UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the Quarterly Period ended September 30, 2011

Commission File Number: 0-29630

SHIRE PLC

(Exact name of registrant as specified in its charter)

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)

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

Yes x No o

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232,405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No o

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

Large accelerated filer x Accelerated filer o Non-accelerated filer o Smaller reporting company o

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

Yes o No x

As at October 28, 2011 the number of outstanding ordinary shares of the Registrant was 562,466,971.

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 Pharmaceuticals, Human Genetic Therapies and Regenerative Medicine 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)

CARBATROL® (carbamazepine extended-release capsules)

CEREZYME® (trademark of Genzyme Therapeutic Products Limited Partnership (“Genzyme”))

CONCERTA® (trademark of Alza Corporation)

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

DERMAGRAFT® (Human Fibroblast-Derived Dermal Substitute)

ELAPRASE® (idursulfase)

EQUASYM® IR (methylphenidate hydrochloride)

EQUASYM® XL (methylphenidate hydrochloride)

FABRAZYME® (trademark of Genzyme)

FIRAZYR® (icatibant)

FOSRENOL® (lanthanum carbonate)

INTUNIV® (guanfacine extended release)

JUVISTA® (trademark of Renovo Limited (“Renovo”))

LIALDA® (mesalamine)

MEZAVANT® (mesalazine)

PENTASA® (trademark of Ferring B.V. (“Ferring”))

REPLAGAL® (agalsidase alfa)

RESOLOR® (prucalopride)

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, 2011

Table of contents

		Page
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
	Unaudited Consolidated Balance Sheets at September 30, 2011 and December 31, 2010	4
	Unaudited Consolidated Statements of Income for the three months and nine months to September 30, 2011 and September 30, 2010	6
	Unaudited Consolidated Statement of Changes in Equity for the nine months to September 30, 2011	8
	Unaudited Consolidated Statements of Comprehensive Income for the three months and nine months to September 30, 2011 and September 30, 2010	9
	Unaudited Consolidated Statements of Cash Flows for the nine months to September 30, 2011 and September 30, 2010	10
	Notes to the Unaudited Consolidated Financial Statements	12
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		35
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. RESERVED		54
ITEM 5. OTHER INFORMATION		55
ITEM 6. EXHIBITS		55

PART 1. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SHIRE PLC

UNAUDITED CONSOLIDATED BALANCE SHEETS

			September 30,		December 31,
			2011		2010
	Notes			$’M		$’M
ASSETS
Current assets:
Cash and cash equivalents				276.4		550.6
Restricted cash				21.0		26.8
Accounts receivable, net		4		844.7		692.5
Inventories		5		325.9		260.0
Deferred tax asset				179.0		182.0
Prepaid expenses and other current assets		6		159.3		168.4
Total current assets				1,806.3		1,880.3

Non-current assets:
Investments		7		30.1		101.6
Property, plant and equipment, net				918.8		853.4
Goodwill		8		596.2		402.5
Other intangible assets, net		9		2,561.7		1,978.9
Deferred tax asset				109.5		110.4
Other non-current assets				43.0		60.5
Total assets				6,065.6		5,387.6
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued expenses		10		1,312.7		1,239.3
Convertible bonds		11		1,100.0		-
Deferred tax liability				4.3		4.4
Other current liabilities		12		56.0		49.6
Total current liabilities				2,473.0		1,293.3

Non-current liabilities
Convertible bonds				-		1,100.0
Deferred tax liability				540.4		352.1
Other non-current liabilities		13		97.5		190.8
Total liabilities				3,110.9		2,936.2
Commitments and contingencies		14

SHIRE PLC

UNAUDITED CONSOLIDATED BALANCE SHEETS (continued)


		September 30,			December 31,
		2011			2010
	Notes		$’M			$’M

Equity:
Common stock of 5p par value; 1,000 million shares authorized; and 562.5 million shares issued and outstanding (2010: 1,000 million shares authorized; and 562.2 million shares issued and outstanding)			55.7			55.7
Additional paid-in capital			2,824.5			2,746.4
Treasury stock: 12.5 million shares (2010: 14.0 million shares)			(293.1	)		(276.1	)
Accumulated other comprehensive income			88.5			85.7
Retained earnings/(accumulated deficit)			279.1			(160.3	)
Total equity			2,954.7			2,451.4
Total liabilities and equity			6,065.6			5,387.6

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,
			2011			2010			2011			2010
	Notes			$’M			$’M			$’M			$’M
Revenues:
Product sales				1,018.4			794.3			2,901.0			2,276.8
Royalties				62.8			76.5			199.8			254.5
Other revenues				4.9			3.5			20.4			8.6
Total revenues				1,086.1			874.3			3,121.2			2,539.9
Costs and expenses:
Cost of product sales (1)				166.5			112.7			434.7			333.7
Research and development(1)				201.5			197.9			556.3			475.9
Selling, general and administrative (1)				452.1			392.4			1,295.3			1,106.7
Loss/(gain) on sale of product rights				0.3			-			3.8			(4.1	)
Reorganization costs		3		5.0			9.7			18.0			23.3
Integration and acquisition costs				5.3			5.8			7.9			6.4
Total operating expenses				830.7			718.5			2,316.0			1,941.9

Operating income				255.4			155.8			805.2			598.0

Interest income				0.3			1.0			1.5			1.9
Interest expense				(9.7	)		(8.3	)		(28.8	)		(25.6	)
Other income, net				15.6			0.8			15.9			9.0
Total other income/(expense), net				6.2			(6.5	)		(11.4	)		(14.7	)
Income before income taxes and equity in earnings/(losses) of equity method investees				261.6			149.3			793.8			583.3
Income taxes				(69.5	)		(52.7	)		(187.3	)		(160.8	)
Equity in earnings/(losses) of equity method investees, net of taxes				0.8			(0.3	)		3.2			0.2
Net income				192.9			96.3			609.7			422.7

(1)

Cost of product sales includes amortization of intangible assets relating to favorable manufacturing contracts of $0.5 million for the three months to September 30, 2011 (2010: $0.4 million) and $1.4 million for the nine months to September 30, 2011 (2010: $1.3 million). Research and development costs include impairment charges of $16.0 million for the three and nine months to September 30, 2011 (2010: $nil). Selling, general and administrative costs includes amortization and impairment charges of intangible assets relating to intellectual property rights acquired of $46.4 million for the three months to September 30, 2011 (2010: $73.9 million) and $119.1 million for the nine months to September 30, 2011 (2010: $142.3 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	2011			2010			2011			2010
Earnings per ordinary share - basic


Earnings per ordinary share - basic			35.0	c		17.6	c		110.6	c		77.4	c

Earnings per ordinary share - diluted

Earnings per ordinary share - diluted			33.9	c		17.3	c		106.7	c		76.0	c

Weighted average number of shares (millions):
Basic	17		551.3			547.0			551.2			546.1
Diluted	17		593.8			556.7			595.0			589.7

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

SHIRE PLC

UNAUDITED CONSOLIDATED STATEMENT 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			Retained earnings/ (accumulated deficit) $'M			Total equity $'M
As at January 1, 2011		55.7		562.2		2,746.4		(276.1	)		85.7			(160.3	)		2,451.4
Net income		-		-		-		-			-			609.7			609.7
Foreign currency translation		-		-		-		-			4.6			-			4.6
Options exercised		-		0.3		0.9		-			-			-			0.9
Share-based compensation		-		-		55.9		-			-			-			55.9

Excess tax benefit associated with exercise of stock options		-		-		21.3		-			-			-			21.3
Shares purchased by Employee Share Ownership Trust ("ESOT")		-		-		-		(126.8	)		-			-			(126.8	)

Shares released by ESOT to satisfy exercise of stock options		-		-		-		109.8			-			(109.8	)		-

Unrealized holding gain on available-for-sale securities, net of taxes		-		-		-		-			15.8			-			15.8
Realized gain on divestment of available-for-sale securities, net of taxes		-		-		-		-			(20.0	)		-			(20.0	)
Other than temporary impairment of available-for-sale securities		-		-		-		-			2.4			-			2.4
Dividends		-		-		-		-			-			(60.5	)		(60.5	)
As at September 30, 2011		55.7		562.5		2,824.5		(293.1	)		88.5			279.1			2,954.7

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

Dividends per share

During the nine months to September 30, 2011 Shire plc declared and paid dividends of 10.85 US cents per ordinary share (equivalent to 32.55 US cents per ADS) totalling $60.5 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,
		2011			2010		2011			2010
		$'M			$'M		$'M			$'M

Net income			192.9			96.3		609.7			422.7
Other comprehensive income:
	Foreign currency translation adjustments		(95.6	)		60.9		4.6			(21.3	)
	Unrealized holding gain/(loss) on available-for-sale securities (net of taxes of $0.3 million, $nil, $0.2 million and $2.6 million)		(0.2	)		1.9		15.8			(20.7	)
	Other than temporary impairment of available-for-sale securities (net of taxes of $nil in all periods)		-			-		2.4			1.5
1	Realized gain on divestment of available-for-sale securities (net of taxes of $3.5 million, $nil, $3.5 million and $nil)		(20.0	)		-		(20.0	)		-
Comprehensive income			77.1			159.1		612.5			382.2

The components of accumulated other comprehensive income as at September 30, 2011 and December 31, 2010 are as follows:

	September 30,			December 31,
	2011			2010
	$’M			$’M
Foreign currency translation adjustments		90.0			85.4
Unrealized holding (loss)/gain on available-for-sale securities, net of taxes		(1.5	)		0.3
Accumulated other comprehensive income		88.5			85.7

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,
	2011			2010
		$’M			$’M
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		609.7			422.7
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		212.3			189.2
Share based compensation		54.7			44.2
Impairment of intangible assets1		16.0			42.7
Gain on sale of non-current investments		(23.5	)		(11.1	)
Loss/(gain) on sale of product rights		3.8			(4.1	)
Other		5.9			5.2
Movement in deferred taxes		(13.2	)		48.7
Equity in earnings of equity method investees		(3.2	)		(0.2	)

Changes in operating assets and liabilities:
Increase in accounts receivable		(122.8	)		(138.0	)
Increase in sales deduction accrual		46.2			169.0
Increase in inventory		(42.8	)		(54.1	)
Decrease/(increase) in prepayments and other assets		17.3			(67.0	)
Decrease in accounts payable and other liabilities		(101.4	)		(41.0	)
Returns on investment from joint venture		5.2			5.8
Net cash provided by operating activities (A)		664.2			612.0

CASH FLOWS FROM INVESTING ACTIVITIES:
Movements in restricted cash		5.7			(547.0	)
Purchases of subsidiary undertakings, net of cash acquired		(723.5	)		-
Payments on foreign exchange contracts related to Movetis NV ("Movetis") acquisition		-			(21.2	)
Purchases of non-current investments		(8.3	)		(1.0	)
Purchases of property, plant and equipment ("PP&E")		(135.9	)		(261.7	)
Purchases of intangible assets		(5.2	)		(2.7	)
Proceeds from disposal of non-current investments and PP&E		94.7			2.1
Proceeds/deposits received on sales of product rights		8.8			-
Returns of equity investments and proceeds from short term investments		1.7			-
Net cash used in investing activities (B)		(762.0	)		(831.5	)

SHIRE PLC

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

	9 months to			9 months to
	September 30,			September 30,
	2011			2010
		$’M			$’M
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from drawing of revolving credit facility ("RCF")		30.0			-
Repayment of RCF		(30.0	)		-
Repayment of debt acquired with Advanced BioHealing, Inc. ("ABH")		(13.1	)		-
Payment under building finance obligation		(1.0	)		(1.8	)
Extinguishment of building finance obligation		-			(43.1	)
Tax benefit of stock based compensation		23.7			9.6
Proceeds from exercise of options		0.9			2.1
Payment of dividend		(60.5	)		(49.8	)
Payments to acquire shares by ESOT		(126.8	)		(1.7	)
Net cash used in financing activities(C)		(176.8	)		(84.7	)
Effect of foreign exchange rate changes on cash and cash equivalents (D)		0.4			(1.4	)
Net decrease in cash and cash equivalents (A+B+C+D)		(274.2	)		(305.6	)
Cash and cash equivalents at beginning of period		550.6			498.9
Cash and cash equivalents at end of period		276.4			193.3

Supplemental information associated with continuing
operations:

	9 months to			9 months to
	September 30,			September 30,
	2011			2010
		$’M			$’M

Interest paid		(16.9	)		(11.7	)
Income taxes paid		(264.5	)		(291.6	)

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

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, 2010 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, 2010.

