SHIRE PLC
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By: |
/s/ Tatjana May
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Name: |
Tatjana May
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Title: |
General Counsel
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EXHIBIT INDEX
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Number
|
Description
|
99.1
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Press release dated February 13, 2014
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Press Release
|
|
www.shire.com
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Financial Highlights
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Full Year 2013(1)
|
|
|
|
|
Product sales
|
$4,757 million
|
+12%
|
Total revenues
|
$4,934 million
|
+9%
|
|
|
|
Non GAAP operating income
|
$1,860 million
|
+23%
|
US GAAP operating income
|
$1,734 million
|
+66%
|
|
|
|
Non GAAP diluted earnings per ADS
|
$7.66
|
+23%
|
US GAAP diluted earnings per ADS
|
$3.53
|
-10%
|
|
|
|
Non GAAP cash generation
|
$1,781 million
|
+9%
|
Non GAAP free cash flow
|
$1,306 million
|
+4%
|
US GAAP net cash provided by operating activities
|
$1,463 million
|
+6%
|
|
|
|
|
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Full Year 2013
|
|
|
Full Year 2012
|
|
||||||||
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US GAAP
|
Adjustments
|
Non GAAP
|
|
US GAAP
|
Adjustments
|
Non GAAP
|
|
||||||
|
|
$M
|
|
$M
|
|
$M
|
|
|
$M
|
|
$M
|
|
$M
|
|
Product sales
|
|
4,757
|
|
-
|
|
4,757
|
|
|
4,253
|
|
-
|
|
4,253
|
|
Total revenues
|
|
4,934
|
|
-
|
|
4,934
|
|
|
4,527
|
|
-
|
|
4,527
|
|
Operating income
|
|
1,734
|
|
126
|
|
1,860
|
|
|
1,045
|
|
464
|
|
1,509
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per ADS
|
|
$7.36
|
|
$0.30
|
|
$7.66
|
|
|
$4.23
|
|
$1.98
|
|
$6.21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
·
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Product sales from continuing operations in 2013 were up 12% to $4,757 million (2012: $4,253 million).
|
|
·
|
Total revenues from continuing operations were up 9% to $4,934 million (2012: $4,527 million) as the growth in product sales was partially offset, as expected, by lower royalties and other revenues (down 36%).
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|
·
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On a Non GAAP basis (from continuing operations):
|
|
·
|
Non GAAP diluted earnings per ADS from continuing operations increased 23% to $7.66 (2012: $6.21) primarily due to the higher Non GAAP operating income.
|
(1)
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Lisdexamfetamine dimesylate (“LDX”) currently marketed as VYVANSE in the US & Canada, VENVANSE® in Latin America and ELVANSE® in certain territories in the EU for the treatment of Attention Deficit Hyperactivity Disorder (“ADHD”).
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2 |
|
·
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Cash generation, a Non GAAP measure, was 9% higher at $1,781 million (2012: $1,637 million) as higher cash receipts from product sales more than offset payments made in relation to the One Shire reorganization (approximately $42 million) and costs incurred on the closure of Shire’s facility at Turnhout in Belgium (approximately $24 million). The growth in cash generation was also held back compared to the growth in Non GAAP operating income due to a payment to Impax Laboratories Inc. (“Impax”) of $48 million which was accrued in 2012 but not paid until 2013 and higher cash outflows from discontinued operations in 2013.
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|
·
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Net cash (also a Non GAAP measure) at December 31, 2013 was $2,231 million (December 31, 2012: $373 million) reflecting our strong cash generation and the impact of conversion and redemption of our $1.1 billion convertible bond.
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|
·
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After paying for the ViroPharma acquisition Shire’s Non GAAP net debt will be approximately $1.5 billion.
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3 |
Financial Highlights
|
Q4 2013(1)
|
|
|
|
|
Product sales
|
$1,280 million
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+19%
|
Total revenues
|
$1,326 million
|
+12%
|
|
|
|
Non GAAP operating income
|
$510 million
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+29%
|
US GAAP operating income
|
$598 million
|
+389%
|
|
|
|
Non GAAP diluted earnings per ADS
|
$2.26
|
+36%
|
US GAAP diluted earnings per ADS - from continuing operations
|
$2.80
|
+666%
|
|
|
|
Non GAAP cash generation
|
$668 million
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+48%
|
Non GAAP free cash flow
|
$564 million
|
+80%
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US GAAP net cash provided by operating activities
|
$610 million
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+64%
|
|
|
|
|
·
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Product sales from continuing operations grew strongly in Q4 2013 (up 19% to $1,280 million).
|
|
·
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Total revenues from continuing operations were up 12% to $1,326 million (Q4 2012: $1,182 million) as the growth in product sales was partially offset by lower royalties and other revenues (down 56%).
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|
·
|
On a Non GAAP basis (from continuing operations):
|
|
·
|
Non GAAP diluted earnings per ADS from continuing operations increased 36% to $2.26 (Q4 2012: $1.66) primarily due to the higher Non GAAP operating income and a lower effective tax rate on Non GAAP income of 12% (2012: 17%).
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|
·
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Cash generation, a Non GAAP measure, increased by 48% to $668 million (Q4 2012: $452 million) due to higher cash receipts from product sales including significant cash receipts from factored European receivables, which more than offset lower royalty receipts and higher operating expenses in the quarter.
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4 |
·
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On December 2, 2013 Shire announced that it had entered into a new agreement to supply an authorized generic version of ADDERALL XR. Under the agreement, Sandoz Inc. (“Sandoz”) will market an authorized generic version of ADDERALL XR beginning July 1, 2016. From the December 1, 2013 effective date of the agreement through the end of the agreement’s five-year term, Sandoz has agreed to exclusively sell the authorized generic version of ADDERALL XR supplied by Shire. Shire will manufacture and supply Sandoz with all dosage strengths of the authorized generic product. Sandoz will distribute the product in the United States and Shire will receive a royalty based on Sandoz’s sales of the product.
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·
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In the fourth quarter of 2012, following the completion of a small investigator sponsored trial (“IST”), Shire submitted a supplemental Marketing Authorization Application (“MAA”), to the European Medicines Agency seeking approval for FIRAZYR for the treatment of ACE-I AE in Europe. In February 2014, following the review and discussion of the data from this IST with the EU agencies, Shire expects to withdraw its supplemental MAA and to resubmit it with the data from the ongoing Shire sponsored Phase 3 trial which was initiated in the fourth quarter of 2013. This trial will now serve for both EU and US registrations.
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|
·
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On February 6, 2014 Shire announced top-line results from two pivotal Phase 3 investigational studies evaluating the efficacy and safety of LDX versus placebo as an adjunctive treatment for MDD in adults who inadequately responded to antidepressant monotherapy with selective serotonin reuptake inhibitors or serotonin and norepinephrine reuptake inhibitors. LDX did not meet the primary efficacy endpoint versus placebo for either study. The safety profile for LDX in these two studies appears to be generally consistent with the known profile established in studies in adults with ADHD. Based on these clinical trial results, Shire will no longer pursue this clinical development program.
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|
·
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On December 5, 2013 Shire announced top-line results from OPUS-2, a Phase 3 efficacy and safety study. OPUS-2 compared Lifitegrast to placebo administered twice daily for 84 days (12 weeks) in dry eye patients with history of active artificial tear use within 30 days prior to screening. Lifitegrast met the prespecified co-primary endpoint for the patient-reported symptom of eye dryness (change in Eye Dryness Score from baseline to week 12) (p-value<0.0001). Lifitegrast did not meet the prespecified co-primary endpoint for the sign of inferior corneal staining score (change from baseline to Week 12) using fluorescein staining compared with placebo (p-value=0.6186). Shire intends to investigate the full data from OPUS-2 and is planning further interactions with the US Food and Drug Administration (“FDA”) in the first half of 2014 in order to advance this program.
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5 |
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·
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On November 5, 2013 Shire announced positive top-line results from two identically designed randomized placebo-controlled Phase 3 studies evaluating the efficacy and safety of LDX versus placebo in adults with BED. In both studies LDX was found to be statistically superior to placebo on the primary efficacy analysis of the change from baseline at weeks 11 to 12 in terms of number of binge days per week. The safety for LDX in these two studies appears to be generally consistent with the known profile established in studies in adults with ADHD. Shire expects to file a Supplemental New Drug Application with the FDA in the third quarter of 2014.
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|
·
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Shire initiated a pivotal Phase 2/3 trial for SHP609 in the fourth quarter of 2013. SHP609 is in development as an enzyme replacement therapy delivered intrathecally for Hunter syndrome patients with CNS symptoms.
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|
·
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In the fourth quarter of 2013, Shire submitted a Marketing Authorisation to the Ministry of Health, Labour and Welfare (“MHLW”) in Japan, seeking approval for XAGRID in adult essential thrombocythaemia patients treated with cytoreductive therapy who have become intolerant to their current therapy or whose platelet counts have not been reduced to an acceptable level.
