(Adds detail, analyst comment)
LONDON (AFX) - British drug developer Shire PLC reported a 5 pct fall in underlying annual earnings, dented by the cost of launching two new drugs, Fosrenol for renal disease and Equetro for bipolar disorder.
And crucial talks with generics drugmaker Barr Laboratories concerning Adderall XR, the company's biggest product, are 'progressing', it said.
Investors are waiting for news on a possible settlement with Barr, which wants to make copycat versions of the hyperactivity drug.
Shire wants to be able to switch patients on to its new Attention Deficit Hyperactivity Disorder drug, NRP104, before cheaper versions of Adderall XR reach the market.
Meanwhile in 2005, pre-exceptional earnings per ADS fell to 2.01 usd from 2.11 usd the previous year. Analysts were expecting earnings of 1.90 usd per ADS, but forecasts ranged widely, from 1.65-2.10 usd.
Sales of its own products rose 19 pct to 1.33 bln usd, while revenues from royalties advanced 5 pct to 242.9 mln.
'The results seem broadly in line,' analyst Robin Campbell at Jeffries Securities said. 'But there's no settlement with Barr yet, and that's the major event.'
Shire is trying to diversify its portfolio because Adderall XR represents around half of sales and profits.
The acquisition of US speciality drug maker Transkaryotic Therapies Inc last year gave the company four new products on or close to the market, including Elaprase for Hunter syndrome, which is waiting for regulatory approval.
Shire reported an annual loss on the cost of the acquisition, which resulted in a 673 mln usd write-off. The net loss came in at 410.8 mln usd, compared with a profit of 269 mln last time.
In 2006, underlying profits are likely to fall again as spending rises on the clutch of new drugs Shire plans to launch in the next 18 months.
While not giving earnings guidance, the company said today it expects 2006 revenue growth to be in the low double-digit range, based on the assumption that there will be no generic launch of Adderall XR this year.
Shire noted that any launch of a generic version of Adderall XR would materially impact forecasts.
The company upped its forecasts of costs slightly today. Sales and general costs are seen between 770-800 mln usd, compared to a previous forecast of 700 mln, while research and development spending is seen reaching 310-330 mln. It was previously guiding to 300 mln.
This year and the first half of the next is likely to see the launches of new ADHD drug Daytrana, Elaprase, Mesavance for ulcerative colitis and the follow-on treatment for Adderall XR, NRP104.
Shire filed six new products with regulators in 2005.
At 1.00 pm Shire shares were trading 6.5 pence lower at 868.5. amy.brown@afxnews.com ab/jsa/ab/joy COPYRIGHT Copyright AFX News Limited 2005. All rights reserved. The copying, republication or redistribution of AFX News Content,inculding by framing or similar means, is expressly prohibited without the prior written consent of AFX News. AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited