10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the Quarterly Period ended June 30, 2015

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 [ ]

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 [ ]

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

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

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

Yes [ ]           No [X]

As at July 17, 2015 the number of outstanding ordinary shares of the Registrant was 600,479,791.

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, Shire’s results could be materially adversely affected. The risks and uncertainties include, but are not limited to, that:

· Shire’s products may not be a commercial success;

· product sales from ADDERALL XR and INTUNIV are subject to generic competition;

· the failure to obtain and maintain reimbursement, or an adequate level of reimbursement, by third-party payers in a timely manner for Shire's products may affect future revenues, financial condition and results of operations;

· Shire conducts its own manufacturing operations for certain of its products and is reliant on third party contract manufacturers 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 manufacture of Shire’s products is subject to extensive oversight by various regulatory agencies. Regulatory approvals or interventions associated with changes to manufacturing sites, ingredients or manufacturing processes could lead to significant delays, an increase in operating costs, lost product sales, an interruption of research activities or the delay of new product launches;

· Shire has a portfolio of products in various stages of research and development. The successful development of these products is highly uncertain and requires significant expenditures and time, and there is no guarantee that these products will receive regulatory approval;

· 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 affect Shire’s revenues, financial condition 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 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 and organizations. Shire is undergoing a corporate reorganization and was the subject of an unsuccessful acquisition proposal and the consequent uncertainty could adversely affect 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 NPS Pharmaceuticals Inc. (“NPS Pharma”) may adversely affect Shire’s financial condition and results of operations; and

other risks and uncertainties detailed from time to time in Shire’s filings with the Securities and Exchange Commission, including those risks outlined in “Item 1A: Risk Factors” in Shire’s Annual Report on Form 10-K for the year ended December 31, 2014.

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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)

BUCCOLAM^® (midazolam hydrochloride oromucosal solution)

CALCICHEW^® (trademark of Takeda Nycomed AS)

CINRYZE^® (C1 esterase inhibitor [human])

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

DERMAGRAFT^® (trademark of Organogenesis Inc. (“Organogenesis”))

ELAPRASE^® (idursulfase)

ELVANSE^® (lisdexamfetamine dimesylate)

FIRAZYR^® (icatibant)

FOSRENOL^® (lanthanum carbonate)

GATTEX^® (teduglutide [rDNA origin])

INTUNIV^® (guanfacine extended release)

LIALDA^® (trademark of Nogra International Limited)

MEZAVANT^® (trademark of Giuliani International Limited)

MIMPARA^® (cinacalcet HCl)

NATPAR^® (parathyroid hormone) 

NATPARA^® (parathyroid hormone (rDNA))

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

PLENADREN^® (hydrocortisone, modified release tablet)

REGPARA^® (cinacalcet HCl) 

REPLAGAL^® (agalsidase alfa)

RESOLOR^® (prucalopride)

REVESTIVE^® (teduglutide)

SENSIPAR^® (cinacalcet HCl)

VANCOCIN^® (trademark of ANI Pharmaceuticals Inc.)

VPRIV^® (velaglucerase alfa)

VYVANSE^® (lisdexamfetamine dimesylate)

XAGRID^® (anagrelide hydrochloride)

ZEFFIX^® (trademark of GSK)

3TC^® (trademark of GSK)

3 

SHIRE PLC

Form 10-Q for the three months to June 30, 2015

Table of contents

	Page
PART I FINANCIAL INFORMATION	5
ITEM 1.  Financial statements
Unaudited Consolidated Balance Sheets at June 30, 2015 and December 31, 2014	5
Unaudited Consolidated Statements of Income for the three months and six months to June 30, 2015 and June 30, 2014	7
Unaudited Consolidated Statements of Comprehensive Income for the three months and six months to June 30, 2015 and June 30, 2014	9
Unaudited Consolidated Statement of Changes in Equity for the six months to June 30, 2015	10
Unaudited Consolidated Statements of Cash Flows for the six months to June 30, 2015 and June 30, 2014	11
Notes to the Unaudited Consolidated Financial Statements	13
ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	40
ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	59
ITEM 4.  CONTROLS AND PROCEDURES	59
PART II OTHER INFORMATION
PART II  OTHER INFORMATION	59
ITEM 1.  LEGAL PROCEEDINGS	59
ITEM 1A.  RISK FACTORS	59
ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	59
ITEM 3.  DEFAULTS UPON SENIOR SECURITIES	59
ITEM 4.  MINE SAFETY DISCLOSURES	59
ITEM 5.  OTHER INFORMATION	60
ITEM 6.  EXHIBITS	60

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PART I: FINANCIAL INFORMATION

ITEM1: FINANCIAL STATEMENTS

SHIRE PLC

UNAUDITED CONSOLIDATED BALANCE SHEETS

			June 30,		December 31,
			2015		2014
	Notes		$’M		$’M
ASSETS
Current assets:
Cash and cash equivalents				64.0		2,982.4
Restricted cash				74.0		54.6
Accounts receivable, net		5		1,099.2		1,035.1
Inventories		6		632.8		544.8
Deferred tax asset				455.4		344.7
Prepaid expenses and other current assets		8		221.6		221.5
Total current assets				2,547.0		5,183.1
Non-current assets:
Investments				50.0		43.7
Property, plant and equipment, net (“PP&E”)				816.7		837.5
Goodwill		9		4,173.2		2,474.9
Other intangible assets, net		10		9,310.4		4,934.4
Deferred tax asset				107.9		112.1
Other non-current assets				25.3		46.4
Total assets				17,030.5		13,632.1
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued expenses		11		1,939.7		1,909.4
Short-term borrowings		13		2,229.9		850.0
Other current liabilities		12		145.5		262.5
Total current liabilities				4,315.1		3,021.9
Non-current liabilities:
Long-term borrowings		13		73.9		-
Deferred tax liability				2,808.4		1,210.6
Other non-current liabilities		14		718.7		736.7
Total liabilities				7,916.1		4,969.2
Commitments and contingencies		15		-		-

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SHIRE PLC

UNAUDITED CONSOLIDATED BALANCE SHEETS (continued)

			June 30,			December 31,
			2015			2014
	Notes		$’M			$’M
Equity:
Common stock of 5p par value; 1,000 million shares authorized; and 600.5 million shares issued and outstanding (2014: 1,000 million shares authorized; and 599.1 million shares issued and outstanding)				58.9			58.7
Additional paid-in capital				4,409.3			4,338.0
Treasury stock: 9.8 million shares (2014: 10.6 million shares)				(323.5	)		(345.9	)
Accumulated other comprehensive loss		16		(111.5	)		(31.5	)
Retained earnings				5,081.2			4,643.6
Total equity				9,114.4			8,662.9
Total liabilities and equity				17,030.5			13,632.1

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

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SHIRE PLC

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

		3 months to		3 months to		6 months to		6 months to
		June 30,		June 30,		June 30,		June 30,
		2015		2014		2015		2014
	Notes	$’M		$’M		$’M		$’M
Revenues:
Product sales		1,476.2		1,469.6		2,899.4		2,777.7
Royalties		79.1		29.2		141.9		61.5
Other revenues		2.3		3.3		4.7		9.7
Total revenues		1,557.6		1,502.1		3,046.0		2,848.9
Costs and expenses:
Cost of product sales		228.0		277.0		455.8		506.5
Research and development(1)		775.9		236.9		969.6		597.4
Selling, general and administrative(1)		627.3		496.2		1,133.9		926.5
Gain on sale of product rights		(7.1	)	(3.8	)	(12.3	)	(40.2	)
Reorganization costs	3	13.3		45.8		28.5		95.2
Integration and acquisition costs	4	(212.4	)	112.1		(136.7	)	118.7
Total operating expenses		1,425.0		1,164.2		2,438.8		2,204.1
Operating income from continuing operations		132.6		337.9		607.2		644.8
Interest income		0.6		18.7		2.6		19.2
Interest expense		(11.3	)	(11.1	)	(20.9	)	(18.9	)
Other (expense)/income, net		(2.0	)	3.3		2.3		8.0
Total other (expense)/ income, net		(12.7	)	10.9		(16.0	)	8.3
Income from continuing operations before income taxes and equity in earnings/ (losses) of equity method investees		119.9		348.8		591.2		653.1
Income taxes	21	44.1		176.5		(13.3	)	125.9
Equity in earnings/ (losses) of equity method investees, net of taxes		0.1		3.0		(0.9	)	2.4
Income from continuing operations, net of taxes		164.1		528.3		577.0		781.4
Loss from discontinued operations, net of  taxes1	7	(4.5	)	(5.2	)	(7.0	)	(27.9	)
Net income		159.6		523.1		570.0		753.5

(1) Research and development (“R&D”) includes IPR&D intangible asset impairment charges of $523.3 million for the three months to June 30, 2015 (2014: $22.0 million) and $523.3 million for the six months to June 30, 2015 (2014: $188.0 million). Selling, general and administrative (“SG&A”) costs include amortization of intangible assets relating to intellectual property rights acquired of $131.3 million for the three months to June 30, 2015 (2014: $61.2 million) and $219.6 million for the six months to June 30, 2015 (2014: $119.0 million).

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SHIRE PLC

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (continued)

			3 months to			3 months to			6 months to			6 months to
			June 30,			June 30,			June 30,			June 30,
	Notes		2015			2014			2015			2014
Earnings per ordinary share - basic
Earnings from continuing operations				27.8	c		90.1	c		97.8	c		133.6	c
Loss from discontinued operations		1		(0.8	c)		(0.9	c)		(1.2	c)		(4.8	c)
Earnings per ordinary share - basic				27.0	c		89.2	c		96.6	c		128.8	c
Earnings per ordinary share - diluted
Earnings from continuing operations				27.7	c		89.5	c		97.3	c		132.3	c
Loss from discontinued operations		1		(0.8	c)		(0.9	c)		(1.2	c)		(4.7	c)
Earnings per ordinary share - diluted				26.9	c		88.6	c		96.1	c		127.6	c
Weighted average number of shares (millions):
Basic		19		590.5			586.4			589.8			585.3
Diluted		19		593.2			590.3			593.0			590.3

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

8 

SHIRE PLC

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	3 months to		3 months to			6 months to			6 months to
	June 30,		June 30,			June 30,			June 30,
	2015		2014			2015			2014
		$'M		$'M			$'M			$'M
Net income		159.6		523.1			570.0			753.5
Other comprehensive income:
Foreign currency translation adjustments		46.2		11.9			(83.3	)		10.2
Unrealized holding gain/(loss) on available-for-sale securities (net of taxes of $nil, $0.4 million,  $nil and $2.1 million)		2.6		(0.6	)		3.3			3.7
Comprehensive income		208.4		534.4			490.0			767.4

The components of accumulated other comprehensive income as at June 30, 2015 and December 31, 2014 are as follows:

	June 30,			December 31,
	2015			2014
	$’M			$’M
Foreign currency translation adjustments		(109.0	)		(25.7	)
Unrealized holding loss on available-for-sale securities, net of taxes		(2.5	)		(5.8	)
Accumulated other comprehensive loss		(111.5	)		(31.5	)

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

9 

SHIRE PLC

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(In millions of US dollars except share data)

	Shire plc shareholders' equity
	Common stock Number of shares M's	Common stock $'M	Additional paid-in capital $’M	Treasury stock $'M		Accumulated other comprehensive loss $'M		Retained earnings $'M		Total equity $'M
As at January 1, 2015	599.1	58.7	4,338.0	(345.9	)	(31.5	)	4,643.6		8,662.9
Net income	-	-	-	-		-		570.0		570.0
Other comprehensive loss, net of tax	-	-	-	-		(80.0	)	-		(80.0	)
Options exercised	1.4	0.2	-	-		-		-		0.2
Share-based compensation	-	-	44.3	-		-		-		44.3
Tax benefit associated with exercise of stock options	-	-	27.0	-		-		-		27.0
Shares released by employee benefit trust to satisfy exercise of stock options	-	-	-	22.4		-		(22.2	)	0.2
Dividends	-	-	-	-		-		(110.2	)	(110.2	)
As at June 30, 2015	600.5	58.9	4,409.3	(323.5	)	(111.5	)	5,081.2		9,114.4

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

Dividends per share

During the six months to June 30, 2015 Shire plc declared and paid dividends of 19.09 US cents per ordinary share (equivalent to 57.27 US cents per ADS) totalling $110.2million.

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SHIRE PLC 

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

	6 months to			6 months to
	June 30,			June 30,
	2015			2014
	$’M			$’M
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		570.0			753.5
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		291.8			204.8
Share-based compensation		44.3			55.7
Change in fair value of contingent consideration		(255.7	)		21.4
Impairment of intangible assets		523.3			188.0
Write down of assets		-			13.0
Gain on sale of product rights		(12.3	)		(40.2	)
Unwind of inventory fair value step-ups		16.3			72.5
Other, net		11.1			14.1
Movement in deferred taxes		(79.4	)		25.3
Equity in losses/(earnings) of equity method investees		0.9			(2.4	)
Changes in operating assets and liabilities:
Increase in accounts receivable		(84.9	)		(37.3	)
Increase in sales deduction accruals		37.3			106.0
Increase in inventory		(37.4	)		(11.7	)
Decrease/(increase) in prepayments and other assets		28.4			(137.5	)
Decrease in accounts and notes payable and other liabilities		(39.8	)		(145.1	)
Net cash provided by operating activities (A)		1,013.9			1,080.1
CASH FLOWS FROM INVESTING ACTIVITIES:
Movements in restricted cash		(19.5	)		(11.9	)
Purchases of subsidiary undertakings and businesses, net of cash acquired		(5,249.2	)		(4,018.3	)
Purchases of non-current investments		(4.9	)		(3.1	)
Purchases of PP&E		(39.8	)		(19.1	)
Proceeds from short-term investments		67.0			56.3
Proceeds received on sale of product rights		8.8			52.8
Proceeds from disposal of non-current investments		4.4			8.0
Other, net		(0.9	)		(2.8	)
Net cash used in investing activities (B)		(5,234.1	)		(3,938.1	)

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SHIRE PLC

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

	6 months to			6 months to
	June 30,			June 30,
	2015			2014
	$’M			$’M
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from revolving line of credit, long term and short term borrowings		2,925.6			2,310.8
Repayment of revolving line of credit and short term borrowings		(1,530.9	)		(1,251.6	)
Repayment of debt acquired through business combinations		-			(551.5	)
Proceeds from ViroPharma call options		-			346.7
Payment of dividend		(110.2	)		(99.6	)
Excess tax benefit associated with exercise of stock options		27.0			29.1
Contingent consideration payments		(4.5	)		(10.3	)
Other, net		(4.5	)		(0.3	)
Net cash provided by financing activities(C)		1,302.5			773.3
Effect of foreign exchange rate changes on cash and cash equivalents (D)		(0.7	)		(1.1	)
Net decrease in cash and cash equivalents(A+B+C+D)		(2,918.4	)		(2,085.8	)
Cash and cash equivalents at beginning of period		2,982.4			2,239.4
Cash and cash equivalents at end of period		64.0			153.6

Supplemental information associated with continuing operations:

	6 months to			6 months to
	June 30,			June 30,
	2015			2014
	$’M			$’M
Interest paid		(9.9	)		(7.7	)
Income taxes repaid		65.2			248.0
Income taxes paid		(65.2	)		(165.1	)

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

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SHIRE PLC

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies

(a) Basis of 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 at December 31, 2014 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, 2014.

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, consisting only of normal recurring 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, sales deductions, income taxes (including provisions for uncertain tax positions and the realization of deferred tax assets), provisions for litigation and legal proceedings, contingent consideration receivable from product divestments and contingent consideration payable in respect of business combinations and asset purchases. 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.

(c) New accounting pronouncements

Adopted during the period

Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity

In April 2014 the Financial Accounting Standards Board (“FASB”) issued guidance on the reporting of discontinued operations and disclosures of disposals of components of an entity. The amendments in this update revise the definition of discontinued operations by limiting discontinued operations reporting to disposals of components of an entity that represent strategic shifts that have (or will have) a major effect on an entity’s operations and financial results. The guidance requires expanded disclosures for discontinued operations which provide users of financial statements with more information about the assets, liabilities, revenues, and expenses of discontinued operations. The guidance also requires an entity to disclose the pre-tax profit or loss of an individually significant component of an entity that does not qualify for discontinued operations reporting.

Shire adopted this guidance in the period, which will be effective for discontinued operations occurring after January 1, 2015. The adoption of this guidance did not impact the Company’s consolidated financial position, results of operations or cash flows.

To be adopted in future periods

Revenue from Contracts with Customers

In May 2014 the FASB and the International Accounting Standards Board (together the “Accounting Standards Boards”) issued a new accounting standard that is intended to clarify and converge the financial reporting requirements for revenue

13 

from contracts with customers. The core principle of the standard is that an “entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services”. To achieve that core principle the Accounting Standards Boards developed a five-step model (as presented below) and related application guidance, which will replace most existing revenue recognition guidance in US GAAP.

Five-step model:

Step 1: Identify the contract(s) with a customer.

Step 2: Identify the performance obligations in the contract.

Step 3: Determine the transaction price.

Step 4: Allocate the transaction price to the performance obligations in the contract.

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

The Accounting Standards Boards also issued new qualitative and quantitative disclosure requirements as part of the new accounting standard which aims to enable financial statement users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

In July 2015 the FASB decided to defer the effective date of the guidance by one year. Based on this deferral, public entities would need to apply the new guidance for annual reporting periods beginning after December 15, 2017, and interim periods therein. The Company is currently evaluating the impact of adopting this guidance.

Amendments to the Consolidation Analysis

In February 2015 the FASB issued guidance to respond to stakeholders’ concerns about the current accounting for consolidation of certain legal entities. Financial statement users asserted that in certain situations in which consolidation is ultimately required, deconsolidated financial statements are necessary to better analyze the reporting entity’s economic and operational results. Previously, the FASB issued an indefinite deferral for certain entities to partially address those concerns. However, the amendments in this guidance rescind that deferral and address those concerns by making changes to the consolidation guidance.

Under the amendments, all reporting entities are within the scope of Subtopic 810-10, Consolidation, including limited partnerships and similar legal entities, unless a scope exception applies. The presumption that a general partner controls a limited partnership has been eliminated. In addition, fees paid to decision makers that meet certain conditions no longer cause decision makers to consolidate a VIE in certain instances. The amendments place more emphasis in the consolidation evaluation on variable interests other than fee arrangements such as principal investment risk (for example, debt or equity interests), guarantees of the value of the assets or liabilities of the VIE, written put options on the assets of the VIE, or similar obligations, including some liquidity commitments or agreements (explicit or implicit). Additionally, the amendments reduce the extent to which related party arrangements cause an entity to be considered a primary beneficiary.

The amendments are effective for public business entities for fiscal years, and for interim periods therein, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. The Company does not expect the adoption of this guidance to have a material effect on its consolidated financial position, results of operations and cash flows.

Simplifying the Presentation of Debt Issuance Costs

In April 2015 the FASB issued guidance to simplify the presentation of debt issuance costs. The guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this update. The amendments in this update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods therein.

Early adoption of the amendments in this update is permitted for financial statements that have not been previously issued. An entity should apply the new guidance on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. Upon transition, an entity is required to comply with the applicable disclosures for a change in an accounting principle. The Company does not expect the adoption of this guidance to have a material effect on its consolidated financial position, results of operations and cash flows.

Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement

In April 2015 the FASB issued guidance to simplify the customer’s accounting for fees paid in a cloud computing arrangement. The amendments provide guidance to customers about whether a cloud computing arrangement includes a

14 

software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The amendments will be effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted for all entities. An entity can elect to adopt the guidance either a) prospectively to all arrangements entered into or materially modified after the effective date or b) retrospectively. The Company is currently evaluating the impact of adopting this guidance.

2. Business combinations

Acquisition of NPS Pharma

On February 21, 2015 Shire completed its acquisition of 100% of the outstanding share capital of NPS Pharma. The acquisition-date fair value of cash consideration paid on closing was $5,220 million.

The acquisition of NPS Pharma added GATTEX/REVESTIVE, approved in the US and EU for the treatment of adults with short bowel syndrome (“SBS”), a rare and potentially fatal gastrointestinal disorder and NATPARA/NATPAR approved in the US for the treatment of hypoparathyroidism (“HPT”), a rare endocrine disease, to Shire’s portfolio of currently marketed products.

The acquisition of NPS Pharma has been accounted for as a business combination using the acquisition method. The assets acquired and the liabilities assumed from NPS Pharma have been recorded at their preliminary fair values at the date of acquisition, being February 21, 2015. The Company’s consolidated financial statements include the results of NPS Pharma from February 21, 2015.

The amount of NPS Pharma’s post-acquisition revenues and pre-tax losses included in the Company’s consolidated statement of income for the three months to June 30, 2015 were $80.9 million and $108.7 million respectively. The pre-tax loss includes charges on the unwind of inventory fair value adjustments of $5.2 million, intangible asset amortization of $71.4 million and integration costs of $43.3 million.

The amount of NPS Pharma’s post-acquisition revenues and pre-tax losses included in the Company’s consolidated statement of income for the six months to June 30, 2015 were $107.1 million and $159.9 million respectively. The pre-tax loss includes charges on the unwind of inventory fair value adjustments of $15.1 million, intangible asset amortization of $101.5 million and integration costs of $60.7 million.

During the second quarter of 2015, within the measurement period, the Company obtained both additional and improved information about the acquisition-date fair value of NPS Pharma inventories. This information included: an assessment and alignment of NPS Pharma’s policy for classifying inventories as raw material, work-in-progress or finished goods with that of Shire; insight into the amount and carrying value of short-lived inventories; and insight into inventories which were available for commercial sale that were previously expensed by NPS Pharma as they were manufactured prior to the necessary regulatory approval. The Company’s preliminary allocation of the purchase price to the assets acquired and liabilities assumed, including the measurement periods adjustment with respect to inventories and certain other immaterial measurement period adjustments, is outlined below:

15 

	Preliminary
	Fair value
	$’M
ASSETS
Current assets:
Cash and cash equivalents	41.6
Short-term investments	67.0
Accounts receivable	33.4
Inventories	89.4
Deferred tax assets	156.3
Other current assets	11.1
Total current assets	398.8
Non-current assets:
PP&E	4.8
Goodwill	1,679.4
Other intangible assets
- currently marketed products	4,640.0
- royalty rights (categorized as "Other amortized intangible assets" )	353.0
Total assets	7,076.0
LIABILITIES
Current liabilities:
Accounts payable and other current liabilities	72.5
Short-term debt	27.4
Non-current liabilities:
Long-term debt, less current portion	78.9
Deferred tax liabilities	1,673.1
Other non-current liabilities	4.5
Total liabilities	1,856.4
Fair value of identifiable assets acquired and liabilities assumed	5,219.6
Consideration	_______________
Cash consideration paid	5,219.6

The purchase price allocation is preliminary pending final determination of the fair values of certain assets and liabilities. In particular the fair values of intangible assets and current and deferred tax assets and liabilities are preliminary pending receipt of the final valuations for those items. The final determination of these fair values will be completed as soon as possible but no later than one year from the acquisition date.

(a) Other intangible assets – currently marketed products

Other intangible assets totaling $4,640.0 million relate to intellectual property rights acquired for NPS Pharma’s currently marketed products, primarily attributed to NATPARA/NATPAR, and GATTEX/REVESTIVE. The fair value of the currently marketed products is preliminary and has been estimated using an income approach, based on the present value of incremental after tax cash flows attributable to each separately identifiable intangible asset.

16 

The estimated useful lives of the NATPARA/NATPAR and GATTEX/REVESTIVE intangible assets are 24 years, with amortization being recorded on a straight-line basis.

(b) Other intangible assets – Royalty rights

Other intangibles totaling $353.0 million relate to the royalty rights arising from the collaboration agreements with Amgen, Janssen and Kyowa Hakko Kirin. Amgen markets cinacalcet HCl as Sensipar in the US and as Mimpara in the EU; Janssen Pharmaceuticals markets tapentadol as Nucynta in the US; and Kyowa Hakko Kirin markets cinacalcet HCI as Regpara in Japan, Hong Kong, Malaysia, Macau, Singapore, and Taiwan. NPS Pharma is entitled to royalties from the relevant net sales of these products.

The fair value of these royalty rights is preliminary and has been estimated using an income approach, based on the present value of incremental after tax cash flows attributable to each royalty right.

The estimated useful lives of these royalty rights range from 4 to 5 years (weighted average 4 years), with amortization being recorded on a straight-line basis.

(c) Goodwill

Goodwill arising of $1,679.4 million, which is not deductible for tax purposes, includes the expected synergies that will result from combining the operations of NPS Pharma with the operations of Shire, particularly those synergies expected to be realized due to Shire’s structure; intangible assets that do not qualify for separate recognition at the time of the acquisition; and the value of the assembled workforce.

In the three and six months to June 30, 2015 the Company expensed costs of $47.8 million and $117.7 million respectively, relating to the acquisition and post-acquisition integration of NPS Pharma, which have been recorded within Integration and acquisition costs in the Company’s consolidated statement of income.

Supplemental disclosure of pro forma information

The following unaudited pro forma financial information presents the combined results of the operations of Shire and NPS Pharma as if the acquisition of NPS Pharma had occurred as at January 1, 2014. 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.

	6 months to			6 months to
	June 30,			June 30,
	2015			2014
	$’M			$’M
Revenues		3,075.9			2,949.0
Net income from continuing operations		526.6			565.7
Per share amounts:
Net income from continuing operations per share - basic		95.9	c		96.6	c
Net income from continuing operations per share - diluted		95.4	c		95.8	c

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

(i) an adjustment to decrease net income by $107.2 million for the period to June 30, 2014 to reflect acquisition costs incurred by Shire and NPS Pharma, and increase net income by $107.2 million for the period to June 30, 2015 to eliminate acquisition costs incurred;

(ii) an adjustment to decrease net income by $9.2 million for the period to June 30, 2014 to reflect charges on the unwind of inventory fair value adjustments as acquisition date inventory is sold, and a corresponding increase in net income for the period to June 30, 2015;

17 

(iii) an adjustment of $11.1 million in the period to June 30, 2014 to reflect additional interest expense associated with the drawdown of debt to partially finance the acquisition of NPS Pharma and the amortization of related deferred debt issuance costs;

(iv) an adjustment to increase amortization expense by approximately $21.1 million in the period to June 30, 2015 and $83.6 million in the period to June 30, 2014 related to amortization of the fair value of identifiable intangible assets acquired and the elimination of NPS Pharma’s historical intangible asset amortization expense; and

The adjustments above are stated net of their tax effects, where applicable.

Acquisition of Meritage Pharma Inc. (“Meritage”)

Prior to the acquisition of ViroPharma by Shire (see below), ViroPharma had entered into an exclusive development and option agreement with Meritage, a privately owned US company focusing on developing oral budesonide suspension (“OBS”) as a treatment for eosinophilic esophagitis. Under the terms of this agreement Meritage controlled and conducted all related research up to achievement of pre-defined development success criteria at which point ViroPharma had the option to acquire Meritage.

On February 18, 2015, following the exercise of the purchase option, Shire acquired all the outstanding equity of Meritage. The acquisition date fair value of the consideration totaled $166.9 million, comprising cash consideration paid on closing of $74.8 million and the fair value of contingent consideration payable of $92.1 million. The maximum amount of contingent cash consideration which may be payable by Shire in future periods is $175.0 million dependent upon achievement of certain clinical development and regulatory milestones.

With the Meritage acquisition, Shire has acquired the global rights to Meritage’s Phase 3-ready compound, OBS, for the treatment of adolescents and adults with eosinophilic esophagitis.

The acquisition of Meritage has been accounted for as a business combination using the acquisition method. The assets and liabilities assumed from Meritage have been recorded at their preliminary fair values at the date of acquisition, being February 18, 2015. The Company’s consolidated financial statements and results of operations include the results of Meritage from February 18, 2015.

The purchase price allocation is preliminary pending the determination of the fair values of certain assets and liabilities. The purchase price has been allocated on a preliminary basis to the OBS IPR&D intangible asset ($175 million), net current assets assumed ($5.5 million), net non-current liabilities assumed (including deferred tax liabilities) ($54.7 million) and goodwill ($41.1 million). Goodwill arising of $41.1 million is not deductible for tax purposes.

Unaudited pro forma financial information to present the combined results of operations of Shire and Meritage is not provided as the impact of this acquisition is not material to the Company’s results of operations for any period presented.

Acquisition of ViroPharma Incorporated (“ViroPharma”)

On January 24, 2014 Shire completed its acquisition of 100% of the outstanding share capital of ViroPharma. The acquisition-date fair value of cash consideration paid on closing was $3,997 million.

The acquisition of ViroPharma added CINRYZE to Shire’s portfolio of currently marketed products. CINRYZE is a leading brand for the prophylactic treatment of Hereditary Angioedema (“HAE”) in adolescents and adults.

The acquisition of ViroPharma has been accounted for as a business combination using the acquisition method. The assets acquired and the liabilities assumed from ViroPharma have been recorded at their fair values at the date of acquisition, being January 24, 2014. The Company’s consolidated financial statements include the results of ViroPharma from January 24, 2014.

The purchase price allocation was finalized in the fourth quarter of 2014. The Company’s allocation of the purchase price to the fair value of assets acquired and liabilities assumed is outlined below:

18 

	Acquisition date fair value
	$’M
Identifiable assets acquired and liabilities assumed
ASSETS
Current assets:
Cash and cash equivalents	232.6
Short-term investments	57.8
Accounts receivable	52.2
Inventories	203.6
Deferred tax assets	100.7
Purchased call option	346.7
Other current assets	50.9
Total current assets	1,044.5
Non-current assets:
PP&E	24.7
Goodwill	1,655.5
Other intangible assets
- Currently marketed products	2,320.0
- In-Process Research and Development (“IPR&D”)	315.0
Other non-current assets	10.4
Total assets	5,370.1
LIABILITIES
Current liabilities:
Accounts payable and other current liabilities	122.7
Convertible bond	551.4
Non-current liabilities:
Deferred tax liabilities	603.5
Other non-current liabilities	95.5
Total liabilities	1,373.1
Fair value of identifiable assets acquired and liabilities assumed	3,997.0
Consideration
Cash consideration paid	3,997.0

(a) Other intangible assets – currently marketed products

Other intangible assets totaled $2,320.0 million at the date of acquisition, relating to intellectual property rights acquired for ViroPharma’s then currently marketed products, primarily attributed to CINRYZE, for the routine prophylaxis against HAE attacks in adolescent and adult patients. Shire also obtained intellectual property rights to three other

19 

commercialized products, PLENADREN, an orphan drug for the treatment of adrenal insufficiency in adults, BUCCOLAM, an oromucosal solution for the treatment of prolonged, acute, and convulsive seizures in infants, toddlers, children and adolescents and VANCOCIN, an oral capsule formulation for the treatment of C. difficile-associated diarrhea (“CDAD”), which was divested by Shire in the third quarter of 2014. The fair value of currently marketed products has been estimated using an income approach, based on the present value of incremental after tax cash flows attributable to each separately identifiable intangible asset.

The estimated useful lives of the CINRYZE, PLENADREN and BUCCOLAM intangible assets range from 10 to 23 years (weighted average 22 years), with amortization being recorded on a straight-line basis.

(b) Other intangible assets – IPR&D

The IPR&D asset of $315.0 million relates to maribavir (now SHP620), an investigational antiviral product for cytomegalovirus. The fair value of this IPR&D asset was estimated based on an income approach, using the present value of incremental after tax cash flows expected to be generated by this development project after the deduction of contributory asset charges for other assets employed in this project. The estimated cash flows have been probability adjusted to take into account the stage of completion and the remaining risks and uncertainties surrounding the future development and commercialization.

The major risks and uncertainties associated with the timely completion of the acquired IPR&D project include the ability to confirm the efficacy of the technology based on the data from clinical trials, and obtaining the relevant regulatory approvals as well as other risks as described in the Company’s Annual Report on Form 10-K. The valuation of IPR&D has been based on information available at the time of the acquisition (and information obtained during the measurement period) and on expectations and assumptions that (i) have been deemed reasonable by the Company’s management and (ii) are based on information, expectations and assumptions that would be available to a market participant. However, no assurance can be given that the assumptions and events associated with such assets will occur as projected. For these reasons, the actual cash flows may vary from forecast future cash flows.

The estimated probability adjusted after tax cash flows used in fair valuing other intangible assets have been discounted at rates ranging from 9.5% to 10.0%.

(c) Goodwill

Goodwill arising of $1,655.5 million, which is not deductible for tax purposes, includes the expected operational synergies that will result from combining the commercial operations of ViroPharma with those of Shire (valued at approximately $400 million); other synergies expected to be realized due to Shire’s structure; intangible assets that do not qualify for separate recognition at the time of the acquisition; and the value of the assembled workforce.

3. Reorganization costs

One Shire business reorganization

On May 2, 2013, the Company initiated the reorganization of its business to integrate the three divisions into a simplified One Shire organization in order to drive future growth and innovation.

In 2014 certain aspects of the One Shire program were temporarily put on hold due to AbbVie’s offer for Shire, which was terminated in October 2014. Subsequent to the termination of AbbVie’s offer, Shire announced on November 10, 2014 its plans to relocate over 500 positions to Lexington, Massachusetts from its Chesterbrook, Pennsylvania, site and establish Lexington as the Company’s US operational headquarters in continuation of the One Shire efficiency program. This relocation will streamline business globally through two principal locations, Massachusetts and Switzerland, with support from regional and country-based offices around the world.

In the three and six months to June 30, 2015 the Company incurred reorganization costs totaling $13.3 million and $28.5 million, respectively relating to employee involuntary termination benefits and other reorganization costs. Reorganization costs of $274.0 million have been incurred since May 2013. The One Shire reorganization is expected to be substantially completed by the end of 2015. Currently, the Company estimates that further costs in respect of the One Shire reorganization of approximately $102 million will be expensed as incurred during 2015.

The liability for reorganization costs arising from the One Shire business reorganization at June 30, 2015 is as follows:

20 

	Opening liability		Amount					Closing liability at
	at January 1,		charged to re-					June 30,
	2015		organization		Paid/Utilized			2015
	$'M		$'M		$'M			$'M
Involuntary termination benefits		38.0		19.7		(26.4	)		31.3
Other reorganization costs		-		8.8		(6.9	)		1.9
		38.0		28.5		(33.3	)		33.2

At June 30, 2015 the closing reorganization cost liability was recorded within accounts payable and accrued expenses.

4. Integration and acquisition costs

For the three and six months to June 30, 2015 Shire recorded a net credit to integration and acquisition costs of $212.4 million and $136.7 million respectively. The net credit principally comprises (i) costs related to the acquisition and integration of NPS Pharma ($47.8 million and $117.7 million in the three and six months to June 30, 2015 respectively), offset by (ii) a net credit relating to the change in the fair value of contingent consideration liabilities of $258.1 million and $255.7 million in the three and six months to June 30, 2015 respectively. The net credit relating to the change in fair value of contingent consideration liabilities principally relates to the acquisition of Lumena Pharmaceuticals, Inc. (“Lumena”), reflecting a lower probability of success for the SHP625 asset (for the treatment of cholestatic liver diseases) following the receipt of data from certain Phase 2 studies, and the acquisition of Lotus Tissue Repair, Inc. (“Lotus Tissue Repair”), reflecting a lower probability of success for the SHP608 asset (for the treatment of Dystrophic Epidermolysis Bullosa (“DEB”)) as a result of certain preclinical toxicity findings (see note 10 for further details).

In the three and six months to June 30, 2014 Shire recorded integration and acquisition costs of $112.1 million and $118.7 million respectively. In the three months to June 30, 2014 the charge comprised an $80.6 million net charge on the fair value of contingent consideration liabilities (principally in relation to the acquisition of SARcode Bioscience Inc. (“SARcode”), reflecting Shire’s increased confidence in the SHP606 asset) and $31.5 million relating to the acquisition and integration of ViroPharma. In the six months to June 30, 2014 the charge comprised $97.3 million relating to the acquisition and integration of ViroPharma and a net charge on the fair value of contingent consideration liabilities of $21.4 million (principally in relation to SARcode, as outlined above, offset by credits in relation to the acquisition of FerroKin BioSciences, Inc., reflecting the decision to place the Phase 2 clinical trial for SHP602 on clinical hold).

5. Accounts receivable, net

Accounts receivable at June 30, 2015 of $1,099.2 million (December 31, 2014: $1,035.1 million), are stated net of a provision for discounts and doubtful accounts of $53.5 million (December 31, 2014: $48.5 million).

Provision for discounts and doubtful accounts:

	2015			2014
	$’M			$’M
As at January 1,		48.5			47.9
Provision charged to operations		186.6			163.1
Provision utilization		(181.6	)		(165.7	)
As at June 30,		53.5			45.3

At June 30, 2015 accounts receivable included $69.8 million (December 31, 2014: $59.0 million) related to royalty income.

21 

6. Inventories

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

	June 30,		December 31,
	2015		2014
	$’M		$’M
Finished goods		136.8		136.0
Work-in-progress		383.1		305.3
Raw materials		112.9		103.5
		632.8		544.8

7. Results of discontinued operations

Following the divestment of the Company’s DERMAGRAFT business in January 2014, the operating results associated with the DERMAGRAFT business have been classified as discontinued operations in the consolidated statements of income for all periods presented. In the three and six months to June 30, 2015 the Company recorded a loss, net of tax of $4.5 million (2014: $5.2 million) and $7.0 million (2014: $27.9 million) respectively, primarily relating to costs associated with the divestment.

8. Prepaid expenses and other current assets

	June 30,		December 31,
	2015		2014
	$’M		$’M
Prepaid expenses		57.9		36.9
Income tax receivable		107.7		121.5
Value added taxes receivable		17.4		13.8
Other current assets		38.6		49.3
		221.6		221.5

9. Goodwill

	June 30,		December 31,
	2015		2014
	$’M		$’M
Goodwill arising on businesses acquired		4,173.2		2,474.9

In the six months to June 30, 2015 the Company completed the acquisitions of NPS Pharma and Meritage, which resulted in aggregate goodwill with a preliminary value of $1,720.5 million (see Note 2 for details).

22 

	2015			2014
	$’M			$’M
As at January 1,		2,474.9			624.6
Acquisitions		1,720.5			1,662.7
Foreign currency translation		(22.2	)		(3.9	)
As at June 30,		4,173.2			2,283.4

10. Other intangible assets, net

	June 30,			December 31,
	2015			2014
	$’M			$’M
Amortized intangible assets
Intellectual property rights acquired for currently marketed products		9,416.1			4,816.9
Other intangible assets1		375.0			30.0
		9,791.1			4,846.9
Unamortized intangible assets
Intellectual property rights acquired for IPR&D		1,182.2			1,550.0
		10,973.3			6,396.9
Less: Accumulated amortization		(1,662.9	)		(1,462.5	)
		9,310.4			4,934.4

^{1. Other intangible assets primarily comprises of royalty right assets acquired with NPS Pharma.}

The change in the net book value of other intangible assets for the six months to June 30, 2015 and 2014 is shown in the table below:

	Other intangible assets
	2015		2014
	$’M		$’M
As at January 1,	4,934.4		2,312.6
Acquisitions	5,167.8		3,321.4
Amortization charged	(219.6	)	(119.0	)
Impairment charges	(523.3	)	(188.0	)
Foreign currency translation	(48.9	)	(1.5	)
As at June 30,	9,310.4		5,325.5

In the six months to June 30, 2015 the Company acquired intangible assets totaling $5,168 million, relating to the fair value of intangible assets for currently marketed products and royalty right assets acquired with NPS Pharma of $4,993 million and IPR&D assets of $175 million acquired with Meritage (see Note 2 for further details).

23 

The Company reviews its intangible assets for impairment whenever events or circumstances suggest that their carrying value may not be recoverable. In the six months to June 30, 2015 the Company identified indicators of impairment in respect of its SHP625 (for the treatment of cholestatic liver disease), and SHP608 (for the treatment of DEB) IPR&D assets.

The indicators of impairment related to SHP625 in the second quarter of 2015 included the results of two Phase 2 studies, comprising a 13-week study of 20 paediatric patients with Alagille syndrome (“ALGS”), a 13 week, double blind, placebo-controlled trial in combination with ursodeoxycholic acid (“UDCA”) for patients with Primary Biliary Cirrhosis (“PBC”), and preliminary results froma 72 week open label Phase 2 study in Progressive Familial Intrahepatic Cholestasis (“PFIC”). Although both the ALGS and PBC trials indicated a reduction in bile serum acids in the SHP625 treated group, neither of these trials met their primary or secondary endpoints. The interim analysis in the PFIC trial was based on the first 12 subjects who completed 13 weeks of treatment per protocol. There was no statistically significant reduction in mean serum bile acid levels from baseline. A change from baseline analysis was planned as there is no placebo treatment arm in this study. However, changes from baseline for pruritus did reach statistical significance.

