STOCKS NEWS EUROPE-Shire weakens on trial failures

Shares in Shire (LSE: SHP.L - news) fall 1.1 percent in brisk trade after Vyvanse, a top-selling medicine for hyperactivity, fails in two late-stage clinical trials to successfully treat adults with major depressive disorders.

Some traders see scope for a further near-term sell-off in Shire, up around 9 percent in 2014 against a drop of about 3 percent on broader the FTSE 100 , with the recent gains having been driven partly by speculation of a takeover attempt on the pharmaceuticals group.

"I think it should go down more; it's obviously a blow to the company... I think you'll see a quite negative pull-back to 28 quid ($45.71)," says Joe Rundle, head of trading at ETX Capital.

"If there's a big sell-off in the stock (to 28 pounds) bid speculation will come back... into play in a more serious manner," he says. Such a drop would take the shares some 10 percent below the current 3,107.98 pence level.

Others are more sanguine on the company, highlighting its longer-term growth potential.

"Significant news flow could still boost belief in Shire's longer-term organic growth prospects, which together with EPS growth accelerating potentially (by more than) 15 percent can justify multiple expansion," say analysts at Jefferies in a note. They rate the shares as a "buy".

Jefferies' stance echoes that of the broader market, where the average recommendation on Shire going into today's news was a "buy", according to Thomson Reuters Starmine data.

And, based on Starmine's Analysts Revision Model (ARM) - which measures analysts' revisions of key indicators such as earnings and revenue estimates and changes to their ratings - Shire is ranked way above London-listed peers AstraZeneca (NYSE: AZN - news) and GlaxoSmithKline (Other OTC: GLAXF - news) .

"I think the push lower this morning will likely have been an intra-day overreaction and technically the uptrend remains intact and it becomes an opportunity to position yourself 'long' ahead of figures (full-year results) on the 13th of February," Jordan Hiscott, senior trader at Gekko Global Markets, says.

Trading volumes in Shire stand at a chunky 90 percent of the 90-day daily average, against just 14 percent on the UK benchmark.

For more on Vyvanse trial failures:

Reuters messaging rm://tricia.wright1.thomsonreuters.com@reuters.net

($1 = 0.6125 British pounds)