Matthew Emmens, CEO Shire plc September 20, 2007investors.shire.com/~/media/Files/S/Shire-IR/...Sep...
Transcript of Matthew Emmens, CEO Shire plc September 20, 2007investors.shire.com/~/media/Files/S/Shire-IR/...Sep...
Merrill Lynch conference
Matthew Emmens, CEOShire plcSeptember 20, 2007
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THE “SAFE HARBOR” STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Statements included herein that are not historical facts are forward-looking statements. Such forward-looking statements involve a number of risks and uncertainties and are subject to change at any time. In the event such risks or uncertainties materialize, Shire’s results could be materially affected. The risks and uncertainties include, but are not limited to, risks associated with: the inherent uncertainty of pharmaceutical research, product development, manufacturing and commercialization; the impact of competitive products, including, but not limited to the impact of those on Shire’s Attention Deficit and Hyperactivity Disorder (“ADHD”) franchise; patents, including but not limited to, legal challenges relating to Shire’s ADHD franchise; government regulation and approval, including but not limited to the expected product approval date of INTUNIV™ (guanfacine) extended release (ADHD); Shire’s ability to secure new products for commercialization and/or development; Shire’s ability to benefit from its acquisition of New River Pharmaceuticals Inc.; the successful development of JUVISTA® (human TGFβ3) and other risks and uncertainties detailed from time to time in Shire plc’s filings with the Securities and Exchange Commission, particularly Shire plc’s Annual Report on Form 10-K for the year ended December 31, 2006.
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Introduction
Continue to execute on strategy effectively
Excellent half year results
Revenue growth accelerating with new product launches - (up 30% for H1 2007 on previous year)
Upgrading revenue growth guidance to at least 25% (previous guidance low 20% range)
VYVANSE Launch – rapid uptake
Good progress in strengthening our R&D pipeline
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Q2 Financial Highlights
Product sales up 34% to $504 million
Total revenues up 31% to $575 million
Net cash provided by operating activities up 33% to $183 million
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Total Revenues
Q2 07 Q2 06 Growth$m $m %
Product Sales 504.2 376.0 34%
Royalties 64.0 60.4
Other Revenue 6.7 2.7
Total Revenues 574.9 439.1 31%
* New launches contributed 13% to product sales in Q1 2007
Q2 07 Q2 06 Growth$m $m %
Product Sales 81% 410.2 369.8 11% (excl. new launches)
ELAPRASE 42.7 -DAYTRANA 19.9 -FOSRENOL US 19%* 15.5 5.9FOSRENOL EU 9.0 0.3LIALDA 5.0 -DYNEPO 1.9 -
Product Sales 100% 504.2 376.0 34%
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Financial Ratios
(on a non-GAAP basis)
Q2 07 Q2 06 HY 07
COGS : Product sales 14% 12% 14%
Gross margin 86% 88% 86%
R&D : Revenues 16% 16% 16%
SG&A (excl. D&A) : Product sales 49% 51% 47%
EBITDA margin 29% 30% 31%
This slide contains non GAAP financial measures. They exclude intangible asset amortization charges, the accounting impact of share-based compensation and the effect of certain cash and non-cash items, both recurring and non-recurring, that Shire's management believes are not related to the core performance of Shire’s business.
