Shire delivers strong revenue growth and cash generation

Shire delivers strong revenue growth and cash generation; 20% increase in NonGAAP earnings per ADS Continued advancement toward goal of becoming a leading global biotechnologycompany April 30, 2015 - Shire (LSE: SHP, NASDAQ: SHPG) announces unaudited results forthe three months to March 31, 2015. Financial Highlights Q1 2015 Growth CER(2) (1) Product sales $1,423 +9% +13% million Total revenues $1,488 +11% +15% million Non GAAP operating income $683 million +16% +19% US GAAP operating income from continuing $475 million +55%operations Non GAAP EBITDA margin (excluding royalties & 46% +1pps(4)other revenues)(3) US GAAP net income margin(5) 28% +11pps Non GAAP diluted earnings per ADS $2.84 +20% +24% US GAAP diluted earnings per ADS $2.08 +77% Non GAAP cash generation $516 million +56% Non GAAP free cash flow $542 million +135% US GAAP net cash provided by operating activities $562 million +128% (1) Percentages compare to equivalent 2014 period. (2) On a Constant Exchange Rate ("CER") basis, which is a Non GAAP measure. (3)Non GAAP earnings before interest, tax, depreciation and amortization("EBITDA") as a percentage of product sales, excluding royalties and otherrevenues. (4)Percentage point change ("PPS"). (5)US GAAP net income as a percentage of total revenues. The Non GAAP financial measures included within this release are explained onpage 25, and are reconciled to the most directly comparable financial measuresprepared in accordance with US GAAP on pages 19 - 22. Highlights: * Strong product sales growth of 9% (13% on a CER basis) to $1.4 billion, driven by performance of VYVANSE®, CINRYZE®, FIRAZYR® and LIALDA®/MEZAVANT®. * Non GAAP earnings per ADS up 20% (up 24% on a CER basis). * Acquisition of NPS Pharmaceuticals, Inc. ("NPS") completed and integration progressing according to plan. * Commercial portfolio strengthened through the addition of GATTEX®/REVESTIVE ® and NATPARA® from NPS and the launch of VYVANSE for Binge Eating Disorder in adults. * Pipeline progressed, with the most significant developments being Priority Review for lifitegrast and agreement with the FDA on the regulatory path for SHP465. Shire now has its broadest and deepest pipeline in its history. Flemming Ornskov, M.D., Shire's Chief Executive Officer, commented: During the first quarter, Shire continued to exemplify the characteristics of aleading biotechnology company, delivering strong revenue growth and cashgeneration, while materially advancing our innovative pipeline and boosting ourfuture growth profile through the acquisition of NPS. Our continued financialperformance driven by the strength of our commercial operations, focus onefficiency, and breadth of our innovative pipeline are indicators of our brightfuture. We remain confident in delivering Non GAAP diluted earnings per ADSgrowth in the mid-single digits in 2015 (high single digit growth on a CERbasis). FINANCIAL SUMMARY First Quarter 2015 Unaudited Results Q1 2015 Q1 2014 US Adjustments Non US Adjustments Non GAAP GAAP GAAP GAAP $M $M $M $M $M $M Total 1,488 - 1,488 1,347 - 1,347revenues Operating 475 208 683 307 284 591income Diluted $2.08 $0.76 $2.84 $1.17 $1.19 $2.36earningsper ADS * Product sales in Q1 2015 were up 9% (up 13% on a CER basis) to $1,423 million (Q1 2014: $1,308 million) even after the effect of significantly lower INTUNIV® sales (down 79% to $17 million) following the introduction of generic competition in December 2014. Excluding INTUNIV®, product sales were up 15%. This growth was primarily driven by VYVANSE() (up 19% to $417 million), CINRYZE() (up 73% on a reported basis to $148 million), LIALDA/MEZAVANT (up 15% to $148 million) and FIRAZYR (up 23% to $92 million). As expected, product sales growth in Q1 2015 was held back 4 percentage points by foreign exchange headwinds from the strengthening US dollar, primarily affecting sales of ELAPRASE®, REPLAGAL® and VPRIV®. * Total revenues were up 11% to $1,488 million (Q1 2014: $1,347 million), as Q1 2015 benefited from higher royalties and other revenues, principally INTUNIV royalties