Second Quarter Results to June 30, 2009 Shire plc August 5, 2009 - - PowerPoint PPT Presentation

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Second Quarter Results to June 30, 2009 Shire plc August 5, 2009 - - PowerPoint PPT Presentation

Oct 14, 2022 376 likes •876 views

Second Quarter Results to June 30, 2009 Shire plc August 5, 2009 Angus Russell Michael Cola Chief Executive Officer President, Specialty Pharmaceuticals Graham Hetherington Sylvie Grgoire Chief Financial Officer President, Shire HGT

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Our purpose

We enable people with life-altering conditions to lead better lives

Second Quarter Results to June 30, 2009

Shire plc August 5, 2009

Angus Russell

Chief Executive Officer

Graham Hetherington

Chief Financial Officer

Michael Cola

President, Specialty Pharmaceuticals

Sylvie Grégoire

President, Shire HGT

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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, the Company’s results could be materially adversely

  • affected. The risks and uncertainties include, but are not limited to, risks

associated with: the inherent uncertainty of research, development, approval, reimbursement, manufacturing and commercialization of the Company’s Specialty Pharmaceutical and Human Genetic Therapies products, as well as the ability to secure and integrate new products for commercialization and/or development; government regulation of the Company’s products; the Company’s ability to manufacture its products in sufficient quantities to meet demand; the impact of competitive therapies on the Company’s products; the Company’s ability to register, maintain and enforce patents and other intellectual property rights relating to its products; the Company’s ability to

  • btain and maintain government and other third-party reimbursement for its

products; and other risks and uncertainties detailed from time to time in the Company’s filings with the Securities and Exchange Commission.

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Agenda

  • Opening remarks

Angus Russell

  • Financial review

Graham Hetherington

  • Specialty Pharma update

Michael Cola

  • HGT update

Sylvie Grégoire

  • Concluding remarks

Angus Russell

  • Q & A

All

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Our purpose

We enable people with life-altering conditions to lead better lives

Opening remarks

Angus Russell CEO

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Core product portfolio delivering strong growth

  • Product sales excluding AXR up 20% to $491 million
  • Up 27% on CER basis
  • Non GAAP earnings per ADS* : $0.60
  • Cash generation of $192 million
  • 2009 guidance framework reaffirmed

* Non GAAP diluted earnings per ADS (using full year expected tax rate: 24%) : $0.47

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New phase of Shire’s development

  • Delivering solid earnings through excellent execution
  • Proactive cost management
  • Continuing globalization efforts to reduce reliance on US

market

  • Presence in 26 countries
  • Launching new products
  • INTUNIV – Q4 2009
  • velaglucerase alfa - 2010
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H2 2009 Key events

  • INTUNIV launch
  • velaglucerase alfa submission US/EU
  • DAYTRANA adolescent sNDA filing
  • Carrierwave programs progressed
  • FIRAZYR self admin trial initiation
  • MLD Phase 2/3 initiation
  • PLICERA Phase 2 data
  • SPD550 Phase 2 data

H2-09

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Our purpose

We enable people with life-altering conditions to lead better lives

Financial Review

Graham Hetherington CFO

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2009 Q2 Performance summary

  • 17%
  • 21%

706 558 Product Sales +27% +20% 410 491 Product sales (excl ADDERALL XR)

  • 15%

Like for Like Growth

(2)

  • 45%

352 192 Cash generation

(1)

$0.47 EPS - ADS (diluted - at 24% tax rate)

(1)

  • 36%

$0.95 $0.60 EPS - ADS (diluted)

(1)

  • 47%

264 140 EBITDA

(1)

  • 19%

776 630 Total Revenues Reported Growth Q2 2008 $m Q2 2009 $m

(1) These are non GAAP financial measures. See appendix for a list of items excluded from the GAAP equivalent to calculate these measures. (2) 'Like for Like Growth' excludes movements in average exchange rates, and is calculated after restating Q2 2009 results using Q2 2008 average foreign exchange rates.