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. Estimates and assumptions are primarily made in relation to the valuation of intangible assets, the valuation of equity investments, sales deductions, income taxes (including provisions for uncertain tax positions and the realization of deferred tax assets), provisions for litigation and legal proceedings, and contingent consideration receivable from product divestments. If actual results differ from the Company’s estimates, or to the extent these estimates are adjusted in future periods, the Company’s results of operations could either benefit from, or be adversely affected by, any such change in estimate.

Adopted during the period

Revenue Recognition in Multiple Deliverable Revenue Arrangements

On January 1, 2011 the Company adopted new guidance issued by the Financial Accounting Standard Board (“FASB”) 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 nor 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 than 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. The guidance has been adopted prospectively from January 1, 2011 for new arrangements, or existing arrangements which have been materially modified subsequent to the date of adoption. The adoption of the guidance did not impact the Company’s consolidated financial position, results of operations or cash flows.

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

On January 1, 2011 the Company adopted new guidance issued by the FASB 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 Company has historically accounted for share based payment awards in a manner consistent with the guidance, and therefore the adoption of this guidance did not impact the Company’s consolidated financial position, results of operations or cash flows.

Milestone Method of Revenue Recognition

On January 1, 2011 the Company adopted new guidance issued by the FASB 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: (i) 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; (ii) milestones should be considered substantive in their entirety and may not be bifurcated; (iii) an arrangement may contain both substantive and non substantive milestones; and (iv) each milestone should be evaluated individually to determine if it is substantive. The adoption of the guidance did not impact the Company’s consolidated financial position, results of operations or cash flows.

Fees Paid to Federal Government by Pharmaceutical Manufacturers

On January 1, 2011 the Company adopted new guidance issued by the FASB on the accounting for the annual fee paid by pharmaceutical manufacturers to the US Treasury in accordance with the Patient Protection and Affordable Care Act as amended by the Health Care and Education Reconciliation Act for each calendar year beginning on or after January 1, 2011. The annual fee in 2011 is $2.5 billion. A portion of the fee will be allocated to individual entities on the basis of the amount of their branded prescription drug sales to certain US Government programs for the preceding year as a percentage of the industry’s branded prescription drug sales for the same period to these same programs. This guidance specifies that the liability for the fee should be estimated and recorded in full upon the first qualifying sale with a corresponding deferred cost that is amortized to expense using a straight-line method of allocation unless another method better allocates the fee over the calendar year that it is payable. The adoption of the guidance did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

Disclosure of Supplementary Pro Forma Information for Business Combinations

On January 1, 2011 the Company adopted new guidance issued by the FASB which clarifies the acquisition date that should be used for reporting pro forma financial information disclosures in a business combination when comparative financial statements are presented. The guidance specifies that the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period. The guidance also improves the usefulness of the pro forma revenue and earnings disclosures by requiring a description of the nature and amount of material, nonrecurring pro forma adjustments that are directly attributable to the business combination. The guidance is effective prospectively for business combinations for which the acquisition date is on or after January 1, 2011. The Company has historically presented proforma business combination disclosures in accordance with the guidance, and therefore the adoption of guidance did not impact the Company’s disclosure on business combinations.

To be adopted in future periods

Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in US GAAP and International Financial Reporting standards (“IFRS”)

In May 2011 the FASB issued guidance on fair value measurement and disclosure, which both amends existing requirements and improves the comparability of fair value measurement and disclosure between US GAAP and IFRS. Some of the amendments clarify the application of existing fair value measurement requirements and other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The guidance will be effective prospectively for interim and annual periods beginning after December 15, 2011. Early adoption is not permitted. The Company is currently evaluating the impact of adopting this guidance.

Presentation of Comprehensive Income

In June 2011 the FASB issued guidance on the presentation of comprehensive income which revises the manner in which entities present comprehensive income in their financial statements. The guidance requires entities to report components of comprehensive income in either: (i) a single, continuous statement of comprehensive income; or (ii) two separate but consecutive statements. The guidance does not change those items which must be reported in other comprehensive income, and does not change the definition of net income or the calculation of earnings per share. The guidance will be effective retrospectively for interim and annual periods beginning after December 15, 2011. Early adoption is permitted. The Company is currently evaluating the impact of adopting this guidance.

Goodwill Impairment Testing

In September 2011 the FASB issued guidance on the testing of goodwill for impairment. The guidance permits an entity to first assess the qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. An entity also has the option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to performing the first step of the two-step goodwill impairment test and may resume performing the qualitative assessment in any subsequent periods. The guidance will be effective for interim and annual goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted. The Company is currently evaluating the impact of adopting this guidance.

2. Business combinations

Acquisition of ABH

On May 17, 2011 the Company announced that it had entered into an Agreement and Plan of Merger, (the “Agreement”) to acquire 100% of the outstanding shares and other equity instruments of ABH. On June 28, 2011, in accordance with the terms of the Agreement, Shire completed its acquisition of ABH. The fair value of cash consideration paid by the Company is $739.6 million. The purchase price was funded by a combination of Shire’s existing cash resources and $30.0 million drawn down on Shire’s revolving credit facility.

The acquisition of ABH adds the DERMAGRAFT product, a regenerative bio-engineered skin substitute, to Shire’s portfolio. DERMAGRAFT is marketed in the US for the treatment of diabetic foot ulcers (“DFU”) greater than six weeks in duration, and brings future growth prospects in other territories and indications. The acquisition combines ABH’s expertise and commercial capability in regenerative medicine with the Company’s strengths and expertise in human cell biological manufacturing.

The acquisition of ABH has been accounted for as a purchase business combination. The assets acquired and the liabilities assumed from ABH have been recorded at their preliminary fair values at the date of acquisition, being June 28, 2011. The Company’s consolidated financial statements and results of operations include the results of ABH from June 28, 2011. In the three and nine months to September 30, 2011 the Company included revenues of $50.0 million and $52.0 million (2010: $nil and $nil) and post tax losses of $4.5 million and $5.1 million (2010: $nil and $nil) for ABH within its Unaudited Consolidated Statements of Income.

The Company’s preliminary allocation of the purchase price to the assets acquired and liabilities assumed is outlined below:

	Preliminary
	Fair value
		$’M
Identifiable assets acquired and liabilities assumed

ASSETS
Current assets:
Cash and cash equivalents		14.6
Accounts receivable		30.1
Inventories		30.7
Deferred tax assets		32.3
Other current assets		7.9
Total current assets		115.6

Non-current assets:
Property, plant and equipment		16.5
Goodwill		193.7
Other intangible assets
- DERMAGRAFT product technology		710.0
- other intangible assets		1.5
Other non-current assets		0.1
Total assets		1,037.4
LIABILITIES
Current liabilities:
Accounts payable and other current liabilities		49.4

Non-current liabilities:
Long term debt, less current portion		9.1
Deferred tax liabilities		238.3
Other non-current liabilities		1.0
Total liabilities		297.8
Fair value of identifiable assets acquired and liabilities assumed		739.6

Consideration
Cash consideration payable		739.6

The purchase price allocation is preliminary pending final determination of the fair values of certain assets acquired and liabilities assumed. The final determination of these fair values will be completed as soon as possible but no later than one year from the acquisition date.

Other intangible assets comprise $710.0 million relating to DERMAGRAFT product technology, the product brand name and related relationships. The fair value of this asset has been estimated using an income approach, using the excess earnings method. The estimated useful life of the technology is 18 years, and amortization expense will be recorded on a straight line basis.

Goodwill arising of $193.7 million, which is not deductible for tax purposes, has been assigned to the Regenerative Medicine (“RM”) operating segment. Goodwill includes the values of tax synergies, assembled workforce and future potential indications for DERMAGRAFT which do not meet the criteria for recognition as separate intangible assets.

In the three and nine months to September 30, 2011 the Company incurred integration and acquisition-related costs of $3.6 million and $10.5 million (2010: $nil and $nil), which have been charged to Integration and acquisition costs in the Company’s income statement.

Supplemental disclosure of pro forma information

The following unaudited pro forma financial information presents the combined results of the operations of Shire and ABH as if the acquisition of ABH had occurred at January 1, 2010. The unaudited pro forma financial information is not necessarily indicative of what the consolidated results of operations actually would have been had the acquisition been completed at the date indicated. In addition, the unaudited pro forma financial information does not purport to project the future results of operations of the combined Company.

	9 months to			9 months to
	September 30,			September 30,
	2011			2010
		$’M			$’M
Revenues		3,211.5			2,643.7

Net income attributable to Shire plc		594.0			407.3

Per share amounts:
Net income per ordinary share attributable to Shire plc – basic		107.8	c		74.6	c

Net income per ordinary share attributable to Shire plc – diluted		104.1	c		73.2	c

The unaudited pro forma financial information above reflects the following pro forma adjustments:

(i)	an adjustment to net income of $49.9 million and $10.6 million for the nine months to September 30, 2011 and 2010 respectively, to eliminate the income statement effect of changes in the fair value of ABH’s preferred stock warrants (which were extinguished on acquisition of ABH);

(ii)	an adjustment to increase amortization expense by approximately $20.0 million and $30.0 million for the nine months to September 30, 2011 and 2010 respectively, to reflect amortization of intangible assets, principally for DERMAGRAFT product technology, over their estimated useful lives;

(iii)

an adjustment to decrease net income by $10.5 million for the nine months to September 30, 2010 to reflect acquisition and integration costs incurred by Shire, and increase net income by $27.5 million for the nine months to September 30, 2011 to eliminate the acquisition and integration costs incurred by ABH and Shire;

(iv)

an adjustment of $1.7 million and $2.2 million in the nine months to September 30, 2011 and September 30, 2010 respectively to reflect interest income foregone on the Company’s cash resources used to fund the acquisition of ABH and interest expense incurred as result of the partial funding of the acquisition of ABH through the Company’s revolving credit facility;

(v)	in the nine months to September 30, 2010 the calculation of pro forma diluted earnings per share does not include the effect of the Company’s convertible bonds as it would be anti-dilutive on a pro forma basis; and

(vi)	adjustments to reflect the tax effects of the above adjustments, where applicable.

3. Reorganization costs

Establishment of an International Commercial Hub in Switzerland

In March 2010 the Company initiated plans to relocate certain research and development (“R&D”) and commercial operations to Switzerland to support its Human Genetic Therapies (“HGT”) and Specialty Pharmaceutical (“SP”) businesses outside the US. In the nine months to September 30, 2011, the Company incurred reorganization costs totaling $9.8 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 the remainder of 2011. The total reorganization costs incurred since March 2010 are $31.1 million.

Owings Mills

In March 2009 the Company initiated plans to phase out operations and close its SP manufacturing facility at Owings Mills, Maryland. By the end of 2011, all products manufactured by Shire at this site will transition to DSM Pharmaceuticals, Inc., and operations and employee numbers at the site will wind down over this period. In the nine months to September 30, 2011 the Company incurred reorganization costs of $8.2 million which relate to employee involuntary termination benefits and other costs. The total reorganization costs incurred since March 2009 are $33.9 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, 2011 incurred accelerated depreciation of $6.6 million, which has been charged to Cost of product sales. The reorganization costs and accelerated depreciation have been recorded within the SP operating segment.

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, 2011 is as follows:


								Closing
	Opening liability		Amount					liability at
	at January 1,		charged to re-					September 30,
	2011		organization		Paid/Utilized			2011
	$'M		$'M		$'M			$'M

Involuntary termination benefits		10.1		8.8		(6.3	)		12.6
Other reorganization costs		2.3		9.2		(11.2	)		0.3
		12.4		18.0		(17.5	)		12.9

At September 30, 2011 the closing liability for reorganization costs was recorded within accounts payable and accrued expenses.

4. Accounts receivable, net

Accounts receivable at September 30, 2011 of $844.7 million (December 31, 2010: $692.5 million), are stated net of a provision for discounts and doubtful accounts of $26.9 million (December 31, 2010: $23.4 million).

Provision for discounts and doubtful accounts:

	2011			2010
		$’M			$’M
As at January 1,		23.4			20.8
Provision charged to operations		172.5			130.8
Provision utilization		(169.0	)		(130.2	)
As at September 30,		26.9			21.4

At September 30, 2011 accounts receivable included $51.9 million (December 31, 2010: $75.8 million) related to royalty income.

