By Denise Roland 

Shire PLC said sales increased 9% year-over-year to $1.72 billion in the fourth quarter of the year, largely due to strong revenue growth for its attention-deficit-hyperactivity disorder drug Vyvanse, though net income fell sharply due to a tough year-earlier comparison.

Dublin-based Shire's revenue growth has outpaced the broader industry at a time when cost-conscious U.S. payers are heaping pressure on drugmakers to lower their prices. That is because its treatments mostly target rare disease and have a significant impact on patients' quality of life, according to Chief Executive Flemming Ornskov. "I think we have the right strategy," he said. "In a potentially tough environment, we are well positioned."

The company's franchise in hereditary angioedema--a rare disease that causes sudden and potentially fatal swelling--is emblematic of the company's approach. The pair of drugs, Cinryze and Firazyr, notched growth of 23% and 22% in 2015. Shire said that growth was largely due to volume expansion, but that price increases also played a part.

Shire moved to expand its presence in rare diseases earlier this year with its $32 billion acquisition of Baxalta Inc., which specializes in treatments for hemophilia, a rare condition in which impairs the body's ability to stem bleeding by forming blood clots. It has said the deal will create the world's biggest maker of rare disease drugs and that the combined company could deliver $20 billion in product sales by 2020.

Even in more common conditions, such as ADHD, Shire raised prices to boost growth. In 2015, the company's best-selling ADHD drug Vyvanse generated $1.7 billion in revenue, up 19% from a year earlier. A company spokesman said around a third was due to price increases. Dr. Ornskov said the company behaved "reasonably in terms of price increases" and that payers rewarded companies that bring innovative drugs to the market.

Shire's net income fell 87% to $281 million, though the year-earlier figure of $2.2 billion was boosted by a $1.6 billion breakup fee from AbbVie Inc. Operating income, which strips out certain one-time items, increased 17% to $764 million, as revenue growth eclipsed increases in research and administrative expenses. The strong dollar cut into Shire's financial performance. At constant currencies, fourth-quarter revenue increased 12%, while operating profit climbed 19%.

The company said adjusted, diluted earnings per American depositary receipt increased 10%, or 14% at constant currencies, to $11.68 for 2015, beating earlier guidance that full-year profit would grow in the mid to high single digits.

Shares in Shire were down 0.67% at GBP35.44 on Thursday afternoon.

Dr. Ornskov said excluding the Baxalta acquisition, which hasn't closed, Shire would deliver double digit revenue growth and a 7-10% increase in adjusted, diluted earnings per ADS. He said the slight slowdown in earnings growth was due to planned investment in manufacturing capacity as the company prepares for a number of new drug launches.

Shire said it would pay investors an interim dividend of 22.16 cents per ordinary share, or 66.48 cents per ADS for the six months ended December 31. That brings the year dividend to 26.37 cents per ordinary share, up 15% from 2014.

Write to Denise Roland at Denise.Roland@wsj.com

 

(END) Dow Jones Newswires

February 11, 2016 10:43 ET (15:43 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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