Search the web
Welcome, Guest
[Sign Out, My Account]
EDGAR_Online

Quotes & Info
Enter Symbol(s):
e.g. YHOO, ^DJI
Symbol Lookup | Financial Search
SHPG > SEC Filings for SHPG > Form 10-Q on 9-May-2012All Recent SEC Filings

Show all filings for SHIRE PLC | Request a Trial to NEW EDGAR Online Pro

Form 10-Q for SHIRE PLC


9-May-2012

Quarterly Report


ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with Shire's unaudited consolidated financial statements and related notes appearing elsewhere in this report.

Significant events in the three months to March 31, 2012 and recent developments

Products

VPRIV manufacturing update

On February 22, 2012 Shire announced that the European Medicines Agency's ("EMA") Committee for Medicinal Products for Human Use had approved the production of VPRIV in its new biologics manufacturing facility in Lexington, Massachusetts and this decision was adopted by the European Commission on March 26, 2012. Shire now has two EMA approved facilities - Alewife in Cambridge, Massachusetts, as well as the new Lexington facility - in which to manufacture VPRIV drug substance.

Shire has received a Complete Response letter from the US Food and Drug Administration ("FDA") regarding production of VPRIV drug substance at Lexington. Shire is working closely with the FDA to address their questions and resolve any outstanding issues to the satisfaction of the agency.

Notwithstanding the ongoing discussions with the FDA, Shire continues to supply VPRIV to US patients through its existing approved US manufacturing facility at Alewife and has the capacity to meet the anticipated demand for VPRIV from existing and new patients both in the US and globally, recognizing that US inventory levels will be below target levels until the Lexington facility is approved by the FDA.

VYVANSE - for the treatment of Attention Deficit Hyperactivity Disorder ("ADHD")

On March 6, 2012 Shire announced that it is initiating two Phase 4 clinical trials to compare VYVANSE Capsules to CONCERTA Extended-Release Tablets. These prospectively designed head-to-head clinical trials will provide important information for physicians, patients, caregivers, and payors to make informed choices, and have been designed to explore differences in efficacy between VYVANSE and CONCERTA in adolescents aged 13 to 17 with ADHD. Together the two trials will enroll approximately 1,000 patients, and results are expected in the second half of 2013.

FOSRENOL - for the treatment of Hyperphosphatemia in end stage renal disease

On March 8, 2012 Shire announced that it has received approval through the European Decentralised Procedure for an oral powder formulation of FOSRENOL. The oral powder formulation was developed by Shire to give patients more choice in how they take their phosphate binder. Submissions for national marketing authorisations of FOSRENOL in oral powder form have been made to Sweden and the other 27 European markets, with the first national approvals anticipated in the second quarter of 2012.

Pipeline

REPLAGAL - for the treatment of Fabry disease

On March 14, 2012 Shire announced that it had withdrawn its Biologics License Application ("BLA") for REPLAGAL with the FDA. In 2009, and again in 2011, the FDA encouraged Shire to submit an application for the approval of REPLAGAL in the US. These discussions led Shire to file a BLA in November 2011 in anticipation of a quick review process and eventual approval. Recent interactions with the FDA in the first quarter of 2012 led Shire to believe that the FDA would require additional controlled trials for approval. No concerns over the product's safety profile were raised by the FDA. Shire has concluded that the likely additional studies would cause a significant delay, and an approval of REPLAGAL for US patients would only be possible in the distant future. Shire therefore decided to withdraw its BLA. Patients currently treated with REPLAGAL in the US under treatment access programs will be transitioned off REPLAGAL therapy by June 30, 2012.


SPD476, MMX mesalamine - for the treatment of diverticular disease

On March 30, 2012 Shire announced top-line results of the PREVENT2 trial, a Phase 3 investigational study of once-daily SPD476, MMX mesalamine in patients with a history of diverticulitis. The study did not meet the primary endpoint in reducing the rate of recurrence of diverticulitis over a two year treatment period. Shire will continue to analyze these data and those of the second study, PREVENT1, which was similar in design to PREVENT2 and will report later in the year. Although the results of the second trial are pending, the current intention is not to pursue a regulatory filing for this indication for MMX mesalamine.