and the inclusion of SENSIPAR® royalties acquired with NPS. * On a Non GAAP basis: Operating income grew strongly in Q1 2015, up 16% to $683 million (Q1 2014: $591 million) as combined R&D and SG&A costs increased at a lower rate (up 6%) than total revenues (up 11%). R&D costs decreased by 2% compared to Q1 2014. SG&A costs increased by 10%, primarily due to increased sales and marketing ("S&M") spend in relation to new product launches and the first time inclusion of NPS costs. Non GAAP EBITDA margin (excluding royalties and other revenues) was 46%, up 1 percentage point compared to Q1 2014 (Q1 2014: 45%). On a US GAAP basis (from continuing operations): Operating income was up 55% to $475 million (Q1 2014: $307 million), with growth benefiting from comparison against Q1 2014 which included an IPR&D intangible asset impairment charge of $166 million (Q1 2015: $nil). * Non GAAP diluted earnings per American Depository Share ("ADS") increased 20% to $2.84 (2014: $2.36) primarily due to the higher Non GAAP operating income and a lower effective tax rate on Non GAAP income. On a US GAAP basis diluted earnings per ADS increased 77% to $2.08 (Q1 2014: $1.17) primarily due to higher US GAAP operating income and a lower effective tax rate on US GAAP income. * Cash generation, a Non GAAP measure, was 56% higher at $516 million (Q1 2014: $331 million), due to strong cash receipts from higher sales and the benefit in Q1 2015 from the timing of rebate payments. Free cash flow, also a Non GAAP measure, was up 135% to $542 million (2014: $231 million), due to higher cash generation and the benefit of a net cash tax repayment in Q1 2015, due to the recovery of an over-payment of tax and favourable timing of cash tax payments for 2015. On a US GAAP basis, net cash provided by operating activities was up 128% to $562 million (2014: $246 million). * Net debt (a Non GAAP measure) at March 31, 2015 was $2,588 million (December 31, 2014: Net cash of $2,119 million) reflecting the use of cash and cash equivalents and borrowings incurred to fund the acquisition of NPS. On a US GAAP basis, cash and cash equivalents were $74 million at March 31, 2015 (December 31, 2014: $2,982 million). OUTLOOK We've made a strong start to 2015, and remain confident in delivering Non GAAPdiluted earnings per ADS growth in the mid-single digits in 2015. On a Constant Exchange Rate basis we continue to expect product sales growth inthe mid-to-high single digits. When excluding INTUNIV, we anticipate low doubledigit product sales growth on a CER basis. Based on current exchange rates we anticipate low-to-mid single digit productsales growth in 2015, as we expect growth to be held back three to fourpercentage points by foreign exchange headwinds which particularly impactELAPRASE, REPLAGAL and VPRIV sales. We expect to see a lower rate of productsales growth through the remainder of 2015 than we've delivered in the firstquarter, principally due to stronger comparatives. Royalties and other revenues are expected to increase by 30-40% in 2015, as weinclude NPS's royalty streams for the first time. Our Non GAAP gross margin is expected to be in line with 2014 (2014: 85.8%). We continue to expect combined Non GAAP R&D and SG&A to increase in the highsingle digits. We anticipate higher operating costs in the remaining quartersof 2015 than incurred in the first quarter as we include NPS's operating costsfor the balance of the year, invest behind our pipeline and increase ourcommercial spending, particularly on VYVANSE for BED and in preparation for theanticipated launch of lifitegrast. We expect our Non GAAP net interest and other expense to be in line with 2014levels. For 2015, we expect our effective tax rate on Non GAAP income to be in therange of 15-17%, before reverting to the 17-19% range in 2016 and beyond. Taken together, we reiterate our guidance for the full year 2015, and remainconfident in delivering Non GAAP diluted earnings per ADS growth in themid-single digits in 2015 (high single digit growth on a CER basis). FIRST QUARTER 2015 AND RECENT PRODUCT AND PIPELINE DEVELOPMENTS Products We have