partnership to become a world leader in neurotoxins
Ipsen and Galderma expand their partnership to become a world leader in neurotoxins Exclusive partners Indications Territories(1) Coverage Therapeutics Commercialization Aesthetics & R&D dermatology Commercialization: Galderma paid €25 million to Ipsen as part of this renegotiated agreement(2)
Slide 13: Short and long term Dysport growth drivers
Short and long term Dysport® growth drivers Positive Phase III data presented at major neurology congresses Dysport® AUL US filing expected in H2 2014 Global spasticity market opportunity of [€200m - €300m](1) Dysport® other PLL(2) and ALL(3) spasticity Phase III topline results expected in
Slide 14: H1 2014 – Operational overview
H1 2014 – Operational overview
Slide 15: H1 2014: Strong sales and operating performance
H1 2014: Strong sales and operating performance Encouraging performance for Somatuline®, up 14.6%(1), growing double-digit across all geographies(2) Strong performance of Decapeptyl®, up 10.3%(1), benefitting from favorable comparison base in China and Middle East Stable(1) Primary care sales, drive
Slide 16: Strong specialty care fueled by Somatuline and Decapeptyl, resilient primary care
Strong specialty care fueled by Somatuline® and Decapeptyl®, resilient primary care supported by international growth Drug sales – H1 2014 in million euros – % excluding foreign exchange impact ® Decapeptyl +10.3% 160.5 ® Somatuline +14.6% 139.3 Specialty care Specialty care ® €472.5m Dysport +4.3%
Slide 17: Price pressure and FX have uneven impacts on specialty care product growth
Price pressure and FX have uneven impacts on specialty care product growth H1 2014 volume and value growth H1 2014 sales geographic distribution 15.5% Somatuline® 14.6% Somatuline® 49% 14% 23% 14% 12.9% 6.8% Dysport® 4.3% Dysport® 19% 9% 26% 46% -1.5% 10.9% Decapeptyl® 10.3% Decapeptyl® 48% 9% 43% 9
Slide 18: Strong rebound of Decapeptyl after a difficult year 2013 in China and the Middle East
Strong rebound of Decapeptyl® after a particularly difficult year 2013 in China and the Middle East Decapeptyl® sales in million euros at current currency +2.8% France Europe Spain Top 4 negative Greece contributors Other Middle China Poland France 3.3 East Spain Middle 1.9 Greece East 5.4 (3.8) Chi
Slide 19: Group sales growth driven by emerging markets and Somatuline performance
Group sales growth driven by emerging markets and Somatuline® performance in developed markets H1 sales in million euros GROUP SALES growth: +3.6% at constant currency Somatuline® developed markets French PC Top 4 Increlex® Emerging (7.0) 16.7 (6.4) Other markets(1) (1.6) 20.4 638.7 616.6 H1 2013(2)
Slide 20: Growth continuously driven by emerging markets
Growth continuously driven by emerging markets H1 2014 yoy growth Strong Decapeptyl® performance, helped by favorable c.+15% comparison base China Solid Smecta® volume growth Successful OTC campaign on Tanakan® Russia c.+9% Solid Dysport® volume growth Overall slowdown in strained environm
Slide 21: Core Operating Income growing much faster than sales
Core Operating Income growing much faster than sales… Group sales evolution (current FX) Core Operating Income evolution (current FX) +0.8% +12.5% €162.0m €638.7m €633.6m 25.4% +2.7 pts €144.0m 22.7% H1 2013 restated H1 2014 H1 2013 restated H1 2014 Sales growth hit by FX, Core Operating Income grow
Slide 22: Boosted by significant reduction in SMM expenses
… boosted by significant reduction in SMM expenses, more than offsetting inflation and new projects Total Opex SMM New projects(1) Inflation Cost reduction New Cost Inflation projects(1) reduction €519.9m (€13.1m) €506.8m 82.0% -2.7 pts 79.3% €223.3m (€11.9m) €211.4m 35.2% -2.1 pts 33.1% H1 2013 H1
Slide 23: H1 2014 – Financial overview
H1 2014 – Financial overview
Slide 24: Rationale for the accounting changes
Rationale for the accounting changes Use the opportunity of the new reporting of Specialty Care vs. Primary Care activities to align the P&L so as to: 1 Comply with IASB and AMF recommendations 2 Better reflect industry standards 3 Provide transparent and pertinent information to investors 24 Bank o
Slide 25: Key changes to have in mind
