* Bayer's Flemming Ornskov takes up post next April
* Q3 revenue and EPS per ADR misses market expectations
* Reiterates forecast of double-digit earnings growth in 2012
* Announces share buyback of upto $500 mln
* Shares down 0.5 pct
By Paul Sandle
LONDON, Oct 25 (Reuters) - Niche drug specialist Shire on Thursday announced the retirement of company veteran and CEO Angus Russell and said Bayer executive Flemming Ornskov would succeed him to oversee the next stage of the company's growth.
Analysts said Russell, chief executive for the last five years in a 13-year stint at Shire, was leaving the company in a very strong position and with robust underlying growth.
The announcement came as Shire missed third-quarter market expectations by reporting non-GAAP diluted earnings per ADS (American Depositary Share) of $1.36, up 6 percent, on revenue of $1.1 billion, up 1 percent.
London-listed Shire has expanded by acquiring drugs already on the market or in late stage development rather than investing in original research, a strategy that has delivered much faster growth than its big pharma rivals.
Russell said Shire had thrived by targeting niche areas, where it could build a close relationship with patients, doctors, policymakers and payers.
"We got into rare genetic diseases and we became a leader in ADHD (attention deficit hyperactivity disorder) and the number two player in GI (gastro-intestinal), and through that we've become a major force in the world of specialist and rare disease," he said.
Shire has also benefited in recent years from production problems at its rival Genzyme, now owned by Sanofi, which boosted demand for its rare disease drugs, which can sell for hundreds of thousand of dollars for a year's treatment.
Ornskov, who will take over on April 30 after a period of transition, is chief marketing officer at the German drugmaker.
He will be based at Shire's offices outside Philadelphia in the United States, which is its biggest market.
The slowdown in third-quarter growth followed increased generic competition in the hyperactivity market for Shire's former blockbuster Adderall XR.
Sales of its newer ADHD drugs Vyvanse and Intuniv continued to grow, with sales up 24 percent and 23 percent respectively.
It was also a weak quarter for its Dermagraft treatment for diabetic foot ulcers as it changed the sales organisation in its regenerative medicine business.
Shire said it was on track to hit its target for double-digit earnings growth for the year and announced a share buyback programme of up to $500 million.
Shares in the group, which have fallen 20 percent since the start of the year, were 0.5 percent lower at 1,785 pence by 1539 GMT, valuing the company at just over 10 billion pounds.
The stock has been hit by a number of setbacks this year, including the withdrawal of a marketing application for a Fabry disease drug and a bowel drug study failure, but it still trades on a lofty 19 times price-to-earnings multiple.
Analysts at Deutsche Bank said it was a disappointing quarter in isolation but the outlook was confidently reiterated and the buyback program would please the market.
Analyst Mick Cooper at Edison Investment Research said Shire's growth slowed because of generic competition to Adderall XR, showing that it shares some of the issues facing big pharma.
"However, the underlying growth remains strong and Angus Russell will be leaving Shire in a very strong position," he said.