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 adversely affected. The risks and uncertainties include, but are not limited to, risks associated with: the inherent uncertainty of research, development, approval, reimbursement, manufacturing and commercialization of the Company’s Specialty Pharmaceutical and Human Genetic Therapies products, as well as the ability to secure new products for commercialization and/or development; government regulation of the Company’s products; the Company’s ability to manufacture its products in sufficient quantities to meet demand; the impact of competitive therapies on the Company’s products; the Company’s ability to register, maintain and enforce patents and other intellectual property rights relating to its products; the Company’s ability to obtain and maintain government and other third-party reimbursement for its products; and other risks and uncertainties detailed from time to time in the Company’s filings with the Securities and Exchange Commission.

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:

ADDERALL XR® (mixed salts of a single entity amphetamine)

CALCICHEW® range (calcium carbonate with or without vitamin D3)

CARBATROL® (carbamazepine extended-release capsules)

DAYTRANA® (trademark of Noven Pharmaceutical Inc. (“Noven”))

ELAPRASE® (idursulfase)

EQUASYM® IR (methylphenidate hydrochloride)

EQUASYM® XL (methylphenidate hydrochloride)

FIRAZYR® (icatibant)

FOSRENOL® (lanthanum carbonate)

INTUNIV™ (guanfacine extended release)

JUVISTA®

LIALDA® (mesalamine)

MEZAVANT® (mesalazine)

PENTASA® (trademark of Ferring A/S Corp)

RAZADYNE® (trademark of Johnson & Johnson (“J&J”))

RAZADYNE® ER (trademark of J&J)

REMINYL® (galantamine hydrobromide) (United Kingdom ("UK”) and Republic of Ireland) (trademark of J&J, excluding UK and Republic of Ireland)

REMINYL XL™ (galantamine hydrobromide) (UK and Republic of Ireland) (trademark of J&J, excluding UK and Republic of Ireland)

REPLAGAL® (agalsidase alfa)

RESOLOR® (prucalopride)

SEASONIQUE® (trademark of Barr Laboratories, Inc. (“Barr”))

VENVANSE (lisdexamfetamine dimesylate)

VPRIV® (velaglucerase alfa)

VYVANSE® (lisdexamfetamine dimesylate)

XAGRID® (anagrelide hydrochloride)

ZEFFIX® (trademark of GlaxoSmithKline (“GSK”))

3TC® (trademark of GSK)

SHIRE PLC

Form 10-Q for the three months to September 30, 2010

Table of contents

		Page
PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

	Unaudited Consolidated Balance Sheets at September 30, 2010 and December 31, 2009	4

	Unaudited Consolidated Statements of Income for the three months and nine months to September 30, 2010 and September 30, 2009	6

	Unaudited Consolidated Statement of Changes in Equity for the nine months to September 30, 2010	8

	Unaudited Consolidated Statements of Comprehensive Income for the three months and nine months to September 30, 2010 and September 30, 2009	9

	Unaudited Consolidated Statements of Cash Flows for the nine months to September 30, 2010 and September 30, 2009	10

	Notes to the Unaudited Consolidated Financial Statements	12

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		34

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		54

ITEM 4. CONTROLS AND PROCEDURES		54

PART II OTHER INFORMATION		54

ITEM 1. LEGAL PROCEEDINGS		54

ITEM 1A. RISK FACTORS		54

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		54

ITEM 3. DEFAULTS UPON SENIOR SECURITIES		54

ITEM 4. OTHER INFORMATION		54

ITEM 5. EXHIBITS		55

PART 1. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SHIRE PLC

UNAUDITED CONSOLIDATED BALANCE SHEETS

			September 30,		December 31,
			2010		2009
	Notes			$’M		$’M
ASSETS
Current assets:
Cash and cash equivalents				193.3		498.9
Restricted cash		2		605.1		33.1
Accounts receivable, net		4		722.1		597.5
Inventories		5		252.6		189.7
Assets held for sale		6		61.5		1.7
Deferred tax asset				145.8		135.8
Prepaid expenses and other current assets		7		179.6		113.5
Total current assets				2,160.0		1,570.2

Non-current assets:
Investments		8		89.1		105.7
Property, plant and equipment, net		9		818.6		676.8
Goodwill				375.0		384.7
Other intangible assets, net		10		1,567.2		1,790.7
Deferred tax asset				86.3		79.0
Other non-current assets				5.4		10.4
Total assets				5,101.6		4,617.5

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued expenses		11		1,098.1		929.1
Deferred tax liability				2.9		2.9
Other current liabilities		12		70.2		88.0
Total current liabilities				1,171.2		1,020.0

Non-current liabilities
Convertible bonds				1,100.0		1,100.0
Other long-term debt		13		6.8		43.6
Deferred tax liability				356.1		294.3
Other non-current liabilities		14		169.7		247.1
Total liabilities				2,803.8		2,705.0
Commitments and contingencies		15

SHIRE PLC

UNAUDITED CONSOLIDATED BALANCE SHEETS (continued)


		September 30,			December 31,
		2010			2009
	Notes		$’M			$’M

Equity:
Common stock of 5p par value; 1,000 million shares authorized; and 562.2 million shares issued and outstanding (2009: 1,000 million shares authorized; and 561.5 million shares issued and outstanding)			55.7			55.6
Additional paid-in capital			2,731.9			2,677.6
Treasury stock: 14.9 million shares (2009: 17.8 million shares)			(299.0	)		(347.4	)
Accumulated other comprehensive income			108.6			149.1
Accumulated deficit			(299.4	)		(622.4	)
Total equity			2,297.8			1,912.5
Total liabilities and equity			5,101.6			4,617.5

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

SHIRE PLC

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

			3 months to			3 months to			9 months to			9 months to
			September 30,			September 30,			September 30,			September 30,
			2010			2009			2010			2009
	Notes			$’M			$’M			$’M			$’M
Revenues:
Product sales				794.3			602.5			2,276.8			1,916.8
Royalties				76.5			60.3			254.5			177.8
Other revenues				3.5			4.2			8.6			19.8
Total revenues				874.3			667.0			2,539.9			2,114.4
Costs and expenses:
Cost of product sales (1)				112.7			104.9			333.7			284.9
Research and development				197.9			147.8			475.9			492.5
Selling, general and administrative (1)				392.4			320.6			1,106.7			973.8
Gain on sale of product rights				-			(6.3	)		(4.1	)		(6.3	)
Reorganization costs		3		9.7			2.0			23.3			7.1
Integration and acquisition costs				5.8			6.2			6.4			10.0
Total operating expenses				718.5			575.2			1,941.9			1,762.0

Operating income				155.8			91.8			598.0			352.4

Interest income				1.0			0.2			1.9			1.5
Interest expense				(8.3	)		(9.4	)		(25.6	)		(30.6	)
Other income, net				0.8			7.0			9.0			61.9
Total other (expense)/income, net				(6.5	)		(2.2	)		(14.7	)		32.8
Income from continuing operations before income taxes and equity in (losses)/earnings of equity method investees				149.3			89.6			583.3			385.2
Income taxes				(52.7	)		(30.6	)		(160.8	)		(56.7	)
Equity in (losses)/earnings of equity method investees, net of taxes				(0.3	)		0.6			0.2			1.0
Income from continuing operations, net of taxes				96.3			59.6			422.7			329.5

Loss from discontinued operations (net of income tax expense of $nil in all periods)				-			-			-			(12.4	)
Net income				96.3			59.6			422.7			317.1

Add: Net loss attributable to the noncontrolling interest in subsidiaries				-			-			-			0.2
Net income attributable to Shire plc				96.3			59.6			422.7			317.3

(1)

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, 2010 (2009: $0.4 million) and $1.3 million for the nine months to September 30, 2010 (2009: $1.3 million). Selling, general and administrative costs includes amortization and impairment charges of intangible assets relating to intellectual property rights acquired of $73.9 million for the three months to September 30, 2010 (2009: $34.8 million) and $142.3 million for the nine months to September 30, 2010 (2009: $101.6 million).

SHIRE PLC

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (continued)

		3 months to			3 months to			9 months to			9 months to
		September 30,			September 30,			September 30,			September 30,
	Notes	2010			2009			2010			2009
Earning per ordinary share - basic

Earnings from continuing operations attributable to Shire plc shareholders			17.6	c		11.0	c		77.4	c		61.1	c

Loss from discontinued operations attributable to Shire plc shareholders			-			-			-			(2.3c	)

Earnings per ordinary share attributable to Shire plc shareholders - basic			17.6	c		11.0	c		77.4	c		58.8	c

Earnings per ordinary share - diluted

Earnings from continuing operations attributable to Shire plc shareholders			17.3	c		10.9	c		76.0	c		60.3	c

Loss from discontinued operations attributable to Shire plc shareholders			-			-			-			(2.3c	)
Earnings per ordinary share attributable to Shire plc shareholders - diluted			17.3	c		10.9	c		76.0	c		58.0	c

Weighted average number of shares (millions):
Basic	18		547.0			540.6			546.1			540.0
Diluted	18		556.7			548.3			589.7			547.1

	3 months to		3 months to		9 months to		9 months to
	September 30,		September 30,		September 30,		September 30,
	2010		2009		2010		2009
		$’M		$’M		$’M		$’M
Amounts attributable to Shire plc

Income from continuing operations, net of taxes		96.3		59.6		422.7		329.7
Loss from discontinued operations, net of taxes		-		-		-		(12.4	)
Net income attributable to Shire plc		96.3		59.6		422.7		317.3

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

SHIRE PLC

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In millions of US dollars except share data)

Shire plc shareholders' equity
	Common stock $'M		Common stock Number of shares M's		Additional paid-in capital $’M		Treasury stock $'M			Accumulated other comprehensive income $'M			Accumulated deficit $'M			Total equity $'M
As at January 1, 2010		55.6		561.5		2,677.6		(347.4	)		149.1			(622.4	)		1,912.5

Net income		-		-		-		-			-			422.7			422.7

Foreign currency translation		-		-		-		-			(21.3	)		-			(21.3	)

Options exercised		0.1		0.7		1.7		-			-			-			1.8

Share-based compensation		-		-		45.8		-			-			-			45.8

Excess tax benefit associated with exercise of stock options		-		-		6.8		-			-			-			6.8

Shares purchased by the Employee Share Ownership Trust ("ESOT")		-		-		-		(1.7	)		-			-			(1.7	)

Shares released by ESOT to satisfy exercise of stock options		-		-		-		50.1			-			(49.9	)		0.2

Unrealized holding loss on available-for-sale securities, net of taxes		-		-		-		-			(20.7	)		-			(20.7	)

Other than temporary impairment of available-for-sale securities, net of taxes		-		-		-		-			1.5			-			1.5

Dividends		-		-		-		-			-			(49.8	)		(49.8	)

As at September 30, 2010		55.7		562.2		2,731.9		(299.0	)		108.6			(299.4	)		2,297.8

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

Dividends per share

During the nine months to September 30, 2010 Shire plc declared and paid dividends of 9.250 US cents per ordinary share (equivalent to 27.750 US cents per American Depositary Share) totalling $49.8 million.

SHIRE PLC

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	3 months to		3 months to			9 months to			9 months to
	September 30,		September 30,			September 30,			September 30,
	2010		2009			2010			2009
	$'M		$'M			$'M			$'M

Net income		96.3		59.6			422.7			317.1
Other comprehensive income:
Foreign currency translation adjustments		60.9		28.4			(21.3	)		39.8
Unrealized holding gain/(loss) on available-for-sale securities (net of taxes of $nil, $nil, $2.6 million and $nil)		1.9		(2.3	)		(20.7	)		9.0
Other than temporary impairment of available-for-sale securities (net of taxes of $nil, $nil, $nil and $nil)		-		0.8			1.5			0.8
Comprehensive income		159.1		86.5			382.2			366.7
Add: net loss attributable to the noncontrolling interest in subsidiaries		-		-			-			0.2
Comprehensive income attributable to Shire plc		159.1		86.5			382.2			366.9

The components of accumulated other comprehensive income as at September 30, 2010 and December 31, 2009 are as follows:

	September 30,			December 31,
	2010			2009
		$’M			$’M
Foreign currency translation adjustments		115.4			136.7
Unrealized holding (loss)/gain on available-for-sale securities, net of taxes		(6.8	)		12.4
Accumulated other comprehensive income		108.6			149.1

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

SHIRE PLC

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

	9 months to			9 months to
	September 30,			September 30,
	2010			2009
		$’M			$’M
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		422.7			317.1
Adjustments to reconcile net income to net cash provided by operating activities:
Loss from discontinued operations		-			12.4
Depreciation and amortization		189.2			177.4
Share based compensation		44.2			50.1
Impairment of intangible assets1		42.7			-
Gain on sale of non-current investments		(11.1	)		(55.2	)
Gain on sale of product rights		(4.1	)		(6.3	)
Other		5.2			11.5
Movement in deferred taxes		48.7			(87.5	)
Equity in earnings of equity method investees		(0.2	)		(1.0	)
Changes in operating assets and liabilities:
Increase in accounts receivable		(138.0	)		(156.4	)
Increase in sales deduction accrual		169.0			212.2
Increase in inventory		(54.1	)		(24.2	)
Increase in prepayments and other current assets		(67.7	)		(8.1	)
Decrease in other assets		0.7			5.3
Decrease in accounts payable and other liabilities		(41.0	)		(56.3	)
Returns on investment from joint venture		5.8			4.9
Cash flows used in discontinued operations		-			(5.9	)
Net cash provided by operating activities (A)		612.0			390.0

CASH FLOWS FROM INVESTING ACTIVITIES
Movements in restricted cash		(547.0	)		(10.1	)
Payments on foreign exchange contracts related to Movetis NV acquisition		(21.2	)		-
Purchases of subsidiary undertakings and businesses, net of cash acquired		-			(75.5	)
Purchases of non-current investments		(1.0	)		-
Purchases of property, plant and equipment		(261.7	)		(169.4	)
Purchases of intangible assets		(2.7	)		(7.0	)
Proceeds from disposal of non-current investments and property, plant and equipment		2.1			19.7
Proceeds from disposal of subsidiary undertakings		-			6.7
Returns from equity investments		-			0.2
Net cash used in investing activities (B)		(831.5	)		(235.4	)

SHIRE PLC

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

	9 months to			9 months to
	September 30,			September 30,
	2010			2009
		$’M			$’M
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment under building finance obligation		(1.8	)		(3.9	)
Extinguishment of building finance obligation		(43.1	)		-
Tax benefit of stock based compensation		9.6			-
Proceeds from exercise of options		2.1			2.8
Payment of dividend		(49.8	)		(43.0	)
Payments to acquire shares by ESOT		(1.7	)		(1.0	)
Net cash used in financing activities(C)		(84.7	)		(45.1	)
Effect of foreign exchange rate changes on cash
and cash equivalents (D)		(1.4	)		5.0
Net (decrease)/increase in cash and cash equivalents (A+B+C+D)		(305.6	)		114.5
Cash and cash equivalents at beginning of period		498.9			218.2
Cash and cash equivalents at end of period		193.3			332.7

Supplemental information associated with continuing
operations:

	9 months to			9 months to
	September 30,			September 30,
	2010			2009
		$’M			$’M

Interest paid		(11.7	)		(17.4	)
Income taxes paid		(291.6	)		(205.2	)

Non cash investing and financing activities:
Equity in Vertex Pharmaceuticals, Inc. (“Vertex”) received as part consideration for disposal of non-current investment		9.1			50.8
Building financing obligation		-			7.1

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

SHIRE PLC

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies

(a) Basis of preparation

These interim financial statements of Shire plc 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 balance sheet as of December 31, 2009 was derived from audited financial statements but does not include all disclosures required by US GAAP.

