Shire is the answer

I have been struggling to find a new company to start accumulating in one of my portfolios. It has to be listed in London, at least a mid-cap, pay a dividend and not a bank or miner.

Previous holdings like ARM, Tescos and Vodafone are too expensive to buy at the moment. I considered Marks & Spencer but I would really like something with a bit more growth potential.

Could Shire be the answer? Shire described itself as a "global speciality biopharmaceutical company." It focuses on ADHD and rare genetic disorders. Revenue is growing at 30%, the market cap. is just under £7 billion and 2008 EPS should be above 50p. That puts it on a 2008 PE of 22.

That is not cheap but then there are not that many growth companies of the quality of Shire on the LSE.

The news that really attracted me to Shire was the announcement that it is partnering with US biotech minnow Amicus Therapeutics to bring its biological chaperone drugs to market outside the US. Amicus's drugs target lysosome storage disorders so it is a potential competitor to Genzyme. Amicus's drugs have the great advantage of being an oral therapy rather than delivered by injection.

I would have liked to have invested in Amicus but it is too risky for my tastes - no revenue and a small pipeline. However now that Shire is working with Amicus I can gain exposure to these exciting new drugs by buying into Shire.

Unfortunately most of Shire's sales are in dollars so I will have to grit my teeth and hope that one day the dollar stops falling.

So Shire it is. I just can't get enough of biotechs!