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Ipsen keeps guidance as austerity cuts

By Maria Kiselyova

MOSCOW (Reuters) - French drugmaker Ipsen, mindful of the impact of austerity measures in some of its core markets, is sticking to its full-year sales and profit guidance, its chief executive told Reuters on Wednesday.

Global pharmaceutical companies are grappling with pricing pressures as cash-strapped governments in both Europe and the United States seek to cap healthcare spending.

"We have a guidance and this remains the guidance. Yes, we are watching austerity measures that are taking place in a number of places. In the first six months of 2011 we had roughly 3 points of growth taken away because of them and there is no sign that this will lessen," Marc de Garidel said.

"The areas where we are particularly sensitive or mindful are France, the second is in China and third area is Spain where there is a general price decrease of 7.5 percent. But notwithstanding that... our plans are to continue to grow despite those difficulties," he said in an interview.

The company earlier forecast sales of primary care drugs, typically prescribed by general practitioners, to drop between 3 and 5 percent in the whole of 2011, and of specialty care drugs to grow close to 8 percent, year-on-year.

It also expects recurring adjusted operating income of 190 million euros to 200 million euros after it rose 27 percent to 144 million euros in the first half of this year. In France, the company's prospects greatly depend on the future of its struggling primary care business. It indicated in June that it would seek a strategic partner for the business.

"We have received non-binding offers but the process is not finished. We are waiting still for more to come... Investors will probably know (the results of the process of selecting a partner) in Q1 2012, that is our plan," said Garidel.

Garidel, visiting Moscow to assess further development options for the local division, said Russia, along with Brazil, China and the United States was in focus.

The Russian government has made healthcare one of its key priorities as part of a wider modernization agenda, and global drugmakers, including AstraZeneca and Novartis, have pledged millions of dollars of investments into the market.

"One of the reasons we came here today is to investigate further how we should invest in Russia. This includes not only hiring more people... but also it is to evaluate our options in terms of manufacturing because we know this is becoming an important dimension for the authorities in Russia," he said.

The company would also consider entering into a partnership with a local manufacturer, Garidel said, adding it would take several months to evaluate the matter.

He said Ipsen wanted to maintain at least 15 percent annual sales growth in Russia and planned to increase headcount in the country already this year.

"We understand that the Russian government wants to invest much more in healthcare. Today it is standing roughly at 7 percent of GDP and we believe this percentage will increase over time. We think Russia will be an important part of our growth in the future.

"We have established very good relationships with key institutions in Russia and, despite some challenges that every country faces, we believe that the seeds are there to ensure good growth over time for us," he added.

The company generated nearly 57 million euros ($78 million) in Russian sales last year, and, according to industry research company Pharmexpert, has a 0.5 percent share of the market.

(Additional reporting by Caroline Jacobs in Paris; Editing by John Bowker and Mike Nesbit)

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