Shire hands shareholders a tonic

SHARES in Shire Pharmaceuticals went into reverse in late trade, erasing the strong gains that followed the drugs group's decision to lift its profit forecasts.

The FTSE 100 stock slumped earlier this year amid fears about generic competition to Shire's to top-selling hyperactivity drug Adderall. But Shire boasted that its switch to an improved, patent-protected version of the drug called Adderall XR would boost earnings. The new drug had already taken nearly a fifth of the US market.

It now predicts full-year earnings growth in the 'high single digits'. Previously Shire had forecast no growth. Profits for the second quarter rose 16% to $81.7m (£54.8m), compared with City forecasts of around $70m.

Shire shares jumped nearly 7% to 572p, but ended off 5p at 530p, caught in a wider sell-off.