New CEO reports Q1 and sets out strategy for growth

SHIRE PLC - New CEO reports Q1 and sets out strategy for growth

PR Newswire

London, May 2

New Chief Executive reports Q1 results and sets out strategy for growth

Shire delivers 10% increase in Non GAAP earnings; full year EPS guidance inline with consensus (1)

(1) See page 4 for assumptions.

(2) Percentages compare to equivalent 2012 period.

(3) Percentage growth on a Constant Exchange Rate ("CER") basis is in linewith the reported growth for the quarter.

(4) US GAAP operating income includes the impact of goodwill impairment, seepage 11 for details.

The Non GAAP financial measures included within this release are explained onpage 21, and are reconciled to the most directly comparable financial measuresprepared in accordance with US GAAP on pages 18 - 20.

Flemming Ornskov, M.D., Chief Executive Officer, commented:

"In Q1 2013 we experienced continued strong performance from VYVANSE, INTUNIV,LIALDA, VPRIV and FIRAZYR offset by the challenge of lower sales of DERMAGRAFTand REPLAGAL which we are actively managing. We generated $257 million of cashduring the quarter and delivered 10% Non GAAP earnings growth while investingin our R&D pipeline.

Shire has consistently delivered growth significantly above the industry levelsof mid single digit and we intend that this will be the case in the future. Aswe look forward to the remainder of the year, we continue to expect to deliverearnings growth in line with current consensus earnings expectations for 2013(1).

On becoming Shire Chief Executive Officer, I am pleased to confirm thedirection we will take, in order to continue to deliver significantly aboveindustry average growth. We intend to continue to be a high-growth innovationbusiness providing differentiated specialist medicines in areas of high unmetneed for patients treated by specialist physicians. Shire's strategicpriorities are to grow sales of our existing portfolio and to bring newinnovative treatments to market through both R&D and Business Development.

To deliver this we are evolving the way the business works, introducing aflatter and more scalable structure of initially five commercially focusedbusiness units (Rare Diseases, Neuroscience, GI, Regenerative Medicine andInternal Medicine) and a single R&D organization supported by centralizedcorporate functions.

In the first quarter we added to our pipeline with three acquisitions: LotusTissue Repair, Premacure and SARcode BioSciences. The last two provide us withthe foundation to build a potential new business unit in ophthalmology - agrowing market with many unmet patient needs. We're reviewing our pipeline toprioritize investment in our innovative, late stage pipeline assets. We alsoaim to focus our business development on acquiring later stage assets and togrow our sales in Latin America and Asia.

As the new Chief Executive, I am excited by the potential opportunities fordelivering even greater value to Shire's patients and shareholders and I lookforward to updating you in the many quarters to come."

SHIRE STRATEGY

Flemming Ornskov, Chief Executive Officer ("CEO") today sets out his strategyfor Shire's future and outlines a re-alignment of its business structure todrive future growth and innovation. Shire will continue to grow throughfocusing on its core strengths of developing and marketing innovativespecialist medicines to meet significant unmet patient needs.

The growth strategy will be delivered through a sharpened focus on two keypriorities:

Commercial Excellence - driving optimum performance of currently marketedproducts

Pipeline Innovation - building the pipeline of specialty medicines to deliverfuture value through both Research & Development ("R&D") and BusinessDevelopment ("BD")

These priorities will be underpinned by a simplification of the businessstructure in order to drive commercial excellence and pipeline innovation.Shire will have an "In-Line" marketed product group and a "Pipeline" group,supported by a single technical operations group and simplified, centralizedcorporate functions.

Delivering the strategy

The newly established "In-Line" marketed products group will consist of fivebusiness units ("BU"s) focused exclusively on commercial delivery; RareDiseases, Neuroscience (formerly Behavioral Health), Gastrointestinal ("GI"),Regenerative Medicine ("RM") and Internal Medicine. More BUs will be formedwhen significant assets are either acquired or reach the appropriate stage ofdevelopment.

The Pipeline group, consisting of R&D and BD, will prioritize its activitiestowards late stage development programs. Pre-clinical development focus will beprimarily in rare diseases. As part of the delivery of this strategy, Shire's R&D will be led by a single R&D organization. BD will continue to be a keyactivity for Shire, focused on identifying later stage development programs andin market products in target specialist areas.