5. Inventories

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

	September 30,		December 31,
	2011		2010
		$’M		$’M
Finished goods		101.1		91.9
Work-in-progress		153.2		113.9
Raw materials		71.6		54.2
		325.9		260.0

At September 30, 2011 inventories included $19.1 million (December 31, 2010: $4.1 million) of costs capitalized prior to regulatory approval of the related product or relevant manufacturing process. At September 30, 2011 pre-approval inventory relates solely to VPRIV manufactured at the Company’s new manufacturing facility at Lexington Technology Park (“LTP”).

6. Prepaid expenses and other current assets

	September 30,		December 31,
	2011		2010
		$’M		$’M
Prepaid expenses		57.4		45.1
Income tax receivable		28.5		42.4
Value added taxes receivable		19.8		21.5
Other current assets		53.6		59.4
		159.3		168.4

7. Investments

	September 30,		December 31,
	2011		2010
		$’M		$’M
Investments in private companies		11.5		5.9
Available-for-sale securities		8.3		83.9
Equity method investments		10.3		11.8
		30.1		101.6

In the three and nine months to September 30, 2011 the Company disposed of 1.8 million shares in Vertex (representing substantially all of Company’s holding) for a cash consideration of $94.7 million, realizing a gain of $23.5 million which has been included in Other income, net.

8. Goodwill

	September 30,		December 31,
	2011		2010
		$’M		$’M
Goodwill arising on businesses acquired		596.2		402.5

During the nine months to September 30, 2011 the Company completed its acquisition of ABH for cash consideration payable of $739.6 million, which resulted in goodwill with a preliminary value of $193.7 million (see Note 2). The goodwill has been assigned to the RM operating segment.

At September 30, 2011 goodwill of $245.9 million (December 31, 2010: $245.9 million) is held in the SP segment, $156.6 million (December 31, 2010: $156.6 million) in the HGT segment and $193.7 million (December 31, 2010: $nil) is held in the RM segment.

	2011		2010
		$’M		$’M
As at January 1,		402.5		384.7
Acquisitions		193.7		-
Foreign currency translation		-		(9.7	)
As at September 30,		596.2		375.0

9. Other intangible assets, net

	September 30,			December 31,
	2011			2010
		$’M			$’M
Amortized intangible assets
Intellectual property rights acquired for currently marketed products		2,522.2			2,516.4
Acquired product technology		710.0			-
Other intangible assets		23.7			22.0
		3,255.9			2,538.4
Unamortized intangible assets
Intellectual property rights acquired for In-process R&D (“IPR&D”)		123.5			139.7
		3,379.4			2,678.1

Less: Accumulated amortization		(817.7	)		(699.2	)
		2,561.7			1,978.9

At September 30, 2011 the net book value of intangible assets allocated to the SP segment was $1,389.5 million (December 31, 2010: $1,482.9 million), to the HGT segment was $470.7 million (December 31, 2010: $496.0 million) and to the RM segment was $701.5 million (December 31, 2010: $nil).

The change in the net book value of other intangible assets for the nine months to September 30, 2011 and 2010 is shown in the table below:

	Other intangible assets
	2011			2010
		$’M			$’M
As at January 1,		1,978.9			1,790.7
Acquisitions		717.1			2.7
Amortization charged		(120.5	)		(100.9	)
Impairment charges		(16.0	)		-
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		2.2			(26.6	)
As at September 30,		2,561.7			1,567.2

In the nine months to September 30, 2011 the Company acquired intangible assets totaling $717.1 million, principally relating to DERMAGRAFT product technology acquired with ABH (see Note 2 for further details). The weighted average amortization period of acquired amortizable intangible assets is 18 years.

In the three and nine months to September 30, 2011 the Company recorded impairment charges of $16.0 million (2010: $nil) in respect of certain IPR&D intangible assets. The impairment charge has been recorded within R&D in the SP operating segment.

On August 10, 2010 the Company divested DAYTRANA to Noven. 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 was recorded to selling, general and administrative expenses in the three and nine months to September 30, 2010. 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 then 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.

Management estimates that the annual amortization charge in respect of intangible assets held at September 30, 2011 will be approximately $183 million for each of the five years to September 30, 2016. 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.

10. Accounts payable and accrued expenses

	September 30,		December 31,
	2011		2010
		$’M		$’M
Trade accounts payable and accrued purchases		184.2		234.7
Accrued rebates – Medicaid		387.3		379.6
Accrued rebates – Managed care		203.8		170.3
Sales return reserve		79.4		69.8
Accrued bonuses		86.8		91.6
Accrued employee compensation and benefits payable		73.9		48.1
R&D accruals		66.2		60.7
Marketing accruals		31.3		26.5
Deferred revenue		7.3		13.7
Other accrued expenses		192.5		144.3
		1,312.7		1,239.3

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. Since authorized generic launch in 2009 the Company has recorded its accrual for Medicaid rebates based on its best estimate of the rebate payable, consistent with the Company’s interpretation of the Medicaid rebate legislation. Shire believes that its interpretation of the Medicaid rebate legislation is reasonable and correct. Additionally, from October 1, 2010 forward, provisions of the 2010 Affordable Care Act provide further clarity, in a manner consistent with the Company’s interpretation, as to how shipments of authorized generics from that date should be included in the Medicaid rebate calculation.

However, the Centers for Medicare and Medicaid Services (“CMS”) could disagree with Shire’s interpretation of the Medicaid rebate legislation for shipments of authorized generics prior to October 1, 2010. CMS could require Shire to apply an alternative interpretation of the Medicaid rebate legislation and request that Shire pays up to $212 million above the recorded liability. However, Shire believes it has a strong legal basis supporting its interpretation of the Medicaid rebate legislation, and that there would be a strong basis firstly to limit any additional payment to a level approximating the full, un-rebated cost to the States of ADDERALL XR (equivalent to approximately $134 million above the recorded liability), and secondly to initiate litigation to recover any amount paid in excess of the recorded liability. The result of any such litigation cannot be predicted.

11. Convertible Bonds

Shire 2.75% Convertible Bonds due 2014

On May 9, 2007 Shire issued $1,100 million in principal amount of 2.75% convertible bonds due in 2014 and convertible into fully paid ordinary shares of Shire plc (the “Bonds”). The Bonds were issued at 100% of their principal amount, and unless previously purchased and cancelled, redeemed or converted, will be redeemed on May 9, 2014 (the “Final Maturity Date”) at their principal amount.

The Bonds may be redeemed at the option of the Bond holders at their principal amount including accrued but unpaid interest on May 9, 2012 (the “Put Option”), or following the occurrence of a change of control of Shire. In lieu of settling any such redemption in cash, the terms of the Bonds also permit the Company to deliver the underlying ordinary shares and, if necessary, a cash top-up amount. In accordance with US GAAP, as the exercise of the Put Option could require the Company to redeem the Bonds within twelve months of the balance sheet date, the Bonds have been presented as a current liability at September 30, 2011.

12. Other current liabilities

	September 30,		December 31,
	2011		2010
		$’M		$’M
Income taxes payable		9.3		16.2
Value added taxes		14.5		9.9
Other current liabilities		32.2		23.5
		56.0		49.6

13. Other non-current liabilities

	September 30,		December 31,
	2011		2010
		$’M		$’M
Income taxes payable		31.6		130.0
Deferred revenue		13.8		14.1
Deferred rent		13.3		12.8
Insurance provisions		18.4		13.5
Other non-current liabilities		20.4		20.4
		97.5		190.8

14. Commitments and contingencies

(a) Leases

Future minimum lease payments under operating leases at September 30, 2011 are presented below:

	Operating
	leases
		$’M
2011		10.1
2012		35.6
2013		26.9
2014		25.0
2015		20.2
2016		18.0
Thereafter		38.8
		174.6

The Company leases land, facilities, motor vehicles and certain equipment under operating leases expiring through 2021. Lease and rental expense amounted to $27.3 million and $23.7 million for the nine months to September 30, 2011 and 2010 respectively, which is predominately included in selling, general and administrative (“SG&A”) expenses in the Consolidated Statements of Income.

(b) Letters of credit and guarantees

At September 30, 2011 the Company had irrevocable standby letters of credit and guarantees with various banks totaling $34.7 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 updates in collaborative arrangements in the nine months to September 30, 2011 are included below:

In-licensing arrangements

JUVISTA

On June 19, 2007 Shire signed an agreement with Renovo Limited (“Renovo”) to develop and commercialize JUVISTA. On February 11, 2011, Renovo announced its Phase 3 trial for JUVISTA in scar revision surgery did not meet its primary or secondary endpoints. On March 2, 2011, Shire terminated its agreement with Renovo.

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, 2011 Shire received milestone payments totaling $6.8 million (2010: $nil). In the nine months to September 30, 2011 Shire recognized milestone income of $10.1 million (2010: $6.3 million) in other revenues and $46.2 million (2010: $36.1 million) in product sales for shipment of product to the relevant licensee.

(d) Commitments

(i) Clinical testing

At September 30, 2011 the Company had committed to pay approximately $279.2 million (December 31, 2010: $156.2 million) to contract vendors for administering and executing clinical trials. 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, 2011 the Company had committed to pay approximately $96.8 million (December 31, 2010: $108.6 million) in respect of contract manufacturing. The Company expects to pay $36.7 million of these commitments in 2011.

(iii) Other purchasing commitments

At September 30, 2011 the Company had committed to pay approximately $108.9 million (December 31, 2010: $104.1 million) for future purchases of goods and services, predominantly relating to active pharmaceutical ingredients sourcing. The Company expects to pay $97.3 million of these commitments in 2011.

(iv) Investment commitments

At September 30, 2011 the Company had outstanding commitments to subscribe for interests in companies and partnerships for amounts totaling $13.9 million (December 31, 2010: $5.7 million) which may all be payable in 2011, depending on the timing of capital calls.

(v) Capital commitments

At September 30, 2011 the Company had committed to spend $37.7 million (December 31, 2010: $76.0 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 the Company records a loss contingency provision based on its best estimate of the probable loss. Where no particular amount within that range is a better estimate than any other amount, the minimum amount is recorded. These estimates are often developed substantially before the ultimate loss is known, so estimates are refined each accounting period, as additional information becomes 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 the estimates are changed when expectations are revised. Any outcome upon settlement that deviates from the Company’s estimate may result in an additional expense or release in a future accounting period. At September 30, 2011 provisions for litigation losses, insurance claims and other disputes totaled $42.7 million (December 31, 2010: $33.8 million).

Specific

VYVANSE

In May and June 2011, Shire was notified that six separate Abbreviated New Drug Applications (“ANDAs”) were submitted under the Hatch-Waxman Act seeking permission to market generic versions of all approved strengths of VYVANSE. The notices were from Sandoz, Inc. (“Sandoz”); Amneal Pharmaceuticals LLC (“Amneal”); Watson Laboratories, Inc.; Roxane Laboratories, Inc. (“Roxane”); Mylan Pharmaceuticals, Inc.; and Actavis Elizabeth LLC and Actavis Inc. (collectively, “Actavis”). Within the requisite 45 day period, Shire filed lawsuits for infringement of certain of Shire’s VYVANSE patents in the US District Court for the District of New Jersey against each of Sandoz, Roxane, Amneal and Actavis; in the US District Court for the Central District of California against Watson Laboratories, Inc.; and in the US District Court for the Eastern District of New York against Mylan Pharmaceuticals, Inc. and Mylan Inc. (collectively “Mylan”). The filing of the lawsuits triggered a stay of approval of all six ANDAs for up to 30 months. No trial dates have 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 all approved strengths of INTUNIV. The notices were from Teva Pharmaceuticals USA, Inc. and Teva Pharmaceutical Industries, Ltd (collectively, “Teva”); Actavis; and Anchen Pharmaceuticals, Inc. and Anchen, Inc. (collectively, "Anchen"). Within the requisite 45 day period, Shire filed lawsuits in the US District Court for 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. These lawsuits have been consolidated. The previously scheduled Markman hearing was cancelled by the Court and has not been rescheduled. No trial date has been set.

In October 2010, Shire was notified that two separate ANDAs were submitted under the Hatch-Waxman Act seeking permission to market generic versions of the 4mg strength of INTUNIV. The notices were from Watson Pharmaceuticals, Inc. and from Impax Laboratories, Inc. (“Impax”). Shire was subsequently advised that Impax amended its ANDA to include the 1mg, 2mg and 3mg strengths of INTUNIV. Within the requisite 45 day period, Shire filed a lawsuit in the US District Court for the Northern District of California against each of Watson Pharmaceuticals, Inc., Watson Laboratories, Inc.-Florida, Watson Pharma, Inc., ANDA, Inc. (collectively “Watson”) and Impax for infringement of certain of Shire’s INTUNIV patents. The filing of the lawsuit triggered a stay of approval of these ANDAs for up to 30 months. A Markman hearing has been scheduled for May 30, 2012. No trial date has been set.

