Ipsen 2016 Healthcare Conference...2 Goldman Sachs 35th Annual Global Healthcare Conference –June...

IPSEN pour nom de la société - 07/04/2011 / page 1

Barclays - May 2016

Ipsen

2016 Healthcare Conference

2 Goldman Sachs 35th Annual Global Healthcare Conference – June 2014 Ipsen – 2016 Healthcare Conference 2 2

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 and unknown risks and uncertainties that may cause actual results, performance or events to differ materially from those anticipated

in the summary information. Actual results may depart significantly from these targets given the occurrence of certain risks and uncertainties,

notably given that a new product can appear to be promising at a preparatory stage of development or after clinical trials but never be launched on

the market or be launched on the market but fail to sell notably for regulatory or competitive reasons. The Group must deal with or may have to deal

with competition from generic that may result in market share losses, which could affect its current level of growth in sales or profitability. The

Company expressly disclaims any obligation or undertaking to update or revise any forward-looking statements, targets or estimates contained in

this presentation to reflect any change in events, conditions, assumptions or circumstances on which any such statements are based unless so

required by applicable law.

All product names listed in this document are either licensed to the Ipsen Group or are registered trademarks of the Ipsen Group or its partners.

The implementation of the strategy has to be submitted to the relevant staff representation authorities in each country concerned, in compliance

with the specific procedures, terms and conditions set forth by each national legislation.

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,

and/or could be detrimental to the Group’s margins in those regions where the Group’s drugs are billed in local currencies.

In a number of countries, the Group markets its drugs via distributors or agents: some of these partners’ financial strength could be impacted by

the crisis, potentially subjecting the Group to difficulties in recovering its receivables. Furthermore, in certain countries whose financial equilibrium

is threatened by the crisis and where the Group sells its drugs directly to hospitals, the Group could be forced to lengthen its payment terms or

could experience difficulties in recovering its receivables in full.

Finally, in those countries in which public or private health cover is provided, the impact of the financial crisis could cause medical insurance

agencies to place added pressure on drug prices, increase financial contributions by patients or adopt a more selective approach to reimbursement

criteria.

All of the above risks could affect the Group’s future ability to achieve its financial targets, which were set assuming reasonable macroeconomic

conditions based on the information available today.


Agenda

1 Overview

3 2015 financial performance

2 Key 2016 events

Overview


Ipsen, an international specialty pharma company

~80%

~20%

Q1 2016 sales by segment

Primary

care

Q1 2016 sales by geography

39% 32%

15% 14%

Europe

G5

Developed

RoW

Emerging

markets

US

Specialty

care

Consolidating US footprint

1 France

3 China

4 Germany

2 US

5 Italy

Top 5 affiliates

Note: ROW: Rest of World

One of the largest emerging market presence in the industry


A refocused strategy to sustain high sales and profit growth

Note: GI:Gastrointestinal; OTx:Dual channel approach (Rx/OTC); NET: Neuroendocrine tumors

Lead

Reinforce

Explore

Specialty care

NET

Spasticity

Dysport®

aesthetics

Urology-oncology

Adult endocrinology

GI/orphan cancers

Niche strategy

Optimize

Diversify

Expand

Primary care

Smecta®

Forlax®

Tanakan®

Adjacent GI

Probiotics

Geographies

Move to OTx commercial model

Key 2016 events


2016 roadmap

Note: OTx: Dual channel approach (Rx/OTC); NET: Neuroendocrine tumors

Position Somatuline® as a leader in NET

and secure Dysport® spasticity launch

Prepare the commercial launch of Cabozantinib

for the treatment of Renal Cell Carcinoma in Europe

Implement new Primary Care OTx model, notably in China

Continue Business development to replenish pipeline

and complement marketed product portfolio

Implement new corporate governance model


10

10

29

5

5

15

63

78

122

Tanakan

Forlax

Smecta

Hexvix

Increlex

Nutropin

Dysport

Decapeptyl

Somatuline®

®

®

®

®

®

®

(3.8%)

(16.9%)

+36.3%

(4.2%)

(4.1%) ®

+6.8%

+3.6%

Q1 2016 sales driven by strong Somatuline® performance

Drug sales – Q1 2016 in million euros – % excluding foreign exchange impact

France: (3.6%)

International: (13.7%)

+11.5%

Group sales

€362.0m

+4.7%

Primary care

€73.9m

(11.0%)

Sp

ec

ialt

y c

are

P

rim

ary

ca

re

® Specialty care

€288.1m

+9.7%

(4.6%)

Decapeptyl® and Smecta® impacted by stocking effects, notably in China

Dysport® aesthetics impacted by stocking effects through Galderma partnership


Exclusive license agreement with Exelixis for Cabozantinib, with key indication in Renal Cell Carcinoma (RCC)