made good progress with our product portfolio in the quarter, launchingVYVANSE in an important new indication, approval of NATPARA was achieved and weextended the range of doses available for VYVANSE. VYVANSE - for the treatment of moderate to severe Binge Eating Disorder ("BED")in adults * On January 30, 2015 Shire launched VYVANSE for the treatment of adults with moderate to severe BED. NATPARA - for the treatment of hypoparathyroidism * On January 23, 2015 it was announced that the U.S. Food and Drug Administration ("FDA") had approved NATPARA as an adjunct to calcium and vitamin D to control hypocalcemia in patients with hypoparathyroidism. Hypoparathyroidism is a rare endocrine disorder characterized by insufficient levels of parathyroid hormone, or PTH. NATPARA is a bioengineered replica of human PTH. NATPARA was launched on April 1, 2015. VYVANSE - for the treatment of ADHD * On March 23, 2015 Shire announced VYVANSE was available in a 10mg strength capsule. This new titration dose, which was approved by the FDA on October 30, 2014, is the seventh VYVANSE dosage strength available in addition to the 20mg, 30mg, 40mg, 50mg, 60mg, and 70mg capsule strengths. On April 7, 2015 Health Canada approved the 10mg dose strength for incremental titration adjustments. Pipeline We have progressed the pipeline, the most significant developments of which aregaining Priority Review for lifitegrast and gaining agreement with FDA on theregulatory path for SHP465. Shire now has its broadest and deepest pipeline inits history. SHP606 (lifitegrast) - for the treatment of the signs and symptoms of Dry EyeDisease * On April 9, 2015 Shire announced that the FDA accepted the New Drug Application for lifitegrast and granted a Priority Review designation. The FDA has set an action date of October 25, 2015, based on the Prescription Drug User Fee Act V. SHP609 - for the treatment of Hunter syndrome with CNS symptoms * On January 26, 2015 Shire announced that the FDA has granted Fast Track designation for SHP609 for the treatment of neurocognitive decline associated with Hunter syndrome (mucopolysaccharidosis II). SHP465 - for the treatment of adults with ADHD * On April 7, 2015 Shire announced that it had reached an agreement with the FDA on a clear regulatory path for SHP465 (triple-bead mixed amphetamine salts), an investigational oral stimulant medication being evaluated as a potential treatment for ADHD in adults. SHP611 - for the treatment of the late infantile form of MLD * SHP611 is in development as recombinant human arylsulfatase A (rASA) delivered intrathecally every other week for the treatment of the late infantile form of MLD. This product has been granted orphan drug designation in the US and the EU. The Company initiated a 24 patient Phase 1/2 clinical trial in August 2012. The primary endpoint of this trial is to determine the safety of ascending doses (10mg, 30mg, and 100 mg) of rASA over 40 weeks. Secondary and exploratory endpoints focused on efficacy and include decline in motor function as defined by change in baseline Gross Motor Function Measure (GMFM-88). Based upon interim data for the first 18 patients, SHP611 was safe and well tolerated at all doses. In addition, while not statistically significant and despite a decline in GMFM-88 score across all doses, the 100mg dose caused a slower decline over the 40 week study period compared to the other two treatment groups, most notably for those patients with GMFM-88 > 40-50 at baseline. Analysis of other exploratory efficacy measures were also encouraging. We will continue to analyze these interim results and determine an optimal path forward in this development program. SHP625 - for the treatment of cholestatic liver disease * On April 9, 2015 Shire announced that the small 13-week Phase 2 IMAGO trial of its investigational compound SHP625 did not meet the primary or secondary endpoints in the study of 20 pediatric patients with Alagille syndrome. Given the topline results from the IMAGO study of SHP625 in pediatric patients with Alagille syndrome, we plan to analyze the totality of data to better