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2009 Q2 Total revenues

(1) 'Like for Like Growth' excludes movements in average exchange rates, and is calculated after restating Q2 2009 results using Q2 2008 average foreign exchange rates.

  • 77%
  • 77%

296 67 ADDERALL XR

  • 17%
  • 21%

706 558 Total Product Sales +6% +3% 65 67 Royalties

  • 6%
  • 14%

5 5 Other Revenues

  • 15%
  • 19%

776 630 Total Revenues +27% +20% 410 491 Products sales (excl ADDERALL XR) Like for Like Growth

(1)

Reported Growth Q2 2008 $m Q2 2009 $m

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ADDERALL XR Net sales

Sales deductions - US

Estimate: 55-65% range subject to mix

72% 37% 27% as % of Gross sales $67m $296m $275m Total revenue

Q2 included initial Teva stocking

$11m

  • Net sales - Teva

$6m $6m $5m Net sales - Canada $50m $290m $270m Net sales - US

In line with lower demand versus Q2 Lower sales deduction percentage (see below)

($131) ($173) ($99) Sales deductions $181m $463m $369m Gross sales

Reduced $ destocking per quarter

($67) ($16) ($29) Supply chain destocking

Continued impact of erosion

$248m $479m $398m Demand sales $210.20 $209.53 $174.46 Value per TRx 1,181 2,288 2,281 TRx (‘000s) Second half 2009 trend 2009 Q2 2009 Q1 2008 Q4

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New Phase for Shire

Core Products 49% ADDERALL XR 51% Core Products 88% ADDERALL XR 12%

Q2 2007 Q2 2009 $504m $558m Product sales

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2009 Q2 Portfolio strength and diversity

Q2 2009 Product sales

ELAPRASE 17% LIALDA / MEZAVANT 11% PENTASA 11% FOSRENOL 10% VYVANSE 24% OTHER 18% REPLAGAL 9%

+27% +20% 491 PRODUCTS EXCLUDING ADDERALL XR

  • 11%

89 OTHER +14%

  • 1%

44 REPLAGAL +26% +17% 50 FOSRENOL +21% +21% 54 PENTASA +73% +71% 55 LIALDA / MEZAVANT +15% +6% 85 ELAPRASE +75% +75% 114 VYVANSE

Like for Like Growth (1) Reported Growth Q2 2009 $m

(1) 'Like for Like Growth' excludes movements in average exchange rates, and is calculated after restating Q2 2009 results using Q2 2008 average foreign exchange rates.

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Cash generation

2009 Q2 Cash flow

+192 Tax and interest payments

  • 83

Millions of USD (801)

Net debt at June 30, 2009 (2)

(1,100)

Convertible Debt

299

Cash and cash equivalents as at June 30, 2009 (1)

52

Cash inflow to June 30, 2009

247

Cash and cash equivalents at December 31, 2008

Capital expenditure License payment Other financing Payment for Jerini shares Net cash outflow - Q2 Payment of dividend

Proceeds from sale of Jerini Peptides business

Net cash inflow - Q1 Net cash inflow - H1

  • 60
  • 43
  • 37
  • 3
  • 1
  • 28

+7 +80 +52

(1) Shire’s balance of cash and cash equivalents at June 30, 2009 includes $36m of restricted cash. (2) Shire has a revolving credit facility of $1.2bn which was undrawn at June 30, 2009.

