Q2 2015 results
`
`Progressing our transformation to a
`leading global biotech, whilst upgrading
`full year earnings guidance
`July 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 in this announcement 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 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
`
`

`
`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
`
`3
`
`Page 3
`
`

`
`Q2 2015: Progress towards becoming a leading
`global biotechnology company
`
`GROWTH
`Double digit CER(1) product sales growth
`excluding INTUNIV
`
`Non GAAP diluted earnings per ADS growth
`guidance increased to mid-to-high single
`digit percent range for the full year
`
`Significant investment in expected
`future growth drivers, including
`VYVANSE BED, GATTEX/REVESTIVE and
`NATPARA
`
`Continued strong growth for VYVANSE
`post BED launch
`
`GATTEX performing well; implementation
`of enhanced commercial plans
`
`Strong US launch for NATPARA in HPT
`
`INNOVATION
`
`OPUS3 study for lifitegrast fully enrolled;
`results expected Q4 2015
`
`Phase 3 pediatrics study for SHP465
`initiated six weeks ahead of schedule
`
`Positive End of Phase 2 meeting with FDA
`for SHP620; considering progressing into
`Phase 3 in 2016
`
`Phase 2 data received in three rare
`liver indications with SHP625; considering
`options for a possible path forward
`
`(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 34 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 Q2 2015 earnings release on pages 21 to 26.
`
`4
`
`Page 4
`
`

`
`Delivering double digit core product sales(1)
`growth while investing for the future
`Product Sales
`
`GROWTH
`
`-$91m
`
`-7%
`
`+$171m
`
`+12%
`
`-$74m
`
`-5%
`
`$1,470m
`
`$1,476m
`
`• Core product sales excluding
`INTUNIV growing 12% on a
`constant exchange rate basis(2)(4)
`• Continuing to make significant
`investment in expected future
`growth drivers: VYVANSE BED,
`GATTEX/REVESTIVE and
`NATPARA
`• H1 Non GAAP diluted earnings per
`ADS(3)(4) up 9% on a reported
`basis; 13% on a CER basis(2)(4)
`
`Q2 2014
`
`INTUNIV
`
`FX
`
`Q2 2015
`
`Core
`products
`Non GAAP diluted earnings per ADS growth guidance increased
`to mid-to-high single digit percent range for the full year(3)(4)
`
`(1) Results include NPS Pharmaceuticals Inc. in 2015 (acquired on February 21, 2015).
`(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 (H1 2015: $2.88, H1 2014: $3.83).
`(4) See slide 34 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 Q2 2015 earnings release on pages 21 to 26.
`
`5
`
`Page 5
`
`

`
`Growth across the product portfolio
`
`GROWTH
`
`VYVANSE sales $425M; +20%(1)
`• US growth driven by volume gains (TRx up 7.7% YoY), price, and stocking
`• International growth continues to benefit from gains in established markets
`• Reported top-line results for VYVANSE in BED maintenance study; sNDA to be filed by year end
`
`LIALDA sales $158M; +12%(1)
`• Continued strong market share growth in US; +3.3 percentage points vs June 2014
`• Continued lead in US promotional share of voice in the 5-ASA category
`CINRYZE sales $139M; +8%(1)
`• More patients on therapy and price increase in US
`• Destocking reduced Q2 sales; underlying demand and patient accruals remain strong
`
`FIRAZYR sales $104M; +20%(1)
`• Increased number of patients on therapy and higher price
`• Continued double digit growth driven by new patient additions
`
`GATTEX sales $37M; +72%(2)
`• Strong performance in US since acquisition of NPS; over 500 patients on therapy in US
`• International roll out on track; encouraging early results in Germany
`
`NATPARA sales $6M
`• Strong US launch
`• ~ 1900 HCPs REMS trained; ~ 200 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) to actual 2014 reported performance. See slide 34 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 Q2 2015 earnings release on pages 21 to 26.
`
`(2) GATTEX refers to pro-forma growth including product sales recorded by NPS prior to acquisition by Shire on a CER basis.
`
`6
`
`Page 6
`
`

