Shire plc – ‘DEFM14A’ on 3/1/01

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

Document/Exhibit                   Description                      Pages   Size 

 1: DEFM14A     Definitive Proxy Solicitation Material -- Merger     352   1.79M 
                          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:                                             
/ /        Preliminary Proxy Statement                                 
/ /        Confidential, for Use of the Commission Only (as permitted  
           by Rule 14a-6(e)(2))                                        
/X/        Definitive Proxy Statement                                  
/X/        Definitive Additional Materials                             
/ /        Soliciting Material Pursuant to 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:
                260,621,527                                                 
                ------------------------------------------------------------
           (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):                                         
                *                                                           
                ------------------------------------------------------------
           (4)  Proposed maximum aggregate value of transaction:            
                $4,180,698,730                                              
                ------------------------------------------------------------
           (5)  Total fee paid:                                             
                $836,140. $22,093 paid herewith. $814,047 previously paid on
                January 17, 2001 with filing of preliminary proxy statement.
                ------------------------------------------------------------

           *    The per unit price for the 254,707,924 ordinary shares in   
                respect of which a fee was paid in connection with the      
                filing of the Company's preliminary proxy statement on      
                January 17, 2001 was $15.98, 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. The per unit 
                price for the additional 5,913,603 ordinary shares that may 
                be issued in connection with the transaction is $18.68,     
                based on the average of the high and low prices for the     
                ordinary shares as reported on the London Stock Exchange on 
                February 23, 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 
HAMPSHIRE INTERNATIONAL BUSINESS PARK 
CHINEHAM, BASINGSTOKE 
HAMPSHIRE RG24 8EP
ENGLAND 
PROXY STATEMENT FOR THE 
EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS 

SOLICITATION AND REVOCATION OF PROXIES

   The Board of Directors of Shire Pharmaceuticals Group plc 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 March 29, 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 March 1, 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. under the
terms of a plan of arrangement. We will issue up to 260,621,527 ordinary shares 
(but in any event the number of ordinary shares we issue shall be less than the 
total number of Shire issued ordinary shares at the closing of the merger) 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 including any shares to be issued pursuant to the exercise of 
options under the BioChem Stock Option Plans or other rights and any new BioChem
shares which may be issued in certain circumstances as a result of the exercise 
by BioChem shareholders of their statutory dissent rights under Canadian law.   
See "The Merger--Anticipated Accounting Treatment and Effects").                

 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 authorized share capital for cash free of pre-emption rights up to a     
nominal amount of L1,279,868. This action does not relate to the merger.        

SEE "RISK FACTORS" BEGINNING ON PAGE 22 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 merger agreement and 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 Shire Acquisition 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                                                 

Hampshire International Business Park                                           

Chineham, Basingstoke                                                           

Hampshire RG24 8EP                                                              

England                                                                         

Telephone: (44)1-256-894-000                                                    

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

- central nervous system disorders;                                             

- metabolic diseases;                                                           

- oncology; 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 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) 978-7800                                                       

 BioChem is an international specialty pharmaceutical company dedicated to
the research and 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 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.                                                   

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Only BioChem shareholders 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 (the      
"TSE"). 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 meetings of Shire shareholders. See "The Merger  
Agreement--Conversion of BioChem Shares."                                       

EXCHANGE RATIO                                                                  

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

                                                                [Download Table]

IF THE AVERAGE ADS PRICE IS:  THE EXCHANGE RATIO SHALL BE:
----------------------------  ----------------------------
                                                          
less than or equal to $47.20  2.3517                      
greater than $47.20 and less  determined by dividing      
than $70.80                   $37.00 by the average ADS   
                              price and multiplying by    
                              three                       

equal to or greater than      1.5678                      
$70.80                                                    

If a BioChem shareholder elects, or in certain other circumstances, we will     
provide such shareholder with one-third of an ADS or one-third of an            
exchangeable share for each ordinary share that shareholder would be entitled to
receive based on the exchange ratio. See "The Merger Agreement--Exchange Ratio."
Each registered BioChem shareholder otherwise entitled to a fractional interest 
in an exchangeable share, Shire ADS or Shire ordinary share will receive from   
Exchangeco a cash payment equal to such registered BioChem shareholder's PRO    
RATA portion of the net proceeds after expenses received upon the sale of whole 
shares representing an accumulation of all fractional interests in new ordinary 
shares, new ADSs and new exchangeable shares to be issued by Shire pursuant to  
the merger to which all such BioChem shareholders would otherwise be entitled.  

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 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                                                      

- 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 generally be no earlier than the 10th anniversary
of the effective date. However, in certain circumstances, Exchangeco has the    
right to redeem your exchangeable shares prior to the 10th                      

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anniversary of the effective date. An early redemption may occur where:         

   (i) there are fewer than 1,000,000 exchangeable shares outstanding,
other than exchangeable shares held by us and our affiliates;           

        (ii) certain transactions occur involving us, such as (a) an acquisition
of more than 50% of the total voting power of all outstanding voting    
securities, (b) shareholders approve a merger, consolidation,           
recapitalization or reorganization which would result in the holders of 
outstanding voting securities having at least 75% of the voting power or
(c) shareholders approve a liquidation; or                              

    (iii) certain events occur which entitle the holders of exchangeable
shares to vote as shareholders of Exchangeco.                           

    Shire may require you to exchange each of your exchangeable shares for three
ordinary shares or one ADS (at the option of the holder) upon a modification to 
the INCOME TAX ACT (Canada), as amended, pursuant to which the exchange may be  
effected without any adverse Canadian tax consequences to you.                  

THE EXTRAORDINARY GENERAL MEETING 

DATE, TIME, PLACE AND PURPOSE                                                   

   The meeting will be held at 35 New Broad Street, London, EC2M 1SQ, England,
on March 29, 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 6:00 p.m. on March 27, 2001 are entitled to
vote at the meeting. On February 27, 2001, there were 257,521,218 shares        
outstanding and entitled to vote which were held by approximately 9,000 holders 
of record. As of February 27, 2001, approximately 67,106,568 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,                                                    

    - depositing at the registered office a written notice of revocation bearing
a date later than the date of the proxy or                          

- attending the 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 Shire group as enlarged by the     
 merger with BioChem (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 & 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 $127.8 million and cash and investments of approximately      
$186.3 million while BioChem had indebtedness of approximately              

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$86.1 million and approximately $277.3 million in cash and investments. With
pro forma revenues of $675.1 million and net income of $211.7 million* 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 has not yet determined whether to repay the amounts       
outstanding under the credit facility entered into at the time of Shire's   
merger with Roberts Pharmaceutical Corporation in 1999.                     

 * This includes an APB 25 stock option charge of $21.9 million, a gain on the
sale of long term investments of $104.0 million and the write off of in 
process research and development of $26.9 million.                      

- A BROADENED AND STRENGTHENED PIPELINE. The Enlarged Group will have 25        
products in development of which 13 will be in pre-clinical and Phase I     
 development, and 12 will be in full clinical development or registration. The
merger will strengthen the product pipeline in the areas of oncology and    
  central nervous system disorders with a total of 15 products in development in
these areas and will broaden the pipeline of products in development by the 
inclusion of 6 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       
optimization 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 development activities: Cost savings and future cost avoidance
      are expected to result from the establishment of a budget for the Enlarged
    Group; a review of the Enlarged Group's requirements for new development
      projects; a thorough review of the Enlarged Group's 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-organization of business activities: The re-organization 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 first quarter of 2001 of
approximately $175 million in connection with consummating the merger and the   
Enlarged Group's combined operations. Taking into account the opportunity for   
synergies referred to above, which includes anticipated cost savings in the     
range of $10-15 million per annum, 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 you vote in favor 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 9,087,385 ordinary shares, representing approximately 3.5% of our  
issued share capital.                                                           

 Following the merger, Dr. Francisco Bellini, the Honorable James A. Grant
and Mr. Gerard Veilleux, each of whom is now a director of                      

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BioChem, will be appointed as non-executive directors of Shire. Additionally,   
Dr. Horovitz, Mr. Smith and Mr. Spitznagel will be leaving the Shire board of   
directors.                                                                      

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 organization 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 early stage development      
operation through which it has generated a pipeline of projects focused in three
discrete specialty categories: oncology, vaccines and anti-virals.              

OPINION OF FINANCIAL ADVISER                                                    

In deciding to approve the merger, our board of directors considered the
opinion of its financial adviser, 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. The number of new ordinary shares, new ADSs and new       
exchangeable shares to be issued pursuant to the merger by Shire might increase 
as a result of the exercise by BioChem shareholders of their statutory dissent  
rights under Canadian law. Such dissent rights confer upon BioChem shareholders 
the ability to dissent from the plan of arrangement to the proposed merger in   
which event, provided the aggregate number of shares held by dissenting BioChem 
shareholders is less than 5% of BioChem's issued share capital, the proposed    
merger will proceed but such shareholders will be entitled to receive fair value
consideration. In the event that such dissent rights are exercised in respect of
more than 2.4% of BioChem shares, then, in the absence of the issue of shares   
referred to below, the intended pooling of interests accounting treatment of the
merger will not be available. In these circumstances, Shire may request that    
BioChem issue up to 2,634,383 additional BioChem shares (representing           
approximately 2.6% increase over the current issued share capital of BioChem)   
for cash by way of private placement to an independent third party(ies). In such
event, the board of directors of BioChem may, in its entire discretion and if   
deemed appropriate in the circumstances give effect to such request of Shire,   
taking into account the number of options to acquire BioChem shares exercised   
since the date hereof. These shares will then be acquired by Shire pursuant to  
the merger so as to allow the pooling of interests accounting treatment of the  
merger to be available.                                                         

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;                                                     

- 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 U.S. GAAP; and                      

- the ordinary shares to be issued in the merger must be admitted to the        
Official List of the                                                        

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United Kingdom Listing Authority and to trading on the London Stock Exchange
(the "LSE"), the ADSs must be approved for quotation on the Nasdaq National 
 Market ("Nasdaq") and the exchangeable shares must be approved for listing on
the TSE.                                                                    

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.             

The merger is expected to become effective on or about March 30, 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 have not approved the merger at the BioChem            
shareholders meeting;                                                       

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

- BioChem breaches any representation, warranty, 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 have not approved the merger at the extraordinary general    
meeting;                                                                    

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

- we breach or Exchangeco breaches any representation, warranty, 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).   

  BioChem may also terminate the merger agreement, among other things, if it
determines that another proposal to acquire BioChem is more favorable from a    
financial point of view to its shareholders than the merger with Shire. If this 
occurs, then 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 our board of  
directors 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 BioChem shares 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 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 merger
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   

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Antitrust Division and the Federal Trade Commission, and the required waiting   
period expired on February 11, 2001.                                            

In the UK, the Secretary of State for Trade and Industry decided on     
February 27, 2001, on the information before him, and in accordance with the    
recommendation of the Director General of Fair Trading, not to refer the merger 
to the Competition Commission under the provisions of the Fair Trading Act 1973.

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. Each of Shire and BioChem believe that the merger is likely to
be of net benefit to Canada. A decision of the Minister is anticipated prior to 
the extraordinary general meeting. The merger also constitutes a notifiable     
transaction under the COMPETITION ACT (Canada). On February 5, 2001, the        
Commission of Competition issued an advance ruling certificate under the        
COMPETITION ACT (Canada) allowing consummation of the merger.                   

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 obtained
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, as amended.  

SPECIAL RESOLUTION                                                              

    At the extraordinary general 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 authorized share capital for cash free of pre-emption rights up to a nominal
amount of L1,279,868.                                                           

   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 the extraordinary general 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 three
years up through and including the year ended December 31, 2000 has been derived
from Shire's audited consolidated financial statements and the notes to these   
financial statements incorporated by reference into this Proxy Statement. The   
summary financial information for the years ended June 30, 1997 and 1996 and the
six months and the year ended December 31, 1997 have been derived from Shire's  
audited consolidated financial statements and the notes to those financial      
statements.                                                                     

                                                        [Enlarge/Download Table]

                                                        SIX MONTHS                                                            
                              YEAR ENDED  YEAR ENDED      ENDED        YEAR ENDED     YEAR ENDED     YEAR ENDED    YEAR ENDED 
                               JUNE 30,    JUNE 30,    DECEMBER 31,   DECEMBER 31,   DECEMBER 31,   DECEMBER 31,  DECEMBER 31,
                               1996(1)     1997(1)     1997(1)/(2)      1997(1)        1998(1)          1999          2000    
                              ----------  ----------   ------------   ------------   ------------   ------------  ------------
                                               (IN THOUSANDS, EXCEPT PER ORDINARY SHARE AND PER ADS AMOUNTS)                  
                                                                                                                              
INCOME STATEMENT DATA:                                                                                                        
Revenues.....................  $143,537   $ 147,842      $112,804       $191,554       $308,984       $401,532     $  517,608 
Operating (loss)/income......   (23,557)   (125,116)       (4,435)       (85,841)        23,236        (76,068)       122,264 
(Loss)/income before income                                                                                                   
  taxes......................   (24,416)   (119,209)       (4,058)       (82,732)        23,563        (78,936)       116,188 
Net (loss)/income............   (23,705)   (106,994)       (4,366)       (84,152)        20,572        (94,998)        76,171 
Basic net (loss)/income per                                                                                                   
  ordinary share.............     (0.23)      (0.74)        (0.02)         (0.45)          0.09          (0.39)          0.30 
Basic net (loss)/income per                                                                                                   
  ADS........................     (0.69)      (2.23)        (0.06)         (1.36)          0.26          (1.16)          0.91 
Fully diluted net                                                                                                             
  (loss)/income per ordinary                                                                                                  
  share......................     (0.23)      (0.74)        (0.02)         (0.45)          0.08          (0.39)          0.29 
Fully diluted net                                                                                                             
  (loss)/income per ADS......     (0.69)      (2.23)        (0.06)         (1.36)          0.25          (1.16)          0.88 
Weighted average ordinary                                                                                                     
  shares                                                                                                                      
  outstanding--basic.........   102,560     143,786       203,316        185,153        234,045        244,699        252,497 
Weighted average ordinary                                                                                                     
  shares outstanding--fully                                                                                                   
  diluted....................   102,560     143,786       203,316        185,153        242,806        244,699        260,345 

                                                        [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,  DECEMBER 31,
                               1996(1)     1997(1)      1997(1)        1998(1)         1999          2000    
                              ----------  ----------  ------------   ------------  ------------  ------------
                                                       (IN THOUSANDS)                                        
                                                                                                             
BALANCE SHEET DATA:                                                                                          
Cash and cash equivalents....  $ 54,552   $ 110,099     $ 59,917       $ 52,973      $ 54,082     $   46,598 
Other current assets.........    71,417      84,297      123,871        193,325       197,224        317,391 
Long term assets.............   251,803     238,995      482,498        627,307       636,457        640,743 
Total assets.................   377,772     433,391      666,286        873,605       887,763      1,004,732 
Current liabilities..........    74,809      54,805       70,542         81,288       172,820        111,413 
Long term debt, including                                                                                    
  capital lease                                                                                              
  obligations................    11,377       7,630       25,636        126,774       126,314        126,364 
Other long term                                                                                              
  liabilities................    11,104       3,412        3,492          2,229         1,345         14,196 
Shareholders' equity.........   280,482     367,544      566,616        663,314       587,284        752,759 
Total liabilities and                                                                                        
  shareholders' equity.......   377,772     433,391      666,286        873,605       887,763      1,004,732 

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   
 financial position as at June 30, 1996 and 1997 and December 31, 1997 and
1998 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 three
years up through and including the year ended December 31, 2000 has been derived
from BioChem's audited consolidated financial statements and the notes to such  
financial statements incorporated by reference into this Proxy Statement. The   
summary financial information for the years ended December 31, 1997 and 1996    
have been derived from BioChem's audited consolidated financial statements and  
the notes to those financial statements. The summary 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 2000 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,
                                                    1996           1997           1998           1999           2000    
                                                ------------   ------------   ------------   ------------   ------------
                                                    (IN THOUSANDS OF CANADIAN DOLLARS EXCEPT PER SHARE INFORMATION)     
                                                                                                                        
INCOME STATEMENT DATA:                                                                                                  

CANADIAN GAAP                                                                                                           
Revenues.......................................    89,735        162,860        224,965        290,275        325,124   
Earnings/(loss) from continuing operations.....    27,722         77,680        117,898        167,199        299,451   
Net income/(loss)..............................    33,394         79,838        114,774        149,102        299,451   
Basic earnings/(loss) per common share(1)                                                                               
--continuing operations........................      0.26           0.72           1.09           1.59           2.95   
--net income...................................      0.31           0.74           1.06           1.42           2.95   
Fully diluted earnings/(loss) per common                                                                                
  share(1)                                                                                                              
--continuing operations........................      0.26           0.72           1.09           1.57           2.87   
--net income...................................      0.31           0.74           1.06           1.41           2.87   
Weighted average number of common shares                                                                                
  outstanding(1)                                                                                                        
--basic........................................   106,485        108,153        108,443        105,313        101,240   
--fully diluted................................   110,709        114,229        115,174        111,945        108,135   
                                                    (IN THOUSANDS OF CANADIAN DOLLARS EXCEPT PER SHARE INFORMATION)     
U.S. GAAP                                                                                                               
Revenues.......................................                                 209,934        275,921        295,284   
Earnings/(loss) from continuing operations.....                                  (8,299)       156,763        258,683   
Net income/(loss)..............................                                 (10,063)       139,013        258,683   
Basic earnings/(loss) per common share (1)                                                                              
--continuing operations........................                                   (0.08)          1.49           2.55   
--net income...................................                                   (0.09)          1.32           2.55   
Fully diluted earnings/(loss) per common share                                                                          
  (1)                                                                                                                   
--continuing operations........................                                   (0.08)          1.49           2.51   
--net income...................................                                   (0.09)          1.32           2.51   
Weighted average number of common shares                                                                                
  outstanding(1)                                                                                                        
--basic........................................                                 108,443        105,313        101,240   
--fully diluted................................                                 110,447        106,974        102,978   

                                                        [Enlarge/Download Table]

                                                  AS AT         AS AT          AS AT          AS AT         AS AT    
                                               DECEMBER 31,  DECEMBER 31,   DECEMBER 31,   DECEMBER 31,  DECEMBER 31,
                                                   1996          1997           1998           1999          2000    
                                               ------------  ------------   ------------   ------------  ------------
                                                                 (IN THOUSANDS OF CANADIAN DOLLARS)                  
                                                                                                                     
BALANCE SHEET DATA:                                                                                                  

CANADIAN GAAP                                                                                                        
Total assets..................................    573,191       659,191        632,562        624,717       868,061  
Long term debt excluding current portion......     14,282        11,914         12,470        124,614         8,550  
Shareholders' equity..........................    415,832       498,068        478,621        376,864       684,840  
                                                                 (IN THOUSANDS OF CANADIAN DOLLARS)                  
U.S. GAAP                                                                                                            
Total assets..................................                                 627,428        612,196       816,730  
Long term debt excluding current portion......                                  12,470        124,614         8,550  
Shareholders' equity..........................                                 473,487        364,343       633,509  

NOTES                                                                           

1.  The data stated above give retroactive effect to a two-for-one common stock 
split that 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 December 31, 2000 assuming that   
the proposed merger occurred as of December 31, 2000. The unaudited pro forma   
statements for the years ended December 31, 2000, 1999 and 1998 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 date.                             

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UNAUDITED PRO FORMA COMBINED CONDENSED INCOME STATEMENT 
YEAR ENDED DECEMBER 31, 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 
                                          $         CAN$(1)       $(2)       $(3)/(4)        $(6)          $           $     
                                      ----------  -----------   ---------   -----------   ----------   ----------  ----------
                                                       (IN THOUSANDS, EXCEPT PER SHARE AND PER ADS AMOUNTS)                  
                                                                                                                             
Total revenue.......................    517,608     325,124      198,478          --       (40,941)     157,537      675,145 
Operating expenses..................   (395,344)   (136,152)     (97,027)    (31,427)           15     (128,439)    (523,783)
Operating income/(loss).............    122,264     188,972      101,451     (31,427)      (40,926)      29,098      151,362 
Interest income.....................      6,216          --       11,738          --         1,260       12,998       19,214 
Interest expense....................    (12,187)         --       (4,226)         --            --       (4,226)     (16,413)
Other income/(expenses), net........       (105)    124,402      101,335       3,982            --      105,317      105,212 
Income/(loss) before income taxes...    116,188     313,374      210,298     (27,445)      (39,666)     143,187      259,375 
Income taxes........................    (40,017)    (13,923)      (8,507)         --           876       (7,631)     (47,648)
Net income/(loss) from continuing                                                                                            
  operations........................     76,171     299,451      201,791     (27,445)      (38,790)     135,556      211,727 
Earnings/(loss) from continuing                                                                                              
  operations per ordinary share                                                                                              
--basic.............................      $0.30    CAN$2.95           --          --            --        $1.34              
--diluted...........................      $0.29    CAN$2.87           --          --            --        $1.32              
Weighted average ordinary shares                                                                                             
  outstanding                                                                                                                
--basic.............................    252,497     101,240           --          --            --      101,240              
--diluted...........................    260,345     108,135           --      (5,157)           --      102,978              
Pro forma information based on                                                                                               
  exchange ratio of 1.8814 (2)                                                                                               
Pro forma earnings/(loss) from                                                                                               
  continuing operations per ordinary                                                                                         
  share                                                                                                                      
--basic.............................                                                                                   $0.48 
--diluted...........................                                                                                   $0.47 
Pro forma weighted average ordinary                                                                                          
  shares outstanding                                                                                                         
--basic.............................                                                                                 442,971 
--diluted...........................                                                                                 454,088 
Pro forma information based on                                                                                               
  exchange ratio of 2.3517                                                                                                   
Pro forma earnings/(loss)from                                                                                                
  continuing operations per ordinary                                                                                         
  share                                                                                                                      
--basic.............................                                                                                   $0.43 
--diluted...........................                                                                                   $0.43 
Pro forma weighted average ordinary                                                                                          
  shares outstanding                                                                                                         
--basic.............................                                                                                 490,584 
--diluted...........................                                                                                 492,363 
Pro forma information based on                                                                                               
  exchange ratio of 1.5678                                                                                                   
Pro forma earnings/(loss) from                                                                                               
  continuing operations per ordinary                                                                                         
  share                                                                                                                      
--basic.............................                                                                                   $0.51 
--diluted...........................                                                                                   $0.50 
Pro forma weighted average ordinary                                                                                          
  shares outstanding                                                                                                         
--basic.............................                                                                                 411,222 
--diluted...........................                                                                                 421,794 

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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   
                                       $         CAN$(1)        $(2)      $(3)/(4)        $(6)          $             $       
                                   ----------  ------------   --------   -----------   ----------   ----------  --------------
                                                      (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 (2)                                                                                                
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   
                                       $        CAN$(1)        $(2)       $(3)/(4)        $(6)          $            $       
                                   ---------  ------------   ---------   -----------   ----------   ---------  --------------
                                                      (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)          --       (4,383)     (72,437)     (358,185)  
Operating income/(loss)..........    23,236      125,949       73,439           --      (18,955)      54,484        77,720   
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          (86)          --        4,575         5,015   
Income/(loss) before income                                                                                                  
  taxes..........................    23,563      125,949       84,617          (86)     (16,282)      68,249        91,812   
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          (86)     (15,825)      63,575        84,147   

Earnings/(loss) from continuing                                                                                              
  operations per ordinary share                                                                                              
--basic..........................     $0.09     CAN$1.09           --           --           --        $0.59                 
--diluted(9).....................     $0.08     CAN$1.09           --           --           --        $0.58                 
Weighted average ordinary shares                                                                                             
  outstanding                                                                                                                
--basic..........................   234,045      108,443           --           --           --      108,443                 
--diluted(9).....................   242,806      115,174           --       (4,727)          --      110,447                 

Pro forma information based on                                                                                               
  exchange ratio of 1.8814 (2)                                                                                               
Pro forma earnings/(loss) from                                                                                               
  continuing operations per                                                                                                  
  ordinary share                                                                                                             
--basic..........................                                                                                    $0.19   
--diluted........................                                                                                    $0.19   
Pro forma weighted average                                                                                                   
  ordinary shares outstanding                                                                                                
--basic..........................                                                                                  438,069   
--diluted........................                                                                                  450,601   

Pro forma information based on                                                                                               
  exchange ratio of 2.3517                                                                                                   
Pro forma earnings/(loss) from                                                                                               
  continuing operations per                                                                                                  
  ordinary share                                                                                                             
--basic..........................                                                                                    $0.17   
--diluted........................                                                                                    $0.17   
Pro forma weighted average                                                                                                   
  ordinary shares outstanding                                                                                                
--basic..........................                                                                                  489,069   
--diluted........................                                                                                  502,544   

Pro forma information based on                                                                                               
  exchange ratio of 1.5678                                                                                                   
Pro forma earnings/(loss) from                                                                                               
  continuing operations per                                                                                                  
  ordinary share                                                                                                             
--basic..........................                                                                                    $0.21   
--diluted........................                                                                                    $0.20   
Pro forma weighted average                                                                                                   
  ordinary shares outstanding                                                                                                
--basic..........................                                                                                  404,061   
--diluted........................                                                                                  415,965   

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UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
AS AT DECEMBER 31, 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   
                                          $         CAN$         $         $ (5)        $ (6)         $             $       
                                      ----------  ---------  ---------  -----------   ----------  ----------  --------------
                                                                         (IN THOUSANDS)                                     
                                                                                                                            
ASSETS                                                                                                                      
Current assets:                                                                                                             
Cash and current investments........    186,343    416,084    277,362           -            -     277,362        463,705   
Accounts receivable, net............     93,830     75,604     50,398           -            -      50,398        144,228   
Inventories, net....................     47,109      3,754      2,502           -            -       2,502         49,611   
Other current assets................     36,707      2,473      1,648           -            -       1,648         38,355   
Total current assets................    363,989    497,915    331,910           -            -     331,910        695,899   
Property, plant and equipment,                                                                                              
  net...............................     49,685    127,867     85,236      (4,071)           -      81,165        130,850   
Intangible assets, net..............    556,013     84,822     56,542     (29,915)        (560)     26,067        582,080   
Other assets........................     35,045    157,457    104,961           -            -     104,961        140,006   
Total assets........................  1,004,732    868,061    578,649     (33,986)        (560)    544,103      1,548,835   

LIABILITIES AND SHAREHOLDERS' EQUITY                                                                                        
Current liabilities:                                                                                                        
Current installments of long term                                                                                           
  debt..............................      1,448    120,560     80,365           -            -      80,365         81,813   
Accounts payable and accrued                                                                                                
  expenses..........................     99,437     54,111     36,070           -            -      36,070        135,507   
Other current liabilities...........     10,528          -          -           -            -           -         10,528   
Total current liabilities...........    111,413    174,671    116,435           -            -     116,435        227,848   
Long term debt, including capital                                                                                           
  lease obligations.................    126,364      8,550      5,699           -            -       5,699        132,063   
Other long term liabilities.........     14,196          -          -           -            -           -         14,196   
Shareholders' equity................    752,759    684,840    456,515     (33,986)        (560)    421,969      1,174,728   
Total liabilities and shareholders'                                                                                         
  equity............................  1,004,732    868,061    578,649     (33,986)        (560)    544,103      1,548,835   

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

NOTES                                                                           

1.  The Canadian GAAP condensed financial information presented in thousands of 
Canadian dollars as of December 31, 2000 and for the years ended        
December 31, 1998, 1999 and 2000 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 US 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]

                                                            YEAR ENDED         YEAR ENDED         YEAR ENDED    
US DOLLARS PER CAN$1.00                                  DECEMBER 31, 1998  DECEMBER 31, 1999  DECEMBER 31, 2000
-----------------------                                  -----------------  -----------------  -----------------
                                                                                                                
--weighted average......................................      0.6743             0.6730             0.6732      
--period end............................................      0.6534             0.6929             0.6666      

(i) For the translation of CliniChem, which was formed during 1998, 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]

                                                                YEAR ENDED         YEAR ENDED         YEAR ENDED    
INCOME STATEMENT DATA                                        DECEMBER 31, 1998  DECEMBER 31, 1999  DECEMBER 31, 2000
---------------------                                        -----------------  -----------------  -----------------
                                                                                 (IN THOUSANDS)                     
                                                                                                                    
Deferred charges (a)........................................           --            (3,128)             (4,482)    
Share of loss in a company subject to                                                                               
  significant influence (b).................................           --            (3,496)              3,496     
Deferred foreign exchange losses (c)........................          (86)             (400)                486     
In process research and development (d).....................           --                --             (26,945)    
                                                                  -------            ------             -------     
                                                                      (86)           (7,024)            (27,445)    

                                                                [Download Table]

                                                                   AS AT      
                                                               DECEMBER 31,   
BALANCE SHEET DATA                                                 2000       
------------------                                           -----------------
                                                              (IN THOUSANDS)  
                                                                              
Deferred charges--related to property plant and equipment                     
  (a).......................................................       (4,071)    
Deferred charges (a)........................................       (3,465)    
Discontinued operations (e).................................          231     
In process research and development (d).....................      (26,681)    
                                                                  -------     
                                                                  (33,986)    

(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 pro forma income statement under the
caption "Operating expenses".                                     
     Adjustments (b) and (d) above 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 year ended December 31,
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) In process research and development                                 
  As stated in FASB Interpretation (FIN) No. 4, "Applicability of FASB
 Statement No. 2 Business Combinations Accounted for by the Purchase
     Method", any identifiable assets of the acquiree to be used in research
      and development projects that do not also have an alternative future use
       should be first valued as part of the purchase price allocation, and then
    charged to expense of the acquiring company. The acquired research and
    development relates to the acquisition of CliniChem as at December 15,
2000. For further information on CliniChem, see note 6 below.     

(e) Discontinued operations                                             
      For discontinued operations, the same principles as described in (c) for
deferred foreign exchange losses would apply under U.S. GAAP.     

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  

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    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.                            
CONSOLIDATION OF CLINICHEM                                              
 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 BioChem's 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 conforms with the later guidance issued under EITF 99-16.
On December 15, 2000 BioChem reacquired CliniChem and accounted for the 
acquisition using purchase accounting.                                  
The adjustments listed below represent the effects from:                

(a) consolidating the financial position and results of operations of   
CliniChem;                                                        

(b) eliminating intercompany licensing revenues and costs; and          

  (c) recording accumulated deficits incurred by CliniChem during the period
that it was not consolidated.                                     

                                                        [Enlarge/Download Table]

                                                            YEAR ENDED         YEAR ENDED         YEAR ENDED    
                                                         DECEMBER 31, 1998  DECEMBER 31, 1999  DECEMBER 31, 2000
                                                                 $                  $                  $        
                                                         -----------------  -----------------  -----------------
                                                                             (IN THOUSANDS)                     
                                                                                                                
Total revenue...........................................      (14,572)           (49,973)           (40,941)    
Operating expenses......................................       (4,383)                --                 15     
                                                              -------            -------            -------     
Operating income/(loss).................................      (18,955)           (49,973)           (40,926)    
Interest income.........................................        2,673              3,542              1,260     
                                                              -------            -------            -------     
Income/(loss) before income taxes.......................      (16,282)           (46,431)           (39,666)    
Income taxes............................................          457                899                876     
                                                              -------            -------            -------     
Net income/(loss) from continuing operations............      (15,825)           (45,532)           (38,790)    

                                                                [Download Table]

                                                               AS AT      
                                                           DECEMBER 31,   
                                                               2000       
                                                               $'000      
                                                         -----------------
                                                                          
Shareholders' equity....................................      $  (560)    
                                                              -------     

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     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$              $ *             $           $    
----------------------                                  ---------------  ---------------   ----------  ---------
                                                                             (IN THOUSANDS)                     
                                                                                                                
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)
                                                            -------          -------         ------     ------- 

Year ended December 31, 2000                                                                                    
  Total revenue........................................       1,894            1,275         (1,275)         -- 
  Operating expenses...................................     (59,515)         (40,065)          (861)    (40,926)
                                                            -------          -------         ------     ------- 
  Operating loss.......................................     (57,621)         (38,790)        (2,136)    (40,926)
  Interest income......................................          --               --          1,260       1,260 
                                                            -------          -------         ------     ------- 
  Loss before income taxes.............................     (57,621)         (38,790)          (876)    (39,666)
  Income taxes.........................................          --               --            876         876 
                                                            -------          -------         ------     ------- 
  Net loss.............................................     (57,621)         (38,790)            --     (38,790)
                                                            -------          -------         ------     ------- 

Goodwill has been calculated as follows:                                

                                                                [Download Table]

                                                             CAN$'000    $'000  
                                                             ---------  --------
                                                                                
Purchase price..............................................   48,286    32,187 
Share of loss of CliniChem until December 14, 2000..........   (5,659)   (3,772)
                                                              -------    ------ 
                                                               42,627    28,415 
                                                              -------    ------ 
Cash........................................................   11,241     7,493 
Non-cash working capital....................................  (10,400)   (6,933)
Acquired commercialized products............................    1,759     1,174 
Acquired in-process research and development................   40,027    26,681 
                                                              -------    ------ 
                                                               42,627    28,415 
                                                              -------    ------ 

This allocation is of a preliminary nature and may change on further  
analysis of the purchase price.                                       

As CliniChem was consolidated by BioChem effective December 15, 2000, 
 CliniChem's total assets less total liabilities of $560,000 needs to be
reversed.                                                             

 The cash contribution made by BioChem to CliniChem's capital during the
year ended December 31, 2000 was recorded as a contributed surplus by 
CliniChem. The total amount recorded was net of transaction costs of  
$4,383,000 (CAN$6,500,000). To conform to Shire's accounting policies,
   these costs have been recorded in the income statement for the year ended
December 31, 1998.                                                    

*   Translation of Canadian dollars into U.S. dollars has been performed        
according to the method set out in note 2 above.                        

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                                                               

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  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 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 $100 million.          

11. Refinancing of debt has not been reflected in the unaudited pro forma       
    combined income statements and balance sheet as Shire has not yet determined
whether to repay the amounts outstanding under its credit facility.     

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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). 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]

                                                            YEAR ENDED DECEMBER 31, 2000                
                                             -----------------------------------------------------------
                                               SHIRE         BIOCHEM      PRO FORMA   BIOCHEM EQUIVALENT
                                             HISTORICAL   HISTORICAL(1)   COMBINED       PRO FORMA(2)   
                                             ----------   -------------   ---------   ------------------
                                                                                                        
Basic earnings per ordinary share...........    $0.30         $1.34         $0.48           $0.90       
Diluted earnings per ordinary share.........     0.29          1.32          0.47            0.88       
Basic earnings per ADS......................     0.91            --          1.43            2.70       
Diluted earnings per ADS....................     0.88            --          1.40            2.63       
Book value per ordinary share(3)............     2.93          4.15          2.62            4.93       
Book value per ADS..........................     8.78            --          7.87           14.80       

                                                        [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)     

                                                        [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         $ 0.63        $0.20           $0.38       
Diluted earnings per ordinary share.........     0.08           0.62         0.20            0.37       
Basic earnings per ADS......................     0.26             --         0.61            1.14       
Diluted earnings per ADS....................     0.25             --         0.59            1.11       

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.             

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 December 31, 2000 is 448,003,678.      

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MARKET PRICE INFORMATION                                                        

 Shire ADSs are quoted 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 LSE     
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. On    
that date the closing price per BioChem ordinary share was $26 1/2 and          
CAN$40.00. On February 27, 2001, the closing price per Shire ADS was $56 1/8 and
the closing mid-market quotation per Shire ordinary share was L13.15. On that   
date the closing price per BioChem share was $35 11/16 and CAN$54.45.           

On February 27, 2001, there were approximately 22,368,856 issued and    
outstanding ADSs and 257,521,218 ordinary shares in issue, including ordinary   
shares underlying ADSs. On that date, approximately 96% of the ADSs were held in
the US by approximately 390 record holders, one of which is The Depository Trust
Company. On February 27, 2001, there were approximately 101,552,086 issued and  
outstanding shares of BioChem common stock, of which 66.98% were held in the US 
by 78 record holders.                                                           

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SHAREHOLDERS ENTITLED TO VOTE AND SHARES OUTSTANDING

   Only shareholders of record at 6:00 p.m. on March 27, 2001 will be entitled
to vote at the meeting. On February 27, 2001 there were 257,521,218 Shire       
ordinary shares, nominal value 5p each, outstanding and carrying rights to vote 
at the extraordinary general meeting. On February 27, 2001, approximately       
67,106,508 Shire ordinary shares were held in the name of Guarantee Nominees    
Limited, as nominee for Morgan Guaranty Trust Company of New York as depositary,
which issues Shire 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 holder 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 holder.  
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, England not later than 3:00 p.m. March 27, 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    
March 23, 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 March 23, 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
(the "SEC") 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 Shire at Shire's principal executive office no later than   
March 1, 2001.                                                                  

   The cost of soliciting proxies in the form enclosed will be borne by Shire.
In addition to the solicitation by mail, proxies may be solicited personally, or
by telephone, or by employees of Shire. Shire 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 260,621,527 ordinary shares (but in any event the number
of ordinary shares we issue shall be less than the total number of Shire issued 
ordinary shares at the closing of the merger) 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    
including any shares to be issued pursuant to the exercise of options under the 
BioChem Stock Option Plans or other rights and any new BioChem shares which may 
be issued in certain circumstances as a result of the exercise by BioChem       
shareholders of their statutory dissent rights under Canadian law. See "The     
Merger--Anticipated Accounting Treatment and Effects."). 260,621,527 ordinary   
shares would represent approximately 49.5% of the outstanding ordinary shares on
a fully-diluted basis as of February 23, 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 260,621,527  
ordinary shares (but in any event the number of ordinary shares we issue shall  
be less than the total number of Shire issued ordinary shares at the closing of 
the merger), 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 including any shares to be
issued pursuant to the exercise of options under the BioChem Stock Option Plans 
or other rights and any new BioChem shares which may be issued in certain       
circumstances as a result of the exercise by BioChem shareholders of their      
statutory dissent rights under Canadian law. See "The Merger--Anticipated       
Accounting Treatment and Effects."). 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                                            

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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
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 AND
OBTAINING THIRD PARTY TECHNOLOGY AND PATENTS.                                   

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
on 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  
commercialize 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 commercialize its                                                            

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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.                                                                        

   SOME OF BIOCHEM'S PATENT APPLICATIONS HAVE BEEN CONTESTED BY THIRD PARTIES.

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 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 US alleging 
infringement from the commercialization 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.    

BIOCHEM MAY NOT BE SUCCESSFUL IN OPPOSING PATENT APPLICATIONS OF THIRD  
PARTIES IN AREAS THAT ARE USEFUL OR NECESSARY TO BIOCHEM'S BUSINESS.            

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                                                                     

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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 claims 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. 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 US.                                         

BioChem is aware that others, including various universities and        
biotechnology companies, have also filed patent applications or have obtained   
granted patents in the US 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 commercializing its products.                                      

BIOCHEM MAY HAVE TO RESORT TO LEGAL PROCEEDINGS IN ORDER TO DEFEND ITS  
PATENTS.                                                                        

  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                                                                              

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determine the priority of invention, BioChem may also have to participate in    
interference proceedings declared by the USPTO, which could result in           
substantial cost to BioChem.                                                    

    Under US 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  
US patent on a particular technology, only acts in the US (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 US    
patents, as compared to companies that maintained research facilities in the US.

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 US 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            
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   
organizations. 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.               

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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, 2000 on Form 10-K, which is incorporated 
by reference in this Proxy Statement.                                           

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DESCRIPTION OF BIOCHEM

    BioChem is an international specialty pharmaceutical company involved in the
research and development and commercialization 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/Epivir 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 $863.5 million in 2000. 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 $106.9 million in 2000. 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 US. 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 patient adherence
to therapy schedules. 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's frakefamide, a product developed for use in 
the control of pain, is also in Phase II trials.                                

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.                                                                    

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  On March 15, 2000, BioChem announced that it had completed the divestiture
of its diagnostics division, BioChem ImmunoSystems Inc. ("ImmunoSystems").      
ImmunoSystems' minority shareholder 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.   
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,   
ImmunoSystems, 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  
BioChem shareholders 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 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 December 31, 2000, BioChem had a total of 476 employees.          

THERAPEUTIC PRODUCTS                                                            

    BioChem's 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 partnerships and strategic alliances (see "Significant Agreements").    

  BioChem shares commercialization rights for 3TC, Combivir 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.             

For frakefamide, in the pain control area, BioChem has established a    
partnership with AstraZeneca plc.                                               

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The following table represents BioChem's products and products under    
development in therapeutics:                                                    

                                                        [Enlarge/Download Table]

          PRODUCT/CANDIDATE                  INDICATION                DEVELOPMENT STATUS*             COMMERCIAL RIGHTS   
-------------------------------------  ----------------------  -----------------------------------  -----------------------
                                                                                                                           
3TC/Epivir                             HIV/AIDS                On the market                        BioChem/GlaxoSmithKline
Combivir                               HIV/AIDS                On the market                        BioChem/GlaxoSmithKline
Trizivir                               HIV/AIDS                On the market                        BioChem/GlaxoSmithKline
Zeffix/Epivir-HBV/Heptovir/Heptodin    Hepatitis B infection   On the market                        BioChem/GlaxoSmithKline
PACIS                                  Bladder cancer          On the market                        BioChem                
Troxatyl                               Cancer                  In development--Phase II             BioChem                
Frakefamide                            Pain control            In development--Phase II             BioChem/AstraZeneca    
BCH-10618                              HIV/AIDS                In development--pre-clinical         BioChem                
BCH-13520                              HIV/AIDS                In development--pre-clinical         BioChem                
Caspase Activators                     Cancer                  Lead optimization                    BioChem                
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. "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.                 

HIV INFECTION/AIDS                                                      

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 (the "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% 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 associated deaths in a single year 
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 (such as 3TC) 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 US on November 17, 1995,    
where it                                                                        

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is marketed as Epivir. Approval in Canada shortly followed on December 8, 1995. 
The Committee on Proprietary Medicinal Products ("CPMP") and the European       
Medicines Evaluation Agency (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 (zidovudine) 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 EMEA 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 patient adherence to therapy schedules. 
On November 15, 2000, the FDA authorized the marketing of Trizivir in the US. On
January 4, 2001, the European Commission authorized the marketing of Trizivir in
the 15 member states of the European Union. In the US, 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, 3TC and 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.     
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 ("NNRTIs").                                            

  3TC is available for sale and marketing in approximately 100 countries and
is the most widely prescribed medication for HIV infection 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.                                                                 

 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 the 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.                            

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PRODUCTS 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-13520 and       
BCH-10618.                                                                      

A) BCH-13520                                                            

BCH-13520 is a novel anti-HIV NRTI in 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 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 Investigational New Drug ("IND") to begin  
Phase I trials in the third quarter of 2001.                                    

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B) BCH-10618 ((-)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.                                                     

HEPATITIS B                                                             

MARKET                                                                  

Hepatitis B virus ("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 the     
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 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 US has increased.                             

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    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. Moreover,   
alpha interferon has poorer 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 of hepatitis B patients 
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 US, as Heptovir in Canada, Heptodin in China and 
Zefix in Japan) 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 US. 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 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 the
long term Asian trial who had a                                         

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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 demonstrate a regression in     
 cirrhosis in 64% of patients with pre-existing cirrhosis following two or
more years of treatment with Zeffix. The study's findings 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 Be 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 indicates 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.

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,                                            

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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 Zefix in Japan. Provision of
drug information to medical institutions regarding Zefix 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.                 

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 analgesic market is divided into   
the following categories: non-steroidal anti-inflammatories ("NSAIDs"),         
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
and other disorders such as neuralgias and neuropathies) has been described as  
one of the most costly health problems in the US. 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 that 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.                                                                   

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  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 (the "CNS"). The traditionally held  
view was that opioid analgesia was 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 that have 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. In 1999, AstraZeneca    
initiated Phase II clinical trials to evaluate the analgesic potential of       
frakefamide.                                                                    

In general, opioids and morphine, in particular, remain the most common 
treatment for pain following surgery, but in recent years, parenteral 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 this  
setting. The Phase II studies should be completed in the second quarter of 2001,
and additional clinical trial programs with the injectable (i.v.) formulation in
the management of post-operative pain are planned to be initiated thereafter.   

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.                                                                        

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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 $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--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 synthesized 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 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 and 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                                                                           

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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.                    

LEAD OPTIMIZATION PROJECTS                                              

A) 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.                                 

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.      

B) CASPASE ACTIVATORS                                                   

A collaboration was entered into on July 10, 2000 between Maxim         
Pharmaceuticals Inc. and BioChem covering a series of anticancer compounds      
discovered by Cytovia, Inc., a wholly-owned subsidiary of Maxim Pharmaceuticals 
Inc.                                                                            

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  This series of small-molecule compounds (CV 2105), currently in late-stage
research, was identified by Cytovia's proprietary high-throughput apoptotic     
screening technology. The compounds have been shown to be potent and efficacious
activators of specific caspase activity. Caspases are key enzymes that modulate 
and carry out the cellular signaling pathways involved in apoptosis (programmed 
cell death).                                                                    

C) ANGIOLYTICS                                                          

Cell adhesion, the process whereby cells adhere to each other 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 entered into a collaboration on August 17, 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 known 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 for not only preventing angiogenesis, but also        
possibly reversing tumor angiogenesis by destroying existing tumor blood        
vessels.                                                                        

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 CDC, 10,000  
people died as a result of HCV related complications in 1996 in the US.         
Currently, there are 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 PROJECT                                                  

  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
an NS5B polymerase. It has been shown that these enzymes are essential for viral
replication; hence, inhibition of these enzymes should lead to drug             

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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 has 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 towards the end of 2001 or the first half of 2002.            

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. Two organisms, methicillin-resistant      
STAPHYLOCCUS AUREUS and vancomycin-resistant Enterococcus, represent specific   
high priority therapeutic targets.                                              

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.                                                          

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    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 may emerge
for Group B Streptococcus, non-typeable H. INFLUENZAE, M. CATARRHALIS and Group 
A Streptococcus.                                                                

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/Cytovax          
  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. "Research" includes exploratory       
biology and chemistry, development of screening assays, high throughput 
   screening, DE NOVO product design and synthesis. Please see the footnote to
the table on the therapeutic products 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, the 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. This alliance covers the development of two technologies: a new   
way of producing the vaccine antigen using cell culture and an                  

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intranasal delivery of influenza vaccine technology. 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 US, 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 US 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 
any 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.                                                           

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 CHUL, 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 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,                                                

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N. MENINGITIDIS is becoming the most common cause of bacterial meningitis in the
US, 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 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                              

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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, eyes and ears,              
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. Cytovax's proprietary "Anti-Adhesion Platform    
Technology" could prevent infection by blocking the adhesion of pathogens onto  
human mucosal cells. Based on the pili tip sequences, Cytovax has developed a   
consensus sequence peptide vaccine which can elicit protective immunity against 
experimental infection. Cytovax and BioChem are collaborating in research,      
analytical, process, clinical and regulatory issues.                            

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 US, there are over     
3,000 cases annually of invasive GBS infections in newborns, with a mortality   
rate of 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 non-encapsulated, 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 the 500,000 hospital admissions annually in the US). 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  
US alone. Other groups are developing protein                                   

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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 1999 to develop the technology into products and 
to commercialize the products on a worldwide basis. CADx develops 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. Potential applications of this technology platform currently being    
investigated include cardiovascular disease diagnostic, drug design, lead       
optimization and genomics.                                                      

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.                  

 The product is currently completing clinical trials in the US 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 US 
alone. BioChem's cognitive systems technology should enhance the currently      
subjective interpretation of imaging and non-imaging data by providing nuclear  
cardiologists with a second look. Development of concept and initiation of      
requirements documents and prototype work will be the primary focus in 2001.    

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COMPUTER AIDED DRUG DESIGN                                              

There are significant opportunities for companies that can improve the  
efficiency of drug and vaccine discovery utilizing cognitive systems. BioChem   
believes 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 NAVA. 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 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 of GeneChem Technologies Venture Fund L.P. and GeneChem         
Therapeutics Venture Fund L.P. are respectively GeneChem Enterprise Inc. and    
GeneChem Therapeutics Inc., two indirect subsidiaries of BioChem, and the       
manager of each is GeneChem Management Inc., also an indirect subsidiary 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.       

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GLAXOSMITHKLINE (LAMIVUDINE)                                            

  Through 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"). BioChem and GlaxoSmithKline's Canadian subsidiary,               
GlaxoSmithKline Inc., entered into a partnership to supply, market and sell     
lamivudine in Canada. GlaxoSmithKline has agreed to manufacture all the required
lamivudine to be supplied by the partnership in Canada.                         

In consideration for the grant of such rights, GlaxoSmithKline agreed to
undertake and fund the development of lamivudine and 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 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 US, 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 
US 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.        

ASTRAZENECA                                                             

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

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SHIRE AFTER THE MERGER--THE ENLARGED GROUP

OVERVIEW                                                                        

   Following the merger, the Enlarged Group will be one of the world's leading
global specialty pharmaceutical companies with four areas of focus: CNS         
disorders, oncology, 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. 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 ("ADHD"), Epivir, Combivir and Trizivir for the treatment of HIV
    infection/AIDS, Epivir-HBV for the treatment of hepatitis B, 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, which was launched in September 2000; and                  

   - in Canada, Amatine, 3TC, Combivir and Heptovir, marketed in a partnership
  with GlaxoSmithKline, Second Look, a breast cancer diagnostics product
  recently launched in Europe, and for which the Enlarged Group hopes to
receive an FDA approval 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, for which the directors are expecting to shortly announce  
the first regulatory submission for approval, and Troxatyl for the treatment of 
leukemia and solid tumors.                                                      

   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 year ended December 31, 2000 Shire had revenues of $517.6 million
and net income (before an APB 25 stock option charge of $21.9 million) of       
$98.1 million and BioChem had revenues of $157.5 million (stated after          
consolidation of CliniChem) and net income from continuing operations of        
$58.4 million (before a gain on the sale of long term investments of            
$104.0 million and the write off of in-process research and development of      
$26.9 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 organizations 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 Enlarged Group's 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.                                                         

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MANAGE DEVELOPMENT RISK                                                 

   Recognizing 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. The Enlarged Group is anticipated to continue its 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 optimization and chemistry expertise has led to the      
development and commercialization 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. In the   
vaccine area the Enlarged Group intends to continue to research new vaccines.   