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Emerging shape of 2009 income statement

Second half

Q2 benefited from one-time Massachusetts State tax credit H2 Transfer pricing & 2008 tax filing adjustments Full year guidance (24%) unchanged

2% 24% Tax Rate

  • $14m
  • $26m

versus 2008

Velaglucerase program acceleration Less favourable foreign exchange in H2 Continued proactive cost management

$285m $272m SG&A

  • $9m

+$8m

versus 2008

Continued investment in new products Velaglucerase program acceleration In-licensing activities

$118m $117m R&D

Growth of higher margin products Moderation of XR erosion/mix effect

84% 89% Gross margin Dynamics Direction Q2 Q1 2009 2009

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2009 Guidance maintained

$3.20 FOREX JULY FLEXED EPS-ADS RANGE

Flex rate €1 : $1.37 £1 : $1.56 (based on average of H1 and July 09 rates)

$2.80 $3.13 FOREX MARCH FLEXED EPS-ADS RANGE

Flex rate €1 : $1.30 £1 : $1.42 (based on average March 09 rates)

$2.73

Continued investment in future growth drivers Aggressive cost base management Continued growth in new products

Only two authorised generics as of 1 Oct Multiple generics from 1 Oct Scheduled drug XR erosion curve Aggressive XR erosion curve

$3.40 EPS-ADS PLANNING RANGE AT OCT YTD 2008 FOREX

€1 : $1.52 £1 : $1.95

$3.00

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Our purpose

We enable people with life-altering conditions to lead better lives

Specialty Pharma update

Michael Cola President, Specialty Pharmaceuticals

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VYVANSE continues solid performance

  • Holding market share during the Summer holidays when long-acting

stimulants traditionally lose share

  • Share trends in May and June reflect seasonality related to end of the

school year and resulting drug holidays for pediatric patients

  • VYVANSE is disproportionately affected because it is predominantly a pediatric

product (~70%) versus the market (~55%)*

  • The effect of the reduced volume in the pediatric segment is to shift the mix of

business towards the adult segment during the Summer

  • Since VYVANSE has a lower share in the adult segment due to its more recent

launch, the weighted average effect dampens overall share growth

  • VYVANSE share growth during Summer 2008 was unique due to launch of both

the adult indication and the 13-hour data

  • We have seen NO significant impact on VYVANSE from generic AXR
  • We expect a strong “back to school” performance and continued steady

progress in adult

*SDI May 2009 Vector One National, Pediatric defined as ages 6 - 17

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450,000 500,000 550,000 600,000 650,000 700,000 750,000 800,000 850,000 900,000 950,000 W K 1 W K 3 W K 5 W K 7 W K 9 W K 1 1 W K 1 3 W K 1 5 W K 1 7 W K 1 9 W K 2 1 W K 2 3 W K 2 5 W K 2 7 W K 2 9 W K 3 1 W K 3 3 W K 3 5 W K 3 7 W K 3 9 W K 4 1 W K 4 3 W K 4 5 W K 4 7 W K 4 9 W K 5 1

TRxs

2006-2008 Avg 2009 Fall Back-to- School Source: IMS NPA Weekly

Labor Day Holiday Holiday Season Independence Holiday

Summer School Holiday

The ADHD market is greatly impacted during Summer holiday

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VYVANSE has held share despite the Summer holiday

50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000

Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09

TRx Volume

0% 2% 4% 6% 8% 10% 12%

TRx Share

Adult TRx Pediatric TRx TRx Share

Adult launch

VYVANSE TRx Volume and Share June 2007 – June 2009

Source: IMS NPA Monthly * 12.3% week ending July 24th 2009 IMS

*

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14.5%

5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% J a n

  • 8

F e b

  • 8

M a r

  • 8

A p r

  • 8

M a y

  • 8

J u n

  • 8

J u l

  • 8

A u g

  • 8

S e p

  • 8

O c t

  • 8

N

  • v
  • 8

D e c

  • 8

J a n

  • 9

F e b

  • 9

M a r

  • 9

A p r

  • 9

M a y

  • 9

J u n

  • 9

TRx Share

Pediatric Market Share

Sources: SDI Vector One National; IMS NPA Monthly

VYVANSE pediatric share has continued to increase even during the Summer

Overall volume declines 30-35% in the pediatric segment from March to July

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8.5%

3% 4% 5% 6% 7% 8% 9% Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 TRx Share

FDA Adult Approval

Adult Market Share

Sources: SDI Vector One National

As the adult segment is a seasonally higher portion of business, the weighted average effect dampens overall share growth

