Shire Surges After FDA Approves Xiidra for Dry-Eye Diseaseby
Xiidra is only treatment approved for both signs and symptoms
Analysts estimate sales will exceed $1 billion by 2022
Shire Plc rose to its highest level in 10 months in London after the U.S. Food and Drug Administration approved its Xiidra drops to treat dry-eye disease, the first treatment for the ailment to be approved in more than a decade.
Shares rose as much as 4.8 percent to the highest intraday price since Aug. 20. The stock was up 3 percent to 4,961 pence at 12:53 p.m. in London trading.
Xiidra could become a blockbuster by 2022, with sales of just over $1 billion, according to the average of seven analysts’ estimates compiled by Bloomberg. The FDA approved the eye-drop for both early signs of dry eye detectable by doctors and symptoms such as stinging and burning, making it the only approved drug in the U.S. for this indication, according to a note today from analysts including Peter Welford at Jefferies.
Shire’s product will take on Allergan Plc’s Restasis, a drop that that induces tear production. A survey of ophthalmologists by analysts at Citigroup found a “clear pent-up demand” to try Xiidra on patients that had failed to respond to Restasis, according to a note published today. About half of Restasis patients who stop taking it do so because of its cost, the Citigroup survey found.
Shire is preparing to talk to pharmacy benefit managers and other payers in the U.S. to have Xiidra included on their formularies, said Chief Executive Officer Flemming Ornskov in a phone interview.
“I’m very confident that over time, Xiidra will be available with reimbursement to many patients in the U.S. and we will meet the significant unmet need there is,” Ornskov said. He declined to comment on the planned price of the drug.
Shire is also in discussions with European, Canadian and Japanese regulators as
well, Ornskov said.
The company acquired the drug with its purchase of SARcode Bioscience Inc. in 2013, a deal that Ornskov worked on with his predecessor just before taking the top job. Shire, which last month completed its acquisition of Baxalta Inc., isn’t after more large-scale deals, Ornskov said.
“What’s next for Shire is one single word: execution,” he said. The company will “continue to look for innovation in the marketplace. It’s not large scale M&A -- that’s not in the cards for Shire right now.”