Exhibit 99.1
Summary Unaudited Pro Forma Combined Financial Data
The following unaudited pro forma combined financial statements give effect
to the proposed merger of Shire Pharmaceuticals Group plc ("Shire") and BioChem
Pharma Inc. ("BioChem") as a pooling of interests under U.S. GAAP. The unaudited
pro forma condensed balance sheet presents the combined financial position of
Shire and BioChem as of September 30, 2000 assuming that the proposed merger has
occurred as of September 30, 2000. The unaudited pro forma statements for the
years ended December 31, 1999, 1998 and 1997 and for the nine months ended
September 30, 2000 reflect the combination of the historical results of
operations of Shire and BioChem, along with certain adjustments necessary to
conform accounting policies of the two companies. Such pro forma information is
based upon the historical financial statements of Shire and BioChem and has been
prepared to illustrate the effects of the merger. In calculating the
Shire/BioChem pro forma information, an average ADS trading price in the range
$47.20 to $70.80 has been assumed. You should read the pro forma combined
financial data in conjunction with the historical financial statements of Shire
and BioChem incorporated by reference into Shire's proxy statement prepared in
connection with the merger of Shire and BioChem, filed with the SEC on January
17, 2001. The pro forma combined financial data are presented for illustrative
purposes only and are not necessarily indicative of any future results of
operations or the results that might have occurred if the merger had actually
occurred on the indicated dates.
Unaudited Pro Forma Combined Condensed Income Statement
Nine months ended September 30, 2000
Shire Bio-
Chem
Shire BioChem Pro Form
----------- ------------- ------------ ----------- ----------- --------- ----------
Accounting
Canadian Canadian U.S. GAAP policy U.S.
U.S. GAAP GAAP GAAP adjustments alignments GAAP U.S. GAAP
$'000 CAN$'000(1) $'000(2) $'000(3)/(4) $'000(6) $'000 $'000
----------- ------------- ------------ ----------- ----------- --------- ----------
(In thousands, except per share and per ADS amounts)
Total revenue..................... 380,605 230,728 141,568 -- (29,225) 112,343 492,948
Operating expenses................ (312,809) (103,350) (68,407) (3,424) 11 (71,820) (384,629)
Operating income/(loss)........... 67,796 127,378 73,161 (3,424) (29,214) 40,523 108,319
Interest income................... 4,264 -- 7,842 -- 1,151 8,993 13,257
Interest expense.................. (8,563) -- (3,100) -- -- (3,100) (11,663)
Other income/(expenses), net...... 113 141,220 102,381 4,019 -- 106,400 106,513
Income/(loss) before income taxes. 63,610 268,598 180,284 595 (28,063) 152,816 216,426
Income taxes...................... (25,292) (11,989) (7,224) -- 473 (6,751) (32,043)
Share of loss of company subject -- (2,155) -- -- -- -- --
to significant influence..........
Net income/(loss) from continuing
operations........................ 38,318 254,454 173,060 595 (27,590) 146,065 184,383
Earnings/(loss) from continuing
operations per ordinary share
- --basic............................ $0.15 CAN$2.51 -- -- -- $1.44
- --diluted.......................... $0.15 CAN$2.43 -- -- -- $1.42
Weighted average ordinary shares
outstanding
- --basic............................ 251,191 101,199 -- -- -- 101,199
- --diluted.......................... 259,640 107,946 -- (5,078) -- 102,868
Pro forma information based on
exchange ratio of 1.8814 (7), (8)
Pro forma earnings/(loss) from
continuing operations per
ordinary share
- --basic............................ $0.42
- --diluted.......................... $0.41
Pro forma weighted average
ordinary shares outstanding
- --basic............................ 441,586
- --diluted.......................... 453,176
Pro forma information based on
exchange ratio of 2.3517
Pro forma earnings/(loss)from
continuing operations per
ordinary share
- --basic............................ $0.38
- --diluted.......................... $0.37
Pro forma weighted average
ordinary shares outstanding
- --basic............................ 489,180
- --diluted.......................... 501,555
Pro forma information based on
exchange ratio of 1.5678
Pro forma earnings/(loss) from
continuing operations per
ordinary share
- --basic............................ $0.45
- --diluted.......................... $0.44
Pro forma weighted average
ordinary shares outstanding
- --basic............................ 409,850
- --diluted.......................... 420,917
Unaudited Pro Forma Combined Condensed Income Statement
Year ended December 31, 1999
Shire Bio-
Chem
Shire BioChem Pro Form
----------- ------------- ------------ ----------- ----------- --------- ----------
Accounting
Canadian Canadian U.S. GAAP policy U.S.
