10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period ended September 30, 2008

Commission File Number: 0-29630

SHIRE PLC

(Exact name of registrant as specified in its charter)

Jersey (State or other jurisdiction of incorporation or organization)	98-0484822 (I.R.S. Employer Identification No.)
Hampshire International Business Park, Chineham, Basingstoke, Hampshire, England, RG24 8EP (Address of principal executive offices and zip code)	+44 1256 894 000 (Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.

Large accelerated filer [X]      Accelerated filer [  ] Non-accelerated filer [  ] Smaller reporting company [  ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [  ] No [X]

As at November 6, 2008 the number of outstanding ordinary shares of the Registrant was 560,026,882.

THE “SAFE HARBOR” STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Statements included herein that are not historical facts are forward-looking statements. Such forward-looking statements involve a number of risks and uncertainties and are subject to change at any time. In the event such risks or uncertainties materialize, the Company’s results could be materially affected. The risks and uncertainties include, but are not limited to, risks associated with: the inherent uncertainty of pharmaceutical research, product development, manufacturing and commercialization including, but not limited to, the establishment in the market of VYVANSE® (lisdexamfetamine dimesylate) (Attention Deficit and Hyperactivity Disorder (“ADHD”)); the impact of competitive products, including, but not limited to, the impact of those on the Company’s ADHD franchise; patents, including but not limited to, legal challenges relating to the Company’s ADHD franchise; government regulation and approval, including but not limited to the expected product approval date of INTUNIV™ (guanfacine extended release) (ADHD); the Company’s ability to secure new products for commercialization and/or development; the Company’s ability to successfully integrate its stake in Jerini AG, as well as realize the anticipated benefits of the acquisition; and other risks and uncertainties detailed from time to time in the Company’s filings with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2007.

The following are trademarks either owned or licensed by Shire plc or its subsidiaries which are the subject of trademark registrations in certain territories, or which are owned by third parties as indicated and referred to in this Form 10-Q:

Shire Product	Active ingredient
ADDERALL® XR	(mixed salts of a single-entity amphetamine)
ADDERALL®	(mixed salts of a single-entity amphetamine)
AMIGAL™	(migalastat hydrochloride) (trademark of Amicus Therapeutics (“Amicus”))
CALCICHEW® range	(calcium carbonate with or without vitamin D3)
CARBATROL®	(carbamazepine - extended-release capsules)
COMBIVIR®	(lamivudine) (trademark of GlaxoSmithKline (“GSK”))
DAYTRANA®	(methylphenidate transdermal system)
DYNEPO®	(epoetin delta) (trademark of Sanofi-Aventis)
ELAPRASE®	(idursulfase)
EPIVIR®	(lamivudine) (trademark of GSK)
EPZICOM®/KIVEXA (EPZICOM)	(lamivudine) (trademark of GSK)
FIRAZYR®	(icatibant)
FOSRENOL®	(lanthanum carbonate)
INTUNIV™	(guanfacine – extended release)
JUVISTA®	(human TGFβ3) (trademark of Renovo)
LIALDA®	(mesalamine)
MEZAVANT®	(mesalazine)
PENTASA®	(mesalamine) (trademark of Ferring)
PLICERA™	(isofagomine tartrate) (trademark of Amicus)
RAZADYNE®	(galantamine) (trademark of Johnson & Johnson (“J&J”))
RAZADYNE® ER	(galantamine) (trademark of J&J)
REMINYL®	(galantamine hydrobromide) (UK and Republic of Ireland)
REMINYL®	(galantamine) (trademark of J&J, excluding UK and Republic of Ireland)
REMINYL XL™	(galantamine hydrobromide) (UK and Republic of Ireland)
REMINYL XL™	(galantamine) (trademark of J&J, excluding UK and Republic of Ireland)
REPLAGAL®	(agalsidase alfa)
SEASONIQUE®	(trademark of Barr Laboratories Inc. (“Barr”))
VYVANSE®	(lisdexamfetamine dimesylate)
XAGRID ™	(anagrelide hydrochloride)
ZEFFIX®	(lamivudine) (trademark of GSK)
3TC®	(lamivudine) (trademark of GSK)

1

SHIRE PLC

Form 10-Q for the three months to September 30, 2008

Table of contents

		Page
PART I   FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS
	Unaudited Consolidated Balance Sheets at September 30, 2008 and December 31, 2007	3
	Unaudited Consolidated Statements of Operations for the three months and nine months to September 30, 2008 and September 30, 2007	5
	Unaudited Consolidated Statement of Changes in Shareholders’ Equity for the year to December 31, 2007	7
	Unaudited Consolidated Statement of Changes in Shareholders’ Equity for the nine months to September 30, 2008	8
	Unaudited Consolidated Statements of Comprehensive Income/(Loss) for the three months and nine months to September 30, 2008 and September 30, 2007	9
	Unaudited Consolidated Statements of Cash Flows for the nine months to September 30, 2008 and September 30, 2007	10
	Notes to the Unaudited Consolidated Financial Statements	12
ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		39
ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		58
ITEM 4.  CONTROLS AND PROCEDURES		58
PART II  OTHER INFORMATION		59
ITEM 1.  LEGAL PROCEEDINGS		59
ITEM 1A.  RISK FACTORS		59
ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		59
ITEM 3.  DEFAULTS UPON SENIOR SECURITIES		59
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS		59
ITEM 5.  OTHER INFORMATION		60
ITEM 6.  EXHIBITS		61

2

PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

SHIRE PLC

UNAUDITED CONSOLIDATED BALANCE SHEETS

	Notes		September 30, 2008 $’M		December 31,  2007 $’M
ASSETS
Current assets:
Cash and cash equivalents				473.3		762.5
Restricted cash				31.8		39.5
Accounts receivable, net		5		489.8		441.5
Inventories, net		6		149.6		174.1
Assets held for sale		7		40.0		10.6
Deferred tax asset				97.3		143.3
Prepaid expenses and other current assets		8		143.6		125.3
Total current assets				1,425.4		1,696.8
Non current assets:
Investments		9		52.9		110.2
Property, plant and equipment, net				496.5		368.6
Goodwill				335.5		219.4
Other intangible assets, net		10		1,842.7		1,764.5
Deferred tax asset				124.1		143.7
Other non-current assets				76.7		26.9
Total assets				4,353.8		4,330.1
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses		11		703.1		674.2
Deferred tax liability				4.2		11.3
Liability to dissenting shareholders		20		567.5		480.2
Other current liabilities		12		64.0		96.5
Total current liabilities				1,338.8		1,262.2
Non-current liabilities
Convertible bonds				1,100.0		1,100.0
Other long term debt				32.2		32.9
Deferred tax liability				339.6		332.4
Other non-current liabilities		13		397.2		375.6
Total non-current liabilities				1,869.0		1,840.9
Total liabilities				3,207.8		3,103.1
Commitments and contingencies		14

3

SHIRE PLC

UNAUDITED CONSOLIDATED BALANCE SHEETS (continued)

	Notes		September 30, 2008 $’M			December 31, 2007 $’M
Minority interest				2.4			-
Shareholders’ equity:
Common stock of 5p par value; 1,000 million shares authorized; and 560.0 million shares issued and outstanding (2007: 750 million shares authorized; and 556.8 million shares issued and outstanding)				55.5			55.2
Exchangeable shares: nil shares issued and outstanding (2007: 0.7 million)		17		-			33.6
Treasury stock: 21.0 million shares (2007 : 10.3 million shares)				(410.9	)		(280.8	)
Additional paid-in capital				2,575.2			2,503.4
Accumulated other comprehensive income				85.6			55.7
Accumulated deficit				(1,161.8	)		(1,140.1	)
Total shareholders’ equity				1,143.6			1,227.0
Total liabilities and shareholders’ equity				4,353.8			4,330.1

The accompanying notes are an integral part of these unaudited consolidated financial statements.

4

SHIRE PLC

 UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

	Notes		3 months to September 30, 2008 $’M			3 months to September 30, 2007(1) $’M			9 months to September 30, 2008 $’M			9 months to September 30, 2007(1) $’M
Revenues:
Product sales				712.5			543.1			2,049.9			1,508.8
Royalties				60.8			61.9			190.7			185.4
Other revenues				5.3			3.7			15.8			17.6
Total revenues				778.6			608.7			2,256.4			1,711.8
Costs and expenses:
Cost of product sales (1) (2) (3)				84.2			83.4			317.4			224.7
Research and development (1) (3)				127.1			181.4			394.4			365.7
Selling, general and administrative (1) (2)				320.4			328.4			1,083.7			847.5
In-process R&D charge				120.5			-			255.5			1,896.0
Gain on sale of product rights		4		(4.0	)		(7.1	)		(20.7	)		(12.1	)
Integration costs				7.5			-			7.5			1.3
Total operating expenses				655.7			586.1			2,037.8			3,323.1
Operating income/(loss)				122.9			22.6			218.6			(1,611.3	)
Interest income		16		3.8			8.0			23.0			42.7
Interest expense		20		(92.9	)		(18.0	)		(127.0	)		(53.8	)
Other (expenses)/income, net				(52.0	)		(1.6	)		(38.6	)		0.7
Total other expenses, net				(141.1	)		(11.6	)		(142.6	)		(10.4	)
(Loss)/income from continuing operations  before income taxes, minority interest and equity in earnings of equity method investees				(18.2	)		11.0			76.0			(1,621.7	)
Income taxes				(18.7	)		23.2			(63.0	)		(43.9	)
Minority interest				1.3			-			1.3			-
Equity in earnings of equity method investees, net of taxes				1.6			0.5			1.3			1.7
(Loss)/income from continuing operations				(34.0	)		34.7			15.6			(1,663.9	)
Loss from discontinued operations				(0.9	)		-			(0.9	)		-
Net (loss)/income				(34.9	)		34.7			14.7			(1,663.9	)

(1) For the three months to September 30, 2007 $4.6 million of depreciation was reclassified from Selling, general and administrative ("SG&A") costs to Cost of product sales ($2.1 million) and Research and development costs ($2.5 million).  For the nine months to September 30, 2007 $13.4 million of depreciation was reclassified from SG&A costs to Cost of product sales ($6.0 million) and Research and development costs ($7.4 million).

(2) Cost of product sales includes amortization of intangible assets relating to favorable manufacturing contracts of $0.4 million for the three months to September 30, 2008 (2007: $0.5 million) and $1.3 million for the nine months to September 30, 2008 (2007: $0.5 million). SG&A costs includes amortization and impairment charges of intangible assets relating to intellectual property rights acquired of $30.1 million for the three months to September 30, 2008 (2007: $31.1 million) and $182.4 million for the nine months to September 30, 2008 (2007: $64.0 million).

(3) Costs, predominantly relating to manufacturing set-up costs for new products, of $1.8 million and $5.4 million for the three months and nine months to September 30, 2007, have been reclassified from Research and development costs to Cost of product sales.

5

SHIRE PLC

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (continued)

	Notes	3 months to September 30,  2008			3 months to September 30,  2007			9 months to September 30, 2008			9 months to September 30, 2007
Earnings per ordinary share - basic
(Loss)/ earnings from continuing operations			(6.3c	)		6.4	c		2.9	c		(308.8c	)
Loss from discontinued operations			(0.2c	)		-			(0.2	c)		-
(Loss)/ earnings per ordinary share - basic			(6.5c	)		6.4	c		2.7	c		(308.8c	)
Earnings per ordinary share - diluted
(Loss)/earnings from continuing operations			(6.3c	)		6.3	c		2.9	c		(308.8c	)
Loss from discontinued operations			(0.2c	)		-			(0.2	c)		-
(Loss)/earnings per ordinary share – diluted			(6.5c	)		6.3	c		2.7	c		(308.8c	)
Weighted average number of shares (millions):
Basic	18		540.3			546.4			542.6			538.9
Diluted	18		540.3			554.7			545.3			538.9

The accompanying notes are an integral part of these unaudited consolidated financial statements.

6

SHIRE PLC

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

	Common stock $’M			Common stock Number of shares M’s		Exchange- able shares $’M			Exchange- able shares Number of shares M’s			Treasury stock $’M			Additional paid-in capital $’M			Accumu- lated other compre- hensive  income $’M			Retained Earnings/ (Accumu- lated deficit) $’M			Total share- holders’ equity $’M
As at January 1, 2007		43.7			506.7		59.4			1.3			(94.8	)		1,493.2			87.8			353.0			1,942.3
Effect of Scheme of Arrangement (cancellation)(1)		(43.7	)		-		-			-			-			(1,493.2	)		-			-			(1,536.9	)
Effect of Scheme of Arrangement (issue) (1)		50.2			-		-			-			-			1,486.7			-			-			1,536.9
As at January 1, 2007 (restated)		50.2			506.7		59.4			1.3			(94.8	)		1,486.7			87.8			353.0			1,942.3
Net loss for the period		-			-		-			-			-			-			-			(1,451.8	)		(1,451.8	)
Foreign currency translation		-			-		-			-			-			-			(15.5	)		-			(15.5	)
Shares issued, net of issue costs		4.3			42.8		-			-			-			873.0			-			-			877.3
Exchange of exchangeable shares		0.1			1.7		(25.8	)		(0.6	)		-			25.7			-			-			-
Warrants exercised		0.2			1.3		-			-			-			12.8			-			-			13.0
Options exercised		0.4			4.3		-			-			-			30.0			-			-			30.4
Share-based compensation		-			-		-			-			-			75.2			-			-			75.2
Shares purchased by the Employee Share Ownership Trust (“ESOT”)		-			-		-			-			(186.0	)		-			-			-			(186.0	)
Unrealized holding loss on available-for-sale securities, net of taxes		-			-		-			-			-			-			(16.5	)		-			(16.5	)
Realized gain on available-for-sale securities, net of taxes		-			-		-			-			-			-			(0.1	)		-			(0.1	)
Dividends		-			-		-			-			-			-			-			(41.3	)		(41.3	)
As at December 31, 2007		55.2			556.8		33.6			0.7			(280.8	)		2,503.4			55.7			(1,140.1	)		1,227.0

(1) Net increase to common stock of the Scheme of arrangement $6.5 million, see Note 2 for further details.

The accompanying notes are an integral part of these unaudited consolidated financial statements.

Dividends per share

During the year to December 31, 2007 the Company paid dividends totaling 7.39 US cents per ordinary share, equivalent to 22.18 US cents per American Depositary Share (“ADS”), and 25.32 Canadian cents per exchangeable share.

7

SHIRE PLC

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (continued)

	Comm- on stock $’M		Common stock Number of shares M’s		Exchange- able shares $’M			Exchange- able shares Number of shares M’s			Treasury stock $’M			Additional paid-in capital $’M			Accumu- lated other compre- hensive income $’M			Accumu- lated deficit $’M			Total share- holders’ equity $’M
As at January 1, 2008		55.2		556.8		33.6			0.7			(280.8	)		2,503.4			55.7			(1,140.1	)		1,227.0
Net income for the period		-		-		-			-			-			-			-			14.7			14.7
Foreign currency translation		-		-		-			-			-			-			20.7			-			20.7
Exchange of exchangeable shares		0.2		2.3		(33.6	)		(0.7	)		-			33.4			-			-			-
Costs associated with shares issued through  Scheme of Arrangement		-		-		-			-			-			(2.9	)		-			-			(2.9	)
Options exercised		0.1		0.9		-			-			-			1.6			-			-			1.7
Share-based compensation		-		-		-			-			-			52.0			-			-			52.0
Tax deficit associated with exercise of stock options		-		-		-			-			-			(2.2	)		-			-			(2.2	)
Shares purchased by the ESOT		-		-		-			-			(140.2	)		-			-			-			(140.2	)
Shares released by ESOT to satisfy exercise of stock options		-		-		-			-			10.1			(10.1	)		-			-			-
Unrealized holding loss on available-for-sale securities, net of taxes		-		-		-			-			-			-			(39.5	)		-			(39.5	)
Realized gain on available-for-sale securities, net of taxes		-		-		-			-			-			-			(5.4	)		-			(5.4	)
Other than temporary impairment of available for sale securities		-		-		-			-			-			-			54.1			-			54.1
Dividends		-		-		-			-			-			-			-			(36.4	)		(36.4	)
As at September 30, 2008		55.5		560.0		-			-			(410.9	)		2,575.2			85.6			(1,161.8	)		1,143.6

The accompanying notes are an integral part of these unaudited consolidated financial statements.

Dividends per share

During the nine months to September 30, 2008 the Company declared and paid dividends of 6.47 US cents per ordinary share (equivalent to 19.41 US cents per ADS) totaling $36.4 million.

8

SHIRE PLC

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/ (LOSS)

	3 months to September 30,  2008			3 months to September 30,  2007			9 months to September 30,  2008			9 months to September 30,  2007
	$’M				$’M			$’M			$’M
Net (loss)/income		(34.9	)		34.7			14.7			(1,663.9	)
Other comprehensive income/(loss):
Foreign currency translation adjustments		28.1			(5.0	)		20.7			(13.9	)
Unrealized holding loss on available-for-sale securities, net of taxes of $nil (2007: $nil)		(10.8	)		(4.4	)		(39.5	)		(4.2	)
Other than temporary impairment of available-for-sale securities, net of taxes of $nil (2007: $nil)		54.1			-			54.1			-
Realized gain on available-for-sale securities, net of taxes of $4.0 million  (2007: $nil)		-			-			(5.4	)		-
Comprehensive income/(loss)		36.5			25.3			44.6			(1,682.0	)

The components of accumulated other comprehensive income as at September 30, 2008 and December 31, 2007 are as follows:

	September 30, 2008 $’M		December 31, 2007 $’M
Foreign currency translation adjustments		85.6		64.9
Unrealized holding loss on available-for-sale securities, net of taxes of $nil (2007: $5.2 million)		-		(9.2	)
Accumulated other comprehensive income		85.6		55.7

The accompanying notes are an integral part of these unaudited consolidated financial statements.

9

SHIRE PLC

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

	9 months to September 30, 2008 $’M			9 months to September 30, 2007 $’M
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss)		14.7			(1,663.9	)
Adjustments to reconcile net income/(loss) to net cash provided by operating activities:
Loss from discontinued operations		0.9			-
Depreciation and amortization		145.4			111.8
Amortization of deferred financing charges		3.8			10.6
Interest on building financing obligation		2.6			-
Share-based compensation		52.0			34.1
In-process research and development charge		120.5			1,896.0
Impairment of intangible assets		90.4			-
Impairment of available-for-sale securities		54.1			-
Gain on sale of long-term assets		(9.4	)		-
Gain on sale of product rights		(20.7	)		(12.1	)
Movement in deferred taxes		13.9			(35.8	)
Equity in earnings of equity method investees		(1.3	)		(1.7	)
Minority interest		(1.3	)		-
Change in operating assets and liabilities:
Increase in accounts receivable		(40.7	)		(64.2	)
Increase in sales deduction accrual		36.9			19.3
Decrease/(increase) in inventory		39.6			(46.2	)
(Increase)/decrease in prepayments and other current assets		(0.2	)		2.7
(Increase)/decrease in other assets		(53.5	)		1.3
Increase in accounts and notes payable and other liabilities		63.3			103.8
Increase in deferred revenue		7.4			45.6
Returns on investment from joint venture		7.1			6.8
Net cash provided by operating activities (A)		525.5			408.1
CASH FLOWS FROM INVESTING ACTIVITIES
Movement in short-term investments		-			55.8
Movement in restricted cash		7.7			(12.0	)
Purchases of subsidiary undertakings, net of cash acquired		(462.5	)		(2,458.6	)
Expenses relating to the acquisition of New River Pharmaceuticals Inc (“New River”)		-			(60.4	)
Purchase of long-term investments		(1.3	)		(56.7	)
Purchase of property, plant and equipment		(166.5	)		(62.1	)
Purchase of intangible assets		(25.0	)		(58.2	)
Proceeds from disposal of long term assets		10.3			-
Proceeds from disposal of property, plant and equipment		1.8			-
Proceeds/deposits received from sale of product rights		5.0			24.3
Returns of equity investments		0.4			2.2
Net cash used in investing activities (B)		(630.1	)		(2,625.7	)

10

SHIRE PLC

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

	9 months to September 30,  2008 $’M			9 months to September 30,  2007 $’M
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from drawings under bank facility		-			1,300.0
Repayment of drawings under bank facility		-			(1,300.0	)
Proceeds from issue of Shire 2.75% convertible bonds due 2014		-			1,100.0
Redemption of New River 3.5% convertible notes due 2013		-			(279.4	)
Proceeds from exercise of New River purchased call option		-			141.8
Payment of debt arrangement and issuance costs		-			(32.8	)
Payment under building financing obligation		(1.3	)		-
Proceeds from exercise of options		1.7			25.6
(Costs)/proceeds from issue of common stock, net		(2.9	)		877.3
Proceeds from exercise of warrants		-			13.0
Payment of dividend		(36.4	)		(29.4	)
Payments to acquire shares by ESOT		(140.2	)		(168.5	)
Net cash (used in) / provided by financing activities (C)		(179.1	)		1,647.6
Effect of foreign exchange rate changes on cash and cash equivalents (D)		(5.5	)		6.0
Net decrease in cash and cash equivalents (A+B+C+D)		(289.2	)		(564.0	)
Cash and cash equivalents at beginning of period		762.5			1,126.9
Cash and cash equivalents at end of period		473.3			562.9

Supplemental information:	9 months to  September 30, 2008 $’M			9 months to September 30, 2007 $’M
Interest received		24.3			45.1
Interest paid		(25.1	)		(9.7	)
Income taxes paid		(106.2	)		(24.9	)
Non cash activities:
Proceeds from product out licensing:
Equity in Avexa Ltd (“Avexa”).		5.0			2.9

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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SHIRE PLC

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies

(a) Basis of Presentation

These interim financial statements of Shire plc (formerly Shire Limited) and its subsidiaries (collectively “Shire” or “the Company”) and other financial information included in this Form 10-Q, are unaudited.  They have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and US Securities and Exchange Commission (“SEC”) regulations for interim reporting.

The December 31, 2007 balance sheet was derived from audited financial statements but does not include all disclosures required by US GAAP.  However, the Company believes that the disclosures are adequate to make the information presented not misleading.

These interim financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year to December 31, 2007.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted from these interim financial statements.  However, these interim financial statements include all adjustments, which are, in the opinion of management, necessary to fairly state the results of the interim periods.  Interim results are not necessarily indicative of results to be expected for the full year.

(b) Use of estimates in interim financial statements

The preparation of interim financial statements, in conformity with US GAAP and SEC regulations for interim reporting, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.  Estimates and assumptions are primarily made in relation to provisions for litigation, valuation of intangible assets (including those acquired through business combinations), the valuation of equity investments, sales deductions, income taxes and share-based payments.

(c) Accounting pronouncements adopted during the period

EITF 07-3

In June 2007, the Emerging Issues Task Force (“EITF”) reached a consensus regarding EITF 07-3, “Accounting for Non-refundable Advance Payments for Goods or Services to Be Used in Future Research and Development Activities” (“EITF 07-3”).  The scope of this Issue is limited to non-refundable advance payments for goods and services to be used or rendered in future research and development activities.  The EITF concluded that non-refundable advance payments for future research and development activities should be deferred and capitalized on the balance sheet. Such amounts should be recognized as an expense as the related goods are delivered or the related services are performed. Entities should continue to evaluate whether they expect the goods to be delivered or services to be rendered. If an entity does not expect the goods to be delivered or services to be rendered, the capitalized advance payment should be charged to expense.  On January 1, 2008 the Company adopted EITF 07-3. The adoption of EITF 07-3 had no impact on the Company’s financial statements as at January 1, 2008.

SFAS No. 157

On January 1, 2008 the Company adopted Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measurements” (“SFAS No. 157”) for financial assets and liabilities, which provides a single definition of fair value, establishes a framework for the measurement of fair value and expands disclosure about the use of fair value to measure assets and liabilities. The adoption of SFAS No. 157 for financial assets and liabilities did not have a material impact on the Company’s financial statements as at January 1, 2008.

SFAS No. 159

On January 1, 2008 the Company adopted SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities - Including an Amendment of FASB Statement No. 115” (“SFAS No. 159”). This standard permits an entity to choose to measure many financial instruments and certain other items at fair value.  The unrealized gains and losses on items for which the fair value option has been elected will be reported in earnings at each subsequent reporting date.  The fair value option: (a) may be applied instrument by instrument, with a few exceptions, such as investments otherwise accounted for by the equity method; (b) is irrevocable (unless a new election date occurs); and (c) is applied only to entire instruments and not to portions of instruments. The Company did not elect to fair value any items on adoption, and the adoption of SFAS No. 159 did not have a material impact on the Company’s financial statements.

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(d) New accounting pronouncements to be adopted in future periods

EITF 07-5

In June 2008, the FASB issued EITF 07-5 "Determining whether an Instrument (or Embedded Feature) is indexed to an Entity's Own Stock" ("EITF No. 07-5"). EITF 07-5 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Early application is not permitted. Paragraph 11(a) of SFAS No. 133 "Accounting for Derivatives and Hedging Activities" ("SFAS 133") specifies that a contract that would otherwise meet the definition of a derivative but is both (a) indexed to the Company's own stock and (b) classified in stockholders' equity in the statement of financial position would not be considered a derivative financial instrument. EITF 07-5 provides a new two-step model to be applied in determining whether a financial instrument or an embedded feature is indexed to an issuer's own stock and thus able to qualify for the SFAS No. 133 paragraph 11(a) scope exception. The Company is currently evaluating the impact of adoption of EITF 07-5.

SFAS No. 162

In May 2008 the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles” (“SFAS No. 162”). SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements under US GAAP. SFAS No. 162 is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles”. It is not expected that SFAS No. 162 will change current practice.

FASB Staff Position (FSP) No. APB 14-1

In May 2008 the FASB issued FSP No. APB 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)” (“FSP No. APB 14-1”). This FSP clarifies that convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement) do not fall within the scope of paragraph 12 of Accounting Principles Board (APB) Opinion No. 14, “Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants” (“APB 14”). It requires issuers of such instruments to separately account for the liability and equity components of those instruments by allocating the proceeds from issuance of the instrument between the liability component and the embedded conversion option (i.e., the equity component). FSP No. APB 14-1 is effective for fiscal years beginning after December 15, 2008 and for interim periods within those fiscal years. It is required to be applied retrospectively to convertible debt instruments that are within the scope of the guidance and were outstanding during any period presented in the financial statements. A cumulative effect adjustment must be recognized as of the beginning of the first period presented. Early adoption of the guidance is not permitted. The Company is currently evaluating the impact of the adoption of FSP No. APB 14-1.

FASB Staff Position (FSP) No. FAS 142-3

In April 2008 the FASB issued FSP No. FAS 142-3, “Determination of the Useful Life of Intangible Assets” (“FSP No. FAS 142-3”). This FSP amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142, “Goodwill and Other Intangible Assets” (“SFAS No. 142”). The intent of FSP No. FAS 142-3 is to improve the consistency between the useful life of an intangible asset determined under SFAS No. 142 and the period of expected cash flows used to measure the fair value of the asset under FASB Statement No. 141, “Business Combinations”, (“SFAS No. 141”).  FSP No. FAS 142-3 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Early adoption is prohibited. The Company is currently evaluating the impact of the adoption of FSP No. FAS 142-3.

SFAS No. 161

In March 2008 the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities – an amendment of FASB No. 133” (“SFAS No. 161”).  SFAS No. 161 requires enhanced disclosures about an entity’s derivative and hedging activities and thereby improves the transparency of financial reporting. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008 with early application encouraged. This Statement encourages, but does not require, comparative disclosures for earlier periods at initial adoption. The Company is currently evaluating the impact of the adoption of SFAS No. 161.

FASB Staff Position (FSP) No. FAS 157-2

In February 2008 the FASB issued FSP No. FAS 157-2, “Effective Date of FASB Statement No. 157” (“FSP No. FAS 157-2”). This FSP delays the effective date of SFAS No. 157 for non-financial assets and non-financial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). SFAS No. 157 will therefore be applicable to non-financial assets and liabilities for the Company’s fiscal year commencing January 1, 2009. The Company is currently reviewing the impact of the adoption of SFAS No. 157 for all non-financial assets and liabilities on its financial statements.

EITF 07-1

In December 2007 the EITF reached a consensus regarding EITF 07-1, “Accounting for Collaborative Arrangements” (“EITF 07-1”).  The objective of this EITF 07-1 is to define collaborative arrangements and to establish reporting requirements for transactions between participants in a collaborative arrangement and between participants in the arrangement and third parties. EIFT 07-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008 and interim periods within those fiscal years. EITF 07-1 shall be applied retrospectively to all prior periods presented for all collaborative arrangements existing as of the effective date. The Company is currently evaluating the impact of the adoption of EITF 07-1.

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SFAS No. 160

In December 2007 the FASB issued SFAS No. 160, “Non-controlling Interests in Consolidated Financial Statements - An Amendment of ARB No. 51” (“SFAS No. 160”). SFAS No. 160 establishes new accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. Specifically, this statement requires the recognition of a non-controlling interest (minority interest) as equity in the consolidated financial statements, separate from the parent's equity. The amount of net income attributable to the non-controlling interest will be included in consolidated net income on the face of the income statement. SFAS No. 160 also includes expanded disclosure requirements regarding the interests of the parent and its non-controlling interest.  SFAS No. 160 is effective for fiscal years, and interim periods beginning after January 1, 2009. The Company is currently evaluating the impact of the adoption of SFAS No. 160.

SFAS No. 141(R)

In December 2007 the FASB issued SFAS No. 141 (Revised 2007), “Business Combinations” (“SFAS No. 141(R)”). SFAS No. 141(R) will significantly change the accounting for business combinations. Under SFAS No. 141(R), an acquiring entity will be required to recognize all the assets acquired and liabilities assumed in a transaction at the acquisition-date fair value with limited exceptions. It also amends the accounting treatment for certain specific items including acquisition costs and non-controlling minority interests and includes a substantial number of new disclosure requirements. SFAS No. 141(R) applies prospectively to business combinations for which the acquisition date is on or after January 1, 2009. The Company is currently evaluating the impact of the adoption of SFAS No. 141(R).

2. Change in reporting entity

On May 23, 2008 Shire Limited (now known as Shire plc), a public company limited by shares incorporated in Jersey and tax resident in the Republic of Ireland (“Shire”), became the holding company of Shire plc (the former holding company of the Shire Group) (“Old Shire”), a public limited company incorporated in England and Wales, pursuant to a scheme of arrangement under Sections 895 to 899 of the United Kingdom Companies Act 2006 that was approved by the High Court of Justice in England and Wales and the shareholders of Old Shire (the “Scheme of Arrangement”). Pursuant to the Scheme of Arrangement, ordinary shares, each having a nominal value of £0.05, of Old Shire (“Shire Ordinary Shares”) were exchanged for ordinary shares, each having a nominal value of £0.05, of Shire Limited (“Shire Limited Ordinary Shares”), on a one-for-one basis. As a result of the Scheme of Arrangement, Old Shire became a wholly-owned subsidiary of Shire Limited. The Shire Limited Ordinary Shares carry substantially the same rights as did the Shire Ordinary Shares.  The Scheme of Arrangement did not involve any payment for the Shire Limited Ordinary Shares.

Shire Limited immediately after the effectiveness of the Scheme of Arrangement had the same Board of Directors, management and corporate governance arrangements as Old Shire had immediately prior thereto. The consolidated assets and liabilities of Shire Limited immediately after the effective time of the Scheme of Arrangement are substantially the same as the consolidated assets and liabilities of Old Shire immediately prior thereto.

The Shire Ordinary Shares underlying the Shire American Depositary Shares (the “Shire ADSs”), each representing three Shire Ordinary Shares, participated in the Scheme of Arrangement like all other Shire Ordinary Shares. Upon the Scheme of Arrangement becoming effective, the Shire ADSs remained outstanding but became Shire Limited ADS’s, each representing three Shire Limited Ordinary Shares. The Scheme of Arrangement did not involve any payment for the Shire Limited ADSs.

In accordance with SFAS No. 141, the corporate restructuring has been accounted for as a reorganization of entities under common control. Accordingly, the historical financial statements prior to the reorganization are labeled as those of Shire Limited, but continue to represent the operations of Old Shire.

Earnings per share are unaffected by the reorganization.

All Old Shire stock options granted to directors and employees under stock option plans that were in existence immediately prior to the Scheme of Arrangement were exchangeable for stock options in Shire Limited on a one-for-one basis with no change in any terms or conditions, other than the acceleration of the vesting date of certain awards granted under the Shire plc 2000 Executive Share Option Scheme (“2000 Executive Scheme”) to the date of

14

the Scheme of Arrangement, May 23, 2008. The number of stock options for which this exchange did not take place was not material.

For presented periods prior to the 2008 corporate restructuring, the equity of Shire Limited represents the historical equity of Old Shire, restated to reflect the change in the nominal value of common stock as expressed in US dollars resulting from the corporate restructuring. The $6.5 million increase in the value of common stock at January 1, 2007 (being the earliest period presented) to $50.2 million on restatement is due to differences between the historic exchange rates used to convert Shire’s Sterling denominated nominal share capital into US Dollars, and the exchange rate at the time of the corporate restructuring. The offset is recorded in additional paid-in capital.

Shire Limited was incorporated on January 28, 2008. Prior to May 23, 2008 Shire Limited had not commenced trading or made any profits or trading losses. On October 1, 2008 Shire Limited changed its name to Shire plc following the approval of the change of name by shareholders at the Company’s Annual General Meeting.

3. Business combinations

Jerini AG acquisition

On July 3, 2008 the Company announced that it was launching a voluntary public takeover offer for all outstanding shares in Jerini AG (“Jerini”), a German corporation, at a price of EUR 6.25 per share. During the third quarter of 2008 the Company, through its indirect wholly owned subsidiary, Shire Deutschland Investments GmbH, acquired a 92.7% voting interest in Jerini. The acquisition added Jerini’s hereditary angiodema (“HAE”), product FIRAZYR (icatibant), to Shire’s portfolio.

