8446 Annual Report 2011_Annual Report 2011 15/03/2012 16:27 Page FC1 Shire plc Annual ReportShire 2011 Shire plc Annual Report 2011 Creating stakeholder value Creating stakeholder value Effective treatments and services Commitment to superior treatments Improved public for their patients health and societal value Better lives for patients Superior clinical Brave culture driving evidence and clear innovation to deliver economic benefits value to all Return to enable further investment shire.com 8446 Annual Report 2011_Annual Report 2011 15/03/2012 16:27 Page IFC1 Shire plc Annual Repo Shire trademarks The following are trademarks either owned or licensed by Shire plc or companies within the Shire Group (the “Group” or the “Company”) which are the subject of trademark registrations in certain territories, or which are owned by third parties as indicated and referred to in this Annual Report: ADDERALL XR® (mixed salts of a single entity amphetamine) AGRYLIN® (anagrelide hydrochloride) APLIGRAF® (trademark of Organogenesis, Inc. (“Organogenesis”)) APRISO® (trademark of Salix Pharmaceuticals, Ltd. (“Salix”)) ASACOL® (trademark of Medeva Pharma Suisse AG (used under license by Warner Chilcott Company, LLC (“Warner Chilcott”))) ATRIPLA® (trademark of Bristol Myers Squibb Company (“BMS”) and Gilead Sciences, Inc. (“Gilead”)) BERINERT P® (trademark of Aventis Behring GmbH) ® CALCICHEW range (calcium carbonate with or without vitamin D3) CARBATROL® (carbamazepine extended release capsules) CEREZYME® (trademark of Genzyme Corporation (“Genzyme”)) CINRYZE® (trademark of Viropharma Biologics, Inc.) CLAVERSAL® (trademark of Merckle Recordati) COLAZAL® (trademark of Salix Pharmaceuticals, Inc.) COMBIVIR® (trademark of GlaxoSmithKline (“GSK”)) CONCERTA® (trademark of Alza Corporation (“Alza”)) DAYTRANA® (trademark of Noven Pharmaceutical Inc. (“Noven”)) DERMAGRAFT® (Human Fibroblast-Derived Dermal Substitute) DIPENTUM® (trademark of UCB Pharma Ltd (“UCB”)) DYNEPO® (trademark of Sanofi-Aventis) ELAPRASE® (idursulfase) EPIVIR® (trademark of GSK) EPIVIR-HBV® (trademark of GSK) EPZICOM®/KIVEXA (EPZICOM) (trademark of GSK) EQUASYM® (methylphenidate hydrochloride) EQUASYM XL® (methylphenidate hydrochloride) FIRAZYR® (icatibant) FOSRENOL® (lanthanum carbonate) FABRAZYME® (trademark of Genzyme) HEPTOVIR® (trademark of GSK) INTUNIV® (guanfacine extended release) JUVISTA® (trademark of Renovo Limited (“Renovo”)) KALBITOR® (trademark of Dyax Corporation) KAPVAY® (trademark of Shionogi Pharma, Inc. (“Shionogi”)) LIALDA® (trademark of Giuliani International Limited (“Guiliani”)) MEDIKINET® (trademark of Medice Arzneimittel Pütter GmbH & Co. KG (“Medice”)) METAZYM™ (arylsulfatase-A) METADATE CD® (trademark of UCB Pharma, S.A.) MEZAVANT® (trademark of Guiliani) MICROTROL® (trademark of Supernus Pharmaceuticals, Inc. (“Supernus”)) MOVICOL® (trademark of Edra AG, S.A.) PENTASA® (trademark of Ferring B.V. Corp (“Ferring”)) REMINYL® (galantamine hydrobromide) (United Kingdom (“UK”) and Republic of Ireland) (trademark of J&J, excluding UK and Republic of Ireland) REMINYL XL™ (galantamine hydrobromide) (UK and Republic of Ireland) (trademark of J&J, excluding UK and Republic of Ireland) REPLAGAL® (agalsidase alfa) RESOLOR® (prucalopride) ® RITALIN LA (trademark of Novartis) Content online ® RUCONEST (trademark of Pharming Intellectual Property B.V.) Discover more about our business online at www.shire.com. SALOFALK® (trademark of Dr. Falk Pharma) ® Scanning a QR code with your camera phone will directly SEASONIQUE (trademark of Barr Laboratories, Inc. (“Barr”)) link you to mobile content. QR code reader applications STRATTERA® (trademark of Eli Lilly) are available from your app store. TRIZIVIR® (trademark of GSK) TRUVADA® (trademark of Gilead) VENVANSE (lisdexamfetamine dimesylate) VPRIV® (velaglucerase alfa) VYVANSE® (lisdexamfetamine dimesylate) XAGRID® (anagrelide hydrochloride) ZAVESCA® (trademark of Actelion Pharmaceuticals, Ltd.) ZEFFIX® (trademark of GSK) 3TC® (trademark of GSK) More online at www.shire.com ›› 8446 Annual Report 2011_Annual Report 2011 15/03/2012 16:11 Page 1 Shire plc Annual Report 2011 1 R e Contents v iew o Shire continues to grow. Our proven business Review of our business f 2 Financial highlights o model helps us to deliver on our mission 4 Shire today ur 6 Chairman’s review bus 8 Chief Executive of enabling people with life-altering conditions i Officer’s review n 12 Financial review e to lead better lives, through leading the way ss in our chosen specialist areas. We have a balanced portfolio of differentiated products that have many years of growth still ahead, as well as the potential to expand into Go v further geographies and markets. Our pipeline e rn Governance a is strong and well focused, offering potential n 42 Board of Directors ce 44 Directors’ report drivers of future growth for our portfolio. 