Q3 2015 results
`
`Progressing our transformation
`to a leading global biotech
`
`October 23, 2015
`
`Flemming Ornskov, MD
`CEO
`Jeff Poulton
`CFO
`
`Page 1
`
`

`
`“SAFE HARBOR” statement under the Private
`Securities Litigation Reform Act of 1995
`
`•
`
`•
`
`•
`
`Statements included herein that are not historical facts, including without limitation statements concerning our 10x20 ambitions and targets, are forward-
`looking statements. Such forward-looking statements involve a number of risks and uncertainties and are subject to change at any time. In the event such
`risks or uncertainties materialize, Shire’s results could be materially adversely affected. The risks and uncertainties include, but are not limited to, that:
`•
`Shire’s products may not be a commercial success;
`•
`product sales from ADDERALL XR and INTUNIV are subject to generic competition;
`•
`the failure to obtain and maintain reimbursement, or an adequate level of reimbursement, by third-party payers in a timely manner for Shire's products
`may affect future revenues, financial condition and results of operations;
`Shire conducts its own manufacturing operations for certain of its products and is reliant on third party contract manufacturers 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 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 manufacture of Shire’s products is subject to extensive oversight by various regulatory agencies. Regulatory approvals or interventions associated
`with changes to manufacturing sites, ingredients or manufacturing processes could lead to significant delays, an increase in operating costs, lost
`product sales, an interruption of research activities or the delay of new product launches;
`Shire has a portfolio of products in various stages of research and development. The successful development of these products is highly uncertain and
`requires significant expenditures and time, and there is no guarantee that these products will receive regulatory approval;
`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 affect Shire’s revenues, financial condition 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 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 and organizations. Shire is undergoing a corporate reorganization
`and was the subject of an unsuccessful acquisition proposal and the consequent uncertainty could adversely affect 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 NPS Pharmaceuticals Inc. may adversely affect Shire’s financial
`condition and results of operations;
`Shire's strategy to acquire Baxalta may not be successful: Baxalta may refuse to cooperate with Shire; if the proposed combination is consummated,
`the businesses may not be integrated successfully, including that expected synergies and other benefits of the combination may not be realized and
`unforeseen costs may arise; and disruption caused by the proposed transaction may adversely affect Shire; and
`other risks and uncertainties detailed from time to time in Shire’s filings with the Securities and Exchange Commission, including those risks outlined in “Item
`1A: Risk Factors” in Shire’s Annual Report on Form 10-K for the year ended December 31, 2014.
`
`•
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`•
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`•
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`•
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`•
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`•
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`2
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`Page 2
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`

`
`Agenda
`
`Our progression towards becoming a
`leading global biotech
`
`Financial review
`
`Summary
`
`Q & A
`
`Flemming
`Ornskov, MD
`
`Jeff
`Poulton
`
`Flemming
`Ornskov, MD
`
`All
`
`3
`
`Page 3
`
`

`
`Our continuous transformation
`
`2013
`
`2014
`
`2015
`
`2016
`
`2017
`
`2018
`
`2019
`
`2020+
`
`Investing to create
`further long-term value
`
`2013-2015
`Becoming OneShire
`• Step-change in performance
`• Effective and efficient organization
`• Set basis for long-term growth
`
`2014-2020+
`Building a leading global
`biotech company
`• Creating scale and momentum
`• Culture of bold innovation –
`internal and external
`• Patient-centric Rare Diseases
`mindset to all business
`On track to meet 10x20 targets
`
`4
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`Page 4
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`

`
`Q3 2015: Progress towards becoming a leading
`global biotechnology company
`
`GROWTH
`
`INNOVATION
`
`Double digit CER(1) product sales
`growth excluding INTUNIV
`Non GAAP diluted earnings per ADS
`growth guidance reiterated at mid-to-
`high single digit percent range for the
`full year
`Continued investment and
`progress in expected future growth
`drivers, including VYVANSE BED,
`GATTEX/REVESTIVE, NATPARA
`and lifitegrast
`Strong performance driven by
`VYVANSE, CINRYZE, and FIRAZYR
`GATTEX and NATPARA continue to
`benefit from Shire’s Rare Disease
`expertise
`
`European approval for INTUNIV
`Phase 3 OPUS3 study for lifitegrast
`in symptoms of dry eye disease
`completed: topline results expected
`Q4 2015 and, if positive, to form the
`basis of Shire’s response to the CRL
`Phase 3 pediatrics study for SHP465
`enrolling ahead of schedule
`Multiple Phase 3 trials expected to
`start in late Q4 2015/early-to-mid
`2016, including SHP620 for
`cytomegalovirus (“CMV”) infection
`in transplant patients, SHP621 for
`Eosinophilic Esophagitis (“EoE”),
`and CINRYZE in AMR
`Acquired Foresight Biotherapeutics,
`bringing global rights to FST-100
`(now referred to as SHP640), a late
`stage asset for the treatment of
`infectious conjunctivitis
`
`(1) Growth at Constant exchange rates (“CER”), a Non GAAP financial measure. CER performance is determined by comparing 2015 performance (restated using
`2014 exchange rates) to actual 2014 reported performance. See slide 33 for a list of items excluded from the US GAAP equivalent used to calculate all Non
`GAAP measures detailed above. A reconciliation of Non GAAP financial measures to the most directly comparable measure under US GAAP is presented in
`Shire's Q3 2015 earnings release on pages 22 to 28.
`
`5
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`Page 5
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`