Exclusive global licensing and commercialization rights (ex North America & Japan)

Renal Cell

Carcinoma

Filed in 2nd line

Hepatocellular

Carcinoma

Ph3 in 2nd line

Key indications

Marketed

110,000 patients 60,000 patients 1,500 patients

European incidence

Potential development in further indications

Medullary

Thyroid Cancer

Marketed


Cabometyx®, first therapy to show 2L RCC clinically meaningful improvement in OS, PFS and ORR

Standard of care: TKIs

Renal Cell Carcinoma

(1) Motzer RJ et al. Efficacy of everolimus in advanced renal cell carcinoma: a double-blind, randomised, placebo-controlled phase III trial – (2) FDA Package Insert – (3) vs Everolimus – (4) as published in the NEJM. Note : mTOR: Mammalian Target Of Rapamycin; ORR:

Objective Response Rate; OS: Overall survival, PFS: Progression Free Survival; RCC: Renal Cell Carcinoma; TKI : Tyrosine Kinase Inhibitors

Approved therapies

1st line

TKIs

mTOR inhibitors

New entrants

Cabometyx® Opdivo®

PFS

2d line

OS

ORR

7.4

Value(2) HR

RCC 2nd line treatment paradigm shift from PFS to OS

0.58 3.6

21.4 0.66 4.9 25.0 0.73 5.4

Value(2) HR (3) (3)

4.9 0.33 3.0

Value(1) HR

2% 25%(4) 21%(4)

FDA-approved November 23rd, 2015

4.6 0.88 0.2

20 pts 16 pts

14.8 0.87 0.4

2 pts

Afinitor®

FDA-approved April 25th, 2016


Accelerate specialty care growth in the next 5 years with a 4th pillar added

to Ipsen Specialty portfolio

Acquire a potential best in class derisked asset in attractive niche RCC

with solid scientific data triggering treatment paradigm shift

RCC: Renal Cell Carcinoma

Completion of a global oncology therapeutic footprint (US and Europe)

Reinforce Ipsen portfolio in niche oncology with potential for further

development in other indications

Strong rationale for Cabozantinib in-licensing

13 Goldman Sachs 35th Annual Global Healthcare Conference – June 2014 Ipsen – 2016 Healthcare Conference 13 13 MTC: Medullary Thyroid Cancer, RCC: Renal Cell Carcinoma

Cabozantinib, deal terms and impact on Ipsen operations

Operations

Upfront: $200m

Regulatory: up to $110m ($60m for RCC and $50m for HCC indications)

Commercial: up to $545m

Milestones

Royalties Tiered up to 26% on net sales

Transfer of MTC Market Authorization in H2 2016 and RCC launch starting

in 2017

Significant commercial investment

Cost containment and project prioritization initiatives to minimize impact of

2016 - 2018 investment period


Specialty care sales

Core Operating margin Around 21% of sales

Growth > 10.0%, year-on-year

Primary care sales Slight growth, year-on-year

2016 financial objectives

Including a negative impact of: • ~150 basis points resulting from the investment required to

prepare the commercial launch of Cabozantinib for the treatment of Renal Cell Carcinoma in Europe

• ~100 basis points from foreign exchange rates

At constant currency

At constant currency


Update of 2020 financial outlook

2015 2020E

Group sales Core Operating margin

> 7%

22.3%

> 26%

2015 2020E

>+370bps

€1.4bn

> €2.0bn

Specialty

care

Specialty

care

Primary care

>8%

[2% to 4%]

CAGR

Primary care

2020 Sales target increased to reflect Cabozantinib sales contribution

2020 Profitability target confirmed

2015 financial performance


Specialty Care - Drug sales(2)

Core Operating margin (as percentage of sales)

≥ 22.0%

Primary Care - Drug sales(2)

≥ 14.0%

[-3.0% ; 0.0%]

22.3%

+14.4%

-1.1%

2015

guidance(1)

2015

actuals

2015 sales and Core Operating Income strong performance in line with market guidance

(1) Revised on 31 July 2015 – (2) Year-on-year sales growth at constant currency


Turnaround of the US platform, with high potential for growth

(1) Restated for Increlex® supply interruption Note: All growth rates at constant currency; AUL: Adult Upper Limbs; NET: Neuroendocrine tumors;

US affiliate sales growth(1) Somatuline® US sales growth

2013 2014 2015

11.5%

31.2%

64.9%

2013 2014 2015

18.6% 28.6%

111.9%

US operations profitable in 2015, ahead of plan

Renewed management and Salesforce (NET & spasticity)

