Shire misses second quarter growth forecasts but boosts EPS guidance
Second-quarter revenues and earnings from Shire fell short of expectations, but the drug group upped its earnings growth guidance for the full year.
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Total revenues for the three months to June 30 of $1.56bn were up 4% against the same period last year, or 9% at constant exchange rates, but short of the consensus $1.59bn analysts estimate.
Earnings per share (EPS) slipped 2% to $2.63, which was a 3% if currency moves were ignored, but this was again shy of the consensus of $2.80.
However, chief executive Flemming Ornskov hailed a "solid performance, achieved amid continued investment in future innovation and growth drivers" and lifted guidance for diluted EPS growth to "mid-to-high single digit percent range" for the full year, up from the previous mid-single digit target.
Within the product portfolio, sales of Intuniv, which is used to treat attention deficit hyperactivity disorder (ADHD) in children, were down 91% in the quarter due to generic competition.
But one of the main forces driving group sales was Vyvanse for both adult attention deficit hyperactivity disorder (ADHD) and the new adult indication for binge eating, up 18% to $425m.
Lialda/Mezavant, for ulcerative colitis and other similar conditions, was up 10% to $158m and Firazyr for acute hereditary angioedema was up 17% to $104m.
Ornskov said the early performance of the products gained from the $5.2bn deal for US biotech NPS underscored the company's ability to acquire and integrate assets and deliver value.
Read more: Shire makes bid for Swiss firm Actelion
Given the first half performance and confidence in the underlying business, he added that management were confident of exceeding his "10x20" target of $6.5bn of product sales in 2016.
Shire’s first quarter sales and revenues had been encouraging and, helped by rumours of further deals, including a potential takeover of Swiss peer Actelion in June, saw 16 analysts out of 23 covering the stock in favour of buying the shares.
The first impression of analysts at RBC Capital Markets was that revenues and EPS were below expectations due to higher selling, general and administrative expenses (SGA) and that the "Intuniv ramp-down appears to be more aggressive than we had forecasted".
"We expect the focus to now shift to the outlook for newly launched products and management's confidence in an earlier than anticipated Lifitegrast approval."
At 12:30 shares in Shire, having risen in anticipation of the company's afternoon results release, shot back down 1.7% to 5,370p.