20 mars 2009

A renewal story

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Safe Harbor

This is an independent study performed by students from the Faculté des

Sciences Pharmaceutiques de Lille

The opinions expressed are our own and not necessarily those of Ipsen

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Sales in comparison

Addex

Nicox

Genfit

Monogram

Crucell

Patheon

Ipsen

Actelion

Novo Nordisk

Merck

0 1000 2000 3000 4000 5000 6000 7000 8000

4

A family business

French independent laboratoryOwned by Beaufour familyMore than 20 products marketed in more than 100 countriesThird Independent pharmaceutical firm in FranceHistorical presence in primary care

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Key figures: 2008

€971M Sales

4000 employees worldwide

€203M cash generated

18.8% of sales allocated to R&D

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PROFILEPrimary care product:

GastroenterologyCardiovasularCognitive disorders

Specialized therapies : 3 areasOncologyEndocrinologyNeuromuscular disorders

CA 2008: 971,0 M€ (+5,5% vs 2007)

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AN INTERNATIONAL COMPANY

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Key figures

9

BACKGROUND

1929 : Dr Henri Beaufour « Beaufour laboratories » (Dreux)

Romarène® (1929)

Citrate de betaïne® (1954)

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BACKGROUND

1970 : Expansion years

« Beaufour-IPSEN » : Institut des Produits de Synthèse et d’Extraction Naturelle

Willmar Schwabe

Ginkor® (1972)Tanakan® (1975)

Gingko Biloba

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PRIMARY CARE1972

Active substancesTroxerutin A, heptaminol chlorhydrate, Ginkgo biloba extract

Indications: Cardiovascularvenous insufficiency of the lower limbsacute haemorrhoid episodes

GINKOR Fort®

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PRIMARY CARE1975

Active substanceEGb 761® (Ginkgo biloba)

Indications : Cognitive disordersAge-related cognitive disorderspathophysiological deficiency cochleovestibular disorders

TANAKAN®

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PRIMARY CARE1977

Active substance :Diosmectite (natural clay)

Indications : GastroenterologyChronic and acuate diarrhoeaPain associated with gastric and colonic disorders

SMECTA ®

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PRIMARY CARE1996

Active substance :Macrogol 4000, a linear polyethylene glycol polymer

Indications : GastroenterologyTreatment of constipation for both adults and children

FORLAX®

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A WILL TO GO FURTHER

PRIMARY CARE TARGETED THERAPY

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GOING FURTHER

Albert Beaufour : biotechnology research

1976 : Biomeasure Boston A. Beaufour research institute: Peptide-focused engineering

Research relations with American universities

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ONCOLOGY1980

Partnership with Debiopharm®

Active substance: Triptorelin : decapeptide, analogue of the natural hormone : GnRH

Indications : Prostate cancerUterin fibroidsEndometriosisEarly-onset puberty Female infertility

DECAPEPTYL®

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NEUROMUSCULAR DISORDERS

1994

IPSEN bought Speywood (UK)

Active substance: Botulinum neurotoxin type A complex ( acts at the level of the neuromuscular junction in the targeted muscle)

Indications: Cervical dystoniaCerebral palsy in childrenBlepharospasm

DYSPORT®

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ENDOCRINOLOGY1995

Active substance: Lanreotide (somatostatin analogue -> octapeptide)Inhibits secretion and growth endocrine/paracrine/exocrine functions (growth hormone)

Indications: AcromegalyNeuroendocrine tumours

SOMATULINE®

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1996 - 2002

IS IPSEN RESTING ON ITS

LAURELS ?

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R&D STRATEGY ?Dr Pierre BRAQUET

R&D manager form 1982 – 1995

he participated to the discovery of the first antagonists of PAF from an extract of the Chinese tree Ginkgo biloba

Directed research works related to somatulin

Since 1985, his researches got nowhereAtrial natriuretic factorEndothelin…

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A FAMILY AFFAIR1998 : Albert beaufour wants to stay independent.

