UPDATE 2-Shire scraps Vyvanse for depression after failed trials
* Vyvanse fails to help patients in two depression trials
* Shire pushing ahead with developing drug for binge eating
* 2013 sales of Vyvanse in ADHD expected to be about $1.2 billion
* Shares down 2 percent
LONDON, Feb 7 (Reuters) - Pharmaceuticals group Shire has halted development of its top-selling hyperactivity drug Vyvanse as a treatment for depression after it failed to treat patients successfully in two late-stage clinical trials.
The news sent the drugmaker's high-flying shares down by about 2 percent to 30.80 pounds by 0830 GMT, though they remain within a whisker of this week's record high of 31.53 pounds, reflecting investor confidence in Shire's underlying growth.
Amphetamine-based Vyvanse, prescribed to U.S. students to control attention deficit hyperactivity disorder (ADHD), did not ease symptoms significantly when given as an add-on therapy for adults who had responded inadequately to two common types of antidepressants, Shire said in a statement late on Thursday.
As a result, London-listed Shire said it would no longer pursue the clinical development programme for major depressive disorders.
Chief Executive Flemming Ornskov said the news was "disappointing" but pointed out that Vyvanse remains a leading treatment for ADHD and that the company would also be filing it for U.S. approval this year as a treatment for binge-eating disorders.
Industry analysts estimate that Vyvanse sales totalled about $1.2 billion last year, reflecting its popularity as an ADHD treatment in the United States, the main market for such therapies.
Some analysts were surprised by the negative results in depression, which had been considered a more promising new use for the medicine than the untested field of treating binge eating.
Analysts at Jefferies said that Vyvanse as a depression treatment had accounted for 85 pence per share in its sum-of-the-parts valuation of the company based on anticipated annual sales of about $350 million by 2018.
Berenberg analyst Alistair Campbell said the loss of Vyvanse as a depression treatment would result in a 3 percent cut to his 2018 earnings estimate for Shire. As a consequence, Berenberg no longer expects double-digit earnings growth through to 2018, lowering its forecast to 9 percent from 10 percent.
The setback for Vyvanse follows mixed late-stage results in December for another drug, lifitegrast, as a treatment for dry eye, putting Shire's ability to deliver on its pipeline of experimental medicines under scrutiny.
"Pipeline focus is now increasingly on rare orphan diseases, potentially putting pressure on management to execute more business development deals and/or M&A, in our view, with ophthalmology and blood cancers possible targets," Jefferies said in a note.
Shire is a serial acquirer of other drug companies. It struck its biggest deal yet in November, when it agreed to buy rare diseases specialist ViroPharma for $4.2 billion.
Shares in Shire, which will report full-year results on Feb. 13, have outperformed the market strongly in the past year thanks to strong growth on the back of treatments for rare diseases and ADHD.
It is a firm favourite among pharmaceutical analysts, with 20 of 25 sell-side analysts tracked by Thomson Reuters rating it either a "strong buy" or a "buy".