-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, I90aH5nUR0htNb4rod9NlAotrf19EE/m2ae91TSG0+FHBOLEBQNQsGhOjYSWr6KR 1Iyx3O0S3/TY1pVLOZh/EQ== 0000950162-00-000224.txt : 20000307 0000950162-00-000224.hdr.sgml : 20000307 ACCESSION NUMBER: 0000950162-00-000224 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000229 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000301 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SHIRE PHARMACEUTICALS GROUP PLC CENTRAL INDEX KEY: 0000936402 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 333-08394 FILM NUMBER: 558799 BUSINESS ADDRESS: STREET 1: EAST ANTON ANDOVER STREET 2: HAMPSHIRE ENGLAND CITY: ENGLAND SP10 5RG MAIL ADDRESS: STREET 1: EAST ANTON ANDOVER STREET 2: HAMPSHIRE ENGLAND CITY: ENGLAND SP10 5RG 8-K 1 FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of Earliest Event Reported): February 29, 2000 Shire Pharmaceuticals Group plc - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) England and Wales - -------------------------------------------------------------------------------- (State or other jurisdiction of incorporation) 0-29630 N/A - ---------------------------------------- --------------------------------- (Commission File Number) (IRS Employer Identification No.) East Anton, Andover, Hampshire SP10 5RG England - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code 44-1264-333455 ------------------------------ - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) Item 5. Other Events On February 29, 2000, Shire Pharmaceuticals Group plc (the "Company") announced its results of operations for the three months ended December 31, 1999 and the year ended December 31, 1999. The Company also announced unaudited results of operations for the month of January 2000. The Company's press release announcing such results of operations is attached hereto as Exhibit 99.1. Item 7. Financial Statements and Exhibits 99.1 Press Release dated February 29, 2000. -2- SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: March 1, 2000 SHIRE PHARMACEUTICALS GROUP PLC By: /s/ Neil Harris, Esq. --------------------------------- Neil Harris, Esq. EXHIBIT INDEX Number Description 99.1 Press Release dated February 29, 2000 EX-99.1 2 PRESS RELEASE Immediate Release 29 February 2000 SHIRE'S REVENUES UP 30%; OPERATING PROFIT (BEFORE EXCEPTIONALS) UP 154% Andover, UK -29 February 2000 - Shire Pharmaceuticals Group plc (LSE: SHP.L, NASDAQ: SHPGY) announces results for the twelve months ended 31 December 1999. Highlights:
After exceptional charges Before exceptional charges --------------------- ------------------------------------------ 1999 1999 1998 % ($m) ($m) ($m) change Revenues 401.5 401.5 309.0 + 30 Operating profit 59.2 59.2 23.3 +154 Exceptional charges: o Merger related (129.4) - - - o Product disposal (5.8) - - - (Loss)/profit before tax (78.9) 56.3 23.6 +139 EPS (basic): o ordinary shares $(0.39) $0.16 $0.09 +78 o ADS $(1.16) $0.49 $0.26 --------------------- -------------- --------------- -------------
o Merger between Shire and Roberts completed in December 1999. o Acquisition of Fuisz European subsidiaries completed in October/November 1999. o Adderall and DextroStat sales up 92 per cent and 47 per cent; together achieved 30.7 per cent market share of US ADHD market. o Pentasa sales up 56 per cent; market share of the growing oral mesalamine/olsalazine market retained at 17.8 per cent. -2- o Carbatrol achieved sales growth of 201 per cent following launch in June 1998; gained 22.8 per cent share1 of the US extended release carbamazepine market. o US marketing rights for Fareston, acquired from Orion in September 1999. o Lambda entered Phase III in the US in July 1999. o Reminyl submitted for European marketing approval in March 1999, US filing to FDA in September 1999. Prescription market (IMS) December 1999 Commenting on the results, Rolf Stahel, Chief Executive of Shire, said: "The merger with Roberts has brought together two of the fastest growing publicly traded specialty pharmaceutical companies. The broadly based product portfolio is growing strongly. The combined company remains focused and dynamic. The two US sales forces continue to operate largely unaffected by the merger; the two UK sales forces have been integrated and were fully operational by the end of January 2000. The German, French and Italian subsidiaries were fully integrated by the end of December 1999. We are well placed to continue the growth of the company going forward." End For further information please contact: Tina Moyce, Corporate Communications Manager Shire Pharmaceuticals Group plc 29 February at Financial Dynamics' offices in London + 44 171 831 3113 1 March onwards at Shire's Head Office in Andover + 44 1264 348515 David Yates / Sophie Pender-Cudlip Financial Dynamics +44 171 831 3113 Julie Huang Edelman Financial Worldwide +1 212 704 8114 Notes to editors Shire Pharmaceuticals Group plc Shire is an international specialty pharmaceutical company with a strategic focus on four therapeutic areas; central nervous system disorders, metabolic diseases, oncology and gastroenterology. The -3- Group has a sales and marketing infrastructure with a broad portfolio of products targeting the US, Canada, UK, Republic of Ireland, France, Germany and Italy, with plans to add other key markets in due course. Shire's global search and development expertise has already provided three marketed products, whilst the current pipeline of 12 projects includes one project in