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, 2009.

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 period and the Company believes that the disclosures are adequate to make the information presented not misleading. 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, 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 the valuation of intangible assets, the valuation of equity investments, sales deductions, income taxes and provisions for litigation and legal proceedings.

Adopted during the period

Amendments to the Accounting and Disclosure Requirements for the Consolidation of Variable Interest Entities

On January 1, 2010 the Company adopted new guidance issued by the Financial Accounting Standard Board (“FASB”) on the consolidation of variable interest entities. This guidance changes how a reporting entity determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. The determination of whether a reporting entity is required to consolidate another entity is based on, among other things, the other entity’s purpose and design and the reporting entity’s ability to direct the activities of the other entity that most significantly impact the other entity’s economic performance. The guidance also requires a reporting entity to provide additional disclosures about its involvement with variable interest entities and any significant changes in risk exposure due to such involvement. The adoption of the guidance did not impact the Company’s consolidated financial position, results of operations or cash flows.

The effective date of these amendments has been deferred for a reporting entity’s interest in an entity (1) that has all the attributes of an investment company or (2) for which it is industry practice to apply measurement principles for financial reporting purposes that are consistent with those followed by investment companies.

Accounting for Transfers of Financial Assets

On January 1, 2010 the Company adopted new guidance issued by the FASB on the accounting for transfers of financial assets. This guidance requires more information about transfers of financial assets, including securitization transactions, and where entities have continuing exposure to the risks related to transferred financial assets. It eliminates the concept of a “qualifying special-purpose entity,” changes the requirements for derecognizing financial assets, and requires

additional disclosures. The adoption of the guidance did not impact the Company’s consolidated financial position, results of operations or cash flows.

Improving Disclosures about Fair Value Measurements

On January 1, 2010 the Company adopted new guidance issued by the FASB requiring new disclosures for amounts transferred in and out of Levels 1 and 2 and for activity in Level 3 of the hierarchy for fair value measurements. The guidance also clarifies existing fair value measurement disclosures in respect of the level of disaggregation and disclosures about inputs and valuation techniques. This guidance is effective for Shire from January 1, 2010, except for the additional disclosures about activity in Level 3 of the hierarchy for fair value measurements, which is effective from January 1, 2011 and for interim periods within that year. The adoption of the guidance did not impact the Company’s disclosure on fair value measurement.

To be adopted in future periods

Revenue Recognition in Multiple Deliverable Revenue Arrangements

In September 2009, the FASB issued guidance on revenue recognition in multiple deliverable revenue arrangements. This amends the existing guidance on allocating consideration received between the elements in a multiple-deliverable arrangement and establishes a selling price hierarchy for determining the selling price of a deliverable. The selling price used for each deliverable will be based on vendor specific objective evidence (“VSOE”) if available, third party evidence if VSOE is not available, or estimated selling price if neither VSOE or third party evidence is available. It replaces the term fair value in the revenue allocation with selling price to clarify that the allocation of revenue is based on entity specific assumptions rather then the assumptions of a market place participant. The guidance eliminates the residual method of allocation and requires that arrangement consideration be allocated using the relative selling price method. The guidance also significantly expands the disclosures related to a vendor’s multiple-deliverable revenue arrangements. It will be effective prospectively for revenue arrangements entered into or materially modified for fiscal years beginning on or after June 15, 2010. The Company is currently evaluating the impact of adopting this guidance.

Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades

In April 2010, the FASB issued guidance on the effect of denominating the exercise price of a share-based payment award in the currency of the market in which the underlying equity security trades. This guidance clarifies that an employee share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity’s equity securities trades should not be considered to contain a condition that is not a market, performance, or service condition. Therefore, an entity would not classify such an award as a liability if it otherwise qualifies as equity. The guidance will be effective for fiscal years beginning on or after December 15, 2010. The Company has historically accounted for share based payment awards in accordance with the guidance, and therefore does not currently expect the guidance to impact its consolidated financial position, results of operations or cash flows.

Milestone Method of Revenue Recognition

In April 2010, the FASB issued guidance on defining a milestone and determining when it may be appropriate to apply the milestone method of revenue recognition for research or development transactions. This guidance clarifies that: consideration that is contingent on achievement of a milestone in its entirety may be recognized as revenue in the period in which the milestone is achieved only if the milestone is judged to meet certain criteria to be considered substantive; milestones should be considered substantive in their entirety and may not be bifurcated; an arrangement may contain both substantive and non substantive milestones; and each milestone should be evaluated individually to determine if it is substantive. The guidance is effective on a prospective basis for milestones achieved in fiscal years, and interim periods within those years, beginning on or after June 15, 2010. Early adoption is permitted. The Company is currently evaluating the impact of adopting this guidance.

2. Business combinations

Acquisition of Movetis NV

On September 6, 2010 Shire launched a voluntary public takeover offer for all the shares and warrants in Movetis NV (“Movetis”), a Belgium-based specialty gastro-intestinal (“GI”) company, at a price of €19 per share in cash, equivalent to $592.0 million at closing of the transaction.

On October 12, 2010 the Company’s wholly owned subsidiary, Shire Holdings Luxembourg S.a.r.l. acquired 99.21% of the shares of Movetis as a result of the successful tender offer. Shire is proceeding with a statutory squeeze-out of those shares and warrants not tendered in the offer in accordance with applicable Belgian legislation. An additional tender period opened, on the same terms, on October 12, 2010 and closed on November 2, 2010. Shares and warrants not tendered to the additional offer will transfer to Shire by operation of law on November 8, 2010. Movetis shares were delisted from Euronext Brussels at close of trading on November 2, 2010. The acquisition was funded from Shire’s existing cash resources. During the third quarter Shire deposited €428 million into a blocked account to be used exclusively to pay the purchase price. At September 30, 2010 these funds, equivalent to $584.0 million are presented within restricted cash.

The acquisition of Movetis will be accounted for as a purchase business combination. The assets acquired and the liabilities assumed from Movetis will be recorded at the date of acquisition at their fair value. Shire’s consolidated financial statements and results of operations will reflect these values, with the results of Movetis included from October 12, 2010. The acquisition significantly broadens Shire’s global GI portfolio and adds growing revenues from RESOLOR, a new chemical entity indicated for the symptomatic treatment of chronic constipation in women in whom laxatives fail to provide adequate relief. Movetis has the rights to RESOLOR in the European Union (“EU”), Iceland, Lichtenstein, Norway and Switzerland and is entitled to royalties on sales of RESOLOR outside of Europe from J&J. The acquisition also brought to Shire world-class research and development talent and a promising GI pipeline.

In the three and nine months to September 30, 2010 the Company expensed transaction costs of $5.4 million relating to the Movetis acquisition, which have been recorded within integration and acquisition costs in the Company’s income statement. As the initial accounting for the business combination has not yet been completed, the Company has not disclosed within this Form 10-Q the amounts recognized for each major class of assets and liabilities, the factors leading to the goodwill arising on acquisition, or pro forma financial information for Shire and Movetis. The Company will include further disclosure relating to the Movetis acquisition in its Form 10-K for the year ended December 31, 2010.

EQUASYM IR and XL

On March 31, 2009 the Company acquired the worldwide rights (excluding the US, Canada and Barbados) to EQUASYM IR and XL for the treatment of attention deficit and hyperactivity disorder (“ADHD”) from UCB Pharma Limited (“UCB”) for cash consideration of $72.8 million. Included within the recognized purchase price for the acquisition is further consideration of $18.2 million, of which $12.0 million was paid to UCB in the nine months to September 30, 2010 and the remaining $6.2 million may become payable in 2011 if certain sales targets are met. This acquisition broadened the scope of Shire’s ADHD portfolio and facilitated immediate access to the European ADHD market as well as providing Shire the opportunity to enter additional markets around the world.

The acquisition of EQUASYM IR and XL was accounted for as a business combination. The purchase price was allocated to the currently marketed products ($73.0 million), in process research and development (“IPR&D”) ($5.5 million), other liabilities ($0.7 million) and goodwill ($13.2 million).

3. Reorganization costs

Establishment of an International Commercial Hub in Switzerland

In March 2010 the Company initiated plans to relocate certain commercial and research and development (“R&D”) operations to Switzerland to support its Human Genetic Therapies ("HGT") and Specialty Pharmaceuticals ("SP") businesses outside the US. In the nine months to September 30, 2010, the Company incurred reorganization costs totaling $14.0 million relating to employee involuntary termination benefits and other re-organization costs. The transition to the international commercial hub in Switzerland will be effected over 2010 and 2011. The Company estimates that further costs of approximately $16 to 24 million will be incurred over the remainder of 2010 and 2011.

Owings Mills

In March 2009 the Company initiated plans to phase out operations and close its SP manufacturing facility at Owings Mills, Maryland. Between 2009 and 2011, all products manufactured by Shire at this site will transition to DSM Pharmaceutical Products, and operations and employee numbers at the site will wind down over this period. During the nine months to September 30, 2010 the Company incurred reorganization costs of $9.3 million which relate to employee involuntary termination benefits and other costs. The total reorganization costs incurred since March 2009 are $22.0 million.

As a result of the decision to transfer manufacturing from the Owings Mills site the Company revised the useful life of property, plant and equipment in the facility and in the nine months to September 30, 2010 incurred accelerated depreciation of $18.3 million, which has been charged to Cost of product sales. Consequently, the Company estimates an accelerated depreciation charge, over the level which would have been charged absent the wind down of operations, of $5.4 million in the fourth quarter of 2010. The reorganization costs and accelerated depreciation have been recorded within the SP reportable segment.

Jerini non-core operations

In the second quarter of 2009 the operations of Jerini Ophthalmic, Inc, and certain other non-core pre-clinical operations acquired through the acquisition of Jerini AG (“Jerini”) were closed down, and the Company recorded a closure costs liability of $9.1 million, relating to employee involuntary termination benefits, contract termination costs and other closure costs. The Company paid all remaining closure costs during the nine months to September 30, 2010 and no liability for these closure costs remains at September 30, 2010.

The liability for reorganization costs arising on the establishment of the international commercial hub in Switzerland and transfer of manufacturing from Owings Mills at September 30, 2010 is as follows:


								Closing
	Opening liability		Amount					liability at
	at January 1,		charged to re-					September 30,
	2010		organization		Paid/Utilized			2010
	$'M		$'M		$'M			$'M

Involuntary termination benefits		4.1		8.5		(3.4	)		9.2
Contract termination costs		2.8		-		(2.8	)		-
Other termination costs		-		14.8		(14.0	)		0.8
		6.9		23.3		(20.2	)		10.0

At September 30, 2010 the closing reorganization cost liability was recorded within accounts payable and accrued expenses ($6.9 million) and other non-current liabilities ($3.1 million).

4. Accounts receivable, net

Accounts receivable at September 30, 2010 of $722.1 million (December 31, 2009: $597.5 million), are stated net of a provision for discounts and doubtful accounts of $21.4 million (December 31, 2009: $20.8 million).

Provision for discounts and doubtful accounts:

	2010			2009
		$’M			$’M
As at January 1,		20.8			20.2
Provision charged to operations		130.8			85.4
Provision utilization		(130.2	)		(82.8	)
Reclassification		-			(8.3	)
As at September 30,		21.4			14.5

At September 30, 2010 accounts receivable included $67.0 million (December 31, 2009: $92.4 million) related to royalty income.

5. Inventories

Inventories are stated at the lower of cost or market value and comprise:

	September 30,		December 31,
	2010		2009
		$’M		$’M
Finished goods		66.1		50.9
Work-in-progress		137.8		102.1
Raw materials		48.7		36.7
		252.6		189.7

At September 30, 2010 inventories included $nil (December 31, 2009: $18.8 million) for products which have not yet received regulatory approval. Pre-approval inventories at December 31, 2009 included VPRIV, which was granted marketing approval by the US Food and Drug Administration (“FDA”) on February 26, 2010 and marketing authorization by the European Commission on August 26, 2010.

6. Assets held for sale

Assets held for sale at September 30, 2010 of $61.5 million (December 31, 2009: $1.7 million), comprised intangible assets ($56.0 million) and inventory ($5.5 million) relating to DAYTRANA (“the DAYTRANA disposal group”).

On August 10, 2010 the Company announced that it had agreed to divest DAYTRANA to Noven. Noven developed and manufactures DAYTRANA, and Shire licensed DAYTRANA from Noven in 2003. On approval of the divestment, the held for sale criteria were met, and the Company recognized an impairment loss of $42.7 million to record the DAYTRANA disposal group at the lower of its carrying amount or fair value less costs to sell. The impairment loss has been recorded to selling, general and administrative expenses in the three and nine months to September 30, 2010. The DAYTRANA disposal group formed part of the Specialty Pharmaceuticals operating segment.

The divestment became effective on October 1, 2010. No consideration was received at the time of divestment; however future consideration is receivable from Noven dependent on DAYTRANA’s future performance. On divestment Shire recorded the fair value of the contingent consideration receivable from Noven ($56.0 million) within current assets and non-current assets. No gain or loss was recorded on divestiture, however in future periods gains or losses may be recorded on any change in the fair value of the contingent consideration.

7. Prepaid expenses and other current assets

	September 30,		December 31,
	2010		2009
		$’M		$’M
Prepaid expenses		41.4		44.9
Income tax receivable		90.7		-
Value added taxes receivable		17.6		37.3
Other current assets		29.9		31.3
		179.6		113.5

The income tax receivable of $90.7 million (December 31, 2009: $nil) includes taxes on inter-company sales (which are recorded as prepaid assets until the related inventory has been sold to a third party customer) and interim tax payments on account made during the nine months to September 30, 2010.

8. Investments

On March 12, 2009 the Company completed the disposal of its investment in Virochem Pharma Inc. (“Virochem”) to Vertex in a cash and stock transaction. The disposal was part of a transaction entered into by all the shareholders of Virochem with Vertex. The carrying amount of the Company’s investment in Virochem on March 12, 2009 was $14.8 million. In 2009 Shire received consideration of $19.2 million in cash and 2 million Vertex shares (valued at $50.8 million) from the disposal, recognizing a gain of $55.2 million in Other (expense)/income, net in the nine months to September 30, 2009.

In the nine months to September 30, 2010 the Company received further consideration of $2.0 million in cash and 0.2 million Vertex shares (valued at $9.1 million) which had been held in escrow until certain substantive conditions expired in March 2010. The Company recognized an additional gain on disposal of $11.1 million in Other (expense)/income, net in the nine months to September 30, 2010.

The Vertex stock received has been accounted for as an available-for-sale investment.

9. Property, plant and equipment, net

	September 30,			December 31,
	2010			2009
		$’M			$’M
Land and buildings		523.6			398.7
Office furniture, fittings and equipment		296.1			280.5
Warehouse, laboratory and manufacturing equipment		115.1			114.5
Assets under construction		280.1			193.2
		1,214.9			986.9
Less: Accumulated depreciation		(396.3	)		(310.1	)
		818.6			676.8

Depreciation expense for the nine months to September 30, 2010 was $87.5 million (nine months to September 30, 2009: $77.5 million).