Lisdexamfetamine dimesylate ("LDX") (currently marketed as VYVANSE in the US for the treatment of ADHD) for the treatment of Binge Eating Disorder ("BED")

On April 26 2012, Shire announced Phase 2 results from an efficacy and safety clinical study of LDX for the treatment of BED. In this study treatment of adults with 50 and 70 mg doses of LDX resulted in a statistically significant reduction in binge eating behavior compared to placebo, the pre-defined primary end-point. Additionally, treatment with 30, 50 and 70 mg doses of LDX resulted in a statistically significant increase in remission rates from binge eating compared to placebo. There is currently no approved pharmacologic treatment for patients struggling with BED, a serious and common eating disorder. The preliminary safety data suggests a profile generally consistent with the known profile of studies of VYVANSE in adults with ADHD.

FIRST QUARTER AND RECENT BUSINESS DEVELOPMENT ACTIVITY

Since the beginning of the year we have added to our pipeline through the following transactions:

Acquisition of FerroKin

On April 2, 2012 Shire completed the acquisition of FerroKin and with it SPD
602 (formally referred to as FBS0701), FerroKin's iron chelator treatment in Phase 2 development. SPD 602 serves a chronic patient need for treatment of iron overload following numerous blood transfusions. Together with our collaboration with Sangamo, the acquisition of FerroKin represents a strategic step in building Shire's hematology business, which already includes XAGRID and a growing development pipeline, including SPD 535. Cash consideration paid on closing amounted to $94.5 million. Further contingent cash consideration of up to $225 million may be payable by Shire in future periods, dependent upon the achievement of certain clinical development, regulatory and net sales milestones. For further details refer to Note 2 of PART I: ITEM 1 of this Form 10-Q.

Acquisition of certain assets of Pervasis

On April 19, 2012 Shire acquired substantially all the assets and certain liabilities of Pervasis. This acquisition adds VASCUGEL to Shire's Regenerative Medicine business. VASCUGEL is currently in Phase 2 development for acute vascular repair, focused on improving hemodialysis access for patients with end-stage renal disease. For further details refer to Note 2 of PART I: ITEM 1 of this Form 10-Q.

Acquisition of the US rights to prucalopride (marketed in certain countries in Europe as RESOLOR) - for the symptomatic treatment of chronic constipation

On January 10, 2012 Shire announced that it had acquired the rights to develop and market prucalopride (marketed in certain countries in Europe as RESOLOR) in the US in an agreement with Janssen Pharmaceutica N.V., part of the Johnson & Johnson Group.

In addition to the above acquisitions, we have entered into the following collaboration and in-license arrangements in the first quarter of 2012:

On February 1, 2012 Shire announced it had entered a collaboration and license agreement with Sangamo to develop therapeutics for hemophilia and other monogenic diseases based on Sangamo's zinc finger DNA-binding protein ("ZFP") technology.

On February 3, 2012 Shire exercised its option to acquire a worldwide exclusive license from Heptares Therapeutics Ltd ("Heptares") to certain novel adenosine A2a antagonist compounds. These compounds are currently in preclinical development and being considered as candidates for central nervous system ("CNS") disorders.


On February 29, 2012 Shire entered into a collaboration agreement with arGEN-X B.V. to develop novel therapeutic antibody products for the treatment of rare diseases.

Research and development

Products in registration as at March 31, 2012

VYVANSE for the treatment of ADHD in the EU

In December 2011 Shire submitted a Marketing Authorization Application ("MAA") seeking approval for VYVANSE (to be marketed as VENVANSE) for the treatment of ADHD in children aged 6 to 17. In January 2012 the EMA accepted this MAA for review.

INTUNIV for ADHD in Canada

In October 2011 Shire submitted a New Drug Submission ("NDS") seeking the approval in Canada for INTUNIV for the treatment of ADHD in children and adolescents aged 6 to 17. In December 2011, Health Canada accepted the NDS for screening.

