Shire Plc (LON:SHP) saw its shares drop today as it backtracked on a key target and said it plans to separate its rare disease and hyperactivity medicines businesses before deciding later this year whether to spin off the latter into a separately listed group.
In a business update, delivered at the 36th Annual J.P. Morgan Healthcare Conference, the FTSE 100 listed company said its total revenue would reach US$17bn-18bn a year by 2020, a downgrade of its previous estimate of achieving US$20bn in revenue by that date, a forecast it made two years ago when it acquired Baxalta.
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Shire also said that following a review it had decided its neuroscience business, which makes the attention deficit hyperactivity disorder (ADHD) blockbuster Vyvanse, warranted additional focus and investment.
The pharma group’s chief executive Flemming Ornskov said. "Shire has undergone a significant transformation over the last five years creating two market-leading businesses with distinct profiles and future needs,"
He added: "Our new Rare Disease and Neuroscience Divisions will be well positioned for growth, profitability, innovation, and serving the needs of patients."
The CEO concluded: “We are also pleased with our continued progress on delevering and will now be targeting a Non GAAP Net Debt to EBITDA ratio of below 2.5x by the end of 2018.”