In February 2011, Shire was notified that Mylan Pharmaceuticals, Inc submitted an ANDA under the Hatch-Waxman Act seeking permission to market a generic version of the 4mg strength of INTUNIV. Within the requisite 45 day period, Shire filed a lawsuit in the US District Court for the Southern District of New York against Mylan for infringement of certain of Shire’s INTUNIV patents. In April 2011, Shire filed a lawsuit against Mylan in the US District Court for the District of West Virginia for infringement of certain of Shire’s INTUNIV patents and dismissed the lawsuit in the Southern District of New York. The filing of the lawsuit in West Virginia did not trigger a stay of approval of this ANDA. A Markman hearing has been scheduled for June 7, 2012. A trial is scheduled to start on September 16, 2013.

In March 2011, Shire was notified that Sandoz had submitted an ANDA under the Hatch-Waxman Act seeking permission to market a generic version of the 4mg strength of INTUNIV. Within the requisite 45 day period, Shire filed a lawsuit in the US District Court for the District of Colorado against Sandoz for infringement of certain of Shire’s INTUNIV patents. The filing of the lawsuit triggered a stay of approval of this ANDA for up to 30 months. No trial date has been set.

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 (“ERT”) for Fabry disease, REPLAGAL, infringes Mt. Sinai’s European Patent No. 1 942 189, granted April 14, 2010. Mt. Sinai sought injunctions against the use of REPLAGAL in these jurisdictions until expiration of the patent. Mt. Sinai has been granted Supplementary Protection Certificates (“SPC”) in respect of the patent in certain EU countries (including Sweden and Germany) which, where granted, extends the patent until August 2016. Where no SPC has been granted, the patent expires November 2013.

Shire filed an opposition against Mt. Sinai’s patent before the European Patent Office (“EPO”) on July 23, 2010 and commenced invalidity proceedings in the UK on December 8, 2010. Mt. Sinai has counterclaimed alleging infringement in the UK proceedings. A hearing date has not been set for the Swedish law suit. The EPO opposition hearing is scheduled for March 2012 and the UK invalidity and infringement hearing date is scheduled for May 2012.

On January 18, 2011 the German Court found that REPLAGAL infringes Mt. Sinai’s patent, and granted Mt Sinai’s request for an injunction. Shire has appealed this decision, but no hearing date has been set. As a result of the supply shortage for the only other ERT for Fabry Disease, Mt. Sinai had undertaken not to enforce the injunction in Germany prior to September 30, 2011. On June 30, 2011, Mt. Sinai extended its undertaking until December 31, 2011. On October 4, 2011 Mt Sinai again extended its undertaking not to enforce the German injunction until March 31, 2012.

FOSRENOL

In February 2009 Shire was notified that three separate ANDAs were submitted under the Hatch-Waxman Act seeking permission to market generic versions of all approved strengths of FOSRENOL. The notices were received from Barr Laboratories, Inc. (“Barr”); Mylan, Inc., Mylan Pharmaceuticals, Inc. and Matrix Laboratories, Inc. (collectively, “Mylan-Matrix”); and Natco Pharma Limited (“Natco”). Within the requisite 45 day period, Shire filed lawsuits in the US District Court for the Southern District of New York against each of Barr, Mylan-Matrix and Natco for infringement of certain of Shire’s FOSRENOL patents. A Markman hearing was held on June 17, 2010. In April 2011, Shire and Barr reached a settlement which provides Barr with a license to market its own generic version of FOSRENOL in the US but only after October 1, 2021, or earlier under certain circumstances. No payments to Barr are involved with the settlement. As a result of the settlement, the lawsuit against Barr was subsequently dismissed. The lawsuit against Mylan-Matrix has been dismissed, and consequently, Mylan-Matrix may enter the market upon FDA approval of its version of generic FOSRENOL. No trial date has been set with respect to Natco and a stay of approval of up to 30 months remains in effect.

In December 2010, Shire was notified that Alkem Laboratories Ltd. (“Alkem”) submitted an ANDA under the Hatch-Waxman Act seeking permission to market generic versions of all approved strengths of FOSRENOL. Within the requisite 45 day period, Shire filed lawsuits in both the US District Court for the Southern District of New York and the US District Court for the Northern District of Illinois against Alkem for infringement of certain of Shire’s FOSRENOL patents. The filing of the lawsuits triggered a stay of approval of this ANDA for up to 30 months. No trial date has been set.

LIALDA

In May 2010 Shire was notified that Zydus Pharmaceuticals USA, Inc. (“Zydus”) submitted an ANDA under the Hatch-Waxman Act seeking permission to market a generic version of LIALDA. Within the requisite 45 day period, Shire filed a lawsuit in the US District Court for the District of Delaware against Zydus and Cadila Healthcare Limited, doing business as Zydus Cadila. The filing of the lawsuit triggered a stay of approval of the ANDA for up to 30 months. A Markman hearing is scheduled for April 26, 2012. A trial is scheduled for October 8, 2012.

ADDERALL XR

On November 1, 2010 Impax filed suit against Shire in the US District Court for the Southern District of New York claiming that Shire is in breach of its supply contract for the authorized generic version of ADDERALL XR. Shire’s ability to supply this product 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 damages. Shire has filed a counterclaim against Impax seeking damages and a declaratory judgment that Shire has satisfied its obligations under the supply contract. A trial is scheduled for April 10, 2012.

In February 2011, Shire was notified that Watson Laboratories, Inc. (“Watson Laboratories”) submitted an ANDA under the Hatch-Waxman Act seeking permission to market a generic version of all approved strengths of ADDERALL XR. This new ANDA is not covered under the existing settlement agreements entered into in November 2007 between Shire and Watson Pharmaceuticals, Inc (the “Settlement Agreements”). The Settlement Agreements cover a different ANDA and do not provide any license for Watson Laboratories to sell the products covered in Watson Laboratories’ new ANDA. Within the requisite 45 day period, Shire filed a lawsuit in the U.S. District Court for the Southern District of New York against Watson Pharmaceuticals, Inc., Watson Laboratories, Inc.-Florida, Watson Pharm, Inc., Andrx Corporation, and Andrx Pharmaceuticals, L.L.C. for infringement of certain of Shire’s ADDERALL XR patents and also for breach of contract in connection with the Settlement Agreements. The filing of the lawsuit triggered a stay of approval of this ANDA for up to 30 months. No trial date has been set.

Subpoena related to ADDERALL XR, DAYTRANA and VYVANSE

On September 23, 2009 the Company received a civil 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 investigation covers whether Shire engaged in off-label promotion and other conduct that may implicate the civil False Claims Act. Shire is cooperating fully with this investigation. At this time, Shire is unable to predict the outcome or duration of this investigation.

15. 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. 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, Pounds Sterling, 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, 2011 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 were in US dollar money market and liquidity funds.

The Company incurs interest at a fixed rate of 2.75% on the Company’s $1,100 million principal amount of convertible bonds due 2014.

During the nine months to September 30, 2011 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.

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 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’s revenues from product sales are mainly governed by agreements with major pharmaceutical wholesalers and relationships with other pharmaceutical distributors and retail pharmacy chains. For the year to December 31, 2010 there were two customers in the US who accounted for 44% of the Company’s product sales. However, such customers

typically have significant cash resources and as such the risk from concentration of credit is considered minimal. The Company has taken steps to manage any credit risk associated with these transactions and operates clearly defined credit evaluation procedures.

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, Pounds Sterling, Euro and Canadian dollar. 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. The foreign exchange contracts have not been designated as hedging instruments.

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

At September 30, 2011 the Company had 26 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,
		2011		2010
			$’M		$’M
Assets	Prepaid expenses and other current assets		5.6		3.7
Liabilities	Other current liabilities		2.3		2.7

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

	Location of net gain/(loss) recognized in income	Amount of net gain/(loss) recognized in income
Nine months to		September 30,		September 30,
		2011		2010
			$’M		$’M
Foreign exchange contracts	Other income, net		10.5		(21.3	)

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

16. Fair value measurement

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

At September 30, 2011 and December 31, 2010 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
At September 30, 2011	$'M		$'M		$'M		$'M		$'M
Financial assets:
Available-for-sale securities(1)		8.3		8.3		8.3		-		-
Contingent consideration receivable (2)		45.8		45.8		-		-		45.8
Foreign exchange contracts		5.6		5.6		-		5.6		-

Financial liabilities:
Foreign exchange contracts		2.3		2.3		-		2.3		-

			Total		Level 1		Level 2		Level 3
At December 31, 2010	$'M		$'M		$'M		$'M		$'M
Financial assets:
Available-for-sale securities(1)		83.9		83.9		83.9		-		-
Contingent consideration receivable (2)		61.0		61.0		-		-		61.0
Foreign exchange contracts		3.7		3.7		-		3.7		-

Financial liabilities:
Foreign exchange contracts		2.7		2.7		-		2.7		-

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

(2)	Contingent consideration receivable is included within Prepaid expenses and other current assets and Other non-current assets 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.

Contingent consideration receivable – the fair value of the contingent consideration receivable has been estimated using the income approach (using a discounted cash flow method). This discounted cash flow approach uses significant unobservable inputs, such as future sales of the divested product, relevant contractual royalty rates, an appropriate discount rate and assumed weightings applied to scenarios used in deriving a probability weighted fair value.

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 Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3)

The change in the fair value of the Company’s contingent consideration receivable, which is measured at fair value on a recurring basis using significant unobservable inputs (Level 3), is as follows:

	Contingent consideration receivable
	2011
	$'M

Balance at January 1,		61.0
Loss recognized in the income statement due to change in fair value during the period		(3.9	)
Reclassification of amounts due from Noven to Other receivables within Other current assets		(12.0	)
Foreign exchange translation recorded to other comprehensive income		0.7

Balance at September 30,		45.8

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, 2011 and December 31, 2010 of the Company’s financial assets and liabilities which are not measured at fair value on a recurring basis are as follows:

September 30, 2011

December 31, 2010

Carrying

amount

Fair value

amount

Fair value

$’M

Financial liabilities:

Convertible bonds

1,100.0

1,250.2

1,100.0

1,139.8

Building financing obligation

8.3

9.8

8.4

8.2

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.

17. Earnings per share

The following table reconciles net income 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,
	2011		2010		2011		2010
		$’M		$’M		$’M		$’M
Amounts attributable to Shire plc shareholders
Numerator for basic earnings per share		192.9		96.3		609.7		422.7
Interest on convertible bonds, net of tax (1)		8.4		-		25.2		25.2
Numerator for diluted earnings per share		201.3		96.3		634.9		447.9


Weighted average number of shares:
	Millions		Millions		Millions		Millions
Basic(2)		551.3		547.0		551.2		546.1
Effect of dilutive shares:
Share based awards to employees(3)		9.0		9.7		10.4		10.4
Convertible bonds 2.75% due 2014(4)		33.5		-		33.4		33.2
Diluted		593.8		556.7		595.0		589.7

(1)	For the three months period ended September 30, 2010 Interest on 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,
	2011		2010		2011		2010
	No. of shares		No. of shares		No. of shares		No. of shares
	Millions		Millions		Millions		Millions
Share awards(1)		3.2		3.6		3.9		8.9
Convertible bonds 2.75% due 2014(2)		-		33.2		-		-

(1)

Certain stock options have been excluded from the calculation of diluted EPS because (a) their exercise prices exceeded Shire plc’s average share price during the calculation period or (b) satisfaction of the required performance/market conditions cannot be measured until the conclusion of the performance period.

(2)	For the three month period ended September 30, 2010 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.