VYVANSE adult share continues to grow, but is lower than pediatric due to its more recent launch

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The ADHD market continues to grow driven by the adult segment

3.8% 16.2% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18%

Pediatric Adult

June 2009 MAT Market Growth by Age Segment

Year to date market growth per IMS: 8.9%

Sources: Age Specific - SDI Vector One National; Overall - IMS

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Generic AXR has taken share from the brand while total molecule share has remained flat, indicating no therapeutic substitution

100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Total Prescriptions (TRx) 0% 5% 10% 15% 20% 25% TRx Share Adderall XR Amph Salt ER Combined Share Source: IMS NPA Monthly

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Generic AXR has had little to no impact on VYVANSE

  • In 2Q09 there were over 400,000 net switches to

generic AXR*

  • 97% of those switches were from branded AXR or generic

ADDERALL IR

  • < 1% of those switches were from VYVANSE (in fact, there were

more switches from Concerta)

  • VYVANSE continues to draw more than 60% of its switch patients

from products other than ADDERALL and ADDERALL XR

*IMS NPA Market Dynamics June 2009

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Generic AXR has had little to no impact on VYVANSE

  • VYVANSE has excellent 3rd Party reimbursement status

and it continues to improve post introduction of generic ADDERALL XR with both Managed Care and Medicaid.

  • Since April 1st, two large managed care organizations

and two state Medicaid’s have moved VYVANSE to preferred status on their formularies

  • In addition four smaller managed care organizations have also

moved VYVANSE to preferred status

  • Generic XR remains significantly more expensive on average

cost per prescription than VYVANSE

*IMS NPA Market Dynamics June 2009

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We expect a strong 2H09 performance

  • Back to school volume and pediatric market share bounce
  • Strong market growth in adults
  • Study 316 in adults (14-hour efficacy)
  • Upside potential from GSK co-promotion

*IMS NPA Market Dynamics June 2009

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INTUNIV received a Complete Response letter from the FDA

  • Shire and FDA were not able to reach agreement on final product

labeling in time to meet the PDUFA date (27-Jul-09)

  • FDA did not identify safety concerns regarding INTUNIV or request

new clinical data or additional analyses in the complete response letter

  • Shire and FDA will continue to work together to resolve the

remaining labeling language

  • We anticipate a 4Q09 launch as planned
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INTUNIV is a major opportunity for Shire in ADHD

  • INTUNIV is a breakthrough non-scheduled product with

demonstrated efficacy in ADHD patients with oppositional and disruptive symptoms

  • INTUNIV will complement VYVANSE as it targets a different ADHD

sub-population and should expand the market

  • VYVANSE remains the cornerstone of our ADHD franchise
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5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000

M a r M a y J u l S e p N

  • v

J a n M a r M a y J u l y S e p t N

  • v

J a n M a r M a y Rx Volume

0% 2% 4% 6% 8% 10% 12% 14% 16% 18%

Rx Share

NRx Volume TRx Volume NRx Share TRx Share

Source: IMS Monthly NPA

LIALDA: Continued strong performance

GI franchise (LIALDA and PENTASA) has 33% NRx share of U.S. oral mesalamine market

LIALDA TRx Volume and Share March 2007 – June 2009

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New opportunities for core products will drive growth

  • LIALDA global Phase 3 trials in diverticulitis are ongoing
  • VYVANSE non-ADHD: Phase 2 clinical trials planned or

underway with data anticipated 2H10

  • Adjunctive therapy in Depression
  • Cognitive Impairment in Depression
  • Negative Symptoms and Cognitive Impairment in Schizophrenia
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We continue efforts to progress early pipeline products

