r;
`
`'.c:
`
`:.z y
`t
`
`Q3 2017 Res u its
`October 27, 2017
`
`Flemming Ornskov, MD, MPH —CEO
`Jeff Poulton —CFO
`Matt Walker —Head of Technics{ Operal
`
`Page 1
`
`SHIRE EX. 2052
`KVK v. SHIRE
`IPR2018-00290
`
`

`

`~
`
`o
`
`0
`
`Statements included herein that are not historical fads, including without limitation statements concerning
`future strategy, plans, objectives, expectations and intentions, the anticipated timing of clinical trials and
`approvals for, and the commercial potential of, inline or pipeline products, 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, the following:
`
`Shire's products may not be a commercial success;
`• increased pricing pressures and limits on patient access as a result of governmental regulations and
`market developments may affect Shire's 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 sties, ingredients or
`manufacturing processes could lead to, among other things, signficant delays, an increase in operating
`costs, lost product sales, an interruption of research activdies or the delay of new product launches;
`certain of Shire's therapies involve lengthy and complex processes, which may prevent Shire from timely
`responding to market forces and effectively managing its production capacity;
`• 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;
`• Shire's products and product candidates face substantial competition in the product markets in which it
`operates, including competition from generics;
`adverse outcomes in legal matters, tax audits 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 the Company's revenues, financial cond'Rion or results of operations;
`
`• inability to successfully compete for highly qualified personnel from other companies and organizations;
`• failure to achieve the strategic objectives, including expected operating efficiencies, cost savings,
`revenue enhancements, synergies or other benefits at the time anticipated or at all with respect to Shire's
`acquisitions, including NPS Pharmaceuticals Inc., Dyax Corp. or Baxalta Incorporated may adversely
`affect Shire's financial condition and results of operations;
`• Shire's growth strategy depends in part upon its ability to expand its product portfolio through external
`collaborations, which, rf unsuccessful, may adversely affect the development and sale of ds products;
`• a slowdown of global economic growth, or economic instability of countries in which Shire does
`business, as well as changes in foreign currency exchange rates and interest rates, that adversely
`impact the availability and cost of credit and customer purchasing and payment patterns, including the
`colledability of customer accounts receivable;
`• failure of a marketed product to work effectively or'rf such a product is the cause of adverse side effects
`could result in damage to Shire's reputation, the withdrawal of the product and legal action against Shire;
`• 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 sign cant legal costs
`and the payment of substantial compensation or fines;
`• Shire is dependent on information technology and fts systems and infrastructure face certain risks,
`including from service disruptions, the loss of sensitive or confidential information, cyber-attacks and
`other security breaches or data leakages that could have a material adverse effect on Shire's revenues,
`financial condition or results of operations;
`• Shire incurred substantial additional indebtedness to finance the Baxalta acquisition, which has
`increased its borrowing costs and may decrease its business flexibility; and
`
`a further list and description of risks, uncertainties and other matters can be found in Shire's most recent
`Annual Report on Form 10-K and in Shire's subsequent Quarterly Reports on Form 10-p, in each case
`including those risks outlined in "ITEM 1A: Risk Factors", and in subsequent reports on Form 8-K and
`other Securities and Exchange Commission filings, all of which are available on Shire's websde.
`All forward-looking statements attributable to us or any person acting on our behalf are expressly qualified
`in their entirety by this cautionary statement. Readers are cautioned not to place undue reliance on these
`forv✓ard-looking statements that speak only as of the date hereof. Except to the extent otherv✓ise required
`by applicahle law, we do not undertake any obligation to update or revise forward-looking statements,
`whether as a result of new information, future events or otherwise.
`
`~htire
`
`Page 2
`
`

`

`~ . QUat"t@Yly bUS111@SS ' ~~,
`~ - ~
`update
`
`Flemming Omskov, MD, MPH
`
`2. Financial review
`
`3. Manufacturing
`network review
`
`4. Summary and
`Q & A
`
`~-- -
`
`~K►
`
`--~
`
`''~;~/~:~~
`
`:
`
`.'
`
`C'SI11C~;
`
`Jeff Poulton
`
`Matt Walker
`
`Flemming Ornskov, MD, MPH
`
``mil
`
`K3
`
`Page 3
`
`

`

`u
`
``~
`
`Rare
`1 Disease
`Leader
`
`Strong
`2 Immunology
`Franchise
`
`Innovative, rare disease-focused biotech committed to
`differentiated and high patient-impact medicines
`
`With the addition of Baxalta, Immunology is now the fastest
`growing franchise
`
`3 Robust R&D
`Pipeline
`
`~40 programs in clinical development including 17
`currently in Phase 3 trials; expected to be key drivers for
`future growth
`
`~~ i'
`
`4
`
`Page 4
`
`

