23rd Jul 2015 11:50
LONDON (Alliance News) - Shire PLC on Thursday upped its full-year earnings guidance as it posted a decline in pretax profit for the first half of 2015, as a result of an increase in operating costs following its acquisition of NPS Pharmaceuticals and investments in its pipeline.
The Dublin-based drug company's interim results fell short of analyst expectations, and the stock is trading down 2.6% at 5,325.00 pence Thursday afternoon, third worst performer in the FTSE 100.
Shire now expects to post full-year non generally accepted accounting principles diluted earnings per American depositary share growth in the mid-to-high single digit range. Previously it had guided for non-GAAP diluted earnings per ADS growth in the mid single digits.
Additionally, Shire expressed confidence in its USD10 billion in product sales by 2020, and also said it expects to meet its target of USD6.5 billion of product sales in 2016, with the possibility of exceeding this target with the contribution from its acquisition NPS Pharmaceuticals.
The pharmaceutical group posted pretax profit of USD591.2 million for the half year to end-June, down from USD653.1 million a year before, as revenue rose to USD3.05 billion from USD2.85 billion, but this was offset by higher research and development costs and selling, general and administrative expenses. Analysts expected Shire to report pretax profit of USD658 million for the half year.
The increase in operating costs was partly due to the first full quarter integrating the operating costs of NPS Pharmaceuticals. Additionally the company said it had significantly increased investment during its second quarter in the expansion of Vyvanse into binge eating disorder and in the launch of hypoparathyroidism treatment Natpara which it acquired with NPS Pharmaceuticals.
The company also recorded an impairment charge of USD243 million in relation to its SHP625 treatment for cholestatic liver disease and SHP608 assets in relation to lower probability of regulatory approval following trial results.
For the second quarter Shire recorded revenue of USD1.56 billion, up from USD1.50 billion, falling just shy of analyst expectations of USD1.58 billion.
It posted product sales of USD2.90 billion, up from USD2.78 billion. The company said that sales in its second quarter were driven by a strong performance from its attention deficit hyperactive disorder treatment Vyvanse, hereditary angioedema treatment Firazyr, and ulcerative colitis treatment Lialda/ Mezavent.
In the second quarter, product sales excluding Shire's ADHD treatment Intuniv, which has been hit by generic competition, rose 7%. Sales in Intuniv fell 91% in the quarter. Product sales in the quarter was also held back by the strength of the US dollar, which Shire estimates hit sales by over 5 percentage points.
Shire proposed an interim dividend 4.21 cents per share, up from 3.83 cents in the previous year.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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