In addition to chairing a newly formed Executive Committee, Flemming Ornskovwill also chair the "In-Line" and "Pipeline" group teams, which will be theengines accountable for driving the profitable growth.

Geographic expansion

Shire will work to increase profitability of its existing internationalbusiness while also investing in Asia and Latin America. Plans are underway formore focused growth in Japan where Shire recently announced the establishmentof a new office, and in Brazil which is already the 5th largest country forShire's rare disease business sales. China has also been identified as apriority and Shire is evaluating options for expanding more of the businessinto this dynamic market.

First Quarter 2013 Unaudited Results

Product sales in Q1 2013 were $1,117 million, up 1% compared against a strongset of comparatives in Q1 2012.

Five of our top ten products delivered double digit growth: VYVANSE® (up 15% to$298 million), LIALDA®/MEZAVANT® (up 12% to $101 million), VPRIV® (up 14% to$82 million), INTUNIV® (up 13% to $78 million) and FIRAZYR®(up 112% to $42million).

Total product sales were held back this quarter by DERMAGRAFT® (down 62% to $19million), resulting from the ongoing restructuring of the RM commercialorganization; REPLAGAL® (down 15% to $114 million) due to some shipment timingsand as increased competition outweighed continued growth in new naïve patients;and ELAPRASE® (down 9% to $114 million) due to uneven ordering patterns inLatin America.

The rate of growth in total product sales (Q1 2013: +1%) is expected to improveto mid-to-high single digit growth for the full year as our portfolio continuesto deliver growth and we benefit from easing comparatives over the second halfof the year.

Total revenues decreased 1% to $1,162 million (Q1 2012: $1,172 million) asgrowth in product sales was offset, as expected, by lower royalties,particularly ADDERALL XR® royalties received from Impax Laboratories Inc.("Impax") due to both lower volumes and a lower royalty rate payable since thelaunch of a new generic product.

On a Non GAAP basis:

Operating income was up 9% to $393 million (Q1 2012: $362 million), as combinedtotal operating costs decreased at a higher rate (down 5%) than total revenues,driven by lower Selling, General and Administrative ("SG&A") expenditure (down16% reflecting both lower SG&A this year and comparison to high SG&A in Q12012). The effect was moderated by higher R&D expenditure, which was up 15% aswe continue to progress a number of early and late stage pipeline programsexpected to drive future growth.

On a US GAAP basis:

Operating income was down 56% to $129 million (Q1 2012: $295 million) primarilydue to an impairment charge for goodwill ($199 million) relating to Shire's RMbusiness. Following a review of future forecasts for the RM business unit,management determined in Q1 2013 that future sales are now expected to be lowerthan anticipated at the time of acquisition and consequently in accordance withUS GAAP it has been determined that the goodwill attributable to the RMbusiness unit is impaired.

Non GAAP diluted earnings per ADS increased 10% to $1.63 (Q1 2012: $1.48) dueto higher Non GAAP operating income and a lower effective tax rate on Non GAAPincome of 19% (Q1 2012: 20%).

On a US GAAP basis, diluted earnings per ADS decreased 72% to $0.35 (Q1 2012:$1.24), due to lower US GAAP operating income and a higher US GAAP effectivetax rate of 46% (Q1 2012: 17%) both of which reflect the impact of theimpairment of RM goodwill.

Cash generation, a Non GAAP measure, decreased by 17% to $257 million (Q1 2012:$310 million) as higher cash receipts from gross product sales were more thanoffset by the payment to settle the litigation with Impax ($48 million), lowerroyalty receipts and higher sales deduction payments in the quarter.

Free cash flow, also a Non GAAP measure, decreased by 54% to $113 million (Q12012: $248 million) primarily due to the lower cash generation and the effectof higher cash tax payments in Q1 2013 as compared to Q1 2012.

On a US GAAP basis, net cash provided by operating activities was down 38% to$160 million (Q1 2012: $257 million).

OUTLOOK

We reiterate our confidence in delivering Non GAAP earnings growth in line withconsensus earnings expectations for 2013(1).

For the full year we now anticipate product sales growth in the mid-to-highsingle digits. The rate of growth in total product sales will improve from thatseen in the first quarter as our portfolio continues to deliver growth and webenefit from an easing of comparatives over the second half of the year.