By August 6, 2008 the Company had acquired 80.1% of the voting interests in Jerini for a cash consideration of $456.3 million, by (i) subscribing for new Jerini shares; (ii) acquiring voting interests through the completion of sale and purchase agreements entered into with institutional shareholders and certain members of Jerini’s Management and Supervisory Boards; and (iii) acquiring voting interests through market purchases.

During August and September 2008 the Company acquired additional voting interests totaling 12.6% of Jerini’s issued share capital, for a cash consideration of $65.9 million obtained by shares tendered during the Offer process, and on and off market purchases. These additional voting interests have been accounted for as step-acquisitions using the purchase method of accounting.

By September 30, 2008 Shire had acquired a 92.7% voting interest in Jerini for a total consideration of $522.2 million, represented by Jerini shares, ($506.5 million), the cash cost of cancelling Jerini stock options ($9.4 million) and direct costs of acquisition ($6.3 million).

The acquisition of Jerini has been accounted for as a purchase business combination in accordance with SFAS 141, “Business Combinations” (“SFAS No. 141”). Under the purchase method of accounting, the assets acquired and the liabilities assumed from Jerini are recorded at the date of acquisition at their fair value. Financial statements and reported results of operations of Shire issued after the acquisition of this majority holding will reflect these values, with the results of Jerini included from August 1, 2008, in the Consolidated Statement of Operations. The purchase price has been allocated on a preliminary basis to the fair value of assets acquired and liabilities assumed. The final fair values of assets acquired and liabilities assumed will be determined as soon as possible and, in any event, no later than one year from the acquisition date if such fair values can be measured in this period. To the extent that estimates need to be adjusted, Shire will do so in future periods in accordance with SFAS No. 141.

15

The following table presents the Company’s preliminary allocation of the purchase price to the assets acquired and liabilities assumed at their fair values based on the Company’s 80.1% voting interest acquired by August 6, 2008:

	Fair value
		$M
ASSETS
Current assets:
Cash and cash equivalents		56.7
Restricted cash		0.4
Inventories, net		1.9
Assets held for sale		29.6
Other current assets		4.9
Total current assets		93.5
Property, plant and equipment		3.6
Goodwill		115.8
Other intangible assets
- currently marketed product		257.6
- in-process R&D		104.1
Deferred tax asset		0.5
Total assets		575.1
LIABILITIES
Current liabilities:		31.3
Deferred tax liability		76.3
Other long-term liabilities		0.8
Total liabilities		108.4
Estimated fair value of identifiable assets acquired and liabilities assumed		466.7
Minority interests		(10.4	)
Cost of 80.1% voting interest acquired		456.3

In respect of the subsequent step acquisitions made during August and September 2008 the Company has recognized additional goodwill of $13.6 million, intangible assets in respect of the currently marketed product of $39.5 million and in-process research and development (IPR&D) of $16.4 million.

 (a) Other intangible assets, currently marketed product

Other intangible assets includes $297.1 million (being $257.6 million acquired as of August 6, 2008 and $39.5 million in the subsequent step  acquisitions) relating to intellectual property rights in respect of Jerini’s currently marketed product, FIRAZYR, which received marketing authorization from the European Commission in July 2008 for the treatment of acute HAE in the EU. These intellectual property rights include the right to develop, use, market, sell and/or offer for sale the technical processes, intellectual property and institutional understanding (including the way in which FIRAZYR reacts in body, an understanding of the mechanisms of action which allow FIRAZYR to work and the knowledge related to the associated clinical and marketing studies performed to obtain approval of FIRAZYR).  The fair value of FIRAZYR in the EU has been determined using an income approach applying the multi-period excess earnings method, based on the present value of incremental after tax cash flows attributable to the asset after the deduction of contributory asset charges for the assets employed (including working capital, the assembled workforce and other fixed assets).

This intangible asset has an estimated useful life of 17 years, will be amortized on a straight line basis, and has been allocated to the HGT reporting segment.

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(b) Other intangible assets, IPR&D

IPR&D is defined by FASB Interpretation No. 4, "Applicability of FASB Statement No. 2 to Business Combinations Accounted for by the Purchase Method" ("FIN 4"), as being a development project that has been initiated and has achieved material progress but (i) has not yet reached technological feasibility or has not yet received the appropriate regulatory approval, (ii) has no alternative future use, and (iii) the fair value is estimable with reasonable certainty. A project-by-project valuation using the guidance in SFAS No. 141 and the American Institute of Certified Public Accountants (AICPA) Practice Aid "Assets Acquired in a Business Combination to Be Used In Research and Development Activities: A Focus on Software, Electronic Devices and Pharmaceutical Industries" has been performed to determine the fair value of research and development projects of Jerini which were in-process, but not yet completed as of the acquisition date.

The IPR&D assets of $120.5 million (being $104.1 million acquired as of August 6, 2008 and $16.4 million acquired in subsequent step acquisitions) relate to FIRAZYR for the treatment of acute HAE in the US ($60.3 million), and the rest of the world excluding the US and EU (“RoW”), ($60.2 million). These IPR&D assets have not yet received approval from the relevant regulatory authorities at the acquisition date: in the US FIRAZYR received a non approvable letter from the US Food and Drug Administration in April 2008. The Company considers that these IPR&D assets have no alternative future use outside of their current development projects and the fair value of these IPR&D assets has therefore been charged to the Consolidated Statement of Operations as of the acquisition date in accordance with FIN 4.

The fair value of the FIRAZYR IPR&D assets was determined using the income approach applying the multi-period excess earnings method. The fair value of the IPR&D assets has been based on the incremental cash flows expected to be generated by the development projects after the deduction of contributory asset charges in respect of other assets employed in these research projects, (including working capital, the assembled workforce and other fixed assets). These estimated future cash flows have then been probability adjusted to take into account the stage of completion and the remaining risks and uncertainties surrounding the future development and commercialization of FIRAZYR. These estimated probability adjusted, after tax cash flows have then been discounted at 17-18% to determine a present, or fair, value.

The major risks and uncertainties associated with the timely completion of the acquired IPR&D projects consist of the ability to confirm the efficacy of the technology based on data from the clinical trials, and obtaining the relevant regulatory approvals. The valuations have been based on information at the time of the acquisition and expectations and assumptions that (i) have been deemed reasonable by the Company’s management, and (ii) are based on information, expectations and assumptions that would be available to and be made by a market participant. However, no assurance can be given that the underlying assumptions or events associated with such assets will occur as projected. For these reasons, among others, the actual cash flows may vary from forecast future cash flows.

(c) Assets held for sale

On acquisition of Jerini the Company and Jerini commenced a strategic review of the acquired assets to identify which of the assets were non strategic to the newly combined business. In October 2008 Jerini announced that its Supervisory and Management Boards had concluded that it was in the best interests of Jerini to divest Jerini Ophthalmic, Inc, Jerini Peptide Technologies Gmbh and Jerini’s pre clinical projects. Consistent with SFAS No. 144, Accounting for the Impairment or Disposal of Long Lived Assets (“SFAS No. 144”) the Company has presented the fair value less costs to sell of those businesses that met the SFAS No. 144 criteria as assets held for sale at the acquisition date. The results of operations of those businesses meeting the SFAS No. 144 criteria have been presented as discontinued operations within the Consolidated Statement of Operations.

(d) Goodwill

Goodwill of $129.4 million resulting from the acquisition of 92.7% of the voting interests in Jerini has been wholly allocated to the HGT reporting segment.

The following unaudited pro forma financial information presents the combined results of the operations of Shire and Jerini as if the acquisition had occurred at the beginning of the periods presented based upon Shire’s ownership interest of 92.7% of Jerini at September 30, 2008. The unaudited pro forma financial information is not necessarily indicative of what the consolidated results of operations actually would have been had the acquisition been completed at the dates indicated. In addition, the unaudited pro forma financial information does not purport to project the future results of operations of the combined Company.

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	3 months to September 30, 2008			3 months to September 30, 2007			9 months to September 30, 2008			9 months to September 30, 2007
		$’M			$’M			$’M			$’M
Revenues		779.8			621.5			2,265.8			1,733.7
Net (loss)/income		(42.9	)		20.3			(36.8	)		(1,713.2	)
Per share amounts:
Net (loss)/ income per ordinary share –basic and diluted		(7.9c	)		3.7	c		(6.8c	)		(317.9c	)

The unaudited pro forma financial information above reflects the following pro forma adjustments applied using the principles of SFAS No. 141:

(i) An adjustment to decrease interest income by $1.8 million and $7.2 million in the three months and nine months to September 30, 2008 respectively, and $5.7 million and $17.2 million in the three months and nine months to September 30, 2007 respectively, to reflect the interest foregone on the Company's cash resources used to fund the acquisition of Jerini.

(ii) An adjustment to increase amortization expense by approximately $2.8 million and $11.4 million for the three and nine months to September 30, 2008 respectively and by approximately $4.3 million and $12.8 million for the three and nine months to September 30, 2007 respectively, to reflect amortization of intangible assets relating to the currently marketed product, over the estimated useful life of 17 years.

Included in the pro-forma financial information for the three and nine months to September 30, 2008 is the PR&D charge of $120.5 million in respect of FIRAZYR outside of the EU.

New River acquisition

On April 19, 2007 Shire completed its acquisition of New River by way of a short-form merger, in an all-cash transaction. Total consideration, together with costs directly attributable to the business combination was $2,594.5 million at the price of $64 per share of New River common stock.

During the third quarter of 2008 the Company reduced the values ascribed to other intangible assets acquired through the New River acquisition by $25.3 million compared to amounts previously assigned to these assets in the purchase price allocation. The change to the value ascribed to other intangible assets arose from changes during the third quarter of 2008 to the Company’s estimates of deferred taxes made in the purchase price allocation exercise: accordingly the excess of the fair value of net assets acquired and liabilities assumed over the cost of the acquisition increased by $25.3 million in the third quarter of 2008. In accordance with SFAS No. 141 this excess has been allocated to reduce other intangible assets.

4. Gain on sale of product rights

Following receipt of the relevant regulatory or other consents during the three months and nine months to September 30, 2008 the Company recognized $4.0 million and $15.7 million respectively of the gains deferred at December 31, 2007 from the disposal of non-core products during the 2007 financial year, see Note 7.

In the nine months to September 30, 2008 Shire also received cash consideration of $5.0 million from the divestment of the Beta range of hormone replacement products to Meda AB, realizing a gain of $5.0 million.

During the three and nine months to September 30, 2007 the Company recognized gains of $7.1 million and $12.1 million respectively from the disposal of non-core products. All disposed non-core products were reported in the Specialty Pharmaceuticals operating segment.

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5. Accounts receivable, net

Accounts receivable at September 30, 2008 of $489.8 million (December 31, 2007: $441.5 million), are stated net of a provision for discounts and doubtful accounts of $15.4 million (December 31, 2007: $9.8 million).

Provision for discounts and doubtful accounts:

	2008 $’M		2007 $’M
As at January 1	9.8		8.8
Provision charged to operations	64.8		45.2
Provision utilization	(59.2	)	(44.6	)
As at September 30	15.4		9.4

6. Inventories, net

Inventories at September 30, 2008 of $149.6 million (December 31, 2007: $174.1 million) are stated at the lower of cost or market and are analyzed as follows:

	September 30, 2008 $’M		December 31, 2007  $’M
Finished goods		41.6		67.6
Work-in-process		78.4		66.2
Raw materials		29.6		40.3
		149.6		174.1

During the nine months to September 30, 2008 the Company wrote down the value of its DYNEPO inventory to the lower of cost or market. Changes in the external environment in this period, including the launch of several competing bio-similars at lower prices has made DYNEPO uneconomic for the Company. Accordingly the Company has decided to stop commercializing DYNEPO. Product sales are winding down over the second half of 2008 as all patients are transferred off DYNEPO by the end of the year.

7. Assets held for sale

At September 30, 2008 assets held for sale had a carrying value of $40.0 million (December 31, 2007: $10.6 million). Assets held for sale principally comprise certain businesses acquired through the Jerini acquisition which the company intends to divest; for further details in respect of these assets, see Note 3.

Other assets held for sale are represented by intangible assets and attributed goodwill for certain products divested to Laboratories Almirall S.A. (“Almirall”) in 2007 and a number of other non-core product licenses. The recognition of the gains arising on the disposal of these products and the de-recognition of the related assets have been deferred pending the completion of the transfer of the relevant regulatory and other consents to the acquirer. These assets divested to Almirall form part of the Specialty Pharmaceuticals operating segment.

8. Prepaid expenses and other current assets

	September 30, 2008 $’M		December 31, 2007  $’M
Prepaid expenses		49.2		38.1
Income tax receivable		15.5		19.2
Value added taxes receivable		16.2		10.8
Other current assets		62.7		57.2
		143.6		125.3

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At December 31, 2007 Other current assets included $23.0 million, payable by Shire’s insurance companies as a contribution towards the settlement of the TKT Class Action Shareholder Suit, see Note 14(c). This amount was paid into escrow by the insurance companies during the nine months to September 30, 2008. The settlement was approved by the Court on June 11, 2008.

9. Investments

Other than temporary impairment of available for sale securities

During the three and nine months to September 30, 2008 the Company recognized impairment charges in respect of its available-for-sale securities totaling $54.1 million (2007: $nil), including $43.7 million for the Company’s investment in Renovo. These amounts represent unrealized holding losses that have been reclassified out of other comprehensive income into earnings in the period, as  management has concluded that the impairment is other than temporary.

The decline in the market value of the Company’s investment in Renovo initially arose from the results of clinical trials for JUVISTA announced over 2007 and 2008. In considering whether the decline in value is temporary or “other than temporary” under US GAAP the Company had to consider the following factors: the severity of the decline from historical cost (87%) and its duration (eleven months); market analysts’ targets of Renovo’s share price for the next 18-24 months; and the revised expected filing date for JUVISTA due to the adoption of a sequential rather than parallel Phase 3 development plan.

These factors, together with the significant decline in global equity markets during the third quarter of 2008 mean that the Company is unable to reasonably estimate the period over which a full recovery in the value of its investment in Renovo could occur.  As such, the Company had to conclude that for US GAAP purposes the decline in value is “other than temporary”.

In such circumstances US GAAP requires the full difference between the book value of the investment and the fair (market) value be recognized as an other than temporary impairment.  Accordingly the Company has recognized an impairment charge of $43.7 million through the Statement of Operations in the three and nine months to September 30, 2008. If in the future JUVISTA’s Phase 3 trials report positively and Renovo’s other products progress through development, Renovo’s share price could react favorably and the Company may recover some or all of this impairment loss. Any future potential increases in the value of Renovo will be recognized through other comprehensive income.

Realized gain on divestment of available for sale securities

Other income includes a gain of $9.4 million from the sale of Shire’s available-for-sale investment in Questcor Pharmaceutical Inc., a specialty pharmaceutical company focused on providing prescription drugs for central nervous system (CNS) disorders.  Shire received cash consideration of $10.3 million on the sale of this investment.

10. Other intangible assets, net

	September 30, 2008 $’M			December 31, 2007  $’M
Intellectual property rights acquired		2,374.7			2,116.8
Favorable manufacturing contracts		8.9			8.9
		2,383.6			2,125.7
Less: Accumulated amortization and impairment charges		(540.9	)		(361.2	)
		1,842.7			1,764.5

Intellectual property rights relate to currently marketed products. At September 30, 2008 the net book value of these intellectual property rights for products with sales recorded in the Specialty Pharmaceuticals operating segment was $1,267.6 million (December 31, 2007: $1,440.6 million) and in the Human Genetic Therapies operating segment was $574.2 million (December 31, 2007: $322.4 million).

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The increase in the net book value of other intangible assets for the nine months to September 30, 2008 is shown in the table below:

	Other intangible assets
		$’M
As at January 1, 2008		1,764.5
Acquisitions		322.1
Amortization charged		(92.8	)
Impairment charges		(90.9	)
Allocation of excess of fair value of net assets acquired over the cost of the New River acquisition(1)		(25.3	)
Foreign currency translation		(34.9	)
As at September 30, 2008		1,842.7

(1) Following the resolution of uncertainties during the third quarter of 2008 principally relating to the tax treatment of certain items incurred by New River, the Company changed its estimates of deferred taxes made in the New River purchase price allocation. In accordance with EITF 93-7 "Uncertainties Related to Income Taxes in a Purchase Business Combination", the effect of resolving these uncertainties has been applied to decrease non current intangible assets as there was no goodwill arising on the acquisition, (see Note 3).

During the nine months to September 30, 2008 the Company acquired intangible assets totaling $322.1 million being $297.1 million for FIRAZYR for the treatment of acute HAE in the EU (acquired through the Jerini business combination), and $25.0 million for DAYTRANA. The weighted average amortization period for acquired assets is 17 years. Intangible asset acquisitions exclude $120.5 million of IPR&D acquired with Jerini which was immediately charged to the Consolidated Statement of Operations at the acquisition date (see Note 3).

During the nine months to September 30, 2008 the Company recognized impairment charges of $90.9 million  (2007: $nil), of which $90.4 million relates to the write-down of its DYNEPO intangible asset to its fair value ($nil). Changes in the external environment, including the launch of several competing bio-similars at lower prices has made DYNEPO uneconomic for the Company. Accordingly the Company has decided to stop commercializing DYNEPO. Product sales are winding down over the second half of 2008 as all patients are transferred off DYNEPO by the end of the year. The fair value of DYNEPO has been determined using an expected present value technique. The impairment charge has been recorded to Selling, general and administrative expenses, and relates to the Specialty Pharmaceuticals operating segment.

The useful economic lives of all intangible assets that continue to be amortized under SFAS No. 142, “Goodwill and Other Intangible Assets” have been assessed.  Management estimates that the annual amortization charge in respect of intangible fixed assets held at September 30, 2008 will be approximately $134 million for each of the five years to September 30, 2013.  Estimated amortization expense can be affected by various factors including future acquisitions, disposals of product rights, foreign exchange movements and the technological advancement and regulatory approval of competitor products.

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11. Accounts payable and accrued expenses

	September 30, 2008 $’M		December 31, 2007  $’M
Trade accounts payable		79.7		79.6
Accrued rebates – Medicaid		129.1		114.3
Accrued rebates – Managed care		48.2		32.3
Sales return reserve		39.9		39.5
Accrued bonuses		55.5		59.6
Accrued employee compensation and benefits payable		38.0		35.0
Accrued coupons		4.0		9.0
Research and development accruals		73.5		38.2
Marketing accruals		35.7		19.0
Deferred revenue		13.0		11.1
Accrued settlement costs		1.2		51.5
Other accrued expenses		185.3		185.1
		703.1		674.2

At December 31, 2007 Accrued settlement costs included $50.0 million, for the settlement of the TKT Class Action Shareholder Suit, see Note 14(c). This amount was paid into escrow by Shire ($27.0 million) and Shire’s insurance companies ($23.0 million – see Note 8) during the nine months to September 30, 2008. The settlement was approved by the Court on June 11, 2008.

12. Other current liabilities

	September 30, 2008 $’M		December 31, 2007  $’M
Income taxes payable		22.6		47.3
Value added taxes		9.0		6.0
Other accrued liabilities		32.4		43.2
		64.0		96.5

13. Other non-current liabilities

	September 30, 2008 $’M		December 31, 2007  $’M
Income taxes payable		327.8		320.8
Other accrued liabilities		69.4		54.8
		397.2		375.6

14. Commitments and contingencies

(a) Leases

Future minimum lease payments presented below include operating lease payments and other fixed executory fees under lease arrangements as at September 30, 2008:

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	Operating leases $’M
2008		9.0
2009		31.7
2010		25.5
2011		22.2
2012		15.0
2013		13.6
Thereafter		55.3
		172.3

(i) Operating leases

The Company leases land, facilities, motor vehicles and certain equipment under operating leases expiring through 2025.  Lease and rental expense which is included in Selling, general and administrative expenses in the accompanying Statements of Operations amounted to $24.5 million for the nine months to September 30, 2008 (2007: $19.6 million).

(ii) Restricted cash in respect of leases

At September 30, 2008 the Company had $0.3 million of restricted cash held as collateral for certain equipment leases (December 31, 2007: $8.0 million).

(b) Letters of credit and guarantees

At September 30, 2008 the Company had irrevocable standby letters of credit with various banks, in the amount of $9.2 million, providing security on the recoverability of insurance claims.  The Company has restricted cash of $9.2 million, as required by these letters of credit.

(c) Commitments

(i) Alba Therapeutics Corporation (“Alba”)

On December 14, 2007 Shire acquired worldwide rights to SPD550 (also known as AT-1001), in markets outside of the US and Japan, from Alba. SPD550 is Alba’s lead inhibitor of barrier dysfunction in various gastrointestinal disorders that is currently in Phase 2 development for the treatment of Celiac disease. Shire has remaining obligations to pay development and sales milestones up to a maximum of $300 million.  Shire will also pay single or double digit tiered royalties on net sales of the product.

Alba and Shire have formed a joint development committee to monitor Research & Development (“R&D”) activities of SPD550. Alba will fund all development until SPD550 has completed Proof of Concept, which is expected to be in the first half of 2009, after which Shire and Alba will share equally development costs under a joint development plan.

(ii) Amicus Therapeutics, Inc. (“Amicus”)

On November 7, 2007 Shire licensed from Amicus the rights to three pharmacological chaperone compounds in markets outside of the US: AMIGAL (HGT-3310) for Fabry disease, PLICERA (HGT-3410) for Gaucher disease and HGT-3510 (formerly referred to as AT2220) for Pompe disease. Shire will pay development and sales milestones up to a maximum of $390 million. Shire will also pay tiered, double digit, royalties on net sales of the products. Shire and Amicus will pursue a joint development program toward market approval in the US and Europe; expenses for this program will be shared equally.

(iii) JUVISTA

On June 19, 2007 Shire signed an agreement with Renovo to develop and commercialize JUVISTA, Renovo’s novel drug candidate being investigated for the reduction of scarring in connection with surgery. JUVISTA is in Phase 2 development.  Under the terms of the agreement Shire has the exclusive right to commercialize JUVISTA worldwide, with the exception of EU member states.

Shire has remaining obligations to pay Renovo $25 million on the filing of JUVISTA with the US Food and Drug Administration (“FDA”); up to $150 million on FDA approval; royalties on net sales of JUVISTA; and up to $525 million on the achievement of very significant sales targets.

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Shire will bear the cost of clinical trials designed specifically for obtaining US regulatory approval.  Renovo will bear the costs of clinical trials designed specifically for obtaining EU regulatory approval.  Shire and Renovo will share equally the costs of conducting global clinical trials that are designed for obtaining both US and EU regulatory approvals.

(iv) Women’s Health Products

In September 2006, Shire and Duramed Pharmaceuticals, Inc (“Duramed”) entered into an agreement related to SEASONIQUE, a number of products using Duramed’s transvaginal ring technology and other oral products.  Shire has the right to market these products in a number of markets outside of North America, including the larger European markets.

Under this agreement, Shire will reimburse Duramed for US development expenses incurred going forward up to a maximum of $140 million over eight years from September 2006. US development expenditure reimbursement for the nine months to September 30, 2008 totaled $24.3 million. At September 30, 2008 the maximum future reimbursement for Duramed-incurred US development expenditure is $97.3 million. Shire will separately be responsible for development costs in its licensed territories.

(v) Other R&D and sales milestones

In addition to the commitments set out in (i) to (iv), at September 30, 2008 the Company had fees payable and commitments payable on achievement of specified milestones for products under development in-licensed from third parties of $4.6 million (December 31, 2007: $5.3 million), of which $3.6 million could be paid in 2008.

(vi) Clinical testing

At September 30, 2008 the Company had committed to pay approximately $128.1 million (December 31, 2007: $77.6 million) to contract vendors for administering and executing clinical trials.  The Company expects to pay $93.1 million of these commitments in 2008. However, the timing of these payments is dependent upon actual services performed by the organizations as determined by patient enrollment levels and related activities.

(vii) Contract manufacturing

At September 30, 2008 the Company had committed to pay approximately $40.7 million (December 31, 2007: $109.7 million) in respect of contract manufacturing. The Company expects to pay $34.3 million of these commitments in 2008.

(viii) Purchase and service commitments

At September 30, 2008 the Company had committed to pay approximately $39.4 million (December 31, 2007: $49.4 million) for future purchases and services, predominantly relating to active pharmaceutical ingredients sourcing and IT outsourcing. The Company expects to pay $18.8 million of these commitments in 2008.

(ix) Investment commitments

At September 30, 2008 the Company had outstanding commitments to subscribe for interests in companies and partnerships for amounts totaling $6.7 million (December 31, 2007: $7.9 million) which may all be payable in 2008, depending on the timing of capital calls.

(x) Capital commitments

At September 30, 2008 the Company had committed to spend $141.1 million (December 31, 2007: $52.0 million) on capital projects. This includes commitments for the expansion and modification of its head office in Basingstoke, UK and its facility in Lexington, Massachusetts.

(xi) Legal proceedings

General

The Company accounts for litigation losses and insurance claims and provisions in accordance with SFAS No. 5, "Accounting for Contingencies" ("SFAS No. 5"). Under SFAS No. 5, loss contingency provisions are recorded for probable losses when management is able to reasonably estimate the loss. Where the estimated loss lies within a range and no particular amount within that range is a better estimate than any other amount, the minimum amount is recorded. In other cases management's best estimate of the loss is recorded. These estimates are developed substantially before the ultimate loss is known and the estimates are refined in each accounting period in light of additional information becoming known. In instances where the Company is unable to develop a reasonable estimate of loss, no litigation loss is recorded at that time. As information becomes known a loss provision is set up

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when a reasonable estimate can be made. The estimates are reviewed quarterly and the estimates are changed when expectations are revised. Any outcome upon settlement that deviates from the Company’s estimate may result in an additional expense in a future accounting period. At September 30, 2008 provisions for litigation losses, insurance claims and other disputes totaled $21.2 million (December 31, 2007: $66.2 million) excluding the liability to dissenting shareholders.

Specific

There are various legal proceedings brought by and against Shire that are discussed in Shire’s Annual Report on Form 10-K for the year to December 31, 2007. Material updates to the proceedings discussed in Shire’s Annual Report on Form 10-K are described below. There is no assurance that the Company will be successful in any of these proceedings and if it is not, there may be a material impact on the Company’s results and financial position.

ADDERALL XR

(i) Sandoz

In December 2006, Shire was notified that Sandoz Inc. (“Sandoz”) had submitted an ANDA under the Hatch-Waxman Act seeking permission to market its generic versions of the 5mg, 10mg, 15mg, 20mg, 25mg and 30mg strengths of ADDERALL XR prior to the expiration of the Company’s ‘819 and ‘300 patents.  On January 26, 2007 Shire filed suit in the US District Court for the District of Colorado for infringement of the ‘819 and ‘300 Patents. Pursuant to the Hatch-Waxman Act, there will be a 30 month stay with respect to Sandoz’ proposed generic products.  In response to Shire’s complaint, Sandoz has alleged affirmative defenses and counterclaims of non- infringement and validity.  Sandoz has alleged sham litigation and patent misuse and the Company has filed a motion to strike these two affirmative defenses.  The Court has denied the motion without prejudice.  Expert reports were filed on September 21, 2007 and rebuttal reports were filed on October 12, 2007.  On December 21 and 26, 2007 Sandoz and Shire, respectively, each filed motions for summary judgment.  Opposition briefs were exchanged on February 8, 2008. Reply briefs were submitted on February 28, 2008.  In a decision dated September 24, 2008 the Court construed certain patent claim terms, denied Sandoz’s motion for summary judgment of noninfringement and granted Shire’s motion to dismiss Sandoz’s affirmative defenses of patent misuse and sham litigation.  On October 3, 2008, Sandoz moved for reconsideration of one aspect of this decision and for immediate appeal under 28 U.S.C. §1292(b) as two specific issues.  A pretrial conference was held on October 8, 2008 whereby the Court certified for immediate appeal the question of whether a later Court, in this case the Colorado Court, is bound by a claim construction from a different court, in this case the Delaware Court in Shire v. Impax.  The Court also denied as moot Sandoz’s motion for reconsideration.  Following these rulings, the case was administratively closed.  All pending motions were denied without prejudice to refile them after a decision from the Federal Circuit regarding collateral estoppel as to claim construction.

CARBATROL

(i)         Nostrum

In August 2003, the Company was notified that Nostrum Pharmaceuticals, Inc. (“Nostrum”) had submitted an ANDA under the Hatch-Waxman Act seeking permission to market its generic version of the 300mg strength of CARBATROL (Nostrum’s ANDA product) prior to the expiration date of the Company’s US patents for CARBATROL, US patent No. 5,912,013 (“the ‘013 Patent”) and US patent No. 5,326,570 (“the ‘570 Patent”).  The notification alleges that the ‘013 and ‘570 Patents are not infringed by Nostrum’s ANDA product.  On September 18, 2003, Shire filed suit against Nostrum in the United States District Court for the District of New Jersey alleging infringement of these two patents by Nostrum’s ANDA and ANDA product. The lawsuit triggered a stay of FDA approval of up to 30 months from Shire’s receipt of Nostrum’s notice letter. The 30 month stay expired on February 6, 2006.  Nostrum could be in a position to market its 300mg extended-release carbamazepine product upon FDA final approval of its ANDA.   On January 23, 2004 the Company amended the complaint to drop the allegations with respect to the ‘013 Patent while maintaining the suit with respect to the ‘570 Patent. On July 17, 2006 the Court entered an order staying discovery in this case until and through September 15, 2006. The parties requested, and the Court granted, an extension of the stay of discovery until and through December 29, 2006. The stay of discovery has been extended. Nostrum requested and the Court permitted Nostrum to file claim construction briefs in the Shire v. Corepharma case also pending in New Jersey. Opening briefs were submitted on October 3, 2007 and responding briefs on October 24, 2007. The case has been stayed pending a claim construction ruling in the Shire v. Corepharma action. The Court in the Corepharma case issued a claim construction decision on March 26, 2008.  Corepharma moved for reconsideration on April 9, 2008. The Court denied Corepharma’s motion on May 20, 2008.

In May 2008, the company was notified that Nostrum Pharmaceuticals LLC had submitted an amendment to the above referenced ANDA seeking permission to market its generic versions of the 100mg and 200mg strengths of CARBATROL prior to the expiration date of the Company’s ‘013 and ‘570 Patents. The notification alleges that the ‘013 and ‘570 Patents are not infringed by Nostrum’s ANDA products. On July 2, 2008 Shire filed suit against Nostrum in the United States District Court for the District of New Jersey alleging infringement of these two patents

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by Nostrum’s ANDA and ANDA products.  This case was referenced as related to the earlier filed case on Nostrum’s 300 mg product and has been assigned to the same Judge as the earlier ongoing case. The Court issued an Order to Show Cause seeking the parties’ positions as to whether the two cases should be consolidated. Shire submitted papers in support of consolidation. Nostrum opposed consolidation. The Court has not yet issued a ruling on this question.  No trial date has been set.

(ii)        Corepharma

On March 30, 2006 the Company was notified that Corepharma LLC (“Corepharma”) had filed an ANDA under the Hatch-Waxman Act seeking permission to market its generic version of carbamazepine extended release products in 100mg, 200mg and 300mg strengths prior to the expiration date of the ‘013 and the ‘570 Patents.  On May 17, 2006 Shire filed suit against Corepharma in the United States District Court for the District of New Jersey alleging infringement of these two patents by Corepharma’s ANDA and ANDA products. Pursuant to the Hatch-Waxman Act, there will be a 30 month stay with respect to Corepharma’s proposed generic products. On September 1, 2006 the Company amended the complaint to drop the allegations with respect to the ‘013 Patent while maintaining the suit with respect to the ‘570 Patent. On May 4, 2007 Corepharma filed a motion for summary judgment of non- infringement of the ‘570 Patent. Shire’s opposition to that motion was filed on July 30, 2007. The Court informed the parties on August 30, 2007 that Corepharma’s motion was denied without prejudice. The Court set a Markman schedule and opening briefs were exchanged on October 3, 2007 (including an amicus brief, filed with the Court’s permission by Nostrum). Responding briefs were exchanged on October 24, 2007. The Court has also entered a discovery schedule. The Court rendered a claim construction ruling on March 26, 2008. Corepharma moved for reconsideration of the claim construction ruling.  The Court denied the motion on May 20, 2008. Expert reports were exchanged and expert depositions were completed on June 13, 2008.  On June 20, 2008, Corepharma filed another summary judgment motion directed to the ‘570 Patent. Following briefing, on September 23, 2008 the Court issued a decision denying Corepharma’s ‘570 summary judgment motion for noninfringement.

On July 7, 2008, following briefing and oral argument on Corepharma’s motion to vacate an earlier Court order granting Shire’s motion to dismiss Corepharma’s ‘013 noninfringement counterclaims due to lack of subject matter jurisdiction and denying as moot Corepharma’s motion for judgment on the pleadings for noninfringement of the ‘013 patent, the Court vacated its earlier order in view of recent Court of Appeals for the Federal Circuit authority. The Court also denied Corepharma’s request for judgment on the pleadings and directed the parties to conduct summary judgment briefing on the ‘013 patent infringement issues. On August 1, 2008 Corepharma filed its ‘013 summary judgment motion. Shire’s opposition was filed on September 18, 2008. Corepharma’s reply was filed on October 14, 2008. The parties have been instructed that they will have approximately one week to submit a joint pretrial order after the Court rules on the summary judgment motions. No trial date has been set.

