Q1 2015 results
`
`Shire delivers strong revenue growth
`and cash generation; 20% increase in
`Non GAAP earnings per ADS
`April 30, 2015
`
`Flemming Ornskov, MD
`CEO
`Jeff Poulton
`CFO
`
`Page 1
`
`

`
`“SAFE HARBOR” statement under the Private Securities
`Litigation Reform Act of 1995
`
`•
`
`•
`
`•
`
`•
`
`•
`
`•
`
`Statements included in this announcement that are not historical facts 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 the Shire’s products or ingredients are only available from a single approved
`source for manufacture. Any disruption to the supply chain for any of the 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 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 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;
`and other risks and uncertainties detailed from time to time in Shire’s filings with the US Securities and Exchange Commission, including its most
`recent Annual Report on Form 10-K.
`
`•
`
`•
`
`2
`
`Page 2
`
`

`
`Q1 2015: On track to become a leading global
`biotechnology company
`
`GROWTH
`Strong top and bottom line growth and
`cash generation
`Close of NPS acquisition
`Launch of NATPARA in HPT
`Approval and launch of VYVANSE in BED
`
`EFFICIENCY
`US site consolidation well underway
`NPS integration progressing as planned
`
`INNOVATION
`FDA acceptance of NDA for lifitegrast in
`signs and symptoms of Dry Eye Disease
`with Priority review
`Clear regulatory path forward for SHP465
`in adult ADHD
`Acquisition of Meritage expands GI
`pipeline with late stage asset for
`eosinophilic esophagitis
`
`PEOPLE
`Jeff Poulton appointed as Chief Financial
`Officer
`
`3
`
`Page 3
`
`

`
`Delivering strong sales and Non GAAP EBITDA(1)(3)
`growth
`
`Product Sales
`
`Non GAAP EBITDA(1)(3)
`
`Q1 2015
`
`Q1 2014
`
`Rare Diseases
`
`Others
`
`$1,423M
`9%
`(13%
`CER(2)(3))
`$1,308M
`
`Q1 2015
`
`Q1 2014
`
`$715M
`
`$628M
`
`14%
`(17%
`CER(2)(3))
`
` Strong product sales and Non GAAP EBITDA(1)(3) growth,
`despite generic competition to INTUNIV and FX headwinds
`
`(1) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Net Income (Q1 2015: $410m, Q1 2014: $230m).
`(2) This is a Non GAAP financial measure. Constant exchange rates ("CER") performance is determined by comparing 2015 performance (restated using 2014 exchange rates) to actual 2014
`reported performance.
`
`(3) See slide 35 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 Q1 2015 earnings release on pages 19 to 22.
`
`4
`
`Page 4
`
`

`
`Growth across the product portfolio
`
`GROWTH
`
`VYVANSE sales $417M; +20%(1)
`• US growth driven by volume gains – especially post launch of BED - and price
`• International growth continues to benefit from gains in established markets
`
`LIALDA sales $148M; +17%(1)
`• US prescription growth of 12% (in a flat market) drove a 4% increase in market share vs.
`prior year
`• Sales growth aided by a price increase slightly offset by higher destocking; significant
`destocking versus Q4 2014
`CINRYZE sales $148M; +28%(2)
`• Strong increase in patients and utilization
`• Accelerated growth as product has benefited from Shire’s Rare Disease expertise
`
`FIRAZYR sales $92M; +26%(1)
`• Increased number of patients and price
`• Upward momentum continues ~3 years post US launch
`• CINRYZE complementarity has accelerated gains
`GATTEX sales $15M; +44%(3)
`• Gattex is included in reported sales from 21 February 2015
`• Integration progressing according to plan
`• Second consecutive quarter of positive growth for completed patient referral forms,
`a precursor of therapy initiation
`(1) All 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) to actual 2014 reported performance. See slide 35 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 Q1 2015 earnings release on pages 19 to 22
`(2) CINRYZE refers to pro-forma growth. CER reported growth 74%.
`(3) GATTEX refers to pro-forma growth.
`
`5
`
`Page 5
`
`