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|
·
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In the fourth quarter of 2013, Shire submitted a Marketing Authorisation to the MHLW in Japan, seeking approval for VPRIV for the treatment of adult and pediatric patients with Gaucher disease.
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·
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On February 11, 2014 Shire received approval from the FDA to produce VPRIV drug substance at Shire’s manufacturing facility in Lexington, Massachusetts.
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·
|
On January 24, 2014 Shire acquired all the outstanding shares of ViroPharma for $50 per share in cash, for a total consideration of approximately $4.23 billion. The $50 per share price in the transaction represents a 27% premium to ViroPharma's closing share price of $39.38 on Friday, November 8, 2013, the last trading day prior to the announcement of the acquisition, and a 64% premium to ViroPharma's unaffected share price of $30.47 on September 12, 2013. Shire secured a $2.6 billion fully underwritten short term bank facility, which was reduced to $1.75 billion on December 13, 2013 following the conversion of our $1.1 billion convertible bond. This, in addition to Shire’s cash and cash equivalents ($2.2 billion held at December 31, 2013) and its existing $1.2 billion revolving credit facility is being used to finance the transaction and pay the related fees and expenses. In connection with the completion of the acquisition, on January 24, 2014 ViroPharma commenced a tender offer to repurchase, at the option of each holder, any and all of ViroPharma’s outstanding 2.00% Convertible Senior Notes Due 2017 (the “Convertible Notes”) and notified the holders of their separate right to convert the Convertible Notes at any time until March 10, 2014. The repurchase and payment for conversion of the Convertible Notes forms part of the total consideration.
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6 |
·
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On January 17, 2014 Shire announced that it had sold its DERMAGRAFT business to Organogenesis comprising the key operating assets relating to the development, manufacture and sale of the DERMAGRAFT product. These assets include intellectual property relating to DERMAGRAFT including patents, trademarks and know-how; regulatory filings and registrations relating to DERMAGRAFT; certain manufacturing plant, equipment and materials; DERMAGRAFT product inventory and accounts receivable. These assets had a net book value of $668.5 million at December 31, 2013 before recognizing an impairment of $636.9 million. Shire has generally retained legacy liabilities relating to the DERMAGRAFT business, including the previously announced Department of Justice investigation relating to the sales and marketing practices of Advanced Biohealing, Inc. (now known as Shire Regenerative Medicine, Inc.).
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·
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On November 26, 2013 Shire announced that, in accordance with the terms and conditions of the Bonds, the Company had exercised its option to redeem all outstanding Bonds on December 27, 2013 at par together with interest accrued to that date. As an alternative to the redemption of the Bonds, each Bond holder had the right to exercise conversion rights. On December 16, 2013 Shire announced that an aggregate principal amount of $1,099,050,000 had been voluntarily converted into 33,806,464 Ordinary Shares of the Company and on December 27, 2013 the remaining Bonds in the aggregate principal amount of $950,000 were redeemed. On January 17, 2014 the listing of the Bonds on the Official List of the UK Listing Authority and the admission of the Bonds to trading on the Professional Securities Market of the London Stock Exchange were cancelled.
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·
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On November 11, 2013 following the announcement of the acquisition of ViroPharma, Shire also announced that it was ceasing its share buyback program. The program commenced in October 2012. Since then approximately $300 million has been returned to shareholders, through the purchase of 9,823,536 shares at an average price of £19.46.
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·
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Shire announces in a separate press release issued today that Graham Hetherington, Chief Financial Officer (“CFO”), has notified the Board of Directors of his decision to step down. The Board has agreed that Graham will step down from Shire’s Board of Directors on March 1, 2014. Shire’s Senior Vice President and Group Financial Controller, James Bowling, who joined Shire in 2005, will be appointed as interim Shire CFO on Graham’s stepping down. Shire will start immediately a global search for Graham’s successor.
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·
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On January 23, 2014 Shire announced that Matthew Emmens will retire as Non-Executive Chairman and Susan Kilsby, Chairman of Shire’s Audit, Compliance & Risk Committee will succeed him following the conclusion of Shire’s annual general meeting on April 29, 2014. On becoming Chairman of the Board, Ms Kilsby will step down as Chairman of Shire’s Audit, Compliance & Risk Committee and Dominic Blakemore will become Chairman of that Committee. It was also announced that Ms Kilsby will become a member of Shire’s Nomination Committee with effect from 1 February 2014.
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7 |
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Page
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Overview of Full Year 2013 Financial Results
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9
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Financial Information
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13
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Non GAAP Reconciliation
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22
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Notes to Editors
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26
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Safe Harbor Statement
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27
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Explanation of Non GAAP Measures
|
27
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Trade Marks
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29
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Investor Relations
|
|
|
|
|
- Eric Rojas
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erojas@shire.com
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+1 781 482 0999
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- Sarah Elton-Farr
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seltonfarr@shire.com
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+44 1256 894 157
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Media
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- Jessica Mann
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jmann@shire.com
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+44 1256 894 280
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- Gwen Fisher
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gfisher@shire.com
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+1 484 595 9836
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- Jessica Cotrone
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jcotrone@shire.com
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+1 781 482 9538
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UK dial in:
|
0808 237 0030 or 0203 139 4830
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US dial in:
|
1 866 928 7517 or 1 718 873 9077
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International Access Numbers:
|
Click here
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Password/Conf ID:
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46031093#
|
Live Webcast:
|
Click here
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8 |
1.
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Product sales (excluding DERMAGRAFT) from continuing operations
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|
|
|
|
|
Year on year growth
|
US Exit
Market
Share(2)
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|||||||
Product sales
|
|
Sales $M
|
|
|
Sales
|
|
Non GAAP
CER(1)
|
US Rx(2)
|
|||||
|
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|
|
|
|
|
|
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|
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||
VYVANSE
|
|
1,227.8
|
|
|
+19%
|
|
+19%
|
|
+6%
|
|
17%
|
||
ELAPRASE®
|
|
545.6
|
|
|
+10%
|
|
+11%
|
|
n/a(3)
|
|
n/a(3)
|
||
LIALDA/MEZAVANT
|
|
528.9
|
|
|
+32%
|
|
+32%
|
|
+19%
|
|
29%
|
||
REPLAGAL®
|
|
467.9
|
|
|
-6%
|
|
-4%
|
|
n/a(4)
|
|
n/a(4)
|
||
ADDERALL XR
|
|
375.4
|
|
|
-12%
|
|
-12%
|
|
-9%
|
|
5%
|
||
VPRIV
|
|
342.7
|
|
|
+12%
|
|
+12%
|
|
n/a(3)
|
|
n/a(3)
|
||
INTUNIV
|
|
334.9
|
|
|
+16%
|
|
+16%
|
|
+9%
|
|
5%
|
||
PENTASA®
|
|
280.6
|
|
|
+6%
|
|
+6%
|
|
-1%
|
|
14%
|
||
FIRAZYR
|
|
234.8
|
|
|
+102%
|
|
+101%
|
|
n/a(3)
|
|
n/a(3)
|
||
OTHER(5)
|
|
418.9
|
|
|
-1%
|
|
-1%
|
|
n/a
|
|
n/a
|
||
Total
|
|
4,757.5
|
|
|
+12%
|
|
+12%
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
On a Constant Exchange Rate (“CER”) basis, which is a Non GAAP measure.
|
(2)
|
Data provided by IMS Health National Prescription Audit (“IMS NPA”). Exit market share represents the average US market share in the month ended December 31, 2013.
|
(3)
|
IMS NPA Data not available.
|
(4)
|
Not sold in the US in 2013.
|
(5)
|
Other does not include product sales from DERMAGRAFT.
|
9 |
2.
|
Royalties
|
Product
|
Royalties to Shire $M
|
Year on year growth
|
CER
|
|
FOSRENOL®
|
48.1
|
|
-10%
|
-10%
|
3TC® and ZEFFIX®
|
46.7
|
|
-49%
|
-49%
|
ADDERALL XR
|
27.6
|
|
-61%
|
-61%
|
Other
|
31.3
|
|
+19%
|
+19%
|
Total
|
153.7
|
|
-36%
|
-36%
|
3.
