AbbVie terminates offer for Shire

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION (IN WHOLE OR IN PART) IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION For immediate release 21 October 2014 Shire plc AbbVie terminates offer for Shire Break fee of $1.635bn now payable Independent Shire positioned for sustainable growth * In light of the AbbVie Board's decision to change its recommendation and to advise its shareholders to vote against its Offer, Shire believes that there is now no realistic prospect of AbbVie completing its Offer * The Board of Shire believes that it is in the best interests of its shareholders, employees and other stakeholders to resolve the situation as quickly as possible. Accordingly it has agreed with AbbVie to terminate the Cooperation Agreement and Shire will not proceed with the Scheme * The break fee of approximately $1.635 billion is now payable by AbbVie to Shire * Shire is a well-positioned independent business with a focused growth strategy. The business has maintained robust momentum throughout the offer period * Shire's trading since the end of Q2 has remained strong. Shire's Q3 results will be announced on 24 October 2014 Susan Kilsby, Chairman of Shire, said: "Shire has an exceptional track record of delivering value and growth. Thisgrowth profile has been accelerated by our new management team executing aclear and focused strategy. Importantly, we have maintained this momentum sinceJuly and made material progress across our business. Whilst we are disappointedthat the offer will not now complete, we continue to enjoy excellent prospectsas we execute our plan to double Shire's product sales to $10 billion by 2020." On 16 October 2014, the Board of AbbVie confirmed that it had withdrawn itsrecommendation of its offer for Shire which was announced on 18 July 2014 (the"Offer") solely as a result of the anticipated impact of the US Treasury Noticeon the benefits that AbbVie expected from its Offer. AbbVie has not providedany financial quantification of this impact. AbbVie's Offer was conditional on the approval of its stockholders. In light ofthe AbbVie Board's decision to change its recommendation and to advise its ownshareholders to vote against its Offer, Shire believes that there is now norealistic prospect that this condition will be satisfied. As a result, theBoard of Shire believes that it is in the best interests of its shareholders,employees and other Shire stakeholders for the situation to be resolved asquickly as possible. Accordingly, the Board of Shire has agreed with AbbVie to terminate theCooperation Agreement and that AbbVie shall be released from its obligationsunder Rule 2.7(b) and Rule 24.1 of the Takeover Code to proceed with the Offer.The Board of Shire has withdrawn its recommendation of the Offer and will notproceed with the Scheme. As a result, the Takeover Panel has confirmed that theoffer period will now end and that AbbVie will be subject to Rule 35.1 of theTakeover Code from the publication of this announcement. Pursuant to Rule 35.1of the Takeover Code, AbbVie is prohibited from, amongst other things, makingany offer for Shire without the consent of the Takeover Panel for a period of12 months from today's date. Shire has entered into a termination agreement with AbbVie pursuant to whichAbbVie will now pay to Shire the break fee of approximately $1.635 billion by5.00 p.m. (London time) on 21 October 2014. The Board believes strongly that, as an independent company, Shire's focusedgrowth strategy will continue to deliver significant shareholder value andpatient benefits. With an experienced and high-performing management team,enhanced capabilities and lean infrastructure, competitive operational andfinancial scale, and a portfolio focused on high-growth opportunities, Shirehas assembled the core elements required to drive innovation and generatesuperior returns over the long-term. Shire expects to deliver double-digit compound annual product sales growth fromits current portfolio through 2020, more than doubling its annual product salesto $10 billion. In addition, Shire believes that there are multipleopportunities available for Shire to grow through business development bothwithin the core franchises of Shire as well as in adjacent therapeutic areas. Shire has made important progress since the commencement of the offer periodboth financially and operationally. The Company reported record quarterlyrevenues for Q2 2014 in July, increasing guidance for earnings growth for thesecond time in the year to low-to-mid thirty percent growth in 2014. Shire'strading since the end of Q2 has remained strong. Since the commencement of the offer period, Shire has also announced theachievement of a number of important milestones including: * FDA acceptance for filing with priority review of a sNDA for Vyvanse for Adults with Binge Eating Disorder * Ruling in the District Court for New Jersey in favour of Shire that certain claims of the patents protecting Vyvanse® were both infringed and valid * A strategic licensing and collaboration agreement with ArmaGen and ongoing divestiture of non-core assets * Receipt of $248 million cash refund from the Canadian revenue authorities, with a further $162 million due in late 2014 Shire will provide an update on the strong momentum in its business at the Q32014 results on 24 October 2014. Shire also