BASINGSTOKE, England, February 20 /PRNewswire-FirstCall/ -- Shire plc announces results for the twelve months to December 31, 2006 - a year in which significant milestones were met, providing long-term drivers for the future growth of the Company. In addition, Shire announces in a separate press release that it has agreed to acquire New River Pharmaceuticals Inc (New River) for US$2.6 billion in cash funded by US$2.3 new debt facilities and approximately US$800 million of equity financing, a move that will increase the value of its leadership in the US Attention Deficit and Hyperactivity Disorder (ADHD) market.
2006 Financial Highlights - Product sales up 16% to US$1,536 million; - Total revenues up 12% to US$1,797 million; - Cash and cash equivalents up US$470 million; - Dividends up 15%. Matthew Emmens, Chief Executive Officer, said:
"2006 was an exceptional year for Shire in which we increased our strong leadership position in the US ADHD market and successfully executed all our planned regulatory filings and new product launches. We delivered good financial results, including a 12% rise in revenues and strong cash generation.
"This is an important and complementary acquisition that gives us full control of VYVANSE, a novel drug. We are confident and expect that the final labeling will provide patients and physicians with real benefits that differentiate this compound from other ADHD products. It will enable us to drive the launch and future development of VYVANSE and gain the full economic benefits of the drug. Based on VYVANSE's expected profile, we believe it has the potential to be the next generation stimulant product to ADDERALL XR(R). This acquisition continues our leadership position in the growing US ADHD market, improves our operating margins, significantly enhances our earnings growth from late 2009 and delivers on our overall global growth strategy. The combined debt and equity financing announced today enables us to both acquire New River and retain the financial flexibility to make further acquisitions that will continue to drive Shire's growth."
Looking ahead, in 2007 we expect to see the positive impact of our strategic plan put in place three years ago. We will benefit from the recent launches of DAYTRANA(TM) and ELAPRASE(TM) and roll-out of FOSRENOL(R) in Europe and anticipate three additional product launches during the first half of the year namely LIALDA(TM) / MEZAVANT(TM), VYVANSE(TM) and DYNEPO(R). This year should also see the approval of SPD465 and SPD503 for ADHD. In addition, we have added nine new products into our development pipeline, including three new HGT (Human Genetic Therapies) products.
Shire continues to look at ways in which it can effectively apply its cash flow to generate long-term shareholder value through strengthening its pipeline of specialty products with long lifecycles and strong intellectual property."
2006 Product highlights
- ADDERALL XR - ADHD - Sales for 2006 up 18% to US$864 million.
- DAYTRANA - ADHD - Approved by the Food and Drug Administration (FDA) in April 2006 and launched in the US in June 2006. By December 31, 2006 DAYTRANA had a 2% share of the US ADHD market and had achieved sales of US$25 million.
- ELAPRASE - Hunter syndrome
- Launched in the US in August 2006 and by December 31, 2006 over 110 patients in the US had received treatment.
- EU pre-approval process commenced in July 2006. By December 31, 2006 over 100 patients were receiving treatment on a named-patient basis.
- Sales for 2006 of US$24 million.
- REPLAGAL(R) - Fabry disease - Sales for 2006 up 24% to US$118 million.
- FOSRENOL - Hyperphosphatemia
- Prescription growth of 34% in the US. While US net sales were down 16%, this was due to significant stocking of higher strength formulations at the end of 2005.
- Sales in Europe reached US$4.6 million.
- In October 2006, Health Canada granted a marketing license application for FOSRENOL. Launch in Canada is planned for Q2 2007.
2006 Pipeline highlights
- VYVANSE (NRP104) - ADHD - New River received a second approvable letter from the FDA on December 21, 2006. Shire expects New River to receive the FDA's final response by February 24, 2007 with launch for the pediatric indication still expected for Q2 2007, pending final scheduling discussions.
- SPD465 - ADHD - Filed with the FDA in July 2006. The Prescription Drug User Fee Act (PDUFA) date is May 21, 2007.
