By Paul Sandle
LONDON (Reuters) - Pharmaceutical group Shire's strong growth is set to continue this year, the company said on Thursday, after demand for its rare disease drugs helped it report better than expected fourth-quarter profits which sent its shares to a record high.
The company, which makes drugs for hyperactivity and medicines for rare genetic conditions, posted a 36 percent rise in fourth-quarter earnings per American Depositary Share of $2.26 on a non-GAAP basis, on revenue up 12 percent at $1.33 billion (799.66 million pounds).
Chief Executive Flemming Ornskov has made a number of changes to step up earnings growth since he started last April, including simplifying operations, cutting costs and making acquisitions.
He said earnings in 2014 would grow at a similar level to the 23 percent recorded in 2013.
"With the foundations in place, 2014 will see continued excellent performance across all our core market segments," he told reporters on Thursday.
The group's rare disease drugs Replagal, Elaprase and VPRIV all performed well, analysts said, and Firazyr, which treats a type of angioedema, was a stand out, with a 134 percent rise in fourth-quarter sales to $81 million.
Ornskov has been rewarded with a 50 percent rise in the group's share price in the last 12 months, hitting a record 3,211 pence after the results were published on Thursday. They were up 1.6 percent at 3,191 pence at 1441 GMT.
"Shire's double-digit sales growth and margin expansion continues to separate it from most pharmaceutical companies," said analyst Mick Cooper at Edison Investment Research.
Analysts at Jefferies, meanwhile, said Shire's 2014 outlook would trigger a 3-5 percent upgrade in consensus forecasts.
BINGE EATING OPPORTUNITY
Ornskov's biggest deal to date was buying U.S. group ViroPharma, in a $4.2 billion deal that recently closed, to strengthen Shire's portfolio of drugs to treat rare disease.
He said on Thursday integration was moving along fast, and the acquisition's drug development program was "even more exciting" than he initially thought.
Last month he offloaded Dermagraft, a loss-making bio-engineered skin substitute bought by his predecessor.
The group's own pipeline has had setbacks, however, with disappointing results for a new dry eye drug in December, and last week, Vyvanse, its top selling ADHD medicine, was scrapped as a treatment for depression after a trial failure.
Ornskov said the result was "disappointing for patients", but the group was continuing to press ahead on developing for the drug as a treatment for binge eating disorder.
"We have very exciting data for binge eating disorder," he said. "We will throw even more resources at this opportunity."
Sales of Vyvanse to treat students and adults with hyperactivity rose 29 percent in the fourth quarter to $330 million, beating analyst estimates by 4 percent.
Ornskov said a "back to school" promotional campaign had been a success, although not a resounding success, and had delivered an increase in volumes in a market facing a slowdown in growth and subject to increasing generic competition.
The company also said Chief Financial Officer Graham Hetherington would step down on March 1, with the group's financial controller James Bowling taking over on an interim basis.
Hetherington told reporters that he wanted to spend more time with his family and did not have another executive job lined up.
Analysts were expecting revenue of $1.3 billion and earnings, in its preferred measure of non-GAAP EPS-ADS, of $2.02, according to a company-compiled poll of 19 brokers.
(Editing by Jane Merriman and Greg Mahlich)