How Shire’s Robust Pipeline Could Drive Its Valuation



Shire’s pipeline

After the completion of the Baxalta acquisition, Shire (SHPG) will have 50 inline and pipeline products and programs, which is higher than any other company. The joint entity is expected to earn $20 billion in product sales by fiscal 2020. The company’s pipeline includes ~14 phase three or ready-to-enter phase three programs under SHPG’s pipeline. We’ll discuss recent updates for the pipeline in this part of the series.

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SHP465 completed its phase three clinical study for the indication of ADHD in children and adolescents between six and 17. On April 4, 2016, SHPG announced positive phase three results for the 305 studies run for the molecule. These results will be added to the existing data set for SHP465 followed by a class two resubmission for FDA (Food and Drug Administration) approval. The resubmission is expected to take place by the end of fiscal 2016. The drug could potentially launch by the second half of 2017.

SHP621 and SHP625

These two pipeline molecules won “Breakthrough Therapy Designation” from the FDA. SHP621 and SHP625 are being investigated for the treatment of rare diseases eosinophilic esophagitis (or EoE) and progressive familial intrahepatic cholestasis type 2 (or PFIC2), respectively. As per Shire, EoE prevalence is 15–55 cases per 100,000 people, whereas PFIC affects one in 50,000–100,000 births. To understand the key events for the company in fiscal 2016, please refer to What Are Shire’s Major Valuation Drivers in Fiscal 2016?

To get exposure to Shire and control excessive company-specific risks, investors can choose to invest in the PowerShares International Dividend Achievers Portfolio (PID). Shire accounts for 0.14% of the fund’s total holdings. Other major fund holdings include Novartis (NVS), Sanofi (SNY), and Teva Pharmaceuticals (TEVA).

In the next article, let’s have a look at Lifitegrast, which could launch in 2016.


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