understand the results we have seen. Data for this and other indications will be important to fully understand the safety and efficacy of SHP625 in patients with cholestatic liver disease. OTHER DEVELOPMENTS NPS acquisition * On February 21, 2015 Shire completed the acquisition of NPS. Shire plans to accelerate the growth of NPS's innovative portfolio through its market expertise in gastrointestinal ("GI") disorders, core capabilities in rare disease patient management, and global footprint. The integration is progressing according to plan. Meritage acquisition * On February 24, 2015 Shire announced that it had acquired Meritage Pharma, Inc., a privately-held company, for an upfront payment of $75 million and additional contingent payments based on the achievement of development and regulatory milestones. With the acquisition, Shire has acquired the global rights to Meritage's Phase 3-ready compound, Oral Budesonide Suspension (SHP621), for the treatment of adolescents and adults with eosinophilic esophagitis, a rare, chronic inflammatory GI disease. This acquisition further enhances Shire's late-stage pipeline and leverages the Company's rare disease and GI commercial infrastructure and expertise. BOARD AND COMMITTEE CHANGES Jeff Poulton has been appointed Chief Financial Officer ("CFO") and member ofthe Executive Committee. Jeff will additionally join the Shire Board ofDirectors. Both appointments are effective immediately. Jeff has served as Interim CFO since December 2014, while overseeing InvestorRelations. An experienced pharmaceuticals and biotechnology executive, Jeff hasextensive experience across financial, commercial and strategic leadershiproles. He joined Shire in 2003. (See separate press release for more detail). ADDITIONAL INFORMATION The following additional information is included in this press release: Page Overview of First Quarter 2015 Financial Results 7 Financial Information 11 Non GAAP Reconciliation 19 Notes to Editors 23 Forward-Looking Statements 24 Non GAAP Measures 25 Trade Marks 26 For further information please contact: Investor Relations - Sarah Elton-Farr [email protected] +44 1256 894 157 Media - Michele Galen [email protected] +1 781 482 1867 - Brooke Clarke [email protected] +44 1256 894 829 Dial in details for the live conference call for investors at 14:00 BST / 09:00EDT on April 30, 2015: UK dial in: 0808 237 0030 or 0203 139 4830 US dial in: 1 866 928 7517 or 1 718 873 9077 International Access Numbers: Click here Password/Conf ID: 54094197# Live Webcast: Click here The quarterly earnings presentation will be available today at 13:00 BST / 08:00 EDT on: - Shire.com Investors section - Shire's IR Briefcase in the iTunes Store OVERVIEW OF FIRST QUARTER 2015 FINANCIAL RESULTS 1. Product sales For the three months to March 31, 2015 product sales increased by 9% to $1,423million (Q1 2014: $1,308 million) and represented 96% of total revenues (Q12014: 97%). Year on year growth US ExitProduct Sales $M Sales Non GAAP US Rx Marketsales CER(1) (2) Share(2) VYVANSE 416.8 +19% +20% +6% 17% LIALDA/ 148.5 +15% +17% +12% 34%MEZAVANT CINRYZE 148.1 +73% +74% n/a n/a (3) (3) ELAPRASE 125.0 -3% +7% n/a n/a (3) (3) REPLAGAL 97.5 -15% -3% n/a n/a (4) (4) ADDERALL XR 95.7 +12% +14% +15% 5%® FIRAZYR 92.5 +23% +26% n/a n/a (3) (3) VPRIV 86.4 -1% +6% n/a n/a (3) (3) PENTASA® 78.7 +9% +9% -7% 13% INTUNIV 17.4 -79% -78% -64% 1% GATTEX/ 14.9 n/a n/a n/a n/aREVESTIVE® (3) (3) OTHER 101.7 +4% +14% n/a n/a Total 1,423.2 +9% +13% 1. On a Constant Exchange Rate ("CER") basis, which is a Non GAAP measure. 2. Data provided by IMS Health National Prescription Audit ("IMS NPA"). Exit market share represents the average US market share in the month ended March 31, 2015. 3. IMS NPA Data not available. 