Shire dives as copycat is backed by US watchdog
Shares in the British FTSE 100 pharmaceuticals giant Shire yesterday dived 11 per cent after regulators shocked the City by giving their backing to a generic rival of one of its best-selling drugs.
Regulators in the United States, the world's biggest market for drugs, backed a cheaper, copycat version of Shire's hyperactivity medicine, Adderall XR, made by US generics firm Watson Pharmaceuticals.
City analysts were caught out by the move, which came almost two years earlier than they had expected. "We now expect this business to shrink precipitously," said Savvas Neophytou, a pharma analyst at Panmure Gordon.
Although Shire has newer medicines for attention deficit hyperactivity disorder, including Vyvanse and Intuniv which have seen growing sales in the US, Adderall saw soaring sales last year, up 48 per cent at $533m (£342m).
Jeremy Batstone-Carr at Charles Stanley warned investors should expect Shire "to be hit by potentially severe downgrades", but said that would depend on several "important imponderables". These include the timing and pricing of the generic rival's launch by Watson.
Shire said it still expects to "deliver good full-year 2012 earnings growth", and that it would remain a big player in the ADHD market.
The shares fell by 223p to 1,743p.
Charles Stanley still rates the shares a buy, saying: "We continue to expect Shire to deliver compound growth in earnings per share over 2013-16 of around 15 per cent."
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