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 approximately 460 sales       
representatives. 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 and Republic of Ireland (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/Amatine                 Orthostatic hypotension  Nycomed           Shire/US and Canada                               
PACIS                              Bladder cancer           BioChem           Paladin Labs/Canada                               
ANTIVIRALS                                                                                                                      
3TC/Epivir/Combivir/Trizivir       HIV/AIDS                 BioChem           GlaxoSmithKline/Worldwide, except Canada          
3TC/Combivir                       HIV/AIDS                 BioChem           BioChem and Glaxo-SmithKline co-marketed in Canada
Zeffix/Epivir-HBV/Heptovir/Heptodin Hepatitis B             BioChem           GlaxoSmithKline/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 and certain other European countries     
Colace/Peri-Colace                 Constipation             Shire             Shire/US and Canada                               
COMPUTER ASSISTED DETECTION PRODUCTS                                                                                            
Second Look                        Breast cancer diagnosis  Qualia Computing  BioChem/Worldwide, except US                      

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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 organization or out-licensing if       
appropriate. On a combined basis BioChem and Shire spent approximately          
$160.0 million on research and development in the year ended December 31, 2000, 
which represents approximately 24% 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                     
----------                               -----------------------                  ------                     
                                                                                                             
TREATMENTS FOR CNS DISORDERS                                                                                 

Reminyl (galantamine)(1)                 Alzheimer's disease                      In registration or marketed
SLI381                                   ADHD                                     In registration            
Dirame                                   Moderate/severe pain                     Phase III                  
Frakefamide(2)                           Moderate/severe pain                     Phase II                   
SPD417                                   Bi-polar disorder                        Phase III                  
SPD503                                   ADHD                                     Phase I                    
SPD418                                   Epilepsy                                 Phase I                    
SPD502                                   Stroke                                   Phase I                    
SPD451                                   Parkinson's disease                      Pre-clinical               
SPD420                                   ADHD                                     Phase I                    
SPD421                                   Epilepsy                                 Phase I                    

TREATMENTS FOR METABOLIC DISEASES                                                                            

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

TREATMENTS FOR GASTROENTEROLOGICAL DISORDERS                                                                 

Pentasa (500 mg)                         Ulcerative colitis                       Phase II/III               
Emitasol                                 Nausea and vomiting                      Phase II/III               
Balsalazide                              Ulcerative colitis                       Phase II/III               

TREATMENTS FOR ONCOLOGICAL/HAEMATOLOGICAL DISEASES                                                           

Agrylin                                  Thrombocythemia                          In registration            
Troxatyl                                 Leukemia and solid tumors                Phase II                   
SPD424                                   Prostate cancer                          Phase III                  
SPD427                                   Oncology                                 Pre-clinical               

ANTIVIRALS                                                                                                   

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

VACCINES                                                                                                     

Injectable and nasal influenza vaccine   Influenza                                Phase I/II                 
derived from cell culture(3)                                                                                 
NEISSERIA MENINGITIDIS vaccine           Meningitis, septicemia                   Phase I                    
PSEUDOMONAS AERUGINOSA vaccine           Bacteremia, opportunistic                Pre-clinical               
STREPTOCOCCUS PNEUMONIAE vaccine         Pneumonia, meningitis, otitis media      Pre-clinical               


PRODUCT(S)                               TERRITORIAL RIGHTS                                                  
----------                               ------------------                                                  
                                                                                                             
TREATMENTS FOR CNS DISORDERS                                                                                 
Reminyl (galantamine)(1)                 Global                                                              
SLI381                                   Global                                                              
Dirame                                   Global                                                              
Frakefamide(2)                           Global                                                              
SPD417                                   Global                                                              
SPD503                                   Global                                                              
SPD418                                   Global                                                              
SPD502                                   Global excl. Nordic and Baltic countries                            
SPD451                                   Global                                                              
SPD420                                   Global                                                              
SPD421                                   Global                                                              
TREATMENTS FOR METABOLIC DISEASES                                                                            
Foznol                                   Global                                                              

TREATMENTS FOR GASTROENTEROLOGICAL DISO                                                                      
Pentasa (500 mg)                         US                                                                  
Emitasol                                 US, Canada                                                          
Balsalazide                              Parts of Northern and Western Europe                                
TREATMENTS FOR ONCOLOGICAL/HAEMATOLOGIC                                                                      
Agrylin                                  Global                                                              
Troxatyl                                 Global                                                              
SPD424                                   North America, Europe                                               
SPD427                                   Global                                                              
ANTIVIRALS                                                                                                   
BCH-10618                                Global                                                              
BCH-13520                                Global                                                              
VACCINES                                                                                                     
Injectable and nasal influenza vaccine   North America                                                       
derived from cell culture(3)                                                                                 
NEISSERIA MENINGITIDIS vaccine           Global                                                              
PSEUDOMONAS AERUGINOSA vaccine           Global                                                              
STREPTOCOCCUS PNEUMONIAE vaccine         Global                                                              

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

(1) The licensee is Janssen.                                                    

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

(3) The licensee is Glaxo/SmithKline (except in 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.                                     

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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 March 29, 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 authorized 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 authorized share capital for cash free of pre-emption rights up to a     
nominal amount of L1,279,868.                                                   

   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 extraordinary general meeting. This action 
does not relate to the merger.                                                  

RECORD DATE; VOTING RIGHTS; VOTING AT THE MEETING                               

    The Shire board has fixed 6:00 p.m. on March 27, 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 February 27, 2001, there were 257,521,218 Shire shares      
outstanding and entitled to vote which were held by approximately 9,000 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 or have an interest in shares representing approximately 
3.5% 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, Hampshire International Business Park, Chineham,     
Basingstoke, Hampshire, RG24 8EP, 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: CNS disorders, metabolic 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 those 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 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.                                             

During the course of considering several potential 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, the Chief Executive of Shire, and Dr. Francesco Bellini,
the Chief Executive Officer of BioChem, first met on August 28, 2000 in 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 Group Research & 
Development Director, went to Montreal on September 19, 2000 where he met with  
Dr. Bellini and Dr. Gervais Dionne, the Chief Scientific Officer of BioChem. The
following day, Dr. Totten and Dr. Dionne visited BioChem's Laval site, where    
again they discussed each of their respective research and development          
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 advisor 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 advisor, to Deutsche Bank, Shire's   
financial advisor, relating to specific products, tax, various accounting issues
and patents.                                                                    

On October 6, 2000, Shire convened a meeting of its board. Deutsche Bank
presented to the board on the financial implications of a possible merger,      
preliminary views on value and the rationale for the merger. No conclusions were
possible regarding earnings impact because the financial terms of the possible  
transaction were not then known. Further to permission granted at this board    
meeting, a preliminary non-binding indicative offer letter was sent by Shire to 
BioChem on October 6, 2000. This                                                

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letter confirmed Shire's interest in pursuing a potential business combination  
with BioChem and outlined various parameters of Shire's proposal, including that
the merger offer be structured as an arrangement, an indicative 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% of the outstanding BioChem     
shares and representations, 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, namely       
intellectual property rights and tax matters regarding the proposed transaction,
be addressed and resolved.                                                      

On October 16, 2000, the respective companies' company general counsels 
opened lines of communication with respect to 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 18 and 19, 2000, Shire's Group Finance Director, Mr. Angus   
Russell, Group Finance Controller, Mr. Paul McBarron, and Internal Tax /Treasury
Manager, Mr. Simon Gibbins, visited Montreal to discuss certain tax issues with 
BioChem's tax advisors and BioChem's Chief Financial Officer, Mr. Frederick J.  
Andrew. Further to this meeting, Shire spent some time assessing the possible   
tax structures of the merger.                                                   

    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, 2000 following the completion of initial due         
diligence on the intellectual property and tax issues. This letter confirmed    
Shire's interest in pursuing a potential business combination with BioChem and  
confirmed the various parameters of Shire's proposal, including that the merger 
offer be structured as an arrangement and the other parameters contained in the 
October 6, 2000 letter referred to above.                                       

   On October 29, 2000, a first draft of a 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 then begin. On       
October 30, 2000, BioChem sent a letter to Shire agreeing, among other things,  
to pay $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  
advisors, convened in Montreal on October 31, 2000. From October 31 until       
November 10, 2000, representatives of Shire and its financial, legal and        
accounting advisors conducted due diligence on BioChem both at the offices of   
BioChem's lawyers, Stikeman Elliott, and BioChem's sites in and around Montreal.

  A further Shire board meeting was convened on November 14, 2000 to discuss
the initial findings from the data room and other due diligence enquiries, the  
rationale for the merger, 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. The value to be received by a 
BioChem shareholder was to be established using a fixed exchange ratio. Shire   
also requested that BioChem respond by 5:00 p.m. UK time on November 17, 2000   
which it did, indicating that it was rejecting the Shire offer.                 

    A further offer was sent by Shire to BioChem on November 20, 2000, improving
the non-binding offer that had been set out in Shire's letter of November 14,   
2000 by, in particular, amending the terms of the share exchange to provide for 
a variable exchange ratio within a certain range of Shire's share price prior to
closing. The exchange ratio would be based on a Shire ADS price of $59 which    
would be                                                                        

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adjusted by any variation of Shire's ADS price of up to, plus or minus, 20%,    
based on 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 to the revised Shire offer at
such time, as it had entered a period of exclusivity with a third party which   
was to expire on November 27, 2000. This period of exclusivity with a third     
party subsequently expired, and negotiations with Shire recommenced. On         
November 28, 2000 a further draft of a merger agreement was circulated among the
parties and their counsel. Negotiations on this merger agreement then began on  
November 29, 2000.                                                              

  On December 4, 2000, there was a further Shire board meeting that reported
on continuing negotiations with BioChem.                                        

    On December 5, 2000, BioChem and its team of legal, financial and accounting
advisors began its due diligence on Shire. This due diligence included two days 
(December 5 and 6) spent at Shire's headquarters in Andover, England, two days  
(December 6 and 7) at the New York law offices of Cahill Gordon & Reindel,      
Shire's US counsel, and two days (December 7 and 8) at Shire's offices in       
Florence, Kentucky. Negotiations on the merger agreement continued during this  
period, and during the period between December 5 and December 10 outstanding    
issues were resolved.                                                           

  On December 10, 2000, the legal advisors to Shire and BioChem reviewed and
finalized the merger agreement and other related documentation.                 

The Board of Directors of Shire and BioChem convened board meetings in  
Montreal on December 10, 2000. 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, Stikeman      
Elliott and Torys, special counsel to the BioChem board's ad hoc committee, 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, 2000. On the morning of    
December 11, 2000 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 organization 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 early stage development      
operation through which it has generated a pipeline of projects focused in three
discrete specialty categories: oncology, vaccines and anti-virals.              

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 (the "Deutsche Bank 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.                         

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 The full text of 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 judgments 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 the Deutsche Bank Opinion, Deutsche Bank does not have  
any obligation to update, revise or reaffirm its opinion. Shire imposed no other
instructions or 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                 

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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 Corporation;                                                     

- Forest Laboratories, Inc.;                                            

- ICN Pharmaceuticals, Inc.;                                            

- King Pharmaceuticals, Inc.;                                           

- KV Pharmaceutical Company;                                            

- Medicis Pharmaceuticals Corporation;                                  

- Elan Corporation, plc;                                                

- H. Lundbeck A/S; and                                                  

- Schering AG                                                           

(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                

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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 judgments, 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, Inc./Elan Corporation, plc (September 2000);    

- Pathogenesis Corporation/Chiron Corporation (August 2000);            

- Jones Pharma Incorporated/King Pharmaceuticals, Inc. (July 2000);     

- Roberts Pharmaceutical Corporation/Shire Pharmaceuticals Group plc    
(July 1999); and                                                    

- Agouron Pharmaceuticals, Inc./Warner-Lambert Company (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 Selected
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 merger, and Shire to the pro 
forma income statement of the Enlarged Group, 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 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 Enlarged Group's pro forma net income for each of those three years.        

DISCOUNTED CASH FLOW ANALYSIS.  The merger of BioChem and 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                         

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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 Enlarged Group'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 Enlarged Group 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% to 47.8%, with an average of 37%. Shire     
offered a premium of 39.6% 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 and obtaining third party technology and patents."                   

   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 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  

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Shire, BioChem or their respective advisers, none of Shire, Deutsche Bank or 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 merger.
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% 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 of the Department of Justice and the Federal Trade       
Commission. The required waiting period expired on February 11, 2001.           

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UK ANTITRUST                                                            

In the UK, the Secretary of State for Trade and Industry decided on     
February 27, 2001, on the information before him, and in accordance with the    
recommendation of the Director General of Fair Trading, not to refer the merger 
to the Competition Commission under the provisions of the Fair Trading Act 1973.

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        
$209 million. 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. The value of
assets of BioChem exceeds $209 million and the merger is, therefore, reviewable.

   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. Each of
BioChem and Shire believe that the merger is likely to be of net benefit to     
Canada. A decision of the Minister is anticipated prior to the extraordinary    
general meeting.                                                                

CANADIAN COMPETITION ACT                                                

    The Transaction is a "notifiable transaction" for the purposes of Part IX of
the COMPETITION ACT (CANADA) which means that the transaction cannot be         
consummated until an advance ruling certificate ("ARC") has been issued by the  
Commissioner of Competition or, in the event a short-form pre-merger            
notification is filed, the relevant waiting period of 14 days under Section 123 
of the Competition Act has expired. On January 18, 2001, BioChem and Shire      
submitted a request pursuant to Section 102 of the Competition Act for an ARC to
the Commissioner of Competition. On February 5, 2001, the Commissioner of       
Competition issued the ARC.                                                     

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.                                                                 

ANTICIPATED ACCOUNTING TREATMENT AND EFFECTS                                    

The merger is intended to qualify as a pooling of interests transaction 
under U.S. 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.          
Consummation of the merger is conditional upon receipt by Shire of (a) a pooling
letter from its independent auditors dated as of the effective date to the      
effect that it will be appropriate to account for the arrangement as "pooling of
interests" under United States GAAP and all published rules and regulations of  
the SEC relative to accounting for business combinations and (b) a poolability  
letter from BioChem's                                                           

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independent auditors dated as of the effective date to the effect that BioChem  
qualifies as a combining company for the purpose of pooling of interests        
accounting in accordance with United States GAAP.                               

  The number of new ordinary shares, new ADSs and new exchangeable shares to
be issued pursuant to the merger by Shire might increase as a result of the     
exercise by BioChem shareholders of their statutory dissent rights under        
Canadian law. Such dissent rights confer upon BioChem shareholders the ability  
to dissent from the plan of arrangement to the proposed merger in which event,  
provided the aggregate number of shares held by dissenting BioChem shareholders 
is less than 5% of BioChem's issued share capital, the proposed merger will     
proceed but such shareholders will be entitled to receive fair value            
consideration. In the event that such dissent rights are exercised in respect of
more than 2.4% of BioChem shares, then, in the absence of the issue of shares   
referred to below, the intended pooling of interests accounting treatment of the
merger will not be available. In these circumstances, Shire may request that    
BioChem issue up to 2,634,383 additional BioChem shares (representing           
approximately 2.6% increase over the current issued share capital of BioChem)   
for cash by way of private placement to an independent third party(ies). In such
event, the board of directors of BioChem may, in its entire discretion and if   
deemed appropriate in the circumstances give effect to such request of Shire,   
taking into account the number of options to acquire BioChem shares exercised   
since the date hereof. These shares will then be acquired by Shire pursuant to  
the merger so as to allow the pooling of interests accounting treatment of the  
merger to be available.                                                         

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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 option holders, voting together, subject to any     
conditions prescribed in the interim order 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 corporation incorporated under
the CANADA BUSINESS CORPORATIONS ACT, which is 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 BioChem share:                                           

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

  The exchangeable shares will be issued by Exchangeco and will be listed on
the TSE. 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 meetings of Shire shareholders.                  

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EXCHANGE RATIO                                                                  

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

                                                                [Download Table]

IF THE AVERAGE 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                                 average ADS price and multiplying by
                                       three                               

equal to or greater than $70.80        1.5678                              

 If a BioChem shareholder so elects, or in certain other circumstances, we
will provide such shareholder with one-third of an ADS or one-third of an       
exchangeable 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:                           

- 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;                                           

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- the amendment of corporate governance documents;                      

- 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 benefit 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   
advisers 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 legal 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 promptly to 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 merger are subject to the satisfaction or waiver of a number of 
conditions, including the following:                                            

- the merger 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 merger illegal or
otherwise prohibiting consummation of the merger;                   

   - the waiting periods (and any extensions thereof) applicable to the merger
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 merger and the
Director of Investments under the INVESTMENT CANADA ACT shall have  
   concluded that the merger 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 merger and the other      
transactions contemplated by the merger agreement shall have been   
obtained;                                                           

- the ordinary shares to be issued in the merger and such other ordinary
  shares to be reserved for issuance in connection with the merger shall
 have been admitted to the Official List of the United Kingdom Listing
    Authority and to trading on the LSE, the ADSs to be issued in the merger
  and such other ADSs to be reserved for issuance in connection with the
  merger shall have been approved for quotation 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;         

   - a registration statement relating to the issuance of ordinary shares upon
     exchange of the exchangeable 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 issuance of ordinary shares upon
exchange of the exchangeable shares. No stop order suspending the   
     effectiveness of the registration statement 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 merger; 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 merger 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 and warranties of BioChem
set forth in the merger agreement that is not so qualified shall be 

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     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 by the merger agreement. 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 specified
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 merger (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 merger as a "pooling of 
        interests" under U.S. GAAP, Accounting Principles Board Opinion No. 16
 and all published rules and regulations adopted by the SEC; and

     - 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 merger as a "pooling of interest" under U.S. 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
merger 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 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                                                                 

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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 shareholders have not approved the merger at the BioChem      
shareholder meeting;                                                

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

- a breach by BioChem of any representation, covenant or agreement which
     results in a failure to respect certain conditions to closing in favor of
Shire (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 extraordinary  
general meeting;                                                    

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

- a breach by Shire or Exchangeco of any representation, covenant or    
 agreement which results in a failure to respect certain conditions to
   closing in favor of BioChem (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 adviser, determines that a proposal to acquire BioChem is
      more favorable 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;                                 

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

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THE OPTION AGREEMENT

GENERAL                                                                         

 At the same time of the execution of the merger agreement on December 10,
2000 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 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, 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 BioChem shares 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 to Shire.                                                            

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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, HAMPSHIRE INTERNATIONAL     
BUSINESS PARK, CHINEHAM, BASINGSTOKE, HAMPSHIRE RG24 8EP, ENGLAND. TELEPHONE    
REQUESTS MAY BE DIRECTED TO (44) 1-265-894-000. TO ENSURE TIMELY DELIVERY OF    
DOCUMENTS, PLEASE MAKE YOUR REQUEST NO LATER THAN MARCH 22, 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, 2000; and  

- Proxy Statement for the 2000 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 submitted on the following dates in 2000: 

- January 10;                                                     

- January 26;                                                     

- February 15;                                                    

- March 6;                                                        

- March 9;                                                        

- March 15;                                                       

- April 3;                                                        

- April 11;                                                       

- April 20;                                                       

- April 27;                                                       

- April 28;                                                       

- May 1;                                                          

- May 24;                                                         

- June 19;                                                        

- June 27;                                                        

- July 11;                                                        

- July 18;                                                        

- July 26;                                                        

- August 4;                                                       

- August 28;                                                      

- September 22;                                                   

- October 26;                                                     

- November 1;                                                     

- November 15;                                                    

- November 20;                                                    

- December 1;                                                     

- December 11;                                                    

- December 13;                                                    

- December 18; and                                                

- December 22; and                                                

- Current Reports on Form 6-K submitted on January 10, January 26 and   
February 28, 2001.                                                  

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  Any future filings by Shire under Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act and all subsequent annual reports filed by BioChem on Form 20-F,   
Form 40-F or Form 10-K and all subsequent filings by BioChem on Form 10-Q and   
8-K pursuant to the Exchange Act subsequent to the date of this Proxy Statement 
and prior to the date of the extraordinary 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. BioChem may incorporate by reference any reports submitted by BioChem
on Form 6-K by identifying on such forms that they are being incorporated by    
reference into 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  
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 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 Securities Exchange
Act of 1934, as amended, 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 for the year ended December 31, 2000 on Form 10-K filed by Shire with the
SEC.                                                                            

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TABLE OF CONTENTS 

                                                                [Download Table]

                                                                PAGE  
                                                              --------
                                                                      
SUMMARY.....................................................      1   
General.....................................................      1   
The Companies...............................................      1   
    Shire Pharmaceuticals Group plc.........................      1   
    BioChem Pharma Inc......................................      1   
The Merger and the Merger Agreement.........................      1   
    Exchange Ratio..........................................      2   
    The Exchangeable Shares.................................      2   
The Extraordinary General Meeting...........................      3   
    Date, Time, Place and Purpose...........................      3   
    Record Date; Shares Entitled to Vote....................      3   
    Required Vote...........................................      3   
    Revocability of Proxies.................................      3   
    Benefits of the Merger..................................      3   
    Recommendation of the Board of Directors................      4   
    Reasons for the Merger..................................      5   
    Opinion of Financial Adviser............................      5   
    Appraisal Rights........................................      5   
    Anticipated Accounting Treatment........................      5   
    Conditions to the Merger................................      5   
    Effective Time of the Merger............................      6   
    Termination and Payment of Break Fees...................      6   
    The Option Agreement....................................      6   
    Governmental and Regulatory Matters.....................      6   
    Court Approval..........................................      7   
    Special Resolution......................................      7   
    Summary Historical Consolidated Financial Data of                 
     Shire..................................................      8   
    Summary Historical Consolidated Financial Data of                 
     BioChem................................................      9   
    Summary Unaudited Pro Forma Financial Data..............     10   
    Comparative Per Share Data..............................     19   
SHAREHOLDERS ENTITLED TO VOTE AND SHARES OUTSTANDING........     21   
RISK FACTORS................................................     22   
    Risk Factors Relating to the Merger.....................     22   
    Risk Factors Relating to BioChem........................     22   
    Risk Factors Relating to Shire..........................     27   
DESCRIPTION OF BIOCHEM......................................     28   
    Therapeutic Products....................................     29   
    Vaccine Products........................................     41   
    Computer-Assisted Detection Products....................     46   
    Investments.............................................     47   
    Significant Agreements..................................     47   
SHIRE AFTER THE MERGER--THE ENLARGED GROUP..................     49   
    Overview................................................     49   
    Strategy and Approach...................................     49   
    Sales and Marketing.....................................     50   
    Combined Marketed Products..............................     50   
    Products Under Development..............................     51   
    Drug Delivery Technologies..............................     52   

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                                                                PAGE  
                                                              --------
                                                                      
THE EXTRAORDINARY GENERAL MEETING...........................     53   
    Date, Time, Place and Purpose...........................     53   
    Matters to be Considered at the Extraordinary General             
     Meeting................................................     53   
    Record Date; Voting Rights; Voting at the Meeting.......     53   
    Voting of Proxies.......................................     53   
THE MERGER..................................................     55   
    Background of the Merger................................     55   
    Reasons for the Merger..................................     57   
    Opinion of Shire's Financial Adviser....................     57   
    Governmental Regulation.................................     62   
    Anticipated Accounting Treatment and Effects............     63   
THE MERGER AGREEMENT........................................     65   
    General; Effective Time and Effects of the Merger.......     65   
    Directors of Shire Immediately Following the Merger.....     65   
    Conversion of BioChem Shares............................     65   
    Exchange Ratio..........................................     66   
    Representations and Warranties..........................     66   
    Covenants...............................................     66   
    No Solicitation.........................................     67   
    Conditions to Closing...................................     68   
    Termination and Payment of Break Fees...................     70   
THE OPTION AGREEMENT........................................     72   
    General.................................................     72   
    Notice of Exercise......................................     72   
    Maximum Proceeds........................................     72   
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE...........     73   
WHERE YOU CAN FIND MORE INFORMATION.........................     74   
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING                       
  STATEMENTS................................................     74   

Annex A--Amended and Restated Merger Agreement                                  

Annex B--Plan of Arrangement                                                    

Annex C--Option Agreement                                                       

Annex D--Opinion of Deutsche Bank                                               

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                                                                      APPENDIX A

   AMENDED AND RESTATED MERGER AGREEMENT

DATED AS OF FEBRUARY 21, 2001 

AMONG 

BIOCHEM PHARMA INC. 

SHIRE ACQUISITION INC.

AND 

SHIRE PHARMACEUTICALS GROUP PLC 

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                                                                [Download Table]

                                                                            PAGE  
                                                                          --------
                                                                                  
ARTICLE I  THE ARRANGEMENT...............................................      A-5

    1.1      Closing.....................................................      A-5

    1.2      Effective Date..............................................      A-5

    1.3      Implementation Steps by BioChem.............................      A-6

    1.4      Implementation Steps by Shire...............................      A-6

    1.5      Interim Order...............................................      A-6

    1.6      Articles of Arrangement.....................................      A-7

    1.7      BioChem Shares Options......................................      A-7

    1.8      BioChem Deferred Share Unit Plans and Restricted Share Unit          
             Plan........................................................      A-7

    1.9      Certain Adjustments.........................................      A-7

ARTICLE II  EXCHANGE OF CERTIFICATES.....................................      A-8

    2.1      Exchange Fund...............................................      A-8

    2.2      No Further Ownership Rights in BioChem Common Shares........      A-8

    2.3      No Fractional Shire Shares..................................      A-8

    2.4      Termination of Exchange Fund................................      A-8

    2.5      No Liability................................................      A-8

    2.6      Investment of the Exchange Fund.............................      A-8

    2.7      Lost Certificates...........................................      A-9

    2.8      Withholding Rights..........................................      A-9

    2.9      Affiliates..................................................      A-9

ARTICLE III  REPRESENTATIONS AND WARRANTIES..............................      A-9

    3.1      Representations and Warranties of Shire.....................      A-9

    3.2      Representations and Warranties of BioChem...................     A-16

    3.3      Representations and Warranties of Shire and Exchangeco......     A-24

ARTICLE IV  COVENANTS RELATING TO CONDUCT OF BUSINESS....................     A-25

    4.1      Covenants of Shire..........................................     A-25

    4.2      Covenants of BioChem........................................     A-27

    4.3      Governmental Filings........................................     A-30

    4.4      Control of Other Party's Business...........................     A-30

ARTICLE V  ADDITIONAL AGREEMENTS.........................................     A-30

    5.1      Preparation of Proxy Statement, Form S-4, Circular, Listing          
             Particulars and Class 1 Circular............................     A-30

    5.2      Shire Board of Directors....................................     A-33

    5.3      Access to Information.......................................     A-33

    5.4      Reasonable Best Efforts.....................................     A-34

    5.5      BioChem Acquisition Proposals...............................     A-35

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                                                                          --------
                                                                                  
    5.6      Shire Acquisition Proposals.................................     A-36

    5.7      Employee Benefits Matters...................................     A-37

    5.8      Fees and Expenses...........................................     A-37

    5.9      Directors' and Officers' Indemnification and Insurance......     A-38

    5.10     Public Announcements........................................     A-38

    5.11     Listing of Shire Shares.....................................     A-38

    5.12     Affiliates..................................................     A-38

ARTICLE VI  CONDITIONS PRECEDENT.........................................     A-39

    6.1      Conditions to Each Party's Obligation to Effect the                  
             Arrangement.................................................     A-39

    6.2      Additional Conditions to Obligations of Shire and                    
             Exchangeco..................................................     A-40

    6.3      Additional Conditions to Obligations of BioChem.............     A-41

ARTICLE VII  TERMINATION.................................................     A-41

    7.1      Termination.................................................     A-41

    7.2      Effect of Termination.......................................     A-42

    7.3      Extension; Waiver...........................................     A-43

ARTICLE VIII  AMENDMENT..................................................     A-43

    8.1      Amendment...................................................     A-43

    8.2      Mutual Understanding Regarding Amendments...................     A-43

    8.3      Amendment...................................................     A-43

ARTICLE IX  GENERAL PROVISIONS...........................................     A-44

    9.1      Non-Survival of Representations, Warranties and                      
             Agreements..................................................     A-44

    9.2      Notices.....................................................     A-44

    9.3      Interpretation..............................................     A-45

    9.4      Counterparts................................................     A-45

    9.5      Entire Agreement; No Third Party Beneficiaries..............     A-45

    9.6      Governing Law...............................................     A-45

    9.7      Severability................................................     A-45

    9.8      Assignment..................................................     A-46

    9.9      Submission to Jurisdiction; Waivers.........................     A-46

    9.10     Currency....................................................     A-46

    9.11     Enforcement.................................................     A-46

    9.12     Definitions.................................................     A-46

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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)                          

 SCHEDULES                                                                          
------------------------------------------------------------------------------------

 Shire Disclosure Schedule                                                          
 BioChem Disclosure Schedule                                                        

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  RESTATED AND AMENDED MERGER AGREEMENT, dated as of February 21, 2001 (this
"AGREEMENT"), among Shire Pharmaceuticals Group Plc, a company registered in    
England under registry number 2883758 ("SHIRE"), Shire Acquisition Inc.         
(formerly 3829341 Canada Inc.), a corporation incorporated under the laws of    
Canada and a 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 the parties hereto entered into a merger agreement on December 10,
2000 (the "December 10 Merger Agreement").                                      

WHEREAS, in order to induce Shire to enter into the December 10 Merger  
Agreement and to consummate the Arrangement, concurrently with the execution and
delivery of the December 10 Merger Agreement, BioChem entered into a share      
option agreement with Shire pursuant to which BioChem 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;                                                                

   WHEREAS the parties hereto wish to amend and restate the December 10 Merger
Agreement and therefore agree to enter into this Agreement;                     

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").                                                              

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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;                                                

(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                            

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  (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 issued and outstanding
       BioChem Common Share (other than BioChem Common Shares held by dissenting
    shareholders and cash in lieu of fractional shares) shall be exchanged
  (through the steps described in Exhibit A hereto) for Shire Ordinary
       Shares. The number of Shire Ordinary Shares for which each BioChem Common
    Share shall be exchanged (the "Exchange Ratio") shall be determined as
follows:                                                          

                                                                [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
US $70.80                             Shire 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 ADS or
   one-third of an Exchangeable Share for each Shire Ordinary Share such
 shareholder would be entitled to receive pursuant to Section 1.6(a)
     (provided that a BioChem shareholder who is not a Canadian resident for
  the purpose of the ITA shall not be entitled to receive Exchangeable
Shares). 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 which has not been exercised and remains outstanding          
immediately prior to the Effective Date 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 that the holder of   
such BioChem Share Option or BioChem Warrant would have received if he or she   
had exercised such BioChem Share 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 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 or BioChem Warrant divided by 
(z) the whole number of Shire Ordinary Shares deemed purchasable pursuant to    
such BioChem Share 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                                                

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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 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     

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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  
as indemnity against any claim that may be made against it with respect to such 
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      

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    (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 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

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        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).

    (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                        

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        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 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,                                                 

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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 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                                          

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      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.                             

   (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                          

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       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.                                           

   (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                           

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        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 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                             

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 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 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 ("BioChem Warrant") 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              

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         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 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                                                              

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       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 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

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        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.          

(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

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 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.                           

(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;                          

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       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;  

     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       

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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 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                                                         

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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.                                                     

(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.   

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(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 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                                 

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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.                   

(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,                 

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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.                                                                           

 (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                            

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         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.      

   (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, or (iv) at the request of Shire, at any time before the    
Closing, BioChem may, at its entire discretion, issue BioChem Common Shares up  
to such number as Shire may request, subject to regulatory approvals.           

   (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.                                                    

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(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 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.                                                                       

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    (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.                          

  (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-4, 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)                                                       

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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. 

 (b) Shire shall prepare and file a registration statement on Form S-4, 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-4"); 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-4
      declared effective by the SEC prior to the Effective Date and shall keep
      the Form S-4 effective while the Exchangeable Shares remain outstanding.
       Shire shall cause the prospectus included in the Form S-4 to be mailed to
      the holders of Exchangeable Shares as promptly as reasonably practicable
       after the Form S-4 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

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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 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) and 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    

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       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.                                               

(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
Agreements were in full                                                         

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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 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                                              

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       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 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

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       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 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                                            

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 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.                      

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                  

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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).                                 

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                         

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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 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.                                                                   

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  (g)  EFFECTIVENESS OF THE FORM S-4.  The Form S-4 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-4 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 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                                                                      

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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.                                

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    

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    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.                                             

  (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         

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     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.                        

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                 

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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 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                             

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(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, including
without limitation the December 10 Merger Agreement.              

   (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  

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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.

    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 1.2.                   

"AFFILIATE AGREEMENT" has the meaning set forth in Section 1.2.         

"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.                                                         

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 "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.                                                                   

   "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.                       

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  "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).                   

 "DECEMBER 10 MERGER AGREEMENT" has the meaning set forth in the preamble.

"DEPOSITARY" has the meaning set forth in Section 1.6(b).               

"DIRECTOR" means the Director appointed under Section 260 of the CBCA.  

  "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.                               

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    "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.                    

  "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-4" 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).    

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"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.                                                           

"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).  

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"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.                                                                

"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).     

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"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 BioChem 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 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%                  

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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.                                 

   "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.                                                   

                               SHIRE PHARMACEUTICALS GROUP PLC

                   By: /s/ ROLF STAHEL
                                       -------------------------------

                 Name: Rolf Stahel

                              Title: Chief Executive Officer

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                      SHIRE ACQUISITION INC.

                          By: /s/ BENJAMIN H. SILVER
                                       -------------------------------

                        Name: Benjamin H. Silver

               Title: Director

                   BIOCHEM PHARMA INC.

                        By: /s/ FRANCOIS LEGAULT
                                       -------------------------------

                                Name: Francois Legault

                                         Title: Executive Vice-President

                                                 Corporate Development and
                                   Investments

                          By: /s/ CHARLES A. TESSIER
                                       -------------------------------

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                                                                      APPENDIX B

FORM OF 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 right to receive warrants in certain       
    circumstances granted in favour 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 company limited by 
   shares, limited liability company or joint share company), firm, society or
other enterprise, association, organization or entity.                  

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"EXCHANGE AGENT" means General Trust of Canada 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 multiplying 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 Shire Acquisition Inc. (formerly 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                                                                  

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(including any governmental division, department, agency, commission,   
    instrumentality, 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.                                                       

"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).                                                         

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"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.                                                 

"TOTAL LIQUIDATION CALL PURCHASE PRICE" means the Liquidation Amount    
multiplied by the relevant number of Exchangeable Shares of a particular
holder.                                                                 

    "TOTAL REDEMPTION CALL PURCHASE PRICE" means the Redemption Price multiplied
by the number of Exchangeable Shares of a particular holder subject to a
redemption pursuant to Section 7.1.                                     

"TOTAL SHIRE CALL PURCHASE PRICE" means the Shire Call Purchase Price   
multiplied by the relevant number of Exchangeable Shares subject to the 
Shire Call Right exercised by Shire.                                    

 "TRANSFER AGENT" has the meaning ascribed to that term in Section 5.1(b).

    "TRUSTEE" means General Trust of Canada 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.                      

  "UNITED KINGDOM 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 exchange rate on such date
  for Canadian dollars expressed in United Kingdom 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 United Kingdom 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.                                   

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.                                                                        

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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 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 by the Election Deadline, 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,                                          

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    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 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 be fully vested and will provide for an exercise
price per Shire Ordinary Share equal to the United Kingdom 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
     penny. 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 at or immediately prior to the
   Effective Time, will be exchanged with Shire for a right to receive a
      warrant (a "REPLACEMENT WARRANT") to purchase a number of Shire Ordinary
Shares calculated pursuant to the valuation formula set out in the
  agreement dated March 31, 2000 between BioChem and the Government of
     Canada. Such Replacement Warrant will provide for an exercise price per
       Shire Ordinary Share equal to the closing price of such shares on the LSE
 on the trading day immediately prior to their issuance. The term to
      expiry, conditions to, restrictions on and manner of exercising, 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) United Kingdom pound, to be thereafter held of record by the Trustee
as trustee for and on                                             

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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, 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 legislation) 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 (and any applicable
provincial income tax legislation), 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 (and the applicable
provincial tax 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 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                     

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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 AND/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 and/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 and/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 and/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 or certificates representing that number (rounded down to the       
nearest whole number) of Shire Ordinary Shares and/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 and/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 Common Shares which is not registered in the transfer      
records of BioChem, a certificate or certificates representing the proper number
of Shire Ordinary Shares and/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 or certificates representing Shire Ordinary Shares and/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 and/or Shire ADSs as contemplated by           
Section 4.4, and (iii) any dividends or distributions with a record             

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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, 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.                        

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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 BioChem Shareholder otherwise entitled to a fractional interest in
     an Exchangeable Share after aggregating all such fractional shares will
   receive a cash payment in Canadian dollars 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 BioChem Shareholder otherwise entitled to a fractional interest in
      a Shire Ordinary Share after aggregating all such fractional shares will
    receive a cash payment in United Kingdom pounds 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 BioChem Shareholder otherwise entitled to a fractional interest in
   a Shire ADS after aggregating all such fractional ADSs will receive a
     cash payment in U.S. dollars equal to such Person's PRO RATA portion of
     the net proceeds after expenses received by the Exchange Agent upon the
sale of whole ADSs 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.                                          

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                             

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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     
securities in respect of which such deduction and withholding was made, provided
that such withheld amounts are actually remitted to the appropriate tax         
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 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                                                                   

(a) Notwithstanding any other provision herein but subject to           
     Section 4.8(b) below, holders of Exchangeable Shares or Persons to whom
    Exchangeable Shares are issued or transferred (in each case other than
       Shire, its Affiliates, the Exchange Agent or 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, subject to  
      Section 4.8(b) below, transferees of Shire Ordinary Shares or Shire ADSs
or                                                                

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     Persons to whom Shire Ordinary Shares or Shire ADSs are issued (in each
       case other than Shire, its Affiliates, the Exchange Agent or 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,
       subject to Section 4.8(b) below, 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.                                                      

(b) Shire shall be responsible for (i) any United Kingdom stamp duty and
       stamp duty reserve tax payable on the issue or transfer of Shire Ordinary
       Shares to a depository or to a nominee or agent for a depository pursuant
      to this Arrangement, (ii) any United Kingdom stamp duty reserve tax that
      arises in respect of the transfer of Exchangeable Shares in exchange for
      Shire ADSs and/or Shire Ordinary Shares pursuant to this Arrangement (an
     "Exchange"), (iii) any United Kingdom stamp duty reserve tax that Shire
or any of its Affiliates requires to be paid on an Exchange, and  
    (iv) any United Kingdom stamp duty payable on an issue of Exchangeable
       Shares to a holder of BioChem Common Shares pursuant to this Arrangement.

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                                                                

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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 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
       and/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 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
    and/or Shire ADSs to which it is entitled, unless payment of the Total
      Liquidation Call Purchase Price 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 and/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 and/or Shire
       ADSs with a record date after the Liquidation Date and before the date of
  the transfer of such Shire Ordinary Shares and/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 (other than Shire or Affiliates of Shire) 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                                             

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   holder (other than Shire or Affiliates of Shire) will be obligated to
 sell all but not less than all the Exchangeable Shares held 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
       and/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
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 and/or Shire ADSs to which it is
      entitled, unless payment of the Total Redemption Call Purchase Price 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 and/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 (other than Shire or Affiliates of Shire) will be entitled to
       receive in exchange therefor the Redemption Price of such Shares pursuant
to Article 7 of the Exchangeable Share Provisions.                

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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 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 legislation
    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 legislation 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 and/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 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
and/or                                                            

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   Shire ADSs to which it is entitled, unless payment of the Total Shire
    Call Purchase Price 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
     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 and/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 and/or Shire ADSs with a
     record date after the Exchange Date and before the date of the transfer
      of such Shire Ordinary Shares and/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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APPENDIX 1 TO THE PLAN OF ARRANGEMENT 

PROVISIONS ATTACHING TO THE EXCHANGEABLE SHARES OF SHIRE ACQUISITION INC. 

  The Exchangeable Shares of Shire Acquisition Inc. shall have the following
rights, privileges, restrictions and conditions:                                

ARTICLE 1 
INTERPRETATION

1.1 FOR THE PURPOSES OF THESE SHARE PROVISIONS:                                 

"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.                         

  "BIOCHEM" means BioChem Pharma Inc., a corporation existing under the laws
of Canada.                                                              

"BOARD OF DIRECTORS" means the board of directors of the Corporation.   

  "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.                                            

    "CALLCO" means 3829359 Canada Inc., a corporation existing under the laws of
Canada and being a wholly-owned subsidiary of Shire.                    

    "CALLCO CALL NOTICE" has the meaning ascribed to that term in Section 6.3 of
these share provisions.                                                 

  "CANADIAN DOLLAR EQUIVALENT" means, in respect of an amount expressed in a
   currency other than Canadian dollars (the "Foreign Currency Amount") at any
   date, the product obtained by multiplying: (a) the Foreign Currency Amount,
 by (b) the noon spot exchange rate on such date for such foreign currency
  expressed in Canadian dollars 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 such foreign currency expressed in Canadian dollars as may be
deemed by the Board of Directors to be appropriate for such purpose.    

"CBCA" means the CANADA BUSINESS CORPORATIONS ACT.                      

    "COMMON SHARE" means a share in the class of common shares in the capital of
the Corporation.                                                        

    "CORPORATION" means Shire Acquisition Inc. (formerly 3829341 Canada Inc.), a
corporation existing under the laws of Canada and being a wholly-owned  
subsidiary of Shire.                                                    

 "CURRENT MARKET PRICE" means, in respect of a Shire Ordinary Share on any
    date, the Canadian Dollar Equivalent of the average of the closing prices of
   Shire Ordinary Shares during a period of 20 consecutive trading days ending
not more than three trading days before such date on the LSE, or, if the
    Shire Ordinary Shares are not then admitted to the official list of the UKLA
and to trading on the LSE, on such other stock exchange or automated    
    quotation system on which the Shire Ordinary Shares are listed or quoted, as
the case may be, as may be selected by the Board of Directors for such  
    purpose; provided, however, that if in the opinion of the Board of Directors
   the public distribution or trading activity of Shire Ordinary Shares during
    such period does not create a market which reflects the fair market value of
 a Shire Ordinary Share, then the Current Market Price of a Shire Ordinary
 Share shall be determined by the Board of Directors, in good faith and in
its sole discretion, and                                                

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 provided further that any such selection, opinion or determination by the
Board of Directors shall be conclusive and binding.                     

 "DIVIDEND AMOUNT" has the meaning ascribed to that term in Section 6.3 of
these share provisions.                                                 

"EFFECTIVE DATE" has the meaning ascribed to that term in the Plan of   
Arrangement.                                                            

"ENTITY" means any corporation (including any non-profit corporation),  
general partnership, limited partnership, limited liability partnership,
joint venture, estate, trust, company (including any company limited by 
   shares, limited liability company or joint stock company), firm, society or
other enterprise, association, organization or entity.                  

"EXCHANGE AGENT" means General Trust of Canada 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 common shares of the share capital of
  BioChem under the Plan of Arrangement or such other trust company or other
Entity that Shire may, in its reasonable discretion, choose as exchange 
agent.                                                                  

  "EXCHANGEABLE SHARE" means a share in the class of non-voting exchangeable
shares in the capital of the Corporation having the rights, privileges, 
restrictions and conditions set forth herein.                           

   "EXCHANGEABLE SHARE SUPPORT AGREEMENT" means the Exchangeable Share Support
Agreement among Shire, CallCo and the Corporation, to be entered into in
connection with the Plan of Arrangement.                                

"EXCHANGEABLE SHARE VOTING EVENT" means any matter in respect of which  
  holders of Exchangeable Shares are entitled to vote as shareholders of the
   Corporation, other than an Exempt Exchangeable Share Voting Event, and, for
greater certainty, excluding any matter in respect of which holders of  
  Exchangeable Shares are entitled to vote (or instruct the Trustee to vote)
 in their capacity as Beneficiaries under (and as that term is defined in)
the Voting and Exchange Trust Agreement.                                

"EXEMPT EXCHANGEABLE SHARE VOTING EVENT" means any matter in respect of 
    which holders of Exchangeable Shares are entitled to vote as shareholders of
    the Corporation in order to approve or disapprove, as applicable, any change
  to, or in the rights of the holders of, the Exchangeable Shares, where the
   approval or disapproval, as applicable, of such change would be required to
  maintain the equivalence of the Exchangeable Shares and the Shire Ordinary
Shares.                                                                 

 "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, official, ministry, fund, foundation, centre, 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.                                         

  "LETTER OF TRANSMITTAL AND ELECTION FORM" has the meaning ascribed to that
term in the Plan of Arrangement.                                        

    "LIQUIDATION AMOUNT" has the meaning ascribed to that term in Section 5.1 of
these share provisions.                                                 

  "LIQUIDATION CALL RIGHT" has the meaning ascribed to that term in the Plan
of Arrangement.                                                         

  "LIQUIDATION DATE" has the meaning ascribed to that term in Section 5.1 of
these share provisions.                                                 

"LSE" means the London Stock Exchange Plc or its successors.            

"NASDAQ" means NASDAQ National Market.                                  

"PERSON" means any individual, Entity or Governmental Body.             

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"PLAN OF ARRANGEMENT" means the plan of arrangement relating to the     
  arrangement of BioChem under Section 192 of the CBCA, as amended, modified
   or supplemented from time to time in accordance with the plan and any order
 of the Superior Court of Quebec, to which plan these share provisions are
attached as Appendix 1.                                                 

"PURCHASE PRICE" has the meaning ascribed to that term in Section 6.3 of
these share provisions.                                                 

 "REDEMPTION CALL PURCHASE PRICE" has the meaning ascribed to that term in
the Plan of Arrangement.                                                

    "REDEMPTION CALL RIGHT" has the meaning ascribed to that term in the Plan of
Arrangement.                                                            

"REDEMPTION DATE" means the date, if any, established by the Board of   
    Directors for the redemption by the Corporation of all but not less than all
   of the outstanding Exchangeable Shares pursuant to Article 7 of these share
    provisions, which date shall be no earlier than the tenth anniversary of the
Effective Date unless:                                                  

 (a) there are fewer than 1,000,000 Exchangeable Shares outstanding (other
    than Exchangeable Shares held by Shire and its Affiliates, and as such
    number of shares may be adjusted as deemed appropriate by the Board of
      Directors to give effect to any subdivision or consolidation of or share
      dividend on the Exchangeable Shares, any issue or distribution of rights
      to acquire Exchangeable Shares or securities exercisable or exchangeable
       for or convertible into Exchangeable Shares, any issue or distribution of
       other securities or rights or evidences of indebtedness or assets, or any
other capital reorganization or other transaction affecting the   
       Exchangeable Shares), in which case the Board of Directors may accelerate
     such redemption date to such date prior to the tenth anniversary of the
Effective Date as they may determine, upon at least 60 days' prior
     written notice to the registered holders of the Exchangeable Shares and
the Trustee;                                                      

(b) a Shire Control Transaction occurs, in which case, provided that the
      Board of Directors determines, in good faith and in its sole discretion,
 that it is not reasonably practicable to substantially replicate or
      modify the terms and conditions of the Exchangeable Shares in connection
       with such Shire Control Transaction or that the redemption of all but not
  less than all of the outstanding Exchangeable Shares is necessary to
   enable the completion of such Shire Control Transaction in accordance
   with its terms, the Board of Directors may accelerate such redemption
       date to such date prior to the tenth anniversary of the Effective Date as
     it may determine, upon such number of days' prior written notice to the
       registered holders of the Exchangeable Shares and to Shire and CallCo and
  the Trustee as the Board of Directors may determine to be reasonably
practicable in such circumstances;                                

(c) an Exchangeable Share Voting Event is proposed and (i) the Board of 
      Directors has determined, in good faith and in its sole discretion, that
 it is not reasonably practicable to accomplish the business purpose
     intended by the Exchangeable Share Voting Event, which business purpose
must be bona fide and not for the primary purpose of causing the  
   occurrence of a Redemption Date, in any other commercially reasonable
    manner that does not result in an Exchangeable Share Voting Event, and
    (ii) the holders of the Exchangeable Shares fail to take the necessary
    action at a meeting or other vote of holders of Exchangeable Shares to
 approve or disapprove, as applicable, the Exchangeable Share Voting
Event, in which case the redemption date shall be the Business Day
      following the day on which the holders of the Exchangeable Shares failed
to take such action; or                                           

    (d) an Exempt Exchangeable Share Voting Event is proposed and the holders of
       the Exchangeable Shares fail to take the necessary action at a meeting or
     other vote of holders of Exchangeable Shares, to approve or disapprove,
      as applicable, the Exempt Exchangeable Share Voting Event, in which case
      the Redemption Date shall be the Business Day following the day on which
       the holders of the Exchangeable Shares failed to take such action and the
Board of Directors shall                                          

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      give such number of days' prior written notice of such redemption to the
     registered holders of the Exchangeable Shares as the Board of Directors
may determine to be reasonably practicable in such circumstances, 

provided, however, that the accidental failure or omission to give any  
 notice of redemption under clause (a), (b), (c) or (d) above to less than
   10% of such holders of Exchangeable Shares shall not affect the validity of
any such redemption.                                                    

  "REDEMPTION PRICE" has the meaning ascribed to that term in Section 7.1 of
these share provisions.                                                 

  "RETRACTED SHARES" has the meaning ascribed to that term in Section 6.1(a)
of these share provisions.                                              

"RETRACTION CALL RIGHT" has the meaning ascribed to that term in        
Section 6.1(c) of these share provisions.                               

    "RETRACTION DATE" has the meaning ascribed to that term in Section 6.1(b) of
these share provisions.                                                 

  "RETRACTION PRICE" has the meaning ascribed to that term in Section 6.1 of
these share provisions.                                                 

    "RETRACTION REQUEST" has the meaning ascribed to that term in Section 6.1 of
these share provisions.                                                 

"SHIRE" means Shire Pharmaceuticals Group Plc, a company registered in  
England under registry number 2883758.                                  

"SHIRE ADS" means an American Depositary Shares of Shire, or where      
    appropriate, an American Depositary Receipt of Shire, evidencing such share.

"SHIRE CALL RIGHT" has the meaning ascribed to that term in the Plan of 
Arrangement.                                                            

"SHIRE CONTROL TRANSACTION" shall be deemed to have occurred if:        

(a) any person, firm or corporation acquires directly or indirectly any 
  voting security of Shire and immediately after such acquisition, the
    acquirer has voting securities representing more than 50% of the total
      voting power of all the then outstanding voting securities of Shire on a
fully-diluted basis;                                              

(b) the shareholders of Shire shall approve a merger, consolidation,    
recapitalization or reorganization of Shire, other than any such  
 transaction which would result in the holders of outstanding voting
       securities of Shire immediately prior to such transaction having at least
       75% of the total voting power represented by the voting securities of the
       surviving entity outstanding immediately after such transaction, with the
voting power of each such continuing holder relative to such other
       continuing holders being not altered substantially in the transaction; or

  (c) the shareholders of Shire shall approve a plan of complete liquidation
       of Shire or an agreement for the sale or disposition by Shire of all or a
  substantial portion of Shire's assets (i.e., 66 2/3% or more in fair
market value of the total assets of Shire).                       

"SHIRE DIVIDEND DECLARATION DATE" means the date on which the board of  
directors of Shire declares any dividend on the Shire Ordinary Shares.  

"SHIRE ORDINARY SHARES" means ordinary shares of five pence each in the 
capital of Shire.                                                       

    "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 the Plan of
Arrangement including, without limitation, United Kingdom stamp duty and
stamp duty reserve tax.                                                 

 "TOTAL LIQUIDATION AMOUNT" means the Liquidation Amount multiplied by the
relevant number of Exchangeable Shares of a particular holder.          

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  "TOTAL PURCHASE PRICE" means the Purchase Price multiplied by the relevant
    number of Retracted Shares subject to the Retraction Call Right exercised by
Callco.                                                                 

    "TOTAL REDEMPTION PRICE" means the Redemption Price multiplied by the number
of Exchangeable Shares of a particular holder subject to a redemption   
pursuant to Section 7.1.                                                

"TOTAL RETRACTION PRICE" means the Retraction Price multiplied by the   
relevant number of Retracted Share of a particular holder.              

  "TRANSFER AGENT" means General Trust of Canada or such other Person as may
from time to time be appointed by the Corporation as the registrar and  
transfer agent for the Exchangeable Shares.                             

    "TRUSTEE" means General Trust of Canada 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.                      

 "VOTING AND EXCHANGE TRUST AGREEMENT" means the Voting and Exchange Trust
  Agreement among Shire, the Corporation and the Trustee, to be entered into
in connection with the Plan of Arrangement.                             

ARTICLE 2 
RANKING OF EXCHANGEABLE SHARES

2.1   The Exchangeable Shares shall be entitled to a preference over the Common 
Shares and any other shares ranking junior to the Exchangeable Shares with      
respect to the payment of dividends and the distribution of assets in the event 
of the liquidation, dissolution or winding-up of the Corporation, whether       
voluntary or involuntary, or any other distribution of the assets of the        
Corporation, among its shareholders for the purpose of winding up its affairs.  

ARTICLE 3 
DIVIDENDS 

3.1   A holder of an Exchangeable Share shall be entitled to receive and the    
Board of Directors shall, subject to applicable law, on each Shire Dividend     
Declaration Date, declare a dividend on each Exchangeable Share:                

    (a) in the case of a cash dividend declared on the Shire Ordinary Shares, in
     an amount in cash for each Exchangeable Share in United Kingdom pounds,
or the Canadian Dollar Equivalent thereof on the Shire Dividend   
    Declaration Date, in each case, equal to the cash dividend declared on
each Shire Ordinary Share multiplied by three;                    

    (b) in the case of a share dividend declared on the Shire Ordinary Shares to
     be paid in Shire Ordinary Shares, in such number of Exchangeable Shares
(with nominal paid-up capital for purposes of the INCOME TAX ACT  
      (Canada)) for each Exchangeable Share as is equal to the number of Shire
       Ordinary Shares divided by three to be paid on each Shire Ordinary Share;
or                                                                

(c) in the case of a dividend declared on the Shire Ordinary Shares in  
 property other than cash or Shire Ordinary Shares, in such type and
 amount of property for each Exchangeable Share as is the same as or
       economically equivalent to (to be determined by the Board of Directors as
 contemplated by Section 3.6 hereof) the type and amount of property
      declared as a dividend on each Shire Ordinary Share multiplied by three.

