An acquisition, a drug approval, and the release of year-end financial results constitute a busy week for any company. After completing all these undertakings, management at drug developer Shire Pharmaceuticals
For 2006, revenue was up 12% to $1.8 billion, led by $860 million in sales of its flagship attention-deficit hyperactivity disorder (ADHD) drug Adderall XR. Gross margins were flat at 86%, though that's still quite impressive. Operating cash flow gained 38%, and adjusted earnings hit $1.70 per American depository share.
Shire hasn't been afraid to make relatively large acquisitions in the past, and the big news this week was its decision to acquire partner New River Pharmaceuticals
Even before the New River acquisition, Shire has positioned itself as the most dominant force in the ADHD market, with a wide range of products. 2007 may see Shire launch as many as three ADHD drugs in the U.S. alone, if it can overcome FDA regulatory hurdles. How much these new products eat into its existing ADHD drug sales, versus stealing competitors' share of the market, is something investors should watch closely. Shire is only forecasting 4%-6% prescription growth in the indication.
Despite the cloudy financial outlook based on all these moving parts, Shire is nonetheless guiding for 2007 revenue growth of 20%. I wouldn't put too much stock into this estimate, though, since the market's acceptance of Vyvanse is still unknown.
With generic drugmaker Barr Pharmaceuticals
Barr is a Motley Fool Stock Advisor pick.
Fool contributor Brian Lawler does not own shares of any company mentioned in this article.