U.S. GAAP GAAP GAAP adjustments alignments GAAP U.S. GAAP
$'000 CAN$'000(1) $'000(2) $'000(3)/(4) '000(6) $'000 $'000
----------- ------------- ------------ ----------- ----------- --------- ----------
(in thousands, except per share and per ADS amounts)
Total revenue................... 401,532 290,275 185,694 -- (49,973) 135,721 537,253
Operating expenses.............. (477,600) (135,166) (93,179) (3,128) -- (96,307) (573,907)
Operating income/(loss)......... (76,068) 155,109 92,515 (3,128) (49,973) 39,414 (36,654)
Interest income................. 7,349 -- 5,066 -- 3,542 8,608 15,957
Interest expense................ (9,742) -- (1,902) -- -- (1,902) (11,644)
Other income/(expenses), net.... (475) 24,181 23,122 (3,896) -- 19,226 18,751
Income/(loss) before income (78,936) 179,290 118,801 (7,024) (46,431) 65,346 (13,590)
taxes...........................
Income taxes.................... (16,062) (12,091) (6,500) -- 899 (5,601) (21,663)
Net income/(loss) from
continuing operations........... (94,998) 167,199 112,301 (7,024) (45,532) 59,745 (35,253)
Earnings/(loss) from continuing
operations per ordinary share
- --basic.......................... $(0.39) CAN$1.59 -- -- -- $0.57
- --diluted........................ $(0.39) CAN$1.57 -- -- -- $0.56
Weighted average ordinary shares
outstanding
- --basic.......................... 244,699 105,313 -- -- -- 105,313
- --diluted........................ 244,699 111,945 -- (4,971) -- 106,974
Pro forma information based on
exchange ratio of 1.8814 (7),
(8)
Pro forma earnings/(loss) from
continuing operations per
ordinary share
- --basic.......................... $(0.08)
- --diluted........................ $(0.08)
Pro forma weighted average
ordinary shares outstanding
- --basic.......................... 442,834
- --diluted........................ 442,834
Pro forma information based on
exchange ratio of 2.3517
Pro forma earnings/(loss) from
continuing operations per
ordinary share
- --basic.......................... $(0.07)
- --diluted........................ $(0.07)
Pro forma weighted average
ordinary shares outstanding
- --basic.......................... 492,363
- --diluted........................ 492,363
Pro forma information based on
exchange ratio of 1.5678
Pro forma earnings/(loss) from
continuing operations per
ordinary share
- --basic.......................... $(0.09)
- --diluted........................ $(0.09)
Pro forma weighted average
ordinary shares outstanding
- --basic.......................... 409,808
- --diluted........................ 409,808
Unaudited Pro Forma Combined Condensed Income Statement
Year ended December 31, 1998
Shire Bio-
Chem
Shire BioChem Pro Form
----------- ------------- ------------ ----------- ----------- --------- ----------
Accounting
Canadian Canadian U.S. GAAP policy U.S.
U.S. GAAP GAAP GAAP adjustments alignments GAAP U.S. GAAP
$'000 CAN$'000(1) $'000(2) $'000(3)/(4) $'000(6) $'000 $'000
----------- ------------- ------------ ----------- ----------- --------- ----------
(In thousands, except per share and per ADS amounts)
Total revenue................... 308,984 224,965 141,493 -- (14,572) 126,921 435,905
Operating expenses.............. (285,748) (99,016) (68,054) -- -- (68,054) (353,802)
Operating income/(loss)......... 23,236 125,949 73,439 -- (14,572) 58,867 82,103
Interest income................. 6,398 -- 6,654 -- 2,673 9,327 15,725
Interest expense................ (6,511) -- (137) -- -- (137) (6,648)
Other income/(expenses), net.... 440 -- 4,661 (85,090) -- (80,429) (79,989)
Income/(loss) before income 23,563 125,949 84,617 (85,090) (11,899) (12,372) 11,191
taxes...........................