DERMAGRAFT - for the treatment of Diabetic foot ulcers ("DFU")

On March 21, 2011, prior to acquisition by the Company, ABH filed a Class IV Medical Device Application to Health Canada to seek approval for DERMAGRAFT for the treatment of DFU.

Products in clinical development as at March 31, 2012

Phase 3

LDX (currently marketed as VYVANSE in the US for the treatment of ADHD) for the treatment of inadequate response in major depressive disorder ("MDD")

A Phase 3 clinical program to assess the efficacy and safety of LDX as adjunctive therapy in patients with MDD was initiated in the fourth quarter of 2011 and is ongoing.

INTUNIV for the treatment of ADHD in the EU

INTUNIV for the treatment of ADHD in children aged 6 to 17 in the EU is in Phase 3 development.

RESOLOR for the treatment of chronic constipation in males

A Phase 3 European clinical trial to further assess the efficacy of RESOLOR for the treatment of chronic constipation in males was initiated in 2010 and is ongoing.

Prucalopride for the treatment of chronic constipation in the US

On January 10, 2012, Shire announced that it had acquired the rights to develop and market prucalopride (marketed in certain countries in Europe as RESOLOR) in the US in an agreement with Janssen Pharmaceutica N.V. This product is Phase 3-ready and definitive plans will be implemented following discussions with regulatory authorities.

DERMAGRAFT - for the treatment of Venous Leg Ulcers ("VLU")

On August 24, 2011 Shire announced its preliminary analysis of the top-line results from ABH's Phase 3 pivotal trial of DERMAGRAFT in subjects with VLU. The international pivotal trial was designed as a prospective, multicenter, randomized, controlled clinical study to assess the product's safety and efficacy in the promotion of healing VLU. The preliminary analysis of the data was that the trial did not meet the primary endpoint mutually agreed with the FDA and EMA and a subsequent detailed analysis of the data set is ongoing.

XAGRID for the treatment of essential thrombocythaemia ("ET") in Japan

A Phase 3 clinical program has been initiated to assess the safety and efficacy of XAGRID in adult essential thrombocythaemia patients treated with cytoreductive therapy who have become intolerant to their current therapy or whose platelet counts have not been reduced to an acceptable level.


Phase 2

LDX (currently marketed as VYVANSE in the US for the treatment of ADHD) for the treatment of Excessive Daytime Sleepiness ("EDS")

Based on discussions with regulatory agencies regarding potential development pathways for LDX as a possible EDS treatment option, Phase 3 studies could begin in 2012.

LDX (currently marketed as VYVANSE in the US for the treatment of ADHD) for the treatment of Negative Symptoms of Schizophrenia ("NSS")

Based on discussions with regulatory agencies regarding potential development pathways for LDX as a possible NSS treatment option, Phase 3 studies could begin in 2012.

LDX (currently marketed as VYVANSE in the US for the treatment of ADHD) for the treatment of BED

Based on discussions with regulatory agencies regarding potential development pathways for LDX as a possible BED treatment option, Phase 3 studies could begin in 2012.

SPD - 557 for the treatment of refractory gastroesophageal reflux disease
("rGERD")

SPD 557 (M0003) is a selective 5-HT4 receptor agonist. An additional Phase 2b clinical trial has been initiated to assess the efficacy of SPD557 as an adjunctive therapy for treatment of rGERD in patients with persistent symptoms of regurgitation with or without heartburn while on proton-pump inhibitor (PPI) therapy.

HGT - 4510 for Duchenne Muscular Dystrophy ("DMD")

HGT-4510 (also referred to as ACE-031) was added to the Shire HGT portfolio in 2010 through an exclusive license in markets outside of North America for the ActRIIB class of molecules being developed by Acceleron. The lead ActRIIB drug candidate, HGT-4510 is in development for the treatment of patients with DMD. The Phase 2a trial is on hold. Additional preclinical toxicology work will be conducted in 2012. This product has been granted orphan designation in the US and the EU.

