Shire earnings miss on higher market costs
Shire Plc reported second-quarter earnings that missed analysts' estimates as higher marketing costs for new products added to generic competition for a drug that treats attention-deficit and hyperactivity disorder. The shares fell as much as 3.1pc.
Operating income on a non-GAAP basis fell 3pc to $614m, the Dublin-based company said in a statement yesterday. The average analyst estimate was $670m. The strength of the US dollar also reduced sales growth by 5 percentage points, Shire said.
The drugmaker's product revenue was "broadly flat" as five generic versions of Intuniv for ADHD entered the market on June 1, chief financial officer Jeff Poulton said.
Shire also increased marketing expenditure for binge-eating disorder drug Vyvanse as well as for Natpara and Gattex, which the company gained from the February purchase of NPS Pharmaceuticals.
"You only get one chance to launch products, so you have to make significant investments at the time of launch," chief executive Flemming Ornskov told reporters on a conference call. "We manage the business for the long term, not the short term." (Bloomberg)