- SPD503 - ADHD - Filed with the FDA in August 2006. The PDUFA date is June 24, 2007.
- GA-GCB - Gaucher disease - Phase 3 clinical program initiated and enrolment began in January 2007.
- Shire Human Genetic Therapies (HGT) - Three projects advanced to pre-clinical development; namely enzyme replacement therapies for Sanfilippo syndrome (Mucopolysaccharidosis IIIA), Metachromatic Leukodystrophy and intrathecal delivery of ELAPRASE for Hunter syndrome patients with significant central nervous system symptoms.
- SPD491 - A once-a-day, non opiate, transdermal analgesic being developed with the goal of non-scheduled labeling to treat moderate to severe pain, will enter Phase 1 testing in Q1 2007.
- SPD535 - Pre-clinical evaluation for development of a novel platelet-lowering agent.
In addition we in-licensed:
- Rights to the transvaginal ring technology of Duramed Pharmaceuticals Inc. (Duramed) in the larger European markets in August 2006, together with a license in the same countries to Duramed's oral contraceptive, SEASONIQUE(R) (levonorgestrel/ethinyl estradiol).
- Global rights to SPD500 (Tissue Protective Cytokine Technology), from Warren Pharmaceuticals, Inc. (Warren) in September 2006. SPD500 is being developed pre-clinically in non-nervous system indications, including renal and genetic disease areas.
- Global rights to SPD493 (Valrocemide) and other related compounds, from Yissum Research and Development Company in July 2006. SPD493 is being developed at Phase 1 for the treatment of a number of central nervous system disorders.
2006 Business Highlights
- All pending patent infringement litigations with Impax Laboratories Inc. (Impax) and Barr Laboratories Inc. (Barr) in connection with ADDERALL XR were settled in January 2006 and August 2006, respectively.
- Repayment by IDB Biomedical Inc (IDB) of its loan for flu development (US$71 million plus interest of US$8 million) in February 2006.
- ADDERALL(R) (immediate-release mixed amphetamine salts) was sold to Duramed for US$63 million in August 2006.
- FOSRENOL - Hyperphosphatemia. Agreement with Abbott Laboratories (Abbott) signed in December 2006 for the co-promotion of FOSRENOL in the US. Abbott's US renal care sales team will co-promote FOSRENOL with Abbott's Vitamin D product ZEMPLAR(R). Shire's US renal sales force will also continue to promote FOSRENOL. Abbott's co-promotion activities began in Q1 2007 and will continue for a term of five years.
Recent Developments
- Shire agrees to acquire New River for US$2.6 billion in an all cash tender offer and merger and raises approximately US$800 million in equity financing. For details see separate release.
- ELAPRASE - Marketing authorisation granted by the European Medicines Agency on January 8, 2007. Pricing and reimbursement procedures are underway in many EU countries and launch is expected across the majority of EU countries in 2007.
- LIALDA - Ulcerative Colitis. Approval received from the FDA on January 16, 2007. US launch is planned for Q1 2007.
- SPD754 - HIV. Shire licensed the US and Canadian rights for the investigational HIV compound, SPD754 (also known as apricitabine), to the Australian biotechnology company Avexa Limited (Avexa) on January 23, 2007. Shire received an up-front cash payment of USUS$10 million, 8 million additional Avexa shares (taking its shareholding in Avexa to just over 8%) and may receive further milestones and royalties.
- MEZAVANT XL - Ulcerative Colitis. UK national licence received from the Medicines and Healthcare Products Regulatory Agency on January 19, 2007.
- ADDERALL XR - Health Canada granted a marketing license application for the adult indication in February 2007.
- FOSRENOL - Launched in the UK on February 19, 2007.
- REPLAGAL - To launch in Japan with partner Dainippon Sumitomo Pharma Co., Ltd by the end of Q1 2007.
