Shire is considering cleaving its neuroscience division into a separate, publicly-listed entity in a move that would afford the firm a sharper focus on rare diseases.
“We are at an exciting inflection point, with both our rare disease and neuroscience businesses performing strongly and each having significant growth potential over the coming years,” said Flemming Ornskov, the group’s chief executive, explaining the move.
“The strength and scale of our business provides us with the opportunity to further optimise our franchise portfolio…By year end, we expect to complete a formal evaluation of the full range of strategic options for the neuroscience franchise, including the potential for its independent public listing.”
The news came on the back of solid results for the second quarter, including a 54 percent leap in sales to $3.7 billion after results were given a lift by the group’s purchase of Baxalta last year.
Excluding Baxalta products revenues from Shire’s own pipeline came in a $1.9 billion, marking growth of 7 percent on a combined pro forma basis, primarily due to 15 percent growth of its internal medicine franchise.
Shire also said cost synergies achieved through the Baxalta merger were better than expected, coming in at $400 million versus the target of $300 million, and firmly on track to hit the $700 million mark at year three.
Net income swung into the red with $240 million booked for the period versus a loss of $162 million a year ago, while diluted earnings per American Depository Share (ADS) were $0.79.
The group said that based on its “strong performance” for the first half of 2017 it has updated its guidance for the full year, expecting total product sales of $14.3 - $14.6 billion and diluted earnings per ADS of $5.65 - $6.05.
“As we enter the second half of 2017, we are focused on generating strong organic growth while continuing to deliver on our key priorities - launching more than 80 products globally by leveraging our expanded commercial platform, progressing our late-stage pipeline, integrating Baxalta, and paying down debt,” noted Ornskov. “We have updated our 2017 full year guidance and remain very confident about Shire’s long-term prospects.”