Income taxes.................... (2,991) (9,479) (5,131) -- 457 (4,674) (7,665)
Non-controlling interest........ -- 1,428 -- -- -- -- --
Net income/(loss) from
continuing operations........... 20,572 117,898 79,486 (85,090) (11,442) (17,046) 3,526
Earnings/(loss) from continuing
operations per ordinary share
- --basic.......................... $0.09 CAN$1.09 -- -- -- $(0.16)
- --diluted(9)..................... $0.08 CAN$1.09 -- -- -- $(0.16)
Weighted average ordinary shares
outstanding
- --basic.......................... 234,045 108,443 -- -- -- 108,443
- --diluted(9)..................... 242,806 115,174 -- -- -- 108,443
Pro forma information based on
exchange ratio of 1.8814 (7),(8)
Pro forma earnings/(loss) from
continuing operations per
ordinary share
- --basic.......................... $0.01
- --diluted........................ $0.01
Pro forma weighted average
ordinary shares outstanding
- --basic.......................... 438,069
- --diluted........................ 446,831
Pro forma information based on
exchange ratio of 2.3517
Pro forma earnings/(loss) from
continuing operations per
ordinary share
- --basic.......................... $0.01
- --diluted........................ $0.01
Pro forma weighted average
ordinary shares outstanding
- --basic.......................... 489,069
- --diluted........................ 497,831
Pro forma information based on
exchange ratio of 1.5678
Pro forma earnings/(loss) from
continuing operations per
ordinary share
- --basic.......................... $0.01
- --diluted........................ $0.01
Pro forma weighted average
ordinary shares outstanding
- --basic.......................... 404,061
- --diluted........................ 412,823
Unaudited Pro Forma Combined Condensed Income Statement
Year ended December 31, 1997
Shire Bio-
Chem
Shire BioChem Pro Form
----------- ------------- ------------ ----------- ----------- --------- ----------
Accounting
Canadian Canadian U.S. GAAP policy U.S.
U.S. GAAP GAAP GAAP adjustments alignments GAAP U.S. GAAP
$'000 CAN$'000(1) $'000(2) $'000(3)/(4) $'000(6) $'000 $'000
----------- ------------- ------------ ----------- ----------- --------- ----------
(In thousands, except per share and per ADS amounts)
Total revenue................... 191,554 162,860 107,102 -- -- 107,102 298,656
Operating expenses.............. (277,395) (76,382) (56,922) -- -- (56,922) (334,317)
Operating income/(loss)......... (85,841) 86,478 50,180 -- -- 50,180 (35,661)
Interest income................. 6,547 -- 7,555 -- -- 7,555 14,102
Interest expense................ (964) -- (370) -- -- (370) (1,334)
Other income/(expenses), net.... (2,474) -- 410 -- -- 410 (2,064)
Income/(loss) before income (82,732) 86,478 57,775 -- -- 57,775 (24,957)
taxes...........................
Income taxes.................... (1,420) (4,000) (1,660) -- -- (1,660) (3,080)
Non-controlling interest........ -- 1,797 -- -- -- -- --
Share of loss of company
subject to -- (6,595) -- -- -- -- --
significant influence...........
Net income/(loss) from
continuing (84,152) 77,680 56,115 -- -- 56,115 (28,037)
operations......................
