Document_and_Entity_Informatio
Document and Entity Information (USD $) | 3 Months Ended | ||
In Billions, except Share data in Millions, unless otherwise specified | Mar. 31, 2015 | Apr. 24, 2015 | Jun. 30, 2014 |
Document and Entity Information [Abstract] | |||
Document Type | 10-Q | ||
Document Period End Date | 31-Mar-15 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -19 | ||
Entity Central Index Key | 936402 | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Trading Symbol | SHP, SHPG | ||
Entity Registrant Name | Shire plc | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Common Stock, Shares Outstanding | 600.3 | ||
Document Fiscal Year Focus | 2015 | ||
Document Fiscal Period Focus | Q1 | ||
Entity Public Float | $45.90 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $74.30 | $2,982.40 |
Restricted cash | 68.9 | 54.6 |
Accounts receivable, net | 1,116.30 | 1,035.10 |
Inventories | 588.7 | 544.8 |
Deferred tax asset | 461.8 | 344.7 |
Prepaid expenses and other current assets | 216.6 | 221.5 |
Total current assets | 2,526.60 | 5,183.10 |
Non-current assets: | ||
Investments | 45.7 | 43.7 |
Property, plant and equipment, net ("PP&E") | 821.9 | 837.5 |
Goodwill | 4,178.70 | 2,474.90 |
Other intangible assets, net | 9,980 | 4,934.40 |
Deferred tax asset | 102.7 | 112.1 |
Other non-current assets | 22.7 | 46.4 |
Total assets | 17,678.30 | 13,632.10 |
Current liabilities: | ||
Accounts payable and accrued expenses | 1,991.60 | 1,909.40 |
Short-term borrowings | 2,570.20 | 850 |
Other current liabilities | 303.2 | 262.5 |
Total current liabilities | 4,865 | 3,021.90 |
Non-current liabilities | ||
Long-term borrowings | 78.7 | 0 |
Deferred tax liability | 2,909.90 | 1,210.60 |
Other non-current liabilities | 844 | 736.7 |
Total liabilities | 8,697.60 | 4,969.20 |
Commitments and contingencies | ||
Equity: | ||
Common stock of 5p par value; 1,000 million shares authorized; and 600.2 million shares issued and outstanding (2014: 1,000 million shares authorized; and 599.1 million shares issued and outstanding) | 58.9 | 58.7 |
Additional paid-in capital | 4,373.20 | 4,338 |
Treasury stock: 10.0 million shares (2014: 10.6 million shares) | -330.1 | -345.9 |
Accumulated other comprehensive loss | -160.3 | -31.5 |
Retained earnings | 5,039 | 4,643.60 |
Total equity | 8,980.70 | 8,662.90 |
Total liabilities and equity | $17,678.30 | $13,632.10 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (GBP £) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, except Per Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ||
Common Stock, Par Value (in GBP per share) | £ 0.05 | £ 0.05 |
Common Stock, Shares Authorized | 1,000 | 1,000 |
Common Stock, Shares, Issued | 600.2 | 599.1 |
Common Stock, Shares, Outstanding | 600.2 | 599.1 |
Treasury Stock, Shares | 10 | 10.6 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 3 Months Ended | |||
In Millions, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | ||
Revenues: | ||||
Product sales | $1,423.20 | $1,308.10 | ||
Royalties | 62.8 | 32.3 | ||
Other revenues | 2.4 | 6.4 | ||
Total revenues | 1,488.40 | 1,346.80 | ||
Costs and expenses: | ||||
Cost of product sales | 227.8 | 229.5 | ||
Research and development | 193.7 | [1] | 360.5 | [1] |
Selling, general and administrative | 506.6 | [1] | 430.3 | [1] |
Gain on sale of product rights | -5.2 | -36.4 | ||
Reorganization costs | 15.2 | 49.4 | ||
Integration and acquisition costs | 75.7 | 6.6 | ||
Total operating expenses | 1,013.80 | 1,039.90 | ||
Operating income from continuing operations | 474.6 | 306.9 | ||
Interest income | 2 | 0.5 | ||
Interest expense | -9.6 | -7.8 | ||
Other income, net | 4.3 | 4.7 | ||
Total other expense, net | -3.3 | -2.6 | ||
Income from continuing operations before income taxes and equity in losses of equity method investees | 471.3 | 304.3 | ||
Income taxes | -57.4 | -50.6 | ||
Equity in losses of equity method investees, net of taxes | -1 | -0.6 | ||
Income from continuing operations, net of taxes | 412.9 | 253.1 | ||
Loss from discontinued operations, net of taxes | -2.5 | -22.7 | ||
Net income | $410.40 | $230.40 | ||
Earnings from continuing operations (in USD per share) | $0.70 | $0.43 | ||
Loss from discontinued operations (in USD per share) | ($0.00) | ($0.04) | ||
Earnings per ordinary share - basic (in USD per share) | $0.70 | $0.39 | ||
Earnings from continuing operations (in USD per share) | $0.70 | $0.43 | ||
Loss from discontinued operations (in USD per share) | ($0.00) | ($0.04) | ||
Earnings per ordinary share - diluted (in USD per share) | $0.69 | $0.39 | ||
Weighted average number of shares: | ||||
Basic (in shares) | 589.1 | [2] | 584.3 | [2] |
Diluted (in shares) | 592.7 | 588.8 | ||
[1] | Research and development (bR&Db) includes intangible asset impairment charges of $nil for the three months to March 31, 2015 (2014: $166.0 million). Selling, general and administrative (bSG&Ab) costs include amortization of intangible assets relating to intellectual property rights acquired of $88.3 million for the three months to March 31, 2015 (2014: $57.8 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 | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Intangible Assets (Excluding Goodwill) [Line Items] | ||
Amortization of intangible assets | $88.30 | $57.80 |
Impairment of unamortized intangible assets | 0 | 166 |
Acquired Intellectual Property Rights | ||
Intangible Assets (Excluding Goodwill) [Line Items] | ||
Amortization of intangible assets | $88.30 | $57.80 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Statement of Income and Comprehensive Income [Abstract] | ||
Net income | $410.40 | $230.40 |
Other comprehensive income: | ||
Foreign currency translation adjustments | -129.5 | -1.7 |
Unrealized holding gain on available-for-sale securities (net of taxes of $nil and $2.5 million) | 0.7 | 4.3 |
Comprehensive income | 281.6 | 233 |
Components of accumulated other comprehensive income | ||
Foreign currency translation adjustments | -155.2 | -25.7 |
Unrealized holding loss on available-for-sale securities, net of taxes | -5.1 | -5.8 |
Accumulated other comprehensive loss | ($160.30) | ($31.50) |
Consolidated_Statements_of_Com1
Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Statement of Income and Comprehensive Income [Abstract] | ||
Unrealized holding gain on available-for-sale securities, tax | $0 | $2.50 |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Equity (USD $) | Total | Common stock | Additional paid-in capital | Treasury stock | Accumulated other comprehensive (loss)/income | Retained earnings |
In Millions | ||||||
As at Dec. 31, 2014 | $8,662.90 | $58.70 | $4,338 | ($345.90) | ($31.50) | $4,643.60 |
Shares as at Dec. 31, 2014 | 599.1 | 599.1 | ||||
Net income | 410.4 | 410.4 | ||||
Other comprehensive loss, net of tax | -128.8 | -128.8 | ||||
Options exercised | 0.2 | 0.2 | ||||
Option exercised (in shares) | 1.1 | |||||
Share-based compensation | 15.3 | 15.3 | ||||
Tax benefit associated with exercise of stock options (in US dollar) | 19.9 | 19.9 | ||||
Shares released by Employee Benefit Trust ("EBT") to satisfy exercise of stock options | 0.8 | 15.8 | -15 | |||
As at Mar. 31, 2015 | $8,980.70 | $58.90 | $4,373.20 | ($330.10) | ($160.30) | $5,039 |
Shares as at Mar. 31, 2015 | 600.2 | 600.2 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $410.40 | $230.40 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 120.6 | 94.6 |
Share-based compensation | 15.3 | 26.2 |
Change in fair value of contingent consideration | 2.4 | -59.2 |
Unwind of inventory fair value step-ups | 11.2 | 38.8 |
Impairment of IPR&D intangible assets | 0 | 166 |
Impairment of PP&E | 0 | 12.1 |
Gain on sale of product rights | -5.2 | -36.4 |
Other, net | 1.1 | -0.3 |
Movement in deferred taxes | 16.6 | 18.5 |
Equity in earnings of equity method investees | 1 | 0.6 |
Changes in operating assets and liabilities: | ||
Increase in accounts receivable | -85.1 | -77.3 |
(Decrease)/increase in sales deduction accruals | -24.6 | 70.8 |
Increase in inventory | -22 | -18.6 |
Decrease/(increase) in prepayments and other assets | 42.4 | -74.6 |
Increase/(decrease) in accounts and notes payable and other liabilities | 77.5 | -145.5 |
Net cash provided by operating activities | 561.6 | 246.1 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Movements in restricted cash | -14.5 | -10.1 |
Purchases of subsidiary undertakings and businesses, net of cash acquired | -5,199.70 | -3,764.40 |
Purchases of non-current investments and PP&E | -22.3 | -15.6 |
Proceeds from short-term investments | 54.5 | 46.8 |
Proceeds received on sale of product rights | 3.9 | 48 |
Proceeds from disposal of non-current investments and PP&E | 0.9 | 8 |
Other, net | 0 | -2.9 |
Net cash used in investing activities | -5,177.20 | -3,690.20 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from revolving line of credit, long-term and short-term borrowings | 2,230 | 2,170 |
Repayment of revolving line of credit | -535.2 | -650.2 |
Repayment of debt acquired ViroPharma Inc. ("ViroPharma") | 0 | -533.9 |
Proceeds from ViroPharma call options | 0 | 346.7 |
Excess tax benefit associated with exercise of stock options | 19.9 | 20.5 |
Contingent consideration payments | -2.4 | -7.8 |
Other, net | -3.2 | 0.2 |
Net cash provided by/(used in) financing activities | 1,709.10 | 1,345.50 |
Effect of foreign exchange rate changes on cash and cash equivalents | -1.6 | -1.7 |
Net decrease in cash and cash equivalents | -2,908.10 | -2,100.30 |
Cash and cash equivalents at beginning of period | 2,982.40 | 2,239.40 |
Cash and cash equivalents at end of period | 74.3 | 139.1 |
Supplemental information associated with continuing operations: | ||
Interest paid | -5 | -2.6 |
Income taxes repaid/(paid) | $48.80 | ($82.60) |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2015 | |
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, 2014 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, 2014. | |
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 | |
Adopted during the period | |
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. | |
Shire adopted this guidance in the period, which will be effective for discontinued operations occurring after January 1, 2015. The adoption of this guidance did not impact the Company's consolidated financial position, results of operations or cash flows. | |
To be adopted in future periods | |
Revenue from Contracts with Customers | |
In May 2014 the FASB and the International Accounting Standards Board (together the “Accounting Standards 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 Standards 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. | |
In April 2015 the FASB proposed to defer the effective date of the guidance by one year. Based on this proposal, public entities would need to apply the new guidance for annual reporting periods beginning after December 15, 2017, and interim periods therein. The Company is currently evaluating the impact of adopting this guidance. | |
Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities (“VIEs”) 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 with respect to development stage entities in Topic 810, Consolidation, for determining whether an entity is a VIE 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 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 both of these 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. | |
Amendments to the Consolidation Analysis | |
In February 2015 the FASB issued guidance to respond to stakeholders' concerns about the current accounting for consolidation of certain legal entities. Financial statement users asserted that in certain situations in which consolidation is ultimately required, deconsolidated financial statements are necessary to better analyze the reporting entity's economic and operational results. Previously, the FASB issued an indefinite deferral for certain entities to partially address those concerns. However, the amendments in this guidance rescind that deferral and address those concerns by making changes to the consolidation guidance. | |
Under the amendments, all reporting entities are within the scope of Subtopic 810-10, Consolidation, including limited partnerships and similar legal entities, unless a scope exception applies. The presumption that a general partner controls a limited partnership has been eliminated. In addition, fees paid to decision makers that meet certain conditions no longer cause decision makers to consolidate a VIE in certain instances. The amendments place more emphasis in the consolidation evaluation on variable interests other than fee arrangements such as principal investment risk (for example, debt or equity interests), guarantees of the value of the assets or liabilities of the VIE, written put options on the assets of the VIE, or similar obligations, including some liquidity commitments or agreements (explicit or implicit). Additionally, the amendments reduce the extent to which related party arrangements cause an entity to be considered a primary beneficiary. | |
The amendments are effective for public business entities for fiscal years, and for interim periods therein, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. 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. | |
Simplifying the Presentation of Debt Issuance Costs | |
In April 2015 the FASB issued guidance to simplify the presentation of debt issuance costs. The guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this update. The amendments in this update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods therein. | |
Early adoption of the amendments in this update is permitted for financial statements that have not been previously issued. An entity should apply the new guidance on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. Upon transition, an entity is required to comply with the applicable disclosures for a change in an accounting principle. 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 | 3 Months Ended | ||
Mar. 31, 2015 | |||
Business Combinations [Abstract] | |||
Business Combination Disclosure | 2. Business combinations | ||
Acquisition of NPS Pharmaceuticals Inc. (“NPS Pharma”) | |||
On February 21, 2015 Shire completed its acquisition of 100% of the outstanding share capital of NPS Pharma. The acquisition-date fair value of cash consideration paid on closing was $5,218 million. | |||
