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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period ended September 30, 2003

DRAFT 1A

Commission file number: 0-29630

SHIRE PHARMACEUTICALS GROUP PLC
(Exact name of registrant as specified in its charter)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

As of November 7, 2003, the number of outstanding common shares of the Registrant was 477,349,266.

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THE “SAFE HARBOR” STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Statements included herein that are not historical facts, 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 affected. The risks and uncertainties include, but are not limited to, risks associated with the inherent uncertainty of pharmaceutical research, product development, manufacturing and commercialization, the impact of competitive products, including, but not limited to, the impact on Shire’s Attention Deficit Hyperactivity Disorder (ADHD) franchise, patents, including but not limited to, legal challenges relating to Shire’s ADHD franchise, government regulation and approval, including but not limited to the expected product approval dates of lanthanum carbonate (FOSRENOL^®), METHYPATCH^®, XAGRID^® and the adult indication for ADDERALL XR^® and other risks and uncertainties detailed from time to time in Shire’s filings, including the Annual Report filed on Form 10-K/A by Shire with the Securities and Exchange Commission.

The following are trademarks of Shire or companies within the Shire Group, which are the subject of trademark registrations in certain territories.

ADDERALL XR^® (mixed amphetamine salts)
ADDERALL^® (mixed amphetamine salts)
AGRYLIN^® (anagrelide hydrochloride)
AMATINE^® (midodrine hydrochloride)
CALCICHEW^® (calcium carbonate)
CARBATROL^® (carbamazepine)
FOSRENOL^® (lanthanum carbonate)
FLUVIRAL^® S/F (split virion influenza vaccine)
METHYPATCH^® (methylphenidate)
PROAMATINE^® (midodrine hydrochloride)
SOLARAZE^® (diclofenac sodium 3%)
TROXATYL^® (troxacitabine)
XAGRID^® (anagrelide hydrochloride)

The following are trademarks of third parties.

3TC (trademark of GlaxoSmithKline (GSK))
ADEPT (trademark of ML Laboratories)
COMBIVIR (trademark of GSK)
EPIVIR (trademark of GSK)
EPIVIR-HBV (trademark of GSK)
HEPTOVIR (trademark of GSK)
PENTASA (trademark of Ferring AS)
REMINYL (trademark of Johnson & Johnson)
TRIZIVIR (trademark of GSK)
ZEFFIX (trademark of GSK)

2

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

     SHIRE PHARMACEUTICALS GROUP PLC
CONDENSED CONSOLIDATED BALANCE SHEETS

The accompanying notes are an integral part of these consolidated financial statements.

3

SHIRE PHARMACEUTICALS GROUP PLC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

4

SHIRE PHARMACEUTICALS GROUP PLC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)
(Unaudited)

The results for the three and nine months ended September 30, 2002 have been restated to reflect the disposal of the “Over-The-Counter” (OTC) business, which has been accounted for as a discontinued operation.

The accompanying notes are an integral part of these consolidated financial statements.

SHIRE PHARMACEUTICALS GROUP PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME/(LOSS)
(Unaudited)

The components of accumulated other comprehensive income/(loss) as at September 30, 2003 and December 31, 2002 are as follows:

The accompanying notes are an integral part of these consolidated financial statements.

5

SHIRE PHARMACEUTICALS GROUP PLC
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)

6

SHIRE PHARMACEUTICALS GROUP PLC
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
(Unaudited)

The accompanying notes are an integral part of these consolidated financial statements.

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SHIRE PHARMACEUTICALS GROUP PLC
     NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies

a) Description of Operations and Principles of Consolidation

Shire Pharmaceuticals Group plc (‘Shire’ or ‘the Company’) is a global specialty pharmaceutical company with a strategic focus on meeting the needs of the specialist physician and currently focuses on developing projects and marketing products in the areas of central nervous system (CNS), gastrointestinal (GI) and renal.

Shire has operations in the world’s key pharmaceutical markets (US, Canada, UK, France, Italy, Spain and Germany) as well as a specialist drug delivery unit in the US. The Company has a particular interest in innovative therapies that are prescribed by specialist doctors as opposed to primary care physicians.

The business is currently operated and managed within five individual operating segments: US, International, Corporate, Research and Development and Biologics (vaccines business). Within these segments, revenues are derived primarily from three sources: sales of products by Shire’s own sales and marketing operations, royalties (where Shire has out-licensed to third parties) and licensing and development fees.

The implementation of Shire’s new strategy, announced on July 31, 2003, is progressing well:

• Plans to spin off the vaccines business (Biologics) are advancing and in parallel, the Company is examining a number of expressions of interest from potential purchasers;
  
  
• TROXATYL (for the treatment of acute myeloid leukaemia and pancreatic cancer) and SPD754 (for HIV) have attracted a number of potential partners;
  
  
• During the three months ended September 30, 2003 the Company closed its early stage research unit (Lead Optimization) based in Canada, at a cost of $12.1 million (refer to note 10 for further information relating to the closure);
  
  
• A US manufacturing and distribution site has been closed in the three months ended September 30, 2003;
  
  
• A review of the organizational structure and US site consolidation is ongoing.

Shire’s strategic priority is now on the development of later stage and lower risk projects. Shire will continue to strengthen its portfolio through merger and acquisition activities and will also in-license projects and products on reasonable commercial terms, and then develop and launch them.

