Document_and_Entity_Informatio
Document and Entity Information (USD $) | 9 Months Ended | ||
In Billions, except Share data in Millions, unless otherwise specified | Sep. 30, 2014 | Oct. 24, 2014 | Jun. 30, 2014 |
Document and Entity Information [Abstract] | ' | ' | ' |
Document Type | '10-Q | ' | ' |
Document Period End Date | 30-Sep-14 | ' | ' |
Amendment Flag | 'false | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Central Index Key | '0000936402 | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' |
Entity Registrant Name | 'Shire plc | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 598.5 | ' |
Document Fiscal Year Focus | '2014 | ' | ' |
Document Fiscal Period Focus | 'Q3 | ' | ' |
Entity Public Float | ' | ' | $45.90 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $467.70 | $2,239.40 |
Restricted cash | 54.5 | 22.2 |
Accounts receivable, net | 1,079.30 | 961.2 |
Inventories | 548.9 | 455.3 |
Assets held for sale | ' | 31.6 |
Deferred tax asset | 315.3 | 315.6 |
Prepaid expenses and other current assets | 402.4 | 263 |
Total current assets | 2,868.10 | 4,288.30 |
Non-current assets: | ' | ' |
Investments | 46.8 | 31.8 |
Property, plant and equipment, net | 845.6 | 891.8 |
Goodwill | 2,373.70 | 624.6 |
Other intangible assets, net | 5,227.40 | 2,312.60 |
Deferred tax asset | 136.7 | 141.1 |
Other non-current assets | 42.2 | 32.8 |
Total assets | 11,540.50 | 8,323 |
Current liabilities: | ' | ' |
Accounts payable and accrued expenses | 1,725.80 | 1,688.40 |
Other current liabilities | 276.6 | 119.5 |
Total current liabilities | 2,002.40 | 1,807.90 |
Non-current liabilities | ' | ' |
Long term borrowings | 850 | 0 |
Deferred tax liability | 1,378.20 | 560.6 |
Other non-current liabilities | 771.6 | 588.5 |
Total liabilities | 5,002.20 | 2,957 |
Commitments and contingencies | ' | ' |
Equity: | ' | ' |
Common stock of 5p par value; 1,000 million shares authorized; and 598.6 million shares issued and outstanding (2013: 1,000 million shares authorized; and 597.5 million shares issued and outstanding) | 58.7 | 58.6 |
Additional paid-in capital | 4,302 | 4,186.30 |
Treasury stock: 10.8 million shares (2013: 13.4 million shares) | -350.8 | -450.6 |
Accumulated other comprehensive income | 30.8 | 110.2 |
Retained earnings | 2,497.60 | 1,461.50 |
Total equity | 6,538.30 | 5,366 |
Total liabilities and equity | $11,540.50 | $8,323 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (GBP £) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, except Per Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ' | ' |
Common Stock, Par Value (in USD per share) | £ 0.05 | £ 0.05 |
Common Stock, Shares Authorized | 1,000 | 1,000 |
Common Stock, Shares, Issued | 598.6 | 597.5 |
Common Stock, Shares, Outstanding | 598.6 | 597.5 |
Treasury Stock, Shares | 10.8 | 13.4 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Millions, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||||
Revenues: | ' | ' | ' | ' | ||||
Product sales | $1,552 | $1,171 | $4,329.70 | $3,477.10 | ||||
Royalties | 39.9 | 37.6 | 101.4 | 112.4 | ||||
Other revenues | 5.2 | 4.1 | 14.9 | 18.8 | ||||
Total revenues | 1,597.10 | 1,212.70 | 4,446 | 3,608.30 | ||||
Costs and expenses: | ' | ' | ' | ' | ||||
Cost of product sales | 254.3 | 180.5 | 760.8 | 492.2 | ||||
Research and development | 228.6 | [1] | 226.2 | [1] | 826 | [1] | 703.3 | [1] |
Selling, general and administrative | 522.9 | [1] | 396.3 | [1] | 1,449.40 | [1] | 1,198 | [1] |
Goodwill impairment charge | 0 | 0 | 0 | 7.1 | ||||
Gain on sale of product rights | -46 | -3.6 | -86.2 | -14.6 | ||||
Reorganization costs | 28.2 | 12 | 123.4 | 47.2 | ||||
Integration and acquisition costs | 37.1 | 18.4 | 155.8 | 39.9 | ||||
Total operating expenses | 1,025.10 | 829.8 | 3,229.20 | 2,473.10 | ||||
Operating income from continuing operations | 572 | 382.9 | 1,216.80 | 1,135.20 | ||||
Interest income | 3.6 | 0.4 | 22.8 | 1.6 | ||||
Interest expense | -6.8 | -9.2 | -25.7 | -27.5 | ||||
Other income/(expense), net | 6.8 | 0.7 | 14.8 | -1.6 | ||||
Total other income/(expense), net | 3.6 | -8.1 | 11.9 | -27.5 | ||||
Income from continuing operations before income taxes and equity in earnings/(losses) of equity method investees | 575.6 | 374.8 | 1,228.70 | 1,107.70 | ||||
Income taxes | -61.2 | -73.4 | 64.7 | -235.3 | ||||
Equity in earnings/(losses) of equity method investees, net of taxes | 1.4 | -0.3 | 3.8 | 0.6 | ||||
Income from continuing operations, net of taxes | 515.8 | 301.1 | 1,297.20 | 873 | ||||
Loss from discontinued operations, net of taxes | -36.1 | -22.9 | -64 | -271.9 | ||||
Net income | $479.70 | $278.20 | $1,233.20 | $601.10 | ||||
Earnings from continuing operations (in USD per share) | $0.88 | $0.55 | $2.21 | $1.59 | ||||
Loss from discontinued operations (in USD per share) | ($0.06) | ($0.04) | ($0.11) | ($0.50) | ||||
Earnings per ordinary share - basic (in USD per share) | $0.82 | $0.51 | $2.10 | $1.09 | ||||
Earnings from continuing operations (in USD per share) | $0.87 | $0.53 | $2.19 | $1.52 | ||||
Loss from discontinued operations (in USD per share) | ($0.06) | ($0.04) | ($0.11) | ($0.46) | ||||
Earnings per ordinary share - diluted (in USD per share) | $0.81 | $0.49 | $2.08 | $1.06 | ||||
Weighted average number of shares: | ' | ' | ' | ' | ||||
Basic (in shares) | 587.6 | [2] | 548.4 | [2] | 586.1 | [2] | 549.8 | [2] |
Diluted (in shares) | 592.6 | 585.7 | 592.1 | 587.5 | ||||
[1] | Research and development (bR&Db) includes intangible asset impairment charges of $nil for the three months to September 30, 2014 (2013: $nil) and $188.0 million for the nine months to September 30, 2014 (2013: $19.9 million). Selling, general and administrative (bSG&Ab) costs include amortization of intangible assets relating to intellectual property rights acquired of $62.9 million for the three months to September 30, 2014 (2013: $34.5 million) and $181.9 million for the nine months to September 30, 2014 (2013: $106.5 million). | |||||||
[2] | Excludes shares purchased by the EBT and presented by Shire as treasury stock |
Consolidated_Statements_of_Inc1
Consolidated Statements of Income (Parenthetical) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Intangible Assets (Excluding Goodwill) [Line Items] | ' | ' | ' | ' |
Impairment of unamortized intangible assets | $0 | $0 | $188 | $19.90 |
Impairment charges | ' | ' | 188 | 19.9 |
Acquired Intellectual Property Rights | ' | ' | ' | ' |
Intangible Assets (Excluding Goodwill) [Line Items] | ' | ' | ' | ' |
Amortization of intangible assets | $62.90 | $34.50 | $181.90 | $106.50 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | 9 Months Ended | |||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
Statement of Income and Comprehensive Income [Abstract] | ' | ' | ' | ' | ' |
Net income | $479.70 | $278.20 | $1,233.20 | $601.10 | ' |
Other comprehensive income: | ' | ' | ' | ' | ' |
Foreign currency translation adjustments | -86.1 | 48.9 | -75.9 | 14.4 | ' |
Unrealized holding (loss) / gain on available-for-sale securities (net of taxes of $3.4 million, $0.1 million, $1.3 million and $1.2 million) | -7.2 | 0.2 | -3.5 | 0 | ' |
Comprehensive income | 386.4 | 327.3 | 1,153.80 | 615.5 | ' |
Components of accumulated other comprehensive income | ' | ' | ' | ' | ' |
Foreign currency translation adjustments | 34.5 | ' | 34.5 | ' | 110.4 |
Unrealized holding loss on available-for-sale securities, net of taxes | -3.7 | ' | -3.7 | ' | -0.2 |
Accumulated other comprehensive income | $30.80 | ' | $30.80 | ' | $110.20 |
Consolidated_Statements_of_Com1
Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Statement of Income and Comprehensive Income [Abstract] | ' | ' | ' | ' |
Unrealized holding (loss) / gain on available-for-sale securities, tax | $3.40 | $0.10 | $1.30 | $1.20 |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Equity (USD $) | Total | Common stock | Additional paid-in capital | Treasury stock | Accumulated other comprehensive income | Retained earnings | |
In Millions | |||||||
As at Dec. 31, 2013 | $5,366 | $58.60 | $4,186.30 | ($450.60) | $110.20 | $1,461.50 | |
Shares as at Dec. 31, 2013 | 597.5 | 597.5 | ' | ' | ' | ' | |
Net income | 1,233.20 | ' | ' | ' | ' | 1,233.20 | |
Other comprehensive income, net of tax | -79.4 | ' | ' | ' | -79.4 | ' | |
Options exercised | 0.1 | 0.1 | ' | ' | ' | ' | |
Option exercised (in shares) | ' | 1.1 | ' | ' | ' | ' | |
Share-based compensation | 78.3 | ' | 78.3 | ' | ' | ' | |
Tax benefit associated with exercise of stock options (in US dollar) | 37.4 | ' | 37.4 | ' | ' | ' | |
Shares released by Employee Benefit Trust ("EBT") to satisfy exercise of stock options | 2.3 | ' | ' | 99.8 | ' | -97.5 | |
Dividends | [1] | -99.6 | ' | ' | ' | ' | -99.6 |
As at Sep. 30, 2014 | $6,538.30 | $58.70 | $4,302 | ($350.80) | $30.80 | $2,497.60 | |
Shares as at Sep. 30, 2014 | 598.6 | 598.6 | ' | ' | ' | ' | |
[1] | Dividends per share During the nine months to September 30, 2014 Shire plc declared and paid dividends of 16.93 US cents per ordinary share (equivalent to 50.79 US cents per ADS) totalling $99.6 million. |
Consolidated_Statements_of_Cha1
Consolidated Statements of Changes in Equity (Parenthetical) (USD $) | 9 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Sep. 30, 2014 | |
Dividends paid (in USD) | $99.60 | [1] |
Ordinary Shares | ' | |
Dividends per share declared | $0.17 | |
Dividends per share paid | $0.17 | |
ADS | ' | |
Dividends per share declared | $0.51 | |
Dividends per share paid | $0.51 | |
[1] | Dividends per share During the nine months to September 30, 2014 Shire plc declared and paid dividends of 16.93 US cents per ordinary share (equivalent to 50.79 US cents per ADS) totalling $99.6 million. |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net income | $1,233.20 | $601.10 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 307.1 | 229.4 |
Share based compensation | 78.3 | 55.2 |
Change in fair value of contingent consideration | 26.3 | 28.4 |
Impairment of intangible assets | 188 | 19.9 |
Goodwill impairment charge | 0 | 7.1 |
Write down of assets | 14 | 8.3 |
Gain on sale of product rights | -86.2 | -14.6 |
Unwind of Viropharma inventory fair value step-up | 90.6 | 0 |
Other, net | 16.5 | -3.9 |
Movement in deferred taxes | 63.1 | 16.1 |
Equity in earnings of equity method investees | -3.8 | -0.6 |
Changes in operating assets and liabilities: | ' | ' |
Increase in accounts receivable | -92.1 | -215.2 |
Increase in sales deduction accruals | 28.2 | 108.7 |
Increase in inventory | -15.8 | -39.9 |
Increase in prepayments and other assets | -114.7 | -70.9 |
Decrease in accounts and notes payable and other liabilities | -92.8 | -71.4 |
Returns on investment from joint venture | 0 | 3.2 |
Net cash provided by operating activities | 1,673.50 | 852.7 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Movements in restricted cash | -32.3 | 0.5 |
Purchases of subsidiary undertakings and businesses, net of cash acquired | -4,104.40 | -227.8 |
Purchases of non-current investments | -22.8 | -9.9 |
Purchases of property, plant and equipment ("PP&E") | -49.8 | -110.3 |
Proceeds from short-term investments | 57.8 | 0 |
Proceeds from disposal of non-current investments | 21.3 | 8.6 |
Proceeds received on sale of product rights | 122.7 | 15 |
Other, net | 1.3 | 2.9 |
Net cash used in investing activities | -4,006.20 | -321 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Proceeds from revolving line of credit, long-term and short-term borrowings | 2,310.80 | 0 |
Repayment of revolving line of credit | -1,461.80 | 0 |
Repayment of debt acquired through business combinations | -551.5 | 0 |
Proceeds from ViroPharma call options | 346.7 | 0 |
Payment of dividend | -99.6 | -79.2 |
Excess tax benefit associated with exercise of stock options | 37.4 | 9.5 |
Contingent consideration payments | -12.8 | -11.3 |
Payments to acquire shares (in USD) | 0 | -240.8 |
Other, net | -2 | -5.5 |
Net cash provided by/(used in) financing activities | 567.2 | -327.3 |
Effect of foreign exchange rate changes on cash and cash equivalents | -6.2 | -0.5 |
Net (decrease)/increase in cash and cash equivalents | -1,771.70 | 203.9 |
Cash and cash equivalents at beginning of period | 2,239.40 | 1,482.20 |
Cash and cash equivalents at end of period | 467.7 | 1,686.10 |
Supplemental information associated with continuing operations: | ' | ' |
Net Interest received/(paid) | 8 | -17.6 |
Net Income taxes received/(paid) | 76.3 | -244.7 |
Continung operations | ' | ' |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Goodwill impairment charge | ' | 7.1 |
Gain on sale of product rights | -86.2 | ' |
Discontinued operations | ' | ' |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Goodwill impairment charge | ' | 191.8 |
Gain on sale of product rights | 33.6 | ' |
Goowill impairment charge total | ' | ' |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Goodwill impairment charge | ' | 198.9 |
Total | ' | ' |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Gain on sale of product rights | -52.6 | ' |
EBT | ' | ' |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Payments to acquire shares (in USD) | 0 | -50.3 |
Share Buy-back Program | ' | ' |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Payments to acquire shares (in USD) | $0 | ($190.50) |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Summary of Significant Accounting Policies | ' |
1. Summary of Significant Accounting Policies | |
(a) Basis of preparation | |
These interim financial statements of Shire plc and its subsidiaries (collectively “Shire” or the “Company”) and other financial information included in this Form 10-Q, are unaudited. They have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and US Securities and Exchange Commission (“SEC”) regulations for interim reporting. | |
The balance sheet as at December 31, 2013 was derived from audited financial statements but does not include all disclosures required by US GAAP. | |
These interim financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company's Annual Report on Form 10-K for the year to December 31, 2013. | |
Certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted from these interim financial statements. However, these interim financial statements include all adjustments, which are, in the opinion of management, necessary to fairly state the results of the interim period and the Company believes that the disclosures are adequate to make the information presented not misleading. Interim results are not necessarily indicative of results to be expected for the full year. | |
(b) Use of estimates in interim financial statements | |
The preparation of interim financial statements, in conformity with US GAAP and SEC regulations, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are primarily made in relation to the valuation of intangible assets, sales deductions, income taxes (including provisions for uncertain tax positions and the realization of deferred tax assets), provisions for litigation and legal proceedings, contingent consideration receivable from product divestments and contingent consideration payable in respect of business combinations and asset purchases. If actual results differ from the Company's estimates, or to the extent these estimates are adjusted in future periods, the Company's results of operations could either benefit from, or be adversely affected by, any such change in estimate. | |
(c) New accounting pronouncements | |
To be adopted in future periods | |
Reporting discontinued operations and disclosures of disposals of components of an entity | |
In April 2014 the Financial Accounting Standard Board (“FASB”) issued guidance on the reporting of discontinued operations and disclosures of disposals of components of an entity. The amendments in this update revise the definition of discontinued operations by limiting discontinued operations reporting to disposals of components of an entity that represent strategic shifts that have (or will have) a major effect on an entity's operations and financial results. The guidance requires expanded disclosures for discontinued operations which provide users of financial statements with more information about the assets, liabilities, revenues, and expenses of discontinued operations. The guidance also requires an entity to disclose the pre-tax profit or loss of an individually significant component of an entity that does not qualify for discontinued operations reporting. | |
The guidance will be effective for disposals (or classifications as held for sale) of components of an entity that occur within annual periods beginning on or after December 15, 2014, and interim periods within annual periods beginning on or after December 15, 2015. Early adoption is permitted, but only for disposals (or classifications as held for sale) that have not been reported in financial statements previously issued or available for issuance. The Company does not expect the adoption of this guidance to have a material effect on its consolidated financial position, results of operations and cash flows. | |
Revenue from Contracts with Customers | |
In May 2014 the FASB and the International Accounting Standard Board (together as the “Accounting Standard Boards”) issued a new accounting standard that is intended to clarify and converge the financial reporting requirements for revenue from contracts with customers. The core principle of the standard is that an “entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services”. To achieve that core principle the Accounting Standard Boards developed a five-step model (as presented below) and related application guidance, which will replace most existing revenue recognition guidance in US GAAP. | |
Five-step model: | |
Step 1: Identify the contract(s) with a customer. | |
Step 2: Identify the performance obligations in the contract. | |
Step 3: Determine the transaction price. | |
Step 4: Allocate the transaction price to the performance obligations in the contract. | |
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. | |
The Accounting Standard Boards also issued new qualitative and quantitative disclosure requirements as part of the new accounting standard which aims to enable financial statement users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The guidance is effective for annual periods beginning after December 15, 2016. Early adoption is not permitted. The Company is currently evaluating the impact of adopting this guidance. | |
Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation | |
In June 2014 the FASB issued guidance on the reporting requirements for development stage entities. The amendments in this update simplify the existing guidance by removing all incremental financial reporting requirements for development stage entities. The amendments also eliminate an exception provided to development stage entities in Topic 810, Consolidation, for determining whether an entity is a variable interest entity on the basis of the amount of equity that is at risk. The elimination of the exception may change the consolidation analysis, consolidation decision, and disclosure requirements for a reporting entity that has an interest in an entity in the development stage. The guidance is effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. The guidance to eliminate the exception to the sufficiency-of-equity-at-risk criterion for development stage entities should be applied retrospectively for annual reporting periods beginning after December 15, 2015, and interim periods therein. Early application of each of the amendments is permitted for any annual reporting period or interim period for which the entity's financial statements have not yet been issued. The Company is currently evaluating the impact of adopting this guidance. | |
Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern | |
In August 2014 the FASB issued guidance about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. An entity's management should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). Management's evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued (or available to be issued). Substantial doubt about an entity's ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or available to be issued). The term probable is used consistently with its use in topic 450, Contingencies. The amendments in this update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company does not expect the adoption of this guidance to have a material effect on its consolidated financial position, results of operations and cash flows. | |
Business_Combinations
Business Combinations | 9 Months Ended | ||
Sep. 30, 2014 | |||
Business Combinations [Abstract] | ' | ||
Business Combination Disclosure | ' | ||
2. Business combinations | |||
Acquisition of ViroPharma Incorporated (“ViroPharma”) | |||
On January 24, 2014, Shire completed its acquisition of 100% of the outstanding share capital of ViroPharma. The acquisition-date fair value of cash consideration paid on closing was $3,997 million. | |||
The acquisition of ViroPharma added CINRYZE (C1 esterase inhibitor [human]) to Shire's portfolio of currently marketed products. CINRYZE is a leading brand for the prophylactic treatment of Hereditary Angioedema (“HAE”) in adolescents and adults. | |||
The acquisition of ViroPharma has been accounted for as a purchase business combination using the acquisition method. The assets acquired and the liabilities assumed from ViroPharma have been recorded at their preliminary fair values at the date of acquisition, being January 24, 2014. The Company's consolidated financial statements include the results of ViroPharma from January 24, 2014. | |||