registration and a significant number post Phase II. Shire is actively searching to acquire further marketed products and development projects to enhance the potential for future growth, both organically and by acquisition. Preliminary announcement of results The following information does not constitute the Company's statutory accounts under section 240 of the Companies Act 1985 for the years ended 31 December 1998 or 1997 but is derived from those accounts. The results for the year ended 31 December 1999 have not been audited and do not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. Statutory accounts for the year ended 31 December 1998, the Company's last statutory reporting period, have been delivered to the Registrar of Companies. The auditors have reported on those accounts and their reports were unqualified and did not contain statements under section 237 (2) or (3) of the Companies Act 1985. The 1999 statutory accounts will be delivered to the Registrar of Companies following the Company's Annual General Meeting. The Company will file financial information with the Securities and Exchange Commission in the US in its Annual Report on Form 10-K in due course. THE "SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. The statements in this press release that are not historical facts are forward-looking statements that involve risks and uncertainties, including but not limited to, risks asso- -4- ciated with the inherent uncertainty of pharmaceutical research, product development and commercialization, the impact of competitive products, patents, and other risks and uncertainties, including those detailed from time to time in periodic reports, including the F-4 Prospectus and the Annual Report filed on Form 20-F with the Securities and Exchange Commission. OVERVIEW OF FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 1999 Introduction Following the merger with Roberts Pharmaceutical Corporation at the end of 1999 these accounts have been prepared in accordance with US Generally Accepted Accounting Principles (GAAP) and as a `pooling of interests.' The unaudited financial information for the combined company is presented as if the merger had occurred at the beginning of the periods described. Comparisons with previous periods have been made against the unaudited US GAAP financial statements that Shire issued in a press release in mid February 2000. The Board has decided that the Group should report its US GAAP results in US dollars with UK statutory reporting in sterling. This preliminary announcement reflects this decision. Overview of financial results Group revenues for the year were $401.5 million, a 30 per cent increase over 1998 ($309.0 million). Following the merger with Roberts, operating profit (before exceptional charges) was $59.2 million, a 154 per cent increase over 1998 ($23.3 million). After charging exceptional merger related costs of $129.4 million, a loss on the disposal of a product of $5.8 million and interest expense of $2.9 million, the Group recorded a pre-tax loss for the year of $78.9 million (1998: profit of $23.6 million). -5- Basic earnings per ordinary share was $0.16 before exceptional charges and $(0.39) after exceptional charges (1998: $0.09). Sales and marketing Product sales represented 96 per cent of total turnover at $385.2 million, an increase of 32 per cent over 1998 (1998: $291.8 million). In December 1999, Adderall and DextroStat accounted for 30.7 per cent 1 (December 1998: 20.4 per cent) of prescriptions written for Attention Deficit Hyperactivity Disorder (ADHD) in the US. The tremendous growth of Adderall (92 per cent vs 1998) has continued throughout 1999. This has been fuelled by additional sales representatives (the relevant Shire US sales force increased from 90 in December 1998 to 139 by June of 1999) and several clinical papers which highlighted benefits of Adderall over its major competitor, methylphenidate. Pentasa, licensed for the treatment of ulcerative colitis in the US, returned sales growth of 56 per cent and maintained a prescription market share of 17.8 per cent 1 from December 1998 to December 1999 in the growing olsalazine/mesalamine oral market. In prescription terms, this oral market grew by 12.4 per cent 1 from December 1998 to December 1999. Sales for Agrylin, the only US product licensed for the treatment of essential thrombocythemia, grew by 37 per cent to $32.6 million. Hydrea and hydroxyurea are used off label for this condition as well as their licensed indications. In the prescription market for these three products, Agrylin gained market share, increasing from 8.3 per cent in 1998 to 13.2 per cent in December 1999 2. In June 1999, all -6- rights to Agrylin, including intellectual property, were acquired from Bristol Myers Squibb. This ends all of the royalty obligations on Agrylin sales. ProAmatine is currently the only licensed US product for the treatment of orthostatic hypotension. Florinef is also used off label for this indication, as well as for its licensed indications. The prescription market for ProAmatine and Florinef scripts indicates that ProAmatine had an 18.8 per cent share in December 1999, an increase from 13.9 per cent in December 1998.3 Sales increased by 28 per cent to $19.8 million. The Calcichew range of calcium/calcium and vitamin D supplements, used as adjuncts in the treatment of osteoporosis, achieved sales of $17 million during 1999. This represents a growth of 16 per cent compared with 1998 ($14.6 million). Prescription market share of the UK calcium market was 70 per cent in December 1999. Carbatrol, an extended release formulation of carbamazepine used for the treatment of epilepsy in the US, has continued to penetrate the extended release carbamazepine market. In December of 1999, it had gained 22.8 per cent 1 of this market compared with 8.5 per cent 1 in December 1998. Sales were up 201 per cent, based on launch in June of 1998. Licensing Licensing and development fees in 1999 decreased by 9 per cent to $10.8 million (1998: $11.8 million), reflecting in part the reduced R&D spend by Shire on Reminyl and the ClimaRange and BetaRange products. It is likely that over time this trend will continue as Shire's ability to fully fund development projects for its own marketing will tend to result in less out-licensing activities. Royalties -7- decreased by 3 per cent to $3.6 million (1998: $3.7 million), primarily due to reduced income from tacrine. Cost of sales and operating expenses Cost of sales decreased by 2 per cent to $93.5 million (1998: $95.0 million). Gross margin on product sales increased from 67 per cent in 1998 to 76 per cent in 1999. This is partly due to the enhanced margin on Agrylin following the acquisition in June of all rights to the product, including the ending of royalty obligations to Bristol Myers Squibb. Overall, the higher margin products such as Adderall, Pentasa and Agrylin have continued to grow at a faster rate than the lower margin products, contributing a higher proportion of sales in 1999 over the preceding year. Depreciation and amortisation has increased by 13 per cent to $28.6 million (1998: $25.2 million). The primary components of the charge are a full year's amortisation charge for Pentasa acquired in June 1998, and the acquisition of Agrylin mentioned above. R&D expenditure increased in line with revenues by 31 per cent to $77.5 million (1998: $59.3 million). Hence, as a proportion of revenues, R&D expenditure remained constant at around 19 per cent. Shire has a significant proportion of projects at Phase II or later where development costs tend to be higher. Selling, general and administrative expenses increased by 30 per cent to $142.8 million (1998: $109.7 million), mainly due to higher US sales force numbers. However, with revenues increasing by a similar percentage, these expenses remained at around 36 per cent of revenues. -8- Exceptional Charges Exceptional charges comprise: (i) merger related expenses of $129.4 million, including asset write-downs of $53.5 million, employee related costs of $38.0 million, transaction expenses of $32.3 million and other costs of $5.6 million. The cash outflow associated with these charges is estimated to be around $55.1 million; (ii) a loss of $5.8 million arising from a product disposal. Taxation In 1998, the Group recognised deferred tax assets of $12.5 million, following a reorganisation of the Group's US operations. This benefit to the tax charge was a primary component of the 13 per cent tax rate in 1998. The effective tax charge for the Group in 1999, before exceptionals, was 29 per cent. Cash flow Operating cash inflow before working capital adjustments amounted to $43.4 million (1998: $52.5 million). Increase in working capital added $47.1 million (1998: $(18.0 million)), principally as a result of decreased accounts receivable related to the slow down of Roberts' sales mentioned below and provisions for exceptional charges. Net cash inflow from operating activities of $90.5 million (1998: $34.5 million) was reduced by acquisitions of $81.0 million, financing activities of $4.0 million and capital expenditure and investments of $4.5 million. Cash investments and marketable securities at 31 December 1999 amounted to $138.4 million (1998: $ 124.7 million). -9- Balance sheet The Group's net assets decreased by $76.0 million to $587.3 million at 31 December 1999. The decrease reflects the retained net loss for the year of $95.0 million and a net $19 million related to the issue of stock and stock options. Research and development During 1999, Reminyl( (galantamine), a treatment for Alzheimer's disease, moved into the regulatory phase in a number of key countries. In March, a filing was made by Janssen to the Reference Member State in the EU Mutual Recognition Procedure, to gain marketing approval in Europe. Submissions were also made to the relevant authorities in Canada, Australia, Norway, Switzerland, Poland, South Africa and New Zealand during the second quarter of 1999 and to the US Food and Drug Administration (FDA) at the end of September 1999. Galantamine is being developed by Shire and Janssen Research Foundation, an affiliate of Johnson & Johnson, under a co-development and licensing agreement. Lambda (lanthanum carbonate), a treatment to reduce the amount of phosphate in the blood of patients with chronic kidney failure, entered Phase III in the US in July, following early entry into Phase III in Europe at the end of 1998. The project also completed the first Phase I study in Japan during 1999. In February, it was announced that the rights to a patented hydrogel implant delivery technology had been acquired from Hydro Med Sciences for use in the Phase III development of a GnRH agonist for the hormonal treatment of prostate cancer. These are exclusive rights to develop and market the new project, designated SPD 424 (previously known as RL0903), for the US, Canada and Europe. The -10- retrievable subcutaneous