Shire plc Shire Plc : 3rd Quarter Results -8-

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Shire reports strong earnings growth in Q3 2017; reiterates full year

guidance

Product sales increased 7%, mainly driven by rapid growth in Immunology

franchise

Generated $1.1 billion operating cash flow; remain on-track to achieve

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our year-end debt target

On track to file a NDA for SHP555 in chronic constipation in Q4 2017 and

a BLA for SHP643 in hereditary angioedema by late 2017 or early 2018

Completed manufacturing review and identified more than $100 million in

projected additional annual savings beginning in 2019 and expected to

increase to $300 million annually by 2023

October 27, 2017 - Shire plc (Shire) (LSE: SHP, NASDAQ: SHPG) announces

unaudited results for the three months ended September 30, 2017.

Flemming Ornskov, M.D., M.P.H., Shire Chief Executive Officer,

commented:

"We delivered strong growth this quarter with product sales up 7% to

$3.5 billion despite a CINRYZE supply shortage and a LIALDA generic

entry. The Immunology franchise grew by 32%, and we saw significant

contributions across our broad and diverse portfolio, evidencing our

continued focus on commercial execution. We delivered strong Non GAAP

EPS growth of 20%, and operating cash flow more than doubled to $1.1

billion, which enabled us to further reduce our debt.

"We experienced a product shortage of CINRYZE during the quarter due to

a manufacturing interruption at a third-party manufacturer. The issue

has been addressed and production of CINRYZE has resumed. Product was

shipped to customers in early October. To enhance reliability of supply,

we plan to start in-house production of CINRYZE by Q1 2018, subject to

FDA approval, as sustainable and unconstrained CINRYZE supply is a top

priority.

"We are reiterating our 2017 full year guidance, and I look forward to

updating you on the Neuroscience strategic review by year end. I

continue to be highly confident in the strength and durability of our

business."

Financial Highlights

Q3 2017(1) Growth(1) Non GAAP CER(1)(2)

Product sales $3,534 million +7% +6%

Total revenues $3,698 million +7% +6%

Operating income from

continuing operations $709 million N/M

Non GAAP operating income(2) $1,498 million +19% +18%

Net income margin(3)(4) 15% 26ppc

Non GAAP EBITDA margin(2)(4) 44% 5ppc

Net income $551 million N/M

Non GAAP net income(2) $1,158 million +20%

Diluted earnings per ADS(5) $1.81 N/M

Non GAAP diluted earnings per

ADS(2)(5) $3.81 +20% +19%

Net cash provided by operating

activities $1,055 million +101%

Non GAAP free cash flow(2) $901 million +128%

(1) Results include Baxalta Inc. (Baxalta) (acquired on June 3, 2016),

unless otherwise noted. Percentages compare to equivalent 2016 period.

(2) The Non GAAP financial measures included within this release are

explained on pages 27 - 28, and are reconciled to the most directly

comparable financial measures prepared in accordance with US GAAP on

pages 21 - 23. (3) US GAAP net income as a percentage of total revenues.

(4) Percentage point change (ppc). (5) Diluted weighted average number

of ordinary shares of 912 million.

Product sales growth

-- Delivered product sales growth of 7%, including robust demand for

our Immunology franchise, up 32%.

-- Successful early trajectory of MYDAYIS since U.S. launch on

August 28, 2017, with over 3,000 physicians prescribing to over 11,000

patients as of October 17, 2017.

-- Genetic Diseases was impacted by lower product sales for

CINRYZE due to a product shortage resulting from a manufacturing

interruption. The manufacturing issue has been addressed and production

of CINRYZE resumed. Approximately $100 million of product was shipped to

customers in early October.

-- Increasing demand for XIIDRA; 9% script growth since Q2 2017.

Earnings growth

-- Generated Non GAAP earnings per ADS of $3.81, underscoring continued

focus on commercial excellence and operating efficiency.

-- Reported Non GAAP EBITDA margin of 44% for the quarter; on-track to

achieve at least $700 million in synergies by Year 3 as we continued to

progress the Baxalta integration.

-- Completed manufacturing network review; identified more than $100 million

in projected additional annual savings beginning in 2019. Expected to

increase to $300 million annually by 2023.

Strong cash flow

-- Strong operating cash flow enabled $920 million reduction in Non GAAP net

debt since June 30, 2017; remain on-track to achieve our year-end debt

target.

Product and Pipeline Highlights

Regulatory updates

-- Submitted an application to the U.S. Food and Drug

Administration (FDA) to enable a second source of CINRYZE production at

an in-house manufacturing facility to enhance reliability of supply.

-- Submitted lifitegrast Marketing Authorization Application for

treatment of dry eye disease in Europe; Canadian approval anticipated by

Q1 2018.

-- Received FDA Fast Track Designation for SHP607 for the

prevention of chronic lung disease in extremely premature infants.

-- Positive opinion from Committee for Medicinal Products for

Human Use (CHMP) of the European Medicines Agency (EMA) recommending the

marketing authorization for lyophilized ONCASPAR (pegaspargase), as a

component of antineoplastic combination therapy in acute lymphoblastic

leukemia (ALL) in all ages.

-- Received FDA Orphan Drug Designation and Investigational New

Drug (IND) status for SHP654 for the treatment of hemophilia A.

-- Granted a label extension for FIRAZYR in Europe by the European

Commission (EC), broadening its use to the treatment of acute attacks of

HAE in adolescents and children aged 2 years and older.

-- On track to file a Biologics License Application (BLA) for

SHP643 in late 2017 or early 2018.

-- On track to file a New Drug Application (NDA) for SHP555 in late

Q4 2017.

Clinical and business development updates

-- Strategic review of Neuroscience franchise on track; update

planned for year end.

-- Reported positive topline Phase 3 results for subcutaneous

SHP616 Liquid in patients 12 years of age or older with symptomatic

Hereditary Angioedema (HAE).

-- Reported positive topline results for INTUNIV in Japan,

evaluated in Phase 3 clinical trial in adults with ADHD.

FINANCIAL SUMMARY - THIRD QUARTER 2017 COMPARED TO THIRD QUARTER 2016

Revenues

-- Product sales increased 7% to $3,534 million (Q3 2016: $3,315 million),

primarily due to strong growth from our Immunology franchise, up 32%,

Neuroscience franchise, up 12% and our Hematology franchise, up 4%.

