Shire first-quarter revenue rises, reiterates 2017 guidance

Shire, which completed its $32bn merger with Baxalta last June, reported a 109% surge in revenues for the first quarter as it said it was on course to achieve its full-year guidance.

Total revenues rose to $3.6bn, with product sales up 110% to $3.4bn and sales excluding legacy Baxalta up 11% to $1.8bn.

The company attributed the jump in sales to growth in its genetic diseases and internal medicine franchises, where sales were up 14% and 9%, respectively. Sales in the ophthalmology franchise also made a solid contribution.

Operating income was up 82% to $1.5bn and earnings per ADS were up 14% to $3.63.

Royalties and other revenues in the period increased 95% to $160m as the first quarter benefited from additional revenue acquired with haemophilia specialist Baxalta, primarily related to contract manufacturing activities.

Shire said the Baxalta integration was progressing ahead of schedule and is on track to deliver at least $700m in synergies by year three.

The company reiterated its full-year 2017 guidance for product sales of between $14.5bn and $14.8bn and diluted earnings per share of $14.60 to $15.20.

Chief executive officer Flemming Ornskov said: "In the first quarter we delivered strong top-line growth with quarterly product sales of $3.4bn. 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."

Hargreaves Lansdown analyst Nicholas Hyett said: "The addition of Baxalta continues to make for blockbuster headline growth figures, but the underlying numbers are pretty encouraging at Shire too. Sales growth is steady and broad based, helping to reduce the group’s reliance on blockbuster ADHD treatment Vyvanse.

"Of course you’d expect something like this, after all Shire is in its goldilocks phase at the moment. No major drugs have come off patent, or are scheduled to do so in the imminent future. A young portfolio means it should have years of earnings growth ahead."

At 1340 BST, the shares were up 2.8% to 4,663.50p.