Shire plc – ‘PREM14A’ on 1/17/01

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Preliminary Proxy Solicitation Material — Merger or Acquisition   —   Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: PREM14A     Preliminary Proxy Solicitation Material -- Merger    356   1.68M 
                          or Acquisition                                         

Document Table of Contents

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SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) 
of the Securities Exchange Act of 1934

                                                                [Download Table]
                                                                       
Filed by the Registrant /X/                                            
Filed by a Party other than the Registrant / /                         

Check the appropriate box:                                             
/X/        Preliminary Proxy Statement                                 
/ /        Confidential, for Use of the Commission Only (as permitted  
           by Rule 14a-6(e)(2))                                        
/ /        Definitive Proxy Statement                                  
/ /        Definitive Additional Materials                             
/ /        Soliciting Material Pursuant to Section240.14a-11(c) or     
           Section240.14a-12                                           

           SHIRE PHARMACEUTICALS GROUP PLC                             
-----------------------------------------------------------------------
           (Name of Registrant as Specified In Its Charter)            

-----------------------------------------------------------------------
     (Name of Person(s) Filing Proxy Statement, if other than the      
                              Registrant)                              

Payment of Filing Fee (Check the appropriate box):                              

                                                                [Download Table]
                                                                          
/ /        No fee required.                                               
/X/        Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 
           and 0-11.                                                      
           (1)  Title of each class of securities to which transaction    
                applies:                                                  
                Ordinary Shares, 5 pence nominal value per share          
                ----------------------------------------------------------
           (2)  Aggregate number of securities to which transaction       
                applies:                                                  
                254,707,924                                               
                ----------------------------------------------------------
           (3)  Per unit price or other underlying value of transaction   
                computed pursuant to Exchange Act Rule 0-11 (set forth the
                amount on which the filing fee is calculated and state how
                it was determined):                                       
                $15.98*                                                   
                ----------------------------------------------------------
           (4)  Proposed maximum aggregate value of transaction:          
                $4,070,232,625                                            
                ----------------------------------------------------------
           (5)  Total fee paid:                                           
                $814,047                                                  
                ----------------------------------------------------------
           *    Based on the average of the high and low prices for the   
                ordinary shares as reported on the London Stock Exchange  
                on January 10, 2001.                                      
/ /        Fee paid previously with preliminary materials.                
/ /        Check box if any part of the fee is offset as provided by      
           Exchange Act Rule 0-11(a)(2) and identify the filing for which 
           the offsetting fee was paid previously. Identify the previous  
           filing by registration statement number, or the Form or        
           Schedule and the date of its filing.                           
           (1)  Amount Previously Paid:                                   
                ----------------------------------------------------------
           (2)  Form, Schedule or Registration Statement No.:             
                ----------------------------------------------------------
           (3)  Filing Party:                                             
                ----------------------------------------------------------
           (4)  Date Filed:                                               
                ----------------------------------------------------------

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SHIRE PHARMACEUTICALS GROUP PLC 
EAST ANTON, ANDOVER 
HAMPSHIRE SP10 5RG
PROXY STATEMENT FOR THE 
EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS 

SOLICITATION AND REVOCATION OF PROXIES

    The Board of Directors of Shire Pharmaceuticals Group plc (the "Company") is
soliciting the accompanying proxy for use at the extraordinary general meeting  
of shareholders to be held at 35 New Broad Street, London, EC2M 1SQ, England, on
-  , 2001 at 3:00 p.m., local time. If a proxy is received at least     
48 hours before the meeting, as indicated below, the shares represented by it   
will, on a poll, be voted unless the proxy is revoked by written notice prior to
the meeting. If matters other than those set forth in the accompanying Notice of
Extraordinary General Meeting are presented at the meeting for action, the proxy
holders will vote the proxies as they think fit. The approximate date on which a
definitive proxy statement and the accompanying proxy will first be mailed to   
shareholders is       , 2001.                                                   

    At the extraordinary general meeting, you will be asked to consider and vote
upon a proposal to approve the merger of Shire and BioChem Pharma Inc.          
("BioChem") under the terms of a plan of arrangement. We will issue up to       
254,707,924 ordinary shares in exchange for all of the outstanding BioChem      
shares (and assuming all existing BioChem shareholders exchange their BioChem   
shares for ordinary shares pursuant to the merger and excluding any shares to be
issued pursuant to the exercise of options under the BioChem Stock Option Plans 
or other rights).                                                               

 At the extraordinary general meeting, you will also be asked to approve a
special resolution increasing the Directors' power, for a period of 5 years from
the date of the passing of the resolution, to allot securities within the limits
of the authorised share capital for cash free of pre-emption rights up to a     
nominal amount of L  -  . This action does not relate to the merger.            

SEE "RISK FACTORS" BEGINNING ON PAGE   OF THIS PROXY STATEMENT FOR A    
DISCUSSION OF CERTAIN MATTERS YOU SHOULD CONSIDER BEFORE VOTING FOR OR AGAINST  
THE APPROVAL AND ADOPTION OF THE MERGER.                                        

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES 
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE   
ADEQUACY OR ACCURACY OF THIS PROXY STATEMENT. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.                                                          

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SUMMARY 

 THE FOLLOWING IS A SUMMARY OF CERTAIN INFORMATION CONTAINED IN THIS PROXY
STATEMENT WHICH HIGHLIGHTS THE KEY ASPECTS OF THE MERGER. TO UNDERSTAND THE     
MERGER MORE FULLY AND FOR A MORE COMPLETE DESCRIPTION OF THE LEGAL TERMS OF THE 
MERGER, YOU ARE URGED TO READ AND CONSIDER CAREFULLY ALL OF THE INFORMATION     
CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROXY STATEMENT AND IN THE       
ANNEXES ATTACHED TO THIS PROXY STATEMENT.                                       

 REFERENCES TO "$" OR "DOLLARS" HEREIN ARE TO US DOLLARS, UNLESS OTHERWISE
SPECIFIED.                                                                      

A TABLE OF CONTENTS FOR THIS PROXY STATEMENT APPEARS AT THE BACK OF THIS
DOCUMENT.                                                                       

GENERAL 

 This Proxy Statement relates to the proposed merger of Shire and BioChem,
under the terms of a plan of arrangement. A copy of the merger agreement is     
attached as Annex A to this Proxy Statement and a copy of the plan of           
arrangement is attached as Annex B to this Proxy Statement. In the merger,      
BioChem shareholders will be entitled to receive, for each BioChem share, Shire 
ADSs, Shire ordinary shares or, in the case of Canadian residents, shares of    
3829341 Canada Inc., a wholly-owned subsidiary of Shire, which we refer to as   
Exchangeco. Each ADS represents three ordinary shares. We will issue between    
1.5678 and 2.3517 ordinary shares for each BioChem share. The exchange ratio    
will be determined based on the average trading price of the ADSs for the       
fifteen consecutive trading days ending three days before the date the merger is
consummated.                                                                    

THE COMPANIES 

SHIRE PHARMACEUTICALS GROUP PLC                                                 

East Anton                                                                      

Andover                                                                         

Hampshire SP10 5RG                                                              

ENGLAND                                                                         

Telephone: (44)1-264-333-455                                                    

 We are an international specialty pharmaceutical company with a strategic
focus on four therapeutic areas:                                                

- central nervous system disorders;                                             

- oncology/haematology;                                                         

- metabolic diseases; and                                                       

- gastroenterology.                                                             

We have a sales and marketing infrastructure with a broad portfolio of  
products, with our own direct marketing capability in the US, Canada, the UK,   
the Republic of Ireland, France, Germany, Italy and Spain and with plans to add 
Japan by 2004. We also cover other significant pharmaceutical markets indirectly
through distributors and sales coverage continues to grow.                      

BIOCHEM PHARMA INC.                                                             

275 Armand-Frappier Blvd.                                                       

Laval, Quebec                                                                   

Canada H7V 4A7                                                                  

Telephone: (450) 978-7899                                                       

 BioChem is an international specialty pharmaceutical company dedicated to
the development and commercialization of innovative products for the prevention 
and treatment of human diseases, with a focus on infectious diseases and cancer.
BioChem's first therapeutic product, 3TC/Epivir, has become the cornerstone of  
HIV infection/AIDS combination therapies, most recently being launched as part  
of GlaxoSmithKline's Trizivir triple combination product. A second therapeutic  
product, Zeffix, an oral treatment for chronic hepatitis B, is currently being  
introduced in key markets worldwide by GlaxoSmithKline, BioChem's partner for   
the development and commercialization of both 3TC/Epivir and Zeffix.            

THE MERGER AND THE MERGER AGREEMENT 

   The merger agreement provides for the combination of Shire and BioChem in a
transaction in which each BioChem shareholder (other than BioChem shareholders  
who properly                                                                    

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dissent to the merger) will have the choice of receiving as consideration for   
each share of BioChem:                                                          

- a number of ordinary shares equal to the exchange ratio;                      
- a number of exchangeable shares equal to the exchange ratio divided by three  
  issued by Exchangeco which are exchangeable into ordinary shares or ADSs, at a
rate of one exchangeable share for three ordinary shares or one exchangeable
share for one ADS;                                                          

- a number of ADSs equal to the exchange ratio divided by three; or             

- a combination of the above.                                                   

Only shareholders of BioChem that are Canadian residents have the option of     
receiving exchangeable shares for their shares of BioChem.                      

The exchangeable shares will be issued by Exchangeco, a corporation     
incorporated under the CANADA BUSINESS CORPORATIONS ACT, which is a wholly-owned
subsidiary of Shire, and will be listed on the Toronto Stock Exchange. Holders  
of the exchangeable shares will be entitled to dividend and other rights that   
are, as nearly as practicable, economically equivalent to those of ordinary     
shares. Through a voting trust and by means of special voting shares in Shire   
held by the trustee, holders of the exchangeable shares will, in effect, be     
entitled to vote at general meetings of Shire. See "The Merger                  
Agreement--Conversion of BioChem Shares."                                       

EXCHANGE RATIO                                                                  

The number of ordinary shares into which each share of BioChem shall be 
converted shall be determined as follows:                                       

                                                                [Download Table]

IF THE ADS PRICE IS:   THE EXCHANGE RATIO SHALL BE:
---------------------  ----------------------------
                                                   
less than or equal to  2.3517                      
$47.20                                             

greater than $47.20    determined by dividing      
and less than $70.80   $37.00 by the ADS price and 
                       multiplying by three        

equal to or greater    1.5678                      
than $70.80                                        

If a BioChem shareholder elects, or in certain circumstances, we will provide   
such shareholder with one-third of an ADS or one-third of an exchangeable share 
for each ordinary share such shareholder would be entitled to receive based on  
the exchange ratio. See "The Merger Agreement--Exchange Ratio."                 

THE EXCHANGEABLE SHARES                                                         

    The exchangeable shares will be securities of Exchangeco that are, as nearly
as practicable, economically equivalent to ordinary shares. The holders of      
exchangeable shares will have the following rights:                             

- the right to exchange their shares for ordinary shares on a one-for-three     
basis as discussed in the following paragraph;                              

- the right to exchange their shares for the ADSs on a one-for-one basis as     
discussed in the following paragraph;                                       

- the right to receive dividends, on a per share basis, in amounts (or property 
 in the case of non-cash dividends) which are three times more than, and which
are payable at the same time as, dividends declared on the ordinary shares; 

- the right, in effect, to vote at all shareholder meetings at which Shire      
shareholders are entitled to vote by means of the special voting shares     
referred to above; and                                                      

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- the right to participate, upon a liquidation event of Shire, on a pro rata    
basis with the holders of ordinary shares in the distribution of assets of  
Shire, through the automatic exchange of exchangeable shares for ordinary   
shares.                                                                     

   Holders of the exchangeable shares will be entitled, generally, at any time
following the effective time, upon delivery of a certificate representing       
exchangeable shares and a duly executed notice of retraction, to require        
Exchangeco to redeem any or all of their exchangeable shares for ordinary shares
or ADSs (at the option of the holder).                                          

    The exchangeable shares will, in effect, have no separate economic or voting
rights in Exchangeco, except as required by law or contract.                    

    Subject to applicable law and a right of redemption, on the redemption date,
all of the outstanding exchangeable shares will be redeemed by Exchangeco or    
otherwise acquired by an affiliate of Shire for a price payable in ordinary     
shares or ADSs (at the option of the holder).                                   

The redemption date will be no earlier than the 10th anniversary of the 
effective date. However, in certain circumstances, Exchangeco has the right to  
require a redemption of the exchangeable shares prior to the 10th anniversary of
the effective date. An early redemption may occur upon:                         

- there being fewer than 3,000,000 exchangeable shares outstanding (other than  
exchangeable shares held by Shire and its affiliates);                      

- the occurrence of a merger, amalgamation, tender offer, sale or other similar 
transaction involving Shire; or                                             

- the occurrence of certain events which entitle the holders of exchangeable    
shares to vote as shareholders of Exchangeco.                               

THE EXTRAORDINARY GENERAL MEETING 

DATE, TIME, PLACE AND PURPOSE                                                   

   The meeting will be held at 35 New Broad Street, London, EC2M 1SQ, England,
on   -  , 2001, at 3:00 p.m., local time, to consider and vote on the merger    
proposal and a special resolution, which is unrelated to the merger, regarding  
an increase in our directors' power to allot securities for cash free of        
pre-emption rights. See "The Extraordinary General Meeting--Date, Time, Place   
and Purpose."                                                                   

RECORD DATE; SHARES ENTITLED TO VOTE                                            

Only shareholders of record at the close of business on   -  , 2001 are 
entitled to vote at the meeting. On that date, there were [  -  ] shares        
outstanding and entitled to vote which were held by approximately [  -  ]       
holders of record, of which [  -  ] were held in the name of Guarantee Nominees 
Limited, as nominee for the Depositary. Each registered holder of ordinary      
shares present in person at the meeting is entitled to one vote on a show of    
hands, and every holder present in person or by proxy shall, upon a poll, have  
one vote for each ordinary share held by the holder. See "The Extraordinary     
General Meeting--Record Date; Voting Rights; Voting at the Meeting."            

REQUIRED VOTE                                                                   

A quorum for the extraordinary general meeting will exist if two or more
Shire shareholders are present in person or by proxy and entitled to vote. If   
there is a quorum, a majority of the votes cast at the extraordinary general    
meeting must be cast in favor of the ordinary resolution put to the meeting for 
the merger to be approved. Voters who hold ordinary shares as nominees will not 
have discretionary authority to vote their ordinary shares in the absence of    
instructions from their beneficial owners.                                      

REVOCABILITY OF PROXIES                                                         

Before the vote at the extraordinary general meeting, a shareholder may 
revoke his or her proxy by depositing at our registered office, not less than   
48 hours before the time of the extraordinary general meeting, a later-dated    
proxy relating to the same shares or by depositing at the registered office a   
written notice of revocation bearing a date later than the date of the proxy or 
by attending the                                                                

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extraordinary general meeting and voting in person.                             

BENEFITS OF THE MERGER                                                          

The principal benefits of the merger are expected to be:                

- DIVERSIFICATION. The revenue growth of the combined Shire and BioChem entity  
(the "Enlarged Group") will be driven not only by Shire's key marketed      
products, Adderall, Pentasa, Agrylin and Carbatrol, and by BioChem's Second 
Look and Fluviral, but also by the sales achieved by two of the world's     
  foremost pharmaceutical companies in GlaxoSmithKline in respect of 3TC/Epivir,
 Combivir, Trizivir and Zeffix, and Johnson and Johnson in respect of Reminyl.
 In addition, the Enlarged Group expects Foznol to become a key contributor to
revenue growth when regulatory approvals, which are expected in early 2002, 
are obtained.                                                               

- INCREASED FINANCIAL RESOURCES. At December 31, 2000, Shire had indebtedness of
approximately $  -  and cash and investments of approximately $  -  while   
BioChem had indebtedness of approximately $  -  and approximately $  -  in  
cash and investments. With pro forma revenues of $  -  and net income of    
$  -  for 2000 the directors and proposed directors expect to have greatly  
enhanced cash with which to finance the Enlarged Group's development and    
research activities. Shire will be required to either obtain consent to the 
merger from its bank lenders under the credit facility entered into at the  
time of Shire's merger with Roberts Pharmaceutical Corporation in 1999 or   
repay the amount outstanding under the credit facility. Shire has not yet   
determined whether to seek consent or repay the amount outstanding.         

For purposes of this document, financial information on BioChem has been  
adjusted to consolidate CliniChem and exclude exceptional items.          

- A BROADENED AND STRENGTHENED PIPELINE. The Enlarged Group will have 24        
products in development of which 12 will be in pre-clinical and Phase I     
  development, and 12 will be in full clinical development or registration. This
 will strengthen the product pipeline in the areas of oncology/haematology and
  CNS with a total of 15 products in development in these areas and will broaden
 the pipeline of products in development by the inclusion of 5 products in the
areas of anti-virals and vaccines.                                          

- LEVERAGE FROM COMPLEMENTARY SKILLS AND OPERATIONS. The Enlarged Group will    
 have a direct marketing capability in seven of the eight major pharmaceutical
 markets in the world. The Enlarged Group will benefit from the application of
existing development capabilities to the enlarged product pipeline and the  
direct marketing of these products through its own specialist sales forces. 
The directors and proposed directors expect the Enlarged Group's lead       
optimisation activities and network of business and academic relations to   
 provide a regular source of development candidates to supplement its research
activities.                                                                 

- OPERATING SYNERGIES. The directors and proposed directors of Shire believe    
that the merger will result in certain operating synergies in the following 
areas:                                                                      

- Review of research and development activities: cost savings and future
     cost avoidance are expected to result from: establishment of a budget for
   the Enlarged Group; review of the Enlarged Group's requirements for new
research and development projects; a thorough review of the Enlarged
   Group's research and development portfolio; and the use by the Enlarged
Group of Shire's development capabilities;                          

  - Financing: the Enlarged Group's net cash and ability to generate further
     cash will enable it to discharge its indebtedness to its bank lenders, if
   it chooses, which would result in a net reduction in financing costs of
approximately $3 million in a full year; and                        

- Re-organisation of business activities: the re-organisation of        
administrative, service                                             

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    and other functions of the Canadian operations of the Enlarged Group may
give rise to operating synergies for the Enlarged Group.            

   There will be a substantial one time charge in the [second] quarter of 2001
of between [$  -  ] and [$  -  ] arising from the costs of the merger and in    
connection with the restructuring of the Enlarged Group's combined operations.  
Taking into account the opportunity for synergies referred to above and         
excluding the one time charge, the Shire Board believes the merger will be      
accretive to earnings for Shire shareholders twelve months after the Closing.   

RECOMMENDATION OF THE BOARD OF DIRECTORS                                        

    On December 10, 2000, our board of directors unanimously approved the merger
agreement and the merger as being in our best interests and the best interests  
of our shareholders. Our board of directors, which has received financial advice
from Deutsche Bank, considers that the merger is in our best interests and the  
best interests of our shareholders as a whole. In providing advice to our board 
of directors, Deutsche Bank has placed reliance on our board's commercial       
assessment of the merger.                                                       

   Our board of directors unanimously recommends that our shareholders vote in
favor of the resolutions being proposed at the extraordinary general meeting, as
they intend to do in respect of shareholdings in which they are interested,     
which amount in aggregate to   -  ordinary shares, representing approximately   
-  per cent of the issued share capital.                                    

REASONS FOR THE MERGER                                                          

Our board of directors believes that the merger brings together two     
publicly-traded specialty pharmaceutical companies with complementary strengths,
activities and competencies. We have built effective research and development   
functions, an effective sales and marketing organisation in the US and UK and   
have established and are expanding our functions in Canada and certain leading  
European markets. BioChem has built an outstanding scientific operation through 
which it has generated a pipeline of projects focused in three discrete         
specialty categories: oncology, vaccines and anti-virals.                       

OPINION OF FINANCIAL ADVISOR                                                    

In deciding to approve the merger, our board of directors considered the
opinion of its financial advisor, Deutsche Bank, that the exchange ratio was    
fair to our shareholders from a financial point of view.                        

The full text of the written opinion of Deutsche Bank, which presents   
assumptions made, matters considered, procedures followed and the scope of the  
review undertaken, is attached to this Proxy Statement as Annex D. The written  
opinion of Deutsche Bank is not a recommendation as to how you should vote in   
regard to the approval of the merger. We encourage you to read the opinion of   
Deutsche Bank in its entirety.                                                  

APPRAISAL RIGHTS                                                                

   Under English law, holders of ordinary shares will have no appraisal rights
in connection with the merger.                                                  

ANTICIPATED ACCOUNTING TREATMENT                                                

 The merger is intended to qualify as a "pooling of interests" transaction
under US GAAP, which means that the companies will be treated as if they had    
always been combined.                                                           

CONDITIONS TO THE MERGER                                                        

    The merger will not be completed unless a number of conditions are waived or
satisfied. These include:                                                       

- approval of the merger and other transactions contemplated by the merger      
agreement by the requisite vote of our shareholders and BioChem's           
shareholders;                                                               

- there must be no order, injunction, decree or judgment in effect that         
materially restrains or prohibits the merger and there must be no pending or
 threatened proceeding by a governmental authority questioning the validity or
legality of the merger;                                                     

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- both we and BioChem must receive letters from our respective independent      
accountants concurring with management's view regarding the applicability of
"pooling of interests" accounting under US GAAP; and                        

- the ordinary shares to be issued in the merger must be admitted to the        
Official List of the United Kingdom Listing Authority and to trading on the 
  London Stock Exchange, the ADSs must be approved for listing on Nasdaq and the
exchangeable shares must be approved for listing on The Toronto Stock       
Exchange.                                                                   

EFFECTIVE TIME OF THE MERGER                                                    

 The merger will be completed as soon as practicable after all shareholder
approvals have been obtained and all other conditions to the merger have been   
satisfied or waived and, in any event, not later than May 31, 2001.             

TERMINATION AND PAYMENT OF BREAK FEES                                           

  The merger agreement may be terminated by mutual written consent of us and
BioChem at any time prior to the effective date of the merger. In addition,     
either we or BioChem may terminate the merger agreement if the effective date   
shall not have occurred on or before May 31, 2001 or if certain governmental    
approvals have not been obtained.                                               

  The merger agreement may be terminated by us upon the occurrence of any of
the following events:                                                           

- BioChem's shareholders do not approve the merger;                             

- the board of directors of BioChem fails to recommend approval of the merger to
its shareholders or adversely modifies or qualifies or withdraws its        
recommendation; or                                                          

- a breach by BioChem of any representation, covenant or agreement which results
in a failure of certain conditions to closing set forth in the merger       
agreement (subject to a 20 business day cure period).                       

    The merger agreement may be terminated by BioChem upon the occurrence of any
of the following events:                                                        

- our shareholders do not approve the merger;                                   
- our board of directors fails to recommend approval of the merger to our       
shareholders or adversely modifies or qualifies or withdraws its            
recommendation; or                                                          

- a breach by us or Exchangeco of any representation, warranty, covenant or     
agreement which results in the failure of certain conditions to closing set 
forth in the merger agreement (subject to a 20 business day cure period).   

  BioChem may also terminate the merger agreement, among other things, if it
determines that a proposal to acquire BioChem is more favorable from a financial
point of view to its shareholders than the transaction with Shire. If this      
occurs, BioChem will become obligated to pay us a break fee of $110 million.    
BioChem will also have to pay us this break fee in other circumstances. If      
BioChem terminates the merger agreement because Shire has failed to recommend   
approval of the merger to its shareholders or Shire has adversely modified or   
qualified or withdrawn its recommendation, then Shire will become obligated to  
pay BioChem a break fee of $40 million.                                         

See "The Merger Agreement--Termination and Payment of Break Fees."      

THE OPTION AGREEMENT                                                            

   Concurrently with the execution of the merger agreement, we entered into an
option agreement with BioChem, dated as of December 10, 2000. In accordance with
the terms of the option agreement, BioChem granted us an option to purchase     
shares representing up to 19.9% of the outstanding shares of BioChem as of      
December 8, 2000 (on an undiluted basis) at a price per share in cash equal to  
$37.00 exercisable in the event that we are entitled to a termination fee under 
the merger agreement. In the event the option is exercised, there is a limit as 
to the maximum total compensation that we may receive from the termination fee  
under the merger agreement and                                                  

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any consideration from the sale of BioChem shares acquired from the exercise of 
the option. See "The Option Agreement."                                         

GOVERNMENTAL AND REGULATORY MATTERS                                             

US antitrust laws prohibit the merger from being completed until the    
transaction has been notified to the Antitrust Division of the Department of    
Justice and the Federal Trade Commission and a required waiting period has      
expired. On January 12, 2001 we filed the required notification and report forms
with the Antitrust Division and the FTC. The required waiting period will expire
on February 11, 2001.                                                           

   In the UK, the Secretary of State can refer any qualifying merger situation
to the Competition Commission for investigation as to whether the merger may be 
expected to operate against the public interest. The merger is a qualifying     
merger situation for the purposes of UK law. There is no obligation to obtain   
prior clearance of a qualifying merger in the UK. However, if a qualifying      
merger is completed without prior clearance being given, there is a risk that   
the merger may subsequently be referred to the Competition Commission and that  
divestitures might ultimately be required.                                      

In Canada, the merger is subject to review by the Minister of Industry  
Canada, who must make a determination as to whether the transaction is likely to
be of "net benefit to Canada." We submitted an application for review on        
January 12, 2001. The merger also constitutes a notifiable transaction under the
COMPETITION ACT (Canada).                                                       

We are working to obtain the required regulatory approvals and consents.
However, there can be no assurance as to when or whether any of these approvals 
and consents will be obtained or the terms and conditions that may be imposed by
such approvals and consents. See "The Merger--Governmental Regulation."         

COURT APPROVAL                                                                  

An arrangement under the CANADA BUSINESS CORPORATIONS ACT, such as this 
transaction, requires approval by the Superior Court of Quebec. BioChem will    
obtain an interim order providing for the calling and holding of the meeting of 
the BioChem shareholders and other procedural matters. A hearing to obtain a    
final order of the Superior Court of Quebec approving the arrangement is        
scheduled to take place in the Superior Court of Quebec, the day preceding the  
closing of this arrangement, subject to approval of the merger by the requisite 
vote of our shareholders and BioChem's shareholders. Relying on this court      
order, the issuance of ordinary shares, ADSs and exchangeable shares will be    
exempt and will not require registration under the US Securities Act of 1933.   
See "The Transaction--Court Approval of the Arrangement and Completion of the   
Transaction."                                                                   

SPECIAL RESOLUTION                                                              

At our shareholder's meeting, you will be asked to approve a special    
resolution increasing the directors' power, for a period of 5 years from the    
date of the passing of the resolution, to allot securities within the limits of 
the authorised share capital for cash free of pre-emption rights up to a nominal
amount of [  -  ].                                                              

   Under English law, we would typically ask you to take this action at one of
our future annual general meetings. However, as a matter of convenience, you    
will be asked to take this action at our Shareholder's Meeting. This action does
not relate to the merger.                                                       

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SUMMARY HISTORICAL CONSOLIDATED FINANCIAL DATA OF SHIRE 
SUMMARY FINANCIAL DATA

   The following summary financial information of Shire for each of the fiscal
periods up through and including the year ended December 31, 1999 has been      
derived from Shire's audited consolidated financial statements and the notes to 
these financial statements incorporated by reference into this Proxy Statement. 
Summary financial information for the nine month periods to September 30, 1999  
and 2000 has been derived from Shire's unaudited consolidated financial         
statements for the nine months to September 30, 2000 also incorporated by       
reference into this Proxy Statement.                                            

                                                        [Enlarge/Download Table]

                                                 SIX MONTHS                               
                      YEAR ENDED   YEAR ENDED      ENDED        YEAR ENDED     YEAR ENDED 
                       JUNE 30,     JUNE 30,    DECEMBER 31,   DECEMBER 31,   DECEMBER 31,
                       1996(1)      1997(1)     1997(1)/(2)      1997(1)        1998(1)   
                      ----------   ----------   ------------   ------------   ------------
                         (IN THOUSANDS, EXCEPT PER ORDINARY SHARE AND PER ADS AMOUNTS)    
                                                                                          
INCOME STATEMENT                                                                          
  DATA:                                                                                   
Revenues.............  $143,537    $ 147,842      $112,804       $191,554       $308,984  
Operating (loss)/                                                                         
  income.............   (23,557)    (125,116)       (4,435)       (85,841)        23,236  
(Loss)/income before                                                                      
  income taxes.......   (24,416)    (119,209)       (4,058)       (82,732)        23,563  
Net (loss)/income....   (23,705)    (106,994)       (4,366)       (84,152)        20,572  
Basic net                                                                                 
  (loss)/income per                                                                       
  ordinary share.....     (0.23)       (0.74)        (0.02)         (0.45)          0.09  
Basic net                                                                                 
  (loss)/income per                                                                       
  ADS................     (0.69)       (2.23)        (0.06)         (1.36)          0.26  
Fully diluted net                                                                         
  (loss)/ income per                                                                      
  ordinary share.....     (0.23)       (0.74)        (0.02)         (0.45)          0.08  
Fully diluted net                                                                         
  (loss)/ income per                                                                      
  ADS................     (0.69)       (2.23)        (0.06)         (1.36)          0.25  
Weighted average                                                                          
  ordinary shares                                                                         
outstanding--basic...   102,560      143,786       203,316        185,153        234,045  
Weighted average                                                                          
  ordinary shares                                                                         
  outstanding--fully                                                                      
  diluted............   102,560      143,786       203,316        185,153        242,806  


                                      NINE MONTHS     NINE MONTHS                         
                       YEAR ENDED        ENDED           ENDED                            
                      DECEMBER 31,   SEPTEMBER 30,   SEPTEMBER 30,                        
                          1999          1999(1)          2000                             
                      ------------   -------------   -------------                        
                      (IN THOUSANDS, EXCEPT PER ORDINARY SHARE AND PER ADS AMOUNTS)       
                                                                                          
INCOME STATEMENT                                                                          
  DATA:                                                                                   
Revenues.............   $401,532       $297,143        $380,605                           
Operating (loss)/                                                                         
  income.............    (76,068)        51,588          67,796                           
(Loss)/income before                                                                      
  income taxes.......    (78,936)        49,577          63,610                           
Net (loss)/income....    (94,998)        28,968          38,318                           
Basic net                                                                                 
  (loss)/income per                                                                       
  ordinary share.....      (0.39)          0.12            0.15                           
Basic net                                                                                 
  (loss)/income per                                                                       
  ADS................      (1.16)          0.36            0.46                           
Fully diluted net                                                                         
  (loss)/ income per                                                                      
  ordinary share.....      (0.39)          0.12            0.15                           
Fully diluted net                                                                         
  (loss)/ income per                                                                      
  ADS................      (1.16)          0.35            0.44                           
Weighted average                                                                          
  ordinary shares                                                                         
outstanding--basic...    244,699        241,978         251,191                           
Weighted average                                                                          
  ordinary shares                                                                         
  outstanding--fully                                                                      
  diluted............    244,699        249,506         259,640                           
                                                        [Enlarge/Download Table]

                         AS AT        AS AT        AS AT         AS AT         AS AT          AS AT    
                        JUNE 30,     JUNE 30,   DECEMBER 31,  DECEMBER 31,  DECEMBER 31,  SEPTEMBER 30,
                        1996(1)      1997(1)      1997(1)       1998(1)         1999         1999(1)   
                       ----------   ----------  ------------  ------------  ------------  -------------
                                                                                                       
BALANCE SHEET DATA:                                                                                    
Cash and cash                                                                                          
  equivalents........   $ 54,552    $ 110,099     $ 59,917      $ 52,973      $ 54,082      $ 36,603   
Other current                                                                                          
  assets.............     71,417       84,297      123,871       193,325       197,224       248,404   
Long term assets.....    251,803      238,995      482,498       627,307       636,457       658,313   
Total assets.........    377,772      433,391      666,286       873,605       887,763       943,320   
Current                                                                                                
  liabilities........     74,809       54,805       70,542        81,288       172,820       104,061   
Long term debt,                                                                                        
  including capital                                                                                    
  lease                                                                                                
  obligations........     11,377        7,630       25,636       126,774       126,314       125,188   
Other long term                                                                                        
  liabilities........     11,104        3,412        3,492         2,229         1,345         2,282   
Shareholders'                                                                                          
  equity.............    280,482      367,544      566,616       663,314       587,284       711,789   
Total liabilities and                                                                                  
  shareholders'                                                                                        
  equity.............    377,772      433,391      666,286       873,605       887,763       943,320   


                           AS AT                                                                       
                       SEPTEMBER 30,                                                                   
                           2000                                                                        
                       -------------                                                                   
                                                                                                       
BALANCE SHEET DATA:                                                                                    
Cash and cash                                                                                          
  equivalents........    $160,524                                                                      
Other current                                                                                          
  assets.............     159,674                                                                      
Long term assets.....     596,086                                                                      
Total assets.........     916,284                                                                      
Current                                                                                                
  liabilities........     108,315                                                                      
Long term debt,                                                                                        
  including capital                                                                                    
  lease                                                                                                
  obligations........     126,413                                                                      
Other long term                                                                                        
  liabilities........         422                                                                      
Shareholders'                                                                                          
  equity.............     681,134                                                                      
Total liabilities and                                                                                  
  shareholders'                                                                                        
  equity.............     916,284                                                                      

NOTES                                                                           

1.  The results for the years ended June 30, 1996 and 1997, the six months ended
  December 31, 1997, the years ended December 31, 1997 and 1998 and the nine
   month period ended September 30, 1999 and the financial position as at June
 30, 1996 and 1997, December 31, 1997 and 1998 and September 30, 1999 have
  been restated to include the results of Roberts Pharmaceutical Corporation
the merger with whom was accounted for as a pooling of interests in     
accordance with APB16, Accounting for Business Combinations.            

2.  During 1997, Shire changed its fiscal year end from June 30, to December 31.

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SUMMARY HISTORICAL CONSOLIDATED FINANCIAL DATA OF BIOCHEM 
SUMMARY FINANCIAL DATA

The following summary financial information of BioChem for each of the  
fiscal periods up through and including the year ended December 31, 1999 has    
been derived from BioChem's audited consolidated financial statements and the   
notes to such financial statements incorporated by reference into this Proxy    
Statement. Summary financial information for the nine month period to September 
30, 1999 and 2000 has been derived from BioChem's unaudited consolidated        
financial statements. The selected financial data has been prepared using       
Canadian and U.S. GAAP, which differ in certain respects. The principal         
differences between Canadian GAAP and U.S. GAAP are summarized in note 22 to    
BioChem's 1999 audited consolidated financial statements incorporated by        
reference into this Proxy Statement.                                            

                                                        [Enlarge/Download Table]


                                      YEAR ENDED     YEAR ENDED     YEAR ENDED     YEAR ENDED     YEAR ENDED 
                                     DECEMBER 31,   DECEMBER 31,   DECEMBER 31,   DECEMBER 31,   DECEMBER 31,
                                         1995           1996           1997           1998           1999    
                                     ------------   ------------   ------------   ------------   ------------
                                         (IN THOUSANDS OF CANADIAN DOLLARS EXCEPT PER SHARE INFORMATION)     
                                                                                                             
INCOME STATEMENT DATA:                                                                                       

CANADIAN GAAP                                                                                                
Revenues............................    29,007         89,735        162,860        224,965        290,275   
Earnings/(loss) from continuing                                                                              
  operations........................   (12,269)        27,722         77,680        117,898        167,199   
Net income/(loss)...................    (4,967)        33,394         79,838        114,774        149,102   
Basic earnings/(loss) per common                                                                             
  share(1)                                                                                                   
--continuing operations.............     (0.13)          0.26           0.72           1.09           1.59   
--net income........................     (0.05)          0.31           0.74           1.06           1.42   
Fully diluted earnings/(loss) per                                                                            
  common share(1)                                                                                            
--continuing operations.............     (0.13)          0.26           0.72           1.09           1.57   
--net income........................     (0.05)          0.31           0.74           1.06           1.41   
Weighted average number of common                                                                            
  shares outstanding                                                                                         
--basic.............................    97,044        106,485        108,153        108,443        105,313   
--fully diluted.....................   102,467        110,709        114,229        115,174        111,945   
                                         (IN THOUSANDS OF CANADIAN DOLLARS EXCEPT PER SHARE INFORMATION)     
U.S. GAAP                                                                                                    
Revenues............................                                 148,277        209,934        275,921   
Earnings/(loss) from continuing                                                                              
  operations........................                                  77,680         (8,299)       156,763   
Net income/(loss)...................                                  77,173        (10,063)       139,013   
Basic earnings/(loss) per common                                                                             
  share (1)                                                                                                  
--continuing operations.............                                    0.72          (0.08)          1.49   
--net income........................                                    0.71          (0.09)          1.32   
Fully diluted earnings/(loss) per                                                                            
  common share (1)                                                                                           
--continuing operations.............                                    0.71          (0.08)          1.49   
--net income........................                                    0.70          (0.09)          1.32   
Weighted average number of common                                                                            
  shares outstanding                                                                                         
--basic.............................                                 108,153        108,443        105,313   
--fully diluted.....................                                 109,815        110,447        106,974   


                                      NINE MONTHS     NINE MONTHS                                            
                                         ENDED           ENDED                                               
                                     SEPTEMBER 30,   SEPTEMBER 30,                                           
                                         1999            2000                                                
                                     -------------   -------------                                           
                                     (IN THOUSANDS OF CANADIAN DOLLARS EXCEPT PER SHARE INFORMATION)         
                                                                                                             
INCOME STATEMENT DATA:                                                                                       
CANADIAN GAAP                                                                                                
Revenues............................    201,764         230,728                                              
Earnings/(loss) from continuing                                                                              
  operations........................     99,054         254,454                                              
Net income/(loss)...................     97,957         254,454                                              
Basic earnings/(loss) per common                                                                             
  share(1)                                                                                                   
--continuing operations.............       0.93            2.51                                              
--net income........................       0.92            2.51                                              
Fully diluted earnings/(loss) per                                                                            
  common share(1)                                                                                            
--continuing operations.............       0.93            2.43                                              
--net income........................       0.92            2.43                                              
Weighted average number of common                                                                            
  shares outstanding                                                                                         
--basic.............................    106,746         101,199                                              
--fully diluted.....................    113,373         107,946                                              
                                       (IN THOUSANDS OF CANADIAN                                             
                                       DOLLARS EXCEPT PER SHARE                                              
                                             INFORMATION)                                                    
U.S. GAAP                                                                                                    
Revenues............................    192,667         208,824                                              
Earnings/(loss) from continuing                                                                              
  operations........................     89,229         255,330                                              
Net income/(loss)...................     88,493         255,330                                              
Basic earnings/(loss) per common                                                                             
  share (1)                                                                                                  
--continuing operations.............       0.84            2.52                                              
--net income........................       0.83            2.52                                              
Fully diluted earnings/(loss) per                                                                            
  common share (1)                                                                                           
--continuing operations.............       0.82            2.48                                              
--net income........................       0.82            2.48                                              
Weighted average number of common                                                                            
  shares outstanding                                                                                         
--basic.............................    106,746         101,199                                              
--fully diluted.....................    108,450         102,868                                              
                                                        [Enlarge/Download Table]

                                  AS AT          AS AT          AS AT          AS AT    
                               DECEMBER 31,   DECEMBER 31,   DECEMBER 31,   DECEMBER 31,
                                   1995           1996           1997           1998    
                               ------------   ------------   ------------   ------------
                                          (IN THOUSANDS OF CANADIAN DOLLARS)            
                                                                                        
BALANCE SHEET DATA:                                                                     

CANADIAN GAAP                                                                           
Total assets..................    286,922        573,191        659,191        632,562  
Long term debt excluding                                                                
  current portion.............     11,021         14,282         11,914         12,470  
Shareholders' equity..........    134,594        415,832        498,068        478,621  
                                          (IN THOUSANDS OF CANADIAN DOLLARS)            
U.S. GAAP                                                                               
Total assets..................                                  655,565        627,428  
Long term debt excluding                                                                
  current portion.............                                   11,914         12,470  
Shareholders' equity..........                                  494,367        473,487  


                                  AS AT           AS AT           AS AT                 
                               DECEMBER 31,   SEPTEMBER 30,   SEPTEMBER 30,             
                                   1999           1999            2000                  
                               ------------   -------------   -------------             
                                    (IN THOUSANDS OF CANADIAN DOLLARS)                  
                                                                                        
BALANCE SHEET DATA:                                                                     
CANADIAN GAAP                                                                           
Total assets..................    624,717        571,542         811,610                
Long term debt excluding                                                                
  current portion.............    124,614        126,542           8,550                
Shareholders' equity..........    376,864        330,639         637,144                
                                    (IN THOUSANDS OF CANADIAN DOLLARS)                  
U.S. GAAP                                                                               
Total assets..................    612,196        563,874         801,923                
Long term debt excluding                                                                
  current portion.............    124,614        126,542           8,550                
Shareholders' equity..........    364,343        322,971         627,457                

NOTES                                                                           

1.  The data stated above reflects a two-for-one common stock split which took  
effect on April 7, 1997.                                                

2.  No cash dividends were declared during these periods.                       

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SUMMARY UNAUDITED PRO FORMA COMBINED FINANCIAL DATA 

   The following unaudited pro forma combined financial statements give effect
to the proposed merger of Shire and 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 into this Proxy Statement by       
reference. 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.                                                

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UNAUDITED PRO FORMA COMBINED CONDENSED INCOME STATEMENT 
NINE MONTHS ENDED SEPTEMBER 30, 2000

                                                        [Enlarge/Download Table]

                                     SHIRE                                 BIOCHEM                                             
                                   ----------  ----------------------------------------------------------------  SHIRE BIOCHEM 
                                                                                        ACCOUNTING                 PRO FORMA   
                                                 CANADIAN     CANADIAN    U.S. GAAP       POLICY                 --------------
                                   U.S. GAAP       GAAP         GAAP     ADJUSTMENTS    ALIGNMENTS   U.S. 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                                                                                               
  to significant influence.......         --       (2,155)         --           --            --           --             --   
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   

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UNAUDITED PRO FORMA COMBINED CONDENSED INCOME STATEMENT 
YEAR ENDED DECEMBER 31, 1999

                                                        [Enlarge/Download Table]

                                     SHIRE                                 BIOCHEM                                             
                                   ----------  ----------------------------------------------------------------  SHIRE BIOCHEM 
                                                                                        ACCOUNTING                 PRO FORMA   
                                                 CANADIAN     CANADIAN    U.S. GAAP       POLICY                 --------------
                                   U.S. GAAP       GAAP         GAAP     ADJUSTMENTS    ALIGNMENTS   U.S. 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                                                                                                    
  taxes..........................    (78,936)     179,290     118,801       (7,024)      (46,431)      65,346        (13,590)  
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   

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UNAUDITED PRO FORMA COMBINED CONDENSED INCOME STATEMENT 
YEAR ENDED DECEMBER 31, 1998

                                                        [Enlarge/Download Table]

                                     SHIRE                                BIOCHEM                                             
                                   ---------  ----------------------------------------------------------------  SHIRE BIOCHEM 
                                                                                        ACCOUNTING                PRO FORMA   
                                     U.S.       CANADIAN     CANADIAN     U.S. GAAP       POLICY       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                                                                                                   
  taxes..........................    23,563      125,949       84,617      (85,090)      (11,899)     (12,372)       11,191   
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   

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UNAUDITED PRO FORMA COMBINED CONDENSED INCOME STATEMENT 
YEAR ENDED DECEMBER 31, 1997

                                                        [Enlarge/Download Table]

                                                                                                           SHIRE BIOCHEM 
                                SHIRE                                BIOCHEM                                 PRO FORMA   
                              ---------  ----------------------------------------------------------------  --------------
                                                                                   ACCOUNTING                            
                                U.S.       CANADIAN     CANADIAN     U.S. GAAP       POLICY       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                                                                                              
  taxes.....................   (82,732)      86,478       57,775           --            --       57,775       (24,957)  
Income taxes................    (1,420)      (4,000)      (1,660)          --            --       (1,660)       (3,080)  
Non-controlling interest....        --        1,797           --           --            --           --            --   
Share of loss of company                                                                                                 
  subject to significant                                                                                                 
  influence.................        --       (6,595)          --           --            --           --            --   
Net income/(loss) from                                                                                                   
  continuing operations.....   (84,152)      77,680       56,115           --            --       56,115       (28,037)  
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   

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UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
AS AT SEPTEMBER 30, 2000

                                                        [Enlarge/Download Table]

                                                                                                             SHIRE BIOCHEM 
                                        SHIRE                             BIOCHEM                              PRO FORMA   
                                      ----------                        -----------  ACCOUNTING              --------------
                                                  CANADIAN   CANADIAN    U.S. GAAP     POLICY                              
                                      U.S. GAAP     GAAP       GAAP     ADJUSTMENTS  ALIGNMENTS  U.S. GAAP     U.S. GAAP   
                                        $'000     CAN$'000     $'000     $'000 (5)   $'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,                                                                                             
  net...............................    28,649     151,526     82,171     (2,706)          --      79,465        108,114   
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                                                                                           
  debt..............................     1,412     120,624     80,042         --           --      80,042         81,454   
Accounts payable and accrued                                                                                               
  expenses..........................    77,828      45,292     30,091         --        3,792      33,883        111,711   
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 shareholders'                                                                                        
  equity............................   916,284     811,610    537,860     (6,428)       9,710     541,142      1,457,426   

------------------------------                                                  

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 this Proxy Statement.        

2.  The Canadian GAAP condensed financial information presented in thousands of 
Canadian dollars has been translated to U.S. dollars in the following   
manner:                                                                 

 - Assets and liabilities have been translated using exchange rates at the
end of each reporting period.                                       

- Revenues and expenses were translated at the average exchange rates   
prevailing during the period.                                       

   - Share capital balances have been translated at historical rates in effect
at the time the capital transactions occurred.                      

- Cumulative translation gains and losses are reported as a separate    
component of shareholders' equity.                                  

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 All translations were calculated using the following weighted average and
period end exchange rates:                                                      

                                                        [Enlarge/Download Table]

                                                                                       NINE MONTHS ENDED
                                 YEAR ENDED         YEAR ENDED         YEAR ENDED        SEPTEMBER 30,  
U.S. DOLLARS PER C$1.00       DECEMBER 31, 1997  DECEMBER 31, 1998  DECEMBER 31, 1999        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:                                                         

                                                        [Enlarge/Download Table]

                                                                                                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      
                                       -----------------  -----------------  -----------------  -----------------
                                                                                                                 
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. 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                                                       

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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.                      

                                                        [Enlarge/Download Table]

                                                                                              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:                                                                     

                                                        [Enlarge/Download Table]

                                                                                          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)

                                                        [Enlarge/Download Table]

                                                             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    

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.                      

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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 $[  ] 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.             

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COMPARATIVE PER SHARE DATA

    The following table presents certain historical per share data for Shire and
BioChem and unaudited pro forma and equivalent pro forma combined per share data
to reflect the consummation of the merger based upon the historical financial   
results of Shire and BioChem presented under U.S. GAAP and the conversion of    
each BioChem share into 0.6271 ADSs (the exchange ratio as of December 11, 2000 
divided by three). The pro forma data are not necessarily indicative of actual  
or future operating results or of the financial position that would have        
occurred or will occur upon consummation of the merger. The data presented below
should be read in conjunction with the separate historical consolidated         
financial statements of Shire and BioChem which are incorporated into this Proxy
Statement by reference.                                                         

                                                        [Enlarge/Download Table]

                                                        NINE MONTHS ENDED SEPTEMBER 30, 2000            
                                             -----------------------------------------------------------
                                               SHIRE         BIOCHEM      PRO FORMA   BIOCHEM EQUIVALENT
                                             HISTORICAL   HISTORICAL(1)   COMBINED       PRO FORMA(2)   
                                             ----------   -------------   ---------   ------------------
                                                                                                        
Basic earnings per ordinary share...........    $0.15         $1.44         $0.42           $0.79       
Diluted earnings per ordinary share.........     0.15          1.42          0.41            0.77       
Basic earnings per ADS......................     0.46            --          1.25            2.36       
Diluted earnings per ADS....................     0.44            --          1.22            2.30       
Book value per ordinary share(3)............     2.67          4.16          2.47            4.65       
Book value per ADS..........................     8.00            --          7.42           13.95       

                                                        [Enlarge/Download Table]

                                                           YEAR ENDED DECEMBER 31, 1999                
                                            -----------------------------------------------------------
                                              SHIRE         BIOCHEM      PRO FORMA   BIOCHEM EQUIVALENT
                                            HISTORICAL   HISTORICAL(1)   COMBINED       PRO FORMA(2)   
                                            ----------   -------------   ---------   ------------------
                                                                                                       
Basic earnings per ordinary share..........   $(0.39)        $0.57        $(0.08)          $(0.15)     
Diluted earnings per ordinary share........    (0.39)         0.56         (0.08)           (0.15)     
Basic earnings per ADS.....................    (1.16)           --         (0.24)           (0.45)     
Diluted earnings per ADS...................    (1.16)           --         (0.24)           (0.45)     
Book value per ordinary share(3)...........     2.40          2.50          1.93             3.63      
Book value per ADS.........................     7.21            --          5.79            10.90      

                                                        [Enlarge/Download Table]

                                                            YEAR ENDED DECEMBER 31, 1998                
                                             -----------------------------------------------------------
                                               SHIRE         BIOCHEM      PRO FORMA   BIOCHEM EQUIVALENT
                                             HISTORICAL   HISTORICAL(1)   COMBINED       PRO FORMA(2)   
                                             ----------   -------------   ---------   ------------------
                                                                                                        
Basic earnings per ordinary share...........    $0.09         $(0.16)       $0.01           $0.01       
Diluted earnings per ordinary share.........     0.08          (0.16)        0.01            0.01       
Basic earnings per ADS......................     0.26             --         0.02            0.04       
Diluted earnings per ADS....................     0.25             --         0.02            0.04       

                                                        [Enlarge/Download Table]

                                                            YEAR ENDED DECEMBER 31, 1997                
                                             -----------------------------------------------------------
                                               SHIRE         BIOCHEM      PRO FORMA   BIOCHEM EQUIVALENT
                                             HISTORICAL   HISTORICAL(1)   COMBINED       PRO FORMA(2)   
                                             ----------   -------------   ---------   ------------------
                                                                                                        
Basic earnings per ordinary share...........   $(0.45)        $0.52        $(0.07)          $(0.14)     
Diluted earnings per ordinary share.........    (0.45)         0.51         (0.07)           (0.13)     
Basic earnings per ADS......................    (1.36)           --         (0.22)           (0.41)     
Diluted earnings per ADS....................    (1.36)           --         (0.21)           (0.40)     

NOTES                                                                           

1.  The comparative per share data for BioChem is extracted from the unaudited  
  pro forma combined condensed income statements. Per ADS information is not
applicable to the BioChem historical financial information.             

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2.  The equivalent pro forma per share amounts were calculated by multiplying   
pro forma income per share and pro forma book value per share by the    
exchange ratio of 1.8814, the median exchange ratio that can be used to 
enact the merger.                                                       

 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.

3.  The book value per share calculation represents the amount of shareholders' 
equity, stated based on U.S. GAAP, divided by the number of shares      
outstanding at each period end.                                         

  The number of shares assumed to be outstanding, on a pro forma basis using
the exchange ratio of 1.8814, at each period end are as follows:        

                                                                [Download Table]
                                  
At September 30, 2000  446,121,256
At September 30, 1999  434,537,019
At December 31, 1999   434,569,755

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MARKET PRICE INFORMATION                                                        

 Shire ADSs are listed and traded on Nasdaq under the symbol "SHPGY". Each
ADS represents three ordinary shares. Shire ordinary shares are admitted to the 
official list of the United Kingdom Listing Authority and traded on the London  
Stock Exchange under the symbol "SHP.L". BioChem ordinary shares are traded on  
Nasdaq under the symbol "BCHE" and on the TSE under the symbol "BCH". The       
following table presents the per share closing market prices for Shire ADSs on  
Nasdaq, the closing mid-market quotation for Shire ordinary shares as quoted in 
the Daily Official List of the LSE and the closing mid-market prices for BioChem
ordinary shares on Nasdaq and the TSE, for the periods indicated.               

                                                        [Enlarge/Download Table]

                                               SHIRE     SHIRE    BIOCHEM   BIOCHEM   BIOCHEM   BIOCHEM 
                           SHIRE     SHIRE    ORDINARY  ORDINARY  ORDINARY  ORDINARY  ORDINARY  ORDINARY
                            ADSS      ADSS     SHARES    SHARES    SHARES    SHARES    SHARES    SHARES 
                            US$       US$        L         L        US$       US$       CAN$      CAN$  
                            LOW       HIGH      LOW       HIGH      HIGH      LOW       HIGH      LOW   
                          --------  --------  --------  --------  --------  --------  --------  --------
                                                                                                        
2000                                                                                                    
4th Quarter..............  42.06     65.00      9.53     14.92     32.13     22.38     48.15     33.85  
3rd Quarter..............  51.38     60.63     11.35     13.69     24.75     19.75     36.75     29.30  
2nd Quarter..............  33.19     59.75      7.37     12.40     25.25     21.63     37.10     31.30  
1st Quarter..............  28.31     67.19      5.98     14.28     34.63     21.13     49.50     30.65  

1999                                                                                                    
4th Quarter..............  27.44     35.06      5.59      7.34     25.75     19.63     37.85     29.05  
3rd Quarter..............  23.75     29.31      5.01      6.13     26.88     19.56     39.50     29.25  
2nd Quarter..............  18.88     26.00      3.96      5.28     23.00     17.88     34.30     27.10  
1st Quarter..............  19.13     25.50      3.74      5.17     29.25     20.00     44.80     30.15  

1998                                                                                                    
4th Quarter..............  18.63     22.50      3.46      4.35     28.63     17.44     44.10     26.60  
3rd Quarter..............  16.56     27.81      2.94      5.41     26.94     15.31     40.00     24.10  
2nd Quarter..............  19.00     23.00      3.80      4.44     27.00     23.25     39.90     33.40  
1st Quarter..............  20.00     21.44      2.87      4.10     24.36     17.59     35.05     25.10  

    On December 8, 2000, the last trading date before public announcement of the
execution of the merger agreement, the closing price per Shire ADS was $51 9/16 
and the closing mid-market quotation per Shire ordinary share was L12.29. The   
closing price per BioChem ordinary share was $26 1/2 and CAN$40.00. On January  
[  ], such per share prices were [  ], [  ] and [  ] [  ].                      

   On [  ], there were approximately [  ] issued and outstanding ADSs and [  ]
ordinary shares in issue, including ordinary shares underlying ADSs. On that    
date, approximately [  ]% of the ADSs were held in the US by [  ] record        
holders, one of which is The Depository Trust Company. On [  ], there were      
approximately [  ] issued and outstanding shares of BioChem common stock, of    
which [  ]% were held in the US by [  ] record holders.                         

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SHAREHOLDERS ENTITLED TO VOTE AND SHARES OUTSTANDING

   Only shareholders of record at the close of business on [      ], 2001 will
be entitled to vote at the meeting. On that date there were       ordinary      
shares of the Company, nominal value 5p each, outstanding and entitled to vote  
at the Extraordinary General Meeting, of which [      ] were held in the name of
Guarantee Nominees Limited, as nominee for Morgan Guaranty Trust Company of New 
York as depositary (the "Depositary"), which issues Company sponsored American  
Depositary Receipts ("ADRs") evidencing American Depositary Shares ("ADSs")     
which, in turn, each represent three ordinary shares.                           

  Each registered holder of ordinary shares present in person at the meeting
is entitled to one vote on a show of hands, and every holder present in person  
or by proxy shall, upon a poll, have one vote for each ordinary share held by   
such holder. In the event that the proxy card is executed but does not indicate 
by marking a vote "FOR," "AGAINST" or "ABSTAIN" the proxy may vote or abstain at
his discretion.                                                                 

A member entitled to attend and vote may appoint one or more proxies to 
attend and, on a poll, vote instead of him. A proxy need not also be a member.  
The appointment of a proxy will not preclude a Shire shareholder from attending 
and voting in person at the meeting if he or she so desires.                    

Proxy voting cards from holders of ordinary shares must be received by  
Shire's registrar, Lloyds TSB Registrars, The Causeway, Worthing, West Sussex,  
BN99 3UH, not later than       on       , 2001 (or not less than forty-eight    
hours before any adjournment of the meeting.)                                   

A deposit agreement exists between Morgan Guaranty Trust Company and the
holders of ADRs pursuant to which holders of ADRs are entitled to instruct the  
depositary as to the exercise of voting rights pertaining to the ordinary shares
so represented. The depositary has agreed it will endeavor, insofar as          
practicable, to vote (in person or by delivery to Shire of a proxy) the ordinary
shares registered in its name in accordance with the instructions of the ADR    
holders. Instructions from the ADR holders should be sent to the depositary so  
that the instructions are received by no later than the close of business on    
,       , 2001.                                                     

 Any holder of ADRs giving instructions to the depositary has the power to
revoke the instructions by delivery of notice to the depositary at Morgan       
Guaranty Trust Company of New York, Depositary, P.O. Box 9393, Boston, MA       
02205-9958 at any time so that the depositary receives, by no later than the    
close of business on       ,       , 2001, duly executed instructions bearing a 
later date or time than the date or time of the instructions being revoked.     

Shire will, in future proxy statements, include shareholder proposals   
complying with the applicable rules of the US Securities and Exchange Commission
and any applicable US state laws. In order for a proposal by a shareholder to be
included in the proxy statement relating to the Annual General Meeting of Shire 
to be held in 2001, that proposal must be received in writing by the Secretary  
of the Company at the Company's principal executive office no later than   -  . 

The cost of soliciting proxies in the form enclosed will be borne by the
Company. In addition to the solicitation by mail, proxies may be solicited      
personally, or by telephone, or by employees of the Company. The Company may    
reimburse brokers, custodians, nominees, the depositary and other record holders
of Shire's ordinary shares or ADRs for their expenses in sending proxy material 
to the beneficial owners of such ordinary shares.                               

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RISK FACTORS

YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS IN EVALUATING  
WHETHER TO VOTE FOR OR AGAINST THE APPROVAL OF THE MERGER.                      

RISK FACTORS RELATING TO THE MERGER                                             

   IF WE DO NOT SUCCESSFULLY INTEGRATE OUR OPERATIONS WITH BIOCHEM, THE MERGER
MAY NOT BENEFIT US OR OUR SHAREHOLDERS.                                         

 The combination of Shire and BioChem involves the integration of separate
companies that have previously operated independently. In the event the         
integration is not completed successfully or takes longer than planned, the     
anticipated benefits of the merger may be lost or delayed. We cannot assure you 
that we will be able to integrate the operations of BioChem without encountering
difficulties or experiencing the loss of key employees, customers or suppliers. 
In addition, the operations and management of the two companies must be         
successfully integrated to achieve the potential benefits that were a factor in 
our board's approving the merger.                                               

    YOU WILL SUFFER IMMEDIATE AND SUBSTANTIAL DILUTION OF YOUR PERCENTAGE EQUITY
AND VOTING INTEREST.                                                            

We will issue up to 254,707,924 ordinary shares in connection with the  
merger, depending on the exchange ratio (and assuming all existing BioChem      
shareholders exchange their BioChem shares for ordinary shares pursuant to the  
merger and excluding any shares to be issued pursuant to the exercise of options
under the BioChem Stock Option Plans or other rights). We will also convert     
BioChem options and other rights into options and rights to purchase            
approximately [  -  ] ordinary shares. If we issue the maximum number of        
254,707,924 ordinary shares which may be issued pursuant to the merger, these   
options and rights would represent approximately [  -  ]% of the outstanding    
ordinary shares on a fully-diluted basis as of   -  , 2001. Accordingly, the    
merger will have the effect of substantially reducing the percentage equity and 
voting interest held by each of our shareholders.                               

AT THE TIME YOU MAIL BACK YOUR PROXY, WE MAY NOT KNOW HOW MANY ORDINARY 
SHARES WE WILL BE ISSUING IN THE MERGER.                                        

Under the terms of the merger agreement we may issue up to 254,707,924  
ordinary shares, based on the average trading price of the ADSs for the fifteen 
consecutive trading days ending three days before the date the merger is        
consummated (assuming all existing BioChem shareholders exchange their BioChem  
shares for ordinary shares pursuant to the merger and excluding any shares to be
issued pursuant to the exercise of options under the BioChem Stock Option Plans 
or other rights). This means that if the ADS price drops between the time you   
mail back your proxy and the time the exchange ratio is calculated, the total   
maximum number of ordinary shares we may issue may have increased.              

RISK FACTORS RELATING TO BIOCHEM                                                

BIOCHEM RELIES ON COLLABORATIVE RELATIONSHIPS WITH THIRD PARTIES WHOSE  
INTERESTS MAY DIFFER.                                                 

  BioChem can make no assurances regarding the future results or performance
of its existing or future agreements and collaborations. Additionally, there can
be no assurance that BioChem will be able to negotiate other acceptable         
arrangements in the future or that any existing or future collaborations will be
successful.                                                                     

There can be no assurance that the collaborators' interests are or will 
remain consistent with those of BioChem or that they will succeed in developing 
any new marketable products or obtaining requisite government approvals. Should 
BioChem and its collaborators fail to develop any new marketable products,      
obtain the requisite regulatory approvals or market any of such products        
successfully, BioChem's business, financial condition and results of operations 
may be materially and adversely affected. In addition, BioChem cannot control   
the amount and timing of resources which its collaborators devote to BioChem's  
programs. Certain of these agreements do not prevent the collaborators from     
pursuing alternative technologies that could result in their developing products

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competitive with those products developed under BioChem's collaborative         
agreements. The agreements may be terminated by the collaborators in certain    
circumstances with limited notice, and the collaborators may thereupon acquire  
certain rights to the products under development.                               

BIOCHEM MAY HAVE PROBLEMS MANUFACTURING ITS PRODUCTS.                   

    Except for the BCG therapeutic product, marketed under the trade name PACIS,
and the influenza vaccine Fluviral, BioChem currently has no manufacturing      
facilities for commercial production of any of its therapeutic or vaccine       
products approved or under development. BioChem is relying on GlaxoSmithKline's 
manufacturing capabilities and resources for the manufacture of 3TC and Zeffix  
pursuant to the terms of the agreements entered into with GlaxoSmithKline.      
BioChem believes that GlaxoSmithKline presently has the facilities available to 
manufacture an amount of 3TC and Zeffix to supply sufficient commercial         
quantities of the compound.                                                     

   In the vaccine area, BioChem must continue to develop, adapt or acquire the
facilities, production technology and technical and managerial personnel to     
manufacture products in commercial quantities and in compliance with applicable 
quality assurance and environmental and local government regulations. In the    
therapeutics and CADx areas, BioChem will have to develop or acquire the        
facilities, production technology and technical and managerial personnel to     
manufacture products unless it decides to rely exclusively on third parties for 
the manufacture of its products. Certain products that BioChem is attempting to 
develop have never been manufactured on a commercial scale and there can be no  
assurance that such products can be manufactured by BioChem or any other party  
at a cost or in a quantity to render such products commercially viable.         
Production of such products may require the development of new manufacturing    
technologies and expertise.                                                     

   BIOCHEM'S ONGOING SUCCESS IS DEPENDENT ON MAINTAINING PATENT PROTECTION FOR
ITS PRODUCTS.                                                         

No assurance can be given that patents will issue from any pending      
applications or that claims allowed, now or in the future, under issued patents 
will be sufficiently broad to protect BioChem's technology. In addition, no     
assurance can be given that any patents issued to, or licensed by, BioChem will 
not be challenged, invalidated, infringed or circumvented, or that the rights   
granted thereunder will provide competitive advantages to BioChem. The          
commercial success of BioChem will also depend in part on BioChem not infringing
patents or proprietary rights of others and not breaching the licenses granted  
to BioChem. The degree of patent protection afforded to pharmaceutical or       
biotechnological inventions around the world is uncertain. A number of products 
important to BioChem are subject to this uncertainty. BioChem is aware of       
certain issued patents and patent applications of others, and there may be other
patents and patent applications, containing subject matter which BioChem or its 
licensees or collaborators may require in order to research, develop or         
commercialise certain of BioChem's products. There can be no assurance that     
BioChem will be able to obtain a license to any third-party technology or       
patents that it may require to conduct its business or that such technology or  
patents can be licensed at a reasonable cost. Failure by BioChem or its         
collaborators to obtain a license to any technology or patents that it may need 
to commercialise its technologies or products may result in delays in marketing 
BioChem's proposed products or the inability to proceed with the development,   
manufacture or sale of products requiring such licenses and may have a material 
adverse effect on BioChem.                                                      

Emory University filed oppositions to two of BioChem's granted patent   
applications in Europe which cover oxathiolane nucleosides including lamivudine 
and dioxolane nucleosides, including troxacitabine, related nucleoside analogs  
and use of these analogs for treating viral infections. In oral hearings held in
1999, both of these oppositions were dismissed by the Opposition Division of the
European Patent Office. Emory University has filed an appeal against the        
dioxolane related decision of the Opposition Division. Emory University is not  
pursuing its appeal of the decision relating to oxathiolanes. However, there can
be no assurance that Emory University will not file revocation actions with     
respect to any BioChem patents that issue in individual European countries.     
There can also be no assurance that BioChem will be successful in defeating     
Emory's appeal against the decision of the                                      

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Opposition Board dismissing Emory's opposition against BioChem's granted patent 
application covering dioxolane nucleosides, including troxacitabine.            

  In Japan, Emory University filed an opposition to BioChem's granted patent
which covers lamivudine, related analogs and use of the analogs for treating    
viral infections. The Trial Board of the Japanese Patent Office dismissed Emory 
University's opposition to BioChem's patent covering lamivudine. It is always   
possible that Emory University could file a revocation action against this      
patent.                                                                         

  Emory University has filed revocation actions in Australia and South Korea
against BioChem's granted patents covering lamivudine. Although BioChem is      
aggressively defending its patents, there can be no assurance that BioChem will 
be successful in maintaining these patents.                                     

 On July 23, 1996, Emory University filed a complaint in the United States
alleging infringement from the commercialisation of Epivir by BioChem and       
GlaxoSmithKline, BioChem's exclusive licensee in the US, of an Emory University 
US patent granted that same day. BioChem considers this patent infringement suit
to be without merit and has successfully challenged the validity of Emory       
University's patent as detailed below.                                          

    On May 19, 1998, the United States Patent and Trademark Office (the "USPTO")
declared an interference between the Emory University patent that is the subject
of the lawsuit and a pending patent application of BioChem. The USPTO accorded  
BioChem the earlier priority date and then accorded BioChem senior party status 
in the interference. BioChem has vigorously challenged the Emory University     
patent in the interference, through to a final hearing on November 10, 1999. The
Board of Patent Appeals and Interferences issued a decision on December 21, 2000
invalidating Emory's patent. There can be no assurance that Emory University    
will not appeal the decision and that Emory's patent will not be reinstated.    

Emory University has obtained a granted patent application in Europe    
relating to oxathiolane nucleosides, including lamivudine. BioChem and          
GlaxoSmithKline filed an opposition to this grant and are vigorously opposing   
the grant. However, there can be no assurance that BioChem and GlaxoSmithKline  
will be successful in opposing Emory's claim relating to lamivudine.            

An examined patent application, filed by Emory University claiming      
lamivudine, was successfully opposed by BioChem in Australia. Emory University  
has filed an appeal from that decision in the Federal Court of Australia.       
BioChem also filed an appeal from certain portions of the decision. There can be
no assurance that BioChem will be successful in the appeal. An examined patent  
application filed by Emory University claiming lamivudine was also opposed by   
BioChem in Japan. The opposition was dismissed in April 1999 because it was     
improperly filed by a representative who had previously represented Emory.      
Notwithstanding the dismissal, the Japanese Patent Office issued an EX-OFFICIO  
action rejecting all of Emory University's claims. An examined patent           
application filed by Emory claiming lamivudine has been opposed by BioChem and  
GlaxoSmithKline in South Korea. However, there can be no assurance that this    
opposition will be successful in invalidating Emory's claims relating to        
lamivudine. BioChem is also aware that Emory University has filed patent        
applications in other countries, which BioChem believes may claim similar       
subject matter. BioChem intends to challenge such patent applications; however  
there can be no assurance that BioChem will be successful in challenging such   
patent applications in all countries where Emory University has sought patent   
rights. In the event that BioChem were to be unsuccessful in opposing such      
patent applications or any patents which may be issued, BioChem's business,     
financial condition and results of operations could be materially adversely     
affected.                                                                       

  On November 23, 1999, the USPTO declared an interference between BioChem's
hepatitis B patent for lamivudine and a patent application filed by Yale        
University ("Yale") claiming methods of treating hepatitis B using lamivudine.  
BioChem believes that this application is licensed to Vion                      
Pharmaceuticals, Inc. ("Vion"), formerly know as OncoRx, Inc., a New Haven,     
Connecticut-based company. BioChem believes that its patent is valid and intends
to vigorously defend the patent.                                                

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However, there is no guarantee that BioChem will be successful in defending its 
patent. It is always possible that Yale will obtain a patent in the US covering 
methods of treating hepatitis B using lamivudine. There can be no assurance that
BioChem would be able to obtain a license at a reasonable cost from Yale or     
Vion.                                                                           

On April 14, 2000, the USPTO declared a further interference between    
BioChem's hepatitis B patent for lamivudine and a patent application by         
GlaxoSmithKline claiming methods of treating hepatitis B using lamivudine.      

    BioChem is not aware of corresponding patent applications by Yale University
or Vion in countries other than the United States.                              

BioChem is aware that others, including various universities and        
biotechnology companies, have also filed patent applications or have obtained   
granted patents in the United States and other countries claiming subject matter
potentially useful or necessary to BioChem's business. Some of these patents and
applications claim specific products or methods of making such products, while  
others claim more general processes or techniques useful or now used in the     
pharmaceutical and biotechnology industries. With respect to the patents        
directed to general processes or techniques, BioChem believes that non-exclusive
licenses have been made available under several of these patents to the industry
for many, but not all, fields of use. The ultimate scope and validity of these  
patents and other existing patents or patent applications which may be granted  
to third parties in the future, the extent to which BioChem may desire or be    
required to acquire rights under such patents, and the availability and costs of
acquiring such rights presently cannot be determined by BioChem. In the event it
is necessary for BioChem to obtain such rights or, if such rights are not       
available on reasonable terms, BioChem's business, financial condition and      
results of operations may be adversely affected. There can be no assurance that 
others have not obtained or will not obtain patent protection that will preclude
BioChem from commercialising its products.                                      

  Litigation, which could result in substantial cost to BioChem, may also be
necessary to enforce or defend any patents issued to BioChem or to determine the
scope and validity of other parties' proprietary rights, which may affect       
BioChem's products and technology. If the outcome of any such litigation is     
adverse to BioChem, BioChem's business could be materially adversely affected.  
To determine the priority of invention, BioChem may also have to participate in 
interference proceedings declared by the United States Patent and Trademark     
Office, which could result in substantial cost to BioChem.                      

 Under United States patent law, a patent is issued to the person who made
the invention first, rather than to the first person to file an application     
therefor, as is common in other countries. Until recently, in determining who is
entitled to a United States patent on a particular technology, only acts in the 
United States (not other countries) were relevant. After December 8, 1993       
inventors could rely on inventive activities in Canada or Mexico and after      
January 1, 1996 on activities in any other country. As a result, since BioChem  
conducted a substantial amount of its research activities in Canada before      
December 8, 1993, it is at a disadvantage as to inventions made prior to        
December 8, 1993 with respect to obtaining United States patents, as compared to
companies that maintained research facilities in the United States.             

There has been, and BioChem believes that there may be in the future,   
significant litigation in the industry regarding patent and other intellectual  
property rights and that, if BioChem becomes involved in such litigation, it    
could consume substantial resources. Significant legal issues remain as to the  
extent to which patent protection may be afforded in the field of biotechnology 
in Canada, the United States and other countries, and the scope of any such     
protection has not yet been broadly tested. BioChem, therefore, also relies upon
trade secrets, know-how, and continuing technological advancement to develop and
maintain its competitive position. Disclosure and use of BioChem's know-how is  
generally controlled in part under confidentiality agreements with the parties  
involved. In addition, BioChem has confidentiality agreements with its key      
employees, consultants, officers and directors. There can be no assurance,      
however, that all confidentiality agreements will be honored, that others will  
not                                                                             

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independently develop equivalent technology, that disputes will not arise as to 
the ownership of intellectual property, or that disclosure of BioChem's trade   
secrets will not occur. Furthermore, there can be no assurance that others have 
not obtained or will not obtain patent protection that will exclude BioChem from
using its trade secrets and confidential information. BioChem supports and      
collaborates in research conducted in universities and in government research   
organisations. There can be no assurance that BioChem will have or be able to   
acquire exclusive rights to inventions or technical information derived from    
such collaboration or that disputes would not arise as to rights in derivative  
or related research programs conducted by BioChem. In addition, in the event of 
BioChem's contractual breach or bankruptcy, certain of BioChem's collaborative  
research contracts provide for transfer of technology (including any patents or 
patent applications) to the collaborators. See "Significant Agreements". To the 
extent that consultants or research collaborators use intellectual property     
owned by others in their work with BioChem, disputes may also arise as to the   
rights to related or resulting know-how or inventions.                          

MANY COMPANIES HAVE PRODUCTS THAT MAY OR WILL SOON BE COMPETING WITH    
BIOCHEM'S PRODUCTS.                                                             

For certain of BioChem's potential products, an important factor in     
competition may be the timing of market introduction of BioChem's or            
competitors' products. Accordingly, the relative speed with which BioChem or    
BioChem's present and future collaborative partners can develop products,       
complete the clinical trials and approval processes, and supply commercial      
quantities of the products to the market are key factors for competitiveness.   
BioChem's competition will be determined in part by the potential indications   
for which BioChem's products are developed and ultimately approved by regulatory
authorities. The development by competitors of new prophylactic, treatment or   
detection methods for those indications for which BioChem is developing products
could render BioChem's products non-competitive or obsolete. BioChem expects    
that competition among products approved for sale will be based, among other    
things, on product efficacy, safety, reliability, availability, price and       
intellectual property protection.                                               

BioChem's competitive position also depends upon its ability to secure  
additional market acceptance and reimbursement of Zeffix. There can be no       
assurance that Zeffix will secure additional market acceptance or that any of   
BioChem's products in development will achieve market acceptance. The degree of 
market acceptance will depend upon a number of factors, including the receipt of
regulatory approvals, the establishment and demonstration in the medical        
community of the clinical efficacy and safety of BioChem's product candidates,  
and the establishment and demonstration of the potential advantages over        
existing and new treatment methods and reimbursement policies of government and 
third-party payors. There can be no assurance that physicians, patients, payors 
or the medical community in general will accept and utilize any existing or new 
products that may be developed by BioChem. Additionally, BioChem's competitive  
position depends on its ability to attract and retain qualified personnel,      
obtain patent protection, or otherwise develop proprietary products or          
processes, establish collaborative relationships and secure manufacturing.      

    In the medical software market, BioChem faces numerous large competitors who
have substantial resources and innovative technologies. With regards to Second  
Look, competition within the market for computer-assisted detection systems for 
mammography will primarily be with two privately held technology companies, R(2)
Technologies ("R(2)"), in Los Altos, California, and Scanis Inc., in Foster     
City, California. R(2) is presently commercializing a product known as          
ImageChecker. R(2) also signed an agreement with G.E. Medical Systems ("G.E.")  
to distribute a digital version of R(2)'s Computer Aided Detection (CAD) System,
for use with G.E.'s full-field digital mammography system. Other high technology
companies with advanced artificial intelligence capabilities are possible       
entrants.                                                                       

RISK FACTORS RELATING TO SHIRE                                                  

For a discussion of risk factors relating to Shire, see Shire's annual  
report for the year ended December 31, 1999 on Form 10-K, which is incorporated 
by reference in this proxy statement.                                           

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DESCRIPTION OF BIOCHEM

    BioChem Pharma Inc. ("BioChem") is an international specialty pharmaceutical
company involved in the research and development of innovative products for the 
prevention, detection and treatment of human diseases.                          

  BioChem's most significant therapeutic products, which have been developed
with GlaxoSmithKline, are 3TC and Zeffix. 3TC is an orally available formulation
of lamivudine for the treatment of patients with HIV infection and AIDS. 3TC is 
currently marketed in 100 countries and achieved sales of CAN $1.3 billion in   
1999. Zeffix is the first and only orally available treatment for chronic       
hepatitis B infection and for the prevention of liver graft reinfection. Zeffix 
was first approved outside of the Philippines and Canada in 1999. Zeffix is     
approved in over 69 countries and has been launched in over 45 countries. Zeffix
achieved worldwide sales of $36 million in 1999. In August 2000, the Asia       
Pacific Consensus Group on the Prevention and Management of Chronic Hepatitis B 
and C endorsed Zeffix as a key treatment option for a broad range of chronic    
hepatitis B patients.                                                           

 In September 1997, the US Food and Drug Administration ("FDA") authorized
the marketing of Combivir, the first product to combine two antiretroviral drugs
in a single tablet formulation. Each tablet of Combivir contains 3TC and AZT and
can be taken twice daily, offering the advantage of reducing significantly the  
number of tablets a person on a 3TC/AZT based treatment regimen needs to take.  
This reduction simplifies the complex multi-drug treatment regimens, thus       
potentially enhancing patient adherence to therapy schedules. The European      
Commission gave approval to market Combivir in the 15 member states of the      
European Union on March 18, 1998. In Canada, the Canadian Health Protection     
Branch ("HPB") approved Combivir on December 4, 1998.                           

On March 24, 1999, the FDA granted approval for expanded prescribing    
information regarding the use of 3TC in infants, children and adolescents. In   
addition, this approval included an important revision to the indication for use
of 3TC in combination with any other antiretroviral agent for the treatment of  
HIV infection in adults and children. On November 15, 2000, the FDA authorized  
the marketing of Trizivir in the United States. Each tablet of Trizivir contains
3TC, AZT and abacavir and can be taken twice daily. Trizivir is the first tablet
to combine three anti-HIV agents, thus making it the simplest triple combination
antiretroviral therapy available with the potential to enhance patients'        
adherence to their therapy schedule. On January 4, 2001, the European Commission
authorized the marketing of Trizivir in the 15 member states of the European    
Union.                                                                          

  BioChem's most advanced therapeutic product candidates are being developed
principally for use in the treatment of cancers and infectious diseases.        
BioChem's most advanced product candidate for cancer is Troxatyl                
("troxacitabine"), a nucleoside analog in clinical development to treat various 
forms of cancer. Troxatyl began Phase II monotherapy trials in 1999. Because    
anticancer agents are generally used in combination, multiple Phase I trials    
studying the use of Troxatyl in combination therapy with other chemotherapeutic 
agents also are underway.                                                       

BioChem is also engaged in the research and development of vaccines for 
human use. BioChem's direct sales force is marketing a split virus influenza    
vaccine developed and manufactured by BioChem to healthcare providers across    
Canada.                                                                         

BioChem's vaccine product candidates include a new cell culture-based   
influenza vaccine using a novel proprietary cell line and high-cell density     
microcarrier technology, which are licensed to GlaxoSmithKline. BioChem is also 
involved in research and development of new recombinant protein-based bacterial 
vaccines. One of these vaccine candidates has progressed to the clinical        
development stage--a NEISSERIA MENINGITIDIS vaccine is in Phase I. In addition, 
STREPTOCOCCUS PNEUMONIAE and PSEUDOMONAS AERUGINOSA vaccines are in pre-clinical
development.                                                                    

  On March 15, 2000, BioChem announced that it had completed the divestiture
of its diagnostics division, BioChem ImmunoSystems Inc. ("ImmunoSystems").      
ImmunoSystems' minority shareholder                                             

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and a management group assumed ownership of the diagnostics business and        
contributed CAN$5 million of capital. BioChem received a CAN$54 million         
debenture to be paid out of future cash flows.                                  

On April 3, 2000, BioChem announced that it had concluded a partnership 
agreement with the Canadian government through Technology Partnership Canada    
("TPC"). Under the agreement, the federal government of Canada has agreed to    
invest up to CAN$80 million in the development of BioChem's recombinant-protein 
vaccines over an approximately six-year period.                                 

    On June 26, 2000, BioChem sold its stake in North American Vaccine, Inc. The
gain on the sale was CAN$137 million, with cash proceeds of CAN$167 million.    

Until January 1, 2000, BioChem conducted its vaccines operations through
BioChem Vaccines Inc., a wholly-owned subsidiary which was at that date         
amalgamated with BioChem. In June 1998, BioChem established BioChem             
Pharma, Inc., a wholly-owned subsidiary incorporated under the laws of Delaware,
to operate in the US. Until the sale of its diagnostics business on March 14,   
2000, that business was carried out through BioChem's 91.0%-owned subsidiary,   
BioChem ImmunoSystems Inc., and its subsidiaries.                               

   In 1998, CliniChem Development Inc. ("CliniChem") was formed by BioChem for
the purpose of conducting the clinical development of certain of its therapeutic
and vaccine products with a goal of commercializing such products. Such         
activities have been contracted to BioChem. BioChem contributed CAN$150 million 
to CliniChem as a capital contribution and then made a dividend-in-kind to the  
shareholders of BioChem in June 1998 of all the Class A Common Shares of        
CliniChem. BioChem had an option to purchase all of the outstanding CliniChem   
Class A Common Shares at a price to be set according to a predetermined formula.

On January 10, 2000, BioChem announced its plan to exercise its purchase
option of all the outstanding CliniChem Class A Common Shares upon depletion of 
CliniChem's financial resources, which was expected sometime before year-end.   

    On October 26, 2000, BioChem announced it had elected to exercise its option
to purchase all the outstanding CliniChem Class A Common Shares and the sending 
to holders of Class A Common Shares of a notice of exercise at a cash purchase  
price of CAN$18.43 per share. The purchase was completed on December 15, 2000   
and CliniChem was merged into BioChem as of January 1, 2001.                    

As of December 31, 2000, BioChem had a total of 476 employees.          

THERAPEUTIC PRODUCTS                                                            

BioChem's most advanced therapeutic product candidates are currently    
directed at providing innovative medicines principally in the anticancer and    
anti-infective areas. BioChem's research and development activities are either  
done internally or through contracts and strategic alliances (see "Significant  
Agreements").                                                                   

  BioChem shares commercialization rights for 3TC and Heptovir (as Zeffix is
known in Canada) with GlaxoSmithKline in Canada and has granted to the latter   
exclusive commercialization rights in the rest of the world.                    

In the pain control area, where markets are broader and therefore the   
resources needed for the development and commercialization are greater, BioChem 
has established a partnership with AstraZeneca plc.                             

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  The following table represents BioChem's therapeutic products and research
and development programs:                                                       

                                                        [Enlarge/Download Table]

    PRODUCT/CANDIDATE             INDICATION             DEVELOPMENT STATUS*         COMMERCIAL RIGHTS    
-------------------------  -------------------------  -------------------------  -------------------------
                                                                                                          
3TC/Epivir                 HIV/AIDS                   On the market              BioChem/GlaxoSmithKline  
Zeffix/Epivir-HBV/         Hepatitis B infection      On the market              BioChem/GlaxoSmithKline  
  Heptovir/Heptodin                                                                                       
Combivir                   HIV/AIDS                   On the market              BioChem/GlaxoSmithKline  
Trizivir                   HIV/AIDS                   On the market              BioChem/GlaxoSmithKline  
PACIS                      Bladder cancer             On the market              BioChem                  
Troxatyl                   Cancer                     In development--Phase II   BioChem                  
Frakefamide (BCH-3963)     Pain control               In development--Phase II   BioChem/AstraZeneca      
                                                      In development--pre-                                
BCH-10618 ((-)dOTC)        HIV/AIDS                     clinical                 BioChem                  
                                                      In development--pre-                                
BCH-13520                  HIV/AIDS                     clinical                 BioChem                  
Tubulin polymerisation     Cancer                     Lead optimization          BioChem/Maxim            
  inhibitors                                                                                              
Troxatyl Prodrugs          Cancer                     Lead optimization          BioChem                  
Angiolytics                Cancer                     Lead optimization          BioChem/Adherex          
Hepatitis C                Hepatitis C                Lead optimization          BioChem                  
Gr+ antibiotic             Antibacterial              Lead optimization          BioChem/Microbiotix      

--------------------------                                                      

*   Indicates product development status. "Research", not used here, includes   
exploratory biology and chemistry, development of screening assays, high
 throughput screening ("HTS"), DE NOVO product design and synthesis. "Lead
optimization" means modifying a lead molecule in order to optimize its  
potency, safety, metabolic stability and drug-like properties for       
progression to Pre-clinical. "Pre-clinical" denotes efficacy,           
  pharmacological and toxicity studies in animal models necessary to support
    an application to initiate human clinical testing. Human clinical trials for
BioChem's drugs and biological products are conducted in three phases.  
  "Phase I" clinical trials are generally conducted in healthy volunteers to
determine pharmacokinetics and safety. "Phase II" clinical trials are   
conducted to gain preliminary information regarding efficacy and dosing 
  regimen and additional safety information. The final stage is "Phase III",
in which studies are conducted to provide sufficient statistical data   
regarding safety and efficacy to support an application for marketing   
 approval of a new drug or license of a biological product. In the case of
 HIV/AIDS and cancer and certain other life-threatening diseases for which
   there is an urgent need for treatment, the FDA may grant approval under its
  accelerated approval regulations, based on analysis of surrogate endpoints
    even when definitive information on efficacy and long-term safety is not yet
   available. Manufacturers of accelerated approval drugs are then required to
conduct more definitive clinical endpoint studies to confirm the drug's 
    effect on the clinical endpoints of the disease. "In registration", not used
 here, means a license application to market the product has been filed in
one or more countries but has not yet been approved.                    

AIDS/HIV INFECTION                                                      

MARKET                                                                  

  The World Health Organization (the "WHO") estimates that, as of the end of
2000, 36.1 million people worldwide had been infected with HIV, the virus that  
leads to the development of AIDS. The WHO estimates that, as of the end of 2000,
approximately 920,000 people were infected with HIV in North America and 540,000
in Western Europe and 700,000 in Eastern Europe. In North America, it is        
estimated that there were 20,000 new infections in the past year. Of these newly
infected people, the Centers for Disease Control ("CDC") estimates that half are
younger than 25 years of age and were infected sexually. Worldwide, there were  
approximately 14,500 new HIV infections per day in 2000, totaling 5.3 million   
new infections during the year. More than 95 percent of these new infections    
occurred in developing countries. HIV infection and AIDS was the fourth leading 
cause of death worldwide in 2000 resulting in an estimated 3 million deaths, the
highest number of AIDS death ever.                                              

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According to WORLD-WIDE ANTIRETROVIRAL SALES, IMS REPORT, in 2000, the  
antiretroviral (anti-HIV) market will reach $3.5 billion in sales, with reverse 
transcriptase inhibitors representing 54% of the market ($2 billion). The vast  
majority of the sales were generated in North America and Western Europe.       

PRODUCT ON THE MARKET--3TC                                              

  The therapeutic product 3TC (lamivudine) is indicated for the treatment of
HIV infection and AIDS. 3TC is one of a novel class of nucleoside analogs with a
heterocyclic surrogate sugar ring discovered and synthesized by BioChem         
scientists which targets the HIV reverse transcriptase enzyme and interferes    
with HIV replication. 3TC was first approved in the United States on            
November 17, 1995 where it is marketed as Epivir. Approval in Canada shortly    
followed on December 8, 1995. The Committee on Proprietary Medicinal Products   
("CPMP") and the EMEA on August 8, 1996 gave full approval under exceptional    
circumstances for the 15 member states of the European Union. On September 29,  
1997, the FDA authorized the marketing of Combivir, the first product to combine
two antiretroviral drugs in a single tablet formulation. Each tablet of Combivir
contains 3TC and AZT and can be taken twice daily, offering the advantage of    
reducing significantly the number of tablets a person on a 3TC/AZT based        
treatment regimen needs to take. This reduction is simplifying the complex      
multi-drug treatment regimens, thus enhancing patient adherence to therapy      
schedules. The European Commission gave approval to market Combivir in the 15   
member states of the European Union on March 18, 1998. In Canada, the HPB       
approved Combivir on December 4, 1998.                                          

  In December 1999, GlaxoSmithKline filed regulatory submissions to the FDA,
EMEA and HPB seeking marketing approval for Trizivir. Trizivir is the first     
product to combine three antiretroviral drugs in a single tablet formulation.   
Each tablet of Trizivir contains 3TC, AZT and abacavir and can be taken twice   
daily. Trizivir is the simplest triple combination antiretroviral therapy       
available with the potential to enhance patients' adherence to their therapy    
schedule. On November 15, 2000, the FDA authorized the marketing of Trizivir in 
the United States. On January 4, 2001, the European Commission authorized the   
marketing of Trizivir in the 15 member states of the European Union. In the     
United States, Trizivir is indicated alone or in combination with other         
antiretroviral agents for the treatment of HIV infection and it is intended only
for patients whose regimen would otherwise include abacavir, lamivudine (3TC)   
and zidovudine (AZT). GlaxoSmithKline is also currently developing a once-a-day 
formulation of 3TC.                                                             

    The results from four pivotal trials and from the clinical endpoint study of
3TC demonstrate the safety and efficacy of 3TC, and have successfully           
established 3TC as the cornerstone of combination therapy in HIV infection. In  
fact, those positive results together with 3TC's ease of administration (one    
tablet twice a day, independently of food intake) helped pave the way to combine
antiretrovirals for maximum clinical benefit and compliance. They also led to   
3TC being used in the majority of triple and quadruple combination therapies    
with other nucleoside analogs, protease inhibitors and non-nucleoside reverse   
transcriptase inhibitors ("NNRTI").                                             

  3TC is available for sale and marketing in approximately 100 countries and
is the most widely prescribed medication for HIV and AIDS in the world. Combivir
is available for sale and marketing in more than 80 countries. On March 24,     
1999, the FDA granted approval for expanded prescribing information on the use  
of 3TC in infants, children and adolescents. In addition, this approval included
an important revision to the indication for use of 3TC in combination with any  
other antiretroviral agent for the treatment of HIV infection in adults and     
children. Since its first marketing approval in 1995, 3TC has been used safely  
in combination with many other antiretroviral agents, and was part of the       
pivotal clinical trials used as part of the basis for approval of five other HIV
antiretroviral agents: the nucleoside analog abacavir, the NNRTI efavirenz, and 
the protease inhibitors indinavir, nelfinavir and amprenavir.                   

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 Resistance to drugs is one of the most significant challenges in HIV/AIDS
therapy and viral resistance testing is used increasingly by physicians to      
detect mutations and help decide whether a patient should switch to a new       
treatment combination. Data presented at the Third International Workshop on HIV
Drug Resistance and Treatment Strategies in San Diego on June 24, 1999 suggests 
that combination therapies which contain 3TC remain potent and continue to      
suppress HIV even in presence of 3TC resistant mutants.                         

BioChem has licensed to GlaxoSmithKline the worldwide rights, with the  
exception of Canada, to develop, manufacture and sell 3TC. In Canada, 3TC is    
sold by BioChem in partnership with GlaxoSmithKline.                            

IN DEVELOPMENT                                                          

Appearance of drug resistant viruses is an inevitable consequence of    
prolonged exposure of HIV to antiretroviral therapy. Recent studies suggested   
that HIV can become multi-drug resistant under combination therapy. Therefore,  
it is still necessary to develop alternate drug combinations for the long-term  
successful treatment of HIV infection. BioChem is focusing its efforts on       
developing new agents which are effective against existing drug resistant       
viruses and can be rationally incorporated into novel drug combination therapy. 
The objective of BioChem's program is to bring to the market drugs which are    
potent, well tolerated and active against strains of virus resistant to current 
therapies. Two compounds, both nucleoside analog reverse transcriptase          
inhibitors ("NRTIs"), are currently being developed, namely BCH-10618 and       
BCH-13520. BioChem is also pursuing an early stage research program on          
HIV/RNAseH inhibitors.                                                          

A) BCH-13520                                                            

BCH-13520 is a novel anti-HIV NRTI which has progressed from discovery  
research to the pre-clinical development stage in mid-1999.                     

The data used to support the advancement of this compound has been      
accumulating since 1998. BCH-13520 has shown significant inhibition of HIV      
replication for both wild-type and drug resistant virus. Importantly, IN VITRO  
studies have demonstrated that BCH-13520 remains active against clinical        
isolates of HIV which display phenotypic resistance to marketed NRTI            
antiretroviral agents such as AZT, 3TC, d4T and abacavir.                       

 IN VITRO studies have also shown that BCH-13520, when used in combination
with 3TC, AZT, Sustiva, d4T, BCH-10618, nevirapine, saquinavir or abacavir,     
demonstrates additive or slightly synergistic anti-viral activity with most of  
these agents. These data suggest that BCH-13520 will be able to fit into        
multi-drug combination regimens.                                                

  Resistance of the HIV viruses to BCH-13520 is slow to develop, which is in
contrast to the relative speed of emergence of virus grown in the presence of   
AZT, 3TC or NNRTIs.                                                             

Cytotoxicity evaluations of BCH-13520 demonstrate an excellent toxicity 
profile IN VITRO. Extended studies (28 days of continuous exposure to growing   
HepG2 cells) also revealed that BCH-13520 caused no change in cell growth or    
mitochondrial DNA content at concentrations of BCH-13520 up to 100 mM.          
Preliminary results of an IN VITRO myelotoxicity study indicate that BCH-13520  
has a similar profile to 3TC and is 200-fold less toxic than AZT to human bone  
marrow cells.                                                                   

In order to further profile BCH-13520, initial IN VIVO (efficacy,       
pharmacokinetic and toxicity) work has been performed with this compound in     
animals. In a mouse model of HIV infection, BCH-13520 was able to reduce virus  
levels in mouse serum by over one log unit following treatment with BCH-13520 at
30 mg/kg/day for 14 days. Pharmacokinetic and acute toxicity studies have been  
completed with rats tolerating the drug at the highest dose administered (2,000 
mg/kg p.o.). A two-week escalating repeat dose toxicity evaluation in rats was  
also conducted and the product was                                              

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found to be safe up to 500 mg/kg/day. In monkeys, bone marrow cytology          
abnormalities were observed in the first 14-day study at oral doses of 300 mg/kg
and above. Due to very high bioavailability, drug exposure was found to be      
higher than expected and a follow-on 28-day oral study is presently ongoing     
using lower doses to identify the no-adverse effect dose level. The no-adverse  
effect dose level has been identified for intravenous administration in this    
species at 40 mg/kg.                                                            

  Taken together, the data indicates that BCH-13520 is a candidate worthy of
advancing into clinical evaluation for the treatment of HIV infection. The      
pre-clinical long-term Good Laboratory Practice safety studies are currently    
underway. BioChem plans to submit an IND to begin Phase I trials in the second  
quarter of 2001.                                                                

B) BCH-10618 (ALSO KNOWN AS (-)DOTC)                                    

  BCH-10618 is a compound being developed for the treatment of HIV infection
and AIDS. BCH-10618 has been shown to stop the replication of the HIV virus IN  
VITRO. BCH-10618 is a nucleoside analog with a novel structure which targets the
HIV reverse transcriptase enzyme. By targeting the reverse transcriptase enzyme,
BCH-10618 appears to interfere with the transcription of viral RNA to viral DNA,
a process necessary for HIV replication. Other nucleoside analogs, such as AZT  
and 3TC, also inhibit the reverse transcriptase enzyme. However, BCH-10618      
appears to be capable of inhibiting the replication of HIV viruses that have    
become resistant to 3TC, AZT, d4T and abacavir and to some protease inhibitors. 
In addition, based on IN VITRO studies, in contrast to 3TC, resistance to       
BCH-10618 appears slow to develop and when mutations do emerge in the virus,    
they confer little to no diminished sensitivity to BCH-10618. BioChem believes  
these properties may give BCH-10618 a role in the treatment of both HIV-infected
patients in whom standard triple combination regimens are no longer effective   
and in patients who have never received anti-HIV therapy (first-line therapy).  

The racemic mixture dOTC (an equal mixture of (+)dOTC and (-)dOTC       
(BCH-10618)) was investigated previously IN VITRO, in pre-clinical and in Phase 
I clinical studies. Further to the good safety and pharmacokinetic profile of   
racemic dOTC in two Phase I single-dose healthy volunteer studies, a Phase I/II 
clinical trial was conducted with racemic dOTC in antiretroviral-naive, HIV     
infected patients. This study was initiated late in 1998 and was completed in   
the third quarter of 1999. The results from this 7-day study demonstrated       
racemic dOTC's potent activity in HIV-infected patients and further demonstrated
its good tolerability. The 3-month rat toxicity study, as well as rat and rabbit
teratology studies, were also completed in 1999. Results from these studies     
continued to demonstrate racemic dOTC's good pre-clinical safety profile.       
However, in a long-term toxicity study terminated late in 1999, racemic dOTC was
found to be toxic in monkeys. After much investigation, the species specificity 
of the toxicity seen with racemic dOTC could not be demonstrated, nor could the 
mechanism(s) responsible for the observed toxicity be elucidated.               

Given these toxicity results with racemic dOTC, and given the potent IN 
VITRO activity and good IN VITRO safety profile of BCH-10618 relative to        
(+)dOTC, it was decided to terminate the development of racemic dOTC and to     
continue with the development of BCH-10618.                                     

  Investigation of the toxicity profile of BCH-10618 in animals is currently
underway. BioChem plans to submit an IND amendment to begin Phase I trials in   
the second quarter of 2001.                                                     

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HEPATITIS B                                                             

MARKET                                                                  

   HBV is the causative agent of both the acute and chronic forms of hepatitis
B, a liver disease which is a major cause of morbidity and mortality throughout 
the world. Data from the WHO indicate that over 2 billion people worldwide have 
been, at some point, infected with hepatitis B virus. Of these 2 billion, there 
are over 350 million people chronically infected (WHO 1996), 75% of whom are    
found in the Asia-Pacific region. There are some 25 million chronic carriers of 
HBV in industrialized countries with developed economies and healthcare         
programs. These chronic carriers are at high risk of developing chronic active  
hepatitis, which kills up to 2 million persons per year. The WHO estimated that 
as many as 25-35% of individuals who become chronic carriers will eventually die
prematurely as a result of their hepatitis B from cirrhosis or hepatocellular   
carcinoma (liver cancer) as a result of their hepatitis B infections. Vaccines  
to prevent hepatitis B are currently available; however, they have not been     
shown to be effective in those already infected with the virus. Despite the     
availability of these vaccines for more than a decade, the incidence of HBV     
infection in the United States has increased.                                   

    Hepatitis B virus is estimated to be approximately 100 times more infectious
than the HIV virus. The main routes of transmission in North America are:       
parenterally (through the use of needles) and via sexual contact. The main      
routes of transmission in areas of high prevalence (including the Asia-Pacific  
region) are mostly perinatally (from mother to baby during the perinatal period)
or from person to person particularly during early childhood.                   

Alpha interferon was previously the only widely approved treatment for  
patients with chronic active hepatitis B. It is administered by injection, is   
only successful in controlling the virus in a minority of patients and is       
associated with undesirable side effects such as flu-like symptoms. Alpha       
interferon has poor efficacy in the majority of chronic hepatitis B patients who
are located in the Asia-Pacific region and who could be presumed to have        
acquired the disease perinatally or at a young age. This usually leads to an    
immune tolerance state of infection where an immunostimulant such as alpha      
interferon works poorly. BioChem believes a significant market opportunity      
exists for an effective and safe oral anti-viral therapy against chronic        
hepatitis B, especially for a product with proven efficacy in immune tolerant   
chronic hepatitis B patients, such as the vast majority in the Asia-Pacific     
region.                                                                         

PRODUCT ON THE MARKET--ZEFFIX                                           

 A different dosage regimen of lamivudine (referred to as Zeffix, but also
available as Epivir-HBV in the United States, as Heptovir in Canada and Heptodin
in China) has been developed with GlaxoSmithKline as an oral treatment for      
chronic hepatitis B infection and for the prevention of liver graft reinfection.
Like 3TC with HIV, Zeffix targets the reverse transcriptase enzyme of HBV and   
appears to interfere with the transcription of viral RNA to viral DNA, a process
necessary for HBV replication.                                                  

   GlaxoSmithKline conducted numerous Phase III clinical trials of Zeffix as a
treatment for chronic hepatitis B infection. Clinical trial sites included      
countries in the Asia/Pacific region, Europe, Australia, South Africa, Canada   
and the United States. Most of these trials were for a duration of one year of  
treatment with follow-up periods ranging from three months to two years. A      
longer trial for up to five years of Zeffix treatment was completed in Asia.    

Results from several clinical trials to date showed that:               

1)  Zeffix therapy after one year of treatment in a non-Asian trial results in  
similar seroconversion rates as a standard course of interferon (Intron 
A) and a course of Zeffix and interferon combined. Additionally, in     
comparison to interferon treated patients, a greater number of patients 
treated with Zeffix showed improvement in liver disease regardless of   
whether or not                                                          

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seroconversion occurred. Patients taking Zeffix also suffered from fewer
 side effects than either of the other two groups treated with interferon.

2)  Asian patients have been found to respond equally well to Zeffix as         
Caucasians. In contrast to Caucasians, Asians generally acquire the     
  infection perinatally or early in childhood leading to an immune tolerance
status resulting in poor response to alpha-interferon therapy.          

3)  The seroconversion rate is cumulative with duration of Zeffix treatment. In 
fact, four-year data from an Asian trial show that the proportion of    
 patients who seroconvert reaches 47% at year four (vs. 40% at year three,
29% at year two and 22% at year one). 73% of patients with active liver 
disease (ALT of twice the upper limit of the normal level) successfully 
seroconverted at year four. In addition, prolonged Zeffix therapy is    
 associated with continuous reduced disease progression and improvement of
    liver inflammation and fibrosis. Also, after four years, 64% of patients had
normal ALT levels.                                                      

4)  On extended Zeffix treatment, mutant virus showing changes in the YMDD locus
   of the virus polymerase emerges in a number of patients. Patients from this
  Asian trial who had a YMDD mutated form of the hepatitis B virus for up to
    three years continued to have reduced levels of ALT and HBV, suggesting that
despite the presence of a mutated form of the virus, patients may still 
   obtain benefits from Zeffix. In addition, seroconversion continues to occur
    and histological improvements have been observed in the majority of patients
despite the presence of the YMDD variant.                               

5)  Zeffix significantly improves liver inflammation, reduces progression of    
    fibrosis and improves fibrosis compared to placebo. Trials in North America,
    Europe and Asia demonstrated similar histological benefits after one year of
    therapy. An integrated analysis of three trials showed that in comparison to
placebo and alpha interferon, Zeffix can reduce significantly the       
   progression to cirrhosis and consequently has the potential of reducing the
mortality and morbidity associated with the complication of cirrhosis.  

6)  Interim results from an International Study demonstrates a regression in    
 cirrhosis in 64% of patients with pre-existing cirrhosis following two or
more year of treatment with Zeffix. The study's finding suggest that    
 extended treatment with Zeffix may not only stop further damage caused by
  the hepatitis B virus, but also allow the body to regenerate healthy liver
tissue and repair pre-existing damage.                                  

7)  Zeffix monotherapy is effective in a specific group of patients with a form 
  of the disease known as "pre-core mutant hepatitis B". This variant of the
 disease is particularly prevalent in Southern Europe, the Middle East and
some Asian countries, and responds very poorly to alpha-interferon      
  treatment. Data showed Zeffix to be as effective in this more difficult to
treat form of hepatitis B as in the more common type.                   

8)  Response is sustained after stopping Zeffix therapy in patients who had     
   achieved seroconversion. When treatment was discontinued after one year and
  patients were monitored for almost 2 years without treatment, it was found
that virologic responses achieved during the year of therapy with Zeffix
were usually sustained in the vast majority of patients (86%) who had   
achieved loss of HBeAg (Hepatitis B e antigen--a blood marker of ongoing
  viral replication) by the end of therapy. In addition, after this two-year
follow-up, 21% of patients who lost HBeAg have also achieved HBsAg      
(Hepatitis B surface antigen) seroconversion, an indicator of a probable
cure of chronic hepatitis B.                                            

9)  The overall safety profile of Zeffix is excellent with side effects similar 
to placebo during the one year Phase III treatment period. Analysis of  
   controlled post treatment data indicate a modest increase in post treatment
ALT elevations in the Zeffix group; however, there was no difference in 
 clinically severe post treatment events in the Zeffix and placebo groups.

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Overall these data support the broad utility of Zeffix as a safe and    
effective drug for treating a wide range of patients with chronic hepatitis B,  
including Asian patients, patients infected with pre-core mutant hepatitis B    
virus and the subgroup of patients who eventually develop the variant HBV       
strains associated with Zeffix resistance in laboratory assays.                 

At the end of August 2000, the Asia Pacific Consensus Group on the      
Prevention and Management of Chronic Hepatitis B and C in association with the  
Journal of Gastroenterology and Hepathology have endorsed Zeffix as a key       
treatment option for a broad range of chronic hepatitis B patients. The         
guidelines are the results of a consensus reached by a Core Planning Committee  
of 37 leading clinicians from ten countries in the region. On the basis of an   
extensive review of available literature and clinical experience, the Asia      
Pacific guidelines recommend that hepatitis B patients with active liver        
disease, liver failure, or recurrent disease after liver transplantation should 
be treated with Zeffix.                                                         

   First approved in the Philippines and in Canada in August and November 1998
respectively, Zeffix has been approved and launched through 1999 in the US, Hong
Kong, Singapore, China, South Korea, some European Union countries and Taiwan   
and, more recently, in Japan. As of December 2000, Zeffix has been approved in  
69 countries and launched in 45 of those.                                       

    On November 20, 2000, GlaxoSmithKline launched Zeffix in Japan. Provision of
drug information to medical institutions regarding Zeffix in Japan is carried   
out by GlaxoSmithKline K.K. with Ajinomoto Pharma Co. Ltd., through co-promotion
as Ajinomoto Pharma has experience in liver disease.                            

Pursuant to agreements entered into with GlaxoSmithKline, BioChem has   
licensed to GlaxoSmithKline the worldwide rights, with the exception of Canada, 
to develop, manufacture and sell Zeffix. In Canada, Zeffix is sold by BioChem in
partnership with GlaxoSmithKline, under the tradename Heptovir.                 

BLADDER CANCER                                                          

MARKET                                                                  

  Bladder cancer is the sixth most common cancer (other than skin cancer) in
the US according to the American Cancer Society. While progress has been made in
the prevention and treatment of bladder cancer, the American Cancer Society     
estimated that in 2000 over 54,000 Americans were diagnosed with transitional   
cell carcinoma of the bladder and more than 12,000 people with recurrent or     
acute disease died from it.                                                     

PRODUCT ON THE MARKET--PACIS                                            

BioChem has developed a BCG (Bacillus Calmette-Guerin) immunotherapeutic
that has demonstrated efficacy in the treatment of superficial bladder cancers. 
The American Urology Association recommends the use of BCG immunotherapeutics as
first line therapy for superficial bladder cancer.                              

    BioChem's BCG product is marketed, through exclusive distributorships, under
the trademark PACIS and as of December 31, 1999, was registered in Canada,      
Argentina and the Philippines. On March 9, 2000, the FDA approved PACIS for sale
in the US as a first line treatment for carcinoma IN SITU of the urinary        
bladder.                                                                        

PAIN CONTROL                                                            

MARKET                                                                  

The pain control or pain management market is divided into the acute    
(short-term) and chronic (longer-term, persistent) pain market and along the    
lines of mild, moderate and severe pain. The                                    

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analgesic market is divided into the following categories: non-steroidal        
anti-inflammatories ("NSAID"), narcotics and non-narcotics. The injectable /    
intravenous forms of these analgesics are generally used for pain management in 
the acute setting, such as post-operative or trauma pain. The chronic pain      
control pharmaceutical market, such as the treatment of cancer pain and         
arthritis pain, calls for drugs that will provide longer term duration, and     
whose delivery form will not require hospital or professional supervision to    
administer. Such potent, well-tolerated, chronically used, easily delivered pain
control compounds would provide safe and effective relief in an ambulatory      
setting, i.e. one that permits sufferers to be mobile and to have a quality of  
life.                                                                           

Chronic pain (chronic headache, lower back pain, cancer pain, arthritis 
pain, other disorders, such as neuralgias and neuropathies) has been described  
as one of the most costly health problems in America. More than 30 million      
Americans visit physicians for chronic pain each year (D&MD-PAIN THERAPEUTICS: A
REVOLUTION IN THE MAKING). It is estimated that in the US alone, the annual     
direct and indirect cost is close to $70 billion (INTERNATIONAL ASSOCIATION FOR 
THE STUDY OF PAIN).                                                             

   Cancer pain: the majority of intermediate to advanced stage cancer patients
suffer moderate to severe pain. Clinical studies of pain suggest that one-third 
of patients currently receiving cancer treatment experience moderate to severe  
pain, and in patients with advanced disease this increases from 60 to 90%.      
Statistics on terminal cancer from the WHO suggest that there are 4 million     
cancer pain sufferers at any given time, representing only a fraction of the    
number of cancer patients suffering from pain.                                  

Arthritis pain, termed the "great crippler," is estimated to affect some
36 million Americans of which about 20 million are diagnosed (DATAMONITOR,      
MARKET DYNAMICS 2000: PAIN). It is estimated to cost billions of dollars        
annually: a result of lost income, lost productivity and direct health care     
expenses combined.                                                              

Many chronic pain conditions, such as arthritis and cancer pain, affect 
older adults. With the world population generally living longer, the incidence  
of cancer and arthritis-associated pain is expected to increase, as is the      
growing demand for potent and safe novel agents to manage moderate to severe    
pain.                                                                           

DEVELOPMENT PROJECT--FRAKEFAMIDE (BCH-3963)                             

   Further to an agreement signed between BioChem and AstraZeneca, AstraZeneca
is presently developing a peripherally acting m-opioid receptor agonist,        
Frakefamide, discovered by BioChem and intended for the treatment of acute and  
chronic pain.                                                                   

  Opioids such as morphine are the cornerstone in clinical pain treatment in
spite of the development of tolerance and their undesirable side effects due to 
their action on the central nervous system ("CNS"). The traditionally held view 
was that opioid analgesia is mediated exclusively within the CNS. However,      
recent research has shown that analgesia at the site of inflammation can be     
initiated by the activation of opioid receptors located outside the CNS.        
Particularly, it has been demonstrated that the agonists with a preference for  
m-receptors are generally the most potent. With that rationale, BioChem         
scientists discovered Frakefamide, which is highly selective for the m-opioid   
receptor and which does not penetrate the CNS. In animal models, Frakefamide has
exhibited potency similar to morphine but without the dependence, tolerance or  
other CNS associated side effects.                                              

    AstraZeneca filed a first Investigational New Drug ("IND") in Sweden in 1998
and completed four Phase I studies with an injectable (i.v.) formulation. The   
results of these studies showed that Frakefamide was well tolerated with no CNS 
side effects or respiratory depression and suggested that it was 10 times more  
potent than morphine as measured by a surrogate marker. AstraZeneca initiated in
1999 Phase II clinical trials to evaluate the analgesic potential of            
Frakefamide.                                                                    

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  In general, opioids and morphine, in particular, remain as the most common
treatment for pain following surgery but in recent years, parenteral            
non-steroidal anti-inflammatory drugs ("NSAIDs"), notably ketorolac and         
diclofenac, have been shown to be effective analgesics when administered after  
surgery. The major benefits of NSAIDs are related to the ability of these agents
to provide analgesia without the major drawback of opioids. However, NSAIDs may 
not provide sufficient efficacy and the well-known gastrointestinal toxicity and
risk for renal failure limit their use. Recently companies reported the ongoing 
development of COX-2 inhibitors for the management of acute pain associated with
surgery.                                                                        

There is a large unmet need in the management of acute pain following   
surgery and Frakefamide has the potential to become an important drug in that   
setting. The Phase II studies should be completed in early 2001 and additional  
clinical trials program with the injectable (i.v.) formulation in the management
of post-operative pain is planned to be initiated thereafter.                   

    AstraZeneca is working on various potential non-parenteral formulations that
would be suitable for administration in the management of chronic pain such as  
osteoarthritis and cancer pain.                                                 

CANCER CHEMOTHERAPY                                                     

MARKET                                                                  

  Epidemiological data (EUR J CANCER 35(1):24-31 1999 UI: 99227530 Abstract)
confirm that each year, there are an estimated 10 million new cases of cancer   
diagnosed globally, and this is expected to rise steadily to 20 million by the  
year 2020. Over 6.2 million people worldwide died of cancer in 1997. The leading
causes of cancer deaths are attributed to lung (1.1 million), stomach (765,000),
colon and rectum (505,000), and breast (385,000).                               

  The worldwide cancer market including anti-emetics and other adjuvants was
valued at over US$23 billion in 1999, or about 6% of the global pharmaceutical  
market (IMS World 2000, ANNUAL REVIEW OF PHARMACEUTICAL INDUSTRY PERFORMANCE).  
In 1999, the cancer market grew by approximately 17% over the previous year,    
1998 (Datamonitor SPRINT SALES 2000). Factors influencing the strong growth in  
the cancer drug therapy market include: (a) increased incidence of cancer;      
(b) improved diagnosis; and (c) development of effective adjunct therapies which
enable more intense, more effective and more widespread use of chemotherapy. The
increased incidence of cancer is due to many factors, including: (a) worldwide  
population growth; (b) longer life expectancies; and (c) increased exposure to  
carcinogenic environmental or dietary factors.                                  

DEVELOPMENT PROJECTS                                                    

A) TROXATYL (TROXACITABINE OR BCH-4556)                                 

 Troxatyl is a nucleoside analog being developed to treat various forms of
cancer. A few nucleoside analogs, such as gemcitabine and Ara-C, are used in the
treatment of certain cancers. These nucleoside analogs inhibit tumor growth by  
preventing cell replication. Currently marketed nucleoside analogs have two     
major disadvantages that impair their anticancer activity and have limited their
use to date. First, they are rapidly deaminated by cellular enzymes, which leads
to a loss of efficacy and consequently to the resistance of the cancer to       
treatment. Second, existing nucleoside analogs are typically unable to          
completely stop cell division and therefore do not optimally treat cancer.      
Troxatyl is a nucleoside analog that BioChem believes will provide significant  
benefits in treating various forms of cancer due to its novel structure and     
mechanism of action. Discovered and synthesised by BioChem scientists, Troxatyl 
belongs to a different structural class than the currently marketed nucleoside  
analogs. Because it is a nucleoside analog which has a non-natural (B-L)        
configuration, Troxatyl is not vulnerable to deamination. In addition, because  
it lacks the 3'-hydroxyl group it acts as a complete DNA chain terminator, and  
thus may be able to completely stop tumor cell division. BioChem believes that  
both of                                                                         

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these characteristics could lead to improved efficacy compared to other         
currently marketed nucleoside analogs. BioChem plans to administer Troxatyl     
initially by intravenous injection.                                             

 Three Phase I safety and pharmacokinetic studies have been completed in a
total of 104 advanced stage cancer patients with solid tumors: a single dose    
regimen and two additional multiple dose regimens. The drug was well tolerated  
with myelosuppression and skin toxicity (rash and the hand-foot syndrome) as the
main side effects. Major clinical responses were seen in three patients with    
malignant melanoma, hypernephroma and a carcinoma of unknown origin. Based on   
these encouraging results, BioChem has completed a pilot Phase II clinical trial
program with Troxatyl in various types of solid tumors (E.G. renal, prostate,   
colorectal, non-small-cell lung, pancreatic, melanoma) using the once every     
three weeks administration schedule. Preliminary evidence of activity was seen  
in the renal and pancreatic cancer trials. Consequently, BioChem is now         
investigating the therapeutic effects of Troxatyl using an alternate daily times
5 monthly administration schedule in pancreatic cancer. Additional trials are   
planned and BioChem will then focus its Phase III program on the solid tumors   
where activity has been identified. Since, in clinical practice, cancers are    
treated mainly by using combinations of chemotherapeutic agents, BioChem is also
performing, in parallel, two pilot combination chemotherapy Phase I trials of   
Troxatyl with either cisplatin or paclitaxel in solid tumors using the daily    
times 5 monthly Troxatyl treatment schedule. It is hoped that these studies will
open additional areas of development for Troxatyl in the treatment of solid     
tumors.                                                                         

A Phase I safety and pharmacokinetic study in refractory acute leukemia 
patients has also been completed at the MD Anderson Cancer Center in Houston,   
Texas. Thirty-one patients with acute myelogenous leukemia (AML) were treated   
and a specific recommended dose was defined for this patient population. Again, 
the drug was well tolerated with skin toxicity and mucositis as the main        
non-hematologic side effects. In addition, Troxatyl showed promising signs of   
antileukemic activity in this heavily pretreated population of patients: 4/30   
evaluable patients had major (complete and partial) responses and 73% showed a  
significant decrease in their leukemic cells following therapy. BioChem is now  
following up on these results and has initiated testing of four different       
Troxatyl combination regimens with either idarubicin, topotecan, Ara-C or       
Mylotarg. BioChem believes that these trials will optimize the antileukemic     
activity of Troxatyl and set the groundwork for subsequent Phase III trials. A  
Phase II trial in patients with various types of acute leukemia was also        
conducted at the MD Anderson Cancer Center. Two complete and one partial        
remissions were observed in 17 evaluable AML patients. Four patients of 13      
evaluable with chronic myelogenous leukemia in blastic phase (CML-BP) achieved a
return to chronic phase disease and three others achieved a major hematologic   
response. BioChem is now following up on these promising results by testing     
single agent Troxatyl in a North American multicenter trial involving 50 CML-BP 
patients. The FDA will be consulted in the second quarter of 2001 to determine  
Troxatyl's registration strategy in this patient population.                    

B) TROXATYL PRODRUGS                                                    

Most antimitotic nucleosides used in cancer chemotherapy are generally  
poorly selective towards proliferating normal versus tumor cells. Compounding   
this problem is the incidence of DE NOVO or tumor induced resistance towards    
these agents which leads to patient death. In order to address these issues     
BioChem has been conducting research aimed at the discovery of novel            
antineoplastic nucleosides. This research has led to the discovery of Troxatyl, 
an unnatural nucleoside analog displaying activity in leukemia patients in      
ongoing clinical trials. Troxatyl has mechanistic properties which are believed 
to be useful against frequently encountered solid cancers such as colon, lung,  
breast, pancreatic and renal cancer. In order to develop its full potential, a  
project was initiated to broaden this compound's usefulness by designing        
prodrugs that will target solid tumors through an altered tissue distribution   
profile. BioChem scientists believe that this approach should enhance the       
activity of the compounds towards solid tumors and as well may improve the      
therapeutic window with regards to hematologic toxicities.                      

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Novel compounds are being synthesized and our IN VITRO results to date  
indicate that anticancer potency against tumor cells originating from solid     
cancers was improved significantly with certain propietary prodrug derivatives  
of Troxatyl. Some of these compounds will be tested IN VIVO against solid       
cancers in order to establish a structure activity relationship with respect to 
anticancer activity enhancements and safety profile. The objective is to select 
a compound for pre-clinical development in the fourth quarter of 2001.          

BioChem believes that this novel class of compounds offers significant  
potential for the development of novel anticancer chemotherapeutic agents.      

C) TUBULIN POLYMERIZATION INHIBITORS                                    

A collaboration was entered into on August 31, 2000 between Maxim       
Pharmaceuticals Inc. and BioChem for the development of a new class of          
small-molecules that activate caspases--and the apoptosis or program cell death 
mechanism--in cancer cells. This new class of compounds works independent of the
tumor suppressor gene p53 and, therefore, has the potential to cause cell death 
in tumor cells refractory to current chemotherapeutic drugs. Functional analysis
of this class of molecules indicated that they inhibit tubulin polymerization by
targeting the colchicine site, thereby leading to mitotic arrest. This is unlike
current depolymerizing agents which interact with the vinca binding site and the
taxanes, which polymerize tubulin. Moreover, this new class of antimitotic      
agents overcomes known mechanism of drug resistance. Lead optimization is       
currently being done in order to maximize the potency and to increase the plasma
stability and half-life of the current analogues.                               

 BioChem expects to be in a position to select a compound with the desired
characteristics to be progressed into the pre-clinical development stage towards
the end of 2001.                                                                

D) ANGIOLYTICS                                                          

    Cell adhesion, the process whereby cells adhere together to form tissues, is
a fundamental biological process. Cadherins are the proteins that are           
responsible for cell-to-cell adhesion. Adherex Technologies, with which BioChem 
has entered in a collaboration on August 22, 2000, has patented a cyclic peptide
("Exherin") which binds to cadherins thereby dissociating cell-cell interaction.

    A key advantage of Exherin over conventional chemotherapy is that it targets
cancer blood vessels and not cancer cells. Exherin also possesses an advantage  
over the new class of anti-cancer drugs know as anti-angiogenic agents. These   
drugs work by targeting angiogenic factors and their receptors, thus preventing 
the growth of new blood vessels to the tumor. Based on its mechanism of action, 
Exherin has the potential of not only preventing angiogenesis, but may reverse  
tumor angiogenesis by destroying existing tumor blood vessels.                  

    BioChem is presently at the stage of doing pharmacology and toxicity studies
as well as evaluating Exherin's anti-tumor potential in a variety of human      
xenograft mouse tumor models.                                                   

HEPATITIS C                                                             

MARKET                                                                  

Viral hepatitis refers to a spectrum of diseases caused by one of eight 
identified hepatotropic viruses that affect humans. Most important in terms of  
morbidity and cost to healthcare systems, are hepatitis B and hepatitis C       
viruses (HCV) collectively affecting over 500 million people worldwide. Causes  
of mortality and morbidity are related to liver cirrhosis, disability, portal   
hypertension, and hepatocellular carcinoma. HBV results in chronic disease in   
only 5-10% of the infected individuals, in contrast, HCV infection leads to     
chronic infection in 80% of the cases. Prevalence of HCV in the Western world is
between 1.5% and 2% of the total population and according to the US Centers for 
Disease Control, 10,000 people died as a result of HCV related complications in 
1996 in the US.                                                                 

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Currently, there is an estimated four million chronically infected individuals  
in the US alone. Therefore, HCV infection poses a major health risk. The high   
mutation rate of the HCV makes vaccine development extremely challenging.       
Consequently, the eradication of HCV through intervention with effective        
therapeutic agents is needed to alleviate this major potential health hazard.   

The current approved therapy (interferon + ribavirin) for HCV related   
chronic hepatitis results in sustained eradication of viral infection in less   
than 50% of patients. Although the current treatment is effective, it still only
gives less than 50% chance of virus eradication, and the response rate is less  
with genotypes most commonly found in the western countries. Moreover, current  
HCV treatment is not cost effective and has significant side effects. Hence,    
while the current therapy is proven to be partly beneficial, clearly there is a 
need for anti-viral drugs that target HCV directly and it is generally believed 
that agents blocking key enzymes will be more effective and less prone to side  
effects. The market potential for direct HCV inhibitors is substantial. It is   
believed such products, if successfully developed, could be used a) as          
anti-viral agents for HCV related disorders as a monotherapy, b) in combination 
with other anti-viral inhibitors and c) in combination with existing treatment  
(interferon + ribavirin).                                                       

HCV POLYMERASE RESEARCH PROJECT--HCV POLYMERASE                         

  The genome of HCV encodes for both structural and non-structural proteins.
The structural proteins include two envelope glycoproteins and an RNA-binding   
nucleocapsid. The non-structural proteins include NS3 protease, NS3 helicase and
a NS5B polymerase. It has been shown that these enzymes are essential for viral 
replication, hence, inhibition of these enzymes should lead to drug molecules   
capable of interfering with the HCV replication. BioChem's strategy focuses on  
devising potent and selective inhibitors of some of these enzymes in order to   
select the most promising approach for inhibition of viral replication. Other   
groups are also following the same strategy. Structure-based design approaches  
as well as high throughput screening ("HTS") campaigns have been initiated.     

The current focus is on developing both nucleoside and non-nucleoside   
inhibitors of HCV NS5B polymerase. Novel strategies to identify nucleoside based
inhibitors are in progress. Through HTS, several novel series of non nucleoside 
inhibitors have been identified. Chemical optimization of some of these series  
of compounds have yielded sub mM compounds in IN VITRO polymerase assay.        
Chemical optimization cycles are focusing on improving the IN VITRO potencies,  
both in enzymatic assays as well as in cell based sub-genomic replicon assay, to
low nM level with an aim to identify a compound to be progressed to the         
pre-clinical development stage by the end of 2001.                              

ANTIBIOTICS                                                             

There is a rapidly growing crisis in the clinical management of life    
threatening infectious diseases caused by multi-antibiotic resistant strains of 
pathogenic bacteria. Solutions to the problem will be provided, in part, by the 
development of novel chemotherapeutic agents which selectively attack new       
bacterial biochemical targets. Such targets include enzymes that are essential  
for the replication of bacterial DNA.                                           

A collaboration was entered into on December 6, 1999 between BioChem and
Microbiotix Inc. to further exploit this approach. The goal of the collaboration
is to identify and optimize lead compounds which target such bacterial enzymes, 
in particular the specific DNA polymerases. Approaches employed include both    
rational design and random screening and two organisms, methicillin-resistant   
STAPHYLOCCUS AUREUS and vancomycin resistant Enterococcus represent specific    
high priority therapeutic targets. This project is at the lead optimization     
stage and through this collaboration effort, BioChem expects to be in a position
to select a compound having the necessary characteristics to be progressed into 
the pre-clinical development stage.                                             

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VACCINE PRODUCTS                                                                

BioChem is engaged in the research and development of vaccines for human
use. BioChem currently manufactures and markets in Canada a split influenza     
virus vaccine. BioChem also distributes, in the province of Quebec, a number of 
vaccines produced by other companies. In 1997, BioChem also started to export   
its split influenza vaccine to Argentina following the signing of a distribution
agreement with Argent C. Comercio Internacional S.A.                            

