Shire Creates New Divisions in Rare Diseases and Neuroscience

On Monday, Shire announced that it plans to reorganize its business structure and create two distinct operational divisions; one in rare disease and another in neuroscience.

After reviewing Shire’s neuroscience strategic business in August, the corporate board recognized the need for separate business divisions. The goal of the split is to provide additional investment, a sharper management focus, greater strategic clarity and an enhanced ability to deploy resources to serve key growth priorities. The decision to divide the company into two units is an attempt to pursue the innovation of pipeline drugs and keep up with pharmaceutical giant Pfizer and other competitors.

Dr. Flemming Ornskov, chief executive officer of Shire, said in a press release: "Our new rare disease and neuroscience divisions will be well positioned for growth, profitability, innovation and serving the needs of patients."

The operational performance metrics of each division is expected to be reported within the first quarter of 2018. The second stage of review will focus on the evaluation of all strategic alternatives and commence in the second half of 2018. These will include the merits of an independent listing for each of the two divisions. The corporate board sees this step as one that will allow both divisions to maximize product sales, cash generation, and innovation.

Shire’s late stage pipeline currently has 15 programs in Phase 3, making it the leading global biotech company focused on rare diseases. The rare disease division has a massive late-stage pipeline, accounting for 70% of the pharmaceutical company’s revenues. These include SHP643 for hereditary angioedema, SHP620 for CMV infection in transplant patients, SHP607 for the prevention of respiratory morbidity in premature infants, and SHP621 for eosinophilic esophagitis.

For 20 years, since its merger with Richwood Pharmaceutical, the company that owned Adderall at the time, Shire has been a leader in neuroscience. The pharmaceutical company plans on building its neuroscience division with products treating ADHD like Intunic, Vyvanse and Mydayis. Until recently, many of these drugs have only been accessible in Europe, and increased access in the United States will increase revenue, which is expected to be $8.5 billion after the division.

The announcement to expand the neuroscience unit will heighten competition with Pfizer, the pharmaceutical company who has also announced their recent plan to focus on neuroscience research.