Successful Somatuline® NET launch and preparation of Dysport® AUL spasticity launch

Strong Dysport® aesthetics performance from Galderma

1

2

3


Strong Somatuline® 2015 performance, driven by successful NET launch

247

288

402

2013 2014 2015

+16.8%

Business update

3-year growth 2015 performance

Geographic distribution (2015)

Overall acceleration of growth due to NET

global launch

Strong growth in North America, up 112% with

positive price impact

Double digit growth in Europe, notably in

Germany, the UK, Poland and France

42% 28% 18% 12%

G5(1)

Emerging markets(2) United States

Developed RoW

(1) France, Germany, UK, Italy, Spain – (2) Notably includes China, Russia and Brazil Note: all variations at constant exchange rate; NET: Neuroendocrine tumors;

+34.2%

US: Ipsen present in >1 000 accounts,

including all 25 major reference centers

Europe: GEP NET approval granted by all

European countries

Increased penetration across geographies


Somatuline® accelerated NET penetration in the US and Europe

Source: IMS MIDAS + Symphony Healthcare. (1) G5: France, Germany, UK, Spain, Italy – (2) Market share in volume Note: Market definition = long-acting SSAs; NET: Neuroendocrine tumors;

Somatuline® US quarterly data, all

indications

0

2

4

6

8

10

12

14

0

10

20

30

40

Q1 2014 Q3 2014 Q1 2015 Q3 2015 Q1 2016

Somatuline® Europe G5(1) quarterly

data, all indications

20

25

30

35

40

45

0

10

20

30

40

Q1 2014 Q3 2014 Q1 2015 Q3 2015 Q1 2016

Ipsen reported sales ($m) Market share(2) (%) Ipsen reported sales (€m) Market share(2) (%)

Somatuline® capturing majority of new patients in US and Europe

Increased number of switched patients

44.2% 12.8%


Dysport® 2015 performance driven by aesthetics

242 255

280

2013 2014 2015

+8.6%

Business update



Strong Galderma performance in aesthetics in

a solid underlying market growth

Solid performance in emerging markets,

notably in Russia, Brazil and Australia

Strong US Q4 driven by aesthetics &

spasticity launch

18% 12% 25% 45%

+9.7%

(1) China, India, South Korea (and Indonesia under certain conditions) – (2) France, Germany, UK, Italy, Spain – (3) Notably includes China, Russia and Brazil

Note : all variations at constant exchange rate; AUL: Adult Upper Limbs

Q3 US launch of Dysport® in AUL spasticity

and sales force build-up

Setup of European business unit for

therapeutics

Galderma partnership expanded to key Asia

Pacific territories(1)

G5(1)

Emerging markets(2) United States

Developed RoW


Dysport® US market share in aesthetics increasing since Galderma takeover

Botox®

market

share (%)

Source: GuidePoint - Filler & Toxin Panel

Dysport® US market share in excess of 20% thanks to Galderma’s commercial push

30%

40%

50%

60%

70%

80%

90%

0%

5%

10%

15%

20%

25%

30%

35%

Feb 10 Jun 10 Oct 10 Feb 11 Jun 11 Oct 11 Feb 12 Jun 12 Oct 12 Feb 13 Jun 13 Oct 13 Feb 14 Jun 14 Oct 14 Feb-15 Jun-15 Oct-15

~73%

~22%

~5%

Botox®

Dysport ®

Xeomin®

Dysport® /

Xeomin®

market

share (%)


Positive Decapeptyl® growth in 2015, despite emerging markets headwind

299

317

334

2013 2014 2015

+6.5%

3-year growth

Business update

2015 performance


Q4 growth recovery in China after first 9

months affected by market slowdown and

pricing pressure

Price pressure across Europe and Algeria

High penetration in Spain with favorable share

of voice to competitors

G5(1) Developed RoW Emerging markets(2)

48% 9% 43%

+1.3%

(1) France, Germany, UK, Italy, Spain – (2) Notably includes China, Russia and Brazil Note: all variations at constant exchange rate

Launch of 3-month subcutaneous formulation

in Europe from July 2015

Progress on potential combination in breast

cancer

Increased commercial focus in China with

dedicated sales force per indication


Primary care resilient thanks to international market growth

354 328 330

2013 2014 2015

(4.8)%

Business update



Smecta® sales impacted by new

manufacturing setup in Algeria and destocking

in distribution and price pressure in China

Tanakan® facing out of pocket market

slowdown and tough competition in Russia

and France

Solid performance of Etiasa® in China and

Fortrans® notably in Russia

30% 5% 65%

(1) France, Germany, UK, Italy, Spain – (2) Notably includes China, Russia and Brazi Note: all variations at constant exchange rate; OTx:Dual channel approach (Rx/OTC)

