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Philadephia
Inquirer, 2/5/06
SINGLE-MINDED ADHD FOCUS
SHIRE FENDS OFFS GENERIC, DEFENDS KEY MARKET
by Thomas Ginsberg
What does this say about a drug company?
The lobby walls at Shire PLC bear no paeans to good health, no
maxims of venerable founders, no gilded corporate logos -- all
standard foyer fare.
Instead Shire, Britain's third-largest drug company, greets all
comers to its North American headquarters in Wayne [Pennsylvania]
with this:
A stock ticker.
Call it honest. Half of Shire's revenue hinges on sales for one
controversial condition, attention deficit hyperactivity disorder,
or ADHD. So every bump in the ADHD business shows up in its stock
price.
On Thursday, Food and Drug Administration advisers will hold the
first of two public meetings on ADHD drugs. They are expected to
look anew at warning labels, prompted by a heart-attack scare last
summer from Shire's Adderall XR, the world's most-prescribed ADHD
medicine and already the focus of concern about misdiagnosis, abuse
and addiction.
The meeting comes just weeks after Shire fended off a different
threat, from Impax Laboratories Inc., a maker of generic drugs
trying to market an Adderall copycat. The legal victory sent Shire's
stock to a four-year high. Shire still must defang a second generic
foe.
All in all, a workout for Shire's ticker. And Philadelphia should
take note: Shire is the emerging engine of what arguably could be
called "ADHD Alley," carved out of Chester County and Montgomery
County farmland.
The No. 2-selling ADHD drug after Adderall XR is Concerta, marketed
by McNeil Consumer & Specialty Pharmaceuticals, a Johnson & Johnson
subsidiary in Fort Washington. Yet another ADHD drug awaiting FDA
approval, Sparlon, is made by Frazer-based Cephalon Inc.
In all, ADHD prescription drugs made by firms with headquarters or
big operations around Philadelphia took in almost $1.6 billion last
year, more than half the total spent in the United States, according
to the industry monitoring firm IMS Health. No place else comes
close.
Shire knew it. Matthew Emmens, its chief executive officer since
2003, started consolidating US and Canadian operations here in 2004.
Today, 600 people work at his Chesterbrook Corporate Center complex.
That makes it the biggest outpost of the 2,500-worker company and
three times bigger than headquarters, 50 miles west of London in
Hampshire County, the inspiration for its name.
Emmens' Americanizing ambition is clear. Shire's board recently
granted his request to create a US political action committee,
perhaps the ultimate American business credential.
A veteran of Big Pharma from Nutley, NJ, Emmens, 53, laments the
troubles facing the drug industry, including public skepticism,
government scrutiny, litigious patients, generic competition and
monstrous bureaucracies.
"I'd rather be my size company now and growing, than be a Big Pharma
company," Emmens said in an interview.
He does not have much to worry about, yet. Shire's Adderall-powered
revenue hit an estimated $1.64 billion last year, up about 14
percent from $1.44 billion in 2004. Estimated per-share earnings
were 27 cents, flat from a year earlier.
Emmens' plan is to expand into other small-market disease therapies,
such as anemia and Hunter syndrome. He began last year with the
coolly received $1.6 billion acquisition of Transkaryotic Therapies
Inc., a biotech company.
At the same time, Emmens aims to rule ADHD. Shire has developed an
ADHD skin patch, Daytrana, now under FDA review. It is developing a
stomach enzyme-activated pill that is harder to misuse, hoping to
overcome abuse by people crushing and snorting Adderall -- which is
an amphetamine, or speed -- for a potent high.
If all goes as planned, the new pill, licensed from Virginia-based
New River Pharmaceuticals Inc., will be the first approved as a
non-narcotic, making it easier to prescribe and sell. (Adderall and
similar narcotics carry criminal penalties for misuse.)
"We're going to stay there, and lead," Emmens said of the ADHD
business.
A divorced father of three, Emmens offers an impassioned response on
every ADHD issue. He deftly tries to disarm critics pushing the
notion that ADHD ought not be treated with drugs at all.
"I would say these drugs should be used after other things don't
work," said Emmens, endorsing suggestions that parents should first
try counseling, child therapy, even switching off the TV and taking
excursions into the woods -- anything except drugs.
But when all else fails, Emmens said the medicines' benefits far
outweigh their risks.
"The safety concerns that most people have are hysterical," he said.
"These are safe and effective drugs. Every time you use a therapy
anywhere, you should weigh the risks and benefits. And the benefits
are there, if you actually have the disorder."
Minutes later, Emmens, a Ted Turner-esqe executive and avid private
pilot who can regale visitors with tales of midair engine failure,
tries to take back the word hysterical.
"I think it's just some people. Separate emotion from facts, that's
all I'm saying."
Facts, however, are not always clear, said Sidney Wolfe, director of
health research at the nonpartisan advocacy group Public Citizen.
"Amphetamines cause cardiovascular problems," Wolfe said. "We looked
at the ADHD drugs and thought Adderall did not stand out worse than
the others. But we don't have all the data."
Public Citizen warns that ADHD drugs are "not suitable for all
children" and should not be given to anybody with heart problems or
who simply suffer ADHD-like symptoms from school or home stress.
According to regulators, there have been 20 documented "sudden
unexplained deaths," mostly in young people or children, among an
estimated 30 million Adderall-XR users since 1999.
Is that a lot or a little? The FDA advisers will try to answer. The
first meeting will focus on cardiovascular risks; the second on
March 22 will look at suicides.
Shire said the death rate among Adderall users was lower than among
the general population. The FDA so far agrees. It granted Shire
permission last year to market Adderall to adults, as long as it
added a sudden-death warning to its label.
When Shire tried to add similar warnings to its Canadian label,
though, regulators there suspended Adderall XR. The ban later was
reversed but not before it spawned more criticism.
But Shire's stock soared back last month on the Nasdaq after it
settled the Impax case. Analysts now say Shire can beat Barr
Laboratories Inc., another maker of generic drugs, and may succeed
in launching several new drugs this year.
Citigroup Research analyst Peter Verdult, in a investment note, told
Shire investors last week that it was time to think long-term. "It's
now a marathon, not a sprint, for Shire," he wrote.
Contact staff writer Thomas Ginsberg at 215-854-4177 or tginsberg@phillynews.com.
Copyright 2006 Knight Ridder |
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