Outstanding 2010 results: Non GAAP EPS up 21% to $4.23. Good earnings growth expected in 2011.
(Thomson Reuters ONE) -
February 10, 2011 - Shire plc (LSE: SHP) (NASDAQ: SHPGY) the global specialty
biopharmaceutical company, announces results for the year to December 31, 2010.
+---------------------------------------------------+-----------------------+
| Financial Highlights | Full Year 2010(1) |
+---------------------------------------------------+-----------------------+
| Product sales | $3,128 million +16% |
| | |
| Total revenues | $3,471 million +15% |
| | |
| | |
| | |
| Non GAAP operating income | $1,072 million +20% |
| | |
| US GAAP operating income | $794 million +28% |
| | |
| | |
| | |
| Non GAAP diluted earnings per ADS | $4.23 +21% |
| | |
| US GAAP diluted earnings per ADS | $3.16 +17% |
| | |
| | |
| | |
| Non GAAP cash generation | $1,353 million +48% |
| | |
| US GAAP net cash provided by operating activities | $955 million +52% |
| | |
| | |
+---------------------------------------------------+-----------------------+
(1) Percentages compare to equivalent 2009 period.
Angus Russell, Chief Executive Officer, commented:
"2010 was an outstanding year for Shire with the business performing
exceptionally well on all fronts. Total product sales exceeded expectations and
broke through $3 billion for the first time driven by a 34% increase in our Core
Product sales. Both our Specialty Pharmaceuticals and Human Genetic Therapies
businesses showed excellent growth.
In our ADHD portfolio, INTUNIV sales were $166 million in the first full year on
the market and VYVANSE sales grew 26% to $634 million. VPRIV sales were $143
million in its first year, REPLAGAL sales were up 81% to $351 million and sales
of ELAPRASE also grew 14% to $404 million.
Cash generation of almost $1.4 billion during the year has enabled us to invest
significantly in the business. The acquisition of Movetis brings our Specialty
Pharmaceuticals business the European rights to RESOLOR, a new therapy for
chronic constipation, and access to its GI pipeline. Our in-licensing of a Phase
2 compound for Duchenne muscular dystrophy from Acceleron adds a further
exciting development project to our Human Genetic Therapies pipeline. That
partnership and the recently begun in-house studies for the novel intrathecal
delivery of our protein therapies for patients with CNS-manifestations of rare
genetic diseases have the potential to become new platform technologies for our
Human Genetic Therapies business. Among many other advances in our R&D pipeline,
we also completed encouraging signal finding studies for potential new
indications for VYVANSE.
We're expanding internationally through launching products in new countries,
having established a new hub in Switzerland, expanding our operations in Latin
America and building our business in Asia/Pacific. We now have over 4,000
employees in 28 countries and we're leveraging this infrastructure to grow our
business now and in the future.
Shire has had a great year. With a young and balanced portfolio and a strong
pipeline, we look forward to continuing this success as we build on the strength
of our business model and plan for further good growth in the year ahead. We're
increasingly confident about achieving our aspirational growth targets and
continuing to have a positive impact on patients' lives."
FINANCIAL SUMMARY
Full Year 2010 Unaudited Results
+----------------------+---------------------------+---------------------------+
| | Full Year 2010 | Full Year 2009 |
+----------------------+---------------------------+---------------------------+
| | Non| Non|
| |US GAAP Adjustments GAAP|US GAAP Adjustments GAAP|
| | | |
| | $M $M $M| $M $M $M|
| | ------- ----------- ------+ ------- ----------- ------+
|Total revenues | 3,471 - 3,471| 3,008 - 3,008|
| | | |
|Operating income | 794 278 1,072| 620 269 889|
| | | |
| | | |
+----------------------+---------------------------+---------------------------+
| | | |
| | | |
|Diluted earnings per | | |
|ADS | $3.16 $1.07 $4.23| $2.69 $0.80 $3.49|
| | | |
| | | |
+----------------------+---------------------------+---------------------------+
The Non GAAP financial measures included within this release are explained on
page 26, and are reconciled to the most directly comparable financial measures
prepared in accordance with US GAAP on pages 21 - 25.
- Product sales were up 16% to $3,128 million (2009: $2,694 million). Product
sales excluding ADDERALL XR® ("Core Products") grew strongly through 2010 (up
34% to $2,767 million), more than offsetting the decline in ADDERALL XR product
sales (down 42% to $361 million) following loss of market exclusivity in April
2009. On a constant exchange rate ("CER") basis, which is a Non GAAP measure,
Core Product sales were up 35%.
- The growth in Core Products sales was driven by VYVANSE® (up 26% to $634
million), REPLAGAL® (up 81% to $351 million), LIALDA®/MEZAVANT® (up 24% to $293
million), and the recently launched products, INTUNIV® ($166 million) and VPRIV®
($143 million).
- Total revenues were up 15% (CER: up 16%) to $3,471 million (2009: $3,008
million) due to the growth in product sales and higher royalties (up 12% to $328
million), offset by lower other revenues (down 31% to $15 million).
