- Quarterly profit of $725 million tops $692 million estimate
- Drugmaker reiterates full-year earnings growth forecast
Shire Plc reported third-quarter earnings that beat analysts’ estimates and pledged to continue its pursuit of Baxalta Inc. Shares of the U.K. drugmaker rose.
A measure of profit that excludes some costs, labeled by the company as non-GAAP operating income, rose 1 percent to $725 million on a constant currency basis, the Dublin-based company said in a statement on Friday. The average of 10 analysts’ estimates compiled by Bloomberg was $692 million. Sales climbed 4 percent to $1.66 billion.
Revenue was boosted by higher prices and sales of Vyvanse, a drug for attention-deficit and hyperactivity disorder that was recently approved to also treat binge-eating disorder. Buying Baxalta, a market leader in drugs to treat hemophilia, would add another $20 billion in sales by 2020, Shire reiterated today. The U.S. company has so far rebuffed the unsolicited $30 billion offer, made public in August, calling it a “low-ball valuation.”
“We are totally committed to pursuing this transaction, but as we’ve also shown this quarter, we aren’t obsessed,” Chief Executive Officer Flemming Ornskov told reporters on a conference call. “This is an attractive opportunity, but it’s going to take some time.”
Ornskov declined to comment on whether he would sweeten the offer. While he also wouldn’t address speculation that the drugmaker will make an offer for Radius Health Inc., he said the company has several acquisition projects in the pipeline.
Shire also reiterated its forecast for full-year earnings per share to grow by a mid-to-high single digit percentage.
Shares of Shire climbed 3.2 percent to 4,589 pence as of 1:44 p.m. London time. The stock has climbed 14 percent in the past year.
Shire also faced a setback last week when U.S. regulators asked for more clinical trial data before it can decide whether to approve lifitegrast, a potential blockbuster drug to treat dry-eye disease.
The drugmaker plans to resubmit its application in the first quarter of next year, with additional data from a trial dubbed Opus-3, it said on Monday. Lifitegrast is one of the medicines in development that Shire is counting on to meet a goal of boosting sales to $10 billion by 2020 from about $6 billion last year. The drug may reach $723 million in annual revenue by that date, according to the average of analyst estimates compiled by Bloomberg.
Since the day before the Baxalta bid was made public on Aug. 4, Shire’s stock has declined 20 percent amid a wider sell-off in biotechnology stocks as escalating drug prices come under greater scrutiny from lawmakers in the U.S. Baxalta shares have dropped 3.5 percent in that time period.
Shire is registered in Jersey, in the Channel Islands, and based for tax purposes in Ireland. Its primary stock listing is in the U.K., while Ornskov and most other top executives are based in Lexington, Massachusetts.