Following these trial results, the Company reviewed the recoverability of its SHP625 IPR&D asset in the second quarter of 2015 and recorded an impairment charge of $346.6 million (within R&D expenses in the consolidated statement of income) to record the SHP625 IPR&D asset to its revised fair value of $120.4 million. This fair value was based on the revised discounted cash flow forecasts associated with SHP625, which included a reduced probability of achieving regulatory approval.

For SHP608, preclinical toxicity findings in the second quarter of 2015 have led to a significant reduction in the probability of achieving regulatory approval of this asset. As a result, the Company recorded an impairment charge of $176.7 million within R&D expenses in the consolidated statement of income to fully write off the SHP608 IPR&D asset.

The fair values of the related contingent consideration liabilities arising from the Lumena and Lotus Tissue Repair acquisitions (through which Shire acquired SHP625 and SHP608 respectively) have also been reduced, resulting in a credit of $280.0 million being recorded in Integration and acquisition costs.

In the six months to June 30, 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) and SHP613 (for the treatment of improvement in patency of arteriovenous access in hemodialysis patients) IPR&D assets. The Company therefore reviewed the recoverability of its SHP602 and SHP613 IPR&D assets and recorded an impairment charge of $166.0 million and $22.0 million, respectively, within R&D expenses in the consolidated statement of income to record the IPR&D assets to their revised fair value.

Management estimates that the annual amortization charge in respect of intangible assets held at June 30, 2015 will be approximately $476 million for each of the five years to June 30, 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.

11. Accounts payable and accrued expenses

	June 30,		December 31,
	2015		2014
	$’M		$’M
Trade accounts payable and accrued purchases		286.8		247.7
Accrued rebates – Medicaid		606.5		563.9
Accrued rebates – Managed care		310.7		318.2
Sales return reserve		137.5		131.7
Accrued bonuses		121.0		150.7
Accrued employee compensation and benefits payable		150.3		109.1
R&D accruals		66.5		88.3
Other accrued expenses		260.4		299.8
		1,939.7		1,909.4

24 

12. Other current liabilities

	June 30,		December 31,
	2015		2014
	$’M		$’M
Income taxes payable		60.6		16.2
Value added taxes		19.5		16.6
Contingent consideration payable		19.5		194.5
Other current liabilities		45.9		35.2
		145.5		262.5

13. Borrowings

	June 30,		December 31,
	2015		2014
	$’M		$’M
Short term borrowings:
Borrowings under the 2015 Facility Agreement		850.0		-
Borrowings under the 2013 Facilities Agreement		400.0		850.0
Borrowings under the RCF		920.0		-
Borrowings under short term Credit lines		50.0		-
Secured non-recourse debts		9.9		-
		2,229.9		850.0
Long term borrowings:
Secured non-recourse debts		73.9		-
		2,303.8		850.0

Term Loan Agreements

2015 Facility Agreement

On January 11, 2015, Shire entered into an $850 million Facility Agreement with, among others, CitiGroup Global Markets Limited (acting as mandated lead arranger and bookrunner) (the “2015 Facility Agreement”).  At June 30, 2015 the 2015 Facility Agreement, which matures on January 10, 2016, was fully utilized. The maturity date may be extended twice, at Shire’s option, by six months on each occasion.

The 2015 Facility Agreement has been used to partially finance the purchase price payable in respect of Shire’s acquisition of NPS Pharma (including certain related costs). See the Company’s 2014 Annual Report on Form 10-K for details of the 2015 Facility Agreement. 

2013 Facilities Agreement

On November 11, 2013, Shire entered into a $2,600 million facilities agreement with, among others, Morgan Stanley Bank International Limited (acting as mandated lead arranger and bookrunner) (the “2013 Facilities Agreement”).  The 2013 Facilities Agreement comprised two credit facilities: (i) a $1,750 million term loan facility and (ii) an $850 million term loan facility.  

On December 13, 2013 and at various points thereafter, the Company cancelled parts of the $2,600 million term loan facility. At June 30, 2015 the 2013 Facilities Agreement was comprised of a $400 million term loan facility which matures on November 11, 2015 and was fully utilized.

The $400 million remaining borrowing from the 2013 Facilities Agreement was used to partially finance the purchase price payable in respect of Shire’s acquisition of ViroPharma (including certain related costs) during the year ended December 31, 2014. See the Company’s 2014 Annual Report on Form 10-K for details of the 2013 Facilities Agreement.

25 

Revolving Credit Facility (“RCF”)

On December 12, 2014, Shire entered into a $2,100 million RCF with a number of financial institutions. See the Company’s 2014 Annual Report on Form 10-K for details. At June 30, 2015 the Company has utilized $920 million of the RCF to partially finance the purchase price payable in respect of Shire’s acquisition of NPS Pharma (including certain related costs).

The RCF, which terminates on December 12, 2019, may be applied towards financing the general corporate purposes of Shire. The RCF incorporates a $250 million US dollar and euro swingline facility operating as a sub-limit thereof.

Secured Non-recourse Debts

Prior to the acquisition by Shire, NPS Pharma had:

· partially monetized rights to receive future royalty payments from Amgen’s sales of SENSIPAR and MIMPARA through the issuance of $145 million of non-recourse debt that is both serviced and secured by SENSIPAR and MIMPARA royalty revenue;

· sold to DRI Capital Inc. (“DRI”) certain rights to receive up to $96 million of future royalty payments arising from Kyowa Hakko Kirin’s sales of REGPARA and granted DRI a security interest in the license agreement with Kyowa Hakko Kirin, certain patents and other intellectual property related to REGPARA which DRI would be entitled to enforce in the event of default by NPS Pharma; and

· partially monetized PTH-184 (now marketed as NATPARA) through an agreement with an affiliate of DRI pursuant to which NPS Pharma, its licensees and its predecessors in interest, are obligated to pay up to $125 million royalties on sales of PTH-184. Additionally, NPS Pharma granted DRI a security interest in certain patents and other intellectual property related to PTH 1-84 which DRI would be entitled to enforce in the event of default by NPS Pharma.

Following the acquisition of NPS Pharma the Company has assumed these secured non-recourse debt obligations.

In May 2015 the Company notified Amgen that it intended to repay in full the remaining non-recourse debt. The repayment was effected on May 15, 2015 by Amgen withholding certain royalties that were due to the Company from SENSIPAR and MIMPARA sales in the first quarter of 2015.

As at June 30, 2015 $9.9 million has been included within Short-term borrowings, and $73.9 million has been included within Long-term borrowings in respect of the remaining obligations to DRI.

Short term uncommitted lines of credit (“Credit lines”)

Shire has access to various Credit lines from a number of banks which provide flexibility to short term cash management procedures. These Credit lines can be withdrawn by the banks at any time. The Credit lines are not relied upon for core liquidity. As at June 30, 2015 $50 million was borrowed under these Credit lines.

14. Other non-current liabilities

	June 30,		December 31,
	2015		2014
	$’M		$’M
Income taxes payable		178.9		199.2
Contingent consideration payable		445.2		435.4
Other non-current liabilities		94.6		102.1
		718.7		736.7

26 

15. Commitments and contingencies

(a) Leases

Future minimum lease payments under operating leases at June 30, 2015 are presented below:

	Operating
	leases
	$’M
2015		25.0
2016		42.1
2017		32.6
2018		25.0
2019		20.8
2020		20.0
Thereafter		125.9
		291.4

The Company leases land, facilities, motor vehicles and certain equipment under operating leases expiring through 2032. Lease and rental expense amounted to $24.3 million and $20.8 million for the six months to June 30, 2015 and 2014 respectively, which is predominately included in SG&A expenses in the Company’s consolidated income statement.

(b) Letters of credit and guarantees

At June 30, 2015 the Company had irrevocable standby letters of credit and guarantees with various banks and insurance companiestotaling $48.0 million (being the contractual amounts), 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.

(c) Collaborative and other licensing arrangements

Details of significant updates in collaborative and other licensing arrangements are included below:

Out-licensing arrangements

Shire has entered into various collaborative and out-licensing 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 some 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. Under the terms of these collaborative and out-licensing arrangements, the Company may receive development milestone payments up to an aggregate amount of $39 million and sales milestones up to an aggregate amount of $46 million. The receipt of these substantive milestones is uncertain and contingent on the achievement of certain development milestones or the achievement of a specified level of annual net sales by the licensee. In the six months to June 30, 2015 Shire received cash in respect of up-front and milestone payments totaling $12.6 million (2014: $1.0 million). In the six months to June 30, 2015 Shire recognized milestone income of $1.0 million (2014: $2.0 million) in other revenues and $23.4 million (2014: $26.4 million) in product sales for shipment of product to the relevant licensee.

(d) Commitments

(i) Clinical testing

At June 30, 2015 the Company had committed to pay approximately $430 million (December 31, 2014: $382 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.

27 

(ii) Contract manufacturing

At June 30, 2015 the Company had committed to pay approximately $310 million (December 31, 2014: $384 million) in respect of contract manufacturing. The Company expects to pay $107 million of these commitments in 2015.

(iii) Other purchasing commitments

At June 30, 2015 the Company had committed to pay approximately $275 million (December 31, 2014: $265 million) for future purchases of goods and services, predominantly relating to active pharmaceutical ingredients sourcing. The Company expects to pay $266 million of these commitments in 2015.

(iv) Investment commitments

At June 30, 2015 the Company had outstanding commitments to subscribe for interests in companies and partnerships for amounts totaling $58 million (December 31, 2014: $67 million) which may all be payable in 2015, depending on the timing of capital calls. The investment commitments include additional funding to certain VIEs of which Shire is not the primary beneficiary.

(v) Capital commitments

At June 30, 2015 the Company had committed to spend $9 million (December 31, 2014: $3 million) on capital projects.

(e) Legal and other proceedings

The Company expenses legal costs as they are incurred.

The Company recognizes loss contingency provisions for probable losses when management is able to reasonably estimate the loss. When the estimated loss lies within a range, the Company records a loss contingency provision based on its best estimate of the probable loss. If no particular amount within that range is a better estimate than any other amount, the minimum amount is recorded.  Estimates of losses may be developed substantially before the ultimate loss is known, and are therefore refined each accounting period as additional information becomes known. In instances where the Company is unable to develop a reasonable estimate of loss, no loss contingency provision is recorded at that time. As information becomes known a loss contingency provision is recorded when a reasonable estimate can be made. The estimates are reviewed quarterly and the estimates are changed when expectations are revised. An outcome that deviates from the Company’s estimate may result in an additional expense or release in a future accounting period. At June 30, 2015, provisions for litigation losses, insurance claims and other disputes totaled $8.5 million (December 31, 2014: $16.9 million).

The Company’s principal pending legal and other proceedings are disclosed below. The outcomes of these proceedings are not always predictable and can be affected by various factors. For those legal and other proceedings for which it is considered at least reasonably possible that a loss has been incurred, the Company discloses the possible loss or range of possible loss in excess of the recorded loss contingency provision, if any, where such excess is both material and estimable.

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. (“Watson”); Roxane Laboratories, Inc. ("Roxane"); Mylan Pharmaceuticals, Inc. (“Mylan”); and Actavis Elizabeth LLC and Actavis Inc. (collectively, "Actavis"). Since filing suit against these ANDA filers, along with API suppliers Johnson Matthey Inc. and Johnson Matthey Pharmaceuticals Materials (collectively “Johnson Matthey”), Shire has been engaged in a consolidated patent infringement litigation in the US District Court for the District of New Jersey against the aforementioned parties (except Watson, who withdrew their ANDA).

On June 23, 2014, the US District Court for the District of New Jersey granted Shire’s summary judgment motion holding that 18 claims of the patents-in-suit were both infringed and valid. The ruling prevents all of the ANDA filers (Sandoz, Roxane, Amneal, Actavis and Mylan) from launching generic versions of VYVANSE until the earlier of either a successful appeal to the US Court of Appeals for the Federal Circuit (“CAFC”), or the expiration of these patents in 2023. To appeal successfully, the ANDA-defendants must overturn the court’s rulings for each of these 18 patent claims. All of the defendants have appealed the court’s summary judgment ruling to the CAFC. Oral argument occurred on May 6, 2015 and a decision is pending.

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LIALDA

In May 2010, Shire was notified that Zydus Pharmaceuticals USA, Inc. (“Zydus”) had 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. A Markman hearing took place on January 29, 2015 and a Markman ruling was issued on July 28, 2015. The previously scheduled trial date has been vacated; at present, there is no trial date.

In February 2012, Shire was notified that Osmotica Pharmaceutical Corporation ("Osmotica") had 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 Northern District of Georgia against Osmotica. A Markman hearing took place on August 22, 2013 and a Markman ruling was issued on September 25, 2014. The Court issued an Order on February 27, 2015 in which all dates in the scheduling order have been stayed.

In March 2012, Shire was notified that Watson Laboratories Inc.-Florida had 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 Southern District of Florida against Watson Laboratories Inc.-Florida and Watson Pharmaceuticals, Inc. Watson Pharma, Inc. and Watson Laboratories, Inc. were subsequently added as defendants. A trial took place in April, 2013 and on May 9, 2013 the trial court issued a decision finding that the proposed generic product infringes the patent-in-suit and that the patent is not invalid. Watson appealed the trial court’s ruling to the CAFC and a hearing took place on December 2, 2013. The ruling of the CAFC was issued on March 28, 2014 overruling the trial court on the interpretation of two claim terms and remanding the case for further proceedings. Shire petitioned the Supreme Court for a writ of certiori, which was granted on January 26, 2015. The Supreme Court also vacated the CAFC decision and remanded the case to the CAFC for further consideration in light of the Supreme Court’s recent decision in Teva v Sandoz. On June 3, 2015, the CAFC reaffirmed their previous decision to reverse the district court’s claims construction. We expect the CAFC to issue a mandate in the near future remanding the case to the US District Court for the Southern District of Florida.

In April 2012, Shire was notified that Mylan had 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 Middle District of Florida against Mylan. A Markman hearing took place on December 22, 2014. A Markman ruling was issued on March 23, 2015. A trial is scheduled during the court’s trial term beginning on September 1, 2015.

In March 2015, Shire was notified that Amneal had 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 New Jersey against Amneal, Amneal Pharmaceuticals of New York, LLC and Amneal Pharmaceuticals Co. India Pvt. Ltd. No trial date has been set.

Investigation related to DERMAGRAFT

The Department of Justice, including the US Attorney’s Office for the Middle District of Florida, Tampa Division and the US Attorney’s Office for Washington, DC, is conducting civil and criminal investigations into the sales and marketing practices of Advanced BioHealing Inc. (“ABH”) relating to DERMAGRAFT.

Following the disposal of the DERMAGRAFT business in January 2014, Shire has retained certain legacy liabilities including any liability that may arise from this investigation. Shire is cooperating fully with these investigations. Shire is not in a position at this time to predict the scope, duration or outcome of these investigations.

Civil Investigative Demand relating to VANCOCIN

On April 6, 2012, ViroPharma received a notification that the United States Federal Trade Commission (“FTC”) is conducting an investigation into whether ViroPharma had engaged in unfair methods of competition with respect to VANCOCIN. On August 3, 2012, and September 8, 2014, ViroPharma and Shire respectively received Civil Investigative Demands from the FTC requesting additional information related to this matter. Shire intends to continue to cooperate fully with the FTC investigation. At this time, Shire is unable to predict the outcome or duration of this investigation.

Lawsuit related to supply of ELAPRASE to certain patients in Brazil

On September 24, 2014 Shire’s Brazilian affiliate, Shire Farmaceutica Brasil Ltda, was served with a lawsuit brought by the State of Sao Paulo and in which the Brazilian Public Attorney’s office has intervened alleging that Shire is obligated to provide certain medical care including ELAPRASE for an indefinite period at no cost to patients who participated in ELAPRASE clinical trials in Brazil, and seeking recoupment to the Brazilian government for amounts paid for these patients to date, and moral damages associated with these claims.  Shire intends to defend itself against these allegations but is not able to predict the outcome or duration of this case.

29 

16. Accumulated Other Comprehensive loss

The changes in accumulated other comprehensive loss, net of their related tax effects, in the six months to June 30, 2015 and 2014 are included below:

As at June 30, 2015		Foreign currency translation adjustment	Unrealized holding loss on available-for-sale securities	Accumulated other comprehensive loss
		$M	$M	$M
As at January 1, 2015		(25.7)	(5.8)	(31.5)
Current period change:
Net current period other comprehensive (loss)/income		(83.3)	3.3	(80.0)
As at June 30, 2015		(109.0)	(2.5)	(111.5)
As at June 30, 2014		Foreign currency translation adjustment	Unrealized holding gain/(loss) on available-for-sale securities	Accumulated other comprehensive income
		$M	$M	$M
As at January 1, 2014		110.4	(0.2)	110.2
Current period change:
	Other comprehensive income before reclassification	10.2	6.9	17.1
	Gain transferred to the income statement (within Other income, net) on disposal of available-for-sale securities	-	(3.2)	(3.2)
Net current period other comprehensive income		10.2	3.7	13.9
As at June 30, 2014		120.6	3.5	124.1

17. Financial 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 principally exposed to interest rate risk on borrowings under its $2,100 million RCF, its $400 million 2013 Facilities Agreement, its $850 million 2015 Facility Agreement and its Credit lines, on which interest is set at floating rates, to the extent any of these facilities are utilized. At June 30, 2015 the Company had fully utilized the 2013 Facilities Agreement, fully utilized the 2015 Facility Agreement, utilized $920 million of the RCF and utilized $50 million of its Credit lines. Shire’s exposure under its 2013 Facilities Agreement, 2015 Facility Agreement, RCF and Credit lines is to US dollar interest rates.

The Company has evaluated the interest rate risk on the Credit lines, the RCF, the 2013 Facilities Agreement and the 2015 Facility Agreement and considers the risks associated with floating interest rates on borrowings under its facilities as appropriate. A hypothetical one percentage point increase or decrease in the interest rates applicable to drawings under the Credit lines, the 2013 Facilities Agreement, 2015 Facility Agreement and RCF at June 30, 2015 would increase

30 

interest expense by approximately $23 million per annum or would decrease the interest expense by approximately $5 million per annum.

The Company is also exposed to interest rate risk on its restricted cash, cash and cash equivalents and on foreign exchange contracts on which interest is set at floating rates. This exposure is primarily limited to US dollar, Pounds sterling and Euro interest rates. As the Company maintains all of its cash, liquid investments and foreign exchange contracts on a short term basis for liquidity purposes, this risk is not actively managed. In the six months to June 30, 2015 the average interest rate received on cash and liquid investments was less than 1% per annum. The largest proportion of these cash and liquid investments was in US dollar term deposits with banks.

No derivative instruments were entered into during the six months to June 30, 2015 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, derivative contracts and trade accounts receivable (from product sales and from third parties from which the Company receives royalties). 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 and 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 bank term deposit arrangements and derivative instruments. The Company limits this exposure through a system of internal credit limits which vary according to ratings assigned to the counterparties by 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 these derivatives contracts are major international financial institutions.

The Company’s revenues from product sales in the US 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, 2014 there were three customers in the US that accounted for 47% 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 acceptable. The Company has taken positive steps to manage any credit risk associated with these transactions and operates clearly defined credit evaluation procedures. However, an inability of one or more of these wholesalers to honor their debts to the Company could have an adverse effect on the Company’s financial condition and results of operations.

A substantial portion of the Company’s accounts receivable in countries outside of the United States is derived from product sales to government-owned or government-supported healthcare providers. The Company’s recovery of these accounts receivable is therefore dependent upon the financial stability and creditworthiness of the relevant governments. In recent years global and national economic conditions have negatively affected the growth, creditworthiness and general economic condition of certain markets in which the Company operates. As a result, in some countries outside of the US, specifically, Argentina, Greece, Italy, Portugal and Spain (collectively the “Relevant Countries”) the Company is experiencing delays in the remittance of receivables due from government-owned or government-supported healthcare providers. The Company continued to receive remittances in relation to government-owned or government-supported healthcare providers in the Relevant Countries in the six months to June 30, 2015, including receipts of $58.8 million and $39.6 million in respect of Spanish and Italian receivables, respectively. The Company’s exposure to Greece, both in terms of gross accounts receivable and annual revenues, is not material.

To date the Company has not incurred material losses on accounts receivable in the Relevant Countries, and continues to consider that such accounts receivable are recoverable. The Company will continue to evaluate all its accounts receivable for potential collection risks and has made provision for amounts where collection is considered to be doubtful. If the financial condition of the Relevant Countries or other Eurozone countries suffer significant deterioration, such that their ability to make payments becomes uncertain, or if one or more Eurozone member countries withdraws from the Euro, additional allowances for doubtful accounts may be required, and losses may be incurred, in future periods. Any such loss could have an adverse effect on the Company’s financial condition and results of operations.

Foreign exchange risk

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

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, Swiss Franc, Canadian dollar and the Euro. It is the Company’s policy that these exposures are minimized to the extent practicable by denominating transactions in the subsidiary’s functional currency.

31 

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 inter-company financing. The foreign exchange contracts have not been designated as hedging instruments. Cash flows from derivative instruments are presented within net cash provided by operating activities in the consolidated cash flow statement, unless the derivative instruments are economically hedging specific investing or financing activities.

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

At June 30, 2015 the Company had 31 swap and forward foreign exchange contracts outstanding to manage currency risk. The swap and forward contracts mature within 90 days. The Company did not have credit risk related contingent features or collateral linked to the derivatives. The Company has master netting agreements with a number of counterparties to these foreign exchange contracts and on the occurrence of specified events, the Company has the ability to terminate contracts and settle them with a net payment by one party to the other. The Company has elected to present derivative assets and derivative liabilities on a gross basis in the consolidated balance sheet. As at June 30, 2015 the potential effect of rights of set-off associated with the foreign exchange contracts would be an offset to both assets and liabilities of $0.2 million, resulting in net derivative assets and derivative liabilities of $7.7 million and $0.1 million, respectively. Further details are included below:

		Fair value	Fair value
		June 30,	December 31,
		2015	2014
		$’M	$’M
Assets	Prepaid expenses and other current assets	7.9	12.6
Liabilities	Other current liabilities	0.3	7.8

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

	Location of net gains recognized in income	Amount of net gains recognized in income
In the six months to		June 30,	June 30,
		2015	2014
		$’M	$’M
Foreign exchange contracts	Other income, net	21.3	13.9

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

32 

18. Fair value measurement

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

As at June 30, 2015 and December 31, 2014 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 value and Fair value
			Total	Level 1	Level 2	Level 3
At June 30, 2015			$'M	$'M	$'M	$'M
Financial assets:
Available-for-sale securities(1)			16.3	16.3	-	-
Contingent consideration receivable (2)			16.7	-	-	16.7
Foreign exchange contracts			7.9	-	7.9	-
Financial liabilities:
Foreign exchange contracts			0.3	-	0.3	-
Contingent consideration payable(3)			464.7	-	-	464.7
			Total	Level 1	Level 2	Level 3
At December 31, 2014			$'M	$'M	$'M	$'M
Financial assets:
Available-for-sale securities(1)			13.1	13.1	-	-
Contingent consideration receivable (2)			15.9	-	-	15.9
Foreign exchange contracts			12.6	-	12.6	-
Financial liabilities:
Foreign exchange contracts			7.8	-	7.8	-
Contingent consideration payable(3)	1		629.9	-	-	629.9

(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.

(3) Contingent consideration payable is included within Other current liabilities and Other non-current liabilities 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 probability weighted discounted cash flow method).

· 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.

· Contingent consideration payable – the fair value of the contingent consideration payable has been estimated using the income approach (using a probability weighted discounted cash flow method).

33 

Assets and Liabilities 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 and payables, which are measured at fair value on a recurring basis using significant unobservable inputs (Level 3), are as follows:

Contingent consideration receivable  

	2015			2014
	$'M			$'M
Balance at January 1,		15.9			36.1
Initial recognition of contingent consideration receivable		-			33.6
Gain/(loss) recognized in the income statement (within Gain on sale of product rights) due to change in fair value during the period		8.6			(3.3	)
Reclassification of amounts to Other receivables within Other current assets		(9.1	)		(8.7	)
Amounts recorded to other comprehensive income (within foreign currency translation adjustments)		1.3			(0.2	)
Balance at June 30,		16.7			57.5

Contingent consideration payable  

	2015			2014
	$'M			$'M
Balance at January 1,		629.9			405.9
Initial recognition of contingent consideration payable		92.1			174.0
Change in fair value during the period with the corresponding adjustment recognized (within Integration and acquisition costs) in the income statement		(255.7	)		21.4
Reclassification of amounts to Other current liabilities		(4.1	)		(10.9	)
Change in fair value during the period with corresponding adjustment to the associated intangible asset		(0.2	)		1.4
Amounts recorded to other comprehensive income (within foreign currency translation adjustments)		2.7			-
Balance at June 30,		464.7			591.8

Of the $464.7 million of contingent consideration payable as at June 30, 2015 $19.5 million is recorded within other current liabilities and $445.2 million is recorded within other non-current liabilities in the Company’s balance sheet.

34 

Quantitative Information about Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3)

Quantitative information about the Company’s recurring Level 3 fair value measurements is included below:

Financial assets:	Fair Value at the Measurement Date
At June 30, 2015	Fair value	Valuation Technique	Significant unobservable Inputs	Range
	$'M
	____________	___________	___________	___________
Contingent consideration receivable ("CCR")	16.7	Income approach (probability weighted discounted cash flow)	• Probability weightings applied to different sales scenarios	• 10 to 70%
			• Future forecast consideration receivable based on contractual terms with purchaser	• $28.5 million to $36 million
			• Assumed market participant discount rate	• 8.7%
	____________	____________	____________	____________
Financial liabilities:	Fair Value at the Measurement Date
At June 30, 2015	Fair value	Valuation Technique	Significant unobservable Inputs	Range
	$'M
	____________	___________	___________	___________
Contingent consideration payable	464.7	Income approach (probability weighted discounted cash flow)	• Cumulative probability of milestones being achieved	• 4 to 85%
			• Assumed market participant discount rate	• 0.9 to 10.5%
			• Periods in which milestones are expected to be achieved	• 2015 to 2030
			• Forecast quarterly royalties payable on net sales of relevant products	• $0.2 to $7.6 million
	____________	____________	____________	____________

The Company re-measures the CCR (relating to contingent consideration due to the Company following divestment of certain of the Company’s products) at fair value at each balance sheet date, with the fair value measurement based on forecast cash flows, over a number of scenarios which vary depending on the expected performance outcome of the products following divestment. The forecast cash flows under each of these differing outcomes have been included in probability weighted estimates used by the Company in determining the fair value of the CCR.

35 

Contingent consideration payable represents future milestones the Company may be required to pay in conjunction with various business combinations and future royalties payable as a result of certain business combinations and licenses. The amount ultimately payable by Shire in relation to business combinations is dependent upon the achievement of specified future milestones, such as the achievement of certain future development, regulatory and sales milestones. The Company assesses the probability, and estimated timing, of these milestones being achieved and re-measures the related contingent consideration to fair value each balance sheet date. The amount of contingent consideration which may ultimately be payable by Shire in relation to future royalties is dependent upon future net sales of the relevant products over the life of the royalty term. The Company assesses the present value of forecast future net sales of the relevant products and re-measures the related contingent consideration to fair value each balance sheet date.

The fair value of the Company’s contingent consideration receivable and payable could significantly increase or decrease due to changes in certain assumptions which underpin the fair value measurements. Each set of assumptions and milestones is specific to the individual contingent consideration receivable or payable. The assumptions include, among other things, the probability and expected timing of certain milestones being achieved, the forecast future net sales of the relevant products and related future royalties payable, the probability weightings applied to different sales scenarios of the Company’s divested products and forecast future royalties receivable under scenarios developed by the Company, and the discount rates used to determine the present value of contingent future cash flows. The Company regularly reviews these assumptions, and makes adjustments to the fair value measurements as required by facts and circumstances.

Assets Measured at Fair Value on a Non-Recurring Basis using Significant Unobservable Inputs (Level 3)

In the six months to June 30, 2015 the Company reviewed its SHP625 and SHP608 IPR&D intangible assets for impairment and recognized an impairment charge of $523.3 million, recorded within R&D in the consolidated income statement, to write-down these IPR&D assets to their fair value. The fair value of these IPR&D assets was determined using the income approach, which used significant unobservable (Level 3) inputs. These unobservable inputs included, among other things, the probabilities of these IPR&D assets receiving regulatory approval, the timeframe for such approval, risk-adjusted forecast future cash flows to be generated by these IPR&D assets and the determination of an appropriate discount rate to be applied in calculating the present value of forecast future cash flows. The fair value of these IPR&D assets, determined at the time of the impairment review, was $120.4 million.

	Fair Value at the Measurement Date
At June 30, 2015	Fair value	Valuation Technique	Significant unobservable Inputs	Range
	$'M
	____________	___________	___________	___________
IPR&D intangible assets (SHP625 and SHP608)	$120.4	Income approach (discounted cash flow)	• Probability of regulatory approval being obtained	• 5 to 33%
			• Expected commercial launch date	• 2018 to 2021
			• Assumed market participant discount rate	• 9.7 to 10.7%
	____________	____________	____________	____________

The carrying amounts of other financial assets and liabilities materially approximate to their fair value either because of the short-term maturity of these amounts or because there have been no significant changes since the asset or liability was last re-measured to fair value on a non-recurring basis.

36 

19. 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			6 months to			6 months to
	June 30,			June 30,			June 30,			June 30,
	2015			2014			2015			2014
	$’M			$’M			$’M			$’M
Income from continuing operations, net of taxes		164.1			528.3			577.0			781.4
Loss from discontinued operations1		(4.5	)		(5.2	)		(7.0	)		(27.9	)
Numerator for basic and diluted earnings per share		159.6			523.1			570.0			753.5
Weighted average number of shares:
		Millions			Millions			Millions			Millions
Basic 1		590.5			586.4			589.8			585.3
Effect of dilutive shares:
Share-based awards to employees 2		2.7			3.9			3.2			5.0
Diluted		593.2			590.3			593.0			590.3

^{1. Excludes shares purchased by the EBT and presented by Shire as treasury stock.}

^{2. Calculated using the treasury stock method.}

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

	3 months to	3 months to	6 months to	6 months to
	June 30,	June 30,	June 30,	June 30,
	2015	2014	2015	2014
	No. of shares	No. of shares	No. of shares	No. of shares
	Millions	Millions	Millions	Millions
Share-based awards to employees1	1.0	0.3	3.2	1.2

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) the required performance conditions were not satisfied as at the balance sheet date.

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20. Segmental reporting

Shire comprises a single operating and reportable segment engaged in the research, development, licensing, manufacturing, marketing, distribution and sale of innovative specialist medicines to meet significant unmet patient needs.

This segment is supported by several key functions: a Pipeline group, consisting of R&D and Corporate Development, which prioritizes its activities towards late-stage development programs across a variety of therapeutic areas, while focusing its pre-clinical development activities primarily in Rare Diseases; a Technical Operations group responsible for the Company’s global supply chain; and an In-line marketed products group which focuses on commercialized products. The In-Line marketed products group has commercial units that focus exclusively on the commercial execution of its marketed products including in the areas of Rare Diseases, Neuroscience, and Gastrointestinal (“GI”) and Internal Medicine, and to support the development of our pipeline candidates, in Ophthalmics. This ensures that the Company provides innovative treatments, and services the needs of its customers and patients, as efficiently as possible. The business is also supported by a simplified, centralized corporate function group. None of these functional groups meets all of the criteria to be an operating segment.

This single operating and reportable segment is consistent with the financial information regularly reviewed by the Executive Committee (which is Shire’s chief operating decision maker) for the purposes of evaluating performance, allocating resources, and planning and forecasting future periods.

In the periods set out below, revenues by major product were as follows:

6 months to	June 30,		June 30,
	2015		2014
	$’M		$’M
VYVANSE		841.6		710.7
LIALDA/MEZAVANT		306.4		272.5
CINRYZE		286.9		215.5
ELAPRASE		271.5		280.7
REPLAGAL		214.4		244.8
FIRAZYR		196.6		163.9
ADDERALL XR		181.7		184.9
VPRIV		171.1		176.6
PENTASA		145.0		135.5
FOSRENOL		89.2		88.1
GATTEX/REVESTIVE		52.2		-
XAGRID		48.1		55.0
INTUNIV		26.9		182.3
NATPARA		5.9		-
Other product sales		61.9		67.2
Total product sales		2,899.4		2,777.7

21. Taxation

The effective rate of tax for the three months to June 30, 2015 was -37% (2014: -51%) and for the six months to June 30, 2015 was 2% (2014: -19%).

The effective rate of tax is negative for the three months to June 30, 2015 and low for the six months to June 30, 2015 primarily due to the reduction in deferred tax liabilities in relation to the impairment of IPR&D intangible assets, the re-measurement of uncertain tax positions relating to ongoing tax audits and the release of certain valuation allowances all recognized during the second quarter.

The effective rate of tax in the three and six months to June 30, 2014 was negative primarily due to the recognition of a net tax credit in relation to the settlement of tax positions with the Canadian revenue authorities in the second quarter of 2014.

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22. Related parties

Shire considers that ArmaGen, Inc. (“ArmaGen”) is a related party by virtue of a combination of Shire’s equity stake in ArmaGen and the worldwide licensing and collaboration agreement between the two parties to develop and commercialize AGT-182. In the six months to June 30, 2015 Shire paid $2.5 million in cash to ArmaGen in exchange for an additional equity stake in ArmaGen, following which Shire holds approximately 21% of ArmaGen’s issued equity. In addition, Shire recorded R&D costs arising from the licensing and collaboration arrangement of $5.9 million in the first half of 2015, of which $5.4 million was accrued and unpaid as at June 30, 2015.

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

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

Significant events in the three months to June 30, 2015 and recent developments

Products

INTUNIV for the treatment of attention deficit hyperactivity disorder (“ADHD”) in the EU

· The Committee for Medicinal Products for Human Use (“CHMP”) of the European Medicines Agency (“EMA”) has adopted a positive opinion at its July 2015 meeting recommending marketing authorization approval of INTUNIV (guanfacine) extended release drug product, a non-stimulant indicated as part of a comprehensive treatment programme for ADHD in children and adolescents 6 to 17 years old for whom stimulants are not suitable, not tolerated or have been shown to be ineffective.

The CHMP positive opinion will be reviewed by the European Commission (“EC”) with the expectation that the EC will then grant a centralized marketing authorization with unified labeling that is valid in the 28 countries that are members of the European Union, as well as European Economic Area members, Iceland, Liechtenstein and Norway.

RESOLOR – for the Symptomatic Treatment of Chronic Constipation in Men

· On May 27, 2015, Shire received the EC decision amending the terms of the RESOLOR Marketing Authorisation to the use of RESOLOR in adults for the symptomatic treatment of chronic constipation for whom laxatives fail to provide adequate relief. In Europe, RESOLOR was initially approved for use in women only, so the new variation extends the use of this treatment to male patients.

VYVANSE – for the treatment of moderate to severe Binge Eating Disorder (“BED”) in adults

· Topline results from a 39-week, long-term maintenance of efficacy study (SPD489-346) in adults with moderate to severe BED showed VYVANSE superior to placebo (p<.001) on the primary efficacy endpoint of time to relapse of binge eating symptoms. At the conclusion of the trial, patients continuing on VYVANSE had a lower proportion of relapse of 5/136 (3.7%) as compared to patients continuing on placebo 42/131 (32.1%).

· The results of a separate, 12-month open-label safety extension study (SPD489-345) were generally consistent with the safety profile currently outlined in the United States Prescribing information.

· Based on the results of these studies, the Company plans to submit a supplemental New Drug Application by year end to the US Food and Drug Administration (“FDA”). The FDA will evaluate adding this data to the current labeling for VYVANSE.

Pipeline

Shire continued to advance its broad and deep pipeline over the course of the second quarter.

SHP606 (lifitegrast) for the treatment of Dry Eye Disease (“DED”)

· Shire has fully enrolled a Phase 3 safety and efficacy study (OPUS-3) in support of potential US and potential international regulatory submissions. OPUS-3 is a multicenter, randomized, double-masked, placebo-controlled, parallel arm study with a 14 day open-label placebo screening run-in period followed by a 12 week randomized, masked treatment period with a primary efficacy endpoint in subjective patient reported symptoms of DED, as measured by the eye dryness score.

SHP465 – for the treatment of adults with ADHD

· On April 7, 2015 Shire announced that it had reached an agreement with the FDA on a clear regulatory path for SHP465. Shire has begun dosing patients in a Phase 3 study designed to evaluate the efficacy of SHP465 administered as a daily morning dose compared to a placebo in the treatment of children and adolescents (6-17 years of age inclusive) diagnosed with ADHD.

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SHP620 (maribavir) for the treatment of cytomegalovirus (“CMV”) infection in transplant patients

· In late June 2015 Shire conducted an end of Phase 2 meeting with the FDA and received further clarity on the path forward.  Based on this feedback, Shire is considering progressing the program into Phase 3 in 2016.

SHP631 – for the treatment of both the central nervous system (“CNS”) and somatic manifestations in patients with Hunter syndrome (“MPS II”)

· In the second quarter of 2015, a Phase 1 trial of SHP631 (also known as AGT-182) was initiated. SHP631 is an investigational enzyme replacement therapy for the potential treatment of both the CNS and somatic manifestations in patients with MPS II.

SHP625 – for the treatment of cholestatic liver disease

· In late May 2015, Shire received results from the CLARITY study, a 13 week, double-blind, placebo-controlled Phase 2 study of SHP625 (formerly LUM001) in combination with ursodeoxycholic acid (“UDCA”) in Primary Biliary Cirrhosis (“PBC”). SHP625 did not meet the primary endpoint as measured by change in pruritus or the secondary endpoint in level of liver disease as measured by alkaline phosphatase (“ALP”). However, there was a significant reduction in mean serum bile acid levels versus placebo.

· In June 2015, Shire received preliminary results from an interim analysis of the INDIGO study, a 72 week open label Phase 2 study in PFIC. The interim analysis was based on the first 12 subjects who completed 13 weeks of treatment per protocol. SHP625 was well tolerated but there was no statistically significant reduction in mean serum bile levels from baseline. A change from baseline analysis was planned as there is no placebo treatment arm in this study. The changes from baseline for pruritus did reach statistical significance. 5 of the 20 patients who received the drug experienced sustained decreases from baseline in serum bile acids ranging from 86 to 99% and also experienced marked reductions in pruritus as evidenced by absence of or only mild scratching at their last evaluation in this ongoing study.  In this subset of patients where biomarkers of liver damage were elevated at baseline, as assessed by alanine transaminase (“ALT”) and Total Bilirubin, these values were normalized during the study. Shire continues to analyze the totality of the data to determine an appropriate path forward.

Board and Committee Changes

· On June 11, 2015 Shire announced the appointment of Olivier Bohuon to the Shire Board of Directors as a Non-Executive Director. Olivier will also be a member of the Science & Technology Committee of the Shire Board. Both appointments were effective from July 1, 2015.

Executive Committee Changes

· On June 15, 2015 Shire announced the appointment of Bill Mordan as General Counsel and Corporate Secretary. Bill will also serve as a member of the Shire Executive Committee. He joins Shire from Reckitt Benckiser Group plc where he served as Group General Counsel and Corporate Secretary. Bill will join Shire following a notice period at Reckitt Benckiser.

Dividend

· In respect of the six months ended June 30, 2015 the Board resolved to pay an interim dividend of 4.21 US cents per Ordinary Share (2014: 3.83 US cents per Ordinary Share).

Dividend payments will be made in Pounds Sterling to holders of Ordinary Shares and in US Dollars to holders of ADSs. A dividend of 2.69⁽¹⁾ pence per Ordinary Share (an increase of 20% compared to 2014: 2.24 pence) and 12.63 US cents per ADS (an increase of 10% compared to 2014: 11.49 US cents) will be paid on October 2, 2015 to shareholders on the register as at the close of business on September 4, 2015.

^{(1) Translated using a GBP:USD exchange rate of 1.5631.}

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Products in registration as of June 30, 2015

INTUNIV for the treatment of ADHD in the EU

The CHMP of the EMA has adopted a positive opinion at its July 2015 meeting recommending marketing authorization approval of INTUNIV (guanfacine) extended release drug product, a non-stimulant indicated as part of a comprehensive treatment programme for ADHD in children and adolescents 6 to 17 years old for whom stimulants are not suitable, not tolerated or have been shown to be ineffective.

The CHMP positive opinion will be reviewed by the EC with the expectation that the EC will then grant a centralized marketing authorization with unified labeling that is valid in the 28 countries that are members of the European Union, as well as European Economic Area members, Iceland, Liechtenstein and Norway.

SHP606 (lifitegrast) for the treatment of DED

On April 9, 2015 Shire announced that the FDA had accepted for filing the NDA for lifitegrast and had granted a Priority Review designation. The FDA is expected to provide a decision on October 25, 2015, based on the Prescription Drug User Fee Act V action date. In parallel to the NDA submission, Shire has fully enrolled a Phase 3 safety and efficacy study (OPUS-3) in support of potential US and potential international regulatory submissions. OPUS-3 is a multicenter, randomized, double-masked, placebo-controlled, parallel arm study with a 14 day open-label placebo screening run-in period followed by a 12 week randomized, masked treatment period with a primary efficacy endpoint in subjective patient reported symptoms of dry eye disease, as measured by the eye dryness score.