The acquisition of NPS Pharma added GATTEX/REVESTIVE, approved in the US and EU for the treatment of adults with short bowel syndrome (“SBS”), a rare and potentially fatal gastrointestinal disorder and NATPARA/NATPAR approved in the US for the treatment of hypoparathyroidism (“HPT”), a rare endocrine disease, to Shire's portfolio of currently marketed products. | |||
The acquisition of NPS Pharma has been accounted for as a business combination using the acquisition method. The assets acquired and the liabilities assumed from NPS Pharma have been recorded at their preliminary fair values at the date of acquisition, being February 21, 2015. The Company's consolidated financial statements include the results of NPS Pharma from February 21, 2015. | |||
The amount of NPS Pharma's post-acquisition revenues and pre-tax losses included in the Company's consolidated statement of income for the three months to March 31, 2015 were $26.2 million and $51.2 million respectively. The pre-tax loss includes charges on the unwind of inventory fair value adjustments of $9.9 million, intangible asset amortization of $30.1 million and integration costs of $17.4 million. | |||
The Company's preliminary allocation of the purchase price to the assets acquired and liabilities assumed is outlined below: | |||
Preliminary | |||
Fair value | |||
$’M | |||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | 41.6 | ||
Short-term investments | 67 | ||
Accounts receivable | 31.7 | ||
Inventories | 51.1 | ||
Deferred tax assets | 151.5 | ||
Other current assets | 10.1 | ||
_______________ | |||
Total current assets | 353 | ||
Non-current assets: | |||
PPE | 4.2 | ||
Goodwill | 1,691.60 | ||
Other intangible assets | |||
- currently marketed products | 4,670.00 | ||
- royalty rights (categorized as "Other amortized intangible assets" ) | 353.0 | ||
_______________ | |||
Total assets | 7,071.80 | ||
_______________ | |||
LIABILITIES | |||
Current liabilities: | |||
Accounts payable and other current liabilities | 72.5 | ||
Short-term debt | 27.4 | ||
Non-current liabilities: | |||
Long-term debt, less current portion | 78.9 | ||
Deferred tax liabilities | 1,671.00 | ||
Other non-current liabilities | 4.2 | ||
_______________ | |||
Total liabilities | 1,854.00 | ||
_______________ | |||
Fair value of identifiable assets acquired and liabilities assumed | 5,217.80 | ||
Consideration | _______________ | ||
Cash consideration paid | 5,217.80 | ||
_______________ | |||
The purchase price allocation is preliminary pending final determination of the fair values of certain assets and liabilities. In particular the fair values of inventories, intangible assets, assumed non-recourse debt obligations and current and deferred taxes are preliminary pending receipt of the final valuations for those items. 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 $4,670.0 million relate to intellectual property rights acquired for NPS Pharma's currently marketed products, primarily attributed to NATPARA/NATPAR, and GATTEX/REVESTIVE. The fair value of the currently marketed products is preliminary and 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 NATPARA/NATPAR and GATTEX/REVESTIVE intangible assets are 24 years, with amortization being recorded on a straight-line basis. | |||
(b) Other intangible assets – Royalty rights | |||
Other intangibles totaling $353.0 million relate to the royalty rights arising from the collaboration agreements with Amgen, Janssen and Kyowa Hakko Kirin. Amgen markets cinacalcet HCl as Sensipar in the US and as Mimpara in the EU; Janssen Pharmaceuticals markets tapentadol as Nucynta in the US; and Kyowa Hakko Kirin markets cinacalcet HCI as Regpara in Japan, Hong Kong, Malaysia, Macau, Singapore, and Taiwan. NPS Pharma is entitled to royalties from the relevant net sales of these products. | |||
The fair value of these royalty rights is preliminary and has been estimated using an income approach, based on the present value of incremental after tax cash flows attributable to each royalty right. | |||
The estimated useful lives of these royalty rights range from 4 to 5 years (weighted average 4 years), with amortization being recorded on a straight-line basis. | |||
(c) Goodwill | |||
Goodwill arising of $1,691.6 million, which is not deductible for tax purposes, includes the expected synergies that will result from combining the operations of NPS Pharma with the operations of Shire; particularly those 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 to March 31, 2015 the Company expensed costs of $69.9 million relating to the acquisition and post-acquisition integration of NPS Pharma, 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 NPS Pharma as if the acquisition of NPS Pharma had occurred as at January 1, 2014. 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. | |||
3 months to | 3 months to | ||
March 31, | March 31, | ||
2015 | 2014 | ||
$’M | $’M | ||
_______________ | _______________ | ||
Revenues | 1,518.30 | 1,390.80 | |
Net income from continuing operations | 358.8 | 85.8 | |
_______________ | _______________ | ||
Per share amounts: | |||
Net income from continuing operations per share - basic | 60.9c | 14.7c | |
Net income from continuing operations per share - diluted | 60.5c | 14.6c | |
_______________ | _______________ | ||
The unaudited pro forma financial information above reflects the following pro forma adjustments: | |||
an adjustment to decrease net income by $106.8 million for the period to March 31, 2014 to reflect acquisition costs incurred by Shire and NPS Pharma, and increase net income by $106.8 million for the period to March 31, 2015, to eliminate acquisition costs incurred; | |||
an adjustment to decrease net income by $6.1 million for the period to March 31 2014, 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 March 31, 2015; | |||
an adjustment of $5.6 million in the period to March 31, 2014 to reflect additional interest expense associated with the drawdown of debt to partially finance the acquisition of NPS Pharma and the amortization of related deferred debt issuance costs; | |||
an adjustment to increase amortization expense by approximately $21.1 million in the period to March 31, 2015 and $42.3 million in the period March 31, 2014 related to amortization of the fair value of identifiable intangible assets acquired and the elimination of NPS Pharma's historical intangible asset amortization expense; and | |||
the tax effect of the above adjustments, where applicable. | |||
Acquisition of Meritage Pharma Inc. (“Meritage”) | |||
Prior to the acquisition of ViroPharma by Shire (see below), ViroPharma had entered into an exclusive development and option agreement with Meritage, a privately owned US company focusing on developing oral budesonide suspension (“OBS”) as a treatment for eosinophilic esophagitis. Under the terms of this agreement Meritage controlled and conducted all related research up to achievement of pre-defined development success criteria at which point ViroPharma had the option to acquire Meritage. | |||
On February 18, 2015, following the exercise of the purchase option, Shire acquired all the outstanding equity of Meritage. The acquisition date fair value of the consideration totaled $166.9 million, comprising cash consideration paid on closing of $74.8 million and the fair value of contingent consideration payable of $92.1 million. The maximum amount of contingent cash consideration which may be payable by Shire in future periods is $175.0 million dependent upon achievement of certain clinical development and regulatory milestones. | |||
With the Meritage acquisition, Shire has acquired the global rights to Meritage's Phase 3-ready compound, OBS, for the treatment of adolescents and adults with eosinophilic esophagitis. | |||
The acquisition of Meritage has been accounted for as a business combination using the acquisition method. The assets and liabilities assumed from Meritage have been recorded at their preliminary fair values at the date of acquisition, being February 18, 2015. The Company's consolidated financial statements and results of operations include the results of Meritage from February 18, 2015. | |||
The purchase price allocation is preliminary pending the determination of the fair values of certain assets and liabilities. The purchase price has been allocated on a preliminary basis to the OBS IPR&D intangible asset ($175 million), net current assets assumed ($5.5 million), net non-current liabilities assumed (including deferred tax liabilities) ($54.7 million) and goodwill ($41.1 million). Goodwill arising of $41.1 million is not deductible for tax purposes. | |||
Unaudited pro forma financial information to present the combined results of operations of Shire and Meritage 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 ViroPharma Incorporated | |||
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 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 business combination using the acquisition method. The assets acquired and the liabilities assumed from ViroPharma have been recorded at their 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 purchase price allocation was finalized in the fourth quarter of 2014. The Company's allocation of the purchase price to the fair value of assets acquired and liabilities assumed is outlined below: | |||
Acquisition date 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 | 100.7 | ||
Purchased call option | 346.7 | ||
Other current assets | 50.9 | ||
_______________ | |||
Total current assets | 1,044.50 | ||
Non-current assets: | |||
PPE | 24.7 | ||
Goodwill | 1,655.50 | ||
Other intangible assets | |||
- Currently marketed products | 2,320.00 | ||
- In-Process Research and Development (“IPR&D”) | 315.0 | ||
Other non-current assets | 10.4 | ||
_______________ | |||
Total assets | 5,370.10 | ||
_______________ | |||
LIABILITIES | |||
Current liabilities: | |||
Accounts payable and other current liabilities | 122.7 | ||
Convertible bond | 551.4 | ||
Non-current liabilities: | |||
Deferred tax liabilities | 603.5 | ||
Other non-current liabilities | 95.5 | ||
_______________ | |||
Total liabilities | 1,373.10 | ||
_______________ | |||
Fair value of identifiable assets acquired and liabilities assumed | 3,997.00 | ||
_______________ | |||
Consideration | |||
Cash consideration paid | 3,997.00 | ||
_______________ | |||
(a) Other intangible assets – currently marketed products | |||
Other intangible assets totaled $2,320.0 million at the date of acquisition, relating to intellectual property rights acquired for ViroPharma's then 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. The 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 | |||
The IPR&D asset of $315.0 million relates to maribavir (now SHP620), an investigational antiviral product for cytomegalovirus. The fair value of this IPR&D asset was estimated based on an income approach, using the present value of incremental after tax cash flows expected to be generated by this development project after the deduction of contributory asset charges for other assets employed in this project. The estimated cash flows have been probability adjusted to take into account the stage of completion and the remaining risks and uncertainties surrounding the future development and commercialization. | |||
The major risks and uncertainties associated with the timely completion of the acquired IPR&D project 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 information obtained during the measurement period) 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 $1,655.5 million, which is not deductible for tax purposes, includes the expected operational synergies that will result from combining the commercial operations of ViroPharma with those of Shire (valued at approximately $400 million); 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 to March 31, 2015 the Company expensed costs of $3.3 million (2014: $65.8 million) 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. |
Reorganization_Costs
Reorganization Costs | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Restructuring and Related Activities [Abstract] | |||||
Reorganization Costs Disclosure | 3. 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. | |||||
In 2014 certain aspects of the One Shire program were temporarily put on hold due to AbbVie's offer for Shire, which was terminated in October 2014. Subsequent to the termination of AbbVie's offer, Shire announced on November 10, 2014 its plans to relocate over 500 positions to Lexington Massachusetts from its Chesterbrook, Pennsylvania, site and establish Lexington as the Company's US operational headquarters in continuation of the One Shire efficiency program. This relocation will streamline business globally through two principal locations, Massachusetts and Switzerland, with support from regional and country-based offices around the world. | |||||
In the three months to March 31, 2015 the Company incurred reorganization costs totaling $15.2 million, relating to employee involuntary termination benefits and other reorganization costs. Reorganization costs of $260.7 million have been incurred since May 2013. The One Shire reorganization is expected to be substantially completed by the first quarter of 2016. Currently, the Company estimates that further costs in respect of the One Shire reorganization of approximately $115 million will be expensed as incurred during 2015 and 2016. | |||||
The liability for reorganization costs arising from the One Shire business reorganization at March 31, 2015 is as follows: | |||||
Opening liability | Amount | Closing liability at | |||
at January 1, | charged to re- | March 31, | |||
2015 | organization | Paid/Utilized | 2015 | ||
$'M | $'M | $'M | $'M | ||
___________ | ____________ | ___________ | ___________ | ||
Involuntary termination benefits | 38 | 9.4 | -5.1 | 42.3 | |
Other reorganization costs | - | 5.8 | -5 | 0.8 | |
___________ | ___________ | ___________ | ___________ | ||
38 | 15.2 | -10.1 | 43.1 | ||
___________ | ___________ | ___________ | ___________ | ||
At March 31, 2015 the closing reorganization cost liability was recorded within accounts payable and accrued expenses. |
