Bid rumours drive up FTSE 100 drugmaker Shire (SHP) by 2.4% to £24.43 following press reports of a potential takeover by a US firm.
The UK pharmaceutical group declines to comment on reports that it has hired investment bank Lazard to work alongside Morgan Stanley and Deutsche Bank in defending the company from a hostile bid from an unnamed player from across the Atlantic, says The Sunday Times.
A closer look at Shire shows why companies looking to strengthen their product portfolios could target the £13.4 billion cap. Six of its top 10 products generated double-digit growth in the second quarter, with attention deficit hyperactivity disorder (ADHD) treatment Vyvanse growing 13% ahead of the market. The drug accounts for a quarter of the group’s sales in a market where analysts at Charles Stanley claim growth has slowed to 6%.
Management expect sales growth for the full-year to hit the mid-to-high single digits, revising its earlier forecast of some 10%. Its pre-tax profits are expected to rise to £909 million, up from £686 million in 2012, according to consensus forecasts.
A potential suitor may want the group for its pipeline. Management are increase investment in research and development by double digits. Its treatments seek to tackle conditions such as dry eye disease and binge eating, which are currently in Phase III clinical trials.