`
`Delivering double digit core product sales(1)
`growth while investing for the future
`Product Sales
`
`GROWTH
`
`-$79m
`
`-6%
`
`+$175m
`
`+12%
`
`-$71m
`-4%
`
`$1,552m
`
`$1,577m
`
`• Core product sales excluding
`INTUNIV growing 12% on a
`constant exchange rate basis(2)(4)
`• Continued investment and progress
`in expected future growth drivers,
`including VYVANSE BED,
`GATTEX/REVESTIVE, NATPARA
`and lifitegrast
`• Q3 Non GAAP diluted earnings per
`ADS(3)(4) up 11% on a reported
`basis; 15% on a CER basis(2)(4)
`
`Q3 2014
`
`Core
`products
`
`INTUNIV
`
`FX
`
`Q3 2015
`
`Non GAAP diluted earnings per ADS growth guidance reiterated
`
`(1) Results include NPS Pharmaceuticals Inc. in 2015 (acquired on February 21, 2015).Core product sales exclude INTUNIV and are stated at CER.
`(2) Growth in constant exchange rate (“CER”). This is a Non GAAP financial measure. CER performance is determined by comparing 2015 performance (restated using average 2014 foreign exchange rates for the relevant
`period) to actual 2014 reported performance.
`(3) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is EPS-ADS (Q3 2015: $2.29, Q3 2014: $2.43).
`(4) See slide 33 for a list of items excluded from the US GAAP equivalent used to calculate all Non GAAP measures detailed above. A reconciliation of Non GAAP financial measures to the most directly comparable measure
`under US GAAP is presented in Shire's Q3 2015 earnings release on pages 22 to 28.
`
`6
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`Page 6
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`

`
`Q3 growth highlights
`
`GROWTH
`
`VYVANSE sales $427M; +22%(1)
`• VYVANSE performing strongly in the adult market, both in ADHD and in the new BED indication
`• US growth driven by volume gains (TRx up 9% YoY), price, and favourable stocking patterns
`•
`International growth continues to benefit from gains in established markets
`• VYVANSE patents held to be valid and infringed on appeal; patents expire in 2023
`
`CINRYZE sales $187M; +30%(1)
`• Sales growth driven primarily by an increase in patients on therapy, combined with a modest
`price increase
`• Sales also benefitted from a re-stock in Q3 2015 after a destock in Q2 2015
`• Strengthened our manufacturing position through renegotiation of agreement with Sanquin;
`Shire now in a position to seek a second source of supply
`
`FIRAZYR sales $123M; +28%(1)
`• Continued double digit growth primarily driven by new patient additions
`• Sales also benefitted from price increases taken since Q3 2014
`
`GATTEX sales $43M; +54%(2)
`• Strong performance in US since acquisition of NPS; over 550 patients on therapy in US
`•
`International roll out on track; favourable reimbursement obtained in France and Germany
`and encouraging early reception from patients and physicians
`
`NATPARA sales $7M
`• Strong US launch
`• ~ 2000 HCPs REMS trained; ~ 400 patients on therapy
`
`(1) Growth rates are at Constant exchange rates (“CER”), a Non GAAP financial measure. CER performance is determined by comparing 2015 performance
`(restated using 2014 exchange rates for the relevant period) to actual 2014 reported performance. See slide 33 for a list of items excluded from the US GAAP
`equivalent used to calculate all Non GAAP measures detailed above. A reconciliation of Non GAAP financial measures to the most directly comparable measure
`
`under US GAAP is presented in Shire's Q3 2015 earnings release on pages 22 to 28.
`(2) GATTEX refers to pro-forma growth including product sales recorded by NPS prior to acquisition by Shire on a CER basis.
`
`7
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`Page 7
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`

`
`Strong and innovative
`pipeline
`
`Our purpose
`We enable people with life-altering conditions to lead better lives.
`
`Page 8
`
`

