After dismissing three escalating takeover bids from AbbVie ($ABBV) as too cheap, Shire ($SHPG) is promising to double its annual sales by 2020, touting its pipeline as a blockbuster farm best tended without outside meddling.
AbbVie's most recent offer totaled $46.5 billion in cash and stock, a sum that "fundamentally undervalued Shire and its prospects," the company said in its rejection. However, that refusal--and the two that preceded it--took place outside the public eye and unbeknownst to a great many investors to whom $78.87 a share might not sound so bad, and AbbVie is said to be retooling for another, larger offer, putting pressure on Shire to make the case for independence.
So that's just what the Irish drugmaker is doing, saying it has the pipeline assets to rake in $10 billion in revenue by 2020, doubling its 2013 haul thanks to "a focused strategy, a high-performing management team and a lean operating model," the company said.
About $7 billion of that whole is linked to on-the-market products like the ADHD treatment Vyvanse and rare disease therapy Firazyr with the remaining $3 billion picked up by in-development therapies. Shire believes its pipeline has a cumulative peak value of $7 billion, led by the under-FDA-review lifitegrast, a dry-eye treatment Shire believes can eventually bring in $1 billion a year on its own. Behind that, the company believes LUM001 and LUM002, two liver treatments netted in its $260 million deal for Lumena Pharmaceuticals, will peak at $3 billion total.
|Shire CEO Flemming Ornskov|
Perhaps most notable: That $10 billion 2020 figure doesn't include any potential M&A or licensing deals, Shire said. CEO Flemming Ornskov has presided over 6 acquisitions in his 14 months on the job, including a $4.2 billion buyout of rare disease specialist ViroPharma, and future buyouts "will clearly add growth to the profile," he told Reuters. "If I included that in the upside, it would be way north of $10 billion."
Shire's rosy forecast takes a cue from AstraZeneca ($AZN), which successfully--for now--writhed away from Pfizer ($PFE) and its $118 billion advances by pledging to follow through on a promising pipeline and boost sales 75% over 10 years, reaching $45 billion by 2023.
Meanwhile, analysts have suggested the acquisition-inclined Shire look to M&A of its own to scare off would-be acquirers. Names like Sarepta Therapeutics ($SRPT) and Prosensa ($RNA), makers of promising treatments for Duchenne muscular dystrophy, have been bounced around as potential targets, as has ThromboGenics, maker of the eye drug Jetrea, which announced earlier this year that it was looking into strategic alternatives.
- read Shire's release
- here's the Reuters story