Non-Executive Director Changes
- July 2006 - Kate Nealon joined the Shire board as a Non-Executive Director and a member of the Remuneration Committee. Kate Nealon was Group Head of Legal & Compliance at Standard Chartered plc until 2004. She also holds Non-Executive Director positions with HBOS and Cable and Wireless plc.
- December 2006 - Mr Ronald Nordmann stepped down from Shire's Board after seven years of service following expiry of his term of office.
- January 2007 - Dr Jeffrey M. Leiden, MD, PhD joined Shire's board as a Non Executive Director. Dr Leiden served as President and Chief Operating Officer, Pharmaceutical Products Group and Chief Scientific Officer at Abbott Laboratories from 2001-2006.
Full Year 2006 Unaudited Results 2006 2005 US GAAP Adjustments Non Restated Restated Non GAAP(1) US GAAP Adjustments GAAP(1) US$M US$M US$M US$M US$M US$M _______ _____ __________ _______ _______ __________ Revenues 1,796.5 - 1,796.5 1,599.3 - 1,599.3 Income/(loss) from ongoing operations(2) 316.8 70.1 386.9 (491.7) 926.9 435.2 Net income/(loss) 278.2 10.7 288.9 (578.4) 892.4 314.0 Diluted earnings/(losses) per: Ordinary share 54.6c 2.1c 56.7c (115.6c) 178.2c 62.6c ADS 163.8c 6.3c 170.1c (346.8c) 534.6c 187.8c Q4 2006 Unaudited Results Q4 2006 Q4 2005 Non Non US GAAP Adjustments GAAP(1) US GAAP Adjustments GAAP(1) US$M US$M US$M US$M US$M US$M _______ _________ __________ _______ __________ __________ Revenues 497.0 - 497.0 464.9 - 464.9 Income from ongoing operations(2) 90.3 1.7 92.0 101.0 27.3 128.3 Net Income 68.6 1.2 69.8 69.0 20.6 89.6 Diluted earnings per: Ordinary 13.4c 0.2c 13.6c 13.7c 4.1c 17.8c share ADS 40.2c 0.6c 40.8c 41.1c 12.3c 53.4c Note: Average exchange rates for 2006 and 2005 were US$1.84: GBP1.00 and US$1.82: GBP1.00, respectively. Average exchange rates for Q4 2006 and Q4 2005 were US$1.92: GBP1.00 and US$1.75: GBP1.00, respectively.
(1)For an explanation of why Shire's management believes that these non-GAAP financial measures are useful to investors, see page 7. For a reconciliation of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with US GAAP, see pages 26-27.
(2) Income/(loss) from continuing operations before income taxes and equity in earnings/(losses) of equity method investees.
Restatement of 2005 US GAAP Results
The Company today announces the restatement of its financial statements for the year to December 31, 2005, in respect of the value ascribed to in-process research and development (IPR&D), acquired as part of the Transkaryotic Therapies, Inc. (TKT) acquisition and subsequently written off as required under US GAAP in Q3, 2005. IPR&D represented those assets which, at the time of the acquisition, had not been approved by the FDA or other regulatory authorities, including I2S (now known as ELAPRASE) and GA-GCB.
The Company has determined that the value ascribed to IPR&D acquired as a result of the TKT acquisition did not include the benefit of tax amortization as required by the American Institute of Certified Public Accountants (AICPA) Practice Aid, Assets Acquired in a Business Combination to Be Used in Research and Development Activities: A Focus on Software, Electronic Devices, and Pharmaceutical Industries. The effect of this omission was to understate the value of IPR&D expensed in the year to December 31, 2005 by US$142 million, with a corresponding overstatement of goodwill as at December 31, 2005.
However, as the additional IPR&D write-off in the year ended December 31, 2005 is a non-cash accounting item, it has no impact on the cash flows of the Company for the year ended December 31, 2005. In addition, it has no impact on the cash flows or earnings of the Company for the year ended December 31, 2006 or beyond.