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(iii)       Teva

On March 20, 2007 the Company was notified that Teva USA had filed an ANDA under the Hatch-Waxman Act seeking permission to market its generic version of carbamazepine extended release products in 100mg, 200mg and 300mg strengths prior to the expiration date of the ‘013 and the ‘570 Patents. On May 2, 2007, Shire filed suit against Teva in the US District Court for the Southern District of New York alleging infringement of the ‘013 and the ‘570 Patents by Teva’s ANDA and ANDA products. On August 23, 2007 Shire amended the complaint to drop the allegations with respect to the ‘013 Patent while maintaining the suit with respect to the ‘570 Patent. Teva USA raised counterclaims that the ‘570 and ‘013 Patents were not infringed.  Shire has offered Teva USA a covenant not to sue with respect to the ‘013 Patent. The Court held a status conference on October 16, 2007. Teva withdrew its counterclaim directed to the ‘013 patent. The parties have submitted a discovery schedule to the Court. The Court conducted another status conference on June 19, 2008. The parties have submitted a revised discovery schedule for the Court’s consideration. Fact and expert discovery is to be completed by February 27, 2009. No trial date has been set.

(iv)       Apotex

In May 2008, Shire was notified that Apotex Inc. had submitted an ANDA under the Hatch-Waxman Act seeking permission to market its generic version of carbamazepine extended release products in 100mg, 200mg and 300mg prior to the expiration date of the ‘013 and the ‘570 Patents.  On July 2, 2008, Shire filed a lawsuit in the U.S. District Court for the Eastern District of Texas against Apotex Inc., Apotex Corp. and Apotex Pharmaceutical Holdings Inc. (collectively; “Apotex”) alleging infringement of the ‘013 and ‘570 Patents by Apotex ANDA and ANDA products. On July 17, 2008 Apotex Inc. filed a declaratory judgment complaint against Shire for noninfringement and invalidity of the ‘570 and ‘013 patents in the District of New Jersey. Apotex sought and the case was assigned to the same New Jersey Judge hearing the Shire v. Corepharma case. Apotex has also filed in Texas, motions to dismiss and a motion in the alternative to transfer the Texas case to New Jersey. Shire has opposed these three motions.  Following a September 23, 2008 scheduling conference in Texarkana, Texas, the Court set oral argument on the jurisdictional and transfer questions for November 12, 2008. In New Jersey, Shire has filed a motion to dismiss, stay or transfer the New Jersey case to the first filed action in Texas. Briefing on this motion was completed on October 14, 2008. The Court has not set a date for oral argument. The Texas Court has set a Markman hearing date for December 17, 2009 and an October 2010 trial date.

(v)        Actavis

Shire has been notified that Actavis South Atlantic LLC has submitted an ANDA under the Hatch-Waxman Act seeking permission to market its generic version of carbamazepine extended release products in 200mg and 300mg strengths prior to the expiration date of the ‘013 and the ‘570 Patents.  On July 24, 2008, Shire filed a lawsuit in the U.S. District Court for the Eastern District of Texas against Actavis South Atlantic LLC and Actavis Inc. (collectively “Actavis”) alleging infringement of the ‘013 and ‘570 Patents by the Actavis ANDA and ANDA products.

DYNEPO

Since 1997, Shire HGT and Sanofi-Aventis have been involved in ongoing patent litigation regarding Amgen Inc’s (“Amgen”) allegations that DYNEPO infringes claims of five of Amgen’s patents.  In 2001, the United States District Court of Massachusetts concluded that DYNEPO infringed certain claims of the patents that Amgen had asserted.  This decision was appealed to the United States Court of Appeals for the Federal Circuit (the “Federal Circuit”) which affirmed in part, reversed in part, and remanded the action to the United States District Court of Massachusetts for further proceedings.

In 2004, the United States District Court of Massachusetts issued a decision on the remanded issues, finding that certain claims related to four of the patents asserted by Amgen are infringed by Shire HGT and Sanofi-Aventis.  This decision was subsequently appealed to the Federal Circuit which affirmed in part, reversed in part, and once again remanded certain issues to the District Court.  Amgen filed a petition for a writ of Certiorari with the Supreme Court in March 2007, requesting review of the Federal Circuit’s 2004 decision.  Amgen’s petition was denied on May 14, 2007 and the case was remanded to the District Court. In October 2008 the District Court entered a declaratory judgment that Shire HGT and Sanofi-Aventis are enjoined from infringement for the life of the Amgen patents.  Shire HGT and Sanofi-Aventi have the right to appeal this decision within 30 days from judgment.

Under the existing decisions, the Company and Sanofi-Aventis would be precluded from making, using and selling DYNEPO in the United States until the expiration of the relevant patents.  The Company is required to reimburse Sanofi-Aventis, which controls the litigation and is paying the litigation expenses, for 50% of the expenses incurred in connection with the litigation from and after March 26, 2004.

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REMINYL

On January 29, 2008 Generics UK Ltd commenced a rectification action in the UK seeking a declaration that the duration of the Supplementary Protection Certificate (“SPC”) for EP 236684, the patent that claims the use of galantamine for the treatment of Alzheimer’s disease, is zero (ie the period of exclusivity conferred by the patent has already expired), or alternatively that it expires on December 31, 2008. This SPC represents the primary patent protection for REMINYL in the EU. The current term of the SPC extension runs to January 2012.  Absent the SPC extension, the patent would have expired in January 2007.  REMINYL is entitled to ten years data exclusivity in the UK, which will not expire until March 2010.  A two day trial is scheduled for the week of December 8, 2008.

Appraisal Rights

In connection with Shire’s merger with TKT, former holders of approximately 11.7 million shares of TKT common stock submitted written demands to the Delaware Court of Chancery for appraisal of these shares and, as a result, elected not to accept the $37 per share merger consideration.  On October 10, 2005 at the request of one of the holders to tender 365,000 shares at the merger price of $37 per share, TKT filed a motion to dismiss the holder’s demand.  On October 12, 2005 the Delaware Court of Chancery granted this motion, and the holder tendered the shares at the merger consideration of $37 per share.  Therefore, as at September 30, 2008 former holders of approximately 11.3 million shares of TKT common stock maintained written demands for appraisal of these shares and have elected not to accept the $37 merger consideration.  In November 2005, the Delaware Court of Chancery approved a stipulated consolidation order whereby actions brought by all petitioners have been consolidated as one case.

Such former holders will be entitled to receive the fair value of these shares as determined by the Delaware Court of Chancery. The determination of fair value will be made excluding any element of value arising from the transaction, such as cost savings or business synergies. The Delaware Court of Chancery may ascribe a valuation to the shares that is greater than, less than or equal to $37 per share and may award interest on the amount determined in the appraisal process.

On March 8, 2007 certain of the former TKT shareholders who previously asserted appraisal rights in connection with the Shire/TKT merger filed a second suit in the Delaware Chancery Court alleging, among other claims, breaches of fiduciary duty by TKT and certain members of its board in connection with the merger with Shire. Shire and TKT have been named as defendants as are four former directors of TKT. The new complaint also asserts a claim that the merger itself was not properly approved by a majority of the outstanding stock of TKT entitled to vote. The complaint seeks rescissory damages with interest, attorneys’ fees and costs. In January 2008 Shire and three of the other defendants (former TKT directors) filed a motion for summary judgment in respect to the five counts included in the second suit. In June 2008 the Court granted the motion in full with respect to the three other defendants and in part with respect to Shire. The remaining counts of the second suit relate to alleged breaches of fiduciary duty by Dr. Dennis Langer (a former TKT director) and Shire as well as the claim that the merger was not properly approved.

On November 5, 2008 Shire announced that it had successfully settled all aspects of this litigation with all parties.  Shire paid the same price of $37 per share originally offered to all TKT shareholders at the time of the July 2005 merger, plus interest.  The Delaware Chancery Court has approved dismissal of the case, and Shire made payment to the dissenting shareholders on November 7, 2008.  The settlement which was recorded as a liability at September 30, 2008, represents a total payment of $567.5 million, representing consideration at $37 per share of $419.9 million and an interest cost of $147.6 million.

Class Action Shareholder Suit

In January and February 2003, various parties filed purported securities fraud class action lawsuits against TKT and Richard Selden, TKT's former Chief Executive Officer, in the United States District Court for the District of Massachusetts. In April 2003, the Court appointed a Lead Plaintiff and Lead Counsel and consolidated the various matters under one matter: In re Transkaryotic Therapies, Inc., Securities Litigation, C.A. No. 03-10165-RWZ.

In July 2003, the plaintiffs filed a Consolidated and Amended Class Action Complaint (the "Amended Complaint") against TKT; Dr Selden; Daniel Geffken, TKT's former Chief Financial Officer; Walter Gilbert, Jonathan S. Leff, Rodman W. Moorhead, III, and Wayne P. Yetter, then members of TKT's board of directors; William R. Miller and James E. Thomas, former members of TKT's board of directors; and SG Cowen Securities Corporation, Deutsche

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Bank Securities Inc., Pacific Growth Equities, Inc. and Leerink Swann & Company, underwriters of TKT’s common stock in prior public offerings.

The Amended Complaint alleges that the defendants made false and misleading statements and failed to disclose material information concerning the status and progress for obtaining United States marketing approval of REPLAGAL during the period between January 4, 2001 and January 10, 2003. The Amended Complaint asserts claims against Dr. Selden and TKT under Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder; and against Dr. Selden under Section 20(a) of the Exchange Act. The Amended Complaint also asserts claims based on TKT's public offerings of June 29, 2001, December 18, 2001 and December 26, 2001 against each of the defendants under Section 11 of the Securities Act of 1933 and against Dr. Selden under Section 15 of the Securities Act; and against SG Cowen Securities Corporation, Deutsche Bank Securities Inc., Pacific Growth Equities, Inc. and Leerink Swann & Company under Section 12(a) (2) of the Securities Act. The plaintiffs seek equitable and monetary relief, an unspecified amount of damages, with interest, and attorneys' fees and costs.

In May 2004, the Court granted in part and denied in part TKT's motion to dismiss. In particular, the Court dismissed allegations against TKT to the extent they arose out of certain forward-looking statements protected by the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and dismissed claims based on the public offerings of June 29, 2001 and December 18, 2001. The Court allowed all other allegations to remain. In July 2004, the plaintiffs voluntarily dismissed all claims based on the third public offering dated December 26, 2001.

In November 2005, the Court granted the plaintiffs’ motion for class certification.  On May 23, 2005, the Court entered judgment on all claims alleged against SG Cowen Securities Corporation, Deutsche Bank Securities Inc., Pacific Growth Equities, Inc. and Leerink Swann & Company.  On June 5, 2006, the Court entered judgment on all claims alleged against Messrs. Gilbert, Leff, Moorhead, Yetter, Miller, and Thomas.  On November 9, 2006, Mr. Geffken filed an Agreement for Judgment on all claims alleged against him.  On September 1, 2007 the SEC filed suit against Dr Selden.  The case is entitled Securities and Exchange Commission v. Richard F Selden, Civil Action No. 05-11805-NMG (D. Mass.) (“the SEC Action”).  On July 10, 2008 the Court entered a final judgment against Selden which permanently enjoins him from violating the anti-fraud and other provisions of the federal securities laws, and orders him to pay approximately $1.2 million in penalties.

In October 2007, the parties reached an agreement in principle to resolve the Class Action Shareholder Suit, subject to Court approval, for $50 million. In February 2008 the US District Court for the District of Massachusetts granted preliminary approval to the settlement.  Shire has contributed $27 million held in escrow towards the settlement and its insurance companies have contributed the remaining $23 million. The settlement was approved by the Court on June 11, 2008.

15. Fair value measurement

As outlined in Note 1(c), on January 1, 2008 the Company adopted the provisions of SFAS No. 157 as they relate to financial assets and financial liabilities. The following are the major categories of financial assets and liabilities measured at fair value on a recurring basis during the nine months to September 30, 2008 using quoted prices in active markets for identical assets (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3).

	Total $M		Level 1 $M		Level 2 $M		Level 3 $M
Financial assets:
Available-for-sale securities		13.0		13.0		-		-
Equity method investments		8.2		-		8.2		-
Derivatives(1)		5.0		-		5.0		-
Financial liabilities:
Derivatives(1)		9.0		-		9.0		-

(1) Derivatives consist of swap and forward foreign exchange contracts

Certain estimates and judgments were required to develop the fair value amounts. The fair value amounts shown above are not necessarily indicative of the amounts that the Company would realize upon disposition, nor do they indicate the Company’s intent or ability to dispose of the financial instrument.

The following methods and assumptions were used to estimate the fair value of each material class of financial instrument:

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· Available-for-sale securities – The fair values of available-for-sale investments are estimated based on quoted market prices for those investments.

· Equity method investments – The Company’s equity method investments comprise quoted and unquoted investments. The fair values of quoted investments within the funds are estimated based on quoted market prices for those investments. For unquoted investments within the fund, the fair value is estimated using directly observable inputs other than quoted prices.

· Derivatives – derivative instruments comprise swap and forward foreign exchange contracts.   The fair value of the swap and forward foreign exchange contracts has been determined using an income approach based on current market expectations about the future cashflows.

16. Interest income

ID Biomedical Corporation (“IDB”) Loan

On September 9, 2004 the Company completed the disposition of its vaccines business to IDB. As part of the transaction, Shire entered into an agreement to provide IDB with a loan facility of up to $100.0 million, which was drawn down in 2005. The $100.0 million loan was segregated into drawings for injectable flu development of $70.6 million and drawings for pipeline development of $29.4 million. In 2005, a provision of $70.0 million was recognized against all of the pipeline development tranche ($29.4 million) and against $40.6 million of the $70.6 million injectable flu development tranche. In 2006 IDB repaid the $70.6 million injectable flu development drawings, together with accrued interest.

On March 28, 2008 Shire agreed to a final settlement with IDB of $4.0 million for the outstanding pipeline development advances and interest. The amount received has been recorded within interest income in the nine months to September 30, 2008 in accordance with the method of allocating receipts between interest and advances in the loan agreement.

17. Shareholders’ Equity

Reduction of Capital and Distributable Reserves

On June 11, 2008 the Jersey Court approved a reduction of Shire plc’s (formerly Shire Limited) share capital to take effect on June 12, 2008. The reduction increased the distributable reserves potentially available to Shire plc at the time of reduction  to approximately $3.7 billion by recharacterizing amounts standing to the credit of Shire plc’s share premium account as a distributable reserve. The purpose of the reduction of capital is to create a distributable reserve which would be available to be distributed as dividends, at the discretion of the Directors of Shire plc, from time to time or for any other lawful purpose to which such a reserve may be applied (including share buy backs). The reduction of capital was designed to create in Shire plc a level of distributable reserves similar to that previously available in Shire Biopharmaceuticals Holdings Limited (formerly Shire plc, the former holding company of the Shire

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group, see Note 2) and to enable Shire plc to continue Shire’s existing dividend policy in a financially and operationally efficient manner.

Income Access Share Arrangements

Shire has put into place income access share arrangements which enable Shire ordinary shareholders, other than Shire ADS holders, to elect to receive their dividends from a company resident for tax purposes in the Republic of Ireland or receive their dividends under the income access share arrangements from a Shire Group company resident for tax purposes in the UK.

Shire Biopharmaceuticals Holdings Limited (formerly Shire plc) (“Old Shire”) has issued one income access share which is held by the income access share trustee pursuant to the income access share trust. The income access share trust is constituted pursuant to a trust deed which provides that (inter alia):

(i) the income access share trustee will hold any dividends paid (not just declared) on the income access share on trust for the Shire ordinary shareholders who have elected (or are deemed to have elected) to receive dividends pursuant to these arrangements;

(ii) the income access share itself will be held on trust for Shire; and

(iii) each registered holder of Shire ordinary shares on a dividend record date who has made (or is deemed to have made) a valid income access share election (described below) will be entitled to receive from the income access share trustee an amount equal to the dividend it would have received from Shire, to the extent the income access share trustee has actually received an amount equal to such amount by way of dividend from Old Shire.

To ensure compliance with technical trust law rules, the period during which the income access share trust may continue will be restricted. However, the income access share trust should be able to continue for 80 years.

This mechanism is reflected in the articles of association of both Shire and Old Shire that the mechanics of the arrangements will be as follows:

The Shire articles of association provide that if (i) a dividend is announced or declared by Shire on the Shire ordinary shares, (ii) an amount is paid by Old Shire by way of a dividend on the income access share to the income access share trustee, and (iii) such amount is paid by the income access share trustee to the Shire ordinary shareholders who have elected (or are deemed to have elected) to receive dividends under these arrangements, the dividend which would otherwise be payable by Shire to such Shire ordinary shareholders will be reduced by an amount equal to the amount paid to such Shire ordinary shareholders by the income access share trustee.

If the dividend paid on the income access share and on-paid by the income access share trustee to the Shire ordinary shareholders is less than the total amount of the dividend announced or declared by Shire on the Shire ordinary shares in respect of which an election has been made (or is deemed to have been made) to receive dividends under these arrangements, Shire will be obliged to pay a dividend on the Shire ordinary shares to those Shire ordinary shareholders who have so elected (or are deemed to have so elected) of the amount of the shortfall. In such a case, any dividend paid on the Shire ordinary shares will generally be subject to Irish withholding tax at the rate of 20% or such lower rate as may be applicable under exemptions from withholding tax contained in Irish law.

A Shire ordinary shareholder is entitled to make an income access share election such that he will receive his dividends (which would otherwise be payable by Shire) under these arrangements from Old Shire.

A Shire ordinary shareholder who held 25,000 or fewer Shire ordinary shares at the time he became a Shire ordinary shareholder pursuant to the Scheme of Arrangement, and who did not make a contrary election, is deemed to have made an election (pursuant to the Shire articles of association) such that he will receive his dividends under these arrangements from Old Shire.

Equally, where a Shire ordinary shareholder who first acquires his Shire ordinary shares after the date of the Scheme of Arrangement, who holds 25,000 or fewer Shire ordinary shares on the first dividend record date after he becomes a Shire ordinary shareholder, and who does not make a contrary election, will be deemed to have made an election (pursuant to the Shire articles of association) such that he will receive his dividends under these arrangements from Old Shire.

In accordance with the provisions of the Shire ADS deposit agreement, the Depositary has made an election on behalf of all holders of Shire ADSs such that they will receive dividends from Old Shire under the income access share arrangements. Dividends paid by Old Shire under the income access share arrangements will not under current legislation be subject to any UK or Irish withholding taxes. If a holder of Shire ADSs does not wish to receive dividends from Old Shire under the income access share arrangements, he must withdraw his Shire ordinary shares from the Shire ADS program prior to the dividend record date set by the Depositary and request delivery of the Shire ordinary shares. This will enable him to receive dividends from Shire (if necessary, by making an election to that effect).

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It is the expectation, although there can be no certainty, that dividends will be paid by Old Shire through the income access share trustee to Shire ordinary shareholders who make (or are deemed to make) an income access share election.

It is the expectation, although there can be no certainty, that Old Shire will distribute dividends on the income access share to the income access share trustee for the benefit of all Shire ordinary shareholders who make (or are deemed to make) an income access share election in an amount equal to what would have been such Shire ordinary shareholders’ entitlement to dividends from Shire in the absence of the income access share election. To the extent that any dividend paid on the income access share to the income access share trustee and on-paid by the income access share trustee to the Shire ordinary shareholders is less than an amount equal to what would have been such Shire ordinary shareholders’ entitlement to dividends from Shire in the absence of the income access share election, the dividend on the income access share received by the income access share trustee will be allocated pro rata to such Shire ordinary shareholders and Shire will pay the balance by way of dividend. In such circumstances, there will be no grossing up by Shire in respect of, and Old Shire and Shire will not compensate those Shire ordinary shareholders for, any adverse consequences including any Irish withholding tax consequences.

Shire will be able to suspend or terminate these arrangements at any time, in which case the full Shire dividend will be paid directly by Shire to those Shire ordinary shareholders (including the Depositary) who have made (or are deemed to have made) an income access share election. In such circumstances, there will be no grossing up by Shire in respect of, and Old Shire and Shire will not compensate those Shire ordinary shareholders for, any adverse consequences including any Irish withholding tax consequences.

On October 7, 2008 Old Shire paid dividends totalling $9.5m on the income access share to the income access share trustee in an amount equal to the dividend Shire ordinary shareholders would have received from Shire.

Exchangeable Shares

On February 12, 2008 a subsidiary of Shire exercised a redemption call right and purchased each exchangeable share of Shire Acquisition Inc. (“SAI”) remaining in public ownership.  Exchangeable shareholders received either three ordinary shares of Shire plc or one American Depositary Share (“ADS”) representing three ordinary shares of Shire plc for each Exchangeable Share held.  Exchangeable Shares were issued to Canadian resident shareholders of Biochem Pharma Inc. (now Shire Canada, Inc.) in 2001 as consideration for the acquisition by the Shire group of Biochem Pharma Inc.  The Exchangeable Shares have now been de-listed from the Toronto Stock Exchange.

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18. Earnings per share

The following table reconciles the net (loss)/income from operations and the weighted average ordinary shares outstanding for basic and diluted earnings per share for the periods presented:

	3 months to September 30, 2008 $’M			3 months to September 30, 2007 $’M		9 months to September 30, 2008 $’M			9 months to September 30, 2007 $’M
(Loss)/income from continuing operations		(34.0	)		34.7		15.6			(1,663.9	)
Loss from discontinued operations		(0.9	)		-		(0.9	)		-
Numerator for basic and diluted earnings per share		(34.9	)		34.7		14.7			(1,663.9	)

Weighted average number of shares:	No. of shares Millions		No. of shares Millions		No. of shares Millions		No. of shares Millions
Basic(1)		540.3		546.4		542.6		538.9
Effect of dilutive shares:
Stock based awards to employees(2)		-		8.2		2.7		-
Warrants(2)		-		0.1		-		-
		-		8.3		2.7		-
Diluted		540.3		554.7		545.3		538.9

(1) Excludes shares purchased by the ESOT and presented by the Company as treasury stock.

(2) Calculated using the treasury stock method.

The share equivalents not included in the calculation of the diluted weighted average number of shares are shown below:

	3 months to September 30, 2008(2)		3 months to September 30, 2007(1) (3)		9 months to September 30, 2008(1)(3)		9 months to September 30, 2007(2)
	No. of shares Millions		No. of shares Millions		No. of shares Millions		No. of shares Millions
Stock options in the money		1.2		-		-		7.8
Stock options out of the money		17.0		1.0		17.0		2.0
Warrants		-		-		-		0.4
Convertible bonds 2.75% due 2014		32.7		32.7		32.7		17.3

(1) For the nine months ended September 30, 2008 and the three months ended September 30, 2007, certain stock options have been excluded from the calculation of diluted EPS because their exercise prices exceeded Shire plc’s average share price during the calculation period.

(2) For the three months ended September 30, 2008 and the nine months ended September 30, 2007 no share options, warrants or ordinary shares underlying the convertible bonds have been included in the calculation of the diluted weighted average number of shares, because the Company made a net loss during the calculation period and the inclusion of these items would be anti-dilutive.

(3) For the nine months ended September 30, 2008 and the three months ended September 30, 2007, the convertible bonds were not included in the calculation of the diluted weighted average number of shares, because their effect would be anti-dilutive in the period.

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19. Segmental reporting

SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information”(“SFAS No. 131”) establishes standards for reporting information about operating segments and related disclosures, products and services, geographic areas and major customers.  Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-maker to decide how to allocate resources and to assess performance.

Shire’s internal financial reporting is in line with a business unit and management reporting structure based on two segments: Specialty Pharmaceuticals and Human Genetic Therapies (“HGT”).

The Specialty Pharmaceuticals and HGT operating segments represent the Company’s revenues and costs in respect of currently promoted and sold products, together with the costs of developing projects for future commercialization.  ‘All Other’ has been included in the table below in order to reconcile the two operating segments to the total consolidated figures.

The Company evaluates performance based on revenue and operating income. The Company does not have inter-segment transactions. Assets that are directly attributable to the segments have been separately disclosed.

	Specialty Pharmaceuticals			HGT			All Other			Total
3 months to September 30, 2008		$’M			$’M			$’M			$’M
Product sales		589.5			123.0			-			712.5
Royalties		0.3			-			60.5			60.8
Other revenues		1.3			1.5			2.5			5.3
Total revenues		591.1			124.5			63.0			778.6
Cost of product sales(1) (2)		66.0			17.1			1.1			84.2
Research and development(1) (2)		72.6			50.4			4.1			127.1
Selling, general and administrative(1) (2)		222.8			37.5			60.1			320.4
In-process R&D charge		-			120.5			-			120.5
Gain on sale of product rights		(4.0	)		-			-			(4.0	)
Integration costs		-			-			7.5			7.5
Total operating expenses		357.4			225.5			72.8			655.7
Operating income/(loss)		233.7			(101.0	)		(9.8	)		122.9
Total assets		2,240.4			1,131.7			981.7			4,353.8
Long lived assets		191.9			228.5			80.3			500.7
Capital expenditure on long lived assets		14.6			63.2			6.5			84.3

(1) Stock-based compensation of $16.2 million is included in: cost of product sales ($1.0 million), research and development ($4.8 million) and selling, general and administrative ($10.4 million).

(2) Depreciation from manufacturing plants ($3.2 million) and amortization of favorable manufacturing contracts ($0.4 million) is included in cost of product sales; depreciation of research and development assets ($3.4 million) is included in research and development; and all other depreciation, amortization and intangible asset impairment charges ($42.1 million) are included in selling, general and administrative.

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3 months to September 30, 2007	Specialty Pharmaceuticals $’M			HGT $’M		All Other $’M			Total $’M
Product sales		447.3			95.8		-			543.1
Royalties		0.3			-		61.6			61.9
Other revenues		1.5			0.7		1.5			3.7
Total revenues		449.1			96.5		63.1			608.7
Cost of product sales(1) (2)		66.2			13.5		3.7			83.4
Research and development(1)		140.6			40.8		-			181.4
Selling, general and administrative(1) (2)		238.1			28.9		61.4			328.4
Gain on sale of product rights		(7.1	)		-		-			(7.1	)
Total operating expenses		437.8			83.2		65.1			586.1
Operating income/(loss)		11.3			13.3		(2.0	)		22.6
Total assets		2,383.3			605.7		1,099.7			4,088.7
Long lived assets		164.9			96.3		76.4			337.6
Capital expenditure on long lived assets		13.7			11.0		3.8			28.5

(1) Stock-based compensation of $11.7 million is included in: cost of product sales ($0.9 million), research and development ($3.3 million) and selling, general and administrative ($7.5 million).

(2) Depreciation from manufacturing plants ($3.1 million) and amortization of favorable manufacturing contracts ($0.5 million) is included in cost of product sales, depreciation of research and development assets ($2.9 million) is included in research and development, and all other depreciation and amortization ($41.6 million) is included in selling, general and administrative.

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	Specialty Pharmaceuticals			HGT			All Other		Total
9 months to September 30, 2008		$’M			$’M			$’M		$’M
Product sales		1,687.4			362.5			-		2,049.9
Royalties		1.3			-			189.4		190.7
Other revenues		5.5			2.8			7.5		15.8
Total revenues		1,694.2			365.3			196.9		2,256.4
Cost of product sales(1) (2)		264.6			44.9			7.9		317.4
Research and development(1) (2)		244.8			145.5			4.1		394.4
Selling, general and administrative(1) (2)		818.2			113.7			151.8		1,083.7
In-process R&D charge		-			255.5			-		255.5
Gain on sale of product rights		(20.7	)		-			-		(20.7	)
Integration costs		-			-			7.5		7.5
Total operating expenses		1,306.9			559.6			171.3		2,037.8
Operating income/(loss)		387.3			(194.3	)		25.6		218.6
Total assets		2,240.4			1,131.7			981.7		4,353.8
Long lived assets		191.9			228.5			80.3		500.7
Capital expenditure on long lived assets		34.3			127.2			20.3		181.8

(1) Stock-based compensation of $52.0 million is included in: cost of product sales ($3.4 million), research and development ($15.0 million) and selling, general and administrative ($33.6 million).

(2) Depreciation from manufacturing plants ($8.8 million) and amortization of favorable manufacturing contracts ($1.3 million) is included in cost of product sales; depreciation of research and development assets ($9.4 million) is included in research and development; and all other depreciation, amortization and intangible asset impairment charges ($216.3million) are included in selling, general and administrative.

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	Specialty Pharmaceuticals			HGT		All Other		Total
9 months to September 30, 2007	$’M			$’M		$’M		$’M
Product sales		1,279.3			229.5		-		1,508.8
Royalties		1.3			-		184.1		185.4
Other revenues		8.2			5.5		3.9		17.6
Total revenues		1,288.8			235.0		188.0		1,711.8
Cost of product sales(1) (2)		186.7			28.8		9.2		224.7
Research and development(1) (2)		254.1			111.6		-		365.7
Selling, general and administrative(1) (2)		621.2			92.8		133.5		847.5
In-process R&D charge		1,896.0			-		-		1,896.0
Gain on sale of product rights		(12.1	)		-		-		(12.1	)
Integration costs		1.3			-		-		1.3
Total operating expenses		2,947.2			233.2		142.7		3,323.1
Operating (loss)/income		(1,658.4	)		1.8		45.3		(1,611.3	)
Total assets		2,383.3			605.7		1,099.7		4,088.7
Long lived assets		164.9			96.3		76.4		337.6
Capital expenditure on long lived assets		17.6			21.2		23.3		62.1

(1) Stock-based compensation of $34.1 million is included in: cost of product sales ($2.6 million), research and development ($8.9 million) and selling, general and administrative ($22.6 million).

(2) Depreciation from manufacturing plants ($9.0 million), and amortization of favorable manufacturing contracts ($0.5 million) is included in cost of product sales, depreciation of research and development assets ($8.4 million) is included in research and development, and all other depreciation and amortization and intangible asset impairment charges ($93.9 million) is included in selling, general and administrative.

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20. Subsequent events

During November 2008, the Companysettled all pending litigation brought by certain former dissenting shareholders of Transkaryotic Therapies, Inc. (“TKT”). As disclosed in Note 14, before completion of the merger, certain dissenting shareholders holding approximately 11.7 million of TKT shares, elected not to accept the $37 per share merger consideration offered by the Company and submitted written demands for appraisal of the fair value of these shares. The former holders of 365,000 shares subsequently withdrew their appraisal demand and accepted the $37 per share merger consideration, leaving former holders of approximately 11.3 million shares of TKT seeking appraisal of their shares. A second lawsuit was brought in March 2007 alleging, among other claims, breaches of fiduciary duty by certain members of TKT’s Board. The majority of that second lawsuit was dismissed by the Court at summary judgment in June 2008. A trial date of December 10, 2008 was set for both cases.

As a result of this settlement, the Company will pay $37 per share, the same amount per share paid to non-dissenting shareholders in July 2005 at the time of the merger between the Company and TKT, plus interest. The Delaware Chancery Court approved dismissal of the case, and the Company made payment to the dissenting shareholders on November 7, 2008. The settlement represents a total payment of $567.5 million, representing consideration at $37 per share of $419.9 million and an interest cost of $147.6 million.  The payment of $567.5 million will be funded entirely from the Company’s existing cash resources and by drawing $190 million on its $1,200 million revolving credit facility.

Prior to reaching this settlement, the Company accrued interest based on a reasonable estimate of the amount that may be awarded by the Court to those former TKT shareholders who requested appraisal.  This estimate of interest was based on Shire’s cost of borrowing. Between the close of the merger and September 30, 2008 the Company applied this interest rate on a quarterly compounding basis to the $419.9 million of consideration to calculate its provision for interest.

Upon reaching agreement in principle with all the dissenting shareholders, the Company determined that settlement had become the probable manner through which the appraisal rights litigation would be resolved.  Under current law, (although not applicable in this case because the merger was entered into before the relevant amendment to the law became effective) the court presumptively awards interest in appraisal rights cases at a statutory rate that is 5 percentage points above the Federal Reserve discount rate (as it varies over the duration of the case). In connection with the settlement, the Company agreed to an interest rate that approximates to this statutory rate. Based on the settlement, the Company amended the method of determining its interest provision to reflect this revised manner of resolution, and recorded an additional provision for interest of $73.0 million as an adjusting post balance sheet event in its third quarter financial statements.

The interest cost of $147.6 million has been recorded as interest expense in the Company’s Statement of Operations since the time of the merger, including $77.0 million and $87.3 million recorded in the three and nine months to September 30, 2008 (2007: $7.3 million and $20.7 million) respectively.

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the Company’s unaudited consolidated financial statements and related notes appearing elsewhere in this report.

Overview

Shire’s strategic goal is to become the leading specialty biopharmaceutical company that focuses on meeting the needs of the specialist physician.  Shire focuses its business on attention deficit hyperactivity disorder ("ADHD"), human genetic therapies ("HGT"), gastrointestinal ("GI") diseases as well as opportunities in other therapeutic areas to the extent they arise through acquisitions. Shire’s in-licensing, merger and acquisition efforts are focused on products in specialist markets with strong intellectual property protection and global rights. Shire believes that a carefully selected and balanced portfolio of products with relatively small-scale sales forces will deliver strong results.

Recent Developments

Settlement of TKT Shareholder Appraisal Rights Litigation

On November 5, 2008 the Company announced that it had settled all pending litigation in connection with the former dissenting shareholders of TKT. The Company has paid the former dissenting shareholders the same price of $37 per share originally offered to all TKT shareholders at the time of the July 2005 merger, plus interest. The total cost of the settlement is $567.5 million (see ITEM 1, Note 20 for further details).

Change of name

Since the end of June 2008 Jersey company law has permitted a public company to use “plc” in its name and it was considered appropriate that the Company adopt this nomenclature. Consequently on September 24, 2008 at the Company’s AGM, it was resolved that the name of Shire Limited be changed to Shire plc.

Significant events in the three months to September 30, 2008

Product highlights

VYVANSETM (lisdexamfetamine dimesylate) – Attention Deficit and Hyperactivity Disorder (“ADHD”)

The launch of VYVANSE for adult ADHD in June 2008 has helped to make VYVANSE the third highest prescribed ADHD product in the US. For the nine months to September 30, 2008 VYVANSE product sales totaled $215.6 million.

On July 2, 2008 Shire shipped to wholesalers stocks of three additional dosage strengths (20mg, 40mg and 60mg) for VYVANSE representing product sales of approximately $24 million.  These product sales have been recognized into revenue in Q3 2008.

