Ipsen CEO scouting for deals with €2.5 billion to spend
06 Apr 2023
AcquisitionBiosimilar
Ipsen is planning to accelerate its deal-making activities as it focuses on developing innovative prescription medicines, its CEO said in an interview published Thursday in Bloomberg. David Loew says the French drugmaker will have about €2.5 billion ($2.7 billion) to spend over the next two years on innovative products, including €1.5 billion ($1.6 billion) for 2023, following its $952-million takeover of liver disease therapy maker Albireo Pharma.
According to Loew, Ipsen aims to complete six to eight deals a year and is boosting its R&D spend from 16% to 20% of sales by the end of this year or the beginning of 2024. He noted that while R&D spending will weigh on this year's core operating margin, it will pay off with margin improvements by about 2025.
Since taking the helm in 2020, the former Sanofi executive said he has doubled the size of Ipsen teams dedicated to screening potential targets, and has also defined a clearer mission for the company, which focuses on niche areas and promising partners. "You need to kiss a lot of frogs to find the prince," remarked Loew, adding "we are screening thousands of companies or compounds per year."
Safety net amid generic competition
Michael Shah, an analyst with Bloomberg Intelligence, suggested that acquisitions will provide a safety net for Ipsen as revenues for its cancer drug Somatuline (lanreotide) decline. The product's sales dipped 13% in the fourth quarter of last year to €306.1 million ($334 million) amid generic competition in the US and Europe.
Loew also said the experimental treatment palovarotene, that Ipsen acquired in 2019 via its $1.3-billion takeover of Clementia Pharmaceuticals, may still gain regulatory clearance despite setbacks. The FDA declined to authorise the oral drug for fibrodysplasia ossificans progressiva (FOP) late last year, while advisors to the European Medicines Agency later recommended against approval. Still, Ipsen said it has gathered a "robust" set of data to answer FDA requests for more information on palovarotene, with the agency expected to decide on the resubmission by August 16.
"Perhaps palovarotene is going to make it," Loew remarked, adding that FOP is "a terrible disease – that's why we gave this another go, even if we know that the probability is perhaps not that high."
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