Key changes to have in mind… 1 Royalties paid From selling expenses to COGS 2 R&D Tax Credit From income taxes to R&D expenses 3 Medical marketing From R&D expenses to selling expenses Creation of a 4 “Core Operating Income” aggregate To replace Recurring Adj. Operating Income Reclassificati
Slide 26: H1 2013 P&L reconciliation
H1 2013 P&L reconciliation 31 June 31 June R&D tax Medical Dep. Of in million euros Impact Royalties OIE Split 2013 2013 credit marketing intangibles Pro forma Net sales = 633.6 633.6 Other revenues = 30,3 30.3 Revenue = 663,9 663,9 Cost of goods sold (125.2) (27.3) (152.5) Selling expenses (229
Slide 27: Condensed P&L
Condensed P&L H1 2013 in million euros H1 2014 % change restated Sales 633.6 638.7 +0.8% Other revenues 30.3 30.1 (0.7)% Revenues 663.9 668.8 +0.7% Cost of goods sold (152.5) (155.8) +2.2% Selling and marketing expenses (223.3) (211.4) (5.3)% Research and development expenses (90.4) (87.6) (3.1)%(1)
Slide 28: Main P&L items: Below operating income
Main P&L items: Below operating income Financial Result (€m) Effective tax rate 32.7% 28.2% 1.1 (2.2) H1 2013 H1 2014 H1 2013 H1 2014 Net income from discontinued operations (€m) EPS (€) Core +18.6% Reported +9.6% 6.2 1.40 1.26 1.15 1.18 (0.2) H1 2013 H1 2014 H1 2013 H1 2014 Note: H1 2013 figures ha
Slide 29: Balance sheet evolution
Balance sheet evolution ASSETS LIABILITIES FY 2013 FY 2013 in million euros H1 2014 in million euros H1 2014 Restated Restated Goodwill 310.7 312.3 Capital and reserves 971.5 980.3 Investments in associates 0.0 12.9 Minority interest 2.2 2.5 Property, plant and 287.5 296.0 Total equity 973.7 982.8 e
Slide 30: Solid cash flow generation
Solid cash flow generation in million euros H1 2013 Restated H1 2014 Consolidated net profit 96.5 104.5 Share of profit (loss) from associated companies before impairment gain/(losses) 0.0 0.4 Non cash and non operating items 43.4 23.1 of which Depreciation, amortization, provisions 18.5 15.7 of whi
Slide 31: Closing remarks and 2014 outlook
Closing remarks and 2014 outlook
Slide 32: Sales objectives raised for 2014
Sales objectives raised for 2014 Initial 2014 guidance Revised 2014 guidance Specialty Care sales growth [+4.0%; +6.0%] [+6.0%; +8.0%] – driven by strong growth of Somatuline®, solid Decapeptyl® performance notably due to normalization of the situation in China and the Middle East, and resumption of
Slide 33: 2014 profitability objective raised
2014 profitability objective raised, due to a mix of underlying and technical effects 2014 profitability guidance upgrade ~+200 bps Integration of R&D tax credit in Core Operating Income ~+100 bps [19%-20%] Improvement in 2014 sales prospects [17%-18%] [16%-17%] Initial guidance Raised guidance Rest
Slide 34: Continued business development efforts to complement organic growth
In 2014, continued business development efforts to complement organic growth Areas of focus In-licensing or acquisition of marketed drugs (including orphan drugs) Commercial deals Acquisition of small companies Various geographies targeted, notably the US Late stage compounds (Phase III) in
Slide 35: Tasquinimod, potentially a new first-in-class oral therapy for metastatic CRPC
Tasquinimod, potentially a new first-in-class oral therapy for chemo naïve patients with metastatic CRPC Immune activation A unique mechanism Anti-angiogenic effects of action… Anti-metastatic effects … which could fill gaps in the Some patients do not respond to/escape current hormonal curr
Slide 36: You will hear from us in the months to come
You will hear from us in the months to come… Regulatory authorities decision on whether to accept Somatuline® NET filing FDA decision on whether to grant priority review TasQ Phase III clinical results 36 Bank of America Merrill Lynch Roadshow - Boston / New York, September 4-5, 2014
Slide 37: Ipsen well positioned to deliver strong results in 2014 and beyond
Ipsen well positioned to deliver strong results in 2014 and beyond Strong sales and operating performance driven by double-digit growth of Somatuline® & Decapeptyl® and appropriate cost control Sales and Core EBIT margin guidance revised upward to reflect good business momentum Somatuline® NET launc
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