UBS hikes Shire target price on three potential new "blockbuster" drugs

LONDON (ShareCast) - UBS (NYSEArca: FBGX - news) has lifted its target for Shire (Xetra: S7E.DE - news) 's share price from 5,400p to 6,600p as the Swiss bank highlighted three potential blockbuster products at the pharmaceutical group. Reiterating its 'buy' recommendation on the stock, the bank played down recent concerns that Shire overpaid in its $5.2bn takeover of US biotech group NPS earlier this year.

It estimated that the Natpara and Gattex products acquired through NPS could be worth $9bn on a net present value basis and the response on both drugs is generally positive.

Natpara, used in the treatment of Hypoparathyroidism and recently given US regulatory approval, and Gattex, used to treat short -bowel syndrome, "should both become blockbuster products over time", UBS said.

A recent survey showed that Natpara could generate $1bn of sales by 2030 and UBS estimates it is worth 420p per share to Shire, while Gattex is valued at 530p per share.

Meanwhile, the bank said Shire's own Vyvanse product for binge eating disorder also has "blockbuster potential" and forecasts $570m of sales by 2020, almost double management's own guidance of $300m.

The stock was up 1% at 5,365p by 10:55.