Shire delivers strong Q1 2017 revenue growth while advancing late-stage pipeline
Shire delivers strong Q1 2017 revenue growth while advancing late-stage pipeline
Commercial execution, efficiency improvements, and debt pay-down remain top priorities
May 2, 2017 – Shire plc (Shire) (LSE: SHP, NASDAQ: SHPG) announces unaudited results for the three months ended March 31, 2017.
Flemming Ornskov, M.D., M.P.H., Shire Chief Executive Officer, commented:
"In the first quarter we delivered strong top-line growth with quarterly product sales of $3.4 billion. I am especially pleased to see that our sales growth came from across our broad portfolio, with genetic diseases growing 14%, our recently launched XIIDRA product achieving a 22% market share and the Baxalta business growing at 8% on a pro forma basis. We also improved our operational efficiency, and are ahead of plan on integrating Baxalta.
"Our priorities for the rest of 2017 remain unchanged: launching new products while driving commercial excellence, generating operational efficiencies, and advancing our pipeline of novel therapies. Additionally, we continue to prioritize paying down debt, and we are on track to achieve our full-year financial guidance.
“Looking ahead, I see tremendous opportunity for further growth as we continue to build on our position as the global leader in treating patients with rare diseases.”
|Financial Highlights||Q1 2017(1)||Growth(1)||Non GAAP CER(1)(2)|
|Product sales||$3,412 million||+110%||+110%|
|Product sales excluding legacy Baxalta||$1,807 million||+11%||+11%|
|Total revenues||$3,572 million||+109%||+110%|
|Operating income from continuing operations||$497 million||(9%)|
|Non GAAP operating income(2)||$1,454 million||+82%||+82%|
|Net income margin(3)(4)||10%||(15ppc)|
|Non GAAP EBITDA margin(2)(4)||44%||(5ppc)|
|Net income||$375 million||(11%)|
|Non GAAP net income(2)||$1,102 million||+74%|
|Diluted earnings per ADS(5)||$1.23||(42%)|
|Non GAAP diluted earnings per ADS(2)(5)||$3.63||+14%||+14%|
|Net cash provided by operating activities||$459 million||+18%|
|Non GAAP free cash flow (2)||$247 million||(27%)|
(1) Results include Baxalta Inc. (Baxalta) (acquired on June 3, 2016) and Dyax Corp. (Dyax) (acquired on January 22, 2016), unless otherwise noted. Percentages compare to equivalent 2016 period.
(2) The Non GAAP financial measures included within this release are explained on pages 25 – 26, and are reconciled to the most directly comparable financial measures prepared in accordance with US GAAP on pages 19 – 21.
(3) US GAAP net income as a percentage of total revenues.
(4) Percentage point change (ppc).
(5) Diluted weighted average number of ordinary shares 911.8 million.
- Delivered product sales growth of 110% with strong legacy Shire sales and the inclusion of legacy Baxalta sales.
- Achieved combined pro forma sales growth of 9%; legacy Shire sales growth of 11% and legacy Baxalta pro forma sales growth of 8%.
- Generated Non GAAP earnings per ADS of $3.63, reflecting strong business fundamentals and operational discipline.
- Ahead of schedule with Baxalta integration and on-track to achieve at least $700 million in synergies by year 3.
- Debt pay-down continued during the quarter and we remain on-track to achieve our year end debt target.
Product and Pipeline Highlights
- Continued to drive expansion of the U.S. dry eye disease market, with XIIDRA increasing its market share to 22% as of March 2017.
- Increased CINRYZE sales by 38% to $226 million, reflecting higher patient demand and improvements in available supply.
- Increasing demand for our Immunology products, with pro forma sales growth for immunoglobulin therapies and bio therapeutics of 10% and 19% respectively.
- Expect U.S. Food and Drug Administration (FDA) decision for SHP465 in Attention Deficit Hyperactivity Disorder (ADHD) on or before June 20, 2017.
- Completed enrollment in SHP643 open-label extension study; topline pivotal study results expected in Q2 2017.
- Initiated Phase 3 trials for SHP640 and SHP620 in patients with bacterial and adenoviral conjunctivitis and cytomegalovirus infection, respectively.
