Ipsen shares fell sharply after the U.S. Food and Drug Administration approved a generic competitor to its flagship hormone drug earlier than expected.

Shares fell 6.6% to a seven-month low of 145.60 euros in morning European trade, making Ipsen the worst performer in the Europe-wide Stoxx 600 index.

The FDA approved Amneal Pharmaceuticals' lanreotide injection--a generic of Ipsen's Somatuline drug--at a dose of 120 milligrams, the New Jersey-based drugmaker said in a release after market close Friday.

The drug will launch immediately and be produced in-house, Amneal said.

The launch comes sooner than Ipsen had expected. Following the company's second-quarter results in July, Chief Financial Officer Aymeric Le Chatelier said he expected "some delay on the entry of [the] generic," with Somatuline's competitor expected to arrive in the fourth quarter.

In the first half, Somatuline made up around 31% of Ipsen's total sales. The injectable drug mimics the body's somatostatin hormone to treat disorders like slow-growing tumors and the overproduction of growth hormones.

The generic competitor could hurt Ipsen's 2027 earnings, Jefferies analysts wrote in a note.

"Despite management having considered the competitor's generic launch in its 2026 guidance, we see risk to 2027 numbers, particularly if weekly launch metrics show strong initial uptake of the generic in the U.S.," they wrote.

Somatuline's relatively high margin means Ipsen will have a high bar to beat when it reports earnings through 2027, RBC Europe analyst Harry Sephton said.

Though the generic was already priced in, consensus forecasts for Ipsen earnings might be "a couple of percent too high," JPMorgan analysts said.

Ipsen didn't immediately respond to a request for comment.