Shares in Shire fluctuated after the Irish drugmaker said that sales and revenue were ahead of expectation in 2017, but higher costs were likely to impact on this year’s earnings.
The company, known for its rare disease and hyperactivity drugs, reported that product sales rose by 33% last year to $14.45bn, with total revenue also 33% higher at $15.16bn, helped by the group’s 2016 acquisition of US company Baxalta. Non-GAAP – US generally accepted accounting principles – net income rose 36% to $4.6bn.
Earnings were boosted by strong sales of immunoglobulin therapies and bio therapeutics. Shire raised its total dividend by 15% to 34.88 cents for 2017 from 30.33 cents in 2016.
Product sales for 2018 are expected to come in at $14.9bn to $15.3bn, with royalties and other revenue generating $500m to $600m.
Shire said that it expects to deliver mid-single digit product sales growth in 2018 after absorbing the anticipated impact of lower-priced generic competitors to its products.
Chief executive Flemming Ornskov added that in addition to generics, earnings growth would be held back by costs incurred from the start-up of a new US plasma manufacturing site and lower royalties.
The company said that the mid-term outlook for growth is positive driven by the Immunology franchise, along with multiple near-term launches, and international markets. Shire also said it is committed to achieving its revised projected revenue target of $17bn to $18bn in 2020.
Last month Shire told investors that it was reducing its original target of $20bn by the end of the decade and would split into two, following the entry into the market of a rival to its ulcerative colitis drug Lialda and increased competition in its haemophilia franchise. The company said today that the creation of separate divisions, one focused on rare diseases, the other on neuroscience, were “well underway”.
In afternoon trade Shire shares were down 1.7%, 55 pence lower at 3,126p.