Second Quarter Results Second Quarter Results ended 30 June 2002 ended 30 June 2002 Shire Pharmaceuticals Group plc Shire Pharmaceuticals Group plc 1
Comment on the “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995 The statements made during today’s presentation, or in response to questions during the Question & Answer period, 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 that such risks or uncertainties materialise, 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 and commercialisation, the impact of competitive products, including but not limited to the impact of some of Shire’s ADHD franchise of which estimated forecast are speculative and should be read accordingly, patents, government regulation and approval, and other risks and uncertainties detailed from time to time in periodic reports produced by Shire, including the Annual Report filed on Form 10K by Shire with the Securities and Exchange Commission. Trademark Information: Unless otherwise indicated, certain product names set out in this document are trademarks of the Shire Group, many of which are the subject of trademark registrations in certain territories. These names include, but are not limited to, Adderall, Adderall XR, Agrylin, Colazide, Carbatrol, DextroStat, Dirame, Fluviral S/F, Fosrenol, Foznol, MMX, Pacis, Pentasa, ProAmatine, Solaraze, Troxatyl, EnSoTrol, Microtrol, OptiScreen, ProScreen, and Solutrol. 3TC, Epivir, Combivir, Trizivir, and Zeffix are trademarks of GlaxoSmithKline. Reminyl and Concerta are trademarks of Johnson & Johnson. Aricept is a trademark of Pfizer / Eisai. Exelon is a trademark of Novartis. NeisVac-C is a trademark of Baxter International. Adept is a trademark of ML Laboratories. 2
Agenda Second Quarter 2002 Rolf Stahel Second Quarter 2002 Rolf Stahel Review Review Second Quarter 2002 Angus Russell Second Quarter 2002 Angus Russell Financial Review Financial Review R&D Review Wilson Totten R&D Review Wilson Totten Summary Rolf Stahel Summary Rolf Stahel Question & Answer All Question & Answer All 3
Rolf Stahel - Chief Executive Rolf Stahel - Chief Executive Second Quarter 2002 Review Second Quarter 2002 Review Shire Pharmaceuticals Group plc Shire Pharmaceuticals Group plc 4
Q2 2002 Highlights 22% revenues and 9% EPS growth* US ADHD $ market growth 42% YTD** ADDERALL brand revenue up 50% in Q2*** Good progress with REMINYL In-licensed mesalazine MMX and SOLARAZE Further upgrading on forecasts for the year On track to deliver revenues of $1billion for 2002 * before stock option compensation and one time exceptional charges ** For period 1 January 02 to 31 May 02 *** May 2001 one tier pricing, Q2 02 launch of 2 new strengths plus price increase of 6% for Adderall and Adderall XR 5
Financial Highlights – Q2 2002 Financial Highlights – Q2 2002 (before stock option compensation and one time exceptional charges) (before stock option compensation and one time exceptional charges) Millions of USD, except per share amounts Millions of USD, except per share amounts Revenues $254.1 + 22% Revenues $254.1 + 22% Operating income $77.7 + 19% Operating income $77.7 + 19% Income before tax $81.7 + 16% Income before tax $81.7 + 16% EPS (diluted): EPS (diluted): Ordinary shares 11.6c Ordinary shares 11.6c + 9% ADS 34.9c ADS 34.9c Q2 2001 31.7c 6
Key Product Sales – Q2 2002 Millions of USD Q2 02 Q2 01 % Growth ADDERALL XR 75.8 -- n/a ADDERALL 28.3 69.4 - 59 ADDERALL Brand 104.1 69.4 + 50 AGRYLIN 29.4 25.8 + 14 PENTASA 21.5 19.1 + 13 CARBATROL 12.6 9.9 + 27 PROAMATINE 10.9 10.5 + 3 7
Royalty Income – Q2 2002 Millions of USD Q2 02 Reported Underlying Royalties Growth % Growth %* 3TC 30.7 -3 +4 ZEFFIX 4.5 +2 +16 Other 5.3 +76 -- Total 40.5 +3 -- Underlying sales growth expressed in constant exchange rates, i.e excluding Emory settlement both in 2001 and 2002 8
US ADHD Market Share Changes US ADHD Market Share Changes 5 November 2001 to 19 July 2002 5 November 2001 to 19 July 2002 18.97% 20% 11.94% 15% 10% 1.76% -24.83% 0.67% 5% 0% -0.92% -5% -7.59% -10% -15% -20% -25% Adderall 3 generic Metadate Concerta All Others A/O MPH Adderall XR copies of CD Adderall Current ADHD market share = 7.31% Source: IMS National Prescription Audit (week ending 19 July 2002) Share of Shire June revenue = 9.8% 9
