Shire's 2007 guidance upgraded as revenue growth accelerates

UK-based Shire Pharmaceutical has posted its financial results for Q2 FY07. Product sales were up 34 per cent to reach USD 504m, while total revenues increased 31 per cent to USD 575m.

Shire has just launched Vyvanse (lisdexamfetamine), its next generation ADHD product, which the firm believes is best in class. Early results are promising with positive feedback from both physicians and patients. Shire has received two FDA approvable letters in the ADHD category for Intuniv, a non-stimulant treatment for ADHD, and SPD465, a longer-acting version of Adderall XR for the treatment of adult ADHD.

Shire's in-licensing of Juvista, a protein candidate for the prevention and reduction of scarring in connection with both therapeutic and cosmetic surgery, fits well within its model of focusing on the specialist physician. The treatment could become the first agent with such an indication and has the potential to create a substantial market, said the company.

2007 Financial Outlook
Shire has amended the previous guidance given as part of the Q1 2007 results, following the positive results in Q2 FY07. Revenue growth in 2007 has been upgraded to not less than 25 per cent, compared with previous guidance in the low 20 per cent range. This re-evaluation assumes prescription growth in the ADHD market of five to seven per cent.

Earnings for 2007 will be impacted by the costs associated with the continued development, launch and roll-out of new products. The company expect these costs to include products and projects arising from the recent acquisition of New River and Juvista.

R&D spend for 2007 will be in the range of USD 340m to USD 360m and is unchanged from guidance issued in Q1 FY07.

SG&A costs will be in the range of USD 930m to USD 960m and is also unchanged. The in-process R&D charge related to New River was USD 1.9bn. The level of quarterly SG&A expenditure is expected to increase over the Q2 2007 spend, as Vyvanse is launched in the US and Mezavant is launched in the EU.

Integration costs for the New River acquisition, which are estimated to be approximately USD 10m, include USD 9.2m incurred to date, as well as bridging finance costs of USD 7.9m.

Shire's CEO Matthew Emmens, said: "We continue to execute our strategy effectively and this is reflected in the delivery of an excellent second quarter. Revenues were led by Adderall XR and Daytrana in a growing ADHD market. Elaprase also made a significant contribution to overall growth as did our other new products Fosrenol and Lialda."