Product sales also benefited from a full quarter of Ophthalmics product

sales. Growth was held back by the launch of generic competition for

LIALDA and a supply constraint related to CINRYZE, which negatively

impacted our Internal Medicine and Genetic Diseases franchises, down 24%

and 7%, respectively.

-- Royalties and other revenues increased 20% to $164 million, primarily due

to an increase in royalty streams acquired with Dyax and SENSIPAR

royalties.

Operating results

-- Operating income was $709 million (Q3 2016: operating loss of $406

million). The increase was primarily due to lower expense relating to the

unwind of inventory fair value adjustments and costs related to licensing

arrangements, combined with higher revenues, partially offset by higher

amortization of acquired intangible assets.

-- Non GAAP operating income increased 19% to $1,498 million (Q3 2016:

$1,254 million), primarily due to higher revenues and lower expenses as a

percentage of total revenues driven by operating efficiencies which were

impacted by the realization of Baxalta operating expense synergies.

-- Non GAAP EBITDA margin as a percentage of total revenues increased to 44%

(Q3 2016: 39%), primarily due to higher revenues and lower expenses as a

percentage of total revenues, driven by operating efficiencies which were

impacted by the realization of Baxalta operating expense synergies.

Earnings per share (EPS)

-- Diluted earnings per American Depositary Shares (ADS) were $1.81 (Q3

2016: diluted losses per ADS of $1.29). The increase is primarily due to

higher operating income from lower expenses relating to the unwind of

inventory fair value adjustments and costs related to licensing

arrangements, combined with higher revenues.

-- Non GAAP diluted earnings per ADS increased 20% to $3.81 (Q3 2016: $3.17),

due to higher Non GAAP operating income primarily related to higher

revenues and higher gross margin.

Cash flows

-- Net cash provided by operating activities increased 101% to $1,055

million (Q3 2016: $526 million), primarily due to strong cash receipts

from higher sales and operating profitability, and lower Baxalta

acquisition and integration payments. Also, Q3 2016 net cash provided by

operating activities was negatively impacted by a payment associated with

the termination of a biosimilar collaboration acquired with Baxalta.

-- Non GAAP free cash flow increased 128% to $901 million (Q3 2016: $395

million), driven by the growth in net cash provided by operating

activities noted above, combined with a decrease in capital expenditures

of $46 million.

Debt

-- Non GAAP net debt at September 30, 2017 decreased $2,063 million since

December 31, 2016, to $20,376 million (December 31, 2016: $22,439

million). The decrease was primarily due to a $2,403 million net cash

repayment of debt, partially offset by a lower cash balance. Non GAAP net

debt represents aggregate long and short term borrowings of $20,236

million, and capital leases of $349 million, partially offset by cash and

cash equivalents of $209 million.

OUTLOOK

We are reiterating our guidance from Q2 2017.

The guidance incorporates accelerated synergy capture as well as the

impact of LIALDA generic competition. Our depreciation estimate for the

year is $450 - $500 million, and we anticipate capital expenditures of

$800 - $900 million.

The diluted earnings per ADS forecast assumes a weighted average number

of 914 million fully diluted ordinary shares outstanding for 2017.

Full Year 2017 US GAAP Outlook Non GAAP Outlook(1)

Total product sales $14.3 - $14.6 billion $14.3 - $14.6 billion

Royalties & other revenues $600 - $700 million $600 - $700 million

Gross margin as a percentage of

total revenue(2) 67.5% - 69.5% 74.5% - 76.5%

Combined R&D and SG&A $5.3 - $5.5 billion $4.9 - $5.1 billion

Net interest/other $500 - $600 million $500 - $600 million

Effective tax rate 7% 16% - 17%

Diluted earnings per ADS(3) $5.65 - $6.05 $14.80 - $15.20

(1) For a list of items excluded from Non GAAP Outlook, refer to pages

27 - 28 of this release.

(2) Gross margin as a percentage of total revenues excludes amortization

of acquired intangible assets.

(3) See page 23 for a reconciliation between US GAAP diluted earnings

per ADS and Non GAAP diluted earnings per ADS.

RECENT DEVELOPMENTS

Products

FIRAZYR for the treatment of HAE in Europe

-- On October 26, 2017, Shire announced that the EC has approved

a label extension for FIRAZYR, broadening its use to the treatment of

acute attacks of HAE in adolescents and children aged 2 years and older.

INTUNIV for the treatment of attention deficit hyperactivity disorder

(ADHD) in Japan

-- On September 20, 2017, Shire and its partner in Japan, Shionogi & Co.,

Ltd, announced positive topline results for a Phase 3 study evaluating

INTUNIV in adult patients with ADHD in Japan.

MYDAYIS for the treatment of ADHD

-- On August 28, 2017, Shire announced that MYDAYIS was available by

prescription in the United States. The FDA approved MYDAYIS on June 20,

2017 for patients 13 years and older with ADHD.

Lifitegrast for the treatment of dry eye disease (DED) in Europe

-- On August 15, 2017, Shire announced that the Marketing Authorization

Application for lifitegrast, submitted on August 7, 2017, was validated

by the UK as the Reference Member State involved in the Decentralized

Procedure.

Pipeline

SHP654 for the treatment of hemophilia A

-- On October 25, 2017, Shire announced that the FDA awarded Orphan Drug

Designation to SHP654 (also designated as BAX 888), an investigational

factor VIII (FVIII) gene therapy for the treatment of hemophilia A. The

FDA also granted Shire IND status for SHP654.

SHP674 (ONCASPAR) for the treatment of acute lymphoblastic leukemia

-- On October 12, 2017, Shire received a positive opinion from the CHMP

recommending marketing authorization for Lyophilized ONCASPAR for use as

a component of antineoplastic combination therapy in acute lymphoblastic

leukemia (ALL) in all ages.

SHP607 for the treatment of complications of prematurity

-- On September 12, 2017, Shire announced that the FDA has granted Fast

Track designation for SHP607 for the prevention of chronic lung disease

in extremely premature infants. SHP607 is currently in Phase 2 clinical

development.

SHP616 for the treatment of HAE

-- On September 11, 2017, Shire announced positive topline Phase 3 results

for the SAHARA study that evaluated the efficacy and safety of

subcutaneously administered C1 esterase inhibitor [human] Liquid for

Injection in patients 12 years of age or older with symptomatic HAE.

Board Changes

On August 21, 2017, Shire announced that Jeff Poulton, Chief Financial

Officer, will be leaving Shire. The Board has commenced a formal search

for a successor and Jeff will continue to serve in his current role as

this search progresses. During this transition period, Jeff will remain

on the Executive Committee and on the Board of Directors of Shire plc

until the end of the year.

