Healthy one to hold

Published on Friday 30 October 2009 20:51

SHIRE 1072p +48p Scotsman says HOLD

SHIRE is a speciality bio-pharmaceutical company. Its core products treat attention deficient and hyperactivity disorders and gastrointestinal diseases and include human genetic therapies.

The pharmaceutical sector has been rather under a cloud over the past few months, perhaps concerned about President Obama's attempts to reform the US healthcare industry.

Shire has received some competitive threats from generic products to its core product, Adderall, but the new generation of drugs it produces has gone a long way to addressing this particular problem.

Shire should also benefit from the fact that the US Federal Drug Agency has announced it is allowing the company's Replagal treatment on to the market immediately. Replagal treats Fabry disease, in which patients lack a key enzyme needed to break down body fat. The drug should have had formal approval in 2010, but has been fast-tracked because an important competitor, Genzyme, has had serious production difficulties.

In addition, Shire's human genetic therapy division looks potentially very exciting, offering enormous potential that is not fully appreciated by the investment community.

Shire Pharmaceutical has come a long way from its origins, when it acquired mature products from its major competitors and squeezed out further value.

It is now an acknowledged unique product provider in its own right, at least within its peer group, but not something that appears to be fully appreciated by the investment community.

&#149 The value of your investment could fall and you may get back less than you invested. You should take professional advice if you have any doubt about the suitability of this company for your portfolio.