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Shire EPS Beats Targets on ADHD Drugs Adderall XR, Vyvanse

Feb. 9 (Bloomberg) -- Shire Plc, the U.K. maker of the Adderall XR hyperactivity pill, said fourth-quarter profit surged 47 percent as sales of the pill and successor treatment Vyvanse gained.

Fourth-quarter earnings excluding some items jumped to $1.51 per American depositary share, compared with $1.03 a year earlier, Dublin-based Shire said today in a statement. Earnings beat the median estimate of $1.38 per ADS from eight analysts surveyed by Bloomberg.

Gross margins will be “marginally lower” this year, reflecting costs from the $750 million acquisition of Advanced BioHealing Inc., Shire said. Research, sales and administrative expenses will rise by 10 percent to 12 percent this year compared with 2011, the company said. Product sales, which increased 26 percent last year, will gain by a percentage in the low- to mid-teens range this year, Shire said.

“Just under half of the earnings beat on consensus came from the tax rate so we shouldn’t get too excited, but the margins are still better,” said Justin Smith, an analyst at Oriel Securities in London who recommends buying the stock.

Shire shares rose 0.3 percent to close at 2,180 pence in London. The stock has increased 32 percent, including reinvested dividends, in the last year, compared with a 13 percent return in the 18-member Bloomberg Europe Pharmaceutical Index.

Sales Increase

Total revenue increased 23 percent to $1.14 billion, helped by a 2009 production disruption at Sanofi’s Genzyme unit which handed Shire a sales windfall for genetic-disorder treatments Vpriv and Replagal. The U.S. Food and Drug Administration cleared a new Sanofi plant last month that would help ease the shortage. The agency is also “very near to a decision” on Shire’s new manufacturing site, Chief Executive Officer Angus Russell said on a conference call with reporters.

“We see approval of our new, much larger facility in the next month or two,” Russell said. “Genzyme is approved but that’s not going to change the supply-demand position tomorrow. They’ve been running at non-existent inventory. All of this is going to take several months.”

Newer Drugs

Newer drugs, including Intuniv for attention deficit hyperactivity disorder and Firazyr for hereditary angioedema, have helped Shire cut dependence on Adderall XR, which generated more than one-third of annual sales before competing generic products came on the market in 2009. Adderall XR brought in $125 million, a 40 percent rise from the same period last year.

Vyvanse, called Venvanse outside the U.S., brought in $217 million in the quarter, helped by new markets including Brazil. Shire is seeking European approval of the drug by the end of the year while developing ADHD products for patients in Japan.

The company also continues to seek acquisitions in “niche areas,” such as gastrointestinal disorders, ADHD and rare diseases, Russell said. The partnership with Sangamo BioSciences Inc. marks Shire’s first entry into the gene therapy area, he said.

“When we’re looking at bolt-ons we’re looking for good ideas, pipeline ideas, that will drive our growth in the future,” Russell said, declining to be specific on names of potential targets. “We’ve seen some overhyping in terms of valuations.”

To contact the reporter on this story: Trista Kelley in London at tkelley2@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net

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