Shire Recalls Gaucher Drug Vpriv

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Shire Pharmaceuticals (SHPG) repositioned its business in 2013 undertaking a realignment program with strategic focus on rare diseases and greater operational discipline.

Shire holds a strong position in the attention deficit and hyperactivity disorder (ADHD) market driven by key drugs like Vyvanse, Intuniv and Adderall XR.

Shire also has drugs for ulcerative colitis and hereditary angioedema in its portfolio. However, the company recently suffered a setback when it announced the initiation of a voluntary recall in one batch of Gaucher disease drug Vpriv in the U.S.

The recall is due to the presence of visible particulate matter in certain vials of Vpriv which was identified as stainless steel and barium sulfate. The company announced that the recalled lot should not be used.

This particulate matter was found in a small number of vials in the three packaged lots of Vpriv.

Shire identified the root cause of the particulate matter as the finishing process at the third party supplier.

However, Shire believes there is very low safety risk in such vials but there is a slight possibility of rare but serious adverse events associated with particulate containing barium sulfate.

We believe additional lots being recalled will be a cause of concern for Shire. Vpriv generated sales of $342.7 million in 2013. Hence, we expect investor focus to remain on additional recalls of Vpriv by Shire if any.

We remind investors that Sanofi’s (SNY) Genzyme (Sanofi acquired Genzyme in 2011) also faced manufacturing issues with its Gaucher drug Cerezyme.

The U.S. Food and Drug Administration’s (:FDA) inspections at the Allston facility in 2010 resulted in a warning letter to Genzyme citing manufacturing deficiencies. Thereafter, Genzyme entered into a consent decree with the FDA relating to the facility at Allston.

Genzyme is currently working on resuming normal supply of the products that were affected by manufacturing issues. In Apr 2011, the company submitted a remediation plan to the FDA. According to the plan, the remediation of the Allston plant is expected to continue until 2016.

Shire currently carries a Zacks Rank #1 (Strong Buy). Right now, stocks like Salix Pharmaceuticals (SLXP) and Questcor Pharmaceutical (QCOR) look equally attractive. Both carry a Zacks Rank #1.

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