`

`~.J
`
`• Achieved quarterly product sales
`of $3.5B
`- An increase of 7% from Q3 2016
`• Delivered Non GAAP diluted
`earnings per ADS of $3.81 ~'>~3~
`- An increase of 20°/o from Q3 2016
`• Continued advancement of our
`innovative late-stage clinical portfolio
`(e.g., MYDAYIS, SHP643, SHP555)
`
`• Baxalta integration continues to track
`ahead of plan
`
`• $920MM reduction in Non GAAP net
`debt~3> in Q3 2017
`
`Non GAAP EBITDA margin
`of 44%(Z)(3)
`
`Manufacturing network review has
`identified >$100MM in expected
`additional annual savings beginning
`in 2019 and expected to increase to
`$300MM annually by 2023
`
`o On track to meet our 2-3x Non GAAP
`net debt /Non GAAP EBITDA target
`by end of 2017~3>
`
`• Strategic review of Neuroscience
`franchise on track to read-out by
`year-end
`
`(t j This is a Non GAAP Fnancial measure. The most directly comparable measure under US G/WP is Diluted EPS-ADS (Q3 2017: $1.81).
`
`~S~ire (2} This is a Non GAAP financial measure as a percentage of total revenue. The most directly comparable measure under US GAAP is Net Income Margin (Q3 2017: 15 kj.
`
`{3j See slide 99 for a list of dems excluded from the US 6AAP equivalent used fo calculate alt Non GAAP measures detailed above. See slides 33 to 38 for a reconciliation of Nan GAAP financial
`measures to the most directly comparable measure under US GAAP.
`
`rJ
`
`Page 5
`
`

`

`PRODUCT SALES ($MM)
`
`FINANCIAL HIGHLIGHTS
`
`Q3 2017
`
`Q3 2016
`
`3,534
`
`3,315
`
`NON GAAP DILUTED EARNINGS PER ADS~~>~2~
`
`-- ----
`
`$3.81
`
`1',
`
`$3.17
`
`Q3 2017
`
`Q3 2016
`
`• Product sales of $3.5B and 7% growth
`• Total revenues of $3.7B and 7% growth
`• Non GAAP diluted earnings per ADS
`growth of 20%~2~
`• Net cash provided by operating activities grew
`101 % to $1,055MM
`
`tr1~r1,. S'/ ~ (1) This is a Non GAAP financial measure. The most directty comparable measure under US GAAP is Diluted EPS-ADS (43 2017: 51.81; D3 2016: ~1.29j.
`{2} See slide 39 for a list of items excluded from the US GAAP equivalent used to Calculate all Non GAAP measures detailed above. See slides 33 to 38 for a reconciliation of Non GAAP financial
`measures to the most directly comparable measure under US GAAP.
`
`0
`
`Page 6
`
`

`

`$MM
`
`Growth (%~ Key Products
`
`Hematology
`
`I mmunology
`
`Neuroscience
`
`Genetic Diseases
`
`Internal Medicine
`
`351
`
`77
`
`69
`
`Ophthalmics
`
`Oncology
`
`Global Total
`~r~
`
`916
`
`802
`
`691
`
`628
`
`-.t..
`
`~~,
`
`•
`
`~
`
`.,-
`sn~+acaeouai„~
`CUV1tru
`R~'~+
`~~,a~m.. Gk6ufia~~vw~U~w~~,P~ ~t
`
`ae~.~acm~
`~l~i~Hwre~,.:d.:j
`
`~~,~j ~~
`
`•t1~'Yv~►~o
`
`intuniv
`~+~M
`"»K
`
`~~Mydayis~c
`FYS :~..
`
`GNttYzE r e ~~razyr" elaprase
`
`~ ,
`
`Cit~ldc~`
`
`Ge~tto~r
`"efu~eiENcsdbK:an
`
`~Natpara~
`~ ,~„v.A.~
`h,;,~,a,
`
`iidra-
`-~~~` ..
`onivyde
`::iE
`onca"spar ~`►,,,~„~.,,,,,~
`
`
`~. ,
`._1
`
`+7%
`
`3,534
`
`7
`
`Page 7
`
`

`

`~/
`
`Global Immunology Revenues, $B
`
`__._
`
`~ . -......~.~~'"'
`
`..►"~'
`2.2
`
`Sep YTD
`2015
`
`Sep YTD
`2016
`- -
`
`.
`
`Sep YTD
`2017
`
`GAMMAGARd~,dl~tAd CUtll~~'U ~~QVIQ ~~ ~~E.'*.`'-'At't'It
`
`r
`
`shire (1} Recast pra for?ra revenues folicwing Shire s acquisition of Baxalta or Jure 3 20?5
`
`Key Growth Drivers
`Market penetration
`— Growing diagnosis rate
`— Rising standard of care
`Geographic expansion
`Play-to-win strategy
`— Improved contracting strategy —hospital
`contracting focused on broader portfolio
`— Tenders —reentering countries with full portfolio
`Demand for subcutaneous delivery
`— HYQVIA and CUVITRU, combined, grew ~75%
`in Q3 2017 YoY
`Strong long-term fundamentals
`— Generally not subject to typical pharmaceutical
`sales erosion following patent expiry
`— Strong plasma collection and fractionation
`capabilities
`
`0
`
`Page 8
`
`

`

`Launch curve~~~ (Total RXs)
`
`2,500
`
`2,000
`
`1 , 500
`
`1, 000
`
`500
`
`0
`
`9/1
`
`9/8
`
`9115
`
`9/22
`
`9/29
`
`Positive community
`feedback~2~
`
`'"~~% of Early
`Experience Program
`Prescribers would
`recommend /prescribe
`MYDAYIS to
`appropriate patients
`
`'"7~% of Early
`Experience Program
`patients indicated high
`satisfaction scores
`related to product
`efficacy
`
`{1 j IMS PlanTrak` and Connective Rx redemption data from approval to October 17, 2617.
`t~~~~/~ 1~~
`(2j Shire market research Sept 2D17. Early Experience Program included -5,000 patients and -3.000 physicians with access to MYDAYIS prior to its official launch on August 28, 2017.
`" IMS data IMS information is an estimate derived from fhe use of information under license from the following IMS Health Information service: IMS PlanTrak. IMS expressly reserves all rights including rights
`of copying, distribution and republication,
`
`g
`
`Page 9
`
`

