Shire plc (NASDAQ:SHPG) Q2 2018 Earnings Conference Call - Final Transcript
Jul 31, 2018 • 09:00 am ET
Welcome to Shire's Q2 2018 Results Conference Call. Throughout the call all participants will be in a listen-only mode, and afterwards there will be a question-and-answer session. Please note that this conference is being recorded.
I'll now hand the floor to our first speaker, Christoph Brackmann, Head of IR for Shire. Please begin.
Hello, and welcome. Thank you for joining us to discuss our 2018 second quarter results, which were issued earlier today. You should have received our press release and can view this presentation on Shire's website. For those not able to view the webcast, you can find the relevant slides on the Presentations and Webcasts page of shire.com.
Our speakers today are Chief Executive Officer, Dr. Flemming Ornskov; and Thomas Dittrich, Shire's Chief Financial Officer. Please note that we are also joined by our financial adviser, Martin Weltman from Citibank.
(Forward-Looking Cautionary Statements)
I will now hand the presentation over to Flemming. Please turn to Slide 3.
Thank you, Christoph, and hello, everyone. We are pleased to share with you our second quarter results that, once again, demonstrate Shire's strong execution against key priorities.
Now, turning to the results, I will share an overall business update, and then Thomas will give you and go through the financial data. So please now turn to Slide 4. We'll focus on key areas, of which there are three today. First, we will review our continued commercial execution, which generated product sales growth of 6% despite the entry of generic competition to LIALDA. Similar to the first quarter, immunology, recently launched products and international expansion continue to drive our growth. Second, we're actively progressing our pipeline with 16 programs in Phase III and VII in registration. Lanadelumab registrations are progressing well in the U.S., Europe, Canada and Australia, with the U.S. PDUFA date coming up at the end of August.
Finally, I would like to highlight several key events in the quarter. As you are aware, our board reached an agreement with Takeda on the terms of recommended offer for Shire. The closing is expected in the first half of 2019, subject to a number of conditions, including receipt of regulatory clearances and approval by the shareholders of both companies. We also received approval for our state-of-the-art Covington plasma manufacturing site. In addition, the divestment of our Oncology business is on track to close in the third quarter of this year.
Please now turn to Slide 5. In the second quarter, we delivered 6% year-over-year growth, with product sales reaching $3.8 billion. Product sales growth was 4% at constant exchange rates. Including royalties and other revenues, our total revenues were $3.9 billion for the quarter, reflecting a 5% growth. This is a good performance, especially when we consider this growth was achieved despite the entry of generic competition to LIALDA that occurred during the second half of 2017. Non-GAAP earnings per share grew 4% versus last year, and non-GAAP free cash flow was approximately $750 million. Thomas will provide further details on our