- Non GAAP operating income increased by $183 million, or 20%, to $1,072 million
(2009: $889 million). Non GAAP operating income increased due to higher revenues
and continued operating leverage, allowing us to absorb the effects of increased
investment in our targeted research and development ("R&D") programs and an
increase in selling, general and administrative ("SG&A") activities to support
our recent and future growth. On a US GAAP basis, operating income increased by
$174 million, or 28%, to $794 million (2009: $620 million).
- Cash generation, which is a Non GAAP measure, increased by $436 million to
$1,353 million (2009: $917 million). Cash generation was higher in 2010 due to
higher cash receipts from both product sales and royalties, which more than
offset higher sales deduction payments and higher operating costs in 2010. Free
cashflow, also a Non GAAP measure, increased by $386 million to $795 million
(2009: $409 million) due to higher cash generation and lower capital
expenditure, partially offset by higher cash tax payments.
On a US GAAP basis, net cash provided by operating activities increased by $328
million to $955 million (2009: $627 million). For a reconciliation of net cash
provided by operating activities to Non GAAP cash generation and free cashflow,
see page 25.
- Net debt at December 31, 2010 was $531 million (December 31, 2009: $615
million), a reduction of $84 million. The strong free cashflow in 2010 has
funded significant investment in the business, including the acquisition of
Movetis NV ("Movetis") and Lexington Technology Park ("LTP").
2011 OUTLOOK
We enter 2011 with strong momentum following an outstanding performance in
2010. Good revenue growth will be driven by our young product portfolio and will
offset the impact of the sale of DAYTRANA last year and reduced royalties. We
anticipate that gross margins in 2011 will be at a similar percentage of product
sales as in 2010.
We have identified significant opportunities for future growth both by advancing
our pipeline and through the ongoing international expansion of our portfolio.
Based on this we expect to generate total product sales growth for 2011 in line
with the growth achieved in 2010. As we support this continued growth and also
absorb a full year of Movetis's operating activities, our current plans are for
combined Non GAAP R&D and SG&A spending in 2011 to increase by between 10 and
13% compared to 2010.
After investing in the business and absorbing the limited impact of US
Healthcare reform, further operational leverage is expected to drive good
earnings growth in 2011 and we reiterate our aspirational growth targets.
PRODUCT LAUNCHES AND SIGNIFICANT LABEL CHANGES
Subject to obtaining the requisite regulatory/governmental approvals, product
launches and significant label changes planned over the next 12 months include:
PRODUCT LAUNCHES
- VYVANSE/VENVANSETM for the treatment of Attention Deficit Hyperactivity
Disorder ("ADHD") in children in Brazil;
- EQUASYM® for the treatment of ADHD in certain European countries;
- RESOLOR® for the symptomatic treatment of chronic constipation in women for
whom laxatives fail to provide adequate relief, in certain European countries;
- VPRIV for the treatment of type 1 Gaucher disease in certain European and
Latin American countries; and
- FIRAZYR®for the symptomatic treatment of acute attacks of hereditary
angioedema ("HAE") in the US and certain European and Latin American countries.
SIGNIFICANT LABEL CHANGES
- INTUNIV as adjunctive treatment to long acting oral stimulants for the
treatment of ADHD in children and adolescents in the US;
- LIALDA/MEZAVANT for the maintenance of remission of ulcerative colitis in the
US; and
- FIRAZYR for self-administration in patients who are experiencing acute attacks
of HAE in the EU.
FINANCIAL SUMMARY
Fourth Quarter 2010 Unaudited Results
+-------------------------------------------------+------------------------+
|Financial Highlights |Fourth Quarter 2010(1) |
| | (2) |
+-------------------------------------------------+------------------------+
|Product sales |$851 million +10%|
| | |
|Total revenues |$931 million +4%|
| | |
| | |
| | |
|Non GAAP operating income |$239 million -24%|
| | |
|US GAAP operating income |$196 million -27%|
| | |
| | |
| | |
|Non GAAP diluted earnings per ADS | $1.03 -7%|
| | |
|US GAAP diluted earnings per ADS | $0.88 -6%|
| | |
| | |
| | |
|Non GAAP cash generation |$394 million +47%|
| | |
|US GAAP net cash provided by operating activities|$343 million +45%|
| | |
| | |
+-------------------------------------------------+------------------------+
(1) Percentages compare to equivalent 2009 period.
(2) Results for Q4 2009 included the effect of the change in best estimate of
the Medicaid rebate liability for ADDERALL XR, which increased product sales
by $98 million in Q4 2009 (of which $74 million related to Q1-Q3 2009, (the
"Prior Quarters")). Excluding the effect of the change in best estimate of
the Medicaid rebate liability for ADDERALL XR which related to Prior
Quarters, Non GAAP operating income in Q4 2009 would have been $239 million.
- Fourth quarter product sales were up 10% to $851 million (2009: $777 million).
After adjusting Q4 2009 for the effect of the change in best estimate of the
Medicaid rebate liability for ADDERALL XR which related to Prior Quarters,
product sales for the fourth quarter increased by 21%.
Continued strong growth from Core Products (up 30% to $763 million -
notwithstanding the divestment of DAYTRANA® on October 1, 2010) more than offset
lower ADDERALL XR product sales (down 54% to $89 million). Core Products sales
were up 33% on a CER basis.
