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TRANSCRIPT
UBS GLOBAL LIFE SCIENCES CONFERENCE
September 28, 2004
Matthew EmmensChief Executive Officer
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THE “SAFE HARBOR” STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Statements included herein that are not historical facts are forward-looking statements. Such forward-looking statements involve a number of risks and uncertainties and are subject to change at any time. In the event such risks or uncertainties materialize, Shire’s results could be materially affected. The risks and uncertainties include, but are not limited to, risks associated with the inherent uncertainty of pharmaceutical research, product development, manufacturing and commercialization, the impact of competitive products, including, but not limited to, the impact on Shire’s Attention Deficit Hyperactivity Disorder (ADHD) franchise, patents, including but not limited to, legal challenges relating to Shire’s ADHD franchise, government regulation and approval, including but not limited to the expected product approval dates of lanthanum carbonate (FOSRENOL®), methylphenidate (METHYPATCH®), anagrelide hydrochloride (XAGRID®) and carbamazepine (BIPOTROL®), the implementation of the planned reorganization and other risks and uncertainties detailed from time to time in Shire’s filings with the Securities and Exchange Commission.
The following are trademarks of Shire or companies within the Shire Group, which are the subject of trademark registrations in certain territories: ADDERALL XR® (mixed amphetamine salts), AGRYLIN® (anagrelide hydrochloride), BIPOTROL® (carbamazepine), CARBATROL® (carbamazepine), FOSRENOL® (lanthanum carbonate), METHYPATCH®
(methylphenidate), PROAMATINE® (midodrine hydrochloride),TROXATYL® (troxacitabine), XAGRID® (anagrelide hydrochloride).
The following are trademarks of third parties: 3TC® (trademark of GlaxoSmithKline (GSK)), PENTASA® (trademark of FerringAS), REMINYL® (trademark of Johnson & Johnson), ZEFFIX® (trademark of GSK), STRATTERA® (trademark of Eli Lilly)
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Agenda
Recent Business HighlightsShire Therapeutic Areas
RenalGI (Inflammatory Bowel Disease)CNS (ADHD)
Shire R&D ActivitiesRecent Financial HighlightsConclusion
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Business HighlightsStrong second quarter:
upgrade earnings for continuing operations growth in excess of 20% for 2004*
ADDERALL XR Adult approved by the FDA 12 August 2004FOSRENOL
US PDUFA date extended to 26 October 2004No safety and efficacy issue raised in FDA letterPre-launch preparation underwayUS launch planned for December 2004EU: further approvals are expected by end of 2004Strong composition of matter patent coverage until 2016
PENTASA 500mg anticipated launch Q3 2004TROXATYL global research, development and marketing rights out-licensed to Structural GenomiX Inc.Sales of vaccines business to ID Biomedical completedFour projects in development (two in Phase III and two in Phase II), and four in registration
*This is a non-GAAP financial measure. Management believes that the presentation of this non-GAAP financial measure provides useful information to investors regarding Shire’s underlying performance as the costs associated with the reorganization, the gain on the sale of an investment and the impact of the discontinued operations are not part of the Company’s ongoing operations.
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RenagelRenagel®® PhosLoPhosLo®®
OTC calciumOTC calcium
$278 Million(MAT June, 2004)
Market Profile455,000
410,000
Diagnosed Treated
US Renal Data System, 2002
RenalRenalRenal
End Stage Renal Disease in the U.S.*End Stage Renal Disease in the U.S.*
U.S. Dialysis Patient – Diagnosed and Treated
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RenagelRenagel®® PhosLoPhosLo®®
OTC calciumOTC calcium
$800 MillionPotential
$800 MillionPotential
455,000410,000
Diagnosed Treated
US Renal Data System, 2002
$278 Million(MAT June, 2004)
RenalRenalRenal
U.S. Dialysis Patient – Diagnosed and Treated Market Profile
End Stage Renal Disease in the U.S.*End Stage Renal Disease in the U.S.*
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RenalRenal
Fosrenol®Hyperphosphatemia in ESRD
Improved binding capacitySelective for phosphate = High PotencyImproved complianceChewable tablet reduces water intake
New clinical guidelines support adoptionAggressive phosphate reduction goalCalcium being restricted
Prescribing audience readily coveredPatent protection through 2016
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Pre-clinical Evidence
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
-3 -2 -1 0 1 2 3 4 5 6
WeeksWeeks
Urin
e Ph
osph
orus
Exc
retio
n (
Urin
e Ph
osph
orus
Exc
retio
n ( m
mol
mm
ol/2
4h)
/24h
)
5/6 5/6 NephrectomyNephrectomy
Each binder dosedat 1000
mg/kg/day,n=10
Mean and s.e.m.
