Shares in Shire have moved higher after the pharmaceutical group gave an update on its replagal treatment and Morgan Stanley issued a positive note ahead of third quarter results next week.
Shire said it planned to file a licence application for replagal - its enzyme replacement therapy for Fabry disease - with the US Food and Drug Administration by the end of the year.
Meanwhile Morgan Stanley gave the company an overweight rating, and edged up its target price from £12 to £12.14. The bank said:
We estimate revenues for the third quarter of $650m, in line
with consensus of $650m.Over the last 6 months, significant risk has been taken out of the story. 1) We have greater visibility on the Adderall XR erosion curve now that generics have entered the market; 2) GlaxoSmithKline co-promote for Vyvanse offers upside potential; 3) Vyvanse market share gains have accelerated with the back to school season, with negligible substitution from generic Adderall XR; 4) Supply shortages of competitor products in the Human Genetic Therapies (HGT) space are allowing Shire to take market share for Velaglucerase (Gaucher's Disease) and Replagal (Fabry's Disease); 4) Launch of Intuniv (non-stimulant for ADHD) in the fourth quarter of 2009 will allow expansion of the company's ADHD franchise from 2010.
The stock is down around 10% from its recent highs in late September and we remain positive on the long-term potential of the HGT business, which we estimate could comprise 33% of earnings in 2014. We remain overweight and continue to like the stock on a longer-term view.
Shire is currently 12p higher at £10.35.
