Shares in Shire (LON:SHP) have fallen into the red in early afternoon trade as the blue-chip pharmco revealed that it was expecting slower earnings growth this year. The rare disease specialist, however, posted a rise in revenue and earnings for the 12 months ended December 31.
As of 13:08 GMT, Shire’s share price had given up 1.29 percent to 3,140.00p, underperforming the broader UK market, with the benchmark FTSE 100 index having climbed into positive territory and currently standing 0.65 percent higher at 7,214.79 points. The pharmco’s shares have lost more than 31 percent of their value over the past year, as compared with less than a one-percent fall in the Footsie.
Shire posts rise in profits
Shire reported in a statement today that its pro forma product sales had climbed eight percent to $14.4 billion in the year ended December 31. The group’s total revenues meanwhile soared 33 percent to $15.16 billion, while the pharmco’s non-GAAP diluted earnings per American Depository Share (ADS) came in 16 percent higher at $15.15.
The group’s chief executive Flemming Ornskov noted that “of particular note are the strong performance of our Immunology franchise and the significant contribution from recently launched products, as well as growth in international markets”.
Shire also revealed that it had revalued its deferred tax liability following the tax reform in the US, which resulted in a decrease to the net deferred tax liability of about $2.5 billion, recorded as reduction to income tax expense for the fourth quarter of the year.
Slower growth ahead
Going forward, the rare disease specialist expects its non-GAAP diluted ADS to be lower than top line growth in in the current year, mainly due to costs incurred from the start-up of Shire’s new US plasma manufacturing site, growing competition from generics, as well as lower royalties. The rare disease specialist, however, noted that it was committed to achieving its projected revenue target of between $17 billion and $18 billion in 2020.