Damment SJP, Webster I. Annual Meeting of the American Society of Nephrology; 11/12-17, 2003; San Diego, Calif.
Vehicle AlOH3 SevelamerCaC03 LanthanumLanthanum
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Inflammatory Bowel Disease in the United States*
500,000
600,000
Ulcerative Colitis Crohn’s Disease
Prevalence Treated
500,000500,000
*Crohn’s and Colitis Foundation of America, 2001
5-ASA / IBD
10.3%$ GrowthAugust 2003 - July 2004
$729 Million$ MarketAugust 2003 - July 2004
Gastrointestinal - IBDGastrointestinal Gastrointestinal -- IBDIBD
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Gastrointestinal Gastrointestinal -- IBDIBD
Pentasa (mesalamine)
Treatment for Ulcerative Colitis75% of Rxs for Crohn’s disease (U.S.)DACON: 12 caps x 250 mg / day
Pentasa 500mg ApprovedReduce to 6 caps / dayGreater convenience and complianceOpportunity for growth
Dissolution in stomach Small intestine Terminal ileum
Ascending colon Large intestine Large intestine
Time post dose: 0.22 hours 1.92 hours 6.33 hours
Time post dose: 10.57 hours 15.53 hours 24 hours
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3.5 hr ileum 4.5 hr Ascending colon
16 hr Descending Colon 24hr Rectum
Gastrointestinal Gastrointestinal -- IBDIBD
SPD 476 (mesalamine)
Treatment for Ulcerative ColitisNovel matrix formulation targets colon (“Fit” with PENTASA)High strength tablet form (1.2 g)Potential for QD dosing
Positive Phase II Study / Phase III OngoingNDA submission target 2005
Patent protection through 2020
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ADHD Market Potential
Prevalence Diagnosed TreatedPrevalence Diagnosed Treated
Pediatric Patients*
Million
Adult Patients*
8.2
4.8
.63
1.8
.60
1.7
*National Institute for Mental Health, 1999
ADHDADHD
39%$ GrowthAugust 2003 – July 2004
20%Growth in RxAugust 2003 – July 2004
$2.43 Billion$ MarketMAT July 2004
CNS - ADHDCNS CNS -- ADHDADHD
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Effective symptom control in the afternoon / evening
Non stimulant alternative to Amphetamines and Methylphenidate with substantial efficacy
Idiosyncratic therapeutic responses => Need for variety of pharmacological options
Current Medical Needs
CNS - ADHDCNS CNS -- ADHDADHD
SPD465 (ADDERALL XR2)
SPD503 (guanfacine)
SPD485 (METHYPATCH)
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CNS
AdultPediatric
XAmphetamine – TD
XMPH-TD
Methylphenidate:
XXSPD503 (Guanfacine)
Non-Stimulant:
XSPD465 (XR2)
XAdderall XR, Adult
Amphetamine:
Shire ADHD Portfolio
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CNS CNS -- ADHDADHD
SPD 503 (guanfacine)
Differentiated mechanism of action in ADHD Novel formulation of a non-scheduled compoundProvide second entry in growing “non-stimulant” segmentPatent protection through 2015 NDA filing: H1 / 2005
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CNS CNS -- ADHDADHD
SPD485 (METHYPATCH)SPD485 (METHYPATCH)
First transdermal drug delivery product for ADHDSmooth deliveryLong duration of effectFlexibility of “wear time”
Patent protectionTechnology platform: 2012Formulation: 2018
NDA supplement: H1 / 2005
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R&D Activities – CNS
ADDERALL XR Adult indication US - indication approved on 12 August 2004Adult indication Canada - sNDS submitted April 2004Pediatric Written Request - activities on-track in support of response – if approved a further 6-month Hatch-Waxman exclusivity will be granted (April 2005)
SPD503 (guanfacine) 2nd Phase III study initiated April 2004SPD485 (METHYPATCH) Clinical program agreed with FDA, initiated in May 2004 SPD465 (ADDERALL XR2) Phase II ongoing BIPOTROL – US PDUFA date 13 December 2004