 BioChem has a new vaccine production center in Ste-Foy in the Quebec City
area. This center has an overall area of approximately 118,000 square feet and  
houses production, quality-control laboratories and warehousing as well as      
administrative offices. Commercial vaccine production in Ste-Foy started in     
1998.                                                                           

 BioChem recently initiated vaccine development operations in the US. This
development unit was created in order to develop BioChem's current and future   
vaccine pipeline. It began operations in October 1998 in Northborough,          
Massachusetts, in a 62,000-square-foot facility. The facility houses process    
research and development, analytical research and development, a cGMP Pilot     
Plant for the preparation of clinical lots, clinical development, regulatory    
affairs, project planning and management, and administration. The launch of     
these operations is part of BioChem's overall strategy to conduct downstream    
development activities of its products and to increase BioChem's involvement and
presence in key markets, such as the US. It also should be noted that this      
facility is capable of undertaking the full development of any biological, e.g.,
monoclonal antibodies.                                                          

    BioChem's vaccine development facility in Northborough, Massachusetts became
fully operational in 1999. The first vaccine candidate developed at this        
location is designed to protect against bacterial meningitis caused by N.       
MENINGITIDIS. This vaccine candidate, which is in Phase I clinical trials, is   
also the first vaccine to emerge from BioChem's recombinant protein vaccine     
discovery program. The second vaccine candidate coming from this program is the 
S. PNEUMONIAE vaccine, which is in pre-clinical development. These vaccine      
candidates are part of BioChem's novel recombinant protein-based vaccine        
program, the research for which is being conducted in collaboration with the    
Laval University Hospital Research Center (CHUL). Future candidates would emerge
for Group B Streptococcus, non-typeable H. INFLUENZAE, M. CATARRHALIS, and Group
A Streptococcus.                                                                

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The following table presents the pipeline of BioChem vaccine products:  

                                                        [Enlarge/Download Table]

                             INDICATION/POTENTIAL            DEVELOPMENT                COMMERCIAL        
         PRODUCT                 APPLICATIONS                  STATUS*                    RIGHTS          
-------------------------  -------------------------  -------------------------  -------------------------
                                                                                                          
Fluviral S/F               Influenza                  On the market              BioChem                  

Injectable influenza       Influenza                  Phase I/II                 BioChem/GlaxoSmithKline  
  vaccine derived from                                                                                    
  cell culture                                                                                            

Nasal influenza vaccine    Influenza                  Phase I                    BioChem/GlaxoSmithKline  
  derived from cell                                                                                       
  culture                                                                                                 

NEISSERIA MENINGITIDIS     Meningitis, septicemia     Phase I                    BioChem                  
  vaccine                                                                                                 

STREPTOCOCCUS PNEUMONIAE   Pneumonia, meningitis,     Pre-clinical development   BioChem                  
  vaccine                  otitis media                                                                   

PSEUDOMONAS AERUGINOSA     Bacteremia, opportunistic  Pre-clinical development   BioChem                  
  vaccine                                                                                                 

Group B Streptococcus      Neonatal sepsis,           Research                   BioChem                  
  (S. AGALACTIAE) vaccine  meningitis                                                                     

NON-TYPEABLE HAEMOPHILUS   Acute respiratory          Research                   BioChem                  
  INFLUENZAE vaccine       infections,                                                                    
                           chronic bronchitis,                                                            
                           otitis media                                                                   

MORAXELLA CATARRHALIS      Acute respiratory          Research                   BioChem                  
  vaccine                  infections,                                                                    
                           otitis media                                                                   

Group A Streptococcus      Pharyngitis, pneumonia,    Research                   BioChem                  
  (S. PYOGENES) vaccine    pyoderma, cellulitis                                                           

--------------------------                                                      

*   Indicates product development status. Please see the footnote of the table  
on therapeutics pipeline for further explanation.                       

DEVELOPMENT PROJECTS                                                    

INJECTABLE AND NASAL CELL CULTURE-BASED INFLUENZA VACCINES              

BioChem has developed a new cell culture-based influenza vaccine using a
novel proprietary cell line and high-cell-density microcarrier technology.      
BioChem believes that this manufacturing technology will enable a more          
profitable and productive process and better flexibility in the case of         
increased demand for an influenza vaccine, which would be required during a     
pandemic. BioChem completed a Phase I clinical trial in April 1997 in Canada of 
a vaccine produced with the cell-culture process. The results of this trial     
showed that the safety and immunogenicity of the new vaccine were equivalent to 
those of the conventional egg-derived vaccine. BioChem began a Phase II clinical
trial program in Canada in November 1997 that included three trials with 1,000  
volunteers. The objective of these trials was to compare the immunogenicity and 
safety of the new vaccine with BioChem's commercially available egg-derived     
vaccine in three patient populations: young adults, elderly, and children. The  
results of these studies demonstrated in all three populations that this novel  
vaccine was as safe and as immunogenic as the conventional vaccine for all three
viral strains.                                                                  

   BioChem and GlaxoSmithKline finalized in December 1998 an alliance covering
BioChem's cell culture technology for influenza vaccine and nasal delivery      
technologies, including one named SMBV from Biovector Therapeutics S.A. BioChem 
and GlaxoSmithKline are developing two technologies: a new way of producing the 
vaccine antigen using cell culture and an intranasal delivery of influenza      
vaccine technology using Biovector's SMBV and/or GlaxoSmithKline nasal          
technologies. The technologies were transferred from BioChem to GlaxoSmithKline 
during 1999. Under the terms of this agreement, BioChem and GlaxoSmithKline will
co-operate in marketing the products in the United States, after a period of    
joint development by both parties. GlaxoSmithKline holds exclusive marketing    

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rights in Europe and in the rest of the world. Furthermore, GlaxoSmithKline will
manufacture products that are intended for various global markets, except       
Canada. Proceeds from the sale of the vaccines in the United States and in the  
rest of the world, excluding Canada, will be allocated among the two partners   
according to a predetermined formula. In Canada, BioChem will maintain exclusive
rights to these vaccines, including production and marketing rights. Under the  
agreement, GlaxoSmithKline has made initial payments to BioChem and future      
milestone payments are scheduled as the products are developed. Once approved,  
this new cell-culture manufacturing technology should allow BioChem to produce  
the vaccines more rapidly and in the event of a pandemic, to manufacture the    
vaccines in greater volume with less lead time. If one of the nasal delivery    
technologies proves successful, it should eliminate the discomfort associated   
with injectable vaccines and confer mucosal immunity in addition to systemic    
immunity. GlaxoSmithKline conducts all technical and clinical development.      
GlaxoSmithKline completed a further Phase I trial with SMBV in early 2000,      
following which GlaxoSmithKline advised BioChem of its intent not to pursue the 
development of the Biovector technology but to rather pursue the development of 
GlaxoSmithKline nasal technology. GlaxoSmithKline is conducting additional      
technical and clinical development.                                             

RECOMBINANT PROTEIN BACTERIAL VACCINES                                  

 Effective vaccines stimulate protective immunity. Vaccines may consist of
whole viruses or bacteria, of specific antigens that may be formulated with an  
adjuvant or delivery system (agents added to enhance immunogenicity), or of     
nucleic acid encoding the vaccine antigen. Through a research collaboration with
the Vaccine Research Unit of the Laval University Hospital Research Center,     
BioChem conducts research and development of recombinant protein vaccines       
against numerous bacterial infections for which no vaccines are currently       
available or for which vaccines exist but with less-than-optimal efficacy or    
market attractiveness. BioChem is focusing its initial efforts on the           
development of candidate vaccines against diseases caused by NEISSERIA          
MENINGITIDIS, STREPTOCOCCUS PNEUMONIAE and PSEUDOMONAS AERUGINOSA and also will 
be developing vaccines against infections caused by Group B Streptococcus (S.   
AGALACTIAE), non-typeable HAEMOPHILUS INFLUENZAE, MORAXELLA CATARRHALIS and     
Group A Streptococcus (S. PYOGENES).                                            

  Many of the target bacteria for which BioChem is researching or developing
vaccines are encapsulated with polysaccharide. Capsular polysaccharides usually 
are effective vaccine antigens. However, polysaccharide vaccines suffer from the
shortcomings that they stimulate only short-term immunity and not immune memory 
and are poorly immunogenic in young children. Furthermore, there is significant 
antigenic variation among the capsular polysaccharides of different strains of  
the same bacteria. Consequently, numerous polysaccharide antigens must be       
administered to protect against multiple strains of an encapsulated bacterium.  
To overcome some of these limitations, polysaccharide conjugate vaccines have   
been and are being developed. Two such vaccines to protect against              
H. INFLUENZAE TYPE B (Hib) and S. PNEUMONIAE are marketed. Conjugate vaccines   
consist of polysaccharides chemically coupled with a protein carrier. Because of
the carrier, conjugate vaccines induce immunological memory. However, because of
the limited number of conjugate vaccines that can be combined in a single dose, 
current conjugate vaccines provide protection against only a limited number of  
strains of a bacterium. Due to the complexity of the process, the S. PNEUMONIAE 
(pneumococcal) conjugate vaccine is relatively expensive and challenging to     
manufacture and test.                                                           

   BioChem has adopted the strategy of identifying specific bacterial proteins
for each pathogen that are able to elicit a broad immune response against all   
strains of the pathogen and that are immunogenic in young children while        
eliciting immune memory. Furthermore, such vaccines should be easier and less   
expensive to manufacture and could be combined more easily with vaccines that   
protect                                                                         

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against other infectious diseases. BioChem is in development with recombinant   
protein vaccines against the following three bacterial infections:              

A) NEISSERIA MENINGITIDIS                                               

 N. MENINGITIDIS causes over 300,000 cases of endemic and epidemic disease
worldwide, mostly meningitis and septicemia. With the availability of Hib and   
pneumococcal conjugate vaccines, N. MENINGITIDIS is becoming the most common    
cause of bacterial meningitis in the USA, affecting approximately 3,000 people  
each year. The case-fatality rate is approximately 10% for meningitis and 20%   
for septicemia, despite antibiotic therapy. The incidence of endemic            
meningococcal meningitis is highest among children aged 6-12 months and then    
steadily declines with age but is the most common and dreaded form of meningitis
among young adults. Serogroup B, for which no vaccine exists, accounts for      
approximately 30-40% of all cases of infection by N. MENINGITIDIS. While        
Serogroup A causes only a small portion of endemic disease in developed         
countries, it is the most common cause of epidemics in developing countries. The
current polysaccharide vaccine has antigens for only four (A, C, W135 and Y) of 
the 12 N. MENINGITIDIS serogroups (based on capsular polysaccharides). Other    
groups are developing polysaccharide conjugate vaccines and protein-based       
vaccines. There are Serogroup C conjugate vaccines licensed in the UK.          

The protein discovered by BioChem appears to hold potential for the     
development of a vaccine against all N. MENINGITIDIS strains, including         
Serogroup B. This protein is present in all meningococcal isolates and is       
exposed at the surface of intact meningococcal bacteria, where it is accessible 
to antibodies. Immunization of mice with the purified recombinant protein       
confers protection against lethal N. MENINGITIDIS infection. The serum          
antibodies obtained from the immunized mice kill N. MENINGITIDIS cells. This    
type of bactericidal activity is generally recognized as being indicative of    
clinical protection against N. MENINGITIDIS infection. BioChem has developed a  
clinical-trial-scale manufacturing process and conducted a Phase I clinical     
trial in Canada from November 1999 into 2000. The data from this clinical trial 
demonstrated that the vaccine was generally well tolerated and immunogenic and  
was able to elicit serum bactericidal antibodies. Additional clinical studies   
will be performed on an improved formulation of the vaccine.                    

B) STREPTOCOCCUS PNEUMONIAE                                             

  S. PNEUMONIAE infections are among the leading causes worldwide of illness
and death in young children, persons with underlying debilitating medical       
conditions and the elderly. S PNEUMONIAE infections have accounted annually for 
3,000-5,000 cases of meningitis, 200,000-600,000 cases of pneumonia and         
7,000,000-10,000,000 cases of acute otitis media in the US alone. Case fatality 
rates vary by age and the underlying illness of the patient. According to the   
CDC, the case fatality rates for some immunocompromised and other high-risk     
patients have been reported to be higher than 55% for meningitis and 40% for    
pneumonia, despite appropriate antibiotic therapy. In children, S. PNEUMONIAE   
causes 30-50% of all cases of otitis media. Increased resistance to penicillin  
and other antibiotics has spread rapidly, such that there is an increased need  
for effective pneumococcal vaccines. S. PNEUMONIAE strains are divided into at  
least 90 serologically capsular polysaccharide types, but a limited number of   
these cause most disease. Variations in the frequency of the capsular types     
occur over time, geographic areas, and age groups. A polysaccharide vaccine     
against the 23 most common serotypes has been available since the early 1980s.  
It is no more than 60% effective in preventing pneumococcal meningitis in adults
but is poorly effective in infants under two years of age and in preventing     
pneumonia in the elderly; it is not currently used to prevent otitis media. A   
heptavalent conjugate vaccine composed of seven polysaccharides coupled to a    
protein carrier was approved by the FDA in February 2000 for immunization of    
infants under age two. However, this product would cover only 60-75% of disease-
causing serotypes and is technically complex to produce, such that it may be    
difficult to combine with other vaccines. Moreover, it is not indicated for use 
in adults, and its effectiveness in preventing ear                              

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infections has not been documented by the FDA. Other groups are developing      
polysaccharide conjugate vaccines and protein-based vaccines.                   

   BioChem has discovered proteins that appear to hold great potential for the
development of a new vaccine against all serotypes of pneumococcal infections.  
These proteins are highly immunogenic in mice. Immunized mice were protected    
against a lethal challenge in both bacteremia and pneumonia models of infection.
Sera from immunized rabbits and monkeys also can protect mice against lethal    
challenge. These proteins are conserved antigenically among pneumococcal        
isolates, exposed at the pneumococcal surface and accessible to protective      
antibodies. Therefore, BioChem believes that these proteins have the necessary  
characteristics to be considered potential candidates for the development of a  
broad-range vaccine for preventing pneumococcal infections.                     

C) PSEUDOMONAS AERUGINOSA                                               

P. AERUGINOSA are ubiquitous bacteria that cause primarily opportunistic
infections in hosts who are compromised in their health status. The bacteria are
prevalent in moist areas in hospital settings. Infection can lead to serious and
sometimes life-threatening diseases in immunocompromised people. P. AERUGINOSA  
infection may be manifest in a wide range of clinical diseases, including       
bacteremia and diseases of the bone and joint, CNS, eye and ear,                
gastrointestinal, respiratory, skin, and urinary tract. The prevalence of       
antibiotic resistance is high and increasing. Other groups are developing       
polysaccharide conjugate vaccines and protein-based vaccines.                   

BioChem initiated a collaboration with Cytovax Biotechnologies Inc.     
("Cytovax"). Scientists at the University of Alberta had been conducting        
research on the pili of P. AERUGINOSA, which are appendages responsible for     
bacterial attachment to cells. While pili can elicit protective immunity against
experimental infection, the protection is very highly type-specific, which would
mean that a pilin vaccin would have to be highly multivalent, hence impractical 
to develop. These scientists identified sequences at the tip of the pili that   
were less variable and could elicit protective immune responses. Based on the   
pili tip sequences, Cytovax has developed a candidate vaccine that would consist
of 2-3 peptides, each conjugated to a carrier protein to enhance their          
immunogenicity. Cytovax and BioChem are collaborating in research, analytical,  
process, clinical, and regulatory issues. The vaccine program is in pre-clinical
development.                                                                    

RESEARCH PROJECTS                                                       

BioChem also is conducting vaccine research programs to develop vaccines
against the following four bacterial infections:                                

  A) Group B Streptococcus ("GBS") (STREPTOCOCCUS AGALACTIAE) infections are
the leading cause of life-threatening bacterial infections such as pneumonia,   
sepsis and meningitis during the neonatal period. In the USA, there are over    
3,000 cases annually of invasive GBS infections in newborns, with a mortality   
rate approximately 5%. Many infants that survive meningitis may suffer from     
neurological sequelae. In addition, GBS has emerged as an important cause of    
morbidity and mortality among adults, especially the elderly or patients with   
chronic underlying disease. GBS is classified into nine serotypes based on their
capsular polysaccharide antigenicity. Other groups are developing polysaccharide
conjugate vaccines and protein-based vaccines. BioChem has identified several   
GBS membrane proteins that may be promising vaccine candidates. Their potential 
will be validated through studies of their antigenic conservation and expression
across a broad range of strains, cell surface accessibility, and ability to     
elicit protective immunity in mouse models of disease.                          

   B) Non-typeable HAEMOPHILUS INFUENZAE ("NTHI") is nonencapsulated, relative
to its encapsulated forms that have six antigenically distinct capsular types (A
to F). The unencapsulated form is responsible for acute respiratory infections, 
chronic bronchitis, otitis media (25-30% of all cases), bacteremia and          
meningitis. NTHI is among the five most common causes of community-acquired     
pneumonia (5-15% of                                                             

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the 500,000 hospital admissions annually in the United States). There are       
approximately 4,000 cases annually of invasive NTHI disease in adults, including
bacteremic pneumonia, obstetric infections, epiglotitis, meningitis and         
tracheobronchitis. Hib conjugate vaccines are ineffective against NTHI diseases.
Other groups are developing protein-based vaccines. BioChem has identified      
several NTHI outer membrane proteins that may be promising vaccine candidates.  
Their potential is being validated through studies of their antigenic           
conservation and expression across a broad range of strains, cell-surface       
accessibility, and ability to elicit protective immunity in mouse models of     
disease.                                                                        

    C) MORAXELLA CATARRHALIS colonizes primarily the upper respiratory tract. It
is the third most common cause (15-20% of cases) of otitis media, after S.      
PNEUMONIAE and NTHI. It also is an important cause of sinusitis, chronic        
bronchitis, pneumonia, and chronic obstructive pulmonary disease. It rarely     
causes invasive disease. A combination vaccine of S. PNEUMONIAE, NTHI, and M.   
CATARRHALIS would cover approximately 75-90% of otitis media, a disease which   
has an associated annual health-care burden of approximately $4 billion in the  
USA alone. Other groups are developing protein based vaccines. BioChem has      
identified several M. CATARRHALIS outer membrane proteins that may be promising 
vaccine candidates. Their potential is being validated through studies of their 
antigenic conservation and expression across a broad range of strains,          
cell-surface accessibility, and ability to elicit protective immunity in mouse  
models of disease.                                                              

    D) Group A Streptococcus ("GAS") (STREPTOCOCCUS PYOGENES) is associated with
a diverse range of clinical syndromes. GAS is a primary invader of the throat   
and lower respiratory tract and a secondary invader of the skin and endometrium.
The most common GAS disease are pharyngitis, pneumonia, pyoderma, and           
cellulitis. Less commonly, infection can proceed to scarlet fever and           
toxic-shock syndrome. Particularly dreaded among its sequelae are acute         
rheumatic fever, acute glomerulonephritis, and necrotizing fascitis. Thus, a    
vaccine would be very useful in preventing a range of diseases. Other groups are
developing protein-based vaccines. BioChem has identified several GAS membrane  
proteins that may be promising vaccine candidates. Their potential is being     
validated through studies of their antigenic conservation and expression across 
a broad range of strains, cell-surface accessibility, and ability to elicit     
protective immunity in mouse models of disease.                                 

COMPUTER-ASSISTED DETECTION PRODUCTS                                            

    In July 1998, BioChem began investing in a new technology platform developed
by Qualia Computing, Inc. ("Qualia") a privately held US medical computer       
science company. BioChem obtained exclusive rights to commercialize any life    
science product developed from this platform. The Qualia technology platform is 
a cognitive system that utilizes artificial intelligence, artificial neural     
networks and advanced information processing technologies to solve complex      
problems in the life science area. BioChem formed a new company, CADx Medical   
Systems Inc. ("CADx") in July of 1999 to develop the technology into products   
and to commercialize the products on a worldwide basis. CADx will develop       
products that focus on the clinical and industrial applications of this         
technology. The first commercial product is Second Look. Commercialization of   
Second Look started in mid-1999.                                                

SECOND LOOK                                                             

Second Look is a computer-assisted detection system for mammography     
developed under a license and development agreement with Qualia. Second Look is 
a system which, in its first application, was designed by Qualia engineers to   
assist radiologists in the earlier diagnosis of breast cancer by enhancing their
ability to interpret mammograms. Early stage detection has been shown to        
dramatically improve survival rates and reduce cost of treatment. The Second    
Look system digitizes the x-ray films and then applies advanced image processing
and neural network software in a manner that directs radiologists to anomalies  
such as microcalcifications and atypical masses, early indicators of disease    
that might otherwise go undetected on visual inspection alone.                  

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  The product is currently completing clinical trials in the USA to meet FDA
requirements. The pre-market approval (PMA) submission is being submitted in    
three components or modules. Module I (manufacturing) and Module II (software)  
have been submitted and accepted by the FDA. Module III (clinical studies) is   
being assembled. Based on receiving FDA approval, BioChem expects to market the 
product in the US in 2001. BioChem began marketing outside of the US in         
June 2000.                                                                      

The next generation of this technology will be a software product that  
performs the same functions directly with digital mammography images.           

SECOND LOOK CARDIO                                                      

    Cardiovascular disease represents a significant business opportunity with an
estimated cost relating to cardiovascular disease of over $95 billion in the USA
alone. BioChem's cognitive systems technology should enhance the currently      
subjective interpretation of imaging and non-imaging data providing nuclear     
cardiologist with a second look. Development of concept and initiation of       
requirements documents and prototype work will be the primary focus in 2001.    

COMPUTER AIDED DRUG DESIGN                                              

There are significant opportunities for companies that can improve the  
efficiency of drug and vaccine discovery utilizing cognitive systems. The       
efficiency of utilizing "in silico" techniques will prove to be time and cost   
effective. Early prototype work has shown BioChem's cognitive platform can be   
readily applied to drug design and lead optimization. The successful early      
prototypes are being further refined and challenged with small data sets.       
Concepts and requirements documents are currently under development. The        
critical path provides for completing prototypes for potency and selectivity in 
2001. These are the first two components of a computer aided drug optimization  
tool.                                                                           

INVESTMENTS                                                                     

NAVA                                                                    

  As of December 31, 1999, BioChem held approximately 32% of the outstanding
common shares and 50% of the outstanding convertible preferred shares of North  
American Vaccine, Inc. ("NAVA"), a publicly traded biotechnology company listed 
on the American Stock Exchange and engaged in the research, development and     
production of vaccines for the prevention of infectious diseases in children and
adults. BioChem shared control of NAVA pursuant to the terms of a shareholders' 
agreement.                                                                      

On November 18, 1999, BioChem announced that it had entered into an     
agreement with Baxter International Inc. ("Baxter") to vote in favor of the     
acquisition by Baxter of all of the outstanding shares of NAVA. On April 17,    
2000, BioChem entered into amending agreements with Baxter and NAVA, among      
others, to allow for a later than expected closing date, to provide for an      
adjustment in the purchase price and to secure financing of NAVA's working      
capital requirements until closing.                                             

Pursuant to the amending agreements, BioChem made a $40 million working 
capital facility available to NAVA and the offer was changed to $6.73 per NAVA  
share from $7.00 in the original agreement.                                     

 On June 27, 2000, BioChem announced that it had closed the transaction to
sell to Baxter all of its shares of North American Vaccine, Inc. The gain on the
sale was CAN$137 million, with cash proceeds of CAN$167 million.                

GENECHEM                                                                

 In March 1997, BioChem agreed to make an investment of CAN $30 million in
GeneChem Technologies Venture Fund L.P., a venture capital fund sponsored by    
BioChem's newly created                                                         

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subsidiary, GeneChem Financial Corporation. This CAN $100 million fund invests  
in advanced academic research projects and early-stage private or public        
companies in the area of genomics and related technologies for human            
application. BioChem's partners in this fund are a select group of financial    
investors. As of December 31, 2000, CAN $21 million had been invested in        
GeneChem Technologies Venture Fund, L.P. by BioChem.                            

On September 14, 2000, BioChem entered into an agreement to invest CAN  
$15 million in GeneChem Therapeutic Venture Fund L.P., a new CAN $136.5 million 
capital fund. GeneChem Therapeutic Venture Fund L.P. will invest in genomics    
companies focussing on cancer and infectious diseases. The general partner and  
manager of GeneChem Technologies Venture Fund L.P. and GeneChem Therapeutics    
Venture Fund L.P. are GeneChem Enterprise Inc. and GeneChem Management Inc., two
indirect subsidiaries of BioChem.                                               

SIGNIFICANT AGREEMENTS                                                          

BioChem develops products both independently and in collaboration with  
established pharmaceutical companies or other suitable partners. Collaborative  
partners may provide financial resources, research and development and          
manufacturing capabilities, and sales and marketing infrastructure, to aid in   
the commercialization of BioChem's potential products. Presented below is a     
brief description of BioChem's most significant collaborative agreements.       

GLAXOSMITHKLINE (LAMIVUDINE)                                            

   By an agreement dated January 31, 1990 and amended as of November 20, 1995,
BioChem licensed to GlaxoSmithKline, the worldwide rights, with the exception of
Canada, to develop, manufacture and sell the nucleoside analog lamivudine       
marketed as 3TC and Zeffix (3TC and Zeffix are referred to herein as            
"lamivudine"). A partnership exists between GlaxoSmithKline's Canadian          
subsidiary, GlaxoSmithKline Inc., and BioChem to supply, market and sell        
lamivudine in Canada. GlaxoSmithKline has agreed to manufacture all the required
lamivudine to be supplied in Canada by the partnership.                         

In consideration for the grant of such rights, GlaxoSmithKline agreed to
undertake and fund the development of lamivudine and to pay BioChem a royalty on
sales of lamivudine. In addition, it was agreed that milestone payments would be
made to BioChem in installments as GlaxoSmithKline progressed in the development
and approval process. The amount of relevant patent prosecution costs and 50% of
milestone payments are deductible from any royalties payable to BioChem by      
GlaxoSmithKline. The milestone payments and its related deductions from         
royalties have been completed. The amount of certain contractual costs and      
certain litigation costs may be deducted from royalties payable to BioChem by   
GlaxoSmithKline. If GlaxoSmithKline terminates the license agreements upon      
certain events of default by BioChem, GlaxoSmithKline will retain a             
non-exclusive, paid-up license from BioChem to make, have made, use and sell    
lamivudine worldwide.                                                           

GLAXOSMITHKLINE (VACCINES)                                              

   On December 3, 1998, BioChem concluded an alliance with GlaxoSmithKline for
the worldwide development, manufacturing and marketing of BioChem's cell-culture
influenza vaccines. Under the terms of the agreement, after a period of joint   
development funded by both parties, BioChem and GlaxoSmithKline will collaborate
to market the products in the United States, while in Europe and the rest of the
world, GlaxoSmithKline will be exclusively responsible for marketing. In        
addition, GlaxoSmithKline will be responsible for manufacturing for markets     
throughout the world except Canada. BioChem will benefit from the sales of the  
vaccines in the United States and the rest of the world, excluding Canada, in   
accordance with a pre-determined formula. In Canada, BioChem will               

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retain all exclusive rights to the vaccines, including production and marketing.
The agreement also calls for BioChem to receive up-front and milestone payments 
from GlaxoSmithKline.                                                           

ASTRAZENECA PLC                                                         

On August 31, 1992, AstraZeneca plc ("Astra") and BioChem entered into a
series of agreements (the "Astra Agreements") providing for the research        
development and commercialization of a new class of analgesic compounds for the 
control of pain. Pursuant to the Astra Agreements, BioChem transferred and      
assigned its rights to the relevant proprietary technology to Astra and retained
a right to re-acquire the Canadian rights in exchange for the payment of        
royalties to Astra. In addition, a collaborative research agreement and a supply
agreement provide for Astra and BioChem to jointly research the field of opioid 
peptides. Astra will retain commercial rights worldwide except for Canada. In   
consideration for the grant of such rights to Astra, Astra made an upfront      
payment, agreed to fund research and development, to make milestone payments to 
BioChem and to pay BioChem a royalty on future product sales. Astra may, in its 
sole discretion, terminate the Astra Agreements. If Astra discontinues          
development of products or chooses not to develop products under the Astra      
agreements or terminates the Astra agreements, then BioChem has the option to   
reacquire the relevant technology and intellectual property rights subject to   
certain royalty obligations to Astra.                                           

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SHIRE AFTER THE MERGER

OVERVIEW                                                                

   Following the merger, the Enlarged Group will be one of the world's leading
global specialty pharmaceutical companies with four areas of focus: central     
nervous system disorders, oncology/ haematology, anti-virals and vaccines. The  
Enlarged Group will refer to itself as "specialty" because its principal        
products tend to be prescribed by specialists as opposed to primary care        
physicians. Accordingly, a comparatively small sales force such as Shire's can  
promote specialty products effectively while it could not be expected to achieve
the necessary coverage of primary care physicians.                              

 The Enlarged Group's principal products will include: in the US, Adderall
for the treatment of Attention Deficit Hyperactivity Disorder, Agrylin for the  
treatment of elevated blood platelets, Pentasa for the treatment of ulcerative  
colitis, Carbatrol for the treatment of epilepsy, ProAmatine for the treatment  
of orthostatic hypotension and PACIS for the treatment of superficial bladder   
cancer; in the UK, the Calcichew range, used primarily as adjuncts in the       
treatment of osteoporosis, and Reminyl for the treatment of Alzheimer's disease;
and, in Canada, ProAmatine, 3TC, Combivir and Zeffix, marketed in a partnership 
with GlaxoSmithKline, Second Look, a product in the early stages of marketing   
outside of the US, where the Enlarged Group hopes to be authorised to market in 
2001, and Fluviral S/F, a vaccine for the prevention of influenza. In addition, 
the Enlarged Group will have a number of products in late stage development     
including Dirame and Frakefamide for the treatment of moderate to severe pain,  
Foznol for the treatment of high blood phosphate levels associated with kidney  
failure, Troxatyl for the treatment of leukaemia and solid tumors, SPD421, an   
anti-epileptic in-licensed from D-Pharm [and SPD420, a potential treatment for  
ADHD in-licensed from Cortex].                                                  

   After the merger, the Enlarged Group's revenues will continue to be derived
from three sources: sales of products by sales and marketing operations         
principally in the US, the UK and Canada, royalties from sales of Reminyl,      
Zeffix and 3TC/Epivir and licensing and development fees. For the period ended  
December 31, 1999 Shire had revenues of $401.5 million and net income (before an
APB 25 stock option charge of $11.9 million and exceptional costs of            
$135.2 million) of $52.2 million and BioChem had revenues of $135.7 million and 
net income from continuing operations of $59.7 million.                         

STRATEGY AND APPROACH                                                   

 The Enlarged Group's strategy is to develop products and, where they fall
within the therapeutic focus, to market them through sales organisations in the 
major markets of the world. The key elements of the operating strategy are      
described below:                                                                

MARKET PROPRIETARY PRODUCTS THROUGH THE ENLARGED GROUP'S OWN SALES FORCE        

    The Enlarged Group believes that higher financial returns can be achieved by
marketing products directly, as opposed to receiving royalties on licensees'    
sales. The merger enhances the sales and marketing capability in Canada. The    
Enlarged Group intends to continue to expand the sales and marketing capability,
as opportunities arise, particularly in the US, major European markets, Japan   
and through distributors outside of the significant pharmaceutical markets.     

MANAGE DEVELOPMENT RISK                                                         

   Recognising the inherent risks of failure in drug development, both BioChem
and Shire have historically sought to manage development risk by maintaining a  
broad and balanced development portfolio. Shire has also sought to selectively  
leverage relationships with collaborative parties. BioChem, through its         
collaborations with academic institutions and biotech companies and investment  
in a leveraged network of research companies, has access to projects and        
technologies. As a combined                                                     

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company it is anticipated to continue reliance on the broad network of contacts 
to identify product candidates which can be developed either internally or      
through collaborative partnerships.                                             

FOCUS ON THE DEVELOPMENT OF INNOVATIVE PRODUCTS                                 

BioChem's lead optimisation and chemistry expertise has led to the      
development and commercialisation of innovative products. Shire has also sought 
to identify promising product candidates already under development or exploit a 
number of proprietary drug delivery technologies to develop products. In        
addition to developing proprietary pipeline products, the Enlarged Group's      
principal objective will be to concentrate operations on licensing, acquiring,  
developing, marketing and selling proven products and technologies. Both        
companies have historically benefited from proven products that generate cash   
flow, which contributes partial financial support to drug development activities
and provides enhanced product sales opportunities for the sales force.          

SALES AND MARKETING                                                     

 Following the merger, the Enlarged Group will use its sales and marketing
infrastructure to sell and market most of its licensed and internally developed 
products. The combined sales and marketing operations of the Enlarged Group in  
the US, the UK, Canada and Europe will consist of   -  ,   -  ,   -  and   -    
sales representatives, respectively. Following the merger, this expanded sales  
force will have a broader portfolio of products with opportunities to benefit   
from increased coverage.                                                        

COMBINED MARKETED PRODUCTS                                              

The table below lists the key currently marketed products of Shire and  
BioChem by therapeutic areas, indicating the owner or licensor of the product   
and who is marketing the product in which territory.                            

                                                        [Enlarge/Download Table]

                                                                MARKETED BY/         
PRODUCTS               PRINCIPAL INDICATION(S)  OWNER/LICENSOR  RELEVANT TERRITORY   
--------               -----------------------  --------------  ------------------   
                                                                                     
TREATMENTS FOR CNS DISORDERS                                                         

Adderall               ADHD                     Shire           Shire/US             
DextroStat             ADHD                     Shire           Shire/US             
Carbatrol              Epilepsy                 Shire           Shire/US             
Reminyl                Alzheimer's disease      Shire           Shire/UK (Co-        
                                                                promotion)           

TREATMENTS FOR METABOLIC/BONE DISEASES                                               

Calcichew range        Osteoporosis adjunct     Nycomed         Shire/UK and Ireland 

TREATMENTS FOR ONCOLOGY/HAEMATOLOGY                                                  

Agrylin                Elevated blood           Shire           Shire/US and Canada  
                       platelets                                                     
ProAmatine             Orthostatic hypotension  Nycomed         Shire/US and Canada  
PACIS                  Bladder cancer           BioChem         Urocor/US and Paladin
                                                                Labs/Canada          

ANTIVIRALS                                                                           

3TC/Epivir/Combivir/   HIV/AIDS                 BioChem         GlaxoSmithKline/     
  Trizivir                                                      Worldwide, except    
                                                                Canada               

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                                                                  MARKETED BY/       
PRODUCTS               PRINCIPAL INDICATION(S)  OWNER/LICENSOR    RELEVANT TERRITORY 
--------               -----------------------  --------------    ------------------ 
                                                                                     
3TC/Combivir           HIV/AIDS                 BioChem           BioChem and Glaxo- 
                                                                  SmithKline co-     
                                                                  marketed in Canada 
Zeffix/Epivir-HBV/     Hepatitis B              BioChem           GlaxoSmithKline/   
  Heptovir/ Heptodin                                              World-wide, except 
                                                                  Canada             
Heptovir               Hepatitis B              BioChem           BioChem and Glaxo- 
                                                                  SmithKline co-     
                                                                  marketed in Canada 

VACCINES                                                                             

Fluviral S/F           Influenza                BioChem           BioChem/Canada     

TREATMENTS FOR GASTROINTESTINAL DISORDERS                                            

Pentasa                Ulcerative colitis       Ferring           Shire/US           
Colazide               Ulcerative colitis       Shire             Shire/UK, EU and   
                                                                  Southeast Asia     
Colace/Peri-Colace     Constipation             Shire             Shire/US and Canada

COMPUTER ASSISTED DETECTION PRODUCTS                                                 

Second Look            Breast Cancer Diagnosis  Qualia Computing  BioChem/Worldwide, 
                                                                  except US          

PRODUCTS UNDER DEVELOPMENT                                              

After the merger, the Enlarged Group will seek to maintain a broad and  
balanced approach to the development of new products by, among other things,    
leveraging third-party research and development expertise, exploiting investment
in research collaborations and licensing compounds from third parties and       
developing them through the clinical phase with a view to marketing them through
the Enlarged Group's sales and marketing organisation or out-licensing if       
appropriate. On a combined basis BioChem and Shire spent approximately          
$138 million on research and development in the year ended December 31, 1999,   
which represents 27% of combined revenues.                                      

The table below lists the key products under development by Shire and   
BioChem by therapeutic area, including their development status and their       
territorial rights. Where either company has secured a licensee for a product,  
this fact is also indicated.                                                    

                                                        [Enlarge/Download Table]

PRODUCT(S)             PRINCIPAL INDICATION(S)  STATUS              TERRITORIAL RIGHTS  
----------             -----------------------  ------              ------------------  
                                                                                        
TREATMENTS FOR CNS DISORDERS                                                            

Reminyl                Alzheimer's disease      In registration or  Global              
  (galantamine)(1)                              marketed                                
SLI381                 ADHD                     In registration     Global              
Dirame                 Moderate/severe pain     Phase III           Global              
Frakefamide(2)         Moderate/severe pain     Phase II            Global              
SPD417                 Bi-polar disorder        Phase III           Global              
SPD503                 ADHD                     Phase I             Global              
SPD418                 Epilepsy                 Phase I             Global              
SPD502                 Stroke                   Phase I             Global excl. Nordic 
                                                                    and Baltic countries
SPD451                 Parkinsons Disease       Pre-clinical        Global              

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PRODUCT(S)             PRINCIPAL INDICATION(S)  STATUS           TERRITORIAL RIGHTS   
----------             -----------------------  ------           ------------------   
                                                                                      
TREATMENTS FOR METABOLIC DISEASES                                                     

Foznol                 High blood phosphate     Phase III        Global               
                       levels in patients with                                        
                       kidney failure                                                 

TREATMENTS FOR GASTROENTEROLOGICAL DISORDERS                                          

Pentasa (500 mg)       Ulcerative colitis       Phase II/III     US                   
Emitasol               Nausea and vomiting      Phase II/III     US, Canada           
Balsalazide            Ulcerative colitis       Phase II/III     [Europe], Southeast  
                                                                 Asia                 

TREATMENTS FOR ONCOLOGICAL/HAEMATOLOGICAL                                             
DISEASES                                                                              

Agrylin                Thrombocythemia          In registration  Global               
Troxatyl               Leukaemia and solid      Phase II         Global               
                       tumors                                                         
SPD424                 Prostate cancer          Phase III        North America, Europe

ANTIVIRALS                                                                            

BCH-10618              HIV/AIDS                 Pre-clinical     Global               
BCH-13520              HIV/AIDS                 Pre-clinical     Global               

VACCINES                                                                              

Injectable and nasal   Influenza                Phase I/II       North America        
influenza vaccine                                                                     
derived from cell                                                                     
culture                                                                               
NEISSERIA              Meningitis, septicemia   Phase I          Global               
MENINGITIDIS vaccine                                                                  
PSEUDOMONAS            Bacteremia,              Pre-clinical     Global               
AERUGINOSA vaccine     opportunistic                                                  

------------------------                                                        

(1) The licensee is Janssen.                                                    

(2) The licensee is AstraZeneca (except Canada).                                

DRUG DELIVERY TECHNOLOGIES                                              

    The Enlarged Group will have several platforms of drug delivery technologies
that can be applied to drugs in order to enhance their effectiveness or their   
convenience to patients in terms of dosage regimen. Generally, this involves    
re-formulating the drug into a new delivery system designed either to enhance   
the absorption of the drug into the blood stream or, alternatively, to delay    
absorption of the drug into the bloodstream, thereby requiring the patient to   
take fewer daily doses.                                                         

 The Enlarged Group's portfolio of drug delivery technologies will include
technologies designed to develop oral, controlled release delivery of drugs, a  
technology for rapid absorption through the tissues of the mouth and several    
technologies for predicting and improving bioavailability of drugs. It is       
intended to out-license these technologies to third parties in return for       
development fees, milestone payments and royalties. It is also intended to      
employ these technologies selectively to products being developed internally,   
where it is believed the characteristics of the product can be improved or      
modified to secure a competitive advantage.                                     

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THE EXTRAORDINARY GENERAL MEETING 

DATE, TIME, PLACE AND PURPOSE                                                   

   This Proxy Statement is being furnished to Shire shareholders in connection
with the solicitation of proxies by the Shire board for use at the extraordinary
general meeting scheduled to be held at 35 New Broad Street, London, EC2M ISQ,  
England, on   -  , 2001 at 3:00 p.m., local time, and at any adjournment or     
postponement thereof.                                                           

MATTERS TO BE CONSIDERED AT THE EXTRAORDINARY GENERAL MEETING                   

ORDINARY RESOLUTION                                                             

 At the extraordinary general meeting, Shire shareholders will be asked to
consider and vote on an ordinary resolution to approve the merger, to increase  
the authorised share capital of Shire, to grant authority to Shire's directors  
to allot such capital and to create new special voting shares and to attach     
certain rights and restrictions to those shares.                                

SPECIAL RESOLUTION                                                              

 At the extraordinary general meeting, you will also be asked to approve a
special resolution increasing the Director's power, for a period of 5 years from
the date of the passing of the resolution, to allot securities within the limits
of the authorised share capital for cash free of pre-emption rights up to a     
nominal amount of [  -  ].                                                      

   Under English law, we would typically ask you to take this action at one of
our future general annual meetings. However, as a matter of convenience, you    
will be asked to take this action at our Shareholder's Meeting. This action does
not relate to the merger.                                                       

RECORD DATE; VOTING RIGHTS; VOTING AT THE MEETING                               

  The Shire board has fixed   -  , 2001 as the record date for determination
of Shire shareholders entitled to notice of, and to vote at, the extraordinary  
general meeting. Each holder of record of Shire shares on the record date is    
entitled to cast one vote per share, exercisable in person or by a properly     
executed proxy, on each of the resolutions put to the extraordinary general     
meeting. On the record date, there were   -  Shire shares outstanding and       
entitled to vote which were held by approximately   -  holders of record.       

The presence, in person or by a properly executed proxy, of two or more 
shareholders of Shire entitled to vote at the extraordinary general meeting is  
necessary to constitute a quorum at the extraordinary general meeting. The      
ordinary resolution must be passed by a majority of the votes cast by the       
holders of Shire shares present or represented by proxy at the extraordinary    
general meeting. The special resolution must be passed by a majority of         
three-quarters of the votes cast by the holders of Shire shares present or      
represented by proxy at the extraordinary general meeting. The directors of     
Shire collectively own shares representing approximately   -  per cent of the   
outstanding Shire issued share capital.                                         

VOTING OF PROXIES                                                               

  All Shire shareholders who are entitled to vote and are represented at the
extraordinary general meeting by properly executed proxies deposited with       
Shire's registrars, Lloyds TSB Registrars, The Causeway, Worthing, West Sussex  
BN99 3UH, England, at least 48 hours prior to the extraordinary general meeting 
and not revoked will be voted at the extraordinary general meeting in accordance
with the instructions indicated in the proxy. If no instructions are indicated, 
your proxy may vote or abstain on the resolution at his or her discretion. Under
rules applicable to brokers, a broker is precluded from                         

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exercising voting discretion with respect to the approval of the merger proposal
and thus, absent specific instructions from the beneficial owners of those Shire
shares, is not empowered to vote those Shire shares for or against the merger   
proposal.                                                                       

 Any proxy given pursuant to the solicitation may be revoked by the person
giving it at any time before it is voted. Proxies may be revoked by:            

- depositing at the registered office of Shire, before the taking of the
     vote at the extraordinary general meeting, a written notice of revocation
bearing a later date than the date of proxy or by giving notice of  
revocation in the open meeting;                                     

- submitting a later-dated proxy; or                                    

- attending the extraordinary general meeting and voting in person.     

In order to vote in person at the extraordinary general meeting, Shire  
shareholders must attend the meeting and cast their votes in accordance with the
voting procedures established for such meeting. Attendance at the extraordinary 
general meeting will not in and of itself constitute a revocation of a proxy.   
Any written notice of revocation or subsequent proxy must be sent to: Shire     
Pharmaceuticals Group plc, East Anton, Andover, Hampshire, SP10 5RG, England,   
attention: Company Secretary.                                                   

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THE MERGER

BACKGROUND OF THE MERGER                                                        

Shire is a specialty pharmaceutical company historically focused on four
therapeutic areas: central nervous system disorders, metabolic/bone diseases,   
oncology and gastroenterology.                                                  

    Shire's strategy is to in-license, develop and market therapies in its areas
of strategic focus. This approach is complemented by the advanced drug delivery 
platforms developed by Shire Laboratories which may be used to enhance the      
bioavailability, reduce the side effects or improve the dosage regimen of       
existing marketed compounds. Shire seeks to protect the intellectual property   
upon which it relies through a range of patents and patent applications (both   
its own and that of its licensors).                                             

Historically, the majority of products have been in-licensed and Shire  
continues actively to seek such opportunities. Products currently marketed in   
the US are Adderall and DextroStat for Attention Deficit Hyperactivity Disorder 
(ADHD), Carbatrol, launched in May 1998, for the treatment of epilepsy, Pentasa 
for ulcerative colitis, Agrylin for thrombocythemia and ProAmatine for          
orthostatic hypotension. The key UK market products are the Calcichew range of  
prescription calcium and calcium/vitamin D products used as adjuncts in the     
treatment of osteoporosis. Additionally, Shire launched Reminyl and Colazide in 
the UK in 2000. While Shire has access to seven of the eight key pharmaceutical 
markets, it was keen to consolidate its position in the North American market,  
following its successful acquisition of Roberts Pharmaceutical Corporation in   
1999.                                                                           

Since the Roberts merger, Shire has considered approximately   -  to   -
investment opportunities in the North American market, all of which were        
specialty pharmaceutical companies. During the course of considering these      
acquisition opportunities, Shire identified BioChem as a particularly attractive
candidate, primarily because BioChem broadened Shire's therapeutic areas and    
provided Shire with an enhanced combined search and development platform.       

Mr Rolf Stahel and Dr Francesco Bellini first met on August 28, 2000 in 
Ascoli, Italy [where Mr Stahel first raised the possibility of a merger of the  
two companies]. They did not discuss specific terms for a possible merger, but  
they did agree that the parties' representatives should meet and continue the   
discussions. Subsequent to this initial meeting, Dr Wilson Totten, Shire's      
Research & Development Director, went to Montreal on September 19, 2000 where he
met with Dr Bellini and Dr Gervais Dionne. The following day, Dr Totten and     
Dr Dionne visited the Laval site, where they talked through each of their       
respective R&D strategies and projects, but did not discuss specific terms of a 
possible transaction.                                                           

    During this period, Deutsche Bank prepared a basic financial analysis of the
effect on Shire's earnings of a potential business combination transaction with 
BioChem, reviewing publicly available information about BioChem and its         
products. Deutsche Bank also presented their initial views on the key due       
diligence issues that might arise were the proposed transaction to proceed.     

   By a letter dated September 22, 2000 from Deutsche Bank to Shire, which was
signed and accepted by Shire on this date, Shire formally engaged Deutsche Bank 
to act as its financial adviser in connection with negotiating the proposed     
merger.                                                                         

Reciprocal confidentiality agreements were executed on October 3 and    
October 9, 2000 with customary terms, subsequent to which information was sent  
from Chase Securities, BioChem's financial advisers, to Deutsche Bank, Shire's  
financial advisers, relating to specific products, tax, various accounting      
issues and patents.                                                             

   On October 6, 2000, Shire convened a board meeting. Deutsche Bank presented
to the board on the financial implications of a possible merger, preliminary    
views on value and the rationale for the transaction. No conclusions were       
possible regarding earnings impact because the financial terms of the possible  
transaction were not known. Further to permission granted at this board meeting,
a                                                                               

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preliminary non-binding indicative offer letter was sent to BioChem. This letter
confirmed Shire's interest in pursuing a potential business combination with    
BioChem and outlined various parameters of Shire's proposal, including that the 
offer be structured as a merger, an indicative offer value for the BioChem      
shares, certain pre-conditions and conditions to any offer by Shire, Shire's    
requirement for confidentiality and a request for an exclusive period to conduct
due diligence and proceed with negotiations, for the payment of mutual break    
fees, an option for Shire to acquire up to 19.9 per cent of the issued share    
capital of BioChem and warranties and indemnities usual for a transaction of    
this nature. In addition, the Board specifically requested that two issues that 
had been highlighted during the course of that board meeting regarding          
intellectual property rights and tax matters regarding BioChem be addressed and 
resolved.                                                                       

On October 16, 2000, the respective companies' company general counsels 
opened lines of communication on certain intellectual property issues, including
the identification of patent attorneys previously retained by BioChem, although 
specific terms of a possible transaction were not discussed.                    

On October 17, 2000, Shire's finance director, Angus Russell, financial 
controller, Paul McBarron, and internal tax adviser, Simon Gibbins, visited     
Montreal to discuss certain tax issues with BioChem's tax advisers and BioChem's
Chief Financial Officer, Frederick J. Andrew. Further to this meeting, Shire    
spent some time assessing the possible tax structures of the transaction.       

    On October 18 and 19, 2000, the respective parties' patent lawyers discussed
the patent interference and litigation involving BioChem and Emory University in
connection with 3TC/ lamivudine.                                                

   A further letter was sent to Dr Bellini by Mr Stahel on behalf of the Shire
board on October 24, following the completion of initial due diligence on the   
intellectual property issues and the tax issues. This letter confirmed Shire's  
interest in pursuing a potential business combination with BioChem and confirmed
various parameters of Shire's proposal, including that the offer be structured  
as a merger, an indicative offer value for the BioChem shares, certain          
pre-conditions and conditions to any offer by Shire, Shire's requirement for    
confidentiality and a request for an exclusive period to conduct due diligence  
and proceed with negotiations, the payment of mutual break fees, an option for  
Shire to acquire up to 19.9 per cent of the issued share capital of BioChem and 
warranties and indemnities usual for a transaction of this nature.              

 On October 29, 2000, a first draft merger agreement was sent to Shire. Dr
Francesco Bellini contacted Shire on October 30, 2000 and it was agreed that    
Shire's formal due diligence process lasting 10 days would now begin. On        
October 30, 2000 BioChem sent a letter to Shire agreeing, among other things, to
pay up to $600,000 towards Shire's out-of-pocket expenses related to the due    
diligence process should a definitive binding merger agreement not be signed by 
December 15, 2000. Shire's due diligence team, comprised of Shire officers and  
advisers, convened in Montreal on October 31, 2000. From October 31 until       
November 10, 2000, representatives of Shire and its financial, legal and        
accounting advisers conducted due diligence on BioChem both at the offices of   
BioChem's lawyers, Stikeman Elliott, and at all of BioChem's own sites.         

A further Shire board meeting, with certain directors attending by      
telephone, was convened on November 14, to discuss the initial findings from the
data room and other due diligence enquiries, rationale for the transaction,     
revised financial projections, valuation issues and financial implications of   
the merger. As a result of this board meeting, a further indicative offer letter
was sent to BioChem. This letter confirmed Shire's interest in pursuing a       
potential business combination with BioChem and confirmed various parameters of 
Shire's proposal, including that the offer be structured as a merger, an        
indicative value offer for the BioChem shares, certain pre-conditions and       
conditions to any offer by Shire, Shire's requirement for confidentiality and a 
request for an exclusive period to conduct due diligence and proceed with       
negotiations, the payment of a mutual break fee, an option for Shire to acquire 
up to 19.9 per cent of the issued share capital of BioChem and warranties and   
indemnities                                                                     

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usual for a transaction of this nature. The value to be received by a BioChem   
shareholder was determined using a fixed exchange ratio. Shire also requested   
that BioChem respond by 5pm UK time on November 17, which they did, saying that 
the Shire offer had been rejected.                                              

A further indicative offer was sent to BioChem on November 20, 2000,    
increasing the non-binding offer that had been set out in Shire's letter of     
November 14 and amending the terms of the share exchange, such that BioChem     
shareholders would receive fixed consideration within certain parameters of     
Shire's share price prior to closing. The exchange ratio would be based on a    
Shire ADS price of US$59 which would be adjusted by any variation of Shire's ADS
price of up to plus or minus twenty per cent, assessed by reference to the      
average closing Shire ADS price on the fifteen consecutive trading days ending  
on the third trading day immediately preceding the closing of the merger. Any   
alteration in the Shire ADS price outside of this range would not result in any 
further adjustment to the exchange ratios.                                      

   BioChem stated that it was unable to respond at this time as it had entered
a period of exclusivity with a third party which expired on November 27, 2000.  
This period of exclusivity with a third party subsequently expired and          
negotiations with Shire recommenced. On November 28, a further draft merger     
agreement was supplied. Negotiations on this merger agreement then began on     
November 29.                                                                    

On December 4, there was a further Shire board meeting that reported on 
continuing negotiations with BioChem.                                           

On December 5, BioChem and its team of legal, financial and accounting  
advisers began its due diligence on Shire. This due diligence comprised         
essentially two days spent at Shire's headquarters in Andover, December 6 and 7 
at the New York law offices of Cahill Gordon & Reindel, Shire's US counsel, and 
December 7 and 8 in Florence, Kentucky. Negotiations on the merger agreement    
continued during this period. The primary outstanding issues related to the     
legal requirement that the obligation of the Shire Board to recommend the merger
to the company's shareholders be subject to the fiduciary duties owed by Shire's
Board of Directors to the company and the break fees payable by either party in 
the event that the merger was not consummated. In the period between December 5 
and December 10 these issues were resolved.                                     

 On December 10 the legal advisers to Shire and BioChem revised the merger
agreement and finalised the other documentation.                                

The Board of Directors of Shire and BioChem convened board meetings in  
Montreal on December 10. Representatives of Deutsche Bank, Arthur Andersen and  
McCarthy Tetrault, Shire's Canadian counsel, were present at the Shire Board    
meeting and Deutsche Bank delivered a written fairness opinion to Shire's Board 
of Directors. Representatives of Chase Securities, Merrill Lynch and Stikeman   
Elliott were present at the BioChem Board meeting.                              

  The definitive merger agreement and related documents were signed by Shire
and BioChem in Montreal on the night of December 10. On the morning of          
December 11, Shire and BioChem jointly issued a press release announcing the    
execution of the merger agreement.                                              

REASONS FOR THE MERGER                                                          

Our board of directors believes that the merger brings together two     
publicly-traded specialty pharmaceutical companies with complementary strengths,
activities and competencies. We have built effective research and development   
functions, an effective sales and marketing organisation in the US and UK and   
have established and are expanding our functions in Canada and certain leading  
European markets. BioChem has built an outstanding scientific operation through 
which it has generated a pipeline of projects focused in three discrete         
specialty categories: oncology, vaccines and anti-virals.                       

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OPINION OF SHIRE'S FINANCIAL ADVISER                                            

    Deutsche Bank has acted as financial adviser to Shire in connection with the
merger. At the December 10, 2000 meeting of Shire's Board of Directors, Deutsche
Bank delivered its written opinion as at that date to Shire's Board of Directors
to the effect that as at the date of such opinion, based upon and subject to the
assumptions made, matters considered and the limits of the review undertaken by 
Deutsche Bank, the exchange ratio was fair, from a financial point of view to   
Shire's Shareholders.                                                           

The full text of the written opinion of Deutsche Bank dated December 10,
2000 (the "Deutsche Bank Opinion") which sets forth, among other things, the    
assumptions made, matters considered and limits on the scope of review          
undertaken by Deutsche Bank in connection with the opinion, is attached as Annex
D to this proxy statement and is incorporated by reference herein. Shire        
Shareholders are urged to read this opinion in its entirety. The summary of the 
Deutsche Bank Opinion set forth in this proxy statement is qualified in its     
entirety by reference to the full text of the Deutsche Bank Opinion.            

  In connection with Deutsche Bank's role as financial adviser to Shire, and
in arriving at its opinion, Deutsche Bank has, among other things, reviewed     
certain publicly available financial information and other information          
concerning Shire and BioChem and their respective groups and certain internal   
analyses and other information furnished to it by Shire and BioChem. Deutsche   
Bank also held discussions with the members of the senior management of Shire   
and BioChem regarding the businesses and prospects of their respective groups   
and the joint prospects of a combined group. In addition, Deutsche Bank has     
attended certain discussions with Shire's external legal counsel and BioChem's  
internal and external counsel on specific items relating to ongoing patent      
litigation and related proceedings against BioChem and/or members of its group  
and has reviewed and relied on such counsels' opinions with respect to these    
matters. In addition, Deutsche Bank has (i) reviewed the reported prices and    
trading activity for the common stock of BioChem and the ordinary shares of     
Shire, (ii) compared certain financial and stock market information for Shire   
and BioChem with similar information for selected companies whose securities are
publicly traded, (iii) reviewed the financial terms of selected recent business 
combinations which it deemed comparable in whole or in part, (iv) reviewed the  
terms of the Merger Agreement and (v) performed such other studies and analyses 
and considered such other factors it deemed appropriate.                        

 In preparing its opinion, Deutsche Bank did not assume responsibility for
the independent verification of, and did not independently verify, any          
information, whether publicly available or furnished to it, concerning Shire or 
BioChem or their respective groups, including, without limitation, any financial
information, forecasts or projections, considered in connection with the        
rendering of its opinion. Accordingly, for purposes of its opinion, Deutsche    
Bank assumed and relied upon the accuracy and completeness of all such          
information. Deutsche Bank did not conduct a physical inspection of any of the  
properties or assets, and did not prepare or obtain any independent evaluation  
or appraisal of any of the assets or liabilities of Shire or BioChem or members 
of their groups. With respect to the financial forecasts and projections made   
available to Deutsche Bank and used in its analysis, including analyses and     
forecasts of certain cost savings (including assumptions relating to future tax 
rates), operating efficiencies, revenue effects and financial synergies         
(collectively, the "Synergies") expected by Shire to be achieved as a result of 
the merger, Deutsche Bank has assumed that they have been reasonably prepared on
bases reflecting the best currently available estimates and judgements of the   
management of Shire or BioChem, as the case may be, as to the matters covered   
thereby. In rendering its opinion, Deutsche Bank expressed no view as to the    
reasonableness of such forecasts and projections, including the Synergies, or   
the assumptions on which they are based. The Deutsche Bank Opinion was          
necessarily based upon economic, market and other conditions as in effect on,   
and the information made available to Deutsche Bank as of, the date of such     
opinion. Events occurring after the date thereof could materially affect this   
opinion and the assumptions used in preparing this opinion. Although subsequent 
developments may affect Deutsche Bank's opinion, Deutsche Bank does not have any
obligation to update, revise or reaffirm its opinion. Shire imposed no other    
instructions or                                                                 

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limitations on Deutsche Bank with respect to the other investigations made or   
the procedures followed by it in rendering its opinion. Further, Deutsche Bank  
does not provide legal, accounting, actuarial or tax advice.                    

 For purposes of rendering its opinion, Deutsche Bank has assumed that, in
all respects material to its analysis, the representations and warranties of    
Shire, Shire Exchangeco and BioChem contained in the Merger Agreement are true  
and correct, that Shire, Shire Exchangeco and BioChem will each perform all of  
the covenants and agreements to be performed by them under the Merger Agreement 
and all conditions to the obligation of each of Shire, Shire Exchangeco and     
BioChem to consummate the merger will be satisfied without any waiver thereof.  
Deutsche Bank has also assumed that all material governmental, regulatory or    
other approvals and consents required in connection with the consummation of the
transactions contemplated by the Merger Agreement will be obtained and that in  
connection with obtaining any necessary governmental, regulatory or other       
approvals and consents, or any amendments, modifications or waivers to any      
agreements, instruments or orders to which either Shire or BioChem is a party or
subject or by which it is bound, no limitations, restrictions or conditions will
be imposed or amendments, modifications or waivers made that would have a       
material adverse effect on Shire or BioChem or materially reduce the            
contemplated benefits of the merger to Shire. In addition, Deutsche Bank has    
been advised by Shire, and accordingly has assumed for purposes of its opinion, 
that the merger will be tax-free to each of Shire and BioChem and their         
respective stockholders and that the merger will be accounted for as a pooling  
of interests.                                                                   

    In connection with Deutsche Bank's role as financial adviser to Shire and in
arriving at its opinion, Deutsche Bank was not authorized to solicit, and did   
not solicit, interest from any other person with respect to the acquisition of  
Shire or any of its assets, nor did Deutsche Bank have discussions or negotiate 
with any person in connection with the merger.                                  

  Set forth below is a brief summary of certain financial analyses performed
by Deutsche Bank in connection with its opinion.                                

 HISTORICAL STOCK PERFORMANCE.  Deutsche Bank reviewed and analyzed recent
and historical market prices and trading volume for Shire ADSs and ordinary     
shares and BioChem common shares and compared such market prices to certain     
stock market and industry indices.                                              

ANALYSIS OF SELECTED PUBLICLY TRADED COMPANIES.  Deutsche Bank compared 
certain financial information and commonly used valuation measurements for      
BioChem and Shire to corresponding information and measurements for a group of  
ten publicly traded specialty pharmaceutical companies consisting of            

- Allergan Inc;                                                         

- ALZA Corp;                                                            

- Forest Laboratories Inc;                                              

- ICN Pharmaceuticals Inc;                                              

- King Pharmaceuticals Inc;                                             

- KV Pharmaceutical Co;                                                 

- Medicis Pharmaceuticals Corp;                                         

- Elan Corporation plc;                                                 

- H Lundbeck; and                                                       

- Schering AG                                                           

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(collectively, the "Selected Companies"). Deutsche Bank reviewed, among other   
things, enterprise values (defined as equity value, plus total debt, preferred  
stock and minority interest less cash) as a multiple of estimated calendar years
2000, 2001 and 2002 EBIT and EBITDA and equity values as a multiple of estimated
calendar years 2000, 2001 and 2002 net income. In order to derive an implied    
equity range for BioChem, Deutsche Bank then applied a range of selected        
multiples of estimated calendar years 2000, 2001 and 2002 derived from the      
Selected Companies to corresponding financial statistics for BioChem. Estimated 
financial data for the Selected Companies were based on publicly available      
research analysts' estimates and estimated financial data for BioChem were based
on internal estimates of the management of Shire. After applying a control      
premium derived from an analysis of those in North American transactions in the 
period from January 1998 to November 2000, this implied an equity reference     
range for BioChem of approximately $4.0 billion to $4.7 billion.                

 None of the companies utilized as a comparison is identical to BioChem or
Shire. Accordingly, Deutsche Bank believes the analysis of such publicly traded 
comparable companies is not simply mathematical. Rather, it involves complex    
considerations and qualitative judgements, reflected in Deutsche Bank's opinion,
concerning differences in financial and operating characteristics of the        
comparable companies and other factors that could affect the public trading     
value of the comparable companies.                                              

ANALYSIS OF SELECTED PRECEDENT TRANSACTIONS.  Deutsche Bank reviewed the
financial terms, to the extent publicly available, of five completed mergers and
acquisition transactions since January 1, 1999 involving companies in the       
specialty pharmaceutical industry (the "Selected Transactions"). The            
transactions reviewed were (with month of announcement in parenthesis):         

- Dura Pharmaceuticals/Elan Corporation (September 2000);               

- Pathogenesis/Chiron (August 2000);                                    

- Jones Pharmaceuticals/King Pharmaceuticals (July 2000);               

- Roberts Pharmaceuticals/Shire Pharmaceuticals (July 1999); and        

- Agouron Pharmaceuticals/Warner Lambert (January 1999)                 

  Deutsche Bank compared the enterprise values (for definition see above) in
the selected transactions as a multiple of forecast one year EBIT and the equity
values in the selected transactions as a multiple of forecast one year net      
income. All financial information was based on financial information available  
at the time of the relevant transaction. Applying the range of EBIT multiples   
and net income multiples to corresponding financial data for BioChem based on   
internal estimates of the management of Shire resulted in an implied enterprise 
value of BioChem in the range of $3.5 billion to $4.5 billion.                  

Because the reasons for, and circumstances surrounding, each of the     
precedent transactions analyzed were so diverse, and due to the inherent        
differences between the operations and financial conditions of BioChem and Shire
and the companies involved in the Selected Transactions, Deutsche Bank believes 
that a comparable transaction analysis is not simply mathematical. Rather, it   
involves complex considerations and qualitative judgments, reflected in Deutsche
Bank's opinion, concerning differences between the characteristics of these     
transactions and the merger that could affect the value of the subject companies
and businesses and BioChem and Shire.                                           

    CONTRIBUTION ANALYSIS.  Deutsche Bank analyzed the relative contributions of
BioChem, with synergies expected to arise from the transaction, and Shire to the
pro forma income statement of the combined company, based on internal estimates 
of the management of Shire for both companies and a base level of expected      
synergies. This analysis showed that on a pro forma combined basis (excluding   
(i) non-recurring expenses relating to the merger and (ii) excluding the impact 
of any revenue from CliniChem Development Inc), based on the calendar years     
ending December 31, 2000, 2001 and 2002                                         

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for Shire and BioChem, Shire and BioChem (with a base level of synergies        
estimated by the management of Shire), would account for approximately 59%, 41%;
54% and 46%; and 55%, 45% respectively, of the combined company's pro forma net 
income for each of those three years.                                           

    DISCOUNTED CASH FLOW ANALYSIS.  The acquisition of BioChem by Shire is to be
satisfied by the issue of new Shire ordinary shares, new Shire ADSs or by the   
issue by ExchangeCo of exchangeable shares in favor of BioChem Shareholders.    
Accordingly, no cash consideration will pass to BioChem Shareholders. As such,  
the Board of Shire, as advised by Deutsche Bank, did not regard a Discounted    
Cash Flow Analysis as representative and hence was not relied upon by the Board 
of Shire as part of its decision making process. Nevertheless, Deutsche Bank    
performed a discounted cash flow analysis on BioChem. Deutsche Bank calculated  
the discounted cash flow value as the estimated future cash flow that BioChem is
forecast to generate from the year 2001 onwards. The estimated future cash flows
were based on the internal estimates of the management of Shire and Deutsche    
Bank used a range of discount rates.                                            

 PRO FORMA COMBINED EARNINGS ANALYSIS.  Deutsche Bank analyzed certain pro
forma effects of the merger. Based on such analysis, Deutsche Bank computed the 
resulting dilution/accretion to the combined company's EPS estimate for the     
fiscal years ending December 31, 2001 and 2002, before and after taking into    
account any potential cost savings and other synergies identified by management 
that BioChem and Shire could achieve if the merger were consummated and before  
non-recurring costs relating to the merger. The results of this analysis        
suggested that the merger could be accretive, or represent an increase, to      
Shire's earnings per share in calendar years 2001 and 2002. The actual results  
achieved by the combined company may vary from projected results and the        
variations may be material.                                                     

    OTHER ANALYSES.  In addition, Deutsche Bank analyzed the terms of the Merger
Agreement at the extremities of the collar arrangement and considered the       
financial implications for Shire. Deutsche Bank also reviewed the average bid   
premium paid in recommended transactions in North America since 1998. This      
showed that the range of premium paid to the target company's share price on the
day prior to announcement was 27.7 per cent to 47.8 per cent, with an average of
37 per cent. Shire offered a premium of 39.6 per cent to the BioChem share price
on the trading day prior to the announcement of the merger. In addition,        
Deutsche Bank considered the possible financial implications for Shire of an    
adverse ruling in the Emory University patent litigation. For further details of
this litigation, please see "Risk Factors--BioChem's ongoing success is         
dependent on maintaining patent protection for its products."                   

   The foregoing summary describes all analyses and factors that Deutsche Bank
deemed material in its presentation to Shire's Board of Directors, but is not a 
comprehensive description of all analyses performed and factors considered by   
Deutsche Bank in connection with preparing its opinion. The preparation of a    
fairness opinion is a complex process involving the application of subjective   
business judgment in determining the most appropriate and relevant methods of   
financial analysis and the application of those methods to the particular       
circumstances and, therefore, is not readily susceptible to summary description.
Deutsche Bank believes that its analyses must be considered as a whole and that 
considering any portion of such analyses and of the factors considered without  
considering all analyses and factors could create a misleading view of the      
process underlying the opinion. In arriving at its fairness determination,      
Deutsche Bank did not assign specific weights to any particular analyses. In    
addition, Deutsche Bank expresses no opinion as to what the value of Shire's    
stock will be when issued to BioChem shareholders pursuant to the merger or the 
price at which Shire stock will trade subsequent to the merger.                 

In conducting its analyses and arriving at its opinion, Deutsche Bank   
utilized a variety of generally accepted valuation methods. The analyses were   
prepared solely for the purpose of enabling Deutsche Bank to provide its opinion
to Shire's Board of Directors as to the fairness to Shire of the Exchange Ratio 
and does not purport to be appraisals or necessarily reflect the prices at which
businesses or                                                                   

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securities actually may be sold, which are inherently subject to uncertainty. In
connection with its analyses, Deutsche Bank made, and was provided by Shire     
management with, numerous assumptions with respect to industry performance,     
general business and economic conditions and other matters, many of which are   
beyond Shire's or BioChem's control. Analyses based on estimates or forecasts of
future results are not necessarily indicative of actual past or future values or
results, which may be significantly more or less favorable than suggested by    
such analyses. Because such analyses are inherently subject to uncertainty,     
being based upon numerous factors or events beyond the control of Shire, BioChem
or their respective advisers, neither Shire nor Deutsche Bank nor any other     
person assumes responsibility if future results or actual values are materially 
different from these forecasts or assumptions. The estimates contained in       
Deutsche Bank's analyses and the valuation ranges resulting from any particular 
analysis are not necessarily indicative of actual values or predictive of future
results or values, which may be significantly more or less favorable than those 
suggested by its analyses. Deutsche Bank's opinion and related financial        
analyses were only one of many factors considered by the Board of Shire in its  
evaluation of the merger and should not be viewed as determinative of the views 
of the Board or management of Shire with respect to the merger or the           
consideration payable in the merger.                                            

  The terms of the merger were determined through negotiations between Shire
and BioChem and were approved by Shire's Board of Directors. Although Deutsche  
Bank provided advice to Shire during the course of these negotiations, the      
decision to enter into the merger was solely that of Shire's Board of Directors.
As described above, the opinion and presentation of Deutsche Bank to Shire's    
Board of Directors were only one of a number of factors taken into consideration
by Shire's Board of Directors in making its determination to approve the        
Transaction. Deutsche Bank's opinion was provided to Shire's Board of Directors 
to assist it in connection with its consideration of the merger and does not    
constitute a recommendation to any holder of Shire's ordinary shares as to how  
to vote with respect to the merger.                                             

Shire selected Deutsche Bank as financial adviser in connection with the
merger based on Deutsche Bank's qualifications, expertise, reputation and       
experience in mergers and acquisitions. Shire has retained Deutsche Bank        
pursuant to an agreement dated September 22, 2000 (the "Engagement Letter"). As 
compensation for Deutsche Bank's services in connection with the merger, Shire  
has incurred a cash liability to Deutsche Bank of $2,500,000 and has agreed to  
pay in aggregate a fee representing 0.4 per cent of the value of the offer for  
BioChem if the merger is consummated. Regardless of whether the merger is       
consummated, Shire has agreed to reimburse Deutsche Bank for reasonable fees and
disbursements of Deutsche Bank's counsel and all of Deutsche Bank's reasonable  
travel and other out-of-pocket expenses incurred in connection with the merger  
or otherwise arising out of the retention of Deutsche Bank under the Engagement 
Letter. Shire has also agreed to indemnify Deutsche Bank and certain related    
persons to the full extent lawful against certain liabilities, including certain
liabilities under US federal securities laws arising out of its engagement or   
the merger.                                                                     

Deutsche Bank is an internationally recognized investment banking firm  
experienced in providing advice in connection with mergers and acquisitions and 
related transactions. Deutsche Bank and its affiliates may actively trade       
securities of Shire or BioChem for their own account or the account of their    
customers and, accordingly, may from time to time hold a long or short position 
in such securities.                                                             

GOVERNMENTAL REGULATION                                                         

US ANTITRUST                                                            

   Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the rules promulgated thereunder, certain transactions, including the       
merger, may not be consummated unless certain waiting period requirements have  
been satisfied. On January 12, 2001, we filed a Pre-merger Notification and     
Report Form in accordance with the provisions of the Hart-Scott-Rodino Act with 
the Antitrust Division and the FTC. The required waiting period will expire on  
February 11, 2001.                                                              

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UK ANTITRUST                                                            

   In the UK, the Secretary of State can refer any qualifying merger situation
to the Competition Commission for investigation as to whether the merger may be 
expected to operate against the public interest. The merger is a qualifying     
merger situation for the purposes of UK law. There is no obligation to obtain   
prior clearance of a qualifying merger in the UK. However, if a qualifying      
merger is completed without prior clearance being given, there is a risk that   
the merger may subsequently be referred to the Competition Commission and that  
divestments might ultimately be required.                                       

INVESTMENT CANADA ACT                                                   

The INVESTMENT CANADA ACT is a Canadian statute of general application  
governing the acquisition of control of Canadian businesses by non-Canadians.   
This merger is considered to be an acquisition of control of a Canadian business
by a non-Canadian for purposes of the INVESTMENT CANADA ACT. A proposed         
acquisition of a Canadian business by a non-Canadian prospective acquiror is    
subject to prior review and approval by the Minister of Industry Canada if the  
value of the assets of the acquired business is equal to or greater than a      
threshold amount. This amount was $192 million for the 2000 calendar year. A    
reviewable investment may not be completed until the Minister determines that   
the investment is likely to be of "net benefit to Canada," in accordance with   
the various criteria set out under the INVESTMENT CANADA ACT. The Minister may  
also condition a "net benefit to Canada" finding on the provision of            
undertakings by the non-Canadian prospective acquiror. This merger is reviewable
because the value of assets of BioChem will likely exceed the threshold amount  
to be fixed for the 2001 calendar year.                                         

   To commence the review process, we submitted an application for review with
prescribed information to the Director of Investments within Industry Canada on 
January 12, 2001. Under the INVESTMENT CANADA ACT, a decision is required to be 
rendered within 45 days of receipt of such filing, subject to the unilateral    
right of the Minister to extend this period for up to a further 30 days. Based  
on this timetable and assuming no extension by the Minister, we expect the      
Minister to render a decision by March 1, 2001.                                 

CANADIAN COMPETITION ACT                                                

    The merger is a "notifiable transaction" under the COMPETITION ACT (Canada),
which means prescribed information must be sent to the Competition Bureau for   
review.                                                                         

   BioChem and Shire intend to submit a request pursuant to section 102 of the
Competition Act for an advance ruling certificate ("ARC") to the Commissioner of
Competition on or about January 17, 2001. Should it appear that the Commissioner
of Competition will not issue an ARC or will not do so quickly enough to allow  
the transaction to be consummated as scheduled, BioChem and Shire will submit a 
short-form pre-merger notification filing to the Commissioner of Competition.   

A transaction cannot be consummated until an ARC has been issued by the 
Commissioner of Competition or, in the event a short-form pre-merger            
notification is filed, a relevant waiting period of 14 days has expired.        

Where an ARC is issued and the notifiable transaction to which the ARC  
relates is substantially completed within one year after the ARC is issued, the 
Commissioner of Competition may not seek an order of the Competition Tribunal in
respect of the notifiable transaction solely on the basis of information that is
the same or substantially the same as the information on the basis of which the 
ARC was issued. If an ARC is not issued, at any time within three years after   
the consummation of the transaction for which the ARC was sought but not issued,
and notwithstanding the expiry of the waiting period under the Competition Act, 
the Commissioner of Competition could take action under the                     

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Competition Act to seek to enjoin, modify or dissolve the transaction if it     
would be likely to prevent or lessen competition substantially.                 

Each of BioChem and Shire believe that the Transaction is not likely to 
prevent or lessen competition substantially. Nevertheless, there can be no      
assurance (unless an ARC is issued) that the Commissioner of Competition will   
not challenge the Transaction at any time before or within three years from the 
consummation or, if such a challenge is made, what the result would be.         

ANTICIPATED ACCOUNTING TREATMENT AND EFFECTS                                    

The merger is intended to qualify as a pooling of interests transaction 
under US GAAP, which means the recorded assets and liabilities of BioChem will  
be carried forward to the combined business at their recorded amounts. The      
historical revenues and expenses of BioChem, for all periods, will be combined  
with those of Shire, whose financial statements will then be restated.          

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THE MERGER AGREEMENT

    The following description of the material provisions of the merger agreement
is only a summary and does not purport to be complete. This description is      
qualified in its entirety by reference to the merger agreement, a copy of which 
is attached to this Proxy Statement as Annex A and is incorporated herein by    
reference.                                                                      

GENERAL; EFFECTIVE TIME AND EFFECTS OF THE MERGER                               

    The merger agreement provides that, subject to the approval of the merger by
the affirmative vote of at least two-thirds of the votes cast by BioChem        
shareholders and by BioChem rightholders, voting together, subject to any       
conditions prescribed in the interim order to be obtained prior to the mailing  
of the BioChem circular to BioChem's shareholders and the passing of the        
ordinary resolution to be proposed at the extraordinary general meeting, and the
satisfaction or waiver of other conditions to the merger, Shire and BioChem will
merge pursuant to a plan of arrangement.                                        

  Upon completion of the merger and closing of the arrangement, BioChem will
become a wholly-owned subsidiary of Exchangeco, a wholly-owned subsidiary of    
Shire.                                                                          

DIRECTORS OF SHIRE IMMEDIATELY FOLLOWING THE MERGER                             

 Following the merger, Dr. Francesco Bellini, The Honourable James Andrews
Grant and Mr. Gerard Veilleux, who are now members of BioChem's board, will     
become members of Shire's board. At that time approximately 30% of the Shire    
board will be former BioChem board members.                                     

CONVERSION OF BIOCHEM SHARES                                                    

   The merger agreement provides for the combination of Shire and BioChem in a
transaction in which each BioChem shareholder (other than BioChem shareholders  
who properly dissent to the merger) will have the choice of receiving as        
consideration for each share of BioChem:                                        

- a number of ordinary shares equal to the exchange ratio;              

- a number of exchangeable shares equal to the exchange ratio divided by
      three issued by a wholly-owned subsidiary of Shire, which are exchangeable
  into ordinary shares, or ADSs, at a rate of one exchangeable share for
three ordinary shares or one exchangeable share for one ADS;        

- a number of ADSs equal to the exchange ratio divided by three; or     

- a combination of the above.                                           

Only shareholders of BioChem that are Canadian residents will have the  
option of receiving exchangeable shares for their shares of BioChem.            

The exchangeable shares will be issued by Exchangeco, a corporation     
incorporated under the CANADA BUSINESS CORPORATIONS ACT, which is a wholly-owned
subsidiary of Shire. Holders of the exchangeable shares will be entitled to     
dividend and other rights that are, as nearly as practicable, economically      
equivalent to those of ordinary shares. Through a voting trust, holders of the  
exchangeable shares will be entitled to vote at meetings of Shire shareholders. 

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EXCHANGE RATIO                                                                  

The number of ordinary shares into which each share of BioChem shall be 
converted shall be determined as follows:                                       

                                                                [Download Table]

IF THE ADS PRICE IS:                   THE EXCHANGE RATIO SHALL BE:        
--------------------                   ----------------------------        
                                                                           
less than or equal to $47.20           2.3517                              

Greater than $47.20 and less than      determined by dividing $37.00 by the
$70.80                                 ADS price and multiplying by three  

equal to or greater than $70.80        1.5678                              

If a BioChem shareholder elects, or in certain circumstances, we will   
provide such shareholder with one-third of an ADS or one-third of an            
exchangeable share for each ordinary share such shareholder would be entitled to
receive based on the exchange ratio.                                            

REPRESENTATIONS AND WARRANTIES                                                  

   The merger agreement contains customary representations and warranties made
by Shire and BioChem relating to, among other things:                           

- due organization and good standing;                                   

- capitalization;                                                       

- corporate authority to enter into the contemplated transactions;      

- lack of conflicts with corporate governance documents;                

- reports and financial statements;                                     

- absence of certain changes or events;                                 

- compliance with law;                                                  

- brokers or finders;                                                   

- absence of litigation;                                                

- filing of tax returns;                                                

- environmental matters; and                                            

- intellectual property.                                                

COVENANTS                                                                       

    During the period from the date of the merger agreement and continuing until
the effective time, each of Shire and BioChem has agreed as to itself and its   
subsidiaries that, among other things, it and its subsidiaries will carry on    
their respective businesses only in the ordinary course and will use reasonable 
efforts to maintain and preserve its business organization, assets, employees   
and business relationships and to maintain all of its properties and assets in  
useful and good condition.                                                      

  The merger agreement contains certain other covenants of Shire and BioChem
relating to the conduct of their respective businesses before the effective     
time, including:                                                                

    - covenants relating to the declaration and payment of dividends and changes
in share capital;                                                   

- the issuance of securities;                                           

- the amendment of corporate governance documents;                      

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- the disposition of assets;                                            

 - the incurrence of indebtedness and the acquisition of equity interests;

- the making of loans, advances, contributions or investments;          

- the maintenance of benefits' plans and compensation;                  

  - the entering into of agreements limiting or restricting Shire or BioChem
from engaging or competing in any line of business; and             

 - the preservation of the availability of pooling-of-interests accounting
treatment.                                                          

NO SOLICITATION                                                                 

   According to the terms of the merger agreement, Shire and BioChem have each
agreed that, prior to the effective time, neither it, any of its subsidiaries   
nor any of the respective employees, agents or representatives of the foregoing 
will:                                                                           

   - initiate, solicit, encourage or knowingly facilitate, including by way of
  furnishing information, any inquiries or the making of any proposal or
offer with respect to any merger, consolidation or other business   
combination involving Shire or BioChem, as the case may be, or the  
      acquisition of the assets of BioChem or Shire having an aggregate value of
      50% or more of the market capitalization or the acquisition of 50% or more
of the capital stock of Shire or BioChem, as the case may be;       

 - have any discussion with or provide confidential information or data to
any person relating to the type of transaction referred to above;   

  - engage in any negotiations regarding the type of transaction referred to
above; or                                                           

  - knowingly facilitate any effort or attempt to make or implement the type
of transaction referred to above or accept such a transaction.      

The merger agreement does allow Shire and BioChem, in response to an    
unsolicited written proposal from a third party regarding a bona fide, written  
and unsolicited proposal or offer made by any persons or group with respect to a
merger, consolidation or other business combination or an acquisition of the    
assets of BioChem or Shire having an aggregate value of 50% or more of the      
market capitalization or the acquisition of 50% or more of the capital stock of 
Shire or BioChem, as the case may be, on terms which the board of directors of  
Shire or BioChem, as the case may be, determines in good faith, and in the      
exercise of reasonable judgment, based on the advice of independent financial   
advisors and legal counsel, to be more favorable to its shareholders than the   
merger, to furnish information to, negotiate or otherwise engage in discussions 
with such third party, PROVIDED HOWEVER, in the case of Shire that its board of 
directors determines in good faith, after receiving a written opinion from its  
outside counsel, that such action is required for the board of directors to     
comply with its fiduciary duties under applicable law.                          

According to the terms of the merger agreement, Shire and BioChem have  
agreed to promptly advise each other of any information they have from a person 
with respect to any transaction of the type referred to above and to give each  
other an update on an ongoing basis or upon the reasonable request of Shire or  
BioChem, as the case may be, on the status of any such transaction.             

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CONDITIONS TO CLOSING                                                           

MUTUAL CONDITIONS                                                       

   The merger agreement provides that the respective obligations of each party
to complete the transaction are subject to the satisfaction or waiver of a      
number of conditions, including the following:                                  

 - the transaction shall have been approved by the requisite vote of Shire
and BioChem shareholders;                                           

- no laws shall have been adopted or promulgated, and no temporary      
 restraining order, preliminary or permanent injunction or other order
    issued by a court or other governmental entity of competent jurisdiction
      shall be in effect, having the effect of making the transaction illegal or
otherwise prohibiting consummation of the transaction;              

- the waiting periods (and any extensions thereof) applicable to the    
     transaction under the HSR Act and the COMPETITION ACT (Canada) shall have
    been terminated or shall have expired or the Commissioner of Competition
shall have issued an advance ruling certificate and/or a "no action"
    letter under the COMPETITION ACT (Canada) in relation to the transaction
  and the Director of Investments under INVESTMENT CANADA ACT shall have
     concluded that the transaction is of "net benefit to Canada" for purposes
of the INVESTMENT CANADA ACT;                                       

 - all consents, approvals and actions of, filings with and notices to any
governmental entity required of Shire or BioChem or any of their    
respective subsidiaries to consummate the transaction and the other 
transactions contemplated hereby shall have been obtained;          

- the ordinary shares to be issued in the transaction and such other    
ordinary shares to be reserved for issuance in connection with the  
   transaction shall have been admitted to the Official List of the United
      Kingdom Listing Authority and to trading on the London Stock Exchange, the
   ADSs to be issued in the transaction and such other ADSs to be reserved
    for issuance in connection with the transaction shall have been approved
for listing on NASDAQ (to the extent necessary) and the exchangeable
      shares shall have been approved for listing on the Toronto Stock Exchange,
subject to official notice of issuance;                             

   - a registration statement on Form S-3 relating to the issuance of ordinary
    shares upon exchange of the exchangeable shares shall have been declared
effective by the Securities and Exchange Commission ("SEC") or an   
     appropriate "no action letter" shall have been obtained from the Staff of
    the SEC relating to the issuance of ordinary shares upon exchange of the
  exchangeable shares. No stop order suspending the effectiveness of the
  Form S-3 shall have been issued by the SEC and no proceedings for that
purpose shall have been initiated or threatened by the SEC;         

    - all applicable requirements of Section 3 (a) (10) of the Securities Act of
   1933 shall have been satisfied with respect to the issuance of ordinary
shares and ADSs in connection with the transaction; and             

 - exemption orders from the registration and prospectus requirements with
      respect to the exchangeable share structure shall have been granted by all
relevant Canadian provincial securities authorities.                

CONDITIONS IN FAVOR OF SHIRE AND EXCHANGECO                             

    The merger agreement provides that the obligation of Shire and Exchangeco to
complete the transaction is subject to the satisfaction or waiver of a number of
additional conditions, each of which may be waived by Shire, including the      
following:                                                                      

- each of the representations and warranties of BioChem set forth in the
     merger agreement that is qualified as to material adverse effect shall be
true and correct and each of the representations                    

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      and warranties of BioChem set forth in the merger agreement that is not so
      qualified shall be true and correct in all material respects, in each case
  as of the date of the merger agreement and as of the effective date as
though made on and as of the effective date;                        

    - BioChem shall have performed or complied with all agreements and covenants
    required to be performed by it under the merger agreement at or prior to
   the effective date that are qualified as to material adverse effect and
    shall have performed or complied in all material respects with all other
    agreements and covenants required to be performed by it under the merger
  agreement at or prior to the effective date that are not so qualified;

    - BioChem's Board of Directors shall have waived the application of a rights
    plan to the transactions contemplated hereby. Under the rights plan, one
 common share purchase right was issued in respect of each outstanding
common share and a share purchase right for each common share issued
      thereafter. These rights are exercisable in a situation of public offering
      where certain conditions are not respected. Each right entitles the holder
    to purchase, from BioChem, one common share at a specific price, subject
to certain anti-dilution adjustments;                               

- holders of not more than 5% of BioChem's common shares issued and     
    outstanding immediately prior to the effective date shall have dissented
to the transaction (and not withdrawn such dissent);                

   - since the date of the merger agreement, there shall not have occurred any
     change, effect, event or circumstance that, in combination with any other
changes, effects, events or circumstances, has resulted in or would 
      reasonably be expected to result in a material adverse effect with respect
    to BioChem; PROVIDED, THAT, the outcome of the proceedings instituted by
 Emory University in the US shall not be considered to have a material
adverse effect on BioChem; and                                      

- there shall have been delivered to Shire:                             

   - a pooling letter from Shire's independent auditors, dated as of the
        effective date and addressed to Shire, reasonably satisfactory in form
  and substance to Shire, setting forth the concurrence of Shire's
        independent auditors with the conclusion of Shire's management that it
    will be appropriate to account of the Arrangement as a "pooling of
      interests" under US GAAP, Accounting Principles Board Opinion No. 16
and all published rules and regulations adopted by the SEC.   

     - a poolability letter from BioChem's independent auditors, dated as of
         the effective date and reasonably satisfactory in form and substance to
        Shire, setting forth the concurrence of BioChem's independent auditors
         with the conclusion of BioChem's management that it will be appropriate
    to account for the Arrangement as a "pooling of interest" under US
    GAAP, Accounting Principles Board Opinion No. 16 and all published
rules and regulations adopted by the SEC.                     

CONDITIONS IN FAVOR OF BIOCHEM                                          

    The merger agreement provides that the obligation of BioChem to complete the
transaction is subject to the fulfillment of a number of additional conditions, 
each of which may be waived by BioChem, including the following:                

    - each of the representations and warranties of each of Shire and Exchangeco
      set forth in the merger agreement that is qualified as to material adverse
 effect shall be true and correct, and each of the representations and
warranties of each of Shire and Exchangeco set forth in the merger  
agreement that is not so qualified shall be true and correct in all 
      material respects, in each case of the date of the merger agreement and as
     of the effective date as though made on and as of the effective date; and

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  - Shire shall have performed or complied with all agreements and covenants
    required to be performed by it under the merger agreement at or prior to
   the effective date that are qualified as to material adverse effect and
    shall have performed or complied in all material respects with all other
    agreements and covenants required to be performed by it under the merger
agreement at or prior to the closing date that are not so qualified.

TERMINATION AND PAYMENT OF BREAK FEES                                           

   The merger agreement may be terminated by mutual written consent of BioChem
and Shire at any time prior to the effective date. In addition, if the effective
date shall not have occurred on or before May 31, 2001, the merger agreement may
be terminated by either BioChem or Shire; PROVIDED, HOWEVER, that this right to 
termination may not be available to any party whose failure to fulfill any      
obligation under the merger agreement has been the cause of, or resulted in, the
failure of the effective date to occur on or before May 31, 2001.               

 The merger agreement may be terminated by either BioChem or Shire, if any
governmental entity:                                                            

 - shall have issued a final and non-appealable order, decree or ruling or
   taken any other action (which such party shall have used its reasonable
best efforts to resist, resolve or lift, as applicable) permanently 
restraining, enjoining or otherwise prohibiting the transactions    
   contemplated by the merger agreement, and such order, decree, ruling or
other action shall have become final and non-appealable; or         

    - shall have failed to issue an order, decree or ruling or to take any other
     action (which order, decree, ruling or other action such party shall have
     used its reasonable best efforts to obtain) which is necessary to fulfill
 the conditions to closing set forth in the merger agreement, and such
      denial of a request to issue such order, decree, ruling or take such other
      action shall have become final and non-appealable; PROVIDED, HOWEVER, that
     this right to terminate shall not be available to any party whose failure
      to use reasonable best efforts to obtain regulatory approvals has been the
cause of such action or inaction.                                   

  The merger agreement may be terminated by Shire upon the occurrence of any
of the following events:                                                        

- BioChem shareholder approval has not been obtained at the BioChem     
shareholder meeting;                                                

- the board of directors of BioChem fails to recommend approval of the  
      merger to its shareholders or adversely modifies or qualifies or withdraws
its recommendation; or                                              

- a breach by BioChem of any representation, covenant or agreement which
  results in a failure of certain conditions to closing (subject to a 20
business day cure period);                                          

    The merger agreement may be terminated by BioChem upon the occurrence of any
of the following events:                                                        

  - Shire shareholders have not approved the merger at the Shire shareholder
meeting;                                                            

   - the board of directors of Shire fails to recommend approval of the merger
   to its shareholders or adversely modifies or qualifies or withdraws its
recommendation; or                                                  

- a breach by Shire of any representation, covenant or agreement which  
  results in a failure of certain conditions to closing (subject to a 20
business day cure period).                                          

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   BioChem may also terminate the merger agreement if at any time prior to its
shareholder meeting, BioChem shall have failed to recommend approval of the     
merger to its shareholders or adversely modified or qualified or withdrawn its  
recommendation so long as:                                                      

   - the BioChem board of directors, after consultation with its legal counsel
   and financial advisor, determines that a proposal to acquire BioChem is
      more favorable from a financial point of view to its shareholders than the
   transaction and, after consultation with and based upon advice of legal
counsel, determines in good faith that such action is necessary for 
BioChem's board of directors to comply with its fiduciary duties to 
shareholders under applicable laws;                                 

    - BioChem pays to Shire, immediately following the termination of the merger
agreement, a break fee of $110 million; and                         

    - BioChem provides to Shire at least five business days prior to termination
     written notice of its intention to terminate the merger agreement and the
material terms and conditions of the proposal to acquire BioChem.   

If Shire terminates the merger agreement because BioChem shareholder    
approval has not been obtained, and                                             

- a transaction to acquire BioChem is announced that BioChem's board of 
directors determines is more favorable to its shareholders than the 
transaction with Shire; and                                         

  - that transaction is consummated within one year (or 18 months in certain
circumstances) of termination of the merger agreement,              

then BioChem shall pay to Shire a break fee of $110 million not later than two  
days following consummation of the transaction referred to above.               

If Shire terminates the merger agreement because BioChem's board of     
directors fails to recommend approval of the merger to its shareholders or      
adversely modifies or qualifies or withdraws its recommendation, then BioChem   
shall pay to Shire a break fee of $110 million not later than two business days 
after the termination date.                                                     

If BioChem terminates the merger agreement because Shire has failed to  
recommend approval of the merger to its shareholders or Shire has adversely     
modified or qualified or withdrawn its recommendation, then Shire shall pay to  
BioChem, not later than two business days after the termination date, a break   
fee of $40 million.                                                             

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THE OPTION AGREEMENT

GENERAL                                                                         

At the same time of the execution of the merger agreement and as an     
inducement and condition to entering into the merger agreement, we entered into 
an option agreement with BioChem. The following description sets forth the      
material provisions of the option agreement but is qualified in its entirety by 
reference to the option agreement, which is attached as Annex C to this proxy   
statement and incorporated herein by reference in its entirety.                 

Under the option agreement, BioChem granted us an irrevocable option to 
purchase a number of shares representing up to 19.9% of the issued and          
outstanding shares of common stock of BioChem as of December 8, 2000 (on an     
undiluted basis) at a price per share in cash equal to $37.00.                  

The option agreement provides that we may exercise the option prior to  
termination of the option agreement, in whole or in part, by delivering a       
written notice, upon the occurrence of any event that entitles us to receive a  
payment of $110 million from BioChem payable according to the terms of the      
merger agreement.                                                               

    To the extent the option has not been exercised, the option will expire upon
the earlier of the effective time or termination of the merger agreement in     
accordance with its terms unless we are entitled to receive the $110 million    
payment from BioChem, in which case the option will expire 180 days after       
termination of the merger agreement.                                            

 Arrangements such as the option agreement are customarily entered into in
connection with corporate mergers and acquisitions in an effort to increase the 
likelihood that the transactions will be consummated in accordance with their   
terms, and to compensate the grantee for the efforts undertaken and the         
expenses, losses and opportunity costs incurred by it in connection with the    
transactions if they are not consummated under certain circumstances involving  
an acquisition or potential acquisition of the issuer by a third party. The     
option agreement was entered into to accomplish these objectives.               

NOTICE OF EXERCISE                                                              

  According to the terms of the option agreement, we may exercise the option
by:                                                                             

  - sending BioChem a written notice specifying the number of BioChem shares
to be purchased; and                                                

- paying the exercise price by certified check or wire transfer.        

MAXIMUM PROCEEDS                                                                

The option agreement provides that the gross proceeds received by us in 
connection with any sales or dispositions of shares from the exercise of the    
option (less reasonable and customary commissions and any dividends received by 
us declared on the option shares) together with the $110 million payment cannot 
exceed:                                                                         

- $120,000,000; plus                                                    

   - the product of $37.00 and the number of shares of BioChem purchased by us
under the option.                                                   

If such gross proceeds do exceed this amount, the excess amount shall be
remitted by us to BioChem or deducted from the $110 million payment to be made  
by BioChem.                                                                     

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INCORPORATION OF CERTAIN INFORMATION BY REFERENCE 

 THE SEC ALLOWS THIS PROXY STATEMENT TO INCORPORATE BY REFERENCE IMPORTANT
BUSINESS AND FINANCIAL INFORMATION WHICH IS NOT PRESENTED IN THIS DOCUMENT OR   
DELIVERED WITH THIS DOCUMENT. DOCUMENTS RELATING TO THIS INFORMATION, EXCLUDING 
EXHIBITS TO THOSE DOCUMENTS UNLESS THEY ARE SPECIFICALLY INCORPORATED BY        
REFERENCE IN THIS DOCUMENT, ARE AVAILABLE WITHOUT CHARGE UPON REQUEST TO THE    
COMPANY SECRETARY, SHIRE PHARMACEUTICALS GROUP PLC, EAST ANTON, ANDOVER,        
HAMPSHIRE SP10 5RG, ENGLAND. TELEPHONE REQUESTS MAY BE DIRECTED TO              
(44) 1-264-333-455. TO ENSURE TIMELY DELIVERY OF DOCUMENTS, PLEASE MAKE YOUR    
REQUEST NO LATER THAN [      ], 2001.                                           

  The following documents filed with the SEC by Shire (File No. 0-29630) are
incorporated in this document by reference:                                     

- Annual Report on Form 10-K for the year ended December 31, 1999, as   
amended;                                                            

- Quarterly Reports on Form 10-Q for the quarters ended March 31, 2000, 
June 30, 2000 and September 30, 2000;                               

 - Current Reports on Form 8-K filed on March 1, 2000, September 20, 2000,
December 11, 2000 and December 12, 2000; and                        

- Proxy Statement for the 1999 annual meeting of shareholders.          

    The following documents filed with the SEC by BioChem (File No. 0-19539) are
incorporated in this document by reference:                                     

- Annual Report on Form 20-F for the year ended December 31, 1999.      

- Current Reports on Form 6-K filed on the following dates in 2000:     

- January 11;                                                     

- January 27;                                                     

- February 15;                                                    

- March 6;                                                        

- March 10;                                                       

- March 15;                                                       

- April 3;                                                        

- April 18;                                                       

- April 26;                                                       

- May 2;                                                          

- May 24;                                                         

- June 19;                                                        

- June 27;                                                        

- July 11;                                                        

- July 19;                                                        

- July 26;                                                        

- August 2;                                                       

- September 22;                                                   

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- October 27;                                                     

- November 1;                                                     

- November 15;                                                    

- November 20;                                                    

- December 1;                                                     

- December 11;                                                    

- December 13;                                                    

- December 18; and                                                

- December 22.                                                    

Any future filings by Shire or BioChem under Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Proxy Statement and    
prior to the date of the general meeting are also incorporated in this document 
by reference. Any of these filings will automatically update and replace the    
information that appears or is incorporated in this Proxy Statement.            

No person is authorized to give any information or to make any          
representations not contained in this Proxy Statement or in the documents       
incorporated in this document by reference in connection with the solicitation  
and the offering made by this document. If given or made, such information or   
representation should not be relied upon as having been authorized by us. This  
Proxy Statement does not constitute the solicitation of a proxy from any person,
in any jurisdiction in which it is unlawful to make this proxy solicitation.    
Neither the delivery of this Proxy Statement nor any distribution of the        
securities made under this Proxy Statement will, under any circumstances, create
an implication that there has been no change in our affairs since the date of   
this Proxy Statement other than as set forth in the documents incorporated in   
this document by reference.                                                     

WHERE YOU CAN FIND MORE INFORMATION 

   We are subject to the informational requirements of the Exchange Act, which
means that we file reports, proxy statements and other information, with the    
SEC. You can inspect and copy those reports, proxy statements and other         
information at the SEC's public reference room located at Judiciary Plaza, 450  
Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the public        
reference facilities in the SEC's regional offices located at: 7 World Trade    
Center, 13th Floor, New York, New York 10048, and at Citicorp Center, 500 West  
Madison Street, Suite 1400, Chicago, Illinois 60661. You can obtain copies of   
this material at prescribed rates by writing to the Securities and Exchange     
Commission, Public Reference Section, 450 Fifth Street, N.W., Washington, D.C.  
20549. Information on the operation of the Public Reference Room may be obtained
by calling the SEC toll free at 1-800-SEC-0330. The SEC also maintains an       
internet Website that contains reports, proxy and information statements and    
other information regarding registrants such as us that file electronically with
the SEC. The address of this Website is http://www.sec.gov.                     

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

  Statements contained in this Proxy Statement 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 commercialization, 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 10-K by Shire with the SEC.                                

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TABLE OF CONTENTS 

                                                                [Download Table]

                                                                PAGE  
                                                              --------
                                                                      
SUMMARY.....................................................      2   
General.....................................................      2   
The Companies...............................................      2   
    Exchange Ratio..........................................      3   
    The Exchangeable Shares.................................      3   
The Extraordinary General Meeting...........................      4   
    Date, Time, Place and Purpose...........................      4   
    Record Date; Shares Entitled to Vote....................      4   
    Required Vote...........................................      4   
    Revocability of Proxies.................................      4   
    Benefits of the Merger..................................      4   
    Recommendation of the Board of Directors................      6   
    Reasons for the Merger..................................      6   
    Opinion of Financial Advisor............................      6   
    Appraisal Rights........................................      6   
    Anticipated Accounting Treatment........................      6   
    Conditions to the Merger................................      6   
    Effective Time of the Merger............................      6   
    Termination and Payment of Break Fees...................      7   
    The Option Agreement....................................      7   
    Governmental and Regulatory Matters.....................      7   
    Court Approval..........................................      8   
    Special Resolution......................................      8   
    Market Price Information................................     22   
SHAREHOLDERS ENTITLED TO VOTE AND SHARES OUTSTANDING........     23   
RISK FACTORS................................................     24   
    Risk Factors Relating to the Merger.....................     24   
    Risk Factors Relating to BioChem........................     24   
    Risk Factors Relating to Shire..........................     28   
DESCRIPTION OF BIOCHEM......................................     29   
    Therapeutic Products....................................     30   
    Vaccine Products........................................     43   
    Computer-Assisted Detection Products....................     48   
    Significant Agreements..................................     50   
SHIRE AFTER THE MERGER......................................     52   
THE EXTRAORDINARY GENERAL MEETING...........................     56   
THE MERGER..................................................     58   
    Background of the Merger................................     58   
    Reasons for the Merger..................................     60   
    Opinion of Shire's Financial Adviser....................     61   
    Governmental Regulation.................................     65   
    Anticipated Accounting Treatment and Effects............     67   
THE MERGER AGREEMENT........................................     68   
    General; Effective Time and Effects of the Merger.......     68   
    Directors of Shire Immediately Following the Merger.....     68   
    Conversion of BioChem Shares............................     68   
    Exchange Ratio..........................................     69   

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                                                                [Download Table]

                                                                PAGE  
                                                              --------
                                                                      
    Representations and Warranties..........................     69   
    Covenants...............................................     70   
    No Solicitation.........................................     70   
    Conditions to Closing...................................     71   
    Termination and Payment of Break Fees...................     73   
THE OPTION AGREEMENT........................................     75   
    General.................................................     75   
    Notice of Exercise......................................     75   
    Maximum Proceeds........................................     75   
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE...........     76   
WHERE YOU CAN FIND MORE INFORMATION.........................     77   
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING                       
  STATEMENTS................................................     77   

Annex A--Merger Agreement                                                       

Annex B--Plan of Arrangement                                                    

Annex C--Option Agreement                                                       

Annex D--Opinion of Deutsche Bank                                               

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                                                                         ANNEX A

MERGER AGREEMENT

DATED AS OF DECEMBER 10, 2000 

AMONG 

BIOCHEM PHARMA INC. 

3829341 CANADA INC. 

AND 

SHIRE PHARMACEUTICALS GROUP PLC 

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TABLE OF CONTENTS 

                                                                [Download Table]

                                                                          PAGE  
                                                                        --------
                                                                                
ARTICLE I THE ARRANGEMENT..........................................        A-1  

   1.1    A-Closing...................................................     A-1  

   1.2    A-Effective Date............................................     A-1  

   1.3    A-Implementation Steps by BioChem...........................     A-1  

   1.4    A-Implementation Steps by Shire.............................     A-2  

   1.5    A-Interim Order.............................................     A-2  

   1.6    A-Articles of Arrangement...................................     A-2  

   1.7    A-BioChem Shares Options....................................     A-3  

   1.8    A-BioChem Deferred Share Unit Plans and Restricted Share              
            Unit Plan.................................................     A-3  

   1.9    A-Certain Adjustments.......................................     A-3  

ARTICLE II EXCHANGE OF CERTIFICATES................................        A-4  

   2.1    A-Exchange Fund.............................................     A-4  

   2.2    A-No Further Ownership Rights in BioChem Common Shares......     A-4  

   2.3    A-No Fractional Shire Shares................................     A-4  

   2.4    A-Termination of Exchange Fund..............................     A-4  

   2.5    A-No Liability..............................................     A-4  

   2.6    A-Investment of the Exchange Fund...........................     A-4  

   2.7    A-Lost Certificates.........................................     A-4  

   2.8    A-Withholding Rights........................................     A-5  

   2.9    A-Affiliates................................................     A-5  

ARTICLE III REPRESENTATIONS AND WARRANTIES.........................        A-5  

   3.1    A-Representations and Warranties of Shire...................     A-5  

   3.2    A-Representations and Warranties of BioChem.................    A-12  

   3.3    A-Representations and Warranties of Shire and Exchangeco....    A-20  

ARTICLE IV COVENANTS RELATING TO CONDUCT OF BUSINESS...............       A-20  

   4.1    A-Covenants of Shire........................................    A-20  

   4.2    A-Covenants of BioChem......................................    A-23  

   4.3    A-Governmental Filings......................................    A-26  

   4.4    A-Control of Other Party's Business.........................    A-26  

ARTICLE V ADDITIONAL AGREEMENTS....................................       A-26  

   5.1    A-Preparation of Proxy Statement, Form S-3, Circular,                 
            Listing Particulars and Class 1 Circular..................    A-26  

   5.2    A-Shire Board of Directors..................................    A-29  

   5.3    A-Access to Information.....................................    A-29  

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                                                                          PAGE  
                                                                        --------
                                                                                
   5.4    A-Reasonable Best Efforts...................................    A-29  

   5.5    A-BioChem Acquisition Proposals.............................    A-30  

   5.6    A-Shire Acquisition Proposals...............................    A-31  

   5.7    A-Employee Benefits Matters.................................    A-33  

   5.8    A-Fees and Expenses.........................................    A-33  

   5.9    A-Directors' and Officers' Indemnification and Insurance....    A-33  

   5.10   A-Public Announcements......................................    A-34  

   5.11   A-Listing of Shire Shares...................................    A-34  

   5.12   A-Affiliates................................................    A-34  

ARTICLE VI CONDITIONS PRECEDENT....................................       A-34  

   6.1    A-Conditions to Each Party's Obligation to Effect the                 
            Arrangement...............................................    A-34  

   6.2    A-Additional Conditions to Obligations of Shire and                   
            Exchangeco................................................    A-35  

   6.3    A-Additional Conditions to Obligations of BioChem...........    A-36  

ARTICLE VII TERMINATION............................................       A-37  

   7.1    A-Termination...............................................    A-37  

   7.2    A-Effect of Termination.....................................    A-38  

   7.3    A-Extension; Waiver.........................................    A-38  

ARTICLE VIII AMENDMENT.............................................       A-39  

   8.1    A-Amendment.................................................    A-39  

   8.2    A-Mutual Understanding Regarding Amendments.................    A-39  

   8.3    A-Amendment.................................................    A-39  

ARTICLE IX GENERAL PROVISIONS......................................       A-39  

   9.1    A-Non-Survival of Representations, Warranties and                     
            Agreements................................................    A-39  

   9.2    A-Notices...................................................    A-39  

   9.3    A-Interpretation............................................    A-40  

   9.4    A-Counterparts..............................................    A-40  

   9.5    A-Entire Agreement; No Third Party Beneficiaries............    A-40  

   9.6    A-Governing Law.............................................    A-41  

   9.7    A-Severability..............................................    A-41  

   9.8    A-Assignment................................................    A-41  

   9.9    A-Submission to Jurisdiction; Waivers.......................    A-41  

   9.10   A-Currency..................................................    A-41  

   9.11   A-Enforcement...............................................    A-42  

   9.12   A-Definitions...............................................    A-42  

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LIST OF EXHIBITS AND SCHEDULES

                                                                [Download Table]

EXHIBIT                 TITLE                                   
-------                 -----                                   
                                                                
A                       Plan of Arrangement                     

1.3(b)                  Arrangement Resolution                  

1.4(a)                  Shire Resolution                        

1.4(c)                  Exchange Trust Agreement                

1.4(e)                  Support Agreement                       

5.2                     Board of Directors and Officers of Shire

5.11                    Form of Affiliate Letter (BioChem)      

                                                                [Download Table]

SCHEDULES                                         
---------                                         
                                                  
Shire Disclosure Schedule                         

BioChem Disclosure Schedule                       

A-iii 

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 MERGER AGREEMENT, dated as of December 10, 2000 (this "Agreement"), among
Shire Pharmaceuticals Group Plc, a company registered in England under registry 
number 2883758 ("SHIRE"), 3829341 Canada Inc., a corporation incorporated under 
the laws of Canada and an indirect wholly owned subsidiary of Shire             
("EXCHANGECO"), and BioChem Pharma Inc., a corporation incorporated under the   
laws of Canada ("BIOCHEM"). Terms not otherwise defined herein are defined in   
Section 8.11.                                                                   

W I T N E S S E T H:

 WHEREAS, the Boards of Directors of BioChem, Shire and Exchangeco deem it
advisable and in the best interests of each corporation and its respective      
shareholders that BioChem and Shire engage in a business combination in order to
advance the long-term strategic business interests of BioChem and Shire;        

    WHEREAS, the combination of BioChem and Shire shall be effected by the terms
of this Agreement through a plan of arrangement, pursuant to Section 192 of the 
Canada Business Corporation Act (the "CBCA"), of Exchangeco, Shire and BioChem; 

WHEREAS the Arrangement is intended to (i) provide to holders of BioChem
Common Shares who are residents of Canada for purposes of the ITA with the      
opportunity to dispose of their BioChem Common Shares in return for Exchangeable
Shares on a tax-deferred or "ROLLOVER" basis for Canadian income tax purposes;  
and (ii) be treated as a "POOLING OF INTERESTS" for financial reporting purposes
under United States generally accepted accounting principles;                   

WHEREAS, in order to induce Shire to enter into this Agreement and to   
consummate the Arrangement, concurrently with the execution and delivery of this
Agreement, BioChem is entering into a share option agreement with Shire pursuant
to which BioChem has granted to Shire an option, exercisable under the          
circumstances specified therein, to purchase up to 19.9% of the outstanding     
BioChem Common Shares as of December 8, 2000 on an undiluted basis;             

NOW, THEREFORE, in consideration of the foregoing and the respective    
representations, warranties, covenants and agreements set forth in this         
Agreement, and intending to be legally bound hereby and thereby, the parties    
hereto agree as follows:                                                        

ARTICLE I 
THE ARRANGEMENT 

1.1  CLOSING.  Subject to the conditions set forth in Article VI and the
termination rights set forth in Article VII, the closing of the Arrangement (the
"CLOSING") will take place on the first Business Day after the satisfaction or  
waiver (subject to applicable law) of the conditions (excluding conditions that,
by their nature, cannot be satisfied until the Closing Date) set forth in       
Article VI, unless this Agreement has been terminated pursuant to its terms or  
unless another time or date is agreed to in writing by the parties hereto (the  
actual time and date of the Closing being referred to herein as the "CLOSING    
DATE"). The Closing shall be held at the offices of Stikeman Elliott, 1155      
Rene-Levesque Blvd. West, 40th Floor, Montreal, Quebec, unless another place is 
agreed to in writing by the parties hereto.                                     

 1.2  EFFECTIVE DATE.  At the Closing the parties shall take those actions
set forth in this Article I. The Arrangement shall become effective upon the    
date shown on the certificate of arrangement to be issued by the Director under 
the CBCA (such date and time the Arrangement becomes effective being the        
"EFFECTIVE DATE").                                                              

1.3  IMPLEMENTATION STEPS BY BIOCHEM.  BioChem covenants and agrees that
BioChem shall:                                                                  

 (a) subject to the terms of this Agreement, as soon as reasonably
    practicable, apply in a manner acceptable to Shire, acting reasonably, under
  Section 192 of the CBCA for an order approving the Arrangement and for the
  Interim Order, and thereafter proceed with and diligently seek the Interim
Order;                                                                  

A-1 

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        (b) subject to the terms of this Agreement, convene and hold the BioChem
Shareholders Meeting for the purpose of considering the Arrangement     
Resolution;                                                             

    (c) except as required for quorum purposes, not adjourn, postpone or
cancel (or propose for adjournment, postponement or cancellation) the   
    BioChem Shareholders Meeting without Shire's prior written consent except as
required by Laws or required by the BioChem shareholders;               

       (d) use its reasonable efforts to solicit from the BioChem shareholders
  proxies in favor of the approval of the Arrangement Resolution and to take
 all other action that is necessary or desirable to secure the approval of
the Arrangement Resolution by the shareholders of BioChem, except to the
    extent that the Board of Directors of BioChem has changed its recommendation
in accordance with the terms of this Agreement;                         

     (e) subject to obtaining the approvals as are required by the Interim
  Order, proceed with and diligently pursue the application to the Court for
the Final Order;                                                        

       (f) subject to obtaining the Final Order and the satisfaction or waiver
    of the other conditions herein contained in favor of each party, send to the
Director, for endorsement and filing by the Director, the Articles of   
Arrangement and such other documents as may be required in connection   
therewith under the CBCA to give effect to the Arrangement; and         

       (g) subject to obtaining the Final Order and the satisfaction or waiver
  of the other conditions herein contained in its favor, execute the Support
Agreement and the Exchange Trust Agreement.                             

  1.4  IMPLEMENTATION STEPS BY SHIRE.  Shire covenants and agrees that Shire
shall:                                                                          

      (a) subject to the terms of this Agreement, convene and hold the Shire
 Shareholders Meeting for the purpose of considering the Shire Resolution;

    (b) except as required for quorum purposes, not adjourn, postpone or
   cancel (or propose for adjournment, postponement or cancellation) the Shire
Shareholders Meeting without BioChem's prior written consent except as  
required by Laws or required by the Shire shareholders;                 

(c) take all action that is necessary or desirable to secure the
 approval of the Shire Resolution by the Shire shareholders, except to the
  extent that the Board of Directors of Shire has changed its recommendation
in accordance with the terms of this Agreement; and,                    

       (d) subject to obtaining the Final Order and the satisfaction or waiver
    of the other conditions herein contained in its favor, Shire shall and shall
cause Exchangeco to execute and deliver the Support Agreement and the   
Exchange Trust Agreement.                                               

    1.5  INTERIM ORDER.  The notice of motion for the application referred to in
Section 1.3(a) shall request that the Interim Order provide:                    

        (a) for the class of Persons to whom notice is to be provided in respect
  of the Arrangement and the BioChem Shareholders Meeting and for the manner
in which such notice is to be provided;                                 

       (b) that the requisite approval for the Arrangement Resolution shall be
   66 2/3% of the votes cast on the Arrangement Resolution by the shareholders
    of BioChem present in person or by proxy at the BioChem Shareholders Meeting
or as may be decided by the Court;                                      

(c) for the grant of the Dissent Rights; and                    

       (d) that, in all other respects, the terms, restrictions and conditions
of the bylaws and articles of amalgamation of BioChem, including quorum 
 requirements and all other matters, shall apply in respect of the BioChem
Shareholders Meeting.                                                   

1.6  ARTICLES OF ARRANGEMENT.                                           

  (a) The Articles of Arrangement shall provide, among other things, that at
the Effective Time, by virtue of the Arrangement and without any action on the  
part of the BioChem shareholders, each                                          

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issued and outstanding BioChem Common Share (other than BioChem Common Shares   
held by dissenting shareholders and cash in lieu of fractional shares) shall be 
converted (through the steps described in Exhibit A hereto) into Shire Ordinary 
Shares or Exchangeable Shares, at the election of each BioChem shareholder      
(provided that a holder who is not a Canadian resident for the purpose of the   
ITA shall not be entitled to receive Exchangeable Shares). The number of Shire  
Ordinary Shares or Exchangeable Shares into which each BioChem Common Share     
shall be converted (the "EXCHANGE RATIO") shall be determined as follows:       

                                                        [Enlarge/Download Table]

IF THE SHIRE ADSS PRICE IS:                   THE EXCHANGE RATIO SHALL BE:                 
---------------------------                   ----------------------------                 
                                                                                           
less than or equal to US $47.20.............. 2.3517                                       

greater than US $47.20 and less than          determined by dividing US $37.00 by the Shire
  US $70.80..................................   ADSs Price and multiplied by 3             

equal to or greater than US $70.80........... 1.5678                                       

  (b) Notwithstanding Section 1.6(a), if a BioChem shareholder elects, Shire
will provide such BioChem shareholder with one-third of a Shire ADSs            
(represented by Shire ADSs) for each Shire Ordinary Share such shareholder would
be entitled to receive pursuant to Section 1.6(a). Shire will pay all fees and  
expenses associated with the issuance of the Shire Ordinary Shares constituting 
Shire ADSs to Morgan Guaranty Trust Company of New York, as depositary (the     
"DEPOSITARY"), for the issuance by the Depositary of the associated Shire ADSs. 

1.7  BIOCHEM SHARES OPTIONS.  The Articles of Arrangement shall further 
provide that each BioChem Share Option that was granted pursuant to the BioChem 
Share Option Plan prior to the Effective Date, each Investissement Quebec Option
and each BioChem Warrant which has not been exercised and remains outstanding   
immediately prior to the Effective Date shall upon the Effective Date be        
adjusted and become an option or a right, as applicable, to receive the number  
of Shire Ordinary Shares or Shire ADSs that the holder of such BioChem Share    
Option, Investissement Quebec Option or BioChem Warrant would have received if  
he or she had exercised such BioChem Share Option, Investissement Quebec Option 
or BioChem Warrant immediately prior to the Effective Date. The exercise price  
for each such Shire Ordinary Share or Shire ADS under such BioChem Share Option,
Investissement Quebec Option or BioChem Warrant remaining outstanding after the 
Effective Date will be equal to (y) the aggregate exercise price immediately    
prior to the Effective Date of the BioChem Common Shares purchasable pursuant to
such BioChem Share Option, Investissement Quebec Option or BioChem Warrant      
divided by (z) the whole number of Shire Ordinary Shares or Shire ADSs deemed   
purchasable pursuant to such BioChem Share Option, Investissement Quebec Option 
or BioChem Warrant in accordance with the foregoing, rounded up to the nearest  
whole cent. It is the intent of the parties that the exchange of options        
pursuant to this Section be covered by Subsection 7(1.4) of the ITA.            

    1.8  BIOCHEM DEFERRED SHARE UNIT PLANS AND RESTRICTED SHARE UNIT PLAN.  Upon
the Effective Date, Shire shall assume all of the obligations of BioChem under  
the BioChem Deferred Share Unit Plans and the BioChem Restricted Share Unit Plan
in accordance with the terms and conditions of such plans.                      

 1.9  CERTAIN ADJUSTMENTS.  If, between the date of this Agreement and the
Effective Date, the outstanding Shire Ordinary Shares or the BioChem Common     
Shares shall have been changed into a different number of shares or different   
class by reason of any reclassification, recapitalization, share split,         
split-up, combination or exchange of shares or any extraordinary dividend       
payable in cash or property or a stock dividend or dividend payable in any other
securities shall be declared with a record date within such period, or any      
similar event shall have occurred, the number of Shire Ordinary Shares to be    
received by the holders of BioChem Common Shares shall be appropriately adjusted
to provide                                                                      

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to the holders of BioChem Common Shares the same economic effect as contemplated
by this Agreement prior to such event.                                          

ARTICLE II
EXCHANGE OF CERTIFICATES

2.1  EXCHANGE FUND.  Prior to the Effective Date, Shire shall appoint a 
commercial bank or trust company reasonably acceptable to BioChem having net    
capital of not less than $300,000,000, or a subsidiary thereof, to act as       
exchange agent hereunder for the purpose of exchanging Certificates for the     
Merger Consideration (the "EXCHANGE AGENT"). At or prior to the Effective Date, 
Shire shall and shall cause Exchangeco to deposit with the Exchange Agent, in   
trust for the benefit of holders of BioChem Common Shares, certificates         
representing the Shire Shares issuable on the Effective Date in exchange for    
BioChem Common Shares or effect the necessary CREST or other electronic         
transfers. Any cash in lieu of fractional Shire Shares (as set forth below) and 
certificates of Shire Shares deposited with the Exchange Agent shall hereinafter
be referred to as the "EXCHANGE FUND."                                          

    2.2  NO FURTHER OWNERSHIP RIGHTS IN BIOCHEM COMMON SHARES.  All Shire Shares
issued and cash paid upon conversion of BioChem Common Shares in accordance with
the terms of the Plan of Arrangement shall be deemed to have been issued or paid
in full satisfaction of all rights pertaining to the BioChem Common Shares.     

2.3  NO FRACTIONAL SHIRE SHARES.                                        

  (a) No certificates or scrip or Shire Shares representing fractional Shire
Shares or book-entry credit of the same shall be issued upon the surrender for  
exchange of Certificates and such fractional share interests will not entitle   
the owner thereof to vote or to have any rights of a shareholder of Shire or a  
holder of Shire Shares.                                                         

 (b) Notwithstanding any other provision of this Agreement, each holder of
BioChem Common Shares exchanged pursuant to this Agreement who would otherwise  
have been entitled to receive a fraction of a Shire Share (after taking into    
account all Certificates delivered by such holder) shall receive, in lieu       
thereof, cash (without interest), the whole as set forth in the Plan of         
Arrangement.                                                                    

  2.4  TERMINATION OF EXCHANGE FUND.  Any portion of the Exchange Fund which
remains undistributed to the holders of Certificates for six months after the   
Effective Date shall be delivered to Shire or otherwise on the instruction of   
Shire, and any holders of the Certificates who have not theretofore complied    
with this Article II shall thereafter look only to Shire for any cash in lieu of
fractional Shire Shares to which such holders are entitled pursuant to          
Section 2.3. Any such portion of the Exchange Fund remaining unclaimed by       
holders of Certificates five years after the Effective Date (or such earlier    
date immediately prior to such time as such amounts would otherwise escheat to  
or become property of any Governmental Entity) shall, to the extent permitted by
law, become the property of Shire free and clear of any claims or interest of   
any Person previously entitled thereto.                                         

    2.5  NO LIABILITY.  None of Shire, Exchangeco, BioChem or the Exchange Agent
shall be liable to any Person in respect of any Merger Consideration from the   
Exchange Fund delivered to a public official pursuant to any applicable         
abandoned property, escheat or similar law.                                     

  2.6  INVESTMENT OF THE EXCHANGE FUND.  The Exchange Agent shall invest any
cash included in the Exchange Fund as directed by Shire on a daily basis;       
provided, that no such investment or loss thereon shall affect the amounts      
payable to BioChem shareholders pursuant to the Plan of Arrangement and the     
other provisions of this Article II. Any interest and other income resulting    
from such investments shall promptly be paid to Shire.                          

   2.7  LOST CERTIFICATES.  If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming  
such Certificate to be lost, stolen or destroyed and, if required by Shire, the 
posting by such Person of a bond in such reasonable amount as Shire may direct  
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Certificate, the Exchange Agent will deliver in exchange for such lost, stolen  
or destroyed Certificate any cash in lieu of fractional Shire Shares pursuant to
this Agreement.                                                                 

2.8  WITHHOLDING RIGHTS.  Shire shall be entitled to deduct and withhold
from the consideration otherwise payable pursuant to this Agreement to any      
holder of BioChem Common Shares such amounts as it is required to deduct and    
withhold with respect to the making of such payment under the Code and the ITA  
and the rules and regulations promulgated thereunder, or any provision of state,
provincial, local or foreign tax law. To the extent that amounts are so withheld
by Shire, such withheld amounts shall be treated for all purposes of this       
Agreement as having been paid to the holder of the BioChem Common Shares in     
respect of which such deduction and withholding was made by Shire provided that 
such withheld amounts are actually remitted to the appropriate taxing authority.

 2.9  AFFILIATES.  Notwithstanding anything to the contrary herein, to the
fullest extent permitted by law, no certificates representing Shire Shares or   
cash shall be delivered to a Person who may be deemed an "affiliate" of BioChem 
in accordance with Section 5.11 hereof for purposes of Rule 145 under the       
Securities Act of 1933, as amended (the "SECURITIES ACT") until such Person has 
executed and delivered an Affiliate Agreement to Shire.                         

ARTICLE III 
REPRESENTATIONS AND WARRANTIES

 3.1  REPRESENTATIONS AND WARRANTIES OF SHIRE.  Except as set forth in the
Shire Disclosure Schedule delivered by Shire to BioChem prior to the execution  
of this Agreement (the "SHIRE DISCLOSURE SCHEDULE"), Shire represents and       
warrants to BioChem as follows:                                                 

(a)  ORGANIZATION AND POWER; SUBSIDIARIES.                              

       (i)  Each of Shire and its Subsidiaries is a corporation duly organized
   and validly existing under the laws of its jurisdiction of incorporation or
organization, has the requisite power and authority to own, lease and   
   operate its properties and to carry on its business as now being conducted,
except where the failure to be so organized and existing or to have such
power and authority, in the aggregate, would not have a Material Adverse
  Effect on Shire, and is duly qualified and in good standing to do business
    in each jurisdiction in which the nature of its business or the ownership or
  leasing of its properties makes such qualification necessary other than in
such jurisdictions where the failure so to qualify or to be in good     
standing, in the aggregate, would not have a Material Adverse Effect on 
Shire. The copies of the certificate of incorporation and Memorandum and
 Articles of Association of Shire, which were previously furnished or made
available to BioChem, are true, complete and correct copies of such     
documents as in effect on the date of this Agreement.                   

        (ii)  Section 3.1(a)(ii) of the Shire Disclosure Schedule sets forth all
the Subsidiaries of Shire which, as of the date of this Agreement, are  
  Significant Subsidiaries (as defined in Rule 1-02 of Regulation S-X of the
SEC). All the outstanding shares of capital stock of, or other equity   
   interests in, each such Significant Subsidiary have been validly issued and
   are fully paid and non-assessable and are, except as set forth on the Shire
  Disclosure Schedule, owned directly or indirectly by Shire, free and clear
   of all pledges, claims, liens, charges, encumbrances and security interests
of any kind or nature whatsoever (collectively "Liens") and free of any 
  other restriction (including any restriction on the right to vote, sell or
otherwise dispose of such capital stock or other ownership interests),  
    except for restrictions imposed by applicable securities laws. Except as set
    forth in the Shire SEC Reports (as defined in Section 3.1(d)) filed prior to
   the date hereof, as of the date of this Agreement, neither Shire nor any of
   its Subsidiaries directly or indirectly owns any equity or similar interest
   in, or any interest convertible into or exchangeable or exercisable for any
  equity or similar interest in, any corporation, partnership, joint venture
or other business                                                       

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association or entity (other than Subsidiaries), that is or would be    
material to Shire and its Subsidiaries taken as a whole.                

(b)  CAPITAL STRUCTURE                                                  

  (i)  As of December 7, 2000, the authorized share capital of Shire
   consisted of 400,000,000 Shire Ordinary Shares and the issued share capital
 consisted of 256,837,043 Shire Ordinary Shares. Since December 7, 2000 to
  the date of this Agreement, there have been no issuances of Shire Ordinary
Shares or any other securities of Shire other than issuances of Shire   
   Ordinary Shares pursuant to options or rights outstanding as of December 7,
 2000 under the Shire Share Option Plans. All issued and outstanding Shire
   Ordinary Shares are, and when Shire Ordinary Shares will be issued pursuant
to this Agreement, such shares will be duly authorized, validly issued, 
   fully paid and non-assessable and free of any preemptive rights. There were
   outstanding as of December 7, 2000, no options, warrants or other rights to
    acquire Shire Ordinary Shares other than rights pursuant to awards under the
Shire Pharmaceuticals Group plc Long Term Incentive Plan (the "LONG TERM
   INCENTIVE PLAN") and under the Shire Pharmaceuticals Executive Share Option
 Scheme (parts A and B), the Richwood 1993 Stock Option Plan, the Richwood
   1995 Stock Option Plan, the Shire Holdings Limited Share Option Scheme, the
Imperial Pharmaceutical Services Limited Employee Share Option Scheme   
   (Number One), the Pharmavene 1991 Stock Option Plan (as amended), the Shire
Pharmaceuticals Sharesave Scheme, the Shire Pharmaceuticals Group plc   
   Employee Stock Purchase Plan, the Roberts' Incentive Stock Option Plan, the
Shire Pharmaceuticals Group plc 2000 Executive Share Option Scheme, the 
    Roberts' 1996 Equity Incentive Plan and the Roberts' Restricted Stock Option
 Plan (together with the Long Term Incentive Plan, the "SHIRE SHARE OPTION
  PLANS") to acquire Shire Ordinary Shares representing in the aggregate the
   right to purchase approximately 9,913,338 Shire Ordinary Shares and options
(collectively, the "SHIRE SHARE OPTIONS"). Section 3.1(b) of the Shire  
Disclosure Schedule sets forth a complete and correct list, as of       
 December 7, 2000, of the number of Shire Ordinary Shares subject to Shire
   Share Options or other rights to purchase or receive Shire Ordinary Shares,
the dates of grant and the exercise prices thereof.                     