Purchase of the Lexington Technology Park campus in Lexington, Massachusetts

On June 30, 2010 Shire completed the purchase of certain properties on the Lexington Technology Park campus in Lexington, Massachusetts, some of which the Company had previously leased, for a cash purchase price of $165.0 million paid during the nine months to September 30, 2010. The purchase price of $165.0 million has been allocated to the acquired properties using a relative fair value approach: $121.9 million has been recorded as Property, plant and equipment, being land ($72.1 million) and buildings ($49.8 million). The remaining $43.1 million relates to the extinguishment of existing building finance obligations, and has been applied against the relevant financing obligations, (see note 13).

10. Other intangible assets, net

	September 30,			December 31,
	2010			2009
		$’M			$’M
Intellectual property rights acquired
Currently marketed products		2,216.6			2,351.6
IPR&D		6.1			6.1
Favorable manufacturing contracts		8.7			8.7
		2,231.4			2,366.4

Less: Accumulated amortization		(664.2	)		(575.7	)
		1,567.2			1,790.7

At September 30, 2010 the net book value of intangible assets allocated to the SP segment was $1,056.5 million (December 31, 2009: $1,238.0 million) and in the HGT segment was $510.7 million (December 31, 2009: $552.7 million).

The change in the net book value of other intangible assets for the nine months to September 30, 2010 is shown in the table below:

	Other intangible
	assets
		$’M

As at January 1, 2010		1,790.7
Acquisitions		2.7
Amortization charged		(100.9	)
Impairment on re-measurement of DAYTRANA to fair value less costs to sell		(42.7	)
Reclassification of DAYTRANA to assets held for sale		(56.0	)
Foreign currency translation		(26.6	)
As at September 30, 2010		1,567.2

The weighted average amortization period for acquired currently marketed products is 10 years.

Management estimates that the annual amortization charge in respect of intangible assets held at September 30, 2010 will be approximately $124 million for each of the five years to September 30, 2015; this estimate does not include amortization from intangible assets acquired with Movetis in the fourth quarter of 2010 as the purchase price allocation has not yet been completed. Estimated amortization expense can be affected by various factors including future acquisitions, disposals of product rights, regulatory approval and subsequent amortization of the acquired IPR&D projects, foreign exchange movements and the technological advancement and regulatory approval of competitor products.

11. Accounts payable and accrued expenses

	September 30,		December 31,
	2010		2009
		$’M		$’M
Trade accounts payable and accrued purchases		172.6		170.6
Accrued rebates – Medicaid		314.5		188.2
Accrued rebates – Managed care		180.5		153.4
Sales return reserve		75.2		62.7
Accrued bonuses		72.0		66.8
Accrued employee compensation and benefits payable		54.7		42.6
Research and development accruals		53.0		53.1
Marketing accruals		31.0		31.5
Deferred revenue		11.4		52.2
Other accrued expenses		133.2		108.0
		1,098.1		929.1

Accrued Medicaid rebates have increased by $126.3 million to $314.5 million at September 30, 2010 (December 31, 2009: $188.2 million) due to higher Medicaid rebates on higher product sales in 2010, and timing of Medicaid rebate payments.

Deferred revenue has reduced by $40.8 million to $11.4 million (December 31, 2009: $52.2 million) due to the recognition into revenue in the nine months to September 30, 2010 of INTUNIV launch stocking shipments which had initially been deferred.

12. Other current liabilities

	September 30,		December 31,
	2010		2009
		$’M		$’M
Income taxes payable		9.0		46.7
Value added taxes		12.7		10.3
Derivative financial instruments		23.3		1.2
Other accrued liabilities		25.2		29.8
		70.2		88.0

13. Other long-term debt

During 2007 and 2009 Shire entered into certain multi-year leases for its HGT business unit at North Reading and Lexington, Massachusetts. For some of these leases Shire was considered the in substance owner of the related properties over their construction period and as a result Shire recorded assets (being the fair value of the building element at inception of the relevant lease) within Property, plant and equipment and the corresponding building financing obligations were recorded within other long term debt. The land element of these leases was accounted for as an operating lease.

During the third quarter of 2009, on entering into certain of these leases Shire extended the term of the existing leases at Lexington Technology Park. This lease extension was accounted for as a substantial modification of the existing building finance obligation, whereby the existing liability was derecognized and a building financing obligation based on the fair

value of the liability under the revised lease terms recorded in its place. The substantial modification resulted in a non-cash gain of $5.7 million in the three and nine months to September 30, 2009 which was recorded to Other (expense)/income, net.

On June 30, 2010, as outlined in note 9, Shire completed the purchase of certain properties on the Lexington Technology Park campus, including the properties held under building finance obligations. Accordingly Shire applied $43.1 million of the purchase price for the Lexington campus to extinguish the existing building finance obligations, recognizing a loss of $3.6 million within Other (expense)/income, net in the nine months to September 30, 2010.

14. Other non-current liabilities

	September 30,		December 31,
	2010		2009
		$’M		$’M
Income taxes payable		116.3		170.4
Deferred revenue		14.6		20.0
Deferred rent		13.2		14.5
Insurance provisions		17.6		18.3
Other accrued liabilities		8.0		23.9
		169.7		247.1

15. Commitments and contingencies

(a) Leases

Future minimum lease payments under operating leases at September 30, 2010 are presented below:

	Operating
	leases
		$’M
2010		8.5
2011		32.2
2012		19.9
2013		17.7
2014		16.9
2015		14.5
Thereafter		35.9
		145.6

The Company leases land, facilities, motor vehicles and certain equipment under operating leases expiring through 2019. Lease and rental expense amounted to $23.7 million for the nine months to September 30, 2010 (nine months to September 30, 2009: $27.0 million), which is predominately included in Selling, general and administrative expenses in the consolidated statements of income.

(b) Letters of credit and guarantees

At September 30, 2010 the Company had irrevocable standby letters of credit and guarantees with various banks totaling $22.9 million, providing security for the Company’s performance of various obligations. These obligations are primarily in respect of the recoverability of insurance claims, lease obligations and supply commitments. The Company has restricted cash of $9.2 million, as required by these letters of credit.

Details of significant collaborative arrangements are included below:

In-licensing arrangements

(i) Collaboration with Acceleron Pharma Inc. (“Acceleron”) for activin receptor type IIB (“ActRIIB”) class of molecules

On September 9, 2010 Shire announced that it had expanded its HGT pipeline by acquiring an exclusive license in markets outside of North America for the ActRIIB class of molecules being developed by Acceleron. The collaboration will initially focus on further developing ACE-031, the lead ActRIIB drug candidate, which is currently in a Phase 2a trial, for the treatment of patients with Duchenne Muscular Dystrophy (“DMD”). ACE-031 and the other ActRIIB class of molecules have the potential to be used in other muscular and neuromuscular disorders with high unmet medical need.

In the three and nine months to September 30, 2010 Shire made an upfront payment of $45 million to Acceleron which has been expensed to R&D. Shire will pay Acceleron up to a further $165 million, subject to certain development, regulatory and sales milestones being met for ACE-031 in DMD, up to an additional $288 million for successful commercialization of other indications and molecules, and royalties on product sales.

Shire and Acceleron will conduct the collaboration through a joint steering committee, with subcommittees including a joint manufacture committee, and a joint patent committee to monitor the development of ACE-031 and other compounds.

(ii) Research Collaboration with Santaris Pharma A/S (“Santaris”) on Locked Nucleic Acid (“LNA”) Drug Platform

On August 24, 2009 Shire announced that it had entered into a research collaboration with Santaris, to develop its proprietary LNA technology in a range of rare diseases. LNA technology has the benefit of shortened target validation and proof of concept, potentially increasing the speed and lowering the cost of development. As part of the joint research project Santaris will design, develop and deliver pre-clinical LNA oligonucleotides for Shire-selected orphan disease targets, and Shire will have the exclusive right to further develop and commercialize these candidate compounds on a worldwide basis.

In the nine months to September 30, 2009 Shire made an upfront payment to Santaris of $6.5 million, for technology access and R&D funding, which was expensed to R&D. Shire has remaining obligations to pay Santaris $13.5 million subject to certain success criteria, and development and sales milestones up to a maximum of $72 million for each indication. Shire will also pay single or double digit tiered royalties on net sales of the product.

Shire and Santaris have formed a joint research committee to monitor R&D activities through preclinical lead candidate selection at which point all development and commercialization costs will be the responsibility of Shire.

(iii) JUVISTA

On June 19, 2007 Shire signed an agreement with Renovo Limited (“Renovo”) to develop and commercialize JUVISTA, Renovo’s novel drug candidate being investigated for the reduction of scarring in connection with surgery, outside of the EU. On March 1, 2010 the license agreement was revised.

In the revised license agreement, the rights to sell JUVISTA in all territories outside the US, Mexico and Canada were returned to Renovo. Milestone and royalty obligations remain unchanged from the original agreement except that Shire will pay Renovo an additional $5 million milestone if Shire elects to commence a clinical trial following Shire’s review of the clinical trial report from Renovo’s first EU Phase 3 clinical trial. Shire has remaining obligations to pay Renovo $25 million on the filing of JUVISTA with the 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.

Under the revised agreement, each party is responsible for its own development costs but future development costs can be shared by agreement. Each party has free-of-charge access to the other party’s data to support regulatory filings in their respective territories. In the nine months to September 30, 2010 Shire made a payment to Renovo of $3.2 million (2009: $3.2 million), being the final payment under the terms of the original license agreement.

Out-licensing arrangements

Shire has entered into various collaborative arrangements under which the Company has out-licensed certain product or intellectual property rights for consideration such as up-front payments, development milestones, sales milestones and/or royalty payments. In certain of these arrangements Shire and the licensee are both actively involved in the development and commercialization of the licensed product and have exposure to risks and rewards dependent on its commercial success. In the nine months to September 30, 2010 Shire received milestone payments totaling $nil (2009: $4.0 million). In the nine months to September 30, 2010 Shire recognized milestone income of $6.3 million (2009: $8.0 million) within Other revenues and $36.1 million (2009: $20.8 million) within Product sales for shipment of product to the relevant licensee.

Co-promotion agreements - VYVANSE

In the third quarter of 2010, Shire terminated its co-promotion agreement for VYVANSE with GSK. Under the terms of the agreement, no termination payment or any other payments were made or are due to GSK since agreed-upon sales thresholds were not achieved. The Company does not believe that the termination of the co-promotion agreement will impact the future performance of VYVANSE in the United States. Following Shire’s termination, GSK filed a lawsuit against Shire in the Philadelphia Court of Common Pleas relating to the co-promotion agreement. GSK is seeking compensation despite the failure to achieve the required sales thresholds. Shire believes that the lawsuit is frivolous and without merit, and Shire will vigorously defend itself.

(d) Commitments

(i) Clinical testing

At September 30, 2010 the Company had committed to pay approximately $141.5 million (December 31, 2009: $183.9 million) to contract vendors for administering and executing clinical trials. The Company expects to pay $79.9 million of these commitments in the remainder of 2010, however the timing of these payments is dependent upon actual services performed by the organizations as determined by patient enrollment levels and related activities.

(ii) Contract manufacturing

At September 30, 2010 the Company had committed to pay approximately $134.6 million (December 31, 2009: $152.3 million) in respect of contract manufacturing. The Company expects to pay all of these commitments in the remainder of 2010.

(iii) Other purchasing commitments

At September 30, 2010 the Company had committed to pay approximately $30.2 million (December 31, 2009: $22.9 million) for future purchases of goods and services, predominantly relating to active pharmaceutical ingredients sourcing and IT outsourcing. The Company expects to pay $23.9 million of these commitments in the remainder of 2010.

(iv) Investment commitments

At September 30, 2010 the Company had outstanding commitments to subscribe for interests in companies and partnerships for amounts totaling $5.5 million (December 31, 2009: $5.4 million) which may all be payable in the remainder of 2010, depending on the timing of capital calls.

(v) Capital commitments

At September 30, 2010 the Company had committed to spend $70.2 million (December 31, 2009: $41.4 million) on capital projects. This includes commitments for the expansion and modification of its offices and manufacturing facilities at the HGT campus in Lexington, Massachusetts.

(e) Legal and other proceedings

General

The Company recognizes loss contingency provisions 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 when a reasonable estimate can be made. The estimates are reviewed quarterly and 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, 2010 provisions for litigation losses, insurance claims and other disputes totaled $20.7 million (December 31, 2009: $20.1 million).

Specific

VYVANSE

On February 24, 2009 Actavis Elizabeth LLC brought a lawsuit in the US District Court for the District of Columbia (the “District Court”) against the FDA seeking to overturn the FDA's decision granting new chemical entity exclusivity to VYVANSE. Shire has intervened in the lawsuit. On October 23, 2009, following a period for public comment, the FDA issued a letter setting forth its analysis of the legal and regulatory issues and reaffirming its decision that VYVANSE is entitled to new chemical entity exclusivity. A hearing on cross-motions for summary judgment was held on February 17, 2010. On March 4, 2010 the District Court upheld the FDA’s decision that VYVANSE is entitled to 5-year market exclusivity and confirmed that the FDA’s actions complied with federal administrative law standards as a reasonable exercise of the agency’s scientific expertise. Actavis Elizabeth LLC has appealed the District Court’s ruling to the US Court of Appeals for the District of Columbia Circuit. A hearing was held on September 20, 2010. The Court of Appeals has not yet issued its decision.

FOSRENOL

In February 2009 Shire was notified that three separate Abbreviated New Drug Applications (“ANDAs”) were submitted under the Hatch-Waxman Act seeking permission to market generic versions of 500mg, 750mg and 1,000mg strengths of FOSRENOL. The notices were received from Barr; Mylan, Inc., Mylan Pharmaceuticals, Inc. and Matrix Laboratories, Inc. (collectively, “Mylan”); and Natco Pharma Limited (“Natco”). Within the requisite 45 day period, Shire filed lawsuits in the US District Court of the Southern District of New York against each of Barr, Mylan and Natco for infringement of certain of Shire’s FOSRENOL patents. The filing of the lawsuits triggered a stay of approval of these ANDAs for up to 30 months. The lawsuits have been consolidated into a single case. A Markman hearing was held on June 17, 2010. No trial date has been set.

INTUNIV

In March and April, 2010 Shire was notified that three separate ANDAs were submitted under the Hatch-Waxman Act seeking permission to market generic versions of 1mg, 2mg, 3mg, and 4mg strengths of INTUNIV. The notices were from Teva Pharmaceuticals USA, Inc. and Teva Pharmaceutical Industries, Ltd (collectively, “Teva”); Actavis Elizabeth LLC and Actavis Inc. (collectively, “Actavis”); and Anchen Pharmaceuticals, Inc. and Anchen, Inc. (collectively, "Anchen"). Within the requisite 45 days period, Shire filed lawsuits in the US District Court of the District of Delaware against each of Teva, Actavis and Anchen for infringement of certain of Shire’s INTUNIV patents. The filing of the lawsuits triggered a stay of approval of these ANDAs for up to 30 months. A Markman hearing is scheduled to occur on May 27, 2011. No trial date has been set.

On October 25, 2010 Shire received a Paragraph IV Notice Letter from Watson Pharmaceuticals, Inc. (“Watson”) advising of the filing of an ANDA for a generic version of the 4mg strength of INTUNIV.　Shire is currently reviewing the details of Watson's Paragraph IV Notice Letter which was directed to all three Orange Book listed patents for INTUNIV.