The amount of ViroPharma's post acquisition revenues and pre-tax losses included in the Company's consolidated statement of income for the three months to September 30, 2014 were $154.5 million and $3.7 million, respectively. The pre-tax loss is stated after charges on the unwind of inventory fair value adjustments of $18.1 million, intangible asset amortization of $28.5 million and integration costs of $27.1 million. | |||
The amount of ViroPharma's post acquisition revenues and pre-tax losses included in the Company's consolidated statement of income for the nine months to September 30, 2014 were $388.9 million and $82.9 million, respectively. The pre-tax loss is stated after charges on the unwind of inventory fair value adjustments of $90.6 million, intangible asset amortization of $78.6 million and integration costs of $87.8 million. | |||
The Company's preliminary allocation of the purchase price to the assets acquired and liabilities assumed, including certain immaterial measurement period adjustments recorded in the second and third quarter of 2014, is outlined below: | |||
Preliminary | |||
Fair value | |||
$’M | |||
Identifiable assets acquired and liabilities assumed | |||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | 232.6 | ||
Short term investments | 57.8 | ||
Accounts receivable | 52.2 | ||
Inventories | 203.6 | ||
Deferred tax assets | 100.2 | ||
Purchased call option | 346.7 | ||
Other current assets | 42.9 | ||
_______________ | |||
Total current assets | 1,036.00 | ||
Non-current assets: | |||
Property, plant and equipment | 24.7 | ||
Goodwill | 1,528.80 | ||
Other intangible assets | |||
- Currently marketed products | 2,320.00 | ||
- In-Process Research and Development (“IPR&D”) | 530.0 | ||
Other non-current assets | 10.4 | ||
_______________ | |||
Total assets | 5,449.90 | ||
_______________ | |||
LIABILITIES | |||
Current liabilities: | |||
Accounts payable and other current liabilities | 109.5 | ||
Convertible bond | 551.4 | ||
Non-current liabilities: | |||
Deferred tax liabilities | 695.9 | ||
Other non-current liabilities | 96.1 | ||
_______________ | |||
Total liabilities | 1,452.90 | ||
_______________ | |||
Fair value of identifiable assets acquired and liabilities assumed | 3,997.00 | ||
_______________ | |||
Consideration | |||
Cash consideration paid | 3,997.00 | ||
_______________ | |||
The purchase price allocation is preliminary pending final determination of the fair values of certain assets and liabilities. The final determination of these fair values will be completed as soon as possible but no later than one year from the acquisition date. | |||
(a) Other intangible assets – currently marketed products | |||
Other intangible assets totaling $2,320.0 million relate to intellectual property rights acquired for ViroPharma's currently marketed products, primarily attributed to CINRYZE, for the routine prophylaxis against HAE attacks in adolescent and adult patients. Shire also obtained intellectual property rights to three other commercialized products, PLENADREN, an orphan drug for the treatment of adrenal insufficiency in adults, BUCCOLAM, an oromucosal solution for the treatment of prolonged, acute, and convulsive seizures in infants, toddlers, children and adolescents and VANCOCIN, an oral capsule formulation for the treatment of C. difficile-associated diarrhea (“CDAD”), which was divested by Shire in the third quarter of 2014 (see Note 3 for details). The preliminary fair value of currently marketed products has been estimated using an income approach, based on the present value of incremental after tax cash flows attributable to each separately identifiable intangible asset. | |||
The estimated useful lives of the CINRYZE, PLENADREN and BUCCOLAM intangible assets range from 10 to 23 years (weighted average 22 years), with amortization being recorded on a straight line basis. | |||
(b) Other intangible assets – IPR&D | |||
IPR&D relates to development projects acquired with ViroPharma, that have been initiated and have achieved material progress and whose fair value is estimable with reasonable certainty but (i) have not yet reached technological feasibility or have not yet received the relevant regulatory approval and (ii) have no alternative future use. | |||
IPR&D, totaling $530.0 million, principally relates to Maribavir (now SHP620), an investigational antiviral product for cytomegalovirus and VP20621, a non-toxigenic strain of C.difficile for the treatment and prevention of CDAD. The preliminary fair value of these IPR&D assets has been estimated based on an income approach, using the present value of incremental after tax cash flows expected to be generated by these development projects after the deduction of contributory asset charges for other assets employed in these projects. The estimated cash flows have been probability adjusted to take into account their stage of completion and the remaining risks and uncertainties surrounding their future development and commercialization. | |||
The major risks and uncertainties associated with the timely completion of the acquired IPR&D projects include the ability to confirm the efficacy of the technology based on the data from clinical trials, and obtaining the relevant regulatory approvals as well as other risks as described in the Company's annual report on Form 10-K. The valuation of IPR&D has been based on information available at the time of the acquisition and on expectations and assumptions that (i) have been deemed reasonable by the Company's management and (ii) are based on information, expectations and assumptions that would be available to a market participant. However, no assurance can be given that the assumptions and events associated with such assets will occur as projected. For these reasons, the actual cash flows may vary from forecast future cash flows. | |||
The estimated probability adjusted after tax cash flows used in fair valuing other intangible assets have been discounted at rates ranging from 9.5% to 10.0%. | |||
(c) Goodwill | |||
Goodwill arising of $1,528.8 million, which is not deductible for tax purposes, includes the expected operational synergies that will result from combining the operations of ViroPharma with the operations of Shire; other synergies expected to be realized due to Shire's structure; intangible assets that do not qualify for separate recognition at the time of the acquisition; and the value of the assembled workforce. | |||
In the three months and nine months to September 30, 2014 the Company expensed costs of $27.1 million (2013: $nil) and $122.1 million (2013: $nil) relating to the acquisition and post-acquisition integration of ViroPharma, which have been recorded within Integration and acquisition costs in the Company's consolidated statement of income. | |||
Supplemental disclosure of pro forma information | |||
The following unaudited pro forma financial information presents the combined results of the operations of Shire and ViroPharma as if the acquisition of ViroPharma had occurred as at January 1, 2013. The unaudited pro forma financial information is not necessarily indicative of what the consolidated results of operations actually would have been had the acquisition been completed at the date indicated. In addition, the unaudited pro forma financial information does not purport to project the future results of operations of the combined Company. | |||
9 months to | 9 months to | ||
September 30, | September 30, | ||
2014 | 2013 | ||
$’M | $’M | ||
_______________ | _______________ | ||
Revenues | 4,477.80 | 3,932.20 | |
Net income from continuing operations | 1,297.00 | 642.2 | |
_______________ | _______________ | ||
Per share amounts: | |||
Net income from continuing operations per share - basic | 221.4c | 116.8c | |
Net income from continuing operations per share - diluted | 218.6c | 109.3c | |
_______________ | _______________ | ||
The unaudited pro forma financial information above reflects the following pro forma adjustments: | |||
an adjustment to decrease net income by $33.8 million for the period to September 30, 2013 to reflect acquisition costs incurred by Shire, and increase net income by $23.2 million for the period to September 30, 2014 to eliminate acquisition costs incurred; | |||
an adjustment to decrease net income by $57.8 million for the period to September 30, 2013,to reflect charges on the unwind of inventory fair value adjustments as acquisition date inventory is sold, and a corresponding increase in net income for the period to September 30, 2014; | |||
an adjustment of $36.1 million in the period to September 30, 2013 to reflect additional interest expense associated with the drawdown of debt to partially finance the acquisition of ViroPharma and the amortization of related deferred debt issuance costs; | |||
an adjustment to increase amortization expense by approximately $7.3 million in the period to September 30, 2014 and $58.4 million in the period to September 30, 2013, related to amortization of the fair value of identifiable intangible assets acquired and the elimination of ViroPharma's historical intangible asset amortization expense; | |||
an adjustment to reflect the additional depreciation expense ($0.1 million and $0.4 million in the period to September 30, 2014 and September 30, 2013 respectively) related to the fair value adjustment to property, plant and equipment acquired; | |||
adjustments to reflect the tax effects of the above adjustments, where applicable. | |||
Acquisition of Lumena Pharmaceuticals, Inc. (“Lumena”) | |||
On June 11, 2014 Shire completed the acquisition of 100% of the outstanding share capital of Lumena. The acquisition date fair value of the consideration totaled $464.3 million, comprising cash consideration paid on closing of $300.3 million and the fair value of contingent consideration payable of $164 million. The maximum amount of contingent cash consideration which may be payable by Shire in future periods is $265 million dependent upon achievement of certain clinical development milestones. | |||
This acquisition brings two novel, orally active therapeutic compounds SHP625 (formerly LUM001), in Phase 2 clinical development and SHP626 (formerly LUM002), ready to enter Phase 2 clinical development later in 2014. Both compounds are inhibitors of the apical sodium-dependent bile acid transport (“ASBT”), which is primarily responsible for recycling bile acids from the intestine to the liver. SHP625 is being investigated for the potential relief of the extreme itching associated with cholestatic liver disease. SHP626 is in development for the treatment of nonalcoholic steatohepatitis. | |||
The acquisition of Lumena has been accounted for as a business combination using the acquisition method. The assets and liabilities assumed from Lumena have been recorded at their preliminary fair values at the date of acquisition, being June 11, 2014. The Company's consolidated financial statements and results of operations include the results of Lumena from June 11, 2014. | |||
The purchase price allocation is preliminary pending the determination of the fair values of certain assets and liabilities assumed. The purchase price has been allocated on a preliminary basis to acquired IPR&D ($467 million), net current assets assumed ($47.6 million, including cash of $46.3 million), net non-current liabilities assumed (including deferred tax liabilities) ($174.2 million) and goodwill ($123.9 million). The final determination of these fair values will be completed as soon as possible but no later than one year from the acquisition date. Goodwill arising of $123.9 million is not deductible for tax purposes. | |||
In the three and nine months to September 30, 2014 the Company has expensed costs of $4.2 million and $5.7 millon (2013: $nil and $nil) relating to the Lumena acquisition, which have been recorded within Integration and acquisition costs in the Company's consolidated income statement. | |||
Unaudited pro forma financial information to present the combined results of operations of Shire and Lumena are not provided as the impact of this acquisition is not material to the Company's results of operations for any period presented. | |||
Acquisition of Fibrotech Therapeutics Pty Ltd. (“Fibrotech”) | |||
On July 4, 2014 Shire completed its acquisition of Fibrotech, an Australian biopharmaceutical company developing a new class of orally available drugs with a novel mechanism of action which has the potential to address both the inflammatory and fibrotic components of disease processes. The acquisition of Fibrotech is expected to strengthen the Company's growing and innovative portfolio targeting renal and fibrotic diseases, and leverage existing renal capabilities. | |||
The acquisition date fair value of the consideration totaled $122.6 million, comprising cash consideration paid on closing of $75.6 million and the fair value of contingent consideration payable of $47 million. The maximum amount of contingent cash consideration which may be payable by Shire in future periods is $482.5 million dependent upon achievement of certain clinical development, regulatory and commercial milestones. | |||
The acquisition of Fibrotech has been accounted for as a business combination using the acquisition method. The assets and liabilities assumed from Fibrotech have been recorded at their preliminary fair values at the date of acquisition being July 4, 2014. The Company's consolidated financial statements and results of operations include the results of Fibrotech from July 4, 2014. | |||
The purchase price allocation is preliminary pending the determination of the fair values of certain assets and liabilities assumed. The purchase price has been allocated on a preliminary basis to acquired IPR&D ($11 million), net current assets ($1.4 million) and goodwill ($110.2 million). The final determination of these fair values will be completed as soon as possible but no later than one year from the acquisition date. Goodwill generated from the acquisition was primarily attributed to acquired scientific knowledge in fibrotic diseases and the potential to optimize the novel mechanism of action to other fibrotic conditions. | |||
In the three and nine months to September 30, 2014 the Company has expensed costs of $1.3 million and $2.1 million (2013: $nil) relating to the Fibrotech acquisition, which have been recorded within Integration and acquisition costs in the Company's consolidated income statement. | |||
Unaudited pro forma financial information to present the combined results of operations of Shire and Fibrotech are not provided as the impact of this acquisition is not material to the Company's results of operations for any period presented. | |||
Other Acquisitions | |||
In the third quarter of 2014 Shire acquired BIKAM Pharmaceuticals, Inc. (“BIKAM”), a US-based biopharmaceutical company with pre-clinical compounds that could provide an innovative approach to treating autosomal dominant retinitis pigmentosa (adRP). Shire also acquired certain assets and employees related to the production of BUCCOLAM from its previous contract manufacturer SCM Pharma Limited (“SCM”). The aggregate acquisition date fair value of the consideration for these two acquisitions was $17.9 million, comprising cash paid on closing of $12.1 million and the fair value of contingent consideration payable in respect of BIKAM of $5.8 million. In respect of BIKAM the maximum contingent consideration which may be payable by Shire in future periods is $92 million contingent upon the achievement of certain development, regulatory and commercial milestones. | |||
In connection with these two acquisitions, Shire has preliminarily recorded $1 million in current assets, $4.8 million in non-current assets and $12.1 million in goodwill. | |||
Unaudited pro forma financial information to present the combined results of operations of Shire, BIKAM and SCM are not provided as the impact of these acquisitions is not material to the Company's results of operations for any period presented. |
Divestment_of_Product_Rights
Divestment of Product Rights | 9 Months Ended |
Sep. 30, 2014 | |
Gains (Losses) on Sales of Assets [Abstract] | ' |
Divestment of product rights | ' |
3. Divestment of product rights | |
On January 1, 2014 the Company transferred the marketing authorizations for the CALCICHEW range of products in the UK and Ireland to Takeda Pharmaceutical Company Limited. In addition, in the first quarter of 2014 Shire received cash consideration of $43.5 million from the sale of certain CALCICHEW trade marks to Takeda Nycomed AS (“Takeda”), resulting in a gain (net of taxes) of $43.5 million being recorded in the consolidated statement of income. | |
In the third quarter of 2014 the Company completed the divestment of its rights to VANCOCIN, ESTRACE and EXPUTEX. The Company received aggregate cash consideration of $64.9 million on the disposal of these non-core products, resulting in a gain (net of taxes) of $32.9 million being recorded in the consolidated statement of income. | |
In the three and nine months to September 30, 2014 the Company recorded total gains on the sale of product rights of $46.0 million (2013: $3.6 million) and $86.2 million (2013: $14.6 million), respectively, related to the sale of CALCICHEW trademarks to Takeda, the re-measurement of contingent consideration receivable from the divestment of DAYTRANA and the sale of non-core products. |
Reorganization_Costs
Reorganization Costs | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Restructuring and Related Activities [Abstract] | ' | ||||
Reorganization Costs Disclosure | ' | ||||
4. Reorganization costs | |||||
One Shire business reorganization | |||||
On May 2, 2013, the Company initiated the reorganization of its business to integrate the three divisions into a simplified One Shire organization in order to drive future growth and innovation. | |||||
As part of the One Shire reorganization, the Company undertook a review of all of its pipeline programs and identified those projects that fit with the Company's new strategic direction and have an acceptable likelihood of success. Shire's pre-clinical investments are now primarily focused on Rare Diseases, meaning that the majority of other pre-clinical projects have been discontinued. Several clinical programs have also been discontinued. The impact of the prioritization and rationalization of the Company's development portfolio means many of the R&D programs previously run from Basingstoke, UK have ceased. Taken together with the overall streamlining of the R&D organization, this has resulted in a significant number of R&D roles in Basingstoke being eliminated and some positions being re-located. A small number of functional roles that support R&D in Basingstoke have also been affected. | |||||
In addition the Company has also relocated its international commercial hub from Nyon, Switzerland to Zug, Switzerland. All Nyon-based employees have been impacted by the move to Zug. Shire is now in the new Zug office and is providing employees with a reasonable period of time to manage their relocations. | |||||
In the three and nine months to September 30, 2014 the Company incurred reorganization costs totaling $28.2 million and $123.4 million respectively, relating to employee involuntary termination benefits and other reorganization costs. Reorganization costs of $188.0 million have been incurred since May 2013. The One Shire reorganization is expected to be substantially completed by the end of 2014. Currently, the Company estimates that further costs in respect of the One Shire reorganization of approximately $27 million will be expensed as incurred during 2014. | |||||
The liability for reorganization costs arising from the One Shire business reorganization at September 30, 2014 is as follows: | |||||
Opening liability | Amount | Closing liability at | |||
at January 1, | charged to re- | September 30, | |||
2014 | organization | Paid/Utilized | 2014 | ||
$'M | $'M | $'M | $'M | ||
___________ | ____________ | ___________ | ___________ | ||
Involuntary termination benefits | 15.3 | 104.1 | -116.5 | 2.9 | |
Other reorganization costs | 9.5 | 19.3 | -28.3 | 0.5 | |
___________ | ___________ | ___________ | ___________ | ||
24.8 | 123.4 | -144.8 | 3.4 | ||
___________ | ___________ | ___________ | ___________ | ||
At September 30, 2014 the closing reorganization cost liability was recorded within accounts payable and accrued expenses ($3.4 million). |
Integration_and_acquisition_co
Integration and acquisition costs | 9 Months Ended |
Sep. 30, 2014 | |
IntegrationAndAcquisitionCosts[Abstract] | ' |
Integration and acquisition costs | ' |
5. Integration and acquisition costs | |
For the three months to September 30, 2014 Shire recorded integration and acquisition costs of $37.1 million (2013: $18.4 million), which included a net charge of $4.9 million relating to changes in the fair values of contingent consideration liabilities. Integration and acquisition costs also included costs of $32.2 million primarily related to the acquisition and integration of ViroPharma in the three months to September 30, 2014. | |
For the nine months to September 30, 2014 Shire recorded integration and acquisition costs of $155.8 million (2013: $39.9 million), comprising costs of $129.5 million primarily related to the acquisition and integration of ViroPharma and a net charge of $26.3 million relating to the change in fair values of contingent consideration liabilities. The change in fair value of contingent consideration liabilities in the nine months to September 30, 2014 principally relates to the acquisition of SARcode BioSciences Inc. (“SARcode”), reflecting Shire's increased confidence in the lifitegrast program and the acquisition of FerroKin BioSciences, Inc. (“FerroKin”), reflecting the decision to place the ongoing Phase 2 clinical trial for SHP602 on clinical hold. | |