18. Segmental reporting

Shire’s internal financial reporting is in line with its business unit and management reporting structure. In the third quarter of 2011, following the acquisition of ABH, an organizational realignment was carried out. Following this re-organization the Company now has three business units and three reporting segments: SP, HGT and RM. The RM segment currently comprises the ABH business. The SP, HGT and RM 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 three 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		RM			All Other			Total
3 months to September 30, 2011		$’M		$’M		$’M			$’M			$’M
Product sales		658.0		310.4		50.0			-			1,018.4
Royalties		45.2		-		-			17.6			62.8
Other revenues		3.6		0.3		-			1.0			4.9
Total revenues		706.8		310.7		50.0			18.6			1,086.1

Cost of product sales(1)		88.4		59.9		18.2			-			166.5
Research and development(1)		121.6		76.5		3.4			-			201.5
Selling, general and administrative(1)		273.8		85.3		30.2			62.8			452.1
Loss on sale of product rights		0.3		-		-			-			0.3
Reorganization costs		3.2		-		-			1.8			5.0
Integration and acquisition costs		1.7		-		3.6			-			5.3
Total operating expenses		489.0		221.7		55.4			64.6			830.7
Operating income/(loss)		217.8		89.0		(5.4	)		(46.0	)		255.4

Total assets		2,527.9		1,835.2		972.7			729.8			6,065.6
Long-lived assets(2)		136.2		703.7		20.2			61.1			921.2
Capital expenditure on long-lived assets(2)		12.8		30.1		0.5			3.7			47.1

(1)

Depreciation from manufacturing plants ($10.8 million) and amortization of favorable manufacturing contracts ($0.5 million) is included in Cost of product sales; depreciation of research and development assets ($5.6 million) and impairment of certain IPR&D intangible assets in the SP reporting segment ($16.0 million) is included in Research and development; and all other depreciation and amortization ($63.1 million) is included in Selling, general and administrative.

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

	SP		HGT		RM		All Other			Total
3 months to September 30, 2010		$’M		$’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		RM			All Other			Total
9 months to September 30, 2011		$’M			$’M		$’M			$’M			$’M
Product sales		1,948.8			900.2		52.0			-			2,901.0
Royalties		134.6			-		-			65.2			199.8
Other revenues		15.9			0.9		-			3.6			20.4
Total revenues		2,099.3			901.1		52.0			68.8			3,121.2

Cost of product sales(1)		264.0			152.2		18.5			-			434.7
Research and development(1)		329.3			223.5		3.5			-			556.3
Selling, general and administrative(1)		833.8			257.3		31.5			172.7			1,295.3
Loss on sale of product rights		3.8			-		-			-			3.8
Reorganization costs		8.2			-		-			9.8			18.0
Integration and acquisition costs		(2.6	)		-		10.5			-			7.9
Total operating expenses		1,436.5			633.0		64.0			182.5			2,316.0
Operating income/(loss)		662.8			268.1		(12.0	)		(113.7	)		805.2

Total assets		2,527.9			1,835.2		972.7			729.8			6,065.6
Long-lived assets(2)		136.2			703.7		20.2			61.1			921.2
Capital expenditure on long-lived assets(2)		35.9			93.9		0.7			11.4			141.9

(1)

Depreciation from manufacturing plants ($29.0 million) and amortization of favorable manufacturing contracts ($1.4 million) is included in Cost of product sales; depreciation of research and development assets ($16.4 million) and impairment of IPR&D intangible assets in the SP reporting segment ($16.0 million) is included in Research and development; and all other depreciation and amortization ($165.5 million) is included in Selling, general and administrative

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

	SP			HGT		RM		All Other			Total
9 months to September 30, 2010		$’M			$’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 ($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).

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.

Significant events in the three months to September 30, 2011 and recent developments

Products

FIRAZYR – for the treatment of acute attacks of Hereditary Angioedema (“HAE”) in adults

On August 25, 2011 Shire announced that the US Food and Drug Administration (“FDA”) had granted marketing approval for FIRAZYR in the US for treatment of acute attacks of HAE in adults 18 years of age and older. After injection training, patients may self-administer FIRAZYR, the first and only self-administered subcutaneous treatment for acute HAE. FIRAZYR has orphan drug designation status in Europe and the US for the treatment of acute HAE.

VPRIV and REPLAGAL Manufacturing Update

Shire has completed process validation runs for VPRIV at its new Lexington manufacturing facility and intends to file for regulatory approvals starting in November 2011. Approval for the manufacture of VPRIV at the Lexington facility is anticipated in early 2012 and will significantly increase Shire’s manufacturing capacity for VPRIV. In addition, this approval will release further capacity for the manufacturing of REPLAGAL at Shire’s Alewife facility where both VPRIV and REPLAGAL are currently manufactured.

VPRIV – for the treatment of Type 1 Gaucher disease

Shire’s continued focus remains on providing patients with long term, uninterrupted treatment with VPRIV, with approximately 1,200 patients worldwide currently on treatment. Shire has experienced an increase in demand for VPRIV following the recent announcement of CEREZYME shortages in the US and other countries. Shire can accommodate a limited number of additional patients prior to approval of the Lexington facility. Shire will carefully monitor and seek to manage this increased demand until the Lexington facility is approved.

REPLAGAL – for the treatment of Fabry disease

On October 24, 2011 Shire initiated a rolling Biologics License Application (“BLA”) for REPLAGAL in the US, designated Fast Track by the FDA. Shire plans to submit the final BLA sections in November 2011 and will request Priority Review of this submission in response to the continuing supply shortage of FABRAZYME. In 2010 Shire withdrew its BLA in order to gather additional clinical data for REPLAGAL. These data, including data from Shire’s ongoing US Treatment Protocol, have now been evaluated and will be included in the new filing.

Shire is continuing to experience strong demand for REPLAGAL from both patients new to treatment and patients switching from FABRAZYME. Approximately 2,800 patients worldwide are currently receiving REPLAGAL and Shire can accommodate a modest number of new patients per month prior to approval of the Lexington facility. Shire will continue to carefully monitor the addition of new patients to ensure that we can provide patients with uninterrupted long term supply of REPLAGAL at the recommended dose and frequency.

Pipeline

DERMAGRAFT – for the treatment of Venous Leg Ulcers (“VLU”)

On August 24, 2011 Shire announced its preliminary analysis of the top-line results from ABH’s Phase 3 pivotal trial of DERMAGRAFT in subjects with VLU. The international pivotal trial was designed as a prospective, multicenter, randomized, controlled clinical study to assess the product’s safety and efficacy in the promotion of healing VLU. The preliminary analysis of the data was that the trial did not meet the primary endpoint mutually agreed with the FDA and European Medicine Agency (“EMA”).

VYVANSE – for the treatment of Attention Deficit Hyperactivity Disorder (“ADHD”)

On October 21, 2011, Shire reported positive top line results of the first European Phase 3 study of once-daily lisdexamfetamine dimesylate (“LDX”) in children and adolescents aged 6 to 17 years with ADHD. The study, conducted at 48 sites across Europe, demonstrated that a once-daily morning dose of LDX resulted in positive

efficacy results on the primary as well as key secondary endpoints compared to placebo, and a safety profile consistent with the known effects of amphetamine treatment and previous LDX trials. In the study, patients were randomized to receive LDX, osmotic-controlled extended-release methylphenidate (“OROS-MPH”; marketed as CONCERTA and CONCERTA XL by Johnson & Johnson) or placebo, over a period of seven weeks. The CONCERTA arm was included in order to provide data versus the current European standard of care as it is often required for approval and to support appropriate reimbursement. The primary measure was the change in total score of the ADHD-RS-IV of LDX versus placebo with OROS-MPH included as an active control.

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

·	On October 28, 2011 Shire released highlights of its new data from an exploratory study for VYVANSE as adjunctive therapy in adults with significant cognitive impairments with partially or fully remitted MDD. This study met its primary and secondary end points.

·	A Phase 3 clinical trial program to assess the efficacy and safety of VYVANSE as adjunctive therapy in patients with MDD has been initiated.

BOARD CHANGES

Mr Patrick Langlois, who has been a member of Shire’s Board of Directors for 6 years, will be stepping down from the Board and from the Company’s Audit, Compliance & Risk Committee and its Remuneration Committee on the expiry of his current term of office on November 10, 2011. Matthew Emmens, Chairman of Shire, said “We thank Patrick for his contribution to Shire over the past few years”.

Research and development

Products in registration as at September 30, 2011

DERMAGRAFT – for the treatment of DFU

On March 21, 2011, prior to acquisition by the Company, ABH filed a Class IV Medical Device Application to Health Canada to seek approval for DERMAGRAFT for the treatment of DFU.

Products in clinical development as at September 30, 2011

Phase 3

VYVANSE for the treatment of ADHD in the 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 filing of a Marketing Authorization Approval (“MAA”) for VYVANSE in certain countries in Europe in 2011.

VYVANSE for the treatment of inadequate response in MDD

A Phase 3 clinical trial program to assess the efficacy and safety of VYVANSE as adjunctive therapy in patients with MDD has been initiated.

INTUNIV for the treatment of ADHD in the EU

INTUNIV for the treatment of ADHD in children aged 6 to 17 in the EU is in Phase 3 development.

LIALDA/MEZAVANT for the treatment of diverticulitis

Phase 3 worldwide clinical trials investigating the use of LIALDA/MEZAVANT to prevent recurrent attacks of diverticulitis were initiated in 2007 and are ongoing.

RESOLOR for the treatment of chronic constipation in males

A Phase 3 European clinical trial to further assess the efficacy of RESOLOR for the treatment of chronic constipation in males was initiated in 2010 and is ongoing.

RESOLOR for the treatment of opioid-induced constipation

A Phase 3 clinical program to assess the safety and efficacy of RESOLOR in the treatment of opioid-induced constipation in patients with chronic, non-cancer pain was initiated in 2010 and is ongoing.

DERMAGRAFT – for the treatment of VLU

XAGRID for the treatment of essential thrombocythaemia (“ET”) in Japan

A Phase 3 clinical program has been initiated to assess the safety and efficacy of XAGRID in adult ET 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.

Phase 2

VYVANSE for the treatment of Negative Symptoms of Schizophrenia (“NSS”)

Based on discussions with regulatory agencies regarding potential development pathways for VYVANSE as a possible NSS treatment option, Phase 3 studies could begin in 2012.

VYVANSE for the treatment of Excessive Daytime Sleepiness (“EDS”)

Based on discussions with regulatory agencies regarding potential development pathways for VYVANSE as a possible EDS treatment option, Phase 3 studies could begin in 2012.

VYVANSE for the treatment of other non ADHD indications in adults

Shire is conducting a Phase 2 pilot clinical trial to assess the efficacy and safety of VYVANSE for the treatment of Binge Eating Disorder.

SPD - 556 for the treatment of ascites

SPD - 556 (M0002) is a selective Vasopressin V2 receptor antagonist for the treatment of ascites. This compound is ready for Phase 2 clinical trials.

SPD - 557 for the treatment of refractory gastroesophageal reflux disease

SPD - 557 (M0003) is a selective 5-HT4 receptor agonist. An exploratory Phase 2 program to investigate the effect of the product on reflux episodes in patients currently treated with proton pump inhibitors was initiated in the fourth quarter of 2010.

HGT - 4510 for DMD

HGT- 4510 (also referred to as ACE-031) was added to the Shire HGT portfolio in 2010 through an exclusive license in markets outside of North America for the ActRIIB class of molecules being developed by Acceleron. The lead ActRIIB drug candidate, HGT- 4510 is in development for the treatment of patients with DMD. The Phase 2a trial is on hold and clinical safety is under review. This product has been granted orphan designation in the US and the EU.

Phase 1

Carrier Wave molecules for the treatment of pain

Phase 1 clinical development of various molecules for the treatment of pain is ongoing.

Guanfacine Carrier Wave, (“GCW”) for the treatment of various CNS disorders

An improved lead candidate has been selected for development and a Phase 1 program has been initiated to determine safety and tolerability of this compound. The ongoing Phase 1 program will be supportive of potentially three different CNS-related indications: ADHD, hyperactivity in Autism Spectrum Disorder and Pediatric Anxiety.

SPD 535 for the treatment of improvement in potency of arteriovenous access in hemodialysis patients

SPD 535 is in development as a novel molecule with platelet lowering ability and without phosphodiesterase type III inhibition apparent at clinically relevant doses. Data from Phase 1 clinical trials demonstrated positive proof-of-principle with no safety concerns. Work is ongoing on additional Phase 1 studies to support progression to a Phase 2 proof-of-concept program by year end that will target prevention of thrombotic complications associated with arteriovenous access in hemodialysis patients.

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 trial is ongoing. 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. This trial is ongoing.

Products in pre-clinical development as at September 30, 2011

HGT-1110 - for the treatment of Metachromatic Leukodystrophy

Pre-clinical development of a formulation of HGT-1110, expressed from Shire’s human cell platform and suitable for direct delivery to the CNS, is ongoing. The Company has submitted clinical trial applications to several European regulatory authorities. This product has been granted orphan drug designation in the US and the EU.