On April 30, 2014 Shire announced top-line results from the prospective, randomized, double-masked, placebo-controlled SONATA trial which indicated no ocular or drug-related serious adverse events. The safety data indicated in the SONATA trial was entirely consistent with that observed in the Phase 2, OPUS-1 and OPUS-2 studies for lifitegrast.

NATPAR for the treatment of HPT

NATPAR (NATPARA in the US) is currently under review in Europe as an adjunct to calcium and vitamin D to control hypocalcemia in patients with HPT.

Products in clinical development as of June 30, 2015

Phase 3 and Phase 3-ready

SHP465 for the treatment of ADHD in adults

Shire’s NDA for SHP465 was previously submitted in 2006 to support the use of SHP465 as a longer-acting, once-daily treatment for ADHD in adults. With the growing adult ADHD population there is now a larger patient population and Shire expects a greater commercial need for this type of product than in 2006. SHP465 (mixed salts of a single entity amphetamine) capsules provide an extended-release of amphetamines to provide coverage of ADHD symptoms for adults throughout the day.  On April 7, 2015 Shire announced that it had reached an agreement with the FDA on a clear regulatory path for SHP465. Shire has begun dosing patients in a Phase 3 study designed to evaluate the efficacy of SHP465 administered as a daily morning dose compared to a placebo in the treatment of children and adolescents (6-17 years of age inclusive) diagnosed with ADHD.

SHP621 OBS, for the treatment of adolescents and adults with Esoinophilic Esophagitis (“EoE”)

With the Meritage acquisition, Shire has acquired the global rights to Meritage’s Phase 3-ready compound, OBS, for the treatment of adolescents and adults with EoE, a rare, chronic inflammatory GI disease. EoE is a chronic disease that is increasingly being diagnosed in children and adults, with an estimated prevalence in the U.S. of ~181,000. It is characterized by inflammation and accumulation of a specific type of immune cell, called an eosinophil, in the esophagus. EoE patients may have persistent or relapsing symptoms related to esophageal dysfunction, which include dysphagia (difficulty swallowing) and food impaction.

OBS is a proprietary viscous oral formulation of budesonide that is designed to coat the esophagus where the drug can act locally. Budesonide is the active pharmaceutical ingredient in several products approved by the FDA, including products for the treatment of asthma, allergic rhinitis, ulcerative colitis and Crohn’s disease. Budesonide is a corticosteroid and has an established safety profile in those diseases. The FDA has granted orphan drug designation to OBS for the treatment of patients with EoE.

FIRAZYR for the treatment of ACE inhibitor-induced Angioedema (“ACE-I AE”)

A Phase 3 clinical trial to assess the efficacy of FIRAZYR for the treatment of ACE-I AE was initiated in the fourth quarter of 2013 and is ongoing.

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FIRAZYR for the treatment of Hereditary Angioedema (“HAE”) in Japan

Shire plans to initiate a Phase 3 trial to evaluate the efficacy and safety of FIRAZYR for the treatment of HAE in Japanese patients in 2015.

SHP555 (prucalopride; marketed as RESOLOR in the EU) for the treatment of chronic constipation in the US

On January 10, 2012 Shire announced that it had acquired the rights to develop and market prucalopride in the US in an agreement with Janssen Pharmaceutica N.V. Discussions have been conducted with the FDA and an NDA submission pathway has been agreed. Planning is underway to confirm Phase 3 program activities and timelines. 

INTUNIV for the treatment of ADHD in Japan

Under a collaboration agreement, Shionogi and Shire will co-develop and sell treatments for ADHD in Japan, including INTUNIV. A Phase 3 clinical program to evaluate the efficacy and safety of INTUNIV in Japanese patients aged 6 to 17 was initiated in the second quarter of 2013 and is ongoing.

SHP616 (CINRYZE) for routine prophylaxis against HAE attacks in adolescent and adult patients in Japan

CINRYZE is indicated in the US for prophylaxis and in the EU for both prophylaxis and acute treatment of angioedema attacks in adolescent and adult patients with HAE. Based on feedback from the Pharmaceutical and Medical Devices Agency (“PMDA”), a Clinical Trial Notification (“CTN”) was resubmitted and approved on October 2, 2014.

Phase 2

LDX¹ for the treatment of ADHD in Japan

Under a collaboration agreement, Shionogi and Shire will co-develop and sell ADHD products in Japan, including LDX. A Phase 2 clinical program to evaluate the efficacy and safety of LDX in Japanese patients aged 6 to 17 was initiated in the second quarter of 2013 and is ongoing.

^1. Currently marketed as VYVANSE in the US and ELVANSE in certain countries in the EU for the treatment of ADHD

SHP607 for the prevention of Retinopathy of Prematurity (“ROP”)

SHP607 is in development as a protein replacement therapy for the preventative treatment of ROP, a rare eye disorder associated with premature birth. In December 2014 Shire received notification that SHP607 was granted Fast Track designation by the FDA.  In addition, this product has been granted orphan drug designation in both the US and EU. A Phase 2 clinical trial is currently ongoing.

SHP609 for the treatment of Hunter syndrome with CNS symptoms

SHP609 is in development as an enzyme replacement therapy (“ERT”) delivered intrathecally for Hunter syndrome patients with cognitive impairment. In January 2015 the FDA granted SHP609 Fast Track designation.  In addition, this product has been granted orphan designation in the US. The Company initiated a pivotal Phase 2/3 clinical trial in the fourth quarter of 2013 which is ongoing.

SHP610 for Sanfilippo A syndrome (Mucopolysaccharidosis IIIA)

SHP610 is in development as an ERT delivered intrathecally for the treatment of Sanfilippo A syndrome, a Lysosomal Storage Disorder. The Company initiated a Phase 1/2 clinical trial in August 2010 which has now completed. Shire initiated a Phase 2b clinical trial for SHP610, which is designed to establish clinical proof of concept. The product has been granted orphan drug designation in the US and in the EU.

SHP620 (maribavir) for the treatment of cytomegalovirus (“CMV”) infection in transplant patients

SHP620 was acquired as part of the acquisition of ViroPharma. Shire has completed two Phase 2 studies in transplant recipients. The first trial was in first-line treatment of asymptomatic CMV viremia in transplant recipients and the results of this study showed that maribavir, at all doses, was at least as effective as valganciclovir in the reduction of circulating CMV to below the limits of assay detection (undetectable plasma CMV). The second study recently completed was for the treatment of resistant/refractory CMV infection/disease in transplant recipients. The purpose of this study was to determine whether maribavir is efficacious and safe in patients with disease which is resistant or refractory to the standard of care CMV therapy (e.g., valganciclovir, foscarnet). This study also showed that maribavir, at all doses, was effective at lowering CMV to below the limits of assay detection. Approximately two-thirds of patients across the maribavir treatment

43 

groups achieved undetectable plasma CMV DNA (viral load) within 6 weeks. This product has been granted orphan drug designation in both the US and EU. In late June 2015 Shire conducted an end of Phase 2 meeting with the FDA and received further clarity on the path forward.  Based upon this feedback, Shire is considering progressing the program into Phase 3 in 2016.

SHP625 for the treatment of cholestatic liver disease

SHP625 was acquired as part of the recent acquisition of Lumena. Shire is currently conducting Phase 2 studies in the following indications: ALGS, PFIC, PBC, and Primary Sclerosing Cholangitis. This product has been granted orphan drug designation both in the US and EU.

On April 9, 2015 Shire announced that the 13-week Phase 2 IMAGO trial of SHP625 did not meet the primary or secondary endpoints in the study of 20 pediatric patients with ALGS. Mean serum bile acid levels and pruritus at the end of the study were lower in both SHP625 and placebo treated groups as compared to baseline. However, in a post-hoc analysis, a positive correlation between percent changes from baseline in serum bile acid levels and pruritis was observed in the SHP625 treated group.

In late May 2015, Shire also received results from the CLARITY study, a 13 week, doubled blind, placebo-controlled Phase 2 study in combination with UDCA in PBC. SHP625 did not meet the primary endpoint as measured by change in pruritus or the secondary endpoint in level of liver disease as measured by the ALP. However, there was a significant reduction in mean serum bile acid levels versus placebo.

In June 2015, Shire received preliminary results from an interim analysis of the INDIGO study, a 72 week open label Phase 2 study in PFIC. The interim analysis was based on the first 12 subjects who completed 13 weeks of treatment per protocol. SHP625 was well tolerated but there was no statistically significant reduction in mean serum bile levels from baseline. A change from baseline analysis was planned as there is no placebo treatment arm in this study. The changes from baseline for pruritus did reach statistical significance. 5 of the 20 patients who received the drug experienced sustained decreases from baseline in serum bile acids ranging from 86 to 99% and also experienced marked reductions in pruritus as evidenced by absence of or only mild scratching at their last evaluation in this ongoing study.  In this subset of patients where biomarkers of liver damage were elevated at baseline, as assessed by ALT and Total Bilirubin, these values were normalized during the study. Shire continues to analyze the totality of the data to determine an appropriate path forward.

SHP616 (CINRYZE) for the treatment of Acute Antibody Mediated Rejection (“AMR”)

A Phase 2 study for the treatment of AMR with SHP616 was completed in 18 patients. Shire has received FDA and EMA feedback and submitted an investigational new drug application (“IND”) in the second quarter of 2015. Shire plans to initiate a Phase 2/3 study in the second half of 2015.

Phase 1

SHP611 for the treatment of Metachromatic Leukodystrophy (“MLD”)

SHP611 is in development as recombinant human arylsulfatase A (“rASA”) delivered intrathecally every other week for the treatment of the late infantile form of MLD. This product has been granted orphan drug designation in the US and the EU. The Company initiated a 24 patient Phase 1/2 clinical trial in August 2012. The primary endpoint of this trial is to determine the safety of ascending doses of rASA over 40 weeks.  The secondary endpoint focuses on decline in motor function as defined by change in baseline Gross Motor Function Measure (“GMFM-88”). Exploratory endpoints include change from baseline in cerebrospinal fluid sulfatide levels and change from baseline in the total MLD severity score based on brain Magnetic Resonance Imaging (“MRI”). The trial is currently ongoing, but top line interim results were available in late April.  Based upon interim data for the first 18 patients, SHP611 was safe and well tolerated at all doses.  In addition, while not statistically significant and despite a decline in GMFM-88 score across all doses, the highest dose caused a slower decline over the 40 week study period compared to the lower dose treatment groups. The higher dose group also showed encouraging data in reduced MLD MRI score and reductions of CSF sulfatide. Shire will continue to analyze these interim results and determine an optimal path forward in this development program.

SHP616 (CINRYZE) life cycle management and new uses

Shire is pursuing a subcutaneous formulation of CINRYZE for routine prophylaxis against HAE attacks in adolescent and adult patients.  In addition to initiating a Phase 2/3 study (discussed above), Shire is considering pursuing development in Neuromyelitis Optica (“NMO”).  Shire received feedback from the FDA in the second quarter of 2015 on NMO and is in the process of determining an optimal path forward. After further investigation, Shire has decided not to pursue development in Paroxysmal Nocturnal Hemoglobinuria (“PNH”).

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SHP622 for the treatment of Friedreich’s Ataxia (“FA”)

SHP622 is in development for the treatment of Friedreich’s Ataxia and was acquired as part of the acquisition of ViroPharma.  This product is a naturally occurring small molecular weight drug compound that prevents oxidative stress OX1 (indole-3-propionic acid) by a combination of hydroxyl radical scavenging activity and metal chelation. Phase 1 studies in healthy adults were completed in 2010. The drug was found to be generally well tolerated, and the pharmacokinetics revealed that the drug was rapidly absorbed and distributed in the body after oral administration. A Phase 1b trial of SHP622 in adults with FA is ongoing.

SHP626 for the treatment of nonalcoholic steatohepatitis (“NASH”)

SHP626 was acquired as part of the acquisition of Lumena and is in development for the treatment of NASH, a common and often “silent” liver disease characterized by fat deposits in the liver and inflammation which can progress to significant fibrosis.  A US IND was approved by the FDA in the fourth quarter of 2014, and a Phase 1b multiple dose trial is ongoing.

SHP627 for the treatment of focal segmental glomerulosclerosis (“FSGS”)

On July 4, 2014 Shire completed its acquisition of Fibrotech, an Australian biopharmaceutical company developing a new class of orally available drugs with a novel mechanism of action which has the potential to address both the inflammatory and fibrotic components of disease processes. SHP627 has completed a Phase 1a study in healthy volunteers and is currently in a Phase 1b study in patients with diabetic nephropathy. The first Phase 2 study is expected to be initiated in FSGS patients in 2017.

SHP631 for the treatment of both the CNS and somatic manifestations in patients with MPS II

On July 23, 2014, Shire announced a worldwide licensing and collaboration agreement with ArmaGen for SHP631 (also known as AGT-182). SHP631 is an investigational enzyme replacement therapy for the potential treatment of both the central nervous system and somatic manifestations in patients with MPS II.  SHP631 is designed to take advantage of the body’s natural system for transporting products across the blood brain barrier by using the same receptor that delivers insulin to the brain. SHP631 has received orphan drug designation from both the FDA and the EMA. In the second quarter of 2015, ArmaGen initiated a Phase 1 sequential, open-label, dose escalation, multi-dose study in adults with Hunter syndrome.  At least two dose levels, assuming tolerability, are planned sequentially, and the trial is expected to deliver information on the possible effect of SHP631 on CSF levels of glycosaminogycan substrate, which will be important in determining the next steps in clinical development.

Other development projects

A number of additional early development projects, focused on Rare Diseases, are underway in various stages of pre-clinical development.

45 

Results of operations for the three months to June 30, 2015 and 2014

Financial highlights for the three months to June 30, 2015 are as follows:

· Product sales excluding INTUNIV were up 7% (up 12% on a Non GAAP CER basis), with strong growth from VYVANSE (up 18% to $425 million), LIALDA/MEZAVANT (up 10% to $158 million), and FIRAZYR (up 17% to $104 million). GATTEX/REVESTIVE continued to gain positive momentum with $37 million of sales and NATPARA had strong initial sales of $6 million.

· Total product sales including INTUNIV were broadly flat compared to the second quarter of 2014 (up 6% on a Non GAAP CER basis) at $1,476 million (2014: $1,470 million), as product sales in the second quarter of 2015 were held back by significantly lower INTUNIV sales (down 91% to $9 million) following the introduction of generic competition from December 2014.

· As expected, product sales growth in the second quarter of 2015 was also held back by over 5 percentage points due to foreign exchange headwinds from the strong US dollar, primarily affecting sales of ELAPRASE, REPLAGAL and VPRIV.

· Total revenues were up 4% to $1,558 million (2014: $1,502 million), as the second quarter of 2015 benefited from higher royalties, principally the first time inclusion of a full quarter of SENSIPAR royalties acquired with NPS Pharma.

· Operating income from continuing operations was down 61% to $133 million (2014: $338 million). Operating income in the second quarter of 2015 was impacted by IPR&D impairment charges ($523 million) relating to SHP625 and SHP608, offset by the partial release of associated contingent consideration liabilities ($280 million), as well as higher amortization charges on intangible assets acquired with NPS Pharma. Excluding impairment and amortization charges, combined R&D and SG&A costs increased at a higher rate (up 15%) than total revenues (up 4%), as the Company invested behind the launch of VYVANSE for the treatment of moderate to severe BED in adults, GATTEX and NAPARA acquired through the acquisition of NPS Pharma and continued the progression of Company’s pipeline.

· Diluted earnings per ordinary share decreased 70% to $0.27 (2014: $0.89) primarily due to lower operating income.

Results of operations for the three months to June 30, 2015 and 2014

Total revenues

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

	3 months to		3 months to
	June 30,		June 30,
	2015		2014		change
	$'M		$'M		%
Product sales		1,476.2		1,469.6		-
Royalties		79.1		29.2		+171
Other revenues		2.3		3.3		-30
Total		1,557.6		1,502.1		+4

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Product sales

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

	3 months to	3 months to
	June 30,	June 30,	Product sales	Non-GAAP CER	US prescription	Exit market
	2015	2014	growth	growth4	growth1	share1
Net product sales:	$'M	$'M	%	%	%	%
VYVANSE	424.8	359.5	+18	+20	+8	+16
LIALDA/MEZAVANT	157.9	143.6	+10	+12	+9	+35
ELAPRASE	146.5	152.1	-4	+9	n/a2	n/a2
CINRYZE	138.8	129.9	+7	+8	n/a2	n/a2
REPLAGAL	116.9	130.5	-10	+4	n/a3	n/a3
FIRAZYR	104.1	89.0	+17	+20	n/a2	n/a2
ADDERALL XR	86.0	99.8	-14	-13	+12	+5
VPRIV	84.7	89.7	-6	+3	n/a2	n/a2
PENTASA	66.3	63.2	+5	+5	-7	+12
FOSRENOL	45.1	46.7	-3	+5	-11	+3
GATTEX/REVESTIVE	37.3	-	n/a	n/a	n/a2	n/a2
XAGRID	22.8	27.9	-18	-2	n/a2	n/a2
INTUNIV	9.5	100.0	-91	-90	-65	+1
NATPARA	5.9	-	n/a	n/a	n/a2	n/a2
Other product sales	29.6	37.7	-21	-11	n/a	n/a
Total product sales	1,476.2	1,469.6	-

⁽¹⁾ Data provided by IMS Health National Prescription Audit (“IMS NPA”) relates solely to US-based prescriptions. Exit market share represents the average monthly US market share in the month ended June 30, 2015.

⁽²⁾ IMS NPA Data not available.

⁽³⁾ Not sold in the US in the second quarter of 2015.

⁽⁴⁾ 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 2015 product sales and revenues restated using 2014 average foreign exchange rates to 2014 actual product sales and revenues. Average exchange rates for the three months to June 30, 2015 were $1.52:£1.00 and $1.10:€1.00 (2014: $1.68:£1.00 and $1.38:€1.00). Average exchange rates for the six months to June 30, 2015 were $1.53:£1.00 and $1.13:€1.00 (2014: $1.67:£1.00 and $1.37:€1.00).

47 

VYVANSE – ADHD and BED

VYVANSE product sales grew strongly (up 18%) in the second quarter of 2015 compared to the second quarter of 2014, primarily due to higher prescription demand in both the US and ROW markets and the benefit of a price increase¹ taken since the second quarter of 2014. Sales also benefited from higher stocking in the second quarter of 2015 compared to the second quarter of 2014. VYVANSE was made available in mid-February for moderate to severe BED in adults and the Company has been pleased with the overall increase in VYVANSE prescriptions since the product became available for that indication.

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

LIALDA/MEZAVANT – Ulcerative Colitis

Product sales for LIALDA/MEZAVANT in the second quarter of 2015 were up 10%, primarily driven by higher prescription demand due to higher market share and the benefit of a price increase¹ taken since the second quarter of 2014. Growth was partially offset by higher sales deductions as a percentage of product sales.

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

ELAPRASE – Hunter syndrome

ELAPRASE product sales in the second quarter of 2015 were down 4% compared to the second quarter of 2014, reflecting the negative impact of foreign exchange movements partially offset by higher unit sales from an increase in the number of patients on therapy. On a Non GAAP CER basis ELAPRASE sales were up 9% compared to the second quarter of 2014.

CINRYZE – for the prophylactic treatment of HAE

CINRYZE sales were up 7% on the second quarter of 2014 (up 8% on a Non GAAP CER basis), primarily driven by strong growth in patients on therapy and the benefit of a price increase¹ taken since the second quarter of 2014, partially offset by destocking in the quarter

REPLAGAL – Fabry disease

REPLAGAL sales were down 10% compared to the second quarter of 2014, driven primarily by the negative impact of foreign exchange. On a Non GAAP CER basis REPLAGAL sales were up 4% compared to the second quarter of 2014.

FIRAZYR – for the treatment of acute HAE attacks

FIRAZYR product sales were up 17% (up 20% on a Non GAAP CER basis), primarily due to growth in patients on therapy and a price increase¹ taken in January 2015.

ADDERALL XR – ADHD

ADDERALL XR product sales were down 14% in the second quarter of 2015, increased prescription demand (up 12%) was more than offset by the effect of higher sales deductions as a percentage of product sales in the second quarter of 2015 compared to the second quarter of 2014.

VPRIV – Gaucher disease

VPRIV product sales in the second quarter of 2015 were down 6% (up 3% on a Non GAAP CER basis). Continued growth in the number of patients on therapy was more than offset by the negative impact of foreign exchange movements.

PENTASA – Ulcerative Colitis

PENTASA product sales increased in the second quarter of 2015 (up 5%) driven by price increases¹ taken since the second quarter of 2014, partially offset by higher sales deductions as a percentage of product sales and a decrease in prescription demand.

GATTEX/REVESTIVE – Short Bowel Syndrome (“SBS”)

Shire acquired GATTEX/REVESTIVE through its acquisition of NPS Pharma on February 21, 2015, and recorded sales of $37 million in the second quarter of 2015 (up 70% on a pro-forma basis⁽²⁾).

48 

INTUNIV – ADHD

INTUNIV product sales were down 91% in the second quarter of 2015 reflecting the impact of generic competitors in December 2014 and June 2015, which resulted in lower prescription demand and significantly higher sales deductions as a percentage of product sales.

NATPARA – Hypoparathyroidism

Shire made NATPARA available on April 1, 2015, after acquiring the product through its acquisition of NPS Pharma. In the second quarter of 2015 sales of $6 million were recorded.

¹ The actual net effect of price increases on current period net sales compared to the comparative period is difficult to quantify due to the various managed care rebates, Medicaid discounts, other discount programs in which the Company participates and fee for service agreements with wholesalers customers.

² Sales prior to February 21, 2015 were recorded by NPS Pharma, prior to the acquisition by Shire.

Royalties

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

	3 months to		3 months to
	June 30,		June 30,
	2015		2014		Change
	$'M		$'M		%
SENSIPAR		34.8		-		n/a
FOSRENOL		10.8		9.4		+15
3TC and ZEFFIX		10.5		8.3		+27
ADDERALL XR		6.6		4.5		+45
INTUNIV		6.1		-		n/a
Other		10.3		7.0		+47
Total royalties		79.1		29.2		+171

Royalty income increased by 171% in the second quarter of 2015 due to the inclusion of royalty income receivable from Amgen for SENSIPAR (following the acquisition of NPS Pharma by Shire), and the royalties receivable from Actavis on its generic sales of INTUNIV.

Cost of product sales

Cost of product sales decreased to $228.0 million for the three months to June 30, 2015 (15% of product sales), from $277.0 million in the corresponding period in 2014 (19% of product sales). Cost of product sales as a percentage of product sales decreased by 4 percentage points in the second quarter of 2015, due to lower charges on the unwind of the fair value adjustment on inventories acquired as a result of business combinations and lower inventory write-offs in the second quarter of 2015.

For the three months to June 30, 2015 cost of product sales included depreciation of $13.1 million (2014: $17.8 million).

R&D

R&D expenditure increased by 228% to $775.9 million for the three months to June 30, 2015 (53% of product sales), compared to $236.9 million in the corresponding period in 2014 (16% of product sales), as the second quarter of 2015 included impairment charges related to the SHP625 IPR&D intangible asset ($347 million), due to lower probability of regulatory approval following trial results, and impairment charges related to the SHP608 IPR&D intangible asset ($177 million) due to preclinical toxicity findings. In the second quarter of 2014 an impairment charge of $22.0 million was recorded in relation to the SHP613 IPR&D intangible asset. Excluding these impairment charges, R&D expenditure in the three months to June 30, 2015 increased by $37.7 million, due to the inclusion of a first full quarter of NPS Pharma R&D costs and continued investment in existing pipeline programs.

R&D in the three months to June 30, 2015 included depreciation of $8.9 million (2014: $5.8 million).

49 

SG&A

SG&A expenditure increased by 26% to $627.3 million (42% of product sales) from $496.2 million (34% of product sales), due to increased investment behind launches, including the successful launch of VYVANSE for the treatment of moderate to severe BED in adults, and the first time inclusion of a full quarter of NPS Pharma’s SG&A costs and higher intangible asset amortization, in part as a result of intangible assets acquired with NPS Pharma.

For the three months to June 30, 2015 SG&A included depreciation of $17.9 million (2014: $21.1 million) and amortization of $131.3 million (2014: $61.2 million).

Gain on sale of product rights

For the three months to June 30, 2015 Shire recorded a net gain on sale of non-core product rights of $7.1 million (2014: $3.8 million) due primarily to the re-measurement of the contingent consideration receivable relating to the divestment of DAYTRANA.

Reorganization costs

For the three months to June 30, 2015 Shire recorded reorganization costs of $13.3 million (2014: $45.8 million). Costs in the second quarter of 2015 primarily related to the relocation of roles from Chesterbrook to Lexington.

Integration and acquisition costs

For the three months to June 30, 2015 Shire recorded a net credit for integration and acquisition costs of $212.4 million, comprising costs primarily related to the acquisition and integration of NPS Pharma of $45.7 million offset by a net credit of $258.1 million relating to the change in fair values of contingent consideration liabilities primarily relating to SHP625 (acquired with Lumena) and SHP608 (acquired with Lotus Tissue Repair).

In the second quarter of 2014 Shire recorded integration and acquisition costs of $112.1 million, comprising costs of $31.5 million related to the acquisition and integration of ViroPharma and $80.6 million relating to the change in fair values of contingent consideration liabilities.

Interest expense

For the three months to June 30, 2015 Shire incurred interest expense of $11.3 million (2014: $11.1 million). Interest expense in the second quarter of 2015 primarily related to interest and the amortization of financing fees incurred on borrowings to fund the NPS Pharma acquisition. Interest expense in the second quarter of 2014 principally related to interest and amortization of issue costs incurred on borrowings to fund the ViroPharma acquisition.

Taxation

The effective rate of tax in the second quarter of 2015 was -37% (2014: -51%).

The effective rate of tax in the second quarter of 2015 is negative primarily due to the reduction in deferred tax liabilities in relation to the impairment of IPR&D intangible assets, the re-measurement of uncertain tax positions relating to ongoing tax audits and the release of certain valuation allowances all recognized during the quarter.

The effective rate of tax in the second quarter of 2014 was negative primarily due to the recognition of a net tax credit in relation to the settlement of tax positions with the Canadian revenue authorities.

Discontinued operations

The loss from discontinued operations for the three months to June 30, 2015 was $4.5 million net of tax (2014: $5.2 million) relating to costs associated with the divestment of the DERMAGRAFT business.

50 

Results of operations for the six months to June 30, 2015 and 2014

Total revenues

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

	6 months to		6 months to
	June 30,		June 30,
	2015		2014		change
	$'M		$'M		%
Product sales		2,899.4		2,777.7		+4
Royalties		141.9		61.5		+131
Other revenues		4.7		9.7		-52
Total		3,046.0		2,848.9		+7

51 

Product sales

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

	6 months to	6 months to		Non-GAAP	US
	June 30,	June 30,	Product sales	CER	prescription	Exit market
	2015	2014	growth	growth	growth1	share1
	$'M	$'M	%	%	%	%
Net product sales:
VYVANSE	841.6	710.7	+18	+20	+7	+16
LIALDA/MEZAVANT	306.4	272.5	+12	+15	+11	+35
ELAPRASE	271.5	280.7	-3	+8	n/a2	n/a2
CINRYZE	286.9	215.5	+33	+35	n/a2	n/a2
REPLAGAL	214.4	244.8	-12	+1	n/a3	n/a3
FIRAZYR	196.6	163.9	+20	+23	n/a2	n/a2
ADDERALL XR	181.7	184.9	-2	-1	+14	+5
VPRIV	171.1	176.6	-3	+5	n/a2	n/a2
PENTASA	145.0	135.5	+7	+7	-7	+12
FOSRENOL	89.2	88.1	+1	+9	-11	+3
GATTEX/REVESTIVE	52.2	-	n/a	n/a	n/a2	n/a2
XAGRID	48.1	55.0	-13	+3	n/a2	n/a2
INTUNIV	26.9	182.3	-85	-85	-64	+1
NATPARA	5.9	-	n/a	n/a	n/a2	n/a2
Other product sales	61.9	67.2	-8	+3	n/a	n/a
Total product sales	2,899.4	2,777.7	+4

(1) Data provided by IMS Health National Prescription Audit (“IMS NPA”) relates solely to US-based prescriptions. Exit market share represents the average monthly US market share in the month ended June 30, 2015.

(2) IMS NPA Data not available.

(3) Not sold in the US in the six months to June 30, 2015.

VYVANSE – ADHD

VYVANSE product sales grew strongly in the six months to June 30, 2015 (up 18% compared to the same period in 2014) primarily due to a price increase¹ taken since 2014, higher prescription demand, stocking in the first half of 2015 and to a slightly lesser extent growth in international sales.

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

52 

LIALDA/MEZAVANT – Ulcerative Colitis

Product sales for LIALDA/MEZAVANT in the six months to June 30, 2015 were up 12% (up 15% on a Non GAAP CER basis), primarily due to higher US prescription demand and the effect of a price increase¹ taken since 2014. These factors were partially offset by higher sales deductions as a percentage of product sales and the negative impact of foreign exchange movements.

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

ELAPRASE – Hunter syndrome

ELAPRASE product sales in the six months to June 30, 2015 were down 3% compared to the same period in 2014 (up 8% on a Non GAAP CER basis). Continued growth in the number of treated patients and the benefit of a price increase¹ taken since 2014 was more than offset by the negative impact of foreign exchange movements.

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

CINRYZE –prophylactic treatment of HAE

Shire acquired CINRYZE through its acquisition of ViroPharma in the first quarter of 2014. CINRYZE product sales in the six months to June 30, 2015 were up 33% compared to the same period in 2014 (17% on a proforma basis²) primarily due to continued growth in the number of patients on therapy and to a lesser extent the benefit of a price increase¹ taken since 2014.

REPLAGAL – Fabry disease

REPLAGAL sales were down 12% (up 1% on a Non GAAP CER basis) in the six months to June 30, 2015 compared to the same period in 2014 driven primarily by the negative impact of foreign exchange movements.

FIRAZYR – acute treatment of HAE

FIRAZYR product sales grew strongly up 20% (up 23% on a Non GAAP CER basis) compared to the same period in 2014. This was primarily due to growth in patients on therapy and to a lesser extent the effect of a price increase¹ taken since 2014. These factors were partially offset by the negative impact of foreign exchange movements.

ADDERALL XR – ADHD

ADDERALL XR product sales decreased (down 2%) in the six months to June 30, 2015, as increased prescription demand (up 14%) was more than offset by the effect of higher sales deductions as a percentage of product sales.

VPRIV – Gaucher disease

VPRIV product sales in the six months to June 30, 2015 were down 3% (up 5% on a Non GAAP CER basis), reflecting the negative impact of foreign exchange movements partially offset by higher unit sales from an increase in the number of patients on therapy.

PENTASA – Ulcerative Colitis

PENTASA product sales increased in the six months to June 30, 2015 (up 7%) driven by price increases¹ taken since 2014, partially offset by a decrease in US prescription demand and higher sales deductions as a percentage of product sales.

GATTEX/REVESTIVE – Short Bowel Syndrome (“SBS”)

Shire acquired GATTEX/REVESTIVE through its acquisition of NPS Pharma on February 21, 2015, and has recorded sales of $52 million (up 60% on a proforma basis³) for the period subsequent to acquisition.

INTUNIV – ADHD

INTUNIV product sales were down 85% in the six months to June 30, 2015 reflecting the impact of generic competitors in December 2014 and June 2015, which resulted in lower prescription demand and significantly higher sales deductions as a percentage of product sales.

NATPARA – Hypoparathyroidism

Shire made NATPARA available on April 1, 2015, after acquiring the product through its acquisition of NPS Pharma. In the first half of 2015 sales of $6 million were recorded.

53 

¹ The actual net effect of price increases on current period net sales compared to the comparative period is difficult to quantify due to the various managed care rebates, Medicaid discounts, other discount programs in which the Company participates and fee for service agreements with wholesalers customers.

² 2014 Proforma revenues include revenues recorded by ViroPharma, prior to the acquisition of ViroPharma by Shire on January 24^th, 2014

³ Proforma revenues include revenues recorded by NPS Pharma, prior to the acquisition of NPS Pharma by Shire on February 21^st 2015.

Royalties

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

	6 months to		6 months to
	June 30,		June 30,
	2015		2014		Change
	$'M		$'M		%
SENSIPAR		45.2		-		n/a
INTUNIV		27.8		-		n/a
FOSRENOL		19.2		22.2		-14
3TC and ZEFFIX		18.0		15.8		+14
ADDERALL XR		15.1		13.5		+12
Other		16.6		10.0		+66
Total royalties		141.9		61.5		+131

Royalties in the first half of 2015 are higher than the first half of 2014 due to the inclusion of royalty income receivable from Amgen for SENSIPAR following the acquisition of NPS Pharma by Shire, and the inclusion of royalties receivable from Actavis on its generic sales of INTUNIV.

Cost of product sales

Cost of product sales was $455.8 million for the six months to June 30, 2015 (16% of product sales), down from $506.5 million in the corresponding period in 2014 (18% of product sales). Cost of product sales as a percentage of product sales was two percentage points lower compared to the same period in 2014 due to lower charges in relation to the unwind of the fair value adjustment on inventories acquired in business combinations.

For the six months to June 30, 2015 cost of product sales included depreciation of $24.8 million (2014: $28.0 million).

R&D

R&D expenditure increased to $969.6 million for the six months to June 30, 2015 (33% of product sales), compared to $597.4 million in the corresponding period in 2014 (22% of product sales). R&D expenditure in 2015 includes impairment charges of $346.6 million relating to the SHP625 IPR&D intangible asset, due to a lower probability of regulatory approval following trial results, and $176.7 million relating to the SHP608 IPR&D intangible asset, following preclinical toxicity findings. In 2014 R&D expenditure included impairment charges of $166.0 million related to the SHP602 IPR&D intangible asset, following the decision to place the program on clinical hold and $22.0 million related to the SHP613 IPR&D intangible asset, following the decision to discontinue further development of the asset. Excluding these impairment charges, R&D expenditure in the six months to June 30, 2015 increased by 9% or by $36.9 million, due to the first time inclusion of NPS Pharma’s R&D costs and continued investment in existing pipeline programs. R&D in the six months to June 30, 2015 included depreciation of $11.7 million (2014: $11.6 million).

54 

SG&A

SG&A expenditure increased to $1,133.9 million (39% of product sales) for the six months to June 30, 2015 from $926.5 million (33% of product sales) in the corresponding period in 2014 due to increased investment behind launches, including the successful launch of VYVANSE for the treatment of moderate to severe BED in adults, the first time inclusion of NPS Pharma’s SG&A costs from February 21, 2015, and higher intangible asset amortization.

For the six months to June 30, 2015 SG&A included depreciation of $35.7 million (2014: $41.9 million) and amortization of $219.6 million (2014: $119.0 million).

Gain on sale of product rights

For the six months to June 30, 2015 Shire recorded a net gain on sale of product rights of $12.3 million (2014: $40.2 million). The gain in 2015 primarily relates to the re-measurement of contingent consideration receivable from the divestment of DAYTRANA. The gain in 2014 related to the sale of CALCICHEW trademarks to Takeda and the re-measurement of contingent consideration receivables from the divestment of DAYTRANA.

Reorganization costs

For the six months to June 30, 2015 Shire recorded reorganization costs of $28.5 million (2014: $95.2 million), related to the One Shire reorganization.

Integration and acquisition costs

For the six months to June 30, 2015 Shire recorded a net credit for integration and acquisition costs of $136.7 million (2014: a charge of $118.7 million), comprising costs of $119.0 million primarily related to the acquisition and integration of NPS Pharma offset by a net credit of $255.7 million relating to the change in fair values of contingent consideration liabilities. The change in fair value of contingent consideration liabilities in the six months to June 30, 2015 relates principally to SHP625 (acquired with Lumena) and SHP608 (acquired with Lotus Tissue Repair).

In the six months to June 30, 2014 the charge comprised costs of $97.3 million relating to the acquisition and integration of ViroPharma and a net charge of $21.4 million relating to the change in fair values of contingent consideration liabilities.

Interest expense

For the six months to June 30, 2015 Shire incurred interest expense of $20.9 million (2014: $18.9 million), primarily related to interest and amortization of financing fees incurred on borrowings to fund the NPS Pharma acquisition. Interest expense in 2014 principally related to interest and amortization of issue costs incurred on borrowings to fund the ViroPharma acquisition.

Taxation

The effective rate of tax for the six months to June 30, 2015 was 2% (2014: -19%).

The effective rate of tax for the six months to June 30, 2015 is low primarily due to the reduction in deferred tax liabilities in relation to the impairment of IPR&D intangible assets, the re-measurement of uncertain tax positions relating to ongoing tax audits and the release of certain valuation allowances all recognized during the first half.

The effective rate of tax in the six months to June 30, 2014 was negative primarily due to the recognition of a net tax credit in the first half of 2014 in relation to the settlement of tax positions with the Canadian revenue authorities.

Discontinued operations

The loss from discontinued operations for the six months to June 30, 2015 was $7.0 million net of tax (2014: $27.9 million) relating to costs associated with the divestment of the DERMAGRAFT business.

55 

Financial condition at June 30, 2015 and December 31, 2014

Cash & cash equivalents

Cash and cash equivalents decreased by $2,918.4 million to $64.0 million at June 30, 2015 (December 31, 2014: $2,982.4 million), primarily due to the use of existing cash and cash equivalents to fund the acquisitions of NPS Pharma and Meritage.

Accounts receivable, net

Accounts receivable, net increased by $64.1 million to $1,099.2 million at June 30, 2015 (December 31, 2014: $1,035.1 million), primarily due to the inclusion of NPS Pharma’s accounts receivable and an increase in revenue. Days sales outstanding increased to 46 days (December 31, 2014: 43 days).

Inventories

Inventories increased by $88.0 million to $632.8 million at June 30, 2015 (December 31, 2014: $544.8 million), primarily due to the inventories acquired as part of the acquisition of NPS Pharma.

Goodwill

Goodwill increased by $1,698.3 million to $4,173.2 million at June 30, 2015 (December 31, 2014: $2,474.9 million), principally due to the acquisitions of NPS Pharma and Meritage.

Other intangible assets, net

Other intangible assets increased by $4,376.0 million to $9,310.4 million at June 30, 2015 (December 31, 2014: $4,934.4 million), principally due to the intangible assets acquired with NPS Pharma and Meritage, offset by IPR&D intangible asset impairment charges and intangible asset amortization.

Short term borrowings

Short term borrowings increased by $1,379.9 million to $2,229.9 million at June 30, 2015 (December 31, 2014: $850.0 million), reflecting the utilization of short term debt facilities to partially fund the acquisition of NPS Pharma and the recognition of secured non-recourse debt liabilities assumed as part of the NPS Pharma acquisition.

Other current liabilities

Other current liabilities decreased by $117.0 million to $145.5 million at June 30, 2015 (December 31, 2014: $262.5 million) principally due to the reduction in the fair value of contingent consideration payable associated with the SHP625 IPR&D intangible asset.

Non-current deferred tax liabilities

Non-current deferred tax liabilities increased by $1,597.8 million to $2,808.4 million at June 30 2015 (December 31, 2014: $1,210.6 million) primarily due to deferred tax liabilities arising on intangible assets partially offset by deferred tax assets arising on tax attributes both acquired with NPS Pharma and Meritage.

Other non-current liabilities

Other non-current liabilities decreased by $18.0 million to $718.7 million at June 30, 2015 (December 31, 2014: $736.7 million) principally due to the reduction in the fair value of contingent consideration payable associated with the SHP608 IPR&D intangible asset, offset by the recognition of contingent consideration payable in respect of the Meritage acquisition.

56 

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 business combinations, in-licenses and collaborative projects; the timing and quantum of tax and dividend payments; the timing and quantum of purchases by the Employee Benefit Trust of Shire shares in the market to satisfy awards granted under Shire’s employee share plans; 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 $64.0 million of cash and cash equivalents at June 30, 2015.

Shire has a revolving credit facility of $2,100 million which matures in 2019, $920 million of which was utilized as June 30, 2015 to partially finance the purchase price paid in respect of Shire’s acquisition of NPS Pharma (including certain related costs).

In connection with its acquisition of NPS Pharma, on January 11, 2015 the Company also entered into a $850 million term loan facility agreement, which matures on January 10, 2016, with, among others, Citi Global Markets Limited (acting as mandated lead arranger and bookrunner) (the “2015 Facility Agreement”). At June 30, 2015 the 2015 Facility Agreement was fully utilized and recorded within short term borrowings. The Company also assumed non-recourse secured debt obligations as part of the NPS Pharma acquisition with a carrying value of $83.8 million as at June 30, 2015. See Note 13 in Part 1 of this Form 10-Q for details.

