For immediate release
7:00 am (EST) 12:00 pm (GMT)
SHIRE ANNOUNCES INCREASE OF 50% IN
PRE-TAX INCOME FOR FIRST QUARTER 2001
Basingstoke, UK - 26 April 2001 - Shire Pharmaceuticals Group plc (LSE: SHP.L,
NASDAQ: SHPGY) announces results for the first quarter ended 31 March 2001.
Highlights:
----------------- -----------------------------------------
After
APB25 charge1
Before APB25 charge
----------------- ------------- ----------- ---------------
Q1-01 Q1-01 Q1-00 %
($m) ($m) ($m) change
Revenues 155.6 155.6 119.0 +31
Operating income 39.9 42.0 29.2 +44
Income before tax 38.0 40.1 26.7 +50
EPS (diluted)
- - per ordinary share 9.9c 10.7c 7.3c +46
- - per ADS 29.7c 32.1c 22.0c +46
----------------- ------------- ----------- ---------------
Average
USD:GBP exchange rate Q1 2001 1.44
Q1 2000 1.60
Financial Highlights
o Adderall* sales up 29% with a 33.3% share2 of the US Attention Deficit
Hyperactivity Disorder (ADHD) prescription market in March 2001 (March
2000: 29.7%).
o Agrylin* continues to grow strongly; US prescriptions increased by 43%
in March 2001 compared to March 2000. Sales grew 56% compared with the
same period last year. Agrylin* achieved 20.4% market share2 of the
combined US Agrylin, Hydrea and hydroxyurea market.
Pentasa* sales up 39% on Q1 2000; achieved 17.8% share2 of the US oral
mesalamine/olsalazine market in March 2001.
o Carbatrol* achieved sales growth of 72% and 32.5% share2 of the US
extended release carbamazepine market in March 2001.
o ProAmatine* sales up 112% on Q1 2000; US prescriptions up by 31% on
the same period last year.
Business Highlights
o Anagrelide (marketed as Agrylin* in US) granted Orphan Drug Status in
Europe.
Reminyl* receives Food and Drug Administration (FDA) approval on 28
February 2001. US launch targeted for May 2001.
o Foznol* (lanthanum carbonate) first regulatory filing in Europe on 13
March 2001. US regulatory filing expected by end of Q4 2001.
o Adderall XR* (SLI 381) Phase III data to be presented at the American
Psychiatric Association (APA) on 9 May 2001.
Commenting on the results, Rolf Stahel, Chief Executive of Shire, said:
"I am delighted to announce excellent first quarter results, with outstanding
revenue growth of 31% and an increase of 50% in pre tax income.
"Following the approval of Reminyl* in the US on 28 February 2001, we are
looking forward to the US launch by Janssen Pharmaceutica and Ortho-McNeil
Pharmaceutical. Their intention is to make Reminyl* available on prescription
during the course of May 2001. In addition, the first filing of Foznol* in
Europe achieves another very important milestone for Shire.
"In respect of the proposed merger with BioChem Pharma Inc, although the current
review period with Industry Canada expires on 27 April 2001, Shire requested an
extension on 25 April 2001.
"Discussions with Industry Canada are ongoing and we remain firmly committed to
obtaining the Canadian Minister of Industry's approval for the proposed merger
with BioChem Pharma Inc".
1 Results stated after APB25 charge are as set out in Shire's consolidated
income statement on page 9
2 Prescription market (IMS) March 2001
*Trade Mark
For further information please contact:
Clea Rosenfeld, Investor Relations Manager +44 (0)1256 894 000
Shire Pharmaceuticals Group plc
David Yates +44 (0) 207 831 3113
Financial Dynamics
Paula Schwartz +1 212 661 8030
Financial Relations Board
Notes to editors
Shire Pharmaceuticals Group plc
Shire is a rapidly growing international specialty pharmaceutical company with a
strategic focus on four therapeutic areas: central nervous system disorders,
metabolic diseases, oncology and gastroenterology. The Group has a sales and
marketing infrastructure with a broad portfolio of products, with its own direct
marketing capability in the US, Canada, UK, Republic of Ireland, France,
Germany, Italy and Spain and with plans to add Japan by 2004. Shire also covers
other significant pharmaceutical markets indirectly through distributors and
sales coverage continues to grow.