In addition, and following the announcement that Dominic Blakemore will

be appointed Group Chief Executive of Compass Group PLC on April 1,

2018, the Board has approved the appointment of Sara Mathew as Chair of

the Audit Compliance & Risk Committee to take place with immediate

effect. Dominic Blakemore will remain a member of the Audit Compliance &

Risk Committee.

ADDITIONAL INFORMATION

The following additional information is included in this press release:

Page

Overview of Third Quarter 2017 Financial Results 8

Financial Information 13

Non GAAP Reconciliations 21

Notes to Editors 24

Forward-Looking Statements 25

Non GAAP Measures 27

Trademarks 28

For further information please contact:

Investor Relations

Ian Karp ikarp@shire.com +1 781 482 9018

Robert Coates rcoates@shire.com +44 203 549 0874

Media

Lisa Adler lisa.adler@shire.com +1 617 588 8607

Katie Joyce kjoyce@shire.com +1 781 482 2779

Dial in details for the live conference call for investors at 14:00 BST

/ 9:00 EDT on October 27, 2017:

UK dial in: 0808 237 0030 or 020 3139 4830

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

International Click here:

Access http://events.arkadin.com/ev/docs/NE_FEL_Events_International_Access

Numbers: _List.pdf

Password/Conf 31097524#

ID:

Live Webcast: Click here

http://investors.shire.com/presentations-and-reports/quarterly-resul

ts-and-presentations%20

The quarterly earnings presentation will be available today at 13:00 BST

/ 8:00 EDT on:

- Shire.com Investors section

http://investors.shire.com/presentations-and-reports/quarterly-results-and-presentations%20

- Shire's IR Briefcase in the iTunes Store

https://itunes.apple.com/us/app/shire-ir-briefcase/id529486874?mt=8

OVERVIEW OF THIRD QUARTER 2017 FINANCIAL RESULTS COMPARED TO THIRD

QUARTER 2016

1. Product sales

Product sales increased 7% to $3,534 million (Q3 2016: $3,315 million).

Total Sales

(in millions) Year on year growth

Product sales by U.S. International Total

franchise Sales Sales Sales Reported Non GAAP CER

HEMOPHILIA $ 357.5 $ 367.8 $ 725.3 +3% +3%

INHIBITOR

THERAPIES 70.6 120.1 190.7 +5% +4%

Hematology 428.1 487.9 916.0 +4% +3%

IMMUNOGLOBULIN

THERAPIES 486.6 118.5 605.1 +28% +28%

BIO THERAPEUTICS 86.3 110.3 196.6 +47% +45%

Immunology 572.9 228.8 801.7 +32% +32%

VYVANSE 476.8 61.6 538.4 +5% +5%

ADDERALL XR 99.4 6.6 106.0 +32% +32%

MYDAYIS 10.2 - 10.2 N/A N/A

Other Neuroscience 6.7 29.8 36.5 +56% +53%

Neuroscience 593.1 98.0 691.1 +12% +12%

FIRAZYR 173.6 21.9 195.5 +34% +33%

ELAPRASE 41.4 111.5 152.9 +4% +1%

REPLAGAL - 117.2 117.2 -1% -4%

VPRIV 37.5 52.1 89.6 +2% +1%

CINRYZE 46.2 10.7 56.9 -66% -66%

KALBITOR 16.0 - 16.0 +44% +44%

Genetic Diseases 314.7 313.4 628.1 -7% -8%

LIALDA/MEZAVANT 61.4 25.3 86.7 -58% -59%

GATTEX/REVESTIVE 72.6 12.3 84.9 +46% +45%

PENTASA 72.1 - 72.1 -16% -16%

NATPARA 39.1 - 39.1 +68% +68%

Other Internal

Medicine 12.0 56.2 68.2 -22% -24%

Internal Medicine 257.2 93.8 351.0 -24% -25%

Ophthalmics 77.4 - 77.4 N/M N/M

Oncology 47.2 21.3 68.5 +24% +22%

Total product

sales $2,290.6 $ 1,243.2 $3,533.8 +7% +6%

Hematology

Hematology product sales increased 4%, with growth in both our

hemophilia and inhibitor therapies products.

Growth across the portfolio was driven by underlying demand in our

international markets, which also benefited from the timing of large

orders. U.S. sales were flat year over year, as increased demand,

primarily related to our FVIII products, was offset by the impact of

destocking in Q3 2017 compared to stocking in Q3 2016.

Immunology

Immunology product sales increased 32% with strong growth from both our

immunoglobulin therapies and bio therapeutics products.

The U.S. benefited from growth in demand and stocking for GAMMAGARD

liquid, and increasing demand for our subcutaneous portfolio.

International growth was primarily due to the timing of large orders and

strong underlying performance in all regions.

Neuroscience

Neuroscience product sales increased 12%, primarily driven by VYVANSE

and ADDERALL XR.

VYVANSE sales increased 5%, primarily due to the benefit of a price

increase taken since Q3 2016, increased demand resulting from U.S. ADHD

market growth and solid performance in our international markets.

ADDERALL XR sales increased 32%, primarily due to stocking in Q3 2017

compared to destocking in the prior year.

MYDAYIS, which was made available to patients on August 28, 2017,

contributed $10 million of product sales.

Genetic Diseases

Genetic Diseases product sales decreased 7%, primarily due to the impact

of a CINRYZE supply constraint, which was partially offset by FIRAZYR

growth.

CINRYZE sales decreased 66% due to supply constraints caused by a

manufacturing interruption that was experienced during the quarter. The

issue has been addressed, and production has resumed. Approximately $100

million of product was shipped to customers in early October. We

continue to work to stabilize CINRYZE manufacturing, however supply

constraints may continue until we secure a second source of production.

Subject to FDA approval, we expect to add CINRYZE in-house production

capabilities in early Q1 2018.

FIRAZYR sales increased 34%, due to increased patient demand and

stocking, in part due to the CINRYZE supply constraints.

Internal Medicine

Internal Medicine product sales decreased 24%, as the impact of LIALDA

generic competition was partially offset by growth from GATTEX/REVESTIVE

and NATPARA.

LIALDA/MEZAVANT sales decreased 58%, due to the impact of generic

competition in Q3 2017. An authorized generic was launched in the second

half of Q3 2017.