`
`NPS acquisition: two exciting new assets
`
`GROWTH
`
`Launch
`
`• NATPARA launched in the US 1st April 2015;
`
`NATPAR submitted in EU December 2014
`
`• GATTEX US launch ongoing;
`REVESTIVE EU launch underway
`
`Target
`physicians
`
`Salesforce
`
`• 1080 endocrinologists trained on REMS(1)
`
`program (as of 4/20)
`
`• Improved physician targeting with an enriched
`target list and expanded reach
`
`• 50-strong specialist sales force in place
`
`
`• Salesforce optimization ongoing
`• From 2H 2015 LIALDA salesforce will be
`trained to identify candidates for GATTEX
`
`Patients
`
`• 101 patient referral forms received (4/20)
`• Primarily new patients due to ongoing BID(2)
`
`post approval commitment study
`• First commercial patient supplied with product
`on Friday 4/17
`• Expect both products to benefit from Shire’s rare disease patient identification and
`management capabilities
`• Global footprint to deliver GATTEX/REVESTIVE and NATPARA to patients worldwide
`• Integration progressing according to plan
`
`• Deployment of our leading patient services
`network to provide dedicated case
`management and patient field support for
`patients
`
`(1) REMS: Risk Evaluation and Mitigation Strategy.
`(2) BID: twice daily.
`
`6
`
`Page 6
`
`

`
`Binge Eating Disorder (BED) in adults –
`approved and launch underway
`
`GROWTH
`
`Launch
`
`Received FDA approval on January 30th
`
`
`Marketing
`
`Salesforce
`
`Commenced BED education activities
`
`Launched branded & unbranded consumer and HCP
`promotion
`Hired, trained, & deployed all representatives on
`expanded targets
`
`Held national sales meeting in early February
`
`Early trends positive
`
`7
`
`Page 7
`
`

`
`Binge Eating Disorder – early awareness
`efforts generating positive results
`Unaided awareness of BED
`Visits to BED websites
`
`GROWTH
`
`DSE
`Disease State Education
`Branded
`
`7-Feb 14-Feb 21-Feb 28-Feb 7-Mar 14-Mar 21-Mar 28-Mar 4-Apr 11-Apr
`
` 8
` 6
` 4
` 2
` -
`
`Million visits
`
`71%
`
`42%
`Apr. '14
`
`85%
`
`50%
`
`82%
`
`56%
`
`88%
`
`77%
`
`Oct. '14
`Primary Care
`
`Dec. '14
`Psychiatrist
`
`Feb. '15
`
`Unaided awareness of Vyvanse as
`a medication for BED
`
`63%
`
`21%
`
`13%
`Dec. '14
`Primary Care
`
`20%
`Feb. '15
`Psychiatrist
`
`•
`
`Increased awareness amongst
`primary care physicians and
`psychiatrists
`• Visits to both branded and unbranded
`BED websites have been increasing
`
`
`Unaided awareness charts source: Shire market research
`Websites data source: Adobe Analytics
`
`8
`
`Page 8
`
`

`
`Rolling 4 week YoY TRx growth:
`ADULT – Vyvanse vs. ADHD market
`12.9%
`
`12.8%
`
`11.9%
`
`12.2%
`11.5%
`
`10.7%
`
`12.4% 12.2%
`11.5%
`
`10.7%
`
`GROWTH
`
`Vyvanse is
`consistently
`outgrowing the
`adult market
`
`
`ADHD
`
`Vyvanse
`
`Recent Rx trends indicate positive
`momentum
`Rolling 4 week YoY TRx growth:
`OVERALL – Vyvanse vs. ADHD market
`8.2%
`8.7%
`8.7%
`7.5%
`
`7.4%
`6.9% 6.6% 7.0%
`6.1%
`
`In line/
`slightly
`above
`6.7%
`
`7.7%
`7.2%
`
`6.2%
`6.2%
`5.5% 5.8%
`
`5.2%
`
`5.1%
`
`4.8%
`
`3.7%
`
`3.5%
`
`BED
`approval
`
`3.4%
`
`6.1%
`
`6.1%
`
`6.0%
`
`5.8%
`
`5.1%
`4.7%
`4.5%
`
`4.2%
`3.5%
`
`5.9%
`
`5.0%
`
`4.2%
`3.7%
`
`9.5% 9.6%
`
`9.0%
`
`9.7%
`
`8.4% 8.5% 8.3%
`
`10.3%
`9.9%
`
`9.2%
`
`9.7%
`
`9.0%
`
`Wk
`47
`
`Wk
`48
`
`Wk
`Wk
`50
`49
`2014
`
`Wk
`51
`
`Wk
`52
`
`Wk
`1
`
`Wk
`2
`
`Wk
`3
`
`Wk
`4
`
`Wk
`5
`
`Wk
`6
`
`Wk
`7
`
`Wk
`Wk
`Wk
`10
`9
`8
`2015
`
`Wk
`11
`
`Wk
`12
`
`Wk
`13
`
`Wk
`14
`
`Wk
`15
`
`Wk
`16
`
`Wk 6 Wk 7 Wk 8 Wk 9 Wk 10Wk 11Wk 12Wk 13Wk 14Wk 15Wk 16
`
`2015
`
`New to brand Rx for Vyvanse (NBRx)
`
`Monthly IMS
`
`80,000
`75,000
`70,000
`65,000
`60,000
`55,000
`50,000
`45,000
`40,000
`35,000
`
`•
`
`•
`
`•
`
`A large portion of the strong momentum
`is coming from the adult market
`Vyvanse NBRx is increasing, with clear
`separation from prior years
`Trend break corresponds with the launch
`timing of the BED indication
`
`Jul Aug Sep Oct Nov Dec
`Jan Feb Mar Apr May Jun
`2013
`2014
`2015
`
`Source: weekly IMS data
`
`9
`
`Page 9
`
`