hydrogel implant employs a proprietary technology that delivers therapeutic agents at a controlled constant release rate for up to one year and can be inserted, in a physician's office, using a local anaesthetic. This GnRH hydrogel implant is intended to have compliance advantages over existing therapies, which would have the potential for leading to more reliable hormonal effects. Merger with Roberts On 23 December 1999, Shire and Roberts merged in a tax-free exchange of shares. In the transaction, Shire exchanged 1.0427 Shire ADSs (each of which represents three ordinary shares) for each share of Roberts. Phentermine litigation As of 23 February 2000, Shire had been named as a defendant in approximately 3,541 cases related to the "fen-phen" litigation. Shire has been dismissed from 479 cases with approximately 57 further dismissals pending on the basis that the plaintiff was shown not to have used Shire's product. In approximately 154 cases, of which 28 have been subsequently dismissed, it has been specifically alleged that the plaintiff did use Shire's product. Shire intends vigorously to defend all claims made against it and will continue to seek case dismissals based upon product identification. Outlook Following the substantial one-time exceptional charge in the fourth quarter of 1999, management expects to realise annual synergies of approximately $20 million. Shire's key products continue to demonstrate strong growth and we continue to be optimistic about their potential going forward. -11- RESULTS FOR THE THREE MONTHS ENDED 31 DECEMBER 1999 Revenues in the fourth quarter increased by 9 per cent to $104.4 million (Q4 1998: $95.5 million). This comparatively low growth rate in terms of Shire's recent history is in part due to the lower licensing and development fees in 1999 as described below. However, more of the slowdown reflected a lower level of product sales following price increases in the third quarter and a decision to reduce pipeline inventory levels. Product sales for the fourth quarter were $101.9 million (Q4 1998: $89.2 million). Sales of Adderall for this period were $45.3 million (1998: $23.0 million); Pentasa, $8.1 million (1998: $12.4 million); Agrylin, $4.2 million (1998: $4.1 million); ProAmatine, $3.7 million (1998: $5.0 million); DextroStat, $2.1 million (1998: $1.6 million); Carbatrol, $5.4 million (1998: $1.1 million); Calcichew range, $4.6 million (1998: $4.2million); OTC, $2.3 million (1998: $ 7.2 million); Others, $26.2 million (1998: $30.5 million). Licensing and development fees for the fourth quarter were $1.0 million (1998: $4.8 million), reflecting reduced R&D expenditure by Shire on Reminyl. Royalties for the same period were $1.2 million (Q4 1998: $1.0 million). The merger with Roberts was completed in December 1999 and the one-time costs relating to the merger have therefore been charged in the fourth quarter. This results in a net loss of $124.0 million (1998: profit of $12.8 million). Basic earnings per share was similarly affected at $(0.49) (1998: $0.05). -12- BOARD CHANGES During 1999, there were significant changes to the Shire Board. In March, Dr Bernard Canavan was appointed to the Board as a non-executive Director. Dr Canavan, a medical doctor, was the President of American Home Products from 1990 until he retired in 1994 and prior to that was Chairman and Chief Executive Officer of American Home Products Pharmaceutical Division, Wyeth-Ayerst Laboratories. Dr Barry Price was nominated as senior non-executive Director in March. In May 1999, Dr Henry Simon resigned as Chairman. He was succeeded by Dr James Cavanaugh, an existing non-executive Director with a wealth of international, in particular, US, industry experience. In December, Stephen Stamp, the Group Finance Director resigned from the Board and was replaced by Angus Russell. Mr Russell joined Shire from AstraZeneca PLC where he was latterly Vice President - Corporate Finance. Prior to this he held a number of senior positions within ZENECA Group PLC and ICI. In December, as a result of the merger with Roberts, Shire significantly broadened the number of non-executive positions on the Board. The former President & CEO of Roberts, Mr John Spitznagel, became a non-executive director as did several of the former non-executives including the former Chairman, Dr Robert Vukovich, Dr Zola Horovitz, Ronald Nordmann and Joseph Smith, In February 2000, Dr Vukovich resigned his Board position to pursue other business interests. POST BALANCE SHEET EVENTS R&D portfolio review Following the merger, a detailed review of the combined R&D portfolio has taken place. This has confirmed commitment to late phase projects and milestone funding for early phase projects. Three -13- projects have been discontinued; LY 315535 for Irritable Bowel Syndrome, Tazofelone for Inflammatory Bowel Disease and ProAmatine for dialytic hypotension. These projects did not meet the long term strategic objectives for the company. Out-licensing partners for the two gastrointestinal products will be sought with immediate effect. Shire's `Search team' will continue to evaluate in-licensing opportunities that fall within the Company's strategic focus. -14- RESULTS (UNAUDITED) FOR THE MONTH OF JANUARY 2000 The unaudited results for January 2000 are provided to comply with ASR No. 135 and SAB No 65, which require the publication of thirty days' post merger combined operating results following the merger with Roberts Pharmaceuticals Corporation.