intends to host an Analyst and Investor day later this year toprovide a further update on the strategy of the Company, the performance of itscore franchises and on its pipeline. Definitions, Sources and Bases Unless the context requires otherwise, terms defined in the joint announcementmade by Shire and AbbVie on 18 July 2014 shall have the same meaning herein. The Shire forecasts and targets included in this announcement are derived fromShire's Long Range Plan from 2014 to 2020 (the "LRP"), business papers producedto support the LRP and Shire papers subsequently produced as part of thebusiness planning process. The forecast product sales targets in this announcement are consistent with theLRP for the period from 2014 to 2020, which is at constant exchange rates, andreflects net sales for each product and key line extensions currentlyidentified as in Phase III, Phase II and those in (or soon to enter) Phase Iincluded in the LRP as launching before the end of 2020. The forecast product sales included in the LRP are risk-adjusted to reflectShire's assessment of the individual probability of launch of products indevelopment, and the probability of success in further life cycle managementtrials. Estimates for these probabilities are based on industry wide data forrelevant clinical trials in the pharmaceutical industry at a similar stage ofdevelopment. For each pharmaceutical product, there is a range of possible outcomes fromclinical development, driven by a number of variables, including safety,efficacy and product labelling. In addition, if a product is approved, theeffect of commercial factors including the patient population, the competitiveenvironment, pricing and reimbursement is also uncertain. As a result, theactual net sales achieved by a product over its commercial life will bedifferent, perhaps materially so, from the risk adjusted net sales figures inthis announcement and should be considered in this light. Attention is drawn to the notice set out under the heading Forward-LookingStatements below. NOTES TO EDITORS Shire enables people with life-altering conditions to lead better lives. We provide treatments in Rare Diseases, Neuroscience, Gastrointestinal andInternal Medicine and we are developing treatments for symptomatic conditionstreated by specialist physicians in other targeted therapeutic areas. CONTACTS Shire Media Relations Stephanie Fagan +1 201 572 9581 Shire Investor Relations Jeff Poulton + 781 482 0945 Sarah Elton-Farr + 44 1256 894157 FTI Consulting (Media Adviser to the Company) Andrew Lorenz (London) +44 77 7564 1807 Ben Atwell (London) +44 20 3727 1000 David B. Roady (New York) +1 212 850 5600 Robert Stanislaro (New York) +1 212 850 5600 Evercore (Financial Adviser to the Company) Francois Maisonrouge +44 20 7653 6000 Edward Banks Morgan Stanley (Financial Adviser to the Company) Michele Colocci +44 20 7425 8000 Peter Moorhouse (Corporate Broking) Deutsche Bank (Financial Adviser to the Company) Nick Bowers (Corporate Broking) +44 20 7545 8000 Ben Lawrence (Corporate Broking) Citi (Financial Adviser to the Company) Christopher Hite +1 212 816 1818 Goldman Sachs (Financial Adviser to the Company) Raj Shah +44 20 7774 1000 A copy of this announcement will be available at www.shire.com. The content ofthe website referred to in this announcement is not incorporated into and doesnot form part of this announcement. FURTHER INFORMATION Evercore Partners International LLP ("Evercore"), which is authorised andregulated in the United Kingdom by the Financial Conduct Authority, is actingas financial adviser exclusively for Shire and no one else in connection withthe matters referred to in this announcement and will not regard any otherperson as its client in relation to the matters referred to in thisannouncement and will not be responsible to anyone other than Shire forproviding the protections afforded to clients of Evercore, nor for providingadvice in relation to the matters referred to in this announcement. Morgan Stanley & Co. International plc, which is authorised by the PrudentialRegulation Authority and regulated by the Financial Conduct Authority and thePrudential Regulation Authority in the United Kingdom, is acting as financialadviser to Shire and no one else in connection with the matters referred to inthis announcement. In connection with such matters, Morgan Stanley & Co.International plc, its affiliates and its and their respective directors,officers, employees and agents will not regard any other person as theirclient, nor will they be responsible to any other person other than Shire forproviding the protections afforded to their clients or for providing advice inconnection with the contents of this announcement or any other matter referredto herein. Citigroup Global Markets Limited, which is authorised by the PrudentialRegulation Authority and regulated by the Financial Conduct Authority and thePrudential Regulation Authority, each in the United Kingdom, is acting asfinancial adviser to Shire and for no one else in connection with the mattersset out in this announcement. In connection with such matters, Citigroup GlobalMarkets Limited, its affiliates and its and their respective directors,officers, employees and agents will not regard any other person as theirclient, nor will they be responsible to anyone other than Shire for providingthe protections afforded to its