`
`Positive momentum in VYVANSE Rx trends
`continues post BED approval
`GROWTH
`Rolling 4-week YoY adult TRx growth:
`Rolling 4 week YoY TRx growth:
`VYVANSE is consistently outperforming the
`OVERALL – VYVANSE vs. ADHD market
`adult market
`
`11.2%
`
`8.9%
`8.8%
`
`10.4%
`
`7.6%
`
`5.8%
`
`6.7%
`5.7%
`
`3.7%
`Above Market
`
`6.6%
`
`5.5%
`
`7.2%
`
`6.7%
`
`6.0%
`4.2%
`
`3.5%
`
`3.4%
`
`BED
`approval
`
`17.8%
`16.9%
`
`14.9%
`
`15.6%
`
`14.4%
`
`11.5%
`
`11.5%
`
`ADHD
`VYVANSE
`
`12.8%
`11.9%
`
`12.4%
`
`11.5%
`
`12.2%
`10.7%
`
`9.0%
`
`10.3%
`
`10.4%
`
`10.5%
`9.7% 9.7%
`
`9.1%
`
`8.4%
`6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
`2015
`
`Week
`1
`
`3
`
`5
`
`7
`
`9
`
`11 13 15 17 19 21 23 25 27
`2015
`
`Week
`
`Weekly market share
`
`16.8%
`
`16.6%
`
`16.2%
`16.2%
`
`16.1%
`
`• Since launch of VYVANSE for BED in Q1, we
`have seen a steady increase in our above market
`performance resulting in YoY share growth
`
`• The ADHD “summer dip” has not been as steep
`as previous years
`
`• Set to execute in the back-to-school season while
`maintaining our adult momentum
`
`6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52
`
`Source: weekly IMS data
`End of Q2 is week 26
`
`7
`
`2013
`
`2014
`
`2015
`
`16.3%
`
`16.9%
`16.7%
`16.5%
`16.3%
`16.1%
`15.9%
`15.7%
`15.5%
`Week
`
`Page 7
`
`

`
`Leveraging Shire’s capabilities to
`grow GATTEX
`Three strategies for US sales growth
`
`GROWTH
`
`Patient
`Identification
`
`Patient
`Conversion
`
`Patient
`Persistence
`
`• US physician database analysed, segmented and prioritized based on probability of treating
`an SBS patient to better direct field efforts
`• Using existing Shire GI salesforce to improve awareness of SBS and identify eligible patients
`with prioritized physicians
`• Adding telesales support to cover lower priority targets
`
`• Legacy NPS GATTEX sales team dedicated to converting patient leads
`• Over 500 patients on therapy in US
`
`• New field based patient support role (Onboarding & Access Specialist/OAS) to aid with
`initiation of therapy
`• OAS also supports early experience with GATTEX
`
`International roll-out on track
`
`• Expanding footprint for GATTEX/REVESTIVE outside of the US using Shire’s international
`infrastructure
`• Final stages of Pricing & Reimbursement negotiations in France and Germany
`
`8
`
`Page 8
`
`

`
`Strong start for Natpara in the US
`
`GROWTH
`
`Launch
`
`• NATPARA launched in the US April 1, 2015
`
`• NATPAR submitted in EU December 2014; filing on track with estimated approval in Q1 2016
`
`Target
`physicians
`
`• Positive response from Endocrinologists to NATPARA
`• Over 70% of target US physicians REMS(1) trained (~1,900) as at end of June 2015
`• Approximately 260 physicians have submitted a patient referral form
`
`Salesforce
`
`• 50-strong specialist sales force in place
`
`• Successful launch meeting and promotion underway
`• Initial focus on REMS registration transitioning to patient finding and Rx generation
`
`Patients
`
`• Over 325 patient referral forms received as of end of June 2015; ~ 200 patients on therapy
`• Primarily new patients due to ongoing BID(2) post approval commitment study
`• Implementing enhanced patient access support to increase flow of patients from Rx to
`therapy
`
`(1) REMS: Risk Evaluation and Mitigation Strategy.
`(2) BID: twice daily.
`
`9
`
`Page 9
`
`