- Core Products continued to generate strong sales growth in the fourth quarter,
particularly VYVANSE (up 25% to $181 million), REPLAGAL (up 80% to $109
million), LIALDA/MEZAVANT (up 27% to $84 million), and the recently launched
products, INTUNIV (up $38 million to $43 million) and VPRIV (up $57 million to
$59 million).
- Fourth quarter total revenues increased by 4% (CER: up 6%) to $931 million
(2009: $893 million) with higher product sales being offset by lower royalty
income. ADDERALL XR royalties were significantly lower in Q4 2010 (down 73% to
$14 million), as Q4 2009 benefited from royalties on launch shipments of Impax
Laboratories Inc's ("Impax") authorized generic version of ADDERALL XR.
- Fourth quarter Non GAAP operating income decreased by $74 million, or 24%, to
$239 million (2009: $313 million). After adjusting Q4 2009 for the effect of the
change in best estimate of the Medicaid rebate liability for ADDERALL XR which
related to Prior Quarters, Non GAAP operating income remained constant in 2010,
as the increase in gross profit was offset by higher Non GAAP R&D and SG&A. This
was primarily due to the inclusion of Movetis's operating costs for the first
time and targeted increases to investment in R&D programs and SG&A activities to
support future growth. On a US GAAP basis, operating income decreased by $72
million, or 27%, to $196 million (2009: $268 million).
- Cash generation, which is a Non GAAP measure, increased by $125 million in the
fourth quarter to $394 million (2009: $269 million), with higher cash receipts
from product sales more than offsetting higher sales deduction payments and
higher operating costs. Free cashflow, which is also a Non GAAP measure,
increased by $126 million to $278 million (2009: $152 million) due to higher
cash generation and lower capital expenditure offset by higher cash tax
payments.
On a US GAAP basis, net cash provided by operating activities increased by $106
million to $343 million (2009: $237 million). For a reconciliation of net cash
provided by operating activities to Non GAAP cash generation and free cashflow,
see page 25.
FOURTH QUARTER 2010 AND RECENT PRODUCT AND PIPELINE DEVELOPMENTS
Products
VYVANSE - for the treatment of ADHD
- On November 10, 2010 Shire announced that the U.S. Court of Appeals for the
District of Columbia Circuit affirmed the ruling of the U.S. District Court for
the District of Columbia and the US Food and Drug Administration Authority
("FDA") to grant five-year New Chemical Entity ("NCE") exclusivity to
lisdexamfetamine dimesylate. The five-year exclusivity period for VYVANSE
expires on February 23, 2012. VYVANSE is further protected by United States
patents, the first of which expires on June 29, 2023. Generic manufacturers
cannot submit an Abbreviated New Drug Application ("ANDA") to the FDA until
February 23, 2011 at the earliest.
- On November 15, 2010 Shire announced that the FDA approved VYVANSE for the
treatment of ADHD in adolescents aged 13 to 17.
- On November 25, 2010 Health Canada granted approval for VYVANSE for the
treatment of ADHD in adolescents and adults.
REPLAGAL - for the treatment of Fabry disease
- REPLAGAL is the global market leader for the treatment of Fabry disease.
Shire's continuing priority is to ensure long term, uninterrupted treatment with
REPLAGAL at the approved dose. New patients added in Q4 were a combination of
treatment naïve patients and those who switched from the competing enzyme
replacement therapy ("ERT"). The rate of addition was lower than Q3 2010,
reflecting Shire's high market share. Shire expects to have manufacturing
capacity to continue uninterrupted treatment for all patients currently on
REPLAGAL and to meet all anticipated demand from new and switch patients in
2011. Approval of the new manufacturing facility at LTP for REPLAGAL will allow
greater inventory flexibility and Shire is working closely with the authorities
toward approval.
VPRIV - for the treatment of Type 1 Gaucher disease
- Shire has seen rapid adoption of VPRIV worldwide. There are currently over
1,000 Gaucher patients being treated with VPRIV and initiation of treatment
continues. Shire anticipates being able to accommodate additional Gaucher
patients at a rate that takes into consideration the return of the competitor
ERT product to the market in 2011. Approval of the new manufacturing facility at
LTP for VPRIV will provide substantial additional capacity. Shire's continuing
priority is ensuring long-term, uninterrupted treatment for patients on VPRIV.
FIRAZYR - for the treatment of HAE
- In January 2011, the Committee for Medicinal Products for Human Use of the
European Medicines Agency issued a positive opinion for a change in the FIRAZYR
label in the EU to include self-administered subcutaneous injections in patients
who are experiencing acute attacks of HAE.
Pipeline
VYVANSE - for the treatment of other non-ADHD indications
- On January 10, 2011 Shire announced results from a study of VYVANSE
(lisdexamfetamine dimesylate (or SPD 489)) assessing its effect in a model for
Excessive Daytime Sleepiness ("EDS"). In this investigational, single dose,
single-site, randomized, placebo- and active-controlled study, VYVANSE was found
to be statistically superior to placebo on both objective and subjective sleep
measures. Statistical superiority to the active comparator 250 mg armodafinil
was also found at higher VYVANSE doses. Shire plans to review potential
development pathways with health authorities for VYVANSE as a possible EDS
treatment option.
SPD 557 - for the treatment of refractory gastroesophageal reflux disease
("GERD")
- SPD 557 (or M0003) is an orally active, potent, selective 5-HT4 receptor
agonist. An exploratory Phase 2 program to investigate the effect of the product
on reflux episodes in patients currently treated with proton pump inhibitors was
initiated in Q4 2010.