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Q2 2007 HighlightsNew River acquisition
JUVISTA license agreement with Renovo
$1.1 billion convertible bond
ADHDVYVANSE
Launched July 2 – 2.8% market share*
sNDA for adult indication filed during the quarter
INTUNIV (SPD503) – Approvable letter received
SPD465 – Approvable letter received
GILIALDA
Launched in Q1
Latest weekly market share – 8.7% of NRx and 6% of TRx *
Very positive reaction from patients and physicians
SOURCE: IMS NGPS – as at September 7, 2007
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Portfolio Highlights
Human Genetic TherapiesELAPRASE
Now available in 33 countries
REPLAGAL
Approved in 41 countries;
REPLAGAL sales continue to show significant growth with new patients starting therapy through in European markets as well as through geographic expansion into Canada, Latin America and Japan;
GA-GCB
Phase 3 clinical program consisting of 3 trials is currently enrolling patients
Renal FOSRENOL
Now available in 21 countries
Launched in Italy, Canada, and Slovak Republic
DYNEPO
Launched in Germany, UK, Ireland and Italy
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0
2
4
6
8
10
12
14
16
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
Actual TRx NRx Share TRx Share
Actual TRx 1 3 7 9 12 14
NRx Share 0.8% 3.7% 5.9% 6.6% 6.9% 8.1%
TRx Share 0.3% 1.4% 2.7% 3.6% 4.4% 5.4%
March April May June July Aug
LIALDA – Good launch uptake Monthly Rx
Source: IMS NGPS
Rx
(000’s)
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JUVISTA - (human recombinant TGFβ3)
Phase 2 Clinical Trial 0050 Highlights
Trial meets its primary endpoint and is highly statistically significant (p<0.0001)
Demonstrates clinical efficacy of Lonza manufactured, microbiallyderived, drug substance, proposed to be used in Phase 3 trials and commercial supply
Supports 200ng/100�l/linear cm of wound margin as an appropriate dose for Phase 3 studies and establishes a broad response range (50-500ng)
Fifth statistically significant Phase 2 efficacy trial reported for JUVISTA
VYVANSE – Launch update
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VYVANSE is positioned as a new class of ADHD medication not just a replacement to AXR
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Key attributes to support VYVANSE as an NCE in a new class
The first Pro-drug Stimulant
Consistent time to maximum concentration of d-amphetamine from patient to patient
Significant efficacy throughout the day, even at 6:00 PM
Adverse event profile that is mild to moderate in severity and incidence decreases over time
Significantly lower abuse related liking effect than an equivalent oral dose of d-amphetamine
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0
4000
8000
12000
16000
20000
24000
06-Jul13-Jul
20-Jul27-Jul
03-Aug10-Aug
17-Aug24-Aug
31-Aug
Weekly Coupon Redemptions
Weekly RX Data
Weekly TRxs are separating from weekly coupon redemptions demonstrating that patients are refilling
SOURCE: IMS Daily Rx & PSKW
• Every redeemed coupon is accompanied by an Rx
• Only one coupon (30 capsules) can be redeemed per patient
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-1.00%
+2.90%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
6/22 6/29 7/6 7/13 7/20 7/27 8/3 8/10 8/17 8/24 8/31
Adderall XR Vyvanse Concerta Strattera Generic MPH Generic AMPH
SOURCE: IMS NGPS - Universe
VYVANSE is taking market share from all products in the ADHD category, not just ADDERALL XR
Rx Share Change by ADHD ProductSince VYVANSE Launch
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VYVANSE patients are coming from AXR and other brands
5,335 patients started on VYVANSE have enrolled and completed baseline surveys
87% had used a prescription for ADHD prior to VYVANSE
42%
13%11%
34% AXRConcertaFocalin XROther
Source: VYVANSE New Start Patient Experience program
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n=125
Very severe interference
No Interference
Level of Interference
3.5
3.6
3.8
3.4
6.1
6.7
6.0
6.2
1 3 5 7 9
Social Interactions
Homework
Family Interactions
School Activities
Before VYVANSEWith VYVANSE (average 33 days)
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No interference Very severe interferencen=125