2000 1999 $m $m % Revenues 32.9 26.4 25% - -------------------------------------------------------------------------------------------------------------------- Product sales 32.3 26.2 23% Other income 0.6 0.2 - -------------------------------------------------------------------------------------------------------------------- Net income before Stock Option (APB 25) charges Note 1 5.9 4.4 34% Stock Option (APB 25) charges Note 1 (12.5) (1.6) Net income (after APB 25 charges) Note 1 (6.6) 2.8 EPS (after APB 25 charges) Note 1 (3.0)c 1.2c ADS (after APB 25 charges) Note 1 (9.0)c 3.5c EPS (before APB 25 charges) Note 1 2.4c 1.8c 33% ADS (before APB 25 charges) Note 1 7.2c 5.4c 33%
Note 1 Under US GAAP, APB Opinion 25 requires that for certain share schemes, a charge be made over the vesting period of the option to reflect the difference between the current market value of the stock and the exercise price of the option. This charge is purely an accounting adjustment and has no cash effect. Given the substantial increase of more than 35 % in Shire's stock price from (pound)6.185 per ordinary share at 31st December 1999 to (pound)8.375 at 31st January 2000, this has generated a substantial charge against income. -15- The company is actively considering ways in which it can remove this charge both from the first quarter accounts and on an ongoing basis. 1. Data are sourced from US IMS (NPA) 2. Data are sourced from US IMS (NPA). Hydrea and hydroxyurea are used for indications other than essential thrombocythemia. There are no data available specifically on the essential thrombocythemia market. Hence the Agrylin market share for this condition in reality is higher than the figure given. Shire Pharmaceuticals Group plc
Consolidated balance sheet US GAAP (In thousands of U.S. dollars, except share and per share data) December 31, December 31, 1999 1998 ASSETS: Current assets: Cash and cash equivalents 54,082 52,973 Marketable securities and other current asset investments 84,344 71,726 Accounts receivable, net 61,514 76,622 Inventories 39,538 34,639 Prepaid expenses and other current assets 16,221 39,578 -------- -------- Total current assets 255,699 275,538 Investments 2,604 10,000 Property, plant and equipment, net 37,484 42,682 Intangible assets, net 558,847 537,159 Other assets 34,042 8,226 -------- ------- Total assets 888,676 873,605 -------- ------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Short-term debt 1,285 12,351 Accounts and notes payable 114,509 54,896 Other current liabilities 56,450 14,041 ------- ------- Total current liabilities 172,244 81,288 Long-term debt, excluding current installments 123,751 126,774 Other long-term liabilities 5,397 2,229 ------- ------- Total liabilities 301,392 210,291 ------- ------- Shareholders' equity: Common stock, 5p par value; 400,000,000 shares authorised; and 244,519,024 shares issued and outstanding respectively 20,063 11,725 Additional paid-in capital 832,650 814,953 Accumulated other comprehensive income/(losses) (10,303) (3,236) Accumulated deficit (255,126) (160,128) -------- -------- Total shareholders' equity 587,284 663,314 -------- -------- Total liabilities and shareholders' equity 888,676 873,605 -------- --------
The results for the year ended December 31 1998 have been restated to include the results of Roberts Pharmaceutical Corporation which was accounted for as a pooling of interests in accordance with APB 16, Accounting for Business Combinations. Shire Pharmaceuticals Group plc
Full year results US GAAP (In thousands of U.S. dollars, except share and per share data) Years ended December 31, 1999 1998 1997 --------- --------- --------- Total revenues 401,532 308,984 191,554 Cost of revenues 93,475 95,013 67,090 --------- --------- --------- Gross profit 308,057 213,971 124,464 --------- --------- --------- Operating expenses 384,125 190,735 210,305 Interest income 7,349 6,398 6,547 Interest expense (9,742) (6,511) (964) Other income/(expenses) (475) 440 (2,474) --------- --------- --------- Total other income/(expenses) (2,868) 327 3,109 --------- --------- --------- Income/(loss) before income taxes (78,936) 23,563 (82,732) Income taxes (16,062) (2,991) (1,420) --------- --------- --------- Net income/(loss) (94,998) 20,572 (84,152) --------- --------- --------- Net income/(loss) per share: Basic $(0.39) $0.09 $(0.45) Diluted $(0.39) $0.08 $(0.45) Weighted average number of shares: Basic 244,698,721 234,044,732 185,153,065 Diluted 244,698,721 242,806,410 185,153,065
The results for the year ended December 31 1998 and 1997 have been restated to include the results of Roberts Pharmaceutical Corporation which was accounted for as a pooling of interests in accordance with APB 16, Accounting for Business Combinations. Shire Pharmaceuticals Group plc