Other pre-clinical development projects

A number of additional projects are underway in various stages of pre-clinical development for the SP and HGT areas, including programs using Carrier Wave technology, which are primarily focused in the CNS area. More data on these programs is expected throughout 2012.

Development projects discontinued in 2011

The Company has discontinued the following development projects which were previously reported in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010:

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

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

JUVISTA for the improvement of scar appearance

Renovo initiated its first pivotal European Phase 3 trial in scar revision in the fourth quarter of 2008 to support the filing of a European regulatory dossier. On February 11, 2011, Renovo announced its EU Phase 3 trial for JUVISTA in scar revision surgery did not meet its primary or secondary endpoints. On March 2, 2011, Shire terminated its agreement with Renovo.

Results of operations for the three months to September 30, 2011 and 2010

Financial highlights for the three months to September 30, 2011 are as follows:

Product sales were up 28% to $1,018 million (2010: $794 million) as Shire’s existing products continued to demonstrate strong growth even when compared to the very good performance in the third quarter of 2010. In the third quarter of 2011 Shire recognized the first full quarter of DERMAGRAFT sales which contributed six percentage points to product sales growth. On a CER(1) basis, which is a Non GAAP measure, product sales were up 25%.

Product sales in the quarter benefited from higher ADDERALL XR sales, in part due to significantly lower sales deductions following a lowering of the estimate of inventory in the US retail pipeline.

The strong product sales growth more than offset declines in 3TC and ZEFFIX royalties, both of which are now affected by a disagreement with GSK, to give growth in total revenues of 24% to $1,086 million in the quarter (2010: $874 million).

Operating income increased by 64% to $255 million (2010: $156 million). Operating income in the third quarter of 2010 included an up-front payment of $45 million to Acceleron Pharma Inc. (“Acceleron”) and impairment charges of $43 million relating to the divestment of DAYTRANA. Excluding these charges, operating expenses increased at broadly the same rate as the increase in product sales compared to the third quarter of 2010. This increase was due to increased investment in Shire’s R&D programs, higher SG&A expenditure as the Company absorbs the operating costs of ABH and Movetis (neither of which were incurred in the third quarter of 2010), in addition to costs of supporting product launches and Shire’s continued growth.

Diluted earnings per ADS were up 96% to $1.02 (2010: $0.52), due to both higher operating and other income (other income benefiting from a gain of $24 million on disposal of substantially all of Shire’s holding in Vertex).

The Company’s management analyzes product sales and revenue growth for certain products sold in markets outside of the US on a constant exchange rate (“CER”) basis, so that product sales and revenue growth can be considered excluding movements in foreign exchange rates. Product sales and revenue growth on a CER basis is a Non-GAAP financial measure (“Non-GAAP CER”), computed by comparing 2011 product sales and revenues restated using 2010 average foreign exchange rates to 2010 actual product sales and revenues. Average exchange rates for the three and nine months to September 30, 2011 were $1.61:£1.00 and $1.41:€1.00 (2010: $1.55:£1.00 and $1.29:€1.00) and $1.61:£1.00 and $1.41:€1.00 (2010: $1.54:£1.00 and $1.32:€1.00) respectively.

Results of operations for the three months to September 30, 2011 and 2010

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,
	2011		2010		change
	$'M		$'M		%
Product sales		1,018.4		794.3		+28
Royalties		62.8		76.5		-18
Other revenues		4.9		3.5		+40
Total		1,086.1		874.3		+24

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
	2011		2010		growth		growth		growth1			share1
	$'M		$'M		%		%		%			%
SP
ADHD
VYVANSE		199.7		151.2		+32		+32		+20			16
ADDERALL XR		149.9		99.7		+50		+50		+8			7
INTUNIV		56.1		37.3		+50		+50		+59			4
EQUASYM		5.1		5.7		-11		-15		n/a			n/a	3
DAYTRANA		-		14.7		n/a		n/a		n/a			n/a

Gastrointestinal ("GI")
LIALDA / MEZAVANT		89.7		76.0		+18		+17		+7			21
PENTASA		55.9		57.1		-2		-2		-4			15
RESOLOR		1.5		-		n/a		n/a		n/a	3		n/a	3


General Products
FOSRENOL		40.5		45.2		-10		-14		-17			5
XAGRID		23.3		20.5		+14		+5		n/a			n/a	2
CARBATROL		12.3		20.3		-39		-40		-45			8
Other product sales		24.0		25.3		-5		-9		n/a			n/a
		658.0		553.0		+19

HGT
REPLAGAL		129.0		92.1		+40		+31		n/a	3		n/a	3
ELAPRASE		109.6		96.8		+13		+7		n/a	2		n/a	2
VPRIV		64.6		49.5		+31		+27		n/a	2		n/a	2
FIRAZYR		7.2		2.9		+148		+129		n/a	2		n/a	2
		310.4		241.3		+29
RM
DERMAGRAFT		50.0		-		n/a		n/a		n/a	2		n/a	2
		50.0		-		n/a
Total product sales		1,018.4		794.3		+28

(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, 2011.

(2)	IMS NPA Data not available.

(3)	Not sold in the US in the third quarter of 2011.

Specialty Pharmaceuticals

VYVANSE – ADHD

The growth in VYVANSE product sales resulted from higher prescription demand, due to growth in the US ADHD market and increases to VYVANSE’s share of that market, in addition to the effect of a price increase taken since the third quarter of 2010. These positive factors were partially offset by higher sales deductions in the third quarter of 2011 compared to the third quarter of 2010.

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

ADDERALL XR – ADHD

Product sales for ADDERALL XR increased due to higher prescription demand, due primarily to growth in the US ADHD market and lower sales deductions. Sales deductions as a percentage of gross product sales (47% for the quarter) were significantly lower than the third quarter of 2010 (60%) and the first half of 2011 (61%), due primarily to a lowering of the estimate of inventory in the US retail pipeline, and the related sales deduction reserve. We expect that sales deductions will be between 60-65% of gross product sales for the fourth quarter.

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

INTUNIV – ADHD

INTUNIV product sales were up 50% compared to the third quarter of 2010 primarily driven by strong growth in prescription demand compared to the third quarter of 2010. The growth in product sales was marginally less than the increase in US prescription demand due to de-stocking in the third quarter of 2011 compared to stocking in the third quarter of 2010 and slightly higher sales deductions as a percentage of product sales in the third quarter of 2011.

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

LIALDA/MEZAVANT product sales continued to grow in the third quarter of 2011, driven primarily by increased US prescription demand due to higher US market share and the effect of price increases taken since the third quarter of 2010, partially offset by customer destocking in the third quarter of 2011.

Litigation proceedings regarding Shire’s LIALDA 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 decrease in PENTASA product sales was driven by a decrease in US prescription demand as well as higher destocking in the third quarter of 2011 as compared to the third quarter of 2010. This decrease was partially offset by price increases and lower sales deductions as compared to the third quarter of 2010.

FOSRENOL – Hyperphosphatemia

Product sales of FOSRENOL decreased due to the combined effect of lower US prescription demand resulting from a fall in market share and higher sales deductions in the third quarter of 2011 as compared to the third quarter of 2010.

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

REPLAGAL – Fabry disease

The growth in REPLAGAL product sales was driven by the treatment of new patients, being both naïve patients and switches from FABRAZYME. Reported REPLAGAL sales also benefited from favorable foreign exchange, due to the weaker US dollar in the third quarter of 2011 compared to the same period in 2010.

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

ELAPRASE – Hunter syndrome

Product sales for ELAPRASE increased as a result of increased patients on therapy across all regions in which ELAPRASE is sold. Reported ELAPRASE sales also benefited from favorable foreign exchange.

VPRIV – Gaucher disease

VPRIV product sales growth was driven by the treatment of new patients, being both naïve patients and switches from CEREZYME. Reported VPRIV sales also benefited from favorable foreign exchange.

Regenerative Medicine

DERMAGRAFT –DFU

DERMAGRAFT(1) continues to see strong revenue growth in the US, up 27% compared to the third quarter of 2010. The growth resulted from a combination of an expanding US diabetic population, continued adoption of DERMAGRAFT as an efficacious, cost-effective treatment for DFU, and the continued addition of sales representatives to market the product.

(1)	Shire acquired DERMAGRAFT through its acquisition of ABH in the second quarter of 2011.

Royalties

The following table provides an analysis of Shire’s royalty income:

	3 months to		3 months to
	September 30,		September 30,
	2011		2010		Change
	$'M		$'M		%
ADDERALL XR		22.9		18.0		+27
3TC and ZEFFIX		17.3		40.6		-57
FOSRENOL		10.9		7.0		+56
Others		11.7		10.9		+7
Total		62.8		76.5		-18

Royalty income decreased in the third quarter of 2011 compared to the third quarter of 2010 as higher royalties on ADDERALL XR and FOSRENOL were more than offset by lower royalties from 3TC and ZEFFIX.

Royalty income from 3TC and ZEFFIX continues to be adversely impacted by increased competition from other products. Additionally, in the third quarter of 2011 Shire has continued to not recognize royalty income for 3TC for certain territories due to a disagreement between GSK and Shire about how the relevant royalty rate should be applied given the expiry dates of certain patents. In the third quarter of 2011 this disagreement extended to ZEFFIX, and accordingly Shire has not recognized ZEFFIX royalty income for the affected territories. GSK and Shire continue to hold discussions in order to clarify this issue.

Cost of product sales

Cost of product sales increased to $166.5 million for the three months to September 30, 2011 (16% of product sales), up from $112.7 million in the corresponding period in 2010 (2010: 14% of product sales). The cost of product sales as a percentage of product sales increased in the third quarter of 2011 compared to the same period in 2010, due to the inclusion of DERMAGRAFT (including the unwind of the fair value adjustment for DERMAGRAFT inventory recorded on acquisition) and the impact of a $10.0 million inventory write down of expired ELAPRASE unpurified bulk material (which was not prioritised for purification as capacity was directed towards meeting demand for REPLAGAL and VPRIV).

For the three months to September 30, 2011 cost of product sales included depreciation of $10.8 million (2010: $8.5 million) and amortization of $0.5 million (2010: $0.4 million).

R&D

R&D expenditure increased to $201.5 million for the three months to September 30, 2011 (20% of product sales), compared to $197.9 million in the corresponding period in 2010 (25% of product sales). In the three months to September 30, 2010 R&D expense included an up-front payment of $45.0 million made to Acceleron. Excluding this up-front payment to Acceleron R&D increased by $48.6 million due to growing investment in a number of targeted R&D programs, including Sanfilippo A and other early stage development programs, in addition to increased investment in new uses for VYVANSE. R&D in the third quarter of 2011 also included expenditure on the development programs acquired with Movetis and ABH, and an impairment of $16.0 million in respect of certain IPR&D assets, none of which were incurred in the third quarter of 2010.

R&D in the three months to September 30, 2011 also included depreciation of $5.6 million (2010: $4.4 million), and an impairment charge of $16.0 million (2010: $nil).

SG&A

SG&A expenditure increased to $452.1 million (44% of product sales) for the three months to September 30, 2011 from $392.4 million (49% of product sales) in the corresponding period in 2010. In the three months to September 30, 2010 SG&A expense included an impairment charge of $42.7 million to write down the DAYTRANA intangible asset to its fair value less costs to sell following agreement to divest the product to Noven Pharmaceuticals Inc. (“Noven”). Excluding this charge, SG&A increased by $102.4 million as the Company continues to support the growth of its existing and newly launched products. SG&A in the three months to September 30, 2011 also included expenditure for ABH and Movetis which was not incurred in the same period in 2010.

For the three months to September 30, 2011 SG&A included depreciation of $16.7 million (2010: $16.1 million) and amortization of $46.4 million (2010: $31.2 million).

Reorganization costs

For the three months to September 30, 2011 the Company recorded reorganization costs of $5.0 million (2010: $9.7 million) relating to the transfer of manufacturing from its Owings Mills facility and the establishment of an international commercial hub in Switzerland.

Integration and acquisition costs

For the three months to September 30, 2011 Shire recorded integration and acquisition costs of $5.3 million (2010: $5.8 million), which related to the acquisition and integration of ABH ($3.6 million) and the integration of Movetis ($1.7 million). In 2010 integration and acquisition costs solely related to the acquisition of Movetis.