Such dividends shall be paid out of money, assets or property of the Corporation
properly applicable to the payment of dividends, or out of authorized but       
unissued shares of the Corporation, as applicable.                              

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3.2   In the case of a share dividend declared on the Shire Ordinary Shares to  
be paid in Shire Ordinary Shares, in lieu of declaring the share dividend       
contemplated by Section 3.1(b) on the Exchangeable Shares, the Board of         
Directors may, in good faith and in its discretion and subject to applicable    
law, subdivide, redivide or change (the "Subdivision") each issued and unissued 
Exchangeable Share on the basis that each Exchangeable Share before the         
subdivision becomes a number of Exchangeable Shares as is equal to the sum of   
(i) three Shire Ordinary Shares and (ii) the number of Shire Ordinary Shares to 
be paid as a share dividend on each Shire Ordinary Share. In making such        
Subdivision, the Board of Directors shall consider the effect thereof upon the  
then outstanding Exchangeable Shares and the general taxation consequences of   
the Subdivision to the holders of the Exchangeable Shares. In such instance, and
notwithstanding any other provision hereof, such Subdivision shall become       
effective on the effective date specified in Section 3.4 hereof without any     
further act or formality on the part of the Board of Directors or of the holders
of Exchangeable Shares. For greater certainty, subject to the applicable laws,  
no approval of the holders of Exchangeable Shares to an amendment to the        
articles of the Corporation shall be required to give effect to such            
subdivision.                                                                    

3.3   Cheques of the Corporation payable at par at any branch of the bankers of 
the Corporation shall be issued in respect of any cash dividends contemplated by
Section 3.1(a) hereof and the sending of such a cheque to each holder of an     
Exchangeable Share shall satisfy the cash dividend represented thereby unless   
the cheque is not paid on presentation. Subject to applicable law, certificates 
registered in the name of the registered holder of Exchangeable Shares shall be 
issued or transferred in respect of any share dividends contemplated by         
Section 3.1(b) hereof or the Subdivision of Exchangeable Shares contemplated by 
Section 3.2 hereof and the sending of such a certificate to each holder of an   
Exchangeable Share shall satisfy the share dividend represented thereby. Such   
other type and amount of property in respect of any dividends contemplated by   
Section 3.1(c) hereof shall be issued, distributed or transferred by the        
Corporation in such manner as it shall determine and the issuance, distribution 
or transfer thereof by the Corporation to each holder of an Exchangeable Share  
shall satisfy the dividend represented thereby. No holder of an Exchangeable    
Share shall be entitled to recover by action or other legal process against the 
Corporation any dividend that is represented by a cheque that has not been duly 
presented to the Corporation's bankers for payment or that otherwise remains    
unclaimed for a period of six years from the date on which such dividend was    
payable.                                                                        

3.4   The record date for the determination of the holders of Exchangeable      
Shares entitled to receive payment of, and the payment date for, any dividend   
declared on the Exchangeable Shares under Section 3.1 hereof shall be the same  
dates as the record date and payment date, respectively, for the corresponding  
dividend declared on the Shire Ordinary Shares. The record date for the         
determination of the holder of Exchangeable Shares entitled to receive          
Exchangeable Shares in connection with any Subdivision of Exchangeable Shares   
under Section 3.2 hereof and the effective date of such Subdivision shall be the
same dates as the record date and payment date, respectively, for the           
corresponding share dividend declared on Shire Ordinary Shares.                 

3.5   If on any payment date for any dividends declared on the Exchangeable     
Shares under Section 3.1 hereof the dividends are not paid in full on all of the
Exchangeable Shares then outstanding, any such dividends that remain unpaid     
shall be paid on a subsequent date or dates determined by the Board of Directors
on which the Corporation shall have sufficient moneys, assets or property       
properly applicable to the payment of such dividends.                           

3.6   The Board of Directors shall determine, in good faith and in its sole     
discretion, economic equivalence for the purposes of Sections 3.1 and 3.2       
hereof, and each such determination shall be conclusive and binding on the      
Corporation and its shareholders. In making each such determination, the        

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following factors shall, without excluding other factors determined by the Board
of Directors to be relevant, be considered by the Board of Directors:           

    (a) in the case of any share dividend or other distribution payable in Shire
    Ordinary Shares, the number of such shares issued in proportion to the
number of Shire Ordinary Shares previously outstanding;           

 (b) in the case of the issuance or distribution of any rights, options or
warrants to subscribe for or purchase Shire Ordinary Shares (or   
securities exercisable or exchangeable for or convertible into or 
 carrying rights to acquire Shire Ordinary Shares), the relationship
      between the exercise price of each such right, option or warrant and the
  current market value (as determined by the Board of Directors in the
manner above contemplated) of a Shire Ordinary Share;             

(c) in the case of the issuance or distribution of any other form of    
      property (including without limitation any shares or securities of Shire
   of any class other than Shire Ordinary Shares, any rights, options or
warrants other than those referred to in Section 3.6(b) above, any
evidences of indebtedness of Shire or any assets of Shire), the   
       relationship between the fair market value (as determined by the Board of
       Directors in the manner above contemplated) of such property to be issued
      or distributed with respect to each outstanding Shire Ordinary Share and
      the current market value (as determined by the Board of Directors in the
manner above contemplated) of a Shire Ordinary Share; and         

(d) in all such cases, the general taxation consequences of the relevant
event to holders of Exchangeable Shares to the extent that such   
  consequences may differ from the taxation consequences to holders of
       Shire Ordinary Shares as a result of differences between taxation laws of
  Canada and the United Kingdom (except for any differing consequences
  arising as a result of differing marginal taxation rates and without
regard to the individual circumstances of holders of Exchangeable 
Shares).                                                          

 For purposes of the foregoing determinations, the current market value of
any security listed and traded or quoted on a securities exchange shall be the  
weighted average of the daily trading prices of such security during a period of
not less than 20 consecutive trading days ending not more than three trading    
days before the date of determination on the principal securities exchange on   
which such securities are listed and traded or quoted; provided, however, that  
if in the opinion of the Board of Directors the public distribution or trading  
activity of such securities during such period does not create a market which   
reflects the fair market value of such securities, then the current market value
thereof shall be determined by the Board of Directors, in good faith and in its 
sole discretion, and provided further that any such determination by the Board  
of Directors shall be conclusive and binding on the Corporation and its         
shareholders.                                                                   

ARTICLE 4 
CERTAIN RESTRICTIONS

4.1   So long as any of the Exchangeable Shares are outstanding, the Corporation
shall not at any time without, but may at any time with, the approval of the    
holders of the Exchangeable Shares given as specified in Section 9.2 of these   
share provisions:                                                               

(a) pay any dividends on the Common Shares or any other shares ranking  
      junior to the Exchangeable Shares, other than share dividends payable in
       Common Shares or any such other shares ranking junior to the Exchangeable
Shares, as the case may be;                                       

    (b) redeem or purchase or make any capital distribution in respect of Common
   Shares or any other shares ranking junior to the Exchangeable Shares;

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  (c) redeem or purchase any other shares of the Corporation ranking equally
      with or junior to the Exchangeable Shares with respect to the payment of
dividends or on any distribution on liquidation; or               

(d) issue any Exchangeable Shares or any other shares of the Corporation
      ranking equally with, or superior to, the Exchangeable Shares other than
   by way of share dividends to the holders of such Exchangeable Shares.

  The restrictions in Sections 4.1(a), 4.1(b), 4.1(c) and 4.1(d) above shall
not apply if all dividends on the outstanding Exchangeable Shares corresponding 
to dividends declared and paid to date on the Shire Ordinary Shares shall have  
been declared and paid on the Exchangeable Shares.                              

ARTICLE 5 
DISTRIBUTION ON LIQUIDATION 

5.1   In the event of the liquidation, dissolution or winding-up of the         
Corporation or any other distribution of the assets of the Corporation among its
shareholders for the purpose of winding up its affairs, subject to the exercise 
by CallCo of the Liquidation Call Right, a holder of Exchangeable Shares shall  
be entitled, subject to applicable law, to receive from the assets of the       
Corporation in respect of each Exchangeable Share held by such holder on the    
effective date (the "Liquidation Date") of such liquidation, dissolution or     
winding-up, before any distribution of any part of the assets of the Corporation
among the holders of the Common Shares or any other shares ranking junior to the
Exchangeable Shares, an amount per share 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 shall be satisfied in full by the Corporation 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),        
together with all declared and unpaid dividends on each such Exchangeable Share 
held by such holder on any dividend record date which occurred prior to the     
Liquidation Date (the "Liquidation Amount").                                    

5.2   On or promptly after the Liquidation Date, and subject to the exercise by 
CallCo of the Liquidation Call Right, the Corporation shall pay or cause to be  
paid to the holders of the Exchangeable Shares the Liquidation Amount for each  
such Exchangeable Share upon presentation and surrender of the certificates     
representing such Exchangeable Shares, together with such other documents and   
instruments as are required to effect a transfer of Exchangeable Shares under   
the CBCA and the by-laws of the Corporation and such additional documents and   
instruments as the Transfer Agent or the Corporation may reasonably require, at 
the registered office of the Corporation or at any office of the Transfer Agent 
as may be specified by the Corporation by notice to the holders of the          
Exchangeable Shares. Payment of the Total Liquidation Amount for such           
Exchangeable Shares shall be made by delivery to each holder, at the address of 
the holder recorded in the securities register of the Corporation for the       
Exchangeable Shares or by holding for pick-up by the holder at the registered   
office of the Corporation or at any office of the Transfer Agent as may be      
specified by the Corporation by notice to the holders of Exchangeable Shares, on
behalf of the Corporation of certificates representing Shire Ordinary Shares    
and/or Shire ADSs (or by effecting the necessary CREST or other electronic      
transfers) (which shares shall be duly issued as fully paid and non-assessable  
and shall be free and clear of any lien, claim or encumbrance) and a cheque of  
the Corporation payable at par at any branch of the bankers of the Corporation  
in respect of the remaining portion, if any, of the Total Liquidation Amount (in
each case less any amounts withheld on account of tax required to be deducted   
and withheld therefrom). On and after the Liquidation Date, the holders of the  
Exchangeable Shares shall cease to be holders of such Exchangeable Shares and   
shall not be entitled to exercise any of the rights of holders in respect       
thereof, other than the right to receive the Total Liquidation Amount, unless   
payment of the Total Liquidation Amount for such Exchangeable Shares shall not  
be made upon presentation and surrender of share certificates in accordance with
the foregoing provisions, in which                                              

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case the rights of the holders shall remain unaffected until the Total          
Liquidation Amount has been paid in the manner hereinbefore provided. The       
Corporation shall have the right at any time after the Liquidation Date to      
deposit or cause to be deposited the Total Liquidation Amount in respect of the 
Exchangeable Shares represented by certificates that have not at the Liquidation
Date been surrendered by the holders thereof in a custodial account with any    
chartered bank or trust company in Canada. Upon such deposit being made, the    
rights of the holders of Exchangeable Shares after such deposit shall be limited
to receiving the Total Liquidation Amount (in each case less any amounts        
withheld on account of tax required to be deducted and withheld therefrom) for  
such Exchangeable Shares so deposited, against presentation and surrender of the
said certificates held by them, respectively, in accordance with the foregoing  
provisions. Upon such payment or deposit of the Total Liquidation Amount, the   
holders of the Exchangeable Shares shall thereafter be considered and deemed for
all purposes to be holders of the Shire Ordinary Shares and/or Shire ADSs       
delivered to them or the custodian on their behalf.                             

5.3   After the Corporation has satisfied its obligations to pay the holders of 
the Exchangeable Shares the Liquidation Amount per Exchangeable Share pursuant  
to Section 5.1 of these share provisions, such holders shall not be entitled to 
share in any further distribution of the assets of the Corporation.             

ARTICLE 6 
RETRACTION OF EXCHANGEABLE SHARES BY HOLDER 

6.1   A holder of Exchangeable Shares shall be entitled at any time, subject to 
the exercise by CallCo of the Retraction Call Right and otherwise upon          
compliance with the provisions of this Article 6, to require the Corporation to 
redeem any or all of the Exchangeable Shares registered in the name of such     
holder for an amount per share equal to the Current Market Price of a Shire     
Ordinary Share on the last Business Day prior to the Retraction Date multiplied 
by three, which shall be satisfied in full by the Corporation 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) for each           
Exchangeable Share presented and surrendered by the holder, together with, on   
the payment date therefor, the full amount of all declared and unpaid dividends 
on any such Exchangeable Share held by such holder on any dividend record date  
which occurred prior to the Retraction Date (the "Retraction Price"). To effect 
such redemption, the holder shall present and surrender at the registered office
of the Corporation or at any office of the Transfer Agent as may be specified by
the Corporation by notice to the holders of Exchangeable Shares the certificate 
or certificates representing the Exchangeable Shares which the holder desires to
have the Corporation redeem, together with such other documents and instruments 
as are required to effect a transfer of Exchangeable Shares under the CBCA and  
the by-laws of the Corporation and such additional documents and instruments as 
the Transfer Agent or the Corporation may reasonably require, and together with 
a duly executed statement (the "Retraction Request") in the form of Schedule A  
hereto or in such other form as may be acceptable to the Corporation:           

  (a) specifying that the holder desires to have all or any number specified
   therein of the Exchangeable Shares represented by such certificate or
certificates (the "Retracted Shares") redeemed by the Corporation;

(b) stating the Business Day on which the holder desires to have the    
       Corporation redeem the Retracted Shares (the "Retraction Date"), provided
       that the Retraction Date shall be not less than 10 Business Days nor more
     than 15 Business Days after the date on which the Retraction Request is
      received by the Corporation and further provided that, in the event that
no such Business Day is specified by the holder in the Retraction 
      Request, the Retraction Date shall be deemed to be the 15th Business Day
after the date on which the Retraction Request is received by the 
Corporation; and                                                  

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(c) acknowledging the overriding right (the "Retraction Call Right") of 
CallCo to purchase all but not less than all the Retracted Shares 
      directly from the holder and that the Retraction Request shall be deemed
   to be a revocable offer by the holder to sell the Retracted Shares to
  CallCo in accordance with the Retraction Call Right on the terms and
conditions set out in Section 6.3 below.                          

6.2   Subject to the exercise by CallCo of the Retraction Call Right and to     
Section 6.8, upon receipt by the Corporation or the Transfer Agent in the manner
specified in Section 6.1 hereof of a certificate or certificates representing   
the number of Exchangeable Shares which the holder desires to have the          
Corporation redeem, together with a Retraction Request and such other documents 
and instruments as are required to effect a transfer of Exchangeable Shares     
under the CBCA and the by-laws of the Corporation and such additional documents 
and instruments as the Transfer Agent or the Corporation may reasonably require,
and provided that the Retraction Request is not revoked by the holder in the    
manner specified in Section 6.7, the Corporation shall redeem the Retracted     
Shares effective at the close of business on the Retraction Date and shall cause
to be delivered to such holder the Total Retraction Price with respect to such  
shares, provided that all declared and unpaid dividends for which the record    
date has occurred prior to the Retraction Date shall be paid on the payment date
for such dividends. If only a part of the Exchangeable Shares represented by any
certificate is redeemed (or purchased by CallCo pursuant to the Retraction Call 
Right), a new certificate for the balance of such Exchangeable Shares shall be  
issued to the holder at the expense of the Corporation.                         

6.3   Upon receipt by the Corporation of a Retraction Request, the Corporation  
shall immediately notify CallCo thereof and shall provide to CallCo a copy of   
the Retraction Request. In order to exercise the Retraction Call Right, CallCo  
must notify the Corporation of its determination to do so (the "CallCo Call     
Notice") within five Business Days of notification to CallCo by the Corporation 
of the receipt by the Corporation of the Retraction Request. If CallCo does not 
so notify the Corporation within such five Business Day period, the Corporation 
will notify the holder as soon as possible thereafter that CallCo will not      
exercise the Retraction Call Right. If CallCo delivers the CallCo Call Notice   
within such five Business Day period, and provided that the Retraction Request  
is not revoked by the holder in the manner specified in Section 6.7, 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. In such event, the Corporation shall not redeem the Retracted Shares
and CallCo shall purchase from such holder and such holder shall sell to CallCo 
on the Retraction Date the Retracted Shares for a purchase price (the "Purchase 
Price") per share equal to the Retraction Price per share which shall be        
satisfied in full by CallCo causing to be delivered to such holder three Shire  
Ordinary Shares or one Shire ADS (at the option of the holder as indicated to   
the Transfer Agent) for each Exchangeable Share presented and surrendered by the
holder, plus, on the designated payment date therefor, to the extent not paid by
the Corporation on the designated payment date therefor, an additional amount   
equivalent to the full amount of all declared and unpaid dividends on those     
Retracted Shares held by such holder on any dividend record date which occurred 
prior to the Retraction Date (the "Dividend Amount"). For the purposes of       
completing a purchase pursuant to the Retraction Call Right, CallCo shall       
deposit with the Transfer Agent, on or before the Retraction Date, certificates 
representing Shire Ordinary Shares and/or Share ADSs and a cheque or cheques of 
CallCo payable at par at any branch of the bankers of CallCo representing the   
aggregate Dividend Amount, less any amounts withheld on account of tax required 
to be deducted and withheld therefrom. Provided that CallCo has complied with   
the immediately preceding sentence, the closing of the purchase and sale of the 
Retracted Shares pursuant to the Retraction Call Right shall be deemed to have  
occurred as at the close of business on the Retraction Date and, for greater    
certainty, no redemption by the Corporation of such Retracted Shares shall take 
place on the Retraction Date. In the event that CallCo does not deliver a CallCo
Call Notice within such five Business Day period, and provided that the         
Retraction Request is not revoked by the holder in the manner specified in      
Section 6.7, the Corporation shall redeem the Retracted Shares on the Retraction
Date and in the manner otherwise contemplated in this Article 6.                

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6.4   The Corporation or CallCo, as the case may be, shall deliver or cause the 
Transfer Agent to deliver to the relevant holder, at the address of the holder  
recorded in the securities register of the Corporation for the Exchangeable     
Shares or at the address specified in the holder's Retraction Request or by     
holding for pick-up by the holder at the registered office of the Corporation or
at any office of the Transfer Agent as may be specified by the Corporation by   
notice to the holders of Exchangeable Shares, certificates representing the     
Shire Ordinary Shares (or effect the necessary CREST or other electronic        
transfers) (which shares shall be duly issued as fully paid and non-assessable  
and shall be free and clear of any lien, claim or encumbrance and shall be      
admitted to the official list of the UKLA and to trading on the LSE) and/or     
Shire ADSs (which securities shall be duly issued as fully paid and             
non-assessable and shall be free and clear of any lien, claim or encumbrance and
shall be quoted on NASDAQ) registered in the name of the holder or in such other
name as the holder may request, and, if applicable and on or before the payment 
date therefor, a cheque payable at par at any branch of the bankers of the      
Corporation or CallCo, as applicable, representing the aggregate Dividend Amount
in payment of the Total Retraction Price or the Total Purchase Price, as the    
case may be, in each case, less any amounts withheld on account of tax required 
to be deducted and withheld therefrom, and such delivery of such certificates   
(or necessary CREST or other electronic transfers) and cheques on behalf of the 
Corporation or by CallCo, as the case may be, or by the Transfer Agent shall be 
deemed to be payment of and shall satisfy and discharge all liability for the   
Total Retraction Price or Total Purchase Price, as the case may be, to the      
extent that the same is represented by such share certificates (or necessary    
CREST or other electronic transfers) and cheques (plus any tax deducted and     
withheld therefrom and remitted to the proper tax authority).                   

6.5   On and after the close of business on the Retraction Date, the holder of  
the Retracted Shares shall cease to be a holder of such Retracted Shares and    
shall not be entitled to exercise any of the rights of a holder in respect      
thereof, other than the right to receive the Total Retraction Price or Total    
Purchase Price, as the case may be, unless upon presentation and surrender of   
certificates in accordance with the foregoing provisions, payment of the Total  
Retraction Price or the Total Purchase Price, as the case may be, shall not be  
made as provided in Section 6.4, in which case the rights of such holder shall  
remain unaffected until the Total Retraction Price or the Total Purchase Price, 
as the case may be, has been paid in the manner hereinbefore provided. On and   
after the close of business on the Retraction Date, provided that presentation  
and surrender of certificates and payment of the Total Retraction Price or the  
Total Purchase Price, as the case may be, has been made in accordance with the  
foregoing provisions, the holder of the Retracted Shares so redeemed by the     
Corporation or purchased by CallCo shall thereafter be considered and deemed for
all purposes to be a holder of the Shire Ordinary Shares and/or Shire ADSs      
delivered to it.                                                                

6.6   Notwithstanding any other provision of this Article 6, the Corporation    
shall not be obligated to redeem Retracted Shares specified by a holder in a    
Retraction Request to the extent that such redemption of Retracted Shares would 
be contrary to solvency requirements or other provisions of applicable law. If  
the Corporation believes that on any Retraction Date it would not be permitted  
by any of such provisions to redeem the Retracted Shares tendered for redemption
on such date, and provided that CallCo shall not have exercised the Retraction  
Call Right with respect to the Retracted Shares, the Corporation shall only be  
obligated to redeem Retracted Shares specified by a holder in a Retraction      
Request to the extent of the maximum number that may be so redeemed (rounded    
down to a whole number of shares) as would not be contrary to such provisions   
and shall notify the holder at least two Business Days prior to the Retraction  
Date as to the number of Retracted Shares which will not be redeemed by the     
Corporation. In any case in which the redemption by the Corporation of Retracted
Shares would be contrary to solvency requirements or other provisions of        
applicable law, the Corporation shall redeem the maximum number of Exchangeable 
Shares which the Board of Directors determine the Corporation is, on the        
Retraction Date, permitted to redeem, which shall be selected as nearly as may  
be pro rata (rounded up to a whole number of shares) in proportion to the total 
number of Exchangeable Shares tendered for retraction by each holder thereof and
the Corporation shall issue to each holder of Retracted Shares a new            
certificate, at the expense of the Corporation, representing the Retracted      
Shares not redeemed by the Corporation pursuant to Section 6.2 hereof. Provided 
that the Retraction Request is not revoked by the holder in the manner specified
in                                                                              

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Section 6.7, the holder of any such Retracted Shares not redeemed by the        
Corporation pursuant to Section 6.2 of these share provisions as a result of    
solvency requirements or other provisions of applicable law shall be deemed by  
giving the Retraction Request to have instructed the Trustee to require Shire to
purchase such Retracted Shares from such holder on the Retraction Date or as    
soon as practicable thereafter on payment by to such holder of the Purchase     
Price for each such Retracted Share, all as more specifically provided in       
Section 5.7 of the Voting and Exchange Trust Agreement.                         

6.7   A holder of Retracted Shares may, by notice in writing given by the holder
to the Corporation before the close of business on the Business Day immediately 
preceding the Retraction Date, withdraw its Retraction Request, in which event  
such Retraction Request shall be null and void and, for greater certainty, the  
revocable offer constituted by the Retraction Request to sell the Retracted     
Shares to CallCo shall be deemed to have been revoked.                          

6.8   The Corporation, by issuing a press release, may at any time and from time
to time notify the holders of Exchangeable Shares of the suspension of their    
rights to require the Corporation to redeem any Exchangeable Shares for Shire   
Ordinary Shares pursuant to this Section 6 if Shire has been unable to obtain   
the approval of the UKLA or the LSE to the admission of the Shire Ordinary      
Shares to the official list of the UKLA or to trading on the LSE that would be  
required to be delivered to the holders of Exchangeable Shares in connection    
with the exercise of such rights and such rights shall be suspended until such  
approval has been obtained. The Corporation shall notify the holders of the     
Exchangeable Shares by press release, that such rights are once again in force  
forthwith after such approval has been obtained.                                

ARTICLE 7 
REDEMPTION OF EXCHANGEABLE SHARES BY THE CORPORATION

7.1   Subject to applicable law, and provided CallCo has not exercised the      
Redemption Call Right, the Corporation shall on the Redemption Date redeem all  
but not less than all of the then outstanding Exchangeable Shares for an amount 
per share 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 shall 
be satisfied in full by the Corporation causing to be delivered to each holder  
of Exchangeable Shares 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) for each Exchangeable  
Share held by such holder, together with 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 Redemption Date (the           
"Redemption Price").                                                            

7.2   In any case of a redemption of Exchangeable Shares under this Article 7,  
the Corporation shall, at least 60 days before the Redemption Date (other than a
Redemption Date established in connection with a Shire Control Transaction, an  
Exchangeable Share Voting Event or an Exempt Exchangeable Share Voting Event),  
send or cause to be sent to each holder of Exchangeable Shares a notice in      
writing of the redemption by the Corporation or the purchase by CallCo under the
Redemption Call Right, as the case may be, of the Exchangeable Shares held by   
such holder; provided that if the notice period of 60 days would expire after   
the date that would, but for such 60-day period, be established as the          
Redemption Date, then the Redemption Date will be deferred until the notice     
period of 60 days has passed. In the case of a Redemption Date established in   
connection with a Shire Control Transaction, an Exchangeable Share Voting Event 
or an Exempt Exchangeable Share Voting Event, the written notice of redemption  
by the Corporation or the purchase by CallCo under the Redemption Call Right    
will be sent on or before the Redemption Date, on as many days prior written    
notice as may be determined by the Board of Directors of the Corporation to be  
reasonably practicable in the circumstances. In any such case, such notice shall
set out the Redemption Price or the Redemption Call Purchase Price, as the case 
may be, the Redemption Date and, if applicable, particulars of the Redemption   
Call Right.                                                                     

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7.3   On or after the Redemption Date and subject to the exercise by CallCo of  
the Redemption Call Right, the Corporation shall cause to be delivered to the   
holders of the Exchangeable Shares to be redeemed the Redemption Price for each 
such Exchangeable Share, together with 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 Redemption Date, upon          
presentation and surrender at the registered office of the Corporation or at any
office of the Transfer Agent or the Corporation as may be specified by the      
Corporation in such notice of the certificates representing such 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 the  
Corporation and such additional documents and instruments as the Transfer Agent,
Shire or the Corporation may reasonably require. Payment of the Total Redemption
Price for such Exchangeable Shares, together with payment of such dividends,    
shall be made by delivery to each holder, at the address of the holder recorded 
in the securities register of the Corporation or by holding for pick-up by the  
holder at the registered office of the Corporation or at any office of the      
Transfer Agent as may be specified by the Corporation in such notice, on behalf 
of the Corporation of certificates representing Shire Ordinary Shares and/or    
Shire ADSs (or effecting the necessary CREST or other electronic transfer)      
(which shares shall be duly issued as fully paid and non-assessable and shall be
free and clear of any lien, claim or encumbrance) and, if applicable, a cheque  
of the Corporation payable at par at any branch of the bankers of the           
Corporation in payment of any such dividends, in each case, less any amounts    
withheld on account of tax required to be deducted and withheld therefrom. On   
and after the Redemption Date, the holders of the Exchangeable Shares called for
redemption shall cease to be holders of such Exchangeable Shares and shall not  
be entitled to exercise any of the rights of holders in respect thereof, other  
than the right to receive the Total Redemption Price and any such dividends,    
unless payment of the Total Redemption Price and any such dividends for such    
Exchangeable Shares shall not be made upon presentation and surrender of        
certificates in accordance with the foregoing provisions, in which case the     
rights of the holders shall remain unaffected until the Total Redemption Price  
and any such dividends have been paid in the manner hereinbefore provided. The  
Corporation shall have the right at any time after the sending of notice of its 
intention to redeem the Exchangeable Shares as aforesaid to deposit or cause to 
be deposited the Total Redemption Price for, and the full amount of such        
dividends on (except as provided in the preceding sentence), the Exchangeable   
Shares so called for redemption, or of such of the said Exchangeable Shares     
represented by certificates that have not at the date of such deposit been      
surrendered by the holders thereof in connection with such redemption, in a     
custodial account with any chartered bank or trust company in Canada named in   
such notice, less any amounts withheld on account of tax required to be deducted
and withheld therefrom. Upon the later of such deposit being made and the       
Redemption Date, the Exchangeable Shares in respect whereof such deposit shall  
have been made shall be redeemed and the rights of the holders thereof after    
such deposit or Redemption Date, as the case may be, shall be limited to        
receiving the Total Redemption Price and such dividends for such Exchangeable   
Shares so deposited, against presentation and surrender of the said certificates
held by them, respectively, in accordance with the foregoing provisions. Upon   
such payment or deposit of the Total Redemption Price and the full amount of    
such dividends, the holders of the Exchangeable Shares shall thereafter be      
considered and deemed for all purposes to be holders of the Shire Ordinary      
Shares and/or Shire ADSs delivered to them or the custodian on their behalf.    

ARTICLE 8 
VOTING RIGHTS 

8.1   Except as required by applicable law and by Article 10 hereof, the holders
of the Exchangeable Shares shall not be entitled as such to receive notice of or
to attend any meeting of the shareholders of the Corporation or to vote at any  
such meeting.                                                                   

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ARTICLE 9 
AMENDMENT AND APPROVAL

9.1   The rights, privileges, restrictions and conditions attaching to the      
Exchangeable Shares may be added to, changed or removed but only with the       
approval of the holders of the Exchangeable Shares given as hereinafter         
specified.                                                                      

9.2   Any approval given by the holders of the Exchangeable Shares to add to,   
change or remove any right, privilege, restriction or condition attaching to the
Exchangeable Shares or any other matter requiring the approval or consent of the
holders of the Exchangeable Shares shall be deemed to have been sufficiently    
given if it shall have been given in accordance with applicable law subject to a
minimum requirement that such approval be evidenced by resolution passed by not 
less than two-thirds of the votes cast on such resolution at a meeting of       
holders of Exchangeable Shares duly called and held at which the holders of at  
least 25% of the outstanding Exchangeable Shares at that time are present or    
represented by proxy; provided that if at any such meeting the holders of at    
least 25% of the outstanding Exchangeable Shares at that time are not present or
represented by proxy within one-half hour after the time appointed for such     
meeting, then the meeting shall be adjourned to such date not less than five    
days thereafter and to such time and place as may be designated by the Chairman 
of such meeting. At such adjourned meeting the holders of Exchangeable Shares   
present or represented by proxy thereat may transact the business for which the 
meeting was originally called and a resolution passed thereat by the affirmative
vote of not less than two-thirds of the votes cast on such resolution at such   
meeting shall constitute the approval or consent of the holders of the          
Exchangeable Shares.                                                            

ARTICLE 10
RECIPROCAL CHANGES, ETC.
IN RESPECT OF SHIRE ORDINARY SHARES 

10.1   Each holder of an Exchangeable Share acknowledges that the Exchangeable  
Share Support Agreement provides, in part, that Shire will not without the prior
approval of the Corporation and the prior approval of the holders of the        
Exchangeable Shares given in accordance with Section 9.2 of these share         
provisions:                                                                     

 (a) issue or distribute Shire Ordinary Shares (or securities exchangeable
  for or convertible into or carrying rights to acquire Shire Ordinary
Shares) to the holders of all or substantially all of the then    
 outstanding Shire Ordinary Shares by way of share dividend or other
       distribution, other than an issue of Shire Ordinary Shares (or securities
      exchangeable for or convertible into or carrying rights to acquire Shire
  Ordinary Shares) to holders of Shire Ordinary Shares who exercise an
 option to receive dividends in Shire Ordinary Shares (or securities
      exchangeable for or convertible into or carrying rights to acquire Shire
Ordinary Shares) in lieu of receiving cash dividends;             

    (b) issue or distribute rights, options or warrants to the holders of all or
       substantially all of the then outstanding Shire Ordinary Shares entitling
       them to subscribe for or to purchase Shire Ordinary Shares (or securities
      exchangeable for or convertible into or carrying rights to acquire Shire
Ordinary Shares); or                                              

 (c) issue or distribute to the holders of all or substantially all of the
then outstanding Shire Ordinary Shares:                           

        (i) shares or securities of Shire of any class other than Shire Ordinary
         Shares (other than shares convertible into or exchangeable for or
carrying rights to acquire Shire Ordinary Shares);      

(ii) rights, options or warrants other than those referred to in
Section 10.1(b) above;                                

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(iii) evidences of indebtedness of Shire; or                      

(iv) assets of Shire,                                           

unless the economic equivalent on a per share basis of such rights, options,    
securities, shares, evidences of indebtedness or other assets is issued or      
distributed simultaneously to holders of the Exchangeable Shares.               

10.2   Each holder of an Exchangeable Share acknowledges that the Exchangeable  
Share Support Agreement further provides, in part, that Shire will not without  
the prior approval of the Corporation and the prior approval of the holders of  
the Exchangeable Shares given in accordance with Section 9.2 of these share     
provisions:                                                                     

    (a) subdivide, redivide or change the then outstanding Shire Ordinary Shares
into a greater number of Shire Ordinary Shares;                   

(b) reduce, combine, consolidate or change the then outstanding Shire   
Ordinary Shares into a lesser number of Shire Ordinary Shares; or 

 (c) reclassify or otherwise change the Shire Ordinary Shares or effect an
     amalgamation, merger, reorganization or other transaction affecting the
Shire Ordinary Shares,                                            

unless the same or an economically equivalent change shall simultaneously be    
made to, or in, the rights of the holders of the Exchangeable Shares. The       
Exchangeable Share Support Agreement further provides, in part, that the        
aforesaid provisions of the Exchangeable Share Support Agreement shall not be   
changed without the approval of the holders of the Exchangeable Shares given in 
accordance with Section 9.2 of these share provisions.                          

ARTICLE 11
ACTIONS BY THE CORPORATION UNDER SUPPORT AGREEMENT

11.1   The Corporation will take all such actions and do all such things as     
shall be necessary or advisable to perform and comply with and to ensure        
performance and compliance by Shire, CallCo and the Corporation with all        
provisions of the Exchangeable Share Support Agreement applicable to Shire,     
CallCo and the Corporation, respectively, in accordance with the terms thereof  
including, without limitation, taking all such actions and doing all such things
as shall be necessary or advisable to enforce to the fullest extent possible for
the direct benefit of the Corporation all rights and benefits in favour of the  
Corporation under or pursuant to such agreement.                                

11.2   The Corporation shall not propose, agree to or otherwise give effect to  
any amendment to, or waiver or forgiveness of its rights or obligations under,  
the Exchangeable Share Support Agreement without the approval of the holders of 
the Exchangeable Shares given in accordance with Section 9.2 of these share     
provisions other than such amendments, waivers and/or forgiveness as may be     
necessary or advisable for the purposes of:                                     

  (a) adding to the covenants of the other parties to such agreement for the
     protection of the Corporation or the holders of the Exchangeable Shares
thereunder;                                                       

(b) making such provisions or modifications not inconsistent with such  
   agreement as may be necessary or desirable with respect to matters or
  questions arising thereunder which, in the good faith opinion of the
      Board of Directors, it may be expedient to make, provided that the Board
      of Directors shall be of the good faith opinion, after consultation with
     counsel, that such provisions and modifications will not be prejudicial
to the interests of the holders of the Exchangeable Shares; or    

 (c) making such changes in or corrections to such agreement which, on the
   advice of counsel to the Corporation, are required for the purpose of
curing or correcting any ambiguity or defect or                   

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      inconsistent provision or clerical omission or mistake or manifest error
     contained therein, provided that the Board of Directors shall be of the
       good faith opinion, after consultation with counsel, that such changes or
    corrections will not be prejudicial to the interests of the holders of
the Exchangeable Shares.                                          

ARTICLE 12
LEGEND; CALL RIGHTS 

12.1   The certificates evidencing the Exchangeable Shares shall contain or have
affixed thereto a legend in form and on terms approved by the Board of          
Directors, with respect to the Exchangeable Share Support Agreement, the        
provisions of the Plan of Arrangement relating to the Liquidation Call Right,   
the Redemption Call Right and the Shire Call Right, and the Voting and Exchange 
Trust Agreement (including the provisions with respect to the voting rights,    
exchange right and automatic exchange thereunder).                              

12.2   Each holder of an Exchangeable Share, whether of record or beneficial, by
virtue of becoming and being such a holder shall be deemed to acknowledge each  
of the Liquidation Call Right, the Retraction Call Right and the Redemption Call
Right, in each case, in favour of CallCo, and the overriding nature thereof in  
connection with the liquidation, dissolution or winding-up of the Corporation or
the retraction or redemption of Exchangeable Shares, as the case may be, and the
Shire Call Right in favour of Shire and to be bound thereby in favour of CallCo 
or Shire, as the case may be, as therein provided.                              

ARTICLE 13
NOTICES 

13.1   Any notice, request or other communication to be given to the Corporation
by a holder of Exchangeable Shares shall be in writing and shall be valid and   
effective if given by mail (postage prepaid) or by telecopy or by delivery to   
the registered office of the Corporation and addressed to the attention of the  
President. Any such notice, request or other communication, if given by mail,   
telecopy or delivery, shall only be deemed to have been given and received upon 
actual receipt thereof by the Corporation.                                      

13.2   Any presentation and surrender by a holder of Exchangeable Shares to the 
Corporation or the Transfer Agent of certificates representing Exchangeable     
Shares in connection with the liquidation, dissolution or winding-up of the     
Corporation or the retraction or redemption of Exchangeable Shares shall be made
by registered mail (postage prepaid) or by delivery to the registered office of 
the Corporation or to such office of the Transfer Agent as may be specified by  
the Corporation, in each case, addressed to the attention of the President of   
the Corporation. Any such presentation and surrender of certificates shall only 
be deemed to have been made and to be effective upon actual receipt thereof by  
the Corporation or the Transfer Agent, as the case may be. Any such presentation
and surrender of certificates made by registered mail shall be at the sole risk 
of the holder mailing the same.                                                 

13.3   Any notice, request or other communication to be given to a holder of    
Exchangeable Shares by or on behalf of the Corporation shall be in writing and  
shall be valid and effective if given by mail (postage prepaid) or by delivery  
to the address of the holder recorded in the securities register of the         
Corporation or, in the event of the address of any such holder not being so     
recorded, then at the last known address of such holder. Any such notice,       
request or other communication, if given by mail, shall be deemed to have been  
given and received on the third Business Day following the date of mailing and, 
if given by delivery, shall be deemed to have been given and received on the    
date of delivery. Accidental failure or omission to give any notice, request or 
other communication to one or more holders of Exchangeable Shares shall not     
invalidate or otherwise alter or affect any action or proceeding to be taken by 
the Corporation pursuant thereto.                                               

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13.4   If the Corporation determines that mail service is or is threatened to be
interrupted at the time when the Corporation is required or elects to give any  
notice to the holders of Exchangeable Shares hereunder, the Corporation shall,  
notwithstanding the provisions hereof, give such notice by means of publication 
in THE GLOBE AND MAIL, national edition, or any other English language daily    
newspaper or newspapers of general circulation in Canada and in a French        
language daily newspaper of general circulation in the Province of Quebec, once 
in each of two successive weeks, and notice so published shall be deemed to have
been given on the latest date on which the first publication has taken place.   

  If, by reason of any actual or threatened interruption of mail service due
to strike, lock-out or otherwise, any notice to be given to the Corporation     
would be unlikely to reach its destination in a timely manner, such notice shall
be valid and effective only if delivered personally to the Corporation in       
accordance with Section 13.1 or 13.2, as the case may be.                       

ARTICLE 14
WITHHOLDING RIGHTS

14.1   The Corporation, CallCo, Shire and the Exchange Agent will be entitled to
deduct and withhold from any dividend or consideration otherwise payable to any 
holder of Exchangeable Shares, such amounts as the Corporation, 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 Exchangeable Shares in respect of which such deduction
and withholding was made, provided that such withheld amounts are actually      
remitted to the appropriate tax 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, the          
Corporation, 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 the Corporation, CallCo, Shire or the Exchange      
Agent, as the case may be, to enable it to comply with such deduction or        
withholding requirement and the Corporation, 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. The Corporation shall not be entitled to withhold
amounts on dividends payable to holders of Exchangeable Shares pursuant to the  
United States INTERNAL 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.                                                           

ARTICLE 15
STAMP TAX 

15.1 (a) Notwithstanding any other provision herein but subject to              
     Section 15.1(b) below, holders of Exchangeable Shares or Persons to
        whom Exchangeable Shares are issued or transferred (in each case other
       than Shire, its Affiliates, the Transfer Agent or the Exchange 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, subject to
      Section 15.1(b) below, 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 Transfer Agent or
      the Exchange Agent) shall be responsible for any and all Stamp Taxes
         payable in connection with the transfer or issuance of such securities.
In no event, subject to Section 15.1(b) below, will Shire, its
         Affiliates, the Transfer Agent or the Exchange Agent be responsible for
      any Stamp Taxes and Shire, its Affiliates, the Transfer Agent and/or
        the Exchange 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.                  

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    (b) Shire shall be responsible for (i) any United Kingdom stamp duty reserve
tax payable on the issue or transfer of Shire Ordinary Shares to a
    depository or to a nominee or agent for a depository pursuant to these
   share provisions, (ii) any United Kingdom stamp duty reserve tax that
      arises in respect of the transfer of Exchangeable Shares in exchange for
       Shire ADSs and/or Shire Ordinary Shares (an "Exchange"), (iii) any United
Kingdom stamp duty reserve tax that Shire or any of its Affiliates
   requires to be paid on an Exchange, and (iv) any United Kingdom stamp
   duty payable on an issue of Exchangeable Shares to a holder of common
shares of BioChem pursuant to these share provisions.             

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SCHEDULE A
NOTICE OF RETRACTION

To Shire Acquisition Inc. (the "Corporation") and 3829359 Canada Inc.           
("CallCo").                                                                     

This notice is given pursuant to Article 6 of the provisions (the "Share
Provisions") attaching to the Exchangeable Shares of the Corporation represented
by the attached certificate and all capitalized words and expressions used in   
this notice that are defined in the Share Provisions have the meanings ascribed 
to such words and expressions in such Share Provisions.                         

The undersigned hereby notifies the Corporation that, subject to the    
Retraction Call Right referred to below, the undersigned desires to have the    
Corporation redeem in accordance with Article 6 of the Share Provisions:        

/ / all share(s) represented by the attached share certificate; or        

/ / ______________ share(s) only.                                         

The undersigned hereby notifies the Corporation that the Retraction Date
shall be _______________________________________________________________________

NOTE: The Retraction Date must be a Business Day and must not be less than 10   
  Business Days nor more than 15 Business Days after the date upon which
  this notice is received by the Corporation. If no such Business Day is
specified above, the Retraction Date shall be deemed to be the 15th 
Business Day after the date on which this notice is received by the 
Corporation.                                                        

   The undersigned acknowledges the overriding Retraction Call Right of CallCo
to purchase all but not less than all the Retracted Shares from the undersigned 
and that this notice is and shall be deemed to be a revocable offer by the      
undersigned to sell the Retracted Shares to CallCo in accordance with the       
Retraction Call Right on the Retraction Date for the Purchase Price and on the  
other terms and conditions set out in Section 6.3 of the Share Provisions. This 
notice of retraction, and this offer to sell the Retracted Shares to CallCo, may
be revoked and withdrawn by the undersigned only by notice in writing given to  
the Corporation at any time before the close of business on the Business Day    
immediately preceding the Retraction Date.                                      

   The undersigned acknowledges that if, as a result of solvency provisions of
applicable law, the Corporation is unable to redeem all Retracted Shares, and   
provided that CallCo shall not have exercised the Retraction Call Right with    
respect to the Retracted Shares, the undersigned will be deemed to have         
exercised the Exchange Right (as defined in the Voting and Exchange Trust       
Agreement) so as to require Shire to purchase the unredeemed Retracted Shares.  

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    The undersigned hereby represents and warrants to CallCo and the Corporation
that the undersigned:                                                           

/ / is                                                                    

(select one)                                            

/ / is not                                                                

a non-resident of Canada for purposes of the INCOME TAX ACT (Canada). THE       
UNDERSIGNED ACKNOWLEDGES THAT IN THE ABSENCE OF AN INDICATION THAT THE          
UNDERSIGNED IS NOT A NON-RESIDENT OF CANADA, WITHHOLDING ON ACCOUNT OF CANADIAN 
TAX MAY BE MADE IF THE RETRACTED SHARES ARE NOT LISTED ON A PRESCRIBED STOCK    
EXCHANGE FOR THE PURPOSES OF THE INCOME TAX ACT (CANADA), FROM AMOUNTS PAYABLE  
TO THE UNDERSIGNED ON THE REDEMPTION OR PURCHASE OF THE RETRACTED SHARES.       

 The undersigned hereby represents and warrants to CallCo, the Corporation
and Shire that the undersigned has good title to, and owns, the share(s)        
represented by this certificate to be acquired by CallCo or the Corporation, as 
the case may be, free and clear of all liens, claims and encumbrances.          

                                                                [Download Table]
                                                                             
(Date)               (Signature of Shareholder)      (Guarantee of Signature)

 / / Please check box if the securities and any cheque(s) resulting from the
     retraction or purchase of the Retracted Shares are to be held for pick-up
      by the shareholder from the Transfer Agent, failing which the securities
     and any cheque(s) will be mailed to the last address of the shareholder
as it appears on the register.                                    

NOTE: This panel must be completed and the attached share certificate, together 
     with such additional documents as the Transfer Agent may require, must be
    deposited with the Corporation or the Transfer Agent. The securities and
    any cheque(s) resulting from the retraction or purchase of the Retracted
Shares will be issued and registered in, and made payable to,       
      respectively, the name of the shareholder as it appears on the register of
    the Corporation and the securities and any cheque(s) resulting from such
     retraction or purchase will be delivered to such shareholder as indicated
 above, unless the form appearing immediately below is duly completed.

Date: ____________________________________                                      

Name of Person in Whose Name Securities or Cheque(s)                            

Are to be Registered, Issued or Delivered (please print): ______________________

Street Address or P.O. Box: ____________________________________________________

Signature of Shareholder: ______________________________________________________

City, Province and Postal Code: ________________________________________________

Signature Guaranteed by: _______________________________________________________

NOTE: If this notice of retraction is for less than all of the shares           
   represented by the attached certificate, a certificate representing the
   remaining share(s) of the Corporation represented by the attached share
    certificate will be issued and registered in the name of the shareholder
as it appears on the register of the Corporation, unless the Share  
   Transfer Power on the share certificate is duly completed in respect of
such share(s).                                                      

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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:                                            

W I T N E S S E T H : 

 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 value ascribed to such consideration                   

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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 Exchange, the Canadian      
Securities Laws, the applicable US and UK securities laws or other applicable   
Regulatory Laws, as the case may be.                                            

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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.                                                        

   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 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                                              

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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.                                                              

8.  ADJUSTMENT UPON CHANGES IN CAPITALIZATION; RIGHTS PLANS.                    

  (a) (i) 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.                                     

    (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                    

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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.                                                        

9.  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.                                                                     

10. 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 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.                        

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11. 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.                                                                        

12. 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.                                                           

13. 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.                  

14. 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.                                                 

15. 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.                                

16. 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.                                             

17. 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 receipt, to the parties at the addresses 
specified below (or at such other address for a party as shall be specified by  
like                                                                            

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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                                         

18. 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).                    

19. 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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20. 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.                                                                       

21. 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.                                                                  

22. 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.                                                              

23. CURRENCY.                                                                   

 Except as expressly set forth otherwise, all sums of money referred to in
this Agreement are expressed in lawful money of Canada.                         

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: /s/ ROLF STAHEL
                                 -------------------------------------

     Name: Rolf Stahel

                  Title: Chief Executive Officer

       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 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                                               

D-1 

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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.                      

D-2 

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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

D-3 

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SHIRE PHARMACEUTICALS GROUP plc 

MORGAN GUARANTY TRUST COMPANY OF NEW YORK, DEPOSITARY 
P.O. BOX 9383, BOSTON, MA 02205-9958

VOTING INSTRUCTION CARD 

The undersigned, a registered holder of American Depositary Receipt(s)          
representing Ordinary Shares of Shire Pharmaceuticals Group plc, of record      
February 12, 2001, hereby requests and authorizes Morgan Guaranty Trust Company 
of New York, Depositary, through its Nominee or Nominees, to vote or execute a  
proxy to vote the underlying Ordinary Shares of the Company represented by such 
American Depositary Receipts registered in the name of the undersigned at the   
Extraordinary General Meeting of Shareholders of the Company to be held at 35   
New Broad Street, London EC2M 1SQ on Thursday, March 29, 2001, beginning at 3:00
p.m., or any adjournment thereof.                                               

NOTE: In order to have the aforesaid shares voted, this Voting Instruction Card 
MUST be received before 3:00 p.m., March 23, 2001.                              

--------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED 
ENVELOPE. 
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Please sign this Voting Instruction Card exactly as your name(s) appear(s) on   
the books of the Depositary. Joint owners should each sign personally. Trustees 
and other fiduciaries should indicate the capacity in which they sign, and where
more than one name appears, a majority must sign. If a corporation, this        
signature should be that of an authorized officer who should state his or her   
title.                                                                          
--------------------------------------------------------------------------------

HAS YOUR ADDRESS CHANGED?                    DO YOU HAVE ANY COMMENTS?          

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

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

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

ORDINARY RESOLUTION 

1. To increase the authorized share capital,      
  approve the acquisition of BioChem Pharma Inc.
("BioChem") and the terms of the Merger     
 Agreement including the conversion of options
and rights held by BioChem option and rights
 holders and to authorize the directors of the
Company to take all necessary or appropriate
steps to complete the acquisition, authorize
  the directors of the Company to allot ordinary
shares up to an aggregate nominal amount of 
L____, and create new special voting shares.

SPECIAL RESOLUTION

2. To authorize the directors of the Company to   
allot equity securities for cash free of    
statutory pre-emption rights.               

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|X| PLEASE MARK VOTES                                                           
AS IN THIS EXAMPLE                                                      

                                                        [Enlarge/Download Table]

-----------------------------------------------                           ORDINARY RESOLUTION                                       
        SHIRE PHARMACEUTICALS GROUP plc                                   ----------------------------------------------------------
-----------------------------------------------                                            For   Against   Abstain                  
                                                                                                                                    
                                                                          Resolution 1     |_|     |_|       |_|                    

-----------------------------------------------                                                                                     
PLEASE REFER TO THE REVERSE OF THIS CARD                                                                                            
FOR THE RESOLUTIONS TO BE VOTED AT THE MEETING.                                                                                     
-----------------------------------------------                                                                                     

CONTROL NUMBER:                                                           SPECIAL RESOLUTION                                        
                                                                          ----------------------------------------------------------
                                                                                           For   Against   Abstain                  

                                                                          Resolution 2     |_|     |_|       |_|                    

                                                                          Mark box at right if an address change or              |_|
                                                                          comment has been noted on the reverse of this card.       

 Please be sure to sign and date this Voting        Date                                                                            
 Instruction Card.                                                                                                                  
 ----------------------------------------------------------------                                                                   
|                                                                |                                                                  
|                                                                |        Mark box at right if you wish to give a discretionary  |_|
 ---ADR Holder sign here-------------------Co-owner sign here----         proxy to a person designated by the Company. PLEASE       
                                                                          NOTE: Marking this box voids any other instructions       
                                                                          indicated in the items hereon.                            

DETACH CARD                                                                                                              DETACH CARD

                                 TO THE REGISTERED HOLDERS OF AMERICAN DEPOSITARY RECEIPTS ("ADRs")                                 
                                                  REPRESENTING ORDINARY SHARES OF                                                   
                                                  SHIRE PHARMACEUTICALS GROUP plc                                                   

Morgan Guaranty Trust Company of New York (the "Depositary") has received advice that an Extraordinary General Meeting of           
Shareholders (the "Meeting") of Shire Pharmaceuticals Group plc (the "Company") will be held at 35 New Broad Street, London EC2M    
1SQ, on Thursday, March 29, 2001, beginning at 3:00 p.m., for the purposes set forth on the reverse of this card.                   