REMINYL: US Weekly NRx Share* % 16.0 15.0 New Prescription Share 14.0 13.0 12.0 11.0 10.0 Feb-01 Feb-15 Dec-07 Dec-21 Jan-04 Jan-18 Mar-01 Mar-15 Mar-29 Apr-12 Apr-26 May-10 May-24 Jun-07 Jun-21 Source: IMS Weekly (National) Market defined as USC5=20400 * up until 28 June 2002 10
REMINYL: UK Market All Products Launch Aligned - Retail Prescriptions* 9000 8000 7000 6000 5000 Rx 4000 3000 2000 1000 0 1 2 3 4 5 6 7 8 9 10 11 12 8-weekly periods ending 5 July 2002 * Source: Scripcount plus Rem inyl Ar icept Exelon 11
FOSRENOL FOSRENOL EU Substantial additional, supportive data filed with “Rapporteur” Country during May – June 2002 Review of all sections of submission in progress Fosrenol first EU launches early 2003* US FDA has accepted FOSRENOL dossier – expected first response by H2 2003 * Subject to regulatory approval / acceptance 12
MMX (Technology) – Ulcerative Colitis MMX (Technology) – Ulcerative Colitis Proprietary system for targeting mesalamine (5-amino salicylic acid) to the bowel Low number of tablets per day Has potential to become substantially bigger than Pentasa Currently in Phase II development Rights in-licensed May 2002 for US, Canada, EU* and Japan * Excluding Italy 13
Angus Russell - Group Finance Director Angus Russell - Group Finance Director Second Quarter 2002 Financial Review Second Quarter 2002 Financial Review Shire Pharmaceuticals Group plc Shire Pharmaceuticals Group plc 14
Financial Highlights (before stock option compensation and one time exceptional charges) Millions of USD, except per share amounts Q2 02 % YTD 02 % Revenues $254.1 +22 497.3 +26 Operating income $77.7 +19 150.3 +26 Income before tax $81.7 +16 158.9 +24 EPS (diluted): - Ordinary shares 11.6c 22.6c +9 +17 - ADS 34.9c 67.8c 15
Key Product Sales – Q2 2002 Millions of USD Q2 02 Q2 01 Growth % US Scrip Growth % ADDERALL XR 75.8 -- n/a n/a ADDERALL 28.3 69.4 -59 -64 ADDERALL Brand 104.1 69.4 +50 -7 AGRYLIN 29.4 25.8 +14 +24 PENTASA 21.5 19.1 +13 +8 CARBATROL 12.6 9.9 +27 +10 PROAMATINE 10.9 10.5 +3 +15 * Source: IMS Health 16
Financial Ratios – Q2 2002 (before stock option compensation and one time exceptional charges) Q2 02 Q1 02 Q2 01 FY 01 COGS : Product sales 15 13 16 16 Gross margin 85 87 84 84 R&D : Revenues 18 20 20 19 S,G&A (excl. D&A) : 40 42 38 37 Product sales Operating margin 31 30 31 32 17
Cash Flow – Q2 2002 Cash Flow – Q2 2002 Millions of USD Cash generation +$40m -$18m Tax / interest -$20m Products / equity investments -$5m Fixed assets Financing +$3m Net cash surplus for Q2 2002 : $nil 18
Balance Sheet Balance Sheet Millions of USD 30.06.02 31.03.02 31.12.01 Net assets 1,421 1,315 1,263 Net cash 536 537 435 Gross cash* 940 944 842 * Cash, cash equivalents, and marketable securities 19
Future prospects – FY 2002 / 2003 Future prospects – FY 2002 / 2003 Full year 2002 New Guidance (Q2) Previous Guidance (Q1) Full year 2002 New Guidance (Q2) Previous Guidance (Q1) Revenue growth mid to high teens low to mid teens Revenue growth mid to high teens low to mid teens EPS mid to high single equivalent to FY2001, EPS mid to high single equivalent to FY2001, digit growth potential for some growth digit growth potential for some growth Operating margin upper end of 25% – 30% upper end of 25%-30% Operating margin upper end of 25% – 30% upper end of 25%-30% stated range target stated range target stated range target stated range target Full year 2003 Full year 2003 Good business growth expected, assuming: Good business growth expected, assuming: Anticipated continued success of ADDERALL XR Anticipated continued success of ADDERALL XR Launch and roll out of FOSRENOL in EU* and US* Launch and roll out of FOSRENOL in EU* and US* Growth from other significant sources of revenue Growth from other significant sources of revenue * Subject to regulatory approvals 20
Dr Wilson Totten – Group R&D Director Dr Wilson Totten – Group R&D Director R&D Review R&D Review Shire Pharmaceuticals Group plc Shire Pharmaceuticals Group plc 21
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