Is Shire worth a 25% premium?

Can Shire weather the upcoming loss of Adderall XR to the off-patent wildnerness? Company execs say it can: They point out that 60 percent of the company's revenues derive from other products. And they say Vyvase, their new ADHD med, will pick up the Adderall slack--despite the fact that its uptake so far hasn't met expectations. But as Barron's points out, Shire is trading now at 15 times earnings, a 25 percent premium to the current industry multiple of 12 times. If the FDA doesn't listen to Shire's petition--which calls for XR copycats to undergo clinical trials--then generics will hit the market next year. And if Vyvanse doesn't step up to the plate, "Shire wouldn't merit its 25 percent premium," Barron's bluntly states. That's a lot of "ifs"--on either side.

- see the Barron's analysis

Suggested Articles

Alnylam is ready to follow on its Onpattro launch with an FDA nod for Givlaari. But the drug's safety profile is giving analysts reason to pause.

FDA nominee Stephen Hahn faced questions from Senators on Wednesday on topics including drug pricing, biosimilars, opioids and more.

BMS’ Opdivo-Yervoy combo been game-changing in late-stage melanoma. But when it comes to expanding the pair’s reach, the company has hit a roadblock.