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Shire's Third-Quarter Earnings Top Forecast

Britain's Shire beat forecasts with a 32 percent rise in third-quarter underlying earnings on Thursday and said its new hyperactivity drug, Vyvanse, had been well received by doctors and patients.

Shares in Britain's third-biggest drugmaker jumped as much as 4.4 percent after it also raised its forecast for 2007 revenue growth to at least 30 percent from at least 25 percent.

Chief Executive Matthew Emmens told reporters recently launched medicines now accounted for 23 percent of product revenues, with drugs such as Lialda for ulcerative colitis and Elaprase for Hunter syndrome, a rare inherited disorder, performing particularly well.

Underlying earnings per American Depository Share were 66.3 cents in the three months to Sept. 30, compared with an average forecast of 61 cents in a Reuters poll of eight analysts.

Revenues leapt 35 percent to $608.7 million, versus analysts' average forecast of $582 million, and led by strong sales of Adderall XR, Shire's current market-leading treatment for attention deficit hyperactivity disorder (ADHD).

Key to Shire's future is switching patients onto Vyvanse before Adderall XR faces generic competition from April 2009.

Sales of Vyvanse totaled $10.6 million in the third quarter, and Emmens said it had captured 4.1 percent of the U.S. ADHD market by Oct. 19, taking about 1.6 percent of market share from Adderall XR and the rest from competitors such as Johnson & Johnson's Concerta.

Potential

Some analysts have been disappointed with Vyvanse's launch, noting the switch to Adderall XR is going more slowly than the corresponding move to once-daily Adderall XR from its predecessor, Adderall.

But Landsbanki analyst Shawn Manning was relaxed, saying the key point was that Shire's overall share of the U.S. ADHD market had continued to increase -- to over 30 percent.

"They have time and flexibility and, based on Shire's past record, if it wants to switch a drug it can," he said.

Emmens said Vyvanse was a new chemical entity, aimed at taking sales from competitors as well as Adderall XR, and so it could not be compared with the launch of Adderall XR, which was just an improvement of an existing drug.

"Although the uptake is going slower, we think this (Vyvanse) has a greater sales peak (potential) than Adderall XR," he said on a conference call.

Shire shares were up 0.3 percent at 1,205 pence, outperforming a 1.7 percent fall on the UK's benchmark FTSE-100 index and valuing the business at about 6.6 billion pounds ($13.74 billion).

The stock has outperformed the DJ Stoxx European healthcare index by 22 percent this year and trades at about 26 times 2008 earnings forecasts, well above bigger rivals such as GlaxoSmithKline and AstraZeneca, both on about 12, according to Reuters data.

Landsbanki's Manning kept a "hold" rating on the stock, with a price target of 1,160 pence.