4. Not sold in the US in Q1 2015. VYVANSE - ADHD and BED VYVANSE product sales grew strongly (up 19%) in Q1 2015 compared to Q1 2014 dueto the benefit of a price increase taken since Q1 2014 and higher prescriptiondemand. To a lesser extent product sales growth in Q1 2015 benefited from lowerdestocking in Q1 2015 compared to Q1 2014, and growth in ex-US product sales.VYVANSE was launched in mid-February for moderate to severe BED in adults andwe have been pleased with the overall increase in VYVANSE prescriptions sincethe product became available for that indication. LIALDA/MEZAVANT - Ulcerative Colitis Product sales for LIALDA/MEZAVANT in Q1 2015 were up 15%, primarily driven byhigher prescription demand due to higher market share and to a slightly lesserextent the benefit of a price increase taken since Q1 2014. The growth waspartially offset by higher sales deductions as a percentage of product sales. CINRYZE - for the prophylactic treatment of Hereditary Angioedema ("HAE") Shire acquired CINRYZE through its acquisition of ViroPharma in Q1 2014.CINRYZE sales were $148.1 million in Q1 2015, growing 73% (28% on a pro-formabasis) on Q1 2014(1), primarily driven by more patients on therapy and a priceincrease taken since Q1 2014. (1) Sales prior to January 24, 2014 were recorded by ViroPharma, prior to theacquisition by Shire. ELAPRASE - Hunter syndrome ELAPRASE product sales in Q1 2015 were down 3% (up 7% on a CER basis) comparedto Q1 2014. Continued growth in the number of patients on therapy and a priceincrease taken since Q1 2014 were more than offset by the negative impact offoreign exchange movements, as expected. REPLAGAL - Fabry disease REPLAGAL sales were down 15% (down 3% on a CER basis) compared to Q1 2014,driven primarily by the negative impact of foreign exchange, as expected. ADDERALL XR - ADHD ADDERALL XR product sales increased (up 12%) in Q1 2015, primarily due to anincrease in prescription demand. FIRAZYR - for the treatment of acute HAE attacks FIRAZYR product sales were up 23% (up 26% on a CER basis), primarily due togrowth in patients on therapy, higher unit sales and a price increase taken inJanuary 2015. VPRIV - Gaucher disease VPRIV product sales in Q1 2015 were down 1% (up 6% on a CER basis), reflectingthe negative impact of foreign exchange, as expected, partially offset byhigher unit sales as we have seen an increase in the number of patients ontherapy. PENTASA - Ulcerative Colitis PENTASA product sales increased in Q1 2015 (up 9%) driven by price increasestaken since Q1 2014 and higher stocking, partially offset by higher salesdeductions as a percentage of product sales and decrease in prescriptiondemand. INTUNIV - ADHD INTUNIV product sales were down 79% in Q1 2015 reflecting the impact of genericcompetition from December 2014, which resulted in lower prescription demand,significantly higher sales deductions as a percentage of product sales and ahigher level of destocking. GATTEX/REVESTIVE - Short Bowel Syndrome ("SBS") Shire acquired GATTEX/REVESTIVE through its acquisition of NPS on February 21,2015, and recorded sales of $14.9 million (up 44% on a pro-forma basis(1)) forthe period subsequent to acquisition. The inclusion of GATTEX/REVESTIVEcontributed 1 percentage point to Shire's total product sales growth in thequarter. (1) Sales prior to February 21, 2015 were recorded by NPS, prior to theacquisition by Shire 2. Royalties Year on year growth Product Royalties to Royalties CER Shire $M INTUNIV 21.7 n/a n/a SENSIPAR® 10.4 n/a n/a ADDERALL XR 1.00 8.5 -6% -6% FOSRENOL® 1.00 8.4 -34% -24% 3TC® and 1.00 7.5 +0% +0%ZEFFIX® Other 1.00 6.3 +110% +113% Total 1.00 62.8 +94% +99% Royalty income increased by 94% in Q1 2015 due to the inclusion of royaltiesreceivable from Actavis on its generic sales of INTUNIV, and the first timeinclusion of royalty income receivable from Amgen for SENSIPAR following theacquisition of NPS by Shire. 