Shire slumps after Credit Suisse cuts price target, earnings forecast

(ShareCast News) - Shire Pharmaceuticals declined on Monday after Credit Suisse cut its price target and forecasts for 2016 earnings.Analysts at the Swiss broker said while Shire has leading positions in pricing power and top line growth, there are "multiple overhangs" including the proposed Baxalta acquisition, the hold-up in receiving regulatory approval of lifitegrast and Lialda patent challenges."We are cutting our price target from £56.80 to £54 to reflect market moves and a 3% cut in 2016 earnings per share," Credit Suisse said, issuing a 'neutral' rating for the stock.Shire, which reported growth in third quarter sales and profit last week, said it is continuing to pursue its bid for US company Baxalta but did not indicate whether it was sweetening its offer. A bid for the firm was made public in August."The Baxalta hostile bid remains the single biggest unknown at Shire. Fundamentally we believe it is an attractive combination with significant revenue and cost synergies," said Credit Suisse.Meanwhile the US Food and Drug Administration has asked for more information about lifitegrast, a medicine for dry eye disease, before approving the drug.In another hurdle for Shire, the US Patent and Trademark Office is taking a second look at a patent that protects the company's colitis medicine Lialda from generic competition.Shares in Shire were down 0.71% to 4,608p at 1100 GMT.