On October 29, 2010 Shire received a Paragraph IV Notice Letter from Impax Laboratories, Inc. (“Impax”) advising of the filing of an ANDA for a generic version of the 4mg strength of INTUNIV. Shire is currently reviewing the details of Impax's Paragraph IV Notice Letter which was directed to all three Orange Book listed patents for INTUNIV.

REPLAGAL

Mt. Sinai School of Medicine of New York University (“Mt. Sinai”) initiated lawsuits against Shire in Sweden on April 14, 2010 and in Germany on April 20, 2010 alleging that Shire’s enzyme replacement therapy for Fabry disease, REPLAGAL, infringes Mt. Sinai’s European Patent No. 1 942 189, granted April 14, 2010. Mt. Sinai is seeking an injunction against the use of REPLAGAL in these jurisdictions until expiration of the patent on November 30, 2013. Shire will defend its right to commercialize REPLAGAL in these countries and will vigorously oppose the validity of this patent.

LIALDA/MEZAVANT

In May 2010 Shire was notified that an ANDA was submitted under the Hatch-Waxman Act seeking permission to market a generic version of LIALDA. The notice was received from Zydus Pharmaceuticals USA, Inc. (“Zydus”). Within the requisite 45 days period, Shire filed a lawsuit in the US District Court of the District of Delaware against Zydus and Cadila Healthcare Limited, doing business as Zydus Cadila. The filing of the lawsuits triggered a stay of approval of the ANDA for up to 30 months. No trial date has been set.

ADDERALL XR

On November 1, 2010 Impax filed suit against Shire claiming that Shire is in breach of its supply contract for the authorized generic version of ADDERALL XR. Shire has been supplying Impax with authorized generic ADDERALL XR since October 1, 2009. Shire’s ability to supply this product, however, is limited by quota restrictions that the US Drug Enforcement Administration places on amphetamine, which is the product’s active ingredient. Impax is seeking specific performance, equitable relief and unspecified damages. Shire will defend the action.

Subpoena related to ADDERALL XR, DAYTRANA and VYVANSE

On September 23, 2009 the Company received a subpoena from the US Department of Health and Human Services Office of Inspector General in coordination with the US Attorney for the Eastern District of Pennsylvania seeking production of documents related to the sales and marketing of ADDERALL XR, DAYTRANA and VYVANSE. The Company is cooperating with this investigation.

16. Derivative instruments

Treasury policies and organization

The Company’s principal treasury operations are coordinated by its corporate treasury function. All treasury operations are conducted within a framework of policies and procedures approved annually by the Board of Directors. As a matter of policy, the Company does not undertake speculative transactions that would increase its currency or interest rate exposure.

Interest rate risk

The Company is exposed to interest rate risk on restricted cash, cash and cash equivalents and on foreign exchange contracts on which interest is at floating rates. This exposure is primarily to US dollar, Euro and Canadian dollar interest rates. As the Company maintains all of its cash and liquid investments and foreign exchange contracts on a short term basis for liquidity purposes, this risk is not actively managed. In the nine months to September 30, 2010 the average interest rate received on cash and cash equivalents was less than 1% per annum. The largest proportion of these cash and cash equivalents was in money market and liquidity funds.

The Company incurs interest at a fixed rate of 2.75% on Shire’s $1,100 million in principal amount convertible bonds due 2014. The building financing obligation of $7.3 million is also subject to a fixed interest rate over the lease term on the amount outstanding.

During the nine months to September 30, 2010 the Company did not enter into any derivative instruments to manage interest rate exposure. The Company continues to review its interest rate risk and the policies in place to manage the risk.

Market risk of investments

As at September 30, 2010 the Company has $89.1 million of investments comprising available-for-sale investments in publicly quoted companies ($74.7 million), equity method investments ($10.5 million) and cost method investments in private companies ($3.9 million). The investments in publicly quoted companies and equity method investments, for certain investment funds which contain a mixed portfolio of public and private investments, are exposed to market risk. No financial instruments or derivatives have been employed to hedge this risk.

Credit risk

Financial instruments that potentially expose Shire to concentrations of credit risk consist primarily of short-term cash investments, trade accounts receivable (from product sales and royalty receipts) and derivative contracts. Cash is invested in short-term money market instruments, including money market and liquidity funds and bank term deposits. The money market and liquidity funds in which Shire invests are all triple A rated by both Standard & Poor’s and by Moody’s credit rating agencies.

The Company is exposed to the credit risk of the counterparties with which it enters into derivative contracts. The Company aims to limit this exposure through a system of internal credit limits which require counterparties to have a long term credit rating of A / A2 or better from the major rating agencies. The internal credit limits are approved by the Board of Directors and exposure against these limits is monitored by the corporate treasury function. The counterparties to the derivative contracts are major international financial institutions.

The Company has entered into many agreements with third parties for the provision of services to enable it to operate its business. If the third party can no longer provide the service on the agreed basis, the Company may not be able to continue the development or commercialization of its products as planned or on a commercial basis. Additionally, it may not be able to establish or maintain good relationships with suppliers.

Foreign exchange risk

The Company trades in numerous countries and as a consequence has transactional and translational foreign exchange exposure.

Transactional exposure arises where transactions occur in currencies different to the functional currency of the relevant subsidiary. The main trading currencies of the Company are the US dollar, the Canadian dollar, Pounds Sterling and the Euro. It is the Company’s policy that these exposures are minimized to the extent practicable by denominating transactions in the subsidiary’s functional currency.

Where significant exposures remain, the Company uses foreign exchange contracts (being spot, forward and swap contracts) to manage the exposure for balance sheet assets and liabilities that are denominated in currencies different to the functional currency of the relevant subsidiary. These assets and liabilities relate predominantly to intercompany financing and accruals for royalty receipts, and at September 30, 2010 these financial assets also included restricted cash in respect of the purchase price for Movetis. The foreign exchange contracts have not been designated as hedging instruments. Cash flows from derivative instruments are presented within net cash provided by operating activities in the consolidated cash flow statement, unless the derivative instruments are economically hedging, investing or financing activities (such as restricted cash held for the acquisition of Movetis).

Translational foreign exchange exposure arises on the translation into US dollars of the financial statements of non-US dollar functional subsidiaries.

At September 30, 2010 the Company had 41 swap and forward foreign exchange contracts outstanding to manage currency risk. The swaps and forward contracts mature within 90 days. The Company did not have credit risk related contingent features or collateral linked to the derivatives. These foreign exchange contracts were classified in the consolidated balance sheet as follows:

		Fair value		Fair value
		September 30,		December 31,
		2010		2009
			$’M		$’M
Assets	Prepaid expenses and other current assets		0.8		5.4
Liabilities	Other current liabilities		23.3		1.2

Net losses (both realized and unrealized) arising on foreign exchange contracts have been classified in the consolidated statements of income as follows:

	Location of net loss recognized in income	Amount of net loss recognized in income
Nine months to		September 30,			September 30,
		2010			2009
			$’M			$’M
Foreign exchange contracts	Other (expense)/income, net		(21.3	)		(56.5	)

These net foreign exchange losses are offset within Other (expense)/income, net by net foreign exchange gains arising on the balance sheet items that these contracts were put in place to manage.

17. Fair value measurement

Assets and liabilities that are measured at fair value on a recurring basis

The following financial assets and liabilities are measured at fair value on a recurring basis using quoted prices in active markets for identical assets (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3).

	Carrying		Fair value
	value
			Total		Level 1		Level 2		Level 3
	$'M		$'M		$'M		$'M		$'M
Financial assets:
Available-for-sale securities(1)		74.7		74.7		74.7		-		-
Foreign exchange contracts		0.8		0.8		-		0.8		-

Financial liabilities:
Foreign exchange contracts		23.3		23.3		-		23.3		-

(1) Available-for-sale securities are included within Investments in the consolidated balance sheet.

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:

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

Foreign exchange contracts – the fair values of the swap and forward foreign exchange contracts have been determined using an income approach based on current market expectations about the future cash flows.

Assets and liabilities that have been measured at fair value on a non-recurring basis (after initial recognition)

As outlined in Note 6, in the third quarter of 2010, on reclassification to Assets held for sale the Company re-measured its DAYTRANA intangible asset to its fair value less costs to sell, and an impairment loss of $42.7 million was recognized. The fair value of the intangible asset was estimated using the income approach (using a discounted cash flow method). The fair value measurement falls within Level 3 of the fair value hierarchy as the discounted cash flow estimates used

significant unobservable inputs, such as revenue forecasts for DAYTRANA which affect the value of the resultant contingent consideration receivable, estimates of market participant’s tax rates and the weighted average cost of capital.

Fair Value at Measurement Date

Total

Level 1

Level 2

Level 3

$'M

DAYTRANA intangible asset held for sale

56.0

Financial assets and liabilities that are not measured at fair value on a recurring basis

The carrying amounts and estimated fair values as at September 30, 2010 and December 31, 2009 of the Company’s financial assets and liabilities which are not measured at fair value on a recurring basis are as follows:

September 30, 2010

December 31, 2009

Carrying

amount

Fair value

amount

Fair value

$’M

Financial liabilities:

Convertible bonds

1,100.0

1,108.0

1,100.0

1,067.0

Building financing obligation

7.3

8.7

46.7

47.3

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

Convertible bonds – the fair value of Shire’s $1,100 million 2.75% convertible bonds due 2014 is determined by reference to the market price of the instrument as the convertible bonds are publicly traded.

Building finance obligations - the fair value of building finance obligations are estimated based on the present value of future cash flows, and an estimate of the residual value of the underlying property at the end of the lease term, associated with these obligations.

The carrying amounts of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses approximate to fair value because of the short-term maturity of these amounts.

18. Earnings per share

The following table reconciles net income attributable to Shire plc and the weighted average ordinary shares outstanding for basic and diluted earnings per share for the periods presented:

	3 months to		3 months to		9 months to		9 months to
	September 30,		September 30,		September 30,		September 30,
	2010		2009		2010		2009
Amounts attributable to Shire plc shareholders		$’M		$’M		$’M		$’M
Numerator for basic earnings per share		96.3		59.6		422.7		317.3
Interest on convertible bonds, net of tax (1)		-		-		25.2		-
Numerator for diluted earnings per share		96.3		59.6		447.9		317.3


Weighted average number of shares:
	Millions		Millions		Millions		Millions
Basic(2)		547.0		540.6		546.1		540.0
Effect of dilutive shares:
Share based awards to employees(3)		9.7		7.7		10.4		7.1
Convertible bonds 2.75% due 2014(4)		-		-		33.2		-
Diluted		556.7		548.3		589.7		547.1

(1) For the three month period ended September 30, 2010 and three and nine month periods ended September 30, 2009 interest on the convertible bond has not been added back as the effect would be anti-dilutive.

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

(3) Calculated using the treasury stock method.

(4) Calculated using the ‘if-converted’ method.

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

	3 months to		3 months to		9 months to		9 months to
	September 30,		September 30,		September 30,		September 30,
	2010 (1) (2)		2009 (1) (2)		2010 (1)		2009 (1) (2)
	No. of shares		No. of shares		No. of shares		No. of shares
	Millions		Millions		Millions		Millions
Share awards out of the money		3.6		16.8		8.9		18.0
Convertible bonds 2.75% due 2014		33.2		33.2		-		33.1

(1) For the three and nine month periods ended September 30, 2010 and 2009, 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 month period ended September 30, 2010 and three and nine month periods ended September 30, 2009 the ordinary shares underlying the convertible bonds have not been included in the calculation of the diluted weighted average number of shares, as the effect of their inclusion would be anti-dilutive.

19. Segmental reporting

Shire’s internal financial reporting is in line with its business unit and management reporting structure and includes two segments: SP and HGT. The SP and HGT reportable segments represent the Company’s revenues and costs for 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 or allocable to the segments have been separately disclosed.

	SP		HGT		All Other			Total
3 months to September 30, 2010		$’M		$’M		$’M			$’M
Product sales		553.0		241.3		-			794.3
Royalties		35.7		-		40.8			76.5
Other revenues		1.5		0.6		1.4			3.5
Total revenues		590.2		241.9		42.2			874.3

Cost of product sales(1)		82.2		29.0		1.5			112.7
Research and development(1)		87.2		110.0		0.7			197.9
Selling, general and administrative(1)		284.8		66.8		40.8			392.4
Reorganization costs		2.7		-		7.0			9.7
Integration and acquisition costs		5.8		-		-			5.8
Total operating expenses		462.7		205.8		50.0			718.5
Operating income/(loss)		127.5		36.1		(7.8	)		155.8

Total assets		2,030.4		1,706.5		1,364.7			5,101.6
Long-lived assets(2)		159.9		615.9		46.0			821.8
Capital expenditure on long-lived assets(2)		3.1		39.1		3.3			45.5

(1)

Depreciation from manufacturing plants ($8.5 million) and amortization of favorable manufacturing contracts ($0.4 million) is included in Cost of product sales; depreciation of research and development assets ($4.4 million) is included in Research and development; and all other depreciation, amortization and impairment charges ($90.0 million) is included in Selling, general and administrative.

(2)	Long-lived assets comprise all non-current assets (excluding goodwill and other intangible assets, deferred tax assets, investments, income tax receivable and financial instruments).

	SP			HGT			All Other		Total
3 months to September 30, 2009		$’M			$’M			$’M		$’M
Product sales		461.5			141.0			-		602.5
Royalties		6.2			-			54.1		60.3
Other revenues		1.6			0.4			2.2		4.2
Total revenues		469.3			141.4			56.3		667.0

Cost of product sales(1)		71.6			29.2			4.1		104.9
Research and development(1)		75.6			70.9			1.3		147.8
Selling, general and administrative(1)		239.4			46.3			34.9		320.6
Gain on sale of product rights		(6.3	)		-			-		(6.3	)
Reorganization costs		2.0			-			-		2.0
Integration and acquisition costs		0.7			5.5			-		6.2
Total operating expenses		383.0			151.9			40.3		575.2
Operating income/(loss)		86.3			(10.5	)		16.0		91.8

Total assets		2,216.3			1,351.3			859.9		4,427.5
Long-lived assets(2)		203.7			374.8			55.4		633.9
Capital expenditure on long-lived assets(2)		11.4			53.1			2.6		67.1

(1)

Depreciation from manufacturing plants ($5.3 million) and amortization of favorable manufacturing contracts ($0.4 million) is included in Cost of product sales; depreciation of research and development assets ($3.6 million) is included in Research and development; and all other depreciation and amortization ($53.3 million) is included in Selling, general and administrative.

(2)	Long-lived assets comprise all non-current assets (excluding goodwill and other intangible assets, deferred tax assets, investments, income tax receivable and financial instruments).

	SP			HGT		All Other			Total
9 months to September 30, 2010		$’M			$’M		$’M			$’M
Product sales		1,645.7			631.1		-			2,276.8
Royalties		138.5			-		116.0			254.5
Other revenues		2.7			2.0		3.9			8.6
Total revenues		1,786.9			633.1		119.9			2,539.9

Cost of product sales(1)		247.2			85.0		1.5			333.7
Research and development(1)		245.7			229.3		0.9			475.9
Selling, general and administrative(1)		771.0			191.5		144.2			1,106.7
Gain on sale of product rights		(4.1	)		-		-			(4.1	)
Reorganization costs		9.3			-		14.0			23.3
Integration and acquisition costs		6.4			-		-			6.4
Total operating expenses		1,275.5			505.8		160.6			1,941.9
Operating income/(loss)		511.4			127.3		(40.7	)		598.0

Total assets		2,030.4			1,706.5		1,364.7			5,101.6
Long-lived assets(2)		159.9			615.9		46.0			821.8
Capital expenditure on long-lived assets(2)		8.2			226.5		7.2			241.9

(1)

Depreciation from manufacturing plants ($26.9 million) and amortization of favorable manufacturing contracts ($1.3 million) is included in Cost of product sales; depreciation of research and development assets ($11.6 million) is included in Research and development; and all other depreciation, amortization and impairment charges ($191.3 million) is included in Selling, general and administrative.