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R&D Activities – GI
PENTASA 500mg launch planned for Q3 2004
SPD476 (mesalamine) filing on track for 2005
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R&D – Renal Diseases
FOSRENOL US PDUFA date 26 October 2004No safety and efficacy issue raised in FDA letterApproved in RMS (Sweden)
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Key Projects Flow
2005
2005
2005
SPD465 (ADHD)
SPD476 (UC)
SPD503 (ADHD)
BIPOTROL (Bipolar)
METHYPATCH (ADHD)
XAGRID (EU)
FOSRENOL (US)
PENTASA 500
Sept 2003
Feb 2003
Feb 2004
ApprovedRegPIIIPII
ADDERALL XR ADULT
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Financial Highlights – Q2 2004
-1.8246cInterim dividend:Cents (one pence) per ordinary share
42.6c55.2cADS
Non GAAP EPS (diluted)*:
+30%14.2c18.4cOrdinary shares
+23%72.789.5Income from continuing operations
(7.2)(55.5)Loss from discontinued operations
+27%99.4126.6Income from continuing operations before taxes
38.4c20.4cADS6.8c
34.0
110.2321.0
Q2 2004
+7%+ 8%
12.8c
65.5
102.6298.2
Q2 2003
EPS (diluted):Ordinary shares
Net Income
Operating incomeRevenues
Millions of US$, except per share amounts
*This is a non-GAAP financial measure. Management believes that the presentation of this non-GAAP financial measure provides useful information to investors regarding Shire’s underlying performance as the costs associated with the reorganization, the gain on the sale of an investment and the impact of the discontinued operations are not part of the Company’s ongoing operations. A reconciliation of this non-GAAP financial measure to the US GAAP financial measure can be found later in this presentation.
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Non-GAAP measures – Q2 2004
Reconciliation of reported EPS excluding certain transactions:
55.2c
7.8c
26.4c6.9c (6.3c)
20.4c
Per ADS
Q2 2004
18.4c
2.6c
8.8c2.3c
(2.1c)
6.8c
Per ORDS
Q2 2004
91.9
Diluted EPS excluding reorganization costs, discontinued operations and gain on sale investment
13.1
44.211.3
(10.7)
Reorganization costs, net of taxDiscontinued operations- loss on disposal- operational loss for Q2 2004
Gain on sale of investment, net of tax
Add back:
34.0Diluted EPS (as reported)
$mQ2 2004
NB: 1 ORD = 3 ADS
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Non-GAAP measures – 6 months to June 30, 2004Reconciliation of reported EPS excluding certain transactions:
180.8
15.9
44.220.1
(10.7)
111.2
$mH1 2004
104.7c
9.3c
25.5c11.7c (6.3c)
64.5c
Per ADS
H1 2004
34.9c
3.1c
8.5c 3.9c
(2.1c)
21.5c
Per ORDS
H1 2004
175c
Diluted EPS excluding reorganization costs,discontinued operations and gain on sale ofinvestment
-
-12c
-
Reorganization costs (net of tax)Discontinued operations- loss on disposal- operational loss for H1 2004
Gain on sale of investment (net of tax)
Add back:
163c Diluted EPS (as reported)
Per ADS
FY 2003
NB: 1 ORD = 3 ADS
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Balance Sheet
* Cash and cash equivalents, restricted cash and marketable securities
Millions of US$
1,534
1,158
2,004
31.03.04
1,628
1,251
2,022
30.06.04
1,414
1,038
1,923
31.12.03
Gross cash*
Net cash
Net assets
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Conclusion
Solid franchises in growing, underserved marketsSignificant products in late-stage developmentStrong registration / commercialization capabilityQuality reputation among high-prescribing, specialist MDs
Highly productive and flexible sales force
Track record of impressive financial performanceStrong balance sheet/cash position