Earnings/(loss) from continuing
operations per ordinary share
- --basic.......................... $(0.45) CAN$0.72 -- -- -- $0.52
- --diluted........................ $(0.45) CAN$0.72 -- -- -- $0.51
Weighted average ordinary
shares outstanding
- --basic.......................... 185,153 108,153 -- -- -- 108,153
- --diluted........................ 185,153 114,229 -- (4,414) -- 109,815
Pro forma information based on
exchange ratio of 1.8814 (7),
(8)
Pro forma earnings/(loss) from
continuing operations per
ordinary share
- --basic.......................... $(0.07)
- --diluted........................ $(0.07)
Pro forma weighted average
ordinary shares outstanding
- --basic.......................... 388,632
- --diluted........................ 388,632
Pro forma information based on
exchange ratio of 2.3517
Pro forma earnings/(loss) from
continuing operations per
ordinary share
- --basic.......................... $(0.06)
- --diluted........................ $(0.06)
Pro forma weighted average
ordinary shares outstanding
- --basic.......................... 439,496
- --diluted........................ 439,496
Pro forma information based on
exchange ratio of 1.5678
Pro forma earnings/(loss) from
continuing operations per
ordinary share
- --basic.......................... $(0.08)
- --diluted........................ $(0.08)
Pro forma weighted average
ordinary shares outstanding
- --basic.......................... 354,715
- --diluted........................ 354,715
Unaudited Pro Forma Combined Condensed Balance Sheet
As at September 30, 2000
Shire Bio-
Chem
Shire BioChem Pro Form
----------- ------------- ------------ ----------- ----------- --------- ----------
Accounting
Canadian Canadian U.S. GAAP policy U.S.
U.S. GAAP GAAP GAAP adjustments alignments GAAP U.S. GAAP
$'000 CAN$'000(1) $'000(2) $'000(3)/(4) $'000(6) $'000 $'000
----------- ------------- ------------ ----------- ----------- --------- ----------
ASSETS
Current assets:
Cash and current investments..... 169,663 403,214 267,571 -- 12,882 280,453 450,116
Accounts receivable, net......... 89,630 79,104 52,552 -- -- 52,552 142,182
Inventories, net................. 38,665 4,117 2,733 -- -- 2,733 41,398
Other current assets............. 22,240 2,505 1,663 -- 2,757 4,420 26,660
Total current assets............. 320,198 488,940 324,519 -- 15,639 340,158 660,356
Property, plant and equipment, 28,649 151,526 82,171 (2,706) -- 79,465 108,114
net..............................
Intangible assets, net........... 538,255 16,585 29,865 (3,722) -- 26,143 564,398
Other assets..................... 29,182 154,559 101,305 -- (5,929) 95,376 124,558
Total assets..................... 916,284 811,610 537,860 (6,428) 9,710 541,142 1,457,426
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Current instalments of long term 1,412 120,624 80,042 -- -- 80,042 81,454
debt.............................
Accounts payable and accrued 77,828 45,292 30,091 -- 3,792 33,883 111,711
expenses.........................
Other current liabilities........ 29,075 -- -- -- -- -- 29,075
Total current liabilities........ 108,315 165,916 110,133 -- 3,792 113,925 222,240
Long term debt, including
capital lease obligations........ 126,413 8,550 5,673 -- -- 5,673 132,086
Other long term liabilities...... 422 -- -- -- -- -- 422
Shareholders' equity............. 681,134 637,144 422,054 (6,428) 5,918 421,544 1,102,678
Total liabilities and 916,284 811,610 537,860 (6,428) 9,710 541,142 1,457,426
shareholders' equity.............
- -----------
Notes
1. The Canadian GAAP condensed financial information presented in thousands of
Canadian dollars as of and for the nine months ended September 30, 2000 has
been derived from the uanaudited consolidated financial statements of
BioChem. The Canadian GAAP condensed financial information presented in
thousands of Canadian dollars for the years ended December 31, 1997, 1998
and 1999 has been derived from the audited consolidated financial
statements of BioChem, incorporated by reference into Shire's proxy
statement prepared in connection with the merger of Shire and BioChem,
filed with the SEC on January 17, 2001.
2. The Canadian GAAP condensed financial information presented in thousands of
Canadian dollars has been translated to U.S. dollars in the following
manner:
o Assets and liabilities have been translated using exchange rates at the end
of each reporting period.
o Revenues and expenses were translated at the average exchange rates
prevailing during the period.
o Share capital balances have been translated at historical rates in effect
at the time the capital transactions occurred.
o Cumulative translation gains and losses are reported as a separate
component of shareholders' equity.
All translations were calculated using the following weighted average and
period end exchange rates:
Year ended Year ended Year ended Nine months ended
U.S. dollars per C$1.00 December 31, 1997 December 31, 1998 December 31, 1999 September 30, 2000
----------------------- ----------------- ----------------- ----------------- ------------------
--weighted average............. 0.7223 0.6743 0.6730 0.6794
--period end................... 0.6997 0.6534 0.6929 0.6636
- -----------
(i) For the translation of CliniChem, the translation for the period ended
December 31, 1998 is 0.6582.