`

`Context:
`s Sole 3~d party manufacturer with historic difficulties producing enough product to meet patient demand
`Further manufacturing interruption led to product shortages, starting in August 2017
`
`Resolution:
`• 3~d party manufacturer has addressed the issue and resumed production in September 2017
`• Due to timing of FDA release of previously produced CINRYZE, planned Q3 US supply
`of~$100MM was shipped in October instead of September
`o FDA has accepted an application to enable a second source of production at Shire's in-house
`manufacturing facilities
`- Subject to FDA approval, we expect production to begin in early Q1 2018
`• CINRYZE supply could be tight until a second source has been approved and we can build inventory
`
`m
`
`Page 10
`
`

`

`• MYDAYIS (ADHD) launch in U.S.
`o Lifitegrast (Dry Eye Disease) submission for
`approval in Europe (Decentralized Procedure
`validated by UK as Reference Member State)
`New Formulation of ONCASPAR (acute
`lymphoblastic leukemia) positive CHMP opinion
`in Europe
`SHP654 (Hemophilia A) awarded Orphan Drug
`Designation by FDA
`
`Remain on target to file for FDA approval for
`both SHP555 (chronic constipation) in late 2017
`and SHP643 (HAE) in late 2077 —early 2018
`
`• SHP616 (HAE —subcutaneous) positive
`Phase 3 results
`o INTUNIV (ADHD) positive Phase 3 results in
`adult patients with ADHD in Japan
`o SHP607 (prevention of chronic lung disease
`in extremely premature infants) granted Fast
`Track Designation by FDA
`
`11
`
`Page 11
`
`

`

`~. Quarterly business
`update
`
`'~" ` Flemming Ornskov, MD, MPH
`~,~ ~
`
`2. Financial review
`
`_~`,
`R~ =
`~k ~'i
`
`Jeff Pouitor,
`
`3. Manufacturing
`network review
`
`4. Summary and
`Q &a
`
`~~t~~~~
`
`-
`/.~►
`
`Matt Walker
`
`Flemming Omskov, M~, MPH
`
`12
`
`Page 12
`
`

`

`Q3 2Q17 $MM Q3 2016 $MM Reported Growth CER Growth~'~~'~
`
`Product sales
`
`Royalties and other revenues
`
`Total revenue
`
`Non GAAP combined R&D and SG&A~2~~'~
`
`Non GAAP EBITDA~3~~'~
`
`Non GAAP EBITDA margin~4~~'~
`
`Non GAAP effective tax rate~5~~'~
`
`Non GAAP diluted EPS — ADS~6~~'~
`
`_ _
`
`Net cash provided by operating activities
`
`3,534
`
`164
`
`3,698
`
`1,212
`
`1,618
`
`44%
`
`15%
`
`3.81
`
`1,055
`
`3,315
`
`137
`
`3,452
`
`1,239
`
`1,347
`
`39%
`
`13%
`
`3.17
`
`526
`
`+7%
`
`_ . _
`
`+20%
`
`+700
`
`-2%
`_____
`+20%
`
`5 ppc
`
`n/a
`
`+20%
`
`+101 %
`
`+6%
`
`+19%
`
`+goo
`
`-3%
`
`+19%
`
`n/a
`
`n/a
`
`+19%
`
`n/a
`
`(i) Growth rates are at Constant Exchange Rates ("CER";, a Non GAAP financial measure. CER performance is determined by comparing 2017 performance (restated using 2016 exchange rates for the relevant period) to actual 2015
`reported performance.
`t2} This Is a Non GAAP financial measure. The moss diredty comparable measure under US GAAP is Combined R8D and SGBA {p32017. $1.263m. Q32016: $1,387m}.
`i3) This is a Non GAAP financial measure. The most directty comparable measure under US GAAP is Nei Income {Q3 2017 $551 m Q3 2016 -~387m).
`(4'~ This ~s a Non GAAP financial measure as a perce~fage of total revenue. The most directly comparable measure under US GAAP is Net Income Margin (Q3 2017: 15%, d3 2016: -11 %J.
`(5) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Effieclive Tax Raie (43 2017: 2%, Q3 2016' ~8%).
`{6} This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Qiluted EPS-AOS (Q3 2017. $1.81, D3 2016. -$1 29).
`!7j See slide 39 for a list of items excluded fiam the US GAAP equivalent used to calculate all Non GAAP measures detailed above See slides 33 to 38 for a reconciliation of Non GAAP financial measures to the most direMly
`comparable measure under US GAAP.
`
`13
`
`Page 13
`
`