`
`Strong and innovative
`pipeline
`
`Our purpose
`We enable people with life-altering conditions to lead better lives.
`
`Page 10
`
`

`
`Strong pipeline continues to advance
`
`INNOVATION
`
`Preclinical
`
`Phase 1
`
`Phase 2
`
`Phase 3
`
`Registration
`
`SHP611
`MLD
`(Ph 1/2)
`
`SHP602
`Iron overload
`(clinical hold)
`
`SHP620 (Maribavir)
`CMV in transplant
`patients
`
`SHP607
`Prevention of ROP
`
`SHP625
`Primary Biliary Cirrhosis
`
`
`SHP609
`Hunter IT
`
`
`SHP610
`Sanfilippo A
`
`
`SHP616 (CINRYZE)
`Acute Antibody
`Mediated Rejection
`
`LDX (Japan)
`ADHD
`
`SHP625
`Progressive Familial
`Intrahepatic Cholestasis
`
`SHP625
`Alagille Syndrome
`
`SHP625
`Primary Sclerosing
`Cholangitis
`
`26 Research
` Programs
`
`TH / GCH1
`GenePod
` Parkinson’s Subset
`
`SHP608
`Dystrophic E.Bullosa
`
`
`SHP624
`Heme B Gene Edit
`
`
`SHP630
`adRP
`
`
`SHP631
`Hunter Syndrome
`
`
`SHP628
`Renal Impairment
`
`SHP616
`(CINRYZE SC)
`HAE Prophylaxis
`
`SHP616 (CINRYZE)
` Acute Neuromyelitis
`Optica
`
`SHP616 (CINRYZE)
`Paroxysmal Nocturnal
`Hemoglobinuria
`
`SHP622
`Friedreich’s Ataxia
`
`SHP627
`Focal Segmental
`Glomerulosclerosis
`
`SHP626
`Non-Alcoholic
`Steatohepatitis
`
`NATPAR (EU)
`Hypoparathyroidism
`
`INTUNIV (EU)
`ADHD
`
`SHP606
`(lifitegrast)
`Dry eye disease
`
`FIRAZYR
`ACE inhibitor-
`induced AE
`
`FIRAZYR
` (Japan)
`HAE
`
`SHP616 (CINRYZE)
`(Japan)
`HAE prophylaxis
`SHP621 (Former
`Meritage OBS)
`Eosinophilic esophagitis
`
`SHP555 (US)
` Chronic Constipation
`
`INTUNIV (Japan)
`ADHD
`
`SHP465
`ADHD
`
`Rare Diseases Programs
`
`Changes since year end 2014
`• Acquisition of NPS Pharma adds NATPAR in Registration in Europe.
`• Acquisition of Meritage adds Oral Budesonide Suspension (OBS) now SHP621, Phase 3 ready.
`•
`Lifitegrast NDA filed for treatment of signs and symptoms of dry eye disease in adults.
`• VYVANSE BED in adults approved January 30, 2015.
`• Fast track designation granted to SHP609.
`• Discontinued IgAN.
`
`
`11
`
`Page 11
`
`

