Shire reported first quarter 2014 earnings of $2.36 per ADS,
beating the Zacks Consensus Estimate of $2.22. Quarterly revenues
increased 18% to $1.3 billion, in line with the Zacks Consensus
Estimate. The acquisition of ViroPharma is expected to boost the
bottom line by 7% in 2014. AbbVie recently proposed to acquire
Shire for 20.44 in cash and 0.7988 AbbVie shares per Shire share.
The proposal was initially made on May 30, 2014. However, Shire
reiterated that its board has already considered the proposal in
detail and unanimously rejected it as it believes that the proposal
fundamentally undervalues Shire and its prospects. With the
proposed acquisition, the stock has been holding up steady in the
last few days. However, we do not see further upside potential at
the current levels and downgrade our recommendation to Neutral.
Founded in 1986, Dublin-based Shire is a specialty
biopharmaceutical company catering to diverse medical needs through
research and development, manufacture, sale, and distribution of
Shire repositioned its business in 2013 undertaking a
realignment program with strategic focus on rare diseases and
greater operational discipline. With an aim to reduce overlap,
Shire has merged its three autonomous divisions into one. Shire
re-aligned its business structure to drive growth and innovation.
As per the strategy, Shire has an "In-Line" marketed product group
and a Pipeline Group, with centralized corporate functions. The
In-Line marketed products group consist of five business lines,
which will focus on commercial delivery Rare Diseases, Neuroscience
(formerly Behavioral Health), Gastrointestinal (GI), Regenerative
Medicine (RM) and Internal Medicine (with a focus on Adderall XR,
Fosrenol and Xagrid) . The Pipeline Group consists of Research
& Development (R&D) and Business Development (BD). The unit
focused on late-stage development programs with pre-clinical
development focus being primarily on rare diseases, led by a single
R&D organization. The BD unit will focus on identifying
later-stage development programs and in-market products in target
specialist areas. Further, Shire will expand its footprint in Asia
and Latin America with a key focus on Japan, China and Brazil.
For 2013, the company reported revenues of $4.9 billion, up 9%
year over year. Product sales of $4.7 billion were up 12% from
2012. Shire also receives royalty revenues which mainly comprise
income earned from the sale of the authorized generic version of
Adderall XR, 3TC, Zeffix, Fosrenol, and others. Income from
royalties came in at $153.7 million, down 36% from 2012.
Sales in 2013 (in millions of dollars)
Attention deficit and hyperactivity disorder (ADHD)
Hyperphosphatemia in end stage renal disease
hereditary angioedema or HAE
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