 (ii)  Except as otherwise set forth in this Section 3.1(b) and as
  contemplated by the Plan of Arrangement, as of the date of this Agreement,
there are no securities, options, warrants, calls, rights, commitments, 
  agreements, arrangements or undertakings of any kind to which Shire or any
  of its Subsidiaries is a party or by which any of them is bound obligating
  Shire or any of its Subsidiaries to issue, deliver or sell, or cause to be
  issued, delivered or sold, additional shares or other voting securities of
Shire or any of its Subsidiaries or obligating Shire or any of its      
Subsidiaries to issue, grant, extend or enter into any such security,   
option, warrant, call, right, commitment, agreement, arrangement or     
undertaking. As of the date of this Agreement, there are no outstanding 
obligations of Shire or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any shares of Shire or any of its Subsidiaries.       

(c)  AUTHORITY; NO CONFLICTS.                                           

        (i)  Shire has all requisite corporate power and authority to enter into
this Agreement and to consummate the transactions contemplated hereby,  
subject to the adoption of this Agreement and the Arrangement by the    
  Required Shire Vote (the "SHIRE SHAREHOLDERS APPROVAL"). The execution and
delivery of this Agreement and the consummation of the transactions     
contemplated hereby have been duly authorized by all necessary corporate
action on the part of Shire, subject to obtaining the Shire Shareholders
  Approval. This Agreement has been duly executed and delivered by Shire and
 constitutes the valid and binding agreement of Shire, enforceable against
Shire in accordance with its terms, except as such enforceability may be
 limited by bankruptcy, insolvency, reorganization, moratorium and similar
laws relating to or affecting creditors generally or by general equity  
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law).                                        

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     (ii)  The execution and delivery of this Agreement by Shire does not,
   and the consummation by Shire of the Arrangement and the other transactions
  contemplated hereby will not conflict with, or result in any violation of,
  or constitute a default (with or without notice or lapse of time, or both)
under, or give rise to a right of, or result by its terms in the        
 termination, amendment, cancellation or acceleration of any obligation or
the loss of a material benefit under, or the creation of a lien, pledge,
security interest, charge or other encumbrance on, or the loss of, any  
assets, including Intellectual Property (any such conflict, violation,  
    default, right of termination, amendment, cancellation or acceleration, loss
    or creation, a "VIOLATION") pursuant to: (A) any provision of the Memorandum
   and Articles of Association or similar organizational documents of Shire or
    any Significant Subsidiary of Shire, or (B) except as in the aggregate would
   not have a Material Adverse Effect on Shire, subject to obtaining or making
    the consents, approvals, orders, authorizations, registrations, declarations
and filings referred to in paragraph (iii) below, any loan or credit    
agreement, note, mortgage, bond, indenture, lease, benefit plan or other
  agreement, obligation, instrument, permit, concession, franchise, license,
judgment, order, decree, statute, law, ordinance, rule or regulation    
applicable to Shire, any Significant Subsidiary of Shire, or their      
respective properties or assets.                                        

        (iii)  No consent, approval, order or authorization of, or registration,
   declaration or filing with, any supranational, national, state, provincial,
 municipal, local or foreign government, any instrumentality, subdivision,
 court, administrative agency or commission or other authority thereof, or
 any quasi-governmental or private body exercising any regulatory, taxing,
importing or other governmental or quasi-governmental authority (a      
"GOVERNMENTAL ENTITY"), is required by or with respect to Shire or any  
 Subsidiary of Shire in connection with the execution and delivery of this
Agreement by Shire or the consummation of the Arrangement and the other 
transactions contemplated hereby, except for those required under or in 
    relation to (A) the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR ACT"), (B) the Competition Act (Canada) (the "CA"),   
(C) state securities or "blue sky" laws (the "BLUE SKY LAWS"), (D) the  
Securities Act, (E) the Canadian Securities Laws, (F) the Exchange Act, 
(G) the CBCA with respect to the filing of the Articles of Arrangement, 
  (H) the Financial Services Act 1986, (I) the Listing Rules or the Rules of
the LSE, (J) the Investment Canada Act (the "ICA"), (K) the consent of a
   Canadian court to the Plan of Arrangement and (L) such consents, approvals,
    orders, authorizations, registrations, declarations and filings the failures
of which to make or obtain, in the aggregate, would not have a Material 
Adverse Effect on Shire. Consents, approvals, orders, authorizations,   
    registrations, declarations and filings required under or in relation to any
of the foregoing clauses (A) through (K) are hereinafter referred to as 
"NECESSARY CONSENTS."                                                   

(d)  REPORTS AND FINANCIAL STATEMENTS.                                  

        (i)  Shire has filed all required registration statements, prospectuses,
reports, schedules, forms, statements and other documents required to be
   filed by it with the SEC since January 1, 1999 (collectively, including all
exhibits thereto, the "SHIRE SEC REPORTS"). No Subsidiary of Shire is   
required to file any form, report, registration statement, prospectus or
other document with the SEC. None of the Shire SEC Reports, as of their 
respective dates (and, if amended or superseded by a filing prior to the
date of this Agreement or the Closing Date, then on the date of such    
  filing), contained or will contain any untrue statement of a material fact
or omitted or will omit to state a material fact required to be stated  
therein or necessary to make the statements therein, in light of the    
circumstances under which they were made, not misleading. Each of the   
    financial statements (including the related notes) included in the Shire SEC
Reports presents fairly, in all material respects, the consolidated     
   financial position and consolidated results of operations and cash flows of
 Shire and its consolidated Subsidiaries as of the respective dates or for
the respective periods set forth therein, all in conformity with GAAP   
  consistently applied during the periods involved except as otherwise noted
therein, and subject, in the case of the unaudited interim financial    
statements, to the absence of notes and normal year-end adjustments that
have not been                                                           

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and are not expected to be material in amount. All of such Shire SEC    
  Reports, as of their respective dates (and as of the date of any amendment
to the respective Shire SEC Report), complied as to form in all material
respects with the applicable requirements of the Securities Act and the 
Exchange Act and the rules and regulations promulgated thereunder.      

     (ii)  Except as disclosed in the Shire SEC Reports filed prior to the
 date hereof, since December 31, 1999, Shire and its Subsidiaries have not
  incurred any liabilities that are of a nature that would be required to be
   disclosed on a balance sheet of Shire and its Subsidiaries or the footnotes
 thereto prepared in conformity with GAAP, other than liabilities that, in
the aggregate, would not have a Material Adverse Effect on Shire.       

(e)  INFORMATION SUPPLIED.                                              

    (i)  None of the information supplied or to be supplied by Shire for
   inclusion or incorporation by reference in the Proxy Statement will, at the
   time it is filed with the SEC or at any time it is amended or supplemented,
contain any untrue statement of a material fact or omit to state any    
material fact required to be stated therein or necessary to make the    
   statements therein not misleading in light of the circumstances under which
   they were made. The Proxy Statement will, on the date it is first mailed to
 Shire shareholders and at the time of the Shire Shareholders Meeting, not
contain any untrue statement of a material fact or omit to state any    
 material fact required to be stated therein or necessary in order to make
   the statements therein, in light of the circumstances under which they were
made, not misleading. The Proxy Statement will comply as to form in all 
 material respects with the requirements of the Exchange Act and the rules
and regulations of the SEC thereunder.                                  

      (ii)  Notwithstanding the foregoing provisions of this Section 3.1(e),
 no representation or warranty is made by Shire with respect to statements
made in the Proxy Statement based on information supplied by BioChem for
inclusion or incorporation by reference therein or in the Listing       
Particulars or Class 1 Circular.                                        

  (f)  BOARD APPROVAL.  The Board of Directors of Shire, by resolutions duly
adopted at a meeting duly called and held and not subsequently rescinded or     
modified in any way (the "SHIRE BOARD APPROVAL"), has duly (i) determined that  
this Agreement and the Arrangement are fair to and in the best interests of     
Shire and its shareholders, and (ii) approved this Agreement and the            
Arrangement, and (iii) subject to Section 5.1(f), resolved to recommend that the
shareholders of Shire approve this Agreement and the Arrangement and directed   
that this Agreement and the Arrangement be submitted for consideration at the   
Shire Shareholders Meeting.                                                     

  (g)  VOTE REQUIRED.  The approval of this Agreement and the Arrangement by
the Required Shire Vote is the only vote of the holders of any class or series  
of Shire share capital necessary to approve the transactions contemplated by    
this Agreement and the Arrangement.                                             

(h)  LITIGATION; COMPLIANCE WITH LAWS.                                  

    (i)  Except as disclosed in the Shire SEC Reports filed prior to the
date of this Agreement, there are no suits, actions, complaints or      
   proceedings (collectively "ACTIONS") pending or, to the knowledge of Shire,
   threatened, against or affecting Shire or any Subsidiary of Shire which, in
   the aggregate, would have a Material Adverse Effect on Shire, nor are there
any judgments, decrees, injunctions, rules or orders of any Governmental
 Entity or arbitrator outstanding against Shire or any Subsidiary of Shire
which, in the aggregate, would have a Material Adverse Effect on Shire. 

     (ii)  Except as disclosed in the Shire SEC Reports filed prior to the
date of this Agreement and except as, in the aggregate, would not have a
Material Adverse Effect on Shire, Shire and its Subsidiaries hold all   
permits, licenses, variances, exemptions, orders and approvals of all   
Governmental Entities which are necessary for the operation of the      
businesses of Shire and its Subsidiaries, taken as a whole (the "SHIRE  
 PERMITS"). Shire and its Subsidiaries are in compliance with the terms of
   the Shire Permits, except where the failure to so comply, in the aggregate,
would                                                                   

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not have a Material Adverse Effect on Shire. Except as disclosed in the 
  Shire SEC Reports filed prior to the date of this Agreement, neither Shire
nor any of its Subsidiaries is in violation of, and Shire and its       
 Subsidiaries have not received any notices of violations with respect to,
  any laws, ordinances or regulations of any Governmental Entity, except for
    violations which, in the aggregate, would not have a Material Adverse Effect
on Shire.                                                               

(i)  ABSENCE OF CERTAIN CHANGES OR EVENTS.                              

(i)  Except for general tax matters and matters relating to the 
  pharmaceutical industry generally, liabilities incurred in connection with
  this Agreement or the transactions contemplated hereby or disclosed in the
  Shire SEC Reports filed prior to the date of this Agreement, and except as
permitted by Section 4.1, since September 30, 2000, Shire and its       
Subsidiaries have conducted their business only in the ordinary course. 
    Except as disclosed in the Shire SEC Reports filed prior to the date of this
Agreement, since September 30, 2000, there have not been any changes,   
   circumstances or events which, in the aggregate, have had, or would have, a
Material Adverse Effect on Shire.                                       

(ii)  Since September 30, 2000 and except for as set forth on   
   Section 3.1(i)(ii) of the Shire Disclosure Schedule, there has not been any
(A) adoption by Shire or any of its Subsidiaries of any Benefit Plan to 
    which any of the officers of Shire or a Subsidiary of Shire is a participant
or (B) amendment to any Shire Benefit Plan that resulted in any material
increase in the benefits received or to be received thereunder by any   
   officer of Shire. Since September 30, 2000, there has not been any material
  increase in the aggregate benefits provided under the Shire Benefit Plans.

(j)  ENVIRONMENTAL MATTERS.                                             

    (i)  Except as disclosed in the Shire SEC Reports filed prior to the
date of this Agreement, Shire and its Subsidiaries, and their respective
business and operations, (A) are in compliance with all applicable      
Environmental Laws (including any Environmental Permits) in the United  
States and in other applicable foreign jurisdictions with environmental 
  regulatory jurisdiction over Shire or any of its Subsidiaries and (B) have
  obtained all Environmental Permits which are required in order to carry on
   their respective businesses and operations as presently conducted under all
    applicable Environmental Laws, where non-compliance or failure to obtain the
  same would have a Material Adverse Effect on Shire. Except as disclosed in
the Shire SEC Reports filed prior to the date of this Agreement, neither
  Shire nor its Subsidiaries with respect to their respective businesses and
  operations have at any time received any written notice, written notice of
  default, written notice of cancellation or revocation, orders, summons, or
  notice of judgment or commencement of proceedings of any nature related to
 any breach, liability or remedial action, or alleged breach, liability or
    remedial action, of or arising under Environmental Laws or any Environmental
  Permits which would have a Material Adverse Effect on Shire. Neither Shire
nor its Subsidiaries with respect to their respective businesses and    
  operations have at any time given any written undertakings with respect to
remedying any breach of Environmental Laws or Environmental Permits or  
   otherwise satisfying requirements under Environmental Laws or Environmental
  Permits which have not been duly performed in accordance with the terms of
   such undertakings, which breach or other requirements would have a Material
Adverse Effect on Shire.                                                

    (ii)  To the knowledge of Shire, without inquiry to any Governmental
   Entity, (A) none of the properties currently or formerly owned or leased by
Shire and its Subsidiaries is identified by any Governmental Entity for 
   investigation or clean-up pursuant to any Environmental Laws, which in each
of the foregoing instances would result in a Material Adverse Effect on 
Shire and (B) there have been no releases in violation of any applicable
    Environmental Laws of Hazardous Substances on any currently owned, leased or
    operated property or formerly owned, leased or operated property of Shire or
   its Subsidiaries, which would result in a Material Adverse Effect on Shire.

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      (iii)  Except as disclosed in the Shire SEC Reports filed prior to the
   date of this Agreement, to the knowledge of Shire, neither Shire nor any of
 its Subsidiaries is subject to any Environmental Losses that would have a
Material Adverse Effect on Shire.                                       

(k)  INTELLECTUAL PROPERTY.  Except as in the aggregate would not have a
Material Adverse Effect on Shire and except as disclosed in the Shire SEC       
Reports filed prior to the date of the Agreement, to the knowledge of Shire:    
(i) Shire and each of its Subsidiaries owns (in each case, free and clear of any
Liens), controls or has license to use, all Intellectual Property used in or    
necessary for the conduct of its business as currently conducted; (ii) Shire and
its Subsidiaries are not infringing or otherwise violating the Intellectual     
Property of any Person and are acting in accordance with any applicable license 
pursuant to which Shire or any Subsidiary acquired the right to use any         
Intellectual Property; (iii) no Person is challenging or claiming the invalidity
or unenforceability of any Intellectual Property owned or controlled by and/or  
licensed to Shire or its Subsidiaries used in or necessary for the conduct of   
its business as currently conducted; and (iv) neither Shire nor any of its      
Subsidiaries has received any written notice or otherwise has knowledge of any  
pending or threatened claim, order or proceeding with respect to any            
Intellectual Property owned, controlled, licensed or used by Shire or its       
Subsidiaries and no Intellectual Property owned, controlled and/or licensed by  
Shire or its Subsidiaries is being used or enforced in a manner that would      
result in the abandonment, cancellation or unenforceability of such Intellectual
Property. For purposes of this Agreement, "Intellectual Property" shall mean    
patents, applications for patents (including, without limitation, utility models
and all divisions, continuations, continuations in part and renewal             
applications), and any renewals, extensions or reissues thereof, in any         
jurisdiction, trademarks (registered or unregistered), service marks, brand     
names, domain names, certification marks, trade dress and other indications of  
origin, the goodwill associated with the foregoing and registrations in any     
jurisdiction of, and applications in any jurisdiction to register, the          
foregoing, including any extension, modification or renewal of any such         
registration or application; inventions, discoveries and ideas, whether         
patentable or not, in any jurisdiction; nonpublic information, trade secrets and
confidential or proprietary information and rights in any jurisdiction to limit 
the use or disclosure thereof by any person; writings and other works, whether  
copyrightable or not, in any jurisdiction, and any renewals or extensions       
thereof and any similar intellectual property or proprietary rights.            

(l)  BROKERS OR FINDERS.  No agent, broker, investment banker, financial
advisor or other firm or Person is or will be entitled to any broker's or       
finder's fee or any other similar commission or fee in connection with any of   
the transactions contemplated by this Agreement based upon arrangements made by 
or on behalf of Shire, except Deutsche Bank whose fees and expenses will be paid
by Shire in accordance with Shire's agreement with such firm, copies of which   
have been provided to BioChem.                                                  

(m)  TAXES.                                                             

       (i) Each of Shire and its Subsidiaries has filed in a timely manner all
 material Tax Returns required to have been filed (or extensions have been
  duly obtained), and has paid in a timely manner all Taxes required to have
    been paid by it and has made adequate accrual for all material taxes not yet
due and payable. Each such Tax Return is complete and accurate in all   
 material respects. Any deficiencies or assessments asserted in writing by
    any taxing authority against Shire or any of its Subsidiaries have been paid
or fully settled. There are no claims or assessments pending (or, to the
best knowledge or Shire, threatened) against Shire or any of its        
   Subsidiaries for any alleged Tax deficiency and no issue has been raised in
  writing by any taxing authority or representative thereof. No extension of
the period for assessment or collection of any Tax of Shire or its      
    Subsidiaries is currently in effect and no extension of time within which to
   file any Tax Return has been requested, which Tax Return has not since been
filed.                                                                  

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   (ii) Shire is not and will not be at any time a "foreign investment
   entity" as that term is defined in the June 22, 2000 proposed amendments to
the ITA together with proposed amendments thereto as announced on       
   September 7, 2000 (the "PROPOSED AMENDMENTS"). The Exchangeable Shares will
  be and remain an "exempt interest" as that term is defined in the Proposed
Amendments.                                                             

For purposes of this Agreement: (A) "TAX" (and, with correlative meaning,       
"TAXES") means (i) any federal, state, provincial, local or foreign income,     
gross receipts, property, sales, use, license, excise, franchise, employment,   
payroll, withholding, alternative or add on minimum, ad valorem, transfer or    
excise tax, or any other tax, customs, duty, governmental fee or other like     
assessment or charge of any kind whatsoever, together with any interest or      
penalty, imposed by any governmental authority, and (ii) any transferee,        
successor or joint and several liability by contract or otherwise in respect of 
any items described in clause (i), and (B) "TAX RETURN" means any return, report
or similar statement required to be filed with respect to any Tax (including any
attached schedules), including, without limitation, any information return,     
claim for refund, amended return or declaration of estimated Tax.               

(n)  BENEFIT PLANS.                                                     

        (i) Except as disclosed in the Shire SEC Reports filed prior to the date
of this Agreement, (A) there are no registered or supplementary pension,
retirement, profit sharing, bonus, savings, deferred compensation, share
  option, purchase, appreciation, group insurance or other material employee
or retiree benefit plans, programs or arrangements, including collective
    agreements, maintained or contributed to by Shire or any of its Subsidiaries
    or in respect of which any such entity has an actual or contingent liability
(each such plan, program or arrangement, a "Plan"), (B) there are no    
 outstanding violations or defaults thereunder nor any actions, claims, or
other proceedings pending or, to the knowledge of Shire, threatened in  
   writing with respect to any of the Plans, (C) the Plans are registered, and
 have at all times been invested and administered, in accordance with Laws
   and regulatory policy and the terms of the Plans, (D) no event has occurred
    which would entitle any person to terminate any Plan or adversely affect the
 tax status of any Plan; (E) to the knowledge of Shire, there have been no
 withdrawals of surplus or contribution holiday except as permitted by Law
   and the terms of the Plans and (F) no Plan is underfunded on either a going
concern or a solvency basis as of the date of its most recent actuarial 
evaluation, where the effect of any such undisclosed Plan, violation,   
   default, action, claim, proceeding, promise, commitment, event, withdrawal,
contribution holiday, failure to comply or underfunding would, in the   
aggregate, have a Material Adverse Effect on Shire.                     

    (ii) Except as disclosed in the Shire SEC Reports filed prior to the
  date of this Agreement, none of the Plans with respect to Shire is subject
to the United States EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, as
 amended ("ERISA"). With respect to each Plan that is subject to ERISA (an
"ERISA PLAN") and any ERISA Affiliate Plan (A) if such ERISA Plan is    
  intended to be qualified under Section 401(a) of the Code, such ERISA Plan
has been determined by the United States Internal Revenue Service (the  
   "IRS") to be so qualified and each trust related to any such ERISA Plan has
    been determined to be exempt from federal income Tax under Section 501(a) of
  the Code and no circumstance has occurred or exists which might reasonably
be expected to cause such plan or trust to cease being so qualified or  
  exempt from Tax; (B) such ERISA Plan has complied in all material respects
with ERISA, and all other applicable Laws; (C) no accumulated funding   
   deficiency, as defined in Section 302 of ERISA and Section 412 of the Code,
whether or not waived, exists with respect to such Plan or any ERISA    
Affiliate Plan; (D) with respect to each single-employer ERISA Plan and 
    ERISA Affiliate Plan subject to Title IV of ERISA, as of the last day of the
most recent plan year ended prior to the date hereof, the actuarially   
determined present value of all "benefit liabilities" (as defined under 
 Section 4001(a)(16) of ERISA) under such plan, determined on the basis of
  the actuarial assumptions in effect for such plan year, did not exceed the
    then current value of the assets of such plan; and (E) none of Shire, any of
its Subsidiaries or                                                     

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 any ERISA Affiliate has incurred or expects to incur any liability to the
    United States Pension Benefit Guaranty Corporation with respect to any ERISA
  Plan or ERISA Affiliate Plan or any withdrawal liability under Title IV of
ERISA with respect to any "Multiemployer Plan", where the effect of such
event, condition, action or failure to act under (A) through (E) above  
   would, in the aggregate, have a Material Adverse Effect on Shire. Except as
disclosed in the Shire SEC Reports filed prior to the date of this      
Agreement, none of Shire, or any of its Subsidiaries maintains or       
contributes to any employee welfare benefit plan (as defined in         
   Section 3(1) of ERISA) which is subject to ERISA and which provides medical
    benefits to employees after termination of employment other than as required
by Section 601 of ERISA or other applicable Law, or the cost of which is
paid for by the covered employees.                                      

     (iii) For purposes of this Agreement, "ERISA AFFILIATE" means (A) any
   corporation which is a member of the same controlled group of corporations,
 within the meaning of Section 414(b) of the Code, as Shire or BioChem, as
 the case may be, or any of their respective Subsidiaries, as the case may
be, or (B) any partnership or trade or business (whether or not         
   incorporated) under common control, within the meaning of Section 414(c) of
the Code, with Shire or BioChem, as the case may be, or any of their    
respective Subsidiaries; "MULTIEMPLOYER PLAN" means any Plan that is a  
    "multiemployer plan" (as defined in Section 4001(a)(3) of ERISA); and "ERISA
AFFILIATE PLAN" means any single-employer plan subject to Title IV or   
Section 302 of ERISA maintained or contributed to by an ERISA Affiliate.

(o)  LICENSES.  Shire and its Subsidiaries have obtained all permits,   
concessions, grants, franchises, licenses and other federal, state, local or    
foreign governmental authorizations and approvals (collectively, "LICENSES")    
material, individually or in the aggregate, to the conduct of the business of   
Shire and its Subsidiaries taken as a whole. All of such Licenses are in full   
force and effect and, to the knowledge of Shire, will not be impaired or        
adversely affected by the Arrangement in a manner or to a degree that would have
a Material Adverse Effect on Shire. There is not pending or, to the knowledge of
Shire, threatened any domestic or foreign suit or proceeding with respect to the
suspension, revocation, cancellation, modification or non-renewal of any of such
Licenses, and no event under the control of Shire has occurred that (whether    
with notice or lapse of time, or both) would result in a suspension or          
revocation of or failure to renew any of the Licenses, the loss of which would  
have a Material Adverse Effect on Shire.                                        

(p)  POOLING OF INTERESTS.  Neither Shire nor any of its Affiliates has 
taken or agreed to take any action or failed to take any action that would      
prevent the Arrangement from being treated for financial accounting purposes as 
a "pooling of interests" in accordance with US GAAP and the regulations and     
interpretations of the SEC.                                                     

   3.2  REPRESENTATIONS AND WARRANTIES OF BIOCHEM.  Except as set forth in the
BioChem Disclosure Schedule delivered by BioChem to Shire prior to the execution
of this Agreement (the "BIOCHEM DISCLOSURE SCHEDULE"), BioChem represents and   
warrants to Shire as follows:                                                   

(a)  ORGANIZATION, STANDING AND POWER; SUBSIDIARIES.                    

(i) Each of BioChem and its Subsidiaries is a corporation duly  
organized, validly existing and in good standing under the laws of its  
  jurisdiction of incorporation or organization, has the requisite power and
authority to own, lease and operate its properties and to carry on its  
business as now being conducted, except where the failure to be so      
organized, existing and in good standing or to have such power and      
authority, in the aggregate, would not have a Material Adverse Effect on
   BioChem. Each of BioChem and its Subsidiaries is duly qualified and in good
standing to do business in each jurisdiction in which the nature of its 
business or the ownership or leasing of its properties makes such       
   qualification necessary other than in such jurisdictions where the failures
 so to qualify or to be in good standing in the aggregate would not have a
Material Adverse Effect on BioChem. The copies of the articles of       
amalgamation and bylaws of BioChem, which were                          

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previously furnished or made available to Shire, are true, complete and 
    correct copies of such documents as in effect on the date of this Agreement.

     (ii) Section 3.2(a)(ii) of the BioChem Disclosure Schedule sets forth
    all of the Subsidiaries of BioChem as of the date of this Agreement. All the
  outstanding shares of capital stock of, or other equity interests in, each
such Subsidiary have been validly issued and are fully paid and         
non-assessable and are, except as set forth on the BioChem Disclosure   
Schedule, owned directly or indirectly by BioChem, free and clear of all
 Liens and free of any other restriction (including any restriction on the
right to vote, sell or otherwise dispose of such capital stock or other 
ownership interests), except for restrictions imposed by applicable     
 securities laws or contained in the articles of such companies. Except as
  Publicly Disclosed by BioChem prior to the date of this Agreement, neither
  BioChem nor any of its Subsidiaries directly or indirectly owns any equity
   or similar interest in, or any interest convertible into or exchangeable or
exercisable for any equity or similar interest in, any corporation,     
 partnership, joint venture or other business association or entity (other
  than Subsidiaries), that is material to BioChem and its Subsidiaries taken
as a whole.                                                             

(b)  CAPITAL STRUCTURE.                                                 

        (i) As of November 24, 2000, the authorized capital of BioChem consisted
    of an unlimited number of BioChem Common Shares, of which 101,323,410 shares
were issued and outstanding. Since November 24, 2000 to the date of this
   Agreement, there have been no issuances of shares in the capital of BioChem
  or any other securities of BioChem other than issuances of shares pursuant
 to options outstanding as of November 24, 2000 under the Benefit Plans of
BioChem. All issued and outstanding shares in the capital of BioChem are
    duly authorized, validly issued, fully paid and non-assessable, and no class
of shares is entitled to preemptive rights. There were outstanding as of
   November 24, 2000 no options, warrants or other rights to acquire shares of
    BioChem other than (w) options and other rights to acquire shares of BioChem
    representing in the aggregate the right to purchase 6,873,711 BioChem Common
 Shares (collectively, the "BIOCHEM SHARE OPTIONS") under BioChem's Shares
 Option Plan (the "BIOCHEM SHARE OPTION PLAN"), and (x) options to acquire
123,476 BioChem Common Shares at an exercise price of $5.15 expiring in 
 July 2001 granted to Investissement Quebec pursuant to an agreement dated
   June 21, 1991 (the "INVESTISSEMENT QUEBEC OPTIONS"); and (y) undertaking to
   issue warrants in two tranches in 2001 and 2002 to the Government of Canada
    giving the right to acquire BioChem Common Shares at an exercise price equal
to the closing price on the TSE prior to their respective issuance, the 
    whole pursuant to an agreement dated March 31, 2000 (the "BIOCHEM WARRANTS")
and (z) the memorandum of agreement dated September 1997 with two senior
employees relating to options to acquire 40,000 BioChem Common Shares.  
   Section 3.2(b) of the BioChem Disclosure Schedule sets forth a complete and
correct list, as of November 24, 2000, of the number of BioChem Common  
Shares subject to BioChem Shares Options, the dates of grant and the    
exercise prices thereof.                                                

        (ii) No bonds, debentures, notes or other indebtedness of BioChem having
the right to vote on any matters on which its shareholders may vote     
("BIOCHEM VOTING DEBT") are issued or outstanding.                      

     (iii) Except as otherwise set forth in this Section 3.2(b), as of the
  date of this Agreement, there are no securities, options, warrants, calls,
    rights, commitments, agreements, arrangements or undertakings of any kind to
   which BioChem or any of its Subsidiaries is a party or by which any of them
   is bound obligating BioChem or any of its Subsidiaries to issue, deliver or
sell, or cause to be issued, delivered or sold, additional shares in its
   capital or other voting securities of BioChem or any of its Subsidiaries or
obligating BioChem or any of its Subsidiaries to issue, grant, extend or
enter into any such security, option, warrant, call, right, commitment, 
agreement, arrangement or undertaking. As of the date of this Agreement,
there are no outstanding obligations of BioChem                         

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 or any of its Subsidiaries to repurchase, redeem or otherwise acquire any
shares in the capital of BioChem or any of its Subsidiaries.            

(c)  AUTHORITY; NO CONFLICTS.                                           

    (i) BioChem has all requisite corporate power and authority to enter
   into this Agreement and to consummate the transactions contemplated hereby,
  subject in the case of the consummation of the Arrangement to the adoption
  of this Agreement by the Required BioChem Vote. The execution and delivery
of this Agreement and the consummation of the transactions contemplated 
 hereby have been duly authorized by all necessary corporate action on the
   part of BioChem, subject in the case of the consummation of the Arrangement
    to the adoption of this Agreement by the BioChem shareholders at the BioChem
    Shareholders Meeting. This Agreement has been duly executed and delivered by
BioChem and constitutes the valid and binding agreement of BioChem,     
enforceable against it in accordance with its terms, except as such     
enforceability may be limited by bankruptcy, insolvency, reorganization,
   moratorium and similar laws relating to or affecting creditors generally or
  by general equity principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law).                        

        (ii) The execution and delivery of this Agreement by BioChem does not or
will not, as the case may be, and the consummation by BioChem of the    
    Arrangement and the other transactions contemplated hereby will not conflict
with, or result in a Violation pursuant to: (x) any provision of the    
  articles of amalgamation or bylaws of BioChem or any Subsidiary of BioChem
  or (y) except as in the aggregate would not have a Material Adverse Effect
on BioChem or, subject to obtaining or making the consents, approvals,  
   orders, authorizations, registrations, declarations and filings referred to
in paragraph (iii) below, any loan or credit agreement, note, mortgage, 
bond, indenture, lease, benefit plan or other agreement, obligation,    
    instrument, permit, concession, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to BioChem, any  
Subsidiary of BioChem or any of their respective properties or assets.  

       (iii) No consent, approval, order or authorization of, or registration,
  declaration or filing with, any Governmental Entity is required by or with
respect to BioChem or any Subsidiary of BioChem in connection with the  
  execution and delivery of this Agreement by BioChem or the consummation of
   the Arrangement and the other transactions contemplated hereby and thereby,
    except (i) the Necessary Consents, (ii) the consents required under Canadian
  Securities Laws and by the rules and regulations of the NASDAQ and the TSE
  and (iii) such consents, approvals, orders, authorizations, registrations,
declarations and filings the failure of which to make or obtain, in the 
aggregate, would not have a Material Adverse Effect on BioChem.         

(d)  REPORTS AND FINANCIAL STATEMENTS.                                  

(i) BioChem has filed all required registration statements,     
prospectuses, reports, schedules, forms, statements, press releases and 
    other documents required to be filed by it with the OSC, the QSC and the SEC
since January 1, 1999 (collectively, including all exhibits thereto, the
  "BIOCHEM REPORTS"). No Subsidiary of BioChem is required to file any form,
    report, registration statement or prospectus or other document with the OSC,
the QSC or the SEC. None of the BioChem Reports, as of their respective 
  dates (and, if amended or superseded by a filing prior to the date of this
  Agreement or the Closing Date, then on the date of such filing), contained
  or will contain any untrue statement of a material fact or omitted or will
   omit to state a material fact required to be stated therein or necessary to
   make the statements therein, in light of the circumstances under which they
  were made, not misleading. Each of the financial statements (including the
related notes) included in the BioChem Reports presents fairly, in all  
material respects, the consolidated financial position and consolidated 
results of operations and cash flows of BioChem and its consolidated    
 Subsidiaries as of the respective dates or for the respective periods set
  forth therein, all in conformity with GAAP consistently applied during the
periods involved except as otherwise                                    

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  noted therein, and subject, in the case of the unaudited interim financial
statements, to the absence of notes and normal and recurring year-end   
adjustments that have not been and are not expected to be material in   
    amount. All of such BioChem Reports, as of their respective dates (and as of
  the date of any amendment to any such BioChem Report), complied as to form
in all material respects with the applicable requirements of Canadian   
   Securities Laws or, as the case may be, the Securities Act and the Exchange
Act and the rules and regulations promulgated thereunder.               

      (ii) Except as Publicly Disclosed by BioChem prior to the date of this
  Agreement, since September 30, 2000, BioChem and its Subsidiaries have not
  incurred any liabilities that are of a nature that would be required to be
disclosed on a balance sheet of BioChem and its Subsidiaries or the     
  footnotes thereto prepared in conformity with GAAP, other than liabilities
    that, in the aggregate, would not have a Material Adverse Effect on BioChem.

(e)  INFORMATION SUPPLIED.  None of the information supplied or to be   
supplied by BioChem for inclusion or incorporation by reference in the Proxy    
Statement will, at the time of the BioChem Shareholders Meeting, contain any    
untrue statement of a material fact or omit to state any material fact required 
to be stated therein or necessary to make the statements therein not misleading.

    (f)  BOARD APPROVAL.  The Board of Directors of BioChem, by resolutions duly
adopted by unanimous vote of those voting at a meeting duly called and held and 
not subsequently rescinded or modified in any way (the "BIOCHEM BOARD           
APPROVAL"), has duly (i) determined that this Agreement and the Arrangement are 
fair to and in the best interests of BioChem and its shareholders,              
(ii) approved this Agreement and the Arrangement and (iii) subject to           
Section 5.1(e), recommended that the shareholders of BioChem adopt this         
Agreement and approve the Arrangement and directed that this Agreement and the  
Arrangement be submitted for consideration by BioChem's shareholders at the     
BioChem Shareholders Meeting.                                                   

(g)  VOTE REQUIRED.  Subject to the Interim Order, the approval of this 
Agreement and the Arrangement by the Required BioChem Vote is the only vote of  
the holders of any class or series of BioChem share capital necessary to approve
the transactions contemplated by this Agreement and the Arrangement.            

(h)  LITIGATION; COMPLIANCE WITH LAWS.                                  

     (i) Except as Publicly Disclosed by BioChem prior to the date of this
Agreement, there are no Actions pending or, to the knowledge of BioChem,
    threatened, against or affecting BioChem or any Subsidiary of BioChem which,
  in the aggregate, would have a Material Adverse Effect on BioChem, nor are
there any judgments, decrees, injunctions, rules or orders of any       
Governmental Entity or arbitrator outstanding against BioChem or any    
    Subsidiary of BioChem which, in the aggregate, would have a Material Adverse
Effect on BioChem.                                                      

     (ii) Except as Publicly Disclosed by BioChem prior to the date of the
    Agreement and except as would, in the aggregate, not have a Material Adverse
   Effect on BioChem, BioChem and its Subsidiaries hold all permits, licenses,
variances, exemptions, orders and approvals of all Governmental Entities
necessary for the operation of the businesses of BioChem and its        
Subsidiaries, taken as a whole (the "BIOCHEM PERMITS"). BioChem and its 
    Subsidiaries are in compliance with the terms of the BioChem Permits, except
   where the failure to so comply, in the aggregate, would not have a Material
   Adverse Effect on BioChem. Except as Publicly Disclosed by BioChem prior to
  the date of this Agreement, neither BioChem nor any of its Subsidiaries is
in violation of, and BioChem and its Subsidiaries have not received any 
  notices of violations with respect to, any laws, ordinances or regulations
  of any Governmental Entity, except for violations which, in the aggregate,
would not have a Material Adverse Effect on BioChem.                    

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(i)  ABSENCE OF CERTAIN CHANGES OR EVENTS.                              

        (i) Except for liabilities incurred in connection with this Agreement or
the transactions contemplated hereby, except as Publicly Disclosed by   
BioChem prior to the date of this Agreement, and except as permitted by 
Section 4.2, since September 30, 2000, BioChem and its Subsidiaries have
conducted their business only in the ordinary course. Except as Publicly
 Disclosed by BioChem prior to the date of this Agreement, since March 31,
 2000, there have not been any changes, circumstances or events which have
   had, or would have, a Material Adverse Effect on BioChem, provided that, on
  the basis of all facts and information disclosed by BioChem to Shire as at
the date hereof, the outcome of the proceedings instituted by Emory     
University in the United States shall not, for the purpose of this      
Agreement, be considered to have a Material Adverse Effect on BioChem.  

(ii) Since September 30, 2000 and except for as set forth in    
 Section 3.2(i)(ii) of the BioChem Disclosure Schedule, there has not been
  any (A) adoption by BioChem or any of its Subsidiaries of any Benefit Plan
   to which any of BioChem's officers is a participant or (B) amendment to any
   BioChem Benefit Plan that resulted in any material increase in the benefits
received or to be received thereunder by any officer of BioChem. Since  
September 30, 2000, there has not been any material increase in the     
aggregate benefits provided under the BioChem Benefit Plans.            

(j)  ENVIRONMENTAL MATTERS.                                             

     (i) Except as Publicly Disclosed by BioChem prior to the date of this
  Agreement, BioChem and its Subsidiaries, and their respective business and
operations, (A) are in compliance with all applicable Environmental Laws
(including any Environmental Permits) in Canada and in other applicable 
foreign jurisdictions with environmental regulatory jurisdiction over   
  BioChem or any of its Subsidiaries and (B) have obtained all Environmental
   Permits which are required in order to carry on their respective businesses
and operations as presently conducted under all applicable Environmental
Laws, where non-compliance or failure to obtain the same would have a   
Material Adverse Effect on BioChem prior to the date of this Agreement. 
    Except as Publicly Disclosed by BioChem prior to the date of this Agreement,
neither BioChem nor its Subsidiaries with respect to their respective   
businesses and operations have at any time received any written notice, 
written notice of default, written notice of cancellation or revocation,
    orders, summons, or notice of judgment or commencement of proceedings of any
nature related to any breach, liability or remedial action, or alleged  
    breach, liability or remedial action, of or arising under Environmental Laws
  or any Environmental Permits which would have a Material Adverse Effect on
BioChem. Neither BioChem nor its Subsidiaries with respect to their     
respective businesses and operations have at any time given any written 
  undertakings with respect to remedying any breach of Environmental Laws or
Environmental Permits or otherwise satisfying requirements under        
Environmental Laws or Environmental Permits which have not been duly    
    performed in accordance with the terms of such undertakings, which breach or
other requirements would have a Material Adverse Effect on BioChem.     

     (ii) To the knowledge of BioChem, without inquiry to any Governmental
   Entity, (A) none of the properties currently or formerly owned or leased by
 BioChem and its Subsidiaries is identified by any Governmental Entity for
   investigation or clean-up pursuant to any Environmental Laws, which in each
of the foregoing instances would result in a Material Adverse Effect on 
  BioChem and (B) there have been no releases in violation of any applicable
    Environmental Laws of Hazardous Substances on any currently owned, leased or
   operated property or formerly owned, leased or operated property of BioChem
or its Subsidiaries, which would result in a Material Adverse Effect on 
BioChem.                                                                

       (iii) Except as publicly disclosed by BioChem prior to the date of this
Agreement, to the knowledge of BioChem, neither BioChem nor any of its  
Subsidiaries is subject to any Environmental Losses that would have a   
Material Adverse Effect on BioChem.                                     

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(k)  INTELLECTUAL PROPERTY.                                             

    (i) The BioChem Disclosure Schedule contains a worldwide list of all
  material patents and trademarks, and applications for any of the foregoing
owned, licensed or controlled by BioChem or any of its Subsidiaries.    

        (ii) Except as in the aggregate would not have a Material Adverse Effect
   on BioChem or its Subsidiaries or except as set forth in BioChem Disclosure
Schedule:                                                               

          (1) BioChem and each of its Subsidiaries owns (in each case free and
      clear of all Liens) or has license to use all Intellectual Property used
in or necessary for the conduct of their respective businesses as 
    currently conducted. Such Intellectual Property and the rights thereto
   are restricted to the Intellectual Property rights in relation to the
      products listed in Section 3.2(k) of BioChem Disclosure Schedule and are
       collectively referred to herein as the "BioChem IP Rights". Except as set
forth in Section 3.2(k) of BioChem Disclosure Schedule hereto, no 
     royalties or other payments are payable to any third party with respect
      to commercialization of any products presently sold or under development
by BioChem or its Subsidiaries listed in Section 3.2(k) of BioChem
     Disclosure Schedule or licensed by BioChem or its Subsidiaries to third
parties;                                                          

      (2) the execution, delivery and performance of this Agreement by
       BioChem or any of its Subsidiaries and the consummation by BioChem or any
  of its Subsidiaries of the transactions contemplated hereby will not
constitute a breach by BioChem or any of its Subsidiaries of any  
  instrument or agreement governing any BioChem IP Rights and will not
      (i) result in BioChem's default (subject to damages) with respect to any
       obligation contained therein, (ii) cause the modification of any terms of
    any licenses or agreements relating to any BioChem IP Rights including
but not limited to the modification of the effective rate of any  
royalties or other payments provided for in any such license or   
agreement, (iii) cause forfeiture or termination of any BioChem IP
   Rights, (iv) give rise to a right of forfeiture or termination of any
 BioChem IP Rights or (v) impair the right of BioChem, any successor
       corporation to BioChem following the Effective Date or Shire to use, sell
or license any BioChem IP Rights or portion thereof;              

     (3) to BioChem's knowledge, neither the manufacture, marketing,
      license, sale or intended use of any product listed in Section 3.2(k) of
    BioChem Disclosure Schedule (i) violates in any respect any license or
      agreement between BioChem or any of its Subsidiaries and any third party
    or (ii) infringes any patents or other Intellectual Property rights of
      any other party; and, except as set forth in BioChem Disclosure Schedule
      hereto, there is no pending or threatened claim or litigation contesting
      the validity, ownership or right to use, sell, license or dispose of any
BioChem IP Rights, or asserting that any BioChem IP Rights or the 
     proposed use, sale, license or disposition thereof, or the manufacture,
      use or sale of any BioChem products, conflicts or will conflict with the
rights of any other party;                                        

      (4) to BioChem's knowledge, no Person is infringing or otherwise
violating the BioChem IP Rights;                                  

       (5) BioChem has provided to Shire a true and complete copy of its
current standard form of employment agreement providing for an    
    Intellectual Property assignment undertaking; all BioChem officers and
     principal scientists, past or present, whether employees or independent
       contractors, listed in BioChem Disclosure Schedule, have executed such an
  agreement or one substantially similar thereto, thereby assigning to
BioChem any rights such employees or contractors might have in the
       BioChem IP Rights; BioChem has taken all commercially reasonable steps to
      ensure that all other BioChem employees and independent contractors have
executed such an agreement;                                       

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        (6) BioChem has taken commercially reasonable steps, in accordance
  with industry standards, to protect the confidentiality of its trade
    secrets and inventions, notably ensuring that all BioChem officers and
      principal scientists listed in BioChem Disclosure Schedule have executed
      appropriate non-disclosure agreements and making commercially reasonable
      efforts to ensure all other employees, consultants or third parties with
     access to BioChem confidential information execute such agreements; and

          (7) neither BioChem nor any of its Subsidiaries has entered into any
       agreement to indemnify any other person, including but not limited to any
       employee or consultant of BioChem or any of its Subsidiaries, against any
    charge of infringement, misappropriation or misuse of any intellectual
   property, other than indemnification provisions contained in purchase
      orders or agreements with trade customers arising in the ordinary course
     of business or indemnifications to licensees or licensors in applicable
license agreements.                                               

(l)  BROKERS OR FINDERS.  No agent, broker, investment banker, financial
advisor or other firm or Person is or will be entitled to any broker's or       
finder's fee or any other similar commission or fee in connection with any of   
the transactions contemplated by this Agreement, based upon arrangements made by
or on behalf of BioChem except Chase Securities Inc. and Merrill Lynch & Co.,   
each of whose fees and expenses will be paid by BioChem in accordance with      
BioChem's agreements with such firms, copies of which have been provided to     
Shire.                                                                          

(m)  OPINIONS OF BIOCHEM FINANCIAL ADVISORS.  BioChem has received the  
opinion of Chase Securities Inc. and the opinion of Merrill Lynch & Co., each   
dated the date of this Agreement, and each to the effect that, as of such date, 
the Merger Consideration is fair, from a financial point of view, to the holders
of BioChem Common Shares, a copy of which opinions have been made available to  
Shire.                                                                          

(n)  TAXES.                                                             

       (i)  Each of BioChem and its Subsidiaries has timely filed all material
Tax Returns required to have been filed (or extensions have been duly   
    obtained) and has timely paid all Taxes required to have been paid by it and
 has made adequate accrual for all material taxes not yet due and payable.
   Each such Tax Return is complete and accurate in all material respects. Any
deficiencies or assessments asserted in writing by any taxing authority 
   against BioChem or any of its Subsidiaries have been paid or fully settled.
There are no claims or assessments pending (or, to the best knowledge of
BioChem, threatened) against BioChem or any of its Subsidiaries for any 
    alleged Tax deficiency and no issue has been raised in writing by any taxing
authority or representative thereof. No extension of the period for     
assessment or collection of any Tax of BioChem or its Subsidiaries is   
 currently in effect and no extension of time within which to file any Tax
Return has been requested, which Tax Return has not since been filed.   

   (ii)  No corporation, partnership or other entity owned directly or
 indirectly in whole or in part by BioChem is a "United States person", as
   defined under Section 7701(a) (30) of the Internal Revenue Code of 1986, as
    amended. Except as disclosed in BioChem Disclosure Schedule, neither BioChem
nor any corporation, partnership or other entity owned directly or      
   indirectly in whole or in part by BioChem is engaged in a trade or business
    in the United States or is subject to any U.S. federal, state or local taxes
other than U.S. source withholding taxes in respect of portfolio        
investments.                                                            

(o)  BENEFIT PLANS.                                                     

      (i)  Except as Publicly Disclosed by BioChem prior to the date of this
  Agreement, (A) there are no Plans, (B) there are no outstanding violations
    or defaults thereunder nor any actions, claims, or other proceedings pending
  or, to the knowledge of BioChem, threatened in writing with respect to any
of the Plans, (C) the Plans are registered, filed with the appropriate  
    Governmental Entity and have at all times been invested and administered, in
accordance with Laws and                                                

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regulatory policy and the terms of the Plans, (D) no event has occurred 
    which would entitle any person to terminate any Plan or adversely affect the
   tax status of any Plan; (E) to the knowledge of BioChem, there have been no
 withdrawals of surplus or contribution holiday except as permitted by Law
   and the terms of the Plans and (F) no Plan is underfunded on either a going
concern or a solvency basis as of the date of its most recent actuarial 
evaluation, where the effect of any such undisclosed Plan, violation,   
   default, action, claim, proceeding, promise, commitment, event, withdrawal,
contribution holiday, failure to comply or underfunding would have a    
Material Adverse Effect on BioChem.                                     

       (ii)  Except as Publicly Disclosed by BioChem prior to the date of this
 Agreement, none of the Plans with respect to BioChem is subject to ERISA.
With respect to each ERISA Plan and any ERISA Affiliate Plan (A) if such
ERISA Plan is intended to be qualified under Section 401(a) of the Code,
 such ERISA Plan has been determined by the United States Internal Revenue
    Service to be so qualified and each trust related to any such ERISA Plan has
    been determined to be exempt from federal income Tax under Section 501(a) of
  the Code and no circumstance has occurred or exists which might cause such
    plan or trust to cease being so qualified or exempt from Tax; (B) such ERISA
Plan has complied in all material respects with ERISA, and all other    
applicable Laws; (C) no accumulated funding deficiency, as defined in   
Section 302 of ERISA and Section 412 of the Code, whether or not waived,
exists with respect to such Plan or any ERISA Affiliate Plan; (D) with  
   respect to each single-employer ERISA Plan and ERISA Affiliate Plan subject
   to Title IV of ERISA, as of the last day of the most recent plan year ended
 prior to the date hereof, the actuarially determined present value of all
   "benefit liabilities" (as defined under Section 4001(a)(16) of ERISA) under
 such plan, determined on the basis of the actuarial assumptions in effect
  for such plan year, did not exceed the then current value of the assets of
such plan; and (E) none of BioChem, any of its Subsidiaries or any ERISA
Affiliate has incurred or expects to incur any liability to the United  
  States Pension Benefit Guaranty Corporation with respect to any ERISA Plan
   or ERISA Affiliate Plan or any withdrawal liability under Title IV of ERISA
with respect to any Multiemployer Plan, where the effect of such event, 
condition, action or failure to act under (A) through (E) above would be
   reasonably expected to have a Material Adverse Effect on BioChem. Except as
  Publicly Disclosed by BioChem prior to the date of this Agreement, none of
    BioChem, or any of its Subsidiaries maintains or contributes to any employee
   welfare benefit plan (as defined in Section 3(1) of ERISA) which is subject
   to ERISA and which provides medical benefits to employees after termination
of employment other than as required by Section 601 of ERISA or other   
  applicable Law, or the cost of which is paid for by the covered employees.

(p)  LICENSES.  BioChem and its Subsidiaries have obtained all Licenses 
material, individually or in the aggregate, to the conduct of the business of   
BioChem and its Subsidiaries taken as a whole. All of such Licenses are in full 
force and effect and, to the knowledge of BioChem, will not be impaired or      
adversely affected by the Arrangement in a manner or to a degree that would have
a Material Adverse Effect on BioChem. There is not pending or, to the knowledge 
of BioChem, threatened any domestic or foreign suit or proceeding with respect  
to the suspension, revocation, cancellation, modification or non-renewal of any 
of such licenses, and no event under the control of BioChem has occurred that   
(whether with notice or lapse of time, or both) would result in a suspension or 
revocation of or failure to renew any of the Licenses, the loss of which would  
have a Material Adverse Effect on BioChem.                                      

 (q)  POOLING OF INTERESTS.  Neither BioChem nor any of its Affiliates has
taken or agreed to take any action or failed to take any action that would      
prevent the Arrangement from being treated for financial accounting purposes as 
a "pooling of interests" in accordance with US GAAP and the regulations and     
interpretations of the SEC.                                                     

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(r)  LABOR.                                                             

     (i)  No trade union, association of employees, certified association,
    council of trade unions, employee bargaining agency or affiliated bargaining
  agent, holds bargaining rights with respect to any employees of BioChem by
way of certification, interim certification, voluntary recognition,     
 designation or successor rights, except for those locations and employees
 covered by the collective agreement set forth in Section 3.2(r)(i) of the
BioChem Disclosure Schedule.                                            

 (ii)  To the best of BioChem's knowledge, there are no organizing
activities of any trade union, council of trade unions, association of  
  employees, certified association, employee bargaining agency or affiliated
bargaining agent.                                                       

3.3  REPRESENTATIONS AND WARRANTIES OF SHIRE AND EXCHANGECO.  Shire and 
Exchangeco represent and warrant to BioChem as follows:                         

  (a)  ORGANIZATION.  Exchangeco is a corporation duly incorporated, validly
existing and in good standing under the laws of Canada.                         

(b)  CORPORATE AUTHORIZATION.                                           

        (i)  Exchangeco has all requisite corporate power and authority to enter
   into this Agreement and to consummate the transactions contemplated hereby.
    Shire is, or will be at the Effective Date, directly or indirectly, the sole
 shareholder of Exchangeco and has, or will have as at the Effective Date,
  given all shareholder approvals necessary for Exchangeco to consummate the
Arrangement and the transactions contemplated hereby. The execution,    
delivery and performance by Exchangeco of this Agreement and the        
    consummation by Exchangeco of the transactions contemplated hereby have been
    duly authorized by all necessary corporate action on the part of Exchangeco.
This Agreement has been duly executed and delivered by Exchangeco and   
constitutes the valid and binding agreement of Exchangeco, enforceable  
against Exchangeco in accordance with its terms, except as such         
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting creditors    
generally or by general equity principles (regardless of whether such   
enforceability is considered in a proceeding in equity or at law).      

     (ii)  The execution and delivery of this Agreement by Exchangeco does
  not or will not, as the case may be, and the consummation by Exchangeco of
the Arrangement and the other transactions contemplated hereby will not 
conflict with, or result in any Violation of: (A) any provision of the  
certificate of incorporation of Exchangeco, or (B) except as in the     
aggregate would not have a Material Adverse Effect on Exchangeco, any   
judgment, order, decree, statute, law, ordinance, rule or regulation    
applicable to Exchangeco.                                               

        (iii)  No consent, approval, order or authorization of, or registration,
  declaration or filing with, any Governmental Entity is required by or with
   respect to Exchangeco in connection with the execution and delivery of this
    Agreement by Exchangeco or the consummation of the Arrangement and the other
transactions contemplated hereby.                                       

(c)  NO BUSINESS ACTIVITIES.  Exchangeco has not conducted and will not 
conduct any activities other than in connection with the organization of        
Exchangeco, the negotiation and execution of this Agreement and the consummation
of the transactions contemplated hereby. Exchangeco has no Subsidiaries.        

ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS 

   4.1  COVENANTS OF SHIRE.  During the period from the date of this Agreement
and continuing until the Effective Date, Shire agrees as to itself and its      
Subsidiaries that (except as expressly contemplated                             

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or permitted by this Agreement or the Shire Disclosure Schedule or as required  
by a Governmental Entity of competent jurisdiction or to the extent that BioChem
shall otherwise consent in writing, which consent shall not be unreasonably     
withheld or delayed):                                                           

(a)  ORDINARY COURSE.                                                   

(i)  Shire and its Subsidiaries shall carry on their respective 
businesses in the usual, regular and ordinary course in all material    
respects, in substantially the same manner as heretofore conducted, and 
  shall use all reasonable efforts to preserve intact their present lines of
business, maintain their rights and franchises and preserve their       
   relationships with customers, suppliers and others having business dealings
   with them to the end that their ongoing businesses shall not be impaired in
any material respect at the Effective Date; provided, however, that no  
action by Shire or its Subsidiaries with respect to matters specifically
addressed by any other provision of this Section 4.1 shall be deemed a  
breach of this Section 4.1(a)(i) unless such action would constitute a  
breach of one or more of such other provisions.                         

(ii)  Other than in connection with acquisitions permitted by   
Section 4.1(e), Shire shall not, and shall not permit any of its        
Subsidiaries to, enter into (A) any new material line of business or    
    (B) any material commitment or transaction (including any borrowing, capital
    expenditure or purchase, sale or lease of assets) other than as specified in
the Shire Disclosure Schedule or in the ordinary course of business     
   consistent with past practice and which, together with all such agreements,
 commitments and transactions entered into since January 1, 2000, does not
require expenditures by Shire in excess of fifty million dollars        
   ($50,000,000) provided that if the required expenditures exceed thirty-five
million dollars ($35,000,000), Shire shall, before completing such      
expenditures, verbally advise BioChem.                                  

 (b)  DIVIDENDS; CHANGES IN SHARE CAPITAL.  Shire shall not, and shall not
permit any of its Subsidiaries to, and shall not propose to, (i) declare or pay 
any dividends on or make other distributions in respect of any of its share     
capital, except for dividends (A) paid in the ordinary course of business       
consistent with past practice or (B) by wholly owned Subsidiaries of Shire,     
(ii) split, combine or reclassify any of its share capital or issue or authorize
or propose the issuance of any other securities in respect of, in lieu of or in 
substitution for, shares of its share capital, except for any such transaction  
by a wholly owned Subsidiary of Shire which remains a wholly owned Subsidiary   
after consummation of such transaction or (iii) repurchase, redeem or otherwise 
acquire any of its shares or any securities convertible into or exercisable for 
any of its shares except for the purchase from time to time by Shire of Shire   
Ordinary Shares in the ordinary course of business consistent with past practice
in connection with the Shire Benefit Plans.                                     

  (c)  ISSUANCE OF SECURITIES.  Shire shall not, and shall not permit any of
its Subsidiaries to, issue, deliver or sell, or authorize or propose the        
issuance, delivery or sale of, any shares of its share capital of any class or  
any securities convertible into or exercisable for, or any rights, warrants,    
calls or options to acquire, any such shares or enter into any commitment,      
arrangement, undertaking or agreement with respect to any of the foregoing,     
other than (i) the issuance of Shire Ordinary Shares upon the exercise of Shire 
Share Options or in connection with other shares-based benefit plans outstanding
on the date hereof, in each case in accordance with their present terms or      
pursuant to Shire Share Options or other shares based awards granted pursuant to
clause (ii) below, (ii) the granting of Shire Share Options or other            
shares-based awards to acquire Shire Ordinary Shares granted under shares based 
benefit plans outstanding on the date hereof in the ordinary course of business 
consistent with past practice, (iii) issuances by a wholly owned Subsidiary of  
Shire of shares to such Subsidiary's parent or another wholly owned Subsidiary  
of Shire, or (iv) pursuant to the arrangements set forth in Section 4.1(c) of   
the Shire Disclosure Schedule.                                                  

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(d)  GOVERNING DOCUMENTS.  Except to the extent required to comply with 
their respective obligations hereunder or with applicable law, Shire and        
Exchangeco shall not amend or propose to so amend their respective certificates 
of incorporation, bylaws or other governing documents.                          

(e)  NO ACQUISITIONS.  Other than acquisitions disclosed on the Shire   
Disclosure Schedule, Shire shall not, and shall not permit any of its           
Subsidiaries to, acquire or agree to acquire by merging or consolidating with,  
or by purchasing a substantial equity interest in or a substantial portion of   
the assets of, or by any other manner, any business or any corporation,         
partnership, association or other business organization or division thereof or  
otherwise acquire or agree to acquire any assets (other than the acquisition of 
assets used in the operations of the business of Shire and its Subsidiaries in  
the ordinary course, which assets do not constitute a business unit, division or
all or substantially all of the assets of the transferor); provided, however,   
that the foregoing shall not prohibit (i) internal reorganizations or           
consolidations involving existing Subsidiaries of Shire or (ii) the creation of 
new Subsidiaries of Shire organized to conduct or continue activities otherwise 
permitted by this Agreement.                                                    

(f)  NO DISPOSITIONS.  Other than (i) internal reorganizations or       
consolidations involving existing Subsidiaries of Shire, (ii) dispositions      
referred to in Shire SEC Reports filed prior to the date of this Agreement or   
(iii) as may be required by or in conformance with law or regulation in order to
permit or facilitate the consummation of the transactions contemplated hereby or
the transactions disclosed in the Shire Disclosure Schedule, Shire shall not,   
and shall not permit any of its Subsidiaries to, sell, lease or otherwise       
dispose of, or agree to sell, lease or otherwise dispose of, any of its assets  
(including capital stock of Subsidiaries of Shire but excluding inventory in the
ordinary course of business), if the fair market value of the total             
consideration (including the value of the indebtedness acquired or assumed)     
therefor exceeds twenty-five million dollars ($25,000,0000) in the aggregate for
all such dispositions, provided that if such dispositions exceed fifteen million
dollars ($15,000,000), Shire shall, before completing such dispositions,        
verbally advise BioChem.                                                        

  (g)  INVESTMENTS; INDEBTEDNESS.  Shire shall not, and shall not permit any
of its Subsidiaries to, other than in connection with actions permitted by      
Section 4.1(e), (i) make any loans, advances or capital contributions to, or    
investments in, any other Person, other than (x) by Shire or a Subsidiary of    
Shire to or in Shire or any Subsidiary of Shire, (y) pursuant to any contract or
other legal obligation of Shire or any of its Subsidiaries existing at the date 
of this Agreement or (z) in the ordinary course of business consistent with past
practice in an aggregate amount not in excess of fifty million dollars          
($50,000,0000) (provided that none of such transactions referred to in this     
clause (z) presents a material risk of making it more difficult to obtain any   
approval or authorization required in connection with the Arrangement under     
Regulatory Laws and provided that if the amount of such loans, advances, capital
contributions or investments exceed thirty-five million dollars ($35,000,000),  
Shire shall, before completing such loans, advances, capital contributions or   
investments, verbally advise BioChem) or (ii) create, incur, assume or suffer to
exist any indebtedness, issuances of debt securities, guarantees, loans or      
advances not in existence as of the date of this Agreement except pursuant to   
the credit facilities, indentures and other arrangements in existence on the    
date of this Agreement or in the ordinary course of business consistent with    
past practice, in each case as such credit facilities, indentures and other     
arrangements may be amended, extended, modified, refunded, renewed or refinanced
after the date of this Agreement.                                               

(h)  COMPENSATION.  Other than as contemplated by Section 5.7 or by     
Section 4.1(c) or 4.1(h) of the Shire Disclosure Schedule, Shire shall not      
materially increase the amount of compensation of any director, officer or other
management employee except in the ordinary course of business consistent with   
past practice or as required by an existing agreement, make any material        
increase in or commitment to materially increase any employee benefits, issue a 
material amount of additional Shire Share Options, adopt or make any commitment 
to adopt any additional employee benefit plan or make any contribution, other   
than regularly scheduled contributions, to any Shire Benefit Plan.              

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 (i)  ACCOUNTING METHODS; TAX ELECTIONS.  Except as disclosed in Shire SEC
Reports filed prior to the date of this Agreement, or as required by a          
Governmental Entity, Shire shall not change its methods of accounting for       
financial or tax purposes in effect at December 31, 1999, except as required by 
changes in GAAP as concurred with by Shire's independent public accountants.    
Shire shall not change its fiscal year.                                         

  (j)  CERTAIN AGREEMENTS.  Shire shall not, and shall not permit any of its
Subsidiaries to, enter into any agreements or arrangements that limit or        
otherwise restrict Shire or any of its Subsidiaries or any of their respective  
affiliates or any successor thereto or that could, after the Effective Date,    
limit or restrict Shire or any of its affiliates or any successor thereto, from 
engaging or competing in any line of business or in any geographic area which   
agreements or arrangements, individually or in the aggregate, would have a      
Material Adverse Effect on Shire after giving effect to the Arrangement.        

 (k)  CANADIAN TAX TREATMENT.  Neither Shire nor Exchangeco shall take any
action which could reasonably be expected to prevent the exchange by Canadian   
resident holders of BioChem Common Shares for Exchangeable Shares from being    
treated as a tax deferred transaction for purposes of the ITA to holders who are
otherwise eligible for such treatment.                                          

(l)  NO RELATED ACTIONS.  Shire will not, and will not permit any of its
Subsidiaries to, agree or commit to do any of the foregoing.                    

   (m)  POOLING OF INTERESTS.  Shire shall use all reasonable efforts to cause
the Arrangement to be accounted for as a "pooling of interests" in accordance   
with GAAP, Accounting Principles Board Opinion 16 and applicable SEC rules,     
regulations and policies and shall take no action that would cause such         
accounting treatment not to be obtained.                                        

4.2  COVENANTS OF BIOCHEM.  During the period from the date of this     
Agreement and continuing until the Effective Date, BioChem agrees as to itself  
and its Subsidiaries that (except as expressly contemplated or permitted by this
Agreement or the BioChem Disclosure Schedule or as required by a Governmental   
Entity of competent jurisdiction or to the extent that Shire shall otherwise    
consent in writing, which consent shall not be unreasonably withheld or         
delayed):                                                                       

(a)  ORDINARY COURSE.                                                   

 (i)  BioChem and its Subsidiaries shall carry on their respective
businesses in the usual, regular and ordinary course in all material    
respects, in substantially the same manner as heretofore conducted, and 
  shall use all reasonable efforts to preserve intact their present lines of
business, maintain their rights and franchises and preserve their       
   relationships with customers, suppliers and others having business dealings
   with them to the end that their ongoing businesses shall not be impaired in
any material respect at the Effective Date; provided, however, that no  
  action by BioChem or its Subsidiaries with respect to matters specifically
addressed by any other provision of this Section 4.2 shall be deemed a  
breach of this Section 4.2(a)(i) unless such action would constitute a  
breach of one or more of such other provisions.                         

(ii)  Other than in connection with acquisitions permitted by   
Section 4.2(e), BioChem shall not, and shall not permit any of its      
   Subsidiaries to enter into (A) any new material line of business or (B) any
material commitment or transaction (including any borrowing, capital    
    expenditure or purchase, sale or lease of assets) other than in the ordinary
 course of business consistent with past practice and which, together with
all such agreements, commitments and transactions since the date of this
Agreement, does not require expenditures by BioChem in excess of fifty  
million dollars ($50,000,000) provided that if the required expenditures
exceed thirty-five million dollars ($35,000,000), BioChem shall, before 
completing such expenditures, verbally advise Shire; notwithstanding the
foregoing, BioChem shall not enter into any agreement or arrangement to 
  license a material product if the total consideration exceeds five million
    dollars ($5,000,000) without the prior consent of Shire, which consent shall
not be unreasonably withheld.                                           

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   (b)  DIVIDENDS; CHANGES IN SHARE CAPITAL.  BioChem shall not, and shall not
permit any of its Subsidiaries to, and shall not propose to, (i) declare or pay 
any dividends on or make other distributions in respect of any of its share     
capital, except for dividends by wholly owned Subsidiaries of BioChem,          
(ii) split, combine or reclassify any of its share capital or issue or authorize
or propose the issuance of any other securities in respect of, in lieu of or in 
substitution for, its share capital, except for any such transaction by a wholly
owned Subsidiary of BioChem which remains a wholly owned Subsidiary after       
consummation of such transaction, or (iii) repurchase, redeem or otherwise      
acquire any of its share capital or any securities convertible into or          
exercisable for any of its share capital.                                       

    (c)  ISSUANCE OF SECURITIES.  BioChem shall not, and shall not permit any of
its Subsidiaries to, issue, deliver or sell, or authorize or propose the        
issuance, delivery or sale of, any shares of its share capital of any class, any
BioChem Voting Debt or any securities convertible into or exercisable for, or   
any rights, warrants, calls or options to acquire, any such shares or BioChem   
Voting Debt, or enter into any commitment, arrangement, undertaking or agreement
with respect to any of the foregoing, other than (i) the issuance of BioChem    
Common Shares upon the exercise of BioChem Shares Options or Investissement     
Quebec Options or in connection with other shares-based benefits plans          
outstanding on the date hereof, in each case in accordance with their present   
terms or pursuant to BioChem Shares Options or Investissement Quebec Options or 
other shares based awards granted pursuant to clause (iii) below,               
(ii) issuances by a wholly owned Subsidiary of BioChem of share capital to such 
Subsidiary's parent or another wholly owned subsidiary of BioChem, (iii) the    
granting of BioChem Shares Options or other shares based awards to acquire      
BioChem Common Shares granted under shares based benefit plans outstanding on   
the date hereof in the ordinary course of business consistent with past practice
that would not result in the issuance of more than 100,000 BioChem Common Shares
provided that such grant of BioChem Share Options or other shares based award is
done in connection with the hiring of new employees by BioChem and provided     
however that BioChem shall consult with Shire prior to granting any BioChem     
Share Options and shall not proceed with such grant if advised by Shire that    
such grant would result in a reverse take-over bid of Shire or would affect the 
pooling of interest accounting treatment of the transaction contemplated herein,
or (iii) pursuant to the arrangements set forth in Section 4.2(c) of the BioChem
Disclosure Schedule.                                                            

   (d)  GOVERNING DOCUMENTS.  Except to the extent required to comply with its
obligations hereunder or with applicable law, BioChem shall not amend or propose
to so amend its articles of amalgamation, bylaws or other governing documents.  

(e)  NO ACQUISITIONS.  Other than acquisitions disclosed on the BioChem 
Disclosure Schedule, BioChem shall not, and shall not permit any of its         
Subsidiaries to, acquire or agree to acquire by merging or consolidating with,  
or by purchasing a substantial equity interest in or a substantial portion of   
the assets of, or by any other manner, any business or any corporation,         
partnership, association or other business organization or division thereof or  
otherwise acquire or agree to acquire any assets (other than the acquisition of 
assets used in the operations of the business of BioChem and its Subsidiaries in
the ordinary course, which assets do not constitute a business unit, division or
all or substantially of the assets of the transferor); provided, however, that  
the foregoing shall not prohibit (i) internal reorganizations or consolidations 
involving existing Subsidiaries of BioChem or (ii) the creation of new          
Subsidiaries of BioChem organized to conduct or continue activities otherwise   
permitted by this Agreement.                                                    

(f)  NO DISPOSITIONS.  Other than (i) internal reorganizations or       
consolidations involving existing subsidiaries of BioChem, (ii) dispositions    
Publicly Disclosed by BioChem prior to the date of this Agreement, (iii) as may 
be required by or in conformance with law or regulation in order to permit or   
facilitate the consummation of the transactions contemplated hereby or (iv) the 
transactions disclosed in the BioChem Disclosure Schedule, BioChem shall not,   
and shall not permit any of its Subsidiaries to, sell, lease or otherwise       
dispose of, or agree to sell, lease or otherwise dispose of, any of its assets  
(including capital stock of Subsidiaries of BioChem but excluding inventory in  
the ordinary course of                                                          

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business), the fair market value of the total consideration (including the value
of the indebtedness acquired or assumed) therefor exceeds twenty five million   
dollars ($25,000,000) in the aggregate for all such dispositions, provided that 
if such dispositions exceed the amount of fifteen million dollars ($15,000,000),
BioChem shall, before completing such dispositions, verbally advise Shire.      

    (g)  INVESTMENTS; INDEBTEDNESS.  BioChem shall not, and shall not permit any
of its Subsidiaries to, other than in connection with actions permitted by      
Section 4.2(e), (i) make any loans, advances or capital contributions to, or    
investments in, any other Person, other than (A) by BioChem or a Subsidiary of  
BioChem to or in BioChem or any Subsidiary of BioChem, (B) pursuant to any      
contract or other legal obligation of BioChem or any of its Subsidiaries        
existing at the date of this Agreement or (C) in the ordinary course of business
consistent with past practice in an aggregate amount not in excess of fifty     
million dollars ($50,000,000) (provided that none of such transactions referred 
to in this sub-clause (C) presents a material risk of making it more difficult  
to obtain any approval or authorization required in connection with the         
Arrangement under Regulatory Laws and provided that if the amount of such loans,
advances, capital contributions or investments exceed thirty five million       
dollars ($35,000,000), BioChem shall, before completing such loans, advances,   
capital contributions or investments, verbally advise Shire) or (ii) create,    
incur, assume or suffer to exist any indebtedness, issuances of debt securities,
guarantees, loans or advances not in existence as of the date of this Agreement 
except pursuant to the credit facilities, indentures and other arrangements in  
existence on the date of this Agreement or in the ordinary course of business   
consistent with past practice, in each case as such credit facilities,          
indentures and other arrangements and other existing indebtedness may be        
amended, extended, modified, refunded, renewed or refinanced after the date of  
this Agreement; notwithstanding the foregoing, BioChem shall make no additional 
investments in or advances to GeneChem LP without first consulting with Shire.  
Nothing in this paragraph shall be interpreted as preventing BioChem, any of its
Affiliates or any of its Subsidiaries from complying with its contractual       
obligations.                                                                    

(h)  COMPENSATION.  Other than as contemplated by the BioChem Disclosure
Schedule, BioChem shall not materially increase the amount of compensation of   
any director, officer or other management employee except in the ordinary course
of business consistent with past practice or as required by an existing         
agreement, make any material increase in or commitment to materially increase   
any employee benefits, issue a material amount of additional BioChem Shares     
Options, adopt or make any commitment to adopt any additional employee benefit  
plan or make any contribution, other than regularly scheduled contributions, to 
any BioChem Benefit Plan.                                                       

    (i)  ACCOUNTING METHODS; INCOME TAX ELECTIONS.  Except as Publicly Disclosed
by BioChem prior to the date of this Agreement, or as required by a Governmental
Entity, BioChem shall not change its methods of accounting for financial or tax 
purposes in effect at December 31, 1999, except as required by changes in GAAP  
as concurred with by BioChem's independent public accountants. BioChem shall not
(i) change its fiscal year or (ii) make, modify or revoke any material tax      
election, other than in the ordinary course of business consistent with past    
practice.                                                                       

    (j)  CERTAIN AGREEMENTS.  BioChem shall not, and shall not permit any of its
Subsidiaries to, enter into any agreements or arrangements that limit or        
otherwise restrict BioChem or any of its Subsidiaries or any of their respective
affiliates or any successor thereto, or that could, after the Effective Date,   
limit or restrict Shire or any of its affiliates or any successor thereto, from 
engaging or competing in any line of business or in any geographic area which   
agreements or arrangements, individually or in the aggregate, would have a      
Material Adverse Effect on Shire, after giving effect to the Arrangement.       

 (k)  CANADIAN TAX TREATMENT.  Neither BioChem nor any of its Subsidiaries
shall take any action which could reasonably be expected to prevent the exchange
by Canadian resident holders of BioChem Common Shares for Exchangeable Shares   
from being treated as a tax deferred transaction for purposes of the ITA to     
holders who are otherwise eligible for such treatment.                          

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  (l)  NO RELATED ACTIONS.  BioChem will not, and will not permit any of its
Subsidiaries to, agree or commit to any of the foregoing.                       

(m)  POOLING OF INTERESTS.  BioChem shall use all reasonable efforts to 
cause the Arrangement to be accounted for as a "pooling of interests" in        
accordance with US GAAP, Accounting Principles Board Opinion 16 and applicable  
SEC rules, regulations and policies and shall take no action that would cause   
such accounting treatment not to be obtained.                                   

4.3  GOVERNMENTAL FILINGS.  Each party shall (a) confer on a regular and
frequent basis with the other and (b) report to the other (to the extent        
permitted by law or regulation or any applicable confidentiality agreement) on  
operational matters. BioChem and Shire shall file all reports required to be    
filed by each of them with the OSC, the QSC, all other Canadian securities      
authorities, the TSE, NASDAQ, LSE and the SEC (and all other Governmental       
Entities) between the date of this Agreement and the Effective Date and shall   
(to the extent permitted by law or regulation or any applicable confidentiality 
agreement) deliver to the other party copies of all such reports, announcements 
and publications promptly after the same are filed.                             

    4.4  CONTROL OF OTHER PARTY'S BUSINESS.  Nothing contained in this Agreement
shall give BioChem, directly or indirectly, the right to control or direct      
Shire's operations prior to the Effective Date. Nothing contained in this       
Agreement shall give Shire, directly or indirectly, the right to control or     
direct BioChem's operations prior to the Effective Date. Prior to the Effective 
Date, each of BioChem and Shire shall exercise, consistent with the terms and   
conditions of this Agreement, complete control and supervision over its         
respective operations.                                                          

ARTICLE V 
ADDITIONAL AGREEMENTS 

    5.1  PREPARATION OF PROXY STATEMENT, FORM S-3, CIRCULAR, LISTING PARTICULARS
AND CLASS 1 CIRCULAR.                                                           

  (a) As promptly as reasonably practicable following the date hereof, Shire
shall prepare and file with the SEC proxy materials which shall constitute the  
Proxy Statement (such proxy statement, and any amendments or supplements        
thereto, the "PROXY STATEMENT"). The Proxy Statement shall comply as to form in 
all material respects with the applicable provisions of the Exchange Act and the
rules and regulations thereunder. Shire will provide BioChem with a reasonable  
opportunity to review and comment on any amendment or supplement to the Proxy   
Statement prior to filing such with the SEC, and will provide BioChem with a    
copy of all such filings made with the SEC. Except as otherwise provided for    
herein, no material amendment or supplement (including by incorporation by      
reference) to the Proxy Statement shall be made by Shire without the approval of
BioChem, which approval shall not be unreasonably withheld or delayed. Shire    
shall cause the Proxy Statement to be mailed to the Shire shareholders as soon  
as reasonably practicable after the date hereof. Shire shall also take any      
action (other than qualifying to do business in any jurisdiction in which it is 
not now so qualified or to file a general consent to service of process)        
required to be taken under any applicable state securities laws in connection   
with the Arrangement. Shire will advise BioChem, promptly after it receives     
notice thereof, of any request by the SEC for material amendment to the Proxy   
Statement. If at any time prior to the Effective Date any information relating  
to Shire or BioChem, or any of their respective affiliates, officers or         
directors, should be discovered by Shire or BioChem which should be set forth in
an amendment or supplement to the Proxy Statement so that the Proxy Statement   
would not include any misstatement of a material fact or omit to state any      
material fact necessary to make the statements therein, in light of the         
circumstances under which they were made, not misleading, the party which       
discovers such information shall promptly notify the other party hereto and, to 
the extent required by law, rules or regulations, an appropriate amendment or   
supplement describing such information shall be promptly filed with the SEC and 
disseminated to the shareholders of Shire.                                      

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 (b) Shire shall prepare and file a registration statement on Form S-3, or
other available form under the rules of the SEC, with respect to the Shire      
Ordinary Shares issuable upon exercise of the Exchangeable Shares (the          
"Form S--3"); provided that Shire may seek a "no action letter" determination   
from the Staff of the SEC that no such registration statement is required based 
on Section 3 (a) (9) or 3 (a) (10) of the Securities Act and if such            
determination is obtained, before or after the Effective Date, Shire shall have 
no further obligation under this Section 5.1(b). Shire shall use its best       
efforts to have the Form S-3 declared effective by the SEC prior to the         
Effective Date and shall keep the Form S-3 effective while the Exchangeable     
Shares remain outstanding. Shire shall cause the prospectus included in the     
Form S-3 to be mailed to the holders of Exchangeable Shares as promptly as      
reasonably practicable after the Form S-3 is declared effective under the       
Securities Act and the Effective Date.                                          

    (c) As promptly as reasonably practicable following the date hereof, BioChem
shall prepare and file with the OSC, the QSC and the other Canadian provincial  
securities authorities, the Circular. The Circular shall comply as to form in   
all material respects with the applicable provisions of the Canadian Securities 
Laws and the rules and regulations thereunder. Except as otherwise provided for 
herein, no material amendment or supplement (including by incorporation by      
reference) to the Circular shall be made by BioChem without the approval of     
Shire, which approval shall not be unreasonably withheld or delayed. BioChem    
will advise Shire, promptly after it receives notice thereof, of any request by 
the OSC, the QSC or any other Canadian provincial securities authority for      
material amendment of the Circular. If at any time prior to the Effective Date  
any information relating to Shire or BioChem, or any of their respective        
affiliates, officers or directors, should be discovered by Shire or BioChem     
which should be set forth in an amendment or supplement to the Circular so that 
the Circular would not include any misstatement of a material fact or omit to   
state any material fact necessary to make the statements therein, in light of   
the circumstances under which they were made, not misleading, the party which   
discovers such information shall promptly notify the other party hereto and, to 
the extent required by law, rules or regulations, an appropriate amendment or   
supplement describing such information shall be promptly filed with the OSC, the
QSC or the other Canadian provincial securities authorities and disseminated to 
the shareholders of BioChem.                                                    

  (d) As promptly as reasonably practicable following the date hereof, Shire
shall prepare and, subject to the approval of the UK Listing Authority and the  
LSE, issue the Listing Particulars and the Class 1 Circular. The Listing        
Particulars and the Class 1 Circular shall comply as to form in all material    
respects with the applicable provisions of the Financial Services Act 1986, the 
rules and regulations thereunder, the Listing Rules and the Rules of the LSE.   
Shire will provide BioChem with a reasonable opportunity to review and comment  
on the Listing Particulars and the Class 1 Circular prior to their issue, and   
will provide BioChem with a copy of the Listing Particulars and the Class 1     
Circular when they are issued. Shire shall cause the Listing Particulars and the
Class 1 Circular to be mailed to the Shire shareholders and the BioChem         
shareholders as promptly as reasonably practicable after the Listing Particulars
and the Class 1 Circular are approved by the UK Listing Authority and the LSE.  
Shire will advise BioChem as promptly as reasonably practicable after it becomes
aware that it may be required to issue supplementary listing particulars        
pursuant to the Financial Services Act 1986. If at any time prior to the        
Effective Date any information relating to Shire or BioChem, or any of their    
respective affiliates, officers or directors, should be discovered by Shire or  
BioChem which should be, or should have been, set forth in the Listing          
Particulars and/or the Class 1 Circular so that any of such documents would not 
include any misstatement of a material fact or omit to state any material fact  
necessary to make the statements therein, in light of the circumstances under   
which they were made, not misleading, or Shire or BioChem should become aware of
a significant change affecting any matter contained in the Listing Particulars  
or the Class 1 Circular whose inclusion was required by Section 146 of the      
Financial Services Act 1986 or by the Listing Rules, or of a significant new    
matter the inclusion of information in respect of which would have been so      
required if it had arisen when the Listing Particulars or the Class 1 Circular  
were prepared, the party which discovers such information or, as the case may   
be, becomes aware of any such significant change or significant new matter,     
shall promptly                                                                  

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notify the other party hereto and, to the extent required by law, rules or      
regulations, supplementary listing particulars shall promptly be issued and     
disseminated to the shareholders of Shire and the shareholders of BioChem.      

 (e) BioChem shall duly take (subject to the accuracy of the provisions of
Section 3.1(e) and Section 3.2(e) (provided that BioChem shall have used        
reasonable best efforts to ensure that such representation is true and          
correct)), all lawful action to call as promptly as practicable, give notice of,
convene and hold a meeting of its shareholders on a date determined by BioChem  
(the "BIOCHEM SHAREHOLDERS MEETING") for the purpose of obtaining the Required  
BioChem Vote with respect to the transactions contemplated by this Agreement and
shall take all lawful action to solicit the adoption of this Agreement by the   
Required BioChem Vote; and the Board of Directors of BioChem shall recommend    
adoption of this Agreement by the shareholders of BioChem to the effect as set  
forth in Section 3.2(f) (the "BIOCHEM RECOMMENDATION"), and shall not withdraw, 
modify or qualify (or propose to withdraw, modify or qualify) in any manner     
adverse to Shire such recommendation or take any action or make any statement in
connection with the BioChem Shareholders Meeting inconsistent with such         
recommendation (collectively, a "CHANGE IN THE BIOCHEM RECOMMENDATION");        
provided the foregoing shall not prohibit accurate disclosure (and such         
disclosure shall not be deemed to be a Change in the BioChem Recommendation) of 
factual information regarding the business, financial condition or results of   
operations of Shire or BioChem or the fact that an Acquisition Proposal has been
made, the identity of the party making such proposal or the material terms of   
such proposal (provided, that the Board of Directors of BioChem does not        
withdraw, modify or qualify (or propose to withdraw, modify or qualify) in any  
manner adverse to Shire its recommendation) in the Circular, to the extent such 
information, facts, identity or terms is required to be disclosed therein under 
applicable law, rule or regulation; and, provided further, that the Board of    
Directors of BioChem may make a Change in the BioChem Recommendation pursuant to
Section 5.5 hereof.                                                             

(f) Shire shall duly take (subject to the accuracy of the provisions of 
Section 3.2(e) nad Section 3.1(e)) (provided that Shire shall have used         
reasonable best efforts to ensure that such representation is true and correct) 
all lawful action to call as promptly as reasonably practicable, give notice of,
convene and hold a meeting of its shareholders on a date determined in          
accordance with the mutual agreement of Shire and BioChem (the "SHIRE           
SHAREHOLDERS MEETING") for the purpose of obtaining the Shire Shareholders      
Approval; and the Board of Directors of Shire shall recommend approval of the   
transactions contemplated under this Agreement and the Arrangement by the       
shareholders of Shire to the effect as set forth in Section 3.1(f) (the "SHIRE  
RECOMMENDATION"), and shall not withdraw, modify or qualify (or propose to      
withdraw, modify or qualify) in any manner adverse to BioChem such              
recommendation or take any action or make any statement in connection with the  
Shire Shareholders Meeting inconsistent with such recommendation (a "CHANGE IN  
THE SHIRE RECOMMENDATION"). Notwithstanding anything in this Agreement, the     
Board of Directors of Shire may make a Change in the Shire Recommendation in the
circumstances contemplated in Section 5.6 hereof and in any other circumstances 
provided the Board of Directors of Shire concludes in good faith (after         
receiving a written opinion from outside counsel independent from Shire, a copy 
of which shall be provided to BioChem) taking into account, among other things, 
all legal, financial, regulatory and other aspects of the circumstances as well 
as the binding nature of the commitments, undertakings and covenants of Shire   
under this Agreement, that the Board of Directors of Shire is required under    
such Laws to make a Change in the Shire Recommendation in order to discharge its
fiduciary duties. The parties understand and agree that a variation of the      
market price of the Shire ADSs or the Shire Ordinary Shares absent any material 
change in BioChem shall not constitute a circumstance whereby the Board of      
Directors of Shire may effect a Change in the Shire Recommendation.             

  (g) For purposes of this Agreement, a Change in the BioChem Recommendation
shall be deemed to include, without limitation, a recommendation by the BioChem 
Board of Directors of a third party Acquisition Proposal with respect to        
BioChem.                                                                        

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(h) For purposes of this Agreement, a Change in the Shire Recommendation
shall be deemed to include, without limitation, a recommendation of the Shire   
Board of Directors of a third party Shire Acquisition Proposal with respect to  
Shire.                                                                          

    (i) BioChem shall inform Shire immediately of any new information in respect
of Civil Action N(o)1=96-CV-1868 GET (the "CIVIL ACTION") regarding United      
States patent 5,539,116 to the extent permitted by Law. In the event that       
BioChem is subject to an adverse ruling by the Federal Court of Justice in      
connection with the Civil Action, BioChem agrees to make the appropriate        
application in respect of the Civil Action to permit Shire to have access to all
confidential information in respect of such Civil Action unless BioChem         
determines, acting reasonably, that such an application would likely have a     
material adverse effect on its position in the context of the Civil Action.     

5.2  SHIRE BOARD OF DIRECTORS.  At or prior to the Effective Date, Shire
will use its reasonable efforts to reconstitute the Board of Directors of Shire 
and the committees thereof as of the Effective Date in order that the BioChem's 
nominees on the Board of Directors of Shire constitute 30% of the directors of  
Shire.                                                                          

  5.3  ACCESS TO INFORMATION.  Upon reasonable notice, each party shall (and
shall cause its Subsidiaries to) afford to the officers, employees, accountants,
counsel, financial advisors and other representatives of the other party        
reasonable access during normal business hours, during the period prior to the  
Effective Date, to all its properties, books, contracts, commitments, records,  
officers and employees and, during such period, such party shall (and shall     
cause its Subsidiaries to) furnish promptly to the other party (a) a copy of    
each report, schedule, registration statement and other document filed,         
published, announced or received by it during such period pursuant to the       
requirements of U.S. federal or state securities laws or Canadian Securities    
Laws, as applicable (other than documents which such party is not permitted to  
disclose under applicable law), and (b) all other information concerning it and 
its business, properties and personnel as such other party may reasonably       
request (including consultation on a regular basis with respect to litigation   
matters); provided, however, that either party may restrict the foregoing access
to the extent that (i) any law, treaty, rule or regulation of any Governmental  
Entity applicable to such party requires such party or its Subsidiaries to      
restrict or prohibit access to any such properties or information or (ii) the   
information is subject to confidentiality obligations to a third party. The     
parties will hold any such information obtained pursuant to this Section 5.3 in 
confidence in accordance with, and shall otherwise be subject to, the provisions
of the Confidentiality Agreements dated October 3 and October 9, 2000, between  
BioChem and Shire (the "CONFIDENTIALITY AGREEMENTS"), as if such Confidentiality
Agreement were in full force and effect. Any investigation by Shire or BioChem  
shall not affect the representations and warranties of BioChem or Shire, as the 
case may be.                                                                    

5.4  REASONABLE BEST EFFORTS.                                           

  (a) Subject to the terms and conditions of this Agreement, each party will
use its reasonable best efforts to take, or cause to be taken, all actions and  
to do, or cause to be done, all things necessary, proper or advisable under this
Agreement and applicable laws and regulations to consummate the Arrangement and 
the other transactions contemplated by this Agreement as soon as practicable    
after the date hereof, including (i) preparing and filing as promptly as        
practicable all documentation to effect all necessary applications, notices,    
petitions, filings, tax ruling requests and other documents and to obtain as    
promptly as practicable all consents, waivers, licenses, orders, registrations, 
approvals, permits, tax rulings and authorizations necessary or advisable to be 
obtained from any third party and/or any Governmental Entity in order to        
consummate the Arrangement or any of the other transactions contemplated by this
Agreement, (ii) taking all reasonable steps as may be necessary to obtain all   
such material consents, waivers, licenses, registrations, permits,              
authorizations, securities and tax rulings, orders and approvals. In furtherance
and not in limitation of the foregoing, each party hereto agrees to make an     
appropriate filing of a Notification and Report Form pursuant to the HSR Act,   
the CA, the ICA and any other Regulatory Law with respect to the transactions   
contemplated hereby as promptly as practicable after the date hereof and to     
supply as promptly as practicable any additional information                    

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and documentary material that may be requested pursuant to the HSR Act, the CA, 
the ICA and any other Regulatory Law and to take all other actions necessary to 
cause the expiration or termination of the applicable waiting periods under the 
HSR Act and the CA as soon as practicable, and (iii) preparing and filing on a  
promptly as practicable basis all documentation to effect all necessary         
applications notices, filings and to obtain all waivers and consents necessary  
or advisable to be obtained from the QSC, OSC, the other Canadian provincial    
securities authorities and the TSE, the NASDAQ and the LSE.                     

(b) Each of Shire and BioChem shall, in connection with the efforts     
referenced in Section 5.4(a) to obtain all requisite material approvals and     
authorizations for the transactions contemplated by this Agreement under the HSR
Act, the CA, the ICA or any other Regulatory Law, use its reasonable best       
efforts to (i) cooperate in all respects with each other in connection with any 
filing or submission and in connection with any investigation or other inquiry, 
including any proceeding initiated by a private party, (ii) promptly inform the 
other party of any communication received by such party from, or given by such  
party to, the Antitrust Division of the Department of Justice (the "DOJ"), the  
Federal Trade Commission (the "FTC"), the Competition Bureau under the CA (the  
"COMPETITION BUREAU"), the Minister responsible for the ICA (the "ICA           
AUTHORITY") or any other Governmental Entity and of any material communication  
received or given in connection with any proceeding by a private party, in each 
case regarding any of the transactions contemplated hereby, and (iii) permit the
other party to review any communication given by it to, and consult with each   
other in advance of any meeting or conference with, the DOJ, the FTC, the       
Competition Bureau, the ICA Authority, or any such other Governmental Entity or,
in connection with any proceeding by a private party, with any other Person, and
to the extent appropriate or permitted by the DOJ, the FTC, the Competition     
Bureau, the ICA Authority, or such other applicable Governmental Entity or other
Person, give the other party the opportunity to attend and participate in such  
meetings and conferences. For purposes of this Agreement, "REGULATORY LAW" means
the Clayton Act, as amended, the HSR Act, the Federal Trade Commission Act, as  
amended, the CA, the ICA and all other federal, state and foreign, if any,      
statutes, rules, regulations, orders, decrees, administrative and judicial      
doctrines and other laws that are designed or intended to prohibit, restrict or 
regulate (i) foreign investment or (ii) actions having the purpose or effect of 
monopolization or restraint of trade or lessening of competition.               

 (c) Subject to the terms and conditions of this Agreement, in furtherance
and not in limitation of the covenants of the parties contained in Sections     
5.4(a) and 5.4(b), if any administrative or judicial action or proceeding,      
including any proceeding by a private party, is instituted (or threatened to be 
instituted) challenging any transaction contemplated by this Agreement as       
violative of any Regulatory Law, each of Shire and BioChem shall cooperate in   
all respects with each other and use its respective reasonable best efforts in  
order to contest and resist any such action or proceeding and to have vacated,  
lifted, reversed or overturned any decree, judgment, injunction or other order, 
whether temporary, preliminary or permanent, that is in effect and that         
prohibits, prevents or restricts consummation of the transactions contemplated  
by this Agreement.                                                              

(d) If any objections are asserted with respect to the transactions     
contemplated hereby under any Regulatory Law or if any suit is instituted by any
Governmental Entity or any private party challenging any of the transactions    
contemplated hereby as violative of any Regulatory Law, each of Shire and       
BioChem shall use its reasonable efforts to resolve any such objections or      
challenge as such Governmental Entity or private party may have to such         
transactions under such Regulatory Law so as to permit consummation of the      
transactions contemplated by this Agreement.                                    

   (e) Notwithstanding the foregoing or any other provision of this Agreement,
nothing in this Section 5.4 shall limit a party's right to terminate this       
Agreement pursuant to Article VII.                                              

5.5  BIOCHEM ACQUISITION PROPOSALS.                                     

(a) Without limitation on any of BioChem's other obligations under this 
Agreement (including under Article IV hereof), BioChem agrees that neither it   
nor any of its Subsidiaries nor any of the                                      

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officers and directors of it or its Subsidiaries shall, and that it shall cause 
its and its Subsidiaries' employees, agents and representatives (including any  
investment banker, attorney or accountant retained by it or any of its          
Subsidiaries) not to, directly or indirectly, initiate, solicit, encourage or   
knowingly facilitate (including by way of furnishing information) any inquiries 
or the making of any proposal or offer with respect to a merger, reorganization,
share exchange, consolidation, business combination, recapitalization,          
liquidation, dissolution or similar transaction involving it, or any purchase or
sale of the consolidated assets (including without limitation shares of         
Subsidiaries) of BioChem and its Subsidiaries, taken as a whole, having an      
aggregate value equal to 50% or more of the market capitalization of BioChem, or
any purchase or sale of, or tender or exchange offer for, 50% or more of the    
equity securities of BioChem (any such proposal or offer (other than a proposal 
or offer made by Shire or an affiliate thereof) being hereinafter referred to as
an "ACQUISITION PROPOSAL"). BioChem further agrees that neither it nor any of   
its Subsidiaries nor any of the officers and directors of it or its Subsidiaries
shall, and that it shall cause its and its Subsidiaries' employees, agents and  
representatives (including any investment banker, attorney or accountant        
retained by it or any of its Subsidiaries) not to, directly or indirectly, have 
any discussion with or provide any confidential information or data to any      
Person relating to an Acquisition Proposal, or engage in any negotiations       
concerning an Acquisition Proposal, or knowingly facilitate any effort or       
attempt to make or implement an Acquisition Proposal or accept an Acquisition   
Proposal.                                                                       

   (b) Notwithstanding anything in this Agreement to the contrary, BioChem and
its Board of Directors shall be permitted to (A) effect a Change in the BioChem 
Recommendation or (B) engage in any discussions or negotiations with, or provide
any information to, any Person in response to an unsolicited bona fide written  
Acquisition Proposal by any such Person, if and only to the extent that,        
(i) (x) in the case of clause (A) above, BioChem has received an unsolicited    
bona fide written Acquisition Proposal from a third party and BioChem's Board of
Directors concludes in good faith that such Acquisition Proposal constitutes a  
Superior Proposal and (y) in the case of clause (B) above, BioChem's Board of   
Directors concludes in good faith that there is a reasonable likelihood that    
such Acquisition Proposal could result in a Superior Proposal, (ii) prior to    
providing any information or data to any Person in connection with an           
Acquisition Proposal by any such Person, BioChem's Board of Directors receives  
from such Person an executed confidentiality agreement containing terms at least
as stringent as those contained in the Confidentiality Agreement and            
(iii) prior to providing any information or data to any Person or entering into 
discussions or negotiations with any Person, BioChem notifies Shire promptly of 
such inquiries, proposals or offers received by, any such information requested 
from, or any such discussions or negotiations sought to be initiated or         
continued with, any of BioChem's representatives indicating, in connection with 
such notice, the name of such Person and the material terms and conditions of   
any inquiries, proposals or offers. BioChem agrees that it will promptly keep   
Shire informed of the status and terms of any such proposals or offers and the  
status and terms of any such discussions or negotiations. BioChem agrees that it
will, and will cause its officers, directors and representatives to, immediately
cease and cause to be terminated any activities, discussions or negotiations    
existing as of the date of this Agreement with any parties conducted heretofore 
with respect to any Acquisition Proposal. BioChem agrees that it will use       
reasonable best efforts to promptly inform its directors, officers, key         
employees, agents and representatives of the obligations undertaken in this     
Section 5.5. Nothing in this Section 5.5 shall (x) permit Shire or BioChem to   
terminate this Agreement (except as specifically provided in Article VII hereof)
(y) affect any other obligation of BioChem under this Agreement. Subject to this
Section 5.5(b), BioChem shall not submit to the vote of its shareholders any    
Acquisition Proposal other than the Arrangement.                                

5.6  SHIRE ACQUISITION PROPOSALS.                                       

(a) Without limitation on any of Shire's other obligations under this   
Agreement (including under Article IV hereof), Shire agrees that neither it nor 
any of its Subsidiaries nor any of the officers and directors of it or its      
Subsidiaries shall, and that it shall cause its and its Subsidiaries' employees,
agents and representatives (including any investment banker, attorney or        
accountant retained by it or any of                                             

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its Subsidiaries) not to, directly or indirectly, initiate, solicit, encourage  
or knowingly facilitate (including by way of furnishing information) any        
inquiries or the making of any proposal or offer with respect to a merger,      
reorganization, share exchange, consolidation, business combination,            
recapitalization, liquidation, dissolution or similar transaction involving it, 
having an aggregate value equal to 50% or more of the market capitalization of  
Shire, or any purchase or sale of, or tender or exchange offer for 50% or more  
of the equity securities of Shire (any such proposal or offer being hereinafter 
referred to as an "SHIRE ACQUISITION PROPOSAL"). Shire further agrees that      
neither it nor any of its Subsidiaries nor any of the officers and directors of 
it or its Subsidiaries shall, and that it shall cause its and its Subsidiaries' 
employees, agents and representatives (including any investment banker, attorney
or accountant retained by it or any of its Subsidiaries) not to, directly or    
indirectly, have any discussion with or provide any confidential information or 
data to any Person relating to a Shire Acquisition Proposal, or engage in any   
negotiations concerning a Shire Acquisition Proposal, or knowingly facilitate   
any effort or attempt to make or implement a Shire Acquisition Proposal or      
accept a Shire Acquisition Proposal.                                            

 (b) Notwithstanding anything in this Agreement to the contrary, Shire and
its Board of Directors shall be permitted to (A) effect a Change in the Shire   
Recommendation or (B) engage in any discussions or negotiations with, or provide
any information to, any Person in response to an unsolicited bona fide written  
Shire Acquisition Proposal by any such Person, if and only to the extent that,  
(i) (x) in the case of clause (A) above, Shire has received an unsolicited bona 
fide written Shire Acquisition Proposal from a third party and Shire's Board of 
Directors concludes in good faith that such Shire Acquisition Proposal          
constitutes a Shire Superior Proposal and, after receiving a written opinion    
from outside counsel independent from Shire (a copy of which shall be provided  
to BioChem), that the Board of Directors of Shire is required, pursuant to the  
applicable Laws, to effect a Change in the Shire Recommendation in order to     
discharge its fiduciary duties under such Laws, (y) in the case of clause (B)   
above, Shire's Board of Directors concludes in good faith that there is a       
reasonable likelihood that such Shire Acquisition Proposal could result in a    
Shire Superior Proposal and that there is a reasonable likelihood that the Board
of Directors of Shire be required under applicable laws to effect a Change in   
the Shire Recommendation in order to discharge properly its fiduciary duties,   
(ii) prior to providing any information or data to any Person in connection with
a Shire Acquisition Proposal by any such Person, Shire's Board of Directors     
receives from such Person an executed confidentiality agreement containing terms
at least as stringent as those contained in the Confidentiality Agreement and   
(iii) prior to providing any information or data to any Person or entering into 
discussions or negotiations with any Person, Shire notifies BioChem promptly of 
such inquiries, proposals or offers received by, any such information requested 
from, or any such discussions or negotiations sought to be initiated or         
continued with, any of Shire's representatives indicating, in connection with   
such notice, the name of such Person and the material terms and conditions of   
any inquiries, proposals or offers. Shire agrees that it will promptly keep     
Shire informed of the status and terms of any such proposals or offers and the  
status and terms of any such discussions or negotiations. Shire agrees that it  
will, and will cause its officers, directors and representatives to, immediately
cease and cause to be terminated any activities, discussions or negotiations    
existing as of the date of this Agreement with any parties conducted heretofore 
with respect to any Shire Acquisition Proposal. Shire agrees that it will use   
reasonable best efforts to promptly inform its directors, officers, key         
employees, agents and representatives of the obligations undertaken in this     
Section 5.6. Nothing in this Section 5.6 shall (x) permit Shire or BioChem to   
terminate this Agreement (except as specifically provided in Article VII hereof)
(y) affect any other obligation of Shire under this Agreement. Subject to this  
Section 5.6(b), Shire shall not submit to the vote of its shareholders any Shire
Acquisition Proposal.                                                           

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5.7 EMPLOYEE BENEFITS MATTERS                                           

 Following the Effective Date, Shire shall honor all BioChem Benefit Plans
and related funding arrangements in accordance with their respective terms. For 
at least one year after the Effective Date, Shire shall provide compensation and
employee benefits under Benefit Plans to the employees and former employees of  
BioChem and its Subsidiaries that are, in the aggregate, no less favorable in   
any material respects than those provided to such persons pursuant to the       
Benefit Plans in effect on the date hereof. Nothing herein shall require Shire  
to continue any particular Benefit Plan or prevent the amendment or termination 
thereof (subject to the maintenance, in the aggregate, of the benefits as       
provided in the preceding sentence); provided, however, that Shire shall not    
take any action (by way of amendment, termination or otherwise) which is in     
violation of the terms of any Benefit Plan or applicable law.                   

5.8 FEES AND EXPENSES                                                   

Whether or not the Arrangement is consummated, all Expenses incurred in 
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such Expenses, except (a) Expenses incurred by      
BioChem shall be paid as soon as practicable by Shire in the event that BioChem 
terminates this Agreement pursuant to Section 7.1(j) and (b) Expenses incurred  
by Shire shall be paid as soon as practicable by BioChem in the event that Shire
terminates this Agreement pursuant to Section 7.1(i). As used in this Agreement,
"Expenses" includes all out-of-pocket expenses (including, without limitation,  
all fees and expenses of counsel, accountants, investment bankers, experts and  
consultants to a party hereto and its affiliates) incurred by a party or on its 
behalf in connection with or related to the authorization, preparation,         
negotiation, execution and performance of this Agreement and the transactions   
contemplated hereby, including the preparation, printing, filing and mailing of 
the Proxy Statement, Listing Particulars and Class 1 Circular and the           
solicitation of shareholder approvals and all other matters related to the      
transactions contemplated hereby.                                               

    5.9  DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE.  From and after
the Effective Date, Shire shall (i) indemnify and hold harmless, and provide    
advancement of expenses to, all past and present directors, officers and        
employees of BioChem and its Subsidiaries (in all of their capacities) (a) to   
the same extent such persons are indemnified or have the right to advancement of
expenses as of the date of this Agreement by BioChem pursuant to BioChem's      
bylaws and articles and indemnification agreements, if any, in existence on the 
date hereof with any directors, officers and employees of BioChem and its       
Subsidiaries and (b) without limitation to clause (a), to the fullest extent    
permitted by law, in each case for acts or omissions occurring at or prior to   
the Effective Date (including for acts or omissions occurring in connection with
the approval of this Agreement and the consummation of the transactions         
contemplated hereby), (ii) include and cause to be maintained in effect in      
BioChem's or any successor's bylaws and articles for a period of six years after
the Effective Date, the current provisions regarding elimination of liability of
directors, indemnification of officers, directors and employees and advancement 
of expenses contained in the bylaws and articles of BioChem and (iii) cause to  
be maintained for a period of six years after the Effective Date the current    
policies of directors' and officers' liability insurance and fiduciary liability
insurance maintained by BioChem (provided that Shire (or any successor) may     
substitute therefor policies of at least the same coverage and amounts          
containing terms and conditions which are, in the aggregate, no less            
advantageous to the insured) with respect to claims arising from facts or events
that occurred on or before the Effective Date; provided, however, that in no    
event shall Shire be required to expend in any one year an amount in excess of  
200% of the annual premiums currently paid by BioChem for such insurance. The   
obligations of the Shire under this Section 5.8 shall not be terminated or      
modified in such a manner as to adversely affect any indemnitees to whom this   
Section 5.8 applies without the consent of such affected indemnitees (it being  
expressly agreed that the indemnitees to whom this Section 5.8 applies shall be 
third party beneficiaries of this Section 5.8).                                 

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5.10  PUBLIC ANNOUNCEMENTS.  Shire and BioChem shall use reasonable best
efforts to develop a joint communications plan and each party shall use         
reasonable best efforts (i) to ensure that all press releases and other public  
statements with respect to the transactions contemplated hereby shall be        
consistent with such joint communications plan, and (ii) unless otherwise       
required by applicable law or by obligations pursuant to any listing agreement  
with or rules of any securities exchange, or (in the case of Shire) as may be   
required by the UK Listing Authority and the Panel on Takeovers and Mergers, to 
consult with each other before issuing any press release or, to the extent      
practical, otherwise making any public statement with respect to this Agreement 
or the transactions contemplated hereby. In addition to the foregoing, except to
the extent disclosed in or consistent with the Proxy Statement, the Listing     
Particulars and the Class 1 Circular and the Circular in accordance with the    
provisions of Section 5.1, neither Shire nor BioChem shall issue any press      
release or otherwise make any public statement or disclosure concerning the     
other party or the other party's business, financial condition or results of    
operations without the consent of the other party, which consent shall not be   
unreasonably withheld or delayed.                                               

 5.11  LISTING OF SHIRE SHARES.  Shire shall use its reasonable efforts to
cause the Shire Ordinary Shares to be issued in the Arrangement to be admitted  
to the Official List of the UK Listing Authority and to trading on the LSE and  
to cause the Exchangeable Shares to be approved for listing on the TSE, subject 
to official notice of issuance, and to the extent necessary, to cause the Shire 
ADSs to be approved for listing on NASDAQ prior to the Closing Date.            

5.12  AFFILIATES.  Not less than 45 days prior to the Effective Date,   
BioChem shall deliver to Shire a letter identifying all persons who, in the     
judgment of BioChem, may be deemed at the time this Agreement is submitted for  
adoption by the shareholders of BioChem, "affiliates" of BioChem for purposes of
Rule 145 under the Securities Act ("Affiliates"), and such letter shall be      
updated as necessary to reflect changes from the date thereof. BioChem shall use
reasonable best efforts to cause each person identified on such list to deliver 
to Shire not less than 30 days prior to the Effective Date, a written agreement 
substantially in the form attached as Exhibit 5.11 hereto (an "AFFILIATE        
AGREEMENT").                                                                    

ARTICLE VI
CONDITIONS PRECEDENT

  6.1  CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE ARRANGEMENT.  The
respective obligations of BioChem, Shire and Exchangeco to effect the           
Arrangement are subject to the satisfaction or waiver on or prior to the Closing
Date of the following conditions:                                               

    (a)  BIOCHEM SHAREHOLDERS APPROVAL.  BioChem shall have obtained the
approval of its shareholders in connection with the adoption of this    
Agreement by the shareholders of BioChem.                               

(b)  SHIRE SHAREHOLDERS APPROVAL.  Shire shall have obtained the
    Required Shire Vote in connection with the adoption of this Agreement by the
shareholders of Shire.                                                  

       (c)  NO INJUNCTIONS OR RESTRAINTS, ILLEGALITY.  No Laws shall have been
  adopted or promulgated, and no temporary restraining order, preliminary or
   permanent injunction or other order issued by a court or other Governmental
 Entity of competent jurisdiction shall be in effect, having the effect of
   making the Arrangement illegal or otherwise prohibiting consummation of the
Arrangement                                                             

(d)  HSR ACT, THE CA AND THE ICA.  The waiting periods (and any 
   extensions thereof) applicable to the Arrangement under the HSR Act and the
  CA shall have been terminated or shall have expired or the Commissioner of
Competition shall have issued an advance ruling certificate and/or a "no
action" letter under the CA in relation to the Arrangement and the ICA  
 Authority shall have concluded that the Arrangement is of "net benefit to
Canada" for purposes of the ICA.                                        

  (e)  GOVERNMENTAL AND REGULATORY APPROVALS.  Other than the filing
  provided for under Section 1.3 and filings pursuant to the HSR Act, the CA
and the ICA, all consents, approvals and actions of, filings with and   
notices to any Governmental Entity required of Shire or BioChem or      

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  any of their respective Subsidiaries to consummate the Arrangement and the
   other transactions contemplated hereby, the failure of which to be obtained
 or taken, individually or in the aggregate, would have a Material Adverse
   Effect on Shire and its Subsidiaries or BioChem and its Subsidiaries, taken
  together after giving effect to the Arrangement, shall have been obtained;
 provided however, that the provisions of this Section 6.1(e) shall not be
   available to any party whose failure to fulfill its obligations pursuant to
Section 5.4 shall have been the cause of, or shall have resulted in, the
failure to obtain such consent or approval.                             

        (f)  LISTING.  The Shire Ordinary Shares to be issued in the Arrangement
and such other Shire Ordinary Shares to be reserved for issuance in     
connection with the Arrangement shall have been admitted to the Official
  List of the UK Listing Authority and to trading on the LSE, the Shire ADSs
    to be issued in the Arrangement and such other Shire ADSs to be reserved for
issuance in connection with the Arrangement shall have been approved for
listing on NASDAQ (to the extent necessary) and the Exchangeable Shares 
   shall have been approved for listing on the TSE, subject to official notice
 of issuance. The parties acknowledge that the Shire Ordinary Shares to be
 issued under the Plan of Arrangement will not be admitted to the Official
  List of the UK Listing Authority or to trading on the LSE unless and until
this Agreement is unconditional in all respects save in respect of such 
admission, including the filing of the certificate of arrangement having
    taken place as provided for in section 1.2. The parties therefore agree that
   once the Shire Ordinary Shares to be issued under the Arrangement have been
allotted subject only to such admission, they shall use their respective
  best efforts to ensure that filing of the certificate of Arrangement takes
   place immediately before 3:00 a.m. (New York time) on the Closing Date, and
  that the Shire Ordinary Shares to be issued pursuant to this Agreement are
   admitted to the Official List of the UK Listing Authority and to trading on
the LSE at 8:00 a.m. (London time) on the Closing Date.                 

 (g)  EFFECTIVENESS OF THE FORM S-3.  The Form S-3 shall have been
    declared effective by the SEC under the Securities Act or an appropriate "no
  action letter" shall have been obtained from the Staff of the SEC based on
    Section 3 (a) 9 or 3(a) (10) of the Securities Act. No stop order suspending
  the effectiveness of the Form S-3 shall have been issued by the SEC and no
   proceedings for that purpose shall have been initiated or threatened by the
SEC.                                                                    

(h)  COMPLIANCE WITH SECTION3(A)(10) OF THE SECURITIES ACT.  All
    applicable requirements of Section 3(a)(10) of the Securities Act shall have
   been satisfied with respect to the issuance of Shire Shares pursuant to the
Arrangement.                                                            

      (i)  CANADIAN SECURITIES LAWS.  Exemption orders from the QSC, OSC and
  other Canadian provincial securities authorities from the registration and
prospectus requirements with respect to the Exchangeable Share structure
shall have been granted.                                                

6.2  ADDITIONAL CONDITIONS TO OBLIGATIONS OF SHIRE AND EXCHANGECO.  The 
obligations of Shire and Exchangeco to effect the Arrangement are subject to the
satisfaction of, or waiver by Shire, on or prior to the Closing Date of the     
following conditions:                                                           

     (a)  REPRESENTATIONS AND WARRANTIES.  Each of the representations and
 warranties of BioChem set forth in this Agreement that is qualified as to
Material Adverse Effect shall be true and correct, and each of the      
  representations and warranties of BioChem set forth in this Agreement that
  is not so qualified shall be true and correct in all material respects, in
each case as of the date of this Agreement and as of the Closing Date as
 though made on and as of the Closing Date (except to the extent in either
    case that such representations and warranties speak as of another date); and
  Shire shall have received a certificate of the chief executive officer and
the chief financial officer of BioChem to such effect.                  

(b)  PERFORMANCE OF OBLIGATIONS OF BIOCHEM.  BioChem shall have 
performed or complied with all agreements and covenants required to be  
 performed by it under this Agreement at or prior to the Closing Date that
are qualified as to Material Adverse Effect and shall have              

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    performed or complied in all material respects with all other agreements and
    covenants required to be performed by it under this Agreement at or prior to
   the Closing Date that are not so qualified, and Shire shall have received a
  certificate of the chief executive officer and the chief financial officer
of BioChem to such effect.                                              

     (c)  RIGHTS PLAN.  BioChem's Board of Directors shall have waived the
application of the Rights Plan to the transactions contemplated hereby. 

    (d)  EXERCISE OF DISSENT RIGHTS.  Holders of not more than 5% of the
BioChem Common Shares issued and outstanding immediately prior to the   
   Effective Date shall have exercised their Dissent Rights (and not withdrawn
such exercise) in connection with the Arrangement.                      

   (e)  NO MATERIAL ADVERSE CHANGE.  Since the date of this Agreement,
there shall not have occurred any change, effect, event or circumstance 
that, in combination with any other changes, effects, events or         
   circumstances, has resulted in or would reasonably be expected to result in
a Material Adverse Effect with respect to BioChem, provided that, on the
  basis of all facts and information disclosed by BioChem to Shire as at the
  date hereof, the outcome of the proceedings instituted by Emory University
in the United States shall not, for the purpose of this Agreement, be   
considered to have a Material Adverse Effect on BioChem.                

     (f)  POOLING LETTERS.  There shall have been delivered to Shire (i) a
  pooling letter from its independent auditors, dated as of the Closing Date
and addressed to Shire, reasonably satisfactory in form and substance to
 Shire, setting forth the concurrence of Shire's independent auditors with
   the conclusion of Shire's management that it will be appropriate to account
 for the Arrangement as a "pooling of interests" under US GAAP, Accounting
  Principles Board Opinion No. 16 and all rules, regulations and policies of
    the SEC, if the Arrangement is consummated in accordance with this Agreement
  (ii) a poolability letter from BioChem's independent auditors, dated as of
    the Closing Date and reasonably satisfactory in form and substance to Shire,
setting forth the concurrence of BioChem's independent auditors with the
 conclusion of BioChem's management that it will be appropriate to account
for the Arrangement as a "pooling of interest" under US GAAP. Accounting
  Principles Board Opinion No. 16 and all rules, regulations and policies of
the SEC, if the Arrangement is consummated in accordance with this      
Agreement.                                                              

 6.3  ADDITIONAL CONDITIONS TO OBLIGATIONS OF BIOCHEM.  The obligations of
BioChem to effect the Arrangement are subject to the satisfaction of Shire and  
Exchangeco, or waiver by BioChem, on or prior to the Closing Date of the        
following additional conditions:                                                

     (a)  REPRESENTATIONS AND WARRANTIES.  Each of the representations and
   warranties of each of Shire and Exchangeco set forth in this Agreement that
 is qualified as to Material Adverse Effect shall be true and correct, and
  each of the representations and warranties of each of Shire and Exchangeco
set forth in this Agreement that is not so qualified shall be true and  
correct in all material respects, in each case as of the date of this   
    Agreement and as of the Closing Date as though made on and as of the Closing
Date (except to the extent in either case that such representations and 
warranties speak as of another date) and BioChem shall have received a  
  certificate of the chief executive officer and the chief financial officer
of each of Shire and Exchangeco to such effect.                         

        (b)  PERFORMANCE OF OBLIGATIONS OF SHIRE.  Shire shall have performed or
 complied with all agreements and covenants required to be performed by it
  under this Agreement at or prior to the Closing Date that are qualified as
to Material Adverse Effect and shall have performed or complied in all  
material respects with all other agreements and covenants required to be
 performed by it under this Agreement at or prior to the Closing Date that
  are not so qualified, and BioChem shall have received a certificate of the
chief executive officer and the chief financial officer of Shire to such
effect.                                                                 

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ARTICLE VII 
TERMINATION 

    7.1  TERMINATION.  This Agreement may be terminated at any time prior to the
Effective Date, by action taken or authorized by the Board of Directors of the  
terminating party or parties, and except as provided below, whether before or   
after approval of the matters presented in connection with the Arrangement by   
the shareholders of BioChem:                                                    

(a) By mutual written consent of Shire and BioChem;                     

(b) By either BioChem or Shire, if the Effective Date shall not have    
occurred on or before May 31, 2001 (the "TERMINATION DATE"); provided, however, 
that the right to terminate this Agreement under this Section 7.1(b) shall not  
be available to any party whose failure to fulfill any obligation under this    
Agreement (including without limitation such party's obligations set forth in   
Section 5.4) has been the cause of, or resulted in, the failure of the Effective
Date to occur on or before the Termination Date;                                

 (c) By either BioChem or Shire, if any Governmental Entity (i) shall have
issued a final and non-appealable order, decree or ruling or taken any other    
action (which such party shall have used its reasonable best efforts to resist, 
resolve or lift, as applicable, in accordance with Section 5.4) permanently     
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement, and such order, decree, ruling or other action shall have become
final and non-appealable or (ii) shall have failed to issue an order, decree or 
ruling or to take any other action (which order, decree, ruling or other action 
such party shall have used its reasonable best efforts to obtain, in accordance 
with Section 5.4), in the case of each of (i) and (ii) which is necessary to    
fulfill the conditions set forth in subsections 6.1(c), (d) and (e), as         
applicable, and such denial of a request to issue such order, decree, ruling or 
take such other action shall have become final and non-appealable; provided,    
however, that the right to terminate this Agreement under this Section 7.1(c)   
shall not be available to any party whose failure to comply with Section 5.4 has
been the cause of such action or inaction;                                      

  (d) By Shire, if the Required BioChem Vote shall not have been obtained at
the BioChem Shareholders Meeting or any adjournment thereto;                    

  (e) By BioChem, if the Required Shire Vote shall not have been obtained at
the Shire Shareholders Meeting or any adjournment thereto;                      

(f) By Shire, if BioChem shall have failed to make the BioChem          
Recommendation or if BioChem shall have effected a Change in the BioChem        
Recommendation (or resolved to take any such action), whether or not permitted  
by the terms hereof;                                                            

   (g) By BioChem, if Shire shall have failed to make the Shire Recommendation
or Shire shall have effected a Change in the Shire Recommendation (or resolved  
to take any such action);                                                       

(h) By BioChem, if at any time prior to the BioChem Shareholders Meeting
BioChem shall have failed to make the BioChem Recommendation or effected a      
change in the BioChem Recommendation so long as (i) the BioChem Board of        
Directors, after consultation with its legal counsel and financial advisor,     
determines that an Acquisition Proposal is a Superior Proposal and, after       
consultation with and based upon advice of legal counsel, determines in good    
faith that such action is necessary for the BioChem Board of Directors to comply
with its fiduciary duties to shareholders under applicable law, (ii) BioChem    
pays to Shire all amounts due under Section 7.2, and (iii) BioChem provides to  
Shire at least five Business Days prior to such termination written notice of   
its intention to terminate this Agreement and the material terms and conditions 
of the Acquisition Proposal.                                                    

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  (i) By Shire, if there shall be a breach by BioChem of any representation,
warranty, covenant or agreement contained in this Agreement which would result  
in a failure of a condition set forth in paragraph 6.2(a) or 6.2(b) and cannot  
be or is not cured within 20 Business Days of such breach; or                   

(j) By BioChem, if there shall be a breach by Shire or Exchangeco of any
representation, warranty, covenant or agreement contained in this Agreement     
which would result in a failure of a condition set forth in paragraph 6.3(a) or 
6.3(b) and cannot be or is not cured within 20 Business Days of such breach.    

7.2  EFFECT OF TERMINATION                                              

    (a) In the event of termination of this Agreement by either BioChem or Shire
as provided in Section 7.1, this Agreement shall forthwith become void and there
shall be no liability or obligation on the part of Shire or BioChem or their    
respective officers or directors except as provided in Section 3.1(l),          
Section 3.2(l), the second sentence of Section 5.3, Section 5.8, this           
Section 7.2 and Article VIII, which provisions shall survive such termination,  
and except that, notwithstanding anything to the contrary contained in this     
Agreement, neither Shire nor BioChem shall be relieved or released from any     
liabilities or damages arising out of its willful and material breach of this   
Agreement.                                                                      

(b) If (A) (I) Shire shall terminate this Agreement pursuant to         
Section 7.1(d), and (II) at any time after the date of this Agreement and at or 
before the date of the BioChem Shareholders Meeting a Superior Proposal with    
respect to BioChem shall have been publicly announced or otherwise communicated 
to the BioChem Board of Directors, and (III) BioChem consummates the transaction
set forth in such Superior Proposal within one year of the Termination Date     
provided that if the applicable regulatory approvals have not been obtained     
prior to the expiry of the one-year period, such period shall be deemed extended
to eighteen months from the Termination Date; or (B) Shire shall terminate this 
Agreement pursuant to Section 7.1(f); or (C) BioChem shall terminate this       
Agreement pursuant to Section 7.1(h); then BioChem shall pay to Shire (in the   
case of Clause (A) not later than two days following the consummation of the    
transaction set forth in such Superior Proposal, in the case of clause (B) not  
later than two Business Days after the Termination Date, and in the case of     
clause (C) immediately following the termination of this Agreement, an amount   
equal to US$110,000,000.                                                        

 (c) if BioChem shall terminate this Agreement pursuant to Section 7.1(g),
then Shire shall pay to BioChem, not later than two business days after the     
Termination Date, an amount equal to US$40,000,000.                             

 (d) All payments under this Section 7.2 shall be made by wire transfer of
immediately available funds to an account designated by the party entitled to   
receive payment.                                                                

    (e) BioChem agrees that nothing in this Section 7.2 shall release BioChem of
any liability in the event that this Agreement is terminated by Shire pursuant  
to Section 7.1(i) for a willful and material breach of this Agreement by BioChem
and Shire agrees that nothing in the Section 7.2 shall release Shire of any     
liability in the event that this Agreement is terminated by BioChem pursuant to 
Section 7.1(j) for a willful and material breach of this Agreement by Shire.    

7.3  EXTENSION; WAIVER.  At any time prior to the Effective Date, the   
parties hereto, by action taken or authorized by their respective Boards of     
Directors, may, to the extent legally allowed, (i) extend the time for the      
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties contained     
herein or in any document delivered pursuant hereto and (iii) waive compliance  
with any of the agreements or conditions contained herein. Any agreement on the 
part of a party hereto to any such extension or waiver shall be valid only if   
set forth in a written instrument signed on behalf of such party. The failure of
any party to this Agreement to assert any of its rights under this Agreement or 
otherwise shall not constitute a waiver of those rights.                        

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ARTICLE VIII
AMENDMENT 

    8.1  AMENDMENT.  This Agreement and the Plan of Arrangement may, at any time
and from time to time before or after the holding of the Shire Shareholders     
Meeting or the BioChem Shareholders Meeting but not later than the Effective    
Date, be amended by mutual written agreement of the parties hereto, and any such
amendment may, subject to applicable Laws and the Interim Order, without        
limitation:                                                                     

    (a) change the time for performance of any of the obligations or acts of the
parties;                                                                        

(b) waive any inaccuracies or modify any representation or warranty     
contained herein or in any document delivered pursuant hereto;                  

 (c) waive compliance with or modify any of the covenants herein contained
and waive or modify performance of any of the obligations of the parties; and/or

(d) waive compliance with or modify any conditions precedent herein     
contained.                                                                      

  8.2  MUTUAL UNDERSTANDING REGARDING AMENDMENTS.  The parties agree that if
Shire or BioChem, as the case may be, propose any amendment or amendments to    
this Agreement, to the Plan of Arrangement and to the related agreements, the   
other will act reasonably in considering such amendment and if the other and its
security holders are not prejudiced by reason of any such amendment the other   
will co-operate in a reasonable fashion with Shire, or BioChem, as the case may 
be, so that such amendments can be effected subject to applicable Laws and the  
rights of the security holders.                                                 

8.3  AMENDMENT.  This Agreement may be amended by the parties hereto, by
action taken or authorized by their respective Boards of Directors, at any time 
before or after approval of the matters presented in connection with the        
Arrangement by the shareholders of BioChem, but, after any such approval, no    
amendment shall be made which by law or in accordance with the rules of any     
relevant stock exchange requires further approval by such shareholders without  
such further approval. This Agreement may not be amended except by an instrument
in writing signed on behalf of each of the parties hereto.                      

ARTICLE IX
GENERAL PROVISIONS

 9.1  NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.  None of
the representations, warranties, covenants and other agreements in this         
Agreement or in any instrument delivered pursuant to this Agreement, including  
any rights arising out of any breach of such representations, warranties,       
covenants and other agreements, shall survive the Effective Date, except for    
those covenants and agreements contained herein and therein (including          
Section 5.6) that by their terms apply or are to be performed in whole or in    
part after the Effective Date and this Article VIII.                            

 9.2  NOTICES.  All notices and other communications hereunder shall be in
writing and shall be deemed duly given (i) on the date of delivery if delivered 
personally, or by telefacsimile, upon confirmation of receipt, (ii) on the first
Business Day following the date of dispatch if delivered by a recognized        
next-day courier service, or (iii) on the fifth Business Day following the date 
of mailing if delivered by registered or certified mail, return receipt         
requested, postage prepaid. All notices                                         

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hereunder shall be delivered as set forth below, or pursuant to such other      
instructions as may be designated in writing by the party to receive such       
notice:                                                                         

(a) if to Shire or Exchangeco, to:                                      

Shire Pharmaceuticals Group Plc                                 
East Anton Andover                                                  
HampShire, England                                                  
England SP10 5RG                                                    
Fax: 012 64 334 658                                                 
Attention: Rolf Stahel                                              

with copies to:                                                   

McCarthy Tetrault                                                 
1170 Peel Street                                                    
Montreal, Quebec                                                    
H3B 4S8                                                             

Fax: (514) 397-4235                                               
Attention: Benjamin H. Silver                                       

(b) if to BioChem to:                                                   

BioChem Pharma Inc.                                             
275 Armand-Frappier Blvd                                            
Laval, Quebec                                                       
Canada H7V 4A7                                                      

Fax: (450) 978-7899                                             
Attention: Francesco Bellini                                        

with a copy to:                                                   

Stikeman Elliott                                                  
1155 Rene-Levesque Blvd West                                        
Suite 4000                                                          
Montreal, Quebec                                                    
H3B 3V2                                                             

Fax: (514) 397-3222                                               
Attention: Jean Marc Huot                                           

9.3  INTERPRETATION.  When a reference is made in this Agreement to     
Sections, Exhibits or Schedules, such reference shall be to a Section of or     
Exhibit or Schedule to this Agreement unless otherwise indicated. The table of  
contents and headings contained in this Agreement are for reference purposes    
only and shall not affect in any way the meaning or interpretation of this      
Agreement. Whenever the words "include," "includes" or "including" are used in  
this Agreement, they shall be deemed to be followed by the words "without       
limitation."                                                                    

9.4  COUNTERPARTS.  This Agreement may be executed in one or more       
counterparts, all of which shall be considered one and the same agreement and   
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that both     
parties need not sign the same counterpart.                                     

