UPDATE 3-Ipsen seeks U.S. growth with $404 mln Tercica deal

Thu Jun 5, 2008 10:43am BST

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(Adds further analyst reaction, background)

LONDON, June 4 (Reuters) - French drugmaker Ipsen (IPN.PA: Quote, Profile, Research) is to buy the rest of its U.S. partner Tercica Inc TRCA.O for about $404 million and has struck two other deals in a bid to build a $1 billion-a-year U.S. business by 2020.

Industry analysts said the moves made strategic sense but the acquisition of Tercica was expensive and would dilute earnings in the short term.

Shares in the French group fell 11.3 percent to 38.40 euros by 0942 GMT on Thursday.

"This autonomy in the U.S. is strategically interesting and we had expected it. However, the price for Tercica is high in our view," analysts at Oddo Securities said in a note.

Chief Executive Jean-Luc Belingard had told Reuters in April that his priority for 2008 was to expand in North America.

Ipsen said it had agreed to buy the shares of Tercica that it does not already own for $9 per share in cash to boost its presence in endocrinology.

That is more than double Tercica's Wednesday closing price of $4.41, reflecting the increasingly high price commanded by promising specialist pharmaceutical and biotech assets. Continued...