FIRAZYR - for the treatment of HAE
- Prior to its acquisition by Shire, Jerini AG ("Jerini") received a not
approvable letter for FIRAZYR for use in the US from the FDA in April 2008.
Shire agreed with FDA that an additional clinical study would be required before
approval could be considered and that a complete response to the not approvable
letter would be filed after completion of this study. Shire has now completed a
Phase 3 study in patients with acute attacks of HAE, known as the FAST-3 trial,
and anticipates submitting a complete response to the FDA in early 2011.
OTHER FOURTH QUARTER AND RECENT DEVELOPMENTS
Acquisition of Movetis NV
- On November 9, 2010 Shire announced that its wholly-owned subsidiary, Shire
Holdings Luxembourg S.à.r.l., had finalized the acquisition of Movetis, and had
acquired all of the issued shares and warrants of Movetis. Shares in Movetis
have been delisted from Euronext Brussels.
DIVIDEND
For the six months to December 31, 2010 the Board has resolved to pay an interim
dividend of 10.85 US cents per ordinary share (an increase of 17% over
2009: 9.25 US cents per ordinary share).
Dividend payments will be made in Pounds Sterling to ordinary shareholders and
in US Dollars to holders of American Depositary Shares. A dividend of 6.73 pence
per ordinary share (2009: 5.91 pence) and 32.55 US cents per ADS (2009: 27.75 US
cents) will be paid on April 7, 2011 to persons whose names appear on the
register of members of the Company at the close of business on March 11, 2011.
Together with the first interim payment of 2.25 US cents per ordinary share
(2009: 2.147 US cents per ordinary share), this represents total dividends for
2010 of 13.10 US cents per ordinary share (2009: 11.397 US cents per ordinary
share), an increase of 15% in US Dollar terms.
ADDITIONAL INFORMATION
The following additional information is included in this press release:
Page
Overview of Full Year Financial Results 8
Financial Information 12
Non GAAP Reconciliations 21
Notes to Editors 26
Safe Harbor Statement 26
Explanation of Non GAAP Measures 26
Trademarks 27
For further information please contact:
Investor Relations Eric Rojas (erojas(at)shire.com) +1 781 482 0999
Media Jessica Mann (jmann(at)shire.com) +44 1256 894 280
Matthew Cabrey (mcabrey(at)shire.com) +1 484 595 8248
Jessica Cotrone (jcotrone(at)shire.com) +1 781 482 9538
Dial in details for the live conference call for investors 14:00 GMT/9:00 EST on
February 10, 2011:
UK dial in: 0800 077 8492 or 0844 335 0351
US dial in: 1 866 8048688 or 1 718 3541175
International dial in: +44 844 335 0351
Password/Conf ID: 855250
Live Webcast: http://www.shire.com/shireplc/en/investors
OVERVIEW OF FULL YEAR FINANCIAL RESULTS
1. Product sales
For the year to December 31, 2010, product sales increased by 16% to $3,128.2
million (2009: $2,693.7 million) and represented 90% of total revenues (2009:
90%). On a CER basis product sales were up 17%.
Core Product sales increased by 34% (CER: up 35%) to $2,767.4 million (2009:
$2,067.2 million).
Product Highlights
+-------------------+------------+------------------------------+--------+
| | | Year on year growth | Exit|
| | | | | | Market|
|Product | Sales $M | Sales | CER |US Rx(1)|Share(1)|
+-------------------+------------+----------+----------+--------+--------+
| | | | | | |
| | | | | | |
|VYVANSE | 634.2 | 26% | 26% | 28%| 15%|
| | | | | | |
|ELAPRASE | 403.6 | 14% | 16% | n/a(2)| n/a(2)|
| | | | | | |
|REPLAGAL | 351.3 | 81% | 87% | n/a(3)| n/a(3)|
| | | | | | |
|LIALDA/MEZAVANT | 293.4 | 24% | 24% | 18%| 20%|
| | | | | | |
|PENTASA® | 235.9 | 10% | 10% | -5%| 15%|
| | | | | | |
|FOSRENOL | 182.1 | -1% | <1% | -16%| 6%|
| | | | | | |
|INTUNIV | 165.9 | n/a(4) | n/a(4) | n/a| 3%|
| | | | | | |
|VPRIV | 143.0 | n/a(4) | n/a(4) | n/a(2)| n/a(2)|
| | | | | | |
|FIRAZYR | 11.1 | 82% | 91% | n/a(3)| n/a(3)|
| | | | | | |
|RESOLOR | 0.3 | n/a | n/a | n/a(3)| n/a(3)|
| | | | | | |
|OTHER | 346.6 | -5% | -4% | n/a| n/a(2)|
| | ---------- | -------- | -------- | | |
|Core Product sales | 2,767.4 | 34% | 35% | | |
| | | | | | |
|ADDERALL XR | 360.8 | -42% | -43% | -32%| 7%|
| | ---------- | -------- | -------- | | |
|Total product sales| 3,128.2 | 16% | 17% | | |
| | ---------- | -------- | -------- | | |
| | | | | | |
+-------------------+------------+----------+----------+--------+--------+
(1) Data provided by IMS Health National Prescription Audit ("IMS NPA"). Exit
market share represents the average monthly US market share in the month
ended December 31, 2010.
