Shire's Clear And Focused Strategy Delivers Record Quarterly Revenues. Non GAAP Diluted Earnings Per ADS Up 60%

October 24, 2014

 

Increases Non GAAP diluted earnings per ADS growth guidance to the high thirty percent range for the full year (2014).

Shire (LSE: SHP, NASDAQ: SHPG) announces unaudited results for the three months to September 30, 2014.

Financial Highlights Q3 2014 Growth(1)
Product sales $1,552 million +33%(2)
Total revenues $1,597 million +32%
     
Non GAAP operating income $717 million +60%
US GAAP operating income from continuing operations $572 million +49%
     
Non GAAP EBITDA margin
(excluding royalties & other revenues)(3)
46% n/a
US GAAP net income margin(4) 30% n/a
     
Non GAAP diluted earnings per ADS $2.93 +60%
US GAAP diluted earnings per ADS $2.43 +66%
     
Non GAAP cash generation $612 million +27%
Non GAAP free cash flow $575 million +48%
US GAAP net cash provided by operating activities $593 million +37%

 

(1) Percentages compare to equivalent 2013 period. The 2013 comparatives in this release have been recast to exclude the DERMAGRAFT® business from continuing operations following its divestment on January 17, 2014.

(2) Product sales from continuing operations, including ViroPharma Incorporated (“ViroPharma”) acquired January 24, 2014, and excluding the DERMAGRAFT business. Product sales excluding products acquired with ViroPharma were up 19% in Q3 2014.

(3) Non GAAP earnings before interest, tax, depreciation and amortization (“EBITDA”) as a percentage of product sales, excluding royalties and other revenues.

(4) US GAAP net income as a percentage of total revenues.

The Non GAAP financial measures included within this release are explained on page 27, and are reconciled to the most directly comparable financial measures prepared in accordance with US GAAP on pages 20 - 25 of the full release.

Susan Kilsby, Shire's Chairman, commented:

“Shire is well-positioned for future growth as we implement our plan to double product sales to $10 billion by 2020. I am confident that Shire, as an independent company, will deliver long-term value to our shareholders and improved outcomes for patients. On behalf of the Board of Directors, I would like to thank the Shire management team and employees for the achievement of outstanding financial results during the third quarter.”

Flemming Ornskov, M.D., Shire’s Chief Executive Officer, commented:

“Our third quarter results demonstrate our exceptional track record of delivering value and growth.  We continue to implement our clear and focused strategy, as we:

  • Generated record quarterly product sales of $1,552 million, growing at 33%
  • Grew Non GAAP diluted earnings per ADS by 60%, and
  • Delivered Non GAAP cash generation of over $600 million.

These results are a testament to our ability to drive top line growth and our continued emphasis on operational discipline.

We have seen strong sales performance across our portfolio with all of our top ten products delivering double digit growth in the quarter. Rare Diseases, our largest business unit, grew by 66%, aided by our acquisition of ViroPharma. In our Hereditary Angioedema portfolio, CINRYZE performed strongly with quarterly sales of $145 million and FIRAZYR was up 57%.

Our Neuroscience and Gastrointestinal business units also contributed to the record quarter with VYVANSE sales up 19% and LIALDA up 24%.

We continue to build our international presence and our expansion into the Japanese market with the approval of VPRIV and AGRYLIN.

Our early and late stage pipeline continues to be strengthened, both internally, and through business development providing us with new investments in Ophthalmology (BIKAM) and Rare Diseases (ArmaGen). The US Food and Drug Administration accepted with priority review our supplemental new drug application for VYVANSE as a treatment for adults with binge eating disorder and we expect to learn about the potential expanded indication in February 2015.

Our strong momentum and performance this quarter is evidence of our ability to deliver growth, efficiency and innovation through our commitment to addressing significant unmet need in Rare Diseases and high-value specialty conditions.  As a result, I am pleased to once again increase our guidance for 2014.  We now expect to deliver Non GAAP diluted earnings per ADS growth in the high thirty percent range in 2014.”

