£1bn blow for Shire after copycat drug ruling

Regulators in the US approved a cut-price version of hyperactivity drug Adderall XR, which accounted for more than 10 per cent of Shire’s product sales in the last quarter, leading analysts to warn of “potentially severe” downgrades to earnings forecasts.

The legal blow for Shire, which employs 300 staff at its UK office in Basingstoke and is a market leader in developing drugs to treat attention deficit hyperactivity disorder (ADHD), came at least a year before such a move had been expected.

Although Shire said it would still deliver good earnings growth this year, it was the biggest faller in the FTSE 100 Index, with more than £1bn wiped from its value.

Jeremy Batstone-Carr, an analyst at Charles Stanley Securities, said a worst case scenario could see sales of the drug hit by 50 per cent this year and a further 50 per cent the following year.

This could cause earnings per share for 2013 to be 10 per cent lower than currently forecast. But he added that it was not clear whether the rival would decide to launch the product immediately.