Shire's new Baxalta hemophilia meds drop the ball in first combined quarter


Shire spent six months and $32 billion working snag Baxalta and its hemophilia-heavy portfolio. But in the first full quarter post-close, those meds didn’t live up to their billing.

Hematology products sank by 6% to generate $884 million in Q3, Shire said Tuesday, noting that the timing of some large orders affected the revenue tally. That shortfall dragged down total product sales, which came in 3% below consensus estimates, according to Jefferies analyst Peter Welford.

Baxalta has leaned heavily on its hemophilia assets ever since parent company Baxter spun it off. Last December, Bernstein analyst Ronny Gal estimated that about 70% of the company’s operating profit was coming from its products in that field.

That’s one reason Gal, among others, was confused by Shire’s dogged pursuit of the Illinois pharma in the first place. “Success of alternative approaches” to hemophilia treatment “could devastate its business," he wrote, predicting that 40% or so could take a direct hit.

Those "alternative approaches" are well underway. Five drugmakers--including Alnylam, which boasts an RNAi therapeutic, and Roche, which is working on its own first-in-class antibody--have advanced to the clinic with programs that are administered subcutaneously and less frequently, and bear a reduced risk of forming inhibitors.

That’s not to say things will hold steady for Shire between now and when those products hit the market. On the contrary, Express Scripts--which often puts the squeeze on pricey drugs to control costs--said it would be looking for ways to cope with the rising costs of hemophilia meds, another bit of news that sent Shire’s shares south.

The Dublin drugmaker’s CEO, Flemming Ornskov, isn’t worried, though. With drug pricing, which has become a U.S. presidential campaign issue, at the forefront this year, he expects to see “tighter management” from PBMs in “all our categories.” But the way he sees it, Shire has “the programs in place to make sure this does not affect our patients and has limited impact on our overall business.”

"I remain incredibly confident about the outlook for hemophilia," he told Reuters.

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