Shire's global search and development expertise has to date successfully
provided eight marketed products, of which Reminyl* for the treatment of
Alzheimer's disease has recently been launched in the UK, its first market in
Europe. The National Institute of Clinical Excellence (NICE) recommended on 19
January 2001 that treatment for Alzheimer's disease be made available through
the National Health Service (NHS) in the UK. Additionally, on 28 February 2001
Reminyl* received Food and Drug Administration (FDA) approval to be marketed in
the US. The current pipeline of 17 projects includes three projects in
registration in various countries, plus the delivery of the first regulatory
submission for Foznol* to a Reference Member State in the EU Mutual Recognition
Procedure on 13 March 2001, and 6 others that are post Phase II. Shire is
actively seeking to acquire further marketed products and development projects
to enhance the potential for future growth. Shire's M&A activity has resulted in
five completed mergers and acquisitions during the last six years.
On 11 December 2000, Shire entered into an agreement to merge with BioChem
Pharma Inc. to form a leading global specialty pharmaceutical company. More
details on this proposed merger and other aspects of the company are available
on the Shire website at Error! Bookmark not defined.
*Trade Mark
THE "SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995. The statements in this press release that are not historical facts are
forward-looking statements that involve risks and uncertainties, including but
not limited to, risks associated with the inherent uncertainty of pharmaceutical
research, product development and commercialisation, the impact of competitive
products, patents, and other risks and uncertainties, including those detailed
from time to time in periodic reports, including the Annual Report filed on Form
10K by Shire with the Securities and Exchange Commission.
OVERVIEW OF FINANCIAL RESULTS
Group revenues for the first quarter increased by 31% to $155.6 million (Q1
2000: $119.0 million). The Group recorded income before tax and APB25 charge of
$40.1 million, up 50% (Q1 2000: $26.7 million) and diluted earnings per ordinary
share pre APB25 charge of 10.7 cents or 32.1 cents per ADS, up 46% (Q1 2000: 7.3
cents per ordinary share or 22.0 cents per ADS). Net income (after APB25 charge
of $2.1 million) was $26.0 million (Q1 2000: $4.3 million net loss after APB25
charge of $23.2 million).
Sales and marketing
Product sales, at $151.4 million, increased by 34% over Q1 2000. Sales of
Adderall* were $70.1 million, representing growth of 29% on the comparative
period in 2000, which included some stock-building by wholesalers ahead of
anticipated price increases. Adderall* had a 33.3% share of the prescription
market for Attention Deficit Hyperactivity Disorder (ADHD) in the US in March
2001 (March 2000: 29.7%) and continues to be the brand leader in the US market
for ADHD.
Sales of Agrylin*, the only US product licensed for the treatment of
thrombocythaemia, were $17.1 million, a 56% increase on Q1 2000 sales of $11.0
million, when sales were slightly below trend due to wholesaler de-stocking.
Shire achieved a prescription share of 20.4% of the total US Agrylin, Hydrea and
generic hydroxyurea market in March 2001, compared to 14.3% for the month of
March 2000.
Sales of Pentasa*, for the treatment of ulcerative colitis, were $14.4 million,
39% higher than the comparable period last year, when sales were below trend due
to wholesaler de-stocking following a price increase in Q4 1999. Pentasa* had a
prescription share of 17.8% of the US oral mesalamine/olsalazine market in March
2001, compared to 18.0% in March 2000.
Sales of ProAmatine*, for the treatment of postural hypotension, were $7.6
million, 112% higher than Q1 2000 sales of $3.6 million, when sales were also
below trend due to wholesaler de-stocking following a price increase in Q4 1999.
The US prescription market for ProAmatine* and Florinef prescriptions indicates
that ProAmatine* had a 22.1% share for the month of March 2001, an increase from
19.5% in March 2000.
Carbatrol*, containing carbamazepine, recorded sales growth of 72% from sales of
$5.6 million in Q1 2000 to $9.6 million in Q1 2001. This translates to 32.5% of
the US extended release carbamazepine prescription market in March 2001,
compared to 26.0% in March 2000.