9.5  ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES.                    

   (a) This Agreement, the Confidentiality Agreements and the other agreements
of the parties referred to herein constitute the entire agreement and supersede 
all prior agreements and understandings, both written and oral, among the       
parties with respect to the subject matter hereof.                              

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   (b) This Agreement shall be binding upon and inure solely to the benefit of
each party hereto, and nothing in this Agreement, express or implied, is        
intended to or shall confer upon any other Person any right, benefit or remedy  
of any nature whatsoever under or by reason of this Agreement, other than       
Section 5.8 (which is intended to be for the benefit of the Persons covered     
thereby and may be enforced by such Persons).                                   

9.6  GOVERNING LAW.  This Agreement shall be governed and construed in  
accordance with the laws of the Province of Quebec and the laws of Canada       
applicable therein (without giving effect to choice of law principles thereof). 

9.7  SEVERABILITY.  If any term or other provision of this Agreement is 
invalid, illegal or incapable of being enforced by any law or public policy, all
other terms and provisions of this Agreement shall nevertheless remain in full  
force and effect so long as the economic or legal substance of the transactions 
contemplated hereby is not affected in any manner materially adverse to any     
party. Upon such determination that any term or other provision is invalid,     
illegal or incapable of being enforced, the parties hereto shall negotiate in   
good faith to modify this Agreement so as to effect the original intent of the  
parties as closely as possible in an acceptable manner in order that the        
transactions contemplated hereby are consummated as originally contemplated to  
the greatest extent possible.                                                   

    9.8  ASSIGNMENT.  Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto, in whole  
or in part (whether by operation of law or otherwise), without the prior written
consent of the other party, and any attempt to make any such assignment without 
such consent shall be null and void, except that Exchangeco may assign, in its  
sole discretion, any or all of its rights, interests and obligations under this 
Agreement to any direct Canadian wholly owned Subsidiary of Shire without the   
consent of BioChem, but no such assignment shall relieve Exchangeco of any of   
its obligations under this Agreement. Subject to the preceding sentence, this   
Agreement will be binding upon, inure to the benefit of and be enforceable by   
the parties and their respective successors and assigns.                        

9.9  SUBMISSION TO JURISDICTION; WAIVERS.  Each of Shire, Exchangeco and
BioChem irrevocably agrees that any legal action or proceeding with respect to  
this Agreement or for recognition and enforcement of any judgment in respect    
hereof brought by the other party hereto or its successors or assigns may be    
brought and determined in the courts of the Province of Quebec, and each of     
Shire, Exchangeco and BioChem hereby irrevocably submits with regard to any such
action or proceeding for itself and in respect to its property, generally and   
unconditionally, to the nonexclusive jurisdiction of the aforesaid courts. Each 
of Shire, Exchangeco and BioChem hereby irrevocably waives, and agrees not to   
assert, by way of motion, as a defense, counterclaim or otherwise, in any action
or proceeding with respect to this Agreement, (a) any claim that it is not      
personally subject to the jurisdiction of the above-named courts for any reason 
other than the failure to lawfully serve process (b) that it or its property is 
exempt or immune from jurisdiction of any such court or from any legal process  
commenced in such courts (whether through service of notice, attachment prior to
judgment, attachment in aid of execution of judgment, execution of judgment or  
otherwise), and (c) to the fullest extent permitted by applicable law, that     
(i) the suit, action or proceeding in any such court is brought in an           
inconvenient forum, (ii) the venue of such suit, action or proceeding is        
improper and (iii) this Agreement, or the subject matter hereof, may not be     
enforced in or by such courts.                                                  

9.10  CURRENCY.                                                         

  All of the dollar amounts mentioned in this Agreement or in the Disclosure
Schedules shall be in Canadian funds, unless otherwise expressed.               

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    9.11  ENFORCEMENT.  The parties agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in    
accordance with their specific terms. It is accordingly agreed that the parties 
shall be entitled to specific performance of the terms hereof, this being in    
addition to any other remedy to which they are entitled at law or in equity.    

9.12  DEFINITIONS.  As used in this Agreement:                          

"ACQUISITION PROPOSAL" has the meaning set forth in Section 5.5.

"ACTIONS" has the meaning set forth in Section 3.1(h)(i).       

"AFFILIATE" has the meaning set forth in Section 5.12.          

"AFFILIATE AGREEMENT" has the meaning set forth in Section 5.12.

"AGREEMENT" has the meaning set forth in the preamble.          

       "ARRANGEMENT" means an arrangement under Section 192 of the CBCA on the
terms and subject to the conditions set out in the Plan of Arrangement, 
subject to any amendments or variations thereto made in accordance with 
   Article 6 of the Plan of Arrangement or made at the direction of the Court.

"ARRANGEMENT RESOLUTION" means the special resolution of the    
shareholders of BioChem to be substantially in the form and content of  
Exhibit 1.3(b) annexed hereto.                                          

      "ARTICLES OF ARRANGEMENT" means the articles of arrangement of BioChem
 in respect of the Arrangement that are required by the CBCA to be sent to
the Director after the Final Order is made.                             

   "BENEFICIAL OWNERSHIP" or "BENEFICIALLY OWN" shall have the meaning
under Section 13(d) of the Exchange Act and the rules and regulations   
thereunder.                                                             

        "BENEFIT PLANS" means, with respect to any Person, each employee benefit
   plan, program, arrangement and contract (including, without limitation, any
collective agreement, bonus, deferred compensation, share bonus, share  
purchase, restricted share, stock option, employment, termination, stay 
agreement or bonus, change in control and severance plan, program,      
arrangement and contract) in effect on the date of this Agreement or    
disclosed on the BioChem Disclosure Schedule or the Shire Disclosure    
 Schedule, as the case may be, to which such Person or its Subsidiary is a
party or which is maintained or contributed to by such Person.          

"BIOCHEM" has the meaning set forth in the recitals.            

       "BIOCHEM BENEFIT PLAN" means any Benefit Plan maintained or contributed
by BioChem.                                                             

     "BIOCHEM BOARD APPROVAL" has the meaning set forth in Section 3.2(f).

     "BIOCHEM COMMON SHARES" means common share in the capital of BioChem.

       "BIOCHEM DEFERRED SHARE UNIT PLANS" means BioChem's Deferred Share Unit
Plan for Key Executives and BioChem's Deferred Share Unit Plan for      
Non-Employee Directors.                                                 

       "BIOCHEM DISCLOSURE SCHEDULE" has the meaning set forth in Section 3.2.

   "BIOCHEM IP RIGHTS" has the meaning set forth in Section 3.2(k)(i).

  "BIOCHEM PERMITS" has the meaning set forth in Section 3.2(h)(ii).

     "BIOCHEM RECOMMENDATION" has the meaning set forth in Section 5.1(e).

 "BIOCHEM REPORTS" has the meaning set forth in Section 3.2(d)(i).

     "BIOCHEM RESTRICTED SHARE UNIT PLAN" means BioChem's Restricted Share
Unit Plan.                                                              

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"BIOCHEM SHAREHOLDERS MEETING "HAS THE MEANING SET FORTH IN     
SECTION 5.1(E).                                                         

      "BIOCHEM SHARE OPTION" has the meaning set forth in Section 3.2(b)(i).

"BIOCHEM SHARE OPTION PLAN" has the meaning set forth in        
Section 3.2(b)(i).                                                      

      "BIOCHEM VOTING DEBT" has the meaning set forth in Section 3.2(b)(ii).

  "BIOCHEM WARRANTS "HAS THE MEANING SET FORTH IN SECTION 3.2(B)(I).

 "BLUE SKY LAWS" has the meaning set forth in Section 3.1(c)(iii).

  "BOARD OF DIRECTORS" means the Board of Directors of any specified
Person and any committees thereof.                                      

"BUSINESS DAY" means any day on which banks are not required or 
    authorized to close in the City of Montreal, the City of London and the City
of New York.                                                            

"CA" has the meaning set forth in Section 3.1(c)(iii).          

       "CANADIAN SECURITIES LAWS" means all applicable securities laws in each
of the Canadian provinces and the respective regulations under such laws
   together with applicable policy statements of the securities authorities in
such provinces.                                                         

"CBCA" has the meaning set forth in the recitals.               

"CERTIFICATE" means a certificate which immediately prior to the
Effective Date represented BioChem Common Shares.                       

"CHANGE IN SHIRE RECOMMENDATION" has the meaning set forth in   
Section 5.1(f).                                                         

   "CHANGE IN THE BIOCHEM RECOMMENDATION" has the meaning set forth in
Section 5.1(e).                                                         

        "CIRCULAR" means the management proxy circular of BioChem to be prepared
 and set to the BioChem Common Shareholders in connection with the BioChem
Shareholders Meeting pursuant to Section 5.1(c).                        

"CIVIL ACTION" has the meaning set forth in Section 5.1(h)      

      "CLASS 1 CIRCULAR" means the circular of Shire to be prepared and sent
to Shire shareholders containing (i) a notice duly convening the Shire  
  Shareholders Meeting and (ii) a recommendation from the Board of Directors
of Shire to the Shire shareholders to vote in favour of an ordinary     
resolution approving the transactions contemplated by this Agreement.   

"CLOSING" has the meaning set forth in Section 1.1.             

"CLOSING DATE" has the meaning set forth in Section 1.1.        

"CODE" means the United States Internal Revenue Code of 1986, as
amended.                                                                

 "COMPETITION BUREAU" has the meaning set forth in Section 5.4(b).

     "CONFIDENTIALITY AGREEMENT" has the meaning set forth in Section 5.3.

    "CONTAMINATION" means the presence of any Hazardous Substance in the
Environment, including the degradation of water, air or soil quality.   

"COURT" means the Superior Court of Justice (Quebec).           

"DEPOSITARY" has the meaning set forth in Section 1.6(b).       

      "DIRECTOR" means the Director appointed under Section 260 of the CBCA.

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"DISSENT RIGHTS" means the rights of dissent in respect of the  
Arrangement described in the Plan of Arrangement.                       

        "DISSENTING SHAREHOLDER" has the meaning ascribed thereto in the Plan of
Arrangement.                                                            

"DOJ" has the meaning set forth in Section 5.4(b).              

"EFFECTIVE DATE" has the meaning set forth in Section 1.2.      

        "EFFECTIVE TIME" means 12:01 a.m. (Montreal time) on the Effective Date.

       "ENVIRONMENT" means all components of the earth, including air (and all
layers of the atmosphere), land (and all surface and subsurface soil,   
underground spaces and cavities and all land submerged under water) and 
water (and all surface and underground water), natural resources such as
wetlands, flora and fauna, organic and inorganic matter and living      
organisms, and the interacting natural systems that include components  
referred to above in the definition of "Environment."                   

        "ENVIRONMENTAL LAWS" means all applicable Laws in existence on or before
    the date hereof relating to Hazardous Substances, pollution or protection of
the Environment and human health or affecting the Environment, including
  Laws relating to (a) on-site or off-site Contamination and (b) releases of
any Hazardous Substance into the Environment.                           

  "ENVIRONMENTAL LOSSES" means any losses, costs, expenses, damages,
  including compensatory, exemplary or punitive damages, penalties, fines or
charges required to be paid out in connection with claims of any kind   
 (including interest, penalties and reasonable attorneys' and consultants'
fees, expenses and disbursements) incurred in order to comply with or in
connection with any Environmental Laws.                                 

"ENVIRONMENTAL PERMITS" means, with respect to either party, all
    permits, authorizations, certificates, registrations, licenses and any other
  approvals required for the operation of the business of such party and its
Subsidiaries pursuant to Environmental Laws.                            

"ERISA" has the meaning set forth in Section 3.1(n)(i).         

   "ERISA AFFILIATE" has the meaning set forth in Section 3.1(n)(iii).

"ERISA AFFILIATE PLAN" has the meaning set forth in             
Section 3.1(n)(iii).                                                    

"ERISA PLAN" has the meaning set forth in Section 3.1(n)(ii).   

     "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

"EXCHANGE AGENT" has the meaning set forth in Section 2.1.      

"EXCHANGE FUND" has the meaning set forth in Section 2.1.       

"EXCHANGE RATIO" has the meaning set forth in Section 1.6.      

       "EXCHANGE TRUST AGREEMENT" means an agreement to be made between Shire,
BioChem and the Trustee in connection with the Plan of Arrangement      
    substantially in the form and content of Exhibit 1.4(c) annexed hereto, with
such changes thereto as the parties hereto, may agree.                  

    "EXCHANGEABLE SHARES" means the non-voting exchangeable shares to be
created in the capital of Exchangeco, having substantially the rights,  
    privileges, restrictions and conditions set out in Appendix I to the Plan of
Arrangement;                                                            

"EXPENSES" has the meaning set forth in Section 5.7.            

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"FINAL ORDER" means the final order of the Court approving the  
  Arrangement as such order may be amended by the Court at any time prior to
    the Effective Date or, if appealed, then, unless such appeal is withdrawn or
denied, as affirmed or as amended on appeal.                            

"FORM S-3" has the meaning set forth in Section 5.1(b).         

"FTC" has the meaning set forth in Section 5.4(b).              

    "GAAP" means, in respect of Shire for the period prior to January 1,
  2000, U.K. generally accepted accounting principles and after said period,
 United States generally accepted accounting principles, and in respect of
BioChem, Canadian generally accepted accounting principles.             

       "GOVERNMENTAL ENTITY" has the meaning set forth in Section 3.1(c)(iii).

"HAZARDOUS SUBSTANCE" means any substance waste, pollutant, a   
contaminant, material, chemical or constituent regulated pursuant to any
applicable Environmental Laws.                                          

"HSR ACT" has the meaning set forth in Section 3.1(c)(iii).     

"ICA" has the meaning set forth in Section 3.1(c)(iii).         

"ICA AUTHORITY" has the meaning set forth in Section 5.4(b).    

    "INTELLECTUAL PROPERTY" has the meaning set forth in Section 3.1(k).

        "INTERIM ORDER" means the interim order of the Court, as the same may be
amended, in respect of the Arrangement.                                 

"INVESTISSEMENT QUEBEC OPTIONS "HAS THE MEANING SET FORTH IN    
SECTION 3.2(B)(I).                                                      

"IRS" has the meaning set forth in Section 3.1(n)(ii).          

"ITA" means the INCOME TAX ACT (Canada).                        

      "KNOWN" or "KNOWLEDGE" means, with respect to any party, the knowledge
of such party's executive officers after reasonable inquiry.            

      "LAWS" refers to all or any applicable law (whether civil, criminal or
administrative) including, without limitation, common law, statute,     
   statutory instrument, treaty, regulation, directive, decision, code, order,
decree, injunction, resolution or judgment of any government,           
quasi-government, supranational, federal, state, provincial or local    
government, statutory or regulatory body, court or agency.              

"LIENS" has the meaning set forth in Section 3.1(a)(ii).        

"LICENSES" has the meaning set forth in Section 3.1(o).         

    "LISTING PARTICULARS" means listing particulars of Shire prepared in
  accordance with the Listing Rules and to be sent to Shire shareholders and
BioChem shareholders.                                                   

    "LISTING RULES" means the Listing Rules of the UK Listing Authority.

"LSE" has the meaning set forth in Section 2.3(b).              

"LONG-TERM INCENTIVE PLAN" has the meaning set forth in         
Section 3.1(b)(i).                                                      

      "MARKET PRICE" of any security means the average of the closing prices
   of such security's sales on the principal securities exchange on which such
  security may at the time be listed, or, if there has been no sales on such
   exchange on any day, the average of the highest bid and lowest asked prices
  on the principal exchange on which such security may at the time be listed
at the end of such day, in each such case averaged over a period of the 
fifteen (15) consecutive trading days ending on the 3rd day prior to the
Closing Date.                                                           

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       "MATERIAL ADVERSE EFFECT" means, with respect to any entity, any event,
change, circumstance or effect that is or is reasonably likely to be    
materially adverse to (i) the business, financial condition, results of 
operations or prospects of such entity and its Subsidiaries taken as a  
whole, other than any event, change, circumstance or effect relating to 
    (v) the economy or financial markets in general, (w) the industries in which
   such entity operates in general and not specifically relating to (or having
the effect of specifically relating to or having a materially           
  disproportionate effect (relative to most other industry participants) on)
such entity, (x) the announcement or pendency of the Arrangement,       
(y) changes after the date hereof in laws or regulations relating to the
 development, manufacture or distribution of products for the treatment of
   disease or (z) a change in the market price or trading volume of the shares
   of such entity (provided that a change in the market price or trading price
may be used, if applicable, as evidence of some other event, change,    
  circumstance or effect that has or is reasonably likely to have a Material
Adverse Effect) or (ii) the ability of such entity to consummate the    
transactions contemplated by this Agreement; all references to Material 
    Adverse Effect on Shire contained in this Agreement shall be deemed to refer
solely to Shire and its Subsidiaries without including its ownership of 
BioChem and its Subsidiaries after the Arrangement.                     

       "MERGER CONSIDERATION" means the consideration per share to be received
by the shareholders of BioChem, including any cash in lieu of fractional
Shire Shares.                                                           

      "MULTIEMPLOYER PLAN" has the meaning set forth in Section 3.1(n)(iii).

"NASDAQ" means NASDAQ National Market.                          

      "NECESSARY CONSENTS" has the meaning set forth in Section 3.1(c)(iii).

"OSC" means the Ontario Securities Commission.                  

       "THE OTHER PARTY" means, with respect to BioChem, Shire and means, with
respect to Shire, BioChem.                                              

     "PERSON" means an individual, corporation, company, limited liability
    company, partnership, association, trust, unincorporated organization, other
entity or group (as defined in the Exchange Act).                       

"PLAN" has the meaning set forth in Section 3.1(n)(i).          

        "PLAN OF ARRANGEMENT" means the plan of arrangement substantially in the
form and content of Exhibit A annexed hereto and any amendments or      
variations thereto made in accordance with Article 6 of the Plan of     
Arrangement or made at the direction of the Court.                      

      "PROPOSED AMENDMENTS" has the meaning set forth in Section 3.1(m)(ii).

"PROXY STATEMENT" has the meaning set forth in Section 5.1(a).  

      "PUBLICLY DISCLOSED BY BIOCHEM" means disclosed by BioChem in a public
 filing made by it with the OSC, QSC and/or the SEC since January 1, 1999.

"QSC" means the Commission des valeurs mobilieres du Quebec.    

"REGULATORY LAW" has the meaning set forth in Section 5.4(b).   

        "REQUIRED BIOCHEM VOTE" means the affirmative vote of the holders of the
BioChem Common Shares as set forth in the Interim Order.                

        "REQUIRED SHIRE VOTE" means the affirmative vote of the holders of Shire
Ordinary Shares as (being entitled to do so) vote in person or, where   
 proxies are allowed, by proxy at the Shire Shareholders Meeting and whose
Shire Ordinary Shares account for a majority of the votes cast at that  
meeting.                                                                

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     "RIGHTS PLAN" means the Shareholder Rights Plan Agreement dated as of
 April 28, 1995 between BioChem and General Trust of Canada, as amended on
April 21, 1998.                                                         

 "SEC" means the United States Securities and Exchange Commission.

"SECURITIES ACT" has the meaning set forth in Section 2.9.      

"SHIRE" has the meaning set forth in the preamble.              

      "SHIRE ACQUISITION PROPOSAL" has the meaning set forth in Section 5.6.

    "SHIRE ADSS" means the American Depositary Shares of Shire, or where
appropriate, the American Depositary Receipts of Shire, evidencing such 
shares.                                                                 

       "SHIRE ADSS PRICE" means the Market Price of Shire ADSs (rounded to the
nearest 1/1000) as of the Closing Date.                                 

        "SHIRE BENEFIT PLAN" means any Benefit Plan maintained or contributed to
by Shire.                                                               

   "SHIRE BOARD APPROVAL" has the meaning set forth in Section 3.1(f).

     "SHIRE DISCLOSURE SCHEDULE" has the meaning set forth in Section 3.1.

    "SHIRE ORDINARY SHARES" means ordinary shares of 5 pence each in the
capital of Shire.                                                       

"SHIRE PERMITS" has the meaning set forth in Section 3.1(h)(ii).

   "SHIRE RECOMMENDATION" has the meaning set forth in Section 5.1(f).

       "SHIRE RESOLUTION" means the ordinary resolution of the shareholders of
   Shire approving the Arrangement to be substantially in the form and content
of Exhibit 1.4(a) annexed hereto.                                       

   "SHIRE SEC REPORTS" has the meaning set forth in Section 3.1(d)(i).

      "SHIRE SHARES" means collectively the Shire Ordinary Shares, the Shire
ADSs and the Exchangeable Shares.                                       

"SHIRE SHARE OPTION PLANS" has the meaning set forth in         
Section 3.1(b)(i).                                                      

     "SHIRE SHARE OPTIONS" has the meaning set forth in Section 3.1(b)(i).

"SHIRE SHAREHOLDERS APPROVAL" has the meaning set forth in      
Section 3.1(c)(i).                                                      

"SHIRE SHAREHOLDERS MEETING" has the meaning set forth in       
Section 5.1(f).                                                         

   "SHIRE SUPERIOR PROPOSAL" means a written proposal made by a Person
other than Shire which is for (I)(a) a merger, reorganization,          
consolidation, share exchange, business combination, recapitalization,  
   liquidation, dissolution or similar transaction involving Shire as a result
of which Shire's shareholders prior to such transaction in the aggregate
  cease to own at least 50% of the voting securities of the entity surviving
   or resulting from such transaction (or the ultimate parent entity thereof),
(b) the acquisition, directly or indirectly, by a Person of beneficial  
    ownership of 50% or more of Shire's shares whether by merger, consolidation,
   share exchange, business combination, tender or exchange offer or otherwise
  (other than a merger, consolidation, share exchange, business combination,
    tender or exchange offer or other transaction upon the consummation of which
   the Shire shareholders would in the aggregate beneficially own greater than
    50% of the voting securities of such Person), and which is (II) otherwise on
  terms which the Board of Directors of Shire in good faith concludes (after
 receiving a written opinion of its financial advisors and outside counsel
    independent from Shire a copy of which shall be provided to BioChem), taking
    into account, among other things, all legal, financial, regulatory and other
aspects of the proposal, the Person making the proposal as well as the  
    binding nature of the commitments, undertakings and covenants of Shire under
this Agreement, (a) would, if                                           

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consummated, result in a transaction that is more favorable to the Shire
  shareholders (in their capacities as shareholders), from a financial point
of view, than the transactions contemplated by this Agreement, (b) is   
   reasonably capable of being completed, (c) would not likely be completed if
Shire is prevented from effecting a Change in Shire Recommendation, and 
(d) is required by Law to be approved and recommended by the Board of   
Directors despite the binding nature of this Agreement.                 

      "SUBSIDIARY" when used with respect to any party means any corporation
   or other organization, whether incorporated or unincorporated, (i) of which
such party or any other Subsidiary of such party is a general partner   
   (excluding partnerships, the general partnership interests of which held by
such party or any Subsidiary of such party do not have a majority of the
voting interests in such partnership) or (ii) at least a majority of the
    securities or other interests of which having by their terms ordinary voting
power to elect a majority of the Board of Directors or others performing
   similar functions with respect to such corporation or other organization is
 directly or indirectly owned or controlled by such party or by any one or
more of its Subsidiaries, or by such party and one or more of its       
Subsidiaries.                                                           

        "SUPERIOR PROPOSAL" means a written proposal made by a Person other than
Shire which is for (I)(a) a merger, reorganization, consolidation, share
  exchange, business combination, recapitalization, liquidation, dissolution
or similar transaction involving BioChem as a result of which BioChem's 
shareholders prior to such transaction in the aggregate cease to own at 
    least 50% of the voting securities of the entity surviving or resulting from
    such transaction (or the ultimate parent entity thereof), (b) a sale, lease,
exchange, transfer or other disposition of at least 50% of the assets of
    BioChem and its Subsidiaries, taken as a whole, in a single transaction or a
series of related transactions, or (c) the acquisition, directly or     
    indirectly, by a Person of beneficial ownership of 50% or more of the of the
BioChem Common Shares whether by merger, consolidation, share exchange, 
 business combination, tender or exchange offer or otherwise (other than a
merger, consolidation, share exchange, business combination, tender or  
exchange offer or other transaction upon the consummation of which the  
 BioChem shareholders would in the aggregate beneficially own greater than
    50% of the voting securities of such Person), and which is (II) otherwise on
    terms which the Board of Directors of BioChem in good faith concludes (after
  consultation with its financial advisors and outside counsel), taking into
account, among other things, all legal, financial, regulatory and other 
 aspects of the proposal and the Person making the proposal, (a) would, if
  consummated, result in a transaction that is more favorable to the BioChem
  shareholders (in their capacities as shareholders), from a financial point
of view, than the transactions contemplated by this Agreement and (b) is
reasonably capable of being completed.                                  

   "SUPPORT AGREEMENT" means an agreement to be made between Shire and
BioChem substantially in the form and content of Exhibit 1.4(e) annexed 
hereto, with such changes thereto as the parties hereto may agree       

"TAX RETURNS" has the meaning set forth in Section 3.1(m).      

"TAXES" has the meaning set forth in Section 3.1(m).            

"TERMINATION DATE" has the meaning set forth in Section 7.1(b). 

     "TRUSTEE" means the trustee to be chosen by Shire and BioChem, acting
 reasonably, to act as trustee under the Exchange Trust Agreement, being a
  corporation organized and existing under the laws of Canada and authorized
   to carry on the business of a trust company in all the provinces of Canada,
and any successor trustee appointed under the Exchange Trust Agreement. 

"TSE" means The Toronto Stock Exchange.                         

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       "UK LISTING AUTHORITY" means the Financial Services Authority acting in
  its capacity as the competent authority for the purposes of Part IV of the
  Financial Services Act 1986 and in the exercise of its function in respect
   of the admission to the Official List of the UK Listing Authority otherwise
than in accordance with Part IV of the Financial Services Act 1986.     

"US GAAP" means the United States generally accepted accounting 
principles.                                                             

"VIOLATION" has the meaning set forth in Section 3.1(c)(ii).    

    IN WITNESS WHEREOF, Shire, Exchangeco and BioChem have caused this Agreement
to be signed by their respective officers thereunto duly authorized, all as of  
the date first written above.                                                   

                                                                [Download Table]
                                              
SHIRE PHARMACEUTICALS GROUP PLC               

By:               /s/ ROLF STAHEL             
     -----------------------------------------
                 Name: Rolf Stahel            
           Title: Chief Executive Officer     

3829341 CANADA INC.                           

By:            /s/ BENJAMIN H. SILVER         
     -----------------------------------------
              Name: Benjamin H. Silver        
                  Title: Director             

BIOCHEM PHARMA INC.                           

By:            /s/ FRANCESCO BELLINI          
     -----------------------------------------
              Name: Francesco Bellini         
        Title: Chairman and Chief Executive   
                      Officer                 

By:             /s/ FRANCOIS LEGAULT          
     -----------------------------------------
               Name: Francois Legault         
          Title: Executive Vice-President     
       Corporate Development and Investments  

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                                                                         ANNEX B

   PLAN OF ARRANGEMENT INCLUDING EXCHANGEABLE SHARE PROVISIONS

PLAN OF ARRANGEMENT 
UNDER SECTION 192 
OF THE
CANADA BUSINESS CORPORATIONS ACT
ARTICLE 1 
INTERPRETATION

1.1. DEFINITIONS                                                                

    In this Plan of Arrangement, unless there is something in the subject matter
or context inconsistent therewith, the following terms shall have the respective
meanings set out below and grammatical variations of such terms shall have      
corresponding meanings:                                                         

        "ADS ELECTED SHARE" means any BioChem Common Share that the holder shall
 have elected, in a duly completed Letter of Transmittal and Election Form
 deposited with the Exchange Agent no later than the Election Deadline, to
transfer to ExchangeCo under the Arrangement in exchange for a number of
    fully-paid and non-assessable Shire ADSs that is equal to the Exchange Ratio
divided by three.                                                       

       "AFFILIATE" of any Person means any other Person directly or indirectly
  controlling, controlled by, or under common control with, that Person. For
the purposes of this definition, "CONTROL" (including, with correlative 
meanings, the terms "CONTROLLED BY" and "UNDER COMMON CONTROL WITH"), as
  applied to any Person, means the possession by another Person, directly or
   indirectly, of the power to direct or cause the direction of the management
  and policies of that first mentioned Person, whether through the ownership
of voting securities, by contract or otherwise.                         

        "ARRANGEMENT" means the arrangement under Section 192 of the CBCA on the
 terms and subject to the conditions set forth in the Merger Agreement and
    this Plan of Arrangement and subject to any amendments or variations thereto
 made in accordance with Article VIII of the Merger Agreement or Article 6
hereof or made at the direction of the Court.                           

     "ARRANGEMENT RESOLUTION" means the special resolution to be passed by
the BioChem Securityholders at the BioChem Securityholder Meeting, to be
substantially in the form and content of Exhibit 1.3(b) to the Merger   
Agreement.                                                              

      "ARTICLES OF ARRANGEMENT" means the articles of arrangement of BioChem
in respect of the Arrangement, required by the CBCA to be sent to the   
Director after the Final Order is made.                                 

     "BIOCHEM" means BioChem Pharma Inc., a corporation existing under the
laws of Canada.                                                         

 "BIOCHEM COMMON SHARES" means the common shares in the capital of
    BioChem outstanding from time to time, including all common shares issued on
the exercise of BioChem Share Options and BioChem Warrants prior to the 
Effective Date.                                                         

     "BIOCHEM SECURITYHOLDERS" means, collectively, the holders of BioChem
Common Shares, the holders of BioChem Share Options and the holders of  
BioChem Warrants, to the extent provided in or required by the Interim  
Order.                                                                  

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 "BIOCHEM SECURITYHOLDER MEETING" means the special meeting of the
 BioChem Securityholders (including any adjournment thereof) that is to be
convened and held as provided by the Interim Order to consider, and if  
deemed advisable to approve, the Arrangement.                           

     "BIOCHEM SHARE OPTION PLAN" means the share option plan for BioChem's
directors, officers, employees and consultants.                         

      "BIOCHEM SHARE OPTIONS" means options to acquire BioChem Common Shares
granted under the BioChem Share Option Plan.                            

 "BIOCHEM SHAREHOLDER" means a registered holder of BioChem Common
Shares.                                                                 

 "BIOCHEM WARRANTS" means the warrants issued to, and the right to
  receive warrants in favor of, the Government of Canada giving the right to
acquire BioChem Common Shares at an exercise price equal to the closing 
   price on The Toronto Stock Exchange on the day prior to their issuance, the
whole pursuant to an agreement dated March 31, 2000.                    

"BUSINESS DAY" means any day on which banks are not required or 
authorized to close in the City of Montreal, Canada, the City of London,
England and the City of New York, U.S.A.                                

     "CALL RIGHT DIVIDEND AMOUNT" has the meaning ascribed to that term in
Section 5.3(a).                                                         

    "CALLCO" means 3829359 Canada Inc., a corporation existing under the
laws of Canada and being a wholly-owned subsidiary of Shire.            

      "CANADIAN RESIDENT" means a Person who is a resident of Canada for the
purposes of the ITA.                                                    

       "CBCA" means the CANADA BUSINESS CORPORATIONS ACT, as now in effect and
  as may be amended from time to time prior to the Effective Date, including
the regulations made thereunder.                                        

       "CERTIFICATE" means the certificate of arrangement giving effect to the
Arrangement, issued by the Director pursuant to subsection 192(7) of the
CBCA after the Articles of Arrangement have been filed.                 

  "CLOSING DATE" has the meaning ascribed to that term in the Merger
Agreement.                                                              

"COURT" means the Superior Court of Quebec.                     

   "CURRENT MARKET PRICE" has the meaning ascribed to that term in the
Exchangeable Share Provisions.                                          

      "DIRECTOR" means the Director appointed under Section 260 of the CBCA.

"DISSENT PROCEDURES" has the meaning ascribed to that term in   
Section 3.1.                                                            

    "DISSENTING SHAREHOLDER" means a holder of BioChem Common Shares who
    dissents in respect of the Arrangement in strict compliance with the Dissent
Procedures.                                                             

"DIVIDEND AMOUNT" has the meaning ascribed to that term in      
Section 5.1(a).                                                         

   "EFFECTIVE DATE" means the date upon which this Plan of Arrangement
becomes effective as established by the date of issue shown on the      
Certificate.                                                            

        "EFFECTIVE TIME" means 12:01 a.m. (Montreal time) on the Effective Date.

        "ELECTION DEADLINE" means 5:00 p.m. (Montreal time) on the date which is
  two Business Days prior to the date of the BioChem Securityholder Meeting.

      "ENTITY" means any corporation (including any non-profit corporation),
general partnership, limited partnership, limited liability partnership,
joint venture, estate, trust, company (including any                    

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company limited by shares, limited liability company or joint share     
 company), firm, society or other enterprise, association, organization or
entity.                                                                 

      "EXCHANGE AGENT" means             at its offices at the addresses set
out in the Letter of Transmittal and Election Form in its capacity as an
  exchange agent for the BioChem Common Shares under the Arrangement or such
other trust company or other Entity that Shire may, in its reasonable   
discretion, choose as exchange agent.                                   

"EXCHANGE DATE" has the meaning ascribed to that term in        
Section 5.3(b).                                                         

      "EXCHANGE RATIO" means (i) 2.3517, if the Shire ADS Price is less than
   or equal to US$47.20; (ii) an amount determined by dividing US$37.00 by the
  Shire ADS Price and multiplied by three, if the Shire ADS Price is greater
than US$47.20 and less than US$70.80; and (iii) 1.5678, if the Shire ADS
 Price is equal to or greater than US$70.80; provided that if, between the
    date of the Merger Agreement and the Effective Time, the outstanding BioChem
  Common Shares or Shire Ordinary Shares are changed into a different number
   or class of shares by reason of any share split, division or subdivision of
shares, share dividend, reverse share split, consolidation of shares,   
 reclassification, recapitalization or other similar transaction, then the
  Exchange Ratio will be adjusted appropriately to provide to the holders of
BioChem Common Shares the same economic effect as contemplated hereby.  

    "EXCHANGEABLE ELECTED SHARE" means any BioChem Common Share that the
holder shall have elected, in a duly completed Letter of Transmittal and
  Election Form deposited with the Exchange Agent no later than the Election
   Deadline, to transfer to ExchangeCo under the Arrangement in exchange for a
number of fully paid and non-assessable Exchangeable Shares equal to the
Exchange Ratio divided by three, or that is deemed to be an Exchangeable
Elected Share pursuant to Section 2.2(d).                               

"EXCHANGEABLE SHARE" means a share in the class of non-voting   
exchangeable shares in the capital of ExchangeCo.                       

"EXCHANGEABLE SHARE PROVISIONS" means the rights, privileges,   
restrictions and conditions attaching to the Exchangeable Shares, which 
 rights, privileges, restrictions and conditions shall be substantially as
set forth in Appendix 1 hereto.                                         

   "EXCHANGEABLE SHARE SUPPORT AGREEMENT" means the Exchangeable Share
   Support Agreement among Shire, CallCo and ExchangeCo, to be entered into in
connection with this Plan of Arrangement.                               

    "EXCHANGEABLE SHARE VOTING EVENT" has the meaning attributed to that
term in the Exchangeable Share Provisions.                              

        "EXCHANGECO" means 3829341 Canada Inc., a corporation existing under the
laws of Canada and being a wholly-owned subsidiary of Shire.            

      "EXEMPT EXCHANGEABLE SHARE VOTING EVENT" has the meaning attributed to
that term in the Exchangeable Share Provisions.                         

"FINAL ORDER" means the final order of the Court approving the  
Arrangement, following the application therefor contemplated by         
Section 1.3(e) of the Merger Agreement, as such order may be affirmed,  
   amended or modified by the Court or by the highest court by which an appeal
therefrom is heard at any time prior to the Effective Time.             

"GOVERNMENTAL BODY" means any: (a) nation, state, commonwealth, 
    province, territory, county, municipality, district or other jurisdiction of
any nature; (b) federal, state, provincial, local, municipal, foreign or
    other government; or (c) governmental or quasi-governmental authority of any
    nature (including any governmental division, department, agency, commission,
instrumentality,                                                        

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 official, ministry, fund, foundation, center, organization, unit, body or
Entity and any court or other tribunal).                                

  "HOLDER" means, when used with reference to any shares, options or
warrants, the holders of such shares, options or warrants, respectively,
 shown from time to time in the register maintained by or on behalf of the
applicable corporation in respect thereof.                              

       "INTERIM ORDER" means the interim order of the Court made in connection
with the process for obtaining approval of the Arrangement and related  
    matters following the application therefor contemplated by Section 1.3(a) of
   the Merger Agreement, as such order may be affirmed, amended or modified by
  the Court or by the highest court by which an appeal therefrom is heard at
any time prior to the Effective Time.                                   

"ITA" means the INCOME TAX ACT (Canada).                        

"LETTER OF TRANSMITTAL AND ELECTION FORM" means the Letter of   
  Transmittal and Election Form for use by holders of BioChem Common Shares,
in the form accompanying the Management Information Circular.           

   "LIQUIDATION AMOUNT" has the meaning attributed to that term in the
Exchangeable Share Provisions.                                          

       "LIQUIDATION CALL PURCHASE PRICE" has the meaning ascribed to that term
in Section 5.1(a).                                                      

"LSE" means the London Stock Exchange plc or its successors.    

 "LIQUIDATION CALL RIGHT" has the meaning ascribed to that term in
Section 5.1(a).                                                         

"LIQUIDATION DATE" has the meaning ascribed to that term in the 
Exchangeable Share Provisions.                                          

 "MANAGEMENT INFORMATION CIRCULAR" means the notice of the BioChem
  Securityholder Meeting and accompanying management information circular of
BioChem, including all schedules attached thereto, to be sent to BioChem
Securityholders in connection with the BioChem Securityholder Meeting.  

  "MARKET PRICE" has the meaning ascribed to that term in the Merger
Agreement.                                                              

    "MEETING DATE" means the date of the BioChem Securityholder Meeting.

     "MERGER AGREEMENT" means the merger agreement made as of December 10,
   2000 between Shire, ExchangeCo and BioChem, as amended, supplemented and/or
    restated in accordance therewith prior to the Effective Date, providing for,
among other things, the Arrangement.                                    

"NASDAQ" means NASDAQ National Market.                          

"PERSON" means any individual, Entity or Governmental Body.     

   "PLAN OF ARRANGEMENT" means this plan of arrangement proposed under
  Section 192 of the CBCA, as amended, modified or supplemented from time to
time in accordance with Article 6 hereof or Article VIII of the Merger  
Agreement or any order of the Court, including the appendices hereto and
including any agreement or instrument supplementary or ancillary hereto.

      "REDEMPTION CALL PURCHASE PRICE" has the meaning ascribed to that term
in Section 5.2(a).                                                      

"REDEMPTION CALL RIGHT" has the meaning ascribed to that term in
Section 5.2(a).                                                         

"REDEMPTION DATE" has the meaning ascribed to that term in the  
Exchangeable Share Provisions.                                          

"REDEMPTION PRICE" has the meaning ascribed to that term in the 
Exchangeable Share Provisions.                                          

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"REPLACEMENT OPTION" has the meaning ascribed to that term in   
Section 2.2(e).                                                         

"REPLACEMENT WARRANT" has the meaning ascribed to that term in  
Section 2.2(f).                                                         

      "SHIRE" means Shire Pharmaceuticals Group Plc, a company registered in
England under registry number 2883758.                                  

 "SHIRE ADS" means an American Depositary Share of Shire, or where
    appropriate, an American Depositary Receipt of Shire, evidencing such share.

       "SHIRE ADS PRICE" means the Market Price of a Shire ADS (rounded to the
nearest 1/1000) as of the Closing Date.                                 

    "SHIRE CALL PURCHASE PRICE" has the meaning ascribed to that term in
Section 5.3(a).                                                         

"SHIRE CALL RIGHT" has the meaning ascribed to that term in     
Section 5.3(a).                                                         

        "SHIRE CONTROL TRANSACTION" has the meaning ascribed to that term in the
Exchangeable Share Provisions.                                          

    "SHIRE ELECTED SHARE" means any BioChem Common Share that the holder
  shall have elected, in a duly completed Letter of Transmittal and Election
   Form deposited with the Exchange Agent no later than the Election Deadline,
   to transfer to ExchangeCo under the Arrangement in exchange for a number of
fully-paid and non-assessable Shire Ordinary Shares that is equal to the
 Exchange Ratio, or that is deemed to be a Shire Elected Share pursuant to
Section 2.2(c) or Section 2.2(d).                                       

       "SHIRE ORDINARY SHARES" means ordinary shares of five pence each in the
capital of Shire.                                                       

       "SPECIAL VOTING SHARES" means the special voting shares of Shire having
   substantially the rights, privileges, restrictions and conditions described
in the Voting and Exchange Trust Agreement.                             

  "STAMP TAXES" means all stamp, registration and transfer taxes and
    duties or their equivalents in all jurisdictions where such taxes and duties
    are payable as a result of any of the transactions contemplated by this Plan
   of Arrangement including, without limitation, United Kingdom stamp duty and
stamp duty reserve tax.                                                 

"TRANSFER AGENT" has the meaning ascribed to that term in       
Section 5.1(b).                                                         

       "TRUSTEE" means             or such other trust company or other Entity
    that Shire may, in its reasonable discretion, choose to act as trustee under
  the Voting and Exchange Trust Agreement, being a corporation organized and
    existing under the laws of Canada and authorized to carry on the business of
 a trust company in all the provinces of Canada, and any successor trustee
appointed under the Voting and Exchange Trust Agreement.                

"UKLA" means the United Kingdom Listing Authority.              

   "U.K. POUND EQUIVALENT" means, in respect of an amount expressed in
  Canadian dollars at any date, the product obtained by multiplying: (a) the
   number of Canadian dollars, by (b) the noon spot exchange rate on such date
for Canadian dollars expressed in U.K. pounds as reported by the Bank of
   Canada or, in the event such spot exchange rate is not available, such spot
   exchange rate on such date for Canadian dollars expressed in U.K. pounds as
may be deemed by the board of directors of BioChem and the board of     
directors of Shire, acting jointly and reasonably, to be appropriate for
such purpose.                                                           

      "VOTING AND EXCHANGE TRUST AGREEMENT" has the meaning ascribed to that
term in the Exchangeable Share Provisions.                              

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1.2. SECTIONS AND HEADINGS                                                      

   The division of this Plan of Arrangement into Articles and sections and the
insertion of headings are for convenience of reference only and shall not affect
the construction or interpretation of this Plan of Arrangement. Unless otherwise
indicated, any reference in this Plan of Arrangement to an article, a section or
an appendix refers to the specified article or section of or appendix to this   
Plan of Arrangement.                                                            

1.3. NUMBER, GENDER AND PERSONS                                                 

 In this Plan of Arrangement, unless the context otherwise requires, words
importing the singular number include the plural and VICE VERSA and words       
importing any gender include all genders.                                       

1.4. GOVERNING LAW                                                              

This Plan of Arrangement will be governed by and construed in accordance
with the laws of the Province of Quebec and the laws of Canada applicable       
therein.                                                                        

ARTICLE 2 
ARRANGEMENT 

2.1. BINDING EFFECT                                                             

This Plan of Arrangement will become effective at, and be binding at and
after, the Effective Time on (i) BioChem, (ii) Shire, (iii) CallCo,             
(iv) ExchangeCo, (v) all holders and all beneficial holders of BioChem Common   
Shares, (vi) all holders and all beneficial holders of Exchangeable Shares, and 
(vii) all holders and all beneficial holders of BioChem Share Options and       
BioChem Warrants.                                                               

2.2. ARRANGEMENT                                                                

Commencing at the Effective Time, the following will occur and will be  
deemed to occur without any further act or formality:                           

       (a) each Shire Elected Share will be transferred by the holder thereof,
without any further act or formality on the part of such holder, to     
ExchangeCo in exchange for that number of fully paid and non-assessable 
    Shire Ordinary Shares equal to the Exchange Ratio, and the name of each such
    holder will be removed from the register of holders of BioChem Common Shares
and added to the register of holders of Shire Ordinary Shares, and      
 ExchangeCo will be recorded as the holder of such BioChem Common Share so
   exchanged and will be deemed to be the legal and beneficial holder thereof;

     (b) each ADS Elected Share will be transferred by the holder thereof,
without any further act or formality on the part of such holder, to     
ExchangeCo in exchange for that number of fully paid and non-assessable 
Shire ADSs equal to the Exchange Ratio divided by three, and the name of
each such holder will be removed from the register of holders of BioChem
Common Shares and added to the register of holders of Shire ADSs, and   
 ExchangeCo will be recorded as the holder of such BioChem Common Share so
   exchanged and will be deemed to be the legal and beneficial holder thereof;

     (c) each Exchangeable Elected Share will be transferred by the holder
thereof, without any act or formality on the part of such holder, to    
   ExchangeCo in exchange for (i) that number of fully paid and non-assessable
 Exchangeable Shares equal to the Exchange Ratio divided by three together
with (ii) the rights and benefits to which such holder will be entitled 
 pursuant to or as a result of the Voting and Exchange Trust Agreement and
  the Exchangeable Share Support Agreement, and the name of each such holder
 will be removed from the register of holders of BioChem Common Shares and
added to the register of holders of Exchangeable Shares, and            

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 ExchangeCo will be recorded as the holder of such BioChem Common Share so
   exchanged and will be deemed to be the legal and beneficial holder thereof;
   provided that, notwithstanding the foregoing, each holder of BioChem Common
Shares who is not a Canadian Resident will not be entitled to elect to  
  receive Exchangeable Shares, and any such election made by any such holder
  will be deemed to be an election to receive Shire Ordinary Shares and each
BioChem Common Share held by such holder will be deemed to be a Shire   
 Elected Share and will be transferred by the holder thereof in accordance
with Section 2.2(a);                                                    

     (d) each BioChem Common Share in respect of which an election has not
been made by the holder thereof, or in respect of which an effective    
 election has not been made, (other than (i) BioChem Common Shares held by
Dissenting Shareholders who are ultimately entitled to be paid the fair 
value of the BioChem Common Shares held by them and (ii) BioChem Common 
  Shares that are held by Shire or any of its Affiliates, which shall not be
exchanged under this Arrangement and shall remain outstanding as BioChem
  Common Shares) will be deemed to be an Exchangeable Elected Share and will
be transferred by the holder thereof in accordance with Section 2.2(c)  
without any further act or formality on its part; provided that,        
    notwithstanding the foregoing, each BioChem Common Share in respect of which
  an election has not been made or in respect of which an effective election
 has not been made that is held by a holder who is not a Canadian Resident
 (other than (i) BioChem Common Shares held by Dissenting Shareholders who
are ultimately entitled to be paid the fair value of the BioChem Common 
    Shares held by them and (ii) BioChem Common Shares that are held by Shire or
  any of its Affiliates, which shall not be exchanged under this Arrangement
   and shall remain outstanding as BioChem Common Shares) will be deemed to be
a Shire Elected Share and will be transferred by the holder thereof in  
  accordance with Section 2.2(a) and any election made by any such holder to
receive Exchangeable Shares will be deemed to be an election to receive 
Shire Ordinary Shares;                                                  

      (e) subject to applicable securities laws and regulatory requirements,
each BioChem Share Option which is outstanding and unexercised at or    
immediately prior to the Effective Time, whether or not vested, will be 
  fully vested in accordance with the terms of the BioChem Share Option Plan
(whether or not otherwise vested) and will be exchanged for an option (a
"REPLACEMENT OPTION") to purchase a number of Shire Ordinary Shares from
    Shire equal to the product of the Exchange Ratio multiplied by the number of
    BioChem Common Shares subject to such BioChem Share Option immediately prior
to the Effective Time, rounding down to the nearest whole share. Such   
Replacement Option will by fully vested and will provide for an exercise
price per Shire Ordinary Share equal to the U.K. Pound Equivalent       
  (calculated on the Effective Date) of the per share exercise price of such
   BioChem Share Option immediately prior to the Effective Time divided by the
  Exchange Ratio, rounding up to the nearest whole cent. The term to expiry,
   conditions to, restrictions on and manner of exercising and all other terms
  and provisions of such Replacement Option will otherwise be unchanged from
those of the BioChem Share Option. Any document or agreement previously 
   evidencing a BioChem Share Option will thereafter evidence and be deemed to
  evidence such Replacement Option; provided, however, that each Replacement
Option issued by Shire in accordance with this Section 2.2(e) shall, in 
  accordance with its terms, be subject to further adjustment as appropriate
to reflect any share split, division or subdivision of shares, share    
 dividend, reverse share split, consolidation of shares, reclassification,
 recapitalization or other similar transaction subsequent to the Effective
Time;                                                                   

      (f) subject to applicable securities laws and regulatory requirements,
   each BioChem Warrant which is outstanding and unexercised at or immediately
  prior to the Effective Time, will be exchanged with Shire for a warrant or
the right to receive a warrant (as the case may be) (a "REPLACEMENT     
   WARRANT") to purchase a number of Shire Ordinary Shares from Shire equal to
    the product of the Exchange Ratio multiplied by the number of BioChem Common
 Shares subject to such BioChem Warrant immediately prior to the Effective
Time, rounding down to the nearest whole share. Such Replacement Warrant
will provide for an exercise price per Shire Ordinary                   

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   Share equal to the U.K. Pound Equivalent (calculated on the Effective Date)
of the per share exercise price of such BioChem Warrant divided by the  
  Exchange Ratio, rounding up to the nearest whole cent. The term to expiry,
   conditions to, restrictions on and manner of exercising, exercisability and
 all other terms and provisions of such Replacement Warrant will otherwise
remain unchanged from those of the BioChem Warrant, and any document or 
  agreement previously evidencing a BioChem Warrant will thereafter evidence
   and be deemed to evidence such Replacement Warrant; provided, however, that
each Replacement Warrant issued by Shire in accordance with this        
 Section 2.2(f) shall, in accordance with its terms, be subject to further
adjustment as appropriate to reflect any share split, division or       
    subdivision of shares, share dividend, reverse share split, consolidation of
shares, reclassification, recapitalization or other similar transaction 
subsequent to the Effective Time; and                                   

       (g) coincident with the transactions set out above in this Section 2.2,
    Shire, ExchangeCo and the Trustee will execute the Voting and Exchange Trust
  Agreement and Shire will issue to and deposit with the Trustee the Special
Voting Shares, in consideration of the payment to Shire of one (1) U.K. 
   pound, to be thereafter held of record by the Trustee as trustee for and on
  behalf of, and for the use and benefit of, the holders of the Exchangeable
Shares in accordance with the Voting and Exchange Trust Agreement. All  
    rights of holders of Exchangeable Shares under the Voting and Exchange Trust
   Agreement will be received by them as part of the property receivable under
   Section 2.2(c) or Section 2.2(d) in exchange for the BioChem Common Shares.

2.3. ELECTIONS                                                                  

        (a) Each Canadian Resident who, at or prior to the Election Deadline, is
   a holder of BioChem Common Shares, will be entitled, with respect to all or
 a portion of such shares, to make an election at or prior to the Election
Deadline to receive Exchangeable Shares, Shire ADSs or Shire Ordinary   
Shares, or a combination thereof, in exchange for such holder's BioChem 
Common Shares, on the basis set forth herein and in the Letter of       
 Transmittal and Election Form; for greater certainty, a holder of BioChem
  Common Shares who is not a Canadian Resident will not be entitled to elect
   to receive Exchangeable Shares, and any such election otherwise made by any
such holder shall be and be deemed to be an election to receive Shire   
Ordinary Shares as set forth in Section 2.2(c).                         

      (b) Holders of BioChem Common Shares who are Canadian Residents, other
than any such holder who is exempt from tax under the ITA, and who have 
elected to receive consideration that includes Exchangeable Shares in   
   exchange for their BioChem Common Shares will be entitled to make an income
   tax election pursuant to subsection 85(1) of the ITA or, if the holder is a
  partnership, subsection 85(2) of the ITA (and in each case, if applicable,
the analogous provisions of applicable provincial income tax laws) with 
respect to the transfer of their BioChem Common Shares to ExchangeCo by 
providing three signed copies of the necessary election forms to the    
   Exchange Agent within 120 days following the Effective Date, duly completed
with the details of the number of shares transferred and the applicable 
 agreed amounts for the purposes of such elections. Thereafter, subject to
the election forms being correct and complete and complying with the    
 provisions of the ITA (or any applicable provincial income tax laws), the
    forms will be signed by ExchangeCo and two signed copies will be returned to
  such holders for filing with the Canada Customs and Revenue Agency (or the
applicable provincial taxing authority).                                

      (c) If, between the date of this Plan of Arrangement and the Effective
Date, the outstanding Shire Ordinary Shares, Shire ADSs or the BioChem  
  Common Shares shall have been changed into a different number of shares or
  different class by reason of any reclassification, recapitalization, share
split, split-up, combination or exchange of shares or any extraordinary 
    dividend payable in cash or property or a stock dividend or dividend payable
in any other securities shall be declared with a record date within such
period, or any similar event shall have occurred, the number of         

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  Shire Ordinary Shares, Shire ADSs or Exchangeable Shares to be received by
the holders of BioChem Common Shares shall be appropriately adjusted to 
   provide to the holders of BioChem Common Shares the same economic effect as
contemplated by this Plan of Arrangement prior to such event.           

ARTICLE 3 
RIGHTS OF DISSENT 

3.1. RIGHTS OF DISSENT                                                          

    Holders of BioChem Common Shares may exercise rights of dissent with respect
to such shares pursuant to and in the manner set forth in Section 190 of the    
CBCA and this Section 3.1 (the "DISSENT PROCEDURES") in connection with the     
Arrangement; provided that, notwithstanding subsection 190(5) of the CBCA, the  
written objection to the Arrangement Resolution referred to in subsection 190(5)
of the CBCA must be received by Shire not later than 5:00 p.m. (Montreal time)  
on the Business Day preceding the BioChem Securityholder Meeting. Holders of    
BioChem Common Shares who duly exercise such rights of dissent and who:         

   (a) are ultimately entitled to be paid fair value for their BioChem
   Common Shares will be deemed to have transferred such BioChem Common Shares
  to BioChem immediately prior to the Effective Time and such BioChem Common
Shares will be cancelled as of the Effective Time; or                   

      (b) are ultimately not entitled, for any reason, to be paid fair value
  for their BioChem Common Shares will be deemed to have participated in the
    Arrangement on the same basis as a non-dissenting and non-electing holder of
    BioChem Common Shares and will receive Exchangeable Shares or Shire Ordinary
Shares, as the case may be, in accordance with Section 2.2(d),          

but in no case will Shire, ExchangeCo, CallCo, the Exchange Agent or any other  
Person be required to recognize such holders as holders of BioChem Common Shares
after the Effective Time, and the names of such holders of BioChem Common Shares
will be deleted from the register of holders of BioChem Common Shares at the    
Effective Time.                                                                 

ARTICLE 4 
CERTIFICATES AND FRACTIONAL SHARES

4.1. EXCHANGE OF CERTIFICATES FOR SHIRE ORDINARY SHARES OR SHIRE ADSS           

    At or promptly after the Effective Time, ExchangeCo will deposit, or procure
that there are deposited, with the Exchange Agent, for the benefit of the       
holders of BioChem Common Shares who will receive Shire Ordinary Shares or Shire
ADSs in connection with the Arrangement, certificates representing (i) the Shire
Ordinary Shares issued pursuant to Section 2.2(a), Section 2.2(c) or            
Section 2.2(d) in exchange for Shire Elected Shares or (ii) the Shire ADSs      
issued pursuant to Section 2.2(b) in exchange for ADS Elected Shares (or effect 
the necessary CREST or other electronic transfers). Upon surrender to the       
Exchange Agent for cancellation of a certificate which immediately prior to the 
Effective Time represented Shire Elected Shares or ADS Elected Shares under the 
Arrangement, together with such other documents and instruments as would have   
been required to effect the transfer of the BioChem Common Shares formerly      
represented by such certificate under the CBCA and the by-laws of BioChem and   
such additional documents and instruments as the Exchange Agent may reasonably  
require, the holder of such surrendered certificate will be entitled to receive 
in exchange therefor, and the Exchange Agent shall deliver to such holder, a    
certificate representing that number (rounded down to the nearest whole number) 
of Shire Ordinary Shares or Shire ADSs which such holder has the right to       
receive (or effect the necessary CREST or other electronic transfers) (together 
with any dividends or distributions with respect thereto pursuant to            
Section 4.3 and any cash in lieu of fractional Shire Ordinary Shares or Shire   
ADSs pursuant to Section 4.4), and the certificate so surrendered will forthwith
be cancelled. In the event of a transfer of ownership of BioChem                

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Common Shares which is not registered in the transfer records of BioChem, a     
certificate representing the proper number of Shire Ordinary Shares or Shire    
ADSs may be issued to the transferee (or the necessary CREST or other electronic
transfer effected) if the certificate representing such BioChem Common Shares is
presented to the Exchange Agent, accompanied by all documents required to       
evidence and effect such transfer under the CBCA and the by-laws of BioChem and 
such additional documents and instruments as the Exchange Agent may reasonably  
require. Until surrendered as contemplated by this Section 4.1, each certificate
which immediately prior to the Effective Time represented BioChem Common Shares 
that were exchanged for Shire Ordinary Shares or Shire ADSs will be deemed at   
all times after the Effective Time to represent only the right to receive upon  
such surrender (i) the certificate representing Shire Ordinary Shares or Shire  
ADSs as contemplated by this Section 4.1 (or have the necessary CREST or other  
electronic transfer effected), (ii) a cash payment in lieu of any fractional    
Shire Ordinary Shares or Shire ADSs as contemplated by Section 4.4, and         
(iii) any dividends or distributions with a record date after the Effective Time
theretofore paid or payable with respect to Shire Ordinary Shares or Shire ADSs 
as contemplated by Section 4.3.                                                 

4.2. ISSUANCE OF CERTIFICATES REPRESENTING EXCHANGEABLE SHARES                  

 At or promptly after the Effective Time, ExchangeCo will deposit with the
Exchange Agent, for the benefit of the holders of BioChem Common Shares who will
receive Exchangeable Shares in connection with the Arrangement, certificates    
representing the Exchangeable Shares issued pursuant to Section 2.2(c) or       
Section 2.2(d) in exchange for Exchangeable Elected Shares. Upon surrender to   
the Exchange Agent for cancellation of a certificate which immediately prior to 
the Effective Time represented one or more Exchangeable Elected Shares under the
Arrangement, together with such other documents and instruments as would have   
been required to effect the transfer of the BioChem Common Shares formerly      
represented by such certificate under the CBCA and the by-laws of BioChem and   
such additional documents and instruments as the Exchange Agent may reasonably  
require, the holder of such surrendered certificate will be entitled to receive 
in exchange therefor, and the Exchange Agent will deliver to such holder, a     
certificate representing that number (rounded down to the nearest whole number) 
of Exchangeable Shares which such holder has the right to receive (together with
any dividends or distributions with respect thereto pursuant to Section 4.3 and 
any cash in lieu of fractional Exchangeable Shares pursuant to Section 4.4), and
the certificate so surrendered will forthwith be cancelled. In the event of a   
transfer of ownership of BioChem Common Shares that is not registered in the    
transfer records of BioChem, a certificate representing the proper number of    
Exchangeable Shares may be issued to the transferee if the certificate          
representing such BioChem Common Shares is presented to the Exchange Agent,     
accompanied by all documents required to evidence and effect such transfer under
the CBCA and the by-laws of BioChem and such additional documents and           
instruments as the Exchange Agent may reasonably require. Until surrendered as  
contemplated by this Section 4.2, each certificate which immediately prior to   
the Effective Time represented BioChem Common Shares that were exchanged for    
Exchangeable Shares will be deemed at all times after the Effective Time to     
represent only the right to receive upon such surrender (i) the certificate     
representing Exchangeable Shares as contemplated by this Section 4.2, (ii) a    
cash payment in lieu of any fractional Exchangeable Shares as contemplated by   
Section 4.4, and (iii) any dividends or distributions with a record date after  
the Effective Time theretofore paid or payable with respect to Exchangeable     
Shares as contemplated by Section 4.3.                                          

4.3. DISTRIBUTIONS WITH RESPECT TO UNSURRENDERED CERTIFICATES                   

No dividends or other distributions declared or made after the Effective
Time with respect to Exchangeable Shares or Shire Ordinary Shares with a record 
date after the Effective Time will be paid to the holder of any unsurrendered   
certificate which immediately prior to the Effective Time represented           
outstanding BioChem Common Shares that were exchanged pursuant to Section 2.2,  
and no cash payment in lieu of fractional shares will be paid to any such holder
pursuant to Section 4.4,                                                        

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unless and until the holder of record of such certificate shall surrender such  
certificate in accordance with Section 4.1 or 4.2. Subject to applicable law, at
the time of such surrender of any such certificate, there will be paid to the   
record holder of the certificates representing whole BioChem Common Shares,     
without interest, (i) the amount of any cash payable in lieu of a fractional    
Exchangeable Share, Shire ADS or Shire Ordinary Share to which such holder is   
entitled pursuant to Section 4.4, (ii) the amount of dividends or other         
distributions with a record date after the Effective Time theretofore paid with 
respect to such whole Exchangeable Share, Shire ADS or Shire Ordinary Share, as 
the case may be, that the holder is entitled to receive and (iii) on the        
appropriate payment date, the amount of dividends or other distributions with a 
record date after the Effective Time but prior to surrender and a payment date  
subsequent to surrender payable with respect to such whole Exchangeable Share,  
Shire ADS or Shire Ordinary Share, as the case may be, that the holder is       
entitled to receive.                                                            

4.4. NO FRACTIONAL SHARES                                                       

No certificates or scrip representing fractional Exchangeable Shares,   
fractional Shire ADSs or fractional Shire Ordinary Shares will be issued (or    
CREST or other electronic transfer effected in respect of any fractional share) 
upon the surrender for exchange of certificates pursuant to Section 4.1 or 4.2  
and no dividend, share split or other change in the capital structure of        
ExchangeCo or Shire, as the case may be, will have any effect on any such       
fractional share and such fractional interests will not entitle the holder      
thereof to exercise any rights as a security holder of ExchangeCo or Shire. In  
lieu of any such fractional shares:                                             

(a) each Person otherwise entitled to a fractional share in an  
    Exchangeable Share after aggregating all such fractional shares will receive
  a cash payment equal to such Person's PRO RATA portion of the net proceeds
   after expenses received by the Exchange Agent upon the sale of whole shares
representing an accumulation of all fractional interests in Exchangeable
  Shares to which all such Persons would otherwise be entitled. The Exchange
Agent will sell such Exchangeable Shares by way of sale through the     
    facilities of any stock exchange upon which the Exchangeable Shares are then
  listed as soon as reasonably practicable following the Effective Date. The
 aggregate net proceeds after expenses of such sale will be distributed by
   the Exchange Agent, PRO RATA in relation to the respective fractions, among
the Persons otherwise entitled to receive fractional interests in       
Exchangeable Shares;                                                    

   (b) each Person otherwise entitled to a fractional share in a Shire
  Ordinary Share after aggregating all such fractional shares will receive a
cash payment equal to such Person's PRO RATA portion of the net proceeds
   after expenses received by the Exchange Agent upon the sale of whole shares
  representing an accumulation of all fractional interests in Shire Ordinary
  Shares to which all such Persons would otherwise be entitled. The Exchange
Agent will sell such Shire Ordinary Shares by way of sale through the   
 facilities of any stock exchange upon which the Shire Ordinary Shares are
   then listed as soon as reasonably practicable following the Effective Date.
  The aggregate net proceeds after expenses of such sale will be distributed
by the Exchange Agent, PRO RATA in relation to the respective fractions,
among the Persons otherwise entitled to receive fractional interests in 
Shire Ordinary Shares; and                                              

       (c) each Person otherwise entitled to a fractional share in a Shire ADS
after aggregating all such fractional shares will receive a cash payment
  equal to such Person's PRO RATA portion of the net proceeds after expenses
    received by the Exchange Agent upon the sale of whole shares representing an
accumulation of all fractional interests in Shire ADSs to which all such
    Persons would otherwise be entitled. The Exchange Agent will sell such Shire
   ADSs by way of sale through the facilities of any stock exchange upon which
  the Shire ADSs are then listed as soon as reasonably practicable following
  the Effective Date. The aggregate net proceeds after expenses of such sale
will be distributed by the Exchange Agent, PRO RATA in relation to the  
respective fractions, among the Persons otherwise entitled to receive   
fractional interests in Shire ADSs.                                     

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4.5. LOST CERTIFICATES                                                          

  In the event any certificate which immediately prior to the Effective Time
represented one or more outstanding BioChem Common Shares that were exchanged   
pursuant to Section 2.2 shall have been lost, stolen or destroyed, upon the     
making of an affidavit of that fact by the Person claiming such certificate to  
be lost, stolen or destroyed, the Exchange Agent will issue in exchange for such
lost, stolen or destroyed certificate, one or more certificates representing one
or more Exchangeable Shares, Shire ADSs or Shire Ordinary Shares (or effect the 
necessary CREST or other electronic transfers) (and a cheque for any dividends  
or distributions with respect thereto pursuant to Section 4.3 and any cash in   
lieu of fractional interests therein pursuant to Section 4.4) deliverable in    
accordance with such holder's Letter of Transmittal and Election Form. When     
authorizing such issuance and payment in exchange for any lost, stolen or       
destroyed certificate, the Person to whom certificates representing Exchangeable
Shares, Shire ADSs or Shire Ordinary Shares are to be issued (or the necessary  
CREST or other electronic transfers effected) shall, as a condition precedent to
the issuance thereof, give a bond satisfactory to ExchangeCo, Shire and their   
respective transfer agents (including the Exchange Agent) in such sum as Shire  
may direct or, if Shire permits indemnification in lieu of a bond, otherwise    
indemnify ExchangeCo, Shire and their respective transfer agents (including the 
Exchange Agent) in a manner satisfactory to Shire against any claim that may be 
made against ExchangeCo, Shire and their respective transfer agents (including  
the Exchange Agent) with respect to the certificate alleged to have been lost,  
stolen or destroyed.                                                            

4.6. EXTINCTION OF RIGHTS                                                       

 Any certificate which immediately prior to the Effective Time represented
outstanding BioChem Common Shares that were exchanged pursuant to Section 2.2   
and not deposited with the Exchange Agent in accordance with Sections 4.1 or    
4.2, together with all other instruments required by Sections 4.1 or 4.2, on or 
prior to the fifth anniversary of the Effective Date shall cease to represent a 
claim or interest of any kind or nature as a shareholder of BioChem, Shire or   
ExchangeCo. On such date, the Exchangeable Shares, Shire ADSs or Shire Ordinary 
Shares (or cash in lieu of fractional interests therein, as provided in         
Section 4.4) to which the former registered holder of the certificate referred  
to in the preceding sentence was ultimately entitled shall be deemed to have    
been surrendered to ExchangeCo, together with all entitlements to dividends,    
distributions and interest thereon held for such former registered holder in    
accordance with Section 4.3.                                                    

4.7. WITHHOLDING RIGHTS                                                         

   ExchangeCo, CallCo, Shire and the Exchange Agent will be entitled to deduct
and withhold from any dividend or consideration otherwise payable to any holder 
of BioChem Common Shares, Shire Ordinary Shares, Shire ADSs or Exchangeable     
Shares, such amounts as ExchangeCo, CallCo, Shire or the Exchange Agent is      
required to deduct and withhold with respect to such payment under the ITA, the 
United States INTERNAL REVENUE CODE OF 1986, the United Kingdom tax laws or any 
provision of provincial, state, local or foreign tax law, in each case, as      
amended. To the extent that amounts are so withheld, such withheld amounts will 
be treated for all purposes hereof as having been paid to the holder of the     
shares in respect of which such deduction and withholding was made, provided    
that such withheld amounts are actually remitted to the appropriate taxing      
authority. To the extent that the amount so required to be deducted or withheld 
from any payment to a holder exceeds the cash portion of the consideration      
otherwise payable to the holder, ExchangeCo, CallCo, Shire and the Exchange     
Agent are hereby authorized to sell or otherwise dispose of such portion of the 
consideration as is necessary to provide sufficient funds to ExchangeCo, CallCo,
Shire or the Exchange Agent, as the case may be, to enable it to comply with    
such deduction or withholding requirement and ExchangeCo, CallCo, Shire or the  
Exchange Agent will notify the holder thereof and remit to the holder any       
unapplied balance of the net proceeds of such sale. ExchangeCo shall not be     
entitled to withhold amounts on dividends payable to holders of Exchangeable    
Shares pursuant to the United States INTERNAL                                   

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REVENUE CODE OF 1986 unless it has received an opinion from counsel stating that
such withholding is required under the INTERNAL REVENUE CODE OF 1986.           

4.8. STAMP TAX                                                                  

  Notwithstanding any other provision herein, holders of Exchangeable Shares
or Persons to whom Exchangeable Shares are issued (in each case other than      
Shire, its affiliates, the Exchange Agent and the Transfer Agent) shall be      
responsible for any and all Stamp Taxes payable in connection with the transfer,
exchange, redemption or issuance of such shares or their exchange for Shire     
Ordinary Shares or Shire ADSs, and transferees of Shire Ordinary Shares or Shire
ADSs or Persons to whom Shire Ordinary Shares or Shire ADSs are issued (in each 
case other than Shire, its affiliates, the Exchange Agent and the Transfer      
Agent) shall be responsible for any and all Stamp Taxes payable in connection   
with the transfer or issuance of such securities. In no event will Shire, its   
Affiliates, the Exchange Agent or the Transfer Agent be responsible for any such
Stamp Taxes and Shire, its Affiliates, the Exchange Agent and/or the Transfer   
Agent shall make such regulations and arrangements as are necessary to ensure   
that such holders, such transferees and such Persons pay all such applicable    
Stamp Taxes.                                                                    

ARTICLE 5 
CERTAIN RIGHTS OF CALLCO AND SHIRE
TO ACQUIRE EXCHANGEABLE SHARES

5.1. CALLCO LIQUIDATION CALL RIGHT                                              

(a) CallCo will have the overriding right (the "LIQUIDATION CALL
RIGHT"), in the event of and notwithstanding the proposed liquidation,  
dissolution or winding-up of ExchangeCo pursuant to Article 5 of the    
    Exchangeable Share Provisions, to purchase from all but not less than all of
 the holders of Exchangeable Shares (other than any holder of Exchangeable
   Shares which is Shire or an Affiliate of Shire) on the Liquidation Date all
    but not less than all of the Exchangeable Shares held by each such holder on
payment by CallCo of an amount per share (the "LIQUIDATION CALL PURCHASE
  PRICE") equal to the Current Market Price of a Shire Ordinary Share on the
  last Business Day prior to the Liquidation Date multiplied by three, which
  will be satisfied in full by CallCo causing to be delivered to such holder
    three Shire Ordinary Shares admitted to the official list of the UKLA and to
  trading on the LSE or one Shire ADS quoted on NASDAQ (at the option of the
   holder as indicated to the Transfer Agent), plus, to the extent not paid by
ExchangeCo, an additional amount equivalent to the full amount of all   
  declared and unpaid dividends on each such Exchangeable Share held by such
holder on any dividend record date which occurred prior to the date of  
   purchase by CallCo (the "DIVIDEND AMOUNT"). In the event of the exercise of
the Liquidation Call Right by CallCo, each holder (other than Shire or  
    Affiliates of Shire) shall be obligated to sell all but not less than all of
the Exchangeable Shares held by such holder to CallCo on the Liquidation
Date on payment by CallCo to the holder of the Liquidation Call Purchase
 Price for each such share, and ExchangeCo shall have no obligation to pay
the Liquidation Amount of such shares so purchased by CallCo.           

(b) To exercise the Liquidation Call Right, CallCo must notify  
    ExchangeCo's transfer agent (the "TRANSFER AGENT"), as agent for the holders
of Exchangeable Shares, and ExchangeCo of CallCo's intention to exercise
such right at least 45 days before the Liquidation Date in the case of a
   voluntary liquidation, dissolution or winding-up of ExchangeCo and at least
    five Business Days before the Liquidation Date in the case of an involuntary
liquidation, dissolution or winding-up of ExchangeCo. The Transfer Agent
  will notify the holders of Exchangeable Shares as to whether or not CallCo
  has exercised the Liquidation Call Right forthwith after the expiry of the
    period during which the same may be exercised by CallCo. If CallCo exercises
the Liquidation Call Right, then on the Liquidation Date CallCo will    
purchase and the holders (other than Shire or Affiliates of             

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  Shire) will sell all but not less than all of the Exchangeable Shares held
    by such holders for a price per share equal to the Liquidation Call Purchase
Price.                                                                  

   (c) For the purposes of completing the purchase of the Exchangeable
   Shares pursuant to the Liquidation Call Right, CallCo will deposit or cause
   to be deposited with the Transfer Agent, on or before the Liquidation Date,
  certificates representing the aggregate number of Shire Ordinary Shares or
Shire ADSs deliverable by CallCo (or effect the necessary CREST or other
 electronic transfers) and a cheque or cheques of CallCo payable at par at
any branch of the bankers of CallCo representing the aggregate Dividend 
Amount in payment of the total Liquidation Call Purchase Price, less any
 amounts withheld pursuant to Section 4.7 hereof. Provided that CallCo has
complied with the immediately preceding sentence, on and after the      
  Liquidation Date, the rights of each holder of Exchangeable Shares will be
limited to receiving such holder's proportionate part of the total      
Liquidation Call Purchase Price payable by CallCo upon presentation and 
    surrender by the holder of certificates representing the Exchangeable Shares
    held by such holder and the holder will on and after the Liquidation Date be
considered and deemed for all purposes to be the holder of the Shire    
    Ordinary Shares or Shire ADSs to which it is entitled, unless payment of the
    total Liquidation Call Purchase Prices for the Exchangeable Shares shall not
   be made upon presentation and surrender of share certificates in accordance
   with the provisions of this Section 5.1(c), in which case the rights of the
 holders shall remain unaffected until the total Liquidation Call Purchase
Price has been paid in the manner herein provided. Upon surrender to the
 Transfer Agent of a certificate or certificates representing Exchangeable
Shares, together with such other documents and instruments as may be    
   required to effect a transfer of Exchangeable Shares under the CBCA and the
  by-laws of ExchangeCo and such additional documents and instruments as the
Transfer Agent may reasonably require, the holder of such surrendered   
certificate or certificates will be entitled to receive in exchange     
 therefor, and the Transfer Agent on behalf of CallCo will deliver to such
holder as soon as reasonably practicable, certificates representing the 
Shire Ordinary Shares or Shire ADSs to which the holder is entitled (or 
 effect the necessary CREST or other electronic transfers) and a cheque or
  cheques of CallCo payable at par at any branch of the bankers of CallCo in
    payment of the Dividend Amount, and when received by the Transfer Agent, all
    dividends and other distributions with respect to such Shire Ordinary Shares
  or Shire ADSs with a record date after the Liquidation Date and before the
date of the transfer of such Shire Ordinary Shares or Shire ADSs to such
   holder, less any amounts withheld pursuant to Section 4.7 hereof. If CallCo
   does not exercise the Liquidation Call Right in the manner described above,
on the Liquidation Date the holders of the Exchangeable Shares will be  
entitled to receive in exchange therefor the Liquidation Amount of such 
shares pursuant to Article 5 of the Exchangeable Share Provisions.      

5.2. CALLCO REDEMPTION CALL RIGHT                                               

        (a) CallCo will have the overriding right (the "REDEMPTION CALL RIGHT"),
notwithstanding the proposed redemption of the Exchangeable Shares by   
 ExchangeCo pursuant to Article 7 of the Exchangeable Share Provisions, to
purchase from all but not less than all of the holders of Exchangeable  
 Shares (other than any holder of Exchangeable Shares which is Shire or an
   Affiliate of Shire) on the Redemption Date all but not less than all of the
 Exchangeable Shares held by each such holder on payment by CallCo to each
 holder of an amount per Exchangeable Share (the "REDEMPTION CALL PURCHASE
  PRICE") equal to the Current Market Price of a Shire Ordinary Share on the
 last Business Day prior to the Redemption Date multiplied by three, which
  will be satisfied in full by CallCo causing to be delivered to such holder
    three Shire Ordinary Shares admitted to the official list of the UKLA and to
  trading on the LSE or one Shire ADS quoted on NASDAQ (at the option of the
    holder as indicated to the Transfer Agent), plus the Dividend Amount. In the
 event of the exercise of the Redemption Call Right by CallCo, each holder
   (other than Shire or Affiliates of Shire) will be obligated to sell all but
not less than all the Exchangeable Shares held                          

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   by such holder to CallCo on the Redemption Date on payment by CallCo to the
holder of the Redemption Call Purchase Price for each such share, and   
ExchangeCo will have no obligation to redeem such shares so purchased by
CallCo.                                                                 

 (b) To exercise the Redemption Call Right, CallCo must notify the
Transfer Agent, as agent for the holders of Exchangeable Shares, and    
ExchangeCo of CallCo's intention to exercise such right at least 60 days
   before the Redemption Date, except in the case of a redemption occurring as
   a result of a Shire Control Transaction, an Exchangeable Share Voting Event
  or an Exempt Exchangeable Share Voting Event, in which case CallCo will so
  notify the Transfer Agent and ExchangeCo on or before the Redemption Date.
   The Transfer Agent will notify the holders of the Exchangeable Shares as to
whether or not CallCo has exercised the Redemption Call Right forthwith 
after the expiry of the period during which the same may be exercised by
CallCo. If CallCo exercises the Redemption Call Right, on the Redemption
  Date, CallCo will purchase and the holders (other than Shire or Affiliates
of Shire) will sell all but not less than all of the Exchangeable Shares
held by such holders for a price per share equal to the Redemption Call 
Purchase Price.                                                         

   (c) For the purposes of completing the purchase of the Exchangeable
  Shares pursuant to the Redemption Call Right, CallCo will deposit or cause
  to be deposited with the Transfer Agent, on or before the Redemption Date,
  certificates representing the aggregate number of Shire Ordinary Shares or
Shire ADSs deliverable by CallCo (or effect the necessary CREST or other
 electronic transfers) and a cheque or cheques of CallCo payable at par at
any branch of the bankers of CallCo representing the aggregate Dividend 
Amount in payment of the total Redemption Call Purchase Price, less any 
 amounts withheld pursuant to Section 4.7 hereof. Provided that CallCo has
complied with the immediately preceding sentence, on and after the      
    Redemption Date the rights of each holder of Exchangeable Shares (other than
Shire or Affiliates of Shire) will be limited to receiving such holder's
 proportionate part of the total Redemption Call Purchase Price payable by
CallCo upon presentation and surrender by the holder of certificates    
    representing the Exchangeable Shares held by such holder and the holder will
  on and after the Redemption Date be considered and deemed for all purposes
  to be the holder of the Shire Ordinary Shares or Shire ADSs to which it is
 entitled, unless payment of the total Redemption Call Purchase Prices for
    the Exchangeable Shares shall not be made upon presentation and surrender of
share certificates in accordance with the provisions of this            
Section 5.2(c), in which case the rights of the holders shall remain    
  unaffected until the total Redemption Call Purchase Price has been paid in
the manner herein provided. Upon surrender to the Transfer Agent of a   
   certificate or certificates representing Exchangeable Shares, together with
    such other documents and instruments as may be required to effect a transfer
    of Exchangeable Shares under the CBCA and the by-laws of ExchangeCo and such
 additional documents and instruments as the Transfer Agent may reasonably
   require, the holder of such surrendered certificate or certificates will be
  entitled to receive in exchange therefor, and the Transfer Agent on behalf
  of CallCo will deliver to such holder as soon as practicable, certificates
   representing the Shire Ordinary Shares or Shire ADSs to which the holder is
    entitled (or effect the necessary CREST or other electronic transfers) and a
  cheque or cheques of CallCo payable at par at any branch of the bankers of
    CallCo in payment of the Dividend Amount, less any amounts withheld pursuant
    to Section 4.7 hereof. If CallCo does not exercise the Redemption Call Right
in the manner described above, on the Redemption Date the holders of the
Exchangeable Shares will be entitled to receive in exchange therefor the
 Redemption Price of such Shares pursuant to Article 7 of the Exchangeable
Share Provisions.                                                       

5.3. SHIRE CALL RIGHT                                                           

      (a) Shire will have the right (the "SHIRE CALL RIGHT") to purchase, or
  to cause CallCo to purchase, from all but not less than all of the holders
  of Exchangeable Shares (other than any holder of Exchangeable Shares which
is Shire or an Affiliate of Shire) on the Exchange Date all             

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    but not less than all of the Exchangeable Shares held by each such holder on
   payment by Shire or CallCo, as the case may be, of an amount per share (the
 "SHIRE CALL PURCHASE PRICE") equal to the Current Market Price of a Shire
Ordinary Share on the last Business Day prior to the Exchange Date      
   multiplied by three, which will be satisfied in full by Shire delivering or
  causing to be delivered, or CallCo causing to be delivered, to such holder
    three Shire Ordinary Shares admitted to the official list of the UKLA and to
  trading on the LSE or one Shire ADS quoted on NASDAQ (at the option of the
   holder as indicated to the Transfer Agent), plus, to the extent not paid by
ExchangeCo, an additional amount equivalent to the full amount of all   
  declared and unpaid dividends on each such Exchangeable Share held by such
holder on any dividend record date which occurred prior to the date of  
purchase by Shire or CallCo pursuant to the Shire Call Right (the "CALL 
RIGHT DIVIDEND AMOUNT"). In the event of the exercise of the Shire Call 
   Right by Shire, each holder (other than Shire or Affiliates of Shire) shall
 be obligated to sell all but not less than all of the Exchangeable Shares
   held by such holder to Shire or CallCo, as the case may be, on the Exchange
    Date on payment by Shire or CallCo, as the case may be, to the holder of the
Shire Call Purchase Price for each such share.                          

        (b) To exercise the Shire Call Right, (i) Shire must notify the Transfer
 Agent, as agent for the holders of Exchangeable Shares, and ExchangeCo of
Shire's intention to exercise such right at least 45 days before the    
  Business Day on which the purchase of such Exchangeable Shares shall occur
   (the "EXCHANGE DATE") and such notice shall specify whether Shire or CallCo
    will effect such purchase, and (ii) Shire must deliver to the Transfer Agent
    and to the Trustee an opinion in writing signed by Canadian counsel to Shire
   (which counsel shall be satisfactory to the Trustee) stating that since the
Effective Date there has been a change enacted to the ITA and other     
   applicable provincial income tax laws to the effect that, and based thereon
 such opinion shall confirm that, the sale by Canadian resident holders of
   Exchangeable Shares to Shire or CallCo, as the case may be, pursuant to the
   Shire Call Right will qualify as a tax deferred transaction for purposes of
the ITA and other applicable provincial income tax laws for holders of  
Exchangeable Shares. The Transfer Agent will notify the holders of      
  Exchangeable Shares that the Shire Call Right has been exercised by Shire.
   If Shire exercises the Shire Call Right, then on the Exchange Date Shire or
   CallCo, as the case may be, will purchase and the holders (other than Shire
or Affiliates of Shire) will sell all but not less than all of the      
   Exchangeable Shares held by such holders for a price per share equal to the
Shire Call Purchase Price.                                              

   (c) For the purposes of completing the purchase of the Exchangeable
Shares pursuant to the Shire Call Right, Shire will deposit with the    
 Transfer Agent, on or before the Exchange Date, certificates representing
  the aggregate number of Shire Ordinary Shares or Shire ADSs deliverable by
    Shire or CallCo, as the case may be, (or effect the necessary CREST or other
electronic transfers) and a cheque or cheques of Shire or CallCo, as the
    case may be, payable at par at any branch of the bankers of Shire or CallCo,
    as the case may be, representing the aggregate Call Right Dividend Amount in
 payment of the total Shire Call Purchase Price, less any amounts withheld
  pursuant to Section 4.7 hereof. Provided that Shire or CallCo, as the case
  may be, has complied with the immediately preceding sentence, on and after
   the Exchange Date, the rights of each holder of Exchangeable Shares will be
limited to receiving such holder's proportionate part of the total Shire
Call Purchase Price upon presentation and surrender by the holder of    
 certificates representing the Exchangeable Shares held by such holder and
   the holder will on and after the Exchange Date be considered and deemed for
   all purposes to be the holder of the Shire Ordinary Shares or Shire ADSs to
    which it is entitled, unless payment of the total Shire Call Purchase Prices
for the Exchangeable Shares shall not be made upon presentation and     
 surrender of share certificates in accordance with the provisions of this
Section 5.3(c), in which case the rights of the holders shall remain    
 unaffected until the total Shire Call Purchase Price has been paid in the
manner herein provided. Upon surrender to the Transfer Agent of a       
   certificate or certificates representing Exchangeable Shares, together with
such other documents and instruments as may be                          

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   required to effect a transfer of Exchangeable Shares under the CBCA and the
  by-laws of ExchangeCo and such additional documents and instruments as the
Transfer Agent may reasonably require, the holder of such surrendered   
certificate or certificates will be entitled to receive in exchange     
  therefor, and the Transfer Agent on behalf of Shire or CallCo, as the case
may be, will deliver to such holder, certificates representing the Shire
    Ordinary Shares or Shire ADSs to which the holder is entitled (or effect the
 necessary CREST or other electronic transfers) and a cheque or cheques of
Shire or CallCo, as the case may be, payable at par at any branch of the
    bankers of Shire or CallCo, as the case may be, in payment of the Call Right
  Dividend Amount and when received by the Transfer Agent, all dividends and
    other distributions with respect to such Shire Ordinary Shares or Shire ADSs
with a record date after the Exchange Date and before the date of the   
 transfer of such Shire Ordinary Shares or Shire ADSs to such holder, less
any amounts withheld pursuant to Section 4.7 hereof.                    

ARTICLE 6 
AMENDMENTS

6.1. AMENDMENTS TO PLAN OF ARRANGEMENT                                          

  BioChem reserves the right to amend, modify and/or supplement this Plan of
Arrangement prior to the Effective Date provided that each such amendment,      
modification and/or supplement is (i) set out in writing, (ii) approved by      
Shire, (iii) filed with the Court and, if made following the BioChem            
Securityholder Meeting, approved by the Court, and (iv) communicated to holders 
of BioChem Common Shares if and as required by the Court.                       

    Any amendment, modification or supplement to this Plan of Arrangement may be
proposed by BioChem at any time prior to the BioChem Securityholder Meeting     
(provided that Shire shall have consented thereto) with or without any other    
prior notice or communication, and if so proposed and accepted by the Persons   
voting at the BioChem Securityholder Meeting (subject to the requirements set   
forth in the Interim Order), will become part of this Plan of Arrangement for   
all purposes.                                                                   

  Any amendment, modification or supplement to this Plan of Arrangement that
is approved or directed by the Court following the BioChem Securityholder       
Meeting will be effective only if (i) it is consented to by each of BioChem and 
Shire, and (ii) if required by the Court, it is consented to by BioChem         
Securityholders voting in the manner directed by the Court.                     

6.2. FURTHER ASSURANCES                                                         

  Each party hereto shall, from time to time, and at all times hereafter, at
the request of the other parties hereto, but without further consideration, do  
all such further acts and execute and deliver all such further documents and    
instruments as shall be reasonably required in order to fully perform and carry 
out the terms and intent hereof.                                                

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                                                                         ANNEX C

STOCK OPTION AGREEMENT

    THIS STOCK OPTION AGREEMENT is made and entered into as of December 10, 2000
(the "AGREEMENT") by and between Shire Pharmaceuticals Group Plc, a company     
registered in England under registry number 2883758 ("SHIRE"), and BioChem      
Pharma Inc., a corporation incorporated under the laws of Canada ("BIOCHEM"),   
with respect to the following facts:                                            

WITNESSETH: 

 A. Concurrently with the execution and delivery of this Agreement, Shire,
BioChem and 3829341 Canada Inc., a corporation incorporated under the laws of   
Canada and an indirect wholly-owned subsidiary of Shire ("EXCHANGECO"), are     
entering into a merger agreement (the "MERGER AGREEMENT"), which provides that, 
among other things, upon the terms and subject to the conditions thereof, Shire 
and BioChem will enter into a business combination transaction (the             
"ARRANGEMENT").                                                                 

    B. As a condition to Shire's willingness to enter into the Merger Agreement,
Shire has requested that BioChem agree, and BioChem has so agreed, to grant to  
Shire an option to acquire BioChem Common Shares ("BIOCHEM SHARES"), upon the   
terms and subject to the conditions set forth herein.                           

   C. Capitalized terms used and not otherwise defined herein that are defined
in the Merger Agreement shall have the respective meanings ascribed thereto in  
the Merger Agreement.                                                           

In consideration of the foregoing and the respective representations,   
warranties and covenants set forth in this Agreement, and intending to be       
legally bound hereby and thereby, the parties agree hereto as follows:          

1. GRANT OF OPTION.                                                     

   (a) Subject to the terms and conditions set forth herein, including receipt
of all regulatory approvals to the granting of the Option (including approvals, 
as the case may be, of the TSE (collectively, the "STOCK EXCHANGE")), BioChem   
hereby grants to Shire an irrevocable option (the "OPTION") to acquire up to    
19.9% of the outstanding BioChem Shares as of December 8, 2000 (on an undiluted 
basis) (the "OPTION SHARES"), in the manner set forth below at a price (the     
"EXERCISE PRICE") of US$37.00 per Option Share, payable in cash.                

(b) In the event Shire receives official notice that all regulatory     
approvals necessary in respect of the granting of the Option, including approval
of the relevant Stock Exchange, will not be issued or granted, the Option and   
this Agreement shall be, and shall be deemed to be, one stock appreciation right
("SAR") with respect to the Option Shares. At the request and upon notice by    
Shire at any time during the period during which the Option is exercisable,     
BioChem (or any successor entity thereof) shall purchase from Shire the SAR, at 
a price equal to the difference between the "MARKET/TENDER OFFER PRICE" for     
BioChem Shares as of the date Shire gives notice of its intent to exercise its  
rights under this Section and the Exercise Price, multiplied by the number of   
BioChem Shares purchasable pursuant to the Option. For purposes of this         
Agreement, "MARKET/TENDER OFFER PRICE" means the higher of (A) the highest price
per share offered as of such date pursuant to any Acquisition Proposal which was
made prior to such date and not terminated or withdrawn as of such date and     
(B) the highest closing sale price of BioChem Shares on the Nasdaq during the   
twenty (20) trading days ending on the trading day immediately preceding such   
date. For purposes of determining the highest price offered pursuant to any     
Acquisition Proposal which involves consideration other than cash, the value of 
such consideration shall be equal to the higher of (x) if securities of the     
proponent of the same class as such consideration are traded on any national    
securities exchange or by any registered securities association, a value based  
on the closing sale price for such securities on their principal trading market 
on such date and (y) the                                                        

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value ascribed to such consideration by the proponent of such Acquisition       
Proposal, or if no such value is ascribed, a value determined in good faith by  
the board of directors of BioChem.                                              

2. EXERCISE OF OPTION; MAXIMUM PROCEEDS.                                

  (a) The Option may be exercised by Shire, in whole or in part, at any time
and from time to time, immediately upon the occurrence of any event under       
Section 7.2 of the Merger Agreement requiring BioChem to pay to Shire the amount
specified therein (the "EXERCISE EVENT"). In the event Shire wishes to exercise 
the Option, Shire shall deliver to BioChem a written notice (each an "EXERCISE  
NOTICE") specifying the total number of Option Shares it wishes to acquire and  
pay the Exercise Price by certified cheque or wire transfer. Each closing of a  
purchase of Option Shares (a "CLOSING") shall occur on a date and at a time     
prior to the expiration of the Option designated by Shire in an Exercise Notice 
delivered at least two Business Days prior to the date of such Closing, which   
Closing shall be held at the offices of Stikeman Elliott, 1155 Rene-Levesque    
Blvd. West, 40th Floor, Montreal (Quebec).                                      

   (b) The Option shall expire upon the earliest to occur of (i) the Effective
Date, or (ii) the termination of the Merger Agreement pursuant to Article VII   
thereof (other than a termination in connection with which Shire is or could in 
time become entitled to any payments as specified in Section 7.2 thereof), or   
(iii) 180 days after the date on which the Merger Agreement is terminated and   
Shire has become entitled to a payment as specified in Section 7.2 thereof;     
provided, however, that if the Option cannot be exercised by reason of any      
applicable Laws, or because any applicable waiting period related to issuance of
the Option Shares under any applicable Laws shall not have expired or been      
terminated, then the Option shall not terminate until the tenth Business Day    
after such impediment to exercise shall have been removed or shall have become  
final and not subject to appeal.                                                

(c) If Shire receives an amount pursuant to Section 7.2 of the Merger   
Agreement which, when aggregated with gross proceeds received by Shire in       
connection with any sales or other dispositions of Option Shares, less          
reasonable and customary commissions paid in connection with such sales or      
dispositions and any dividends received by Shire declared on Option Shares,     
exceeds the sum of (x) US$120,000,000 plus (y) the Exercise Price multiplied by 
the number of BioChem Shares purchased by Shire pursuant to the Option, then all
gross proceeds to Shire in excess of such sum shall be remitted by Shire to     
BioChem or deducted from the payment to be made by BioChem pursuant to          
Section 1 (b) hereof.                                                           

3. CONDITIONS TO CLOSING.                                               

The obligation of BioChem to issue Option Shares to Shire hereunder is  
subject to the conditions that (a) all filings and declarations required to be  
made, all authorizations, consents, orders and approvals required to be obtained
in connection with the grant of the Option and the issue of the Option Shares   
(including the approval of the relevant Stock Exchange), and all waiting periods
required to expire or be terminated, pursuant to a requirement of any           
Governmental Entity or applicable Law (including, without limitation the HSR Act
or the CA, as the case may be) shall have been made or obtained or shall have   
expired or been terminated, in each case in connection with the exercise of the 
Option hereunder; and (b) no preliminary or permanent injunction or other order 
by any court of competent jurisdiction (or similar order from any Canadian, US  
or UK securities authority) prohibiting or otherwise restraining such issuance  
shall be in effect. It is understood and agreed that at any time during which   
the Option is exercisable, the parties will use their respective commercial     
reasonable efforts to satisfy all conditions to Closing, so that a Closing may  
take place as promptly as practicable, and in any event, prior to consummation  
of a tender or exchange offer or take-over bid for shares of BioChem capital    
stock.                                                                          

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4. CLOSING.                                                             

   At each Closing, (a) BioChem shall deliver to Shire a single certificate in
definitive form representing the number of BioChem Shares designated by Shire in
its Exercise Notice, such certificate to be registered in the name of Shire and 
to bear the legend set forth in Section 10 hereof, against delivery of          
(b) payment by Shire to BioChem of the aggregate purchase price for the BioChem 
Shares so designated and being purchased by delivery of a certified cheque, bank
draft or wire transfer.                                                         

5. REPRESENTATIONS AND WARRANTIES OF BIOCHEM.                           

   BioChem represents and warrants to Shire that: (a) BioChem is a corporation
duly incorporated, validly existing and in good standing under the laws of      
Canada and has full corporate power and authority to execute and deliver this   
Agreement and to carry out its obligations hereunder; (b) the execution and     
delivery of this Agreement by BioChem and consummation by BioChem of the        
transactions contemplated hereby have been duly and validly authorized by all   
necessary corporate action on the part of BioChem, and no other corporate       
proceedings on the part of BioChem are necessary to authorize this Agreement or 
any of the transactions contemplated hereby; (c) this Agreement has been duly   
and validly executed and delivered by BioChem, constitutes a legal, valid and   
binding obligation of BioChem and, assuming this Agreement constitutes a legal, 
valid and binding obligation of Shire, is enforceable against BioChem in        
accordance with its terms, except as enforceability may be limited by bankruptcy
and other laws affecting the rights and remedies of creditors generally and     
general principles of equity; (d) except for any filings required under the CA  
and the approval of the relevant Stock Exchange, BioChem has taken (or will in a
timely manner take) all necessary corporate and other action to authorize and   
reserve for issuance and to permit it to issue upon exercise of the Option, and 
at all times from the date hereof until the termination of the Option will have 
reserved for issuance, a sufficient number of unissued BioChem Shares for Shire 
to exercise the Option in full upon payment to BioChem of the Exercise Price in 
connection therewith and will take all necessary corporate or other action to   
authorize and reserve for issuance all additional BioChem Shares or other       
securities which may be issuable pursuant to Section 9 upon exercise of the     
Option and payment of the Exercise Price, all of which, upon their issuance and 
delivery in accordance with the terms of this Agreement, will be validly issued,
fully paid and nonassessable; (e) upon delivery of the BioChem Shares and any   
other securities to Shire upon exercise of the Option and payment of the        
Exercise Price, Shire will acquire such BioChem Shares or other securities free 
and clear of all material claims, liens, charges, encumbrances and security     
interests of any kind or nature whatsoever, excluding those imposed by Shire;   
(f) the execution and delivery of this Agreement by BioChem do not, and the     
performance of this Agreement by BioChem will not, (i) conflict with the        
articles of incorporation or bylaws of BioChem, (ii) assuming that the consent  
approvals, authorizations, permits, filings and notifications referred to in    
subsection 5d) are obtained or made as applicable, violate any order applicable 
to BioChem or any of its Subsidiaries or by which they or any of their property 
is bound or affected, or (iii) result in any breach of or constitute a default  
(or an event which with notice or lapse of time or both would become a default) 
under, or give rise to any right of termination, amendment, acceleration or     
cancellation of, or result in the creation of a lien or encumbrance on any of   
the property or assets of BioChem or any of its Subsidiaries pursuant to, any   
contract or agreement to which BioChem or any of its Subsidiaries is a party or 
by which BioChem or any of its Subsidiaries or any of their property is bound or
affected, except, in the case of clauses (ii) and (iii) above, for violations,  
conflicts, breaches, defaults, rights of termination, amendment, acceleration or
cancellation, liens or encumbrances which would not, in the aggregate, have a   
Material Adverse Effect on BioChem; and (g) except as described in              
Section 3.2(c) of the Merger Agreement, the execution and delivery of this      
Agreement by BioChem does not, and the performance of this Agreement by BioChem 
will not, require any consent, approval, authorization or permit of, or filing  
with, or notification to, any Governmental Entity, except pursuant to the CA,   
the HSR Act, the rules and regulations of the Stock                             

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Exchange, the Canadian Securities Laws, the applicable US and UK securities laws
or other applicable Regulatory Laws, as the case may be.                        

6. REPRESENTATIONS AND WARRANTIES OF SHIRE.                             

 Shire represents and warrants to BioChem that: (a) Shire is a corporation
duly incorporated and validly existing under the laws of England, and has full  
corporate power and authority to execute and deliver this Agreement and to carry
out its obligations hereunder; (b) the execution and delivery of this Agreement 
by Shire and the consummation by Shire of the transactions contemplated hereby  
have been duly and validly authorized by all necessary corporate action on the  
part of Shire and no other corporate proceedings on the part of Shire are       
necessary to authorize this Agreement or any of the transactions contemplated   
hereby; (c) this Agreement has been duly and validly executed and delivered by  
Shire, constitutes a legal, valid and binding obligation of Shire and, assuming 
this Agreement constitutes a legal, valid and binding obligation of BioChem, is 
enforceable against Shire in accordance with its terms, except as enforceability
may be limited by bankruptcy and other laws affecting the rights and remedies of
creditors generally and general principles of equity; (d) the execution and     
delivery of this Agreement by Shire do not, and the performance of this         
Agreement by Shire will not, (i) conflict with certificate of incorporation or  
bylaws of Shire, (ii) violate any order applicable to Shire or any of its       
subsidiaries or by which they or any of their property is bound or affected, or 
(iii) result in any breach of or constitute a default (or an event which with   
notice or lapse of time or both would become a default) under, or give rise to  
any right of termination, amendment, acceleration or cancellation of, or result 
in the creation of a lien or encumbrance on any of the property or assets of    
Shire or any of its Subsidiaries pursuant to, any contract or agreement to which
Shire or any of its Subsidiaries is a party or by which Shire or any of its     
Subsidiaries or any of their property is bound or affected, except, in the case 
of clauses (ii) and (iii) above, for violations, conflicts, breaches, defaults, 
rights of termination, amendment, acceleration or cancellation, liens or        
encumbrances which would not, in the aggregate, have a Material Adverse Effect  
on Shire; (g) the execution and delivery of this Agreement by Shire does not,   
and the performance of this Agreement by Shire will not, require any consent,   
approval, authorization or permit of, or filing with or notification to, any    
Governmental Entity, except pursuant to the HSR Act, the CA or other applicable 
Regulatory Laws, as the case may be; and (h) any BioChem Shares acquired upon   
exercise of the Option will not be acquired by Shire with a view to the public  
distribution thereof and Shire will not sell or otherwise dispose of such shares
in violation of applicable law or this Agreement.                               

7. REGISTRATION RIGHTS.                                                 

   (a) In the event that Shire desires to sell any of the Option Shares within
two years after the first exercise of the Option and requests in writing to     
BioChem that BioChem register such Option Shares under the Securities Act or    
qualify such Option Shares for resale under applicable Canadian securities laws,
unless in the opinion of counsel to BioChem (which opinion shall be reasonably  
satisfactory to Shire and its counsel) such registration under the Securities   
Act or qualification under applicable Canadian securities laws is not required  
in order to lawfully sell and distribute such Option Shares in the manner       
contemplated by Shire, BioChem shall cooperate with Shire and any underwriters  
in registering or qualifying of such Option Shares for resale, including,       
without limitation, promptly filing a registration statement and/or prospectus  
which complies with the requirements of applicable U.S. federal and state       
securities laws and/or Canadian federal, provincial and territorial securities  
laws, as the case may be, and entering into and complying with an underwriting  
agreement with such underwriters upon such terms and conditions as are          
customarily contained in underwriting agreements with respect to secondary      
distributions; (i) provided, however, that BioChem shall not be required to file
more than two registration statements which are declared effective and/or       
prospectuses hereunder and shall be entitled to delay the filing or             
effectiveness of any registration statement and/or prospectus for up to 120     
consecutive days in any 12-month period if the offering would, in the judgment  
of the                                                                          

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Board of Directors of BioChem, require premature disclosure of any material     
corporate development or otherwise materially interfere with or materially      
adversely affect any pending or proposed offering of securities of BioChem,     
acquisition or divestiture or any other material transaction involving BioChem  
or any of its subsidiaries and (ii) provided, however, that BioChem shall not be
required, with respect to an underwritten secondary offering, to file a         
registration statement or a prospectus upon obtention from an investment banking
firm of nationally recognized standing (the "MANAGER") of a certificate stating 
that, in the good faith belief of the Manager, based on the then prevailing     
market condition, it will not be able to sell the Option Shares at a per share  
price equal to at least 80% of the per share average of the closing sale prices 
of BioChem's Shares on the TSE or the Nasdaq. Shire agrees to use its reasonable
commercial efforts to cause, and to use its commercial efforts to cause any     
underwriters of any sale or other disposition to cause, any sale or other       
disposition pursuant to such registration statement and/or prospectus to be     
effected on a widely distributed basis so that upon consummation thereof no     
purchaser or transferee will own beneficially more than (3%) of the             
then-outstanding BioChem Shares.                                                

   (b) If Option Shares are registered or qualified pursuant to the provisions
of this Section 8, BioChem agrees (i) to furnish copies of the registration     
statement and/or prospectus relating to the Option Shares covered thereby in    
such numbers as Shire may from time to time reasonably request and (ii) if any  
event shall occur as a result of which it becomes necessary to amend or         
supplement any registration statement or prospectus, to prepare and file under  
the applicable securities laws such amendments and supplements as may be        
necessary to keep available for at least 120 days a prospectus covering the     
Option Shares meeting the requirements of such securities laws, and to furnish  
Shire with such numbers of copies of the registration statement and prospectus, 
as amended or supplemented, as may reasonably be requested. BioChem shall bear  
the cost of the registration or qualification, including but nor limited to, all
registration and filing fees, printing expenses, and fees and disbursements of  
its counsel and accountants for BioChem, and Shire shall pay the fees and       
disbursement s of its counsel and the underwriting fees and commissions         
applicable to the Option Shares sold by Shire. BioChem shall indemnify and hold 
harmless Shire, its affiliates and their respective officers and directors from 
and against any and all losses, claims, damages, liabilities and expenses       
arising out of or based upon any statements contained in or omissions or alleged
omissions from, each registration statement or prospectus (or any amendment     
thereto) filed pursuant to this paragraph; provided, however, that this         
provision shall not apply to any loss, liability, claim, damage or expense to   
the extent it arises out of any untrue statement or omission made in reliance   
upon and in conformity with written information furnished by BioChem by Shire,  
its affiliates and its officers and other representatives expressly for use in  
any registration statement or prospectus (or any amendment thereto) filed       
pursuant to this paragraph. BioChem shall also indemnify and hold harmless each 
underwriter and each person who controls any underwriter against any and all    
losses, claims, damages, liabilities and expenses arising out of or based upon  
any statement contained in or omissions or alleged omissions from, each         
registration statement or prospectus (or any amendment thereto) filed pursuant  
to this Section 8.                                                              

9. ADJUSTMENT UPON CHANGES IN CAPITALIZATION; RIGHTS PLANS.             

(a) If any change shall occur in the BioChem Shares by reason of stock  
dividends, stock splits, reverse stock splits, mergers, amalgamations (other    
than the Arrangement), recapitalizations, combinations, exchanges of shares and 
the like, then (i) the type and number of shares or securities subject to the   
Option and (ii) the Exercise Price shall be adjusted appropriately, and proper  
provision shall be made in the agreements governing such transaction so that    
Shire shall receive, upon exercise of the Option, the number and class of shares
or other securities or property that Shire would have received in respect of the
BioChem Shares if the Option had been exercised immediately prior to such change
or the record date therefor, as applicable.                                     

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    (b) (i) In the event that BioChem enters into an agreement (A) to amalgamate
with or merge into any Person, other than Shire or any Subsidiary of Shire (each
an "EXCLUDED PERSON"), and BioChem is not the successor corporation of such     
amalgamation or merger, (B) to permit any Person, other than an Excluded Person,
to merge into BioChem and BioChem shall be the successor corporation, but, in   
connection with such merger, the then outstanding BioChem Common Shares shall be
changed into or exchanged for stock or other securities of any other Person or  
cash or any other property or the then outstanding BioChem Common Shares shall  
after such merger represent less than 50% of the outstanding voting securities  
of the merged or acquiring company, or (C) to sell or otherwise transfer all or 
substantially all of its assets to any Person, then, and in each such case, the 
agreement governing such transaction shall make proper provision so that, unless
earlier exercised by Shire, the Option shall, upon the consummation of any such 
transaction and upon the terms and conditions set forth herein, be converted    
into, or exchanged for, an option with identical terms appropriately adjusted to
acquire the number and class of shares or other securities or property that     
Shire would have received in respect of BioChem Common Shares if the Option had 
been exercised immediately prior to such amalgamation, merger, sale, or         
transfer, on the record date therefor, as applicable, and make any other        
necessary adjustments; provided, however, that if such a conversion or exchange 
cannot, because of applicable Law be the same as the Option, such terms shall be
as similar as possible and in no event less advantageous to Shire than the      
Option.                                                                         

    (ii) In addition to any other restrictions or covenants, BioChem agrees that
it shall not enter or agree to enter into any transaction described in this     
Section 9(b) unless the Acquiring Corporation (as hereinafter defined) and any  
Person that controls the Acquiring Corporation assume in writing all the        
obligations of BioChem hereunder and agree for the benefit of Shire to comply   
with this Section 9.                                                            

 (iii) For purposes of this Section 9(b), the term "ACQUIRING CORPORATION"
shall mean (x) the successor Person of an amalgamation or merger with BioChem   
(if other than BioChem), (y) BioChem in an amalgamation or merger in which      
BioChem is the successor Person, and (z) the transferee of all or substantially 
all of BioChem's assets.                                                        

10. RESTRICTIVE LEGENDS.                                                

   Each certificate representing Option Shares issued to Shire hereunder shall
include a legend in substantially the following form:                           

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED 
UNDER THE SECURITIES ACT OF 1933, OR QUALIFIED FOR DISTRIBUTION TO THE  
PUBLIC PURSUANT TO APPLICABLE CANADIAN SECURITIES LAWS OR UK SECURITIES 
   LAWS, AND MAY BE REOFFERED OR SOLD ONLY IF SO REGISTERED OR QUALIFIED OR IF
  AN EXEMPTION FROM SUCH REGISTRATION(S) OR REQUIREMENT TO FILE A PROSPECTUS
    IS AVAILABLE. SUCH SECURITIES ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON
 TRANSFER AS SET FORTH IN THE STOCK OPTION AGREEMENT, DATED AS OF DECEMBER
10, 2000, A COPY OF WHICH MAY BE OBTAINED FROM THE ISSUER.              

Certificates representing shares sold in a registered public offering   
pursuant to Section 8 shall not be required to bear the legend set forth in this
Section 10.                                                                     

11. LISTING AND HSR AND REGULATORY APPROVALS                            

 BioChem, upon the request of Shire, shall promptly file an application to
list the BioChem Shares to be acquired upon exercise of the Option on the Stock 
Exchange and shall use its reasonable commercial efforts to obtain approval of  
such listings as soon as practicable. Promptly after a request by Shire, BioChem
shall file Notification and Report Forms under the CA with the Competition      
Bureau and make all filings required under the HSR Act. BioChem shall use all   
its best reasonable                                                             

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efforts to respond as promptly as practicable to any inquiries received from the
Competition Bureau or in response to filings under the HSR Act for additional   
information or documentation.                                                   

12. WAIVER OF VOTING RIGHTS.                                            

   Shire agrees that it shall have no voting rights, and shall not exercise or
permit to be exercised any voting rights in any circumstances, in respect of the
Option or the Option Shares unless, until, and only to the extent that the      
Option has been exercised and the Exercise Price has actually been paid to      
BioChem.                                                                        

13. BINDING EFFECT.                                                     

    This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. This Agreement is 
not intended to confer any rights or remedies upon any Person other than the    
parties hereto. Any shares sold by a party in compliance with the provisions of 
Section 8 hereof shall, upon consummation of such sale, be free of the          
restrictions imposed with respect to such shares by this Agreement and any      
transferee of such shares shall not be entitled the rights of the transferor    
under this Agreement.                                                           

14. SPECIFIC PERFORMANCE.                                               

  Each of the parties hereto recognizes and acknowledges that a breach by it
of any covenants or agreements contained in this Agreement will cause the other 
party to sustain damages for which it would not have an adequate remedy at law  
for money damages. Therefore, in the event of any such breach, the aggrieved    
party shall be entitled to the remedy of specific performance of such covenants 
and agreements and injunctive and other equitable relief in addition to any     
other remedy to which it may be entitled, at law or in equity.                  

15. ENTIRE AGREEMENT.                                                   

This Agreement and the Merger Agreement, including the exhibits and     
schedules thereto and the documents and instruments referred to therein embody  
the entire agreement and understanding of the parties hereto in respect of the  
subject matter contained herein. There are no representations, promises,        
warranties, covenants, or undertakings, other than those expressly set forth or 
referred to herein and therein.                                                 

16. FURTHER ASSURANCES.                                                 

Each party will execute and deliver all such further documents and      
instruments and take all such further action as may be necessary in order to    
consummate the transactions contemplated hereby.                                

17. SEVERABILITY.                                                       

    In case any one or more of the provisions contained in this Agreement should
be finally determined to be invalid, illegal or unenforceable in any respect    
against a party hereto, it shall be adjusted if possible to effect the intent of
the parties. In any event, the validity, legality and enforceability of the     
remaining provisions contained herein shall not in any way be affected or       
impaired thereby, and such invalidity, illegality or unenforceability shall only
apply as to such party in the specific jurisdiction where such final            
determination shall have been made.                                             

18. NOTICES.                                                            

    All notices and other communications hereunder shall be in writing and shall
be delivered personally, by overnight courier or similar means or sent by       
facsimile with written confirmation of                                          

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receipt, to the parties at the addresses specified below (or at such other      
address for a party as shall be specified by like notice). Any such notice shall
be effective upon receipt, if personally delivered, or on the next business day 
following transmittal, if sent by facsimile. Notices shall be delivered as      
follows:                                                                        

(a) if to Shire, to:                                                    

Shire Pharmaceuticals Group Plc                           
East Anton Andover                                        
Hampshire, England                                        
England SP10 5RG                                          

Fax: 012 64 334 658                                       
Attention: Rolf Stahel                                    

with copies to:                                           

McCarthy Tetrault                                         
1170 Peel Street                                          
Montreal, Quebec                                          
H3B 4S8                                                   

Fax: (514) 397-4235                                       
Attention: Benjamin H. Silver                             

(b) if to BioChem to:                                                   

BioChem Pharma Inc.                                       
275 Armand-Frappier Blvd                                  
Laval, Quebec                                             
Canada H7V 4A7                                            
Fax: (450) 978-7899                                       
Attention: Francesco Bellini                              

with a copy to:                                           

Stikeman Elliott                                          
1155 Rene-Levesque Blvd West                              
Suite 4000                                                
Montreal, Quebec                                          
H3B 3V2                                                   

Fax: (514) 397-3222                                       
Attention: Jean Marc Huot                                 

19. GOVERNING LAW.                                                      

  This Agreement shall be governed and construed in accordance with the laws
of the Province of Quebec and the federal laws of Canada applicable therein     
(without giving effect to choice of law principles thereof).                    

20. COUNTERPARTS.                                                       

 This Agreement may be executed in two or more counterparts, each of which
shall be deemed to be an original, but both of which together shall constitute  
one and the same instrument.                                                    

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21. EXPENSES.                                                           

 Except as otherwise expressly provided herein or in the Merger Agreement,
all costs, and expenses incurred in connection with the transactions            
contemplated by this Agreement shall be paid by the party incurring such        
expenses.                                                                       

22. AMENDMENTS; WAIVER.                                                 

This Agreement may be amended, modified or supplemented only by written 
agreement of the parties. The terms and conditions hereof may be waived only by 
an instrument in writing signed by the party granting such waiver, but such     
waiver or failure to insist upon strict compliance with a term or condition     
shall not operate as a waiver or estoppel with respect to, any subsequent or    
other failure.                                                                  

23. ASSIGNMENT.                                                         

Neither this Agreement nor the Option created hereunder nor any right,  
interest or obligation hereunder shall be assigned by either party without the  
prior written consent of the other, except that this Agreement shall be binding 
upon and inure to the benefit of the parties hereto and their successors and    
permitted assigns.                                                              

24. CURRENCY.                                                           

 Except as expressly set forth otherwise, all sums of money referred to in
this Agreement are expressed in lawful money of Canada.                         

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be 
signed by their respective duly authorized officers as of the date first above  
written.                                                                        

                                   SHIRE PHARMACEUTICALS GROUP PLC
                                          By: __________________________________
                     Name: Rolf Stahel
                                  Title: Chief Executive Officer

                       BIOCHEM PHARMA INC.
                                          By: __________________________________
                           Name: Francesco Bellini
                                       Title: Chairman and Chief Executive
           Officer

                                          By: __________________________________
                          Name: Francois Legault
                                   Title: Executive Vice-President
                                       Corporate Development and
               Investments

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                                                                         ANNEX D

STRICTLY PRIVATE AND                                                            
CONFIDENTIAL                                                                    
                                                         Deutsche Bank AG London
                                                  Winchester House
Board of Directors                                                              
                                                    1 Great Winchester
Street                                                                          
Shire Pharmaceuticals Group                                                     
plc                                                                             
                                                 London EC2N 2DB
East Anton                                                                      
Icknield Way                                                                    
                                                   Tel 020 7545 8000
Andover                                                                         
Hampshire SP10 4RG                                                              
                                                               10 December, 2000

Gentlemen:                                                                      

   Deutsche Bank AG London ("Deutsche Bank") has acted as financial advisor to
Shire Pharmaceuticals Group plc (Shire") in connection with the proposed merger 
of Shire and BioChem Pharma Inc (the "Company") pursuant to the Merger          
Agreement, expected to be dated 10 December 2000, among the Company, Shire and  
Shire Exchangeco, a direct wholly owned subsidiary of Shire ("Exchangeco") (the 
"Merger Agreement"), which provides, among other things, for the merger of the  
Company with and into Shire Exchangeco (the "Transaction"), as a result of which
the Company will become an indirect wholly owned subsidiary of Shire.           

 The terms of the Transaction, including the circumstances determining the
number of Shire Ordinary Shares, Shire ADSs (where each Shire ADS is equivalent 
to three Shire Ordinary Shares) or Shire Exchangeco Shares (together            
"Consideration Shares") to be issued, together with the terms and conditions of 
the Transaction, are more fully set forth in the Merger Agreement. As a result  
of the Transaction, each share of the Common Stock of the Company ("Company     
Common Stock") not owned directly or indirectly by the Company or Shire will be 
converted into the right to receive such number of Consideration Shares as shall
be determined, subject to a collar, by reference to the average price of Shire  
ADSs during the 15 trading days ending on the third trading date prior to the   
Closing Date of the Transaction (the "Average Shire Price"). The collar provides
for a fixed value of consideration provided the Average Shire Price at the      
relevant time is between $47.20 and $70.80. In the event that the Average Shire 
Price is less than $47.20, each holder of Company Common Stock will receive     
2.3517 Consideration Shares for each share of Company Common Stock (save that   
such ratio will be divided by three where Shire ADSs are being issued as        
consideration). In the event that the Average Shire Price is greater than       
$70.80, each holder of Company Common Stock will receive 1.5678 Consideration   
Shares for each share of Company Common Stock (save that such ratio will be     
divided by three where Shire ADSs are being issued as consideration). The basis 
of exchange described above (including the collar), and more fully set out in   
the Merger Agreement, is referred to herein as the "Exchange Ratio".            

   This opinion assumes that the Transaction will be implemented in accordance
with the terms of the Merger Agreement.                                         

   You have requested Deutsche Bank's opinion, as financial advisor, as to the
fairness, from a financial point of view, to Shire of the Exchange Ratio.       

  In connection with Deutsche Bank's role as financial advisor to Shire, and
in arriving at its opinion, Deutsche Bank has reviewed certain publicly         
available financial and other information concerning the Company and Shire and  
their respective groups and certain internal analyses and other information     
furnished to it by or on behalf of the Company and Shire. Deutsche Bank has also
held discussions with members of the senior management of the Company and Shire 
regarding the businesses and prospects of their respective groups and the joint 
prospects of a combined group. In                                               

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addition, Deutsche Bank has attended certain discussions with Shire's external  
legal counsel and Company's internal and external counsel on specific items     
relating to ongoing patent litigation and related proceedings against the       
Company and/or members of its group and has reviewed and relied on such         
counsels' opinions with respect to these matters. In addition, Deutsche Bank has
(i) reviewed the reported prices and trading activity for the Company's Common  
Stock and Shire's ordinary shares, (ii) compared certain financial and stock    
market information for the Company and Shire with similar information for       
certain other companies whose securities are publicly traded, (iii) reviewed the
financial terms of certain recent business combinations which it deemed         
comparable in whole or in part, (iv) reviewed the terms of the draft Merger     
Agreement and certain related documents, and (v) performed such other studies   
and analyses and considered such other factors as it deemed appropriate.        

 Deutsche Bank has not assumed responsibility for independent verification
of, and has not independently verified, any information, whether publicly       
available or furnished to it, concerning the Company or Shire or their          
respective groups including, without limitation, any financial information,     
forecasts or projections considered in connection with the rendering of its     
opinion. Accordingly, for purposes of its opinion, Deutsche Bank has assumed and
relied upon the accuracy and completeness of all such information and Deutsche  
Bank has not conducted a physical inspection of any of the properties or assets,
and has not prepared or obtained any independent evaluation or appraisal of any 
of the assets or liabilities, of the Company or Shire or members of their       
groups. With respect to the financial forecasts and projections, including the  
analyses and forecasts of certain cost savings (including assumptions relating  
to future tax rates), operating efficiencies, revenue effects and financial     
synergies expected by Shire to be achieved as a result of the Transaction       
(collectively, the "Synergies"), made available to Deutsche Bank and used in its
analyses, Deutsche Bank has assumed that they have been reasonably prepared on  
bases reflecting the best currently available estimates and judgments of the    
management of the Company or Shire, as the case may be, as to the matters       
covered thereby. In rendering its opinion, Deutsche Bank expresses no view as to
the reasonableness of such forecasts and projections, including the Synergies,  
or the assumptions on which they are based. Deutsche Bank's opinion is          
necessarily based upon economic, market and other conditions as in effect on,   
and the information made available to it as of, the date hereof. Events         
occurring after the date hereof could materially affect this opinion and the    
assumptions used in preparing this opinion.                                     

   Further, Deutsche Bank does not provide legal, accounting, actuarial or tax
advice.                                                                         

 For purposes of rendering its opinion, Deutsche Bank has assumed that, in
all respects material to its analysis, the representations and warranties of    
Shire, Shire Exchangeco and the Company contained in the Merger Agreement are   
true and correct, Shire, Shire Exchangeco and the Company will each perform all 
of the covenants and agreements to be performed by each of them under the Merger
Agreement and all conditions to the obligations of each of Shire, Shire         
Exchangeco and the Company to consummate the Transaction will be satisfied      
without any waiver thereof. Deutsche Bank has also assumed that all material    
governmental, regulatory or other approvals and consents required in connection 
with the consummation of the Transaction will be obtained and that in connection
with obtaining any necessary governmental, regulatory or other approvals and    
consents, or any amendments, modifications or waivers to any agreements,        
instruments or orders to which either Shire or the Company is a party or is     
subject or by which it is bound, no limitations, restrictions or conditions will
be imposed or amendments, modifications or waivers made that would have a       
material adverse effect on Shire or the Company or materially reduce the        
contemplated benefits of the Transaction to Shire. In addition, you have        
informed Deutsche Bank, and accordingly for purposes of rendering its opinion   
Deutsche Bank has assumed, that the Transaction will be tax-free to each of     
Shire and the Company and their respective stockholders and that the Transaction
is intended to be accounted for as a pooling of interests.                      

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   This opinion is confidential. Neither the whole nor any part of it, nor any
reference to it, may be disclosed to any person or included in any document,    
circular or statement without Deutsche Bank's prior written consent. This       
opinion is addressed to, and for the use and benefit of, the Board of Directors 
of Shire and may be used and relied upon only by Shire in connection with and   
for the purposes of the Transaction. It is not a recommendation to the          
stockholders of Shire to approve the Transaction. This opinion is limited to the
fairness, from a financial point of view, to Shire of the Exchange Ratio, and   
Deutsche Bank expresses no opinion as to the merits of the underlying decision  
by Shire to engage in the Transaction.                                          

 Deutsche Bank will be paid a fee for its services as financial advisor to
Shire in connection with the Transaction, a portion of which is contingent upon 
consummation of the Transaction. We are an affiliate of Deutsche Bank AG        
(together with its affiliates, the "DB Group"). One or more members of the DB   
Group have, from time to time, provided investment banking, commercial banking  
(including extension of credit) and other financial services to Shire or its    
affiliates for which it has received compensation. In the ordinary course of    
business, members of the DB Group may actively trade in the securities and other
instruments and obligations of Shire and the Company for their own accounts and 
for the accounts of their customers. Accordingly, the DB Group may at any time  
hold a long or short position in such securities, instruments and obligations.  

  Based upon and subject to the foregoing, and based upon such other matters
as Deutsche Bank considers relevant, it is Deutsche Bank's opinion that, as of  
the date hereof, the Exchange Ratio is fair, from a financial point of view, to 
Shire.                                                                          

                     Yours faithfully,
                           DEUTSCHE BANK AG LONDON

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                                                              PRELIMINARY COPIES

[FORM OF PROXY] 

SHIRE PHARMACEUTICALS GROUP PLC 
("THE COMPANY") 
PROXY FORM FOR USE AT THE EXTRAORDINARY GENERAL MEETING TO BE HELD
ON   -  , 2001

I/We ____________________ of ____________________ being (a) holder(s) of
ordinary shares of 5p each in the capital of Shire Pharmaceuticals Group plc    
hereby appoint the Chairman of the Extraordinary General Meeting or(1)          

________________________________________as my/our proxy to vote for me/us and on
my/our behalf at the Extraordinary General Meeting of the Company to be held at 
3:00 p.m. on             , 2001 and at any adjournment thereof as indicated     
below.(2)                                                                       

                                                        [Enlarge/Download Table]
     TYPE OF                                                                            
NO.  RESOLUTION           RESOLUTION                               FOR  AGAINST  ABSTAIN
                                                                                        
(1)  Ordinary Resolution  To increase the authorised share                              
                          capital                                                       

                          To approve the acquisition of BioChem                         
                          Pharma Inc. ("BioChem") and the terms                         
                          of the Merger Agreement including the                         
                          conversion of options and other rights                        
                          held by BioChem option holders and                            
                          other right holders and to authorise                          
                          the directors of the Company to take                          
                          all necessary or appropriate steps to                         
                          complete the acquisition                                      

                          To authorise the directors of the                             
                          Company to allot ordinary shares up to                        
                          an aggregate nominal amount of                                
                          L[        ]                                                   

                          To create [new special voting shares]                         
(2)  Special Resolution   To authorise the directors of the                             
                          Company to allot equity securities up                         
                          to an aggregate nominal amount of                             
                          L[    ] as if the pre-emption rights                          
                          conferred by the Companies Act 1985 did                       
                          not apply                                                     

------------------------                                                        

(1) You are entitled to appoint one or more proxies of your choice who need not 
 be shareholders of the Company. If you wish to appoint someone other than
the Chairman of the Extraordinary General Meeting, please delete "the   
   Chairman of the Extraordinary General Meeting" and initial the deletion and
PRINT the name and address of the proxy in the space provided.          

(2) Completion and return of the form of proxy will not prevent you from        
  attending and voting at the meeting instead of your proxy, if you so wish.

Signature(s) ______________________________ Dated ________________________, 2001

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NOTES FOR COMPLETION OF PROXY FORM                                              

1.  Please indicate by placing a single "X" in the appropriate space how you    
    wish your votes to be cast in respect of each of the ordinary resolution and
 the special resolution referred to above. If this form is duly signed and
  returned, but without any specific direction as to how you wish your votes
   to be cast, your proxy may vote or abstain, at his discretion. On any other
    business (including a motion to adjourn the meeting or to amend the ordinary
and/or the special resolution) the proxy may vote at his discretion.    

