Glaxo to co-promote Shire's Vyvanse drug

The goal is to increase use of Vyvanse in treating adults with attention deficit hyperactivity disorder (ADHD), Shire today.

The three-year deal will more than double the sales effort behind Vyvanse by adding more than 600 sales representatives from Glaxo, who will call on specialists and primary care doctors across the country.

Industry analysts said the addition of Glaxo's marketing muscle could add some $500 million to Vyvanse's sales potential, and Jeremy Batstone-Carr of Charles Stanley speculated Glaxo might go on to launch a bid for Shire in due course.

Vyvanse is a key product for Shire, which faces generic competition to its older hyperactivity drug Adderall XR from next month, and a marketing agreement with a larger pharmaceutical partner had been expected by many analysts.

Panmure Gordon analyst Savvas Neophytou said the strategy of appointing a partner had been the industry's worst kept secret. "But we now know the partner's identity - and GlaxoSmithKline is certainly a good catch," he added.

The arrangement with Glaxo, which is expected to start promoting Vyvanse in May, is based on profit-sharing above an agreed baseline figure.

Since its launch in 2007, Vyvanse has steadily built up sales and it currently has nearly 12% of the highly competitive U.S. prescription ADHD market.

Yet sales, which totalled $319 million last year, still lag well behind the $1.1 billion generated by Adderall XR.

Analysts have been forecasting peak Vyvanse sales of about $1.3 billion by 2014. Charles Stanley believes the deal with Glaxo, if successful, could add an additional $500 million, representing a 10% boost to earnings in that year.

Vyvanse first went on sale in the United States in July 2007 for the treatment of ADHD in children aged 6 to 12. It was approved in April 2008 to treat the condition in adults as well, opening up a potentially lucrative new market.

"Increased diagnosis and treatment of adults with ADHD is a significant driver of growth in this category (of medicine)," Michael Cola, head of Shire's specialty pharmaceuticals business, said.

By working with Glaxo, Shire expects Vyvanse will be introduced to more than 70,000 new physicians.

Shire shares went up 7.2% at 853 pence, while Glaxo are 3.1% higher at 1,072 pence. The European healthcare sector gained 2%.