Friday, July 31, 2015

Trying to fend off AbbVie, Shire says it will double revenue by 2020

Drugmaker Shire Plc., which is trying to fend off a $46.5 billion takeover offer from AbbVie, told investment analysts in a Monday conference call that it hopes to double its revenue by 2020.

Trying to fend off AbbVie, Shire says it will double revenue by 2020

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Adderall is among the ADHD medicines made by Shire.
Adderall is among the ADHD medicines made by Shire.

Drugmaker Shire Plc., which is trying to fend off a $46.5 billion takeover offer from AbbVie, told investment analysts in a Monday conference call that it hopes to double its revenue by 2020.

Shire is based in Ireland, but has operations in Wayne and Exton.

The Irish base is at least part of the reason that Shire is being pursued by AbbVie. Companies, especially in healthcare, have been scrambling of late to buy other companies so they can re-register in Ireland, which has lower corporate tax rates than the United States. Relatively few employees move to Ireland in such acquisitions. In the language of accounting, this is called tax inversion.

Shire chief executive officer Flemming Ornskov tried to make the case that Shire has done very well as a standalone company in the 13 months he has been in that position and that it might continue to do so. The Shire board said the Abbvie offer undervalued Shire.

Ornskov called Monday's plan and presentation 10x20, meaning Shire would increase its 2013 total revenue of nearly $5 billion to $10 billion by 2020.

Ornskov was asked about further cost-costing, but he declined to specify other than to say Shire would continue efforts to be as efficient as possible.

Shire gets nearly 41 percent of its current revenue from three drugs approved to treat attention deficit hyperactivity disorder. One of its hopes for future revenue growth is that the FDA will approve a new formulation for adult ADHD.

A Shire investor release with lots of hopes and projections for drugs can be found here.

AbbVie was spun out of Abbott Laboratories, with Abbott using the original name on its medical device unit. The AbbVie press release from Friday, June 20 is here.

 

 

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About this blog
David Sell blogs about the region's pharmaceutical industry. Follow him on Facebook.

For Inquirer.com. Portions of this blog may also be found in the Inquirer's Sunday Health Section.

Reach David at dsell@phillynews.com.

David Sell
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