2.  In the case of joint shareholders, the vote of the first named in the       
   register of members of the Company who tenders a vote, whether in person or
    by proxy, shall be accepted to the exclusion of the votes of the other joint
holders.                                                                

3.  This form must be executed by the shareholder(s) or his/their attorney duly 
authorised in writing. In the case of a shareholder which is a body     
  corporate, this form must be executed either under its common seal, by the
  signature of a director and its secretary or of two directors or under the
hand of an officer or attorney duly authorised in writing on its behalf.

4.  To be valid, this form must be completed, signed and deposited at, or       
returned by post to, the office of the Company's registrars, Lloyds TSB 
    Registrars, The Causeway, Worthing, West Sussex, BN99 3UH, England, not less
than 48 hours before the time appointed for the meeting.                

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CHAIRMAN'S LETTER 
SHIRE PHARMACEUTICALS GROUP PLC 
(REGISTERED IN ENGLAND AND WALES WITH REGISTERED NUMBER 2883758)

DIRECTORS: Dr J H Cavanaugh (Non-executive Chairman), R Stahel (Chief           
Executive), A C Russell (Finance Director), Dr J W Totten (R&D Director), Dr B J
Price (Senior Non-executive Director), Dr B Canavan (Non-executive), Dr Z P     
Horovitz (Non-executive), Mr R M Nordmann (Non-executive), Mr J E Smith         
(Non-executive), Mr J T Spitznagel (Non-executive)                              

REGISTERED OFFICE: East Anton, Andover, Hampshire, SP10 5RG, UK                 

-  , 2001                                                                   

TO THE HOLDERS OF ORDINARY SHARES AND ADSS AND, FOR INFORMATION ONLY, TO        
PARTICIPANTS IN THE EMPLOYEE SHARE SCHEMES                                      

Dear Shareholder,                                                               

PROPOSED MERGER WITH BIOCHEM PHARMA INC.

INTRODUCTION                                                                    

Your Board announced on 11 December 2000 that Shire had entered into a  
definitive merger agreement with BioChem Pharma Inc., a Canadian company, under 
which Shire and BioChem would merge.                                            

    Based upon the market price of Shire's Ordinary Shares on   -  , 2001 (being
the latest practicable date prior to the publication of this document) the      
Merger will create one of the leading specialty pharmaceutical companies in the 
world with a pro forma estimated market capitalisation at the Closing of L   -  
($  -  ).(1) The Enlarged Group will possess an enhanced pipeline in its        
selected therapeutic areas of CNS, oncology/haematology, anti-virals and        
vaccines, the additional financial resources necessary to capitalise on         
worldwide opportunities to expand its rapidly growing product ranges within     
those areas and the capacity to extend its geographical reach. Utilising Shire's
development expertise, the Enlarged Group will enhance the development of       
BioChem's pipeline products and candidates which will be retained for worldwide 
marketing by the Enlarged Group. In addition, following the Merger, the Enlarged
Group will be able to expand its areas of therapeutic interest to anti-virals   
and vaccines and to enhance its development portfolio in oncology.              

The Merger will be effected by way of a share-for-share exchange, with  
BioChem's shareholders receiving Shire Exchangeco Shares unless they elect to   
receive Ordinary Shares or ADSs; PROVIDED, THAT, BioChem Shareholders that are  
not Canadian residents will receive Ordinary Shares unless they elect to receive
ADSs. The exchange ratio will be determined by reference to the average closing 
price of ADSs during the last 15 trading days ending on the third day before the
closing of the Merger.                                                          

    The Shire Exchangeco Shares will be listed on the Toronto Stock Exchange and
will be exchangeable for New Ordinary Shares on a one-for-three basis and will  
be exchangeable for Shire ADSs on a one-for-one basis at the request of any     
holder of Shire Exchangeco Shares. The Shire Exchangeco Shares will confer      
similar rights and benefits to the existing Ordinary Shares; holders of Shire   
Exchangeco Shares will, in effect, have voting rights at general meetings of    
Shire by means of Special Voting Shares in Shire to be held by a trustee for the
benefit of the holders of the Shire Exchangeco Shares. The Shire Exchangeco     
Shares are being offered to allow existing Canadian BioChem shareholders to     
participate in the merger on a tax deferred basis.                              

------------------------                                                        

(1) All references to "$" and "dollars" contained in this letter are to US      
dollars, unless specified otherwise.                                    

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Based upon the closing price of ADSs on   -  , 2001 (being the latest   
practicable date prior to the publication of this document) the share-for-share 
exchange would value BioChem at approximately $  -  million (L   -  million),   
and would involve the issue of   -  New Ordinary Shares (assuming all existing  
BioChem Shareholders exchange their BioChem Shares for New Ordinary Shares      
pursuant to the Merger and excluding any shares to be issued pursuant to the    
exercise of options under the BioChem Stock Option Plans or other rights), with 
existing Shire Shareholders owning approximately   -  per cent of the Enlarged  
Group.                                                                          

Following the Merger, Dr Francesco Bellini, the Honourable James Andrews
Grant and Mr Gerard Veilleux will join your Board as non-executive directors.   

Further details on these Proposed Directors are included in this letter 
under the heading "Board Members" and in Part   -  of this document.            

Due to its size, the Merger is conditional on, INTER ALIA, Shire        
Shareholders' approval. The purpose of this document is to explain why your     
Board considers the Merger to be in the best interests of the Company and its   
Shareholders and to seek your approval for it at the forthcoming Extraordinary  
General Meeting. Those Directors of the Company holding Ordinary Shares and     
three of those limited partnerships controlled by HealthCare Ventures LLC (of   
which your Chairman is President), who in aggregate hold 9,087,385 Ordinary     
Shares (or the ADSs underlying those Ordinary Shares) representing approximately
 -  per cent of the issued share capital of the Company, have indicated to the
Company that they intend to vote in favour of the Merger in respect of their    
entire holdings.                                                                

RATIONALE FOR AND BENEFITS OF THE MERGER                                        

The Board believes that the Merger brings together two publicly-traded  
specialty pharmaceutical companies with complementary strengths, activities and 
competencies. Shire has built effective research and development functions, an  
effective sales and marketing organisation in the US and UK and has established 
and is expanding its functions in Canada and certain leading European markets.  
BioChem has built an outstanding scientific operation through which it has      
generated a pipeline of projects focused in three discrete specialty therapeutic
categories: oncology, vaccines and anti-virals. The principal benefits of the   
Merger are expected to be:                                                      

- DIVERSIFICATION. The revenue growth of the combined Shire and BioChem 
entity (the "Enlarged Group") will be driven not only by Shire's key
marketed products, Adderall, Pentasa, Agrylin and Carbatrol, and by 
     BioChem's Second Look and Fluviral, but also by the sales achieved by two
  of the world's foremost pharmaceutical companies in GlaxoSmithKline in
  respect of 3TC/ Epivir, Combivir, Trizivir and Zeffix, and Johnson and
  Johnson in respect of Reminyl. In addition, the Enlarged Group expects
Foznol to become a key contributor to revenue growth when regulatory
approvals, which are expected in early 2002, are obtained.          

- INCREASED FINANCIAL RESOURCES. At December 31, 2000, Shire had        
indebtedness of approximately $  -  and cash and investments of     
    approximately $  -  while BioChem had indebtedness of approximately $  -
    and approximately $  -  in cash and investments. With pro forma revenues
of $  -  and net income of $  -  for 2000 the Directors and Proposed
    Directors expect to have greatly enhanced cash with which to finance the
Enlarged Group's development and research activities. Shire will be 
 required to either obtain consent to the merger from its bank lenders
     under the credit facility entered into at the time of Shire's merger with
      Roberts Pharmaceutical Corporation in 1999 or repay the amount outstanding
   under the credit facility. Shire has not yet determined whether to seek
consent or repay the amount outstanding.                            

  FOR PURPOSES OF THIS LETTER, FINANCIAL INFORMATION ON BIOCHEM HAS BEEN
ADJUSTED TO CONSOLIDATE CLINICHEM AND EXCLUDE EXCEPTIONAL ITEMS.    

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- A BROADENED AND STRENGTHENED PIPELINE. The Enlarged Group will have 24
   products in development of which 12 will be in pre-clinical and Phase I
     development, and 12 will be in full clinical development or registration.
This will strengthen the product pipeline in the areas of           
      oncology/haematology and CNS with a total of 15 products in development in
   these areas and will broaden the pipeline of products in development by
 the inclusion of 5 products in the areas of anti-virals and vaccines.

    - LEVERAGE FROM COMPLEMENTARY SKILLS AND OPERATIONS. The Enlarged Group will
have a direct marketing capability in seven of the eight major      
     pharmaceutical markets in the world. The Enlarged Group will benefit from
the application of existing development capabilities to the enlarged
   product pipeline and the direct marketing of these products through its
    own specialist sales forces. The Directors and Proposed Directors expect
     the Enlarged Group's lead optimisation activities and network of business
and academic relations to provide a regular source of development   
candidates to supplement its development activities.                

    - OPERATING SYNERGIES. The Directors and Proposed Directors of Shire believe
that the Merger will result in certain operating synergies in the   
following areas:                                                    

      - Review of research and development activities: cost savings and future
       cost avoidance are expected to result from: establishment of a budget
         for the Enlarged Group; review of the Enlarged Group's requirements for
 new research and development projects; a thorough review of the
         Enlarged Group's research and development portfolio; and the use by the
Enlarged Group of Shire's development capabilities;           

- Financing: the Enlarged Group's net cash and ability to generate
       further cash will enable it to discharge its indebtedness to its bank
  lenders, if it chooses, which would result in a net reduction in
 financing costs of approximately $3 million in a full year; and

- Re-organisation of business activities: the re-organisation of  
        administrative, service and other functions of the Canadian operations
    of the Enlarged Group may give rise to operating synergies for the
Enlarged Group.                                               

   There will be a substantial one time charge in the [second] quarter of 2001
of between [  -  ] and [  -  ] in connection with consummating the Merger and   
Restructuring the Enlarged Group's combined operations. Taking into account the 
opportunity for synergies referred to above and excluding the one time charge,  
the Shire Board believes the Merger will be accretive to earnings for Shire     
shareholders twelve months after the Closing.                                   

INFORMATION ON BIOCHEM                                                          

    BioChem is an international pharmaceutical company dedicated to the research
and development of innovative products for the prevention and treatment of human
diseases, with a focus on infectious diseases and cancer.                       

KEY PRODUCTS AND MARKETS                                                

    BioChem's first therapeutic product, 3TC/Epivir (lamivudine), has become the
cornerstone of HIV infection/AIDS combination therapies, most recently being    
launched as part of GlaxoSmithKline's Trizivir triple combination tablet.       
3TC/Epivir is the most widely-prescribed antiretroviral for HIV infection/AIDS  
and is available in over 100 countries. Worldwide sales, including as a         
component of the double combination tablet Combivir, were $873 million in 1999. 
BioChem receives royalties from GlaxoSmithKline on the worldwide sales of       
3TC/Epivir for the treatment of HIV infection/AIDS. 3TC/ Epivir is protected by 
patent until 2009 in the US, with further protection expected in the US for the 
combination therapies and combination products, Combivir and Trizivir.          

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A second therapeutic product, Zeffix, an oral treatment for chronic     
hepatitis B, is currently being introduced to key markets worldwide by          
GlaxoSmithKline. Zeffix improves liver function and histology in the majority of
chronic hepatitis B patients and reduces progression to cirrhosis and reverse   
cirrhosis. Zeffix is now available in a number of countries including China,    
Japan, Taiwan, South Korea and the US. Worldwide sales of Zeffix were           
$73.1 million for the first nine months of 2000. BioChem receives royalties from
GlaxoSmithKline on its worldwide sales of Zeffix. BioChem's marketed products   
also include PACIS for the treatment of superficial bladder cancer, Fluviral S/F
for the prevention of influenza and Second Look for the diagnosis of breast     
cancer.                                                                         

PROJECT PIPELINE                                                        

 With approximately 450 employees and operating from three sites in Canada
and one in the US, BioChem has a number of projects at various stages of        
development including the anti-virals BCH-10618 and BCH-13520 for HIV           
infection/AIDS in the pre-clinical phase, the anti-cancer compound Troxatyl and 
Frakefamide for pain control in Phase II, nasal and injectable cell culture     
vaccines for influenza and a vaccine for NEISSERIA MENINGITIDIS, all of which   
are in Phase I and vaccines in pre-clinical for PSEUDOMONAS AERUGINOSA and      
STREPTOCOCCUS PNEUMONIAE.                                                       

CLINICHEM DEVELOPMENT INC.                                              

 In 1998, CliniChem Development Inc. was formed by BioChem to continue the
research and development of certain of BioChem's therapeutic and vaccine product
candidates with a view to eventual commercialisation. In exchange for BioChem   
granting CliniChem an exclusive perpetual licence to use BioChem technology to  
conduct the CliniChem programs and related activities, CliniChem agreed to pay  
BioChem a monthly technology fee at the rate of CN$352,000 over a period of     
48 months. CliniChem contracted its research and development activities to      
BioChem under a research and development agreement. BioChem recognised costs    
related to these programmes as research and development expenses and billed     
CliniChem on a fully burdened cost-plus-5% basis.                               

  BioChem acquired all of the outstanding CliniChem Class A common shares on
15 December 2000 and CliniChem was merged into BioChem.                         

BIOCHEM SUMMARY FINANCIAL INFORMATION                                   

    The following table, which has been extracted from the financial information
set out on pages   -  to   -  of this document summarizes the financial         
performance of BioChem reported in $ under US GAAP, consolidating CliniChem and 
excluding other exceptional items.                                              

                                                        [Enlarge/Download Table]

                                                          YEAR ENDED 31 DECEMBER          
                                                 -----------------------------------------
                                                   1997       1998       1999      [2000] 
                                                 --------   --------   --------   --------
                                                         (IN MILLIONS OF DOLLARS)         
                                                                                          
Royalties.......................................   89.7      103.8      116.1             
Other...........................................   17.4       23.1       19.6             
                                                  -----      -----      -----             
Total revenues..................................  107.1      126.9      135.7             
                                                  -----      -----      -----             
Operating income................................   50.2       58.9       39.4             
                                                  -----      -----      -----             
Net income from continuing operations...........   56.1       68.0       59.7             

   CliniChem contract revenue was $14.6 million and $50.0 million in the years
ended 31 December 1998 and 1999 respectively. Exceptional items in 1998 relate  
to the disposal of a long-term investment of $85.0 million.                     

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BOARD MEMBERS                                                                   

 Following the Merger, three members of the BioChem Board of Directors, Dr
Francesco Bellini, the Honourable James Andrews Grant and Mr Gerard Veilleux,   
will join your board, where their industrial experience and experience in the   
pharmaceutical industry in general and in Canada in particular will be a        
valuable addition.                                                              

DR FRANCESCO BELLINI was a co-founder of BioChem in 1986 and is the     
company's current Chairman and Chief Executive Officer. Dr Bellini received a   
B.Sc. in chemistry from Loyola College in Montreal in 1972, and a Ph.D. in      
organic chemistry from the University of New Brunswick in 1977.                 

  THE HONOURABLE JAMES ANDREWS GRANT, a Director of BioChem since 1986, is a
partner with the law firm of Stikeman Elliott in Montreal. Mr Grant, who also   
sits on the boards of several other prominent Canadian corporations, attended   
McGill University, receiving a B.A. in arts in 1958 and a B.C.L. in law in 1961.

MR GERARD VEILLEUX joined the BioChem board in 1999. He is president of 
Power Communications Inc. and Vice-President of Power Corporation, a diversified
management and holding company. Mr Veilleux is a director of several public and 
private companies as well as a member of the Board of Governors of McGill       
University. He has a Master's degree in public administration from Carleton     
University and a Bachelor of Commerce from Laval University.                    

INFORMATION ON SHIRE                                                            

Shire is a specialty pharmaceutical company focused primarily on four   
therapeutic areas: central nervous system disorders, oncology/haematology,      
metabolic/bone diseases, and gastroenterology.                                  

    Shire's strategy is to in-license, develop and market therapies in its areas
of strategic focus. This approach is complemented by the advanced drug delivery 
platforms developed by Shire Laboratories which may be used to enhance the      
bioavailability, reduce the side effects or improve the dosage regimen of       
existing marketed compounds. Shire seeks to protect the intellectual property   
upon which it relies through a range of patents and patent applications (both   
its own and that of its licensors).                                             

Products currently marketed in the US are Adderall and DextroStat for   
Attention Deficit Hyperactivity Disorder (ADHD), Carbatrol, launched in         
May 1998, for the treatment of epilepsy, Pentasa for ulcerative colitis, Agrylin
for thrombocythemia and ProAmatine for orthostatic hypotension. The key UK      
marketed products are the Calcichew range of prescription calcium and           
calcium/vitamin D products used as adjuncts in the treatment of osteoporosis and
Reminyl for the treatment of Alzheimer's disease.                               

 The Company's lead development products are Reminyl, for the treatment of
Alzheimer's disease; SLI 381, a novel once a day formulation of Adderall;       
Foznol, for the treatment of hyperphosphataemia in patients with chronic kidney 
failure; Dirame, an orally administered analgesic for treating moderate to      
severe pain; SPD421, an anti-epileptic in-licensed from D-Pharm; and SPD420, a  
potential treatment for ADHD in-licensed from Cortex. Reminyl is being          
co-developed by Shire and Janssen Pharmaceutica NV, a subsidiary of Johnson and 
Johnson. The first European authorisations for marketing of Reminyl were granted
in 2000 and various other applications have been made. The US New Drug          
Application (NDA) was submitted, by Janssen, on 29 September 1999 and an        
approvable letter was issued in August 2000 by the FDA. Foznol is currently in  
Phase III trials in Europe, in Phase III in the US and Phase I in Japan. An NDA 
for SLI 381, a patent protected derivative of Adderall, was filed on 3          
October 2000. Work has also started on the extension of Carbatrol's approved    
indications to include bi-polar disease (SPD 417). Shire also has a wide range  
of drug delivery technologies that may be applied to its own products or to     
those of third parties.                                                         

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During 2000, Shire has announced the following milestones:              

    - Reminyl received its EU authorisation in Sweden and was launched in the UK
on 21 September 2000.                                               

- Reminyl received its approvable letter from the FDA.                  

  - An application was submitted to the FDA for once a day Adderall SLI 381.

- The in-licensing of SPD421 from D-Pharm and of SPD420 from Cortex were
announced.                                                          

SHIRE AFTER THE MERGER                                                          

OVERVIEW                                                                

   Following the Merger, the Enlarged Group will be one of the world's leading
global specialty pharmaceutical companies with four areas of focus: central     
nervous system disorders, oncology/ haematology, anti-virals and vaccines. The  
Enlarged Group will refer to itself as "specialty" because its principal        
products tend to be prescribed by specialists as opposed to primary care        
physicians. Accordingly, a comparatively small sales force such as Shire's can  
promote specialty products effectively while it could not be expected to achieve
the necessary coverage of primary care physicians.                              

 The Enlarged Group's principal products will include: in the US, Adderall
for the treatment of Attention Deficit Hyperactivity Disorder; Agrylin for the  
treatment of elevated blood platelets; Pentasa for the treatment of ulcerative  
colitis; Carbatrol for the treatment of epilepsy; ProAmatine for the treatment  
of orthostatic hypotension; and PACIS for the treatment of superficial bladder  
cancer; in the UK, the Calcichew range, used primarily as adjuncts in the       
treatment of osteoporosis, and Reminyl for the treatment of Alzheimer's disease;
and, in Canada, ProAmatine, Epivir (marketed in a partnership with              
GlaxoSmithKline), Second Look, a product in the early stages of marketing       
outside of the US, where the Enlarged Group hopes to be authorised to market in 
2001, and Fluviral S/F, a vaccine for the prevention of influenza. In addition, 
the Enlarged Group will have a number of products in late stage development     
including Dirame and Frakefamide for the treatment of moderate to severe pain,  
Foznol for the treatment of high blood phosphate levels associated with kidney  
failure, Troxatyl for the treatment of leukemia and solid tumors, SPD421, an    
anti-epileptic in-licensed from D-Pharm [and SPD420, a potential treatment for  
ADHD in-licensed from Cortex.                                                   

   After the Merger, the Enlarged Group's revenues will continue to be derived
from three sources: sales of products by sales and marketing operations         
principally in the US, the UK and Canada, royalties from sales of Reminyl,      
Zeffix and 3TC/Epivir and licensing and development fees. For the period ended  
31 December 1999, Shire had revenues of $401.5 million and net income (before an
APB 25 stock option charge of $11.9 million and exceptional costs of            
$135.2 million) of $52.2 million. For the same period, BioChem had revenues of  
$135.7 million and net income from continuing operations of $59.7 million.      

STRATEGY AND APPROACH                                                   

 The Enlarged Group's strategy is to develop products and, where they fall
within the therapeutic focus, to market them through sales organisations in the 
major markets of the world. The key elements of the operating strategy are      
described below:                                                                

MARKET PROPRIETARY PRODUCTS THROUGH THE ENLARGED GROUP'S OWN SALES FORCE        

    The Enlarged Group believes that higher financial returns can be achieved by
marketing products directly, as opposed to receiving royalties on licensees'    
sales. The Merger enhances Shire's sales and marketing capability in Canada. The
Enlarged Group intends to continue to expand its sales and                      

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marketing capability, as opportunities arise, particularly in the US, major     
European markets, Japan and through distributors outside of the significant     
pharmaceutical markets.                                                         

MANAGE DEVELOPMENT RISK                                                         

   Recognising the inherent risks of failure in drug development, both BioChem
and Shire have historically sought to manage development risk by maintaining a  
broad and balanced development portfolio. Shire has also sought to selectively  
leverage relationships with collaborative parties. BioChem, through its academic
collaborations and investment in a leveraged network of research companies, has 
access to projects and technologies. The combined company is anticipated to     
continue reliance on the broad network of contacts to identify product          
candidates which can be developed either internally or through collaborative    
partnerships.                                                                   

FOCUS ON THE DEVELOPMENT OF INNOVATIVE PRODUCTS                                 

BioChem's lead optimisation and chemistry expertise has led to the      
development and commercialisation of innovative products. Shire has also sought 
to identify promising product candidates already under development or exploit a 
number of proprietary drug delivery technologies to develop products. In        
addition to developing proprietary pipeline products, the Enlarged Group's      
principal objective will be to concentrate operations on licensing, acquiring,  
developing, marketing and selling proven products and technologies. Both        
companies have historically benefited from proven products that generate cash   
flow, which contributes partial financial support to drug development           
activities, and provides enhanced product sales opportunities for the sales     
force.                                                                          

SALES AND MARKETING                                                     

 Following the Merger, the Enlarged Group will use its sales and marketing
infrastructure to sell and market most of its licensed and internally developed 
products. The combined sales and marketing operations of the Enlarged Group in  
the US, the UK, Canada and Europe will consist of   -  ,   -  ,   -  and   -    
sales representatives, respectively. Following the Merger, this expanded sales  
force will have a broader portfolio of products with opportunities to benefit   
from increased geographical coverage.                                           

COMBINED MARKETED PRODUCTS                                              

The table below lists the key currently marketed products of Shire and  
BioChem by therapeutic areas, indicating the owner or licensor of the product   
and who is marketing the product in which territory.                            

                                                        [Enlarge/Download Table]

                                                                                MARKETED BY/      
       PRODUCTS          PRINCIPAL INDICATION(S)      OWNER/LICENSOR         RELEVANT TERRITORY   
-----------------------  -----------------------  -----------------------  -----------------------
                                                                                                  
TREATMENTS FOR CNS DISORDERS                                                                      

Adderall                 ADHD                     Shire                    Shire/US               
DextroStat               ADHD                     Shire                    Shire/US               
Carbatrol                Epilepsy                 Shire                    Shire/US               
Reminyl                  Alzheimer's disease      Shire                    Shire/UK (Co-          
                                                                           promotion)             

TREATMENTS FOR METABOLIC/BONE DISEASES                                                            

Calcichew range          Osteoporosis adjunct     Nycomed                  Shire/UK and Ireland   

TREATMENTS FOR ONCOLOGY/HAEMATOLOGY                                                               

Agrylin                  Elevated blood           Shire                    Shire/US and Canada    
                         platelets                                                                
ProAmatine               Orthostatic hypotension  Nycomed                  Shire/US and Canada    

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                                                                                MARKETED BY/      
       PRODUCTS          PRINCIPAL INDICATION(S)      OWNER/LICENSOR         RELEVANT TERRITORY   
-----------------------  -----------------------  -----------------------  -----------------------
                                                                                                  
PACIS                    Bladder cancer           BioChem                  Urocor/US and Paladin  
                                                                           Labs/Canada            

ANTI-VIRALS                                                                                       

3TC/Epivir/Combivir/     HIV/AIDS                 BioChem                  GlaxoSmithKline/       
Trizivir                                                                   Worldwide, except      
                                                                           Canada                 
3TC/Combivir             HIV/AIDS                 BioChem                  BioChem and Glaxo-     
                                                                           SmithKline co-marketed 
                                                                           in Canada              
Zeffix/Epivir-HBV/       Hepatitis B              BioChem                  GlaxoSmithKline/       
Heptovir/ Heptodin                                                         Worldwide, except      
                                                                           Canada                 
Heptovir                 Hepatitis B              BioChem                  BioChem and Glaxo-     
                                                                           SmithKline co-marketed 
                                                                           in Canada              

VACCINES                                                                                          

Fluviral S/F             Influenza                BioChem                  BioChem/Canada         

TREATMENTS FOR GASTROINTESTINAL DISORDERS                                                         

Pentasa                  Ulcerative colitis       Ferring                  Shire/US               
Colazide                 Ulcerative colitis       Shire                    Shire/UK, EU and       
                                                                           Southeast Asia         
Colace/Peri-Colace       Constipation             Shire                    Shire/US and Canada    

COMPUTER ASSISTED DETECTION PRODUCTS                                                              

Second Look              Breast cancer diagnosis  Qualia Computing         BioChem/Worldwide,     
                                                                           except US              

PRODUCTS UNDER DEVELOPMENT                                              

After the Merger, the Enlarged Group will seek to maintain a broad and  
balanced approach to the development of new products by, among other things,    
leveraging third-party research and development expertise, exploiting investment
in research collaborations and licensing compounds from third parties and       
developing them through the clinical phase with a view to marketing them through
the Enlarged Group's sales and marketing organisation or out-licensing if       
appropriate. On a combined basis, Shire and BioChem spent approximately         
$138 million on research and development in the year ended 31 December 1999,    
which represents 27% of combined revenues.                                      

The table below lists the key products under development by Shire and   
BioChem by therapeutic area, including their development status and their       
territorial rights. Where either company has secured a licensee for a product,  
this fact is also indicated.                                                    

                                                        [Enlarge/Download Table]

      PRODUCT(S)         PRINCIPAL INDICATION(S)          STATUS             TERRITORIAL RIGHTS   
-----------------------  -----------------------  -----------------------  -----------------------
                                                                                                  
TREATMENTS FOR CNS DISORDERS                                                                      

Reminyl                  Alzheimer's disease      In registration or       Global                 
(galantamine)(1)                                  marketed                                        
SLI381                   ADHD                     In registration          Global                 
Dirame                   Moderate/severe pain     Phase III                Global                 
Frakefamide(2)           Moderate/severe pain     Phase II                 Global                 
SPD417                   Bi-polar disorder        Phase III                Global                 

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      PRODUCT(S)         PRINCIPAL INDICATION(S)          STATUS             TERRITORIAL RIGHTS   
-----------------------  -----------------------  -----------------------  -----------------------
                                                                                                  
SPD503                   ADHD                     Phase I                  Global                 
SPD418                   Epilepsy                 Phase I                  Global                 
SPD502                   Stroke                   Phase I                  Global excl. Nordic and
                                                                           Baltic countries       
SPD451                   Parkinsons Disease       Pre-clinical             Global                 

TREATMENTS FOR METABOLIC DISEASES                                                                 

Foznol                   High blood phosphate     Phase III                Global                 
                         levels in patients with                                                  
                         kidney failure                                                           

TREATMENTS FOR GASTROENTEROLOGICAL DISORDERS                                                      

Pentasa (500 mg)         Ulcerative colitis       Phase II/III             US                     
Emitasol                 Nausea and vomiting      Phase II/III             US, Canada             
Balsalazide              Ulcerative colitis       Phase II/III             [Europe], Southeast    
                                                                           Asia                   

TREATMENTS FOR ONCOLOGICAL/HAEMATOLOGICAL                                                         
DISEASES                                                                                          

Agrylin                  Thrombocythemia          In registration          Global                 
Troxatyl                 Leukemia and solid       Phase II                 Global                 
                         tumors                                                                   
SPD424                   Prostate cancer          Phase III                North America, Europe  

ANTI-VIRALS                                                                                       

BCH-10618                HIV/AIDS                 Pre-clinical             Global                 
BCH-13520                HIV/AIDS                 Pre-clinical             Global                 

VACCINES                                                                                          

Injectable and nasal     Influenza                Phase I/II               North America          
influenza vaccine                                                                                 
derived from cell                                                                                 
culture                                                                                           
NEISSERIA MENINGITIDIS   Meningitis, septicemia   Phase I                  Global                 
vaccine                                                                                           
PSEUDOMONAS AERUGINOSA   Bacteremia,              Pre-clinical             Global                 
vaccine                  opportunistic                                                            

--------------------------                                                      

(1) The licensee is Janssen.                                                    

(2) The licensee is AstraZeneca (except Canada).                                

DRUG DELIVERY TECHNOLOGIES                                              

    The Enlarged Group will have several platforms of drug delivery technologies
that can be applied to drugs in order to enhance their effectiveness or their   
convenience to patients in terms of dosage regimen. Generally, this involves    
re-formulating the drug into a new delivery system designed either to enhance   
the absorption of the drug into the blood stream or, alternatively, to delay    
absorption of the drug into the bloodstream, thereby requiring the patient to   
take fewer daily doses.                                                         

 The Enlarged Group's portfolio of drug delivery technologies will include
technologies designed to develop oral, controlled release delivery of drugs, a  
technology for rapid absorption through the tissues of the mouth and several    
technologies for predicting and improving bioavailability of drugs. It is       
intended to out-license these technologies to third parties in return for       
development fees, milestone payments and royalties. It is also intended to      
employ these technologies selectively to products being developed internally    
where it is believed the characteristics of the product can be improved or      
modified to secure a competitive advantage.                                     

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PHENTERMINE LITIGATION                                                          

Until April 1998, Shire Richwood Inc. ("SRI") distributed products      
containing phentermine, a prescription drug approved in the US as a single agent
for short term use in obesity. Contrary to the approved labelling of these      
products, physicians in the US co-prescribed phentermine with fenfluramine or   
dexfenfluramine for management of obesity. This combination was popularly known 
as the "fen-phen" diet. In mid-1997, following concerns raised about cardiac    
valvular side effects alleged to be associated with this diet regime, the       
fenfluramine and dexfenfluramine elements of the "fen-phen" diet were withdrawn 
from the US market. SRI and a number of other pharmaceutical companies are being
sued for damages for personal injury and medical monitoring arising from        
phentermine used either alone or in combination.                                

   As of 31 December 2000 Shire had been named as a defendant in approximately
3,729 cases related to the "fen-phen" litigation. Shire has been dismissed from 
2,178 cases with approximately 1,120 further dismissals pending on the basis    
that the plaintiff was shown not to have used Shire's product. In approximately 
136 cases, of which 45 have been subsequently dismissed, it has been            
specifically alleged that the relevant plaintiff did use Shire's products.      

Pursuant to an indemnity from Shire's former contract manufacturer of   
phentermine, Eon Labs Manufacturing, Inc. (Eon), legal costs in respect of the  
phentermine litigation have to date been met by Eon or its insurance carriers.  
Shire also has access to its own products liability policy for certain defense  
costs and claims up to a maximum of $  -  million. In addition, Shire has       
obtained additional insurance for claims of third parties up to an aggregate of 
$  -  million (less a self-insured retention of $  -  million).                 

  The Directors are confident that these claims will not result in any award
of damages against Shire. Nevertheless, Shire intends to defend vigorously any  
and all claims made against the Enlarged Group in respect of phentermine and    
will continue to seek case dismissals based upon product identification.        

CURRENT TRADING AND PROSPECTS                                                   

  On   -  February 2001, Shire released its audited preliminary statement of
results for the year ended 31 December 2000, the text of which is set out in    
Part   -  of this document. On   -  January 2001, BioChem announced its         
[audited] results for the year ended 31 December 2000, the full text of which is
set out in Part   -  of this document.                                          

In the Board's opinion, the current outlook for the Enlarged Group's key
drivers of revenue growth remains favourable. Adderall's market share [  ], 3TC 
royalties [  ] and following the launch of Zeffix in Japan [  ].                

    Taking into account the opportunity for synergies and excluding the one time
charge, the Board believes the Merger will be accretive to earnings twelve      
months after the Closing.                                                       

The Shire audited preliminary statement of results for the year ended   
31 December 2000 released on   -  February 2001 included the following statement
on current trading:                                                             

[         ]                                                       

EXTRAORDINARY GENERAL MEETING                                                   

Set out at the end of this document is a Notice of Extraordinary General
Meeting of the Company to be held at 35 New Broad Street, London, EC2M 1SQ,     
England, on   -  , 2001 at 3:00 p.m., local time. At this meeting, an ordinary  
resolution will be proposed to approve the Merger, to increase the authorised   
share capital of the Company, to grant authority to the Directors to allot such 
capital and to create new special voting shares and to attach certain rights and
restrictions to those shares. In                                                

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addition, a special resolution will be proposed to enable the Directors to allot
a larger number of equity securities than before as if the pre-emption rights   
conferred by the Companies Act 1985 did not apply.                              

ACTION TO BE TAKEN                                                              

   You will find enclosed a form of proxy for use at the Extraordinary General
Meeting. Whether or not you propose to attend the Extraordinary General Meeting 
in person, you are requested to complete the form of proxy in accordance with   
the instructions thereon and return it as soon as possible but, in any event, so
as to reach the Company's registrars, Lloyds TSB Registrars, The Causeway,      
Worthing, West Sussex, BN99 3UH, England, not later than [  -  p.m.] on         
-  , 2001. The return of a completed form of proxy will not prevent you from
attending the Extraordinary General Meeting and voting in person if you so wish.

RECOMMENDATION                                                                  

    The Board, which has received financial advice from Deutsche Bank, considers
that the Merger is in the best interests of Shire and its shareholders as a     
whole. In providing advice to the Board, Deutsche Bank has placed reliance on   
the Board's commercial assessment of the Merger.                                

    The Directors unanimously recommend you to vote in favour of the Resolutions
to be proposed at the Extraordinary General Meeting, as they intend to do in    
respect of shareholdings in which they are interested, which amount in aggregate
to   -  Ordinary Shares, representing approximately   -  per cent of the issued 
share capital.                                                                  

                    Yours sincerely,
                          Dr. James H. Cavanaugh
            Chairman

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NOTICE OF EXTRAORDINARY GENERAL MEETING 

NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting of Shire   
Pharmaceuticals Group plc (the "Company") will be held at 35 New Broad Street,  
London, EC2M 15Q, England, on   -  , 2001 at 3:00 p.m., local time, for the     
purposes of considering and, if thought fit, passing the following resolutions, 
of which the resolution numbered 1 will be proposed as an ordinary resolution   
and the resolution numbered 2 as a special resolution:                          

1. ORDINARY RESOLUTION

THAT:                                                                           

(a) the authorised share capital of the Company be increased from L20,000,000 to
L  -  by the creation of   -  new ordinary shares of 5p each forming a  
   single class with the existing ordinary shares of 5p each in the capital of
the Company;                                                            

(b) the proposed acquisition by the Company of BioChem Pharma Inc. ("BioChem"), 
on the terms and subject to the conditions of the Merger Agreement (as  
defined in the Company's circular to shareholders dated   -  2001 (the  
  "Circular"), a copy of which, initialed by the Chairman of the meeting for
    the purposes of identification, has been produced to the meeting), including
the conversion of options and rights held by BioChem option holders and 
 right holders, respectively, over BioChem shares into options and rights,
    respectively, over ordinary shares of the Company, be and is hereby approved
 and the directors of the Company be and are hereby authorised to take all
   necessary or appropriate steps to complete the same and give effect thereto
with such modifications not, in the opinion of the directors, materially
adverse to the Company as they shall think fit;                         

(c) in addition and without prejudice to all existing authorities, the directors
   of the Company be generally and unconditionally authorised for the purposes
 of section 80 of the Companies Act 1985 to exercise all the powers of the
  Company to issue and allot relevant securities (within the meaning of that
 section) up to an aggregate nominal amount of L  -  for a period expiring
(unless previously renewed, varied or revoked by the Company in general 
 meeting) 15 months after the date of the passing of this resolution or at
 the conclusion of the Annual General Meeting of the Company following the
 passing of this resolution, whichever is later, save that the Company may
  before such expiry make an offer or agreement which would or might require
 relevant securities to be allotted after such expiry and the directors of
  the Company may allot relevant securities in pursuance of such an offer or
agreement as if the authority conferred hereby had not expired;         

(d) the relevant number of existing authorised but unissued ordinary shares of  
   5p each in the capital of the Company be and are hereby divided into shares
  (of an aggregate nominal amount equal to the sum of the nominal amounts of
all the ordinary shares thus divided) (such shares being designated the 
    "Special Voting Shares"). For the purposes of this resolution, the "relevant
number" of such ordinary shares shall be the smallest number of such    
 ordinary shares necessary to be subdivided to give rise to such number of
Special Voting Shares as will be equal to the number of issued and      
    outstanding Shire Exchangeco Shares (as defined in the Circular) immediately
after the Closing (as defined in the Circular); and                     

(e) the rights and restrictions attaching to the Special Voting Shares shall be 
as set out below:                                                       

(A) INCOME                                                              

  the holder of the Special Voting Shares shall not be entitled to any
dividends or distributions in respect of such share;              

(B) CAPITAL                                                             

      the holder of the Special Voting Shares shall be entitled to receive out
    of any winding up of the Company an amount equal only to the aggregate
nominal amount of such shares and only                            

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       after holders of ordinary shares of 5p each in the capital of the Company
     have received an amount equal to the nominal amount of such shares held
by them;                                                          

(C) TRANSFER                                                            

    the directors of the Company shall decline to register any transfer of
  any of the Special Voting Shares unless the transfer is to a company
     which replaces the Trustee (as defined in the Circular) pursuant to the
 terms of the Voting and Exchange Trust Agreement (as defined in the
Circular);                                                        

(D) VOTING RIGHTS                                                       

      (i) the holder of the Special Voting Shares shall be entitled to
    receive notice of and to attend and vote at any general meeting of the
Company as follows:                                               

             (a) on a show of hands, the holder of the Special Voting Shares
         shall have one vote in addition to the votes which may be cast by a
         holder of Shire Exchangeco Shares (other than the Company or any of
           its subsidiaries, subsidiary undertakings or associated undertakings)
           (a "Beneficiary") (or its nominee) on such show of hands as proxy for
the holder of the Special Voting Shares; and              

              (b) on a poll the holder of the Special Voting Shares shall have
   three votes for every Shire Exchangeco Share then outstanding
          (A) that is owned by Beneficiaries and (B) as to which the holder of
           the Special Voting Shares has received valid voting instructions from
        the holders of the Shire Exchangeco Shares for the purposes of the
Voting and Exchange Trust Agreement;                      

     (ii) the holder of the Special Voting Shares shall on a poll be
      entitled to cast the votes attaching to such share on any resolution for
       or against such resolution (such that some of such votes may be cast for,
       some of such votes may be cast against, and some of such votes may not be
      cast at all on, such resolution) in such proportions as it may determine
based on voting instruction;                                      

      (iii) if so instructed by a Beneficiary, the holder of the Special
  Voting Shares shall be entitled to appoint that Beneficiary, or such
   other person as that Beneficiary nominates, as proxy to attend and to
     exercise personally in place of the holder of the Special Voting Shares
      that number of votes equal to three times the number of Shire Exchangeco
    Shares held by the Beneficiary (the "Beneficiary Votes"). A proxy need
       not be a member of the Company. A Beneficiary (or its nominee) exercising
   its Beneficiary Votes shall have the same rights as the holder of the
       Special Voting Shares to speak at the meeting in favour of any matter and
to vote on a show of hands or on a poll in respect of any matter  
proposed;                                                         

       (iv) the holder of the Special Voting Shares shall be entitled to
demand a poll at any general meeting of the Company; and          

       (v) a proxy received from the holder of the Special Voting Shares
      will be valid for the purposes of any poll at any general meeting of the
  Company if it is received before the closing of the poll to which it
relates; and                                                      

(E) CLASS RIGHTS                                                        

    any amendment to, or removal of, or alteration of the effect of (which
      for the avoidance of doubt shall be taken to include the ratification of
       any breach of) all or any of [articles   -  and   -  ] of the articles of
   association of the Company as in force at the date of this resolution
   shall be deemed to be a variation of the rights of the Special Voting
Shares and shall accordingly only be effective with the consent in
 writing of the holder of the Special Voting Shares and without such
   consent shall not be done, or caused or permitted to be done, and the
     holder of the Special Voting Shares shall withhold such consent save as
directed by the directors of the Company.                         

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2. SPECIAL RESOLUTION 

THAT:                                                                           

in substitution for all existing authorities save for, and without prejudice to,
resolution 17 passed at the annual general meeting of the Company held on       
7 July 2000 at 11:00 a.m., the directors of the Company be and they are hereby  
empowered pursuant to section 95 of the Companies Act 1985 to allot equity      
securities (within the meaning of section 94(2) of the Companies Act 1985) of   
the Company pursuant to the authority conferred by the passing of the resolution
passed on   -  , 2000 as if section 89(1) of the Companies Act 1985 did not     
apply to such allotment provided that this power:                               

(i) shall expire 5 years after the date of the passing of this  
    resolution, save that the Company may make an offer or agreement which would
   or might require equity securities to be allotted after such expiry and the
 directors of the Company may allot equity securities pursuant to any such
offer or agreement as if the power conferred hereby had not expired; and

(ii) shall be limited to:                                       

        (a) allotment of equity securities where such securities have been
offered (whether by way of a rights issue, open offer or other    
       pre-emptive offer) to holders of ordinary shares in proportion (as nearly
     as may be) to their existing holdings of ordinary shares but subject to
    the directors of the Company having a right to make such exclusions or
  other arrangements in connection with such offering as they may deem
necessary or expedient:                                           

        (1) to deal with equity securities representing fractional
entitlements;                                             

        (2) to deal with ordinary shares represented by depository
receipts;                                                 

             (3) to deal with legal or practical problems under the laws of,
                  or the requirements of any recognised regulatory body or any
stock exchange in, any territory; and     

          (b) allotments of equity securities for cash otherwise than pursuant
 to paragraph (a) up to an aggregate nominal amount of approximately
L  -  .                                                           

                                                                [Download Table]
                                                                    
Dated: - 2001                                                       
REGISTERED OFFICE                              BY ORDER OF THE BOARD
East Anton                                     NC Harris            
Andover                                        Secretary            
Hampshire                                                           
SP10 5RG                                                            
United Kingdom                                                      

NOTES:                                                                          

(1) A member of the Company entitled to attend and vote at the above            
    Extraordinary General Meeting may appoint one or more proxies to attend and,
  on a poll, to vote instead of him/her. A proxy need not be a member of the
Company.                                                                

(2) Shareholders should note that in order to have the right to attend and vote 
  at the Extraordinary General Meeting, their holding must be entered in the
Company's share register by no later than 3:00 p.m. on   -  2001.       

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THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in 
any doubt about what action you should take, you are recommended to seek advice 
from your stockbroker, bank manager, solicitor, accountant or other independent 
financial adviser authorised under the Financial Services Act 1986.             

If you have sold or otherwise transferred all of your Ordinary Shares in Shire  
Pharmaceuticals Group plc, please send this document and the accompanying Form  
of Proxy at once to the purchaser or transferee or to the bank, stockbroker or  
other agent through whom the sale or transfer was effected, for delivery to the 
purchaser or transferee. However, such documents should not be distributed,     
forwarded to or transmitted in or into Australia or Japan.                      

A copy of this document, which comprises a circular and listing particulars     
relating to Shire Pharmaceuticals Group plc prepared in accordance with the     
listing rules made under section 142 of the Financial Services Act 1986, has    
been delivered to the Registrar of Companies in England and Wales for           
registration in accordance with section 149 of that Act.                        

This document should be read as a whole. Your attention is drawn to the letter  
from the Chairman of Shire which is set out on pages o to o and which recommends
you to vote in favour of the Resolutions to be proposed at the Extraordinary    
General Meeting referred to below.                                              

Application has been made to the UK Listing Authority for the New Ordinary      
Shares being issued in connection with the proposed Merger described herein to  
be admitted to the Official List and to the London Stock Exchange for such New  
Ordinary Shares to be admitted to trading on the London Stock Exchange.         
Application was made on o, 2001 to register the Shire Exchangeco Shares with the
Toronto Stock Exchange. The New Ordinary Shares will, when issued, rank pari    
passu in all respects with the existing Ordinary Shares. Their issue is subject,
inter alia, to the passing of the ordinary resolution to be proposed at the     
Extraordinary General Meeting. It is expected that Admission will become        
effective and dealings in the New Ordinary Shares will commence at 8.00 a.m. on 
2001.                                                                           

--------------------------------------------------------------------------------

 Shire Pharmaceuticals Group plc

(Registered in England and Wales with registered number 2883758)

Circular and Listing Particulars

relating to the issue of up to
o new ordinary shares of 5 pence each in Shire Pharmaceuticals Group plc
in connection with the proposed Merger between
 Shire Pharmaceuticals Group plc and BioChem Pharma Inc.

--------------------------------------------------------------------------------

Deutsche Bank, which is regulated in the United Kingdom by The Securities and   
Futures Authority Limited, is acting exclusively for Shire Pharmaceuticals Group
plc in relation to the proposed Merger with BioChem Pharma Inc. and no-one else 
in connection with this transaction and will not be responsible to anyone other 
than Shire Pharmaceuticals Group plc for providing the protections afforded to  
customers of Deutsche Bank or for providing advice in relation to this          
transaction.                                                                    

Notice of an Extraordinary General Meeting of Shire Pharmaceuticals Group plc to
be held at o, London at [3.00 p.m.] on 2001 is set out at the end of this       
document. Forms of proxy for use in connection with the meeting, to be valid,   
should be completed and returned so as to reach the Company's Registrars, Lloyds
TSB Registrars, The Causeway, Worthing, West Sussex, BN99 3UH, United Kingdom no
later than [3.00 p.m.] on o, 2001.                                              

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                                                                [Download Table]

                                 CONTENTS                         

                                                            Page  

                                                                  
Part I     Letter from the Chairman of Shire                   o  

Part II    Description of BioChem                              o  

Part III   Financial information on BioChem                    o  

Part IV    Reconciliations of BioChem figures to US and           
           UK GAAP as applied by Shire                         o  

Part V     Financial information on Shire                      o  

Part VI    Pro forma statement of combined net assets          o  

Part VII   Details of the Merger and Special Voting Shares     o  

Part VIII  Statutory and general information                   o  

           Definitions                                         o  

           Glossary                                            o  

           Notice of Extraordinary General Meeting             o  

EXPECTED TIMETABLE OF PRINCIPAL EVENTS IN THE UNITED KINGDOM

Latest time and date for receipt of Forms of Proxy    [3.00 p.m.] on [D-4], 2001

Extraordinary General Meeting                         [3.00 p.m.] on [D-2], 2001

Admission and dealings in New Ordinary Shares                                   
commence on the London Stock Exchange                     8.00 a.m. on [D], 2001

New Ordinary Shares credited to CREST accounts                                  
and despatch by post of definitive share certificates                           
(where applicable)                                                       o, 2001

EXPECTED TIMETABLE OF PRINCIPAL EVENTS IN CANADA

BioChem Shareholders' meeting held to                                           
approve the Merger                         9.00 a.m. (Montreal time) [D-2], 2001

Superior Court of Quebec hearing of                                             
final order for approval of the Arrangement                          [D-2], 2001

Filing of Articles of Amendments under the                                      
Canada Business Corporations Act                                     [D-1], 2001

Effective date of the Arrangement under the                                     
Canada Business Corporations Act                                     [D-1], 2001

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 ADVISERS TO SHIRE PHARMACEUTICALS GROUP plc

Sponsor and Financial Adviser                 Deutsche Bank AG, London          
                            Winchester House
                                     1 Great Winchester Street
                            London  EC2N 2DB

Supporting Financial Adviser                  Bear, Stearns & Co. Inc           
                           245 Park Avenue
                    New York
                           New York  10167

Joint Brokers                                 Merrill Lynch International       
                                20 Farringdon Street
                            London  EC1M 3NH

                                   West LB Panmure Limited
                            New Broad Street
                            London  EC2M 1SQ

Legal Advisers (UK)                           Slaughter and May                 
                                35 Basinghall Street
                            London  EC2V 5DB

Legal Advisers (US)                           Cahill Gordon & Reindel           
                          80 Pine Street
                    New York
                           New York  10005

Legal Advisers (Canada)                       McCarthy Tetrault                 
                            1170 Peel Street
                    Montreal
                  Quebec
                           Canada  H3B 4S8

Auditors and Reporting Accountants            Arthur Andersen                   
                        Abbots House
                        Abbey Street
                            Reading  RG1 3BD

Registrars                                    Lloyds TSB Registrars             
                        The Causeway
                    Worthing
                       West Sussex
                    BN99 3UH

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PART I - LETTER FROM THE CHAIRMAN OF SHIRE

 Shire Pharmaceuticals Group plc
(Registered in England and Wales with Registered Number 2883758)

Directors: Dr J H Cavanaugh (Non-executive Chairman),       Registered Office:  
  R Stahel (Chief Executive),                      East Anton,
          A C Russell (Finance Director),                  Andover, Hampshire,
Dr J W Totten (R&D Director),                    SP10 5RG,
     Dr B J Price (Senior Non-executive Director),    United Kingdom
Dr B Canavan (Non-executive),                             
Dr Z P Horovitz (Non-executive),                          
Mr R M Nordmann (Non-executive),                          
Mr J E Smith (Non-executive),                             
Mr J T Spitznagel (Non-executive)                         

o , 2001                                                                        

To the holders of Ordinary Shares and ADSs and, for information only, to        
participants in the Employee Share Schemes                                      

Dear Shareholder,                                                               

Proposed Merger with BioChem Pharma Inc.

Introduction                                                                    

Your Board announced on 11 December 2000 that Shire had entered into a          
definitive merger agreement with BioChem Pharma Inc., a Canadian company, under 
which Shire and BioChem would merge.                                            

Based upon the market price of Shire's Ordinary Shares on o 2001 (being the     
latest practicable date prior to the publication of this document) the Merger   
will create one of the leading specialty pharmaceutical companies in the world  
with a pro forma estimated market capitalisation at the Closing of (pound) o    
($o). The Enlarged Group will possess an enhanced pipeline in its selected      
therapeutic areas of CNS, oncology/haematology, anti-virals and vaccines, the   
additional financial resources necessary to capitalise on worldwide             
opportunities to expand its rapidly growing product ranges within those areas   
and the capacity to extend its geographical reach. Utilising Shire's development
expertise, the Enlarged Group will enhance the development of BioChem's pipeline
products and candidates which will be retained for worldwide marketing by the   
Enlarged Group. In addition, following the Merger, the Enlarged Group will be   
able to expand its areas of therapeutic interest to anti-virals and vaccines and
enhance its development portfolio in oncology.                                  

The Merger will be effected by way of a share-for-share exchange, with BioChem's
shareholders receiving Shire Exchangeco Shares unless they elect to receive     
Ordinary Shares or ADSs, provided, that, BioChem Shareholders that are not      
Canadian residents will receive Ordinary Shares unless they elect to receive    
ADSs. The exchange ratio will be determined by reference to the average closing 
price of ADSs during the last 15 trading days ending on the third day before the
Closing of the Merger.                                                          

The Shire Exchangeco Shares will be listed on the Toronto Stock Exchange and    
will be exchangeable for New Ordinary Shares on a one-for-three basis and will  
be exchangeable for Shire ADSs on a one-for-one basis at the request of any     
holder of Shire Exchangeco Shares (as set out in more detail in Part VII of this
document). The Shire Exchangeco Shares will confer similar rights and benefits  
to the existing Ordinary Shares; holders of Shire Exchangeco Shares will, in    
effect, have voting rights at general meetings of Shire by means of Special     
Voting Shares in Shire to be held by a trustee for the benefit of the holders of
the Shire Exchangeco Shares. The Shire Exchangeco Shares are being offered to   
allow existing Canadian BioChem shareholders to participate in the Merger on a  
tax deferred basis.                                                             

Based upon the closing price of ADSs on 2001 (being the latest practicable date 
prior to the publication of this document) the share-for-share exchange would   
value BioChem at approximately $ o million ((pound) o million), and would       
involve the issue of o New Ordinary Shares (assuming all existing BioChem       
Shareholders exchange their                                                     

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BioChem Shares for New Ordinary Shares pursuant to the Merger and excluding any 
shares to be issued pursuant to the exercise of options under the BioChem Stock 
Option Plans or other rights), with existing Shire Shareholders owning          
approximately o per cent of the Enlarged Group.                                 

Following the Merger Dr Francesco Bellini, the Honourable James Andrews Grant   
and Mr Gerard Veilleux will join your Board as non-executive directors.         

Further details on these Proposed Directors and on BioChem are included in this 
letter under the heading "Board Members" and in Part o of this document.        

Due to its size, the Merger is conditional on, inter alia, Shire Shareholders'  
approval. The purpose of this document is to explain why your Board considers   
the Merger to be in the best interests of the Company and its Shareholders and  
to seek your approval for it at the forthcoming Extraordinary General Meeting.  
Those Directors of the Company holding Ordinary Shares and three of those       
limited partnerships controlled by HealthCare Ventures LLC (of which your       
Chairman is President), who in aggregate hold 9,087,385 Ordinary Shares (or the 
ADSs underlying those Ordinary Shares) representing approximately o per cent of 
the issued share capital of the Company, have indicated to the Company that they
intend to vote in favour of the Merger in respect of their entire holdings.     

Rationale for and benefits of the Merger                                        

The Board believes that the Merger brings together two publicly-traded specialty
pharmaceutical companies with complementary strengths, activities and           
competencies. Shire has built effective research and development functions, an  
effective sales and marketing organisation in the US and UK and has established 
and is expanding its functions in Canada and certain leading European markets.  
BioChem has built an outstanding late stage research operation through which it 
has generated a pipeline of projects focused in three discrete specialty        
therapeutic categories: oncology/haematology, vaccines and anti-virals. The     
principal benefits of the Merger are expected to be:                            

o     Diversification. The revenue growth of the combined Shire and BioChem     
entity (the "Enlarged Group") will be driven not only by Shire's key
marketed products, Adderall, Pentasa, Agrylin and Carbatrol, and by 
     BioChem's Second Look and Fluviral, but also by the sales achieved by two
  of the world's foremost pharmaceutical companies in GlaxoSmithKline in
 respect of 3TC/Epivir, Combivir, Trizivir and Zeffix, and Johnson and
  Johnson in respect of Reminyl. In addition, the Enlarged Group expects
Foznol to become a key contributor to revenue growth when regulatory
approvals, which are expected inearly 2002, are obtained.           

o     Increased financial resources. At 31 December 2000, Shire had indebtedness
    of approximately $ o and cash and investments of approximately $ o while
      BioChem had indebtedness of approximately $o and approximately $ o in cash
     and investments. With pro forma revenues of $ o and net income of $ o for
     2000 the Directors and Proposed Directors expect to have greatly enhanced
    cash with which to finance the Enlarged Group's development and research
     activities. Shire will be required to either obtain consent to the Merger
    from its bank lenders under the credit facility entered into at the time
      of Shire's merger with Roberts Pharmaceutical Corporation in 1999 or repay
the amount outstanding under the credit facility. Shire has not yet 
determined whether to seek consent or repay the amount outstanding. 

  For purposes of this letter, financial information on BioChem has been
adjusted to consolidate CliniChem and exclude exceptional items.    

o     A broadened and strengthened pipeline. The Enlarged Group will have 24    
   products in development of which 12 will be in pre-clinical and Phase I
     development, and 12 will be in full clinical development or registration.
This will strengthen the product pipeline in the areas of           
      oncology/haematology and CNS with a total of 15 products in development in
   these areas and will broaden the pipeline of products in development by
 the inclusion of 5 products in the areas of anti-virals and vaccines.

o                                                                               

o     Leverage from complementary skills and operations. The Enlarged Group will
have a direct marketing capability in seven of the eight major      
pharmaceutical markets in the world. The Enlarged Group will        

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    benefit from the application of existing development capabilities to the
enlarged product pipeline and the direct marketing of these products
through its own specialist sales forces. The Directors and Proposed 
  Directors expect the Enlarged Group's lead optimisation activities and
     network of business and academic relations to provide a regular source of
development candidates to supplement its development activities.    

o     Operating synergies. The Directors and Proposed Directors of Shire believe
that the Merger will result in certain operating synergies in the   
following areas:                                                    

 o     Review of research and development activities: cost savings and
           future cost avoidance are expected to result from: establishment of
         a budget for the Enlarged Group; a review of the Enlarged Group's
        requirements for new research and development projects; thorough
          review of the Enlarged Group's research and development portfolio;
and the use by the Enlarged Group of Shire's development
capabilities.                                           

  o     Financing: the Enlarged Group's net cash and ability to generate
           further cash will enable the group to discharge its indebtedness to
    its bank lenders, if it chooses, which would result in a net
          reduction in financing costs of approximately $3 million in a full
year; and                                               

o     Re-organisation of business activities: the re-organisation of
   administrative, service and other functions of the Canadian
   operations of the Enlarged Group may give rise to operating
synergies for the Enlarged Group.                       

There will be a substantial one time charge in the [second] quarter of 2001 of  
between [o] and [o] in connection with consummating the Merger and restructuring
the Enlarged Group's combined operations. Taking into account the opportunity   
for synergies referred to above and excluding the one time charge, the Shire    
Board believes the Merger will be accretive to earnings for Shire Shareholders  
twelve months after the Closing.                                                

Information on BioChem                                                          

BioChem is an international pharmaceutical company dedicated to the research and
development of innovative products for the prevention and treatment of human    
diseases, with a focus on infectious diseases and cancer.                       

Key products and markets                                                        

BioChem's first therapeutic product, 3TC/Epivir (lamivudine), has become the    
cornerstone of HIV infection/AIDS combination therapies, most recently being    
launched as part of GlaxoSmithKline's Trizivirtriple combination tablet.        
3TC/Epivir is the most widely-prescribed antiretroviral for HIV infection/AIDS  
and is available in over 100 countries. Worldwide sales, including as a         
component of the combination tablet Combivir, were $873 million in 1999. BioChem
receives royalties from GlaxoSmithKline on the worldwide sales of 3TC/Epivir for
the treatment of HIV infection/AIDS. 3TC/Epivir is protected by patent until    
2009 in the US, with further protection expected in the US for combination      
therapies and combination products, Combivir and Trizivir.                      

A second therapeutic product, Zeffix, an oral treatment for chronic hepatitis B,
is currently being introduced to key markets worldwide by GlaxoSmithKline.      
Zeffix improves liver function and histology in the majority of chronic         
hepatitis B patients and reduces progression to cirrhosis and reverse cirrhosis.
Zeffix is now available in a number of countries including China, Japan, Taiwan,
South Korea and the US. Worldwide sales of Zeffix were $73.1 million for the    
first nine months of 2000. BioChem receives royalties from GlaxoSmithKline on   
its worldwide sales of Zeffix. BioChem's marketed products also include PACIS   
for the treatment of superficial bladder cancer, Fluviral S/F for the prevention
of influenza and Second Look for the diagnosis of breast cancer.                

Project Pipeline                                                                

With approximately 450 employees and operating from three sites in Canada and   
one in the US, BioChem has a number of projects at various stages of development
including the anti-ivirals BCH-10618 and BCH-13520 for HIV infection/AIDS in the
pre-clinical phase, the anti-cancer compound Troxatyl and FrakeFamide for pain  
control in Phase II, nasal and injectable cell culture vaccines for influenza   
and a vaccine for Neisseria meningitidis all of which are in Phase I and a      
vaccine in pre-clinical for Pseudomonas aeruginosa.                             

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CliniChem                                                                       

In 1998, CliniChem Development Inc. was formed by BioChem to continue the       
research and development of certain of BioChem's therapeutic and vaccine product
candidates with a view to eventual commercialisation. In exchange for BioChem   
granting CliniChem an exclusive perpetual licence to use BioChem technology to  
conduct the CliniChem programs and related activities, CliniChem agreed to pay  
BioChem a monthly technology fee at the rate of CN$352,000 over a period of 48  
months. CliniChem contracted its research and development activities to BioChem 
under a research and development agreement. BioChem recognised costs related to 
these programmes as research and development expenses and billed CliniChem on a 
fully burdened cost-plus-5per cent. basis.                                      

BioChem acquired all of the outstanding CliniChem Class A common shares on 15   
December 2000and CliniChem was merged into BioChem.                             

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BioChem Summary Financial Information                                           

The following table, which has been extracted from the financial information set
out on pages o to o of this document summarises the financial performance of    
BioChem reported in $ under US GAAP, consolidating CliniChem and excluding other
exceptional items,:                                                             

                                                                [Download Table]

                                              1997     1998      1999    [2000]
                                              -----    -----    -----    ------
                                                   (in millions of dollars)    
                                                                               
Royalties ................................     89.7    103.8    116.1          
Other ....................................     17.4     23.1     19.6          
                                              -----    -----    -----          
Total revenues ...........................    107.1    126.9    135.7          

                                              -----    -----    -----          
Operating income .........................     50.2     58.9     39.4          

                                              -----    -----    -----          
Net income from contimuing operations ....     56.1     68.0     59.7          

CliniChem contract revenue was $14.6 million and $50.0 million in the years     
ended 31 December 1998 and 1999. Exceptional items in 1998 relate to the        
disposal of the investment of $85.0 million.                                    

Board Members                                                                   

Following the Merger, three members of the BioChem Board of Directors, Dr       
Francesco Bellini, the Honourable James Andrews Grant and Mr Gerard Veilleux,   
will join your board, where their industrial experience and experience in the   
pharmaceutical industry in general and in Canada in particular will be a        
valuable addition.                                                              

Dr Francesco Bellini was a co-founder of BioChem in 1986 and is the company's   
current Chairman and Chief Executive Officer. Dr Bellini received a B.Sc. in    
chemistry from Loyola College in Montreal in 1972, and a Ph.D. in organic       
chemistry from the University of New Brunswick in 1977.                         

The Honourable James Andrews Grant, a Director of BioChem since 1986, is a      
partner with the law firm of Stikeman, Elliott in Montreal. Mr Grant, who also  
sits on the boards of several other prominent Canadian corporations, attended   
McGill University receiving a B.A. in arts in 1958 and a B.C.L. in law in 1961. 

Mr Gerard Veilleux joined the BioChem board in 1999. He is president of Power   
Communications Inc. and Vice-President of Power Corporation, a diversified      
management and holding company. Mr Veilleux is a director of several public and 
private companies as well as a member of the Board of Governors of McGill       
University. He has a Master's degree in public administration from Carleton     
University and a Bachelor of Commerce from Laval University.                    

Information on Shire                                                            

Shire is a specialty pharmaceutical company focused primarily on four           
therapeutic areas: central nervous system disorders, oncology/haematology,      
metabolic/bone diseases, and gastroenterology.                                  

Shire's strategy is to in-license, develop and market therapies in its areas of 
strategic focus. This approach is complemented by the advanced drug delivery    
platforms developed by Shire Laboratories which may be used to enhance the      
bioavailability, reduce the side effects or improve the dosage regimen of       
existing marketed compounds. Shire seeks to protect the intellectual property   
upon which it relies through a range of patents and patent applications (both   
its own and that of its licensors).                                             

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Products currently marketed in the US are Adderall and DextroStat for Attention 
Deficit Hyperactivity Disorder (ADHD), Carbatrol, launched in May 1998, for the 
treatment of epilepsy, Pentasa for ulcerative colitis, Agrylin for              
thrombocythemia and ProAmatine for orthostatic hypotension. The key UK marketed 
products are the Calcichew range of prescription calcium and calcium/vitamin D  
products used as adjuncts in the treatment of osteoporosis and Reminyl for the  
treatment of Alzheimer's disease.                                               

The Company's lead development products are Reminyl, for the treatment of       
Alzheimer's disease; SLI 381, a novel once a day formulation of Adderall;       
Foznol, for the treatment of hyperphosphataemia in patients with chronic kidney 
failure; Dirame, an orally administered analgesic for treating moderate to      
severe pain; SPD421, an anti-epileptic in-licensed from D-Pharm; and SPD420, a  
potential treatment for ADHD in-licensed from Cortex. Reminyl is being          
co-developed by Shire and Janssen Pharmaceutica NV, a subsidiary of Johnson and 
Johnson. The first European authorisations for marketing of Reminyl were granted
in 2000 and various other applications have been made. The US New Drug          
Application (NDA) was submitted, by Janssen, on 29 September 1999 and an        
approvable letter was issued in August 2000 by the FDA. Foznol is currently in  
Phase III trials in Europe, in Phase III in the US and Phase I in Japan. An NDA 
for SLI 381, a patent protected derivative of Adderall, was filed on 3 October  
2000. Work has also started on the extension of Carbatrol's approved indications
to include bi-polar disease (SPD 417). Shire also has a wide range of drug      
delivery technologies that may be applied to its own products or to those of    
third parties.                                                                  

During 2000, Shire has announced the following milestones:                      

o     Reminyl received its EU authorisation in Sweden and was launched in the UK
on 21 September 2000.                                               

o     Reminyl received its approvable letter from the FDA.                      

o     An application was submitted to the FDA for once a day Adderall SLI 381.  

o     The in-licensing of SPD421 from D-Pharmand of SPD420 from Cortex were     
announced.                                                          

Shire after the Merger                                                          

Overview                                                                        

Following the Merger, the Enlarged Group will be one of the world's leading     
global specialty pharmaceutical companies with four areas of focus: central     
nervous system disorders, oncology/haematology, anti-virals and vaccines. The   
Enlarged Group will refer to itself as "specialty" because its principal        
products tend to be prescribed by specialists as opposed to primary care        
physicians. Accordingly, a comparatively small sales force such as Shire's can  
promote specialty products effectively while it could not be expected to achieve
the necessary coverage of primary care physicians.                              

The Enlarged Group's principal products will include: in the US, Adderall for   
the treatment of Attention Deficit Hyperactivity Disorder; Agrylin for the      
treatment of elevated blood platelets; Pentasa for the treatment of ulcerative  
colitis, Carbatrol for the treatment of epilepsy; ProAmatine for the treatment  
of orthostatic hypotension; and PACIS for the treatment of superficial bladder  
cancer; in the UK, the Calcichew range, used primarily as adjuncts in the       
treatment of osteoporosis, and Reminyl for the treatment of Alzheimer's disease;
and, in Canada, ProAmatine,Epivir, (marketed in a partnership with              
GlaxoSmithKline), Second Look, a product in the early stages of marketing       
outside of the US, where the Enlarged Group hopes to be authorised to market in 
2001; and Fluviral S/F, a vaccine for the prevention of influenza. In addition, 
the Enlarged Group will have a number of products in late stage development     
including Dirame and FrakeFamide for the treatment of moderate to severe pain,  
Foznol for the treatment of high blood phosphate levels associated with kidney  
failure, Troxatyl for the treatment of leukemia and solid tumours; SPD421, an   
anti-epileptic in-licensed from D-Pharm and SPD420, a potential treatment for   
ADHD in-licensed from Cortex.                                                   

After the Merger, the Enlarged Group's revenues will continue to be derived from
three sources: sales of products by sales and marketing operations principally  
in the US, the UK and Canada, royalties from sales of Reminyl, Zeffix and       
3TC/Epivir and licensing and development fees. For the period ended 31 December 
1999, 2000 Shire had revenues of $401.5 million and net income (before an APB 25
stock option charge of $11.9 million andexceptional costs of $135.2 million of  
$52.2 million. For the same period, BioChem had revenues of$135.7 million and   
net income from continuing operations of $59.7 million.                         

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Strategy and Approach                                                           

The Enlarged Group's strategy is to develop products and, where they fall within
the therapeutic focus, to market them through sales organisations in the major  
markets of the world. The key elements of the operating strategy are described  
below:                                                                          

Market proprietary products through the Enlarged Group's own sales force        

The Enlarged Group believes that higher financial returns can be achieved by    
marketing products directly, as opposed to receiving royalties on licensees'    
sales. The Merger enhances Shire's sales and marketing capability in Canada. The
Enlarged Group intends to continue to expand its sales and marketing capability,
as opportunities arise, particularly in the US, major European markets, Japan   
and through distributors outside of the significant pharmaceutical markets.     

Manage development risk                                                         

Recognising the inherent risks of failure in drug development, both BioChem and 
Shire have historically sought to manage development risk by maintaining a broad
and balanced development portfolio. Shire has also sought to selectively        
leverage relationships with collaborative parties. BioChem, through its academic
collaborations and investment in a leveraged network of research companies, has 
access to projects and technologies. The combined company is anticipated to     
continue reliance on the broad network of contacts to identify product          
candidates which can be developed either internally or through collaborative    
partnerships.                                                                   

Focus on the development of innovative products                                 

BioChem's lead optimisation and chemistry expertise has led to the development  
and commercialisation of innovative products. Shire has also sought to identify 
promising product candidates already under development or exploit a number of   
proprietary drug delivery technologies to develop products. In addition to      
developing proprietary pipeline products, the Enlarged Group's principal        
objective will be to concentrate operations on licensing, acquiring, developing,
marketing and selling proven products and technologies. Both companies have     
historically benefited from proven products that generate cash flow, which      
contributes partial financial support to drug development activities, and       
provides enhanced product sales opportunities for the sales force.              

Sales and Marketing                                                             

Following the Merger the Enlarged Group will use its sales and marketing        
infrastructure to sell and market most of its licensed and internally developed 
products. The combined sales and marketing operations of the Enlarged Group in  
the US, the UK, Canada and Europe will consist of o , o , o and o sales         
representatives, respectively. Following the Merger, this expanded sales force  
will have a broader portfolio of products with opportunities to benefit from    
increased geographical coverage.                                                

Combined Marketed Products                                                      

The table below lists the key currently marketed products of Shire and BioChem  
by therapeutic areas, indicating the owner or licensor of the product and who is
marketing the product in which territory.                                       

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                                                        [Enlarge/Download Table]

Products                    Principal Indication(s)   Owner/Licensor    Marketed By/Relevant Territory   
--------                    -----------------------   --------------    ------------------------------   
                                                                                                         
Treatments for CNS disorders                                                                             

Adderall                    ADHD                      Shire             Shire/US                         
DextroStat                  ADHD                      Shire             Shire/US                         
Carbatrol                   Epilepsy                  Shire             Shire/US                         
Reminyl                     Alzheimer's disease       Shire             Shire/UK (Co-promotion)          

Treatments for metabolic/bone diseases                                                                   

Calcichew range             Osteoporosis adjunct      Nycomed           Shire/UK and Ireland             

Treatments for oncology/haematology                                                                      

Agrylin                     Elevated blood platelets  Shire             Shire/US and Canada              
ProAmatine                  Orthostatic hypotension   Nycomed           Shire/US and Canada              
PACIS                       Bladder cancer            BioChem           Urocor/US and Paladin Labs/Canada

Anti-Virals                                                                                              

3TC/Epivir/Combivir/        HIV/AIDS                  BioChem           GlaxoSmithKline/Worldwide, except
Trizivir                                                                Canada                           
3TC/Combivir                HIV/AIDS                  BioChem           BioChem and GlaxoSmithKline      
                                                                        co-marketed in Canada            
Zeffix/Epivir -HBV/         Hepatitis B               BioChem           GlaxoSmithKline/Worldwide, except
Heptovir/Heptodin                                                       Canada                           
Heptovir                    Hepatitis B               BioChem           BioChem and GlaxoSmithKline      
                                                                        co-marketed in Canada            

Vaccines                                                                                                 

Fluviral S/F                Influenza                 BioChem           BioChem/Canada                   

Treatments for gastrointestinal disorders                                                                

Pentasa                     Ulcerative colitis        Ferring           Shire/US                         
Colazide                    Ulcerative colitis        Shire             Shire/UK/EU and Southeast Asia   
Colace/Peri-Colace          Constipation              Shire             Shire/US and Canada              

Computer assisted detection products                                                                     

Second Look                 Breast cancer diagnosis   Qualia Computing  BioChem/Worldwide, except US     

Products under Development                                                      

After the Merger, the Enlarged Group will seek to maintain a broad and balanced 
approach to the development of new products by, among other things, leveraging  
third-party research and development expertise, exploiting investment in        
research collaborations and licensing compounds from third parties and          
developing them through the clinical phase with a view to marketing them through
the Enlarged Group's sales and marketing organisation or out-licensing if       
appropriate. On a combined basis, Shire and BioChem spent approximately $138    
million on research and development in the year ended 31 December 1999, which   
represents 27 per cent of combined revenues.                                    

The table below lists the key products under development by Shire and BioChem by
therapeutic area, including their development status and their territorial      
rights. Where either company has secured a licensee for a product, this fact is 
also indicated.                                                                 

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                                                        [Enlarge/Download Table]

Product(s)                   Principal Indication(s)      Status                         Territorial Rights   
----------                   -----------------------      ------                         ------------------   
                                                                                                              
Treatments for CNS disorders                                                                                  

Reminyl (galantamine)(1)     Alzheimer's disease          In registration or marketed    Global               
SLI381                       ADHD                         In registration                Global               
Dirame                       Moderate/severe pain         Phase III                      Global               
FrakeFamide(2)               Moderate/severe pain         Phase II                       Global               
SPD417                       Bi-polar disorder            Phase III                      Global               
SPD503                       ADHD                         Phase I                        Global               
SPD418                       Epilepsy                     Phase I                        Global               
SPD502                       Stroke                       Phase I                        Global excl. Nordic  
                                                                                         and Baltic countries 
SPD451                       Parkinson's disease          Pre-clinical                   Global               

Treatments for metabolic diseases                                                                             

Foznol                       High blood phosphate levels  Phase III                      Global               
                             in patients with kidney                                                          
                             failure                                                                          

Treatments for gastroenterological disorders                                                                  

Pentasa (500 mg)             Ulcerative colitis           Phase II/III                   US                   
Emitasol                     Nausea and vomiting          Phase II/III                   US, Canada           
Balsalazide                  Ulcerative colitis           Phase II/III                   [Europe], Southeast  
                                                                                         Asia                 
Treatments for oncological/ haematological diseases                                                           

Agrylin                      Thrombocythemia              In registration                Global               
Troxatyl                     Leukemia and solid tumours   Phase II                       Global               
SPD424                       Prostate cancer              Phase III                      North America, Europe

Antivirals                                                                                                    

BCH10618                     HIV/AIDS                     Pre-clinical                   Global               
BCH13520                     HIV/AIDS                     Pre-clinical                   Global               

Vaccines                                                                                                      

Injectable and nasal        Influenza                     Phase I/II                  North America           
influenza vaccine derived                                                                                     
from cell culture                                                                                             
Neisseria meningitides      Meningitis, septicemia        Phase I                     Global                  
vaccine                                                                                                       

Pseudomonas aeruginosa      Bacteremia,opportunistic      Pre-clinical                Global                  
vaccine                                                                                                       

----------                                                                      
(1)   The licensee is Janssen.                                                  
(2)   The licensee is AstraZeneca(except Canada).                               

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Drug Delivery Technologies                                                      

The Enlarged Group will have several platforms of drug delivery technologies    
that can be applied to drugs in order to enhance their effectiveness or their   
convenience to patients in terms of dosage regimen. Generally, this involves    
re-formulating the drug into a new delivery system designed either to enhance   
the absorption of the drug into the blood stream or, alternatively, to delay    
absorption of the drug into the bloodstream, thereby requiring the patient to   
take fewer daily doses.                                                         

The Enlarged Group's portfolio of drug delivery technologies will include       
technologies designed to develop oral, controlled release delivery of drugs, a  
technology for rapid absorption through the tissues of the mouth and several    
technologies for predicting and improving bioavailability of drugs. It is       
intended to out-license these technologies to third parties in return for       
development fees, milestone payments and royalties. It is also intended to      
employ these technologies selectively to products being developed internally    
where it is believed the characteristics of the product can be improved or      
modified to secure a competitive advantage.                                     

Phentermine Litigation                                                          

Until April 1998, Shire Richwood Inc. distributed products containing           
phentermine, a prescription drug approved in the US as a single agent for short 
term use in obesity. Contrary to the approved labelling of these products,      
physicians in the US co-prescribed phentermine with fenfluramine or             
dexfenfluramine for management of obesity. This combination was popularly known 
as the "fen/phen" diet. In mid-1997, following concerns raised about cardiac    
valvular side effects alleged to be associated with this diet regime, the       
fenfluramine and dexfenfluramine elements of the "fen/phen" diet were withdrawn 
from the US market. SRI and a number of other pharmaceutical companies are being
sued for damages for personal injury and medical monitoring arising from        
phentermine used either alone or in combination.                                

As of 31 December 2000 Shire had been named as a defendant in approximately     
3,729 cases related to the "fen/phen" litigation. Shire has been dismissed from 
2,178 cases with approximately 1,120 further dismissals pending on the basis    
that the plaintiff was shown not to have used Shire's product. In approximately 
136 cases, of which 45 have been subsequently dismissed, it has been            
specifically alleged that the relevant plaintiff did use Shire's products.      

Pursuant to an indemnity from Shire's former contract manufacturer of           
phentermine, Eon Labs Manufacturing, Inc. (Eon), legal costs in respect of the  
phentermine litigation have to date been met by Eon or its insurance carriers.  
Shire also has access to its own products liability policy for certain defence  
costs and claims up to a maximum of $o million. In addition, Shire has obtained 
additional insurance for claims of third parties up to an aggregate of $o       
million (less a self-insured retention of $o million).                          

The Directors are confident that these claims will not result in any award of   
damages against Shire. Nevertheless, Shire intends to defend vigorously any and 
all claims made against the Enlarged Group in respect of phentermine and will   
continue to seek case dismissals based upon product identification.             

Current trading and prospects                                                   

On o February 2001, Shire released its audited preliminary statement of results 
for the year ended 31 December 2000, the text of which is set out in Part o of  
this document. On o January 2001, BioChem announced its [audited] results for   
the year ended 31 December 2000, the full text of which is set out in Part o of 
this document.                                                                  

In the Board's opinion, the current outlook for the Enlarged Group's key drivers
of revenue growth remain favourable. Adderall's market share [    ], 3TC        
royalties [    ] and following the launch of Zeffix in Japan [    ].            

Taking into account the opportunity for synergies and excluding the one time    
charge, the Board believes the Merger will be earnings enhancing twelve months  
after the Closing.                                                              

The Shire audited preliminary statement of results for the year ended 31        
December 2000 released on o February 2001 included the following statement on   
current trading:                                                                

[                          ]                                                    

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Extraordinary General Meeting                                                   

Set out at the end of this document is a Notice of Extraordinary General Meeting
of the Company to be held at 35 New Broad Street, London EC2M 1SQ, England, on  
oo 2001 at 3.00 p.m.. At this meeting, an ordinary resolution will be proposed  
to approve the Merger, to increase the authorised share capital of the Company, 
to grant authority to the Directors to allot such capital and to create new     
Special Voting Shares and to attach certain rights and restrictions to those    
shares. In addition a special resolution will be proposed to increase the       
Directors' powers to allot equity securities for cash free of the pre-emption   
rights conferred by the Companies Act 1985.                                     

Action to be taken                                                              

You will find enclosed a form of proxy for use at the Extraordinary General     
Meeting. Whether or not you propose to attend the Extraordinary General Meeting 
in person, you are requested to complete the form of proxy in accordance with   
the instructions thereon and return it as soon as possible but, in any event, so
as to reach the Company's registrars, Lloyds TSB Registrars, The Causeway,      
Worthing, West Sussex, BN99 3UHEngland, not later than [3o 00 p.m.] on o 2001.  
The return of a completed form of proxy will not prevent you from attending the 
Extraordinary General Meeting and voting in person if you so wish.              

Recommendation                                                                  

The Board, which has received financial advice from Deutsche Bank, considers    
that the Merger is in the best interests of Shire and its shareholders as a     
whole. In providing advice to the Board, Deutsche Bank has placed reliance on   
the Board's commercial assessment of the Merger.                                

The Directors unanimously recommend you to vote in favour of the Resolutions to 
be proposed at the Extraordinary General Meeting, as they intend to do in       
respect of shareholdings in which they are interested, which amount in aggregate
to o Ordinary Shares, representing approximately o per cent of the issued share 
capital.                                                                        

Yours sincerely,                                                                

Dr. James H. Cavanaugh                                                          
Chairman                                                                        

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 PART II

- DESCRIPTION OF BIOCHEM

BioChem is an international specialty pharmaceutical company involved in the    
research and development, of innovative products for the prevention, detection  
and treatment of human diseases.                                                

BioChem's most significant therapeutic products, which have been developed with 
GlaxoSmithKline, are 3TC and Zeffix. 3TC is an orally available formulation of  
lamivudine for the treatment of patients with HIV infection and AIDS. 3TC is    
currently marketed in approximately 100 countries and achieved sales of CAN$1.3 
billion in 1999. Zeffix is the first and only orally available treatment for    
chronic hepatitis B infection and for the prevention of liver graft reinfection.
Zeffix was first approved outside of the Philippines and Canada in 1999. Zeffix 
is approved in over 69 countries and has been launched in over 45 countries.    
Zeffix achieved worldwide sales of CAN$36 million in 1999. In August 2000, the  
Asia Pacific Consensus Group on the Prevention and Management of Chronic        
Hepatitis B and C endorsed Zeffix as a key treatment option for a broad range of
chronic hepatitis B patients.                                                   

In September 1997, the U.S. Food and Drug Administration ("FDA") authorised the 
marketing of Combivir, the first product to combine two antiretroviral drugs in 
a single tablet formulation. Each tablet of Combivir contains 3TC and AZT and   
can be taken twice daily, offering the advantage of reducing significantly the  
number of tablets a person on a 3TC/AZT based treatment regimen needs to take.  
This reduction simplifies the complex multi-drug treatment regimens, thus       
potentially enhancing patient adherence to therapy schedules. The European      
Commission gave approval to market Combivir in the 15 member states of the      
European Union on 18 March 1998. In Canada, the Canadian Health Protection      
Branch ("HPB") approved Combivir on 4 December 1998.                            

On 24 March 1999, the FDA granted approval for expanded prescribing information 
regarding the use of 3TC in infants, children and adolescents. In addition, this
approval included an important revision to the indication for use of 3TC in     
combination with any other antiretroviral agent for the treatment of HIV        
infection in adults and children. On 15 November 2000, the FDA authorised the   
marketing of Trizivir in the United States. Each tablet of Trizivir contains    
3TC, AZT and abacavir and can be taken twice daily. Trizivir is the first tablet
to combine three anti-HIV agents, thus making it the simplest triple combination
antiretroviral therapy available with the potential to enhance patients'        
adherence to their therapy schedule. On 4 January 2001, the European Commission 
authorised the marketing of Trizivir in the 15 member states of the European    
Union.                                                                          

BioChem's most advanced therapeutic product candidates are being developed      
principally for use in the treatment of cancers and infectious diseases as well 
as one product for pain control, FrakeFamide which is in Phase II of clinical   
development. BioChem's most advanced product candidate for cancer is Troxatyl   
(troxacitabine), a nucleoside analog in clinical development to treat various   
forms of cancer. Troxatyl began Phase II monotherapy trials in 1999.            

BioChem is also engaged in the research and development of vaccines for human   
use. BioChem's direct sales force is marketing a split virus influenza vaccine  
developed and manufactured by BioChem to healthcare providers across Canada.    
BioChem's vaccine product candidates include a new cell culture-based influenza 
vaccine using a novel proprietary cell line and high-cell density microcarrier  
technology, which are licensed to GlaxoSmithKline. BioChem is also involved in  
research and development of new recombinant protein-based bacterial vaccines.   

Therapeutics products                                                           

BioChem's most advanced therapeutic product candidates are currently directed at
providing innovative medicines principally in the anticancer and anti-infective 
areas. BioChem's research and development activities are either done internally 
or through contracts and strategic alliances. The following table represents    
BioChem's most advanced therapeutic products:                                   

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                                                        [Enlarge/Download Table]

PRODUCT/CANDIDATE       INDICATION      DEVELOPMENT STATUS            COMMERCIAL RIGHTS      
                                                                                             
3TC/Epivir              HIV/AIDS        On the market                 BioChem/GlaxoSmithKline
Zeffix/Epivir-HBV/      Hepatitis B     On the market                 BioChem/GlaxoSmithKline
Heptovir/Heptodin       infection                                                            
Combivir                HIV/AIDS        On the market                 BioChem/GlaxoSmithKline
Trizivir                HIV/AIDS        On the market                 BioChem/GlaxoSmithKline
PACIS                   Bladder cancer  On the market                 BioChem                
Troxatyl                Cancer          In development - Phase II     BioChem                
FrakeFamide (BCH-3963)  Pain control    In development - Phase II     BioChem/AstraZeneca    
BCH-10618 ((-)dOTC)     HIV/AIDS        In development - preclinical  BioChem                
BCH-13520               HIV/AIDS        In development - preclinical  BioChem                

AIDS/HIV Infection                                                              

The World Health Organization (the "WHO") estimates that, as of the end of 2000,
36.1 million people worldwide had been infected with HIV, the virus that leads  
to the development of AIDS. The WHO estimates that, as of the end of 2000,      
approximately 920,000 people were infected with HIV in North America and 540,000
in Western Europe and 700,000 in Eastern Europe. Worldwide, there were          
approximately 14,500 new HIV infections per day in 2000, totalling 5.3 million  
new infections during the year. More than 95 percent of these new infections    
occurred in developing countries. HIV infection and AIDS was the fourth leading 
cause of death worldwide in 2000 resulting in an estimated 3 million deaths, the
highest number of AIDS death ever. According to World-Wide Antiretroviral Sales,
IMS Report, in 2000, the antiretroviral (anti-HIV) market will reach $3.5       
billion in sales, with reverse transcriptase inhibitors representing 54 per cent
of the market ($2 billion). The vast majority of the sales were generated in    
North America and Western Europe.                                               

Product on the market -- 3TC                                                    

The therapeutic product 3TC (lamivudine) is indicated for the treatment of HIV  
infection and AIDS. 3TC was first approved in the United States on 17 November  
1995 where it is marketed as Epivir. Approval in Canada shortly followed on 8   
December 1995. The Committee on Proprietary Medicinal Products ("CPMP") and the 
EMEA on 8 August 1996 gave full approval under exceptional circumstances for the
15 member states of the European Union. On 29 September 1997, the FDA authorised
the marketing of Combivir, the first product to combine two antiretroviral drugs
in a single tablet formulation. Each tablet of Combivir contains 3TC and AZT and
can be taken twice daily, offering the advantage of reducing significantly the  
number of tablets a person on a 3TC/AZT based treatment regimen needs to take,  
thus enhancing patient adherence to therapy schedules. The European Commission  
gave approval to market Combivir in the 15 member states of the European Union  
on 18 March 1998. In Canada, the HPB approved Combivir on 4 December 1998.      

On 15 November 2000, the FDA authorized the marketing of Trizivir in the United 
States. Trizivir is the first product to combine three antiretroviral drugs in a
single tablet formulation. Each tablet of Trizivir contains 3TC, AZT and        
abacavir and can be taken twice daily. Trizivir is the simplest triple          
combination antiretroviral therapy available with the potential to enhance      
patients' adherence to their therapy schedule. On 4 January 2001, the European  
Commission authorised the marketing of Trizivir in the 15 member states of the  
European Union. GlaxoSmithKline is also currently developing a once-a-day       
formulation of 3TC.                                                             

The safety and efficacy of 3TC together with 3TC's ease of administration have  
successfully established 3TC as the cornerstone of combination therapy in HIV   
infection and helped pave the way to combine antiretrovirals for maximum        
clinical benefit and compliance. 3TC is being used in the majority of triple and
quadruple combination therapies with other nucleoside analogs, protease         
inhibitors and non-nucleoside reverse transcriptase inhibitors ("NNRTI") and was
part of the pivotal clinical trials used as part of the basis for approval of   
five other HIV antiretroviral agents: the nucleoside analog abacavir, the NNRTI 
efavirenz, and the protease inhibitors indinavir, nelfinavir and amprenavir.    

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3TC is available for sale and marketing in approximately 100 countries and is   
the most widely prescribed medication for HIV and AIDS in the world. Combivir is
available for sale and marketing in more than 80 countries. On 24 March 1999,   
the FDA granted approval for expanded prescribing information on the use of 3TC 
in infants, children and adolescents. In addition, this approval included an    
important revision to the indication for use of 3TC in combination with any     
other antiretroviral agent for the treatment of HIV infection in adults and     
children                                                                        

Resistance to drugs is one of the most significant challenges in HIV/AIDS       
therapy and viral resistance testing is used increasingly by physicians to      
detect mutations and help decide whether a patient should switch to a new       
treatment combination. Data presented at the Third International Workshop on HIV
Drug Resistance and Treatment Strategies in San Diego on 24 June 1999 suggests  
that combination therapies which contain 3TC remain potent and continue to      
suppress HIV even in presence of 3TC resistant mutants.                         

BioChem has licensed to GlaxoSmithKline the worldwide rights, with the exception
of Canada, to develop, manufacture and sell 3TC. In Canada, 3TC is sold by      
BioChem in partnership with GlaxoSmithKline.                                    

In Development                                                                  

Appearance of drug resistant viruses is an inevitable consequence of prolonged  
exposure of HIV to antiretroviral therapy. Therefore, it is still necessary to  
develop alternate drug combinations for the long-term successful treatment of   
HIV infection. BioChem is focusing its efforts on developing new agents which   
are effective against existing drug resistant viruses and can be rationally     
incorporated into novel drug combination therapy. The objective of BioChem's    
program is to bring to the market drugs which are potent, well tolerated and    
active against strains of virus resistant to current therapies. Two compounds,  
both novel nucleoside analog reverse transcriptase inhibitors ("NRTIs"), are    
currently being developed, namely BCH-10618 and BCH-13520.                      

A) BCH-13520                                                                    

BCH-13520 has shown significant inhibition of HIV replication for both wild-type
and drug resistant virus. Importantly, in vitro studies have demonstrated that  
BCH-13520 remains active against clinical isolates of HIV which display         
phenotypic resistance to marketed NRTI antiretroviral agents such as AZT, 3TC,  
d4T and abacavir. Resistance of the HIV viruses to BCH-13520 is slow to develop,
which is in contrast to the relative speed of emergence of virus grown in the   
presence of AZT, 3TC or NNRTI's.                                                

In vitro studies have also shown that BCH-13520, when used in combination with  
3TC, AZT, Sustiva, d4T, BCH-10618, nevirapine, saquinavir or abacavir,          
demonstrates additive or slightly synergistic anti-viral activity with most of  
these agents. These data suggest that BCH-13520 will be able to fit into        
multi-drug combination regimens. Cytotoxicity and mitochondrial toxicity        
evaluations of BCH-13520 demonstrate an excellent toxicity profile in vitro.    
Preliminary results of an in vitro myelotoxicity study indicate that BCH-13520  
has a similar profile to 3TC and is 200-fold less toxic than AZT to human bone  
marrow cells.                                                                   

In a mouse model of HIV infection, BCH-13520 was able to reduce virus levels in 
mouse serum by over one log unit following treatment with BCH-13520 at 30       
mg/kg/day for 14 days. Pharmacokinetic and acute toxicity studies have been     
completed with rats tolerating the drug at the highest dose administered (2,000 
mg/kg p.o.). A two-week escalating repeat dose toxicity evaluation in rats was  
also conducted and the product was found to be safe up to 500 mg/kg/day. In     
monkeys, bone marrow cytology abnormalities were observed in the first 14-day   
study at oral doses of 300 mg/kg and above. Due to the very high                
bioavailability, drug exposure was found to be higher than expected and a       
follow-on 28-day oral study is presently ongoing using lower doses to identify  
the no-adverse effect dose level. No adverse effect dose level has been         
identified for intravenous administration in this species at 40 mg/kg.          

Taken together, the data indicates that BCH-13520 is a candidate worthy of      
advancing into clinical evaluation for the treatment of HIV infection. The      
preclinical long-term Good Laboratory Practice safety studies are currently     
underway. BioChem plans to submit an IND to begin Phase I trials in the second  
quarter of 2001.                                                                

B) BCH-10618 (also known as (-)dOTC)                                            

BCH-10618 has been shown to stop the replication of the HIV virus in vitro and  
BCH-10618 appears to be capable of inhibiting the replication of HIV viruses    
that have become resistant to 3TC, AZT, d4T and abacavir and to some protease   
inhibitors. In addition, based on in vitro studies, in contrast to 3TC,         
resistance to BCH-10618 appears slow to develop and when mutations do emerge in 
the virus, they confer little to no diminished sensitivity to BCH-              

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10618. BioChem believes these properties may give BCH-10618 a role in the       
treatment of both HIV-infected patients in whom standard triple combination     
regimens are no longer effective and in patients who have never received        
anti-HIV therapy (first-line therapy). Investigation of the toxicity profile of 
BCH-10618 in animals is currently underway. BioChem plans to submit an IND      
amendment to begin Phase I trials in the second quarter of 2001.                

Hepatitis B                                                                     

Data from the WHO indicate that over 2 billion people worldwide have been, at   
some point, infected with hepatitis B virus. Of these 2 billion, there are over 
350 million people chronically infected (WHO 1996), 75 per cent of whom are     
found in the Asia-Pacific region. There are some 25 million chronic carriers of 
HBV in industrialised countries with developed economies and healthcare         
programmes. These chronic carriers are at high risk of developing chronic active
hepatitis, which kills up to 2 million persons per year. The WHO estimated that 
as many as 25 to 35 per cent of individuals who become chronic carriers will    
eventually die prematurely as a result of their hepatitis B from cirrhosis or   
hepatocellular carcinoma (liver cancer) as a result of their hepatitis B        
infections. Vaccines to prevent hepatitis B are currently available; however,   
they have not been shown to be effective in those already infected with the     
virus.                                                                          

Alpha interferon was previously the only widely approved treatment for patients 
with chronic active hepatitis B. It is administered by injection, is only       
successful in controlling the virus in a minority of patients and is associated 
with undesirable side-effects such as flu-like symptoms. Alpha interferon has   
poor efficacy in the majority of chronic hepatitis B patients who are located in
the Asia-Pacific region and who could be presumed to have acquired the disease  
perinatally or at a young age. This usually leads to an immune tolerance state  
of infection where an immunostimulant such as alpha interferon works poorly.    
BioChem believes a significant market opportunity exists for an effective and   
safe oral anti-viral therapy against chronic hepatitis B, especially for a      
product with proven efficacy in immune tolerant chronic hepatitis B patients,   
such as the vast majority in the Asia-Pacific region.                           

Product on the Market -- Zeffix                                                 

Zeffix, but also available as Epivir-HBV in the United States, as Heptovir in   
Canada and as Heptodin in China, has been developed with GlaxoSmithKline as an  
oral treatment for chronic hepatitis B infection and for the prevention of liver
graft reinfection.                                                              

GlaxoSmithKline conducted numerous Phase III clinical trials of Zeffix as a     
treatment for chronic hepatitis B infection. Clinical trial sites included      
countries in the Asia/Pacific region, Europe, Australia, South Africa, Canada   
and the United States. Most of these trials were for a duration of one year of  
treatment with follow-up periods ranging from three months to two years. A      
longer trial for up to five years of Zeffix treatment was completed in Asia.    
Results from several clinical trials to date showed that:                       

1)    Zeffix therapy after one year of treatment in a non-Asian trial results in
      similar seroconversion rates as a standard course of interferon (Intron A)
and a course of Zeffix and interferon combined.                     

2)    Asian patients have been found to respond equally well to Zeffix as       
Caucasians.                                                         

3)    The seroconversion rate is cumulative with duration of Zeffix treatment.  
     73 per cent of patients with active liver disease (ALT of twice the upper
limit of normal level) successfully seroconverted at year four.     

4)    On extended Zeffix treatment, mutant virus showing changes in the YMDD    
   locus of the virus polymerase emerges in a number of patients. Patients
      from this Asian trial who had a YMDD mutated form of the hepatitis B virus
  for up to three years continued to have reduced levels of ALT and HBV,
suggesting that despite the presence of a mutated form of the virus,
patients may still obtain benefits from Zeffix.                     

5)    Zeffix significantly improves liver inflammation, reduces progression of  
fibrosis and improves fibrosis compared to placebo.                 

6)    Interim results from an International Study demonstrates a regression in  
      cirrhosis in 64 per cent of patients with pre-existing cirrhosis following
two or more year of treatment with Zeffix.                          

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7)    Zeffix monotherapy is effective in a specific group of patients with a    
form of the disease known as "pre-core mutant hepatitis B".         

8)    Response is sustained after stopping Zeffix therapy in a majority of      
patients who had achieved seroconversion.                           

9)    The overall safety profile of Zeffix is excellent with side effects       
similar to placebo during the one year Phase III treatment period.  

Overall these data support the broad utility of Zeffix as a safe and effective  
drug for treating a wide range of patients with chronic hepatitis B. At the end 
of August 2000, the Asia Pacific Consensus Group on the Prevention and          
Management of Chronic Hepatitis B and C in association with the Journal of      
Gastroenterology and Hepathology have endorsed Zeffix as a key treatment option 
for a broad range of chronic hepatitis B patients. The Asia Pacific guidelines  
recommend that hepatitis B patients with active liver disease, liver failure, or
recurrent disease after liver transplantation should be treated with Zeffix.    

First approved in the Philippines and in Canada in August and November 1998     
respectively, Zeffix has been approved and launched through 1999 in the United  
States of America, Hong Kong, Singapore, China, South Korea, some European Union
countries and Taiwan and more recently in Japan. As of December 2000, Zeffix has
been approved in 69 countries and launched in 45 of those. On 20 November 2000, 
GlaxoSmithKline launched Zeffix in Japan. Provision of drug information to      
medical institutions regarding Zeffix in Japan is carried out by GlaxoSmithKline
K.K. with Ajinomoto Pharma Co. Ltd., through co-promotion as Ajinomoto Pharma   
has experience in liver disease.                                                

Pursuant to agreements entered into with GlaxoSmithKline, BioChem has licensed  
to GlaxoSmithKline the worldwide rights, with the exception of Canada, to       
develop, manufacture and sell Zeffix. In Canada, Zeffix is sold by BioChem in   
partnership with GlaxoSmithKline, under the tradename Heptovir.                 

Bladder Cancer                                                                  

Bladder cancer is the sixth most common cancer (other than skin cancer) in the  
United States according to the American Cancer Society. While progress has been 
made in the prevention and treatment of bladder cancer, the American Cancer     
Society estimated that in 2000 over 54,000 Americans will be diagnosed with     
transitional cell carcinoma of the bladder and more than 12,000 people with     
recurrent or acute disease will die from it.                                    

Product on the Market -- PACIS                                                  

BioChem has developed a BCG (Bacillus Calmette-Guerin) immunotherapeutic that   
has demonstrated efficacy in the treatment of superficial bladder cancers. The  
American Urology Association recommends the use of BCG immunotherapeutics as    
first line therapy for superficial bladder cancer. BioChem's BCG product is     
marketed, through exclusive distributorships, under the trademark PACIS and as  
of 31 December 1999, was registered in Canada, Argentina and the Philippines. On
9 March 2000, the FDA approved PACIS for sale in the United States of America as
a first line treatment for carcinoma in situ of the urinary bladder.            

Pain Control                                                        

The pain control or pain management market is divided into the acute            
(short-term) and chronic (longer-term, persistent) pain market and along the    
lines of mild, moderate and severe pain. The injectable / intravenous forms of  
these analgesics are generally used for pain management in the acute setting,   
such as post-operative or trauma pain.                                          

Chronic pain (chronic headache, lower back pain, cancer pain, arthritis pain,   
other disorders, such as neuralgias and neuropathies) has been described as one 
of the most costly health problems in America. More than 30 million Americans   
visit physicians for chronic pain each year (D&MD-Pain Therapeutics: A          
Revolution in the Making). It is estimated that in the United States of America 
alone, the annual direct and indirect cost is close to $70 billion              
(International Association for the Study of Pain). Many chronic pain conditions,
such as arthritis and cancer pain, affect older adults. With the world          
population generally living longer, the incidence of cancer and                 
arthritis-associated pain is expected to increase, as is the growing demand for 
potent and safe novel agents to manage moderate to severe pain.                 

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Development Project -- FrakeFamide (BCH-3963)                                   

Further to an agreement signed between BioChem and AstraZeneca, AstraZeneca is  
presently developing a peripherally acting u-opioid receptor agonist,           
FrakeFamide, discovered by BioChem and intended for the treatment of acute and  
chronic pain.                                                                   

Opioids such as morphine are the cornerstone in clinical pain treatment in spite
of the development of tolerance and their undesirable side effects due to their 
action on the central nervous system ("CNS"). The traditionally held view was   
that opioid analgesia is mediated exclusively within the CNS. However, recent   
research has shown that analgesia at the site of inflammation can be initiated  
by the activation of opioid receptors located outside the CNS. Particularly, it 
has been demonstrated that the agonists with a preference for u-receptors are   
generally the most potent. With that rationale, BioChem scientists discovered   
FrakeFamide which is highly selective for the u-opioid receptor and which does  
not penetrate the CNS. In animal models, FrakeFamide has exhibited potency      
similar to morphine but without the dependence, tolerance or other CNS          
associated side effects.                                                        

AstraZeneca completed four Phase I studies with an injectable (i.v.)            
formulation. The results of these studies showed that FrakeFamide was well      
tolerated with no CNS side effects or respiratory depression and suggested that 
it was 10 times more potent than morphine as measured by a surrogate marker.    
AstraZeneca initiated in 1999 Phase II clinical trials to evaluate the analgesic
potential of FrakeFamide.                                                       

There is a large unmet need in the management of acute pain following surgery   
and FrakeFamide has the potential to become an important drug in that setting.  
The Phase II studies should be completed in early 2001 and additional clinical  
trials program with the injectable (i.v.) formulation in the management of      
post-operative pain is planned to be initiated thereafter.                      

AstraZeneca is working on various potential non-parenteral formulations that    
would be suitable for administration in the management of chronic pain such as  
osteoarthritis and cancer pain.                                                 

Cancer Chemotherapy                                                             

Epidemiological data (Eur J Cancer 35(1):24-31 1999 UI: 99227530 Abstract)      
confirm that each year, there are an estimated 10 million new cases of cancer   
diagnosed globally, and this is expected to rise steadily to 20 million by the  
year 2020. Over 6.2 million people worldwide died of cancer in 1997. The leading
causes of cancer deaths are attributed to lung (1.1 million), stomach (765,000),
colon and rectum (505,000), and breast (385,000).                               

The worldwide cancer market including anti-emetics and other adjuvants was      
valued at over $23 billion in 1999, or about 6 per cent of the global           
pharmaceutical market (IMS World 2000, Annual Review of Pharmaceutical Industry 
Performance). In 1999, the cancer market grew by approximately 17 per cent over 
the previous year, 1998 (Datamonitor SPRINT Sales 2000).                        

Development Project -- Troxatyl ( troxacitabine or BCH-4556)                    

Troxatyl is a nucleoside analog being developed to treat various forms of       
cancer. A few nucleoside analogs, such as gemcitabine and Ara-C, are used in the
treatment of certain cancers. Troxatyl is a nucleoside analog that BioChem      
believes will provide significant benefits in treating various forms of cancer  
due to its novel structure and mechanism of action. BioChem plans to administer 
Troxatyl initially by intravenous injection.                                    

Three Phase I safety and pharmacokinetic studies have been completed in a total 
of 104 advanced stage cancer patients with solid tumours. The drug was well     
tolerated with myelosuppression and skin toxicity (rash and the hand-foot       
syndrome) as the main side effects. Major clinical responses were seen in three 
patients with malignant melanoma, hypernephroma and a carcinoma of unknown      
origin. Based on these encouraging results, BioChem has completed a pilot Phase 
II clinical trial program with Troxatyl in various types of solid tumors (e.g.  
renal, prostate, colorectal, non-small-cell lung, pancreatic, melanoma) using   
the once every three weeks administration schedule. Preliminary evidence of     
activity was seen in the renal and pancreatic cancer trials. BioChem is now     
investigating the therapeutic effects of Troxatyl using an alternate daily times
5 monthly administration schedule in pancreatic cancer. Additional trials are   
planned and BioChem will then focus its Phae III program on the solid tumors    
where activity have been identified. Since, in clinical practice, cancers are   

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treated mainly by using combinations of chemotherapeutic agents, BioChem is also
performing, in parallel, two pilot combination chemotherapy Phase I trials of   
Troxatyl with either cisplatin or paclitaxel in solid tumors.                   
A Phase I safety and pharmacokinetic study in refractory acute leukemia patients
has also been completed at the MD Anderson Cancer Center in Houston, Texas.     
Thirty-one patients with acute myelogenous leukemia (AML) were treated and a    
specific recommended dose was defined for this patient population. Again, the   
drug was well tolerated with skin toxicity and mucositis as the main            
non-hematologic side effects. In addition, Troxatyl showed promising signs of   
antileukemic activity in this heavily pretreated population of patients: 4/30   
evaluable patients had major (complete and partial) responses and 73% showed a  
significant decrease in their leukemic cells following therapy. BioChem is now  
following up on these results and has initiated testing four different Troxatyl 
combination regimens with either idarubicin, topotecan, Ara-C or Mylotarg.      
BioChem believes that these trials will optimize the antileukemic activity of   
Troxatyl and set the groundwork for subsequent Phase III trials. Four patients  
of 13 evaluable with chronic myelogenous leukemia in blastic phase (CML-BP)     
achieved a return to chronic phase disease and three others achieved a major    
hematologic response. BioChem is now following up on these promising results by 
testing single agent Troxatyl in a North American multicenter trial involving 50
CML-BP patients. The FDA will be consulted in the second quarter of 2001 to     
determine Troxatyl's registration strategy in this patient population.          

Vaccine Products                                                                

BioChem is engaged in the research and development of vaccines for human use.   
BioChem currently manufactures and markets in Canada a split influenza virus    
vaccine. In 1997, BioChem also started to export its split influenza vaccine to 
Argentina following the signing of a distribution agreement with Argent C.      
Comercio Internacional S.A.                                                     

BioChem has a new vaccine production center in Ste-Foy in the Quebec City area. 
This centre has an overall area of approximately 118,000 square feet and houses 
production, quality-control laboratories and warehousing as well as             
administrative offices. Commercial vaccine production in Ste-Foy started in     
1998.                                                                           

BioChem recently initiated vaccine development operations in the United States. 
This development unit was created in order to develop BioChem's current and     
future vaccine pipeline. It began operations in October 1998 in Northborough,   
Massachusetts, in a 62,000-square-foot facility. The facility houses process    
research and development, analytical research and development, a cGMP Pilot     
Plant for the preparation of clinical lots, clinical development, regulatory    
affairs, project planning and management, and administration. BioChem's vaccine 
development facility in Northborough, Massachusetts became fully operational in 
1999. The first vaccine candidate developed at this location is designed to     
protect against bacterial meningitis caused by N. meningitidis.                 

The following table presents the pipeline of BioChem most advanced vaccine      
products:                                                                       

                                                        [Enlarge/Download Table]

PRODUCT                         INDICATION/POTENTIAL       DEVELOPMENT    COMMERCIAL RIGHTS       
                                APPLICATIONS               STATUS                                 

                                                                                                  
Fluviral S/F                    Influenza                  On the market  BioChem                 
Injectable influenza vaccine    Influenza                  Phase I/II     BioChem/Glaxo-SmithKline
derived from cell culture                                                                         
Nasal influenza vaccine         Influenza                  Phase I        BioChem/Glaxo-SmithKline
derived from cell culture                                                                         
Neisseria meningitidis vaccine  Meningitis, septicemia     Phase I        BioChem                 
Streptococcus pneumoniae        Pneumonia, meningitis,     Preclinical    BioChem                 
vaccine                         otitis media                                                      
Pseudomonas aeruginosa vaccine  Bacteremia, opportunistic  Preclinical    BioChem                 

Development Projects                                                            

Injectable and nasal cell culture-based influenza vaccines                      

BioChem has developed a new cell culture-based influenza vaccine using a novel  
proprietary cell line and high-cell-density microcarrier technology. BioChem    
believes that this manufacturing technology will enable a more                  

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profitable and productive process and better flexibility in the case of         
increased demand for an influenza vaccine, which would be required during a     
pandemic. BioChem completed a Phase I clinical trial in April 1997 in Canada of 
a vaccine produced with the cell-culture process. The results of this trial     
showed that the safety and immunogenicity of the new vaccine were equivalent to 
those of the conventional egg-derived vaccine. BioChem began a Phase II clinical
trial program in Canada in November 1997 that included three trials with 1,000  
volunteers. The objective of these trials was to compare the immunogenicity and 
safety of the new vaccine with BioChem's commercially available egg-derived     
vaccine in three patient populations: young adults, elderly, and children. The  
results of these studies demonstrated in all three populations that this novel  
vaccine was as safe and as immunogenic as the conventional vaccine for all three
viral strains.                                                                  

BioChem and GlaxoSmithKline finalized in December 1998 an alliance covering     
BioChem's cell culture technology for influenza vaccine and nasal delivery      
technologies, including one named the SMBV delivery technology from Biovector   
Therapeutics S.A. The technologies were transferred from BioChem to             
GlaxoSmithKline during 1999. Under the terms of this agreement, BioChem and     
GlaxoSmithKline will co-operate in marketing the products in the United States, 
after a period of joint development by both parties. GlaxoSmithKline holds      
exclusive marketing rights in Europe and in the rest of the world. Furthermore, 
GlaxoSmithKline will manufacture products that are intended for various global  
markets, except Canada. Proceeds from the sale of the vaccines in the United    
States and in the rest of the world, excluding Canada, will be allocated among  
the two partners according to a predetermined formula. In Canada, BioChem will  
maintain exclusive rights to the vaccines, including production and marketing   
rights. Once approved, this new cell-culture manufacturing technology should    
allow BioChem to produce the vaccines more rapidly and in the event of a        
pandemic, to manufacture the vaccines in greater volume with less lead time. If 
one of the nasal delivery technologies proves successful, it should eliminate   
the discomfort associated with injectable vaccines and confer mucosal immunity  
in addition to systemic immunity. GlaxoSmithKline conducts all technical and    
clinical development. GlaxoSmithKline completed a further Phase I trial with    
SMBV in early 2000, following which GlaxoSmithKline advised BioChem of its      
intent not to pursue the development of the Biovector technology but to rather  
pursue the development of GlaxoSmithKline nasal technology. GlaxoSmithKline is  
conducting additional technical and clinical development.                       

Recombinant protein bacterial vaccines                                          

Effective vaccines stimulate protective immunity. Through a research            
collaboration with the Vaccine Research Unit of the Laval University Hospital   
Research Center, BioChem conducts research and development of recombinant       
protein vaccines against numerous bacterial infections for which no vaccines are
currently available or for which vaccines exist but with less-than-optimal      
efficacy or market attractiveness.                                              

Many of the target bacteria for which BioChem is researching or developing      
vaccines are encapsulated with polysaccharide. Capsular polysaccharides usually 
are effective vaccine antigens. However, polysaccharide vaccines suffer from the
shortcomings that they stimulate only short-term immunity and not immune memory 
and are poorly immunogenic in young children. Furthermore, there is significant 
antigenic variation among the capsular polysaccharides of different strains of  
the same bacteria. Consequently, numerous polysaccharide antigens must be       
administered to protect against multiple strains of an encapsulated bacterium.  
To overcome some of these limitations, polysaccharide conjugate vaccines have   
been and are being developed. However, because of the limited number of         
conjugate vaccines that can be combined in a single dose, current conjugate     
vaccines provide protection against only a limited number of strains of a       
bacterium.                                                                      

BioChem has adopted the strategy of identifying specific bacterial proteins for 
each pathogen that are able to elicit a broad immune response against all       
strains of the pathogen and that are immunogenic in young children while        
eliciting immune memory. Furthermore, such vaccines should be easier and less   
expensive to manufacture and could be combined more easily with vaccines that   
protect against other infectious diseases. BioChem is in development with       
recombinant protein vaccines against the following three bacterial infections:  

A) Neisseria meningitidis                                                       

N. meningitidis causes over 300,000 cases of endemic and epidemic disease       
worldwide, mostly meningitis and septicemia. N. meningitidis is becoming the    
most common cause of bacterial meningitis in the United States of America       
affecting approximately 3,000 people each year. The case-fatality rate is       
approximately 10 per cent for meningitis and 20 per cent for septicemia, despite
antibiotic therapy. Serogroup B, for which no vaccine exists, accounts for      
approximately 30 to 40 per cent of all cases of infection by N. meningitidis.   
The current polysaccharide vaccine has antigens for only four (A, C, W135 and Y)
of the 12 N. meningitidis serogroups.                                           

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Other groups are developing polysaccharide conjugate vaccines and protein-based 
vaccines. There are Serogroup C conjugate vaccines licensed in the UK.          

The protein discovered by BioChem appears to hold potential for the development 
of a vaccine against all N. meningitidis strains, including Serogroup B. This   
protein is present in all meningococcal isolates and is exposed at the surface  
of intact meningococcal bacteria, where it is accessible to antibodies.         
Immunization of mice with the purified recombinant protein confers protection   
against lethal N. meningitidis infection. The serum antibodies obtained from the
immunized mice kill N. meningitidis cells. This type of bactericidal activity is
generally recognized as being indicative of clinical protection against N.      
meningitidis infection. BioChem has developed a clinical-trial-scale            
manufacturing process and conducted a Phase I clinical trial in Canada from     
November 1999 into 2000. The data from this clinical trial demonstrated that the
vaccine was generally well tolerated and immunogenic and was able to elicit     
serum bactericidal antibodies. Additional clinical studies will be performed on 
an improved formulation of the vaccine.                                         

B) Streptococcus pneumoniae                                                     

S. pneumoniae infections are among the leading causes worldwide of illness and  
death in young children, persons with underlying debilitating medical conditions
and the elderly. S pneumoniae infections have accounted annually for 3,000to    
5,000 cases of meningitis, 200,000 to 600,000 cases of pneumonia and            
7,000,000-10,000,000 cases of acute otitis media in the United States of America
alone. According to the CDC, the case fatality rates for some immunocompromised 
and other high-risk patients have been reported to be higher than 55 per cent   
for meningitis and 40 per cent for pneumonia, despite appropriate antibiotic    
therapy. In children, S. pneumoniae causes 30 to 50 per cent of all cases of    
otitis media. Increased resistance to penicillin and other antibiotics has      
spread rapidly, such that there is an increased need for effective pneumococcal 
vaccines. S. pneumoniae strains are divided into at least 90 serologically      
capsular polysaccharide types. A polysaccharide vaccine against the 23 most     
common serotypes is available but is no more than 60 per cent effective in      
preventing pneumococcal meningitis in adults but is poorly effective in infants 
under two years of age and in preventing pneumonia in the elderly; it is not    
currently used to prevent otitis media. An heptavalent conjugate vaccine        
composed of seven polysaccharides coupled to a protein carrier was approved by  
the FDA in February 2000 for immunization of infants under age two. However,    
this product would cover only 60 to 75 per cent of disease-causing serotypes and
is technically complex to produce, such that it may be difficult to combine with
other vaccines. Moreover, it is not indicated for use in adults, and its        
effectiveness in preventing ear infections has not been documented by the FDA.  
Other groups are developing polysaccharide conjugate vaccines and protein-based 
vaccines.                                                                       

BioChem has discovered proteins that appear to hold great potential for the     
development of a new vaccine against all serotypes of pneumococcal infections.  
These proteins are highly immunogenic in mice. Immunized mice were protected    
against a lethal challenge in both bacteremia and pneumonia models of infection.
Sera from immunized rabbits and monkeys also can protect mice against lethal    
challenge. These proteins are conserved antigenically among pneumococcal        
isolates, exposed at the pneumococcal surface and accessible to protective      
antibodies. Therefore, BioChem believes that these proteins have the necessary  
characteristics to be considered potential candidates for the development of a  
broad-range vaccine for preventing pneumococcal infections.                     

C) Pseudomonas aeruginosa                                                       

P. aeruginosa are ubiquitous bacteria that cause primarily opportunistic        
infections in hosts who are compromised in their health status. The bacteria are
prevalent in moist areas in hospital settings. Infection can lead to serious and
sometimes life-threatening diseases in immunocompromised people. The prevalence 
of antibiotic resistance is high and increasing. Other groups are developing    
polysaccharide conjugate vaccines and protein-based vaccines.                   

BioChem initiated a collaboration with Cytovax Biotechnologies. Scientists at   
the University of Alberta had been conducting research on the pili of P.        
aeruginoas, which are appendages responsible for bacterial attachment to cells. 
While pili can elicit protective immunity against experimental infection, the   
protection is very highly type-specific, which would mean that a pilin vaccin   
would have to be highly multivalent, hence impractical to develop. These        
scientists identified sequences at the tip of the pili that were less variable  
and could elicit protective immune responses. Based on the pili tip sequences   
Cytovax has developed a candidate vaccine that would consist of 2-3 peptides,   
each conjugated to a carrier protein to enhance their immunogenicity. Cytovax   
and BioChem are collaborating in research, analytical, process, clinical, and   
regulatory issues. The vaccine program is in preclinical development.           

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Computer-Assisted Detection Products                                            

In July 1998, BioChem began investing in a new technology platform developed by 
Qualia Computing, Inc. ("Qualia") a privately held US medical computer science  
company. BioChem obtained exclusive rights to commercialize any life science    
product developed from this platform. The Qualia technology platform is a       
cognitive system that utilizes artificial intelligence, artificial neural       
networks and advanced information processing technologies to solve complex      
problems in the life science area. BioChem formed a new company, CADx Medical   
Systems Inc. ("CADx") in July of 1999 to develop the technology into products   
and to commercialize the products on a worldwide basis. CADx will develop       
products that focus on the clinical and industrial applications of this         
technology. The first commercial product is Second Look, a computer-assisted    
detection system for mammography designed to assist the radiologist in the      
earlier diagnosis of breast cancer. Commercialisation of Second Look started in 
mid 1999.                                                                       

In addition, BioChem has options to other medical applications of this          
technology platform. For examples, potential applications of this technology    
platform currently being investigated include cardiovascular disease diagnostic,
drug design, lead optimisation and genomics.                                    

Investments                                                                     

GeneChem                                                                        

In March 1997, BioChem agreed to make an investment of CAN$30 million in        
GeneChem Technologies Venture Fund L.P., a venture capital fund sponsored by    
BioChem's newly created subsidiary, GeneChem Financial Corporation. This CAN$100
million fund invests in advanced academic research projects and early-stage     
private or public companies in the area of genomics and related technologies for
human application. BioChem's partners in this fund are a select group of        
financial investors. As of 31 December 2000, CAN$21 million had been invested in
GeneChem Technologies Venture Fund, L.P. by BioChem.                            

On 14 September 2000, BioChem entered into an agreement to invest CAN $15       
million in GeneChem Therapeutic Venture Fund L.P., a new CAN$136.5 million      
capital fund. GeneChem Therapeutic Venture Fund L.P. will invest in genomics    
companies focusing on cancer and infectious diseases. The general partner and   
manager of GeneChem Technologies Venture Fund L.P. and GeneChem Therapeutics    
Venture Fund L.P. are GeneChem Enterprise Inc. and GeneChem Management Inc., two
indirect subsidiaries of BioChem.                                               

PART III

FINANCIAL INFORMATION ON BIOCHEM

The financial information contained in this Part III is extracted without       
material adjustment from the audited consolidated financial statements of       
BioChem (referred to as "the company" in this Part III) for each of the three   
years in the periods ended 31 December 2000, 1999 and 1998 filed on Form 20-F   
pursuant to the US Securities Exchange Act of 1934. The financial information   
has been prepared in accordance with Canadian GAAP in Canadian dollars. The     
independent public accountants of BioChem for the years ended 31 December 2000, 
1999 and 1998 were Raymond Chabot Grant Thornton who have respectively issued   
audit opinions on each of those three financial years.                          

 [ [Preliminary] 2000 numbers to follow]

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 CONSOLIDATED STATEMENTS OF EARNINGS

 (in thousands of Canadian dollars except per share information)

                                                        [Enlarge/Download Table]

                                                                                2000           1999           1998 
                                                                                   $              $              $ 
                                                                                                                   
Operating revenue                                                                                                  
Sales                                                                                        23,412         22,094 
Royalties                                                                                   172,588        154,122 
Research and development contracts                                                           79,923         33,718 
Interest                                                                                      7,528          9,869 
Other                                                                                         6,824          5,162 
-------------------------------------------------------------------------------------------------------------------
                                                                                            290,275        224,965 
-------------------------------------------------------------------------------------------------------------------
Expenses                                                                                                           
Cost of sales                                                                                14,223         11,812 
Selling and administrative                                                                   26,081         31,250 
Research and development (note 4)                                                            87,498         49,116 
Financial (note 4)                                                                            (918)          (114) 
-------------------------------------------------------------------------------------------------------------------
                                                                                            126,884         92,064 
-------------------------------------------------------------------------------------------------------------------

Earnings before depreciation, amortisation and other                                        163,391        132,901 
Depreciation and amortisation (note 4)                                                      (8,282)        (6,952) 
-------------------------------------------------------------------------------------------------------------------
Earnings before income taxes and other                                                      155,109        125,949 
Gain on sale of long-term investments                                                        24,181             -- 
Income taxes (note 5)                                                                      (12,091)        (9,479) 
Non-controlling interest                                                                         --          1,428 
Share of loss of a company subject to significant influence (note 8)                             --             -- 
-------------------------------------------------------------------------------------------------------------------
Earnings from continuing operations                                                         167,199       117, 898 
Earnings (loss) from discontinued operations (note 3)                                      (18,097)        (3,124) 
-------------------------------------------------------------------------------------------------------------------
Net income                                                                                  149,102        114,774 
-------------------------------------------------------------------------------------------------------------------
Basic earnings per common share                                                                                    
Continuing operations                                                                          1.59           1.09 
Net income                                                                                     1.42           1.06 
Fully diluted earnings per common share                                                                            
Continuing operations                                                                          1.57           1.09 
Net income                                                                                     1.41           1.06 

The accompanying notes are an integral part of the consolidated financial       
statements.                                                                     

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CONSOLIDATED STATEMENTS OF RETAINED EARNINGS

(in thousands of Canadian dollars)

                                                        [Enlarge/Download Table]

                                                                                2000           1999           1998 
                                                                                   $              $              $ 
-------------------------------------------------------------------------------------------------------------------
                                                                                                                   
Retained earnings, beginning of year                                                         45,813         81,039 
Net income                                                                                  149,102        114,774 
Premium on repurchase of common shares (note 13)                                          (209,497)             -- 
Reduction arising from the distribution of the CliniChem Class A                                                   
shares (note 14)                                                                                 --      (150,000) 
-------------------------------------------------------------------------------------------------------------------
Retained earnings (deficit), end of year                                                   (14,582)         45,813 
-------------------------------------------------------------------------------------------------------------------

The accompanying notes are an integral part of the consolidated financial       
statements.                                                                     

 CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands of Canadian dollars)

                                                        [Enlarge/Download Table]

                                                                               2000           1999            1998 
                                                                                  $              $               $ 
-------------------------------------------------------------------------------------------------------------------
                                                                                                                   
Operating activities                                                                                               
Earnings from continuing operations                                                        167,199         117,898 
Non-cash items (note 16)                                                                  (17,385)           6,279 
-------------------------------------------------------------------------------------------------------------------
Operating cash flow                                                                        149,814         124,177 
Changes in non-cash working capital items (note 16)                                       (10,811)        (12,586) 
-------------------------------------------------------------------------------------------------------------------
                                                                                           139,003         111,591 
-------------------------------------------------------------------------------------------------------------------

Investing activities                                                                                               
Maturity of temporary investments                                                          120,295          90,757 
Purchase of temporary investments                                                         (81,460)       (146,264) 
Acquisition of long-term investments                                                      (16,284)        (38,014) 
Proceeds from sale of long-term investments                                                 31,804              -- 
Acquisition of non-controlling interest                                                         --        (16,214) 
Capital expenditures                                                                      (41,071)        (22,048) 
Disposal of capital assets                                                                   1,048              -- 
Other                                                                                      (2,082)         (1,336) 
-------------------------------------------------------------------------------------------------------------------
                                                                                            12,250       (133,119) 
-------------------------------------------------------------------------------------------------------------------

Financing activities                                                                                               
Increase (decrease) in bank indebtedness                                                   (2,276)           2,016 
Increase in long-term debt                                                                      --           1,498 
Repayment of long-term debt                                                                (3,660)         (8,089) 
Non-controlling interest                                                                        --              -- 
Issuance of common shares                                                                    4,050           3,934 
Repurchase of common shares                                                              (121,158)              -- 
Distribution of the CliniChem Class A shares                                                    --       (150,000) 
-------------------------------------------------------------------------------------------------------------------
                                                                                         (123,044)       (150,641) 
-------------------------------------------------------------------------------------------------------------------

Foreign currency translation adjustment                                                    (2,900)           2,201 
-------------------------------------------------------------------------------------------------------------------
Cash flows related to continuing operations                                                 25,309       (169,968) 
Cash flows related to discontinued operations                                             (10,319)           2,371 
-------------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents                                            14,990       (167,597) 
Cash and cash equivalents, beginning of year                                                53,801         221,398 
-------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of year                                                      68,791          53,801 
-------------------------------------------------------------------------------------------------------------------

Pre-acquisition free cash flow                                                              96,898          88,207 
-------------------------------------------------------------------------------------------------------------------

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Pre-acquisition free cash flow includes cash flow from operating activities     
after capital expenditures, disposal of capital assets and other items in       
investing activities.                                                           

The accompanying notes are an integral part of the consolidated financial       
statements.                                                                     

 CONSOLIDATED BALANCE SHEETS

(in thousands of Canadian dollars)

                                                        [Enlarge/Download Table]

                                                                               2000           1999            1998 
                                                                                  $              $               $ 
-------------------------------------------------------------------------------------------------------------------
                                                                                                                   
Assets                                                                                                             
Current assets                                                                                                     
     Cash and cash equivalents                                                              68,791          53,801 
     Temporary investments                                                                  81,460         120,295 
     Accounts receivable (note 6)                                                           83,331          64,871 
     Inventories (note 7)                                                                    3,236           2,312 
     Prepaid expenses                                                                        3,089           2,464 
     Current assets of discontinued operations                                              89,620         123,586 
-------------------------------------------------------------------------------------------------------------------
                                                                                           329,527         367,329 

Long-term investments (note 8)                                                             110,324         103,746 
Capital assets (note 9)                                                                    137,988          98,778 
Other assets (note 10)                                                                      12,880          10,846 
Non-current assets of discontinued operations                                               33,998          51,863 
-------------------------------------------------------------------------------------------------------------------
                                                                                           624,717         632,562 
-------------------------------------------------------------------------------------------------------------------

Liabilities                                                                                                        
Current liabilities                                                                                                
     Bank indebtedness                                                                          --           2,276 
     Accounts payable and accrued liabilities (note 11)                                     45,314          25,122 
     Current portion of long-term debt (note 12)                                               600             942 
     Current liabilities of discontinued operations                                         42,558          67,906 
-------------------------------------------------------------------------------------------------------------------
                                                                                            88,472          96,246 
Long-term debt (note 12)                                                                   124,614          12,470 
Non-current liabilities of discontinued operations                                          34,767          45,225 
-------------------------------------------------------------------------------------------------------------------
                                                                                           247,853         153,941 
-------------------------------------------------------------------------------------------------------------------

Shareholders' equity                                                                                               
Capital stock (note 13)                                                                    382,174         408,365 
Contributed surplus                                                                          9,451          10,199 
Retained earnings                                                                         (14,582)          45,813 
Foreign currency translation adjustment (note 15)                                            (179)          14,244 
-------------------------------------------------------------------------------------------------------------------
                                                                                           376,864         478,621 
-------------------------------------------------------------------------------------------------------------------
                                                                                           624,717         632,562 
-------------------------------------------------------------------------------------------------------------------

The accompanying notes are an integral part of the consolidated financial       
statements.                                                                     

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Notes to consolidated financial statements                                      

(tabular amounts are in thousands of Canadian dollars except per share          
information)                                                                    

1. Nature of operations                                                         

The company is an international biopharmaceutical company dedicated to the      
research and development and commercialisation of innovative products for the   
prevention and treatment of human diseases with a focus in the anti-infective   
and anticancer areas.                                                           

2. Significant accounting policies                                              

The consolidated financial statements have been prepared in accordance with     
generally accepted accounting principles in Canada. The financial statements    
differ in certain respects from generally accepted accounting principles in the 
United States, as described in note 22.                                         

Principles of consolidation                                                     

The consolidated financial statements include the accounts of the company and   
those of its subsidiaries since their date of acquisition or creation.          

