Shire looks to double sales to $10bn by 2020

SHIRE yesterday argued strongly in favour of maintaining its status as an independent company, as it outlined its defence against Abbvie’s recent takeover attempts.

The firm said it would continue to offer solid shareholder returns, with the potential to double sales revenue to over $10bn by 2020, and stressed that Abbvie had undervalued the company.

Speaking on a conference call with investors and analysts yesterday, Shire’s chief executive Flemming Ornskov said the company had a track record of delivering healthy returns for shareholders.

Ornskov pointed to shareholder returns of 281 per cent between 2009 and 2014, and returns of 99 per cent in the last year, since Ornskov took the helm.

The pharmaceutical company, which switched its tax base to the Republic of Ireland in 2008 and conducts a significant proportion of its business in the US, put forward its long-term vision in an echo of Astrazeneca’s successful strategy against the takeover threat from Pfizer earlier this year.

Despite the firm’s defence, brokers think an improved offer from Abbvie before the 18 July limit could tempt Shire shareholders, with investment bank Jefferies arguing that an offer of 5,500p would likely be enough to convince investors to back a deal.

Shire’s shares dipped slightly yesterday, falling by 1.56 per cent to close at 4,303p.

The share price for Shire rose by nearly 17 per cent on Friday, hitting an all-time high after the rejected bid from Abbvie at 4,626p per share was revealed.

PHARMA CHIEF TALKS PROGRESS AS HE AVOIDS BEING PINNED DOWN ON BID

UNDER-PRESSURE Shire CEO Flemming Ornskov yesterday took to the phones to speak to investors after receiving a hostile takeover bid.

But, in doing so, he almost entirely avoided the issue of Abbvie’s $46bn (£27bn) offer, which had prompted the conference call in the first place, only saying the “unsolicited” offer “substantially undervalued” the true worth of the FTSE 100-listed company.

Ornskov, who is a trained physician, instead methodically put forward his case to convince any doubting shareholders he could deliver “accelerated growth” with a streamlined model.

He predicts that it would produce sales revenue of $6.5bn by 2016, and $10bn by 2020, in the company’s “10 by 20 vision”.

The Danish-born fan of TV drama Borgen has had to endure high- stakes intrigue himself, with the recent offer for Shire turning up the heat, but he believes an “innovative pipeline” can deliver the aim of making the company an independent “world leader” in the speciality pharmaceutical market.

However, it remains to be seen if he has won over the shareholders.