Investors in the pharma/biotech sector eagerly wait for pipeline updates as they play an important role in deciding whether or not to invest in a particular company. These updates provide information on experimental drugs and at times give an insight into the commercial potential of the candidate once it is successfully developed and commercialized.
Shire plc (SHPG) recently announced that it has received a positive response from the European Decentralised Procedure for the use of attention deficit and hyperactivity disorder (ADHD) drug Elvanse in adults in three European countries – UK, Denmark and Sweden.
The drug is marketed as Vyvanse in the U.S. and approved in eight European countries for the treatment of ADHD in children and adolescents (aged 6 years or above), when response to previous methylphenidate treatment is clinically inadequate.
We note that Elvanse was accepted for review by the UK Medicines and Healthcare products Regulatory Agency in Feb 2014, based on positive results from four phase III studies designed to assess the efficacy and safety of the drug in adult ADHD patients.
We believe that geographical expansion of the drug will pave the way for incremental growth.
Shire holds a strong position in the ADHD market driven by key drugs like Vyvanse, Intuniv and Adderall XR. The primary growth driver of the company is Vyvanse, which generated sales of $1.1 billion in the first nine months of 2014. We are encouraged by Shire’s efforts for the label expansion of Vyvanse. The company is currently developing the drug for additional indications such as binge eating disorder in adults.
Meanwhile, Shire recently announced that it will acquire NPS Pharmaceuticals, Inc (NPSP) for approximately $5.2 billion to further strengthen its rare diseases portfolio.
Investors interested in the health care sector may consider other players such as Biodel Inc. (BIOD) and Sucampo Pharmaceuticals (SCMP).
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