  • Early pipeline efforts are focused on investing in lower risk

development of NCEs

  • Redesigning known molecules to create NCEs with improved

attributes or enhanced PK/PD

  • SPD 535 – Anagrelide analogue with platelet lowering

ability and without PDEIII inhibition

  • Will initiate Phase 1 in 3Q09. Go/no-go based on established

biomarkers

  • Initial PoC program targets prevention of thrombotic complications

associated with arteriovenous grafts in hemodialysis

  • PoC for broader utility as an anti-coagulant
  • CarrierWave
  • Activities underway primarily focused on NCE’s in Pain and ADHD
  • More data available in 1Q10 on several products
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Our purpose

We enable people with life-altering conditions to lead better lives

HGT update

Sylvie Grégoire President, Shire HGT

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HGT product highlights

  • ELAPRASE
  • Approved in 43 countries
  • Validation complete for new manufacturing facility
  • REPLAGAL
  • Approved in Brazil in July
  • Now approved in 45 countries
  • EMEA approval of serum-free bioreactor manufacturing process
  • FIRAZYR
  • Approved in 31 countries, launched in nine
  • US FAST-3 study initiated in June
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HGT pipeline highlights

  • velaglucerase alfa
  • Positive results in first of three Phase 3 trials
  • Significant increase in mean hemoglobin concentration
  • Fast Track designation
  • Initiated rolling NDA submission July 30
  • Treatment Protocol approved in US and open for enrollment
  • US filing Q3 2009 / EU filing Q4 2009
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HGT product development pipeline

  • HGT 1111(METAZYM) for MLD
  • Phase 2/3 study to start H2 2009
  • Chaperone therapies
  • AMIGAL for Fabry - reviewing EMEA feedback
  • PLICERA for Gaucher - Phase 2 results H2 2009
  • idursulfase-IT for Hunter CNS
  • Phase 1 to start H2 2009
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Product development pipeline progression

Product POC Preclinical IND Tox Phase I/II Phase II/III Commercial

* Currently on clinical hold

HGT 3310 (Amigal)

Fabry disease

HGT 3410 (Plicera)

Gaucher disease

HGT 3510 (AT2220) *

Pompe disease Novel technology - Pharmacological chaperones

Growth Alignment

Revenue growth through marketed product support EU Launch activities, US Ph III trial

HGT 2310

Hunter CNS

HGT 1111

MLD ERT IV Grow ERT franchise

Replagal

Fabry disease

Elaprase

Hunter syndrome

Firazyr

HAE

Velaglucerase

Gaucher disease Expand pipeline through internal research capability

HGT 1410

Sanfilippo ERT

GLD

GLD ERT

Research

Novel technology: ERT's delivered into CNS

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Our purpose

We enable people with life-altering conditions to lead better lives

Concluding remarks

Angus Russell CEO

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Concluding remarks

  • Strong financial performance
  • Product sales excluding ADDERALL XR up 20%
  • Proactive cost management
  • 2009 guidance maintained
  • Continuing momentum in our business
  • Drive growth in existing product portfolio
  • Launch new products
  • INTUNIV
  • velaglucerase alfa
  • Increase our global reach
  • Develop, advance and enhance our strong pipeline
  • Aspiration to grow sales in the mid teens range on average

between 2009 and 2015

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Our purpose

We enable people with life-altering conditions to lead better lives

Questions and Answers

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Our purpose

We enable people with life-altering conditions to lead better lives

APPENDIX

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2009 Q2 Key financial ratios

34% 35% 22% EBITDA

(2) (% total revenue)

27% 38% 12% EBITDA

(1) (% of product sales)

18% 42%

  • 5%

40% 51% SG&A 35% 18%

  • 7%

18% 21% R&D 88% 88% 84% Gross margin 40%

  • 21%

Product sales y-o-y Growth Q2 08 y-o-y Growth Q4 08 Q2 09 FINANCIAL RATIOS (% of product sales)

(1) Excluding royalties and other revenues. (2) Including royalties and other revenues. This slide contains non GAAP financial measures. See appendix for a list of items excluded from the GAAP equivalent to calculate these measures.

