Shire delivers strong Q1 2016 results with double-digit growth in revenue and Non GAAP earnings per ADS
Shire delivers strong Q1 2016 results with double-digit growth in revenue and Non GAAP earnings per ADS
Proposed combination with Baxalta on track with shareholder votes set for May 27 and closing anticipated in early June 2016
April 29, 2016 – Shire plc (“Shire”) (LSE: SHP, NASDAQ: SHPG) announces unaudited results for the three months ended March 31, 2016.
| Financial Highlights | Q1 2016 | Growth(1) | Non GAAP CER(1)(2) |
| Product sales | $1,627 million | +14% | +16% |
| Total revenues | $1,709 million | +15% | +17% |
| Non GAAP operating income | $797 million | +17% | +16% |
| US GAAP operating income from continuing operations | $544 million | +15% | |
| Non GAAP EBITDA margin (excluding royalties & other revenues)(3) | 46% | 0pps(4) | |
| US GAAP net income margin(5) | 25% | -3pps | |
| Non GAAP net income | $632 million | +13% | |
| US GAAP net income | $419 million | +2% | |
| Non GAAP diluted earnings per ADS | $3.19 | +12% | +12% |
| US GAAP diluted earnings per ADS | $2.12 | +2% | |
| Non GAAP cash generation | $492 million | -5% | |
| Non GAAP free cash flow | $338 million | +38% | |
| US GAAP net cash provided by operating activities | $390 million | -31% |
(1) Percentages compare to equivalent 2015 period.
(2) On a Constant Exchange Rate (“CER”) basis, which is a Non GAAP measure.
(3) Non GAAP earnings before interest, tax, depreciation and amortization (“EBITDA”) as a percentage of product sales, excluding royalties and other revenues.
(4) Percentage point change (“pps”).
(5) US GAAP net income as a percentage of total revenues.
The Non GAAP financial measures included within this release are explained on pages 25 - 26, and are reconciled to the most directly comparable financial measures prepared in accordance with US GAAP on pages 19 - 22.
First Quarter & Recent Highlights:
- Product sales growth of 14% (16% on a Non GAAP CER basis) to $1.6 billion, driven by VYVANSE®, LIALDA®/MEZAVANT®, CINRYZE®, FIRAZYR®, GATTEX®/REVESTIVE® and NATPARA®.
- Rare disease products acquired from NPS Pharmaceuticals, Inc. (“NPS”) continued to perform well with GATTEX/REVESTIVE sales up 247% (up 97% on a pro-forma basis(1)) to $52 million, and NATPARA sales of $16 million.
- Free cash flow remained strong, impacted primarily by net payments and receipts of taxes between Q1 2015 and Q1 2016.
- Lifitegrast New Drug Application (“NDA”) accepted by the US Food and Drug Administration (“FDA”), with Prescription Drug User Fee Act (“PDUFA”) date set for July 22, 2016.
- Pipeline progression with positive topline results from SHP465 safety and efficacy study in children and adolescents with Attention Deficit Hyperactivity Disorder (“ADHD”).
- Completed acquisition of Dyax Corp. (“Dyax”) and enrollment on track for SHP643 (formerly DX2930) Phase 3 studies for the treatment of Hereditary Angioedema (“HAE”).
- Patent upheld for LIALDA (mesalamine) delayed release tablets by U.S. District Court for the Southern District of Florida; the case has been appealed.
- Baxalta Incorporated (“Baxalta”) acquisition on track with integration progressing well; shareholder votes set for May 27 and closing anticipated in early June.
(1) Sales prior to February 21, 2015 were recorded by NPS.
Flemming Ornskov, M.D. Chief Executive Officer, commented:
“Shire is off to a strong start in 2016, delivering double-digit product sales and Non GAAP earnings per ADS growth, and advancing our innovative pipeline. We were pleased to report positive Phase 3 topline results for SHP465 in children and adolescents with ADHD, a therapeutic area with significant need for additional treatment options. We are also looking forward to hearing from the FDA by late July regarding lifitegrast, a potential new treatment for dry eye disease.
While we maintain our sharp focus on Shire’s business, we closed the acquisition of Dyax during the quarter and we are making excellent progress with the Baxalta integration planning. Our shareholder vote is scheduled for May 27 and the closing is anticipated to follow in early June. We look forward to officially welcoming our Baxalta colleagues to Shire, and creating a global biotechnology leader focused on rare diseases and other highly specialized conditions.”