`

`_. _ _-, d.-
`
`$MM
`Hemophilia
`Inhibitor Therapies
`Hematolo Total_
`Immunaglobulin Therapies
`Bio Therapeutics
`_ _~. __.__
`_ _
`Immunology Total
`_~_ ,,
`VYVANSE
`ADDERALL XR
`MYDAYIS
`Other Neuroscience
`Neuroscience Total
`FIRAZYR
`ELAPRASE
`REPLAGAL
`VPRIV
`CINRYZE
`KALBITOR
`Genetic Disease Total
`LIALDAIMEZAVANT
`GATTEX/REVESTIVE
`PENTASA
`NATPARA
`Other internal Medicine
`- --______
`Internal Medicine Total
`Ophthalmics
`O(1Cology
`Total Product Sales
`
`_ ___
`
`~. —_._.
`
`U.S.
`358
`71
`428
`487
`86 _
`573_
`477
`99
`10
`7
`593
`174
`41
`-
`38
`46
`16
`315
`61
`73
`72
`39
`12
`257
`77
`47
`2,291
`
`Q3 2017 Sales
`international
`368
`120
`488
`119
`110
`229_
`62
`7
`-
`30
`98
`22
`112
`117
`52
`11
`-
`313
`25
`12
`-
`-
`56
`_ a~r_..___ ~
`94
`-
`21
`1,243
`
`___.__
`
`~ _.._._
`
`__
`
`---
`
`._~._,Tr.
`_
`
`-_
`
`_
`
`Total
`725
`_ 191
`916
`~-°- - _
`605
`197
`SQ2
`538
`106
`10
`37
`691
`_---
`196
`153
`117
`90
`57
`16
`628
`87
`85
`72
`39
`68
`351
`77
`69_.
`3,534-
`
`- __
`
`__
`
`Reported
`+3%
`+5°l0
`+4%
`+28°/a
`+47%
`+32%
`_
`+5~/a
`+32%
`N!A
`+56%
`+12%
`+34%
`+4%
`-1 %
`+2%
`-66%
`+44%
`-7°/0
`-58%
`+46%
`-16%
`+68%
`—. -22%
`-24°/a
`NiM
`+24°/a
`+7%
`
`..s
`
`___ ...
`
`___
`
`Growth vs. Q3 2016
`CER~'~~2~
`+3%
`+4%
`+3%
`+28%
`__ +45%
`+32°l0
`+5%
`+32%
`N/A
`+53%
`+12%.-
`+33%
`+1 °lo
`-4%
`+~°/v
`-66%
`+44°/a
`-8%
`-59%
`+45%
`-16%
`+68%
`-24%
`---
`-25%
`N!M
`+22°/a
`+67L
`
`..
`
`_ . _-
`
`__
`
`_..r
`
`~~;
`
`
`
`~/ i~
`
`(1) Growth rates are at Constant exchange rates ("CER j. a Non GAAP financial measure. CER performance is determined by comparing 2017 performance (restated using
`performance.
`to actual 2016 reported
`relevant period}
`
`for the 2016 exohange rates
`used to calculate all Non GAAP measures detailed above. See slides 33 to 38 for a reconciliation of
`(2j See slide 39 for a list of items excluded from the US GAAP equivalent
`Non GAAP financial measures to the most directly wmparabie measure under US GAAP.
`
`14
`
`Page 14
`
`

`

`Year on Year Growth:
`
`YTD 2017~~~
`
`Product sales
`Non GAAP R&D~Za~9}
`---
`Non GAAP SG&A~3~~9>
`Combined Non GAAP R&D and SG&A~a~~s~
`
`----
`
`___
`
`45%
`
`29%
`
`30%
`
`30%
`
`Ratios: As % of Totai Revenue
`Non GAAP gross margin~5~~s>
`Non GAAP R&D~s>~9>
`
`Non GAAP SG&A~~>~9~
`
`Non GAAP EBITDA~$~t9~
`
`YTD 2017t~~ YTD 2016~~~
`
`77%
`
`10%
`
`23%
`
`44%
`
`79%
`
`12%
`
`26%
`
`42%
`
`___
`
`(1 } Results include 8axalta (acquired on June 3; 2016} and Dyax (acquired on January 22, 2015).
`{2j This is a Non GAAP fnanciai measure. The mast directly comparable measure under US GAAP is R&D ;YTD 2Gt 7: +Z9%}.
`{3j This is a Nor. GAAP financial measure The most directly comparable measure under US GAAP is SG&A {YTD 2017: +31 %).
`{4) This is a Non GAAP iinanciai measure. The most directly comparable measure under US GAAP is Combined R8D and SG&A (YTD 2017. +30%j
`{5) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Gross Margin (YTD 2017: S9%; YTD 2016: 64%).
`t8j This ~s a Non GAAP financial measure. The most directly comparable measure under US GAAP is R8~ tYTD 2017: 12~, YTD 2016: 13%)
`(7} This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is SG&A lYTD 2017: 24 f YTD 201fi: 27%}.
`;~'~~
`This is a Non GAAP financial measure. The most directly comparable measure urWer US GAAP is Net Income Margin (Yf 6 2017. 11%, YTD 2016: -2%j
`iSj
`t/~irF/ ~~1 ~ 19) See side 3S for a list of items exGudecl from the US GAAP equivalent used to calwiate ail Non GAAP measures detailed above See slides 33 to 38 for a reconciliation of
`Non GAAP financial measures to the most directly comparable measure under US GAAP.
`
`15
`
`Page 15
`
`

