Shire results beat forecasts as it still tracks Baxalta

CEO Flemming Ornskov refused to be drawn on whether drugmaker will pitch new higher offer

 

Pharmaceutical firm Shire said it was still pursuing its attempt to buy US company Baxalta as it posted a 11 percent rise in third-quarter earnings per share on Friday.

Dublin-headquartered Shire went public with its proposal to buy Baxalta, recently spun out of Baxter, in August, after it failed to generate much excitement among Baxalta’s board for its plan to forge a global specialist in rare diseases.

Since then, a 24 per cent drop in Shire’s share price has made its all-share proposal much less appealing to Baxalta’s shareholders.

“We continue to believe the proposed acquisition of Baxalta represents a highly strategic combination, delivering an expected $20 billion in sales by 2020 and a world-leading rare diseases portfolio,” chief executive Flemming Ornskov said.

The company’s third quarter figures beat analyst estimates. A measure of profit that excludes some costs, labelled by the company as non-GAAP operating income, rose 1 percent to $725 million on a constant currency basis, the company said in a statement on Friday.

An average of 10 analysts‘ estimates was $692 million.

Sales climbed 4 percent to $1.66 billion. Revenue was boosted by higher prices and sales of Vyvanse, a drug for attention-deficit and hyperactivity disorder that was recently approved to also treat binge-eating disorder.

Buying Baxalta, a market leader in drugs to treat haemophilia, would add another $20 billion in sales by 2020, Shire reiterated Friday.

The US company has so far rebuffed the unsolicited $30 billion offer, made public in August, calling it a “low-ball valuation”.

Mr Ornskov declined to comment on whether he would sweeten the offer.

He also wouldn‘t address speculation that the drugmaker will make an offer for Radius Health, though he said the company has several acquisition projects in the pipeline.

Shire reiterated its forecast for full-year earnings per share to grow by a mid-to-high single digit percentage.

Shire faced a setback last week when US regulators asked for more clinical trial data before it can decide whether to approve lifitegrast, a potential blockbuster drug to treat dry-eye disease. The drugmaker plans to resubmit its application in the first quarter of next year, with additional data from a trial dubbed Opus-3, it said on Monday.

Lifitegrast is one of the medicines in development that Shire is counting on to meet a goal of boosting sales to $10 billion by 2020 from about $6 billion last year.

Shire is registered in Jersey, in the Channel Islands, and based for tax purposes in Ireland. Its primary stock listing is in London while Mr Ornskov and most other top executives are based in Massachusetts. – Bloomberg/Reuters