In the three and nine months to September 30, 2013 integration and acquisition costs primarily related to the acquisitions of SARcode and Lotus Tissue Repair Inc. (“Lotus Tissue Repair”) in addition to net charges related to the change in fair values of contingent consideration liabilities. |
Accounts_Receivable_Net
Accounts Receivable, Net | 9 Months Ended | ||
Sep. 30, 2014 | |||
Receivables [Abstract] | ' | ||
Accounts Receivable Disclosure | ' | ||
6. Accounts receivable, net | |||
Accounts receivable at September 30, 2014 of $1,079.3 million (December 31, 2013: $961.2 million), are stated net of a provision for discounts and doubtful accounts of $46.2 million (December 31, 2013: $47.9 million). | |||
Provision for discounts and doubtful accounts: | |||
2014 | 2013 | ||
$’M | $’M | ||
_____________ | _____________ | ||
As at January 1, | 47.9 | 41.7 | |
Provision charged to operations | 228.1 | 225.3 | |
Provision utilization | -229.8 | -215.4 | |
_____________ | _____________ | ||
As at September 30, | 46.2 | 51.6 | |
_____________ | _____________ | ||
At September 30, 2014 accounts receivable included $36.0 million (December 31, 2013: $37.8 million) related to royalty income |
Inventories
Inventories | 9 Months Ended | ||
Sep. 30, 2014 | |||
Inventory Disclosure [Abstract] | ' | ||
Inventory Disclosure | ' | ||
7. Inventories | |||
Inventories are stated at the lower of cost or market and comprise: | |||
September 30, | December 31, | ||
2014 | 2013 | ||
$’M | $’M | ||
____________ | ____________ | ||
Finished goods | 145 | 156.6 | |
Work-in-progress | 288.3 | 240.5 | |
Raw materials | 115.6 | 58.2 | |
____________ | ____________ | ||
548.9 | 455.3 | ||
____________ | ____________ |
Results_of_discontinued_operat
Results of discontinued operations | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
DiscontinuedOperationsAndDisposalGroupsAbstract | ' | ||||
Results of discontinued operations Disclosure | ' | ||||
8. Results of discontinued operations | |||||
Following the divestment of the Company's DERMAGRAFT business in January 2014, the Company recorded charges of $36.1 million and $64.0 million in the three and nine months to September 30, 2014 respectively, primarily relating to costs associated with the divestment including the loss on re-measuring to the fair value of the contingent consideration receivable from Organogenesis. These costs have been presented within discontinued operations in the consolidated income statement. | |||||
The operating results associated with the DERMAGRAFT business have been classified as discontinued operations in the consolidated statements of income for all periods presented. The components of discontinued operations which relate to the DERMAGRAFT business are as follows: | |||||
3 months to | 3 months to | 9 months to | 9 months to | ||
September 30, | September 30, | September 30, | September 30, | ||
2014 | 2013 | 2014 | 2013 | ||
$’M | $’M | $’M | $’M | ||
Revenues: | _______________ | _______________ | _______________ | _______________ | |
Product revenues | - | 23.9 | 1.9 | 64.7 | |
_______________ | _______________ | _______________ | _______________ | ||
Loss from discontinued operations before income taxes | -37.9 | -42 | -81.8 | -323.3 | |
Income taxes | 1.8 | 19.1 | 17.8 | 51.4 | |
_______________ | _______________ | _______________ | _______________ | ||
Loss from discontinued operations, net of taxes | -36.1 | -22.9 | -64 | -271.9 | |
_______________ | _______________ | _______________ | _______________ | ||
The loss from discontinued operations in the three and nine months to September 30, 2014 includes a charge of $33.6 million as a result of re-measuring to fair value the contingent consideration receivable from Organogenesis. | |||||
The loss from discontinued operations before income taxes in the nine months to September 30, 2013 includes a charge of $191.8 million, being the proportion of the former Regenerative Medicine (“RM”) reporting unit goodwill impairment charge that related to the DERMAGRAFT business. |
Prepaid_Expenses_and_Other_Cur
Prepaid Expenses and Other Current Assets | 9 Months Ended | ||
Sep. 30, 2014 | |||
Prepaid Expense and Other Assets, Current [Abstract] | ' | ||
Prepaid Expense and Other Assets, Current | ' | ||
9. Prepaid expenses and other current assets | |||
September 30, | December 31, | ||
2014 | 2013 | ||
$’M | $’M | ||
______________ | ____________ | ||
Prepaid expenses | 53.2 | 29.4 | |
Income tax receivable | 264.6 | 177.4 | |
Value added taxes receivable | 24.1 | 14.5 | |
Other current assets | 60.5 | 41.7 | |
______________ | ______________ | ||
402.4 | 263 | ||
______________ | ______________ |
Goodwill
Goodwill | 9 Months Ended | ||
Sep. 30, 2014 | |||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||
Goodwill Disclosure | ' | ||
10. Goodwill | |||
September 30, | December 31, | ||
2014 | 2013 | ||
$’M | $’M | ||
____________ | ____________ | ||
Goodwill arising on businesses acquired | 2,373.70 | 624.6 | |
____________ | ____________ | ||
In the nine months to September 30, 2014 the Company completed the acquisitions of ViroPharma, Lumena, Fibrotech, BIKAM and assets and employees relating to the manufacture of BUCCOLAM which resulted in aggregate goodwill with a preliminary value of $1,773.8 million (see Note 2 for details). | |||
2014 | 2013 | ||
$’M | $’M | ||
____________ | ____________ | ||
As at January 1, | 624.6 | 644.5 | |
Acquisitions | 1,773.80 | 170.3 | |
Goodwill impairment charge related to continuing operations | - | -7.1 | |
Goodwill impairment charge related to DERMAGRAFT business recorded to discontinued operations | - | -191.8 | |
Foreign currency translation | -24.7 | 5.4 | |
____________ | ____________ | ||
As at September 30, | 2,373.70 | 621.3 | |
____________ | ____________ | ||
In the nine months to September 30, 2013 the Company recorded an impairment charge of $198.9 million related to the goodwill allocated to the former RM reporting unit. Following the divestment of the DERMAGRAFT business, $191.8 million of the impairment charge was reclassified to discontinued operations, being the portion of the former RM reporting unit goodwill impairment charge that related to the DERMAGRAFT business. |
Other_Intangible_Assets_Net
Other Intangible Assets, Net | 9 Months Ended | |||
Sep. 30, 2014 | ||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ' | |||
Other Intangible Assets Disclosure | ' | |||
11. Other intangible assets, net | ||||
September 30, | December 31, | |||
2014 | 2013 | |||
$’M | $’M | |||
________________ | ________________ | |||
Amortized intangible assets | ||||
Intellectual property rights acquired for currently marketed products | 4,850.60 | 2,573.30 | ||
Other intangible assets | 30 | 46.1 | ||
________________ | ________________ | |||
4,880.60 | 2,619.40 | |||
Unamortized intangible assets | ||||
Intellectual property rights acquired for IPR&D | 1,768.90 | 951.5 | ||
________________ | ________________ | |||
6,649.50 | 3,570.90 | |||
Less: Accumulated amortization | -1,422.10 | -1,258.30 | ||
________________ | ________________ | |||
5,227.40 | 2,312.60 | |||
________________ | ________________ | |||
The change in the net book value of other intangible assets for the nine months to September 30, 2014 and 2013 is shown in the table below: | ||||
Other intangible assets | ||||
2014 | 2013 | |||
$’M | $’M | |||
________________ | ________________ | |||
As at January 1, | 2,312.60 | 2,388.10 | ||
Acquisitions | 3,332.80 | 733.2 | ||
Divestment of non-core products (refer to Note 3) | -17.3 | - | ||
Amortization charged | -181.9 | -106.5 | ||
Amortization charged on DERMAGRAFT product technology, presented within discontinued operations in the consolidated income statement | - | -29.6 | ||
Impairment charges | -188 | -19.9 | ||
Foreign currency translation | -30.8 | 10.7 | ||
________________ | ________________ | |||
As at September 30, | 5,227.40 | 2,976.00 | ||
________________ | ________________ | |||
In the nine months to September 30, 2014 the Company acquired intangible assets totaling $3,332.8 million, primarily relating to the preliminary fair value of intangible assets for currently marketed products of $2,320.0 million and IPR&D assets of $997.0 million which were acquired with ViroPharma and Lumena (see Note 2 for further details). | ||||
The Company reviews its intangible assets for impairment whenever events or circumstances suggest that their carrying value may not be recoverable. In the nine months to September 30, 2014 the Company identified indicators of impairment in respect of its SHP602 (iron chelating agent for the treatment of iron overload secondary to chronic transfusion) and SHP613 (for the treatment of improvement in patency of arteriovenous access in hemodialysis patients) IPR&D assets. | ||||
The indicators of impairment related to SHP602 included the decision in the first quarter of 2014 to place the ongoing Phase 2 clinical trial in pediatric and adult patients on hold while certain nonclinical findings are analyzed and evaluated. The Company therefore reviewed the recoverability of its SHP602 IPR&D asset in the first quarter of 2014 and recorded an impairment charge of $166.0 million within R&D expenses in the consolidated statement of income to record the SHP602 IPR&D asset to its revised fair value. This fair value was based on the revised discounted cash flow forecasts associated with SHP602, which included a reduced probability of commercial launch, and an overall delay in the forecast timing of launch. | ||||
The indicators of impairment related to SHP613 comprised the decision in the second quarter of 2014 to discontinue further development of this asset based on portfolio prioritization as well as unexpected challenges and complexities with the development program. In the second quarter of 2014 the Company recorded an impairment charge of $22.0 million within R&D expenses in the consolidated statement of income to fully write-off the SHP613 IPR&D asset. | ||||
Management estimates that the annual amortization charge in respect of intangible assets held at September 30, 2014 will be approximately $228 million for each of the five years to September 30, 2019. Estimated amortization expense can be affected by various factors including future acquisitions, disposals of product rights, regulatory approval and subsequent amortization of acquired IPR&D projects, foreign exchange movements and the technological advancement and regulatory approval of competitor products. |
Accounts_Payable_and_Accrued_E
Accounts Payable and Accrued Expenses | 9 Months Ended | ||
Sep. 30, 2014 | |||
Accounts Payable and Accrued Liabilities, Current [Abstract] | ' | ||
Accounts Payable and Accrued Expenses Disclosure | ' | ||
12. Accounts payable and accrued expenses | |||
September 30, | December 31, | ||
2014 | 2013 | ||
$’M | $’M | ||
________________ | ________________ | ||
Trade accounts payable and accrued purchases | 236.7 | 202.6 | |
Accrued rebates – Medicaid | 554.7 | 549.1 | |
Accrued rebates – Managed care | 287.8 | 258.1 | |
Sales return reserve | 100.6 | 98.8 | |
Accrued bonuses | 116.8 | 130.9 | |
Accrued employee compensation and benefits payable | 100.2 | 79.4 | |
R&D accruals | 76.3 | 69.6 | |
Provisions for litigation losses and other claims | 8.9 | 71.7 | |
Other accrued expenses | 243.8 | 228.2 | |
________________ | ________________ | ||
1,725.80 | 1,688.40 | ||
________________ | ________________ |
Other_Current_Liabilities
Other Current Liabilities | 9 Months Ended | ||
Sep. 30, 2014 | |||
Other Liabilities, Current [Abstract] | ' | ||
Other Current Liabilities | ' | ||
13. Other current liabilities | |||
September 30, | December 31, | ||
2014 | 2013 | ||
$’M | $’M | ||
_____________ | _____________ | ||
Income taxes payable | 54.3 | 69 | |
Value added taxes | 22.1 | 15.8 | |
Contingent consideration payable | 156.4 | 12.9 | |
Other current liabilities | 43.8 | 21.8 | |
_____________ | _____________ | ||
276.6 | 119.5 | ||
_____________ | _____________ |
Borrowings
Borrowings | 9 Months Ended |
Sep. 30, 2014 | |
DebtDisclosureAbstract | ' |
Borrowings Disclosure | ' |
14. Borrowings | |
Term Loan Agreement | |
In connection with its acquisition of ViroPharma on November 11, 2013 Shire entered into a $2,600 million facilities agreement with, among others, Morgan Stanley Bank International Limited (acting as lead arranger and agent) (the “Facilities Agreement”). The Facilities Agreement was subsequently reduced to $850 million. At September 30, 2014 the Facilities Agreement comprises an $850 million term loan facility which matures on November 11, 2015, which was fully utilized and recorded within long term borrowings. | |
Revolving Credit Facility (“RCF”) | |
On November 23, 2010 the Company entered into a committed multicurrency revolving and swingline facilities agreement with a number of financial institutions, for which Abbey National Treasury Services Plc (trading as Santander Global Banking and Markets), Bank of America Securities Limited, Barclays Capital, Citigroup Global Markets Limited, Lloyds TSB Bank plc and The Royal Bank of Scotland plc acted as mandated lead arrangers and bookrunners. The RCF, which is for an aggregate amount of $1,200 million and includes a $250 million swingline facility, may be used for general corporate purposes and matures on November 23, 2015. During the three months to September 30, 2014 Shire repaid all borrowings drawn under the RCF. As at September 30, 2014 the RCF was undrawn. |
Other_Noncurrent_Liabilities
Other Non-current Liabilities | 9 Months Ended | ||
Sep. 30, 2014 | |||
Other Liabilities, Noncurrent [Abstract] | ' | ||
Other Noncurrent Liabilities Disclosure | ' | ||
15. Other non-current liabilities | |||
September 30, | December 31, | ||
2014 | 2013 | ||
$’M | $’M | ||
____________ | ____________ | ||
Income taxes payable | 180.3 | 115.7 | |
Deferred revenue | 7.7 | 9.8 | |
Deferred rent | 9.6 | 11.3 | |
Contingent consideration payable | 485.6 | 393 | |
Other non-current liabilities | 88.4 | 58.7 | |
____________ | ____________ | ||
771.6 | 588.5 | ||
____________ | ____________ |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended | ||
Sep. 30, 2014 | |||
Commitments and Contingencies Disclosure [Abstract] | ' | ||
Commitments and Contingencies Disclosure | ' | ||
16. Commitments and contingencies | |||
(a) Leases | |||
Future minimum lease payments under operating leases at September 30, 2014 are presented below: | |||
Operating | |||
leases | |||
$’M | |||
_____________ | |||
2014 | 1 | 10.7 | |
2015 | 1 | 43.9 | |
2016 | 1 | 31.4 | |
2017 | 1 | 24 | |
2018 | 1 | 18.7 | |
2019 | 1 | 14.5 | |
Thereafter | 1 | 100.5 | |
111 | _____________ | ||
243.7 | |||
_____________ | |||
The Company leases land, facilities, motor vehicles and certain equipment under operating leases expiring through 2032. Lease and rental expense amounted to $29.3 million and $35.5 million for the nine months to September 30, 2014 and 2013 respectively, which is predominately included in SG&A expenses in the Company's consolidated income statement. | |||
(b) Letters of credit and guarantees | |||
At September 30, 2014 the Company had irrevocable standby letters of credit and guarantees with various banks and insurance companies totaling $50 million, providing security for the Company's performance of various obligations. These obligations are primarily in respect of the recoverability of insurance claims, lease obligations and supply commitments. | |||
(c) Collaborative and other licensing arrangements | |||
Details of significant updates in collaborative and other licensing arrangements are included below: | |||
Out-licensing arrangements | |||
Shire has entered into various collaborative and out-licensing arrangements under which the Company has out-licensed certain product or intellectual property rights for consideration such as up-front payments, development milestones, sales milestones and/or royalty payments. In some of these arrangements Shire and the licensee are both actively involved in the development and commercialization of the licensed product and have exposure to risks and rewards dependent on its commercial success. Under the terms of these collaborative and out-licensing arrangements, the Company may receive development milestone payments up to an aggregate amount of $39.0 million and sales milestones up to an aggregate amount of $71.5 million. The receipt of these substantive milestones is uncertain and contingent on the achievement of certain development milestones or the achievement of a specified level of annual net sales by the licensee. In the nine months to September 30, 2014 Shire received up-front and milestone payments totaling $1.0 million (2013: $3.0 million). In the nine months to September 30, 2014 Shire recognized milestone income of $3.6 million (2013: $4.5 million) in other revenues and $39.8 million (2013: $43.8 million) in product sales for shipment of product to the relevant licensee. | |||
Strategic licensing and collaboration agreement with ArmaGen Technologies Inc. (“ArmaGen”) | |||
On July 23, 2014 Shire and ArmaGen, a US-based privately held biotechnology company, announced a worldwide licensing and collaboration agreement to develop and commercialize AGT-182, an investigational enzyme replacement therapy (“ERT”) for the potential treatment of both the central nervous system (“CNS”) and somatic manifestations in patients with Hunter syndrome (“MPS II”). Under the terms of the agreement, Shire has obtained worldwide commercialization rights for AGT-182 and an equity stake in ArmaGen in exchange for an up-front cash payment of $15 million. Shire will reimburse ArmaGen for research and development work carried out by ArmaGen and pay future milestones up to a maximum of $208 million contingent upon the achievement of certain development, regulatory and commercial milestones. ArmaGen will also be entitled to royalties on future relevant net sales. | |||
Shire and ArmaGen are conducting the collaboration through a joint steering committee. As part of the agreement, ArmaGen is responsible for conducting and completing the Phase 1/2 study which it expects to initiate before the end of 2014, after which point Shire will be responsible for further clinical development, including Phase 3 trials, and commercialization. | |||
(d) Commitments | |||
(i) Clinical testing | |||
At September 30, 2014 the Company had committed to pay approximately $ 457 million (December 31, 2013: $ 346 million) to contract vendors for administering and executing clinical trials. The timing of these payments is dependent upon actual services performed by the organizations as determined by patient enrollment levels and related activities. | |||
(ii) Contract manufacturing | |||
At September 30, 2014 the Company had committed to pay approximately $ 419 million (December 31, 2013: $ 109 million) in respect of contract manufacturing. The Company expects to pay $ 89 million of these commitments in 2014. The increase in contract manufacturing commitments arises principally from commitments with ViroPharma's contract manufacturer of CINRYZE. | |||
(iii) Other purchasing commitments | |||
At September 30, 2014 the Company had committed to pay approximately $ 297 million (December 31, 2013: $ 128 million) for future purchases of goods and services, predominantly relating to active pharmaceutical ingredients sourcing. The Company expects to pay $ 273 million of these commitments in 2014. The increase in other purchasing commitments arises principally from commitments with ViroPharma's suppliers of blood plasma used in the manufacturing of CINRYZE. | |||
(iv) Investment commitments | |||
At September 30, 2014 the Company had outstanding commitments to subscribe for interests in companies and partnerships for amounts totaling $ 19 million (December 31, 2013: $ 14 million) which may all be payable in 2014, depending on the timing of capital calls. The investment commitments include additional funding to certain variable interest entities of which Shire is not the primary beneficiary. These entities control and conduct all related research up to achievement of pre-defined development success criteria at which point Shire will have an option to acquire the entity for pre-defined purchase consideration, including consideration contingent upon achievement of certain development and commercial milestones. | |||
(v) Capital commitments | |||
At September 30, 2014 the Company had committed to spend $ 6 million (December 31, 2013: $ 12 million) on capital projects. | |||
(e) Legal and other proceedings | |||
The Company expenses legal costs as they are incurred. | |||
The Company recognizes loss contingency provisions for probable losses when management is able to reasonably estimate the loss. When the estimated loss lies within a range, the Company records a loss contingency provision based on its best estimate of the probable loss. If no particular amount within that range is a better estimate than any other amount, the minimum amount is recorded. Estimates of losses may be developed substantially before the ultimate loss is known, and are therefore refined each accounting period as additional information becomes known. In instances where the Company is unable to develop a reasonable estimate of loss, no loss contingency provision is recorded at that time. As information becomes known a loss contingency provision is recorded when a reasonable estimate can be made. The estimates are reviewed quarterly and the estimates are changed when expectations are revised. An outcome that deviates from the Company's estimate may result in an additional expense or release in a future accounting period. At September 30, 2014 provisions for litigation losses, insurance claims and other disputes totaled $10.2 million (December 31, 2013: $72.7 million). | |||