If you are desirous of having the Depositary, through its Nominee or Nominees, vote or execute a proxy to vote the Ordinary Shares  
represented by your American Depositary Receipt(s) for or against or to abstain from voting the Resolutions to be proposed at the   
Meeting, kindly execute and forward to Morgan Guaranty Trust Company of New York, Depositary, the attached Voting Instruction Card. 
The enclosed postage paid envelope is provided for this purpose. This Voting Instruction Card should be executed in such manner as  
to show clearly whether you desire the Nominee or the Nominees of the Depositary to vote for or against or to abstain from voting   
the Resolutions, as the case may be. You may include instructions to give a discretionary proxy to a person designated by the       
Company. The Voting Instruction Card MUST be forwarded in sufficient time to reach the Depositary before 3:00 p.m., New York City   
time, March 23, 2001. Only the registered holders of record at the close of business February 12, 2001 will be entitled to execute  
the attached Voting Instruction Card.                                                                                               

Morgan Guaranty Trust Company of New York, Depositary                                                                               

Dated: March 2, 2001                                                                                                                

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SHIRE PHARMACEUTICALS GROUP PLC 
("THE COMPANY") 
PROXY FORM FOR USE AT THE EXTRAORDINARY GENERAL MEETING TO BE HELD
ON 29 MARCH, 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*________________________________________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 35 New Broad Street, London EC2M ISQ at 3.00p.m. (local time) on 29 March,   
2001 and at any adjournment thereof as indicated below.**                       

                                                        [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 rights held                         
                         by BioChem option and rights 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                                
                         L17,221,000, and create new special                           
                         voting shares                                                 

                         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                          

Signature(s) ______________________________ Dated ________________________, 2001

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.    

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

*   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.          

**  Completion and return of the form or proxy will not prevent you from        
  attending and voting at the meeting instead of your proxy, if you so wish.

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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.  Pursuant to Regulation 34 of the Uncertificated Securities Regulations 1995,
    the time by which a person must be entered on the register of members of the
 Company in order to have the right to attend or vote at the Extraordinary
  Meeting is 6.00p.m. on 27 March 2001. If the Extraordinary General Meeting
   is adjourned, the time by which a person must be entered on the register of
  members of the Company in order to have the right to attend or vote at the
adjourned meeting is 6.00p.m. two days preceding the date fixed for     
adjourned meeting. Changes to entries on the register of members of the 
   Company after 6.00 p.m. on 27 March 2001 will be disregarded in determining
the rights of any person to attend or vote at the meeting.              

5.  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, United
 Kingdom not less than 48 hours before the time appointed for the meeting.

2 

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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

TO THE SHAREHOLDERS OF SHIRE PHARMACEUTICALS GROUP PLC:                         

We have audited the accompanying consolidated balance sheets of Shire   
Pharmaceuticals Group plc and its subsidiaries as of December 31, 2000 and 1999,
and the related consolidated statements of income, comprehensive income,        
shareholders' investment and cash flows for the years ended December 31, 2000,  
1999 and 1998. These financial statements are the responsibility of the         
Company's management. Our responsibility is to express an opinion on these      
financial statements based on our audits.                                       

 We did not audit the financial statements for the year ended December 31,
1998 of Roberts Pharmaceutical Corporation, a company acquired during 1999 in a 
transaction accounted for as a pooling of interests. Such statements are        
included in the consolidated financial statements of Shire Pharmaceuticals Group
plc and reflect total assets and total revenues of 60% and 57% respectively for 
the year ended December 31, 1998. These statements were audited by other        
auditors whose report has been furnished to us and our opinion, insofar as it   
relates to amounts included for Roberts Pharmaceutical Corporation for the year 
ended December 31, 1998, is based solely upon the report of the other public    
accountants.                                                                    

We conducted our audits in accordance with auditing standards generally 
accepted in the United States. Those standards require that we plan and perform 
the audit to obtain reasonable assurance about whether the financial statements 
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An 
audit also includes assessing the accounting principles used and significant    
estimates made by management, as well as evaluating the overall financial       
statement presentation. We believe that our audits and the report of the other  
public accountants provide a reasonable basis for our opinion.                  

In our opinion, based on our audit and the report of the other public   
accountants, the financial statements referred to above present fairly, in all  
material respects, the financial position of Shire Pharmaceuticals Group plc and
subsidiaries as of December 31, 2000 and 1999, and the results of their         
operations and their cash flows for the years ended December 31, 2000, 1999 and 
1998 in conformity with accounting principles generally accepted in the United  
States.                                                                         

Our audit opinion was made for the purpose of forming an opinion on the 
basic financial statements taken as a whole. The schedule listed in the index of
financial statements is presented for the purposes of complying with the        
Securities and Exchange Commission's rules and is not part of the basic         
financial statements. This schedule has been subjected to the auditing          
procedures applied in the audit of the basic financial statements and, in our   
opinion based on our audit and report of the other public accountants, fairly   
states in all material aspects, the financial data required to be set forth     
therein in relation to the basic financial statements taken as a whole.         

                       /s/ ARTHUR ANDERSEN

Reading, England                                                                
February 14, 2001                                                               

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AUDITORS' REPORT                                                                

To the Shareholders of BioChem Pharma Inc.                                      

    We have audited the consolidated balance sheets of BioChem Pharma Inc. as at
December 31, 2000 and 1999 and the consolidated statements of earnings, retained
earnings and cash flows for the years ended December 31, 2000, 1999 and 1998.   
These financial statements are the responsibility of the Company's management.  
Our responsibility is to express an opinion on these financial statements based 
on our audits.                                                                  

We conducted our audits in accordance with generally accepted auditing  
standards in Canada for the years ended December 31, 2000, 1999 and 1998 and in 
accordance with auditing standards generally accepted in the United States of   
America for the year ended December 31, 2000. Those standards require that we   
plan and perform the audit to obtain reasonable assurance about whether the     
financial statements are free of material misstatement. An audit includes       
examining, on a test basis, evidence supporting the amounts and disclosures in  
the financial statements. An audit also includes assessing the accounting       
principles used and significant estimates made by management, as well as        
evaluating the overall financial statement presentation.                        

  In our opinion, these consolidated financial statements present fairly, in
all material respects, the financial position of the Company as at December 31, 
2000 and 1999 and the results of its operations and its cash flows for the years
ended December 31, 2000, 1999 and 1998 in accordance with generally accepted    
accounting principles in Canada.                                                

On January 25, 2001, we also reported separately to the shareholders of 
BioChem Pharma Inc. on consolidated financial statements for the same period,   
expressed in U.S. dollars, prepared in accordance with generally accepted       
accounting principles in the United States of America.                          

/s/ RAYMOND CHABOT GRANT THORNTON                                               

General partnership                                                             
Chartered accountants                                                           

Montreal, Quebec                                                                
January 25, 2001                                                                

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AUDITORS' REPORT                                                                

To the Shareholders of BioChem Pharma Inc.                                      

    We have audited the consolidated balance sheets of BioChem Pharma Inc. as at
December 31, 1999 and 1998 and the consolidated statements of earnings, retained
earnings and cash flows for the years ended December 31, 1999, 1998 and 1997.   
These financial statements are the responsibility of the Company's management.  
Our responsibility is to express an opinion on these financial statements based 
on our audits.                                                                  

We conducted our audits in accordance with generally accepted auditing  
standards in Canada. Those standards require that we plan and perform the audit 
to obtain reasonable assurance about whether the financial statements are free  
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit    
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement       
presentation.                                                                   

  In our opinion, these consolidated financial statements present fairly, in
all material respects, the financial position of the Company as at December 31, 
1999 and 1998 and the results of its operations and its cash flows for the years
ended December 31, 1999, 1998 and 1997 in accordance with generally accepted    
accounting principles in Canada.                                                

/s/ RAYMOND CHABOT GRANT THORNTON                                               

General partnership                                                             
Chartered accountants                                                           

Montreal, Quebec, Canada                                                        
January 26, 2000                                                                

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Shire Pharmaceuticals Group plc                                                 
Hampshire International Business Park                                           
Chineham Basingstoke Hampshre RG24 8EP UK                                       
Tel +44 1256 894000 Fax +44 1256 894708                                         
http://www.shire.com                                                            

                                                      [SHIRE LOGO]

                                                     March 1, 2001

Dear Holder of American Depositary Receipts of Shire                            
Pharmaceuticals Group plc:                                                      

We enclose a Proxy Statement relating to the extraordinary general meeting of   
shareholders of Shire Pharmaceuticals Group plc ("Shire") to be held on         
March 29, 2001 called to consider and approve the proposed merger between       
Shire and BioChem Pharma Inc. We also enclose Shire's Circular and Listing      
Particulars, including the notice of extraordinary general meeting, prepared    
under the rules of the United Kingdom Listing Authority with respect to the     
shareholders' meeting. Please read the enclosed documents as they contain       
important information with respect to the proposed merger and the meeting.      

To vote at the meeting, holders of the American Depositary Receipts should      
complete the enclosed Voting Instruction Card for holders of American           
Depositary Receipts.                                                            

Yours sincerely                                                                 

/s/ Rolf Stahel                                                                 
-------------------                                                             
Rolf Stahel                                                                     

Enc                                                                             

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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 or transmitted to, 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 5 to 14 of this document   
and which recommends you to vote in favour of the ordinary resolution and the   
special resolution 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.         
Conditional listing approval to list the Shire Exchangeco Shares on the         
Toronto Stock Exchange was given on 22 February 2001. 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. (London time) on 2 April 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
260,621,527 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 35 New Broad Street, London EC2M 1SQ, England at 3.00 p.m.        
(London time) on 29 March 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, England no later     
than 3.00 p.m. (London time) on 27 March 2001.                                  

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Contents

                                                        [Enlarge/Download Table]

                                                                                                                   Page
                                                                                                                       
Part I            Letter from the Chairman of Shire                                                                   5

Part II           Description of BioChem                                                                             15
Part III          BioChem historical financial results under Canadian GAAP for the three years ended 31 December       
                  2000                                                                                               24

Part IV           Reconciliation of BioChem financial results                                                        49
                  (a) (i)Reconciliation of BioChem financial results to US GAAP as applied by Shire for the three      
                         years ended 31 December 2000                                                                49

                   (ii)Unaudited reconciliation of BioChem's Canadian GAAP, CAN$ financial information for the         
                       year ended 31 December 2000 to US GAAP as applied by Shire                                    55
                  (b) Reconciliation of BioChem financial results to UK GAAP as applied by Shire for the three         
                      years ended 31 December 2000                                                                   58

Part V            Financial information on Shire - under US GAAP                                                     67
Part VI           Financial information on Shire - under UK GAAP                                                     94

Part VII          Unaudited pro forma statements                                                                     99
                  (a) Unaudited pro forma statement of combined condensed balance sheet under US GAAP as at 31         
                      December 2000                                                                                  99

                  (b) Unaudited pro forma statement of net assets under UK GAAP as at 31 December 2000              102
Part VIII         Details of the Merger Agreement and Special Voting Shares                                         105

Part IX           Statutory and general information                                                                 115
Definitions                                                                                                         149

Glossary                                                                                                            155
Notice of Extraordinary General Meeting                                                                             161

Cautionary Statement Concerning Forward-Looking Statements

Statements contained in this document that are not historical facts are         
forward-looking statements that involve risks and uncertainties, including but  
not limited to, risks associated with the inherent uncertainty of               
pharmaceutical research, product development and commercialisation, the impact  
of competitive products, patents, and other risks and uncertainties, including  
those detailed from time to time in periodic reports, including the Annual      
Report filed on Form 10-K by Shire with the SEC.                                

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Expected Timetable of Principal Events in the United Kingdom

                                                                [Download Table]

                                                                                
Latest time and date for receipt of Forms          3.00 p.m. (London time) on 27
of Proxy                                                              March 2001

Extraordinary General Meeting                      3.00 p.m. (London time) on 29
                                                                      March 2001

Admission and dealings in New Ordinary              8.00 a.m. (London time) on 2
Shares commence on the London Stock                                   April 2001
Exchange                                                                        

New Ordinary Shares credited to CREST                               2 April 2001
accounts (where applicable)                                                     

Despatch by post of definitive share                                  April 2001
certificates (where applicable)                                                 

Expected Timetable of Principal Events in Canada

                                                                [Download Table]

                                                                                
BioChem Shareholders' meeting held                     9.00 a.m. (Montreal time)
to approve the Merger                                              29 March 2001

Superior Court of Quebec hearing                     (on or about) 29 March 2001
of final order for approval of the                                              
Arrangement                                                                     

Filing of Articles of Arrangement                    (on or about) 30 March 2001
under the Canada Business                                                       
Corporations Act                                                                

Effective date of the Arrangement                    (on or about) 30 March 2001
under the Canada Business                                                       
Corporations Act                                                                

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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
                             England

Supporting Financial Adviser                                                    

                                              Bear, Stearns & Co. Inc.
                                     245 Park Avenue
                              New York
                                    New York 10167
                         USA

Joint Brokers                                                                   

                                                 Merrill Lynch International
                                          20 Farringdon Street
                                     London EC1M 3NH
                             England

                                            WestLB Panmure Limited
                                         35 New Broad Street
                                     London EC2M 1SQ
                             England

Legal Advisers (England)                           Slaughter and May            
                                          35 Basinghall Street
                                     London EC2V 5DB
                             England

Legal Advisers (US)                                                             

                                             Cahill Gordon & Reindel
                                    80 Pine Street
                              New York
                                    New York 10005
                         USA
                                       McCarthy Tetrault
                                      1170 Peel Street
Legal Advisers (Canada)                            Montreal                     
                            Quebec
                                    Canada H3B 4S8

Auditors and Reporting Accountants                                              
                                     Arthur Andersen
                                  Abbots House
                                  Abbey Street
                                     Reading RG1 3BD
                             England

Registrars                                                                      

                                           Lloyds TSB Registrars
                                  The Causeway
                              Worthing
                                 West Sussex
                              BN99 3UH
                             England

Principal Bankers                                  Barclays Bank plc            
                                PO Box 756
                            Slough
                                       Berkshire SL1 4SG
                             England

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PART I

Letter from the Chairman of Shire 

[graphic]                                                                       

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 (Group Finance Director),                                           
Dr J W Totten (Group 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)                                               

                                                                  1 March 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 27 February 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 approximately $8.8 billion ((L)6.1 billion). The Enlarged Group will         
possess an enhanced pipeline in its selected areas of CNS, oncology, 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 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, pursuant to   
which each BioChem Shareholder will have the choice of receiving as             
consideration for each BioChem Share:                                           

o     a number of Ordinary Shares equal to the exchange ratio in respect of     
the Merger (as described below);                                    

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 1 Shire
    Exchangeco Share for 3 Ordinary Shares or 1 Shire Exchangeco Share for 1
ADS;                                                                

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

o     a combination of the above.                                               

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 (as described more fully in Part VIII of this         
document). Each BioChem Shareholder otherwise entitled to a fractional          
interest in a Shire Exchangeco Share, Shire ADS or Shire Ordinary Share will    
receive from Exchangeco a cash payment equal to such BioChem Shareholder's pro  
rata portion of the net proceeds after expenses received upon the sale of       
whole shares representing an accumulation of all fractional interests in        
Consideration Shares to which all such BioChem Shareholders would otherwise be  
entitled.                                                                       

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 VIII 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 on an Average Shire ADS price of $56.125 (being the closing price of a    
Shire ADS on 27 February 2001, the latest practicable date prior to the         
publication of this document) the share-for-share exchange would value BioChem  
at approximately $3,757 million ((L)2,609 million), and would involve the       
issue of approximately 200.8 million New Ordinary Shares (assuming all          
existing BioChem Shareholders exchange their BioChem Shares for New Ordinary    
Shares pursuant to the Merger and excluding any issue of BioChem Shares as      
referred to in the paragraph below or to be issued pursuant to the exercise of  
options under the BioChem Stock Option Plans or other rights), with existing    
Shire Shareholders owning approximately 44 per cent of the Enlarged Group.      

The number of Consideration Shares to be issued by Shire might increase as a    
result of the exercise by BioChem Shareholders of their statutory dissent       
rights under Canadian law. Such dissent rights confer upon BioChem              
Shareholders the ability to dissent from the plan of arrangement to the         
proposed Merger in which event, provided the aggregate number of shares held    
by dissenting BioChem Shareholders is less than 5 per cent of BioChem's issued  
share capital, the proposed Merger will proceed but such shareholders will be   
entitled to receive fair value consideration. In the event that such dissent    
rights are exercised in respect of more than 2.4 per cent of BioChem Shares,    
then, in the absence of the issue of shares referred to below, the intended     
pooling of interest accounting treatment of the Merger will not be available.   
In these circumstances, Shire may request that BioChem issues up to 2,634,383   
additional BioChem Shares (representing approximately 2.6 per cent increase     
over the current issued share capital of BioChem) for cash by way of private    
placement to an independent third party. In such event, the board of directors  
of BioChem may, in its entire discretion and if deemed appropriate in the       
circumstances give effect to such request of Shire, taking into account the     
number of BioChem Options exercised since the date hereof. These shares will    
then be acquired by Shire pursuant to the Merger so as to allow the pooling of  
interest accounting treatment of the Merger to be available. Notwithstanding    
the above, Shire shall issue less than the total number of outstanding Shire    
Ordinary Shares in existence at the Effective Date.                             

Following the Merger Dr Francesco Bellini, the Hon. James Andrews Grant and Mr  
Gerard Veilleux will join your Board as non-executive Directors. Additionally,  
following the Merger, Dr Zola Horovitz, Mr Joseph Smith and Mr John Spitznagel  
will be leaving the Board.                                                      

Further details on these Proposed Directors and on BioChem are included in      
this letter under the heading "Changes to the Board" and in Parts II and IX of  
this document.                                                                  

Because of 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 or which in aggregate hold 9,087,385     
Ordinary Shares (directly or as ADSs) representing approximately 3.5 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.                                                                       

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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  
and 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 early stage development      
operation through which it has generated a pipeline of projects focused in      
three discrete specialty categories: oncology, vaccines and anti-virals. The    
principal benefits of the Merger are expected to be:                            

o     Diversification. The revenue growth of 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.                                                 

o     Increased financial resources. At 31 December 2000, Shire had             
    indebtedness of approximately $127.8 million and cash and investments of
approximately $186.3 million while BioChem had indebtedness of      
    approximately $86.1 million (CAN$129.1 million) and approximately $277.4
 million (CAN$416.1 million) in cash and investments. With revenues of
 $517.6 million and $157.5 million and net income of $76.2 million and
$135.5 million for the year ended 31 December 2000, for Shire and   
BioChem respectively, the Directors and Proposed Directors expect to
 have greatly enhanced cash with which to finance the Enlarged Group's
  R&D 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.     

o     A broadened and strengthened pipeline. The Enlarged Group will have 25    
   products in development of which 13 will be in pre-clinical and Phase I
development, and 12 will be in full clinical development or         
registration. The Merger will strengthen the product pipeline in the
  areas of oncology and central nervous system disorders with a total of
   15 products in development in these areas and will broaden the pipeline
  of products in development by the inclusion of 6 products in the areas
of anti-virals and vaccines.                                        

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 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 development activities: cost savings and future cost
    avoidance are expected to result from the establishment of a
       budget for the Enlarged Group; a review of the Enlarged Group's
       requirements for new development projects; a thorough review of
      the Enlarged Group's 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 first quarter of 2001 of     
approximately $175 million in connection with consummating the Merger and       
restructuring the Enlarged Group's combined operations. Taking into account     
the opportunity for synergies referred to above, which includes anticipated     
cost savings in the range of $10-15 million per annum,  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.                         

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Information on BioChem                                                          

BioChem is an international pharmaceutical company dedicated to the research    
and development and commercialisation 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 approximately 100 countries. Worldwide sales, including as a    
component of the double combination tablet Combivir, were $863.5 million in     
2000. 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, and combination therapies and combination       
products, such as Combivir and Trizivir, are protected by patent until 2018 in  
the US.                                                                         

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 histology and function in the majority of chronic         
hepatitis B patients and reduces progression to cirrhosis and reverses          
cirrhosis in a majority of late stage hepatitis B patients. Zeffix is now       
available in a number of countries including China, Japan, Taiwan, South Korea  
and the US. Worldwide sales of Zeffix were $106.9 million in 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 480 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 a vaccine in pre-clinical for Pseudomonas          
aeruginosa.                                                                     

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 programmes and related activities,          
CliniChem agreed to pay BioChem a monthly technology fee at the rate of         
CAN$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 per   
cent basis.                                                                     

BioChem acquired all of the outstanding CliniChem Class A common shares on 15   
December 2000 when CliniChem was merged into BioChem.                           

BioChem Summary Financial Information                                           

BioChem prepares its financial statements in Canadian dollars in accordance     
with Canadian GAAP with a reconciliation to US GAAP. In 2000, under US GAAP,    
BioChem had total revenue of $157.5 million and net income from continuing      
operations of $135.5 million. The only material difference between US GAAP as   
applied by Shire and BioChem relates to the treatment of CliniChem. Under       
Shire's accounting policies, CliniChem would be consolidated whereas under      
BioChem's policies, CliniChem was not consolidated. Had CliniChem been          
consolidated, BioChem development revenue would have been substantially         
reduced with the corresponding reduction in net income for the years ended 31   
December 1998, 1999 and 2000. The tables set out in Part IV(a)(ii) of this      
document summarise the financial performance of BioChem for 2000 reported in    
US dollars under US GAAP as applied by Shire.                                   

Investors should read the whole of this document and should not just rely on    
the summary above.                                                              

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Changes to the Board                                                            

Following the Merger, three members of the BioChem board of directors, Dr       
Francesco Bellini, the Hon. 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. At that time, approximately 30 per cent of the Shire Board   
of Directors will be former BioChem board members.                              

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 Hon. 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 Masters degree in public administration from Carleton      
University and a Bachelor of Commerce from Laval University.                    

Additionally, following the Merger, Dr Zola Horovitz, Mr Joseph Smith and Mr    
John Spitznagel will be leaving the Board.                                      

Information on Shire                                                            

Shire is a specialty pharmaceutical company focused primarily on four           
therapeutic areas: central nervous system disorders (CNS), oncology, metabolic  
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 product is the Calcichew range of prescription calcium and calcium/    
vitamin D products used as adjuncts in the treatment of osteoporosis. Reminyl,  
for the treatment of Alzheimer's disease, was launched in the UK in September   
2000.                                                                           

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) in respect of Reminyl 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 with the Directors expecting to announce     
shortly the first regulatory submission for approval. An NDA for SLI 381, a     
novel once-a-day formulation 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 has, in addition, 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 European Union 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-Pharm and of SPD420 from Cortex were    
announced.                                                          

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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 (CNS), oncology, 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. 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; Epivir, Combivir,    
Trizivir for the treatment of HIV infection/AIDS; Epivir -HBV for the           
treatment of Hepatitis B; 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, launched   
in September 2000; and, in Canada, Amatine; 3TC, Combivir and Heptovir          
(marketed in a partnership with GlaxoSmithKline); Second Look, a breast cancer  
diagnostics product recently launched in Europe (the Enlarged Group hopes to    
receive US FDA approval in 2001 for this product); 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.                                        

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, 3TC/Epivir and licensing and development fees. For the period ended 31  
December 2000 Shire had revenues of $517.6 million and net income (before an    
APB 25 stock option charge of $21.9 million) of $98.1 million. For the same     
period, BioChem had revenues of $157.5 million and net income (excluding net    
gains on sale of long-term investments and the write-off of in-process          
research and development) of $58.4 million. The data included within this       
section has been extracted from the financial information on Shire and BioChem  
set out in Parts V and III of this document. Investors should read the whole    
of this document and should not just rely on the summary above.                 

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 Enlarged Group is       
anticipated to continue its reliance on a 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                        

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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. In the vaccine area the Enlarged Group intends to continue to  
research new vaccines.                                                          

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             
approximately 460 sales representatives. 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]

Product(s)                            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/Republic of Ireland (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/Amatine                    Orthostatic hypotension     Nycomed               Shire/US and Canada                      
PACIS                                 Bladder cancer              BioChem               Paladin Labs/Canada                      

Anti-Virals                                                                                                                      
3TC/Epivir/Combivir/                  HIV/AIDS                    BioChem               GlaxoSmithKline/Worldwide, except Canada 
Trizivir                                                                                                                         
3TC/Combivir                          HIV/AIDS                    BioChem               BioChem and GlaxoSmithKline co-marketed  
                                                                                        in Canada                                
Zeffix/Epivir -HBV/                   Hepatitis B                 BioChem               GlaxoSmithKline/Worldwide, except Canada 
Heptovir/Heptodin                                                                                                                
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 and certain other European      
                                                                                        countries                                
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    

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or out-licensing if appropriate. Shire and BioChem spent approximately $160     
million on research and development in the year ended 31 December 2000, which   
represents approximately 24 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.                                                              

                                                        [Enlarge/Download Table]

Product(s)                                 Principal Indication(s)         Status                  Territorial Rights            
---------------------------------------     -----------------------------   ---------------------   -----------------------------
                                                                                                                                 
Treatments for CNS disorders                                                                                                     
Reminyl (galantamine)(1)                   Alzheimer's disease             In registration or      Global                        
                                                                           marketed                                              
SLI381                                     ADHD                            In registration         Global                        
Dirame                                     Moderate/severe pain            Phase III               Global                        
Frakefamide(2)                             Moderate/severe pain            Phase II                Global                        
SPD417                                     Bipolar disorder                Phase III               Global                        
SPD503                                     ADHD                            Phase I                 Global                        
SPD418                                     Epilepsy                        Phase I                 Global                        
SPD502                                     Stroke                          Phase I                 Global except Nordic and      
                                                                                                   Baltic countries              
SPD420                                     ADHD                            Phase I                 Global                        
SPD421                                     Epilepsy                        Phase I                 Global                        
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            UK and certain European       
                                                                                                   territories, South East 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         
SPD427                                     Oncology                        Pre-clinical            Global                        

Antivirals                                                                                                                       
BCH10618                                   HIV/AIDS                        Pre-clinical            Global                        
BCH13520                                   HIV/AIDS                        Pre-clinical            Global                        

Vaccines                                                                                                                         
Injectable and nasal influenza vaccines    Influenza                       Phase I                 North America                 
  derived from cell culture(3)                                                                                                   
Neisseria meningitidis vaccine             Meningitis, septicemia          Phase I                 Global                        
Pseudomonas aeruginosa vaccine             Bacteremia, opportunistic       Pre-clinical            Global                        
Streptococcus pneumoniae vaccine           Pneumonia, meningitis, otitis   Pre-clinical            Global                        
                                           media                                                                                 

(1) The licensee is Janssen.                                                    

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

(3) The licensee is GlaxoSmithKline (except in 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                                                      

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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. ("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 23 February 2001, SRI had been named as a defendant in approximately      
3,746 cases related to the "fen/phen" litigation. SRI had been dismissed from   
2,597 cases with approximately 818 further dismissals pending on the basis      
that the plaintiff was shown not to have used SRI's product. In approximately   
171 cases, of which 112 have been subsequently dismissed, it had been           
specifically alleged that the relevant plaintiff did use SRI's products.        

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.       

The Directors are confident that these claims will not result in any award of   
damages against SRI. Nevertheless, SRI and Shire intend 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 14 February 2001, Shire released its preliminary statement of results for    
the year ended 31 December 2000. On 25 January 2001, BioChem announced its      
audited full results for the year ended 31 December 2000.                       

2001 has seen several promising regulatory announcements for Shire, providing   
the opportunity to build further on 2000 performance:                           

o     the granting, by the European Commission, of orphan designation to        
anagrelide (marketed in the US as Agrylin) for the treatment of     
essential thrombocythaemia provides Shire with valuable market      
exclusivity protection for the three major marketing regions of the 
world, namely Europe, Japan and the US;                             

o     the UK National Institute of Clinical Excellence ("NICE") announcing      
    that treatments for Alzheimer's disease should be made available as part
 of the management of people with mild to moderate Alzheimer's disease
 within the UK. This endorsement signals exciting growth prospects for
    Reminyl, the Shire product developed jointly with Janssen Pharmaceutica.

It is the Directors' opinion that Shire's market, trading and financial         
positions will be enhanced as a result of the Merger. The Merger with BioChem   
will expand both the product and project portfolios and bring together the      
companies' complementary skills. An example of future prosperity is Adderall    
and subject to FDA approval, its replacement, Adderall once-a-day (SLI381),     
which, if it continues its recent pattern of sales growth, will be a            
significant contributor to the total revenue of the Enlarged Group, along with  
3TC/Epivir and Zeffix royalties. After the Merger, the Enlarged Group's         
revenues will continue to be derived from three sources: sales of products by   
sales and marketing efforts, royalties and licensing and development fees.      

To ensure a healthy pipeline well into the future, 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                                                  

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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.                                                

Taking into account the opportunity for synergies, which includes anticipated   
cost savings in the range of                                                    
$10-15 million per annum, and excluding the one-time charge, the Board          
believes the Merger will be earnings enhancing twelve months after the          
Closing.                                                                        

Extraordinary General Meeting                                                   

Set out at the end of this document is a notice of an Extraordinary General     
Meeting of the Company to be held at 35 New Broad Street, London EC2M 1SQ,      
England, on 29 March 2001 at 3.00 p.m. (London 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 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 3UH, England not later    
than 3.00 p.m. (London time) on 27 March 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 ordinary       
resolution and the special resolution to be proposed at the Extraordinary       
General Meeting, as they intend to do in respect of the shareholdings in which  
they are interested, which amount in aggregate to 9,087,385 Ordinary Shares,    
representing approximately 3.5 per cent of the issued share capital of the      
Company.                                                                        

Yours sincerely,

    /s/ Dr. James H. Cavanaugh

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 and commercialisation 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/Epivir and Zeffix. 3TC/Epivir is an orally available formulation of         
lamivudine for the treatment of patients with HIV infection and AIDS. 3TC/      
Epivir is currently marketed in approximately 100 countries and achieved sales  
of $863.5 million in 2000. 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 $106.9 million in      
2000. 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 BioChem 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    
the 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.        
BioChem's most advanced product candidate for cancer is Troxatyl                
(troxacitabine), a nucleoside analogue in Phase II of clinical development to   
treat various forms of cancer. BioChem's frakefamide, a product developed for   
use in the control of pain, is also in Phase II trials.                         

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 is licensed to GlaxoSmithKline. BioChem is also  
involved in the research and development of new recombinant protein-based       
bacterial vaccines.                                                             

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

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Therapeutic products                                                            

BioChem's therapeutic products and 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 partnerships and   
strategic alliances. The following table represents BioChem's products and      
products under development in therapeutics:                                     

                                                        [Enlarge/Download Table]

Product(s)                           Principal indication(s)  Status        Marketed by            
                                                                                                   

3TC/Epivir                           HIV/AIDS                 Marketed      BioChem/GlaxoSmithKline

Combivir                             HIV/AIDS                 Marketed      BioChem/GlaxoSmithKline

Trizivir                             HIV/AIDS                 Marketed      BioChem/GlaxoSmithKline

Zeffix/Epivir-HBV/Heptovir/Heptodin  Hepatitis B infection    Marketed      BioChem/GlaxoSmithKline

PACIS                                Bladder cancer           Marketed      BioChem                

Troxatyl                             Cancer                   Phase II      BioChem                

Frakefamide                          Pain control             Phase II      BioChem/AstraZeneca    

BCH-10618                            HIV/AIDS                 Pre-clinical  BioChem                

BCH-13520                            HIV/AIDS                 Pre-clinical  BioChem                

AIDS/HIV Infection                                                              

The World Health Organization (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, 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 per cent of these new infections   
occurred in developing countries. HIV infection and AIDS were the fourth        
leading cause of death worldwide in 2000, resulting in an estimated 3 million   
deaths, the highest number of AIDS deaths in a single year ever.                

According to World-Wide Antiretroviral Sales, IMS Report, in 2000, the          
antiretroviral (anti-HIV) market reached $3.5 billion in sales, with reverse    
transcriptase inhibitors (such as 3TC) 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. It is now marketed in the United States as Epivir. Approval in Canada     
followed shortly on 8 December 1995. The Committee on Proprietary Medicinal     
Products (CPMP) and the European Agency for the evaluation of Healthcare        
Products (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 EMEA 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 authorised 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 analogues, 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 analogue 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 infection 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 the 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    
programme 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 analogue 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 viruses. 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 NNRTIs.                              

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 animals, 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      
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 third   
quarter of 2001.                                                                

(B) BCH-10618 ((-)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-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        

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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 the 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 as a result of their hepatitis B           
infection from cirrhosis or hepatocellular carcinoma (liver cancer). 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. Moreover,   
Alpha interferon has poorer 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 disease 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 of hepatitis B          
patients in the Asia-Pacific region.                                            

Product on the Market -- Zeffix                                                 

Zeffix, also available as Epivir-HBV in the United States, as Heptovir in       
Canada, as Heptodin in China and as Zefix in Japan, 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 as 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 the long term Asian trial who had a 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 demonstrate a regression in   
cirrhosis in 64 per cent of patients with pre-existing cirrhosis    
following two or more years of treatment with Zeffix.               

(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                                                            

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Hepathology 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 had been approved in 69 countries and launched in 45. 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.                 

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    
and 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.             

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. The traditionally held view was  
that opioid analgesia was 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 that have 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 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. In 1999, AstraZeneca initiated 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 this setting.  
The Phase II studies should be completed in early 2001 and additional clinical  
trial programmes with the injectable (i.v.) formulation in the management of    
post-operative pain are planned to be initiated thereafter.                     

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 would be diagnosed  
with transitional cell carcinoma of the bladder and more than 12,000 people     
with recurrent or acute disease would die from it.                              

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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.                                                                        

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 analogue being developed to treat various forms of     
cancer. A few nucleoside analogues, such as gemcitabine and Ara-C, are used in  
the treatment of certain cancers. Troxatyl is a nucleoside analogue 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   
tumours (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 five monthly administration schedule in pancreatic     
cancer. Additional trials are planned and BioChem will then focus its Phase     
III programme on the solid tumours 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 tumours. 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-haematologic 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 per cent 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 optimise the antileukemic activity of Troxatyl and set the          
groundwork for subsequent Phase III trials. Four patients out 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 haematologic         
response. BioChem is now following up on these promising results by testing     
single agent Troxatyl in a North American multicentre 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.                                                     

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BioChem has a new vaccine production centre 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's most advanced vaccine    
products:                                                                       

                                                        [Enlarge/Download Table]

                                                Principal                                                     
Product(s)                                      indication(s)           Status         Market by              
                                                                                                              

Fluviral S/F                                    Influenza               On the market  BioChem                
Injectable influenza vaccine derived from cell  Influenza               Phase I/II     BioChem/GlaxoSmithKline
  culture                                                                                                     
Nasal influenza vaccine derived from cell       Influenza               Phase I        BioChem/GlaxoSmithKline
  culture                                                                                                     
Neisseria meningitidis vaccine                  Meningitis, septicemia  Phase I        BioChem                
                                                                        Pre-clinical   BioChem                
Pseudomonas aeruginosa vaccine                  Bacteremia,             Pre-clinical   BioChem/Cytovax        
                                                opportunistic                                                 
Streptococcus pneumoniae vaccine                Pneumonia, meningitis,  Pre-clinical   BioChem                
                                                otitis media                                                  

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   
programme 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, the 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 finalised in December 1998 an alliance covering     
BioChem's cell culture technology for influenza vaccine and nasal delivery      
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 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 any 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.                

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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, no   
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 is able to elicit a broad immune response against all    
strains of the pathogen and that would be 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 stage      
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 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. Other groups are developing polysaccharide          
conjugate vaccines and protein-based vaccines. There are no 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. Immunisation of mice with the purified recombinant    
protein confers protection against lethal N. meningitidis infection. The serum  
antibodies obtained from the immunised mice kill N. meningitidis cells. This    
type of bactericidal activity is generally recognised 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 to 5,000 cases of meningitis, 200,000 to 600,000 cases of pneumonia   
and 7,000,000 to 10,000,000 cases of acute otitis media in the United States    
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 immunisation 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            

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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. Immunised mice were protected    
against a lethal challenge in both bacteremia and pneumonia models of           
infection. Sera from immunised 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.        
aeruginosa, which are appendages responsible for bacterial attachment to        
cells. Cytovax proprietary "Anti-Adhesion Platform Technology" could prevent    
infection by blocking the adhesion of pathogens onto human mucosal cells.       
Based on the pili tip sequences Cytovax has developed a consensus sequence      
peptide vaccine which can elicit protective immunity against experimental       
infection. Cytovax and BioChem are collaborating in research, analytical,       
process, clinical, and regulatory issues.                                       

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 commercialise any life    
science product developed from this platform. The Qualia technology platform    
is a cognitive system that utilises 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 1999 to develop the technology into products and  
to commercialise the products on a worldwide basis. CADx develops 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. 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 of    
GeneChem Technologies Venture Fund L.P. and GeneChem Therapeutics Venture Fund  
L.P. are respectively GeneChem Enterprise Inc. and GeneChem Therapeutics Inc.,  
two indirect subsidiaries of BioChem, and the manager of each is GeneChem       
Management Inc., also an indirect subsidiary of BioChem.                        

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PART III

BioChem historical financial results under Canadian GAAP

for the three years ended 31 December 2000

The financial information contained in this Part III is extracted 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 for 1998 and 1999, and to be filed on Form 6-K  
for 2000. The financial information has been prepared in accordance with        
Canadian GAAP in Canadian dollars.                                              

The 1998 comparatives to the 1999 financial statements were restated and        
included within the company's audited financial statements for 1999 and 2000    
in order to be comparable to the periods ended 31 December 1999 and 2000 for    
the following reasons: (a) to reflect the continuing operations following the   
divestiture of the diagnostic operations, in March 2000; and (b) to reflect     
the disclosure requirements related to the Canadian Institute of Chartered      
Accountants' recommendations relating to the presentation of cash flow          
statements. The financial information for 1998, as contained within this        
section, has been extracted without material adjustment from the restated       
comparatives.                                                                   

The independent public accountants of BioChem for the years ended 31 December   
2000, 1999 and 1998 were Raymond Chabot Grant Thornton who have issued          
unqualified audit opinions on each of those three financial years.              

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Consolidated Statements of Earnings 
for the years ended 31 December 2000, 1999 and 1998 
(in thousands except per share information) 

                                                        [Enlarge/Download Table]

                                                                      2000            1999            1998 
                                                                      CAN$            CAN$            CAN$ 
                                                                                                           
Revenue                                                                                                    
Sales                                                               32,885          23,412          22,094 
Royalties                                                          195,588         172,588         154,122 
Research and development contracts                                  66,812          79,923          33,718 
Investment and other                                                29,839          14,352          15,031 
                                                             -------------   -------------   ------------- 
                                                                   325,124         290,275         224,965 
                                                             -------------   -------------   ------------- 
Expenses                                                                                                   
Cost of sales                                                       19,626          14,223          11,812 
Selling and distribution                                            14,251           6,089           3,933 
Administrative                                                      26,003          19,992          27,317 
Research and development (note 6)                                   71,834          87,498          49,116 
Financial (note 6)                                                   4,438            (918)           (114)
                                                             -------------   -------------   ------------- 
                                                                   136,152         126,884          92,064 
                                                             -------------   -------------   ------------- 
Earnings before depreciation, amortisation and other               188,972         163,391         132,901 
Depreciation and amortisation (note 6)                             (11,159)         (8,282)         (6,952)
                                                             -------------   -------------   ------------- 
Earnings before income taxes and other                             177,813         155,109         125,949 
Net gain on sale of long-term investments                          141,220          24,181              -- 
Income taxes (note 7)                                              (13,923)        (12,091)         (9,479)
Non-controlling interest                                                --              --           1,428 
Share of loss of a company subject to significant influence         (5,659)             --              -- 
                                                             -------------   -------------   ------------- 
Earnings from continuing operations                                299,451         167,199         117,898 
Loss from discontinued operations (note 4)                              --         (18,097)         (3,124)
                                                             -------------   -------------   ------------- 
Net earnings                                                       299,451         149,102         114,774 
                                                             =============   =============   ============= 
Basic earnings per common share                                                                            
 Continuing operations                                                2.95            1.59            1.09 
 Net earnings                                                         2.95            1.42            1.06 

Diluted earnings per common share                                                                          
 Continuing operations                                                2.87            1.57            1.09 
 Net earnings                                                         2.87            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
for the years ended 31 December 2000, 1999 and 1998 
(in thousands)

                                                        [Enlarge/Download Table]

                                                                                  2000            1999            1998 
                                                                                  CAN$            CAN$            CAN$ 
                                                                                                                       
Retained earnings (deficit), beginning of year                                 (14,582)         45,813          81,039 
Net earnings                                                                   299,451         149,102         114,774 
Premium on repurchase of common shares (note 15)                                    --        (209,497)             -- 
Reduction arising from the distribution of the CliniChem Class A shares             --              --        (150,000)
                                                                         -------------   -------------   ------------- 
Retained earnings (deficit), end of year                                       284,869         (14,582)         45,813 
                                                                         =============   =============   ============= 

The accompanying notes are an integral part of the consolidated financial       
statements.                                                                     

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Consolidated Balance Sheets 
As at 31 December 2000, 1999 and 1998 
(in thousands)

                                                        [Enlarge/Download Table]

                                                                                     2000            1999            1998
                                                                                     CAN$            CAN$            CAN$
                                                                                                                         
Assets                                                                                                                   
Current assets                                                                                                           
 Cash and cash equivalents                                                         70,018          68,791          53,801
 Temporary investments                                                            346,066          81,460         120,295
 Accounts receivable (note 8)                                                      75,604          83,331          64,871
 Inventories (note 9)                                                               3,754           3,236           2,312
 Prepaid expenses                                                                   2,473           3,089           2,464
 Current assets of discontinued operations                                             --          89,620         123,586
                                                                            -------------   -------------   -------------
                                                                                  497,915         329,527         367,329

Long-term investments (note 10)                                                   103,681         110,324         103,746
Net assets of business transferred under contractual arrangements (note 4)         53,776              --              --
Property, plant and equipment, net (note 11)                                      127,867         115,110          81,593
Other assets (note 12)                                                             84,822          35,758          28,031
Non-current assets of discontinued operations                                          --          33,998          51,863
                                                                            -------------   -------------   -------------
                                                                                  868,061         624,717         632,562
                                                                            =============   =============   =============
Liabilities                                                                                                              
Current liabilities                                                                                                      
 Bank indebtedness                                                                     --              --           2,276
 Accounts payable and accrued liabilities (note 13)                                54,111          45,314          25,122
 Current portion of long-term debt (note 14)                                      120,560             600             942
 Current liabilities of discontinued operations                                        --          42,558          67,906
                                                                            -------------   -------------   -------------
                                                                                  174,671          88,472          96,246
Long-term debt (note 14)                                                            8,550         124,614          12,470
Non-current liabilities of discontinued operations                                     --          34,767          45,225
                                                                            -------------   -------------   -------------
                                                                                  183,221         247,853         153,941
                                                                            -------------   -------------   -------------
Shareholders' Equity                                                                                                     
Capital stock (note 15)                                                           391,261         382,174         408,365
Contributed surplus (note 15)                                                       9,451           9,451          10,199
Retained earnings (note 15)                                                       284,869         (14,582)         45,813
Foreign currency translation adjustment (note 16)                                    (741)           (179)         14,244
                                                                            -------------   -------------   -------------
                                                                                  684,840         376,864         478,621
                                                                            -------------   -------------   -------------
                                                                                  868,061         624,717         632,562
                                                                            =============   =============   =============

The accompanying notes are an integral part of the consolidated financial       
statements.                                                                     

On behalf of the Board,                                                         

Francesco Bellini, Director                                                     
Roderick L. Henry, Director                                                     

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Consolidated Statements of Cash Flows 
for the years ended 31 December 2000, 1999 and 1998 
(in thousands)

                                                        [Enlarge/Download Table]

                                                              2000            1999            1998 
                                                              CAN$            CAN$            CAN$ 
                                                                                                   
Continuing operating activities                                                                    
Net earnings                                               299,451         149,102         114,774 
Loss from discontinued operations                               --         (18,097)         (3,124)
                                                     -------------   -------------   ------------- 
Earnings from continuing operations                        299,451         167,199         117,898 
Non-cash items (note 17)                                  (123,739)        (17,385)          6,279 
                                                     -------------   -------------   ------------- 
Operating cash flow                                        175,712         149,814         124,177 
Changes in non-cash working capital items (note 17)         (2,562)        (10,811)        (12,586)
                                                     -------------   -------------   ------------- 
                                                           173,150         139,003         111,591 
                                                     -------------   -------------   ------------- 
Investing activities                                                                               
Maturity of temporary investments                           97,319         120,295          90,757 
Purchase of temporary investments                         (361,925)        (81,460)       (146,264)
Business acquisition, net of cash acquired (note 5)        (37,045)             --              -- 
Acquisition of long-term investments                       (19,910)        (16,284)        (38,014)
Proceeds from sale of long-term investments                183,110          31,804              -- 
Acquisition of non-controlling interest                         --              --         (16,214)
Capital expenditures                                       (27,014)        (33,528)        (17,904)
Disposal of property, plant and equipment                       --           1,048              -- 
Acquisition of intangible assets                            (9,888)         (7,543)         (4,144)
Other                                                       (2,670)         (2,082)         (1,336)
                                                     -------------   -------------   ------------- 
                                                          (178,023)         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                                   (600)         (3,660)         (8,089)
Issuance of common shares                                    9,087           4,050           3,934 
Repurchase of common shares                                     --        (121,158)             -- 
Distribution of the CliniChem Class A shares                    --              --        (150,000)
                                                     -------------   -------------   ------------- 
                                                             8,487        (123,044)       (150,641)
                                                     -------------   -------------   ------------- 
Foreign currency translation adjustment                        148          (2,900)          2,201 
                                                     -------------   -------------   ------------- 
Cash flows related to continuing operations                  3,762          25,309        (169,968)
Cash flows related to discontinued operations               (2,535)        (10,319)          2,371 
                                                     -------------   -------------   ------------- 
Increase (decrease) in cash and cash equivalents             1,227          14,990        (167,597)
Cash and cash equivalents, beginning of year                68,791          53,801         221,398 
                                                     -------------   -------------   ------------- 
Cash and cash equivalents, end of year                      70,018          68,791          53,801 
                                                     =============   =============   ============= 
Pre-acquisition free cash flow                             133,578          96,898          88,207 
                                                     =============   =============   ============= 

Pre-acquisition free cash flow includes cash flow from operating activities     
after deducting capital expenditures, disposal of property, plant and           
equipment, acquisition of intangible assets and other items in investing        
activities.                                                                     

Supplemental information (note 17).                                             

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 except per share information) 

1.  Nature of operations                                                        

The company is a biopharmaceutical company dedicated to the research,           
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.                                     

Basis of presentation                                                           

The accompanying consolidated financial statements have been prepared in        
accordance with accounting principles generally accepted in Canada. They        
include the accounts of the company and all of its subsidiaries in which a      
controlling interest is maintained. Investments in affiliates over which the    
company has significant influence but not a controlling interest are accounted  
for under the equity method. All significant intercompany transactions and      
balances have been eliminated upon consolidation.                               

Use of estimates                                                                

In preparing financial statements in conformity with accounting principles      
generally accepted in Canada, management is required to make estimates and      
assumptions that affect the reported amounts of assets and liabilities and the  
disclosure of contingent assets and liabilities at the date of the financial    
statements and revenue and expenses during the reporting period. Actual         
results could differ from those estimates.                                      

Revenue recognition                                                             

Revenue from sales of the company's therapeutic products and vaccines are       
recognised upon shipment of the product.                                        

Royalty revenue is recognised as sales of the licensed products are made by     
the licensee, under the terms of the royalty agreement.                         

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, which are recognised   
when milestones are attained.                                                   

Research and development                                                        

Research and development expenses are recognised as incurred, net of related    
tax credits, and include a share of administrative expenses.                    

Income taxes - Change in accounting policy                                      

During the year, the company adopted, on a retroactive basis, the new           
recommendations issued by the Canadian Institute of Chartered Accountants with  
respect to income taxes. However, it did not restate the financial statements   
for previous years. Under the new standards income taxes are calculated based   
on the liability method. Under this method, future tax assets and liabilities   
are recognised as estimated taxes for recovery or settlement arising from the   
recovery or settlement of assets and liabilities recorded at their financial    
statement carrying amounts. Future tax assets and liabilities are measured      
based on enacted or substantively enacted tax rates and laws at the date of     
the financial statements for the years in which these temporary differences     
are expected to reverse. In the past, the company used the deferral method of   
tax allocation of accounting. This change in accounting policy has had no       
significant impact.                                                             

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2.  Significant accounting policies (continued)                                 

Earnings per common share                                                       

Basic and diluted earnings per common share are calculated using the weighted   
average number of common shares outstanding during the year. Diluted earnings   
per share give effect to the potential exercise of outstanding stock purchase   
options.                                                                        

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 and cash equivalents                                                       

Cash and 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                                                           

Long-term 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.                  

Property, plant and equipment                                                   

Property, plant and equipment are recorded at cost. The cost of construction    
in progress is transferred to the appropriate category as construction          
projects are completed. Depreciation is provided for in amounts sufficient to   
relate the cost of depreciable assets to expenses over their estimated service  
lives using declining and straight-line basis. Depreciation is calculated as    
follows:                                                                        

                                                                [Download Table]

                        Methods            Annual rates                
                                                                       
Buildings               Declining balance  5 per cent. to 10 per cent. 
Equipment               Declining balance  10 per cent. to 40 per cent.
Leasehold improvements  Straight-line      Over the lease terms        

Each year the company assesses the impairment of property, plant and equipment  
and when events or changes in circumstances indicate that the carrying value    
may not be recoverable, a determination of impairment is made based on          
estimates of future cash flows. Maintenance and repairs are charged to expense  
as incurred; additions and betterments are capitalised. Upon retirement or      
sale, the cost and related accumulated depreciation of the disposed assets are  
removed and any resulting gain or loss is credited or charged to expenses.      

Other assets                                                                    

Intangible assets consist primarily of rights, licences and patents as well as  
acquired commercialised products. Rights, licences and patents include          
acquisition costs, patent registration costs and other expenses incurred to     
obtain the licences necessary to commercialise and manufacture products.        
Intangible assets are amortised on a straight-line basis over periods ranging   
from 5 to 10 years, commencing in the year in which the product is              
commercialised.                                                                 

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2.  Significant accounting policies (continued)                                 

Goodwill represents the excess of the cost of acquisitions over the fair value  
of the net identifiable assets acquired. Goodwill is amortised on a straight-   
line basis over a period of 20 years, ending in 2018.                           

Acquired in-process research and development are stated at cost. Amortisation   
is provided for on a straight-line basis over estimated useful lives not to     
exceed twenty years, commencing in the year in which the products are           
commercialised. Acquired in-process research and development is periodically    
reviewed to determine recoverability by comparing carrying value to expected    
future cash flows.                                                              

The value of other assets is evaluated for any impairment in value on a         
recurring basis. The evaluation consists of a review of the undiscounted        
future cash flow of the underlying assets. Any permanent impairment in the      
carrying value is charged to earnings in the year incurred. There have been no  
adjustments to the carrying values of other assets resulting from these         
evaluations.                                                                    

Stock option plan                                                               

The company has granted stock options as described in Note 15. No expense is    
recognised when stock options are granted. Any consideration received on        
exercise of stock options is credited to capital stock.                         

Derivative financial instruments                                                

Derivative financial instruments are utilised by the company to hedge a         
promissory note. The company does not hold or issue derivative financial        
instruments for trading or speculative purposes.                                

Currency gains and losses on contracts designated as hedges of the promissory   
note are charged against the gain or loss on the promissory note.               

3.  Merger with Shire Pharmaceuticals Group plc                                 

On 10 December 2000, the company entered into a definitive merger agreement     
with Shire Pharmaceuticals Group plc, a UK-based company. The transaction is    
subject to the approval of both Shire and BioChem shareholders as well as       
various regulatory agencies. The agreement provides for breakup fees and        
grants Shire an option to acquire 19.9 per cent. of BioChem's common stock if   
the agreement is terminated under certain circumstances.                        

