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On taking over as Chairman and Chief Executive Officer of Ipsen in November 2010, I discovered a company that had undergone successful transformation over the past decade by developing strong positions in specialty care and significantly expanding its international footprint. I discovered a dynamic company with talented and committed employees. I also, however, discovered a company whose investments were widespread and which faced the challenge of reinventing itself in a complex and changing economic, technical and regulatory environment. The strategic review, carried out shortly aſter my arrival, enabled us to identify Ipsen's strengths and weaknesses and define an ambitious and sustainable growth strategy. The company's strategy is based on three key priorities: focus resources in four disease areas with high therapeutic value (neurology, endocrinology, uro-oncology, and hemophilia), invest to grow and leverage our geographical footprint. By capitalizing on these priorities, Ipsen's objective is to double its sales and triple EBIT by 2020.

2011 marked a turning point in our Group's history. We implemented our new strategic guidelines, revisited our organization to increase fluidity between functions and divisions and optimized certain assets. As a result of the new strategy, a number of difficult decisions had to be made to ensure the future of some of the Group’s historic activities as Ipsen does not have the resources required to develop these activities under optimum conditions. In France, in an increasingly competitive environment and in order to both sustain the business in the long term and gradually transform the commercial model towards a more robust presence in pharmacies, Ipsen is looking to enter into a partnership for its primary care activities. Ipsen is also seeking a purchaser with robust volumes and activity levels to maintain and develop its Dreux manufacturing site.

Despite financial and economic uncertainties which continue to impact the pharmaceutical industry, in particular in Europe and in a context of major change for the company, Ipsen recorded strong operating results for 2011. While the global pharmaceutical market grew 4.5%, Ipsen's drug sales increased 5.7% (excluding foreign exchange impacts) to €1.1 billion.

2011 had a certain amount of challenges nonetheless and our financial results were impacted by significant non-recurring items. Ipsen posted substantial impairment losses, due to a number of factors: a decrease in Inspiration Biopharmaceuticals Inc.’s forecasted sales as a result of increased competition; supply uncertainties surrounding Lonza which manufactures the active ingredient for Increlex®; and the primary care situation in France. Restructuring costs arising from the implementation of the new strategy were also recorded.

Ipsen successfully achieved all of its 2011 operating targets and the company’s transformation is progressing swiſtly. We strengthened our uro-oncology portfolio with tasquinimod and Hexvix®, obtained authorization to proceed with clinical trials of Dysport® and Somatuline® in China, filed the marketing authorizations with our partner Inspiration Biopharmaceuticals Inc. for IB1001 both in Europe and the US, renewed the Executive Committee, and implemented a new organizational structure based on our specialty care franchises.

This robust operating performance demonstrates Ipsen’s ability to achieve growth and adapt to a changing environment. It confirms the pertinence of our new strategic direction which focuses on the growth potential of our drugs, on our patient-centric approach, as well as on our scientific expertise and strong commitment to R&D, to which the Group devotes 20% of sales each year. And, it is also testimony to the commitment of our 4,500 employees across the globe.

2012 will be a pivotal year for Ipsen and the future of the Group. In a period of economic uncertainty, increased price pressure and unprecedented change in public health policies, we need to both anticipate and adapt to the transformation of our industrial landscape.

By staying focused on the execution of our strategy, we are building the future of our Group. We will continue to do our utmost to develop innovative healthcare solutions that meet patient needs.

I am confident in the Group's future. We have the assets and the skills to achieve our ambition and lead the way in the treatment of debilitating diseases.

Marc de Garidel
Chairman and Chief Executive Officer