Shire plc (SHPGY)
Q2 2011 Earnings Call
July 28, 2011 9:00 am ET
Graham Hetherington - Chief Financial Officer, Principal Accounting Officer and Director
Angus Russell - Chief Executive Officer and Executive Director
Sylvie Gregoire - Member of Management Committee and President of Human Genetic Therapies Business
Eric Rojas - Director of Investor Relations - North America
Michael Cola - President of Specialty Pharmaceuticals, Member of Senior Staff Committee and Member of Management Committee
Florent Cespedes - Exane BNP Paribas
William Tanner - Lazard Capital Markets LLC
David Steinberg - Deutsche Bank AG
Ken Cacciatore - Cowen and Company, LLC
Brian Bourdot - Barclays Capital
Peter Verdult - Morgan Stanley
Brian White - Shore Capital Group plc
Timothy Chiang - CRT Capital Group LLC
David Buck - Buckingham Research Group, Inc.
Justin Smith - MF Global UK Limited
Keyur Parekh - Goldman Sachs Group Inc.
Gary Nachman - Susquehanna Financial Group, LLLP
Previous Statements by SHPGY
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» Shire Plc. Q2 2010 Earnings Call Transcript
Good day, ladies and gentlemen, and welcome to the Shire's 2011 Second Quarter Results Call, hosted by Angus Russell. My name is Phoebe, and I'm your event manager. [Operator Instructions] I'd like to advise all parties this conference is being recorded for replay purposes, and I'd like to hand over to Eric Rojas. Please go ahead, Eric.
Thanks, Phoebe. Good morning and good afternoon, everyone. Thank you for joining us today for Shire's Second Quarter 2011 Financial Results.
By now, you should have all received our press release and should be viewing our presentation via our website on shire.com. If for some reason you have not received the press release or unable to access our website, please contact Souheil Salah in our U.K. Investor Relations department on +44 1256 894 160, and he'll be happy to assist you.
Our speakers today are Angus Russell; and Graham Hetherington. Mike Cola and Sylvie Grégoire will be available for Q&A as well.
Before we begin, I would refer you to Slide 2 of our presentation and remind you that any statements made during this call, which are not historical statements, will be forward-looking statements. And as such, will be subject to risks and uncertainties, which if they materialize, could materially affect our results.
Today's agenda is on Slide 3. Angus will comment on Shire's Q2 performance and recent highlights, including the acquisition of Advanced BioHealing. Graham will continue with the financial review and update Shire's full year outlook. Angus will conclude by summarizing near-term key events and opening up the call for your questions.
[Operator Instructions] Sarah Elton-Farr and I will be more than happy to follow up off-line for any subsequent questions.
I'll now hand the call over to Angus.
Thanks so much, Eric, and good afternoon or good morning to everyone. So turning to Slide 5, which summarizes the revenue performance this quarter. Once again, revenues were up very strongly, 25% overall and, again, significantly driven by product sales growth. Product sales were actually up 30% in the quarter. Also, for us this quarter, it's a significant new milestone, we exceeded $1 billion of revenues in a quarter for the first time in our history.
Turning to the next slide, Slide 6. Product sales growth, therefore, is the major factor which is driving also a very good bottom line performance. So when we look at the non-GAAP earnings on this slide, you can see earnings per ADS, fully diluted, were up 29%. Non-GAAP earnings at $1.33, and we believe that was significantly ahead of the expectations in this quarter.
Operating income also up very strongly. So good consistent progression from the top line through to the bottom line. Operating income was also up 26% to $342 million in the quarter.
We turn to the next slide and start to take a look at some of the major business highlights in the quarter and starting with the HGT portfolio. FIRAZYR. Many of you know, that there was an FDA Advisory Committee during this quarter to consider FIRAZYR in the U.S. market. And we're very pleased to see that strong majority of the members of the -- that Advisory Committee recommended not only the approval of FIRAZYR but the approval with self-administration, which, of course, is one of the key distinguishing features of our product versus some of the competitor products.
FIRAZYR, as you know, is to treat acute attacks of hereditary angioedema. PDUFA date now is our next target milestone towards launching the product, and that's set for August 25. And we now hope, armed with that outcome from the Advisory Committee, that we get a positive decision on PDUFA date, and our plans are to advance to a full product launch in the U.S. market by the end of the year.
In regard now to REPLAGAL. Also very pleased with another regulatory decision this quarter was the European approval by the EMEA, was received for the purification of REPLAGAL in our new Lexington manufacturing facility. And this now gives us, of course, a lot more of manufacturing flexibility in regard to REPLAGAL. The product performance during the quarter was also again very strong. We saw 46% growth in revenues versus the same period last year.
Moving down to VPRIV for Gaucher. Our process validation runs in the new manufacturing facility also well on track and are now nearing completion, and that will allow us to submit those, we hope, according to our plans, by the end of this year. And then again, we look forward to talking to both the FDA and the EMEA in regards to their inspection of facility. And we hope, in due course, sometime next -- early next year, to receive approval to manufacture and release product from that new facility for VPRIV. As a result of that, our FDA, EMEA filings are fully on track as well for submission by the end of the year. And in the quarter, you can see a really strong product performance here, growth of 121% in revenues versus the same period last year.
Now turning to the next slide, Slide 8, and looking at our Specialty Pharma performance and starting with the ADHD portfolio. VYVANSE recorded another strong increase in the quarter. You can see VYVANSE prescription growth increase 21% over the same period last year, and that's almost double the currently strong growth in the market overall, which was 11% in volume terms during the quarter.
We're on track also with our EU pivotal clinical programs. They're progressing as planned, and we still anticipate to be able to make our first MAA filings by Q2 -- Q4 in this year. Potential non-ADH [non-ADHD] indications are also continuing to progress well, and I'll return to those again on a subsequent slide.
In regard to INTUNIV, also continuing to do very well in the market. Prescription growth here in the quarter was up 14% over the same period (sic) [over Q1 2011] and 88% over the same period last year. We had a favorable increase in market share. The trends really being driven by new consumer marketing campaigns, and also obviously, the approval in February this year of the use of INTUNIV as adjunctive therapy with stimulants.
We're also enrolling, remember, EU pivotal programs, given we told you before that the regulator in Europe minded to offer us 10 years data exclusivity on launch of this product, and so that's enabling us to move forward. And we are now under enrollment with those EU pivotal programs in Europe.
Looking at MEZAVANT and LIALDA for ulcerative colitis. Our U.S. market share, in prescription terms, increased again, up now to 20.4%. And the FDA recently approved LIALDA for a label change, which is to add a maintenance of remission claim, and that, again, offers further upside to the ongoing growth of LIALDA in the ulcerative colitis market.