The results for the year to December 31, 2005 have been restated to record the value of IPR&D written off in Q3 2005 at US$815 million (previously US$673 million). As a result of this restatement the net loss as reported under US GAAP for the year to December 31, 2005 has increased from US$436.4 million to US$578.4 million, with the diluted loss per ordinary share as reported under US GAAP for the year to December 31, 2005 increasing from 87.2 cents to 115.6 cents per ordinary share.
Non-GAAP income from continuing operations of US$435.2 million, net income of US$314.0 million and diluted earnings per ordinary share of 62.6 cents (187.8 cents per ADS), for the year to December 31, 2005, are unaffected by this restatement.
2007 Outlook
R&D pipeline and new product launches
Shire has a strong product pipeline to support the future growth of the Company. In 2007 and H1 2008, the following launches are planned:
- VYVANSE in the US; - ELAPRASE in Europe; - LIALDA in the US and MEZAVANT in Europe; - FOSRENOL in the UK, Spain and Italy; - DYNEPO in Europe; and
- REPLAGAL in Japan by Shire's partner Dainippon Sumitomo Pharmaceuticals , Inc.
In addition, Shire is anticipating FDA decisions on:-
- SPD503 for ADHD in the US; and
- SPD465 for ADHD in the US.
Timings of approvals and launches are subject to the regulatory/governmental approvals process.
Financial Outlook
This outlook excludes the impact of the New River acquisition.
Shire's business continues to perform strongly. We expect 2007 revenue growth to be around 20% (assuming prescription growth in the ADHD market of 4-6%).
As in 2006, earnings for 2007 will continue to be impacted by the costs associated with the continued development and launch of new products. We anticipate that up to six new products will be launched during 2007 and H1 2008 in addition to the expected continued growth of DAYTRANA, ELAPRASE and FOSRENOL in the US and ELAPRASE and FOSRENOL in Europe.
- These launches will require additional advertising and promotional spend and in some cases additional sales representatives. Consequently, SG&A costs are expected to rise to between US$930 - 960 million for 2007;
- Phase 3(b) and Phase 4 studies to support new product launches and the continuation of Phase 3 trials on GA-GCB, the development of the Women's Health franchise, pre-clinical development of three HGT projects and two new Phase 1 projects and two further pre-clinical projects, are all expected to result in R&D spend in the range of US$360 - 380 million;
- The depreciation charge for the year is expected to increase by approximately 20% compared to 2006; and
- The effective tax rate for 2007 is expected to be approximately 26%.
In 2007 Shire intends to commence reporting its non-GAAP earnings based on adjusted EPS, which will exclude amortisation charges and the accounting impact of SFAS123R for share based compensation. Consequently the financial outlook for the full year stated above excludes amortisation charges, which are expected to rise by 20% over 2006 and the accounting impact of SFAS123R estimated at approximately US$45m, which will be split for GAAP purposes between cost of goods, R&D and SG&A in the approximate ratio of 10%, 20% and 70%, respectively.
Dividend
In respect of the six months to December 31, 2006 the Board has resolved to pay a second interim dividend of 5.2455 US cents per ordinary share (2005: 4.419 US cents per share). Together with the first interim payment of 1.9346 US cents per ordinary share (2005: 1.8246 US cents per share), this represents total dividends for 2006 of 7.1801 US cents per share (2005: 6.2436 US cents per share), an increase of 15% in US Dollar terms over 2005.
Dividend payments will be made in Pounds Sterling to Ordinary Shareholders, US Dollars to ADS holders and Canadian Dollars to Exchangeable Shareholders. A dividend of 2.6933 pence per ordinary share, 15.7365 US cents per ADS and an amount in Canadian cents per Exchangeable Share, to be determined based on the February 20, 2007 noon rate of the Bank of Canada, respectively will be paid. The Board has resolved to pay the dividend on April, 5, 2007 to persons whose names appear on the register of members of the Company (or to persons registered as holders of Exchangeable Shares in Shire Acquisition Inc.) at the close of business on March 16, 2007.
