Shire Delivers a Strong Start to 2014 and Increases Full Year Guidance

    Shire Delivers a Strong Start to 2014 and Increases Full Year Guidance

PR Newswire

DUBLIN, May 1, 2014

DUBLIN, May 1, 2014 /PRNewswire/ --

Shire (LSE: SHP, NASDAQ: SHPG) announces unaudited results for the three
months to March 31, 2014.

   
    Financial Highlights                                Q1 2014    Growth(1)

    Product sales                                   $1,308 million      +19%
    Total revenues                                  $1,347 million      +18%

    Non GAAP operating income                         $591 million      +40%
    US GAAP operating income from continuing
    operations                                        $307 million      -15%

    Non GAAP diluted earnings per ADS                        $2.36      +38%
    US GAAP diluted earnings per ADS                         $1.17     +218%

    Non GAAP cash generation                          $331 million      +29%
    Non GAAP free cash flow                           $231 million     +104%
    US GAAP net cash provided by operating
    activities                                        $246 million      +53%

^(1) Percentages compare to equivalent 2013 period. The 2013 comparatives in
this release have been recast to exclude the DERMAGRAFT^® business from
continuing operations following its divestment on January 17, 2014.

The Non GAAP financial measures included within this release are explained on
page 22, and are reconciled to the most directly comparable financial measures
prepared in accordance with US GAAP on pages 19 - 21.

Flemming Ornskov, M.D., Shire's Chief Executive Officer, commented:

"I'm pleased with our strong first quarter results. Our sharpened strategy,
the addition of CINRYZE from the ViroPharma acquisition and our continued
focus on operational discipline have all contributed to this strong financial
performance and our ability to drive further future growth. We have multiple
drivers of growth within our portfolio.

Sales in ADHD were driven by strong performance of VYVANSE (up 18%). Our US
prescription growth was in line with the overall market growth. We believe we
can significantly increase our Neuroscience revenue through developing a
treatment option in the growing adult market, expanding our international
sales and progressing a potential new indication in Binge Eating Disorder.

LIALDA continues to grow (up 28%) and has very positive sales and prescription
momentum, carrying on the outstanding performance from 2013 with total US
prescriptions up 33% on the prior year and an increase in market share of
eight percentage points in the past twelve months.

Our Rare Diseases products delivered good sales growth this quarter; we're
pleased with FIRAZYR's strong performance (up 80%) and the $86 million
contribution to product sales from CINRYZE in the first two months since the
ViroPharma acquisition closed.

The integration of ViroPharma is progressing well and we are on target to
deliver the previously estimated cost synergies by the end of 2015.

We're excited about the growing value in our innovative pipeline. We'll
shortly be meeting with the FDA to determine our next steps with lifitegrast.
We continue to advance our intrathecal enzyme replacement therapy program for
rare pediatric CNS diseases. In addition, the ViroPharma acquisition brought
us the Phase 2 program for maribavir, an investigational treatment under
development for cytomegalovirus infection in transplant patients, as well as
several potential new uses for CINRYZE. And, our acquisition of Fibrotech adds
FT011, a small molecule targeting an innovative, novel mechanism of action,
currently in a Phase 1B study in patients with renal impairment, and a Phase 2
study in patients with FSGS, a rare kidney disease, is planned.

Our strong financial performance and business progress this quarter gives us
the confidence to increase our guidance for the full year 2014 and we now
expect to deliver Non GAAP earnings per ADS growth in the mid-to-high twenty
percent range."

FINANCIAL SUMMARY

First Quarter 2014 Unaudited Results

   
                                      Q1 2014                          Q1 2013
                         US GAAP   Adjustments  Non GAAP  US GAAP   Adjustments  Non GAAP
                              $M            $M        $M       $M            $M        $M
    Total revenues         1,347             -     1,347    1,143             -     1,143
    Operating income         307           284       591      362            59       421

    Diluted earnings
    per ADS                $1.17         $1.19     $2.36    $0.37         $1.35     $1.72

  oProduct sales grew strongly in Q1 2014 (up 19% to $1,308 million from
    $1,098 million in Q1 2013). Product sales in Q1 2014 included $93 million
    for products acquired with ViroPharma Incorporated ("ViroPharma"),
    including $86 million from CINRYZE^®. The inclusion of ViroPharma
    contributed eight percentage points to our reported product sales growth.
    Excluding products acquired with ViroPharma, product sales grew 11%,
    driven by VYVANSE^® (up 18% to $351 million), LIALDA^®/MEZAVANT^® (up 28%
    to $129 million), ELAPRASE^® (up 13% to $129 million) and FIRAZYR^®(up 80%
    to $75 million).
  oTotal revenues were up 18% to $1,347 million (Q1 2013: $1,143 million),
    with the growth in product sales being partially offset by lower royalties
    and other revenues (down 14%).
  oOn a Non GAAP basis:

    Operating income grew strongly in Q1 2014, up 40% to $591 million (Q1
    2013: $421 million) due to higher total revenues (up 18%) and lower
    combined Research and Development ("R&D") and Selling, General and
    Administrative ("SG&A") costs (down 3%). R&D costs were down 13% following
    the completion of several large Phase 3 programs since Q1 2013 including
    new uses for LDX^([1]), the effect of portfolio prioritization decisions
    taken during 2013 and lower overheads due to the One Shire reorganization,
    partially offset by the inclusion of ViroPharma R&D costs. SG&A costs
    increased by 4%, an increase wholly attributable to the inclusion of
    ViroPharma SG&A costs for the first time in Q1 2014.

    On a US GAAP basis (from continuing operations):

    Operating income was down 15% to $307 million (Q1 2013: $362 million), as
    Q1 2014 included an impairment charge of $166 million in respect of our
    in-process R&D ("IPR&D") intangible asset for SHP602, higher intangible
    asset amortization charges and the unwind of the inventory fair value
    step-up resulting from the ViroPharma acquisition. Combined R&D and SG&A
    was up 29% with R&D up 63% and SG&A up 10% as compared with Q1 2013.
  oNon GAAP diluted earnings per American Depository Share ("ADS") increased
    38% to $2.36 (Q1 2013: $1.72) primarily due to the higher Non GAAP
    operating income.