Phase 1

Guanfacine Carrier Wave, ("GCW") for the treatment of various CNS disorders

A lead candidate has been selected for development and a Phase 1 program has been initiated to determine safety and tolerability of this compound. The ongoing Phase 1 program will be supportive of potentially three different CNS-related indications: ADHD, hyperactivity in Autism Spectrum Disorder and Pediatric Anxiety.

SPD - 535 for the treatment of improvement in potency of arteriovenous access in hemodialysis patients

SPD 535 is in development as a novel molecule with platelet lowering ability and without phosphodiesterase type III inhibition apparent at clinically relevant doses. Data from Phase 1 clinical trials demonstrated positive proof-of-principle. Work is ongoing on additional Phase 1 studies to support progression to a Phase 2 proof-of-concept program that will target prevention of thrombotic complications associated with arteriovenous access in hemodialysis patients.

HGT - 2310 for the treatment of Hunter syndrome with CNS symptoms, idursulfase-IT (intrathecal delivery)

HGT-2310 is in development as an ERT delivered intrathecally for Hunter syndrome patients with CNS symptoms. The Company initiated a Phase 1/2 clinical trial in the first quarter of 2010. This trial is ongoing. This product has been granted orphan designation in the US.

HGT- 1410 for Sanfilippo A Syndrome (Mucopolysaccharidosis IIIA)

HGT-1410 is in development as an ERT delivered intrathecally for the treatment of Sanfilippo A Syndrome (Mucopolysaccharidosis IIIA), a lysosomal storage disorder. The product has been granted orphan drug designation in the US and in the EU. The Company initiated a Phase 1/2 clinical trial in August 2010. This trial is ongoing.

Products in pre-clinical development as at March 31, 2012

HGT- 3010 for Sanfilippo B Syndrome (Mucopolysaccharidosis IIIB)

HGT-3010 is in preclinical development as an ERT delivered intrathecally for the treatment of Sanfilippo B Syndrome (Mucopolysaccharidosis IIIB).


HGT- 1110 - for the treatment of Metachromatic Leukodystrophy ("MLD")

HGT-1110 is in preclinical development as an ERT delivered intrathecally for the treatment of Metachromatic Leukodystrophy. This product has been granted orphan drug designation in the US and the EU.

Other pre-clinical development projects

A number of additional projects are underway in various stages of pre-clinical development for the SP and HGT areas, including programs using Carrier Wave technology, which are primarily focused in the CNS area. More data on these programs is expected throughout 2012.

Development projects discontinued in the three months to March 31, 2012

The Company has discontinued the following SP development projects during the three months to March 31, 2012:

LIALDA/MEZAVANT for the treatment of diverticulitis


Results of operations for the three months to March 31, 2012 and 2011

Financial highlights for the three months to March 31, 2012 are as follows:

Product sales were up 24% to $1,107 million (2011: $889 million). The growth in product sales was driven particularly by VYVANSE (up 29% to $260 million), REPLAGAL (up 28% to $134 million), ELAPRASE (up 21% to $126 million), VPRIV (up 22% to $72 million), FIRAZYR (up 272% to $20 million) and INTUNIV (up 63% to $69 million). On a Non GAAP CER basis(1), product sales were up 26%.

First quarter product sales also included $49 million of DERMAGRAFT sales (2011:
$nil). Excluding sales of DERMAGRAFT, which was acquired with ABH in the second quarter of 2011, product sales were up 19%.

Total revenues were up 21%, to $1,172 million (2011: $972 million), as the growth in product sales was partially offset, as expected, by a lower level of royalties and other revenues.

Operating income increased by 11% to $295 million (2011: $267 million). R&D expenditure in the first quarter of 2012 increased by 24%, and included the up-front payments to Sangamo and on acquisition of the US rights to prucalopride (marketed in certain countries in Europe as RESOLOR). SG&A expenditure increased by 24% compared to the first quarter of 2011, as the first quarter of 2012 included $42 million of ABH's SG&A which was not incurred in the first quarter of 2011, and SG&A in the first quarter of 2011 was lower than the level experienced in subsequent quarters in 2011.