The Company's principal pending legal and other proceedings are disclosed below. The outcomes of these proceedings are not always predictable and can be affected by various factors. For those legal and other proceedings for which it is considered at least reasonably possible that a loss has been incurred, the Company discloses the possible loss or range of possible loss in excess of the recorded loss contingency provision, if any, where such excess is both material and estimable. | |||
VYVANSE | |||
In May and June 2011, Shire was notified that six separate Abbreviated New Drug Applications ("ANDAs") were submitted under the Hatch-Waxman Act seeking permission to market generic versions of all approved strengths of VYVANSE. The notices were from Sandoz, Inc. ("Sandoz"); Amneal Pharmaceuticals LLC ("Amneal"); Watson Laboratories, Inc.; Roxane Laboratories, Inc. ("Roxane"); Mylan Pharmaceuticals, Inc.; and Actavis Elizabeth LLC and Actavis Inc. (collectively, "Actavis"). Since filing suit against these ANDA filers, along with API suppliers Johnson Matthey Inc. and Johnson Matthey Pharmaceuticals Materials (collectively “Johnson Matthey”), Shire has been engaged in a consolidated patent infringement litigation in the US District Court for the District of New Jersey. | |||
On June 23, 2014, the US District Court for the District of New Jersey granted Shire's summary judgment motion holding that 18 claims of the patents-in-suit were both infringed and valid. The ruling prevents all of the ANDA filers (Sandoz, Roxane, Amneal, Actavis and Mylan) from launching generic versions of VYVANSE until the earlier of either a successful appeal to the US Court of Appeals for the Federal Circuit, or the expiration of these patents in 2023. To appeal successfully, the ANDA-defendants must overturn the court's rulings for each of these 18 patent claims. All of the defendants have appealed the court's summary judgment ruling to the Court of Appeals of the Federal Circuit. No dates have been set for oral argument. | |||
LIALDA | |||
In May 2010, Shire was notified that Zydus Pharmaceuticals USA, Inc. (“Zydus”) had submitted an ANDA under the Hatch-Waxman Act seeking permission to market a generic version of LIALDA. Within the requisite 45 day period, Shire filed a lawsuit in the US District Court for the District of Delaware against Zydus and Cadila Healthcare Limited, doing business as Zydus Cadila. A Markman hearing is scheduled to take place on January 12, 2015. A trial is scheduled to begin on July 6, 2015. | |||
In February 2012, Shire was notified that Osmotica Pharmaceutical Corporation ("Osmotica") had submitted an ANDA under the Hatch-Waxman Act seeking permission to market a generic version of LIALDA. Within the requisite 45 day period, Shire filed a lawsuit in the US District Court for the Northern District of Georgia against Osmotica. A Markman hearing took place on August 22, 2013 and a Markman ruling was issued on September 25, 2014. No trial date has been set. | |||
In March 2012, Shire was notified that Watson Laboratories Inc.-Florida had submitted an ANDA under the Hatch-Waxman Act seeking permission to market a generic version of LIALDA. Within the requisite 45 day period, Shire filed a lawsuit in the US District Court for the Southern District of Florida against Watson Laboratories Inc.-Florida and Watson Pharmaceuticals, Inc. Watson Pharma, Inc. and Watson Laboratories, Inc. were subsequently added as defendants. A trial took place in April, 2013 and on May 9, 2013 the trial court issued a decision finding that the proposed generic product infringes the patent-in-suit and that the patent is not invalid. Watson appealed the trial court's ruling to the Court of Appeals of the Federal Circuit (“CAFC”) and a hearing took place on December 2, 2013. The ruling of the CAFC was issued on March 28, 2014 overruling the trial court on the interpretation of two claim terms and remanding the case for further proceedings. Shire has petitioned the Supreme Court for a writ of certiori which has not yet been ruled upon. No trial date has been set for the remanded proceedings in the district court. | |||
In April 2012, Shire was notified that Mylan Pharmaceuticals, Inc. had submitted an ANDA under the Hatch-Waxman Act seeking permission to market a generic version of LIALDA. Within the requisite 45 day period, Shire filed a lawsuit in the US District Court for the Middle District of Florida against Mylan. A Markman hearing is scheduled to occur on December 5, 2014. A trial is scheduled during the court's trial term beginning on August 3, 2015. | |||
Subpoena related to ADDERALL XR, DAYTRANA and VYVANSE and Louisiana Complaint related to ADDERALL, ADDERALL XR, DAYTRANA, VYVANSE and INTUNIV | |||
On September 24, 2014, Shire announced that it had resolved all matters with the federal government, the 50 states and the District of Columbia relating to a previously disclosed civil investigation of its US sales and marketing practices relating to ADDERALL XR, VYVANSE, DAYTRANA, LIALDA and PENTASA. The investigation was led by the US Attorney's Office for the Eastern District of Pennsylvania. Under the agreement, Shire has paid $56.5 million, and interest, fees, and costs, to resolve all issues investigated by the government. This final settlement includes the resolution of two related qui tam complaints filed against the Company and a voluntary disclosure relating to LIALDA and PENTASA. In addition, Shire has paid $2.9 million to resolve a previously disclosed civil complaint filed by the State of Louisiana alleging that the Company's sales, marketing, and promotion of ADDERALL, ADDERALL XR, DAYTRANA, VYVANSE and INTUNIV violated state law. The Company recorded a $57.5 million provision related to these matters which was charged to SG&A in the fourth quarter of 2012. As part of the resolution, Shire has entered into a Corporate Integrity Agreement with the Office of Inspector General for the Department of Health and Human Services for a term of five years. | |||
Investigation related to DERMAGRAFT | |||
The Department of Justice, including the US Attorney's Office for the Middle District of Florida, Tampa Division and the US Attorney's Office for Washington, DC, is conducting civil and criminal investigations into the sales and marketing practices of Advanced BioHealing Inc. (“ABH”) relating to DERMAGRAFT. | |||
Following the disposal of the DERMAGRAFT business in January 2014, Shire has retained certain legacy liabilities including any liability that may arise from this investigation. Shire is cooperating fully with these investigations. Shire is not in a position at this time to predict the scope, duration or outcome of these investigations. | |||
Civil Investigative Demand relating to VANCOCIN | |||
On April 6, 2012, ViroPharma received a notification that the United States Federal Trade Commission (“FTC”) is conducting an investigation into whether ViroPharma had engaged in unfair methods of competition with respect to VANCOCIN. On August 3, 2012, and September 8, 2014, ViroPharma and Shire respectively received Civil Investigative Demands from the FTC requesting additional information related to this matter. Shire intends to continue to cooperate fully with the FTC investigation. At this time, Shire is unable to predict the outcome or duration of this investigation. | |||
Litigation related to AbbVie's terminated offer for Shire | |||
On September 15, 2014, a putative stockholder class action lawsuit, Plumbers & Steamfitters Local 60 Pension Plan v. AbbVie Inc. et al., was filed in the Court of Chancery of the State of Delaware. The complaint alleges, among other things, that the members of the board of directors of AbbVie breached their fiduciary duties to AbbVie stockholders in connection with the proposed combination of AbbVie and Shire, and that Shire aided and abetted these alleged breaches of fiduciary duties and that the cost reimbursement payment payable by AbbVie to Shire in certain circumstances is coercive. The complaint also alleges certain material omissions in the preliminary joint proxy statement/prospectus filed by AbbVie with the SEC on August 21, 2014. Plaintiffs in the action seek, among other things, finding the AbbVie Board liable for breaching its fiduciary duties to the class, finding Shire liable for aiding and abetting the AbbVie board members' alleged breaches of fiduciary duty, certifying the proposed class and awarding its members compensatory damages, attorneys' fees and other costs, and other unspecified relief. Shire believes the claims asserted are without merit. On October 27, 2014, AbbVie filed a motion to dismiss on the basis that the claims are moot. | |||
Lawsuit related to supply of ELAPRASE to certain patients in Brazil | |||
On September 24, 2014 Shire's Brazilian affiliate, Shire Farmaceutica Brasil Ltda, was served with a lawsuit brought by the Sao Paulo Treasury and in which the Brazilian Public Attorney's office has intervened alleging that Shire is obligated to provide certain medical care including ELAPRASE for an indefinite period at no cost to patients who participated in ELAPRASE clinical trials in Brazil, and seeking recoupment to the Brazilian government for amounts paid for these patients to date, and moral damages associated with these claims. Shire intends to defend itself against these allegations but is not able to predict the outcome or duration of this case. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income | 9 Months Ended | ||||||
Sep. 30, 2014 | |||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ' | ||||||
Accumulated Other Comprehensive Income (Loss) | ' | ||||||
17. Accumulated Other Comprehensive Income | |||||||
The changes in accumulated other comprehensive income, net of their related tax effects, in the nine months to September 30, 2014 are included below: | |||||||
Foreign currency translation adjustment | Unrealized holding gain/(loss) on available-for-sale securities | Accumulated other comprehensive income | |||||
$M | $M | $M | |||||
As at January 1, 2014 | 110.4 | -0.2 | 110.2 | ||||
Current period change: | |||||||
Other Comprehensive income before reclassification | -75.9 | 5.6 | -70.3 | ||||
Gain transferred to the income statement (within Other income/(expense), net) on disposal of available-for-sale securities | 0 | -9.1 | -9.1 | ||||
Net current period other comprehensive income/(loss) | -75.9 | -3.5 | -79.4 | ||||
As at September 30, 2014 | 34.5 | -3.7 | 30.8 | ||||
Financial_Instruments
Financial Instruments | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Derivative Instrument Detail [Abstract] | ' | ||||
Financial Instruments Disclosure | ' | ||||
18. Financial instruments | |||||
Treasury policies and organization | |||||
The Company's principal treasury operations are coordinated by its corporate treasury function. All treasury operations are conducted within a framework of policies and procedures approved annually by the Board. As a matter of policy, the Company does not undertake speculative transactions that would increase its currency or interest rate exposure. | |||||
Interest rate risk | |||||
The Company is exposed to interest rate risk on its $1,200 million RCF and its $850 million term loan facility on which interest is at floating rates, to the extent the RCF or the Facilities are utilized. At September 30, 2014 the Company had fully utilized the $850 million term loan Facility. This exposure is to US dollar interest rates. | |||||
The Company has evaluated the interest rate risk on the RCF and the Facilities Agreement and considers the risks associated with floating interest rates on the instruments as appropriate. A hypothetical one percentage point increase or decrease in the interest rates applicable to drawings under the RCF and the Facilities Agreement at September 30, 2014 would increase or decrease interest expense by a maximum of $8.5 million per annum. | |||||
The Company is also exposed to interest rate risk on its restricted cash, cash and cash equivalents and on foreign exchange contracts on which interest is at floating rates. This exposure is primarily to US dollar, Pounds sterling, Euro and Canadian dollar interest rates. As the Company maintains all of its cash, liquid investments and foreign exchange contracts on a short term basis for liquidity purposes, this risk is not actively managed. In the nine months to September 30, 2014 the average interest rate received on cash and liquid investments was less than 1% per annum. The largest proportion of these cash and liquid investments was in US dollar money market and liquidity funds. | |||||
No derivative instruments were entered into during the nine months to September 30, 2014 to manage interest rate exposure. The Company continues to review its interest rate risk and the policies in place to manage the risk. | |||||
Credit risk | |||||
Financial instruments that potentially expose Shire to concentrations of credit risk consist primarily of short-term cash investments, derivative contracts and trade accounts receivable (from product sales and from third parties from which the Company receives royalties). Cash is invested in short-term money market instruments, including money market and liquidity funds and bank term deposits. The money market and liquidity funds in which Shire invests are all triple A rated by both Standard and Poor's and by Moody's credit rating agencies. | |||||
The Company is exposed to the credit risk of the counterparties with which it enters into derivative instruments. The Company limits this exposure through a system of internal credit limits which vary according to ratings assigned to the counterparties by the major rating agencies. The internal credit limits are approved by the Board and exposure against these limits is monitored by the corporate treasury function. The counterparties to these derivatives contracts are major international financial institutions. | |||||
The Company's revenues from product sales in the US are mainly governed by agreements with major pharmaceutical wholesalers and relationships with other pharmaceutical distributors and retail pharmacy chains. For the year to December 31, 2013 there were three customers in the US that accounted for 52% of the Company's product sales. However, such customers typically have significant cash resources and as such the risk from concentration of credit is considered acceptable. The Company has taken positive steps to manage any credit risk associated with these transactions and operates clearly defined credit evaluation procedures. However, an inability of one or more of these wholesalers to honor their debts to the Company could have an adverse effect on the Company's financial condition and results of operations. | |||||
A substantial portion of the Company's accounts receivable in countries outside of the United States is derived from product sales to government-owned or government-supported healthcare providers. The Company's recovery of these accounts receivable is therefore dependent upon the financial stability and creditworthiness of the relevant governments. In recent years the creditworthiness and general economic condition of a number of Eurozone countries (including Greece, Italy, Portugal and Spain (the “Relevant Countries”)) has deteriorated. As a result, in some of these countries the Company is experiencing delays in the remittance of receivables due from government-owned or government-supported healthcare providers. The Company continued to receive remittances in relation to government-owned or government-supported healthcare providers in all the Relevant Countries in the nine months September 30, 2014, including receipts of $75.7 million and $89.0 million in respect of Spanish and Italian receivables, respectively. | |||||
To date the Company has not incurred significant losses on accounts receivable in the Relevant Countries, and continues to consider that such accounts receivable are recoverable. The Company will continue to evaluate all its accounts receivable for potential collection risks and has made provision for amounts where collection is considered to be doubtful. If the financial condition of the Relevant Countries or other Eurozone countries suffer significant deterioration, such that their ability to make payments becomes uncertain, or if one or more Eurozone member countries withdraws from the Euro, additional allowances for doubtful accounts may be required, and losses may be incurred, in future periods. Any such loss could have an adverse effect on the Company's financial condition and results of operations. | |||||
Foreign exchange risk | |||||
The Company trades in numerous countries and as a consequence has transactional and translational foreign exchange exposures. | |||||
Transactional exposure arises where transactions occur in currencies different to the functional currency of the relevant subsidiary. The main trading currencies of the Company are the US dollar, Pounds Sterling, Swiss Franc and the Euro. It is the Company's policy that these exposures are minimized to the extent practicable by denominating transactions in the subsidiary's functional currency. | |||||
Where significant exposures remain, the Company uses foreign exchange contracts (being spot, forward and swap contracts) to manage the exposure for balance sheet assets and liabilities that are denominated in currencies different to the functional currency of the relevant subsidiary. These assets and liabilities relate predominantly to intercompany financing. The foreign exchange contracts have not been designated as hedging instruments. Cash flows from derivative instruments are presented within net cash provided by operating activities in the consolidated cash flow statement, unless the derivative instruments are economically hedging specific investing or financing activities. | |||||
Translational foreign exchange exposure arises on the translation into US dollars of the financial statements of non-US dollar functional subsidiaries. | |||||
At September 30, 2014 the Company had 45 swap and forward foreign exchange contracts outstanding to manage currency risk. The swap and forward contracts mature within 90 days. The Company did not have credit risk related contingent features or collateral linked to the derivatives. The Company has master netting agreements with a number of counterparties to these foreign exchange contracts and on the occurrence of specified events, the Company has the ability to terminate contracts and settle them with a net payment by one party to the other. The Company has elected to present derivative assets and derivative liabilities on a gross basis in the consolidated balance sheet. As at September 30, 2014 the potential effect of rights of set off associated with the foreign exchange contracts would be an offset to both assets and liabilities of $7.3 million, resulting in net derivative assets and derivative liabilities of $10.9 million and $8.4 million, respectively. Further details are included below: | |||||
Fair value | Fair value | ||||
September 30, | December 31, | ||||
2014 | 2013 | ||||
$’M | $’M | ||||
_____________ | _____________ | ||||
Assets | Prepaid expenses and other current assets | 18.2 | 4 | ||
Liabilities | Other current liabilities | 15.7 | 2.8 | ||
_____________ | _____________ | ||||
Net gains/(losses) (both realized and unrealized) arising on foreign exchange contracts have been classified in the consolidated statements of income as follows: | |||||
Location of net gains/(losses) recognized in income | Amount of net gains/(losses) recognized in income | ||||
__________________________________ | ____________ | ||||
In the nine months to | September 30, | September 30, | |||
2014 | 2013 | ||||
$’M | $’M | ||||
_____________ | _____________ | ||||
Foreign exchange contracts | Other income, net | 15.9 | -3.8 | ||
_____________ | _____________ | ||||
These net foreign exchange gains/(losses) are offset within Other income, net by net foreign exchange (losses)/gains arising on the balance sheet items that these contracts were put in place to manage. |
Fair_Value_Measurement
Fair Value Measurement | 9 Months Ended | ||||||
Sep. 30, 2014 | |||||||
Fair Value Disclosures [Abstract] | ' | ||||||
Fair Value Disclosures | ' | ||||||
19. Fair value measurement | |||||||
Assets and liabilities that are measured at fair value on a recurring basis | |||||||
As at September 30, 2014 and December 31, 2013 the following financial assets and liabilities are measured at fair value on a recurring basis using quoted prices in active markets for identical assets (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3). | |||||||
Carrying | Fair value | ||||||
value | |||||||
Total | Level 1 | Level 2 | Level 3 | ||||
At September 30, 2014 | $'M | $'M | $'M | $'M | $'M | ||
____________ | ____________ | ___________ | ___________ | ___________ | |||
Financial assets: | |||||||
Available-for-sale securities(1) | 15.2 | 15.2 | 15.2 | - | - | ||
Contingent consideration receivable (2) | 19.1 | 19.1 | - | - | 19.1 | ||
Foreign exchange contracts | 18.2 | 18.2 | - | 18.2 | - | ||
Financial liabilities: | |||||||
Foreign exchange contracts | 15.7 | 15.7 | - | 15.7 | - | ||