(2)	Long-lived assets comprise all non-current assets (excluding goodwill and other intangible assets, deferred tax assets, investments, income tax receivable and financial instruments).

	SP			HGT			All Other		Total
9 months to September 30, 2009		$’M			$’M			$’M		$’M
Product sales		1,521.2			395.6			-		1,916.8
Royalties		23.1			-			154.7		177.8
Other revenues		9.8			2.2			7.8		19.8
Total revenues		1,554.1			397.8			162.5		2,114.4

Cost of product sales(1)		202.9			70.9			11.1		284.9
Research and development(1)		297.3			188.5			6.7		492.5
Selling, general and administrative(1)		705.2			140.2			128.4		973.8
Gain on sale of product rights		(6.3	)		-			-		(6.3	)
Reorganization costs		7.1			-			-		7.1
Integration and acquisition costs		2.2			7.8			-		10.0
Total operating expenses		1,208.4			407.4			146.2		1,762.0
Operating income/(loss)		345.7			(9.6	)		16.3		352.4

Total assets		2,216.3			1,351.3			859.9		4,427.5
Long-lived assets(2)		203.7			374.8			55.4		633.9
Capital expenditure on long-lived assets(2)		32.4			127.3			9.3		169.0

(1)

Depreciation from manufacturing plants ($16.9 million) and amortization of favorable manufacturing contracts ($1.3 million) is included in Cost of product sales; depreciation of research and development assets ($11.3 million) is included in Research and development; and all other depreciation and amortization ($150.9 million) is included in Selling, general and administrative.

(2)	Long-lived assets comprise all non-current assets (excluding goodwill and other intangible assets, deferred tax assets, investments, income tax receivable and financial instruments).

20. Share-based compensation plans

The Company grants stock-settled share appreciation rights (“SARs”) and performance share awards (“PSAs”) over ordinary shares and ADSs under the Shire Portfolio Share Plan (Parts A and B) to Executive Directors and employees. In the nine months to September 30, 2010 the Company amended the rules of the Shire Portfolio Share Plan effective on a prospective basis for newly granted awards. After this amendment SARs and PSAs granted under the Shire Portfolio Share Plan (Part A & B) to Executive Directors are exercisable subject to performance and service criteria.

The amendments had the following principal effect on the terms and conditions of SARs and PSAs: i) the contractual life of SARs has been extended from five to seven years, ii) the vesting period of SARs and PSAs granted to employees below the level of Executive Vice President allows for graded vesting rather than mandatory cliff vesting, and iii) awards granted to Executive Directors contain performance conditions based on return on invested capital and earnings, rather than the previous condition of total shareholder return. In the nine months to September 30, 2010 the Company has not recorded any significant incremental compensation costs as a result of the above amendments.

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

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

Overview

Shire’s mission is to be the most valuable specialty biopharmaceutical company in the world, focused on enabling people with life altering conditions to lead better lives. Shire focuses its business on ADHD, HGT and GI areas 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 strategically aligned and relatively small-scale sales forces will deliver strong results.

Significant events in the three months to September 30, 2010 and recent developments

Products

PENTASA – for the treatment of Ulcerative Colitis

On August 24, 2010 Shire received a ruling from the US Food and Drug Administration (“FDA”) on its Citizen Petition relating to PENTASA. The ruling granted Shire’s request with regard to the requirement that bioequivalence to PENTASA be shown by dissolution testing and further imposed a requirement for rigorous pharmacokinetic data. The ruling denied the request that studies with clinical outcomes endpoints also be required because the FDA concluded that comparative clinical endpoint studies would be less sensitive, accurate and reproducible than pharmacokinetic studies.

RESOLOR – for the treatment of chronic constipation in women

·	Through its acquisition of Movetis, Shire has expanded its GI presence in Europe with the recently launched RESOLOR, a new chemical entity. RESOLOR is approved in the 27 countries of the EU, Switzerland, Iceland, Lichtenstein and Norway.

REPLAGAL – for the treatment of Fabry disease

REPLAGAL is now the global market leader for the treatment of Fabry disease. Shire’s continuing priority is to ensure long term, uninterrupted supply at the approved dose to patients treated with REPLAGAL. There are over 2,300 patients on REPLAGAL worldwide and Shire anticipates being able to continue to accommodate additional Fabry patients in 2010 while carefully monitoring supply and demand. Shire will be in a position to make REPLAGAL available to at least 300 additional patients in 2011, phased throughout the year, based on current manufacturing capacity. Approval of the new Lexington manufacturing facility will allow treatment of several hundred more Fabry patients with REPLAGAL, and Shire is working closely with the authorities towards this goal.

VPRIV – for the treatment of Type 1 Gaucher disease

·	On August 26, 2010 the European Commission granted Shire marketing authorization for VPRIV, an ERT for the long-term treatment of Type 1 Gaucher disease. VPRIV has been authorized as an orphan medicine through the Centralized Procedure, making it available in 30 countries across Europe.

Shire has seen rapid adoption of VPRIV worldwide. There are currently over 1,000 Gaucher patients treated with VPRIV and initiation of treatment continues. Based on its current manufacturing capacity, Shire anticipates being able to accommodate approximately 200 additional Gaucher patients until the approval of the Lexington manufacturing facility provides substantial additional capacity. Shire has an ongoing program to monitor demand and manage requests for VPRIV. Shire’s priority is ensuring long-term, uninterrupted treatment of patients on therapy.

FIRAZYR – for the treatment of hereditary angiodema (“HAE”)

·	In October 2010, Shire submitted data to support a change in the label in the EU to include the potential for self-administered subcutaneous injections of FIRAZYR in patients who are experiencing acute attacks of HAE.

Pipeline

Collaboration with Acceleron for ActRIIB molecules

On September 9, 2010 Shire announced the expansion of its HGT pipeline through the exclusive licence, in markets outside of North America, for the ActRIIB class of molecules being developed by Acceleron. The collaboration will initially investigate ACE-031, Acceleron’s lead ActRIIB drug candidate, which is currently in a Phase 2a trial for the treatment of patients with DMD. ACE-031 and other ActRIIB molecules have the potential to be used in other muscular and neuromuscular disorders with high unmet medical need. Going forward, Shire will refer to ACE-031 as HGT-4510.

Pipeline obtained through the Movetis acquisition

The acquisition of Movetis brings to Shire a promising GI pipeline, offering additional opportunities that include two projects in early clinical development and several pre-clinical leads as well as the rights to a large library of qualified lead compounds with potential for development in different GI indications.

VYVANSE – for the adjunctive therapy in the treatment of inadequate response in Major Depressive Disorder (“MDD”)

On October 29, 2010 Shire announced positive results from a Phase 2 clinical trial of VYVANSE as adjunctive therapy for patients who have had an inadequate response in their treatment of MDD. Given the encouraging results and the promise to treat a large unmet medical need, Shire will initiate Phase 3 trials of VYVANSE in patients with MDD mid 2011, following health authority meetings to establish the development program parameters. Phase 2 clinical trials in additional non-ADHD indications (treatment of negative symptoms and cognitive impairment in schizophrenia and for the treatment of cognitive impairment in depression) remain ongoing.

SPD535 for the treatment of arteriovenous grafts in hemodialysis patients

SPD 535 is a novel platelet reducing agent. Phase 1 development was initiated in the third quarter of 2009 and is ongoing. Data from Phase 1 clinical trials demonstrating positive proof-of-principle have been completed. The initial Phase 2 proof-of-concept program will target prevention of thrombotic complications associated with arteriovenous grafts in hemodialysis patients. Additional Phase 2 proof-of-concept clinical trials will also be initiated to assess opportunities in other indications.

INTUNIV for ADHD in the EU

·	A clinical program to support the filing of a Marketing Authorization Approval (“MAA”) for INTUNIV for the treatment of ADHD in children aged 6 to 17 in the EU has been initiated. Shire anticipates submission of the regulatory filing for INTUNIV in Europe will occur in 2013.

Other developments

Acquisition of Movetis

·	On September 6, 2010 Shire launched a voluntary public takeover offer for all the shares and warrants in Movetis, a Belgium-based speciality GI company, for a fully diluted equity purchase price of €428 million (or €19 per share) in cash, equivalent to $592 million at closing of the transaction.

Divestment of DAYTRANA

On August 10, 2010 Shire announced the divestment of DAYTRANA® (methylphenidate transdermal system) to Noven. The divestment became effective on October 1, 2010. Following the decision to divest DAYTRANA, Shire recognised an impairment charge of $43 million to write-down its DAYTRANA intangible asset to its fair value less costs to sell.

Co-promotion for VYVANSE with GSK

Following Shire’s termination, GSK filed a lawsuit against Shire in the Philadelphia Court of Common Pleas relating to the co-promotion agreement. GSK is seeking compensation despite the failure to achieve the required sales thresholds. Shire believes that the lawsuit is frivolous and without merit, and Shire will vigorously defend itself.

Paragraph IV Notice Letter for INTUNIV

On October 25, 2010 Shire received a Paragraph IV Notice Letter from Watson advising of the filing of an ANDA for a generic version of the 4mg strength of INTUNIV. Shire is currently reviewing the details of Watson's Paragraph IV Notice Letter which was directed to all three Orange Book listed patents for INTUNIV.

On October 29, 2010 Shire received a Paragraph IV Notice Letter from Impax advising of the filing of an ANDA for a generic version of the 4mg strength of INTUNIV. Shire is currently reviewing the details of Impax's Paragraph IV Notice Letter which was directed to all three Orange Book listed patents for INTUNIV.

Legal proceedings

Research and development

Products in registration as at September 30, 2010

VYVANSE – for the treatment of ADHD

A supplemental New Drug application (“sNDA”) was submitted to the FDA on January 14, 2010 to seek approval for VYVANSE for the treatment of ADHD in adolescents.

INTUNIV – for the treatment of ADHD

A sNDA was submitted to the FDA on April 28, 2010 to seek approval for INTUNIV as adjunctive treatment with long-acting oral stimulants for the treatment of ADHD in children and adolescents.

LIALDA for the maintenance of remission in ulcerative colitis in the US and Canada

On June 14, 2010 Shire submitted a sNDA and supplemental New Drug Submission (“sNDS”) to the FDA and Health Canada to seek approval for LIALDA for the maintenance of remission of ulcerative colitis. The product was indicated for the maintenance of remission in patients who have ulcerative colitis on approval in the EU.

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

Shire is continuing to explore the regulatory pathway required to secure a label extension for FOSRENOL to treat hyperphosphataemia in pre-dialysis CKD in the US.

REPLAGAL – for the treatment of Fabry disease

Shire filed a Biologics License Application (“BLA”) for REPLAGAL in December 2009, and in the first quarter of 2010 the FDA requested additional pharmacokinetic comparability data. As a result of this request, Shire withdrew its December BLA filing, and, at the suggestion of the FDA, requested and received Fast Track designation. Shire initiated a rolling submission of a REPLAGAL BLA. On August 3, 2010 Shire withdrew the BLA for REPLAGAL in order to consider updating the submission with additional clinical data.

REPLAGAL is currently approved for the treatment of Fabry disease in 45 countries and was made available to US patients free of charge starting in December 2009 under an FDA-approved treatment protocol filed at the request of FDA. This protocol is now closed to enrolment. The Company has reached the maximum number of emergency Investigational New Drug requests which it can support in the US.

Products in clinical development as at September 30, 2010

Phase 3

VYVANSE for ADHD in EU

VYVANSE for the treatment of ADHD in children aged 6 to 17 in the EU is in Phase 3 development. Shire anticipates submission of the regulatory filing for VYVANSE in Europe will occur in 2011.

INTUNIV for ADHD in EU

INTUNIV for the treatment of ADHD in children aged 6 to 17 in the EU is in Phase 3 development. Shire anticipates submission of the filing of a MAA for INTUNIV in Europe will occur in 2013.

LIALDA/MEZAVANT for the treatment of diverticulitis

LIALDA/MEZAVANT is being investigated as a treatment to prevent recurrent attacks of diverticulitis. Phase 3 worldwide clinical trials investigating the use of the product for the treatment of diverticulitis were initiated in 2007 and are ongoing. Enrolment in these trials has completed and data is estimated to be available in 2012 following the completion of a 2 year dosing regimen.

XAGRID for the treatment of essential thrombocythaemia in Japan

A Phase 3 clinical program has been initiated to assess the efficacy and safety of XAGRID in adult essential thrombocythaemia patients treated with cytoreductive therapy who have become intolerant to their current therapy or whose platelet counts have not been reduced to an acceptable level.

FIRAZYR for HAE in the US

Prior to its acquisition by Shire, Jerini received a not approvable letter for FIRAZYR from the FDA. Shire has agreed with the FDA that an additional clinical study would be required and that a response to the not approvable letter would be filed after completion of this study.

In June 2009 Shire initiated a Phase 3 study in patients with acute attacks of HAE, known as the FAST-3 trial, which is designed to support filing of a New Drug Application for FIRAZYR in the US in early 2011. This trial is fully enrolled.

Phase 2

VYVANSE for the treatment of inadequate response in MDD

A Phase 3 program to assess the efficacy and safety of VYVANSE in patients with MDD will be initiated in mid 2011, following health authority meetings to establish the development program parameters.

VYVANSE for the treatment of non ADHD indications in adults

Shire is conducting Phase 2 pilot clinical trials to assess the efficacy and safety of VYVANSE for the treatment of negative symptoms and cognitive impairment in schizophrenia and for the treatment of cognitive impairment in depression.

M0002 for the treatment of ascites

M0002 was added to Shire’s SP portfolio as a part of the acquisition of Movetis and indicated to be in Phase 2 clinical development for the treatment of ascites.

M0003 for the treatment of refractory gastoesophageal refllux disease (“GERD”)

M0003, a novel 5HT4 antagonist, was added to Shire’s SP portfolio as a part of the acquisition of Movetis and indicated to be in Phase 2 clinical development for the treatment of refractory GERD.

HGT-4510 for DMD

HGT-4510 (also referred to as ACE-031) was added to the Shire HGT portfolio through an exclusive license in markets outside of North America for ActRIIB class of molecules being developed by Acceleron. The lead ActRIIB drug candidate HGT-4510 is currently in Phase 2a for the treatment of patients with DMD.

Phase 1

SPD 535 for the treatment of arteriovenous grafts in hemodialysis patients

SPD 535 is in development as a novel platelet lowering agent. Phase 1 development was initiated in the third quarter of 2009 and is ongoing. Data from Phase 1 clinical trials demonstrating positive proof-of-principle have been completed. The initial proof-of-concept program will target prevention of thrombotic complications associated with arteriovenous grafts in hemodialysis patients. Additional Phase 2 proof-of-concept clinical trials will also be initiated to assess opportunities in potential alternative indications.

SPD 547 (Guanfacine CarrierWave, GCW) for the treatment of ADHD.