Interest expense

For the three months to September 30, 2011 the Company incurred interest expense of $9.7 million (2010: $8.3 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, 2011 Shire recognized other income, net of $15.6 million (2010: $0.8 million) which includes a gain of $23.5 million arising on the disposal of substantially all of Shire’s holding in Vertex (Shire received these shares as partial consideration for its investment in ViroChem following ViroChem being acquired by Vertex). This gain was partially offset by the impact of increased foreign exchange losses arising in the third quarter of 2011, reflecting volatility in a number of currencies to which Shire has exposure.

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 recognised. In the three months to September 30, 2011 the effective tax rate was 27% (2010: 35%).

The effective rate of tax in the three months to September 30, 2011 was lower than the three months to September 30, 2010 due to the up-front payment of $45.0 million to Acceleron and the intangible asset impairment charge for DAYTRANA. Taken together these costs increased the effective tax rate in 2010 as they were either incurred in territories with tax rates lower than Shire’s effective rate or in territories where the establishment of valuation allowances precluded the recognition of any tax benefit.

Results of operations for the nine months to September 30, 2011 and 2010

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,
	2011		2010		change
	$'M		$'M		%
Product sales		2,901.0		2,276.8		+27
Royalties		199.8		254.5		-21
Other revenues		20.4		8.6		+137
Total		3,121.2		2,539.9		+23

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
	2011		2010		growth		growth		growth1			share1
	$'M		$'M		%		%		%			%
SP
ADHD
VYVANSE		587.9		453.6		+30		+29		+21			16
ADDERALL XR		408.0		271.9		+50		+50		+12			7
INTUNIV		157.6		123.0		+28		+28		+90			4
EQUASYM		15.6		16.3		-4		-10		n/a			n/a	3
DAYTRANA		-		49.4		n/a		n/a		n/a			n/a

GI
LIALDA/MEZAVANT		276.0		209.2		+32		+31		+10			21
PENTASA		186.2		175.9		+6		+6		-2			15
RESOLOR		4.0		-		n/a		n/a		n/a			n/a	3

General Products
FOSRENOL		127.0		137.4		-8		-11		-14			5
XAGRID		69.2		65.4		+6		-1		n/a			n/a	2
CARBATROL		45.6		63.4		-28		-28		-23			8
Other product sales		71.7		80.2		-11		-15		n/a			n/a
		1,948.8		1,645.7		+18

HGT
REPLAGAL		354.3		242.0		+46		+38		n/a	3		n/a	3
ELAPRASE		340.9		297.4		+15		+10		n/a	2		n/a	2
VPRIV		186.9		84.0		+123		+117		n/a	2		n/a	2
FIRAZYR		18.1		7.7		+135		+118		n/a	2		n/a	2
		900.2		631.1		+43
RM
DERMAGRAFT		52.0		-		n/a		n/a		n/a	2		n/a	2
		52.0		-		n/a
Total product sales		2,901.0		2,276.8		+27

(1)	Data provided by IMS NPA. Exit market share represents the average monthly US market share in the month ended September 30, 2011.

(2)	IMS NPA Data not available.

(3)	Not sold in the US in the nine months to September 30, 2011.

Specialty Pharmaceuticals

VYVANSE – ADHD

of 2010. These positive factors were partially offset by higher sales deductions in the nine months ended September 30, 2011 compared to the same period in 2010.

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

ADDERALL XR – ADHD

Product sales for ADDERALL XR increased due to higher prescription demand, due primarily to growth in the US ADHD market, a price increase taken in the first quarter of 2011, the effects of higher stocking and lower sales deductions as a percentage of branded gross sales. In the nine months to September 30, 2011 sales deductions as a percentage of gross product sales (57%) were lower than the same period in 2010 (66%), due primarily to a lowering of the estimate of inventory in the US retail pipeline, and the related sales deduction reserve in the third quarter of 2011. We expect that sales deductions will be between 60-65% of gross product sales for the fourth quarter of 2011.

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

INTUNIV – ADHD

INTUNIV product sales increased primarily due to strong growth in prescription demand and a price increase taken in the second quarter of 2011. The growth in product sales was less than the increase in US prescription demand due to higher sales deductions in the nine months ended September 30, 2011 compared to the same period in 2010 and the inclusion in 2010 product sales of previously deferred revenue relating to initial stocking shipments made in 2009.

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

LIALDA/MEZAVANT product sales continued to grow in the nine months ended September 30, 2011, driven primarily by an increase in LIALDA’s share of the US market, the effect of a price increase taken in the fourth quarter of 2010 and minimal stocking in the nine months ended September 30, 2011 compared to destocking in the same period in 2010.

Litigation proceedings regarding Shire’s LIALDA 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 driven by price increases taken since the first half of 2010 and an increase in non-retail demand, which together more than offset the decline in US prescription demand.

FOSRENOL – Hyperphosphatemia

Product sales of FOSRENOL decreased due to a combined effect of lower US prescription demand, due to a fall in market share, and higher sales deductions in 2011 compared to 2010.

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

REPLAGAL – Fabry disease

The growth in REPLAGAL product sales was driven by the treatment of new patients being both naïve patients and switches from FABRAZYME. REPLAGAL sales also benefited from favorable foreign exchange.

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

ELAPRASE – Hunter syndrome

The growth in sales of ELAPRASE was primarily driven by increased volumes across all regions in which ELAPRASE is sold. Reported ELAPRASE sales also benefited from favorable foreign exchange.

VPRIV – Gaucher disease

VPRIV has seen significant growth since its approval in the US in the first quarter of 2010 and in Europe in the third quarter of 2010. Growth in patients being treated with VPRIV continues, driven both by new naïve patients and those switching from CEREZYME. VPRIV sales also benefited from favorable foreign exchange.

Regenerative Medicine

DERMAGRAFT – DFU

DERMAGRAFT(1) continues to see strong revenue growth in the US, up 37% compared to the nine months to September 30, 2010. The growth resulted from a combination of an expanding US diabetic population, continued adoption of DERMAGRAFT as an efficacious, cost-effective treatment for DFU, and the continued addition of sales representatives to market the product.

(1) Shire acquired DERMAGRAFT through its acquisition of ABH in the second quarter of 2011.

Royalties

The following table provides an analysis of Shire’s royalty income:

	9 months to		9 months to
	September 30,		September 30,
	2011		2010		Change
	$'M		$'M		%
ADDERALL XR		66.6		86.3		-23
3TC and ZEFFIX		64.1		115.3		-44
FOSRENOL		31.4		18.0		+74
Other		37.7		34.9		+8
Total		199.8		254.5		-21

Royalty income decreased in the nine months to September 30, 2011 compared to the same period in 2010 as lower royalties on ADDERALL XR, 3TC and ZEFFIX more than offset higher royalty income from FOSRENOL.

Royalty income from ADDERALL XR decreased in the nine months to September 30, 2011 due to the effect of royalties received in the nine months to September 30, 2010 on launch shipments of Impax’s authorized generic version of ADDERALL XR which were not repeated in 2011.

Royalty income from 3TC and ZEFFIX continues to be adversely impacted by increased competition from other products. Additionally, from the second quarter of 2011 Shire has not recognized 3TC royalties for certain territories, and reversed 3TC royalty income recognized in the prior two quarters, due to a disagreement between GSK and Shire about how the relevant royalty rate should be applied given the expiry dates of certain patents. In the third quarter of 2011 this disagreement extended to ZEFFIX, and accordingly Shire has not recognized ZEFFIX royalty income for the affected territories. GSK and Shire continue to hold discussions in order to clarify this issue.

FOSRENOL royalties increased in the nine months to September 30, 2011 due to higher demand for the product by Shire’s Japanese partner given supply issues of a competitor resulting from the earthquakes in Japan earlier in 2011.

Cost of product sales

Cost of product sales increased to $434.7 million for the nine months to September 30, 2011 (15% of product sales), up from $333.7 million in the corresponding period in 2010 (2010: 15% of product sales). The cost of product sales as a percentage of product sales has remained constant in the nine months to September 30, 2011 compared to the same period in 2010. The effect of the inclusion of DERMAGRAFT (including the unwind of the fair value adjustment for DERMAGRAFT inventory recorded on acquisition) and a $10.0 million inventory write down of expired ELAPRASE unpurified bulk material in 2011, which was not prioritised for purification as capacity was directed towards meeting

demand for REPLAGAL and VPRIV, has been offset by product sales growth from higher margin products and lower costs incurred on the transfer of manufacturing from Owings Mills.

For the nine months to September 30, 2011 cost of product sales included depreciation of $29.0 million (2010: $26.9 million) and amortization of $1.4 million (2010: $1.3 million).

R&D

R&D expenditure increased to $556.3 million for the nine months to September 30, 2011 (19% of product sales), compared to $475.9 million in the corresponding period in 2010 (21% of product sales). R&D 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. Excluding this up-front payment, R&D increased by $125.4 million in the nine months to September 30, 2011 due to increased investment in a number of targeted R&D programs, including Sanfilippo A and early stage development programs, in addition to increased investment in new uses for VYVANSE. R&D in the nine months to September 30, 2011 also included expenditure on the development programs acquired with Movetis and ABH, and an impairment in respect of certain IPR&D assets of $16.0 million, which were not incurred in the same period in 2010.

R&D in the nine months to September 30, 2011 also included depreciation of $16.4 million (2010: $11.6 million), and an impairment charge of $16.0 million (2010: $nil).

SG&A

SG&A expenses increased to $1,295.3 million (45% of product sales) for the nine months to September 30, 2011 from $1,106.7 million (49% of product sales) in the corresponding period in 2010. In the nine months to September 30, 2010 SG&A included an impairment charge of $42.7 million to write down the DAYTRANA intangible asset to its fair value less costs to sell. Excluding this impairment charge SG&A increased by $231.3 million as the Company supported the growth of its existing and newly launched products. Additionally, SG&A increased in 2011 due to the inclusion of costs for Movetis and ABH which were not incurred in the same period in 2010.

For the nine months to September 30, 2011 SG&A included depreciation of $46.4 million (2010: $49.0 million) and amortization of $119.1 million (2010: $99.6 million).

Reorganization costs

For the nine months to September 30, 2011 the Company recorded reorganization costs of $18.0 million (2010: $23.3 million) relating to the transfer of manufacturing from its Owings Mills facility and the establishment of an international commercial hub in Switzerland.

Integration and acquisition costs

For the nine months to September 30, 2011 Shire recorded integration and acquisition costs of $7.9 million (2010: $6.4 million), relating to the acquisition and integration of ABH ($10.5 million), the integration of Movetis ($5.6 million), offset by an adjustment to contingent consideration payable for EQUASYM ($8.2 million).

Interest expense

For the nine months to September 30, 2011 the Company incurred interest expense of $28.8 million (2010: $25.6 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 income, net

For the nine months to September 30, 2011 the Company recorded Other income of $15.9 million (2010: $9.0 million). Other income in the nine months to September 30, 2011 included a gain of $23.5 million on disposal of substantially all of Shire’s holding in Vertex (Shire received these shares as partial consideration for its investment in ViroChem following ViroChem being acquired by Vertex). This gain was partially offset by increased foreign exchange losses arising in the third quarter of 2011, reflecting volatility in a number of currencies to which Shire has exposure.

Other income in 2010 included a gain of $11.1 million on disposal of Shire’s investment in ViroChem.

Taxation

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 recognised. In the nine months to September 30, 2011 the effective tax rate was 24% (2010: 28%).

The effective rate of tax in the nine months to September 30, 2011 was lower than the nine months to September 30, 2010 due to the up-front payment of $45 million to Acceleron and the intangible asset impairment charge for DAYTRANA. Taken together these costs increased the effective tax rate in 2010 as they were incurred in territories with tax rates lower than Shire’s effective rate or in territories where the establishment of valuation allowances precluded the recognition of any tax benefit.

Financial condition at September 30, 2011 and December 31, 2010

Cash & Cash equivalents

Cash and cash equivalents decreased by $274.2 million to $276.4 million (December 31, 2010: $550.6 million). Cash generated by operating activities of $664.2 million and proceeds of $94.7 million on disposal of substantially all of Shire’s holding in Vertex were offset by the cost of acquiring ABH, other capital expenditure, the purchase of shares by the ESOT and the dividend payment.

Accounts receivable, net

Accounts receivable, net increased by $152.2 million to $844.7 million (December 31, 2010: $692.5 million) due to increased total revenues in the nine months to September 30, 2011. Days sales outstanding remained constant at 50 days (December 31, 2010: 50 days).

Investment

Investments decreased by $71.5 million to $30.1 million (December 31, 2010: $101.6 million) due to the disposal of substantially all of the Company’s holding in Vertex for a cash consideration of $94.7 million.