FOSRENOL® (lanthanum Carbonate) - Hyperphosphatemia

FOSRENOL was approved in Japan in October 2008. Shire’s out-licensee, Bayer Yakuhin Limited, is now progressing pricing and reimbursement negotiations in that market.

Business highlights

Acquisition of Jerini

During Q3 2008 Shire acquired a majority voting interest in Jerini and published an Offer Document in respect of acquiring the remaining shares in Jerini that it did not already own.  By September 30, 2008 Shire had acquired over 90% of the shares in Jerini and now owns approximately 93% of the shares. The acquisition has added Jerini’s HAE product, FIRAZYR, to the portfolio (See ITEM1, Note 3 for further details).

Sale of non-core assets

Following the transfer of the relevant marketing consents Shire recognised previously deferred gains of $4 million arising from the divestment of non-core products to Laboratorios Almirall S.A (“Almirall”) in 2007.

Research and development

Products in registration September 30, 2008

FOSRENOL for the treatment of pre-dialysis chronic kidney disease (“CKD”)

Following the FDA Cardiovascular and Renal Drugs Advisory Committee recommendation in October of 2007 on the use of phosphate binders, including FOSRENOL, to treat hyperphosphatemia in pre-dialysis CKD patients, Shire continues to work with the FDA to agree to a regulatory pathway for approval for use in pre-dialysis patients.

VYVANSE for ADHD in Canada

In March 2008 the Canadian new drug submission was accepted for filing for the treatment of ADHD in children. Review is ongoing.

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INTUNIV for ADHD

On June 21, 2007 Shire received an approvable letter from the FDA for INTUNIV.  Shire is conducting additional clinical work which is designed to enhance the label. While the precise timing for the approval of INTUNIV is unknown, it is anticipated that launch for use in children and adolescents will occur in the second half of 2009.

DAYTRANA for ADHD in EU & Canada

Regulatory submissions were filed for approval of the product with Health Canada on November 29, 2007 and in the EU via the decentralized procedure with the Netherlands as the reference member state on December 12, 2007. Reviews are ongoing.

LIALDA/MEZAVANT for Ulcerative Colitis

A Regulatory submission for MEZAVANT for the treatment of ulcerative colitis was made to the Australian Regulatory Authorities (TGA) in September  2008.

FIRAZYR for HAE in the US

Jerini received a not approvable letter for FIRAZYR for use in the US from the FDA in April 2008, and plans to provide a complete response by the end of the year.

Products in clinical development as at September 30, 2008

Phase 3

VYVANSE for ADHD in Europe

Shire plans to submit the regulatory filing for VYVANSE in Europe for the treatment of ADHD in children aged 6 to 17 in 2010.

LIALDA/MEZAVANT for the maintenance of remission in ulcerative colitis

Phase 3 trials investigating the use of the product to maintain remission in patients who have ulcerative colitis were initiated in 2006 and are continuing.

LIALDA/MEZAVANT for the treatment of diverticulitis

Phase 3 worldwide clinical trials investigating the use of the product for the treatment of diverticulitis were initiated in 2007 and are continuing.

SEASONIQUE

Shire is evaluating the scientific advice received following meetings in 2007 with the regulatory authorities in Europe in order to formulate the regulatory filing strategy.

Velaglucerase alfa

Shire has completed enrolment in a worldwide Phase 3 clinical program for velaglucerase alfa, an enzyme replacement therapy being developed for the treatment of Gaucher disease. This comprehensive development program includes the evaluation of velaglucerase alfa in naïve patients and patients previously treated with imiglucerase across three clinical studies. It is anticipated that this development program will support global filings in the second half of 2009.

Phase 2

JUVISTA for the improvement of scar appearance

Renovo Limited (“Renovo”) intends to initiate its first pivotal European Phase 3 trial in scar revision in the fourth quarter of 2008 in support of Renovo’s filing of a European regulatory dossier. If the outcome from Renovo’s multi centre, EU Phase 3 study is suitably positive, the data will be used to inform the strategy and design of Shire’s US development plan and to strengthen the chances of regulatory and commercial success in the US.

SPD550 for the treatment of Celiac disease

On December 14, 2007 Shire acquired the worldwide rights to SPD550 (Larazotide Acetate) (also known as AT-1001) in markets outside of the US and Japan from Alba Therapeutics Corporation (“Alba”). The two parties have established Joint Committees which will guide the development, manufacture, and commercialization of the product.  Alba has initiated and is responsible for executing the agreed upon ongoing Phase 2 program and certain non-clinical studies for the treatment of Celiac disease. Additional development studies may be conducted jointly or by the individual companies prior to or after initiation of Phase 3.

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Transvaginal Ring (“TVR”) technology

The TVR technology products are in various stages of development.

MLD program

Shire has an ongoing enzyme replacement therapy program for the treatment of MLD, which is a lysosomal storage disorder that results from a deficiency in the enzyme arylsulfatase-A (“ASA”). On June 4, 2008 Shire completed its acquisition from Zymenex A/S (“Zymenex”) of the global rights to a clinical candidate ASA, currently known as METAZYM. METAZYM has completed a Phase 1b clinical trial in 12 MLD patients in Europe and an extension to this study is ongoing.  The product has been granted orphan drug designation in the US and in the EU. The current plan is to initiate a Phase 2/3 clinical trial as soon as possible following discussions with regulatory authorities in Q4 2008. This product will now be referred to as HGT-1111.

HGT-1110 was in development at Shire for the treatment of MLD following successful pre-clinical proof of concept studies. The HGT-1110 program was replaced with the HGT-1111 development program upon completion of the acquisition.

AMIGAL (HGT-3310 for the treatment Fabry disease)

Amicus Therapeutics Inc. (“Amicus”) met with the FDA to discuss the AMIGAL development program in June 2008, and discussions are ongoing. Discussions are ongoing with the EMEA. A final decision on the global development strategy will follow the conclusion of the discussions with both agencies. Shire has rights to AMIGAL in markets outside the US.

PLICERA (HGT-3410 for the treatment of Gaucher disease)

In March 2008 Amicus announced positive data from its Phase 2 clinical trial. Results from the Phase 2 trial support the previously reported interim findings that PLICERA was generally safe and well tolerated at all doses and increased target enzyme activity levels in a majority of patients. Shire has rights to PLICERA in markets outside the US.

HGT-3510 for the treatment of Pompe disease

In June 2008 Amicus initiated Phase 2 clinical trials of HGT-3510, an orally administered, small molecule pharmacological chaperone being jointly developed for the treatment of Pompe disease by Shire and Amicus. Shire has rights to HGT-3510 in markets outside the US.

Phase 1

SPD487 (Amphetamine transdermal system (“ATS”))

Shire is currently reviewing formulation data provided by Noven Pharmaceuticals Inc.

HGT-2310 - - Hunter syndrome with significant central nervous system symptoms

Following the acceptance by the FDA in January 2008 of Shire’s IND application for idursulfase-IT (HGT-2310 - formerly referred to as ELAPRASE for Hunter syndrome patients with significant central nervous system symptoms - “Hunter CNS”) the Company is now in the process of planning clinical trials.

Products in pre-clinical development as at September 30, 2008

HGT-1410 for Sanfilippo Syndrome (Mucopolysaccharidosis IIIA)

On May 22, 2008 orphan drug designation was granted by the FDA for HGT-1410, an enzyme replacement therapy being developed for the treatment of Sanfilippo Syndrome, a lysosomal storage disorder.  Pre-clinical development for this product is continuing.

A number of projects are underway in the early stages of development (pre-clinical) for the Specialty Pharmaceutical and HGT businesses.

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Results of operations for the three months to September 30, 2008 and 2007

Total revenues

The following table provides an analysis of the Company’s total revenues by source:

	3 months to September 30, 2008 $M		3 months to September 30, 2007 $M		change %
Product sales		712.5		543.1		31
Royalties		60.8		61.9		-2
Other		5.3		3.7		43
Total		778.6		608.7		28

Product sales

The following table provides an analysis of the Company’s key product sales:

	3 months to September 30, 2008 $M		3 months to September 30, 2007 $M		Product sales growth %		US prescription growth  %
Specialty Pharmaceuticals
ADHD
ADDERALL XR		268.7		249.0		8		-5%
VYVANSE		96.0		10.6		806		n/a
DAYTRANA		18.1		9.4		93		-14%
GI
PENTASA		49.2		43.7		13		n/a
LIALDA / MEZAVANT		40.4		16.3		148		143%
General Products (“GP”)
FOSRENOL		43.0		28.7		50		-1%
DYNEPO		5.2		4.4		18		n/a
CALCICHEW		13.3		13.5		-1		n/a
CARBATROL		21.6		19.3		12		-3%
REMINYL/REMINYL XL		9.6		8.2		17		n/a
XAGRID		19.4		16.8		15		n/a
Other product sales		5.0		27.4		-82
		589.5		447.3		32
Human Genetic Therapies
ELAPRASE		78.2		55.1		42		n/a
REPLAGAL		44.6		40.7		10		n/a
FIRAZYR		0.2		-		n/a		n/a
		123.0		95.8		28
Total product sales		712.5		543.1		31

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The following discussion includes references to prescription and market share data for the Company’s key products.  The source of this data is IMS Health, September 2008.  IMS Health is a leading global provider of business intelligence for the pharmaceutical and healthcare industries.

US ADHD market share

Shire’s average quarterly market share of the US ADHD market rose to 32.9% in the three months to September 30, 2008 (2007: 29.7%), driven by the continued growth in market share of VYVANSE. The overall US ADHD market grew by 8% in the same period. Shire has the leading portfolio of products in the US ADHD market.

ADDERALL XR – ADHD

As a result of the launch of VYVANSE in July 2007, ADDERALL XR’s average quarterly market share of the US ADHD market for Q3 2008 fell to 22.3% (2007: 25.2%), a decrease of 12% compared to the same period in 2007.  US prescriptions for ADDERALL XR in the three months to September 30, 2008 decreased by 5% compared to the same period in 2007 due to the 12% decrease in the average market share offset by 8% growth in the US ADHD market.

Sales of ADDERALL XR for the three months to September 30, 2008 were $268.7 million, an increase of 8% compared to the same period in 2007 (2007: $249.0 million).  Product sales grew despite the decline in US prescriptions primarily due to price increases.

Litigation proceedings concerning Shire’s ADDERALL XR patents are on-going. Further information on this litigation can be found in ITEM 1 of Part I of this Form 10-Q.

VYVANSE – ADHD

VYVANSE was launched in the US market in July 2007.  Product sales for the three months to September 30, 2008 were $96.0 million (2007: $10.6 million) representing a 47% increase compared to sales of $65.2 million in Q2 2008.

Product sales growth was driven by a 19% increase in prescription demand compared to Q2 2008, a price increase and the stocking impact of the new dosage strengths.  For the three months to September 30, 2008 VYVANSE’s average quarterly market share was 9.0% (2007: 2.4%) of the US ADHD market.

By October 17, 2008 VYVANSE had achieved a US ADHD average weekly market share of 10.2%, based on weekly prescription volumes.

DAYTRANA – ADHD

Product sales for the three months to September 30, 2008 were $18.1 million (2007: $9.4 million).  Prescriptions declined by 14% from the same period last year due to a reduction in DAYTRANA’s average quarterly market share of the US ADHD market to 1.6% (2007: 2.1%).

Despite the decrease in prescriptions compared to 2007, sales of DAYTRANA grew 93% compared to the same period last year due to lower sales deductions in 2008 over 2007, when a provision was made for returns following the voluntary market withdrawal of a limited number of DAYTRANA patches.

On August 19, 2008 Shire announced a voluntary recall of two lots of DAYTRANA patches because these patches did not meet their release liner removal specifications which may have resulted in some patients and caregivers having difficulties removing the liners. The voluntary recall was not due to safety issues. Shire and Noven Pharmaceuticals Inc. (“Noven”) (the manufacturer of DAYTRANA) continue to pursue enhancements to the product and to work closely with the FDA to implement changes that may improve the usability of DAYTRANA. No interruption in the production of DAYTRANA is anticipated. Shire and Noven may take additional corrective action.

US oral mesalamine market share

Shire’s average quarterly market share of the US oral mesalamine market rose to 29.3% in the three months to September 30, 2008 (2007: 22.5%), driven by the growth of LIALDA since its launch in March 2007.  The overall US oral mesalamine market grew by 2.4% in the same period.

LIALDA/MEZAVANT – Ulcerative colitis

Shire launched LIALDA in the US oral mesalamine market in March 2007, and during the three months to September 30, 2008 LIALDA had reached an average quarterly market share of 12.7% (2007: 5.4%).  Product sales of LIALDA in the US for the three months to September 30, 2008 were $38.6 million (2007: $16.3 million).

Sales of MEZAVANT outside the US for the three months ended September 30, 2008 were $1.8 million (2007: $nil). As of September 30, 2008 LIALDA/MEZAVANT was available in five EU countries. Launches are planned in other countries during 2008 and 2009, subject to the successful conclusion of pricing and reimbursement negotiations.

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PENTASA – Ulcerative colitis

Sales of PENTASA in the US for the three months to September 30, 2008 were $49.2 million, an increase of 13% compared to the same period in 2007 (2007: $43.7 million). During the three months to September 30, 2008 Pentasa had an average market share of 16.6% (2007: 17.1%). Sales grew despite flat prescriptions due to the impact of price increases.

FOSRENOL – Hyperphosphatemia

FOSRENOL is now available in 29 countries and global sales totaled $43.0 million for the three months to September 30, 2008 (2007: $28.7 million).  US sales of FOSRENOL for the three months to September 30, 2008 were up 50% to $24.5 million compared to the same period in 2007 (2007: $16.3 million).  Sales of FOSRENOL outside the US for the same period were up 49% to $18.5 million (2007: $12.4 million), with favorable exchange rate movements against the US dollar accounting for 8% .

FOSRENOL’s average quarterly prescription share of the US phosphate binder retail market decreased  to 8.1% for the three months to September 30, 2008 (2007: 8.5%). Product sales increased despite the decrease in prescriptions due to price increases and an increase in FOSRENOL’s share of the non retail market (increased to 16% in August 2008 compared to 12% in August 2007) as a consequence of focusing on specialist physicians in clinics and dialysis centers.

XAGRID – Thrombocythemia

Sales for the three months to September 30, 2008 were $19.4 million, an increase of 15% compared to the same period in 2007 (2007: $16.8 million).  Expressed in transaction currencies (XAGRID is primarily sold in Euros and Pounds Sterling), sales increased by 11% due to growth in many of Shire’s existing markets, with exchange rate movements against the US dollar accounting for the remaining 4% increase.

Human Genetic Therapies

ELAPRASE – Hunter syndrome

Sales for the three months to September 30, 2008 were $78.2 million, an increase of 42% compared to the same period in 2007 (2007: $55.1 million).  The sales growth was primarily driven by increased unit sales in North America, EU, Latin America, and the Asia Pacific. The product is now approved for marketing and commercial distribution in 42 countries.  Exchange rate movements against the US dollar contributed 5% to the growth compared to the prior year.

REPLAGAL – Fabry disease

Sales for the three months to September 30, 2008 were $44.6 million, an increase of 10% compared to the same period in 2007 (2007: $40.7 million).  The sales growth was primarily driven by increased unit sales in the EU and Asia Pacific. The product is now approved for marketing and commercial distribution in 43 countries.  Exchange rate movements against the US dollar contributed 5% to the growth compared to the prior year.

FIRAZYR – HAE

In September 2008, FIRAZYR was launched in Germany and the UK, recognizing sales of $0.2 million (2007: $nil). Launches will continue across Europe as reimbursement negotiations proceed.

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Foreign exchange effect

As many of the Company’s sales revenues are earned in currencies other than US dollars (primarily Euros and Pounds sterling), revenue growth reported in US dollars includes the impact of translating the sales made in a local currency, into US dollars.  The table below shows the effect of foreign exchange translations on the revenue growth of the key affected products as well as the underlying performance of key products in their local currency:

	3 months to September 30, 2008 sales $M		3 months to September 30, 2008 sales growth in local currency  %		3 months to September 30, 2008 sales growth in US dollars %		Impact of translation to US dollars %
XAGRID sales in Euros		12.5		+9		+20		+11
REPLAGAL sales in Euros		27.3		+8		+18		+10
ELAPRASE sales in Euros		39.3		+21		+33		+11
XAGRID sales in Pounds Sterling		6.9		+15		+8		-7
CALCICHEW sales in Pounds Sterling		11.8		+3		-3		-6
REMINYL and REMINYL XL sales in Pounds Sterling		9.1		+26		+18		-8
REPLAGAL sales in Pounds Sterling		6.5		-3		-9		-6
ELAPRASE sales in Pounds Sterling		7.3		+16		+10		-6

Royalties

Royalty revenue decreased by 2% to $60.8 million for the three months to September 30, 2008 (2007: $61.9 million).  The following table provides an analysis of Shire’s royalty income:

	3 months to September 30, 2008 $M		3 months to September 30, 2007 $M		Change %
3TC		35.9		36.7		-2
ZEFFIX		8.6		10.2		-16
Others		16.3		15.0		9
Total		60.8		61.9		-2

3TC – HIV infection and AIDS

Shire receives royalties from GSK on worldwide 3TC sales.  Royalties from sales of 3TC for the three months to September 30, 2008 were $35.9 million, (2007: $36.7 million). Excluding unfavorable foreign exchange movements of 6%, there has been growth of 4% compared to the same period in 2007.  The growth of 4% (excluding foreign exchange movements) primarily relates to the phasing of royalty income over Q2 and Q3 2008 and is not representative of trends in the overall 3TC market.  While the nucleoside analogue market for HIV has continued to grow, competitive pressures from new products and entrants to the market have increased and are expected to lead to an overall decline in 3TC sales.

ZEFFIX – Chronic hepatitis B infection

Shire receives royalties from GSK on worldwide ZEFFIX sales.  Royalties from sales of ZEFFIX for the three months to September 30, 2008 were $8.6 million, a decrease of 16% (2007: $10.2 million).  The impact of foreign exchange movements has contributed 10% to the reported decline; excluding unfavorable foreign exchange movements there has been a decrease of 6% compared to the same period in 2007.

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Other

Other royalties are primarily in respect of REMINYL and REMINYL XL (known as RAZADYNE and RAZADYNE ER in the US), a product marketed worldwide (excluding the UK and the Republic of Ireland) by Janssen Pharmaceutical N.V. (“Janssen”), an affiliate of Johnson & Johnson.  Shire has exclusive marketing rights in the UK and the Republic of Ireland.

In the US, patent infringement litigation brought by Synaptech and Janssen against several ANDA filers culminated in a trial in Delaware in 2007. Following a decision on August 28, 2008 which rendered the relevant patent invalid, generic versions of RAZADYNE were permitted to enter the US market.

Sales of the REMINYL/RAZADYNE range, for the symptomatic treatment of mild to moderately severe dementia of the Alzheimer’s type, continue to grow in most countries however the entry of generics into the US market has severely decreased sales in that region.  This decline was expected and is included in our forecasts.

Litigation proceedings relating to RAZADYNE, RAZADYNE ER, REMINYL, REMINYL XL are ongoing.  Further information on these litigations can be found in ITEM 1 of Part I of this Form 10-Q.

Cost of product sales

The cost of product sales increased to $84.2 million for the three months to September 30, 2008 (12% of product sales), from $83.4 million in the corresponding period in 2007 (2007: 15% of product sales). Cost of product sales as a percentage of product sales in the three months to September 30, 2008 compared to the same period in 2007 decreased by 3% points due to favorable charges in product mix.

For the three months to September 30, 2008 cost of product sales included depreciation of $3.2 million (2007: $3.1 million) and amortization of $0.4 million (2007: $0.5 million).  Excluding these charges, cost of product sales decreased as a percentage of product sales to 11% (2007: 15% of product sales).

Research and development (R&D)

R&D expenditure decreased to $127.1 million for the three months to September 30, 2008 (18% of product sales), from $181.4 million in the corresponding period in 2007 (33% of product sales).   For the three months to September 30, 2008 R&D included depreciation of $3.4 million (2007: $2.9 million). For the three months to September 30, 2007 R&D included the up-front payment of $75.0 million to Renovo in respect of JUVISTA (14% of product sales).

Contributing to R&D expenditure in the third quarter of 2008 over 2007 were costs associated with projects in-licensed and acquired since the second half of 2007 including PLICERA, SPD550, AMIGAL, FIRAZYR and METAZYM together with Phase 3(b) and Phase 4 studies to support new product launches.

Selling, general and administrative (SG&A) expenses

SG&A expenses decreased by $8.0 million to $320.4 million (45% of product sales) for the three months to September 30, 2008 compared to $328.4 million (60% of product sales) for the corresponding period in 2007. SG&A expenses for the third quarter of 2008 include amortization of intangible assets of $29.7 million (2007: $31.1 million), costs associated with the introduction of a new holding company of $2.0 million (2007: $nil) and depreciation charges of $12.0 million, (2007: $10.5 million). SG&A for the three months to September 30, 2007 also included charges of $27.0 million in respect of legal settlement provisions for the TKT Class Action Shareholder Suit. SG&A was further reduced as a percentage of product sales reflecting the sales impact in the three months to September 30, 2008 of the successful launches of VYVANSE, LIALDA/MEZAVANT and ELAPRASE.

In Process R&D charge

During the three months to September 30, 2008 the Company recorded an in-process R&D charge of $120.5 million (2007: $nil) in respect of FIRAZYR in markets outside of the EU which, at the acquisition date, had not been approved by the relevant regulatory authorities.

Gain on sale of product rights

For the three months to September 30, 2008 Shire recognized gains of $4.0 million arising from the sale of non-core products to Laboratorios Almirall S.A in 2007. These gains were deferred at December 31, 2007 pending the transfer of the relevant consents.

In the three months to September 30, 2007 Shire recognized gains of $7.1 million on the disposal of EQUETRO to Validus Pharmaceuticals Inc.

Integration costs

During the three months to September 30, 2008 the Company recorded integration costs of $7.5 million (2007: $nil) in respect of Jerini, primarily being acquisition related costs incurred by Jerini.

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Interest income

For the three months to September 30, 2008 Shire received interest income of $3.8 million (2007: $8.0 million).  Interest income primarily relates to interest received on cash and cash equivalents.  Interest income for the three months to September 30, 2008 is lower than the same period in 2007 due to lower average cash and cash equivalent balances and lower average US Dollar interest rates.

Interest expense

For the three months to September 30, 2008 the Company incurred interest expense of $92.9 million (2007: $18.0 million).

Interest expense for the three months to September 30, 2008 includes $77.0 million (2007: $7.3 million) in respect to the TKT appraisal rights litigation. This pending litigation was settled in November 2008. Prior to reaching this settlement, the Company accrued interest based on a reasonable estimate of the amount that may be awarded by the Court to those former TKT shareholders who requested appraisal. After reaching the settlement, the Company accrued additional interest expense of $73.0 million consistent with the terms of the settlement agreement. For further details on the settlement of this litigation, see ITEM 1, Note 20 of this Form 10-Q.

Other (expenses)/income, net

Other (expenses)/income for three months to September 30, 2008 includes impairment charges in respect of available for sale securities totaling $54.1 million (2007 : $nil), including $43.7 million relating to the Company’s investment in Renovo. These amounts reflect unrealized losses that have been reclassified out of other comprehensive income into earnings in the period, as management have concluded that the impairment is other than temporary.

The decline in the market value of the Company’s investment in Renovo initially arose from the results of clinical trials for JUVISTA announced by Renovo over 2007 and 2008. In considering whether the decline in value is temporary or “other than temporary” under US GAAP the Company had to consider the following factors:  the severity of the decline from historical cost (87%) and its duration (eleven months); market analysts’ targets of Renovo’s share price for the next 18-24 months; and the revised expected filing date for JUVISTA due to the adoption of a sequential rather than parallel Phase 3 development plan.

These factors, together with the significant decline in global equity markets during the third quarter of 2008 mean that the Company is unable to reasonably estimate the period over which a full recovery in the value of its investment in Renovo could occur.  As such, the Company had to conclude that for US GAAP purposes the decline in value is “other than temporary”.

In such circumstances US GAAP requires the full difference between the book value of the investment and the fair (market) value be recognized as an other than temporary impairment.  Accordingly the Company has recognized an impairment charge of $43.7 million through the Statement of Operations in the three months to September 30, 2008. If in the future JUVISTA’s Phase 3 trials report positively and Renovo’s other products progress through development, Renovo’s share price could react favorably and the Company may recover some or all of this impairment loss. Any future potential increases in the value of Renovo will be recognized through other comprehensive income.

Taxation

The Company accounts for income taxes during interim periods in accordance with SFAS No. 109, “Accounting for Income Taxes,” Accounting Principles Board, (“APB”) No. 28, “Interim Financial Reporting,” and FIN 18, “Accounting for Income Taxes in Interim Periods, an interpretation of APB Opinion No. 28”. For interim reporting purposes, these rules require that a company determine the best estimate of its annual effective tax rate and then apply that rate in providing for income taxes on a year-to-date basis. Accordingly, the Company has calculated an expected annual effective tax rate, excluding significant, unusual or extraordinary items, for ordinary income associated with operations for which the Company currently expects to have annual taxable income.

The annual effective tax rate applied to the results for the three months to September 30, 2008 was adversely influenced by items (such as the United States research and development tax credit which at September 30, 2008 has yet to be reinstated) that cannot at this time be included in the Company’s estimate of the expected annual effective tax rate. The impact of such items may subsequently be recognized within the expected annual effective tax rate when, in the case of the US research tax credit, tax law changes are enacted.

The effective tax rate for the three months to September 30, 2008 was a negative rate of 102.8% (2007: -211%).  In the three months to September 30, 2008 the negative effective tax rate of 102.8% primarily arose due to the IPR&D charge in respect of FIRAZYR in non-EU markets which is not deductible for tax. Excluding this IPR&D charge the effective rate of tax for the third quarter of 2008 was 18%. The Company has recorded a tax charge in 2008 compared to a tax credit in 2007 due to higher profits and lower levels of tax deductible expenditure in higher tax territories in 2008 compared to 2007. The negative effective tax rate in the third quarter of  2007 was primarily due to higher than forecast levels of tax deductible expenditure, (including amounts paid to Renovo in respect of JUVISTA and legal settlement fees), in high tax territories and reductions to specific tax liabilities following tax filings made in Q3 2007.

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Equity in earnings of equity method investees

Earnings of equity method investees of $1.6 million were recorded for the three months to September 30, 2008 (2007: $0.5 million).  This comprised earnings of $1.6 million from the 50% share of the anti-viral commercialization partnership with GSK in Canada (2007: $1.7 million).

Results of operations for the nine months to September 30, 2008 and 2007

Total revenues

The following table provides an analysis of the Company’s total revenues by source:

	9 months to September 30, 2008		9 months to September 30, 2007		change
		$M		$M	%
Product sales		2,049.9		1,508.8		36
Royalties		190.7		185.4		3
Other		15.8		17.6		-10
Total		2,256.4		1,711.8		32

Product sales

The following table provides an analysis of the Company’s key product sales:

	9 months to September 30, 2008 $M		9 months to September 30, 2007 $M		Product sales growth %		US prescription growth  %
Specialty Pharmaceuticals
ADHD
ADDERALL XR		826.6		753.2		10		-5%
VYVANSE		215.6		10.6		n/a		n/a
DAYTRANA		61.0		41.2		48		-10%
GI
PENTASA		138.2		127.7		8		-1%
LIALDA / MEZAVANT		99.6		21.3		n/a		n/a
GP
FOSRENOL		121.6		76.0		60		-4%
DYNEPO		18.9		6.3		n/a		n/a
CALCICHEW		40.8		39.1		4		n/a
CARBATROL		55.7		52.7		6		-4%
REMINYL/REMINYL XL		26.6		22.8		17		n/a
XAGRID		58.7		48.4		21		n/a
Other product sales		24.1		80.0		-70		n/a
		1,687.4		1,279.3		32
Human Genetic Therapies
ELAPRASE		230.5		124.4		85		n/a
REPLAGAL		131.8		105.1		25		n/a
FIRAZYR		0.2		-		-		n/a
		362.5		229.5		58
Total product sales		2,049.9		1,508.8		36

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The following discussion includes references to prescription and market share data for the Company’s key products.  The source of this data is IMS Health, September 2008. IMS Health is a leading global provider of business intelligence for the pharmaceutical and healthcare industries.

Specialty Pharmaceuticals

ADDERALL XR

As a result of the launch of VYVANSE in July 2007 ADDERALL XR’s average share of the US ADHD market for the nine months to September 30, 2008 fell to 23.0% (2007: 26.0%). US prescriptions for ADDERALL XR for the nine months to September 30, 2008 decreased by 5% compared to the same period in 2007 due to a 3% decrease in average market share offset by 7% growth in the US ADHD market.

Sales of ADDERALL XR for the nine months to September 30, 2008 were $826.6 million, an increase of 10% compared to the same period in 2007 (2007: $753.2 million). Product sales grew despite the decline in US prescriptions primarily due to price increases.

Litigation proceedings concerning the Company’s ADDERALL XR patents are ongoing. Further information on this litigation can be found in ITEM 1 of Part I of this Form 10-Q.

VYVANSE

For the nine months to September 30, 2008 VYVANSE’s average market share was 7.5% of the US ADHD market (2007: 0.8%). Product sales for the nine months to September 30, 2008 were $215.6 million (2007: $10.6 million).

By October 17, 2008 VYVANSE had achieved a US ADHD average weekly market share of 10.2% based on weekly prescription volumes.

DAYTRANA

Product sales for the nine months to September 30, 2008 were $61.0 million (2007: $41.2 million). Prescriptions reduced by 9.8% compared to the same period in 2007 due to a reduction in DAYTRANA’s average share of the US ADHD market from 2.1% in 2007 to 1.8% in 2008.

Despite the decrease in prescriptions compared to 2007, sales of DAYTRANA grew 48% due to lower sales deductions (primarily lower coupon deductions compared to 2007 which was impacted by launch coupon programs) and a price increase.

On August 19, 2008 Shire announced a voluntary recall of two lots of DAYTRANA patches because these patches did not meet their release liner removal specifications which may have resulted in some patients and caregivers having difficulties removing the liners. The voluntary recall was not due to safety issues. Shire and Noven Pharmaceuticals Inc. (the manufacturer of DAYTRANA) continue to pursue enhancements to the product and to work closely with the FDA to implement changes that may improve the usability of DAYTRANA. No interruption in the production of DAYTRANA is anticipated. Shire and Noven may take additional corrective actions.

The addition of VYVANSE combined with ADDERALL XR and DAYTRANA’s market share helped Shire grow its total average share of the US ADHD market to 32.3% for the nine months to September 30, 2008 (2007: 28.9%). Shire has the leading portfolio of products in the US ADHD market.

PENTASA

Sales of PENTASA for the nine months to September 30, 2008 were $138.2 million, an increase of 8% compared to the same period in 2007 (2007: $127.7 million).  Sales grew despite a decrease in prescriptions due to the impact of price increases.

US prescriptions for the nine months to September 30, 2008 were down 1% compared to the same period in 2007 primarily due to a 2% decrease in PENTASA’s US average market share from 17.4% in 2007 to 16.8% in 2008, offset by a 2% increase in the US oral mesalamine prescription market.

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LIALDA/MEZAVANT

For the nine months to September 30, 2008 LIALDA had reached an average market share in the US of 10.9% (2007: 2.7%). LIALDA’s product sales in the US for the nine months to September 30, 2008 were $96.2 million (2007: $21.3 million).

Sales of MEZAVANT outside the US for the nine months ended September 30, 2008 were $3.4 million (2007: $nil). 2007. Following launch in the Netherlands in October, 2008, LIALDA/MEZAVANT is now available in six countries with further launches planned in certain other EU countries during 2008 and 2009, subject to the successful conclusion of pricing and reimbursement negotiations.

Since the launch of LIALDA in March 2007, PENTASA and LIALDA’s combined average market share of the US oral mesalamine market grew to 27.7% for the nine months to September 30, 2008 up from 20.1% for the corresponding period to September 30, 2007.

FOSRENOL

FOSRENOL is now available in 29 countries and global sales totaled $121.6 million for the nine months to September 30, 2008 (2007: $76.0 million). US sales of FOSRENOL for the nine months to September 30, 2008 were up 42% to $68.1 million compared to the same period in 2007 (2007: $48.0 million). Sales of FOSRENOL outside the US for the nine months ended September 30, 2008 were $53.5 million (2007: $28.0 million).

FOSRENOL’s average prescription share of the US phosphate binder retail market for the nine months to September 30, 2008decreased to 8.2% (2007: 8.6%). Sales increased despite the market share decline due to price increases.  As a consequence of focusing on specialist physicians, clinics and dialysis centers, FOSRENOL’s  share of the non-retail market has increased to 16% in August 2008 compared to 12.0% in August 2007.

XAGRID

Sales for the nine months to September 30, 2008 were $58.7 million, an increase of 21% compared to the same period in 2007 (2007: $48.4 million). Expressed in transaction currencies (XAGRID is primarily sold in Euros and Pounds Sterling), sales increased by 13% due to growth in many of Shire’s existing markets, with exchange rate movements against the US dollar accounting for the remaining 8% increase.

Human Genetic Therapies

ELAPRASE

Sales for the nine months to September 30, 2008 were $230.5 million, an increase of 85% compared to the same period in 2007 (2007: $124.4 million).  The sales growth was primarily driven by increased unit sales in major markets in the EU, North America, Latin America, and Asia Pacific. The product is now approved for marketing and commercial distribution in 42 countries. Exchange rate movements against the US dollar contributed 10% to the growth compared to the prior year.In order to support the very rapid growth of ELAPRASE globally, additional manufacturing capacity is currently being added in Lexington, MA, which is expected to come on line in late 2009. Supply is sufficient to support all existing patients and allow for forecasted growth in 2009. Inventory will be managed in order to meet forecast demand.