Specifically we expect ELAPRASE to post double digit growth for the full yearand we expect REPLAGAL sales to recover from the first quarter decline to bemore in line with 2012 for the full year. We expect DERMAGRAFT to return togrowth in the second half but sales for the full year will still be lower thanin 2012.

We continue to expect Royalties and other revenues to be 30-40% lower than2012, and our Non GAAP gross margin is expected to remain at a similar level to2012.

We expect low-to-mid teens growth in Non GAAP R&D as we continue to investincreasing amounts in our promising pipeline and to progress our late stageclinical trials. As a result of lower Non GAAP SG&A in Q1, and continuedcareful management of our cost base, we now expect Non GAAP SG&A for the fullyear to be marginally lower than 2012. Taken together, we now expect low singledigit growth in combined Non GAAP R&D and SG&A, creating operating leverage forthe full year.

Our core effective tax rate on Non GAAP income is anticipated to remain in therange of 18-20%.

As we look forward to the remainder of the year, we continue to expect todeliver earnings growth in line with current consensus earnings expectationsfor 2013 (1).

Based on the most recent consensus estimates compiled by Consensus ForecastLtd, as of the date of this press release, of $6.67 Non GAAP diluted earningsper ADS for the year ended 31 December 2013, available on Shire's website (http://www.shire.com/shireplc/en/investors/forecasts).

FIRST QUARTER 2013 AND RECENT PRODUCT AND PIPELINE DEVELOPMENTS

Products

VYVANSE - for the treatment of Attention Deficit Hyperactivity Disorder("ADHD")

On May 1, 2013 Shire announced that the US Food and Drug Administration ("FDA")approved VYVANSE as a maintenance treatment in children and adolescents withADHD. With this new approval, VYVANSE is currently the only stimulant approvedfor maintenance treatment in children and adolescents aged 6 to 17 years withADHD, as well as in adults with ADHD.

DERMAGRAFT - for the treatment of Diabetic Foot Ulcers ("DFU") in Canada

On March 25, 2013 Shire announced that DERMAGRAFT is now available in Canadafor the treatment of DFU, following its approval by Health Canada as a class IVmedical device for the treatment of DFU in September 2012.

VPRIV - for the treatment of Gaucher disease (Type 1)

On March 21, 2013 the Committee for Medicinal Products for Human Use of theEuropean Medicines Agency issued a positive opinion regarding an update to theclinical efficacy and safety section of the VPRIV Summary of ProductCharacteristics to include information on long term clinical data relating toefficacy and safety in skeletal pathology from the TKT025 extension study inType 1 Gaucher patients.

Pipeline

Lisdexamfetamine dimesylate(1) ("LDX") - for the treatment of negative symptomsof schizophrenia ("NSS")

Shire has cancelled the NSS Phase 3 program after a review and prioritizationof Shire's development portfolio and taking into account investmentrequirements for recent acquisitions. No patients had been dosed in the studiesand this decision was not due to any safety issues with LDX in any patientpopulation. Shire remains committed to continuing Phase 3 trials for MDD andBED and these are enrolling as expected.

(1) Currently marketed as VYVANSE in the US and ELVANSE® in certain territoriesin the EU for the treatment of ADHD.

HGT4510 - for Duchenne Muscular Dystrophy ("DMD")

In April 2013, following analysis of the results of toxicology studies, Shirediscontinued development of HGT4510 and returned Shire's rights in the asset toAcceleron Pharma Inc. The development of HGT4510 was placed on clinical hold inFebruary 2011, subject to the completion of the toxicology studies.

VASCUGEL® - for the treatment of end-stage renal disease.

In March 2013, Shire enrolled the first patient in its Phase 2 clinical programfor VASCUGEL.

On April 25, 2013, Shire settled all pending litigation with Actavis, Inc.,Actavis LLC, and Actavis Elizabeth LLC (collectively "Actavis") and WatsonLaboratories, Inc.-Florida, Watson Pharma, Inc. and ANDA, Inc. (collectively"Watson") in connection with Actavis's and Watson's Abbreviated New DrugApplications ("ANDAs") for generic versions of INTUNIV for the treatment ofADHD.

The settlement provides Actavis with a license to make and market Actavis'sgeneric versions of INTUNIV in the United States on December 1, 2014, orearlier in certain limited circumstances. Such sales will require the paymentof a royalty of 25% of gross profits to Shire during the 180 day period ofActavis's exclusivity. The settlement also provides Watson with a license tomake and market Watson's generic versions of INTUNIV in the United States, 181days after Actavis's launch of generic INTUNIV, or earlier in certain limitedcircumstances.