Buys his brother’s participations (50%)Alliance with CDC and Paribas AI

Albert Beaufour 75,5%CDC and Paribas AI 24,5%

2000 : Albert entrusts his son-in-law, Stephane François, with the direction of the group

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A FAMILY AFFAIRFebruary 2000 : Albert Beaufour died (76 years old)

His participation (75,5%) is shared among his 3 children

November 2001 : Family conflictStephane François is relieved

from his duties

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A FAMILY AFFAIR

December 2001 J.L. Belingard

From Beaufour Ipsen to Ipsen

2003: The Group had its name changed from Beaufour Ipsen to IpsenRenewed Executive Commitee

2001

2003

2007

1997 2007

20032008

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A NEW TEAMA NEW STRATEGY

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A NEW STRATEGY

Ipsen faces up to regulation

Optimize its primary

care portfolio

Focus on targeted

therapeutic areas

Geographic expansion

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STRATEGYHOW ?

Product life cycle managementStrong R&DPartnership policyInitial Public Offering

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PRODUCT LIFE CYCLE MANAGEMENT

PRIMARY CARE

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12% of salesTanakan®

Many trials trying to prove efficacyHAS: insufficient SMRPrice cut: -10% in july 2007Threatened by disreimbursement

GuidAge study: 8000 patients enrolledCurrently underwayprevention Alzheimer disease

Life cycle management

PRODUCT LIFE CYCLE MANAGMENT

PRODUCT LIFE CYCLE MANAGMENT

Price cut: -15% in february 2006Successive reimbursement rate cuts in France:

35%Taux original

15%1er février 2006

0%1er janvier 2008

CA 2005 CA 2006 CA 2007

61.2M€ 41.7M € 36.9M €

-11.5%-31.8%

Marketing authorizations transferred to GTF (France, Monaco, Andorra) in august 2007

Ginkor Fort®

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Other developments

Adrovance®, from MSDOsteoporosisComarketing along with MSD

Adenuric®, from TeijinChronic hyperuricemia in goutIpsen obtained MA in Europe in may 2008

Exforge®, from NovartisARA II + ICa2+

BA058, from IpsenPTHrP analogLicensed to Radius and Teijin

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STRONG R&D

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R&D original model

« Discovery and Innovation »

Dedicated to discover new chemical entitiesTargeted disease areasOut-licensing

« Corporate Development »

Bring a coherent portfolio of molecules to the marketBoth internal research and external business developmentIn-licensing

2007: R&D division now organised around 2 entities:

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R&D original model

4 R&D centres:PARIS

Medicinal chemistry

BOSTONPeptide engineering Protein engineering: improve the therapeutic

BARCELONA: Advance drug delivery

BATH: Steroid Engineering

Discovery and innovation

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R&D original model

Collaboration with academic research centres worldwide:

Erasmus University Medical Center Rotterdam ERINE endocrinologye, diabete and metabolism

Salk Instituteproliferative and degenerative diseases

Discovery and innovation

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R&D original model

clinical developmentpharmaceutical developmentbusiness developmentregulatory affairs

LONDON, PARIS, BOSTON: CLINICAL DEVELOPMENT AND REGISTRATION

DREUX: PHARMACEUTICAL DEVELOPMENT

BARCELONA: PHARMACOKINETICS

Corporate Development

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STRONG R&D

Focus on targeted therapeutic areas

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Focus on targeted therapeutic areas

EndocrinologyOncologyNeuromuscular disorders

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ENDOCRINOLOGY

A major technological advance: first sustained-release formulation for injection without any excipient 6 months1 injection per month (vs 2 or 3)

Patent:direct holder of the patent expiration date: in 2015 in Europe and US (Somatuline® : 2005)

SOMATULINE AUTOGEL®

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ENDOCRINOLOGY

Product’s Life cycle Managment programmes:phase III: coadministration with pegvisomant acromegaly in Europephase III: Asymptomatic neuroendocrine tumours in EuropePhase II: in Japan, partnership with Teijin acromegaly

