Other Intangible Assets, Net

3 Months Ended

Mar. 31, 2015

Intangible Assets, Net (Excluding Goodwill) [Abstract]

Other Intangible Assets Disclosure

10.       Other intangible assets, net

		March 31,	December 31,
		2015	2014
		$’M	$’M
		________________	________________
Amortized intangible assets
	Intellectual property rights acquired for currently marketed products	9,404.0	4,816.9
	Other intangible assets	375.0	30.0
		________________	________________
		9,779.0	4,846.9
Unamortized intangible assets
	Intellectual property rights acquired for IPR&D	1,724.5	1,550.0
		________________	________________
		11,503.5	6,396.9
Less: Accumulated amortization		(1,523.5)	(1,462.5)
		________________	________________
		9,980.0	4,934.4
		________________	________________

The change in the net book value of other intangible assets for the three monthsto March 31, 2015 and 2014is shown in the table below:

	Other intangible assets
	3 months to	3 months to
	March 31,	March 31,
	2015	2014
	$’M	$’M
	________________	________________
As at January 1,	4,934.4	2,312.6
Acquisitions	5,198.0	2,854.0
Amortization charged	(88.3)	(57.8)
Impairment charges	-	(166.0)
Foreign currency translation	(64.1)	0.6
	________________	________________
As at March 31,	9,980.0	4,943.4
	________________	________________

In the three months to March 31, 2015 the Company acquired intangible assets totaling $5,198 million, relating to the fair value of intangible assets for currently marketed products and royalty right assets acquired with NPS Pharma of $5,023 million and IPR&D assets of $175 million acquired with Meritage (see Note 2 for further details).

The Company reviews its intangible assets for impairment whenever events or circumstances suggest that their carrying value may not be recoverable. Based on estimates and circumstances at March 31, 2015 the Company determined that its intangible assets remained recoverable.

On April 9, 2015 the Company announced that the 13-week Phase 2 IMAGO trial of its investigational compound SHP625 did not meet the primary or secondary endpoints in the study of 20 pediatric patients with Alagille syndrome (“ALGS”). As a result, it is possible that changes in estimates or circumstances in the second quarter of 2015 could result in an impairment loss being recorded in respect of the SHP625 IPR&D intangible asset, with a charge to R&D. The Company cannot currently estimate the amount of the impairment loss, if any. It is also possible that the fair value of the related contingent consideration payable from the Lumena acquisition (through which Shire acquired SHP625) will be reduced, with a credit to Integration and acquisition costs.

In the three months to March 31, 2014 the Company identified indicators of impairment in respect of its SHP602 (iron chelating agent for the treatment of iron overload secondary to chronic transfusion) IPR&D asset.The Company therefore reviewed the recoverability of its SHP602 IPR&D asset and recorded an impairment charge of $166.0 million within R&D expenses in the consolidated statement of income to record the SHP602 IPR&D asset to its revised fair value.

Management estimates that the annual amortization charge in respect of intangible assets held at March 31, 2015will be approximately $481 million for each of the five years to March 31, 2020.Estimated amortization expense can be affected by various factors including future acquisitions, disposals of product rights, regulatory approval and subsequent amortization of acquired IPR&D projects, foreign exchange movements and the technological advancement and regulatory approval of competitor products.