Shire has raised its full-year earnings expectations after turning in a strong performance during the second quarter, in which stellar sales growth helped drive a huge leap in income.
The company beat expectations by generating operating income of $224 million (on a US GAAP basis), marking a massive 547% leap over the year ago period, driven in part by sales of its rare disease drugs Elaprase (idursulfase) for Hunter syndrome and Replagal (agalsidase alfa) for the treatment of Fabry disease, which continued to benefit from rival firm Genzyme’s manufacturing problems.
Total product sales jumped 37% to $764 million, propelled by growth from both core products, up 39% to $684 million, and the veteran attention-deficit hyperactivity disorder drug Adderall XR (mixed amphetamine salts), which although off-patent climbed 19% to $80 million, the company said.
In terms of core products, strong performances were recorded across the board, with sales of Vyvanse (lisdexamfetamine dimesylate), the follow-up to Adderall XR, jumping 30% to $148 million, Elaprase up 17% to $100 million, Replagal up 84% to $82 million, Lialda/Mezavant (mesalamine), for ulcerative colitis, up 27% to $70 million, and new kids on the block Intuniv (guanfacine) for ADHD and Vpriv (velaglucerase alfa) for Gaucher disease generating $51 million and $29 million, respectively.
Shire was also able to substantially cut its net debt during the period, which, at June 30, was $398 million, marking a reduction of $217 million this year, driven by a strong cash generation of $694 million in the first half, the group explained.
Looking forward, the company said it is anticipating a stream of regulatory/governmental approvals and product launches over the next 12 months that will help to drive progress, including: Vpriv for the treatment of Type 1 Gaucher disease in the European Union; Mezavant for the treatment of ulcerative colitis in certain EU and other countries; Firazyr (icatibant) for the symptomatic treatment of acute attacks of hereditary angiodema in certain European and Latin American countries; Equasym (methylphenidate) for the treatment of ADHD in certain EU countries; and Vyvanse for the treatment of ADHD in children in Brazil.
And given its strong performance during the second quarter, which saw US GAAP diluted earnings per ADS leapt 253% to $0.86 and Non-GAAP diluted earnings per ADS jump 71% to $1.03, Shire says it now expects to see Non-GAAP earnings trending towards $4.00 per ADS, a 15% increase on 2009, including the financial effect of the proposed acquisition of Movetis NV.
“The accelerated growth in the first half has increased our confidence in growing both revenues and earnings for the full year 2010 compared to 2009, despite the backdrop of the cumulative impact of healthcare reform, pressure on European pricing and increasingly adverse foreign exchange rates”, the groups said.
In addition, given its stellar performance in the first half of the year and raised outlook, combined R&D and SG&A spending in 2010 will be at the top end of previous guidance of 5%-10% growth year on year, Shire noted.