--Shire rival cleared to market Adderall XR generic
--Shares sink more than 10%
--Shire says expects to remain competitive in Adderall XR
market
By Sten Stovall
LONDON--Shire PLC (SHP.LN), usually a darling of investors, had
a rare bad news day Monday after a rival was cleared to market a
cut-price generic version of its hyperactivity drug Adderall XR,
but analysts expect the U.K. specialized drug maker to rebound
quickly once attention returns to its strong portfolio of
innovative drugs.
Shire shares sank more than 10% after U.S. regulators ruled
against the company and approved generic copies of its
hyperactivity medicine Adderall XR from Watson Pharmaceuticals'
(WPI) recently acquired Actavis unit.
Until Monday, there have only been two authorized generic forms
of Adderall XR on the market, both supplied by Shire.
The arrival of a low-cost version of the drug had been expected
but analysts said the U.S. Food and Drug Administration's ruling
had come sooner than expected.
Shire said it nonetheless expects to remain competitive in the
Adderall XR marketplace through the distribution of its branded
versions of the therapy and through its two authorized generic
partners, Teva Pharmaceutical Industries Ltd. (TEVA) and Impax
Laboratories Inc. (IPXL).
"While recognizing that there will be multiple dynamics
affecting the overall market following the approval of the Actavis
generic, Shire continues to believe that it will deliver good,
full-year 2012 earnings growth," the company said.
"We have prepared for this event and have a variety of options
which we can and will consider to offset any downward pressure on
profitability from this," a Shire spokesperson said. "We will
continue to invest and reduce costs in the discretionary expenses
area of the business."
Amphetamine-based Adderall XR began to see generic competition
three years ago. Since then, Shire has focused on Vyvanse, its
next-generation medicine for attention deficit hyperactivity
disorder, or ADHD, which is growing more than twice as fast as the
overall U.S. market for hyperactivity drugs.
Vyvanse has a different delivery mechanism than Adderall, in
that the drug can only be absorbed through the gut and cannot be
crushed for injection, limiting the potential for abuse.
"The importance of Adderall XR to Shire's long-term financial
health is diminishing as other franchises grow rapidly," said
analysts at Shore Capital.
Analysts say sentiment towards Shire should be reinforced by the
strong performance of Vyvanse in the booming ADHD market as well as
the medicine's potential of treating other disease areas.
Growth prospects also look strong for Shire's skin substitute
Dermagraft, its Firazyr treatment for acute attacks of a hereditary
angioedema, and data for its new Human Genetic Therapies
products.
At 1210 GMT, shares in Shire were down 12.56% to GBP17.20,
making it the FTSE-100 index's top faller.
-Write to Sten Stovall at Sten.Stovall@DowJones.com