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BIOCHEM PHARMA [LOGO]SHIRE
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Proposed Merger
December 2000
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BIOCHEM PHARMA [LOGO]SHIRE
....a merger of two of the most profitable,
fast growing, publicly traded,
speciality pharmaceutical
companies...
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Comment on "Forward-Looking Statements"
The statements made during today's presentation, or in response to questions
during the Question & Answer period, 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 F-4 Prospectus and the
Annual Report filed on Form 10K by Shire with the Securities and Exchange
Commission.
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Section 57 Financial Services Act
This presentation does not constitute an offer to sell or issue, or a
solicitation of any offer to purchase or subscribe for, any ordinary shares in
the Company, nor shall it form the basis of, or be relied upon in connection
with, any contract for such purchase or subscription. No representation or
warranty, express or implied, is made or given by the Company as to the accuracy
or completeness of the information or the opinions contained in this
presentation and no liability is accepted for any such information or opinions.
This document is for distribution in the United Kingdom to persons of a kind
described in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1996. It is not intended to be distributed or
passed on, directly or indirectly, to any other class of persons. This document
is being supplied to you solely for your information and may not be reproduced,
further distributed to any other person or published, in whole or in part, for
any purpose.
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The Merger described in this presentation and in the press release dated 11
December 2000 (the "Press Release"), in which BioChem Shareholders would receive
Consideration Shares, requires the shareholder approval of Shire and BioChem and
the solicitation of such approval has not yet commenced.
In connection with the Merger, Shire will file a registration statement with the
US Securities and Exchange Commission ("SEC") which will include a Prospectus
and Proxy Statement. Other materials relating to the Merger will also be filed
with the SEC. Investors are urged to read the Prospectus and Proxy Statement and
other relevant documents to be filed with the SEC because they will include
important information.
Unless Shire otherwise determines, the Prospectus and Proxy Statement will not
be sent, directly or indirectly, in or into, or by the use of the mails or any
means or instrumentality (including without limitation, telephonically or
electronically) of interstate or foreign commerce, or facilities of a national,
state or other securities exchange of Australia or Japan and investors in
Australia or Japan will not be capable of voting with respect to approving the
Merger by any such use, means, instrumentality or facility and this announcement
may not be distributed in any such jurisdictions.
Deutsche Bank, which is regulated in the United Kingdom by the Securities and
Futures Authority Limited, is acting for Shire and no one else in connection
with the Merger and will not be responsible to anyone other than Shire for
providing the protections afforded to customers of Deutsche Bank nor for
providing advice in relation to the Merger.
Terms used in this presentation shall have the same meaning as those definitions
in the "Press Release".
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Merger benefits
o Broadens and enhances product portfolio
o Leading products in ADHD and HIV
o 5 products in growth phase
o Deepens pipeline and R&D capability
o 12 late-stage products in Phase II+
o Enhanced lead optimisation/chemistry
o Enhanced access to Biotech companies and universities
o Leveraging of Shire marketing infrastructure
o Strong cash flow to reinvest in search & development strategy
o Larger, more diversified portfolio