4.  Divestiture of a subsidiary                                                 

In March 2000, the company concluded the divestiture of its diagnostics         
operations to a management-led group of this subsidiary. The diagnostics        
operations were previously accounted for as discontinued operations following   
the adoption of a formal plan of disposal on 29 January 1999. As                
consideration, the company received a debenture in the amount of                
CAN$53,776,000 to be paid out of future cash flows. For accounting purposes,    
the transaction is not recorded as a sale since certain significant risks of    
ownership were not transferred to the buyer. Accordingly, the net assets        
transferred to the buyer are presented in the non-current assets section of     
the Balance Sheet as "Net assets of business transferred under contractual      
arrangements". BioChem has guaranteed the reimbursement of a long-term debt of  
this company in the amount of 37.3 billion Italian lira (CAN$27,154,000 as at   
31 December 2000, CAN$27,952,000 as at 31 December 1999 and CAN$34,512,000 as   
at 31 December 1998).                                                           

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4.  Divestiture of a subsidiary (continued)                                     

Summarised data relating to the discontinued operations of the diagnostics      
operations for the years ended 31 December 2000, 1999 and 1998 and net asset    
data for 1999 and 1998 are as follows:                                          

                                                        [Enlarge/Download Table]

                                                                                          2000           1999            1998 
                                                                                          CAN$           CAN$            CAN$ 
                                                                                                                              
Results of operations                                                                                                         
Revenue to disposal date                                                                10,673         75,975         122,419 
                                                                                 =============  =============   ============= 
Loss from operations of diagnostics segment (less applicable income taxes of                                                  
  CAN$1,408 in 1999, CAN$(530) in 1998)                                                                (1,097)         (3,124)
Net loss on disposal of diagnostics segment, including provision of CAN$17,000                                                
  for operating losses during phase-out period (less applicable income taxes of                                               
  nil)                                                                                                (17,000)             -- 
                                                                                                -------------   ------------- 
Loss from discontinued operations                                                                     (18,097)         (3,124)
                                                                                                =============   ============= 
Net assets of discontinued operations                                                                                         
Current assets                                                                                         89,620         123,586 
Property, plant and equipment                                                                          14,684          19,893 
Other assets                                                                                           19,314          31,970 
Current liabilities                                                                                   (42,558)        (67,906)
Long-term liabilities                                                                                 (34,767)        (45,225)
                                                                                                -------------   ------------- 
                                                                                                       46,293          62,318 
                                                                                                =============   ============= 

5.  Acquisition of CliniChem Development Inc.                                   

During the year, the company acquired all of the Class A common shares of       
CliniChem Development Inc. (CliniChem) for an amount of CAN$48,286,000. The     
acquisition has been accounted for using the purchase method. The accompanying  
financial statements include BioChem's share of loss for the period for which   
the company had a significant influence as well as the results of operations    
from the date BioChem acquired the control over CliniChem, when the company     
exercised its purchase option on 15 December 2000.                              

The purchase price allocated to net assets based on their fair values is as     
follows:                                                                        

                                                                [Download Table]

                                                                 
Purchase price                                            48,286 
Share of loss of CliniChem until 14 December 2000         (5,659)
                                                   ------------- 
                                                          42,627 
                                                   ============= 
Cash                                                      11,241 
Non-cash working capital                                 (10,400)
Acquired commercialised products                           1,759 
Acquired in-process research and development              40,027 
                                                   ------------- 
                                                          42,627 
                                                   ============= 

In 1998, 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 CAN$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.            

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5.  Acquisition of CliniChem Development Inc. (continued)                       

The fair value of the Class A common shares of CliniChem distributed to         
BioChem's shareholders was approximately CAN$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 CAN$126,000,000, has also been           
accounted for as a reduction of retained earnings.                              

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 paid a fee to BioChem in exchange for   
the technology licence. The technology fee was payable monthly at a rate of     
CAN$352,000 per month over a period of 48 months.                               

Under the terms of a research and development agreement, BioChem conducted the  
CliniChem programmes. CliniChem used available funds, as defined in the         
contract, to repay BioChem for its research and development expenses. BioChem   
accounted for amounts received as research and development contract revenue.    

6.  Information on the Consolidated Statement of Earnings                       

Research and development                                                        

Research and development expenses are disclosed net of tax credits which        
amounted to CAN$1,286,000 in 2000, CAN$2,434,000 in 1999 and CAN$1,935,000 in   
1998.                                                                           

                                                        [Enlarge/Download Table]

                                                                   2000            1999            1998 
                                                                   CAN$            CAN$            CAN$ 
                                                                                                        
Financial expenses                                                                                      
Interest on long-term debt                                        6,114           2,819              98 
Other interest                                                      164               8             106 
Foreign exchange gain                                            (1,840)         (3,960)           (298)
Amortisation of deferred foreign exchange losses (gains)             --             215             (20)
                                                          -------------   -------------   ------------- 
                                                                  4,438            (918)          (114) 
                                                          =============   =============   ============= 
Depreciation and amortisation                                                                           
Property, plant and equipment                                     8,914           6,561           4,793 
Intangible assets                                                 1,136             783           1,070 
Goodwill                                                            344             344             228 
Deferred charges                                                    765             594             861 
                                                          -------------   -------------   ------------- 
                                                                 11,159           8,282           6,952 
                                                          =============   =============   ============= 

7.  Income Taxes                                                                

                                                        [Enlarge/Download Table]

                                                                                  2000            1999            1998 
                                                                                  CAN$            CAN$            CAN$ 
                                                                                                                       
Income taxes at combined statutory tax rates of different jurisdictions         56,527          13,870           9,856 
Non-deductible items                                                             2,424             459              75 
Realisation of previously unrecorded tax benefit                               (45,484)         (2,526)           (879)
Large corporations tax                                                             456             288             427 
                                                                         -------------   -------------   ------------- 
Income taxes at effective tax rates                                             13,923          12,091           9,479 
                                                                         =============   =============   ============= 

The provision for income taxes comprises the following:                         

                                                                [Download Table]

                                                                    
Current:     Domestic            768             606             748
         Foreign              13,244          11,793           8,731
Future:  Domestic                 --              --              --
         Foreign                 (89)           (308)             --
                       -------------   -------------   -------------
                              13,923          12,091           9,479
                       =============   =============   =============

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7.  Income Taxes (continued)                                                    

As at 31 December 2000, the company has accumulated research and development    
expenses in the amount of approximately CAN$115,000,000, 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     
CAN$116,000,000 which expire on various dates from 2005 to 2007. As at          
31 December 2000, the company has investment tax credits amounting to           
approximately CAN$9,600,000 (CAN$12,400,000 as at 31 December 1999 and          
CAN$14,200,000 as at December 1998), which may be used to reduce future taxes   
payable. These credits expire in the years 2007 to 2010.                        

The future tax benefits in respect of these items have not been reflected in    
the consolidated financial statements as at 31 December 2000.                   

Future tax assets or liabilities are 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 is recorded for the portion of the asset considered unrealisable. In  
addition, the future tax asset or liability is 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 
                                                                 CAN$            CAN$            CAN$ 
                                                                                                      
Research and development expenses and operating losses         81,939          37,227          27,181 
Investment tax credits                                          9,601          12,400          14,200 
Temporary differences on investments                             (278)         55,346          49,640 
                                                        -------------   -------------   ------------- 
                                                               91,262         104,973          91,021 
Valuation allowance                                           (90,865)       (104,665)        (91,021)
                                                        -------------   -------------   ------------- 
Future income taxes - asset                                       397             308              -- 
                                                        =============   =============   ============= 

8.  Accounts receivable                                                         

                                                                [Download Table]

                                                  2000           1999           1998
                                                  CAN$           CAN$           CAN$
                                                                                    
Trade                                            4,392          4,048          5,124
Royalties receivable from a shareholder         53,576         48,312         43,585
Research and development contracts               6,700         19,216          6,357
Other                                           10,936         11,755          9,805
                                         -------------  -------------  -------------
                                                75,604         83,331         64,871
                                         =============  =============  =============

9.  Inventories                                                                 

                                                                [Download Table]

                          2000           1999           1998
                          CAN$           CAN$           CAN$
                                                            
Raw materials            1,025            890            574
Work-in-process          1,152          2,198          1,427
Finished goods           1,577            148            311
                 -------------  -------------  -------------
                         3,754          3,236          2,312
                 =============  =============  =============

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10. Long-term investments                                                       

                                                        [Enlarge/Download Table]

                                                                                     2000           1999           1998
                                                                                     CAN$           CAN$           CAN$
                                                                                                                       
Investments in private companies, at cost                                         103,681         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)                                                                                                     
 Preferred shares, at cost                                                             --          5,194          5,194
 Convertible notes, at cost                                                            --         12,990         13,800
                                                                            -------------  -------------  -------------
                                                                                  103,681        110,324        103,746
                                                                            =============  =============  =============

(a) Investments in a company subject to significant influence - North American  
Vaccine, Inc.                                                           

During the year, the company completed the divestiture of its investment in     
North American Vaccine, Inc. (NAVA), a public corporation listed on the         
American Stock Exchange. BioChem received a consideration composed of cash and  
shares of a publicly traded corporation, which shares were subsequently sold.   
The total proceeds amounted to CAN$167.0 million and the transaction generated  
a net gain of CAN$137.3 million.                                                

Common shares, at equity value                                                  

As at 31 December 1999, the company held 32.0% of NAVA's outstanding common     
shares or 10,522,640 shares (34.7% or 11,179,114 shares as at 31 December       
1998). As at that date, the market value of the investment in common shares     
based on the closing market price amounted to CAN$68,343,000 (CAN$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 CAN$4.48 ($2.92) per share for a total of          
CAN$258,838 ($168,811). In addition, BioChem sold 714,286 common shares of      
NAVA for proceeds of CAN$7,371,000 ($5,000,000).                                

As at 31 December 1999, the company's share of cumulative losses in the common  
shares of NAVA in excess of its equity value of nil amounted to                 
CAN$64,227,000.                                                                 

Preferred shares, at cost                                                       

As at 31 December 1999 and 1998, the company held 50% of NAVA's preferred       
shares or 1,000,000 shares. As at that date, the market value of the            
investment in preferred shares, based on the closing market price of the        
common shares was CAN$12,990,000 (CAN$27,220,000 as at 31 December 1998).       

Convertible notes, at cost                                                      

The convertible notes of CAN$12,990,000 ($9,000,000) as at 31 December 1999     
bore interest at the rate of 4.5%. As at that date, the carrying amount of the  
notes approximated the fair value.                                              

11. Property, plant and equipment, net                                          

                                                                [Download Table]

                                               2000           1999           1998
                                               CAN$           CAN$           CAN$
                                                                                 
Cost                                                                             
Land                                          6,503          6,401          5,414
Buildings                                   110,485         96,464         68,298
Equipment and leasehold improvements         41,501         34,012         22,550
                                      -------------  -------------  -------------
                                            158,489        136,877         96,262
Accumulated depreciation                                                         
Buildings                                    14,134          8,519          6,303
Equipment and leasehold improvements         16,488         13,248          8,366
                                      -------------  -------------  -------------
                                             30,622         21,767         14,669
                                      -------------  -------------  -------------
Net book value                              127,867        115,110         81,593
                                      =============  =============  =============

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11. Property, plant and equipment, net (continued)                              

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 CAN$25,943,000 in 2000, CAN$24,401,000 in   
1999 and CAN$20,998,000 in 1998 for items considered construction in progress   
that were not utilised and therefore not depreciated.                           

12. Other Assets                                                                

                                                        [Enlarge/Download Table]

                                                                2000           1999           1998
                                                                CAN$           CAN$           CAN$
                                                                                                  
Intangible assets, net                                        29,128         22,878         17,185
Acquired in-process research and development, at cost         40,027             --             --
Goodwill, net                                                  6,360          6,705          7,049
Deferred charges, net                                          5,938          4,648          3,542
Deferred foreign exchange loss                                    --            722            128
Other                                                          3,369            805            127
                                                       -------------  -------------  -------------
                                                              84,822         35,758         28,031
                                                       =============  =============  =============

13. Accounts payable and accrued liabilities                                    

                                                        [Enlarge/Download Table]

                                                   2000           1999           1998
                                                   CAN$           CAN$           CAN$
                                                                                     
Accounts payable and accrued liabilities         39,646         27,358         14,888
Construction-related accounts payable               240          6,664            207
Income taxes payable                             14,225         11,292         10,027
                                          -------------  -------------  -------------
                                                 54,111         45,314         25,122
                                          =============  =============  =============

14. Long-term debt                                                              

                                                        [Enlarge/Download Table]

                                                                                         2000           1999           1998
                                                                                         CAN$           CAN$           CAN$
                                                                                                                           
Promissory note to a shareholder totalling $80,000,000, bearing interest at 5%                                             
  per annum, repayable in 2001.                                                       119,960        115,464             --
Bank loans, bearing interest at the lender's prime rate, secured by a hypothec                                             
  on land and building, repayable in annual instalments of CAN$600,000 and a                                               
  final payment totalling CAN$3,600,000 in 2002 and renegotiable for an                                                    
  additional 5-year period. The company has undertaken to respect certain                                                  
  financial ratios.(a)                                                                  4,200          4,800          8,460
Federal and provincial government loans, with a maximum available amount of                                                
  CAN$5,500,000, non-interest bearing and repayable in maximum annual                                                      
  instalments of CAN$1,100,000 commencing in 2002.                                      4,950          4,950          4,950
Obligations under capital leases maturing in 1999.                                         --             --              2
                                                                                -------------  -------------  -------------
                                                                                      129,110        125,214         13,412
Less: current portion                                                                 120,560            600            942
                                                                                -------------  -------------  -------------
                                                                                        8,550        124,614         12,470
                                                                                =============  =============  =============

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14. Long-term debt (continued)                                                  

(a)   The company entered into an agreement with Investissement Quebec (IQ)     
whereby IQ guarantees, until 2006, 80% of a maximum loan of         
  CAN$4,800,000. IQ will reimburse the company the aggregate interest of
this loan until October 2001 to a maximum of CAN$1,875,000.         

Payments due in each of the next five years are as follows:                     

                                                                [Download Table]

                                                                            CAN$
                                                                                
2001                                                                     120,560
2002                                                                       4,590
2003                                                                         990
2004                                                                         990
2005                                                                         990

The company has available an unsecured credit facility, renewable annually,     
with an authorized amount of $100,000,000, or the equivalent Canadian dollar    
amount. The interest rate is based on either the Canadian prime rate, the       
U.S.-base rate or the LIBOR rate, plus a premium in relation to the ratio of    
debt to earnings before interest, taxes, depreciation and amortisation. The     
company has undertaken to respect certain financial ratios.                     

15. 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                                101,015,590      108,735,790       108,255,640
Share repurchase                                                   --       (8,000,000)               --
Exercise of share options                                     459,496          279,800           480,150
                                                      ---------------  ---------------   ---------------
Balance, end of year                                      101,475,086      101,015,590       108,735,790
                                                      ===============  ===============   ===============
Weighted average number of common shares outstanding      101,240,416      105,312,719       108,442,700
                                                      ===============  ===============   ===============


                                                                 2000             1999              1998
                                                                 CAN$             CAN$              CAN$
                                                                                                        
Amounts                                                                                                 
Balance, beginning of year                                    382,174          408,365           404,431
Share repurchase                                                   --          (30,241)               --
Exercise of share options                                       9,087            4,050             3,934
                                                      ---------------  ---------------   ---------------
Balance, end of year                                          391,261          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 GlaxoSmithKline at a price of    
$20 per share. Payment of these shares is to be made in two stages:             
CAN$121,158,000 ($80 million) was paid on 19 July 1999 and the balance is       
presented in the current portion of long-term debt and due on 19 January 2001.  
The above-mentioned transaction was recorded in 1999 as follows:                
CAN$30,241,000 as a reduction to capital stock, CAN$748,000 as a reduction to   
contributed surplus and CAN$209,497,000 as a charge to retained earnings.       

Stock purchase options                                                          

o   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.                                                      

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15. Capital Stock (continued)                                                   

The changes to the number of stock options granted by the company are as        
follows:                                                                        

                                                        [Enlarge/Download Table]

                                                                                        2000            1999            1998 
                                                                                                                             
Balance, beginning of year                                                         6,548,750       6,520,600       6,182,600 
Granted at a weighted average price of CAN$41.41 in 2000, CAN$38.17 in 1999                                                  
  and CAN$31.84 in 1998                                                              804,261         443,000         973,450 
Exercised at a weighted average price of CAN$19.77 in 2000, CAN$14.47 in 1999                                                
  and CAN$8.19 in 1998                                                              (336,020)       (279,800)       (480,150)
Cancelled                                                                           (184,077)       (135,050)       (155,300)
                                                                               -------------   -------------   ------------- 
Balance, end of year                                                               6,832,914       6,548,750       6,520,600 
                                                                               =============   =============   ============= 
Weighted average price of options                                                                                            
  outstanding at end of year                                                       CAN$27.58       CAN$25.91       CAN$24.36 
                                                                               =============   =============   ============= 
Options exercisable at end of year                                                 4,285,592       3,805,790       3,173,850 
                                                                               =============   =============   ============= 

The information about stock options outstanding as at 31 December 2000 is as    
follows:                                                                        

                                                        [Enlarge/Download Table]

Exercise price (CAN$)                                       Options outstanding                       Options exercisable      
 -------------------------------------------  ------------------------------------------------  -------------------------------
                                                                     Weighted                                                  
                                                                      average         Weighted                         Weighted
                                                                    remaining          average                          average
                                                                  contractual         exercise                         exercise
                                                     Number              life            price          Number            price
                                              ------------------------------------------------  -------------------------------
                                                                                          CAN$                             CAN$
                                                                                                                               
 6.19 to   7.50                                     143,600         3.3 years             6.51         143,600             6.51
 7.51 to 10.00                                      247,150         2.9 years             8.57         247,150             8.57
10.01 to 15.00                                    1,598,000         1.1 years            11.17       1,598,000            11.17
15.01 to 22.50                                      213,000         2.1 years            17.52         213,000            17.52
22.51 to 33.00                                    1,586,403         6.5 years            31.07         875,242            30.74
33.01 to 45.25                                    3,044,761         7.2 years            37.62       1,208,600            35.90
                                              -------------                      -------------   -------------    -------------
                                                  6,832,914                              27.58       4,285,592            22.15
                                              =============                      =============   =============    =============

The weighted average price of options exercisable for 1999 and 1998 were        
respectively CAN$20.24 and CAN$16.86.                                           

o   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 CAN$5.15 per share. This option was exercised in 2000.        

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 CAN$3,424,000 in 2000, CAN$761,000 in 1999 and    
CAN$951,000 in 1998.                                                            

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15. Capital Stock (continued)                                                   

Restricted Share Unit Plan                                                      

During the year, the company introduced a long term incentive plan as           
retirement compensation for certain senior executives. Under the plan, the      
participants are awarded Restricted Share Units (RSUs) of which 50% vest after  
two years and the remainder after five years. The value of one RSU is           
equivalent to the value of one common share of BioChem, is priced at market on  
the date of the grants and is redeemable only upon the participant's            
retirement, death, resignation or termination. Compensation expense in respect  
of the RSUs is charged to income at the date of grant and totaled CAN$513,000   
in 2000.                                                                        

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 20% or more of the company's voting     
shares, to present a bid complying with specific provisions. The application    
of the Rights Plan was waived on 10 December 2000 with respect to the proposed  
Merger with Shire.                                                              

16. Foreign currency translation adjustment                                     

                                                        [Enlarge/Download Table]

                                                                                        2000            1999            1998
                                                                                        CAN$            CAN$            CAN$
                                                                                                                            
Balance, beginning of year                                                              (179)         14,244           2,399
Reduction arising from disposal of long-term investment                               (2,605)             --              --
Effect of foreign exchange rate variations upon translation of the net assets                                               
  of self-sustaining foreign operations                                                2,043         (14,423)         11,845
                                                                               -------------   -------------   -------------
Balance, end of year                                                                    (741)           (179)         14,244
                                                                               =============   =============   =============

17. 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.                                                                     

                                                        [Enlarge/Download Table]

                                                                      2000            1999            1998 
                                                                      CAN$            CAN$            CAN$ 
                                                                                                           
Non-cash items                                                                                             
Depreciation and amortisation                                       11,159           8,282           6,952 
Share of loss of a company subject to significant influence          5,659              --              -- 
Non-controlling interest                                                --              --          (1,428)
Net gain on sale of long-term investments                         (141,220)        (24,181)             -- 
Future income taxes                                                    (89)           (308)             -- 
Other                                                                  752          (1,178)            755 
                                                             -------------   -------------   ------------- 
                                                                  (123,739)        (17,385)          6,279 
                                                             =============   =============   ============= 

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17. Information on the consolidated statements of cash flows (continued)        

                                                        [Enlarge/Download Table]

                                                                                   2000            1999            1998 
                                                                                   CAN$            CAN$            CAN$ 
                                                                                                                        
Changes in non-cash working capital items                                                                               
Accounts receivable                                                              (5,619)        (22,673)        (13,269)
Inventories                                                                        (518)           (924)           (868)
Prepaid expenses                                                                    616            (637)         (1,114)
Accounts payable and accrued liabilities, excluding construction-related                                                
  accounts payable                                                                2,959          13,423           2,665 
                                                                          -------------   -------------   ------------- 
                                                                                 (2,562)        (10,811)        (12,586)
                                                                          =============   =============   ============= 
Supplemental Information                                                                                                
Income taxes paid                                                                11,057           9,865           4,947 
Interest paid                                                                       161             468             661 

18. Related party transactions                                                  

Transactions with a shareholder are as follows:                                 

                                                                [Download Table]

                                        2000     1999     1998
                                        CAN$     CAN$     CAN$
                                                              
Royalty revenue                      195,588  172,588  153,500
Interest expense on promissory note    6,113    2,610       --

The company incurred professional fees with law firms, in which certain of the  
company's directors are partners, totalling CAN$665,000 for the year ended 31   
December 2000 (CAN$330,000 for the year ended 31 December 1999 and CAN$988,000  
for the year ended 31 December 1998).                                           

These transactions were concluded in the normal course of operations, at the    
exchange amount.                                                                

19. Commitments and contingencies                                               

The company has undertaken to subscribe to an interest in companies and         
partnerships for amounts totaling CAN$48,169,000. As at 31 December 2000, an    
amount of CAN$38,569,000 has been subscribed. In addition, the company has      
undertaken to subscribe to additional amounts and pay royalties on certain      
future sales upon realisation of certain conditions.                            

During the year, the company has concluded a partnership agreement with the     
Canadian government through Technology Partnerships Canada. Under the           
agreement, the Canadian government has agreed to contribute up to               
CAN$80,000,000 in the development of recombinant protein vaccines over a        
period of approximately six years. In 2000, contributions from the Canadian     
government amounted to CAN$6,700,000 based on eligible research and             
development expenses and is accounted for as research and development contract  
revenue. The company is committed to expand research and manufacturing          
capabilities and create a predetermined number of employment positions in       
Canada over the period of development. The Canadian government will be          
entitled to receive warrants during the first two years of the agreement upon   
realisation of certain conditions as well as royalties on future sales of       
vaccines developed through this agreement.                                      

In 1996, a legal proceeding was instituted in the United States by Emory        
University against the company and GlaxoSmithKline for alleged patent           
infringement on a product licensed to GlaxoSmithKline. 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. On 21 December  2000, the U.S. Patent and   
Trademark Office invalidated the patent of Emory University. Emory University   
may appeal this latest decision. 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.             

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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, 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    
primarily 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.         

Industry segments                                                               

The company operates in the following industry segments:                        

                                                        [Enlarge/Download Table]

                                                                               2000            1999            1998 
                                                                               CAN$            CAN$            CAN$ 
                                                                                                                    
Revenue(a)                                                                                                          
Therapeutics                                                                235,517         235,185         184,227 
Vaccines                                                                     49,845          35,706          26,795 
Other                                                                        41,068          21,171          22,283 
                                                                      -------------   -------------   ------------- 
                                                                            326,430         292,062         233,305 
Inter-segment transactions relating to other segments                        (1,306)         (1,787)         (8,340)
                                                                      -------------   -------------   ------------- 
                                                                            325,124         290,275         224,965 
                                                                      =============   =============   ============= 
Depreciation and amortisation                                                                                       
Therapeutics                                                                  4,532           3,226           3,491 
Vaccines                                                                      6,349           4,160           2,635 
Other                                                                           278             896             826 
                                                                      -------------   -------------   ------------- 
                                                                             11,159           8,282           6,952 
                                                                      =============   =============   ============= 



                                                                               2000            1999            1998 
                                                                               CAN$            CAN$            CAN$ 
                                                                                                                    
Income taxes                                                                                                        
Therapeutics                                                                 12,975          11,443           8,727 
Vaccines                                                                        251             181             165 
Other                                                                           697             467             587 
                                                                      -------------   -------------   ------------- 
                                                                             13,923          12,091           9,479 
                                                                      =============   =============   ============= 
Net earnings (loss)                                                                                                 
Therapeutics                                                                171,999         162,362         119,322 
Vaccines                                                                      2,773          (4,425)         (1,482)
Net gain on sale of long-term investments                                   141,220          24,181              -- 
Share of loss of a company subject to          significant influence         (5,659)             --              -- 
Other                                                                       (10,882)        (14,919)             58 
                                                                      -------------   -------------   ------------- 
Earnings from continuing operations                                         299,451         167,199         117,898 
Loss from discontinued operations                                                --         (18,097)         (3,124)
                                                                      -------------   -------------   ------------- 
                                                                            299,451         149,102         114,774 
                                                                      =============   =============   ============= 

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20. Segmented information (continued)                                           

                                                        [Enlarge/Download Table]

                                                             2000           1999            1998
                                                             CAN$           CAN$            CAN$
                                                                                                
Total assets                                                                                    
Therapeutics                                              282,929        248,664         210,324
Vaccines                                                  139,827        132,975          99,498
Other                                                     445,305        119,460         147,291
                                                    -------------  -------------   -------------
                                                          868,061        501,099         457,113
Assets from discontinued operations                            --        123,618         175,449
                                                    -------------  -------------   -------------
                                                          868,061        624,717         632,562
                                                    =============  =============   =============
Capital expenditures                                                                            
Therapeutics                                               13,882         12,518           9,049
Vaccines                                                   13,481         33,273           8,826
Other                                                       3,233          1,737           1,226
                                                    -------------  -------------   -------------
                                                           30,596         47,528          19,101
Variation in construction-related accounts payable          6,306         (6,457)          2,947
                                                    -------------  -------------   -------------
                                                           36,902         41,071          22,048
                                                    =============  =============   =============

Financial expenses relate to head office operations                             

Geographic segments                                                             

The company operates in the following geographic segments:                      

                                                                [Download Table]

                                     2000            1999            1998 
                                     CAN$            CAN$            CAN$ 
                                                                          
Revenue                                                                   
Canada                            114,810          88,039          77,815 
United States                     136,997         119,164          93,131 
Europe                             61,878          55,479          56,512 
Other                              94,859          97,924          73,133 
                            -------------   -------------   ------------- 
                                  408,544         360,606         300,591 
Inter-segment transactions        (83,420)        (70,331)        (75,626)
                            -------------   -------------   ------------- 
                                  325,124         290,275         224,965 
                            =============   =============   ============= 


                                     2000            1999            1998 
                                     CAN$            CAN$            CAN$ 
                                                                          
Segment assets (b)                                                        
Canada                            117,803         106,958          98,001 
United States                      36,120          29,485           1,464 
Europe                              1,310           1,064           3,003 
Other                               8,122           7,186           3,359 
                            -------------   -------------   ------------- 
                                  163,355         144,693         105,827 
                            =============   =============   ============= 

(a)   Revenue includes interest income totaling CAN$843,000 in 2000             
(CAN$593,000 in 1999 and CAN$691,000 in 1998) for the therapeutic   
segment, CAN$59,000 in 2000 (Nil in 1999 and Nil in 1998) for the   
 vaccine segment and CAN$16,534,000 in 2000 (CAN$6,934,000 in 1999 and
CAN$9,178,000 in 1998) for the other segments.                      

(b)   Segment assets includes property, plant and equipment, intangible assets  
and goodwill.                                                       

Information on the company's major client                                       

Revenue includes royalties of CAN$195,588,000 in 2000 (CAN$172,588,000 in 1999  
and CAN$153,500,000 in 1998) from a shareholder.                                

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21. Financial instruments                                                       

Temporary investments                                                           

Temporary investments totaling CAN$346,066,000 as at 31 December 2000           
(CAN$81,460,000 as at 31 December 1999 and CAN$120,295,000 as at 31 December    
1998) include bank term deposits and commercial paper, which have original      
maturities of more than three months. 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 U.S. 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         
$80,000,000 promissory note from a shareholder, which is repayable on           
19 January 2001, at an exchange rate of 1.4630. Any unrealized gains or losses  
on the forward exchange contract are offset by unrealised gains and losses on   
the U.S. dollar-denominated promissory note. As at 31 December 2000, the        
amount of unrealised gain on this forward exchange contract was CAN$2,920,000   
(unrealised loss of CAN$1,576,000 as at 31 December 1999).                      

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, accounts receivable,          
accounts payable and accrued liabilities                                        

The carrying amounts approximate fair value due to the short-term maturity of   
these instruments.                                                              

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 CAN$9,301,000 (CAN$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.                                           

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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                                                     

                                                        [Enlarge/Download Table]

                                                             2000     1999      1998 
                                                             CAN$     CAN$      CAN$ 
                                                                                     
Long-term investments (a) (b)                                  --   (7,151)   (4,659)
Property, plant and equipment (c)                          (6,107)      --        -- 
Other assets                                                                         
 Deferred charges (c)                                      (5,197)  (4,648)       -- 
 Deferred foreign exchange losses (d)                          --     (722)     (128)
 Non-current assets of discontinued operations (f)             --       --      (347)
 Acquired in-process research and development (e)         (40,027)      --        -- 
Shareholders' equity                                                                 
 Retained earnings                                        (50,630)  (9,863)      226 
 Foreign currency translation adjustment (g)                 (701)    (701)     (701)
 Foreign currency translation adjustment transferred to                              
   comprehensive income (k)                                 1,442      880   (13,543)
 Other cumulative components of comprehensive income (k)                             
 Unrealised investment losses (a)                              --   (1,957)   (4,659)
 Foreign currency translation adjustment                   (1,442)    (880)   13,543 

In addition, the net earnings (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 
                                                                          CAN$            CAN$            CAN$ 
                                                                                                               
Earnings from continuing operations according to Canadian GAAP         299,451         167,199         117,898 
Share of loss in a company subject to significant influence (b)          5,194          (5,194)             -- 
Cost of start-up activities (c)                                         (6,656)         (4,648)             -- 
Deferred foreign exchange gains (losses) (d)                               722            (594)           (128)
Acquired in-process research and development (e)                       (40,027)             --              -- 
Loss on disposal of a long-term investment (h)                              --              --        (126,069)
                                                                 -------------   -------------   ------------- 
Earnings (loss) from continuing operations per US GAAP                 258,684         156,763          (8,299)
                                                                 -------------   -------------   ------------- 
Loss from discontinued operations according to Canadian GAAP                --         (18,097)         (3,124)
Adjustment to loss from discontinued operations (f)                         --             347           1,360 
                                                                 -------------   -------------   ------------- 
Loss from discontinued operations per US GAAP                               --         (17,750)         (1,764)
                                                                 -------------   -------------   ------------- 
Net earnings (loss) per US GAAP                                        258,684         139,013         (10,063)
                                                                 =============   =============   ============= 



                                                                          2000            1999            1998 
                                                                          CAN$            CAN$            CAN$ 
                                                                                                               
Earnings (loss) per common share per US GAAP (i)                                                               
 Basic                                                                                                         
   Continuing operations                                                  2.56            1.49           (0.08)
   Discontinued operations                                                  --           (0.17)          (0.01)
   Net earnings                                                           2.56            1.32           (0.09)
 Diluted                                                                                                       
   Continuing operations                                                  2.51            1.49           (0.08)
   Discontinued operations                                                  --           (0.17)          (0.01)
   Net earnings                                                           2.51            1.32           (0.09)
Weighted average number of common shares:                                                                      
 Diluted                                                           102,977,929     106,973,581     110,446,590 

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22. Summary of differences between generally accepted accounting principles in  
Canada and in the United States (continued)                             

(a) Long-term investments                                                       

Under Canadian GAAP, investments in shares of public companies and debt         
securities, excluding the investments in the common shares of a company         
subject to significant influence, are recorded at cost, less any decrease in    
value other than a temporary decline. Under US GAAP, the company is required    
to record some of these investments at fair value and include the unrealised    
gains or losses as a component of comprehensive income in shareholders'         
equity. The cost of these investments amounts to nil as at 31 December 2000     
(CAN$24,248,000 as at 31 December 1999 and CAN$22,865,000 as at 31 December     
1998) and the fair value amounts to nil as at 31 December 2000 (CAN$22,291,000  
as at 31 December 1999 and CAN$18,206,000 as at 31 December 1998).              

(b) Share of loss in a company subject to significant influence                 

Under US GAAP, the total investment in NAVA would have been reduced by          
CAN$5,194,000 in 1999 in accordance with the 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) Cost of start-up activities                                                 

As stated in Statement of Position 98-5, "Reporting on the Costs of Start-Up    
Activities" ("SOP 98-5"), costs of start-up activities should be expensed as    
incurred. Pursuant to SOP 98-5, the company has written off the unamortised     
portion of the start-up activity costs included in deferred charges and         
property, plant and equipment.                                                  

(d) Deferred foreign exchange gains and 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 term of the item. Under US GAAP, these gains or losses are included in      
earnings. The deferred foreign exchange losses on the balance sheet amounting   
to Nil and CAN$722,000 as at 31 December 2000 and 1999 respectively would have  
been eliminated. Accordingly, a foreign exchange gain amounting to CAN$722,000  
is recognised in earnings for the year ended 31 December 2000 and a foreign     
exchange loss amounting to CAN$594,000 and CAN$128,000 is recognised in         
earnings for the years ended 31 December 1999 and 1998 respectively.            

(e) Acquired in-process research and development                                

As stated in FASB Interpretation (FIN) No. 4, "Applicability of FASB Statement  
No. 2 to Business Combinations Accounted for by the Purchase Method", any       
identifiable assets of the acquiree to be used in research and development      
projects that do not also have an alternative future use should be first        
valued as part of the purchase price allocation, and then charged to expense    
of the acquiring company. The acquired research and development relate to the   
acquisition of CliniChem Development Inc. as at 15 December 2000.               

(f) Discontinued operations                                                     

For discontinued operations, the same principles as described in (d) for        
deferred foreign exchange losses applies under US GAAP. The impact on earnings  
from discontinued operations, net of income taxes, is Nil in 2000 and an        
increase of CAN$347,000 in 1999 and CAN$1,360,000 in 1998.                      

(g) Realisation 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 in 1998           
amounting to CAN$150,000,000 is reduced by CAN$126,069,000 and an equivalent    
loss on disposal of a long-term investment is recorded.                         

(i) Earnings per share                                                          

Under Canadian GAAP, 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.                       

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22. Summary of differences between generally accepted accounting principles in  
Canada and in the United States (continued)                             

(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, unrealised 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 
                                                             CAN$            CAN$            CAN$ 
                                                                                                  
Net earnings (loss) per U.S. GAAP                         258,684         139,013         (10,063)
Unrealised gains (losses) on long-term investments          1,957           2,702          (3,234)
Foreign currency translation adjustment                      (562)        (14,423)         11,845 
                                                    -------------   -------------   ------------- 
Consolidated comprehensive income                         260,079         127,292         (1,452) 
                                                    =============   =============   ============= 

Consolidated statements of cash flows                                           

o     Under US GAAP, the distribution of the CliniChem Class A shares           
    amounting to CAN$150,000,000 shown as a financing activity in 1998 would
be reduced by CAN$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 earnings (loss), as if  
the fair value-based method of accounting had been applied. The fair value of   
options granted is estimated using the Black-Scholes option-pricing model       
based on the weighted average market price at grant date and the following      
weighted average assumptions:                                                   

                                                                [Download Table]

Years Ended 31 December  2000   1999   1998 
                                            
Dividend yield            0.0%   0.0%   0.0%
Risk-free interest rate   6.4%   5.2%   5.4%
Volatility                 50%    50%    45%
Expected life (years)     7.5    7.5    7.5 

The following table presents the pro forma decrease (increase) in net earnings  
(loss) that would have been recorded had the fair values of options granted     
been recognised as compensation expense on a straight-line basis over the       
vesting period of the grant.                                                    

                                                                [Download Table]

                              2000   1999     1998 
                              CAN$   CAN$     CAN$ 
                                                   
Pro forma                                          
 Net earnings (loss)        19,272  9,415  (14,715)
 Earnings (loss) per share                         
   Basic                      0.19   0.09    (0.14)
   Diluted                    0.18   0.09    (0.13)

The weighted average fair value of options granted in 2000 was CAN$25.84        
(CAN$22.91 in 1999 and CAN$18.18 in 1998).                                      

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22. Summary of differences between generally accepted accounting principles in  
Canada and in the United States (continued)                             

Accounting pronouncements not yet implemented                                   

In 2000, the Canadian Institute of Chartered Accountants issued a new           
accounting standard concerning earnings per share. The company is required to   
adopt this standard for Canadian GAAP reporting purposes for the fiscal year    
beginning with 2001. The impact of this new standard will have no material      
impact on the computation of earnings per share and diluted earnings per        
share.                                                                          

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 this statement.                          

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Quarterly Financial Results 

(in thousands except per share information) 

Year Ended 31 December 2000 

                                                        [Enlarge/Download Table]

                                                                                   Quarter ended                                   
                                                -----------------------------------------------------------------------------------
                                                31 March 2000      30 June 2000     30 Sept 2000       31 Dec 2000            Total
                                                         CAN$              CAN$             CAN$              CAN$             CAN$
                                                                                                                                   
Operating revenue                                      72,517            72,741           85,470            94,396          325,124
Earnings from continuing operations                    40,429           169,252           44,773            44,997          299,451
Net earnings                                           40,429           169,252           44,773            44,997          299,451
Basic earnings per common share                                                                                                    
 Continuing operations                                   0.40              1.67             0.44              0.44             2.95
 Net earnings                                            0.40              1.67             0.44              0.44             2.95



                          Year Ended 31 December 1999                                                                              

                                                                                   Quarter ended                                   
                                                -----------------------------------------------------------------------------------
                                                31 March 1999      30 June 1999     30 Sept 1999       31 Dec 1999            Total
                                                         CAN$              CAN$             CAN$              CAN$             CAN$
                                                                                                                                   
Operating revenue                                      62,722            68,676           70,366            88,511          290,275
Earnings from continuing operations                    30,206            35,974           32,874            68,145          167,199
Net earnings                                           29,109            35,974           32,874            51,145          149,102
Basic earnings per common share                                                                                                    
 Continuing operations                                   0.28              0.33             0.32              0.66             1.59
 Net earnings                                            0.27              0.33             0.32              0.50             1.42



                        Quarterly Stock Market Information                                                                         
                 For the years ended 31 December 2000 and 1999                                                                     

                                       First Quarter           Second Quarter            Third Quarter           Fourth Quarter    
                                   ---------------------    ---------------------    ---------------------    ---------------------
                                        2000        1999         2000        1999         2000        1999         2000        1999
                                                                                                                                   
Montreal Exchange and The                                                                                                          
  Toronto Stock Exchange                                                                                                           
High (CAN$)                            49.50       45.40        37.10       35.25        36.75       40.70        48.15       38.50
Low (CAN$)                             30.65       28.25        31.30       26.45        29.30       28.35        33.85       28.80
Volume (000)                         878,867      20,736      306,216      18,418      256,015      16,850      654,013      16,981
NASDAQ National Market                                                                                                             
High ($)                               34.63       30.25        25.25       23.63        24.75       27.63        32.13       26.06
Low ($)                                21.13       18.88        21.63       17.38        19.75       18.50        22.38       19.44
Volume (000)                       1,101,422      54,692      469,038      31,350      458,221      44,501    1,045,032      36,120

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PART IV 

Reconciliation of BioChem financial results 

As noted in Part V, Shire prepares its primary financial statements in US       
dollars in accordance with US GAAP. Financial statements in UK pounds in        
accordance with UK GAAP are prepared for statutory purposes. BioChem prepares   
its financial statements in Canadian dollars  in accordance with Canadian       
GAAP. The reconciliations of BioChem's financial results have been prepared in  
accordance with both US and UK GAAP.                                            

(a) (i)Reconciliation of BioChem financial results to US GAAP as applied by     
Shire for the three years ended 31 December 2000                  

Unaudited reconciliation of financial information under US GAAP                 

Accounting policies generally accepted in the US differ in certain material     
respects from 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 GAAP are set out below.       

                                                        [Enlarge/Download Table]

                                                                         Year ended      Year ended      Year ended 
                                                                        31 December     31 December     31 December 
                                                                               1998            1999            2000 
                                                              Notes        CAN$'000        CAN$'000        CAN$'000 
                                                                                                                    
Earnings from continuing operations as reported under                                                               
  Canadian GAAP                                                             117,898         167,199         299,451 
Total other income                                                          (15,145)        (15,270)        (25,401)
Provision for income taxes                                                    9,479          12,091          13,923 
Net gain on sale of long-term investments                                        --         (24,181)       (141,220)
Non-controlling interest                                                     (1,428)             --              -- 
Deferred charges                                                (d)              --          (4,648)         (6,656)
Consolidation of CliniChem                                      (a)         (22,139)        (74,254)        (60,794)
CliniChem transaction costs                                     (a)          (6,500)             --              -- 
In-process research and development                             (b)              --              --         (40,027)
                                                                      -------------   -------------   ------------- 
Operating income as reported under US GAAP                                   82,165          60,937          39,276 
Consolidation of CliniChem                                      (a)           4,061           5,263           1,872 
Share of loss in a company subject to significant influence     (c)              --          (5,194)          5,194 
Deferred foreign exchange gains and losses                      (e)            (128)           (594)            722 
Net gain on sale of long-term investments                                        --          24,181         141,220 
Non-controlling interest                                                      1,428              --              -- 
Total other income                                                           15,145          15,270          25,401 
                                                                      -------------   -------------   ------------- 
Income from continuing operations before income taxes under                                                         
  US GAAP                                                                   102,671          99,863         213,685 
                                                                      -------------   -------------   ------------- 
Provisions for income taxes as reported under Canadian GAAP                  (9,479)        (12,091)        (13,923)
Consolidation of CliniChem                                       (a)            694           1,336           1,301 
Loss from discontinued operations as reported under Canadian                                                        
  GAAP                                                                       (3,124)        (18,097)             -- 
Adjustment to loss from discontinued operations                  (g)          1,360             347              -- 
                                                                      -------------   -------------   ------------- 
Net income under US GAAP                                                     92,122          71,358         201,063 
                                                                      =============   =============   ============= 

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                                                        [Enlarge/Download Table]

                                                         Year ended   Year ended   Year ended
                                                        31 December  31 December  31 December
                                                               1998         1999         2000
                                                 Notes         CAN$         CAN$         CAN$
                                                                                             
Earnings per share per US GAAP adjusted results    (h)                                       
Earnings per share                                                                           
Basic                                                          0.85         0.68         1.99
Diluted                                                        0.83         0.67         1.95
Weighted average number of common shares:                                                    
Basic                                                   108,442,700  105,312,719  101,240,416
Diluted                                                 110,446,590  106,973,581  102,977,929

Reconciliation of consolidated total assets less total liabilities /            
shareholders' equity between Canadian and US GAAP                               

                                                        [Enlarge/Download Table]

                                                                   As at             As at             As at 
                                                             31 December       31 December       31 December 
                                                                    1998              1999              2000 
                                                  Notes         CAN$'000          CAN$'000          CAN$'000 
                                                                                                             
As reported under Canadian GAAP                                  478,621           376,864           684,840 
Adjustments for:                                                                                             
Long term investments                               (c)               --            (5,194)               -- 
Long term investments                               (f)           (4,659)           (1,957)               -- 
Capital assets                                      (d)               --                --            (6,107)
Deferred charges                                    (d)               --            (4,648)           (5,197)
Consolidation of CliniChem                          (a)          126,117            58,462              (841)
Elimination of acquired research and development    (a)               --                --           (40,027)
Deferred foreign exchange gains and losses          (e)             (128)             (722)               -- 
Non-current assets of discontinued operations       (g)             (347)               --                -- 
                                                         ---------------   ---------------   --------------- 
As reported under US GAAP                                        599,604           422,805           632,668 
                                                         ===============   ===============   =============== 

Notes:                                                                          

(a) CliniChem Development, Inc. ("CliniChem")                                   

Consolidation of CliniChem                                                      

In 1998, BioChem spun-off to its shareholders its investment in CliniChem. 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 conforms with the later   
guidance issued under EITF 99-16.                                               

On 15 December 2000, BioChem reacquired CliniChem and has accounted for the     
acquisition using purchase accounting.                                          

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The adjustments set out below cover all three years and represent the effects   
from:                                                                           

(i)   consolidating the financial position and results of operation of          
CliniChem;                                                          

(ii)  eliminating intercompany licensing revenues and costs; and                

(iii) recording accumulated deficits incurred by CliniChem during the period    
that it was not consolidated.                                       

                                                        [Enlarge/Download Table]

                                            Year ended         Year ended         Year ended 
                                           31 December        31 December        31 December 
                                                  1998               1999               2000 
                                              CAN$'000           CAN$'000           CAN$'000 
                                                                                             
Total revenue                                  (22,139)           (74,254)           (60,794)
Operating expenses                                  --                 --                 -- 
                                       ---------------    ---------------    --------------- 
Operating loss                                 (22,139)           (74,254)           (60,794)
Interest income                                  4,061              5,263              1,872 
                                       ---------------    ---------------    --------------- 
Loss before taxes                              (18,078)           (68,991)           (58,922)
Income taxes                                       694              1,336              1,301 
                                       ---------------    ---------------    --------------- 
Net loss from continuing operations            (17,384)           (67,655)           (57,621)
                                       ---------------    ---------------    --------------- 



                                     As at 31 December  As at 31 December  As at 31 December 
                                                  1998               1999               2000 
                                              CAN$'000           CAN$'000           CAN$'000 
                                                                                             
Shareholders' equity                           126,117             58,462               (841)
                                       ---------------    ---------------    --------------- 

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These adjustments have been derived from the financial results of CliniChem as  
follows:                                                                        

                                                        [Enlarge/Download Table]

                                                               US GAAP                   
Income Statement Data                  Canadian GAAP        alignments           US GAAP 
                                            CAN$'000          CAN$'000          CAN$'000 
                                                                                         
Period ended 31 December 1998                                                            
Total revenue                                  4,061            (4,061)               -- 
Operating expenses                           (21,379)             (760)          (22,139)
                                     ---------------   ---------------   --------------- 
Operating loss                               (17,318)           (4,821)          (22,139)
Interest income                                   --             4,061             4,061 
                                     ---------------   ---------------   --------------- 
Loss before taxes                            (17,318)             (760)          (18,078)
Income taxes                                     (66)              760               694 
                                     ---------------   ---------------   --------------- 
Loss from continuing operations              (17,384)               --           (17,384)
                                     ---------------   ---------------   --------------- 
Year ended 31 December 1999                                                              
Total revenue                                  5,263            (5,263)               -- 
Operating expenses                           (72,918)           (1,336)          (74,254)
                                     ---------------   ---------------   --------------- 
Operating loss                               (67,655)           (6,599)          (74,254)
Interest income                                   --             5,263             5,263 
                                     ---------------   ---------------   --------------- 
Loss before taxes                            (67,655)           (1,336)          (68,991)
Income taxes                                      --             1,336             1,336 
                                     ---------------   ---------------   --------------- 
Net loss from continuing operations          (67,655)               --           (67,655)
                                     ---------------   ---------------   --------------- 
Period ended 14 December 2000                                                            
Total revenue                                  1,894            (1,894)               -- 
Operating expenses                           (59,515)           (1,279)          (60,794)
                                     ---------------   ---------------   --------------- 
Operating loss                               (57,621)           (3,173)          (60,794)
Interest income                                   --             1,872             1,872 
                                     ---------------   ---------------   --------------- 
Loss before taxes                            (57,621)           (1,301)          (58,922)
Income taxes                                      --             1,301             1,301 
                                     ---------------   ---------------   --------------- 
Net loss from continuing operations          (57,621)               --           (57,621)
                                     ---------------   ---------------   --------------- 

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                                                                         As at 31 December  As at 31 December  As at 15 December 
Balance Sheet Data                                                                    1998               1999              2000* 
                                                                                  CAN$'000           CAN$'000           CAN$'000 
                                                                                                                                 
Cash and cash equivalents                                                           20,009              1,178             11,041 
Temporary investments                                                              114,392             69,247                    
Taxes and other receivables                                                          1,115              3,699              2,695 
Scientific research and experimental development tax credits receivable                759              1,243              1,089 
                                                                           ---------------    ---------------    --------------- 
Total current assets                                                               136,275             75,367             14,825 
                                                                           ---------------    ---------------    --------------- 
Accounts payable and accrued liabilities                                            10,158             16,905             13,984 
                                                                           ---------------    ---------------    --------------- 
Shareholders' equity                                                                                                             
Share capital                                                                            1                  1                  1 
Contributed surplus                                                                143,500            143,500            143,500 
Deficit accumulated during the development stage                                   (17,384)           (85,039)          (142,660)
                                                                           ---------------    ---------------    --------------- 
                                                                                   126,117             58,462                841 
                                                                           ---------------    ---------------    --------------- 

*   As CliniChem was consolidated following the re-acquisition as discussed     
above, CAN$841,000 is already included in the BioChem results and       
therefore needs to be reversed.                                         

Write off of in-process research and development                                

The acquired in-process research and development in respect of CliniChem        
included on BioChem's balance sheet at 31 December 2000 of CAN$40,027,000 is    
written off immediately.                                                        

The in-process research and development has been calculated as follows:         

                                                                [Download Table]

                                                           CAN$'000 
                                                                    
Purchase price                                               48,286 
Share of loss of CliniChem until December 14, 2000           (5,659)
                                                    --------------- 
                                                             42,627 
                                                    --------------- 
Cash                                                         11,241 
Non-cash working capital                                    (10,400)
Acquired commercialised products                              1,759 
Acquired in-process research and development                 40,027 
                                                    --------------- 
                                                             42,627 
                                                    --------------- 

This allocation is of a preliminary nature and may change on further analysis   
of the purchase price.                                                          

Transaction costs                                                               

The difference between the CAN$150,000,000 cash contribution to CliniChem's     
capital by BioChem and the CAN$143,500,000 recorded as a contributed surplus    
by CliniChem represents CAN$6,500,000 of transaction costs. These costs have    
been included in the income statement for the year ended 31 December 1998.      

(b) In-process research and development                                         

As stated in FASB Interpretation (FIN) No. 4, "Applicability of FASB Statement  
No. 2 Business Combinations Accounted for by the Purchase Method", any          
identifiable assets of the acquiree to be used in research and development      
projects that do not also have an alternative future use should be first        
valued as part of the purchase price allocation, and then charged to expense    
of the acquiring company. The acquired research and development relates to the  
acquisition of CliniChem as at December 15, 2000. For further information on    
CliniChem, see note (a) above.                                                  

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(c) Share of loss in a company subject to significant influence                 

Under US GAAP, the total investment in North American Vaccine Inc. (NAVA)       
would have been reduced by CAN$5,194,000 in 1999 in accordance with the         
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. This adjustment was reversed   
in the year ended 31 December 2000 as the investment in NAVA was disposed of.   

(d) Cost of start-up activities                                                 

As stated in Statement of Position 98-5 "Reporting on the Costs of Start-Up     
Activities" ("SOP 98-5"), costs of start-up activities should be expensed as    
incurred. Pursuant to SOP 98-05, the company has written off the unamortised    
portion of the start-up activity costs included in deferred charges and         
property, plant and equipment.                                                  

(e) Deferred foreign exchange gains and 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 and losses are included in     
earnings. The deferred foreign exchange losses on the balance sheet amounting   
to CAN$ nil and CAN$722,000 as at 31 December 2000 and 1999 respectively would  
have been eliminated. Accordingly a foreign exchange gain amounting to          
CAN$722,000 is recognised in earnings for the year ended 31 December 2000 and   
a foreign exchange loss amounting to CAN$594,000 and CAN$128,000 is recognised  
in earnings for the years ended 31 December 1999 and 1998 respectively.         

(f) Long-term investment                                                        

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 the 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    
CAN$ Nil, CAN$24,248,000 and CAN$22,865,000 as at 31 December 2000, 1999 and    
1998 respectively and the fair value amounts to CAN$ Nil, CAN$22,291,000 and    
CAN$18,206,000 as at 31 December 2000, 1999 and 1998 respectively.              

(g) Discontinued operations                                                     

For discontinued operations, the same principles as described in (e) 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 CAN$347,000 in 1999 and CAN$1,360,000 in 1998.                      

(h) 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 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.                                     