Shire intends to pursue a progressive dividend policy.
New Accounting Standard - SFAS 123R
Shire's primary basis of financial reporting is US GAAP. From January 1, 2006 Shire has applied SFAS 123R in accounting for share-based compensation. This accounting standard applies a fair value methodology in quantifying the accounting charge associated with share-based compensation.
The Company has adopted SFAS 123R according to the modified retrospective method. As a result, comparatives, including accounting periods in 2005, have been retrospectively adjusted.
Notes to Editors
SHIRE PLC
Shire's strategic goal is to become the leading specialty pharmaceutical company that focuses on meeting the needs of the specialist physician. Shire focuses its business on ADHD, human genetic therapies (HGT), gastrointestinal (GI) and renal diseases. The structure is sufficiently flexible to allow Shire to target new therapeutic areas to the extent opportunities arise through acquisitions. Shire believes that a carefully selected portfolio of products with a strategically aligned and relatively small-scale sales force will deliver strong results.
Shire's focused strategy is to develop and market products for specialty physicians. Shire's in-licensing, merger and acquisition efforts are focused on products in niche markets with strong intellectual property protection either in the US or Europe.
For further information on Shire, please visit the Company's website: www.shire.com
THE "SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Statements included herein that are not historical facts are forward-looking statements. Such forward-looking statements involve a number of risks and uncertainties and are subject to change at any time. In the event such risks or uncertainties materialise, Shire's results could be materially affected. The risks and uncertainties include, but are not limited to: risks associated with the inherent uncertainty of pharmaceutical research, product development, manufacturing and commercialisation; the impact of competitive products, including, but not limited to the impact of those on Shire's ADHD franchise; patents, including but not limited to, legal challenges relating to Shire's ADHD franchise; government regulation and approval, including but not limited to the expected product approval dates of SPD503 (guanfacine extended release) (ADHD), SPD465 (extended release of mixed amphetamine salts) (ADHD), and VYVANSE (NRP104) (lisdexamfetamine dimesylate) (ADHD), including its scheduling classification by the Drug Enforcement Administration in the United States; Shire's ability to complete, and achieve anticipated benefits from the acquisition of New River; Shire's ability to secure new products for commercialisation and/or development; and other risks and uncertainties detailed from time to time in Shire's filings with the Securities and Exchange Commission.
Non-GAAP Measures
This press release contains financial measures not prepared in accordance with US GAAP. These measures are referred to as "non GAAP" measures and include Non GAAP income from ongoing operations, Non GAAP net income, Non GAAP diluted earnings per ordinary share and Non GAAP diluted earnings per ADS. These non GAAP measures exclude the effect of certain cash and non-cash items, both recurring and non-recurring, that Shire's management believes are not related to the ongoing performance of Shire's business.
These non GAAP financial measures are used by Shire's management to make operating decisions because they facilitate internal comparisons of the Company's performance to historical results and to competitors' results. These measures are also considered by the Remuneration Committee of Shire's Board of Directors in assessing the performance and compensation of employees, including its executive officers.
The non GAAP measures are presented in this press release as the Company's management believe that they will provide investors with a means of evaluating, and an understanding of how Shire's management evaluates, the Company's performance and results on a comparable basis that is not otherwise apparent on a GAAP basis, since many one-time or infrequent items that the Company's management believe are not indicative of the ongoing performance of the business may not be excluded when preparing financial measures under US GAAP.
However, these non GAAP measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with US GAAP.
Additional Information
The tender offer described in this press release has not yet commenced, and this press release is neither an offer to purchase nor a solicitation of an offer to sell New River common stock. Investors and security holders are urged to read both the tender offer statement and the solicitation/recommendation statement regarding the tender offer described in this report when they become available because they will contain important information. The tender offer statement will be filed by a subsidiary of Shire with the Securities and Exchange Commission (SEC), and the solicitation/recommendation statement will be filed by New River with the SEC. Investors and security holders may obtain a free copy of these statements (when available) and other documents filed by Shire or New River with the SEC at the website maintained by the SEC at www.sec.gov. The tender offer statement and related materials may be obtained for free by directing such requests to Shire at Hampshire International Business Park, Chineham, Basingstoke, Hampshire, England, RG24 8EP, attention: Investor Relations. The solicitation/recommendation statement and such other documents may be obtained by directing such requests to New River at 1881 Grove Avenue, Radford, Virginia 24141, attention: Director of Corporate Communications.