`
`Q1 2015 Pipeline updates
`
`INNOVATION
`
`SHP606
`(lifitegrast)
`Dry eye disease
`
`• FDA has accepted the NDA for lifitegrast (SHP606) for the treatment of the signs and
`symptoms of dry eye disease, and has granted a Priority Review designation
`• PDUFA date of 25 October 2015
`• OPUS 3 on track for read out by year end 2015
`
`SHP465
`ADHD
`
`SHP611
`MLD
`
`• Clear regulatory path forward for SHP465 in the treatment of ADHD
`• Agreement with the FDA to conduct a short-term efficacy and safety study in pediatric
`patients with ADHD (ages 6-17)
`• First patient, first visit to take place in August 2015; study completion targeted for Q4 2016
`• FDA Class 2 submission expected by Q2 2017; anticipate a 6 month review time
`
`• Reported interim results from a Ph 1/2 study of SHP611 in late infantile metachromatic
`leukodystrophy (MLD)
`• SHP611 was shown to be safe and well tolerated at all doses, with encouraging signs of
`efficacy at the highest dose in the study (100mg)
`
`SHP625
`ALGS
`
`• Reported results from the Phase 2 IMAGO study of SHP625 in ALGS
`• 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
`
`12
`
`Page 12
`
`

`
`SHP621: late stage Orphan GI opportunity
`for eosinophilic esophagitis (EoE)
`ViroPharma and Meritage executed a development and option (to
`acquire the company) agreement in 2011
`
`INNOVATION
`
`Company’s sole product candidate, Oral Budesonide Suspension
`(OBS) now SHP621, is Phase 3 ready
`
`SHP621 under development to treat a rare GI disease: eosinophilic
`esophagitis (EoE)
`
`Disease prevalence in the US is ~180,000
`
`Proof of concept (PoC) demonstrated in two Phase 2 studies with
`significant reduction in eosinophil counts in both studies
`
`SHP621 has the potential to be the first approved product in the US for the treatment
`of EoE. FDA has granted orphan designation to SHP621 for the treatment of EoE
`
`13
`
`Page 13
`
`

`
`Data read outs expected in 2015
`
`rhPTH[1-84]
`✓
`NATPARA
`Launch
`
`✓
`
`SHP625
`ALGS (IMAGO study)
`Phase 2 head line data
`
`VYVANSE
`✓
`BED Launch
`
`SHP611
`✓
`MLD Phase 1/2
`head line data
`
`2015
`
`SHP606
`✓
`lifitegrast
`NDA Filing
`
`SHP620 Maribavir
`✓
`Phase 2 head line data
`
`SHP625
`PBC
`Phase 2 head line data
`
`SHP606 lifitegrast
`PDUFA: 25 October
`
`SHP606 lifitegrast
`OPUS 3 head line data
`
`SHP625
` ALGS (ITCH study)
`Phase 2 head line data
`
`✓
`
`INNOVATION
`
`Registration &
`Phase 4
`
`Phase 3
`
`Phase 2
`
`Phase 1/2
`
`Note
`Future readouts of SHP625 program under review
`
`14
`
`Page 14
`
`

`
`Jeff Poulton appointed as CFO
`
`PEOPLE
`
`• Jeff Poulton appointed as Chief Financial Officer (CFO) and member
`of the Executive Committee
`• Jeff will also join the Shire Board of Directors
`
`•
`•
`
`Jeff has served as Interim CFO since December 2014
`Jeff has been with Shire since 2003 and has extensive
`experience across financial, commercial and strategic
`leadership roles
`• Recent roles include Head of Investor Relations and
`leading the Global Rare Diseases business unit
`• Previously, Jeff served in diverse corporate finance
`and business development roles for Cinergy Corp. and
`PPG Industries
`Jeff served as a commissioned officer in the United
`States Navy, and has a B.A. in economics from Duke
`University and a MBA in Finance from the Kelly School
`of Business at Indiana University
`
`
`•
`
`15
`
`
`
`Page 15
`
`

`
`Financial Review
`
`Jeff Poulton, Chief Financial Officer
`
`Our purpose
`We enable people with life-altering conditions to lead better lives.
`
`Page 16
`
`