Goodwill

Goodwill has increased by $193.7 million to $596.2 million (December 31, 2010: $402.5 million), due to goodwill arising on the acquisition of ABH.

Other Intangible assets, net

Other intangible assets have increased by $582.8 million to $2,561.7 million (December 31, 2010: $1,978.9 million), principally due to intangible assets for DERMAGRAFT product technology of $710.0 million acquired with ABH, offset by intangible asset amortization and impairment charges of $136.5 million.

Convertible bonds – current

Convertible bonds - current have increased by $1,100 million due to the reclassification of the Company’s $1,100 million 2.75% convertible bonds from non-current to current liabilities in the second quarter of 2011, as exercise of the Put Option could require the Company to redeem the Bonds within twelve months of the balance sheet date.

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 certain 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 Medicaid rebate legislation in respect of ADDERALL XR Medicaid rebates for periods prior to October 1, 2010; and the amount of 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 $276.4 million of cash and cash equivalents at September 30, 2011. Substantially all of Shire’s debt relates to its $1,100 million 2.75% convertible bond which matures in 2014, although these bonds include the Put Option which could require repayment of the bonds in 2012. The bonds are currently trading at above par. The Company does not currently consider it likely that the Put Option will be exercised in 2012. However, as the Company could be required to repay the bonds within twelve months of the balance sheet date, the bonds have been classified as a current liability at September 30, 2011 in accordance with US GAAP. In addition, Shire has a RCF of $1,200 million which matures in 2015, which is currently undrawn.

Financing

Shire anticipates that its operating cash flow together with available cash, cash equivalents and the RCF will be sufficient to meet its anticipated future operating expenses, capital expenditures, tax and interest payments and lease obligations as they become due over the next twelve months.

The Company anticipates that its operating cash flow together with availability of the RCF would be sufficient to enable repayment of the bonds if the Put Option was exercised in 2012. In lieu of settling any such redemption wholly in cash, the terms of the bonds also permit the Company to deliver the underlying ordinary shares and, if necessary, a cash top-up amount.

If the Company decides to acquire other businesses, it expects to fund these acquisitions from existing cash resources, the RCF 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, 2011 and December 31, 2010:

	September 30,			December 31,
	2011			2010
		$’M			$’M
Cash and cash equivalents1		276.4			550.6
Convertible debt		1,100.0			1,100.0
Building financing obligation		8.3			8.4
Total debt		1,108.3			1,108.4
Net debt		(831.9	)		(557.8	)

(1) Substantially all of the Company’s cash and cash equivalents are held by foreign subsidiaries (i.e. those subsidiaries incorporated outside of Jersey, Channel Islands, the jurisdiction of incorporation of Shire plc, Shire’s holding company). The amount of cash and cash equivalents held by foreign subsidiaries has not had, and is not expected to have, a material impact on the Company’s liquidity and capital resources.

Cash flow activity

Net cash provided by operating activities for the nine months to September 30, 2011 increased by $52.2 million to $664.2 million (2010: $612.0 million), as higher cash receipts from product revenues and lower cash tax payments were offset by higher payments for sales deductions together with higher cash payments on the increased investment in R&D and SG&A.

Net cash used in investing activities was $762.0 million in the nine months to September 30, 2011, principally relating to the payment of $723.5 million to acquire ABH and expenditure on property, plant and equipment of $135.9 million, offset by proceeds of $94.7 million received on the disposal of substantially all of Shire’s holding in Vertex. Capital expenditure on property, plant and equipment includes $78.0 million on construction work at HGT’s facility at Lexington Technology Park (“LTP”).

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 HGT’s facility at Lexington Technology Park.

Net cash used in financing activities was $176.8 million for the nine months to September 30, 2011, principally due to the dividend payment, the purchase of shares by the ESOT and the repayment of debt acquired with ABH, offset by the tax benefit associated with the exercise of stock options.

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

Obligations and commitments

During the nine months to September 30, 2011 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, 2010.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Note 15 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, 2010 contains a discussion of the Company’s exposure to market and other risks.

ITEM 4. CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in reports that the Company file under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC.

As at September 30, 2011 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 to ensure that information required to be disclosed in reports that the Company file under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC.

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 14 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, 2010.

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

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. RESERVED

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

EXHIBITS

2.01	Agreement and Plan of Merger by and among Shire Pharmaceuticals Group plc, Transkaryotic Therapies, Inc. and Sparta Acquisition Corporation, dated as of April 21, 2005.(1)
2.02	Agreement of Merger dated as of February 20, 2007 among Shire plc, Shuttle Corporation and New River Pharmaceuticals, Inc.(2)
2.03	Business Combination Agreement dated as of July 3, 2008 between Maia Elfte Vermögensverwaltungs GmbH and Jerini AG. (3)
2.04	Heads of Agreement by and among Shire plc and Movetis NV relating to a friendly tender offer, dated August 3, 2010.
2.05	Agreement and Plan of Merger, dated as of May 17, 2011, by and among Shire Pharmaceuticals Inc., ABH Merger Sub Inc., Advanced Biohealing, Inc., and solely for the limited purposes set forth therein, Canaan VII L.P. and Shire plc. (4)
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. (5)
3.02	Form of Article of Association of Shire plc as amended by a special resolution passed on April 26, 2011 and adopted by a special resolution passed on April 26, 2011. (6)
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.(7)
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. (8)
4.03	Form of Ordinary Share Certificate of Shire Limited. (9)
4.04	Form of American Depositary Receipt Certificate of Shire Limited. (10)
4.05	Trust Deed for the New Shire Income Access Trust, dated August 29, 2008. (11)
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. (12)
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. (13)
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). (14)
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. (15)
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. (16)
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. (17)

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. (18)
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. (19)
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. (20)
10.10*	Settlement Agreement, dated August 14, 2006 by and between Shire Laboratories Inc. and Barr. (21)
10.11*	Product Development and License Agreement, dated August 14, 2006 by and between Shire LLC and Duramed Pharmaceuticals, Inc. (22)
10.12*	Product Acquisition and License Agreement, dated August 14, 2006 by and among Shire LLC, Shire plc and Duramed Pharmaceuticals, Inc. (23)
10.13	Service Agreement between Shire plc and Mr Angus Russell, dated March 10, 2004. (24)
10.14	Novation Agreement dated November 21, 2005 relating to the Employment Agreement of Angus Russell dated March 10, 2004. (25)
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. (26)
10.16	Form of Amended and Restated Employment Agreement between Shire plc and Mr Matthew Emmens, dated March 12, 2004. (27)
10.17	Amendment Agreement dated November 21, 2005 relating to the Amended and Restated Employment Agreement of Matthew Emmens dated March 12, 2004. (28)
10.18	Ratification and Guaranty dated November 21, 2005 relating to the Amended and Restated Employment Agreement of Matthew Emmens dated March 12, 2004. (29)
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. (30)
10.20	Ratification and Guaranty dated May 20, 2008 relating to the Amended and Restated Employment Agreement of Matthew Emmens dated March 12, 2004. (31)
10.21	Form of Indemnity Agreement for Directors of Shire Limited. (32)
10.22	Service Agreement between Shire Limited and Mr Angus Russell, dated July 2, 2008. (33)
10.23	Service Agreement between Shire Limited and Mr Graham Hetherington, dated July 2, 2008. (34)
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. (35)
10.25	Amended Agreement dated February 24, 2009 relating to the Product Development and License Agreement dated August 14, 2006. (36)
10.26	Amendment of the Service Agreement of A.C Russell dated January 15, 2010. (37)
10.27	Amendment to the Shire Portfolio Share Plan as approved by the Annual General meeting held on April 27, 2010. (38)
10.28	Multicurrency revolving and swingline facilities agreement as at November 23, 2010 by and among Shire plc & with a number of financial institutions, for which Abbey National Treasury Services Plc (trading as Santander Global Banking and Markets), Bank of America Securities Limited, Barclays Capital, Citigroup Global Markets Limited, Lloyds TSB Bank plc and The Royal Bank of Scotland plc acted as mandated lead arrangers and bookrunners and Credit Suisse AG, London Branch, Deutsche Bank AG, London Branch, Goldman Sachs International, Morgan Stanley Bank, N.A. and Sumitomo Mitsui Banking Corporation, Brussels Branch acted as arrangers.
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.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
*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 2.1 to Shire’s Form 8-K filed on July 1, 2011.
(5)	Incorporated by reference to Exhibit 99.02 to Shire’s Form 8-K filed on October 1, 2008.
(6)	Incorporated by reference to Exhibit 99.02 to Shire’s Form 8-K filed on April 29, 2011.
(7)	Incorporated by reference to Exhibit 4.01 to Shire’s Form 8-K filed on May 23, 2008.
(8)	Incorporated by reference to Exhibit 4.02 to Shire’s Form 8-K filed on May 23, 2008.
(9)	Incorporated by reference to Exhibit 4.03 to Shire’s Form 8-K filed on May 23, 2008.
(10)	Incorporated by reference to Exhibit 4.04 to Shire’s Form 8-K filed on May 23, 2008.
(11)	Incorporated by reference to Exhibit 4.05 to Shire’s Form 10-K filed on February 27, 2009.
(12)	Incorporated by reference to Exhibit 99.1 to Shire’s Form 8-K filed on February 23, 2007.
(13)	Incorporated by reference to Exhibit 10.2 to Shire’s Form 10-Q filed on May 1, 2007.
(14)	Incorporated by reference to Exhibit 10.01 to Shire’s Form 8-K filed on May 23, 2008.
(15)	Incorporated by reference to Exhibit 10.1 to Shire’s Form 10-Q filed on August 2, 2007.
(16)	Incorporated by reference to Exhibit 10.2 to Shire’s Form 10-Q filed on August 2, 2007.
(17)	Incorporated by reference to Exhibit 10.3 to Shire’s Form 10-Q filed on August 2, 2007.
(18)	Incorporated by reference to Exhibit 10.02 to Shire’s Form 8-K filed on May 23, 2008.
(19)	Incorporated by reference to Exhibit 10.03 to Shire’s Form 8-K filed on May 23, 2008.
(20)	Incorporated by reference to Exhibit 10.09 to Shire’s Form 10-K/A filed on May 30, 2008.
(21)	Incorporated by reference to Exhibit 10.1 to Shire’s Form 10-Q filed on November 7, 2006.
(22)	Incorporated by reference to Exhibit 10.2 to Shire’s Form 10-Q filed on November 7, 2006.
(23)	Incorporated by reference to Exhibit 10.3 to Shire’s Form 10-Q filed on November 7, 2006.
(24)	Incorporated by reference to Exhibit 10.11 to Shire’s Form 10-K filed on March 12, 2004.
(25)	Incorporated by reference to Exhibit 10.03 to Shire’s Form 8-K filed on November 25, 2005.
(26)	Incorporated by reference to Exhibit 10.06 to Shire’s Form 8-K filed on May 23, 2008.
(27)	Incorporated by reference to Exhibit 10.13 to Shire’s Form 10-K filed on March 12, 2004.
(28)	Incorporated by reference to Exhibit 10.01 to Shire’s Form 8-K filed on November 25, 2005.
(29)	Incorporated by reference to Exhibit 10.02 to Shire’s Form 8-K filed on November 25, 2005.
(30)	Incorporated by reference to Exhibit 10.04 to Shire’s Form 8-K filed on May 23, 2008.
(31)	Incorporated by reference to Exhibit 10.05 to Shire’s Form 8-K filed on May 23, 2008.

(32)	Incorporated by reference to Exhibit 10.07 to Shire’s Form 8-K filed on May 23, 2008.
(33)	Incorporated by reference to Exhibit 10.22 to Shire’s Form 10-Q filed on November 10, 2008.
(34)	Incorporated by reference to Exhibit 10.23 to Shire’s Form 10-Q filed on November 10, 2008.
(35)	Incorporated by reference to Exhibit 10.24 to Shire’s Form 10-Q filed on November 10, 2008.
(36)	Incorporated by reference to Exhibit 10.25 to Shire’s Form 10-Q filed on May 7, 2009.
(37)	Incorporated by reference to Exhibit 10.26 to Shire’s Form 10-K filed on February 26, 2010.
(38)	Incorporated by reference to Exhibit 10.27 to Shire's Form 10-Q filed on May 6, 2010.

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: November 7, 2011	/s/ Angus Russell
	Angus Russell Chief Executive Officer

Date: November 7, 2011	/s/ Graham Hetherington
	Graham Hetherington Chief Financial Officer