(2) IMS NPA Data not available.
(3) Not sold in the US in 2010.
(4) INTUNIV was launched in the US in Q4 2009, (2009 sales: $5.4 million). In
2009 VPRIV generated sales from early access programs (2009 sales: $2.5
million), prior to obtaining US and EU approval in 2010.
VYVANSE - ADHD
The increase in VYVANSE product sales was driven by both an increase in
VYVANSE's market share and US ADHD market growth (12%) as well as the effect of
price increases taken since Q4 2009. These factors offset the effect of higher
sales deductions in 2010 due to increased Medicaid rebates principally as a
result of US Healthcare Reforms.
ELAPRASE - Hunter syndrome
The growth in sales of ELAPRASE was driven by new patients commencing therapy
across North America, Latin America and Europe, Middle East and Asia. On a CER
basis sales grew by 16%.
REPLAGAL - Fabry disease
The 81% growth (87% on a CER basis) in REPLAGAL product sales was driven by a
significant increase in demand in 2010 in all countries where REPLAGAL is sold
as new patients commenced therapy and existing patients switched to REPLAGAL
from a competitor product. This was attributable in part to supply shortages of
that competitor product.
LIALDA/MEZAVANT - Ulcerative colitis
Product sales for LIALDA/MEZAVANT continued to grow in 2010, driven by an
increase in US market share and price increases taken since Q4 2009. These
factors were partly offset by higher sales deductions compared to the same
period in 2009 due in part to US Healthcare Reforms.
PENTASA - Ulcerative colitis
Product sales of PENTASA continued to grow despite lower US prescription demand,
due to the impact of price increases taken during 2010.
FOSRENOL - Hyperphosphatemia
Product sales of FOSRENOL outside the US increased by 6% primarily because of
higher prescription demand partially offset by mandatory price reductions that
were imposed in 2010. Product sales of FOSRENOL in the US decreased by 7% due to
lower US prescription demand and higher sales deductions compared to 2009, which
more than offset the effect of price increases taken since Q4 2009.
INTUNIV - ADHD
US prescription demand for INTUNIV continued to increase through 2010. INTUNIV
was launched in the US in Q4 2009, and product sales in 2010 included both
shipments made in 2010 and the recognition into revenue of launch stocks which
had been deferred in 2009 in accordance with Shire's accounting policies.
VPRIV - Gaucher disease
Following the grant of marketing authorization from the European Commission on
August 26, 2010, VPRIV is now being reimbursed on an approved basis in several
countries in the EU as well as in the US. VPRIV was approved by the FDA on
February 26, 2010. Reimbursement on a pre-approval basis continues in other EU
countries.
FIRAZYR - HAE
Product sales grew in line with increased volumes across markets in
Europe. FIRAZYR is the first new product for HAE in Europe in 30 years and has
orphan exclusivity for acute attacks of HAE in adults in the EU until 2018.
RESOLOR - Chronic Constipation
RESOLOR has generated revenues of $0.3m since acquisition in October 2010 and
sales are expected to be higher in 2011 as the product is launched in additional
countries and captures a full year of revenue in existing markets.
ADDERALL XR - ADHD
ADDERALL XR product sales decreased due to lower US prescription demand
(following the launch of authorized generic versions in 2009, which more than
offset US ADHD market growth) and higher sales deductions in 2010 (65% of
branded gross sales in 2010 compared to 47% in 2009). These factors more than
offset the effects of stocking in 2010 compared to destocking in 2009.
2.Royalties
+------------------+-----------------------+---------------------+-----+
| Product | Royalties to Shire $M | Year on year growth | CER |
+------------------+-----------------------+---------------------+-----+
| 3TC® and Zeffix® | 154.0 | -6% | -7% |
| | | | |
| ADDERALL XR | 100.3 | 48% | 47% |
| | | | |
| Other | 73.8 | 22% | 24% |
+------------------+-----------------------+---------------------+-----+
| Total | 328.1 | 12% | 12% |
+------------------+-----------------------+---------------------+-----+
The increase in royalty income in 2010 was primarily due to higher royalties
received on sales of authorized generic versions of ADDERALL XR (ADDERALL XR
royalties have been received from Impax since October 2009, and were received
from Teva Pharmaceuticals Industries Ltd, at a lower rate, between April and
September 2009). Royalties received for 3TC and Zeffix from GSK were lower in
2010 compared to 2009 as 3TC based treatments continue to be adversely impacted
by increased competition from other products.
3.Financial details
Cost of product sales
+------------------------------------------------------------------------------+
| 2010 % of 2009 % of|
| product product|
| $M sales $M sales|
| -------- --------- -------- --------+
|Cost of product sales 463.4 15% 388.0 14%|
| |
|Transfer of manufacturing from Owings |
|Mills (30.4) (12.0) |
| |
|Fair value adjustment for acquired |
|inventories - (1.9) |
| |
|Depreciation (12.4) (9.8) |
| -------- -------- |
|Non GAAP cost of product sales 420.6 13% 364.3 14%|
| -------- -------- |
| |
+------------------------------------------------------------------------------+
Non GAAP cost of product sales as a percentage of product sales marginally
decreased. Higher gross margins from existing Core Products and the positive
effect on gross margins of recently launched, higher margin products in 2010
offset lower gross margins from ADDERALL XR.