`
`Strong start to the year, with EPS(5)(7) of $2.84 up 20%
`
`Product Sales
`
`Q1 2015
`$m
`1,423
`
`Q1 2014
`$m
`1,308
`
`Reported
`Growth
`+9%
`
`Product Sales excluding INTUNIV
`
`1,406
`
`1,226
`
`Royalties and Other Revenues
`
`Total Revenue
`
`Non GAAP EBITDA(2)(7)
`Non GAAP EBITDA % of Product
`Sales(3)(4)(7)
`Non GAAP diluted EPS – ADS(5)(7)
`
`Non GAAP Cash Generation(6)(7)
`
`+15%
`
`+68%
`
`+11%
`
`+14%
`
`CER(1)(7)
`
`+13%
`
`+19%
`
`+73%
`
`+15%
`
`+17%
`
`+24%
`
`65
`
`39
`
`1,488
`
`1,347
`
`628
`
`715
`
`46%
`
`2.84
`
`516
`
`45%
`
`1% point
`
`2.36
`
`331
`
`+20%
`
`+56%
`
`(1) This is a Non GAAP financial measure. Constant exchange rates ("CER") performance is determined by comparing 2015 performance (restated using 2014 exchange rates) to actual 2014 reported performance.
`(2) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Net Income (Q1 2015: $410m, Q1 2014: $230m).
`(3) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Net Income margin (Q1 2015: 28%, Q1 2014: 17%).
`(4) Excluding Royalties and Other Revenues.
`(5) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is EPS-ADS (Q1 2015: $2.08, Q1 2014: $1.17).
`(6) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Net Cash provided by operating activities (Q1 2015: $562m, Q1 2014: $246m).
`(7) See slide 35 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 Q1 2015 earnings release on pages 19 to 22.
`
`17
`
`Page 17
`
`

`
`Product sales up 13% at CER(3)(4), driven by
`VYVANSE and the HAE products
`
`+$17m
`
`-$4m
`
`-$16m
`
`-$1m
`
`+$62m
`
`+$66m
`
`-$65m
`
`+$15m
`
`+$19m
`
`+$22m
`
`Reported Product Sales growth 9%
`Product sales growth at CER(3)(4) 13%
`
`$1,308m
`
`Q1 2014
`
`$1,423m
`
`Other
`product
`sales
`
`Q1 2015
`
`(1) CINRYZE acquired with ViroPharma Inc. on January 24, 2014.
`(2) GATTEX acquired with NPS Pharma Inc. on February 21, 2015.
`(3) This is a Non GAAP financial measure. Constant exchange rates ("CER") performance is determined by comparing 2015 performance (restated using 2014 exchange rates) to actual 2014 reported performance.
`(4) See slide 35 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 Q1 2015 earnings release on pages 19 to 22.
`
`
`18
`
`Page 18
`
`

`
`Delivery of strong Non GAAP EBITDA
`margins(7)(8)(9) in Q1 2015
`
`Year on Year Change:
`Product Sales
`Non GAAP R&D(1)(9)
`Non GAAP SG&A(2)(9)
`Combined Non GAAP R&D and SG&A(3)(9)
`
`Ratios:
`% of Product Sales
`Non GAAP Gross Margin(4)(9)
`Non GAAP R&D(5)(9)
`Non GAAP SG&A(6)(9)
`Non GAAP EBITDA(7)(8)(9)
`
`Q1 2015
`+9%
`-2%
`+10%
`+6%
`
`Q1 2014
`+19%
`-13%
`+4%
`-3%
`
`Q1 2015
`
`Q1 2014
`
`85.8%
`13%
`27%
`46%
`
`86.2%
`14%
`27%
`45%
`
`(1) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is R&D (Q1 2015: -46%, Q1 2014: +63%).
`(2) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is SG&A (Q1 2015: +18%, Q1 2014: +10%).
`(3) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Combined R&D and SG&A (Q1 2015: -11%, Q1 2014: +29%).
`(4) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Gross margin (Q1 2015: 84.0%, Q1 2014: 82.5%).
`(5) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is R&D (Q1 2015: 14%, Q1 2014: 28%).
`(6) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is SG&A (Q1 2015: 36%, Q1 2014: 33%).
`(7) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Net income margin (Q1 2015: 28%, Q1 2014: 17%).
`(8) Excluding Royalties and Other Revenues.
`(9) See slide 35 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 Q1 2015 earnings release on pages 19 to 22.
`
`19
`
`Page 19
`
`

