February 12, 2015 – Shire (LSE: SHP, NASDAQ: SHPG) announces unaudited results for the year to December 31, 2014.
| Financial Highlights | Full Year 2014 | Growth(1) |
| Product sales | $5,830 million | +23%(2)(3) |
| Total revenues | $6,022 million | +22% |
| Non GAAP operating income | $2,593 million | +39% |
| US GAAP operating income | $1,698 million | -2% |
| Non GAAP EBITDA margin (excluding royalties & other revenues)(4) | 44% | +6 pps(5) |
| US GAAP net income margin(6) | 57% | +44 pps |
| Non GAAP diluted earnings per ADS | $10.60 | +38% |
| US GAAP diluted earnings per ADS | $17.28 | +390% |
| Non GAAP cash generation | $2,402 million | +35% |
| Non GAAP free cash flow | $2,529 million | +94% |
| US GAAP net cash provided by operating activities | $4,228 million | +189% |
1) Results and percentages compare to the full financial year 2013.
(2) Product sales from continuing operations, including ViroPharma Incorporated (“ViroPharma”) acquired January 24, 2014, and excluding the DERMAGRAFT business sold on January 17, 2014. Product sales excluding products acquired with ViroPharma were up 11% in 2014.
(3) On a Constant Exchange Rate (“CER”) basis, which is a Non GAAP measure, product sales were up 23%.
(4) Non GAAP earnings before interest, tax, depreciation and amortization (“EBITDA”) as a percentage of product sales, excluding royalties and other revenues.
(5) Percentage point change (“PPS”).
(6) US GAAP net income as a percentage of total revenues.
The Non GAAP financial measures included within this release are explained on page 32, and are reconciled to the most directly comparable financial measures prepared in accordance with US GAAP on pages 24 - 29.
Highlights
• Delivered exceptionally strong product sales and Non GAAP diluted earnings per ADS
• Successful integration of ViroPharma including accelerated CINRYZE sales
• On track to complete the acquisition of NPS Pharma([1]) in the first quarter of 2015
• Substantially enhanced and progressed pipeline including recent FDA approval of VYVANSE for BED
• Positioned for further growth in 2015 despite currency headwinds and the loss of exclusivity for INTUNIV
• Confident in our ability to deliver our 10x20 organic growth aspirations with additional upside from Lumena,
Fibrotech, Bikam and NPS Pharma acquisitions
Flemming Ornskov, M.D., Shire’s Chief Executive Officer, commented:
2014 was a transformational year for Shire as we delivered on our strategy by achieving record revenues and Non GAAP diluted earnings per ADS, and developing the strongest pipeline in our history. We also successfully executed on value-enhancing M&A and generated strong cash flows which will enable us to continue investing in drivers of growth.
In 2014 Shire delivered value through commercial excellence across our product portfolio. Bolstered by demand for therapies in our expanded Hereditary Angioedema (HAE) portfolio, sales by our Rare Diseases business unit grew by 46%([2]). CINRYZE grew 30%([3]) on a pro-forma basis and contributed sales of $503 million, and FIRAZYR saw a 55% increase with $364 million in sales. Neuroscience and GI also contributed to our strong results, with VYVANSE sales up 18% and LIALDA sales up 20%.
We significantly enhanced our pipeline in 2014, and now have 21 distinct programs in clinical development. Importantly, our pipeline is advancing, most recently with the US approval of VYVANSE for Binge Eating Disorder (BED) in adults. VYVANSE is the first product approved for BED that will help address this condition which affects an estimated 2.8 million adults in the US. In addition, positive results from a second phase 2 maribavir study in patients with disease which is resistant or refractory to the standard of care CMV therapy showed that maribavir, at all doses, was effective at lowering CMV to below the limits of assay detection.
The acquisition of ViroPharma contributed significantly to our growth this year, and the Lumena acquisition materially expanded our Gastrointestinal (GI) pipeline. Recently we announced plans to acquire NPS Pharma, a rare disease focused biopharmaceutical company. The transaction, expected to close in the first quarter of 2015, will enhance our growth profile and enable us to apply our GI and rare disease expertise to deliver two therapies – GATTEX for short bowel syndrome and NATPARA for hypoparathyroidism – to patients.
Following an exceptional 2014, we expect to deliver further growth in 2015 despite significant foreign currency headwinds, the loss of exclusivity for INTUNIV, and the inclusion of CINRYZE in our 2014 results. In 2015, Shire is well-positioned on our journey to become a leading global biotech as we complete our One Shire reorganization with the expected benefits of profitability and efficiency, and advance pivotal regulatory and clinical milestones that will contribute to $10 billion in product sales by 2020.
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