SPD 547 is in early stage development for the treatment of ADHD. The Phase 1 program is ongoing with results expected throughout 2011. GCW could potentially improve on the current guanfacine profile to minimize known food, GI and sedation effects.

HGT-2310 for the treatment of Hunter syndrome with central nervous system (“CNS”) symptoms, idursulfase-IT (intrathecal delivery)

HGT 2310 is in development as an ERT delivered intrathecally for Hunter syndrome patients with CNS symptoms. The Company initiated a Phase 1/2 clinical trial in the first quarter of 2010. This product has been granted orphan designation in the US.

HGT-1410 for Sanfilippo A Syndrome (Mucopolysaccharidosis IIIA)

HGT-1410 is in development as an ERT delivered intrathecally for the treatment of Sanfilippo A Syndrome (Mucopolysaccharidosis IIIA), a lysosomal storage disorder. The product has been granted orphan drug designation in the US and in the EU. The Company initiated a Phase 1/2 clinical trial in August 2010.

Products in pre-clinical development as at September 30, 2010

HGT-1110 - for the treatment of Metachromatic Leukodystrophy

Development of a formulation of HGT-1110, expressed from Shire’s human cell platform and suitable for direct delivery to the CNS, is ongoing, and preclinical studies are planned for 2010. The Shire platform for direct delivery of proteins to the CNS was advanced in 2010 with the initiation of intrathecal delivery of idursulfase in the Phase 1/2 study in Hunter Syndrome, and with the initiation of a Phase 1/2 trial in Sanfilippo A. This product has been granted orphan drug designation in the US.

HGT-2610 for the treatment of Globoid cell leukodystrophy (“GLD”)

HGT 2610 was in early development as an ERT for the treatment of GLD, a lysosomal storage disorder. This program has been suspended, due to the lower observed incidence of infantile-onset GLD coupled with the rapidly progressive nature of the disease, which challenged the feasibility of clinical development.

Other pre-clinical development projects

A number of additional projects are underway in various stages of pre-clinical development for the SP and HGT area, including potential programs leveraging CarrierWave technology, which are primarily focused in the areas of pain. More data on these programs is expected throughout 2011.

Results of operations for the three months to September 30, 2010 and 2009

The Company’s management analyzes product sales growth for certain products sold in markets outside of the US on a constant exchange rate (“CER”) basis, so that product sales growth can be considered excluding movements in foreign exchange rates. Product sales growth on a CER basis is a Non-GAAP financial measure (“Non-GAAP CER”), computed by comparing 2010 product sales restated using 2009 average foreign exchange rates to 2009 actual product sales. Average exchange rates for the three and nine months to September 30, 2010 were $1.55:£1.00 and $1.29:€1.00 (2009: $1.64:£1.00 and $1.43:€1.00) and $1.54:£1.00 and $1.32:€1.00 (2009: $1.54:£1.00 and $1.37:€1.00) respectively.

Financial highlights for the three months to September 30, 2010 are as follows:

·	Product sales were up 32% to $794 million (2009: $603 million) due to growth from both sales excluding ADDERALL XR (“Core Product Sales”) (up 31% to $694 million) and ADDERALL XR, (up 41% to $100 million). On a Non-GAAP CER basis, Core Product Sales were up 34%.

·	Core Products Sales growth was driven by both existing and newly launched products, particularly REPLAGAL (up 91% to $92 million; Non-GAAP CER: up 103%), VYVANSE (up 17% to $151 million) and the recently launched VPRIV ($50 million) and INTUNIV ($37 million).

·	Total revenues were up 31% (Non-GAAP CER: up 34%) to $874 million (2009: $667 million), as a result of higher product sales and higher royalty income on authorized generic sales of ADDERALL XR compared to the third quarter of 2009.

Operating income increased by $64 million, or 70%, to $156 million (2009: $92 million) as the increased investments the Company is making in its research and development (“R&D”) programs and selling, general and administrative (“SG&A”) activities to support recent growth were more than offset by higher revenues compared to 2009. In the three months to September 30, 2010 operating expenses also included the up-front payment of $45 million to Acceleron in relation to the collaboration for the ActRIIB class of molecules and impairment charges of $43 million following the decision to divest DAYTRANA to Noven.

Results of operations for the three months to September 30, 2010 and 2009

Total revenues

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

	3 months to		3 months to
	September 30,		September 30,
	2010		2009		change
	$'M		$'M		%
Product sales		794.3		602.5		+32
Royalties		76.5		60.3		+27
Other revenues		3.5		4.2		-17
Total		874.3		667.0		+31

Product sales

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

	3 months to		3 months to
	September 30,		September 30,		Product sales		Non-GAAP CER		US prescription			Exit market
	2010		2009		growth		growth		growth1			share1
	$'M		$'M		%		%		%			%
Specialty Pharmaceuticals
ADHD
VYVANSE		151.2		129.0		+17		+17		+28			15
ADDERALL XR		99.7		70.9		+41		+40		+1			7
INTUNIV		37.3		-		n/a		n/a		n/a			3
DAYTRANA		14.7		17.4		-16		-16		-13			1
EQUASYM		5.7		9.2		-38		-34		n/a			n/a	2

GI
LIALDA / MEZAVANT		76.0		65.4		+16		+17		+16			19
PENTASA		57.1		51.3		+11		+11		-5			15

General Products
FOSRENOL		45.2		47.7		-5		-1		-17			7
CALCICHEW		9.9		12.4		-20		-15		n/a			n/a	2
CARBATROL		20.3		20.8		-2		-2		-8			58
REMINYL/REMINYL XL		9.1		10.5		-13		-9		n/a			n/a	2
XAGRID		20.5		21.5		-5		+4		n/a			n/a	2
Other product sales		6.3		5.4		+17		+15		n/a			n/a
		553.0		461.5		+20
Human Genetic Therapies
ELAPRASE		96.8		90.9		+7		+11		n/a	2		n/a	2
REPLAGAL		92.1		48.3		+91		+103		n/a	3		n/a	3
VPRIV		49.5		-		n/a		n/a		n/a			n/a	2
FIRAZYR		2.9		1.8		+61		+73		n/a	3		n/a	3
		241.3		141.0		+71
Total product sales		794.3		602.5		+32

(1)	Data provided by IMS Health National Prescription Audit (“IMS NPA”). Exit market share represents the average monthly US market share in the month ended September 30, 2010.

(2)	IMS NPA Data not available.

(3)	Not sold in the US in the third quarter of 2010.

Specialty Pharmaceuticals

VYVANSE – ADHD

The increase in VYVANSE product sales was principally due to a 28% increase in US prescription demand, from both 13% growth in the US ADHD market and an increase in VYVANSE’s share of that market. Price increases taken since the third quarter of 2009 also contributed to the product sales growth.

Product sales growth was lower than prescription growth due to higher sales deductions, principally increased Medicaid rebates following US Healthcare Reform, and decreases in wholesaler inventories, or “de-stocking”, at the end of the third quarter of 2010 (de-stocking in the third quarter of 2010 was equivalent to $12 million of gross sales compared to stocking of $4 million in the same period in 2009).

Litigation proceedings regarding VYVANSE are ongoing. Further information about this litigation can be found in PART I: ITEM 1 of this Form 10-Q.

ADDERALL XR – ADHD

ADDERALL XR product sales increased as a result of slightly higher US prescription demand, lower sales deductions in the third quarter of 2010 compared to the same period in 2009 and the effect of stocking in the third quarter of 2010.

Sales deductions represented 60% of branded ADDERALL XR gross sales in the third quarter of 2010 (2009: 73%). Medicaid rebates were accrued at a higher level in the third quarter of 2009 as sales deductions for that quarter did not reflect the benefit of the change in the estimate of the Medicaid rebate liability recorded in the fourth quarter of 2009. Additionally, sales deductions in the third quarter of 2010 were reduced following refinements to Medicaid rebate liability estimates made in earlier quarters.

ADDERALL XR product sales in the third quarter of 2010 also benefited from a 1% increase in US prescription demand, as US ADHD market growth of 13% more than offset the decline in ADDERALL XR’s market share (7% in the third quarter of 2010 compared to 8% in the third quarter of 2009).

Litigation proceedings regarding ADDERALL XR are ongoing. Further information about this litigation can be found in PART I: ITEM 1 of this Form 10-Q.

INTUNIV – ADHD

US prescription demand for INTUNIV increased by 29% in the third quarter of 2010 compared to the second quarter of 2010, leading to product sales of $37 million. Product sales in the second quarter of 2010 of $51 million included $16 million of net sales from initial stocking shipments made in 2009 (“Launch Stocks”) which had been deferred in accordance with Shire’s accounting policy. All revenue from Launch Stocks had been recognized by June 30, 2010.

Excluding revenue from Launch Stocks, product sales increased by 6% in the third quarter compared to the second quarter of 2010. This increase in product sales was lower than the growth in US prescription demand due to higher sales deductions, principally as a result of US Healthcare Reform.

Litigation proceedings regarding Shire’s INTUNIV patents are ongoing. Further information about this litigation can be found in PART I: ITEM 1 of this Form 10-Q.

LIALDA/MEZAVANT – Ulcerative colitis

Product sales for LIALDA/MEZAVANT continued to grow in the third quarter of 2010, driven by increased US prescription demand as a result of higher US market share and price increases taken since the third quarter of 2009, which were partially offset by higher sales deductions compared to the same period in 2009.

Litigation proceedings regarding Shire’s LIALDA/MEZAVANT patents are ongoing. Further information about this litigation can be found in PART I: ITEM 1 of this Form 10-Q.

PENTASA – Ulcerative colitis

The growth in PENTASA product sales was due to price increases taken since the third quarter of 2009, which more than offset lower US prescription demand.

FOSRENOL – Hyperphosphatemia

Product sales of FOSRENOL in the EU decreased primarily due to mandatory price reductions taken in 2010. Product sales of FOSRENOL in the US decreased due to lower US prescription demand and higher sales deductions in the third quarter of 2010 compared to 2009, which more than offset the effect of price increases taken since the third quarter of 2009.

Litigation proceedings regarding Shire’s FOSRENOL patents are ongoing. Further information about this litigation can be found in PART I: ITEM 1 of this Form 10-Q.

Human Genetic Therapies

ELAPRASE – Hunter syndrome

The growth in sales of ELAPRASE was driven by increased volumes across all regions in which ELAPRASE is sold. On a Non-GAAP CER basis sales grew by 11%.

REPLAGAL – Fabry disease

The growth in sales of REPLAGAL was driven by an acceleration of patients switching to REPLAGAL in Europe, principally due to the ongoing supply disruption affecting the only other approved ERT for Fabry disease. Sales increased 103% on a Non-GAAP CER basis (REPLAGAL is sold primarily in Euros and Pounds sterling).

Litigation proceedings regarding REPLAGAL are ongoing. Further information about this litigation can be found in PART I: ITEM 1 of this Form 10-Q.

VPRIV – Gaucher disease

Following the granting of marketing authorization from the European Commission on August 26, 2010, VPRIV is now being sold on an approved basis in both the US and the EU.

FIRAZYR - HAE

Product sales grew in line with increased volumes across markets in Europe. FIRAZYR is the first new product for HAE in Europe in 30 years and has orphan exclusivity for acute attacks of HAE in adults in the EU until 2018.

Royalties

Royalty revenue increased by 27% to $76.5 million for the three months to September 30, 2010 (2009: $60.3 million). The following table provides an analysis of Shire’s royalty income:

	3 months to		3 months to
	September 30,		September 30,
	2010		2009		Change
	$'M		$'M		%
3TC and ZEFFIX		40.6		42.0		-3
ADDERALL XR		18.0		2.2		+718
Others		17.9		16.1		+11
Total		76.5		60.3		+27

Royalty income increased by 27% due to higher royalties received on sales of authorized generic versions of ADDERALL XR (royalties in the third quarter of 2010 were received from Impax and in the third quarter of 2009 were received, at a lower rate, from Teva Pharmaceuticals Industries Ltd (“Teva”)). Royalties received for 3TC and Zeffix from GSK were lower in 2010 compared to 2009 as 3TC royalties continue to be adversely impacted by increased competition from other treatments.

Cost of product sales

Cost of product sales increased to $112.7 million for the three months to September 30, 2010 (14% of product sales), up from $104.9 million in the corresponding period in 2009 (2009: 17% of product sales). The decrease in cost of product sales as a percentage of product sales in the third quarter of 2010 compared to the same period in 2009 primarily resulted from higher margins from existing Core Product Sales and the positive effect on gross margins of newly launched products.

For the three months to September 30, 2010 cost of product sales included depreciation of $8.5 million (2009: $5.3 million) and amortization of $0.4 million (2009: $0.4 million).

R&D

R&D expenditure increased to $197.9 million for the three months to September 30, 2010 (25% of product sales), compared to $147.8 million in the corresponding period in 2009 (25% of product sales). R&D in the three months to September 30, 2010 included the up-front payment of $45.0 million to Acceleron on entering the collaboration for development of the ActRIIB class of molecules. R&D for the three months to September 30, 2009 included the $6.5 million up-front payment to Santaris for technology access and R&D funding.

Excluding the up-front payments made to Acceleron and Santaris, R&D in the third quarter of 2010 increased by $11.6 million, or 8%, compared to the same period in 2009 as a result of the Company’s continued investment across a number of R&D programs, principally VYVANSE international and investigative uses of VYVANSE for new indications, Guanfacine Carrier Wave and other early stage development programs.

R&D in the three months to September 30, 2010 also included depreciation of $4.4 million (2009: $3.6 million).

SG&A

SG&A expenses increased to $392.4 million (49% of product sales) for the three months to September 30, 2010 from $320.6 million (53% of product sales) in the corresponding period in 2009. SG&A increased in the third quarter of 2010 compared to the same period in 2009 due to the recognition of an impairment charge of $42.7 million (2009: $nil) to write down the DAYTRANA intangible asset to its fair value less costs to sell, together with higher selling and marketing costs incurred to support recently launched products (INTUNIV and VPRIV) and growth into new markets. For the three months to September 30, 2010 SG&A included depreciation of $16.1 million (2009: $18.5 million) and amortization of $31.2 million (2009: $34.8 million).

Reorganization costs

For the three months to September 30, 2010 the Company recorded reorganization costs of $9.7 million (2009: $2.0 million) relating to the transfer of manufacturing from its Owings Mills facility of $2.7 million (2009: $2.0 million) and the establishment of an international commercial hub in Switzerland of $7.0 million (2009: $nil).

Integration and acquisition costs

For the three months to September 30, 2010 the Company recorded integration and acquisition costs of $5.8 million (2009: $6.2 million), which in 2010 primarily related to the acquisition of Movetis, and in 2009 to the integration of Jerini.

Interest expense

For the three months to September 30, 2010 the Company incurred interest expense of $8.3 million (2009: $9.4 million). Interest expense principally relates to the coupon and amortization of issue costs on Shire’s $1,100 million 2.75% convertible bonds due 2014.

Other income, net

For the three months to September 30, 2010 the Company recognized Other income, net of $0.8 million (2009: $7.0 million). In the third quarter of 2009 the Other income, net principally resulted from a gain of $5.7 million recorded on the substantial modification of a property lease.

Taxation

For interim reporting purposes, the Company calculates its tax expense by estimating its global annual effective tax rate and applies that rate in providing for income taxes on a year-to-date basis. The Company has calculated an expected annual effective tax rate, excluding significant, unusual or extraordinary items, and the tax effect of jurisdictions with losses for which a tax benefit cannot be recognized. In the three months to September 30, 2010 the effective tax rate was 35% (2009: 34%). The effective rate of tax in the third quarter of both 2010 and 2009 benefited from changes in estimate of the amount of certain tax liabilities following the submission of various tax returns.