3. Financial details Cost of product sales Q1 % of Q1 % of 2015 product 2014 product sales sales $M $M Cost of product sales (US GAAP) 227.8 16% 229.5 18% Unwind of inventory fair value step-up (11.2) (38.8) Costs of employee retention awards (2.7) -following AbbVie's terminated offer forShire Depreciation (11.7) (10.2) Cost of product sales (Non GAAP) 202.2 14% 180.5 14% Non GAAP cost of product sales as a percentage of product sales remainedconstant at 14%. US GAAP cost of product sales as a percentage of product sales decreased by 2percentage points in Q1 2015 due to lower charges on the unwind of the fairvalue adjustment on acquired inventories. R&D Q1 % of Q1 2014 % of 2015 product product sales sales $M $M R&D (US GAAP) 193.7 14% 360.5 28% Impairment of intangible assets - (166.0) Costs of employee retention awards (5.8) -following AbbVie's terminated offer forShire Depreciation (2.8) (5.8) R&D (Non GAAP) 185.1 13% 188.7 14% Non GAAP R&D decreased by $3.6 million, or 2% in Q1 2015. Increased investmentbehind programs acquired through Business Development activities since Q1 2014,and on existing pipeline programs, was more than offset by the effect of thecompletion of several large Phase 3 programs since Q1 2014 including new usesfor LDX. US GAAP R&D decreased by $166.8 million, or 46% as Q1 2014 included IPR&D assetimpairment charges of $166.0 million not repeated in Q1 2015. SG&A Q1 % of Q1 % of 2015 product 2014 product sales sales $M $M SG&A (US GAAP) 506.6 36% 430.3 33% Intangible asset amortization (88.3) (57.8) Legal and litigation costs (0.8) (1.7) Costs incurred in connection with AbbVie's (13.5) -terminated offer for Shire (includingemployee retention awards) Depreciation (17.8) (20.8) SG&A (Non GAAP) 386.2 27% 350.0 27% Non GAAP SG&A increased by $36.2 million, or 10%, due to increased S&M spend inrelation to the launch of VYVANSE for the treatment of moderate to severe BEDin adults, and the inclusion of SG&A costs related to NPS. US GAAP SG&A increased by $76.3 million, or 18%, as a result of higheramortization due to intangible assets acquired with NPS, and costs incurred inrespect of employee retention awards following AbbVie's terminated offer forShire. Gain on sale of product rights For the three months to March 31, 2015 Shire recorded a net gain on sale ofnon-core product rights of $5.2 million (2014: $36.4 million). The gain in Q12014 reflected a gain of $43.5 million on the sale of certain CALCICHEW trademarks to Takeda, partially offset by the re-measurement of the contingentconsideration receivable relating to the divestment of DAYTRANA. Reorganization costs For the three months to March 31, 2015 Shire recorded reorganization costs of$15.2 million (Q1 2014: $49.4 million). Costs in the first quarter of 2015primarily related to the relocation of roles from Chesterbrook to Lexington. Integration and acquisition costs For the three months to March 31, 2015 Shire recorded integration andacquisition costs of $75.7 million primarily related to the acquisition andintegration of NPS. In Q1 2014 Shire recorded integration and acquisition costs of $6.6 million.This net charge included costs of $65.8 million related to the acquisition andintegration of ViroPharma, partially offset by a net credit of $59.2 millionrelating to the change in fair values of contingent consideration liabilities. Interest expense For the three months to March 31, 2015 Shire incurred interest expense of $9.6million (Q1 2014: $7.8 million). Interest expense in Q1 2015 primarily relatedto interest and the amortization of financing fees incurred on borrowings tofund the NPS acquisition. Interest expense in Q1 2014 principally related tointerest and amortization of issue costs incurred on borrowings to fund theViroPharma acquisition. Taxation The effective rate of tax on Non GAAP income in Q1 2015 was 17% (Q1 2014: 20%),and on a US GAAP basis the effective rate of tax was 12% (Q1 2014: 17%). The effective rate of tax in Q1 2015 on Non GAAP income from continuingoperations is lower than the same period in 2014 primarily due to changes inprofit mix. The effective rate of tax in Q1 2015 on US GAAP income from continuingoperations is lower than the same period in 2014 primarily due to changes inprofit mix and the adverse impact in Q1 2014 of the re-measurement of deferredtax as a result of the ViroPharma acquisition. Discontinued operations The loss from discontinued operations for the three months to March 31, 2015was $2.5 million net of tax (Q1 2014: $22.7 million) relating to costsassociated with the divestment of the DERMAGRAFT business in 2014. FINANCIAL INFORMATION TABLE OF CONTENTS Page Unaudited US GAAP Consolidated