Shire beats revenue forecasts and refuses to rule out takeover bid for its US partner
Saturday 28 October 2006
Shire beat the City's third quarter revenue forecasts yesterday amid surging sales of its core hyperactivity drug, Adderall. However, the company remained tight-lipped on talk of a deal to buy US partner New River.
The UK's third biggest drugs group is in the midst of a string of treatment launches including a possible successor to the top-selling Adderall XR product.
The market was shaken earlier this year after US regulators added fresh warnings to stimulants such as Adderall.
However, Shire and New River received conditional approval from US regulators for the potential replacement, the NRP104 treatment, this month.
Shire believes NRP104 has an advantage over Adderall because it is a slower-release drug that does not become active until it reaches the stomach and therefore does not provide an instant "hit". This makes it less open to abuse or overdose.
Analysts said they expected it to be formally launched in the second quarter of next year, with up to three more products hitting the market in 2007.
The approval of the treatment has sparked speculation that Shire might seek to launch a bid for its partner. The chief executive, Matthew Emmens, said Shire was "an acquisitive company" but he would not comment on possible targets.
Despite the US concerns over the use of stimulants to treat attention deficit hyperactivity disorder (ADHD), sales of Adderall powered ahead 25 per cent to $207.6m (£109.4m). Daytrana, a skin patch treatment for ADHD, also enjoyed a good start and overall revenues grew 19 per cent to $449.4m.
Shire warned that it expected full-year costs to be at the top end of its $770m to $800m range because of the expense of launching five new products this year, but research and development costs would be at the lower end of the $310m to $330m range.
The company also refined its full-year revenue guidance, saying it expected a 12 to 14 per cent increase as opposed to "low double-digit" growth. Most took that as an upgrade and the shares responded by gaining 19p to 965p.
During the last quarter, Shire filed two new drugs for approval with US regulators. They are SPD465 and 503, both ADHD treatments. Producing drugs for the condition is a key market for Shire, which aims to have drugs in all sections of the market.
Elaprase, a Shire drug which treats Hunter syndrome, was approved in the US during the quarter. The drug has also been recommended for approval in the EU.
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