The following are trademarks of Shire or companies within the Shire Group which are the subject of trademark registrations in certain territories:
ADDERALL XR(R) (mixed salts of a single-entity amphetamine) ADDERALL(R) (mixed salts of a single-entity amphetamine) AGRYLIN(R) (anagrelide hydrochloride) CALCICHEW(R) range (calcium carbonate with or without vitamin D3) CARBATROL(R) (carbamazepine extended-release capsules) COLAZIDE(R) (balsalazide) DAYTRANA(TM) (methylphenidate transdermal system) ELAPRASE(TM) (idursulfase) FOSRENOL(R) (lanthanum carbonate) GENE-ACTIVATED(R) LIALDA(TM) (mesalamine) LODINE (R) (etodolac) MEZAVANT (TM) (mesalamine) REMINYL(R) (galantamine hydrobromide) (UK and Republic of Ireland) REMINYL XL(TM) (galantamine hydrobromide) (UK and Republic of Ireland) REPLAGAL(R) (agalsidase alfa) SOLARAZE(R) (3%, gel diclofenac sodium (3%w/w)) VANIQA(R) (eflornithine hydrochloride) VYVANSE(TM) (lisdexamfetamine dimesylate) XAGRID(R) (anagrelide hydrochloride)
The following are trademarks of third parties referred to in this press release:
3TC (trademark of GlaxoSmithKline (GSK)) DYNEPO (trademark of Sanofi Aventis) MMX Multi Matrix Systems (trademark of Cosmo Technologies Limited) PENTASA (trademark of Ferring) RAZADYNE (trademark of Johnson & Johnson) RAZADYNE ER (trademark of Johnson & Johnson) REMINYL (trademark of Johnson & Johnson, excluding UK and Republic of Ireland) REMINYL XL (trademark of Johnson & Johnson, excluding UK and Republic of Ireland) SEASONIQUE (trademark of Barr Laboratories, Inc.) ZEFFIX (trademark of GSK) ZEMPLAR (trademark of Abbott Laboratories) OVERVIEW OF US GAAP FINANCIAL RESULTS 1. Introduction Summary of 2006
Revenues from continuing operations for the year to December 31, 2006 increased by 12% to US$1,796.5 million (2005: US$1,599.3 million).
Income from continuing operations (before income taxes and equity in earnings/(losses) of equity method investees) for the year to December 31, 2006 was US$316.8 million (2005: loss of US$491.7 million, as restated (see page 4)). The difference is primarily due to the write-off in 2005 of in-process R&D of US$815.0 million following the TKT acquisition.
Cash inflow from operating activities for the year to December 31, 2006 increased by 38% to US$531.9 million (2005: US$384.3 million). The net increase resulted mainly from favourable movements in working capital, in particular the timing of sales within the final quarter of 2006 coupled with a reduction in the net tax paid of US$48.5 million.
Cash and cash equivalents, restricted cash and short-term investments at December 31, 2006 totaled US$1,156.7 million (December 31, 2005: US$694.0 million). The increase in cash and cash equivalents during the year of US$470.4 million was primarily due to positive cash flows from Shire's operations, the sale of product rights to Duramed for US$63.0 million and proceeds from loans repaid by IDB of US$70.6 million, offset by purchases of property, plant and equipment (US$100.3 million) and a milestone payment to Noven Pharmaceuticals Inc. (Noven) on DAYTRANA's approval (US$50.0 million).