The Company’s principal revenues in the relevant markets include:

• in the US, ADDERALL XR and ADDERALL for the treatment of ADHD; AGRYLIN for the treatment of elevated blood platelets; PENTASA for the treatment of ulcerative colitis; CARBATROL for the treatment of epilepsy; and PROAMATINE for the treatment of orthostatic hypotension. In addition, the Company receives royalties on sales of REMINYL for the treatment of Alzheimer’s disease, marketed by Johnson & Johnson, and on EPIVIR, COMBIVIR and TRIZIVIR for the treatment of HIV/AIDS and EPIVIR-HBV for the treatment of hepatitis B, each marketed by GSK;
  
  
• in the UK and the Republic of Ireland, the CALCICHEW range, used primarily as adjuncts in the treatment of osteoporosis, and REMINYL, which is co-promoted by Janssen-Cilag;
  
  
• in Canada, 3TC for the treatment of HIV/AIDS, COMBIVIR and HEPTOVIR (all marketed in partnership with GSK); AMATINE and FLUVIRAL S/F, a vaccine for the prevention of influenza;
  
  
• in the Rest of the World, royalties on the sales of ZEFFIX for the treatment of hepatitis B, marketed by GSK, and royalties on sales of REMINYL marketed by Johnson & Johnson.
  

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1. Summary of Significant Accounting Policies (continued)

In addition, the Company has a number of projects in later stage development including:

• XAGRID in the EU (which is the trade name of AGRYLIN in the EU). On July 25, 2003 the Company received a positive Committee for Proprietary Medicinal Products opinion;
  
  
• FOSRENOL for the treatment of high blood phosphate levels associated with kidney failure. The Company submitted the first regulatory submission for FOSRENOL under the European Mutual Recognition procedure on March 13, 2001 and a New Drug Application (NDA) with the US FDA on April 30, 2002. The Company received an ‘approvable’ letter from the US FDA on March 3, 2003;
  
  
• Adult indication for ADDERALL XR. The Company received an ‘approvable’ letter from the US FDA on October 20, 2003;
  
  
• METHYPATCH, a transdermal delivery system for the once daily treatment of ADHD. Shire and Noven Pharmaceuticals Inc. are addressing the outstanding issues raised by the US FDA in the ‘not approvable’ letter issued on April 28, 2003;
  
  
• SPD417 for bipolar disorder;
  
  
• SPD476 for ulcerative colitis;
  
  
• SPD503 (Guanfacine) for ADHD.

b) Basis of Presentation

These interim financial statements, which include the operations of the Company, and the financial information included here, are unaudited. They have been prepared in accordance with generally accepted accounting principles in the United States of America (US GAAP) and Securities and Exchange Commission regulations for interim reporting. Certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to such rules and regulations. However, such information includes all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary to fairly state the results of the interim periods. Interim results are not necessarily indicative of results to be expected for the full year.

The December 31, 2002 balance sheet was derived from audited financial statements but does not include all disclosures required by US GAAP. However, the Company believes that the disclosures are adequate to make the information presented not misleading.

These interim financial statements should be read in conjunction with the Company’s consolidated balance sheets as of December 31, 2002 and 2001, and the related consolidated statements of operations, cash flows and changes in shareholders’ equity for each of the three years in the period ended December 31, 2002.

c) Accounting Pronouncements adopted during the period

In April 2003, the FASB issued Statement No. 149, “Amendment of SFAS No. 133 on Derivative Instruments and Hedging Activities” (SFAS No. 149). The Statement amends and clarifies accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under SFAS No. 133. In particular, it (1) clarifies under what circumstances a contract with an initial net investment meets the characteristic of a derivative as discussed in SFAS No. 133, (2) clarifies when a derivative contains a financing component and (3) amends certain other existing pronouncements.

SFAS No. 149 is effective for contracts entered into or modified after June 30, 2003, except as stated below, and for hedging relationships designated after June 30, 2003. The provisions of SFAS No. 149 that relate to SFAS No. 133 Implementation Issues that have been effective for fiscal quarters that began prior to June 15, 2003, should continue to be applied in accordance with their respective effective dates. In addition, certain provisions relating to forward purchases or sales of when-issued securities or other securities that do not yet exist, should be applied to existing contracts as well as new contracts entered into after June 30, 2003. SFAS No. 149 should be applied prospectively.

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1. Summary of Significant Accounting Policies (continued)

c) Accounting Pronouncements adopted during the period (continued)

The adoption of this Statement had no material impact on the results of operations and financial position of the Company.

In May 2003, the FASB issued Statement No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity” (SFAS No. 150). The Statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liability and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). Many of these instruments were previously classified as equity. This Statement is effective for financial instruments entered into or modified after May 31, 2003, and otherwise effective at the beginning of the first interim period beginning after June 15, 2003. The adoption of this Statement had no material impact on the results of operations and financial position of the Company.

d) New Accounting Pronouncements

In January 2003, the FASB issued FIN No. 46, “Consolidation of Variable Interest Entities, an Interpretation of APB No. 51” (FIN 46). This interpretation requires certain variable interest entities to be consolidated by the primary beneficiary of the entity if the equity investors in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. FIN 46 is effective for all new variable interest entities created or acquired after January 31, 2003, of which, within the Company, there are none. For variable interest entities created or acquired prior to February 1, 2003, the provisions of FIN 46 must be applied for the first reporting period beginning after December 15, 2003. The Company is in the process of assessing the impact of adopting FIN 46.

2. Analysis of revenue, operating income and reportable segments

The Company has disclosed segment information for the individual operating areas of the business based on the way in which the business is managed and controlled. The Company evaluates performance based on operating income or loss before interest and income taxes.

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2. Analysis of revenue, operating income and reportable segments (continued)