In connection with its acquisition of ViroPharma, on November 11, 2013 the Company also entered into a $2,600 million term loan facilities agreement with, among others, Morgan Stanley Bank International Limited (acting as lead arranger and agent) (the “2013 Facilities Agreement”). Amounts drawn under the 2013 Facilities Agreement were subsequently reduced to $400 million. At June 30, 2015 the 2013 Facilities Agreement comprises a $400 million term loan facility which matures on November 11, 2015, and was fully utilized and recorded within short term borrowings.

Shire has access to certain short term uncommitted lines of credit which it utilizes from time to time to provide short term flexibility in cash management. At June 30, 2015, $50 million was drawn under such facilities.

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, lease obligations, repayment of the term loans and milestone payments as they become due over the next twelve months.

If the Company decides to acquire other businesses, it expects to fund these acquisitions from cash resources, the RCF and through new borrowings or the issuance of new equity if necessary.

Sources and uses of cash

The following table provides an analysis of the Company’s gross and net (debt)/cash position (excluding restricted cash), as at June 30, 2015 and December 31, 2014:

57 

	June 30,			December 31,
	2015			2014
	$’M			$’M
Cash and cash equivalents1		64.0			2,982.4
Long term borrowings		(73.9	)		-
Short term borrowings		(2,229.9	)		(850.0	)
Other debt		(13.6	)		(13.7	)
Total debt		(2,317.4	)		(863.7	)
Net (debt)/cash2		(2,253.4	)		2,118.7

^{(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.}

^{(2) Net(debt)/ cash is a Non-GAAP measure. The Company believes that Net (debt)/cash is a useful measure as it indicates the level of borrowings after taking account the cash and cash equivalents that could be utilized to pay down the outstanding borrowings.}

Cash flow activity

Net cash provided by operating activities in the six months to June 30, 2015 decreased by $66.2 million or 6% to $1,013.9 million (2014: $1,080.1 million), as higher cash receipts from gross product sales was held back by the cash outflows related to the acquisition and integration of NPS Pharma. Net cash provided by operating activities in the six months to June 30, 2014 also benefited from a $248 million repayment received from the Canadian revenue authorities.

Net cash used in investing activities was $5,234.1 million in the six months to June 30, 2015, principally relating to the cash paid for the acquisition of NPS Pharma of $5,220 million (less cash acquired with NPS Pharma of $42 million) and for the acquisition of Meritage of $75 million.

Net cash used in investing activities was $3,938.1 million in the six months to June 30, 2014, principally relating to the cash paid for the acquisition of ViroPharma of $3,997 million (net of cash acquired with ViroPharma of $233 million) and for the acquisition of Lumena of $300 million (net of cash acquired with Lumena of $46 million).

Net cash provided by financing activities was $1,302.5 million for the six months to June 30, 2015, principally due to the drawings, net of subsequent repayments, made under Shire’s RCF, 2015 Facility Agreement and short term credit lines to partially fund the NPS Pharma acquisition.

Net cash provided by financing activities was $773.3 million for the six months to June 30, 2014, principally due to the drawings, net of subsequent repayments, made under the RCF and Facilities to partially fund the ViroPharma acquisition. In addition the Company paid cash of $551.5 million to settle the convertible debt assumed with ViroPharma, received cash of $346.7 million upon settlement of a purchased call option acquired with ViroPharma and made a dividend payment of $99.6 million.

Obligations and commitments

Other than the borrowings incurred to finance, or assumed following, the acquisition of NPS, as outlined above, during the six months to June 30, 2015 there have been no material changes to the Company’s 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, 2014.

58 

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

Note 17 to the unaudited 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, 2014 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 files under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC.

As at June 30, 2015 the Company, under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, 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 files under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC.

In February 2015 the Company acquired NPS Pharma which represents a change in the Company’s internal control over financial reporting. Management is continuing to integrate the NPS Pharma internal controls over financial reporting with those of the Company. Excluding the NPS Pharma acquisition, there has been no change in the Company’s internal control over financial reporting that occurred during the period covered by this quarterly report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The information required by this Item is incorporated herein by reference to Note 15 to the unaudited 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 Annual Report on Form 10-K for the year ended December 31, 2014.

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

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

59 

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. ⁽⁴⁾

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. ⁽⁵⁾

2.06 Agreement and Plan of Merger, dated as of March 14, 2012, by and among Shire Pharmaceuticals LLC, Pelegrina Corporation, FerroKin BioSciences, Inc. and Shareholder Representative Services LLC, solely for the limited purposes set forth therein. ⁽⁶⁾

2.07 Agreement and Plan of Merger dated as of November 11, 2013 among Shire Pharmaceutical Holdings Ireland Limited, Venus Newco, Inc., ViroPharma Incorporated and Shire plc. ⁽⁷⁾

2.08 Asset Purchase Agreement dated as of January 16, 2014 among Shire US Holdings, Inc., Shire Regenerative Medicine, Inc. and Organogenesis Inc. ⁽⁸⁾

2.09 Cooperation Agreement dated July 18, 2014 between AbbVie Inc.and Shire plc. ⁽⁹⁾

2.10 Termination Agreement dated October 20, 2014 between AbbVie Inc.and Shire plc. ⁽¹⁰⁾

2.11 Agreement and Plan of Merger dated as of January 11, 2015 among Shire Pharmaceuticals Holdings Ireland Limited, Knight NewCo 2, Inc., NPS Pharmaceuticals Inc., and Shire plc. ⁽¹¹⁾

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. ⁽¹²⁾

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. ⁽¹³⁾

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.⁽¹⁴⁾

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. ⁽¹⁵⁾

4.03 Form of Ordinary Share Certificate of Shire Limited. ⁽¹⁶⁾

4.04 Form of American Depositary Receipt Certificate of Shire Limited. ⁽¹⁷⁾

4.05 Trust Deed for the New Shire Income Access Trust, dated August 29, 2008. ⁽¹⁸⁾

4.06 Form of Amended and Restated Deposit Agreement among Shire plc, Citibank, N.A. as successor depositary, and all holders from time to time of ADRs thereunder dated May 23, 2011. ⁽¹⁹⁾

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. ⁽²⁰⁾

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. ⁽²¹⁾

60 

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). ⁽²²⁾

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. ⁽²³⁾

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. ⁽²⁴⁾

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. ⁽²⁵⁾

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. ⁽²⁶⁾

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. ⁽²⁷⁾

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. ⁽²⁸⁾

10.10* Settlement Agreement, dated August 14, 2006 by and between Shire Laboratories Inc. and Barr. ⁽²⁹⁾

10.11* Product Development and License Agreement, dated August 14, 2006 by and between Shire LLC and Duramed Pharmaceuticals, Inc. ⁽³⁰⁾

10.12* Product Acquisition and License Agreement, dated August 14, 2006 by and among Shire LLC, Shire plc and Duramed Pharmaceuticals, Inc. ⁽³¹⁾

10.13 Novation Agreement dated November 21, 2005 relating to the Employment Agreement of Angus Russell dated March 10, 2004. ⁽³²⁾

10.14 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. ⁽³³⁾

10.15 Form of Amended and Restated Employment Agreement between Shire plc and Mr Matthew Emmens, dated March 12, 2004. ⁽³⁴⁾

10.16 Amendment Agreement dated November 21, 2005 relating to the Amended and Restated Employment Agreement of Matthew Emmens dated March 12, 2004. ⁽³⁵⁾

10.17 Ratification and Guaranty dated November 21, 2005 relating to the Amended and Restated Employment Agreement of Matthew Emmens dated March 12, 2004. ⁽³⁶⁾

10.18 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. ⁽³⁷⁾

10.19 Ratification and Guaranty dated May 20, 2008 relating to the Amended and Restated Employment Agreement of Matthew Emmens dated March 12, 2004. ⁽³⁸⁾

10.20 Form of Indemnity Agreement for Directors of Shire Limited. ⁽³⁹⁾

10.21 Service Agreement between Shire Limited and Mr Graham Hetherington, dated July 2, 2008. ⁽⁴⁰⁾

10.22 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. ⁽⁴¹⁾

10.23 Amended Agreement dated February 24, 2009 relating to the Product Development and License Agreement dated August 14, 2006. ⁽⁴²⁾

61 

10.24 Amendment to the Shire Portfolio Share Plan as approved by the Annual General meeting held on April 27, 2010. ⁽⁴³⁾

10.25 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. ⁽⁴⁴⁾

10.26 Service Agreement between Shire Pharmaceutical, LLC and Mr. Flemming Ornskov, dated October 24, 2012. ⁽⁴⁵⁾

10.27 Facilities Agreement dated November 11, 2013 among Shire plc, Morgan Stanley Bank International Limited, as mandated lead arranger, bookrunner and agent, and the other parties thereto. ⁽⁴⁶⁾

10.28 Letter agreement dated December 13, 2013 among Shire plc, Morgan Stanley Bank International Limited, as agent, and the other parties thereto. ⁽⁴⁷⁾

10.29 Letter agreement dated February 18, 2014 between Shire plc and Barclays Bank plc, as agent. ⁽⁴⁸⁾

10.30 Letter agreement dated April 8, 2014 between Shire plc and Barclays Bank plc, as agent. ⁽⁴⁹⁾

10.31 US $ 2,100,000,000 Multicurrency Revolving and Swingline Facilities Agreement dated 12 December 2014. ⁽⁵⁰⁾

10.32 Facilities Agreement dated January 11, 2015 among Shire Plc, Citigroup Global Markets Limited, as mandated lead arranger and bookrunner, and the other parties thereto. ⁽⁵¹⁾

10.33 Executive Employment Agreement between Shire Human Genetic Therapies, Inc. and Jeffrey V. Poulton, dated April 29, 2015.

31.1 Certification of Flemming Ornskov pursuant to Rule 13a - 14 under The Exchange Act.

31.2 Certification of Jeffrey Poulton pursuant to Rule 13a - 14 under The Exchange Act.

32.1 Certification of Flemming Ornskov and Jeffrey Poulton 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 2.04 to Shire's Form 10-Q filed on November 5, 2010.

(5) Incorporated by reference to Exhibit 2.1 to Shire's Form 8-K filed on June 30, 2011.

(6) Incorporated by reference to Exhibit 2.06 to Shire's Form 10-Q filed on May 23, 2012.

(7) Incorporated by reference to Exhibit 2.1 to Shire’s Form 8-K filed on November 12, 2013.

(8) Incorporated by reference to Exhibit 2.1 to Shire’s Form 8-K filed on January 22, 2014.

(9) Incorporated by reference to Exhibit 2.2 to Shire's Form 8-K filed on July 24, 2014.

(10) Incorporated by reference to Exhibit 2.1 to Shire's Form 8-K filed on October 22, 2014.

(11) Incorporated by reference to Exhibit 2.1 to Shire's Form 8-K filed on January 12, 2015.

(12) Incorporated by reference to Exhibit 99.02 to Shire's Form 8-K filed on October 1, 2008.

62 

(13) Incorporated by reference to Exhibit 3.1 to Shire's Form 8-K filed on May 1, 2014.

(14) Incorporated by reference to Exhibit 4.01 to Shire's Form 8-K filed on May 23, 2008.

(15) Incorporated by reference to Exhibit 4.02 to Shire's Form 8-K filed on May 23, 2008.

(16) Incorporated by reference to Exhibit 4.03 to Shire's Form 8-K filed on May 23, 2008.

(17) Incorporated by reference to Exhibit 4.04 to Shire's Form 8-K filed on May 23, 2008.

(18) Incorporated by reference to Exhibit 4.05 to Shire's Form 10-K filed on February 27, 2009.

(19) Incorporated by reference to Exhibit (a) to Shire's Form F-6 filed on April 27, 2011.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(44) Incorporated by reference to Exhibit 10.28 to Shire's Form 10-K filed on February 23, 2011.

(45) Incorporated by reference to Exhibit 10.29 to Shire's Form 10-K filed on February 25, 2013.

(46) Incorporated by reference to Exhibit 10.1 to Shire’s Form 8-K filed on November 12, 2013.

(47) Incorporated by reference to Exhibit 10.1 to Shire’s Form 8-K filed on December 16, 2013.

(48) Incorporated by reference to Exhibit 10.1 to Shire’s Form 8-K filed on February 21, 2014.

(49) Incorporated by reference to Exhibit 10.1 to Shire’s Form 8-K filed on April 11, 2014.

(50) Incorporated by reference to Exhibit 10.1 to Shire’s Form 8-K filed on December 17, 2014.

(51) Incorporated by reference to Exhibit 10.1 to Shire’s Form 8-K filed on January 12, 2015.

63 

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: July 30, 2015	/s/ Flemming Ornskov Flemming Ornskov Chief Executive Officer
Date: July 30, 2015	/s/ Jeffrey Poulton Jeffrey Poulton Chief Financial Officer

64 

EX-10.33

EXHIBIT 10.33

EXECUTIVE EMPLOYMENT AGREEMENT

EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”), dated as of April 29, 2015 (the “Effective Date”), by and between Shire Human Genetic Therapies, Inc., a Delaware corporation (the “Company”), and Jeffrey V. Poulton (“Executive”).

BACKGROUND

WHEREAS, the Company and Executive wish to set forth and confirm the terms and conditions of Executive’s employment by the Company as hereinafter set forth.

NOW, THEREFORE, in consideration of the foregoing, and of the mutual covenants and agreements hereinafter set forth, and intending to be legally bound, the parties hereto hereby agree as follows:

1          Employment. Executive hereby accepts employment with the Company in accordance with the terms and conditions set forth in this Agreement. Upon the Effective Date, Executive shall serve as the Chief Financial Officer of Shire plc in accordance with the terms and conditions set forth in this Agreement. Effective as of the Effective Date, in connection with Executive’s appointment to the position of Chief Financial Officer of Shire plc, Executive shall be appointed to the Board of Directors of Shire plc (the “Board”); provided, however, that Executive’s continued service on the Board shall be subject to approval by the shareholders of Shire plc at the applicable shareholder meetings. Executive agrees to promptly notify the Board of becoming aware of any reason that would preclude his ability to legally perform any of his duties. Executive represents that he is not bound by or party to any employment contract, restrictive covenant or other restriction (contractual or otherwise) (collectively, the “Existing RC Agreements”) preventing or impairing him from entering into employment with or carrying out his responsibilities for Shire (as defined below) under this Agreement or otherwise, or which is in any way inconsistent with the terms of this Agreement.

2          Term of Agreement and Employment. The term of this Agreement and Executive’s employment by the Company hereunder shall commence on the Effective Date and shall continue until Executive’s employment is terminated as provided in Section 9 hereof (the “Employment Period”); provided, however, that the Company’s payment obligations in Section 9, the Executive’s repayment obligations under Section 4.3 and the provisions of Sections 5, 6, 7, 8, 9.5, 9.6, 10 and 11 shall survive the termination of this Agreement and Executive’s employment.

3          Duties and Responsibilities; Location; Company Policies.

3.1       In Executive’s capacity as Chief Financial Officer of Shire plc, Executive shall report to the Chief Executive Officer of Shire plc (the “CEO”). In his capacity as Chief Financial Officer of Shire plc, Executive shall have the customary powers, responsibilities and authorities of chief financial officers of corporations of the size, type and nature of Shire plc, subject to direction of the CEO. In performing Executive’s duties and responsibilities hereunder, Executive shall (i) faithfully and diligently perform such duties and exercise such powers consistent with his position as the CEO may from time to time assign to or confer upon him in connection with the business of Shire; (ii) protect,

promote, develop and extend the business interests and reputation of Shire; (iii) conform to and comply with the lawful and reasonable directions of the CEO that are consistent with his position; (iv)upon receiving reasonable notice, promptly give (in writing if so requested) to the CEO all such information, explanations and assistance as the CEO may require in connection with the business and affairs of Shire for which Executive is required to perform duties and which are consistent with his position; (v) comply with Shire’s Code of Ethics Policy; (vi) in relation to any dealings in securities, comply with all laws affecting dealings in securities and all regulations of any relevant stock exchanges on which such dealings take place and any policies or rules adopted by Shire in relation to the holding or trading of securities; (vii) not directly or indirectly procure, accept or obtain for his own benefit (or for the benefit of any other person) any payment, rebate, discount, commission, vouchers, gift, entertainment or other benefit from any third party in respect of any business transacted or proposed to be transacted (excluding air miles or similar vouchers from other such schemes) (whether or not by him) by or on behalf of Shire (“Gratuities”); (viii) observe the terms of any policy issued by Shire in relation to Gratuities; and (ix) promptly disclose and account to Shire for any Gratuities received by him (or by any other person on his behalf or at his instruction). During the Employment Period, Executive shall also serve as a director or officer (without additional compensation) of the Company or any Affiliated Company (as defined below) as may be determined by the Board from time to time.

3.2          Executive shall devote all of Executive’s business time, attention and skill loyally and faithfully to the business and interests of Shire plc, the Company and any company or entity which from time to time, directly or indirectly owns, is owned by or is under common ownership with Shire plc (each an “Affiliated Company” and, together with the Company and Shire plc, collectively “Shire”) in a proper and efficient manner, and shall further and promote the business of Shire. During the Employment Period, Executive may not be employed by or engaged in any other business (whether paid or unpaid), including serving on any board of directors or similar governing bodies (other than a board of Shire), without first obtaining the Board’s prior written consent; provided, however, that nothing herein shall limit or restrict Executive from engaging in charitable or civic activities or from providing unpaid assistance to friends and family members, provided that such activities do not in any material respect interfere with Executives duties, responsibilities or obligations to Shire and are not contrary to the interests of Shire.

3.3          Executive’s principal place of work shall be at the Company’s offices in Lexington, Massachusetts, or at such other place to which Executive may be relocated from time to time. Should Executive’s principal place of work change, Executive shall be entitled to all benefits under the Shire relocation policy that is in effect and covering Executive at such time. Executive understands that he shall be required in the performance of his duties to travel to, and perform work at, such places in the United States or abroad as business of Shire may require. As a result, the Company and Executive shall each use their best efforts to obtain authorization for Executive to legally work in any such non-United States jurisdiction and the Company shall promptly reimburse Executive for all reasonable costs and expenses he incurs in attempting to receive authorization to legally work in such jurisdictions. All air travel by Executive shall be in accordance with Shire’s air travel policies for employees of Executive’s level, as may be in effect from time to time.

3.4.          Executive shall not, other than at the request of the Board, (a) voluntarily resign as a member of the Board or (b) take any action or fail to take any action that would result in him no longer being permitted to serve on the Board (whether by law or otherwise).

3.5          Executive hereby agrees that Executive is subject to, and shall comply at all times with, any and all policies adopted by Shire as in effect from time to time, including, without limitation, any Shire policy on malus and clawback and share ownership guidelines. Any variable remuneration awarded to the Executive may be subject to clawback in accordance with Shire’s policies from time to time, the specific terms of any applicable bonus or incentive plans and/or the terms of any relevant awards.  Clawback may be effected by withholding or off-setting against any payments or awards to which the Executive may become entitled in connection with Executive’s employment with the Company or alternatively by the Executive making a cash repayment to the Company or transferring shares to the Company. By entering into this Agreement, the Executive agrees to the operation of such withholding, off-setting, repayment or transfer.

4          Compensation and Benefits.

4.1       Base Salary. During the Employment Period, Executive shall be paid an annual base salary of $575,000 in accordance with the normal payroll practices of the Company (as may be in effect from time to time). Executive’s base salary, as it may be in effect from time to time, is referred to herein as the “Base Salary.” The Base Salary shall be inclusive of any directors’ fees payable to Executive under the Articles of Association or other governing documents of Shire plc, the Company or any Affiliated Company (and any such fees as the Executive shall receive shall be paid by him to the Company promptly upon receipt thereof). Such Base Salary shall also be inclusive of an annual amount payable in respect of Board duties performed by Executive in the Republic of Ireland (the “Irish Board Fee”), which is currently £98,000. Executive’s Base Salary shall be reviewed annually (commencing with the 2015 year-end performance and reward process) and may be increased at the sole discretion of the Remuneration Committee of Shire plc (the “Remuneration Committee”). All amounts set forth herein are in U.S. dollars (except with respect to the Irish Board Fee).

4.2        Executive Annual Incentive Plan. During the Employment Period, Executive shall be eligible to earn a bonus in accordance with the rules and terms of Shire’s Executive Annual Incentive Plan or such other bonus plan as Shire may determine (“Incentive Plan”). Commencing with the bonus period starting January 1, 2015, such bonus, if any, shall be subject to a target bonus level as determined in the sole discretion of the Remuneration Committee (which, for the 2015 fiscal year, shall be equal to eighty percent (80%) of Executive’s Base Salary), subject to adjustment by the Remuneration Committee (with seventy-five percent (75%) payable in cash and twenty-five percent (25%) payable in deferred shares). Any actual bonus payable on an annual basis or for such other period as may be deemed appropriate shall be determined at the sole discretion of the Remuneration Committee and, commencing with the bonus period starting January 1, 2015, shall be subject to a maximum bonus opportunity as determined in the sole discretion of the Remuneration Committee (which, for the 2015 fiscal year, shall equal one-hundred and sixty percent (160%) of Executive’s Base Salary), subject to adjustment by the Remuneration Committee (with seventy-five percent (75%) of the maximum award payable in cash and twenty-five percent (25%) of

the maximum award payable in deferred shares). Any cash bonus earned under the Incentive Plan shall be paid by no later than March 15^th of the year following the year in which such bonus was earned and any non-cash bonus earned under the Incentive Plan shall be paid in accordance with the terms of the Incentive Plan. All bonus payments shall be subject to tax and other withholdings and deductions as appropriate. Any bonus paid in deferred shares shall be subject to any malus and clawback policy as in effect from time to time. If the deferral arrangement described in this Section 4.2 is not permitted with respect to the 2015 calendar year, the Company shall implement an alternative bonus structure for such calendar year designed to restrict Executive’s transfer of any shares received in respect of the 2015 annual bonus in the same manner as if the deferral was permitted.

4.3        Indebtedness. If Executive is indebted to Shire for any reason, Shire may make a deduction from Executive’s Base Salary or from any other amount owed to Executive by Shire to satisfy all or a portion of such obligation.

4.4       Equity Grants. During the Employment Period, commencing with the fiscal year beginning January 1, 2015, Executive will be eligible for performance-based equity-based incentive awards (“Shire Equity Award”) that may be granted to Executive at such times, in such amounts and to the extent the Remuneration Committee may determine in its sole discretion. If Executive is at any time granted a Shire Equity Award, such Shire Equity Award will be subject to the rules of the relevant plan or such other applicable regulations as are established by the Remuneration Committee (including without limitation performance conditions and Shire’s clawback and malus policies).  If Executive’s employment should terminate for any reason, Executive’s rights in relation to any Shire Equity Award shall be entirely governed by the terms of the relevant plan (or such regulations established by the Remuneration Committee) and Executive shall not be entitled to any compensation under this Agreement for the loss of any right or benefit or any prospective right or benefit in relation to any cancelled or forfeited Shire Equity Award, whether such compensation is claimed by way of damages for unlawful dismissal, breach of contract or any other claim, including without limitation, claims arising out of Executive’s employment with Shire or the termination of such employment.

4.5        Expenses. The Company shall reimburse Executive for all reasonable business expenses which Executive is authorized to incur while carrying out Executive’s duties under this Agreement, provided the applicable claims procedure is followed and invoices or other evidence of payment is produced. So long as Executive serves as an Executive Director, Executive shall be subject to any expense reimbursement policy applicable to Executive Directors as in effect from time to time. All reimbursements which are subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), shall be paid to Executive as soon as practicable after submission of the required documentation, but no later than December 31^st of the year following the year during which such expense was incurred.

4.6        Company Car and Benefits. During the Employment Period, Executive shall be eligible to participate in the Company’s employee benefit plans (including any executive-level plans, such as financial planning) in accordance with the terms and conditions of such plans, as may be amended by the Company in its sole discretion from time to time. During the Employment Period, Executive shall be provided with a cash benefit of $1,200 per calendar month, representing the cash alternative to providing Executive with a company car. This amount shall be paid ratably every pay period with

Executive’s Base Salary and will be subject to applicable tax and other withholdings and deductions as appropriate.

4.7        Retirement Benefits. During the Employment Period, the Company shall contribute on Executive’s behalf an amount to the Company’s 401(k) Plan (through matching contributions) and/or the Shire Group Supplemental Executive Retirement Plan (the “SERP”), or into such other equivalent arrangement under the Company’s policies on retirement plans based on the rate of contribution then in effect for Executive’s position under the Company’s applicable policies (currently 25% of Base Salary); provided that the maximum amount of such contribution that may be allocated to the Company’s 401(k) Plan through matching contributions shall be so allocated to the 401(k) Plan first, with the remainder of such contribution being allocated to the SERP. SERP contributions shall be made on a quarterly basis and are subject to Executive’s employment with Shire on the date of the contribution. In addition, the maximum contribution is currently contingent upon Executive’s participation in the Company’s 401(k) Plan at a minimum personal contribution level of 3%. The provisions of this Section 4.7 shall in all events be subject to the terms of the Company’s 401(k) Plan, the SERP and the Company’s policies on retirement plans, which the Company may change from time to time in its sole discretion with or without notice, and shall be superseded by such plans and policies to the extent inconsistent.

4.8      Vacation. During the Employment Period, Executive shall be entitled to paid vacation of 25 days per annum in accordance with the Company’s vacation policy, or such greater number as may be provided by the Company with the approval of the Remuneration Committee, exclusive of national and customary holidays recognized by the Company. The vacation year is from January 1^st to December 31^st and up to 5 unused vacation days may be carried forward into the succeeding vacation year (any unused vacation days at the end of a year in excess of 5 shall, to the extent permitted by applicable state law, be forfeited with no compensation due Executive); and if vacation days carried forward into the succeeding vacation year are not used by December 31^st of that year, those vacation days shall be forfeited to the extent permissible under applicable state law with no compensation due Executive. Entitlement to vacation pay in the first and last year of employment will be calculated pro rata by reference to the number of completed months worked in that year. On termination of employment, a payment will be made by the Company or refunded by Executive (as appropriate) depending on whether vacation entitlement has been unused or exceeded. This Section 4.8 is subject to the Company’s vacation policy as in effect from time to time and shall be superseded by such vacation policy to the extent inconsistent.

5        Intellectual Property

5.1     Definitions.

(a)      “Intellectual Property Rights” or “IPRs” means all intellectual and industrial property rights, in any jurisdiction, whether registered or unregistered, including without limitation all rights in patents, trade secrets and know-how, trade and service marks, copyrights (including copyrights in software), and database rights, and all rights or forms of protection of a similar nature or having equivalent or similar effect to any of these, including claims and causes of action under any of the foregoing which may subsist anywhere in the world.

(b)      “Work” or “Works” means inventions, discoveries, designs, developments, improvements, formulas, ideas, processes, techniques, technical data, hardware configurations, software (including without limitation source code and object code), specifications, spreadsheets, data, databases, analytics, algorithms, methods or methodologies, systems, concepts, technology, trademarks, service marks, logos, work product, trade secrets, know-how, documentation, any other financial, technical or business material or information, Confidential Information, and modifications, updates to and derivatives of the foregoing, in each case whether or not patentable, copyrightable or susceptible to other forms of protection and in any medium, and all claims and causes of action arising thereunder anywhere in the world.

5.2     If during the period of Executive’s employment with Shire, Executive creates, makes, authors, originates, conceives, writes or reduces to practice (either alone or with others) any Work(s), including any IPRs in and to the foregoing, irrespective of whether it or they are related to Shire (collectively and including, for the avoidance of doubt, any IPRs in and to such Work(s), “Company Works”):
 

(a) Executive will promptly disclose to the Company the full details of any and all Company Works;

(b) Executive agrees and acknowledges that all Company Works are and shall be the sole and exclusive property of the Company and shall legally and beneficially vest solely in the Company immediately upon their creation, without any further consideration to Executive (and all such rights are hereby assigned to the Company);

(c) Executive agrees and acknowledges that all Company Works are “works made for hire,” as that term is defined in the United States Copyright Act, with the Company being the entity for which such work was performed;

(d) Executive hereby irrevocably and unconditionally waives, in favor of Shire, its licensees, and successors-in-title, any and all moral and similar rights conferred on Executive in relation to Company Works (whether now existing or in the future); and

(e) Executive shall not knowingly do anything, or omit to do anything, to imperil the validity of any Company Works.

5.3      To the extent any Company Works and/or IPRs do not so vest in the Company, Executive hereby presently assigns to the Company all of Executive’s right, title and interest in and to any and all Company Works, including without limitation, all IPRs therein in any jurisdiction.

5.4      Executive hereby irrevocably authorizes the Company or its nominee to be Executive’s attorney, and to make use of Executive’s name and to sign and execute any documents and/or perform any act on Executive’s behalf, for the purpose of giving to the Company the full benefit of the provisions of this Section 5 and, where permissible, to obtain patent or any other protection in respect of any of the Company Works in the name of the Company or its nominee.

5.5      Executive shall from time to time, both during the Employment Period and thereafter, at the request and expense of the Company or its nominee, promptly do all things and execute all documents necessary or desirable to give effect to the provisions of this Section 5, including, without limitation, all things necessary to obtain, maintain and/or enforce patent or any other protection with respect to any Company Work in any

part of the world and to vest such rights (including, without limitation, all IPRs) in and to the Company Works in the Company or its nominee.

5.6      For the avoidance of doubt, the provisions of this Section 5 shall apply to any rights (including, without limitation, any IPRs) in the Company Works arising in any jurisdiction, and the provisions of this Section 5 shall apply in respect of any jurisdiction to the extent permitted by the directives, statutes, regulations and other laws of any such jurisdiction.

5.7      Maintenance of Records. Executive will keep and maintain adequate and current written records of all Company Works created, made, authored, originated, conceived, written or reduced to practice by Executive (either alone or with others), during the period of Executive’s employment with Shire. The records will be in the form of notes, sketches, drawings and any other format that may be specified by the Company. The records will be available to and remain the sole property of the Company at all times.

5.8      Excluded Works. Notwithstanding this Section 5 of this Agreement, Company Works shall not include, and Executive’s obligations with respect thereto shall not apply to, any Works about which Executive proves with written evidence all of the following:

(a) the Work was developed entirely by Executive without materially interfering with Executive’s duties for the Company (i.e., outside of working hours and not within the scope of the Executive’s employment);

(b) no Confidential Information (as defined below), Works of Company or resources, equipment, supplies, assets, personnel or facility of Shire was used in the development or creation of the Work;

(c) the Work does not relate to the business of Shire or to the reasonably anticipated future business of Shire; and

(d) the Work does not result from any work performed by Executive for Shire.

5.9      Executive shall not use, incorporate or reference any Work owned in whole or in part by Executive and made prior to the Employment Period (“Prior Work”) or any IPRs owned by any third party (“Third Party Work”) in connection with the creation of any Company Works, except with the prior written consent of the Company. If, notwithstanding the foregoing, in the course of the creation of any Company Work Executive uses any Prior Work or Third Party Work, Executive shall have or secure rights sufficient to grant, and Executive hereby grants to the Company a perpetual, nonexclusive, royalty-free, fully paid-up, irrevocable, transferable, sublicensable, worldwide license to reproduce, make derivative works of, distribute, perform, display, import, make, have made, modify, use, sell, offer to sell, and exploit in any other way such Prior Work or Third Party Work as part of or in connection with any product, process or service, and to practice any method related thereto, as necessary to use and exploit any applicable Company Works or Works of Company. Executive represents and warrants that use of any such Prior Work or Third Party Work will not violate any proprietary rights of third parties and Executive shall indemnify and hold Shire harmless from and against any liability, cost and expense (including reasonable attorneys’ fees) arising out of any such third party claims. Executive attaches hereto a complete list of all Prior Works, and those Prior Works are excluded from this Agreement. If no such list is attached, then there are no such Prior Works.

5.10     Executive acknowledges and agrees that the compensation paid by Company is adequate consideration for the terms and conditions set forth in this Section 5. For the avoidance of doubt, the obligations of Executive under this Section 5 shall operate during the course of Executive’s employment, shall survive cessation of such employment and shall continue indefinitely thereafter.

6         Confidentiality; Certain Representations; Cooperation

6.1      Definitions. Confidential Information is any information, idea or material:

(a) generated, collected by or used in the operations of Shire that relates to the actual or anticipated business or research and development of Shire and that has not been made available generally to the public by Shire, or

(b) suggested by or resulting from any task or responsibility assigned to Executive or work performed by Executive for Shire, or known to Executive as a consequence of Executive’s employment with Shire, and that has not been made available generally to the public by Shire.

Confidential Information includes, but is not limited to, information relating to the business of Shire, including information relating to its suppliers, customers, personnel, commercial and scientific data, strategic plans, IPRs, profits, markets, sales, budgets, pricing policies, accounting, finance, products, product development, marketing strategies, operational methods, technical processes, research and development techniques, strategic plans, formulas, Work (as defined above in Section 5.1), discoveries, research, patent applications, business forecasts, agreements, personnel files and other business affairs and methods not generally available to the public and including anything that constitutes a trade secret within the meaning of the Pennsylvania Uniform Trade Secret Act or other applicable law. Information shall not be, or shall cease to be, Confidential Information if it is or becomes public general knowledge, other than through any direct or indirect unauthorized disclosure or other breach of the restrictions in Section 6 on the part of Executive.

6.2      All Confidential Information acquired or generated by Executive in connection with Executive’s employment with Shire (whether written, oral or in any other medium) shall be the sole property of Shire, shall be used by Executive only as required in the performance of Executive’s duties and shall be returned to the Company on request or on termination of Executive’s employment.

6.3      Executive will use his best efforts to protect the confidentiality of Shire’s Confidential Information and shall keep the Confidential Information secret. Except as required in the performance of Executive’s duties for Shire, Executive will not, without the Board’s express written permission, directly or indirectly, disclose Confidential Information to anyone outside Shire or use Confidential Information in other than Shire’s business, either during or after Executive’s employment by Shire; provided, however, that nothing in this Agreement or otherwise shall restrict Executive from disclosing Confidential Information (i) as required by law (provided that, prior to such disclosure, Executive shall, if permitted by law, provide the Company with prompt written notice of his requirement to disclose such information and shall work with the Company (at the Company’s expense) to limit the disclosure so required and to otherwise protect the confidentiality of such information) or (ii) solely to the limited extent necessary in

connection with the defense or prosecution of any claim against the Company or its affiliates.

6.4      Executive acknowledges that Shire may receive from others their confidential information, subject to a duty on Shire’s part to maintain the confidentiality of such information. During and after Executive’s employment with Shire, Executive will not, directly or indirectly, disclose such confidential information to anyone outside Shire or use such information for any purpose other than as is both required in the performance of Executive’s duties for Shire and in a manner as is consistent with Shire’s duty to maintain the confidentiality of such information; provided, however, that nothing in this Agreement or otherwise shall restrict Executive from disclosing such information (i) as required by law (provided that, prior to such disclosure, Executive shall, if permitted by law, provide the Company with prompt written notice of his requirement to disclose such information and shall work with the Company (at the Company’s expense) to limit the disclosure so required and to otherwise protect the confidentiality of such information) or (ii) solely to the limited extent necessary in connection with the defense or prosecution of any claim against the Company or its affiliates.

6.5      Executive represents and warrants that Executive’s employment with Shire does not and will not breach any agreement with or duty owed to any of Executive’s former employers or otherwise. Executive will not disclose to Shire and will not use or induce Shire to use any proprietary, confidential or trade secret information of others, including, but not limited to, former employers. Executive represents and warrants that Executive has returned all property and confidential information belonging to all Executive’s prior employers.

6.6      During the Employment Period and at all times thereafter, Executive agrees to cooperate fully with Shire in any internal investigation, any administrative, regulatory or judicial proceeding or any dispute with a third party concerning issues of which Executive has any knowledge or that may relate to Executive or Executive’s employment or other service with Shire (or the termination thereof).  Executive’s cooperation may include but is not limited to being available to Shire upon reasonable notice for interviews and factual investigations, appearing at Shire’s request to give testimony without requiring service of a subpoena or other legal process, volunteering to Shire all pertinent information, and turning over to Shire all relevant documents which are or may come into Executive’s possession or under Executive’s control.

7         Executive’s Restrictive Covenants

7.1      Executive acknowledges that during the course of Executive’s employment with Shire, Executive will receive and have access to Confidential Information and Executive will also receive and have access to detailed employee data and information relating to the operations and business of Shire and accordingly, Executive is willing to enter into the covenants described in this Section 7 in order to provide Shire with what Executive considers to be reasonable protection for those interests.

7.2      Executive covenants and agrees that during the Employment Period and for a period of one year following the date on which the Notice of Termination is provided (which period shall be inclusive of the Notice Period (as defined in Section 9.1 below)) (collectively, the “Restricted Period”), regardless of whether the termination is initiated by Executive or Shire, Executive will not, directly or indirectly, engage in any

business or activity or render service, whether as principal, agent, officer, director, employee, consultant or otherwise, with or to any person, business, corporation or other entity that engages in the research, development, production, licensing, marketing, sale or supply of any product or service that is similar in kind, type or purpose to any product or service offered in or under development by Shire at any time during Executive’s last 12 months of active employment with Shire (“Restricted Business”); provided however, that this Section 7.2 shall not prohibit Executive from acquiring, solely as an investment and through open market purchases, securities of any entity which are publicly traded, so long as Executive is not part of any control group of such entity, and such securities do not constitute more than five percent (5%) of the outstanding voting power of that entity.

7.3      During the Restricted Period, regardless of whether the termination is initiated by Executive or Shire, Executive will not, directly or indirectly, solicit, divert, or attempt to solicit or divert, or accept Restricted Business from, any customer or account, or prospective customer or account, of Shire with whom Executive or those employees who reported, directly or indirectly, to Executive had contact at any time during the last 12 months of Executive’s active employment with Shire.
 

7.4      During the Restricted Period, regardless of whether the termination is initiated by Executive or Shire, Executive will not, directly or indirectly, solicit, or assist or encourage the solicitation of, any employee of Shire to work for Executive or for any entity with which Executive may become employed or affiliated, without the prior written consent of the Board. The term “solicit” shall mean Executive’s contacting, or providing information to others who may be reasonably expected to contact, any employee of Shire regarding such employee’s interest in seeking employment with Executive or any entity with which Executive may become employed or affiliated.

7.5      During the Restricted Period, regardless of whether the termination is initiated by Executive or Shire, Executive shall not, directly or indirectly, employ, and shall not cause any entity that Executive controls to employ, any person who is a full-time employee of Shire, or who was a full-time employee of Shire as of the date of the termination of Executive’s employment or within twelve (12) months prior thereto, without the prior written consent of the Board.

7.6      Executive will not, during Executive’s employment with Shire or at any time thereafter, directly (or through any other person or entity) make any public or private statements (whether orally or in writing) that disparage, denigrate or malign the Company, Shire plc, any Affiliated Company or any of their respective businesses, activities, operations, affairs, reputations, prospects, officers, employees or directors. For purposes of clarification, and not limitation, a statement shall be deemed to disparage, denigrate or malign a person or entity if such statement could be reasonably construed to adversely affect the opinion any other person may have or form of any such person or entity. The foregoing limitations shall not be violated by truthful statements in response to legal process, required governmental testimony or filings, or administrative or arbitral proceedings (including, without limitation, depositions in connection with such proceedings).

7.7      Executive hereby agrees that Executive will at the request of the Company enter into a direct agreement or undertaking with Shire plc or any Affiliated Company containing restrictions and provisions corresponding to the restrictions and

provisions in this Section 7 (or such portion thereof as may be appropriate in the circumstances) as Shire plc or any such Affiliated Company (as applicable) may reasonably require for the protection of its legitimate business interests.

7.8      Section 7.2 shall not restrain Executive from being engaged or concerned in any business activity in so far as Executive’s duties or work shall relate solely:

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

(b) to services or activities of a kind with which Executive was not concerned to a material extent during the last 12 months of Executive’s active employment with Shire.

8         Remedies. Executive acknowledges and agrees that the restrictions and covenants outlined in Sections 5, 6 and 7 are reasonable and necessary protections of the immediate interests of Shire, and that Shire would not have employed Executive without receiving additional consideration offered by Executive in binding Executive to such restrictions and covenants. Executive agrees that no claim that Executive may have against Shire, whether predicated on this Agreement or otherwise, shall constitute a defense to the Company’s, Shire plc’s or any Affiliated Company’s enforcement of such restrictions and covenants. In addition to such other rights and remedies as the Company, Shire plc and each Affiliated Company may have at equity or in law with respect to any breach of this Agreement, Executive agrees that if Executive breaches (or threatens to breach) any of the provisions of Sections 5, 6 or 7, (x) the Company, Shire plc and each Affiliated Company shall have the right and remedy to have such provisions specifically enforced by any court having equity jurisdiction, and Executive acknowledges and agrees that any such breach or threatened breach will cause irreparable injury to Shire and that money damages will not provide an adequate remedy to Shire and (y) the Company’s obligation to provide any payments or benefits under Section 9 (other than the Accrued Benefits) shall immediately cease. If it shall be judicially determined that Executive has violated any of Executive’s obligations under Section 7 of this Agreement (other than obligations that apply in perpetuity), then the period of time applicable to the obligation which Executive shall have been determined to have violated shall automatically be extended by a period of time equal in length to the period during which said violation(s) occurred. It is expressly acknowledged and agreed that Shire plc and each Affiliated Company are third party beneficiaries of the provisions of Sections 5, 6, 7 and 8 hereof and may enforce the terms of such Sections as if Shire plc and each such Affiliated Company were a party hereto. Furthermore, the provisions of Section 5, 6 and 7 hereof are independent of any other restrictive covenants to which Executive may be bound in favor of Shire.