3. Adjustments reflecting the differences between Canadian GAAP and U.S. GAAP
are as follows:
Year ended Year ended Year ended Nine months ended
December 31, 1997 December 31, 1998 December 31, 1999 September 30, 2000
$'000 $'000 $'000 $'000
----------------- ----------------- ----------------- ------------------
Deferred charges (a).......... -- -- (3,128) (3,424)
Share of loss in a company
subject to significant
influence(b).................. -- -- (3,496) 3,528
Deferred foreign exchange
losses(c)..................... -- (86) (400) 491
Loss on disposal of a long term
investment (d)................ -- (85,004) -- --
(85,090) (7,024) 595
(a) Deferred charges
Statement of Position 98-5 "Reporting on the Costs of Start-Up Activities"
("SOP 98-5"), issued by the AICPA states that the costs of start-up
activities should be expensed as incurred. Pursuant to SOP 98-05, the
unamortized deferred charges consisting primarily of start-up costs have
been written off in the income statement under the caption "operating
expenses".
Adjustments (b) through (d) below appear in the pro forma income statements
under the caption "other income/(expenses), net".
(b) Share of loss in a company subject to significant influence Under U.S.
GAAP, the total investment in North American Vaccine Inc. (NAVA) is reduced
by $3,128,000 for the year ended December 31, 1999 in accordance with
requirements of the Emerging Issues Task Force 98-13 on accounting by an
equity method investor for investee losses when the investor has loans to
and investments in other securities of the investee. This adjustment was
reversed in the nine months ended September 30, 2000 as the investment in
NAVA was disposed of.
(c) Deferred foreign exchange losses
Under Canadian GAAP, unrealized foreign exchange gains and losses arising
on the translation of long-term monetary items are deferred and amortized
over the life of the item.
-2-
Under U.S. GAAP, these gains and losses are included in current period
earnings as they arise.
(d) Loss on disposal of a long-term investment Under U.S.GAAP, the distribution
of CliniChem's Class A shares is reduced by $85,004,000 and an equivalent
loss on disposal of a long-term investment is recorded.
4. Weighted average shares Under Canadian GAAP, fully diluted earnings per
share assumes that all the outstanding options at the end of the year have
been exercised at the beginning of the year or at the date granted, if
granted during the year, and proceeds from the exercise of options have
been used for investments. Under U.S. GAAP, diluted earnings per share is
calculated based on the assumption that the options have been exercised at
the beginning of the year or at the date granted, if granted during the
year, and proceeds from the exercise of options were used at the beginning
of the year or at the date granted to acquire common shares of the company
at the average market price.
5. Adjustments to expense the accumulated costs of deferred charges as
described in 3 (a) and (c) above.
6. Adjustments to reflect the realignment of BioChem's accounting policies to
conform with those of Shire under U.S. GAAP. In 1998, BioChem spun-off to
its shareholders its investment in CliniChem Development, Inc. In
connection with this spin-off, BioChem retained rights in CliniChem,
including that BioChem had an option to reacquire all shares in CliniChem
at any time. Under EITF 99-16, this transaction would result in CliniChem
continuing to be consolidated by BioChem as BioChem would have significant
continuing involvement in the operations of CliniChem. However, at the time
that CliniChem was spun-off, EITF 99-16 had not been issued and BioChem
elected to deconsolidate CliniChem, an acceptable accounting principle at
that time. The management of Shire believe that their accounting policies
would have required Shire to continue to consolidate CliniChem, also an
acceptable accounting alternative at the date of spin-off and a policy that
conforms with the later guidance issued under EITF 99-16.
The adjustments listed below represent the effects from:
(a) consolidating the financial position and results of operations of
CliniChem, and
(b) eliminating intercompany licensing revenues and costs.