`
`Strong Non GAAP cash generation(1)(3) in Q1 2015
`Non GAAP net debt(2)(3) of $2.6B at March 31, 2015
`
`March 31, 2015
`$m
`
`December 31, 2014
`$m
`
`Cash and cash equivalents
`Short-term borrowings
`Long-term borrowings
`Other debt
`Non GAAP Net (debt)Cash(2)(3)
`
`74
`(2,570)
`(79)
`(13)
`(2,588)
`
`2,982
`(850)
`-
`(13)
`2,119
`
`Cash Generation(1)(3)
`
`516
`
`Tax and Interest
`received, net
`
`46
`
`(20)
`
`Capital expenditure
`
`Free Cash Flow
`
`542
`
`(5,200)
`
`Payments in Respect of
`business combinations
`
`Net Facility Draw Down
`
`1,695
`
`Other investing and financing
`
`55
`
`(2,908)
`
`Net Cash outflow
`
`(1) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Net Cash provided by operating activities (Q1 2015: $562m, Q1 2014: $246m).
`(2) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Cash and Cash equivalents (Q1 2015: $74m, Q4 2014: $2,982m).
`(3) See slide 35 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 Q1 2015 earnings release on pages 19 to 22.
`
`20
`
`Page 20
`
`

`
`Confident in delivering Non GAAP diluted earnings per
`ADS(1)(2) growth in the mid single digits
`Full Year 2015 Dynamics
`Impact of FX Rates
`on Guidance
`
`Guidance
`
`Direction Versus
`FY 14
`
`CER Growth (2)(3)
`
`Total Product Sales
`
`Product Sales excluding INTUNIV
`
`Royalties & Other Revenues
`
`Non GAAP Gross Margins(2)
`
`Non GAAP Combined R&D and SG&A(2)
`
`Non GAAP Net Interest/Other(2)
`
`Non GAAP Tax Rate(2)
`
`Non GAAP diluted Earnings per ADS(1)(2)
`
`The estimated impact of a 10% appreciation in the US
`Dollar against the respective currency on our 2015
`Guidance is as follows:
`
`~
`
`~
`
`EUR
`GBP
`CHF
`CAD
`Other
`
`Mid-to-high single
`digit growth
`Low double digit
`growth
`
`-3 to 4% points
`
`High single digit
`growth
`
`-4 to 5% points
`
`Revenue
`(1.2%)
`(0.3%)
`(0.1%)
`(0.4%)
`(0.6%)
`
`Earnings
`(2.1%)
`(0.3%)
`0.3%
`(0.3%)
`(0.8%)
`
`Low-to-mid single
`digit growth
`High single digit
`growth
`30-40% higher than
`in 2014
`
`Similar to 2014
`
`High single digit
`growth
`Broadly in line with
`2014
`Core effective tax
`rate of 15-17%
`Mid single digit
`growth
`
`2015 Guidance constitutes forward looking statements. See “Safe Harbor” statement on Slide 2.
`(1) Based on a latest assumption of a full year 2015 weighted average number of ordinary shares of 594 million.
`(2) See slide 35 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 Q1 2015 earnings release 19 to 22.
`(3) This is a Non GAAP financial measure. Constant exchange rates ("CER") performance is determined by comparing 2015 performance (restated using 2014 exchange rates) to actual 2014 reported performance.
`
`21
`
`Page 21
`
`

`
`Summary
`
`Flemming Ornskov, MD, Chief Executive Officer
`
`
`Our purpose
`We enable people with life-altering conditions to lead better lives.
`
`Page 22
`
`

`
`Execution of strategy is delivering
`
`Continued execution
`
`Delivering results
` in 2015
`
`✓ GROWTH
`
`✓
`
`EFFICIENCY
`
`✓
`INNOVATION
`
`✓
`
`PEOPLE
`
`Delivering
`growth in
`revenues and
`earnings
`
`Driving future growth
`
`Leveraging NPS assets
`
`Execute on BD
`opportunities
`
`Driving VYVANSE for
`BED in adults
`
`Advancing lifitegrast for
`Dry Eye Disease
`
`Multiple data read outs
`
`On track to become a leading biotech
`
`23
`
`Page 23
`
`

`
`Questions and Answers
`
`Page 24
`
`

`
`APPENDIX
`
`Our purpose
`We enable people with life-altering conditions to lead better lives.
`
`Page 25
`
`