International expansion :FDA approval in 2007 for the treatment of acromegaly (=Somatuline Depot)

Group’s competitor:Sandostatin® LAR® Depot (octreotide) Novartis painless and easy to use, gives it a competitive advantage

SOMATULINE AUTOGEL®

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ENDOCRINOLOGYSOMATULINE AUTOGEL®

Somatuline Sandostatin

Indication acromegalyNET

acromegalyNET

Administration SC IM

Formulation ready to use powder to reconstitute

Advantage painlesseasy to use

painful

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ONCOLOGY

Group’s competitors :

Takeda/Pfizer-Wyeth/Abbott Enantone : worldwide leader, 6 months formulation expected in 2008

AstellasEligard : 6 months formulation : 2007 in Germany, 2008 in France

Sandoz/HexalLeuprone (1 month) and Leupro (3 months) : 2007 in Germany

DECAPEPTYL®

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ONCOLOGY

Life cycle management3 phase III studies (International Breast Cancer Study Group)Combined hormonal therapy: breast cancer in premenopausal women Decapeptyl®/ Aromasin® Pfizera 6 month sustained release formulation: filed in 2008

Partnership with Debiopharmlicence of know-how and marketing

DECAPEPTYL®

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STRONG R&D

RESEARCH PROGRAMS

Research programs

New approaches in cancer treatment under hormonal control:

Anticancer agents

Angiomates multitarget antiproliferative anti-angiogenic acquisition (February 2004)

BIM 46187 Cell signalisation: G-Protein signal

CDC25 Phosphatase inhibitors regulation of cell cycle

ONCOLOGY

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Post-menopausal breast cancer expressing estrogenic receptors

BN 83495 (STX 64) Phase I

Treatment of side effects from LHRH-a based androgen-deprivation

Acapodene® Phase III (2008)

Research programs

ONCOLOGY

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Research programs

ENDOCRINOLOGYGhrelin agonist

Regulating food intake and the gastro-intestinal function and treating cachexia

11ßHSD enzyme inhibitors Metabolic syndromes associated with obese patients with

hyperinsulinemia

Sustained-release growth hormoneLong-term treatment of growth failure in children and growth hormone deficiency in adults

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Development programs

ENDOCRINOLOGY

Pituitary and neuroendocrine tumours Dopastatine : Second-generation somatostatin analogues and growth hormone antagonistsPhase I

Glycaemia control in diabetic patientsBIM 51077 / R1583

Analogue of peptide hormone Glucagon Like Peptide-1

Phase IISustained-release formulations

Phase I (with Teijin)

October 2003: exclusive licence to the rights to develop and market worldwide ( except Japan and France)

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Research programs

HEMATOLOGY

OBI-1

recombinant version of porcine factor VIII

congenital or acquired haemophilia resistant to human factor VIII

phase II trials in USA

17 July 2008 Ipsen completes purchase of all of OBI-1

assets from Octagen Corporation

Emory University and

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RESEARCH PROGRAMS

IPSEN’S STRATEGY ?

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Niche strategy

Partnership policy

IPSEN’S STRATEGY ?

Niche strategy

IPSEN does not keep marketing rights on molecules which will required too much promotion

For example : In Diabetes In Osteoporosis

Niche strategy Antidiabetics :

A large market: 24.1 Billion of Dollars 10.7 % Growth 2007

2000 20300

50000000

100000000

150000000

200000000

250000000

300000000

350000000

400000000

171 000 000

366 000 000

Diabetic patients in the world

Niche strategy

Ipsen licenses Taspoglutide

Worldwide to Roche :exclusive worldwide rights to develop and market Taspoglutide

Japan to Teijin :rights to develop and market Taspoglutide

In France where Ipsen may elect to retain co-marketing rights.

TASPOGLUTIDE

Niche strategy

TASPOGLUTIDEWhy ?