With use of VYVANSE, ADHD interfered significantly less with life’s activities among children previously using ADDERALL XR
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Back to School is not a one-two week event; It runs through October
ADHD Market (IMS NGPS)Weekly TRx Volume
2007 actual through 9/7/2007 (week 36)
450
500
550
600
650
700
750
800
850
Wk 1 Wk 3 Wk 5 Wk 7 Wk 9Wk 1
1Wk 1
3Wk 1
5Wk 1
7Wk 1
9Wk 2
1Wk 2
3Wk 2
5Wk 2
7Wk 2
9Wk 3
1Wk 3
3Wk 3
5Wk 3
7Wk 3
9Wk 4
1Wk 4
3Wk 4
5Wk 4
7Wk 4
9Wk 5
1
TRxs
in 0
00's
ADHD- 2007 ADHD- 2006
"Back to School" season
Vyvanse launch in July
2007
Labor Day Holiday
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Successor Molecules (Lexapro, Nexium) follow a different pattern than line extensions such as AXR
Successor Molecule Launch% Conversion of Original Brand & Generics (based on TRx volume)
% Conversion = New Product TRx/ (New Product TRx + Original Brand TRx + Generic of Original TRx)
0%
10%
20%
30%
40%
50%
60%
70%
80%
Month 1Month 2Month 3Month 4Month 5Month 6Month 7Month 8Month 9Month 10Month 11Month 12Month 13Month 14Month 15Month 16Month 17Month 18Month 19Month 20Month 21Month 22Month 23Month 24
% C
onve
rsio
n
LEXAPRO NEXIUM VYVANSE ADDERALL XR
Nexium
Lexapro
Vyvanse
Adderall XR
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Managed Care update
Coverage is progressing as planned:
6-9 month post-launch review period on adding new products to formulary is common
All targeted plans have received clinical information on VYVANSE
Negotiations with numerous plans are progressing
Parity with AXR formulary status expected by 18 months
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Managed Care Tier Status has only modest impact on share in ADHD
9.2% 10.0% Strattera
19.9% 22.8%Concerta
25.3% 28.1%Adderall XR
Tier 3Tier 2
Source: IMS PlanTrak June 2007
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Summary
VYVANSE rapid launch uptake
Tracking in line with the industry’s best successor molecule launches
Patients starting on coupons are refilling Rxs
Back to school is not a one-two week event, but lasts at least two full months
Physicians and Patients are providing very positive feedback on their clinical experience with VYVANSE
Coverage is progressing as planned
VYVANSE has tremendous growth potential beyond 2009
Very strong IP
Europe
Potential for other indications
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Strong market exclusivity for growth drivers
2012
2016
2018
2020
2023
2012
2010
2012
2013
2009
2000 2005 2010 2015 2020 2025
DYNEPO
ELAPRASE*
FOSRENOL
LIALDA^
VYVANSE
Patent Life Regulatory Exclusivity
^ Currently no generic approval pathway for locally acting drugs*Orphan Drug
EU 2017
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Shire has one of the strongest late-stage pipelines in the Specialty Pharma sector
20102007 20092008 2011-2015
ProductLaunches
Eight potential launches over a 30 month period from 2006-2008
* Approvable letter received
VYVANSE
DYNEPO
LIALDA / MEZAVANT
INTUNIV*
SPD465*GA-GCB
ELAPRASE CNS
SANFILIPPO
MLD
CEPO
SPD493
JUVISTAFOSRENOL - CKD
FOSRENOLEU
ELAPRASE EU
DAYTRANA EU
Seasonique
VYVANSE EU
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Business Development Strategy – What’s Next?
Specialty biopharmaceutical company
Seek drugs with strong competitive position and intellectual property
Address the needs of the specialist physician
Treatment of symptomatic disorders
Concentrate resources on lower-risk projects with relatively fast development timelines
Small and efficient sales forces
In-license/acquire products with potential peak sales of $300 - $500 million
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Concluding Remarks
2007 guidance upgraded as revenue growth accelerates revenue growth to be at least 25% for 2007 (previous guidance low 20% range)
Excellent H1 ‘07 results Successful ongoing launches
Continuing to demonstrate our ability to execute
VYVANSE rapid launch uptake – 2.8% market share*
ELAPRASE – rapid uptake in US and EU
LIALDA – 8.7% NRx, 6% TRx*
FOSRENOL – strong start in Europe
DYNEPO – launched in Q1 2007, good reception
Good progress in strengthening our R&D pipeline
SOURCE: IMS NGPS – as at September 7, 2007
Questions and Answers
All