LONDON (Reuters) - Shire will start making a genetic disease medicine itself after it was hit by supply problems, the London-listed firm said on Friday as it reported a sharp rise in profit.
“We delivered strong growth this quarter with product sales up 7 percent to $3.5 billion despite a Cinryze supply shortage and a Lialda generic entry,” Shire Chief Executive Flemming Ornskov said in a statement.
Ornskov said Shire’s immunology drugs to treat diseases like Guillain-Barre syndrome performed strongly in the quarter and growth in the franchise it acquired by buying Baxalta last year rose from a historical rate of 6-8 to 21 percent year to date.
But a supply failure for Cinryze, which manages hereditary angioedema (HAE), had slowed progress, as had a 68 percent drop in Lialda sales after the July launch of a generic competitor.
Although Cinryze manufacturing had resumed and about $100 million of delayed product was shipped in October, Shire will start making the drug at its own facilities by the first quarter of 2018, which would secure supplies, Ornskov said.
However, the glitch had handed an advantage to rival CSL Behring, which has launched a competing product called Haegarda.
“We have seen some loss of new patients initially. But given strong patient loyalty (...) we do not see a major impact and we are very confident we will continue to maintain the majority of our patients,” Ornskov said.
A new HAE drug, which will be filed for approval in late 2017 or early 2018, bolstered his confidence in this area.
Shares in Shire were trading up 1.2 percent at 35.65 pounds ($46.62).
Analysts at Berenberg said Shire’s sales in the quarter were a “mixed bag that highlights the pushes and pulls in the product portfolio”, but the results showed its ability to deliver on cost control to drive earnings.
Ornskov said a decision on whether to spin off Spire’s neuroscience drugs, which analysts say could be worth up to $8.5 billion, would be made by year-end.
The franchise, which mainly addresses attention deficit hyperactivity disorder (ADHD), achieved growth of 12 percent.
It successfully launched Mydayis in August and the once-daily ADHD drug had been prescribed to more than 11,000 patients by Oct. 17, he added.
Shire has reviewed its manufacturing portfolio after the Baxalta deal, and Ornskov said it had identified $100 million in annual savings from 2019.
The company reported a 20 percent rise in non-GAAP earnings per share, its preferred measure, of $3.81 on total revenue of $3.70 billion, and reiterated its guidance for the year.
Editing by Kate Holton and Alexander Smith