Shire ($SHPG) CEO Flemming Ornskov has introduced a host of changes at the Ireland-based drugmaker since taking up the reins almost a year ago--and so far, they seem to be paying off. On Thursday, the company announced fourth-quarter earnings that handily beat market forecasts and predicted that growth will build in the year to come.
|Flemming Ornskov, CEO of Shire|
Non-GAAP earnings per American Depositary Share soared 36% for the quarter to hit $2.26, with revenue climbing 12% to reach $1.33 billion. That rounded out a 2013 that saw a 23% jump in non-GAAP diluted earnings per ADS, growth the company said it would post again in 2014 at "a similar level."
Ornskov credited the gains to Shire's "sharpened strategic focus and strong operational discipline," both of which he has worked to strengthen since stepping into the CEO role. He's combining the company's R&D arms into one business to reduce overlap, a restructuring program dubbed "One Shire."
"We've simplified and unified our structure to One Shire, enabling better team working, faster decision-making and tighter cost management to drive improved margins," Ornskov said in a statement.
As part of its reorg blueprint, the company has prioritized specialty pharma in its clinical work and M&A. To that end, Shire recently nabbed rare-disease drugmaker ViroPharma in a deal expected to boost earnings by 7% for the remainder of 2014. Rare diseases is just one area the once-ADHD-focused company has worked to expand as of late; it's also carving out niches in ophthalmology and dermatology, to name a couple.
That's not to say ADHD is out of the picture for Shire; on the contrary, blockbuster drug Vyvanse's sales swelled 29% in the fourth quarter to tally $330 million. But as Reuters reports, Ornskov said its latest "back to school" campaign for the drug was a success but not a "resounding success," leading the company to devote further resources to developing the drug--which recently failed as a depression crossover--as a binge-eating treatment.
More changes are on the way, too, at least as far as leadership is concerned. Along with earnings, on Thursday Shire announced the departure of CFO Graham Hetherington, who will be leaving March 1. Senior Vice President and Group Financial Controller James Bowling will step in as interim CFO during a "worldwide" search for his successor. It's the second switch-up at the top for the drugmaker in as many months; in January, Shire tapped Susan Kilsby to be its new chairwoman in place of the retiring Matthew Emmens.
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