G5(1) Developed RoW Emerging markets(2)

(1.1)%

Start of Tanakan® local production in Russia

Launch of Smecta® ready-to-use (liquid) and

Strawberry taste in Q4 2015 in France

Accelerated switch of China primary care

model to OTx with recruitment of 100

additional reps in 2016


in m€ FY 2015 FY 2014 Change %

Change

Change at

constant FX

Net sales 1,443.9 1,274.8 +169.1 +13.3% +10.4%

Other revenues 76.3 57.6 +18.7 +32.5%

Revenue 1,520.2 1,332.4 +187.8 +14.1%

Cost of goods sold (336.8) (310.0) -26.8 +8.7%

R&D expenses (192.6) (186.9) -5.7 +3.0%

Selling expenses (541.4) (464.1) -77.3 +16.7%

G&A expenses (122.9) (111.2) -11.7 +10.4%

Other core (4.1) 0.3 -4.4 NA

Core Operating income 322.5 260.6 +61.9 +23.8%

Core Operating margin 22.3% 20.4% +1.9 pt

P&L - From sales to Core Operating Income

Operating leverage driving margin expansion


50%

17%

10%

5%

18%

Ipsen exposure to foreign currencies

EUR

USD

GBP

CNY

Other(1)

(1) Includes RUB, BRL, AUD, PLN and other currencies

Evolution of major currencies vs. EUR 2015 sales exposure by currency

2015 sales growth benefited from strong USD, CNY and GBP appreciation versus euro

2016 sales to be impacted by depreciation of emerging countries currencies (BRL, CNY, RUB)

€1,443.9 million

…

Foreign Currency policy

Average rates change (2015vs. 2014)

19.9% 17.6%

11.1%

-25.3%

-15.4%

USD CNY GBP RUB BRL

Global FX exposure mitigated by cost base in local currency and hedging of key currencies


FY 2014 FY 2015

COGS (€m)

24.4% 23.6%

R&D (€m)

Selling expenses (€m)

FY 2014 FY 2015

+16.7%

G&A (€m)

+8.7%

541.4

464.1

336.8

+3.0%

192.6

186.9

+10.4%

8.7% 8.5%

122.9

111.2

Drivers for operating cost evolution

Note: All ratios in percentage of sales; NET: Neuroendocrine tumors

36.4% 37.5%

Positive mix effect, manufacturing efficiencies Impact of TasQ studies discontinuation

Support functions, variable compensation Impact of US investment (NET, spasticity)

FY 2014 FY 2015

24.3% 23.3%

310.0

FY 2014 FY 2015

14.7% 13.3%


in m€ FY 2015 FY 2014 Change %

Change

Net sales 1,443.9 1,274.8 +169.1 +13.3%

Core Operating income 322.5 260.6 +61.9 +23.8%

Core Operating income margin 22.3% 20.4% +1.9 pt

Other non core (7.2) (9.2) +2.0

Restructuring costs (6.7) (21.9) +15.2

Impairment gain / (losses) (64.6) (8.0) -56.6

Operating income 244.0 221.4 +22.6 +10.2%

Financial result (6.4) (15.1) +8.7

Income taxes (49.8) (53.8) +4.0

Share of profit from JV 2.5 1.9 +0.6

Discontinued operations 0.5 (0.5) +1.0

Consolidated net profit 190.7 154.0 +36.7 +23.8%

Consolidated profit margin 13.2% 12.1% +1.1 pt

EPS – fully diluted (€) 2.30 1.87 +0.43 +23.0%

Core EPS – fully diluted (€) 2.78 2.22 +0.56 25.2%

P&L - From Core Operating Income to EPS

Consolidated net profit up 24% after TASQ impairment charge and exceptionally low tax rate


180 214

+290

-61

-58

-15 -70

-29 -39

+16

In million euros

Operating

cash

flow(1)

31 Dec 2015 31 Dec 2014

Change in

working

capital(1)

Solid cash generation to finance capex, BD and return to shareholders through dividend & share buy-back

Dividends

BD &

milestones Closing

cash

Capex

Opening

cash

Other

Closing cash up €34m vs 2014

Strong cash generation to self-finance acquisitions

Free cash flow: €156m

(1) Excluding milestone amortization

Restructuring

Share

Buyback


Proposal to maintain a dividend of €0.85 per share to support BD investment

Group sales up 10.4% at constant currency

Strong Core Operating Income margin of 22.3%(1)

Consolidated net profit of €190.7m, up 23.8% year-on-year

Fully diluted core EPS of €2.78, up 25.2% year-on-year

Closing cash balance of €214m, up 19%

Key financial takeaways

(1) In percentage of sales

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