For Shire, issues of taxes, takeovers, and clinical trials

Posted: June 19, 2014

Taxes, takeovers, and preschoolers are the topics of the moment with drugmaker Shire P.L.C., whose closing stock price reached an all-time high Monday.

With official headquarters in low-tax Ireland and operations in Wayne, Exton, and Lexington, Mass., Shire is the subject of takeover speculation. That's largely due to a recent trend of health-care companies trying to buy smaller outfits registered in Ireland and other countries to avoid higher U.S. corporate taxes, a move known as a tax inversion.

Reuters has reported that Citigroup is advising Shire, which has declined to comment. Shares on the Nasdaq closed Monday at $191.11; on Tuesday, the stock closed at $186.86. The tax interest might trump any concerns about Shire's main products.

Though it has tried to diversify through acquisitions, Shire generated nearly 41 percent of its $4.76 billion in 2013 revenue by selling three drugs to treat attention deficit hyperactivity disorder - Vyvanse, AdderallXR, and Intuniv. Of additional concern is that Vyvanse and Adderall contain amphetamines, which are controlled substances.

Most of Shire's ADHD revenue came from the United States, which allows more drug promotion than other developed nations and has a greater percentage of people diagnosed with ADHD - 25 times higher than the United Kingdom. The Centers for Disease Control and Prevention reported last fall that the percentage of children 4 to 17 taking medication for ADHD, as reported by parents, increased by 28 percent between 2007 and 2011.

Though its prescription-growth rate has slowed, Shire has increased its income as it gained Food and Drug Administration approval for expanded patient populations.

Shire's top-selling ADHD drug, Vyvanse, is approved only for those 6 and above. But licensed doctors can write prescriptions as they see fit.

Citing statistics from IMS Health, which tracks pharmaceutical sales, a Shire spokesperson said in an e-mail that nearly 400,000 ADHD prescriptions were written for children 5 and younger in the 12 months through April, of which 38,387 were for Vyvanse.

Last week, the FDA, after back-and-forth discussions, formally asked Shire to conduct clinical trials to test the safety and efficacy of Vyvanse on children 4 and 5.

"The FDA believes that drugs that could potentially be used in children need to be properly studied in them," FDA spokeswoman Stephanie Yao said in an e-mail. "It's important to get the necessary information about a product's safety, dosing, and efficacy for pediatric patients in the product labeling so that health-care providers can properly prescribe medicines and parents can monitor for side effects."

Vyvanse was approved for children 6 to 12 in 2007, adults in 2008, and teenagers 13 to 17 in 2010. Shire noted in its 2013 annual report that Vyvanse became the first drug in its class to be approved by the FDA for "maintenance treatment."

That can be a boon to a drug company because it can mean decades of sales to a single patient.

215-854-4506 @phillypharma

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