Summary of Q4 2006
Revenues from continuing operations for the three months to December 31, 2006 increased by 7% to US$497.0 million (2005: US$464.9 million) with ELAPRASE and DAYTRANA contributing US$34.5 million to Q4 2006 sales.
Income from continuing operations (before income taxes and equity in earnings/(losses) of equity method investees) for the three months to December 31, 2006 was US$90.3 million (2005: US$101.0 million).
Cash inflow from operating activities for the three months to December 31, 2006 was US$188.8 million (2005: US$155.0 million). This increase primarily resulted from favourable movements in working capital.
2. Product sales
For the year to December 31, 2006 product sales increased by 16% to US$1,535.8 million (2005: US$1,327.7 million) and represented 86% of total revenues (2005: 83%). Product Highlights Sales Sales US Rx US Market Product US$M Growth (2) Growth (1) Share (1) (2) ADDERALL XR 863.6 +18% +8% 26% DAYTRANA 25.1 n/a n/a 2% CARBATROL 68.3 -5% -9% 42% PENTASA 137.8 +1% +2% 18% REPLAGAL(3) 117.7 n/a n/a n/a ELAPRASE 23.6 n/a n/a n/a XAGRID(4) 53.3 +14% n/a n/a FOSRENOL 44.8 -16% +34% 9% (1) IMS Prescription Data - Product specific (December 2006). (2) Compared to 2005.
(3) REPLAGAL was acquired as part of the TKT acquisition, which completed in July 2005. Total sales for REPLAGAL, including pre-acquisition sales, for the year ended 2005 were US$94.6 million with total growth for the year ended 2006, including pre-acquisition sales, of 24%. In 2005 total post-acquisition sales were US$41.3 million.
(4) Worldwide sales excluding US and Canada.
ADDERALL XR for the treatment of ADHD
ADDERALL XR is the leading brand in the US ADHD market with an average market share of 26% in 2006 (2005: 25%). US ADHD market growth of 4% and the 1% increase in average market share contributed to an 8% increase in US prescriptions for ADDERALL XR for year to December 31, 2006 compared to the same period in 2005.
Sales of ADDERALL XR for the year to December 31, 2006 were US$863.6 million, an increase of 18% compared to the same period in 2005 (2005: US$730.8 million). Product sales growth was significantly higher than prescription growth due primarily to price increases in August 2005 and April 2006.
During October 2005 Shire filed a Citizen Petition with the FDA requesting that the FDA require more rigorous bioequivalence testing or additional clinical testing for generic or follow-on drug products that reference ADDERALL XR before they can be approved. Shire received correspondence from the FDA in April 2006 stating that, due to the complex issues raised requiring extensive review and analysis by the FDA's officials, a decision cannot yet be reached by the FDA. The FDA did not provide any guidance as to when that decision may be reached.
On August 14, 2006 Shire and Barr announced that all pending litigation in connection with Barr's Abbreviated New Drug Application (ANDA) and its attempt to market generic versions of Shire's ADDERALL XR had been settled. As part of the settlement, Barr entered into consent judgments and agreed to permanent injunctions confirming the validity and enforceability of Shire's US Patents Nos. 6,322,819 (the "'819 Patent"), 6,601,300 (the "'300 Patent") and 6,913,768 (the "'768 Patent"). Barr has also admitted that any generic product made under its ANDA would infringe the '768 patent. Under the terms of the settlement, Barr will not be permitted to market a generic version of ADDERALL XR in the US until April 1, 2009, except in certain limited circumstances, such as the launch of another party's generic version of ADDERALL XR. No payments to Barr are involved in the settlement agreement.
In January 2006, Shire settled its ADDERALL XR patent infringement lawsuits with Impax. Under the terms of the settlement, Impax will be permitted to market generic versions of ADDERALL XR in the US no later than January 1, 2010 and will pay the Company a royalty from those sales. In certain situations, such as the launch of another generic version of ADDERALL XR, Impax may be permitted to enter the market as the Company's authorized generi