`
`Late stage pipeline poised to deliver
`
`INNOVATION
`
`Preclinical
`
`27 Research
` Programs
`
`TH / GCH1
`GenePod
` Parkinson’s Subset
`
`SHP608
`Dystrophic E.Bullosa
`
`SHP623
`(rC1-INH)
`HAE prophylaxis
`
`SHP630
`adRP
`
`SHP636
`MRT for CF
`
`SHP637
`MRT for UCD
`
`SHP639
`Glaucoma
`
`Phase 1
`
`SHP611
`MLD
`(Ph 1/2)
`
`SHP616*
`(CINRYZE SC)
`HAE Prophylaxis
`
`SHP616 (CINRYZE)
` Acute Neuromyelitis
`Optica
`
`SHP622
`Friedreich’s Ataxia
`
`SHP627
`Focal Segmental
`Glomerulosclerosis
`
`SHP631
`Hunter Syndrome
`
`SHP626
`Non-Alcoholic
`Steatohepatitis
`
`SHP609
`Hunter IT
`(Ph 2/3)
`
`SHP610
`Sanfilippo A
`
`
`SHP616 (CINRYZE)*
`Acute Antibody
`Mediated Rejection
`
`SHP620 (maribavir)*
`CMV in transplant
`patients
`SHP621 (Former
`Meritage OBS)*
`Eosinophilic esophagitis
`
`Phase 2
`
`Phase 3
`
`Registration
`
`SHP607
`Prevention of ROP
`
`SHP625
`Primary Biliary Cirrhosis
`
`SHP625
`Progressive Familial
`Intrahepatic Cholestasis
`
`SHP625
`Alagille Syndrome
`
`SHP625
`Primary Sclerosing
`Cholangitis
`
`FIRAZYR
` (Japan)
`HAE
`SHP616 (CINRYZE)
`(Japan)
`HAE prophylaxis
`
`INTUNIV (Japan)
`ADHD
`
`SHP465
`ADHD
`
`NATPAR (EU)
`Hypoparathyroidism
`
`SHP606
`(lifitegrast)
`Dry eye disease
`INTUNIV (EU)
`ADHD
`Approved Sep 21, 2015
`
`SHP640 (FST-100)*
`Infectious Conjunctivitis
`
`SHP555 (US)
` Chronic Constipation
`
`LDX (Japan)
`ADHD
`
`Rare Diseases Programs
`Programs are Phase 3 ready
`
`Changes since Q2 2015
`*
`•
`INTUNIV (EU) approved September 21, 2015
`• Addition of SHP623, SHP636, SHP637 and SHP639 in Preclinical, and SHP640 (FST-100) in Phase 2
`(Phase 3 ready from the acquisition of Foresight Biotherapeutics Inc.)
`• SHP624 reverted to Sangamo
`• Firazyr ACE inhibitor induced AE and SHP628 discontinued
`• Totality of SHP625 data being assessed; programs under review
`
`9
`
`Page 9
`
`

`
`Lifitegrast: next steps for potential first agent to
`treat signs and symptoms of Dry Eye Disease (DED)
`INNOVATION INNOVATION
`
`• FDA issued a CRL requesting an additional clinical study on October 16, 2015
`• Shire has recently completed a Phase 3 study of lifitegrast, OPUS-3. Top line results
`are expected before year-end, and, and if positive, Shire plans to submit these data
`as part of a resubmission to the FDA during the first quarter of 2016
`In its review of product quality the FDA also requested more information on
`lifitegrast, which Shire will address in its CRL response
`
`•
`
`2014
`
`2015
`
`2015
`
`2016
`
`Shire requests
`signs AND
`symptoms for
`treatment of DED at
`pre-NDA meeting
`(May 2014)
`
`Shire Initiates
`Phase 3 OPUS-3
`trial for
`symptoms of
`DED (Oct 2014)
`
`Shire submits NDA
`for lifitegrast for
`treatment of signs
`and symptoms of
`DED (March 2)
`
`Lifitegrast CRL
`received
`(October 16)
`
`Planned
`resubmission
`to the FDA
`(Q1 2016)
`
`Expected
`revised PDUFA
`date
`(Q3 2016)
`
`FDA grants
`priority review
`(April 9)
`
`Planned top-line
`release of OPUS-3
`Phase 3 data for
`symptoms of DED
`(Q4 2015)
`
`10
`
`Page 10
`
`

