Shire third-quarter earnings up 20%, reiterates FY guidance
Shire posted a jump in third-quarter earnings on Friday thanks in part to its immunology franchise, as it reiterated its full-year guidance.
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Non-GAAP net income rose 20% in the period to $1.16bn and product sales grew 7% to $3.5bn, mainly on the back of rapid growth in the group's immunology franchise, which saw sales increase 32%. Non-GAAP diluted earnings per ADS came in at $3.81, surpassing consensus expectations of $3.69 and RBC Capital Markets' forecast of $3.72.
The genetic diseases segment was hit by lower sales of the Cinryze drug due to a product shortage resulting from a manufacturing interruption at a third-party manufacturer. However, Shire said the issue has now been addressed and production of the drug has resumed. In order to make supply more reliable, Shire said it plans to start in-house production of Cinryze by the first quarter of next year, subject to FDA approval, "as sustainable and unconstrained supply" of the drug is "a top priority".
Sales in the neuroscience franchise grew 12%, while the hematology segment saw sales increase 4%. Meanwhile, total revenues were up 7% to $3.7bn and Shire generated $1.1bn of operating cash flow and said it remains on track to achieve its year-end debt target.
Chief executive officer Flemming Ornskov said: "We are reiterating our 2017 full year guidance, and I look forward to updating you on the neuroscience strategic review by year end. I continue to be highly confident in the strength and durability of our business."
RBC Capital Markets noted consensus expectations of $3.75bn on revenues and said that had it not been for the impact of supply constraints of Cinryze, revenue would have been "well in excess of expectations".
At 1315 BST, the shares were down 2.2% to 3,445.50p.