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Shire cuts sales outlook, ups profit forecast on Baxalta buy

August 3, 2017

Shire PLC (SHPG) lowered its full-year sales expectations Thursday as it braced for a new low-cost competitor to its ulcerative colitis drug Lialda.

However, the Dublin-based biopharmaceutical company brightened its profit outlook, due to better-than-expected cost savings from its $32 billion acquisition of Baxalta in 2016.

Shire said it now expected full-year revenue to come in at $14.3 billion to $14.6 billion, compared with earlier expectations of $14.5 billion to $14.8 billion.

It forecast non-GAAP (Generally Accepted Accounting Principles) diluted earnings per American Depository Receipt of $14.80 to $15.20 for the full year, versus its previous guidance of $14.60 to $15.20.

Shire posted net income of $240 million for the three months to June 30, compared with a $162 million loss a year earlier, when earnings were hit by costs related to its Baxalta purchase.

Revenue climbed 54% to $3.75 billion, largely reflecting a bigger contribution from products that were previously sold by Baxalta.

Analysts had expected net income of $768 million and revenue of $3.67 billion.

The year-earlier period only included around one month’s sales from Baxalta, which Shire formally acquired on June 3 in 2016.

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