Determined Shire ratchets up 2014 forecast, again
- Dublin-based Shire is outperforming Q3 earnings expectations and looks determined to make good on its 2020 target: doubling its sales to $10 billion. The company has updated its sales forecast, with expected growth of more than 35% for 2014.
- Recently, the $55 billion Shire-AbbVie tax-inversion deal was called off after AbbVie's board decided new Obama administration Treasury rules aimed at curbing such deals changed the calculus on the merger.
- Shire's stock dropped 21% after AbbVie pulled out of the inversion deal, but rose 4% on the strong new earnings forecast. The company is now valued at $38.5 billion. Q3 profits were $2.93 adjusted earnings per share, compared to expectations of $2.49 per share.
Now that the AbbVie takeover is no longer a go, Shire can move ahead with its own goals. First, Shire will receive $1.64 billion from AbbVie as a "break-up fee" for reneging on the deal. It will also continue to pursue continued revenue growth, with a focus on acquisitions in the rare disease and ophthalmology arenas—areas where Shire already has a presence.
Shire's Q3 earnings were up to $717 million (excluding special items), a vast improvement over analyst estimates of $606.8 million. Vyvanse (lisdexamfetamine), for the treatment of attention deficit disorder, is its biggest-selling drug with $355 million in sales for the quarter—and the possibility of an expanded indication for the treatment of binge eating disorder on the horizon.