`

`2017 Non GAAP Net Debt Progression
`
`Q3 2017 Cash Fiow $MM
`
`$MM
`
`Jun 34,
`2017
`
`Sep 30,
`2017
`
`Q3
`Change
`
`Dec 37,
`2016
`
`YTD
`Change
`
`Net cash provided by
`operating activities
`
`1,055
`
`Cash and cash equivalents
`
`264
`
`209
`
`(55)
`
`529
`
`(320)
`
`Long term borrowings
`
`18,011
`
`17,614
`
`Short term borrowings
`
`3,198
`
`2,622
`
`Capital leases
`
`351
`
`349
`_ _
`
`19,553
`
`3,062
`
`354
`_ _
`
`Total borrowings, capital leases,
`and other debt
`
`21,560
`
`20,585
`
`(975)
`
`22,969
`
`(2,384)
`
`Non GAAP net debt~3~
`
`21,296
`
`20,376
`
`(920)
`
`22,439
`
`(2,063)
`
`Leverage at September 3Q, 2017
`Non GAAP net debt /Non GAAP EBITDA ratio~2~~3~ 3.2x
`
`(174)': Capital
`expenditure
`
`Payments relating to ~ 20
`license arrangements
`
`Non GAAP free cash flow~~x3► ~ 901
`
`(987) -; Debt pay down
`
`Other investing and financing
`
`31
`
`!1 }This is a Non GARP financial measure. The most directly wmpareble measure under US
`GAAP is Net cash provided by operating activities (Q3 2017. $t,O55m}.
`,,~'y~
`~f ~~ ■N ~ {2} Non GAAP EBITDA on a trailing 72 month basis to September 3q 2017.
`(3j See slide 39 for a list of items excluded from the US GAAP equivalent used io caVculate all
`Non GAAP measures detailed above See slides 33 to 3B for a reconciliation of Non GAAP
`financial measures to the most directly comparahle measure under US GAAP.
`
`(55)
`
`'' Net Cash Outflow
`
`16
`
`Page 16
`
`

`

`u
`
`Full year 2017 dynamics
`Impact of FX rates on
`Current guidance as
`updated at Q2 guidance
`
`Product Sales
`
`Royalties &other revenues
`
`Non GAAP gross margin~~~
`Non GAAP combined R&D and SG&A~'►
`Non GAAP depreciation~~►
`Non GAAP net interest/other~'►
`Non GAAP effective tax rate~'~
`Non GAAP diluted earnings per ADSt~~
`Capital Expenditure
`
`$14.3 - $14.6 billion
`
`$600 - $700 million
`
`___
`
`74.5% - 76.5°/a
`$4.9 - $5.1 billion
`$450 - $500 million __
`$500 - $600 million
`16% - 17%
`$14.80 - $15.20
`$800 - $900 million
`
`__
`
`—0%
`
`_
`
`__.
`
`—0%
`
`The FX impact on guidance is based on September 18th. 201 i actual
`exchange reles (£.$1 19524, £:$1.34885; CHF$1.04004,
`CA0 $4.81265, ~E:$0.00857j. The estimated impact of a 10%
`appreciation in the US Dollar against the respective currency, over the
`remainder of the year, on our 2017 Guidance is as follows
`
`EUR
`GBP
`CHF
`_CAD
`JPY
`Otl~x
`
`Revenue
`-1.5%
`-02%
`-0.1%
`-02°6
`_
`_
`-0.2%
`-0.5%
`
`_. .
`
`Earnings
`-0.6%
`-0.4%
`0.1%
`-0.5% __ u---
`_
`0.4%
`-0.2%
`
`1~;~~~ (1 j See slide 39 for a Est of ttems excluded from the US GAAP equivalent used to calwlata all Non GAAP measures detailed above. See slides 33 to 36 for a rewnciliation of Non GAAP
`financial measures to the most directly comparaCle measure under US GAAP.
`
`~ 7
`
`Page 17
`
`

`

`C
`
`~ .Quarterly business
`update
`
`',
`
`Flemming Ornskov, MD, MPH
`
`2. Financial review
`
`Jeff Poulton
`
`~~
`
`__
`
`3. Manufacturing
`network review
`
`Matt Walker
`
``'~
`/'~~`
`
`4. Summary and
`Q &A
`
`, :~,
`
`Flemming Ornskov, MD, MPH
`/j
`
`C lll'~
`
`18
`
`Page 18
`
`

`

`~
`
`fl
`
`7 manufacturing sites across
`US, Europe and Asia
`
`Examples: ADVATE,
`ELAPRASE and VPRIV
`
`8 manufacturing sites and
`100+ BioLife Collection Centers
`across US and Europe
`Examples: GAMMAGARD,
`CUVITRU and ALBUMIN
`
`Outsourced manufacturing
`Examples: VYVANSE and MYDAYIS
`
`~ ~~
`
`Manufacturing
`facilities
`(17 post integration of Baxalta)
`
`Employees
`
`~ ,
`
`External strategic
`partners
`
`19
`
`Page 19
`
`

`

`0
`
`0
`
`0
`
`Initiatives
`
`MOdet'tlize: 3 additional sites to be divested based on utilization
`(biologics, not plasma); new site builds continue; investment in
`remaining sites
`POSittOn f01' gr'Owth: Continue with plasma production
`expansion at Covington. Site adds ~30% capacity starting in
`2018 and new plasma collection sites opening to meet demand
`
`Enhance CapabilltieS: Focus sites on clear roles to further
`enhance core capabilities and improve efficiencies (e.g., gene
`therapy, devices, launch capabilities)
`
`~hir~
`
`Page 20
`
`

`

`Expected annual savings to COGS to exceed $100MM by 2'19 and
`reach $300MM by 2~23~~~
`
`$300MM in savings
`by 2023
`
`Peak savings of
`$350MM
`by 2027
`
`>$100MM in savings
`by 2019
`
`Page 21
`
`

`

`1. Quarter) business
`y Flemming Ornskov, MD, MPH
`~~%~~`
`update
`
`2. FlnatlClal C@VI@W
`
`3. Manufacturing
`network review
`
`,
`
`~
`~=,~~
`
`~~~
`
`~~iF7~
`
`Jeff Poulton
`
`Matt Walker
`
`4
`4. Summary and
`Q & Q ,~ ;
`
`Flemming Ornskov, MD, MPH
`
`t~l
`
`~,
`
`22
`
`Page 22
`
`