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

`
`Late stage pipeline poised to deliver
`
`INNOVATION
`
`Preclinical
`
`Phase 1
`
`Phase 2
`
`Phase 3
`
`Registration
`
`26 Research
` Programs
`
`TH / GCH1
`GenePod
` Parkinson’s Subset
`
`SHP608
`Dystrophic E.Bullosa
`
`
`SHP624
`Heme B Gene Edit
`
`
`SHP630
`adRP
`
`
`SHP628
`Renal Impairment
`
`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
`
`SHP607
`Prevention of ROP
`
`
`SHP609
`Hunter IT
`
`
`SHP610
`Sanfilippo A
`
`
`SHP616 (CINRYZE)
`Acute Antibody
`Mediated Rejection
`
`LDX (Japan)
`ADHD
`
`SHP620 (maribavir)
`CMV in transplant
`patients
`
`SHP625
`Primary Biliary Cirrhosis
`
`SHP625
`Progressive Familial
`Intrahepatic Cholestasis
`
`SHP625
`Alagille Syndrome
`
`SHP625
`Primary Sclerosing
`Cholangitis
`
`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
`
`NATPAR (EU)
`Hypoparathyroidism
`
`INTUNIV (EU)
`ADHD
`
`SHP606
`(lifitegrast)
`Dry eye disease
`
`Rare Diseases Programs
`
`Changes since Q1 2015
`• SHP631 has entered Phase 1 studies
`• SHP616 (CINRYZE) in PNH and SHP602 discontinued
`• Totality of SHP625 data being assessed; programs under review
`
`11
`
`Page 11
`
`

`
`Q2 2015 Pipeline updates
`
`INNOVATION
`
`SHP606
`(lifitegrast)
`Dry eye disease
`
`• Lifitegrast (SHP606) under FDA review for the treatment of the signs
`and symptoms of dry eye disease; PDUFA date October 25, 2015
`• No advisory committee meeting has been scheduled by FDA for
`the current review cycle
`• OPUS 3 on track for topline results in Q4 2015
`• Last patient first visit accomplished 6 weeks ahead of schedule
`• Our market research, with both physicians and patients, shows a
`significant medical need for a differentiated product in this category
`• Remain confident in totality of our data from existing development
`program of over 1,800 patients
`
`SHP465
`ADHD
`
`• First patient has entered the planned Phase 3 short-term efficacy and
`safety study in pediatric patients with ADHD (ages 6-17) ahead of
`schedule; study completion targeted for Q4 2016
`• FDA Class 2 submission expected by Q2 2017; anticipate a 6 month
`review time
`
`12
`
`Page 12
`
`

`
`Q2 2015 Pipeline updates
`
`INNOVATION
`
`SHP625
`ALGS/PBC/PFIC/PSC
`
`SHP620
`CMV
`
`• Phase 2 data received in three rare cholestatic liver indications (ALGS,
`PBC, PFIC); primary endpoints were not met
`• In some patients treated with drug there was a modest decrease in
`serum bile acid levels and a modest decrease in itch scores
`• Preliminary results of the interim analysis of the PFIC study
`demonstrated that in a subset of patients there was a profound
`decrease in serum bile acid levels, a significant decrease in itch score
`and in this subset of patients where there were elevated levels of
`biomarkers associated with liver damage at baseline there was a
`normalization of these biomarkers
`• We are currently considering the totality of data from these studies and
`what path forward, if any, there may be with SHP 625
`
`• In late June 2015 Shire conducted an end of Phase 2 meeting with the
`FDA and received further clarity on path forward
`• Based upon this feedback, Shire is considering progressing the program
`into Phase 3 in 2016
`
`13
`
`Page 13
`
`

