12th Feb 2015 13:54
LONDON (Alliance News) - Shire PLC Thursday reiterated confidence in its target of USD10 billion in annual product sales by 2020, as it posted a rise in pretax profit for 2014 boosted by the break-fee from its collapsed takeover by US drugmaker AbbVie Inc, and posted earnings per share in line with guidance.
The FTSE 100 listed pharmaceutical company posted non generally accepted accounting principles diluted earnings per American depositary share of USD10.60 for 2014, up 39% from USD7.66 in 2013. At the time of its third quarter, Shire had said it expected to report non-GAAP earnings per American depositary share growth in the high 30% range.
Analysts had expected non-GAAP diluted earnings per ADS of USD10.55.
Shire proposed a total dividend of 22.92 cents, up from 19.93 cents in the previous year.
The company posted a pretax profit of USD3.34 billion, up from USD1.69 billion a year before, as revenue rose to USD5.83 billion from USD4.76 billion, bolstered by the USD1.64 billion break fee from AbbVie. This helped offset higher operating costs related to its acquisition of ViroPharma Inc last January, and costs of USD180.9 million relating to its 'One Shire' reorganisation.
Shire's proposed takeover by AbbVie Inc collapsed last October, a casualty of new US Treasury measures put in place to curb so-called "tax inversion" deals. Shire noted that it has been advised that the break fee from AbbVie should not be taxable in Ireland, but said this has not been agreed with tax authorities.
Revenue growth in 2014 was bolstered by USD538 million in revenue from products Shire acquired with ViroPharma, and 18% growth from its Vyvanse product for attention deficit hyperactivity disorder. This offset a 44% drop in sales from its ADHD treatment Intuniv, which lost exclusivity last December. The strengthening of the dollar also held back product sales by 3%, Shire said.
Shire expects to see product sales growth in the low-to-mid single digit range at actual exchange rates in 2015, lower than in 2014, as it expects significantly lower sales of Intuniv, and headwinds from the strengthening of the US dollar. At constant exchange rates Shire expects product sales growth in the mid-to-high single digits.
Royalties and other revenues are expected to be up 30% to 40% in 2015, including royalty streams from NPS Pharmaceuticals Inc. Shire expects to complete its USD5.2 billion acquisition of NPS in the first quarter of 2015.
Shire expects to see non GAAP diluted earnings per American depositary share growth in the mid-single digits in 2015.
The company expects to see its non GAAP research and development, selling, general and administrative costs to remain flat compared to 2014, and including NPS, it expects operating costs to grow in the high single digits.
Shire said it "significantly enhanced" its pipeline in 2014, and it now has 21 programmes in clinical development. It recently got US approval for its Vyvanse compound for binge eating disorder for adults, and NPS Pharmaceutical's Natpara drug for hypoparathyroidism was approved by the US Food and Drug Administration in January.
"In 2015, Shire is well-positioned on our journey to become a leading global biotech as we complete our One Shire reorganization with the expected benefits of profitability and efficiency, and advance pivotal regulatory and clinical milestones that will contribute to USD10 billion in product sales by 2020," said Chief Executive Officer Flemming Ornskov in a statement.
Edison Investment Research analyst Mick Cooper said: "Shire?s results underline the progress being made and strengths of the business, and also demonstrate why it remains such an attractive asset for potential suitors. The strong results are all the more remarkable given the distractions caused by the aborted acquisition by Abbvie."
Shares in Shire are trading up 2.6% at 4,900.00 pence Thursday afternoon, one of the best performers on the FTSE 100.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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