Shire Executes Agreement to Divest DERMAGRAFT(R)

Shire Executes Agreement to Divest DERMAGRAFT® DUBLIN, Ireland, January 17, 2014 - Shire plc (LSE: SHP, NASDAQ: SHPG), theglobal specialty biopharmaceutical company, today announced that it has enteredinto a definitive agreement pursuant to which it has sold its DERMAGRAFT assetsto Organogenesis Inc. DERMAGRAFT is a living skin substitute indicated for usein the treatment of full-thickness diabetic foot ulcers and is approved for usein the US and Canada. Going forward Organogenesis will assume all financial andmanagement responsibility for DERMAGRAFT. Flemming Ornskov MD, Chief Executive Officer of Shire commented: "Following thenew strategy we outlined during the first half of last year, Shire has had arenewed focus on operational discipline. As such, we have been prioritizinginvestments that are of the greatest strategic, clinical and commercial valueto our Company. DERMAGRAFT no longer meets these criteria and this divestmentwill allow us to focus our resources on other projects. Due to the recentMedicare ruling regarding reimbursement for DERMAGRAFT, the businessenvironment has changed, and the prospects for the product have reducedsignificantly. We believe the best path forward for the patients who benefitfrom DERMAGRAFT is to transfer it to new ownership in order to providecontinued care and availability of their treatment." Transaction Details The DERMAGRAFT assets that have been sold to Organogenesis comprise the keyoperating assets relating to the development, manufacture and sale of theDERMAGRAFT product. These assets include intellectual property relating toDERMAGRAFT including patents, trademarks and know-how; regulatory filings andregistrations relating to DERMAGRAFT; certain manufacturing plant, equipmentand materials; DERMAGRAFT product inventory and accounts receivable. Theseassets had a value of $683 million in Shire's September 30, 2013 balance sheet.Shire is generally retaining legacy liabilities relating to the DERMAGRAFTbusiness, including the previously announced Department of Justiceinvestigation relating to the sales and marketing practices of AdvancedBiohealing, Inc (now known as Shire Regenerative Medicine, Inc.). Shire will receive no upfront payment from Organogenesis but is entitled toreceive up to $300 million cash in total milestone payments shouldOrganogenesis meet certain annual net sales targets between now and 2018(1).Shire will record a loss on disposal and associated impairment charges ofapproximately $650 million in the fourth quarter of 2013, which will beexcluded from Non GAAP earnings. DERMAGRAFT operations will be reported as discontinued in Shire's fourthquarter and full year earnings for 2013. The US GAAP operating loss fromDERMAGRAFT operations in the nine months ended September 30, 2013 amounted to$324 million including the impairment of goodwill ($192 million recorded in Q12013). On a Non GAAP basis for the same period the operating loss forDermagraft operations was $81 million. In advance of its Full Year 2013 earnings release scheduled for February 13,2014 Shire will issue a further press release providing historical quarterlyanalysis for 2012 and 2013 restated to show the DERMAGRAFT operations asdiscontinued. Lazard and Davis Polk & Wardwell LLP acted as advisors to Shire. Reference: (1) The annual net sales targets range from as low as $70 million in calendaryears 2014 and 2015 to as high as $250 million. For the purposes of determiningthe reported loss on disposal, the fair value of these contingent payments isestimated at approximately $30 million. For further information please contact: Investor Relations Eric Rojas [email protected] +1 781 482 0999 Sarah Elton-Farr [email protected] +44 1256 894157 Media Jessica Mann [email protected] +44 1256 894 280 Gwen Fisher [email protected] +1 484 595 9836 NOTES TO EDITORS 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. www.shire.com About DermagraftDERMAGRAFT is a cryopreserved human-fibroblast -derived dermal substitute; itis composed of fibroblasts, extracellular matrix, and a bioabsorbable scaffold.DERMAGRAFT is indicated for use in the treatment of full-thickness diabeticfoot ulcers greater than six weeks duration, which extend through the dermis,but without tendon, muscle, joint capsule, or bone exposure. DERMAGRAFT shouldbe used in conjunction with standard wound care regimens and in patients thathave adequate blood supply to the involved foot. DERMAGRAFT is contraindicatedfor use in ulcers that have signs of clinical infection or in ulcers with sinustracts. DERMAGRAFT is contraindicated in patients with known hypersensitivityto bovine products, as it may contain trace amounts of bovine proteins from themanufacturing medium and storage solution. The most frequently reported adverseevents experienced by patients in the DERMAGRAFT group of the pivotalregistration trial (terms ≥ 5%) included infection, accidental injury, skindysfunction/blister, flu syndrome, osteomyelitis, surgeries involving studyulcer, wound enlargement/skin ulcer, cellulitis and peripheral edema/localizedswelling. Refer to DERMAGRAFT Directions for Use for more information. 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 of reimbursement, by third-party payors in a timely manner for Shire's products may impact future revenues and earnings; * Shire relies on a single source for manufacture of certain of its products and a disruption to the supply chain for those products may result in Shire being unable to continue marketing or developing a product or may result in Shire being unable to do so on a commercially viable basis; * Shire uses third party manufacturers to manufacture many of its products and is reliant upon third party contractors for certain goods and services, and any inability of these third party manufacturers to manufacture products, or any failure of these third party contractors to provide these goods and services, in each case in accordance with its respective contractual obligations, could adversely affect Shire's ability to manage its manufacturing processes or to operate its business; * the development, approval and manufacturing of Shire's products is subject to extensive oversight by various regulatory agencies and 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 and fluctuations in buying or distribution patterns by such customers could 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 obtain, maintain, 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; 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. Registered in Jersey, No. 99854, 22 Grenville Street, St Helier, Jersey JE4 8PX Press Release www.shire.com