    On a US GAAP basis, diluted earnings per ADS increased 218% to $1.17 (Q1
    2013: $0.37), as lower losses from discontinued operations (Q1 2013
    included goodwill impairment charges of $192 million) more than offset
    lower US GAAP operating income from continuing operations.
  oCash generation, a Non GAAP measure, was up 29% to $331 million (Q1 2013:
    $257 million). Higher cash receipts from product sales were partially
    offset by higher payments for sales deductions, the One Shire
    reorganization and the costs related to the acquisition and integration of
    ViroPharma.
    Free cash flow, also a Non GAAP measure, was up 104% to $231 million (Q1
    2013: $113 million) due to higher cash generation and lower cash tax and
    capital expenditure payments in the quarter.

    On a US GAAP basis, net cash provided by operating activities was up 53%
    to $246 million (Q1 2013: $160 million).
  oNet debt, also a Non GAAP measure, at March 31, 2014 was $1,413 million
    (December 31, 2013: net cash of $2,231 million).

    On a US GAAP basis, cash and cash equivalents were $139 million at March
    31, 2014 (December 31, 2013: $2,239 million).

--------------------------------------------------

1.) Lisdexamfetamine ("LDX") currently marketed as VYVANSE in the US & Canada,
VENVANSE® in Latin America and ELVANSE® in certain territories in the EU.



OUTLOOK

Reflecting our strong start to the year, we are increasing our guidance for
Non GAAP earnings per ADS to mid-to-high twenty percent growth for the full
year 2014, (previous guidance: growth at a similar level to 2013) (2013: up
23%). This guidance reflects the contribution from the ViroPharma acquisition
for the eleven months post closing.

We expect our operating costs to continue to benefit from our reorganization
efforts and the focus on operational discipline shown in the first quarter. As
a result we now anticipate combined Non GAAP R&D and SG&A to grow by 4-6%
compared to 2013 (previous guidance: growth of 6-8%).

We expect to see higher Combined Non GAAP R&D and SG&A in the remaining
quarters of 2014 than seen in the first quarter, as we continue to invest
behind our pipeline and new acquisitions, including Fibrotech Therapeutics Pty
Ltd ("Fibrotech"). The balance of the year will also see us increase our
commercial spending on the preparation for the anticipated launch of SHP465 in
the US and XAGRID in Japan, Binge Eating Disorder disease awareness
investments and the continued international expansion of VYVANSE.

All other elements of our guidance remain unchanged, and we continue to
expect:

  oFull year 2014 product sales growth in the mid-to-high teens.
  oRoyalties and other revenues to be 10-15% lower than 2013.
  oNon GAAP gross margin to be approximately 1 percentage point lower than in
    2013, due to slight dilution from ViroPharma.
  oNet interest expense to be at a similar level to 2013.
  oCore effective tax rate on Non GAAP income in the range of 18-20%.

Taken together, we are increasing our guidance for the full year 2014 and we
now expect to deliver Non GAAP earnings per ADS growth in the mid-to-high
twenty percent range.

FIRST QUARTER 2014 AND RECENT PRODUCT AND PIPELINE DEVELOPMENTS

Products

INTUNIV^® - for the treatment of Attention Deficit Hyperactivity Disorder
("ADHD") in children/adolescents

  oOn March 27, 2014 Shire announced the acceptance of submission of a
    Marketing Authorization Application by the European Medicines Agency for
    its once-daily, non-stimulant guanfacine extended release product for the
    treatment of ADHD in children/adolescents aged 6-17 years.

Pipeline

Shire continues to invest in its valuable pipeline, which now includes many
exciting potential products. Following the completion of the acquisition of
ViroPharma in January which added a number of new programs, Shire believes it
will be helpful this quarter to provide a more detailed than usual summary of
the developments in its pipeline:

SHP465 for the treatment of ADHD

  oSHP465 (mixed salts of a single entity amphetamine) capsules provide an
    extended-release of amphetamines to provide coverage of ADHD symptoms for
    adults throughout the day. Based on the US Food and Drug Administration
    ("FDA") feedback received on April 25, 2014, Shire is planning to resubmit
    the SHP465 New Drug Application ("NDA") as a Class 2 resubmission with a
    six month FDA review time. SHP465, if approved, will be a once daily,
    product designed to treat ADHD in adults, with statistically significant
    endpoints at 16 hours post-dose (statistically significant endpoints in
    clinical trials beginning at the 4-hour time point).

SHP 606 lifitegrast for the treatment of Dry Eye disease

  oShire continues to evaluate the lifitegrast clinical program in whole,
    examining the totality of evidence and will engage in a pre-NDA meeting
    with FDA regarding next steps. The totality of data encompasses all
    efficacy studies conducted to date, one Phase 2 study and two Phase 3
    studies (OPUS-1 and OPUS-2, with top-line results announced in the fourth
    quarter of 2013).

    On April 30, 2014 Shire announced top-line results from the prospective,
    randomized, double-masked, placebo-controlled SONATA trial which indicated
    no ocular or drug-related serious adverse events. The safety data
    indicated in the SONATA trial was entirely consistent with that observed
    in the Phase 2, OPUS-1 and OPUS-2 studies. Additional data and analyses
    will be submitted for presentation at upcoming medical meetings.

CINRYZE life cycle management and new uses

  oShire is pursuing additional new formulations of CINRYZE for routine
    prophylaxis against Hereditary Angioedema ("HAE") attacks in adolescent
    and adult patients. Shire plans to initiate discussions with FDA in H2
    2014 to determine the appropriate path forward. In addition, Shire is
    further considering opportunities to pursue additional therapeutic
    indications that may involve the C1 Inhibitor.

SHP620 maribavir for the treatment of cytomegalovirus ("CMV") infection in
transplant patients

  oShire is currently conducting two Phase 2 studies in transplant
    recipients, both of which are fully enrolled. The first is a 160 patient
    trial in first-line treatment of asymptomatic CMV in transplant
    recipients. The second is a 120 patient trial for the treatment of
    resistant/refractory CMV infection/disease in transplant recipients.
    Preliminary results are expected in the first half of 2015.

SHP602 - for the treatment of Iron Overload

  oIn March 2014, the SHP602 Phase 2 trial in pediatric and adult patients
    with transfusion iron overload was placed on clinical hold as Shire
    evaluates nonclinical toxicology findings. The potential relevance of
    these findings to humans, if any, is unknown, however this assessment will
    lead to a delay that will impact the commercial value of this program.
    Following our decision to put the current trial on clinical hold, an
    impairment charge relating to the IPR&D intangible asset has been recorded
    in Q1 2014.