Acquisition of SARcode Bioscience Inc. ("SARcode")

On April 17, 2013 Shire completed the acquisition of SARcode, a privately heldbiopharmaceutical company based in Brisbane, California. This acquisitionbrings a new Phase 3 compound, lifitegrast, currently under development for thesigns and symptoms of dry eye disease, into Shire's portfolio. Shireanticipates launching lifitegrast in the United States as early as 2016 pendinga positive outcome of the Phase 3 clinical development program and regulatoryapprovals. Shire is acquiring the global rights to lifitegrast and willevaluate an appropriate regulatory filing strategy for markets outside of theUnited States. After customary closing adjustments, cash consideration paid onclosing amounted to $150 million with further potential contingent paymentsupon achievement of certain clinical, regulatory, and commercial milestones.

Acquisition of Premacure AB ("Premacure")

On March 8, 2013 Shire completed the acquisition of Premacure, a privately heldbiotechnology company based in Uppsala, Sweden, developing PREMIPLEX®, aprotein replacement therapy in Phase 2 development for the prevention ofretinopathy of prematurity ("ROP"). Shire purchased Premacure for an up-frontpayment of $31 million with further potential contingent payments based on theachievement of pre-specified development and commercial milestones.

Shire will continue the ongoing Phase 2 study, the primary goal of which is tocompare the severity of ROP among patients treated with PREMIPLEX, versus anuntreated control population matched for gestational age.

The acquisition of SARcode and Premacure will provide Shire with the foundationto build a potential new business unit in ophthalmology - a growing market withmany unmet patient needs.

Acquisition of Lotus Tissue Repair, Inc. ("Lotus")

On February 12, 2013 Shire completed the acquisition of Lotus, a privately heldbiotechnology company, based in Cambridge, MA, with a protein replacementtherapy in pre-clinical development currently being investigated for thetreatment of dystrophic epidermolysis bullosa ("DEB"). DEB is a devastatingorphan disease for which there is no currently approved treatment option otherthan palliative care. Shire purchased the company for an up-front cash paymentof $49 million and further contingent cash payments may be payable in futureperiods, depending on the achievement of certain safety and developmentmilestones.

Share buy-back Program

In Q4 2012 Shire commenced a share buy-back program, for the purpose ofreturning funds to shareholders, of up to $500 million, through both directpurchases of ordinary shares and through the purchase of ordinary sharesunderlying American Depositary Receipts. As of April 30, 2013 Shire had madeon-market repurchases totaling 7,374,182 ordinary shares at a cost of $222.7million (excluding transaction costs).

For the weighted average number of shares used for Non GAAP diluted earningsper ADS, please refer to the Non GAAP reconciliation tables on pages 18 - 19.

BOARD AND COMMITTEE CHANGES

Shire announces that Susan Kilsby, Non Executive Director of Shire becomes theChairman of Shire's Audit, Compliance & Risk Committee with immediate effect.Susan has been a member of this Committee since September 2011 when she joinedthe Board. She takes over the Chairmanship from David Kappler who remains amember of the Committee.

Shire also announces that Dr David Ginsburg becomes Chairman of Shire's Science& Technology Committee with immediate effect. Dr David Ginsburg has been amember of the Committee and the Board since June 2010 and he has more recentlybeen the acting Chairman of the Science & Technology Committee.

ADDITIONAL INFORMATION

The following additional information is included in this press release:

Overview of First Quarter 2013 Financial Results 8

For further information please contact:

OVERVIEW OF FIRST QUARTER 2013 FINANCIAL RESULTS

1. Product sales

NPA"). Exit market share represents the average monthly US market share in themonth ended March 31, 2013.

VYVANSE - ADHD

VYVANSE product sales showed strong growth (up 15%) in Q1 2013 compared to Q12012, primarily as a result of higher prescription demand (up 6%) and theeffect of a price increase taken since Q1 2012. Shire also experienced furtherdestocking in the retail channel which was offset by the positive impact ofsome shipment slippage from Q4 2012.

ELAPRASE - Hunter syndrome

Product sales from ELAPRASE in Q1 2013 were down 9% compared to Q1 2012 due tothe impact of the timing of large orders to certain markets which order lessfrequently. The underlying number of patients being treated with ELAPRASEcontinues to grow.