|
Financial details
|
|
2013
|
|
% of
product
sales
|
|
2012
|
|
% of
product
sales
|
|
$M
|
|
|
$M
|
|
||
Cost of product sales (US GAAP)
|
670.8
|
|
14%
|
|
585.8
|
|
14%
|
Depreciation
|
(37.5)
|
|
|
|
(29.0)
|
|
|
Cost of product sales (Non GAAP)
|
633.3
|
|
13%
|
|
556.8
|
|
13%
|
|
|
|
|
|
|
|
|
10 |
|
2013
|
|
% of
product
sales
|
|
2012
|
|
% of
product
sales
|
|
$M
|
|
|
$M
|
|
||
R&D (US GAAP)
|
933.4
|
|
20%
|
|
953.0
|
|
22%
|
Impairment of intangible assets
|
(19.9)
|
|
|
|
(71.2)
|
|
|
Payment in respect of in-licensed and acquired products
|
-
|
|
|
|
(23.0)
|
|
|
Depreciation
|
(23.3)
|
|
|
|
(22.5)
|
|
|
R&D (Non GAAP)
|
890.2
|
|
19%
|
|
836.3
|
|
20%
|
|
|
|
|
|
|
|
|
|
2013
|
|
% of
product
sales
|
|
2012
|
|
% of
product
sales
|
|
$M
|
|
|
$M
|
|
||
SG&A (US GAAP)
|
1,651.3
|
|
35%
|
|
1,948.0
|
|
46%
|
Intangible asset amortization
|
(152.0)
|
|
|
|
(153.6)
|
|
|
Impairment of intangible assets
|
-
|
|
|
|
(126.7)
|
|
|
Legal and litigation costs
|
(9.0)
|
|
|
|
(94.1)
|
|
|
Depreciation
|
(66.8)
|
|
|
|
(57.5)
|
|
|
SG&A (Non GAAP)
|
1,423.5
|
|
30%
|
|
1,516.1
|
|
36%
|
|
|
|
|
|
|
|
|
11 |
12 |
|
Page
|
|
|
Unaudited US GAAP Consolidated Balance Sheets
|
14
|
|
|
Unaudited US GAAP Consolidated Statements of Income
|
15
|
|
|
Unaudited US GAAP Consolidated Statements of Cash Flows
|
17
|
|
|
Selected Notes to the Unaudited US GAAP Financial Statements
|
|
(1) Earnings per share
|
19
|
(2) Analysis of revenues
|
20
|
|
|
Non GAAP reconciliation
|
22
|
13 |
|
December 31,
|
|
December 31,
|
|
2013
|
|
2012
|
|
$M
|
|
$M
|
ASSETS
|
|
|
|
Current assets:
|
|
|
|
Cash and cash equivalents
|
2,239.4
|
|
1,482.2
|
Restricted cash
|
22.2
|
|
17.1
|
Accounts receivable, net
|
961.2
|
|
824.2
|
Inventories
|
455.3
|
|
436.9
|
Assets held for sale
|
31.6
|
|
-
|
Deferred tax asset
|
315.6
|
|
229.9
|
Prepaid expenses and other current assets
|
263.0
|
|
221.8
|
|
|
|
|
Total current assets
|
4,288.3
|
|
3,212.1
|
|
|
|
|
Non-current assets:
|
|
|
|
Investments
|
31.8
|
|
38.7
|
Property, plant and equipment ("PP&E"), net
|
891.8
|
|
955.8
|
Goodwill
|
624.6
|
|
644.5
|
Other intangible assets, net
|
2,312.6
|
|
2,388.1
|
Deferred tax asset
|
141.1
|
|
46.5
|
Other non-current assets
|
32.8
|
|
31.5
|
|
|
|
|
Total assets
|
8,323.0
|
|
7,317.2
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
Current liabilities:
|
|
|
|
Accounts payable and accrued expenses
|
1,688.4
|
|
1,501.5
|
Other current liabilities
|
119.5
|
|
144.1
|
|
|
|
|
Total current liabilities
|
1,807.9
|
|
1,645.6
|
|
|
|
|
Non-current liabilities:
|
|
|
|
Convertible bonds
|
-
|
|
1,100.0
|
Deferred tax liability
|
560.6
|
|
520.8
|
Other non-current liabilities
|
588.5
|
|
241.6
|
|
|
|
|
Total liabilities
|
2,957.0
|
|
3,508.0
|
|
|
|
|
Equity:
|
|
|
|
Common stock of 5p par value; 1,000 million shares authorized; and 597.5 million shares issued and outstanding (2012: 1,000 million shares authorized; and 562.5 million shares issued and outstanding)
|
58.6
|
|
55.7
|
Additional paid-in capital
|
4,186.3
|
|
2,981.5
|
Treasury stock: 13.4 million shares (2012: 10.7 million)
|
(450.6)
|
|
(310.4)
|
Accumulated other comprehensive income
|
110.2
|
|
86.9
|
Retained earnings
|
1,461.5
|
|
995.5
|
|
|
|
|
Total equity
|
5,366.0
|
|
3,809.2
|
|
|
|
|
Total liabilities and equity
|
8,323.0
|
|
7,317.2
|
14 |
|
3 months to December 31,
|
|
Year to December 31,
|
||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
$M
|
|
$M
|
|
$M
|
|
$M
|
Revenues:
|
|
|
|
|
|
|
|
Product sales
|
1,280.4
|
|
1,078.7
|
|
4,757.5
|
|
4,252.9
|
Royalties
|
41.3
|
|
87.2
|
|
153.7
|
|
241.6
|
Other revenues
|
4.3
|
|
16.4
|
|
23.1
|
|
32.9
|
Total revenues
|
1,326.0
|
|
1,182.3
|
|
4,934.3
|
|
4,527.4
|
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
Cost of product sales
|
178.6
|
|
150.0
|
|
670.8
|
|
585.8
|
R&D(1)
|
230.1
|
|
278.9
|
|
933.4
|
|
953.0
|
SG&A(1)
|
453.3
|
|
625.3
|
|
1,651.3
|
|
1,948.0
|
Goodwill impairment charge
|
-
|
|
-
|
|
7.1
|
|
-
|
Gain on sale of product rights
|
(1.3)
|
|
(1.6)
|
|
(15.9)
|
|
(18.1)
|
Reorganization costs
|
41.0
|
|
-
|
|
88.2
|
|
-
|
Integration and acquisition costs
|
(174.0)
|
|
7.4
|
|
(134.1)
|
|
13.5
|
Total operating expenses
|
727.7
|
|
1,060.0
|
|
3,200.8
|
|
3,482.2
|
|
|
|
|
|
|
|
|
Operating income from continuing operations
|
598.3
|
|
122.3
|
|
1,733.5
|
|
1,045.2
|
|
|
|
|
|
|
|
|
Interest income
|
0.5
|
|
0.7
|
|
2.1
|
|
3.0
|
Interest expense
|
(10.6)
|
|
(9.2)
|
|
(38.1)
|
|
(38.2)
|
Other expense, net
|
(2.3)
|
|
(5.8)
|
|
(3.9)
|
|
(2.2)
|
Total other expense, net
|
(12.4)
|
|
(14.3)
|
|
(39.9)
|
|
(37.4)
|
|
|
|
|
|
|
|
|
Income from continuing operations before income taxes and equity in earnings of equity method investees
|
585.9
|
|
108.0
|
|
1,693.6
|
|
1,007.8
|
Income taxes
|
(42.6)
|
|
(40.5)
|
|
(277.9)
|
|
(203.1)
|
Equity in earnings of equity method investees, net of taxes
|
3.3
|
|
0.5
|
|
3.9
|
|
1.0
|
Income from continuing operations, net of tax
|
546.6
|
|
68.0
|
|
1,419.6
|
|
805.7
|
Loss from discontinued operations, net of taxes
|
(482.6)
|
|
(26.0)
|
|
(754.5)
|
|
(60.3)
|
Net income
|
64.0
|
|
42.0
|
|
665.1
|
|
745.4
|
|
|
|
|
|
|
|
|
|
(1)
|
R&D includes intangible asset impairment charges of $nil for the three months to December 31, 2013 (2012: $44.2 million) and $19.9 million for the year to December 31, 2013 (2012: $71.2 million). SG&A costs include amortization and impairment charges of intangible assets relating to intellectual property rights acquired of $45.5 million for the three months to December 31, 2013 (2012: $163.9 million) and $152.0 million for the year to December 31, 2013 (2012: $280.3 million).