Use of estimates                                                                

The preparation of financial statements requires management to make estimates   
and assumptions that affect the amounts presented in the financial statements   
and the accompanying notes. Actual results could differ from these estimates.   

Foreign currency translation                                                    

Monetary assets and liabilities denominated in foreign currencies are translated
at the exchange rate in effect at year-end and non-monetary items are translated
at historical exchange rates. Operating revenue and expenses are translated at  
average exchange rates prevailing during the year. Gains or losses arising from 
these translations are included in earnings, with the exception of unrealised   
foreign exchange gains or losses on long-term monetary items, which are         
amortised over the remaining period of the related items.                       

Assets and liabilities of self-sustaining foreign operations are translated at  
the exchange rate in effect at year-end. Operating revenue and expense items are
translated at average exchange rates prevailing during the year. Any            
corresponding foreign exchange gains and losses are deferred and disclosed      
separately as part of shareholders' equity and are recognised in earnings when  
the interest in the foreign operations is reduced.                              

Cash equivalents and temporary investments                                      

Cash equivalents which consist primarily of highly liquid bank term deposits and
commercial paper are restricted to investments which have an original maturity  
of three months or less. Investments which have an original maturity of more    
than three months are disclosed as temporary investments.                       

Inventory valuation                                                             

The raw materials inventory is valued at the lower of cost and replacement cost.
The finished goods and work-in-process inventories are valued at the lower of   
cost and net realisable value. Cost is determined using the first in, first out 
method.                                                                         

Long-term investments                                                           

The investment in common shares of a company subject to significant influence is
accounted for by the equity method and other investments are recorded at        
acquisition cost. When there has been a decrease in value of a long-term        
investment that is other than a temporary decline, the investment is written    
down to recognise the loss.                                                     

Capital assets                                                                  

Capital assets are recorded at acquisition cost. Rights, licences and patents   
include acquisition costs, patent registration costs and other expenses incurred
to obtain the licences necessary to market and manufacture products.            

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Depreciation and amortisation are calculated as follows:                        

                 Methods              Annual rates
--------------------------------------------------------------------------------
Buildings                       Declining balance    5% to 10%                  
Equipment                       Declining balance    10% to 40%                 
Leasehold improvements          Straight-line        Over the lease terms       
Rights, licences and patents    Straight-line        5 to 10 years, commencing  
                                                  in the year in which the
                                             product is marketed

Goodwill                                                                        

Goodwill represents the excess of the cost of acquisitions over the fair value  
of the net assets acquired and is evaluated for any impairment in value. The    
evaluation consists of a review of the forecasted future earnings and the       
undiscounted future cash flows of the operations acquired. Any permanent        
impairment in the carrying value is charged to earnings in the year incurred.   
The company concluded that the carrying value of goodwill had not sustained a   
permanent impairment in value for the years ended 31 December 1999 and 1998.    

Goodwill is amortised on a straight-line basis over a period of 20 years, ending
in 2018.                                                                        

Deferred income taxes                                                           

The company follows the tax allocation basis of accounting for income taxes.    
Deferred income taxes result from timing differences between the amount charged 
to earnings and the tax deduction.                                              

Research and development                                                        

Research and development contract revenues are recorded on the basis of direct  
costs incurred, in addition to indirect costs and a portion of overhead         
expenses. Research and development contract revenues also include milestone     
revenue relating to research and development agreements.                        

Research and development expenses are recognised as incurred, net of related tax
credits, and include a share of administrative expenses.                        

Earnings per common share                                                       

Basic and fully diluted earnings per common share are calculated using the      
weighted average number of common shares outstanding during the year. Fully     
diluted earnings per share give effect to the potential exercise of outstanding 
stock purchase options.                                                         

3. Discontinued operations                                                      

On 29 January 1999, the company adopted a formal plan to dispose of its         
diagnostic operations. For reporting purposes, the results and financial        
position of this business segment have been presented as discontinued           
operations. Accordingly, prior years figures have been restated to reflect this 
change.                                                                         

In July 1999, the company disposed of the haematology operations of its         
diagnostics subsidiary. In January 2000, the company announced that it had      
reached an agreement in principle to dispose of the remaining operations to a   
management-led group of this subsidiary. The proceeds of disposition will be    
determined according to agreed upon terms and repayment is contingent upon      
future cash flows. The company has guaranteed the reimbursement of a long-term  
debt of this subsidiary in the amount of 37.3 billion Italian lire              
(CAN$27,952,000 as at 31 December 1999 and CAN$34,512,000 as at 31 December     
1998).                                                                          

The results of discontinued operations are as follows:                          

                                                        [Enlarge/Download Table]

                                                      2000             1999             1998 
                                                         $                $                $ 
                                                                                             
Operating revenue                                                    75,975          122,419 
Results of operations to measurement date                           (1,097)          (3,124) 
Estimated net loss on disposal                                     (17,000)               -- 
                                           --------------------------------------------------
                                                                   (18,097)          (3,124) 

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4. Information on the consolidated statements of earnings                       

Research and development                                                        

Research and development expenses are disclosed net of tax credits which        
amounted to $2,434,000 in 1999 and $1,935,000 in 1998.                          

Financial expenses                                                              

                                                        [Enlarge/Download Table]

                                                                    2000             1999             1998 
                                                                       $                $                $ 
                                                                                                           
Interest on long-term debt                                                          2,819               98 
Other interest                                                                          8              106 
Foreign exchange gain                                                             (3,960)            (298) 
Amortisation of deferred foreign exchange losses (gains)                              215             (20) 
                                                          -------------------------------------------------
                                                                                    (918)            (114) 

Depreciation and amortisation                                                   

                                                                [Download Table]

                            2000             1999             1998 
                               $                $                $ 
                                                                   
Capital assets                              7,344            5,863 
Goodwill                                      344              228 
Deferred charges                              594              861 
                  -------------------------------------------------
                                            8,282            6,952 

5. Income taxes                                                                 

                                                        [Enlarge/Download Table]

                                                            2000             1999             1998 
                                                               $                $                $ 
                                                                                                   
Income taxes at combined statutory tax rates                               13,870            9,856 
Non-deductible items                                                          459               75 
Realisation of previously unrecorded tax benefit                          (2,526)            (879) 
Large corporations tax                                                        288              427 
                                                  -------------------------------------------------
Income taxes at effective tax rates                                        12,091            9,479 

The provision for income taxes comprises the following:                         

                                                                [Download Table]

                   2000             1999             1998 
                      $                $                $ 
                                                          
Current                           12,399            9,479 
Deferred                           (308)                - 
          -------------- ---------------- ----------------
                                  12,091            9,479 

As at 31 December 1999, the company had accumulated research and development    
expenses in the amount of approximately $101,000,000 which can be used to reduce
taxable income in future years and which have no expiration date. In addition,  
the company has operating losses carried forward of approximately $8,000,000    
which expire on various dates from 2001 to 2006.                                

As at 31 December 1999, the company had investment tax credits amounting to     
approximately $12,400,000 ($14,200,000 as at 31 December 1998) which may be used
to reduce future taxes payable. These credits expire in the years 2004 to 2009. 

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The tax benefits in respect of these items have not been reflected in the       
consolidated financial statements as at 31 December, 1999.                      

6. Accounts receivable                                                          

                                                        [Enlarge/Download Table]

                                                                        2000             1999             1998 
                                                                           $                $                $ 
                                                                                                               
Trade                                                                                   4,048            5,124 
Royalties receivable from a shareholder                                                48,312           43,585 
Scientific research and experimental development tax credits                            1,500            1,749 
Research and development contracts                                                     19,216            6,357 
Other                                                                                  10,255            8,056 
                                                              -------------------------------------------------
                                                                                       83,331           64,871 

7. Inventories                                                                  

                                                                [Download Table]

                           2000             1999             1998 
                              $                $                $ 
                                                                  
Raw materials                                890              574 
Work-in-process                            2,198            1,427 
Finished goods                               148              311 
                 -------------------------------------------------
                                           3,236            2,312 

8. Long-term investments                                                        

                                                        [Enlarge/Download Table]

                                                            2000             1999             1998 
                                                               $                $                $ 
                                                                                                   
Investments in private companies, at cost                                  80,882           75,687 
Shares in public companies, at cost                                        11,258            9,065 
Investments in a company subject to significant                                                    
  influence-- North American Vaccine, Inc.(a)                                                      
Common shares, at equity value                                                 --               -- 
Preferred shares, at cost                                                   5,194            5,194 
Convertible notes, at cost                                                 12,990           13,800 
                                                 --------------------------------------------------
                                                                          110,324          103,746 

(a)   Investments in a company subject to significant influence - North American
Vaccine, Inc. Common shares, at equity value                        

North American Vaccine, Inc. (NAVA) is a public company listed on the American  
Stock Exchange. BioChem holds 32.0per cent. of NAVA's outstanding common shares 
as at 31 December, 1999, or 10,522,640 shares (34.7per cent. or 11,179,114      
shares as at 31 December 1998). As at 31 December 1999, the price per common    
share at the close of the market was $6.49 or US$4.50 ($13.61 or US$8.88 as at  
31 December 1998). As at 31 December 1999, the market value of the investment in
common shares based on the closing market price at the balance sheet date       
amounted to $68,343,000 ($152,148,000 as at 31 December,1998).                  

In 1999, the company exercised all 57,812 options held to acquire common shares 
of NAVA at a price of $4.48 (US$2.92) per share for a total of $258,838         
(US$168,811). In addition, BioChem sold 714,286 common shares of NAVA for       
proceeds of $7,371,000 (US$5,000,000).                                          

During the year, the company has guaranteed the reimbursement of NAVA's line of 
credit to a maximum amount of US$6,000,000.                                     

The company's share of losses in the common shares of NAVA in excess of its     
equity value of nil amounted to $23,439,000 in 1999 and $29,141,000 in 1998.    

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Preferred shares, at cost                                                       

The company holds 50per cent. of NAVA's preferred shares as at 31 December, 1999
and 1998, or 1,000,000 shares. Each preferred share is convertible into two     
common shares. The market value of the investment in preferred shares, based on 
the closing market price of the common shares at the balance sheet date, is     
$12,990,000 ($27,220,000 as at 31 December, 1998).                              

Convertible notes, at cost                                                      

The convertible notes of $12,989,700 (US$9,000,000) bear interest at the rate of
4.5per cent. payable semi-annually and mature in November 2003. The notes are   
secured by equipment and patents of NAVA and are convertible at all times into  
common shares of NAVA at the rate of 117.0864 shares per US$1,000 of capital.   
The carrying amount of the notes approximates the fair value.                   

Financial position and earnings                                                 

The financial position of NAVA as at 31 December 1999 and 1998, as well as the  
earnings for the years ended 31 December 1999 and 1998, presented in accordance 
with generally accepted accounting principles in the United States, in thousands
of Canadian dollars, are as follows:                                            

                                          2000             1999             1998
Financial position                           $                $                $

Total assets                                             49,039           98,936
Total liabilities                                       190,250          189,361
Shareholders' equity                                  (141,211)         (90,425)
Earnings                                                                        
Revenue                                                  16,280           12,430
Net loss                                               (73,248)         (83,979)

Disposal of investments in NAVA                                                 

On 18 November 1999, the company entered into an agreement with a publicly      
traded corporation to vote in favour of the acquisition by this corporation of  
all of the outstanding shares of NAVA. Pursuant to the agreement, the           
corporation has agreed to exchange each share of NAVA's common stock for an     
amount of US$7 per share composed of cash and common stock. This transaction is 
conditional upon certain events expected to occur in 2000 and will be accounted 
for when concluded.                                                             

9. Capital assets                                                               

                                                        [Enlarge/Download Table]

                                                     2000             1999             1998
                                                        $                $                $
                                                                                           
Cost                                                                                       
Land                                                                 6,401            5,414
Buildings                                                           96,464           68,298
Equipment and leasehold improvements                                34,012           22,550
Rights, licences and patents                                        25,354           19,085
                                           ------------------------------------------------
                                                                   162,231          115,347


                                                     2000             1999             1998
                                                        $                $                $
                                                                                           
Accumulated depreciation and amortisation                                                  
Buildings                                                            8,519            6,303
Equipment and leasehold improvements                                13,248            8,366
Rights, licences and patents                                         2,476            1,900
                                           ------------------------------------------------
                                                                    24,243           16,569
                                           ------------------------------------------------
Net book value                                                     137,988           98,778

The capital expenditures shown in the consolidated statement of cash flows are  
presented excluding the variation in construction-related accounts payable.     

Building costs include an amount of $24,401,000 in 1999 and $20,998,000 in 1998 
for items that were not utilised and therefore not depreciated.                 

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10. Other assets                                                                

                                                        [Enlarge/Download Table]

                                               2000             1999             1998 
                                                  $                $                $ 
                                                                                      
Goodwill, at net book value                                    6,705            7,049 
Deferred charges, at net book value                            4,648            3,542 
Deferred foreign exchange loss                                   722              128 
Other, at cost                                                   805              127 
                                     -------------------------------------------------
                                                              12,880           10,846 

11. Accounts payable and accrued liabilities                                    

                                                        [Enlarge/Download Table]

                                                    2000             1999             1998
                                                       $                $                $
                                                                                          
Accounts payable and accrued liabilities                           27,358           14,888
Construction-related accounts payable                               6,664              207
Income taxes payable                                               11,292           10,027
                                          ------------------------------------------------
                                                                   45,314           25,122

12. Long-term debt                                                              

                                                        [Enlarge/Download Table]

                                                                          2000             1999             1998 
                                                                             $                $                $ 
                                                                                                                 
Promissory note to a shareholder totalling US$80,000,000                                115,464               -- 
bearing interest at 5per cent. per annum, repayable in 2001                                                      

Bank  loans,  bearing  interest  at the  lender's  prime rate,                            4,800            8,460 
secured  by a  hypothec  on land and  building,  repayable  in                                                   
annual  instalments of $600,000 and a final payment  totalling                                                   
$3,600,000 in 2002 and renegotiable  for an additional  5-year                                                   
period.   A  subsidiary  has  undertaken  to  respect  certain                                                   
financial ratios. (a)                                                                                            

Federal  and  provincial  government  loans,  with  a  maximum                            4,950            4,950 
available  amount  of  $5,500,000,  non-interest  bearing  and                                                   
repayable  in  maximum   annual   instalments   of  $1,100,000                                                   
commencing in 2002                                                                                               

Obligations under capital leases maturing in 1999                                            --                2 
                                                               ------------------------------------------------- 
                                                                                        125,214           13,412 
Less: current portion                                                                       600              942 
                                                               --------------------------------------------------
                                                                                        124,614           12,470 
                                                               --------------------------------------------------

(a)   The company entered into an agreement with Investissement Quebec (IQ)     
whereby IQ guarantees, until 2006, 80per cent. of a maximum loan of 
    $4,800,000. IQ will reimburse the company the aggregate interest of this
loan until 2001 to a maximum of $1,875,000.                         

Payments due in each of the next five years are as follows:                     

                                                                             $
--------------------------------------------------------------------------------
2000                                                                        600 
2001                                                                    116,064 
2002                                                                      4,590 
2003                                                                        990 
2004                                                                        990 

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13. Capital stock                                                               

Authorised shares                                                               

An unlimited number of voting common shares, without par value.                 

Issued shares                                                                   

The changes to the company's capital stock are as follows:                      

                                                        [Enlarge/Download Table]

                                                                  2000             1999              1998
                                                                     $                $                 $
                                                                                                         
Number of shares                                                                                         
Balance, beginning of year                                                  108,735,790       108,255,640
Share repurchase                                                            (8,000,000)                --
Exercise of share options                                                       279,800           480,150
                                                      ---------------------------------------------------
Balance, end of year                                                        101,015,590       108,735,790
                                                      ---------------------------------------------------
Weighted average number of common shares outstanding                        105,312,719       108,442,700
                                                      ---------------------------------------------------

A two-for-one stock split of common shares took effect on 7 April 1997. All     
information relating to common shares reflects this stock split.                

                                                                [Download Table]

                                       2000             1999             1998
                                          $                $                $
Amounts                                                                      
                                                                             
Balance, beginning of year                           408,365          404,431
Share repurchase                                    (30,241)               --
Exercise of share options                              4,050            3,934
                            -------------------------------------------------
Balance, end of year                                 382,174          408,365

Share repurchase                                                                

On 19 July 1999, the company completed its purchase for cancellation of eight   
million of the company's common shares held by Glaxo Wellcome Inc. at a price of
US$20 per share. Payment of these shares is to be made in two stages:           
$121,158,000 (US$80 million) was paid on 19 July 1999 and the balance is        
presented as long-term debt and due on 19 January 2001. The above-mentioned     
transaction was recorded as follows: $30,241,000 as a reduction to capital      
stock, $748,000 as a reduction to contributed surplus and $209,497,000 as a     
charge to retained earnings.                                                    

Stock purchase options                                                          

Stock option plan                                                               

The company maintains a stock option plan intended for directors, officers,     
employees and consultants of the company. The total number of options that may  
be granted under the terms of the plan cannot exceed 19,250,000. The exercise   
price of options granted under the plan is determined by the Board of Directors 
of the company and cannot be lower than the market value on the date the options
are granted. These options expire no later than ten years after the date they   
are granted.                                                                    

The changes to the number of stock options granted by the company are as        
follows:                                                                        

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                                                        [Enlarge/Download Table]

                                                                        2000            1999             1998 
                                                                           $               $                $ 
                                                                                                              
Balance, beginning of year                                                         6,520,600        6,182,600 
Granted at a weighted average price of $38.17 in 1999,                               443,000          973,450 
$31.84 in 1998 and $35.59 in 1997                                                                             
Exercised at a weighted average price of $14.47 in 1999,                           (279,800)        (480,150) 
$8.19 in 1998 and $11.89 in 1997                                                                              
                                                              ------------------------------------------------
Cancelled                                                                          (135,050)        (155,300) 
                                                              ----------------------------------------------- 
Balance, end of year                                                               6,548,750        6,520,600 
                                                              ----------------------------------------------- 
Weighted average price of options outstanding at end of year                          $25.91           $24.36 
                                                              ------------------------------------------------
Options exercisable at end of year                                                 3,805,790        3,173,850 

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The information about stock options outstanding as at 31 December [1999] is as  
follows:                                                                        

                                                        [Enlarge/Download Table]

Number of options     Exercise   Weighted average   Weighted average          Number of    Weighted average 
outstanding             prices     remaining life     exercise price            options   exercise price of 
                                                          of options        exercisable             options 
                                                         outstanding                            exercisable 
                                                                                                            
$6.19 to $7.50         185,700          4.4 years               6.59            185,700                6.59 
$7.51 to $10.00        272,450          3.9 years               8.60            232,450                8.54 
$10.01 to $15.00     1,598,000          2.1 years              11.17          1,598,000               11.17 
$15.01 to $22.50       226,000          3.3 years              17.59            201,000               17.44 
$22.51 to $33.00     1,904,600          7.3 years              30.79            804,540               30.45 
$33.01 to $40.40     2,362,000          7.5 years              36.27            784,100               35.67 
                   ------------                    ---------------------------------------------------------
                     6,548,750                                 25.91          3,805,790               20.24 

The weighted average price of options exercisable for 1998 was $16.86.          

Investissement Quebec                                                           

In consideration for the guarantee of a subsidiary's loan relating to a building
and reimbursement of interest on this loan, the company has granted             
Investissement Quebec an option to purchase 123,476 common shares at an exercise
price of $5.15 per share. This option expires in July 2001.                     

Deferred share unit plan                                                        

In 1998, the company introduced a long-term incentive plan for directors and    
certain executives. Under the plan, the participants may elect to be allocated, 
in lieu of a cash payment, a portion or all of the annual bonus or fees in the  
form of Deferred Share Units (DSUs). The number of DSUs to be credited is based 
on the amount of the annual bonus in the case of executives, or directors fees  
in the case of directors, divided by the market value of the company's common   
shares at a predetermined date. The DSUs are redeemable (either in cash or      
common shares or a combination of cash and common shares) only upon the         
participant's retirement, death, resignation or termination. Compensation       
expense in respect of the DSUs is charged to income during the year incurred and
amounted to $761,000 in 1999 and $951,000 in 1998.                              

Shareholder Rights Plan                                                         

During 1995, the shareholders of the company approved a Shareholder Rights Plan 
(Rights Plan). Under the Rights Plan, one common share purchase right was issued
on 28 April 1995 in respect of each outstanding common share and a share        
purchase right for each common share issued thereafter. These rights are        
exercisable in a situation of public offering where certain conditions are not  
respected. Each right entitles the holder to purchase, from the company, one    
common share at a specific price, subject to certain anti-dilution adjustments. 
The Rights Plan expires on 30 June 2003, or unless terminated earlier by the    
company's Board of Directors. The purpose of the Rights Plan is to require      
anyone, who seeks to acquire 20per cent. or more of the company's voting shares,
to present a bid complying with specific provisions.                            

14. Transactions concluded with CliniChem Development Inc.                      

In 1998, CliniChem Development Inc. (CliniChem) was formed by BioChem to conduct
research and development of certain of the company's human therapeutic and      
vaccine product candidates.                                                     

On 8 June 1998, BioChem made a $150,000,000 cash contribution to CliniChem's    
capital. The shares of CliniChem held by BioChem were exchanged for Class A and 
B common shares of CliniChem. As at 26 June 1998, each holder of record of      
BioChem common shares received one Class A common share of CliniChem for each 40
common shares of BioChem held on 22 June,1998.                                  

The fair value of the Class A common shares of CliniChem distributed to         
BioChem's shareholders was approximately $24,000,000. This value has been       
determined by management based on the trading price of the shares of CliniChem  
on the relevant stock markets immediately after the distribution and has been   
accounted for as a reduction of retained earnings. The excess of the carrying   
value of the company's investment in CliniChem Class A shares over their fair   
value, which amounted to approximately $126,000,000, has also been accounted for
as a reduction of retained earnings.                                            

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Simultaneously, BioChem concluded a series of agreements with CliniChem. Under  
the terms of a technology licence contract, BioChem granted to CliniChem an     
exclusive perpetual licence to use BioChem technology to conduct the CliniChem  
programmes and related activities, and to manufacture and commercialise the     
CliniChem products worldwide. CliniChem will pay a fee to BioChem in exchange   
for the technology licence. The technology fee is payable monthly at a rate of  
$352,000 per month over a period of 48 months. However, the technology fee will 
cease to be payable under certain circumstances.                                

Under the terms of a research and development agreement, BioChem conducts the   
CliniChem programmes. CliniChem will use available funds, as defined in the     
contract, to repay BioChem for its research and development expenses. BioChem   
accounts for amounts received as research and development contract revenue.     

CliniChem also granted BioChem an option to acquire all rights to each CliniChem
product. This option is exercisable on a country-by-country basis for each      
CliniChem product.                                                              

Moreover, as the holder of the majority of Class B shares, BioChem is entitled  
to acquire, from a specific date, all of the outstanding CliniChem Class A      
common shares at a price to be determined according to a set formula.           

15. Foreign currency translation adjustment                                     

                                                        [Enlarge/Download Table]

                                                                          2000             1999             1998 
                                                                             $                $                $ 

                                                                                                                 
Balance, beginning of year                                                               14,244            2,399 
Effect of foreign  exchange rate variations  upon  translation                                                   
of the net assets of self-sustaining foreign operations                                (14,423)           11,845 
                                                                -------------------------------------------------
Balance, end of year                                                                      (179)           14,244 

16. Information on the consolidated statements of cash flows                    

In 1999, the company adopted the Canadian Institute of Chartered Accountants    
recommendations related to the presentation of cash flow statements. The        
standard requires that only investments which have an original maturity of three
months or less be disclosed as cash equivalents. In addition, all non-cash      
transactions are to be excluded from investing and financing activities and     
disclosed elsewhere in the consolidated financial statements in a manner that   
provides all relevant information about investing and financing activities. The 
standard requires retroactive application with prior comparative information    
being restated.                                                                 

                                                        [Enlarge/Download Table]

                                                                         2000             1999             1998 
                                                                            $                $                $ 
                                                                                                                
Non-cash items                                                                                                  
Depreciation and amortisation                                                            8,282            6,952 
Share of loss of a company subject to significant influence                                 --               -- 
Non-controlling interest                                                                    --          (1,428) 
Gain on sale of long-term investments                                                 (24,181)               -- 
Deferred income taxes                                                                    (308)               -- 
Other                                                                                  (1,178)              755 
                                                             ---------------------------------------------------
                                                                                      (17,385)            6,279 

                                                                         2000             1999             1998 
                                                                            $                $                $ 
Changes in non-cash working capital items                                                                       
Accounts receivable                                                                   (22,673)         (13,269) 
Inventories                                                                              (924)            (868) 
Prepaid expenses                                                                         (637)          (1,114) 
Accounts payable and accrued liabilities, excluding                                     13,423            2,665 
construction-related accounts payable                                                                           
                                                              --------------------------------------------------
                                                                                      (10,811)         (12,586) 

Supplemental information                                                                                        
Income taxes paid                                                                        9,865            4,947 
Interest paid                                                                              468              661 

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17. Related party transactions                                                  

                                                                [Download Table]

                                                 2000     1999     1998
                                                    $        $        $
                                                                       
Transactions with a shareholder are as follows:                        
Royalty revenue                                        172,588  153,500
Interest expense on promissory note                      2,610       --

The company incurred professional fees with law firms, in which certain of the  
company's directors are partners, totalling $330,000 for the year ended 31      
December 1999 ($988,000 for the year ended 31 December 1998).                   

These transactions were concluded in the normal course of operations, at the    
exchange amount.                                                                

In 1998, the company repurchased the common shares of a subsidiary held by a    
company shareholder for an amount of $16,025,000. Goodwill arising from the     
transaction amounted to $6,631,000. In 1997, this shareholder subscribed to     
common shares of the subsidiary for an amount of $2,650,000.                    

18. Commitments and contingencies                                               

The company has undertaken to subscribe to an interest in companies and a       
partnership for amounts totalling $48,169,000. As at 31 December 1999, an amount
of $31,932,000 has been acquired.                                               

In 1996, a legal proceeding was instituted in the United States against the     
company and Glaxo Wellcome for alleged patent infringement on a product licenced
to Glaxo Wellcome. The action seeks monetary damages relating to the sale of the
product in the United States. In the opinion of management, the claim is without
merit and the company is vigorously opposing the allegation. In addition, the   
company is involved in other claims and lawsuits in the normal course of        
business. It is not possible at this time to determine the ultimate outcome of  
any of these claims.                                                            

19. Uncertainty due to the Year 2000 issue                                      

The Year 2000 issue arises because many computerized systems use two digits     
rather than four to identify a year. Date-sensitive systems may recognize the   
Year 2000 as 1900 or some other date, resulting in errors when information using
Year 2000 dates is processed. In addition, similar problems may arise in some   
systems which use certain dates in 1999 to represent something other than a     
date. The effects of the Year 2000 issue may be experienced before, on, or after
1 January 2000, and, if not addressed, the impact on operations and financial   
reporting may range from minor errors to significant systems failure which could
affect an entity's ability to conduct normal business operations. It is not     
possible to be certain that all aspects of the Year 2000 issue affecting the    
company, including those related to the efforts of customers, suppliers, or     
other third parties, will be fully resolved.                                    

20. Segmented information                                                       

The company has two reportable segments: therapeutics and vaccines. The         
therapeutic segment focuses mainly on conducting research and development of new
medications for the treatment of cancer and infectious diseases. The vaccine    
segment specialises in the research and development, manufacturing and marketing
of innovative vaccines for the prevention of certain infectious diseases.       
Information about other operating segments that are not reportable is combined  
and disclosed in the category "Other". These segments mainly relate to head     
office operations. Where operating revenue is concerned, they include           
inter-segment revenues, interest income and certain other contract revenue. The 
accounting policies used for the various segments are the same as those         
described in the summary of significant accounting policies in note 2.          

Inter-segment transactions are concluded at the exchange amount and are not     
eliminated in presenting the revenues and expenses of each industry segment.    
These transactions include head office expenses, such as management fees,       
interest and certain operating costs allocated to the various segments.         

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Industry segments                                                               

The company operates in the following industry segments:                        

                                                        [Enlarge/Download Table]

                                                                       2000             1999             1998 
                                                                          $                $                $ 
                                                                                                              
Operating revenue (a)                                                                                         
Therapeutics                                                                         235,185          184,227 
Vaccines                                                                              35,706           26,795 
Other                                                                                 21,171           22,283 
                                                             -------------------------------------------------
                                                                                     292,062          233,305 
Inter-segment transactions relating to other segments                                (1,787)          (8,340) 
                                                             -------------------------------------------------
                                                                                     290,275          224,965 
Financial expenses                                                                                            

Therapeutics                                                                               7                5 
Vaccines                                                                                  97              900 
Other                                                                                  2,723              114 
                                                             -------------------------------------------------
                                                                                       2,827            1,019 
Inter-segment transactions                                                                 -            (815) 
Foreign exchange gain, including amortisation of deferred                                                     
foreign exchange gains and losses                                                    (3,745)            (318) 
                                                             -------------------------------------------------
                                                                                       (918)            (114) 
Depreciation and amortisation                                                                                 
Therapeutics                                                                           3,226            3,491 
Vaccines                                                                               4,160            2,635 
Other                                                                                    896              826 
                                                             -------------------------------------------------
                                                                                       8,282            6,952 
Income taxes                                                                                                  
Therapeutics                                                                          11,443            8,727 
Vaccines                                                                                 181              165 
Other                                                                                    467              587 
                                                             -------------------------------------------------
                                                                                      12,091            9,479 
Net income (loss)                                                                                             
Therapeutics                                                                         162,362          119,322 
Vaccines                                                                             (4,425)          (1,482) 
Share of loss of a company subject to significant influence                                -                - 
Other                                                                                  9,262               58 
                                                             -------------------------------------------------

Earnings from continuing operations                                                  167,199          117,898 
Earnings (loss) from discontinued operations                                        (18,097)          (3,124) 
                                                             -------------------------------------------------
                                                                                     149,102          114,774 
Total assets                                                                                                  
Therapeutics                                                                         248,664          210,324 
Vaccines                                                                             132,975           99,498 
Other                                                                                119,460          147,291 
                                                             -------------------------------------------------
                                                                                     501,099          457,113 
Assets from discontinued operations                                                  123,618          175,449 
                                                             -------------------------------------------------
                                                                                     624,717          632,562 
Capital expenditures                                                                                          
Therapeutics                                                                          12,518            9,049 
Vaccines                                                                              33,273            8,826 
Other                                                                                  1,737            1,226 
                                                             -------------------------------------------------
                                                                                      47,528           19,101 
Variation in construction-related accounts payable                                   (6,457)            2,947 
                                                             -------------------------------------------------
                                                                                      41,071           22,048 

                                                                              41

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Geographic segments                                                             

The company operates in the following geographic segments:                      

                                                                [Download Table]

                                      2000             1999             1998 
                                         $                $                $ 
                                                                             
Operating revenue                                                            
Canada                                               88,039           77,815 
United States                                       119,164           93,131 
Europe                                               55,479           56,512 
Other                                                97,924           73,133 
                            -------------------------------------------------
                                                    360,606          300,591 
Inter-segment transactions                         (70,331)         (75,626) 
                            -------------------------------------------------
                                                    290,275          224,965 
Capital assets                                                               
Canada                                              100,253           90,952 
United States                                        29,485            1,464 
Europe                                                1,064            3,003 
Other                                                 7,186            3,359 
                            -------------------------------------------------
                                                    137,988           98,778 
Goodwill                                                                     
Canada                                                6,705            7,049 

(a)   Operating revenue includes interest income totalling $593,000 in 1999     
     ($691,000 in 1998) for the therapeutic segment, nil in 1999 (nil in 1998)
   for the vaccine segment and $6,934,000 in 1999 ($9,178,000 in 1998) for
the other segments.                                                 

Information on the company's major client                                       

Operating revenue includes royalties of $172,588,000 in 1999 ($153,500,000 in   
1998) from a shareholder.                                                       

21. Financial instruments                                                       

Temporary investments                                                           

Temporary investments totalling $81,460,000 as at 31 December 1999 ($120,295,000
as at 31 December 1998) include bank term deposits and commercial paper which   
have original maturities of three months or more. The company has classified    
temporary investments as held to maturity and has recorded these investments at 
cost.                                                                           

Foreign exchange risk                                                           

Foreign exchange risk is the risk that variations in exchange rates between the 
Canadian dollar and foreign currencies will affect the company's operating and  
financial results. The company earns a significant portion of its operating     
revenues in US dollars and British pounds and does not use derivative           
instruments to reduce its exposure to this foreign exchange risk.               

The company has entered into a forward exchange contract which acts as a hedge  
to effectively fix the amount of Canadian dollars required to repay the         
US$80,000,000 promissory note from a shareholder, which is repayable on 19      
January, 2001, at an exchange rate of 1.4630. Any unrealised gains or losses on 
the forward exchange contract are offset by unrealised gains and losses on the  
US dollar-denominated promissory note. As at 31 December 1999, the amount of    
unrealised loss on this forward exchange contract was $1,576,000.               

Fair value of financial instruments                                             

The company uses the following methods and assumptions to estimate the fair     
value of each class of financial instruments:                                   

Cash and cash equivalents, temporary investments, bank indebtedness, accounts   
receivable, accounts payable and accrued liabilities                            

The carrying amounts approximate fair value due to the short-term maturity of   
these instruments.                                                              

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Long-term investments in private companies                                      

The fair value of the investments in private companies is not readily           
determinable because these investments are not publicly traded.                 

Shares of public companies                                                      

The fair value of the shares of public companies is established based on the    
closing market price as at the balance sheet date. As at 31 December 1999, the  
fair value of these shares amounted to $9,301,000 ($4,406,000 as at 31 December 
1998).                                                                          

Long-term debt                                                                  

The fair value is estimated using discounted cash flow analyses, based on the   
company's current incremental borrowing rates for similar types of arrangements.
There is no material difference between the carrying value and the fair value of
the long-term debt.                                                             

22. Summary of differences between generally accepted accounting principles in  
Canada and in the United States                                                 

The consolidated financial statements have been prepared in accordance with     
generally accepted accounting principles (GAAP) in Canada which differ in       
certain respects from US GAAP. Had the company followed US GAAP, certain items  
on the consolidated balance sheets would have increased (decreased) as follows: 

Consolidated balance sheets                                                     

                                                                [Download Table]

                                                         2000     1999     1998 
                                                            $        $        $ 

                                                                                
Long-term investments (a) (b)                                  (7,151)   (4,659)
Other assets                                                                    
Deferred charges (c)                                           (4,648)        --
Deferred foreign exchange losses (d)                             (722)     (128)
Non-current assets of discontinued operations (f)                   --     (347)
Shareholders' equity                                                            
Retained earnings                                              (9,863)       226
Foreign currency translation adjustment (g)                      (701)     (701)
                                                                   880  (13,543)
Other cumulative components of comprehensive income (k)                         
Unrealised investment losses (a)                               (1,957)   (4,659)
Foreign currency translation adjustment                          (880)    13,543

In addition, the net income (loss) and the earnings (loss) per common share in  
the United States are as follows:                                               

Consolidated statements of earnings                                             

                                                        [Enlarge/Download Table]

                                                                          2000         1999         1998 
                                                                             $            $            $ 

                                                                                                         
Earnings from continuing operations according to Canadian GAAP                      167,199      117,898 
Share of loss in a company subject to significant influence (b)                     (5,194)           -- 
Deferred charges (c)                                                                (4,648)           -- 
Deferred foreign exchange losses (d)                                                  (594)        (128) 
Loss on disposal of a long-term investment (h)                                          --     (126,069) 
                                                                    -------------------------------------
Earnings (loss) from continuing operations per US GAAP                              156,763      (8,299) 
Earnings (loss) from discontinued operations according to Canadian                                       
GAAP                                                                                (18,097)      (3,124)
Adjustment to earnings (loss) from discontinued operations (f)                          347        1,360 
                                                                    -------------------------------------
Loss from discontinued operations per US GAAP                                      (17,750)      (1,764) 
                                                                    -------------------------------------
Net income (loss) per US GAAP                                                       139,013     (10,063) 

                                                                              43

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                                                                [Download Table]

                                                                
Earnings (loss) per common share per US GAAP (i)                
Basic                                                           
Continuing operations                               1.49  (0.08)
Discontinued operations                           (0.17)  (0.01)
Net income                                          1.32  (0.09)
   Diluted                                                      
Continuing operations                               1.49  (0.08)
Discontinued operations                           (0.17)  (0.01)
Net income                                          1.32  (0.09)

(a) Long-term investments                                                       

Under Canadian GAAP, investments in shares of public companies and debt         
securities, excluding the investment in the common shares of a company subject  
to significant influence, should be recorded at cost, less any decrease in value
other than a temporary decline. Under US GAAP, the company would be required to 
record some of these investments at fair value and would have presented the     
unrealised gains or losses as a component of comprehensive income in the        
shareholders' equity. The cost of these investments amounts to $24,248,000 as at
31 December 1999 ($22,865,000 as at 31 December 1998) and the fair value amounts
to $22,291,000 as at 31 December 1999 ($18,206,000 as at 31 December1998).      

(b) Share of loss in a company subject to significant influence                 

Under US GAAP, the total investment in NAVA would be reduced by $5,194,000 in   
accordance with the new requirements of the Emerging Issues Task Force on       
accounting by an equity method investor for investee losses when the investor   
has loans to and investments in other securities of the investee.               

(c) Deferred charges                                                            

In 1998, the AICPA issued Statement of Position 98-5, "Reporting on the Costs of
Start-Up Activities" ("SOP 98-5"), that should be applied in 1999. SOP 98-5     
states that the costs of start-up activities should be expensed as incurred.    
Pursuant to SOP 98-5, the company has written off the unamortised deferred      
charges which consist primarily of start-up activity costs. This was treated as 
a change in accounting principle.                                               

(d) Deferred foreign exchange losses                                            

Under Canadian GAAP, unrealised foreign exchange gains and losses arising on the
translation of long-term monetary items are deferred and amortised over the life
of the item. Under US GAAP, these gains or losses would be included in earnings 
as they arise. The deferred foreign exchange losses on the balance sheet        
amounting to $722,000 and $128,000 as at 31 December 1999 and 1998 respectively 
would have been eliminated. Accordingly, a foreign exchange loss amounting to   
$594,000 and $128,000 would have been recognised in earnings for the years ended
31 December 1999 and 1998 respectively.                                         

(e) Income taxes                                                                

Under US GAAP, deferred tax assets or liabilities would be recorded for         
temporary differences that will result in deductible amounts or taxable amounts 
in future years as well as for loss carry forwards and deferred investment tax  
credits. A valuation allowance would be recorded for the portion of the asset   
considered unrealisable. In addition, the deferred tax asset or liability must  
be calculated at the current rate disclosed by government authorities. The tax  
consequences calculated on the differences between the carrying amount and the  
value for tax purposes of the assets and liabilities are as follows:            

                                                        [Enlarge/Download Table]

                                                                  2000             1999             1998 
                                                                     $                $                $ 
                                                                                                         
Deferred income taxes - asset                                                                            
Research and development expenses and operating losses                           38,023           27,181 
Investment tax credits                                                           12,400           14,200 
Temporary differences on investments                                             55,346           49,640 
                                                        -------------------------------------------------
                                                                                105,769           91,021 
Valuation allowance                                                           (105,461)         (91,021) 
                                                        -------------------------------------------------
Deferred income taxes - asset                                                       308               -- 

The deferred income tax asset in the amount of $308,000 as of 31 December 1999  
has been recorded in the consolidated financial statements under Canadian GAAP. 

                                                                              44

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Under US GAAP, the amounts applicable to domestic and foreign income taxes would
be disclosed separately and comprise the following:                             

                                                                [Download Table]

                             2000             1999             1998 
                                $                $                $ 

                                                                    
Current: Canada                                606              748 
         Foreign                            11,793            8,731 
Deferred: Canada                                --               -- 
          Foreign                             (308)              -- 
                   -------------------------------------------------
                                            12,091            9,479 

(f) Discontinued operations                                                     

For discontinued operations, the same principles as described in (d) for        
deferred foreign exchange losses would apply under US GAAP. The impact on       
earnings from discontinued operations, net of income taxes, would be an increase
of $347,000 in 1999 and $1,360,000 in 1998.                                     

(g) Realization of foreign currency translation adjustment                      

Under Canadian GAAP, a portion of the foreign currency translation adjustment is
recognised in earnings on repatriation of capital from foreign operations. Under
US GAAP, adjustments to the foreign currency translation adjustment are only    
made if there is a reduction in ownership to a third party.                     

(h) Loss on disposal of a long-term investment                                  

Under US GAAP, the distribution of CliniChem's Class A shares amounting to      
$150,000,000 would be reduced by $126,069,000 and an equivalent loss on disposal
of a long-term investment would be recorded.                                    

(i) Earnings per share                                                          

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 US 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.                                        

(j) Earnings before depreciation, amortisation and other                        

US GAAP does not permit the disclosure of a subtotal for earnings before        
depreciation, amortisation and other. Canadian GAAP permits the disclosure of   
this subtotal.                                                                  

(k) Comprehensive income                                                        

Under US GAAP, unrealized gains or losses on investments and the change in the  
foreign currency translation adjustment are added to net earnings for the year  
to determine comprehensive income. In addition, these two items are presented as
other components of comprehensive income under shareholders' equity. The changes
in comprehensive income are as follows:                                         

                                                        [Enlarge/Download Table]

                                                              2000             1999             1998 
                                                                 $                $                $ 

                                                                                                     
Net earnings (loss) per US GAAP                                             139,013         (10,063) 
Unrealised gains (losses) on long-term investments                            2,702          (3,234) 
Foreign currency translation adjustment                                    (14,423)           11,845 
                                                    -------------------------------------------------
Consolidated comprehensive income                                           127,292          (1,452) 

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Consolidated statements of cash flows                                           

o Under US GAAP, the distribution of the CliniChem Class A shares amounting to  
$150,000,000 shown as a financing activity in 1998 would be reduced by          
$126,069,000 and cash flow from operations would be reduced by the same amount. 

o Canadian GAAP allows for the presentation of operating cash flow before       
changes in non-cash working capital items in the consolidated statements of cash
flows. Pre-acquisition free cash flow can also be disclosed. These totals cannot
be presented under US GAAP.                                                     

Accounting for compensation programs                                            

The company measures compensation costs related to awards of stock options using
the intrinsic value-based method of accounting. Under US GAAP, the company is   
required to make pro forma disclosure of net income (loss), as if the fair      
value-based method of accounting had been applied. The fair value of options    
granted was estimated using the Black-Scholes option-pricing model with an      
expected life of 7.5 years, a risk-free interest rate of 5.15per cent. in 1999  
(5.4per cent. in 1998) and an expected volatility of 50per cent. in 1999 (45per 
cent. in 1998). The expected dividends for 1999 and 1998 are nil.               

The company's net income (loss), earnings (loss) per share and diluted earnings 
(loss) per share would have increased (decreased) for the years ended 31        
December 1999 and 1998, on a pro forma basis, as follows:                       

                                                                [Download Table]

                                             2000   1999      1998
                                                $      $         $

                                                                  
Net income (loss) pro forma                        9,415  (14,715)
Earnings (loss) per share pro forma                 0.09    (0.14)
Diluted earnings (loss) per share pro forma         0.09    (0.13)

The weighted average fair value of options granted in 1999 was $22.91 ($18.18 in
1998).                                                                          

Accounting pronouncements not yet implemented                                   

In 1997, the Canadian Institute of Chartered Accountants issued a new accounting
standard concerning accounting for income taxes. The company is required to     
adopt this standard for Canadian GAAP reporting purposes for the fiscal year    
beginning with 2000.                                                            

The Financial Accounting Standards Board has issued Statement of Financial      
Standard Board No. 133 dealing with hedging instruments. This standard should be
adopted for fiscal years commencing after 15 June 2000.                         

The company has not yet determined the potential impact of these statements.    

                                                                              46

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 PART IV - RECONCILIATIONS OF BIOCHEM'S FIGURES TO US AND UK GAAP AS APPLIED
BY SHIRE

Unaudited reconciliation of financial information under US and UK GAAP          

Accounting policies generally accepted in the US and UK differ in certain       
material respects for those generally accepted in Canada. The differences which 
are material to restating the historical financial statements of BioChem to     
conform with Shire's accounting policies under US and UK GAAP are set out below.

[AA to provide]                                                                 

                                                                              47

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The Directors and Proposed Directors                            Arthur Andersen 
Shire Pharmaceuticals Group plc                                    Abbots House 
East Anton                                                         Abbey Street 
Andover                                                                 Reading 
Hampshire                                                               RG1 3BD 
SP10 5RG                                                                        

The Directors                                                                   
Deutsche Bank AG London                                                         
Winchester House                                                                
1 Great Winchester Street                                                       
London                                                                          
EC2N 2DB                                                                o, 2001 

Dear Sirs                                                                       

We report on the unaudited reconciliations to US and UK GAAP as applied by Shire
Pharmaceuticals Group plc of the consolidated statements of net assets and      
shareholders equity as at 31 December 2000, 1999 and 1998 and the consolidated  
net loss or profit for each of the three financial years then ended of BioChem  
Pharma Inc. ("BioChem") and its subsidiaries ("the unaudited reconciliations")  
prepared on the basis of the accounting policies of Shire Pharmaceuticals Group 
plc set out on pages o to o of the Listing Particulars dated o, 2001 issued by  
Shire Pharmaceuticals Group plc.                                                

Responsibilities                                                                

It is the responsibility solely of the Directors of Shire Pharmaceuticals Group 
plc to prepare the unaudited reconciliations of BioChem in accordance with      
paragraph 12.11 of the Listing Rules of the United Kingdom Listing Authority    
("the Listing Rules"). It is our responsibility to form an opinion, as required 
by the Listing Rules, on the unaudited reconciliations of BioChem and to report 
our opinion to you.                                                             

The unaudited reconciliations of BioChem incorporates significant               
reclassifications of and adjustments to the historical financial statements of  
the unaudited reconciliations of BioChem. The historical financial statements of
BioChem for each of the three years ended 31 December 2000 state that they were 
prepared in accordance with Canadian GAAP and were audited by Raymond Chabot    
Grant Thornton, who gave unqualified reports thereon. We do not accept any      
responsibility for the historical financial statements of BioChem.              

Basis of Opinion                                                                

We conducted our work in accordance with the Statements of Investment Circular  
Reporting Standards issued by the Auditing Practices Board. Our work, which was 
substantially less in scope than an audit and involved no independent           
examination of any of the underlying financial information, consisted primarily 
of making enquiries of the management of BioChem and its auditors to establish  
the accounting policies which were applied in the preparation of the underlying 
financial information, considering the evidence supporting the reclassifications
and adjustments made and discussing the unaudited reconciliations of BioChem    
with the Directors of Shire Pharmaceuticals Group plc.                          

Our work has not been carried out in accordance with auditing standards         
generally accepted in [Canada/the United States of America] and accordingly     
should not be relied upon as if it had been carried out in accordance with those
standards.                                                                      

Opinion                                                                         

In our opinion:                                                                 

1. the unaudited reconciliations of BioChem have been properly compiled on the  
basis stated; and                                                               
2. the adjustments are appropriate for the purpose of presenting the unaudited  
reconciliations of BioChem on a basis consistent in all material respects with  
the accounting policies of Shire Pharmaceuticals Group plc.                     

Yours faithfully                                                                

Arthur Andersen                                                                 
Chartered Accountants                                                           

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 PART V - FINANCIAL INFORMATION ON SHIRE

The financial information contained in these comparative tables does not        
constitute statutory accounts within the meaning of section 240 of the Companies
Act 1985. Statutory consolidated accounts of the Group for the financial periods
ended 31 December 1997, 1998 and 1999 received an unqualified audit opinion, did
not contain a statement under section 237(2) and (3) of the Companies Act 1985  
and have been delivered to the Registrar of Companies in England and Wales.     
Arthur Andersen, Chartered Accountants and Registered Auditors of Abbots House, 
Abbey Street, Reading, RG1 3BD have been auditors to the Company since its      
incorporation. No audited accounts of the Group have been prepared in respect of
any period subsequent to 31 December 1999.                                      

The following information is extracted without material adjustment from the     
audited consolidated financial statements of the Group for the [twelve months to
30 June 1997, six months to 31 December 1997] and twelve months to 31 December  
1998 and 31 December 1999.                                                      

 CONSOLIDATED STATEMENTS OF INCOME

 (in thousands of US dollars, except share and per share data)

                                                        [Enlarge/Download Table]

                                                                          1999             1998             1997 
                                                                                                                 
Revenues:                                                                                                        
Product sales                                                          385,203          291,785          168,916 
Licensing and development                                               10,772           11,821           20,130 
Royalties                                                                3,562            3,697            1,612 
Other revenues                                                           1,995            1,681              896 
-----------------------------------------------------------------------------------------------------------------
Total revenues                                                         401,532          308,984          191,554 
-----------------------------------------------------------------------------------------------------------------

Costs and expenses:                                                                                              
Cost of sales                                                           93,475           95,013           67,090 
Research and development                                                77,503           59,253           40,663 
Selling, general and administrative                                    171,386          131,702           86,555 
Other charges:                                                                                                   
In-process research and development                                         --               --           83,087 
Asset impairments and restructuring charges                             97,132               --               -- 
Merger transaction expenses                                             32,279               --               -- 
Loss/(profit) on sale of product rights                                  5,825            (220)               -- 
-----------------------------------------------------------------------------------------------------------------
Total operating expenses                                               477,600          285,748          277,395 
-----------------------------------------------------------------------------------------------------------------

Operating(loss)/income                                                (76,068)           23,236         (85,841) 
Interest income                                                          7,349            6,398            6,547 
Interest expense                                                       (9,742)          (6,511)            (964) 
Other (expenses)/income                                                  (475)              440          (2,474) 
Total other (expenses)/income                                          (2,868)              327            3,109 
--------------------------------------------------------------- --------------- ---------------- ----------------
(Loss)/income before income taxes                                     (78,936)           23,563         (82,732) 
--------------------------------------------------------------- --------------- ---------------- ----------------
Income taxes                                                          (16,062)          (2,991)          (1,420) 
-----------------------------------------------------------------------------------------------------------------
Net (loss)/income                                                     (94,998)           20,572         (84,152) 
-----------------------------------------------------------------------------------------------------------------
Net (loss)/income per share:                                                                                     
Basic                                                                 $ (0.39)          $  0.09         $ (0.45) 
Diluted                                                               $ (0.39)          $  0.08         $ (0.45) 
Weighted average number of shares:                                                                               
Basic                                                              244,698,721      234,044,732      185,153,065 
Diluted                                                            244,698,721      242,806,410      185,153,065 

                                                                              49

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 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands of US dollars)

                                                        [Enlarge/Download Table]

                                                                          1999             1998             1997 

                                                                                                                 
Net (loss)/income                                                     (94,998)           20,572         (84,152) 
Foreign currency translation adjustments                               (7,067)            (840)          (2,095) 
Unrealized holding (loss)/gain on marketable securities                  (411)               96              199 
-----------------------------------------------------------------------------------------------------------------
Comprehensive (loss)/income                                          (102,065)           19,732         (86,247) 
-----------------------------------------------------------------------------------------------------------------

There are no tax effects related to the items included above.                   

The accompanying notes are an integral part of these consolidated financial     
statements.                                                                     

 CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands of US dollars)

                                                        [Enlarge/Download Table]

                                                                          1999             1998             1997 
                                                                                                                 
Cash flows from operating activities:                                                                            
Net (loss)/income                                                     (94,998)           20,572         (84,152) 
Adjustments to reconcile net (loss)/income to net cash                                                           
 provided by operating activities:                                                                               
Depreciation and amortisation                                           28,598           25,249           12,309 
Stock option compensation                                               13,900            8,505            2,567 
Acquisition of in--process research and development                         --               --           83,087 
Non cash exchange gains and losses                                       (664)          (1,816)          (1,289) 
(Gain)/ loss on sale of fixed assets                                     (828)               16             (13) 
Loss on sale of intangible assets                                        5,825               --               -- 
Write--down of investment                                                7,546               --               -- 
Decrease/(increase) in accounts receivable                              17,012         (24,988)          (5,751) 
(Increase) in inventory                                                (6,543)          (5,170)          (4,657) 
Increase in accounts payable                                            37,083           12,186              511 
Reserve for restructuring charges                                       83,608               --               -- 
Carbatrol milestone payment                                                 --               --            8,000 
Impact of discontinued operations                                           --               --            (629) 
-----------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities                               90,539           34,554            9,983 
-----------------------------------------------------------------------------------------------------------------

Cash flows from investing activities:                                                                            
(Investment in)/redemption of marketable securities                    (7,940)            3,825         (32,094) 
Purchase of long--term investment                                           --         (10,000)               -- 
Deferred consideration                                                      --               --         (10,000) 
Purchase of subsidiary undertakings                                   (32,000)               --         (41,053) 
Expenses of acquisition                                                     --            (551)          (3,118) 
Net cash acquired with subsidiary undertakings                           1,979               --            6,759 
Purchase of intangible assets                                         (57,848)        (142,258)         (10,066) 
Purchase of fixed assets                                               (4,786)         (13,871)         (13,936) 
Proceeds from sale of intangible fixed assets                            6,575            1,033               -- 
Proceeds from sale of fixed assets                                       1,413               60               20 
Collection on notes receivable                                           7,195            1,751            6,738 
-----------------------------------------------------------------------------------------------------------------
Net cash used in investing activities                                 (85,412)        (160,011)         (96,750) 
-----------------------------------------------------------------------------------------------------------------

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                                                        [Enlarge/Download Table]
                                                                                                                 
Cash flows from financing activities:                                                                            
(Increase)/decrease in cash placed on short-term deposit               (4,677)         (35,664)           33,949 
Long term debt issued                                                       --          125,000               -- 
Payments on long term debt, capital leases and notes                  (11,499)         (11,708)          (7,410) 
Payment of debt issuance costs                                              --          (2,528)               -- 
Proceeds from issue of common stock, net                                 8,615           35,027           19,054 
Proceeds from exercise of options                                        3,523            4,082            1,016 
Proceeds from issue of preferred stock                                      --            4,494            6,000 
Cash dividends paid                                                         --            (150)          (1,629) 
-----------------------------------------------------------------------------------------------------------------
Net cash (used in)/provided by financing activities                    (4,038)          118,553           50,980 
-----------------------------------------------------------------------------------------------------------------

Effect of foreign exchange rate changes on cash and cash                    20                9            (401) 
equivalents                                                                                                      
Net increase/(decrease) in cash and cash equivalents                     1,109          (6,895)         (36,188) 

Cash and cash equivalents at beginning of period                        52,973           59,868           96,056 
Cash and cash equivalents at end of period                              54,082           52,973           59,868 

SUPPLEMENTAL CASH FLOW INFORMATION:                                                                              
Interest paid                                                           11,612            3,948              953 
Income taxes paid                                                       11,356            5,285            2,534 
Non cash activities:                                                                                             
Notes issued for product acquisitions                                   11,800               --            7,250 
Notes received for sale of product rights                                   --              218               -- 
Common stock issued for product acquisitions                                --           11,572               -- 
Common stock issued on conversion of zero-coupon note                       --           14,042               -- 
Common stock issued for acquisitions of subsidiaries                        --               --          259,000 
Debt assumed on acquisition of subsidiaries                              3,300               --               -- 
Capitalised leases                                                          --              131              256 

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 CONSOLIDATED BALANCE SHEETS

 (in thousands of US dollars, except share and per share data)

                                                        [Enlarge/Download Table]

                                                                                           1999             1998 
                                                                                                                 
ASSETS                                                                                                           
Current assets:                                                                                                  
Cash and cash equivalents                                                                54,082           52,973 
Marketable securities and other current asset investments                                84,344           71,726 
Accounts receivable, net                                                                 59,018           76,622 
Inventories, net                                                                         39,538           34,639 
Deferred tax asset                                                                        5,312            5,222 
Prepaid expenses and other current assets                                                 9,012            5,116 
-----------------------------------------------------------------------------------------------------------------
Total current assets                                                                    251,306          246,298 
-----------------------------------------------------------------------------------------------------------------

Investments                                                                               2,604           10,000 
Property, plant and equipment, net                                                       37,484           42,682 
Intangible assets, net                                                                  557,934                  
Deferred tax asset                                                                       31,799           32,632 
Other assets                                                                              6,636            4,834 
-----------------------------------------------------------------------------------------------------------------
Total assets                                                                            887,763          873,605 
-----------------------------------------------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY

                                                        [Enlarge/Download Table]

                                                                                           1999             1998 
                                                                                                                 
Current liabilitiesc                                                                                             
Current instalments of long-term debt                                                     9,608           12,351 
Accounts and notes payable                                                              114,509           54,896 
Other current liabilities                                                                48,703           14,041 
-----------------------------------------------------------------------------------------------------------------
Total current liabilities                                                               172,820           81,288 
-----------------------------------------------------------------------------------------------------------------
                                 Long-term debt, excluding current instalments          126,314          126,774 
                                                   Other long-term liabilities            1,345            2,229 
-----------------------------------------------------------------------------------------------------------------
                                                             Total liabilities          300,479          210,291 
-----------------------------------------------------------------------------------------------------------------

                                                         Shareholders' equity:                                   
Common stock, 5p par value; 400,000,000 shares authorised                                20,063           11,725 
  (1998: 200,000,000); and 244,519,024 shares issued and                                                         
                                               outstanding (1998: 141,092,395)                                   
                                                    Additional paid-in capital          832,650          814,953 
                               Accumulated other comprehensive income/(losses)         (10,303)          (3,236) 
                                                           Accumulated deficit        (255,126)        (160,128) 
-----------------------------------------------------------------------------------------------------------------
                                                    Total shareholders' equity          587,284          663,314 
-----------------------------------------------------------------------------------------------------------------

                                    Total liabilities and shareholders' equity          887,763          873,605 

The accompanying notes are an integral part of these consolidated financial     
statements.                                                                     

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(in thousands of US dollars)

Accumulated                                                                     

                                                        [Enlarge/Download Table]

------------------------------------------------------------------------------------------------------------------------------------
                                    Common Stock                                                                                    
                               Amount     Shares   Additional      Accumulated      Accumulated            Total                    
                                                      paid-in          deficit            other    shareholders'                    
                                                      capital                     comprehensive           equity                    
                                                                                         income                                     
                                                                                       (losses)                                     
                                                                                                                                    
BALANCES AS OF                 10,345    124,531      738,637        (180,666)          (2,396)          565,920                    
31 DECEMBER, 1997                                                                                                                   

     Net income                    --         --           --           20,572               --           20,572                    
Dividends paid by pooled           --         --           --             (34)               --             (34)                    
entity                                                                                                                              
Foreign currency                   --         --           --               --            (840)            (840)                    
translation                                                                                                                         
Issuance of common stock          905     10,861       57,105               --               --           58,010                    
Issuance of common and             --         --        9,220               --               --            9,220                    
preferred stock by pooled                                                                                                           
entity                                                                                                                              
Issuance costs                     --         --      (2,124)               --               --          (2,124)                    
Options exercised                 475      5,700        3,610               --               --            4,085                    
Stock option compensation          --         --        5,499               --               --            5,499                    
Tax benefit associated             --         --        3,006               --               --            3,006                    
with exercise of stock                                                                                                              
options                                                                                                                             
-----------------------------------------------------------------------------------------------------------------                   
BALANCES AS OF                 11,725    141,092      814,953        (160,128)          (3,236)          663,314                    
31 DECEMBER, 1998                                                                                                                   

-----------------------------------------------------------------------------------------------------------------                   
Net loss                           --         --           --         (94,998)               --         (94,998)                    
Foreign currency                   --         --           --               --          (7,067)          (7,067)                    
translation                                                                                                                         
Issuance of common stock        8,123    100,767      (8,123)               --               --               --                    
for acquisitions                                                                                                                    
Issuance of common and             --         --        8,613               --               --            8,613                    
preferred stock by pooled                                                                                                           
entity                                                                                                                              
Options exercised                 215      2,660        3,308               --               --               --                    
Stock option compensation          --     11,932           --               --               --           11,932                    
Tax benefit associated             --         --        1,967               --               --            1,967                    
with exercise of stock                                                                                                              
options                                                                                                                             
-----------------------------------------------------------------------------------------------------------------                   
BALANCES AS OF                 20,063    244,519      832,650        (255,126)         (10,303)          587,284                    
31 DECEMBER, 1999                                                                                                                   

-----------------------------------------------------------------------------------------------------------------                   

The accompanying notes are an integral part of these consolidated financial     
statements.                                                                     

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Notes to consolidated financial statements

1. Summary of significant accounting policies                                   

(a) Description of operations and principles of consolidation                   

Shire Pharmaceuticals Group plc is an international specialty pharmaceutical    
company with a strategic focus on four therapeutic areas: central nervous system
disorders, metabolic diseases, cancer and gastrointestinal disorders. The       
Company's principal products include Adderall, for the treatment of Attention   
Deficit Hyperactivity Disorder, and Pentasa, for the treatment of ulcerative    
colitis.                                                                        

The Group has operations in the United States, Europe and the rest of the world.
Within these geographic operating segments, revenues are derived from three     
sources: sales of products by the Company's own sales and marketing operations, 
licensing and development fees, and royalties.                                  

The accompanying consolidated financial statements include the accounts of Shire
Pharmaceuticals Group plc and all its subsidiary undertakings after elimination 
of intercompany accounts and transactions.                                      

(b) Use of estimates in financial statements                                    

The preparation of financial statements in conformity with generally accepted   
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of         
contingent assets and liabilities at the date of the financial statements and   
reported amounts of revenues and expenses during the reporting period. Actual   
results could differ from those estimates.                                      

(c) Revenue recognition                                                         

Product sales are recognised upon shipment of products. Reserves for product    
returns are established on an accruals basis at the time revenue for product    
sales is recognised.                                                            

Licencing and development fees represent revenues derived from licence          
agreements and from collaborative research and development arrangements.        
Licensing fees are recognised upon transfer or licensing of intellectual        
property rights. Development fee revenue relates to ongoing research and        
development in connection with licenced technology. Revenue in respect of       
research and development performed on a cost plus or fixed percentage of cost   
basis is recognised as research and development work is performed. The total    
cost of research and development work performed is based on accrued project     
costs, including employee related expenses determined according to actual hours 
worked. Where collaborative research and development arrangements stipulate     
payment on a milestone basis, revenue is recognised upon achievement of those   
milestones.                                                                     

Royalty revenue relating to licenced technology is recognised when receivable.  

Revenues are stated net of value added tax and similar taxes, trade discounts   
and intercompany transactions.                                                  

No revenue is recognised for consideration, the value or receipt of which is    
dependent on future events, future performance, or refund obligations.          

(d) Research and development                                                    

Research and development expenditures include funded and unfunded expenditure   
and are charged to operations in the period in which the expense is incurred.   
Milestones payable in respect of research and development work are charged to   
the income statement on achievement of those milestones.                        

(e) Leased assets                                                               

The cost of operating leases is charged to operations on a straight line basis  
over the lease term, even if rental payments are not made on such a basis.      

Assets acquired under finance leases are included in the balance sheet as       
tangible fixed assets and are depreciated over the shorter of the period of     
lease or their useful lives. The capital elements of future lease payments are  
recorded as liabilities, while the interest elements are charged to the income  
statement over the period of the leases to give a constant charge on the balance
of the capital repayments outstanding.                                          

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(f) Pensions                                                                    

The Group contributes to personal defined contribution pension plans of         
employees. Contributions are charged to the income statement as they become     
payable. Details of the Supplemental Executive Retirement Plan operated by the  
Group are given in Note 22.                                                     

(g) Finance costs of debt                                                       

Finance costs of debt are recorded as a deferred asset and then amortised to the
income statement over the term of the debt at a constant rate on the carrying   
amount. Deferred financing costs relating to debt terminated early are written  
off to the income statement in that period.                                     

(h) Income taxes                                                                

The Company provides for income taxes in accordance with SFAS No.109, Accounting
for Income Taxes. Deferred tax assets and liabilities are provided for          
differences between the financial statement and tax bases of assets and         
liabilities that will result in future taxable or deductible amounts. The       
deferred tax assets and liabilities are measured using the enacted tax laws and 
rates applicable to the periods in which the differences are expected to affect 
taxable income. Income tax expense is computed as the tax payable or refundable 
for the period plus or minus the change during the period in deferred tax assets
and liabilities.                                                                

Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the deferred 
tax assets will not be realised.                                                

(i) Advertising expense                                                         

The Company expenses the cost of advertising as incurred. Advertising costs     
amounted to $6,646,000, $6,715,000 and $5,284,000 for the years ended 31        
December 1999, 1998 and 1997 respectively.                                      

(j) Foreign currency                                                            

Monetary assets and liabilities in foreign currencies are translated into US    
dollars at the rate of exchange ruling at the balance sheet date.               

Transactions in foreign currencies are translated into US dollars at the rate of
exchange ruling at the date of the transaction. Exchange differences are taken  
into account in arriving at operating income.                                   

The results of overseas operations are translated at the average rates of       
exchange during the period and their balance sheets at the rates ruling at the  
balance sheet date. The cumulative effect of exchange rate movements is included
in a separate component of other comprehensive income.                          

The consolidated financial statements are prepared from records maintained in   
the country in which the subsidiary is located and are translated into US       
dollars according to the above policy.                                          

Foreign currency transaction gains and losses on an after-tax basis included in 
consolidated net income in the years ended 31 December 1999, 1998, and 1997,    
pursuant to Statement of Financial Accounting Standards (SFAS) No. 52, Foreign  
Currency Translation, amounted to $880,000 loss, $457,000 gain and $106,000     
loss, respectively.                                                             

(k) Employee stock plans                                                        

The Company accounts for stock options in accordance with the provisions of     
Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued
to Employees", and related interpretations.                                     

(l) Cash equivalents and marketable securities                                  

Cash and cash equivalents include cash in banks and bank short-term investments 
with original maturities of less than ninety days. Marketable securities        
classified as available for sale consist primarily of debt instruments with     
maturities of more than three months. They are marked to market at each balance 
sheet date, with gains and losses recorded in a separate component of other     
comprehensive income. Other than temporary impairments in value are recorded    
through the income statement.                                                   

(m) Inventories                                                                 

Inventories, consisting primarily of finished goods, are stated at the lower of 
cost and net realisable value. Cost incurred in bringing each product to its    
present location and condition is based on purchase costs calculated on a       

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first-in, first-out basis, including transport. Net realisable value is based on
estimated normal selling price less further costs expected to be incurred to    
completion and disposal. Provision is made for obsolete, slow moving or         
defective items where appropriate.                                              

(n) Investments                                                                 

Investments which are accounted for under the cost method are stated at cost,   
less provisions for other than temporary impairment in value. Impairment is     
assessed by reference to the fair value of the securities as determined using   
established financial methodologies. The fair value of investments in private   
entities and non-traded securities of public entities are measured by valuation 
methodologies including discounted cash flows.                                  

(o) Intangible assets                                                           

Intangible assets comprise goodwill and intellectual property rights. Goodwill  
arising on the acquisition of subsidiary undertakings and businesses,           
representing any excess of the fair value of the consideration given over the   
fair value of the identifiable assets and liabilities acquired, is capitalised  
and written off on a straight line basis over its useful economic life.         

Goodwill recognised in each significant business combination is being amortised 
over a period of 5 to 30 years on a straight line basis depending on the nature 
of the goodwill, and is evaluated periodically for realisability based on       
expectations of undiscounted cash flows for each subsidiary having a material   
goodwill balance.                                                               

The following factors are considered in estimating the useful lives. Where an   
intangible asset is a composite of a number of factors, the period of           
amortisation is determined from considering these factors together:             

-     regulatory and legal provisions, including the regulatory approval and    
review process, patent issues and actions by government agencies    

-     the effects of obsolescence, changes in demand, competing products and    
     other economic factors, including the development of competing drugs that
are more effective clinically or economically                       

-     actions of competitors, suppliers, regulatory agencies or others that may 
eliminate current competitive advantages                            

Impairments to goodwill are recognised if expected undiscounted cash flows are  
not sufficient to recover the goodwill. If a material impairment is identified, 
goodwill is written down to its fair value. Fair value is determined based on   
the present value of expected net cash flows to be generated by the business,   
discounted using a rate commensurate with the risks involved.                   

Intellectual property, including trademarks for products with an immediate      
defined revenue stream and acquired for valuable consideration, is recorded at  
cost and amortised in equal annual instalments over the estimated useful life of
the related product which range from 5 to 40 years. Intellectual property with  
no defined revenue stream where the related product has not yet completed the   
necessary approval process is written off on acquisition. Amounts recorded as   
intangible assets are reviewed for impairment on a periodic basis using expected
undiscounted cash flows.                                                        

Continuing milestone payments on intellectual property with no defined revenue  
stream are charged to operations. Royalty payments due on sales of products are 
charged to operations when a liability has been incurred.                       

(p) Property, plant and equipment                                               

Property, plant and equipment is shown at cost less accumulated depreciation and
any provision for impairment. Depreciation is provided on a straight line basis 
at rates calculated to write off the cost less estimated residual value of each 
asset over its estimated useful life as follows:                                

Land and buildings                                     50 years                 
Office furniture, fittings and equipment               4 to 5 years             
Warehouse, laboratory and manufacturing equipment      4 to 5 years             

Expenditures for maintenance and repairs are charged to expense as incurred;    
costs of major renewals and improvements are capitalised. At the time property, 
plant and equipment are retired or otherwise disposed of,                       

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the cost and accumulated depreciation are eliminated from the asset and         
accumulated depreciation accounts and the profit or loss on such disposition is 
reflected in income.                                                            

(q) Concentration of credit risk                                                

Revenues are mainly derived from agreements with major pharmaceutical companies 
and relationships with drug distributors. Such clients have significant cash    
resources and therefore any credit risk associated with these transactions is   
considered minimal.                                                             

Excess cash is invested in bank and building society term deposits and          
commercial paper from a variety of companies with strong credit ratings. These  
investments typically bear minimal risk.                                        

(r) Related parties                                                             

Transactions with related parties are conducted on the same basis as they would 
have been with unrelated parties.                                               

Transactions between Group companies have not been disclosed since Group        
accounts are prepared and include the results of all subsidiary undertakings.   

(s) New accounting pronouncements                                               

In June 1998, the FASB issued Statement No. 133, Accounting for Derivative      
Instruments and Hedging Activities. This Statement requires that all derivatives
be recorded in the balance sheet as either an asset or liability measured at its
fair value and that changes in the derivative's fair value be recognised        
currently in earnings unless specific hedge accounting criteria are met. In June
1999, the FASB issued SFAS No. 137, Accounting for Derivative Instruments and   
Hedging Activities--Deferral of the Effective Date of FASB Statement No. 133.   
This Statement defers for one year the effective date of SFAS 133 to all fiscal 
quarters of all fiscal years beginning after 15 June 2000. The Company has not  
yet determined the future impact of this statement on its consolidated financial
statements.                                                                     

2. Business combinations and reorganisations                                    

YEAR ENDED 31 DECEMBER,1999                                                     

(a)   Acquisition of Laboratoires Murat S.A., Fuisz Pharma GmbH & Co KG and     
Istoria Farmaceutici S.p.A.                                         

On 22 October, 1999, Shire completed the acquisition of all the assets and      
liabilities of Laboratoires Murat S.A., Fuisz Pharma GmbH and the Cebutid       
trademark for $33 million, including the costs of acquisition. The purchase     
price consisted of $29.7 million in cash and the assumption of $3.3 million in  
debt.                                                                           

On 17 November, 1999, Shire completed the acquisition of all the assets and     
liabilities of Istoria Farmaceutici S.p.A. for $6.5 million, including the costs
of acquisition. The purchase consideration was $6.5 million in cash.            

The above transactions have provided Shire with marketing and distribution      
operations in France, Germany and Italy respectively. Shire has accounted for   
the acquisitions using purchase accounting. Total goodwill of $22.4 million will
be amortised over a period of 20 years, the expected economic life of the       
underlying assets acquired, on a straight line basis and periodically reviewed  
for impairment in accordance with the Company's accounting policy for purchased 
goodwill. The results of operations of these acquired companies have been       
included in the consolidated results of the Company since their respective dates
of acquisition.                                                                 

The purchase price of $3.3 million for Laboratoires Murat S.A. was allocated as 
follows:                                                                        

                                                                         $'000

Property, plant and equipment                                               19  
Intangible assets                                                        1,073  
Current assets                                                           1,614  
Accounts payable                                                        (1,292) 
--------------------------------------------------------------------------------
Net assets acquired                                                      1,414  
--------------------------------------------------------------------------------
Goodwill                                                                 1,886  
--------------------------------------------------------------------------------
Purchase consideration                                                   3,300  
--------------------------------------------------------------------------------

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$7.5 million was in respect of the Cebutid trademark.                           

The purchase price of $22.2 million for Fuisz Pharma GmbH was allocated as      
follows:                                                                        

                                                                         $'000
Property, plant and equipment                                                23 
Intangible assets                                                         3,331 
Current assets                                                            1,891 
Accounts payable                                                        (1,108) 
--------------------------------------------------------------------------------
Net assets acquired                                                       4,137 
--------------------------------------------------------------------------------
Goodwill                                                                 18,063 
--------------------------------------------------------------------------------
Purchase consideration                                                   22,200 
--------------------------------------------------------------------------------

The purchase price of $6.5 million for Istoria Farmaceutici S.p.A. was allocated
as follows:                                                                     

                                                                         $'000
Property, plant and equipment                                               166 
Intangible assets                                                         3,268 
Current assets                                                            1,515 
Accounts payable                                                          (897) 
--------------------------------------------------------------------------------
Net assets acquired                                                       4,052 
--------------------------------------------------------------------------------
Goodwill                                                                  2,448 
--------------------------------------------------------------------------------
Purchase consideration                                                    6,500 
--------------------------------------------------------------------------------

(b) Merger with Roberts Pharmaceutical Corporation                              

On 23 December 1999 the Company acquired 100per cent. of the outstanding stock  
of Roberts Pharmaceutical Corporation in exchange for 100,767,482 ordinary      
shares. Roberts Pharmaceutical Corporation is an international pharmaceutical   
company which licences, acquires, develops and commercialises post-discovery    
drugs in selected therapeutic categories.                                       

This transaction was accounted for by the pooling of interests method. Following
consummation of the transaction, the Company has decided to restructure the     
enlarged business and accordingly has recorded approximately $97.1 million in   
non-recurring asset impairment and restructuring charges.                       

The accompanying consolidated financial statements have been retroactively      
restated to reflect the combined operations of Roberts Pharmaceutical           
Corporation and Shire Pharmaceuticals Group plc as if the merger was consummated
on 1 January 1997.                                                              

(c) Dispositions                                                                

On 13 January 1999 Shire disposed of its Indianapolis manufacturing plant for a 
net consideration after expenses of $1.5 million including a loan note of $0.5  
million. The net gain of $0.8 million is included in results of operations.     

During November 1999, the Company sold the product Tigan for $6.4 million. The  
Company incurred a loss on disposal of $5.8 million, which is included within   
the results of operations.                                                      

(d) Pro forma information                                                       

The unaudited pro forma effect in 1999 and 1998 of significant acquisitions if  
acquired on 1 January 1999 and 1 January 1998 respectively would have resulted  
in revenues, income before extraordinary items, net income and per share data as
follows:                                                                        

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                                                      1999              1998
                                                     $'000             $'000

REVENUES                                             417,948           330,346  
(Loss)/income before extraordinary items            (95,463)            19,039  
Net (loss)/income                                   (95,463)            19,039  
Net (loss)/income per share--basic                 $  (0.39)            $ 0.08  
Net (loss)/income per share--diluted               $  (0.39)            $ 0.08  

YEAR ENDED 31 DECEMBER, 1998                                                    

There were no significant acquisitions or dispositions of businesses during the 
year ended 31 December 1998.                                                    

YEAR ENDED 31 DECEMBER, 1997                                                    

(a) Acquisition of Pharmavene, Inc.                                             

On 23 March 1997 Shire completed the acquisition of Pharmavene, Inc.            
("Pharmavene"), subsequently renamed Shire Laboratories, Inc., for approximately
$104 million, including the costs of acquisition. The purchase price consisted  
of $27.2 million in cash, the issue of $60.5 million in shares, the issue of    
$6.3 million in share options and contingent consideration of $10 million.      

In connection with the acquisition, each outstanding share of Pharmavene common 
stock was exchanged for Shire ordinary shares, resulting in the issuance of     
16,947,000 Shire ordinary shares valued at $60.5 million. Options granted by    
Pharmavene prior to the acquisition date were converted into options to acquire 
2,790,000 Shire ordinary shares. These options were valued in determination of  
the purchase price of Pharmavene at $6.3 million.                               

The contingent consideration was payable to the former shareholders of          
Pharmavene on approval of the drug Carbatrol by the F.D.A. On payment of the    
contingent consideration in December 1997, the amount of $10 million was        
capitalised as an intangible asset representing completed products.             

Shire accounted for the acquisition of Pharmavene using purchase accounting. The
purchase price of $104 million was allocated as follows:                        

                                                                     $'000
Property, plant and equipment                                           1,561   
Intangible assets                                                      11,065   
Current assets                                                         14,002   
Accounts payable                                                      (5,398)   
In-process research and development                                    82,774   
Purchase consideration                                                104,004   

Included within acquired intangible assets is the value of the assembled        
workforce of $1,065,000 which is being amortised on a straight line basis over a
period of 5 years. $10,000,000 is attributed to the value of completed products,
as disclosed above, and is being amortised on a straight line basis over 20     
years.                                                                          

As a result of the transaction, Shire incurred a charge for the year ended 31   
December 1997, representing the acquisition of in-process research and          
development in accordance with SFAS No. 2. The acquired in-process research and 
development charge of $82,774 represents the value of Pharmavene's products in  
development at the date of acquisition. Technological feasibility of these      
products was not established at the date of acquisition. These products were    
considered to have no alternative future use other than the therapeutic         
indications for which they were in development. The work remaining to complete  
the development products involved continuing formulation activity, clinical     
studies and the submission of regulatory filings to seek marketing approval. As 
pharmaceutical products cannot be marketed without regulatory approvals, Shire  
will not receive any benefits unless it receives such regulatory approval.      

The results of operations of Shire Laboratories, Inc. have been included in the 
consolidated results of the Company since the acquisition date of 23 March 1997.

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                                                        1999        1998
                                                       $'000       $'000

REVENUES                                                 417,948     330,346    
(Loss)/income before extraordinary items                (95,463)      19,039    
Net (loss)/income                                       (95,463)      19,039    
Net (loss)/income per share--basic                       $(0.39)      $ 0.08    
Net (loss)/income per share--diluted                     $(0.39)      $ 0.08    

YEAR ENDED 31 DECEMBER, 1998                                                    

There were no significant acquisitions or dispositions of businesses during the 
year ended 31 December 1998.                                                    

YEAR ENDED 31 DECEMBER, 1997                                                    

(a) Acquisition of Pharmavene, Inc.                                             

On 23 March 1997 Shire completed the acquisition of Pharmavene, Inc.            
("Pharmavene"), subsequently renamed Shire Laboratories, Inc., for approximately
$104 million, including the costs of acquisition. The purchase price consisted  
of $27.2 million in cash, the issue of $60.5 million in shares, the issue of    
$6.3 million in share options and contingent consideration of $10 million.      

In connection with the acquisition, each outstanding share of Pharmavene common 
stock was exchanged for Shire ordinary shares, resulting in the issuance of     
16,947,000 Shire ordinary shares valued at $60.5 million. Options granted by    
Pharmavene prior to the acquisition date were converted into options to acquire 
2,790,000 Shire ordinary shares. These options were valued in determination of  
the purchase price of Pharmavene at $6.3 million.                               

The contingent consideration was payable to the former shareholders of          
Pharmavene on approval of the drug Carbatrol by the F.D.A. On payment of the    
contingent consideration in December 1997, the amount of $10 million was        
capitalised as an intangible asset representing completed products.             

Shire accounted for the acquisition of Pharmavene using purchase accounting. The
purchase price of $104 million was allocated as follows:                        

                                                                   $'000
Property, plant and equipment                                          1,561    
Intangible assets                                                     11,065    
Current assets                                                        14,002    
Accounts payable                                                     (5,398)    
In-process research and development                                   82,774    
Purchase consideration                                               104,004    

Included within acquired intangible assets is the value of the assembled        
workforce of $1,065,000 which is being amortised on a straight line basis over a
period of 5 years. $10,000,000 is attributed to the value of completed products,
as disclosed above, and is being amortised on a straight line basis over 20     
years.                                                                          

As a result of the transaction, Shire incurred a charge for the year ended 31   
December 1997, representing the acquisition of in-process research and          
development in accordance with SFAS No. 2. The acquired in-process research and 
development charge of $82,774 represents the value of Pharmavene's products in  
development at the date of acquisition. Technological feasibility of these      
products was not established at the date of acquisition. These products were    
considered to have no alternative future use other than the therapeutic         
indications for which they were in development. The work remaining to complete  
the development products involved continuing formulation activity, clinical     
studies and the submission of regulatory filings to seek marketing approval. As 
pharmaceutical products cannot be marketed without regulatory approvals, Shire  
will not receive any benefits unless it receives such regulatory approval.      

The results of operations of Shire Laboratories, Inc. have been included in the 
consolidated results of the Company since the acquisition date of 23 March 1997.

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(b) Acquisition of Richwood Pharmaceutical Company, Inc.                        

On 22 August 1997 the Company acquired all of the outstanding shares of Richwood
Pharmaceutical Company, Inc. ("Richwood"), subsequently renamed Shire Richwood, 
Inc., a company involved in the development, manufacture and marketing of       
pharmaceutical products. The consideration paid was $209 million, comprising    
shares valued at $170.5 million, share options $21.7 million, cash of $15.1     
million and acquisition expenses of $1.7 million.                               

In connection with the acquisition, each outstanding share of Richwood common   
stock was exchanged for Shire ordinary shares, resulting in the issuance of     
39,488,000 Shire ordinary shares valued at $170.5 million. Options granted by   
Richwood prior to the acquisition date were converted into options to acquire   
5,632,000 Shire ordinary shares. These options were valued in determination of  
the purchase price at $21.7 million.                                            

Shire accounted for the acquisition of Richwood using purchase accounting. The  
purchase price of $209 million was allocated as follows:                        

                                                                           $'000
Property, plant and equipment                                              2,275
Intangible assets                                                        198,445
Current assets                                                            14,625
Accounts payable                                                         (6,434)
--------------------------------------------------------------------------------
Purchase consideration                                                   208,911
--------------------------------------------------------------------------------

The related acquired goodwill and other intangible assets of $198.4 million are 
being amortised on a straight line basis over a period between 5 and 30 years as
follows:                                                                        

                                                                           $'000
Completed products/technology                                            176,006
Assembled workforce                                                        2,819
Goodwill                                                                  19,620
--------------------------------------------------------------------------------
                                                                         198,445
--------------------------------------------------------------------------------

Completed products and technology represent the portfolio of named identifiable 
products and technologies owned and marketed by Shire Richwood, Inc. at the time
of acquisition.                                                                 

The results of operations of Shire Richwood, Inc. have been included in the     
consolidated results of the Company since the acquisition date of 22 August     
1997.                                                                           

3. Cash and cash equivalents                                                    

                                                                [Download Table]

                            1999    1998
                           $'000   $'000

                                        
Cash at bank and in hand  54,082  52,973

4. Marketable securities and other current asset investments                    

                                                                [Download Table]

                                                                    1999     1998 
                                                                   $'000    $'000 
                                                                                  
Marketable securities                                             44,003   36,062 
Commercial paper                                                  39,200    6,510 
Institutional cash fund                                            1,141   29,154 
----------------------------------------------------------------------------------
                                                                  84,344   71,726 
----------------------------------------------------------------------------------

There are no restrictions on the sale of marketable securities and no amounts   
have been pledged as collateral.                                                

There have been no significant changes in market value subsequent to 31 December
1999.                                                                           

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The Company recorded losses on sales of marketable securities during the years  
ended 31 December 1999, 1998 and 1997 of $227,000, $30,000 and $18,000.         

Unrealised holding gains and losses on available for sale marketable securities,
as disclosed in the Statement of Comprehensive Income, amounted to $411,000     
loss, $96,000 gain and $199,000 gain at 31 December 1999, 1998 and 1997         
respectively.                                                                   

Maturity dates of marketable securities held at 31 December 1999 primarily      
ranged from 3 to 36 months.                                                     

5.  Accounts receivable                                                         

                                                      1999            1998
                                                     $'000           $'000

Trade receivables                                      55,953          64,857   
Notes receivable                                          678           9,426   
Other receivables                                       2,387           2,339   
------------------------------------------------------------------------------  
                                                    59,018          76,622
------------------------------------------------------------------------------  

Trade receivables included above are stated net of a provision for doubtful     
debts of $565,000; 31 December1998: $577,000.                                   

Included within other receivables at 31 December 1999 is $1,144,000 of accrued  
royalty income. At 31 December, 1998 other receivables included $669,000 in     
respect of product divestments and $923,000 of accrued royalty income.          

Notes receivable are in respect of the divestment of certain products.          

6. Inventory                                                                    

Inventory consists of:                                                          

                                                           1999       1998
                                                          $'000      $'000

Finished goods                                              26,573     19,990   
Work-in-process                                              6,389      6,113   
Raw materials                                                6,576      8,536   
------------------------------------------------------------------------------  
                                                         39,538     34,639
------------------------------------------------------------------------------  

7. Prepaid expenses and other current assets                                    

                                                           1999       1998
                                                          $'000      $'000

Prepaid expenses                                             6,621      4,286   
Other current assets                                        2, 391        830   
------------------------------------------------------------------------------  
                                                          9,012      5,116
------------------------------------------------------------------------------  

Included within other current assets at 31 December 1999 is $1,098,000 in       
respect of the current portion of deferred financing costs relating to the      
$125,000,000 long term loan. The deferred financing costs are being amortised   
over the five year term of the loan.                                            

8. Investments                                                                  

                                                           1999         1998
                                                          $'000        $'000

Investment in RiboGene Inc                                  2,604       10,000  

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The Company has an investment in the convertible preferred stock of RiboGene,   
Inc., a drug discovery company targeting infectious diseases. The shares have no
voting rights. One-third of the preferred stock is convertible at the option of 
the Company to common stock of RiboGene at each of the first three anniversary  
dates of the investment. The investment is classified as held to maturity.      

In accordance with the Company's stated accounting policy, the cost of the      
investment has been written down by $7,396,000 to $2,604,000 at 31 December 1999
as the Company considers the value of the investment to have suffered a         
permanent diminution in value.                                                  

9. Property, plant & equipment                                                  

Property, plant and equipment consists of:                                      

                                                              1999        1998
                                                             $'000       $'000

Land and buildings                                           25,498      29,767 
Office furniture, fittings and equipment                     14,527      12,253 
Warehouse, laboratory and manufacturing equipment            10,595      10,053 
--------------------------------------------------------------------------------
                                                            50,620      52,073
--------------------------------------------------------------------------------
Less: Accumulated depreciation                               13,136       9,391 
--------------------------------------------------------------------------------
                                                            37,484      42,682
--------------------------------------------------------------------------------

Depreciation expense for the years ended 31 December 1999, 1998 and 1997 was    
$4,243,000, $3,281,000 and $1,893,000 respectively.                             

Included within land and buildings at 31 December,1999 is $12 million relating  
to the Company's Eatontown, New Jersey office facility classified as available  
for sale. The asset is continuing to be depreciated.                            

10. Intangible assets                                                           

Intangible assets comprise:                                                     

                                                              1999        1998
                                                             $'000       $'000

Intellectual property rights acquired                       394,640     363,306 
Goodwill arising on businesses acquired                     238,897     223,776 
--------------------------------------------------------------------------------
                                                           633,537     587,082
--------------------------------------------------------------------------------
Less: Accumulated amortisation                               75,603      49,923 
--------------------------------------------------------------------------------
                                                           557,934     537,159
--------------------------------------------------------------------------------

Included in intellectual property above is $35,000,000 for the purchase of the  
world-wide rights to Agrylin during the year ended 31 December 1999, which      
allows the Company to retain all rights to the product with no future royalty   
liability.                                                                      

Other significant additions to intellectual property during the year ended 31   
December 1999 were in respect of product rights for Lodine ($5,474,000) and     
Fareston ($10,000,000), the Cebutid trademark purchased from Fuisz Technologies 
Ltd ($7,500,000) and intellectual property relating to the manufacture of       
Adderall ($11,800,000) acquired from Arenol Corporation.                        

During the year ended 31 December 1999 the Company disposed of the Tigan product
rights. The loss on sale of $5,825,000 is recorded in the statement of          
operations.                                                                     

Amortisation expense for the years ended 31 December 1999, 1998 and 1997 was    
$24,355,000, $21,968,000 and $10,416,000 respectively.                          

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The movement on goodwill was as follows:                                        

                                                        [Enlarge/Download Table]

                                Completed     Assembled     Goodwill/Other          Deferred      Total 
                                 Products     Workforce                        Consideration            
                                    $'000         $'000              $'000             $'000      $'000 

                                                                                                        
As of 1 January 1997                4,222           170              1,355                --      5,747 
Arising on acquisitions           176,006         3,744             19,619                --    199,369 
Arising on deferred payment            --            --                 --            10,142     10,142 
Amortisation charge               (3,355)         (418)              (137)             (126)    (4,036) 
Foreign exchange                    4,311            70                456                64      4,901 
                             ---------------------------------------------------------------------------
As of 31 December 1997            181,184         3,566             21,293            10,080    216,123 
Adjustment to goodwill                 --            --                691                --        691 
Amortisation charge               (9,091)         (790)              (704)             (506)   (11,091) 
Foreign exchange                    1,965            34                254               110      2,363 
                             ---------------------------------------------------------------------------
As of 31 December 1998            174,058         2,810             21,534             9,684    208,086 
Arising on acquisitions                --            --             22,383                --     22,383 
Amortisation charge               (9,021)         (782)              (871)             (504)   (11,178) 
Foreign exchange                  (5,401)          (86)              (940)             (301)    (6,728) 
                             ---------------------------------------------------------------------------
As of 31 December 1999            159,636         1,942             42,106             8,879    212,563 

The weighted average amortisable life of goodwill at 31 December 1999, 1998 and 
1997 was 21 years.                                                              

The additions to goodwill during the year ended 31 December 1999 arose on the   
acquisition of Laboratoires Murat S.A., Fuisz Pharma GmbH & Co KG and Istoria   
Farmaceutici S.p.A. from Fuisz Technologies Ltd. For further details see Note   
2(a).                                                                           

11. Other non current assets                                                    

                                                         1999       1998
                                                        $'000      $'000

Notes receivable                                              422      2,369    
Other assets                                                6,214      2,465    
-----------------------------------------------------------------------------   
                                                        6,636      4,834
-----------------------------------------------------------------------------   

Included within other assets at 31 December 1999 is $4,393,000 in respect of    
deferred financing costs. See Note 7 above for further details.                 

12. Accounts and notes payable                                                  

                                                            1999      1998
                                                           $'000     $'000

Trade accounts payable                                       31,540    19,791   
Accrued expenses                                             79,520    35,105   
Notes payable                                                 3,449        --   
------------------------------------------------------------------------------  
                                                         114,509    54,896
------------------------------------------------------------------------------  

The weighted average interest rate for notes payable at 31 December 1999 and    
1998 was 6per cent.. The notes payable are not secured and do not contain any   
covenants.                                                                      

13. Current portion of long-term debt                                           

                                                               1999       1998
                                                              $'000      $'000

Current portion of notes payable                               9,573     11,178 
Current portion of capital leases                                 35      1,173 
                                                            --------------------
                                                              9,608     12,351

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14. Other current liabilities 1999 1998 $'000 $'000                             

Income taxes payable                                           6,727      3,134 
Deferred tax liabilities                                          --        244 
Payable for termination of licence agreement                     806        832 
Other accrued liabilities                                     41,170      9,831 
                                                            --------------------
                                                             48,703     14,041

Other accrued liabilities at 31 December 1999 primarily relate to restructuring 
costs incurred as a result of the merger with Roberts Pharmaceutical            
Corporation.                                                                    

15. Long-term debt                                                              

                                                              1999        1998
                                                             $'000       $'000

Notes payable                                               135,887     137,917 
Less: current instalments                                   (9,573)    (11,178) 
--------------------------------------------------------------------------------
                                                           126,314     126,739
--------------------------------------------------------------------------------
Capital leases payable                                           35       1,208 
Less: current instalments                                      (35)     (1,173) 
--------------------------------------------------------------------------------
                                                                --          35
--------------------------------------------------------------------------------
Total, less current instalments                             126,314     126,774 

Principal payments in each of the next five years and thereafter on long-term   
debt outstanding at 31 December 1999 amount to:                                 

                                                                1999
                                                               $'000

2000                                                                 8,358      
2001                                                                 1,322      
2002                                                                 1,242      
2003                                                                    --      
2004                                                               125,000      
Thereafter                                                              --      
---------------------------------------------------------------------------     
                                                             135,922
---------------------------------------------------------------------------     

The weighted average borrowing rate for the year ended 31 December 1999 was 7per
cent. (1998: 7per cent.).                                                       

$125 MILLION FIVE YEAR TERM LOAN                                                

The Company entered into a $125,000,000 five year term loan with DLJ Capital    
Funding, Inc. on 19 November 1999. This loan replaced an existing $125,000,000  
loan facility in the name of Roberts Pharmaceutical Corporation that had been   
taken out to finance the acquisition of Pentasa in 1998. The new loan is in the 
name of the parent company, Shire Pharmaceuticals Group plc. The applicable     
interest rate ranges between 0.5 per cent and 1.5 per cent over the higher of   
the prime rate of DLJ Capital Funding, Inc. or the Federal Funds Rate plus 0.5  
per cent or between 1.5 per cent and 2.5 per cent over the London Interbank     
Overnight Rate (as adjusted in accordance with the loan agreement), in each case
depending on the Company's credit rating.                                       

All obligations under the facility are jointly and severally guaranteed by the  
Company and by its subsidiaries and is initially secured by all material        
property owned by the Company and its subsidiaries and the capital stock of the 
subsidiaries. If the Company's credit rating reaches specified levels, the      
facility will not be secured. The facility contains covenants and maintenance   
tests that require the Company to maintain a minimum net worth, a               

                                                                              65

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specified leverage ratio and a specified coverage ratio. At 31 December 1999 the
Company satisfied the aforementioned covenants and maintenance tests.           

$11.8 MILLION UNSECURED CONVERTIBLE ZERO COUPON LOAN NOTE                       

The Company financed the purchase of intellectual property relating to the      
manufacture of Adderall from Arenol Corporation by a total of $11.8 million in  
loan notes. On 5 March 1999 the Company issued a $5,800,000 principal amount    
Unsecured Convertible Zero Coupon Loan note due 30 July 2001 (the "First Loan   
Note") and a $6,000,000 principal amount Unsecured Convertible Zero Coupon Loan 
Note due 30 July 2004 (the "Second Loan Note"). Both loan notes are in the name 
of the parent company, Shire Pharmaceuticals Group plc. The agreement provides  
for the cancellation of certain specified amounts of the aggregate principal    
amount of the First Loan Note and of such amounts of the Second Loan Note on    
certain dates to the extent of certain indemnified losses or, to the extent that
such amounts of the First Loan Note or the Second Loan Note are not so          
cancelled, for their conversion into that number of Ordinary Shares equal to the
amounts not cancelled divided by the product of (a) the lower of L3.565         
(approximately $5.75) of the midweek closing price of the Ordinary Shares on the
London Stock Exchange on the relevant date and (b) the exchange rate on the     
relevant date.                                                                  

16. Other non current liabilities                                               

                                                               1999       1998
                                                              $'000      $'000

Payable for termination of Licence agreement                   1,209      2,080 
Other liabilities                                                136        149 
--------------------------------------------------------------------------------
                                                              1,345      2,229
--------------------------------------------------------------------------------

17. Financial instruments                                                       

The following methods and assumptions were used to estimate the fair value of   
each material class of financial instrument:                                    

CASH AND CASH EQUIVALENTS-carrying amount approximates fair value due to the    
short-term nature of these instruments.                                         

MARKETABLE SECURITIES AND OTHER CURRENT ASSET INVESTMENTS-the fair value of     
marketable securities is estimated based on quotes obtained from brokers.       

ACCOUNTS RECEIVABLE-carrying amount approximates fair value due to the          
short-term nature of these instruments.                                         

ACCOUNTS AND NOTES PAYABLE-carrying amount approximates fair value due to the   
short-term nature of these instruments.                                         

LONG TERM DEBT-the fair value of long term debt is estimated based on the       
discounted future cash flows using currently available interest rates.          

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The carrying amounts and corresponding fair values of financial instruments at  
31 December 1999 and 1998 were as follows:                                      

                                                        [Enlarge/Download Table]

                                                           Carrying Amount  Fair Value
                                                                     $'000       $'000

                                                                                      
Financial assets:                                                                     
Cash and cash equivalents                                           54,082      54,082
Marketable securities and other current asset investments           84,344      83,933
Financial liabilities:                                                                
Accounts and notes payable                                         114,509     114,487
Long--term debt                                                    135,922     135,922

Financial assets:                                                                     
Cash and cash equivalents                                           52,973      53,196
Marketable securities and other current assets                      71,726      71,822
Financial liabilities:                                                                
Accounts and notes payable                                          54,896      54,896
Long--term debt                                                    139,125     138,992

The carrying amounts in the table are included in the consolidated balance sheet
under the indicated captions.                                                   

18. Leases and other commitments                                                

(a) Leases                                                                      

The Company leases facilities, motor vehicles and certain office equipment under
operating leases. The Company's commitments under the non-cancellable portion of
all operating leases for the next five years and thereafter as of 31 December   
1999 are as follows:                                                            

                                                                  1999
                                                                 $'000

2000                                                                  4,274     
2001                                                                  3,391     
2002                                                                  2,707     
2003                                                                  1,632     
2004                                                                    726     
Thereafter                                                              600     
                                                               ---------
                                                                13,330

Lease and rental expense included in selling, general and administrative        
expenses in the accompanying statements of operations amounts to approximately  
$3,155,000, $1,555,000 and $1,201,000 for the fiscal years ended 31 December    
1999, 1998 and 1997 respectively.                                               

(b) Other commitments                                                           

In accordance with several product acquisitions and licensing agreements, and   
subject to certain cancellation rights reserved by the Company, the Company may 
be required to make minimum payments related to Noroxin, Sampatrilat and the    
Lilly Compounds totalling $21.0 million; and purchase ProAmatine inventory in   
the amount of $74.6 million through 2004. The Noroxin payments may be triggered 
if minimum sales levels are not met and the ProAmatine payments may be triggered
if minimum s ales purchases are not made. The Sampatrilat and Lilly payments are
milestone payments due on reaching certain stages in the development of the     
compounds. The following schedule details the minimum payments which may be     
required in each of the next four fiscal years, assuming the previously         
discussed triggering events occur:                                              

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                                                                          1999
                                                                         $'000

2000                                                                      5,000 
2001                                                                      2,000 
2002                                                                      2,000 
2003                                                                     12,000 
--------------------------------------------------------------------------------
                                                                        21,000
--------------------------------------------------------------------------------

                                                                          1999
                                                                         $'000

PROAMATINE INVENTORY                                                            
2000                                                                     26,808 
2001                                                                     11,943 
2002                                                                     11,943 
2003                                                                     11,943 
2004                                                                     11,943 
--------------------------------------------------------------------------------
                                                                        74,580
--------------------------------------------------------------------------------

Upon successful completion of the development of these products, approval by the
FDA, and subsequent marketing of these products, royalties will be in the range 
of 7per cent. to 10per cent. of product sales with a weighted average royalty of
approximately 7per cent.. The duration of these royalties is the earlier of 15  
years or patent expiration.                                                     

In June 1997, the Company concluded agreements with MacFarlan Smith Ltd. ("MS") 
and Janssen Pharmaceuticals NV for the procurement of daffodils by MS on behalf 
of Shire and Janssen and the extraction from those bulbs of galantamine for use 
in the production of Reminyl for commercial launch of the product. Under these  
arrangements, MS arranges for the production, planting and harvesting of        
daffodil bulbs in sufficient quantities to provide the world-wide launch stock  
for the product and has constructed a plant to undertake the extraction of      
galantamine with an agreed maximum plant cost of L7 million (approximately $11.2
million). Reciprocal arrangements have been concluded with Janssen, which will  
bear the entire cost other than a proportion relative to the supply of bulbs and
product for sale by Shire in the UK and Ireland.                                

These arrangements may be terminated by Shire and Janssen subject to the payment
by Shire and Janssen to MS of certain sums due to MS in respect of outstanding  
bulb orders and its capital expenditure.                                        

(c) Contingent liabilities                                                      

Until April 1998, Shire Richwood Inc. ("SRI") distributed products containing   
phentermine, a prescription drug approved in the US as a single agent for short 
term use in obesity. Contrary to the approved labelling of these products,      
physicians in the US co-prescribed phentermine with fenfluramine or             
dexfenfluramine for management of obesity. This combination was popularly known 
as the "fen/phen" diet. In mid 1997, following concerns raised about cardiac    
valvular side effects alleged to be associated with this diet regime, the       
fenfluramine and dexfenfluramine elements of the "fen/ phen" diet were withdrawn
from the US market. Although SRI has ceased to distribute phentermine, the drug 
remains both approved and available in the US SRI and a number of other         
pharmaceutical companies are being sued for damages for personal injury and     
medical monitoring arising from phentermine used either alone or in combination.

Through approximately March 2000 SRI was named as a defendant in approximately  
3,500 lawsuits and had been dismissed from approximately 500 of these cases.    
There are approximately 2,400 additional cases pending dismissal as of 16 March 
2000. In only 127 cases pending was it alleged in the complaint or subsequent   
discovery that the plaintiff had used SRI's particular product and SRI has been 
dismissed from 29 of these cases as well. Although there have been reports of   
substantial jury awards and settlements in respect of fenfluramine and/or       
dexfenfluramine, to date Shire is not aware of any jury awards made against, or 
any settlements made by, any phentermine defendant. Shire denies liability on a 
number of grounds including lack of scientific evidence that phentermine,       
properly prescribed, causes the alleged side effects and that SRI did not       
promote phentermine for long term combined use as the "fen/phen" diet.          

Accordingly, Shire intends to defend vigorously any and all claims made against 
the Group in respect of phentermine and believes that a liability is neither    
probable nor quantifiable at this stage of the litigation.                      

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Pursuant to an unlimited indemnity from SRI's former contract manufacturer of   
phentermine, EON Laboratories Inc. (EON), legal costs in respect of the         
phentermine litigation have, to date, been met by EON's insurers. EON has       
available, subject to Court sanction, a further $12 million of insurance to meet
the costs and liabilities of EON and each of its distributors including Shire.  
EON is a subsidiary of Hexal GmbH, a manufacturer of generic pharmaceuticals    
based in Germany with a reported turnover of approximately $400 million,        
operations in an estimated 30 countries and approximately 500 employees. Hexal  
does not publicly disclose more extensive details of its financial position. EON
has indicated to Shire that it will defend and indemnify Shire against costs and
liabilities. Although EON has not indicated to Shire an unwillingness or        
inability to fund any uninsured losses, Shire is unable to determine EON's      
ability to pay such losses. Shire also has access to a limited indemnity given  
by the former shareholders of SRI for costs and liabilities related to the      
phentermine litigation not met by insurance or other indemnity arising from     
litigation filed prior to 12 March 1999. This indemnity is limited to the value 
of 1,622,566 ordinary shares of Shire presently held by a third party in escrow 
and is available on demand. As of 24 March 2000, based on a closing share price 
of L10.60, the value of these shares amounted to approximately L17.2 million    
(approximately $27.5 million). In addition, Shire has access to its own product 
liability insurance up to a maximum of $3 million. At the present stage of the  
litigation, Shire is unable to estimate the level of future legal costs after   
taking into account any available product liability insurance and enforceable   
indemnities. To the extent that any legal costs are not covered by insurance or 
available indemnities, these will be expensed as incurred.                      

19. Net income/(loss) per share                                                 

Basic net income/(loss) per share is based upon the income available to common  
stockholders divided by the weighted-average number of common shares outstanding
during the period. Diluted earnings/(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:                                                        

                                                        [Enlarge/Download Table]

                                                                  1999    1998      1997
                                                                 $'000   $'000     $'000

                                                                                        
Numerator for basic and diluted net (loss) /income per share  (94,998)  20,572  (84,152)

                                                        [Enlarge/Download Table]

                                             No of shares  No of shares  No of shares
                                                                                     
Weighted average number of shares  (basic)    244,698,721   234,044,732   185,153,065
Effect of dilutive stock options                       --     8,761,678            --
Weighted average number of shares (diluted)   244,698,721   242,806,410   185,153,065
Basic net (loss)/income per share                 $(0.39)         $0.09       $(0.45)
Diluted net (loss)/income per share               $(0.39)         $0.08       $(0.45)

The calculation of weighted average number of shares for the year ended 31      
December 1999 does not include potentially dilutive securities, stock options   
and convertible debt, because their inclusion would be anti-dilutive in a loss  
making year.                                                                    

The calculation for the year ended December 31 1997 excludes potentially        
dilutive stock options on the same basis.                                       

20. Analysis of revenue, operating income/(loss), assets and reportable segments

The Company has disclosed segment 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. All inter-company items are eliminated. The accounting policies of
each reportable segment are the same as those of the Group.                     

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                                                        [Enlarge/Download Table]

                                                          US       EUROPE         REST OF WORLD            TOTAL 
                                                       $'000        $'000                 $'000            $'000 
                                                                                                                 
YEAR ENDED 31 DECEMBER 1999                                                                                      
Product sales                                        313,582       55,194                16,427          385,203 
Licensing and development                              1,097        9,675                    --           10,772 
Royalties                                                 --        3,562                    --            3,562 
Other revenues                                           517           --                 1,478            1,995 
-----------------------------------------------------------------------------------------------------------------
Total revenue                                        315,196       68,431                17,905          401,532 
-----------------------------------------------------------------------------------------------------------------
Cost of sales                                         62,375       20,958                10,142           93,475 
Research and development                              50,544       26,904                    55           77,503 
Selling, general and administrative                  108,682       55,986                 6,718          171,386 
Costs of restructuring                                93,603        3,529                    --           97,132 
Merger transaction expenses                            9,312       22,967                    --           32,279 
Loss on sale of product rights                         5,825           --                    --            5,825 
-----------------------------------------------------------------------------------------------------------------
Total operating expenses                             330,341      130,344                16,915          477,600 
-----------------------------------------------------------------------------------------------------------------

Operating (loss)/income                              (15,145)     (61,913)                  990          (76,068)

Total assets                                         547,762      313,113                27,801          888,676 
Long-lived assets                                    348,946      231,560                15,825          596,331 
Capital expenditure on long-lived assets              64,450        8,143                 1,397           73,990 

YEAR ENDED 31DECEMBER 1998                                                                                       
Product sales                                        226,988       50,261                14,536          291,785 
Licensing and development                                622       11,199                    --           11,821 
Royalties                                                 --        3,697                    --            3,697 
Other revenues                                           306           --                 1,375            1,681 
-----------------------------------------------------------------------------------------------------------------
Total revenue                                        227,916       65,157                15,911          308,984 
-----------------------------------------------------------------------------------------------------------------

Cost of sales                                         67,889       19,378                 7,746           95,013 
Research and development                              27,556       31,647                    50           59,253 
Selling, general and administrative                   80,854       45,208                 5,640          131,702 
(Profit) on sale of product rights                      (220)          --                    --             (220)
-----------------------------------------------------------------------------------------------------------------
Total operating expenses                             176,079       96,233                13,436          285,748 
-----------------------------------------------------------------------------------------------------------------

Operating income/(loss)                               51,837      (31,076)                2,475           23,236 

Total assets                                         542,799      307,309                23,497          873,605 
Long-lived assets                                    352,195      213,381                14,265          579,841 
Capital expenditure on long-lived assets             147,007        2,696                 8,665          158,368 

YEAR ENDED 31 DECEMBER  1997                                                                                     
Product sales                                        113,814       41,702                13,400          168,916 
Licensing and development                              4,201       15,929                    --           20,130 
Royalties                                                 --        1,596                    16            1,612 
Other revenues                                            --           --                   896              896 
Total revenue                                        118,015       59,227                14,312          191,554 

Cost of sales                                         41,874       18,228                 6,988           67,090 
Research and development                              20,876       19,678                   109           40,663 
Selling, general and administrative                   52,538       29,211                 4,806           86,555 
In-process research and development                   83,087           --                    --           83,087 
-----------------------------------------------------------------------------------------------------------------
Total operating expenses                             198,375       67,117                11,903          277,395 
-----------------------------------------------------------------------------------------------------------------

Operating (loss)/income                              (80,360)      (7,890)                2,409          (85,841)

Total assets                                         351,573      288,643                24,734          664,950 
Long-lived assets                                    205,500      239,956                 6,960          452,416 
Capital expenditure on long-lived assets              24,826        2,542                 7,064           34,432 

(d) Material customers                                                          

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In the periods set out below, certain customers accounted for greater than 10   
per cent of total revenue:                                                      

                                      1999             1998             1997
                                     $'000            $'000            $'000

                Customer A         100,267           53,599               --
                Customer B          54,498           31,387               --
                Customer C          40,045           35,314               --

21. Other charges                                                               

YEAR ENDED 31 DECEMBER 1999                                                     

As a result of the acquisition of Roberts Pharmaceutical Corporation on 23      
December 1999, which was accounted for as a pooling of interests, the Company   
recorded charges totalling $135.2 million pre-tax for asset impairments ($48.5  
million), merger-related transaction expenses ($32.3 million), restructuring    
($43.6 million), loss on product dispositions ($5.8 million) and other charges  
($5.0 million). These charges are disclosed separately within operating expenses
in the Statement of Income.                                                     

The Company recorded an impairment charge of $34.2 million to adjust intangible 
asset values, primarily product rights, to their estimated fair value. These    
charges are consistent with the Company's accounting policy to review           
periodically the carrying value of the intangibles and evaluate whether there   
has been any impairment in the value of those intangibles as compared with      
estimated undiscounted future cash flows relating to those intangibles. The     
estimated fair value has been calculated using projected discounted cash flows  
of the products. Other asset impairments are the write off of inventory held for
research and development work and duplicate equipment ($ 3.2 million),          
adjustments to the carrying value of the RiboGene investment to market value at 
31 December 1999 ($ 7.6 million), and write down of notes receivable to their   
estimated realisable value ($ 3.5 million).                                     

The components of the restructuring charge were as follows:                     

                                                        $m

Employee termination costs                                       37.9           
Property                                                          5.7           
                                                   ---------
                                                      43.6

In December 1999, the decision was made to close the office facility in         
Eatontown, New Jersey and consolidate the sales and marketing operations into   
the existing facility in Florence, Kentucky and to transfer the research &      
development activities to Shire's facility in Rockville, Maryland. Similarly,   
Roberts' sales and marketing operation in the UK was combined with Shire's      
established operation in Andover, Hampshire.                                    

Shire has commenced negotiations with potential purchasers of the property at   
Eatontown, which has been written down to its estimated fair value.             

As a result of the restructuring, employees were notified of their termination  
prior to 31 December 1999. As of 31 December 147 employees had been terminated  
and the Company expects to complete the termination of the remainder of the     
employees by 30 April 2000. Employee termination costs consist of payments for  
severance, medical and other benefits, outplacement counselling, acceleration of
pension benefits and excise taxes.                                              

YEAR ENDED 31 DECEMBER 1998                                                     

During the year ended 31 December 1998 a gain of $220,000 was credited to the   
income statement in respect of the disposition of certain products.             

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YEAR ENDED 31 DECEMBER 1997                                                     

As a result of the acquisition of Shire Laboratories, Inc. (formerly Pharmavene,
Inc.) in March 1997, Shire incurred a charge of $83,087,000 representing the    
acquisition of in-process research and development pursuant to SFAS No. 2 (See  
Note 2).                                                                        

22. Retirement benefits                                                         

The Company has a number of defined contribution retirement plans and one       
defined benefit plan covering substantially all employees. For the defined      
contribution retirement plans, the level of company contribution is fixed at a  
set percentage of employee's pay. For the defined benefit plan, where benefits  
are based on employees' years of service and average final remuneration, the    
pension cost is established in accordance with the advice of independent        
qualified actuaries based on valuations undertaken on varying dates.            

Personal defined contribution pension plans                                     

Company contributions to personal defined contribution pension plans totalled   
$1,558,000, $1,124,000, and $514,000 for the years ended 31 December 1999, 1998 
and 1997 respectively, and were charged to operations as they became payable.   

Defined benefit pension plans                                                   

The Company operates a defined benefit Supplemental Executive Retirement Plan   
(SERP) for certain US employees, which was established in 1998. This plan is    
available to former employees of Roberts Pharmaceutical Corporation who meet    
certain age and service requirements. The plan requires mandatory contributions 
based on employee contributions and makes discretionary contributions based on  
employee compensation. The mandatory contributions to the plan in 1999 totalled 
$429,000 (1998: $285,000). Estimated discretionary contributions of $306,000    
were accrued in 1999 (1998: $226,000).                                          

During 1999, as part of the restructuring of the Group following the merger with
Roberts Pharmaceutical Corporation, the SERP was closed to new members and      
contributions have ceased being paid into the plan for existing members. As part
of this arrangement, the Company has paid a lump sum contribution into the plan 
of $18 million, the result of which is that the Company has no future           
liabilities under the plan.                                                     

23. Income taxes                                                                

The (provision)/benefit for income taxes consists of:                           

                                                        [Enlarge/Download Table]

                                                                                       1999       1998      1997 
                                                                                      $'000      $'000     $'000 

                                                                                                                 
Current                                                                                                          
Federal                                                                            (14,007)    (7,375)     (619) 
State and foreign                                                                   (1,556)        118        -- 
-----------------------------------------------------------------------------------------------------------------
Total current                                                                      (15,563)    (7,257)     (619) 
-----------------------------------------------------------------------------------------------------------------
Deferred                                                                                                         
Federal                                                                               (622)      3,808     (995) 
State and foreign                                                                       123        458       194 
-----------------------------------------------------------------------------------------------------------------
Total deferred                                                                        (499)      4,266     (801) 
-----------------------------------------------------------------------------------------------------------------

                                                                                   (16,062)    (2,991)   (1,420) 

Approximate net operating loss carry forward against future federal tax              40,418     43,089    17,536 
liabilities                                                                                                      
Approximate net operating loss carry forward against future state and foreign       185,458    150,572    39,978 
tax liabilities                                                                                                  

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The tax losses shown above have the following expiration dates:                 

                                                                        1999
2005                                                                    78,200  
2006                                                                     1,274  
2007                                                                     4,403  
2008                                                                     2,832  
2009                                                                     5,327  
2010                                                                     6,229  
2011                                                                    10,430  
Available indefinitely                                                 117,181  
------------------------------------------------------------------------------- 
                                                                     225,876
------------------------------------------------------------------------------- 

A comparison of the (provision)/benefit for income taxes as reported to a       
provision based on federal statutory rates and consolidated income before income
taxes is as follows:                                                            

                                                   1999      1998       1997
Benefit/(provision) at federal statutory rates     27,628   (8,247)     28,956  
Adjusted for:                                                                   
Permanent differences                             (6,474)        18   (33,124)  
State and foreign tax                             (1,200)     1,300      (200)  
Difference in taxation rates                           --        --      (663)  
Adjustment to prior year liabilities                4,004        --      2,701  
Goodwill amortisation                             (9,758)   (4,232)    (1,532)  
Other                                               (337)     (464)      (651)  
Valuation allowance                              (29,925)     8,634      3,093  
------------------------------------------------------------------------------- 
(Provision)/benefit for income taxes             (16,062)   (2,991)    (1,420)  
------------------------------------------------------------------------------- 

An analysis of the deferred taxation asset is as follows:                       

                                                           1999         1998
Losses carried forward                                     39,411       36,078  
Capitalised start up costs for tax purposes                 3,259           --  
Restructuring Reserve                                      28,835           --  
Other                                                       1,568        7,497  
Debt conversion                                                --          377  
------------------------------------------------------------------------------- 
                                                         73,073       43,952
------------------------------------------------------------------------------- 
Valuation allowance                                      (35,962)      (6,037)  
------------------------------------------------------------------------------- 
                                                         37,111       37,915
------------------------------------------------------------------------------- 
Excess of tax value over book value of assets                  --        (305)  
------------------------------------------------------------------------------- 
Net deferred tax assets                                    37,111       37,610  
------------------------------------------------------------------------------- 

Valuation allowances against deferred tax assets have not been provided to the  
extent that it is more likely than not that future income and tax planning      
strategies will enable losses brought forward to be utilised.                   

The income (loss) before taxes by tax jurisdiction is as follows:               

                                              1999       1998       1997
                                             $'000      $'000      $'000

US                                            (33,924)     30,772      4,541    
UK                                            (33,996)      5,763   (84,480)    
Other                                         (11,016)   (13,172)    (2,793)    
-----------------------------------------------------------------------------   

                                          (78,936)     23,363   (82,732)

24. Stock incentive plans                                                       

The Company has adopted the disclosure only provisions of SFAS No. 123,         
"Accounting for Stock-Based Compensation" but applies Accounting Principles     
Board Opinion No. 25 and related interpretations in                             

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accounting for its plans. In the years ended 31 December 1999, 1998 and 1997 the
Company recognised a charge under APB25 of $11,933,000, $5,497,000 and          
$2,031,000 respectively. Had compensation for stock options awarded under the   
plans been determined in accordance with SFAS 123, the Company's net            
income/(loss) and per share data would have been changed to the pro forma       
amounts indicated below:                                                        

                                                   1999     1998        1997
                                                  $'000    $'000       $'000

Net income/(loss)                                                               
As reported                                      (94,998)   20,572    (84,152)  
Pro forma                                       (106,246)   17,439    (89,847)  
Income/(loss) per share                                                         
As reported--basic                                 $(0.39)   $0.09     $(0.45)  
As reported--diluted                               $(0.39)   $0.08     $(0.45)  
Pro forma--basic                                   $(0.43)   $0.07     $(0.49)  
Pro forma--diluted                                 $(0.43)   $0.07     $(0.49)  

The fair value of stock options used to compute pro forma net income/(loss) and 
per share disclosures is the estimated present value at grant date using the    
Black-Scholes option-pricing model with the following weighted average          
assumptions:                                                                    

                                                1999          1998          1997

Risk free interest rate                  4.67%-6.25%   4.55%-6.57%   5.17%-6.57%
Expected dividend yield                           0%            0%            0%
Expected life                                4 years       4 years       4 years
Expected volatility                            53.4%         53.2%        28.21%

Directors and employees have been granted options over ordinary shares under the
following stock option plans: Shire Holdings Limited Share Options Scheme ("SHL 
Scheme"), the Imperial Pharmaceutical Services Limited Employee Share Option    
Scheme (Number One) ("SPC Scheme"), the Pharmavene 1991 Stock Option Plan ("SLI 
Plan"), the Shire Pharmaceuticals Executive Share Option Scheme (Parts A and B) 
("Executive Scheme"), the Shire Pharmaceuticals Sharesave Scheme ("Sharesave    
Scheme"), the Shire Pharmaceuticals Group plc Employee Stock Purchase Plan      
("Stock Purchase Plan"), the Richwood Stock Options Plan ("Richwood Plan") and  
the Roberts Stock Option Plans ("Roberts Plan").                                

No further options will be granted under the SHL Scheme, SPC Scheme, SLI Plan,  
Richwood Plan or Roberts Plan. In a period of five years, not more than five per
cent of the issued share capital of the Company may be placed under option under
any employee share scheme. In a period of ten years, not more than ten per cent 
of the issued share capital of the Company may be placed under option under any 
employee share scheme. In addition, the following terms apply to options that   
may be granted under the various plans:                                         

Executive Scheme: up to five per cent of the issued ordinary share capital of   
the Company, in any period of ten years, subject to a limit of 2.5 per cent in  
the period of four years following adoption of the Scheme and a limit of three  
per cent in any period of three calendar years.                                 

Stock Purchase Plan: up to 21,000,000 ordinary shares.                          

The Company has granted options through 31 December 1999 under the various plans
as follows:                                                                     

                                                        [Enlarge/Download Table]

Scheme                   No of                   Date of issue           Expiry date from vesting period
                       options                                                                          

                                                                                                        
SHL Scheme             964,280  7 years, or 3 months after end                                1--3 years
                                                 of employment                                          
SPC Scheme              48,000   7 years, or 6 months after of                                   2 years
                                                    employment                                          
SLI Plan               485,367                        10 years         Immediate on acquisition by Shire
Executive Scheme     5,371,042                        10 years  3 years, subject to performance criteria
Sharesave Scheme       180,697          6 months after vesting                              3 or 5 years
Stock Purchase Plan    218,950              Automatic exercise                                 27 months
Richwood Plan        1,194,388                         5 years         Immediate on acquisition by Shire

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                                                                [Download Table]
                                                                   
Roberts Plan  9,174,418  6 years  Immediate on acquisition by Shire

A summary of the status of the Company's stock option plans as of 31 December   
1999, 1998 and 1997 and the related transactions during the periods then ended  
is presented below:                                                             

                                               Weighted average        Number of
                                                 exercise price           shares

YEAR ENDED 31 DECEMBER 1999                                                     

Outstanding at beginning of period                         3.38       20,784,312
Granted                                                    6.86        2,952,734
Exercised                                                  2.37      (4,552,618)
Forfeited/expired                                          4.90      (1,547,286)

Outstanding at end of period                               4.39       17,637,142

Exercisable at end of period                               3.92       13,001,439

The weighted average grant-date fair value of options granted during the year   
equates to the weighted average exercise price as options are granted at market 
price.                                                                          

                                               Weighted average        Number of
                                                 exercise price           shares

YEAR ENDED 31 DECEMBER 1998                                                     

Outstanding at beginning of period                         2.30       21,002,886
Granted                                                    5.51        7,170,801
Exercised                                                  1.32      (6,628,884)
Forfeited/expired                                          4.01        (760,491)
---------------------------------------------------------------- ---------------

Outstanding at end of period                               3.38       20,784,312

Exercisable at end of period                               2.60        9,505,075

                                               Weighted average        Number of
                                                 exercise price           shares

YEAR ENDED 31 DECEMBER 1997                                                     

Outstanding at beginning of period                         2.89       15,090,452
Granted                                                    1.54        8,491,081
Exercised                                                  1.40      (1,596,314)
Forfeited/expired                                          3.25      (1,543,033)
---------------------------------------------------------------- ---------------

Outstanding at end of period                               2.30       20,442,186

Exercisable at end of period                               1.85       13,269,619

                                                                              75

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Options outstanding at 31 December 1999 have the following characteristics:     

                                                        [Enlarge/Download Table]

Number of options  Exercise prices        Weighted  Weighted average    Number of        Weighted
outstanding                                average    exercise price      options         average
                                    remaining life        of options  exercisable  exercise price
                                                         outstanding                   of options
                                                                                      exercisable
                                                                                                 
864,249                $0.19-$0.83             1.1            $ 0.39      864,249           $0.39
1,827,786              $1.21-$1.73             3.5            $ 1.55    1,827,786           $1.55
932,612                $2.09-$3.06             3.7            $ 2.82      819,231           $2.83
5,433,152              $3.22-$4.38             3.4            $ 3.73    4,206,730           $3.64
7,225,437              $5.23-$6.75             5.1            $ 5.66    5,251,537           $5.71
1,247,650              $6.77-$7.69             5.9            $ 7.59       25,650           $7.14
106,256               $8.27-$11.56             5.2            $10.19        6,256           $8.27
17,637,142                                     4.0            $ 4.39   13,001,439           $3.92

QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)                                     

The following table presents summarised unaudited quarterly results for 1999 (in
thousands, except per share data):                                              

                                       FIRST     SECOND      THIRD      FOURTH
                                       $'000      $'000      $'000       $'000
Revenues                               95,252     96,107    105,784     104,389 
Gross profit                           71,741     76,878     79,381      80,057 
Net income/(loss)                      10,266      9,409      9,293   (123,966) 
Basic net income per share              $0.04      $0.04      $0.04     ($0.49) 
Diluted net income per share            $0.04      $0.04      $0.04     ($0.49) 

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Financial statements reported under UK GAAP                                     

Consolidated profit and loss account                                            

                                                        [Enlarge/Download Table]

                                                                             1999         1998
                                                                      (pound)'000  (pound)'000
                                                               Notes                          
                                                                                              
Turnover                                                         2                            
Existing operations                                                       131,544       80,328
Acquisitions                                                                2,334           --
                                                                       ----------   ----------
Continuing operations                                                     133,878       80,328
Cost of sales and operating expenses                                    (103,506)     (72,449)
                                                                       ----------   ----------
Operating profit                                                                              
Existing operations                                                        30,894        7,879
Acquisitions                                                                (522)           --
                                                                       ----------   ----------
Continuing operations                                                      30,372        7,879
Costs of a fundamental restructuring of continuing operations            (11,516)           --
                                                                       ----------   ----------
Profit on ordinary activities before interest                              18,856        7,879
Bank interest receivable                                                    2,334        1,434
Interest payable and similar charges                                        (181)        (214)
                                                                       ----------   ----------
Profit on ordinary activities before taxation                              21,009        9,099
Tax on profit on ordinary activities                                      (8,439)      (2,852)
                                                                       ----------   ----------
Profit on ordinary activities after taxation                               12,570        6,247
                                                                       ----------   ----------
Earnings per share          - basic                              11         8.7p         4.5p 
                            - diluted                            11         8.3p         4.3p 
                                                                       ----------   ----------

A statement of movement on reserves is given in note 22.                        