9         Termination.

9.1      Definitions. For purposes of this Agreement, the following terms shall have the respective meanings set forth below:

(a) “Cause” shall mean:

(i) the willful failure or refusal by Executive substantially to perform Executive’s duties and responsibilities hereunder (other than any such failure resulting from Executive’s incapacity due to Executive’s physical or mental illness) after written demand by the CEO identifying the nature of such failure or refusal;

(ii) Executive has engaged in conduct which brings or is likely to bring himself or Shire into disrepute;

(iii) the willful misconduct by Executive which is materially injurious to Shire, monetarily or otherwise, or which results or is intended to result in personal gain or enrichment at the expense of Shire; (provided that no act or failure to act shall be considered “willful” unless done, or omitted to be done, by him in bad faith and without reasonable belief that his action or omission was in the best interest of Shire);

(iv) Executive’s conviction of or plea of no contest to a felony, or to a crime involving moral turpitude;

(v) Executive’s material breach of the terms of this Agreement (including, without limitation, any breach of Section 3.4), provided that such breach, to the extent capable of cure, is not cured within 10 days after written notice describing such breach is provided to Executive by the Board or the CEO;

(vi) Executive’s unlawful discrimination, including harassment, against employees, customers or business associates of the Company, Shire plc or an Affiliated Company; or

(vii) Executive becoming disqualified from being a director of any of the Company, Shire plc or any Affiliated Company.

(b) Date of Termination. “Date of Termination” or “Termination Date” shall mean:

(i) In the event Executive’s employment is terminated by Executive’s death, the date of Executive’s death;

(ii) If Executive’s employment is terminated by Shire by reason of Executive’s Permanent Disability, the date that is thirty (30) days following the date the Board provides Executive with a notice of termination in accordance with Section 11.6 hereof (a “Notice of Termination”);

(iii) If Executive’s employment is terminated by Shire without Cause, the date that is twelve (12) months following the date the Board provides Executive with a Notice of Termination;

(iv) If Executive’s employment is terminated by Executive for any reason (including retirement in accordance with Shire’s policy applicable to executive directors (as determined by the Board in its sole discretion)), the date that is twelve (12) months following the date Executive provides the Board with a Notice of Termination;

(v) If Executive’s employment is terminated by Shire for Cause, the date on which the Notice of Termination is provided to Executive.

For all purposes of this Agreement, the time between the Notice of Termination and the Date of Termination, if any, shall constitute the “Notice Period.” In the case of Executive’s termination as a result of Executive’s death or as a result of a termination for Cause, there shall not be a Notice Period.

(c) “Permanent Disability” shall mean any physical or mental ailment or incapacity as determined by a licensed physician agreed to by the Board

and Executive (or Executive’s legal representatives) (or, in the event that Executive and the Board cannot so agree, by a licensed physician agreed upon by two physicians, one selected by Executive (or Executive’s legal representatives) and the other selected by the Board), which prevents Executive from performing the duties incident to Executive’s employment hereunder and which ailment or incapacity has continued for a period of either (A) ninety (90) consecutive days or (B) one hundred eighty (180) total days in any 12-month period, and which, in each case, is expected to render Executive incapable of performing Executive’s duties hereunder for not less than one (1) year, provided, however, in no event shall Executive have incurred a Permanent Disability hereunder unless he is eligible to receive disability benefits pursuant to the Company’s long-term disability plan. Without limiting the foregoing, for purposes of determining whether Permanent Disability exists, Executive agrees to submit himself to a medical examination at the Company’s request.

9.2      Notice Period; Notice of Termination. During the Notice Period, the Executive shall remain employed by Shire and the Executive’s relationship with Shire shall continue to be governed by the terms of this Agreement (subject to the Board’s right to accelerate the date of the Executive’s termination of employment in accordance with Section 9.3 hereof); provided, however, that during the Notice Period (i) the Board may require the Executive to perform such services as it, in good faith, deems appropriate, provided that such services are consistent with Executive’s education, skill, and experience, (ii) the Board may remove some or all of Executive’s duties and responsibilities including, without limitation, as Chief Financial Officer of Shire plc (provided, however, that, unless otherwise requested by the Board, Executive shall continue to perform his duties and responsibilities as an employee of the Company, whether express or implied, during the entire Notice Period), (iii) the Board may exclude the Executive from any premises of the Company, Shire plc and any Affiliated Company (and need not give any reason for doing so), (iv) the Executive shall conduct himself with good faith towards Shire and not intentionally do anything that is harmful to Shire, (v) the Executive may not directly or indirectly be employed by or retained by or advise or assist any other person or entity in any capacity either paid or unpaid (except Board approved non-executive positions and such other activities as are permitted under Section 3.2 hereof) and (vi) the Board may require the Executive to resign from any positions he holds with the Company, Shire plc and any Affiliated Company (including director) and Executive shall resign as soon as reasonably practicable thereafter (Executive hereby irrevocably appoints the Board or its designee to execute any instrument on his behalf to effect such resignation if he fails to comply with the Board’s request to so resign). The Executive acknowledges that any action taken by the Board pursuant to this Section shall not be a breach of this Agreement and the Executive shall have no claim against the Company, Shire plc or any Affiliated Company for the same. Notwithstanding the foregoing, Executive shall be entitled to participate in the Company’s benefit plans during the Notice Period only if permitted under the terms of such plans (provided that if Executive is not permitted to participate in any health or welfare plan, the Company shall pay Executive a monthly amount during the Notice Period equal to the premiums paid by the Company for the benefit of Executive for coverage under such plan immediately prior to the date on which the Notice of Termination was provided). Any termination of Executive’s employment shall be communicated by a written Notice of Termination. Executive acknowledges and agrees that upon his termination of employment with the Company for any reason, he shall cease to have any employment, officer, director or

other positions with Shire plc, the Company or any Affiliated Company (and his sole compensation for such termination shall be as set forth in Section 9.3).

9.3       Compensation Upon Termination.

(a) General. Upon termination of Executive’s employment, Executive shall be entitled to receive all compensation, vested benefits and other payments which were earned and vested but unpaid at the time of Executive’s termination of employment in accordance with the terms of the applicable benefit plans in which Executive is then participating (the “Accrued Benefits”). In the event of Executive’s death, the Accrued Benefits shall be paid to Executive’s estate, designated beneficiary or personal representative, as applicable.

(b) Pay in Lieu of Notice. Notwithstanding anything contained herein to the contrary, following the delivery of a Notice of Termination by either party, the Board may, in its sole discretion, accelerate the Date of Termination to a date that is earlier than the date specified in Section 9.1(b) above (including to the date on which a Notice of Termination is provided). In such an event, the Company shall provide Executive with the following payments and benefits: (A) an amount equal to the Base Salary the Executive would have received through the last day of the Notice Period, with such amount to be paid in substantially equal installments in accordance with the Company’s normal payroll practices commencing with the payroll date coincident with or next following the 90^th day following such termination of employment and ending on the last payroll date on or before the last day of the year in which the 90^th day following Executive’s termination of employment occurs (or if the payment end date would precede the payment beginning date, all such payments will be made in a lump sum on the payroll date coincident with or next following the 90^th day following such termination of employment); (B) an amount, to be decided at the absolute discretion of the Remuneration Committee, which may be anywhere from zero up to the target annual bonus under the Incentive Plan, to which the Executive would have been entitled pursuant to Section 4.2 for the bonus year in which the Notice Period terminates (based on the Executive’s Base Salary at the date on which his employment terminated and pro-rated based on the number of unserved months in the Notice Period in relation to 12), with the cash portion of such bonus to be paid in substantially equal installments in accordance with the Company’s normal payroll practices commencing with the payroll date coincident with or next following the 90^th day following such termination of employment and ending on the last payroll date on or before the last day of the year in which the 90^th day following Executive’s termination of employment occurs (or if the payment end date would precede the payment beginning date, all such payments will be made in a lump sum on the payroll date coincident with or next following the 90^th day following such termination of employment), and with the non-cash portion of such bonus to be paid at the same time as if Executive’s employment had not terminated (provided that, with respect to the 2015 calendar year, any such bonus paid shall not exceed the amount of the bonus that would have been earned under Section 4.2 based on actual

performance); (C) an amount equal to the SERP contributions that Executive would have received during the remainder of the Notice Period, with such amount to be paid in a lump sum on the 90^th day after the date of Executive’s termination of employment; (D) monthly car allowance payments for the remainder of the Notice Period, with such amount to be paid in substantially equal installments in accordance with the Company’s normal payroll practices commencing with the payroll date coincident with or next following the 90^th day following such termination of employment and ending on the last payroll date on or before the last day of the year in which the 90^th day following Executive’s termination of employment occurs (or if the payment end date would precede the payment beginning date, all such payments will be made in a lump sum on the payroll date coincident with or next following the 90^th day following such termination of employment); and (E) continued participation in the Company’s medical and dental benefit plans (to the extent permitted by such plans) for the remainder of the Notice Period (provided that if Executive is not permitted to participate in such plans, the Company shall pay Executive a monthly amount during the remainder of the Notice Period equal to the premiums paid by the Executive for coverage under such plans as of immediately prior to the date of Executive’s termination).

(c) Mitigation and Offset. If the Executive obtains an alternative remunerated position (as defined below) during the unworked portion of the Notice Period, then the payments described in clauses (A), (B), (C) and (D) of Section 9.3(b) shall be reduced by the basic remuneration to which the Executive is entitled from the alternative remunerated position during such unworked portion of the Notice Period (or in the event that Executive already received such payments under such clauses, Executive shall be required to repay the gross amount of the required reduction to the Company within 10 days after receipt of such basic remuneration from the alternative remunerated position). The reduction shall apply first to the payments in clause (A), then clause (B), then clause (D) and then clause (C). In addition, the benefit described in clause (E) of Section 9.3(b) shall immediately cease if Executive becomes entitled to health coverage from an alternative remunerated position. For the purposes of calculating the amount of the deduction in respect of remuneration from the alternative remunerated position, any basic salary or fees shall be included, together with the value of any pension provided, but not any entitlement to bonus or the value of any equity or equity-based incentive arrangements. The value of any entitlement to pension shall be calculated as the amount which the new employer contributes to a pension scheme on the Executive’s behalf (in the case of a defined benefit arrangement, being the long term contribution rate, ignoring any adjustment to reflect an overall deficit or surplus in the scheme). For the purposes of this Agreement, “alternative remunerated position” shall mean any new position, whether under a contract of employment, consultancy arrangement, non executive appointment or otherwise, whereby the Executive is directly or indirectly remunerated. Executive shall immediately notify the Company in the event that he obtains an alternative remunerated position during the unworked portion of the Notice Period.

(d) Equity Awards. Executive’s rights under his Shire Equity Awards will be determined in accordance with the rules of the relevant scheme.

(e) Override. Notwithstanding anything contained in this Agreement to the contrary, if either party hereto has provided a Notice of Termination to the other party, then Executive’s employment shall be deemed to terminate (if not terminated earlier) on the date on which he incurs a “separation from service” under Code Section 409A, even if the Company has not exercised its authority under Section 9.3(b) above to accelerate the date of Executive’s termination of employment. In such event, it shall be treated as if the Company had elected to terminate Executive’s employment on the date on which such separation from service occurs for purposes of Code Section 409A and Executive shall be entitled to receive the payments and benefits set forth in, and in accordance with, Section 9.3(b) above (and Executive shall not be entitled to receive any additional payments or benefits from Shire in respect of his employment or termination of employment, other than the Accrued Benefits).

9.4      Release of Shire. As a condition to the Company’s provision of the payments and benefits described in Section 9.3(b) (other than the Accrued Benefits), Executive shall execute and deliver to the Company a General Release in form and substance satisfactory to the Company such that such General Release is effective (with all revocation periods having expired unexercised) by the 60^th day following Executive’s termination of employment.

9.5      Specified Employee. Notwithstanding any other provision of this Agreement, if (a) Executive becomes entitled to receive payments or benefits under this Agreement or otherwise as a result of Executive’s separation from service (within the meaning of Code Section 409A), (b) Executive is a “specified employee” within the meaning of Code Section 409A and (c) such payments or benefits would be subject to tax under Code Section 409A if the payments or benefits are paid within six (6) months after Executive’s separation from service, then any such payments or benefits that are otherwise scheduled to be paid during such six (6) month period shall be delayed for a period of six (6) months after Executive’s separation from service, as required by Code Section 409A. The accumulated delayed amount shall be paid, without interest, in a lump sum payment within ten (10) days after the end of such six (6) month period (the “Delayed Payment Date”). In the event of Executive’s death prior to the Delayed Payment Date, the payments and benefits delayed on account of Code Section 409A shall be paid to Executive’s personal representative within thirty (30) days after the date of Executive’s death.

9.6      Parachute Payment. In the event that (i) Executive becomes entitled to any payments or benefits hereunder or otherwise from the Company, Shire plc or any Affiliated Company which constitute a “parachute payment” as defined in Code Section 280G (the “Total Payments”) and (ii) Executive is subject to an excise tax imposed under Code Section 4999 (the “Excise Tax”), then, if it would be economically advantageous for Executive, the Total Payments shall be reduced by an amount that results in the receipt by Executive on an after tax basis (including the applicable federal, state and local income taxes, and the Excise Tax) of the greatest Total Payment, notwithstanding that some or all of the portion of the Total Payment may be subject to the Excise Tax.

Any such reduction in payments and benefits shall be applied first against the latest scheduled cash payments; then current cash payments; then any equity or equity derivatives that are included under Section 280G of the Code at full value rather than accelerated value (with the highest value reduced first); then any equity or equity derivatives included under Section 280G of the Code at an accelerated value (and not at full value) shall be reduced with the highest value reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24); finally any other non-cash benefits will be reduced.

10      Data Protection. Executive consents to the Company, Shire plc and any Affiliated Company holding and processing both electronically and manually the data it collects which relates to Executive for the purposes of the administration and management of its employees and its business and for compliance with applicable procedures, laws and regulations. Executive also consents to the transfer of such personal information to other offices the Company may have or to Shire plc or an Affiliated Company or to other third parties whether or not outside the United States or the European Economic Area for administration purposes and other purposes in connection with Executive’s employment where it is necessary or desirable for the Company to do so.

11      Miscellaneous

11.1   409A Compliance. This Agreement is intended to comply with Code Section 409A (to the extent applicable) and the parties hereto agree to interpret this Agreement in the least restrictive manner necessary to comply therewith and without resulting in any increase in the amounts owed hereunder by the Company. Notwithstanding anything herein to the contrary, neither the Company, Shire plc nor any Affiliated Company shall have any liability to Executive or to any other person if the payments and benefits provided in this Agreement or otherwise are not exempt from or compliant with Code Section 409A. Executive’s right to reimbursement or in-kind benefits under this Agreement may not be liquidated or exchanged for any other benefit and no reimbursement under this Agreement may occur later than the last day of the calendar year immediately following the calendar year in which such expenses were incurred, nor shall the amount available for reimbursement, or in-kind benefits provided, during one year affect the amount available for reimbursement, or in-kind benefits to be provided, in any other year. In addition, the phrase “termination of employment” and similar phrases as used throughout the Agreement shall mean Executive’s “separation from service” within the meaning of Code Section 409A, and any amounts payable to Executive hereunder upon Executive’s termination of employment that are treated as “non-qualified deferred compensation” under Code Section 409A shall not be paid to Executive until Executive has incurred a separation from service within the meaning of Code Section 409A. To the extent that any schedule of notice or severance payments herein would violate Code Section 409A, such schedule shall not apply and any payments subject to such schedule shall be made pursuant to a schedule that complies with Code Section 409A (as reasonably determined by the Company).Each payment made under this Agreement shall be treated as a “separate payment” within the meaning of Code Section 409A.

11.2    Entire Agreement; Termination of Prior Employment Agreement; Counterparts; Withholding. This Agreement supersedes any and all prior or contemporaneous employment agreements, offer letters, term sheets or other agreements or other communications, in whatever medium, between the parties with

respect to the subject matter hereof (including, without limitation, the United States Executive Employment Agreement, dated as of November 1, 2010, between the Company and Executive, as amended by that certain offer letter agreement between the Company and Executive as of January 1, 2015 (the “Prior Employment Agreement”); provided, however, that Shire’s obligation to pay Executive a total incentive bonus of $120,000 in consideration for his service as Interim Chief Financial Officer in 2015 shall remain in full force and effect, with such payment to be made in accordance with the terms of the Prior Employment Agreement). This Agreement may be executed and delivered in separate counterparts (including by means of facsimile), each of which is deemed to be an original and all of which taken together constitute one and the same Agreement. All amounts payable hereunder will be subject to applicable tax and other withholdings and deductions as appropriate.

11.3     No Waiver; Amendment. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. This Agreement may be amended or modified only upon written agreement of the parties hereto.

11.4     Severability. If any provision of this Agreement is held to be invalid or unenforceable, it is to that extent to be deemed omitted; and the remainder of the Agreement shall be valid and enforceable to the maximum extent possible; provided, however, that should a court of competent jurisdiction conclude that any restriction in Section 5, 6 or 7 is unenforceable because it extends for too long a period of time or over too great a range of activities or in too broad a geographic area, then such restriction shall be enforced to the maximum extent permitted by law and the court making such determination shall have the power to modify such Section in order to conform it with applicable law.

11.5     Assignment. This Agreement shall not be assignable by Executive. The Company shall have the right to assign this Agreement, including Executive’s restrictive covenants in Section 7 hereof, to Shire plc or an Affiliated Company without Executive’s consent. In addition, in the event that Executive’s employment is transferred to Shire plc or an Affiliated Company (which Executive acknowledges the Company may do without Executive’s consent and such shall not result in a breach of this Agreement or give rise to severance or similar benefits), this Agreement may be assigned to Shire plc or such Affiliated Company, as applicable (in which case references herein to “Company” shall be deemed to be to Shire plc or such Affiliated Company, as applicable) or Executive may be required to execute an employment agreement with Shire plc or such Affiliated Company (as applicable) that is substantially the same as this Agreement (and this Agreement shall terminate without any liability to Executive upon such execution).

11.6     Notices. All notices, demands and other communications which are required to be given, served or sent pursuant to this Agreement shall be in writing and shall be delivered personally, or by facsimile or sent by air courier or first-class certified or registered mail, return receipt requested and postage prepaid, addressed as follows:

If to Executive:

Jeffrey V. Poulton

4 Palmer Ln 

Acton, Massachusetts 01720

If to Shire:

Shire 

Attention: EVP, Human Resources

300 Shire Way

Lexington, Massachusetts 02421

All notices and other communications given to any party in accordance with the provisions of this Agreement will be deemed to have been given on the date of delivery if personally delivered; upon confirmation of receipt if faxed; on the business day after the date which sent by air courier; and on the third business day after the date when sent if sent by first-class mail, in each case addressed to such party as provided in this Section 11.6 or in accordance with the latest unrevoked direction from such party.

11.7     Governing Law and Forum. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, without regard to its choice of laws provisions. The Company and Executive agree that any action at law, suit in equity, or judicial proceeding relating to the validity, construction, interpretation, and enforcement of this Agreement, or any provision hereof or otherwise relating to Executive’s employment with Shire, shall be instituted and determined exclusively in the United States District Court for the District of Massachusetts (if federal jurisdiction exists, or in the state courts located in Woburn, Massachusetts if federal jurisdiction does not exist), and the Company and Executive each hereby consents to the personal jurisdiction of such courts for such purpose.

11.8     Waiver of Jury Trial. The Company and Executive each hereby waive, to the fullest extent permitted by law, a trial by jury in any action, proceeding or counterclaim brought or asserted by either the Company or Executive against the other on any matters whatsoever arising out of this Agreement or Executive’s service with Shire or the termination thereof. By their initials following this sentence, the Company and Executive acknowledge that each has read, understands and consents to their waivers of a trial by jury.    /s/ JP   ,     /s/ FO    .

11.9.     Indemnification. Executive shall be entitled to indemnification under, and in accordance with, the terms of the Deed of Indemnity attached hereto as Exhibit A.

11.10    Consistency with directors’ remuneration policy and regulatory requirements. Nothing in this Agreement shall oblige the Company, Shire plc or any Affiliated Company or any other person or entity to issue or transfer any shares or make any payment (including any remuneration payment or payment for loss of office) which would be inconsistent with the approved directors’ remuneration policy of Shire and in breach of Chapter 4A of Part 10 of the Companies Act 2006.   Neither the Company, Shire plc nor any Affiliated Company will be obliged to seek the approval of any regulator or of its members in general meeting for any such payment but may make such changes as they consider are necessary or desirable to the terms of the payment to ensure that consistency.

* * * * *

IN WITNESSETH, WHEREOF, each of the Company and Executive have executed and delivered this Agreement, as of the date first written above.

SHIRE HUMAN GENETIC THEREAPIES, INC.

		JEFFREY V. POULTON
Sign:	/s/ Flemming Ornskov	Sign:	/s/ Jeffrey Poulton
Date:	May 6, 2015	Date:	April 29, 2015

Dated 29 April 2015

SHIRE PLC

and

JEFFREY V. POULTON

_____________________________________________

DIRECTOR’S INDEMNITY

_____________________________________________

EXHIBIT A

Deed of Indemnity

THIS AGREEMENT is made on April 29, 2015.

BETWEEN:

(1)        SHIRE PLC, a company incorporated in Jersey (registered number 99854) whose registered office is at 22 Grenville Street, St Helier, Jersey (the “Company”); and

(2)        JEFFREY V. POULTON, of 22 Grenville Street, St Helier, Jersey (the “Director”).

WHEREAS:

(A) The Director has been appointed an executive director of the Company with effect from April 29, 2015.

(B) The Company has agreed to indemnify the Director, and the Director has agreed to give certain undertakings to the Company, in each case on the terms of and subject to the conditions of this Agreement.

THIS AGREEMENT PROVIDES as follows:

1.         INTERPRETATION

1.1        In this Agreement:

(A) “Associated Company” means any Subsidiary of the Company, any holding company of the Company (if created) and any Subsidiary of that holding company (if created);

(B) “Companies Law” means the Companies (Jersey) Law 1991;

(C) “Subsidiary” means any subsidiary of the Company, as defined in the Companies Law;

(D) “Effective Date” means April 29, 2015

(E) references to Clauses and sub-clauses are to clauses and sub-clauses of this Agreement;

(F) use of any gender includes the other genders;

(G) a reference to any statute or statutory provision shall be construed as a reference to the same as it may have been, or may from time to time be, amended, modified or re-enacted; and

(H) headings and titles are inserted for convenience only and are to be ignored in the interpretation of this Agreement.

1.2 If there is any inconsistency between the provisions of this Agreement and the provisions of any contract of employment between the Director and the Company in effect on the Effective Date, the provisions of this Agreement shall prevail.

2. INDEMNITIES

2.1 Claims by Third Parties

Subject to Clauses 2.2, 2.5 and 2.6, the Company undertakes to indemnify the Director against any liability suffered or incurred by the Director on or after the Effective Date:

(A) in respect of the Director’s acts or omissions (whether on or after the Effective Date) while, or in the course of acting as, a director or employee of the Company or a director or employee of any Subsidiary; and/or

(B) which otherwise arise by virtue of the Director holding or having held such office;

in each case, to the extent arising out of or in connection with, directly or indirectly, any claim, action or proceedings brought against the Director or any other person by or on behalf of any third party (not being the Company or an Associated Company) in any jurisdiction in respect of any alleged loss, liability or damage actually or allegedly suffered by any third party, the Company or an Associated Company.

2.2 Scope of Indemnity for Claims by Third Parties

The indemnity in Clause 2.1 shall not apply to any liability incurred by the Director:

(A) to pay a fine imposed in criminal proceedings;

(B) to pay a sum payable to a regulatory authority by way of a penalty in respect of non-compliance with any requirement of a regulatory nature;

(C) in defending any criminal proceedings in which he is convicted;

(D) in connection with any application made under Article 212 of the Companies Law in connection with which the court refuses to grant him relief; and

(E) unless, in connection with the matters giving rise to the liability, the Director acted in good faith with a view to the best interests of the Company, or in connection

only with any liability incurred in defending civil proceedings (regardless of whether the Director has acted in good faith with a view to the best interests of the Company), judgment is given in favour of the Director.

2.3 Claims by or on behalf of the Company or an Associated Company

Subject to Clauses 2.4, 2.5 and 2.6, the Company undertakes to indemnify the Director from the Effective Date against any liability incurred by him as a director in defending any civil or criminal claim, action or proceedings which relate to anything done or omitted, or claimed to have been done or omitted, by him which are brought against the Director or any other person by or on behalf of the Company or an Associated Company.

2.4 Exclusions from Indemnity for Claims by or on behalf of the Company or an Associated Company

The indemnity in Clause 2.3 shall not apply to any liability:

(A) (for the avoidance of doubt) incurred by the Director to the Company or an Associated Company;

(B) incurred by the Director in defending any criminal proceedings in which he is convicted;

(C) incurred by the Director in defending any civil proceedings in which judgment is given against him; and

(D) incurred by the Director in connection with any application made under Article 212 of the Companies Law in which the court refuses to grant him relief.

2.5 Funding of Expenditure

(A) Subject to the provisions of this Agreement, the Company agrees to loan to the Director, on an interest free basis, such funds as may be required to meet any expenditure incurred or to be incurred by him, in defending any claim, action or proceedings falling within the scope of such claims, actions, or proceedings as are covered by the provisions of Clause 2.1 and 2.3.

(B) Subject to Clause 2.5(C) below, if the Company loans funds to the Director pursuant to Clause 2.5(A) then such loan shall become due and repayable upon any conviction of, judgment given against, or refusal of relief to, the Director becoming final or the claim, action, or proceeding otherwise being settled or terminating.

(C) In the event that the liability to which the loan relates can properly be discharged by way of indemnity in accordance with Clause 2, the obligation to repay such loan will be discharged by way of indemnity in accordance with this Clause 2.

(D) For purposes of this Clause 2.5(B), a conviction, judgment or refusal of relief becomes final:

(i) if not appealed against, at the end of the period for bringing an appeal; or

(ii) if appealed against, at the time when the appeal (or any further appeal) is determined and the period for bringing any further appeal has ended or if the appeal is abandoned or otherwise ceases to have effect.

2.6 Limitations on indemnity

Without prejudice to any other rights or remedies which may be available to the Director, the indemnity granted by the Company to the Director in either Clause 2.1 or Clause 2.3 shall not apply to the extent that it is not permitted by, or consistent with, law or statute from time to time in force (including, without limitation, the Companies Law), the memorandum and articles of the Company or the rules and regulations of any regulatory body.

3. Conduct of Claims and Access to Information

3.1 Without prejudice to the sub-clause 3.2, if the Director becomes aware of any claim, action or demand against him which could give rise to any claim, action or demand by him against the Company under Clause 2.1 (referred to herein as a “Third Party Claim”), the Director shall:

(A) within 20 days of becoming so aware, notify the Company in writing of the existence of such Third Party Claim, giving reasonable details in that notification (or, to the extent that such details are not available to the Director at that time, as soon as possible thereafter) of the person(s) making such Third Party Claim, the circumstances leading to, and the grounds for, that Third Party Claim and the quantum or possible quantum of the Third Party Claim;

(B) subject to the Company agreeing to pay the reasonable out-of-pocket expenses of the Director, give such access to premises, chattels, documents and records to the Company and its professional advisers as the Company may reasonably request;

(C) take such action and give such information and assistance in order to avoid, dispute, resist, mitigate, settle, compromise, defend or appeal any Third Party Claim or judgment or adjudication with respect thereto as the Company may reasonably request;

(D) at the request of the Company, allow the Company to take the sole conduct of such actions as the Company may deem appropriate in connection with any such Third Party Claim in the name of the Director and in that connection the Director shall give or cause to be given to the Company all such assistance as the

Company may reasonably require in avoiding, disputing, resisting, mitigating, settling, compromising, defending or appealing any such Third Party Claim and shall instruct such solicitors or other professional advisers as the Company may nominate to act on behalf of the Director in relation thereto but to act in accordance with the Company’s sole instructions;

(E) make no admission of liability, agreement, settlement or compromise with any person in relation to any such Third Party Claim without the prior written consent of the Company; and

(F) take all reasonable action to mitigate any loss suffered by him in respect of such Third Party Claim.

3.2 In any event, the Company shall be entitled at any stage and at its sole discretion to settle any Third Party Claim and shall be under no obligation in this respect to notify the Director of its decision so to settle such Third Party Claim.

3.3 If the Director intends to make a claim, action or demand against the Company under Clause 2.3 (referred to herein as a “Costs Claim”) the Director shall:

(A) promptly notify the Company in writing of his intention to make such a Costs Claim, giving reasonable details in that notification (or, to the extent that such details are not available to the Director at that time, as soon as possible thereafter) of the grounds for that Costs Claim and the quantum or possible quantum of the Costs Claim;

(B) subject to the Company agreeing to pay the reasonable out-of-pocket expenses of the Director, take such action and give such information and access to premises, chattels, documents and records to the Company and its professional advisers as the Company may reasonably request;

(C) take all reasonable action to mitigate any loss suffered by him in respect of such Costs Claim.

4. Notices

4.1 A notice under this Agreement shall only be effective if it is in writing. Faxes are permitted. E-mail is not permitted.

4.2 Notices under this Agreement shall be sent to a party at its address or number and, in the case of the Company, for the attention of the individual, set out below:

Party and title of individual	Address	Fax number
Company Attention: Global General Counsel	22 Grenville Street St Helier Jersey JE4 8PX	+44 (0) 1256 894710
With a copy to:	Hampshire International Business Park, Basingstoke, Hampshire RG24 8EP
Director	22 Grenville Street St Helier Jersey JE4 8PX	+44 (0) 1256 894710

4.3 Either party may change its notice details on giving notice to the other party of the change in accordance with this Clause. That notice shall only be effective on the date falling two Business Days after the notification has been received or on such later date as may be specified in the notice.

4.4 Subject to sub-clause 4.5 and without prejudice to sub-clause 4.6, any notice given under this Agreement shall not be effective until it is received by the intended recipient.

4.5 Any notice which is received by its intended recipient under this Agreement outside normal working hours in the place to which it is addressed shall be deemed to have been given at the start of the next period of normal working hours in such place.

4.6 No notice given under this Agreement may be withdrawn or revoked except by notice given in accordance with this Clause.

5. Remedies and Waivers

5.1 No delay or omission by either party to this Agreement in exercising any right, power or remedy provided by law or under this Agreement shall:

(A) affect that right, power or remedy; or

(B) operate as a waiver of it.

5.2 The single or partial exercise of any right, power or remedy provided by law or under this Agreement shall not preclude any other or further exercise of it or the exercise of any other right, power or remedy.

5.3 The rights, powers and remedies provided in this Agreement are cumulative and not exclusive of any rights, powers and remedies provided by law.

6. Invalidity

If at any time any provision of this Agreement is or becomes illegal, invalid or unenforceable in any respect under the law of any jurisdiction, that shall not affect or impair:

(A) the legality, validity or enforceability in that jurisdiction of any other provision of this Agreement; or

(B) the legality, validity or enforceability under the law of any other jurisdiction of that or any other provision of this Agreement.

7. No Partnership

Nothing in this Agreement and no action taken by the parties under this Agreement shall constitute a partnership, association, joint venture or other co-operative entity between the parties.

8. Entire Agreement

8.1 This Agreement, the Company’s Articles of Association and, subject to Clause 1.2, any provision of any employment contract under which the Director is, or is entitled to be, indemnified by the Company, constitute the whole and only agreement between the parties relating to the indemnification of the Director by the Company and the obligations of the parties in relation to Third Party Claims and Costs Claims.

8.2 This Agreement may only be varied in writing signed by each of the parties.

9. Assignment

9.1 The Company may at any time assign all or any part of the benefit of, or its rights or benefits under, this Agreement to any Subsidiary.

9.2 The Director shall not assign, or purport to assign, all or any part of the benefit of, or his rights or benefits under, this Agreement, provided that the benefit of, and rights under, this Agreement shall ensure to the benefit of, and be enforceable by, the successors, heirs and personal representatives of the Director.

10. Confidentiality

10.1 Subject to Clause 11.3, each party shall treat as confidential all information obtained as a result of entering into or performing this Agreement which relates to:

(A) the provisions of this Agreement;

(B) any negotiations relating to this Agreement;

(C) the subject matter of this Agreement; or

(D) the other party

(in each case referred to herein as “Confidential Information”).

10.2 Subject to Clause 11.3, each party shall:

(A) not disclose any Confidential Information to any person other than any of its professional advisers and, in the case of the Company, directors and employees and directors and employees of any Subsidiary who need to know such information in order to discharge their respective duties; and

(B) procure that any person to whom any Confidential Information is disclosed by it complies with the restrictions contained in this Clause as if such person were a party to this Agreement.

10.3 Notwithstanding the other provisions of this Clause, either party may disclose Confidential Information:

(A) if and to the extent required by law;

(B) in the case of the Company, if and to the extent required by any securities exchange or regulatory or governmental body to which the Company is subject or submits, wherever situated, including (amongst other bodies) the Stock Exchange, the Jersey Financial Services Commission, the Financial Services Authority or The Panel on Takeovers and Mergers, whether or not the requirement for information has the force of law;

(C) to its professional advisers, and, in the case of the Company, its auditors and bankers;

(D) if and to the extent the Confidential Information has come into the public domain through no fault of that party; or

(E) if and to the extent the other party has given prior written consent to the disclosure, such consent not to be unreasonably withheld or delayed.

Any Confidential Information to be disclosed by either party pursuant to paragraph (A), (B), (C) or (D) shall be disclosed only after notice to the other party.

10.4 The restrictions contained in this Clause shall continue to apply after the Director ceases to be a director of the Company, without limit in time.

11. Counterparts

11.1 This Agreement may be executed in any number of counterparts, and by the parties on separate counterparts, but shall not be effective until each party has executed at least one counterpart.

11.2 Each counterpart shall constitute an original of this Agreement, but all the counterparts shall together constitute but one and the same instrument.

12. Choice of Governing Law

This Agreement is governed by, and shall be construed in accordance with, Jersey law.

13. Jurisdiction

The courts of Jersey are to have jurisdiction to settle any dispute arising out of or in connection with this Agreement. Any proceedings relating to this Agreement may therefore be brought in the Jersey courts.

14. Process agent

14.1 Without prejudice to any other mode of service allowed under Jersey law, the Director:

(A) irrevocably appoints Mourant & Co Secretaries Limited of 22 Grenville Street, St Helier, Jersey JE4 8PX, as its agent for service of process in relation to any proceedings before the Jersey courts in connection with this Agreement:

(B) agrees that, if a process agent ceases to act as process agent or no longer has and address in Jersey, it shall appoint a substitute process agent acceptable to the Company within ten Business Days and to delivery the Company a copy of the new process agent’s acceptance of that appointment, and failing this, the Company may appoint another agent for this purpose; and

(C) agrees that the failure by a process agent to notify him of any process will not invalidate the proceedings concerned.

14.2 The Company shall send by post to the Director a copy of the document served on his agent for service of process. However no failure or delay in so doing shall prejudice the effectiveness of service of such document or given rise to any claim by the Director against the Company.

IN WITNESS of which this document has been executed and delivered as a deed on the date which first appears on page 1 above.

Company
SIGNED for and on behalf of SHIRE PLC	/s/ Flemming Ornskov	) ) )
Director
SIGNED by JEFFREY V. POULTON	/s/ Jeffrey Poulton	) ) ) )

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF FLEmMING ORNSKOV PURSUANT TO

RULE 13a-14 UNDER THE

SECURITIES EXCHANGE ACT OF 1934

FORM 10-Q FOR THE QUARTER ENDED

June 30, 2015 OF

Shire pLC

I, Flemming Ornskov, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: July 30, 2015

/s/ Flemming Ornskov

Flemming Ornskov

Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF Jeffrey Poulton PURSUANT TO

RULE 13A-14 UNDER THE

SECURITIES EXCHANGE ACT OF 1934

FORM 10-Q FOR THE QUARTER ENDED

June 30, 2015 OF

Shire PLC

I, Jeffrey Poulton, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: July 30, 2015

/s/ Jeffrey Poulton

Jeffrey Poulton

Chief Financial Officer

EX-32.1

EXHIBIT 32.1

The certification set forth below is being submitted in connection with the Quarterly Report on Form 10-Q of Shire plc for the quarter ended June 30, 2015 (the “Report”) for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code.

Flemming Ornskov, the Chief Executive Officer and Jeffrey Poulton, the Chief Financial Officer of Shire plc, each certifies that, to the best of his knowledge:

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

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

Date: July 30, 2015

/s/ Flemming Ornskov

Flemming Ornskov

Chief Executive Officer

/s/ Jeffrey Poulton

Jeffrey Poulton

Chief Financial Officer

XML

Goodwill (Tables)

6 Months Ended

Jun. 30, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Acquired Goodwill

	June 30,	December 31,
	2015	2014
	$’M	$’M
	____________	____________
Goodwill arising on businesses acquired	4,173.2	2,474.9
	____________	____________

Schedule of Goodwill

	2015	2014
	$’M	$’M
	____________	____________
As at January 1,	2,474.9	624.6
Acquisitions	1,720.5	1,662.7
Foreign currency translation	(22.2)	(3.9)
	____________	____________
As at June 30,	4,173.2	2,283.4
	____________	____________

XML

Integration and acquisition costs (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Business Acquisition [Line Items]
Integration and acquisition costs	$ (212.4)	$ 112.1	$ (136.7)	$ 118.7
NPS Pharma
Business Acquisition [Line Items]
Integration and acquisition costs	47.8		117.7
Acquisition and Integration Costs, Gross Amount | NPS Pharma
Business Acquisition [Line Items]
Integration and acquisition costs	47.8		117.7
Acquisition and Integration Costs, Gross Amount | Viropharma
Business Acquisition [Line Items]
Integration and acquisition costs		31.5		97.3
Acquisition and Integration Costs, Gross Amount | SARcode
Business Acquisition [Line Items]
Change in fair value of contingent consideration		80.6
Acquisition and Integration Costs, Gross Amount | Lumena and Lotus Tissue Repair
Business Acquisition [Line Items]
Change in fair value of contingent consideration	(258.1)		(255.7)
Acquisition and Integration Costs, Gross Amount | SARcode and Ferrokin Bioscience, Inc
Business Acquisition [Line Items]
Change in fair value of contingent consideration				21.4
Acquisition and Integration Costs, Net Amount
Business Acquisition [Line Items]
Integration and acquisition costs	$ (212.4)	$ 112.1	$ (136.7)	$ 118.7

XML

Fair Value Measurement (Tables)

6 Months Ended

Jun. 30, 2015

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

		Carrying value and Fair value
		Total	Level 1	Level 2	Level 3
At June 30, 2015		$'M	$'M	$'M	$'M
		____________	___________	___________	___________
Financial assets:
Available-for-sale securities(1)		16.3	16.3	-	-
Contingent consideration receivable (2)		16.7	-	-	16.7
Foreign exchange contracts		7.9	-	7.9	-
Financial liabilities:
Foreign exchange contracts		0.3	-	0.3	-
Contingent consideration payable(3)		464.7	-	-	464.7
		____________	___________	___________	___________
		Total	Level 1	Level 2	Level 3
At December 31, 2014		$'M	$'M	$'M	$'M
		____________	___________	___________	___________
Financial assets:
Available-for-sale securities(1)		13.1	13.1	-	-
Contingent consideration receivable (2)		15.9	-	-	15.9
Foreign exchange contracts		12.6	-	12.6	-
Financial liabilities:
Foreign exchange contracts		7.8	-	7.8	-
Contingent consideration payable(3)	1	629.9	-	-	629.9
		____________	___________	___________	___________

• Available-for-sale securities are included within Investments in the consolidatedbalance sheet.

(2)Contingent consideration receivable is included within Prepaid expenses and other current assets and Other non-current assets in the consolidated balance sheet.

(3)Contingent consideration payableis included within Other current liabilities and Other non-current liabilities in the consolidated balance sheet.