`
`SHP640 (FST-100): potential to become first
`agent to treat viral and bacterial conjunctivitis
`
`INNOVATION
`
`Significant unmet
`patient need
`
`• No approved therapy for the treatment of both viral and bacterial conjunctivitis
`• There are 5.9 million cases of infectious conjunctivitis annually in the United States
`and approximately 5.4 million cases in the EU annually.
`• If approved by regulatory agencies, SHP640 has the potential to become the first
`agent to treat both viral and bacterial conjunctivitis.
`•
`Important as it is frequently difficult to ascertain the etiology of the condition based
`on clinical presentation.
`
`Shire to conduct
`Phase 3 studies
`
`• Two phase 2 studies completed in adenoviral conjunctivitis
`• Path forward for Phase 3 development in adenoviral conjunctivitis discussed with FDA
`• Foresight has conducted preclinical studies that support investigation in bacterial
`conjunctivitis
`• Shire to design and conduct Phase 3 development, to include investigation for the
`treatment of bacterial conjunctivitis
`
`Building an
`innovative portfolio
`in Ophthalmology
`
`• Strategic fit with lifitegrast
`• Solidifies Shire’s commitment to building an innovative portfolio in ophthalmology
`• An exciting addition to Shire’s ophthalmics pipeline of investigational products in dry
`eye, retinopathy of prematurity, autosomal dominant retinitis pigmentosa and glaucoma
`
`11
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`Page 11
`
`

`
`Q3 2015 other pipeline updates
`
`INNOVATION
`
`INTUNIV EU
`approval
`
`• EC granted marketing authorisation for INTUNIV for the treatment of ADHD in children
`and adolescents (aged 6-17 years) for whom stimulants are not suitable, not tolerated
`or have been shown to be ineffective
`• Launches planned for 2016
`
`Multiple Phase 3 studies expected to start in late Q4 2015/early to mid 2016
`
`SHP616
`
`SHP620
`
`SHP621
`
`• FDA granted Fast Track designation to CINRYZE (SHP616) in the treatment of AMR in
`patients receiving kidney transplants
`• Phase 3 studies to start October 2015
`• CINRYZE subcutaneous (SC) IND submitted, potential for Phase 2/3 study to start in
`Q4 2015
`
`• SHP620 for cytomegalovirus (“CMV”) infection in transplant patients to start a Phase 3
`study in 1H 2016
`
`• SHP621 (oral budesonide suspension) for use in the treatment of eosinophilic
`esophagitis to move into Phase 3 studies by early 2016
`• Studies to commence by early 2016 to include a 12 week induction study with a
`36 week treatment extension study
`
`12
`
`Page 12
`
`

`
`Financial review
`
`Jeff Poulton, Chief Financial Officer
`
`Our purpose
`We enable people with life-altering conditions to lead better lives.
`
`Page 13
`
`

`
`Double digit product sales growth (excluding INTUNIV at
`CER(1)(2)(8)) and delivery of robust Non GAAP EBITDA margin (4)(5)(8)
`
`Product Sales
`
`Q3 2015
`$m(1)
`1,577
`
`Q3 2014
`$m
`1,552
`
`Reported
`Growth
`+2%
`
`CER
`Growth(2)(8)
`+6%
`
`Product Sales excluding INTUNIV
`
`1,559
`
`1,455
`
`Royalties and Other Revenues
`
`Total Revenue
`
`Non GAAP EBITDA(3)(8)
`
`Non GAAP EBITDA margin(4)(5)(8)
`
`Non GAAP diluted EPS – ADS(6)(8)
`
`Non GAAP Cash Generation(7)(8)
`
`78
`
`1,655
`
`758
`
`43%
`
`3.24
`
`588
`
`+7%
`
`+73%
`
`+4%
`
`0%
`
`+12%
`
`+80%
`
`+8%
`
`+3%
`
`45
`
`1,597
`
`760
`
`46%
`
`-3% points
`
`-3% points
`
`2.93
`
`612
`
`+11%
`
`-4%
`
`+15%
`
`(1) Results include NPS Pharmaceuticals Inc. in 2015 (acquired on February 21, 2015).
`(2) This is a Non GAAP financial measure. Constant exchange rates ("CER") performance is determined by comparing 2015 performance (restated using average 2014 foreign exchange rates for the relevant period) to actual 2014 reported performance.
`(3) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Net Income (Q3 2015: $453m, Q3 2014: $480m).
`(4) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Net Income margin (Q3 2015: 27%, Q3 2014: 30%).
`(5) Non GAAP earnings before interest, tax, depreciation and amortization (“EBITDA”) as a percentage of product sales, excluding royalties and other revenues.
`(6) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is EPS-ADS (Q3 2015: $2.29, Q3 2014: $2.43).
`(7) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Net Cash provided by operating activities (Q3 2015: $561m, Q3 2014: $593m).
`(8) See slide 33 for a list of items excluded from the US GAAP equivalent used to calculate all Non GAAP measures detailed above. A reconciliation of Non GAAP financial measures to the most directly comparable measure under US GAAP is presented
`in Shire's Q3 2015 earnings release on pages 22 to 28.
`
`14
`
`Page 14
`
`