Integration_and_acquisition_co
Integration and acquisition costs | 3 Months Ended |
Mar. 31, 2015 | |
IntegrationAndAcquisitionCosts[Abstract] | |
Integration and acquisition costs | 4. Integration and acquisition costs |
For the three months to March 31, 2015 Shire recorded integration and acquisition costs of $75.7 million primarily related to the acquisition and integration of NPS Pharma. | |
In the three months to March 31, 2014 integration and acquisition costs of $6.6 million primarily related to the acquisition and integration of ViroPharma ($65.8 million), offset by a net credit related to the change in fair values of contingent consideration liabilities ($59.2 million). The net credit arose principally due to the re-measurement of contingent consideration payable on the acquisition of FerroKin Biosciences, Inc. following the decision to place the ongoing Phase 2 clinical trial for SHP602 on hold. | |
Accounts_Receivable_Net
Accounts Receivable, Net | 3 Months Ended | ||
Mar. 31, 2015 | |||
Receivables [Abstract] | |||
Accounts Receivable Disclosure | 5. Accounts receivable, net | ||
Accounts receivable at March 31, 2015 of $1,116.3 million (December 31, 2014: $1,035.1 million), are stated net of a provision for discounts and doubtful accounts of $46.7 million (December 31, 2014: $48.5 million). | |||
Provision for discounts and doubtful accounts: | |||
2015 | 2014 | ||
$’M | $’M | ||
_____________ | _____________ | ||
As at January 1, | 48.5 | 47.9 | |
Provision charged to operations | 80.8 | 80.7 | |
Provision utilization | -82.6 | -81.2 | |
_____________ | _____________ | ||
As at March 31, | 46.7 | 47.4 | |
_____________ | _____________ | ||
At March 31, 2015 accounts receivable included $57.2 million (December 31, 2014: $59.0 million) related to royalty income. |
Inventories
Inventories | 3 Months Ended | ||
Mar. 31, 2015 | |||
Inventory Disclosure [Abstract] | |||
Inventory Disclosure | 6. Inventories | ||
Inventories are stated at the lower of cost or market. Inventories comprise: | |||
March 31, | December 31, | ||
2015 | 2014 | ||
$’M | $’M | ||
____________ | ____________ | ||
Finished goods | 137.8 | 136 | |
Work-in-progress | 307.4 | 305.3 | |
Raw materials | 143.5 | 103.5 | |
____________ | ____________ | ||
588.7 | 544.8 | ||
____________ | ____________ |
Results_of_discontinued_operat
Results of discontinued operations | 3 Months Ended | ||
Mar. 31, 2015 | |||
DiscontinuedOperationsAndDisposalGroupsAbstract | |||
Results of discontinued operations Disclosure | 7. Results of discontinued operations | ||
Following the divestment of the Company's DERMAGRAFT business in January 2014, the operating results associated with the DERMAGRAFT business have been classified as discontinued operations in the consolidated statements of income for all periods presented. In the three months to March 31, 2015 the Company recorded a loss of $2.5 million, primarily relating to costs associated with the divestment. The components of discontinued operations which relate to the DERMAGRAFT business are as follows: | |||
3 months to | 3 months to | ||
March 31, | March 31, | ||
2015 | 2014 | ||
$’M | $’M | ||
Revenues: | _______________ | _______________ | |
Product revenues | - | 1.9 | |
_______________ | _______________ | ||
Loss from discontinued operations before income taxes | -3.9 | -35.8 | |
Income taxes | 1.4 | 13.1 | |
_______________ | _______________ | ||
Loss from discontinued operations, net of taxes | -2.5 | -22.7 | |
_______________ | _______________ |
Prepaid_Expenses_and_Other_Cur
Prepaid Expenses and Other Current Assets | 3 Months Ended | ||
Mar. 31, 2015 | |||
Prepaid Expense and Other Assets, Current [Abstract] | |||
Prepaid Expense and Other Assets, Current | 8. Prepaid expenses and other current assets | ||
March 31, | December 31, | ||
2015 | 2014 | ||
$’M | $’M | ||
______________ | ____________ | ||
Prepaid expenses | 72.9 | 36.9 | |
Income tax receivable | 68.8 | 121.5 | |
Value added taxes receivable | 15 | 13.8 | |
Other current assets | 59.9 | 49.3 | |
______________ | ______________ | ||
216.6 | 221.5 | ||
______________ | ______________ |
Goodwill
Goodwill | 3 Months Ended | ||
Mar. 31, 2015 | |||
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill Disclosure | 9. Goodwill | ||
March 31, | December 31, | ||
2015 | 2014 | ||
$’M | $’M | ||
____________ | ____________ | ||
Goodwill arising on businesses acquired | 4,178.70 | 2,474.90 | |
____________ | ____________ | ||
In the three months to March 31, 2015 the Company completed the acquisitions of NPS Pharma and Meritage, which resulted in aggregate goodwill with a preliminary value of $1,732.7 million (see Note 2 for details). | |||
2015 | 2014 | ||
$’M | $’M | ||
____________ | ____________ | ||
As at January 1, | 2,474.90 | 624.6 | |
Acquisitions | 1,732.70 | 1,536.60 | |
Foreign currency translation | -28.9 | - | |
____________ | ____________ | ||
As at March 31, | 4,178.70 | 2,161.20 | |
____________ | ____________ |
Other_Intangible_Assets_Net
Other Intangible Assets, Net | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||||
Other Intangible Assets Disclosure | 10. Other intangible assets, net | |||
March 31, | December 31, | |||
2015 | 2014 | |||
$’M | $’M | |||
________________ | ________________ | |||
Amortized intangible assets | ||||
Intellectual property rights acquired for currently marketed products | 9,404.00 | 4,816.90 | ||
Other intangible assets | 375 | 30 | ||
________________ | ________________ | |||
9,779.00 | 4,846.90 | |||
Unamortized intangible assets | ||||
Intellectual property rights acquired for IPR&D | 1,724.50 | 1,550.00 | ||
________________ | ________________ | |||
11,503.50 | 6,396.90 | |||
Less: Accumulated amortization | -1,523.50 | -1,462.50 | ||
________________ | ________________ | |||
9,980.00 | 4,934.40 | |||
________________ | ________________ | |||
The change in the net book value of other intangible assets for the three months to March 31, 2015 and 2014 is shown in the table below: | ||||
Other intangible assets | ||||
3 months to | 3 months to | |||
March 31, | March 31, | |||
2015 | 2014 | |||
$’M | $’M | |||
________________ | ________________ | |||
As at January 1, | 4,934.40 | 2,312.60 | ||
Acquisitions | 5,198.00 | 2,854.00 | ||
Amortization charged | -88.3 | -57.8 | ||
Impairment charges | - | -166 | ||
Foreign currency translation | -64.1 | 0.6 | ||
________________ | ________________ | |||
As at March 31, | 9,980.00 | 4,943.40 | ||
________________ | ________________ | |||
In the three months to March 31, 2015 the Company acquired intangible assets totaling $5,198 million, relating to the fair value of intangible assets for currently marketed products and royalty right assets acquired with NPS Pharma of $5,023 million and IPR&D assets of $175 million acquired with Meritage (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. Based on estimates and circumstances at March 31, 2015 the Company determined that its intangible assets remained recoverable. | ||||
On April 9, 2015 the Company announced that the 13-week Phase 2 IMAGO trial of its investigational compound SHP625 did not meet the primary or secondary endpoints in the study of 20 pediatric patients with Alagille syndrome (“ALGS”). As a result, it is possible that changes in estimates or circumstances in the second quarter of 2015 could result in an impairment loss being recorded in respect of the SHP625 IPR&D intangible asset, with a charge to R&D. The Company cannot currently estimate the amount of the impairment loss, if any. It is also possible that the fair value of the related contingent consideration payable from the Lumena acquisition (through which Shire acquired SHP625) will be reduced, with a credit to Integration and acquisition costs. | ||||
In the three months to March 31, 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) IPR&D asset. The Company therefore reviewed the recoverability of its SHP602 IPR&D asset 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. | ||||
Management estimates that the annual amortization charge in respect of intangible assets held at March 31, 2015 will be approximately $481 million for each of the five years to March 31, 2020. 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 | 3 Months Ended | ||
Mar. 31, 2015 | |||
Accounts Payable and Accrued Liabilities, Current [Abstract] | |||
Accounts Payable and Accrued Expenses Disclosure | 11. Accounts payable and accrued expenses | ||
March 31, | December 31, | ||
2015 | 2014 | ||
$’M | $’M | ||
________________ | ________________ | ||
Trade accounts payable and accrued purchases | 384.1 | 247.7 | |
Accrued rebates – Medicaid | 555.9 | 563.9 | |
Accrued rebates – Managed care | 306.8 | 318.2 | |
Sales return reserve | 134.8 | 131.7 | |
Accrued bonuses | 72.6 | 150.7 | |
Accrued employee compensation and benefits payable | 174 | 109.1 | |
R&D accruals | 55.9 | 88.3 | |
Other accrued expenses | 307.5 | 299.8 | |
________________ | ________________ | ||
1,991.60 | 1,909.40 | ||
________________ | ________________ |
Other_Current_Liabilities
Other Current Liabilities | 3 Months Ended | ||
Mar. 31, 2015 | |||
Other Liabilities, Current [Abstract] | |||
Other Current Liabilities | 12. Other current liabilities | ||
March 31, | December 31, | ||
2015 | 2014 | ||
$’M | $’M | ||
_____________ | _____________ | ||
Income taxes payable | 25.8 | 16.2 | |
Value added taxes | 18 | 16.6 | |
Contingent consideration payable | 166.2 | 194.5 | |
Other current liabilities | 93.2 | 35.2 | |
_____________ | _____________ | ||
303.2 | 262.5 | ||
_____________ | _____________ |
Borrowings
Borrowings | 3 Months Ended | ||
Mar. 31, 2015 | |||
Debt Disclosure [Abstract] | |||
Borrowings Disclosure | 13. Borrowings | ||
March 31, | December 31, | ||
2015 | 2014 | ||
$’M | $’M | ||
_____________ | _____________ | ||
Short term borrowings: | |||
Borrowings under the 2015 Facilities Agreement | 850 | - | |
Borrowings under the 2013 Facilities Agreement | 850 | 850 | |
Borrowings under the RCF | 845 | - | |
Secured non-recourse debts | 25.2 | - | |
_____________ | _____________ | ||
2,570.20 | 850 | ||
Long term borrowings: | |||
Secured non-recourse debts | 78.7 | - | |
_____________ | _____________ | ||
2,648.90 | 850 | ||
_____________ | _____________ | ||
Term Loan Agreements | |||
2015 Facility Agreement | |||
On January 11, 2015, Shire entered into an $850 million Facility Agreement with, among others, CitiGroup Global Markets Limited (acting as mandated lead arranger and bookrunner) (the “2015 Facility Agreement”). At March 31, 2015 the 2015 Facility Agreement was comprised of an $850 million term loan facility, which matures on January 10, 2016, and was fully utilized. The maturity date may be extended twice, at Shire's option by six months on each occasion. | |||
The 2015 Facility Agreement has been used to partially finance the purchase price payable in respect of Shire's acquisition of NPS Pharma (including certain related costs). See the Company's 2014 Annual Report on Form 10-K for details of the 2015 Facility Agreement. | |||
2013 Facilities Agreement | |||
On November 11, 2013, Shire entered into a $2,600 million facilities agreement with, among others, Morgan Stanley Bank International Limited (acting as mandated lead arranger and bookrunner) (the “2013 Facilities Agreement”). The 2013 Facilities Agreement comprised two credit facilities: (i) a $1,750 million term loan facility and (ii) a $850 million term loan facility. | |||
On December 13, 2013 and at various points during the year to December 31, 2014, the Company cancelled part of the $2,600 million term loan facility. At March 31, 2015 the 2013 Facilities Agreement was comprised of an $850 million term loan facility which matures on November 11, 2015 and was fully utilized. | |||
The $850 million remaining borrowing from the 2013 Facilities Agreement was used to partially finance the purchase price payable in respect of Shire's acquisition of ViroPharma (including certain related costs) during the year ended December 31, 2014. See the Company's 2014 Annual Report on Form 10-K for details of the 2013 Facilities Agreement. | |||
Revolving Credit Facility (“RCF”) | |||
On December 12, 2014, Shire entered into a $2,100 million RCF with a number of financial institutions. See the Company's 2014 Annual Report on Form 10-K for details. At March 31, 2015 the Company has utilized $845 million of the RCF to partially finance the purchase price payable in respect of Shire's acquisition of NPS Pharma (including certain related costs). | |||
The RCF, which terminates on December 12, 2019, may be applied towards financing the general corporate purposes of Shire. The RCF incorporates a $250 million US dollar and euro swingline facility operating as a sub-limit thereof. | |||
Secured Non-recourse Debts | |||
Prior to the acquisition by Shire, NPS Pharma had: | |||
partially monetized rights to receive future royalty payments from Amgen's sales of SENSIPAR and MIMPARA through the issuance of $145 million of non-recourse debt that is both serviced and secured by SENSIPAR and MIMPARA royalty revenue; | |||
sold to DRI Capital Inc. (“DRI”) certain rights to receive up to $96 million of future royalty payments arising from Kyowa Hakko Kirin's sales of REGPARA and granted DRI a security interest in the license agreement with Kyowa Hakko Kirin, certain patents and other intellectual property related to REGPARA which DRI would be entitled to enforce in the event of default by NPS Pharma; and | |||
partially monetized PTH-184 (now marketed as NATPARA) through an agreement with an affiliate of DRI pursuant to which NPS Pharma, its licensees and its predecessors in interest, are obligated to pay up to $125 million royalties on sales of PTH-184. Additionally, NPS Pharma granted DRI a security interest in certain patents and other intellectual property related to PTH 1-84 which DRI would be entitled to enforce in the event of default by NPS Pharma. | |||
Following the acquisition of NPS Pharma the Company has assumed these secured non-recourse debt obligations. | |||
