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Shire to reveal extent of pressure from generic versions of its big sellers

Investors will also be keen to see more integration synergies from the addition of Baxalta.
Shire
Shire recently said it was mulling spinning off its neuroscience business

Blue chip drugs giant Shire Plc (LON:SHP) disappointed investors back in January when it backtracked on its promise to deliver revenues of US$20bn by 2020.

Investors will be hoping for something a little better when it reports its final results and the first full contribution of Baxalta, which Shire bought back in 2016 for US$32bn, should boost the numbers.

That could mask issues the druggie faces from generic competitors, with its ulcerative colitis drug Lialda and hereditary angioedema treatments expected to come under pressure in the near future.

The focus will, therefore, be on progress in the pipeline, while investors will also be keen to see more integration synergies from the addition of Baxalta.

Shire recently said it was mulling spinning off its neuroscience business – home to its attention deficit hyperactivity disorder blockbuster  - so keep an eye out for any extra details there.

Deutsche Bank expects underlying earnings per share on a constant currency basis to be up 15% year-on-year, driven by 7% pro forma product sales growth.

“Shire will experience pressure on growth from a full year of Lialda generics, and competitive pressure from Hemlibra on US Inhibitors sales in '18. Despite this, continued growth of new products (Xiidra/ Mydayis/Gattex/Natpara) and likely double-digit Immunology growth should ensure that product sales still grow in low single digits,” the German bank said.

“Although we expect [the] opening of the Covington plasma facility to pressure gross margin, this should be offset by cost savings as the year progresses, with synergies & deleveraging allowing for mid-single digit EPS growth. US tax reform is not expected to have a material impact on Shire's tax rate,” it added.

Full-year results from bottling company Coca-Cola HBC AG (LON:CCH) will be the first trading update since Zoran Bogdanovic became the chief executive officer (CEO). He took the helm in December after the death of previous CEO Dimitris Lois on October 2.

As a regional director responsible for operations in 12 countries and a member of Coca-Cola HBC’s operating committee since 2013 Bogdanovic should be regarded as a safe pair of hands and it will be interesting to see whether he announces any changes in strategy.

The UK is set to introduce a sugar tax on soft drinks in April so there may be some commentary on that.

UBS is predicting fourth-quarter organic net sales growth of 5.1% from the year before, driven by a better pricing mix across all regions but particularly emerging markets.

For the whole of 2017 UBS has forecast the clean earnings before interest and tax (EBIT) margin to improve by 106 basis points (100 basis points equals one percentage point) to 9.4% on the back of better cost efficiencies and pricing.

UBS has forecast earnings per share (EPS) of €1.22 for 2017, a couple of cents above the consensus forecast.

Deutsche Bank is going for full-year sales of €6.5bn; an EBIT margin of 9.6%; and EPS of €1.23.

Significant announcements expected

Finals: Shire PLC (LON:SHP); Coca-Cola HBC AG (Q4) (LON:CCH), Plus 500 Limited (LON:PLUS)

Interims: Galliford Try plc (LON:GFRD)

Economic data: US CPI; US retail sales


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