The accompanying notes are an integral part of this consolidated profit and loss
account.                                                                        

Consolidated statement of total recognised gains and losses                     

                                                        [Enlarge/Download Table]

                                                                                1999         1998 
                                                                  Notes  (pound)'000   (pound)'000

                                                                                                  
Profit for the year                                                           12,570         6,247
Translation of the financial statements of overseas subsidiaries                 519       (1,171)
                                                                           ----------    ---------
Total recognised gains and losses relating to the year                        13,089         5,076
                                                                           ----------    ---------

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The accompanying notes are an integral part of this consolidated statement of   
total recognised gains and losses.                                              

Balance sheets                                                                  

                                                        [Enlarge/Download Table]

                                                         Consolidated                     Company           
                                                  ----------------------------   ---------------------------
                                                          1999           1998          1999            1998 
                                           Notes   (pound)'000    (pound)'000   (pound)'000     (pound)'000 

Fixed assets                                                                                                
                                                                                                            
Intangible assets - Intellectual property    12      214,856            7,938            --              31 
                  - Goodwill                 12      469,531               --            --              -- 
Tangible assets                              13       23,256            4,671           874           1,101 
Fixed asset investments                      14        1,617               --       881,091         234,942 
                                                  ----------       ----------    ----------      ---------- 
                                                     709,260           12,609       881,965         236,074 
                                                  ----------       ----------    ----------      ---------- 
Current assets                                                                                              
Stocks                                       15       24,532            6,652            --              -- 
Debtors                                      16                                                             
- due within 1 year                                   45,488           17,560         1,920             264 
- due after 1 year                                     1,392             --              --              -- 
Investments                                  17       49,850           21,435           708          17,522 
Cash at bank and in hand                              36,038            8,230         9,814           1,362 
                                                  ----------       ----------    ----------      ---------- 
                                                     157,300           53,877        12,442          19,148 
Creditors: Amounts falling due within one                                                                   
year                                         18     (107,140)         (14,384)      (19,785)         (1,473)
                                                  ----------       ----------    ----------      ---------- 
Net current assets (liabilities)                      50,160           39,493        (7,343)         17,675 
                                                  ----------       ----------    ----------      ---------- 
Total assets less current liabilities                759,420           52,102       874,622         253,749 
Creditors: amounts falling due after more                                                                   
than one year                                        (80,133)          (1,508)       (1,861)             -- 
                                                  ----------       ----------    ----------      ---------- 
Net assets                                           679,287           50,594       872,761         253,749 
                                                  ----------       ----------    ----------      ---------- 
Capital and reserves                                                                                        
Called-up share capital                      21       12,226            7,055        12,226           7,055 
Share premium                                22      839,026          228,537       839,026         228,537 
Capital reserve                              22        2,755            2,755         1,674           1,674 
Other reserves                               22       24,247           24,247        18,079          18,079 
Profit and loss account                      22     (198,967)        (212,000)        1,756         (1,596) 
                                                  ----------       ----------    ----------      ---------- 
Equity shareholders' funds                   23      679,287           50,594       872,761         253,749 
                                                  ----------       ----------    ----------      ---------- 

The accounts on pages o to o were approved by the Board of Directors on 7 April 
2000 and signed on its behalf by:                                               

A. Russell                                                                      
Director                                                                        

The accompanying notes are an integral part of this balance sheet.              

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Consolidated cash flow statement                                                

                                                        [Enlarge/Download Table]

                                                                                      1999         1998   
                                                                                  (pound)'000  (pound)'000
                                                                           Notes                          

                                                                                                          
Net cash inflow from operating activities                                   26a       39,863        3,691 
Returns on investments and servicing of finance:                                                          
Interest received                                                                      2,334        1,434 
Interest paid                                                                           (149)        (142)
Interest element of finance lease rentals                                                (32)         (72)
                                                                                   ---------    --------- 
Net cash inflow from returns on investments and servicing of finance                   2,153        1,220 
                                                                                   ---------    --------- 
    Taxation:                                                                                             
Overseas corporation tax paid                                                         (3,707)      (3,177)
                                                                                   ---------    --------- 
Capital expenditure and financial investments:                                                            
Purchase of intangible fixed assets                                                  (11,500)        (629)
Purchase of tangible fixed assets                                                     (1,303)      (1,633)
Sale of intangible fixed assets                                                          106          258 
Sale of tangible fixed assets                                                          1,521           37 
                                                                                   ---------    --------- 
Net cash outflow for capital expenditure and financial investments                   (11,176)      (1,967)
                                                                                   ---------    --------- 
Acquisitions and disposals:                                                                               
Purchase of subsidiary undertakings                                          14      (17,355)          -- 
Expenses of acquisitions                                                              (7,448)        (295)
Net cash acquired with subsidiary undertakings                                        24,149           -- 
                                                                                   ---------    --------- 
Net cash outflow from acquisitions                                                      (654)        (295)
                                                                                   ---------    --------- 
Cash inflow (outflow) before management of liquid resources and financing                                 
                                                                                      26,479         (528)
                                                                                   ---------    --------- 

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                                                                [Download Table]

                                                          1999         1998   
                                                      (pound)'000  (pound)'000
                                               Notes                          

                                                                              
Management of liquid resources:                                               
Increase in cash placed on short-term deposit   26b       (1,033)    (21,435) 
                                                       ---------   ---------  
   Financing:                                                                 
Issue of ordinary share capital                               --      19,373  
Exercise of share options                                  2,180       2,452  
Expenses of share issues                                  (6,799)     (1,274) 
Capital element of finance leases                           (705)       (553) 
Net increase in loans during the year                      7,439          --  
                                                       ---------   ---------  
Net cash inflow from financing                             2,115      19,998  
                                                       ---------   ---------  
Increase (decrease) in cash in the year                   27,561      (1,965) 
                                                       ---------   ---------  

The accompanying notes are an integral part of this consolidated cash flow      
statement.                                                                      

Notes to the accounts                                                           

A summary of the principal Group accounting policies, all of which have been    
applied consistently throughout the year and the preceding year, is set out     
below:                                                                          

(a) Basis of accounting                                                         

The accounts have been prepared under the historical cost convention, and in    
accordance with applicable accounting standards. The accounts have been prepared
under United Kingdom Generally Accepted Accounting Principles (UK GAAP).        

(b) Basis of consolidation                                                      

The Group accounts consolidate the accounts of Shire Pharmaceuticals Group plc  
and all its subsidiary undertakings drawn up to 31 December each year.          

Under the acquisition method of accounting, which has been adopted for business 
combinations other than Group reconstructions, the results of subsidiary        
undertakings acquired or disposed of in a period are included in the            
consolidated profit and loss account from the date of acquisition up to the date
of disposal.                                                                    

Where merger accounting principles apply, subsidiary undertakings are           
consolidated as if they have always been owned by the Company and acquired share
premium has been shown as other reserves. There has been no difference between  
the nominal value of shares issued to acquire subsidiary undertakings and the   
nominal value of shares acquired.                                               

(c) Intangible fixed assets - goodwill                                          

Goodwill arising on acquisitions in the year ended 31 December 1997 and earlier 
periods was written off to reserves in accordance with the accounting standard  
then in force. As permitted by the current accounting standard the goodwill     
previously written off to reserves has not been reinstated in the balance sheet.
On disposal or closure of a previously acquired business, the attributable      
amount of goodwill previously written off to reserves is included in determining
the profit or loss on disposal.                                                 

Goodwill arising on the acquisition of subsidiary undertakings and businesses   
subsequent to 31 December 1997, representing any excess of the fair value of the
consideration given over the fair value of the identifiable assets and          
liabilities acquired, is capitalised and written off on a straight line basis   
over its useful economic life being 20 years. Provision is made for any         
impairment.                                                                     

(d) Turnover                                                                    

Product sales are recognised upon shipment of products.                         

Licensing and development fees represent revenues derived from licence          
agreements and from collaborative research and development arrangements.        

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Licensing fees are recognised upon transfer or licensing of intellectual        
property rights. Development fee revenue relates to ongoing research and        
development in connection with licenced technology.                             

Revenue in respect of research and development performed on a cost plus or fixed
percentage of cost basis is recognised as research and development work is      
performed. Where collaborative research and development arrangements stipulate  
payment on a milestone basis, revenue is recognised upon achievement of those   
milestones.                                                                     

Royalty revenue relating to licenced technology is recognised when receivable.  

Revenues are stated net of VAT and similar taxes, trade discounts and           
intra-Group transactions.                                                       

No revenue is recognised for consideration, the value or receipt of which is    
dependent on future events, future performance, or refund obligations.          

(e)   Research and development                                                  

Research and development expenditure includes funded and unfunded expenditure   
and is written off in the period in which it is incurred.                       

(f)   Leased assets                                                             

The cost of operating leases is charged to the profit and loss account on a     
straight line basis over the lease term, even if rental payments are not made on
such a basis.                                                                   

Assets acquired under finance leases are included in the balance sheet as       
tangible fixed assets and are depreciated over the shorter of the period of     
lease or their useful lives. The capital elements of future lease payments are  
recorded as liabilities, while the interest elements are charged to the profit  
and loss account over the period of the leases to give a constant charge on the 
balance of the capital repayments outstanding.                                  

(g)   Pensions                                                                  

The Group contributes to personal defined contribution pension plans of         
employees. Contributions are charged to the profit and loss accounts as they    
become payable.                                                                 

(h)   Finance costs of debt                                                     

Finance costs of debt are charged to the profit and loss account over the term  
of the debt at a constant rate on the carrying amount.                          

(i)   Debt                                                                      

Debt is initially stated at the amount of the net proceeds after deduction of   
issue costs. The carrying amount is increased by the finance cost in respect of 
the accounting period and reduced by payments made in the period. Convertible   
debt is reported as a liability unless conversion actually occurs. No gain or   
loss is recognised on conversion.                                               

(j)   Taxation                                                                  

Corporation tax is provided on taxable profits at the current rate.             

Deferred taxation (which arises from differences in the timing of recognition of
items, principally depreciation, in the accounts and by the tax authorities) has
been calculated on the liability method. Deferred taxation is provided on timing
differences which will probably reverse at the rates of tax likely to be in     
force at the time of reversal. Deferred taxation is not provided on timing      
differences which, in the opinion of the Directors, will probably not reverse.  

(k)   Foreign currency                                                          

Monetary assets and liabilities in foreign currencies are translated into       
sterling at the rate of exchange ruling at the balance sheet date. Transactions 
in foreign currencies are translated into sterling at the rate of exchange      
ruling at the date of the transaction. Exchange differences are taken into      
account in arriving at the operating profit.                                    

The results of overseas operations are translated at the average rates of       
exchange during the period and their balance sheets at the rates ruling at the  
balance sheet date.                                                             

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Exchange differences arising on translation of the opening net assets and on    
foreign currency borrowings, to the extent that they hedge the Group's          
investment in such operations, are dealt with through reserves. All other       
exchange differences are included in the profit and loss account.               

(l)   Intangible fixed assets - intellectual property                           

Intellectual property, including trademarks, for products with an immediate     
defined revenue stream and acquired for valuable consideration, is recorded at  
cost and amortised in equal annual instalments over the estimated useful life of
the product with a maximum of 20 years. Intellectual property with no defined   
revenue stream is written off on acquisition. Provision is made for any         
impairment.                                                                     

(m)   Tangible fixed assets                                                     

Tangible fixed assets are shown at cost less accumulated depreciation and any   
provision for impairment. Depreciation is provided on a straight line basis at  
rates calculated to write off the cost less estimated residual value of each    
asset over its estimated useful life at the following annual rates:             

Freehold land and buildings                    2 per cent per annum             
Office furniture and fittings                  20-25 per cent per annum         
Equipment and other                            20-25 per cent per annum         

(n)   Investments                                                               

Fixed asset investments are shown at cost less any provision for impairment.    

Current asset investments are shown at the lower of cost and net realisable     
value.                                                                          

(o)   Stocks                                                                    

Stocks are stated at the lower of cost and net realisable value. Cost incurred  
in bringing each product to its present location and condition is based on      
purchase costs calculated on a first-in, first-out basis, including transport.  

Net realisable value is based on estimated normal selling price less further    
costs expected to be incurred to completion and disposal. Provision is made for 
obsolete, slow moving or defective items where appropriate.                     

(p)   Employee share schemes                                                    

In accordance with UITF Abstract 17 "Employee share schemes", the cost of awards
to employees that take the form of shares or rights to shares is recognised as a
charge in the profit and loss account. The amount recognised, which is the      
difference between the market value at date of grant and the underlying share   
and any exercise price, is charged to the profit and loss account over the      
period the shares are vested, with a corresponding credit to reserves.          

(q)   Related party transactions                                                

In accordance with the exemptions in FRS 8, "Related Party Transactions",       
transactions between Group companies have not been disclosed since Group        
accounts are prepared and include the results of all subsidiary undertakings.   

(r)   Derivative financial instruments                                          

The Group uses derivative financial instruments to reduce exposure to foreign   
exchange risk and interest rate movements. The Group does not hold or issue     
derivative financial instruments for speculative purposes.                      

For a forward foreign exchange contract to be treated as a hedge the instrument 
must be related to actual foreign currency assets or liabilities or to a        
probable commitment. It must involve the same currency or similar currencies as 
the hedged item and must also reduce the risk of foreign currency exchange      
movements on the Group's operations. Gains and losses arising on these contracts
are deferred and recognised in the profit and loss account, or as adjustments to
the carrying amount of fixed assets, only when the hedged transaction has itself
been reflected in the Group's accounts.                                         

For an interest rate swap to be treated as a hedge the instrument must be       
related to actual assets or liabilities or a probable commitment and must change
the nature of the interest rate by converting a fixed                           

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rate to a variable rate or vice versa. Interest differentials under these swaps 
are recognised by adjusting net interest payable over the periods of the        
contracts.                                                                      

If an instrument ceases to be accounted for as a hedge, for example because the 
underlying hedged position is eliminated, the instrument is marked to market and
any resulting profit or loss recognised at that time.                           

2. Turnover and segment information                                             

(a)   Turnover by business activity                                             

                                                        1999            1998
                                                 (pound)'000     (pound)'000

Product sales                                          125,013          71,021  
Licensing and development fees                           6,653           7,084  
  Royalties                                            2,212           2,223
                                                  ----------      ----------
                                                     133,878          80,328
                                                  ==========      ==========

(b)   Turnover by geographical destination                                      

                                                  1999            1998
                                                 (pound)'000     (pound)'000

Europe                                                  28,665          26,454  
United States of America                               104,372          53,155  
Other overseas markets                                     841             719  
                                                  ----------      ----------
                                                     133,878          80,328
                                                  ==========      ==========

(c)   Contribution by business activity                                         

                                                        [Enlarge/Download Table]

                                                         Licensing &                            
                                         Product sales   development    Royalties         Total 
Year to 31 December, 1999                  (pound)'000   (pound)'000   (pound)'000  (pound)'000 
                                                                                                

Turnover                                       125,013         6,653         2,212      133,878 
Cost of product sales                          (22,811)           --            --      (22,811)
Distribution costs                             (32,860)           --            --      (32,860)
Funded research and development costs               --        (5,190)           --       (5,190)
                                             ---------    ----------    ----------   ---------- 
                                                69,342         1,463         2,212       73,017 
Unfunded research and development costs                                                 (32,229)
Expenses not allocated                                                                  (10,416)
                                                                                     ---------- 
Operating profit                                                                         30,372 
                                                                                     ========== 

Turnover                                         71,021        7,084         2,223       80,328 
Cost of product sales                          (17,907)           --            --      (17,907)
Distribution costs                             (19,717)           --            --      (19,717)
Funded research and development costs               --        (7,290)           --       (7,290)
                                             ---------    ----------    ----------   ---------- 
                                                33,397          (206)        2,223       35,414 
Unfunded research and development costs                                                 (21,695)
Expenses not allocated                                                                   (5,840)
                                                                                     ---------- 
Operating profit                                                                          7,879 
                                                                                     ========== 

                                                                              83

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(d)   Geographical analysis by country of origin                                

                                                      1999            1998
Turnover:                                         (pound)'000     (pound)'000   

Europe                                                 28,665          26,454   
United States of America                              104,372          53,156   
Rest of world                                             841             719   
                                                ----------      ----------
                                                   133,878          80,329
                                                ==========      ==========

Operating profit (loss):                                                        

Europe                                                (11,773)        (11,113)  
United States of America                               42,145          18,992   
Rest of world                                              --              --   
                                                ----------      ----------
                                                    30,372           7,879
                                                ==========      ==========

Net assets:                                                                     

Europe                                                465,854          32,214   
United States of America                              213,084          18,380   
Rest of world                                             349              --   
                                                ----------      ----------
                                                   679,287          50,594
                                                ==========      ==========

(e)   Acquisitions                                                              

The analyses presented above include the following amounts in respect of        
operations acquired during the year:                                            

                                            Acquisition of Roberts
                                            Pharmaceutical Corporation
                                             ---------------------------
                                               Business     Geographic
                                               activity           area

                                          Product sales            USA
                                             (pound)'000     (pound)'000
Sales to third parties                                                          
  -   by destination                                 563             563
  -   by origin                                      563             563
Segment loss before cost of restructuring               (770)           (770)   
                                             ===========     ===========

Roberts Pharmaceutical Corporation had (pound)158,463,000 of net assets at 31   
December 1999. Of these (pound)162,562,000 arose in the USA, (pound)4,449,000 in
Europe and (pound)350,000 in the rest of the world.                             

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                                           Acquisition of Laboratoires Murat
                                           S.A., Fuisz Pharma GmbH & Co KG and
                                           Istoria Farmaceutici S.p.A.
                                           -----------------------------------
                                                Class of      Geographic
                                                business            area

                                    Product sales   Europe
                                             (pound)'000     (pound)'000
Sales to third parties                                                          
-   by destination                                     1,771           1,771    
-   by origin                                          1,771           1,771    
Segment profit                                           248             248    
Segment net assets                                     5,791           5,791    
                                             ===========     ===========

3. Cost of sales, gross profit and other operating expenses (net)               

In relation to the acquisitions of Roberts Pharmaceutical Corporation and       
Laboratoires Murat S.A., Fuisz Pharma GmbH & Co KG and Istoria Farmaceutici     
S.p.A. (collectively "Shire Europe"), continuing operations in 1999 include the 
following:                                                                      

                           Roberts
                            Pharmaceutical
                                              Corporation       Shire Europe
                                             (pound)'000       (pound)'000

Cost of product sales                                 269                 767   
Distribution Costs                                    134                 756   
Funded research and development costs                 443                  --   
Expenses not allocated                                487                  --   
Operating (loss) profit                              (770)                248   
                                             =========          ==========

4. Exceptional items reported after operating profit                            

The costs of a fundamental restructuring of continuing operations arose in      
respect of the reorganisation and restructuring of the Group as a result of the 
acquisition of Roberts Pharmaceutical Corporation, which has had a material     
effect on the nature and focus of the Group's operations.                       

There are no effects of the exceptional item on the amounts charged to the      
profit and loss account for taxation in the year ended 31 December 1999.        

5. Interest payable and similar charges                                         

                                                                [Download Table]

                                                                   1999         1998
                                                            (pound)'000  (pound)'000

                                                                                    
Bank loans and overdrafts and other loans wholly repayable          149          142
within 5 years                                                                      
Finance leases and hire purchase contracts                           32           72
                                                             ----------   ----------
                                                                    181          214
                                                             ==========   ==========

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6. Profit on ordinary activities before taxation                                

Profit on ordinary activities before taxation is stated after charging          
(crediting):                                                                    

                                                                [Download Table]

                                                              1999          1998   
                                                          (pound)'000   (pound)'000

                                                                                   
Staff costs (note 7)                                         20,848        16,125  
Auditors' remuneration                                                             
- audit fees                                                    289            75  
- other services                                                994           157  
Operating lease rentals                                                            
- plant and machinery                                           816           418  
- other                                                         909           401  
Depreciation of tangible fixed assets                                              
- owned                                                       1,089           927  
- held under finance leases and hire purchase contracts         344           373  
Amortisation of goodwill                                        678            --  
Amortisation of intangible fixed assets                       2,196           527  
Cost of employee share options                                   --            24  
Foreign exchange loss (gain)                                    503          (313) 
                                                         ----------    ----------  

The following amounts have been charged directly to share premium or costs of   
acquisition:                                                                    

Year ended 31 December 1999: non-audit fees of (pound)375,000 related to the    
acquisition of Roberts Pharmaceutical Corporation.                              

Year ended 31 December 1998: non-audit fees of (pound)400,000 related to an     
international offering completed in April 1998. Non-audit fees of (pound)295,000
related to the acquisition of Shire Richwood Inc.                               

7.    Staff costs                                                               

Particulars of employee costs (including Directors' remuneration) are shown     
below:                                                                          

                                                   1999               1998
                                            (pound)'000        (pound)'000

Wages and salaries                                  18,556             14,207   
Social security costs                                1,223              1,241   
Pension contributions                                1,069                677   
                                             ----------         ----------
                                                 20,848             16,125
                                             ==========         ==========

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The average monthly number of people employed by the Group during the year was  
as follows:                                                                     

                                                                [Download Table]

                                   1999         1998
                            (pound)'000  (pound)'000

                                                    
Manufacturing                        50           52
 Distribution                       254          210
General and administrative           63           57
Research and development            112           98
                             ----------   ----------
                                    479          417
                             ==========   ==========

8. Directors' remuneration, interests and transactions                          

Aggregate remuneration                                                          

The total amounts for Directors' remuneration and other benefits were as        
follows:                                                                        

                                                                [Download Table]

                                                                1999         1998
                                                         (pound)'000  (pound)'000

                                                                                 
Aggregate emoluments                                             934          829
Gains on exercise of share options                             2,539        1,941
Company contributions to money purchase pension schemes           62           44
                                                          ----------   ----------
                                                               3,535        2,814
                                                          ==========   ==========

No fees were payable to third parties in respect of Directors' services for     
either year.                                                                    

Directors waived emoluments of (pound)20,000 in both years.                     

The number of Directors who were members of the company pension scheme was as   
follows:                                                                        

                                                   1999               1998
                                            (pound)'000        (pound)'000

Money purchase schemes                                   3                  3   
                                             ==========         ==========

The above amounts for remuneration include the following in respect of the      
highest paid Director:                                                          

                                                                [Download Table]

                                                                1999         1998
                                                         (pound)'000  (pound)'000

                                                                                 
Aggregate emoluments                                           2,293          371
Company contributions to money purchase pension schemes           30           24
                                                          ----------   ----------
                                                               2,323          395
                                                          ==========   ==========

9. Tax on profit on ordinary activities                                         

The tax charge comprises:                                                       

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                                                        [Enlarge/Download Table]

                                                                      1999         1998
                                                               (pound)'000  (pound)'000

                                                                                       
Overseas corporation tax                                             8,439        2,852
                                                                ==========   ==========
Approximate gross tax losses to carry forward against certain                          
future UK corporation tax liabilities                               15,484       14,262
                                                                ==========   ==========

Additionally, the Group had non-UK tax losses to carry forward against certain  
future non-UK tax liabilities.                                                  

There was no unprovided deferred taxation liability at either year end.         

10. Profit attributable to Shire Pharmaceuticals Group plc                      

The profit for the financial year dealt with in the accounts of the company was 
(pound)3,408,000 (1998 - (pound)4,513,000). As provided by section 230 of the   
Companies Act 1985, no profit and loss account is presented in respect of the   
Company.                                                                        

11. Earnings per share                                                          

Earnings per share (EPS) 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.                                                

                                                                [Download Table]

                                      Basic and diluted      
                               ------------------------------
                                      1999               1998
                               (pound)'000        (pound)'000

                                                             
Profit for the financial year       12,570              6,247
                                ==========         ==========

The weighted average number of shares used in each year are as follows:         

                                                                [Download Table]

                                                                 1999         1998

                                                                                  
Weighted average number of shares in issue for basic EPS  145,202,383  136,924,061
Number of dilutive potential shares                         6,326,875    7,475,065
                                                          -----------  -----------
Total for fully diluted EPS                               151,529,258  144,399,126
                                                          ===========  ===========

12. Intangible fixed assets - intellectual property                             

                                                   Group             Company
                                            (pound)'000        (pound)'000

Cost                                                                            
As at 31 December 1998                               8,459                 31   
Additions                                           11,500                 --   
Acquisitions                                       226,100                 --   
Disposals                                            (161)                 --   
Intra-Group transfer                                     -               (31)   
Foreign exchange                                       278                 --   
                                             ----------         ----------

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As at 31 December 1999                             246,176                 --   
                                             ----------         ----------

Amortisation                                                                    
As at 31 December 1998                               (521)                 --   
Charge for the period                              (2,196)                 --   
Acquisition                                       (28,694)                 --   
Disposals                                               55                 --   
Foreign exchange                                        36                 --   
                                             ----------         ----------
As at 31 December 1999                            (31,320)                 --   
                                             ==========         ==========

Net book value                                                                  
As at 31 December 1998                               7,938                 31   
                                             ----------         ----------
As at 31 December 1999                             214,856                 --   
                                             ==========         ==========

13. Intangible fixed assets - goodwill                                          

                                                   Group           Company
                           (pound)'000

Cost                                                                            
 As at 31 December 1998                             --                --
Additions                                      470,209                --
                                            ----------        ----------
As at 31 December 1999                             470,209                --    
                                            ==========        ==========

Amortisation                                                                    
 As at 31 December 1998                             --                --
Charge for the period                                (678)                --    
                                            ----------        ----------
As at 31 December 1999                               (678)                --    
                                            ==========        ==========

Net book value                                                                  
 As at 31 December 1998                             --                --
                                            ----------        ----------
As at 31 December 1999                             469,531                --    
                                            ==========        ==========

14. Tangible fixed assets                                                       

(a)   Group                                                                     

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                                                        [Enlarge/Download Table]

                                         Freehold          Office                            
                                         land and   furniture and     Equipment              
                                        buildings        fittings     and other         Total
                                      (pound)'000     (pound)'000   (pound)'000   (pound)'000
                                                                                             
         Cost                                                                                
     As at 31 December 1998                   463           2,015         5,511        7,989 
    Additions                                  --             602           701        1,303 
  Acquisition                              17,448           2,666         3,072       23,186 
    Disposals                                (466)            (72)         (949)      (1,487)
Foreign exchange                                3             110           302          415 
                                          -------         -------       -------      ------- 
As at 31 December 1999                     17,448           5,321         8,637       31,406 
                                          =======         =======       =======      ======= 
 Depreciation                                                                                
     As at 31 December 1998                   (41)           (839)       (2,438)      (3,318)
       Charge                                  (4)           (436)         (993)      (1,433)
  Acquisition                              (1,438)         (1,680)         (371)      (3,489)
    Disposals                                  46              32           353          431 
Foreign exchange                               (1)            (87)         (253)        (341)
                                          -------         -------       -------      ------- 
As at 31 December 1999                     (1,438)         (3,010)       (3,702)      (8,150)
                                          =======         =======       =======      ======= 
Net book value                                                                               
     As at 31 December 1998                   422           1,176         3,073        4,671 
                                          -------         -------       -------      ------- 
As at 31 December 1999                     16,010           2,304         4,942       23,256 
                                          =======         =======       =======      ======= 
Leased assets included above, at NBV                                                         
     As at 31 December 1998                    --              --           592          592 
                                          -------         -------       -------      ------- 
As at 31 December 1999                         --              --           255          255 
                                          =======         =======       =======      ======= 

Freehold land, amounting to (pound)2,300,000 (1998 - (pound)nil) for the Group  
has not been depreciated.                                                       

Depreciation charged on assets held under finance leases and hire purchase      
contracts is disclosed in Note 6.                                               

15. Tangible fixed assets (continued)                                           

(b) Company                                                                     

            Office
                   furniture and     Equipment
                                      fittings     and other         Total
                                   (pound)'000   (pound)'000   (pound)'000
Cost                                                                            
As at 31 December 1998                        358         1,284         1,642   
Additions                                     170            32           202   
                                        ------        ------        ------
As at 31 December 1999                        528         1,316         1,844   
                                        ======        ======        ======
Depreciation                                                                    
   As at 31 December 1998                  (129)         (412)         (541)
     Charge                                (101)         (328)         (429)
                                        ------        ------        ------
As at 31 December 1999                       (230)         (740)         (970)  
                                        ======        ======        ======
Net book value                                                                  
  As at 31 December 1998                   229           872         1,101
                                        ------        ------        ------
As at 31 December 1999                        298           576           874   
                                        ======        ======        ======
Leased assets included above, at NBV                                            
  As at 31 December 1998                    --           394           394
                                        ------        ------        ------
As at 31 December 1999                         --           233           233   
                                        ======        ======        ======

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Depreciation charged on leased assets was (pound)161,000 in both years.         

The Directors are satisfied that the aggregate value of fixed assets at 31      
December 1999 is not less than the aggregate amount at which they are stated in 
the Company's accounts.                                                         

16.  Fixed asset investments                                                    

(a) Group                                                                       

The Group has an investment in the convertible preference shares of RiboGene,   
Inc., a drug discovery company targeting infectious diseases. The shares have no
voting rights. One-third of the preference shares is convertible at the option  
of the Group to ordinary shares of RiboGene at each of the first three          
anniversary dates of the investment. The investment is classified as held to    
maturity.                                                                       

The cost of the investment is (pound)1,617,000 as at 31 December 1999.          

(b) Company                                                                     

                                                        [Enlarge/Download Table]

                                                                Amount due             
                                      Shares in                       from             
                                     subsidiary  Convertible    subsidiary             
                                   undertakings   loan stock  undertakings        Total
                                    (pound)'000  (pound)'000   (pound)'000  (pound)'000
                                                                                       
As at 31 December 1998                   35,460       69,300      130,182       234,942
Net acquisitions                        627,672           --           --       627,672
Net advances                                 --           --       18,477        18,477
Interest on intra-Group loan note       (6,930)        6,930           --            --
                                     ----------   ----------    ----------   ----------
As at 31 December 1999                  656,202       76,230      148,659       881,091
                                     ==========   ==========    ==========   ==========

Shire Holdings (Europe) Limited, a Group company, issued Unsecured Convertible  
Redeemable Loan Stock (1997-2002) in favour of the Company in consideration for 
the whole of the issued share capital of Shire Laboratories Inc. at a price of  
(pound)60m. The loan stock has a face value of (pound)96.6m.                    

(c) Principal subsidiaries                                                      

The Company owned directly or indirectly the whole of the issued ordinary share 
capital of the following companies at 31 December 1999:                         

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                                                   Country of                                                              
Subsidiary                                         incorporation/operation     Principal activity                          
---------------------------------------------------------------------------------------------------------------------------

                                                                                                                           
Shire Pharmaceuticals Limited*                     UK                          Marketing of pharmaceuticals.               

Shire Pharmaceutical Development Limited*          UK                          Development of pharmaceuticals,             
                                                                               including on behalf of other                
                                                                               Group companies.                            

Shire Pharmaceutical Contracts Limited*            UK                          Development and licensing of                
                                                                               pharmaceuticals.                            

The Endocrine Centre Limited                       UK                          Endocrine clinic (dormant).                 

Shire Holdings (Europe) Limited*                   UK                          Intermediate holding company.               

Shire International Licensing BV                   Netherlands                 Licensing and development of                
                                                                               pharmaceuticals.                            

Shire Holdings Limited*                            Bermuda/UK                  Intermediate holding company                

Shire Laboratories Inc.                            USA                         Development and licensing of                
                                                                               pharmaceuticals, including on behalf of     
                                                                               other Group companies.                      

Shire Richwood Inc.                                USA                         Marketing of pharmaceuticals.               

Roberts Pharmaceutical Corporation                 USA                         Marketing of pharmaceuticals.               

Laboratoires Murat S.A.                            France                      Marketing of pharmaceuticals.               
(renamed Shire France)                                                                                                     

Fuisz Pharma GmbH and Co KG                        Germany                     Marketing of pharmaceuticals.               
(renamed Shire Deutschland)                                                                                                

Istoria Farmaceutici S.p.A                         Italy                       Marketing of pharmaceuticals.               
(renamed Shire Italia)                                                                                                     

Shire Holdings AG                                  Switzerland                 Intermediate holding company                

Shire Holdings US Inc.                             USA                         Intermediate holding company                

Shire Supplies US llc                              USA                         Licensing of pharmaceuticals                

All subsidiary undertakings have been included in these consolidated accounts.  

* Held directly by Shire Pharmaceuticals Group plc.                             

(d) Acquisition of subsidiary undertaking                                       

On 23 December 1999, Shire acquired 100per cent. of the outstanding shares of   
Roberts Pharmaceutical Corporation in exchange for 100,767,482 ordinary shares. 
Roberts Pharmaceutical Corporation is an international pharmaceutical company   
which licenses, acquires, develops and commercialises post-discovery drugs in   
selected therapeutic categories. The transaction was accounted for using        
acquisition accounting.                                                         

On 22 October 1999, Shire completed the acquisition of all the assets and       
liabilities of Laboratoires Murat S.A., Fuisz Pharma GmbH and the Cebutid       
Trademark for (pound)23.8 million, including the costs of acquisition. The      
purchase price consisted of (pound)21.8 million in cash and the assumption of   
(pound)2 million in debt. Of the (pound)21.8 million in cash, (pound)4.5 million
related directly to the Cebutid Trademark which has been accounted for as an    
intangible fixed asset addition.                                                

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On 17 November 1999, Shire completed the acquisition of all the assets and      
liabilities of Istoria Farmaceutici S.p.A, for (pound)4 million, including the  
costs of acquisition. The purchase consideration was (pound)4 million in cash.  

The above transactions have provided Shire with marketing and distribution      
operations in France, Germany and Italy. Shire has accounted for the            
acquisitions using acquisition accounting.                                      

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17 Fixed asset investments (continued)                                          
(d) Acquisition of subsidiary undertaking (continued)                           
Roberts Pharmaceutical Corporation                                              

The following table sets out the book values of the identifiable assets and     
liabilities acquired and their fair value to the Group:                         

                                                        [Enlarge/Download Table]

                                                      Accounting         Other               
                                                          policy   significant    Fair value 
                          Book value   Revaluation     alignment         items      to group 
                         (pound)'000   (pound)'000   (pound)'000   (pound)'000   (pound)'000 
                                                                                             
Fixed assets                                                                                 
   Intangible                214,078       (21,287)           --            --       192,791 
     Tangible                 22,816        (3,247)           --            --        19,569 
  Investments                  6,313        (4,696)           --            --         1,617 

Current assets                                                                               
       Stocks                 17,886        (1,811)         (282)           --        15,793 
      Debtors                 23,460        (2,178)           --            --        21,282 
  Investments                 27,382            --            --            --        27,382 
         Cash                 22,936            --            --            --        22,936 
                          ----------    ----------    ----------    ----------    ---------- 
Total assets                 334,871       (33,219)         (282)           --       301,370 
                          ----------    ----------    ----------    ----------    ---------- 
   Bank loans                (78,959)           --            --            --       (78,959)
    Creditors                (39,883)           --            --       (11,336)      (51,219)
                          ----------    ----------    ----------    ----------    ---------- 
Total liabilities           (118,842)           --            --       (11,336)     (130,178)
                          ----------    ----------    ----------    ----------    ---------- 
Net assets                   216,029       (33,219)         (282)      (11,336)       171,192
                          ==========    ==========    ==========    ==========    ========== 

Goodwill                                                                             456,479 
                                                                                  ---------- 
                                                                                     627,671 
                                                                                  ========== 

Satisfied by                                                                                 
Shares issued                                                                        620,223 
Expenses of acquisition                                                                7,448 
                                                                                  ---------- 
                                                                                     627,671 
                                                                                  ========== 

Details of the preliminary fair value adjustments are as follows, these will be 
finalised in 2000:                                                              

Revaluation adjustments relate to (pound)3,133,000 write down of the Roberts'   
building to market value, (pound)114,000 write down of other tangible fixed     
assets, (pound)21,287,000 write down of intangible fixed assets to estimated    
market value, (pound)1,811,000 stock write down to net realisable value,        
(pound)4,696,000 write down of a fixed asset investment due to a permanent      
diminution in value and (pound)2,178,000 write down of debtors balances not     
considered recoverable.                                                         

Other significant items comprise the fair value of the deficiency of the        
Roberts' Supplemental Executive Retirement Plan.                                

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18. Fixed asset investments (continued)                                         
(d) Acquisition of subsidiary undertaking (continued)                           

Net cash in respect of the acquisition comprised:                               

                                                                     (pound)'000

Cash at bank and in hand acquired                                         22,936
                                                                      ==========

Roberts Pharmaceutical Corporation earned, under US GAAP, a profit after        
taxation but before exceptional items of (pound)5,667,000 in the year ended 31  
December 1999 (year ended 31 December 1998 - (pound)10,113,000), of which a     
profit of (pound)5,785,000 arose in the period from 1 January 1999 to 23        
December 1999. The summarised profit and loss account and statement of total    
recognised gains and losses for the period from 1 January 1999 to 23 December   
1999, shown on the basis of the accounting policies of Roberts Pharmaceutical   
Corporation under US GAAP prior to the acquisition, are as follows:             

Profit and loss account                                                         
                                                                     (pound)'000

Turnover                                                                114,863 
Cost of sales                                                           (37,812)
                                                                     -----------
Gross profit                                                             77,051 
Other operating expenses (net)                                          (60,883)
                                                                     -----------
Operating profit                                                         16,168 
Finance charges (net)                                                    (3,942)
                                                                     -----------
Profit on ordinary activities before taxation                            12,226 
Tax on profit on ordinary activities                                     (6,441)
                                                                     -----------
Profit on ordinary activities after taxation                              5,785 
                                                                    ==========

Statement of total recognised gains and losses                                  
                                                                     (pound)'000

Profit for the financial period                                           5,785 
Gain on foreign currency translation                                        656 
                                                                     -----------
Total recognised gains and losses relating to the period                  6,441 
                                                                    ==========

Laboratoires Murat S.A.                                                         

The following table sets out the book values of the identifiable assets and     
liabilities acquired and their fair value to the Group, the fair values         
attributed are preliminary and will be finalised in 2000:                       

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                                         Accounting         Other               
                                             policy   significant    Fair value 
                           Book value     alignment         items      to group 
                          (pound)'000   (pound)'000   (pound)'000   (pound)'000 
                                                                                
Fixed assets                                                                    
   Intangible                     644           (11)           --           633 
     Tangible                      12            --            --            12 
  Investments                       5            (5)           --            -- 

Current assets                                                                  
       Stocks                     182            --            --           182 
      Debtors                     771             5          (220)          556 
         Cash                     221            --            --           221 
                           ----------    ----------    ----------    ---------- 
Total assets                    1,835           (11)         (220)        1,604 
                           ----------    ----------    ----------    ---------- 
    Creditors                  (1,879)           --         1,103          (776)
                           ----------    ----------    ----------    ---------- 
Net (liabilities) assets          (44)          (11)          883           828 
                           ==========    ==========    ==========    ========== 

Goodwill                                                                  1,155 
                                                                     ---------- 
                                                                          1,983 
                                                                     ---------- 

Satisfied by                                                                    
Debt assumed                                                              1,983 
                                                                     ========== 

The fair value adjustments represent accounting policy alignments to UK GAAP, a 
reclassification of a debtors balance and the forgiveness of intercompany debt  
with the old parent company of Laboratoires Murat.                              

Net cash outflows in respect of the acquisition comprised:                      

                                                                     (pound)'000

Cash at bank and in hand acquired                                            221
                                                                      ==========

Laboratoires Murat made a loss after taxation of (pound)9,000 in the year ended 
31 December 1999 (year ended 31 December 1998: loss of (pound)2,000), of which a
loss of (pound)106,000 arose in the period from 1 January 1999 to 22 October    
1999. The summarised profit and loss account for the period from 1 January 1999 
to 22 October 1999, shown on the basis of the accounting policies of            
Laboratoires Murat prior to the acquisition is as follows:                      

Profit and loss account                                                         

                                                                     (pound)'000

Turnover                                                                  2,562 
Cost of sales                                                            (1,243)
                                                                     -----------
Gross profit                                                              1,319 
Other operating expenses (net)                                           (1,370)
                                                                     -----------
Operating loss                                                              (51)
Finance charges (net)                                                       (55)
                                                                     -----------
Loss on ordinary activities before and after taxation                      (106)
                                                                     ===========

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Fuisz Pharma GmbH & Co KG                                                       

The following table sets out the book values of the identifiable assets and     
liabilities acquired and their fair value to the Group, the fair values         
attributed are preliminary and will be finalised in 2000:                       

                                                                [Download Table]

                                         Accounting           Other                 
                                             policy     significant    Fair value   
                          Book value      alignment           items      to group   
                         (pound)'000    (pound)'000     (pound)'000   (pound)'000   
                                                                                    
Fixed assets                                                                        
   Intangible                   9,671          (7,669)            --          2,002 
     Tangible                      14              --             --             14 

Current assets                                                                      
       Stocks                      22              --             --             22 
      Debtors                     192              --             --            192 
         Cash                     721              --             --            721 
                           ----------      ----------     ----------     ---------- 
Total assets                   10,620          (7,669)            --          2,951 
                           ----------      ----------     ----------     ---------- 
    Creditors                  (8,463)             --          7,797           (666)
                           ----------      ----------     ----------     ---------- 
Net assets                      2,157         (7,669)          7,797          2,285 
                           ==========      ==========     ==========     ========== 

Goodwill                                                                     11,061 
                                                                         ---------- 
                                                                             13,346 
                                                                         ========== 

Satisfied by                                                                        
Cash from own resources                                                      13,346 
                                                                         ========== 

The fair value adjustments represent accounting policy alignments to UK GAAP and
the forgiveness of an intercompany debt with the old parent company of Fuisz    
Pharma.                                                                         

Net cash outflows in respect of the acquisition comprised:                      

                                                                     (pound)'000

Cash consideration                                                      (13,346)
Cash at bank and in hand acquired                                           721 
                                                                     -----------
                                                                        (12,625)
                                                                     ===========

19 Fixed asset investments (continued)                                          
(d) Acquisition of subsidiary undertakings (continued)                          

Fuisz Pharma recorded a loss after taxation of (pound)255,000 in the year ended 
31 December 1999 (year ended 31 December1998: loss of (pound)582,000), of which 
a loss of (pound)207,000 arose in the period from 1 January 1999 to 22 October  
1999. The summarised profit and loss account for the period from 1 January 1999 
to 22 October 1999, shown on the basis of the accounting policies of Fuisz      
Pharma prior to the acquisition is as follows:                                  

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Profit and loss account                                                         
                                                                     (pound)'000

Turnover                                                                  4,571 
Cost of sales                                                            (1,447)
                                                                     -----------
Gross profit                                                              3,124 
Other operating expenses (net)                                           (2,951)
                                                                     -----------
Operating profit                                                            173 
Finance charges (net)                                                      (380)
                                                                     -----------
Loss on ordinary activities before and after taxation                      (207)
                                                                     ===========

Istoria Farmaceutici S.p.A.                                                     

The following table sets out the book values of the identifiable assets and     
liabilities acquired and their fair value to the Group, the fair values         
attributed are preliminary and will be finalised in 2000:                       

                                                                [Download Table]

                                        Accounting         Other              
                                            policy   significant   Fair value 
                          Book value     alignment         items     to group 
                         (pound)'000   (pound)'000   (pound)'000  (pound)'000 
                                                                              
Fixed assets                                                                  
   Intangible                  2,125          (145)           --        1,980 
     Tangible                    102            --            --          102 

Current assets                                                                
       Stocks                    269            --            --          269 
      Debtors                    426            --            --          426 
         Cash                    271            --            --          271 
                          ----------    ----------    ----------   ---------- 
Total assets                   3,193          (145)           --        3,048 
                          ----------    ----------    ----------   ---------- 
    Creditors                 (2,817)           --         2,264         (553)
                          ----------    ----------    ----------   ---------- 
Net assets                       376          (145)        2,264        2,495 
                          ==========    ==========    ==========   ========== 

Goodwill                                                                1,514 
                                                                   ---------- 
                                                                        4,009 
                                                                   ========== 

Satisfied by                                                                  
Cash from own resources                                                 4,009 
                                                                   ========== 

The fair value adjustments represent accounting policy alignments to UK GAAP and
the forgiveness of an intercompany debt with the old parent company of Istoria  
Farmaceutici.                                                                   

Net cash outflows in respect of the acquisition comprised:                      

                                                                     (pound)'000

Cash consideration                                                       (4,009)
Cash at bank and in hand acquired                                            271
                                                                    ----------
                                                                         (3,738)
                                                                    ==========

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Istoria Farmaceutici made a loss after taxation of (pound)242,000 in the year   
ended 31 December 1999 (year ended 31 December 1998: loss of (pound)527,000), of
which a loss of (pound)241,000 arose in the period from 1 January 1999 to 17    
November 1999. The summarised profit and loss account for the period from 1     
January 1999 to 17 November 1999, shown on the basis of the accounting policies 
of Istoria Farmaceutici prior to the acquisition is as follows:                 

Profit and loss account                                                         
                                                                     (pound)'000

Turnover                                                                  1,530 
Cost of sales                                                              (470)
                                                                    ----------
Gross profit                                                              1,060 
Other operating expenses (net)                                           (1,767)
                                                                    ----------
Operating loss                                                             (707)
Finance charges (net)                                                       466 
                                                                    ----------
Loss on ordinary activities before and after taxation                      (241)
                                                                    ==========

20. Stocks                                                                      

                                                        [Enlarge/Download Table]

                                           Group                        Company          
                               ----------------------------  ----------------------------
                                      1999             1998         1999             1998
                               (pound)'000      (pound)'000  (pound)'000      (pound)'000
                                                                                         
Raw materials and consumables        4,081           4,175            --              -- 
Finished goods                      20,451            2,477           --              -- 
                                ----------      ----------    ----------      ---------- 
                                    24,532           6,652            --              -- 
                                ==========      ==========    ==========      ========== 

There is no material difference between the balance sheet value of stocks and   
their replacement costs.                                                        

21. Debtors                                                                     

                                                        [Enlarge/Download Table]

                                                           Group                        Company          
                                               ----------------------------  ----------------------------
                                                      1999             1998         1999             1998
                                               (pound)'000      (pound)'000  (pound)'000      (pound)'000
                                                                                                         
Amounts falling due within one year:                                                                     
Trade debtors                                       35,145          14,692            --              -- 
          VAT                                          735             345           164              45 
Other debtors                                        5,500           1,407         1,548             100 
Prepayments and accrued income                       4,108           1,116           208             119 
                                                ----------      ----------    ----------      ---------- 
                                                    45,488          17,560         1,920             264 
                                                ==========      ==========    ==========      ========== 
Amounts falling due after more than one year:                                                            
Notes receivable                                       262              --            --              -- 
Other debtors                                        1,130              --            --              -- 
                                                ----------      ----------    ----------      ---------- 
                                                     1,392              --            --              -- 
                                                ==========      ==========    ==========      ========== 

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22. Current asset investments                                                   

                                                                [Download Table]

                                     Group                        Company          
                         ----------------------------  ----------------------------
                                1999             1998         1999             1998
                         (pound)'000      (pound)'000  (pound)'000      (pound)'000
                                                                                   
Institutional cash fund          708           17,522          708           17,522
Commercial paper              24,322            3,913           --               --
Marketable securities         24,820               --           --               --
                          ----------       ----------   ----------       ----------
                              49,850           21,435          708           17,522
                          ==========       ==========   ==========       ==========

23. Creditors: amounts falling due within one year                              

                                                        [Enlarge/Download Table]

                                                                      Group                        Company          
                                                          ----------------------------  ----------------------------
                                                                 1999             1998         1999             1998
                                                          (pound)'000      (pound)'000  (pound)'000      (pound)'000
                                                                                                                    
Convertible debt                                                                                                    
Zero coupon convertible unsecured loan note (note 19)           5,460               --        5,460               --
                                                           ----------       ----------   ----------       ----------

Other creditors                                                                                                     

Obligations under finance leases and hire purchase                                                                  
contracts                                                          22              705           --               44
Bank term loan                                                    776               --           --               --
  Other loans                                                   3,501               --           --               --
Trade creditors                                                19,385            6,656          103              235
Payable in respect of termination of a licence agreement          500              500           --               --
Overseas corporation tax payable                                3,681               66           --               --
VAT                                                               151              319           --               --
Social security and PAYE                                          434              179           99               46
Other creditors                                                13,018              952           --               --
Restructuring and merger accrual                               24,441               --       12,925               --
Accruals and deferred income                                   33,945            5,007        1,198            1,148
Accrued pension contributions                                   1,826               --           --               --
                                                           ----------       ----------   ----------       ----------
                                                              101,680           14,384       14,325            1,473
                                                           ----------       ----------   ----------       ----------
                                                              107,140           14,384       19,785            1,473
                                                           ==========       ==========   ==========       ==========

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24. Creditors: amounts falling due after more than one year                     

                                                        [Enlarge/Download Table]

                                                                         Group                        Company          
                                                             ----------------------------  ----------------------------
                                                                    1999             1998         1999             1998
                                                             (pound)'000      (pound)'000  (pound)'000      (pound)'000
                                                                                                                       
Convertible debt                                                                                                       
Zero coupon convertible unsecured loan note                        1,861               --        1,861               --
                                                              ----------       ----------   ----------       ----------

Other creditors                                                                                                        
Obligations under finance leases and hire purchase                                                                     
    contracts                                                         --               22           --               --
Bank term loan                                                    76,783               --           --               --
Accruals and deferred income                                          --              236           --               --
Payable in respect of termination of a licence agreement             750            1,250           --               --
Other creditors                                                      739               --           --               --
                                                              ----------       ----------   ----------       ----------
                                                                  78,272            1,508           --               --
                                                              ----------       ----------   ----------       ----------
                                                                  80,133            1,508        1,861               --
                                                              ==========       ==========   ==========       ==========

Borrowings are repayable as follows:                                                                                   

Convertible loan note:                                                                                                 
Between one and two years                                            931               --          931               --
Between two and five years                                           930               --          930               --
                                                              ==========       ==========   ==========       ==========

Obligations under finance leases and hire purchase contracts:                                                          
Between one and two years                                             --               22           --               --
                                                              ==========       ==========   ==========       ==========

Bank term loan:                                                                                                        

Between two and five years                                        76,783               --           --               --
                                                              ==========       ==========   ==========       ==========

25. Creditors: amounts falling due after more than one year (continued)         

(pound)77.6m ($125m) five year term loan                                        

The Company entered into a (pound)77.6m ($125m) five year term loan with DLJ    
Capital Funding Inc. on 19 November 1999 of which (pound)0.8m falls due within  
one year. This loan replaced an existing $125m loan facility in the name of     
Roberts Pharmaceutical Corporation that had been taken out to finance the       
acquisition of Pentasa in 1998. The new loan is in the name of the parent       
company, Shire Pharmaceuticals Group plc together with Roberts Pharmaceutical   
Corporation and the other US subsidiaries of Shire. The loan is accounted for in
the books of Roberts Pharmaceutical Corporation. The applicable interest rate   
ranges between 0.5 per cent and 1.5 per cent over the higher of the prime rate  
of DLJ Capital Funding Inc., or the US Federal Funds Rate plus 0.5 per cent or  
between 1.5 per cent and 2.5 per cent over the London Interbank Overnight Rate  
(as adjusted in accordance with the loan agreement), in each case depending on  
the Company's credit rating.                                                    

All obligations under the facility are jointly and severally guaranteed by the  
Company and its subsidiaries and is initially secured by all material property  
owned by the Company and its subsidiaries and the capital stock of the          
subsidiaries.                                                                   

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(pound)7.3m ($11.8m) Unsecured Convertible Zero Coupon Loan Note                

The Company financed the purchase of intellectual property relating to the      
manufacture of Adderall from Arenol Corporation by a total of (pound)7.3m       
($11.8m) in loan notes. On 5 March 1999, the Company issued a (pound)3.6m       
($5.8m) principal amount unsecured convertible Zero Coupon Loan Note due 30 July
2001, and a (pound)3.7m ($6m) principal amount Unsecured Convertible Zero Coupon
Loan Note due 30 July 2004. Both loan notes are in the name of the parent       
company, Shire Pharmaceuticals Group plc. Amounts not cancelled by the specified
dates can be converted into the number of ordinary shares equal to the amounts  
not cancelled divided by the lower of (pound)3.565 and the midweek closing price
of the ordinary shares on the London Stock Exchange on the relevant date        
translated at the exchange rate on that date.                                   

Both loan notes carry the option to convert at dates earlier than the due dates,
with (pound)5.5m ($8.8m) convertible in the year ended 31 December 2000,        
(pound)0.9m ($1.5m) convertible in the year ended 31 December 2001 and          
(pound)0.9m ($1.5m) convertible in the year ended 31 December 2002.             

26. Derivatives and other financial instruments                                 

Financial instruments play an important role in creating or changing the risks  
the Group faces in its activities. The numerical disclosures in this note deal  
with financial assets and financial liabilities as defined in Financial         
Reporting Standard 13 "Derivatives and other financial instruments: Disclosures"
("FRS 13"). Certain financial assets such as investments in subsidiary companies
are excluded from the scope of these disclosures.                               

As permitted by FRS 13, short term debtors and creditors have been excluded from
the disclosures, other than the currency disclosures.                           

Interest rate profile                                                           

The currency and interest rate profile of the Group's financial assets excluding
short term debtors at 31 December 1999 are as below. Current asset investments  
comprise institutional cash funds, commercial paper and marketable securities as
detailed in note 17. The sterling cash deposits comprise deposits placed on     
money market at call, seven-day and monthly rates.                              

                                                        [Enlarge/Download Table]

                            Cash               Current asset investments               
                ----------------------------  ----------------------------             
                Variable rate     Fixed rate  Variable rate     Fixed rate        Total
                  (pound)'000    (pound)'000    (pound)'000    (pound)'000  (pound)'000
                                                                                       
Sterling                3,417          6,714            708             --       10,839
US Dollar              24,117             --             --         49,142       73,259
Dutch Gilder              436             --             --             --          436
Deutsche Mark             729             --             --             --          729
  Italian Lire            358             --             --             --          358
    Other                 267             --             --             --          267
                   ----------     ----------     ----------     ----------   ----------
                       29,324          6,714            708         49,142       85,888
                   ==========     ==========     ==========     ==========   ==========

After taking into account interest rate swaps and forward foreign currency      
contracts entered into by the Group, the interest rate profile of the Group's   
financial liabilities at 31 December 1999 was as follows:                       

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                                                                [Download Table]

Currency                       Total  Floating rate   Fixed rate  Interest free
                                1999           1999         1999           1999
                         (pound)'000    (pound)'000  (pound)'000    (pound)'000
                                                                               
US Dollar:                                                                     
- Convertible debt             7,321            --            --          7,321
- Borrowings                  79,699        77,559         2,140             --
French Franc borrowings        1,361            --            --          1,361
                          ----------    ----------    ----------     ----------
Total                         88,381        77,559         2,140          8,682
                          ==========    ==========    ==========     ==========

The French Franc borrowings represent the balance of the debt assumed on the    
purchase of Laboratoires Murat S.A.                                             

There were no borrowings at 31 December 1998.                                   

27. Derivatives and other financial instruments (continued)                     

Interest rate profile (continued)                                               

Further analysis of the interest rate profile at 31 December 1999 is as follows.

                                  1999
                                 -----------------------------------------------
Currency                                   Fixed rate              Interest free
                                 -----------------------------------------------
                                                       Weighted         Weighted
                                      Weighted   average period          average
                                       average   for which rate        period to
                                 interest rate         is fixed         maturity
                                           (%)            Years            Years
US Dollar                                                                       
- Convertible debt                          --               --              0.9
- Borrowings                               6.0              1.0               --
French Franc borrowings                     --               --              1.0
                                    ----------       ----------       ----------
Total                                      6.0              1.0              1.9
                                    ==========       ==========       ==========

Further details of interest rates on long term borrowings are given in note 19. 

Currency exposures                                                              

The Group's objectives in managing the currency exposures arising from its net  
investment overseas (in other words, its structural currency exposures) are to  
maintain a low cost of borrowings and to retain some potential for              
currency-related appreciation while partially hedging against currency          
depreciation. Gains and losses arising from these structural currency exposures 
are recognised in the statement of total recognised gains and losses.           

The table below shows the Group's currency exposures; in other words, those     
transactional (or non-structural) exposures that give rise to the net currency  
gains and losses recognised in the profit and loss account. Such exposures      
comprise the monetary assets and monetary liabilities of the Group that are not 
denominated in the operating (or "functional") currency of the operating unit   
involved, other than certain                                                    

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non-sterling borrowings treated as hedges of net investments in overseas        
operations. As at 31 December 1999 these exposures were as follows:             

                                                        [Enlarge/Download Table]

                                            Net foreign currency monetary assets (liabilities)                   
Functional currency  ------------------------------------------------------------------------------------------- 
of Group operation                                                                                               
                       US dollar              Irish          Dutch      Norwegian            Other         Total 
                     (pound)'000        (pound)'000    (pound)'000    (pound)'000      (pound)'000   (pound)'000 
                                                                                                                 
Sterling                  (4,035)               345            443           (336)              59        (3,523)
                     ===========        ===========    ===========    ===========      ===========   =========== 

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The exposures at 31 December 1998 for comparison purposes were as follows:      

                                                        [Enlarge/Download Table]

                                                 Net foreign currency monetary assets (liabilities)              
Functional currency  ------------------------------------------------------------------------------------------- 
of Group operation                                                                                               
                       US dollar              Irish          Dutch      Norwegian            Other         Total 
                     (pound)'000        (pound)'000    (pound)'000    (pound)'000      (pound)'000   (pound)'000 
                                                                                                                 
Sterling                     (65)                 2            (26)          (464)              21          (573)
                     ===========        ===========    ===========    ===========      ===========   =========== 

The amounts shown in the tables above take into account the effect of any       
currency swaps, forward contracts and other derivatives entered into to manage  
these currency exposures.                                                       

As at 31 December 1999, the Group also held open various currency swaps and     
forward contracts that the Group had taken out to hedge expected future foreign 
currency sales.                                                                 

Maturity of financial liabilities                                               

The maturity profile of the Group's financial liabilities at 31 December 1999 is
shown in note 19.                                                               

Borrowing facilities                                                            

The Group had undrawn committed borrowing facilities at 31 December 1999, in    
respect of which all conditions precedent had been met, as follows:             

                                                           1999             1998
                                                    (pound)'000      (pound)'000

Expiring in more than two years                          77,558               --
                                                    ===========      ===========

Fair values                                                                     

There is no material difference between the book values and fair values of the  
Group's financial assets and liabilities at the end of either year.             

Gains on losses and hedges                                                      

The Group had no forward foreign currency contracts outstanding at 31 December  
1998 or 31 December 1999.                                                       

                                                                             105

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28. Called-up share capital                                                     

                                                        [Enlarge/Download Table]

                                                                            Number             
                                                                              '000  (pound)'000
                                                                                               
Authorised                                                                                     
At 31 December 1998 - ordinary shares of 5p each                           200,000       10,000
                                                                       -----------  -----------
At 31 December 1999 -  ordinary shares of 5p each                          400,000       20,000
                                                                       -----------  -----------

Allotted, issued and fully paid                                                                
At 1 January 1998 - ordinary shares of 5p each                             124,531        6,226
Issued on exercise of options for cash consideration                         5,700          286
Issued as part consideration for in-licenced research and development          435           22
Issued as part consideration for product rights                              1,961           98
Issued on conversion of zero coupon note                                     2,465          123
Issued pursuant to international offering for cash consideration             6,000          300
                                                                       -----------  -----------
At 31 December 1998 - ordinary shares of 5p each                           141,092        7,055
Issued on exercise of options for cash consideration                         2,660          133
Issued on acquisition of subsidiary undertaking                            100,767        5,038
                                                                       -----------  -----------
At 31 December 1999 - ordinary shares of 5p each                           244,519       12,226
                                                                       ===========  ===========

During the year ended 31 December 1999 the authorised share capital of the      
Company was increased by (pound)10,000,000 through the creation of 200,000,000  
ordinary shares of 5p each.                                                     

During the year the Company allotted 100,767,000 ordinary shares with a nominal 
value of (pound)5,038,000 in connection with the acquisition of Roberts         
Pharmaceutical Corporation. These shares were issued at a premium of            
(pound)615,185,000.                                                             

The Company's Directors and employees have been granted options over ordinary   
shares under the Shire Holdings Limited Share Option Scheme ("SHL Scheme"), the 
Imperial Pharmaceutical Services Limited Employee Share Option Scheme (Number   
One) ("SPC Scheme"), the Pharmavene 1991 Stock Option Plan ("SLI Plan"), the    
Shire Pharmaceuticals Executive Share Option Scheme (Parts A and B) ("Executive 
Scheme"), the Shire Pharmaceuticals Sharesave Scheme ("Sharesave Scheme"), the  
Shire Pharmaceuticals Group plc Employee Stock Purchase Plan ("Stock Purchase   
Plan"), the Richwood 1993 and 1995 Stock Option Plans ("SRI Plan") and the      
Roberts Stock Options Plans ("Roberts Plan").                                   

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28. Called-up share capital (continued)                                         

The following table sets forth certain information relating to changes to       
options outstanding in the year:                                                

                                                        [Enlarge/Download Table]

                                                                                             As at
                                           As at                                                31
                                       1 January     Options    Options       Options     December
                                            1999     granted  exercised        lapsed         1999
                                                                                                  
Number of ordinary shares of 5p each                                                              
SHL Scheme                             1,751,920          --   (787,640)           --      964,280
SPC Scheme                                57,600          --     (9,600)           --       48,000
Executive Scheme 'A'                     456,299      44,563    (58,044)      (51,127)     391,691
Executive Scheme 'B'                   4,903,064   1,360,437   (474,539)     (809,611)   4,979,351
Sharesave Scheme                         234,122          --    (19,513)      (33,912)     180,697
Stock Purchase Plan                      322,442          --    (28,128)      (75,364)     218,950
     SLI Plan                            990,684          --   (505,317)           --      485,367
     SRI Plan                          1,970,759                (776,371)          --    1,194,388
 Roberts Plan                                 --  11,645,156  (1,893,466)    (577,272)   9,174,418
                                      ----------  ----------  ----------   ----------   ----------
                                      10,686,890  13,050,156  (4,552,618)  (1,547,286)  17,637,142
                                      ==========  ==========  ==========   ==========   ==========

29. Reserves Group                                                              

                                                        [Enlarge/Download Table]

                                      Share       Capital        Other    Profit and 
                                    premium       reserve     reserves  loss account 
                                (pound)'000   (pound)'000  (pound)'000   (pound)'000 
                                                                                     
As at 1 January 1998                193,386         2,755       24,223      (216,650)
Premium on issue of shares           34,259            --           --            -- 
Issue expenses                       (1,274)           --           --            -- 
Options exercised                     2,166            --           --            -- 
Cost of employee share options           --            --           24            -- 
Adjustments to goodwill                  --            --           --          (426)
Foreign exchange adjustment              --            --           --        (1,171)
Profit for the year                      --            --           --         6,247 
                                 ----------    ----------   ----------    ---------- 
As at 31 December 1998              228,537         2,755       24,247      (212,000)
Premium on issue of shares          615,185            --           --            -- 
Issue expenses                       (6,799)           --           --            -- 
Options exercised                     2,047            --           --            -- 
Foreign exchange adjustment              --            --           --           519 
Profit for the year                      --            --           --        12,570 
Cost of employee share options           56                                      (56)
                                 ----------    ----------   ----------    ---------- 
As at 31 December 1999              839,026         2,755       24,247      (198,967)
                                 ==========    ==========   ==========    ========== 

Group (continued)                                                               

The cumulative goodwill resulting from acquisitions which has been written off  
amounts to (pound)208,194,000 as at 31 December 1999 and 31 December 1998.      
Adjustments to goodwill during the year to 31 December 1998 related to the      
acquisition of Shire Richwood Inc in 1997.                                      

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The capital reserve arose in relation to a Group reconstruction and certain     
financing transactions, and is not distributable.                               

                                                        [Enlarge/Download Table]

Company                                                                              
                                      Share       Capital        Other    Profit and 
                                    premium       reserve     reserves  loss account 
                                (pound)'000   (pound)'000  (pound)'000   (pound)'000 
                                                                                     
As at 1 January 1998                193,386         1,674       18,055        (6,109)
Premium on issue of shares           34,259            --           --            -- 
Issue expenses                       (1,274)           --           --            -- 
Options exercised                     2,166            --           --            -- 
Cost of employee share options           --            --           24            -- 
Profit for the year                      --            --           --         4,513 
                                 ----------    ----------   ----------    ---------- 
As at 31 December 1998              228,537         1,674       18,079        (1,596)
Premium on issue of shares          615,185            --           --            -- 
Issue expenses                       (6,799)           --           --            -- 
Options exercised                     2,047            --           --               
Profit for the year                      --            --           --         3,408 
Cost of employee share options           56            --           --           (56)
                                 ----------    ----------   ----------    ---------- 
As at 31 December 1999              839,026         1,674       18,079         1,756 
                                 ==========    ==========   ==========    ========== 

30. Reconciliation of movements in Group shareholders' funds                    

                                                                [Download Table]

                                                            Year to       Year to
                                                        31 December   31 December
                                                               1999          1998
                                                        (pound)'000   (pound)'000
                                                                                 
Profit for the year                                          12,570        6,247 
Other recognised gains and losses relating to the year          519       (1,171)
                                                         ----------   ---------- 

                                                             13,089        5,076 
Cost of employee share options                                   --           24 
Share capital issued                                        622,403       37,254 
Issue expenses                                               (6,799)      (1,274)
Goodwill on acquisition of subsidiary undertakings               --         (426)
                                                         ----------   ---------- 

Net additions to shareholders' funds                        628,693       40,654 
Opening shareholders' funds                                  50,594        9,940 
                                                         ----------   ---------- 
Closing shareholders' funds                                 679,287       50,594 
                                                         ==========   ========== 

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The cumulative foreign exchange differences on translation amount to            
(pound)289,000 loss as at 31 December 1999 and (pound)808,000 loss as at 31     
December 1998.                                                                  

31. Guarantees, commitments and contingencies                                   
(a) Operating leases                                                            

The Group leases property, computer and office equipment and motor vehicles on  
short-term leases. The rents payable under property leases are subject to       
renegotiation at various intervals specified in the leases. The Group pays for  
substantially all of the insurance, maintenance and repair of these assets.     

The minimum annual rentals under the foregoing leases are as follows:           

Group                                                                           

                                                        [Enlarge/Download Table]

                                                                                 Motor
                                                    Property    Equipment     vehicles
As at 31 December 1999                           (pound)'000  (pound)'000  (pound)'000
                                                                                      
Operating leases which expire:                                                        
- within 1 year                                          248           11          244
- within 2-5 years                                       986          115        1,076
                                - after 5 years           58           --           --
                                                  ----------   ----------   ----------
                                                       1,292          126        1,320
                                                  ==========   ==========   ==========

As at 31 December 1998                                                                

Operating leases which expire:                                                        
- within 1 year                                           15           10           67
- within 2-5 years                                       305           13          299
- after 5 years                                           80           --           --
                                                  ----------   ----------   ----------
                                                         400           23          366
                                                  ==========   ==========   ==========

32. Guarantees, commitments and contingencies (continued)                       

Company                                                                         

                                                                [Download Table]

                                     Motor
                                  vehicles
As at 31 December 1999          pound)'000
                                          
Operating leases which expire:            
- within 1 year                         13
- within 2-5 years                      11
- after 5 years                         --
                                ----------
                                        24
                                ==========

As at 31 December 1998                    

Operating leases which expire:            
- within 1 year                         --
- within 2-5 years                      28
- after 5 years                         --
                                ----------
                                        28
                                ==========

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(b) Capital commitments                                                         

There were no capital commitments at the end of either year.                    

(c) Contingent liabilities                                                      

Until April 1998, Shire Richwood Inc. (SRI) distributed products containing     
phentermine, a prescription drug approved in the US as a single agent for short 
term use in obesity. Contrary to the approved labelling of these products,      
physicians in the US co-prescribed phentermine with fenfluramine or             
dexfenfluramine for management of obesity. This combination was popularly known 
as the "fen/phen" diet. In mid 1997, following concerns raised about cardiac    
valvular side effects alleged to be associated with this diet regime, the       
fenfluramine and dexfenfluramine elements of the "fen/phen" diet were withdrawn 
from the US market. Although SRI has ceased to distribute phentermine, the drug 
remains both approved and available in the US. SRI and a number of other        
pharmaceutical companies are being sued for damages for personal injury and     
medical monitoring arising from phentermine used either alone or in combination.

As at March 2000 SRI was named as a defendant in approximately 3,500 lawsuits   
and had been dismissed from approximately 500 of these cases. There are         
approximately 2,400 additional cases pending dismissal as of 16 March 2000. In  
only 127 cases pending was it alleged in the complaint or subsequent discovery  
that the plaintiff had used SRI's particular product and SRI has been dismissed 
from 29 of these cases as well. Although there have been reports of substantial 
jury awards and settlements in respect of fenfluramine and/or dexfenfluramine,  
to date Shire is not aware of any jury awards made against, or any settlements  
made by, any phentermine defendant. Shire denies liability on a number of       
grounds including lack of scientific evidence that phentermine, properly        
prescribed, causes the alleged side effects and that SRI did not promote        
phentermine for long term combined use as the "fen/phen" diet. Accordingly,     
Shire intends to defend vigorously any and all claims made against the Group in 
respect of phentermine and believes that a liability is neither probable nor    
quantifiable at this stage of the litigation.                                   

Pursuant to unlimited indemnity from SRI's former contract manufacturer of      
phentermine, EON Laboratories Inc. (EON), legal costs in respect of the         
phentermine litigation have, to date, been met by EON's insurers. EON has       
available, subject to Court sanction, a further $15m of insurance to meet the   
cost and liabilities of EON and each of its distributors including Shire. EON is
a subsidiary of Hexal GmbH, a manufacturer of generic pharmaceuticals based in  
Germany with a reported turnover of approximately $400m ((pound)250m),          
operations in an estimated 30 countries and approximately 500 employees. Hexal  
does not publicly disclose more extensive details of its financial position. EON
has indicated to Shire that it will define and indemnify Shire against cost and 
liabilities. Although EON has not indicated to Shire an unwillingness or        
inability to fund any uninsured losses, Shire is unable to determine EON's      
ability to pay such losses. Shire also has access to a limited indemnity given  
by the former shareholders of SRI for costs and liabilities related to the      
phentermine litigation not met by insurance or other indemnity arising from     
litigation filed prior to 12 March 1999. This indemnity is limited to the value 
of 1,622,566 ordinary shares of Shire presently held by a third party in escrow 
and is                                                                          

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available on demand. As of 24 March 2000, based on a closing share price of     
(pound)10.60, the value of these shares amounted to approximately (pound)17.2m  
(approximately $27.5m). In addition, Shire has access to its own product        
liability insurance up to a maximum level of (pound)3m. At the present stage of 
the litigation, Shire is unable to estimate the level of future legal costs     
after taking into account any available product liability insurance and         
enforceable indemnities. To the extent that any legal costs are not covered by  
insurance or available indemnities, these will be expensed as incurred.         

33. Pension arrangements                                                        

The Group has a number of defined contribution retirement plans and one defined 
benefit plan covering substantially all employees. For the defined contribution 
retirement plans, the company contribution is fixed as a set percentage of      
employee's pay. For the defined benefit plan, where benefits are based on       
employees' years of service and average final remuneration, the pension cost is 
established in accordance with the advice of independent qualified actuaries    
based on valuations undertaken on varying dates.                                

The pension cost charge for the defined contribution schemes for the year       
was (pound)1,069,000 (1998: (pound)677,000).                                    

The defined benefit plan operated by the Group is a Supplemental Executive      
Retirement Plan (SERP) for certain US employees of the acquired company, Roberts
Pharmaceutical Corporation, who meet certain age and service requirements.      

The pension cost charge for the period since acquisition of Roberts was for     
(pound)27,000.                                                                  

The Group has paid a lump sum of (pound)11.25m ($18m) into the SERP which has   
been accounted for as a fair value adjustment on the acquisition of Roberts     
Pharmaceutical Corporation to make good the deficit on this scheme at the time  
of acquisition. This lump sum payment has led to the Group having no future     
liability under the SERP which has been closed to new members with contributions
no longer payable by existing members.                                          

34. Notes to the consolidated cash flow statement                               

(a) Reconciliation of operating profit to net cash flow from operating          
activities                                                                      

                                                      Year to          Year to
                                                  31 December      31 December
                                                         1999             1998
                                                  (pound)'000      (pound)'000

Operating profit                                        30,372            7,879 
Cost of employee share options                              --               24 
Cost of a fundamental restructuring                    (11,516)              -- 
Exchange gain                                             (115)              -- 
Depreciation                                             1,433            1,281 
Amortisation of intangible fixed assets                  2,874              525 
(Profit) loss on sale of fixed assets                     (465)              10 
Increase in stocks                                      (1,595)            (572)
Increase in debtors                                     (6,864)          (7,822)
Increase in creditors                                   25,739            2,366 
                                                  -----------      -----------
Net cash inflow from operating activities               39,863            3,691 
                                                  ===========      ===========

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Companies acquired in the year contributed (pound)5,595,000 outflow to the      
Group's net operating cashflows, paid (pound)149,000 in respect of net returns  
on investments and servicing of finance, paid (pound)nil in respect of taxation 
and utilised (pound)nil for capital expenditure and financial investments.      

(b) Analysis of changes in net debt                                             

                                                        [Enlarge/Download Table]

                                       Start of                                   Exchange        End of 
                                           year     Cash flow   Acquisitions      movement          year 
Year ended 31 December 1999         (pound)'000   (pound)'000    (pound)'000   (pound)'000   (pound)'000 
                                                                                                         
Cash at bank and in hand                  8,230        27,561             --           247        36,038 
Debt due within one year                     --        (4,830)        (4,907)           --        (9,737)
Finance leases due within one year         (705)          683             --            --           (22)
                                    -----------   -----------    -----------   -----------   ----------- 
                                          7,525        23,414         (4,907)          247        26,279 
Debt due after one year                      --        (2,609)       (76,035)           --       (78,644)
Finance leases due after one year           (22)           22             --            --            -- 
                                    -----------   -----------    -----------   -----------   ----------- 
                                          7,503        20,827        (80,942)          247       (52,365)
Current asset investments                21,435         1,033         27,382            --        49,850 
                                    -----------   -----------    -----------   -----------   ----------- 
Net funds (debts)                        28,938        21,860        (53,560)          247        (2,515)
                                    ===========   ===========    ===========   ===========   =========== 


                                                                      Other                              
                                       Start of                     non-cash      Exchange        End of 
                                           year     Cash flow        changes      movement          year 
Year ended 31 December 1998         (pound)'000   (pound)'000    (pound)'000   (pound)'000   (pound)'000 
                                                                                                         
Cash at bank and in hand                 10,283        (1,965)            --           (88)        8,230 
Finance leases due within one year         (431)          221           (495)           --          (705)
                                    -----------   -----------    -----------   -----------   ----------- 
                                          9,852        (1,744)          (495)          (88)        7,525 
Finance leases due after one year          (770)          332            416            --           (22)
                                    -----------   -----------    -----------   -----------   ----------- 
                                          9,082        (1,412)           (79)          (88)        7,503 
Current assets investments                   --        21,435             --            --        21,435 
                                    -----------   -----------    -----------   -----------   ----------- 
Net funds                                 9,082        20,023            (79)          (88)       28,938 
                                    ===========   ===========    ===========   ===========   =========== 

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                                                        [Enlarge/Download Table]

                                                                            Year ended    Year ended 
                                                                           31 December   31 December 
                                                                                  1999          1998 
                                                                           (pound)'000   (pound)'000 
                                                                                                     
Increase (decrease) in cash in the year                                         27,561        (1,965)
Cash (inflow) outflow from increase in debt and lease financing                 (8,717)          553 
Cash outflow from increase in liquid resources                                   1,033        21,435 
                                                                           -----------   ----------- 
Change in net debt resulting from cashflows                                     19,877        20,023 
Loans and current asset investments acquired with subsidiary undertakings      (51,577)           -- 
Other non-cash changes                                                              --           (79)
Translation difference                                                             247           (88)
                                                                           -----------   ----------- 
Movement in net debt in year                                                   (31,453)       19,856 
Net funds at beginning of year                                                  28,938         9,082 
                                                                           -----------   ----------- 
Net (debt) funds at end of year                                                 (2,515)       28,938 
                                                                           ===========   =========== 

(c) Major non-cash transactions                                                 

Other non-cash changes during the year ended 31 December 1998 represent finance 
lease arrangements entered into by the Group                                    

                                                                             113

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 PART VI - PROFORMA STATEMENT OF COMBINED NET ASSETS

The unaudited proforma statement of net assets of the Enlarged Group set out    
below has been prepared for illustrative purposes only. The proforma statement  
has been prepared to illustrate the effect on the balance sheet of Shire as if  
the Merger had occurred at 30 June 2000. Because of its nature, it may not give 
a true picture of the Enlarged Group's financial position if the Merger had     
occurred on the date assumed.                                                   

                                                        [Enlarge/Download Table]

                                                                                 Adjusted                      Pro forma  
                                 Shire     BioChem                   Adjusted     BioChem                            net  
                               30 June     30 June                    BioChem     30 June         Merger          assets  
                                  2000        2000    Adjustments     30 June        2000     adjustment            post  
                                 $'000       $'000          $'000        2000 (pound)'000    (pound)'000          Merger  
                              (Note 1)    (Note 2)       (Note 3)       $'000    (Note 4)       (Note 5)     (pound)'000  
                                                                                                                          
Fixed assets                                                                                                              
Intangible assets                    o           o              o           o           o              o               o  
Tangible assets                      o           o              o           o           o              o               o  
                           ---------------------------------------------------------------------------------------------- 

                                     o           o              o           o           o              o               o  
                           ---------------------------------------------------------------------------------------------- 

Current assets                                                                                                            
Stocks                               o           o              o           o           o              o               o  
Debtors                              o           o              o           o           o              o               o  
Cash and short                                                                                                            
   term investments                  o           o              o           o           o              o               o  
                           ---------------------------------------------------------------------------------------------- 
                                     o           o              o           o           o              o               o  
Creditors: Amounts                                                                                                        
falling due in less than                                                                                                  
one year                             o           o              o           o           o              o               o  
                           ---------------------------------------------------------------------------------------------- 

Net current assets                   o           o              o           o           o              o               o  
                           ---------------------------------------------------------------------------------------------- 

Total assets less current                                                                                                 
liabilities                          o           o              o           o           o              o               o  

Creditors:  Amounts                                                                                                       
falling due in more than                                                                                                  
one year                             o           o              o           o           o              o               o  
                           ---------------------------------------------------------------------------------------------- 
Net assets                           o           o              o           o           o              o               o  
                           ============================================================================================== 

Notes:                                                                          
(1)   Extracted from the interim consolidated financial statements of Shire.    
(2)   Derived from the interim consolidated financial statements of BioChem,    
reclassified in accordance with US reporting formats, as noted:     

                                                                             114

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Debtors Comprise:                                                          $'000

Accounts and Notes Receivable:                                                  
     Trade, net                                                                o
     Other                                                                     o
Current deferred tax asset                                                     o
Other current assets                                                           o
Notes receivable (non-current)                                                 o
Deferred tax asset (non-current)                                               o
                                                                      ----------
Other non-current assets                                                       o

Cash and short term investments comprise:                                  $'000
Cash and cash equivalents                                                      o
Marketable securities                                                          o
--------------------------------------------------------------------------------

                                                                               o
--------------------------------------------------------------------------------

Creditors: amounts due in less than one year comprise:                     $'000
Current instalments of long term debt                                          o
Accounts payable                                                               o
Other current liabilities                                                      o
--------------------------------------------------------------------------------

                                                                               o
--------------------------------------------------------------------------------

(3)   The following adjustments are required to conform BioChem's financial     
statements with Shire's accounting policy under US GAAP.            

Write down of intangible assets                                                o
Accounting for defined benefit pension plan                                    o
Write off of deferred tax asset                                                o
--------------------------------------------------------------------------------

                                                                               o
--------------------------------------------------------------------------------

(4)   Translated at (pound)o = (pound)1, being the exchange rate ruling at 30   
June 2000.                                                          

(5)   Merger expenses consisting primarily of professional fees and distributing
     proxy materials are estimated to be o and will be charged as an operating
expense upon consummation of the Merger.                            

                                                                             115

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The Directors and Proposed Directors                             Arthur Andersen
Shire Pharmaceuticals Group plc                                  Abbots House   
East Anton                                                       Abbey Street   
Andover                                                          Reading        
Hampshire                                                        RG1 3BD        
SP10 5RG                                                                        

The Directors                                                                   
Deutsche Bank AG London                                                         
Winchester House                                                                
1 Great Winchester Street                                                       
London                                                                          
EC2N 2DB                                                                 o, 2001

Dear Sirs                                                                       

We report on the pro forma financial information set out on pages o to o of the 
Listing Particulars dated o, 2001 issued by Shire Pharmaceuticals Group plc     
which has been prepared, for illustrative purposes only, to provide information 
about how the acquisition of BioChem Pharma Inc. might have affected the        
financial information presented.                                                

Responsibilities                                                                

It is the responsibility solely of the Directors of Shire Pharmaceuticals Group 
plc to prepare the pro forma financial information in accordance with paragraph 
12.29 of the Listing Rules of the United Kingdom Listing Authority.             

It is our responsibility to form an opinion, as required by the Listing Rules,  
on the pro forma financial information and to report our opinion to you. We do  
not accept any responsibility for any reports previously given by us on any     
financial information used in the compilation of the pro forma financial        
information beyond that owed to those to whom those reports were addressed by us
at the dates of their issue.                                                    

Basis of Opinion                                                                

We conducted our work in accordance with the Statements of Investment Circular  
Reporting Standards and Bulletin 1998/8 Reporting on pro forma financial        
information pursuant to the Listing Rules issued by the Auditing Practices      
Board. Our work, which involved no independent examination of any of the        
underlying financial information, consisted primarily of comparing the pro forma
financial information with the source documents, considering the evidence       
supporting the adjustments and discussing the pro forma financial information   
with the Directors of Shire Pharmaceuticals Group plc.                          

Our work has not been carried out in accordance with auditing standards         
generally accepted in [Canada/the United States of America] and accordingly     
should not be relied upon as if it had been carried out in accordance with those
standards.                                                                      

Opinion                                                                         

In our opinion:                                                                 

1.    the pro forma financial information has been properly compiled on the     
basis stated; and                                                   
2.    such basis is consistent with the accounting policies of Shire            
Pharmaceuticals Group plc; and                                      
3.    the adjustments are appropriate for the purposes of the pro forma         
 financial information as disclosed pursuant to paragraph 12.29 of the
Listing Rules of the United Kingdom Listing Authority.              

Yours faithfully                                                                

Arthur Andersen                                                                 
Chartered Accountants                                                           

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PART VII DETAILS OF THE MERGER AGREEMENT AND SPECIAL VOTING RIGHTS

The following is a summary of the structure of the Enlarged Group following     
completion of the Merger and material documents entered into and to be entered  
into in connection with the Merger.                                             

1. Structure of the Enlarged Shire Group                                        

Following completion of the Arrangement, Shire will indirectly own 100 per cent 
of BioChem through the holding company structure described below. The business  
of BioChem will be operated in combination with the existing business of Shire. 

BioChem will, once the Arrangement becomes effective, become a direct           
wholly-owned subsidiary of Exchangeco. Exchangeco is a company incorporated     
under the CBCA. Pursuant to the Arrangement, Exchangeco will, if the requisite  
elections are made, issue the Shire Exchangeco Shares to BioChem Shareholders   
who are Canadian residents. Callco is a company incorporated under the CBCA.    
Pursuant to the Exchangeable Share Support Agreement described below, Callco    
will have the overriding right, in certain circumstances, to purchase Shire     
Exchangeco Shares that are exchanged for New Ordinary Shares or new ADSs at the 
option of the holder, for a purchase price payable in New Ordinary Shares or new
ADSs as the case may be. Further details are set out in paragraph o of this Part
VIII.                                                                           

The entire issued share capital of both Exchangeco and Callco is held by Shire. 

2. Merger Agreement                                                             

The Merger Agreement sets out the basis on which Shire will acquire the entire  
issued, and to be issued, share capital of BioChem. The Merger Agreement is     
governed by Canadian law (more particularly, the laws of the Province of Quebec 
and the federal laws applicable therein).                                       

Plan of arrangement                                                             

Under the Merger Agreement, the Merger is to be implemented by way of a plan of 
arrangement under the CBCA, the corporations statute by which BioChem is        
governed. The Merger Agreement provides that, subject to the approval of the    
Merger by the affirmative vote of BioChem Shareholders and Rightholders, voting 
together as set forth in the Interim Order, and the passing of the ordinary     
resolution set out in the Notice of Extraordinary General Meeting at the end of 
this document by a majority of the votes cast by Shire Shareholders at the      
meeting and the satisfaction or waiver of other conditions to the Merger, Shire 
and BioChem will merge pursuant to the Arrangement. The Arrangement is also     
subject to the approval of the Superior Court of Quebec which, amongst other    
things, will consider whether the Arrangement is fair to the BioChem            
Shareholders. Under the terms of the Merger, the BioChem Shareholders, including
BioChem Rightholders only to the extent that they exercise their BioChem        
Options, may elect to receive New Ordinary Shares, new Shire ADSs or, to the    
extent they are resident in Canada for the purpose of the Income Tax Act        
(Canada), Shire Exchangeco Shares in exchange for their BioChem Shares. Any     
BioChem Options or rights in respect of BioChem Shares which are not exercised  
will be replaced with options or (as appropriate) rights over Shire Ordinary    
Shares.                                                                         

Conversion of BioChem Shares                                                    

The Merger Agreement provides for the combination of Shire and BioChem in a     
transaction in which each BioChem Shareholder (other than BioChem Shareholders  
who properly dissent to the Merger) will have the choice of receiving as        
consideration for each BioChem Share:                                           

o     a number of Ordinary Shares equal to the exchange ratio =;                

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o     provided that the BioChem shareholder is a Canadian resident a number of  
 Shire Exchangeco Shares equal to the exchange ratio divided by three,
  which are exchangeable into Ordinary Shares, or ADSs, at a rate of one
    Shire Exchangeco Share for three Ordinary Shares or one Exchangeco Share
for one ADS;                                                        

o     a number of ADSs equal to the exchange ratiodivided by three; or          

o     a combination of the above.                                               

For the avoidance of doubt, only BioChem Shareholders who are Canadian residents
will have the option of receiving ShireExchangeco Shares for their BioChem      
Shares.                                                                         

Holders of Shire Exchangeco Shares will be entitled to dividend and other rights
that are, as nearly as practicable, economically equivalent to those of Ordinary
Shares. Through a voting trust, holders of Shire Exchangeco Shares will be      
entitled to vote at meetings of Shire Shareholders.                             

                                                                             118

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Exchange Ratio                                                                  

The number of Ordinary Shares into which each BioChem Share shall be converted  
shall be determined as follows:                                                 

                                                        [Enlarge/Download Table]
                                                                                               
-----------------------------------------------------------------------------------------------
If the Average Shire ADS Price is:        the exchange ratio shall be:                         
-----------------------------------------------------------------------------------------------
less than or equal to $47.20              2.3517                                               
-----------------------------------------------------------------------------------------------
Greater than                              determined by dividing $37.00 by the ADS Price and   
$47.20 and less than $70.80               multiplying by 3                                     
-----------------------------------------------------------------------------------------------
equal to or greater than $70.80           1.5678                                               
-----------------------------------------------------------------------------------------------

If a BioChem Shareholder elects, or in certain circumstances, Shire will provide
him with one third of an ADS or one third of a Shire Exchangeco Share for each  
Ordinary Share that shareholder would be entitled to receive based on the       
exchange ratio.                                                                 

Representations and Warranties                                                  

The Merger Agreement contains customary representations and warranties made by  
Shire and BioChem relating to, among other things:                              

o     due organisation and good standing;                           

o     capitalisation;                                               

  o     corporate authority to enter into the contemplated transactions;

o     lack of conflicts with corporate governance documents;        

o     reports and financial statements;                             

o     absence of certain changes or events;                         

o     compliance with law;                                          

o     brokers or finders;                                           

o     absence of litigation;                                        

o     filing of tax returns;                                        

o     environmental matters; and                                    

o     intellectuel property                                         

Covenants                                                                       

During the period from the date of the Merger Agreement and continuing until the
Effective Time, each of Shire and BioChem has agreed as to itself and its       
subsidiaries that, among other things, it and its subsidiaries will carry on    
their respective businesses only in the ordinary course and will use reasonable 
efforts to maintain and preserve its business organisation, assets, employees   
and business relationships and to maintain all of its properties and assets in  
useful and good condition.                                                      

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The Merger Agreement contains certain other covenants of Shire and BioChem      
relating to the conduct of their respective businesses before the Effective     
Time, including:                                                                

    o     covenants relating to the declaration and payment of dividends and
changes in share capital;                               

o     the issuance of securities;                                   

      o     the amendment of the memorandum and articles of association of Share
    or other constitutive documents of the parties to the Merger
Agreement;                                              

o     the disposition of assets;                                    

o     the incurrence of indebtedness and the acquisition of equity  
interests;                                              

o     the making of loans, advances, contributions or investments   

o     the maintenance of benefits plans and compensation;           

  o     the entering into of agreements limiting or restricting Shire or
       BioChem from engaging or competing in any line of business; and

o     the preservation of the availability of pooling-of-interests  
accounting treatment.                                   

No Solicitation                                                                 

According to the terms of the Merger Agreement, Shire and BioChem have each     
agreed that, prior to the Effective Time of the Arrangement, neither it, any of 
its subsidiaries nor any of the respective employees, agents or representatives 
of the foregoing will:                                                          

    o     initiate, solicit, encourage or knowingly facilitate, including by
         way of furnishing information, any inquiries or the making of any
       proposal or offer with respect to, any merger, consolidation or
          other business combination involving Shire or BioChem, as the case
           may be, or the acquisition of the assets of BioChem or Shire having
an aggregate value of 50 per cent or more of the market 
       capitalisation or the acquisition of 50 per cent or more of the
capital stock of Shire or BioChem, as the case may be;  

      o     have any discussion with or provide confidential information or data
            to any person relating to the type of transaction referred to above;

o     engage in any negotiations regarding the type of transaction  
referred to above; or                                   

     o     knowingly facilitate any effort or attempt to make or implement the
           type of transaction referred to above or accept such a transaction.

The Merger Agreement does allow Shire and BioChem, in response to an unsolicited
written proposal from a third party regarding a bona fide, written and          
unsolicited proposal or offer made by any persons or group with respect to a    
merger, consolidation or other business combination or an acquisition of the    
assets of BioChem or Shire having an aggregate value of 50 per cent or more of  
the market capitalisation or the acquisition of 50 per cent or more of the      
capital stock, of Shire or BioChem, as the case may be, on terms which the board
of directors of Shire or BioChem, as the case may be, determines in good faith, 
and in the exercise of reasonable judgment, based on the advice of independent  
financial advisers and legal counsel, to be more favourable to its shareholders 
than the Merger, to furnish information to, negotiate or otherwise engage in    
discussions with such third party, provided however, in the case of Shire that  
its board of directors determines in good faith, after receiving a written      
opinion from its outside legal advisers, that such action is required for the   
board of directors to comply with its fiduciary duties under applicable law.    

                                                                             120

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According to the terms of the Merger Agreement, Shire and BioChem have agreed to
promptly advise each other of any information they have from a person with      
respect to any transaction of the type referred to above and to give each other 
an update on an ongoing basis or upon the reasonable request of Shire or        
BioChem, as the case may be, on the status of any such transaction.             

Conditions to Closing                                                           

Mutual Conditions                                                   

The Merger Agreement provides that the respective obligations of each party to  
complete the transaction are subject to the satisfaction or waiver of a number  
of conditions, including the following:                                         

   o     the transaction shall have been approved by the requisite vote of
Shire Shareholders and BioChem Shareholders;            

  o     no laws shall have been adopted or promulgated, and no temporary
       restraining order, preliminary or permanent injunction or other
         order issued by a court or other governmental entity of competent
        jurisdiction shall be in effect, having the effect of making the
        transaction illegal or otherwise prohibiting consummation of the
transaction;                                            

    o     the waiting periods (and any extensions thereof) applicable to the
            transaction under the HSR Act and the Competition Act (Canada) shall
         have been terminated or shall have expired or the Commissioner of
            Competition shall have issued an advance ruling certificate and/or a
            "no action" letter under the Competition Act (Canada) in relation to
        the transaction and the Director of Investments under Investment
       Canada Act shall have concluded that the transaction is of "net
     benefit to Canada" for purposes of the Investment Canada Act;

     o     all consents, approvals and actions of, filings with and notices to
            any governmental entity required of Shire or BioChem or any of their
           respective subsidiaries to consummate the transaction and the other
         transactions contemplated by the Merger Agreement shall have been
obtained;                                               

  o     the New Ordinary Shares shall have been admitted to the Official
           List of the UK Listing Authority and to trading on the London Stock
         Exchange, the ADSs shall have been approved for listing on NASDAQ
            (to the extent necessary) and the Shire Exchangeco Shares shall have
           been approved for listing on The Toronto Stock Exchange, subject to
official notice of issuance;                            

o     a registration statement on Form S-3 relating to the issue of 
          Ordinary Shares upon exchange of the Shire Exchangeco Shares shall
            have been declared effective by the SEC or an appropriate "no action
           letter" shall have been obtained from the staff of the SEC relating
  to the issue of Ordinary Shares upon exchange of the Shire
            Exchangeco Shares. No stop order suspending the effectiveness of the
         Form S-3 shall have been issued by the SEC and no proceedings for
        that purpose shall have been initiated or threatened by the SEC;

o     all applicable requirements of Section 3 (a) (10) of the US   
          Securities Act shall have been satisfied with respect to the issue
     of Ordinary Shares and ADSs in connection with theMerger; and

    o     exemption orders from the registration and prospectus requirements
            with respect to the Shire Exchangeco Share structure shall have been
           granted by all relevant Canadian provincial securities authorities.

                                                                             121

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Conditions in favour of Shire and Exchangeco                        

The Merger Agreement provides that the obligation of Shire and Exchangeco to    
complete the transaction is subject to the satisfaction or waiver of a number of
additional conditions, each of which may be waived by Shire, including the      
following:                                                                      

    o     each of the representations and warranties of BioChem set forth in
            the Merger Agreement that is qualified as to Material Adverse Effect
     shall be true and correct and each of the representations and
           warranties of BioChem set forth in the Merger Agreement that is not
           so qualified shall be true and correct in all material respects, in
     each case as of the date of the MergerAgreement and as of the
      Effective Date as though made on and as of the Effective Date;

  o     BioChem shall have performed or complied with all agreements and
           covenants required to be performed by it under the Merger Agreement
           at or prior to the Effective Date that are qualified as to Material
           Adverse Effect and shall have performed or complied in all material
       respects with all other agreements and covenants required to be
     performed by it under the Merger Agreement at or prior to the
Effective Date that are not so qualified;               

     o     BioChem's Board of Directors shall have waived the application of a
          BioChem rights plan to the transactions contemplated by the Merger
         Agreement. Under the rights plan, one common share purchase right
           was issued in respect of each outstanding BioChem Share and a share
      purchase right for each BioChem Share issued thereafter. These
      rights are exercisable in a situation of public offering where
            certain conditions are not respected. Each right entitles the holder
          to purchase, from BioChem, one BioChem Share at a specified price,
subject to certain anti-dilution adjustments. ;         

     o     holders of not more than 5 per cent of the BioChemShares issued and
      outstanding immediately prior to the Effective Date shall have
 dissented to the Merger (and not withdrawn such dissent);

o     since the date of the Merger Agreement, there shall not have  
   occurred any change, effect, event or circumstance that, in
combination with any other changes, effects, events or  
         circumstances, has resulted in or would reasonably be expected to
    result in a Material Adverse Effect with respect to BioChem;
           provided that the outcome of the proceedings by Emory University in
           the US shall not be considered to have a Material Adverse Effect on
BioChem; and                                            

o     there shall have been delivered to Shire:                     

          o     a pooling letter from Shire's independent auditors, dated as
            of the Effective Date and addressed to Shire, reasonably
                  satisfactory in form and substance to Shire, setting forth the
        concurrence of Shire's independent auditors with the
                conclusion of Shire's management that it will be appropriate
             to account of the Arrangement as a "pooling of interests"
                 under US GAAP, Accounting Principles Board Opinion No. 16 and
          all published rules and regulations adopted by the SEC

       o     a poolability letter from BioChem's independent auditors,
                 dated as of the Effective Date and reasonably satisfactory in
                 form and substance to Shire, setting forth the concurrence of
         BioChem's independent auditors with the conclusion of
               BioChem's management that it will be appropriate to account
                 for the Arrangement as a "pooling of interest" under US GAAP,
                Accounting Principles Board Opinion No. 16 and all published
rules and regulations adopted by the SEC.   

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Conditions infavour of BioChem                                      

The Merger Agreement provides that the obligation of BioChem to complete the    
Merger is subject to the fulfillment of a number of additional conditions, each 
of which may be waived by BioChem, including the following:                     

 o     each of the representations and warranties of each of Shire and
            Exchangeco set forth in the Merger Agreement that is qualified as to
          Material Adverse Effect shall be true and correct, and each of the
          representations and warranties of each of Shire and Exchangeco set
            forth in the Merger Agreement that is not so qualified shall be true
            and correct in all material respects, in each case as of the date of
           the Merger Agreement and as of the Effective Date as though made on
and as of the Effective Date; and                       

o     Shire shall have performed or complied with all agreements and
           covenants required to be performed by it under the Merger Agreement
           at or prior to the Effective Date that are qualified as to Material
           Adverse Effect and shall have performed or complied in all material
       respects with all other agreements and covenants required to be
     performed by it under the Merger Agreement at or prior to the
Effective Date that are not so qualified.               

Termination and payment of break fees                                           

The Merger Agreement may be terminated by mutual written consent of BioChem and 
Shire at any time prior to the Effective Date. In addition, if the Effective    
Date shall not have occurred on or before 31 May 2001, the Merger Agreement may 
be terminated by either BioChem or Shire; provided, however, that this right to 
termination may not be available to any party whose failure to fulfill any      
obligation under the Merger Agreement has been the cause of, or resulted in, the
failure of the Effective Date to occur on or before 31 May 2001.                

The Merger Agreement may be terminated by either BioChem or Shire, if any       
governmental entity:                                                            

      o     shall have issued a final and non-appealable order, decree or ruling
       or taken any other action (which such party shall have used its
          reasonable best efforts to resist, resolve or lift, as applicable)
       permanently restraining, enjoining or otherwise prohibiting the
          transactions contemplated by the Merger Agreement, and such order,
  decree, ruling or other action shall have become final and
non-appealable; or                                      

      o     shall have failed to issue an order, decree or ruling or to take any
            other action (which order, decree, ruling or other action such party
       shall have used its reasonable best efforts to obtain) which is
       necessary to fulfill the conditions to closing set forth in the
           Merger Agreement, and such denial of a request to issue such order,
            decree, ruling or take such other action shall have become final and
       non-appealable; provided, however, that this right to terminate
           shall not be available to any party whose failure to use reasonable
         best efforts to obtain regulatory approvals has been the cause of
such action or inaction.                                

The Merger Agreement may be terminated by Shire upon the occurrence of any of   
the following events:                                                           

   o     BioChem shareholder approval has not been obtained at the BioChem
shareholder meeting;                                    

      o     the board of directors of BioChem fails to recommend approval of the
        Merger to its shareholders or adversely modifies or qualifies or
withdraws its recommendation; or                        

  o     a breach by BioChem of any representation, covenant or agreement
            which results in a failure of certain conditions to closing (subject
to a 20 business day cure period).                      

The Merger Agreement may be terminated by BioChem upon the occurrence of any of 
the following events:                                                           

     o     Shire shareholders have not approved the Merger at theExtraordinary
General Meeting;                                        

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    o     the board of directors of Shire fails to recommend approval of the
        Merger to its shareholders or adversely modifies or qualifies or
withdraws its recommendation; or                        

      o     a breach by Shire of any representation, covenant or agreement which
           results in a failure of certain conditions to closing (subject to a
20 business day cure period).                           

BioChem may also terminate the Merger Agreement if at any time prior to its     
shareholder meeting, BioChem shall have failed to recommend approval of the     
Merger to its shareholders or adversely modified or qualified or withdrawn its  
recommendation so long as:                                                      

   o     the BioChem board of directors, after consultation with its legal
            counsel and financial adviser, determines that a proposal to acquire
        BioChem is more favourable from a financial point of view to its
           shareholders than the Merger and, after consultation with and based
        upon advice of legal counsel, determines in good faith that such
           action is necessary for BioChem's board of directors to comply with
   its fiduciary duties to shareholders under applicable laws;

     o     BioChem pays to Shire, immediately following the termination of the
Merger Agreement, a break fee of $110 million; and      

o     BioChem provides to Shire at least five business days prior to
           termination written notice of its intention to terminate the Merger
          Agreement and the material terms and conditions of the proposal to
acquire BioChem.                                        

If Shire terminates the Merger Agreement because BioChem shareholder approval   
has not been obtained, and                                                      

    o     a transaction to acquire BioChem is announced that BioChem's board
           of directors determines is more favourable to its shareholders than
the transaction with Shire; and                         

  o     that transaction is consummated within one year (or 18 months in
      certain circumstances) of termination of the Merger Agreement,

then BioChem shall pay to Shire a break fee of $110 million not later than two  
days following consummation of the transaction referred to above.               

If Shire terminates the Merger Agreement because BioChem's board of directors   
fails to recommend approval of the Merger to its shareholders or adversely      
modifies or qualifies or withdraws its recommendation, then BioChem shall pay to
Shire a break fee of $110 million not later than two business days after the    
termination date.                                                               

If BioChem terminates the Merger Agreement because Shire has failed to recommend
approval of the Merger to its shareholders or Shire has adversely modified or   
qualified or withdrawn its recommendation, then Shire shall pay to BioChem, not 
later than two business days after the termination date, a break fee of $40     
million.                                                                        

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3. The Option Agreement                                                         

General                                                                         

At the same time as the execution of the Merger Agreement and as an inducement  
and condition to entering into the Merger Agreement, Shire entered into an      
Option Agreement with BioChem. Under the Option Agreement, BioChem granted Shire
an irrevocable option to purchase a number of shares representing up to 19.9 per
cent of the issued and outstanding BioChem Shares as of 8 December 2000 (on an  
undiluted basis) at a price per share in cash equal to $37.00.                  

The Option Agreement provides that Shire may exercise the option prior to       
termination of the Option Agreement, in whole or in part, by delivering a       
written notice, upon the occurrence of any event that entitles Shire to receive 
a payment of $110 million from BioChem according to the terms of the Merger     
Agreement.                                                                      

To the extent the option has not been exercised, the option will expire upon the
earlier of 12.01 a.m. on the Effective Date or termination of the Merger        
Agreement in accordance with its terms unless Shire is entitled to receive the  
$110 million payment from BioChem under the Merger Agreement, in which case the 
option will expire 180 days after termination of the Merger Agreement.          

Arrangements such as the Option Agreement are customarily entered into in       
connection with corporate mergers and acquisitions in an effort to increase the 
likelihood that the transactions will be consummated in accordance with their   
terms, and to compensate the grantee for the efforts undertaken and the         
expenses, losses and opportunity costs incurred by it in connection with the    
transactions if they are not consummated under certain circumstances involving  
an acquisition or potential acquisition of the issuer by a third party. The     
option agreement was entered into to accomplish these objectives.               

Notice of exercise                                                              

According to the terms of the Option Agreement, Shire may exercise the option   
by:                                                                             

   o     sending BioChem a written notice specifying the number of BioChem
Shares to be purchased; and                             

 o     paying the exercise price by certified cheque or wire transfer.

Maximum proceeds                                                                

The Option Agreement provides that the gross proceeds received by Shire in      
connection with any sales or dispositions of shares from the exercise of the    
option (less reasonable and customary commissions and any dividends received by 
Shire declared on the option shares) together with the $110 million payment     
cannot exceed:                                                                  

o     $120,000,000; plus                                            

     o     the product of $37.00 and the number of BioChem Shares purchased by
Shire under the option.                                 

If such gross proceeds do exceed this amount, the excess amount shall be        
remitted by Shire to BioChem or deducted from the $110 million payment to be    
made by BioChem to Shire.                                                       

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4. Exchangeable Share Support Agreement                                         

Under the Exchangeable Share Support Agreement to be entered into between Shire,
Callco and Exchangeco, Shire will agree to ensure that Exchangeco can meet its  
obligations in respect of the Shire Exchangeco Shares.                          

So long as any Shire Exchangeco Shares not owned by Shire or its affiliates are 
outstanding, Shire cannot declare or pay any dividend unless Exchangeco on the  
same day declares or pays an equivalent dividend to holders of the Shire        
Exchangeco Shares. If there is a shortfall in Exchangeco's reserves then Shire  
is required to fund this shortfall to the extent necessary to pay an            
economically equivalent dividend. If Shire pays a dividend in specie to Shire   
Shareholders then a payment of economically equivalent value must be made to the
holders of the Shire Exchangeco Shares.                                         

If Shire is subject to a takeover offer, it must use all reasonable efforts to  
enable the holders of the Shire Exchangeco Shares to participate on economically
equivalent terms. Further, the Exchangeable Share Support Agreement contains an 
anti-dilution covenant on the part of Shire which prevents Shire from issuing   
Ordinary Shares, convertibles or options to Shire Shareholders; distributing    
property to Shire Shareholders; merging or undergoing a reorganisation; or      
altering its share capital structure, , in each case without either (a) the     
approval of the holders of the Shire Exchangeco Shares or (b) economically      
equivalent reciprocal arrangements being put in place in favour of the holders  
of the Shire Exchangeco Shares.                                                 

The measure of economic equivalence will be determined by the board of directors
of Exchangeco in accordance with certain parameters set forth in the            
Exchangeable Share Support Agreement.                                           

Shire must also ensure that Exchangeco complies with its obligations in relation
to the exercise of retraction rights, payment of dividends and segregation of   
funds and must ensure the availability of sufficient New Ordinary Shares to     
satisfy the exchange rights of the holders of the Shire Exchangeco Shares.      

Upon the exercise of exchange rights attaching to the Shire Exchangeco Shares   
(whether at the option of the holders of Shire Exchangeco Shares or upon some   
other exchange event), Callco will have the overriding right, but not the       
obligation, to purchase the Shire Exchangeco Shares in question for a purchase  
price payable in New Ordinary Shares or new ADSs (at the option of the holder). 
Further details are set out in paragraph o of this Part VIII.                   

5. Voting and Exchange Trust Agreement                                          

Under the Voting and Exchange Trust Agreement (to be entered into among Shire,  
Exchangeco and o (the "Trustee"), Special Voting Shares will be issued to the   
Trustee in the same number as the number of outstanding Shire Exchangeco Shares 
as at the Effective Date and a trust created for the benefit of the holders of  
the Shire Exchangeco Shares. The Trustee will hold the Special Voting Shares in 
trust for the benefit of the holders of the Shire Exchangeco Shares (other than 
Shire and affiliates of Shire) and will be able to vote in person or by proxy on
any matters put before the Shire Shareholders at a Shire general meeting. Each  
holder of Shire Exchangeco Shares (other than Shire or affiliates of Shire) is  
entitled to direct the Trustee how to vote three Special Voting Shares held by  
the Trustee for each one Shire Exchangeco Share owned by such holder or to      
attend the meeting personally and vote directly as proxy for the Trustee in     
respect of such Special Voting Shares. Unless instructed, the Trustee may not   
vote, and any Shire Exchangeco Shares held by Shire or its affiliates may not be
voted. The Trustee will also hold rights entitling the holders of the Shire     
Exchangeco Shares to automatic exchange rights providing that, in               

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the event of insolvency or liquidation of Exchangeco or of Shire, Shire will    
acquire the Shire Exchangeco Shares other than those held by Shire and its      
affiliates in return for New Ordinary Shares at the same rate as the right to   
exchange (i.e. one-for-three).                                                  

Under the Voting and Exchange Trust Agreement, Shire must provide to the Trustee
all materials to be sent to the UK Shire Shareholders and certain items are     
subject to the right of reasonable comment by the Trustee prior to mailing.     
Shire must also give the Trustee and Exchangeco advance notice of any meetings  
of Shire Shareholders and all materials must be mailed to the holders of the    
Shire Exchangeco Shares at the same time as they are mailed to the Shire        
Shareholders at Shire's expense.                                                

Shire will not be responsible for the payment of any applicable stamp,          
registration and transfer taxes and duties, if any, upon transfer of the Shire  
Exchangeco Shares or the issue or delivery of Shire Ordinary Shares other than  
the issue of Shire Ordinary Shares to a depositary pursuant to the Merger. Shire
and Exchangeco jointly and severally agree to pay the Trustee for all services  
rendered to it under the Voting and Exchange Trust Agreement, including         
reasonable expenses. In addition, Shire and Exchangeco will be liable to        
indemnify the Trustee against any claims, losses and reasonable costs and       
expenses incurred in compliance with its duties under the Voting and Exchange   
Trust Agreement.                                                                

6. Further details of the Shire Exchangeable Shares                             

Exchange                                                                        

Holders of Shire Exchangeco Shares have the right at any time (subject to the   
exercise by Callco of its overriding callright described below) to require      
Exchangeco to redeem any or all of their Shire Exchangeco Shares (the "Retracted
Shares") in exchange for the delivery to such holders of three New Ordinary     
Shares or one ADS (at the option of the holder) for each Retracted Share plus   
any declared and unpaid dividends on the Retracted Share (the "Exchange         
Amount"). Holders of the Shire Exchangeco Shares may effect an exchange by      
presenting to Exchangeco the share certificates representing the Retracted      
Shares together with a duly executed notice in prescribed form (a "Retraction   
Request") and such other documents as may be required to effect the exchange.   

When a holder requests Exchangeco to redeem Retracted Shares, Callco will have  
an overriding right (the "Retraction Call Right") to purchase all but not less  
than all of the Retracted Shares, at a purchase price per share equal to the    
Exchange Amount. Callco is the primary mechanism by which Shire Exchangeable    
Shares maybe acquired in return for New Ordinary Shares or ADS (at the option of
the holder). Upon receipt of a Retraction Request, Exchangeco will immediately  
notify Callco of the Retraction Call Right. Callco must then advise Exchangeco  
within five business days as to whether the Retraction Call Right will be       
exercised. If Callco does not so advise Exchangeco, Exchangeco will notify the  
holder as soon as possible thereafter that Callco will not exercise the         
Retraction Call Right. If Callco advises Exchangeco that Callco will exercise   
the Retraction Call Right within such five business day period, then provided   
the Retraction Request is not revoked by the holder as described below, the     
Retraction Request shall thereupon be considered only to be an offer by the     
holder to sell the Retracted Shares to Callco in accordance with the Retraction 
Call Right.                                                                     

A holder may revoke its Retraction Request, in writing, at any time prior to the
close of business on the business day preceding the date set for retraction (the
"Retraction Date") in which case the Retracted Shares will neither be purchased 
by Callco nor be redeemed by Exchangeco. If a holder does not revoke its        
Retraction Request, on or before the Retraction Date, the Retracted Shares will 
be purchased by Callco or redeemed by Exchangeco, as the case may be, in each   
case as set out above.                                                          

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Liquidation of Exchangeco                                                       

In the event of the liquidation, dissolution or winding-up of Exchangeco or any 
other distribution of the assets of Exchangeco among its shareholders for the   
purpose of winding-up its affairs, holders of the Shire Exchangeco Shares will  
have, subject to applicable law, preferential rights to receive from Exchangeco 
the Exchange Amount for each Shire Exchangeco Share held. Upon the occurrence of
such liquidation, dissolution or winding-up, Callco will have an overriding     
right to purchase all of the outstanding Shire Exchangeco Shares (other than    
Shire Exchangeco Shares held by Shire and its affiliates) from the holders      
thereof for a purchase price per share equal to the Exchange Amount.            

Upon the occurrence and during the continuance of an Exchangeco insolvency event
(essentially the institution of winding up or insolvency proceedings of         
Exchangeco or similar events), Shire shall purchase from each holder of Shire   
Exchangeco Shares (other than Shire and its affiliates) all of the Shire        
Exchangeco Shares held by each such holder. The purchase price payable by Shire 
for each Shire Exchangeco Share so purchased will be the Exchange Amount.       

Liquidation of Shire                                                            

In order for the holders of the Shire Exchangeco Shares to participate on a pro 
rata basis with the holders of Ordinary Shares, on the fifth business day prior 
to the effective date of a Shire Liquidation Event (defined as essentially the  
institution of winding up or insolvency proceedings of Shire or similar events),
each Shire Exchangeco Share (other than those held by Shire or its affiliates)  
will automatically be exchanged for the Exchange Amount.                        

Redemption                                                                      

Subject to applicable law and to the exercise by Callco of its call right       
described below, Exchangeco will redeem all but not less than all of the then   
outstanding Shire Exchangeco Shares for a price per share equal to the Exchange 
Amount on a date (the "Redemption Date") determined by the board of directors of
Exchangeco but not before the tenth anniversary of the Effective Date (subject  
to "Early Redemption" below). Exchangeco will, at least 60 days before the      
Redemption Date or such number of days as the board of directors of Exchangeco  
may determine to be reasonably practicable under the circumstances in respect of
a Redemption Date arising in connection with the Shire Control Transaction (as  
described in "Early Redemption" below), notify the holder of the Shire          
Exchangeco Shares of the Redemption Date.                                       

Callco will have an overriding right (the "Redemption Call Right") to purchase  
on the Redemption Date all but not less than all of the Shire Exchangeco Shares 
then outstanding (other than Shire Exchangeco Shares held by Shire and its      
affiliates) for a purchase price per share equal to the Exchange Amount. Upon   
the exercise of the Redemption Call Right, holders will be obligated to sell    
their Shire Exchangeco Shares to Callco. If Callco exercises the Redemption Call
Rights, Exchangeco's right and obligation to redeem the Shire Exchangeco Shares 
on such Redemption Date will terminate.                                         

Early Redemption                                                                

In certain circumstances, Exchangeco has the right to require a redemption of   
the Shire Exchangeco Shares prior to the tenth anniversary of the Effective     
Date. An early redemption may occur upon:                                       

      (i)   there being fewer than 1,000,000 Shire Exchangeco Shares outstanding
   (other than Shire Exchangeable Shares held by Shire and its
           affiliates), provided that such number may be adjusted by the board
of directors of Exchangeco in certain circumstances;    

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(ii)  the occurrence of the Shire Control Transaction (defined as   
            essentially a merger, amalgamation takeover or similar transaction),
         provided that the board of directors of Exchangeco determines (I)
           that it is not reasonably practicable to substantially replicate or
         modify the terms and conditions of the Shire Exchangeco Shares in
       connection with the Shire Control Transaction and (ii) that the
            redemption of the Shire Exchangeco Shares is necessary to enable the
completion of the Shire Control Transaction; or         

(iii) the failure by holders of Shire Exchangeco Shares to approve  
       necessary action to maintain economic equivalence with Ordinary
Shares.                                                 

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 PART VII- STATUTORY AND GENERAL INFORMATION

1. Responsibility                                                               

The Directors and Proposed Directors, whose names appear in paragraph 2 below,  
accept responsibility for the information contained in this document. To the    
best of the knowledge and belief of the Directors and Proposed Directors, who   
have taken all reasonable care to ensure that such is the case, the information 
contained in this document is in accordance with the facts and does not omit    
anything likely to affect the import of such information.                       

2. Directors and Proposed Directors                                             

(a)   The Directors are listed below together with their respective positions:  

Directors                       Position                      
Dr James Henry Cavanaugh        Non-executive Chairman        
Rolf Stahel                     Chief Executive               
Angus Charles Russell           Group Finance Director        
         Dr Joseph Wilson Totten         Group Research and Development Director
Dr Barry John Price             Senior Non-executive Director 
Dr Bernard Canavan              Non-executive Director        
Dr Zola Philip Horovitz         Non-executive Director        
Ronald Maurice Nordmann         Non-executive Director        
Joseph Edward Smith             Non-executive Director        
John Tetje Spitznagel           Non-executive Director        

It is proposed that, following the Merger, Dr Francesco Bellini, the
   Honourable James Andrews Grant and Gerard Veilleux will be appointed as
non-executive directors of the Company.                             

The business address of all the Directors is, and of the Proposed   
Directors will be, East Anton, Andover, Hampshire SP10 5RG.         

(b)   The brief biographical details of the Directors are as follows: [Dr James 
Cavanaugh joined the Board on 24 March 1997 and was appointed as    
    Non-executive Chairman with effect from 11 May 1999. Dr Cavanaugh is the
President of HealthCare Ventures LLC. Formerly he was President of  
SmithKline & French Laboratories, the US pharmaceutical division of 
SmithKline Beecham Corporation. Prior to that, he was President of  
     SmithKline Beecham Corporation's clinical laboratory business and, before
that, President of Allergan International. Prior to his industry    
   experience, Dr Cavanaugh served as Deputy Assistant to the President of
    the US for Health Affairs on the White House Staff in Washington, DC. He
is a Non-executive Director of MedImmune, Inc. and LeukoSite, Inc.  

Rolf Stahel joined the Group in March 1994 as Chief Executive from  
     Wellcome plc where he worked for 27 years. From April 1990 until February
 1994, he served as Director of Group Marketing reporting to the Chief
  Executive. A business studies graduate of KSL Lucerne, Switzerland, he
   attended the 97th Advanced Managers Program at Harvard Business School.

 Angus Russell joined the Board with effect from December 1999, having
      previously worked for ICI, Zeneca and AstraZeneca for a total of 19 years.
   His last position was Vice President - Corporate Finance at AstraZeneca
  PLC, where he was responsible for financial input into M&A activities,
management of tax, legal, and finance structure, investor relations 
    activities and the management of various financial risks. Prior to this,
   he held a number of positions within Zeneca Group PLC and ICI including
 Group Treasurer, Group Investor Relations Manager, Strategic Planner,
      Marketing Manager and management accounting roles in manufacturing and R &
     D operations. Mr Russell is a chartered accountant, having qualified with
Coopers & Lybrand and is a member of the Association of Corporate   
Treasurers.                                                         

   Dr Wilson Totten joined the Board of Shire in January 1999 as Group R&D
  Director. Dr Totten is a medical doctor and has wide experience in the
   pharmaceutical industry covering all phases of drug development. He has
   substantial experience in the field of CNS disorders. His last position
      was Vice President of Clinical Research & Development with Astra Charnwood
  where he served from 1995 to 1997, having previously worked for Fisons
    Pharmaceuticals from 1989 to 1995, and prior to that with 3M Health Care
and Eli Lilly.                                                      

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    Dr Barry Price joined the Board on 24 January 1996 having spent 28 years
     at Glaxo holding a succession of key executive positions with Glaxo Group
     Research. He is a Non-executive Director of Celltech Chiroscience plc and
Chairman of Antisoma plc. Dr Price is Chairman of the Remuneration  
Committee.                                                          

 Dr Bernard Canavan joined the Board as a Non-executive Director on 11
     March 1999. Dr Canavan is a medical doctor and graduate of the University
     of Edinburgh. He was employed by American Home Products for over 25 years
  until he retired in January 1994. He was president of that Corporation
 from 1990 to 1994, and prior to that was Chairman and Chief Executive
   Officer of American Home Products Pharmaceutical Division, Wyeth-Ayerst
Laboratories. Dr Canavan is also a director of BioChem Pharma Inc., 
 Magainin Pharmaceuticals Inc., 3-Dimensional Pharmaceuticals Inc. and
     Nelson Communications Inc. Dr Canavan is Chairman of the Audit Committee.

Dr Zola Horovitz joined the Board with effect from 23 December 1999,
having previously served as a director of Roberts Pharmaceutical    
    Corporation since October 1996. Dr. Horovitz has been self-employed as a
     consultant in the biotechnology and pharmaceutical industries since 1994.
      From 1959 to 1994 Dr Horovitz held various positions at Squibb Corporation
     and its successor corporation, Bristol-Myers Squibb & Co., including that
      of Vice President, Business Development and Planning. Dr Horovitz received
undergraduate and masters degrees and a Ph.D from the University of 
Pittsburgh.                                                         

Ronald Nordmann served as a non-executive director of Roberts       
 Pharmaceutical Corporation from May 1999 until becoming a director of
    Shire with effect from 23 December 1999. He has been a financial analyst
      in healthcare equities since 1971. Since September 1994 he has held senior
  positions with PaineWebber, Oppenheimer & Co., F. Eberstadt & Co., and
   Warner-Chilcott Laboratories, a division of Warner-Lambert. Mr Nordmann
     received his undergraduate degree from The Johns Hopkins University and a
M.B.A. from Fairleigh Dickinson University.                         

     Joseph Smith served as a non-executive director of Roberts Pharmaceutical
  Corporation from August 1998 and joined the Board of Shire with effect
from 23 December 1999. From 1989 to 1997, Mr Smith served in various
   positions at Warner-Malbert Company, including President of Parke-Davis
      Pharmaceuticals and President of the Shaving Products Division (Schick and
     Wilkinson Sword). Mr Smith previously held positions at Johnson & Johnson
 and served as President of Rorer Pharmaceutical corporation. Mr Smith
   received his undergraduate degree from the University of Buffalo and an
    M.B.A. degree from the Wharton School of the University of Pennsylvania.

      John Spitznagel served as President and Chief Executive Officer of Roberts
    from September 1997 to December 1999, when he joined the Shire Board. He
    was previously executive Vice President-- World-wide Sales and Marketing
    of Roberts from March 1996 to September 1997, having served as President
     of Reed and Carnrick Pharmaceuticals from September 1990 until July 1995.
He previously served as Chief Executive Officer of BioCryst         
     Pharmaceuticals Inc. having held before that various sales, marketing and
management positions in the industry.]                              

      Brief biographical details of the Proposed Directors are set out on page o
of Part I of this document.                                         

(c)   The Directors and Proposed Directors, their current directorships, their  
directorships held during the five years preceding the date of this 
document, the partnerships of which they are currently partners and 
partnerships of which they have been partners during the five years 
preceding the date of this document are as follows:                 

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                                                        [Enlarge/Download Table]

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                                                Current                               Past Directorships/Partnerships               
             Name                     Directorships/Partnerships                                                                    
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
[Dr James Henry Cavanaugh             Diversa Corporation                            Human Genome Sciences                          
                                      Med Immune Inc                                 Inc                                            
                                      3-Dimensional Pharmaceuticals Inc.             Procept Inc                                    
                                      LeukoSite Inc.                                 Magainin Pharmaceuticals Inc                   
                                      Versicor Inc.                                  Genetic Therapy Inc                            
                                                                                     Aronex Pharmaceuticals Inc                     
                                      General Partnerships                                                                          
                                      HealthCare Partners I, II,                                                                    
                                      III, IV and V                                                                                 
                                      General Partnerships                                                                          
                                      HealthCare Ventures I, II III, IV and V                                                       

                                      Limited Partnerships                                                                          
                                      Parker & Parsley 1986-C                                                                       
                                      Parker & Parsley 1987-B                                                                       
                                      Chevy Chase Associates                                                                        
                                      PLM Equipment Growth Fund                                                                     
                                      Cigna Willowbrooke-2 Associates                                                               
                                      Geodyne Energy Income Programs                                                                
                                      Curran Partners LP                                                                            
                                      RPC Real Estate Fund I LLC                                                                    
------------------------------------------------------------------------------------------------------------------------------------
Mr Rolf Stahel                        None                                           None                                           
------------------------------------------------------------------------------------------------------------------------------------
Mr Angus Charles Russell              [I.C. Insurance Services Ltd                   None                                           
                                      I.C. Insurance Holdings Ltd                                                                   
                                      I.C. Insurance Ltd                                                                            
                                      Zeneca Insurance Company  Ltd                                                                 
                                      Zeneca Finance (Netherlands) Company                                                          
                                      Zeneca Nominees Ltd                                                                           
                                      Zeneca Pensions Trustee Ltd]                                                                  
------------------------------------------------------------------------------------------------------------------------------------
Dr Joseph Wilson Totten               None                                           None                                           
------------------------------------------------------------------------------------------------------------------------------------
Dr Barry John Price                   Celltech Chiroscience plc                      Thallia Pharmaceuticals SA                     
                                      Antisoma plc (Chairman)                        Glaxchem Ltd                                   
                                      Pharmagene plc                                 Glaxo Operations Ltd                           
                                      Chemunex SA                                                                                   
------------------------------------------------------------------------------------------------------------------------------------
Dr Bernard Canavan                    Magainin Pharmaceuticals Inc                   Alpha-Beta Technology Inc                      
                                      Nelson Communications Inc                                                                     
                                      3-Dimensional                                                                                 
                                      Pharmaceuticals Inc                                                                           
------------------------------------------------------------------------------------------------------------------------------------
Dr Zola Philip Horovitz               BioCryst Pharmaceuticals Inc                   Cytomed Inc                                    
                                      Magainin Pharmaceuticals Inc                   Proscript Inc                                  
                                      Synaptic Pharmaceuticals Corporation                                                          
                                      Avigen Inc                                                                                    
                                      Procept Inc                                                                                   
                                      Diacrim Inc                                                                                   
                                      Clinicor Inc                                                                                  
                                      Phyton Inc                                                                                    
                                      3-Dimensional Pharmaceuticals Inc                                                             
                                      Delfys Pharmaceuticals Inc                                                                    
                                      Nitromed Inc                                                                                  
                                      Immunicon Corporation                                                                         
                                      Dov Pharmaceuticals Inc.                                                                      
------------------------------------------------------------------------------------------------------------------------------------
Mr Ronald Maurice Nordmann            Deerfield                                      None                                           
------------------------------------------------------------------------------------------------------------------------------------
Mr Joseph Edward Smith                Boren, LePore Associates                       None                                           
                                      Virus Inc                                                                                     
                                      Avanir Pharmaceuticals                                                                        
                                      Semus Drug Development Corporation                                                            
                                      Claneil Enterprises Inc                                                                       
                                      International Longevity Center                                                                
                                      Careinsite Inc                                                                                
------------------------------------------------------------------------------------------------------------------------------------
Mr John Tetje Spitznagel              None                                           None                                           
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
Dr Francesco Bellini                  Chambre de Commerce Italienne                  None                                           
                                      Fonds de Recherche de L'institut de                                                           
                                      Cardiologie de Montreal                                                                       
                                      Molson Inc                                                                                    
                                      L'Industrielle-Alliance Compagnie d'assurance                                                 
                                      sur la vie                                                                                    
                                      Adherex                                                                                       
                                      AB Immunosystems                                                                              
------------------------------------------------------------------------------------------------------------------------------------

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                                                        [Enlarge/Download Table]
                                                                                                                                    
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The Honourable James Andrews Grant    United Dominion Industries Ltd                 None                                           
                                      CAE Industries Ltd                                                                            
                                      Canadian Imperial Bank of Commerce                                                            
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Mr Gerard Veilleux                    Gesca                                          The State Hermitage Museum Foundation of       
                                      La Presse                                      Canada Inc.]                                   
                                      Publications JTL                                                                              
                                      Great West Life Assurance Co. & Great West                                                    
                                      Lifeco                                                                                        
                                      Investors Group                                                                               
                                      London Life                                                                                   
                                      Power Technology Investment                                                                   
                                      Corporation(Diffusion Power)                                                                  
                                      QuebecTel/Telus                                                                               
                                      Universite McGill                                                                             
                                      Fondation Baxter & Alma Ricard                                                                
                                      Loeb Research Institute                                                                       
                                      Theatre du Rideau-Vert                                                                        
                                      McCord Museum                                                                                 
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(d)   Save as disclosed in sub-paragraph (e) below, no Director or Proposed     
Director of the Company has:                                        

(i)   any unspent convictions for indictable offences;              

(ii)  been declared bankrupt;                                       

     (iii) been subject to any public criticism by any statutory or regulatory
authority;                                              

     (iv)  been disqualified by a court from acting as a director of or in the
management of any company;                              

(v)   been a director of a company which has been placed in         
            administration, receivership or liquidation whilst he was a director
       of that company or within twelve months after he ceased to be a
director of that company; or                            

(vi)  been a partner of a partnership which has been placed into    
liquidation or administration.                          