|
15 |
|
3 months to December 31,
|
|
Year to December 31,
|
||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
Earnings per Ordinary Share – basic
|
|
|
|
|
|
|
|
Earnings from continuing operations
|
98.0c
|
|
12.2c
|
|
257.2c
|
|
145.1c
|
Loss from discontinued operations
|
(86.5c)
|
|
(4.7c)
|
|
(136.7c)
|
|
(10.9c)
|
|
|
|
|
|
|
|
|
Earnings per Ordinary Share – basic
|
11.5c
|
|
7.5c
|
|
120.5c
|
|
134.2c
|
|
|
|
|
|
|
|
|
Earnings per ADS – basic
|
34.5c
|
|
22.5c
|
|
361.5c
|
|
402.6c
|
|
|
|
|
|
|
|
|
Earnings per Ordinary Share – diluted
|
|
|
|
|
|
|
|
Earnings from continuing operations
|
93.4c
|
|
12.2c
|
|
245.3c
|
|
141.0c
|
Loss from discontinued operations
|
(81.7c)
|
|
(4.7c)
|
|
(127.8c)
|
|
(10.1c)
|
|
|
|
|
|
|
|
|
Earnings per Ordinary Share – diluted
|
11.7c
|
|
7.5c
|
|
117.5c
|
|
130.9c
|
|
|
|
|
|
|
|
|
Earnings per ADS – diluted
|
35.1c
|
|
22.5c
|
|
352.5c
|
|
392.7c
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares:
|
|
|
|
|
|
|
|
|
Millions
|
|
Millions
|
|
Millions
|
|
Millions
|
|
|
|
|
|
|
|
|
Basic
|
558.0
|
|
555.2
|
|
552.0
|
|
555.4
|
Diluted
|
590.6
|
|
558.5
|
|
590.3
|
|
593.5
|
16 |
|
|
3 months to December 31,
|
|
Year to December 31,
|
||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
$M
|
|
$M
|
|
$M
|
|
$M
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
64.0
|
|
42.0
|
|
665.1
|
|
745.4
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
96.1
|
|
77.1
|
|
324.4
|
|
308.6
|
|
Share based compensation
|
22.2
|
|
22.1
|
|
77.4
|
|
87.1
|
|
Change in fair value of contingent consideration
|
(187.5)
|
|
5.9
|
|
(159.1)
|
|
9.2
|
|
Impairment of intangible assets
|
-
|
|
170.9
|
|
19.9
|
|
197.9
|
|
Goodwill impairment charge
|
-
|
|
-
|
|
198.9
|
|
-
|
|
Impairment of assets held for sale
|
636.9
|
|
-
|
|
636.9
|
|
-
|
|
Write down of assets
|
50.4
|
|
0.7
|
|
58.2
|
|
0.9
|
|
Gain on sale of product rights
|
(1.4)
|
|
(1.6)
|
|
(15.9)
|
|
(18.1)
|
|
Other, net
|
11.7
|
|
5.8
|
|
8.1
|
|
7.4
|
Movement in deferred taxes
|
(366.0)
|
|
(27.9)
|
|
(349.9)
|
|
(58.3)
|
|
Equity in earnings of equity method investees
|
(3.1)
|
|
(0.5)
|
|
(3.7)
|
|
(1.0)
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Decrease/(increase) in accounts receivable
|
66.9
|
|
45.2
|
|
(148.3)
|
|
22.2
|
|
Increase in sales deduction accrual
|
68.8
|
|
6.6
|
|
177.5
|
|
42.7
|
|
Decrease/(increase) in inventory
|
3.3
|
|
(6.3)
|
|
(36.6)
|
|
(88.2)
|
|
Decrease/(increase) in prepayments and other assets
|
12.7
|
|
(32.3)
|
|
(60.9)
|
|
(14.5)
|
|
Increase in accounts payable and other liabilities
|
135.3
|
|
64.0
|
|
67.9
|
|
136.7
|
Returns on investment from joint venture
|
-
|
|
-
|
|
3.1
|
|
4.9
|
|
Net cash provided by operating activities(A)
|
610.3
|
|
371.7
|
|
1,463.0
|
|
1,382.9
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Movements in restricted cash
|
(5.7)
|
|
1.8
|
|
(5.3)
|
|
3.5
|
Purchases of subsidiary undertakings and businesses, net of cash acquired
|
-
|
|
-
|
|
(227.8)
|
|
(97.0)
|
Purchases of non-current investments
|
(0.8)
|
|
(5.9)
|
|
(10.6)
|
|
(18.0)
|
Purchases of PP&E
|
(46.7)
|
|
(58.0)
|
|
(157.0)
|
|
(149.6)
|
Purchases of intangible assets
|
-
|
|
-
|
|
-
|
|
(43.5)
|
Proceeds from disposal of non-current investments
|
3.5
|
|
2.6
|
|
12.1
|
|
7.2
|
Proceeds received on sale of product rights
|
4.2
|
|
4.1
|
|
19.2
|
|
17.8
|
Returns of investments
|
5.4
|
|
-
|
|
5.4
|
|
-
|
Other, net
|
-
|
|
-
|
|
3.1
|
|
8.6
|
Net cash used in investing activities(B)
|
(40.1)
|
|
(55.4)
|
|
(360.9)
|
|
(271.0)
|
17 |
|
3 months to December 31,
|
|
Year to December 31,
|
||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
$M
|
|
$M
|
|
$M
|
|
$M
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments to acquire shares under the share buy-back program
|
(3.1)
|
|
(106.5)
|
|
(193.8)
|
|
(106.5)
|
Payment of dividend
|
(17.2)
|
|
(15.6)
|
|
(96.4)
|
|
(86.3)
|
Payments to acquire shares by the Employee Benefit Trust ("EBT")
|
-
|
|
(48.4)
|
|
(50.0)
|
|
(99.3)
|
Facility arrangement fee
|
(13.9)
|
|
-
|
|
(13.9)
|
|
-
|
Excess tax benefit associated with exercise of stock options
|
3.9
|
|
2.1
|
|
13.4
|
|
40.7
|
Proceeds from exercise of options
|
16.9
|
|
15.6
|
|
17.2
|
|
16.2
|
Contingent consideration payments
|
(2.8)
|
|
(2.9)
|
|
(14.1)
|
|
(5.8)
|
Other, net
|
(0.9)
|
|
-
|
|
(7.0)
|
|
(3.3)
|
Net cash used in financing activities(C)
|
(17.1)
|
|
(155.7)
|
|
(344.6)
|
|
(244.3)
|
Effect of foreign exchange rate changes on cash and cash equivalents (D)
|
0.2
|
|
(0.3)
|
|
(0.3)
|
|
(5.4)
|
Net increase in cash and cash equivalents(A) +(B) +(C) +(D)
|
553.3
|
|
160.3
|
|
757.2
|
|
862.2
|
Cash and cash equivalents at beginning of period
|
1,686.1
|
|
1,321.9
|
|
1,482.2
|
|
620.0
|
Cash and cash equivalents at end of period
|
2,239.4
|
|
1,482.2
|
|
2,239.4
|
|
1,482.2
|
18 |
|
3 months to December 31,
|
|
Year to December 31,
|
||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
$M
|
|
$M
|
|
$M
|
|
$M
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
546.6
|
|
68.0
|
|
1,419.6
|
|
805.7
|
Loss from discontinued operation
|
(482.6)
|
|
(26.0)
|
|
(754.5)
|
|
(60.3)
|
|
|
|
|
|
|
|
|
Numerator for basic EPS
|
64.0
|
|
42.0
|
|
665.1
|
|
745.4
|
Interest on convertible bonds, net of tax
|
5.4
|
|
-
|
|
28.3
|
|
31.3
|
|
|
|
|
|
|
|
|
Numerator for diluted EPS
|
69.4
|
|
42.0
|
|
693.4
|
|
776.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares:
|
|
|
|
|
|
|
|
|
Millions
|
|
Millions
|
|
Millions
|
|
Millions
|
Basic(1)
|
558.0
|
|
555.2
|
|
552.0
|
|
555.4
|
Effect of dilutive shares:
|
|
|
|
|
|
|
|
Share based awards to employees(2)
|
4.9
|
|
3.3
|
|
4.8
|
|
4.6
|
The Bonds(3)
|
27.7
|
|
-
|
|
33.5
|
|
33.5
|
|
|
|
|
|
|
|
|
Diluted
|
590.6
|
|
558.5
|
|
590.3
|
|
593.5
|
|
(1)
|
Excludes shares purchased by the EBT and under the share buy-back program and presented by Shire as treasury stock.
|
|
(2)
|
Calculated using the treasury stock method.
|
|
(3)
|
As of December 31, 2013 Bond Holders had voluntarily converted $1,099,050,000 aggregate principal amount of the Bonds into fully paid 33,806,464 Ordinary Shares. The remaining outstanding Bonds in an aggregate principal amount of $950,000 were redeemed on December 27, 2013. Shire has calculated the impact of the Bonds on diluted EPS from the beginning of the period to the actual date of Bonds conversion using the “if-converted” method.
|
|
3 months to December 31,
|
|
Year to December 31,
|
||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
Millions
|
|
Millions
|
|
Millions
|
|
Millions
|
Share based awards to employees(1)
|
0.5
|
|
6.7
|
|
0.5
|
|
5.2
|
The Bonds(2)
|
-
|
|
33.5
|
|
-
|
|
-
|
|
(1)
|
Certain stock options have been excluded from the calculation of diluted EPS because (a) their exercise prices exceeded Shire’s average share price during the calculation period or (b) the required performance conditions were not satisfied as at the balance sheet date.
|
|
(2)
|
For the three month period ended December 31, 2012 the ordinary shares underlying the Bonds have not been included in the calculation of the diluted weighted average number of shares, as the effect of their inclusion would be anti-dilutive.