`
`Strong product sales growth in Q3 2015, up 12%
`(excluding INTUNIV and at CER(1)(3)(4))
`
`Q3 2015(1)
`$m
`427
`187
`177
`134
`123
`111
`88
`85
`78
`43
`7
`99
`
`1,559
`
`18
`1,577
`
`Q3 2014
`$m
`355
`145
`177
`169
`98
`136
`78
`96
`95
`0
`0
`106
`
`1,455
`
`97
`1,552
`
`43
`
`28
`
`Reported
`Growth
`+20%
`+29%
`+0%
`-21%
`+25%
`-18%
`+12%
`-12%
`-18%
`n/a
`n/a
`-7%
`
`+7%
`
`-81%
`+2%
`
`+54%
`
`CER(3)(4)
`Growth
`+22%
`+30%
`+2%
`-10%
`+28%
`-6%
`+12%
`-4%
`-17%
`n/a
`n/a
`+3%
`
`+12%
`
`-81%
`+6%
`
`+56%
`
`VYVANSE
`CINRYZE
`LIALDA/MEZAVANT
`ELAPRASE
`FIRAZYR
`REPLAGAL
`PENTASA
`VPRIV
`ADDERALL XR
`GATTEX(1)
`NATPARA(1)
`Other
`Total Product Sales
`excluding INTUNIV
`INTUNIV
`Total Product Sales
`GATTEX Pro-Forma
`Product Sales(2)
`
`INTUNIV generic entry holds back
`reported product sales by $79m or 6%.
`
`CER(3)(4): Core product sales up $175m or 12%.
`
`$1,552m
`
`FX headwinds holds back reported
`product sales by $71m or 4%.
`
`$1,577m
`
`Q3 2014
`
`OTHER
`PRODUCT
`SALES
`(1) Results include NPS Pharma Inc. in 2015 (acquired on February 21, 2015).
`(2) Gattex growth on a pro-forma basis, including product sales recorded by NPS prior to acquisition by Shire.
`(3) This is a Non GAAP financial measure. Constant exchange rates ("CER") performance is determined by comparing 2015 performance (restated using average 2014 foreign exchange rates for the relevant period) to actual 2014 reported performance.
`(4) See slide 33 for a list of items excluded from the US GAAP equivalent used to calculate all Non GAAP measures detailed above. A reconciliation of Non GAAP financial measures to the most directly comparable measure under US GAAP is presented in
`Shire's Q3 2015 earnings release on pages 22 to 28.
`
`Total FX
`Impact
`
`Q3 2015
`
`15
`
`Page 15
`
`

`
`Robust YTD 2015 Non GAAP EBITDA margin(8)(9)(10) whilst
`investing for future growth
`
`Year on Year Change:
`Product Sales
`Product Sales excluding INTUNIV
`Non GAAP R&D(2)(10)
`Non GAAP SG&A(3)(10)
`Combined Non GAAP R&D and SG&A(4)(10)
`
`Ratios:
`% of Product Sales
`Non GAAP Gross Margin(5)(10)
`Non GAAP R&D(6)(10)
`Non GAAP SG&A(7)(10)
`Non GAAP EBITDA(8)(9)(10)
`
`YTD 2015(1)
`+3%
`+9%
`+8%
`+10%
`+9%
`
`YTD 2015(1)
`
`YTD 2014(1)
`
`85.4%
`15%
`28%
`43%
`
`85.6%
`14%
`27%
`45%
`
`(1) Results from continuing operations including NPS Pharmaceuticals Inc. in 2015 (acquired on February 21, 2015) and ViroPharma Inc. in 2014 (acquired on January 24, 2014) and excluding DERMAGRAFT in 2014 (treated as a discontinued operation
`following divestment on January 17, 2014).
`(2) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is R&D (YTD 2015: +47%, YTD 2014: +17%).
`(3) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is SG&A (YTD 2015: +18%, YTD 2014: +21%).
`(4) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Combined R&D and SG&A (YTD 2015: +28%, YTD 2014: +20%).
`(5) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Gross Margin (YTD 2015: 83.9%, YTD 2014: 82.4%).
`(6) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is R&D (YTD 2015: 27%, YTD 2014: 19%).
`(7) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is SG&A (YTD 2015: 38%, YTD 2014: 33%).
`(8) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Net income Margin (YTD 2015: 22%, YTD 2014: 28%).
`(9) Excluding Royalties and Other Revenues.
`(10) See slide 33 for a list of items excluded from the US GAAP equivalent used to calculate all Non GAAP measures detailed above. A reconciliation of Non GAAP financial measures to the most directly comparable measure under US GAAP is presented in
`Shire's Q3 2015 earnings release on pages 22 to 28.
`
`16
`
`Page 16
`
`