`

``~~J
`
`4 Delivered solid sales and Non GAAP EPS growth,
`despite CINRYZE and LIALDA headwinds, driven
`by rapidly growing Immunology business
`
`• Reiterated full year 2017 financial guidance
`
`Executed strong launch of MYDAYIS
`
`Advanced late stage clinical pipeline
`
`g Identified additional annual manufacturing
`network efficiencies
`
`Q Continued to pay down debt
`
`Finalize FDA filings of SHP643 and SHP555
`
`o Stabilize supply of CINRYZE
`
`Q Drive continued product sales growth across
`the portfolio
`
`e Recruit for open executive leadership positions
`
`a Read-out of Neuroscience franchise strategic
`review
`
`23
`
`Page 23
`
`

`

`
`
`
`
`Page 24
`
`

`

`tt
`
`•
`
`
`
`APPENDIX APPENDIX
`
`
`
`£hire£hire
`
`
`
`2525
`
`Page 25
`
`

`

`We focus our innovation across areas with high unmet medics! need
`
`We aim to expand our rare disease expertise and offerings through
`research and partnerships, and to extend our existing portfolio of products to
`new indications and therapeutic areas
`
`o-o
`
`~./
`
`o ~
`
`STAGE
`
`NUMBER OF
`PROGRAMS
`
`Phase 1
`7
`
`Phase 2
`9
`
`~
`
`\a
`
`Phase 3
`17
`
`~a ~
`
`Registration
`5
`
`c~
`
`Recent approvals
`6
`
`~~, ~~ Pipeline as of Ociober 2017.
`
`26
`
`Page 26
`
`

`

`J
`
`~
`
`'~%
`
`SHP634 (HPT)
`Filing
`
`SHP609
`(Hunter IT)
`Phase 3 data
`
`SHP503 (ADHD)
`Japan Approval
`
`SHP673
`(L2PaCa) Japan
`Top Line Data
`
`Top i_inc Data and tha results were not supportive of continued davealopment.
`(' t
`~2; Anticipated dato subject to ongoing discu=_sions with EMA.
`Remain on target to itle for FDA approval in !ate 2017 —early Z~"=.8
`(3i
`Nate' Timings are approximated to the nearest quarter and vfiere app~opria".e subject to regulatory approval.
`
`,/ =milestone met
`3 =milestone met but
`not advancing
`
`n Anticipated clinical trial
`
`results
`r ~-s Regulatory filing or
`~- ~ anticipated approval
`
`z7
`
`Page 27
`
`

`

`'~J
`
`'`~'
`
`i~
`
`__~
`
`~NTUNIV—Japan
`(ADHD)
`_.
`
`SHP489-Japan
`~ADHD)
`LCM for VYVANSE
`
`SHP555—US
`(Chronic Constipation)
`__
`
`SHP640
`
`Conjunctvitis)
`_
`
`SHP643~'~
`Prophylaxis)
`(HAE
`
`SHP660~^~—EU
`(Hemophilia A)
`LCMlorADYNOVATE
`
`XIIDRA — US
`(Dry eye)
`
`SHP609
`(Hunter I~
`Ph 213
`
`SHP616 — Ja anP
`(HAE Prophylaxis)
`LCM/wCINRYZE
`
`SHP676 SC
`{HAE Prophylaxis)
`LCMIorCINRYZE
`
`SHP616
`~~R~
`LCMforCwRrzE
`
`SHP620
`(CMV infection in
`transplant patients)
`
`SHP621~3~
`(EoE)
`
`SHP633—Japan
`(Adult SBS)
`LCMforGA77DC
`
`SHP647
`~~~~
`
`SHP647
`~~p~
`
`SHP655
`~~~P~
`
`SHP663
`(ALL)
`
`SHP671
`(CIDP)
`LCM for HYQVIA
`
`SHP671
`(Pediatric PID)
`LCMforHYOVfA
`
`SHP672
`(CHAWI SurgBry)
`LCM for OBIZUR
`
`SHP667
`(PediaVic HAE)
`LCMlorF1RAZYR
`
`SHP667 -Japan
`(~E)
`- LCM/orFlRAZYR
`
`SHP677
`~p~
`LCMforvoNVENDI
`
`MYDAYIS— US
`(ADHD)
`—"~""""`~"'""`
`
`NATPARA — EU
`(Hypoparathyroidism)
`
`CINRYZE
`(pediatric HAE
`Prophylaxis)
`
`GATTEX
`(Pediatric SBS)
`
`~ Rare indication
`-
`
`Non-rere indication
`
`28
`
`35+ programs
`
`SHP611
`~MLD)
`
`SHP607~2~
`(BPD andIVH)
`
`SHP652 SM101)~5~
`t
`(SLE)
`
`• Internally
`developed and via
`partnership
`
`• Both rare disease
`ands ecialt
`P Y
`CO(1dItIOfiS
`
`• Multiple modalities
`including NCEs,
`proteins,
`MAbs,
`and gene therapy
`
`SHP631
`(Hunter CNS)
`
`SHP615-Japan
`(Seizures)
`LCM/o~BUCCOLAM
`
`SHP659
`(Dry Eye)
`
`SHP673 - Japan~~~
`(Pancreatic Cancer,
`postgemcitabine)
`LCMIorONIW'DE
`
`SHP673
`(Pancreatic Cancer,
`~=~ i;~e~
`LCM /orONIVYDE
`
`SHP634 —Japan
`(Hypopa2thyroidism)
`LCMforNATPARA
`
`;3~
`SHP625
`~PF~~~
`
`SHP639
`(Glaucoma)
`
`SHP625
`(ALGS)
`
`SHP654
`(Hemophilia A, Gene
`Therapy)
`
`SHP626
`(NASH)
`
`SHP673
`(Small Cell Lung
`Cancer, 1~' Line)
`LCM /or ON/VYDE
`
`SHP680
`(Neurological
`Conditions)
`--------,
`'
`Programs terminated in Q3 2017 ~
`,
`~ • SHP623 NMO
`'------------------------~
`
`~~~~
`
`Pipeline as of Oa 2017
`
`Pipeline excludes Oncaspar lyophilized, and Alpha-1 prophylaxis.
`!1) Registrational study' (2) SHP607 originally developed (or ROP; (3i Granted breakthrough
`designation by FDA: ;4'~ Aproved in U S fior on-demand, prophylaxis in aduks and children and in
`perioperative management ~Sj Working closely with the FDA to resolve their questions.
`Note' Phase 2!3 programs shown as Phase 3.
`Ttrs slue rttay no! he copied. /~ub!ished or used rn arry !vay, without prior : ~~rrften agreementfrom S:iire.
`
`Page 28
`
`