Diluted earnings per ordinary share were up 12% to $0.41 (2011: $0.37), due to higher operating income and a lower effective tax rate of 17% (2011: 19%).

1. The Company's management analyzes product sales and revenue growth for certain products sold in markets outside of the US on a constant exchange rate ("CER") basis, so that product sales and revenue growth can be considered excluding movements in foreign exchange rates. Product sales and revenue growth on a CER basis is a Non-GAAP financial measure ("Non-GAAP CER"), computed by comparing 2012 product sales and revenues restated using 2011 average foreign exchange rates to 2011 actual product sales and revenues. Average exchange rates for the three months to March 31, 2012 were $1.57:1.00 and $1.31:1.00 (2011:
$1.60:1.00 and $1.37:1.00).

Results of operations for the three months to March 31, 2012 and 2011

Total revenues

The following table provides an analysis of the Company's total revenues by source:

                   3 months to       3 months to
                     March 31,         March 31,
                          2012              2011       change
                           $'M               $'M            %
Product sales          1,106.9             889.3          +24
Royalties                 56.3              73.6          -24
Other revenues             8.6               9.3           -8
Total                  1,171.8             972.2          +21


Product sales

The following table provides an analysis of the Company's key product sales:

                                          3 months to       3 months to
                                            March 31,         March 31,       Product sales       Non-GAAP CER       US prescription        Exit market
                                                 2012              2011              growth             growth               growth1             share1
                                                  $'M               $'M                   %                  %                     %                  %
SP
ADHD
VYVANSE                                         260.0             202.3                 +29                +29                   +23                 17
ADDERALL XR                                     111.4             111.2                   -                  -                    +4                  7
INTUNIV                                          68.5              41.9                 +63                +63                   +54                  4
EQUASYM                                           7.2               4.6                 +57                +62                   n/a                n/a 3

Gastrointestinal ("GI")
LIALDA / MEZAVANT                                90.0              87.1                  +3                 +4                    +3                 21
PENTASA                                          65.8              64.5                  +2                 +2                    -6                 14
RESOLOR                                           2.4               0.9                +167               +168                   n/a 3              n/a 3


General Products
FOSRENOL                                         45.5              41.2                 +10                +12                   -23                  5
XAGRID                                           23.2              22.7                  +2                 +6                   n/a                n/a 2
Other product sales                              32.7              39.7                 -18                -17                   n/a                n/a
                                                706.7             616.1                 +15

HGT
REPLAGAL                                        134.4             105.4                 +28                +31                   n/a 3              n/a 3
ELAPRASE                                        125.6             103.5                 +21                +24                   n/a 2              n/a 2
VPRIV                                            71.7              59.0                 +22                +23                   n/a 2              n/a 2
FIRAZYR                                          19.7               5.3                +272               +280                   n/a 2              n/a 2
                                                351.4             273.2                 +29
RM
DERMAGRAFT                                       48.8               n/a                 n/a                n/a                   n/a 2              n/a 2
                                                 48.8                 -                 n/a
Total product sales                           1,106.9             889.3                 +24

(1) Data provided by IMS Health National Prescription Audit ("IMS NPA"). Exit market share represents the average monthly US market share in the month ended March 31, 2012.

(2) IMS NPA Data not available.

(3) Not sold in the US in the first quarter of 2012.

Specialty Pharmaceuticals

VYVANSE - ADHD

VYVANSE product sales grew strongly in the first quarter of 2012 as a result of higher prescription demand, due to an increase in VYVANSE's market share and growth in the US ADHD market and the effect of a price increase taken since


the first quarter of 2011. These positive factors were partially offset by higher sales deductions as a percentage of gross product sales in the first quarter of 2012 compared to the first quarter of 2011.

Litigation proceedings regarding Shire's VYVANSE patents are ongoing. Further information about this litigation can be found in PART I: ITEM 1 of this Form 10-Q.

