Ipsen: Tough environment leads to guidance update
BUY, Fair Value EUR30.5 (+6%)
Ipsen released H1 results with drug sales of EUR614.2m, basically flat (+0.4% vs last year) and roughly in line with consensus expectations. Primary Care (27% of sales) was the good surprise of the half year with sales “only” down 4.3% whereas Specialty Care’s (73% of sales) performance reflected different trends : Decapeptyl (-5.8% vs last year) was impacted by a tougher environement with pressure in China, Middle East and Europe while Dysport and Somutaline continued to post high single-digits growth. Margins were in line with expectations with a better gross margin (+70bps) and higher R&D expenses. FY guidance is revised down for Specialty from 6-8% (we knew that without Increlex, guidance would have been around 6%) to 3% driven by the impacts mentioned above on Decapetyl. As a result of a better primary care performance, guidance is upped to -1% versus -6-8%. Recurring EBIT margin is confirmed at around 16%. We expect shares to be under pressure following this guidance update and YTD performance (+25.9%).
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