`

`L_J
`
`1. Organic growth -Invest in innovation to support core franchises
`2. Reduce leverage -Maintain an investment grade credit rating
`
`3. Dividends - Maintain a progressive policy
`
`4. Surplus capital
`o Selective business development -Focus on in-licensing and
`bolt-on opportunities
`Share buybacks - To be considered
`
`~~
`
`Page 29
`
`

`

`Q3 2017
`
`Product Sales $MM
`
`of Product Sales
`
`YoY Growth
`
`YTD 2017
`
`Product Sales $MM~'>
`
`of Product Sales
`
`Pro forma YoY Growth~2~
`
`US
`
`2,291
`
`65%
`
`2%
`
`US
`
`6,950
`
`66%
`
`7%
`
`EU
`
`664
`
`19%
`
`9%
`
`EU
`
`1,874
`
`18%
`
`3%
`
`LATAM
`
`APAC~3~
`
`Other
`
`140
`
`4%
`
`5%
`
`224
`
`6%
`
`37%
`
`215
`
`6%
`
`27%
`
`Total
`
`3,534
`
`7%
`
`LATAM
`
`APAC~3~
`
`Other
`
`Total
`
`482
`
`5%
`
`16%
`
`623
`
`6%
`
`23%
`
`10,538
`
`609
`
`6%
`
`13% 8%:
`
`5h~re (Z) Growth rates represent YTD 2477 reported sales compared to recast pro forma 2016 sales following Shire's acquisition of Baxalta on June 3, 2016.
`
`(S) Results include 6axalta (acquired on June 3. 2016) and Dyax (acquired on January 22 2016]
`
`(3) APAC region includes Japan.
`
`~~~,
`
`Page 30
`
`

`

`'~J
`
`SENSIPAR
`
`3TC and ZEFFIX
`
`FOSRENOL
`
`ADDERALL XR
`
`Other Royalties
`
`Royalties
`
`Other Revenues
`
`Contract Manufacturing Revenue
`
`Total Royalties 8~ Other Revenues
`
`Q3 2017
`$MM
`
`Q3 2016
`$MM
`
`Reported
`Growth
`
`43
`
`16
`
`14
`
`8
`
`31
`
`111
`
`7
`
`46
`
`164
`
`39
`
`16
`
`14
`
`5
`
`19
`
`92
`
`6
`
`39
`
`137
`
`+11
`
`-1%
`
`+4%
`
`+64%
`
`+65%
`
`+21
`
`+7%
`
`+18%
`
`+20%
`
`► 1_ __
`
`31
`
`Page 31
`
`