ADDERALL XR - ADHD

ADDERALL XR product sales in the first quarter of 2012 remained constant compared with same period in 2011, as higher US prescription demand was offset by an increase in sales deductions in the first quarter of 2012.

For the full year ADDERALL XR's sales deductions as a percentage of branded gross sales are expected to be between 60% and 65%.

Litigation proceedings regarding Shire's ADDERALL XR patents are ongoing. Further information about this litigation can be found in PART I: ITEM 1 of this Form 10-Q.

INTUNIV - ADHD

INTUNIV product sales were up 63% compared to the first quarter of 2011, primarily driven by significant growth in US prescription demand compared to the first quarter of 2011 and growth in the US ADHD market, together with the effect of price increases taken since the first quarter of 2011. These positive factors were partially offset by higher sales deductions as a percentage of gross product sales in the first quarter of 2012 compared to the first quarter of 2011.

Litigation proceedings regarding Shire's INTUNIV patents are ongoing. Further information about this litigation can be found in PART I: ITEM 1 of this Form 10-Q.

LIALDA/MEZAVANT - Ulcerative colitis

The growth in product sales for LIALDA/MEZAVANT in the first quarter of 2012 was driven primarily by increased US prescription demand and a price increase taken since the first quarter of 2011, offset by higher de-stocking in the first quarter of 2012 compared to the first quarter of 2011.

Litigation proceedings regarding Shire's LIALDA patents are ongoing. Further information about this litigation can be found in PART I: ITEM 1 of this Form 10-Q.

FOSRENOL - Hyperphosphatemia

FOSRENOL product sales increased by 10% primarily due to modest stocking in the first quarter of 2012 and the impact of price increases taken since the first quarter of 2011 which partially offset lower US prescription demand. Product sales of FOSRENOL outside of the US remained constant as compared with the first quarter of 2011.

Litigation proceedings regarding Shire's FOSRENOL patents are ongoing. Further information about this litigation can be found in PART I: ITEM 1 of this Form 10-Q.

PENTASA - Ulcerative colitis

Product sales of PENTASA continued to grow as the impact of price increases taken since the first quarter of 2011 offset lower US prescription demand.

Human Genetic Therapies

REPLAGAL - Fabry disease

REPLAGAL product sales growth was driven by the treatment of new patients, being both nave patients and switches from FABRAZYME. Reported REPLAGAL sales were impacted by unfavourable foreign exchange, due to the stronger US dollar in the first quarter of 2012 compared to first quarter of 2011.

Litigation proceedings regarding REPLAGAL are ongoing. Further information about this litigation can be found in PART I: ITEM 1 of this Form 10-Q.


ELAPRASE - Hunter syndrome

Product sales for ELAPRASE increased as a result of increased patients on therapy across all regions in which ELAPRASE is sold and the benefit of the timing of certain large orders from markets which order less frequently. Reported ELAPRASE sales were also impacted by unfavourable foreign exchange.

VPRIV - Gaucher disease

VPRIV product sales growth was driven by the treatment of new patients, being both nave patients and switches from CEREZYME. Reported VPRIV sales were also impacted by unfavourable foreign exchange.

FIRAZYR - Hereditary Angioedema

FIRAZYR sales growth was driven primarily by the impact of the US launch in the fourth quarter of 2011, where we continue to see both good growth in new patients starting treatment and promising levels of repeat usage by existing patients. The more established markets in Europe also continue to grow following . . .

  Add SHPG to Portfolio     Set Alert         Email to a Friend  
Get SEC Filings for Another Symbol: Symbol Lookup
Quotes & Info for SHPG - All Recent SEC Filings
Sign Up for a Free Trial to the NEW EDGAR Online Pro
Detailed SEC, Financial, Ownership and Offering Data on over 12,000 U.S. Public Companies.
Actionable and easy-to-use with searching, alerting, downloading and more.
Request a Trial Sign Up Now


Copyright © 2014 Yahoo! Inc. All rights reserved. Privacy Policy - Terms of Service
SEC Filing data and information provided by EDGAR Online, Inc. (1-800-416-6651). All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found therein.