REPLAGAL

Sales for the nine months to September 30, 2008 were $131.8 million, an increase of 25% compared to the same period in 2007 (2007: $105.1 million). The sales growth was primarily driven by increased unit sales in markets in the EU and Latin America. The product is now approved for marketing and commercial distribution in 42 countries. Exchange rate movements against the US dollar contributed 6% to the growth compared to prior year.

FIRAZYR

In September 2008, FIRAZYR was launched in Germany and the UK, recognizing sales of $0.2m (2007: nil). Launches will continue across Europe as reimbursement negotiations proceed.

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Foreign exchange effect

As many of the Company’s sales revenues are earned in currencies other than US dollars (primarily Euros and Pounds sterling), revenue growth reported in US dollars includes the impact of translating the sales made in a local currency, into US dollars.  The table below shows the effect of foreign exchange translations on the revenue growth of the key affected products as well as the underlying performance of key products in their local currency:

	9 months to September 30, 2008 sales $M		9 months to September 30, 2008 sales growth in local currency %		9 months to September 30, 2008 sales growth in US dollars %		Impact of translation to US dollars %
XAGRID sales in Euros		38.0		+10		+25		+15
REPLAGAL sales in Euros		78.9		+17		+29		+12
ELAPRASE sales in Euros		111.7		+51		+70		+19
XAGRID sales in Pounds Sterling		20.7		+17		+15		-2
CALCICHEW sales in Pounds Sterling		37.1		+7		+5		-2
REMINYL and REMINYL XL sales in Pounds Sterling		24.9		+21		+18		-3
REPLAGAL sales in Pounds Sterling		19.4		+22		+20		-2
ELAPRASE sales in Pounds Sterling		21.8		+65		+61		-4

Royalties

Royalty revenue increased by 3% to $190.7 million for the nine months to September 30, 2008 (2007: $185.4 million).  The following table provides an analysis of Shire’s royalty income:

	9 months to September 30, 2008 $M		9 months to September 30, 2007 $M		Change %
3TC		108.8		111.2		-2
ZEFFIX		29.8		29.6		1
Others		52.1		44.6		17
Total		190.7		185.4		3

3TC

Shire receives royalties from GSK on worldwide 3TC sales.  Royalties from sales of 3TC for the nine months to September 30, 2008 were $108.8 million (2007: $111.2 million). Excluding unfavorable foreign exchange movements of 1%, there has been a decline of 1% compared to the same period in 2007. While the nucleoside analogue market for HIV has continued to grow, competitive pressures from new products and entrants to the market have increased and are expected to lead to an overall decline in 3TC sales.

ZEFFIX

Shire receives royalties from GSK on worldwide ZEFFIX sales.  Royalties from sales of ZEFFIX for the nine months to September 30, 2008 were $29.8 million, an increase of 1% compared to the same period in 2007 (2007: $29.6 million). Excluding unfavorable foreign exchange movements of 2%, there has been growth of 3% compared to the same period in 2007.

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Other

Other royalties are primarily in respect of REMINYL and REMINYL XL (known as RAZADYNE and RAZADYNE ER in the US), a product marketed worldwide (excluding the UK and the Republic of Ireland) by Janssen Pharmaceutical N.V. (“Janssen”), an affiliate of Johnson & Johnson.  Shire has the exclusive marketing rights in the UK and the Republic of Ireland.

In the US, patent infringement litigation brought by Synaptech and Janssen against several ANDA filers culminated in a trial in Delaware in 2007. Following a decision on August 28, 2008 which rendered the relevant patent invalid, generic versions of RAZADYNE were permitted to enter the US market.

Sales of the REMINYL/RAZADYNE range, for the symptomatic treatment of mild to moderately severe dementia of the Alzheimer’s type, continue to grow in most countries however the entry of generics into the US market has severely decreased sales in that region.  This decline was expected however and is included in our forecasts.

For further information about the litigation proceedings relating to RAZADYNE, RAZADYNE ER, REMINYL, REMINYL XL see ITEM 1 of Part II of this Form 10-Q: Legal Proceedings.

Cost of product sales

The cost of product sales increased by 41% to $317.4 million for the nine months to September 30, 2008 (15% of product sales), up from $224.7 million in the corresponding period in 2007 (2007: 15% of product sales). For the nine months to September 30, 2008 cost of product sales included charges of $53.4 million (3% of product sales) (2007: $nil) relating to the write down of inventory and other exit costs in respect of DYNEPO which the Company has decided to stop commercializing, depreciation of $8.8 million (2007: $9.0 million) and amortization of $1.3 million (2007: $0.5 million).

Research and development (R&D)

R&D expenditure increased to $394.4 million for the nine months to September 30, 2008 (19% of product sales), up from $365.7 million in the corresponding period in 2007 (2007: 24% of product sales). For the nine months to September 30, 2008 R&D included $6.5 million (2007: $nil) relating to the cost of exiting post-approval marketing commitments for DYNEPO, which the Company has decided to stop commercializing. For the nine months to 30 September, 2007 R&D included $80.9 million in respect of up-front and milestone payments made to Renovo for Juvista ($75.0 million) and to Noven in respect of ATS ($5.9 million).

Contributing to the increased R&D expenditure in 2008 over 2007 are projects in-licensed and acquired since the second half of 2007 including SPD 550, PLICERA, AMIGAL, FIRAZYR and METAZYM together with Phase 3(b) and Phase 4 studies to support new product launches. R&D also includes depreciation of $9.4 million (2007: $8.4 million).

Selling, general and administrative (SG&A) expenses

Total SG&A costs increased by 28% to $1,083.7 million in the nine months to September 30, 2008 compared to $847.5 million in the nine months to September 30, 2007.  As a percentage of product sales, SG&A expenses were 53% (2007: 56%).

SG&A for the nine months to September 30, 2008 includes intangible asset impairment charges of $90.4 million (4% of product sales) (2007: $nil) in respect of DYNEPO, increased amortization of intangible assets of $91.5 million (2007: $64.0 million) (increased due to VYVANSE, launched July 2007), and costs associated with the introduction of a new holding company of $14.2 million (2007: $nil). SG&A for the nine months to September 30, 2007 included charges of $27.0 million in respect of legal settlement provisions for the TKT Class Action Shareholders Suit. Other increases in SG&A expenses mainly relate to the increase in advertising, promotional and marketing spend to support VYVANSE, LIALDA/MEZAVANT and ELAPRASE. SG&A includes depreciation charges of $34.0 million (2007: $29.9 million).

In Process R&D charge

For the nine months to September 30, the Company recorded an in-process R&D charge of $255.5 million in respect of FIRAZYR in markets outside of the EU ($120.5 million) and the acquisition of the global rights to the clinical candidate arylsultatase – A currently known as METAZYM (HGT–1111), being investigated for the treatment of MLD acquired from Zymenex ($135.0 million).

The IPR&D charge in respect of FIRAZYR of $120.5 million relates to the US ($60.3 million) and ROW ($60.2 million). In the US FIRAZYR received a not approvable letter from the FDA in April 2008, and in ROW it has not been approved by the regulatory authorities. At the time of the acquisition of FIRAZYR, Shire’s management estimated that future R&D costs until regulatory approval would be approximately $20.0 million. This estimate can be affected by various factors, both internal and external, and is part based upon management estimates and assumptions. For this reason, amongst others, the actual cash flows may vary from future estimated cashflows.

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METAZYM has completed a Phase 1b clinical trial in 12 MLD patients in Europe and an extension to this study is ongoing. The product has been granted orphan drug designation in the US and in the EU. This product will now be referred to as HGT-1111. At the time of the acquisition of METAZYM, Shire’s management estimated that future R&D costs until regulatory approval for METAZYM for the treatment of MLD in the US and the EU will be approximately $80 to $90 million. This estimate can be affected by various factors both internal and external and is, in part, based on management’s estimate and assumptions. For this reason, among others, the actual cash flows may vary from forecast future cash flows.

During the nine months to September 30, 2007 Shire expensed the portion of the New River purchase price allocated to in-process R&D totaling $1,896.0 million. This amount represented the value of those acquired development projects which, at the acquisition date, had not been approved by the FDA or other regulatory authorities, including the adult indication of VYVANSE. On April 23, 2008 Shire announced that the FDA had approved the adult indication for VYVANSE, and Shire launched VYVANSE for adult ADHD in the US in June 2008. In March 2008 the Canadian new drug submission was accepted for filing for the treatment of ADHD in children, and Shire expects to submit the regulatory filing for VYVANSE in Europe for the treatment of ADHD in children aged 6 to 17 in 2010. At September 30, 2008 management estimated that future R&D costs until regulatory approval for VYVANSE for ADHD in RoW are approximately $50 to $70 million. These estimates can be affected by various factors and are, in part, based on management’s estimate and assumptions.  For these reasons, among others, the actual cash flows may vary from forecast future cash flows.

Gain on sale of product rights

For the nine months to September 30, 2008 Shire recognized gains of $20.7 million (2007: $12.1 million) on the sale of non-core product rights. In the nine months to September 30, 2008 Shire realized a gain of $5.0 million from the sale of certain hormone replacement therapy products to Meda AB and also realized $15.7 million of gains deferred at December 31, 2007 resulting from the sale of other non-core products during 2007. These gains were deferred at December 31, 2007 pending the transfer of the relevant consents.

Integration costs

During the nine months to September 30, 2008 the Company recorded integration costs of $7.5 million in respect of Jerini, primarily being acquisition related costs incurred by Jerini.

During the nine months to September 30, 2007 the Company incurred integration costs of $1.3 million in respect of the acquisition of New River.

Interest income

For the nine months to September 30, 2008 Shire received interest income of $23.0 million (2007: $42.7 million).  Interest income primarily relates to interest received on cash and cash equivalents.  Interest income for the nine months to September 30, 2008 is lower than the same period in 2007 due to lower average cash balances and lower average US Dollar interest rates.

Interest expense

For the nine months to September 30, 2008 the Company incurred interest expense of $127.0 million (2007: $53.8 million).

Interest expense for the nine months to September 30, 2008 includes $87.3 million (2007: $20.7 million) in respect to the TKT appraisal rights litigation. This pending litigation was settled in November 2008. Prior to reading this settlement, the Company accrued interest based on a reasonable estimate of the amount that may be awarded by the Court to those former TKT shareholders who requested appraisal. After reading the settlement, the Company accrued additional interest expense of $73.0 million consistent with the terms of the settlement agreement. For further details on the settlement of this litigation, see ITEM 1, Note 20 of this Form 10-Q.

In 2007 interest expense also included a $7.9 million write-off of deferred financing costs on repayment of term loans used to fund the acquisition of New River following the issue of the $1.1 billion convertible bonds in May 2007.

Other (expenses)/income, net

Other (expenses)/ income for the nine months to September 30, 2008 includes impairment charges in respect of  available for sale securities totaling $54.1 million (2007: $nil), including $43.7 million relating to the Company’s investment in Renovo. These amounts reflect unrealized holding losses that have been reclassified out of other comprehensive income into earnings in the period, as management have concluded that the impairment is other than temporary.

The decline in the market value of the Company’s investment in Renovo initially arose from the results of clinical trials for JUVISTA announced by Renovo over 2007 and 2008. In considering whether the decline in value is temporary or “other than temporary”  under US GAAP the Company had to consider the following factors: the severity of the decline from historical cost (87%) and its duration (eleven months); market analysts’ targets of Renovo’s share price for the next 18-24 months; and the revised expected filing date for JUVISTA due to the adoption of a sequential rather than parallel Phase 3 development plan.

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These factors, together with the significant decline in global equity markets during the third quarter of 2008 mean that the Company is unable to reasonably estimate the period over which a full recovery in the value of its investment in Renovo could occur. As such, the Company had to conclude that for US GAAP purposes the decline in value is “other than temporary”.

In such circumstances US GAAP requires the full difference between the book value of the investment and fair (market) value be recognized as an other than temporary impairment. Accordingly the Company has recognized an impairment charge of $43.7 million through the Statement of Operations in the nine months to September 30, 2008. If in the future JUVISTA’s Phase 3 trials report positively and Renovo’s other products progress through development, Renovo’s share price could react favorably and the Company may recover some or all of this impairment loss. Any further  potential increases in the value of Renovo will be recognized through other comprehensive income.

Other income also includes a gain of $9.4 million arising from the sale of Shire’s minority equity investment in Questcor Pharmaceutical Inc., a specialty pharmaceutical company focused on providing prescription drugs for central nervous system (CNS) disorders. Shire received cash consideration of $10.3 million.

Taxation

The Company accounts for income taxes during interim periods in accordance with SFAS No. 109, “Accounting for Income Taxes,” Accounting Principles Board, (“APB”) No. 28, “Interim Financial Reporting,” and FIN 18, “Accounting for Income Taxes in Interim Periods an interpretation of APB Opinion No. 28. For interim reporting purposes, these rules require that a company determine the best estimate of its annual effective tax rate and then apply that rate in providing for income taxes on a year-to-date basis.   Accordingly, the Company has calculated an expected annual effective tax rate, excluding significant, unusual or extraordinary items, for ordinary income associated with operations for which the Company currently expects to have annual taxable income.

The annual effective tax rate applied to the results for the nine months to September 30, 2008 was adversely influenced by items (such as the United States research and development tax credit which at September 30, 2008 has yet to be reinstated) that cannot at this time be included in the Company’s estimate of the expected annual effective tax rate. The impact of such items may subsequently be recognized within the expected annual effective tax rate when, in the case of the US research and development tax credit, tax law changes are enacted.

The effective tax rate for the nine months to September 30, 2008 was 82.9% (2007: -2.7%). Excluding the IPR&D charges that arose of $255.5 million in relation to FIRAZYR in non-EU markets acquired with Jerini and METAZYM acquired from Zymanex in 2008 and $1,896.0 million in relation to VYVANSE in non-pediatric indicators in the US and the Rest of the World acquired with New River in 2007, the effective tax rate is 19.0% (2007:16%). The increase in the effective tax rate excluding R & D charges is due to higher profits and lower levels of tax deductible expenditure in higher tax territories in 2008 compared to 2009.

Equity in earnings of equity method investees

Earnings of equity method investees of $1.3 million were recorded for the nine months to September 30, 2008 (2007: $1.7 million). This comprised earnings of $4.4 million from the 50% share of the anti-viral commercialization partnership with GSK in Canada (2007: $4.8 million) offset by losses of $3.1 million being the Company’s share of losses in the GeneChem, AgeChem and EGS Funds (2007: losses $3.1 million).

Liquidity and Capital Resources

General

The Company’s funding requirements depend on a number of factors, including its development programs; corporate, business and product acquisitions; the level of resources required for the expansion of marketing capabilities as the product base expands; increases in accounts receivable and inventory which may arise as sales levels increase; competitive and technological developments; the timing and cost of obtaining required regulatory approvals for new products; the timing and quantum of milestone payments on collaborative projects; the timing and quantum of tax and dividend payments; the timing and quantum of purchases of Shire shares in the market to satisfy option exercises and the continuing cash generated from sales of Shire’s key products.

An important part of Shire’s business strategy is to protect its products and technologies through the use of patents, proprietary technologies and trademarks, to the extent available.  The Company intends to defend its intellectual property and as a result may need cash to fund the cost of litigation.

The Company ordinarily finances its activities through cash generated from operating activities, credit facilities, private and public offerings of equity and debt securities and the proceeds of asset or investment disposals.

On November 7, 2008 the Company made a payment of $567.5 million to dissenting shareholders in settlement of the TKT appraisal rights litigation, (see ITEM 1, Note 20 of this Form 10-Q for further details). This payment was funded from the Company’s existing cash resources and by drawing $190 million on its existing credit facility (see below).

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Financing

Shire’s current financing arrangements comprise of $1,100 million in principal amount of 2.75% convertible bonds due 2014, a $1,200 million revolving credit facility and a €40 million term facility.

To facilitate the provision of the financing confirmation required in connection with the tender offer for Jerini AG, Shire Limited (now known as Shire plc) entered into a €100 million three month committed term facility on 7 August 2008. Shire plc has entered into a separate agreement with Shire Deutschland Investments GmbH (formerly known as Maia Elfte Vermogenverwaltungs GmbH (“Bidco”)) under which Bidco has the right to submit utilisation requests in respect of this facility on behalf of Shire plc. Amounts borrowed under the facility may only be used to satisfy claims resulting from shareholders in Jerini accepting the tender offer. On September 30, 2008 the facility was reduced to €40 million.

The margin payable over LIBOR on drawings under the facility is 95 basis points per annum. The commitment fee on undrawn amounts is 35 basis points per annum. The availability of loans under the facility is subject to customary conditions, including the absence of any major events of default and the accuracy of the major representations contained therein. The facility does not contain financial covenants, but includes a cross default clause.

Shire anticipates that its operating cash flow together with available cash, cash equivalents and short-term investments and the above mentioned revolving credit facility will be sufficient to meet its anticipated future operating expenses, capital expenditures and debt service and lease obligations as they become due over the next twelve months.

If the Company decides to acquire other businesses, it expects to fund these acquisitions from existing cash resources, the revolving credit facility discussed above and possibly through new borrowings and the issue of new equity if necessary.

Facility agreement

In connection with the Scheme of Arrangement, with effect from May 23, 2008, Shire plc, (the former holding company of the Shire Group, “Old Shire”) entered into an accession and amendment deed dated April 15, 2008 between Shire plc (formerly Shire Limited), Old Shire, certain subsidiaries of Shire plc and Barclays Bank PLC as Facility Agent (the “Accession and Amendment Deed”) relating to the Company’s $1,200 million facility agreement dated February 20, 2007 (as amended by a syndication and amendment agreement dated July 19, 2007) between, among others, ABN AMRO Bank N.V., Barclays Capital, Citigroup Global Markets Limited, The Royal Bank of Scotland plc, Lloyds TSB Bank plc, Bank of America, N.A. and Morgan Stanley Bank (the “Facility Agreement”). The following is a description of the material amendments to the Facility Agreement, affected pursuant to the Accession and Amendment Deed, which took effect on May 23, 2008, immediately prior to the Scheme of Arrangement becoming effective.

Shire plc acceded to the Facility Agreement as a borrower and guarantor, and Shire Holdings UK Limited, a wholly-owned subsidiary of Old Shire , acceded to the Facility Agreement as a borrower. Old Shire ceased to be a party to the Facility Agreement as a guarantor (although it remains a party to the Facility Agreement as a borrower). The Facility Agreement was amended and restated in order to take account of the fact that Shire plc is incorporated in Jersey and tax resident in the Republic of Ireland, exclude the Scheme of Arrangement between Shire plc and its shareholders from the mandatory prepayment provisions contained in the Facility Agreement, and amend the financial covenants contained in the Facility Agreement in order to ensure that if the level of interest awarded in the TKT appraisal rights litigation differs from that provided for in Shire’s accounts, any excess or shortfall would be treated as if it had been provided for on a pro rata basis in accounting periods up to the time of judgement, to avoid a technical breach of the Facility Agreement in the accounting period in which the judgement occurs.

On November 7, 2008 Shire drew down $190.0 million from the facility to part fund the TKT appraisal rights litigation settlement.

2.75% Convertible Bonds due 2014

In connection with the Scheme of Arrangement Shire entered into:

(i)      a supplemental trust deed dated April 15, 2008 between Shire plc, Old Shire and BNY Corporate Trustee Services Limited as Trustee (the “Supplemental Trust Deed”) relating to a trust deed dated May 9, 2007 (the “Trust Deed”) constituting the US $1,100,000,000 2.75% Convertible Bonds due 2014 (the “Convertible Bonds”) originally issued by Shire; and

(ii)      an accession and amendment agreement dated April 15, 2008 between Shire plc, Old Shire  BNY Corporate Trustee Services Limited as Trustee and The Bank of New York as Paying and Conversion Agent (the “Accession and Amendment Agreement”) relating to a paying and conversion agency agreement dated May 9, 2007 (the “Agency Agreement”) between Old Shire, BNY Corporate Trustee Services Limited as Trustee and The Bank of New York as Paying and Conversion Agent.

The following is a description of the material amendments to the Trust Deed, effected pursuant to the Supplemental Trust Deed, and to the Agency Agreement, effected pursuant to the Accession and Amendment Agreement, each of which took effect on May 23, 2008, immediately prior to the Scheme of Arrangement becoming effective.

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Shire plc was substituted in place of Old Shire as principal obligor under, and issuer of, the Convertible Bonds, and Shire plc acceded to, and assumed all Old Shire obligations under, the Trust Deed and the Agency Agreement. Old Shire ceased to be a party to the Trust Deed and the Agency Agreement. The Trust Deed, the Agency Agreement and the terms and conditions of the Convertible Bonds were amended and restated in order to, among other things, provide that the Convertible Bonds will, following the substitution, be convertible into ordinary shares of Shire plc.

Sources and uses of cash

The following table provides an analysis of the Company’s gross and net debt/cash funds (excluding restricted cash), as at September 30, 2008 and September 30, 2007:

	September 30, 2008 $’M			September 30, 2007 $’M
Cash and cash equivalents		473.3			562.9
Convertible debt		(1,100.0	)		(1,100.0	)
Building financing obligation		(34.3	)		(32.7	)
Total debt		(1,134.3	)		(1,132.7	)
Net debt		(661.0	)		(569.8	)

Cash flow activity

Net cash provided by operating activities for the nine months to September 30, 2008 was $525.5 million compared to $408.1 million for the nine months to September 30, 2007. Cash provided by operating activities was higher in 2008 than 2007 due to strong cash flows from operations which were only partially offset by the payments in respect of the acquisition of METAZYM from Zymenex, tax payments and settlement of the 2003 TKT class action law suit.

Net cash used in investing activities was $630.1 million in the nine months to September 30, 2008. This included the cash cost of purchasing a majority voting interest in Jerini ($462.5 million, net of cash acquired), expenditure on purchases of property, plant and equipment of $166.5 million, the final sales milestone payment of $25.0 million for DAYTRANA to Noven and long-term investments of $1.3 million, which were partially offset by receipts of $10.3 million from the sale of long term assets and $5.0 million received from the sale of product rights. Capital expenditure on property, plant and equipment included $96.5 million on construction work at Shire’s office and manufacturing facilities in Lexington, Massachusetts, and $4.7 million on construction work at the Basingstoke, UK Office.

Net cash used in investing activities was $2,625.7 million in the nine months to September 30, 2007. This included expenditure on the acquisition of New River, net of cash acquired, of $2,458.6 million and acquisition expenses of $60.4m, purchases of property, plant and equipment of $62.1 million, intangible assets of $58.2 million and long-term investments of $56.7 million (which included expenditure of $50 million on an equity investment in Renovo), which were partially offset by deposits/proceeds from the sale of product rights of $24.3 million and $55.8 million received on maturity of New River short term investments. Capital expenditure on property, plant and equipment included $18.7 million on IT at the Wayne, Pennsylvania, US headquarters and $9.5 million on IT at the Basingstoke, UK Office; $6.6 million on construction work at Shire’s manufacturing facility at Owings Mills, Maryland; and $4.7 million on leasehold improvements, $5.9 million on laboratory equipment and $7.1 million on IT equipment at Shire’s site in Cambridge, Massachusetts.  Capital expenditure on intangible assets included a $50 million sales milestone paid to Noven for DAYTRANA.

Net cash used in financing activities was $179.1 million for the nine months to September 30, 2008 of which $140.2 million related to payments to acquire shares by the ESOT and $36.4 million to the dividend payment.

Net cash provided by financing activities was $1,647.6 million for the nine months to September 30, 2007. On April 18, 2007 the Company fully utilized Term Loan A of $1,000 million and Term Loan B of $300 million under the Facility Agreement to partially fund the acquisition of New River, which were subsequently repaid in the period. Shire incurred $14.5 million of arrangement costs in the nine months to September 30, 2007. In May 2007 Shire issued $1.1 billion principal amount of convertible bonds due 2014. The net proceeds of the issue of the Bonds were $1.1 billion with associated issue costs of $18.3 million. On February 20, 2007 the Company raised $877.3 million, net of associated costs, through the private placement of 42.9 million new ordinary shares to certain institutional investors at a price of 1075 pence per share.  In addition, the Company received $13.0 million from the exercise of warrants and $25.6 million from the exercise of stock options, made payments to acquire treasury stock of $168.5 million and paid a dividend of $29.4 million. Shire also paid $279.4 million to holders of New River’s 3.5% Convertible Subordinated Notes due 2013 and received $141.8 million from Merrill Lynch in settlement of a purchased call option entered into by New River prior to the acquisition in April 2007.

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Obligations and commitments

Other than the settlement of the TKT appraisal rights litigation (see ITEM 1, Note 20 of this Form 10-Q for further details), during the nine months to September 30, 2008 there have been no material changes outside the ordinary course of the Company’s business to the contractual obligations previously disclosed in the Company’s Annual report on Form 10-K for the year ended December 31, 2007. See ITEM 1, Note 14 for further details.

During November 2008 the Company announced that it had settled all pending litigation brought by certain former dissenting shareholders of TKT. The Company will pay the former dissenting shareholders the same price of $37 per share originally offered to all TKT shareholders at the time of the July 2005 merger, plus interest. The total cost of the settlement is $567.5 million, (see ITEM 1, Note 20 for further details). On November 7, 2008 the Company made a payment of $567.5 million to the dissenting shareholders; this payment was funded from the Company’s existing cash resources and by drawing $190 million on its existing credit facility.

Critical Accounting Estimates

The preparation of interim financial statements, in conformity with US GAAP and SEC regulations for interim reporting, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.  Estimates and assumptions are primarily made in relation to provisions for litigation, valuation of intangible assets (including those acquired through business combinations), the valuation of equity investments, sales deductions, income taxes and share-based payments.

Critical accounting estimates are discussed in Shire’s Annual Report on Form 10-K for the year to December 31, 2007. Material updates to those estimates discussed in Shire’s Annual Report on Form 10-K are discussed below.

Valuation of intangible assets

(a)      General

The Company has acquired and continues to acquire significant intangible assets, recorded at acquisition cost. As at September 30, 2008 the carrying value of such intangibles was $1,843 million, which primarily related to the Company’s DAYTRANA ($136 million), FIRAZYR ($270 million), FOSRENOL ($18 million), PENTASA ($74 million), REMINYL ($19 million), REPLAGAL ($305 million), VYVANSE ($1,001 million) and XAGRID ($11 million) products.  Those assets which do not yet have a defined revenue stream and for which there are no alternative uses are expensed upon acquisition, and those that do have a defined revenue stream (namely commercial products or rights to products awaiting final regulatory approval) are capitalized and amortized over their estimated useful life. Management’s estimate of the useful life considers, inter alia, the following factors: the expected use of the asset by the Company; any legal, regulatory, or contractual provisions that may limit the useful life and the effects of demand; competition; and other economic factors (such as the stability of the industry, known technological advances, legislative action that results in an uncertain or changing regulatory environment, and expected changes in distribution channels).

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ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Item 7A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2007 contains a detailed discussion of the Company’s market risk exposure. The global financial crisis has increased the Company’s credit risk exposure. The Company continues to operate its financial management in accordance with the policies set out in the Item 7A of the Company’s Form 10-K for the year ended December 31, 2007 but has increased the frequency with which it reviews counterparty credit risk. There has been no significant deterioration in the value of assets held by the Company as a result of credit risk and the Company has not suffered any material losses as a result of the global financial crisis. There have been no material changes in the Company’s exposure to market risk since December 31, 2007.

ITEM 4.  CONTROLS AND PROCEDURES

As at September 30, 2008, the Company, under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, had performed an evaluation of the effectiveness of the Company’s disclosure controls and procedures.  The Company’s management necessarily applied its judgment in assessing the costs and benefits of such controls and procedures, which by their nature can provide only reasonable assurance regarding management’s control objectives. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective at the reasonable level of assurance for gathering, analyzing and disclosing the information the Company is required to disclose in the reports it files under the Securities Exchange Act of 1934, within the time periods specified in the SEC’s rules and forms.

There has been no change in the Company’s internal control over financial reporting that occurred during the period covered by this quarterly report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II.  OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The information required by this Item is incorporated herein by reference to Note 14(xi), “Commitments and Contingencies, Legal proceedings” in our notes to the condensed consolidated financial statements listed under Item 1 of Part I of this Quarterly Report on Form 10-Q.

ITEM 1A.  RISK FACTORS

There have been no material changes from the risk factors set forth in the Company’s Form 10-K for the year ended December 31, 2007.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On May 23, 2008 Shire plc (formerly Shire Limited) became the holding company of Shire plc (the former holding company of the Shire Group) (“Old Shire”) pursuant to a scheme of arrangement under Sections 895 to 899 of the United Kingdom Companies Act 2006 that was approved by the High Court of Justice in England and Wales and the shareholders of Old Shire. Pursuant to the Scheme of Arrangement, ordinary shares, each having a nominal value of £0.05, of Old Shire were exchanged for ordinary shares, each having a nominal value of £0.05, of Shire plc, on a one-for-one basis. The Scheme of Arrangement did not involve any payment for the Shire plc Ordinary Shares.

The Shire Ordinary Shares underlying the Shire American Depositary Shares, each representing three Shire Ordinary Shares, participated in the Scheme of Arrangement like all other Shire Ordinary Shares. The Scheme of Arrangement did not involve any payment for the Shire plc ADSs.

Shire plc effected the Scheme of Arrangement after a hearing upon the fairness of the terms of the Scheme of Arrangement to holders of old Shire ordinary shares within the meaning of Section 3(a)(10) under the US Securities Act of 1933, as amended, and the New Shire Ordinary Shares were not registered thereunder in reliance on the exemption from registration provided by Section 3(a)(10).

For further information, see Form 8-K filed May 23, 2008.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

An Annual General Meeting of Shareholders was held on September 24, 2008.The resolutions were approved on a show of hands at the meeting. Had the resolutions been put to a poll, the proxy votes which would have been voted at the meeting are described below:

Resolution	For*	Against	Votes withheld**
1.  To elect Mr Matthew Emmens as a Director of the Company	301,376,910	4,696,170	25,441,808
2.  To elect Mr Angus Russell as a Director of the Company	331,225,599	138,229	151,060
3.  To elect Mr Graham Hetherington as a Director of the Company	331,234,635	127,173	153,080
4. To elect Dr Barry Price as a Director of the Company	328,858,454	2,501,778	154,656
5. To elect Mr David Kappler as a Director of the Company	330,945,634	412,470	156,784
6. To elect Dr Jeffrey Leiden as a Director of the Company	331,221,109	138,828	154,951

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Resolution	For*	Against	Votes withheld**
7. To elect Mr Patrick Langlois as a Director of the Company	330,949,493	412,089	153,306
8. To elect Ms Kate Nealon as a Director of the Company	331,014,606	346,949	153,333
9. To elect Mr David Mott as a Director of the Company	327,884,774	2,101,928	1,528,186
10. To elect Dr Michael Rosenblatt as a Director of the Company	331,232,603	126,815	155,470
11. To re-appoint Deloitte & Touche LLP as Auditors of the Company	327,634,578	1,301,388	2,578,922
12. To authorise the Audit, Compliance and Risk Committee to determine the remuneration of the auditors	331,225,599	1,470,679	159,584
13. To authorise the allotment of shares	328,104,104	3,189,130	221,654
14. To authorise the disapplication of pre-emption rights	329,760,418	1,575,955	178,515
15. To authorise market purchases	330,598,450	729,745	186,693
16. To change the name of the Company to Shire plc	331,323,817	31,609	159,462

* These figures included discretionary votes

** Votes withheld enable the voter to abstain on any particular resolution

ITEM 5. OTHER INFORMATION

None.

