Not Your Typical Product Recall

If you're looking for a story on unsafe Chinese-manufactured, radioactivity-oozing, lead-painted toys ... this isn't it. Click here for something in that genre. And know that drugmaker Shire (Nasdaq: SHPGY  ) has joined the likes of Mattel (NYSE: MAT  ) and RC2 (Nasdaq: RCRC  ) in recalling a product directed at children. But there's no reason to cry.

Shire is best known for marketing attention deficit hyperactivity disorder (ADHD) compound Adderall XR. It also sells other ADHD treatments such as the recently approved Vyvanse.

ADHD patch Daytrana -- which partner Noven Pharmaceuticals (Nasdaq: NOVN  ) developed and manufactures -- is the source of Shire's product recall. Daytrana works just like the nicotine patches you can get at the corner store, but instead delivers a dose of a potent ADHD drug.

The main ideas behind using a patch rather than a pill for some children with ADHD is that it will increase compliance and improve how much drug gets absorbed into the bloodstream.

Shire decided to initiate the recall of $4 million to $6 million worth of Daytrana patches not because of safety issues like with the toy manufacturers, but rather because of difficulty some parents and caregivers were having in unpeeling the backing from the patches.

In the scale of product recall seriousness, this is definitely at the bottom end of things and Shire and Noven have announced that they have already taken steps to "improve ease of use of the patch."

After barely more than a year on the market, Daytrana sales were $20 million in the most recent quarter. With a total of $575 million in revenue in the second quarter, Daytrana is only a small slice of Shire's financial success.

For Noven though, Daytrana represents the small drug developer's most promising compound and biggest opportunity for revenue growth. Fortunately, this product recall won't be such a big deal to the drugmaker.

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 536211, ~/Articles/ArticleHandler.aspx, 10/21/2016 4:45:41 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 4:00 PM
SHPG $184.40 Down -3.89 -2.07%
Shire CAPS Rating: ***
MAT $32.75 Up +0.28 +0.86%
Mattel CAPS Rating: ****
NOVN $16.47 Down +0.00 +0.00%
Noven Pharmaceutic… CAPS Rating: ***
RCRC.DL $0.00 Down +0.00 +0.00%
RC2 Corp CAPS Rating: ****