Hopping on restructuring bandwagon, Shire looks to spin off neuroscience unit
- Announced in the company's second quarter earnings call, Shire is planning to "assess strategic options for its neuroscience franchise," with the distinct possibility of listing as an independent company. There will be further news as the review completes, likely by the end of 2017.
- Shire's second quarter 2017 product sales are up 7% across the portfolio on a combined pro forma basis, with product sales of $3.6 billion. This generated an operating cash flow of $1.2 billion. The company expects more than 80 geographic launches this year.
- The integration cost synergies for the first year of Baxalta were more than $400 million, over $100 million more than anticipated. The company remains confident that it can hit the target of at least $700 million by the end of the third year.
Although its focus is on rare disease, Shire has built up a portfolio of drugs in neuroscience through acquisitions. The franchise includes approved ADHD products Adderall, Intuniv (guanfacine), Vyvanse (lisdexamfetamine dimesylate) and Mydayis. The latter was approved by the Food and Drug Administration on June 20 for use in teenagers and adults and has already contributed $16 million in sales pre-launch. Mydayis, a mixture of amphetamine salts, is expected to hit the market this September.
Earlier in development, the neuroscience portfolio includes SHP607, which is on the cusp of a Phase 3 trial to reduce neonatal complications in premature babies. The company now plans to take a serious look at these, and decide where the future lies.
"We are the undisputed leader in rare diseases. We also have created a sustainable franchise in neuroscience. Both businesses are thriving and have potential for growth, and have reached the point that they can stand alone," said CEO Flemming Ornskov. "We now plan to carry out a formal evaluation of our neuroscience products, and look at the strategic options. This may include independence but we haven't made any specific decisions yet."
In its rare diseases franchise, one of the key milestones of the second quarter, according to Ornskov, was the positive Phase 3 data for lanadelumab (SHP643), its drug for the rare disease hereditary angioedema (HAE). Lanadelumab, acquired when Shire bought out Dyax, cut HAE attacks by 87% compared with placebo in a Phase 3 trial. Submission for approval is planned for late 2017 or early 2018.
"Lanadelumab has a fundamentally different mechanism of action to other HAE therapeutics, and also has a long half-life. This allowed us to dose it as a small subcutaneous injection every two to four weeks, which makes it more convenient," said Ornskov.
Shire was quiet on its oncology portfolio, which was acquired with Baxalta in June 2016. Sales, including Oncaspar (pegaspargase) and Onivyde (irinotecan liposome injection), were $62.5 million for the quarter, up 18%. Shire has a collaboration with Danish company Symphogen, inherited from Baxalta, for six early-stage immunooncology drugs.
"We see some further opportunities for formulations of Oncaspar, and Onivyde, which was approved in Europe in October 2016, will be launching on a few European markets. The oncology market is attractive but very competitive, and we will focus on what we have," said Ornskov.
- Shire Statement
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