The €55m investment will take place over four years, and according to Ipsen will allow the firm to focus on formulation, analytical development and manufacturing of batches intended for pre-clinical and clinical research.
Initial moves for the upgrade include the construction of two new buildings and the renovation of a third existing building, all to be complete by 2009.
Dreux, the site of Ipsen's main manufacturing and supply unit, will also be the beneficiary of "a large investment programme" to support growing international sales.
The Dreux site specialises in the manufacture and packaging of high volumes of oral formulations and primary care finished products.
It also houses analytical development activities and manufacture of medicinal products for use in clinical trials.
Current annual output from the site totals around 911 million sachets, 767 million tablets, 362 million capsules and 72.5 million packs.
The company specialises in the therapeutics areas of oncology, endocrinology and neuromuscular disorders, with products including Decapeptyl (triptorelin), Somatuline (lanreotide) and Dysport ( Clostridium botulinum type A toxin-haemagglutinin complex), but also has expertise in the primary care sector covering gastroenterology, cognitive and cardiovascular disorders.
Dreux is the company's oldest site, one of five manufacturing sites Ipsen operates in France.
"By selecting Dreux as its international centre of formulation and pharmaceutical development, Ipsen chose to reinforce its investments in France, a country that features exceptional intellectual, human, technological and scientific assets in the worldwide scientific area," Ipsen CEO Jean-Luc Bélingard said of the investment.
"Our Dreux facility…will be an important platform for our international development."
The company has been investing in its operations over the last year, with the Dreux site already having seen some of the money head its way.
The company spent around €6.4m on industrial buildings and fittings over 2006, and €19.9m on industrial equipment - mainly at the Dreux and Wrexham, UK, production sites.
The company also focuses heavily on its R&D activities, with this latest investment also benefiting this side of the business, allowing Ipsen to take on an extra 15 R&D specialists.
During 2006, over 20 per cent of the company's consolidated sales went straight back into funding R&D activities, putting the total R&D investment over the year at €178.3m. The company's operating profit hit €187.2m in the last financial year.