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2009 Q2 Royalties

n/a n/a

  • 14

ADDERALL XR +6% +3% 65 67 Total Royalties

  • 19%
  • 25%

18 14 Other

  • 2%
  • 6%

11 10 ZEFFIX

  • 11%
  • 18%

36 29 3TC Like for Like Growth (1) Reported Growth Q2 2008 $m Q2 2009 $m

(1) 'Like for Like Growth' excludes movements in average exchange rates, and is calculated after restating Q2 2009 results using Q2 2008 average foreign exchange rates.

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2009 Q2 Operating income / EPS

(1) These are non GAAP financial measures. See appendix for a list of items excluded from the GAAP equivalent to calculate these measures.

  • 36%

$0.95 $0.60 Non GAAP(1) +$0.68 ($0.44) $0.24 GAAP EPS - ADS (diluted)

  • 53%

247 116 Non GAAP(1) 314 81 Adjustments +$102m (67) 35 GAAP Operating income / (loss) Reported Growth Q2 08 $m Q2 09 $m

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2009 Q2 EPS Reconciliation

94.8c 188.1 60.3c 109.1 Non GAAP Net income / Diluted EPS (ADS) (24.3c) (46.7) (14.1c) (25.6) Taxes on above adjustments

  • 5.4c

9.8 Discontinued operations 162.9c 313.8 44.7c 80.8 Non GAAP adjustments to operating income 29.7c 57.4 3.3c 5.9 Divestments and re-organizations 70.2c 135.0 22.5c 40.6 Acquisitions and integration activities 63.0c 121.4 18.9c 34.3 Amortization and asset impairments (43.8c) (79.0) 24.3c 44.1 US GAAP Net income / Diluted EPS (ADS) cents/ADS $m cents/ADS $m Q2 08 Q2 09

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2009 Q2 Cash generation reconciliation

352 192 Cash Generation 136 37 Payment for acquired and in-licensed products 36 83 Tax and interest payments (net) 180 72 Net cash provided by operating activities Q2 2008

$m

Q2 2009

$m

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To be consistent with our 2009 presentation, for 2008 comparatives we have reclassified certain Medical Affairs costs related to promotional and marketing activities from R&D to SG&A, as follows:

All amounts in $ million

411.7 411.7 400.4 400.4 425.3 425.3 406.5 406.5 288.9 282.6 283.6 276.7 298.5 289.6 297.6 287.4 SG&A 122.8 129.1 116.8 123.7 126.8 135.7 108.9 119.1 R&D NON GAAP 471.4 471.4 447.5 447.5 574.1 574.1 456.5 456.5 345.5 339.2 327.3 320.4 437.7 428.8 344.7 334.5 SG&A 125.9 132.2 120.2 127.1 136.4 145.3 111.8 122.0 R&D US GAAP

Reclassified As reported Reclassified As reported Reclassified As reported Reclassified As reported

2008 Q4 2008 Q3 2008 Q2 2008 Q1

Presentation of 2008 R&D and SG&A

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  • This presentation contains financial measures not prepared in accordance with US GAAP.
  • These Non GAAP financial measures are used by Shire’s management to make operating

decisions because they facilitate internal comparisons of the Company’s performance to historical results and to competitors’ results. They should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with US GAAP.

  • The following items are excluded from these non-GAAP financial measures:

Amortization and asset impairments:

  • Intangible asset amortization and impairment charges; and
  • Other than temporary impairment of investments.

Acquisitions and integration activities:

  • Upfront payments and milestones in respect of in-licensed and acquired products;
  • Costs associated with acquisitions, including transaction costs, and fair value adjustments on contingent

consideration and acquired inventory;

  • Costs associated with the integration of companies; and
  • Incremental interest charges arising on the settlement of litigation with the former dissenting shareholders of

TKT. Divestments, re-organizations and discontinued operations:

  • Gains and losses on the sale of non-core assets;
  • Costs associated with restructuring and re-organization activities;
  • Termination costs;
  • Costs associated with the introduction of the new holding company; and
  • Income / (losses) from discontinued operations.

Non GAAP measures