|
19 |
Year to December 31,
|
2013
|
|
2012
|
|
2013
|
|
2013
|
|
|
|
|
|
%
|
|
% of total
|
|
$M
|
|
$M
|
|
change
|
|
revenue
|
Net product sales:
|
|
|
|
|
|
|
|
VYVANSE
|
1,227.8
|
|
1,029.8
|
|
19%
|
|
25%
|
ELAPRASE
|
545.6
|
|
497.6
|
|
10%
|
|
11%
|
LIALDA/MEZAVANT
|
528.9
|
|
399.9
|
|
32%
|
|
11%
|
REPLAGAL
|
467.9
|
|
497.5
|
|
-6%
|
|
9%
|
ADDERALL XR
|
375.4
|
|
429.0
|
|
-12%
|
|
8%
|
VPRIV
|
342.7
|
|
306.6
|
|
12%
|
|
7%
|
INTUNIV
|
334.9
|
|
287.8
|
|
16%
|
|
7%
|
PENTASA
|
280.6
|
|
265.8
|
|
6%
|
|
6%
|
FIRAZYR
|
234.8
|
|
116.3
|
|
102%
|
|
5%
|
FOSRENOL
|
183.4
|
|
172.0
|
|
7%
|
|
4%
|
XAGRID
|
99.4
|
|
97.2
|
|
2%
|
|
1%
|
Other product sales
|
136.1
|
|
153.4
|
|
-11%
|
|
2%
|
Total product sales
|
4,757.5
|
|
4,252.9
|
|
12%
|
|
96%
|
|
|
|
|
|
|
|
|
Royalties:
|
|
|
|
|
|
|
|
FOSRENOL
|
48.1
|
|
53.3
|
|
-10%
|
|
1%
|
3TC and ZEFFIX
|
46.7
|
|
91.6
|
|
-49%
|
|
1%
|
ADDERALL XR
|
27.6
|
|
70.3
|
|
-61%
|
|
<1%
|
Other
|
31.3
|
|
26.4
|
|
19%
|
|
1%
|
Total royalties
|
153.7
|
|
241.6
|
|
-36%
|
|
3%
|
|
|
|
|
|
|
|
|
Other revenues
|
23.1
|
|
32.9
|
|
-30%
|
|
<1%
|
|
|
|
|
|
|
|
|
Total revenues
|
4,934.3
|
|
4,527.4
|
|
9%
|
|
100%
|
20 |
3 months to December 31,
|
2013
|
|
2012
|
|
2013
|
|
2013
|
|
|
|
|
|
%
|
|
% of total
|
|
$M
|
|
$M
|
|
change
|
|
revenue
|
Net product sales:
|
|
|
|
|
|
|
|
VYVANSE
|
329.9
|
|
256.5
|
|
29%
|
|
25%
|
ELAPRASE
|
153.0
|
|
139.3
|
|
10%
|
|
12%
|
LIALDA/MEZAVANT
|
149.0
|
|
111.4
|
|
34%
|
|
11%
|
REPLAGAL
|
131.3
|
|
118.2
|
|
11%
|
|
10%
|
ADDERALL XR
|
81.9
|
|
81.5
|
|
0%
|
|
6%
|
VPRIV
|
90.8
|
|
77.3
|
|
17%
|
|
7%
|
INTUNIV
|
86.0
|
|
81.2
|
|
6%
|
|
6%
|
PENTASA
|
65.4
|
|
69.1
|
|
-5%
|
|
5%
|
FIRAZYR
|
81.0
|
|
34.6
|
|
134%
|
|
6%
|
FOSRENOL
|
47.1
|
|
45.2
|
|
4%
|
|
4%
|
XAGRID
|
25.3
|
|
26.5
|
|
-5%
|
|
2%
|
Other product sales
|
39.7
|
|
37.9
|
|
5%
|
|
3%
|
Total product sales
|
1,280.4
|
|
1,078.7
|
|
19%
|
|
97%
|
|
|
|
|
|
|
|
|
Royalties:
|
|
|
|
|
|
|
|
FOSRENOL
|
14.5
|
|
16.3
|
|
-11%
|
|
1%
|
3TC and ZEFFIX
|
12.8
|
|
56.8
|
|
-77%
|
|
1%
|
ADDERALL XR
|
8.4
|
|
8.1
|
|
4%
|
|
<1%
|
Other
|
5.6
|
|
6.0
|
|
-7%
|
|
<1%
|
Total royalties
|
41.3
|
|
87.2
|
|
-53%
|
|
3%
|
|
|
|
|
|
|
|
|
Other revenues
|
4.3
|
|
16.4
|
|
-74%
|
|
<1%
|
|
|
|
|
|
|
|
|
Total revenues
|
1,326.0
|
|
1,182.3
|
|
12%
|
|
100%
|
21 |
Year to December 31, 2013
|
US GAAP
|
Adjustments
|
Non GAAP
|
|
Memo
Non GAAP including DERMAGRAFT operations
|
|||||||
|
|
|
|
|
|
|
|
|
DERMAGRAFT
operations
|
Total
|
||
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
|
|
||||
|
$M
|
$M
|
$M
|
$M
|
$M
|
$M
|
$M
|
|
$M
|
$M
|
||
Product sales
|
4,757.5
|
-
|
-
|
-
|
-
|
-
|
4,757.5
|
|
89.8
|
4,847.3
|
||
Royalties
|
153.7
|
-
|
-
|
-
|
-
|
-
|
153.7
|
|
-
|
153.7
|
||
Other revenues
|
23.1
|
-
|
-
|
-
|
-
|
-
|
23.1
|
|
-
|
23.1
|
||
Total revenues
|
4,934.3
|
-
|
-
|
-
|
-
|
-
|
4,934.3
|
|
89.8
|
5,024.1
|
||
|
|
|
|
|
|
|
|
|
|
|
||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
||
Cost of product sales
|
670.8
|
-
|
-
|
-
|
-
|
(37.5)
|
633.3
|
|
51.2
|
684.5
|
||
R&D
|
933.4
|
(19.9)
|
-
|
-
|
-
|
(23.3)
|
890.2
|
|
12.7
|
902.9
|
||
SG&A
|
1,651.3
|
(152.0)
|
-
|
-
|
(9.0)
|
(66.8)
|
1,423.5
|
|
124.7
|
1,548.2
|
||
Goodwill impairment charge
|
7.1
|
(7.1)
|
-
|
-
|
-
|
-
|
-
|
|
-
|
-
|
||
Gain on sale of product rights
|
(15.9)
|
-
|
-
|
15.9
|
-
|
-
|
-
|
|
-
|
-
|
||
Reorganization costs
|
88.2
|
-
|
-
|
(88.2)
|
-
|
-
|
-
|
|
-
|
-
|
||
Integration and acquisition costs
|
(134.1)
|
-
|
134.1
|
-
|
-
|
-
|
-
|
|
-
|
-
|
||
Depreciation
|
-
|
-
|
-
|
-
|
-
|
127.6
|
127.6
|
|
5.6
|
133.2
|
||
Total operating expenses
|
3,200.8
|
(179.0)
|
134.1
|
(72.3)
|
(9.0)
|
-
|
3,074.6
|
|
194.2
|
3,268.8
|
||
|
|
|
|
|
|
|
|
|
|
|
||
Operating income
|
1,733.5
|
179.0
|
(134.1)
|
72.3
|
9.0
|
-
|
1,859.7
|
|
(104.4)
|
1,755.3
|
||
Interest income
|
2.1
|
-
|
-
|
-
|
-
|
-
|
2.1
|
|
-
|
2.1
|
||
Interest expense
|
(38.1)
|
-
|
-
|
-
|
-
|
-
|
(38.1)
|
|
0.6
|
(37.5)
|
||
Other expense, net
|
(3.9)
|
-
|
-
|
-
|
-
|
-
|
(3.9)
|
|
3.7
|
(0.2)
|
||
Total other expense, net
|
(39.9)
|
-
|
-
|
-
|
-
|
-
|
(39.9)
|
|
4.3
|
(35.6)
|
||
Income from continuing operations before income taxes and equity in earnings of equity method investees
|
1,693.6
|
179.0
|
(134.1)
|
72.3
|
9.0
|
-
|
1,819.8
|
|
(100.1)
|
1,719.7
|
||
Income taxes
|
(277.9)
|
(42.8)
|
(4.3)
|
(17.2)
|
(3.3)
|
-
|
(345.5)
|
|
41.7
|
(303.8)
|
||
Equity in earnings of equity method investees, net of tax
|
3.9
|
-
|
-
|
-
|
-
|
-
|
3.9
|
|
-
|
3.9
|
||
Income from continuing operations
|
1,419.6
|
136.2
|
(138.4)
|
55.1
|
5.7
|
-
|
1,478.2
|
|
(58.4)
|
1,419.8
|
||
Loss from discontinued operations, net of tax
|
(754.5)
|
-
|
-
|
754.5
|
-
|
-
|
-
|
|
-
|
-
|
||
Net income
|
665.1
|
136.2
|
(138.4)
|
809.6
|
5.7
|
-
|
1,478.2
|
|
(58.4)
|
1,419.8
|
||
Impact of convertible debt, net of tax
|
28.3
|
-
|
-
|
-
|
-
|
-
|
28.3
|
|
-
|
28.3
|
||
Numerator for diluted EPS
|
693.4
|
136.2
|
(138.4)
|
809.6
|
5.7
|
-
|
1,506.5
|
|
(58.4)
|
1,448.1
|
||
Weighted average number of shares (millions) – diluted
|
590.3
|
-
|
-
|
-
|
-
|
-
|
590.3
|
|
-
|
590.3
|
||
Diluted earnings per ADS
|
352.5c
|
69.2c
|
(70.3c)
|
411.3c
|
2.9c
|
-
|
765.6c
|
|
(29.7c)
|
735.9c
|
||
|
|
|
|
|
|
|
|
|
|
|
||
Diluted earnings per ADS from continuing operations
|
735.9c
|
69.2c
|
(70.3c)
|
27.9c
|
2.9c
|
-
|
765.6c
|
|
(29.7c)
|
735.9c
|
||
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Amortization and asset impairments: Impairment of IPR&D intangible assets acquired with Movetis ($19.9 million), impairment of goodwill relating to Shire’s Regenerative Medicine Business relating to the continuing operations ($7.1 million), amortization of intangible assets relating to intellectual property rights acquired ($152.0 million), and tax effect of adjustments;