GATTEX/REVESTIVE and NATPARA continued to perform well with sales

increasing 46% and 68%, respectively, primarily due to an increase in

the numbers of patients on therapy.

Ophthalmics

Ophthalmics product sales relate to XIIDRA, which was made available to

patients starting on August 29, 2016. XIIDRA contributed $77 million of

product sales with 9% prescription growth since Q2 2017.

Oncology

Oncology product sales increased 24%. Growth was driven by sales of

ONCASPAR and ONIVYDE, the latter of which was approved in the EU on

October 18, 2016.

1. Royalties and other revenues

(in millions) Year on year growth

Revenue Reported Non GAAP CER

SENSIPAR royalties $ 42.8 +11% +11%

3TC and ZEFFIX royalties 16.1 -1% -1%

FOSRENOL royalties 14.3 +4% +12%

ADDERALL XR royalties 7.7 +64% +64%

Other royalties and revenues 82.9 +31% +28%

Total royalties and other

revenues $ 163.8 +20% +19%

Royalties and other Revenues increased 20%, primarily due to an increase

in royalty streams acquired with Dyax and SENSIPAR royalties.

1. Financial details

Cost of sales

% of total % of total

(in millions) Q3 2017 revenues Q3 2016 revenues

Cost of sales (US GAAP) $1,001.4 27% $1,736.2 50%

Expense related to the unwind of inventory fair value

adjustments (63.3) (803.8)

Inventory write-down relating to the closure of a

facility - (11.6)

Depreciation (70.1) (54.5)

Non GAAP cost of sales $ 868.0 23% $ 866.3 25%

Cost of sales as a percentage of total revenues decreased to 27%,

primarily due to lower expense related to the unwind of inventory fair

value adjustments.

Non GAAP cost of sales as a percentage of total revenues decreased to

23%, primarily driven by operating efficiencies and the realization of

synergies from the acquisition of Baxalta.

R&D

% of total % of total

(in millions) Q3 2017 revenues Q3 2016 revenues

R&D (US GAAP) $402.8 11% $511.1 15%

Costs relating

to license

arrangements - (110.0)

Depreciation (10.8) (9.0)

Non GAAP R&D $392.0 11% $392.1 11%

R&D expenditure decreased by $108 million, or 21%, primarily due to

lower costs relating to license arrangements.

Non GAAP R&D expenditure, and expense as a percentage of total revenues,

remained consistent with Q3 2016, as an increase in costs relating to

our late stage pipeline was offset by savings on discontinued programs.

SG&A

% of total % of total

(in millions) Q3 2017 revenues Q3 2016 revenues

SG&A (US GAAP) $859.7 23% $875.6 25%

Legal and

litigation

costs (1.0) 0.5

Depreciation (39.0) (29.6)

Non GAAP SG&A $819.7 22% $846.5 25%

SG&A expenditure decreased by $16 million, or 2%, primarily due to the

realization of synergies from the acquisition of Baxalta and lower

XIIDRA marketing spend, which was partially offset by MYDAYIS launch

costs and increased depreciation expense.

Non GAAP SG&A expenditure decreased by $27 million, or 3%, primarily due

to the realization of synergies from the acquisition of Baxalta and

lower XIIDRA marketing spend, which was partially offset by MYDAYIS

launch costs. Non GAAP SG&A as a percentage of total revenues decreased

3 percentage points.

Amortization of acquired intangible assets

Shire recorded amortization of acquired intangible assets of $482

million (Q3 2016: $355 million), primarily related to intangible assets

acquired with Baxalta and the acceleration of CINRYZE amortization

following positive SHP643 Phase 3 results.

Integration and acquisition costs

In Q3 2017, Shire recorded integration and acquisition costs of $237

million, primarily relating to the Baxalta transaction. Costs included

asset impairment charges, employee severance, the acceleration of stock

compensation, third-party professional fees and expenses associated with

facility consolidations.

In Q3 2016, Shire recorded integration and acquisition costs of $285

million, primarily relating to the Baxalta and Dyax transactions. Costs

included employee severance, the acceleration of stock compensation,

third-party professional fees, contract terminations and other

transaction-related fees.

Reorganization costs

In Q3 2017, Shire recorded reorganization costs of $5 million. In Q3

2016, Shire recorded reorganization costs of $101 million, primarily

related to the closure of a facility at the Los Angeles manufacturing

site.

Other expense, net

(in millions) Q3 2017 Q3 2016

Other expense, net (US GAAP) $(140.5) $(191.3)

Amortization of one-time upfront borrowing costs for

Baxalta and Dyax 1.9 47.4

Loss on sale of long term investments 4.3 -

Non GAAP Other expense, net $(134.3) $(143.9)

Other expense, net decreased by $51 million, primarily due to lower

amortization of one-time upfront borrowing costs for Baxalta and Dyax.

Non GAAP Other expense, net decreased by $10 million.

Taxation

(in millions)

Effective Effective

Q3 2017 tax rate Q3 2016 tax rate

Income tax

expense (US

GAAP) $ (13.5) 2% $ 229.6 (38%)

Non GAAP tax

adjustments (189.0) (377.3)

Non GAAP Income

tax expense $(202.5) 15% $(147.7) 13%

The effective tax rate on US GAAP income in Q3 2017 was 2% (Q3 2016:

-38%) and on a Non GAAP basis was 15% (Q3 2016: 13%).

The effective rate in Q3 2017 on US GAAP income from continuing

operations is low, primarily due to the combined impact of the relative

quantum of profit before tax for the period by jurisdiction as well as

significant acquisition and integration costs. Additionally, certain

discrete events occurred during Q3 2017 which contributed to the low

effective tax rate, including a tax benefit associated with filing of

the US tax returns and the reversal of prior period income tax reserves.

Discontinued operations

The loss from discontinued operations in Q3 2017 was less than $1

million, net of taxes. The loss in Q3 2016 was $18 million, net of taxes,

primarily due to the establishment of legal contingencies related to the

divested DERMAGRAFT business.

