TOP NEWS: Shire Product Sales Rise, Warns 2018 Earnings Could Be Lower
LONDON (Alliance News) - Irish drugmaker Shire PLC said on Wednesday that its product sales and revenue rose ahead of expectations in 2017, though it warned earnings per American depositary share in 2018 could be lower due to higher costs.
Shares in Shire were down 0.6% at 3,162.50 pence, having dipped as low as 3,065.50p after the release of its results before rising as high as 3,325.00p, to then again retreat.
Product sales rose 33% to USD14.45 billion, with total revenue rising 33% to USD15.16 billion, benefiting from the 2016 purchase of the US's Baxalta Inc. Non-GAAP - US generally accepted accounting principles - net income rose 36% to USD4.6 million.
Shire was expected to post product sales of USD14.34 billion for 2017, with revenue of USD14.99 billion. Non-GAAP operating income was expected to come in at USD6.00 billion.
Growth in product sales in 2017 was primarily driven by the inclusion of a full-year of legacy Baxalta product sales of USD6.99 million, with strong sales from our immunoglobulin therapies and bio therapeutics.
Operating income on a non-GAAP basis rose 36% to USD6.00 billion from USD4.42 million in 2016.
Shire raised its total dividend by 15% to 34.88 cents for 2017 from 30.33 cents in 2016.
Diluted earnings per ADS increased to USD14.05 in 2017, from USD1.27 in 2016 due to a higher tax benefit and higher operating income. Non-GAAP diluted earnings per ADS rose USD15.15 from USD13.10 in 2016.
Shire said it expects to deliver mid-single digit product sales growth in 2018 after absorbing the anticipated impact of generics.
The mid-term outlook for growth is positive driven by the Immunology franchise, the drugmaker said, along with multiple near-term launches, and international markets. Shire said it is committed to achieving its projected revenue target of USD17 billion to USD18 billion in 2020.
Looking ahead, Shire said it expects non-GAAP diluted earnings per ADS growth to be lower than top line growth in 2018, mainly due to costs incurred from the start-up of its new US plasma manufacturing site, intensifying genericization, and lower royalties.
Product sales for 2018 are expected to total USD14.9 billion to USD15.3 billion, with royalites & other revenue coming in at between USD500 million to USD600 million.
Diluted earnings per ADS are expected at USD7.30 to USD7.90 on a GAAP basis in 2018, or bewteen USD14.90 to USD15.50 on a non-GAAP basis.
Shire said it is "well underway" in creating two divisions, one focused on rare diseases, the other on neuroscience. Alongside this, it is "already active" in optimising its portfolio within each division, and anticipated this could lead to opportunities for disposals.
By Lucy Heming; [email protected]
Copyright 2018 Alliance News Limited. All Rights Reserved.
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