For further information please contact:
|Ian Karp||[email protected]||+1 781 482 9018|
|Robert Coates||[email protected]||+44 1256 894874|
|Lisa Adler||[email protected]||+1 617 588 8607|
|Debbi Ford||[email protected]||+1 617 949 9083|
Dial in details for the live conference call for investors at 14:00 GMT / 9:00 EDT on May 2, 2017:
|UK dial in:||0808 237 0030 or 020 3139 4830|
|US dial in:||1 866 928 7517 or 1 718 873 9077|
|International Access Numbers:||Click here|
|Live Webcast:||Click here|
NOTES TO EDITORS
Stephen Williams, Deputy Company Secretary is responsible for arranging the release of this announcement.
This announcement contains inside information.
Shire is the leading global biotechnology company focused on serving people with rare diseases. We strive to develop best-in-class products, many of which are available in more than 100 countries, across core therapeutic areas including Hematology, Immunology, Neuroscience, Ophthalmics, Lysosomal Storage Disorders, Gastrointestinal / Internal Medicine / Endocrine and Hereditary Angioedema; and a growing franchise in Oncology.
Our employees come to work every day with a shared mission: to develop and deliver breakthrough therapies for the hundreds of millions of people in the world affected by rare diseases and other high-need conditions, and who lack effective therapies to live their lives to the fullest.
THE “SAFE HARBOR” STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Statements included herein that are not historical facts, including without limitation statements concerning future strategy, plans, objectives, expectations and intentions, the anticipated timing of clinical trials and approvals for, and the commercial potential of, inline or pipeline products, are forward-looking statements. Such 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, the following:
- Shire’s products may not be a commercial success;
- increased pricing pressures and limits on patient access as a result of governmental regulations and market developments may affect Shire’s 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 contract manufacturers 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 manufacture of Shire’s products is subject to extensive oversight by various regulatory agencies. Regulatory approvals or interventions associated with changes to manufacturing sites, ingredients or manufacturing processes could lead to, among other things, significant delays, an increase in operating costs, lost product sales, an interruption of research activities or the delay of new product launches;
- certain of Shire’s therapies involve lengthy and complex processes, which may prevent Shire from timely responding to market forces and effectively managing its production capacity;
- Shire has a portfolio of products in various stages of research and development. The successful development of these products is highly uncertain and requires significant expenditures and time, and there is no guarantee that these products will receive regulatory approval;
- 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 affect Shire’s revenues, financial conditions or results of operations;
- Shire’s products and product candidates face substantial competition in the product markets in which it operates, including competition from generics;
- adverse outcomes in legal matters, tax audits 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 the Company’s revenues, financial condition or results of operations;
- inability to successfully compete for highly qualified personnel from other companies and organizations;
- failure to achieve the strategic objectives, including expected operating efficiencies, cost savings, revenue enhancements, synergies or other benefits at the time anticipated or at all with respect to Shire’s acquisitions, including NPS Pharmaceuticals Inc., Dyax Corp. or Baxalta Incorporated may adversely affect Shire’s financial condition and results of operations;
- Shire’s growth strategy depends in part upon its ability to expand its product portfolio through external collaborations, which, if unsuccessful, may adversely affect the development and sale of its products;
- a slowdown of global economic growth, or economic instability of countries in which Shire does business, as well as changes in foreign currency exchange rates and interest rates, that adversely impact the availability and cost of credit and customer purchasing and payment patterns, including the collectability of customer accounts receivable;
- failure of a marketed product to work effectively or if such a product is the cause of adverse side effects could result in damage to Shire’s reputation, the withdrawal of the product and legal action against Shire;
- 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 significant legal costs and the payment of substantial compensation or fines;
- Shire is dependent on information technology and its systems and infrastructure face certain risks, including from service disruptions, the loss of sensitive or confidential information, cyber-attacks and other security breaches or data leakages that could have a material adverse effect on Shire’s revenues, financial condition or results of operations;
- Shire incurred substantial additional indebtedness to finance the Baxalta acquisition, which may decrease its business flexibility and increase borrowing costs; and
a further list and description of risks, uncertainties and other matters can be found in Shire’s most recent Annual Report on Form 10-K and in Shire’s subsequent Quarterly Reports on Form 10-Q, in each case including those risks outlined in “ITEM 1A: Risk Factors”, and in subsequent reports on Form 8-K and other Securities and Exchange Commission filings, all of which are available on Shire’s website.
All forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by this cautionary statement. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. Except to the extent otherwise required by applicable law, we do not undertake any obligation to update or revise forward-looking statements, whether as a result of new information, future events or otherwise.