Recently, the US Food and Drug Administration (FDA) approved Daytrana (methylphenidate transdermal system), Shire’s (SHPGY) product for treating patients aged between 13 to 17 years suffering from Attention Deficit Hyperactivity Disorder (ADHD). Daytrana is the sole ADHD treatment available as a transdermal patch. The drug is designed to be used in combination with psychological, educational and other measures for ADHD treatment.

The drug, licensed to Shire by Noven Pharmaceuticals, Inc. worldwide, is already available in the US for patients aged between 6 and 12 years. The US FDA approved Daytrana for that patient population in 2006. Daytrana is applied to intact skin and delivers methylphenidate through the skin into the bloodstream.

The patch, sold in strengths of 10 mg, 15 mg, 20 mg and 30 mg should be worn for nine hours. The patch remains effective for several hours after its removal. Data from a late-stage, multi-center, randomized, double-blind, placebo-controlled study (n=217) demonstrated the efficacy of Daytrana as an ADHD therapy for the patient population aged between 13 to 17 years. However, side-effects of the drug include reduction in appetite, nausea, insomnia, weight loss, dizziness, stomach pain, anorexia and redness or rash in the area of the application of the patch.

Significant Opportunity in ADHD Market

The market for ADHD, one of the most common psychiatric disorders affecting children and adolescents, is significant. The disorder affects approximately 5% of children aged between 5 to 17 years across the globe. The market is expected to be worth approximately $3.3 billion by 2012 and $4.2 billion by 2015.

The United States represents a significant market opportunity for ADHD drugs. Approximately 4.4 million children aged between 4 to 17 years are affected by the disease as per data released by the Centers for Disease Control and Prevention (CDC).

Currently ADHD has no cure although drugs like Novartis’ (NVS) Ritalin, Johnson & Johnson’s (JNJ) Concerta and Shire’s Adderall are effective in reducing the symptoms associated with the disorder.

Our Recommendation
 


Shire is a Zacks #3 Rank (‘hold’) company, which indicates that the stock is expected to perform in line with the overall U.S. equity market for the next 1 to 3 months. Our long-term Neutral stance on the company indicates that the stock is expected to replicate its short-term performance, but over 6 to 12 months. Consequently, we advise investors to retain the stock over the time-period.
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