Despite AbbVie Snub, Shire Says it Will Double Sales by 2020
Shire announces it will expand its orphan drug portfolio and is ready for future M&A discussions.
Shire raised its profit forecast on Friday, Oct. 24, 2014, despite losing a recent deal with AbbVie. The company told Reuters it planned to double sales to $10 billion by 2020, $7 billion of which would come from its existing products and $3 billion from its pipeline. Analysts say Shire’s share price has still been negatively affected, despite the positive outlook.
According to Reuters, Shire CEO Flamming Ornskov told reporters during a call that Shire will focus on rare diseases and related orphan areas, and emphasized its operations have not been affected by AbbVie’s decision to walk away. Moreover, Ornskov told reporters that it still “has significant firepower to do any M&A deals in target areas.”
Had the US Treasury not changed some of the inversion laws, AbbVie would have benefitted from approximately $15-$18 billion in tax savings over the next 15 years, notes GlobalData analyst Aparna Krishnan in a press release. “By acquiring UK-based Shire, AbbVie’s effective tax rate would have dropped 7%, enhancing its earnings by $350 million on a pro forma basis in 2013.”
Sources:
http://www.reuters.com/article/2014/10/24/shire-results-idUSFWN0SJ00X20141024
http://www.reuters.com/article/2014/10/24/shire-brief-idUSL6N0SJ2MK20141024
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