OTHER DEVELOPMENTS

Proposed acquisition of Fibrotech

  oOn May 1, 2014 Shire entered into a definitive agreement to acquire
    Fibrotech, a privately held, biotechnology company focused on the
    development of small molecules for the treatment of renal diseases and
    fibrosis. The acquisition of Fibrotech strengthens our growing and
    innovative portfolio targeting renal and fibrotic diseases, and leverages
    our existing renal capabilities. Shire will make an upfront payment of $75
    million and additional contingent payments based on the achievement of
    development and regulatory milestones. The closing of the acquisition is
    subject to customary conditions, including approval of Australia's Foreign
    Investment Review Board. FT011, the lead molecule, targets an innovative,
    novel and previously undescribed mechanism of action, which completed a
    Phase 1A study in healthy volunteers and is currently in a Phase 1B study
    in patients with renal impairment. The first Phase 2 study is planned to
    enroll patients with Focal Segmental Glomerulosclerosis (FSGS), a rare
    fibrotic kidney disease with high unmet medical need. Shire will also
    explore the application of this technology in other potential fibrotic
    conditions. Given recent advancements in the scientific understanding of
    fibrosis, as well as the development of biomarkers to aid in clinical
    development, it is an exciting time to expand our interest in
    anti-fibrotic agents with a clinical stage candidate as well as a library
    of additional novel molecules.

Transfer of CALCICHEW^®product rights

  oIn Q1 2014 Shire transferred the marketing authorizations for the
    CALCICHEW range of products in the UK and Ireland to Takeda Pharmaceutical
    Company Limited. From January 1, 2014 Shire no longer recognizes product
    sales from CALCICHEW. In addition in Q1 2014, Shire sold certain CALCICHEW
    trade marks to Takeda Nycomed AS ("Takeda") for cash proceeds of $43.5
    million and recognized a gain for the same amount.

ADDITIONAL INFORMATION

The following additional information is included in this press release:

   
                                                              Page

    Overview of First Quarter 2014 Financial Results            7
    Financial Information                                      11
    Non GAAP Reconciliation                                    19
    Notes to Editors                                           21
    Safe Harbor Statement                                      22
    Explanation of Non GAAP Measures                           22
    Trade Marks                                                23

For further information please contact:

Dial in details for thelive conference callfor investors at 14:00 BST /
09:00 EDT on May 1, 2014:

UK dial in: 0808 237 0030 or 0203 139 4830

US dial in: 1 866 928 7517 or 1 718 873 9077

Password/Conf ID: 22580956#

Live Webcast: Click here

The quarterly earnings presentation will be available today at 12:00 BST /
07:00 EDT on:

- Shire.com Investors section

- Shire's IR Briefcase in the iTunes Store



OVERVIEW OF FIRST QUARTER 2014 FINANCIAL RESULTS

1.  Product sales 

For the three months to March 31, 2014 product sales increased by 19% to
$1,308 million (Q1 2013: $1,098 million) and represented 97% of total revenues
(Q1 2013: 96%).

   
                                     Year on year growth          US Exit
                                         Non GAAP                  Market
    Product sales     Sales $M   Sales      CER(1)   US Rx(2)     Share(2)

    VYVANSE              351.2    +18%       +18%         +3%         16%
    LIALDA/MEZAVANT      128.9    +28%       +29%        +33%         30%
    ELAPRASE             128.6    +13%       +14%       n/a(3)      n/a(3)
    REPLAGAL(R)          114.3     +0%        +2%       n/a(4)      n/a(4)
    VPRIV(R)              86.9     +6%        +7%       n/a(3)      n/a(3)
    CINRYZE               85.6     n/a        n/a       n/a(3)      n/a(3)
    ADDERALL XR(R)        85.1    -15%       -14%         -2%          5%
    INTUNIV               82.3     +6%        +6%         +3%          4%
    FIRAZYR               74.9    +80%       +79%       n/a(3)      n/a(3)
    PENTASA(R)            72.3     +2%        +2%         -1%         13%
    OTHER                 98.0     -1%        -3%         n/a         n/a
    Total              1,308.1    +19%       +20%

1.On a Constant Exchange Rate ("CER") basis, which is a Non GAAP measure.
2.Data provided by IMS Health National Prescription Audit ("IMS NPA")
    relates solely to US-based prescriptions. Growth rates have been
    calculated based on the restated 2013 data issued by IMS on February 12,
    2014. Exit market share represents the average monthly US market share in
    the month ended March 31, 2014.
3.IMS NPA Data not available.
4.Not sold in the US in Q1 2014.

VYVANSE - ADHD

VYVANSE product sales showed strong growth (up 18%) in Q1 2014 compared to Q1
2013 due to price increases taken since Q1 2013 and to a lesser extent higher
prescription demand. The benefit of these positive factors was partially
offset by destocking in Q1 2014.

LIALDA/MEZAVANT - Ulcerative Colitis

Product sales for LIALDA/MEZAVANT in Q1 2014 were up 28% primarily due to
higher US prescription demand (up 33%), as LIALDA reached a US exit market
share of 30%, and to a lesser extent the effect of a price increase taken
since Q1 2013. These positive factors were partially offset by higher sales
deductions as a percentage of product sales as compared to Q1 2013 and
approximately $10 million of destocking in Q1 2014.

ELAPRASE- Hunter syndrome

ELAPRASE product sales in Q1 2014 were up 13% compared to Q1 2013 driven by
continued growth in the number of treated patients.

REPLAGAL - Fabry disease

REPLAGAL sales were flat compared to Q1 2013 as slight volume growth was
offset by lower pricing. We continue to see good growth in emerging markets
and steady volume demand in Europe.

VPRIV - Gaucher disease

VPRIV product sales in Q1 2014 were up 6% compared to Q1 2013 driven by
continued growth in the number of treated patients.

CINRYZE - for the prophylactic treatment of HAE 

Shire acquired CINRYZE through its acquisition of ViroPharma on January 24,
2014 and CINRYZE achieved product sales of $85.6 million in the first two
months post acquisition. On a proforma basis CINRYZE grew 16% on Q1 2013
primarily driven by an increase in the number of patients on therapy.

ADDERALL XR - ADHD

ADDERALL XR product sales decreased (down 15%) in Q1 2014 primarily due to
slightly lower demand and higher sales deductions as a percentage of sales as
compared to Q1 2013. Market share has remained relatively stable over the past
six months and we expect ADDERALL XR to remain competitive in its market.

INTUNIV - ADHD

The growth in INTUNIV product sales (up 6%) in Q1 2014 was driven by a
combination of price increases taken since Q1 2013 and higher US prescription
demand. The benefit of these positive factors was offset by higher sales
deductions as a percentage of product sales in Q1 2014.