Licensing
Licensing and development fees in the first quarter fell by 38% to $3.0 million
(Q1 2000: $4.9 million) and included one-time receipts of third party milestone
payments in respect of Reminyl* Food and Drug Administration (FDA) approval and
SLI drug
delivery contracts. The quarter on quarter decrease is mainly due to the
reduction in development stage activities for Reminyl* and hence the ending of
reimbursement revenues for actual costs incurred on bulb-related raw material.
Royalties increased by $0.3 million to $0.9 million (Q1 2000: $0.6 million).
Cost of sales and operating expenses
Gross margin on product sales, at 82%, was consistent with Q1 2000. The higher
margin products, particularly Adderall* and Agrylin* represented approximately
57% of total product sales in Q1 2001, also consistent with Q1 2000.
R&D expenditure for the first quarter increased by 4% to $27.2 million.
Expressed as a percentage of revenues, R&D expenditure was 17% in Q1 2001
compared to 22% in Q1 2000 and 21% for full year 2000. R&D expenditure was
particularly high in Q1 2000 due to the upfront payment for the in-licensing of
SPD 421 from D-Pharm. The relatively low R&D to revenue ratio in Q1 2001 is
mainly related to phasing of project costs resulting in lower than usual costs
during the quarter.
Selling, general and administrative (S,G&A) expenses, excluding the effects of
an APB25 charge, increased by 41% to $49.5 million (Q1 2000: $35.2 million). As
a percentage of product sales S,G&A expenses increased by 2% to 33%. This
increase reflects the growth in the US sales force since Q1 2000 and increased
marketing activities in respect of the anticipated Adderall XR* launch.
The APB25 charge for the quarter was $2.1 million. This substantial reduction
compared to the Q1 2000 charge of $23.2 million reflects minor amendments to the
executive share option scheme effective from March 2000.
Depreciation and amortisation increased by 13% to $8.6 million (Q1 2000: $7.6
million). This increase is attributable to the purchase of several new products
since March last year.
Taxation
The effective rate of tax on the profits for the quarter pre APB25 is 30% (Q1
2000: 29%). The company has recorded net deferred tax assets of approximately
$26.8 million.
Cash flow
Net cash inflow from operating activities of $58.0 million provided funding for
two product acquisitions in Europe ($18.3 million) and tangible fixed asset
additions of $1.5 million. Cash inflow from financing activities of $2.1 million
related to employee stock option exercises.
Cash, cash equivalents, marketable securities and other current assets at 31
March 2001 amounted to $225.4 million. After deduction of borrowings this gives
a net cash position of $97.5 million.
PROJECTS UNDER DEVELOPMENT
Central nervous system disorders
Alzheimer's disease
Reminyl* was launched in the UK in September 2000. In January 2001, the UK
National Institute of Clinical Excellence (NICE) announced that treatments for
Alzheimer's disease should be made available as part of the management of
patients with mild to moderate Alzheimer's disease within the UK. This was
followed on 28 February 2001 by approval from the Food and Drug Administration
(FDA) for Reminyl* in the US. Janssen Pharmaceutica and Ortho-McNeil
Pharmaceutical will be marketing Reminyl* in this market and intend to make the
product available on prescription from May 2001.
By 31 March 2001, Reminyl* had been launched in 11 countries, including the UK
and Ireland. A number of further launches are planned over the coming months.
ADHD
New pivotal data on the once daily formulation of Adderall*, SLI 381, under
development for the treatment of ADHD, have been accepted as a platform
presentation at the annual meeting of the American Psychiatric Association
(APA). The oral presentation of safety and efficacy results will take place on
Wednesday, 9 May, at 11:00 am at the APA's 2001 annual meeting in New Orleans,
at which point Shire will publish the relevant posters. The once daily
medication, currently known by its project designation, SLI 381 (proposed Trade
Mark Adderall XR), is a novel formulation of Adderall* (mixed salts of a
single-entity amphetamine product) that incorporates Shire's Microtrol(TM)
advanced drug delivery system.
Oncology/haematology
Thrombocythaemia
On 3 January 2001, Shire announced that the European Commission had granted
orphan drug designation to anagrelide for the treatment of essential
thrombocythaemia. This designation covers the EU, plus Norway and Iceland, and
provides up to 10 years market exclusivity for the product following Marketing
Authorisation Approval. Orphan drug status already applies to anagrelide in the
US, where the product is marketed as Agrylin*, and in Japan where it will run
for 10 years following marketing approval.