US GAAP cost of product sales increased as a percentage of product sales due to
increased costs incurred on the transfer of manufacturing from Owings Mills to a
third party, together with higher depreciation charges.
R&D
+-----------------------------------------------------------------+
| 2010 % of 2009 % of|
| product product|
| $M sales $M sales|
| -------- --------- -------- --------+
|R&D 661.5 21% 638.3 24%|
| |
|Up-front payment to Acceleron (45.0) - |
| |
|INTUNIV license payment - (36.9) |
| |
|Women's Health exit costs - (62.9) |
| |
|Depreciation (19.0) (15.5) |
| -------- -------- |
|Non GAAP R&D 597.5 19% 523.0 19%|
| -------- -------- |
| |
+-----------------------------------------------------------------+
Non GAAP R&D costs in 2010 increased by $74.5 million, or 14%, due to continued
investment in a number of targeted R&D programs, including VYVANSE
international, investigative uses of VYVANSE for new indications, Guanfacine
Carrier Wave, R&D programs acquired with Movetis and other early stage
development programs.
On a US GAAP basis, R&D costs in 2010 increased by $23.2 million, or 4%. Growth
in US GAAP R&D costs was lower than on a Non GAAP basis principally due to the
costs incurred in 2009 following agreement with Duramed to terminate development
of the Women's Health products.
SG&A
+---------------------------------------------------------------------+
| 2010 % of 2009 % of|
| product product|
| $M sales $M sales|
| --------- --------- --------- --------+
|SG&A 1,526.3 49% 1,342.6 50%|
| |
|Intangible asset amortization (133.5) (136.9) |
| |
|Impairment of intangible assets (42.7) - |
| |
|Depreciation (62.1) (67.7) |
| --------- --------- |
|Non GAAP SG&A 1,288.0 41% 1,138.0 42%|
| --------- --------- |
| |
+---------------------------------------------------------------------+
Non GAAP SG&A costs in 2010 increased by $150.0 million, or 13%, primarily due
to costs incurred to support the launches of INTUNIV and VPRIV, growth in new
markets and the inclusion from Q4 2010 of Movetis's operating costs following
completion of the acquisition. On a US GAAP basis, SG&A costs increased by
$183.7 million, or 14%.
Gain on sale of product rights
For the year to December 31, 2010 Shire recorded gains on sale of product rights
of $16.5 million (2009: $6.3 million) of which $10.4 million (2009: $nil)
resulted from the re-measurement of contingent consideration receivable from the
divestment of DAYTRANA to its fair value, and $6.1 million (2009: $6.3 million)
from the disposal of other non-core products.
Reorganization costs
For the year to December 31, 2010 Shire recorded reorganization costs of $34.3
million (2009: $12.7 million) relating to the transfer of manufacturing from its
Owings Mills facility to a third party and the establishment of an international
commercial hub in Switzerland.
Integration and acquisition costs
For the year to December 31, 2010 Shire recorded integration and acquisition
costs of $8.0 million (2009: $10.6 million), which in 2010 primarily related to
the acquisition of Movetis and in 2009 to the integration of Jerini.
Interest expense
For the year to December 31, 2010 Shire incurred interest expense of $35.1
million (2009: $39.8 million), of which $33.5 million (2009: $33.6 million)
relates to the coupon and amortization of issue costs on Shire's $1,100 million
2.75% convertible bonds due 2014.
Other (expense)/income, net
+------------------------------------------------------------------------------+
| 2010 2009|
| |
| $M $M|
| -------- -------+
|Other income, net 7.9 60.7|
| |
|Gain on sale of investment in Virochem Pharma Inc. (11.1) (55.2)|
|("Virochem") |
| -------- -------+
|Non GAAP other (expense)/income, net (3.2) 5.5|
| -------- -------+
| |
+------------------------------------------------------------------------------+
Non GAAP other (expense)/income, net in 2010 includes a loss of $3.6 million
relating to the extinguishment of building finance obligations and in 2009
includes a gain of $5.7 million following the substantial modification of a
property lease.
On a US GAAP basis, Shire recognized a gain of $11.1 million in 2010 (2009:
$55.2 million) relating to the disposal of its investment in Virochem in March
2009. At the time of disposal an element of the consideration was held in escrow
for twelve months pending any warranty claims. The consideration was released
from escrow in March 2010, with the remaining gain being recognized in 2010.
Taxation
1.
The effective tax rate on Non GAAP income was 23% (2009: 25%). The Non GAAP
effective tax rate in 2010 is lower than 2009 due to increased profits in lower
tax territories, including Switzerland following the establishment of an
international commercial hub there in 2010, and an increase in US tax incentives
(notably the domestic production deduction).
The effective tax rate under US GAAP was 24% (2009: 22%). The 2010 US GAAP
effective tax rate is one percentage point higher than the Non GAAP equivalent
due to certain expenses which have been excluded from Non GAAP income, such as
the up-front payment to Acceleron, being incurred in territories with a tax rate
lower than Shire's effective rate.