In the three months to September 30, 2010 the effective rate of tax was adversely impacted by the up-front payment to Acceleron and the write-down of the DAYTRANA intangible asset, which were either made from territories with tax rates lower than Shire’s effective rate or in territories where the establishment of valuation allowances precluded the recognition of any benefit.

In the three months to September 30, 2009, the effective rate of tax was impacted by a number of items in that quarter, being (i) the recognition of valuation allowances against certain European deferred tax assets, (ii) increases to accrued

interest on recognized tax contingencies and (iii) an increase in the estimated annual effective tax rate predominately due to a revision in management’s determination of the recoverability of certain deferred tax assets.

Results of operations for the nine months to September 30, 2010 and 2009

Total revenues

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

	9 months to		9 months to
	September 30,		September 30,
	2010		2009		change
	$'M		$'M		%
Product sales		2,276.8		1,916.8		+19
Royalties		254.5		177.8		+43
Other revenues		8.6		19.8		-57
Total		2,539.9		2,114.4		+20

Product sales

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

	9 months to		9 months to
	September 30,		September 30,		Product sales		Non-GAAP CER		US prescription		Exit market
	2010		2009		growth		growth		growth1		share1
	$'M		$'M		%		%		%		%
Specialty Pharmaceuticals
ADHD
VYVANSE		453.6		359.7		+26		+26		+30		15
ADDERALL XR		271.9		434.2		-37		-38		-38		7
INTUNIV		123.0		-		n/a		n/a		n/a		3
DAYTRANA		49.4		52.2		-5		-5		-12		1
EQUASYM		16.3		14.1		+16		+21		n/a		n/a	2

GI
LIALDA / MEZAVANT		209.2		169.4		+23		+23		+19		19
PENTASA		175.9		156.5		+12		+12		-5		15

General Products
FOSRENOL		137.4		137.2		-		+1		-15		7
CALCICHEW		29.7		32.8		-9		-9		n/a		n/a	2
CARBATROL		63.4		59.7		+6		+6		-7		58
REMINYL/REMINYL XL		33.1		28.8		+15		+15		n/a		n/a	2
XAGRID		65.4		62.3		+5		+8		n/a		n/a	2
Other product sales		17.4		14.3		+22		+16		n/a		n/a
		1,645.7		1,521.2		+8
Human Genetic Therapies
ELAPRASE		297.4		258.9		+15		+16		n/a		n/a	2
REPLAGAL		242.0		132.9		+82		+86		n/a		n/a	3
VPRIV		84.0		-		n/a		n/a		n/a		n/a	2
FIRAZYR		7.7		3.8		+103		+109		n/a		n/a	3
		631.1		395.6		+60
Total product sales		2,276.8		1,916.8		+19

(1)	Data provided by IMS Health National Prescription Audit (“IMS NPA”). Exit market share represents the average monthly US market share in the month ended September 30, 2010.

(2)	IMS NPA Data not available.

(3)	Not sold in the US in the nine months to September 30, 2010.

Specialty Pharmaceuticals

VYVANSE – ADHD

The increase in VYVANSE product sales was principally due to a 30% increase in US prescription demand, from both 12% growth in the US ADHD market and an increase in VYVANSE’s share of that market. Price increases in the US taken since the third quarter of 2009, and the launch of the product in Canada during 2010, also contributed to product sales growth.

Product sales growth was partially offset by higher sales deductions, principally increased Medicaid rebates following US Healthcare Reform, and decreases in wholesaler inventories, or “de-stocking”, during 2010 (de-stocking in the nine months to September 30, 2010 was equivalent to $8 million of gross sales compared to stocking of $20 million in the same period in 2009).

Litigation proceedings regarding VYVANSE are ongoing. Further information about this litigation can be found in PART I: ITEM 1 of this Form 10-Q.

ADDERALL XR – ADHD

ADDERALL XR product sales decreased by 37% in the nine months to September 30, 2010 due to lower US prescription demand, as ADDERALL XR’s reduced share of the US ADHD market (8% in 2010 compared to 14% in 2009) more than offset 12% US ADHD market growth, and the effect of a higher level of sales deductions in 2010 compared to 2009 (representing 66% of branded ADDERALL XR gross sales in 2010 compared to 53% in 2009). This decline primarily resulted from the launch of authorized generic versions by Teva and Impax in April and October 2009 respectively.

The decline in US prescription demand and the higher level of sales deductions more than offset the positive effect of wholesaler re-stocking in the nine months to September 2010 compared to the same period in 2009. In 2010 stocking represented $15 million gross sales equivalent, compared to the de-stocking of $96 million in 2009 as a result of the launch of Teva’s authorized generic version.

There are potentially different interpretations as to how shipments of authorized generic ADDERALL XR to Teva and Impax should be included in the Medicaid rebate calculation pursuant to Medicaid rebate legislation, including the Deficit Reduction Act of 2005 (the “Medicaid rebate legislation”). As a result, more than one unit rebate amount (“URA”) is calculable for the purposes of determining the Company’s Medicaid rebate liability to the States after authorized generic launch. In the nine months to September 30, 2010, the Company has recorded its accrual for Medicaid rebates based on its best estimate of the rebate payable. This best estimate is consistent with (i) the Company’s interpretation of the Medicaid rebate legislation, (ii) the Company’s repeated and consistent submission of price reporting to the Center for Medicare and Medicaid Services, (“CMS”) using the Company’s interpretation of the Medicaid rebate legislation, (iii) CMS calculating the URA based on that interpretation, (iv) States submitting Medicaid rebate invoices using this URA, and (v) Shire paying these invoices.

Shire believes that its interpretation of the Medicaid rebate legislation is reasonable and correct. However, CMS could disagree with the Company’s interpretation, and require Shire to apply an alternative interpretation of the Medicaid rebate legislation and pay up to $215 million above the recorded liability. For rebates in respect of 2009 prescriptions of ADDERALL XR (“2009 rebates”) this would represent a URA substantially in excess of the unit sales price of ADDERALL XR and accordingly in excess of the approximate amount of the full cost to the States of reimbursement for Medicaid prescriptions of ADDERALL XR. For rebates in respect of 2010 prescriptions, as a result of Healthcare Reform, the URA would be limited to an amount approximating the unit sales price of ADDERALL XR.

Should CMS require Shire to apply an alternative interpretation of the Medicaid rebate legislation, Shire could seek to limit any additional payments for 2009 Rebates to a level approximating the full, un-rebated cost to the States of ADDERALL XR, or $135 million above the recorded liability. Further, Shire believes it has a strong legal basis supporting its interpretation of the Medicaid rebate legislation, and that there would be a strong basis to initiate litigation to recover any amount paid in excess of the recorded liability. The result of any such litigation cannot be predicted and could result in additional rebate liability above Shire’s current best estimate.

Litigation proceedings regarding ADDERALL XR are ongoing. Further information about this litigation can be found in PART I: ITEM 1 of this Form 10-Q.

INTUNIV – ADHD

Product sales of INTUNIV include revenue from Launch Stocks, which were deferred at December 31, 2009 in accordance with Shire’s accounting policy, and shipments made in the nine months to September 30, 2010. All Launch Stocks were recognized as revenue in the first half of 2010 and no deferred revenue remains.

Litigation proceedings regarding Shire’s INTUNIV patents are ongoing. Further information about this litigation can be found in PART I: ITEM 1 of this Form 10-Q.

LIALDA/MEZAVANT – Ulcerative colitis

Product sales growth for LIALDA/MEZAVANT continued in the nine months to September 30, 2010, driven by increased US prescription demand and price increases, partially offset by higher sales deductions. The US oral mesalamine market grew by approximately 1% year on year.

Litigation proceedings regarding Shire’s LIALDA/MEZAVANT patents are ongoing. Further information about this litigation can be found in PART I: ITEM 1 of this Form 10-Q.

PENTASA – Ulcerative colitis

Product sales of PENTASA increased due to price increases taken since the third quarter of 2009, which more than offset lower US prescription demand.

FOSRENOL – Hyperphosphatemia

Product sales of FOSRENOL were flat in the nine months to September 30, 2010 compared to the same period in 2009 as growth in FOSRENOL’s share of existing markets outside the US, price increases and growth in non-retail demand were offset by higher sales deductions and a decline in retail prescription demand in the US, and mandatory price reductions in the EU.

Litigation proceedings regarding Shire’s FOSRENOL patents are ongoing. Further information about this litigation can be found in PART I: ITEM 1 of this Form 10-Q.

Human Genetic Therapies

ELAPRASE – Hunter syndrome

The growth in sales of ELAPRASE was driven by increased volumes across all regions where ELAPRASE is sold. On a Non-GAAP CER basis sales grew by 16% (77% of ELAPRASE sales are made outside of the US).

REPLAGAL – Fabry disease

The growth in REPLAGAL product sales was driven by an increase in demand due to an acceleration of patients switching to REPLAGAL in the EU, principally due to the on-going disruption to supply affecting a competitor product. Sales increased 86% on a Non-GAAP CER basis (REPLAGAL is sold primarily in Euros and Pounds sterling).

Litigation proceedings regarding REPLAGAL are ongoing. Further information about this litigation can be found in PART I: ITEM 1 of this Form 10-Q.

VPRIV – Gaucher disease

Product sales in the US were generated on an approved basis after February 26, 2010 when approval was received from the FDA. In the EU product sales were initially on a pre-approval basis via patient early access programs, and after the grant of marketing authorisation from the European Commission on August 26, 2010 on an approved basis. VPRIV has been authorized as an orphan medicine through the EU’s Centralized Procedure, making it available in 30 countries across Europe.

FIRAZYR - HAE

The product sales growth was driven by increased volumes across markets in Europe. FIRAZYR is the first new product for HAE in Europe in 30 years and has orphan exclusivity for acute attacks of HAE in adults in the EU until 2018.

Royalties

Royalty revenue increased by 43% to $254.5 million for the nine months to September 30, 2010 (2009: $177.8 million). The following table provides an analysis of Shire’s royalty income:

	9 months to		9 months to
	September 30,		September 30,
	2010		2009		Change
	$'M		$'M		%
3TC and ZEFFIX		115.3		120.3		-4
ADDERALL XR		86.3		15.8		+446
Others		52.9		41.7		+27
Total		254.5		177.8		+43

Royalty income increased by 43% due to higher royalties received on sales of authorized generic versions of ADDERALL XR (royalties in 2010 were received from Impax, and in the second and third quarter of 2009 were received, at a lower rate, from Teva) and higher other royalties principally on sales of FOSRENOL in Japan. Royalties received for 3TC and Zeffix from GSK were lower in 2010 compared to 2009 as 3TC royalties were adversely impacted by increased competition from other treatments.

Generic drug companies have filed ANDAs seeking approval for COMBIVIR in the US. GSK has filed lawsuits against both Teva and Lupin Ltd (“Lupin”), each of whom have filed ANDAs and Paragraph IV certifications for generic versions of COMBIVIR. The lawsuit against Lupin has been stayed pending resolution of the Teva lawsuit. Neither Teva nor Lupin has challenged the patents licensed by Shire to GSK. The thirty month stay of approval for Teva's ANDA expired in March 2010. No trial date has been set.

Cost of product sales

Cost of product sales increased to $333.7 million for the nine months to September 30, 2010 (15% of product sales), up from $284.9 million in the corresponding period in 2009 (2009: 15% of product sales). Cost of product sales as a percentage of product sales was consistent to 2009 levels as lower gross margins on ADDERALL XR in 2010 compared to 2009 (following the launch by Teva and Impax of their authorized generic versions of ADDERALL XR in April and October 2009) were offset by higher gross margins on the Company’s existing Core Product Sales and the positive effect on gross margins of newly launched products.

For the nine months to September 30, 2010 cost of product sales included depreciation of $26.9 million (2009: $16.9 million). Depreciation charged in 2010 is higher than 2009 due to accelerated depreciation of $18.3 million (2009: $7.5 million) following a change in the estimate of the useful lives of the property, plant and equipment at Shire’s Owings Mills facility as a result of the anticipated closure of the facility in 2011.

R&D

R&D expenditure in the nine months to September 30, 2010 decreased to $475.9 million (21% of product sales), compared to $492.5 million in the corresponding period in 2009 (26% of product sales). R&D expenditure in the nine months to September 30, 2010 included the up-front payment of $45.0 million (2% of product sales) on entering the collaboration with Acceleron for development of the ActRIIB class of molecules. R&D in the nine months to September 30, 2009 included $36.9 million (2% of product sales) related to the payment to amend an INTUNIV in-license agreement, $65.0 million (3% of product sales) following the agreement with Duramed Pharmaceuticals, Inc. to terminate development of the Women’s Health products, and the up-front payment of $6.5 million for technology access and R&D funding made to Santaris.

Excluding these termination, license and up-front payments, R&D increased by $46.8 million in the nine months to September 30, 2010 compared to the same period in 2009 as the Company has continued to increase investment in R&D programs, principally VYVANSE international, and other early stage development programs. For the nine months to September 30, 2010 R&D included depreciation of $11.6 million (2009: $11.3 million).

SG&A

SG&A expenses increased to $1,106.7 million (49% of product sales) for the nine months to September 30, 2010 from $973.8 million (51% of product sales) in the corresponding period in 2009. SG&A increased in 2010 compared to the same period in 2009 following the recognition of an impairment charge of $42.7 million (2009: $nil) to write down the DAYTRANA intangible asset to its fair value less costs to sell, together with increased selling and marketing costs

incurred to support recently launched products (INTUNIV and VPRIV) and growth into new markets. For the nine months to September 30, 2010 SG&A included depreciation of $49.0 million (2009: $49.3 million) and amortization of $99.6 million (2009: $101.6 million).

Gain on sale of product rights

For the nine months to September 30, 2010 the Company recorded a gain of $4.1 million (2009: $6.3 million) on the sale of products rights. These gains had been deferred pending the transfer of the relevant consents following the disposal of the product concerned to Laboratorios Almirall S.A. in 2007.

Reorganization costs

For the nine months to September 30, 2010 Shire recorded reorganization costs of $23.3 million (2009: $7.1 million) principally relating to the transfer of manufacturing from its Owings Mills facility of $9.3 million (2009: $7.1 million) and establishment of an international commercial hub in Switzerland of $14.0 million (2009: $nil).

Integration and acquisition costs

For the nine months to September 30, 2010 the Company recorded integration and acquisition costs of $6.4 million (2009: $10.0 million), which in 2010 principally related to the acquisition of Movetis, and in 2009 to the integration of Jerini.

Interest expense

For the nine months to September 30, 2010 the Company incurred interest expense of $25.6 million (2009: $30.6 million). Interest expense principally relates to the coupon and amortization of issue costs on Shire’s $1,100 million 2.75% convertible bonds due 2014.

Other (expense)/income, net

For the nine months to September 30, 2010 the Company recognized income, net of $9.0 million (2009: $61.9 million), due to the recognition of a gain of $11.1 million (2009: $55.2 million) relating to the disposal of its investment in Virochem in March 2009. At the time of disposal an element of the consideration was held in escrow for twelve months pending any warranty claims and breaches of representations made by Virochem and by all selling shareholders, including Shire. The consideration was released from escrow in March 2010, resulting in the gain being recognized in the nine months to September 30, 2010.