`
`Key Protections on important products
`
`Product Protection
`Lialda
`Orange Book Listed patent
`expiring June 2020
`
`Gattex
`
`• GATTEX benefits from
`regulatory exclusivity in the US
`through December 2019.
`• There are several patents
`listed in the Orange Book
`protecting GATTEX expiring in
`2015, 2022 and 2025.
`
`
`Commentary
`• The patent has already withstood an attack on validity.
`• The US District Court for the Southern District of Florida upheld the validity of
`that patent in view of the challenges posed by Watson. In addition to
`withstanding the attack on validity, the US District Court for the Southern
`District of Florida found the patent to be infringed by Watson’s proposed ANDA
`product. Aspects of the claim construction from that court are currently being
`revisited at the Court of Appeals of the Federal Circuit following Shire’s
`successful petition to the Supreme Court.
`• ANDAs have been pending at the FDA for five years. None have been
`approved.
`It has been 2.5 years since the FDA put forward revised guidelines for
`establishing bioequivalence to LIALDA. Shire regards these guidelines as
`challenging to meet. None of the pending ANDAs have been approved.
`It is not certain that an IPR will be instituted. The challenged claims are
`presumed valid. Shire will defend the validity of the patent and will seek to
`have the US Patent and Trademark Office deny the request to institute an IPR.
`• The recently filed petitions to institute inter partes reviews (“IPR”) relates only
`to some of the claims of the patent expiring in 2025. The remainder of the
`claims in that patent, and the claims of the other patents are not being
`challenged.
`It is not certain that any IPRs will be instituted. The challenged claims are
`presumed valid. Shire will defend the validity of the patent and will seek to
`have the US Patent and Trademark Office deny the request to institute an IPR.
`
`•
`
`•
`
`•
`
`
`
`26
`
`Page 26
`
`

`
`Key Protections on important products
`
`Product Protection
`Vyvanse
`• 18 Orange book listed patents
`including composition of matter
`patent
`Including pediatric extension,
`we anticipate US patent
`protection until December 2023
`
`•
`
`Commentary
`• On June 24, 2014 Judge Stanley Chesler of the U.S. District Court for the District
`of New Jersey issued an opinion and order granting Shire’s summary judgment
`motion, holding that certain claims of the Vyvanse® patents were infringed and
`valid.
`• The Court ruled that 18 patent claims from four patents are both infringed and
`valid, including claims to the following:
`• Vyvanse’s Active Pharmaceutical Ingredient (API) compound,
`lisdexamfetamine dimesylate;
`lisdexamfetamine dimesylate compositions; and
`•
`• A method of treating ADHD using lisdexamfetamine dimesylate.
`• This decision prevents the ANDA-filers from launching their proposed generic
`Vyvanse products until:
`•
`they successfully appeal the ruling to the Federal Circuit, and overturn the
`rulings for each of the 18 patent claims; or
`the expiration of the patents-in-suit in 2023.
`•
`• This lawsuit includes all known ANDAs currently pending for Vyvanse.
`• Shire’s summary judgment motion did not include every patent claim in the
`litigation. In the event the Court of Appeals overturns the summary judgment
`ruling, Shire will have the opportunity to litigate these remaining claims.
`• Shire maintains its belief that it also has strong infringement claims against the
`defendants for the patent claims that were not part of Shire’s summary judgment
`motion, and strongly believes that the patent claims are valid.
`
`
`27
`
`Page 27
`
`

`
`SHP621 (OBS) Phase 2b summary results
`
`INNOVATION
`
`
`Study MPI-101-06: US Phase 2b study in 75 patients with EoE with persistent dysphagia
`assessed safety and efficacy of 2mg BID for 12 weeks compared to placebo with a 24 week
`open-label extension of 2mg QD
`
`
`
`*Top Line Data released Sep 9, 2014
`
`Endpoint Met
`
`Endpoints
`Co -1° Endpoints
`
`Induction of a histologic response in adolescent and
`adult subjects over a 12 week course of therapy
`And
` Induction of a symptom response using the DSQ in adolescent
`and adult subjects with EoE over a 12 week course of therapy
`Safety and Tolerability
`
` 
`
`
`(p=<0.0001)
`
` 
`
`
`(p=0.0096)
`
`
`
`28
`
`
`
`Page 28
`
`

`
`Product sales – regional analysis
`
`Q1 2015
`Product Sales $m
`% of Product Sales
`YoY Growth
`
`FY 2014
`Product Sales $m
`% of Product Sales
`YoY Growth
`
`US
`
`Europe
`
`LATAM
`
`Other
`
`Total
`
`1,044
`73%
`+15%
`
`4,082
`70%
`+28%
`
`255
`18%
`-8%
`
`1,147
`20%
`+13%
`
`28
`2%
`-1%
`
`214
`4%
`+3%
`
`96
`7%
`+5%
`
`387
`6%
`+10%
`
`1,423
`100%
`+9%
`
`5,830
`100%
`+23%
`
`29
`
`Page 29
`
`