Metabolic diseases
Hyperphosphataemia
The first regulatory submission for Foznol* (lanthanum carbonate) was delivered
to a Reference Member State in the EU Mutual Recognition Procedure on 13 March
2001. Foznol is being developed for the treatment of hyperphosphataemia in
patients with chronic renal failure.
Future Prospects
In respect of the proposed merger with BioChem Pharma Inc, although the current
review period with Industry Canada expires on 27 April 2001, Shire requested an
extension on 25 April 2001.
Discussions with Industry Canada are ongoing and Shire remains firmly committed
to obtaining the Canadian Minister of Industry's approval for the proposed
merger with BioChem Pharma Inc.
Progress towards the launch of Adderall XR* continues and this will lead to
ongoing marketing expenditure. R&D expenditure as a percentage of revenue is
expected to move back towards historic ranges in subsequent quarters.
With the forthcoming US launch of Reminyl* expected and the recent regulatory
filing for Foznol* in Europe, management remains confident about the company's
future growth prospects.
*Trade Mark
Unaudited consolidated balance sheets
US GAAP
31.03.2001 31.03.2000
$'000 $'000
ASSETS ----------- -----------
Current assets:
Cash and cash equivalents 82,835 67,307
Marketable securities and other current asset investments 142,553 58,020
Accounts receivable, net 70,993 75,689
Inventories, net 43,773 39,828
Deferred tax asset 18,722 5,312
Prepaid expenses and other current assets 14,373 6,211
------------ ------------
Total current assets 373,249 252,367
Investments 5,756 2,604
Property, plant and equipment, net 47,867 38,813
Intangible assets, net 561,458 550,536
Deferred tax asset 8,047 31,799
Other assets 21,850 5,058
------------ ------------
Total assets 1,018,227 881,177
------------ ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current instalments of long-term debt 1,470 5,333
Accounts and notes payable 97,313 106,695
Other current liabilities 19,765 9,214
------------ ------------
Total current liabilities 118,548 121,242
Long-term debt, excluding current instalments 126,436 128,040
Other long-term liabilities 11,532 541
------------ ------------
Total liabilities 256,516 249,823
------------ ------------
Shareholders' equity:
Common stock, 5p par value; 400,000,000 (2000:
400,000,000) shares authorised; and 257,950,135
(2000: 251,376,841) shares issued and
outstanding respectively 21,097 20,611
Additional paid-in capital 945,735 883,257
Accumulated other comprehensive losses (52,121) (13,122)
Accumulated deficit (153,000) (259,392)
------------ ------------
Total shareholders' equity 761,711 631,354
------------ ------------
Total liabilities and shareholders' equity 1,018,227 881,177
------------ ------------
Unaudited consolidated income statements
US GAAP
3 months 3 months
to 31.03.01 to 31.03.00
$'000 $'000
------------ ------------
Total revenues 155,641 118,978
Cost of revenues (27,713) (20,905)
------------ ------------
Gross profit 127,928 98,073
Operating expenses (88,010) (92,118)
------------ ------------
Operating income 39,918 5,955
Interest income 2,536 1,371
Interest expense (2,801) (3,405)
Other expense (1,668) (431)
------------ ------------
Total other expenses (1,933) (2,465)
------------ ------------
Income before income taxes 37,985 3,490
Income taxes (12,030) (7,756)
------------ ------------
Net income/(loss) - see below 25,955 (4,266)
------------ ------------
Net income/(loss) per share:
Basic 10.1c (1.7)c
Diluted 9.9c (1.7) c
Weighted average number of shares:
Basic 257,390,769 246,672,276
Diluted 262,649,651 246,672,276
Supplemental information
Net income/(loss) as above 25,955 (4,266)
Add back:
APB25 stock option compensation charg
2,121 23,246
------------ ------------
Net income before APB25 28,076 18,980
------------ ------------
Net income before APB25
per ordinary share
Basic 10.9c 7.7c
Diluted 10.7c 7.3c
------------ ------------
Net income before APB25 per ADS
Basic 32.7c 23.1c
Diluted 32.1c 22.0c
------------ ------------
The diluted net income before APB25 per ordinary share uses the fully diluted
weighted average number of shares of 259,301,631. This is not used when the
result is a net loss because it would have an anti-dilutive effect.