(e)   (i)   Dr Barry Price is a former director of Thallia Pharmaceuticals      
            SA, which went into judicial liquidation on 3 August 1999. Creditors
   were given 12 months from the date of the judgement for the
     commencement of the company's judicial liquidation to declare
           amounts owing to them. On 29 September 1999 Thallia Pharmaceuticals
           SA was authorised by a court to carry on business for a further two
months.                                                 

  (ii)  Dr Bernard Canavan is a former director of Alpha-Beta Technology
           Inc., which went into an assignment for the benefit of creditors on
         27 January 1999 pursuant to an out of court liquidation in the US
         State of Massachusetts. An assignee was appointed on that date in
          the State of Massachusetts, and a receiver was appointed in the US
    State of Rhode Island, in respect of the debts of Alpha-Beta
          Technology Inc. The assets of Alpha-Beta Technology Inc. were sold
     pursuant to court authorisation, yielding approximately $20.5
           million. Virtually all of the sale proceeds were paid over to Rhode
         Island Economic Development Corporation, which held a mortgage on
            the company's assets in the State of Rhode Island. This mortgage has
            a shortfall deficiency claim of approximately $6,000,000 which, when
          added to the claims of all other creditors filed with the receiver
           and for the assignee, brings the current total of unpaid creditors'
           claims to approximately $9,429,000. It is believed that the company
           creditors are likely to receive about three US cents in the dollar.

3.    The Company                                                               

      The Company, whose registered office and principal place of business is at
    East Anton, Andover, Hampshire SP10 5RG, was incorporated in England and
     Wales with registered number 2883758 on 1 January 1994 under the Act as a
      public limited company with the name Barnhill PLC. The Company changed its
      name to Shire Pharmaceuticals Group plc with effect from 12 December 1994.

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4.    Share capital                                                             

(a)   The authorised and issued and fully paid share capital of the Company, as 
     at o 2001 (the latest practicable date prior to posting of this document)
   and as it will be following the Merger (assuming no exercise of options
   outstanding under the Employee Share Schemes, no exercise of options or
 rights in respect of BioChem Shares and an Average Shire ADS Price of
[more than $o] [less than $o] and assuming all existing BioChem     
Shareholders exchange their BioChem Shares for New Ordinary Shares  
pursuant to the terms of the Merger) is as follows:                 

                                                        [Enlarge/Download Table]

                        At o 2001                                   After the Merger                
        Authorised                    Issued             Authorised                   Issued        
 Ordinary        (pound)      Ordinary     (pound)  Ordinary     (pound)       Ordinary      (pound)
  Shares                       Shares                Shares                     Shares              
                                                                                                    
400,000,000    20,000,000         o           o         o           o              o            o   

    Following the issue of Consideration Shares pursuant to the Merger
   Agreement, o Ordinary Shares will remain authorised but unissued,
subject to the assumptions set out above.                     

(b)   (i)   At the last Annual General Meeting held on 7 July 2000, the         
       Directors were generally and unconditionally authorised for the
       purposes of section 80 of the Act to exercise all or any of the
      powers of the Company to allot relevant securities (within the
        meaning of that section) up to an aggregate nominal amount equal
       to (pound)4,197,625.90 for a period expiring (unless previously
          renewed, varied or revoked by the Company in general meeting) five
           years after the date of the passing of this resolution ("the period
            of authority"), save that the Company may before such expiry make an
           offer or agreement which would or might require relevant securities
    to be allotted after such expiry and the Directors may allot
         relevant securities pursuant to any such offer or agreement as if
the authority conferred hereby had not expired;         

  (ii)  At the same Annual General Meeting, the Directors were empowered
            pursuant to section 95 of the Act to allot equity securities (within
          the meaning of section 94(2) of the Act) pursuant to the authority
          conferred upon them under (i) above as if section 89(1) of the Act
           did not apply to any such allotment. This power: (a) expires at the
     end of the period of authority save that during the period of
           authority the Company may make an offer or agreement which would or
          might require equity securities to be allotted after the expiry of
    such period and the Directors may allot equity securities in
       pursuance of any such offer or agreement; (b) is limited (i) to
       allotments of equity securities where such securities have been
      offered (whether by way of a rights issue, open offer or other
           pre-emptive offer) to holders of Ordinary Shares made in proportion
           (as nearly as may be) to their existing holdings of Ordinary Shares
           but subject to the Directors having a right to make such exclusions
          or other arrangements in connection with the offering as they deem
     necessary or expedient, first, to deal with equity securities
    representing fractional entitlements, secondly, to deal with
           Ordinary Shares represented by depository receipts and, thirdly, to
       deal with legal or practical problems under the laws of, or the
            requirements of any recognised regulatory body or any stock exchange
          in, any territory; and (ii) to allotments (otherwise than pursuant
        to the powers referred to in (i) above) of equity securities for
    cash up to an aggregate nominal amount of (pound)611,297.55.

     (iii) At the same Annual General Meeting, subject to resolution (i) above
           and in addition and without prejudice to resolution (ii) above, the
            Directors were empowered pursuant to Section 95 of the Companies Act
          1985 to allot equity securities (within the means of section 94(2)
           of the Companies Act 1985) of the Company pursuant to the authority
   conferred upon them at (i) above as if section 89(1) of the
         Companies Act 1985 did not apply to such allotment, provided that
     this power: (i) shall expire five years after the date of the
           passing of this resolution, save that the Company may make an offer
         or agreement which would or might require equity securities to be
     allotted after such expiry and the Directors may allot equity
          securities pursuant to any such offer or agreement as if the power
      conferred hereby has not expired; and (ii) shall be limited to
    allotment of equity securities to raise funds solely for the
        purposes of repaying in whole or in part any outstanding amounts
under the facility agreement entered into on 19         

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      November 1999 between inter alia, the Company, Roberts and the
           Company's subsidiaries in the United States of America as borrowers
           and DLJ Capital Funding, Inc. as agent; and (iii) shall not involve
            the allotment of more than (pound)430,000 in nominal value or equity
securities.                                             

      (iv)  At the same Annual General Meeting, the Company adopted new Articles
      of Association, a summary of which is contained in paragraph 8
below.                                                  

(iii)                                                               

(c)   The provisions of section 89(1) of the Act (which, to the extent not      
disapplied pursuant to section 95 of the Act, confer on shareholders
      rights of pre-emption in respect of the allotment of equity securities (as
     defined in section 94(2) of the Act) which are, or may be, paid up wholly
      in cash) apply to the balance of the authorised but unissued share capital
 of the Company to the extent not disapplied pursuant to the authority
 under section 95 of the Act referred to in sub-paragraphs (b)(ii) and
(b)(iii)above, subject to paragraph (d) below.                      

(d)   The ordinary resolution to be proposed at the Extraordinary General       
 Meeting will, if passed, increase the authorised share capital of the
     Company to (pound)o, being o Ordinary Shares. The amount of this increase
     represents o per cent. of the total Ordinary Shares in issue as at o 2001
    or an increase of o per cent. from the previous authorised share capital
   of the Company. The principal reason for the increase in the authorised
share capital is to enable the Directors to issue the Consideration 
     Shares. If passed this resolution will also approve the Merger (including
     the conversion of share options and rights held by BioChem option holders
    over BioChem Shares into options over Ordinary Shares) and will give the
    Directors authority to allot unissued share capital with a nominal value
    of up to (pound)o, representing o per cent. of the total Ordinary Shares
      in issue as at o 2001, for a period expiring 5 years after the date of the
      passing of this resolution. The resolution will also create Special Voting
   Shares with the rights, privileges and restrictions to it as set out in
    the Notice of the Extraordinary General Meeting. By a special resolution
   also to be proposed at the Extraordinary General Meeting, the Directors
will be empowered to allot equity securities (within the meaning of 
    section 94(2) of the Act) of the Company for a similar period of 5 years
  as if section 89(1) of the Act did not apply, provided that this power
     shall be limited, inter alia, to allotments of equity securities for cash
up to an aggregate nominal amount of (pound)o.                      

(e)   As the number of New Ordinary Shares to be issued depends upon market     
    prices after the date of this document, and upon the elections for Shire
   Exchangeco Shares made by BioChem Shareholders pursuant to the terms of
  the Merger Agreement, the amount of the Company's issued share capital
 immediately following completion of the Merger is not yet known. As a
result, the authorities being sought at the EGM under section 80 and
   section 95 of the Act, which assume that the maximum possible number of
New Ordinary Shares will be issued, may exceed IPC guidelines. The  
  Directors of the Enlarged Group undertake that, to the extent that the
  aggregate nominal amount of relevant securities (within the meaning of
section 80 of the Act) up to which the Directors are generally and  
    unconditionally authorised for the purposes of section 80 and section 95
      of that Act to allot such relevant securities exceeds such guidelines, the
     Directors shall not allot relevant securities pursuant to any outstanding
authorities.                                                        

(f)   The Ordinary Shares are in registered form and are listed only on the     
    Official List and admitted to trading only on the London Stock Exchange,
as will be the New Ordinary Shares.                                 

(g)   The New Ordinary Shares will be in registered form. It is expected that   
    definitive share certificates, to the extent the New Ordinary Shares are
     not being held in the CREST system, are expected to be despatched by post
by o 2001. No temporary documents of title will be issued.          

(h)   The following are details of options to acquire Ordinary Shares granted to
certain Directors and employees under the Employee Share Schemes    
   (excluding the Long Term Incentive Plan) which were not issued for cash
      consideration and were outstanding at o 2001 (being the latest practicable
   date prior to the publication of this document) and which represent the
  maximum number of Ordinary Shares which may be issued pursuant to such
options:                                                            

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                                                   Exercise date       Number of
        Scheme                  Exercise       Earliest      Latest   Ordinary
                  Notes     Price ((pound))                           Shares
        o         o              o             o             o         o

    Further details of the Employee Share Schemes are set out in paragraph 5
of this Part VIII. Details of Directors' interests in shares of the 
Company are included in paragraph 9 of this Part VIII.              

(i)   The following are details of awards in respect of Ordinary Shares granted 
     to certain Directors and employees under the Long Term incentive Plan and
     which were outstanding at o 2001 (being the latest practicable date prior
to the publication of this document):                               

                                                                [Download Table]

Value of Award     Number of Ordinary Shares  Earliest date on which award
                                              may be vested               
                                                                          
(pound) 390,243    83,848                     8 April 2003                
(pound) 77,351     16,440                     12 May 2003                 
(pound) 56,500     10,000                     25 July 2003                
(pound) 54,220     10,000                     22 Aug 2003                 
(pound) 1,211,731  120,452                    28 February 2004            
(pound) 611,962    62,701                     6 June 2004                 

(j)   The share capital history of the Company for the three years prior to o   
    2001 (being the latest practicable date prior to the publication of this
document) is as follows:                                            

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      (i)   On 1 April 1998 6,000,000 Ordinary Shares were issued by the Company
      pursuant to an offer of 24,217,255 Ordinary Shares at 343p per
            Ordinary Share, including Ordinary Shares underlying 7,265,177 ADSs.

(ii)  On 30 June 1998 the authorised share capital was increased to 
     (pound)10,000,000 by the creation of an additional 22,000,000
Ordinary Shares of 5p each.                             

      (iii) Pursuant to an agreement dated 30 July 1999 made between the Company
          and Arenol Corporation, Arenol Corporation held a loan note with a
           principal amount of US$6,000,000 which is convertible into Ordinary
        Shares. The Company issued 533,279, 560,076 and 541,478 Ordinary
   Shares on 13 March 2000, 3 August 2000 and 6 November 2000,
  respectively to Arenol Corporation in consideration of the
conversion of part of the loan notes in the Company.    

     (iv)  On 22 December 1999 the authorised share capital of the Company was
       increased to (pound)20,000,000 by the creation of an additional
200,000,000 new Ordinary Shares of 5p each              

      (v)   The Company issued 160,546 and 47,641 Ordinary Shares on 22 May 2000
          and 15 August 2000, respectively to Biorex Laboratories Limited at
        the request of Glycyx Pharmaceuticals Limited ("Glycyx") in part
           consideration for the transfer of assets and grant of rights to the
       Company pursuant to an agreement between Glycyx and the Company
dated 17 May 2000.                                      

   (vi)  The following Ordinary Shares have been issued as a result of the
exercise of options:                                    

(k)   Pursuant to an asset purchase agreement among the Company, Shire Supplies 
     US LLC, Arenol Corporation and Richard Vorisek and Robert Jaeder dated as
of 5 March 1999, the Company issued a $5,800,000 principal amount   
    Unsecured Convertible Zero Coupon Loan Note due 30 July 2001 (the "First
    Loan Note") and a $6,000,000 principal amount Unsecured Convertible Zero
     Coupon Loan Note due 30 July 2004 (the "Second Loan Note"). The agreement
provides for the cancellation of certain specified amounts of the   
    aggregate principal amount of the First Loan Note and of such amounts of
      the Second Loan Note on certain dates to the extent of certain indemnified
     losses, or, to the extent that such amounts of the First Loan Note or the
 Second Loan Note are not so cancelled, for their conversion into that
   number of Ordinary Shares equal to the amounts not cancelled divided by
     the product of (A) the lower of (pound)3.565 or the midweek closing price
    of the Ordinary Shares on the London Stock Exchange on the relevant date
and (B) the exchange rate on the relevant date.                     

(l)   Save as disclosed in this paragraph 4 there has been no alteration in the 
     issued share capital of the Company since o 1998 (being three years prior
   to o 2001, the latest practicable date prior to the publication of this
     document), and no share or loan capital of the Company has been issued or
      agreed to be issued since incorporation or (save in respect of the Merger)
    is now proposed to be issued and no share or loan capital of the Company
or any of its subsidiaries is under option or has been agreed,      
conditionally or unconditionally, to be put under option.           

5.    Employee Share Schemes and BioChem Stock Option Plans                     

There are [six] share option schemes in subsidiaries of the Company, the SHL    
Scheme, the SPC Scheme, the Roberts' Incentive Stock Option Plan, the Roberts'  
1996 Equity Incentive Plan and the Roberts' Restricted Stock Option Plan.       
Options over shares in Pharmavene Inc. were converted into options over Ordinary
Shares under the SLI Plan. Options over shares in Richwood Pharmaceuticals      
Company, Inc. were converted into options over Ordinary Shares under the SRI    
Plan. The Stock Purchase Plan was adopted at the same time as the acquisition of
Pharmavene Inc. No further options will be granted under any of the SHL Scheme, 
the SPC Scheme, the SLI Plan, the Stock Purchase Plan, the SRI Plan , the       

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Roberts' Incentive Stock Option Plan, the Roberts' 1996 Equity Incentive Plan   
and the Roberts' Restricted Stock Option Plan Upon admission of its shares to   
the Official List in February 1996, the Company adopted two share option        
schemes, the Executive Scheme and the Sharesave Scheme. The Sharesave Scheme and
part A of the Executive Scheme have been approved by the Inland Revenue. At the 
last Annual General meeting held on 7 July 2000, the Company adopted a further  
share option scheme, the ESO Scheme. A summary of each of these schemes is set  
out below. None of the options under these schemes have been issued for monetary
consideration.                                                                  

(a)   The SHL Scheme                                                            

Options granted under the SHL Scheme result, when exercised, in     
     participants acquiring Ordinary Shares at an exercise price determined by
the board of directors of SHL at the date of grant. Options are     
non-transferable, except in the case of the death of a participant. 
Options granted under the SHL Scheme are normally exercisable as to 
  one-third after one year, two-thirds after two years and in full three
   years after the date of grant, with a last exercise date of seven years
      after the date of grant. Options expire three months after the termination
     of the employment of the participant or immediately on termination in the
case of a dismissal by reason of serious misconduct.                

(b)   The SPC Scheme                                                            

The SPC Scheme was assumed by the Company in connection with the    
acquisition of SPC. It covers options granted by SPC to its then    
      employees. Options granted under the SPC Scheme result, when exercised, in
     participants acquiring Ordinary Shares at an exercise price determined by
the board of directors of SPC at the date of grant. Options are     
non-transferable, except in the case of the death of a participant. 
   Options granted under the SPC Scheme are normally exercisable after two
     years and expire seven years after being granted, although early exercise
    is permitted where a participant ceases employment due to death, injury,
 disability, redundancy or retirement. Options expire six months after
termination of employment of the participant other than by reason of
 death, injury, disability, redundancy or retirement or immediately on
termination of employment for any other reason.                     

(c)   The Executive Scheme                                                      

  Part A of the Executive Scheme has been approved by the Inland Revenue
     under Schedule 9 to the Income and Corporation Taxes Act 1988 in order to
   allow for the grant of approved options up to the (pound)30,000 Revenue
     limit per employee. Any additional options are unapproved options granted
    under part B of the Executive Scheme. Set out below are summaries of the
principal terms of parts A and B of the Executive Scheme.           

Part A of the Executive Scheme                                                  

(i)   Grant of options                                              

  Options may be granted by the remuneration committee ("the Committee")
   within 42 days following the announcement by the Company of its results
 for any period, or at any other time when the Committee believes that
      exceptional circumstances exist to justify the grant of options. No option
may be granted more than 10 years after the date of adoption of the 
     Executive Scheme. Options are not transferable. Options granted under the
     Executive Scheme will normally be exercisable only if performance-related
criteria imposed by the Committee are met (see sub-paragraph (viii) 
below).                                                             

(ii)  Eligibility                                                   

      The Executive Scheme provides for the grant of options to acquire Ordinary
     Shares, subject to the limitations mentioned in sub-paragraph (ix) below,
      to selected employees and full-time directors of the Company or any of its
subsidiaries.                                                       

(iii) Exercise price                                                

 The price per share at which Ordinary Shares may be acquired upon the
     exercise of an option shall be determined by the Committee at the time of
grant but shall be not less than the higher of:                     

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            (a)   the middle-market quotation of Ordinary Shares for the dealing
                day immediately preceding the grant date as derived from the
                Official List (or such other price as may be agreed with the
Inland Revenue); and                        

           (b)   in the case of an option to subscribe for shares, the nominal
value of such shares.                       

(iv)  Exercise of options                                           

          An option is exercisable normally only after the third anniversary
            of the date of grant and cannot in any event be exercised later than
 the tenth anniversary of the date of grant. Except in the
          circumstances outlined in this sub-paragraph (iv) below, an option
         may not normally be exercised on any occasion unless the relevant
           performance conditions are met. If an option holder dies his or her
      option may be exercised by his or her personal representatives
          within 12 months thereafter. If any option holder leaves the Group
    by reason of injury, disability, redundancy or retirement on
        reaching his or her contractual retirement age (but in this case
      only if the relevant performance conditions are met) or if the
           company or business with which he or she holds office or employment
           is sold outside the Group, then he or she may exercise an option by
           the latest of (i) twelve months after the date of termination; (ii)
          42 months after the grant date; and (iii) 42 months after the last
          tax-relieved exercise by him of a Revenue approved executive share
          option. If an option holder leaves the Group for any other reason,
      he or she may only exercise an option with the approval of the
Committee.                                              

            Early exercise of options within specified periods is also permitted
          in the event of a take-over or reconstruction or winding up of the
            Company. In the case of a take-over or reconstruction options may be
           exchanged for options over the acquiring company's shares, but only
with the consent of the acquiring company.              

(v)   Rights attaching to the shares                                

         All Ordinary Shares issued upon the exercise of options will rank
       equally in all respects with other Ordinary Shares for the time
    being in issue (save as regards any rights attaching to such
           Ordinary Shares by reference to a record date prior to the transfer
        or allotment of such shares) and application to the London Stock
           Exchange will be made for any allotted shares to be admitted to the
Official List.                                          

(vi)  Variation of share capital                                    

          In the event of any variation in the share capital of the Company,
            the Committee may adjust the total number of Ordinary Shares subject
         to any option and/or the exercise price under any option with the
prior approval of the Inland Revenue.                   

(vii) Alteration of the Executive Scheme                            

           The Committee may, at any time alter or add to the Executive Scheme
       but may not make any alteration or addition to the advantage of
          participants without the prior approval of shareholders in general
  meeting except for minor amendments (i) for the purpose of
         administration of the Executive Scheme or (ii) to take account of
           any change in legislation or (iii) to obtain or maintain favourable
          tax or regulatory treatment for option holders, the Company or any
          company within the Group, or amendments solely relating to special
           terms (including performance conditions). No alteration may be made
           to the disadvantage of participants without their majority consent.
   Any alteration requires the approval of the Inland Revenue.

(viii) Performance conditions                                       

   The performance conditions to be imposed on options will be
       determined by the Committee before such options are granted. In
       making such determination the Committee will have regard to the
    guidance issued from time to time by the bodies representing
       institutional shareholders[, insofar as they are appropriate to
          smaller quoted companies,] and will seek to identify factors which
         represent a fair measure of performance and genuinely reflect the
           efforts and achievements of the Group's management. The performance
    conditions applicable to options granted in any year will be
            described in the Company's annual report and accounts for that year.
            The performance conditions currently applying to options require the
Company's share price to                                

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        increase at a compound rate of at least 20.5 per cent. per annum
            over a minimum three-year measurement period to exercise all options
            and to increase by at least 14.5 per cent. per annum (compounded) to
         exercise 60 per cent. of the options granted. If these conditions
      are not met after the initial three years, they are thereafter
            tested quarterly by reference to share price growth over an extended
        period. If the share price does not meet these conditions at any
            time, none of the options will become exercisable. The Committee may
            from time to time vary any such performance conditions as they apply
        to outstanding options if, in their opinion, to do so would more
           effectively achieve the objective of affording realistic incentives
to option holders.                                      

(ix)  Limits of the Executive Scheme                                

         The Executive Scheme is subject to the following dilution limits:

            (a)   in any period of 10 years, not more than five per cent. of the
              issued ordinary share capital of the Company may be placed
         under option under the Executive Scheme and any other
 executive share option scheme of the Company;

       (b)   in the period of four years following the adoption of the
               Executive Scheme, not more than 2.5 per cent. of the issued
             ordinary share capital of the Company may be placed under
             option under the Executive Scheme and any other executive
share option scheme of the Company;         

            (c)   in any period of three calendar years, not more than three per
                 cent. of the issued ordinary share capital of the Company may
             be placed under option under the Executive Scheme and any
       other executive share option scheme of the Company;

          (d)   in any period of five years, not more than five per cent. of
               the issued share capital of the Company may be placed under
           option or issued under any employee share scheme of the
Company;                                    

        (e)   in any period of 10 years the market value as at the grant
               date of options granted to any participant in the Executive
            Scheme (excluding options previously exercised) must not
                exceed four times his annual remuneration (excluding bonuses
and benefits in kind); and                  

          (f)   in any period of 10 years, not more than 10 per cent. of the
              issued ordinary share capital of the Company may be placed
                 under option or issued under any employee share scheme of the
Company;                                    

(g)   at any one time, the market value as at the grant date of options held by 
any one participant must not exceed (pound)30,000.                  

With the exception of (g), the above limits exclude shares under option granted 
prior to the admission of the Ordinary Shares to the Official List on 15        
February 1996.                                                                  

Part B of the Executive Scheme                                                  

The provisions of part A of the Executive Scheme above apply equally to options 
granted under Part B, with the following principal exceptions:                  

    (i)   any options granted under part B will have a maximum life of seven
          years or such other period not exceeding 10 years as the Committee
may determine;                                          

   (ii)  the provisions of part A requiring Inland Revenue consent for any
           actions of the Committee do not apply to options granted under part
B; and                                                  

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            the limit in sub-paragraph (ix)(g) of part A above does not apply to
options granted under part                              

B. In addition, part B of the Executive Scheme permits options granted to       
employees of a participating company who are or may become subject to taxation  
on their pay in the US ("US employees") to qualify as incentive stock options   
for US tax purposes. A maximum of 4,000,000 options may be granted to US        
employees under these provisions. All other limits, described in sub-paragraph  
(ix) above, continue to apply.                                                  

The Sharesave Scheme                                                            

          The Sharesave Scheme has been approved by the Inland Revenue under
Schedule 9 to the Income and Corporation Taxes Act 1988.

(i)   Eligibility                                                   

          All UK employees and full-time directors of the Company and any of
      its subsidiaries participating in the Sharesave Scheme who are
            employed by the Group on the date invitations for options are issued
            and have been employed throughout the period of six months ending on
     the last day of the last financial year of the Company ending
    immediately prior to the date of grant of options ("eligible
           employees") are eligible to participate in the Sharesave Scheme, as
         are any further employees or directors nominated by the Board for
this purpose.                                           

(ii)  Grant of options                                              

           Eligible employees may be invited by the Board to apply for options
        under the Sharesave Scheme to acquire Ordinary Shares. Employees
       applying for options must agree to make regular monthly savings
       (minimum (pound)10, maximum (pound)250) for three or five years
         under a special Sharesave savings contract. The funds saved (plus
     interest or, as appropriate, bonus contributions) are used by
            employees to exercise options after three or five years. Options may
    only be granted during the period of six weeks following the
            announcement by the Company of its results for any period, or at any
           other time when the circumstances are considered by the Board to be
         sufficiently exceptional to justify such grant. No options may be
    granted more than 10 years after the date of adoption of the
Sharesave Scheme. Options are not transferable.         

(iii) Option price                                                  

          Ordinary Shares may be acquired at a price to be determined by the
          Board before the grant of the option. This price shall not be less
       than 80 per cent. of the middle-market quotation of an Ordinary
         Share (as derived from the Official List) on the dealing day last
          preceding the period of five business days ending with the date on
          which invitations to apply for options are given (or on such other
         day as may be agreed with the Inland Revenue) or, if greater, the
nominal value of an Ordinary Share.                     

(iv)  Exercise of options                                           

        An option granted under the Sharesave Scheme may not normally be
      exercised until after three or five years, as mentioned above.
       Special provisions, permitting the early exercise of options in
           certain circumstances, apply in respect of option holders who cease
           employment with the Group before completing their savings contracts
          in the event of death, disability, redundancy or retirement at the
      age of 65 or contractual retirement age. The early exercise of
       options is also permitted in the exceptional circumstances of a
         take-over or reconstruction of the Company, in which case options
     may alternatively be exchanged for options over the acquiring
    company's shares, but only with the consent of the acquiring
company.                                                

(v)   Rights attaching to shares                                    

         All Ordinary Shares allotted on the exercise of options under the
            Sharesave Scheme will rank pari passu with all other Ordinary Shares
       of the Company for the time being in issue (save as regards any
          right attaching to such shares by reference to a record date prior
to the date of                                          

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            allotment) and application will be made to the London Stock Exchange
for such shares to be admitted to the Official List.    

(vi)  Limits of the Sharesave Scheme                                

         The Sharesave Scheme is subject to the following dilution limits:

;                                                       

         (a)   in any period of 10 years not more than 10 per cent. of the
              issued ordinary share capital of the Company may be placed
                  under option or issued under the Sharesave Scheme or any other
employee share scheme of the Company; and   

        (b)   the Board may impose a lower limit on the number of shares
                  which may be placed under option under the Sharesave Scheme on
any occasion.                               

          The above limits exclude options granted prior to the admission of
     the Ordinary Shares to the Official List on 15 February 1996.

(vii) Variation of share capital                                    

          In the event of any variation in the issued ordinary share capital
           of the Company, the Board may make such adjustments as it considers
         appropriate to the total number of Ordinary Shares subject to any
            option and/or the exercise price under any option, provided that any
     such adjustment is approved in advance by the Inland Revenue.

(viii) Alteration of the Sharesave Scheme                             

       The Board may at any time alter or add to the Sharesave Scheme.
          However, the prior approval of the Company in general meeting must
    be obtained in the case of any alteration or addition to the
     advantage of participants, except for any minor alteration or
          addition to benefit the administration of the Sharesave Scheme, to
           take account of any change in legislation, or to obtain or maintain
    favourable tax, exchange control or regulatory treatment for
       participants. Any alteration requires the prior approval of the
Inland Revenue.                                         

(e)   The Stock Purchase Plan                                                   

(i)   Structure                                                     

The Stock Purchase Plan (the "Plan") was adopted at the 
   extraordinary general meeting on 14 March 1997. The Plan is
           available to employees of US subsidiaries of the Company. Under the
     Plan, employees are able to purchase Ordinary Shares with the
        proceeds of amounts deducted by the employer from the employee's
           salary. The Plan qualifies as an employee stock purchase plan under
section 423 of the US Internal Revenue Code of 1986.    

(ii)  Eligibility                                                   

            The Plan is open to individuals who are employees of US subsidiaries
         of the Company designated by the Board who work at least 20 hours
per week and more than five months in any calendar year.

          The Plan is operated by the Remuneration Committee of the Board or
          such other committee as is selected by the Board to administer the
Plan (the "Committee").                                 

(iii) Offering of Shares                                            

           In order to participate in the Plan individual employees enter into
           an agreement authorising deductions to be made from their salary on
        each salary payment date during an offering period (an "Offering
           Period"). The Plan is implemented by Offering Periods determined by
         the Committee, which may be either consecutive or concurrent. The
        duration of an Offering Period may not exceed 27 months, and the
        Offering Periods begin within the period of six weeks commencing
          with the business day next following the date on which the Company
          announces its results for any period or at any other time when the
        circumstances are considered by the Committee to be sufficiently
   exceptional to justify the beginning of an Offering Period.

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         Individuals may elect to have up to $500 per month (or such other
      amount set by the Committee) of their salary deducted for this
            purpose. Payroll deductions continue throughout the Offering Period.
           A participant may discontinue participation in the Plan at any time
during the Offering Period.                             

(iv)  Grant of Option                                               

           Each eligible employee participating in the Plan during an Offering
        Period is granted an option to purchase, on the last day of that
           Offering Period, a number of Ordinary Shares determined by dividing
           the total payroll deductions accumulated during the Offering Period
    and retained in the participant's account, by the applicable
        purchase price. Unless otherwise determined by the Committee, no
           interest is payable on the payroll deductions. During each Offering
            Period no employee is permitted to purchase more than 7,000 Ordinary
        Shares (or such other amount as is set by the Committee prior to
commencement of the Offering Period).                   

            The purchase price is set by the Committee and is equal to either 85
            per cent. of the market value of the Ordinary Shares on the first or
        last day of the Offering Period, whichever is the lower, or such
       higher price as is set by the Committee at the beginning of the
Offering Period.                                        

(v)   Exercise                                                      

       Unless a participant withdraws from the Plan, the participant's
         option is exercised automatically on the last day of the Offering
         Period and the maximum number of Ordinary Shares under option are
           purchased for that participant at the applicable purchase price. No
    fractions of shares are purchased. Any remaining amounts are
         retained in the participant's account for the subsequent Offering
Period unless the participant withdraws from the Plan.  

(vi)  Termination of Employment                                     

      On a participant ceasing to be an employee for any reason, the
            participant will be deemed to withdraw from the Plan and the payroll
         deductions credited to that participant's account but not used to
exercise the option will be returned to the participant.

(vii) Limits on the Plan                                            

           The maximum number of Ordinary Shares made available for sale under
       the Plan is 21,000,000. In addition, limits equivalent to those
         described in paragraph (d)(vi) above in relation to the Sharesave
Scheme apply in relation to the Plan.                   

Rights to exercise options may not be assigned, transferred or pledged or       
otherwise disposed of in any way.                                               

(viii) Adjustments                                                    

       The number of Ordinary Shares which an employee is permitted to
           purchase in any Offering Period and the price per share of Ordinary
          Shares covered by each option will be adjusted in the event of any
     subdivision or consolidation of the ordinary share capital or
capitalisation.                                         

(ix)  Alteration of the Plan                                        

          The Board may at any time terminate or amend the Plan. However the
            provisions relating to the identity of the participants, limitations
           on the number or amount of Ordinary Shares subject to the Plan, the
          maximum entitlement of participants or the basis for determining a
       participant's entitlement cannot be altered to the advantage of
          participants without the prior approval of shareholders in general
          meeting (except for minor amendments to benefit the administration
            of the Plan, to take account of a change in legislation or to obtain
            or maintain favourable tax, exchange control or regulatory treatment
            for participants in the Plan or for the Company or any member of the
Group).                                                 

(f)   The SLI Plan                                                              

   Following the acquisition of Pharmavene Inc., the SLI Plan (then called
     the Pharmavene 1991 Stock Option Plan) was amended such that options over
Pharmavene common stock were                                        

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    replaced by options over Ordinary Shares. Under the SLI Plan, options to
    acquire a total of o Ordinary Shares at prices ranging from $o to $o per
share are currently outstanding.                                    

      It is intended that no further options will be granted under the SLI Plan.

(g)   The SRI Plan                                                              

Following the acquisition of Richwood Pharmaceutical Company, Inc.  
    ("Richwood") the SRI Plan (then consisting of the 1993 Plan and the 1995
Plan) was amended such that options over Richwood common stock were 
   replaced by options over Ordinary Shares under the SRI Plan. Options to
    acquire a total of o Ordinary Shares at prices ranging from $o to $o per
share are currently outstanding.                                    

      It is intended that no further options will be granted under the SRI Plan.

(h)   The Long Term Incentive Plan                                              

(i)   Structure                                                     

            The Long Term Incentive Plan (the "Plan") was adopted at the general
meeting on 30 June 1998.                                

         Under the Plan, the Company may at any time, with the approval of
          the Remuneration Committee, grant, or request that trustees grant,
      an award to any full-time employee of any member of the Group.

(iii) Eligibility                                                   

            An award may be made to any full-time employee (including a director
           who is also such an employee) of a member of the Group on the terms
        set out in the Plan and upon such other terms as the Board (or a
       committee appointed by the Board) may specify, provided that no
          award may be granted to an employee who is within two years of his
contractual retirement age.                             

(iii) Awards                                                        

         An award will specify whether it is a "Share Option" (under which
          the shares are transferred only on its exercise) or a "Conditional
Allocation" (under which the shares automatically become
 transferable when the relevant conditions are satisfied).

            An award may only be granted within six weeks following the approval
          and adoption of the Plan by shareholders and thereafter within six
        weeks following an announcement of the Company's results for any
   period or if the Board considers that there are exceptional
         circumstances. No awards may be granted more than ten years after
            the date on which the Plan is approved and adopted by the Company in
general meeting.                                        

       The number of Ordinary Shares in respect of which awards may be
            granted to any person in any financial year of the Company shall not
           exceed such number as has a market value equal to 100 per cent. (or
    such lower percentage as, in the opinion of the Remuneration
      Committee, reflects other incentive opportunities which may be
  available to him in respect of that financial year) of his
            contractual basic salary (excluding bonuses, allowances and benefits
            in kind) payable as at the award date. For this purpose, the "market
           value" is taken to be an amount equal to the average of the closing
            prices of Ordinary Shares (as derived from the Official List) on the
five dealing days last preceding the award date.        

(iv)  Exercise of Awards                                            

            The exercise of an award granted as a Share Option shall be effected
         by giving notice in writing to the Company. An award granted as a
            Share Option may only be exercised, and where an award is granted as
            a Conditional Allocation Ordinary Shares shall only be transferable,
to the extent that certain conditions are satisfied.    

        In addition, unless the Board specifies otherwise at the time an
          award is made, an award granted as a Share Option may be exercised
            only on or after the fourth anniversary of the award date and, where
           an award is granted as a Conditional Allocation, Ordinary Shares in
         respect of which the award is made will be transferable following
the fourth anniversary of the award date.               

(v)   Termination of Employment                                     

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               If any participant ceases to be a director or employee of a
           member of the Group or any other specified body corporate (a "Group
           Member"), by reason of injury, ill-health, disability or redundancy
        or by reason that his office or employment is in a company which
          ceases to be a Group Member, or relates to a business or part of a
            business which is transferred to a person who is not a Group Member,
           then an award granted as a Share Option may be exercised within the
         12 months after his ceasing to be a director or employee, but may
            not be exercised after the expiry of that period. If any participant
           ceases to be a director or employee of a Group Member for any other
           reason, any award granted as a Share Option or any award granted as
           a Conditional Allocation shall not be transferable unless permitted
by the Board.                                           

(vi)  Adjustments                                                   

            Where Ordinary Shares have or may become transferable to a person in
          respect of an award, the Board may determine that, in substitution
           for his right to acquire such a number of those shares as the Board
         may decide, he will be paid by way of additional emoluments a sum
equal to a cash equivalent of that number of shares.    

           The number of Ordinary Shares in respect of which any award granted
           as a Share Option may be exercised or the number of Ordinary Shares
    which may be transferred in respect of an award granted as a
  Conditional Allocation may be adjusted in the event of any
          sub-division or consolidation of the ordinary share capital of the
Company or a capitalisation.                            

(vii) Alteration of the Plan                                        

          The Board may at any time alter the Plan or the terms of any award
         granted under it. However, the provisions of the Plan relating to
    eligibility, limits on participation, the maximum individual
            entitlement, the grant or exercise of awards or their adjustment may
           not be altered without the prior approval by ordinary resolution of
           the members of the Company in general meeting (except for any minor
      alterations to benefit the administration of the Plan, to take
   account of a change in legislation or to obtain or maintain
    favourable tax, exchange control or regulatory treatment for
participants or any member of the Group).               

(i)   The 2000 Executive Share Option Scheme                        

       The 2000 ESO Scheme enables options over ordinary shares in the
            Company to be granted to selected employees and full-time directors.

    It is divided into two parts: Part A which is intended to be
            approved by the Inland Revenue, offering favourable tax treatment on
the exercise of options and Part B, the unapproved part.

No payment will be required for the grant of options.               

Part A of the 2000 ESO Scheme                                       

(i)   Eligibility                                                   

         With the approval of the Remuneration Committee (the""Committe"")
     options to acquire ordinary shares may be granted to selected
      employees and full-time directors of the Company or any of its
        subsidiaries (other than those due to retire within two years of
grant).                                                 

(ii)  Grant of options                                              

 Options may be granted by the Committee within 42 days of
            shareholder approval of the 2000 ESO Scheme or within 42 days of the
          date Part A is approved by the Inland Revenue. Thereafter, options
       may be granted within 42 days following the announcement by the
            Company of its results for any period, or at any other time when the
          Committee believes that exceptional circumstances exist to justify
         the grant of options. No option may be granted more than 10 years
        after the date of adoption of the 2000 ESO Scheme. The Committee
        will, however, review the operation of the 2000 ESO Scheme after
           five years to consider whether it still meets the Compan"s business
needs.                                                  

    Options will be neither transferable (other than to personal
representatives following death) nor pensionable.       

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  Options granted under the 2000 ESO Scheme will normally be
       exercisable only if performance-related criteria imposed by the
Committee are met (see section (viii) below).           

(iii) Exercise price                                                

         The price per share at which ordinary shares may be acquired upon
            the exercise of an option will be determined by the Committee at the
time of grant but will be not less than the higher of:  

          a)    the market value of a share on the date of grant (or, if the
               grantor determines, the average of the market values on the
                 three dealing days immediately preceding the date of grant or
            the market value at such earlier time or times as may be
              determined by the grantor and previously agreed in writing
with the Inland Revenue); and               

           b)    in the case of an option to subscribe for shares, the nominal
value of such shares.                       

(iv)  Exercise of options                                           

   An option will normally only be exercisable after the third
   anniversary of the date of grant and cannot in any event be
           exercised later than the tenth anniversary of the date of grant. In
           addition, an option will not normally be capable of exercise on any
           occasion unless the relevant performance conditions (referred to in
section (viii) below) are met, unless:                  

       a)    any optionholder dies, when his or her option will become
                  immediately exercisable by his or her personal representatives
for a period of 12 months thereafter;       

            b)    any optionholder leaves the Company or any of its subsidiaries
      by reason of injury, disability, or redundancy; or

          c)    if the company or business with which he or she holds office
           or employment is sold outside the Company or any of its
                 subsidiaries when he or she may exercise his or her option by
                the latest of (i) 12 months after the date of termination of
                 employment; (ii) 42 months after the grant date; and (iii) 42
            months after the last tax-relieved exercise by him of an
 Inland Revenue approved company share option.

        If an optionholder leaves employment at retirement he or she may
        also exercise his or her option during this period, but in these
         circumstances only if the relevant performance criteria have been
satisfied.                                              

           If an optionholder leaves the Group for any other reason, he or she
       may only exercise an option with the approval of the Committee.

            Early exercise of options within specified periods is also permitted
          in the event of a take-over or reconstruction or winding up of the
            Company, subject to meeting the relevant performance criteria unless
       the Committee resolves otherwise. In the case of a take-over or
    reconstruction options may be exchanged for options over the
   acquiring compan"s shares, but only with the consent of the
acquiring company.                                      

(v)   Rights attaching to the Shares                                

         All ordinary shares issued upon the exercise of options will rank
       equally in all respects with other ordinary shares for the time
    being in issue (save as regards any rights attaching to such
            ordinary shares by reference to a record date prior to the allotment
           of such shares) and application to the UK Listing Authority will be
         made for any allotted shares to be admitted to the Official List.

(vi)  Variation of share capital                                    

          In the event of any variation in the share capital of the Company,
            the Committee may adjust the total number of ordinary shares subject
         to any option and/or the exercise price under any option with the
prior approval of the Inland Revenue.                   

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(vii) Alteration of the Executive Scheme                            

          The Committee may, at any time alter or add to the 2000 ESO Scheme
       but may not make any alteration or addition to the advantage of
          participants without the prior approval of shareholders in general
  meeting except for minor amendments (i) for the purpose of
            administration of the 2000 ESO Scheme or (ii) to take account of any
           change in legislation or (iii) to obtain or maintain favourable tax
            or regulatory treatment for optionholders, the Company or any of its
      Subsidiaries. No alteration may be made to the disadvantage of
            participants without their majority consent. Any alterations require
the approval of the Inland Revenue.                     

(viii) Performance conditions                                       

   The performance conditions to be imposed on options will be
       determined by the Committee before such options are granted. In
       making such determination the Committee will have regard to the
    guidance issued from time to time by the bodies representing
          institutional shareholders, insofar as they are appropriate to the
         Company, and will seek to identify factors which represent a fair
    measure of performance and genuinely reflect the efforts and
achievements of the Compan"s management.                

            It is proposed that the performance conditions applying to the first
     grant of options under the 2000 ESO Scheme will relate to the
         compound growth in the Compan"s share price. If the compound rate
   increase is at least 20.5 per cent per annum over a minimum
          three-year measurement period an option will become exercisable in
  whole. If it increases by at least 14.5 per cent per annum
         (compounded) 60 per cent of an option will become exercisable. If
 these conditions are not met after the initial three year
       measurement period, they will thereafter be tested quarterly by
        reference to compound annual share price growth over an extended
     period. If the share price does not meet these conditions the
relevant option will lapse.                             

     The Committee will from time to time be able to vary any such
          performance conditions as they apply to outstanding options if, in
            their opinion, to do so would more effectively achieve the object of
affording realistic incentives to optionholders.        

  The Committee have discretion to decide the form* in which
            performance conditions will be set, taking into account particularly
their accounting and taxation consequences.             

*In accordance with the requirements of fixed compensation plan accounting under
US GAAP, any option would be exercisable with no restriction other than that the
optionholder remains employed within the Group for a period of six weeks prior  
to the expiry of the option                                                     

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(ix)  Scheme limits                                                 

(a)   Individual Limits                                 

      An individua"s participation under Part A of the ESO Scheme is
         limited so that the aggregate market value of shares (measured at
           the date of grant) comprised in subsisting approved options held by
           him/her cannot exceed ((pound)30,000. For these purposes, the value
         of the ordinary shares under option will be their market value at
the date of the option grant.                           

      A limit on the value of ordinary shares which may be put under
            option on an annual basis to an individual under the 2000 ESO Scheme
      will be set from time to time by the Committee in the light of
    current market practice and the markets in which the Company
           operates. No option will be granted in excess of this limit without
the prior approval of the Committee.                    

(b)   Overall Limit                                     

           The number of shares issuable pursuant to options granted under the
            2000 ESO Scheme, when aggregated with the number of shares issued or
     issuable pursuant to rights granted under all group employee"
      shareschemes, within the previous period of ten years, may not
           exceed 10 per cent of the Compan"s issued ordinary share capital at
            the date of grant. For the purpose of this limit options which lapse
           will cease to count and any options granted prior to or on the date
          of the Company obtaining its listing with the UK Listing Authority
will not be included.                                   

Part B of the ESO Scheme                                                        

The provisions of Part A of the 2000 ESO Scheme above apply equally to options  
granted under Part B, with the following exceptions:                            

(a)   the provisions of Part A requiring Inland Revenue consent for any actions 
of the Committee will not apply to options granted under Part B;    

(b)   the limit referred to in section (ix) (i) of Part A will not apply to     
options granted under Part B;                                       

(c)   options under Part B of the ESO Scheme may be transferable at the consent 
of the Board; and                                                   

(d)   the maximum number of shares over which incentive stock options within the
   meaning of section 422 of the United States of America Internal Revenue
 Code of 1986 (as amended) may be granted under Part B of the 2000 ESO
Scheme is 25,000,000.                                               

(j)   The Roberts Stock Option Plans                                            

Roberts currently has options outstanding under the Roberts' 1996 Equity        
Incentive Plan which encompasses the Roberts Restricted Stock Option Plan.      
Following the merger between Roberts' and the Company on 23 December 1999 no    
further options have been or will be granted under this plan. Under the Roberts'
Stock Option Plan, options to acquire a total of o Ordinary Shares at prices    
ranging from $o to $o per Share are outstanding at o.                           

In relation to the Roberts Stock Option Plans which continued after the Merger  
with the Company, such plans have been amended and each of the options granted  
under them were assumed by the Company on merger with Roberts. As a result of   
such amendments these options now apply to the number of Ordinary Shares        
(adjusted to the nearest whole share) in the Company equal to the product of (1)
the number of all options such option holder held immediately prior to the      
Roberts merger and (2) the exchange ratio of 3.128. The exercise price for each 
option (adjusted to the nearest pence), was, in most cases, equal to the        

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old exercise price per share of common stock of Roberts divided by such exchange
ratio. The duration and other terms of each option have remained.               

(k)   BioChem's stock option plan                                               

BioChem's Directors, Officers, Employees and Consultants Stock Option Plan      
(the""BioChem Stock Option Plan"") provides for the granting of options to      
purchase a maximum of 19,250,000 common shares of BioChem. Beneficiaries of the 
BioChem Stock Option Plan are the directors, officers and full-time employees or
regular employees of BioChem or its subsidiaries as well as external            
consultants, engaged by BioChem or its subsidiaries to provide ongoing bona fide
management and consulting services.                                             

The board of directors of BioChem, at its discretion, grants options following  
the recommendation of the Compensation Committee of BioChem which administers   
the BioChem Stock Option Plan. The exercise price of the options, which cannot  
be lower than the market price (as defined under the BioChem Stock Option Plan) 
on the day immediately preceding the day on which the options are granted, must 
be paid upon exercise. An option must be exercised within ten years from the    
date of its grant. The board of directors of BioChem determines at the time of  
the grant of options their vesting and exercise conditions.                     

6.    Principal subsidiaries and undertakings                                   

The principal subsidiaries of the Company are as follows:                       

                                                                [Download Table]
                                                                                  
Subsidiary/undertaking   Country of          Registered Office   Field of activity
                         incorporation                                            

Roberts Pharmaceutical   New Jersey          7900 Tanners Gate   Pharmaceutical   
Corporation                                  Drive               Marketing and    
                                             Florence            Development      
                                             Kentucky 41042                       
                                             USA                                  

Shire Pharmaceuticals    England and Wales   East Anton          Pharmaceutical   
Limited                                      Andover Hants       marketing        
                                             SP10 5RG                             
Shire Pharmaceutical     England and Wales   East Anton          Pharmaceutical   
Development Limited                          Andover Hants       development      
                                             SP10 5RG                             
Shire International      Netherlands         Olympic Plaza       Licensing company
Licensing BV                                 Fred.                                
                                             Roeskestraat 123                     
                                             1076 EE Amsterdam/                   
                                             PO Box 75032                         
                                             1070 AA Amsterdam                    
                                             Netherlands                          
Shire Richwood Inc.      Kentucky, USA       7900 Tanners Gate   Pharmaceutical   
                                             Drive,              marketing        
                                             Florence,                            
                                             Kentucky,                            
                                             41042, USA                           

Shire Laboratories Inc.  State of Delaware,  1550 East Gude      Pharmaceutical   
                         USA                 Drive               development      
                                             Rockville                            
                                             MD 20850 USA                         
Shire Supplies, US, LLC  State of Delaware,  Corporation Trust   Manufacturing    
                         USA                 Center              procurement      
                                             Wilmington                           
                                             Delaware 19801                       
                                             USA                                  
Shire France S.A         France              160 rue de Paris    Pharmaceutical   
                                             92100 Boulogne      marketing and    
                                             Bilancourt, France  distribution     
Shire                    Germany             Strasse 126,        Pharmaceutical   
                                             D-50679 Koln        marketing and    
                                             Germany             distribution     

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                                                                [Download Table]
                                                                      
Shire Italia SpA         Italy   Via Lucchese, 80    Pharmaceutical   
                                 Sestro Fiorentino,  marketing and    
                                 Florence            distribution     
                                 Italy                                
Shire PharmaIberia, S.L. Spain   Nunez de Balbao 81  Pharmaceutical   
                                 28006 Madrid        marketing and    
                                 Spain               distribution     

Shire Canada Inc         Canada  o                   Pharmaceutical   
                                                     manufacturing and
                                                     marketing        
Shire Pharmaceutical     US      o                   Pharmaceutical   
Development US Inc                                   development      

All of the Group's subsidiary undertakings are beneficially owned (directly or  
indirectly) as to 100 per cent. and are all consolidated in the results of the  
Group.                                                                          

7.    Premises                                                                  

The principal premises occupied by the Group are as follows:                    

                                                        [Enlarge/Download Table]

Property and Tenure       Description       Date of Lease    Length of Lease     Annual Rent     
                                                                                                 
Hampshire International   Office                   N/A               N/A                      N/A
Business Park, Chineham,  accommodation                                                          
Basingstoke, Hampshire    35,029 sq ft                                                           
RG24 8EP Freehold         7 acre site                                                            
                          Planning consent                                                       
                          for a further                                                          
                          70,000 sq ft of                                                        
                          office                                                                 
                          accommodation                                                          

East Anton Court,         Office            5 December 1997  10 years from         (pound)138,382
Icknield Way,             accommodation                      24 June 1997                        
Andover, Hampshire        17,460 sq. ft                                                          
SP10 5RG-- leasehold                                                                             

1550 East Gude Drive,     Offices and       1 May 1995       5 years from                $637,336
Rockville MD 20850        laboratories                       1 May 1995                          
USA-- leasehold           44,500 sq. ft                                                          

7900 Tanners Gate Drive,  Office            1 April 1999     4 years from                $146,403
Florence, Kentucky        accommodation                      1 April 1999                        
41042, USA                11,000 sq. ft                                                          

1901 Research Blvd        16,379sq.ft       1 July 2000      8 1/2 years from 1          $425,854
Rockville                                                    July 2000                           

7900 Tanners Gate Drive,  Office            1 March 1999     34 months from              $29,089 
Florence, Kentucky        Accommodation                      1 March 1999                        
41042, USA                4,490 sq. ft                                                           

7900 Tanners Gate Drive,  Office            1 January 1999   3 years from                $21,931 
Florence, Kentucky        Accommodation                      1 January 1999                      
41042, USA                3,130 sq. ft                                                           

7900 Tanners Gate Drive,  Warehouse space   1 January 1999   20 months from              $36,760 
Florence, Kentucky        5,890 sq. ft                       1 May 1999                          
41042, USA                                                                                       

7900 Tanners Gate Drive,  Warehouse space   1 April 1999     54 months from              $24,511 
Florence, Kentucky        3,930 sq. ft                       1 April 1999                        
41042, USA                                                                                       

                                                                             150

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                                                                [Download Table]
                                                                                
7900 Tanners Gate Drive,  Warehouse space  1 April 1999  33 months from  $21,091
Florence, Kentucky        3,380 sq. ft                   1 April 1999           
41042, USA                                                                      

7900 Tanners Gate Drive,  Warehouse space  1 April 1999  5 years from    $15,000
Florence, Kentucky        3,000 sq. ft                   1 April 1999           
41042, USA                                                                      

8.    Memorandum and Articles of Association                                    

(a)   The objects clause of the Memorandum of Association of the Company        
      provides that its principal objects include the carrying on of business as
manufacturers, builders and suppliers of and dealers in goods of all
 kinds, as chemical engineers and as an investment holding company and
    applying for or acquiring patent rights and licences and expending money
 in experimenting and testing and making researches, and improving, or
   seeking to improve, any patents, inventions or rights which the Company
may acquire.                                                        

   The objects of the Company are set out in full in paragraph 4(A) of the
      Memorandum of Association which is available for inspection at the address
specified in paragraph 17 below.                                    

(b)   The Articles of Association of the Company (the "Articles") adopted       
  pursuant to a special resolution of the Company passed on 7 July, 2000
contain provisions, inter alia, to the following effect:            

(i)   Voting rights                                                 

          Subject to any special terms as to voting on which shares may have
         been issued or may for the time being be held (of which there are
          none at present), or any suspension or abrogation of voting rights
    pursuant to the Articles (including in circumstances where a
        statutory notice requiring disclosure of beneficial ownership of
      shares has not been complied with), at a general meeting every
         member present in person shall, on a show of hands, have one vote
        and every member present in person or by proxy shall, on a poll,
         have one vote for every Ordinary Share of which he is the holder.

(ii)  Dividends                                                     

     Subject to the provisions of the Act and of the Articles, the
           Company may by ordinary resolution declare a dividend to be paid to
          the members according to their respective rights and interest, but
         no dividend shall exceed the amount recommended by the Board. The
       Board may declare and pay such interim dividends (including any
            dividend payable at a fixed rate) as appear to it to be justified by
the profits of the Company available for distribution.  

          Except as otherwise provided by the rights attached to shares, all
          dividends shall be declared and paid according to the amounts paid
         up on the shares in respect of which the dividend is declared and
            paid, but no amount paid up on a share in advance of a call shall be
       treated as paid up on the share for this purpose. All dividends
            shall be apportioned and paid proportionately to the amounts paid up
     on the shares during any portion or portions of the period in
            respect of which the dividend is paid. All dividends unclaimed for a
        period of 12 years after having been declared or due for payment
    shall be forfeited and cease to remain owing by the Company.

           Without prejudice to the provisions of the Articles, the Board may,
          with the prior authority of an ordinary resolution of the Company,
         direct that payment of any dividend may be satisfied wholly or in
          part by the distribution of specific assets and, in particular, of
            paid up shares or debentures of another company. The Board may, with
           the prior authority of an ordinary resolution of the Company, offer
     holders of a particular class of shares the right to elect to
          receive further shares of that class or ordinary shares, in either
         case credited as fully paid, instead of cash in respect of all or
part of a dividend.                                     

(iii) Distribution of assets on winding up                          

        On a voluntary winding up of the Company, the liquidator may, on
         obtaining any sanction required by law, divide amongst members in
           kind the whole or any part of the assets of the Company, whether or
not the assets consist of property of one kind or of    

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           different kinds. For such purpose, the liquidator may set the value
            he deems fair on any class or classes of property, and may determine
      on the basis of that valuation and in accordance with the then
            existing rights of the members how the division is to be carried out
      between members or classes of members. The liquidator may not,
          however, distribute to a member, without his consent, any asset to
          which there is attached a liability or potential liability for the
owner.                                                  

(iv)  Transfer and issues of shares                                 

           Each member may transfer all or any of his uncertificated shares by
           means of a relevant system subject to the Uncertificated Securities
         Regulations 1999 (as amended) and each member may transfer any or
       all of his certificated shares by instrument of transfer in any
     usual form or in any other form approved by the Board and the
          instrument shall be executed by or on behalf of the transferor and
            (in the case of a transfer of a share which is not fully paid) by or
on behalf of the transferee.                            

         Subject to the provisions of the Articles and the requirements of
           the London Stock Exchange the Board may, in its absolute discretion
           and without giving any reason, refuse to register any transfer of a
      certificated share or renunciation to a renounceable letter of
       allotment unless all of the following conditions are satisfied:

(a)   it is in respect of a share which is fully paid;  

           (b)   it is in respect of a share on which the Company has no lien;

(c)   it is in respect of only one class of shares;     

        (d)   it is in favour of a single transferee or renouncee or not
   more than four joint transferees or renouncees;

(e)   it is duly stamped (if required); and             

          (f)   it is delivered for registration to the registered office of
            the Company or such other place as the Board may decide,
             accompanied by the certificate for the shares to which it
               relates (except in the case of the transfer by a recognised
                  person where a certificate has not been issued, or in the case
               of a renunciation) and such other evidence as the Board may
              reasonably require to prove the title of the transferor or
                  person renouncing and the due execution by him of the transfer
          or renunciation or, if the transfer or renunciation is
                 executed by some other person on his behalf, the authority of
that person to do so.                       

    Unless the Board determines otherwise, or the transfer is an
          excepted transfer in accordance with the Articles, the transfer of
            shares held by a member who has not complied, in accordance with the
        Articles, with a statutory notice requiring disclosure as to the
  beneficial ownership of such shares may not be registered.

          The Articles do not contain any pre-emption rights relating to the
           transfers of shares. The provisions of section 89 of the Act, which
      confer on shareholders rights of pre-emption in respect of the
          allotment of equity securities which are, or are to be, paid up in
       cash, apply to the authorised but unissued share capital of the
          Company, save to the extent presently disapplied as referred to in
section 4 sub-paragraph (b)(ii) above.                  

(v)   Variation of rights                                           

           (a)   Subject to the provisions of the Act the rights attached to a
                class of shares may be varied, whether or not the Company is
           being wound up, (1) in such a manner (if any) as may be
                  provided by those rights, or (2), in the absence of provision,
                 either with the consent in writing of the holders of at least
               three fourths of the nominal amount of the issued shares of
                  that class or with the sanction of an extraordinary resolution
             passed at a separate meeting of the holders of the issued
            shares of that class validly held in accordance with the
Articles, but not otherwise.                

            The rights attached to a class of shares are not, unless
                 otherwise expressly provided in the rights attaching to those
           shares, deemed to be varied by the creation or issue of
                further shares ranking pari passu with or subsequent to them
              or by the purchase or redemption by the Company of its own
       shares in accordance with the Act and the Articles.

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(vi)  Share capital and changes in capital                          

         (a)   The Company may, by ordinary resolution, increase its share
           capital; consolidate and divide all or any of its share
                 capital into shares of a larger amount; sub-divide all or any
             of its shares (subject to the provisions of the Act) into
               shares of a smaller amount and as part of such sub-division
              determine that the shares resulting from such sub-division
                 have amongst themselves a preference or other advantage or be
                 subject to a restriction; and cancel any shares which, at the
                 date of the passing of the resolution, have not been taken or
               agreed to be taken by any person and diminish the amount of
               its share capital by the amount of the shares so cancelled.

            (b)   Subject to the provision of the Act and the rights attached to
            existing shares, the Company may, by special resolution,
                  reduce its share capital, capital redemption reserve and share
premium account in any way.                 

           (c)   Subject to the provision of the Act, the Company may purchase
                any of its shares of any class (including redeemable shares)
in its own capital in any way.              

9.    Directors' and other interests                                            

(a)   As at o 2001 (being the latest practicable date prior to the publication  
of this document), the interests of the Directors, their immediate  
families and (so far as is known to them or could with reasonable   
    diligence be ascertained by the Directors) persons connected (within the
     meaning of section 346 of the Act) with the Directors in the issued share
capital of the Company (all of which are beneficial unless otherwise
    stated), including (i) those notified to the Company pursuant to section
   324 or section 328 of the Act, (ii) those required to be entered in the
register maintained under section 325 of the Act and (iii) those of 
    connected persons of the Directors which would, if the connected persons
      were Directors, be required to be disclosed under (i) or (ii) above, were,
   and at the Effective Date (assuming no dealings by the Directors, their
    immediate families and any persons connected with them during the period
up to such date) the interests of such persons will be, as follows: 

                                                        [Enlarge/Download Table]

                            Prior to Merger                 Following Merger          
                            ---------------                 ----------------          
                          Number of        Number of        Number of        Number of
                    Ordinary Shares         Ordinary  Ordinary Shares         Ordinary
Name                                    Shares under                      Shares under
                                              Option                            Option
                                                                                      
Dr JH Cavanaugh(1)     8,806,368              --                                      
R Stahel                13,827             1,063,061                                  
AC Russell                --                56,422                                    
Dr JW Totten              --                255,237                                   
Dr BJ Price             31,350                --                                      
Dr B Canavan             3,000                --                                      
Dr ZP Horovitz           3,128              121,210                                   
RM Nordmann             46,968                --                                      
JE Smith                125,120               --                                      
JT Spitznagel           57,624                --                                      
Dr F Bellini              --                  --                                      
The Hon JA Grant          --                  --                                      
G Veilleux                --                  --                                      

  Dr Cavanaugh is the President of HealthCare Ventures LLC, which is the
management company for a number of limited partnerships which have interests in 
8,690,090 Ordinary Shares. Dr Cavanaugh is also a general partner in these      
partnerships which acquired their Ordinary Shares following the acquisition of  
Pharmavene, Inc. 8,690,090 of the Ordinary Shares in which Dr Cavanaugh is      
expressed to be interested represent shares held by those partnerships and not  
by Dr Cavanaugh personally. The remaining 116,278 Ordinary Shares are held by Dr
Cavanaugh as beneficial owner.                                                  

The above figures for Ordinary Shares under option do not take into 
account conditional awards                                          

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    made under the Long Term Incentive Plan but do take into account options
      granted to the Directors under the share option schemes adopted by SHL. On
   exercise of options under the share option schemes relating to SHL, the
  Directors who hold such options will automatically receive 20 Ordinary
Shares for each share in SHL to which the Directors were originally 
      entitled under such option. The Directors' interests in Ordinary Shares in
respect of their options over shares in SHL are as follows:         

                                                                       Number of
               Shares in SHL                     Subscription    Ordinary Shares
    Name        under option    price per SHL share ((pound))       to be issued
 R Stahel      27,000                     20                       540,000

(b)   As at o 2001 (being the latest practicable date prior to the publication  
      of this document) the interests of the Directors, their immediate families
 and (so far as is known to them or could with reasonable diligence be
     ascertained by them) persons connected (within the meaning of section 346
of the Act) with them in conditional awards made under the Long Term
Incentive Plan were as follows:                                     

      Name                   Value of         Number of   Earliest date on which
                                award   Ordinary Shares     Award may be awarded

      R Stahel         (pound) 150,000            32,230            8 April 2003
      Dr J W Totten     (pound) 71,000            15,255            8 April 2003
      R Stahel         (pound) 360,050            35,785        28 February 2004
      A C Russell       (pound) 18,000             1,789        28 February 2004
      Dr J W Totten    (pound) 200,003            19,881        28 February 2004

(c)   Save as disclosed above, none of the Directors (nor any person connected  
   with any Director within the meaning of section 346 of the Act) has any
interest in the share capital of the Company.                       

(d)   Mr Spitznagel entered into a consultancy agreement with the Company in    
December 1999, which provided that;                                 

 (i)   if he has good reason, as defined in his service agreement with
            Roberts Pharmaceutical Corporation, to terminate his employment with
            Roberts Pharmaceutical Corporation under his service agreement, then
            the Company will cause Roberts Pharmaceutical Corporation to provide
         him with the payments and benefits he is entitled to upon a `good
reason' termination;                                    

    (ii)  Mr Spitznagel would provide consulting services to the Company for
at least 42 months following the acquisition of Roberts 
       Pharmaceutical Corporation, unless Mr Spitznagel terminates the
           consultancy agreement prior to the end of the 42 month upon 30 days
notice; and                                             

     (iii) The Company would pay Mr Spitznagel at a rate of (pound)248,000 per
        annum for his consulting services, (pound)93,000 per annum as an
      office holder, (pound)155,000 per annum to comply with certain
           restrictive covenants contained therein and (pound)93,000 per annum
         for tax, financial and estate planning advice, life insurance and
health insurance.                                       

(e)   Save as disclosed in sub-paragraph (d) above, no Director (or proposed    
     director) has, or has had, an interest in any transaction which is or was
     unusual in its nature or conditions or significant to the business of the
    Group effected in the current or immediately preceding financial year or
during an earlier financial year and which remains in any respect   
outstanding or unperformed.                                         

(f)   There are no outstanding loans granted by any member of the Group to any  
  of the Directors nor any guarantees provided by any such companies for
their benefit.                                                      

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(g)   (i)   On 8 February 1996, the Company entered into a service agreement    
           with Rolf Stahel, Chief Executive. This Agreement was amended by an
           agreement between the Company and Mr. Stahel dated 21 October 1996.
     The contract will continue (subject to earlier termination as
        provided therein) until terminated by either party giving to the
      other 12 months' notice in writing. Mr Stahel currently has an
         annual salary of (pound)440,000. Mr Stahel is entitled to receive
       such an annual bonus (if any and subject to a maximum of 40 per
       cent. of his basic salary) as the Remuneration Committee of the
        Company shall determine. The Company is obliged to contribute an
           amount equal to 10 per cent. of Mr. Stahel's salary to such pension
scheme as he may specify.                               

  (ii)  On 29 October 1999, the Company entered into a service agreement
     with Angus Russell, Group Finance Director. The contract will
           continue (subject to earlier termination as provided therein) until
           terminated by either party giving to the other 12 months' notice in
      writing. Mr Russell has an annual salary of (pound)225,000. Mr
       Russell is entitled to receive such an annual bonus (if any and
          subject to a maximum of 40 per cent. of Mr Russell's basic salary)
         as the Remuneration Committee of the Company shall determine. The
           Company is obliged to contribute an amount equal to 10 per cent. of
     Mr Russell's salary to such pension scheme as he may specify.
            Subject to Mr Russell remaining in the employment of the Company, he
         will be paid a bonus of (pound)36,000 for the first six months of
            his employment of the Company, which will be paid in March 2001. Any
           additional payments for the year 2000 do not include any amount for
the first six months of Mr Russell's employment.        

   (iii) On 30 December 1998, the Company entered into a service agreement
        with Dr J W Totten, Group Research and Development Director. The
          contract will continue (subject to earlier termination as provided
        therein) until terminated by either party giving to the other 12
           months' notice in writing. Dr Totten currently has an annual salary
           of (pound)260,000. Dr Totten is entitled to receive a bonus (if any
      and subject to a maximum of 40 per cent. of his salary) as the
          Remuneration Committee of the Company shall determine. The Company
       is obliged to contribute an amount equal to 10 per cent. of his
salary to such pension scheme as he may specify.        

(iv)  Each of the non-executive Directors has received, and each    
            non-executive Proposed Director of the Company will receive a letter
           of appointment from the Company providing for that individual to be
           paid an annual fee of (pound)20,000 per annum, payable quarterly in
        arrears. The agreement pursuant to this letter of appointment is
            terminable by either party giving to the other three months' notice.

    (v)   The Company also provides each of these executives, his spouse and
            children under the age of 18 years with membership of an appropriate
         private patients medical plan and also provides each of them with
            life assurance cover, membership of any permanent health care scheme
           and prolonged disability scheme operated by the Group and Directors
           and Officers insurance cover, as well as a company car. The Company
           is entitled to terminate each executive's employment with immediate
           effect by paying him salary in lieu of notice and a sum (calculated
          by multiplying the Relevant Amount by the number of months' notice
           which he is entitled to receive at the date of such termination) in
      compensation for his immediate loss of his other benefits. The
         "Relevant Amount" is the aggregate of all bonuses due to him over
        the full period of his employment divided by twice the number of
     complete months' service and the total cost to the Company of
           providing to him (and where appropriate members of his family) with
        the other benefits detailed above during the period of 12 months
immediately preceding such termination divided by 12.   

      (vi)  Save as disclosed in this sub-paragraph (g), no service contract has
    been entered into or varied between any Director or Proposed
Director and Shire or any member of the Enlarged Group. 

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(h)   In the year ended 31 December 2000, the total aggregate remuneration,     
  including benefits in kind and pension contributions, of the Directors
      from Shire was (pound)o. Save as disclosed in sub-paragraphs (d) and (g),]
  the total emoluments receivable by the Directors will not be varied in
      consequence of the Merger and there are no arrangements under which any of
the Directors has agreed to waive any further emoluments.           

(i)   As at o 2001 (being the latest practicable date prior to the publication  
      of this document) the Company had been notified pursuant to the Act of the
   following interests (within the meaning of Part VI of the Act) in three
per cent. or more of the issued share capital of the Company:       

                                                                [Download Table]

                                                                     Percentage of 
                                                          Number of   issued share 
             Shareholder              Notes         Ordinary Shares        capital 
                                                                                   
The Capital Group Companies, Inc.              (i)       10,762,647           4.21 

HealthCare Ventures LLC                       (ii)        8,690,090              o 

Putnam Investment Management, LLC &                      17,732,370                
The Putnam Advisory Company, Inc.                                             7.05%

Singapore Investment Corporation Pte         (iii)        7,914,123           3.05 
Limited                                                                            

(i)   The Capital Group Companies Inc. interest includes 1,779,600  
            Ordinary Shares registered to Capital International Limited, 263,713
       Ordinary Shares registered to Capital International S.A., 3,700
     Ordinary Shares registered to Capital International, Inc. and
       8,715,634 registered to Capital Research and Management Company
      (ii)  HealthCare Ventures LLC interests includes 5,508,032 Ordinary Shares
        registered to HealthCare Ventures III, 1,617,528 Ordinary Shares
          registered to HealthCare Ventures IV and 1,564,530 Ordinary Shares
registered to HealthCare Ventures V.                    
    (iii) The Singapore Investment Corporation Pte Limited interest includes
           418,140 Ordinary Shares registered to the Board of Commissioners of
        Currency, Singapore, 5,569,966 Ordinary Shares registered to the
           Government of Singapore and 1,926,017 Ordinary Shares registered to
the Monetary Authority of Singapore.                    
      (iv)  In addition to the above, the Company has been notified that as at 3
       January 2001 Guaranty Nominees Limited held 75,449,440 ordinary
            shares which underlie ADRs (representing 29.35per cent. of the total
          share capital of the Company) in its capacity as the depositary of
      the Company's ADRs. Each ADR equates to three of the Company's
ordinary shares of 5p each.                             

On Completion of the Merger, assuming an exchange ratio of o and no 
      exercise of options or rights under the BioChem Stock Option Plans and the
   Employee Share Schemes, the following are expected to have interests in
     three per cent. or more of the issued share capital of the Company (based
     on the interests in the Company shown above and assuming no other changes
in their interests before Completion of the Merger):                

                                               Number of           Percentage of
                                         Ordinary Shares            issued share
       Shareholder                                                       capital
       o                                               o                       o

(j)   Save as disclosed above, the Company is not aware of any person who,      
immediately following the Merger, will be directly or indirectly    
    interested in three per cent. or more of the issued share capital of the
   Company or will or could, directly or indirectly, jointly or severally,
exercise control over the Company.                                  

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10.   Material contracts                                                        

     The following contracts (not being contracts entered into in the ordinary
     course of business) have either been entered into by members of the Group
within a period of two years immediately preceding the date of this 
      document and are or may be material, or contain provisions under which any
member of the Group has a material obligation or entitlement:       

(i)   the Merger Agreement;                                         

(ii)  the Stock Option Agreement;                                   

    (iii) a merger agreement among the Company, Roberts and Ruby Acquisition
         Sub Inc., a New Jersey corporation and wholly owned subsidiary of
            the Company, made as of 26 July 1999, pursuant to which each Roberts
         share issued and outstanding at the effective date (as defined in
     the merger agreement) was converted into the right to receive
         ordinary shares in the Company. Each Roberts shareholder received
            ordinary shares in the Company in accordance with a ratio determined
     by the average last reported sale price of ADSs on the NASDAQ
         National Market for the 15 consecutive trading days ending on the
            third trading day immediately preceding completion (the "Shire Share
         Value"). Roberts shareholders could elect to take either Ordinary
          Shares or ADSs. The company assumed all Roberts stock option plans
          so that option holders under any of the Roberts stock option plans
    had their options converted by the same ratio as the Roberts
  shareholders above. Each of Shire and Roberts gave certain
warranties;                                             

   (iv)  [an amended and restated escrow agreement among the company, Star
Bank N.A. (the "Escrow Agent") and James Currie, as the 
            shareholders' representative on behalf of the Shareholders listed in
         that agreement, made as of 25 June 1999 ("the Escrow Agreement"),
            pursuant to which the Escrow Agent agreed to hold 1,662,566 Ordinary
       Shares in escrow to be released in certain circumstances to the
       Company where it, SRI or any of their affiliates listed in that
    agreement need to expend moneys in respect of external costs
      (including the reasonable fees and expenses of counsel and any
            experts, court costs, judgements and settlements) for which SRI, has
           not been reimbursed by any other source and where those monies have
      been paid by SRI prior to 12 March 2002 and have been incurred
           wholly and necessarily (a) in the defence of SRI against any of the
       lawsuits relating to phentermine litigation referred to in that
       agreement (the "Claims") or (b) settlement of any Claim or as a
       result of judicial resolution of any Claim, but excluding costs
         internal to SRI for employees or personal or overheads incidental
         thereto. On 31 August, 2000, Shire entered into an agreement (the
    "Termination Agreement") with the former shareholders of SRI
     terminating the Escrow Agreement, pursuant to which 1,622,566
         Ordinary Shares placed into escrow at the time of the purchase of
          SRI by Shire were released and the Escrow Agreement and the escrow
            fund were terminated . Under the terms of the Termination Agreement,
           406,064 of the shares held in the escrow fund were sold and the net
        proceeds were distributed to Shire. Shire received approximately
           US$7 million from the sale of these shares. The remaining 1,216,502
shares were distributed to the former SRI shareholders];

   (v)   a sale and purchase agreement among Shire Holdings Europe Limited
         (the "Purchaser"), Fuisz International Limited (the "Seller") and
       Fuisz Technologies Ltd. ("Fuisz Technologies") dated 22 October
         1999, pursuant to which the Purchaser acquired Laboratories Murat
         SA, Fuisz Pharma Beteiligungs GmbH and Fuisz Technologies Holding
           GmbH and agreed to acquire Isotria Farmaceutici SpA from the Seller
            and Fuisz Technologies assigned its rights in the trademarks Cebutid
            and Cebutin to the Purchaser in consideration for the payment by the
      Buyer of $36.2 million and an obligation to pay a further $3.3
            million in deferred consideration to Knoll AG (in three stages on or
    before 24 November 2001) in respect of the assignment of the
    trademarks Cebutid and Cebutin. Each of the Seller and Fuisz
        Technologies gave certain representations and warranties and the
Seller gave certain restrictive covenants; and          

     (vi)  an agreement between, inter alia, Shire, Roberts and Shire's United
           States subsidiaries as borrowers and DLJ Capital Funding, Inc dated
           19 November 1999 providing a $250 million credit facility including
           a $125 million five-year revolving credit facility (including a $25

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            million letter of credit facility) and a $125 million five-year term
     loan facility. The applicable interest rate on the new credit
          facility will range between 0.5 per cent and 1.5 per cent over the
           higher of the prime rate of DLJ Capital Funding, Inc or the Federal
        Funds Rate plus 0.5 per cent or between 1.5 per cent and 2.5 per
     cent over the London Interbank Overnight rate (as adjusted in
         accordance with the agreement), in each case depending on Shire's
            credit rating. All obligations under the new credit facility will be
jointly and severally guaranteed by Shire and by Shire's
     subsidiaries (other than the borrowers) and will initially be
            secured by all material property owned by Shire and its subsidiaries
        and the capital stock of Shire's subsidiaries. If Shire's credit
            rating reaches specified levels, the new credit facility will not be
          secured. The new credit facility will contain customary covenants.
       The terms of the credit agreement will also contain maintenance
         tests which will require Shire to maintain a minimum net worth, a
specified leverage ratio and a specified coverage ratio.

  (b)   The following contracts (not being contracts entered into in the
     ordinary course of business) have either been entered into by
           BioChem within a period of two years immediately preceding the date
          of this document and are or may be material, or contain provisions
     under which BioChem has a material obligation or entitlement:

     (i)   By an agreement dated 31 January 1990 and amended as of 20 November
            1995, BioChem licenced to GlaxoSmithKline the worldwide rights, with
     the exception of Canada, to develop, manufacture and sell the
        nucleoside analog lamivudine marketed as 3TC and Zeffix (3TC and
            Zeffix are referred to herein as "lamivudine"). A partnership exists
            between GlaxoSmithKline's Canadian subsidiary, GlaxoSmithKline Inc.,
    and BioChem to supply, market and sell lamivudine in Canada.
  GlaxoSmithKline has agreed to manufacture all the required
lamivudine to be supplied in Canada by the partnership. 

      In consideration for the grant of such rights, GlaxoSmithKline
         agreed to undertake and fund the development of lamivudine and to
         pay BioChem a royalty on sales of lamivudine. In addition, it was
  agreed that milestone payments would be made to BioChem in
        instalments as GlaxoSmithKline progressed in the development and
         approval process. The amount of relevant patent prosecution costs
     and 50 per cent of milestone payments are deductible from any
      royalties payable to BioChem by GlaxoSmithKline. The milestone
    payments and its related deductions from royalties have been
      completed. The amount of certain contractual costs and certain
          litigation costs may be deducted from royalties payable to BioChem
     by GlaxoSmithKline. If GlaxoSmithKline terminates the licence
agreements upon certain events of default by BioChem,   
         GlaxoSmithKline will retain a non-exclusive, paid-up licence from
      BioChem to make, have made, use and sell lamivudine worldwide.

  (ii)  On 31 August 1992, AstraZeneca plc ("Astra") and BioChem entered
          into a series of agreements (the "Astra Agreements") providing for
        the research development and commercialisation of a new class of
          analgesic compounds for the control of pain. Pursuant to the Astra
      Agreements, BioChem transferred and assigned its rights to the
        relevant proprietary technology to Astra and retained a right to
     re-acquire the Canadian rights in exchange for the payment of
           royalties to Astra. In addition, a collaborative research agreement
       and a supply agreement provide for Astra and BioChem to jointly
           research the field of opioid peptides. Astra will retain commercial
          rights worldwide except for Canada. In consideration for the grant
         of such rights to Astra, Astra made an upfront payment, agreed to
            fund research and development, to make milestone payments to BioChem
           and to pay BioChem a royalty on future product sales. Astra may, in
     its sole discretion, terminate the Astra Agreements. If Astra
      discontinues development of products or chooses not to develop
   products under the Astra agreements or terminates the Astra
         agreements, then BioChem has the option to reacquire the relevant
      technology and intellectual property rights subject to certain
royalty obligations to Astra.                           

On 3 December 1998, BioChem concluded an alliance with  
        GlaxoSmithKline for the worldwide development, manufacturing and
         marketing of BioChem's cell-culture influenza vaccines. Under the
          terms of the agreement, after a period of joint development funded
        by both parties, BioChem and GlaxoSmithKline will collaborate to
         market the products in the United States, while in Europe and the
          rest of the world, GlaxoSmithKline will be exclusively responsible
           for marketing. In addition, GlaxoSmithKline will be responsible for
manufacturing for markets                               

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         throughout the world except Canada. BioChem will benefit from the
      sales of the vaccines in the United States and the rest of the
    world, excluding Canada, in accordance with a pre-determined
           formula. In Canada, BioChem will retain all exclusive rights to the
        vaccines, including production and marketing. The agreement also
         calls for BioChem to receive up-front and milestone payments from
GlaxoSmithKline.                                        

11.   Working capital                                                           

The Directors are of the opinion that, having regard to the Enlarged Group's    
existing resources, the Enlarged Group has sufficient working capital for its   
present requirements, that is for at least the next 12 months from the date of  
this document.                                                                  

12.   Indebtedness                                                              

At the close of business on o 2001 (being the latest practicable date prior to  
the publication of this document) the Enlarged Group had outstanding the        
following indebtedness:                                                         

                                                                [Download Table]

                                                   Shire     BioChem       Total
                                              (pound)000  (pound)000  (pound)000
                                                                                
[Convertible notes]                                                             
[DLJ Credit Agreement]                                                          
[Finance lease and hire purchase agreements]                                    
[Notes payable (secured)]                             --          --          --
                                              ==========  ==========  ==========
Total indebtedness                                 o           o           o    
                                              ----------  ----------  ----------

Save as disclosed above, Shire and BioChem do not have any loan capital         
outstanding, or created but unissued, or term loans or any outstanding          
mortgages, charges, debentures or other borrowings, or indebtedness in the      
nature of borrowing, including bank overdrafts, liabilities under acceptances or
acceptance credits, hire purchase commitments, obligations under finance leases,
guarantees or other contingent liabilities.                                     

At the close of business on o 2001, the Enlarged Group had the following        
balances:                                                                       

                                                        [Enlarge/Download Table]

                                                        Shire     BioChem       Total
                                                   (pound)000  (pound)000  (pound)000
                                                                                     
Cash, cash equivalents and short term investments           o           o           o
                                                       ------      ------      ------

13.   Litigation                                                                

(a)   SRI has been named as a defendant in approximately 3,729 lawsuits, in both
    US federal and state courts, which seek damages for, among other things,
personal injury arising from phentermine products supplied for the  
   treatment of obesity by SRI and several other pharmaceutical companies.
  SRI has been sued as a manufacturer and distributor of phentermine, an
anorectic used in the short-term treatment of obesity and one of the
      products addressed by the lawsuits. The suits relate to phentermine either
     alone or together with fenfluramine or dexfenfluramine. As at [10 January
     2001] SRI has been dismissed from 2,178 cases and has not yet been served
     in 37 additional cases. As at [10 January 2001] approximately 1,120 cases
are pending dismissal. SRI's products Oby-Cap or Oby-Trim have been 
 positively identified (or have been specifically alleged to have been
   ingested) in 136 cases of which 91 of these cases are still active. The
lawsuits generally allege the following claims:                     

o     the defendants marketed phentermine and other products for the
        treatment of obesity and misled users about the products and the
dangers associated with them;                           

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   o     the defendants failed adequately to test phentermine individually
and when taken in combination with the other drugs; and 

     o     the defendants knew or should have known about the negative effects
         of the drugs and should have informed the public about such risks
and/or failed to provide appropriate warning labels.    

 (i)   SRI became involved with phentermine through its acquisition of
          certain assets of Rexar Pharmacal Corp. ("Rexar") in January 1994.
     In addition to liability as a result of its own production of
            Oby-Cap, plaintiffs may seek to impose liability on SRI as successor
        to Rexar. Class certification has been sought for certain of the
         claims made against SRI. In addition, pending US federal lawsuits
           have been consolidated as a multidistrict litigation in the Eastern
          District of Pennsylvania. SRI intends vigorously to defend all the
    lawsuits and pursue all available reasonable defences. Legal
           expenses have been paid by Eon Labs Manufacturing Inc. ("Eon"), the
         supplier to SRI or EON's insurance carriers but such insurance is
         now exhausted. Eon has agreed to defend and indemnify SRI in this
       litigation pursuant to an agreement dated 30 November 2000 made
between Eon and SRI.                                    

   (ii)  On 22 September, 2000, a lawsuit was filed against the Company in
          the United States District Court for the District of North Dakota.
           The suit involves an incident in 1999 in which a young North Dakota
        man, Ryan Ehlis, shot and killed his infant daughter and wounded
           himself, allegedly as a result of a psychotic reaction to Adderall.
         Mr. Ehlis' physician had prescribed Adderall for the treatment of
           ADHD. The Company filed its answer to the complaint on 24 November,
2000 and discovery schedules are being developed.       

The Company is aware of two further potential cases:                

            Ms Sharon Curry stabbed her 8 year old daughter to death. No lawsuit
           has been filed as yet nor has the Company or Adderall been referred
       to in media reports specificallyrelated to this incident. It is
    reported that Ms Curry had a history of methamphetamine use.

       The Company has received notice of a car accident where a young
   child was killed. It has been alleged that the accident was
         attributable to Ms Dawn Branson having a psychotic episode due to
    the ingestion of Adderall. No lawsuit has been filed as yet.

(b)   Save as disclosed in paragraph (a) above, Shire is not engaged in any     
    legal or arbitration proceedings and no legal or arbitration proceedings
    are pending or threatened by or against Shire which may have or have had
     during the 12 months prior to the date hereof a significant effect on the
financial position of Shire.                                        

(c)   Emory University filed oppositions to two of BioChem's granted patent     
applications in Europe which cover oxathiolane nucleosides including
  lamivudine and dioxolane nucleosides, including troxacitabine, related
      nucleoside analogs and use of these analogs for treating viral infections.
      In oral hearings held in 1999, both of these oppositions were dismissed by
   the Opposition Division of the European Patent Office. Emory University
has filed an appeal against the dioxolane related decision of the   
   Opposition Division. Emory University is not pursuing its appeal of the
     decision relating to oxathiolanes. Emory University has not to date filed
revocation actions with respect to any BioChem patents that issue in
individual European countries.                                      

      In Japan, Emory University filed an opposition to BioChem's granted patent
which covers lamivudine, related analogs and use of the analogs for 
    treating viral infections. The Trial Board of the Japanese Patent Office
dismissed Emory University's opposition to BioChem's patent covering
  lamivudine. Emory University has not to date filed a revocation action
 against this patent. Emory University has filed revocation actions in
Australia and South Korea against BioChem's granted patents covering
lamivudine. BioChem is aggressively defending these patents.        

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    On 23 July 1996, Emory University filed a complaint in the United States
     alleging infringement from the commercialisation of Epivir by BioChem and
GlaxoSmithKline, BioChem's exclusive licencee in the US, of an Emory
     University US patent granted that same day. BioChem considers this patent
     infringement suit to be without merit and has successfully challenged the
validity of Emory University's patent.                              

On 19 May 1998, the United States Patent and Trademark Office (the  
      "USPTO") declared an interference between the Emory University patent that
    is the subject of a lawsuit and a pending patent application of BioChem.
  The USPTO accorded BioChem the earlier priority date and then accorded
   BioChem senior party status in the interference. BioChem has vigorously
    challenged the Emory University patent in the interference, through to a
final hearing on 10 November 1999. The Board of Patent Appeals and  
    Interferences issued a decision on 21 December 2000 invalidating Emory's
   patent. There can be no assurance that Emory University will not appeal
the decision and that Emory's patent will not be reinstated.        

Emory University has obtained a granted patent application in Europe
  relating to oxathiolane nucleosides, including lamivudine. BioChem and
GlaxoSmithKline filed an opposition to this grant and are vigorously
opposing the grant.                                                 

An examined patent application, filed by Emory University claiming  
lamivudine, was successfully opposed by BioChem in Australia. Emory 
     University has filed an appeal from that decision in the Federal Court of
Australia. BioChem also filed an appeal from certain portions of the
decision. An examined patent application filed by Emory University  
    claiming lamivudine was also opposed by BioChem in Japan. The opposition
was dismissed in April 1999 because it was improperly filed by a    
    representative who had previously represented Emory. Notwithstanding the
dismissal, the Japanese Patent Office issued an ex-officio action   
      rejecting all of Emory University's claims. An examined patent application
   filed by Emory claiming lamivudine has also been opposed by BioChem and
      GlaxoSmithKline in South Korea. BioChem is aware that Emory University has
    filed patent applications in other countries, which BioChem believes may
      claim similar subject matter. BioChem intends to challenge vigorously such
patent applications. On 23 November 1999, the USPTO declared an     
  interference between BioChem's hepatitis B patent for lamivudine and a
    patent application filed by Yale University ("Yale") claiming methods of
treating hepatitis B using lamivudine. BioChem believes that this   
    application is licenced to Vion Pharmaceuticals, Inc. ("Vion"), formerly
 know as OncoRx, Inc., a New Haven, Connecticut-based company. BioChem
  believes that its patent is valid and intends to vigorously defend the
patent. On 14 April, 2000, the USPTO declared a further interference
between BioChem's hepatitis B patent for lamivudine and a patent    
   application by GlaxoSmithKline claiming methods of treating hepatitis B
using lamivudine. BioChem is not aware of corresponding patent      
      applications by Yale University or Vion in countries other than the United
States.                                                             

(d)   Save as disclosed in paragraph (c) above, BioChem is not engaged in any   
    legal or arbitration proceedings and no legal or arbitration proceedings
      are pending or threatened by or against BioChem which may have or have had
     during the 12 months prior to the date hereof a significant effect on the
financial position of BioChem.                                      

14.   Significant changes                                                       

(a)   [Save as disclosed in the paragraph headed "Information on Shire" on pages
     o and o of Part I of this document,] there has been no significant change
    in the financial or trading position of the Group since o 2000, the date
to which the latest interim results of the Group were prepared.     

(b)   [Save as disclosed in the paragraphs headed "Information on BioChem" on   
    pages o and o of Part I of this document,] there has been no significant
    change in the financial or trading position of BioChem since o 2000, the
date to which the latest audited results of BioChem were prepared.  

15.   United Kingdom Taxation                                                   

The comments set out below are intended as a general guide to the position under
current UK law and Inland Revenue practice and are subject to changes therein.  
They relate only to certain limited                                             

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aspects of the UK taxation treatment of the acquisition of New Ordinary Shares  
and/or ADRs pursuant to the Merger and (except so far as express reference is   
made to the treatment of non-UK resident holders) to the position of persons who
are resident or ordinarily resident in the UK for tax purposes and who hold     
their BioChem Shares or, as the case may be, New Ordinary Shares and/or ADRs    
beneficially as an investment. In addition, the comments assume that holders of 
ADRs will be treated as the beneficial owners of the Shire Shares represented by
the ADRs for the purposes of UK tax.                                            

Any person who is in any doubt about his own tax position or is subject to      
taxation in a jurisdiction other than the UK, should consult an appropriate     
independent tax adviser.                                                        

(a)   Taxation of chargeable gains                                              

   (i)   Disposal of BioChem Shares and Acquisition of New Ordinary Shares
     and/or ADRs A BioChem Shareholder will be treated as making a
         disposal of his BioChem Shares for the purposes of UK taxation in
      respect of chargeable gains to the extent that he receives New
      Ordinary Shares and/or ADRs in exchange for his BioChem Shares
          pursuant to the Merger. Such disposal may result in a liability to
            UK taxation in respect of chargeable gains, subject to any available
            exemption or relief. A BioChem Shareholder who receives New Ordinary
         Shares and/or ADRs in exchange for his BioChem Shares pursuant to
      the Merger will, for the purposes of UK taxation in respect of
          chargeable gains, be treated as having acquired those New Ordinary
        Shares and/or ADRs for a consideration equal to the value of his
       BioChem Shares at the time when he is deemed to acquire the New
      Ordinary Shares and/or ADRs for the purposes of UK taxation in
respect of chargeable gains.                            

      (ii)  Disposal of New Ordinary Shares and/or ADRs A subsequent disposal of
          all or any of the New Ordinary Shares and/or ADRs by an individual
            or corporate shareholder may result in a liability to UK taxation in
respect of chargeable gains, depending on the particular
circumstances of the shareholder concerned.             

(b)   Taxation of income                                                        

(i)   Dividends                                                     

            Shire is not required to withhold any amounts in respect of taxation
from its dividend payments.                             

           A Shire Shareholder or ADS holder who is an individual resident for
     tax purposes in the UK and who receives that dividend will be
        entitled to a tax credit equal to one-ninth of the dividend. The
       individual will be taxable on the total of the dividend and the
            related tax credit (the "gross dividend"), which will be regarded as
      the top slice of the individual's income. The tax credit will,
        however, be treated as discharging the individual's liability to
         income tax in respect of the gross dividend, unless and except to
            the extent that the gross dividend falls above the threshold for the
        higher rate of income tax, in which case the individual will, to
         that extent, pay tax on the gross dividend calculated as 32.5 per
         cent. of the gross dividend, less the related tax credit. So, for
   example, a dividend of (pound)80 will carry a tax credit of
    (pound)8.89 and the income tax payable on the dividend by an
            individual liable to income tax at the higher rate would be 32.5 per
         cent. of (pound)88.89, namely (pound)28.89, which after deducting
      the tax credit of (pound)8.89, leaves a higher rate income tax
charge of (pound)20.                                    

         With the exception of investors holding their New Ordinary Shares
        and/or ADRs in Shire through personal equity plans or Individual
          Savings Accounts, shareholders or ADS holders which are not liable
           to income tax or corporation tax on dividends received by them will
        not be entitled to claim payment of the tax credit in respect of
           those dividends. Charities will, however, receive some compensation
         for the loss of their entitlement to claim payment of tax credits
under a transitional relief expiring on 5 April 2004.   

            A Shire Shareholder or ADS holder that is a company resident for tax
           purposes in the UK will not generally be taxable on any dividend it
receives from Shire.                                    

          The right of a Shire Shareholder or ADS holder who is not resident
           for tax purposes in the UK to a tax credit in respect of a dividend
        received from Shire and to claim payment of any part of that tax
            credit will depend on the existence and terms of any double taxation
        convention between the UK and the country in which the holder is
resident. Holders who are not solely resident in the    

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     UK should consult their own tax advisers concerning their tax
       liabilities on dividends received, whether they are entitled to
            claim any part of the tax credit and, if so, the procedure for doing
        so. Such holders should note, however, that most holders who are
         entitled to claim payment of a portion of tax credits pursuant to
        double taxation conventions are only able to obtain a payment of
       less than 1 per cent. of the dividends to which the tax credits
relate.                                                 

(c)   Share Option Schemes                                                      

     [BioChem Optionholders who acquired or acquire their BioChem Shares under
   the BioChem Stock Option Plans are reminded that special tax provisions
may apply to them on their exercise of options or on any disposal of
     shares acquired on exercise, including provisions imposing a charge to UK
income tax.]                                                        

(d)   Stamp Duty and Stamp Duty Reserve Tax ("SDRT")                            

     These comments are intended as a guide to the general position and do not
 relate to persons such as market makers, brokers, or dealers, to whom
special rules apply.                                                

(i)   New Ordinary Shares                                           

  No stamp duty or SDRT will generally be payable by BioChem
          Shareholders as a result of receiving New Ordinary Shares pursuant
to the Merger.                                          

          A conveyance or transfer on sale of New Ordinary Shares other than
        to a depositary or clearance service or their nominees or agents
         will be liable to ad valorem stamp duty, generally at the rate of
         0.5 per cent of the consideration for the transfer (rounded up to
          the nearest (pound)5). An unconditional agreement for the transfer
           of such shares will be liable to SDRT, generally at the rate of 0.5
           per cent. of the consideration for the transfer, but such liability
         will be cancelled if the agreement is completed by a duly stamped
         transfer within six years of the date of the agreement or, if the
agreement was conditional, the date the agreement became
           unconditional. Where the SDRT is paid, the SDRT will, provided that
     a claim for repayment is made, be repaid (but not necessarily
         interest and penalties). Stamp duty and SDRT are normally paid by
the purchaser.                                          

         Where New Ordinary Shares are transferred (a) to, or to a nominee
    for, a person whose business is or includes the provision of
          clearance services, or (b) to, or to a nominee for, a person whose
          business is or includes issuing depositary receipts, stamp duty at
   the higher rate of 1.5 per cent. (rounded up to the nearest
       (pound)5) at current rates, of the consideration payable or, in
   certain circumstances, the value of the New Ordinary Shares
          concerned is payable. Where New Ordinary Shares are transferred or
         issued (a) to, or to a nominee for, a person whose business is or
        includes the provision of clearance services, or (b) to, or to a
   nominee for, a person whose business is or includes issuing
         depositary receipts, stamp duty or SDRT at the higher rate of 1.5
       per cent. at current rates, of the consideration payable or, in
   certain circumstances, the value of the New Ordinary Shares
           concerned is payable. Shire has agreed to pay any SDRT that becomes
            payable on the issue of New Ordinary Shares to a depositary pursuant
to the Merger.                                          

(ii)  ADRs                                                          

    No SDRT will be payable on an agreement to transfer ADRs and
     provided that an instrument transferring ADRs is executed and
          retained at all times outside the UK, it should not in practice be
necessary to pay stamp duty in respect of such transfer.

Any person who is in any doubt as to his or her tax position or who is subject  
to tax in a jurisdiction other than the UK should consult an appropriate        
professional adviser without delay.                                             

16.   Miscellaneous                                                             

(a)   The total expenses of, and incidental to, the Merger which are payable by 
      the Company (including professional fees and printing costs) are estimated
      to be approximately (pound)o (excluding value added tax). The total amount
 payable to financial intermediaries by way of fees in relation to the
Merger as estimated to amount to approximately (pound)o.            

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(b)   The Consideration Shares will be issued fully paid in registered form.    
None of the Consideration Shares has been marketed and none will be 
   available to the public. An application has been made to the UK Listing
     Authority for the New Ordinary Shares to be admitted to the Official List
     and to the London Stock Exchange for the New Ordinary Shares being issued
to be admitted to trading on the London Stock Exchange.             

(c)   The Company's registrars are Lloyds TSB Registrars, The Causeway,         
Worthing, West Sussex BN99 6DA.                                     

(d)   The Company has been advised by Deutsche Bank in relation to the Merger.  
    Deutsche Bank has given and has not withdrawn its written consent to the
      issue of this document with the inclusion of the references to its name in
the form and context in which they appear.                          

(e)   Merrill Lynch and West LB Panmure have given and have not withdrawn their 
     written consent to the issue of this document and the references to their
names thereto in the form and context in which they are included.   

(f)   The registered auditors of the Company are Arthur Andersen, Chartered     
Accountants, of Abbott House, Abbey Street, Reading, Berks. who have
 audited accounts of the Company for the three years ended 31 December
2000.                                                               

(g)   The independent certified public accountants for BioChem are Raymond      
      Chabot Grant Thornton who have audited the financial statements of BioChem
for the two years ended 31 December 2000.                           

(h)   Arthur Andersen have given and not withdrawn their written consent to the 
     inclusion in Parts III and VII of this document of their letters relating
to the accounting policies' reconciliation and pro forma financial  
      information, and the references thereto and to their name, in the form and
      context in which they are included. They have also authorised the contents
    of their letters referred to above for the purposes of section 152(1)(e)
of the Financial Services Act 1986.                                 

(i)   Each of the Consideration Shares is to be issued credited as fully paid.  
Based on the average last reported sale price of ADSs on the NASDAQ 
   National Market for the 15 consecutive days ending on the third trading
      day immediately preceding Completion (the "Average Shire ADS Price") being
    less than $o and a maximum possible number of BioChem Shares of o at the
    Effective Time, the aggregate consideration represented by the number of
      Consideration Shares to be issued in the Merger would be (pound)o based on
   the Company share price of o as at o 2001 (being the latest practicable
   date prior to the publication of this document). This would represent a
   premium of op per Ordinary Share over the nominal value of 5p. Based on
the Average ShireADS Price being greater than $o, the aggregate     
 consideration represented by the number of Consideration Shares to be
      issued in the Merger would be (pound)o based on the Company share price of
      o as at o 2001 (being the latest practicable date prior to the publication
      of this document). This would represent a premium of op per Ordinary Share
over the nominal value of 5p.                                       

17.   Documents available for inspection                                        

Copies of the following documents may be inspected at the offices of Slaughter  
and May, 35 Basinghall Street, London EC2V 5DB and the Company's registered     
office during normal business hours on any weekday (Saturdays, Sundays and      
public holidays excepted) from the date of this document until the conclusion of
the Extraordinary General Meeting:                                              

(i)   the Memorandum and Articles of Association of the Company;                
(ii)  the audited consolidated accounts of the Group for the years ended 31     
December 1999 and 31 December 2000;                                 
(iii) the material contracts referred to in paragraph 10 above;                 
(iv)  the service agreements referred to in paragraph 9(g) above;               
(v)   the rules of the Employee Share Schemes and the BioChem Stock Option Plans
referred to in paragraph 5 above;                                   
(vi)  the letters of consent referred to in paragraphs 16(d) and 16(e) above;   

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(vii)  the audited financial statements of BioChem for the years ended 31       
December 2000 and 31 December 1999;                               
(viii) the proforma statement of combined net assets referred to in Part VIII;  
(ix)   the reconciliation of BioChem's figures to US/UK GAAP referred to in Part
IV;                                                               
(x)    letters from Arthur Andersen referred to in paragraph 16(h) above;       
(xi)   the Merger Agreement; and                                                
(xii)  this document.                                                           

                                                                          o 2001

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 DEFINITIONS

In this document, the following expressions have the following meanings, unless 
the context requires otherwise:                                                 

                                                        [Enlarge/Download Table]
                                                                                              
"2000 ESO Scheme"             the Shire Pharmaceuticals Group plc 2000 Executive Share Option 
                              Scheme (parts A and B)                                          

"1993 Plan"                   the Richwood 1993 Stock Option Plan                             

"1995 Plan"                   the Richwood 1995 Stock Option Plan                             

"Acquisition Proposal"        any proposal or offer with respect to a merger, reorganisation, 
                              share exchange, consolidation, business combination,            
                              recapitalisation, liquidation, dissolution, or similar          
                              transaction involving BioChem or any purchase or sale of the    
                              consolidated assets of BioChem and its subsidiaries, taken as a 
                              whole, having an aggregate value of 50per cent. or more of the  
                              market capitalisation of BioChem, or any purchase or sale of, or
                              tender or exchange offer for, 50per cent. or more of the equity 
                              securities of BioChem, excluding the Arrangement                

"Admission"                   admission of the New Ordinary Shares to the Official List       

"ADR"                         American Depository Receipt, the evidentiary document for an    
                              underlying holding of one or more ADS(s)                        

"Arrangement"                 the plan of arrangement, pursuant to section 192 of the CBCA,   
                              involving Shire, BioChem and Exchangeco                         

"Average Shire ADS Price"     has the meaning set out in paragraph 16(i) of Part VIII of this 
                              document                                                        

"BioChem"                     BioChem Pharma Inc.                                             

"BioChem Optionholders"       holders of BioChem Options                                      

""BioChem Rightholders"       [o]                                                             

"BioChem Shareholders"        holders of BioChem Shares                                       

"BioChem Shares"              the outstanding common shares in the capital of BioChem         

"BioChem Stock Option Plan"   BioChem's Stock Option Plan                                     

"BioChem Stock Option Plans"  the Biochem Stock Option Plan, the BioChem Warrants and         
                              a memorandum of undertaking dated September 1997 with           
                              two senior employees of BioChem relating to options to          
                              acquire 40,000 BioChem Shares                                   

"BioChem Warrants"            the right to receive warrants in two tranches in 2001           
                              and 2002 in favour of the Government of Canada giving           
                              the right to acquire BioChem Shares made pursuant to an         
                              agreement dated 31 March 2000                                   

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                                                        [Enlarge/Download Table]
                                                                                                        
"Callco"                                3829359 Canada Inc, a company incorporated under the laws of    
                                        Canada and a wholly-owned subsidiary of Shire                   

"Canadian GAAP"                         generally accepted accounting principles in Canada              

"CBCA"                                  Canada Business Corporations Act                                

"Chase H&Q"                             Chase H&Q, a division of Chase Securities                       

"CliniChem"                             CliniChem Development Inc., a company incorporated under the    
                                        laws of Canada and a wholly-owned subsidiary of BioChem         

"Closing"                               the closing of the certificate of arrangement issued under the  
                                        CBCA giving effect to the Arrangement                           

"Companies Act" or the "Act"            the Companies Act 1985 (as amended)                             

"Deutsche Bank"                         Deutsche Bank AG, London                                        

                                        the directors of the Companythe company, whose names are set out
"Directors" or "Board"                  in paragraph 2(a) of Part IX of this document                   

"DLJ"                                   DLJ Capital Funding, Inc.                                       

"Effective Date"                        the date of the Closing                                         

"Effective Time"                        12.01 a.m. (Montreal time) on the Effective Date                

"Employee Share Schemes"                the Executive Scheme, the 1993 Plan, the 1995 Plan, the         
                                        SHL Scheme, the SPC Scheme, the SLI Plan, the Sharesave         
                                        Scheme, the Stock Purchase Plan, the Long Term Incentive        
                                        Plan, the ESO Scheme, Roberts' Incentive Stock Option           
                                        Plan, Roberts' 1996 Equity Incentive Plan and Roberts'          
                                        Restricted Stock Option Plan                                    

"Enlarged Group"                        Shire as enlarged by the Merger                                 

"Exchangeable Share Support Agreement"  the Exchangeable Share Support Agreement between Shire,         
                                        Callco and Exchangeco to be entered into on the date of         
                                        the certificate of arrangement issued under the CBCA            
                                        giving effect to the Arrangement                                

"Exchangeco"                            3829341 Canada Inc., a company incorporated under the laws of   
                                        Canada and a wholly-owned subsidiary of Shire                   

"Executive Scheme"                      the Shire Pharmaceuticals Executive Share Option Scheme (parts A
                                        and B)                                                          

"Extraordinary General Meeting"         the extraordinary general meeting to, inter alia,               
                                        approve the Merger, notice of which is given at the end         
                                        of this document                                                

"GlaxoSmithKline"                       GlaxoSmithKline plc, a company incorporated in England          

"Group"                                 Shire and its subsidiary undertakings                           

"HSR Act"                               the United States Hart-Scott-Rodino Act Antitrust               
                                        Improvements Act of 1976, as now in effect and as it may        
                                        be amended from time to time prior to the Effective Date        

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                                                        [Enlarge/Download Table]
                                                                                                 
"Interim Order"                   means the interim order of the Quebec Superior Court in respect
                                  of the Arrangement dated o 2001                                

"London Stock Exchange" or "LSE"  London Stock Exchange plc                                      

"Long Term Incentive Plan"        the Shire Pharmaceuticals Group plc Long Term Incentive Plan   

"Material Adverse Effect"         with respect to any entity, any event, change,                 
                                  circumstance or effect that is or is reasonably likely         
                                  to be materially adverse to (i) the business, financial        
                                  condition, results of operations or prospects of such          
                                  entity and its subsidiaries taken as a whole, other than       
                                  any event, change, circumstance or effect relating to          
                                  (a) the economy or financial markets in general, (b) the       
                                  industries in which such entity operates in general and        
                                  not specifically relating to (or having the effect of          
                                  specifically relating to or having a materially                
                                  disproportionate effect (relative to most other industry       
                                  participants) on) such entity, (c) the announcement or         
                                  pendency of the Arrangement, (d) changes after the date        
                                  hereof in laws or regulations relating to the                  
                                  development, manufacture or distribution of products for       
                                  the treatment of disease or (e) a change in the market         
                                  price or trading volume of the shares of such entity           
                                  (provided that a change in the market price or trading         
                                  price may be used, if applicable, as evidence of some          
                                  other event, change, circumstance or effect that has or        
                                  is reasonably likely to have a Material Adverse Effect)        
                                  or (ii) the ability of such entity to consummate the           
                                  transactions contemplated by this Agreement; all               
                                  references to Material Adverse Effect on Shire contained       
                                  in the Merger Agreement being deemed to refer solely to        
                                  Shire and its subsidiaries without including its               
                                  ownership of BioChem and its subsidiaries after the            
                                  Arrangement                                                    

"Merger"                          the proposed merger of Shire with BioChem pursuant to the terms
                                  of the Merger Agreement                                        

"Merger Agreement"                the merger agreement dated as of 10 December 2000 among        
                                  BioChem, Shire and Exchangeco, a summary of which is           
                                  contained in Part VIII of this document                        

"Merrill Lynch"                   Merrill Lynch & Co. Inc in its capacity as adviser to BioChem  
                                  and Merrill Lynch International in its capacity as broker to   
                                  Shire, as the context requires                                 

"New Ordinary Shares"             the o new Ordinary Shares to be issued pursuant to the Merger  
                                  Agreement                                                      

"Official List"                   the Official List of the UK Listing Authority                  

"Option Agreement"                o                                                              

"Ordinary Shares"                 ordinary shares of 5p each in the capital of the Company       

"Proposed Directors"              the proposed directors of the Company, being those             
                                  persons other than the Directors whose names are set out       
                                  in paragraph 2(a) of Part VIII of this document.               

"Roberts"                         Roberts Pharmaceutical Corporation, a wholly-owned subsidiary  

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                                                        [Enlarge/Download Table]
                                                                                                
                                 of Shire                                                       

"Roberts Stock Option Plans"     Roberts' Incentive Stock Option Plan, Roberts' 1996 Equity     
                                 Incentive Plan and Roberts' Restricted Share Option Plan       

"SEC"                            the Securities and Exchange Commission of the United States    

"Sharesave Scheme"               the Shire Pharmaceuticals Sharesave Scheme                     

"Shire" or "Company"             Shire Pharmaceuticals Group plc, a company incorporated in     
                                 England                                                        

"Shire ADSs" or "ADSs"           American Depository Shares, issuable upon deposit of           
                                 Ordinary Shares, each representing three Ordinary Shares       

"Shire Board" or "Board"         the Directors whose names are set out in paragraph 2(a)        
                                 of Part IX of this document, including the Proposed            
                                 Directors                                                      

"Shire Consideration Shares" or  the New Ordinary Shares, new ADSs and new Shire Exchangeco     
"Consideration Shares"           Shares to be issued pursuant to the Merger Agreement           

"Shire Exchangeco Shares"        the exchangeable shares to be created in the capital of        
                                 Exchangeco, exchangeable for New Ordinary Shares or new        
                                 ADSs in accordance with the rights attaching to such           
                                 exchangeable shares                                            

"Shire Group"                    Shire and its subsidiaries and subsidiary undertakings         

"Shire Laboratories" or "SLI"    Shire Laboratories Inc., a wholly-owned subsidiary of the      
                                 Company into                                                   

"Shire Shareholders"             the holders of Ordinary Shares                                 

"SHL"                            Shire Holdings Limited, a whollyowned subsidiary of the Company

"SHL Scheme"                     the Shire Holdings Limited Share Option Scheme                 

"SLI Plan"                       the Pharmavene 1991 Stock Option Plan (as amended)             

"SPC Scheme"                     the Imperial Pharmaceutical Services Limited Employee Share    
                                 Option Scheme (Number One)                                     

"SPC"                            Shire Pharmaceutical Contracts Limited, a wholly-owned         
                                 subsidiary of the Company                                      

"SPD"                            Shire Pharmaceutical Development Limited, a wholly-owned       
                                 subsidiary of the Company                                      

"Special Voting Shares"          the special voting shares of op in the capital of the Company  
                                 to be issued, credited as fully paid, pursuant to the Merger   

"SPL"                            Shire Pharmaceuticals Limited, a wholly owned subsidiary of the
                                 Company                                                        

"SRI Plan"                       the 1993 Plan and the 1995 Plan                                

"SRI"                            Shire Richwood Inc., [now known as Shire US] a wholly owned    
                                 subsidiary of the Company                                      

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"Stock Option Agreement"  the Stock Option Agreement entered into by the Company          
                          and BioChem dated 10 December 2000, a summary of which          
                          is contained in Part o of this document                         

"Stock Purchase Plan"     the Shire Pharmaceuticals Group plc Employee Stock Purchase Plan

"Transaction"             the transactions contemplated by the Merger Agreement           
                          and the Arrangement, whereby, among other things, Shire         
                          becomes, indirectly through its subsidiaries, the sole          
                          beneficial holder of the BioChem Shares outstanding             
                          after giving effect to the Arrangement.                         

"UK GAAP"                 generally accepted accounting principles in the United Kingdom  

"UK Listing Authority"    the Financial Services Authority acting in its capacity         
                          as the competent authority for the purposes of Part IV          
                          of the Financial Services Act 1986 and in the exercise          
                          of its function in respect of the admission to the              
                          Official List otherwise than in accordance with Part IV         
                          of the Financial Services Act 1986                              

"United Kingdom" or "UK"  means the United Kingdom of Great Britain and Northern Ireland  

"United States" or "US"   the United States of America and its territories and possessions
                          and all other areas subject to its jurisdiction                 

"US GAAP"                 generally accepted accounting principles in the United States   

"USPTO"                   the United States Patent and Trademark Office                   

"US Securities Act"       the US Securities Act of 1933, as amended                       

"West LB Panmure"         West LB Panmure Limited                                         

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EXCHANGE RATES

Unless otherwise stated, values throughout this document have been translated   
from Canadian dollars to US dollars (for illustration purposes only) using an   
exchange rate of US$1: CAN$1.47 and from US dollars to UK sterling (for         
illustrative purposes only) using an exchange rate of (pound)1: US$1.44.        

Unless stated otherwise, "US$" or "$" refers to the currency of the United      
States of America, "CAN$" refers to the currency of Canada and "(pound)" refers 
to the currency of the United Kingdom.                                          

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GLOSSARY

Product, compound or technical      Description and/or use                      
term                                                                            

ADHD                                Attention Deficit Hyperactivity Disorder, a 
                                  CNS disorder characterised by inattention,
                            implusivity and hyperactivity. It is
                        primarily diagnosed in children.

Alzheimer's disease                 A condition first described by the German   
                                   physician, Alois Alzheimer. The term Senile
                                 Dementia of the Alzheimer Types (SDAT) is
                                   used to cover dementias related to specific
                                   degenerative changes in the brain described
     by Alzheimer.

                                   Symptoms include loss of memory (especially
                         for recent events), confusion and
                                  disorientation in terms of time and place,
                                impaired concentration, restlessness and
                                 anxiety. it is a relentlessly progressive
                              disease leading eventually to coma and
                                  death, usually from urinary or respiratory
  infection.

                               In Alzheimer's disease the areas of the
                           brain in which acetylcholine is the
                           neurotransmitter are most affected.

Analgesic                           A medicine which relieves pain.             

Anti-Invective                      Drugs designed to combat the opportunistic  
                                 diseases which affect HIV/AIDS sufferers.

Antiretroviral                      Drugs designed to combat the development of 
                             HIV/AIDS after exposure to the virus.

Bi-polar disease                    A manic depressive disorder.                

Carbatrol                           Shire's patented formulation of the compound
                           carbamazepine, for the treatment of
 epilepsy.

Central Nervous System Disorders    Disorders of the brain and spinal cord.     
("CNS")                                                                         

Diagnostics                         The identification of distinctive symptoms  
                        or characteristics of a disease.

Epilepsy                            An episodic disturbance of consciousness    
                                during which generalised convulsions may
occur.  

Galantamine                         One of Shire's drug candidates; a           
                                    cholinesterase inhibitor undergoing clinical
                                  trials for Alzheimer's disease and Chronic
                                    Fatigue Syndrome amongst other applications.

Generic drug                        A non-branded prescription medicine.        

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Haematology                         The brand of physiology which relates to    
blood.  

Hepatitis B                         A disease which attacks the liver often     
                               causing cirrhosis of the liver or liver
failure.

Histology                           The science of organic tissues; that brand  
                                   of anatomy or of biology which is concerned
                                   with the minute structure of the tissues of
           animals and plants.

Hyperphosphataemia                  An excess of phosphates in the blood.       

Hypotension                         Blood pressure below the expected normal    
range.  

Indication                          A disease or system target for a drug.      

Inflammatory bowel disease          Ulcerative colitis and Crohn's disease.     

Irritable Bowel Syndrome            A digestive disorder causing change or      
                             disruption of the normal bowel habit.

Ischaemic stroke                    Damage caused by interruption of the blood  
            supply to the brain.

Foznol                              A compound Shire is developing aimed at     
                                improving upon present therapies used to
                                  regulate blood phosphate levels in chronic
                kidney failure patients.

Lead Optimisation                   The process by which the lead compound is   
              developed or enhanced.

Leukemia                            A cancer-like disease of the white blood    
cells.  

Marketing authorisation             A grant of licence by a governmental        
                                 regulatory authority giving permission to
                        market a pharmaceutical product.

Metabolic diseases                  Disorders in which the body's ability to    
                             process certain chemical reactions is
  disturbed.

Metabolism (drug)                   The modification of a substance in the body,
           often by the liver.

NDA                                 New Drug Application. The application       
                                    submitted to and reviewed by the FDA showing
                                    the data on the quality, safety and efficacy
                               of a chemical entity. Approval of a NDA
                        allows marketing of the product.

Oncology                            The brand of medical science relating to    
tumours.

Osteoporosis                        A disease in which calcium and protein are  
                                progressively lost from bones until they
                              become brittle and liable to fracture.

Pharmacological                     The branch of medical science relating to   
             drugs and their uses.

Phase I                             Clinical trials normally conducted in       
                          healthy human volunteers following
            pre-clinical trials.

Phase II                            Clinical trials to assess short term safety 
                             and preliminary efficacy in a limited
                            number of patients with the relevant
disease.

Phase III                           Clinical trials to undertake a comprehensive
                            evaluation of safety and efficacy in
                           patients with the relevant disease.

Phase IV                            Clinical trials performed after marketing   
                 authorisation designed to

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                                 monitor drug use in the clinical setting.

Placebo                             An inactive agent used in clinical studies  
                            as a control with which to compare a
                 presumed active compound.

Platelet                            A type of blood involved in clotting.       

Preclinical trials                  Studies of compounds undertaken in the      
                                    laboratory, in isolated tissues or in living
animals.

Product licence                     The marketing authorisation for a drug from 
                            a governmental regulatory authority.

Prostatic/Prostate cancer           Cancer of the prostate gland.               

Registration                        The legal process by which a drug is        
                             approved by governmental agencies for
                                marketing in a given country or group of
  countries.

Stroke                              An apoplectic or paralytic seizure.         

Thrombocythemia                     A condition of overproduction of blood      
                                   platelet cells without a recognisable cause
                                   often leading to the formation of dangerous
    blood clots.

Ulcerative colitis                  A drug used to dissolve blood clots.        

SPD 502                             A compound Shire is developing for the      
                      treatment of ischaemic stroke.

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 Shire Pharmaceuticals Group plc
(Registered in England and Wales with registered number 2883758)

 Notice of Extraordinary General Meeting

NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting of Shire           
Pharmaceuticals Group plc (the "Company") will be held at o on o 2001 at 3.00pm 
for the purposes of considering and, if thought fit, passing the following      
resolutions, of which the resolution numbered 1 will be proposed as an ordinary 
resolution and the resolution numbered 2 as a special resolution:               

 ORDINARY RESOLUTION

THAT:                                                                           

(a)   the authorised share capital of the Company be increased from             
     (pound)20,000,000 to (pound)o by the creation of o new ordinary shares of
  5p each forming a single class with the existing ordinary shares of 5p
each in the capital of the Company;                                 

(b)   the proposed acquisition by the Company of BioChem Pharma Inc.            
 ("BioChem"), on the terms and subject to the conditions of the Merger
   Agreement (as defined in the Company's circular to shareholders dated o
     2001 (the "Circular"), a copy of which, initialled by the Chairman of the
meeting for the purposes of identification, has been produced to the
    meeting), including the conversion of options and rights held by BioChem
    option holders and right holders, respectively, over BioChem shares into
     options and rights, respectively, over ordinary shares of the Company, be
     and is hereby approved and the directors of the Company be and are hereby
      authorised to take all necessary or appropriate steps to complete the same
      and give effect thereto with such modifications not, in the opinion of the
     directors, materially adverse to the Company as they shall think fit; and

(c)   in addition and without prejudice to all existing authorities, the        
    directors of the Company be generally and unconditionally authorised for
    the purposes of section 80 of the Companies Act 1985 to exercise all the
    powers of the Company to issue and allot relevant securities (within the
      meaning of that section) up to an aggregate nominal amount of (pound)o for
  a period expiring (unless previously renewed, varied or revoked by the
  Company in general meeting) 15 months after the date of the passing of
     this resolution or at the conclusion of the Annual General Meeting of the
   Company following the passing of this resolution, whichever is earlier,
   save that the Company may before such expiry make an offer or agreement
      which would or might require relevant securities to be allotted after such
    expiry and the directors of the Company may allot relevant securities in
 pursuance of such an offer or agreement as if the authority conferred
hereby had not expired;                                             

(d)   the relevant number of existing authorised but unissued ordinary shares of
5p each in the capital of the Company be and are hereby divided into
  shares (of an aggregate nominal amount equal to the sum of the nominal
amounts of all the ordinary shares thus divided) (such shares being 
designated the "Special Voting Shares"). For the purposes of this   
  resolution, the "relevant number" of such ordinary shares shall be the
   smallest number of such ordinary shares necessary to be divided to give
rise to such number of Special Voting Shares as will be equal to the
   number of issued and outstanding Shire Exchangeco Shares (as defined in
     the Circular) immediately after the Closing (as defined in the Circular);

(e)   the rights and restrictions attaching to the Special Voting Shares shall  
be as set out below:                                                

(A)   Income                                                                    

the holder of the Special Voting Shares shall not be entitled to any
dividends or distributions in respect of such shares;               

(B)   Capital                                                                   

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    the holder of the Special Voting Shares shall be entitled to receive out
  of any winding up of the Company an amount equal only to the aggregate
      nominal amount of such shares and only after holders of ordinary shares of
      5p each in the capital of the Company have received an amount equal to the
nominal amount of such shares held by them;                         

(C)   Transfer                                                                  

      the directors of the Company shall decline to register any transfer of any
  of the Special Voting Shares unless the transfer is to a company which
      replaces the Trustee (as defined in the Circular) pursuant to the terms of
 the Voting and Exchange Trust Agreement (as defined in the Circular);

(D)   Voting Rights                                                             

      (i)   the holder of the Special Voting Shares shall be entitled to receive
      notice of and to attend and vote at any general meeting of the
Company as follows:                                     

         (a)   on a show of hands, the holder of the Special Voting Shares
                  shall have one vote in addition to the votes which may be cast
                  by a holder of Shire Exchangeco Shares (other than the Company
          or any of its subsidiaries, subsidiary undertakings or
                  associated undertakings) (a "Beneficiary") (or its nominee) on
             such show of hands as proxy for the holder of the Special
Voting Shares; and                          

          (b)   on a poll the holder of the Special Voting Shares shall have
                 three votes for every Shire Exchangeco Share then outstanding
              (A) that is owned by Beneficiaries and (B) as to which the
                 holder of the Special Voting Shares has received valid voting
                instructions from the holders of the Shire Exchangeco Shares
                for the purposes of the Voting and Exchange Trust Agreement;

     (ii)  the holder of the Special Voting Shares shall on a poll be entitled
           to cast the votes attaching to such shares on any resolution for or
         against such resolution (such that some of such votes may be cast
           for, some of such votes may be cast against, and some of such votes
          may not be cast at all on, such resolution) in such proportions as
it may determine;                                       

     (iii) if so instructed by a Beneficiary, the holder of the Special Voting
           Shares shall be entitled to appoint that Beneficiary, or such other
       person as that Beneficiary nominates, as proxy to attend and to
        exercise personally in place of the holder of the Special Voting
            Shares that number of votes equal to three times the number of Shire
            Exchangeco Shares held by the Beneficiary (the "Beneficiary Votes").
          A proxy need not be a member of the Company. A Beneficiary (or his
            nominee) exercising its Beneficiary Votes shall have the same rights
          as the holder of the Special Voting Shares to speak at the meeting
           in favour of any matter and to vote on a show of hands or on a poll
in respect of any matter proposed.                      

     (iv)  the holder of the Special Voting Shares shall be entitled to demand
a poll at any general meeting of the Company; and       

    (vi)  a proxy received from the holder of the Special Voting Shares will
           be valid for the purposes of any poll at any general meeting of the
            Company if it is received before the closing of the poll to which it
relates; and                                            

(E)   Class Rights                                                              

      any amendment to, or removal of, or alteration of the effect of (which for
    the avoidance of doubt shall be taken to include the ratification of any
breach of) all or any of [articles o and o]                         

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    of the articles of association of the Company as in force at the date of
  this resolution shall be deemed to be a variation of the rights of the
  Special Voting Shares and shall accordingly only be effective with the
     consent in writing of the holder of the Special Voting Shares and without
      such consent shall not be done, or caused or permitted to be done, and the
   holder of the Special Voting Shares shall withhold such consent save as
directed by the directors of the Company.                           

SPECIAL RESOLUTION

THAT:                                                                           

in substitution for all existing authorities save for, and without prejudice to,
resolution 17 passed at the annual general meeting of the Company held on 7 July
2000 at 11.00 am, the directors of the Company be and they are hereby empowered 
pursuant to section 95 of the Companies Act 1985 to allot equity securities     
(within the meaning of section 94(2) of the Companies Act 1985) of the Company  
pursuant to the authority conferred by the passing of resolution 16 passed on 7 
July 2000 2000 as if section 89(1) of the Companies Act 1985 did not apply to   
such allotment provided that this power:                                        

(i)   shall expire five years after the date of the passing of this 
        resolution, save that the Company may make an offer or agreement
           which would or might require equity securities to be allotted after
     such expiry and the directors of the Company may allot equity
          securities pursuant to any such offer or agreement as if the power
conferred hereby had not expired; and                   

(ii)  shall be limited to:                                          

            (a)   allotment of equity securities where such securities have been
                  offered (whether by way of a rights issue, open offer or other
                  pre-emptive offer) to holders of ordinary shares in proportion
                (as nearly as may be) to their existing holdings of ordinary
               shares but subject to the directors of the Company having a
          right to make such exclusions or other arrangements in
               connection with such offering as they may deem necessary or
expedient:                                  

                (i)   to deal with equity securities representing fractional
entitlements;                   

                (ii)  to deal with ordinary shares represented by depository
receipts; and                   

                 (iii) to deal with legal or practical problems under the laws
                    of, or the requirements of any recognised regulatory
                 body or any stock exchange in, any territory; and

     (b)   allotments of equity securities for cash otherwise than
               pursuant to paragraph (a) up to an aggregate nominal amount
of (pound)o.                                

Dated: o 2001                                                                   

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Registered office                                          By Order of the Board
East Anton                                                            N C Harris
Andover                                                                         
Hampshire                                                              Secretary
SP10 5RG                                                                        
United Kingdom                                                                  

Notes:                                                                          

(1)   A member of the Company entitled to attend and vote at the above          
   Extraordinary General Meeting may appoint one or more proxies to attend
    and, on a poll, to vote instead of him/her. A proxy need not be a member
of the Company.                                                     

(2)   Shareholders should note that in order to have the right to attend and    
    vote at the Extraordinary General Meeting, their holding must be entered
in the Company's share register by no later than 3.00 pm on o 2001. 

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