Clinical trials limited Overall, 3884 patients were randomized for JanuviaOnly 1100 patients during 2 years

No expertise in the domain

A launch very expensiveFor exemple Januvia in France

27 million € promotion investment in 200814 million € of sales in 2008

Niche strategy

BA058Osteoporosis

Niche strategy

BA058BA058 is an analogue of PTHrP

License to Radius in phase IRadius develop BA058 until phase IIRadius License BA058 to Novartis start phase III

Niche strategy

BA058Why ?

No expertise in the domain

Clinical trials :More than 7000 patients during 5 years for Protelos

An important marketing effortFor example Actonel vs Pariet in France

Actonel® ratio invests/sales : 0.28Pariet® ratio invests/sales : 0.12

In osteoporosis the effort in near increase by 3 versus antiulcer

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The University Emory Octagen

Ipsen buy Octagen for 10,2 millions of dollars

in July 2008

Licence with Ipsen in 1998

OBI-1

According to CDC (Centers for Disease Control), among 13000 peoples live with hemophilius A in United-state

Niche strategy

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Strategy France

Different strategy in France because Ipsen have Sales force and a good corporate image in France

Ipsen market and co-market product from other firm.

For example : Adrovance, Nisis NisisCo …

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PARTNERSHIP POLICY

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PARTNERSHIP POLICY2003 Marketing licence Nisis and Nisisco

2003 R&D

2003 Market Ipsen’s products in Japan

2004 R&D

2004 RetD

2004 Marketing licence Testim in France

2006 development and marketing licence BIM51077

2006 development and marketing licence Acapodène in UE

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PARTNERSHIP POLICY

2006 R&D theranostic

2007 Erasmus medical center R&D

2007 Toxine botulique

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NICHE STRATEGY + PARTNERSHIP POLICY

Botulinum toxin exemple :The IPSEN’s hope

Botulinum toxin : a high stake

Growing market worth $1600MAllergan boasts 80% of the market with Botox®

60%

40%

Botulinum toxin market

Therapeutic useAesthetic use

Botulinum toxin: a high stake

Ipsen has already a Botulinum toxin (Dysport®) Ipsen wants his piece of the cakeAesthetics is not part of Ipsen’s targeted therapeutic areasIpsen is looking for partners specialized in dermatology…

Strategy botulic Toxin A

IPSEN keeps right on therapeutics use

But in aesthetic Medicis in USAGalderma in Europe and South-AmericaTwo specialists

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Botulinum toxin: a high stake

March 2006: agreement with Medicis (n°1 in dermic volume restoration) for North America

Feb 2007: agreement with Galderma for Europe, Russia, then dec 2007: South America

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Partnership with milestones:

Potential of 193,6 millions de dollars with MedicisAlready 90 millions of dollars have been paid

Partnership with royalties: between 30 and 40% of sales

Botulinum toxin: a high stake

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Botulinum toxin: a high stake

Aesthetic Market in United State is estimated to 300 – 400 millions of dollarsIn South America Galderma take 40 % of share marketSo If Medicis take 30 % of share market with 30 % of royalties Ipsen will earn 27 millions of dollars per year

Agreement with Medicis

Limit of partnership policyJuly 2002: Development and distribution contract for Reloxin® between Ipsen and Inamed in USADec 2005:

Allergan about to acquire InamedTermination of the contract, Ipsen recovers its rights to Reloxin® for $10M

Ipsen license rights to MedicisWaste of time

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STOCKMARKET

Stockmarket

An old idea

1998 •Introduction was considered since 1998, year of the opening of the capital of the laboratory to the Caisse des Dépôts and Paribas Affaires Industrielles, which then took a participation of 20%.

2003 •The conditions of market have not been favorable•Wait until they improve

12/2005 •Initial Public Offering

Stockmarket

IPO 12/2005

Stockmarket

Why ?