FIRAZYR - for the treatment of acuteHAE attacks

FIRAZYR product sales growth (up 80%) was primarily due to growth in patients
on therapy, the effect of a price increase and a higher number of treated
attacks particularly in the US market.

PENTASA - Ulcerative Colitis

PENTASA product sales (up 2%) benefited from higher stocking compared to Q1
2013, partially offset by higher sales deductions as a percentage of product
sales in Q1 2014 as compared to Q1 2013.

2.  Royalties

   
                                                    Year on year growth
                                Royalties to
    Product                       Shire $M       Royalties            CER

    FOSRENOL(R)           1.00      12.8           +42%              +42%
    ADDERALL XR           1.00       9.0           +11%              +11%
    3TC(R) and ZEFFIX(R)  1.00       7.5           -40%              -40%
    Other                 1.00       3.0           -66%              -66%
    Total                 1.00      32.3           -16%              -16%


Royalties from ADDERALL XR in Q1 2014 benefited from royalties received from
Teva Pharmaceuticals Inc. ("Teva"). Shire will not receive royalties from Teva
after Q1 2014.

3.  Financial details

Cost of product sales 

   
                                                   % of              % of
                                                product           product
                                       Q1 2014    sales  Q1 2013    sales
                                            $M                $M
    Cost of product sales (US GAAP)      229.5      18%    147.4      13%
    Unwind of ViroPharma
    inventory fair value step-up         (38.8)                -
    Depreciation                         (10.2)             (7.1)
    Cost of product sales (Non GAAP)     180.5      14%    140.3      13%


Non GAAP cost of product sales as a percentage of product sales increased
marginally in Q1 2014 reflecting the inclusion of CINRYZE.

US GAAP cost of product sales as a percentage of product sales was five
percentage points higher than the same period in 2013, as Q1 2014 included
charges of $38.8 million on the unwind of the fair value adjustment on
acquired ViroPharma inventories.

R&D 

   
                                                % of                  % of
                                             product               product
                                Q1 2014        sales  Q1 2013        sales
                                     $M                    $M
    R&D (US GAAP)                 360.5          28%    220.6          20%
    Impairment of intangible
    assets                       (166.0)                    -
    Depreciation                   (5.8)                 (4.6)
    R&D (Non GAAP)                188.7          14%    216.0          20%


Non GAAP R&D decreased by $27.3 million, or 13% in Q1 2014, following the
completion of several large Phase 3 programs since Q1 2013 including new uses
for LDX, the effect of portfolio prioritization decisions taken during 2013
and lower overheads due to the One Shire reorganization, partially offset by
the inclusion of ViroPharma R&D costs.

US GAAP R&D increased by $139.9 million, or 63%, as Q1 2014 included
impairment charges relating to the SHP602 IPR&D intangible asset currently on
clinical hold.

SG&A

   
                                                  % of                  % of
                                               product               product
                                  Q1 2014        sales  Q1 2013        sales
                                       $M                    $M
    SG&A (US GAAP)                  430.3          33%    391.7          36%
    Intangible asset amortization   (57.8)                (36.1)
    Legal and litigation costs       (1.7)                 (1.6)
    Depreciation                    (20.8)                (16.1)
    SG&A (Non GAAP)                 350.0          27%    337.9          31%


Non GAAP SG&A increased by $12.1 million, or 4%, an increase wholly
attributable to the inclusion of ViroPharma SG&A costs for the first time in
Q1 2014. SG&A as a percentage of product sales decreased compared to Q1 2013
as we benefited from the One Shire reorganization and the focus on operational
discipline in Q1 2014.

US GAAP SG&A increased by $38.6 million, or 10%, as compared to Q1 2013.

Gain on sale of product rights

For the three months to March 31, 2014 Shire recorded a net gain on sale of
product rights of $36.4 million (2013: $6.5 million), primarily a gain of
$43.5 million on the sale of certain CALCICHEW trade marks to Takeda,
partially offset by the re-measurement of the contingent consideration
receivable from the divestment of DAYTRANA^®.

Reorganization costs

For the three months to March 31, 2014 Shire recorded reorganization costs of
$49.4 million (Q1 2013: $17.5 million), which in 2014 related to the One
Shire reorganization as we implement our new operating structure.

Integration and acquisition costs

For the three months to March 31, 2014 Shire recorded net charges for
integration and acquisition costs of $6.6 million. This net charge includes
costs of $65.8 million related to the acquisition and integration of
ViroPharma, partially offset by a net credit of $59.2 million relating to the
change in fair values of contingent consideration liabilities, principally a
credit of $71.9 million relating to the release of contingent consideration
liabilities in respect of the acquisition of FerroKin Biosciences, Inc.
("FerroKin").

In Q1 2013 integration and acquisition costs ($4.1 million) primarily related
to the acquisition of Lotus Tissue Repair inc. ("Lotus") and the integration
of FerroKin.

Interest expense

For the three months to March 31, 2014 Shire incurred interest expense of $7.8
million (Q1 2013: $9.2 million). Interest expense in Q1 2014 primarily related
to interest and amortization of issue costs incurred on borrowings to fund the
ViroPharma acquisition. Interest expense in Q1 2013 principally related to the
coupon and amortization of issue costs on Shire's convertible bonds which were
fully redeemed or converted in Q4 2013.

Taxation

The effective rate of tax on Non GAAP income in Q1 2014 was 20% (Q1 2013:
20%), and on a US GAAP basis the effective rate of tax was 17% (Q1 2013: 20%).

The effective rate of tax in Q1 2014 on US GAAP income from continuing
operations is lower than the same period in 2013 primarily due to the impact
of changes in the fair value of contingent consideration liabilities and the
gain on sale of product rights which have no tax effect.

Discontinued operations 

The loss from discontinued operations for the three months to March 31, 2014
was $22.7 million net of tax (2013: $216.2 million), primarily relating to
costs associated with the divestment of the DERMAGRAFT business. The loss from
discontinued operations in Q1 2013 primarily related to the goodwill
impairment of the former Regenerative Medicine Business Unit ($191.8 million)
and other operating losses of the DERMAGRAFT business.



