Shire Plc CEO Discusses Q4 2010 Results - Earnings Call Transcript

Shire plc ( SHPGY)

Q4 2010 Earnings Call

February 10, 2011 9:00 am ET

Executives

Eric Rojas - Director, North America Investor Relations

Angus Russell - Chief Executive Officer

Graham Hetherington - Chief Financial Office

Mike Cola - President, Specialty Pharmaceuticals

Sylvie Grégoire - President, Human Genetic Therapies

Analysts

Ken Cacciatore - Cowen and Company, LLC.

Peter Verdult - Morgan Stanley Dean Witter

David Buck - Buckingham Research Group

Kerry Holford - Credit Suisse

David Steinberg - Deutsche Bank Securities Inc.

Graham Parry - Merrill Lynch

Brian Bourdot - Barclays Capital

Frank Pinkerton - SunTrust Robinson Humphrey

Presentation

Operator

A very good day to you, ladies and gentlemen. Welcome to the Shire 2010 Full-Year Results Conference Call hosted by Angus Russell. My name is Nancy, I'm the operator for the call today. Your lines will remain on listen-only throughout the conference. (Operator Instructions) I'd like to advice all parties this call is being recorded for replay purposes.

I would now like to hand the call over to Eric Rojas. Please go ahead.

Eric Rojas

Thanks, Nancy. Good morning and good afternoon, everyone. Thank you for joining us today for Shire's full-year 2010 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 reasons you have not received the press release or are unable to access our website, please contact Souheil Salah in our UK Investor Relations Department on +44-1256-894-160 and he will be happy to assist you.

Our speakers today are Angus Russell and Graham Hetherington. Mike Cola and Sylvie Gregoire will be available for Q&A as well.

Before we begin, I would refer you to slide two 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 can materially affect our results.

Today's agenda is as follows. We’ll begin with opening remarks of Shire's performance and highlights from Angus and then Graham will continue with the financial review. Angus will then summarize the key priorities for 2011 and we will then open up for your questions.

As always, we are requesting that you ask a maximum of two questions per person so that everyone gets a chance to ask their questions. I will be more than happy to follow up off-line for any subsequent questions or clarifications.

And now, I’ll hand the call over to our CEO, Angus Russell.

Angus Russell

Thanks, Eric and good morning or good afternoon to everyone. I’m going to turn now to the first slide in the presentation, which is number five. These results, as you can see, are very much characterized by strong top line growth.

Total revenues for the year were up 15% to $3.5 billion and product sales were up 16% to $3.1 billion. It’s something of a landmark for Shire, that's the first time we've actually had product sales exceed $3 billion.

Turning to slide six and looking at the earnings, you can see that sales growth has actually driven strong earnings performance as well. Earnings were up 21% for the full year, up $4.23 per ADS. We've also produced strong cash generation of $1.4 billion during the year and that's up 48% from 2009. That gives us a very strong balance sheet, which is also supported by newly renewed banking facilities.

These financial results clearly underpin our aspirational target of mid-teens growth that we put out there some three years ago and said would be our target through 2015. So let's turn to the next slide and just have a little look at some of the business highlights for this past year.

So going through this product-by-product and starting with VYVANSE, recently we received an approval for the use of VYVANSE in adolescents. That's an important segment of the market in our minds, given the recent changes in U.S. healthcare reform, which allows younger people to stay on their family insurance for a much longer period of time. And that does carry cover very much this adolescent period of people's lives.

We've also had the pediatric indication launched in Canada. And recently again, we gained approval for adolescents and adults in Canada. And we were approved in Brazil and it will be our intent to try and launch the product there in the middle of 2011.

We also got our labeling indication for 14-hour efficacy in adults. Mind you, this is very clear differentiation in the market. No other drug in the marketplace has that kind of duration of effect. And that's extremely important in the adult community where adults obviously metabolize drugs faster or have a longer working day and need that kind of coverage.

And we also announced for the first time obviously some headline data around signal-finding studies on our non-ADHD indications of VYVANSE. And this, we believe, will over the next few years potentially create new value in our pipeline.

With INTUNIV, it's now approaching pretty much a 3% U.S. market share in just its first full year of launch and is being prescribed by about 28,000 physicians across the U.S.

LIALDA continues to have a great performance, although it's one of the products now that's been out there a little longer. It still is producing very, very good growth and recently achieved a 20% U.S. market share.

And to the GI portfolio, as you know through the acquisition of Movetis, we recently added a new product, RESOLOR, which addresses a symptomatic unmet medical need of chronic constipation. The acquisition first of Movetis, both expands our ex-U.S. GI franchise and our R&D pipeline. RESOLOR itself is now launched in three countries and recently had a strong recommendation for payments and reimbursement by NICE in the UK.

Turning to slide eight and looking at our HGT business, VPRIV obviously its first full year of launch has done exceptionally well. It's now approved in 35 countries worldwide, including both countries in North America and the EU. We ended the year at about just over 1,000 patients on therapy globally and by our calculations that represents something around an 18% global market share, tremendous performance in just its first full year.

REPLAGAL, tremendous growth over this past year and that left us at the end of the year treating something just over 2,300 patients globally. In Western Europe, we again estimate that to be something like an 80% market share.

ELAPRASE continues to show good growth having been launched now for a few years, but we have over 1,000 patients on treatment globally.

In FIRAZYR obviously we again headlined recently for you the positive efficacy and safety from the second U.S. Phase III study and we hope very shortly to be filing the response with the FDA. That as a second response will have a six-month review period and so we hope to be in a position to launch this drug later in the year in the U.S.

And in addition today we can actually announce also that we recently in the last couple of weeks received a positive opinion from the CHMP for the self-administration label in Europe and that's a major advance, we believe, for this product. As you remember, it's in a pre-filled syringe. It was designed to be self-administered and we believe this will now give patients full benefit by this convenience of use.

Also, M&A activity in the HGT segment. We signed a partnership arrangement with Acceleron for an exciting range of new compounds called ACVR2B. We have secured the exclusive ex-North American rights to those products and at the moment the first of those ACE-031 is undergoing a proof of concept study in the treatment of Duchenne muscular dystrophy.

Read the rest of this transcript for free on seekingalpha.com

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