Shire has turned in an impressive set of results for the third quarter after continuing to benefit from Genzyme’s manufacturing woes and strong sales of Vyvanse, prompting another rise in full-year forecasts.
The UK drugmaker beat expectations with a 70% leap in operating income to $156 million (on a US GAAP basis), largely driven by higher sales of its rare disease drugs Elaprase (idursulfase) for Hunter syndrome and Replagal (agalsidase alfa) for the treatment of Fabry disease, following a shortage of Genzyme’s rival drugs.
During the quarter the company generated sales of $794 million, up 32% over the year-ago period, propelled by growth from both core product sales, up 31% to $694 million, and veteran attention-deficit hyperactivity disorder drug Adderall XR (mixed amphetamine salts), which jumped 41% to $100 million.
Of the core products, star players were Replagal, which rocketed 91% to $92 million, and Vyvanse (lisdexamfetamine dimesylate), the follow-up to Adderall XR, climbing 17% to $151 million, as well as new kids on the block Vpriv (velaglucerase alfa) for Gaucher disease and Intuniv (guanfacine) for ADHD, which made $50 million and $37 million, respectively.
Shire was also able significantly slash its net debt during the period, which, at September 30, was $309 million, a reduction of $306 million in the first nine months of the year following a strong cash generation of $959 million during the period.
“This continued excellent performance demonstrates the overall strength of Shire’s business and the sustained execution of our strategy,” said chief executive Angus Russell, commenting on the results. “We’re building our business for the future. We’re investing to enhance the value of our product pipeline, building our international structure to maximise the global reach of our products and using our strong acquisitions and in-licenses,” he added, emphasising the firm’s potential.
Ups earnings target
On the back of the stronger than expected third quarter, the group said it has increased its forecasts for the full year, now expecting Non GAAP earnings per ADS of up to $4.20, including the effect of its purchase of Belgian drugmaker Movetis and disposal of Daytrana, as well as the impact of US Healthcare Reform, mandatory price cuts in Europe and foreign exchange rates.
On the down side, Shire is now the subject of a lawsuit filed by GlaxoSmithKline in the US after it terminated the groups’ co-promotion agreement for Vyvanse during the quarter, following disappointing results.
GSK is seeking compensation from Shire for pulling out of the deal, but Shire argues that, under the terms of the firms’ agreement, no termination or other payments are due to GSK “since agreed upon sales thresholds were not achieved”. According to Shire, the lawsuit is “frivolous and without merit” and it stressed it would “vigorously” defend itself in court.