On May 2, 2017 Shire plc (Shire) (LSE: SHP, NASDAQ: SHPG) reported unaudited results for the three months ended March 31, 2017 (Press release, Shire, MAY 2, 2017, View Source [SID1234518784]). Schedule your 30 min Free 1stOncology Demo! Flemming Ornskov, M.D., M.P.H., Shire Chief Executive Officer, commented:
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"In the first quarter we delivered strong top-line growth with quarterly product sales of $3.4 billion. I am especially pleased to see that our sales growth came from across our broad portfolio, with genetic diseases growing 14%, our recently launched XIIDRA product achieving a 22% market share and the Baxalta business growing at 8% on a pro forma basis. We also improved our operational efficiency, and are ahead of plan on integrating Baxalta.
"Our priorities for the rest of 2017 remain unchanged: launching new products while driving commercial excellence, generating operational efficiencies, and advancing our pipeline of novel therapies. Additionally, we continue to prioritize paying down debt, and we are on track to achieve our full-year financial guidance.
"Looking ahead, I see tremendous opportunity for further growth as we continue to build on our position as the global leader in treating patients with rare diseases."
Financial Highlights Q1 2017(1) Growth(1) Non GAAP CER(1)(2)
Product sales $3,412 million +110% +110%
Product sales excluding legacy Baxalta $1,807 million +11% +11%
Total revenues $3,572 million +109% +110%
Operating income from continuing operations $497 million (9%)
Non GAAP operating income(2) $1,454 million +82% +82%
Net income margin(3)(4) 10% (15ppc)
Non GAAP EBITDA margin(2)(4) 44% (5ppc)
Net income $375 million (11%)
Non GAAP net income(2) $1,102 million +74%
Diluted earnings per ADS(5) $1.23 (42%)
Non GAAP diluted earnings per ADS(2)(5) $3.63 +14% +14%
Net cash provided by operating activities $459 million +18%
Non GAAP free cash flow (2) $247 million (27%)
(1) Results include Baxalta Inc. (Baxalta) (acquired on June 3, 2016) and Dyax Corp. (Dyax) (acquired on January 22, 2016), unless otherwise noted. Percentages compare to equivalent 2016 period.
(2) The Non GAAP financial measures included within this release are explained on pages 25 – 26, and are reconciled to the most directly comparable financial measures prepared in accordance with US GAAP on pages 19 – 21.
(3) US GAAP net income as a percentage of total revenues.
(4) Percentage point change (ppc).
(5) Diluted weighted average number of ordinary shares 911.8 million.
Financial Highlights
Delivered product sales growth of 110% with strong legacy Shire sales and the inclusion of legacy Baxalta sales.
Achieved combined pro forma sales growth of 9%; legacy Shire sales growth of 11% and legacy Baxalta pro forma sales growth of 8%.
Generated Non GAAP earnings per ADS of $3.63, reflecting strong business fundamentals and operational discipline.
Ahead of schedule with Baxalta integration and on-track to achieve at least $700 million in synergies by year 3.
Debt pay-down continued during the quarter and we remain on-track to achieve our year end debt target.
Product and Pipeline Highlights
Continued to drive expansion of the U.S. dry eye disease market, with XIIDRA increasing its market share to 22% as of March 2017.
Increased CINRYZE sales by 38% to $226 million, reflecting higher patient demand and improvements in available supply.
Increasing demand for our Immunology products, with pro forma sales growth for immunoglobulin therapies and bio therapeutics of 10% and 19% respectively.
Expect U.S. Food and Drug Administration (FDA) decision for SHP465 in Attention Deficit Hyperactivity Disorder (ADHD) on or before June 20, 2017.
Completed enrollment in SHP643 open-label extension study; topline pivotal study results expected in Q2 2017.
Initiated Phase 3 trials for SHP640 and SHP620 in patients with bacterial and adenoviral conjunctivitis and cytomegalovirus infection, respectively.