FINANCIAL INFORMATION

TABLE OF CONTENTS 

   
                                                              Page

    Unaudited US GAAP Consolidated Balance Sheets               12

    Unaudited US GAAP Consolidated Statements of Income         13

    Unaudited US GAAP Consolidated Statements of Cash Flows     15

    Selected Notes to the Unaudited US GAAP Financial
    Statements
    (1) Earnings per share                                      17
    (2) Analysis of revenues                                    18

    Non GAAP reconciliation                                     19

Unaudited US GAAP financial position as of March 31, 2014

Consolidated Balance Sheets

   
                                                        March 31,  December 31,
                                                            2014          2013
                                                              $M            $M
    ASSETS
    Current assets:
    Cash and cash equivalents                              139.1       2,239.4
    Restricted cash                                         32.3          22.2
    Accounts receivable, net                             1,091.2         961.2
    Inventories                                            637.4         455.3
    Assets held for sale                                       -          31.6
    Deferred tax asset                                     392.1         315.6
    Prepaid expenses and other current assets              350.3         263.0

    Total current assets                                 2,642.4       4,288.3

    Non-current assets:
    Investments                                             35.2          31.8
    Property, plant and equipment ("PP&E"), net            884.0         891.8
    Goodwill                                             2,070.1         624.6
    Other intangible assets, net                         5,103.4       2,312.6
    Deferred tax asset                                     145.5         141.1
    Other non-current assets                                89.7          32.8

    Total assets                                        10,970.3       8,323.0

    LIABILITIES AND EQUITY
    Current liabilities:
    Accounts payable and accrued expenses                1,765.2       1,688.4
    Short term borrowings                                  671.3             -
    Other current liabilities                               83.5         119.5

    Total current liabilities                            2,520.0       1,807.9

    Non-current liabilities:
    Long term borrowings                                   850.0             -
    Deferred tax liability                               1,295.5         560.6
    Other non-current liabilities                          659.0         588.5

    Total liabilities                                    5,324.5       2,957.0

    Equity:
    Common stock of 5p par value; 1,000 million
    shares authorized; and 597.9 million shares
    issued and outstanding (2013: 1,000 million
    shares authorized; and 597.5 million shares
    issued and outstanding)                                 58.6          58.6
    Additional paid-in capital                           4,233.0       4,186.3
    Treasury stock: 12.0 million shares (2013: 13.4
    million)                                              (381.7)       (450.6)
    Accumulated other comprehensive income                 112.8         110.2
    Retained earnings                                    1,623.1       1,461.5

    Total equity                                         5,645.8       5,366.0

    Total liabilities and equity                        10,970.3       8,323.0



Unaudited US GAAP results for the three months to March 31, 2014

Consolidated Statements of Income

   
    3 months to March 31,                                    2014        2013
                                                               $M          $M
    Revenues:
    Product sales                                         1,308.1     1,098.2
    Royalties                                                32.3        38.5
    Other revenues                                            6.4         6.7
    Total revenues                                        1,346.8     1,143.4

    Costs and expenses:
    Cost of product sales                                   229.5       147.4
    R&D(1)                                                  360.5       220.6
    SG&A(1)                                                 430.3       391.7
    Goodwill impairment charge                                  -         7.1
    Gain on sale of product rights                          (36.4)       (6.5)
    Reorganization costs                                     49.4        17.5
    Integration and acquisition costs                         6.6         4.1
    Total operating expenses                              1,039.9       781.9

    Operating income from continuing operations             306.9       361.5

    Interest income                                           0.5         0.7
    Interest expense                                         (7.8)       (9.2)
    Other income/(expense), net                               4.7        (1.0)
    Total other expense, net                                 (2.6)       (9.5)

    Income from continuing operations before income
    taxes and equity in (losses)/earnings of equity
    method investees                                        304.3       352.0
    Income taxes                                            (50.6)      (71.4)
    Equity in (losses)/earnings of equity method
    investees, net of taxes                                  (0.6)         0.4
    Income from continuing operations, net of tax           253.1       281.0

    Loss from discontinued operations, net of tax           (22.7)     (216.2)
    Net income                                              230.4        64.8

1.R&D costs include impairment of IPR&D intangible asset of $166.0 million
    for the three months to March 31, 2014 (2013: $nil). SG&A costs include
    amortization of intangible assets relating to intellectual property rights
    acquired of $57.8 million for the three months to March 31, 2014 (2013:
    $36.1 million).

Unaudited US GAAP results for the three months to March 31, 2014

Consolidated Statements of Income (continued)

   
    3 months to March 31,                                    2014        2013

    Earnings per ordinary share - basic
    Earnings from continuing operations                     43.3c       51.0c
    Loss from discontinued operations                       (3.9c)     (39.2c)
    Earnings per ordinary share - basic                     39.4c       11.8c

    Earnings per ADS - basic                               118.2c      106.2c

    Earnings per ordinary share - diluted
    Earnings from continuing operations                     43.0c       49.0c
    Loss from discontinued operations                       (3.9c)     (36.7c)
    Earnings per ordinary share - diluted                   39.1c       12.3c

    Earnings per ADS - diluted                             117.3c       36.9c

    Weighted average number of shares:
                                                         Millions    Millions

    Basic                                                   584.3       551.5
    Diluted                                                 588.8       588.9



Unaudited US GAAP results for the three months to March 31, 2014

Consolidated Statements of Cash Flows

   
    3 months to March 31,                                              2014       2013
                                                                         $M         $M
    CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                                                        230.4       64.8
    Adjustments to reconcile net income to net cash provided by
    operating activities:
                 Depreciation and amortization                         96.5       75.0
                 Share based compensation                              26.2       16.6
                 Change in fair value of contingent consideration     (59.2)       1.8
                 Goodwill impairment charge                               -      198.9
                 Unwind of ViroPharma inventory fair value
                 step-up                                               38.8          -
                 Impairment of IPR&D intangible assets                166.0          -
                 Impairment of Property Plant and Equipment
                 ("PP&E")                                              12.1
                 Gain on sale of product rights                       (36.4)      (6.5)
                 Other, net                                            (2.2)       0.1
    Movement in deferred taxes                                         18.5        1.4
    Equity in losses/(earnings) of equity method investees              0.6       (0.4)

    Changes in operating assets and liabilities:
                 Increase in accounts receivable                      (77.3)     (51.3)
                 Increase in sales deduction accrual                   70.8       44.4
                 Increase in inventory                                (18.6)     (29.1)
                 Increase in prepayments and other assets             (74.6)     (61.8)
                 Decrease in accounts and notes payable and other
                 liabilities                                         (145.5)     (93.5)
    Net cash provided by operating activities(A)                      246.1      160.4
   