REPLAGAL - Fabry disease

REPLAGAL sales for the quarter were down 15% primarily due to the impact ofordering patterns in Latin America and lower volumes in Europe, where theimpact of increased competition outweighed the continued growth in new naïvepatients. On a global basis, total patient numbers continue to show good longterm growth.

LIALDA/MEZAVANT - Ulcerative colitis

Product sales for LIALDA/MEZAVANT increased (up 12%) in Q1 2013 primarily dueto higher market share in the US and the effect of a price increase taken sinceQ1 2012. These positive factors were to a lesser extent offset by the effect ofhigher US sales deductions and higher destocking at the retail level.

VPRIV - Gaucher disease

Growth in VPRIV product sales (up 14%) in Q1 2013 was driven by the continuedgrowth in the number of patients on therapy.

INTUNIV - ADHD

The strong growth in INTUNIV product sales (up 13%) in Q1 2013 was driven bygrowth in US prescription demand (up 12%) and the effect of price increasestaken since Q1 2012. These positive factors were partially offset by the effectof destocking in Q1 2013 as compared to slight stocking in Q1 2012.

PENTASA - Ulcerative colitis

PENTASA product sales (up 8%) benefited from price increases taken since Q12012, the impact of which was moderated by a small amount of retail pipelinedestocking in Q1 2013.

FIRAZYR - Hereditary Angioedema ("HAE")

The significant growth in FIRAZYR sales (up 112%) reflects the continuedsuccess of the product in the US market.

DERMAGRAFT - DFU

DERMAGRAFT product sales were down 62%, reflecting the impact of an ongoingrestructuring of the RM sales and marketing organization and the implementationof a new commercial model. Whilst our future expectations for long term growthof DERMAGRAFT have been revised downwards, we still expect the product toreturn to growth over coming quarters.

ADDERALL XR - ADHD

ADDERALL XR product sales decreased (down 10%) in Q1 2013 primarily as a resultof lower US prescription demand (down 20%) following the introduction of a newgeneric competitor in Q2 2012 and to a lesser extent the effect of higher salesdeductions as a percentage of sales in Q1 2013 compared to Q1 2012. Thesenegative factors were partially offset by the benefit of a price increase takensince Q1 2012.

As expected, royalty income from 3TC and ZEFFIX continued to decline due toincreased competition from other products and the expiry of patents in certainterritories.

Royalties from ADDERALL XR in Q1 2013 were significantly impacted by reducedsales volume as well as a lower royalty rate payable on sales of authorizedgeneric ADDERALL XR by Impax, since the launch of a new generic version in Q22012.

Non GAAP cost of product sales as a percentage of product sales decreasedslightly in Q1 2013, due to improved margins in the ADHD portfolio which wereonly partially offset by lower margins on other products.

Research and Development ("R&D")

Non GAAP R&D increased by $28.7 million, or 15%, due to our increasedinvestment in a number of targeted R&D programs including non-ADHD programs forLDX, and spend on SPD602 for Iron Overload and SRM003 for Acute VascularRepair, acquired since Q1 2012.

US GAAP R&D increased by $3.9 million, or 2%, a lower rate of increase than ona Non GAAP basis as Q1 2012 included payments in respect of acquired andin-licensed products, not repeated in Q1 2013.

Selling, General and Administrative ("SG&A")

In Q2 2012 Shire amended its Non GAAP policy to exclude costs related to thesettlement of litigation, government investigations and other disputes,together with related external legal costs. Non GAAP SG&A in Q1 2012 has notbeen restated as the amounts incurred in that period were not significant.

Non GAAP SG&A decreased by $68.9 million, or 16%, partly due to the benefit ofactions taken during last year, in addition to careful management of our costbase. The rate of decline in SG&A in Q1 2013 was accentuated by the high levelof SG&A in Q1 2012 relative to the level of spend in subsequent quarters in2012.

US GAAP SG&A decreased by $61.3 million, or 12% primarily due to legal andlitigation costs excluded from Non GAAP SG&A in Q1 2013.