For further information please contact:
Investor Relations | ||
| Sarah Elton-Farr | [email protected] | +44 1256 894157 |
| Robert Coates | [email protected] | +44 1256 894874 |
| Ian Karp | [email protected] | +1 781 482 9018 |
| Media | ||
| Michele Galen | [email protected] | +1 781 482-1867 |
| Brooke Clarke | [email protected] | +44 1256 894829 |
| Gwen Fisher | [email protected] | +1 781 482 9649 |
Dial in details for the live conference call for investors at 14:00 BST / 09:00 EDT on April 29, 2016:
| UK dial in: | 0808 237 0030 or 020 3139 4830 |
| US dial in: | 1 866 928 7517 or 1 718 873 9077 |
| International Access Numbers: | Click here |
| Password/Conf ID: | 76461165# |
| Live Webcast: | Click here |
The quarterly earnings presentation will be available today at 12:00 BST / 07:00 EDT on:
- Shire.com Investors section
- Shire's IR Briefcase in the iTunes Store
NOTES TO EDITORS
Shire enables people with life-altering conditions to lead better lives.
Our strategy is to focus on developing and marketing innovative specialty medicines to meet significant unmet patient needs.
We focus on providing treatments in Rare Diseases, Neuroscience, Gastrointestinal and Internal Medicine and we are developing treatments for symptomatic conditions treated by specialist physicians in other targeted therapeutic areas, such as Ophthalmics.
THE “SAFE HARBOR” STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Statements included herein that are not historical facts, including without limitation statements concerning future strategy, plans, objectives, expectations and intentions, the anticipated timing of clinical trials and approvals for, and the commercial potential of, inline or pipeline products are forward-looking statements. Such forward-looking statements involve a number of risks and uncertainties and are subject to change at any time. In the event such risks or uncertainties materialize, Shire’s results could be materially adversely affected. The risks and uncertainties include, but are not limited to, the following:
- the proposed combination with Baxalta may not be completed due to a failure to satisfy certain closing conditions, including any shareholder or regulatory approvals or the receipt of applicable tax opinions;
- disruption from the proposed transaction with Baxalta may make it more difficult to conduct business as usual or maintain relationships with patients, physicians, employees or suppliers;
- the combined company may not achieve some or all of the anticipated benefits of Baxalta’s spin-off from Baxter International, Inc. (“Baxter”) and the proposed transaction may have an adverse impact on Baxalta’s existing arrangements with Baxter, including those related to transition, manufacturing and supply services and tax matters;
- the failure to achieve the strategic objectives with respect to the proposed combination with Baxalta may adversely affect the company’s financial condition and results of operations;
- products and product candidates may not achieve commercial success;
- product sales from ADDERALL XR and INTUNIV are subject to generic competition;
- the failure to obtain and maintain reimbursement, or an adequate level of reimbursement, by third-party payers in a timely manner for the company’s products may affect future revenues, financial condition and results of operations, particularly if there is pressure on pricing of products to treat rare diseases;
- supply chain or manufacturing disruptions may result in declines in revenue for affected products and commercial traction from competitors; regulatory actions associated with product approvals or changes to manufacturing sites, ingredients or manufacturing processes could lead to significant delays, an increase in operating costs, lost product sales, an interruption of research activities or the delay of new product launches;
- the successful development of products in various stages of research and development is highly uncertain and requires significant expenditures and time, and there is no guarantee that these products will receive regulatory approval;
- the actions of certain customers could affect the company’s ability to sell or market products profitably, and fluctuations in buying or distribution patterns by such customers can adversely affect the company’s revenues, financial condition or results of operations;
- investigations or enforcement action by regulatory authorities or law enforcement agencies relating to the company’s activities in the highly regulated markets in which it operates may result in significant legal costs and the payment of substantial compensation or fines;
- adverse outcomes in legal matters, tax audits and other disputes, including the company’s ability to enforce and defend patents and other intellectual property rights required for its business, could have a material adverse effect on the company’s revenues, financial condition or results of operations;
- Shire is undergoing a corporate reorganization and was the subject of an unsuccessful acquisition proposal and the consequent uncertainty could adversely affect the company’s ability to attract and/or retain the highly skilled personnel needed to meet its strategic objectives;
- failure to achieve the strategic objectives with respect to Shire’s acquisition of NPS Pharmaceuticals Inc. or Dyax may adversely affect the company’s financial condition and results of operations;
- the company is dependent on information technology and its systems and infrastructure face certain risks, including from service disruptions, the loss of sensitive or confidential information, cyber-attacks and other security breaches or data leakages that could have a material adverse effect on the company’s revenues, financial condition or results of operations;
- the company may be unable to retain and hire key personnel and/or maintain its relationships with customers, suppliers and other business partners;
- difficulties in integrating Dyax or Baxalta into Shire may lead to the company not being able to realize the expected operating efficiencies, cost savings, revenue enhancements, synergies or other benefits at the time anticipated or at all; and
other risks and uncertainties detailed from time to time in Shire’s, Dyax’s or Baxalta’s filings with the Securities and Exchange Commission (“SEC”), including those risks outlined in “ITEM 1A: Risk Factors” in Shire’s and Baxalta’s Annual Reports on Form 10-K for the year ended December 31, 2015.
All forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by this cautionary statement. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. Except to the extent otherwise required by applicable law, we do not undertake any obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.