(i) Cash flow statement                                                         

Under US GAAP, consolidated cash flow statements are presented in accordance    
with SFAS No. 95. The statements prepared under US GAAP present substantially   
the same information as that required under Canadian GAAP.                      

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(a) (ii)   Unaudited reconciliation of BioChem's Canadian GAAP, CAN$ financial  
   information for the year ended 31 December 2000 to US GAAP as
applied by Shire                                          

        The following table is the unaudited reconciliation of BioChem's
       Canadian GAAP, CAN$ financial information for the year ended 31
December 2000 to US GAAP as applied by Shire.           

                                                        [Enlarge/Download Table]

                                                         BioChem          US GAAP          BioChem          BioChem 
                                                        CAN GAAP      adjustments          US GAAP          US GAAP 
                                                          Note 1           Note 2                            Note 3 
                                                        CAN$'000         CAN$'000         CAN$'000          US$'000 
                                                                                                                    
Royalty revenue                                          195,588               --          195,588          131,670 
Other revenues (a)                                        99,239          (60,794)          38,445           25,882 
                                                  --------------   --------------   --------------   -------------- 
Revenues                                                 294,827          (60,794)         234,033          157,552 
Cost of sales                                            (19,626)              --          (19,626)         (13,212)
                                                  --------------   --------------   --------------   -------------- 
Gross profit                                             275,201          (60,794)         214,407          144,340 
Research and development (b)                             (73,120)         (40,027)        (113,147)         (76,170)
Other operating expenses (c)                             (51,413)          (6,656)         (58,069)         (39,071)
                                                  --------------   --------------   --------------   -------------- 
Operating income                                         150,668         (107,477)          43,191           29,099 
Interest income (d)                                       17,436            1,872           19,308           12,998 
Interest expense (e)                                      (6,278)              --           (6,278)          (4,226)
Other income/(expenses), net (f)                         150,262            5,916          156,178          105,318 
                                                  --------------   --------------   --------------   -------------- 
Income before income taxes                               312,088          (99,689)         212,399          143,189 
Income taxes (g)                                         (12,637)           1,301          (11,336)          (7,631)
                                                  --------------   --------------   --------------   -------------- 
Net income from continuing operations                    299,451          (93,388)         201,063          135,558 
                                                  --------------   --------------   --------------   -------------- 
Supplemental information                                                                                            
Net income as above                                                                                         135,558 
Add back/(deduct):                                                                                                  
Write off of in-process research and development                                                                    
(CAN$ 40,027,000)                                                                                            26,945 
Net gain on sale of long term investments (CAN$                                                                     
141,220,000)                                                                                               (104,031)
                                                                                                     -------------- 
Net income before exceptionals                                                                               58,472 
                                                                                                     ============== 

Notes                                                   

          1     The BioChem Canadian GAAP financial information presented in
             CAN$ is extracted from the BioChem consolidated financial
         statements appearing in Part III of this document and
      represented as described in notes (a) - (g) below.

                                                                [Download Table]

                                           CAN$'000      
                                                         
(a) Other revenues                                       
    From consolidated statement                          
of earnings:                                             
    -- Sales                                 32,885      
    -- Research and development              66,812      
    -- Other                                   (458)     
                                     --------------      
                                             99,239      
                                     --------------      
(b) Research and development                             
    From consolidated statement                          
of earnings:                                             
    -- Research and development              71,834      
    -- R&D tax credit (note 6)                1,286      
                                     --------------      
                                             73,120      
                                     --------------      

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                                                                [Download Table]

                                           CAN$'000      
                                                         
(c) Other operating expenses                             
    From consolidated statement                          
of earnings:                                             
    -- Selling and                                       
Administration                               14,251      
    -- Administration                        26,003      
    -- Depreciation and                                  
amortisation                                 11,159      
                                     --------------      
                                             51,413      
                                     --------------      
(d) Interest income                                      
    From note 20 (a):                                    
    -- Therapeutics                             843      
    -- Vaccines                                  59      
    -- Other                                 16,534      
                                     --------------      
                                             17,436      
                                     --------------      
(e) Interest expense                                     
    From note 6:                                         
    -- Interest on long term                             
debt                                          6,114      
    -- Other interest                           164      
                                     --------------      
                                              6,278      
                                     --------------      
(f) Other income/(expenses), net                         
    From consolidated statement                          
of earnings:                                             
    -- Net gain on sale of long                          
term investments                            141,220      
    -- Share of loss of company                          
       subject to significant                            
       influence                             (5,659)     
    -- Investment and other                              
revenues                                     29,839      
    -- Financial expenses                    (4,438)     
    -- Less interest income (see                         
note (d) above)                             (17,436)     
    -- Add interest expense (see                         
note (e) above)                               6,278      
    -- Other                                    458      
                                     --------------      
                                            150,262      
                                     --------------      
(g) Income taxes                                         
    From consolidated statement                          
of earnings:                                             
    -- Income taxes                          13,923      
    -- R&D tax credit                        (1,286)     
                                     --------------      
                                             12,637      
                                     --------------      

       2     The US GAAP adjustments are extracted from Part IV (a)(i)
             Reconciliation of BioChem financial results to US GAAP as
applied by Shire.                           

      3     Conversion into US$ has been performed using the average
             exchange rate for the period of 1.4854 except for the net
           gain on sale of investments which was translated at the
        exchange rate ruling on the date of the transaction.

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[graphic]                             

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                                                         
Global Investment Banking                                                       
Winchester House                                                                
1 Great Winchester Street                                                       
London                                                                          
EC2N 2DB                                                           1 March 2001 

Dear Sirs                                                                       

We report on the unaudited reconciliations to US GAAP of the consolidated       
statement of total assets less total liabilities and shareholders equity as at  
31 December 2000, 1999 and 1998, the statement of consolidated net income       
statements for each of the three financial years then ended and the             
consolidated income statement for the year then ended 31 December 2000 of       
BioChem and its subsidiaries ("the financial information (as adjusted) of       
BioChem") prepared on the basis of the accounting policies of Shire in          
accordance with US GAAP set out on pages 49 to 56 in Part IV of the circular    
and listing particulars dated 1 March 2001 issued by Shire.                     

Responsibilities                                                                

It is the responsibility solely of the Directors of Shire to prepare the        
financial information (as adjusted) of BioChem in accordance with paragraph     
12.11 of the Listing Rules of the UK Listing Authority ("the Listing Rules").   
It is our responsibility to form an opinion, as required by the Listing Rules,  
on the financial information (as adjusted) of BioChem and to report our         
opinion to you.                                                                 

The financial information (as adjusted) of BioChem incorporates significant     
reclassifications of and adjustments to the historical financial statements 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 in the United Kingdom 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        
financial information (as adjusted) of BioChem with the Directors of Shire.     

Our work has not been carried out in accordance with auditing standards         
generally accepted in the United States 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 financial information (as adjusted) of BioChem has been properly      
compiled on the basis stated; and                                   

2.    the adjustments are appropriate for the purpose of presenting the         
   financial information (as adjusted) of BioChem on a basis consistent in
all material respects with the accounting policies of Shire under US
GAAP.                                                               

Yours faithfully                                                                

Arthur Andersen                                                                 
Chartered Accountants                                                           

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(b) Reconciliation of BioChem financial results to UK GAAP as applied by Shire  
for the three years ended 31 December 2000                              

Unaudited reconciliation of financial information under UK GAAP                 

Accounting policies generally accepted in the UK differ in certain material     
respects from those generally accepted in Canada.                               

A summary of Shire's principal accounting policies under UK GAAP, all of which  
have been applied consistently throughout the periods presented, 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 in accordance with UK GAAP.                                            

(b) Basis of consolidation                                                      

The Group accounts consolidate the accounts of Shire 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 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) Intangible 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.                                                                 

(e) 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                   

(f) 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.                                                                          

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(g) 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.                 

(h) 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.                                                           

(i) Turnover                                                                    

The principal components of the Company's turnover and their respective         
accounting treatments are set out below.                                        

The Company recognises turnover when:                                           

o     there is persuasive evidence of an arrangement;                           

o     delivery of products has occurred or services have been rendered;         

o     the seller's price to the buyer is fixed or determinable; and             

o     collectibility is reasonably assured.                                     

Product sales are recognised net upon shipment to customers. Provisions for     
certain rebates, product returns and discounts to customers are provided for    
as reductions to net turnover in the same period as the related sales are       
recorded.                                                                       

Licensing and development fees represent revenues derived from licence          
agreements and from collaborative research and development arrangements.        

Initial licence fees are not considered to be separable from the associated     
research and development activities, even where such fees are non-refundable    
and not creditable against research and development services to be rendered.    
Initial licence fees are thus deferred and recognised over the period of the    
licence term or the period of the associated research and development           
agreement. In circumstances where initial licence fees are not for a defined    
period, revenues are deferred and recognised over the period to the expiration  
of the relevant patent to which the licence relates.                            

Where licensing arrangements are accompanied by an equity subscription          
agreement, the series of transactions are accounted for as a multiple elements  
arrangement. Accordingly, the aggregate consideration is allocated to the two   
elements of the arrangement as described below.                                 

The fair value of the equity subscription is calculated as being the aggregate  
number of shares issued at the average of the opening and closing share prices  
on the date of issue.                                                           

During the term of certain research and development agreements, the Company     
receives non-refundable milestones as certain technical targets are achieved.   
Revenue is recognised on achievement of milestones.                             

The Company also receives non-refundable clinical milestones when certain       
targets are achieved during the clinical phases of development, such as the     
submission of clinical data to a regulatory authority. These clinical           
milestones are recognised when received. If milestone payments are creditable   
against future royalty payments, the milestones are deferred and released over  
the period in which the royalties are anticipated to be received.               

Royalty income relating to licensed technology is recognised when receivable.   

Revenues are stated net of VAT and similar taxes, trade discounts and intra-    
Group transactions.                                                             

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No revenue is recognised for consideration, the value or receipt of which is    
dependent on future events, future performance, or refund obligations.          

(j) Research and development                                                    

Research and development expenditure includes funded and unfunded expenditure   
and is written off in the period in which it is incurred.                       

(k) 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.                                                                 

(l) 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.                                                             

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.               

(m) Leases                                                                      

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.                              

(n) Finance costs                                                               

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.                          

(o) 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.                                    

(p) 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 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.                                                                      

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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.                

(q) 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.                                                                       

(r) 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.   

The differences which are material to restating the historical financial        
statements of BioChem to conform with Shire's accounting policies under UK      
GAAP are set out below.                                                         

                                                        [Enlarge/Download Table]

                                                                          Year ended        Year ended       Year ended 
                                                                    31 December 1998  31 December 1999 31 December 2000 
                                                              Notes          CAN$000           CAN$000          CAN$000 
                                                                                                                        
Earnings from continuing operations as reported under                                                                   
  Canadian GAAP                                                              117,898           167,199          299,451 
Total other income                                                           (15,145)          (15,270)         (25,401)
Provision for income taxes                                                     9,479            12,091           13,923 
Gain on sale of long-term investments                                             --           (24,181)        (141,220)
Non-controlling interest                                                      (1,428)               --               -- 
Deferred charges                                                (c)               (4)           (1,106)          (6,656)
Consolidation of CliniChem                                      (a)          (22,139)          (74,254)         (60,794)
CliniChem transaction costs                                     (a)           (6,500)               --               -- 
                                                                       -------------     -------------    ------------- 
Operating profit as reported under UK GAAP                                    82,161            64,479           79,303 
Consolidation of CliniChem                                      (a)            4,061             5,263            1,872 
Share of loss in a company subject to significant influence     (b)          (29,141)          (23,439)          64,227 
Gain on sale of long-term investments                                             --            24,181          141,220 
Non-controlling interest                                                       1,428                --               -- 
                                                                       -------------     -------------    ------------- 
Profit on ordinary activities before finance charges under                                                              
  UK GAAP                                                                     58,509            70,484          286,622 
Total other income                                                            15,145            15,270           25,401 
Deferred foreign exchange gains and losses                      (d)             (128)             (594)             722 
                                                                       -------------     -------------    ------------- 
Profit on ordinary activities before taxation under UK GAAP                   73,526            85,160          312,745 
Provisions for income taxes as reported under Canadian GAAP                   (9,479)          (12,091)         (13,923)
Consolidation of CliniChem                                      (a)              694             1,336            1,301 
Loss from discontinued operations as reported under Canadian                                                            
  GAAP                                                                        (3,124)          (18,097)              -- 
Adjustment for discontinued operations                          (e)               --            17,000          (17,000)
                                                                       -------------     -------------    ------------- 
Profit on ordinary activities after taxation under UK GAAP                                                              
  being retained profit as reported under UK GAAP                             61,617            73,308          283,123 
                                                                       =============     =============    ============= 

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                                                         Year ended   Year ended   Year ended
                                                        31 December  31 December  31 December
                                                               1998         1999         2000
                                                 Notes         CAN$         CAN$         CAN$
                                                                                             
Earnings per share per UK GAAP adjusted results    (g)                                       
Earnings per share                                                                           
- Basic                                                        0.57         0.70         2.80
- Diluted                                                      0.56         0.69         2.75

Weighted average number of common shares:                                                    
Basic                                                   108,442,700  105,312,719  101,240,416
Diluted                                                 110,466,590  106,973,581  102,977,929

Reconciliation of consolidated net assets / shareholders' equity from Canadian  
to UK GAAP as applied by Shire                                                  

                                                        [Enlarge/Download Table]

                                                                As at              As at              As at 
                                                     31 December 1998   31 December 1999   31 December 2000 
                                              Notes           CAN$000            CAN$000            CAN$000 
                                                                                                            
As reported under Canadian GAAP                               478,621            376,864            684,840 
Adjustments for:                                                                                            
Long term investments                           (b)           (40,788)           (64,227)                -- 
Property, plant and equipment                   (c)                --                 --             (6,107)
Deferred charges                                (c)            (3,542)            (4,648)            (5,197)
Consolidation of CliniChem                      (a)           126,117             58,462               (841)
Retained losses from discontinued operations    (e)                --             17,000            (17,000)
                                                     ----------------   ----------------   ---------------- 
As reported under UK GAAP                                     560,408            383,451            655,695 
                                                     ----------------   ----------------   ---------------- 

Notes:                                                                          

(a) CliniChem Development, Inc. ("CliniChem")                                   

Consolidation of CliniChem                                                      

In 1998, BioChem spun-off to its shareholders its investment in CliniChem. 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.    
Applying Shire's accounting policies, this transaction would result in          
CliniChem continuing to be consolidated by BioChem as BioChem has the right to  
exercise a dominant influence over CliniChem. However, at the time that         
CliniChem was spun-off, 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.                                                                    

On 15 December 2000, BioChem reacquired CliniChem and has accounted for the     
acquisition using purchase accounting.                                          

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The adjustments set out below cover all three years and represent the effects   
from:                                                                           

(i)   consolidating the financial position and results of operation of          
CliniChem;                                                          

(ii)  eliminating intercompany licensing revenues and costs; and                

(iii) recording accumulated deficits incurred by CliniChem during the period    
that it was not consolidated.                                       

                                                        [Enlarge/Download Table]

                                       Year ended         Year ended         Year ended 
                                      31 December        31 December        31 December 
                                             1998               1999               2000 
                                          CAN$000            CAN$000            CAN$000 
                                                                                        
Turnover                                  (22,139)           (74,254)           (60,794)
Operating expenses                             --                 --                 -- 
                                 ----------------   ----------------   ---------------- 
Operating loss                            (22,139)           (74,254)           (60,794)
Interest income                             4,061              5,263              1,872 
                                 ----------------   ----------------   ---------------- 
Loss before taxes                         (18,078)           (68,991)           (58,922)
Income taxes                                  694              1,336              1,301 
                                 ----------------   ----------------   ---------------- 
Loss from continuing operations           (17,384)           (67,655)           (57,621)
                                 ================   ================   ================ 



                                            As at              As at              As at 
                                      31 December        31 December        31 December 
                                             1998               1999               2000 
                                          CAN$000            CAN$000            CAN$000 
                                                                                        
Shareholders' equity                      126,117             58,462               (841)
                                 ================   ================   ================ 

These adjustments have been derived form the financial results of CliniChem as  
follows:                                                                        

                                                        [Enlarge/Download Table]

                                                             UK GAAP                    
                                    Canadian GAAP         alignments            UK GAAP 
Profit and loss accounts                  CAN$000            CAN$000            CAN$000 
                                                                                        
Period ended 31 December 1998                                                           
Turnover                                    4,061             (4,061)                -- 
Operating expenses                        (21,379)              (760)           (22,139)
                                 ----------------   ----------------   ---------------- 
Operating loss                            (17,318)            (4,821)           (22,139)
Interest income                                --              4,061              4,061 
                                 ----------------   ----------------   ---------------- 
Loss before taxes                         (17,318)              (760)           (18,078)
Income taxes                                  (66)               760                694 
                                 ----------------   ----------------   ---------------- 
Loss from continuing operations           (17,384)                --            (17,384)
                                 ----------------   ----------------   ---------------- 

Period ended 31 December 1999                                                           
Turnover                                    5,263             (5,263)                -- 
Operating expenses                        (72,918)            (1,336)           (74,254)
                                 ----------------   ----------------   ---------------- 
Operating loss                            (67,655)            (6,599)           (74,254)
Interest income                                --              5,263              5,263 
                                 ----------------   ----------------   ---------------- 
Loss before taxes                         (67,655)            (1,336)           (68,991)
Income taxes                                   --              1,336              1,336 
                                 ----------------   ----------------   ---------------- 
Loss from continuing operations           (67,655)                --            (67,655)
                                 ----------------   ----------------   ---------------- 

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                                                                                          UK GAAP                    
                                                                 Canadian GAAP         alignments            UK GAAP 
Profit and loss accounts                                               CAN$000            CAN$000            CAN$000 
                                                                                                                     
Period ended 14 December 2000                                                                                        
Total revenue                                                            1,894             (1,894)                -- 
Operating expenses                                                     (59,515)            (1,279)           (60,794)
                                                              ----------------   ----------------   ---------------- 
Operating loss                                                         (57,621)            (3,173)           (60,794)
Interest income                                                             --              1,872              1,872 
                                                              ----------------   ----------------   ---------------- 
Loss before taxes                                                      (57,621)            (1,301)           (58,922)
Income taxes                                                                --              1,301              1,301 
                                                              ----------------   ----------------   ---------------- 
Loss from continuing operations                                        (57,621)                --            (57,621)
                                                              ----------------   ----------------   ---------------- 



                                                                         As at              As at              As at 
                                                                   31 December        31 December        31 December 
Balance Sheet Data                                                        1998               1999               2000*
                                                                       CAN$000            CAN$000            CAN$000 
                                                                                                                     
Cash and cash equivalents                                               20,009              1,178             11,041 
Temporary investments                                                  114,392             69,247                 -- 
Taxes and other receivables                                              1,115              3,699              2,695 
Scientific research and experimental development tax credits                                                         
  receivable                                                               759              1,243              1,089 
                                                              ----------------   ----------------   ---------------- 
Total current assets                                                   136,275             75,367             14,825 
                                                              ----------------   ----------------   ---------------- 
Accounts payable and accrued liabilities                                10,158             16,905             13,984 
                                                              ----------------   ----------------   ---------------- 
Shareholders' equity                                                                                                 
Share capital                                                                1                  1                  1 
Contributed surplus                                                    143,500            143,500            143,500 
Deficit accumulated during the development stage                                                                     
                                                                       (17,384)           (85,039)          (142,660)
                                                              ----------------   ----------------   ---------------- 
                                                                       126,117             58,462                841 
                                                              ================   ================   ================ 

*   As CliniChem was consolidated following the re-acquisition as discussed     
above, CAN$841,000 is already included in the BioChem results and       
therefore needs to be reversed.                                         

Transaction costs                                                               

The difference between the CAN$150,000,000 cash contribution to CliniChem's     
capital by BioChem and the CAN$143,500,000 recorded as a contributed surplus    
by CliniChem represents CAN$6,500,000 of transaction costs. These costs have    
been included in the profit and loss account for the year ended 31 December     
1998.                                                                           

(b) Share of loss in a company subject to significant influence                 

Under UK GAAP, BioChem would continue to record changes in the carrying value   
of its investment in North American Vaccine Inc. (NAVA) even if the             
application of the equity method results in an interest in net liabilities      
rather than net assets. The only exception is where there is sufficient         
evidence that an event has irrevocably changed the relationship between the     
investor and its investee, marking the investor's irreversible withdrawal from  
the investee.                                                                   

(c) Deferred charges                                                            

Urgent Issues Task Force pronouncement number 24 ("UITF 24"), "Accounting for   
Start Up Costs", states that costs which are not directly associated with       
tangible fixed assets in accordance with FRS 15, should not be recognised on    
the balance sheet, but expensed as incurred.                                    

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(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 The deferred foreign exchange losses on the balance sheet  
amounting to CAN$ nil and CAN$722,000 as at 31 December 2000 and 1999           
respectively would have been eliminated under UK GAAP. Accordingly a foreign    
exchange gain amounting to CAN$722,000 is recognised in earnings for the year   
ended 31 December 2000 and a foreign exchange loss amounting to CAN$594,000     
and CAN$128,000 is recognised in earnings for the years ended 31 December 1999  
and 1998 respectively.                                                          

(e) Discontinued operations                                                     

Under UK GAAP and in accordance with Financial Reporting Standard No. 12 (FRS   
12), provisions for the costs of disposal of an operation are only recognised   
when there is a present obligation (legal or constructive) as a result of a     
past event, it is probable that a transfer of economic benefits will be         
required to settle the obligation, and a reliable estimate can be made of the   
amount of the obligation. Unless these conditions are met, no provision should  
be recognised. In particular, future operating losses of a business to be       
disposed should not be provided for.                                            

Under Canadian GAAP, provisions for losses on discontinued operations can be    
recognised earlier, generally when a decision has been made to dispose of an    
operation. These adjustments reflect the accounting for the disposal of these   
operations in accordance with UK GAAP.                                          

(f) Cash flow statement                                                         

Under UK GAAP, consolidated cash flow statements are presented in accordance    
with Financial Reporting Standard No. 1 (FRS 1). The statements prepared under  
FRS 1 present substantially the same information as that required under         
Canadian GAAP. Under Canadian GAAP, however, there are certain differences      
from UK GAAP with regard to classification of items within the cash flow        
statement with regard to the definition of cash.                                

Under Canadian GAAP, cash and cash equivalents include cash and short-tem       
investments with original maturities of three months or less. Under FRS 1,      
cash comprises cash in hand and at bank (on demand) and overnight deposits,     
net of bank overdrafts.                                                         

Under FRS 1, cash flows are presented separately for operating activities,      
returns on investments and servicing of finance, taxation, capital expenditure  
and financial investments, acquisitions and disposals, dividends paid to the    
company's shareholders, and management of liquid resources and financing.       
Under Canadian GAAP, cash flows are reported as resulting from operating,       
investing and financing activities.                                             

Cash flows under FRS 1 in respect of interest received, interest paid and       
taxation would be included within operating activities under Canadian GAAP.     
Cash flows from purchases, sales and maturities of trading securities, while    
not separately identified under UK GAAP, would be included within investing     
activities under Canadian GAAP. Dividends paid would be included within         
financing activities under Canadian GAAP. Under UK GAAP movements in bank       
overdrafts are classified as movements in cash while under Canadian GAAP they   
are classified as a financing activity.                                         

(g) 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 UK  
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 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.                                     

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[graphic]                             

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                                                         
Global Investment Banking                                                       
Winchester House                                                                
1 Great Winchester Street                                                       
London                                                                          
EC2N 2DB                                                           1 March 2001 

Dear Sirs                                                                       

We report on the unaudited reconciliations to UK GAAP 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 and its subsidiaries ("the financial      
information (as adjusted) of BioChem") prepared on the basis of the accounting  
policies of Shire in accordance with UK GAAP as set out on pages 58 to 65 in    
Part IV of the circular and listing particulars dated 1 March 2001 issued by    
Shire.                                                                          

Responsibilities                                                                

It is the responsibility solely of the Directors of Shire to prepare the        
financial information (as adjusted) of BioChem in accordance with paragraph     
12.11 of the Listing Rules of the UK Listing Authority ("the Listing Rules").   
It is our responsibility to form an opinion, as required by the Listing Rules,  
on the financial information (as adjusted) of BioChem and to report our         
opinion to you.                                                                 

The financial information (as adjusted) of BioChem incorporates significant     
reclassifications of and adjustments to the historical financial statements 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 in the United Kingdom 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        
financial information (as adjusted) of BioChem with the Directors of Shire.     

Our work has not been carried out in accordance with auditing standards         
generally accepted in the United States 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 financial information (as adjusted) of BioChem has been properly      
compiled on the basis stated; and                                   

2.    the adjustments are appropriate for the purpose of presenting the         
   financial information (as adjusted) of BioChem on a basis consistent in
all material respects with the accounting policies of Shire under UK
GAAP.                                                               

Yours faithfully                                                                

Arthur Andersen                                                                 
Chartered Accountants                                                           

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PART V

Financial Information on Shire - under US GAAP

In addition to the annual statutory accounts, Shire also prepare audited        
consolidated financial statements in accordance with US GAAP in US$ as filed    
with the US SEC. The information set out on pages 66 to 91 of this document     
has been extracted without material adjustment from the US GAAP, US$ financial  
statements as filed with the US SEC on form 10-K on 27 February 2001 for the    
periods ended 31 December 1998, 1999 and 2000.                                  

Statutory consolidated accounts of the Group for the financial periods ended    
31 December 1998, 1999 and 2000 received an unqualified audit opinion and did   
not contain a statement under section 237(2) and (3) of the Companies Act       
1985. The statutory consolidated accounts for 1998 and 1999 have been           
delivered to the Registrar. The statutory consolidated accounts for 2000 will   
be delivered to the Registrar following the annual general meeting. 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 2000.                                   

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Consolidated Balance Sheets 

(In thousands of US dollars)

                                                        [Enlarge/Download Table]

                                                                      31 December        31 December        31 December 
                                                                             2000               1999               1998 
                                                                                                                        
ASSETS                                                                                                                  
Current assets:                                                                                                         
Cash and cash equivalents                                                  46,598             54,082             52,973 
Marketable securities and other current asset investments                 139,745             84,344             71,726 
Accounts receivable, net                                                   93,830             59,018             76,622 
Inventories, net                                                           47,109             39,538             34,639 
Deferred tax asset                                                         26,971              5,312              5,222 
Prepaid expenses and other current assets                                   9,736              9,012              5,116 
                                                                 ----------------   ----------------   ---------------- 
Total current assets                                                      363,989            251,306            246,298 
Investments                                                                 6,139              2,604             10,000 
Property, plant and equipment, net                                         49,685             37,484             42,682 
Intangible assets, net                                                    556,013            557,934            537,159 
Deferred tax asset                                                          6,298             31,799             32,632 
Other assets                                                               22,608              6,636              4,834 
                                                                 ----------------   ----------------   ---------------- 
Total assets                                                            1,004,732            887,763            873,605 
                                                                 ================   ================   ================ 
LIABILITIES AND SHAREHOLDERS' EQUITY                                                                                    
Current liabilities:                                                                                                    
Current installments of long-term debt                                      1,448              9,608             12,351 
Accounts and notes payable                                                 99,437            114,509             54,896 
Other current liabilities                                                  10,528             48,703             14,041 
                                                                 ----------------   ----------------   ---------------- 
Total current liabilities                                                 111,413            172,820             81,288 
Long-term debt, excluding current installments                            126,364            126,314            126,774 
Other non-current liabilities                                              14,196              1,345              2,229 
                                                                 ----------------   ----------------   ---------------- 
Total liabilities                                                         251,973            300,479            210,291 
                                                                 ================   ================   ================ 
Shareholders' equity:                                                                                                   
Common stock, 5p par value; 400,000,000 shares authorized; and                                                          
  257,088,451 shares issued and outstanding (1999: 244,519,024)            21,035             20,063             11,725 
Additional paid-in capital                                                938,493            832,650            814,953 
Accumulated other comprehensive losses                                    (27,814)           (10,303)            (3,236)
Accumulated deficit                                                      (178,955)          (255,126)          (160,128)
                                                                 ----------------   ----------------   ---------------- 
Total shareholders' equity                                                752,759            587,284            663,314 
                                                                 ----------------   ----------------   ---------------- 
Total liabilities and shareholders' equity                              1,004,732            887,763            873,605 
                                                                 ================   ================   ================ 

The accompanying notes are an integral part of these consolidated financial     
statements.                                                                     

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Consolidated Statements of Income 

(In thousands of US dollars, except share and per share data) 

                                                        [Enlarge/Download Table]

                                                                                Years ended 31 December                  
                                                                            2000                1999                1998 
                                                                                                                         
Revenues:                                                                                                                
Product sales                                                            498,092             385,203             291,785 
Licensing and development                                                 14,147              10,772              11,821 
Royalties                                                                  4,107               3,562               3,697 
Other revenues                                                             1,262               1,995               1,681 
                                                                ----------------    ----------------    ---------------- 
Total revenues                                                           517,608             401,532             308,984 
                                                                ================    ================    ================ 
Costs and expenses:                                                                                                      
Cost of revenues                                                          88,158              93,475              95,013 
Research and development                                                 106,131              77,503              59,253 
Selling, general and administrative (inclusive of stock option                                                           
 compensation charge of $21,914, $11,933 and                                                                             
 $5,497 respectively)                                                    201,055             171,386             131,702 
Other charges:                                                                                                           
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                                                 395,344             477,600             285,748 
                                                                ================    ================    ================ 
Operating income/(loss)                                                  122,264             (76,068)             23,236 
Interest income                                                            6,216               7,349               6,398 
Interest expense                                                         (12,187)             (9,742)             (6,511)
Other (expenses)/income                                                     (105)               (475)                440 
                                                                ----------------    ----------------    ---------------- 
Total other (expenses)/income                                             (6,076)             (2,868)                327 
                                                                ================    ================    ================ 
Income/(loss) before income taxes                                        116,188             (78,936)             23,563 
Income taxes                                                             (40,017)            (16,062)             (2,991)
                                                                ----------------    ----------------    ---------------- 
Net income/(loss)                                                         76,171             (94,998)             20,572 
                                                                ================    ================    ================ 
Net income/(loss) per share:                                                                                             
Basic                                                                      $0.30              $(0.39)              $0.09 
Diluted                                                                    $0.29              $(0.39)              $0.08 
Weighted average number of shares:                                                                                       
Basic                                                                252,497,255         244,698,721         234,044,732 
Diluted                                                              260,344,932         244,698,721         242,806,410 

The accompanying notes are an integral part of these consolidated financial     
statements.                                                                     

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Consolidated Statements of Comprehensive Income/(Losses)

(In thousands of US dollars)

                                                        [Enlarge/Download Table]

                                                                         Years ended 31 December              
                                                                      2000              1999             1998 
                                                                                                              
Net income/(loss)                                                   76,171           (94,998)          20,572 
Foreign currency translation adjustments                           (17,463)           (7,067)            (840)
Unrealized holding (loss)/gain on marketable securities and                                                   
  non-current investments                                              (48)             (411)              96 
                                                             -------------     -------------    ------------- 
Comprehensive income/(loss)                                         58,660          (102,476)          19,828 
                                                             =============     =============    ============= 

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]

                                                                                          Years ended 31 December              
                                                                                       2000              1999             1998 
                                                                                                                               
Cash flows from operating activities:                                                                                          
Net income/(loss)                                                                    76,171           (94,998)          20,572 
Adjustments to reconcile net income/(loss) to net cash provided by operating                                                   
  activities:                                                                                                                  
Depreciation and amortization                                                        30,475            28,598           25,249 
Stock option compensation                                                            21,914            11,933            5,497 
Tax benefit of stock option compensation, credited directly to equity                30,782             1,964            3,006 
Non cash exchange gains and losses                                                   (1,676)             (664)          (1,816)
(Gain)/loss on sale of fixed assets                                                      --              (828)              16 
Loss on sale of intangible assets                                                     1,514             5,825               -- 
Write-down of investment                                                                 --             7,546               -- 
(Increase)/decrease in accounts receivable                                          (54,433)           16,272          (20,566)
Increase in inventory                                                                (7,571)           (6,543)          (5,170)
Decrease/(increase) in deferred tax asset                                             3,842               743           (4,420)
Increase in accounts payable                                                         43,373            37,083           12,186 
Reserve for restructuring charges                                                   (83,608)           83,608               -- 
                                                                              -------------     -------------    ------------- 
Net cash provided by operating activities                                            60,783            90,539           34,554 
                                                                              -------------     -------------    ------------- 
Cash flows from investing activities:                                                                                          
(Investment in)/redemption of marketable securities                                  (1,997)           (7,940)           3,825 
Increase in cash placed on short term deposit                                       (53,404)           (4,677)         (35,664)
Purchase of long-term investment                                                     (3,591)               --          (10,000)
Purchase of subsidiary undertakings                                                      --           (32,000)              -- 
Expenses of acquisition                                                              (1,461)               --             (551)
Net cash acquired with subsidiary undertakings                                           --             1,979               -- 
Purchase of intangible assets                                                       (38,379)          (57,848)        (142,258)
Purchase of fixed assets                                                            (28,359)           (4,786)         (13,871)
Proceeds from sale of intangible fixed assets                                            --             6,575            1,033 
Proceeds from sale of fixed assets                                                   12,007             1,413               60 
Collection on notes receivable                                                          766             7,195            1,751 
                                                                              -------------     -------------    ------------- 
Net cash used in investing activities                                              (114,418)          (90,089)        (195,675)
                                                                              -------------     -------------    ------------- 

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                                                        [Enlarge/Download Table]

                                                                                  Years ended 31 December              
                                                                               2000              1999             1998 
                                                                                                                       
Cash flows from financing activities:                                                                                  
Long-term debt issued                                                            --                --          125,000 
Payments on long-term debt, capital leases and notes                         (8,110)          (11,499)         (11,708)
Payment of debt issuance costs                                                   --                --           (2,528)
Proceeds from issue of common stock, net                                      8,472             8,615           35,027 
Proceeds from exercise of options                                            45,647             3,523            4,082 
Proceeds from issue of preferred stock                                           --                --            4,494 
Cash dividends paid                                                              --                --             (150)
                                                                      -------------     -------------    ------------- 
Net cash provided by financing activities                                    46,009               639          154,217 
                                                                      -------------     -------------    ------------- 
Effect of foreign exchange rate changes on cash and cash equivalents            142                20                9 
                                                                      -------------     -------------    ------------- 
Net (decrease)/increase in cash and cash equivalents                         (7,484)            1,109           (6,895)
Cash and cash equivalents at beginning of period                             54,082            52,973           59,868 
                                                                      -------------     -------------    ------------- 
Cash and cash equivalents at end of period                                   46,598            54,082           52,973 
                                                                      -------------     -------------    ------------- 

Supplemental cash flow information:                                                                                    
Interest paid                                                                12,156            11,612            3,948 
Income taxes paid                                                             6,650            11,356            5,285 
Non cash activities:                                                                                                   
Notes issued for product acquisitions                                            --            11,800               -- 
Notes received for sale of product rights                                        --                --              218 
Common stock issued for product acquisitions                                  3,085                --           11,572 
Common stock issued on conversion of zero-coupon note                         8,772                --           14,042 
Debt assumed on acquisition of subsidiaries                                      --             3,300               -- 
Capitalized leases                                                               --                --              131 

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 except share data)

                                                        [Enlarge/Download Table]

                                                           Additional                  Accumulated other           Total 
                                       Common     Common      paid-in     Accumulated      comprehensive   shareholders' 
                                        stock      stock      capital         deficit             losses          equity 
                                                                                                                         
Balances as of 31 December 1997        10,345    124,531      738,637        (180,666)            (2,396)        565,920 
Net income                                 --         --           --          20,572                 --          20,572 
Dividends paid by pooled entity            --         --           --             (34)                --             (34)
Foreign currency translation               --         --           --              --               (840)           (840)
Issuance of common stock                  905     10,861       57,110              --                 --          58,015 
Issuance of common stock by pooled                                                                                       
  entity                                   --         --        9,220              --                 --           9,220 
Issuance costs                             --         --       (2,124)             --                 --          (2,124)
Options exercised                         475      5,700        3,607              --                 --           4,082 
Stock option compensation                  --         --        5,497              --                 --           5,497 
Tax benefit associated with                                                                                              
  exercise of stock options                --         --        3,006              --                 --           3,006 
                                    ---------  ---------  -----------   -------------     --------------   ------------- 
Balances as of 31 December 1998        11,725    141,092      814,953        (160,128)            (3,236)        663,314 
Net loss                                   --         --           --         (94,998)                --         (94,998)
Foreign currency translation               --         --           --              --             (7,067)         (7,067)
Issuance of common stock for                                                                                             
  acquisitions                          8,123    100,767       (8,123)             --                 --              -- 
Issuance of common stock by pooled                                                                                       
  entity                                   --         --        8,615              --                 --           8,615 
Options exercised                         215      2,660        3,308              --                 --           3,523 
Stock option compensation                  --         --       11,933              --                 --          11,933 
Tax benefit associated with                                                                                              
  exercise of stock options                --         --        1,964              --                 --           1,964 
                                    ---------  ---------  -----------   -------------     --------------   ------------- 
Balances as of                                                                                                           
31 December 1999                       20,063    244,519      832,650        (255,126)           (10,303)        587,284 
Net income                                 --         --           --          76,171                 --          76,171 
Unrealized holding loss on                                                                                               
  marketable securities                                                                              (48)            (48)
Foreign currency translation               --         --           --              --            (17,463)        (17,463)
Issuance of common stock                  137      1,843       11,720              --                 --          11,857 
Issue costs                                                    (3,385)             --                 --          (3,385)
Options exercised                         835     10,726       44,812              --                 --          45,647 
Stock option compensation                  --         --       21,914              --                 --          21,914 
Tax benefit associated with                                                                                              
  exercise of stock options                --         --       30,782              --                 --          30,782 
                                    ---------  ---------  -----------   -------------     --------------   ------------- 
Balances as of 31 December 2000        21,035    257,088      938,493        (178,955)           (27,814)        752,759 
                                    =========  =========  ===========   =============     ==============   ============= 

The accompanying notes are an integral part of these consolidated financial     
statements.                                                                     

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Notes to the 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, oncology and gastroenterology. The        
Company's principal products include Adderall, for the treatment of ADHD,       
Agrylin, for the treatment of thrombocythemia and Pentasa, for the treatment    
of ulcerative colitis.                                                          

The Group has operations in the U.S., the U.K., 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                                                         

The Company's principal revenue streams and their respective accounting         
treatments are discussed below. This is in accordance with SAB 101, under       
which revenue is recognised when:                                               

o     there is persuasive evidence of an arrangement;               

   o     delivery of products has occurred or services have been rendered;

o     the seller's price to the buyer is fixed or determinable; and 

o     collectibility is reasonably assured.                         

(i)   Product sales                                                 

      Revenue for the sales of products is recognised as net revenue
   upon shipment to customers. Provisions for certain rebates,
      product returns and discounts to customers are provided for as
         reductions to net revenue in the same period as the related sales
are recorded.                                           

(ii)  Licensing and development fees                                

      Licensing and development fees represent revenues derived from
          license agreements and from collaborative research and development
arrangements.                                           

        Initial license fees are not considered to be separable from the
       associated research and development activities, even where such
       fees are non-refundable and not creditable against research and
          development services to be rendered. Initial license fees are thus
          deferred and recognised over the period of the license term or the
       period of the associated research and development agreement. In
      circumstances where initial license fees are not for a defined
       period, revenues are deferred and recognized over the period to
  the expiration of the relevant patent to which the license
relates.                                                

 Where licensing arrangements are accompanied by an equity
        subscription agreement, the series of transactions are accounted
          for as a multiple elements arrangement. Accordingly, the aggregate
         consideration is allocated to the two elements of the arrangement
as described below.                                     

        The fair value of the equity subscription is calculated as being
   the aggregate number of shares issued at the average of the
opening and closing share prices on the date of issue.  

       During the term of certain research and development agreements,
 the Company receives non-refundable milestones as certain
  technical targets are achieved. Revenues are recognised on
achievement of milestones.                              

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         The Company also receives non-refundable clinical milestones when
  certain targets are achieved during the clinical phases of
 development, such as the submission of clinical data to a
      regulatory authority. These clinical milestones are recognised
          when received. If milestone payments are creditable against future
       royalty payments, the milestones are deferred and released over
         the period in which the royalties are anticipated to be received.

(iii) Royalty income                                                

         Royalty income relating to licensed technology is recognized when
receivable.                                             

Where applicable, all 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. The SEC  
issued Staff Accounting Bulletin (SAB) No. 101, "Revenue Recognition in         
Financial Statements", which reemphasises existing guidance related to revenue  
recognition, including criteria specified in the Financial Accounting           
Standards Board (FASB) conceptual framework on timing of revenue recognition,   
and presentation and disclosure of revenue in the financial statements. SAB     
No. 101 was effective for the fourth quarter of 2000. The implementation of     
SAB No. 101 did not have a material impact on the company's results of          
operations, cashflows or financial position.                                    

(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 costs of operating leases are 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 capital 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 produce a level yield on the         
balance of the capital lease obligation.                                        

(f) Pensions                                                                    

The Group contributes to personal defined contribution pension plans of         
employees. Contributions are charged to the income statement as they become     
payable. These contributions are detailed in Note 22. 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 amortized to    
the income statement over the term of the debt using the level yield method.    
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 $6,810,000, $6,646,000 and $6,715,000 for the years ended 31        
December 2000, 1999 and 1998 respectively.                                      

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(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. Transaction gains and losses are         
recognised 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 exchange transaction gains and losses on an after-tax basis    
included in consolidated net income in the years ended 31 December 2000, 1999,  
and 1998, pursuant to Statement of Financial Accounting Standards (SFAS) No.    
52, Foreign Currency Translation, amounted to $67,000 loss, $880,000 loss and   
$457,000 gain, 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 realizable 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.                                              

(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. Investments in equities with readily       
determinable market values are marked to market. 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 capitalized  
and written off on a straight line basis over its useful economic life.         

Goodwill recognised in each significant business combination is being           
amortized over a period of five 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 and earnings from operations   
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:             

    o     regulatory and legal provisions, including the regulatory approval
   and review process, patent issues and actions by government
agencies                                                

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    o     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

  o     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 installments 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, 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. Significant customers are   
disclosed in Note 20(d). 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.                                         

(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   
recognized 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 June 15,    
2000.                                                                           

In June 2000, the FASB issued Statement No. 138 "Accounting for Certain         
Derivative Instruments and Certain Hedging Activities - an Amendment of FASB    
Statement No. 133". SFAS 138 amends SFAS 133 to (a) exclude from the scope of   
SFAS No. 133 non financial assets that will be delivered in quantities          
expected to be used or sold by the company over a reasonable period in the      
normal course of business and for which physical delivery is                    

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probable, (b) permit hedging of a benchmark interest rate, (c) allow hedging    
of foreign-currency-denominated assets and liabilities and (d) allow for        
limited hedging of net foreign currency exposures.                              

The Company has reviewed it's existing contracts and has put procedures in      
place to monitor and evaluate transactions in accordance with FASB Statement    
No. 133. The Company does not believe the adoption of this Statement will have  
a material impact on the results of operations or it's financial position       
going forward. There is no impact on the financial position as at 31 December   
2000.                                                                           

2.  Business Combinations and Reorganisations                                   

Year ended 31 December 2000                                                     

No significant acquisitions or dispositions of businesses took place during     
the year ended 31 December 2000.                                                

On 11 December 2000 the Company announced that it has entered into an           
agreement to merge with BioChem Pharma Inc. ("BioChem"), an international       
specialty pharmaceutical company based in Laval, Canada. It is intended that    
the merger will be achieved through an exchange of shares. The Merger, which    
is expected to close in the second quarter of 2001, is subject to the approval  
of Shire and BioChem shareholders, the absence of any material change           
affecting BioChem, the accounting of the merger as a pooling of interests, the  
obtaining of regulatory approvals, and other customary terms and conditions.    

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, the Company 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 a $3.3 million   
liability due to Knoll AG.                                                      

On 17 November 1999, the Company 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 provided Shire with marketing and distribution           
operations in France, Germany and Italy respectively. These acquisitions were   
accounted for using purchase accounting. Total goodwill of $22.4 million was    
recorded and is being amortized on a straight line basis over a period of 20    
years, the expected economic life of the underlying assets acquired. The        
results of operations of the acquired subsidiaries 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:                                                                     

                                                                [Download Table]

                                       $'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 
                               ============= 

$7.5 million was in respect of the Cebutid trademark.                           

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The purchase price of $22.2 million for Fuisz Pharma GmbH was allocated as      
follows:                                                                        

                                                                [Download Table]

                                       $'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:                                                           

                                                                [Download Table]

                                       $'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 100% of the outstanding stock of       
Roberts Pharmaceutical Corporation ("Roberts") in exchange for 100,767,482      
ordinary shares.                                                                

This transaction was accounted for by the pooling of interests method.          
Following consummation of the transaction, the Company decided to restructure   
the enlarged business and accordingly 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 and Shire as if the merger was consummated   
on 1 January 1998.                                                              

(c) Dispositions                                                                

On 13 January 1999 the Company disposed of its Indianapolis manufacturing       
plant for a net consideration after expenses of $1.5 million including a loan   
note of $0.5 million. A net gain of $0.8 million was recorded in the            
consolidated statement of income.                                               

During November 1999, the Company sold the product Tigan for $6.4 million. The  
Company recorded a loss on disposal of $5.8 million.                            

(d) Pro forma information                                                       

The pro forma effect in 1999 and 1998 of the 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:                                                                     

                                                                [Download Table]

                                                           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.                                                

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3.  Cash and Cash Equivalents                                                   

                                                                [Download Table]

                          31 December  31 December  31 December
                                 2000         1999         1998
                                $'000        $'000        $'000
                                                               
Cash at bank and in hand       46,598       54,082       52,973

4.  Marketable Securities and Other Current Asset Investments                   

                                                                [Download Table]

                           31 December    31 December    31 December
                                  2000           1999           1998
                                 $'000          $'000          $'000
                                                                    
Marketable securities           46,000         44,003         36,062
Commercial paper                28,000         39,200          6,510
Institutional cash fund         65,745          1,141         29,154
                         -------------  -------------  -------------
                               139,745         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 2000.                                                               

The Company recorded realised losses on sales of marketable securities during   
the years ended 31 December 2000, 1999 and 1998 of Nil, $227,000 and $30,000.   

Unrealized holding gains and losses on available for sale marketable            
securities, as disclosed in the Statement of Comprehensive Income, amounted to  
Nil, $411,000 loss and $96,000 gain at 31 December 2000, 1999 and 1998          
respectively.                                                                   

Maturity dates of marketable securities held at 31 December 2000 ranged from    
one to 3 months. Maturity dates of marketable securities held at 31 December    
1999 primarily ranged from three to 6 months (31 December 1998: three to 6      
months).                                                                        

5.  Accounts Receivable                                                         

                                                                [Download Table]

                     31 December    31 December    31 December
                            2000           1999           1998
                           $'000          $'000          $'000
                                                              
Trade receivables         92,204         55,953         64,857
Notes receivable             334            678          9,426
Other receivables          1,292          2,387          2,339
                   -------------  -------------  -------------
                          93,830         59,018         76,622
                   =============  =============  =============

Trade receivables included above are stated net of a provision for doubtful     
debts at 31 December 2000, 1999 and 1998 of $819,000, $565,000 and $577,000     
respectively.                                                                   

At 31 December 2000 other receivables were in respect of accrued royalty        
income. At 31 December 1999 other receivables included $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                                                                   

                                                                [Download Table]

                     31 December      31 December      31 December
                            2000             1999             1998
                           $'000            $'000            $'000
                                                                  
Finished goods            23,066           26,573           19,990
Work-in-process           11,776            6,389            6,113
Raw materials             12,267            6,576            8,536
                 ---------------  ---------------  ---------------
                          47,109           39,538           34,639
                 ===============  ===============  ===============

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7.  Prepaid Expenses and Other Current Assets                                   

                                                                [Download Table]

                              31 December      31 December      31 December
                                     2000             1999             1998
                                    $'000            $'000            $'000
                                                                           
Prepaid expenses                    3,807            6,621            4,286
Deferred financing costs              500            1,098               --
Tooling costs                       1,000               --               --
Other current assets                4,429            1,293              830
                          ---------------  ---------------  ---------------
                                    9,736            9,012            5,116
                          ===============  ===============  ===============

The deferred financing costs are in respect of the $125 million long-term loan  
(see Note 15 Long-term Debt) and are being amortised over the five-year term    
of the loan.                                                                    

Tooling costs are not currently being amortised as the manufacturing equipment  
to which they relate is not yet in use. It is anticipated that production will  
commence during 2001, and based on expected production volumes, approximately   
$1,000,000 of the costs are classified as current at 31 December 2000. The      
Company does not own the tools but has a non-cancelable right to use the tools  
during the contract period.                                                     

Included within other current assets at 31 December 2000 is valued added tax    
recoverable of $1,899,000.                                                      

8.  Investments                                                                 

                                                                [Download Table]

                                31 December      31 December      31 December
                                       2000             1999             1998
                                      $'000            $'000            $'000
                                                                             
RiboGene Inc.                         2,604            2,604           10,000
Cortex Pharmaceuticals Inc.             836               --               --
D-Pharm Ltd                           2,000               --               --
CeNeS Pharmaceuticals plc               699               --               --
                            ---------------  ---------------  ---------------
                                      6,139            2,604           10,000
                            ===============  ===============  ===============

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 April 2000, the Company entered into an option agreement with Cortex         
Pharmaceuticals Inc. under which Shire will evaluate the use of Cortex's        
Ampakine CX516 for the treatment of ADHD. Under the terms of the agreement,     
the Company will undertake a double-blind, placebo-controlled evaluation of     
CX516 in ADHD patients. If the study proves effective, Shire has the right to   
convert its option into an exclusive worldwide license for the Ampakines for    
ADHD under a development and licensing agreement. In exchange for the option,   
Cortex received approximately $0.8 million and issued common stock to Shire.    

In March 2000, the Company entered into a license agreement with D-Pharm Ltd,   
under which Shire has undertaken to develop and market DP-VPA for the           
treatment of epilepsy. DP-VPA, which Shire has designated SPD 421, is a unique  
new chemical analogue of valproic acid which has successfully completed Phase   
I studies. The terms of the agreement included an upfront fee payable to D-     
Pharm comprising cash and an equity investment, as well as clinical and         
commercial milestone payments. The cash payment was expensed as incurred in     
accordance with the Company's accounting policies. The equity investment has    
been recorded at cost.                                                          

In December 2000, Shire signed a research, development and licensing agreement  
with CeNeS Pharmaceuticals plc for the development of CeNeS' dopamine D1        
agonist program for the treatment of Parkinson's disease. Shire will make       
milestone payments and pay CeNeS royalties on products developed under the      
agreement. Shire has made an equity investment in CeNeS of approximately $0.7   
million and will fund all development work.                                     

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The Company recorded an unrealized holding loss of $48,000 in respect of non-   
current investments marked to market at 31 December 2000. This is shown in the  
Statement of Comprehensive income. There were no unrealized holding gains or    
losses at 31 December 1999 in respect of non-current investments.               

9.  Property, Plant and Equipment                                               

                                                        [Enlarge/Download Table]

                                                       31 December       31 December       31 December
                                                              2000              1999              1998
                                                             $'000             $'000             $'000
                                                                                                      
Land and buildings                                          34,597            25,498            29,767
Office furniture, fittings and equipment                    12,575            14,527            12,253
Warehouse, laboratory and manufacturing equipment           13,272            10,595            10,053
                                                   ---------------   ---------------   ---------------
                                                            60,444            50,620            52,073
Less: Accumulated depreciation                             (10,759)          (13,136)            9,391
                                                   ---------------   ---------------   ---------------
                                                            49,685            37,484            42,682
                                                   ===============   ===============   ===============

Depreciation expense for the years ended 31 December 2000, 1999 and 1998 was    
$3,814,000 $4,243,000 and $3,281,000 respectively.                              

Included within land and buildings at 31 December 2000 is a new office          
facility purchased for $17.4 million, which will become the Group's new         
worldwide headquarters effective from March 2001. The building, purchased in    
October 2000, has not been depreciated as it will not become operational until  
March 2001.                                                                     

Included within land and buildings at 31 December 1999 is approximately $12     
million relating to the Company's Eatontown, New Jersey office facility that    
was classified as available for sale. The Company completed the sale of the     
Eatontown facility during the year ended 31 December 2000.                      