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

Contingent consideration receivable
	2015	2014
	$'M	$'M
	____________	____________
Balance at January 1,	15.9	36.1
Initial recognition of contingent consideration receivable	-	33.6
Gain/(loss) recognized in the income statement (within Gain on sale of product rights) due to change in fair value during the period	8.6	(3.3)
Reclassification of amounts to Other receivables within Other current assets	(9.1)	(8.7)
Amounts recorded to other comprehensive income (within foreign currency translation adjustments)	1.3	(0.2)
Balance at June 30,	16.7	57.5

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

Contingent consideration payable
	2015	2014
	$'M	$'M
	____________	____________
Balance at January 1,	629.9	405.9
Initial recognition of contingent consideration payable	92.1	174.0
Change in fair value during the period with the corresponding adjustment recognized (within Integration and acquisition costs) in the income statement	(255.7)	21.4
Reclassification of amounts to Other current liabilities	(4.1)	(10.9)
Change in fair value during the period with corresponding adjustment to the associated intangible asset	(0.2)	1.4
Amounts recorded to other comprehensive income (within foreign currency translation adjustments)	2.7	-
Balance at June 30,	464.7	591.8

Fair Value Inputs, Assets Quantitative Information Table

Financial assets:	Fair Value at the Measurement Date
At June 30, 2015	Fair value	Valuation Technique	Significant unobservable Inputs	Range
	$'M
	____________	___________	___________	___________
Contingent consideration receivable ("CCR")	16.7	Income approach (probability weighted discounted cash flow)	• Probability weightings applied to different sales scenarios • Future forecast consideration receivable based on contractual terms with purchaser • Assumed market participant discount rate	• 10 to 70% • $28.5 million to $36 million • 8.7%
	____________	____________	____________	____________

	Fair Value at the Measurement Date
At June 30, 2015	Fair value	Valuation Technique	Significant unobservable Inputs	Range
	$'M
	____________	___________	___________	___________
IPR&D intangible assets (SHP625 and SHP608)	$120.4	Income approach (discounted cash flow)	• Probability of regulatory approval being obtained • Expected commercial launch date • Assumed market participant discount rate	• 5 to 33% • 2018 to 2021 • 9.7 to 10.7%
	____________	____________	____________	____________

Fair Value Inputs, Liabilities Quantitative Information Table

Financial liabilities:	Fair Value at the Measurement Date
At June 30, 2015	Fair value	Valuation Technique	Significant unobservable Inputs	Range
	$'M
	____________	___________	___________	___________
Contingent consideration payable	464.7	Income approach (probability weighted discounted cash flow)	• Cumulative probability of milestones being achieved • Assumed market participant discount rate • Periods in which milestones are expected to be achieved • Forecast quarterly royalties payable on net sales of relevant products	• 4 to 85% • 0.9 to 10.5% • 2015 to 2030 • $0.2 to $7.6 million
	____________	____________	____________	____________

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Accounts Receivable, Net (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Provision for discounts and doubtful accounts
As at January 1,	$ 48.5	$ 47.9
Provision charged to operations	186.6	163.1
Provision utilization	(181.6)	(165.7)
As at June 30,	53.5	$ 45.3
Accounts receivable, net	1,099.2		$ 1,035.1
Accounts receivable related to royalty income	$ 69.8		$ 59.0

XML

Taxation (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Effective Income Tax Rate Reconciliation
Effective rate of tax	(37.00%)	(51.00%)	2.00%	(19.00%)

XML

Accumulated Other Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2015

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Changes in Accumulated Other Comprehensive Income, Net of Tax

As at June 30, 2015		Foreign currency translation adjustment	Unrealized holding loss on available-for-sale securities	Accumulated other comprehensive loss
		$M	$M	$M
As at January 1, 2015		(25.7)	(5.8)	(31.5)
Current period change:
Net current period other comprehensive (loss)/income		(83.3)	3.3	(80.0)
As at June 30, 2015		(109.0)	(2.5)	(111.5)
As at June 30, 2014		Foreign currency translation adjustment	Unrealized holding gain/(loss) on available-for-sale securities	Accumulated other comprehensive income
		$M	$M	$M
As at January 1, 2014		110.4	(0.2)	110.2
Current period change:
	Other comprehensive income before reclassification	10.2	6.9	17.1
	Gain transferred to the income statement (within Other income, net) on disposal of available-for-sale securities	-	(3.2)	(3.2)
Net current period other comprehensive income		10.2	3.7	13.9
As at June 30, 2014		120.6	3.5	124.1

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2015

Basis of preparation

(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 at December 31, 2014 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, 2014.

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, consisting only of normal recurring 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.

Use of estimates in consolidated financial statements

(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, sales deductions, income taxes (including provisions for uncertain tax positions and the realization of deferred tax assets), provisions for litigation and legal proceedings, contingent consideration receivable from product divestmentsandcontingent consideration payable in respect of business combinations and asset purchases. 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.

New accounting pronouncements

(c)       New accounting pronouncements

Adopted during the period

Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity

In April 2014 the Financial Accounting Standards Board (“FASB”) issued guidance on the reporting of discontinued operations and disclosures of disposals of components of an entity. The amendments in this update revise the definition of discontinued operations by limiting discontinued operations reporting to disposals of components of an entity that represent strategic shifts that have (or will have) a major effect on an entity's operations and financial results. The guidance requires expanded disclosures for discontinued operations which provide users of financial statements with more information about the assets, liabilities, revenues, and expenses of discontinued operations. The guidance also requires an entity to disclose the pre-tax profit or loss of an individually significant component of an entity that does not qualify for discontinued operations reporting.

Shire adopted this guidance in the period, which will be effective for discontinued operations occurring after January 1, 2015. The adoption of this guidance did not impact the Company's consolidated financial position, results of operations or cash flows.

To be adopted in future periods

Revenue from Contracts with Customers

In May 2014 the FASB and the International Accounting Standards Board (together the “Accounting Standards Boards”) issued a new accounting standard that is intended to clarify and converge the financial reporting requirements for revenue from contracts with customers. The core principle of the standard is that an “entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services”. To achieve that core principle the Accounting Standards Boards developed a five-step model (as presented below) and related application guidance, which will replace most existing revenue recognition guidance in US GAAP.

Five-step model:

Step 1: Identify the contract(s) with a customer.

Step 2: Identify the performance obligations in the contract.

Step 3: Determine the transaction price.

Step 4: Allocate the transaction price to the performance obligations in the contract.

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

The Accounting Standards Boards also issued new qualitative and quantitative disclosure requirements as part of the new accounting standard which aims to enable financial statement users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

In July 2015 the FASB decided to defer the effective date of the guidance by one year. Based on this deferral, public entities would need to apply the new guidance for annual reporting periods beginning after December 15, 2017, and interim periods therein. The Company is currently evaluating the impact of adopting this guidance.

Amendments to the Consolidation Analysis

In February 2015 the FASB issued guidanceto respond to stakeholders' concerns about the current accounting for consolidation of certain legal entities. Financial statement users asserted that in certain situations in which consolidation is ultimately required, deconsolidated financial statements are necessary to better analyze the reporting entity's economic and operational results. Previously, the FASB issued an indefinite deferral for certain entities to partially address those concerns. However, the amendments in this guidance rescind that deferral and address those concerns by making changes to the consolidation guidance.

Under the amendments, all reporting entities are within the scope of Subtopic 810-10, Consolidation, including limited partnerships and similar legal entities, unless a scope exception applies. The presumption that a general partner controls a limited partnership has been eliminated. In addition, fees paid to decision makers that meet certain conditions no longer cause decision makers to consolidate a VIE in certain instances. The amendments place more emphasis in the consolidation evaluation on variable interests other than fee arrangements such as principal investment risk (for example, debt or equity interests), guarantees of the value of the assets or liabilities of the VIE, written put options on the assets of the VIE, or similar obligations, including some liquidity commitments or agreements (explicit or implicit). Additionally, the amendments reduce the extent to which related party arrangements cause an entity to be considered a primary beneficiary.

The amendments are effective for public business entities for fiscal years, and for interim periods therein, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. The Company does not expect the adoption of this guidance to have a material effect on its consolidated financial position, results of operations and cash flows.

Simplifying the Presentation of Debt Issuance Costs

In April 2015 the FASB issued guidancetosimplify the presentation of debt issuance costs. The guidance requires that debt issuance costs related to a recognized debt liability be presentedin the balance sheet as a directdeduction from the carrying amount of that debtliability, consistent with debt discounts. The recognition andmeasurementguidance for debt issuance costs are not affected by the amendments in this update. The amendments in this update are effective forfinancial statements issued for fiscal years beginning after December 15, 2015,and interim periods therein.

Early adoption of the amendments in this update is permitted for financial statements that have not been previously issued. An entity should apply the new guidance on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. Upon transition, an entity is required to comply with the applicable disclosures for a change in an accounting principle. The Company does not expect the adoption of this guidance to have a material effect on its consolidated financial position, results of operations and cash flows.

Customer's Accounting for Fees Paid in aCloud Computing Arrangement

In April 2015 the FASB issued guidance to simplify the customer's accounting for fees paid in a cloud computing arrangement. The amendments provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The amendments will be effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted for all entities. An entity can elect to adopt the guidance either a) prospectively to all arrangements entered into or materially modified after the effective date or b) retrospectively.The Company is currently evaluating the impact of adopting this guidance.

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Related parties (Details) - Jun. 30, 2015 - ArmaGen - USD ($) $ in Millions	Total
Related Party Transaction [Line Items]
Amount paid for an equity stake and the license to develop and commercialize AGT-182	$ 2.5
Share of R&D credit recorded within R&D expense	5.9
Related parties, acrrued liabilities	$ 5.4
Percentage of equity stake	21.00%

XML

Fair Value Measurement (Assets and Liabilities That are Measured and Not Measured at Fair Value on a Recurring Basis) (Details) - Recurring Basis - USD ($) $ in Millions		Jun. 30, 2015	Dec. 31, 2014
Estimated fair value
Financial assets:
Available-for-sale securities	[1]	$ 16.3	$ 13.1
Contingent consideration receivable	[2]	16.7	15.9
Foreign exchange contracts, asset		7.9	12.6
Financial liabilities:
Foreign exchange contracts, liability		0.3	7.8
Contingent consideration payable	[3]	464.7	629.9
Level 1
Financial assets:
Available-for-sale securities	[1]	16.3	13.1
Contingent consideration receivable	[2]	0.0	0.0
Foreign exchange contracts, asset		0.0	0.0
Financial liabilities:
Foreign exchange contracts, liability		0.0	0.0
Contingent consideration payable	[3]	0.0	0.0
Level 2
Financial assets:
Available-for-sale securities	[1]	0.0	0.0
Contingent consideration receivable	[2]	0.0	0.0
Foreign exchange contracts, asset		7.9	12.6
Financial liabilities:
Foreign exchange contracts, liability		0.3	7.8
Contingent consideration payable	[3]	0.0	0.0
Level 3
Financial assets:
Available-for-sale securities	[1]	0.0	0.0
Contingent consideration receivable	[2]	16.7	15.9
Foreign exchange contracts, asset		0.0	0.0
Financial liabilities:
Foreign exchange contracts, liability		0.0	0.0
Contingent consideration payable	[3]	$ 464.7	$ 629.9

[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.

[3] Contingent consideration payable is included within Other current liabilities and Other non-current liabilities in the consolidated balance sheet.

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Results of discontinued operations (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Loss from discontinued operations, net of taxes	$ (4.5)	$ (5.2)	$ (7.0)	$ (27.9)

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Earnings Per Share (Details) - USD ($) shares in Millions, $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Schedule of Calculation of Numerator and Denominator in Earnings Per Share
Income from continuing operations, net of taxes		$ 164.1	$ 528.3	$ 577.0	$ 781.4
Loss from discontinued operations, net of taxes		(4.5)	(5.2)	(7.0)	(27.9)
Net income		$ 159.6	$ 523.1	$ 570.0	$ 753.5
Schedule of Weighted Average Number of Shares
Basic (in shares)	[1]	590.5	586.4	589.8	585.3
Effect of dilutive shares:
Share based awards to employees (in shares)	[2]	2.7	3.9	3.2	5.0
Diluted (in shares)		593.2	590.3	593.0	590.3
Share Awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	[3]	1.0	0.3	3.2	1.2

[1] Excludes shares purchased by the EBT and presented by Shire as treasury stock

[2] . Calculated using the treasury stock method

[3] 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) the required performance conditions were not satisfied as at the balance sheet date.

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Segmental Reporting (Revenue by Product) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Revenue from External Customer [Line Items]
Product sales	$ 1,476.2	$ 1,469.6	$ 2,899.4	$ 2,777.7
VYVANSE
Revenue from External Customer [Line Items]
Product sales			841.6	710.7
ADDERALL XR
Revenue from External Customer [Line Items]
Product sales			181.7	184.9
INTUNIV
Revenue from External Customer [Line Items]
Product sales			26.9	182.3
LIALDA and MEZAVANT
Revenue from External Customer [Line Items]
Product sales			306.4	272.5
PENTASA
Revenue from External Customer [Line Items]
Product sales			145.0	135.5
FOSRENOL
Revenue from External Customer [Line Items]
Product sales			89.2	88.1
XAGRID
Revenue from External Customer [Line Items]
Product sales			48.1	55.0
Other Products
Revenue from External Customer [Line Items]
Product sales			61.9	67.2
REPLAGAL
Revenue from External Customer [Line Items]
Product sales			214.4	244.8
ELAPRASE
Revenue from External Customer [Line Items]
Product sales			271.5	280.7
VPRIV
Revenue from External Customer [Line Items]
Product sales			171.1	176.6
FIRAZYR
Revenue from External Customer [Line Items]
Product sales			196.6	163.9
CINRYZE
Revenue from External Customer [Line Items]
Product sales			286.9	215.5
GATTEX/REVESTIVE
Revenue from External Customer [Line Items]
Product sales			$ 52.2	$ 0.0

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Financial Instruments (Foreign Exchange Risk and Its Classification on Balance Sheet) (Details) - Foreign Exchange Contract $ in Millions	6 Months Ended
	Jun. 30, 2015 USD ($) contract	Dec. 31, 2014 USD ($)
Derivatives, Fair Value
Net derivative fair value assets	$ 7.7
Net derivative fair value liabilities	0.1
Potential effect of rights of set off associated with the foreign exchange contracts	$ 0.2
Number of swap and forward foreign exchange contracts outstanding | contract	31
Swaps and forward contracts maturity	90 days
Prepaid expenses and other current assets
Derivatives, Fair Value
Assets	$ 7.9	$ 12.6
Other current liabilities
Derivatives, Fair Value
Liabilities	$ 0.3	$ 7.8

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure

15.       Commitments and contingencies

(a)       Leases

Future minimum lease payments under operating leases at June 30, 2015are presented below:

		Operating
		leases
		$’M
		_____________
2015	1	25.0
2016	1	42.1
2017	1	32.6
2018	1	25.0
2019	1	20.8
2020		20.0
Thereafter	1	125.9
	111	_____________
		291.4
		_____________

The Company leases land, facilities, motor vehicles and certain equipment under operating leases expiring through 2032. Lease and rental expense amounted to $24.3million and$20.8 million for the six monthsto June 30, 2015 and2014respectively, which is predominately included in SG&Aexpenses in the Company's consolidated income statement.

(b)       Letters of credit and guarantees

At June 30, 2015 the Company had irrevocable standby letters of credit and guarantees with various banks and insurance companiestotaling $48.0million (being the contractual amounts), 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.

(c)       Collaborative and other licensing arrangements

Details of significant updates in collaborative and other licensing arrangements are included below:

Out-licensing arrangements

Shire has entered into various collaborative and out-licensing 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 some 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. Under the terms of these collaborative and out-licensing arrangements, the Company may receive development milestone payments up to an aggregate amount of $39 million and sales milestones up to an aggregate amount of $46 million. The receipt of these substantive milestones is uncertain and contingent on the achievement of certain development milestones or the achievement of a specified level of annual net sales by the licensee. In the six monthsto June 30, 2015 Shire received cash in respect of up-front and milestone payments totaling$12.6 million (2014: $1.0 million). In the six monthsto June 30, 2015 Shire recognized milestone income of $1.0 million (2014: $2.0 million) in other revenues and $23.4 million (2014: $26.4 million) in product sales for shipment of product to the relevant licensee.

(d)       Commitments

(i)       Clinical testing

At June 30, 2015 the Company had committed to pay approximately $ 430 million (December 31, 2014: $ 382 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 June 30, 2015 the Company had committed to pay approximately $ 310 million (December 31, 2014: $ 384 million) in respect of contract manufacturing. The Company expects to pay $ 107millionof these commitments in 2015.

(iii)       Other purchasing commitments

At June 30, 2015 the Company had committed to pay approximately $ 275 million (December 31, 2014: $ 265 million) for future purchases of goods and services, predominantly relating to active pharmaceutical ingredients sourcing. The Company expects to pay $ 266million of these commitments in 2015.

(iv)       Investment commitments

At June 30, 2015 the Company had outstanding commitments to subscribe for interests in companies and partnerships for amounts totaling $ 58 million (December 31, 2014: $ 67 million) which may all be payable in 2015, depending on the timing of capital calls. The investment commitments include additional funding to certain VIEs of which Shire is not the primary beneficiary.

(v)       Capital commitments

At June 30, 2015 the Company had committed to spend $ 9 million (December 31, 2014: $ 3 million) on capital projects.

(e)Legal and other proceedings

The Company expenses legal costs as they are incurred.

The Company recognizes loss contingency provisions for probable losses when management is able to reasonably estimate the loss. When the estimated loss lies within a range, the Company records a loss contingency provision based on its best estimate of the probable loss. If no particular amount within that range is a better estimate than any other amount, the minimum amount is recorded.  Estimates of losses may be developed substantially before the ultimate loss is known, and are therefore refined each accounting period as additional information becomes known. In instances where the Company is unable to develop a reasonable estimate of loss, no loss contingency provision is recorded at that time. As information becomes known a loss contingency provision is recorded when a reasonable estimate can be made. The estimates are reviewed quarterly and the estimates are changed when expectations are revised. An outcome that deviates from the Company's estimate may result in an additional expense or release in a future accounting period. At June 30, 2015, provisions for litigation losses, insurance claims and other disputes totaled $8.5million (December 31, 2014: $16.9million).

The Company's principal pending legal and other proceedings are disclosed below. The outcomes of these proceedings are not always predictable and can be affected by various factors. For those legal and other proceedings for which it is considered at least reasonably possible that a loss has been incurred, the Company discloses the possible loss or range of possible loss in excess of the recorded loss contingency provision, if any, where such excess is both material and estimable.

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. (“Watson”); Roxane Laboratories, Inc. ("Roxane"); Mylan Pharmaceuticals, Inc. (“Mylan”); and Actavis Elizabeth LLC and Actavis Inc. (collectively, "Actavis"). Since filing suit against these ANDA filers, along with API suppliers Johnson Matthey Inc. and Johnson Matthey Pharmaceuticals Materials (collectively “Johnson Matthey”), Shire has been engaged in a consolidated patent infringement litigation in the US District Court for the District of New Jerseyagainst the aforementioned parties (except Watson, who withdrew their ANDA).

On June 23, 2014, the US District Court for the District of New Jersey granted Shire's summary judgment motion holding that 18 claims of the patents-in-suit were both infringed and valid. The ruling prevents all of the ANDA filers (Sandoz, Roxane, Amneal, Actavis and Mylan) from launching generic versions of VYVANSE until the earlier of either a successful appeal to the US Court of Appeals for the Federal Circuit (“CAFC”), or the expiration of these patents in 2023. To appeal successfully, the ANDA-defendants must overturn the court's rulings for each of these 18 patent claims. All of the defendants have appealed the court's summary judgment ruling to the CAFC. Oral argument occurred on May 6, 2015 and a decision is pending.

LIALDA

In May 2010, Shire was notified that Zydus Pharmaceuticals USA, Inc. (“Zydus”) had 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 ZydusCadila. A Markman hearing took place on January 29, 2015and a Markman ruling was issued on July 28, 2015. The previously scheduled trial date has been vacated; at present, there is no trial date.

In February 2012, Shire was notified that Osmotica Pharmaceutical Corporation ("Osmotica") had 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 Northern District of Georgia against Osmotica. A Markman hearing took place on August 22, 2013 and a Markman ruling was issued on September 25, 2014. The Court issued an Order on February 27, 2015 in which all dates in the scheduling order have been stayed.

In March 2012, Shire was notified that Watson Laboratories Inc.-Florida had 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 Southern District of Florida against Watson Laboratories Inc.-Florida and Watson Pharmaceuticals, Inc. Watson Pharma, Inc. and Watson Laboratories, Inc. were subsequently added as defendants. A trial took place in April, 2013 and on May 9, 2013 the trial court issued a decision finding that the proposed generic product infringes the patent-in-suit and that the patent is not invalid. Watson appealed the trial court's ruling to the CAFC and a hearing took place on December 2, 2013. The ruling of the CAFC was issued on March 28, 2014 overruling the trial court on the interpretation of two claim terms and remanding the case for further proceedings. Shire petitioned the Supreme Court for a writ of certiori, which was granted on January 26, 2015. The Supreme Court also vacated the CAFC decision and remanded the case to the CAFC for further consideration in light of the Supreme Court's recent decision in Teva v Sandoz. On June 3, 2015, the CAFC reaffirmed their previous decision to reverse the district court's claims construction. We expect the CAFC to issue a mandate in the near future remanding the case to the US District Court for the Southern District of Florida.

In April 2012, Shire was notified that Mylan had 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 Middle District of Florida against Mylan. A Markman hearing took place on December 22, 2014. A Markman ruling was issued on March 23, 2015. A trial is scheduled during the court's trial term beginning on September 1, 2015.

In March 2015, Shire was notified that Amneal had 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 New Jersey against Amneal, Amneal Pharmaceuticals of New York, LLC and Amneal Pharmaceuticals Co. India Pvt. Ltd. No trial date has been set.

Investigation related to DERMAGRAFT

The Department of Justice, including the US Attorney's Office for the Middle District of Florida, Tampa Division and the US Attorney's Office for Washington, DC, is conducting civil and criminal investigations into the sales and marketing practices of Advanced BioHealing Inc. (“ABH”) relating to DERMAGRAFT.

Following the disposal of the DERMAGRAFT business in January 2014, Shire has retained certain legacy liabilities including any liability that may arise from this investigation. Shire is cooperating fully with these investigations. Shire is not in a position at this time to predict the scope, duration or outcome of these investigations.

Civil Investigative Demand relating to VANCOCIN

On April 6, 2012, ViroPharma received a notification that the United States Federal Trade Commission (“FTC”) is conducting an investigation into whether ViroPharma had engaged in unfair methods of competition with respect to VANCOCIN. On August 3, 2012, and September 8, 2014, ViroPharma and Shire respectively received Civil Investigative Demands from the FTC requesting additional information related to this matter. Shire intends to continue to cooperate fully with the FTC investigation. At this time, Shire is unable to predict the outcome or duration of this investigation.

Lawsuit related to supply of ELAPRASE to certain patients in Brazil

On September 24, 2014 Shire's Brazilian affiliate, Shire FarmaceuticaBrasilLtda, was served with a lawsuit brought by the State of Sao Paulo and in which the Brazilian Public Attorney's office has intervened alleging that Shire is obligated to provide certain medical care including ELAPRASE for an indefinite period at no cost to patients who participated in ELAPRASE clinical trials in Brazil, and seeking recoupment to the Brazilian government for amounts paid for these patients to date, and moral damages associated with these claims.  Shire intends to defend itself against these allegations but is not able to predict the outcome or duration of this case.

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Segmental Reporting (Tables)

6 Months Ended

Jun. 30, 2015

Segment Reporting [Abstract]

Schedule of Segment Revenue from Major Products

6 months to	June 30,	June 30,
	2015	2014
	$’M	$’M
	___________	___________
VYVANSE	841.6	710.7
LIALDA/MEZAVANT	306.4	272.5
CINRYZE	286.9	215.5
ELAPRASE	271.5	280.7
REPLAGAL	214.4	244.8
FIRAZYR	196.6	163.9
ADDERALL XR	181.7	184.9
VPRIV	171.1	176.6
PENTASA	145.0	135.5
FOSRENOL	89.2	88.1
GATTEX/REVESTIVE	52.2	-
XAGRID	48.1	55.0
INTUNIV	26.9	182.3
NATPARA	5.9	-
Other product sales	61.9	67.2
	____________	____________
Total product sales	2,899.4	2,777.7
	____________	____________

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Other Current Liabilities (Tables)

6 Months Ended

Jun. 30, 2015

Other Liabilities, Current [Abstract]

Schedule of Other Current Liabilities

	June 30,	December 31,
	2015	2014
	$’M	$’M
	_____________	_____________
Income taxes payable	60.6	16.2
Value added taxes	19.5	16.6
Contingent consideration payable	19.5	194.5
Other current liabilities	45.9	35.2
	_____________	_____________
	145.5	262.5
	_____________	_____________

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Fair Value Measurement (Quantitative Information About Recurring and Non-recurring Level 3 Fair Value Measurements) (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Fair Value Inputs
Impairment of intangible assets	$ 523.3	$ 188.0
SHP602 IPR&D
Fair Value Inputs
Impairment of intangible assets		166.0
SHP613
Fair Value Inputs
Impairment of intangible assets		$ 22.0
SHP625
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
IPR&D intangible assets, fair value	120.4
Fair Value Inputs
Impairment of intangible assets	346.6
SHP608
Fair Value Inputs
Impairment of intangible assets	$ 176.7
Recurring Basis | Contingent Consideration Payable | Minimum
Fair Value Inputs
Assumed market participant discount rate	0.90%
Cumulative probability of milestones being achieved	4.00%
Periods in which milestones are expected to be achieved	2015
Forecast quarterly royalties payable on net sales of relevant products	$ 0.2
Recurring Basis | Contingent Consideration Payable | Maximum
Fair Value Inputs
Assumed market participant discount rate	10.50%
Cumulative probability of milestones being achieved	85.00%
Periods in which milestones are expected to be achieved	2030
Forecast quarterly royalties payable on net sales of relevant products	$ 7.6
Recurring Basis | Contingent Consideration Payable | Income approach (probability weighted discounted cash flow)
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Liabilities	464.7
Recurring Basis | Contingent Consideration Receivable | Income approach (probability weighted discounted cash flow)
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Assets	$ 16.7
Fair Value Inputs
Assumed market participant discount rate	8.70%
Recurring Basis | Contingent Consideration Receivable | Income approach (probability weighted discounted cash flow) | Minimum
Fair Value Inputs
Probability weightings applied to different sales scenarios	10.00%
Future forecast consideration receivable based on contractual terms with purchaser	$ 28.5
Recurring Basis | Contingent Consideration Receivable | Income approach (probability weighted discounted cash flow) | Maximum
Fair Value Inputs
Probability weightings applied to different sales scenarios	70.00%
Future forecast consideration receivable based on contractual terms with purchaser	$ 36.0
Nonrecurring Basis | SHP625 and SHP608 combined
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
IPR&D intangible assets, fair value	120.4
Fair Value Inputs
Impairment of intangible assets	$ 523.3
Nonrecurring Basis | Income approach (discounted cash flow) | Minimum | SHP625 and SHP608 combined
Fair Value Inputs
Assumed market participant discount rate	9.70%
Probability of regulatory approval being obtained	5.00%
Expected commercial launch date	2018
Nonrecurring Basis | Income approach (discounted cash flow) | Maximum | SHP625 and SHP608 combined
Fair Value Inputs
Assumed market participant discount rate	10.70%
Probability of regulatory approval being obtained	33.00%
Expected commercial launch date	2021

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Inventories (Tables)

6 Months Ended

Jun. 30, 2015

Inventory Disclosure [Abstract]

Schedule of Inventory

	June 30,	December 31,
	2015	2014
	$’M	$’M
	____________	____________
Finished goods	136.8	136.0
Work-in-progress	383.1	305.3
Raw materials	112.9	103.5
	____________	____________
	632.8	544.8
	____________	____________

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Business Combinations (Pro Forma Information) (Details) - NPS Pharma - USD ($) $ / shares in Units, $ in Millions	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Pro Forma Information
Revenues	$ 3,075.9	$ 2,949.0
Net income from continuing operations	$ 526.6	$ 565.7
Net income from continuing operations per share - basic	$ 0.959	$ 0.966
Net income from continuing operations per share - diluted	$ 0.954	$ 0.958
Pro Forma Data Adjustments
An adjustment to increase amortization of intangible assets	$ (21.1)	$ (83.6)
Increase/(decrease) to net income to reflect acquisition related costs	107.2	(107.2)
Decrease to net income to reflect the additional interest expense		(11.1)
Increase/(decrease) to net income to reflect the fair value adjustment to acquisition date inventory.	$ 9.2	$ (9.2)

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Commitments and Contingencies (Collaborative Arrangements) (Details) - Out-licensing Arrangement - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Out-licensing arrangements
Milestone payments received	$ 12.6	$ 1.0
Other Revenues
Out-licensing arrangements
Milestone revenues recognized	1.0	2.0
Product Sales
Out-licensing arrangements
Milestone revenues recognized	23.4	$ 26.4
Development Milestone
Out-licensing arrangements
Maximum milestone payment receivable	39.0
Sales Milestone
Out-licensing arrangements
Maximum milestone payment receivable	$ 46.0

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Other Intangible Assets, Net (Roll Forward) (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Other Intangible Assets Roll Forward
As at January 1,	$ 4,934.4	$ 2,312.6
Acquisitions	5,167.8	3,321.4
Amortization charged	(219.6)	(119.0)
Impairment charges	(523.3)	(188.0)
Foreign currency translation	(48.9)	(1.5)
As at June 30,	$ 9,310.4	$ 5,325.5

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Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2015

Derivative Instrument Detail [Abstract]

Schedule of Foreign Exchange Contracts, Statement of Financial Position

		Fair value	Fair value
		June 30,	December 31,
		2015	2014
		$’M	$’M
		_____________	_____________
Assets	Prepaid expenses and other current assets	7.9	12.6
Liabilities	Other current liabilities	0.3	7.8
		_____________	_____________

Schedule of Foreign Exchange Contracts, Gain (Loss) in Other Income (Expense)

	Location of net gains recognized in income	Amount of net gains recognized in income
	__________________________________	____________
In the six months to		June 30,	June 30,
		2015	2014
		$’M	$’M
		_____________	_____________
Foreign exchange contracts	Other income, net	21.3	13.9
		_____________	_____________

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Consolidated Statements of Changes in Equity (Parenthetical) - 6 months ended Jun. 30, 2015 - USD ($) $ in Millions		Total
Dividends paid (in USD)	[1]	$ 110.2
Ordinary Shares
Dividends per share declared		$ 0.1909
Dividends per share paid		0.1909
ADS
Dividends per share declared		0.5727
Dividends per share paid		$ 0.5727

[1] Dividends per share During the six months to June 30, 2015 Shire plc declared and paid dividends of 19.09 US cents per ordinary share (equivalent to 57.27 US cents per ADS) totalling $110.2 million.

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Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Millions	Jun. 30, 2015	Dec. 31, 2014
Accounts Payable and Accrued Liabilities, Current [Line Items]
Trade accounts payable and accrued purchases	$ 286.8	$ 247.7
Accrued rebates - Medicaid	606.5	563.9
Accrued rebates - Managed care	310.7	318.2
Sales return reserve	137.5	131.7
Accrued bonuses	121.0	150.7
Accrued employee compensation and benefits payable	150.3	109.1
R&D accruals	66.5	88.3
Other accrued expenses	260.4	299.8
Accounts payable and accrued expenses, total	$ 1,939.7	$ 1,909.4

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Borrowings (Tables)

6 Months Ended

Jun. 30, 2015

Debt Disclosure [Abstract]

Schedule of Borrowings

	June 30,	December 31,
	2015	2014
	$’M	$’M
	_____________	_____________
Short term borrowings:
Borrowings under the 2015 Facility Agreement	850.0	-
Borrowings under the 2013 Facilities Agreement	400.0	850.0
Borrowings under the RCF	920.0	-
Borrowings under short term Credit lines	50.0	-
Secured non-recourse debts	9.9	-
	_____________	_____________
	2,229.9	850.0
Long term borrowings:
Secured non-recourse debts	73.9	-
	_____________	_____________
	2,303.8	850.0
	_____________	_____________

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Earnings Per Share

6 Months Ended

Jun. 30, 2015

Earnings Per Share [Abstract]

Earnings Per Share Disclosure

19.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	6 months to	6 months to
	June 30,	June 30,	June 30,	June 30,
	2015	2014	2015	2014
	$’M	$’M	$’M	$’M
	_________________	_________________	_________________	_________________
Income from continuing operations, net of taxes	164.1	528.3	577.0	781.4
Loss from discontinued operations1	(4.5)	(5.2)	(7.0)	(27.9)
	_________________	_________________	_________________	_________________
Numerator for basic and diluted earnings per share	159.6	523.1	570.0	753.5
	_________________	_________________	_________________	_________________
Weighted average number of shares:
	Millions	Millions	Millions	Millions
	_________________	_________________	_________________	_________________
Basic 1	590.5	586.4	589.8	585.3
Effect of dilutive shares:
Share-based awards to employees 2	2.7	3.9	3.2	5.0
	_________________	_________________	_________________	_________________
Diluted	593.2	590.3	593.0	590.3
	_________________	_________________	_________________	_________________

1. Excludes shares purchased by the EBT and presented by Shire as treasury stock.

2. Calculated using the treasury stock method.

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

	3 months to	3 months to	6 months to	6 months to
	June 30,	June 30,	June 30,	June 30,
	2015	2014	2015	2014
	No. of shares	No. of shares	No. of shares	No. of shares
	Millions	Millions	Millions	Millions
	_________________	_________________	_________________	_________________
Share-based awards to employees1	1.0	0.3	3.2	1.2
	_________________	_________________	_________________	_________________

• 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) the required performance conditions were not satisfied as at the balance sheet date.

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Fair Value Measurement

6 Months Ended

Jun. 30, 2015

Fair Value Disclosures [Abstract]

Fair Value Disclosures

18.       Fair value measurement

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

As at June 30, 2015 and December 31, 2014 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 value and Fair value
		Total	Level 1	Level 2	Level 3
At June 30, 2015		$'M	$'M	$'M	$'M
		____________	___________	___________	___________
Financial assets:
Available-for-sale securities(1)		16.3	16.3	-	-
Contingent consideration receivable (2)		16.7	-	-	16.7
Foreign exchange contracts		7.9	-	7.9	-
Financial liabilities:
Foreign exchange contracts		0.3	-	0.3	-
Contingent consideration payable(3)		464.7	-	-	464.7
		____________	___________	___________	___________
		Total	Level 1	Level 2	Level 3
At December 31, 2014		$'M	$'M	$'M	$'M
		____________	___________	___________	___________
Financial assets:
Available-for-sale securities(1)		13.1	13.1	-	-
Contingent consideration receivable (2)		15.9	-	-	15.9
Foreign exchange contracts		12.6	-	12.6	-
Financial liabilities:
Foreign exchange contracts		7.8	-	7.8	-
Contingent consideration payable(3)	1	629.9	-	-	629.9
		____________	___________	___________	___________

• Available-for-sale securities are included within Investments in the consolidatedbalance sheet.

(2)Contingent consideration receivable is included within Prepaid expenses and other current assets and Other non-current assets in the consolidated balance sheet.

(3)Contingent consideration payableis included within Other current liabilities and Other non-current liabilities 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 probability weighted discounted cash flow method).
• 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.
• Contingent consideration payable – the fair value of the contingent consideration payable has been estimated using the income approach (using a probability weighted discounted cash flow method).

Assets and Liabilities 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 and payables, which are measured at fair value on a recurring basis using significant unobservable inputs (Level 3),are as follows:

Contingent consideration receivable
	2015	2014
	$'M	$'M
	____________	____________
Balance at January 1,	15.9	36.1
Initial recognition of contingent consideration receivable	-	33.6
Gain/(loss) recognized in the income statement (within Gain on sale of product rights) due to change in fair value during the period	8.6	(3.3)
Reclassification of amounts to Other receivables within Other current assets	(9.1)	(8.7)
Amounts recorded to other comprehensive income (within foreign currency translation adjustments)	1.3	(0.2)
Balance at June 30,	16.7	57.5
Contingent consideration payable
	2015	2014
	$'M	$'M
	____________	____________
Balance at January 1,	629.9	405.9
Initial recognition of contingent consideration payable	92.1	174.0
Change in fair value during the period with the corresponding adjustment recognized (within Integration and acquisition costs) in the income statement	(255.7)	21.4
Reclassification of amounts to Other current liabilities	(4.1)	(10.9)
Change in fair value during the period with corresponding adjustment to the associated intangible asset	(0.2)	1.4
Amounts recorded to other comprehensive income (within foreign currency translation adjustments)	2.7	-
Balance at June 30,	464.7	591.8

Of the $464.7 million of contingent consideration payable as at June 30, 2015 $19.5million is recorded within other current liabilities and $445.2million is recorded within other non-current liabilities in the Company's balance sheet.

Quantitative Information about Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3)

Quantitative information about the Company's recurring Level 3 fair value measurements is included below:

Financial assets:	Fair Value at the Measurement Date
At June 30, 2015	Fair value	Valuation Technique	Significant unobservable Inputs	Range
	$'M
	____________	___________	___________	___________
Contingent consideration receivable ("CCR")	16.7	Income approach (probability weighted discounted cash flow)	• Probability weightings applied to different sales scenarios • Future forecast consideration receivable based on contractual terms with purchaser • Assumed market participant discount rate	• 10 to 70% • $28.5 million to $36 million • 8.7%
	____________	____________	____________	____________
Financial liabilities:	Fair Value at the Measurement Date
At June 30, 2015	Fair value	Valuation Technique	Significant unobservable Inputs	Range
	$'M
	____________	___________	___________	___________
Contingent consideration payable	464.7	Income approach (probability weighted discounted cash flow)	• Cumulative probability of milestones being achieved • Assumed market participant discount rate • Periods in which milestones are expected to be achieved • Forecast quarterly royalties payable on net sales of relevant products	• 4 to 85% • 0.9 to 10.5% • 2015 to 2030 • $0.2 to $7.6 million
	____________	____________	____________	____________

The Company re-measures the CCR (relating to contingent consideration due to the Company following divestment of certain of the Company's products) at fair value at each balance sheet date,with the fair value measurement based on forecast cash flows, over a number of scenarios which vary depending on the expected performance outcome of the products following divestment. The forecast cash flows under each of these differing outcomes have been included in probability weighted estimates used by the Company in determining the fair value of the CCR.

Contingent consideration payable represents future milestones the Company may be required to pay in conjunction with various business combinations and future royalties payable as a result of certain business combinations and licenses. The amount ultimately payable by Shire in relation to business combinations is dependent upon the achievement of specified future milestones, such as the achievement of certain future development, regulatory and sales milestones. The Company assesses the probability, and estimated timing, of these milestones being achieved and re-measures the related contingent consideration to fair value each balance sheet date. The amount of contingent consideration which may ultimately be payable by Shire in relation to future royalties is dependent upon future net sales of the relevant products over the life of the royalty term. The Company assesses the present value of forecast future net sales of the relevant products and re-measures the related contingent consideration to fair value each balance sheet date.

The fair value of the Company's contingent consideration receivable and payable could significantly increase or decrease due to changes in certain assumptions which underpin the fair value measurements. Each set of assumptions and milestones is specific to the individual contingent consideration receivable or payable. The assumptions include, among other things, the probability and expected timing of certain milestones being achieved, the forecast future net sales of the relevant products and related future royalties payable, the probability weightings applied to different sales scenarios of the Company's divested products and forecast future royalties receivable under scenarios developed by the Company, and the discount rates used to determine the present value of contingent future cash flows. The Company regularly reviews these assumptions, and makes adjustments to the fair value measurements as required by facts and circumstances.

Assets Measured at Fair Value on a Non-Recurring Basis using Significant Unobservable Inputs (Level 3)

In the six months to June 30, 2015 the Company reviewed its SHP625 and SHP608 IPR&D intangible assets for impairment and recognized an impairment charge of $523.3 million, recorded within R&D in the consolidated income statement, to write-down these IPR&D assets to their fair value. The fair value of these IPR&D assets was determined using the income approach, which used significant unobservable (Level 3) inputs. These unobservable inputs included, among other things, the probabilities of these IPR&D assets receiving regulatory approval, the timeframe for such approval, risk-adjusted forecast future cash flows to be generated by these IPR&D assets and the determination of an appropriate discount rate to be applied in calculating the present value of forecast future cash flows. The fair value of these IPR&D assets, determined at the time of the impairment review, was $120.4 million.

	Fair Value at the Measurement Date
At June 30, 2015	Fair value	Valuation Technique	Significant unobservable Inputs	Range
	$'M
	____________	___________	___________	___________
IPR&D intangible assets (SHP625 and SHP608)	$120.4	Income approach (discounted cash flow)	• Probability of regulatory approval being obtained • Expected commercial launch date • Assumed market participant discount rate	• 5 to 33% • 2018 to 2021 • 9.7 to 10.7%
	____________	____________	____________	____________

The carrying amounts of other financial assets and liabilities materially approximate to their fair value either because of the short-term maturity of these amounts or because there have been no significant changes since the asset or liability was last re-measured to fair value on a non-recurring basis.