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ITEM 6.EXHIBITS

Exhibits

2.01	Agreement and Plan of Merger by and among Shire Pharmaceuticals Group plc, Transkaryotic Therapies, Inc. and Sparta Acquisition Corporation, dated as of April 21, 2005.(1)
2.02	Agreement of Merger dated as of February 20, 2007 among Shire plc, Shuttle Corporation and New River Pharmaceuticals, Inc.(2)
2.03	Business Combination Agreement dated as of July 3, 2008 between Maia Elfte Vermögensverwaltungs GmbH and Jerini AG. (3)
3.01	Form of Amended Memorandum and Articles of Association of Shire plc as adopted by special resolution passed on April 10, 2008 and amended by special resolution on September 24, 2008.(4)
4.01	Form of Assignment and Novation Agreement between Shire Limited, Shire plc, JPMorgan Chase Bank, N.A. dated April 16, 2008 relating to the Deposit Agreement among Shire plc, JPMorgan Chase Bank, N.A. as depositary and all holders from time to time of ADRs issued thereunder dated November 21, 2005.(5)
4.02	Form of Deposit Agreement among Shire plc, JPMorgan Chase Bank, N.A. as depositary and all holders from time to time of ADRs issued thereunder dated November 21, 2005. (6)
4.03	Form of Ordinary Share Certificate of Shire Limited. (7)
4.04	Form of American Depositary Receipt Certificate of Shire Limited. (8)
10.01	Tender and Support Agreement dated as of February 20, 2007 among Shire plc, Mr. Randal J. Kirk and the other parties named therein. (9)
10.02	Multicurrency Term and Revolving Facilities Agreement as of February 20, 2007 by and among Shire plc, ABN AMRO Bank N.V., Barclays Capital, Citigroup Global Markets Limited, The Royal Bank of Scotland plc, and Barclays Bank plc. (10)
10.03	Accession and Amendment Deed dated April 15, 2008 between Shire Limited, Shire plc, certain subsidiaries of Shire plc and Barclays Bank PLC as Facility Agent relating to a US $1,200,000,000 facility agreement dated February 20, 2007 (as amended by a syndication and amendment agreement dated July 19, 2007). (11)
10.04	Subscription Agreement dated May 2, 2007 relating to the 2.75% Convertible Bonds due 2014 between Shire plc and ABN AMRO Bank N.V. and NM Rothschild & Sons Limited (trading together as ABN AMRO Rothschild, an unincorporated equity capital markets joint venture) and Barclays Bank PLC and Citigroup Global Markets Limited and Goldman Sachs International and Morgan Stanley & Co. International plc and others. (12)
10.05	Amending Subscription Agreement dated May 8, 2007 relating to the 2.75% Convertible Bonds due 2014 between Shire plc and ABN AMRO Bank N.V. and NM Rothschild & Sons Limited (trading together as ABN AMRO Rothschild, an unincorporated equity capital markets joint venture) and Barclays Bank PLC and Citigroup Global Markets Limited and Goldman Sachs International and Morgan Stanley & Co. International plc and others. (13)
10.06	Trust Deed dated May 9, 2007 relating to the 2.75% Convertible Bonds due 2014 between Shire plc and BNY Corporate Trustee Services Limited. (14)
10.07	Supplemental Trust Deed dated April 15, 2008 between Shire Limited, Shire plc and BNY Corporate Trustee Services Limited relating to a trust deed dated May 9, 2007 relating to US $1,100,000,000 2.75% Convertible Bonds due 2014. (15)
10.08	Accession and Amendment Agreement dated April 15, 2008 between Shire Limited, Shire plc, BNY Corporate Trustee Services Limited and The Bank of New York relating to a paying and conversion agency agreement dated May 9, 2007 relating to US $1,100,000,000 2.75% Convertible Bonds due 2014. (16)
10.09*	Revised and Restated Master License Agreement dated November 20, 1995 among Shire BioChem Inc (f/k/a BioChem Pharma Inc.), Glaxo Group Limited, Glaxo Wellcome Inc. (formerly Glaxo Canada Inc.), Glaxo Wellcome Inc. (formerly Glaxo Inc.), Tanaud Holdings (Barbados) Limited, Tanaud International B.V. and Tanaud LLC. (17)
10.10*	Settlement Agreement, dated August 14, 2006 by and between Shire Laboratories Inc. and Barr Laboratories, Inc. (18)

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10.11*	Product Development and License Agreement, dated August 14, 2006 by and between Shire LLC and Duramed Pharmaceuticals, Inc. (19)
10.12*	Product Acquisition and License Agreement, dated August 14, 2006 by and among Shire LLC, Shire plc and Duramed Pharmaceuticals, Inc. (20)
10.13	Service Agreement between Shire plc and Mr Angus Russell, dated March 10, 2004. (21)
10.14	Novation Agreement dated November 21, 2005 relating to the Employment Agreement of Angus Russell dated March 10, 2004. (22)
10.15	Novation Agreement dated April 11, 2008 relating to the Employment Agreement of Angus Russell dated March 10, 2004, as previously novated on November 21, 2005. (23)
10.16	Form of Amended and Restated Employment Agreement between Shire plc and Mr Matthew Emmens, dated March 12, 2004. (24)
10.17	Amendment Agreement dated November 21, 2005 relating to the Amended and Restated Employment Agreement of Matthew Emmens dated March 12, 2004. (25)
10.18	Ratification and Guaranty dated November 21, 2005 relating to the Amended and Restated Employment Agreement of Matthew Emmens dated March 12, 2004. (26)
10.19	Amendment Agreement dated May 20, 2008 relating to the Amended and Restated Employment Agreement of Matthew Emmens dated March 12, 2004, as amended on November 21, 2005. (27)
10.20	Ratification and Guaranty dated May 20, 2008 relating to the Amended and Restated Employment Agreement of Matthew Emmens dated March 12, 2004. (28)
10.21	Form of Indemnity Agreement for Directors of Shire Limited. (29)
10.22	Service Agreement between Shire Limited and Mr Angus Russell, dated July 2, 2008.
10.23	Service Agreement between Shire Limited and Mr Graham Hetherington, dated July 2, 2008.
10.24	Form of Settlement Agreement and Mutual Release in re: Transkaryotic Therapies, Inc., by and between Shire Human Genetic Therapies, Inc., Shire plc and the parties set forth therein.
21	List of Subsidiaries. (30)
31.1	Certification of Angus Russell pursuant to Rule 13a – 14 under The Exchange Act.
31.2	Certification of Graham Hetherington pursuant to Rule 13a – 14 under The Exchange Act.
32.1	Certification of Angus Russell and Graham Hetherington pursuant to Section 906 of the Sarbanes – Oxley Act of 2002.
*	Certain portions of this exhibit have been omitted intentionally, subject to a confidential treatment request. A complete version of this agreement has been filed separately with the Securities and Exchange Commission.
(1)	Incorporated by reference to Exhibit 99.02 to Shire’s Form 8-K filed on April 25, 2005.
(2)	Incorporated by reference to Exhibit 2.1 to Shire’s Form 8-K filed on February 23, 2007.
(3)	Incorporated by reference to Exhibit 2.1 to Shire’s Form 8-K filed on July 10, 2008.
(4)	Incorporated by reference to Exhibit 99.02 to Shire’s Form 8-K filed on October 1, 2008.
(5)	Incorporated by reference to Exhibit 4.01 to Shire’s Form 8-K filed on May 23, 2008.
(6)	Incorporated by reference to Exhibit 4.02 to Shire’s Form 8-K filed on May 23, 2008.
(7)	Incorporated by reference to Exhibit 4.03 to Shire’s Form 8-K filed on May 23, 2008.
(8)	Incorporated by reference to Exhibit 4.04 to Shire’s Form 8-K filed on May 23, 2008.
(9)	Incorporated by reference to Exhibit 99.1 to Shire’s Form 8-K filed on February 23, 2007.
(10)	Incorporated by reference to Exhibit 10.2 to Shire’s Form 10-Q filed on May 1, 2007.
(11)	Incorporated by reference to Exhibit 10.01 to Shire’s Form 8-K filed on May 23, 2008.
(12)	Incorporated by reference to Exhibit 10.1 to Shire’s Form 10-Q filed on August 2, 2007.
(13)	Incorporated by reference to Exhibit 10.2 to Shire’s Form 10-Q filed on August 2, 2007.
(14)	Incorporated by reference to Exhibit 10.3 to Shire’s Form 10-Q filed on August 2, 2007.
(15)	Incorporated by reference to Exhibit 10.02 to Shire’s Form 8-K filed on May 23, 2008.
(16)	Incorporated by reference to Exhibit 10.03 to Shire’s Form 8-K filed on May 23, 2008.
(17)	Incorporated by reference to Exhibit 10.09 to Shire’s Form 10-K/A filed on May 30, 2008.
(18)	Incorporated by reference to Exhibit 10.1 to Shire’s Form 10-Q filed on November 7, 2006.
(19)	Incorporated by reference to Exhibit 10.2 to Shire’s Form 10-Q filed on November 7, 2006.

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(20)	Incorporated by reference to Exhibit 10.3 to Shire’s Form 10-Q filed on November 7, 2006.
(21)	Incorporated by reference to Exhibit 10.11 to Shire’s Form 10-K filed on March 12, 2004.
(22)	Incorporated by reference to Exhibit 10.03 to Shire’s Form 8-K filed on November 25, 2005.
(23)	Incorporated by reference to Exhibit 10.06 to Shire’s Form 8-K filed on May 23, 2008.
(24)	Incorporated by reference to Exhibit 10.13 to Shire’s Form 10-K filed on March 12, 2004.
(25)	Incorporated by reference to Exhibit 10.01 to Shire’s Form 8-K filed on November 25, 2005.
(26)	Incorporated by reference to Exhibit 10.02 to Shire’s Form 8-K filed on November 25, 2005.
(27)	Incorporated by reference to Exhibit 10.04 to Shire’s Form 8-K filed on May 23, 2008.
(28)	Incorporated by reference to Exhibit 10.05 to Shire’s Form 8-K filed on May 23, 2008.
(29)	Incorporated by reference to Exhibit 10.07 to Shire’s Form 8-K filed on May 23, 2008.
(30)	Incorporated by reference to Exhibit 21 to Shire’s Form 10-K/A filed on May 30, 2008.

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SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	SHIRE PLC (Registrant)
Date: November 10, 2008	/s/ Angus Russell By:   Angus Russell         Chief Executive Officer
Date: November 10, 2008	/s/ Graham Hetherington By:   Graham Hetherington         Chief Financial Officer

EX-10.22

Exhibit 10.22

At the Annual General Meeting of shareholders held on September 24, 2008, Shire made this service agreement available for review.

Dated 2 July 2008

(1)    SHIRE LIMITED               

- and -

(2)    MR ANGUS RUSSELL   

SERVICE AGREEMENT

THIS AGREEMENT is made the 2 day of July 2008

BETWEEN:

(1)  SHIRE LIMITED (registered number 99854) a company incorporated in and under the laws of Jersey and having its registered office at 22 Grenville Street, St Helier, Jersey JE4 8PX (the "Company"); and

(2)  MR ANGUS RUSSELL of 22 Grenville Street, St Helier, Jersey JE4 8PX (the "Executive").

WHEREBY it is agreed that the Company shall employ the Executive and the Executive shall serve the Company as Chief Executive Officer on the following terms and subject to the following conditions.

1.  Commencement and Term

1.1  The Executive's continuous employment with the Company commenced on 13 December 1999.

1.2  The employment of the Executive shall (subject to the provisions of Clause 15) be terminable by either the Company or the Executive giving to the other 12 (twelve) months' notice in writing commencing at any time.

1.3.1  The Company may at its absolute discretion elect at any time to terminate the employment of the Executive with immediate effect by paying to the Executive (less deductions as appropriate) salary in lieu of notice and a sum (which shall be calculated by multiplying the Relevant Amount by the number of months' notice which the Executive was entitled to receive at the date of such termination) in compensation for the immediate loss by the Executive of his other benefits hereunder.

1.3.2  In the event that the Company terminates the employment of the Executive pursuant to Clause 1.3.1 at any time, the Relevant Amount shall be the aggregate of:

(a)  an amount, to be decided at the absolute discretion of the Remuneration Committee, which may be up to the target annual bonus under the Executive Annual Incentive Plan (EAIP) to which, had he served his notice, the Executive would have been entitled pursuant to Clause 4 based on 100% achievement of group and personal objectives for the bonus year in which his employment terminates (based on the Executive's salary at the date on which his employment terminates), divided by 12 (twelve); and

(b) (i) 30% of the Executive's basic salary (taken at the date of termination of this Agreement) in lieu of Company contributions to the Executive's pension scheme pursuant to Clause 6 of this Agreement, and

(ii) an amount equal to the actual cost to the Company of providing the benefits due for the period of notice to the Executive pursuant to Clauses 7 and 8 of this Agreement,

in each case divided by 12 (twelve).

1.3.3 On the termination of the Executive's employment under this Clause 1, the Executive's rights to receive shares or exercise rights in relation to (or calculated by reference to) shares under any relevant bonus or incentive scheme will be determined in accordance with the rules of the relevant scheme.

2. Obligations during Employment

The Executive shall during the continuance of his employment:

(a) serve the Company to the best of his ability in the capacity of Chief Executive Officer;

(b)  faithfully and diligently perform such duties and exercise such powers consistent with them as the Board may from time to time properly assign to or confer upon him in such capacity or otherwise in connection with the business of the Company or any Associated Company;

(c)  perform and exercise the said duties and powers on behalf of any Associated Company and act as a director or other officer of any Associated Company;

(d)  do all in his power to protect, promote, develop and extend the business interests and reputation of the Group;

(e)  at all times and in all respects conform to and comply with the lawful and reasonable directions of the Board;

(f)  upon receiving reasonable notice promptly give to the Board (in writing if so requested) all such information, explanations and assistance as it may require in connection with the business and affairs of the Company and any Associated Company for which he is required to perform duties;

(g)  unless prevented by sickness, injury or other incapacity or as otherwise agreed by the Board devote the whole of his time, attention and abilities during his hours of work (which shall be normal business hours and such additional hours as may be necessary for the proper performance of his duties) to the business and affairs of the Company and any Associated Company for which he is required to perform duties (save that the Executive may, with the prior written consent of the Board, become a non-executive director of other companies);

(h)  work at such place of business of the Company or any Associated Company as the Company may reasonably require for the proper performance and exercise of his duties and powers and the Executive may be required to travel on the business of the Company and any Associated Company for which he is required to perform duties; and

(i)  comply with the Company's Code of Ethics Policy.

3.  Further Obligations of the Executive

3.1  During the continuance of his employment the Executive shall devote his whole time and attention to his duties under this Agreement and shall not directly or indirectly carry on or be engaged, concerned or interested in any other business, trade or occupation otherwise than as a holder directly or through nominees (including for the purposes hereof through any trust whether established by the Executive or otherwise and whether discretionary or otherwise of which the Executive is a beneficiary) of not more than 3% in aggregate of any class of shares, debentures or other securities in issue from time to time of any company (or, if different, amounting to no more than 3% in terms of the economic value of all such shares and securities (whether by way of dividend or upon any return in capital) and/or voting or other rights attaching thereto in respect of any matters) which are for the time being quoted or dealt with on any recognised investment exchange (as defined by section 285(1)(a) of the Financial Services and Markets Act 2000) provided that nothing in this Clause 3.1 shall prevent the Executive from continuing to hold his current portfolio of investments in securities.

3.2  During the continuance of his employment the Executive shall in relation to any dealings in securities comply with all laws affecting dealings in the securities of such companies and all regulations of any relevant stock exchanges on which such dealings take place.

3.3 During the continuance of his employment the Executive:

2

(a)  shall not directly or indirectly procure, accept or obtain for his own benefit (or for the benefit of any other person) any payment, rebate, discount, commission, vouchers, gift, entertainment or other benefit from any third party in respect of any business transacted or proposed to be transacted (excluding air miles or similar vouchers from other such schemes) (whether or not by him) by or on behalf of the Company or any Associated Company ("Gratuities");

(b)  shall observe the terms of any policy issued by the Company in relation to Gratuities; and

(c)  shall immediately disclose and account to the Company for any Gratuities received by him (or by any other person on his behalf or at his instruction).

4. Remuneration

4.1 The Company shall pay to the Executive with effect from 1 June 2008 a basic salary (which shall accrue from day to day) at the rate of £602,000 per year inclusive of any directors' fees payable to the Executive under the articles of association of the Company or any Associated Company (and any such fees as the Executive shall receive he shall pay to the Company). Such basic salary shall be inclusive of an annual amount payable in respect of Board duties performed by the Executive in the Republic of Ireland ("the Irish Board Fee"). The Irish Board Fee shall be £65,000 or such greater amount as is payable to the senior non-executive director of the Company (other than the Chairman) in respect of his or her duties as a director of the Company. The salary shall be payable by equal monthly instalments in arrears on the last day of each calendar month and shall be subject to review by the Remuneration Committee not less than annually with effect from 1 January in each year.

4.2  Subject as stated below the Executive shall be entitled to receive a bonus in accordance with the rules and terms of the Company's EAIP scheme (or such other bonus scheme as the Company may implement from time to time). The amount of any bonus shall be at the discretion of the Remuneration Committee. The target annual bonus under the EAIP shall be a cash target of sixty-five per cent (65%) and a share target of twenty per cent (20%) of the Executive's basic annual salary from time to time paid under Clause 4.1. The maximum annual bonus under the EAIP shall be a cash bonus of one hundred fifteen per cent (115%) and a maximum share bonus of sixty-five per cent (65%) of the Executive's basic annual salary under Clause 4.1. Any bonus payment shall be subject to deductions as appropriate. The Company reserves the right to change any bonus terms from year to year.

4.3  In the event that the Executive's employment hereunder terminates during any bonus year he shall be entitled to receive a proportion of the bonus he would have received had his employment not been terminated and the Remuneration Committee shall use its best endeavours but at its sole discretion to determine the estimation of such bonus. Such proportion shall be calculated as the fraction derived from dividing the period during which the Executive was employed hereunder during the relevant bonus year by the period of the bonus year.

5. Incentive Schemes

If the Executive is at any time granted options or awards pursuant to a share incentive scheme of the Company, those options or awards shall be subject to the rules of that scheme as in force from time to time which rules shall not form part of the Executive's service agreement. In particular, if the Executive's employment should terminate for any reason (including as a result of a repudiatory breach of contract by the Company) he will not be entitled to any compensation for any loss of any right or benefit or prospective right or benefit under any such scheme which he may have enjoyed whether such compensation is claimed by way of damages for wrongful dismissal or other breach of contract or by way of compensation for loss of office or otherwise.

3

6. Pension Scheme

6.1  The Executive shall be entitled to a pension contribution in respect of his basic salary (but excluding the Irish Board Fee). The Company shall contribute to such pension scheme as the Executive shall specify an amount equal to such proportion of his basic salary (excluding the Irish Board Fee) as would give rise to a contribution equal to thirty per cent (30%) of the Executive's basic salary under clause 4.1.from time to time. Such contributions shall be made monthly at the date when salary is paid Isn't hereunder redundant here?. Such contributions shall be in addition to the Executive's basic salary.

6.2  No contracting-out certificate is in force in respect of the employment of the Executive.

7.  Insurances

Subject to his complying with and satisfying any applicable requirements of the relevant insurers the Company shall during the continuance of his employment:

(a)  provide for the Executive and his partner or spouse and children under the age of 18 years membership of an appropriate private patient medical plan (to include cover for dental treatment) with such reputable medical expenses insurance scheme as the Company shall decide from time to time. The Executive shall be entitled to remain a member of such plan in accordance with and subject to its rules from time to time. The Executive shall also be allowed to participate in an annual Executive Physical program, subject to a maximum annual reimbursement of £1,500;

(b)  provide the Executive with life assurance cover which in the event of his death during the continuance of his employment may pay to his chosen dependants (subject only to the discretion of the trustees of the appropriate scheme) a lump sum equal to a minimum of 4 (four) times his then annual rate of salary. If such lump sum is more than the permitted maximum, such surplus will be made available (subject to the discretion of the trustees aforesaid) for the purchase of an annuity for the Executive's dependants subject as necessary to a medical examination. The Executive will co ­operate with the Company in any way reasonably necessary in order for the Company to comply with its obligations thereunder including, without prejudice to the generality hereof, by submitting himself for such medical examination as may be required of him in connection therewith from time to time;

(c)  provide for the Executive membership at the cost of the Company of any permanent health care scheme and prolonged disability scheme operated by the Group for the benefit of executives. The Executive shall be entitled to remain a member of such scheme in accordance with and subject to its rules from time to time; and

(d)  provide Directors' and Officers' insurance cover for the benefit of the Executive under the same policy as will be provided for the other directors such cover to continue to cover the Executive in respect of acts or omissions committed during his employment hereunder whether claims are made during or within the period of 7 (seven) years after the termination of the employment hereunder.

8.

Other Benefits

The Company shall provide the Executive with the sum of £18,000 per annum (payable in 12 (twelve) monthly instalments on the date the Executive's salary is paid less any deductions the Company is required to make by law) to enable the Executive to purchase, maintain, comprehensively insure and tax a car for his use during the continuance of his employment, together with reimbursement of all business and reasonable private petrol.

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9.  Expenses

9.1  The Company shall during the continuance of his employment reimburse the Executive in accordance with the Company's travel and expenses policy as amended from time to time.

9.2  The Company shall, under its Executive Financial Services Reimbursement Programme, provide the Executive with the sum of £5,000 per annum (less any deductions the Company is required to make by law) towards the cost of legal expenses and financial planning services.

10.  Holidays

10.1  The Executive shall (in addition to the usual public and bank holidays) be entitled during the continuance of his employment to 30 (thirty) working days' paid holiday in each holiday year, or such greater number in accordance with the Company's policy from time to time to be taken at a time or times as shall be convenient to the Company.

10.2  The Executive shall be entitled to carry forward to the following year up to 5 days' untaken annual holiday entitlement in each holiday year. The carry forward of any additional holiday entitlement not taken by him for any reason from one holiday year to the next shall require the prior written consent of the Board (such consent not to be unreasonably withheld).

10.3  Upon the termination of his employment the Executive's entitlement to accrued holiday pay (which accrues at the rate of 2.5 days per month) shall be calculated on a pro rata basis in respect of each completed month of service in the holiday year in which his employment terminates and the appropriate amount shall be paid to the Executive in addition to payment in lieu for any holidays not taken in previous holiday years provided that if the Executive shall have taken more days holiday than his accrued entitlement the Company is hereby authorised to make an appropriate deduction from the Executive's final salary payment.

11.  Incapacity

11.1  Subject to his complying with the Company's procedures relating to the notification and certification of periods of absence from work as from time to time in force the Executive shall continue to be paid his salary (inclusive of any statutory sick pay or social security benefits to which he may be entitled) during any periods of absence from work due to sickness, injury or other incapacity incapacitating the Executive from attending to his duties up to a maximum of 26 (twenty-six) weeks in aggregate in any period of 52 (fifty-two) consecutive weeks.

11.2  If the Executive shall have been absent from work due to sickness, injury or other incapacity for a continuous period of 26 (twenty-six) weeks or more then he shall receive such benefits (if any) as are available to him under the terms of the Company's permanent health insurance scheme or such greater sum (if any) as the Board may in its absolute discretion decide.

11.3  If any incapacity of the Executive shall be or appear to be caused by any alleged action or wrong of a third party and the Executive shall decide to claim damages in respect thereof, then the Executive shall use all reasonable endeavours to recover damages for loss of earnings over the period for which salary has been or will be paid to him by the Company under Clause 11.1, and shall account to the Company for any such damages recovered (in an amount not exceeding the actual salary paid or payable to him by the Company under Clause 11.1 in respect of the said period) less any costs borne by him in achieving such recovery.

The Executive shall keep the Company informed of the commencement, progress and outcome of any such claim.

12.  Intellectual Property

12.1  For the purposes of this Clause 12 the term "IPRs" means any and all patents, trade and service marks, unregistered design rights, registered design rights, trade and business

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names, copyrights (including copyright in software), database rights, topography rights and allother intellectual property rights (whether or not any of these is registered and including applications for registration of any such thing) and all rights or forms of protection of a similar nature or having equivalent or similar effect to any of these which may subsist anywhere in the world.

12.2  If the Executive creates, makes, authors, originates, conceives or writes (either alone or with others) any works, designs, innovations, inventions, improvements, processes, get-ups ortrade marks in the course of his employment with the Company ("Works"):

(a)  the Executive will promptly disclose to the Company full details of any such inventions, processes, improvements or other Works;

(b)  all rights (including, without limitation, all IPRs) in and to such Works shall solely legally and beneficially vest in the Company immediately upon their creation without any payment to the Executive;

(c)  the Executive hereby irrevocably and unconditionally waives, in favour of the Company, its licensees and successors-in-title any and all moral rights conferred on the Executive in relation to the Works (existing or future); and

(d)  the Executive shall not knowingly do anything, or omit to do anything, to imperil the validity of any patent or protection, or any application therefore, relating to any of the Works.

12.3  To the extent such rights and IPRs do not so vest in the Company, the Executive hereby (i) assigns to the Company all future copyright, database rights and unregistered design rights in the Works and (ii) in respect of all other rights and IPRs agrees to assign to the Company all of the Executive's right, title and interest (including without limitation all IPRs) in the Works.

12.4  The Executive hereby irrevocably authorises the Company to be his attorney, and to make use of his name and to sign and execute any documents and/or perform any act on his behalf, for the purpose of giving to the Company the full benefit of the provisions of this Clause 12 and, where permissible, to obtain patent or other protection in respect of any of the Works in the name of the Company or the Company's nominee.

12.5  The Executive shall from time to time, both during his employment under this Agreement and thereafter, at the request and expense of the Company, promptly do all things and execute all documents necessary or desirable to give effect to the provisions of this Clause 12 Including, without limitation, all things necessary to obtain and/or maintain patent or other protection in respect of any Works in any part of the world and to vest such rights (including, without limitation, all IPRs) in and to the Works in the Company or the Company' s nominee.

12.6  For the avoidance of doubt, the provisions of this Clause 12 shall apply to any rights (including, without limitation, any IPRs) in the Works arising in any jurisdiction, and the provisions of this Clause 12 shall apply in respect of any jurisdiction to the extent permitted by the directives, statutes, regulations and other laws of any such jurisdiction.

13.  Confidentiality

13.1  The Executive shall not (other than in the proper performance of his duties or without the prior written consent of the Board or unless ordered by a court of competent jurisdiction) at any time either during the continuance of his employment hereunder or after its termination disclose or communicate to any person or use for his own benefit or the benefit of any person other than the Company or any Associated Company any confidential information which may come to his knowledge in the course of his employment hereunder concerning the business or finances of any member of the Group or of any of its suppliers, agents, distributors or customers and the Executive shall during the continuance of his employment hereunder use

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his best endeavours (and following any termination thereof his reasonable endeavours) to prevent the unauthorised publication or misuse of any confidential information provided that such restrictions shall cease to apply to any confidential information which may enter the public domain other than through the default of the Executive but in any event the restrictions in this Clause 13.1 shall remain in full force and effect for so long as the Executive is in a position to utilise such information more readily than persons who have not been employed by the Company or Its Associated Companies.

13.2  All notes and memoranda of any trade secret or confidential information concerning the business of the Company or the Associated Companies or any of its or their suppliers, agents, distributors, customers or others which shall have been acquired, received or made by the Executive during the course of his employment shall be the property of the Company and shall be surrendered by the Executive to someone duly authorised in that behalf at the termination of his employment or at the request of the Board at any time during the course of his employment.

13.3  Without prejudice to the generality of Clause 13.1 the following is, for the avoidance of doubt, a non-exhaustive list of matters which in relation to the Company and the Associated Companies are considered confidential and must be treated as such by the Executive (for the purposes of this Agreement):

(a)  any trade secrets of the Company or any Associated Company;

(b)  any information in respect of which the Company or any Associated Company is bound by an obligation of confidence to any third party;

(c)  customer lists and details of contacts with or requirements of customers; and

(d)  any invention, technical data, know-how, instruction or operations manual or other manufacturing or trade secrets of the Group and/or their clients/customers.

13.4 The Executive shall comply with any reasonable policy produced by the Company concerning the Executive's ability to either directly or indirectly publish any opinion, fact or material or deliver any lecture or address or participate in the making of any film, radio broadcast or television transmission or communicate with any representative of the media or any third party relating to the business or affairs of the Company or any Associated Company or to any of its or their officers, employees, customers/clients, suppliers, distributors, agents or shareholders or to the development or exploitation of Works or IPRs (as defined in Clauses 12.1 and 12.2). For the purpose of this Clause "media" shall include television (terrestrial, satellite and cable) radio, newspapers and other journalistic publications.

14. Garden Leave

14.1  The Company may during all or any part of the period of notice as specified in Clause 1.2 of this Agreement (whether given by the Company or by the Executive) place the Executive on garden leave by not providing him with any work and excluding him from any premises of the Company and any Associated Company (and need not give any reason for so doing).

14.2  Such period of garden leave will not constitute a termination of the Executive's employment (and will not prejudice his continuing entitlement to salary and benefits). The Executive will continue to be bound by the provisions of this Agreement and must during any period of garden leave continue at all times to conduct himself with good faith towards the Group and not do anything that is harmful to the Group.

14.3  The Executive may not during any period of garden leave directly or indirectly be employed by or retained by or advise or assist any other person or entity in any capacity either paid or unpaid (except approved non-executive positions).

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14.4  The Company may require the Executive to resign from office as a director of the Company or any Associated Company during any period of garden leave and the Executive must resign as soon as reasonably practicable after any such request is made. Notwithstanding any other provision of this Agreement, such resignation shall not terminate the Executive's employment under this Agreement.

14.5  The Executive acknowledges that any demand which may be made in accordance with the terms of Clauses 14.1 to 14.4 above shall not constitute a breach of contract of any kind whatsoever. The Executive will not have any claim against the Company or any Associated Company as a consequence of being required to comply with those clauses.

14.6  The Executive hereby irrevocably appoints the Company to execute any instrument on his behalf to effect his resignation as a director if he fails to resign upon request in accordance with Clause 14.4.

14.7  The Executive shall, during any period of garden leave, remain available upon reasonable prior notice to perform any reasonable duty requested by the Company and shall co-operate generally with the Company to ensure a smooth hand over of his duties.

14.8  The Company may appoint another individual to carry out the Executive's duties during any period that he is on garden leave in accordance with Clause 14.

14.9 At the end of any period of garden leave under Clause 14.1, where this occurs before the end of the notice period under Clause 1.2, the Company shall either pay the Executive a sum equal to his basic salary and the Relevant Amount (calculated in accordance with Clause 1.3) for and in lieu of the balance of any period of notice given by the Company or the Executive (less any deductions the Company may be required by law to make) or require the Executive to return to work for the remainder of the notice period.

15. Termination of Employment

15.1  The employment of the Executive may be terminated by the Board forthwith without notice or payment in lieu of notice if the Executive:

(a)  commits any serious or persistent breach or non-observance of any of the terms, conditions or stipulations contained in this Agreement having been, in the case of persistent breaches, warned in advance by the Board in writing of the same;

(b)  is guilty of any gross default or gross misconduct in connection with or affecting the business or affairs of the Company or any Associated Company for which he is required to perform duties;

(c)  is guilty of conduct which brings or is likely to bring himself or the Company or any Associated Company into disrepute;

(d)  is convicted of an arrestable criminal offence (other than an offence under the road traffic legislation in the United Kingdom or elsewhere for which a non-custodial penalty is imposed);

(e)  is adjudged bankrupt or makes any arrangement or composition with his creditors or has an interim order made against him pursuant to section 252 of the Insolvency Act 1986;

(f) becomes of unsound mind or becomes a patient under the Mental Health Act 1983;

(g)  is or becomes prohibited by law from being a director; or

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(h)  voluntarily resigns as a director of the Company otherwise than at the request of the Board.

15.2  Upon the termination of his employment (for whatever reason and howsoever arising) the Executive:

(a)  shall not take away, conceal or destroy but shall immediately deliver up to the Company all documents (which expression shall include but without limitation notes, memoranda, correspondence, drawings, sketches, plans, designs and any other material upon which data or information is recorded or stored) relating to the business or affairs of the Company or any Associated Company or any of their clients/customers, shareholders, employees, officers, suppliers, distributors and agents (and the Executive shall not be entitled to retain any copies or reproductions of any such documents) together with any other property belonging to the Company or any Associated Company (including his car and its keys) which may then be in his possession or under his control;

(b)  shall, at the request of the Board and without prejudice to any rights of the Executive arising as a result of the loss of his employment hereunder, immediately resign without claim for compensation from office as a director of the Company and any Associated Company and from any other office held by him in the Company or any Associated Company (but without prejudice to any claim he may have for damages for breach of this Agreement) and in the event of his failure to do so the Company is hereby irrevocably authorised to appoint some person in his name and on his behalf to sign and deliver such resignations to the Board and/or to each such Associated Company;

(c)  shall not at any time thereafter make any untrue or misleading oral or written statement concerning the business and affairs of the Company or any Associated Company nor represent himself or permit himself to be held out as being in any way connected with or interested in the business of the Company or any Associated Company (except as a former employee for the purpose of communicating with prospective employers or complying with any applicable statutory requirements);

(d)  shall not at any time thereafter use the name "Shire" or any name capable of confusion therewith (whether by using such names as part of a corporate name or otherwise) (save for the making of factual statements (subject always to the provisions of Clause 13) describing his employment with the Company for the purposes of obtaining an alternative remunerated position as defined at Clause 15.4(vii)); and

(e)  shall immediately repay all outstanding debts or loans due to the Company or any Associated Company and the Company is hereby authorised to deduct from any wages (as defined by section 27 of the Employment Rights Act 1996) of the Executive a sum equal to any such debts or loans.

15.3 If the employment of the Executive under this Agreement is terminated by reason of the liquidation of the Company for the purpose of reconstruction or amalgamation or as part of any arrangement for the amalgamation or reconstruction of the Company not involving insolvency and the Executive is offered employment with any concern or undertaking resulting from the reconstruction or amalgamation on terms and conditions which taken as a whole are not less favourable than the terms of this Agreement then the Executive shall have no claim against the Company in respect of such termination.

15.4 (i)  Notwithstanding the provisions of Clauses 1.2, 1.3 and 15.1 of this Agreement, the Company may instead, at its sole discretion, terminate the Executive's employment by giving written notice to him that it is exercising its rights under this Clause 15.4 to terminate the employment and make Monthly Payments (as defined below) to the

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Executive. The maximum number of Monthly Payments shall be 12 unless notice under Clause 1 has been given before the Company makes any election under this Clause 15.4, and the Executive has worked part of that notice period, in which case the maximum number of Monthly Payments shall be reduced accordingly to reflect the remaining period of notice. The Monthly Payments shall commence on the date such notice is given to the Executive or such date thereafter as the Company shall determine and the Executive's employment under this Agreement shall cease on that day (the "Commencement Date").

(ii)

Subject to adjustments as contemplated in Clause 15.4(iii) below each Monthly Payment shall be calculated by dividing the Executive's basic salary at the date notice is given by twelve and adding the Relevant Amount as defined in Clause 1.3.2. Each Monthly Payment shall then be paid on a monthly basis subject to such deductions as may be required by law and in accordance with Clause 15.4(vi) below.

(iii)

The Company may instead of paying the part of the Relevant Amount relating to benefits as referred to in 15.4(ii) continue the provision of those benefits which the Executive would otherwise have been entitled to receive during the period of the Monthly Payment. If the Company decides to continue the provision of the benefits, the Monthly Payment shall be reduced accordingly.

(iv)  On the termination of the Executive's employment under this Clause 15, the Executive's rights to receive shares or exercise rights in relation to (or calculated by reference to) shares under any relevant bonus or incentive scheme will be determined in accordance with the rules of the relevant scheme.

(v)  The Executive shall be under a duty, beginning on the Commencement Date, to use reasonable endeavours actively to seek a suitable alternative remunerated position (defined below) and shall also be required to keep the Company informed in relation to his search when reasonably requested.

