Solid 2014 Expected for Shire - Analyst Blog


The year 2013 was strong for Shire ( SHPG ). The company repositioned its business in 2013 undertaking a realignment program with strategic focus on rare diseases and greater operational discipline.

Shire recently updated its guidance for 2013 at the JP Morgan Healthcare Conference. The company now expects to report earnings at the upper end of the mid-to-high teens guidance range provided earlier with the  third quarter results.

In a bid to strengthen its portfolio of rare disease drugs, Shire announced that it will acquire ViroPharma Inc. ( VPHM ) for approximately $50 per share or $4.2 billion in Nov 2013.

Shire remains confident, that if the potential acquisition goes through, will augment both its top line and bottom line. ViroPharma's lead drug Cinryze is approved in the U.S. for routine prophylaxis against angioedema attacks in adolescent and adults with hereditary angioedema  (HAE). Cinryze complements Shire's Firazyr which is indicated for the on-demand treatment of acute HAE attacks. The potential acquisition is expected to generate synergies over $150 million in 2015.

Meanwhile, Shire's expects data from various studies on its key pipeline candidates in 2014 - attention deficit and hyperactivity disorder (ADHD) drug Vyvanse for major depressive disorder, data from dry eye disease candidate lifitegrast, label expansion of Xagrid (essential thrombocythemia), data on ADHD drug Intuniv among others.

With an aim to reduce overlap, Shire has merged its three autonomous divisions into one. Shire has decided to pursue development programs with a focus on rare diseases only. Hence, it discontinued all other development programs. We believe Shire's efforts to build a leaner organization with better focus on rare diseases should lead to improved margins.

Shire carries a Zacks Rank #3 (Hold). Investors may consider companies like Forest Laboratories ( FRX ) and Questcor Pharmaceuticals Inc . ( QCOR ), which carry a Zacks Rank #2 (Buy).

FOREST LABS A (FRX): Free Stock Analysis Report

QUESTCOR PHARMA (QCOR): Free Stock Analysis Report

SHIRE PLC-ADR (SHPG): Free Stock Analysis Report

VIROPHARMA (VPHM): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: ADHD , FRX , HAE , QCOR , SHPG

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