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Inventories (Details) - USD ($) $ in Millions	Jun. 30, 2015	Dec. 31, 2014
Schedule of Inventory
Finished goods	$ 136.8	$ 136.0
Work-in-progress	383.1	305.3
Raw materials	112.9	103.5
Total inventories	$ 632.8	$ 544.8

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Other Non-current Liabilities (Tables)

6 Months Ended

Jun. 30, 2015

Other Liabilities, Noncurrent [Abstract]

Schedule of Other Noncurrent Liabilities

	June 30,	December 31,
	2015	2014
	$’M	$’M
	____________	____________
Income taxes payable	178.9	199.2
Contingent consideration payable	445.2	435.4
Other non-current liabilities	94.6	102.1
	____________	____________
	718.7	736.7
	____________	____________

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Segmental Reporting

6 Months Ended

Jun. 30, 2015

Segment Reporting [Abstract]

Segment Reporting Disclosure

20.       Segmental reporting

Shire comprises a single operating and reportable segment engaged in the research, development, licensing, manufacturing, marketing, distribution and sale of innovative specialist medicines to meet significant unmet patient needs.

This segment is supported by several key functions: a Pipeline group, consisting of R&D and Corporate Development, which prioritizes its activities towards late-stage development programs across a variety of therapeutic areas, while focusing its pre-clinical development activities primarily in Rare Diseases; a Technical Operations group responsible for the Company's global supply chain; and an In-line marketed products group which focuses on commercialized products. The In-Line marketed products group has commercial units that focus exclusively on the commercial execution of its marketed products including in the areas of Rare Diseases, Neuroscience, and Gastrointestinal (“GI”) and Internal Medicine, and to support the development of our pipeline candidates, in Ophthalmics. This ensures that the Company provides innovative treatments, and services the needs of its customers and patients, as efficiently as possible. The business is also supported by a simplified, centralized corporate function group. None of these functional groups meets all of the criteria to be an operating segment.

This single operating and reportable segment is consistent with the financial information regularly reviewed by the Executive Committee (which is Shire's chief operating decision maker) for the purposes of evaluating performance, allocating resources, and planning and forecasting future periods.

In the periods set out below, revenues by major product were as follows:

6 months to	June 30,	June 30,
	2015	2014
	$’M	$’M
	___________	___________
VYVANSE	841.6	710.7
LIALDA/MEZAVANT	306.4	272.5
CINRYZE	286.9	215.5
ELAPRASE	271.5	280.7
REPLAGAL	214.4	244.8
FIRAZYR	196.6	163.9
ADDERALL XR	181.7	184.9
VPRIV	171.1	176.6
PENTASA	145.0	135.5
FOSRENOL	89.2	88.1
GATTEX/REVESTIVE	52.2	-
XAGRID	48.1	55.0
INTUNIV	26.9	182.3
NATPARA	5.9	-
Other product sales	61.9	67.2
	____________	____________
Total product sales	2,899.4	2,777.7
	____________	____________

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Taxation

6 Months Ended

Jun. 30, 2015

Income Tax Disclosure [Abstract]

Income Tax Disclosure

21.       Taxation

The effective rate of tax for the three months to June 30, 2015 was -37% (2014: -51%) and for the six months to June 30, 2015 was 2% (2014: -19%).

The effective rate of tax is negative for the three months to June 30, 2015 and low for the six months to June 30, 2015 primarily due to the reduction in deferred tax liabilities in relation to the impairment of IPR&D intangible assets, the re-measurement of uncertain tax positions relating to ongoing tax audits and the release of certain valuation allowances all recognized during the second quarter.

The effective rate of tax in the three and six months to June 30, 2014 was negative primarily due to the recognition of a net tax credit in relation to the settlement of tax positions with the Canadian revenue authorities in the second quarter of 2014.

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Consolidated Statements of Changes in Equity - 6 months ended Jun. 30, 2015 - USD ($) shares in Millions, $ in Millions		Total	Common stock	Additional paid-in capital	Treasury stock	Accumulated other comprehensive (loss)/income	Retained earnings
As at Dec. 31, 2014		$ 8,662.9	$ 58.7	$ 4,338.0	$ (345.9)	$ (31.5)	$ 4,643.6
Shares as at Dec. 31, 2014		599.1	599.1
Net income		$ 570.0					570.0
Other comprehensive loss, net of tax		(80.0)				(80.0)
Options exercised		0.2	$ 0.2
Option exercised (in shares)			1.4
Share-based compensation		44.3		44.3
Tax benefit associated with exercise of stock options (in US dollar)		27.0		27.0
Shares released by employee benefit trust to satisfy exercise of stock options		0.2			22.4		(22.2)
Dividends	[1]	(110.2)					(110.2)
As at Jun. 30, 2015		$ 9,114.4	$ 58.9	$ 4,409.3	$ (323.5)	$ (111.5)	$ 5,081.2
Shares as at Jun. 30, 2015		600.5	600.5

[1] Dividends per share During the six months to June 30, 2015 Shire plc declared and paid dividends of 19.09 US cents per ordinary share (equivalent to 57.27 US cents per ADS) totalling $110.2 million.

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Related Parties

6 Months Ended

Jun. 30, 2015

Related Party Transactions [Abstract]

Related Party Disclosure

22.       Related parties

Shire considers that ArmaGen, Inc. (“ArmaGen”) is a related party by virtue of a combination of Shire's equity stake in ArmaGen and the worldwide licensing and collaboration agreement between the two parties to develop and commercialize AGT-182. In the six months to June 30, 2015 Shire paid $2.5 million in cash to ArmaGen in exchange for an additional equity stake in ArmaGen, following which Shire holds approximately 21% of ArmaGen's issued equity. In addition, Shire recorded R&D costs arising from the licensing and collaboration arrangement of $5.9 million in the first half of 2015, of which $5.4 million was accrued and unpaid as at June 30, 2015.

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Other Intangible Assets, Net (Tables)

6 Months Ended

Jun. 30, 2015

Intangible Assets, Net (Excluding Goodwill) [Abstract]

Schedule of Other Intangible Assets

		June 30,	December 31,
		2015	2014
		$’M	$’M
		________________	________________
Amortized intangible assets
	Intellectual property rights acquired for currently marketed products	9,416.1	4,816.9
	Other intangible assets1	375.0	30.0
		________________	________________
		9,791.1	4,846.9
Unamortized intangible assets
	Intellectual property rights acquired for IPR&D	1,182.2	1,550.0
		________________	________________
		10,973.3	6,396.9
Less: Accumulated amortization		(1,662.9)	(1,462.5)
		________________	________________
		9,310.4	4,934.4
		________________	________________

Intangible Assets (Excluding Goodwill) Roll Forward

	Other intangible assets
	2015	2014
	$’M	$’M
	________________	________________
As at January 1,	4,934.4	2,312.6
Acquisitions	5,167.8	3,321.4
Amortization charged	(219.6)	(119.0)
Impairment charges	(523.3)	(188.0)
Foreign currency translation	(48.9)	(1.5)
	________________	________________
As at June 30,	9,310.4	5,325.5
	________________	________________

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Reorganization Costs (Details) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2015 USD ($)	Jun. 30, 2014 USD ($)	Jun. 30, 2015 USD ($) number	Jun. 30, 2014 USD ($)
Restructuring and Related Cost [Line Items]
Reorganization costs	$ 13.3	$ 45.8	$ 28.5	$ 95.2
Reorganization cost incurred to date	274.0		274.0
Reorganizations costs, expected costs	102.0		102.0
Restructuring Reserve [Roll Forward]
Reorganization Reserve Opening liability			38.0
Amounts charged to re-organization	13.3	$ 45.8	28.5	$ 95.2
Reorganization liability, Paid and Utilized			(33.3)
Reorganization Reserve Closing liability	33.2		$ 33.2
Number of divisions | number			3
Involuntary termination benefits
Restructuring and Related Cost [Line Items]
Reorganization costs			$ 19.7
Restructuring Reserve [Roll Forward]
Reorganization Reserve Opening liability			38.0
Amounts charged to re-organization			19.7
Reorganization liability, Paid and Utilized			(26.4)
Reorganization Reserve Closing liability	31.3		31.3
Other reorganization costs
Restructuring and Related Cost [Line Items]
Reorganization costs			8.8
Restructuring Reserve [Roll Forward]
Reorganization Reserve Opening liability			0.0
Amounts charged to re-organization			8.8
Reorganization liability, Paid and Utilized			(6.9)
Reorganization Reserve Closing liability	$ 1.9		$ 1.9

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Financial Instruments (Foreign Exchange Risk and Its Effect on Income Statement) (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Foreign Exchange Contract | Other income, net
Derivative Instruments, Gain (Loss) [Line Items]
Amount of net gains recognized in income	$ 21.3	$ 13.9

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Consolidated Balance Sheets - USD ($) $ in Millions	Jun. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 64.0	$ 2,982.4
Restricted cash	74.0	54.6
Accounts receivable, net	1,099.2	1,035.1
Inventories	632.8	544.8
Deferred tax asset	455.4	344.7
Prepaid expenses and other current assets	221.6	221.5
Total current assets	2,547.0	5,183.1
Non-current assets:
Investments	50.0	43.7
Property, plant and equipment, net ("PP&E")	816.7	837.5
Goodwill	4,173.2	2,474.9
Other intangible assets, net	9,310.4	4,934.4
Deferred tax asset	107.9	112.1
Other non-current assets	25.3	46.4
Total assets	17,030.5	13,632.1
Current liabilities:
Accounts payable and accrued expenses	1,939.7	1,909.4
Short-term borrowings	2,229.9	850.0
Other current liabilities	145.5	262.5
Total current liabilities	4,315.1	3,021.9
Non-current liabilities
Long-term borrowings	73.9	0.0
Deferred tax liability	2,808.4	1,210.6
Other non-current liabilities	718.7	736.7
Total liabilities	$ 7,916.1	$ 4,969.2
Commitments and contingencies
Equity:
Common stock of 5p par value; 1,000 million shares authorized; and 600.5 million shares issued and outstanding (2014: 1,000 million shares authorized; and 599.1 million shares issued and outstanding)	$ 58.9	$ 58.7
Additional paid-in capital	4,409.3	4,338.0
Treasury stock: 9.8 million shares (2014: 10.6 million shares)	(323.5)	(345.9)
Accumulated other comprehensive loss	(111.5)	(31.5)
Retained earnings	5,081.2	4,643.6
Total equity	9,114.4	8,662.9
Total liabilities and equity	$ 17,030.5	$ 13,632.1

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Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2015

Commitments and Contingencies Disclosure [Abstract]

Future Minimum Lease Payments under Operating Leases

		Operating
		leases
		$’M
		_____________
2015	1	25.0
2016	1	42.1
2017	1	32.6
2018	1	25.0
2019	1	20.8
2020		20.0
Thereafter	1	125.9
	111	_____________
		291.4
		_____________

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Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Statement of Income and Comprehensive Income [Abstract]
Net income	$ 159.6	$ 523.1	$ 570.0	$ 753.5
Other comprehensive income:
Foreign currency translation adjustments	46.2	11.9	(83.3)	10.2
Unrealized holding gain/(loss) on available-for-sale securities (net of taxes of $nil, $0.4 million, $nil and $2.1 million)	2.6	(0.6)	3.3	3.7
Comprehensive income	208.4	$ 534.4	490.0	$ 767.4
Components of accumulated other comprehensive income
Foreign currency translation adjustments	(109.0)		(109.0)		$ (25.7)
Unrealized holding loss on available-for-sale securities, net of taxes	(2.5)		(2.5)		(5.8)
Accumulated other comprehensive loss	$ (111.5)		$ (111.5)		$ (31.5)

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Goodwill (Details) - Business Acquisition, Acquiree [Domain] - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Goodwill [Line Items]
Goodwill arising on business acquired	$ 1,720.5	$ 1,662.7
Goodwill [Roll Forward]
As at January 1,	2,474.9	624.6
Acquisition	1,720.5	1,662.7
Foreign currency translation	(22.2)	(3.9)
As at June 30,	$ 4,173.2	$ 2,283.4

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Reorganization costs (Table)

6 Months Ended

Jun. 30, 2015

Restructuring and Related Activities [Abstract]

Schedule of Reorganization costs

	Opening liability	Amount		Closing liability at
	at January 1,	charged to re-		June 30,
	2015	organization	Paid/Utilized	2015
	$'M	$'M	$'M	$'M
	___________	____________	___________	___________
Involuntary termination benefits	38.0	19.7	(26.4)	31.3
Other reorganization costs	-	8.8	(6.9)	1.9
	___________	___________	___________	___________
	38.0	28.5	(33.3)	33.2
	___________	___________	___________	___________

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Other Non-current Liabilities (Details) - USD ($) $ in Millions	Jun. 30, 2015	Dec. 31, 2014
Other Liabilities, Noncurrent [Abstract]
Income taxes payable	$ 178.9	$ 199.2
Contingent consideration payable	445.2	435.4
Other non-current liabilities	94.6	102.1
Other noncurrent liabilities, total	$ 718.7	$ 736.7

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Other Current Liabilities

6 Months Ended

Jun. 30, 2015

Other Liabilities, Current [Abstract]

Other Current Liabilities

12.       Other current liabilities

	June 30,	December 31,
	2015	2014
	$’M	$’M
	_____________	_____________
Income taxes payable	60.6	16.2
Value added taxes	19.5	16.6
Contingent consideration payable	19.5	194.5
Other current liabilities	45.9	35.2
	_____________	_____________
	145.5	262.5
	_____________	_____________

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Accounts Receivable, Net (Tables)

6 Months Ended

Jun. 30, 2015

Receivables [Abstract]

Provision for discounts and doubtful accounts

	2015	2014
	$’M	$’M
	_____________	_____________
As at January 1,	48.5	47.9
Provision charged to operations	186.6	163.1
Provision utilization	(181.6)	(165.7)
	_____________	_____________
As at June 30,	53.5	45.3
	_____________	_____________

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Other Non-current Liabilities

6 Months Ended

Jun. 30, 2015

Other Liabilities, Noncurrent [Abstract]

Other non-current Liabilities Disclosure

14.       Other non-current liabilities

	June 30,	December 31,
	2015	2014
	$’M	$’M
	____________	____________
Income taxes payable	178.9	199.2
Contingent consideration payable	445.2	435.4
Other non-current liabilities	94.6	102.1
	____________	____________
	718.7	736.7
	____________	____________

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Commitments and Contingencies (Commitments and Loss Contingency) (Details) - USD ($) $ in Millions	Jun. 30, 2015	Dec. 31, 2014
Legal Matters [Line Items]
Provisions for litigation loss, insurance claims and other disputes	$ 8.5	$ 16.9
Clinical Testing
Commitment [Line Items]
Commitment amount	430.0	382.0
Contract Manufacturing
Commitment [Line Items]
Commitment amount	310.0	384.0
Commitments expected to be paid in next year	107.0
Other Purchasing Commitment
Commitment [Line Items]
Commitment amount	275.0	265.0
Commitments expected to be paid in next year	266.0
Investment Commitment
Commitment [Line Items]
Commitment amount	58.0	67.0
Capital Commitment
Commitment [Line Items]
Commitment amount	$ 9.0	$ 3.0

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Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Statement of Income and Comprehensive Income [Abstract]
Unrealized holding gain/(loss) on available-for-sale securities, tax	$ 0.0	$ 0.4	$ 0.0	$ 2.1

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Consolidated Balance Sheets (Parenthetical) - £ / shares shares in Millions	Jun. 30, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Common Stock, Par Value (in GBP per share)	£ 0.05	£ 0.05
Common Stock, Shares Authorized	1,000.0	1,000.0
Common Stock, Shares, Issued	600.5	599.1
Common Stock, Shares, Outstanding	600.5	599.1
Treasury Stock, Shares	9.8	10.6

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Results of discontinued operations

6 Months Ended

Jun. 30, 2015

DiscontinuedOperationsAndDisposalGroupsAbstract

Results of discontinued operations Disclosure

7.Resultsof discontinued operations

Following the divestment of the Company's DERMAGRAFT business in January 2014, the operating results associated with the DERMAGRAFT business have been classified as discontinued operations in the consolidated statements of income for all periods presented. In the three and six months to June 30, 2015 the Company recorded a loss, net of tax of $4.5 million (2014: $5.2 million) and $7.0 million (2014: $27.9 million)respectively,primarily relating to costs associated with the divestment.

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Document and Entity Information - USD ($) shares in Millions, $ in Billions	6 Months Ended
	Jun. 30, 2015	Jul. 17, 2015
Document and Entity Information [Abstract]
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Central Index Key	0000936402
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Trading Symbol	SHP, SHPG
Entity Registrant Name	Shire plc
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	Yes
Entity Common Stock, Shares Outstanding		600.5
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2
Entity Public Float	$ 47.3

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Prepaid Expenses and Other Current Assets

6 Months Ended

Jun. 30, 2015

Prepaid Expense and Other Assets, Current [Abstract]

Prepaid Expense and Other Assets, Current

8.       Prepaid expenses and other current assets

	June 30,	December 31,
	2015	2014
	$’M	$’M
	______________	____________
Prepaid expenses	57.9	36.9
Income tax receivable	107.7	121.5
Value added taxes receivable	17.4	13.8
Other current assets	38.6	49.3
	______________	______________
	221.6	221.5
	______________	______________

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Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Revenues:
Product sales		$ 1,476.2	$ 1,469.6	$ 2,899.4	$ 2,777.7
Royalties		79.1	29.2	141.9	61.5
Other revenues		2.3	3.3	4.7	9.7
Total revenues		1,557.6	1,502.1	3,046.0	2,848.9
Costs and expenses:
Cost of product sales		228.0	277.0	455.8	506.5
Research and development	[1]	775.9	236.9	969.6	597.4
Selling, general and administrative	[1]	627.3	496.2	1,133.9	926.5
Gain on sale of product rights		(7.1)	(3.8)	(12.3)	(40.2)
Reorganization costs		13.3	45.8	28.5	95.2
Integration and acquisition costs		(212.4)	112.1	(136.7)	118.7
Total operating expenses		1,425.0	1,164.2	2,438.8	2,204.1
Operating income from continuing operations		132.6	337.9	607.2	644.8
Interest income		0.6	18.7	2.6	19.2
Interest expense		(11.3)	(11.1)	(20.9)	(18.9)
Other (expense)/ income, net		(2.0)	3.3	2.3	8.0
Total other (expense)/income, net		(12.7)	10.9	(16.0)	8.3
Income from continuing operations before income taxes and equity in earnings/(losses) of equity method investees		119.9	348.8	591.2	653.1
Income taxes		44.1	176.5	(13.3)	125.9
Equity in earnings/(losses) of equity method investees, net of taxes		0.1	3.0	(0.9)	2.4
Income from continuing operations, net of taxes		164.1	528.3	577.0	781.4
Loss from discontinued operations, net of taxes		(4.5)	(5.2)	(7.0)	(27.9)
Net income		$ 159.6	$ 523.1	$ 570.0	$ 753.5
Earnings Per Share, Basic [Abstract]
Earnings from continuing operations (in USD per share)		$ 0.278	$ 0.901	$ 0.978	$ 1.336
Loss from discontinued operations (in USD per share)		(0.008)	(0.009)	(0.012)	(0.048)
Earnings per ordinary share - basic (in USD per share)		0.270	0.892	0.966	1.288
Earnings Per Share, Diluted [Abstract]
Earnings from continuing operations (in USD per share)		0.277	0.895	0.973	1.323
Loss from discontinued operations (in USD per share)		(0.008)	(0.009)	(0.012)	(0.047)
Earnings per ordinary share - diluted (in USD per share)		$ 0.269	$ 0.886	$ 0.961	$ 1.276
Weighted average number of shares:
Basic (in shares)	[2]	590.5	586.4	589.8	585.3
Diluted (in shares)		593.2	590.3	593.0	590.3

[1] Research and development (“R&D”) includes IPR&D intangible asset impairment charges of $523.3 million for the three months to June 30, 2015 (2014: $22.0 million) and $523.3 million for the six months to June 30, 2015 (2014: $188.0 million). Selling, general and administrative (“SG&A”) costs include amortization of intangible assets relating to intellectual property rights acquired of $131.3 million for the three months to June 30, 2015 (2014: $61.2 million) and $219.6 million for the six months to June 30, 2015 (2014: $119.0 million).

[2] Excludes shares purchased by the EBT and presented by Shire as treasury stock

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Business Combinations

6 Months Ended

Jun. 30, 2015

Business Combinations [Abstract]

Business Combination Disclosure

2.       Business combinations

Acquisition of NPS Pharma

On February 21, 2015Shirecompleted its acquisition of 100% of the outstanding share capital of NPS Pharma. The acquisition-date fair value of cash consideration paid on closing was $5,220 million.

The acquisition of NPS Pharma added GATTEX/REVESTIVE, approved in the US and EU for the treatment of adults with short bowel syndrome (“SBS”), a rare and potentially fatal gastrointestinal disorder and NATPARA/NATPAR approved in the US for the treatment of hypoparathyroidism (“HPT”), a rare endocrine disease, to Shire's portfolio of currently marketed products.

The acquisition of NPS Pharmahas been accounted for as a business combination using the acquisition method. The assets acquired and the liabilities assumed from NPS Pharmahave been recorded at their preliminary fair values at the date of acquisition, being February 21, 2015. The Company's consolidated financial statements include the results of NPS Pharma from February 21, 2015.

The amount of NPS Pharma's post-acquisition revenues and pre-tax losses included in the Company's consolidated statement of income for the three months to June 30, 2015 were $80.9 million and $108.7 million respectively. The pre-tax loss includes charges on the unwind of inventory fair value adjustments of $5.2 million, intangible asset amortization of $71.4 million and integration costs of $43.3 million.

The amount of NPS Pharma's post-acquisition revenues and pre-tax losses included in the Company's consolidated statement of income for the six months to June 30, 2015 were $107.1 million and $159.9 million respectively. The pre-tax loss includes charges on the unwind of inventory fair value adjustments of $15.1 million, intangible asset amortization of $101.5 million and integration costs of $60.7 million.

During the second quarter of 2015, within the measurement period, the Company obtained both additional and improved information about the acquisition-date fair value of NPS Pharma inventories. This information included: an assessment and alignment of NPS Pharma's policy for classifying inventories as raw material, work-in-progress or finished goods with that of Shire; insight into the amount and carrying value of short-lived inventories; and insight into inventories which were available for commercial sale that were previously expensed by NPS Pharma as they were manufactured prior to the necessary regulatory approval. The Company's preliminary allocation of the purchase price to the assets acquired and liabilities assumed, including the measurement period adjustment with respect to inventories and certain other immaterial measurement period adjustments, is outlined below:

	Preliminary
	Fair value
	$’M
ASSETS
Current assets:
Cash and cash equivalents	41.6
Short-term investments	67.0
Accounts receivable	33.4
Inventories	89.4
Deferred tax assets	156.3
Other current assets	11.1
	_______________
Total current assets	398.8
Non-current assets:
PP&E	4.8
Goodwill	1,679.4
Other intangible assets
- currently marketed products	4,640.0
- royalty rights (categorized as "Other amortized intangible assets" )	353.0
	_______________
Total assets	7,076.0
	_______________
LIABILITIES
Current liabilities:
Accounts payable and other current liabilities	72.5
Short-term debt	27.4
Non-current liabilities:
Long-term debt, less current portion	78.9
Deferred tax liabilities	1,673.1
Other non-current liabilities	4.5
	_______________
Total liabilities	1,856.4
	_______________
Fair value of identifiable assets acquired and liabilities assumed	5,219.6
Consideration	_______________
Cash consideration paid	5,219.6
	_______________

The purchase price allocation is preliminary pending final determination of the fair values of certain assets and liabilities. In particular the fair values of intangible assets and current and deferred tax assets and liabilities are preliminary pending receipt of the final valuations for those items. The final determination of these fair values will be completed as soon as possible but no later than one year from the acquisition date.

(a) Other intangible assets – currently marketed products

Other intangible assets totaling $4,640.0 million relate to intellectual property rights acquired for NPS Pharma's currently marketed products, primarily attributed to NATPARA/NATPAR, and GATTEX/REVESTIVE. The fair value of the currently marketed products is preliminary and has been estimated using an income approach, based on the present value of incremental after tax cash flows attributable to each separately identifiable intangible asset.

The estimated useful lives of the NATPARA/NATPAR and GATTEX/REVESTIVE intangible assets are 24 years, with amortization being recorded on a straight-line basis.

(b) Other intangible assets – Royalty rights

Other intangibles totaling $353.0 million relate to the royalty rights arising from the collaboration agreements with Amgen, Janssen and Kyowa Hakko Kirin. Amgen markets cinacalcetHCl as Sensipar in the US and as Mimpara in the EU; Janssen Pharmaceuticals markets tapentadol as Nucynta in theUS; and Kyowa Hakko Kirin markets cinacalcet HCI as Regpara in Japan, Hong Kong, Malaysia, Macau, Singapore, and Taiwan. NPS Pharma is entitled to royalties from the relevant net sales of these products.

The fair value of these royalty rights is preliminary and has been estimated using an income approach, based on the present value of incremental after tax cash flows attributable to each royalty right.

The estimated useful lives of these royalty rights range from 4 to 5 years (weighted average 4 years), with amortization being recorded on a straight-line basis.

(c) Goodwill

Goodwill arising of $1,679.4million, which is not deductible for tax purposes, includes the expected synergies that will result from combining the operations of NPS Pharma with the operations of Shire,particularly those synergies expected to be realized due to Shire's structure; intangible assets that do not qualify for separate recognition at the time of the acquisition; and the value of the assembled workforce.

In the three and six months to June 30, 2015 the Company expensed costs of $47.8million and $117.7 millionrespectively, relating to the acquisition and post-acquisition integration of NPS Pharma, which have been recorded within Integration and acquisition costs in the Company's consolidated statement of income.

Supplemental disclosure of pro forma information

The following unaudited pro forma financial information presents the combined results of the operations of Shire and NPS Pharma as if the acquisition of NPS Pharma had occurred as at January 1, 2014. 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.

	6 months to	6 months to
	June 30,	June 30,
	2015	2014
	$’M	$’M
	_______________	_______________
Revenues	3,075.9	2,949.0
Net income from continuing operations	526.6	565.7
	_______________	_______________
Per share amounts:
Net income from continuing operations per share - basic	95.9c	96.6c
Net income from continuing operations per share - diluted	95.4c	95.8c
	_______________	_______________

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

• an adjustment to decrease net income by $107.2million for the period to June 30, 2014to reflect acquisition costs incurred by Shire and NPS Pharma, and increase net income by $107.2million for the period to June 30, 2015 to eliminate acquisition costs incurred;
• an adjustment to decrease net income by $9.2 million for the period to June 30, 2014 to reflect charges on the unwind of inventory fair value adjustments as acquisition date inventory is sold, and a corresponding increase in net income for the period to June 30, 2015;
• an adjustment of $11.1 million in the period to June 30, 2014 to reflect additional interest expense associated with the drawdown of debt to partially finance the acquisition of NPS Pharma and the amortization of related deferred debt issuance costs;
• an adjustment to increase amortization expense by approximately $21.1 million in the period to June 30, 2015 and $83.6 million in the period toJune 30, 2014 related to amortization of the fair value of identifiable intangible assets acquired and the elimination of NPS Pharma's historical intangible asset amortization expense; and

The adjustments above are stated net of their tax effects, where applicable.

Acquisition of Meritage Pharma Inc. (“Meritage”)

Prior to the acquisition of ViroPharmaby Shire (see below), ViroPharma had entered into an exclusive development and option agreement with Meritage, a privately owned US company focusing on developing oral budesonide suspension (“OBS”) as a treatment for eosinophilic esophagitis. Under the terms of this agreement Meritage controlled and conducted all related research up to achievement of pre-defined development success criteria at which point ViroPharma had the option to acquire Meritage.

On February 18, 2015, following the exercise of the purchase option, Shire acquired all the outstanding equity of Meritage. The acquisition date fair value of the consideration totaled $166.9 million, comprising cash consideration paid on closing of $74.8 million and the fair value of contingent consideration payable of $92.1 million. The maximum amount of contingent cash consideration which may be payable by Shire in future periods is $175.0 million dependent upon achievement of certain clinical development and regulatory milestones.

With the Meritageacquisition, Shire has acquired the global rights to Meritage's Phase 3-ready compound, OBS, for the treatment of adolescents and adults with eosinophilic esophagitis.

The acquisition of Meritage has been accounted for as a business combination using the acquisition method. The assets and liabilities assumed from Meritage have been recorded at their preliminary fair values at the date of acquisition, being February 18, 2015. The Company's consolidated financial statements and results of operations include the results of Meritage from February 18, 2015.

The purchase price allocation is preliminary pending the determination of the fair values of certain assets and liabilities. The purchase price has been allocated on a preliminary basis to the OBS IPR&D intangible asset ($175 million), net current assets assumed ($5.5 million), net non-current liabilities assumed (including deferred tax liabilities) ($54.7 million) and goodwill ($41.1 million). Goodwill arising of $41.1 million is not deductible for tax purposes.

Unaudited pro forma financial information to present the combined results of operations of Shire and Meritageis not provided as the impact of this acquisition is not material to the Company's results of operations for any period presented.

Acquisition of ViroPharma Incorporated (“ViroPharma”)

On January 24, 2014 Shire completed its acquisition of 100% of the outstanding share capital of ViroPharma. The acquisition-date fair value of cash consideration paid on closing was $3,997 million.

The acquisition of ViroPharma added CINRYZE to Shire's portfolio of currently marketed products. CINRYZE is a leading brand for the prophylactic treatment of Hereditary Angioedema (“HAE”) in adolescents and adults.

The acquisition of ViroPharma has been accounted for as a business combination using the acquisition method. The assets acquired and the liabilities assumed from ViroPharma have been recorded at their fair values at the date of acquisition, being January 24, 2014. The Company's consolidated financial statements include the results of ViroPharma from January 24, 2014.

The purchase price allocation was finalized in the fourth quarter of 2014. The Company's allocation of the purchase price to the fair value of assets acquired and liabilities assumed is outlined below:

	Acquisition date fair value
	$’M
Identifiable assets acquired and liabilities assumed
ASSETS
Current assets:
Cash and cash equivalents	232.6
Short-term investments	57.8
Accounts receivable	52.2
Inventories	203.6
Deferred tax assets	100.7
Purchased call option	346.7
Other current assets	50.9
	_______________
Total current assets	1,044.5
Non-current assets:
PP&E	24.7
Goodwill	1,655.5
Other intangible assets
- Currently marketed products	2,320.0
- In-Process Research and Development (“IPR&D”)	315.0
Other non-current assets	10.4
	_______________
Total assets	5,370.1
	_______________
LIABILITIES
Current liabilities:
Accounts payable and other current liabilities	122.7
Convertible bond	551.4
Non-current liabilities:
Deferred tax liabilities	603.5
Other non-current liabilities	95.5
	_______________
Total liabilities	1,373.1
	_______________
Fair value of identifiable assets acquired and liabilities assumed	3,997.0
	_______________
Consideration
Cash consideration paid	3,997.0
	_______________

(a) Other intangible assets – currently marketed products

Other intangible assets totaled $2,320.0 million at the date of acquisition, relating to intellectual property rights acquired for ViroPharma's then currently marketed products, primarily attributed to CINRYZE, for the routine prophylaxis against HAE attacks in adolescent and adult patients. Shire also obtained intellectual property rights to three other commercialized products, PLENADREN, an orphan drug for the treatment of adrenal insufficiency in adults, BUCCOLAM, an oromucosal solution for the treatment of prolonged, acute, and convulsive seizures in infants, toddlers, children and adolescents and VANCOCIN, an oral capsule formulation for the treatment of C. difficile-associated diarrhea (“CDAD”), which was divested by Shire in the third quarter of 2014. The fair value of currently marketed products has been estimated using an income approach, based on the present value of incremental after tax cash flows attributable to each separately identifiable intangible asset.

The estimated useful lives of the CINRYZE, PLENADREN and BUCCOLAM intangible assets range from 10to 23 years (weighted average 22 years), with amortization being recorded on a straight-line basis.

(b) Other intangible assets – IPR&D

The IPR&D asset of $315.0 millionrelates to maribavir (now SHP620), an investigational antiviral product for cytomegalovirus. The fair value of this IPR&D assetwas estimated based on an income approach, using the present value of incremental after tax cash flows expected to be generated by this development project after the deduction of contributory asset charges for other assets employed in this project. The estimated cash flows have been probability adjusted to take into account the stage of completion and the remaining risks and uncertainties surrounding the future development and commercialization.

The major risks and uncertainties associated with the timely completion of the acquired IPR&D project include the ability to confirm the efficacy of the technology based on the data from clinical trials, and obtaining the relevant regulatory approvals as well as other risks as described in the Company's Annual Report on Form 10-K. The valuation of IPR&D has been based on information available at the time of the acquisition (and information obtained during the measurement period) and on expectations and assumptions that (i) have been deemed reasonable by the Company's management and (ii) are based on information, expectations and assumptions that would be available to a market participant. However, no assurance can be given that the assumptions and events associated with such assets will occur as projected. For these reasons, the actual cash flows may vary from forecast future cash flows.

The estimated probability adjusted after tax cash flows used in fair valuing other intangible assets have been discounted at rates ranging from 9.5% to 10.0%.

(c) Goodwill

Goodwill arising of $1,655.5 million, which is not deductible for tax purposes, includes the expected operational synergies that will result from combining the commercial operations of ViroPharma with those of Shire (valued at approximately $400million); other synergies expected to be realized due to Shire's structure; intangible assets that do not qualify for separate recognition at the time of the acquisition; and the value of the assembled workforce.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2015

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

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 at December 31, 2014 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, 2014.

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, consisting only of normal recurring 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, sales deductions, income taxes (including provisions for uncertain tax positions and the realization of deferred tax assets), provisions for litigation and legal proceedings, contingent consideration receivable from product divestmentsandcontingent consideration payable in respect of business combinations and asset purchases. 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.

(c)       New accounting pronouncements

Adopted during the period

Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity

In April 2014 the Financial Accounting Standards Board (“FASB”) issued guidance on the reporting of discontinued operations and disclosures of disposals of components of an entity. The amendments in this update revise the definition of discontinued operations by limiting discontinued operations reporting to disposals of components of an entity that represent strategic shifts that have (or will have) a major effect on an entity's operations and financial results. The guidance requires expanded disclosures for discontinued operations which provide users of financial statements with more information about the assets, liabilities, revenues, and expenses of discontinued operations. The guidance also requires an entity to disclose the pre-tax profit or loss of an individually significant component of an entity that does not qualify for discontinued operations reporting.

Shire adopted this guidance in the period, which will be effective for discontinued operations occurring after January 1, 2015. The adoption of this guidance did not impact the Company's consolidated financial position, results of operations or cash flows.

To be adopted in future periods

Revenue from Contracts with Customers

In May 2014 the FASB and the International Accounting Standards Board (together the “Accounting Standards Boards”) issued a new accounting standard that is intended to clarify and converge the financial reporting requirements for revenue from contracts with customers. The core principle of the standard is that an “entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services”. To achieve that core principle the Accounting Standards Boards developed a five-step model (as presented below) and related application guidance, which will replace most existing revenue recognition guidance in US GAAP.

Five-step model:

Step 1: Identify the contract(s) with a customer.

Step 2: Identify the performance obligations in the contract.

Step 3: Determine the transaction price.

Step 4: Allocate the transaction price to the performance obligations in the contract.

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

The Accounting Standards Boards also issued new qualitative and quantitative disclosure requirements as part of the new accounting standard which aims to enable financial statement users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

In July 2015 the FASB decided to defer the effective date of the guidance by one year. Based on this deferral, public entities would need to apply the new guidance for annual reporting periods beginning after December 15, 2017, and interim periods therein. The Company is currently evaluating the impact of adopting this guidance.

Amendments to the Consolidation Analysis

In February 2015 the FASB issued guidanceto respond to stakeholders' concerns about the current accounting for consolidation of certain legal entities. Financial statement users asserted that in certain situations in which consolidation is ultimately required, deconsolidated financial statements are necessary to better analyze the reporting entity's economic and operational results. Previously, the FASB issued an indefinite deferral for certain entities to partially address those concerns. However, the amendments in this guidance rescind that deferral and address those concerns by making changes to the consolidation guidance.

Under the amendments, all reporting entities are within the scope of Subtopic 810-10, Consolidation, including limited partnerships and similar legal entities, unless a scope exception applies. The presumption that a general partner controls a limited partnership has been eliminated. In addition, fees paid to decision makers that meet certain conditions no longer cause decision makers to consolidate a VIE in certain instances. The amendments place more emphasis in the consolidation evaluation on variable interests other than fee arrangements such as principal investment risk (for example, debt or equity interests), guarantees of the value of the assets or liabilities of the VIE, written put options on the assets of the VIE, or similar obligations, including some liquidity commitments or agreements (explicit or implicit). Additionally, the amendments reduce the extent to which related party arrangements cause an entity to be considered a primary beneficiary.

The amendments are effective for public business entities for fiscal years, and for interim periods therein, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. The Company does not expect the adoption of this guidance to have a material effect on its consolidated financial position, results of operations and cash flows.

Simplifying the Presentation of Debt Issuance Costs

In April 2015 the FASB issued guidancetosimplify the presentation of debt issuance costs. The guidance requires that debt issuance costs related to a recognized debt liability be presentedin the balance sheet as a directdeduction from the carrying amount of that debtliability, consistent with debt discounts. The recognition andmeasurementguidance for debt issuance costs are not affected by the amendments in this update. The amendments in this update are effective forfinancial statements issued for fiscal years beginning after December 15, 2015,and interim periods therein.

Early adoption of the amendments in this update is permitted for financial statements that have not been previously issued. An entity should apply the new guidance on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. Upon transition, an entity is required to comply with the applicable disclosures for a change in an accounting principle. The Company does not expect the adoption of this guidance to have a material effect on its consolidated financial position, results of operations and cash flows.

Customer's Accounting for Fees Paid in aCloud Computing Arrangement

In April 2015 the FASB issued guidance to simplify the customer's accounting for fees paid in a cloud computing arrangement. The amendments provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The amendments will be effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted for all entities. An entity can elect to adopt the guidance either a) prospectively to all arrangements entered into or materially modified after the effective date or b) retrospectively.The Company is currently evaluating the impact of adopting this guidance.

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Borrowings

6 Months Ended

Jun. 30, 2015

Debt Disclosure [Abstract]

Borrowings Disclosure

13.Borrowings

	June 30,	December 31,
	2015	2014
	$’M	$’M
	_____________	_____________
Short term borrowings:
Borrowings under the 2015 Facility Agreement	850.0	-
Borrowings under the 2013 Facilities Agreement	400.0	850.0
Borrowings under the RCF	920.0	-
Borrowings under short term Credit lines	50.0	-
Secured non-recourse debts	9.9	-
	_____________	_____________
	2,229.9	850.0
Long term borrowings:
Secured non-recourse debts	73.9	-
	_____________	_____________
	2,303.8	850.0
	_____________	_____________

Term Loan Agreements

2015 Facility Agreement

On January 11, 2015, Shire entered into an $850 million Facility Agreement with, among others, CitiGroupGlobal Markets Limited (acting as mandated lead arranger and bookrunner) (the “2015 Facility Agreement”).  At June 30, 2015 the 2015 Facility Agreement, which matures on January 10, 2016,was fully utilized. The maturity date may be extended twice, at Shire's option, by six months on each occasion.

The 2015 Facility Agreementhas been used to partially finance the purchase price payable in respect of Shire's acquisition of NPS Pharma (including certain related costs). See the Company's 2014 Annual Report on Form 10-K for details of the 2015 Facility Agreement.

2013 Facilities Agreement

On November 11, 2013, Shire entered into a $2,600million facilities agreement with, among others, Morgan Stanley Bank International Limited (acting as mandated lead arranger andbookrunner) (the “2013 Facilities Agreement”).  The 2013 Facilities Agreement comprised two credit facilities: (i) a $1,750million term loan facility and (ii) an $850million term loan facility.  

On December 13, 2013 and at various points thereafter, the Company cancelled parts of the $2,600 million term loan facility. At June 30, 2015 the 2013 Facilities Agreement was comprised of a $400 million term loan facility which matures on November 11, 2015 and was fully utilized.

The $400 millionremaining borrowing from the 2013 Facilities Agreementwas used to partially finance the purchase price payable in respect of Shire's acquisition of ViroPharma (including certain related costs) during the year ended December 31, 2014.See the Company's 2014 Annual Report on Form 10-K for details of the 2013 Facilities Agreement.

Revolving Credit Facility (“RCF”)

On December 12, 2014, Shire entered into a $2,100 million RCF with a number of financial institutions.See the Company's 2014 Annual Report on Form 10-K for details. At June 30, 2015 the Company has utilized $920 million of the RCF to partially finance the purchase price payable in respect of Shire's acquisition of NPS Pharma (including certain related costs).