    CASH FLOWS FROM INVESTING ACTIVITIES:
    Movements in restricted cash                                      (10.1)      (2.2)
    Purchases of subsidiary undertakings and
    businesses, net of cash acquired                               (3,764.4)     (77.2)
    Purchases of non-current investments and PP&E                     (15.6)     (50.1)
    Proceeds from short-term investments                               46.8          -
    Proceeds received on sale of product rights                        48.0        4.8
    Proceeds from capital expenditure grants                              -        2.7
    Proceeds from disposal of non-current investments and PP&E          8.0        0.7
    Other, net                                                         (2.9)         -
    Net cash used in investing activities(B)                       (3,690.2)    (121.3)



Unaudited US GAAP results for the three months to March 31, 2014

Consolidated Statements of Cash Flows (continued)

   
    3 months to March 31,                                   2014       2013
                                                              $M         $M

    CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from revolving line of credit, long term
    and short term borrowings                            2,170.0          -
    Repayment of revolving line of credit                 (650.2)         -
    Repayment of debt acquired with ViroPharma            (533.9)         -
    Proceeds from ViroPharma call options                  346.7          -
    Payments to acquire shares under the share
    buy-back program                                           -      (70.6)
    Contingent consideration payments                       (7.8)      (6.0)
    Excess tax benefit associated with exercise of
    stock options                                           20.5        4.4
    Other, net                                               0.2       (0.7)
    Net cash provided by/(used in) financing
    activities(C)                                        1,345.5      (72.9)

    Effect of foreign exchange rate changes on cash
    and cash equivalents(D)                                 (1.7)       2.3

    Net decrease in cash and cash equivalents(A)+(B)
    +(C)+(D)                                            (2,100.3)     (31.5)
    Cash and cash equivalents at beginning of period     2,239.4    1,482.2
    Cash and cash equivalents at end of period             139.1    1,450.7



Unaudited US GAAP results for the three months to March 31, 2014

Selected Notes to the Financial Statements

(1) Earnings Per Share ("EPS")

   
    3 months to March 31,                           2014        2013
                                                      $M          $M

    Income from continuing operations              253.1       281.0
    Loss from discontinued operation               (22.7)     (216.2)

    Numerator for basic EPS                        230.4        64.8
    Interest on convertible bonds, net of tax          -         7.6

    Numerator for diluted EPS                      230.4        72.4

    Weighted average number of shares:
                                                Millions    Millions

    Basic(1)                                       584.3       551.5
    Effect of dilutive shares:
    Share based awards to employees(2)               4.5         3.8
    Convertible bonds 2.75% due 2014(3)                -        33.6

    Diluted                                        588.8       588.9

1.Excludes shares purchased by the EBT and under the share buy-back program
    and presented by Shire as treasury stock.
2.Calculated using the treasury stock method.
3.Calculated using the "if converted" method.

The share equivalents not included in the calculation of the diluted weighted
average number of shares are shown below:

   
    3 months to March 31,                            2014            2013
                                            No. of shares   No. of shares
                                                 Millions        Millions

    Share based awards to employees(1)                0.8             5.6

1.Certain stock options have been excluded from the calculation of diluted
    EPS because (a) their exercise prices exceeded Shire's average share price
    during the calculation period or (b) the required performance conditions
    were not satisfied as at the balance sheet date.

Unaudited US GAAP results for the three months to March 31, 2014

Selected Notes to the Financial Statements

(2) Analysis of revenues

   
    3 months to March 31,      2014      2013      2014        2014
                                                      %  % of total
                                 $M        $M    change     revenue
    Net product sales:
    VYVANSE                   351.2     298.4       18%         26%
    LIALDA/MEZAVANT           128.9     100.5       28%         10%
    ELAPRASE                  128.6     114.3       13%         10%
    REPLAGAL                  114.3     114.0        0%          9%
    VPRIV                      86.9      81.6        6%          6%
    CINRYZE                    85.6         -       n/a          6%
    ADDERALL XR                85.1      99.8      -15%          6%
    INTUNIV                    82.3      77.7        6%          6%
    FIRAZYR                    74.9      41.7       80%          6%
    PENTASA                    72.3      71.0        2%          5%
    FOSRENOL                   41.4      42.3       -2%          3%
    XAGRID(R)                  27.1      23.4       16%          2%
    Other product sales        29.5      33.5      -12%          2%
    Total product sales     1,308.1   1,098.2       19%         97%

    Royalties:
    FOSRENOL                   12.8       9.0       42%         <1%
    ADDERALL XR                 9.0       8.1       11%         <1%
    3TC and ZEFFIX              7.5      12.5      -40%         <1%
    Other                       3.0       8.9      -66%         <1%
    Total royalties            32.3      38.5      -16%          2%

    Other revenues              6.4       6.7       -4%         <1%

    Total revenues          1,346.8   1,143.4       18%        100%



Unaudited results for the three months to March 31, 2014

Non GAAP reconciliation

   
    3 months to March 31, 2014       US GAAP             Adjustments              Non GAAP

                                                  (a)    (b)    (c)   (d)    (e)
                                          $M       $M     $M     $M    $M     $M        $M
    Total revenues                   1,346.8        -      -      -     -      -   1,346.8

    Costs and expenses:
    Cost of product sales              229.5        -  (38.8)     -     -  (10.2)    180.5
    R&D                                360.5   (166.0)     -      -     -   (5.8)    188.7
    SG&A                               430.3    (57.8)     -      -  (1.7) (20.8)    350.0
    Gain on sale of product rights     (36.4)       -      -   36.4     -      -         -
    Reorganization costs                49.4        -      -  (49.4)    -      -         -
    Integration and acquisition
    costs                                6.6        -   (6.6)     -     -      -         -
    Depreciation                           -        -      -      -     -   36.8      36.8
    Total operating expenses         1,039.9   (223.8) (45.4) (13.0) (1.7)     -     756.0

    Operating income                   306.9    223.8   45.4   13.0   1.7      -     590.8

    Interest income                      0.5        -      -      -     -      -       0.5
    Interest expense                    (7.8)       -      -      -     -      -      (7.8)
    Other income/(expense), net          4.7        -      -   (5.0)    -      -      (0.3)
    Total other expense, net            (2.6)       -      -   (5.0)    -      -      (7.6)
    Income before income taxes and
    equity in losses of equity
    method investees                   304.3    223.8   45.4    8.0   1.7      -     583.2
    Income taxes                       (50.6)   (44.5) (10.2) (12.7) (0.6)     -    (118.6)
    Equity in losses of equity
    method investees, net of tax        (0.6)       -      -      -     -      -      (0.6)
    Net income from continuing
    operations                         253.1    179.3   35.2   (4.7)  1.1      -     464.0
    Loss from discontinued
    operations, net of tax             (22.7)       -      -   22.7     -      -         -
    Net income                         230.4    179.3   35.2   18.0   1.1      -     464.0
    Weighted average number of
    shares (millions) - diluted        588.8        -      -      -     -      -     588.8
    Diluted earnings per ADS          117.3c    91.4c  17.9c   9.2c  0.6c      -    236.4c

