Irish drugmaker Shire PLC said on Wednesday that its product sales and revenue rose ahead of expectations in 2017, though it warned earnings per American depositary share in 2018 could be lower due to higher costs.
But Shire said earnings in the current year would be between $14.90 and $15.50, which at the midpoint is around 5 percent lower than consensus.
Shire lifted its total dividend for the year to 34.88 cents from 30.33 cents in 2016.
Product sales for 2018 are expected to total USD14.9 billion to USD15.3 billion, with royalites & other revenue coming in at between USD500 million to USD600 million.
Looking ahead, Shire said it expects non-GAAP diluted earnings per ADS growth to be lower than top line growth in 2018, mainly due to costs incurred from the start-up of its new United States plasma manufacturing site, intensifying genericization, and lower royalties. Of particular note are the strong performance of our Immunology franchise and the significant contribution from recently launched products, as well as growth in global markets.
Diluted earnings per ADS increased to USD14.05 in 2017, from USD1.27 in 2016 due to a higher tax benefit and higher operating income.
"The mid-term outlook for growth is positive driven by our Immunology franchise, multiple near-term launches, and global markets". The rare disease specialist, however, noted that it was committed to achieving its projected revenue target of between $17 billion and $18 billion in 2020.
But investors took fright at Shire's warning that competition from generic drugs, along with investment in a new factory, would eat into profit margins this year.
He said there are a number of elements to the numbers which should provide some solace. In addition, synergies which are being identified could lead to disposals which, in turn, may lead to benefits to shareholders.
Ornskov had said performance would be improved by creating two separate units, one focusing on small molecule pills that treat conditions like attention deficit hyperactivity disorder (ADHD) and the other on complex biologics for rare diseases.
Shares in Shire fell more than 2pc to £31.16 in early afternoon trading following the midday announcement.