|
|
(b)
|
Acquisitions and integration activities: Costs primarily associated with acquisition of ViroPharma, SARcode and Lotus ($25.0 million), net credit related to the change in fair values of contingent consideration liabilities ($159.1 million), and tax effect of adjustments;
|
|
(c)
|
Divestments, reorganizations and discontinued operations: Re-measurement of DAYTRANA contingent consideration to higher fair value ($15.9 million), costs relating to the One Shire reorganization announced at Q1 2013 ($64.6 million) and the collective dismissal and closure of Shire’s facility at Turnhout, Belgium ($23.6 million), tax effect of adjustments and loss from discontinued operations, net of tax ($754.5 million);
|
|
(d)
|
Legal and litigation costs: Costs related to litigation, government investigations, other disputes and external legal costs ($9.0 million), and tax effect of adjustments; and
|
|
(e)
|
Depreciation reclassification: Depreciation of $127.6 million included in Cost of product sales, R&D and SG&A for US GAAP separately disclosed for the presentation of Non GAAP earnings.
|
22 |
Year to December 31, 2012
|
US GAAP
|
Adjustments
|
Non GAAP
|
|
Memo
Non GAAP including DERMAGRAFT operations
|
|||||||
|
|
|
|
|
|
|
|
|
DERMAGRAFT operations
|
Total
|
||
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
|
|
||||
|
$M
|
$M
|
$M
|
$M
|
$M
|
$M
|
$M
|
|
$M
|
$M
|
||
Product sales
|
4,252.9
|
-
|
-
|
-
|
-
|
-
|
4,252.9
|
|
153.8
|
4,406.7
|
||
Royalties
|
241.6
|
-
|
-
|
-
|
-
|
-
|
241.6
|
|
-
|
241.6
|
||
Other revenues
|
32.9
|
-
|
-
|
-
|
-
|
-
|
32.9
|
|
-
|
32.9
|
||
Total revenues
|
4,527.4
|
-
|
-
|
-
|
-
|
-
|
4,527.4
|
|
153.8
|
4,681.2
|
||
|
|
|
|
|
|
|
|
|
|
|
||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
||
Cost of product sales
|
585.8
|
-
|
-
|
-
|
-
|
(29.0)
|
556.8
|
|
57.1
|
613.9
|
||
R&D
|
953.0
|
(71.2)
|
(23.0)
|
-
|
-
|
(22.5)
|
836.3
|
|
12.5
|
848.8
|
||
SG&A
|
1,948.0
|
(280.3)
|
-
|
-
|
(94.1)
|
(57.5)
|
1,516.1
|
|
114.7
|
1,630.8
|
||
Gain on sale of product rights
|
(18.1)
|
-
|
-
|
18.1
|
-
|
-
|
-
|
|
-
|
-
|
||
Integration and acquisition costs
|
13.5
|
-
|
(13.5)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
||
Depreciation
|
-
|
-
|
-
|
-
|
-
|
109.0
|
109.0
|
|
4.8
|
113.8
|
||
Total operating expenses
|
3,482.2
|
(351.5)
|
(36.5)
|
18.1
|
(94.1)
|
-
|
3,018.2
|
|
189.1
|
3,207.3
|
||
Operating income
|
1,045.2
|
351.5
|
36.5
|
(18.1)
|
94.1
|
-
|
1,509.2
|
|
(35.3)
|
1,473.9
|
||
|
|
|
|
|
|
|
|
|
|
|
||
Interest income
|
3.0
|
-
|
-
|
-
|
-
|
-
|
3.0
|
|
0.1
|
3.1
|
||
Interest expense
|
(38.2)
|
-
|
-
|
-
|
-
|
-
|
(38.2)
|
|
-
|
(38.2)
|
||
Other (expense)/income, net
|
(2.2)
|
4.0
|
-
|
-
|
-
|
-
|
1.8
|
|
(0.5)
|
1.3
|
||
Total other expense, net
|
(37.4)
|
4.0
|
-
|
-
|
-
|
-
|
(33.4)
|
|
(0.4)
|
(33.8)
|
||
Income from continuing operations before income taxes and equity in earnings of equity method investees
|
1,007.8
|
355.5
|
36.5
|
(18.1)
|
94.1
|
-
|
1,475.8
|
|
(35.7)
|
1,440.1
|
||
Income taxes
|
(203.1)
|
(45.0)
|
(5.7)
|
-
|
(25.3)
|
-
|
(279.1)
|
|
14.4
|
(264.7)
|
||
Equity in earnings of equity method investees, net of tax
|
1.0
|
-
|
-
|
-
|
-
|
-
|
1.0
|
|
-
|
1.0
|
||
Income from continuing operations
|
805.7
|
310.5
|
30.8
|
(18.1)
|
68.8
|
-
|
1,197.7
|
|
(21.3)
|
1,176.4
|
||
Loss from discontinued operations, net of tax
|
(60.3)
|
-
|
-
|
60.3
|
-
|
-
|
-
|
|
-
|
-
|
||
Net income
|
745.4
|
310.5
|
30.8
|
42.2
|
68.8
|
-
|
1,197.7
|
|
(21.3)
|
1,176.4
|
||
Impact of convertible debt, net of tax
|
31.3
|
-
|
-
|
-
|
-
|
-
|
31.3
|
|
-
|
31.3
|
||
Numerator for diluted EPS
|
776.7
|
310.5
|
30.8
|
42.2
|
68.8
|
-
|
1,229.0
|
|
(21.3)
|
1,207.7
|
||
Weighted average number of shares (millions) – diluted
|
593.5
|
-
|
-
|
-
|
-
|
-
|
593.5
|
|
-
|
593.5
|
||
Diluted earnings per ADS
|
392.7c
|
156.7c
|
15.5c
|
21.3c
|
34.8c
|
-
|
621.0c
|
|
(10.8c)
|
610.5c
|
||
|
|
|
|
|
|
|
|
|
|
|
||
Diluted earnings per ADS from continuing operations
|
423.0c
|
156.7c
|
15.5c
|
(9.0c)
|
34.8c
|
-
|
621.0c
|
|
(10.8c)
|
610.5c
|
|
(a)
|
Amortization and asset impairments: Impairment of IPR&D intangible assets for RESOLOR in the EU ($71.2 million), impairment charges of intellectual property rights acquired for RESOLOR in the EU ($126.7 million), amortization of intangible assets relating to intellectual property rights acquired ($153.6 million), impairment of available for sale securities ($4.0 million), and tax effect of adjustments;
|
|
(b)
|
Acquisitions and integration activities: Up-front payments made to Sangamo Biosciences Inc. and for the acquisition of the US rights to prucalopride (marketed in certain countries in Europe as RESOLOR) ($23.0 million), costs primarily associated with the acquisition of FerroKin ($4.3 million), charges related to the change in fair values of contingent consideration liabilities ($9.2 million), and tax effect of adjustments;
|
|
(c)
|
Divestments, reorganizations and discontinued operations: Re-measurement of DAYTRANA contingent consideration to fair value ($18.1 million), tax effect of adjustments and loss from discontinued operations, net of tax ($60.3 million);
|
|
(d)
|
Legal and litigation costs: Costs related to litigation, government investigations, other disputes and external legal costs ($94.1 million), and tax effect of adjustments; and
|
|
(e)
|
Depreciation reclassification: Depreciation of $109.0 million included in Cost of product sales, R&D and SG&A for US GAAP separately disclosed for the presentation of Non GAAP earnings.