Contingent consideration payable(3) | 642 | 642 | - | - | 642 | ||
____________ | ____________ | ___________ | ___________ | ___________ | |||
Total | Level 1 | Level 2 | Level 3 | ||||
At December 31, 2013 | $'M | $'M | $'M | $'M | $'M | ||
____________ | ____________ | ___________ | ___________ | ___________ | |||
Financial assets: | |||||||
Available-for-sale securities(1) | 6.7 | 6.7 | 6.7 | - | - | ||
Contingent consideration receivable (2) | 36.1 | 36.1 | - | - | 36.1 | ||
Foreign exchange contracts | 4 | 4 | - | 4 | - | ||
Financial liabilities: | |||||||
Foreign exchange contracts | 2.8 | 2.8 | - | 2.8 | - | ||
Contingent consideration payable(3) | 1 | 405.9 | 405.9 | - | - | 405.9 | |
____________ | ____________ | ___________ | ___________ | ___________ | |||
(1) Available-for-sale securities are included within Investments in the consolidated balance sheet. | |||||||
(2) Contingent consideration receivable is included within Prepaid expenses and other current assets and Other non-current assets in the consolidated balance sheet. | |||||||
(3) Contingent consideration payable is included within Other current liabilities and Other non-current liabilities in the consolidated balance sheet. | |||||||
Certain estimates and judgments were required to develop the fair value amounts. The fair value amounts shown above are not necessarily indicative of the amounts that the Company would realize upon disposition, nor do they indicate the Company's intent or ability to dispose of the financial instrument. | |||||||
The following methods and assumptions were used to estimate the fair value of each material class of financial instrument: | |||||||
Available-for-sale securities – the fair values of available-for-sale securities are estimated based on quoted market prices for those investments. | |||||||
Contingent consideration receivable – the fair value of the contingent consideration receivable has been estimated using the income approach (using a probability weighted discounted cash flow method). | |||||||
Foreign exchange contracts – the fair values of the swap and forward foreign exchange contracts have been determined using an income approach based on current market expectations about the future cash flows. | |||||||
Contingent consideration payable – the fair value of the contingent consideration payable has been estimated using the income approach (using a probability weighted discounted cash flow method). | |||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) | |||||||
The change in the fair value of the Company's contingent consideration receivable and payables, which are measured at fair value on a recurring basis using significant unobservable inputs (Level 3), are as follows: | |||||||
Contingent consideration receivable | |||||||
2014 | 2013 | ||||||
$'M | $'M | ||||||
____________ | ____________ | ||||||
Balance at January 1, | 36.1 | 38.3 | |||||
Initial recognition of contingent consideration receivable | 33.6 | - | |||||
Loss recognized in the income statement (within discontinued operations) due to change in fair value during the period | -33.6 | - | |||||
(Loss)/gain recognized in the income statement (within Gain on sale of product rights) due to change in fair value during the period | -4.1 | 14.6 | |||||
Reclassification of amounts to Other receivables within Other current assets | -14.9 | -13.9 | |||||
Amounts recorded to other comprehensive income (within foreign currency translation adjustments) | 2 | 0.6 | |||||
Balance at September 30, | 19.1 | 39.6 | |||||
Contingent consideration payable | |||||||
2014 | 2013 | ||||||
$'M | $'M | ||||||
____________ | ____________ | ||||||
Balance at January 1, | 405.9 | 136.4 | |||||
Initial recognition of contingent consideration payable | 226.7 | 451.4 | |||||
Change in fair value during the period with the corresponding adjustment recognized as a loss in the income statement (within Integration and acquisition costs) | 26.3 | 28.4 | |||||
Reclassification of amounts to Other current liabilities | -12.4 | -11.1 | |||||
Change in fair value during the period with corresponding adjustment to the associated intangible asset | 1.8 | -7.3 | |||||
Amounts recorded to other comprehensive income (within foreign currency translation adjustments) | -6.3 | - | |||||
Balance at September 30, | 642 | 597.8 | |||||
Of the $642.0 million of contingent consideration payable as at September 30, 2014 $156.4 million is recorded within other current liabilities and $485.6 million is recorded within other non-current liabilities in the Company's balance sheet. | |||||||
Quantitative Information about Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) | |||||||
Quantitative information about the Company's recurring Level 3 fair value measurements is included below: | |||||||
Financial assets: | Fair Value at the Measurement Date | ||||||
At September 30, 2014 | Fair value | Valuation Technique | Significant unobservable Inputs | Range | |||
$'M | |||||||
____________ | ___________ | ___________ | ___________ | ||||
Contingent consideration receivable ("CCR") | 19.1 | Income approach (probability weighted discounted cash flow) | • Probability weightings applied to different sales scenarios • Future forecast consideration receivable based on contractual terms with purchaser • Assumed market participant discount rate | • 10 to 70% • $15 million to $120 million • 8% to 11.5% | |||
____________ | ____________ | ____________ | ____________ | ||||
Financial liabilities: | Fair Value at the Measurement Date | ||||||
At September 30, 2014 | Fair value | Valuation Technique | Significant unobservable Inputs | Range | |||
$'M | |||||||
____________ | ___________ | ___________ | ___________ | ||||
Contingent consideration payable | 642 | Income approach (probability weighted discounted cash flow) | • Cumulative probability of milestones being achieved • Assumed market participant discount rate • Periods in which milestones are expected to be achieved • Forecast quarterly royalties payable on net sales of relevant products | • 4 to 95% • 0.8 to 11.8% • 2015 to 2030 • $2.1 to $7.6 million | |||
____________ | ____________ | ____________ | ____________ | ||||
The Company re-measures the CCR (relating to contingent consideration due to the Company following divestment of certain of the Company's products) at fair value at each balance sheet date, with the fair value measurement based on forecast cash flows, over a number of scenarios which vary depending on the expected performance outcome of the products following divestment. The forecast cash flows under each of these differing outcomes have been included in probability weighted estimates used by the Company in determining the fair value of the CCR. | |||||||
Contingent consideration payable represents future milestones the Company may be required to pay in conjunction with various business combinations and future royalties payable as a result of certain business combinations and licenses. The amount ultimately payable by Shire in relation to business combinations is dependent upon the achievement of specified future milestones, such as the achievement of certain future development, regulatory and sales milestones. The Company assesses the probability, and estimated timing, of these milestones being achieved and re-measures the related contingent consideration to fair value each balance sheet date. The amount of contingent consideration which may ultimately be payable by Shire in relation to future royalties is dependent upon future net sales of the relevant products over the life of the royalty term. The Company assesses the present value of forecast future net sales of the relevant products and re-measures the related contingent consideration to fair value each balance sheet date. | |||||||
The fair value of the Company's contingent consideration receivable and payable could significantly increase or decrease due to changes in certain assumptions which underpin the fair value measurements. Each set of assumptions and milestones is specific to the individual contingent consideration receivable or payable. The assumptions include, among other things, the probability and expected timing of certain milestones being achieved, the forecast future net sales of the relevant products and related future royalties payable, the probability weightings applied to different sales scenarios of the Company's divested products and forecast future royalties receivable under scenarios developed by the Company, and the discount rates used to determine the present value of contingent future cash flows. The Company regularly reviews these assumptions, and makes adjustments to the fair value measurements as required by facts and circumstances. | |||||||
Assets Measured At Fair Value on a Non-Recurring Basis in the period using Significant Unobservable Inputs (Level 3) | |||||||
In the nine months to September 30, 2014 the Company reviewed its SHP602 IPR&D intangible asset for impairment and recognized an impairment charge of $166 million, recorded within R&D in the consolidated income statement, to write down this asset to fair value. The fair value was determined using the income approach, which used significant unobservable (Level 3) inputs. These unobservable inputs included, among other things, probabilities of the IPR&D intangible asset receiving regulatory approval, risk-adjusted forecast future cash flows to be generated by this asset and the determination of an appropriate discount rate to be applied in calculating the present value of forecast future cash flows. | |||||||
Fair Value at the Measurement Date | |||||||
At September 30, 2014 | Fair value | Valuation Technique | Significant unobservable Inputs | Rate/date used | |||
$'M | |||||||
____________ | ___________ | ___________ | ___________ | ||||
SHP602 IPR&D intangible asset | $nil | Income approach (discounted cash flow) | • Probability of regulatory approval being obtained • Expected commercial launch date • Assumed market participant discount rate | • 11 to 15% • 2021 • 11.3% | |||
____________ | ____________ | ____________ | ____________ | ||||
In the nine months to September 30, 2014 the Company also recognized an impairment charge of $22 million, recorded within R&D in the consolidated income statement, to write down the SHP613 IPR&D intangible asset to a revised fair value of $nil following the decision to discontinue development of this program based on portfolio prioritization as well as unexpected challenges and complexities with the development program. | |||||||
The carrying amounts of other financial assets and liabilities materially approximate to their fair value because of the short-term maturity of these amounts. |
Earnings_Per_Share
Earnings Per Share | 9 Months Ended | ||||||
Sep. 30, 2014 | |||||||
Earnings Per Share [Abstract] | ' | ||||||
Earnings Per Share Disclosure | ' | ||||||
20. Earnings per share | |||||||
The following table reconciles net income and the weighted average ordinary shares outstanding for basic and diluted earnings per share for the periods presented: | |||||||
3 months to | 3 months to | 9 months to | 9 months to | ||||
September 30, | September 30, | September 30, | September 30, | ||||
2014 | 2013 | 2014 | 2013 | ||||
$’M | $’M | $’M | $’M | ||||
_________________ | _________________ | _________________ | _________________ | ||||
Income from continuing operations, net of taxes | 515.8 | 301.1 | 1,297.20 | 873 | |||
Loss from discontinued operations1 | -36.1 | -22.9 | -64 | -271.9 | |||
_________________ | _________________ | _________________ | _________________ | ||||
Numerator for basic earnings per share | 479.7 | 278.2 | 1,233.20 | 601.1 | |||
Interest on convertible bonds, net of tax | - | 7.6 | - | 22.7 | |||
_________________ | _________________ | _________________ | _________________ | ||||
Numerator for diluted earnings per share | 479.7 | 285.8 | 1,233.20 | 623.8 | |||
_________________ | _________________ | _________________ | _________________ | ||||
Weighted average number of shares: | |||||||
Millions | Millions | Millions | Millions | ||||
_________________ | _________________ | _________________ | _________________ | ||||
Basic 1 | 587.6 | 548.4 | 586.1 | 549.8 | |||
Effect of dilutive shares: | |||||||
Share based awards to employees 2 | 5 | 3.5 | 6 | 3.9 | |||
Convertible bonds 2.75% due 2014 3 | - | 33.8 | - | 33.8 | |||
_________________ | _________________ | _________________ | _________________ | ||||
Diluted | 592.6 | 585.7 | 592.1 | 587.5 | |||
_________________ | _________________ | _________________ | _________________ | ||||
1. Excludes shares purchased by the EBT and presented by Shire as treasury stock. | |||||||
2. Calculated using the treasury stock method. | |||||||
3. Calculated using the “if converted” method | |||||||
The share equivalents not included in the calculation of the diluted weighted average number of shares are shown below: | |||||||
3 months to | 3 months to | 9 months to | 9 months to | ||||
September 30, | September 30, | September 30, | September 30, | ||||
2014 | 2013 | 2014 | 2013 | ||||
No. of shares | No. of shares | No. of shares | No. of shares | ||||
Millions | Millions | Millions | Millions | ||||
_________________ | _________________ | _________________ | _________________ | ||||
Share based awards to employees1 | 0.3 | 0.5 | 0.3 | 4.5 | |||
_________________ | _________________ | _________________ | _________________ | ||||
Certain stock options have been excluded from the calculation of diluted EPS because (a) their exercise prices exceeded Shire plc's average share price during the calculation period or (b) the required performance conditions were not satisfied as at the balance sheet date. | |||||||
Segmental_Reporting
Segmental Reporting | 9 Months Ended | ||
Sep. 30, 2014 | |||
Segment Reporting [Abstract] | ' | ||
Segment Reporting Disclosure | ' | ||
21. Segmental reporting | |||
Shire comprises a single operating and reportable segment engaged in the research, development, licensing, manufacturing, marketing, distribution and sale of innovative specialist medicines to meet significant unmet patient needs. | |||
This segment is supported by several key functions: a Pipeline group, consisting of R&D and Business Development, which prioritizes its activities towards late stage development programs across a variety of therapeutic areas, while focusing its pre-clinical development activities primarily in Rare Diseases; a Technical Operations group responsible for the Company's global supply chain; and an In-line marketed products group focuses on commercialized products. The In-Line marketed products group currently consists of four commercial units focused exclusively on commercial delivery to drive optimum performance of currently marketed products. The business is also supported by a simplified, centralized corporate function group. None of these functional groups meets all of the criteria to be an operating segment. | |||
This single operating and reportable segment is consistent with the financial information regularly reviewed by the Executive Committee (which is Shire's chief operating decision maker) for the purposes of evaluating performance, allocating resources, and planning and forecasting future periods. | |||
In the periods set out below, revenues by major product were as follows: | |||
9 months to, | September 30, | September 30, | |
2014 | 2013 | ||
$’M | $’M | ||
___________ | ___________ | ||
VYVANSE | 1,065.60 | 897.9 | |
LIALDA/MEZAVANT | 449.1 | 379.9 | |
ELAPRASE | 449.5 | 392.6 | |
CINRYZE | 360.6 | - | |
REPLAGAL | 380.7 | 336.6 | |
FIRAZYR | 262.3 | 153.8 | |
INTUNIV | 279 | 248.9 | |
VPRIV | 273 | 251.9 | |
ADDERALL XR | 280.2 | 293.5 | |
PENTASA | 213.8 | 215.2 | |
FOSRENOL | 136.2 | 136.3 | |
XAGRID | 82.1 | 74.1 | |
Other product sales | 97.6 | 96.4 | |
____________ | ____________ | ||
Total product sales | 4,329.70 | 3,477.10 | |
____________ | ____________ |
Taxation
Taxation | 9 Months Ended |
Sep. 30, 2014 | |
Income Tax Disclosure [Abstract] | ' |
Income Tax Disclosure | ' |
22. Taxation | |
The effective rate of tax on income from continuing operations for the three months to September 30, 2014 was 11% (2013: 20%) and for the nine months to September 30, 2014 was -5% (2013: 21%). | |
The low effective rate of tax in the three and nine months to September 30, 2014 is primarily due to the recognition of a net tax credit of $27.7 million and $243.7 million respectively, following the settlement of certain tax positions with the Canadian revenue authorities. This net tax credit includes the release of provisions for uncertain tax positions including interest and penalties of $26.5 million and $291.7 million respectively, partially offset by associated foreign tax credits. | |
Interest income for the three and nine months to September 30, 2014 of $2.8 million and $21.4 million in respect of the cash deposited with the Canadian revenue authorities prior to the settlement has been recorded within interest income. | |
The Company considers it reasonably possible that certain audits for other territories could also be concluded in the next twelve months, and the total amount of unrecognized tax benefits at September 30, 2014 could decrease by approximately $20 million. |
Related_Parties
Related Parties | 9 Months Ended |
Sep. 30, 2014 | |
Related Party Transactions [Abstract] | ' |
Related Party Disclosure | ' |
23. Related parties | |
Shire considers that ArmaGen is a related party by virtue of Shire's equity stake in ArmaGen and the worldwide licensing and collaboration agreement between the two parties to develop and commercialize AGT-182 (see Note 16 for details). In the three and nine months to September 30, 2014 Shire paid $15 million in cash to ArmaGen in exchange for an equity stake in ArmaGen and the license to develop and commercialize AGT-182. |
Subsquent_Events
Subsquent Events | 9 Months Ended |
Sep. 30, 2014 | |
Subsequent Events [Abstract] | ' |
Subsequent Events [Text Block] | ' |
24. Subsequent Events | |
On October 15, 2014 the Board of AbbVie confirmed that it had withdrawn its recommendation of its offer for Shire as a result of the anticipated impact of the US Treasury Notice on the benefits that AbbVie expected from its offer. As AbbVie's offer was conditional on the approval of its stockholders, and given their Board's decision to change its recommendation and to advise AbbVie's stockholders to vote against the offer, there was no realistic prospect of satisfying this condition. Accordingly, Shire's Board agreed with AbbVie to terminate the cooperation agreement on October 20, 2014. The UK Takeover Panel has confirmed that the offer period has ended. The Company has entered into a termination agreement with AbbVie, pursuant to which AbbVie has paid the break fee due under the cooperation agreement of approximately $1.635 billion, which will be recorded as a credit to the Company's consolidated income statement in the fourth quarter of 2014. The Company is evaluating the associated tax impact. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2014 | |
Basis of preparation | ' |
(a) Basis of preparation | |
These interim financial statements of Shire plc and its subsidiaries (collectively “Shire” or the “Company”) and other financial information included in this Form 10-Q, are unaudited. They have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and US Securities and Exchange Commission (“SEC”) regulations for interim reporting. | |
The balance sheet as at December 31, 2013 was derived from audited financial statements but does not include all disclosures required by US GAAP. | |
These interim financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company's Annual Report on Form 10-K for the year to December 31, 2013. | |
Certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted from these interim financial statements. However, these interim financial statements include all adjustments, which are, in the opinion of management, necessary to fairly state the results of the interim period and the Company believes that the disclosures are adequate to make the information presented not misleading. Interim results are not necessarily indicative of results to be expected for the full year. | |
Use of estimates in consolidated financial statements | ' |
(b) Use of estimates in interim financial statements | |
The preparation of interim financial statements, in conformity with US GAAP and SEC regulations, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are primarily made in relation to the valuation of intangible assets, sales deductions, income taxes (including provisions for uncertain tax positions and the realization of deferred tax assets), provisions for litigation and legal proceedings, contingent consideration receivable from product divestments and contingent consideration payable in respect of business combinations and asset purchases. If actual results differ from the Company's estimates, or to the extent these estimates are adjusted in future periods, the Company's results of operations could either benefit from, or be adversely affected by, any such change in estimate. | |
New accounting pronouncements | ' |
(c) New accounting pronouncements | |
To be adopted in future periods | |
Reporting discontinued operations and disclosures of disposals of components of an entity | |