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Combined company overview
Business Innovation, specialty pharma
Function Search & development plus marketing
Geography Direct marketing in 7 of the 8 key markets
Major Therapeutic CNS, Oncology, Antivirals, Vaccines
Areas
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Financial dimensions
199 pro forma combined(1)
o US$ 587m revenues(1)(2)
o US$ 164m operating income(1)(3)
o Operating margin: 28%(3)
o US$ 138m R&D (23% of revenues)(1)
o US$ 8.5bn market capitalisation(4)
(1) Source: Shire and BioChem Pharma management. Based on an average exchange
rate over the period of C$1.49 per US$
(2) Includes CliniChem revenues of US$49.3m
(3) Pre APB25 charge
(4) As at December 8th 2000 on a fully diluted basis
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Key drivers of revenue growth(1)
2001-2003
Adderall/SLI 381(2)
3TC(TM)/Combivir(TM)/Trizivir(TM)(3)
Agrylin
Pentasa
Carbatrol
Zeffix(TM)(3)
Second Look (CADx)
Reminyl(2)
Lambda(2)
(1) Ranked by latest twelve months 9/30/00 (LTM) sales
(2) Subject to relevant regulatory approvals
(3) 3TC, Combivir, Trizivir and Zeffix are trademarks of GlaxoWellcome
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Broadens product portfolio
Last Twelve Months (LTM) 9/30/2000
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Revenues (US$m) YoY% growth Market share(2)
--------------- ----------- ---------------
Adderall 204.1 +71% 33%
3TC(1) 125.5 +3% 55%(3)
Agrylin 47.4 +46% 15%
Pentasa 46.0 -18% 18%
Carbatrol 23.2 +96% 25%
ProAmatine 20.1 -5% 20%
Zeffix(1) 10.9 +445% 100%
(1) Trademarks of GlaxoWellcome. Royalty income plus Canadian product
sales
(2) Market share based on IMS prescription data
(3) Market share based on nucleoside analog monotherapy and combination
therapy product revenues; moving 13 week total prescriptions
Source: Shire Management and BioChem Pharma management. Assumes an average
exchange rate of C$1.47 per US$
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3TC Franchise: Epivir/Combivir/Trizivir(1)
o Foundation for HIV/AIDS therapy - primary component of many combination
therapies
o Nucleoside analog reverse transcriptase inhibitor
o US$125.5 million LTM revenues(2)
o Introduction of a once-a-day dosage and encouraging data on resistance
profile could sustain future growth
o Patent protection through 2010(3)
(1) 3TC, Epivir, Combivir and Trizivir are trademarks of
GlaxoWellcome
(2) Royalty income and Canadian product sales
(3) Further protection expected on combinations until 2018
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Zeffix(TM)
o Only approved oral treatment for Hepatitis B
o Approximately 30 million active chronic HBV sufferers in China and Japan
o US$10.9 million LTM revenues(1)
o Launched in Japan November 2000
o A key growth driver for combined group
o Patent protection through 2013
(1) Royalty income and Canadian product sales
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Querterly Zeffix(TM) sales
[The following table was depicted as a bar chart in the printed material.]
Q1 99 Q2 99 Q3 99 Q4 99 Q1 00 Q2 00 Q3 00
----- ----- ----- ----- ----- ----- -----
East 0.8 2.2 7.9 13.3 20.0 25.0 28.1
West
North
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Combined LTM 9/30/00 product sales and
royalties
[The following table was depicted as a pie chart in the printed material.]
Adderall 33%
3TC(1) 21%
Agrylin 8%
Pentasa 8%
Carbatrol 4%
ProAmatine 3%
OTC 3%
Calciums 3%
Zeffix(1) 2%
Fluviral 1%
Others 14%
Combined Total:
US$611m
(1) Royalty income stream from GlaxoWellcome sales and Canadian product sales;
Trademarks of GlaxoWellcome. Under agreement, BioChem receives royalties from
GlaxoWellcome on sales of lamivudine in the treatment of HIV/AIDS
(3TC/Epivir/Combivir/Trizivir) and HBV
(Zeffix/Zefix/Epivir-HBV/Heptovir/Heptodin)
Source: Shire and BioChem management. Based on an average exchange rate over the
period of C$1.47 per US$
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Combined LTM 9/30/00 sales and royalties
by therapeutic area
[The following table was depicted as a pie chart in the printed material.]
