* Q1 non-GAAP EPS $1.23 vs consensus from company poll $1.20
* Q1 revenue $972 mln vs consensus from company $945 mln
* Says strong start to year underpins 2011 guidance
* Shares down 1.8 percent
(Adds CEO comment, analyst reaction, updates shares)
By Paul Sandle
LONDON, April 28 (Reuters) - Drugmaker Shire posted a better-than-expected 22 percent rise in first-quarter earnings, helped by strong demand for hyperactivity drugs in the United States and increased sales of medicines to treat rare diseases.
Britain's third-largest drugs company reported earnings per share of $1.23 on revenue which was up 19 percent at $972 million, both ahead of market forecasts.
Shire has capitalised for the last 18 months on production problems at Genzyme, the U.S. rare disease specialist recently bought by Sanofi Aventis.
Genzyme's woes caused patients to switch to Shire's Replagal drug for Fabry disease and Vpriv for Gaucher disease, giving the British company a significant share of small but highly lucrative markets.
However, the easy gains may be over for Shire as Sanofi, which earlier on Thursday posted a drop in first-quarter earnings, said production of Genzyme's rival products Fabrazyme and Cerezyme was improving daily and it was confident it would be back on track "pretty quickly".
Shire's Chief Executive Angus Russell played down the impact from a resurgent Genzyme on the group's rare disease HGT (human genetic therapy) franchise, which now accounted for 30 percent of total product sales.
He said although there was evidence of an improvement in supplies of Cerezyme in the United States, Shire had seen "almost no, or very minor" switchback from Vpriv, and had added more patients in the quarter.
"The patients and physicians seem really happy with the drug and we are consistently supplying those products to our patients," he said. "So we expect minimal impact."
HYPERACTIVITY GROWTH
Sales of Shire's long-acting stimulant ADHD drug Vyvanse grew 31 percent to $202 million in the quarter, while sales of its former hyperactivity blockbuster Adderall XR, up 21 percent to $111.2 million, have performed better than analysts had expected against generic competition.
The outlook for stimulants to treat attention deficit hyperactivity disorder (ADHD) brightened earlier this month when the U.S. Food and Drug Administration said it saw no need to change labels after the initial findings of a review of cardiovascular risks from the drugs.
Shire is investigating the use of Vyvanse in additional therapeutic areas including major depressive disorder and binge eating disorder. Eearlier on Thursday it announced positive findings in a study of the drug in schizophrenia.
Shire's strategy of buying late-stage drugs in specialised areas has reduced its reliance on its ADHD franchise, and minimised the impact from blockbuster drugs losing exclusivity and pricing pressure that have hit its big pharma rivals.
It bought Belgian gastrointestinal drugmaker Movetis, which makes constipation treatment Resolor, in September.
Shire has targeted mid-teens revenue growth on average between 2009 and 2015, and in February it said sales would rise about by about 16 percent in 2011.
"We have made a strong start to 2011, which underpins our previously stated financial guidance," it said.
Increased investment in its pipeline and the impact of U.S. healthcare reform, however, would result in an increase in costs towards the upper end of its 10-13 percent range, it said.
Shares in Shire, which have risen 23 percent since the beginning of the year, were trading 1.8 percent lower at 1,866 pence at 1152 GMT.
Analysts at Deutsche Bank said sales of Vyvanse and Adderall XR were each well above its numbers in a market that grew 13 percent, although sales of its HGT drug Elaprase fell short because of a delayed shipment.
"Despite better-than-expected Q1 sales growth, the subtle tweak upwards in expected full-year spending growth may temper upgrades to consensus 2011 EPS and thus the shares may consolidate short term after a strong run," they said.
Analysts expected the company to report total revenue of $945 million and non-GAAP EPS of $1.20, according to a company-supplied consensus of 17 brokers.
(Editing by Kate Kelland and David Cowell)