Bloomberg News

Ipsen Shares Jump as Profit Surges, Finance Chief Joins

August 30, 2011

(Updates with closing stock price in fifth paragraph.)

Aug. 30 (Bloomberg) -- Ipsen SA rose the most in eight months in Paris trading after reporting a 22 percent increase in profit, raising a sales forecast and appointing a finance chief.

Net income climbed to 91.7 million euros ($133 million) in the six months ended June 30 from 75.5 million euros a year earlier, the French drugmaker said in a statement today. That beat the average analyst estimate of 78.7 million euros.

Ipsen named Susheel Surpal, a former executive at Sodexho Inc. and Bic SA, as chief financial officer to replace Claire Giraut, who announced her departure in May. The company, based in Boulogne Billancourt, predicted that full-year sales of primary care products would drop by 3 percent to 5 percent, less than the 8 percent to 10 percent decline forecast in June.

“It was a solid set of results,” Pierre Corby, an analyst at Aurel BCG in Paris who recommends buying the stock, said in a telephone interview. “Primary care sales held up and operating profit was well above expectations.”

Operating profit rose 15 percent to 121 million euros. Ipsen jumped 1.75 euros, or 7.9 percent, to 23.89 euros at the 5:30 p.m. close of trading in Paris. The gain was the largest since Jan. 5.

The stock lost 23 percent in the two months that followed a June 9 presentation by Chief Executive Officer Marc de Garidel on plans to reorganize Ipsen by focusing research on disease- causing substances known as toxins and peptides and seeking a partnership for its French primary care operations.

‘Creative’ Partnership

“Investors were disappointed by a lack of more drastic measures and Ipsen shares suffered for a while,” Corby said. “This set of results, coupled with the implementation of the reorganization plan, may help drive up the shares, going forward, slowly but progressively.”

Ipsen has begun talks with potential partners for an agreement on the primary care unit, de Garidel told reporters on a conference call today. The company will remain “creative” about the form the partnership takes, depending on the proposals it receives, said the executive, who took over in November. Ipsen may announce the transaction by year-end or the start of 2012, he said.

Ipsen reiterated that full-year revenue from specialty products such as the Dysport anti-wrinkle treatment and Somatuline, a drug to fight acromegaly as well as cancer, will increase 8 percent.

The company also said it’s targeting recurring adjusted operating income within a range of 190 million to 200 million euros this year excluding currency movements, a forecast that’s “in line with current consensus expectations,” Cedric Moreau, an analyst at Bryan, Garnier & Co. in Paris, wrote in a note to clients. “We see this objective as very cautious.”

Specialty care products such as Dysport remain “the main growth pillar of the company,” according to Moreau.

--Editors: Marthe Fourcade, Robert Valpuesta

To contact the reporter on this story: Albertina Torsoli in Paris at atorsoli@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net


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