`
`Royalties and Other Revenues
`
`INTUNIV
`SENSIPAR
`ADDERALL XR
`FOSRENOL
`3TC and ZEFFIX
`REMINYL & Other
`Royalties
`Other Revenues
`Royalties & Other Revenues
`
`Q1 2015
`$m
`22
`10
`9
`8
`8
`6
`63
`2
`65
`
`Q1 2014
`$m
`
`0
`0
`9
`13
`8
`2
`32
`7
`39
`
`Reported
`Growth
`n/a
`n/a
`-6%
`-34%
`0%
`+110%
`+94%
`-63%
`+68%
`
`30
`
`Page 30
`
`

`
`Shire income statement growth analysis
`
`
`
`
`Total Product Sales
`
`2014
` Q1
`$1,308m
`
`2014
` Q2
`$1,469m
`
`2014
` Q3
`$1,552m
`
`2014
` Q4
`$1,501m
`
`2014
` FY
`$5,830m
`
`2015
` Q1
`$1,423m
`
` Direction v.
`FY 14
`
`
`
`FY 2015 Dynamics
`Guidance
`
`Low-to-mid single digit growth
`
`versus prior year
`
`+19%
`
`+22%
`
`+33%
`
`+17%
`
`+23%
`
`+9%
`
`Royalties & Other Revenues
`
`$39m
`
`$33m
`
`$45m
`
`$75m
`
`$192m
`
`$65m
`
`
`
`30-40% higher than in 2014
`
`versus prior year
`
`-14%
`
`-27%
`
`+8%
`
`+65%
`
`+8%
`
`+68%
`
`Total Revenue
`
`$1,347m
`
`$1,502m
`
`$1,597m
`
`$1,576m
`
`$6,022m
`
`$1,488m
`
`versus prior year
`
`+18%
`
`+20%
`
`+32%
`
`+19%
`
`+22%
`
`+11%
`
`86%
`
`86%
`
`86%
`
`Similar to 2014
`
`Non GAAP Gross Margin (1)(6)
`
`86%
`
`85%
`
`86%
`
`Combined Non GAAP
`R&D and SG&A (2)(6)
`
`$539m
`
`$602m
`
`$618m
`
`$677m
`
`$2,436m
`
`$571m
`
`~
`
`
`
`High single digit growth
`
`versus prior year
`
`-3%
`
`Non GAAP EBITDA Margin(3)(6)
`
`Non GAAP Tax Rate(4)(6)
`
`Non GAAP diluted Earnings per
`ADS (5)(6)
`
`+2%
`
`44%
`
`16%
`
`+10%
`
`+11%
`
`46%
`
`18%
`
`41%
`
`19%
`
`+5%
`
`44%
`
`18%
`
`+6%
`
`46%
`
`17%
`
`Core effective tax rate of 15-17%
`
`45%
`
`20%
`
`$2.36
`
`$2.67
`
`$2.93
`
`$2.63
`
`$10.60
`
`$2.84
`
`Mid single digit growth
`
`versus prior year
`
`+38%
`
`+42%
`
`+60%
`
`+17%
`
`+38%
`
`+20%
`
`(1) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Gross margin (Q1 2015: 84.0%, Q1 2014: 82.5%).
`(2) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Combined R&D and SG&A (Q1 2015: $700m, Q1 2014: $791m).
`(3) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Net income margin (Q1 2015: 28%, Q1 2014: 17%).
`(4) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Tax rate (Q1 2015: 12%, Q1 2014: 17%).
`(5) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is EPS-ADS (Q1 2015: $2.08, Q1 2014: $1.17).
`(6) See slide 35 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 Q1 2015 earnings release on pages 19 to 22.
`
`31
`
`Page 31
`
`

`
`Non GAAP cash flow measures
`
`Non GAAP cash generation (1)(3) and
`Non GAAP free cash flow (2)(3) reconciliation
`
`Q1 2015
`$m(1)
`
`Q1 2014
`$m(1)
`
`Non GAAP cash generation(1)(3)
`Tax and interest receipts/(payments), net
`US GAAP Net cash provided by operating activities
`Capital expenditure
`Non GAA