Consolidated statement of cash flows US GAAP (In thousands of U.S. dollars) Years ended December 31, 1999 1998 1997 --------- --------- --------- Cash flows from operating activities: Net income (94,998) 20,572 (84,152) --------- --------- --------- Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortisation 28,598 25,249 12,309 Stock option compensation 13,900 8,505 2,567 Non cash exchange gains and losses (664) (1,816) (1,289) (Profit)/loss on sale of fixed assets (828) 16 (13) (Profit)/loss on sale of intangible assets 5,825 - - Write-down of investment 7,546 - - (Increase)/decrease in inventory (6,543) (5,170) (4,657) (Increase)/decrease in accounts receivable 17,012 (24,988) (5,751) Increase/(decrease) in accounts payable 37,083 12,186 511 Reserve for restructuring charges 83,608 - - Carbatrol milestone payment - - 8,000 Impact of discontinued operations - - (629) Acquisition of in-process research and development - - 83,087 --------- --------- --------- Net cash provided by/(used in) operating activities 90,539 34,554 9,983 --------- --------- --------- Cash flows from investing activities: Redemption of/(investment) in marketable securities (7,940) 3,825 (32,094) Purchase of long-term investment - (10,000) - Deferred consideration - - (10,000) Purchase of subsidiary undertakings (32,000) - (41,053) Expenses of acquisition - (551) (3,118) Net cash acquired with subsidiary undertakings 1,979 - 6,759 Purchase of intangible assets (57,848) (142,258) (10,066) Purchase of fixed assets (4,786) (13,871) (13,936) Sale of intangible fixed assets 6,575 1,033 - Sale of fixed assets 1,413 60 20 Collection on notes receivable 7,195 1,751 6,738 --------- --------- --------- Net cash provided by/(used) in investing activities (85,412) (160,011) (96,750) --------- --------- --------- Cash flows from financing activities: (Increase)/decrease in cash placed on short-term deposit (4,677) (35,664) 33,949 Long term debt issued - 125,000 - Payments on long term debt, capital leases and notes (11,499) (11,708) (7,410) Payment of debt issuance costs - (2,528) - Proceeds from issue of common stock, net 8,615 35,027 19,054 Proceeds from exercise of options 3,523 4,082 1,016 Proceeds from issue of preferred stock - 4,494 6,000 Cash dividends paid - (150) (1,629) --------- --------- --------- Net cash provided by/(used) in financing activities (4,038) 118,553 17,030 --------- --------- --------- Effect of foreign exchange rate changes on cash and cash equivalents 20 9 (401) --------- --------- --------- Net increase/(decrease) in cash and cash equivalents 1,109 (6,895) (36,188) Cash and cash equivalents at beginning of period 52,973 59,868 96,056 --------- --------- --------- Cash and cash equivalents at end of period 54,082 52,973 59,868 --------- --------- ---------
The results for the year ended December 31 1998 and 1997 have been restated to include the results of Roberts Pharmaceutical Corporation in accordance with APB 16, Accounting for Business Combinations. NOTES 1. Analysis of revenue, operating income/(loss), assets and reportable segments The Company has disclosed segment information for the individual operating areas of the business, based on the way in which the business is managed and controlled. Shire's principal reporting segments are geographic, each being managed and monitored separately and serving different markets. The Company evaluates performance based on operating income or loss before interest and income taxes. All inter-company items are eliminated. The accounting policies of each reportable segment are the same as those of the Group. The accounting for the assets of each segment is the same as in consolidation with all intercompany balances eliminated.
Year ended December 31, 1999 U.S. Europe Rest of World Total --------- ----------- ------------- ---------- Product sales 313,582 55,194 16,427 385,203 Licensing and development 1,097 9,675 - 10,772 Royalties - 3,562 - 3,562 Other revenues 517 - 1,478 1,995 -------- -------- --------- -------- Total revenue 315,196 68,431 17,905 401,532 -------- -------- --------- -------- Cost of sales 62,375 20,958 10,142 93,475 Research and development 50,544 26,904 55 77,503 Selling, general and administrative 94,578 42,125 6,085 142,788 -------- -------- --------- -------- 207,497 89,987 16,282 313,766 Other charges: Costs of restructuring 93,603 3,529 - 97,132 Merger transaction expenses 9,312 22,967 - 32,279 Loss/(profit) on dispositions 5,825 - - 5,825 -------- -------- --------- -------- Total operating expenses 316,237 116,483 16,282 449,002 -------- -------- --------- -------- EBITDA (1,041) (48,052) 1,623 (47,470) Depreciation and amortisation (14,104) (13,861) (633) (28,598) -------- -------- --------- -------- Operating (loss)/income (15,145) (61,913) 990 (76,068) -------- -------- --------- -------- Total assets 547,762 313,113 27,801 888,676 Long-lived assets 348,946 231,560 15,825 596,331 -------- -------- --------- -------- Rest of Year ended December 31, 1998 U.S. Europe World Total -------- --------- ---------- -------- Product sales 226,988 50,261 14,536 291,785 Licensing and development 622 11,199 - 11,821 Royalties - 3,697 - 3,697 Other revenues 306 - 1,375 1,681 -------- -------- --------- -------- Total revenue 227,916 65,157 15,911 