FINANCIAL INFORMATION

TABLE OF CONTENTS

Page

Unaudited US GAAP Consolidated Balance Sheets 14

Unaudited US GAAP Consolidated Statements of Operations 15

Unaudited US GAAP Consolidated Statements of Cash

Flows 17

Selected Notes to the Unaudited US GAAP Financial

Statements

(1) Earnings per share 19

(2) Analysis of revenues 20

Non GAAP reconciliations 21

Unaudited US GAAP Consolidated Balance Sheets

(in millions, except par value of shares)

September December 31,

30, 2017 2016

ASSETS

Current assets:

Cash and cash equivalents $ 209.3 $ 528.8

Restricted cash 34.3 25.6

Accounts receivable, net 2,840.7 2,616.5

Inventories 3,427.3 3,562.3

Prepaid expenses and other current assets 779.9 806.3

Total current assets 7,291.5 7,539.5

Non-current assets:

Investments 199.7 191.6

Property, plant and equipment (PP&E), net 6,579.5 6,469.6

Goodwill 19,718.4 17,888.2

Intangible assets, net 33,350.3 34,697.5

Deferred tax asset 94.6 96.7

Other non-current assets 242.5 152.3

Total assets $67,476.5 $67,035.4

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable and accrued expenses $ 3,870.5 $ 4,312.4

Short term borrowings and capital leases 2,629.2 3,068.0

Other current liabilities 961.4 362.9

Total current liabilities 7,461.1 7,743.3

Non-current liabilities:

Long term borrowings and capital leases 17,956.0 19,899.8

Deferred tax liability 7,681.7 8,322.7

Other non-current liabilities 1,723.1 2,121.6

Total liabilities 34,821.9 38,087.4

Equity:

Common stock of 5p par value; 1,500 shares authorized;

and 915.9 shares issued and outstanding (2016: 1,500

shares authorized; and 912.2 shares issued and outstanding) 81.5 81.3

Additional paid-in capital 25,020.9 24,740.9

Treasury stock: 8.4 shares (2016: 9.1 shares) (283.0) (301.9)

Accumulated other comprehensive income/(loss) 969.1 (1,497.6)

Retained earnings 6,866.1 5,925.3

Total equity 32,654.6 28,948.0

Total liabilities and equity $67,476.5 $67,035.4

Unaudited US GAAP Consolidated Statements of Operations

(in millions)

3 months ended 9 months ended September

September 30, 30,

2017 2016 2017 2016

Revenues:

Product sales $3,533.8 $3,315.4 $10,537.9 $7,264.8

Royalties & other revenues 163.8 136.7 477.8 325.7

Total revenues 3,697.6 3,452.1 11,015.7 7,590.5

Costs and expenses:

Cost of sales 1,001.4 1,736.2 3,437.3 2,762.9

Research and development 402.8 511.1 1,324.5 1,023.0

Selling, general and administrative 859.7 875.6 2,647.7 2,025.8

Amortization of acquired intangible assets 482.4 354.9 1,280.5 702.5

Integration and acquisition costs 237.0 284.5 696.7 738.6

Reorganization costs 5.4 101.4 24.5 115.7

Loss/(gain) on sale of product rights 0.3 (5.7) (0.4) (12.2)

Total operating expenses 2,989.0 3,858.0 9,410.8 7,356.3

Operating income/(loss) from continuing operations 708.6 (405.9) 1,604.9 234.2

Interest income 1.5 9.3 5.7 11.9

Interest expense (141.8) (186.9) (425.4) (318.8)

Other (expense)/income, net (0.2) (13.7) 6.8 (16.2)

Total other expense, net (140.5) (191.3) (412.9) (323.1)

Income/(loss) from continuing operations before income

taxes and equity in (losses)/earnings of equity method

investees 568.1 (597.2) 1,192.0 (88.9)

Income taxes (13.5) 229.6 (44.6) 218.4

Equity in (losses)/earnings of equity method investees,

net of taxes (3.4) (0.9) 0.1 (1.9)

Income/(loss) from continuing operations, net of taxes 551.2 (368.5) 1,147.5 127.6

(Loss)/gain from discontinued operations, net of taxes (0.4) (18.3) 18.6 (257.5)

Net income/(loss) $ 550.8 $ (386.8) $ 1,166.1 $ (129.9)

Unaudited US GAAP Consolidated Statements of Operations (continued)

(in millions, except per share amounts)

3 months ended September 9 months ended

30, September 30,

2017 2016 2017 2016

Earnings/(loss)

per Ordinary

Share - basic

Earnings/(loss)

from continuing

operations $ 0.61 $ (0.41) $ 1.27 $ 0.18

(Loss)/gain from

discontinued

operations (0.00) (0.02) 0.02 (0.36)

Earnings/(loss)

per Ordinary

Share - basic $ 0.61 $ (0.43) $ 1.29 $ (0.18)

Earnings/(loss)

per ADS -

basic $ 1.82 $ (1.29) $ 3.86 $ (0.54)

Earnings/(loss)

per Ordinary

Share - diluted

Earnings/(loss)

from continuing

operations $ 0.60 $ (0.41) $ 1.26 $ 0.18

(Loss)/earnings

from

discontinued

operations (0.00) (0.02) 0.02 (0.36)

Earnings/(loss)

per Ordinary

Share -

diluted $ 0.60 $ (0.43) $ 1.28 $ (0.18)

Earnings/(loss)

per ADS -

diluted $ 1.81 $ (1.29) $ 3.84 $ (0.54)

Weighted average

number of

shares:

Basic 907.2 900.2 905.9 725.5

Diluted 911.6 900.2 912.1 725.5

Unaudited US GAAP Consolidated Statements of Cash Flows

(in millions)

3 months ended

September 30, 9 months ended September 30,

2017 2016 2017 2016

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income/(loss) $ 550.8 $(386.8) $1,166.1 $ (129.9)

Adjustments to reconcile net income/(loss) to net

cash provided by operating activities:

Depreciation and amortization 602.3 448.0 1,644.0 877.8

Share based compensation 53.3 74.8 159.7 269.6

Amortization of deferred financing fees 4.1 71.6 10.9 121.7

Expense related to the unwind of inventory fair value

adjustments 63.3 803.8 688.7 1,097.3

Change in deferred taxes (99.1) (217.7) (392.4) (546.9)

Change in fair value of contingent consideration (3.4) 10.2 144.3 (34.8)

Impairment of PP&E and intangible assets 114.0 89.2 167.6 98.1

Other, net 73.5 52.9 88.3 35.3

Changes in operating assets and liabilities:

Increase in accounts receivable (120.0) (230.2) (301.5) (411.2)

Increase in sales deduction accrual 36.9 41.8 94.0 108.2

Increase in inventory (73.6) (111.6) (245.2) (228.0)

(Increase)/decrease in prepayments and other assets (34.2) (92.9) 70.4 (66.4)