Goodwill impairment charges

For the three months to March 31, 2013 Shire recorded an impairment charge forgoodwill of $198.9 million (Q1 2012: $nil) relating to Shire's RM business.Following a review of future forecasts for the RM business unit, managementdetermined in Q1 2013 that future sales are now expected to be lower thananticipated at the time of acquisition and consequently in accordance with USGAAP, it has been determined that the goodwill attributable to the RM businessunit is impaired. Whilst our future expectations for long term growth ofDERMAGRAFT have been revised downwards, we still expect the product to returnto growth over coming quarters.

Gain on sale of product rights

For the three months to March 31, 2013 Shire recorded a gain on sale of productrights of $6.5 million (2012: $7.2 million) following re-measurement of thecontingent consideration receivable from the divestment of DAYTRANA®.

Reorganization costs

For the three months to March 31, 2013 Shire recorded reorganization costs of$17.5 million (Q1 2012: $nil) relating to the collective dismissal and closureof Shire's facility at Turnhout, Belgium.

Integration and acquisition costs

For the three months to March 31, 2013 Shire recorded integration andacquisition costs of $4.1 million primarily associated with the acquisition ofLotus and integration of FerroKin Biosciences, Inc. ("FerroKin") in addition tocharges related to the change in fair value of deferred contingentconsideration. In Q1 2012 integration and acquisition costs ($5.3 million)primarily related to the integration of Advanced BioHealing Inc. ("ABH").

Interest expense

For the three months to March 31, 2013 Shire incurred interest expense of $9.1million (Q1 2012: $10.2 million). Interest expense in Q1 2013 principallyrelates to the coupon on Shire's $1,100 million 2.75% convertible bonds due2014.

Taxation

The effective rate of tax on Non GAAP income in Q1 2013 was 19% (Q1 2012: 20%),and on a US GAAP basis the effective rate of tax was 46% (Q1 2012: 17%).

The effective rate of tax in Q1 2013 on a Non GAAP basis is lower than the sameperiod in 2012 due primarily to the recognition of the 2012 US R&D credit inthe first quarter of 2013, partially offset by adverse changes in profit mix.The US R&D credit was recognized in Q1 2013 following the enactment oflegislation on January 2, 2013, approving the extension of the regular R&Dcredit retrospectively.

The effective rate of tax in Q1 2013 on a GAAP basis is higher than the sameperiod in 2012 primarily due to the impact of the impairment of RM goodwillwhich is non-deductible for tax purposes, an increase in unrecognised taxlosses and adverse changes in profit mix but partially offset by therecognition of the 2012 US R&D credit in the first quarter of 2013.

Unaudited US GAAP Consolidated Statements of Cash Flows 15

Selected Notes to the Unaudited US GAAP Financial Statements

Unaudited US GAAP results for the three months to March 31, 2013Consolidated Statements of Income

Earnings per ordinary share - basic 11.7c 43.1c

Earnings per ordinary share - diluted 11.7c 41.4c

Cost of product sales includes amortization of intangible assets relating tofavorable manufacturing contracts of $nil for the three months to March 31,2013 (2012: $0.2 million). SG&A costs include amortization of intangible assetsrelating to intellectual property rights acquired of $45.9 million for thethree months to March 31, 2013 (2012: $45.6 million).

For the weighted average number of shares used for Non GAAP diluted earningsper ADS, please refer to the Non GAAP reconciliation tables on pages 18 - 19.

Unaudited US GAAP results for the three months to March 31, 2013Consolidated Statements of Cash Flows

Unaudited US GAAP results for the three months to March 31, 2013

Selected Notes to the Financial Statements

(1) Earnings Per Share("EPS")

Interest on convertible bonds, net of tax(1) - 8.4

For the three month period ended March 31, 2013 interest on convertible bondhas not been added back as the effect would be anti-dilutive.

Excludes shares purchased by the EBT and under the share buy-back program andpresented by Shire as treasury stock.

Calculated using the treasury stock method.

Calculated using the "if converted" method.

For the weighted average number of shares used for Non GAAP diluted earningsper ADS, please refer to the Non GAAP reconciliation tables on pages 18 - 19.

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

Certain stock options have been excluded from the calculation of diluted EPSbecause (a) their exercise prices exceeded Shire's average share price duringthe calculation period or (b) the required performance conditions were notsatisfied as at the balance sheet date.

For the three month period ended March 31, 2013 the ordinary shares underlyingthe convertible bonds have not been included in the calculation of the dilutedweighted average number of shares, as the effect of their inclusion would beanti-dilutive.