In April 2014 the Financial Accounting Standard Board (“FASB”) issued guidance on the reporting of discontinued operations and disclosures of disposals of components of an entity. The amendments in this update revise the definition of discontinued operations by limiting discontinued operations reporting to disposals of components of an entity that represent strategic shifts that have (or will have) a major effect on an entity's operations and financial results. The guidance requires expanded disclosures for discontinued operations which provide users of financial statements with more information about the assets, liabilities, revenues, and expenses of discontinued operations. The guidance also requires an entity to disclose the pre-tax profit or loss of an individually significant component of an entity that does not qualify for discontinued operations reporting. | |
The guidance will be effective for disposals (or classifications as held for sale) of components of an entity that occur within annual periods beginning on or after December 15, 2014, and interim periods within annual periods beginning on or after December 15, 2015. Early adoption is permitted, but only for disposals (or classifications as held for sale) that have not been reported in financial statements previously issued or available for issuance. The Company does not expect the adoption of this guidance to have a material effect on its consolidated financial position, results of operations and cash flows. | |
Revenue from Contracts with Customers | |
In May 2014 the FASB and the International Accounting Standard Board (together as the “Accounting Standard Boards”) issued a new accounting standard that is intended to clarify and converge the financial reporting requirements for revenue from contracts with customers. The core principle of the standard is that an “entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services”. To achieve that core principle the Accounting Standard Boards developed a five-step model (as presented below) and related application guidance, which will replace most existing revenue recognition guidance in US GAAP. | |
Five-step model: | |
Step 1: Identify the contract(s) with a customer. | |
Step 2: Identify the performance obligations in the contract. | |
Step 3: Determine the transaction price. | |
Step 4: Allocate the transaction price to the performance obligations in the contract. | |
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. | |
The Accounting Standard Boards also issued new qualitative and quantitative disclosure requirements as part of the new accounting standard which aims to enable financial statement users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The guidance is effective for annual periods beginning after December 15, 2016. Early adoption is not permitted. The Company is currently evaluating the impact of adopting this guidance. | |
Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation | |
In June 2014 the FASB issued guidance on the reporting requirements for development stage entities. The amendments in this update simplify the existing guidance by removing all incremental financial reporting requirements for development stage entities. The amendments also eliminate an exception provided to development stage entities in Topic 810, Consolidation, for determining whether an entity is a variable interest entity on the basis of the amount of equity that is at risk. The elimination of the exception may change the consolidation analysis, consolidation decision, and disclosure requirements for a reporting entity that has an interest in an entity in the development stage. The guidance is effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. The guidance to eliminate the exception to the sufficiency-of-equity-at-risk criterion for development stage entities should be applied retrospectively for annual reporting periods beginning after December 15, 2015, and interim periods therein. Early application of each of the amendments is permitted for any annual reporting period or interim period for which the entity's financial statements have not yet been issued. The Company is currently evaluating the impact of adopting this guidance. | |
Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern | |
In August 2014 the FASB issued guidance about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. An entity's management should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). Management's evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued (or available to be issued). Substantial doubt about an entity's ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or available to be issued). The term probable is used consistently with its use in topic 450, Contingencies. The amendments in this update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company does not expect the adoption of this guidance to have a material effect on its consolidated financial position, results of operations and cash flows. | |
Business_Combinations_Tables
Business Combinations (Tables) | 9 Months Ended | ||
Sep. 30, 2014 | |||
Business Acquisition [Line Items] | ' | ||
Schedule of Purchase Price Allocation | ' | ||
Preliminary | |||
Fair value | |||
$’M | |||
Identifiable assets acquired and liabilities assumed | |||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | 232.6 | ||
Short term investments | 57.8 | ||
Accounts receivable | 52.2 | ||
Inventories | 203.6 | ||
Deferred tax assets | 100.2 | ||
Purchased call option | 346.7 | ||
Other current assets | 42.9 | ||
_______________ | |||
Total current assets | 1,036.00 | ||
Non-current assets: | |||
Property, plant and equipment | 24.7 | ||
Goodwill | 1,528.80 | ||
Other intangible assets | |||
- Currently marketed products | 2,320.00 | ||
- In-Process Research and Development (“IPR&D”) | 530.0 | ||
Other non-current assets | 10.4 | ||
_______________ | |||
Total assets | 5,449.90 | ||
_______________ | |||
LIABILITIES | |||
Current liabilities: | |||
Accounts payable and other current liabilities | 109.5 | ||
Convertible bond | 551.4 | ||
Non-current liabilities: | |||
Deferred tax liabilities | 695.9 | ||
Other non-current liabilities | 96.1 | ||
_______________ | |||
Total liabilities | 1,452.90 | ||
_______________ | |||
Fair value of identifiable assets acquired and liabilities assumed | 3,997.00 | ||
_______________ | |||
Consideration | |||
Cash consideration paid | 3,997.00 | ||
_______________ | |||
Business Acquisition, Pro Forma Information | ' | ||
9 months to | 9 months to | ||
September 30, | September 30, | ||
2014 | 2013 | ||
$’M | $’M | ||
_______________ | _______________ | ||
Revenues | 4,477.80 | 3,932.20 | |
Net income from continuing operations | 1,297.00 | 642.2 | |
_______________ | _______________ | ||
Per share amounts: | |||
Net income from continuing operations per share - basic | 221.4c | 116.8c | |
Net income from continuing operations per share - diluted | 218.6c | 109.3c | |
_______________ | _______________ |
Reorganization_costs_Table
Reorganization costs (Table) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Restructuring and Related Activities [Abstract] | ' | ||||
Schedule of Reorganization costs | ' | ||||
Opening liability | Amount | Closing liability at | |||
at January 1, | charged to re- | September 30, | |||
2014 | organization | Paid/Utilized | 2014 | ||
$'M | $'M | $'M | $'M | ||
___________ | ____________ | ___________ | ___________ | ||
Involuntary termination benefits | 15.3 | 104.1 | -116.5 | 2.9 | |
Other reorganization costs | 9.5 | 19.3 | -28.3 | 0.5 | |
___________ | ___________ | ___________ | ___________ | ||
24.8 | 123.4 | -144.8 | 3.4 | ||
___________ | ___________ | ___________ | ___________ |
Accounts_Receivable_Net_Tables
Accounts Receivable, Net (Tables) | 9 Months Ended | ||
Sep. 30, 2014 | |||
Receivables [Abstract] | ' | ||
Provision for discounts and doubtful accounts | ' | ||
2014 | 2013 | ||
$’M | $’M | ||
_____________ | _____________ | ||
As at January 1, | 47.9 | 41.7 | |
Provision charged to operations | 228.1 | 225.3 | |
Provision utilization | -229.8 | -215.4 | |
_____________ | _____________ | ||
As at September 30, | 46.2 | 51.6 | |
_____________ | _____________ |
Inventories_Tables
Inventories (Tables) | 9 Months Ended | ||
Sep. 30, 2014 | |||
Inventory Disclosure [Abstract] | ' | ||
Schedule of Inventory | ' | ||
September 30, | December 31, | ||
2014 | 2013 | ||
$’M | $’M | ||
____________ | ____________ | ||
Finished goods | 145 | 156.6 | |
Work-in-progress | 288.3 | 240.5 | |
Raw materials | 115.6 | 58.2 | |
____________ | ____________ | ||
548.9 | 455.3 | ||
____________ | ____________ |
Results_of_discontinued_operat1
Results of discontinued operations (Table) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
DiscontinuedOperationIncomeLossFromDiscontinuedOperationDisclosuresAbstract | ' | ||||
Schedule of discontinued operations | ' | ||||
3 months to | 3 months to | 9 months to | 9 months to | ||
September 30, | September 30, | September 30, | September 30, | ||
2014 | 2013 | 2014 | 2013 | ||
$’M | $’M | $’M | $’M | ||
Revenues: | _______________ | _______________ | _______________ | _______________ | |
Product revenues | - | 23.9 | 1.9 | 64.7 | |
_______________ | _______________ | _______________ | _______________ | ||
Loss from discontinued operations before income taxes | -37.9 | -42 | -81.8 | -323.3 | |
Income taxes | 1.8 | 19.1 | 17.8 | 51.4 | |
_______________ | _______________ | _______________ | _______________ | ||
Loss from discontinued operations, net of taxes | -36.1 | -22.9 | -64 | -271.9 | |
_______________ | _______________ | _______________ | _______________ |
Prepaid_Expenses_and_Other_Cur1
Prepaid Expenses and Other Current Assets (Tables) | 9 Months Ended | ||
Sep. 30, 2014 | |||
Prepaid Expense and Other Assets, Current [Abstract] | ' | ||
Prepaid Expense and Other Assets, Current | ' | ||
September 30, | December 31, | ||
2014 | 2013 | ||
$’M | $’M | ||
______________ | ____________ | ||
Prepaid expenses | 53.2 | 29.4 | |
Income tax receivable | 264.6 | 177.4 | |
Value added taxes receivable | 24.1 | 14.5 | |
Other current assets | 60.5 | 41.7 | |
______________ | ______________ | ||
402.4 | 263 | ||
______________ | ______________ |
Goodwill_Tables
Goodwill (Tables) | 9 Months Ended | ||
Sep. 30, 2014 | |||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||
Schedule of Acquired Goodwill | ' | ||
September 30, | December 31, | ||
2014 | 2013 | ||
$’M | $’M | ||
____________ | ____________ | ||
Goodwill arising on businesses acquired | 2,373.70 | 624.6 | |
____________ | ____________ | ||
Schedule of Goodwill | ' | ||
2014 | 2013 | ||
$’M | $’M | ||
____________ | ____________ | ||
As at January 1, | 624.6 | 644.5 | |
Acquisitions | 1,773.80 | 170.3 | |
Goodwill impairment charge related to continuing operations | - | -7.1 | |
Goodwill impairment charge related to DERMAGRAFT business recorded to discontinued operations | - | -191.8 | |
Foreign currency translation | -24.7 | 5.4 | |
____________ | ____________ | ||
As at September 30, | 2,373.70 | 621.3 | |
____________ | ____________ |
Other_Intangible_Assets_Net_Ta
Other Intangible Assets, Net (Tables) | 9 Months Ended | |||
Sep. 30, 2014 | ||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ' | |||
Schedule of Other Intangible Assets | ' | |||
September 30, | December 31, | |||
2014 | 2013 | |||
$’M | $’M | |||
________________ | ________________ | |||
Amortized intangible assets | ||||
Intellectual property rights acquired for currently marketed products | 4,850.60 | 2,573.30 | ||
Other intangible assets | 30 | 46.1 | ||
________________ | ________________ | |||
4,880.60 | 2,619.40 | |||
Unamortized intangible assets | ||||
Intellectual property rights acquired for IPR&D | 1,768.90 | 951.5 | ||
________________ | ________________ | |||
6,649.50 | 3,570.90 | |||
Less: Accumulated amortization | -1,422.10 | -1,258.30 | ||
________________ | ________________ | |||
5,227.40 | 2,312.60 | |||
________________ | ________________ | |||
Intangible Assets (Excluding Goodwill) Roll Forward | ' | |||
Other intangible assets | ||||
2014 | 2013 | |||
$’M | $’M | |||
________________ | ________________ | |||
As at January 1, | 2,312.60 | 2,388.10 | ||
Acquisitions | 3,332.80 | 733.2 | ||
Divestment of non-core products (refer to Note 3) | -17.3 | - | ||
Amortization charged | -181.9 | -106.5 | ||
Amortization charged on DERMAGRAFT product technology, presented within discontinued operations in the consolidated income statement | - | -29.6 | ||
Impairment charges | -188 | -19.9 | ||
Foreign currency translation | -30.8 | 10.7 | ||
________________ | ________________ | |||
As at September 30, | 5,227.40 | 2,976.00 | ||
________________ | ________________ |
Accounts_Payable_and_Accrued_E1
Accounts Payable and Accrued Expenses (Tables) | 9 Months Ended | ||
Sep. 30, 2014 | |||
Accounts Payable and Accrued Liabilities, Current [Abstract] | ' | ||
Schedule of Accounts Payable and Accrued Expenses | ' | ||
September 30, | December 31, | ||
2014 | 2013 | ||
$’M | $’M | ||
________________ | ________________ | ||
Trade accounts payable and accrued purchases | 236.7 | 202.6 | |
Accrued rebates – Medicaid | 554.7 | 549.1 | |
Accrued rebates – Managed care | 287.8 | 258.1 | |
Sales return reserve | 100.6 | 98.8 | |
Accrued bonuses | 116.8 | 130.9 | |
Accrued employee compensation and benefits payable | 100.2 | 79.4 | |
R&D accruals | 76.3 | 69.6 | |
Provisions for litigation losses and other claims | 8.9 | 71.7 | |
Other accrued expenses | 243.8 | 228.2 | |
________________ | ________________ | ||
1,725.80 | 1,688.40 | ||
________________ | ________________ |
Other_Current_Liabilities_Tabl
Other Current Liabilities (Tables) | 9 Months Ended | ||
Sep. 30, 2014 | |||
Other Liabilities, Current [Abstract] | ' | ||
Schedule of Other Current Liabilities | ' | ||
September 30, | December 31, | ||
2014 | 2013 | ||
$’M | $’M | ||
_____________ | _____________ | ||
Income taxes payable | 54.3 | 69 | |
Value added taxes | 22.1 | 15.8 | |
Contingent consideration payable | 156.4 | 12.9 | |
Other current liabilities | 43.8 | 21.8 | |
_____________ | _____________ | ||
276.6 | 119.5 | ||
_____________ | _____________ |
Other_Noncurrent_Liabilities_T
Other Non-current Liabilities (Tables) | 9 Months Ended | ||
Sep. 30, 2014 | |||
Other Liabilities, Noncurrent [Abstract] | ' | ||
Schedule of Other Noncurrent Liabilities | ' | ||
September 30, | December 31, | ||
2014 | 2013 | ||
$’M | $’M | ||
____________ | ____________ | ||
Income taxes payable | 180.3 | 115.7 | |
Deferred revenue | 7.7 | 9.8 | |
Deferred rent | 9.6 | 11.3 | |
Contingent consideration payable | 485.6 | 393 | |
Other non-current liabilities | 88.4 | 58.7 | |
____________ | ____________ | ||
771.6 | 588.5 | ||
____________ | ____________ |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 9 Months Ended | ||
Sep. 30, 2014 | |||
Commitments and Contingencies Disclosure [Abstract] | ' | ||
Future Minimum Lease Payments under Operating Leases | ' | ||
Operating | |||
leases | |||
$’M | |||
_____________ | |||
2014 | 1 | 10.7 | |
2015 | 1 | 43.9 | |
2016 | 1 | 31.4 | |
2017 | 1 | 24 | |
2018 | 1 | 18.7 | |
2019 | 1 | 14.5 | |
Thereafter | 1 | 100.5 | |
111 | _____________ | ||
243.7 | |||
_____________ |
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Tables) | 9 Months Ended | ||||||
Sep. 30, 2014 | |||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ' | ||||||
Changes in Accumulated Other Comprehensive Income, Net of Tax | ' | ||||||
Foreign currency translation adjustment | Unrealized holding gain/(loss) on available-for-sale securities | Accumulated other comprehensive income | |||||
$M | $M | $M | |||||
As at January 1, 2014 | 110.4 | -0.2 | 110.2 | ||||
Current period change: | |||||||
Other Comprehensive income before reclassification | -75.9 | 5.6 | -70.3 | ||||
Gain transferred to the income statement (within Other income/(expense), net) on disposal of available-for-sale securities | 0 | -9.1 | -9.1 | ||||
Net current period other comprehensive income/(loss) | -75.9 | -3.5 | -79.4 | ||||
As at September 30, 2014 | 34.5 | -3.7 | 30.8 | ||||
Financial_Instruments_Tables
Financial Instruments (Tables) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Derivative Instrument Detail [Abstract] | ' | ||||
Schedule of Foreign Exchange Contracts, Statement of Financial Position | ' | ||||
Fair value | Fair value | ||||
September 30, | December 31, | ||||
2014 | 2013 | ||||
$’M | $’M | ||||
_____________ | _____________ | ||||
Assets | Prepaid expenses and other current assets | 18.2 | 4 | ||
Liabilities | Other current liabilities | 15.7 | 2.8 | ||
_____________ | _____________ | ||||
Schedule of Foreign Exchange Contracts, Gain (Loss) in Other Income (Expense) | ' | ||||
Location of net gains/(losses) recognized in income | Amount of net gains/(losses) recognized in income | ||||
__________________________________ | ____________ | ||||
In the nine months to | September 30, | September 30, | |||
2014 | 2013 | ||||
$’M | $’M | ||||
_____________ | _____________ | ||||
Foreign exchange contracts | Other income, net | 15.9 | -3.8 | ||
_____________ | _____________ |
Fair_Value_Measurement_Tables
Fair Value Measurement (Tables) | 9 Months Ended | ||||||
Sep. 30, 2014 | |||||||
Fair Value Disclosures [Abstract] | ' | ||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | ' | ||||||
Carrying | Fair value | ||||||
value | |||||||
Total | Level 1 | Level 2 | Level 3 | ||||
At September 30, 2014 | $'M | $'M | $'M | $'M | $'M | ||
____________ | ____________ | ___________ | ___________ | ___________ | |||
Financial assets: | |||||||
Available-for-sale securities(1) | 15.2 | 15.2 | 15.2 | - | - | ||
Contingent consideration receivable (2) | 19.1 | 19.1 | - | - | 19.1 | ||
Foreign exchange contracts | 18.2 | 18.2 | - | 18.2 | - | ||
Financial liabilities: | |||||||
Foreign exchange contracts | 15.7 | 15.7 | - | 15.7 | - | ||
Contingent consideration payable(3) | 642 | 642 | - | - | 642 | ||
____________ | ____________ | ___________ | ___________ | ___________ | |||
Total | Level 1 | Level 2 | Level 3 | ||||
At December 31, 2013 | $'M | $'M | $'M | $'M | $'M | ||
____________ | ____________ | ___________ | ___________ | ___________ | |||
Financial assets: | |||||||
Available-for-sale securities(1) | 6.7 | 6.7 | 6.7 | - | - | ||
Contingent consideration receivable (2) | 36.1 | 36.1 | - | - | 36.1 | ||
Foreign exchange contracts | 4 | 4 | - | 4 | - | ||
Financial liabilities: | |||||||
Foreign exchange contracts | 2.8 | 2.8 | - | 2.8 | - | ||
Contingent consideration payable(3) | 1 | 405.9 | 405.9 | - | - | 405.9 | |
____________ | ____________ | ___________ | ___________ | ___________ | |||
(1) Available-for-sale securities are included within Investments in the consolidated balance sheet. | |||||||
(2) Contingent consideration receivable is included within Prepaid expenses and other current assets and Other non-current assets in the consolidated balance sheet. | |||||||
(3) Contingent consideration payable is included within Other current liabilities and Other non-current liabilities in the consolidated balance sheet. | |||||||
Assets Measured at Fair Value on a Recurring Basis Using Significant Unobervable Inputs (Level 3) | ' | ||||||
Contingent consideration receivable | |||||||
2014 | 2013 | ||||||
$'M | $'M | ||||||
____________ | ____________ | ||||||
Balance at January 1, | 36.1 | 38.3 | |||||
Initial recognition of contingent consideration receivable | 33.6 | - | |||||
Loss recognized in the income statement (within discontinued operations) due to change in fair value during the period | -33.6 | - | |||||
(Loss)/gain recognized in the income statement (within Gain on sale of product rights) due to change in fair value during the period | -4.1 | 14.6 | |||||
Reclassification of amounts to Other receivables within Other current assets | -14.9 | -13.9 | |||||
Amounts recorded to other comprehensive income (within foreign currency translation adjustments) | 2 | 0.6 | |||||
Balance at September 30, | 19.1 | 39.6 | |||||
Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobervable Inputs (Level 3) | ' | ||||||
Contingent consideration payable | |||||||
2014 | 2013 | ||||||
$'M | $'M | ||||||
____________ | ____________ | ||||||
Balance at January 1, | 405.9 | 136.4 | |||||
Initial recognition of contingent consideration payable | 226.7 | 451.4 | |||||
Change in fair value during the period with the corresponding adjustment recognized as a loss in the income statement (within Integration and acquisition costs) | 26.3 | 28.4 | |||||
Reclassification of amounts to Other current liabilities | -12.4 | -11.1 | |||||
Change in fair value during the period with corresponding adjustment to the associated intangible asset | 1.8 | -7.3 | |||||
Amounts recorded to other comprehensive income (within foreign currency translation adjustments) | -6.3 | - | |||||
Balance at September 30, | 642 | 597.8 | |||||
Fair Value Inputs, Assets Quantitative Information Table | ' | ||||||
Financial assets: | Fair Value at the Measurement Date | ||||||
At September 30, 2014 | Fair value | Valuation Technique | Significant unobservable Inputs | Range | |||
$'M | |||||||
____________ | ___________ | ___________ | ___________ | ||||
Contingent consideration receivable ("CCR") | 19.1 | Income approach (probability weighted discounted cash flow) | • Probability weightings applied to different sales scenarios • Future forecast consideration receivable based on contractual terms with purchaser • Assumed market participant discount rate | • 10 to 70% • $15 million to $120 million • 8% to 11.5% | |||
____________ | ____________ | ____________ | ____________ | ||||
Fair Value at the Measurement Date | |||||||
At September 30, 2014 | Fair value | Valuation Technique | Significant unobservable Inputs | Rate/date used | |||
$'M | |||||||