(Decrease)/increase in accounts payable and other

liabilities (112.7) (27.5) (557.8) 315.2

Net cash provided by operating activities 1,055.2 525.6 2,737.1 1,506.0

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of PP&E and long term investments (174.4) (223.4) (565.5) (402.5)

Purchases of businesses, net of cash acquired - - - (17,476.2)

Proceeds from sale of investments 7.5 0.6 48.1 0.6

Movements in restricted cash - 1.1 (8.6) 68.3

Other, net 31.6 (4.8) 34.8 (1.5)

Net cash used in investing activities (135.3) (226.5) (491.2) (17,811.3)

Unaudited US GAAP Consolidated Statements of Cash Flows (continued)

(in millions)

3 months ended September 9 months ended September

30, 30,

2017 2016 2017 2016

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from revolving line of credit, long term

and short term borrowings 1,149.7 12,847.3 3,261.6 31,742.3

Repayment of revolving line of credit, long term and

short term borrowings (2,136.6) (13,132.6) (5,664.5) (14,632.9)

Payment of dividend - - (234.7) (130.2)

Debt issuance costs - (58.7) - (171.0)

Proceeds from exercise of options 12.7 137.1 92.2 137.2

Other, net (2.2) (56.7) (26.2) (44.8)

Net cash (used in)/provided by financing activities (976.4) (263.6) (2,571.6) 16,900.6

Effect of foreign exchange rate changes on cash and

cash equivalents 2.1 (0.3) 6.2 (2.2)

Net (decrease)/increase in cash and cash equivalents (54.4) 35.2 (319.5) 593.1

Cash and cash equivalents at beginning of period 263.7 693.4 528.8 135.5

Cash and cash equivalents at end of period $ 209.3 $ 728.6 $ 209.3 $ 728.6

Selected Notes to the Unaudited US GAAP Financial Statements

1. Earnings Per Share (EPS)

(in millions)

3 months ended 9 months ended September

September 30, 30,

2017 2016 2017 2016

Income/(loss)

from

continuing

operations $551.2 $(368.5) $ 1,147.5 $ 127.6

(Loss)/gain

from

discontinued

operations (0.4) (18.3) 18.6 (257.5)

Numerator for

EPS $550.8 $(386.8) $ 1,166.1 $ (129.9)

Weighted

average number

of shares:

Basic 907.2 900.2 905.9 725.5

Effect of

dilutive

shares:

Share based

awards to

employees 4.4 - 6.2 -

Diluted 911.6 900.2 912.1 725.5

The share equivalents not included in the calculation of the diluted

weighted average number of shares are shown below:

Share based awards to employees 16.2 14.6 14.8 9.7

Selected Notes to the Unaudited US GAAP Financial Statements

(2) Analysis of revenues

(in millions)

3 months ended 9 months ended

September 30, September 30,

2017 2016 2017 2016

Product sales by

franchise

HEMOPHILIA $ 725.3 $ 702.4 $ 2,119.6 $ 978.0

INHIBITOR

THERAPIES 190.7 181.7 631.9 255.7

Hematology 916.0 884.1 2,751.5 1,233.7

IMMUNOGLOBULIN

THERAPIES 605.1 472.5 1,613.9 610.7

BIO THERAPEUTICS 196.6 134.0 546.7 185.3

Immunology 801.7 606.5 2,160.6 796.0

VYVANSE 538.4 512.6 1,620.3 1,539.5

ADDERALL XR 106.0 80.5 242.3 281.1

MYDAYIS 10.2 - 25.9 -

Other

Neuroscience 36.5 23.4 91.3 81.2

Neuroscience 691.1 616.5 1,979.8 1,901.8

FIRAZYR 195.5 146.3 461.4 411.3

ELAPRASE 152.9 146.7 454.5 424.3

REPLAGAL 117.2 118.9 349.0 340.5

VPRIV 89.6 87.7 257.3 259.3

CINRYZE 56.9 165.4 458.7 502.6

KALBITOR 16.0 11.1 48.3 39.2

Genetic Diseases 628.1 676.1 2,029.2 1,977.2

LIALDA/MEZAVANT 86.7 208.6 469.6 570.3

GATTEX/REVESTIVE 84.9 58.1 229.2 154.3

PENTASA 72.1 85.4 224.5 222.3

NATPARA 39.1 23.3 103.3 58.8

Other Internal

Medicine 68.2 87.3 227.5 260.6

Internal Medicine 351.0 462.7 1,254.1 1,266.3

Ophthalmics 77.4 14.1 173.4 14.1

Oncology 68.5 55.4 189.3 75.7

Total product

sales 3,533.8 3,315.4 10,537.9 7,264.8

Royalties and

other revenues

SENSIPAR

royalties 42.8 38.7 128.1 112.2

3TC and ZEFFIX

royalties 16.1 16.2 38.8 43.3

FOSRENOL

royalties 14.3 13.7 35.0 34.3

ADDERALL XR

royalties 7.7 4.7 33.6 15.7

Other Royalties

and revenues 82.9 63.4 242.3 120.2

Total royalties

and other

revenues 163.8 136.7 477.8 325.7

Total revenues $3,697.6 $3,452.1 $11,015.7 $7,590.5

Non GAAP reconciliations

(in millions)

Reconciliation of US GAAP net income to Non GAAP EBITDA and Non GAAP

operating income:

3 months ended September 9 months ended September

30, 30,

2017 2016 2017 2016

US GAAP net income/(loss) $ 550.8 $ (386.8) $1,166.1 $ (129.9)

Add back/(deduct):

Loss/(gain) from discontinued operations, net of tax 0.4 18.3 (18.6) 257.5

Equity in losses/(earnings) of equity method investees,

net of taxes 3.4 0.9 (0.1) 1.9

Income taxes 13.5 (229.6) 44.6 (218.4)

Other expense, net 140.5 191.3 412.9 323.1

US GAAP operating income from continuing operations 708.6 (405.9) 1,604.9 234.2

Add back/(deduct) Non GAAP adjustments:

Expense related to the unwind of inventory fair value

adjustments 63.3 803.8 688.7 1,097.3

Impairment of acquired intangible assets - - 20.0 8.9

Costs relating to license arrangements - 110.0 123.7 110.0

Legal and litigation costs 1.0 (0.5) 8.6 16.1

Amortization of acquired intangible assets 482.4 354.9 1,280.5 702.5

Integration and acquisition costs 237.0 284.5 696.7 738.6

Reorganization costs 5.4 101.4 24.5 115.7

Loss/(gain) on sale of product rights 0.3 (5.7) (0.4) (12.2)

Depreciation 119.9 93.1 363.5 175.3

Other Non GAAP adjustments - 11.6 (4.0) 11.6

Non GAAP EBITDA 1,617.9 1,347.2 4,806.7 3,198.0

Depreciation (119.9) (93.1) (363.5) (175.3)

Non GAAP operating income $1,498.0 $1,254.1 $4,443.2 $3,022.7

Net income margin(1) 15% (11)% 11% (2)%

Non GAAP EBITDA margin(2) 44% 39% 44% 42%

(1) Net income as a percentage of total revenues.

