Shares in Shire came in for serious punishment from the bears after the specialist pharmaceuticals company confirmed that the US Food & Drug Administration has allowed Swiss generics company Actavis to sell a third generic version of attention-deficit-disorder drug Adderall XR. The new drug will compete directly with versions licensed by Shire and could ravage Shire's revenues from the drug.
The move prompted broker Panmure Gordon to cut its forecast earnings for 2012 by 6 per cent to $1.92 (123p) and by about 7 per cent for both 2013 and 2014. Adderall XR generates about $500m annual revenues for Shire, but the broker reckons this figure will be slashed to $300m in 2012, falling to $100 by 2014. The news comes on top of an increasingly tricky time for the UK company, with earnings growth already slower than some analysts had expected. Operationally, there have been mis-steps, too. Earlier this year the company failed to get an increase in its manufacturing capacity at Lexington, Massachusetts, approved by the drugs regulator.
