Shire Forecasts Higher Earnings in 2015 After NPS AcquisiMakiko Kitamura
Shire Plc forecast higher earnings as the maker of drugs for rare diseases and attention deficit hyperactivity disorder gets new medicines through its acquisition of NPS Pharmaceuticals Inc.
Shire’s non-GAAP diluted earnings per American depositary share will rise by a “mid-single” digit percentage in 2015, the Dublin, Ireland-based company said in a statement today. In the past year, earnings rose 38 percent on that basis.
The drugmaker agreed to buy Bedminster, New Jersey-based NPS last month to expand its portfolio of rare-disease treatments. Shire is seeking to boost growth after its proposed $52 billion sale to AbbVie Inc. collapsed last year and has said it will continue buying companies to become a leader in the biotech industry.
“We’ve built the strongest pipeline we’ve ever had both through focused internal development and by successfully acquiring assets that have a very strong strategic fit with Shire,” Chief Executive Officer Flemming Ornskov said on a call with reporters.
While rare diseases remains a key area of focus for possible further acquisitions, the company is looking broadly at opportunities, Ornskov said. The CEO declined to comment on investor speculation that Shire might buy Salix Pharmaceuticals Ltd., a leader in treatments for gastro-intestinal disease.
The shares traded 1.1 percent higher at 4830.50 pence as of 12:28 p.m. in London. They’ve gained 53 percent in the past 12 months, including reinvested dividends.
Its $5.2 billion purchase of NPS has already started to pay off with the drugmaker winning U.S. approval on Jan. 23 for Natpara, a drug to control low blood calcium levels related to hypoparathyroidism. Shire said today it expects product sales growth of a mid-to-high single digit percentage in 2015, excluding currency shifts.
Growth will also come from Shire’s best-selling ADHD drug Vyvanse, which was approved in the U.S. on Jan. 30 to treat binge-eating disorder. The additional use may add as much as $300 million to annual sales of Vyvanse, Ornskov said. The company is also planning to study Vyvanse in preschool-age children at the request of the Food and Drug Administration.
The current pipeline of experimental drugs will add $3 billion to revenue by 2020, and total sales will double to $10 billion, the company said in December, before the NPS acquisition.
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 have offices in Lexington, Massachusetts.