`
`Strong Non GAAP cash generation(1)(3) of $0.6B in Q3 2015.
`Non GAAP net debt(2)(3) of $2.05B at September 30, 2015
`
`September 30, 2015
`$m
`
`December 31, 2014
`$m
`
`Cash and cash equivalents
`Long-term borrowings
`Short-term borrowings
`Other debt
`Non GAAP Net (debt)/cash(2)(3)
`
`45
`(71)
`(2,006)
`(13)
`(2,045)
`
`2,982
`-
`(850)
`(13)
`2,119
`
`Non GAAP Cash
`Generation(1)(3)
`
`588
`
`(27)
`
`Tax and Interest paid, net
`
`(22)
`
`Capital expenditure
`
`Non GAAP Free Cash Flow(1)(3)
`
`539
`
`(304)
`
`(230)
`
`(24)
`
`Payments in respect of
`business combinations
`Net repayment of facility
`and term loans
`Other investing and
`financing
`
`(19)
`
`Net Cash outflow QTD
`
`(2,938)
`
`Net Cash outflow YTD
`
`(1)
`(2)
`(3)
`
`This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Net cash provided by operating activities (Q3 2015: $561m, Q3 2014: $593m).
`This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Cash and cash equivalents (September 30, 2015: $45m, December 31, 2014: $2,982m).
`See slide 33 for a list of items excluded from the US GAAP equivalent used to calculate all Non GAAP measures detailed above. A reconciliation of Non GAAP financial measures to the most directly comparable
`measure under US GAAP is presented in Shire's Q3 2015 earnings release on pages 22 to 28.
`
`17
`
`Page 17
`
`

`
`2015 Guidance reiterated
`
`Total Product Sales
`
`Product Sales excluding INTUNIV
`
`Royalties & Other Revenues
`
`Non GAAP Gross Margins(3)
`
`Non GAAP Combined R&D and SG&A(3)
`
`Non GAAP Net Interest/Other(3)
`
`Non GAAP Tax Rate(3)
`
`Non GAAP diluted Earnings per ADS(2)(3)
`
`Our 2015 Outlook is based on an average of YTD 2015
`actual exchange rates and the September 30, 2015
`exchange rates holding for Q4 2015 (implied full year
`rates of Euro:$1.12, £:$1.53, CHF:$1.04, CAD:$0.79).
`The estimated impact of a 10% appreciation in the US
`Dollar against the respective currency, over the full
`year, on our 2015 Guidance is as follows:
`
`Full Year 2015 Dynamics
`Direction Versus
`FY 14(1)
`
`CER Growth (3)(4)
`
`High single digit
`growth
`
`Low teens growth
`
`Impact of FX Rates
`on Guidance
`
`-3 to 4% points
`
`~
`
`~
`
`Low double digit
`growth
`
`-4 to 5% points
`
`EUR
`GBP
`CHF
`CAD
`Other
`
`Revenue
`(1.3%)
`(0.3%)
`(0.1%)
`(0.3%)
`(0.6%)
`
`Earnings
`(2.2%)
`(0.2%)
`0.4%
`(0.4%)
`(0.8%)
`
`Guidance
`
`4-5% higher than
`2014
`
`Low double digit
`
`45-55% higher than
`in 2014
`
`Similar to 2014
`
`High single digit
`growth
`Broadly in line with
`2014
`Core effective tax
`rate of 15-17%
`Mid-to-high single
`digit growth
`
`(1) Results from continuing operations including NPS Pharmaceuticals Inc. in 2015 (acquired on February 21, 2015) and ViroPharma Inc. in 2014 (acquired on January 24, 2014) and excluding DERMAGRAFT in 2014 (treated as a discontinued operation
`following divestment on January 17, 2014).
`(2) Based on a latest assumption of a full year 2015 weighted average number of ordinary shares of 594 million.
`(3) See slide 33 for a list of items excluded from the US GAAP equivalent used to calculate all Non GAAP measures detailed above. A reconciliation of Non GAAP financial measures to the most directly comparable measure under US GAAP is presented in
`Shire's Q3 2015 earnings release on pages 22 to 28.
`(4) This is a Non GAAP financial measure. Constant exchange rates ("CER") performance is determined by comparing 2015 guidance (restated using average 2014 foreign exchange rates for the relevant period) to actual 2014 reported performance.
`
`18
`
`Page 18
`
`

`
`Summary
`
`Flemming Ornskov, MD, Chief Executive Officer
`
`Our purpose
`We enable people with life-altering conditions to lead better lives.
`
`Page 19
`
`

