FDA Green-Lights ADHD Drug Vyvanse as Shire Releases Strong FY2006 Results

Vyvanse Approved in U.S.

Development partners Shire plc (U.K.) and New River Pharmaceuticals (U.S.) have received an approval from the U.S. FDA (Food and Drug Administration) for their attention deficit hyperactivity (ADHD) drug Vyvanse (lisdexamfetamine dimesylate). The FDA submitted a proposal to the U.S. Drug Enforcement Agency (DEA) that Vyvanse be classified as a Schedule II controlled substance. The DEA has accepted this proposal, but requires a 30-day period of public comment prior to its final scheduling decision on the drug. Once this has elapsed, Shire is anticipating a U.S. market launch for Vyvanse before the end of the second quarter. Vyvanse will be available in 30-mg, 50-mg and 70-mg once-daily doses, and is widely seen as the follow-up drug to Shire's blockbuster ADHD drug Adderall (dextroamphetamine plus levoamphetamine). In fact, Shire's CEO Matthew Emmens has said that "Shire will make Vyvanse our top promotional priority within our ADHD portfolio". Last week, Shire announced that it was acquiring New River for some US$2.6 billion, with a view to securing all global rights to Vyvanse (see United Kingdom: 21 February 2006: Shire Acquires New River Pharmaceuticals).

FDA Guidelines Could Affect New Drug

Last week, the FDA posted draft guidelines on its website, which indicated that the organisation is asking producers of ADHD drugs to add information to their package inserts, warning patients about potential risks and side-effects associated with their products (see United States: 22 February 2007: FDA Requests New Medication Guides for ADHD Drugs). Shire is already affected by the new guidelines, through Adderall, which will need to have a medication guide included with every pack, focusing on the risks associated with ADHD drugs and ways to prevent potential problems. Vyvanse will also need to carry a medication guide, although it is highly unlikely that Shire or the FDA will demand that the drug's market launch be held back until the guide has been written, given that ADHD drugs already on the market are not having their sales suspended while their producers develop their own guides.

More ADHD Pipeline Activity Ahead after Fruitful 2006

The U.S. regulatory approval of Vyvanse comes just after Shire released its full-year and fourth-quarter financial results for 2006, with largely encouraging data. Full-year drug sales were up by 15.7% year-on-year (y/y), reaching US$1.5 billion, while operating profit (calculated by Global Insight as revenues minus cost of sales, R&D and SG&A (sales, general and administrative costs) more than doubled to US$326.5 million.

Last year saw the market launch of several new drugs, including ADHD treatment patch Daytrana, Hunter-syndrome drug Elaprase and the ongoing roll-out of hyperphosphataemia treatment Fosrenol. This has not depleted Shire's late-stage drugs pipeline, however, with several compounds expected to secure some form of regulatory approval by the end of this year. Among these are two more ADHD compounds, SPD465 and SPD503, which were both filed with the FDA in mid-2006 and have been given Prescription Drug User Fee Act (PDUFA) dates of 21 May and 24 June 2007, respectively. Elsewhere, Shire is anticipating a market launch for anaemia drug Dynepo (epoetin delta)—co-developed with France's Sanofi-Aventis—and ulcerative colitis drug Lialda/Mezavant (mesalamine with MMX technology), for which it clinched FDA approval earlier this year (see United Kingdom: 17 January 2007: Shire Receives U.S. Approval for Ulcerative Colitis Drug Lialda).

Among Shire's already-marketed drugs, Adderall XR continued to be Shire's top seller in 2006, recording an 18% y/y leap in turnover to US$863.6 million. Due to recent market launches, mergers and in-licensing agreements, many of Shire's drugs do not have comparative 2005 sales data. However, newer drugs such as Daytrana and Elaprase are reported to be making respectable inroads into the U.S. market.

Outlook and Implications

With as many as six new products expected to be launched over 2007 and the first half of 2008, Shire is expecting a significant escalation of costs over the coming months. SG&A expenditure for 2007 is anticipated at US$930-960 million, compared with US$835.4 million in 2006. Research and development costs, however, will stay roughly the same and could even contract slightly, estimated at US$360-380 million, down from last year's US$386.9 million. Overall revenue growth for 2007 is expected to be in the region of 20% y/y, assuming prescription growth in the ADHD market of 4-6% y/y following new market launches. However, all of these results purposely exclude the impact of the impending New River acquisition, as well as any continuing effects of the 2005 takeover of Transkaryotic Therapies (TKT; see World: 22 April 2005: Transkaryotic Therapies Snapped Up by Shire).

These mergers, combined with the heavy costs of promoting new drugs, will take their toll on Shire's bottom line over the next couple of years, and Shire is admittedly banking on the increasing sales of Vyvanse to boost medium-term operating margins and increase earnings. Upon the release of the company's financial results, Emmens said that Vyvanse "significantly enhances [Shire's] earnings growth from late 2009 and delivers on our overall global growth strategy".