FINANCIAL INFORMATION
*
TABLE OF CONTENTS
Page
Unaudited US GAAP Consolidated Balance Sheets 13
Unaudited US GAAP Consolidated Statements of Income 14
Unaudited US GAAP Consolidated Statements of Cash Flows 16
Selected Notes to the Unaudited US GAAP Financial Statements
(1) Earnings per share 18
(2) Analysis of revenues 19
Non GAAP reconciliation 21
Unaudited US GAAP financial position as of December 31, 2010
Consolidated Balance Sheets
December 31, December 31,
2010 2009
$M $M
-------------- -------------
ASSETS
Current assets:
Cash and cash equivalents 550.6 498.9
Restricted cash 26.8 33.1
Accounts receivable, net 692.5 597.5
Inventories 260.0 189.7
Deferred tax asset 182.0 135.8
Prepaid expenses and other current assets 168.4 115.2
-------------- -------------
Total current assets 1,880.3 1,570.2
Non-current assets:
Investments 101.6 105.7
Property, plant and equipment, net 853.4 676.8
Goodwill 402.5 384.7
Other intangible assets, net 1,978.9 1,790.7
Deferred tax asset 110.4 79.0
Other non-current assets 60.5 10.4
-------------- -------------
Total assets 5,387.6 4,617.5
-------------- -------------
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued expenses 1,239.3 929.1
Deferred tax liability 4.4 2.9
Other current liabilities 49.6 88.0
-------------- -------------
Total current liabilities 1,293.3 1,020.0
Non-current liabilities:
Convertible bonds 1,100.0 1,100.0
Other long-term debt 7.9 43.6
Deferred tax liability 352.1 294.3
Other non-current liabilities 182.9 247.1
-------------- -------------
Total liabilities 2,936.2 2,705.0
-------------- -------------
Equity:
Common stock of 5p par value; 1,000 million shares
authorized; and 562.2 million shares issued and
outstanding (2009: 1,000 million shares authorized;
and 561.5 million shares issued and outstanding) 55.7 55.6
Additional paid-in capital 2,746.4 2,677.6
Treasury stock: 14.0 million shares (2009: 17.8
million) (276.1) (347.4)
Accumulated other comprehensive income 85.7 149.1
Accumulated deficit (160.3) (622.4)
-------------- -------------
Total equity 2,451.4 1,912.5
-------------- -------------
Total liabilities and equity 5,387.6 4,617.5
-------------- -------------
Unaudited US GAAP results for the three months and year to December 31, 2010
Consolidated Statements of Income
3 months to 3 months to Year to Year to
December 31, December 31, December 31, December 31,
2010 2009 2010 2009
$M $M $M $M
-------------- -------------- -------------- -------------
Revenues:
Product sales 851.4 776.9 3,128.2 2,693.7
Royalties 73.6 114.7 328.1 292.5
Other revenues 6.2 1.7 14.8 21.5
-------------- -------------- -------------- -------------
Total revenues 931.2 893.3 3,471.1 3,007.7
-------------- -------------- -------------- -------------
Costs and expenses:
Cost of product
sales(1) 129.7 103.1 463.4 388.0
Research and
development 185.6 145.8 661.5 638.3
Selling, general and
administrative(1) 419.7 368.8 1,526.3 1,342.6
Gain on sale of
product rights (12.4) - (16.5) (6.3)
In-process R&D
("IPR&D") - 1.6 - 1.6
Reorganization costs 11.0 5.6 34.3 12.7
Integration and
acquisition costs 1.6 0.6 8.0 10.6
-------------- -------------- -------------- -------------
Total operating
expenses 735.2 625.5 2,677.0 2,387.5
-------------- -------------- -------------- -------------
Operating income 196.0 267.8 794.1 620.2
Interest income 0.5 0.4 2.4 1.9
Interest expense (9.5) (9.2) (35.1) (39.8)
Other
(expense)/income, net (1.2) (1.2) 7.9 60.7
-------------- -------------- -------------- -------------
Total other
(expense)/income, net (10.2) (10.0) (24.8) 22.8
-------------- -------------- -------------- -------------
Income from continuing
operations before
income taxes and
equity in
earnings/(losses) of
equity method
investees 185.8 257.8 769.3 643.0
Income taxes (21.9) (81.8) (182.7) (138.5)
Equity in
earnings/(losses) of
equity method
investees, net of
taxes 1.2 (1.7) 1.4 (0.7)
-------------- -------------- -------------- -------------
Income from continuing
operations, net of tax 165.1 174.3 588.0 503.8
-------------- -------------- -------------- -------------
Loss from discontinued
operations (net of
income tax expense of
$nil) - - - (12.4)
-------------- -------------- -------------- -------------
Net income 165.1 174.3 588.0 491.4
Add: Net loss
attributable to
noncontrolling
interest in
subsidiaries - - - 0.2
-------------- -------------- -------------- -------------
Net income
attributable to Shire
plc 165.1 174.3 588.0 491.6
-------------- -------------- -------------- -------------
(1) Cost of product sales includes amortization of intangible assets relating
to favorable manufacturing contracts of $0.4 million for the three months to
December 31, 2010 (2009: $0.4 million) and $1.7 million for the year to December
31, 2010 (2009: $1.7 million). SG&A costs include amortization and impairment
charges of intangible assets relating to intellectual property rights acquired
of $33.9 million for the three months to December 31, 2010 (2009: $35.3 million)
and $176.2 million for the year to December 31, 2010 (2009: $136.9 million).