The acquisition-date fair value of these debt obligations is preliminary pending the receipt of final valuations for these liabilities. The preliminary acquisition-date fair value of these non-recourse debt obligations totals $106.3 million. As at March 31, 2015 $25.2 million has been included within Short-term borrowings, and $78.7 million has been included within Long-term borrowings in respect of these obligations. |
Other_Noncurrent_Liabilities
Other Non-current Liabilities | 3 Months Ended | ||
Mar. 31, 2015 | |||
Other Liabilities, Noncurrent [Abstract] | |||
Other non-current Liabilities Disclosure | 14. Other non-current liabilities | ||
March 31, | December 31, | ||
2015 | 2014 | ||
$’M | $’M | ||
____________ | ____________ | ||
Income taxes payable | 180.7 | 199.2 | |
Deferred revenue | 6.7 | 7.2 | |
Deferred rent | 6.2 | 6.6 | |
Contingent consideration payable | 557.8 | 435.4 | |
Other non-current liabilities | 92.6 | 88.3 | |
____________ | ____________ | ||
844 | 736.7 | ||
____________ | ____________ |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended | ||
Mar. 31, 2015 | |||
Commitments and Contingencies Disclosure [Abstract] | |||
Commitments and Contingencies Disclosure | 15. Commitments and contingencies | ||
(a) Leases | |||
Future minimum lease payments under operating leases at March 31, 2015 are presented below: | |||
Operating | |||
leases | |||
$’M | |||
_____________ | |||
2015 | 1 | 30.6 | |
2016 | 1 | 26.4 | |
2017 | 1 | 30.2 | |
2018 | 1 | 25.4 | |
2019 | 1 | 19.4 | |
2020 | 19.3 | ||
Thereafter | 1 | 125.2 | |
111 | _____________ | ||
276.5 | |||
_____________ | |||
The Company leases land, facilities, motor vehicles and certain equipment under operating leases expiring through 2032. Lease and rental expense amounted to $14.2 million and $13.2 million for the three months to March 31, 2015 and 2014 respectively, which is predominately included in SG&A expenses in the Company's consolidated income statement. | |||
(b) Letters of credit and guarantees | |||
At March 31, 2015 the Company had irrevocable standby letters of credit and guarantees with various banks and insurance companies totaling $46 million (being the contractual amounts), 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 million and sales milestones up to an aggregate amount of $46 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 three months to March 31, 2015 Shire received cash in respect of up-front and milestone payments totaling $12.6 million (2014: $1.0 million). In the three months to March 31, 2015 Shire recognized milestone income of $0.5 million (2014: $1.5 million) in other revenues and $9.2 million (2014: $12.5 million) in product sales for shipment of product to the relevant licensee. | |||
(d) Commitments | |||
(i) Clinical testing | |||
At March 31, 2015 the Company had committed to pay approximately $ 402 million (December 31, 2014: $ 382 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 March 31, 2015 the Company had committed to pay approximately $ 397 million (December 31, 2014: $ 384 million) in respect of contract manufacturing. The Company expects to pay $ 154 million of these commitments in 2015. | |||
(iii) Other purchasing commitments | |||
At March 31, 2015 the Company had committed to pay approximately $ 320 million (December 31, 2014: $ 265 million) for future purchases of goods and services, predominantly relating to active pharmaceutical ingredients sourcing. The Company expects to pay $ 306 million of these commitments in 2015. | |||
(iv) Investment commitments | |||
At March 31, 2015 the Company had outstanding commitments to subscribe for interests in companies and partnerships for amounts totaling $ 58 million (December 31, 2014: $ 67 million) which may all be payable in 2015, depending on the timing of capital calls. The investment commitments include additional funding to certain VIEs of which Shire is not the primary beneficiary. | |||
(v) Capital commitments | |||
At March 31, 2015 the Company had committed to spend $ 9 million (December 31, 2014: $ 3 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 March 31, 2015, provisions for litigation losses, insurance claims and other disputes totaled $26.0 million (December 31, 2014: $16.9 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 against the aforementioned parties (except Watson Laboratories, Inc., who withdrew their ANDA). | |||
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 (“CAFC”), 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 CAFC. Oral argument has been scheduled to occur on May 6, 2015. | |||
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 took place on January 29, 2015. The previously scheduled trial date has been vacated; at present, there is no trial date. | |||
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. The Court issued an Order on February 27, 2015 in which all dates in the scheduling order have been stayed. | |||
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 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 petitioned the Supreme Court for a writ of certiori, which was granted on January 26, 2015. The Supreme Court also vacated the CAFC decision and remanded the case to the CAFC for further consideration in light of the Supreme Court's recent decision in Teva v Sandoz. The remanded case has been briefed to the CAFC. No dates have been set for oral argument. | |||
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 took place on December 22, 2014. A trial is scheduled during the court's trial term beginning on September 1, 2015. | |||
In March 2015, Shire was notified that Amneal Pharmaceuticals LLC 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 New Jersey against Amneal Pharmaceuticals LLC, Amneal Pharmaceuticals of New York, LLC and Amneal Pharmaceuticals Co. India Pvt. Ltd. No trial date has been set. | |||
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. | |||
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 State of Sao Paulo 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 | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||
Accumulated Other Comprehensive Income (Loss) | 16. Accumulated Other Comprehensive loss | ||||||
The changes in accumulated other comprehensive loss, net of their related tax effects, in the three months to March 31, 2015 and 2014 are included below: | |||||||
As at March 31, 2015 | Foreign currency translation adjustment | Unrealized holding loss on available-for-sale securities | Accumulated other comprehensive loss | ||||
$M | $M | $M | |||||
As at January 1, 2015 | -25.7 | -5.8 | -31.5 | ||||
Net current period other comprehensive (loss)/income | -129.5 | 0.7 | -128.8 | ||||
As at March 31, 2015 | -155.2 | -5.1 | -160.3 | ||||
As at March 31, 2014 | 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 | -1.7 | 7.5 | 5.8 | ||||
Gain transferred to the income statement (within Other income, net) on disposal of available-for-sale securities | 0 | -3.2 | -3.2 | ||||
Net current period other comprehensive income | -1.7 | 4.3 | 2.6 | ||||
As at March 31, 2014 | 108.7 | 4.1 | 112.8 |
Financial_Instruments
Financial Instruments | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Derivative Instrument Detail [Abstract] | |||||
Financial Instruments Disclosure | 17. 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 principally exposed to interest rate risk on borrowings under its $2,100 million RCF, its $850 million 2013 Facilities Agreement and its $850 million 2015 Facility Agreement, on which interest is set at floating rates, to the extent any of these facilities are utilized. At March 31, 2015 the Company had fully utilized the 2013 Facilities Agreement, fully utilized the 2015 Facility Agreement and utilized $845 million of the RCF. Shire's exposure under its 2013 Facilities Agreement, 2015 Facility Agreement and RCF is to US dollar interest rates. | |||||
The Company has evaluated the interest rate risk on the RCF, the 2013 Facilities Agreement and the 2015 Facility Agreement and considers the risks associated with floating interest rates on borrowings under its facilities as appropriate. A hypothetical one percentage point increase or decrease in the interest rates applicable to drawings under the 2013 Facilities Agreement, 2015 Facility Agreement and RCF at March 31, 2015 would increase interest expense by approximately $25 million per annum and would decrease the interest expense by approximately $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 set at floating rates. This exposure is primarily limited to US dollar, Pounds sterling and Euro 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 three months to March 31, 2015 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 three months to March 31, 2015 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, 2014 there were three customers in the US that accounted for 47% 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 global and national economic conditions have negatively affected the growth, creditworthiness and general economic condition of certain markets in which the Company operates. As a result, in some countries outside of the US, specifically, Argentina, Greece, Italy, Portugal and Spain (collectively the “Relevant 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 three months March 31, 2015, including receipts of $17.1 million and $17.4 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, Canadian dollar 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 inter-company 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 March 31, 2015 the Company had 40 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 March 31, 2015 the potential effect of rights of set-off associated with the foreign exchange contracts would be an offset to both assets and liabilities of $1.5 million, resulting in net derivative assets and derivative liabilities of $9.4 million and $4.0 million, respectively. Further details are included below: | |||||
Fair value | Fair value | ||||
March 31, | December 31, | ||||
2015 | 2014 | ||||
$’M | $’M | ||||
_____________ | _____________ | ||||
Assets | Prepaid expenses and other current assets | 10.9 | 12.6 | ||
Liabilities | Other current liabilities | 5.5 | 7.8 | ||
_____________ | _____________ | ||||
Net gains (both realized and unrealized) arising on foreign exchange contracts have been classified in the consolidated statements of income as follows: | |||||
Location of net gains recognized in income | Amount of net gains recognized in income | ||||
__________________________________ | ____________ | ||||
In the three months to | March 31, | March 31, | |||
2015 | 2014 | ||||
$’M | $’M | ||||
_____________ | _____________ | ||||
Foreign exchange contracts | Other income, net | 16.3 | 1.8 | ||
_____________ | _____________ | ||||
These net foreign exchange gains 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 | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
Fair Value Disclosures [Abstract] | ||||||
Fair Value Disclosures | 18. Fair value measurement | |||||
Assets and liabilities that are measured at fair value on a recurring basis | ||||||
As at March 31, 2015 and December 31, 2014 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 value and Fair value | ||||||
Total | Level 1 | Level 2 | Level 3 | |||
At March 31, 2015 | $'M | $'M | $'M | $'M | ||
____________ | ___________ | ___________ | ___________ | |||
Financial assets: | ||||||
Available-for-sale securities(1) | 26.4 | 26.4 | - | - | ||
Contingent consideration receivable (2) | 15 | - | - | 15 | ||
Foreign exchange contracts | 10.9 | - | 10.9 | - | ||
Financial liabilities: | ||||||
Foreign exchange contracts | 5.5 | - | 5.5 | - | ||
Contingent consideration payable(3) | 724 | - | - | 724 | ||
____________ | ___________ | ___________ | ___________ | |||
Total | Level 1 | Level 2 | Level 3 | |||
At December 31, 2014 | $'M | $'M | $'M | $'M | ||
____________ | ___________ | ___________ | ___________ | |||
Financial assets: | ||||||
Available-for-sale securities(1) | 13.1 | 13.1 | - | - | ||
Contingent consideration receivable (2) | 15.9 | - | - | 15.9 | ||
Foreign exchange contracts | 12.6 | - | 12.6 | - | ||
Financial liabilities: | ||||||
Foreign exchange contracts | 7.8 | - | 7.8 | - | ||
Contingent consideration payable(3) | 1 | 629.9 | - | - | 629.9 | |
____________ | ___________ | ___________ | ___________ | |||
Available-for-sale securities are included within Investments and Prepaid expenses and other current assets 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 | ||||||
2015 | 2014 | |||||
$'M | $'M | |||||
____________ | ____________ | |||||
Balance at January 1, | 15.9 | 36.1 | ||||
Initial recognition of contingent consideration receivable | - | 33.6 | ||||
Gain/(loss) recognized in the income statement (within Gain on sale of product rights) due to change in fair value during the period | 5.2 | -7.1 | ||||
Reclassification of amounts to Other receivables within Other current assets | -5.9 | -4 | ||||
Amounts recorded to other comprehensive income (within foreign currency translation adjustments) | -0.2 | 0.8 | ||||
Balance at March 31, | 15 | 59.4 | ||||
Contingent consideration payable | ||||||
2015 | 2014 | |||||
$'M | $'M | |||||
____________ | ____________ | |||||
Balance at January 1, | 629.9 | 405.9 | ||||
Initial recognition of contingent consideration payable | 92.1 | 10 | ||||
Change in fair value during the period with the corresponding adjustment recognized as a loss in the income statement (within Integration and acquisition costs) | 2.4 | -59.2 | ||||
Reclassification of amounts to Other current liabilities | -2.1 | -2.4 | ||||
Change in fair value during the period with corresponding adjustment to the associated intangible asset | -0.7 | -4 | ||||
Amounts recorded to other comprehensive income (within foreign currency translation adjustments) | 2.4 | - | ||||
Balance at March 31, | 724 | 350.3 | ||||
Of the $724.0 million of contingent consideration payable as at March 31, 2015 $166.2 million is recorded within other current liabilities and $557.8 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 March 31, 2015 | Fair value | Valuation Technique | Significant unobservable Inputs | Range | ||
$'M | ||||||
____________ | ___________ | ___________ | ___________ | |||
Contingent consideration receivable ("CCR") | 15 | 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% • $25 million to $33 million • 8.3% to 11.5% | ||