10. Intangible Assets                                                           

                                                        [Enlarge/Download Table]

                                             31 December       31 December       31 December
                                                    2000              1999              1998
                                                   $'000             $'000             $'000
                                                                                            
Intellectual property rights acquired            433,049           394,640           363,306
Goodwill arising on businesses acquired          222,865           238,897           223,776
                                         ---------------   ---------------   ---------------
                                                 655,914           633,537           587,082
Less: Accumulated amortisation                   (99,901)          (75,603)           49,923
                                         ---------------   ---------------   ---------------
                                                 556,013           557,934           537,159
                                         ===============   ===============   ===============

Amortisation expense for the years ended 31 December 2000, 1999 and 1998 was    
$26,661,000, $24,355,000 and $21,968,000 respectively.                          

Year ended 31 December 2000:                                                    

Included in intellectual property above is $15.9 million for the purchase from  
Salix Pharmaceuticals Ltd ("Salix") of the exclusive rights to balsalazide, a   
treatment for ulcerative colitis. The exclusive rights apply to certain         
European and Nordic countries. Under the terms of the agreement, the Company    
has undertaken to pay Salix up to a total of $24.0 million, including           
approximately $12.0 million in up-front fees and up to $12.0 million upon the   
achievement of certain milestones.                                              

In November 2000, the Company entered into an agreement with Nycomed Austria    
GmbH ("Nycomed") under which Shire extended the term of its exclusive           
distributor rights to the product ProAmatine in North America and the U.K. and  
Republic of Ireland, for approximately $21.1 million. Shire had previously      
marketed the product and paid Nycomed royalties on sales of ProAmatine. Under   
the terms of the agreement, Nycomed repaid all royalties received from Shire    
in respect of the year ended 31 December 2000 and has waived all rights to      
future royalties. The net cost to Shire of approximately $17.5 million is       
included as an addition to intangible assets in the year ended 31 December      
2000.                                                                           

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Other significant additions to intellectual property during the year ended 31   
December 2000 included a gastrointestinal product purchased for marketing and   
distribution in Spain for approximately $4.8 million.                           

Year ended 31 December 1999:                                                    

Included in intellectual property was $35,000,000 for the purchase of the       
worldwide rights to Agrylin during the year ended 31 December 1999, which       
allowed 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 Limited ($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 Tigan product    
rights. The loss on sale of $5,825,000 was recorded in the statement of         
operations.                                                                     

Year ended 31 December 1998:                                                    

Included in additions for the year ended 31 December 1998 was $1,494,000 for    
exclusive distributor rights in the UK and Ireland for Hyalgan, an              
osteoarthritis treatment and $949,000 related to the Carbatrol reacquisition.   

Included in disposals for the year ended 31 December 1998 was $1,018,000        
related to write off of the Nivalin trademark. Nivalin was acquired in 1997     
and was an approved product for marketing in one territory. In 1998, Nivalin    
provided revenues net of costs of approximately $25,000. Following the filing   
of the NDA for Reminyl (galantamine), it was decided to cease actively          
promoting Nivalin since the product would compete with Reminyl (galantamine).   
Following the launch of Reminyl (galantamine) in 2000, Nivalin was withdrawn    
from sale. The net revenues arising from Nivalin in 1999 were expected to be    
less than $25,000 and therefore the asset was fully written down at 31          
December 1998.                                                                  

11. Other Non-current Assets                                                    

                                                                [Download Table]

                               31 December       31 December       31 December
                                      2000              1999              1998
                                     $'000             $'000             $'000
                                                                              
Notes receivable                        --               422             2,369
Deferred financing costs             2,341             4,393                --
Tooling costs                        3,218                --                --
SERP investment                     16,115                --                --
Other assets                           934             1,821             2,465
                          ----------------  ----------------  ----------------
                                    22,608             6,636             4,834
                          ================  ================  ================

The deferred financing costs and tooling costs represent the non-current        
portion of the total assets respectively. For further details see Note 7        
"Prepaid Expenses and Other Current Assets" above.                              

For further details of the SERP investment, see Note 22 "Retirement Benefits".  
The amount shown above is the gross asset represented by non-current            
marketable securities. A liability of approximately $13.6 million is included   
within Note 16 "Other Non-current Liabilities".                                 

12. Current Portion of Long-term Debt                                           

                                                        [Enlarge/Download Table]

                                        31 December       31 December       31 December
                                               2000              1999              1998
                                              $'000             $'000             $'000
                                                                                       
Current portion of notes payable              1,448             9,573            11,178
Current portion of capital leases                --                35             1,173
                                   ----------------  ----------------  ----------------
                                              1,448             9,608            12,351
                                   ================  ================  ================

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13. Accounts and Notes Payable                                                  

                                                                [Download Table]

                             31 December       31 December       31 December
                                    2000              1999              1998
                                   $'000             $'000             $'000
                                                                            
Trade accounts payable            39,755            31,540            19,791
Accrued expenses                  59,682            79,520            35,105
Notes payable                         --             3,449                --
                        ----------------  ----------------  ----------------
                                  99,437           114,509            54,896
                        ================  ================  ================

The notes payable at 31 December 1999 were in respect of the divestment of      
certain products and were repaid in full during the year ended 31 December      
2000. The weighted average interest rate for these notes payable at 31 December 
1999 and 1998 was 6%.                                                           

14. Other Current Liabilities                                                   

                                                        [Enlarge/Download Table]

                                                   31 December       31 December       31 December
                                                          2000              1999              1998
                                                         $'000             $'000             $'000
                                                                                                  
Income taxes payable                                     4,263             6,727             3,134
Deferred tax liabilities                                    --                --               244
Payable for termination of license agreement               747               806               832
Other accrued liabilities                                5,518            41,170             9,831
                                              ----------------  ----------------  ----------------
                                                        10,528            48,703            14,041
                                              ================  ================  ================

Included within other accrued liabilities at 31 December 2000 is $1,024,000     
for value added taxes, $818,000 for social security liabilities, and $930,000   
payable to Knoll AG related to the acquisition of the Fuisz subsidiaries (see   
Note 2 "Business Combinations and Reorganizations").                            

At 31 December 1999 other accrued liabilities primarily related to              
restructuring costs incurred as a result of the merger with Roberts             
Pharmaceutical Corporation.                                                     

15. Long-term Debt                                                              

                                                        [Enlarge/Download Table]

                                      31 December        31 December        31 December 
                                             2000               1999               1998 
                                            $'000              $'000              $'000 
                                                                                        
Notes payable                             127,812            135,887            137,917 
Less: current installments                 (1,448)            (9,573)           (11,178)
                                 ----------------   ----------------   ---------------- 
                                          126,364            126,314            126,739 
                                 ----------------   ----------------   ---------------- 
Capital leases payable                         --                 35              1,208 
Less: current installments                     --                (35)            (1,173)
                                 ----------------   ----------------   ---------------- 
                                               --                 --                 35 
                                 ----------------   ----------------   ---------------- 
Total, less current liabilities           126,364            126,314            126,774 
                                 ================   ================   ================ 

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Principal payments in each of the next five years and thereafter on long-term   
debt outstanding at 31 December 2000 amount to:                                 

                                                                [Download Table]

                                                                     31 December
                                                                            2000
                                                                           $'000
                                                                                
2001                                                                       1,448
2002                                                                       1,364
2003                                                                          --
2004                                                                     125,000
2005                                                                          --
Thereafter                                                                    --
                                                                ----------------
                                                                         127,812
                                                                ================

$125 million five year term loan                                                

The Company entered into a $125 million five year term loan with Credit Suisse  
First Boston ("CSFB"), previously known as DLJ Capital Funding, Inc. on         
19 November 1999. This loan replaced an existing $125 million 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 CSFB 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 Company's        
credit rating.                                                                  

All obligations under the facility are jointly and severally guaranteed by the  
Company and by its subsidiaries and are 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 specified     
leverage ratio and a specified coverage ratio. At 31 December 2000 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 $5.8 million principal amount  
Unsecured Convertible Zero Coupon Loan note due 30 July 2001 (the "First Loan   
Note") and a $6.0 million 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         
(together "the Loan Notes") are not so cancelled, for their conversion into     
Ordinary Shares. The number of Ordinary Shares is calculated by dividing the    
amount not cancelled by the lower of (L)3.565 (approximately $5.75) and the     
midmarket closing price of the Ordinary Shares on the London Stock Exchange on  
the relevant date. Translation from pounds sterling to US dollars is using the  
exchange rate on the relevant date. 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 (or its nominee broker) in consideration of  
the conversion of part of each of the Loan Notes in the Company.                

16. Other Non-current Liabilities                                               

                                                        [Enlarge/Download Table]

                                                   31 December       31 December       31 December
                                                          2000              1999              1998
                                                         $'000             $'000             $'000
                                                                                                  
Payable for termination of license agreement               373             1,209             2,080
Other accrued liabilities                               13,823               136               149
                                              ----------------  ----------------  ----------------
                                                        14,196             1,345             2,229
                                              ================  ================  ================

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Other accrued liabilities at 31 December 2000 include $13,609,000 in relation   
to the SERP (see Note 22 "Retirement Benefits".                                 

17. Financial Instruments                                                       

The following methods and assumptions were used to estimate the fair value of   
each material class of financial instrument:                                    

o     Cash and cash equivalents - carrying amount approximates fair value due   
to the short-term nature of these instruments.                      

o     Marketable securities and other current asset investments - the fair      
value of marketable securities is estimated based on quotes obtained
from brokers.                                                       

o     Investments - non current investments with readily determinable market    
 values are marked to market. The fair value of investments in private
entities and non-traded securities are measured by valuation        
methodologies including discounted cash flows.                      

o     Accounts receivable - carrying amount approximates fair value due to the  
short-term nature of these instruments.                             

o     Accounts and notes payable - carrying amount approximates fair value due  
to the short-term nature of these instruments.                      

o     Long term debt - the fair value of long term debt is estimated based on   
the discounted future cash flows using currently available interest 
rates.                                                              

The carrying amounts and corresponding fair values of financial instruments at  
31 December 2000, 1999 and 1998 were as follows:                                

                                                                [Download Table]

31 December 2000                             Carrying Amount          Fair Value
                                                       $'000               $'000
                                                                                
Financial assets:                                                               
Cash and cash equivalents                             46,598              46,598
Marketable securities and other current                                         
  asset investments                                  139,745             139,745
Investments                                            6,139               6,139

Financial liabilities:                                                          
Accounts and notes payable                            99,437              99,437
Long-term debt                                       127,812             127,812
                                            ----------------    ----------------
31 December 1999                                                                
Financial assets:                                                               
Cash and cash equivalents                             54,082              54,082
Marketable securities and other current                                         
  asset investments                                   84,344              83,933
Investments                                            2,604               2,604

Financial liabilities:                                                          
Accounts and notes payable                           114,509             114,487
Long-term debt                                       135,922             135,922
                                            ----------------    ----------------
31 December 1998                                                                
Financial assets:                                                               
Cash and cash equivalents                             52,973              53,196
Marketable securities and other current                                         
  asset investments                                   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.                                             

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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-cancelable      
portion of all operating leases for the next five years and thereafter as of    
31 December 2000 are as follows:                                                

                                                                [Download Table]

                                                                     31 December
                                                                            2000
                                                                           $'000
                                                                                
2001                                                                       4,027
2002                                                                       3,437
2003                                                                       2,267
2004                                                                       1,154
2005                                                                         689
Thereafter                                                                 2,299
                                                                ----------------
                                                                          13,873
                                                                ================

Lease and rental expense included in selling, general and administrative        
expenses in the accompanying statements of operations amounts to approximately  
$4,250,000 $3,155,000 and $1,555,000 for the fiscal years ended 31 December     
2000, 1999 and 1998 respectively.                                               

(b) 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 labeling 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 of 23 February 2001, SRI was named as a defendant   
in approximately 3,749 lawsuits and had been dismissed from approximately       
2,597 of these cases. There were approximately 818 additional cases pending     
dismissal as of 23 February 2001. In only 171 cases has it been alleged in the  
complaint or subsequent discovery that the plaintiff had used SRI's particular  
product and SRI has been dismissed from 112 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 litigation.   

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.       

On 31 August 2000 Shire entered into an agreement (the "Termination             
Agreement") with the former shareholders of SRI, pursuant to which the          
ordinary shares placed in escrow at the time of the purchase of SRI by Shire    
were released and the escrow agreement and the escrow fund were terminated.     
The escrow agreement with the SRI shareholders was initially established by     
Shire in 1997 in anticipation of possible phentermine related claims against    
the Company. Under the terms of the termination Agreement, monies in the        
approximate amount of $7 million were received by Shire and the escrow fund     
was terminated. The remaining shares were distributed to the former SRI         
shareholders.                                                                   

At the present stage of 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.                                                                       

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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 net income/(loss) per share is based     
upon income available to common stockholders divided by the weighted-average    
number of common shares outstanding during the period and adjusted for the      
effect of all dilutive potential common shares that were outstanding during     
the period.                                                                     

The following table sets forth the computation for basic and diluted net        
income/(loss) per share:                                                        

                                                        [Enlarge/Download Table]

Years ended 31 December                                                  2000              1999               1998
                                                                        $'000             $'000              $'000
                                                                                                                  
Numerator for basic and diluted net income/(loss) per share            76,171           (94,998)            20,572
                                                             ----------------  ----------------   ----------------



                                                                No. of shares     No. of shares      No. of shares
                                                                                                                  
Weighted average number of shares                                 252,497,255       244,698,721        234,044,732
Basic                                                                                                             
Effect of dilutive stock options                                    7,847,677                --          8,761,678
                                                             ----------------  ----------------   ----------------
Diluted                                                           260,344,932       244,698,721        242,806,410
                                                             ----------------  ----------------   ----------------
Basic net income/(loss) per share                                       $0.30            $(0.39)             $0.09
Diluted net income/(loss) per share                                     $0.29            $(0.39)             $0.08

The calculation of weighted average number of shares for the year ended 31      
December 2000 does not include convertible debt because, after eliminating      
interest charged in the income statement from the numerator, the inclusion      
would be anti-dilutive. The calculation of weighted average number of shares    
for the year ended 31 December 1999 does not include potentially dilutive       
stock options and convertible debt because their inclusion would be anti-       
dilutive in a loss-making year.                                                 

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.                  

                                                        [Enlarge/Download Table]

                                                        US            Europe      Rest of World             Total
                                                     $'000             $'000              $'000             $'000
                                                                                                                 
Year ended 31 December 2000                                                                                      
Product sales                                      414,624            60,798             22,670           498,092
Licensing and development                            1,326            12,821                 --            14,147
Royalties                                              266             3,816                 25             4,107
Other revenues                                          20                --              1,242             1,262
                                          ----------------  ----------------   ----------------  ----------------
Total revenues                                     416,236            77,435             23,937           517,608
                                          ----------------  ----------------   ----------------  ----------------
Cost of revenues                                    53,393            23,601             11,164            88,158
Research and development                            69,252            36,799                 80           106,131
Selling, general and administrative                120,713            72,660              7,682           201,055
                                          ----------------  ----------------   ----------------  ----------------
Total operating expenses                           243,358           133,060             18,926           395,344
Operating income/(loss)                            172,878           (55,625)             5,011           122,264
Total assets                                       567,113           406,780             30,839         1,004,732
Long-lived assets                                   13,444            21,431             14,810            49,685
Capital expenditure on long-lived assets             7,931            20,070                358            28,359

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                                                        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 revenues                                     315,196             68,431             17,905           401,532 
                                          ----------------   ----------------   ----------------  ---------------- 
Cost of revenues                                    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                                       546,849            313,113             27,801           887,763 
Long-lived assets                                   19,003              2,656             15,825            37,484 
Capital expenditure on long-lived assets             2,621                768              1,397             4,786 

Year ended 31 December 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 revenues                                     227,916             65,157             15,911           308,984 
                                          ----------------   ----------------   ----------------  ---------------- 
Cost of revenues                                    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                                   25,653              2,764             14,265            42,682 
Capital expenditure on long-lived assets             4,902              1,201              8,665            14,768 

(d) Material customers                                                          

In the periods set out below, certain customers accounted for greater than 10%  
of total revenue:                                                               

                                                                [Download Table]

Years ended 31 December     2000     1999    1998
                                                 
Customer A               132,913  100,267  53,599
Customer B                80,293   54,498  31,387
Customer C                58,776   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 totaling $135.2 million pre-tax for asset impairments ($48.5   
million), merger-related transaction expenses ($32.3 million), restructuring    
costs ($43.6 million), loss on                                                  

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product dispositions ($5.8 million) and other charges ($5.0 million). These     
charges are disclosed separately within operating expenses in the consolidated  
statements 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 of the products. Other asset      
impairments consisted of 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 receivables to their estimated realizable     
value ($3.5 million).                                                           

The components of the restructuring charge were as follows:                     

                                                                [Download Table]

                                                                              $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, Washington.            
Similarly, Roberts' sales and marketing operation in the UK was combined with   
Shire's established operation in Andover, Hampshire. The property at Eatontown  
was written down to its estimated fair value.                                   

As a result of the restructuring and elimination of duplicate facilities, the   
Company identified a number of sales and marketing, research and development    
and administrative positions to be terminated. These employees were notified    
of their termination prior to 31 December 1999. The employee termination costs  
consisted of payments for severance, medical and other benefits, outplacement   
counseling, acceleration of pension benefits and excise taxes. The Company      
completed the restructuring program during the fourth quarter of 2000, and the  
restructuring reserve of $43.6 million was fully utilized by 31 December 2000.  
Merger costs savings for the year ended 31 December 2000 exceeded the initial   
target of $20 million.                                                          

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.             

22. Retirement Benefits                                                         

(a) Personal defined contribution pension plans                                 

The Company makes contributions to defined contribution retirement plans that   
together cover substantially all employees within the Group. For the defined    
contribution retirement plans, the level of company contribution is fixed at a  
set percentage of employee's pay.                                               

Company contributions to personal defined contribution pension plans totaled    
$2,580,000, $1,558,000 and $1,124,000 for the years ended 31 December 2000,     
1999 and 1998 respectively, and were charged to operations as they became       
payable.                                                                        

(b) Defined benefit pension plan                                                

Roberts Pharmaceutical Corporation, a company with whom Shire merged in         
December 1999, operated a defined Supplemental Executive Retirement Plan        
(SERP) for certain U.S. employees, which was established in 1998. This plan     
was available to employees of Roberts who met certain age and service           
requirements.                                                                   

As part of the restructuring of the Group following the merger, 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 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.                               

In accordance with EITF 97-14, the asset and liability of $16.1 million and     
$13.6 million respectively are shown on the balance sheet within the            
categories investments and other non current liabilities. See Notes 11 and 16   
above.                                                                          

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23. Income Taxes                                                                

The (provision)/benefit for income taxes consists of:                           

                                                        [Enlarge/Download Table]

Years ended 31 December                                                             2000               1999               1998 
                                                                                   $'000              $'000              $'000 
                                                                                                                               
Current                                                                                                                        
Federal                                                                          (26,534)           (14,007)            (7,375)
State and foreign                                                                 (9,641)            (1,556)               118 
                                                                        ----------------   ----------------   ---------------- 
Total current                                                                    (36,175)           (15,563)            (7,257)
                                                                        ----------------   ----------------   ---------------- 
Deferred                                                                                                                       
Federal                                                                           (4,268)              (622)             3,808 
State and foreign                                                                    426                123                458 
                                                                        ----------------   ----------------   ---------------- 
Total deferred                                                                    (3,842)              (499)             4,266 
                                                                        ----------------   ----------------   ---------------- 
                                                                                 (40,017)           (16,062)            (2,991)
                                                                        ================   ================   ================ 
Approximate net operating loss                                                                                                 
  carry-forwards against future federal tax liabilities                           60,451             40,418             43,089 
                                                                        ----------------   ----------------   ---------------- 
Approximate net operating loss carry-forwards against future state and                                                         
  foreign tax liabilities                                                        146,933            185,458            150,572 
                                                                        ----------------   ----------------   ---------------- 

The tax losses shown above have the following expiration dates:                 

                                                                [Download Table]

                                                                     31 December
                                                                            2000
                                                                           $'000
                                                                                
2002                                                                       1,885
2003                                                                       1,327
2004                                                                       3,100
2005                                                                      80,373
Available indefinitely                                                   120,699
                                                                 ---------------
                                                                         207,384
                                                                 ===============

The losses stated above include approximately $78 million of state tax losses   
for which relief is available at state tax rates of approximately 3%.           

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:                                                     

                                                        [Enlarge/Download Table]

Years ended 31 December                                    2000              1999              1998 
                                                          $'000             $'000             $'000 
                                                                                                    
(Provision)/benefit at federal statutory rates          (40,666)           27,628            (8,247)
Adjusted for:                                                                                       
Permanent differences                                       669            (6,474)               18 
Difference in taxation rates                              9,100            (1,200)            1,300 
Adjustment to prior year liabilities                     (1,950)            4,004                -- 
Goodwill amortization                                    (3,783)           (9,758)           (4,232)
Other                                                    (2,335)             (337)             (464)
Valuation allowance                                      (1,052)          (29,925)            8,634 
                                                ---------------   ---------------   --------------- 
Provision for income taxes                              (40,017)          (16,062)           (2,991)
                                                ===============   ===============   =============== 

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An analysis of the deferred tax asset is as follows:                            

                                                        [Enlarge/Download Table]

Years ended 31 December                                   2000              1999              1998 
                                                         $'000             $'000             $'000 
                                                                                                   
Losses carried forward                                  47,596            39,411            36,078 
Amounts deductible when paid                            34,307            28,835                -- 
Valuation reserves and provisions                        7,100             3,259                -- 
Other                                                    1,446             1,568             7,497 
Debt conversion                                             --                --               377 
                                               ---------------   ---------------   --------------- 
                                                        90,449            73,073            43,952 
Valuation allowance                                    (37,014)          (35,962)           (6,037)
                                               ---------------   ---------------   --------------- 
Deferred tax assets                                     53,435            37,111            37,915 
Excess of tax value over book value of assets          (20,166)               --              (305)
                                               ---------------   ---------------   --------------- 
Net deferred tax assets                                 33,269            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 utilized.                   

The income (loss) before taxes by tax jurisdiction is as follows:               

                                                                [Download Table]

Years ended 31 December             2000              1999              1998 
                                   $'000             $'000             $'000 
                                                                             
US                                77,974           (33,924)           30,972 
UK                               (37,577)          (33,996)            5,763 
Other                             75,791           (11,016)          (13,172)
                         ---------------   ---------------   --------------- 
                                 116,188           (78,936)           23,563 
                         ===============   ===============   =============== 

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 ("APB 25") and related interpretations in accounting for   
its plans. In the years ended 31 December 2000, 1999 and 1998 the company       
recognized a charge under APB 25 of $21,914,000 $11,933,000 and $5,497,000      
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:                                                                          

                                                                [Download Table]

Years ended 31 December    2000      1999     1998
                          $'000     $'000    $'000
                                                  
Net income/(loss)                                 
As reported              76,171   (94,998)  20,572
Pro forma                88,854  (106,246)  17,439
Income/(loss) per share                           
As reported - basic       $0.30    $(0.39)   $0.09
As reported - diluted     $0.29    $(0.39)   $0.08
Pro forma - basic         $0.35    $(0.43)   $0.07
Pro forma - diluted       $0.34    $(0.43)   $0.07

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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:                                                                    

                                                                [Download Table]

Years ended 31 December         2000         1999         1998
                                                              
Risk free interest rate  5.68%-6.58%  4.67%-6.25%  4.55%-6.57%
Expected dividend yield           0%           0%           0%
Expected life                4 years      4 years      4 years
Expected volatility            64.2%        53.4%        53.2%

Directors and employees have been granted options over ordinary shares under    
the following stock option plans: the Shire Pharmaceuticals Group plc 2000      
Executive Share Option Scheme ("2000 Executive Scheme"), the Shire Holdings     
Ltd Share Options Scheme ("SHL Scheme"), the Imperial Pharmaceutical Services   
Ltd 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").                                                                         

On 28 February 2000, the Remuneration Committee of the Board exercised its      
powers to amend the terms of the Executive Share Option Scheme so as to         
include a Cliff Vesting provision.                                              

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 5% of the issued ordinary share capital of the          
Company, in any period of ten years, subject to a limit of 2.5% 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 2000 under the various      
plans as follows:                                                               

                                                        [Enlarge/Download Table]

                           Number of                                                                      
Scheme                       options   Expiry period from date of issue                     Vesting period
                                                                                                          
SHL Scheme                   572,160  7 years, or 3 months after end of                        1 - 3 years
                                                             employment                                   
SPC Scheme                    48,000  7 years, or 6 months after end of                            2 years
                                                             employment                                   
Executive Scheme           6,080,083                           10 years    3 years, subject to performance
                                                                                                  criteria
2000 Executive Scheme        484,248                           10 years    3 years, subject to performance
                                                                                                  criteria
Sharesave Scheme             210,999             6 months after vesting                       3 or 5 years
Stock Purchase Plan           50,294                 Automatic exercise                          27 months
Richwood Plan                747,067                            5 years  Immediate on acquisition by Shire
Roberts Plan               1,047,809                            6 years     Immediate on merger with Shire
                       -------------                                                                      
                           9,240,660                                                                      
                       =============                                                                      

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A summary of the status of the Company's stock option plans as of 31 December   
2000, 1999 and 1998 and the related transactions during the periods then ended  
is presented below:                                                             

                                                                [Download Table]

                                     Weighted average                    
Year ended 31 December 2000            Exercise price   Number of shares 
                                                                         
Outstanding at beginning of period               4.39         17,637,142 
Granted                                         16.17          2,556,001 
Exercised                                        4.19        (10,726,407)
Forfeited/expired                               12.72           (226,076)
                                    -----------------  ----------------- 
Outstanding at end of period                     7.42          9,240,660 
                                    -----------------  ----------------- 
Exercisable at end of period                     2.94          3,632,373 
                                    =================  ================= 

All options granted under the Executive and 2000 Executive schemes were issued  
with exercise prices equivalent to the fair market value of the Company's       
common stock on the date of grant as these options were granted at market       
prices. 79,424 options were granted under the Sharesave Scheme at a price of    
(L)8.56 (approximately $12.79). These options were granted with an exercise     
price equal to 80% of the mid-market price on the day before invitations were   
issued to employees.                                                            

The weighted average fair value of options granted in the year ended 31         
December 2000 is $16.26. For the years ended 31 December 1999 and 1998, the     
weighted average fair value equates to the weighted average exercise prices of  
$6.86 and $5.51 respectively as all options were granted at market prices.      

                                                                [Download Table]

                                    Weighted Average                   
Year ended 31 December 1999         Exercise price $  Number of Shares 
                                                                       
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 



                                    Weighted Average                   
Year ended 31 December 1998         Exercise price $  Number of Shares 
                                                                       
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 

Options outstanding at 31 December 2000 have the following characteristics:     

                                                        [Enlarge/Download Table]

                                                         Weighted average                      Weighted average
                                                        exercise price of                     exercise price of
Number of options                     Weighted average            options  Number of options            options
outstanding         Exercise prices     remaining life        outstanding        exercisable        exercisable
                                                                                                               

436,852               $0.45 - $0.46                0.3              $0.45            436,852              $0.45
980,669               $1.23 - $1.73                1.8              $1.49            980,669              $1.49
658,881               $2.30 - $2.84                2.0              $2.61            551,287              $2.61
939,611               $3.22 - $4.24                3.2              $3.64            923,148              $3.64
2,509,049             $5.06 - $6.75                4.4              $5.32            657,523              $5.56
1,218,394             $6.76 - $7.07                5.2              $7.05             82,894              $6.78
100,000              $7.97 - $10.72                6.4              $9.48                 --                 --
2,397,204           $12.79 - $19.72                6.6             $16.21                 --                 --
 -----------------                   -----------------  -----------------  -----------------  -----------------
9,240,660                                          4.4              $7.42          3,632,373              $2.94

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PART VI 

Financial information on Shire - under UK GAAP

The financial information in this section does not constitute statutory         
accounts under the meaning of section 240 of the Companies Act 1985.            

The summary financial statements for the years ended 31 December 1999 and 2000  
have been extracted from the Annual report and statutory accounts 2000 as       
approved by the Board on 27 February 2001. The summary financial statement for  
the year ended 31 December 1998 is extracted from the annual review and         
summary financial statement 1999, as approved by the Board on 7 April 2000.     
Summary financial statements were not prepared for any period prior to the      
year ended 31 December 1999. The 1998 summary financial statements were         
derived from the audited statutory accounts for the year ended 31 December      
1998. The financial information has been prepared in accordance with UK GAAP    
in UK pounds.                                                                   

Consolidated Profit and Loss Account

                                                        [Enlarge/Download Table]

                                                                           Years ended 31 December              
                                                                        2000              1999             1998 
                                                                     (L)'000           (L)'000          (L)'000 
                                                                                                                
Turnover                                                             343,624           133,878           80,328 
Operating expenses before exceptional items                         (263,967)         (103,506)         (72,449)
Operating profit                                                      79,657            30,372            7,879 
Costs of a fundamental restructuring of continuing operations             --           (11,516)              -- 
                                                               -------------     -------------    ------------- 
Profit on ordinary activities before finance charges                  79,657            18,856            7,879 
Finance charges, net                                                  (2,885)            2,153            1,220 
                                                               -------------     -------------    ------------- 
Profit on ordinary activities before taxation                         76,772            21,009            9,099 
Taxation                                                              (3,570)           (8,439)          (2,852)
                                                               -------------     -------------    ------------- 
Profit on ordinary activities after taxation                          73,202            12,570            6,247 
                                                               =============     =============    ============= 
Earnings per share                                                                                              
Basic                                                                  29.0p              8.7p             4.5p 
Diluted                                                                28.1p              8.3p             4.3p 

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Consolidated Balance Sheet

                                                        [Enlarge/Download Table]

                                                                  Years ended 31 December              
                                                               2000              1999             1998 
                                                            (L)'000           (L)'000          (L)'000 
                                                                                                       
Fixed assets                                                                                           
Intangible assets                                           694,261           684,387            7,938 
Tangible assets                                              33,261            23,256            4,671 
Fixed asset investments                                       4,142             1,617               -- 
                                                      -------------     -------------    ------------- 
                                                            731,664           709,260           12,609 
                                                      -------------     -------------    ------------- 
Current assets                                                                                         
Stocks                                                       31,536            24,532            6,652 
Debtors                                                      84,464            46,880           17,560 
Investments                                                  93,550            49,850           21,435 
Cash at bank and in hand                                     31,194            36,038            8,230 
                                                      -------------     -------------    ------------- 
                                                            240,744           157,300           53,877 
Creditors: Amounts falling due within one year              (74,579)         (107,140)         (14,384)
                                                      -------------     -------------    ------------- 
Net current assets                                          166,165            50,160           39,493 
                                                      -------------     -------------    ------------- 
Total assets less current liabilities                       897,829           759,420           52,102 
Creditors: amounts falling due in more than one year        (94,186)          (80,133)          (1,508)
                                                      -------------     -------------    ------------- 
Net assets                                                  803,643           679,287           50,594 
                                                      =============     =============    ============= 
Capital and reserves                                                                                   
Called-up share capital                                      12,854            12,226            7,055 
Share premium                                               873,567           839,026          228,537 
Capital reserve                                               2,755             2,755            2,755 
Other reserves                                               24,247            24,247           24,247 
Profit and loss account                                    (109,780)         (198,967)        (212,000)
                                                      -------------     -------------    ------------- 
Equity shareholders' funds                                  803,643           679,287           50,594 
                                                      =============     =============    ============= 

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Consolidated Cash Flow Statement

                                                        [Enlarge/Download Table]

                                                                                            Year ended 31 December              
                                                                                        2000              1999             1998 
                                                                                     (L)'000           (L)'000          (L)'000 
                                                                                                                                
Net cash inflow from operating activities                                             52,925            39,863            3,691 
Returns on investments and servicing of finance:                                                                                
 Interest received                                                                     4,125             2,334            1,434 
 Interest paid                                                                        (7,009)             (149)            (142)
 Interest element of finance lease rentals                                                (1)              (32)             (72)
                                                                               -------------     -------------    ------------- 
Net cash inflow from returns on investments and servicing of finance                  (2,885)            2,153            1,220 
                                                                               -------------     -------------    ------------- 
Taxation:                                                                                                                       
 Corporation tax paid                                                                 (4,397)           (3,707)          (3,177)
                                                                               -------------     -------------    ------------- 
Capital expenditure and financial investments:                                                                                  
 Purchase of long term investment                                                     (2,398)               --               -- 
 Purchase of intangible fixed assets                                                 (25,776)          (11,500)            (629)
 Purchase of tangible fixed assets                                                   (19,251)           (1,303)          (1,633)
 Sale of intangible fixed assets                                                       1,027               106              258 
 Sale of tangible fixed assets                                                         7,903             1,521               37 
                                                                               -------------     -------------    ------------- 
Net cash outflow for capital expenditure and financial investments                   (38,495)          (11,176)          (1,967)
                                                                               -------------     -------------    ------------- 
Acquisitions and disposals:                                                                                                     
 Purchase of subsidiary undertakings                                                      --           (17,355)              -- 
 Expenses of acquisitions                                                               (964)           (7,448)            (295)
 Net cash acquired with subsidiary undertakings                                           --            24,149               -- 
                                                                               -------------     -------------    ------------- 
Net cash outflow from acquisitions                                                      (964)             (654)            (295)
                                                                               -------------     -------------    ------------- 
Net cash inflow/(outflow) before management of liquid resources and financing          6,184            26,479             (528)
                                                                               -------------     -------------    ------------- 
Management of liquid resources:                                                                                                 
Increase in cash placed on short-term deposit                                        (39,171)           (1,033)         (21,435)
                                                                               -------------     -------------    ------------- 
Financing:                                                                                                                      
 Issue of ordinary share capital                                                       7,904                --           19,373 
 Exercise of share options                                                            29,085             2,180            2,452 
 Expenses of share issues                                                             (2,089)           (6,799)          (1,274)
 Capital element of finance leases                                                       (22)             (705)            (553)
 Net increase in loans during the year                                                (9,329)            7,439               -- 
                                                                               -------------     -------------    ------------- 
Net cash inflow from financing                                                        25,549             2,115           19,998 
                                                                               -------------     -------------    ------------- 
(Decrease) increase in cash in the year                                               (7,438)           27,561           (1,965)
                                                                               -------------     -------------    ------------- 

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Notes to the summary financial statement                                        

1.  Basis of preparation                                                        

The summary financial statement has been prepared in accordance with the        
accounting policies set out in the full UK statutory annual accounts for the    
year ended 31 December 2000. The summary financial statement does not           
constitute statutory accounts within the meaning of Section 240 of the          
Companies Act 1985.                                                             

2.  Earnings per share                                                          

Earnings per share (EPS) has been calculated by dividing the profit on          
ordinary activities after taxation for each year by the weighted average        
number of shares in issue during those years, 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.                                                

                                                        [Enlarge/Download Table]

Years ended 31 December                                         2000             1999             1998 
                                                                                                       
Basic earnings per share                                        29.0p             8.7p             4.5p
Diluted earnings per share                                      28.1p             8.3p             4.3p
Basic earnings per share - weighted average shares       252,497,255      145,202,383      136,924,061 
Effect of dilutive stock options                           8,411,015        6,326,876        7,475,065 
                                                      --------------   --------------   -------------- 
Diluted earnings per share - weighted average shares     260,908,270      151,529,259      144,399,126 
                                                      ==============   ==============   ============== 

Summary of significant differences between US generally accepted accounting     
principles followed by the Group and UK generally accepted accounting           
principles followed by the Group                                                

The Group's consolidated financial statements set out in the annual review      
have been prepared under US GAAP, which differs in certain respects from UK     
GAAP. The principal differences between the Group's accounting policies under   
US GAAP and UK GAAP are set out in the tables below:                            

Reconciliation of net profit/(loss) from US GAAP to UK GAAP                     

                                                        [Enlarge/Download Table]

Years ended 31 December                                  2000        1999        1998        2000        1999        1998 
                                                        $'000       $'000       $'000     (L)'000     (L)'000     (L)'000 
                                                                                                                          
Net profit/(loss) as reported under US GAAP            76,171     (94,998)     20,572      51,837     (59,046)     12,205 
Adjustments to conform to UK GAAP:                                                                                        
Merger accounting adjustments                                                                                             
- elimination of pooled profits and losses                 --     (16,437)    (16,643)         --     (10,196)    (10,026)
- restructuring costs charged to income                  (240)     87,877          --        (157)     54,513          -- 
- merger transaction costs capitalised                     --      22,967          --          --      14,247          -- 
Amortisation of capitalised goodwill                   10,277      11,004      11,137       6,792       6,802       6,709 
Amortisation under acquisition accounting             (34,538)       (919)         --     (22,824)       (570)         -- 
Recognition of deferred tax asset                       3,842      (2,878)    (12,890)      2,626      (1,771)     (7,765)
Stock option compensation costs                        21,914      11,933       5,497      13,633       7,362       3,313 
Tax benefit from exercise of non-qualified stock                                                                          
  options                                              30,782       1,967       3,006      20,488       1,229       1,811 
Amortisation of loan note                                 470          --          --         298          --          -- 
NIC on share options - charge under UK GAAP              (111)         --          --         (75)         --          -- 
Elimination of foreign exchange on US$ liabilities         --          --          --         584          --          -- 
                                                    ---------   ---------   ---------   ---------   ---------   --------- 
Net income as reported under UK GAAP                  108,567      20,516      10,679      73,202      12,570       6,247 
                                                    =========   =========   =========   =========   =========   ========= 

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Shareholders' equity                                                            

                                                        [Enlarge/Download Table]

Years ended 31 December                      2000           1999           1998           2000           1999           1998 
                                            $'000          $'000          $'000        (L)'000        (L)'000        (L)'000 
                                                                                                                             
As reported under US GAAP                 752,759        587,284        663,314        503,922        364,387        398,674 
Adjustments for:                                                                                                             
- capitalisation of goodwill             (200,914)      (216,769)      (223,776)      (134,499)      (134,497)      (134,497)
Goodwill amortisation                      34,393         26,161         15,690         23,024         16,232          9,430 
Acquisition accounting for Roberts                                                                                           
  Pharmaceutical Corporation              646,942        735,242       (341,810)       433,085        456,191       (205,439)
Deferred tax                              (33,269)       (37,111)       (29,240)       (22,271)       (23,026)       (17,574)
Loan note                                     465             --             --            311             --             -- 
Difference in valuation of fixed                                                                                             
  asset investments                            48             --             --             32             --             -- 
Restructuring accrual disallowed                                                                                             
  under UK GAAP                               170             --             --            114             --             -- 
NIC on share options - charge under                                                                                          
  UK GAAP                                    (111)            --             --            (75)            --             -- 
                                     ------------   ------------   ------------   ------------   ------------   ------------ 
As reported under UK GAAP               1,200,483      1,094,807         84,178        803,643        679,287         50,594 
                                     ============   ============   ============   ============   ============   ============ 

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PART VII

Unaudited pro forma statements

As noted in Part V, Shire prepares its primary financial statements in US       
dollars in accordance with US GAAP. Financial statements in UK pounds in        
accordance with UK GAAP are prepared for statutory purposes. The unaudited pro  
forma financial information has been prepared for illustrative purposes only    
in accordance with both US and UK GAAP.                                         

Under US GAAP, the Merger is expected to be accounted for as a `pooling of      
interests'. Under this method, Shire and BioChem will be treated as if they     
had always been combined. The purchase price in excess of the carrying value    
of the net assets of BioChem will not be recognised and the costs associated    
with the Merger will be treated as a one time charge to income. Under UK GAAP,  
the Merger is expected to be accounted for as an acquisition. Goodwill arising  
on the acquisition will be capitalised and written off on a straight line       
basis over its useful economic life. Under UK GAAP, the costs associated with   
the Merger will be included in the fair value of the consideration.             

(a) Unaudited pro forma statement of combined condensed balance sheet under US  
GAAP at 31 December 2000                                                

The unaudited pro forma statement of combined condensed balance sheet of the    
Enlarged Group set out below has been prepared for illustrative purposes only   
in US dollars in accordance with US GAAP as applied by Shire. The pro forma     
statement has been prepared to illustrate the effect on the combined condensed  
balance sheet of Shire as if the Merger had occurred at 31 December 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]

                                                                                                              US GAAP
                                                                                                            Unaudited
                               US GAAP                                 US GAAP      US GAAP                 Pro forma
                               Audited     CAN GAAP                   Adjusted     Adjusted                 Condensed
                                 Shire      BioChem                    BioChem      BioChem                   balance
                           31 December  31 December                31 December  31 December       Merger   sheet post
                                  2000         2000  Adjustments          2000         2000  adjustments       merger
                                 $'000     CAN$'000     CAN$'000      CAN$'000        $'000        $'000        $'000
                              (Note 1)     (Note 2)     (Note 3)                   (Note 4)     (Note 5)             
                                                                                                                     
ASSETS                                                                                                               
Current assets:                                                                                                      
Cash and current                                                                                                     
 investments                   186,343      416,084           --       416,084      277,352           --      463,695
Accounts receivable, net        93,830       75,604           --        75,604       50,396           --      144,226
Inventories, net                47,109        3,754           --         3,754        2,502           --       49,611
Deferred tax asset              26,971           --           --            --           --           --       26,971
Prepaid expenses                 9,736        2,473           --         2,473        1,648           --       11,384
                           -----------  -----------  -----------   -----------  -----------  -----------  -----------
Total current assets           363,989      497,915           --       497,915      331,898           --      695,887
                           -----------  -----------  -----------   -----------  -----------  -----------  -----------
Investments                      6,139      103,681           --       103,681       69,110           --       75,249
Property, plant and                                                                                                  
 equipment, net                 49,685      127,867       (6,107)      121,760       81,163           --      130,848
Intangible assets, net         556,013       84,822      (46,065)       38,757       25,835           --      581,848
Net assets of business                                                                                               
 transferred under                                                                                                   
 contractual arrangements           --       53,776           --        53,776       35,846           --       35,846
Deferred tax asset               6,298           --           --            --           --           --        6,298
Other assets                    22,608           --           --            --           --           --       22,608
                           -----------  -----------  -----------   -----------  -----------  -----------  -----------
Total assets                 1,004,732      868,061      (52,172)      815,889      543,852           --    1,548,584
                           -----------  -----------  -----------   -----------  -----------  -----------  -----------

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                                                        [Enlarge/Download Table]

                                                                                                                 US GAAP
                                                                                                               Unaudited
                                                                                                               Pro forma
                               US GAAP     CAN GAAP                     US GAAP       US GAAP                   Combined
                               Audited    Unaudited                    Adjusted      Adjusted                  condensed
                                 Shire      BioChem                     BioChem       BioChem                    balance
                           31 December  31 December                 31 December   31 December       Merger    sheet post
                                  2000         2000   Adjustments          2000          2000  adjustments        merger
                                 $'000     CAN$'000      CAN$'000      CAN$'000         $'000        $'000         $'000
                              (Note 1)     (Note 2)      (Note 3)                    (Note 4)     (Note 5)              
                                                                                                                        
LIABILITIES AND                                                                                                         
 SHAREHOLDERS' EQUITY                                                                                                   
Current liabilities:                                                                                                    
Current instalments of                                                                                                  
 long term debt                  1,448      120,560            --       120,560        80,363           --        81,811
Accounts and notes                                                                                                      
 payable                        99,437       54,111            --        54,111        36,069      100,000       235,506
Other current liabilities       10,528           --            --            --            --           --        10,528
                           -----------  -----------   -----------   -----------   -----------  -----------   -----------
Total current liabilities      111,413      174,671            --       174,671       116,432      100,000       327,845
                           -----------  -----------   -----------   -----------   -----------  -----------   -----------
Long term debt, excluding                                                                                               
 current instalments           126,364        8,550            --         8,550         5,699           --       132,063
Other non-current                                                                                                       
 liabilities                    14,196           --            --            --            --           --        14,196
                           -----------  -----------   -----------   -----------   -----------  -----------   -----------
Total liabilities              251,973      183,221            --       183,221       122,131      100,000       474,104
Total assets less total                                                                                                 
 liabilities                   752,759      684,840*      (52,172)      632,668*      421,721     (100,000)    1,074,480
Shareholders' equity           752,759      684,840       (52,172)      632,668       421,721     (100,000)    1,074,480
                           -----------  -----------   -----------   -----------   -----------  -----------   -----------
Total liabilities and                                                                                                   
 shareholders' equity        1,004,732      868,061       (52,172)      816,889       543,852           --     1,548,584
                           -----------  -----------   -----------   -----------   -----------  -----------   -----------

*   As extracted from the reconciliation of BioChem's financial results to US   
GAAP as included in PART IV (a)(i) of this document.                    

Notes:                                                                          

(1) Extracted from the audited consolidated financial statements of Shire as    
included in Part V of this document.                                    

(2) Derived from the audited consolidated financial statements of BioChem as    
 included in Part III of this document, reclassified in accordance with US
reporting formats, as noted:                                            

                                                                [Download Table]

                                                                      CAN$'000
                                                                              
Cash and current investments:                                                 
Cash and cash equivalents                                               70,018
Temporary investments                                                  346,066
                                                                   -----------
                                                                       416,084
                                                                   -----------

(3) The following adjustments are required to conform BioChem's reclassified    
financial statements to US GAAP as applied by Shire.                    

                                                                [Download Table]

                                                                      CAN$'000 
                                                                               
Property, plant and equipment, net:                                            
Deferred charges                                                        (6,107)
Intangible assets, net:                                                        
Deferred charges                                                        (5,197)
Consolidation of CliniChem                                                (841)
Write off of in-process research and development                       (40,027)
                                                                   ----------- 
                                                                       (52,172)
                                                                   ----------- 

  These adjustments are extracted and as described in notes (a), (c) and (f)
 to the unaudited reconciliation of financial information under US GAAP as
set out in Part IV (a)(i) of this document and have been reported on by 
Arthur Andersen on page 57 of this document.                            

(4) Translated at CAN$1.5002- US $1, being the exchange rate ruling at 31       
December 2000.                                                          

(5) Merger expenses consisting primarily of SDRT, professional fees and costs   
of distributing proxy materials are estimated to be US$100 million and  
will be charged as an operating expense upon consummation of the merger.

(6) No account has been taken of the trading results or other transactions of   
Shire or BioChem after 31 December 2000.                                

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[graphic]                             
                                                 Arthur Andersen
                                              Abbots House
The Directors and Proposed Directors                     Abbey Street           
Shire Pharmaceuticals Group plc                          Reading                
East Anton                                               RG1 3BD                
Andover                                                                         
Hampshire                                                                       
SP10 5RG                                                                        

The Directors                                                                   
Deutsche Bank AG London                                                         
Global Investment Banking                                                       
Winchester House                                                                
1 Great Winchester Street                                                       
London                                                                          
EC2N 2DB                                                           1 March 2001 

Dear Sirs                                                                       

We report on the pro forma combined condensed balance sheet set out on pages    
99 to 100 of the circular and listing particulars dated 1 March 2001 issued by  
Shire, which has been prepared, for illustrative purposes only, to provide      
information about how the proposed acquisition might have affected the          
financial information presented by Shire US GAAP.                               

Responsibilities                                                                

It is the responsibility solely of the Directors of Shire to prepare the pro    
forma combined condensed balance sheet in accordance with paragraph 12.29 of    
the Listing Rules of the UK Listing Authority ("the Listing Rules").            

It is our responsibility to form an opinion, as required by the Listing Rules,  
on the pro forma combined condensed balance sheet 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        
combined condensed balance sheet 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 in the United Kingdom by the  
Auditing Practices Board. Our work, which involved no independent examination   
of any of the underlying financial information, consisted primarily of          
comparing the unadjusted financial information with the source documents,       
considering the evidence supporting the adjustments and discussing the pro      
forma combined condensed balance sheet with the Directors of Shire.             

Our work has not been carried out in accordance with auditing standards         
generally accepted in the United States 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 combined condensed balance sheet has been properly          
compiled on the basis stated;                                       

2.    such basis is consistent with accounting policies as applied by Shire     
under US GAAP; and                                                  

3.    the adjustments are appropriate for the purposes of the pro forma         
combined condensed balance sheet as disclosed pursuant to paragraph 
12.29 of the Listing Rules.                                         

Yours faithfully                                                                

Arthur Andersen                                                                 
Chartered Accountants                                                           

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(b) Unaudited pro forma statement of net assets in accordance with UK GAAP as   
at 31 December 2000                                                     

The unaudited pro forma statement of net assets of the Enlarged Group set out   
below has been prepared for illustrative purposes only in UK pounds in          
accordance with UK GAAP as applied by Shire. The pro forma statement has been   
prepared to illustrate the effect on the balance sheet of Shire as if the       
Merger had occurred at 31 December 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]

                           UK GAAP                                      UK GAAP        UK GAAP                       UK GAAP 
                           Audited       CAN GAAP                      Adjusted       Adjusted                     Unaudited 
                             Shire        BioChem                       BioChem        BioChem                     Pro forma 
                       31 December    31 December                   31 December    31 December    Acquisition     Net assets 
                              2000           2000    Adjustments           2000           2000     adjustment    post Merger 
                           (L)'000       CAN$'000       CAN$'000       CAN$'000        (L)'000        (L)'000        (L)'000 
                          (Note 1)       (Note 2)       (Note 3)                      (Note 4)       (Note 5)                
                                                                                                                             
Fixed assets                                                                                                                 
Intangible assets          694,261         84,822         (6,038)        78,784         35,121      1,788,796      2,518,178 
Tangible assets             33,261        127,867         (6,107)       121,760         54,280             --         87,541 
Fixed asset                                                                                                                  
 investments                 4,142        103,681             --        103,681         46,220             --         50,362 
                      ------------   ------------   ------------   ------------   ------------   ------------   ------------ 
                           731,664        316,370        (12,145)       304,225        135,621      1,788,796      2,656,081 
                      ------------   ------------   ------------   ------------   ------------   ------------   ------------ 
Current assets                                                                                                               
Stocks                      31,536          3,754             --          3,754          1,674             --         33,210 
Debtors                                                                                                                      
- due within one                                                                                                             
 year                       69,106         78,077             --         78,077         34,806             --        103,912 
- due after one year        15,358         53,776             --         53,776         23,973             --         39,331 
Cash and short term                                                                                                          
 investments               124,744        416,084             --        416,084        185,487             --        310,231 
                      ------------   ------------   ------------   ------------   ------------   ------------   ------------ 
                           240,744        551,691             --        551,691        245,940             --        486,684 
Creditors: amounts                                                                                                           
 falling due in                                                                                                              
 less than one year        (74,579)      (174,671)       (17,000)      (191,671)       (85,446)       (66,943)      (226,968)
                      ------------   ------------   ------------   ------------   ------------   ------------   ------------ 
Net current assets         166,165        377,020        (17,000)       360,020        160,494        (66,943)       259,716 
                      ------------   ------------   ------------   ------------   ------------   ------------   ------------ 
Total assets less                                                                                                            
 current                                                                                                                     
 liabilities               897,829        693,390        (29,145)       664,245        296,115      1,721,853      2,915,797 
Creditors: amounts                                                                                                           
 falling due in                                                                                                              
 more than one year        (94,186)        (8,550)            --         (8,550)        (3,812)            --        (97,998)
                      ------------   ------------   ------------   ------------   ------------   ------------   ------------ 
Net assets                 803,643        684,840*       (29,145)       655,695*       292,303      1,721,853      2,817,799 
                      ============   ============   ============   ============   ============   ============   ============ 

*   As extracted from the reconciliation of BioChem's financial results to UK   
GAAP as included in Part IV (b) of this document.                       

Notes:                                                                          

(1) Extracted from the audited summary financial statements of Shire as         
included in Part VI of this document.                                   

(2) Derived from the audited consolidated financial statements of BioChem as    
 included in Part III of this document, reclassified in accordance with UK
reporting formats, as noted:                                            

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                                                                [Download Table]

                                                                      CAN$'000
                                                                              
Debtors comprise:                                                             
Accounts receivable                                                     75,604
Prepaid expenses                                                         2,473
                                                                  ------------
                                                                        78,077
                                                                  ------------
Cash and short term investments comprise:                                     
Cash and cash equivalents                                               70,018
Temporary investments                                                  346,066
                                                                  ------------
                                                                       416,084
                                                                  ------------
Creditors: amounts due in less than one year comprise:                        
Current portion of long term debt                                      120,560
Accounts payable and accrued liabilities                                54,111
                                                                  ------------
                                                                       174,671
                                                                  ============

(3) The following adjustments are required to conform BioChem's reclassified    
financial statements to UK GAAP as applied by Shire.                    