48 Corporate governance report 55 Directors’ remuneration Patients are at the heart of our business and report 70 Nomination Committee we are increasingly engaging with a broader report 71 Audit, Compliance & range of stakeholders to ensure that we Risk Committee report 73 Statement of Directors’ develop innovative products that payors and responsibilities policymakers around the world will welcome, as they deliver value to the healthcare system. Fi n a n Our 5,000 plus employees in 29 countries cial Financial statements 74 Independent auditors’ report s are united by our distinctive culture that brings tate 75 Consolidated balance sheets 76 Consolidated statements the needs of our patients to the fore; everyone m of income e 77 Consolidated statements n t at Shire aims to be as brave as the people of changes in equity s 79 Consolidated statements we help. Through focusing on our patients’ of comprehensive income 80 Consolidated statements needs, we strive to meet the needs of all of cash flows 82 Notes to the consolidated our stakeholders. financial statements Othe r Other financial information fin a 125 Other financial information n 129 Shire head offices and cial i main operating locations 130 Shareholder information nf 132 Cautionary statements o rm 134 Parent company financial statements of Shire plc atio n 8446 Annual Report 2011_Annual Report 2011 15/03/2012 16:11 Page 2 2 Shire plc Annual Report 2011 Shire plc Annual Repo Financial highlights Another strong year for Shire with revenues exceeding $4 billion for the first time and Non GAAP diluted earnings per ADS up 26% to $5.34. Total revenue Non GAAP EBITDA (Earnings Before Interest Tax Depreciation and Amortization) Net product sales 2011 $4,263M 2011 $1,478M 3% 7% 2010 $3,471M 2010 $1,165M 25% 2009 $3,008M 2009 $982M 2008 $3,022M 2007 $2,436M 65% US 25% Europe 3% Latin America 23% year-on-year growth in 2011 27% year-on-year growth in 2011 7% Other Non GAAP diluted earnings per ADS 2011 cash flow Total revenues by 2011 $5.34 Cash generation(1) $1,391M 2010: $3,471M –$317M Capital expenditure 2010 $4.23 –$195M Tax and interest payments 10% $879M Free cash flow(1) 2009 $3.49 $95M Disposal of long-term investment 26% –$725M Payment to acquire ABH 64% –$186M Other investing and financing +$63M Net cash inflow (1) Cash generation and Free cash flow are Non GAAP measures. 64% Specialty Pharm 26% Human Genetic Strong cash generation has supported continued 10% Royalties and o 26% year-on-year growth in 2011 investment in our business More online at http://ar2011.shire.com ›› 8446 Annual Report 2011_Annual Report 2011 15/03/2012 16:11 Page 3 c Annual Report 2011 Shire plc Annual Report 2011 3 R e v iew o f o ur bus i n e ss preciation and Amortization) Net product sales by geographic region Year-on-year product growth ($’M) $1,478M 2011 VYVANSE $805M up 27% 3% 7% 2010 VYVANSE $634M 165M 2011 ADDERALL XR $533M up 48% 2010 ADDERALL XR $361M 25% 2011 REPLAGAL $475M up 35% 2010 REPLAGAL $351M 65% 2011 ELAPRASE $465M up 15% 2010 ELAPRASE $404M 2011 LIALDA/MEZAVANT $372M up 27% 2010 LIALDA/MEZAVANT $293M 2011 VPRIV $256M up 79% 65% US 2010 VPRIV $143M 25% Europe 2011 INTUNIV $223M up 34% 3% Latin America 7% Other 2010 INTUNIV $166M Total revenues by businesses $1,391M 2010: $3,471M 2011: $4,263M 3% 7% 10% (1) 79M Free cash flow up 23% rm investment 26% 29% 64% 61% g s. 64% Specialty Pharmaceutical 61% Specialty Pharmaceutical 26% Human Genetic Therapies 29% Human Genetic Therapies tinued 10% Royalties and other revenues 3% Regenerative Medicine 7% Royalties and other revenues 8446 Annual Report 2011_Annual Report 2011 15/03/2012 16:11 Page 4 4 Shire plc Annual Report 2011 Shire plc Annual Repo Shire today We focus on chronic symptomatic diseases in specialist areas of unmet needs through three businesses: 1. Specialty Pharmaceuticals 2. Human Genetic Therapies 3. Regenerative Medicine Not all of these products are available in all countries where Specialty Human Genetic Regenerative Shire operates. Pharmaceuticals (SP) Therapies (HGT) Medicine (RM) ADHD Fabry disease Diabetic foot ulcers ADHD Hunter syndrome ADHD Gaucher disease ADHD Hereditary angioedema Ulcerative colitis Ulcerative colitis Ulcerative colitis Chronic constipation Essential thrombocythaemia Renal disease More online at http://ar2011.shire.com ›› 8446 Annual Report 2011_Annual Report 2011 15/03/2012 16:11 Page 5 c Annual Report 2011 Shire plc Annual Report 2011 5 R e v iew o f o ur We continue to build our pipeline bus i n e with potential products that will ss deliver value to patients and the healthcare system. Specialty Pharmaceuticals Preclinical and Phase 1 Phase 2 Phase 3 Registration erative Human Genetic Therapies