SHPGY Finds New Star in Vyvanse

Shire PLC (SHPGY - Snapshot Report) is a specialty pharmaceutical company focused on 3 therapeutic areas: Central nervous system (CNS), gastro intestinal (GI), and renal disorders. The company's ADHD franchise continues to perform very well, increasing market share to 33%. Strong topline growth in 2008 will reverse in 2009 due to the presence of generic Adderall XR.

Going into 2009 we expect a modest foreign exchange headwind for some of Shire's products. This, along with Adderall XR sales dramatically falling, should result in 2009 revenues falling by about 4% versus 2008. For the full-year 2008 we look for EPADR of $3.77, representing 39% growth over 2007. We expect EPADR to average a CAGR of 6% over the next 5 years through 2013.

Longer-term sales growth will materialize as Vyvanse and other new drugs fill the hole left by generic Adderall XR. Vyvanse, the company's new flagship ADHD product, continues to perform well and will be the key driver of the topline. Strong ramp of Vyvanse will push revenue up over 20% in 2008. We maintain our Hold rating with a price target of $48 per ADR.

Jason Napodano, CFA, contributed to the report.

Read the full analyst report on SHPGY