 

For further information please contact:

Investor Relations
Jeff Poulton
jpoulton@shire.com
+1 781 482 0945

Sarah Elton-Farr
seltonfarr@shire.com
+44 1256 894 157

Media
Stephanie Fagan
sfagan@shire.com
+1 781 482 0460

Gwen Fisher
gfisher@shire.com
+1 484 595 9836

 

Dial in details for the live conference call for investors at 14:00 BST / 09:00 EDT on October 24, 2014:

UK dial in: 0808 237 0030 or 0203 139 4830
US dial in: 1 866 928 7517 or 1 718 873 9077
International Access Numbers: Click here

Password/Conf ID: 40489933#
Live Webcast: Click here

The quarterly earnings presentation will be available today at 13:00 BST / 08:00 EDT on:

- Shire.com
- Shire's IR Briefcase in the iTunes Store

 

NOTES TO EDITORS

Shire enables people with life-altering conditions to lead better lives.

Our strategy is to focus on developing and marketing innovative specialty medicines to meet significant unmet patient needs.

We focus on providing treatments in Neuroscience, Rare Diseases, Gastrointestinal, and Internal Medicine and we are developing treatments for symptomatic conditions treated by specialist physicians in other targeted therapeutic areas, such as Ophthalmology.

www.shire.com

 

FORWARD - LOOKING STATEMENTS - "SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Statements included in this announcement that are not historical facts are forward-looking statements. Forward-looking statements involve a number of risks and uncertainties and are subject to change at any time. In the event such risks or uncertainties materialize, Shire’s results could be materially adversely affected. The risks and uncertainties include, but are not limited to, that:

  • Shire’s products may not be a commercial success;
  • revenues from ADDERALL XR are subject to generic erosion and revenues from INTUNIV will become subject to generic competition starting in December 2014;
  • the failure to obtain and maintain reimbursement, or an adequate level of reimbursement, by third-party payors in a timely manner for Shire's products may impact future revenues, financial condition and results of operations;
  • Shire conducts its own manufacturing operations for certain of its products and is reliant on third party contractors to manufacture other products and to provide goods and services. Some of Shire’s products or ingredients are only available from a single approved source for manufacture. Any disruption to the supply chain for any of Shire’s products may result in Shire being unable to continue marketing or developing a product or may result in Shire being unable to do so on a commercially viable basis for some period of time.
  • the development, approval and manufacturing of Shire’s products is subject to extensive oversight by various regulatory agencies. Submission of an application for regulatory approval of any of our product candidates, such as our planned submission of a New Drug Application to the FDA for lifitegrast as a treatment for the signs and symptoms of dry eye disease in adults, may be delayed for any number of reasons and, once submitted, may be subjected to lengthy review and ultimately rejected. Moreover, regulatory approvals or interventions associated with changes to manufacturing sites, ingredients or manufacturing processes could lead to significant delays, increase in operating costs, lost product sales, an interruption of research activities or the delay of new product launches;
  • the actions of certain customers could affect Shire's ability to sell or market products profitably. Fluctuations in buying or distribution patterns by such customers can adversely impact Shire’s revenues, financial conditions or results of operations;
  • investigations or enforcement action by regulatory authorities or law enforcement agencies relating to Shire’s activities in the highly regulated markets in which it operates may result in the distraction of senior management, significant legal costs and the payment of substantial compensation or fines;
  • adverse outcomes in legal matters and other disputes, including Shire’s ability to enforce and defend patents and other intellectual property rights required for its business, could have a material adverse effect on Shire’s revenues, financial condition or results of operations;
  • Shire faces intense competition for highly qualified personnel from other companies, academic institutions, government entities and other organizations. Shire is undergoing a corporate reorganization and the consequent uncertainty could adversely impact Shire’s ability to attract and/or retain the highly skilled personnel needed for Shire to meet its strategic objectives;
  • failure to achieve Shire’s strategic objectives with respect to the acquisition of ViroPharma Incorporated may adversely affect Shire’s financial condition and results of operations;

and other risks and uncertainties detailed from time to time in Shire’s filings with the US Securities and Exchange Commission, including its most recent Annual Report on Form 10-K

Click here for the PDF version of this press release.