|
23 |
3 months to December 31, 2013
|
US GAAP
|
Adjustments
|
Non GAAP
|
|
Memo
Non GAAP including DERMAGRAFT operations
|
|||||||
|
|
|
|
|
|
|
|
|
DERMAGRAFT operations
|
Total
|
||
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
|
|
||||
|
$M
|
$M
|
$M
|
$M
|
$M
|
$M
|
$M
|
|
$M
|
$M
|
||
Product sales
|
1,280.4
|
-
|
-
|
-
|
-
|
-
|
1,280.4
|
|
25.1
|
1,305.5
|
||
Royalties
|
41.3
|
-
|
-
|
-
|
-
|
-
|
41.3
|
|
-
|
41.3
|
||
Other revenues
|
4.3
|
-
|
-
|
-
|
-
|
-
|
4.3
|
|
-
|
4.3
|
||
Total revenues
|
1,326.0
|
-
|
-
|
-
|
-
|
-
|
1,326.0
|
|
25.1
|
1,351.1
|
||
|
|
|
|
|
|
|
|
|
|
|
||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
||
Cost of product sales
|
178.6
|
-
|
-
|
-
|
-
|
(11.0)
|
167.6
|
|
17.0
|
184.6
|
||
R&D
|
230.1
|
-
|
-
|
-
|
-
|
(8.1)
|
222.0
|
|
2.6
|
224.6
|
||
SG&A
|
453.3
|
(45.5)
|
-
|
-
|
(0.9)
|
(19.2)
|
387.7
|
|
26.5
|
414.2
|
||
Gain on sale of product rights
|
(1.3)
|
-
|
-
|
1.3
|
-
|
-
|
-
|
|
-
|
-
|
||
Reorganization costs
|
41.0
|
-
|
-
|
(41.0)
|
-
|
-
|
-
|
|
-
|
-
|
||
Integration and acquisition costs
|
(174.0)
|
-
|
174.0
|
-
|
-
|
-
|
-
|
|
-
|
-
|
||
Depreciation
|
-
|
-
|
-
|
-
|
-
|
38.3
|
38.3
|
|
1.6
|
39.9
|
||
Total operating expenses
|
727.7
|
(45.5)
|
174.0
|
(39.7)
|
(0.9)
|
-
|
815.6
|
|
47.7
|
863.3
|
||
Operating income
|
598.3
|
45.5
|
(174.0)
|
39.7
|
0.9
|
-
|
510.4
|
|
(22.6)
|
487.8
|
||
|
|
|
|
|
|
|
|
|
|
|
||
Interest income
|
0.5
|
-
|
-
|
-
|
-
|
-
|
0.5
|
|
-
|
0.5
|
||
Interest expense
|
(10.6)
|
-
|
-
|
-
|
-
|
-
|
(10.6)
|
|
0.1
|
(10.5)
|
||
Other (expense)/income, net
|
(2.3)
|
-
|
-
|
-
|
-
|
-
|
(2.3)
|
|
4.0
|
1.7
|
||
Total other expense, net
|
(12.4)
|
-
|
-
|
-
|
-
|
-
|
(12.4)
|
|
4.1
|
(8.3)
|
||
Income from continuing operations before income taxes and equity in earnings of equity method investees
|
585.9
|
45.5
|
(174.0)
|
39.7
|
0.9
|
-
|
498.0
|
|
(18.5)
|
479.5
|
||
Income taxes
|
(42.6)
|
(10.4)
|
(1.2)
|
(7.8)
|
(0.2)
|
-
|
(62.2)
|
|
8.2
|
(54.0)
|
||
Equity in earnings of equity method investees, net of tax
|
3.3
|
-
|
-
|
-
|
-
|
-
|
3.3
|
|
-
|
3.3
|
||
Income from continuing operations
|
546.6
|
35.1
|
(175.2)
|
31.9
|
0.7
|
-
|
439.1
|
|
(10.3)
|
428.8
|
||
Loss from discontinued operations, net of tax
|
(482.6)
|
-
|
-
|
482.6
|
-
|
-
|
-
|
|
-
|
-
|
||
Net income
|
64.0
|
35.1
|
(175.2)
|
514.5
|
0.7
|
-
|
439.1
|
|
(10.3)
|
428.8
|
||
Impact of convertible debt, net of tax
|
5.4
|
-
|
-
|
-
|
-
|
-
|
5.4
|
|
-
|
5.4
|
||
Numerator for diluted EPS
|
69.4
|
35.1
|
(175.2)
|
514.5
|
0.7
|
-
|
444.5
|
|
(10.3)
|
434.2
|
||
Weighted average number of shares (millions) – diluted
|
590.6
|
-
|
-
|
-
|
-
|
-
|
590.6
|
|
-
|
590.6
|
||
Diluted earnings per ADS
|
35.1c
|
17.9c
|
(88.9c)
|
261.5c
|
0.3c
|
-
|
225.9c
|
|
(5.4c)
|
220.5c
|
||
|
|
|
|
|
|
|
|
|
|
|
||
Diluted earnings per ADS from continuing operations
|
280.2c
|
17.9c
|
(88.9c)
|
16.4c
|
0.3c
|
-
|
225.9c
|
|
(5.4c)
|
220.5c
|
|
(a)
|
Amortization and asset impairments: Amortization of intangible assets relating to intellectual property rights acquired ($45.4 million), and tax effect of adjustments;
|
|
(b)
|
Acquisition and integration activities: Costs primarily associated with the acquisition of ViroPharma and integration of SARcode ($13.5 million), net credit related to the change in fair values of contingent consideration liabilities ($187.5 million), and tax effect of adjustments;
|
|
(c)
|
Divestments, reorganizations and discontinued operations: Re-measurement of DAYTRANA contingent consideration to higher fair value ($1.3 million), costs relating to the One Shire reorganization announced at Q1 2013 ($38.4 million) and the collective dismissal and closure of Shire’s facility at Turnhout, Belgium ($2.6 million), tax effect of adjustments and loss from discontinued operations, net of tax ($482.6 million);
|
|
(d)
|
Legal and litigation costs: Costs related to litigation, government investigations, other disputes and external legal costs ($0.9 million), and tax effect of adjustments; and
|
|
(e)
|
Depreciation reclassification: Depreciation of $38.3 million included in Cost of product sales, R&D and SG&A for US GAAP separately disclosed for the presentation of Non GAAP earnings.