The following items are included in Adjustments:

a.Amortization and asset impairments: Impairment of SHP602 IPR&D intangible
    asset ($166.0 million), amortization of intangible assets relating to
    intellectual property rights acquired ($57.8 million), and tax effect of
    adjustments;
b.Acquisition and integration activities: Unwind of ViroPharma inventory
    fair value adjustments ($38.8 million), costs associated with the
    acquisition and integration of ViroPharma ($65.8 million), net credit
    related to the change in fair value of contingent consideration
    liabilities, primarily relating to the release of contingent consideration
    liabilities in respect of the acquisition of FerroKin ($59.2 million), and
    tax effect of adjustments;
c.Divestments, reorganizations and discontinued operations: Net gain on sale
    of CALCICHEW product rights to Takeda and loss on re-measurement of
    DAYTRANA contingent consideration to fair value ($36.4 million), costs
    relating to the One Shire reorganization ($49.4 million), gain on sale of
    long term investments ($5.0 million), tax effect of adjustments, and loss
    from discontinued operations, net of tax ($22.7 million);
d.Legal and litigation costs: Costs related to litigation, government
    investigations, other disputes and external legal costs ($1.7 million),
    and tax effect of adjustments; and
e.Depreciation reclassification: Depreciation of $36.8 million included in
    Cost of product sales, R&D and SG&A for US GAAP separately disclosed for
    the presentation of Non GAAP earnings.

Unaudited results for the three months to March 31, 2013

Non GAAP reconciliation

   
    3 months to March 31, 2013       US GAAP            Adjustments             Non GAAP

                                                 (a)   (b)    (c)   (d)    (e)
                                          $M      $M    $M     $M    $M     $M        $M
    Total revenues                   1,143.4       -     -      -     -      -   1,143.4

    Costs and expenses:
    Cost of product sales              147.4       -     -      -     -   (7.1)    140.3
    R&D                                220.6       -     -      -     -   (4.6)    216.0
    SG&A                               391.7   (36.1)    -      -  (1.6) (16.1)    337.9
    Goodwill impairment charge           7.1    (7.1)    -      -     -      -         -
    Gain on sale of product rights      (6.5)      -     -    6.5     -      -         -
    Reorganization costs                17.5       -     -  (17.5)    -      -         -
    Integration and acquisition
    costs                                4.1       -  (4.1)     -     -      -         -
    Depreciation                           -       -     -      -     -   27.8      27.8
    Total operating expenses           781.9   (43.2) (4.1) (11.0) (1.6)     -     722.0

    Operating income                   361.5    43.2   4.1   11.0   1.6      -     421.4

    Interest income                      0.7       -     -      -     -      -       0.7
    Interest expense                    (9.2)      -     -      -     -      -      (9.2)
    Other expense, net                  (1.0)      -     -      -     -      -      (1.0)
    Total other expense, net            (9.5)      -     -      -     -      -      (9.5)
    Income before income taxes and
    equity in earnings of equity
    method investees                   352.0    43.2   4.1   11.0   1.6      -     411.9
    Income taxes                       (71.4)  (11.0) (0.5)     -  (0.6)     -     (83.5)
    Equity in earnings of equity
    method investees, net of tax         0.4       -     -      -     -      -       0.4
    Income from continuing
    operations, net of tax             281.0    32.2   3.6   11.0   1.0      -     328.8
    Loss from discontinued
    operations, net of tax            (216.2)      -     -  216.2     -      -         -
    Net income                          64.8    32.2   3.6  227.2   1.0      -     328.8
    Impact of convertible debt, net
    of tax                               7.6       -     -      -     -      -       7.6
    Numerator for diluted EPS           72.4    32.2   3.6  227.2   1.0      -     336.4
    Weighted average number of
    shares (millions) - diluted        588.9       -     -      -     -      -     588.9
    Diluted earnings per ADS           36.9c   16.4c  1.8c 115.9c  0.6c      -    171.6c

The following items are included in Adjustments:

a.Amortization and asset impairments: Amortization of intangible assets
    relating to intellectual property rights acquired ($36.1 million),
    impairment of goodwill relating to Shire's Regenerative Business relating
    to continuing operations ($7.1 million), and tax effect of adjustments;
b.Acquisition and integration activities: Costs primarily associated with
    the acquisition of Lotus and integration of FerroKin ($2.3 million),
    charges related to the change in fair values of contingent consideration
    liabilities ($1.8 million), and tax effect of adjustments;
c.Divestments, reorganizations and discontinued operations: Re-measurement
    of DAYTRANA contingent consideration to higher fair value ($6.5 million),
    costs relating to the collective dismissal and closure of Shire's facility
    at Turnhout, Belgium ($17.5 million), tax effect of adjustments, and loss
    from discontinued operations, net of tax ($216.2 million);
d.Legal and litigation costs: Costs related to litigation, government
    investigations, other disputes and external legal costs ($1.6 million),
    and tax effect of adjustments; and
e.Depreciation reclassification: Depreciation of $27.8 million included in
    Cost of product sales, R&D and SG&A for US GAAP separately disclosed for
    the presentation of Non GAAP earnings.

Unaudited results for the three months to March 31, 2014

Non GAAP reconciliation

The following table reconciles US GAAP net cash provided by operating
activities to Non GAAP cash generation:

   
                                                    2014        2013
                                                      $M          $M
    Net cash provided by operating activities      246.1       160.4
    Tax and interest payments, net                  85.2        97.1
    Non GAAP cash generation                       331.3       257.5

The following table reconciles US GAAP net cash provided by operating
activities to Non GAAP free cash flow:

   
                                                    2014        2013
                                                      $M          $M
    Net cash provided by operating activities      246.1       160.4
    Capital expenditure                            (15.3)      (47.3)
    Non GAAP free cash flow                        230.8       113.1

Non GAAP net (debt)/cash comprises:

   
                                               March 31,  December 31,
                                                   2014          2013
                                                     $M            $M
    Cash and cash equivalents                     139.1       2,239.4

    Long term borrowings                         (850.0)            -
    Short term borrowings                        (671.3)            -
    Other debt                                    (30.7)         (8.9)
    Non GAAP net (debt)/cash                   (1,412.9)      2,230.5

NOTES TO EDITORS

Shire enables people with life-altering conditions to lead better lives.

