RBC upgrades Shire to 'outperform' ahead of results

RBC said that following the recent pullback, the share price reflects attractive value and future competitive threats in the haemophilia market.

“We have held for some time that Shire is a high quality pharmaceutical/biotech company with a strong management team. Our key concern keeping us on the sidelines was valuation plus, more recently, gaining a deeper understanding of Baxalta’s important haemophilia business given the potential for heightened competition over the next several years,” the Canadian bank said.

However, it has now reviewed the competitive threat facing the haemophilia portfolio and said the current share price more than accounts for the future competitive environment.

RBC said the addition of Baxalta’s haematology, immunology and oncology franchises further diversifies Shire’s existing offerings.

It argued the combined company has a strong, diverse pipeline with over 60 programmes in development – over 50 of these target rare diseases – and management expects over 30 launches from the combined pipeline by 2020.

RBC also highlighted Shire’s attractive rare disease portfolio, which contains a number of products with no or limited competition.

At 1233 GMT, Shire shares were up 1.9% to 3,547p.