Unaudited consolidated statements of cash flows
US GAAP
3 months 3 months
to 31.03.01 to 31.03.00
$'000 $'000
---------- ----------
Cash flows from operating activities:
Net income/(loss) 25,955 (4,266)
Adjustments to reconcile net income/(loss) to net cash ---------- ----------
provided by/(used in) operating activities:
Depreciation and amortisation 8,600 7,592
Stock option compensation 2,121 23,246
Tax benefit of stock option compensation, charged directly
to equity 3,090 1,072
Non cash exchange gains and losses (10,311) (151)
Loss on disposal of fixed assets 607 -
Decrease/(increase) in inventory 3,336 (290)
Decrease in deferred tax asset 6,500 -
Decrease/(increase) in accounts receivable 18,816 (14,410)
Decrease in accounts payable (668) (48,556)
---------- ----------
Net cash provided by/(used in) operating activities 58,046 (35,763)
---------- ----------
Cash flows from investing activities:
Redemption of marketable securities, net 46,000 31,687
Increase in cash placed on short-term deposit (48,808) (5,363)
Expenses of acquisition of subsidiaries - (212)
Purchase of intangible fixed assets (18,335) -
Purchase of fixed assets (1,544) (1,935)
Collection on notes receivable - 520
---------- ----------
Net cash (used in)/provided by investing activities (22,687) 24,697
---------- ----------
Cash flows from financing activities:
Movements on long term debt
94 (2,549)
Proceeds from issue of common stock - 3,033
Payment of stock issuance costs (16) (3,385)
Proceeds from exercise of options 2,109 27,192
---------- ----------
Net cash provided by financing activities 2,187 24,291
---------- ----------
Effect of foreign exchange rate changes on cash and cash
equivalents (1,309) -
---------- ----------
Net increase in cash and cash equivalents 36,237 13,225
Cash and cash equivalents at beginning of period 46,598 54,082
---------- ----------
Cash and cash equivalents at end of period 82,835 67,307
---------- ----------
NOTES
1. Analysis of revenue, operating income and reportable segments
The company has disclosed segmental information for the individual operating
areas of the business, based on the way in which the business is managed and
controlled. Shire's principal reporting segments are geographic, each being
managed and monitored separately and serving different markets. The company
evaluates performance based on operating income or loss before interest and
income taxes.
Three months to March 31, 2001 Rest of
US Europe World Total
$'000 $'000 $'000 $'000
---------- ---------- ---------- ----------
Product sales 126,804 18,330 6,270 151,404
Licensing and development 2,085 956 - 3,041
Royalties 60 358 503 921
Other revenues - - 275 275
---------- ---------- ---------- ----------
Total revenue 128,949 19,644 7,048 155,641
---------- ---------- ---------- ----------
Cost of revenues 17,877 6,529 3,307 27,713
Research and development 19,916 7,188 61 27,165
Selling, general and administrative 35,815 14,027 1,796 51,638
Losses on disposal of assets 591 14 2 607
---------- ---------- ---------- ----------
Total operating expenses 74,199 27,758 5,166 107,123
---------- ---------- ---------- ----------
EBITDA 54,750 (8,114) 1,882 48,518
Depreciation and amortisation (4,460) (4,135) (5) (8,600)
---------- ---------- ---------- ----------
Operating income/(loss) 50,290 (12,249) 1,877 39,918
---------- ---------- ---------- ----------
Three months to March 31, 2000 Rest of
US Europe World Total
$'000 $'000 $'000 $'000
---------- ---------- ---------- ----------
Product sales 93,102 15,243 4,820 113,165
Licensing and development 1,376 3,534 - 4,910
Royalties 44 561 - 605
Other revenues 3 - 295 298
---------- ---------- ---------- ----------
Total revenue 94,525 19,338 5,115 118,978
---------- ---------- ---------- ----------
Cost of revenues 12,955 5,730 2,220 20,905
Research and development 17,247 8,808 17 26,072
Selling, general and administrative 22,420 34,107 1,927 58,454
---------- ---------- ---------- ----------
Total operating expenses 52,622 48,645 4,164 105,431
---------- ---------- ---------- ----------
EBITDA 41,903 (29,307) 951 13,547
Depreciation and amortisation (3,718) (3,688) (186) (7,592)
---------- ---------- ---------- ----------
Operating income/(loss) 38,185 (32,995) 765 5,955
---------- ---------- ---------- ----------
2. Net income/(loss) per share
Basic net income/(loss) per share is based upon the net income/(loss) available
to common stockholders divided by the weighted average number of common shares
outstanding during the period. Diluted net income/(loss) per share is based upon
income available to common stockholders divided by the weighted average number
of common shares outstanding during the period and adjusted for the effect of
all dilutive potential common shares that were outstanding during the period.