____________ | ____________ | ____________ | ____________ | |||
Financial liabilities: | Fair Value at the Measurement Date | |||||
At March 31, 2015 | Fair value | Valuation Technique | Significant unobservable Inputs | Range | ||
$'M | ||||||
____________ | ___________ | ___________ | ___________ | |||
Contingent consideration payable | 724 | 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% • 0.6 to 11.8% • 2015 to 2030 • $0.2 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. | ||||||
The carrying amounts of other financial assets and liabilities materially approximate to their fair value either because of the short-term maturity of these amounts or because there have been no significant changes since the asset or liability was last re-measured to fair value on a non-recurring basis. |
Earnings_Per_Share
Earnings Per Share | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Earnings Per Share [Abstract] | |||||
Earnings Per Share Disclosure | 19. 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 | ||||
March 31, | March 31, | ||||
2015 | 2014 | ||||
$’M | $’M | ||||
_________________ | _________________ | ||||
Income from continuing operations, net of taxes | 412.9 | 253.1 | |||
Loss from discontinued operations1 | -2.5 | -22.7 | |||
_________________ | _________________ | ||||
Numerator for basic and diluted earnings per share | 410.4 | 230.4 | |||
_________________ | _________________ | ||||
Weighted average number of shares: | |||||
Millions | Millions | ||||
_________________ | _________________ | ||||
Basic 1 | 589.1 | 584.3 | |||
Effect of dilutive shares: | |||||
Share-based awards to employees 2 | 3.6 | 4.5 | |||
_________________ | _________________ | ||||
Diluted | 592.7 | 588.8 | |||
_________________ | _________________ | ||||
1. Excludes shares purchased by the EBT and presented by Shire as treasury stock. | |||||
2. Calculated using the treasury stock 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 | ||||
March 31, | March 31, | ||||
2015 | 2014 | ||||
No. of shares | No. of shares | ||||
Millions | Millions | ||||
_________________ | _________________ | ||||
Share-based awards to employees1 | 1.4 | 0.8 | |||
_________________ | _________________ | ||||
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 | 3 Months Ended | ||
Mar. 31, 2015 | |||
Segment Reporting [Abstract] | |||
Segment Reporting Disclosure | 20. 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 Corporate 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 which focuses on commercialized products. The In-Line marketed products group has commercial units that focus exclusively on the commercial execution of its marketed products including in the areas of Rare Diseases, Neuroscience, and Gastrointestinal (“GI”) and Internal Medicine, and to support the development of our pipeline candidates, in Ophthalmics. This ensures that the Company provides innovative treatments, and services the needs of its customers and patients, as efficiently as possible. 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: | |||
3 months to | March 31, | March 31, | |
2015 | 2014 | ||
$’M | $’M | ||
___________ | ___________ | ||
VYVANSE | 416.8 | 351.2 | |
LIALDA/MEZAVANT | 148.5 | 128.9 | |
CINRYZE | 148.1 | 85.6 | |
ELAPRASE | 125 | 128.6 | |
REPLAGAL | 97.5 | 114.3 | |
ADDERALL XR | 95.7 | 85.1 | |
FIRAZYR | 92.5 | 74.9 | |
VPRIV | 86.4 | 86.9 | |
PENTASA | 78.7 | 72.3 | |
FOSRENOL | 44.1 | 41.4 | |
XAGRID | 25.3 | 27.1 | |
INTUNIV | 17.4 | 82.3 | |
GATTEX/REVESTIVE | 14.9 | - | |
Other product sales | 32.3 | 29.5 | |
____________ | ____________ | ||
Total product sales | 1,423.20 | 1,308.10 | |
____________ | ____________ |
Related_Parties
Related Parties | 3 Months Ended |
Mar. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Disclosure | 21. Related parties |
Shire considers that ArmaGen, Inc. (“ArmaGen”) is a related party by virtue of a combination of Shire's equity stake in ArmaGen and the worldwide licensing and collaboration agreement between the two parties to develop and commercialize AGT-182. In the three months to March 31, 2015 Shire paid $2.5 million in cash to ArmaGen in exchange for an additional equity stake in ArmaGen, following which Shire holds approximately 21% of ArmaGen's issued equity. In addition, Shire recorded a credit to R&D costs of $0.4 million in the first quarter of 2015, reflecting the Company's share of expenditure under the licensing and collaboration arrangement. No amounts were due to or from ArmaGen as at March 31, 2015. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
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, 2014 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, 2014. | |
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 |
Adopted during the period | |
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. | |
Shire adopted this guidance in the period, which will be effective for discontinued operations occurring after January 1, 2015. The adoption of this guidance did not impact the Company's consolidated financial position, results of operations or cash flows. | |
To be adopted in future periods | |
Revenue from Contracts with Customers | |
In May 2014 the FASB and the International Accounting Standards Board (together the “Accounting Standards 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 Standards 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. | |
In April 2015 the FASB proposed to defer the effective date of the guidance by one year. Based on this proposal, public entities would need to apply the new guidance for annual reporting periods beginning after December 15, 2017, and interim periods therein. The Company is currently evaluating the impact of adopting this guidance. | |
Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities (“VIEs”) 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 with respect to development stage entities in Topic 810, Consolidation, for determining whether an entity is a VIE 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 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 both of these 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. | |
Amendments to the Consolidation Analysis | |
In February 2015 the FASB issued guidance to respond to stakeholders' concerns about the current accounting for consolidation of certain legal entities. Financial statement users asserted that in certain situations in which consolidation is ultimately required, deconsolidated financial statements are necessary to better analyze the reporting entity's economic and operational results. Previously, the FASB issued an indefinite deferral for certain entities to partially address those concerns. However, the amendments in this guidance rescind that deferral and address those concerns by making changes to the consolidation guidance. | |
Under the amendments, all reporting entities are within the scope of Subtopic 810-10, Consolidation, including limited partnerships and similar legal entities, unless a scope exception applies. The presumption that a general partner controls a limited partnership has been eliminated. In addition, fees paid to decision makers that meet certain conditions no longer cause decision makers to consolidate a VIE in certain instances. The amendments place more emphasis in the consolidation evaluation on variable interests other than fee arrangements such as principal investment risk (for example, debt or equity interests), guarantees of the value of the assets or liabilities of the VIE, written put options on the assets of the VIE, or similar obligations, including some liquidity commitments or agreements (explicit or implicit). Additionally, the amendments reduce the extent to which related party arrangements cause an entity to be considered a primary beneficiary. | |
The amendments are effective for public business entities for fiscal years, and for interim periods therein, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. 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. | |
Simplifying the Presentation of Debt Issuance Costs | |
In April 2015 the FASB issued guidance to simplify the presentation of debt issuance costs. The guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this update. The amendments in this update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods therein. | |
Early adoption of the amendments in this update is permitted for financial statements that have not been previously issued. An entity should apply the new guidance on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. Upon transition, an entity is required to comply with the applicable disclosures for a change in an accounting principle. 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) | 3 Months Ended | ||
Mar. 31, 2015 | |||
NPS Pharma | |||
Business Acquisition [Line Items] | |||
Schedule of Purchase Price Allocation | Preliminary | ||
Fair value | |||
$’M | |||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | 41.6 | ||
Short-term investments | 67 | ||
Accounts receivable | 31.7 | ||
Inventories | 51.1 | ||
Deferred tax assets | 151.5 | ||
Other current assets | 10.1 | ||
_______________ | |||
Total current assets | 353 | ||
Non-current assets: | |||
PPE | 4.2 | ||
Goodwill | 1,691.60 | ||
Other intangible assets | |||
- currently marketed products | 4,670.00 | ||
- royalty rights (categorized as "Other amortized intangible assets" ) | 353.0 | ||
_______________ | |||
Total assets | 7,071.80 | ||
_______________ | |||
LIABILITIES | |||
Current liabilities: | |||
Accounts payable and other current liabilities | 72.5 | ||
Short-term debt | 27.4 | ||
Non-current liabilities: | |||
Long-term debt, less current portion | 78.9 | ||
Deferred tax liabilities | 1,671.00 | ||
Other non-current liabilities | 4.2 | ||
_______________ | |||
Total liabilities | 1,854.00 | ||
_______________ | |||
Fair value of identifiable assets acquired and liabilities assumed | 5,217.80 | ||
Consideration | _______________ | ||
Cash consideration paid | 5,217.80 | ||
_______________ | |||
Business Acquisition, Pro Forma Information | 3 months to | 3 months to | |
March 31, | March 31, | ||
2015 | 2014 | ||
$’M | $’M | ||
_______________ | _______________ | ||
Revenues | 1,518.30 | 1,390.80 | |
Net income from continuing operations | 358.8 | 85.8 | |
_______________ | _______________ | ||
Per share amounts: | |||
Net income from continuing operations per share - basic | 60.9c | 14.7c | |
Net income from continuing operations per share - diluted | 60.5c | 14.6c | |
_______________ | _______________ | ||
Viropharma | |||
Business Acquisition [Line Items] | |||
Schedule of Purchase Price Allocation | |||
Acquisition date 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 | 100.7 | ||
Purchased call option | 346.7 | ||
Other current assets | 50.9 | ||
_______________ | |||
Total current assets | 1,044.50 | ||
Non-current assets: | |||
PPE | 24.7 | ||
Goodwill | 1,655.50 | ||
Other intangible assets | |||
- Currently marketed products | 2,320.00 | ||
- In-Process Research and Development (“IPR&D”) | 315.0 | ||
Other non-current assets | 10.4 | ||
_______________ | |||
Total assets | 5,370.10 | ||
_______________ | |||
LIABILITIES | |||
Current liabilities: | |||
Accounts payable and other current liabilities | 122.7 | ||
Convertible bond | 551.4 | ||
Non-current liabilities: | |||
Deferred tax liabilities | 603.5 | ||
Other non-current liabilities | 95.5 | ||
_______________ | |||
Total liabilities | 1,373.10 | ||
_______________ | |||
Fair value of identifiable assets acquired and liabilities assumed | 3,997.00 | ||
_______________ | |||
Consideration | |||
Cash consideration paid | 3,997.00 | ||
_______________ |
Reorganization_costs_Table
Reorganization costs (Table) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Restructuring and Related Activities [Abstract] | |||||
Schedule of Reorganization costs | |||||
Opening liability | Amount | Closing liability at | |||
at January 1, | charged to re- | March 31, | |||
2015 | organization | Paid/Utilized | 2015 | ||
$'M | $'M | $'M | $'M | ||
___________ | ____________ | ___________ | ___________ | ||
Involuntary termination benefits | 38 | 9.4 | -5.1 | 42.3 | |
Other reorganization costs | - | 5.8 | -5 | 0.8 | |
___________ | ___________ | ___________ | ___________ | ||
38 | 15.2 | -10.1 | 43.1 | ||
___________ | ___________ | ___________ | ___________ |
Accounts_Receivable_Net_Tables
Accounts Receivable, Net (Tables) | 3 Months Ended | ||
Mar. 31, 2015 | |||
Receivables [Abstract] | |||
Provision for discounts and doubtful accounts | 2015 | 2014 | |
$’M | $’M | ||
_____________ | _____________ | ||
As at January 1, | 48.5 | 47.9 | |
Provision charged to operations | 80.8 | 80.7 | |
Provision utilization | -82.6 | -81.2 | |
_____________ | _____________ | ||
As at March 31, | 46.7 | 47.4 | |
_____________ | _____________ |
Inventories_Tables
Inventories (Tables) | 3 Months Ended | ||
Mar. 31, 2015 | |||
Inventory Disclosure [Abstract] | |||
Schedule of Inventory | March 31, | December 31, | |
2015 | 2014 | ||
$’M | $’M | ||
____________ | ____________ | ||
Finished goods | 137.8 | 136 | |
Work-in-progress | 307.4 | 305.3 | |
Raw materials | 143.5 | 103.5 | |
____________ | ____________ | ||
588.7 | 544.8 | ||
____________ | ____________ |
Results_of_discontinued_operat1
Results of discontinued operations (Table) | 3 Months Ended | ||
Mar. 31, 2015 | |||
DiscontinuedOperationIncomeLossFromDiscontinuedOperationDisclosuresAbstract | |||
Schedule of discontinued operations | 3 months to | 3 months to | |
March 31, | March 31, | ||
2015 | 2014 | ||
$’M | $’M | ||
Revenues: | _______________ | _______________ | |
Product revenues | - | 1.9 | |
_______________ | _______________ | ||
Loss from discontinued operations before income taxes | -3.9 | -35.8 | |
Income taxes | 1.4 | 13.1 | |
_______________ | _______________ | ||
Loss from discontinued operations, net of taxes | -2.5 | -22.7 | |
_______________ | _______________ |
Prepaid_Expenses_and_Other_Cur1
Prepaid Expenses and Other Current Assets (Tables) | 3 Months Ended | ||
Mar. 31, 2015 | |||
Prepaid Expense and Other Assets, Current [Abstract] | |||
Prepaid Expense and Other Assets, Current | March 31, | December 31, | |
2015 | 2014 | ||
$’M | $’M | ||
______________ | ____________ | ||
Prepaid expenses | 72.9 | 36.9 | |
