By Ben Hirschler
NEW YORK (Reuters) - Shire Plc (SHP.L: Quote, Profile, Research, Stock Buzz), Britain's third-biggest drug maker, will at least double its sales of drugs for rare diseases by 2015, boosting group profit margins in the process, its chief executive said on Monday.
Angus Russell said the Human Genetic Therapies (HGT) unit -- targeting rare diseases that affect fewer than 50,000 patients worldwide -- would be a key driver for the company.
HGT sales are expected to total around $500 million this year, equivalent to some 15 percent of total Shire revenue, but will exceed $1 billion by 2015, by which time the business will be roughly the same size as its established hyperactivity drug franchise.
"We have a seven-year plan in Shire, and we see over this seven-year period that this (business) at least doubles. It becomes at least 30 percent to a third of our business," Russell told the Reuters Health Summit in New York.
Shire's CEO will lay out his plans for the HGT operation in detail at a seminar for analysts in Lexington, Massachusetts, on Tuesday.
The company is currently best known as a global leader in treating attention deficit hyperactivity disorder (ADHD). It also has medicines for gastrointestinal and other disease areas.
Russell said HGT was particularly attractive, given the very small sales force required to market often life-saving drugs, such as enzyme replacement therapy.
"You can have a 5 to 10 percent improvement in the operating margins in this kind of business" compared with typical returns in specialty pharmaceuticals, he said.
Shire's current HGT portfolio consists of Elaprase, a drug for Hunter syndrome; Replagal, for Fabry disease; and Firazyr, for hereditary angioedema.
PIPELINE PRODUCTS
But the company is also developing a pipeline of newer products, including velaglucerase for Gaucher disease, which could get to market in 2010, and a drug for metachromatic leukodystrophy, expected to launch around 2011.
Rivals in the space include Genzyme Corp (GENZ.O: Quote, Profile, Research, Stock Buzz) and Biomarin Pharmaceutical Inc (BMRN.O: Quote, Profile, Research, Stock Buzz).
By focusing on high-priced products for small groups of patients, Russell believes his company has found a "sweet spot" within a pharmaceutical market that is under growing pressure from generic competition and cutbacks in health spending.
Such products typically enjoy lengthy marketing exclusivities of between seven and 10 years, with limited scope for generics.
The drugs themselves are expensive but the small number of patients involved means the total cost to healthcare providers of dealing with serious illnesses is small. Continued...
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