Green light for drug to give Shire a lift

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FTSE 100 pharmaceuticals group Shire is expected to receive US regulatory approval within days for a new drug that could become one of its biggest sellers, generating up to $300m (£164m) a year.

The Food and Drug Administration is due to give its final verdict on Elaprase - a treatment for Hunters Syndrome, a rare and fatal genetic disorder - by 24 August at the latest. Industry insiders, however, say a decision may come sooner. Shire then plans to launch the drug later this summer.

Analysts expect the drug to be approved. They also believe that, with an estimated cost of around $200,000 for a year's supplies, it will eventually bring in between $200m and $300m in annual sales. That would make it the company's second biggest earner after Adderall XR, its treatment for attention deficit hyperactivity disorder (ADHD).

The news will be a relief to shareholders in the UK's number three drugs maker, which will report a drop in profits on Friday. Jonathan Senior, analyst at Evolution Securities, expects second-quarter earnings before costs of $93.4m, against $134.1m in the same period last year, as prescriptions for several of its drugs slide.

While sales of Adderall XRremain strong, accounting for more than half the group's $1.6bn in annual revenue, losing ground in the last quarter were, for example, epilepsy treatment Carbatrol and Agrylin for blood conditions. The profit drop is also due to increased spending on research and development, new drug launches and marketing.