clients or for providing advice in connectionwith the contents of this announcement or any matter referred to herein. Goldman Sachs International, which is authorised by the Prudential RegulationAuthority and regulated by the Financial Conduct Authority and the PrudentialRegulation Authority in the United Kingdom, is acting as financial adviser toShire and no one else in connection with the matters referred to in thisannouncement. In connection with such matters Goldman Sachs International, itsaffiliates and its and their respective directors, officers, employees andagents will not regard any other person as their client, nor will they beresponsible to anyone other than Shire for providing the protections affordedto clients of Goldman Sachs International, or for giving advice in connectionwith the contents of this announcement or any other matter referred to herein. Deutsche Bank AG is authorised under German Banking Law (competent authority:BaFIN - Federal Financial Supervisory Authority). Deutsche Bank AG, LondonBranch is further authorised by the Prudential Regulation Authority and issubject to limited regulation by the Financial Conduct Authority and PrudentialRegulation Authority. Deutsche Bank is acting as financial adviser to Shire andno one else in connection with the contents of this Announcement and will notbe responsible to anyone other than Shire for providing the protectionsafforded to its clients or for providing advice in connection with the contentsof this Announcement or any matter referred to herein. FORWARD - LOOKING STATEMENTS - "SAFE HARBOR" STATEMENT UNDER THE PRIVATESECURITIES LITIGATION REFORM ACT OF 1995 Statements included in this announcement that are not historical facts areforward-looking statements. Forward-looking statements involve a number ofrisks and uncertainties and are subject to change at any time. In the eventsuch risks or uncertainties materialize, Shire's results could be materiallyadversely affected. The risks and uncertainties include, but are not limitedto, that:  Shire's products may not be a commercial success;  revenues from ADDERALL XR are subject to generic erosion and revenues from INTUNIV will become subject to generic competition starting in December 2014;  the failure to obtain and maintain reimbursement, or an adequate level of reimbursement, by third-party payors in a timely manner for Shire's products may impact future revenues, financial condition and results of operations;  Shire conducts its own manufacturing operations for certain of its Rare Diseases products and is reliant on third party contractors to manufacture other products and to provide goods and services. Some of Shire's products or ingredients are only available from a single approved source for manufacture. Any disruption to the supply chain for any of Shire's products may result in the Shire being unable to continue marketing or developing a product or may result in Shire being unable to do so on a commercially viable basis for some period of time;  the development, approval and manufacturing of Shire's products is subject to extensive oversight by various regulatory agencies. Submission of an application for regulatory approval of any of Shire's product candidates, such as Shire's planned submission of a New Drug Application to the FDA for lifitegrast as a treatment for the signs and symptoms of dry eye disease in adults, may be delayed for any number of reasons and, once submitted, may be subjected to lengthy review and ultimately rejected. Moreover, regulatory approvals or interventions associated with changes to manufacturing sites, ingredients or manufacturing processes could lead to significant delays, increase in operating costs, lost product sales, an interruption of research activities or the delay of new product launches;  the actions of certain customers could affect Shire's ability to sell or market products profitably. Fluctuations in buying or distribution patterns by such customers can adversely impact Shire's revenues, financial conditions or results of operations;  investigations or enforcement action by regulatory authorities or law enforcement agencies relating to Shire's activities in the highly regulated markets in which it operates may result in the distraction of senior management, significant legal costs and the payment of substantial compensation or fines;  adverse outcomes in legal matters and other disputes, including Shire's ability to enforce and defend patents and other intellectual property rights required for its business, could have a material adverse effect on Shire's revenues, financial condition or results of operations;  Shire faces intense competition for highly qualified personnel from other companies, academic institutions, government entities and other organizations. Shire is undergoing a corporate reorganization and the consequent uncertainty could adversely impact Shire's ability to attract and/or retain the highly skilled personnel needed for Shire to meet its strategic objectives;  failure to achieve Shire's strategic objectives with respect to the acquisition of ViroPharma Incorporated may adversely affect Shire's financial condition and results of operations; and other risks and uncertainties detailed from time to time in Shire's filingswith the US Securities and Exchange Commission, including its most recentAnnual Report on Form 10-K.