(vi)  If the Executive obtains an alternative remunerated position during the period for payment of the Monthly Payments then:

(a)  each of the Monthly Payments still outstanding shall be reduced by the basic monthly remuneration to which the Executive is entitled, from the alternative remunerated position, and only the balance shall be due to the Executive;

(b)  any benefits provided by the Company (or their value paid in lieu as part of the Monthly Payments) which are provided by the alternative remunerated position (on an equivalent basis) shall cease;

(c)  for the purposes of calculating the amount of the deduction in respect of remuneration from the alternative remunerated position, any basic salary or fees shall be included, together with the value of any pension provided, but not any entitlement to bonus or the value of any equity or equity-based incentive arrangements. The value of any entitlement to pension shall be calculated as the amount which the new employer contributes to a pension scheme on the Executive's behalf (in the case of a defined benefit arrangement, being the long term contribution rate, ignoring any adjustment to reflect an overall deficit or surplus in the scheme).

(vii)  For the purposes of this Clause 15.4 "alternative remunerated position" shall mean any new position, whether under a contract of employment, consultancy arrangement, non executive appointment or otherwise, whereby the Executive is directly or indirectly remunerated.

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(viii)  The Executive will not be entitled to receive any payment in addition to the Monthly Payments in respect of any holiday entitlement that would have accrued during the period for which the Monthly Payments are made, and will not accrue any entitlement to pension contributions or bonus during such period.

(ix)  The Company's determination as to the value of any benefit or entitlement for the purposes of this Clause 15.4, shall be binding on the parties in the absence of manifest error.

15.5  Any delay or forbearance by the Company In exercising any right of termination shall not constitute a waiver of it.

16.  Executive's Covenants

16.1  The Executive acknowledges that during the course of his employment with the Company he will receive and have access to confidential information of the Company and its Associated Companies (including without limitation those matters specified in Clause 13.3 of this Agreement) and he will also receive and have access to detailed client/customer lists and information relating to the operations and business requirements of those clients/customers and accordingly he is willing to enter into the covenants described in this Clause 16 in order to provide the Company and its Associated Companies with what he considers to be reasonable protection for those interests.

16.2  In this Clause 16:

(a) "Restricted Business" means the Business of the Company and its Associated Companies at the time of the termination of the Executive's employment with which the Executive was involved to a material extent at any time during the period of 12 (twelve) months ending on the Restriction Date and for the purposes of this Clause the term "Business" shall mean the research, development, marketing, sale or supply of pharmaceuticals for administration to humans;

(b)  "Restricted Customer" means any firm, company or other person who, at any time during the period of 12 (twelve) months ending on the Restriction Date, was a customer of or in the habit of dealing with the Company or any Associated Company and with whom the Executive dealt to a material extent or for whom or which the Executive was responsible on behalf of the Company or any Associated Company during that period and in respect of such customer material damage to the interests of the Company or any Associated Company could occur if such customer ceased or reduced its business with the Company or any Associated Company;

(c)  "Restricted Employee" means any person who, at the Restriction Date was employed by the Company or any Associated Company at a senior level and who could materially damage the interests of the Company or any Associated Company if he became employed in any business concern in competition with the Restricted Business and with whom the Executive worked closely or about whom the Executive obtained material detailed information, in either case at any time during the period of 12 (twelve) months ending on the Restriction Date; and

(d) "Restriction Date" means the date of termination of this Agreement.

16.3  The Executive will not, for a period of 12 (twelve) months after the Restriction Date, solicit or endeavour to entice away from the Company or any Associated Company the business or custom of a Restricted Customer with a view to providing or receiving goods or services to or from that Restricted Customer in competition with any Restricted Business.

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16.4  The Executive will not, for a period of 12 (twelve) months after the Restriction Date, provide goods or services to or otherwise have any business dealings with any Restricted Customer in the course of any business concern which is in competition with any Restricted Business.

16.5  The Executive will not, for a period of 12 (twelve) months after the Restriction Date, in the course of any business concern which is in competition with any Restricted Business offer employment to or otherwise endeavour to entice away from the Company or any Associated Company any Restricted Employee.

16.6  The Executive will not, without the prior written consent of the Board, for a period of 6 (six) months after the Restriction Date, be engaged in or concerned in any capacity in any business concern which is or might reasonably be expected to be in competition with any Restricted Business. This Clause shall not restrain the Executive from being engaged or concerned in any business concern in so far as the Executive's duties or work shall relate solely:

(a)  to geographical areas where the business concern is not in competition with the Restricted Business; or

(b)  to services or activities of a kind with which the Executive was not concerned to a material extent during the period of 12 (twelve) months ending on the Restriction Date.

16.7  The obligations imposed on the Executive by this Clause 16 extend to him acting not only on his own account but also on behalf of any other firm, company or other person and shall apply whether he acts directly or indirectly.

16.8  The Executive hereby agrees that he will at the request and expense of the Company enter into a direct agreement or undertaking with any Associated Company whereby he will accept restrictions and provisions corresponding to the restrictions and provisions in this Clause 16 (or such of them as may be appropriate in the circumstances) in relation to such activities and such area and for such a period not exceeding 12 (twelve) months as such Associated Company may reasonably require for the protection of its legitimate business interests.

16.9  It is agreed between the parties that whilst the restrictions set out in this Clause 16 are considered fair and reasonable for the protection of the Company's business and trade secrets, if it should be found that any of the restrictions be void as going beyond what is fair and reasonable in all the circumstances and if by deleting part of the wording or substituting a shorter period of time or different geographical limit or a more restricted range of activities for any of the period of time, geographical limits or ranges or activities set out in this Clause 16 it would not be void then there shall be substituted such next less extensive period and/or limit and/or activity or such deletions shall be made as shall render this Clause 16 valid and enforceable.

17.  Change of Control

17.1  For the purposes of this Clause 17:

(a)  "Relevant Event" means either:

(i)  the termination by the Company of the Executive's employment (other than for cause in accordance with Clause 15 of this Agreement); or

(ii)  the Executive's resignation where such resignation is as a consequence of a repudiatory breach of contract by the Company and amounts to a constructive dismissal,

within the period of 12 (twelve) months following the date of a Change of Control.

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(b)  Subject to Clause 17.6 below "Change of Control" means where any person either alone or together with any person acting in concert with him obtains control of the Company as defined in section 840 of the Income and Corporation Taxes Act 1988.

17.2  If a Relevant Event occurs the Company shall pay to the Executive within 14 (fourteen) days of that Relevant Event a sum equal to the aggregate of:

(a)  the value of his then current rate of basic salary for the period of 1 (one) year; and

(b)  an amount in lieu of annual bonus to be decided at the absolute discretion of the Remuneration Committee, as that committee was constituted immediately prior to the Change of Control, up to the maximum bonus, based on 150% achievement of group and personal objectives for the bonus year in which his employment terminates (based on the Executive's salary at the date on which his employment terminates); and

(c)  an amount in lieu of the Company's contributions to the Executive's pension scheme under Clause 6 of this Agreement for 1 (one) year; and

(d)  an amount in respect of the actual cost to the Company of the provision of the benefits due under Clauses 7 and 8 of this Agreement for 1 (one) year.

For the avoidance of doubt, as at the date of this Agreement, the maximum bonus which would be payable under Clause 17.2(b) is a maximum cash element of one hundred fifteen per cent (115%) and a maximum share element of sixty-five per cent (65%). Such limits may be amended by the Company from time to time.

17.3  Subject to any rights accrued at the date of termination of the Executive's employment under the provisions of any pension scheme of the Company, any payment by the Company pursuant to this Clause 17 shall be made in full and final settlement of all and any claims arising from or in connection with the Executive's employment or its termination or his office as Chief Executive Officer and its loss in each case in respect of the Company or any Associated Companies.

17.4  All payments to be made pursuant to this Clause 17 shall be paid less any necessary withholdings.

17.5  The Executive hereby agrees that he shall not, following a payment under this Clause 17, bring any claim before any court or employment tribunal relating to unfair dismissal.

17.6  This Clause shall not apply where in connection with a scheme of reconstruction or amalgamation or reorganisation of the Company and one or more of its Associated Companies the Executive refuses an offer of employment on terms identical in all material respects to those hereunder by the company which following such reconstruction or reorganisation replaces the Company or the relevant Associated Companies.

18.  Taxation

18.1  During the continuance of his employment the Executive may be required to work in the USA or such other jurisdiction as the Company may request from time to time (the "Foreign Jurisdiction").

18.2  The Company shall ensure that the Executive is covered by a tax equalisation programme so that, if for any reason the Executive is subject to tax (as a direct result of business duties) in the Foreign Jurisdiction in respect of his remuneration under this Agreement which is not creditable in the UK, then a reconciliation will be undertaken to ensure that, so far as

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practicable, the net tax position of the Executive is no worse than it would have been had he only been subject to UK tax in respect of such earnings.

18.3  Following the reconciliation exercise in accordance with Clause 18.2 the Executive shall repay to the Company any excess income benefits or the Company shall make any additional tax equalisation payments due to the Executive in the form of allowances as necessary. If appropriate, such payments shall be enhanced to allow for any further tax which may be due on them.

18.4  The Executive shall be required to consult PricewaterhouseCoopers or such other firm of professional advisers as the Company may request from time to time about his tax position in the Foreign Jurisdiction and the Company will bear the reasonable costs of such consultancy services as well as the cost of annual tax return preparation services in the UK and the Foreign Jurisdiction.

18.5  The Executive Is advised to take specialist tax advice regarding the tax treatment of personal income and capital gains and the cost of such advice will be covered by the Company under the provisions of this Clause 18. For the avoidance of doubt, this Clause 18.5 does not cover amounts payable for general tax planning and advice, the costs of which are payable by the Company in accordance with Clause 9.2.

19.  Disciplinary and Grievance Procedures

19.1  The Executive shall be expected to maintain the highest standard of integrity and behaviour. For the purpose of disciplinary and grievance procedures the Executive's supervisor is the Board.

19.2  If the Executive is not satisfied with any disciplinary decision taken in relation to him he may apply in writing within 14 (fourteen) days of that decision to the Board whose decision shall be final.

19.3  If the Executive has any grievance in relation to his employment he may raise it in writing with the Board whose decision shall be final.

20.  Directorship

The Executive shall not save at the request or with the consent of the Board:

(a)  voluntarily resign as a director of the Company;

(b)  do or fail to do anything which causes him to be prohibited by law from continuing to act as a director; or

(c)  voluntarily do or refrain from doing any act whereby his office as a director of the Company is or becomes liable to be vacated.

The removal of the Executive from office as a director of the Company or the failure of the Company in general meeting to re-elect the Executive as a director of the Company (if he shall be obliged to retire by rotation or otherwise pursuant to the Articles of Association) shall terminate the Executive's employment under this Agreement and such termination shall be without prejudice to any claim which the Executive may have for damages for breach of this Agreement provided that the Company was not entitled at the time of such removal or failure to re-elect to terminate his employment pursuant to Clause 15.1.

21.  Data Protection

The Executive consents to the Company or any Associated Company holding and processing both electronically and manually the data it collects which relates to the Executive for the

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purposes of the administration and management of its employees and its business and for compliance with applicable procedures, laws and regulations. The Executive also consents to the transfer of such personal information to other offices the Company may have or to an Associated Company or to other third parties whether or not outside the European Economic Area for administration purposes and other purposes in connection with the Executive's employment where it is necessary or desirable for the Company to do so.

22.  Notices

22.1 Any notice to be given under this Agreement shall be given in writing and shall be deemed to be sufficiently served by one party on the other if it is delivered personally or is sent by first class registered or recorded delivery pre-paid post (air mail if overseas) addressed to either the Company's registered office for the time being or the Executive's address as set out in this Agreement (or such other address as shall be notified to the Company in accordance with this Clause) as the case may be.

22.2  Any notice sent by post shall be deemed (in the absence of evidence of earlier receipt) to be received 2 (two) days after posting (6 (six) if sent by air mail) and in proving the time such notice was sent and shall be sufficient to show that the envelope containing it was properly addressed, stamped and posted. Any notice delivered personally shall be deemed to be received when delivered to the address provided for in Clause 22.1.

23. Miscellaneous

23.1  The Executive hereby warrants that by virtue of entering into this Agreement he will not be in breach of any express or implied terms of any contract or of any other obligations legally binding upon him.

23.2  Any benefits provided by the Company to the Executive or his family which are not expressly referred to In this Agreement shall be regarded as ex gratia benefits provided at the entire discretion of the Company and shall not form part of the Executive's contract of employment.

23.3  The Company shall be entitled at any time during the Executive's employment to make deductions from the Executive's salary or from any other sums due to the Executive from the Company or any Associated Company in respect of any overpayment of any kind made to the Executive or in respect of any debt or other sum due from him provided always that reasonable evidence of the validity of such deductions is provided to the Executive.

24. Definitions and Interpretation

24.1 In this Agreement:

"Articles of Association"	means the Company's articles of association in force at the date hereof and from time to time thereafter;
"Associated Company"	means a company which is from time to time a subsidiary or a holding company of the Company or a subsidiary (other than the Company) of a holding company of the Company. In this definition "subsidiary" and "holding company" have the same meaning as in section 736 of the Companies Act 1985;
"Board"	means the board of directors for the time being of the Company including any duly appointed committee thereof or the directors present at a meeting of the directors of the Company at which a quorum is present but excluding the Executive (as appropriate);

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"Group"	means the Company and the Associated Companies; and
"Remuneration Committee"	means the remuneration committee of the Board from time to time.

24.2  The headings in this Agreement are for convenience only and shall not affect its construction or interpretation.

24.3  References in this Agreement to Clauses are references to clauses in this Agreement.

24.4  Any reference in this Agreement to the employment of the Executive is a reference to his employment by the Company whether or not during the currency of this Agreement.

24.5  Any reference in this Agreement to a person shall where the context permits include a reference to a body corporate and to any unincorporated body of persons.

24.6  Any word in this Agreement which denotes the singular shall where the context permits include the plural and vice versa and any word in this Agreement which denotes the masculine gender shall where the context permits include the feminine and/or the neuter genders and vice versa.

24.7  Any reference in this Agreement to a statutory provision shall be deemed to include a reference to any statutory amendment, modification or re-enactment of it.

24.8  This Agreement supersedes all previous agreements between the parties or any Associated Company relating to the employment of the Executive.

24.9  This Agreement is governed by and shall be construed in accordance with the laws of Jersey and the parties to this Agreement hereby submit to the exclusive jurisdiction of the Jersey courts.

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IN WITNESS whereof this Agreement has been executed as a deed by the parties hereto and is intended and hereby delivered as a deed on the date first above written.

Executed as a deed by	)
SHIRE LIMITED acting by a	)	/s/ Graham Hetherington
director and its secretary/	)	/s/ Tatjana May
two directors:
Executed as a deed by	)
ANGUS RUSSELL	)	/s/ A C Russell
in the presence of:	)

Signature of witnesses:	/s/ P.N. Anken
Name:	P.N. ANKEN
Address:	107 CADLEY ROAD
	COLLINGBOURNE DUCIS
	MARLBOROUGH SN8 3EA
Occupation:	SECRETARY

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EX-10.23

Exhibit 10.23

At the Annual General Meeting of shareholders held on September 24, 2008, Shire made this service agreement available for review.

 Dated 2 July 2008

(1)      SHIRE LIMITED  ­

- and -

(2)      MR GRAHAM HETHERINGTON

SERVICE AGREEMENT

THIS AGREEMENT is made the 2 day of July 2008

B E T W E E N:

(1)	SHIRE LIMITED (registered number 99854) a company incorporated in and under the laws of Jersey and having its registered office at 22 Grenville Street, St Helier, Jersey JE4 8PX (the "Company"); and
(2)	MR GRAHAM HETHERINGTON of 22 Grenville Street, St Helier, Jersey JE4 8PX (the "Executive").

WHEREBY it is agreed that the Company shall employ the Executive and the Executive shall serve the Company as Chief Financial Officer on the following terms and subject to the following conditions.

1.	Commencement and Term
1.1	The Executive's continuous employment with the Company shall commence on 1 July 2008.
1.2	The employment of the Executive shall (subject to the provisions of Clause 15) be terminable by either the Company or the Executive giving to the other 12 (twelve) months' notice in writing commencing at any time.
1.3.1	The Company may at its absolute discretion elect at any time to terminate the employment of the Executive with immediate effect by paying to the Executive (less deductions as appropriate) salary in lieu of notice and a sum (which shall be calculated by multiplying the Relevant Amount by the number of months' notice which the Executive was entitled to receive at the date of such termination) in compensation for the immediate loss by the Executive of his other benefits hereunder.
1.3.2	In the event that the Company terminates the employment of the Executive pursuant to Clause 1.3.1 at any time, the Relevant Amount shall be the aggregate of;
(a)	an amount, to be decided at the absolute discretion of the Remuneration Committee, which may be up to the target annual bonus under the Executive Annual Incentive Plan (EAIP) to which, had he served his notice, the Executive would have been entitled pursuant to Clause 4 based on 100% achievement of group and personal objectives for the bonus year in which his employment terminates (based on the Executive's salary at the date on which his employment terminates), divided by 12 (twelve); and

(b)	(i)	25% of the Executive's basic salary (taken at the date of termination of this Agreement) in lieu of Company contributions to the Executive's pension scheme pursuant to Clause 6 of this Agreement, and
	(ii)	an amount equal to the actual cost to the Company of providing the benefits due for the period of notice to the Executive pursuant to Clauses 7 and 6 of this Agreement,
	in each case divided by 12 (twelve).
1.3.3	On the termination of the Executive's employment under this Clause 1, the Executive's rights to receive shares or exercise rights in relation to (or calculated by reference to) shares under any relevant bonus or incentive scheme will be determined in accordance with the rules of the relevant scheme.
2.	Obligations during Employment
	The Executive shall during the continuance of his employment:
	(a)	serve the Company to the best of his ability in the capacity of Chief Financial Officer;

	(b)	faithfully and diligently perform such duties and exercise such powers consistent with them as the Board may from time to time properly assign to or confer upon him in such capacity or otherwise in connection with the business of the Company or any Associated Company;
	(c)	perform and exercise the said duties and powers on behalf of any Associated Company and act as a director or other officer of any Associated Company;
	(d)	do all in his power to protect, promote, develop and extend the business interests and reputation of the Group;
	(e)	at all times and in all respects conform to and comply with the lawful and reasonable directions of the Board;
	(f)	upon receiving reasonable notice promptly give to the Board (in writing if so requested) all such information, explanations and assistance as it may require in connection with the business and affairs of the Company and any Associated Company for which he is required to perform duties;
	(g)	unless prevented by sickness, injury or other incapacity or as otherwise agreed by the Board devote the whole of his time, attention and abilities during his hours of work (which shall be normal business hours and such additional hours as may be necessary for the proper performance of his duties) to the business and affairs of the Company and any Associated Company for which he is required to perform duties (save that the Executive may, with the prior written consent of the Board, become a non-executive director of another company);
	(h)	work at such place of business of the Company or any Associated Company as the Company may reasonably require for the proper performance and exercise of his duties and powers and the Executive may be required to travel on the business of the Company and any Associated Company for which he is required to perform duties; and
	(i)	comply with the Company's Code of Ethics Policy.
3.	Further Obligations of the Executive
3.1	During the continuance of his employment the Executive shall devote his whole time and attention to his duties under this Agreement and shall not directly or indirectly carry on or be engaged, concerned or interested in any other business, trade or occupation otherwise than as a holder directly or through nominees (including for the purposes hereof through any trust whether established by the Executive or otherwise and whether discretionary or otherwise of which the Executive is a beneficiary) of not more than 3% in aggregate of any class of shares, debentures or other securities in issue from time to time of any company (or, if different, amounting to no more than 3% in terms of the economic value of all such shares and securities (whether by way of dividend or upon any return in capital) and/or voting or other rights attaching thereto in respect of any matters) which are for the time being quoted or dealt with on any recognised investment exchange (as defined by section 285(1)(a) of the Financial Services and Markets Act 2000) provided that nothing in this Clause 3.1 shall prevent the Executive from continuing to hold his current portfolio of investments in securities.
3.2	During the continuance of his employment the Executive shall in relation to any dealings in securities comply with all laws affecting dealings in the securities of such companies and all regulations of any relevant stock exchanges on which such dealings take place.
3.3	During the continuance of his employment the Executive:

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	(a)	shall not directly or indirectly procure, accept or obtain for his own benefit (or for the benefit of any other person) any payment, rebate, discount, commission, vouchers, gift, entertainment or other benefit from any third party in respect of any business transacted or proposed to be transacted (excluding air miles or similar vouchers from other such schemes) (whether or not by him) by or on behalf of the Company or any Associated Company ("Gratuities");
	(b)	shall observe the terms of any policy issued by the Company in relation to Gratuities; and
	(c)	shall immediately disclose and account to the Company for any Gratuities received by him (or by any other person on his behalf or at his instruction).
4.	Remuneration
4.1	The Company shall pay to the Executive with effect from 1 July 2008 a basic salary (which shall accrue from day to day) at the rate of £400,000 per year inclusive of any directors' fees payable to the Executive under the articles of association of the Company or any Associated Company (and any such fees as the Executive shall receive he shall pay to the Company). Such basic salary shall be inclusive of an annual amount payable in respect of Board duties performed by the Executive in the Republic of Ireland ("the Irish Board Fee"), The Irish Board Fee shall be £65,000 or such greater amount as is payable to the senior non-executive director of the Company (other than the Chairman) in respect of his or her duties as a director of the Company. The salary shall be payable by equal monthly instalments in arrears on the last day of each calendar month and shall be subject to review by the Remuneration Committee not less than annually with effect from 1 January in each year.
4.2	Subject as stated below the Executive shall be entitled to receive a bonus in accordance with the rules and terms of the Company's EAIP scheme (or such other bonus scheme as the Company may Implement from time to time). The amount of any bonus shall be at the discretion of the Remuneration Committee. The target annual bonus under the EAIP shall be a cash target of fifty-five per cent (55%) and a share target of fifteen per cent (15%) of the Executive's basic annual salary from time to time paid under Clause 4.1. The maximum annual bonus under the EAIP shall be a cash bonus of one hundred per cent (100%) and a maximum share bonus of fifty-five per cent (55%) of the Executive's basic annual salary under Clause 4.1. Any bonus payment shall be subject to deductions as appropriate. The Company reserves the right to change any bonus terms from year to year.
4.3	In the event that the Executive's employment hereunder terminates during any bonus year he shall be entitled to receive a proportion of the bonus he would have received had his employment not been terminated and the Remuneration Committee shall use its best endeavours but at its sole discretion to determine the estimation of such bonus. Such proportion shall be calculated as the fraction derived from dividing the period during which the Executive was employed hereunder during the relevant bonus year by the period of the bonus year.
5.	Incentive Schemes
	If the Executive is at any time granted options or awards pursuant to a share incentive scheme of the Company, those options or awards shall be subject to the rules of that scheme as in force from time to time which rules shall not form part of the Executive's service agreement. In particular, if the Executive's employment should terminate for any reason (including as a result of a repudiatory breach of contract by the Company) he will not be entitled to any compensation for any loss of any right or benefit or prospective right or benefit under any such scheme which he may have enjoyed whether such compensation is claimed by way of damages for wrongful dismissal or other breach of contract or by way of compensation for loss of office or otherwise.

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6.	Pension Scheme
6.1	The Executive shall be entitled to a pension contribution in respect of his basic salary (but excluding the Irish Board Fee). The Company shall contribute to such pension scheme as the Executive shall specify an amount equal to such proportion of his basic salary (excluding the Irish Board Fee) as would give rise to a contribution equal to twenty-five per cent (25%) of the Executive's basic salary hereunder from time to time. Such contributions shall be made monthly at the date when salary is paid hereunder. Such contributions shall be in addition to the Executive's basic salary.
6.2	No contracting-out certificate is in force in respect of the employment of the Executive.
7.	Insurances
	Subject to his complying with and satisfying any applicable requirements of the relevant insurers the Company shall during the continuance of his employment:
	(a)	provide for the Executive and his partner or spouse and children under the age of 18 years membership of an appropriate private patient medical plan (to include cover for dental treatment) with such reputable medical expenses insurance scheme as the Company shall decide from time to time. The Executive shall be entitled to remain a member of such plan in accordance with and subject to its rules from time to time. The Executive shall also be allowed to participate in an annual Executive Physical program, subject to a maximum annual reimbursement of £1,500;
	(b)	provide the Executive with life assurance cover which in the event of his death during the continuance of his employment may pay to his chosen dependants (subject only to the discretion of the trustees of the appropriate scheme) a lump sum equal to a minimum of 4 (four) times his then annual rate of salary. If such lump sum is more than the permitted maximum, such surplus will be made available (subject to the discretion of the trustees aforesaid) for the purchase of an annuity for the Executive's dependants subject as necessary to a medical examination. The Executive will co ­operate with the Company in any way reasonably necessary in order for the Company to comply with its obligations thereunder including, without prejudice to the generality hereof, by submitting himself for such medical examination as may be required of him in connection therewith from time to time;
	(c)	provide for the Executive membership at the cost of the Company of any permanent health care scheme and prolonged disability scheme operated by the Group for the benefit of executives. The Executive shall be entitled to remain a member of such scheme in accordance with and subject to its rules from time to time; and
	(d)	provide Directors' and Officers' insurance cover for the benefit of the Executive under the same policy as will be provided for the other directors such cover to continue to cover the Executive in respect of acts or omissions committed during his employment hereunder whether claims are made during or within the period of 7 (seven) years after the termination of the employment hereunder.
8.	Other Benefits
	The Company shall provide the Executive with the sum of £12,000 per annum (payable in 12 (twelve) monthly instalments on the date the Executive's salary is paid less any deductions the Company is required to make by law) to enable the Executive to purchase, maintain, comprehensively insure and tax a car for his use during the continuance of his employment, together with reimbursement of all business and reasonable private petrol.

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9.	Expenses
9.1	The Company shall during the continuance of his employment reimburse the Executive in accordance with the Company's travel and expenses policy as amended from time to time.
9.2	The Company shall, under its Executive Financial Services Reimbursement Programme, provide the Executive with the sum of £5,000 per annum (less any deductions the Company is required to make by law) towards the cost of legal expenses and financial planning services.
10.	Holidays
10.1	The Executive shall (in addition to the usual public and bank holidays) be entitled during the continuance of his employment to 25 (twenty-five) working days' paid holiday in each holiday year, or such greater number in accordance with the Company's policy from time to time to be taken at a time or times as shall be convenient to the Company.
10.2	The Executive shall be entitled to carry forward to the following year up to 5 days' untaken annual holiday entitlement in each holiday year. The carry forward of any additional holiday entitlement not taken by him for any reason from one holiday year to the next shall require the prior written consent of the Board (such consent not to be unreasonably withheld).
10.3	Upon the termination of his employment the Executive's entitlement to accrued holiday pay (which accrues at the rate of 2.09 days per month) shall be calculated on a pro rata basis in respect of each completed month of service in the holiday year in which his employment terminates and the appropriate amount shall be paid to the Executive in addition to payment in lieu for any holidays not taken in previous holiday years provided that if the Executive shall have taken more days holiday than his accrued entitlement the Company is hereby authorised to make an appropriate deduction from the Executive's final salary payment.
11.	Incapacity
11.1	Subject to his complying with the Company's procedures relating to the notification and certification of periods of absence from work as from time to time in force the Executive shall continue to be paid his salary (inclusive of any statutory sick pay or social security benefits to which he may be entitled) during any periods of absence from work due to sickness, injury or other incapacity incapacitating the Executive from attending to his duties up to a maximum of 26 (twenty-six) weeks in aggregate in any period of 52 (fifty-two) consecutive weeks.
11.2	If the Executive shall have been absent from work due to sickness, injury or other incapacity for a continuous period of 26 (twenty-six) weeks or more then he shall receive such benefits (if any) as are available to him under the terms of the Company's permanent health insurance scheme or such greater sum (if any) as the Board may in its absolute discretion decide.
11.3	If any incapacity of the Executive shall be or appear to be caused by any alleged action or wrong of a third party and the Executive shall decide to claim damages in respect thereof, then the Executive shall use all reasonable endeavours to recover damages for loss of earnings over the period for which salary has been or will be paid to him by the Company under Clause 11.1, and shall account to the Company for any such damages recovered (in an amount not exceeding the actual salary paid or payable to him by the Company under Clause 11.1 in respect of the said period) less any costs borne by him in achieving such recovery.
	The Executive shall keep the Company informed of the commencement, progress and outcome of any such claim.
12.	Property Intellectual
12.1	For the purposes of this Clause 12 the term "IPRs" means any and all patents, trade and service marks, unregistered design rights, registered design rights, trade and business

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names, copyrights (including copyright in software), database rights, topography rights and all other intellectual property rights (whether or not any of these is registered and including applications for registration of any such thing) and all rights or forms of protection of a similar nature or having equivalent or similar effect to any of these which may subsist anywhere in the world.

12.2	If the Executive creates, makes, authors, originates, conceives or writes (either alone or with others) any works, designs, innovations, inventions, improvements, processes, get-ups or trade marks in the course of his employment with the Company ("Works"):
	(a)	the Executive will promptly disclose to the Company full details of any such inventions, processes, improvements or other Works;
	(b)	all rights (including, without limitation, all IPRs) in and to such Works shall solely legally and beneficially vest in the Company immediately upon their creation without any payment to the Executive;
	(c)	the Executive hereby irrevocably and unconditionally waives, in favour of the Company, its licensees and successors-in-title any and all moral rights conferred on the Executive in relation to the Works (existing or future); and
	(d)	the Executive shall not knowingly do anything, or omit to do anything, to imperil the validity of any patent or protection, or any application therefore, relating to any of the Works.
12.3	To the extent such rights and IPRs do not so vest in the Company, the Executive hereby (i) assigns to the Company all future copyright, database rights and unregistered design rights in the Works and (ii) in respect of all other rights and IPRs agrees to assign to the Company all of the Executive's right, title and interest (including without limitation all IPRs) in the Works.
12.4	The Executive hereby irrevocably authorises the Company to be his attorney, and to make use of his name and to sign and execute any documents and/or perform any act on his behalf, for the purpose of giving to the Company the full benefit of the provisions of this Clause 12 and, where permissible, to obtain patent or other protection in respect of any of the Works in the name of the Company or the Company's nominee.
12.5	The Executive shall from time to time, both during his employment under this Agreement and thereafter, at the request and expense of the Company, promptly do all things and execute all documents necessary or desirable to give effect to the provisions of this Clause 12 including, without limitation, all things necessary to obtain and/or maintain patent or other protection in respect of any Works in any part of the world and to vest such rights (including, without limitation, all IPRs) in and to the Works in the Company or the Company's nominee.
12.6	For the avoidance of doubt, the provisions of this Clause 12 shall apply to any rights (including, without limitation, any IPRs) in the Works arising in any jurisdiction, and the provisions of this Clause 12 shall apply in respect of any jurisdiction to the extent permitted by the directives, statutes, regulations and other laws of any such jurisdiction.
13.	Confidentiality
13.1	The Executive shall not (other than in the proper performance of his duties or without the prior written consent of the Board or unless ordered by a court of competent jurisdiction) at any time either during the continuance of his employment hereunder or after its termination disclose or communicate to any person or use for his own benefit or the benefit of any person other than the Company or any Associated Company any confidential information which may come to his knowledge in the course of his employment hereunder concerning the business or finances of any member of the Group or of any of its suppliers, agents, distributors or customers and the Executive shall during the continuance of his employment hereunder use

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	his best endeavours (and following any termination thereof his reasonable endeavours) to prevent the unauthorised publication or misuse of any confidential information provided that such restrictions shall cease to apply to any confidential information which may enter the public domain other than through the default of the Executive but in any event the restrictions in this Clause 13.1 shall remain in full force and effect for so long as the Executive is in a position to utilise such information more readily than persons who have not been employed by the Company or its Associated Companies.
13.2	All notes and memoranda of any trade secret or confidential information concerning the business of the Company or the Associated Companies or any of its or their suppliers, agents, distributors, customers or others which shall have been acquired, received or made by the Executive during the course of his employment shall be the property of the Company and shall be surrendered by the Executive to someone duly authorised in that behalf at the termination of his employment or at the request of the Board at any time during the course of his employment.
13.3	Without prejudice to the generality of Clause 13.1 the following is, for the avoidance of doubt, a non-exhaustive list of matters which in relation to the Company and the Associated Companies are considered confidential and must be treated as such by the Executive (for the purposes of this Agreement):
	(a)	any trade secrets of the Company or any Associated Company;
	(b)	any information In respect of which the Company or any Associated Company is bound by an obligation of confidence to any third party;
	(c)	customer lists and details of contacts with or requirements of customers; and
	(d)	any invention, technical data, know-how, instruction or operations manual or other manufacturing or trade secrets of the Group and/or their clients/customers.
13.4	The Executive shall comply with any reasonable policy produced by the Company concerning the Executive's ability to either directly or indirectly publish any opinion, fact or material or deliver any lecture or address or participate in the making of any film, radio broadcast or television transmission or communicate with any representative of the media or any third party relating to the business or affairs of the Company or any Associated Company or to any of its or their officers, employees, customers/clients, suppliers, distributors, agents or shareholders or to the development or exploitation of Works or IPRs (as defined in Clauses 12.1 and 12.2). For the purpose of this Clause "media" shall include television (terrestrial, satellite and cable) radio, newspapers and other journalistic publications.
14.	Garden Leave
14.1	The Company may during all or any part of the period of notice as specified in Clause 1.2 of this Agreement (whether given by the Company or by the Executive) place the Executive on garden leave by not providing him with any work and excluding him from any premises of the Company and any Associated Company (and need not give any reason for so doing).
14.2	Such period of garden leave will not constitute a termination of the Executive's employment (and will not prejudice his continuing entitlement to salary and benefits). The Executive will continue to be bound by the provisions of this Agreement and must during any period of garden leave continue at all times to conduct himself with good faith towards the Group and not do anything that is harmful to the Group.
14.3	The Executive may not during any period of garden leave directly or indirectly be employed by or retained by or advise or assist any other person or entity in any capacity either paid or unpaid (except approved non-executive positions).