Income tax receivable | 68.8 | 121.5 | |
Value added taxes receivable | 15 | 13.8 | |
Other current assets | 59.9 | 49.3 | |
______________ | ______________ | ||
216.6 | 221.5 | ||
______________ | ______________ |
Goodwill_Tables
Goodwill (Tables) | 3 Months Ended | ||
Mar. 31, 2015 | |||
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Schedule of Acquired Goodwill | March 31, | December 31, | |
2015 | 2014 | ||
$’M | $’M | ||
____________ | ____________ | ||
Goodwill arising on businesses acquired | 4,178.70 | 2,474.90 | |
____________ | ____________ | ||
Schedule of Goodwill | 2015 | 2014 | |
$’M | $’M | ||
____________ | ____________ | ||
As at January 1, | 2,474.90 | 624.6 | |
Acquisitions | 1,732.70 | 1,536.60 | |
Foreign currency translation | -28.9 | - | |
____________ | ____________ | ||
As at March 31, | 4,178.70 | 2,161.20 | |
____________ | ____________ |
Other_Intangible_Assets_Net_Ta
Other Intangible Assets, Net (Tables) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||||
Schedule of Other Intangible Assets | March 31, | December 31, | ||
2015 | 2014 | |||
$’M | $’M | |||
________________ | ________________ | |||
Amortized intangible assets | ||||
Intellectual property rights acquired for currently marketed products | 9,404.00 | 4,816.90 | ||
Other intangible assets | 375 | 30 | ||
________________ | ________________ | |||
9,779.00 | 4,846.90 | |||
Unamortized intangible assets | ||||
Intellectual property rights acquired for IPR&D | 1,724.50 | 1,550.00 | ||
________________ | ________________ | |||
11,503.50 | 6,396.90 | |||
Less: Accumulated amortization | -1,523.50 | -1,462.50 | ||
________________ | ________________ | |||
9,980.00 | 4,934.40 | |||
________________ | ________________ | |||
Intangible Assets (Excluding Goodwill) Roll Forward | Other intangible assets | |||
3 months to | 3 months to | |||
March 31, | March 31, | |||
2015 | 2014 | |||
$’M | $’M | |||
________________ | ________________ | |||
As at January 1, | 4,934.40 | 2,312.60 | ||
Acquisitions | 5,198.00 | 2,854.00 | ||
Amortization charged | -88.3 | -57.8 | ||
Impairment charges | - | -166 | ||
Foreign currency translation | -64.1 | 0.6 | ||
________________ | ________________ | |||
As at March 31, | 9,980.00 | 4,943.40 | ||
________________ | ________________ |
Accounts_Payable_and_Accrued_E1
Accounts Payable and Accrued Expenses (Tables) | 3 Months Ended | ||
Mar. 31, 2015 | |||
Accounts Payable and Accrued Liabilities, Current [Abstract] | |||
Schedule of Accounts Payable and Accrued Expenses | March 31, | December 31, | |
2015 | 2014 | ||
$’M | $’M | ||
________________ | ________________ | ||
Trade accounts payable and accrued purchases | 384.1 | 247.7 | |
Accrued rebates – Medicaid | 555.9 | 563.9 | |
Accrued rebates – Managed care | 306.8 | 318.2 | |
Sales return reserve | 134.8 | 131.7 | |
Accrued bonuses | 72.6 | 150.7 | |
Accrued employee compensation and benefits payable | 174 | 109.1 | |
R&D accruals | 55.9 | 88.3 | |
Other accrued expenses | 307.5 | 299.8 | |
________________ | ________________ | ||
1,991.60 | 1,909.40 | ||
________________ | ________________ |
Other_Current_Liabilities_Tabl
Other Current Liabilities (Tables) | 3 Months Ended | ||
Mar. 31, 2015 | |||
Other Liabilities, Current [Abstract] | |||
Schedule of Other Current Liabilities | March 31, | December 31, | |
2015 | 2014 | ||
$’M | $’M | ||
_____________ | _____________ | ||
Income taxes payable | 25.8 | 16.2 | |
Value added taxes | 18 | 16.6 | |
Contingent consideration payable | 166.2 | 194.5 | |
Other current liabilities | 93.2 | 35.2 | |
_____________ | _____________ | ||
303.2 | 262.5 | ||
_____________ | _____________ |
Borrowings_Tables
Borrowings (Tables) | 3 Months Ended | ||
Mar. 31, 2015 | |||
Debt Disclosure [Abstract] | |||
Schedule of Borrowings | March 31, | December 31, | |
2015 | 2014 | ||
$’M | $’M | ||
_____________ | _____________ | ||
Short term borrowings: | |||
Borrowings under the 2015 Facilities Agreement | 850 | - | |
Borrowings under the 2013 Facilities Agreement | 850 | 850 | |
Borrowings under the RCF | 845 | - | |
Secured non-recourse debts | 25.2 | - | |
_____________ | _____________ | ||
2,570.20 | 850 | ||
Long term borrowings: | |||
Secured non-recourse debts | 78.7 | - | |
_____________ | _____________ | ||
2,648.90 | 850 | ||
_____________ | _____________ |
Other_Noncurrent_Liabilities_T
Other Non-current Liabilities (Tables) | 3 Months Ended | ||
Mar. 31, 2015 | |||
Other Liabilities, Noncurrent [Abstract] | |||
Schedule of Other Noncurrent Liabilities | March 31, | December 31, | |
2015 | 2014 | ||
$’M | $’M | ||
____________ | ____________ | ||
Income taxes payable | 180.7 | 199.2 | |
Deferred revenue | 6.7 | 7.2 | |
Deferred rent | 6.2 | 6.6 | |
Contingent consideration payable | 557.8 | 435.4 | |
Other non-current liabilities | 92.6 | 88.3 | |
____________ | ____________ | ||
844 | 736.7 | ||
____________ | ____________ |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 3 Months Ended | ||
Mar. 31, 2015 | |||
Commitments and Contingencies Disclosure [Abstract] | |||
Future Minimum Lease Payments under Operating Leases | Operating | ||
leases | |||
$’M | |||
_____________ | |||
2015 | 1 | 30.6 | |
2016 | 1 | 26.4 | |
2017 | 1 | 30.2 | |
2018 | 1 | 25.4 | |
2019 | 1 | 19.4 | |
2020 | 19.3 | ||
Thereafter | 1 | 125.2 | |
111 | _____________ | ||
276.5 | |||
_____________ |
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Tables) | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||
Changes in Accumulated Other Comprehensive Income, Net of Tax | As at March 31, 2015 | Foreign currency translation adjustment | Unrealized holding loss on available-for-sale securities | Accumulated other comprehensive loss | |||
$M | $M | $M | |||||
As at January 1, 2015 | -25.7 | -5.8 | -31.5 | ||||
Net current period other comprehensive (loss)/income | -129.5 | 0.7 | -128.8 | ||||
As at March 31, 2015 | -155.2 | -5.1 | -160.3 | ||||
As at March 31, 2014 | 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 | -1.7 | 7.5 | 5.8 | ||||
Gain transferred to the income statement (within Other income, net) on disposal of available-for-sale securities | 0 | -3.2 | -3.2 | ||||
Net current period other comprehensive income | -1.7 | 4.3 | 2.6 | ||||
As at March 31, 2014 | 108.7 | 4.1 | 112.8 |
Financial_Instruments_Tables
Financial Instruments (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Derivative Instrument Detail [Abstract] | |||||
Schedule of Foreign Exchange Contracts, Statement of Financial Position | Fair value | Fair value | |||
March 31, | December 31, | ||||
2015 | 2014 | ||||
$’M | $’M | ||||
_____________ | _____________ | ||||
Assets | Prepaid expenses and other current assets | 10.9 | 12.6 | ||
Liabilities | Other current liabilities | 5.5 | 7.8 | ||
_____________ | _____________ | ||||
Schedule of Foreign Exchange Contracts, Gain (Loss) in Other Income (Expense) | Location of net gains recognized in income | Amount of net gains recognized in income | |||
__________________________________ | ____________ | ||||
In the three months to | March 31, | March 31, | |||
2015 | 2014 | ||||
$’M | $’M | ||||
_____________ | _____________ | ||||
Foreign exchange contracts | Other income, net | 16.3 | 1.8 | ||
_____________ | _____________ |
Fair_Value_Measurement_Tables
Fair Value Measurement (Tables) | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
Fair Value Disclosures [Abstract] | ||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | Carrying value and Fair value | |||||
Total | Level 1 | Level 2 | Level 3 | |||
At March 31, 2015 | $'M | $'M | $'M | $'M | ||
____________ | ___________ | ___________ | ___________ | |||
Financial assets: | ||||||
Available-for-sale securities(1) | 26.4 | 26.4 | - | - | ||
Contingent consideration receivable (2) | 15 | - | - | 15 | ||
Foreign exchange contracts | 10.9 | - | 10.9 | - | ||
Financial liabilities: | ||||||
Foreign exchange contracts | 5.5 | - | 5.5 | - | ||
Contingent consideration payable(3) | 724 | - | - | 724 | ||
____________ | ___________ | ___________ | ___________ | |||
Total | Level 1 | Level 2 | Level 3 | |||
At December 31, 2014 | $'M | $'M | $'M | $'M | ||
____________ | ___________ | ___________ | ___________ | |||
Financial assets: | ||||||
Available-for-sale securities(1) | 13.1 | 13.1 | - | - | ||
Contingent consideration receivable (2) | 15.9 | - | - | 15.9 | ||
Foreign exchange contracts | 12.6 | - | 12.6 | - | ||
Financial liabilities: | ||||||
Foreign exchange contracts | 7.8 | - | 7.8 | - | ||
Contingent consideration payable(3) | 1 | 629.9 | - | - | 629.9 | |
____________ | ___________ | ___________ | ___________ | |||
Available-for-sale securities are included within Investments and Prepaid expenses and other current assets 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 | |||||
2015 | 2014 | |||||
$'M | $'M | |||||
____________ | ____________ | |||||
Balance at January 1, | 15.9 | 36.1 | ||||
Initial recognition of contingent consideration receivable | - | 33.6 | ||||
Gain/(loss) recognized in the income statement (within Gain on sale of product rights) due to change in fair value during the period | 5.2 | -7.1 | ||||
Reclassification of amounts to Other receivables within Other current assets | -5.9 | -4 | ||||
Amounts recorded to other comprehensive income (within foreign currency translation adjustments) | -0.2 | 0.8 | ||||
Balance at March 31, | 15 | 59.4 | ||||
Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobervable Inputs (Level 3) | Contingent consideration payable | |||||
2015 | 2014 | |||||
$'M | $'M | |||||
____________ | ____________ | |||||
Balance at January 1, | 629.9 | 405.9 | ||||
Initial recognition of contingent consideration payable | 92.1 | 10 | ||||
Change in fair value during the period with the corresponding adjustment recognized as a loss in the income statement (within Integration and acquisition costs) | 2.4 | -59.2 | ||||
Reclassification of amounts to Other current liabilities | -2.1 | -2.4 | ||||
Change in fair value during the period with corresponding adjustment to the associated intangible asset | -0.7 | -4 | ||||
Amounts recorded to other comprehensive income (within foreign currency translation adjustments) | 2.4 | - | ||||
Balance at March 31, | 724 | 350.3 | ||||
Fair Value Inputs, Assets Quantitative Information Table | Financial assets: | Fair Value at the Measurement Date | ||||
At March 31, 2015 | Fair value | Valuation Technique | Significant unobservable Inputs | Range | ||
$'M | ||||||
____________ | ___________ | ___________ | ___________ | |||
Contingent consideration receivable ("CCR") | 15 | 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% • $25 million to $33 million • 8.3% to 11.5% | ||
____________ | ____________ | ____________ | ____________ | |||
Fair Value Inputs, Liabilities Quantitative Information Table | Financial liabilities: | Fair Value at the Measurement Date | ||||
At March 31, 2015 | Fair value | Valuation Technique | Significant unobservable Inputs | Range | ||
$'M | ||||||
____________ | ___________ | ___________ | ___________ | |||
Contingent consideration payable | 724 | 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% • 0.6 to 11.8% • 2015 to 2030 • $0.2 to $7.6 million | ||
____________ | ____________ | ____________ | ____________ |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Earnings Per Share [Abstract] | |||||
Schedule of Calculation of Numerator and Denominator in Earnings Per Share | 2015 | 2014 | |||
$’M | $’M | ||||
_________________ | _________________ | ||||
Income from continuing operations, net of taxes | 412.9 | 253.1 | |||
Loss from discontinued operations1 | -2.5 | -22.7 | |||
_________________ | _________________ | ||||
Numerator for basic and diluted earnings per share | 410.4 | 230.4 | |||
_________________ | _________________ | ||||
Schedule of Weighted Average Number of Shares | Weighted average number of shares: | ||||
Millions | Millions | ||||
_________________ | _________________ | ||||
Basic 1 | 589.1 | 584.3 | |||
Effect of dilutive shares: | |||||
Share-based awards to employees 2 | 3.6 | 4.5 | |||
_________________ | _________________ | ||||
Diluted | 592.7 | 588.8 | |||
_________________ | _________________ | ||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | 3 months to | 3 months to | |||
March 31, | March 31, | ||||
2015 | 2014 | ||||
No. of shares | No. of shares | ||||
Millions | Millions | ||||
_________________ | _________________ | ||||
Share-based awards to employees1 | 1.4 | 0.8 | |||
_________________ | _________________ |
Segmental_Reporting_Tables
Segmental Reporting (Tables) | 3 Months Ended | ||
Mar. 31, 2015 | |||
Segment Reporting [Abstract] | |||
Schedule of Segment Revenue from Major Products | 3 months to | March 31, | March 31, |
2015 | 2014 | ||
$’M | $’M | ||
___________ | ___________ | ||
VYVANSE | 416.8 | 351.2 | |
LIALDA/MEZAVANT | 148.5 | 128.9 | |
CINRYZE | 148.1 | 85.6 | |
ELAPRASE | 125 | 128.6 | |
REPLAGAL | 97.5 | 114.3 | |
ADDERALL XR | 95.7 | 85.1 | |
FIRAZYR | 92.5 | 74.9 | |
VPRIV | 86.4 | 86.9 | |
PENTASA | 78.7 | 72.3 | |
FOSRENOL | 44.1 | 41.4 | |
XAGRID | 25.3 | 27.1 | |
INTUNIV | 17.4 | 82.3 | |
GATTEX/REVESTIVE | 14.9 | - | |
Other product sales | 32.3 | 29.5 | |
____________ | ____________ | ||
Total product sales | 1,423.20 | 1,308.10 | |
____________ | ____________ |
Business_Combinations_ViroPhar
Business Combinations (ViroPharrma,NPS Pharma, Meritage) (Details) (USD $) | 3 Months Ended | 0 Months Ended | ||||
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Feb. 21, 2015 | Dec. 31, 2014 | Feb. 18, 2015 | Dec. 31, 2013 |
Non-current assets: | ||||||
Goodwill | $4,178.70 | $2,161.20 | $2,474.90 | $624.60 | ||
Pro Forma Information | ||||||
Post acquisition unwind of inventory fair value adjustment included in consolidated statement of income | 11.2 | 38.8 | ||||
Integration and acquisition costs | 75.7 | 6.6 | ||||
NPS Pharma | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of voting interests acquired | 100.00% | |||||
Cash consideration paid | 5,217.80 | |||||
Acquisition-date fair value of consideration | 5,217.80 | |||||
Current assets: | ||||||
Cash and cash equivalents | 41.6 | |||||
Short term investments | 67 | |||||
Accounts receivable | 31.7 | |||||
Inventories | 51.1 | |||||
Deferred tax assets | 151.5 | |||||
