Ahead of the Bell: Shire downgraded by Credit Suisse
NEW YORK—A Credit Suisse analyst expects weakness in drug maker Shire's profit growth and margins over the next few years, and he downgraded the stock to "Underperform" from "Neutral."
Analyst Jeff Holford said Shire PLC, an Irish company that makes attention deficit hyperactivity disorder drugs, is working to ramp up sales of its latest drug, Vyvanse. Its top-selling product, Adderall XR, will face generic competition within a year.
Holford said Adderall XR is a "super-profitable" drug, he said, and conversion of Adderall patients to Vyvanse has been slow. That will reduce Shire's profit margins over the next few years.
Even if Vyvanse takes a larger market share than Adderall ever did, profits will shrink in 2009 and grow only modestly in 2010, he said.
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