The following table sets forth the computation for basic and diluted net
income/(loss) per share:
3 months 3 months
to 31.03.01 to 31.03.00
$'000 $'000
------------- -------------
Numerator for basic net income per share 25,955 (4,266)
Interest on convertible debt, net of tax 44 -
------------- -------------
Numerator for diluted net income per share 25,999 (4,266)
------------- -------------
No. of shares No. of shares
------------- -------------
Weighted average number of shares:
Basic 257,390,769 246,672,276
Effect of dilutive stock options 4,666,975 -
Convertible debt 591,907 -
------------- -------------
Diluted 262,649,651 246,672,276
------------- -------------
Basic net income per share 10.1c (1.7)c
------------- -------------
Diluted net income per share 9.9c (1.7)c
------------- -------------
3. Net product sales data
3 months 3 months 3 months 3 months
to 31.03.01 to 31.03.00 to 31.03.01 to 31.03.01
$'000 $'000 % increase % of total
------------- ------------- ------------ -------------
Adderall* 70,146 54,539 +29% 46%
Agrylin* 17,146 11,005 +56% 11%
Pentasa* 14,400 10,347 +39% 10%
Carbatrol* 9,639 5,592 +72% 6%
Calciums 4,795 3,985 +20% 3%
ProAmatine* 7,577 3,575 +112% 5%
DextroStat* 1,628 2,312 -30% 1%
OTC 7,325 5,801 +26% 5%
Others 18,748 16,009 +17% 13%
------------- ------------- ------------ -------------
151,404 113,165 34% 100%
------------- ------------- ------------ -------------
* Trade Mark
Unaudited consolidated profit and loss accounts
UK GAAP
3 months 3 months
to 31.03.01 to 31.03.00
(pound)'000 (pound)'000
------------ ------------
Turnover 108,115 74,471
Cost of sales (28,931) (14,038)
------------ ------------
Gross profit 79,184 60,433
Other operating expenses (54,359) (46,298)
------------ ------------
Operating profit 24,825 14,135
Finance charges, net (6,450) (1,247)
------------ ------------
Profit on ordinary activities before taxation 18,375 12,888
Taxation (1,744) (4,175)
------------ ------------
Profit on ordinary activities after taxation 16,631 8,713
------------ ------------
Earnings per share
- - basic 6.5p 3.5p
- - diluted 6.3p 3.4p
All results included above relate to the continuing operations of the Group.
Unaudited consolidated statement of total recognised gains and losses
3 months 3 months
to 31.03.01 to 31.03.00
(pound)'000 (pound)'000
------------ ------------
Profit for the period 16,631 8,713
Translation of overseas subsidiaries' financial statements 13,336 1,832
------------ ------------
Total recognised gains and losses relating to the period 29,967 10,545
------------ ------------
Unaudited consolidated balance sheets
UKGAAP
31.03.01 31.03.00
(pound)'000 (pound)'000
------------ ------------
Fixed assets
Goodwill 441,105 463,825
Other intangible assets 271,846 215,445
Tangible assets 33,669 24,330
Fixed asset investments 4,230 1,632
------------ ------------
750,850 705,232
------------ ------------
Current assets
Stocks 30,789 24,966
Debtors
- - due within one year 60,056 54,508
- - due after one year 15,369 -
Investments 100,269 36,369
Cash at bank and in hand 58,265 42,191
------------ ------------
264,748 158,034
Creditors: amounts falling due within one year (83,415) (76,078)
------------ ------------
Net current assets 181,333 81,956
------------ ------------
Total assets less current liabilities 932,183 787,188
Creditors: amounts falling due in more than one year (97,125) (80,574)
------------ ------------
Net assets 835,058 706,614
------------ ------------
Capital and reserves
Called-up share capital 12,898 12,569
Share premium 874,971 855,465
Capital reserve 2,755 2,755
Other reserves 24,247 24,247
Profit and loss account (79,813) (188,422)
------------ ------------
Equity shareholders' funds 835,058 706,614
------------ ------------
Basis of preparation
The accounts have been prepared in accordance with the accounting policies set
out in the full UK statutory accounts for the year ended December 31, 2000. The
results for the three months ended March 31, 2001 and 2000 have not been audited
and do not constitute statutory accounts within the meaning of Section 240 of
the Companies Act 1985.
