Shares in Shire Pharmaceuticals leapt on Wednesday after sales and non-GAAP operating income in the second quarter both soared after the company's ADHD drugs, Vyvanse and Intuniv, managed to increase their market share during the period.
Product sales alone rose to $1,148m year-on-year (y/y), while total revenue in the period climbed 14% y/y to $1,208m during the three month period.
However, it has by no means been plain sailing for the company's ADHD drugs, which suffered after its Adderall XR product met with some serious earlier-than-expected competition for the medication, when, back in June, US regulators gave their approval for Actavis's own lower-priced version of the drug.
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During the half year period the firm also experienced lower product sales and reduced royalty rates, which promoted the firm to lower its forecasts for the year.
Non-GAAP (generally accepted accounting principles) operationg income rose 23% to $420m, while US GAAP operating income increased by 7.0% to $302m compared to the same period in 2011.
Non-GAAP cash generated was up 18% y/y to $520m, while non-GAAP free cash flow soared 84% to $433m compared to the same quarter the previous year.
US GAAP net cash provided by operating activities leapt 64% to $466m y/y.
Angus Russell, Chief Executive Officer, said: "The ADHD market in the US is maintaining healthy growth; our lead products VYVANSE and INTUNIV both increased share and we're advancing our plans for the continued international rollout of both these products. Although of decreasing importance in our ADHD portfolio, we believe that branded ADDERALL XR will remain competitive in the US marketplace despite the approval of a new generic product.
"For the full year we now expect product sales growth to be in the low teens. This reflects the fact that foreign exchange movements are impacting the
reported growth of some of our products, but also our expectation that ADDERALL XR will remain competitive in the US market following the approval of a
generic competitor.
"Full year royalties and other revenues are now expected to be 25% to 35% lower y/y, a change from previous guidance as a result of lower royalties from Impax Laboratories. Taken together, we expect that total revenues will still show double digit growth in 2012. We still anticipate marginal dilution of Non GAAP gross margins in the full year."
Year-on-year, quarterly income increased from $205.5m to $237.8m, while half year income rose from $416.8m to $476.2m.
The company has opted to pay a dividend of 2.73 cents per share compared to 2.48c at the same date a year ago.
The share price rose 7.1% to 1,972p by 15:12, for the largest gain on the top share index.
NR
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