Shire plc (NASDAQ:SHPG) Q2 2018 Earnings Conference Call - Final Transcript
Jul 31, 2018 • 09:00 am ET
(Operator Instructions) Ronny Gal, Bernstein.
A couple of questions. First, the Specialty Pharma business has done very well this quarter, especially XIIDRA and LIALDA. So I just wanted to quickly touch base on those and ask, is XIIDRA -- is this a matter of inventory? Is this a matter of just higher realized price because you're pulling back on discounts -- gross-to-net discounts and patient assistance? Or what is driving that very high increase in revenue, given that at least the scripts we are seeing does not suggest that? On LIALDA, if you can comment a little bit on the situations on the generics. Essentially, are they simply not able to supply the market? How's the dynamics there? And if I can sneak one more. Obviously, you need to retain key staff during this transition period. Can you talk a little bit about the impact of those retentions on share count, on operating profit and so forth?
Okay. Thanks very much, Ronny, for your three questions. I noted one on XIIDRA, one on LIALDA and then one on staff turnover and impacts on the P&L for retention payments. So as comes to the two questions that pertain to the Specialty Pharma, part of our business, as you call it, XIIDRA, we continue to be very pleased with the performance of XIIDRA. As you know, we mainly have access to the commercial market. And there, if you look at new patients' prescriptions, we have a leading share. It is absolutely clear that, now we're out of the immediate launch phase. We have pulled back on some of the couponing and others, which is why you've seen the significant improved gross-to-net. So we're very pleased with that. We know it's a dynamic marketplace. There could be further changes, including generitization of Restasis. And we're absolutely confident that we'll continue to strengthen our performance and our access in the part of the market, which is about half of the market, we don't really have great access to today is Medicare Part D. What is very important and what we've seen is when we get access to Medicare Part D, we actually do very well and see very rapid share uptake.
So we continue to be very optimistic and -- both about the profitability and the ongoing share gains of the product. LIALDA, yes, it's a dynamic marketplace. But we, of course, overall, have a significant impact of the genericization in terms of erosion of our share. And I'm not commenting on competitor's ability to supply or not supply. So I think all of those were in our prepared comments. We have put in place, in agreement with Takeda, which is commonly used in this transition situation, retention programs. And we see the impact of those, and we think that it's essential to keep the business going. And I think the strong performance of the business in a quarter that also had the announcement of this deal shows the dedication of our people and the