`

`~1
`
`$MM
`
`Total Product Sales
`
`versus prior year
`
`Royalties &Other Revenues
`
`versus prior year
`
`Total Revenue
`
`versus prior year
`
`2D16
`Q1~'~
`
`2Q16
`Q2~~~
`
`$1,627
`
`$2,322
`
`+14%
`
`$82
`
`+26%
`
`$1,709
`
`+~5%
`
`_ _
`
`+57%
`
`$107
`
`+31%
`
`$2,429
`
`+57%
`
`__
`
`2016
`Q3~'~
`
`$3,315
`
`+110%
`
`$137
`
`+75%
`
`$3,452
`
`+109%
`
`2016
`Q4~'~
`
`$3,621
`
`+123%
`
`$185
`
`+101%
`
`$3,806
`
`+~Q2/
`
`2076
`FY~~~
`
`$10,886
`
`+78%
`
`$511
`
`+61%
`
`2D17
`Q1~~~
`
`$3,412
`
`+110%
`
`$160
`
`+g5/
`
`$11,397
`
`$3,572
`
`+78%
`
`+i09%
`_ _
`
`2017
`Q2~'~
`
`2017
`Q3{~~
`
`$3,592
`
`$3,534
`
`+55%
`
`$154
`
`+44%
`
`$3,746
`
`+54%
`
`+7%
`
`$164
`
`+20%
`
`$3,698
`
`_ _
`
`Non GAAP Gross Margin~z~~~
`
`Combined Non GAAP R&D and SG8A~3~~T~
`
`versus prior year
`
`--
`Non GAAP EBITDA Marginla~~
`
`Non GAAP Tax Rate~s~~~~
`
`Non GAAP diluted Earnings perADS~6~~'~
`
`versus prior year
`
`86.7%
`
`$651
`
`+14%
`
`49%
`
`16%
`
`$3.19
`
`+12%
`
`80.4%
`
`$934
`
`+34%
`
`42%
`
`16%
`
`$3.38
`
`+29%
`
`74.9%
`
`$1,239
`
`+g0%
`
`39%
`
`13%
`
`$3.17
`
`-2%
`
`75.3%
`
`$1,354
`
`+g7%
`
`40%
`
`17%
`
`$3.37
`
`+13%
`
`78.0%
`
`$4,178
`
`+60%
`
`41%
`
`16%
`
`$13.10
`
`+12%
`
`78.3%
`
`$1,221
`
`+88%
`
`44%
`
`16°/a
`
`$3.63
`
`+14%
`
`76.1%
`
`$1,237
`
`+32%
`
`43%
`
`16%
`
`$3.73
`
`+10%
`
`+7%
`__
`76.5%
`
`$1,212
`
`-2%
`
`44%
`
`15%
`
`$3.81
`
`+20%
`
`tt) Results from continuing operations including Baxalta {acquired on June 3, 2015) and Dyax {acqutred on January 22: 2016}.
`{2j This is a Non GAAP financial measure as a percentage ofi total revenue. Tha most directly comparable measure under US GAAP is Gross Margin (Q3 2017. 72.9°,6. Q3 2016: 49.7%).
`(3) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Combined R8D and SGBA fQ3 201 r: -5°k, Q3 2016: +103%).
`(4) This is a Non GAAP financial measure as a percentage of total revenue. The most directly camparabie measure under US GAAP is Net Income Margin (Q3 2017. 15 h, Q3 2016: -11 ~j.
`(5} This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Effective Tax rate (Q3 2017: 2%, Q3 2015' -38%j.
`(6) This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Diluted EPS-AD5 {Q3 2017: 51.81; Q3 2016: -$129j.
`(7j See slide 39 for a list of items excluded from the US GAAP equivalent used to calculaie all Non GAAP measures detailed above. See slides 33 to 38 for a reconciliation of Non GAAP financial measures to the most directly comparable
`measure under US GAAP.
`
`32
`
`Page 32
`
`

`

`~~
`
`~~
`
`_"~J
`
`Net cash provided by operating activities and Non
`GAAP free cash flow reconciliation
`
`Q3 2017
`$MM
`
`Q3 2016
`$MM
`
`Net cash provided by operating activities
`
`Capital expenditure
`
`Payments relating to license arrangements
`
`Non GAAP free cash flow~'~~Z~
`
`1,055
`
`(174)
`
`20
`
`901
`
`526
`
`(221)
`
`90
`
`395
`
`Reported
`Growth
`
`+101
`
`+128%
`
`~~~~~ f1 }'This is a Non GAAP financial measure. The most directly comparable measure under US GAAP is Net cash provided by operating activities {see details above.
`
`(2j See slide 39 for a list of items excluded from the US GAAP equivalent used to calculate all Non GAAP measures detailed above. See slides 33 to 38 for a reconciliation of Non
`GAAP financial measures to the most directly comparable measure under US GAAP_
`
`33
`
`Page 33
`
`

`

`Non GAAP Operating Income~~~~2> from continuing operations
`
`Integration and acquisition costs
`
`Amortization and asset impairment
`
`Divestments and reorganization costs
`
`Legal and litigation costs
`
`US GAAP Operating Income from continuing operations
`
`Q3 2017
`$MM
`
`Reported
`Q3 2016
`$MM Growth
`
`1,498
`
`(300)
`
`(482)
`
`(6)
`
`(1)
`
`709
`
`1,254
`
`+19%
`
`(1,198)
`
`__
`
`(355)
`
`(1:07)
`
`1
`
`(406)
`
`N/M
`
`~~~~~ {11 This is a Non GAAP financial measure. The most directly wmparable measure under US GAAP Is US GAAP Operating Income (see details above}.
`(2j See slide 35 for a list of dems ezcfuded from the US GAAP equivalent used to calculate alE Non GAAP measures detailed above. See slides 33 to 38 for a reconciliation of Non
`GAAP financial measures to the most directly wmparable measure under US GAAP.
`
`34
`
`Page 34
`
`

`

`$MM
`
`Total Revenues
`
`Costs and expenses:
`Cost of product sales
`R&D
`SGBA
`Amortization of acquired intangible assets
`Inlegration and acquisition costs
`Reorganization vests
`Loss on sale of product rights
`Depreciation
`Total operating expenses
`
`Operating Income
`
`Total other expense, net
`
`Income from wntinuing operations before inwme
`taxes and equity losses of equity method inveslees
`Inwmetaxes
`Equity in losses of equity method investees, net of taxes
`
`IncomefromcontinuingoperaQons
`
`Loss from discontinued operations, net of tax
`Net income
`
`No. of Shares
`Diluted earnings per ADS
`
`__..
`
`US GAAP
`
`(a)
`
`(b)
`
`Adjustments
`(c)
`
`(d)
`
`(e)
`
`(~
`
`3,687.6
`
`1,001.4
`402.8
`859.7
`482.4
`237.0
`5.4
`0.3
`-
`2,989.0
`
`708.6
`
`(140.5)
`
`568.1
`(13.5)
`(3.4)
`
`551.2
`
`(0.4)
`550.8
`
`911.6
`S'I.81
`
`-
`
`-
`
`-
`
`-
`
`-
`-
`-
`(482.4)
`-
`-
`-
`-
`(482.4)
`
`4824
`
`-
`
`482.4
`(108.4)
`-
`
`374.0
`
`-
`374.0
`
`(63.3)
`-
`-
`-
`(2