Reuters: Regulatory News: UPDATE 4-Shire hit as U.S. approves new generic ADHD drug

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UPDATE 4-Shire hit as U.S. approves new generic ADHD drug Jun 25th 2012, 18:10 Mon Jun 25, 2012 2:10pm EDT * FDA approves generic Adderall XR from Actavis * Approval earlier than expected, will hit Shire profits * Shire shares fall 11 percent * Impax shares fall 12 percent By Ben Hirschler June 25 (Reuters) - U.S. regulators have ruled against Shire in a battle over generic copies of its hyperactivity drug Adderall XR, approving a cut-price version of the medicine from Actavis, which is being bought by Watson Pharmaceuticals . The decision is a blow to Shire's near-term earnings and shares in the London-listed drugmaker tumbled 11 percent to close at 17.39 pounds. Until now there have only been two authorised generic forms of Adderall XR, both supplied by Shire, and the arrival of the new competitor from Actavis, despite an appeal against the move by Shire, will increase pricing pressure. Shares of U.S.-based Impax Laboratories Inc, which sells generic Adderall XR along with generics giant Teva Pharmaceuticals, also fell as much as 12 percent on the news. "The approval represents downside to current players in the Adderall XR generic market, including Impax, who had enjoyed limited competition to date," RBC Capital Markets analyst Shibani Malhotra said, cutting Impax's price target by $3 to $23. Analysts at Jefferies said the Food and Drug Administration's approval of the first abbreviated new drug application had been anticipated, but the move had come sooner than expected. Despite the setback, Shire said on Monday it continued to believe it would deliver good full-year 2012 earnings growth. Panmure Gordon, however, reduced its price target for the stock to 17.00 pounds from 17.80 previously and reiterated its "sell" recommendation. Adderall XR has been a mainstay of Shire's expanding ADHD (attention deficit hyperactivity disorder) drug business, although the company has newer drugs for the condition in Vyvanse and Intuniv that are both increasing U.S. market share. Mark Clark, an analyst at Deutsche Bank, said the impact of the arrival of Actavis' generic would be felt mainly on near-term earnings forecasts, since most Shire watchers had already assumed such generic competition in 2013. Deutsche cut its 2012-13 earnings forecasts by 5-6 percent but it still expects attractive double-digit percentage growth over the medium term, with Shire's compound annual earnings growth rate put at 11 percent to 2015. Shire has grown rapidly over the years through the successful marketing of drugs for ADHD. More recently, the company has diversified into new areas and now has a growing focus on rare diseases, an area of growing interest across the drugs sector. The group has frequently been tipped as a takeover target for larger companies looking to replenish their drug pipelines. Link this Share this Digg this Email Reprints

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