HALISTER1: Goldman, Citi Tell Clients to Buy Shire Ahead of HAE Trial Data

Goldman, Citi Tell Clients to Buy Shire Ahead of HAE Trial Data

(Bloomberg) -- Shire’s Phase III Help data for SHP643 (lanadelumab) due in May should kickstart a rerating of its underperforming shares, Citi analysts Peter Verdult and Victor Windeyer write in client note.
  • Shire’s SHP643 and CSL’s Haegarda expected to increase prophylaxis segment in hereditary angioedema (HAE), now est. at 60% of patients on treatment
    • Ests. just 65% of patients are actually diagnosed
  • SHP643 has the potential to become the new “gold standard of treatment” given combination of efficacy, safety, ease of administration and convenience vs competition
  • Goldman Sachs also recommends buying Shire ahead of HAE trial result as its base case assumes efficacy to be similar to CSL’s Haegarda, analysts including Keyur Parekh write in client note today
OTHER CITI COMMENTS:
  • Recent share price performance has been “lackluster,” because of investor concerns on U.S. drug pricing, ongoing skepticism on Baxalta acquisition given threat from Roche’s ACE910, and balance sheet leverage
  • Shire to remain leader in HAE with market share of 60%-80% from 2016 >80% as market expected to peak at $2.8b in 2025 from $1.6b last yr
  • While >50% of patients on Shire’s Cinryze will be switched to CSL’s Haegarda within 12m of this year’s launch, the vast majority of Haegarda patients are expected to switch to SHP643 from 2H 2018 (expected launch date)
  • While Shire suing CSL against Haegarda U.S. launch will be debated by the market, trial data remains a more important sentiment driver
  • NOTE: Shire stock lost 3.1% this year, third-worst performer among Stoxx 600 Health Care Index members: Bloomberg data

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
SHP LN (Shire PLC)

People
Peter Verdult (Citigroup Inc)
Victor Windeyer (Citigroup Global Markets Inc)
Keyur Parekh (Goldman Sachs & Co)

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