Other (expense)/income, net also includes a loss of $3.6 million in the nine months to September 30, 2010 relating to the extinguishment of building finance obligations at Lexington Technology Park, and in 2009 includes a gain of $5.7 million following the substantial modification of a property lease.

Taxation

For interim reporting purposes, the Company calculates its tax expense by estimating its global annual effective tax rate and applies that rate in providing for income taxes on a year-to-date basis. The Company has calculated an expected annual effective tax rate, excluding significant, unusual or extraordinary items, and the tax effect of jurisdictions with losses for which a tax benefit cannot be recognized. In the nine months to September 30, 2010 the effective tax rate was 28% (2009: 15%). The effective rate of tax in 2010 was higher than 2009 due to certain one-off benefits in 2009 which were not repeated in 2010.

In the nine months to September 30, 2010 the effective rate of tax was adversely impacted by the Company incurring expenses, such as the up-front payment to Acceleron and the write down of the DAYTRANA intangible asset, either in territories with tax rates lower then the Company’s effective rate or where the tax attributes generated were subject to valuation allowances such that the recognition of any benefits is precluded. The adverse rate effect of these items has been partially offset by the recognition, in the third quarter of 2010, of benefits from the change in estimate of certain tax liabilities following the submission of various tax returns.

Certain items recognised in 2009 also reduced the rate compared to the current year, being: (i) the favorable rate impact of the recognition of tax attributes following State tax changes in Massachusetts, which enabled the Company to reverse valuation allowances in respect of State tax credits and loss carry-forwards; (ii) the recognition of tax credits and the effect of the change in the effective State tax rate on the net State deferred tax balance; (iii) expenses related to the termination of the Women’s Health development agreement and the amendment to an INTUNIV in-licence being tax effected at rates in excess of the annual effective rate and (iv) benefits from the change in estimate of certain tax liabilities following the submission of various tax returns. In the nine months to September 30, 2009 the impact of these items was partially offset

by recognition of valuation allowances against certain European deferred tax assets and increases to accrued interest on tax contingencies in the third quarter of 2009.

Financial condition at September 30, 2010 and December 31, 2009

Cash and cash equivalents

Cash and cash equivalents have decreased by $305.6 million to $193.3 million at September 30, 2010 (December 31, 2009: $498.9 million). In the nine months to September 30, 2010 cash provided by operating activities was $612.0 million. This strong cash inflow in 2010 and existing cash and cash equivalents at December 31, 2009 has funded the purchase of Movetis, (for which the Company reclassified $584.0 million from cash and cash equivalents to restricted cash in the third quarter of 2010), the cost of acquiring and construction at Lexington Technology Park and the dividend payment.

Restricted cash

Restricted cash has increased by $572.0 million to $605.1 million at September 30, 2010 (December 31, 2009: $33.1 million) due to the reclassification from cash and cash equivalents of $584.0 million held to pay for the acquisition of Movetis in the fourth quarter of 2010.

Inventories

Inventories have increased by $62.9 million to $252.6 million at September 30, 2010 (December 31, 2009: $189.7 million), primarily due to an increase in the production of the Company’s HGT products.

Assets held for sale

Assets held for sale have increased by $59.8 million to $61.5 million at September 30, 2010 (December 31, 2009: $1.7 million) due to the inclusion within assets held for sale of the DAYTRANA intangible asset and inventory prior to divestment to Noven on October 1, 2010.

Prepaid expenses and other current assets

Prepaid expenses and other currents assets have increased by $66.1 million to $179.6 million at September 30, 2010 (December 31, 2009: $113.5 million), primarily due to the increase in income tax receivables.

Property, plant and equipment, net

Property, plant and equipment, net increased by $141.8 million to $818.6 million at September 30, 2010 (December 31, 2009: $676.8 million), principally due to the acquisition of and construction at the Lexington Technology Park.

Other intangible assets, net

Other intangible assets, net have decreased by $223.5 million to $1,567.2 million at September 30, 2010 (December 31, 2009: $1,790.7 million). The decrease is principally due to amortization and impairment charges, reclassification of the Company’s DAYTRANA intangible asset to assets held for sale, and translational foreign exchange losses on the Company’s non-US dollar denominated intangible assets.

Accounts payable and accrued expenses

Accounts payable and accrued expenses have increased by $169.0 million to $1,098.1 million (December 31, 2009: $929.1 million), primarily due to increases in accrued Medicaid rebates, partially offset by the decrease in deferred revenue following the recognition into revenues of INTUNIV Launch Stocks in 2010.

Other long term debt

Other long term debt has decreased by $36.8 million to $6.8 million at September 30, 2010 (December 31, 2009: $43.6 million), due to the extinguishment of building finance obligations following the acquisition of Lexington Technology Park.

Liquidity and capital resources

General

The Company’s funding requirements depend on a number of factors, including the timing and extent of its development programs; corporate, business and product acquisitions; the level of resources required for the expansion of manufacturing and marketing capabilities as the product base expands; increases in accounts receivable and inventory which may arise with any increase in product sales; 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 by the ESOT of Shire shares in the market to satisfy option exercises; the timing and quantum of any amount that could be paid by the Company if CMS were to employ an alternative interpretation of the URA in respect of ADDERALL XR Medicaid rebates; and the continuing cash generated from sales of Shire’s products and royalty receipts.

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 for funding the cost of litigation.

The Company 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.

Shire’s balance sheet includes $193.3 million of cash and cash equivalents at September 30, 2010. Substantially all of Shire’s debt relates to its $1,100 million 2.75% convertible bond which matures in 2014, although these bonds include a put option which could require repayment of the bonds in 2012. In addition, Shire has a revolving credit facility until 2012 of $1,200 million, which is currently undrawn.

Financing

Shire anticipates that its operating cash flow together with available cash, cash equivalents, restricted cash and the revolving credit facility will be sufficient to meet its anticipated future operating expenses, capital expenditures, interest payments 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 and possibly through new borrowings and the issue of new equity if necessary.

Sources and uses of cash

The following table provides an analysis of the Company’s gross and net debt (excluding restricted cash), as at September 30, 2010 and December 31, 2009:

	September 30,			December 31,
	2010			2009
		$’M			$’M
Cash and cash equivalents		193.3			498.9
Convertible debt		1,100.0			1,100.0
Building financing obligation		7.3			46.7
Total debt		1,107.3			1,146.7
Net debt		(914.0	)		(647.8	)

Cash flow activity

Net cash provided by operating activities for the nine months to September 30, 2010 increased by $222.0 million to $612.0 million (2009: $390.0 million), primarily due to higher cash receipts from product sales and royalties, cash inflows from forward foreign exchange contracts in 2010 compared to outflows in 2009, partially offset by higher payments on operating expenditure and taxes in the nine months to September 30, 2010 compared to the same period in 2009.

Net cash used in investing activities was $831.5 million in the nine months to September 30, 2010. This included increases in restricted cash of $547.0 million (primarily due to the transfer from cash and cash equivalents of funds to pay for the acquisition of Movetis in October 2010), and expenditure on property, plant and equipment of $261.7 million. Capital expenditure on property, plant and equipment includes $121.9 million for the acquisition of new properties and properties occupied under operating leases, and $91.6 million on construction work, at Lexington Technology Park.

Net cash used in investing activities was $235.4 million in the nine months to September 30, 2009. This included the cash cost of purchasing EQUASYM of $72.8 million and expenditure on property, plant and equipment of $169.4 million. These cash outflows were partially offset by receipts of $19.2 million from the sale of non-current investments. Capital expenditure on property, plant and equipment included $127.0 million on construction work at the HGT campus in Lexington, Massachusetts, $18.4 million on construction work at the UK office in Basingstoke, Hampshire, and $19.9 million on infrastructure and capital management projects in the US.

Net cash used in financing activities was $84.7 million for the nine months to September 30, 2010, including the dividend payment of $49.8 million and $43.1 million to extinguish building finance obligations at Lexington Technology Park.

Net cash used in financing activities was $45.1 million for the nine months to September 30, 2009 of which $43.0 million related to the dividend payment.

Obligations and commitments

During the nine months to September 30, 2010 other than the acquisition of Lexington Technology Park and the extinguishment of related operating leases and building finance obligations and the acquisition of Movetis which will be fully funded from restricted cash, there have been no material changes outside the ordinary course of the Company’s business to the contractual obligations previously disclosed in PART II: ITEM 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Note 16 to the condensed consolidated financial statements included in PART I: ITEM 1 of this Form 10-Q and PART II: ITEM 7A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 contains a discussion of the Company’s exposure to market and other risks.

ITEM 4. CONTROLS AND PROCEDURES

As at September 30, 2010 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, including those with respect to the Income Access Share (“IAS”) Trust. 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, including those with respect to the IAS Trust, 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.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The information required by this Item is incorporated herein by reference to Note 15 to the condensed consolidated financial statements included in PART I: ITEM 1 of this 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, 2009.

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

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. OTHER INFORMATION

None.

ITEM 5. 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)
2.04	Heads of Agreement by and among Shire plc and Movetis NV relating to a friendly tender offer, dated August 3, 2010.
3.01	Form of Memorandum of Association of Shire plc as adopted by a special resolution passed on April 10, 2008 and amended by a special resolution passed on September 24, 2008 and the form of Articles of Association of Shire plc as adopted by a special resolution passed on May 8, 2008 and amended by a special resolution passed 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)
4.05	Trust Deed for the New Shire Income Access Trust, dated August 29, 2008. (9)
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. (10)
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. (11)
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). (12)
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. (13)
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. (14)
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. (15)
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. (16)

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. (17)
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. (18)
10.10*	Settlement Agreement, dated August 14, 2006 by and between Shire Laboratories Inc. and Barr Laboratories, Inc. (19)
10.11*	Product Development and License Agreement, dated August 14, 2006 by and between Shire LLC and Duramed Pharmaceuticals, Inc. (20)
10.12*	Product Acquisition and License Agreement, dated August 14, 2006 by and among Shire LLC, Shire plc and Duramed Pharmaceuticals, Inc. (21)
10.13	Service Agreement between Shire plc and Mr Angus Russell, dated March 10, 2004. (22)
10.14	Novation Agreement dated November 21, 2005 relating to the Employment Agreement of Angus Russell dated March 10, 2004. (23)
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. (24)
10.16	Form of Amended and Restated Employment Agreement between Shire plc and Mr Matthew Emmens, dated March 12, 2004. (25)
10.17	Amendment Agreement dated November 21, 2005 relating to the Amended and Restated Employment Agreement of Matthew Emmens dated March 12, 2004. (26)
10.18	Ratification and Guaranty dated November 21, 2005 relating to the Amended and Restated Employment Agreement of Matthew Emmens dated March 12, 2004. (27)
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. (28)
10.20	Ratification and Guaranty dated May 20, 2008 relating to the Amended and Restated Employment Agreement of Matthew Emmens dated March 12, 2004. (29)
10.21	Form of Indemnity Agreement for Directors of Shire Limited. (30)
10.22	Service Agreement between Shire Limited and Mr Angus Russell, dated July 2, 2008. (31)
10.23	Service Agreement between Shire Limited and Mr Graham Hetherington, dated July 2, 2008. (32)
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. (33)
10.25	Amended Agreement dated February 24, 2009 relating to the Product Development and License Agreement dated August 14, 2006. (34)
10.26	Amendment of the Service Agreement of A.C Russell dated January 15, 2010. (35)
10.27	Amendment to the Shire Portfolio Share Plan as adopted by the Annual General meeting held on April 27, 2010. (36)
21	List of Subsidiaries. (37)
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 4.05 to Shire’s Form 10-K filed on February 27, 2009.

(10)	Incorporated by reference to Exhibit 99.1 to Shire’s Form 8-K filed on February 23, 2007.

(11)	Incorporated by reference to Exhibit 10.2 to Shire’s Form 10-Q filed on May 1, 2007.

(12)	Incorporated by reference to Exhibit 10.01 to Shire’s Form 8-K filed on May 23, 2008.

(13)	Incorporated by reference to Exhibit 10.1 to Shire’s Form 10-Q filed on August 2, 2007.

(14)	Incorporated by reference to Exhibit 10.2 to Shire’s Form 10-Q filed on August 2, 2007.

(15)	Incorporated by reference to Exhibit 10.3 to Shire’s Form 10-Q filed on August 2, 2007.

(16)	Incorporated by reference to Exhibit 10.02 to Shire’s Form 8-K filed on May 23, 2008.

(17)	Incorporated by reference to Exhibit 10.03 to Shire’s Form 8-K filed on May 23, 2008.

(18)	Incorporated by reference to Exhibit 10.09 to Shire’s Form 10-K/A filed on May 30, 2008.

(19)	Incorporated by reference to Exhibit 10.1 to Shire’s Form 10-Q filed on November 7, 2006.

(20)	Incorporated by reference to Exhibit 10.2 to Shire’s Form 10-Q filed on November 7, 2006.

(21)	Incorporated by reference to Exhibit 10.3 to Shire’s Form 10-Q filed on November 7, 2006.

(22)	Incorporated by reference to Exhibit 10.11 to Shire’s Form 10-K filed on March 12, 2004.

(23)	Incorporated by reference to Exhibit 10.03 to Shire’s Form 8-K filed on November 25, 2005.

(24)	Incorporated by reference to Exhibit 10.06 to Shire’s Form 8-K filed on May 23, 2008.

(25)	Incorporated by reference to Exhibit 10.13 to Shire’s Form 10-K filed on March 12, 2004.

(26)	Incorporated by reference to Exhibit 10.01 to Shire’s Form 8-K filed on November 25, 2005.

(27)	Incorporated by reference to Exhibit 10.02 to Shire’s Form 8-K filed on November 25, 2005.

(28)	Incorporated by reference to Exhibit 10.04 to Shire’s Form 8-K filed on May 23, 2008.

(29)	Incorporated by reference to Exhibit 10.05 to Shire’s Form 8-K filed on May 23, 2008.

(30)	Incorporated by reference to Exhibit 10.07 to Shire’s Form 8-K filed on May 23, 2008.

(31)	Incorporated by reference to Exhibit 10.22 to Shire’s Form 10-Q filed on November 10, 2008.

(32)	Incorporated by reference to Exhibit 10.23 to Shire’s Form 10-Q filed on November 10, 2008.

(33)	Incorporated by reference to Exhibit 10.24 to Shire’s Form 10-Q filed on November 10, 2008.

(34)	Incorporated by reference to Exhibit 10.25 to Shire’s Form 10-Q filed on May 7, 2009.

(35)	Incorporated by reference to Exhibit 10.26 to Shire’s Form 10-K filed on February 26, 2010.

(36)	Incorporated by reference to Exhibit 10.27 to Shire's Form 10-Q filed on May 6, 2010.

(37)	Incorporated by reference to Exhibit 21 to Shire’s Form 10-K filed on February 27, 2009.

SIGNATURES

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


Date:	By:	/s/ Angus Russell

November 5, 2010		Angus Russell Chief Executive Officer


Date:	By:	/s/ Graham Hetherington

November 5, 2010		Graham Hetherington Chief Financial Officer

Jersey (Channel Islands) (State or other jurisdiction of incorporation or organization)	98-0601486 (I.R.S. Employer Identification No.)
5 Riverwalk, Citywest Business Campus, Dublin 24, Republic of Ireland (Address of principal executive offices and zip code)	+353 1 429 7700 (Registrant’s telephone number, including area code)