The RCF, which terminates on December 12, 2019, may be applied towards financing the general corporate purposes of Shire. The RCF incorporates a $250 million US dollar and euro swingline facility operating as a sub-limit thereof.

Secured Non-recourse Debts

Prior to the acquisition by Shire, NPS Pharma had:

• partially monetized rights to receive future royalty payments from Amgen's sales of SENSIPAR and MIMPARA through the issuance of $145 million of non-recourse debt that is both serviced and secured by SENSIPAR and MIMPARA royalty revenue;
• sold to DRI Capital Inc. (“DRI”) certain rights to receive up to $96 million of future royalty payments arising from Kyowa Hakko Kirin's sales of REGPARA and granted DRI a security interest in the license agreement with Kyowa Hakko Kirin, certain patents and other intellectual property related to REGPARAwhich DRI would be entitled to enforce in the event of default by NPS Pharma; and
• partially monetized PTH-184 (now marketed as NATPARA) through an agreement with an affiliate of DRI pursuant to which NPS Pharma, its licensees and its predecessors in interest, are obligated to pay up to $125 million royalties on sales of PTH-184. Additionally, NPS Pharma granted DRI a security interest in certain patents and other intellectual property related to PTH 1-84 which DRI would be entitled to enforce in the event of default by NPS Pharma.

Following the acquisition of NPS Pharma the Company has assumed these secured non-recourse debt obligations.

In May 2015 the Company notified Amgen that it intended to repay in full the remaining non-recourse debt. The repayment was effected on May 15, 2015 by Amgen withholding certain royalties that were due to the Company from SENSIPAR and MIMPARA sales in the first quarter of 2015.

As at June 30, 2015 $9.9 million has been included within Short-term borrowings, and $73.9 million has been included within Long-term borrowings in respect of the remaining obligations to DRI.

Short term uncommitted lines of credit (“Credit lines”)

Shire has access to various Credit lines from a number of banks which provide flexibility to short term cash management procedures. These Credit lines can be withdrawn by the banks at any time. The Credit lines are not relied upon for core liquidity. As at June 30, 2015 $50million was borrowed under these Credit lines.

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Goodwill

6 Months Ended

Jun. 30, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill Disclosure

9.Goodwill

	June 30,	December 31,
	2015	2014
	$’M	$’M
	____________	____________
Goodwill arising on businesses acquired	4,173.2	2,474.9
	____________	____________

In the six months to June 30, 2015 the Company completed the acquisitions of NPS Pharma and Meritage, which resulted in aggregate goodwill with a preliminary value of $1,720.5 million (see Note 2 for details).

	2015	2014
	$’M	$’M
	____________	____________
As at January 1,	2,474.9	624.6
Acquisitions	1,720.5	1,662.7
Foreign currency translation	(22.2)	(3.9)
	____________	____________
As at June 30,	4,173.2	2,283.4
	____________	____________

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Accounts Receivable, Net

6 Months Ended

Jun. 30, 2015

Receivables [Abstract]

Accounts Receivable Disclosure

5.Accounts receivable, net

Accounts receivable at June 30, 2015 of $1,099.2 million(December 31, 2014: $1,035.1 million), are stated net of a provision for discounts and doubtful accounts of $53.5 million (December 31, 2014: $48.5million).

Provision for discounts and doubtful accounts:

	2015	2014
	$’M	$’M
	_____________	_____________
As at January 1,	48.5	47.9
Provision charged to operations	186.6	163.1
Provision utilization	(181.6)	(165.7)
	_____________	_____________
As at June 30,	53.5	45.3
	_____________	_____________

At June 30, 2015 accounts receivable included $69.8million (December 31, 2014: $59.0million) related to royalty income.

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Other Intangible Assets, Net (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2015		Jun. 30, 2014	Dec. 31, 2014	Dec. 31, 2013
Intangible Assets (Excluding Goodwill) [Line Items]
Amortized intangible assets	$ 9,791.1			$ 4,846.9
Other intangible assets, gross	10,973.3			6,396.9
Less: Accumulated amortization	(1,662.9)			(1,462.5)
Other intangible assets, net	9,310.4		$ 5,325.5	4,934.4	$ 2,312.6
Other Disclosures
Acquisitions	5,167.8		3,321.4
Impairment charges	523.3		188.0
Change in fair value of contingent consideration	(255.7)		21.4
Estimates of Annual Amortization
2015	476.0
2016	476.0
2017	476.0
2018	476.0
2019	476.0
Lumena and Lotus Tissue Repair
Other Disclosures
Change in fair value of contingent consideration	(280.0)
Currently Marketed Products
Intangible Assets (Excluding Goodwill) [Line Items]
Amortized intangible assets	9,416.1			4,816.9
Royalty rights
Intangible Assets (Excluding Goodwill) [Line Items]
Amortized intangible assets	375.0	[1]		30.0
IPR&D
Intangible Assets (Excluding Goodwill) [Line Items]
Unamortized intangible assets	1,182.2			$ 1,550.0
IPR&D | Meritage
Other Disclosures
Acquisitions	175.0
SHP602 IPR&D
Other Disclosures
Impairment charges			166.0
SHP613
Other Disclosures
Impairment charges			$ 22.0
Currently marketed products and royalty rights | NPS Pharma
Other Disclosures
Acquisitions	4,993.0
SHP625
Other Disclosures
Unamortized intangible assets, fair value	120.4
Impairment charges	346.6
SHP608
Other Disclosures
Impairment charges	$ 176.7

[1] Other intangible assets primarily comprises of royalty right assets acquired with NPS Pharma.

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Reorganization Costs

6 Months Ended

Jun. 30, 2015

Restructuring and Related Activities [Abstract]

Reorganization Costs Disclosure

3.Reorganization costs

One Shire business reorganization

On May 2, 2013, the Company initiated the reorganization of its business to integrate the three divisions into a simplified One Shire organization in order to drive future growth and innovation.

In 2014 certain aspects of the One Shire program were temporarily put on hold due to AbbVie's offer for Shire, which was terminated in October 2014. Subsequent to the termination of AbbVie's offer, Shire announced on November 10, 2014 its plans to relocate over 500 positions to Lexington,Massachusetts from its Chesterbrook, Pennsylvania, site and establish Lexington as the Company's US operational headquarters in continuation of the One Shire efficiency program. This relocation will streamline business globally through two principal locations, Massachusetts and Switzerland, with support from regional and country-based offices around the world.

In the three and six months to June 30, 2015 the Company incurred reorganization costs totaling $13.3 million and $28.5 million, respectively relating to employee involuntary termination benefits and other reorganization costs. Reorganization costs of $274.0 million have been incurred since May 2013. The One Shire reorganization is expected to be substantially completed by the endof 2015. Currently, the Company estimates that further costs in respect of the One Shire reorganization of approximately $102 million will be expensed as incurred during 2015.

The liability for reorganization costs arising from the One Shire business reorganization at June 30, 2015 is as follows:

	Opening liability	Amount		Closing liability at
	at January 1,	charged to re-		June 30,
	2015	organization	Paid/Utilized	2015
	$'M	$'M	$'M	$'M
	___________	____________	___________	___________
Involuntary termination benefits	38.0	19.7	(26.4)	31.3
Other reorganization costs	-	8.8	(6.9)	1.9
	___________	___________	___________	___________
	38.0	28.5	(33.3)	33.2
	___________	___________	___________	___________

At June 30, 2015the closing reorganization cost liability was recorded within accounts payable and accrued expenses.

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Integration and acquisition costs

6 Months Ended

Jun. 30, 2015

IntegrationAndAcquisitionCosts[Abstract]

Integration and acquisition costs

4.       Integration and acquisition costs

For the three and six months to June 30, 2015 Shire recorded a net credit to integration and acquisition costs of $212.4 million and $136.7 million respectively. The net credit principally comprises (i) costs related to the acquisition and integration of NPS Pharma ($47.8 million and $117.7 million in the three and six months to June 30, 2015 respectively), offset by (ii) a net credit relating to the change in the fair value of contingent consideration liabilities of $258.1 million and $255.7 million in the three and six months to June 30, 2015 respectively. The net credit relating to the change in fair value of contingent consideration liabilities principally relates to the acquisition of Lumena Pharmaceuticals, Inc. (“Lumena”), reflecting a lower probability of success for the SHP625 asset (for the treatment of cholestatic liver diseases) following the receipt of data from certain Phase 2 studies, and the acquisition of Lotus Tissue Repair, Inc. (“Lotus Tissue Repair”), reflecting a lower probability of success for the SHP608 asset (for the treatment of Dystrophic Epidermolysis Bullosa (“DEB”))as a result of certain preclinical toxicity findings (see note 10 for further details).

In the three and six months to June 30, 2014 Shire recorded integration and acquisition costs of $112.1 million and $118.7 million respectively. In the three months to June 30, 2014 the charge comprised an $80.6 million net charge on the fair value of contingent consideration liabilities (principally in relation to the acquisition of SARcodeBioscience Inc. (“SARcode”), reflecting Shire's increased confidence in the SHP606 asset) and $31.5 million relating to the acquisition and integration of ViroPharma. In the six months to June 30, 2014 the charge comprised $97.3 million relating to the acquisition and integration of ViroPharma and a net charge on the fair value of contingent consideration liabilities of $21.4 million (principally in relation to SARcode, as outlined above, offset by credits in relation to the acquisition of FerroKinBioSciences, Inc., reflecting the decision to place the Phase 2 clinical trial for SHP602 on clinical hold).

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Inventories

6 Months Ended

Jun. 30, 2015

Inventory Disclosure [Abstract]

Inventory Disclosure

6.       Inventories

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

	June 30,	December 31,
	2015	2014
	$’M	$’M
	____________	____________
Finished goods	136.8	136.0
Work-in-progress	383.1	305.3
Raw materials	112.9	103.5
	____________	____________
	632.8	544.8
	____________	____________

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Borrowings (Details) $ in Millions	6 Months Ended
	Jun. 30, 2015 USD ($) contract	Feb. 11, 2015 USD ($)	Dec. 31, 2014 USD ($)	Dec. 12, 2014 USD ($)	Jun. 30, 2014 USD ($)	Nov. 11, 2013 USD ($)
Line of Credit Facility [Line Items]
Long-term borrowings	$ 73.9		$ 0.0
Short-term borrowings	2,229.9		850.0
Borrowing, Long-term and Short-term ,Combined Amount	$ 2,303.8		850.0
2013 Facilities Agreement
Line of Credit Facility [Line Items]
Facility agreement initiation date	Nov. 11, 2013
Facilitiy agreement total amount	$ 400.0				$ 400.0	$ 2,600.0
Number of term loan facilities | contract	2
Short-term borrowings	$ 400.0		850.0
2015 Facility Agreement
Line of Credit Facility [Line Items]
Facility agreement initiation date	Jan. 11, 2015
Facilitiy agreement total amount		$ 850.0			$ 850.0
Facility agreement expiration date	Jan. 10, 2016
Short-term borrowings	$ 850.0		0.0
Secured Non-recourse Debts
Line of Credit Facility [Line Items]
Long-term borrowings	73.9		0.0
Short-term borrowings	9.9		0.0
Sensipar and Mimpara Debt, Amgen
Line of Credit Facility [Line Items]
Principal amount	145.0
Regpara Debt, DRI
Line of Credit Facility [Line Items]
Debt instrument, maximum obligation	96.0
PTH-184 Debt, DRI
Line of Credit Facility [Line Items]
Debt instrument, maximum obligation	$ 125.0
Term loan facility one | 2013 Facilities Agreement
Line of Credit Facility [Line Items]
Term loan facility						1,750.0
Term loan facilitly two | 2013 Facilities Agreement
Line of Credit Facility [Line Items]
Facility agreement expiration date	Nov. 11, 2015
Term loan facility						$ 850.0
Revolving Credit Facility
Line of Credit Facility [Line Items]
Facility agreement initiation date	Dec. 12, 2014
Facility agreement expiration date	Dec. 12, 2019
Swingline Facility	$ 250.0
Principal amount				$ 2,100.0
Short-term borrowings	920.0		0.0
Short term uncommitted lines of credit
Line of Credit Facility [Line Items]
Short-term borrowings	$ 50.0		$ 0.0

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Commitments and Contingencies (Leases, and LC and Guarantees ) (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Future Minimum Lease Payments under Operating Leases
2015	$ 25.0
2016	42.1
2017	32.6
2018	25.0
2019	20.8
2020	20.0
Thereafter	125.9
Future minimum lease payments, total	291.4
Operating Leases, Rent Expense
Lease and rental expense	24.3	$ 20.8
Letters of credit and guarantees
Irrevocable standby letters of credit and guarantees	$ 48.0

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Other Current Liabilities (Details) - USD ($) $ in Millions	Jun. 30, 2015	Dec. 31, 2014
Other Liabilities, Current [Abstract]
Income taxes payable	$ 60.6	$ 16.2
Value added taxes	19.5	16.6
Contingent consideration payable	19.5	194.5
Other current liabilities	45.9	35.2
Other current liabilities, total	$ 145.5	$ 262.5

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Business Combinations (Tables)

6 Months Ended

Jun. 30, 2015

NPS Pharma

Business Acquisition [Line Items]

Schedule of Purchase Price Allocation

	Preliminary
	Fair value
	$’M
ASSETS
Current assets:
Cash and cash equivalents	41.6
Short-term investments	67.0
Accounts receivable	33.4
Inventories	89.4
Deferred tax assets	156.3
Other current assets	11.1
	_______________
Total current assets	398.8
Non-current assets:
PP&E	4.8
Goodwill	1,679.4
Other intangible assets
- currently marketed products	4,640.0
- royalty rights (categorized as "Other amortized intangible assets" )	353.0
	_______________
Total assets	7,076.0
	_______________
LIABILITIES
Current liabilities:
Accounts payable and other current liabilities	72.5
Short-term debt	27.4
Non-current liabilities:
Long-term debt, less current portion	78.9
Deferred tax liabilities	1,673.1
Other non-current liabilities	4.5
	_______________
Total liabilities	1,856.4
	_______________
Fair value of identifiable assets acquired and liabilities assumed	5,219.6
Consideration	_______________
Cash consideration paid	5,219.6
	_______________

Business Acquisition, Pro Forma Information

	6 months to	6 months to
	June 30,	June 30,
	2015	2014
	$’M	$’M
	_______________	_______________
Revenues	3,075.9	2,949.0
Net income from continuing operations	526.6	565.7
	_______________	_______________
Per share amounts:
Net income from continuing operations per share - basic	95.9c	96.6c
Net income from continuing operations per share - diluted	95.4c	95.8c
	_______________	_______________

Viropharma

Business Acquisition [Line Items]

Schedule of Purchase Price Allocation

	Acquisition date fair value
	$’M
Identifiable assets acquired and liabilities assumed
ASSETS
Current assets:
Cash and cash equivalents	232.6
Short-term investments	57.8
Accounts receivable	52.2
Inventories	203.6
Deferred tax assets	100.7
Purchased call option	346.7
Other current assets	50.9
	_______________
Total current assets	1,044.5
Non-current assets:
PP&E	24.7
Goodwill	1,655.5
Other intangible assets
- Currently marketed products	2,320.0
- In-Process Research and Development (“IPR&D”)	315.0
Other non-current assets	10.4
	_______________
Total assets	5,370.1
	_______________
LIABILITIES
Current liabilities:
Accounts payable and other current liabilities	122.7
Convertible bond	551.4
Non-current liabilities:
Deferred tax liabilities	603.5
Other non-current liabilities	95.5
	_______________
Total liabilities	1,373.1
	_______________
Fair value of identifiable assets acquired and liabilities assumed	3,997.0
	_______________
Consideration
Cash consideration paid	3,997.0
	_______________

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Business Combinations (ViroPharrma,NPS Pharma, Meritage) (Details) - USD ($) $ in Millions				3 Months Ended		6 Months Ended
	Feb. 21, 2015	Feb. 18, 2015	Dec. 31, 2014	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2013
Non-current assets:
Goodwill			$ 2,474.9	$ 4,173.2	$ 2,283.4	$ 4,173.2	$ 2,283.4	$ 624.6
Pro Forma Information
Post acquisition unwind of inventory fair value adjustment included in consolidated statement of income						16.3	72.5
Integration and acquisition costs				(212.4)	$ 112.1	(136.7)	$ 118.7
NPS Pharma
Business Acquisition [Line Items]
Percentage of voting interests acquired	100.00%
Cash consideration paid	$ 5,219.6
Acquisition-date fair value of consideration	5,219.6
Current assets:
Cash and cash equivalents	41.6
Short term investments	67.0
Accounts receivable	33.4
Inventories	89.4
Deferred tax assets	156.3
Other current assets	11.1
Total current assets	398.8
Non-current assets:
Property, plant and equipment	4.8
Goodwill	1,679.4
Total assets	7,076.0
Current liabilities:
Accounts payable and other current liabilities	72.5
Short-term debt	27.4
Non-current liabilities:
Long term debt, less current portion	78.9
Deferred tax liabilities	1,673.1
Other non-current liabilities	4.5
Total liabilities	1,856.4
Fair value of identified assets acquired and liabilities assumed	5,219.6
Pro Forma Information
Post acquisition revenues included in consolidated statement of income				80.9		107.1
Post acquisition pre-tax losses included in consolidated statement of income				108.7		159.9
Post acquisition amortization of intangible assets included in consolidated statement of income				71.4		101.5
Post acquisition unwind of inventory fair value adjustment included in consolidated statement of income				5.2		15.1
Post acquisition integration costs included in consolidated statement of income				43.3		60.7
Integration and acquisition costs				$ 47.8		$ 117.7
NPS Pharma | Currently Marketed Products
Non-current assets:
Other intangible assets, net	$ 4,640.0
NPS Pharma | Currently Marketed Products | GATTEX/REVESTIVE
Pro Forma Information
Estimated useful life of intangible assets	24 years
NPS Pharma | Currently Marketed Products | NATPARA/NATPAR
Pro Forma Information
Estimated useful life of intangible assets	24 years
NPS Pharma | Royalty rights
Non-current assets:
Other intangible assets, net	$ 353.0
Pro Forma Information
Weighted average amortization period of acquired amortizable intangible assets	4 years
NPS Pharma | Royalty rights | Minimum
Pro Forma Information
Estimated useful life of intangible assets	4 years
NPS Pharma | Royalty rights | Maximum
Pro Forma Information
Estimated useful life of intangible assets	5 years
Viropharma
Business Acquisition [Line Items]
Percentage of voting interests acquired			100.00%
Cash consideration paid			$ 3,997.0
Acquisition-date fair value of consideration			3,997.0
Expected operational synergies that will result from combining the commercial operations of Viropharma with those of Shire			400.0
Current assets:
Cash and cash equivalents			232.6
Short term investments			57.8
Accounts receivable			52.2
Inventories			203.6
Deferred tax assets			100.7
Purchased call option			346.7
Other current assets			50.9
Total current assets			1,044.5
Non-current assets:
Property, plant and equipment			24.7
Goodwill			1,655.5
Other non-current assets			10.4
Total assets			5,370.1
Current liabilities:
Accounts payable and other current liabilities			122.7
Short-term debt			551.4
Non-current liabilities:
Deferred tax liabilities			603.5
Other non-current liabilities			95.5
Total liabilities			1,373.1
Fair value of identified assets acquired and liabilities assumed			$ 3,997.0
Pro Forma Information
Discount rate used in determining fair value of acquired in process research and development, low rate			9.50%
Discount rate used in determining fair value of acquired in process research and development, high rate			10.00%
Viropharma | Currently Marketed Products
Non-current assets:
Other intangible assets, net			$ 2,320.0
Pro Forma Information
Weighted average amortization period of acquired amortizable intangible assets			22 years
Viropharma | Currently Marketed Products | Minimum
Pro Forma Information
Estimated useful life of intangible assets			10 years
Viropharma | Currently Marketed Products | Maximum
Pro Forma Information
Estimated useful life of intangible assets			23 years
Viropharma | IPR&D
Non-current assets:
Other intangible assets, net			$ 315.0
Meritage
Business Acquisition [Line Items]
Cash consideration paid		$ 74.8
Acquisition-date fair value of consideration		166.9
Maximum amount of contingent cash consideration		175.0
Fair value of contingent consideration payable		92.1
Current assets:
Total current assets		5.5
Non-current assets:
Goodwill		41.1
Non-current liabilities:
Total liabilities		54.7
Fair value of identified assets acquired and liabilities assumed		166.9
Meritage | IPR&D | OBS
Non-current assets:
Other intangible assets, net		$ 175.0

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Accounts Payable and Accrued Expenses

6 Months Ended

Jun. 30, 2015

Accounts Payable and Accrued Liabilities, Current [Abstract]

Accounts Payable and Accrued Expenses Disclosure

11.       Accounts payable and accrued expenses

	June 30,	December 31,
	2015	2014
	$’M	$’M
	________________	________________
Trade accounts payable and accrued purchases	286.8	247.7
Accrued rebates – Medicaid	606.5	563.9
Accrued rebates – Managed care	310.7	318.2
Sales return reserve	137.5	131.7
Accrued bonuses	121.0	150.7
Accrued employee compensation and benefits payable	150.3	109.1
R&D accruals	66.5	88.3
Other accrued expenses	260.4	299.8
	________________	________________
	1,939.7	1,909.4
	________________	________________

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Accumulated Other Comprehensive Income

6 Months Ended

Jun. 30, 2015

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive Income (Loss)

16.Accumulated Other Comprehensiveloss

The changes in accumulated other comprehensive loss, net of their related tax effects, in the six months to June 30, 2015 and 2014 are included below:

As at June 30, 2015		Foreign currency translation adjustment	Unrealized holding loss on available-for-sale securities	Accumulated other comprehensive loss
		$M	$M	$M
As at January 1, 2015		(25.7)	(5.8)	(31.5)
Current period change:
Net current period other comprehensive (loss)/income		(83.3)	3.3	(80.0)
As at June 30, 2015		(109.0)	(2.5)	(111.5)
As at June 30, 2014		Foreign currency translation adjustment	Unrealized holding gain/(loss) on available-for-sale securities	Accumulated other comprehensive income
		$M	$M	$M
As at January 1, 2014		110.4	(0.2)	110.2
Current period change:
	Other comprehensive income before reclassification	10.2	6.9	17.1
	Gain transferred to the income statement (within Other income, net) on disposal of available-for-sale securities	-	(3.2)	(3.2)
Net current period other comprehensive income		10.2	3.7	13.9
As at June 30, 2014		120.6	3.5	124.1

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2015

Earnings Per Share [Abstract]

Schedule of Calculation of Numerator and Denominator in Earnings Per Share

	3 months to	3 months to	6 months to	6 months to
	June 30,	June 30,	June 30,	June 30,
	2015	2014	2015	2014
	$’M	$’M	$’M	$’M
	_________________	_________________	_________________	_________________
Income from continuing operations, net of taxes	164.1	528.3	577.0	781.4
Loss from discontinued operations1	(4.5)	(5.2)	(7.0)	(27.9)
	_________________	_________________	_________________	_________________
Numerator for basic and diluted earnings per share	159.6	523.1	570.0	753.5
	_________________	_________________	_________________	_________________

Schedule of Weighted Average Number of Shares

Weighted average number of shares:
	Millions	Millions	Millions	Millions
	_________________	_________________	_________________	_________________
Basic 1	590.5	586.4	589.8	585.3
Effect of dilutive shares:
Share-based awards to employees 2	2.7	3.9	3.2	5.0
	_________________	_________________	_________________	_________________
Diluted	593.2	590.3	593.0	590.3
	_________________	_________________	_________________	_________________

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

	3 months to	3 months to	6 months to	6 months to
	June 30,	June 30,	June 30,	June 30,
	2015	2014	2015	2014
	No. of shares	No. of shares	No. of shares	No. of shares
	Millions	Millions	Millions	Millions
	_________________	_________________	_________________	_________________
Share-based awards to employees1	1.0	0.3	3.2	1.2
	_________________	_________________	_________________	_________________

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Accounts Payable and Accrued Expenses (Tables)

6 Months Ended

Jun. 30, 2015

Accounts Payable and Accrued Liabilities, Current [Abstract]

Schedule of Accounts Payable and Accrued Expenses

	June 30,	December 31,
	2015	2014
	$’M	$’M
	________________	________________
Trade accounts payable and accrued purchases	286.8	247.7
Accrued rebates – Medicaid	606.5	563.9
Accrued rebates – Managed care	310.7	318.2
Sales return reserve	137.5	131.7
Accrued bonuses	121.0	150.7
Accrued employee compensation and benefits payable	150.3	109.1
R&D accruals	66.5	88.3
Other accrued expenses	260.4	299.8
	________________	________________
	1,939.7	1,909.4
	________________	________________

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Consolidated Statements of Income (Parenthetical) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Intangible Assets (Excluding Goodwill) [Line Items]
Amortization of intangible assets			$ 219.6	$ 119.0
Impairment of unamortized intangible assets	$ 523.3	$ 22.0	523.3	188.0
Acquired Intellectual Property Rights
Intangible Assets (Excluding Goodwill) [Line Items]
Amortization of intangible assets	$ 131.3	$ 61.2	$ 219.6	$ 119.0

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Consolidated Statements of Cash Flows - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 570.0	$ 753.5
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	291.8	204.8
Share-based compensation	44.3	55.7
Change in fair value of contingent consideration	(255.7)	21.4
Impairment of intangible assets	523.3	188.0
Write down of assets	0.0	13.0
Gain on sale of product rights	(12.3)	(40.2)
Unwind of inventory fair value step-ups	16.3	72.5
Other, net	11.1	14.1
Movement in deferred taxes	(79.4)	25.3
Equity in losses/(earnings) of equity method investees	0.9	(2.4)
Changes in operating assets and liabilities:
Increase in accounts receivable	(84.9)	(37.3)
Iincrease in sales deduction accruals	37.3	106.0
Increase in inventory	(37.4)	(11.7)
Decrease/(increase) in prepayments and other assets	28.4	(137.5)
Decrease in accounts and notes payable and other liabilities	(39.8)	(145.1)
Net cash provided by operating activities	1,013.9	1,080.1
CASH FLOWS FROM INVESTING ACTIVITIES:
Movements in restricted cash	(19.5)	(11.9)
Purchases of subsidiary undertakings and businesses, net of cash acquired	(5,249.2)	(4,018.3)
Purchases of non-current investments	(4.9)	(3.1)
Purchases of PP&E	(39.8)	(19.1)
Proceeds from short-term investments	67.0	56.3
Proceeds received on sale of product rights	8.8	52.8
Proceeds from disposal of non-current investments	4.4	8.0
Other, net	(0.9)	(2.8)
Net cash used in investing activities	(5,234.1)	(3,938.1)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from revolving line of credit, long-term and short-term borrowings	2,925.6	2,310.8
Repayment of revolving line of credit and short term borrowings	(1,530.9)	(1,251.6)
Repayment of debt acquired through business combinations	0.0	(551.5)
Proceeds from ViroPharma call options	0.0	346.7
Payment of dividend	(110.2)	(99.6)
Excess tax benefit associated with exercise of stock options	27.0	29.1
Contingent consideration payments	(4.5)	(10.3)
Other, net	(4.5)	(0.3)
Net cash provided by financing activities	1,302.5	773.3
Effect of foreign exchange rate changes on cash and cash equivalents	(0.7)	(1.1)
Net decrease in cash and cash equivalents	(2,918.4)	(2,085.8)
Cash and cash equivalents at beginning of period	2,982.4	2,239.4
Cash and cash equivalents at end of period	64.0	153.6
Supplemental information associated with continuing operations:
Interest paid	(9.9)	(7.7)
Income taxes paid	(65.2)	(165.1)
Income taxes repaid	$ 65.2	$ 248.0

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Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Millions	Jun. 30, 2015	Dec. 31, 2014
Prepaid Expense and Other Assets, Current [Abstract]
Prepaid expenses	$ 57.9	$ 36.9
Income tax receivable	107.7	121.5
Value added taxes receivable	17.4	13.8
Other current assets	38.6	49.3
Prepaid expenses and other current assets, total	$ 221.6	$ 221.5

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Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Accumulated Other Comprehensive Income (Loss) [Line Items]
As at January 1,	$ (31.5)
Net current period other comprehensive (loss)/income	(80.0)
As at June 30,	(111.5)
Foreign currency translation adjustment
Accumulated Other Comprehensive Income (Loss) [Line Items]
As at January 1,	(25.7)	$ 110.4
Other comprehensive income before reclassification		10.2
Gain transferred to the income statement (within Other income),net) on disposal of available-for-sale-securities		0.0
Net current period other comprehensive (loss)/income	(83.3)	10.2
As at June 30,	(109.0)	120.6
Unrealized holding gain/(loss) on available-for-sale securities
Accumulated Other Comprehensive Income (Loss) [Line Items]
As at January 1,	(5.8)	(0.2)
Other comprehensive income before reclassification		6.9
Gain transferred to the income statement (within Other income),net) on disposal of available-for-sale-securities		(3.2)
Net current period other comprehensive (loss)/income	3.3	3.7
As at June 30,	(2.5)	3.5
Accumulated other comprehensive (loss)/income
Accumulated Other Comprehensive Income (Loss) [Line Items]
As at January 1,	(31.5)	110.2
Other comprehensive income before reclassification		17.1
Gain transferred to the income statement (within Other income),net) on disposal of available-for-sale-securities		(3.2)
Net current period other comprehensive (loss)/income	(80.0)	13.9
As at June 30,	$ (111.5)	$ 124.1

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Financial Instruments

6 Months Ended

Jun. 30, 2015

Derivative Instrument Detail [Abstract]

Financial Instruments Disclosure

17.Financial 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 principally exposed to interest rate risk on borrowings under its $2,100 million RCF, its $400 million 2013 Facilities Agreement,its $850 million 2015 Facility Agreement and its Credit lines, on which interest is set at floating rates, to the extent any of these facilities are utilized. At June 30, 2015 the Company had fully utilized the 2013 Facilities Agreement, fully utilized the 2015 Facility Agreement, utilized $920 million of the RCF and utilized $50million of its Credit lines. Shire's exposure under its 2013 Facilities Agreement, 2015 Facility Agreement, RCF and Credit lines isto US dollar interest rates.

The Company has evaluated the interest rate risk on the Credit lines, the RCF, the 2013 Facilities Agreement and the 2015 Facility Agreement and considers the risks associated with floating interest rates on borrowings under its facilities as appropriate. A hypothetical one percentage point increase or decrease in the interest rates applicable to drawings under the Credit lines, the 2013 Facilities Agreement, 2015 Facility Agreement and RCF at June 30, 2015 would increase interest expense by approximately $23 million per annum or would decrease the interest expense by approximately $5 million per annum.

The Company is also exposed to interest rate risk on its restricted cash, cash and cash equivalents and on foreign exchange contracts on which interest is set at floating rates. This exposure is primarily limited to US dollar, Pounds sterling and Euro interest rates. As the Company maintains all of its cash, liquid investments and foreign exchange contracts on a short term basis for liquidity purposes, this risk is not actively managed. In the six months to June 30, 2015 the average interest rate received on cash and liquid investments was less than 1% per annum. The largest proportion of these cash and liquid investments was in US dollar term deposits with banks.

No derivative instruments were entered into during the six months to June 30, 2015 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, derivative contracts and trade accounts receivable (from product sales and from third parties from which the Company receives royalties). 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 and 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 bank term deposit arrangements and derivative instruments. The Company limits this exposure through a system of internal credit limits which vary according to ratings assigned to the counterparties by 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 these derivatives contracts are major international financial institutions.

The Company's revenues from product sales in the US 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, 2014 there were three customers in the US that accounted for 47%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 acceptable. The Company has taken positive steps to manage any credit risk associated with these transactions and operates clearly defined credit evaluation procedures. However, an inability of one or more of these wholesalers to honor their debts to the Company could have an adverse effect on the Company's financial condition and results of operations.

A substantial portion of the Company's accounts receivable in countries outside of the United States is derived from product sales to government-owned or government-supported healthcare providers. The Company's recovery of these accounts receivable is therefore dependent upon the financial stability and creditworthiness of the relevant governments. In recent years global and national economic conditions have negatively affected the growth, creditworthiness and general economic condition of certain markets in which the Company operates. As a result, in some countries outside of the US, specifically,Argentina, Greece, Italy, Portugal and Spain (collectively the “Relevant Countries”) the Company is experiencing delays in the remittance of receivables due from government-owned or government-supported healthcare providers. The Company continued to receive remittances in relation to government-owned or government-supported healthcare providers in the Relevant Countries in the six months to June 30, 2015, including receiptsof$58.8million and $39.6million in respect of Spanish and Italian receivables, respectively.The Company's exposure to Greece, both in terms of gross accounts receivable and annual revenues, is not material.

To date the Company has not incurred material losses on accounts receivable in the Relevant Countries, and continues to consider that such accounts receivable are recoverable. The Company will continue to evaluate all its accounts receivable for potential collection risks and has made provision for amounts where collection is considered to be doubtful. If the financial condition of the Relevant Countries or other Eurozone countries suffer significant deterioration, such that their ability to make payments becomes uncertain, or if one or more Eurozone member countries withdraws from the Euro, additional allowances for doubtful accounts may be required, and losses may be incurred, in future periods. Any such loss could have an adverse effect on the Company's financial condition and results of operations.

Foreign exchange risk

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

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, Swiss Franc, Canadian dollar and the Euro. It is the Company's policy that these exposures are minimized to the extent practicable by denominating transactions in the subsidiary's functional currency.

Where significant exposures remain, the Company uses foreign exchange contracts (being spot, forward and swap contracts) to manage the exposure for balance sheet assets and liabilities that are denominated in currencies different to the functional currency of the relevant subsidiary. These assets and liabilities relate predominantly to inter-company financing. The foreign exchange contracts have not been designated as hedging instruments. Cash flows from derivative instruments are presented within net cash provided by operating activities in the consolidated cash flow statement, unless the derivative instruments are economically hedging specific investing or financing activities.

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

At June 30, 2015 the Company had 31swap and forward foreign exchange contracts outstanding to manage currency risk. The swap and forward contracts mature within 90 days. The Company did not have credit risk related contingent features or collateral linked to the derivatives. The Company has master netting agreements with a number of counterparties to these foreign exchange contracts and on the occurrence of specified events, the Company has the ability to terminate contracts and settle them with a net payment by one party to the other. The Company has elected to present derivative assets and derivative liabilities on a gross basis in the consolidated balance sheet. As at June 30, 2015 the potential effect of rights of set-off associated with the foreign exchange contracts would be an offset to both assets and liabilities of $0.2million, resulting in net derivative assets and derivative liabilities of $7.7million and $0.1million, respectively. Further details are included below:

		Fair value	Fair value
		June 30,	December 31,
		2015	2014
		$’M	$’M
		_____________	_____________
Assets	Prepaid expenses and other current assets	7.9	12.6
Liabilities	Other current liabilities	0.3	7.8
		_____________	_____________

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

	Location of net gains recognized in income	Amount of net gains recognized in income
	__________________________________	____________
In the six months to		June 30,	June 30,
		2015	2014
		$’M	$’M
		_____________	_____________
Foreign exchange contracts	Other income, net	21.3	13.9
		_____________	_____________

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

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Fair Value Measurement (Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs) (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Change in the Fair Value of Contigent Consideration Receivable
Balance at beginning of period	$ 15.9	$ 36.1
Initial recognition of contingent consideration receivable	0.0	33.6
Gain/(loss) recognized in the income statement (within Gain on sale of product rights) due to change in fair value during the period	8.6	(3.3)
Reclassification of amounts to Other receivables within Other current assets	(9.1)	(8.7)
Amounts recorded to other comprehensive income (within foreign currency translation adjustments)	1.3	(0.2)
Balance at end of period	16.7	57.5
Change in the Fair Value of Contigent Consideration Payable
Balance at beginning of period	629.9	405.9
Initial recognition of contingent consideration payable	92.1	174.0
Change in fair value during the period with the corresponding adjustment recognized as a loss in the income statement (within Integration and acquisition costs)	(255.7)	21.4
Reclassification of amounts to Other current liabilities	(4.1)	(10.9)
Change in fair value during the period with corresponding adjustment to the associated intangible asset	(0.2)	1.4
Amounts recorded to other comprehensive income (within foreign currency translation adjustments)	2.7	0.0
Balance at end of period	464.7	$ 591.8
Contingent consideration payable, current (within other current liabilities)	19.5		$ 194.5
Contingent consideration payable, non-current (within other non-current liabilities)	$ 445.2		$ 435.4

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Prepaid Expenses and Other Current Assets (Tables)

6 Months Ended

Jun. 30, 2015

Prepaid Expense and Other Assets, Current [Abstract]

Prepaid Expense and Other Assets, Current

	June 30,	December 31,
	2015	2014
	$’M	$’M
	______________	____________
Prepaid expenses	57.9	36.9
Income tax receivable	107.7	121.5
Value added taxes receivable	17.4	13.8
Other current assets	38.6	49.3
	______________	______________
	221.6	221.5
	______________	______________

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Other Intangible Assets, Net

6 Months Ended

Jun. 30, 2015

Intangible Assets, Net (Excluding Goodwill) [Abstract]

Other Intangible Assets Disclosure

10.       Other intangible assets, net

		June 30,	December 31,
		2015	2014
		$’M	$’M
		________________	________________
Amortized intangible assets
	Intellectual property rights acquired for currently marketed products	9,416.1	4,816.9
	Other intangible assets1	375.0	30.0
		________________	________________
		9,791.1	4,846.9
Unamortized intangible assets
	Intellectual property rights acquired for IPR&D	1,182.2	1,550.0
		________________	________________
		10,973.3	6,396.9
Less: Accumulated amortization		(1,662.9)	(1,462.5)
		________________	________________
		9,310.4	4,934.4
		________________	________________

• Other intangible assets primarily comprises of royalty right assets acquired with NPS Pharma.

The change in the net book value of other intangible assets for the six monthsto June 30, 2015and 2014is shown in the table below:

	Other intangible assets
	2015	2014
	$’M	$’M
	________________	________________
As at January 1,	4,934.4	2,312.6
Acquisitions	5,167.8	3,321.4
Amortization charged	(219.6)	(119.0)
Impairment charges	(523.3)	(188.0)
Foreign currency translation	(48.9)	(1.5)
	________________	________________
As at June 30,	9,310.4	5,325.5
	________________	________________

In the six months to June 30, 2015 the Company acquired intangible assets totaling $5,168 million, relating to the fair value of intangible assets for currently marketed products and royalty right assets acquired with NPS Pharma of $4,993 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. In the six months to June 30, 2015 the Company identified indicators of impairment in respect of its SHP625 (for the treatment of cholestatic liver disease), and SHP608 (for the treatment of DEB) IPR&D assets.

The indicators of impairment related to SHP625 in the second quarter of 2015 included the results of two Phase 2 studies, comprising a 13-week study of 20 paediatric patients with Alagille syndrome (“ALGS”), a 13 week, double blind, placebo-controlled trial in combination with ursodeoxycholic acid (“UDCA”) for patients with Primary Biliary Cirrhosis (“PBC”), and preliminary results froma 72 week open label Phase 2 study in Progressive Familial Intrahepatic Cholestasis (“PFIC”). Although both the ALGS and PBC trials indicated a reduction in bile serum acids in the SHP625 treated group, neither of these trials met their primary or secondary endpoints. The interim analysis in the PFIC trial was based on the first 12 subjects who completed 13 weeks of treatment per protocol. There was no statistically significant reduction in mean serum bile acid levels from baseline. A change from baseline analysis was planned as there is no placebo treatment arm in this study. However, changes from baseline for pruritus did reach statistical significance.

Following these trial results, the Company reviewed the recoverability of its SHP625 IPR&D asset in the second quarter of 2015 and recorded an impairment charge of $346.6 million (within R&D expenses in the consolidated statement of income) to record the SHP625 IPR&D asset to its revised fair value of $120.4 million. This fair value was based on the revised discounted cash flow forecasts associated with SHP625, which included a reduced probability of achieving regulatory approval.

For SHP608, preclinical toxicity findings in the second quarter of 2015 have led to a significant reduction in the probability of achieving regulatory approval of this asset. As a result, the Company recorded an impairment charge of $176.7 million within R&D expenses in the consolidated statement of income to fully write off the SHP608 IPR&D asset.

The fair values of the related contingent consideration liabilities arising from the Lumena and Lotus Tissue Repair acquisitions (through which Shire acquired SHP625 and SHP608 respectively) have also been reduced, resulting in a credit of $280.0 million being recorded in Integration and acquisition costs.

In the six months to June 30, 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) and SHP613 (for the treatment of improvement in patency of arteriovenous access in hemodialysis patients) IPR&D assets. The Company therefore reviewed the recoverability of its SHP602 and SHP613 IPR&D assets and recorded an impairment charge of $166.0 million and $22.0 million, respectively, within R&D expenses in the consolidated statement of income to record the IPR&D assets to their revised fair value.

Management estimates that the annual amortization charge in respect of intangible assets held at June 30, 2015will be approximately $476 million for each of the five years to June 30, 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.