Other current assets | 10.1 | |||||
Total current assets | 353 | |||||
Non-current assets: | ||||||
Property, plant and equipment | 4.2 | |||||
Goodwill | 1,691.60 | |||||
Total assets | 7,071.80 | |||||
Current liabilities: | ||||||
Accounts payable and other current liabilities | 72.5 | |||||
Short-term debt | 27.4 | |||||
Non-current liabilities: | ||||||
Long term debt, less current portion | 78.9 | |||||
Deferred tax liabilities | 1,671 | |||||
Other non-current liabilities | 4.2 | |||||
Total liabilities | 1,854 | |||||
Fair value of identified assets acquired and liabilities assumed | 5,217.80 | |||||
Pro Forma Information | ||||||
Post acquisition revenues included in consolidated statement of income | 26.2 | |||||
Post acquisition pre-tax losses included in consolidated statement of income | 51.2 | |||||
Post acquisition amortization of intangible assets included in consolidated statement of income | 30.1 | |||||
Post acquisition unwind of inventory fair value adjustment included in consolidated statement of income | 9.9 | |||||
Post acquisition integration costs included in consolidated statement of income | 17.4 | |||||
Integration and acquisition costs | 69.9 | 0 | ||||
NPS Pharma | Currently Marketed Products | ||||||
Non-current assets: | ||||||
Other intangible assets, net | 4,670 | |||||
NPS Pharma | Currently Marketed Products | GATTEX/REVESTIVE | ||||||
Pro Forma Information | ||||||
Estimated useful life of intangible assets | 24 years | |||||
NPS Pharma | Currently Marketed Products | NATPARA/NATPAR | ||||||
Pro Forma Information | ||||||
Estimated useful life of intangible assets | 24 years | |||||
NPS Pharma | Royalty rights | ||||||
Non-current assets: | ||||||
Other intangible assets, net | 353 | |||||
Pro Forma Information | ||||||
Weighted average amortization period of acquired amortizable intangible assets | 4 years | |||||
NPS Pharma | Royalty rights | Minimum | ||||||
Pro Forma Information | ||||||
Estimated useful life of intangible assets | 4 years | |||||
NPS Pharma | Royalty rights | Maximum | ||||||
Pro Forma Information | ||||||
Estimated useful life of intangible assets | 5 years | |||||
Viropharma | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of voting interests acquired | 100.00% | |||||
Cash consideration paid | 3,997 | |||||
Acquisition-date fair value of consideration | 3,997 | |||||
Expected operational synergies that will result from combining the commercial operations of Viropharma with those of Shire | 400 | |||||
Current assets: | ||||||
Cash and cash equivalents | 232.6 | |||||
Short term investments | 57.8 | |||||
Accounts receivable | 52.2 | |||||
Inventories | 203.6 | |||||
Deferred tax assets | 100.7 | |||||
Purchased call option | 346.7 | |||||
Other current assets | 50.9 | |||||
Total current assets | 1,044.50 | |||||
Non-current assets: | ||||||
Property, plant and equipment | 24.7 | |||||
Goodwill | 1,655.50 | |||||
Other non-current assets | 10.4 | |||||
Total assets | 5,370.10 | |||||
Current liabilities: | ||||||
Accounts payable and other current liabilities | 122.7 | |||||
Short-term debt | 551.4 | |||||
Non-current liabilities: | ||||||
Deferred tax liabilities | 603.5 | |||||
Other non-current liabilities | 95.5 | |||||
Total liabilities | 1,373.10 | |||||
Fair value of identified assets acquired and liabilities assumed | 3,997 | |||||
Pro Forma Information | ||||||
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 | 3.3 | 65.8 | ||||
Viropharma | Currently Marketed Products | ||||||
Non-current assets: | ||||||
Other intangible assets, net | 2,320 | |||||
Pro Forma Information | ||||||
Weighted average amortization period of acquired amortizable intangible assets | 22 years | |||||
Viropharma | Currently Marketed Products | Minimum | ||||||
Pro Forma Information | ||||||
Estimated useful life of intangible assets | 10 years | |||||
Viropharma | Currently Marketed Products | Maximum | ||||||
Pro Forma Information | ||||||
Estimated useful life of intangible assets | 23 years | |||||
Viropharma | IPR&D | ||||||
Non-current assets: | ||||||
Other intangible assets, net | 315 | |||||
Meritage | ||||||
Business Acquisition [Line Items] | ||||||
Cash consideration paid | 74.8 | |||||
Acquisition-date fair value of consideration | 166.9 | |||||
Maximum amount of contingent cash consideration | 175 | |||||
Fair value of contingent consideration payable | 92.1 | |||||
Current assets: | ||||||
Total current assets | 5.5 | |||||
Non-current assets: | ||||||
Goodwill | 41.1 | |||||
Non-current liabilities: | ||||||
Total liabilities | 54.7 | |||||
Fair value of identified assets acquired and liabilities assumed | 166.9 | |||||
Meritage | IPR&D | OBS | ||||||
Non-current assets: | ||||||
Other intangible assets, net | $175 |
Business_Combinations_Pro_Form
Business Combinations (Pro Forma Information) (Details) (NPS Pharma, USD $) | 3 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
NPS Pharma | ||
Pro Forma Information | ||
Revenues | $1,518.30 | $1,390.80 |
Net income from continuing operations | 358.8 | 85.8 |
Net income from continuing operations per share - basic | $0.61 | $0.15 |
Net income from continuing operations per share - diluted | $0.61 | $0.15 |
Pro Forma Data Adjustments | ||
An adjustment to increase amortization of intangible assets | -21.1 | -42.3 |
Increase/(decrease) to net income to reflect acquisition related costs | 106.8 | -106.8 |
Decrease to net income to reflect the additional interest expense | -5.6 | |
Increase/(decrease) to net income to reflect the fair value adjustment to acquisition date inventory. | $6.10 | ($6.10) |
Reorganization_Costs_Details
Reorganization Costs (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
number | ||
Restructuring and Related Cost [Line Items] | ||
Reorganization costs | $15.20 | $49.40 |
Reorganization cost incurred to date | 260.7 | |
Reorganizations costs, expected costs | 115 | |
Restructuring Reserve [Roll Forward] | ||
Reorganization Reserve Opening liability | 38 | |
Amounts charged to re-organization | 15.2 | 49.4 |
Reorganization liability, Paid and Utilized | -10.1 | |
Reorganization Reserve Closing liability | 43.1 | |
Number of divisions | 3 | |
Involuntary termination benefits | ||
Restructuring and Related Cost [Line Items] | ||
Reorganization costs | 9.4 | |
Restructuring Reserve [Roll Forward] | ||
Reorganization Reserve Opening liability | 38 | |
Amounts charged to re-organization | 9.4 | |
Reorganization liability, Paid and Utilized | -5.1 | |
Reorganization Reserve Closing liability | 42.3 | |
Other reorganization costs | ||
Restructuring and Related Cost [Line Items] | ||
Reorganization costs | 5.8 | |
Restructuring Reserve [Roll Forward] | ||
Reorganization Reserve Opening liability | 0 | |
Amounts charged to re-organization | 5.8 | |
Reorganization liability, Paid and Utilized | -5 | |
Reorganization Reserve Closing liability | $0.80 |
Integration_and_acquisition_co1
Integration and acquisition costs (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Business Acquisition [Line Items] | ||
Integration and acquisition costs | $75.70 | $6.60 |
Acquisition and Integration Costs, Gross Amount | ||
Business Acquisition [Line Items] | ||
Integration and acquisition costs | 65.8 | |
Change in fair value of contingent consideration | ($59.20) |
Accounts_Receivable_Net_Detail
Accounts Receivable, Net (Details) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Provision for discounts and doubtful accounts | |||
As at January 1, | $48.50 | $47.90 | |
Provision charged to operations | 80.8 | 80.7 | |
Provision utilization | -82.6 | -81.2 | |
As at March 31, | 46.7 | 47.4 | |
Accounts receivable, net | 1,116.30 | 1,035.10 | |
Accounts receivable related to royalty income | $57.20 | $59 |
Inventories_Details
Inventories (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Schedule of Inventory | ||
Finished goods | $137.80 | $136 |
Work-in-progress | 307.4 | 305.3 |
Raw materials | 143.5 | 103.5 |
Total inventories | $588.70 | $544.80 |
Results_of_discontinued_operat2
Results of discontinued operations (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Loss from discontinued operations, net of taxes | ($2.50) | ($22.70) |
DERMAGRAFT | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Product Revenues | 0 | 1.9 |
Loss from discontinuing operations before income taxes | -3.9 | -35.8 |
Income taxes | 1.4 | 13.1 |
Loss from discontinued operations, net of taxes | ($2.50) | ($22.70) |
Prepaid_Expenses_and_Other_Cur2
Prepaid Expenses and Other Current Assets (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Prepaid Expense and Other Assets, Current [Abstract] | ||
Prepaid expenses | $72.90 | $36.90 |
Income tax receivable | 68.8 | 121.5 |
Value added taxes receivable | 15 | 13.8 |
Other current assets | 59.9 | 49.3 |
Prepaid expenses and other current assets, total | $216.60 | $221.50 |
Goodwill_Details
Goodwill (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Goodwill [Line Items] | ||
Goodwill arising on business acquired | $1,732.70 | $1,536.60 |
Goodwill [Roll Forward] | ||
As at January 1, | 2,474.90 | 624.6 |
Acquisition | 1,732.70 | 1,536.60 |
Foreign currency translation | -28.9 | 0 |
As at March 31, | $4,178.70 | $2,161.20 |
Other_Intangible_Assets_Net_De
Other Intangible Assets, Net (Details) (USD $) | 3 Months Ended | |||
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 |
Intangible Assets (Excluding Goodwill) [Line Items] | ||||
Amortized intangible assets | $9,779 | $4,846.90 | ||
Other intangible assets, gross | 11,503.50 | 6,396.90 | ||
Less: Accumulated amortization | -1,523.50 | -1,462.50 | ||
Other intangible assets, net | 9,980 | 4,943.40 | 4,934.40 | 2,312.60 |
Other Disclosures | ||||
Acquisitions | 5,198 | 2,854 | ||
Estimates of Annual Amortization | ||||
2015 | 481 | |||
2016 | 481 | |||
2017 | 481 | |||
2018 | 481 | |||
2019 | 481 | |||
NPS Pharma and Meritage, Combined | ||||
Other Disclosures | ||||
Acquisitions | 5,198 | |||
Currently Marketed Products | ||||
Intangible Assets (Excluding Goodwill) [Line Items] | ||||
Amortized intangible assets | 9,404 | 4,816.90 | ||
Royalty rights | ||||
Intangible Assets (Excluding Goodwill) [Line Items] | ||||
Amortized intangible assets | 375 | 30 | ||
IPR&D | ||||
Intangible Assets (Excluding Goodwill) [Line Items] | ||||
Unamortized intangible assets | 1,724.50 | 1,550 | ||
IPR&D | Meritage | ||||
Other Disclosures | ||||
Acquisitions | 175 | |||
Currently marketed products and royalty rights | NPS Pharma | ||||
Other Disclosures | ||||
Acquisitions | $5,023 |
Other_Intangible_Assets_Net_Ro
Other Intangible Assets, Net (Roll Forward) (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Other Intangible Assets Roll Forward | ||
As at January 1, | $4,934.40 | $2,312.60 |
Acquisitions | 5,198 | 2,854 |
Amortization charged | -88.3 | -57.8 |
Impairment charges | 0 | -166 |
Foreign currency translation | -64.1 | 0.6 |
As at March 31, | $9,980 | $4,943.40 |
Accounts_Payable_and_Accrued_E2
Accounts Payable and Accrued Expenses (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Accounts Payable and Accrued Liabilities, Current [Line Items] | ||
Trade accounts payable and accrued purchases | $384.10 | $247.70 |
Accrued rebates - Medicaid | 555.9 | 563.9 |
Accrued rebates - Managed care | 306.8 | 318.2 |
Sales return reserve | 134.8 | 131.7 |
Accrued bonuses | 72.6 | 150.7 |
Accrued employee compensation and benefits payable | 174 | 109.1 |
R&D accruals | 55.9 | 88.3 |
Other accrued expenses | 307.5 | 299.8 |
Accounts payable and accrued expenses, total | $1,991.60 | $1,909.40 |
Other_Current_Liabilities_Deta
Other Current Liabilities (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Other Liabilities, Current [Abstract] | ||
Income taxes payable | $25.80 | $16.20 |
Value added taxes | 18 | 16.6 |
Contingent consideration payable | 166.2 | 194.5 |
Other current liabilities | 93.2 | 35.2 |
Other current liabilities, total | $303.20 | $262.50 |
Borrowings_Details
Borrowings (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
contract | ||
Line of Credit Facility [Line Items] | ||
Long-term borrowings | $78.70 | $0 |
Short-term borrowings | 2,570.20 | 850 |
Borrowing, Long-term and Short-term ,Combined Amount | 2,648.90 | 850 |
2013 Facilities Agreement | ||
Line of Credit Facility [Line Items] | ||
Facility agreement initiation date | 11-Nov-13 | |
Facilitiy agreement total amount | 2,600 | |
Term loan facility | 850 | |
Number of term loan facilities | 2 | |
Short-term borrowings | 850 | 850 |
2015 Facility Agreement | ||
Line of Credit Facility [Line Items] | ||
Facility agreement initiation date | 11-Jan-15 | |
Facilitiy agreement total amount | 850 | |
Facility agreement expiration date | 10-Jan-16 | |
Short-term borrowings | 850 | 0 |
Secured Non-recourse Debts | ||
Line of Credit Facility [Line Items] | ||
Long-term borrowings | 78.7 | 0 |
Short-term borrowings | 25.2 | 0 |
Secured Non-recourse Debts | NPS Pharma | ||
Line of Credit Facility [Line Items] | ||
Non-recourse debt obligations, acquisition date fair value | 106.3 | |
Sensipar and Mimpara Debt, Amgen | ||
Line of Credit Facility [Line Items] | ||
Debt Instrument, Face Amount | 145 | |
Regpara Debt, DRI | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, maximum obligation | 96 | |
PTH-184 Debt, DRI | ||
Line of Credit Facility [Line Items] | ||
Debt instrument, maximum obligation | 125 | |
Term loan facility one | 2013 Facilities Agreement | ||
Line of Credit Facility [Line Items] | ||
Term loan facility | 1,750 | |
Term loan facility one | 2015 Facility Agreement | ||
Line of Credit Facility [Line Items] | ||
Term loan facility | 850 | |
Term loan facilitly two | 2013 Facilities Agreement | ||
Line of Credit Facility [Line Items] | ||
Facility agreement expiration date | 11-Nov-15 | |
Term loan facility | 850 | |
Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Facility agreement initiation date | 12-Dec-14 | |
Facilitiy agreement total amount | 2,100 | |
Facility agreement expiration date | 12-Dec-19 | |
Swingline Facility | 250 | |
Short-term borrowings | $845 | $0 |
Other_Noncurrent_Liabilities_D
Other Non-current Liabilities (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Other Liabilities, Noncurrent [Abstract] | ||
Income taxes payable | $180.70 | $199.20 |
