Shire ( SHPGY ) announced that it has received approval for its oral powder formulation of Fosrenol (lanthanum carbonate), a phosphate binding agent, through the European Decentralised Procedure. The Swedish Medical Products Agency acted as the reference member state and approved Fosrenol.
Shire has submitted marketing applications in 28 European nations, including Sweden. The national approvals are expected to commence in the second quarter of 2012.
Fosrenol is approved for hyperphosphatemia in end stage renal disease patients. It is also approved for the treatment of adult patients with chronic kidney disease (CKD) who are not on dialysis with serum phosphate levels of 1.78 mmol/L (5.5 mg/dL) or more and are unable to control serum phosphate levels with a low phosphate diet alone. Currently, Fosrenol is available as a chewable tablet in 500mg, 750mg and 1,000mg dosage strengths.
In 2011, Fosrenol generated sales of $166.9 million and royalties of $46.5 million. While royalties increased 74% due to higher sales in Japan, product sales in other countries fell 8%. Product sales were impacted by mandatory price reductions imposed in several European countries.
In the US, sales were hampered by lower prescription demand and higher sales deductions year over year. Fosrenol is marketed in Japan through Shire's strategic alliance partner, Bayer Yakuhin Ltd. Shire receives a double-digit royalty on Bayer's net sales of Fosrenol.
Mylan Pharmaceuticals, Inc. ( MYL ) -- in collaboration with Matrix Laboratories, Inc., Natco Pharma Limited and Alkem Laboratories Ltd. -- have filed abbreviated new drug applications (ANDA) seeking to market generic versions of the drug. Shire has challenged the applications thus triggering 30-month stays on the ANDAs.
We currently have a Neutral recommendation on Shire. The stock carries a Zacks #2 Rank (Buy rating) in the short run.
Shire's recent collaborations and acquisitions (including Movetis and Advanced BioHealing Inc.) have added immense potential to its pipeline. With several of its products already facing or likely to face generic competition, the company's pipeline needs to deliver.
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