Summary of significant differences between US generally accepted accounting
principles followed by the Group and UK generally accepted accounting principles
The Group's consolidated financial statements have been prepared under US GAAP,
which differs in certain respects from UK GAAP. The principal differences
between the Group's accounting policies under US GAAP and UK GAAP are set out in
the tables below:
Reconciliation of net income from US GAAP to UK GAAP
3 months 3 months 3 months 3 months
to 31.03.01 to 31.03.00 to 31.03.01 to 31.03.00
$'000 $'000 (pound)'000 (pound)'000
--------------- -------------- ------------ -------------
Net income/(loss) as reported under US GAAP 25,955 (4,266) 17,853 (2,661)
Adjustments to conform to UK GAAP:
Merger accounting adjustments
- restructuring costs charged to income (60) (60) (42) (36)
Amortisation of capitalised goodwill 2,451 2,715 1,698 1,699
Amortisation under acquisition accounting (8,237) (9,120) (5,706) (5,706)
Derecognition of deferred tax asset 6,500 - 4,573 -
Stock option compensation costs 2,121 23,246 1,444 14,522
Tax benefit from exercise of non-qualified stock options
3,090 1,072 1,959 673
Difference in accounting for convertible debt (1) 354 (1) 222
Accrued taxes on share options 10 - 7 -
Foreign exchange on US$ denominated liabilities
- - (5,154) -
--------------- -------------- ------------ -------------
Net income as reported under UK GAAP 31,829 13,941 16,631 8,713
--------------- -------------- ------------ -------------
Reconciliation of total shareholders' equity from US GAAP to UK GAAP
31.03.01 31.03.00 31.03.01 31.03.00
$'000 $'000 (pound)'000 (pound)'000
--------------- ----------- ----------- ------------
Total shareholders' equity as reported under US GAAP 761,711 631,354 535,777 395,760
Adjustments to conform to UK GAAP:
Merger accounting adjustments
- - restructuring costs charged to income 110 350 77 218
Goodwill written off to reserves (191,215) (214,561) (134,497) (134,496)
Goodwill amortisation 35,148 28,604 24,723 17,930
Net book value of goodwill on acquisition accounting for
Roberts Pharmaceutical Corporation 607,605 718,271 427,386 450,243
Deferred tax (26,769) (37,111) (18,830) (23,263)
Difference in accounting for convertible debt 464 354 327 222
Difference in valuation of fixed asset investments 258 - 181 -
Accrued taxes on share options (123) - (86) -
--------------- ----------- ----------- ------------
Total shareholders' equity as reported under UK GAAP
1,187,189 1,127,261 835,058 706,614
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Earnings per share per UK adjusted results
Earnings per share has been calculated by dividing the profit on ordinary
activities after taxation for each period by the weighted average number of
shares in issue during those periods, in accordance with FRS14.
The weighted average number of shares used in calculating fully diluted earnings
per share has been adjusted for the effects of all dilutive potential ordinary
shares in accordance with FRS14.
3 months 3 months
to 31.03.01 to 31.03.00
(pound)'000 (pound)'000
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Profit for the period (for basic and
diluted EPS) 16,631 8,713
Weighted average number of shares in
issue for basic EPS 257,390,769 246,672,276
Number of dilutive potential shares 5,258,882 12,629,355
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Total for fully diluted EPS 262,649,651 259,301,631
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