308,984 Cost of sales 67,889 19,378 7,746 95,013 Research and development 27,556 31,647 50 59,253 Selling, general and administrative 70,251 31,218 4,984 106,453 (Profit)/loss on dispositions (220) - - (220) -------- -------- --------- -------- Total operating expenses 165,476 82,243 12,780 260,499 EBITDA 62,440 (17,086) 3,131 48,485 Depreciation and amortisation (10,603) (13,990) (656) (25,249) -------- -------- --------- -------- Operating income/(loss) 51,837 (31,076) 2,475 23,236 -------- -------- --------- -------- Total assets 542,799 307,309 23,497 873,605 Long-lived assets 352,195 213,381 14,265 579,841 -------- -------- --------- -------- Rest of Year ended December 31, 1997 U.S. Europe World Total -------- -------- --------- -------- Product sales 113,814 41,702 13,400 168,916 Licensing and development 4,201 15,929 - 20,130 Royalties - 1,596 16 1,612 Other revenues - - 896 896 -------- -------- --------- -------- Total revenue 118,015 59,227 14,312 191,554 Cost of sales 41,874 18,228 6,988 67,090 Research and development 20,876 19,678 109 40,663 Selling, general and administrative 47,313 22,818 4,115 74,246 -------- -------- --------- -------- 110,063 60,724 11,212 181,999 Other charges: In-process research and development 83,087 - - 83,087 -------- -------- --------- -------- Total operating expenses 193,150 60,724 11,212 265,086 -------- -------- --------- -------- EBITDA (75,135) (1,497) 3,100 (73,532) Depreciation and amortisation (5,225) (6,393) (691) (12,309) -------- -------- --------- -------- Operating (loss)/income (80,360) (7,890) 2,409 (85,841) -------- -------- --------- -------- Total assets 351,573 288,643 24,734 664,950 Long-lived assets 205,500 239,956 6,960 452,416 -------- -------- --------- --------
2. Net income/(loss) per share Basic net income/(loss) per share is based upon the income available to common stockholders divided by the weighted-average number of common shares outstanding during the period. Diluted net income/(loss) per share is based upon income available to common stockholders divided by the weighted-average number of common shares outstanding during the period and adjusted for the effect of all dilutive potential common shares that were outstanding during the period. The following table sets forth the computation of basic and diluted net income per share:
Years ended December 31, 1999 1998 1997 ------------- ------------- ------------- Net (loss)/ income available for common shareholders (94,998) 20,572 (84,152) ------------- ------------- ------------- Weighted average shares: No. of shares No. of shares No. of shares Basic net income per share - weighted average shares 244,698,721 234,044,732 185,153,065 Effect of dilutive stock options - 8,761,678 - ------------- ------------- ------------- Diluted net income per share - weighted average shares 244,698,721 242,806,410 185,153,065 ------------- ------------- ------------- Basic net (loss)/income per share $(0.39) $0.09 $(0.45) ------------- ------------- ------------- Diluted net (loss)/income per share $(0.39) $0.08 $(0.45) ------------- ------------- -------------
3. Net product sales data
Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year 1999 1999 1999 1999 1999 % of $'000 $'000 $'000 $'000 $'000 Total -------- --------- --------- --------- ------- ------ Adderall 31,547 29,159 36,046 45,261 142,013 37% Pentasa 15,002 8,555 20,194 8,096 51,847 14% Agrylin 5,169 19,194 4,015 4,190 32,568 8% ProAmatine 5,858 1,801 8,382 3,736 19,777 5% Calciums 4,027 4,219 4,211 4,550 17,007 4% Carbatrol 2,601 3,812 4,250 5,371 16,034 4% Dextrostat 1,944 2,550 2,153 2,144 8,791 2% OTC 6,164 4,823 8,005 2,336 21,328 6% Others 15,444 18,986 15,235 26,173 75,838 20% -------- -------- -------- -------- -------- 87,756 93,099 102,491 101,857 385,203 100% -------- -------- -------- -------- --------
Shire Pharmaceuticals Group plc Quarterly results US GAAP (In thousands of U.S. dollars, except share and per share data) Quarter ended December 31, 1999 1998 --------- --------- Revenues: Product sales 101,857 89,210 Licensing and development 1,001 4,829 Royalties 1,244 971 Other revenues 287 476 --------- --------- Total revenues 104,389 95,486 Costs and expenses: Cost of sales 24,332 31,658 Research and development 25,987 17,054 Selling, general and administrative 37,411 25,892 --------- --------- 87,730 74,604 Other charges: Costs of restructuring 97,132 - Merger transaction expenses 32,279 - Loss/(gain) on dispositions 5,825 (220) --------- --------- Total operating costs and expenses 222,966 74,384 --------- --------- EBITDA (118,577) 21,102 Depreciation and amortisation (9,079) (6,758) Operating income/(loss) (127,656) 14,344 Interest income 1,974 1,841 Interest expense (2,452) (2,740) Other income/(expenses) (379) (1,091) --------- --------- Total other income/(expenses) (857) (1,990) --------- --------- Income/(loss) before income taxes (128,513) 12,354 Income taxes 4,547 487 --------- --------- Net income/(loss) (123,966) 12,841 --------- --------- Net income/(loss) per share: Basic ($0.49) $0.05 Diluted ($0.49) $0.05 Weighted average number of shares: Basic 252,431,997 239,259,296 Diluted 252,431,997 248,223,566
