Ipsen Net Debt Hits 669.4 Million Euros After Acquisitions

The Tip Desk · June 30, 2017 · 2 min read

The pharmaceutical company increased its specialty medicine revenue to 764.6 million euros in the first half of 2017.

Ipsen used 738.0 million euros of net cash during the first half of 2017 to fund the acquisition of Onivyde assets, a portfolio of OTC products including Prontalgine, and a stake in Akkadeas Pharma. This spending resulted in net debt of 669.4 million euros.

Specialty medicine drove the company's growth, with sales in this segment reaching 764.6 million euros. This represented 83.2% of total group sales, up from 80.3% a year earlier. The company attributed this trajectory to the growth of Somatuline in the United States and Europe, as well as incremental sales from Cabometyx and Onivyde.

Operating results for specialty medicine rose to 281.3 million euros, or 36.8% of the segment's revenue. Total group revenue for the period reached 919.5 million euros, a 20.4% increase compared to the first half of 2016.

Conversely, the family health segment saw its operating result fall to 47.1 million euros, representing 30.4% of its revenue. This was a decrease from the 35.8% margin recorded at June 30, 2016. The company said this variation reflected commercial efforts to implement the OTx commercial model and higher spending on medical studies.

Overall group operating result for the first half of 2017 was 176.4 million euros, which the company said was in line with the previous year. However, the consolidated net result fell 5.5% to 125.9 million euros. Diluted net result per share was 1.52 euro, compared to 1.61 euro in the prior year.

Research and development expenses rose to 115.0 million euros from 95.0 million euros a year prior. The company increased development costs for Cabometyx, Onivyde, and a peptide receptor-targeted radiotherapy program. In neurosciences, costs rose as a short-acting toxin entered the clinical phase.

General and administrative expenses rose to 68.3 million euros. The company attributed this increase to the reinforcement of its structure to support the Onivyde acquisition in the United States and the impact of group performance on variable remuneration.

To manage its financing, the company amended its syndicated credit on June 6, 2017, increasing it from 300 million euros to 600 million euros and extending the maturity to October 17, 2022. On June 27, 2017, it also increased its Negotiable European Commercial Paper program from 300 million euros to 600 million euros.