1st May 2014 12:09
LONDON (Alliance News) - Shire PLC Thursday raised its guidance for earnings per share in 2014, reflecting the contribution from its recently completed acquisition of ViroPharma Inc.
Shire completed the acquisition for USD4.2 billion in January.
The company now expects to see non-GAAP earnings per share growth in the mid-to-high 20% range. Previously it had guided at a similar level to the 23% growth it saw in 2013.
Shire said it continues to expect operating costs to benefit from its reorganisation, and as a result expects combined non-GAAP research and development, and selling, general and administrative expenses to grow by 4% to 6%. Previously it had guided at 6% to 8%.
It expects these expenses to be higher in the remaining quarters of 2014 compared to the first, as it continues to invest in its pipeline and new acquisitions. It also will increase its commercial spending ahead of the launch of attention deficit hyperactivity disorder (ADHD) treatment SHP465 in the US and thrombocythaemia treatment XAGRID in Japan.
Outside of this, Shire maintained all of its existing guidance, continuing to expect 2014 product sales growth in the mid-to-high teens, royalties and other revenues to be 10-15% lower than 2013.
It continues to expect non-GAAP gross margin to be around 1% lower than 2013 due to a slight dilution from ViroPharma.
Shire posted a pretax profit of USD304.3 million in the first quarter of 2014, down from USD352.0 million in the previous year quarter, despite seeing revenues rise to USD1.31 billion from USD1.10 billion in the previous year, as it was hit by higher operating expenses.
Product sales grew 19% in the first quarter. Excluding sales from ViroPharma products, product sales rose 11%.
ADHD treatment Vyvanse sales rose 18% during the quarter, driven by price increases and some higher prescription demand, although this was offset somewhat by de-stocking in the quarter.
Ulcerative Colitis treatment Lialda/Mezavent rose 28%, driven by higher prescription demand in the US. Hereditary angiodena (HAE) attack treatments Firazyr sales were up 80%. Cinryze, also for the treatment of HAE, saw sales rise 16%. Shire acquired Cinryze with its acquisition of ViroPharma.
Adderall XR sales dropped 15%, continuing to be hit by generic competition.
Royalty revenues were USD32.3 million, down from USD38.5 million, hit by poor royalties from hepatitis B treatments 3TC and Zeffix. In the quarter, Adderall XR revenues benefited from royalties from Teva Pharmaceuticals Inc that will not continue after the first quarter.
Shire also said Thursday that it will acquire biotechnology company Fibrotech Therapeutics Pty Ltd for USD75 million. With this acquisition, it will add a new product to its pipeline, FT011, for the treatment for renal impairment that is currently in a Phase 1B study.
The acquisition is subject to approval from Australia's Foreign Investment Review Board.
Shire made no comment in its statement about the reported takeover approach from Botox-maker Allergan Inc.
Shares in Shire were trading up 2.2% at 3,451.00 pence Thursday afternoon.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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