Shire reported fourth-quarter 2014 earnings (excluding special
items and amortization) of $2.63 per American Depositary Share
(ADS), up from $2.26 per ADS in the year-ago quarter but missed the
Zacks Consensus Estimate of $2.66.Quarterly revenues increased
18.8% to $1.6 billion, beating the Zacks Consensus Estimate of $1.5
billion. The upside was driven by growth in the Rare Diseases
business we are upbeat on the NPS Pharma acquisition, which should
boost the company's rare disease portfolio. The acquisition will
add Gattex for short bowel syndrome and Natpara for
hypoparathyroidism to Shire's portfolio.Moreover, with AbbVie Inc.
terminating its acquisition offer late in 2014, Shire's efforts to
strengthen its pipeline should attract investor focus. We maintain
a Neutral recommendation.
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
realigned 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
focuses 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 focuses 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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