Shire jumps as Vyvanse drug helps it to beat earnings forecast
Sales of Vyvanse, a treatment for attention deficit hyperactivity disorder (ADHD), rose 22 percent, partly reflecting the drug’s recent approval as a treatment for binge eating disorder (BED).
“Shire is off to a strong start in 2016,” said Chief Executive Flemming Ornskov, who has faced investor criticisms over his pay.
Shares in the company rose 4 percent and Trinity Delta analyst Mick Cooper said Shire had delivered another impressive quarter of growth and high margins, placing it in a good position for the transformational acquisition of Baxalta.
Shire said its combination with Baxalta was on track, with shareholder votes set for May 27 and the deal expected to close in early June.
Baxalta, which makes drugs for rare blood conditions, cancers and immune system disorders, is Shire’s biggest acquisition to date and will make it a global leader in rare diseases, with annual sales of more than $20 billion by 2020.
Ornskov said that planning for the integration of Baxalta was proceeding more rapidly than initially expected but declined to say if this would enable Shire to exceed forecast cost savings of $500 million a year by the third year of the merger. Many analysts view that figure as conservative.
Forecasts would be revised after the Baxalta deal is formally concluded, Ornskov said.
First-quarter non-GAAP earnings per share of $3.19 on revenue up 17 percent to $1.71 billion compared with analysts’ consensus forecasts of $3.05 billion and $1.69 billion respectively.
Shire faced a protest over executive pay at its annual meeting on Thursday, with a 49 percent vote against the company’s director remuneration report, which included a 25 percent pay increase granted to Ornskov last year.
Asked about the investor discontent, Ornskov said: “I am focused on driving the company. I think that is clearly shown in these results.”
(Additional reporting by Kate Holton; Editing by David Goodman)
Source: Reuters Health