|
24 |
3 months to December 31, 2012
|
US GAAP
|
Adjustments
|
Non GAAP
|
|
Memo
Non GAAP including DERMAGRAFT operations
|
|||||||
|
|
|
|
|
|
|
|
|
DERMAGRAFT operations
|
Total
|
||
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
|
|
||||
|
$M
|
$M
|
$M
|
$M
|
$M
|
$M
|
$M
|
|
$M
|
$M
|
||
Product sales
|
1,078.7
|
-
|
-
|
-
|
-
|
-
|
1,078.7
|
|
18.9
|
1,097.6
|
||
Royalties
|
87.2
|
-
|
-
|
-
|
-
|
-
|
87.2
|
|
-
|
87.2
|
||
Other revenues
|
16.4
|
-
|
-
|
-
|
-
|
-
|
16.4
|
|
-
|
16.4
|
||
Total revenues
|
1,182.3
|
-
|
-
|
-
|
-
|
-
|
1,182.3
|
|
18.9
|
1,201.2
|
||
|
|
|
|
|
|
|
|
|
|
|
||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
||
Cost of product sales
|
150.0
|
-
|
-
|
-
|
-
|
(7.3)
|
142.7
|
|
16.0
|
158.7
|
||
R&D
|
278.9
|
(44.2)
|
-
|
-
|
-
|
(4.2)
|
230.5
|
|
3.0
|
233.5
|
||
SG&A
|
625.3
|
(163.9)
|
-
|
-
|
(59.5)
|
(17.0)
|
384.9
|
|
26.8
|
411.7
|
||
Gain on sale of product rights
|
(1.6)
|
-
|
-
|
1.6
|
-
|
-
|
-
|
|
-
|
-
|
||
Integration and acquisition costs
|
7.4
|
-
|
(7.4)
|
-
|
-
|
-
|
-
|
|
-
|
-
|
||
Depreciation
|
-
|
-
|
-
|
-
|
-
|
28.5
|
28.5
|
|
1.1
|
29.6
|
||
Total operating expenses
|
1,060.0
|
(208.1)
|
(7.4)
|
1.6
|
(59.5)
|
-
|
786.6
|
|
46.9
|
833.5
|
||
Operating income
|
122.3
|
208.1
|
7.4
|
(1.6)
|
59.5
|
-
|
395.7
|
|
(28.0)
|
367.7
|
||
|
|
|
|
|
|
|
|
|
|
|
||
Interest income
|
0.7
|
-
|
-
|
-
|
-
|
-
|
0.7
|
|
0.1
|
0.8
|
||
Interest expense
|
(9.2)
|
-
|
-
|
-
|
-
|
-
|
(9.2)
|
|
-
|
(9.2)
|
||
Other expense, net
|
(5.8)
|
4.0
|
-
|
-
|
-
|
-
|
(1.8)
|
|
(0.5)
|
(2.3)
|
||
Total other expense, net
|
(14.3)
|
4.0
|
-
|
-
|
-
|
-
|
(10.3)
|
|
(0.4)
|
(10.7)
|
||
Income from continuing operations before income taxes and equity in earnings of equity method investees
|
108.0
|
212.1
|
7.4
|
(1.6)
|
59.5
|
-
|
385.4
|
|
(28.4)
|
357.0
|
||
Income taxes
|
(40.5)
|
(13.9)
|
1.0
|
-
|
(12.9)
|
-
|
(66.3)
|
|
12.8
|
(53.5)
|
||
Equity in earnings of equity method investees, net of tax
|
0.5
|
-
|
-
|
-
|
-
|
-
|
0.5
|
|
-
|
0.5
|
||
Income from continuing operations
|
68.0
|
198.2
|
8.4
|
(1.6)
|
46.6
|
-
|
319.6
|
|
(15.6)
|
304.0
|
||
Loss from discontinued operations, net of tax
|
(26.0)
|
-
|
-
|
26.0
|
-
|
-
|
-
|
|
-
|
-
|
||
Net income
|
42.0
|
198.2
|
8.4
|
24.4
|
46.6
|
-
|
319.6
|
|
(15.6)
|
304.0
|
||
Impact of convertible debt, net of tax(1)
|
-
|
7.6
|
-
|
-
|
-
|
-
|
7.6
|
|
-
|
7.6
|
||
Numerator for diluted EPS
|
42.0
|
205.8
|
8.4
|
24.4
|
46.6
|
-
|
327.2
|
|
(15.6)
|
311.6
|
||
Weighted average number of shares (millions) – diluted(1)
|
558.5
|
33.5
|
-
|
-
|
-
|
-
|
592.0
|
|
-
|
592.0
|
||
Diluted earnings per ADS
|
22.5c
|
102.2c
|
4.3c
|
12.6c
|
24.0c
|
-
|
165.6c
|
|
(7.8c)
|
157.8c
|
||
|
|
|
|
|
|
|
|
|
|
|
||
Diluted earnings per ADS from continuing operations
|
36.6c
|
102.2c
|
4.3c
|
(1.5c)
|
24.0c
|
-
|
165.6c
|
|
(7.8c)
|
157.8c
|
|
(1)
|
The impact of convertible debt, net of tax has a dilutive effect on Non GAAP basis.
|
|
(a)
|
Amortization and asset impairments: Impairment of IPR&D intangible assets for RESOLOR ($44.2 million), impairment charges of intellectual property rights acquired for RESOLOR in the EU ($126.7 million), amortization of intangible assets relating to intellectual property rights acquired ($37.2 million), impairment of available for sale securities ($4.0 million), and tax effect of adjustments;
|
|
(b)
|
Acquisition and integration activities: Costs primarily associated with the acquisition of FerroKin ($1.5 million), charges related to the change in fair values of contingent consideration liabilities ($5.9 million), and tax effect of adjustments;
|
|
(c)
|
Divestments, reorganizations and discontinued operations: Re-measurement of DAYTRANA contingent consideration to fair value ($1.6 million), tax effect of adjustments and loss from discontinued operations, net of tax ($26.0 million);
|
|
(d)
|
Legal and litigation costs: Costs related to litigation, government investigations, other disputes and external legal costs ($59.5 million), and tax effect of adjustments; and
|
|
(e)
|
Depreciation reclassification: Depreciation of $28.5 million included in Cost of product sales, R&D and SG&A `for US GAAP separately disclosed for the presentation of Non GAAP earnings.
|
25 |
|
3 months to December 31,
|
|
Year to December 31,
|
|
||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
$M
|
|
$M
|
|
$M
|
|
$M
|
|
Net cash provided by operating activities
|
610.3
|
|
371.7
|
|
1,463.0
|
|
1,382.9
|
|
Tax and interest payments, net
|
57.4
|
|
79.9
|
|
318.0
|
|
230.8
|
|
Up-front payments in respect of in-licensed and acquired products
|
-
|
|
-
|
|
-
|
|
23.0
|
|
Non GAAP cash generation
|
667.7
|
|
451.6
|
|
1,781.0
|
|
1,636.7
|
|
|
3 months to December 31,
|
|
Year to December 31,
|
|
||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
$M
|
|
$M
|
|
$M
|
|
$M
|
|
Net cash provided by operating activities
|
610.3
|
|
371.7
|
|
1,463.0
|
|
1,382.9
|
|
Up-front payments in respect of in-licensed and acquired products
|
-
|
|
-
|
|
-
|
|
23.0
|
|
Capital expenditure
|
(46.7)
|
|
(58.0)
|
|
(157.0)
|
|
(149.6)
|
|
Non GAAP free cash flow
|
563.6
|
|
313.7
|
|
1,306.0
|
|
1,256.3
|
|
|
December 31,
|
|
December 31,
|
|||||
|
2013
|
|
2012
|
|||||
|
$M
|
|
$M
|
|||||
Cash and cash equivalents
|
2,239.4
|
|
1,482.2
|
|||||
|
|
|
|
|||||
Convertible bonds
|
-
|
|
(1,100.0)
|
|||||
Other debt
|
(8.9)
|
|
(9.3)
|
|||||
Non GAAP net cash
|
2,230.5
|
|
372.9
|
26 |
|
·
|
Shire’s products may not be a commercial success;
|
|
·
|
revenues from ADDERALL XR are subject to generic erosion and revenues from INTUNIV will become subject to generic competition starting in December 2014;
|
|
·
|
the failure to obtain and maintain reimbursement, or an adequate level of reimbursement, by third-party payors in a timely manner for Shire's products may impact future revenues, financial condition and results of operations;
|
|
·
|
Shire conducts its own manufacturing operations for certain of its Rare Diseases products and is reliant on third party contractors to manufacture other products and to provide goods and services. Some of Shire’s products or ingredients are only available from a single approved source for manufacture. Any disruption to the supply chain for any of Shire’s products may result in Shire being unable to continue marketing or developing a product or may result in Shire being unable to do so on a commercially viable basis for some period of time.
|
|
·
|
the development, approval and manufacturing of Shire’s products is subject to extensive oversight by various regulatory agencies and regulatory approvals or interventions associated with changes to manufacturing sites, ingredients or manufacturing processes could lead to significant delays, increase in operating costs, lost product sales, an interruption of research activities or the delay of new product launches;
|
|
·
|
the actions of certain customers could affect Shire's ability to sell or market products profitably. Fluctuations in buying or distribution patterns by such customers can adversely impact Shire’s revenues, financial conditions or results of operations;
|
|
·
|
investigations or enforcement action by regulatory authorities or law enforcement agencies relating to Shire’s activities in the highly regulated markets in which it operates may result in the distraction of senior management, significant legal costs and the payment of substantial compensation or fines;
|
|
·
|
adverse outcomes in legal matters and other disputes, including Shire’s ability to enforce and defend patents and other intellectual property rights required for its business, could have a material adverse effect on Shire’s revenues, financial condition or results of operations;
|
|
·
|
Shire faces intense competition for highly qualified personnel from other companies, academic institutions, government entities and other organizations. Shire is undergoing a corporate reorganization and the consequent uncertainty could adversely impact Shire’s ability to attract and/or retain the highly skilled personnel needed for Shire to meet its strategic objectives;
|
|
·
|
failure to achieve Shire’s strategic objectives with respect to the acquisition of ViroPharma Incorporated may adversely affect Shire’s financial condition and results of operations;
|
27 |
·
|
Intangible asset amortization and impairment charges; and
|
·
|
Other than temporary impairment of investments.
|
·
|
Up-front payments and milestones in respect of in-licensed and acquired products;
|
·
|
Costs associated with acquisitions, including transaction costs, fair value adjustments on contingent consideration and acquired inventory;
|
·
|
Costs associated with the integration of companies; and
|
·
|
Noncontrolling interests in consolidated variable interest entities.
|
·
|
Gains and losses on the sale of non-core assets;
|
·
|
Costs associated with restructuring and reorganization activities;
|
·
|
Termination costs; and
|
·
|
Income/(losses) from discontinued operations.
|
·
|
Net legal costs related to the settlement of litigation, government investigations and other disputes (excluding internal legal team costs).
|
28 |
29 |