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14.4	The Company may require the Executive to resign from office as a director of the Company or any Associated Company during any period of garden leave and the Executive must resign as soon as reasonably practicable after any such request is made. Notwithstanding any other provision of this Agreement, such resignation shall not terminate the Executive's employment under this Agreement.
14.5	The Executive acknowledges that any demand which may be made in accordance with the terms of Clauses 14.1 to 14.4 above shall not constitute a breach of contract of any kind whatsoever. The Executive will not have any claim against the Company or any Associated Company as a consequence of being required to comply with those clauses.
14.6	The Executive hereby irrevocably appoints the Company to execute any instrument on his behalf to effect his resignation as a director if he fails to resign upon request in accordance with Clause 14.4.
14.7	The Executive shall, during any period of garden leave, remain available upon reasonable prior notice to perform any reasonable duty requested by the Company and shall co-operate generally with the Company to ensure a smooth hand over of his duties.
14.8	The Company may appoint another individual to carry out the Executive's duties during any period that he is on garden leave in accordance with Clause 14.
14.9	At the end of any period of garden leave under Clause 14.1, where this occurs before the end of the notice period under Clause 1.2, the Company shall either pay the Executive a sum equal to his basic salary and the Relevant Amount (calculated in accordance with Clause 1.3) for and in lieu of the balance of any period of notice given by the Company or the Executive (less any deductions the Company may be required by law to make) or require the Executive to return to work for the remainder of the notice period.
15.	Termination of Employment
15.1	The employment of the Executive may be terminated by the Board forthwith without notice or payment in lieu of notice if the Executive:
	(a)	commits any serious or persistent breach or non-observance of any of the terms, conditions or stipulations contained in this Agreement having been, in the case of persistent breaches, warned in advance by the Board in writing of the same;
	(b)	is guilty of any gross default or gross misconduct in connection with or affecting the business or affairs of the Company or any Associated Company for which he is required to perform duties;
	(c)	is guilty of conduct which brings or is likely to bring himself or the Company or any Associated Company into disrepute;
	(d)	is convicted of an arrestable criminal offence (other than an offence under the road traffic legislation in the United Kingdom or elsewhere for which a non-custodial penalty is imposed);
	(e)	is adjudged bankrupt or makes any arrangement or composition with his creditors or has an interim order made against him pursuant to section 252 of the Insolvency Act 1986;
	(f)	becomes of unsound mind or becomes a patient under the Mental Health Act 1983;
	(g)	is or becomes prohibited by law from being a director; or

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	(h)	voluntarily resigns as a director of the Company otherwise than at the request of the Board.
15.2	Upon the termination of his employment (for whatever reason and howsoever arising) the Executive:
	(a)	shall not take away, conceal or destroy but shall immediately deliver up to the Company all documents (which expression shall include but without limitation notes, memoranda, correspondence, drawings, sketches, plans, designs and any other material upon which data or information is recorded or stored) relating to the business or affairs of the Company or any Associated Company or any of their clients/customers, shareholders, employees, officers, suppliers, distributors and agents (and the Executive shall not be entitled to retain any copies or reproductions of any such documents) together with any other property belonging to the Company or any Associated Company (including his car and its keys) which may then be in his possession or under his control;
	(b)	shall, at the request of the Board and without prejudice to any rights of the Executive arising as a result of the loss of his employment hereunder, immediately resign without claim for compensation from office as a director of the Company and any Associated Company and from any other office held by him in the Company or any Associated Company (but without prejudice to any claim he may have for damages for breach of this Agreement) and in the event of his failure to do so the Company is hereby irrevocably authorised to appoint some person in his name and on his behalf to sign and deliver such resignations to the Board and/or to each such Associated Company;
	(c)	shall not at any time thereafter make any untrue or misleading oral or written statement concerning the business and affairs of the Company or any Associated Company nor represent himself or permit himself to be held out as being in any way connected with or interested in the business of the Company or any Associated Company (except as a former employee for the purpose of communicating with prospective employers or complying with any applicable statutory requirements);
	(d)	shall not at any time thereafter use the name "Shire" or any name capable of confusion therewith (whether by using such names as part of a corporate name or otherwise) (save for the making of factual statements (subject always to the provisions of Clause 13) describing his employment with the Company for the purposes of obtaining an alternative remunerated position as defined at Clause 15.4(vii)); and
	(e)	shall immediately repay all outstanding debts or loans due to the Company or any Associated Company and the Company is hereby authorised to deduct from any wages (as defined by section 27 of the Employment Rights Act 1996) of the Executive a sum equal to any such debts or loans.
15.3	If the employment of the Executive under this Agreement is terminated by reason of the liquidation of the Company for the purpose of reconstruction or amalgamation or as part of any arrangement for the amalgamation or reconstruction of the Company not involving Insolvency and the Executive is offered employment with any concern or undertaking resulting from the reconstruction or amalgamation on terms and conditions which taken as a whole are not less favourable than the terms of this Agreement then the Executive shall have no claim against the Company in respect of such termination.
15.4	(i)	Notwithstanding the provisions of Clauses 1.2, 1.3 and 15.1 of this Agreement, the Company may instead, at its sole discretion, terminate the Executive's employment by giving written notice to him that it is exercising its rights under this Clause 15.4 to terminate the employment and make Monthly Payments (as defined below) to the

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	Executive. The maximum number of Monthly Payments shall be 12 unless notice under Clause 1 has been given before the Company makes any election under this Clause 15.4, and the Executive has worked part of that notice period, in which case the maximum number of Monthly Payments shall be reduced accordingly to reflect the remaining period of notice. The Monthly Payments shall commence on the date such notice is given to the Executive or such date thereafter as the Company shall determine and the Executive's employment under this Agreement shall cease on that day (the "Commencement Date").
(ii)	Subject to adjustments as contemplated in Clause 15.4(iii) below each Monthly Payment shall be calculated by dividing the Executive's basic salary at the date notice is given by twelve and adding the Relevant Amount as defined in Clause 1.32. Each Monthly Payment shall then be paid on a monthly basis subject to such deductions as may be required by law and in accordance with Clause 15.4(vi) below.
(iii)	The Company may instead of paying the part of the Relevant Amount relating to benefits as referred to in 15.4(ii) continue the provision of those benefits which the Executive would otherwise have been entitled to receive during the period of the Monthly Payment. If the Company decides to continue the provision of the benefits, the Monthly Payment shall be reduced accordingly.
(iv)	On the termination of the Executive's employment under this Clause 15, the Executive's rights to receive shares or exercise rights in relation to (or calculated by reference to) shares under any relevant bonus or incentive scheme will be determined in accordance with the rules of the relevant scheme.
(v)	The Executive shall be under a duty, beginning on the Commencement Date, to use reasonable endeavours actively to seek a suitable alternative remunerated position (defined below) and shall also be required to keep the Company informed in relation to his search when reasonably requested.
(vi)	If the Executive obtains an alternative remunerated position during the period for payment of the Monthly Payments then:

	(a)	each of the Monthly Payments still outstanding shall be reduced by the basic monthly remuneration to which the Executive is entitled, from the alternative remunerated position, and only the balance shall be due to the Executive;
	(b)	any benefits provided by the Company (or their value paid in lieu as part of the Monthly Payments) which are provided by the alternative remunerated position (on an equivalent basis) shall cease;
	(c)	or the purposes of calculating the amount of the deduction in respect of remuneration from the alternative remunerated position, any basic salary or fees shall be included, together with the value of any pension provided, but not any entitlement to bonus or the value of any equity or equity-based incentive arrangements. The value of any entitlement to pension shall be calculated as the amount which the new employer contributes to a pension scheme on the Executive's behalf (in the case of a defined benefit arrangement, being the long term contribution rate, ignoring any adjustment to reflect an overall deficit or surplus in the scheme).
(vii)	For the purposes of this Clause 15.4 "alternative remunerated position" shall mean any new position, whether under a contract of employment, consultancy arrangement, non executive appointment or otherwise, whereby the Executive is directly or indirectly remunerated.

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	(viii)	The Executive will not be entitled to receive any payment in addition to the Monthly Payments in respect of any holiday entitlement that would have accrued during the period for which the Monthly Payments are made, and will not accrue any entitlement to pension contributions or bonus during such period.
	(ix)	The Company' s determination as to the value of any benefit or entitlement for the purposes of this Clause 15.4, shall be binding on the parties in the absence of manifest error.
15.5	Any delay or forbearance by the Company in exercising any right of termination shall not constitute a waiver of It.
16.	Executive's Covenants
16.1	The Executive acknowledges that during the course of his employment with the Company he will receive and have access to confidential information of the Company and its Associated Companies (including without limitation those matters specified in Clause 133 of this Agreement) and he will also receive and have access to detailed client/customer lists and information relating to the operations and business requirements of those clients/customers and accordingly he is willing to enter into the covenants described in this Clause 16 in order to provide the Company and its Associated Companies with what he considers to be reasonable protection for those interests.
16.2	In this Clause 16:
	(a)	"Restricted Business" means the Business of the Company and its Associated Companies at the time of the termination of the Executive's employment with which the Executive was involved to a material extent at any time during the period of 12 (twelve) months ending on the Restriction Date and for the purposes of this Clause the term "Business" shall mean the research, development, marketing, sale or supply of pharmaceuticals for administration to humans;
	(b)	"Restricted Customer" means any firm, company or other person who, at any time during the period of 12 (twelve) months ending on the Restriction Date, was a customer of or in the habit of dealing with the Company or any Associated Company and with whom the Executive dealt to a material extent or for whom or which the Executive was responsible on behalf of the Company or any Associated Company during that period and in respect of such customer material damage to the Interests of the Company or any Associated Company could occur if such customer ceased or reduced its business with the Company or any Associated Company;
	(c)	"Restricted Employee" means any person who, at the Restriction Date was employed by the Company or any Associated Company at a senior level and who could materially damage the interests of the Company or any Associated Company if he became employed in any business concern in competition with the Restricted Business and with whom the Executive worked closely or about whom the Executive obtained material detailed information, in either case at any time during the period of 12 (twelve) months ending on the Restriction Date; and
	(d)	"Restriction Date" means the date of termination of this Agreement.
16.3	The Executive will not, for a period of 12 (twelve) months after the Restriction Date, solicit or endeavour to entice away from the Company or any Associated Company the business or custom of a Restricted Customer with a view to providing or receiving goods or services to or from that Restricted Customer in competition with any Restricted Business.

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16.4	The Executive will not, for a period of 12 (twelve). months after the Restriction Date, provide goods or services to or otherwise have any business dealings with any Restricted Customer in the course of any business concern which is in competition with any Restricted Business.
16.5	The Executive will not, for a period of 12 (twelve) months after the Restriction Date, in the course of any business concern which is in competition with any Restricted Business offer employment to or otherwise endeavour to entice away from the Company or any Associated Company any Restricted Employee.
16.6	The Executive will not, without the prior written consent of the Board, for a period of 6 (six) months after the Restriction Date, be engaged in or concerned in any capacity in any business concern which is or might reasonably be expected to be in competition with any Restricted Business. This Clause shall not restrain the Executive from being engaged or concerned in any business concern in so far as the Executive's duties or work shall relate solely:
	(a)	to geographical areas where the business concern is not in competition with the Restricted Business; or
	(b)	to services or activities of a kind with which the Executive was not concerned to a material extent during the period of 12 (twelve) months ending on the Restriction Date.
16.7	The obligations imposed on the Executive by this Clause 16 extend to him acting not only on his own account but also on behalf of any other firm, company or other person and shall apply whether he acts directly or indirectly.
16.8	The Executive hereby agrees that he will at the request and expense of the Company enter into a direct agreement or undertaking with any Associated Company whereby he will accept restrictions and provisions corresponding to the restrictions and provisions in this Clause 16 (or such of them as may be appropriate in the circumstances) in relation to such activities and such area and for such a period not exceeding 12 (twelve) months as such Associated Company may reasonably require for the protection of its legitimate business interests.
16.9	It is agreed between the parties that whilst the restrictions set out in this Clause 16 are considered fair and reasonable for the protection of the Company's business and trade secrets, if it should be found that any of the restrictions be void as going beyond what is fair and reasonable in all the circumstances and if by deleting part of the wording or substituting a shorter period of time or different geographical limit or a more restricted range of activities for any of the period of time, geographical limits or ranges or activities set out in this Clause 16 it would not be void then there shall be substituted such next less extensive period and/or limit and/or activity or such deletions shall be made as shall render this Clause 16 valid and enforceable.
17.	Change of Control
17.1	For the purposes of this Clause 17:
	(a)	"Relevant Event" means either:

(i)	the termination by the Company of the Executive's employment (other than for cause in accordance with Clause 15 of this Agreement); or
(ii)	the Executive's resignation where such resignation is as a consequence of a repudiatory breach of contract by the Company and amounts to a constructive dismissal,
within the period of 12 (twelve) months following the date of a Change of Control.

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	b)	Subject to Clause 17.6 below "Change of Control" means where any person either alone or together with any person acting in concert with him obtains control of the Company as defined in section 840 of the Income and Corporation Taxes Act 1988.
17.2	If a Relevant Event occurs the Company shall pay to the Executive within 14 (fourteen) days of that Relevant Event a sum equal to the aggregate of:
	(a)	the value of his then current rate of basic salary for the period of 1 (one) year; and
	(b)	an amount in lieu of annual bonus to be decided at the absolute discretion of the Remuneration Committee, as that committee was constituted immediately prior to the Change of Control, up to the maximum bonus, based on 150% achievement of group and personal objectives for the bonus year in which his employment terminates (based on the Executive's salary at the date on which his employment terminates); and
	(c)	an amount in lieu of the Company's contributions to the Executive's pension scheme under Clause 6 of this Agreement for 1 (one) year; and
	(d)	an amount in respect of the actual cost to the Company of the provision of the benefits due under Clauses 7 and 8 of this Agreement for 1 (one) year.
	For the avoidance of doubt, as at the date of this Agreement, the maximum bonus which would be payable under Clause 17.2(b) is a maximum cash element of one hundred per cent (100%) and a maximum share element of fifty-five per cent (55%). Such limits may be amended by the Company from time to time.
17.3	Subject to any rights accrued at the date of termination of the Executive's employment under the provisions of any pension scheme of the Company, any payment by the Company pursuant to this Clause 17 shall be made in full and final settlement of all and any claims arising from or in connection with the Executive's employment or its termination or his office as Chief Financial Officer and its loss in each case in respect of the Company or any Associated Companies.
17.4	All payments to be made pursuant to this Clause 17 shall be paid less any necessary withholdings.
17.5	The Executive hereby agrees that he shall not, following a payment under this Clause 17, bring any claim before any court or employment tribunal relating to unfair dismissal.
17.6	This Clause shall not apply where in connection with a scheme of reconstruction or amalgamation or reorganisation of the Company and one or more of its Associated Companies the Executive refuses an offer of employment on terms identical in all material respects to those hereunder by the company which following such reconstruction or reorganisation replaces the Company or the relevant Associated Companies.
18.	Disciplinary and Grievance Procedures
18.1	The Executive shall be expected to maintain the highest standard of integrity and behaviour. For the purpose of disciplinary and grievance procedures the Executive's supervisor is the Company's Chief Executive Officer.
18.2	If the Executive is not satisfied with any disciplinary decision taken in relation to him he may apply in writing within 14 (fourteen) days of that decision to the Board whose decision shall be final.

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18.3	If the Executive has any grievance in relation to his employment he may raise it in writing with the Board whose decision shall be final.
19.	Directorship

	The Executive shall not save at the request or with the consent of the Board:
	(a)	voluntarily resign as a director of the Company;
	(b)	do or fail to do anything which causes him to be prohibited by law from continuing to act as a director; or
	(c)	voluntarily do or refrain from doing any act whereby his office as a director of the Company is or becomes liable to be vacated.
	The removal of the Executive from office as a director of the Company or the failure of the Company in general meeting to re-elect the Executive as a director of the Company (if he shall be obliged to retire by rotation or otherwise pursuant to the Articles of Association) shall terminate the Executive's employment under this Agreement and such termination shall be without prejudice to any claim which the Executive may have for damages for breach of this Agreement provided that the Company was not entitled at the time of such removal or failure to re-elect to terminate his employment pursuant to Clause 15.1.
20.	Data Protection
	The Executive consents to the Company or any Associated Company holding and processing both electronically and manually the data it collects which relates to the Executive for the purposes of the administration and management of its employees and its business and for compliance with applicable procedures, laws and regulations. The Executive also consents to the transfer of such personal information to other offices the Company may have or to an Associated Company or to other third parties whether or not outside the European Economic Area for administration purposes and other purposes in connection with the Executive's employment where it is necessary or desirable for the Company to do so.
21.	Notices
21.1	Any notice to be given under this Agreement shall be given in writing and shall be deemed to be sufficiently served by one party on the other if it is delivered personally or is sent by first class registered or recorded delivery pre-paid post (air mail if overseas) addressed to either the Company's registered office for the time being or the Executive's address as set out in this Agreement (or such other address as shall be notified to the Company in accordance with this Clause) as the case may be.
21.2	Any notice sent by post shall be deemed (in the absence of evidence of earlier receipt) to be received 2 (two) days after posting (6 (six) if sent by air mail) and in proving the time such notice was sent and shall be sufficient to show that the envelope containing it was properly addressed, stamped and posted. Any notice delivered personally shall be deemed to be received when delivered to the address provided for in Clause 21.1.
22.	Miscellaneous
22.1	The Executive hereby warrants that by virtue of entering into this Agreement he will not be in breach of any express or implied terms of any contract or of any other obligations legally binding upon him.
22.2	Any benefits provided by the Company to the Executive or his family which are not expressly referred to in this Agreement shall be regarded as ex gratia benefits provided at the entire discretion of the Company and shall not form part of the Executive's contract of employment.

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22.3	The Company shall be entitled at any time during the Executive's employment to make deductions from the Executive's salary or from any other sums due to the Executive from the Company or any Associated Company in respect of any overpayment of any kind made to the Executive or in respect of any debt or other sum due from him provided always that reasonable evidence of the validity of such deductions is provided to the Executive.
23.	Definitions and Interpretation
23.1	In this Agreement:

"Articles of Association"	means the Company's articles of association in force at the date hereof and from time to time thereafter
"Associated Company"	means a company which is from time to time a subsidiary or a holding company of the Company or a subsidiary (other than the Company) of a holding company of the Company. In this definition "subsidiary" and "holding company" have the same meaning as in section 736 of the Companies Act 1985;
"Board"	means the board of directors for the time being of the Company including any duly appointed committee thereof or the directors present at a meeting of the directors of the Company at which a quorum is present but excluding the Executive (as appropriate);
"Group"	means the Company and the Associated Companies; and
"Remuneration Committee"	means the remuneration committee of the Board from time to time.

23.2	The headings in this Agreement are for convenience only and shall not affect its construction or interpretation.
23.3	References in this Agreement to Clauses are references to clauses in this Agreement.
23.4	Any reference in this Agreement to the employment of the Executive is a reference to his employment by the Company whether or not during the currency of this Agreement.
23.5	Any reference in this Agreement to a person shall where the context permits include a reference to a body corporate and to any unincorporated body of persons.
23.6	Any word in this Agreement which denotes the singular shall where the context permits include the plural and vice versa and any word in this Agreement which denotes the masculine gender shall where the context permits include the feminine and/or the neuter genders and vice versa.
23.7	Any reference in this Agreement to a statutory provision shall be deemed to include a reference to any statutory amendment, modification or re-enactment of it.
23.8	This Agreement supersedes any previous agreements between the parties or any Associated Company relating to the employment of the Executive.

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23.9 This Agreement is governed by and shall be construed in accordance with the laws of Jersey and the parties to this Agreement hereby submit to the exclusive jurisdiction of the Jersey courts.

16

IN WITNESS whereof this Agreement has been executed as a deed by the parties hereto and is intended and hereby delivered as a deed on the date first above written.

Executed as a deed by SHIRE LIMITED acting by a  director and its secretary/ two directors:	) ) )	/s/ A.C. Russell /s/ Tatjana May
Executed as a deed by GRAHAM HETHERINGTON in the presence of.	) ) )	/s/ Graham Hetherington

Signature of witness:	/s/ P.N. Anken
Name:	P.N. Anken
Address:	107 Cadley Road
	Collingbourne Ducis
	Marlborough SN8 3EA
Occupation:	Secretary

EX-10.24

Exhibit __

SETTLEMENT AGREEMENT AND MUTUAL RELEASE

WHEREAS, the undersigned are parties to the Delaware Court of Chancery action captioned In re: Transkaryotic Therapies, Inc., C.A. No. 2776-CC (the “Consolidated Action”) and wish to settle the Consolidated Action on the terms and conditions set forth in this Settlement Agreement and Mutual Release (the “Agreement”),

IT IS HEREBY AGREED AS FOLLOWS:

1. Settlement Amount.  Shire Human Genetic Therapies, Inc., a Delaware corporation formerly known as Transkaryotic Therapies, Inc. (“TKT”), shall pay, or shall cause an entity incorporated or otherwise organized in the United States to pay, to each of the entities listed in the first column of Exhibit A hereto (the “Payees”) the amount set forth for each such Payee in the second column of that Exhibit (the “Settlement Amount”).  Each Settlement Amount of $50.00  per share  represents $37.00 per share in proceeds from the sale of TKT stock and $13.00 per share in interest for each share of TKT stock at issue in the Consolidated Action and the collective payment of those Settlement Amounts is made in full satisfaction of all claims asserted in that litigation. TKT shall deliver the entire amount of each Payee’s Settlement Amount in accordance with the wire transfer instructions to be provided to counsel for TKT, such instructions to be provided within one business day of the execution of this Agreement by all signatories.   It is agreed that the Settlement Amount shall be allocated for tax purposes as being $37.00 in proceeds from the sale of TKT stock and $13.00 per share in interest, and that no party shall take any position or action inconsistent with such treatment on a tax return.

2.  Dismissal of the Action/Payment of Settlement Amount.   Within one business day of execution of this Agreement by all signatories, counsel for TKT shall present to the Court of Chancery the order attached to this Agreement as Exhibit B hereto (the “Order”) and advise the

Chancellor that the parties have reached a global settlement of the Consolidated Action and are jointly seeking the Court’s expedited approval of the Order (which will authorize the dismissal of the Consolidated Action pursuant to 8 Del.C. § 262(k)).  By November 7, 2008, provided that the Court shall have entered the Order on or before such date, TKT shall cause the following events to occur simultaneously:

(a)	payment of the Settlement Amount due to each Payee, as set forth above; and
(b)	filing of a stipulation of dismissal in the form attached as Exhibit C hereto (the “Dismissal”), with electronic signatures of counsel for the plaintiffs/petitioners in the Consolidated Action.

In the event the Court declines to enter the Order by November 7, 2008, this Agreement shall become null and void for all purposes, the Dismissal shall not be filed, and the Consolidated Action shall proceed as if this Agreement had not been entered into.

           3.  Mutual Releases.   Upon receipt of the Settlement Amounts by each of the entities listed on Exhibit A, the following mutual releases shall take effect without further action by any party:

(a) Each Payee (including without limitation each plaintiff/petitioner in the Consolidated Action) and their respective heirs, successors, assigns, affiliates, parents and indirect parents, subsidiaries and indirect subsidiaries, officers, directors, stockholders, agents, partners, members, principals and counsel hereby releases each of the defendants in the Consolidated Action (the “Defendants”) and their heirs, successors, assigns, affiliates, parents and indirect parents, subsidiaries and indirect subsidiaries, officers, directors, stockholders, agents, partners, members, principals and counsel from any and all actions, causes of action, claims and demands for, upon or by reason of any loss, damage, injury, cost or expense whatsoever, in connection with or related to the Consolidated Action, whether in law or equity and whether based on any state law, federal law, foreign law or common law right of action or otherwise, foreseen or unforeseen, matured or unmatured, known or unknown, accrued or not accrued; and

2

(b) Each of the Defendants and their respective heirs, successors, assigns, affiliates, parents and indirect parents, subsidiaries and indirect subsidiaries, officers, directors, stockholders, agents, partners, members, principals and counsel hereby releases each of the plaintiffs/petitioners in the Consolidated Action and their heirs, successors, assigns, affiliates, parents and indirect parents, subsidiaries and indirect subsidiaries, officers, directors, stockholders, agents, partners, members, principals and counsel from any and all actions, causes of action, claims and demands for, upon or by reason of any loss, damage, injury, cost or expense whatsoever, in connection with or related to the Consolidated Action, whether in law or equity and whether based on any state law, federal law, foreign law or common law right of action or otherwise, foreseen or unforeseen, matured or unmatured, known or unknown, accrued or not accrued.

4.  Authority/Binding Effect.   Each party hereto represents that the person executing this Agreement on that party’s behalf has been duly authorized to do so and that the party for whom such person is acting will be fully and legally bound by such execution of this document.  This Agreement shall be binding upon and shall inure to the benefit of the successors, heirs, assigns and affiliates of the parties hereto.

5. No Admission of Liability.  The parties agree that this Agreement shall not be deemed or construed to be an admission or evidence of any violation of any statute or law or of any liability or wrongdoing or of the truth of any of the claims or allegations alleged in the Consolidated Action or as a waiver of any defenses thereto.

6.  Counterparts.   This Agreement may be executed in counterparts, and facsimile or electronic signatures of the parties shall be treated for all purposes as original signatures, but shall not be effective against any party until executed by all parties.

7.  No Modification.   No modification or waiver of any provision of this Agreement shall be effective unless the same shall be in writing and signed by all parties hereto.

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8.  Governing Law; Jurisdiction.  This Agreement shall be governed by the laws of Delaware without regard to principles of conflicts of law.  The Court of Chancery of the State of Delaware shall have exclusive jurisdiction to hear any matters arising out of this Agreement, and the parties hereby express their intent that the Court of Chancery shall be the appropriate forum for any such matters.  It is further agreed that the party who prevails in any such proceeding shall be entitled to recover from the non-prevailing party all reasonable costs and attorney’s fees incurred in that regard.

[SIGNATURE PAGES FOLLOW]

4

SHIRE HUMAN GENETIC THERAPIES, INC. f/k/a TRANSKARYOTIC THERAPIES, INC.		SHIRE PLC
By:		By:
	Title:		Title:
	Date:   November ___, 2008		Date:   November ___, 2008

DR. DENNIS LANGER
By:
	Title:
	Date:   November ___, 2008

HIGH RIVER LIMITED PARTNERSHIP		ICAHN PARTNERS MASTER FUND L.P.
By:		By:
	Title:		Title:
	Date:   November ___, 2008		Date:   November ___, 2008

ICAHN PARTNERS, L.P.		VIKING GLOBAL EQUITIES LP
By:		By:
	Title:		Title:
	Date:   November ___, 2008		Date:   November ___, 2008

VGE III PORTFOLIO LTD.		CR INTRINSIC INVESTMENTS, LLC
By:		By:
	Title:		Title:
	Date:   November ___, 2008		Date:   November ___, 2008

SIGMA CAPITAL ASSOCIATES, LLC		MILLENCO, LLC
By:		By:
	Title:		Title:
	Date:   November ___, 2008		Date:   November ___, 2008

5

PORTER ORLIN LLC		ATTICUS CAPITAL LP
By:		By:
	Title:		Title:
	Date:   November ___, 2008		Date:   November ___, 2008

ROSLYN M. ORLIN		DEEPHAVEN EVENT TRADING, LTD.
By:		By:
	Title:		Title:
	Date:   November ___, 2008		Date:   November ___, 2008

DEEPHAVEN GROWTH OPPORTUNITIES TRADING, LTD.		MA DEEP EVENT TRADING, LTD.
By:		By:
	Title:		Title:
	Date:   November ___, 2008		Date:   November ___, 2008

EXECUTION OF AGREEMENT

BY NON-PARTY STOCKHOLDER:

ING CAPITAL LLC hereby acknowledges that, although it is not a party to the Consolidated Action, its execution of this Settlement Agreement and Mutual Release constitutes its express agreement to be bound by the all of the terms and conditions set forth above as if it were such a party, and that its receipt of a Settlement Amount (as reflected on Schedule A hereto) is conditioned upon its agreement to be so bound.

ING CAPITAL LLC
By:
	Title:
	Date:   November ___, 2008

6

EXHIBIT A

TO

SETTLEMENT AGREEMENT

AND MUTUAL RELEASE

Payees	Settlement Amounts to be Paid by TKT	Number of TKT Shares Represented
Millenco LLC	$164,983,550	3,299,671
Porter Orlin LLC	$123,235,350	2,464,707
Atticus Capital LP	$38,945,000	778,900
Roslyn Orlin	$500,000	10,000
Icahn Partners Master Fund L.P.	$37,595,850	751,917
Icahn Partners L.P.	$34,703,950	694,079
High River Limited Partnership	$18,075,000	361,500
CR Intrinsic Investments, LLC	$100,628,050	2,012,561
Sigma Capital Associates, LLC	$16,850,000	337,000
VGE III Portfolio Ltd.	$2,735,000	54,700
Viking Global Equities LP	$2,565,000	51,300
Deephaven Event Trading Ltd.	$4,855,700	97,114
Deephaven Growth Opportunities Trading, Ltd.	$2,960,050	59,201
ING Capital LLC	$18,825,000	376,500

7

EXHIBIT B

TO

SETTLEMENT AGREEMENT

AND MUTUAL RELEASE

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

  IN RE: TRANSKARYOTIC  THERAPIES, INC.   ) ) ) )   Consolidated C.A. No. 2776-CC

[PROPOSED] ORDER

WHEREAS, this Court has been informed that the parties to the captioned action have reached a proposed settlement (the “Settlement”); and

WHEREAS, the parties have represented to this Court that all persons listed on the duly verified list of appraisal claimants (as filed with this Court) have agreed to settle this action under the terms and conditions of the Settlement; and

WHEREAS, the Court finds that these circumstances satisfy the requirements of 8 Del. C. § 262 (k);

NOW, THEREFORE, this ____ day of November, 2008, IT IS HEREBY ORDERED that this action may be dismissed by the filing of a stipulation of dismissal pursuant to Court of Chancery Rule 41(a)(1)(ii).

William B. Chandler, III

Chancellor

8

EXHIBIT C

TO

SETTLEMENT AGREEMENT

AND MUTUAL RELEASE

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

  IN RE: TRANSKARYOTIC  THERAPIES, INC.   ) ) ) )   Consolidated C.A. No. 2776-CC

STIPULATION  OF DISMISSAL

Pursuant to Court of Chancery Rule 41(a)(1)(ii) and the Order dated November ________, 2008   the captioned action is hereby dismissed with prejudice.

ASHBY & GEDDES	POTTER ANDERSON & CORROON LLP
Stephen E. Jenkins (#2152) Steven T. Margolin (#3110) Lauren E. Maguire  (#4261) Catherine A. Strickler (#4310) Andrew D. Cordo (#4534) 500 Delaware Avenue, 8th Floor Wilmington, DE 19801 (302) 654-1888	Arthur L. Dent (#2491) Bradley W. Voss (#4318) Abigail M. LeGrow (#4673) P.O. Box 951 1313 N. Market Street Wilmington, DE 19801 (302) 984-6034
Attorneys for High River Limited Partnership, Icahn Partners Master Fund, L.P., Icahn Partners, L.P., Viking Global Equities LP, VGE III Portfolio Ltd., CR Intrinsic Investments, LLC, and Sigma Capital Associates, LLC	Attorneys for Millenco, LLC, Porter Orlin LLC, Atticus Capital LP and Roslyn M. Orlin

9

EDWARDS ANGELL PALMER & DODGE LLP	RICHARDS, LAYTON & FINGER, P.A.
John L. Reed (#3023) Denise Seastone Kraft  (#2778) 919 North Market Street 15th Floor Wilmington, Delaware   19801 (302) 777-7770	Allen M. Terrell, Jr. (#709) John D. Hendershot (#4178) Charles A. McCauley, III (#4738) One Rodney Square, P.O. Box 551 Wilmington, Delaware 19899-0551 (302) 651-7700
Attorneys for Deephaven Event Trading, Ltd., Deephaven Growth Opportunities Trading, Ltd. and MA Deep Event Trading, Ltd.	Attorneys for Transkaryotic Therapies, Inc., and Shire Plc.

DUANE MORRIS LLP

Daniel V. Folt (#3143)

Matt Neiderman (#4018)

1100 North Market Street

Suite 1200

Wilmington, DE 19801

(302) 657-4927

Attorneys for Dennis H. Langer

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EX-31.1

EXHIBIT 31.1

CERTIFICATION OF ANGUS RUSSELL PURSUANT TO

RULE 13A-14 UNDER THE

SECURITIES EXCHANGE ACT OF 1934

FORM 10-Q FOR THE QUARTER ENDED

SEPTEMBER 30, 2008 OF

SHIRE PLC

I, Angus Russell, certify that:

1.           I have reviewed this quarterly report on Form 10-Q of Shire plc;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d - 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d - 15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 10, 2008

/s/ Angus Russell

Angus Russell

Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF GRAHAM HETHERINGTON PURSUANT TO

RULE 13A-14 UNDER THE

SECURITIES EXCHANGE ACT OF 1934

FORM 10-Q FOR THE QUARTER ENDED

SEPTEMBER 30, 2008 OF

SHIRE PLC

I, Graham Hetherington, certify that:

1.           I have reviewed this quarterly report on Form 10-Q of Shire plc;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d - 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d - 15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 10, 2008                                                      

/s/ Graham Hetherington

Graham Hetherington

Chief Financial Officer

EX-32.1

EXHIBIT 32.1

The certification set forth below is being submitted in connection with the Quarterly Report on Form 10-Q of Shire plc for the quarter ended September 30, 2008 (the “Report”) for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code.

Angus Russell, the Chief Executive Officer and Graham Hetherington, the Chief Financial Officer of Shire plc, each certifies that, to the best of his knowledge:

1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Shire plc.

Date:  November 10, 2008

/s/ Angus Russell

Angus Russell

Chief Executive Officer

/s/ Graham Hetherington

Graham Hetherington

Chief Financial Officer