Shire Pharmaceuticals Group plc Results for the year ended December 31 1999 UK GAAP (In thousands of UK pounds, except share and per share data) Years ended December 31, 1999 1998 (pound)'000 (pound)'000 Unaudited Audited ------------ ------------ Profit and loss account Turnover - - Continuing operations 133,316 80,328 - - Acquisition 563 - ------------ ------------ 133,879 80,328 ------------ ------------ Operating expenses before exceptional items - - Continuing operations 102,177 72,449 - - Acquisition 1,329 - ------------ ------------ 103,506 72,449 ------------ ------------ Operating profit - - Continuing operations 31,139 7,879 - - Acquisition (766) - ------------ ------------ 30,373 7,879 ------------ ------------ Costs of a fundamental restructuring of continuing operations 11,516 - ------------ ------------ (Loss)/profit on ordinary activities before finance charges 18,857 7,879 Finance charges, net 2,153 1,220 ------------ ------------ (Loss)/profit on ordinary activities before taxation 21,010 9,099 Taxation (8,439) (2,852) ------------ ------------ (Loss)/profit on ordinary activities after taxation 12,571 6,247 ------------ ------------ Earnings per share Basic 8.7p 4.5p Diluted 8.3p 4.3p Balance Sheet At 31 December 1999 1998 (pound)'000 (pound)'000 Unaudited Audited ------------ ------------ Fixed assets Intangible assets 683,197 7,938 Tangible assets 24,885 4,671 Investments 1,617 - ------------ ------------ 709,699 12,609 ------------ ------------ Current assets Stocks 24,532 6,652 Debtors 46,328 17,560 Investments 49,850 21,435 Cash at bank and in hand 36,038 8,230 ------------ ------------ 156,748 53,877 Creditors:amounts falling due within one year (107,027) (14,384) ------------ ------------ Net current assets 49,721 39,493 ------------ ------------ Total assets less current liabilities 759,420 52,102 Creditors: amounts falling due in more than one year (80,133) (1,508) ------------ ------------ Net assets 679,287 50,594 ------------ ------------
Summary of significant differences between U.S. generally accepted accounting principles followed by the Group and U.K. generally accepted accounting principles. The Group's consolidated financial statements have been prepared under U.S. GAAP, which differs in certain respects from U.S. GAAP. The principal differences between the Group's accounting policies under U.S. GAAP and U.K. GAAP are set out in the tables below: Reconciliation of net profit/(loss) from U.S. GAAP to U.K. GAAP
Years ended December 31, 1999 1998 1999 1998 $'000 $'000 (pound)'000 (pound)'000 ------- -------- ----------- ----------- Net (loss)/income as reported under U.S. GAAP (94,998) 20,572 (59,046) 12,205 Adjustments to conform to U.K. GAAP: Merger accounting adjustments - elimination of pooled profits and losses (16,437) (16,643) (10,196) (10,026) - restructuring costs charged to income 87,877 - 54,514 - - merger transaction costs capitalised 22,967 - 14,247 - Amortisation of capitalised goodwill 11,004 11,137 6,802 6,709 Amortisation under acquisition accounting (919) - (570) - Recognition of deferred tax asset (2,878) (12,890) (1,771) (7,765) Stock option compensation costs 11,933 5,497 7,362 3,313 Tax benefit from exercise of non-qualified stock options 1,967 3,006 1,229 1,811 --------- -------- ----------- ----------- Net (loss)/income as reported under U.K. GAAP 20,516 10,679 12,571 6,247 Shareholders' equity 1999 1998 1999 1998 Years ended December 31, $'000 $'000 (pound)'000 (pound)'000 --------- -------- ----------- ----------- As reported under U.S. GAAP 587,284 663,314 364,387 398,674 Adjustments for: Capitalisation of goodwill (216,769) (223,776) (134,497) (134,497) Goodwill amortisation 26,161 15,690 16,232 9,430 Acquisition accounting for Roberts Pharmaceutical Corp 735,242 (341,810) 456,191 (205,439) Deferred tax (37,111) (29,240) (23,026) (17,574) --------- -------- ----------- ----------- As reported under U.K. GAAP 1,094,807 84,178 679,287 50,594 --------- -------- ----------- -----------
Earnings per share per U.K. adjusted results Earnings per share has been calculated by dividing the profit on ordinary activities after taxation for each period by the weighted average number of shares in issue during those periods, in accordance with FRS14. The weighted average number of shares used in calculating fully diluted earnings per share has been adjusted for the effects of all dilutive potential ordinary shares in accordance with FRS14.
Years ended December 31, 1999 1998 ----------- ----------- Basic earnings/(loss) per share 8.7p 4.5p Diluted earnings/(loss) per share 8.3p 4.3p Basic earnings per share - weighted average shares 145,202,383 136,924,061 Effect of dilutive stock options 6,326,876 7,475,065 ----------- ----------- Diluted earnings per share - weighted average shares 151,529,259 144,399,126 ----------- -----------
-----END PRIVACY-ENHANCED MESSAGE-----