Shire has reduced its 2013 revenue forecasts after posting lower than expected first-quarter sales, up 1 per cent to a little under $1.2bn.
Shares in the Ireland-headquartered company were under pressure this morning as the company revealed that sales of Fabry disease treatment Replagal (agalsidase alfa) fell 15 per cent to $114m on increased competition caused by the bounceback of Genzyme/Sanofi’s rival Fabrazyme (agalsidase beta) product from supply constraints.
Meanwhile, wound healing product Dermagraft fell 62 per cent to $19m thanks to a restructuring of Shire’s commercial operations in regenerative medicine.
Despite these setbacks, Shire’s core attention-deficit hyperactivity disorder (ADHD) franchise delivered the goods, with Vyvanse (lisdexamfetamine) and Adderall XR (mixed amphetamine salts) doing better than expected.
Vyvanse grew 15 per cent to bring in $298m in the quarter, while Adderall XR managed to stave off generic competition and held up fairly well, dropping just 10 per cent to $100m.
Hunter’s syndrome treatment Elaprase (idursulfase) fell 9 per cent to $114m on order timings, while ulcerative colitis drug Lialda/Mezavant (mesalamine) rose 12 per cent to $101m on increased penetration in the US and price increases.
Overall, product sales for the full year are now expected to grow in the high single digits, compared to Shire’s earlier forecast of low double-digit growth, although the company has maintained its outlook on earnings per share (EPS) of $6.67.
New chief executive Flemming Ornskov – in his first few days at the helm – provided some more detail on his plans to reorganise Shire around five “commercially-focused business units focusing on rare diseases, neuroscience, gastrointestinal disease, internal medicine and regenerative medicine”.
The group will also have a single R&D organisation, with tighter funding and a narrower focus on late-stage projects, and will develop an ophthalmology business unit helped by its recent acquisitions of Premacure and SARcode BioSciences. Projects being culled include development of Vyvanse in negative symptom schizophrenia and HGT4510, a candidate therapy for Duchenne muscular dystrophy.
Ornskov also singled out geographic expansion into Asia, particularly Japan, and Latin America as a key priority.
Analyst Savvas Neophytou at Panmure Gordon said the results were a “modest miss” and Shire has strong growth prospects, particularly in rare diseases, and low levels of risk. He has re-iterated a buy recommendation on the stock.