By Denise Roland
Shire PLC reported lower-than-expected revenue for the third quarter after a drop in sales of the hemophilia drugs at the center of its $32 billion acquisition of Baxalta Inc.
Dublin-based Shire, which has doubled in size since closing the Baxalta deal on June 3, posted sales of $3.5 billion for the three months to Sept. 30, compared with $1.7 billion a year earlier.
That was lower than the $3.6 billion expected by analysts, largely due to a 6% drop in sales of treatments for hemophilia, a rare disorder that impairs the body's ability to form blood clots.
The strength of that franchise--people with hemophilia rely on these treatments for life and are reluctant to switch between brands--was a key driver in Shire's monthslong pursuit of Baxalta.
Chief Executive Flemming Ornskov said the fall in revenue was due to typically "lumpy" sales of hemophilia products, which in many countries are purchased in bulk through government tenders, rather than any underlying weakness of the franchise.
Meanwhile, sales from drugs excluding those acquired from Baxalta increased 12%, as a sharp rise in revenue from attention deficit hyperactivity drug Vyvanse and immunology treatment Lialda offset declines elsewhere.
Separately, Shire cut its full-year guidance and reported a net loss in the three months to Sept. 30, both due to heavy spending on the integration of Baxalta.
The company said it would post a diluted loss per American Depository Share of between 70 cents and $1.10 in 2016, having previously said it would postbetween zero earnings per ADS and a 40 cent loss. The company reported a net loss of $387 million for the three months to Sept. 30.
That cut to outlook, and the net loss, reflected a faster-than-expected integration of Baxalta, as well a milestone payment to Pfizer Inc. relating to a drug the pair are codeveloping, said Dr. Ornskov. The overall cost savings he expects from the integration--$700 million by 2019--are still on track, he said.
Excluding integration costs and other one-off items, Shire said it would post full-year diluted earnings per ADS of $12.70 to $13.10, reiterating earlier guidance. Non-GAAP operating income, a measure that strips out certain one-times gains and losses, as well as tax and interest, increased 73% to $1.3 billion in the third quarter.
Shire shares were down 2.2% at GBP45.47 Tuesday afternoon.
Write to Denise Roland at Denise.Roland@wsj.com
(END) Dow Jones Newswires
November 01, 201612:53 ET (16:53 GMT)
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