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

`
`Financial Review
`
`Jeff Poulton, Chief Financial Officer
`
`Our purpose
`We enable people with life-altering conditions to lead better lives.
`
`Page 15
`
`

`
`Double digit product sales growth (excluding INTUNIV at
`CER(1)(2)(8)) and continued investment for future growth
`
`Product Sales
`
`Q2 2015
`$m(1)
`1,476
`
`Q2 2014
`$m
`1,470
`
`Reported
`Growth
`0%
`
`Product Sales excluding INTUNIV
`
`1,467
`
`1,370
`
`+7%
`
`CER(2)(8)
`
`+6%
`
`+12%
`
`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)
`
`82
`
`1,558
`
`654
`
`39%
`
`2.63
`
`505
`
`32
`
`+150%
`
`+159%
`
`1,502
`
`675
`
`+4%
`
`-3%
`
`44%
`
`-5% points
`
`2.67
`
`659
`
`-2%
`
`-23%
`
`+9%
`
`+1%
`
`+3%
`
`Note: US GAAP operating income
`
`133
`
`338
`
`-61%
`
`(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 (Q2 2015: $160m, Q2 2014: $523m).
`(4) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Net Income margin (Q2 2015: 10%, Q2 2014: 35%).
`(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 (Q2 2015: $0.81, Q2 2014: $2.66).
`(7) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Net Cash provided by operating activities (Q2 2015: $452m, Q2 2014: $834m).
`(8) See slide 34 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 Q2 2015 earnings release on pages 21 to 26.
`
`16
`
`Page 16
`
`

`
`Strong product sales growth in Q2 2015, up 12%
`(excluding INTUNIV and at CER(1)(3)(4))
`
`Product
`VYVANSE
`LIALDA/MEZAVANT
`ELAPRASE
`CINRYZE
`REPLAGAL
`FIRAZYR
`ADDERALL XR
`VPRIV
`PENTASA
`GATTEX(1)
`NATPARA(1)
`Other
`Total Product Sales
`excluding INTUNIV
`INTUNIV
`Total Product Sales
`GATTEX Pro-Forma
`Product Sales(2)
`
`Q2 2015
`$m(1)
`425
`158
`147
`139
`117
`104
`86
`85
`66
`37
`6
`97
`1,467
`9
`1,476
`
`Q2 2014
`$m
`360
`144
`152
`130
`131
`89
`100
`90
`63
`0
`0
`111
`1,370
`100
`1,470
`
`Reported
`Growth
`+18%
`+10%
`-4%
`+7%
`-10%
`+17%
`-14%
`-6%
`+5%
`n/a
`n/a
`-13%
`+7%
`-91%
`+0%
`
`CER
`Growth(3)(4)
`+20%
`+12%
`+9%
`+8%
`+4%
`+20%
`-13%
`+3%
`+5%
`n/a
`n/a
`-2%
`+12%
`-90%
`+6%
`
`37
`
`22
`
`+70%
`
`+72%
`
`INTUNIV generic entry held back reported
`product sales by $91m or 7%
`
`CER(3)(4): Core product sales up $171M or 12%
`
`$1,470m
`
`FX headwinds held back reported product
`sales by $74m or 5%
`
`$1,476m
`
`Q2 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 34 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 Q2 2015 earnings release on pages 21 to 26.
`
`TOTAL FX
`IMPACT
`
`Q2 2015
`
`17
`
`Page 17
`
`