Unaudited US GAAP results for the three months to March 31, 2013

Selected Notes to the Financial Statements

(2) Analysis of revenues

Total SP product sales 746.6 706.7 6% 64%

Total HGT product sales 351.6 351.4 0% 30%

Unaudited results for the three months to March 31, 2013

The impact of convertible debt, net of tax has a dilutive effect on Non GAAPbasis.

The following items are included in Adjustments:

Amortization and asset impairments: Amortization of intangible assets relatingto intellectual property rights acquired ($45.9 million), impairment of RMgoodwill ($198.9 million), and tax effect of adjustments;

Acquisition and integration activities: Costs primarily associated with theacquisition of Lotus and integration of FerroKin ($2.3 million), chargesrelated to the change in fair value of deferred contingent consideration ($1.8million), and tax effect of adjustments;

Divestments, reorganizations and discontinued operations: Re-measurement ofDAYTRANA contingent consideration to fair value ($6.5 million), costs relatingto the collective dismissal and closure of Shire's facility at Turnhout,Belgium ($17.5 million), and tax effect of adjustments;

Legal and litigation costs: Costs related to litigation, governmentinvestigations, other disputes and external legal costs ($4.2 million), and taxeffect of adjustments; and

Depreciation reclassification: Depreciation of $29.1 million included in Costof product sales, R&D costs and SG&A costs for US GAAP separately disclosed forthe presentation of Non GAAP earnings.

Unaudited results for the three months to March 31, 2012

The following items are included in Adjustments:

Amortization and asset impairments: Amortization of intangible assets relatingto intellectual property rights acquired ($45.6 million), and tax effect ofadjustments;

Acquisition and integration activities: Up-front payments made to SangamoBiosciences Inc. and for the acquisition of the US rights to prucalopride(marketed in certain countries in Europe as RESOLOR) ($23.0 million), costsassociated with the acquisition of FerroKin and the integration of ABH ($5.3million); and tax effect of adjustments;

Divestments, reorganizations and discontinued operations: Re-measurement ofDAYTRANA contingent consideration to fair value ($7.2 million), and tax effectof adjustments; and

Depreciation reclassification: Depreciation of $27.2 million included in Costof product sales, R&D costs and SG&A costs for US GAAP separately disclosed forthe presentation of Non GAAP earnings.

Unaudited results for the three months to March 31, 2013

Non GAAP reconciliation

The following table reconciles US GAAP net cash provided by operatingactivities to Non GAAP cash generation:

The following table reconciles US GAAP net cash provided by operatingactivities to Non GAAP free cash flow:

Cash and cash equivalents 1,450.7 1,482.2

Shire enables people with life-altering conditions to lead better lives.

Our strategy is to focus on developing and marketing innovative specialtymedicines to meet significant unmet patient needs.

We provide treatments in Neuroscience, Rare Diseases, Gastrointestinal,Internal Medicine and Regenerative Medicine and we are developing treatmentsfor symptomatic conditions treated by specialist physicians in other targetedtherapeutic areas.

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;

the failure to obtain and maintain reimbursement, or an adequate level ofreimbursement, by third-party payors in a timely manner for Shire's productsmay impact future revenues and earnings;

Shire relies on a single source for manufacture of certain of its products anda disruption to the supply chain for those products may result in Shire beingunable to continue marketing or developing a product or may result in Shirebeing unable to do so on a commercially viable basis;

Shire uses third party manufacturers to manufacture many of its products and isreliant upon third party contractors for certain goods and services, and anyinability of these third party manufacturers to manufacture products, or anyfailure of these third party contractors to provide these goods and services,in each case in accordance with its respective contractual obligations, couldadversely affect Shire's ability to manage its manufacturing processes or tooperate its business;

the development, approval and manufacturing of Shire's products is subject toextensive oversight by various regulatory agencies and regulatory approvals orinterventions associated with changes to manufacturing sites, ingredients ormanufacturing processes could lead to significant delays, increase in operatingcosts, lost product sales, an interruption of research activities or the delayof new product launches;

the actions of certain customers could affect Shire 's ability to sell ormarket products profitably and fluctuations in buying or distribution patternsby such customers could adversely impact Shire's revenues, financial conditionsor results of operations;

investigations or enforcement action by regulatory authorities or lawenforcement agencies relating to Shire's activities in the highly regulatedmarkets in which it operates may result in the distraction of seniormanagement, significant legal costs and the payment of substantial compensationor fines;

adverse outcomes in legal matters and other disputes, including Shire's abilityto obtain, maintain, enforce and defend patents and other intellectual propertyrights required for its business, could have a material adverse effect onShire's revenues, financial condition or results of operations;

and other risks and uncertainties detailed from time to time in Shire's filingswith the U.S. Securities and Exchange Commission, including its most recentAnnual Report on Form 10-K.