CNS 39%
Antiviral 22%
Oncology 8%
GI 8%
Metabolic 6%
OTC 3%
Other 14%
Combined Total:
US$611m
Source: Shire and BioChem management. Based on an average
exchange rate over the period of C$1.47 per US$
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Geographic product rights
US Canada Europe Japan
Epivir/Combivir/Trizivir X(1)
Adderall/DextroStat X
Agrylin X X X X
Pentasa X
Carbatrol X X X X
Zeffix X(1)
ProAmatine X X X(2)
Reminyl X(2)
Second Look X X X X
X = already marketed
X = rights owned, future potential market
(1) Joint venture with GlaxoWellcome
(2) UK / Ireland only
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Research and Development
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Enhanced R&D capability
Complementary skills
Shire strengths
---------------------------------------------------->
Lead Clinical /
optimisation Preclinical Regulatory Marketing
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BioChem Strengths
In complementary therapeutic areas
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Development pipeline
---------------- ---------- -------- ------------- -----
Therapeutic Area PC/Phase I Phase II Phase III/Reg Total
---------------- ---------- -------- ------------- -----
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CNS 5 1 4 10
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Antiviral 2 0 0 2
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Oncology 1 1 2 4
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Vaccines 3 0 0 3
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Metabolic / GI 0 3 1 4
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Total 11 5 7 23
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11 early stage projects, 12 late stage
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Post Phase II Pipeline
<TABLE>
<CAPTION>
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Product Indication Phase II Phase III Registration Marketed
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<S> <C> <C> <C> <C>
Central Nervous System
Reminyl (galantamine) Alzheimer's disease X
SLI 381 (Adderall once daily) ADHD X
Dirame Moderate to severe pain X
Frakefamide Moderate to severe pain(1) X
SPD 417 Bipolar disorder X
Oncology / Haematology
Agrylin Thrombocythemia X
Troxatyl leukemia X
SPD 424 Prostate cancer X
Metabolic disease
Lambda Hyperphosphatemia X
Gastroenterology
Balsalazide Ulcerative colitis X
Emitasol Diabetic gastroparesis X
Pentasa 500mg Ulcerative colitis X
</TABLE>
(1) Frakefamide acts peripherally
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CNS (Alzheimer's disease)
o Reminyl(TM)(galantamine)
o Novel dual mode of action
- acetylcholinesterase inhibitor
- nicotinic modulator
o First European launch (UK) 21 Sept 2000
- further EU launches planned(1)
o FDA approvable letter Aug 2000
- launch planned H1 2001(2)
o Japanese launch expected 2003(1)
o Co-development and licensing agreement with Janssen
(1) Subject to regulatory approval
(2) Subject to final approval
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CNS (ADHD)
o SLI 381
o Novel, once a day formulation of Adderall
o First results presented in Oct 2000
o NDA submitted early - 3 Oct 2000
o Anticipated launch in Q4 2001(1)
o Adderall new line extensions
o Launched in December 2000
o Allows increased dosing flexibility
(1) Subject to regulatory approval
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CNS (Pain control)
o Dirame
o Oral centrally acting analgesic for moderate to severe pain
o Opiate partial agonist and antagonistic activity
o Studying addiction potential (key for sales value)
o Phase III - US for chronic pain, additional work planned
o Global rights owned by Shire
o Anticipated launch by 2003(1)
o Frakefamide
o Intravenous, peripherally acting opiate analgesic for moderate to
severe pain
o Phase II for acute pain
o Designed to avoid centrally mediated opioid side effects
o Partnered with AstraZeneca for all regions, except Canada
(1) Subject to regulatory approval
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Oncology (Haematology)
o Agrylin (anagrelide)
o For elevated platelet count (eg Essential thrombocythemia)
o Platelet specific
o Marketed in US and Canada by Shire
o Planning registration in Europe, in Phase I in Japan
o Orphan drug status in US and Japan
o Shire owns worldwide rights
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Oncology
o Troxatyl(TM) (troxacitabine)
o DNA polymerase inhibitor
o Phase II development for leukemia (AML, CML-BP)
o 73% of AML patients demonstrated a reduction in leukemia cells in a
Phase IIa trial
o Further Phase II monotherapy trials and Phase I/II combination
trials are ongoing