Deferred revenue | 6.7 | 7.2 |
Deferred rent | 6.2 | 6.6 |
Contingent consideration payable | 557.8 | 435.4 |
Other non-current liabilities | 92.6 | 88.3 |
Other noncurrent liabilities, total | $844 | $736.70 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Leases, and LC and Guarantees ) (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Future Minimum Lease Payments under Operating Leases | ||
2015 | $30.60 | |
2016 | 26.4 | |
2017 | 30.2 | |
2018 | 25.4 | |
2019 | 19.4 | |
2020 | 19.3 | |
Thereafter | 125.2 | |
Future minimum lease payments, total | 276.5 | |
Operating Leases, Rent Expense | ||
Lease and rental expense | 14.2 | 13.2 |
Letters of credit and guarantees | ||
Irrevocable standby letters of credit and guarantees | $46 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Collaborative Arrangements) (Details) (Out-licensing Arrangement, USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Out-licensing arrangements | ||
Milestone payments received | $12.60 | $1 |
Other Revenues | ||
Out-licensing arrangements | ||
Milestone revenues recognized | 0.5 | 1.5 |
Product Sales | ||
Out-licensing arrangements | ||
Milestone revenues recognized | 9.2 | 12.5 |
Development Milestone | ||
Out-licensing arrangements | ||
Maximum milestone payment receivable | 39 | |
Sales Milestone | ||
Out-licensing arrangements | ||
Maximum milestone payment receivable | $46 |
Commitments_and_Contingencies_3
Commitments and Contingencies (Commitments and Loss Contingency) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Legal Matters [Line Items] | ||
Provisions for litigation loss, insurance claims and other disputes | $26 | $16.90 |
Clinical Testing | ||
Commitment [Line Items] | ||
Commitment amount | 402 | 382 |
Contract Manufacturing | ||
Commitment [Line Items] | ||
Commitment amount | 397 | 384 |
Commitments expected to be paid in next year | 154 | |
Other Purchasing Commitment | ||
Commitment [Line Items] | ||
Commitment amount | 320 | 265 |
Commitments expected to be paid in next year | 306 | |
Investment Commitment | ||
Commitment [Line Items] | ||
Commitment amount | 58 | 67 |
Capital Commitment | ||
Commitment [Line Items] | ||
Commitment amount | $9 | $3 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
As at January 1, | ($31.50) | |
Net current period other comprehensive (loss)/income | -128.8 | |
As at March 31, | -160.3 | -31.5 |
Foreign currency translation adjustment | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
As at January 1, | -25.7 | 110.4 |
Other Comprehensive (loss)/income before reclassification | -1.7 | |
Gain transferred to the income statement (within Other income),net) on disposal of available-for-sale-securities | 0 | |
Net current period other comprehensive (loss)/income | -129.5 | -1.7 |
As at March 31, | -155.2 | 108.7 |
Unrealized holding gain/(loss) on available-for-sale securities | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
As at January 1, | -5.8 | -0.2 |
Other Comprehensive (loss)/income before reclassification | 7.5 | |
Gain transferred to the income statement (within Other income),net) on disposal of available-for-sale-securities | -3.2 | |
Net current period other comprehensive (loss)/income | 0.7 | 4.3 |
As at March 31, | -5.1 | 4.1 |
Accumulated other comprehensive (loss)/income | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
As at January 1, | -31.5 | 110.2 |
Other Comprehensive (loss)/income before reclassification | 5.8 | |
Gain transferred to the income statement (within Other income),net) on disposal of available-for-sale-securities | -3.2 | |
Net current period other comprehensive (loss)/income | -128.8 | 2.6 |
As at March 31, | ($160.30) | $112.80 |
Financial_Instruments_Interest
Financial Instruments (Interest Rate and Credit Risks) (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
customer | ||
Interest rate risk | ||
Average interest rate received on cash and liquid investments | less than 1% per annum. | |
Line of Credit Facility [Line Items] | ||
Interest rate risk exposure | The Company has evaluated the interest rate risk on the RCF, the 2013 Facilities Agreement and the 2015 Facilitiy Agreement and considers the risks associated with floating interest rates on borrowings under its facilities as appropriate. A hypothetical one percentage point increase or decrease in the interest rates applicable to drawings under the 2013 Facilities Agreement, 2015 Facility Agreement and RCF at March 31, 2015 would increase interest expense by approximately $25 million per annum and would decrease the interest expense by approximately $5 million per annum. | |
Short-term borrowings | $2,570.20 | $850 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of major external customers | 3 | |
Customer concentration risk | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk percentage | 47.00% | |
Government-owned or Supported Healthcare Providers | Italy | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable received | 17.4 | |
Government-owned or Supported Healthcare Providers | Spain | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable received | 17.1 | |
Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Facilitiy agreement total amount | 2,100 | |
Short-term borrowings | 845 | 0 |
2013 Facilities Agreement | ||
Line of Credit Facility [Line Items] | ||
Term loan facility | 850 | |
Facilitiy agreement total amount | 2,600 | |
Short-term borrowings | 850 | 850 |
2015 Facility Agreement | ||
Line of Credit Facility [Line Items] | ||
Facilitiy agreement total amount | 850 | |
Short-term borrowings | $850 | $0 |
Financial_Instruments_Foreign_
Financial Instruments (Foreign Exchange Risk and Its Classification on Balance Sheet) (Details) (Foreign Exchange Contract, USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
contract | ||
Derivatives, Fair Value | ||
Net derivative fair value assets | $9.40 | |
Net derivative fair value liabilities | 4 | |
Potential effect of rights of set off associated with the foreign exchange contracts | 1.5 | |
Number of swap and forward foreign exchange contracts outstanding | 40 | |
Swaps and forward contracts maturity | 90 days | |
Prepaid expenses and other current assets | ||
Derivatives, Fair Value | ||
Assets | 10.9 | 12.6 |
Other current liabilities | ||
Derivatives, Fair Value | ||
Liabilities | $5.50 | $7.80 |
Financial_Instruments_Foreign_1
Financial Instruments (Foreign Exchange Risk and Its Effect on Income Statement) (Details) (Foreign Exchange Contract, Other income, net, USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Foreign Exchange Contract | Other income, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of net income (loss) recognized in income | $16.30 | $1.80 |
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 $) | Mar. 31, 2015 | Dec. 31, 2014 | ||
In Millions, unless otherwise specified | ||||
Estimated fair value | ||||
Financial assets: | ||||
Available-for-sale securities | $26.40 | [1] | $13.10 | [1] |
Contingent consideration receivable | 15 | [2] | 15.9 | [2] |
Foreign exchange contracts, asset | 10.9 | 12.6 | ||
Financial liabilities: | ||||
Foreign exchange contracts, liability | 5.5 | 7.8 | ||
Contingent consideration payable | 724 | [3] | 629.9 | [3] |
Level 1 | ||||
Financial assets: | ||||
Available-for-sale securities | 26.4 | [1] | 13.1 | [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 | 10.9 | 12.6 | ||
Financial liabilities: | ||||
Foreign exchange contracts, liability | 5.5 | 7.8 | ||
Contingent consideration payable | 0 | [3] | 0 | [3] |
Level 3 | ||||
Financial assets: | ||||
Available-for-sale securities | 0 | [1] | 0 | [1] |
Contingent consideration receivable | 15 | [2] | 15.9 | [2] |
Foreign exchange contracts, asset | 0 | 0 | ||
Financial liabilities: | ||||
Foreign exchange contracts, liability | 0 | 0 | ||
Contingent consideration payable | $724 | [3] | $629.90 | [3] |
[1] | Available-for-sale securities are included within Investments and Prepaid expenses and other current assets 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 $) | 3 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Change in the Fair Value of Contigent Consideration Receivable | |||
Balance at beginning of period | $15.90 | $36.10 | |
Initial recognition of contingent consideration receivable | 0 | 33.6 | |
Gain/(loss) recognized in the income statement (within Gain on sale of product rights) due to change in fair value during the period | 5.2 | -7.1 | |
Reclassification of amounts to Other receivables within Other current assets | -5.9 | -4 | |
Amounts recorded to other comprehensive income (within foreign currency translation adjustments) | -0.2 | 0.8 | |
Balance at end of period | 15 | 59.4 | |
Change in the Fair Value of Contigent Consideration Payable | |||
Balance at beginning of period | 629.9 | 405.9 | |
Initial recognition of contingent consideration payable | 92.1 | 10 | |
Change in fair value during the period with the corresponding adjustment recognized as a loss in the income statement (within Integration and acquisition costs) | 2.4 | -59.2 | |
Reclassification of amounts to Other current liabilities | -2.1 | -2.4 | |
Change in fair value during the period with corresponding adjustment to the associated intangible asset | -0.7 | -4 | |
Amounts recorded to other comprehensive income (within foreign currency translation adjustments) | 2.4 | 0 | |
Balance at end of period | 724 | 350.3 | |
Contingent consideration payable, current (within other current liabilities) | 166.2 | 194.5 | |
Contingent consideration payable, non-current (within other non-current liabilities) | $557.80 | $435.40 |
Fair_Value_Measurement_Quantit
Fair Value Measurement (Quantitative Information About Recurring and Non-recurring Level 3 Fair Value Measurements) (Details) (Recurring Basis, USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2015 |
Contingent Consideration Payable | Minimum | |
Fair Value Inputs | |
Assumed market participant discount rate | 0.60% |
Cumulative probability of milestones being achieved | 4.00% |
Periods in which milestones are expected to be achieved | 2015 |
Forecast quarterly royalties payable on net sales of relevant products | $0.20 |
Contingent Consideration Payable | Maximum | |
Fair Value Inputs | |
Assumed market participant discount rate | 11.80% |
Cumulative probability of milestones being achieved | 95.00% |
Periods in which milestones are expected to be achieved | 2030 |
Forecast quarterly royalties payable on net sales of relevant products | 7.6 |
Contingent Consideration Payable | Income approach (probability weighted discounted cash flow) | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Liabilities | 724 |
Contingent Consideration Receivable | Income approach (probability weighted discounted cash flow) | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Assets | 15 |
Contingent Consideration Receivable | Income approach (probability weighted discounted cash flow) | Minimum | |
Fair Value Inputs | |
Probability weightings applied to different sales scenarios | 10.00% |
Future forecast consideration receivable based on contractual terms with purchaser | 25 |
Assumed market participant discount rate | 8.30% |
Contingent Consideration Receivable | Income approach (probability weighted discounted cash flow) | Maximum | |
Fair Value Inputs | |
Probability weightings applied to different sales scenarios | 70.00% |
Future forecast consideration receivable based on contractual terms with purchaser | $33 |
Assumed market participant discount rate | 11.50% |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | |||
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | ||
Schedule of Calculation of Numerator and Denominator in Earnings Per Share | ||||
Income from continuing operations, net of taxes | $412.90 | $253.10 | ||
Loss from discontinued operations, net of taxes | -2.5 | -22.7 | ||
Net income | $410.40 | $230.40 | ||
Schedule of Weighted Average Number of Shares | ||||
Basic (in shares) | 589.1 | [1] | 584.3 | [1] |
Effect of dilutive shares: | ||||
Share based awards to employees (in shares) | 3.6 | [2] | 4.5 | [2] |
Diluted (in shares) | 592.7 | 588.8 | ||
Share Awards | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share | 1.4 | [3] | 0.8 | [3] |
[1] | Excludes shares purchased by the EBT and presented by Shire as treasury stock | |||
[2] | . Calculated using the treasury stock method | |||
[3] | 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_Revenue_by
Segmental Reporting (Revenue by Product) (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Revenue from External Customer [Line Items] | ||
Product sales | $1,423.20 | $1,308.10 |
VYVANSE | ||
Revenue from External Customer [Line Items] | ||
Product sales | 416.8 | 351.2 |
ADDERALL XR | ||
Revenue from External Customer [Line Items] | ||
Product sales | 95.7 | 85.1 |
INTUNIV | ||
Revenue from External Customer [Line Items] | ||
Product sales | 17.4 | 82.3 |
LIALDA and MEZAVANT | ||
Revenue from External Customer [Line Items] | ||
Product sales | 148.5 | 128.9 |
PENTASA | ||
Revenue from External Customer [Line Items] | ||
Product sales | 78.7 | 72.3 |
FOSRENOL | ||
Revenue from External Customer [Line Items] | ||
Product sales | 44.1 | 41.4 |
XAGRID | ||
Revenue from External Customer [Line Items] | ||
Product sales | 25.3 | 27.1 |
Other Products | ||
Revenue from External Customer [Line Items] | ||
Product sales | 32.3 | 29.5 |
REPLAGAL | ||
Revenue from External Customer [Line Items] | ||
Product sales | 97.5 | 114.3 |
ELAPRASE | ||
Revenue from External Customer [Line Items] | ||
Product sales | 125 | 128.6 |
VPRIV | ||
Revenue from External Customer [Line Items] | ||
Product sales | 86.4 | 86.9 |
FIRAZYR | ||
Revenue from External Customer [Line Items] | ||
Product sales | 92.5 | 74.9 |
CINRYZE | ||
Revenue from External Customer [Line Items] | ||
Product sales | 148.1 | 85.6 |
GATTEX/REVESTIVE | ||
Revenue from External Customer [Line Items] | ||
Product sales | $14.90 | $0 |
Related_parties_Details
Related parties (Details) (ArmaGen, USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2015 |
ArmaGen | |
Related Party Transaction [Line Items] | |
Amount paid for an equity stake and the license to develop and commercialize AGT-182 | $2.50 |
Share of R&D credit recorded within R&D expense | $0.40 |
Percentage of equity stake | 21.00% |