Shire is working on two to three deals that are in advanced talks, Ornskov said, according to one of the people who attended an event the drugmaker held for analysts last night at the South Place Hotel in London. When pressed, the new CEO said a transaction probably won’t be announced this year, this person said.
The gathering is part of an effort by Ornskov, who takes over from Angus Russell as CEO on April 30, to get to know analysts and sales people who follow Dublin-based Shire. Ornskov said Shire aims for double-digit sales growth over the longer term and is willing to expand into other businesses to achieve that, said the second person. The people asked not to be identified because the event, which about 25 people attended, was private.
Shire, which has management offices in Basingstoke, England, rose 0.6 percent to 2,085 pence in London, giving the company a market value of 11.6 billion pounds ($17.8 billion). The stock has declined 7 percent in the past year, including reinvested dividends, compared with a 23 percent advance in the Bloomberg Europe Pharmaceutical Index.
Ornskov spoke of one of the potential deals being transformational, one of the people said, while the other said he indicated that transformational deals are still on the agenda. Ornskov said at the meeting that none of the deals would be transformational, and those who heard his comment may have misunderstood it, said Ben Atwell, a spokesman for Shire.
Drugs for attention deficit hyperactivity disorder accounted for 38 percent of Shire’s sales last year, while medicines for rare genetic diseases contributed 31 percent.
Ornskov spoke of needing to invest more in research and development to remain competitive, the second person said.
The CEO-designate and Chief Financial Officer Graham Hetherington mingled with different groups at last night’s gathering for drinks. In one group, Ornskov said Shire may favor partnerships with milestone payments over acquisitions, according to a third person who was at the event.
Ornskov also said that divesting Dermagraft, a treatment for diabetic foot ulcers, isn’t out of the question, this person said. Shire acquired the product with its $750 million purchase of Advanced Biohealing Inc. in May 2011. The company abandoned efforts to develop Dermagraft for leg ulcers in August 2011 after it failed in a clinical trial. Sales of Dermagraft dropped 65 percent to $19 million in the fourth quarter, Shire said Feb. 14.
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