To finance expansion by equity issue :171 millions of euro

Nearly one year of R&D for Ipsen½ Tercica

To pay back old shareholder :151 millions of euro

Stockmarket

Mayroy is the familial Holding

Mayroy get more than 66.66% of the share

So Ipsen has still a familial direction

Stockmarket

Comparaison between Ipsen and other pharmaceutical firm : Sanofi-Aventis and Pfizer

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Geographic Expansion

USAJapan

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Conquering the USA

1976: R&D Boston2003: Inamed2006: Medicis2008: Tercica, Vernalis, Octagen (OBI-1)

Acquisitions are aimed at creating a sales force in USA

Gaining a foothold in USA

August 2008:

Somatuline® approved

by the FDA

Gaining a foothold in USA

Ipsen needs sales-forces for Dysport and SomatulineEasier to buy firms than creating from nothing

Endocrine-focused sales force Neurology sales force

Somatuline®Increlex®

Dysport®

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Conquering Japan

Japan conquest

Agreement with Teijin, july 2003

Development and marketing of 4 Ipsen products in JapanGLP-1 analogue: diabetes type IIPTHrP analogue: osteoporosisSomatostatine Autogel®: acromegalySomatostatine SSTR-2 analogue: diabetic retinopathy

Development and marketing of 1 Teijin product in EuropeXanthine Oxydase inhibitor (TMX-67): gout

MA EMEA may 2008: Adenuric®

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PARTNERSHIP POLICY DRAWBACKS

Dependence on IP rights held by third parties

Intellectual Property rights (patents, know-how and trademarks) held by third partiesProduct Patent titular Patent expiration

Ginkor Schwabe 2010

Tanakan Schwabe 2010

Smecta IPSEN expired

Forlax - -Decapeptyl Debiopharm 2010

Somatuline Tulane University 2005

Somatuline autogel IPSEN 2015

Dysport - -

Neutropinaq Genentech 2013

Increlex Genentech 2015

Financial

2004 2005 2006 2007 200895

100

105

110

115

120

125

130

135

CA base 100Résultat consolidé base 100

During 3 years result increase faster than the turnover but with Tercica acquisition in 2008 it decrease.

Consolidated profits239 584 €

Debt 171 090 €

Net cash66 224 €

Financial

2004 2005 2006 2007 200880

90

100

110

120

130

140

CA base 100R&D base 100R&D/ CA base 100

Expenditure in R&D are growth slowest than turnover but are still strong

(182 millions of euro and 18,8% of turnover)

SWOT analysis

89

STRENGHTS•Independent firm•Technology platforms very developed•Strong R&D capacities•Product life cycle management•Alliance capacity•International marketing presence

SWOT analysis

90

STRENGHTS WEAKNESSES•Independent firm•Technology platforms very developed•Strong R&D capacities•Product life cycle management•Alliance capacity•International marketing presence

•Weak sales from primary care•Few patents owned by IPSEN•Dependent on 2 products (Tanakan, Decapeptyl)•Dependent on partnerships

SWOT analysis

91

STRENGHTS WEAKNESSES•Independent firm•Technology platforms very developed•Strong R&D capacities•Product life cycle management•Alliance capacity•International marketing presence

•Weak sales from primary care•Few patents owned by IPSEN•Dependent on 2 products (Tanakan, Decapeptyl)•Dependent on partnerships

OPPORTUNITIES

•Aesthetic market : Botulinum toxin A•US market•Tanakan : Alzheimer prevention (?)

SWOT analysis

92

STRENGHTS WEAKNESSES•Independent firm•Technology platforms very developed•Strong R&D capacities•Product life cycle management•Alliance capacity•International marketing presence

•Weak sales from primary care•Few patents owned by IPSEN•Dependent on 2 products (Tanakan, Decapeptyl)•Dependent on partnerships

OPPORTUNITIES THREATS

•Aesthetic market : Botulinum toxin A•US market•Tanakan : Alzheimer prevention (?)

•Generics and regulation patents and prices•Research process longer and more expensive•Industry consolidation

CONCLUSION

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Thank you for your attention

ANY QUESTIONS ?

Specials thanks to Charlotte Marmousez