`
`Proposed combination with Baxalta would create the global leader
`in rare diseases with compelling financials and strong outlook
`
`The global leader in rare diseases
`•
`~$20B in product sales by 2020 (“20x20”)
`• Multiple $1B+ high-value rare diseases franchises with substantial barriers to entry
`• Complementary expertise in rare diseases R&D, commercial, and manufacturing,
`supported by global scale and infrastructure
`Compelling financial profile and value creation
`•
`Projected double-digit top-line growth
`•
`Substantial operating synergies
`•
`Accretive to Non GAAP earnings(1) – breakeven in year one with accretion thereafter,
`supported by a share buyback program
`Attractive sustainable returns including IRR projected in excess of 10%
`•
`Strong future outlook
`•
`>30 new product launches planned with ~$5B sales potential by 2020(2)
`•
`Strong balance sheet and robust pro forma cash flow support future organic growth
`and M&A
`
`Including impact of anticipated share buyback program.
`(1)
`(2) Based on Shire management projections and Baxalta investor presentations.
`
`20
`
`Page 20
`
`

`
`Execution of strategy is delivering
`
`Continued execution
`
`Delivering results
` in 2015 …
`
`✓ GROWTH
`
`✓
`
`EFFICIENCY
`
`✓
`INNOVATION
`
`✓
`
`PEOPLE
`
`Delivering
`growth in
`revenues
`and earnings
`
`…and beyond
`
`Investing for future growth
`
`Driving VYVANSE for
`BED in adults
`
`Leveraging NPS assets
`
`Advancing multiple
`programs into Phase 3
`
`Developing an
`innovative portfolio in
`Ophthalmology
`
`Executing on BD
`opportunities
`
`On track to become a leading biotech
`
`21
`
`Page 21
`
`

`
`Questions and Answers
`
`Page 22
`
`

`
`APPENDIX
`
`Our purpose
`We enable people with life-altering conditions to lead better lives.
`
`Page 23
`
`

`
`Data read outs expected in 2015 & 2016
`
`INNOVATION
`
`✓
`
`Intuniv
`EU approval
`
`✓
`
`SHP606 lifitegrast
`CRL: October 16
`
`NATPAR
`EU approval
`
`SHP606 lifitegrast
`OPUS 3 head line data
`
`2H 2015
`
`SHP610
`Sanfillipo A
`Phase 2 head line data
`
`2016
`
`✓
`
`FIRAZYR
`ACE i-induced AE
`
`SHP625
`VYVANSE
`PSC
`BED maintenance
`Phase 2 head line data
`
`SHP607
`Retinopathy of prematurity
`Phase 2 head line data
`
`SHP625
` ALGS (ITCH study)
`Phase 2 head line data
`
`Note
`Future readouts of SHP625 program under review.
`
`Registration &
`Phase 4
`
`Phase 3
`
`Phase 2
`
`Phase 1/2
`
`24
`
`Page 24
`
`

`
`YTD 2015 Performance summary
`
`Product Sales
`
`Product Sales excluding INTUNIV
`
`Royalties and Other Revenues
`
`Total Revenue
`
`Non GAAP EBITDA(3)(8)
`
`Non GAAP EBITDA margin(4)(5)(8)
`
`Non GAAP diluted EPS – ADS(6)(8)
`
`Non GAAP Cash Generation(7)(8)
`
`YTD 2015
`$m(1)
`4,476
`
`YTD 2014
`$m(1)
`4,330
`
`Reported
`Growth
`+3%
`
`CER
`Growth(2)(8)
`+8%
`
`4,431
`
`225
`
`4,701
`
`2,127
`
`43%
`
`8.71
`
`1,609
`
`4,051
`
`116
`
`4,446
`
`2,063
`
`+9%
`
`+93%
`
`+6%
`
`+3%
`
`+14%
`
`+99%
`
`+10%
`
`+7%
`
`45%
`
`-2% points
`
`-3% points
`
`7.95
`
`1,602
`
`+10%
`
`0%
`
`+14%
`
`(1) Results from continuing operations including NPS Pharmaceuticals Inc. in 2015 (acquired on February 21, 2015) and ViroPharma Inc. in 2014 (acquired on January 24, 2014) and excluding DERMAGRAFT in 2014 (treated as a discontinued operation
`following divestment on January 17, 2014).
`(2) This is a Non GAAP financial measure. Constant exchange rates ("CER") performance is determined by comparing 2015 performance (restated using average 2014 foreign exchange rates for the relevant period) to actual 2014 reported performance.
`(3) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Net Income (YTD 2015: $1,023m, YTD 2014: $1,233m).
`(4) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Net Income margin (YTD 2015: 22%, YTD 2014: 28%).
`(5) Non GAAP earnings before interest, tax, depreciation and amortization (“EBITDA”) as a percentage of product sales, excluding royalties and other revenues.
`(6) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is EPS-ADS (YTD 2015: $5.17, YTD 2014: $6.25).
`(7) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Net Cash provided by operating activities (YTD 2015: $1,575m, YTD 2014: $1,674m).
`(8) See slide 33 for a list of items excluded from the US GAAP equivalent used to calculate all Non GAAP measures detailed above. A reconciliation of Non GAAP financial measures to the most directly comparable measure under US GAAP is presented in
`Shire's Q3 2015 earnings release on pages 22 to 28.
`
`25
`
`Page 25
`
`