-3-
Nine months ended
Year ended Year ended Year ended September 30,
December 31, 1997 December 31, 1998 December 31, 1999 2000
$'000 $'000 $'000 $'000
----------------- ----------------- ----------------- -----------------
Total revenue................. -- (14,572) (49,973) (29,225)
Operating expenses............ -- -- -- 11
Operating income/(loss)....... -- (14,572) (49,973) (29,214)
Interest income............... -- 2,673 3,542 1,151
Income/(loss) before income taxes -- (11,899) (46,431) (28,063)
Income taxes.................. -- 457 899 473
Net income/(loss) from continuing
operations.................. -- (11,442) (45,532) (27,590)
These adjustments have been derived from the financial results of CliniChem
as follows:
U.S. GAAP
Canadian GAAP Canadian GAAP Alignments U.S.GAAP
Income Statement Data: CAN$'000 $'000 * $'000 $'000
--------------------- ------------- ------------- ---------- ----------
Period ended December 31, 1998
Total revenue....................................... 4,061 2,673 (2,673) --
Operating expenses.................................. (21,379) (14,072) (500) (14,572)
Operating (loss).................................... (17,318) (11,399) (3,173) (14,572)
Interest income..................................... -- -- 2,673 2,673
(Loss) before income taxes.......................... (17,318) (11,399) (500) (11,899)
Income taxes........................................ (66) (43) 500 457
Net (loss).......................................... (17,384) (11,442) -- (11,442)
Year ended December 31, 1999
Total revenue....................................... 5,262 3,541 (3,541) --
Operating expenses.................................. (72,917) (49,073) (900) (49,973)
Operating (loss).................................... (67,655) (45,532) (4,441) (49,973)
Interest income..................................... -- -- 3,542 3,542
(Loss) before income taxes.......................... (67,655) (45,532) (899) (46,431)
Income taxes........................................ -- -- 899 899
Net (loss).......................................... (67,655) (45,532) -- (45,532)
Nine months ended September 30, 2000
Total revenue....................................... 1,710 1,162 (1,151) 11
Operating expenses.................................. (42,319) (28,752) (473) (29,225)
Operating (loss).................................... (40,609) (27,590) (1,624) (29,214)
Interest income..................................... -- -- 1,151 1,151
(Loss) before income taxes.......................... (40,609) (27,590) (473) (28,063)
Income taxes........................................ -- -- 473 473
Net (loss).......................................... (40,609) (27,590) -- (27,590)
Canadian Canadian
Balance Sheet Data: GAAP GAAP U.S. GAAP
As at September 30, 2000 CAN$'000 $'000 * $'000
------------------------ --------- --------- ---------
Cash and current investments.................................... 19,413 12,882 12,882
Other current assets............................................ 4,154 2,757 2,757
Accounts payable and accrued expenses........................... 5,714 3,792 3,792
Shareholders' equity............................................ 17,853 11,847 11,847
-4-
In addition, as a result of the consolidation of the CliniChem figures
stated above, the investment shown in the financial statements of BioChem
within the caption "other assets" needs to be reversed. The value of this
adjustment is $5,929,000.
*Translation of Canadian dollars into U.S. dollars has been performed
according to the method set out in note 2 above.
7. Pro forma weighted average ordinary shares have been calculated using the
exchange ratios of 1.8814, 2.3517 and 1.5678 which are the mid, highest and
lowest number of ordinary shares that can be issued for each BioChem share
under the terms of the merger agreement. Earnings per share information is
presented under the three scenarios to demonstrate the effect of the
exchange ratio on the pro forma results.
8. The exchange ratio of 1.8814 has been calculated by dividing an ADS price
per share of $37.00 by $59.00, which represents the mid range price, and
multiplying the result by three as per the terms of the merger agreement.
9. The calculation of weighted average number of shares for the years ended
December 31, 1999 and 1997 does not include potentially dilutive stock
options because their inclusion would be anti-dilutive in a loss making
year.
10. The unaudited pro forma combined income statement does not reflect costs
expected to be incurred by Shire and BioChem directly related to the merger
as these costs will not have a continuing impact on the financial results.
The costs attributable to professional fees, UK stamp duty tax levied on
the value of the Shire ordinary shares issued under the merger agreement
and the distribution of proxy materials are estimated at $100 million.
11. Refinancing of debt has not been reflected in the unaudited pro forma
combined income statements and balance sheet. Shire has not yet determined
whether to seek consent or to repay the amount outstanding.