(2) Non GAAP EBITDA as a percentage of total revenues.

Reconciliation of revenues to Non GAAP gross margin:

3 months ended September 9 months ended September

30, 30,

2017 2016 2017 2016

Revenues $3,697.6 $3,452.1 $11,015.7 $7,590.5

Cost of sales (US GAAP) (1,001.4) (1,736.2) (3,437.3) (2,762.9)

US GAAP gross margin 2,696.2 1,715.9 7,578.4 4,827.6

Add back Non GAAP adjustments:

Expense related to the unwind of inventory fair value

adjustments 63.3 803.8 688.7 1,097.3

Inventory write-down relating to the closure of a

facility - 11.6 - 11.6

Depreciation 70.1 54.5 209.2 85.2

Non GAAP gross margin $2,829.6 $2,585.8 $ 8,476.3 $6,021.7

Non GAAP gross margin % (1) 76.5% 74.9% 76.9% 79.3%

(1) Non GAAP gross margin as a percentage of total

revenues.

Non GAAP reconciliations

(in millions, except per ADS amounts)

Reconciliation of US GAAP net income to Non GAAP net income:

3 months ended 9 months ended

September 30, September 30,

2017 2016 2017 2016

US GAAP net income/(loss) $ 550.8 $(386.8) $1,166.1 $ (129.9)

Expense related to the unwind of inventory fair value

adjustments 63.3 803.8 688.7 1,097.3

Impairment of acquired intangible assets - - 20.0 8.9

Costs relating to license arrangements - 110.0 123.7 110.0

Legal and litigation costs 1.0 (0.5) 8.6 16.1

Amortization of acquired intangible assets 482.4 354.9 1,280.5 702.5

Integration and acquisition costs 237.0 284.5 696.7 738.6

Reorganization costs 5.4 101.4 24.5 115.7

Loss/(gain) on sale of product rights 0.3 (5.7) (0.4) (12.2)

Amortization of one-time upfront borrowing costs for

Baxalta and Dyax 1.9 47.4 5.4 91.5

Loss/(gain) on sale of long term investments 4.3 - (8.9) 6.0

Loss/(gain) from discontinued operations 0.4 24.0 (29.6) 358.6

Other Non GAAP adjustments - 11.6 (4.0) 11.6

Non GAAP tax adjustments (189.0) (383.0) (576.5) (748.7)

Non GAAP net income $1,157.8 $ 961.6 $3,394.8 $2,366.0

Reconciliation of US GAAP diluted earnings per ADS to Non GAAP diluted

earnings per ADS:

3 months ended 9 months ended

September 30, September 30,

2017 2016 2017 2016

US GAAP diluted earnings/(losses) per ADS $1.81 $(1.29) $ 3.84 $(0.54)

Expense related to the unwind of inventory fair value

adjustments 0.21 2.66 2.26 4.51

Impairment of acquired intangible assets - - 0.07 0.04

Costs relating to license arrangements - 0.36 0.41 0.45

Legal and litigation costs 0.00 0.00 0.03 0.07

Amortization of acquired intangible assets 1.59 1.17 4.21 2.88

Integration and acquisition costs 0.78 0.94 2.29 3.03

Reorganization costs 0.02 0.33 0.08 0.47

Loss/(gain) on sale of product rights 0.00 (0.02) (0.00) (0.05)

Amortization of one-time upfront borrowing costs for

Baxalta and Dyax 0.01 0.16 0.02 0.38

Loss/(gain) on sale of long term investments 0.01 - (0.03) 0.02

Loss/(gain) from discontinued operations 0.00 0.08 (0.10) 1.47

Other Non GAAP adjustments - 0.04 (0.01) 0.05

Non GAAP tax adjustments (0.62) (1.26) (1.90) (3.07)

Non GAAP diluted earnings per ADS $3.81 $ 3.17 $11.17 $ 9.71

Non GAAP reconciliations

(in millions, except per ADS amounts)

Reconciliation of US GAAP net cash provided by operating activities to

Non GAAP free cash flow:

3 months ended 9 months ended September

September 30, 30,

2017 2016 2017 2016

Net cash

provided by

operating

activities $1,055.2 $525.6 $2,737.1 $1,506.0

Capital

expenditure (174.4) (220.8) (565.5) (399.6)

Payments

relating to

license

arrangements 20.0 90.0 40.0 90.0

Non GAAP free

cash flow $ 900.8 $394.8 $2,211.6 $1,196.4

Non GAAP net debt comprises:

September 30, 2017 December 31, 2016

Cash and cash equivalents $ 209.3 $ 528.8

Long term borrowings

(excluding capital leases) (17,613.9) (19,552.6)

Short term borrowings

(excluding capital leases) (2,622.2) (3,061.6)

Capital leases (349.1) (353.6)

Non GAAP net debt $ (20,375.9) $ (22,439.0)

Reconciliation of full year 2017 US GAAP diluted earnings per ADS

Outlook to Non GAAP diluted earnings per ADS Outlook:

Full Year 2017 Outlook

Min Max

US GAAP diluted earnings per ADS $ 5.65 $ 6.05

Expense related to the unwind of inventory fair value

adjustments 2.42

Impairment of acquired intangible assets 0.07

Costs relating to licensing arrangements 0.46

Legal and litigation costs 0.04

Amortization of acquired intangible assets 5.64

Integration and acquisition costs 2.98

Reorganization costs 0.10

Amortization of one-time upfront borrowing costs for

Baxalta and Dyax 0.02

Loss from discontinued operations (0.10)

Gain on sale of long term investments (0.01)

Other Non-GAAP adjustments (0.04)

Non GAAP tax adjustments (2.43)

Non GAAP diluted earnings per ADS $14.80 $15.20

NOTES TO EDITORS

Stephen Williams, Deputy Company Secretary, is responsible for arranging

the release of this announcement.