o Worldwide commercialisation rights owned
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Foznol(TM) (Lambda)
o Phosphate binder for patients in end-stage renal failure
o Major clinical need for non-calcium, non-aluminium based therapies
o Europe
o completing Phase III, filing Q1 2001
o US
o end 2001 filing anticipated(1)
o Global rights owned
o development underway in Japan (end Phase I)(1)
(1) Subject to regulatory approval
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US Canada Europe Japan
Reminyl X X X(1) X
Dirame X X X X
Adderall LA (SLI 381) X X X X
Frakefamide X
Carbatrol (incl bipolar) X X X X
SPD 421 X X X X
Agrylin X X X X
Troxatyl X X X X
SPD 424 X X X X
Foznol (Lambda) X X X X
Balsalazide X
Pentasa 500mg X
Recombinant Vaccines X X X X
X = already marketed
X = rights owned, future potential market
(1) Except UK/Ireland, where Shire owns the rights
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Headline merger terms
o Fixed price offer of US$37, subject to cap and floor
o premium of 39.6% over BioChem's closing price on December 8, 2000
o Values BioChem(1) at approximately US$4.0 billion
o Cap and floor set:
Shire ADS (US$) Terms
$47.20 - $70.80 Fixed price of US$37
< $47.20 Fixed exchange ratio of 0.7839
> $70.80 Fixed exchange ratio of 0.5226
o Merger agreement contains termination clauses and 19.9% option
o Closing expected Q2 2001(2)
o Pro forma market capitalisation of US$8.5 billion(3)
(1) Fully diluted share capital
(2) Subject to required approvals
(3) As of December 8, 2000 on a fully diluted basis
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Shire historical financial performance (US$m)
1998 1999 9M to 30/9/00
---- ---- -------------
Revenue 309.0 401.5 380.6
Cost of sales (95.0) (93.5) (67.4)
Gross profit 214.0 308.0 313.2
R&D (59.3) (77.5) (86.3)
Selling and G&A (101.0) (130.9) (112.6)
====== ====== ======
EBITDA 53.7 99.6 114.3
(% margin) 17% 25% 30%
Operating income 28.5 71.1 91.5
(% margin) 9% 18% 24%
Net interest (0.1) (2.4) (4.3)
Other income/(expense) 0.4 (0.5) 0.1
Tax (3.0) (16.1) (25.3)
====== ====== ======
Net income(1) 25.8 52.1 62.0
(1) Net income stated prior to APB25 charge and exceptionals
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BioChem historical financial performance (US$m)
1998(1) 1999(1) 9M to 30/9/00(2)
------- ------- ----------------
Revenue 141.5(4) 185.7(3) 156.8(4)
Cost of sales (8.0) (9.6) (9.8)
Gross profit 133.5 176.1 147.0
R&D (34.4) (60.3) (34.8)
Selling and G&A (21.1) (17.8) (20.4)
====== ====== ======
EBITDA 78.0 98.0 91.8
(% margin) 55% 53% 59%
Operating income 73.4 92.5 86.5
(% margin) 52% 50% 55%
Net interest 6.5 3.2 0.0
Other (expense)/income (81.6) 4.1 94.5
Tax (5.1) (6.5) (8.1)
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Net (loss)/income (6.8) 93.3 172.9
(1) US GAAP
(2) Canadian GAAP at an average exchange rate of C$1.47 per US$
(3) Includes CliniChem revenues of US$49.3m in 1999
(4) Also includes CliniChem revenues
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Unaudited pro forma Shire and BioChem US
GAAP historical financial performance (US$m)
1998 1999
---- ----
Revenue 450.5(1) 587.2(2)
Cost of sales (103.0) (103.0)
Gross profit 347.5 484.2
R&D (93.6) (137.8)
Selling and G&A (122.1) (148.6)
====== ======
EBITDA 131.8 197.8
(% margin) 29% 34%
Operating income 101.8 163.6
(% margin) 23% 28%
Net interest 6.4 0.8
Other (loss)/income (81.1) 3.7
Tax (8.1) (22.6)
====== ======
Net income(3) 19.0 145.5
(1) Includes CliniChem revenues
(2) Includes CliniChem revenues of US$49.3m in 1999
(3) Net income stated prior to APB25 charge and exceptionals
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Chairman and Executive Directors
Dr James Cavanaugh Chairman
Rolf Stahel Chief Executive
Dr Wilson Totten Group R&D Director
Angus Russell Group Finance Director
New non-executive directors to be appointed on closing from the BioChem Pharma
board:
Dr. Francesco Bellini, Ph.D.
Hon. James A. Grant
Gerard Veilleux
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Summary
o Leadership in ADHD and HIV
o More products and projects
o Complementary skills
o Enhanced growth prospects
o Financially attractive
o Targeted to be earnings enhancing within one year after closing
o Strong combined cash flow
o Opportunities for synergies
o Increase in net cash position of US$186 million(1)
o Stronger search capabilities
(1) BioChem's net cash and temporary investments position as at
September 30, 2000 under Canadian GAAP
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[LOGO]
BIOCHEM PHARMA [LOGO]SHIRE
....a merger of two of the most profitable,
fast growing, publicly traded,
speciality pharmaceutical
companies...
