) recently announced that the company has reached an agreement in
principle to resolve the previously disclosed civil investigation
into Shire's sales and marketing practices in the US relating to
key drugs in the Attention Deficit Hyperactivity Disorder (ADHD)
The investigation was led by the US Attorney's Office for the
Eastern District of Pennsylvania, seeking production of documents
related to the sales and marketing of Shire's drugs for treating
ADHD - Adderall XR, Vyvanse and Daytrana.
We remind investors that the investigation started in Oct 2009
when Shire received a civil subpoena from the US Department of
Health and Human Services Office of Inspector General in
coordination with the US Attorney for the Eastern District of
The investigation aims to verify whether Shire engaged in
off-label promotion and other conduct that may implicate the
civil False Claims Act. We note that Shire divested Daytrana to
Noven Pharmaceutical Inc in Oct 2010.
In addition, the resolution agreement also aims to address
Shire's sales and marketing practices relating to Lialda and
Pentasa. Lialda is approved in the US and Europe (trade
name: Mezavant) for the treatment of ulcerative colitis. Pentasa
is approved in the US for the treatment of ulcerative
Shire recorded a charge of approximately $57.5 million in the
fourth quarter of 2012 related to this resolution.
Further, the agreement in principle is subject to change until
this matter is finally resolved as discussions are in process
between Shire and the US Government to establish a final
resolution to the investigation.
We believe that if the dispute is resolved favorably then a
major overhang on Shire's shares will be removed.
Currently, Shire carries a Zacks Rank #3 (Hold). Pharma stocks
Eli Lilly and Company
) currently look more attractive with a Zacks Rank #2 (Buy).
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