Unaudited US GAAP results for the three months and year to December 31, 2010
Consolidated Statements of Income (continued)
3 months to 3 months to Year to Year to
December 31, December 31, December 31, December 31,
2010 2009 2010 2009
-------------- -------------- -------------- -------------
Earnings per ordinary
share - basic
Earnings from
continuing operations 30.1c 32.1c 107.7c 93.2c
Loss from discontinued
operations - - - (2.3c)
-------------- -------------- -------------- -------------
Earnings per ordinary
share - basic 30.1c 32.1c 107.7c 90.9c
Earnings per ADS -
basic 90.3c 96.3c 323.1c 272.7c
-------------- -------------- -------------- -------------
Earnings per ordinary
share - diluted
Earnings from
continuing operations 29.4c 31.2c 105.3c 91.9c
Loss from discontinued
operations - - - (2.2c)
-------------- -------------- -------------- -------------
Earnings per ordinary
share - diluted 29.4c 31.2c 105.3c 89.7c
Earnings per ADS -
diluted 88.2c 93.6c 315.9c 269.1c
-------------- -------------- -------------- -------------
Weighted average
number of shares
(millions):
Basic 547.7 542.6 546.2 540.7
Diluted 590.6 584.6 590.3 548.0
-------------- -------------- -------------- -------------
Unaudited US GAAP results for the three months and year to December 31, 2010
Consolidated Statements of Cash Flows
3 months to 3 months to Year to Year to
December December December
December 31, 31, 31, 31,
2010 2009 2010 2009
$M $M $M $M
-------------- ------------- ------------- ------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income 165.1 174.3 588.0 491.4
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Loss from discontinued
operations - - - 12.4
Depreciation and
amortization 66.3 72.8 255.5 250.2
Share based
compensation 18.0 15.6 62.2 65.7
IPR&D - 1.6 - 1.6
Impairment of
intangible assets - - 42.7 -
Gain on sale of non-
current investments - - (11.1) (55.2)
Gain on sale of product
rights (12.4) - (16.5) (6.3)
Other 3.8 1.5 9.1 13.0
Movement in deferred
taxes (62.9) (11.3) (15.0) (98.8)
Equity in
(earnings)/losses of
equity method investees (1.2) 1.7 (1.4) 0.7
Changes in operating
assets and liabilities:
Decrease/(increase) in
accounts receivable 23.6 (55.9) (114.4) (212.3)
Increase/(decrease) in
sales deduction accrual 53.6 (77.5) 222.6 134.7
Increase in inventory (4.1) (14.5) (58.2) (38.7)
Decrease/(increase) in
prepayments and other
current assets 28.8 38.2 (38.9) 30.1
(Increase)/decrease in
other assets (2.1) (4.5) (1.4) 0.8
Increase in accounts
payable and other
liabilities 66.4 94.9 25.9 38.6
Returns on investment
from joint venture - - 5.8 4.9
Cash flows used in
discontinued operations - - - (5.9)
-------------- ------------- ------------- ------------
Net cash provided by
operating activities(A) 342.9 236.9 954.9 626.9
-------------- ------------- ------------- ------------
Unaudited US GAAP results for the three months and year to December 31, 2010
Consolidated Statements of Cash Flows (continued)
3 months to 3 months to Year to Year to
December 31, December 31, December 31, December 31,
2010 2009 2010 2009
$M $M $M $M
-------------- -------------- -------------- -------------
CASH FLOWS FROM
INVESTING ACTIVITIES:
Movements in
restricted cash 553.3 6.2 6.3 (3.9)
Purchases of
subsidiary
undertakings and
businesses, net of
cash acquired (449.6) (7.8) (449.6) (83.3)
Payments on foreign
exchange contracts
related to Movetis (12.2) - (33.4) -
Purchases of non-
current investments (1.9) (0.9) (2.9) (0.9)
Purchases of property,
plant and equipment
("PP&E") (64.9) (85.0) (326.6) (254.4)
Purchases of
intangible assets - - (2.7) (7.0)
Proceeds from disposal
of non-current
investments, PP&E and
products rights 2.2 0.5 4.3 20.2
Proceeds from disposal
of subsidiary
undertakings - - - 6.7
Returns of equity
investments and
proceeds from short
term investments 7.2 - 7.2 0.2
-------------- -------------- -------------- -------------
Net cash provided
by/(used in) investing
activities(B) 34.1 (87.0) (797.4) (322.4)
-------------- -------------- -------------- -------------
CASH FLOWS FROM
FINANCING ACTIVITIES:
Payment under building
finance obligation (0.5) (
Unternehmensinformation / Kurzprofil:
Datum: 10.02.2011 - 13:01 Uhr
Sprache: Deutsch
News-ID 51327
Anzahl Zeichen: 65596
contact information:
Town:
Jersey
Kategorie:
Business News
Diese Pressemitteilung wurde bisher 227 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"Outstanding 2010 results: Non GAAP EPS up 21% to $4.23. Good earnings growth expected in 2011."
steht unter der journalistisch-redaktionellen Verantwortung von
Shire plc (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
