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Shire announces split into two business units, downgrades revenue forecast

Published on 09/01/18 at 10:01am

Shire has revealed that it now plans to move forward by separating its operations into two distinct divisions: rare disease and neuroscience – a move which follows the first stage of the company’s strategic review which began in August last year.

The decision is in part due to the admission by Shire that it had downgraded its total revenue expectations to between $17 and 18 billion by 2020 – a steep reduction from the $20 billion the company originally anticipated during its 2016 merger with Baxalta. Increased competition, including in the haematologic disease market, was cited as a reason for the move.  

Chief Executive Officer Flemming Ornskov said that there was a “strong rationale” for the split, adding that: "our new rare disease and neuroscience divisions will be well positioned for growth, profitability, innovation and serving the needs of patients."

Despite the revised sales forecasts, he added: “In the medium to long term my expectations have not changed. I’m even more positive.”

The firm plans to continue to review the prospect of a full separation of its operations and will provide an update in the second half of the year.

Matt Fellows

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