Flemming on what drove immunology growth

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This entire lack of understanding of the plasma market has me very nervous. This is the first I heard of the Canada tender. Extreamly short sighted move to try and make 2017 look like less of a total mess. To me this sounds like it was a last ditch effort to look attractive in a take over. Couple that with the neuro split. We will all be working for a different company by Q3.
 






Neuro split is still up in the air. It was no coincidence that Flemm announced the intent to severe the neuro business shortly after Pfizer announced that they were doing the same. All in the optics to have Big Pharma take us over. When the stock dropped to a point of what looked like no return (figuratively and literally), Pfizer was probably waiting for a hostile takeover rather than a simple acquisition; hence why Flemm dialed back and indicated Shire would simply split the divisions but hang on to both of them. The consummate flip-flopper. No one seems to know where that's at now.

Immunoglobulin market is very tricky and you have to watch numbers and distribution on a daily basis. Take your eye off the ball for a moment can turn a leader into a distant follower in just a matter of months.
 












The questions form analysts on Immunology started in Q3 2017 when Shire began touting growth in this area as a big success attributable to the acquisition. How the questions were handled by Flemming on that call is very illustrative. See the transcript below.

Jo Walton - Credit Suisse Securities (Europe) Ltd.

“I wonder if I could ask a little bit about the pushes and pulls that we should be thinking about in 2018...

And on the Immunology side of things, if we look at your share, you've got something like over 20% share of the IG market but you appear to have less than a 15% share of the collection centers to get the raw material that you require. And as of recently, you've been only adding collection centers more slowly than your peers. Can we have some sense of how easy it's going to be for you to ramp up? I think you said that you were going to increase the growth rate in your collection centers. And give us some sense of what capital expenditure requirements you might think we should be looking for in 2018.”

Flemming Ornskov - Shire Plc

“Jo, thanks very much for your questions… As pertained to the network study and the implications for plasma and our share, yes, I think Matt said we will accelerate that. Any further comments, Matt?”

Matt Walker - Shire Plc

“Yeah. Maybe a little bit more context on the plasma centers. So as I said in my remarks, we're increasing our internal plasma collection, specifically in the U.S. from mid-single digits to double digits. We also see lots of opportunity to improve the effectiveness and efficiency of our existing centers. So as we looked at the network strategy, we wanted to make sure that we had the plasma to support our overall growth and we feel confident with our actions that we're taking today and the actions that we'll need in the future.

From a capital perspective, the capital allocation, specifically around the plasma centers, are modest. Our overall capital allocation continues to be focused primarily on growth. We have the Dublin facility that we've talked about for biologics, and of course we have the final investments that we're making in Covington and other investments that we're making across the network.”

Flemming Ornskov - Shire Plc

“I think another thing that goes back to what David Steinberg asked about before, without quantifying specifically the revenue synergies, by the end of this year, we will combine the hereditary angioedema business, the IG business, and have now Immunology being our largest businesses. And if you look at the customer overlap, the hospital focus, we think that will further strengthen our overall portfolio and offerings to the variety of specialists that cover both the IgG, the HAE, and our other products. So that's another benefit that we've had from the combination with Baxalta. Okay, next question, please.”

https://seekingalpha.com/article/41...-results-earnings-call-transcript?part=single
 
























Yep.

Once again FO over promised and will under deliver.

He used our security stock as a negotiating strategy to get the Canada tender back in April 2017 with the hopes the Covington plant would be fully operational by now. Not only is it not ready, but overhead is much higher than Flemm is reporting. He indicates that the cost of the plant is 1.2B when Baxter announced back in 2012 that it was going to cost 1.8B. Plant is also understaffed by about 600 employees which will tremendously slow down production. He says the plant will be operational in 2018, but doesn't say when in 2018. At best it will be Q4, but could be pushed into 2019. If Canada's volumes are truly as high as many suspect, could put us in tremendous supply constraints into the second half of our selling cycle.

Will be interesting to see what kind of bonuses management will be willing to commit to?
 






anonymous said:
The Baxalta acquisition was supposed to be Shires saving grace and launch Shire as the largest rare disease company in the world. On paper we look like it, but reality and shareholders have been suspect shortly after the takeover. Why are stock has taken a rapid decline after the acquisition but nobody really knows why. The Ig space is supposed to be very lucrative so it begs the question why Baxter spun-off this portfolio, only to have Baxalta dump it less than a year. Many investors think we paid way too much for this acquisition, and is probably why big stakeholders are reluctant to invest in this company.

Optically, Flemm wants to have major presence in every major country. Canada and Australia are big targets, but CSL has a stronghold in Australia as Grifols does in Spain. Canada seemed like a logical target to have a dominant presence, but not only did we come in at a ridiculous low-ball price, we got 80% of the commercial market. You would think that is great news, but it could have catestrophic consequences if they pull all of the Ig out of the US, especially if the low price was in CAD and not USD. The concern is about potential shortages in the US, and if their is any major disruption in supply (like the Cynrize incident), could damage Shires reputation for a very long time.

Time will tell, but it probably won't take 12 months before we find out.
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according to Flemming this is all wonderful revenue synergy at its best, and proof of the genius of the baxalta acquistion

how dumb is that

sounds more like self imposed business erosion by management fiat
 






Supposedly our subsidiary in Canada is selling Cuvitru at the same low price they came in with Gammagard. Apparently they haven't figured there's a cost to run a PSP program.

OnePath to disaster; it's the Shire way!

The inverted pyramid should reflect upper management's company decisions of flushing good money after bad down the drain.
 












anonymous said:
Todays stock = $131

April 1 fast approaching. Could this be Flemm's ultimate April Fools joke? Executive Board, where are you??????

Tick Tock, Tick Tock.
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You know, Flems first day as CEO was April 1st? He promptly sent an email to the company telling us what font, colors and logo we are to use moving forward for all communication. We thought it was an Aprilf ools joke. Boy were we wrong. What a psycho he and his band of gypsies turned out to be.
 






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