`
`Robust H1 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)
`
`H1 2015(1)
`+4%
`+11%
`+6%
`+14%
`+11%
`
`H1 2014(1)
`+20%
`+21%
`-11%
`+7%
`0%
`
`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)
`
`H1 2015(1)
`
`H1 2014(1)
`
`85.9%
`15%
`29%
`42%
`
`85.4%
`14%
`27%
`44%
`
`(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 (H1 2015: +62%, H1 2014: +25%).
`(3) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is SG&A (H1 2015: +22%, H1 2014: +16%).
`(4) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Combined R&D and SG&A (H1 2015: +38%, H1 2014: +19%).
`(5) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Gross Margin (H1 2015: 84.3%, H1 2014: 81.8%).
`(6) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is R&D (H1 2015: 33%, H1 2014: 22%).
`(7) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is SG&A (H1 2015: 39%, H1 2014: 33%).
`(8) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Net income Margin (H1 2015: 19%, H1 2014: 26%).
`(9) Excluding Royalties and Other Revenues.
`(10) See slide 34 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 Q2 2015 earnings release on pages 21 to 26.
`
`18
`
`Page 18
`
`

`
`Strong Non GAAP cash generation(1)(3) of $0.5B in Q2 2015
`Non GAAP net debt(2)(3) of $2.25B at June 30, 2015
`
`June 30, 2015
`$m
`
`December 31, 2014
`$m
`
`Cash and cash equivalents
`Long-term borrowings
`Short-term borrowings
`Other debt
`Non GAAP Net (debt)/cash(2)(3)
`
`64
`(74)
`(2,230)
`(13)
`(2,253)
`
`2,982
`-
`(850)
`(13)
`2,119
`
`Non GAAP Cash
`Generation(1)(3)
`(53)
`
`505
`
`Tax and Interest paid, net
`
`(20)
`
`Capital expenditure
`
`Non GAAP Free Cash Flow(1)(3)
`
`432
`
`(50)
`
`(300)
`
`(110)
`
`Payments in respect of
`business combinations
`Net repayment of facility
`and term loans
`Dividend payment
`
`Other investing and financing
`
`18
`
`(2,918)
`
`(10)
`
`Net Cash outflow QTD
`
`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 (Q2 2015: $452m, Q2 2014: $834m).
`This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Cash and cash equivalents (June 30, 2015: $64m, December 31, 2014: $2,982m).
`See slide 34 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 Q2 2015 earnings release on pages 21 to 26.
`
`19
`
`Page 19
`
`

`
`Increased guidance for Non GAAP diluted earnings per
`ADS(2)(3) to growth in the mid-to-high single digits range
`Full Year 2015 Dynamics
`Direction Versus
`FY 14(1)
`
`CER Growth (3)(4)
`
`Impact of FX Rates
`on Guidance
`
`Guidance
`
`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 H1 2015
`actual exchange rates and the June 30, 2015 exchange
`rates holding for H2 2015 (implied full year rates of
`Euro:$1.12, £:$1.55, CHF:$1.06, CAD:$0.81). 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:
`
`High single digit
`growth
`
`Low teens growth
`
`-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%)
`
`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
`
`Guidance metrics
`increased since Q1 2015
`
`(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 34 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 Q2 2015 earnings release on pages 21 to 26.
`(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.
`
`20
`
`Page 20
`
`

`
`Summary
`
`Flemming Ornskov, MD, Chief Executive Officer
`
`
`Our purpose
`We enable people with life-altering conditions to lead better lives.
`
`Page 21
`
`

`
`Execution of strategy is delivering
`
`Continued execution
`
`✓ GROWTH
`
`✓
`
`EFFICIENCY
`
`✓
`INNOVATION
`
`✓
`
`PEOPLE
`
`Delivering results
` in 2015 …
`
`Investing for future growth
`
`Leveraging NPS assets
`
`Delivering
`growth in
`revenues and
`earnings
`
`…and beyond
`
`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
`
`22
`
`Page 22
`
`

`
`Questions and Answers
`
`Page 23
`
`

`
`APPENDIX
`
`Our purpose
`We enable people with life-altering conditions to lead better lives.
`
`Page 24
`
`