Our strategy is to focus on developing and marketing innovative specialty
medicines to meet significant unmet patient needs.

We provide treatments in Neuroscience, Rare Diseases, Gastrointestinal and
Internal Medicine and we are developing treatments for symptomatic conditions
treated by specialist physicians in other targeted therapeutic areas.

http://www.shire.com

FORWARD - LOOKING STATEMENTS - "SAFE HARBOR" STATEMENT UNDER THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995

Statements included in this release that are not historical facts are
forward-looking statements. 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:

  oShire's products may not be a commercial success;
  orevenues from ADDERALL XR are subject to generic erosion and revenues from
    INTUNIV will become subject to generic competition starting in December
    2014;
  othe failure to obtain and maintain reimbursement, or an adequate level of
    reimbursement, by third-party payors in a timely manner for Shire's
    products may impact future revenues, financial condition and results of
    operations;
  oShire conducts its own manufacturing operations for certain of its Rare
    Diseases products and is reliant on third party contractors 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.
  othe development, approval and manufacturing of Shire's products is subject
    to extensive oversight by various regulatory agencies and regulatory
    approvals or interventions associated with changes to manufacturing sites,
    ingredients or manufacturing processes could lead to significant delays,
    increase in operating costs, lost product sales, an interruption of
    research activities or the delay of new product launches;
  othe 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 impact Shire's revenues,
    financial conditions or results of operations;
  oinvestigations or enforcement action by regulatory authorities or law
    enforcement agencies relating to Shire's activities in the highly
    regulated markets in which it operates may result in the distraction of
    senior management, significant legal costs and the payment of substantial
    compensation or fines;
  oadverse 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;
  oShire faces intense competition for highly qualified personnel from other
    companies, academic institutions, government entities and other
    organizations. Shire is undergoing a corporate reorganization and the
    consequent uncertainty could adversely impact Shire's ability to attract
    and/or retain the highly skilled personnel needed for Shire to meet its
    strategic objectives;
  ofailure to achieve Shire's strategic objectives with respect to the
    acquisition of ViroPharma Incorporated 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.

NON GAAP MEASURES

This press release contains financial measures not prepared in accordance with
US GAAP.These measures are referred to as "Non GAAP" measures and include:
Non GAAP operating income; Non GAAP net income; Non GAAP diluted earnings per
ADS; effectivetax rate on Non GAAP income before income taxes and
earnings/(losses) of equity method investees ("effective tax rate on Non GAAP
income"); Non GAAP cost of product sales; Non GAAP R&D; Non GAAP SG&A; Non
GAAP other income/(expense); Non GAAP cash generation; Non GAAP free cash flow
and Non GAAP net cash/(debt). These Non GAAP measures exclude the effect of
certain cash and non-cash items, that Shire's management believes are not
related to the core performance of Shire's business.

These Non GAAP financial measures are used by Shire's management to make
operating decisions because they facilitate internal comparisons of Shire's
performance to historical results and to competitors' results.Shire's
Remuneration Committee uses certain key Non GAAP measures when assessing the
performance and compensation of employees, including Shire's executive
director.

The Non GAAP measures are presented in this press release as Shire's
management believe that they will provide investors with a means of
evaluating, and an understanding of how Shire's management evaluates, Shire's
performance and results on a comparable basis that is not otherwise apparent
on a US GAAP basis, since many non-recurring, infrequent or non-cash items
that Shire's management believe are not indicative of the core performance of
the business may not be excluded when preparing financial measures under US
GAAP.

These Non GAAP measures should not be considered in isolation from, as
substitutes for, or superior to financial measures prepared in accordance with
US GAAP.

Where applicable the following items, including their tax effect, have been
excluded when calculating Non GAAP earnings for both 2014 and 2013, and from
our Outlook:

Amortization and asset impairments:

  oIntangible asset amortization and impairment charges; and
  oOther than temporary impairment of investments.

Acquisitions and integration activities:

  oUp-front payments and milestones in respect of in-licensed and acquired
    products;
  oCosts associated with acquisitions, including transaction costs, fair
    value adjustments on contingent consideration and acquired inventory;
  oCosts associated with the integration of companies; and
  oNoncontrolling interests in consolidated variable interest entities.

Divestments, reorganizations and discontinued operations:

  oGains and losses on the sale of non-core assets;
  oCosts associated with restructuring and reorganization activities;
  oTermination costs; and
  oIncome/(losses) from discontinued operations.

Legal and litigation costs:

  oNet legal costs related to the settlement of litigation, government
    investigations and other disputes (excluding internal legal team costs).

Depreciation, which is included in Cost of product sales, R&D and SG&A costs
in our US GAAP results, has been separately disclosed for the presentation of
2014 and 2013 Non GAAP earnings.

Cash generation represents net cash provided by operating activities,
excluding up-front and milestone payments for in-licensed and acquired
products, tax and interest payments.

Free cash flow represents net cash provided by operating activities, excluding
up-front and milestone payments for in-licensed and acquired products, but
including capital expenditure in the ordinary course of business.

A reconciliation of Non GAAP financial measures to the most directly
comparable measure under US GAAP is presented on pages 19 to 21.

Growth at CER, which is a Non GAAP measure, is computed by restating 2014
results using average 2013 foreign exchange rates for the relevant period.

Average exchange rates for Q1 2014 were $1.66:£1.00 and $1.37:€1.00 (2013:
$1.58:£1.00 and $1.33:€1.00).

TRADE MARKS

All trade marks designated ^® and ™ used in this press release are trade marks
of Shire plc or companies within the Shire group except for 3TC^® and ZEFFIX^®
which are trade marks of GlaxoSmithKline, PENTASA^® which is a registered
trade mark of FERRING B.V., LIALDA^® and MEZAVANT^® which are trade marks of
Nogra Pharma Limited, DAYTRANA^® which is a trade mark of Noven Therapeutics,
LLC., CALCICHEW^® which is a trade mark of Takeda and DERMAGRAFT^® which is a
trade mark of Organogenesis. Certain trade marks of Shire plc or companies
within the Shire group are set out in Shire's Annual Report on Form 10-K for
the year ended December 31, 2013.

Investor Relations  

Eric Rojas
erojas@shire.com
+1-781-482-0999

Sarah Elton-Farr
seltonfarr@shire.com
+44-1256-894-157

Media  

Jessica Mann
jmann@shire.com
+44-1256-894-280

Gwen Fisher
gfisher@shire.com
+1-484-595-9836

SOURCE Shire plc
 
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