Balance Sheets 12 Unaudited US GAAP Consolidated Statements of Income 13 Unaudited US GAAP Consolidated Statements of Cash 15Flows Selected Notes to the Unaudited US GAAP FinancialStatements (1) Earnings per share 17 (2) Analysis of revenues 18 Non GAAP reconciliation 19 Unaudited US GAAP financial position as of March 31, 2015Consolidated Balance Sheets March 31, December 31, 2015 2014 $M $M ASSETS Current assets: Cash and cash equivalents 74.3 2,982.4 Restricted cash 68.9 54.6 Accounts receivable, net 1,116.3 1,035.1 Inventories 588.7 544.8 Deferred tax asset 461.8 344.7 Prepaid expenses and other current assets 216.6 221.5 Total current assets 2,526.6 5,183.1 Non-current assets: Investments 45.7 43.7 Property, plant and equipment ("PP&E"), net 821.9 837.5 Goodwill 4,178.7 2,474.9 Other intangible assets, net 9,980.0 4,934.4 Deferred tax asset 102.7 112.1 Other non-current assets 22.7 46.4 Total assets 17,678.3 13,632.1 LIABILITIES AND EQUITY Current liabilities: Accounts payable and accrued expenses 1,991.6 1,909.4 Short term borrowings 2,570.2 850.0 Other current liabilities 303.2 262.5 Total current liabilities 4,865.0 3,021.9 Non-current liabilities: Long term borrowings 78.7 - Deferred tax liability 2,909.9 1,210.6 Other non-current liabilities 844.0 736.7 Total liabilities 8,697.6 4,969.2 Equity: Common stock of 5p par value; 1,000 million 58.9 58.7shares authorized; and 600.2 million sharesissued and outstanding (2014: 1,000 millionshares authorized; and 599.1 million sharesissued and outstanding) Additional paid-in capital 4,373.2 4,338.0 Treasury stock: 10.0 million shares (2014: 10.6 (330.1) (345.9)million) Accumulated other comprehensive loss (160.3) (31.5) Retained earnings 5,039.0 4,643.6 Total equity 8,980.7 8,662.9 Total liabilities and equity 17,678.3 13,632.1 Unaudited US GAAP results for the three months to March 31, 2015Consolidated Statements of Income 3 months to March 31, 2015 2014 $M $M Revenues: Product sales 1,423.2 1,308.1 Royalties 62.8 32.3 Other revenues 2.4 6.4 Total revenues 1,488.4 1,346.8 Costs and expenses: Cost of product sales 227.8 229.5 R&D(1) 193.7 360.5 SG&A(2) 506.6 430.3 Gain on sale of product rights (5.2) (36.4) Reorganization costs 15.2 49.4 Integration and acquisition costs 75.7 6.6 Total operating expenses 1,013.8 1,039.9 Operating income from continuing 474.6 306.9operations Interest income 2.0 0.5 Interest expense (9.6) (7.8) Other income/(expense), net 4.3 4.7 Total other expense, net (3.3) (2.6) Income from continuing operations before 471.3 304.3income taxes and equity in losses ofequity method investees Income taxes (57.4) (50.6) Equity in losses of equity method (1.0) (0.6)investees, net of taxes Income from continuing operations, net of 412.9 253.1tax Loss from discontinued operations, net of (2.5) (22.7)tax Net income 410.4 230.4 1. R&D costs include impairments of IPR&D intangible asset of $nil for the three months to March 31, 2015 (2014: $166 million). 2. SG&A costs include amortization of intangible assets relating to intellectual property rights acquired of $88.3 million for the three months to March 31, 2015 (2014: $57.8 million). Unaudited US GAAP results for the three months to March 31, 2015Consolidated Statements of Income (continued) 3 months to March 31, 2015 2014 Earnings per ordinary share - basic Earnings from continuing operations 70.1c 43.3c Loss from discontinued operations (0.4c) (3.9c) Earnings per ordinary share - basic 69.7c 39.4c Earnings per ADS - basic 209.1c 118.2c Earnings per ordinary share - diluted Earnings from continuing operations 69.7c 43.0c Loss from discontinued operations (0.4c) (3.9c) Earnings per ordinary share - diluted 69.3c 39.1c Earnings per ADS - diluted 207.9c 117.3c Weighted average number of shares: Millions Millions Basic 589.1 584.3 Diluted 592.7 588.8 Unaudited US GAAP results for the three months to March 31, 2015Consolidated Statements of Cash Flows 3 months to March 31, 2015 2014 $M $M CASH FLOWS FROM OPERATING ACTIVITIES: Net income 410.4 230.4 Adjustments to reconcile net income to netcash provided by operating activities: Depreciation and