LONDON (ShareCast) - Losing the sole right to market a drug is always painful for pharmaceutical companies, but for Shire (LSE: GB00B0KQX869.L - news)
, which saw sales of one of its hyperactivity treatments slump after losing exclusivity, the pill was sweetened by soaring sales of another.
Shire saw revenues slump by 15% from the same period a year ago to $603m in the third quarter as Adderall sales tumbled by 74% to $70.9m. Earnings fell to $134m or $0.49 a share. Sales were hit by the launch of Israeli firm Teva's generic version of the ADHD (Attention Deficit and Hyperactivity Disorder) drug in April.
But the strong performance of drugs that face no such issues in the near future proved a strong corrective to this unwelcome development.
Sales of Vyvanse, also used to treat ADHD, jumped by 134% to $129m. Vyvanse is covered by patents that remain in effect until 2023. Shire has agreed a deal with its larger peer GlaxoSmithKline (LSE: GSK.L - news) to market Vyvanse in the US and chief executive Angus Russell said that, while the partnership won't produce a massive surge in sales, 'I believe over time we will see upside benefits from that.'
Shire, which also said that sales of its Lialda, used to treat bowel disease, saw sales jump by 62% to $65.4m, aspires to deliver sales growth in the mid-teen percentage range up to 2015, a mouth-watering proposition for investors.
Shire also has new products in the pipeline, a requirement for any drugs company that wants to maintain sales, let alone one with Shire's growth ambitions.
It said today that it has already started supplying its Gaucher disease treatment veraglucerase alfa to patients in the US and Europe, having rushed the drug to the market following the withdrawal by regulators of Cerezyme, a competing treatment made by Genzyme (NASDAQ: GENZ - news) . The firm is busily making plans for a new factory in the US which it will use to ramp up production of the drug.
Shares in Shire rose on the results statement and accompanying comments, meaning that they are even more expensive than earlier today when the price was 14.7 times expected earnings for 2010. This is a much less generous ratio than Shire's larger peers GlaxoSmithKline and AstraZeneca (LSE: AZN.L - news) , but these two firms are already market leaders, a position Shire aspires to.
If it reaches its sales targets for the next five years, it will have taken huge strides in that direction.
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