____________ | ___________ | ___________ | ___________ | ||||
SHP602 IPR&D intangible asset | $nil | Income approach (discounted cash flow) | • Probability of regulatory approval being obtained • Expected commercial launch date • Assumed market participant discount rate | • 11 to 15% • 2021 • 11.3% | |||
____________ | ____________ | ____________ | ____________ | ||||
Fair Value Inputs, Liabilities Quantitative Information Table | ' | ||||||
Financial liabilities: | Fair Value at the Measurement Date | ||||||
At September 30, 2014 | Fair value | Valuation Technique | Significant unobservable Inputs | Range | |||
$'M | |||||||
____________ | ___________ | ___________ | ___________ | ||||
Contingent consideration payable | 642 | Income approach (probability weighted discounted cash flow) | • Cumulative probability of milestones being achieved • Assumed market participant discount rate • Periods in which milestones are expected to be achieved • Forecast quarterly royalties payable on net sales of relevant products | • 4 to 95% • 0.8 to 11.8% • 2015 to 2030 • $2.1 to $7.6 million | |||
____________ | ____________ | ____________ | ____________ |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 9 Months Ended | ||||||
Sep. 30, 2014 | |||||||
Earnings Per Share [Abstract] | ' | ||||||
Schedule of Calculation of Numerator and Denominator in Earnings Per Share | ' | ||||||
2014 | 2013 | 2014 | 2013 | ||||
$’M | $’M | $’M | $’M | ||||
_________________ | _________________ | _________________ | _________________ | ||||
Income from continuing operations, net of taxes | 515.8 | 301.1 | 1,297.20 | 873 | |||
Loss from discontinued operations1 | -36.1 | -22.9 | -64 | -271.9 | |||
_________________ | _________________ | _________________ | _________________ | ||||
Numerator for basic earnings per share | 479.7 | 278.2 | 1,233.20 | 601.1 | |||
Interest on convertible bonds, net of tax | - | 7.6 | - | 22.7 | |||
_________________ | _________________ | _________________ | _________________ | ||||
Numerator for diluted earnings per share | 479.7 | 285.8 | 1,233.20 | 623.8 | |||
_________________ | _________________ | _________________ | _________________ | ||||
Schedule of Weighted Average Number of Shares | ' | ||||||
Weighted average number of shares: | |||||||
Millions | Millions | Millions | Millions | ||||
_________________ | _________________ | _________________ | _________________ | ||||
Basic 1 | 587.6 | 548.4 | 586.1 | 549.8 | |||
Effect of dilutive shares: | |||||||
Share based awards to employees 2 | 5 | 3.5 | 6 | 3.9 | |||
Convertible bonds 2.75% due 2014 3 | - | 33.8 | - | 33.8 | |||
_________________ | _________________ | _________________ | _________________ | ||||
Diluted | 592.6 | 585.7 | 592.1 | 587.5 | |||
_________________ | _________________ | _________________ | _________________ | ||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | ' | ||||||
3 months to | 3 months to | 9 months to | 9 months to | ||||
September 30, | September 30, | September 30, | September 30, | ||||
2014 | 2013 | 2014 | 2013 | ||||
No. of shares | No. of shares | No. of shares | No. of shares | ||||
Millions | Millions | Millions | Millions | ||||
_________________ | _________________ | _________________ | _________________ | ||||
Share based awards to employees1 | 0.3 | 0.5 | 0.3 | 4.5 | |||
_________________ | _________________ | _________________ | _________________ |
Segmental_Reporting_Tables
Segmental Reporting (Tables) | 9 Months Ended | ||
Sep. 30, 2014 | |||
Segment Reporting [Abstract] | ' | ||
Schedule of Segment Revenue from Major Products | ' | ||
9 months to, | September 30, | September 30, | |
2014 | 2013 | ||
$’M | $’M | ||
___________ | ___________ | ||
VYVANSE | 1,065.60 | 897.9 | |
LIALDA/MEZAVANT | 449.1 | 379.9 | |
ELAPRASE | 449.5 | 392.6 | |
CINRYZE | 360.6 | - | |
REPLAGAL | 380.7 | 336.6 | |
FIRAZYR | 262.3 | 153.8 | |
INTUNIV | 279 | 248.9 | |
VPRIV | 273 | 251.9 | |
ADDERALL XR | 280.2 | 293.5 | |
PENTASA | 213.8 | 215.2 | |
FOSRENOL | 136.2 | 136.3 | |
XAGRID | 82.1 | 74.1 | |
Other product sales | 97.6 | 96.4 | |
____________ | ____________ | ||
Total product sales | 4,329.70 | 3,477.10 | |
____________ | ____________ |
Business_Combinations_ViroPhar
Business Combinations (ViroPharrma) (Details) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | |||||||||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 24, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Jan. 24, 2014 | Jan. 24, 2014 | Jan. 24, 2014 | Jan. 24, 2014 |
Viropharma | Viropharma | Viropharma | Viropharma | Viropharma | Viropharma | Viropharma | Viropharma | Viropharma | |||||||
Minimum | Maximum | Currently Marketed Products | IPR&D | ||||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of voting interests acquired | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Cash consideration paid | ' | ' | ' | ' | ' | ' | $3,997 | ' | ' | ' | ' | ' | ' | ' | ' |
Current assets: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | ' | ' | ' | ' | ' | ' | 232.6 | ' | ' | ' | ' | ' | ' | ' | ' |
Short term investments | ' | ' | ' | ' | ' | ' | 57.8 | ' | ' | ' | ' | ' | ' | ' | ' |
Accounts receivable | ' | ' | ' | ' | ' | ' | 52.2 | ' | ' | ' | ' | ' | ' | ' | ' |
Inventories | ' | ' | ' | ' | ' | ' | 203.6 | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred tax assets | ' | ' | ' | ' | ' | ' | 100.2 | ' | ' | ' | ' | ' | ' | ' | ' |
Purchased call option | ' | ' | ' | ' | ' | ' | 346.7 | ' | ' | ' | ' | ' | ' | ' | ' |
Other current assets | ' | ' | ' | ' | ' | ' | 42.9 | ' | ' | ' | ' | ' | ' | ' | ' |
Total current assets | ' | ' | ' | ' | ' | ' | 1,036 | ' | ' | ' | ' | ' | ' | ' | ' |
Non-current assets: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property, plant and equipment | ' | ' | ' | ' | ' | ' | 24.7 | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill | 2,373.70 | 621.3 | 2,373.70 | 621.3 | 624.6 | 644.5 | 1,528.80 | ' | ' | ' | ' | ' | ' | ' | ' |
Other intangible assets, net | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,320 | 530 |
Other non-current assets | ' | ' | ' | ' | ' | ' | 10.4 | ' | ' | ' | ' | ' | ' | ' | ' |
Total assets | ' | ' | ' | ' | ' | ' | 5,449.90 | ' | ' | ' | ' | ' | ' | ' | ' |
Current liabilities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accounts payable and other current liabilities | ' | ' | ' | ' | ' | ' | 109.5 | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible bond | ' | ' | ' | ' | ' | ' | 551.4 | ' | ' | ' | ' | ' | ' | ' | ' |
Non-current liabilities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred tax liabilities | ' | ' | ' | ' | ' | ' | 695.9 | ' | ' | ' | ' | ' | ' | ' | ' |
Other non-current liabilities | ' | ' | ' | ' | ' | ' | 96.1 | ' | ' | ' | ' | ' | ' | ' | ' |
Total liabilities | ' | ' | ' | ' | ' | ' | 1,452.90 | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of identified assets acquired and liabilities assumed | ' | ' | ' | ' | ' | ' | 3,997 | ' | ' | ' | ' | ' | ' | ' | ' |
Pro Forma Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Post acquisition revenues included in consolidated statement of income | ' | ' | ' | ' | ' | ' | ' | 154.5 | ' | 388.9 | ' | ' | ' | ' | ' |
Post acquisition pre-tax losses included in consolidated statement of income | ' | ' | ' | ' | ' | ' | ' | 3.7 | ' | 82.9 | ' | ' | ' | ' | ' |
Post acquisition amortization of intangible assets included in consolidated statement of income | ' | ' | ' | ' | ' | ' | ' | 28.5 | ' | 78.6 | ' | ' | ' | ' | ' |
Post acquisition unwind of inventory fair value adjustment included in consolidated statement of income | ' | ' | 90.6 | 0 | ' | ' | ' | 18.1 | ' | 90.6 | ' | ' | ' | ' | ' |
Post acquisition integration costs included in consolidated statement of income | ' | ' | ' | ' | ' | ' | ' | 27.1 | ' | 87.8 | ' | ' | ' | ' | ' |
Weighted average amortization period of acquired amortizable intangible assets | ' | ' | ' | ' | ' | ' | '22 years | ' | ' | ' | ' | ' | ' | ' | ' |
Discount rate used in determining fair value of acquired in process research and development, low rate | ' | ' | ' | ' | ' | ' | 9.50% | ' | ' | ' | ' | ' | ' | ' | ' |
Discount rate used in determining fair value of acquired in process research and development, high rate | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Integration and acquisition costs | $37.10 | $18.40 | $155.80 | $39.90 | ' | ' | ' | $27.10 | $0 | $122.10 | $0 | ' | ' | ' | ' |
Estimated useful life of intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '10 years | '23 years | ' | ' |
Business_Combinations_Pro_Form
Business Combinations (Pro Forma Information) (Details) (USD $) | 9 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Pro Forma Information | ' | ' |
Revenues | $4,477.80 | $3,932.20 |
Net income from continuing operations | 1,297 | 642.2 |
Net income from continuing operations per share - basic | $2.21 | $1.17 |
Net income from continuing operations per share - diluted | $2.19 | $1.09 |
Pro Forma Data Adjustments | ' | ' |
Decrease to net income to reflect the additional depreciation expense related to the fair value adjustment to property, plant and equipment acquired | -0.1 | -0.4 |
An adjustment to increase amortization of intangible assets | -7.3 | -58.4 |
Increase/(decrease) to net income to reflect acquisition related costs | 23.2 | -33.8 |
Decrease to net income to reflect the additional interest expense | 0 | -36.1 |
Increase/(decrease) to net income to reflect the fair value adjustment to acquisition date inventory. | $57.80 | ($57.80) |
Business_Combinations_Fibrotec
Business Combinations (Fibrotech, Lumena and Other Acquisitions) (Details) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | ||||||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Jul. 04, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Jun. 11, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2014 |
Fibrotech | Fibrotech | Fibrotech | Fibrotech | Lumena | Lumena | Lumena | Lumena | Lumena | Bikam | Other Acquisitions | |||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of voting interests acquired | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' |
Acquisition-date fair value of consideration | ' | ' | ' | ' | $122.60 | ' | ' | ' | $464.30 | ' | ' | ' | ' | ' | $17.90 |
Cash consideration paid | ' | ' | ' | ' | 75.6 | ' | ' | ' | 300.3 | ' | ' | ' | ' | ' | 12.1 |
Fair value of contingent consideration payable | ' | ' | ' | ' | 47 | ' | ' | ' | 164 | ' | ' | ' | ' | 5.8 | ' |
Maximum amount of contingent cash consideration | ' | ' | ' | ' | 482.5 | ' | ' | ' | 265 | ' | ' | ' | ' | 92 | ' |
Purchase Price Allocation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
IPR&D | ' | ' | ' | ' | 11 | ' | ' | ' | 467 | ' | ' | ' | ' | ' | ' |
Net non-current liabilities assumed (including deferred tax liabilities) | ' | ' | ' | ' | ' | ' | ' | ' | 174.2 | ' | ' | ' | ' | ' | ' |
Net current assets assumed | ' | ' | ' | ' | 1.4 | ' | ' | ' | 47.6 | ' | ' | ' | ' | ' | 1 |
Goodwill arising on business acquired | ' | ' | 1,773.80 | 170.3 | 110.2 | ' | ' | ' | 123.9 | ' | ' | ' | ' | ' | 12.1 |
Cash and cash equivalents | ' | ' | ' | ' | ' | ' | ' | ' | 46.3 | ' | ' | ' | ' | ' | ' |
Non-current assets assumed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.8 |
Integration and acquisition costs | $37.10 | $18.40 | $155.80 | $39.90 | ' | $1.30 | $2.10 | $0 | ' | $4.20 | $0 | $5.70 | $0 | ' | ' |
Divestment_of_Product_Rights_D
Divestment of Product Rights (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
CALCICHEW | ' | ' | ' | ' |
Product Information [Line Items] | ' | ' | ' | ' |
Cash consideration received on sale of product rights | $43.50 | ' | $43.50 | ' |
Gain (net of taxes) on sale of product righs | ' | ' | 43.5 | ' |
Total | ' | ' | ' | ' |
Product Information [Line Items] | ' | ' | ' | ' |
Gain (net of taxes) on sale of product righs | 46 | 3.6 | 86.2 | 14.6 |
Divestment of VANCOCIN, ESTRACT and EXPUTEX product rights | ' | ' | ' | ' |
Product Information [Line Items] | ' | ' | ' | ' |
Cash consideration received on sale of product rights | 64.9 | ' | 64.9 | ' |
Gain (net of taxes) on sale of product righs | $32.90 | ' | ' | ' |
Reorganization_Costs_Details
Reorganization Costs (Details) (USD $) | 3 Months Ended | 9 Months Ended | 17 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 |
Reorganization Costs | ' | ' | ' | ' | ' |
Reorganization costs | $28.20 | $12 | $123.40 | $47.20 | ' |
Reorganization cost incurred to date | ' | ' | ' | ' | 188 |
Restructuring Reserve (Roll Forward) | ' | ' | ' | ' | ' |
Reorganization Reserve Opening liability | ' | ' | 24.8 | ' | ' |
Amounts charged to re-organization | 28.2 | 12 | 123.4 | 47.2 | ' |
Reorganization liability, Paid and Utilized | ' | ' | -144.8 | ' | ' |
Reorganization Reserve Closing liability | 3.4 | ' | 3.4 | ' | 3.4 |
Reorganization liability, Current | 3.4 | ' | 3.4 | ' | 3.4 |
Involuntary termination benefits | ' | ' | ' | ' | ' |
Reorganization Costs | ' | ' | ' | ' | ' |
Reorganization costs | ' | ' | 104.1 | ' | ' |
Restructuring Reserve (Roll Forward) | ' | ' | ' | ' | ' |
Reorganization Reserve Opening liability | ' | ' | 15.3 | ' | ' |
Amounts charged to re-organization | ' | ' | 104.1 | ' | ' |
Reorganization liability, Paid and Utilized | ' | ' | -116.5 | ' | ' |
Reorganization Reserve Closing liability | 2.9 | ' | 2.9 | ' | 2.9 |
Other reorganization costs | ' | ' | ' | ' | ' |
Reorganization Costs | ' | ' | ' | ' | ' |
Reorganization costs | ' | ' | 19.3 | ' | ' |
Restructuring Reserve (Roll Forward) | ' | ' | ' | ' | ' |
Reorganization Reserve Opening liability | ' | ' | 9.5 | ' | ' |
Amounts charged to re-organization | ' | ' | 19.3 | ' | ' |
Reorganization liability, Paid and Utilized | ' | ' | -28.3 | ' | ' |
Reorganization Reserve Closing liability | 0.5 | ' | 0.5 | ' | 0.5 |
"One Shire" business re-alignment | ' | ' | ' | ' | ' |
Reorganization Costs | ' | ' | ' | ' | ' |
Reorganizations costs, expected costs | ' | ' | $27 | ' | ' |
Integration_and_acquisition_co1
Integration and acquisition costs (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Business Acquisition [Line Items] | ' | ' | ' | ' |
Integration and acquisition costs | $37.10 | $18.40 | $155.80 | $39.90 |
Acquisition and Integration Costs, Gross Amount | ' | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' | ' |
Integration and acquisition costs | 32.2 | ' | 129.5 | ' |
Change in fair value of contingent consideration | $4.90 | ' | $26.30 | ' |
Accounts_Receivable_Net_Detail
Accounts Receivable, Net (Details) (USD $) | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
Provision for discounts and doubtful accounts | ' | ' | ' |
As at January 1, | $47.90 | $41.70 | ' |
Provision charged to operations | 228.1 | 225.3 | ' |
Provision utilization | -229.8 | -215.4 | ' |
As at September 30, | 46.2 | 51.6 | ' |
Accounts receivable, net | 1,079.30 | ' | 961.2 |
Accounts receivable related to royalty income | $36 | ' | $37.80 |
Inventories_Details
Inventories (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Schedule of Inventory | ' | ' |
Finished goods | $145 | $156.60 |
Work-in-progress | 288.3 | 240.5 |
Raw materials | 115.6 | 58.2 |
Total inventories | $548.90 | $455.30 |
Results_of_discontinued_operat2
Results of discontinued operations (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Results of discontinued operations | ' | ' | ' | ' |
Loss from discontinued operations, net of taxes | ($36.10) | ($22.90) | ($64) | ($271.90) |
Goodwill impairment charge | 0 | 0 | 0 | 7.1 |
DERMAGRAFT | ' | ' | ' | ' |
Results of discontinued operations | ' | ' | ' | ' |
Product Revenues | 0 | 23.9 | 1.9 | 64.7 |
Loss from discontinuing operations before income taxes | -37.9 | -42 | -81.8 | -323.3 |
Income tax expense from discontinued operations | 1.8 | 19.1 | 17.8 | 51.4 |
Loss from discontinued operations, net of taxes | -36.1 | -22.9 | -64 | -271.9 |
Continung operations | ' | ' | ' | ' |
Results of discontinued operations | ' | ' | ' | ' |
Goodwill impairment charge | ' | ' | ' | 7.1 |
Discontinued operations | ' | ' | ' | ' |
Results of discontinued operations | ' | ' | ' | ' |
Goodwill impairment charge | ' | ' | ' | 191.8 |
Gain (loss) on change in the fair value of divestiture contingent consideration receivable | ' | ' | -33.6 | 0 |
Discontinued operations | DERMAGRAFT | ' | ' | ' | ' |
Results of discontinued operations | ' | ' | ' | ' |
Goodwill impairment charge | ' | ' | ' | 191.8 |
Discontinued operations | Organogenesis | ' | ' | ' | ' |
Results of discontinued operations | ' | ' | ' | ' |
Gain (loss) on change in the fair value of divestiture contingent consideration receivable | $33.60 | ' | $33.60 | ' |
Prepaid_Expenses_and_Other_Cur2
Prepaid Expenses and Other Current Assets (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Prepaid Expense and Other Assets, Current [Abstract] | ' | ' |
Prepaid expenses | $53.20 | $29.40 |
Income tax receivable | 264.6 | 177.4 |
Value added taxes receivable | 24.1 | 14.5 |
Other current assets | 60.5 | 41.7 |
Prepaid expenses and other current assets, total | $402.40 | $263 |
Goodwill_Details
Goodwill (Details) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Goodwill [Line Items] | ' | ' |
Goodwill arising on business acquired | $1,773.80 | $170.30 |
Goodwill [Roll Forward] | ' | ' |
As at January 1, | 624.6 | 644.5 |
Acquisition | 1,773.80 | 170.3 |
Goodwill impairment charge | ' | -198.9 |
Foreign currency translation | -24.7 | 5.4 |
As at September 30, | 2,373.70 | 621.3 |
Continung operations | ' | ' |
Goodwill [Roll Forward] | ' | ' |
Goodwill impairment charge | 0 | -7.1 |
Discontinued operations | ' | ' |
Goodwill [Roll Forward] | ' | ' |
Goodwill impairment charge | $0 | ($191.80) |
Other_Intangible_Assets_Net_De
Other Intangible Assets, Net (Details) (USD $) | 9 Months Ended | 9 Months Ended | 9 Months Ended | 3 Months Ended | ||||||||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Jun. 30, 2014 |
Currently Marketed Products | Currently Marketed Products | Other Intangible Assets | Other Intangible Assets | IPR&D | IPR&D | SHP602 IPR&D | SHP613 | |||||
Intangible Assets (Excluding Goodwill) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortized intangible assets | $4,880.60 | ' | $2,619.40 | ' | $4,850.60 | $2,573.30 | $30 | $46.10 | ' | ' | ' | ' |
Unamortized intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | 1,768.90 | 951.5 | ' | ' |
Other intangible assets, gross | 6,649.50 | ' | 3,570.90 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Less: Accumulated amortization | -1,422.10 | ' | -1,258.30 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other intangible assets, net | 5,227.40 | 2,976 | 2,312.60 | 2,388.10 | ' | ' | ' | ' | ' | ' | ' | ' |
Other Disclosures | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Impairment charges | 188 | 19.9 | ' | ' | ' | ' | ' | ' | ' | ' | 166 | 22 |
Acquisitions | 3,332.80 | 733.2 | ' | ' | 2,320 | ' | ' | ' | 997 | ' | ' | ' |
Estimates of Annual Amortization | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2015 | 228 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2016 | 228 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2017 | 228 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2018 | 228 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2019 | $228 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other_Intangible_Assets_Net_Ro
Other Intangible Assets, Net (Roll Forward) (Details) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Other Intangible Assets Roll Forward | ' | ' |
As at January 1, | $2,312.60 | $2,388.10 |
Acquisitions | 3,332.80 | 733.2 |
Divestment on non-core product rights | -17.3 | 0 |
Impairment charges | -188 | -19.9 |
Foreign currency translation | -30.8 | 10.7 |
As at September 30, | 5,227.40 | 2,976 |
Continung operations | ' | ' |
Other Intangible Assets Roll Forward | ' | ' |
Amortization charged | -181.9 | -106.5 |
DERMAGRAFT | Discontinued operations | ' | ' |
Other Intangible Assets Roll Forward | ' | ' |
Amortization charged | $0 | ($29.60) |
Accounts_Payable_and_Accrued_E2
Accounts Payable and Accrued Expenses (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Accounts Payable and Accrued Liabilities, Current [Line Items] | ' | ' |
Trade accounts payable and accrued purchases | $236.70 | $202.60 |
Accrued rebates - Medicaid | 554.7 | 549.1 |
Accrued rebates - Managed care | 287.8 | 258.1 |
Sales return reserve | 100.6 | 98.8 |
Accrued bonuses | 116.8 | 130.9 |
Accrued employee compensation and benefits payable | 100.2 | 79.4 |
R&D accruals | 76.3 | 69.6 |
Provisions for litigation losses and other claims | 8.9 | 71.7 |
Other accrued expenses | 243.8 | 228.2 |
Accounts payable and accrued expenses, total | $1,725.80 | $1,688.40 |
Other_Current_Liabilities_Deta
Other Current Liabilities (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Other Liabilities, Current [Abstract] | ' | ' |
Income taxes payable | $54.30 | $69 |
Value added taxes | 22.1 | 15.8 |
Contingent consideration payable | 156.4 | 12.9 |
Other current liabilities | 43.8 | 21.8 |
Other current liabilities, total | $276.60 | $119.50 |
Borrowings_Details
Borrowings (Details) (USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2014 |
contract | |
Line of Credit Facility [Line Items] | ' |
Facility agreement initiation date | 11-Nov-13 |
Facilitiy agreement total amount | $2,600 |
Number of term loan facilities | 1 |
Term loan | ' |
Line of Credit Facility [Line Items] | ' |
Term loan facility | 850 |
Facility amount outstanding | 850 |
Term loan facilitly two | ' |
Line of Credit Facility [Line Items] | ' |
Facility agreement expiration date | 11-Nov-15 |
Revised facility | ' |
Line of Credit Facility [Line Items] | ' |
Facilitiy agreement total amount | 850 |
Revised facility | Term loan | ' |
Line of Credit Facility [Line Items] | ' |
Long Term Borrowings | 850 |