This press release contains financial measures not prepared in accordance withUS GAAP. These measures are referred to as "Non GAAP" measures and include: NonGAAP operating income; Non GAAP net income; Non GAAP diluted earnings per ADS;effective tax rate on Non GAAP income before income taxes and earnings/(losses)of equity method investees ("effective tax rate on Non GAAP income"); Non GAAPcost of product sales; Non GAAP research and development; Non GAAP selling,general and administrative; Non GAAP other income/expense; Non GAAP cashgeneration; Non GAAP free cash flow and Non GAAP net cash/(debt). These NonGAAP measures exclude the effect of certain cash and non-cash items, thatShire's management believes are not related to the core performance of Shire'sbusiness.

These Non GAAP financial measures are used by Shire's management to makeoperating decisions because they facilitate internal comparisons of Shire'sperformance to historical results and to competitors' results. Shire'sRemuneration Committee uses certain key Non GAAP measures when assessing theperformance and compensation of employees, including Shire's executivedirectors.

The Non GAAP measures are presented in this press release as Shire's managementbelieve that they will provide investors with a means of evaluating, and anunderstanding of how Shire's management evaluates, Shire's performance andresults on a comparable basis that is not otherwise apparent on a US GAAPbasis, since many non-recurring, infrequent or non-cash items that Shire'smanagement believe are not indicative of the core performance of the businessmay not be excluded when preparing financial measures under US GAAP.

These Non GAAP measures should not be considered in isolation from, assubstitutes for, or superior to financial measures prepared in accordance withUS GAAP.

Where applicable the following items, including their tax effect, have beenexcluded when calculating Non GAAP earnings for both 2013 and 2012, and fromour Outlook:

Amortization and asset impairments:

Intangible asset amortization and impairment charges; and

Other than temporary impairment of investments.

Acquisitions and integration activities:

Up-front payments and milestones in respect of in-licensed and acquiredproducts;

Costs associated with acquisitions, including transaction costs, fair valueadjustments on contingent consideration and acquired inventory;

Costs associated with the integration of companies; and

Noncontrolling interests in consolidated variable interest entities.

Divestments, re-organizations and discontinued operations:

Gains and losses on the sale of non-core assets;

Costs associated with restructuring and re-organization activities;

Termination costs; and

Income/(losses) from discontinued operations.

Legal and litigation costs:

Net legal costs related to the settlement of litigation, governmentinvestigations and other disputes (excluding internal legal team costs).

Depreciation, which is included in Cost of product sales, R&D and SG&A costs inour US GAAP results, has been separately disclosed for the presentation of 2013and 2012 Non GAAP earnings.

Cash generation represents net cash provided by operating activities, excludingup-front and milestone payments for in-licensed and acquired products, tax andinterest payments.

Free cash flow represents net cash provided by operating activities, excludingup-front and milestone payments for in-licensed and acquired products, butincluding capital expenditure in the ordinary course of business.

A reconciliation of Non GAAP financial measures to the most directly comparablemeasure under US GAAP is presented on pages 18 to 20.

Growth at CER, which is a Non GAAP measure, is computed by restating 2013results using average 2012 foreign exchange rates for the relevant period.

Average exchange rates for Q1 2013 were $1.58:£1.00 and $1.33:€1.00 (2012:$1.57:£1.00 and $1.31:€1.00).

TRADE MARKS

All trade marks designated ® and ™ used in this press release are trade marksof Shire plc or companies within the Shire group except for 3TC® and ZEFFIX®which are trade marks of GlaxoSmithKline, PENTASA® which is a registered trademark of FERRING B.V., LIALDA® and MEZAVANT® which are trade marks of NograPharma Limited and DAYTRANA® which is a trade mark of Noven PharmaceuticalsInc. Certain trade marks of Shire plc or companies within the Shire group areset out in Shire's Annual Report on Form 10-K for the year ended December 31,2012.