Inside Information

This announcement contains inside information.

About Shire

Shire is the global leader in serving patients with rare diseases. We

strive to develop best-in-class therapies across a core of rare disease

areas including hematology, immunology, genetic diseases, neuroscience,

and internal medicine with growing therapeutic areas in ophthalmics and

oncology. Our diversified capabilities enable us to reach patients in

more than 100 countries who are struggling to live their lives to the

fullest.

We feel a strong sense of urgency to address unmet medical needs and

work tirelessly to improve people's lives with medicines that have a

meaningful impact on patients and all who support them on their journey.

www.shire.com

THE "SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION

REFORM ACT OF 1995

Statements included herein that are not historical facts, including

without limitation statements concerning 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 sites, ingredients or

manufacturing processes could lead to, among other things, significant

delays, an increase in operating costs, lost product sales, an

interruption of research activities 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 condition 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, if unsuccessful,

may adversely affect the development and sale of its 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 collectability of customer accounts receivable;

-- failure of a marketed product to work effectively or if 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 significant legal

costs and the payment of substantial compensation or fines;

-- Shire is dependent on information technology and its 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-Q, 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 website.

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 forward-looking statements that speak only as of the date

hereof. Except to the extent otherwise required by applicable 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.

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; effective tax rate on Non GAAP income

before income taxes and (losses/earnings) of equity method investees

(effective tax rate on Non GAAP income); Non GAAP CER; Non GAAP cost of

sales; Non GAAP gross margin; Non GAAP R&D; Non GAAP SG&A; Non GAAP

other expense; Non GAAP free cash flow, Non GAAP net debt, Non GAAP

EBITDA and Non GAAP EBITDA margin.

The Non GAAP measures exclude the impact of certain specified items that

are highly variable, difficult to predict, and of a size that may

substantially impact Shire's operations. Upfront and milestone payments

related to in-licensing and acquired products that have been expensed as

R&D are also excluded as specified items as they are generally uncertain

and often result in a different payment and expense recognition pattern

than ongoing internal R&D activities. Intangible asset amortization has

been excluded from certain measures to facilitate an evaluation of

current and past operating performance, particularly in terms of cash

returns, and is similar to how management internally assesses

performance. The Non GAAP financial measures are presented in this press

release as Shire's management believes that they will provide investors

with an additional analysis of Shire's results of operations,

particularly in evaluating performance from one period to another.

Shire's management uses Non GAAP financial measures to make operating

decisions as they facilitate additional internal comparisons of Shire's

performance to historical results and to competitor's results, and

provides them to investors as a supplement to Shire's reported results

to provide additional insight into Shire's operating performance.

Shire's Remuneration Committee uses certain key Non GAAP measures when

assessing the performance and compensation of employees, including

Shire's executive directors.

The Non GAAP financial measures used by Shire may be calculated

different from, and therefore may not be comparable to, similarly titled

measures used by other companies - refer to the section "Non GAAP

Financial Measure Descriptions" below for additional information. In

addition, these Non GAAP financial measures should not be considered in

isolation as a substitute for, or as superior to, financial measures

calculated in accordance with US GAAP, and Shire's financial results

calculated in accordance with US GAAP and reconciliations to those

financial statements should be carefully evaluated.

Non GAAP Financial Measure Descriptions

Where applicable the following items, including their tax effect, have

been excluded when calculating Non GAAP earnings and from our Non GAAP

outlook:

Amortization and asset impairments:

-- Intangible asset amortization and impairment charges; and

-- Other than temporary impairment of investments.

Acquisitions and integration activities:

-- Up-front payments and milestones in respect of in-licensed and acquired

products;

-- Costs associated with acquisitions, including transaction costs, fair

value adjustments on contingent consideration and acquired inventory;

-- Costs associated with the integration of companies; and

-- Noncontrolling interests in consolidated variable interest entities.

Divestments, reorganizations and discontinued operations:

-- Gains and losses on the sale of non-core assets;

-- Costs associated with restructuring and reorganization activities;

-- Termination costs; and

-- Income/(losses) from discontinued operations.

Legal and litigation costs:

-- Net legal costs related to the settlement of litigation, government

investigations and other disputes (excluding internal legal team costs).

Additionally, in any given period Shire may have significant, unusual or

non-recurring gains or losses which it may exclude from its Non GAAP

earnings for that period. When applicable, these items would be fully

disclosed and incorporated into the required reconciliations from US

GAAP to Non GAAP measures.

Depreciation, which is included in Cost of sales, R&D and SG&A costs in

our US GAAP results, has been separately disclosed for presentational

purposes.

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.

Non GAAP net debt represents cash and cash equivalents less short and

long term borrowings, capital leases and other debt.

A reconciliation of Non GAAP financial measures to the most directly

comparable measure under US GAAP is presented on pages 21 to 23.

Non GAAP CER growth is computed by restating 2017 results using average

2016 foreign exchange rates for the relevant period.

Average exchange rates used by Shire for the three months ended

September 30, 2017 were $1.31:GBP1.00 and $1.17:EUR1.00 (2016:

$1.32:GBP1.00 and $1.11:EUR1.00). Average exchange rates used by Shire

for the nine months ended September 30, 2017 were $1.28:GBP1.00 and

$1.11:EUR1.00 (2016: $1.40:GBP1.00 and $1.11:EUR1.00).

TRADEMARKS

We own or have rights to trademarks, service marks or trade names that

we use in connection with the operation of our business. In addition,

our names, logos and website names and addresses are owned by us or

licensed by us. We also own or have the rights to copyrights that

protect the content of our solutions. Solely for convenience, the

trademarks, service marks, trade names and copyrights referred to in

this press release are listed without the (c), (R) and (TM) symbols, but

we will assert, to the fullest extent under applicable law, our rights

or the rights of the applicable licensors to these trademarks, service

marks, trade names and copyrights. In addition, this press release may

include trademarks, service marks or trade names of other companies. Our

use or display of other parties' trademarks, service marks, trade names

or products is not intended to, and does not imply a relationship with,

or endorsement or sponsorship of us by, the trademark, service mark or

trade name.

This announcement is distributed by Nasdaq Corporate Solutions on behalf

of Nasdaq Corporate Solutions clients.

The issuer of this announcement warrants that they are solely

responsible for the content, accuracy and originality of the information

contained therein.

Source: Shire plc via Globenewswire

(END) Dow Jones Newswires

October 27, 2017 07:15 ET (11:15 GMT)