Revolving Credit Facility | ' |
Line of Credit Facility [Line Items] | ' |
Facility agreement initiation date | 23-Nov-10 |
Facilitiy agreement total amount | 1,200 |
Facility agreement expiration date | 23-Nov-15 |
Swingline Facility | $250 |
Other_Noncurrent_Liabilities_D
Other Non-current Liabilities (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Other Liabilities, Noncurrent [Abstract] | ' | ' |
Income taxes payable | $180.30 | $115.70 |
Deferred revenue | 7.7 | 9.8 |
Deferred rent | 9.6 | 11.3 |
Contingent consideration payable | 485.6 | 393 |
Other non-current liabilities | 88.4 | 58.7 |
Other noncurrent liabilities, total | $771.60 | $588.50 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Leases, and LC and Guarantees ) (Details) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Future Minimum Lease Payments under Operating Leases | ' | ' |
2014 | $10.70 | ' |
2015 | 43.9 | ' |
2016 | 31.4 | ' |
2017 | 24 | ' |
2018 | 18.7 | ' |
2019 | 14.5 | ' |
Thereafter | 100.5 | ' |
Future minimum lease payments, total | 243.7 | ' |
Operating Leases, Rent Expense | ' | ' |
Lease and rental expense | 29.3 | 35.5 |
Letters of credit and guarantees | ' | ' |
Irrevocable standby letters of credit and guarantees | $50 | ' |
Commitments_and_Contingencies_2
Commitments and Contingencies (Collaborative Arrangements) (Details) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
In-licensing Arrangement | Stategic licensing and collaboration agreement ArmaGen | ' | ' |
In-licensing arrangements | ' | ' |
Upfront payment | $15 | ' |
Maximum conditional obligation | 208 | ' |
Out-licensing Arrangement | ' | ' |
Out-licensing arrangements | ' | ' |
Milestone payments received | 1 | 3 |
Out-licensing Arrangement | Other Revenues | ' | ' |
Out-licensing arrangements | ' | ' |
Milestone revenues recognized | 3.6 | 4.5 |
Out-licensing Arrangement | Product Sales | ' | ' |
Out-licensing arrangements | ' | ' |
Milestone revenues recognized | 39.8 | 43.8 |
Out-licensing Arrangement | Development Milestone | ' | ' |
Out-licensing arrangements | ' | ' |
Maximum milestone payment receivable | 39 | ' |
Out-licensing Arrangement | Sales Milestone | ' | ' |
Out-licensing arrangements | ' | ' |
Maximum milestone payment receivable | $71.50 | ' |
Commitments_and_Contingencies_3
Commitments and Contingencies (Commitments and Loss Contingency) (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2012 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | Subpoena related to ADDERALL XR, DAYTRANA and VYVANSE | Subpoena related to ADDERALL XR, DAYTRANA and VYVANSE | Louisiana Compaint related to ADDERALL, ADDERALL XR , DAYTRANA, VYVANSE and INTUNIV | Clinical Testing | Clinical Testing | Contract Manufacturing | Contract Manufacturing | Other Purchasing Commitment | Other Purchasing Commitment | Investment Commitment | Investment Commitment | Capital Commitment | Capital Commitment | ||
Commitment [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commitment amount | ' | ' | ' | ' | ' | $457 | $346 | $419 | $109 | $297 | $128 | $19 | $14 | $6 | $12 |
Commitments expected to be paid in next year | ' | ' | ' | ' | ' | ' | ' | 89 | ' | 273 | ' | ' | ' | ' | ' |
Legal Matters [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Provisions for litigation loss, insurance claims and other disputes | 10.2 | 72.7 | ' | 57.5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Litigation Settlement, Amount | ' | ' | $56.50 | ' | $2.90 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Details) (USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2014 |
Accumulated Other Comprehensive Income (Loss) | ' |
As at January 1, 2014 | $110.20 |
Other comprehensive income, net of tax | -79.4 |
As at September 30, 2014 | 30.8 |
Foreign currency translation adjustment | ' |
Accumulated Other Comprehensive Income (Loss) | ' |
As at January 1, 2014 | 110.4 |
Other Comprehensive income before reclassification | -75.9 |
Gain transferred to the income statement (within Other income/(expense),net) on disposal of available-for-sale-securities | 0 |
Other comprehensive income, net of tax | -75.9 |
As at September 30, 2014 | 34.5 |
Unrealized holding gain/(loss) on available-for-sale securities | ' |
Accumulated Other Comprehensive Income (Loss) | ' |
As at January 1, 2014 | -0.2 |
Other Comprehensive income before reclassification | 5.6 |
Gain transferred to the income statement (within Other income/(expense),net) on disposal of available-for-sale-securities | -9.1 |
Other comprehensive income, net of tax | -3.5 |
As at September 30, 2014 | -3.7 |
Accumulated other comprehensive income | ' |
Accumulated Other Comprehensive Income (Loss) | ' |
As at January 1, 2014 | 110.2 |
Other Comprehensive income before reclassification | -70.3 |
Gain transferred to the income statement (within Other income/(expense),net) on disposal of available-for-sale-securities | -9.1 |
Other comprehensive income, net of tax | -79.4 |
As at September 30, 2014 | $30.80 |
Financial_Instruments_Interest
Financial Instruments (Interest Rate and Credit Risks) (Details) (USD $) | 9 Months Ended | 12 Months Ended | 9 Months Ended | ||||
In Millions, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 |
contract | Product Sales | Government-owned or Supported Healthcare Providers | Government-owned or Supported Healthcare Providers | Term loan | Revolving Credit Facility | ||
Italy | Spain | ||||||
Interest rate risk | ' | ' | ' | ' | ' | ' | ' |
Average interest rate received on cash and liquid investments | 'less than 1% per annum. | ' | ' | ' | ' | ' | ' |
Line of Credit Facility [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Term loan facility | ' | ' | ' | ' | ' | $850 | ' |
Facilitiy agreement total amount | 2,600 | ' | ' | ' | ' | ' | 1,200 |
Interest rate risk exposure | 'The Company has evaluated the interest rate risk on the RCF and the Facilities Agreement and considers the risks associated with floating interest rates on the instruments as appropriate. A hypothetical one percentage point increase or decrease in the interest rates applicable to drawings under the RCF and the Facilities Agreement at September 30, 2014 would increase or decrease interest expense by a maximum of $8.5 million per annum. | ' | ' | ' | ' | ' | ' |
Facility amount outstanding | ' | ' | ' | ' | ' | 850 | ' |
Accounts Receivable | ' | ' | ' | ' | ' | ' | ' |
Number of major external customers | ' | 3 | ' | ' | ' | ' | ' |
Concentration risk percentage | ' | ' | 52.00% | ' | ' | ' | ' |
Accounts receivable received | ' | ' | ' | $89 | $75.70 | ' | ' |
Financial_Instruments_Foreign_
Financial Instruments (Foreign Exchange Risk and Its Classification on Balance Sheet) (Details) (USD $) | 9 Months Ended | |||||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 |
Foreign Exchange Contract | Foreign Exchange Contract | Foreign Exchange Contract | Foreign Exchange Contract | Foreign Exchange Contract | ||
contract | Prepaid expenses and other current assets | Prepaid expenses and other current assets | Other current liabilities | Other current liabilities | ||
Derivatives, Fair Value | ' | ' | ' | ' | ' | ' |
Assets | ' | ' | $18.20 | $4 | ' | ' |
Liabilities | ' | ' | ' | ' | 15.7 | 2.8 |
Net derivative fair value assets | ' | 10.9 | ' | ' | ' | ' |
Net derivative fair value liabilities | ' | 8.4 | ' | ' | ' | ' |
Potential effect of rights of set off associated with the foreign exchange contracts | ' | $7.30 | ' | ' | ' | ' |
Number of swap and forward foreign exchange contracts outstanding | ' | 45 | ' | ' | ' | ' |
Swaps and forward contracts maturity | '90 days | ' | ' | ' | ' | ' |
Financial_Instruments_Foreign_1
Financial Instruments (Foreign Exchange Risk and Its Effect on Income Statement) (Details) (Foreign Exchange Contract, Other income, net, USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Foreign Exchange Contract | Other income, net | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' |
Amount of net income (loss) recognized in income | $15.90 | ($3.80) |
Fair_Value_Measurement_Assets_
Fair Value Measurement (Assets and Liabilities That are Measured and Not Measured at Fair Value on a Recurring Basis) (Details) (Recurring Basis, USD $) | Sep. 30, 2014 | Dec. 31, 2013 | ||
In Millions, unless otherwise specified | ||||
Carrying value | ' | ' | ||
Financial assets: | ' | ' | ||
Available-for-sale securities | $15.20 | [1] | $6.70 | [1] |
Contingent consideration receivable | 19.1 | [2] | 36.1 | [2] |
Foreign exchange contracts, asset | 18.2 | 4 | ||
Financial liabilities: | ' | ' | ||
Foreign exchange contracts, liability | 15.7 | 2.8 | ||
Contingent consideration payable | 642 | [3] | 405.9 | [3] |
Estimated fair value | ' | ' | ||
Financial assets: | ' | ' | ||
Available-for-sale securities | 15.2 | [1] | 6.7 | [1] |
Contingent consideration receivable | 19.1 | [2] | 36.1 | [2] |
Foreign exchange contracts, asset | 18.2 | 4 | ||
Financial liabilities: | ' | ' | ||
Foreign exchange contracts, liability | 15.7 | 2.8 | ||
Contingent consideration payable | 642 | [3] | 405.9 | [3] |
Level 1 | ' | ' | ||
Financial assets: | ' | ' | ||
Available-for-sale securities | 15.2 | [1] | 6.7 | [1] |
Contingent consideration receivable | 0 | [2] | 0 | [2] |
Foreign exchange contracts, asset | 0 | 0 | ||
Financial liabilities: | ' | ' | ||
Foreign exchange contracts, liability | 0 | 0 | ||
Contingent consideration payable | 0 | [3] | 0 | [3] |
Level 2 | ' | ' | ||
Financial assets: | ' | ' | ||
Available-for-sale securities | 0 | [1] | 0 | [1] |
Contingent consideration receivable | 0 | [2] | 0 | [2] |
Foreign exchange contracts, asset | 18.2 | 4 | ||
Financial liabilities: | ' | ' | ||
Foreign exchange contracts, liability | 15.7 | 2.8 | ||
Contingent consideration payable | 0 | [3] | 0 | [3] |
Level 3 | ' | ' | ||
Financial assets: | ' | ' | ||
Available-for-sale securities | 0 | [1] | 0 | [1] |
Contingent consideration receivable | 19.1 | [2] | 36.1 | [2] |
Foreign exchange contracts, asset | 0 | 0 | ||
Financial liabilities: | ' | ' | ||
Foreign exchange contracts, liability | 0 | 0 | ||
Contingent consideration payable | $642 | [3] | $405.90 | [3] |
[1] | Available-for-sale securities are included within Investments in the consolidated balance sheet. | |||
[2] | Contingent consideration receivable is included within Prepaid expenses and other current assets and Other non-current assets in the consolidated balance sheet. | |||
[3] | Contingent consideration payable is included within Other current liabilities and Other non-current liabilities in the consolidated balance sheet. |
Fair_Value_Measurement_Assets_1
Fair Value Measurement (Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs) (Details) (USD $) | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
Change in the Fair Value of Contigent Consideration Receivable | ' | ' | ' |
Balance at beginning of period | $36.10 | $38.30 | ' |
Initial recognition of contingent consideration receivable | 33.6 | 0 | ' |
(Loss)/gain recognized in the income statement (within Gain on sale of product rights) due to change in fair value during the period | -4.1 | 14.6 | ' |
Reclassification of amounts due to Other receivables within Other current assets | -14.9 | -13.9 | ' |
Amounts recorded to other comprehensive income (within foreign currency translation adjustments) | 2 | 0.6 | ' |
Balance at end of period | 19.1 | 39.6 | ' |
Change in the Fair Value of Contigent Consideration Payable | ' | ' | ' |
Balance at beginning of period | 405.9 | 136.4 | ' |
Initial recognition of contingent consideration payable | 226.7 | 451.4 | ' |
Change in fair value during the period with the corresponding adjustment recognized as a gain/(loss) in the income statement (within Integration and acquisition costs) | 26.3 | 28.4 | ' |
Reclassification of amounts to Other current liabilities | -12.4 | -11.1 | ' |
Change in fair value during the period with corresponding adjustment to the associated intangible asset | 1.8 | -7.3 | ' |
Amounts recorded to other comprehensive income (within foreign currency translation adjustments) | -6.3 | 0 | ' |
Balance at end of period | 642 | 597.8 | ' |
Contingent consideration payable, current (within other current liabilities) | 156.4 | ' | 12.9 |
Contingent consideration payable, non-current (within other non-current liabilities) | 485.6 | ' | 393 |
Contingent Consideration Payable | ' | ' | ' |
Change in the Fair Value of Contigent Consideration Payable | ' | ' | ' |
Contingent consideration payable, current (within other current liabilities) | 156.4 | ' | ' |
Contingent consideration payable, non-current (within other non-current liabilities) | 485.6 | ' | ' |
Discontinued operations | ' | ' | ' |
Change in the Fair Value of Contigent Consideration Receivable | ' | ' | ' |
Gain (loss) on change in the fair value of divestiture contingent consideration receivable | ($33.60) | $0 | ' |
Fair_Value_Measurement_Quantit
Fair Value Measurement (Quantitative Information About Recurring and Non-recurring Level 3 Fair Value Measurements) (Details) (USD $) | 9 Months Ended | 3 Months Ended | 9 Months Ended | 9 Months Ended | |||||||||||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Mar. 31, 2014 | Jun. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 |
SHP602 IPR&D | SHP613 | Recurring Basis | Recurring Basis | Recurring Basis | Recurring Basis | Recurring Basis | Recurring Basis | Nonrecurring Basis | Nonrecurring Basis | Nonrecurring Basis | Nonrecurring Basis | Nonrecurring Basis | |||
Contingent Consideration Payable | Contingent Consideration Payable | Contingent Consideration Payable | Contingent Consideration Receivable | Contingent Consideration Receivable | Contingent Consideration Receivable | SHP602 IPR&D | SHP613 | Income approach (discounted cash flow) | Income approach (discounted cash flow) | Income approach (discounted cash flow) | |||||
Minimum | Maximum | Income approach (probability weighted discounted cash flow) | Income approach (probability weighted discounted cash flow) | Income approach (probability weighted discounted cash flow) | Income approach (probability weighted discounted cash flow) | SHP602 IPR&D | Minimum | Maximum | |||||||
Minimum | Maximum | SHP602 IPR&D | SHP602 IPR&D | ||||||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Assets | ' | ' | ' | ' | ' | ' | ' | $19.10 | ' | ' | $0 | $0 | ' | ' | ' |
Liabilities | ' | ' | ' | ' | ' | ' | 642 | ' | ' | ' | ' | ' | ' | ' | ' |
Fair Value Inputs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Probability weightings applied to different sales scenarios | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | 70.00% | ' | ' | ' | ' | ' |
Future forecast consideration receivable based on contractual terms with purchaser | ' | ' | ' | ' | ' | ' | ' | ' | 15 | 120 | ' | ' | ' | ' | ' |
Assumed market participant discount rate | ' | ' | ' | ' | 0.80% | 11.80% | ' | ' | 8.00% | 11.50% | ' | ' | 11.30% | ' | ' |
Cumulative probability of milestones being achieved | ' | ' | ' | ' | 4.00% | 95.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Periods in which milestones are expected to be achieved | ' | ' | ' | ' | '2015 | '2030 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Forecast quarterly royalties payable on net sales of relevant products | ' | ' | ' | ' | 2.1 | 7.6 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Probability of regulatory approval being obtained | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11.00% | 15.00% |
Expected commercial launch date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '2021 | ' | ' |
Impairment of intangible assets | $188 | $19.90 | $166 | $22 | ' | ' | ' | ' | ' | ' | $166 | $22 | ' | ' | ' |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||||
Schedule of Calculation of Numerator and Denominator in Earnings Per Share | ' | ' | ' | ' | ||||
Income from continuing operations, net of taxes | $515.80 | $301.10 | $1,297.20 | $873 | ||||
Loss from discontinued operations, net of taxes | -36.1 | -22.9 | -64 | -271.9 | ||||
Net income | 479.7 | 278.2 | 1,233.20 | 601.1 | ||||
Interest on convertible bonds, net of tax (in USD) | 0 | 7.6 | 0 | 22.7 | ||||
Numerator for diluted earnings per share (in USD) | $479.70 | $285.80 | $1,233.20 | $623.80 | ||||
Schedule of Weighted Average Number of Shares | ' | ' | ' | ' | ||||
Basic (in shares) | 587.6 | [1] | 548.4 | [1] | 586.1 | [1] | 549.8 | [1] |
Effect of dilutive shares: | ' | ' | ' | ' | ||||
Share based awards to employees | 5 | [2] | 3.5 | [2] | 6 | [2] | 3.9 | [2] |
Convertible bonds 2.75% due 2014 | 0 | [3] | 33.8 | [3] | 0 | [3] | 33.8 | [3] |
Diluted (in shares) | 592.6 | 585.7 | 592.1 | 587.5 | ||||
Share Awards | ' | ' | ' | ' | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' | ||||
Antidilutive securities excluded from computation of earnings per share | 0.3 | [4] | 0.5 | [4] | 0.3 | [4] | 4.5 | [4] |
[1] | Excludes shares purchased by the EBT and presented by Shire as treasury stock | |||||||
[2] | . Calculated using the treasury stock method | |||||||
[3] | Calculated using the bif convertedb method | |||||||
[4] | Certain stock options have been excluded from the calculation of diluted EPS because (a) their exercise prices exceeded Shire plcbs average share price during the calculation period or (b) the required performance conditions were not satisfied as at the balance sheet date. |
Segmental_Reporting_by_Segment
Segmental Reporting (by Segment) (Details) | 9 Months Ended |
Sep. 30, 2014 | |
number | |
Segment Reporting Information [Line Items] | ' |
Commercial units | 4 |
Segmental_Reporting_Revenue_by
Segmental Reporting (Revenue by Product) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Product sales | $1,552 | $1,171 | $4,329.70 | $3,477.10 |
VYVANSE | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Product sales | ' | ' | 1,065.60 | 897.9 |
ADDERALL XR | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Product sales | ' | ' | 280.2 | 293.5 |
INTUNIV | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Product sales | ' | ' | 279 | 248.9 |
LIALDA and MEZAVANT | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Product sales | ' | ' | 449.1 | 379.9 |
PENTASA | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Product sales | ' | ' | 213.8 | 215.2 |
FOSRENOL | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Product sales | ' | ' | 136.2 | 136.3 |
XAGRID | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Product sales | ' | ' | 82.1 | 74.1 |
Other Products | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Product sales | ' | ' | 97.6 | 96.4 |
REPLAGAL | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Product sales | ' | ' | 380.7 | 336.6 |
ELAPRASE | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Product sales | ' | ' | 449.5 | 392.6 |
VPRIV | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Product sales | ' | ' | 273 | 251.9 |
FIRAZYR | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Product sales | ' | ' | 262.3 | 153.8 |
CINRYZE | ' | ' | ' | ' |
Revenue from External Customer [Line Items] | ' | ' | ' | ' |
Product sales | ' | ' | $360.60 | $0 |
Taxation_Details
Taxation (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Effective Income Tax Rate Reconciliation | ' | ' | ' | ' |
Effective rate of tax | 11.00% | 20.00% | -5.00% | 21.00% |
Net tax credit following the settlement of certain tax position with the Canadian revenue authorities | $27.70 | ' | $243.70 | ' |
Decreases resulting from settlements with the taxing authorities | -26.5 | ' | -291.7 | ' |
Future decrease in the unrecognized tax benefit. | 20 | ' | 20 | ' |
Interest income in respect of cash deposited with Canadian revenue authorities | $2.80 | ' | $21.40 | ' |
Related_parties_Details
Related parties (Details) (USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2014 |
Related Party Transaction [Line Items] | ' |
Related Party Transaction, Description of Transaction | 'Shire considers that ArmaGen is a related party by virtue of Shire’s equity stake in ArmaGen and the worldwide licensing and collaboration agreement between the two parties to develop and commercialize AGT-182 (see Note 16 for details). In the three and nine months to September 30, 2014 Shire paid $15 million in cash to ArmaGen in exchange for an equity stake in ArmaGen and the license to develop and commercialize AGT-182. |
ArmaGen | ' |
Related Party Transaction [Line Items] | ' |
Amount paid for an equity stake and the license to develop and commercialize AGT-182 | 15 |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2014 |
Subsequent Event | ' |
Ternination of the cooperation agreement with AbbVie | 20-Oct-14 |
Subsequent Event, Description | 'On October 15, 2014 the Board of AbbVie confirmed that it had withdrawn its recommendation of its offer for Shire as a result of the anticipated impact of the US Treasury Notice on the benefits that AbbVie expected from its offer. As AbbVie’s offer was conditional on the approval of its stockholders, and given their Board’s decision to change its recommendation and to advise AbbVie’s stockholders to vote against the offer, there was no realistic prospect of satisfying this condition. Accordingly, Shire’s Board agreed with AbbVie to terminate the cooperation agreement on October 20, 2014. The UK Takeover Panel has confirmed that the offer period has ended. The Company has entered into a termination agreement with AbbVie, pursuant to which AbbVie has paid the break fee due under the cooperation agreement of approximately $1.635 billion, which will be recorded as a credit to the Company’s consolidated income statement in the fourth quarter of 2014. The Company is evaluating the associated tax impact |
Subsequent event break fee amount | $1,635 |