`
`Product Sales – Regional analysis
`
`Q3 2015
`Product Sales $m(1)
`% of Product Sales
`YoY Growth
`
`YTD 2015
`Product Sales $m(1)
`% of Product Sales
`YoY Growth
`
`FY 2014
`Product Sales $m(1)
`% of Product Sales
`YoY Growth
`
`US
`
`Europe
`
`LATAM
`
`Other
`
`Total
`
`1,169
`74%
`+8%
`
`3,267
`73%
`+8%
`
`4,082
`70%
`+28%
`
`258
`16%
`-11%
`
`769
`17%
`-10%
`
`1,147
`20%
`+13%
`
`55
`4%
`-32%
`
`147
`3%
`-13%
`
`214
`4%
`+3%
`
`95
`6%
`-2%
`
`293
`7%
`+3%
`
`387
`6%
`+10%
`
`1,577
`100%
`+2%
`
`4,476
`100%
`+3%
`
`5,830
`100%
`+23%
`
`(1) Results from continuing operations including NPS Pharmaceuticals Inc. in 2015 (acquired on February 21, 2015) and ViroPharma Inc. in 2014 (acquired on
`January 24, 2014) and excluding DERMAGRAFT in 2014 (treated as a discontinued operation following divestment on January 17, 2014).
`
`26
`
`Page 26
`
`

`
`Royalties and Other Revenues
`
`SENSIPAR
`FOSRENOL
`3TC and ZEFFIX
`ADDERALL XR
`Other
`Royalties
`Other Revenues
`Royalties & Other Revenues
`
`Q3 2015(1)
`$m
`35
`13
`12
`7
`9
`76
`2
`78
`
`Q3 2014
`$m
`
`-
`15
`9
`10
`6
`40
`5
`45
`
`Reported
`Growth
`n/a
`-10%
`+35%
`-25%
`+33%
`+91%
`-63%
`+73%
`
`(1) Results include NPS Pharmaceuticals Inc. in 2015 (acquired on February 21, 2015).
`
`27
`
`Page 27
`
`

`
`Shire income statement growth analysis
`
`
`
`
`Total Product Sales
`
`2014
`2015
`2015
`2015
`2014
`2014
`2014
`2014
` Q1 (1)
` Q3 (1)
` Q2 (1)
` Q1 (1)
` FY (1)
` Q4 (1)
` Q3 (1)
` Q2 (1)
`$1,308m $1,470m $1,552m $1,500m $5,830m $1,423m $1,476m $1,577m
`
`versus prior year
`
`+19%
`
`+22%
`
`+33%
`
`+17%
`
`+23%
`
`+9%
`
`+0%
`
`+2%
`
`Royalties & Other Revenues
`
`$39m
`
`$32m
`
`$45m
`
`$76m
`
`$192m
`
`$65m
`
`$81m
`
`$78m
`
`versus prior year
`
`-14%
`
`-27%
`
`+8%
`
`+65%
`
`+8%
`
`+68%
`
`+150%
`
`+73%
`
`Total Revenue
`
`$1,347m $1,502m $1,597m $1,576m $6,022m $1,488m $1,558m $1,655m
`
`versus prior year
`
`+18%
`
`+20%
`
`+32%
`
`+19%
`
`+22%
`
`+11%
`
`+4%
`
`Non GAAP Gross Margin (2)(7)
`
`86%
`
`85%
`
`86%
`
`86%
`
`86%
`
`86%
`
`86%
`
`+4%
`
`84%
`
`FY 2015 Dynamics
` Direction v.
`Guidance
`FY 14
`
`
`
`
`
`
`4-5% higher than in 2014
`
`45-55% higher
`than in 2014
`
`Similar to 2014
`
`High single digit growth
`
`Combined Non GAAP
`R&D and SG&A(3)(7)
`versus prior year
`
`$539m
`
`$602m
`
`$618m
`
`$677m
`
`$2,436m
`
`$571m
`
`$697m
`
`$652m
`
`-3%
`
`+2%
`
`+10%
`
`+11%
`
`+5%
`
`+6%
`
`+16%
`
`+5%
`
`Non GAAP EBITDA Margin(4)(7)
`
`45%
`
`44%
`
`46%
`
`41%
`
`44%
`
`46%
`
`39%
`
`43%
`
`Non GAAP Tax Rate(5)(7)
`
`20%
`
`16%
`
`18%
`
`19%
`
`18%
`
`17%
`
`13%
`
`10%
`
`Non GAAP diluted Earnings
`per ADS(6)(7)
`
`$2.36
`
`$2.67
`
`$2.93
`
`$2.63
`
`$10.60