On July 28, 2016 Ipsen (Euronext: IPN; ADR: IPSEY), a global specialty-driven pharmaceutical group, reported financial results for the first half 2016 (Press release, Ipsen, JUL 28, 2016, View Source [SID:1234514094]).
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The Board of Directors, chaired by Marc de Garidel, met on 27 July 2016 to approve the financial statements for the first half 2016.
Extract of consolidated results for the first halves 2016 and 2015
(in million euros)
H1 2016
H1 2015
% change
Group sales
763.8
713.9
+9.7% 1
Specialty Care sales
613.5
548.9
+14.3%1
Primary Care sales
150.4
165.0
-5.9%1
Core Operating Income
188.8
167.6
+12.6%
Core operating margin
24.7%
23.5%
+1.2 pts
Consolidated net profit
133.3
90.5
+47.4%
Core EPS – fully diluted (€)
1.74
1.50
+16.0%
Free cash flow
73.6
22.4
+328.6%
Closing net cash2
17.3
70.8
-75.6%
Commenting on the first half 2016 performance, David Meek, Chief Executive Officer of Ipsen, said: “We are very pleased with the Group’s strong operating performance in the first half of 2016. Sales grew by nearly 10% year-on-year and core operating margin improved by 1.2 points, both driven primarily by solid Specialty Care growth.”
David Meek added: “Ipsen is in a unique transformational phase with several key drivers to accelerate growth. Somatuline and Dysport have both established strong momentum with additional opportunities for expanded indications. We are also preparing for the successful launch of two new products. First, Cabometyx in Europe for advanced renal cell carcinoma, for which we recently received a positive CHMP opinion, and subsequently, telotristat etiprate in 2017 to further build our position in the neuroendocrine tumor 1 Sales growth excluding foreign exchange impact 2 Cash and cash equivalents, less bank overdrafts, bank loans and other financial liabilities and excluding financial derivative instruments. 2/26 market. We continue to advance many important pipeline programs and are encouraged by the significant potential of the company as we enter this new era of growth.”
Review of the first half 2016 results
Note: Unless stated otherwise, all variations in sales are stated excluding foreign exchange impacts. In the first half of 2016, Group sales reached €763.8 million, up 9.7% year-on-year. Specialty Care sales reached €613.5 million, up 14.3%, driven by the strong growth of Somatuline in the neuroendocrine tumor indication in North America, as well as a solid performance throughout Europe.
For Dysport , good performance in Russia, the US and Germany was offset by inventory trends in the Middle East and Brazil. Decapeptyl sales reflect good volume growth in Europe offset by inventory trends in the Middle East and price pressure in China. In the first half of 2016, Primary Care reached €150.4 million, down 5.9% year-on-year. Sales were impacted by lower Smecta sales in Asia and Tanakan sales in Russia.
Core Operating Income totaled €188.8 million in the first half of 2016, up 12.6%. Core operating margin reached 24.7%, up 1.2 points compared to the first half of 2015, mainly driven by strong business performance, partially offset by investments for the Cabometyx launch and the adverse impact of foreign currencies.
Consolidated net profit was €133.3 million, up 47.4% over the period, compared to €90.5 million in 2015, which included the net impact of the depreciation of intangible assets related to tasquinimod in the amount of €39.6 million after tax.
Fully diluted core earnings per share (see Appendix 4) grew by 16.0% year-on-year to reach €1.74 for the first half of 2016, compared to €1.50 in 2015.
Free cash flow generated in the first half of 2016 reached €73.6 million, up significantly by €51.2 million, driven by the increase in core operating income and improved management of working capital.
Closing net cash reached €17.3 million as of June 2016, compared to €70.8 million as of June 2015 after the upfront payment for the cabozantinib license to Exelixis for €183.8 million in March 2016.
2016 financial objectives
Based on the first half 2016 performance, the Group raises its guidance for Specialty Care sales growth to greater than 12% and reaffirms its target for Core Operating margin of around 21%, assuming higher investments required to prepare the commercial launch of Cabometyx, and further investments in the US to support the accelerated growth of Somatuline and additional launches of Dysport .
Previous FY 2016 guidance
Revised FY 2016 guidance
Specialty Care growth
Growth >+10%
Growth >+12%
Primary Care growth
Slight growth
Slight growth
Core Operating margin
Around 21%
Around 21%
Sales objectives are set at constant currency.
The interim financial report, with regard to regulated information, is available on the Group’s website, www.ipsen.com, under the Regulated Information tab in the Investor Relations section.