amortization 120.6 94.6 Share based compensation 15.3 26.2 Change in fair value of contingent 2.4 (59.2) consideration Unwind of inventory fair value step-up 11.2 38.8 Impairment of IPR&D intangible assets - 166.0 Impairment of PP&E - 12.1 Gain on sale of product rights (5.2) (36.4) Other, net 1.1 (0.3) Movement in deferred taxes 16.6 18.5 Equity in losses of equity method investees 1.0 0.6 Changes in operating assets andliabilities: Increase in accounts receivable (85.1) (77.3) (Decrease)/increase in sales deduction (24.6) 70.8 accrual Increase in inventory (22.0) (18.6) Decrease/(increase) in prepayments and 42.4 (74.6) other assets Increase/(decrease) in accounts payable 77.5 (145.5) and other liabilities Net cash provided by operating activities 561.6 246.1(A) CASH FLOWS FROM INVESTING ACTIVITIES: Movements in restricted cash (14.5) (10.1) Purchases of subsidiary undertakings and (5,199.7) (3,764.4)businesses, net of cash acquired Purchases of non-current investments and PP (22.3) (15.6)&E Proceeds from short-term investments 54.5 46.8 Proceeds received on sale of product rights 3.9 48.0 Proceeds from disposal of non-current 0.9 8.0investments and PP&E Other, net - (2.9) Net cash used in investing activities(B) (5,177.2) (3,690.2) Unaudited US GAAP results for the three months to March 31, 2015Consolidated Statements of Cash Flows (continued) 3 months to March 31, 2015 2014 $M $M CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from revolving line of credit, 2,230.0 2,170.0long term and short term borrowings Repayment of revolving line of credit (535.2) (650.2) Repayment of debt acquired with ViroPharma - (533.9) Proceeds from ViroPharma call options - 346.7 Contingent consideration payments (2.4) (7.8) Excess tax benefit associated with exercise 19.9 20.5of stock options Other, net (3.2) 0.2 Net cash provided by financing activities 1,709.1 1,345.5(C) Effect of foreign exchange rate changes on (1.6) (1.7)cash and cash equivalents(D) Net decrease in cash and cash equivalents (2,908.1) (2,100.3)(A) +(B) +(C) +(D) Cash and cash equivalents at beginning of 2,982.4 2,239.4period Cash and cash equivalents at end of period 74.3 139.1 Unaudited US GAAP results for the three months to March 31, 2015 Selected Notes to the Financial Statements (1) Earnings Per Share ("EPS") 3 months to March 31, 2015 2014 $M $M Income from continuing operations 412.9 253.1 Loss from discontinued operation (2.5) (22.7) Numerator for basic and diluted EPS 410.4 230.4 Weighted average number of shares: Millions Millions Basic(1) 589.1 584.3 Effect of dilutive shares: Share based awards to employees(2) 3.6 4.5 Diluted 592.7 588.8 1. Excludes shares purchased by the EBT and under the share buy-back program and presented by Shire as treasury stock. 2. Calculated using the treasury stock method. The share equivalents not included in the calculation of the diluted weightedaverage number of shares are shown below: 3 months to March 31, 2015 2014 No. of No. of shares shares Millions Millions Share based awards to employees(1) 1.4 0.8 1. Certain stock options have been excluded from the calculation of diluted EPS because (a) their exercise prices exceeded Shire's average share price during the calculation period or (b) the required performance conditions were not satisfied as at the balance sheet date. Unaudited US GAAP results for the three months to March 31, 2015 Selected Notes to the Financial Statements (2) Analysis of revenues 3 months to March 31, 2015 2014 2015 2015 % % of total $M $M change revenue Net product sales: VYVANSE 416.8 351.2 19% 28% LIALDA/MEZAVANT 148.5 128.9 15% 10% CINRYZE 148.1 85.6 73% 10% ELAPRASE 125.0 128.6 -3% 8% REPLAGAL 97.5 114.3 -15% 7% ADDERALL XR 95.7 85.1 12% 6% FIRAZYR 92.5 74.9 23% 6% VPRIV 86.4 86.9 -1% 6% PENTASA 78.7 72.3 9% 5% FOSRENOL 44.1 41.4 7% 3% XAGRID 25.3 27.1 -7% 2% INTUNIV 17.4 82.3 -79% 1% GATTEX/REVESTIVE 14.9 - n/a 1% Other product sales 32.3 29.5 9% 2% Total product sales 1,423.2 1,308.1 9% 96% Royalties: INTUNIV 21.7 - n/a 1% SENSIPAR 10.4 - n/a

Registered in Jersey, No. 99854, 22 Grenville Street, St Helier, Jersey JE4 8PX