`
`H1 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)
`
`Note: US GAAP operating income
`
`2,873
`
`147
`
`3,046
`
`1,369
`
`42%
`
`5.47
`
`1,021
`
`607
`
`H1 2015
`$m(1)
`2,899
`
`H1 2014
`$m(1)
`2,778
`
`Reported
`Growth
`+4%
`
`2,595
`
`+11%
`
`CER(2)(8)
`
`+9%
`
`+16%
`
`71
`
`+106%
`
`+112%
`
`+12%
`
`+9%
`
`+13%
`
`2,849
`
`1,303
`
`+7%
`
`+5%
`
`44%
`
`-2% points
`
`5.03
`
`990
`
`645
`
`+9%
`
`+3%
`
`-6%
`
`(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 (H1 2015: $570m, H1 2014: $754m).
`(4) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Net Income margin (H1 2015: 19%, H1 2014: 26%).
`(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 (H1 2015: $2.88, H1 2014: $3.83).
`(7) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Net Cash provided by operating activities (H1 2015: $1,014m, H1 2014: $1,080m).
`(8) See slide 34 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 Q2 2015 earnings release on pages 21 to 26.
`
`25
`
`Page 25
`
`

`
`Q2 2015 Financial Ratios
`
`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)
`
`Q2 2015(1)
`0%
`+7%
`+14%
`+17%
`+16%
`
`Q2 2014
`+22%
`+23%
`-10%
`+10%
`+2%
`
`Q2 2015(1)
`
`Q2 2014
`
`86.0%
`16%
`31%
`39%
`
`84.7%
`14%
`27%
`44%
`
`(1) Results include NPS Pharmaceuticals Inc. in 2015 (acquired on February 21, 2015).
`(2) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is R&D (Q2 2015: +228%, Q2 2014: -8%).
`(3) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is SG&A (Q2 2015: +26%, Q2 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 (Q2 2015: +91%, Q2 2014: +10%).
`(5) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Gross Margin (Q2 2015: 84.6%, Q2 2014: 81.2%).
`(6) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is R&D (Q2 2015: 53%, Q2 2014: 16%).
`(7) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is SG&A (Q2 2015: 42%, Q2 2014: 34%)
`(8) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Net income Margin (Q2 2015: 10%, Q2 2014: 35%).
`(9) Excluding Royalties and Other Revenues.
`(10) See slide 34 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 Q2 2015 earnings release on pages 21 to 26.
`
`26
`
`Page 26
`
`

`
`Product sales – regional analysis
`
`Q2 2015
`Product Sales $m(1)
`% of Product Sales
`YoY Growth
`
`H1 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
`
`1,054
`72%
`+3%
`
`2,098
`72%
`+9%
`
`4,082
`70%
`+28%
`
`256
`17%
`-13%
`
`511
`18%
`-10%
`
`1,147
`20%
`+13%
`
`64
`4%
`+7%
`
`92
`3%
`+4%
`
`214
`4%
`+3%
`
`102
`7%
`+6%
`
`198
`7%
`+5%
`
`387
`6%
`+10%
`
`1,476
`100%
`0%
`
`2,899
`100%
`+4%
`
`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).
`
`27
`
`Page 27
`
`

`
`Royalties and Other Revenues
`
`SENSIPAR
`FOSRENOL
`3TC and ZEFFIX
`ADDERALL XR
`INTUNIV
`REMINYL & Other
`Royalties
`Other Revenues
`Royalties & Other Revenues
`
`Q2 2015(1)
`$m
`35
`11
`11
`7
`6
`9
`79
`3
`82
`
`Q2 2014
`$m
`
`0
`9
`8
`5
`0
`7
`29
`3
`32
`
`Reported
`Growth
`n/a
`+15%
`+27%
`+47%
`n/a
`+45%
`+171%
`-30%
`+150%
`
`(1) Results include NPS Pharmaceuticals Inc. in 2015 (acquired on February 21, 2015).
`
`28
`
`Page 28
`
`

`
`Shire inc