Shire sales remain solid, Takeda deal 'on track'

Shire Pharmaceuticals, the subject of a $62bn takeover by Japan’s Takeda, said its focus on rare diseases had offset foreign exchange weakness and boosted third-quarter profits.

The London-listed drugs group said product sales rose 6% to $3.8bn in the three months to 30 September, while total revenues were ahead 5% at $3.9bn.

Operating income from continuing operations was ahead 35% at $956m, while net income was down 2% at $537m. Shire attributed the fall to unfavourable comparisons to the same period a year ago, when the quarter benefited from changes in the costs to manufacture certain products.

Chief executive Flemming Ornskov said: “We continue to deliver solid growth and pay down our debt while advancing our late stage pipeline. Our focus on commercial execution led to 6% growth in product sales, overcoming foreign exchange headwinds. Our growth was once again driven by our immunology franchise, recently-launched products and expansion in international markets.”

Shire accepted Takeda’s blockbuster approach earlier this year. The Japanese group, a specialist in oncology, gastroenterology and neuroscience, already operates in more than 70 countries but believes Shire will accelerate its international expansion, especially in the lucrative American market.

Shire’s immunology unit, which specialises in rare and immune-mediated conditions, is also a major attraction.

The deal will create one of the world’s biggest pharmaceutical companies, and needs to win approval of numerous regulators.

Shire said on Thursday the deal was on track to close in the first half of 2019. “Takeda has already received clearances from regulatory agencies in the US, Japan and China and other countries and is in discussion with the European Commission as part of its phase 1 review of the proposed acquisition.”

The recent $2.4bn sale of Shire's oncology arm meant that projected 2020 revenue targets have been adjusted to $16.5bn to $17.5bn, reflecting the removal of the $500m of oncology sales in the original forecast. Proceeds from the deal, which closed on 31 August, also allowed Shire to pay down debts by $3.9bn in the year to date.