Shire sees strong product sales in first quarter

Pharmaceuticals group Shire has reiterated its expectation of good earnings growth in 2012 after a solid first-quarter performance, with total revenues rising by over a fifth on last year.

Total revenues in the three months to March 31st jumped by 21% to $1,172m, from $972m in the same period of 2011. Consensus forecasts were for group revenue of $1,148m. Product sales, which account for the majority of group revenues, increased by 24%.

Shire said that growth was driven particularly by sales of VYVANSE (up 29% to $260m), REPLAGAL (up 28% to $134m), ELAPRASE (up 21% to $126m), VPRIV (up 22% to $72m), FIRAZYR (up 272% to $20m) and INTUNIV (up 63% to $69m). First-quarter revenues also include a $49m contribution from DERMAGRAFT (Q1 2011: $nil) which was acquired with Advanced BioHealing in the second quarter of 2011.

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"Shire continues to perform strongly with first quarter results in line with our expectations. [...] Our focus on demonstrating value to the healthcare system through meeting the needs of our patients is continuing to deliver," said Chief Executive Officer Angus Russell.

However, adjusted operating profits came in at $362m, up 18% year-on-year but slightly under the consensus forecast of $366m. Shire said that operating expenses increased at a faster rate than total revenues.

"Having made a strong start to the year, we reiterate our confidence in good earnings growth for 2012, while investing in our business to support sustained future growth."

The group expects full-year product sales growth to moderate to the mid-teens range. "Combining this with lower royalties and other revenues, which are expected to be 15% to 25% lower year on year, we are forecasting revenue growth in the low-teens range."

Shares were trading 1.05% higher at 2,023p by 13:15 in London.

BC