                                                                [Download Table]

                                                                      CAN$'000 
                                                                               
Tangible assets:                                                               
Deferred charges                                                        (6,107)
Intangible assets:                                                             
Deferred charges                                                        (5,197)
Consolidation of CliniChem                                                (841)
Retained losses from discontinued operations                           (17,000)
                                                                  ------------ 
                                                                       (29,145)
                                                                  ============ 

These adjustments are extracted and as described in notes (a) to (d) of 
  the unaudited reconciliation of financial information under UK GAAP as set
out in Part IV (b) of this document and have been reported on by Arthur 
Andersen on page 66 of this document.                                   

(4) Translated at CAN$2.2432 - (L)1, being the exchange rate ruling at 31       
December 2000.                                                          

(5) Goodwill arising on the acquisition has been calculated as follows:         

                                                                [Download Table]

                                                                       (L)'000 
                                                                               
Purchase consideration:                                                        
Shire Ordinary Share or Exchangeable Shares (i)                      2,014,156 
Acquisition expenses (ii)                                               66,943 
                                                                  ------------ 
                                                                     2,081,099 
Net assets of BioChem                                                 (292,303)
                                                                  ------------ 
Goodwill arising on acquisition                                      1,788,796 
                                                                  ------------ 

(i) The purchase consideration has been calculated by applying the mid- 
point exchange ratio of 1.8814 to the number of BioChem shares  
     outstanding at 31 December 2000, being 101,475,086 and multiplying by
the Shire ordinary share price of $10.55 at 31 December 2000.   

(ii)Acquisition fees of US$100,000 million translated to (L)66,943      
million.                                                        

(6) No account has been taken of the trading results or other transactions of   
Shire or BioChem after 31 December 2000.                                

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[graphic]                             

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                                                         
Global Investment Banking                                                       
Winchester House                                                                
1 Great Winchester Street                                                       
London                                                                          
EC2N 2DB                                                           1 March 2001 

Dear Sirs                                                                       

We report on the pro forma statement of net assets set out on pages 102 to 103  
of the circular and listing particulars dated 1 March 2001 issued by Shire,     
which has been prepared, for illustrative purposes only, to provide             
information about how the proposed acquisition might have affected the          
financial information presented by Shire under UK GAAP.                         

Responsibilities                                                                

It is the responsibility solely of the Directors of Shire to prepare the pro    
forma statement of net assets in accordance with paragraph 12.29 of the         
Listing Rules of the UK Listing Authority ("the Listing Rules").                

It is our responsibility to form an opinion, as required by the Listing Rules,  
on the pro forma statement of net assets 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 statement of     
net assets 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 in the United Kingdom by the  
Auditing Practices Board. Our work, which involved no independent examination   
of any of the underlying financial information, consisted primarily of          
comparing the unadjusted financial information with the source documents,       
considering the evidence supporting the adjustments and discussing the pro      
forma statement of net assets with the Directors of Shire.                      

Our work has not been carried out in accordance with auditing standards         
generally accepted in the United States 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 statement of net assets has been properly compiled on the   
basis stated;                                                       

2.    such basis is consistent with accounting policies as applied by Shire     
under UK GAAP; and                                                  

3.    the adjustments are appropriate for the purposes of the pro forma         
   statement of net assets as disclosed pursuant to paragraph 12.29 of the
Listing Rules.                                                      

Yours faithfully                                                                

Arthur Andersen                                                                 
Chartered Accountants                                                           

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PART VIII 

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 of material documents entered into, and to be      
entered into, in connection with the Merger.                                    

1.  Structure of the Enlarged 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 6 of this Part VIII.  

The entire issued share capital of both Exchangeco and Callco is held by        
Shire.                                                                          

2.  The 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 BioChem              
Optionholders, voting together as set forth in the Interim Order, and the       
passing of the ordinary resolution set out in the notice of an 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 Securityholders. Under the terms of the      
Merger, the BioChem Shareholders, and the BioChem Optionholders 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 other rights in       
respect of BioChem Shares which are not exercised will be replaced with         
options or (as appropriate) other 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;                  

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 Shire Exchangeco
Share for one ADS;                                                  

o     a number of ADSs equal to the exchange ratio divided 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 Shire Exchangeco Shares for their   
BioChem Shares.                                                                 

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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.                     

Exchange Ratio                                                                  

The number of Ordinary Shares into which each BioChem Share shall be exchanged  
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 $47.20 and less than $70.80  determined by dividing $37.00 by the Average Shire ADS Price
                                          and multiplying by 3                                        
equal to or greater than $70.80           1.5678.                                                     

If a BioChem Shareholder so elects, or in certain other circumstances, Shire    
will provide such shareholder 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. The Shire ADS price will be the average    
of the closing prices of the Shire ADSs on NASDAQ over a period of 15           
consecutive trading days ending on the third day prior to Closing of the        
Arrangement.                                                                    

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     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 organisation, 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:                                                                

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

o     the issuance of securities;                                               

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o     the amendment of the memorandum and articles of association of Shire or   
other constituting 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, nor    
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 Acquisition Proposal 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 determines in good faith, after receiving a written opinion      
from its outside legal advisers, that such action is required for the Board to  
comply with its fiduciary duties under applicable law.                          

According to the terms of the Merger Agreement, Shire and BioChem have agreed   
promptly to 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;           

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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 the 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-4 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-4 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 the Merger; 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.         

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 Merger Agreement 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 BioChem Shares 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                                      

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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; and                     

    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.                                                

Conditions in favour of BioChem                                                 

The Merger Agreement provides that the obligation of BioChem to complete the    
Merger is subject to the fulfilment 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 fulfil 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 fulfil 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 Shareholders' approval has not been obtained at the BioChem       
Shareholders' 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).                                          

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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 the Extraordinary      
General Meeting;                                                    

o     the Board 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 Shareholders'          
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.                                                             

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  the Effective Time 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.                      

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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.                                                       

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     
simultaneously 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. Furthermore, 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 6 of this Part VIII).         

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5.  Voting and Exchange Trust Agreement                                         

Under the Voting and Exchange Trust Agreement (to be entered into among Shire,  
Exchangeco and General Trust of Canada (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 the event of the 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 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 of New Ordinary Shares or the transfer of        
Ordinary Shares other than (a) any UK stamp duty or stamp duty reserve tax      
payable on any issue of New Ordinary Shares or transfer of Ordinary Shares to   
a depository or its nominee or agent in connection with the issuance of Shire   
ADSs pursuant to the Merger and any issue of New Ordinary Shares or transfer    
of Ordinary Shares to a depository or its nominee or agent in connection with   
any exchange of Shire Exchangeco Shares for Shire ADSs, (b) any UK stamp duty   
reserve tax that arises in respect of the transfer of Shire Exchangeco Shares   
in exchange for Shire ADSs or New Ordinary Shares pursuant to the Merger (an    
"Exchange"), (c) any UK stamp duty that Shire or any of its subsidiaries        
requires to be paid on an Exchange, and (d) any UK stamp duty payable on an     
issue of Shire Exchangeco Shares to a holder of BioChem Shares pursuant to the  
Merger. Shire and Exchangeco jointly and severally agree to pay the Trustee     
for all services rendered by 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 Exchangeco Shares                              

Retraction                                                                      

Holders of Shire Exchangeco Shares have the right at any time (subject to the   
exercise by Callco of its overriding call right 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. 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.                                                      

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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.                                     

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, 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, 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 a Shire Control      
Transaction an Exchangeable Share Voting Event or an Exempt Exchangable Share   
Voting Event, 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 Right, 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;                                

(ii)  the occurrence of a Shire Control 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;                                                        

(iii) an Exchangeable Share Voting Event being proposed, provided that (i) the  
 board of directors of Exchangeco determines that it is not reasonably
practicable to accomplish the business purpose intended by          

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    the Exchangeable Share Voting Event in any other commercially reasonable
 matter that does not result in an Exchangeable Share Voting Event and
(ii) the holders of the Shire Exchangeco Shares fail to take the    
  necessary action at a meeting or other vote of such holders to approve
  or disapprove, as applicable, the Exchangeable Share Voting Event; and

(iv)  an Exempt Exchangeable Share Voting Event being proposed, provided that   
 the holders of the Shire Exchangeco Shares fail to take the necessary
action at a meeting or other vote of such holders to approve or     
  disapprove, as applicable, the Exempt Exchangeable Share Voting Event.

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PART IX 

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
Hon. James Andrews Grant and Mr Gerard Veilleux will be appointed as
  non-executive Directors of the Company. At that time, approximately 30
per cent of the Shire Board of Directors will be formed of former   
  BioChem board members, following the resignations of Dr Zola Horovitz,
Mr Joseph Smith and Mr John Spitznagel.                             

   As of 5 March 2001 the business address of all the Directors is, and of
  the Proposed Directors will be, Hampshire International Business Park,
Chineham, Basingstoke, Hampshire RG24 8EP, England.                 

(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 what
    was then 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 on the White House Staff in Washington, DC. He is a Non-executive
Director of MedImmune, Inc, 3-Dimensional Pharmaceuticals Inc and   
Versicor 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 of Wellcome plc. 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 
    Research and Development Director. Dr Totten is a medical doctor and has
 wide experience in the pharmaceutical industry covering all phases of

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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. Dr Totten is also a
non-executive director of Keryx Biopharmaceuticals Inc.             

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 Chairman of Antisoma plc and also Biowisdom
Ltd.  He is also on the board of directors of Pharmagene plc and    
   Chemunex S.A. Dr Price is Chairman of the Remuneration Committee of the
Board.                                                              

 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 Magainin
  Pharmaceuticals Inc. and 3-Dimensional Pharmaceuticals Inc. Dr Canavan
is Chairman of the Audit Committee of the Board. Dr Canavan was a   
director of BioChem from 1997 to 2000.                              

Dr Zola Horovitz joined the Board with effect from 23 December 1999,
 having previously served as a director of Roberts 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 from May
1999 until becoming a Director of Shire with effect from 23 December
 1999. He was a partner of Deerfield Management Company from September
  1994 until January 2000. He has been a financial analyst in healthcare
equities since 1971 and 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 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 and Johnson and served as
President of Rorer Pharmaceutical Corporation. Mr Smith received his
   undergraduate degree from the University of Buffalo and a 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. Mr Spitznagel received his
 undergraduate degree from Rider University and his M.B.A. degree from
Fairleigh Dickinson University. He is also a director of Questcor   
 Pharmaceuticals Inc, Boron LePore & Associates, Inc and Global Health
Associates, LLC.                                                    

Brief biographical details of the Proposed Directors are set out on 
pages 8 and 9 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]

                                                               Current                                        Past                 
Name                                                 Directorships/Partnerships                    Directorships/Partnerships      
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                   
Dr James Henry Cavanaugh                   Diversa Corporation                               Human Genome Sciences Inc             
                                           Med Immune Inc                                    Procept Inc                           
                                           3-Dimensional Pharmaceuticals Inc.                Magainin Pharmaceuticals Inc          
                                           Versicor Inc.                                     Genetic Therapy Inc                   
                                                                                             Aronex Pharmaceuticals Inc            
                                                                                             LeukoSite Inc                         

                                           General Partnerships                                                                    
                                           HealthCare Partners I, II, III, IV and V                                                
                                           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                                                              
                                           J.P. Morgan Mosaic Fund IV, LLC                                                         
                                           JPM Venture Capital Private Investors II                                                
                                            Business Trust                                                                         
                                           JPM Venture Capital Private Investors II                                                
                                            Business Trust PFD                                                                     
                                           TL Ventures V Special Partners 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                    Keryx Biopharmaceuticals Inc                      None                                  
-----------------------------------------------------------------------------------------------------------------------------------
Dr Barry John Price                        Antisoma plc (Chairman)                           Thallia Pharmaceuticals SA            
                                           Pharmagene plc                                    Glaxchem Ltd                          
                                           Chemunex SA                                       Glaxo Operations Ltd                  
                                           Biowisdom Ltd (Chairman)                          Celltech Chiroscience plc             
-----------------------------------------------------------------------------------------------------------------------------------
Dr Bernard Canavan                         Magainin Pharmaceuticals Inc                      Alpha-Beta Technology Inc             
                                           3-Dimensional Pharmaceuticals Inc                 BioChem Pharma Inc.                   
                                                                                             Nelson Communications Inc             
-----------------------------------------------------------------------------------------------------------------------------------
Dr Zola Philip Horovitz                    BioCryst Pharmaceuticals Inc                      Cytomed Inc                           
                                           Magainin Pharmaceuticals Inc                      Proscript Inc                         
                                           Synaptic Pharmaceuticals Corporation              Procept Inc                           
                                           Avigen Inc                                        Clinicor Inc                          
                                           Diacrin Inc                                       Deltys Pharmaceuticals Inc            
                                           Phyton Inc                                                                              
                                           3-Dimensional Pharmaceuticals Inc                                                       
                                           Nitromed Inc                                                                            
                                           Immunicon Corporation                                                                   
                                           Dov Pharmaceuticals Inc                                                                 
                                           Palitin Technologies Inc                                                                
-----------------------------------------------------------------------------------------------------------------------------------
Mr Ronald Maurice Nordmann                 Guilford Pharmaceuticals Inc                      Deerfield Management Company          
                                           Global Health Associates, LLC                                                           
                                           Boron, LePore & Associates, Inc                                                         
-----------------------------------------------------------------------------------------------------------------------------------
Mr Joseph Edward Smith                     Semus Drug Development Corporation                Careinsite Inc                        
                                           Claneil Enterprises Inc                                                                 
                                           International Longevity Center                                                          
                                           Boron, LePore & Associates, Inc                                                         
                                           Vivus Inc                                                                               
                                           Avanir Pharmaceuticals                                                                  
                                           WebMD Corporation                                                                       
-----------------------------------------------------------------------------------------------------------------------------------
Mr John Tetje Spitznagel                   Questcor Pharmaceuticals Inc                      None                                  
                                           Boron, LePore & Associates, Inc                                                         
                                           Global Health Associates, LLC                                                           
-----------------------------------------------------------------------------------------------------------------------------------

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                                                               Current                                        Past                 
Name                                                 Directorships/Partnerships                    Directorships/Partnerships      
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                   
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                                                                              
                                           AB Immunosystems                                                                        
-----------------------------------------------------------------------------------------------------------------------------------
The Hon. James Andrews Grant               United Dominion Industries Ltd                    None                                  
                                           CAE Industries Ltd                                                                      
                                           Canadian Imperial Bank of Commerce                                                      
-----------------------------------------------------------------------------------------------------------------------------------
Mr Gerard Veilleux                         Gesca                                             The State Hermitage Museum Foundation 
                                           La Presse                                         of Canada Inc.                        
                                           Publications JTL                                                                        
                                           Great West Life Assurance Co. & Great West                                              
                                           Lifeco                                                                                  
                                           Investors Group                                                                         
                                           London Life                                                                             
                                           Power Technology Investment                                                             
                                           Corporation(Diffusion Power)                                                            
                                           QuebecTel/Telus                                                                         
                                           McGill University                                                                       
                                           Fondation Baxter & Alma Ricard                                                          
                                           Loeb Research Institute                                                                 
                                           Theatre du Rideau-Vert                                                                  
                                           McCord Museum                                                                           
-----------------------------------------------------------------------------------------------------------------------------------

(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)   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  
million 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 $9.4 million. 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, England, 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. As   
of 5 March 2001, the registered office and principal place of business is       
Hampshire International Business Park, Chineham, Basingstoke, Hampshire, RG24   
8EP, England.                                                                   

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4.  Share capital                                                               

(a)   The authorised and issued and fully paid share capital of the Company,    
   as at 27 February 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, no issue of
  BioChem Shares following the exercise of dissent rights as referred to
  in Part I of this document and an Average Shire ADS Price less than or
   equal to $47.20 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 27 February 2001                                             After the Merger                     
         Authorised                          Issued                    Authorised                        Issued          
  Ordinary                          Ordinary                    Ordinary                        Ordinary                 
    Shares            (L)            Shares           (L)        Shares            (L)           Shares           (L)    
                                                                                                                         
400,000,000        20,000,000     257,521,218      12,876,061  800,000,000     40,000,000      496,298,576     24,814,929

Following the issue of Consideration Shares pursuant to the Merger  
Agreement, 303,701,424 Ordinary Shares will remain authorised but   
unissued, subject to the assumptions set out above and before taking
into account the Special Voting Shares to be issued pursuant to the 
Merger.                                                             

(b)   (i)   By a resolution passed at the last annual general meeting of the    
       Company held on 7 July 2000, the Directors, in substitution for
      all existing authorities (save to the extent the same may have
          been exercised by the issue of relevant securities prior to 7 July
        2000 or by reason of any offer or agreement made prior to 7 July
   2000 which would or might require relevant securities to be
allotted on or after 7 July 2000), 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 (L)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 was empowered before such expiry to make an offer or
        agreement which would or might require relevant securities to be
      allotted after such expiry and the Directors were empowered to
         allot relevant securities pursuant to any such offer or agreement
         as if the authority conferred by this resolution had not expired;

(ii)  By a resolution passed at the same annual general meeting, the
     Directors, in substitution for all existing authorities, 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; and (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
(L)611,297.55;                                          

    (iii) By a resolution passed at the same annual general meeting, subject
        to resolution (i) above and in addition and without prejudice to
     all existing authorities including any authority conferred by
       resolution (ii) above, 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) of the Company pursuant to
          the authority conferred upon them at (i) above as if section 89(1)
      of the Act did not apply to such allotment, provided that this
         power: (i) should expire five years after the date of the passing
        of this resolution, save that the Company might make an offer or
      agreement which would or might require equity securities to be
       allotted after such expiry and the Directors might allot equity
          securities pursuant to any such offer or agreement as if the power
        conferred by this resolution had not expired; and (ii) should be
       limited to allotment of equity securities to raise funds solely
for the purposes of repaying in                         

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   whole or in part any outstanding amounts under the facility
       agreement entered into on 19 November 1999 between, inter alia,
         the Company, Roberts and the Company's subsidiaries in the United
         States of America as borrowers and DLJ as agent; and (iii) should
          not involve the allotment of more than (L)430,000 in nominal value
of equity securities; and                               

(iv)  At the same annual general meeting, the Company adopted new   
   Articles of Association, a summary of which is contained in
paragraph 8 below.                                      

(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 (L)40,000,000. The amount of this increase represents 155 per
   cent of the total Ordinary Shares in issue as at 27 February 2001 or an
  increase of 100 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
    Optionholders 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 (L)17,221,000, representing 134 per cent of the
total Ordinary Shares in issue as at 27 February 2001, for a period 
    expiring 15 months after the date of the passing of this resolution. The
resolution will also create Special Voting Shares with such rights, 
privileges and restrictions attached to them as are set out in the  
  Notice of the Extraordinary General Meeting set out at the end of this
document. By a special resolution also to be proposed at the        
Extraordinary General Meeting, the Directors will be empowered, in  
substitution for all existing authorities save for, and without     
  prejudice to, the resolution passed at the last annual general meeting
    of the Company held on 7 July 2000 referred to in sub-paragraph (b)(iii)
  above, to allot equity securities (within the meaning of section 94(2)
  of the Act) of the Company for a 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 (L)1,279,868.                           

(e)   As the number of New Ordinary Shares to be issued depends upon the        
Average Shire ADS Price and upon the elections 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 only admitted to the   
 Official List and to trading 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
will not be held in the CREST system, will be despatched by post by 
2 April 2001. No temporary documents of title will be issued.       

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(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 27 February 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:                                           

                                                        [Enlarge/Download Table]

                               Number of   Exercise      Exercise dates            Total by
Scheme                   ordinary shares      Price  Earliest             Latest     Scheme
                                                                                           

SHL                                3,180    (L)1.00  01.07.97           30.06.01           
                                 290,400    (L)1.00  24.11.98           23.11.02           
                                 272,000    (L)1.00  24.01.99           23.01.03    565,580

Executive Scheme A                59,283   (L)2.180  15.02.99           14.02.06           
                                  12,000   (L)1.900  30.09.99           29.09.06           
                                   7,620   (L)2.690  26.08.00           25.08.07           
                                 140,961   (L)3.385  09.02.01           08.02.08           
                                   8,275   (L)3.625  13.08.01           12.08.08           
                                  27,194   (L)4.170  11.12.01           10.12.08           
                                  17,765   (L)4.735  15.03.02           14.03.09           
                                  10,618   (L)5.650  26.07.02           25.07.09           
                                   5,623   (L)5.335  23.08.02           22.08.09           
                                   4,181   (L)7.175  13.12.02           12.12.09           
                                 131,788  (L)10.275  01.03.03           28.02.10           
                                  21,426  (L)10.275  27.04.03           26.04.10           
                                  13,007  (L)10.275  06.06.03           05.06.10           
                                   9,612  (L)12.480  03.08.03           02.08.10           
                                   7,239  (L)12.430  19.09.03           18.09.10           
                                   1,500  (L)12.690  27.11.03           26.11.10    478,092

Executive Scheme B               526,287   (L)1.750  15.02.99           14.02.03           
                                  10,000   (L)1.900  30.09.99           29.09.03           
                                 153,313   (L)2.185  25.03.00           24.03.04           
                                 320,475   (L)2.690  26.08.00           25.08.04           
                                 772,249   (L)3.385  09.02.01           08.02.05           
                                 631,725   (L)3.625  13.08.01           12.08.05           
                                  17,806   (L)4.170  11.12.01           10.12.05           
                                  40,000   (L)4.260  12.01.02           11.01.06           
                                   2,000   (L)4.200  10.03.02           09.03.06           
                                 932,735   (L)4.735  15.03.02           14.03.06           
                                 185,000   (L)4.705  12.05.02           11.05.06           
                                  19,382   (L)5.650  26.07.02           22.07.06           
                                  14,377   (L)5.335  23.08.02           22.08.06           
                                  45,819   (L)7.175  13.12.02           12.12.06           
                               1,191,291  (L)10.275  01.03.03           28.02.07           
                                  35,000  (L)10.275  25.04.03           24.04.07           
                                 194,824  (L)10.275  27.04.03           26.04.07           
                                  75,743  (L)10.275  06.06.03           05.06.07           
                                  95,888  (L)12.480  03.08.03           02.08.07           
                                  34,261  (L)12.430  19.09.03           18.09.07           
                                   8,000  (L)12.690  27.11.03           26.11.07  5,306,175

2000 Executive Scheme A            2,417  (L)12.410  19.09.03           18.09.10      2,417

2000 Executive Scheme B          320,248  (L)12.800  03.08.03           02.08.07           
                                 157,583  (L)12.410  19.09.03           18.09.10           
                                   4,000  (L)13.200  27.11.03           26.11.07    481,831

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                                                                [Download Table]

                 Number of  Exercise     Exercise dates                  Total by
Scheme     ordinary shares     Price  Earliest             Latest          Scheme
                                                                                 

Roberts              1,564    $3.277         -           02.12.03                
                    92,348    $3.280         -           02.12.03                
                    31,280    $3.380         -           12.01.04                
                     4,692    $3.637         -           30.11.01                
                    39,120    $3.640         -           30.11.01                
                    62,354    $3.680         -           15.12.02                
                       938    $4.240         -           21.01.03                
                   368,491    $5.240         -           31.08.04                
                    11,730    $5.600         -           09.06.04                
                     2,972    $5.880         -           16.05.05                
                    62,560    $6.000         -           20.01.05                
                   187,680    $6.020         -           26.05.05                
                     1,564    $6.754         -           10.12.04                
                    65,033    $6.760         -           10.12.04                
                     8,140    $7.000         -           23.03.05         940,466

SPC                 16,800   (L)0.31         -           16.08.02          16,800

SRI                388,852     $0.45         -           13.03.01                
                   148,899   $1.2345         -           12.03.02                
                   209,316     $1.64         -           12.03.02         747,067

SLI                  2,265   $1.2955        --           10.04.04                
                     6,421   $1.2955        --           21.05.05                
                       986   $1.2955        --           11.07.05                
                     1,098   $1.2969        --           22.01.06                
                    10,581   $1.2955        --           05.03.06                
                       939   $1.2953        --           13.05.06                
                     1,243   $1.2955        --           07.08.06                
                     2,508   $1.7270        --           06.11.06                
                    20,319   $1.7274        --           10.12.06          46,360

Sharesave           71,752   (L)1.75  01.04.01           30.09.01                
                    35,842   (L)1.54  01.12.01           31.05.02                
                    16,463   (L)2.20  01.11.02           30.04.03                
                     5,671   (L)2.20  01.11.00           30.04.01                
                    45,739   (L)8.56  01.06.03           30.11.03                
                    26,075   (L)8.56  01.06.03           30.11.05         201,542
                                                                   --------------
                                                                        8,786,330
                                                                   ==============

    Further details of the Employee Share Schemes are set out in paragraph 5
of this Part IX. Details of Directors' interests in shares of the   
Company are included in paragraph 9 of this Part IX.                

(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 27 February 2001 (being the latest
practicable date prior to the publication of this document):        

                                                                [Download Table]

                                                            Earliest date on
                                 Number of Ordinary       which award may be
Value of Award                               Shares                   vested
                                                                            
(L)390,243                                   83,848             8 April 2003
(L)77,351                                    16,440              12 May 2003
(L)56,500                                    10,000             25 July 2003
(L)54,220                                    10,000              22 Aug 2003
(L)1,211,731                                120,452         28 February 2004
(L)611,962                                   62,701              6 June 2004

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(j)   The share capital history of the Company for the three years prior to 27  
February 2001 (being the latest practicable date prior to the       
publication of this document) is as follows:                        

(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 
       (L)10,000,000 by the creation of 22,000,000 additional 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 (L)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:                                    

                                                        [Enlarge/Download Table]

                                                 Number of Ordinary Shares issued during year                
                                                      to 31 December                            to 27February
Scheme                                       1998                1999                2000                2001
                                                                                                             
SRI                                     3,661,041             776,371             447,322                  --
SLI                                     1,392,330             505,171             435,073               3,934
Roberts                                        --                  --           8,126,294             107,343
SPC                                        84,000               9,600                  --              31,200
SHL                                       854,180             787,640             392,120               6,580
Sharesave                                   4,290              19,513              37,110               9,394
Stock Purchase Plan                            --              28,123             218,950                  --
Executive A                                    --              58,044              75,561              16,234
Executive B                                    --             483,539             993,977             258,082
                                 ----------------    ----------------    ----------------    ----------------
Total number of Ordinary Shares                                                                              
issued during each year                 5,995,841           2,668,001          10,726,407             432,767
                                 ================    ================    ================    ================

(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 (L)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 27 February 1998 (being
    three years prior to 27 February 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.                                                       

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5.  Employee Share Schemes and BioChem Stock Option Plans                       

There are five 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 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. At the last annual general meeting of the Company held on 7 July 2000,  
the Company adopted a further share option scheme, the 2000 Executive Share     
Option Scheme. The Sharesave Scheme, Part A of the Executive Scheme and Part A  
of the 2000 ESO Scheme have been approved by the Inland Revenue. 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 (L)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.                                                                   

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(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:                                           

    (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), 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 applications will   
be made to the UK Listing Authority for any allotted shares to be admitted to   
the Official List and to the London Stock Exchange for such shares to be        
admitted to trading on the London Stock Exchange.                               

(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 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 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                                                              

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(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; and

   (g)   at any one time, the market value as at the grant date of options
held by any one participant must not exceed (L)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                                                                 

(iii) the limit in sub-paragraph (ix)(g) above in respect of part A 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 incentive stock options may be granted
  to US employees under these provisions. All other limits, described in
sub-paragraph (ix) above, continue to apply.                        

(d)   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                                                   

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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 (L)10, maximum (L)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 Daily  
Official List of the London Stock Exchange) 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 allotment) and application      
will be made 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                                                  

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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. 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 2,000,000. In addition, limits equivalent to those described in paragraph    
(d)(vi) above in relation to the Sharesave Scheme apply in relation to the      
Plan.                                                                           

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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. ("Pharmavene"), the SLI Plan       
(then called the Pharmavene 1991 Stock Option Plan) was amended such that       
options over Pharmavene common stock were replaced by options over Ordinary     
Shares. Under the SLI Plan, options to acquire a total of 46,360 Ordinary       
Shares at prices ranging from $1.2953 to $1.7274 per share were outstanding as  
of 27 February 2001 (being the latest practicable date prior to publication of  
this document).                                                                 

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 747,067 Ordinary Shares at prices ranging from $0.45 to $1.64 per share      
were outstanding as of 27 February 2001 (being the latest practicable date      
prior to publication of this document).                                         

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.                                  

(ii)   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.                                              

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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 Daily Official List of the London Stock Exchange) 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                                                   

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.                           

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Part A of the 2000 ESO Scheme                                                   

(i) Eligibility                                                                 

With the approval of the Remuneration Committee (the "Committee") 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 Company's business needs.                   

Options will be neither transferable (other than to personal representatives    
following death) nor pensionable.                                               

Options granted under the 2000 ESO Scheme will normally be exercisable only if  
performance-related criteria imposed by the Committee are met (see sub-         
paragraph (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 sub-paragraph (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)   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 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   

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date prior to the allotment of such shares) and application to the UK Listing   
Authority will be made to the UK Listing Authority for any allotted shares to   
be admitted to the Official List and to the London Stock Exchange for any such  
shares to be admitted to trading on the London Stock Exchange.                  

(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 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 Company'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     
Company'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.          

(ix)   Scheme limits                                                            

(a)Individual Limits                                                    

         An individual's participation under part A of the 2000 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 (L)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 the
         Group's employee share schemes, within the previous period of ten
          years, may not exceed 10 per cent of the Company's issued ordinary
         share capital at the date of grant. For the purpose of this limit

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       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 sub-paragraph (ix) (i) of part A will not
apply to options granted under part B;                  

    (c)   options under part B of the 2000 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                                              

Following the acquisition of Roberts, the Roberts Stock Option Plans were       
amended such that options over Roberts' common stock were replaced by options   
over Ordinary Shares. Under the Roberts' Stock Option Plans options to acquire  
a total of 940,466 Ordinary Shares at prices ranging from $3.277 to $7.00 per   
Share were outstanding at 27 February 2001 (being the latest practicable date   
prior to the publication of this document).                                     

It is intended that no further options will be granted under the Roberts Stock  
Option Plans.                                                                   

(k) BioChem's Stock Option Plan                                                 

The BioChem Stock Option Plan provides for the granting of options to purchase  
a maximum of 19,250,000 BioChem Shares. 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) of BioChem Shares 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.                                                                     

BioChem Options that are not currently exercisable vest and become exercisable  
as a result of a bona fide offer to purchase all or part of BioChem Shares      
being made to BioChem Shareholders in accordance with the terms of the BioChem  
Stock Option Plan.                                                              

Following the Merger, the BioChem Stock Option Plan will be amended such that   
options over BioChem's common stock will be replaced by options over Ordinary   
Shares.                                                                         

At the Effective Date, each outstanding and unexercised BioChem Option will be  
exchanged for a vested option to purchase a number of Ordinary Shares from the  
Company equal to the product of the exchange ratio multiplied by the number of  
BioChem shares subject to such BioChem Option prior to the Effective Time. The  
exercise price per Ordinary Share will be equal to the UK pound equivalent on   
the Effective Date of the per share exercise price of such BioChem Option       
immediately prior to the Merger divided by the exchange ratio applicable to     
the Merger. 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 Stock Option Plan, except for  
the initial vesting period.                                                     

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6.  Principal subsidiaries and undertakings                                     

The principal subsidiaries and undertakings of the Company are as follows:      

                                                        [Enlarge/Download Table]

Subsidiary/undertaking                    Country of incorporation    Registered Office        Field of activity
-----------------------------------       --------------------------  -------------------       ----------------
                                                                                                                
Roberts Pharmaceutical Corporation        USA, State of New Jersey    7900 Tanners Gate Drive  Pharmaceutical   
                                                                      Florence                 marketing and    
                                                                      Kentucky 41042           development      
                                                                      USA                                       

Shire Pharmaceuticals Limited             England and Wales           East Anton               Pharmaceutical   
                                                                      Andover Hants            marketing        
                                                                      SP10 5RG                                  
                                                                      England                                   

Shire Pharmaceutical Development Limited  England and Wales           East Anton               Pharmaceutical   
                                                                      Andover Hants            development      
                                                                      SP10 5RG                                  
                                                                      England                                   

Shire International Licensing BV          Netherlands                 Olympic Plaza Fred.      Licensing company
                                                                      Roeskestraat 123                          
                                                                      1076 EE Amsterdam/                        
                                                                      PO Box 75032                              
                                                                      1070 AA Amsterdam                         
                                                                      Netherlands                               

Shire Richwood Inc.                       USA, State of Kentucky      7900 Tanners Gate        Pharmaceutical   
                                                                      Drive,                   marketing        
                                                                      Florence,                                 
                                                                      Kentucky,                                 
                                                                      41042, USA                                

Shire Laboratories Inc.                   USA, State of Delaware      1550 East Gude Drive     Pharmaceutical   
                                                                      Rockville                development      
                                                                      MD 20850 USA                              

Shire Supplies, US, LLC                   USA, State of Delaware      Corporation Trust        Manufacturing    
                                                                      Center                   procurement      
                                                                      Wilmington                                
                                                                      Delaware 19801                            
                                                                      USA                                       

Shire France S.A                          France                      160 rue de Paris         Pharmaceutical   
                                                                      92100 Boulogne           marketing and    
                                                                      Bilancourt, France       distribution     

Shire Deutschland GmbH & Co. KG           Germany                     Sieburger Strasse 126,   Pharmaceutical   
                                                                      D-50679                  marketing and    
                                                                      Koln                     distribution     
                                                                      Germany                                   

Shire US Inc                              USA, State of New Jersey    7900 Tanners Gate        Pharmaceutical   
                                                                      Drive,                   marketing        
                                                                      Florence, Kentucky,                       
                                                                      41042, USA                                

Shire Italia SpA                          Italy                       Via Lucchese, 80         Pharmaceutical   
                                                                      Sestro Fiorentino,       marketing and    
                                                                      Florence                 distribution     
                                                                      Italy                                     
Shire Pharmaceuticals Iberica S.L.        Spain                       Nunez de Balbao 81       Pharmaceutical   
                                                                      28006 Madrid             marketing and    
                                                                      Spain                    distribution     

Shire Canada Inc                          Canada                      400 Iroquois             Pharmaceutical   
                                                                      Shore Road,              manufacturing and
                                                                      Oakville,                marketing        
                                                                      Ontario                                   
                                                                      L6H 1M5                                   
                                                                      Canada                                    

Shire Pharmaceuticals Development US Inc  US                          1901 Research            Pharmaceutical   
                                                                      Boulevard,               development      
                                                                      Rockville,                                
                                                                      Maryland,                                 
                                                                      USA                                       

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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 Business    Office accommodation 35,029  N/A                 N/A                            N/A
 Park, Chineham, Basingstoke,       sq ft                                                                              
 Hampshire RG24 8EP. Freehold       7 acre site                                                                        
                                    Planning consent for a                                                             
                                    further 70,000 sq ft of                                                            
                                    office accommodation                                                               

East Anton Court, Icknield Way,     Office accommodation 17,460  5 December 1997     10 years from           (L)138,382
 Andover, Hampshire                 sq. ft                                           24 June 1997                      
 SP10 5RG. Leasehold                                                                                                   

1550 East Gude Drive, Rockville MD  Offices and laboratories     1 May 1995          5 years from 1 May        $637,336
 20850 USA. Leasehold               44,500 sq. ft                                    1995                              

7900 Tanners Gate Drive, Florence,  Office accommodation 11,000  1 April 1999        4 years from              $146,403
 Kentucky 41042, USA                sq. ft                                           1 April 1999                      

1901 Research Blvd, Rockville MD    16,379sq.ft                  1 July 2000         8 1/2 years from          $425,854
 20850 USA                                                                           1 July 2000                       

7900 Tanners Gate Drive, Florence,  Office Accommodation 4,490   1 March 1999        34 months from             $29,089
 Kentucky 41042, USA                sq. ft                                           1 March 1999                      

7900 Tanners Gate Drive, Florence,  Office Accommodation 3,130   1 January 1999      3 years from               $21,931
 Kentucky 41042, USA                sq. ft                                           1 January 1999                    

7900 Tanners Gate Drive, Florence,  Warehouse space              1 January 1999      20 months from             $36,760
 Kentucky 41042, USA                5,890 sq. ft                                     1 May 1999                        

7900 Tanners Gate Drive, Florence,  Warehouse space              1 April 1999        54 months from             $24,511
 Kentucky 41042, USA                3,930 sq. ft                                     1 April 1999                      

7900 Tanners Gate Drive, Florence,  Warehouse space              1 April 1999        33 months from             $21,091
 Kentucky 41042, USA                3,380 sq. ft                                     1 April 1999                      

7900 Tanners Gate Drive, Florence,  Warehouse space              1 April 1999        5 years from               $15,000
 Kentucky 41042, USA                3,000 sq. ft                                     1 April 1999                      

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:            

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(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 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;     

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        (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 paragraph 4 (b) 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.

      (b)   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.

(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 27 February 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,                                                      

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   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:                                                            

                                                                [Download Table]


                                                       Prior to        Following
(i)                                                      Merger           Merger
                                                      Number of        Number of
                                                       Ordinary         Ordinary
    Name                                                 Shares           Shares
                                                                                

    Dr J H Cavanaugh(1)                               8,806,368        8,806,368
    R Stahel                                             13,827           13,827
    A C Russell                                              --               --
    Dr J W Totten                                            --               --
    Dr B J Price                                         31,350           31,350
    Dr B Canavan(3)                                       3,000           24,754
    Dr Z P Horovitz                                       3,128            3,128
    R M Nordmann                                         46,968           46,968
    J E Smith                                           125,120          125,120
    J T Spitznagel                                       57,624           57,624
    Dr F Bellini(2)                                          --        5,702,895
    The Hon J A Grant(2)                                     --            3,955
    G Veilleux(2)                                            --               --

  (1) 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.                        

  (2) Based on the Average Shire ADS price of $56.125 (being the closing
    price of an ADS on 27 February 2001, the latest practicable date
prior to the publication of this document) and assuming each
         Proposed Director elects for New Shire Ordinary Shares, Dr Bellini's,
        the Hon. J A Grant's and G Veilleux's shares would be exchanged at a
      rate of 1.9777 New Shire Ordinary Shares for each existing BioChem
Share. No account of BioChem Share Options has been made.   

   (3) Dr Canavan is also interested in 11,000 BioChem Shares. Based on an
     Average Shire ADS price of $56.125 (being the closing price of an
     ADS on 27 February 2001, the latest practicable date prior to the
publication of this document), Dr Canavan's shares would be 
    exchanged at a rate of 1.9777 New Shire Ordinary Shares for each
        existing BioChem Share. No account of BioChem Share Options has been
        made. Dr Canavan can also expect to receive payment of approximately
   $58,000 in respect of his ownership of BioChem's Deferred Share
Units.                                                      

(ii)  The Directors' interests in Ordinary Shares in respect of their options   
over shares in the Employee Share Schemes are as follows:           

                                                        [Enlarge/Download Table]

                                                    Number of                                      
                                              Ordinary Shares   Exercise     Exercise dates        
Name           Scheme                            under option      price  Earliest           Latest
                                                                                                   
R Stahel       SHL                                     89,840    (L)1.00  24.11.96         23.11.02
                                                       89,840    (L)1.00  24.11.97         23.11.02
                                                       89,840    (L)1.00  24.11.98         23.11.02
                                                       90,160    (L)1.00  24.01.97         23.01.03
                                                       90,160    (L)1.00  24.01.98         23.01.03
                                                       90,160    (L)1.00  24.01.99         23.01.03
               Executive Scheme A                      13,761    (L)2.18  15.02.99         14.02.06
               Executive Scheme B                     329,095    (L)1.75  15.02.99         14.02.03
                                                       81,918   (L)3.385  09.02.01         08.02.05
                                                       54,189  (L)10.275  01.03.03         28.02.07
               2000 Executive Scheme B                 34,241   (L)12.80  03.08.03         02.08.07
               Sharesave Scheme                         9,857    (L)1.75  01.04.01         30.09.01
                                        ---------------------                                      
               Total                                1,063,061                                      
                                        =====================                                      

Dr J W Totten  Executive Scheme A                       8,862    (L)3.39  09.02.01         08.02.08
               Executive Scheme B                     141,138   (L)3.385  09.02.01         08.02.05
                                                       25,000   (L)4.705  12.05.02         11.05.06
                                                       16,995  (L)10.275  01.03.03         28.02.07
               2000 Executive Scheme B                 63,242   (L)12.80  03.08.03         02.08.07
               Sharesave Scheme                         1,139    (L)8.56  01.06.03         30.11.03
                                        ---------------------                                      
               Total                                  256,376                                      
                                        =====================                                      

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                                                        [Enlarge/Download Table]

                                               Number of                Exercise dates        
                                   Ordinary Shares under   Exercise                           
Name           Scheme                             option      price  Earliest           Latest
                                                                                              
A C Russell    Executive Scheme A                  4,181   (L)7.175  13.12.02         12.12.09
               Executive Scheme B                 45,819   (L)7.175  13.12.02         12.12.06
                                                   6,422  (L)10.275  01.03.03         28.02.07
               Sharesave Scheme                    1,971    (L)8.56  01.06.05         30.11.05
                                   ---------------------                                      
               Total                              58,393                                      
                                   =====================                                      

Dr Z Horovitz  Roberts                            31,280      $3.38        --         13.01.04
                                                  11,730      $5.60        --         10.06.04
                                                  31,280      $5.24        --         01.09.04
                                                  31,280      $6.00        --         21.01.05
                                                  15,640      $6.02        --         27.05.05
                                   ---------------------                                      
               Total                             121,210                                      
                                   =====================                                      

J Smith        Roberts                            31,280      $5.24        --         01.09.04
                                                  31,280      $6.00        --         21.01.05
                                                  15,640      $6.02        --         27.05.05
                                   ---------------------                                      
               Total                              78,200                                      
                                   =====================                                      

The above figures for Ordinary Shares under option do not take into 
account conditional awards made under the Long Term Incentive Plan. 

(b)   As at 27 February 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:            

                                                        [Enlarge/Download Table]

                                                          Earliest date on which award
Name           Value of award  Number of Ordinary Shares                may be awarded
                                                                                      

R Stahel           (L)150,000                     32,230                  8 April 2003
Dr J W Totten       (L)71,000                     15,255                  8 April 2003
A C Russell         (L)90,000                     12,436              12 December 2003
R Stahel           (L)360,050                     35,785              28 February 2004
A C Russell         (L)18,000                      1,789              28 February 2004
Dr J W Totten      (L)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 to terminate his employment with Roberts under his service
          agreement, then the Company will cause Roberts 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 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 (L)248,000 per
    annum for his consulting services, (L)93,000 per annum as an
  office holder, (L)155,000 per annum to comply with certain
       restrictive covenants contained therein and (L)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                                                              

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    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.                                                      

(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 (L)440,000. Mr Stahel is entitled to receive such
          an annual bonus (if any and subject to a maximum of 55 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 (L)225,000.
          Mr Russell is entitled to receive such an annual bonus (if any and
         subject to a maximum of 50 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 (L)36,000 for the first six months of
        his employment of the Company, which will be paid in March 2001.

   (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 (L)260,000. Dr Totten is entitled to receive such an
       annual bonus (if any and subject to a maximum of 50 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 (L)20,000 per annum, payable quarterly in
       arrear. 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
      (as defined below) 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 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 other member of the Enlarged Group.

(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 approximately (L)1,388,000. 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 27 February 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:                                                            

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                                                                [Download Table]

                                                             Percentage of
                                                  Number of   issued share
Shareholder                          Notes  Ordinary Shares        capital
                                                                          
The Capital Group Companies, Inc.      (i)       10,762,647           4.18
HealthCare Ventures LLC               (ii)        8,690,090           3.37
Putnam Investment Management, LLC &                                       
The Putnam Advisory Company, Inc.                17,732,370           6.89

(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.             

 In addition to the above, the Company has been notified that as at 13
   February 2001 Guaranty Nominees Limited held 68,251,417 Ordinary Shares
which underlie ADSs (representing 26.51 per cent of the total share 
capital of the Company) in its capacity as the depository of the    
Company's ADSs. Each ADS equates to three of the Company's Ordinary 
Shares of 5p.                                                       

On Completion of the Merger, (assuming no exercise of options       
   outstanding under the Employee Share Schemes, no exercise of options or
  rights in respect of BioChem Shares, no issue of new BioChem Shares as
 referred to in Part I of this document and an Average Shire ADS Price
less than or equal to $47.20 and assuming all existing BioChem      
Shareholders exchange their BioChem Shares for New Ordinary Shares  
   pursuant to the terms of the Merger) 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 the Closing):            

                                                                [Download Table]

                                                               Percentage of
                                              Number of         issued share
Shareholder                             Ordinary Shares              capital
                                                                            
Putman Investment Management, LLC                                           
 & The                                                                      
 Putnam Advisory Company, Inc.               17,732,370                 3.57
La Caisse des Depots                         16,869,390                 3.40

(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.                                  

10. Material contracts                                                          

(a)   No contracts (other than contracts entered into in the ordinary course    
  of business) have either been entered into by members of the Group (i)
within a period of two years immediately preceding the date of this 
  document and are or may be material, or (ii) at any time which contain
    provisions under which any member of the Group has a material obligation
    or entitlement as at the date of this document, save as disclosed below:

   (i)   the Merger Agreement (as described in paragraph 2 to Part VIII of
this document);                                         

   (ii)  the Option Agreement (as described in paragraph 3 to Part VIII of
this document);                                         

    (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 reference to 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. 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;                                             

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  (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 Limited. ("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 Purchaser 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 (as agent for a
     syndicate of banks) dated 19 November 1999, pursuant to which
      certain banks agreed to provide a $250 million credit facility
    including a $125 million five-year revolving credit facility
      (including a $25 million letter of credit facility) and a $125
          million five-year term loan facility. The applicable interest rate
   on the credit facility will range, between 0.5 per cent and
        1.5 per cent over the higher of the prime rate of DLJ 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 credit facility
    are 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 credit
  facility will not be secured. The credit facility contains
   customary covenants. The terms of the credit agreement also
   contain maintenance tests which require Shire to maintain a
     minimum net worth, a specified leverage ratio and a specified
coverage ratio.                                         

(b)   No contracts (other than contracts entered into in the ordinary course    
of business) have either been entered into by BioChem (i) within a  
   period of two years immediately preceding the date of this document and
are or may be material, or (ii) at any time which contain provisions
 under which BioChem has a material obligation or entitlement, save as
disclosed below:                                                    

   (i)   the Merger Agreement (as described in paragraph 2 to Part VIII of
this document);                                         

   (ii)  the Option Agreement (as described in paragraph 3 to Part VIII of
this document);                                         

   (iii) an agreement between BioChem and GlaxoSmithKline dated 31 January
          1990 and amended as of 20 November 1995, pursuant to which BioChem
  licensed to GlaxoSmithKline the worldwide rights, with the
 exception of Canada, to develop, manufacture and sell the
          nucleoside analogue 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.                                            

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      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;

(iv)  a series of agreements between AstraZeneca plc ("Astra") and  
        BioChem dated 31 August 1992 (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;
and                                                     

   (v)   an agreement between BioChem and GlaxoSmithKline dated 3 December
  1998, pursuant to which 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 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 and Proposed 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. Litigation                                                                  

(a)   (i)   SRI has been named as a defendant in approximately 3,746 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 23 February 2001 SRI
   had been dismissed from 2,597 cases. As at 23 February 2001
      approximately 818 cases were pending dismissal. SRI's products
         Oby-Cap or Oby-Trim have been positively identified (or have been
         specifically alleged to have been ingested) in 171 cases of which
         59 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;       

  o     the defendants failed adequately to test phentermine
             individually and when taken in combination with the other
drugs; and                                  

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         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.                             

       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, the 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. SRI 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, SRI intends to defend vigorously any and all
   claims made against the Group in respect of phentermine and
       believes that liability is neither probable nor quantifiable at
      this stage of litigation. 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.

(iii) 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 specifically related 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.

     No substantive legal advice has been given to date and in the
         circumstances the Company does not have definitive information to
enable further disclosure.                              

(b)   Save as disclosed in paragraph (a) above, the Group is not, and has not   
 been, engaged in any legal or arbitration proceedings and no legal or
arbitration proceedings are pending or threatened by or against the 
   Group which may have or have had during the 12 months prior to the date
hereof a significant effect on the financial position of the Group. 

(c)   (i)   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 analogues and use of these
         analogues 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 in issue in individual European countries.      

   In Japan, Emory University filed an opposition to BioChem's
         granted patent which covers lamivudine, related analogues and use
          of the analogues 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.        

         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 licensee in
       the US, of an Emory University US patent granted that same day.
BioChem considers this patent                           

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  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.                               

          The Company has been advised by its patent agents that BioChem has
         reasonable patent coverage for lamivudine and its use in treating
     viral infections including HIV and HBV. Should BioChem or the
         Enlarged Group suffer a successful opposition or challenge to its
        patents or patent applications relating to lamivudine, then such
        an action could have a detrimental effect on the Enlarged Group.

 (ii)  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, neither BioChem nor any other   
    member of its group is, or has been, engaged in any legal or arbitration
proceedings and no legal or arbitration proceedings are pending or  
   threatened by or against BioChem or any other member of its group which
may have or have had during the 12 months prior to the date hereof a
significant effect on the financial position of BioChem.            

13. Significant changes                                                         

(a)   There has been no significant change in the financial or trading          
position of the Group since 31 December 2000, the date to which the 
latest audited accounts of the Group were prepared.                 

(b)   There has been no significant change in the financial or trading          
    position of BioChem since 31 December 2000, the date to which the latest
audited results of BioChem were prepared.                           

14. 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 as at the date of this         
document and are subject to changes therein. They relate only to certain        
limited aspects of the UK taxation treatment of holders of Ordinary Shares or   
ADRs 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 Ordinary Shares or ADRs  
beneficially as an investment. In addition, the comments assume that holders    
of ADRs will be treated in practice as the beneficial owners of the Ordinary    
Shares represented by the ADRs for the purposes of UK tax.                      

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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) Dividends                                                                   

Shire is not required to withhold any amounts in respect of taxation
from its dividend payments.                                         

   A Shire Shareholder or ADR holder who is an individual resident for tax
purposes in the UK and who receives a dividend from Shire 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 (L)80 will carry
    a tax credit of (L)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 (L)88.89, namely (L)28.89, which, after deducting the tax credit
of (L)8.89, leaves a higher rate income tax charge of (L)20.        

With the exception of investors holding Ordinary Shares and/or ADRs 
through personal equity plans or individual savings accounts, Shire 
Shareholders or ADR 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. Investors
holding Ordinary Shares and/or ADRs through personal equity plans or
 individual savings accounts will only be entitled to claim payment of
  the tax credit for dividends paid on or before 5 April 2004. Charities
will 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 ADR 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 ADR 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 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.                                                     

(b) Chargeable Gains                                                            

A disposal of Ordinary Shares or ADRs by a Shire Shareholder or ADR 
holder who is either resident or, in the case of an individual,     
   ordinarily resident, for tax purposes in the UK, or who is not resident
in the UK, but carries on a trade, profession or vocation in the UK 
through a branch or agency to which the Ordinary Shares or ADRs are 
  attributable, may give rise to a chargeable gain or allowable loss for
  the purposes of UK tax on chargeable gains. Individuals who dispose of
Ordinary Shares or ADRs while they are temporarily non-resident may,
   under special rules, be treated as disposing of them in the tax year in
which they again become resident or ordinarily resident in the UK.  

(c) 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)Ordinary Shares                                                      

         A conveyance or transfer on sale of Ordinary Shares other than to
          a depository 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 (L)5). An unconditional agreement for such transfer 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 stamp duty is paid, any SDRT paid will, provided that a
       claim for repayment is made, be repaid. Stamp duty and SDRT are
normally paid by the purchaser.                         

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        Under the CREST system for paperless transfers, no stamp duty or
         SDRT will arise on a transfer of Ordinary Shares into the system,
      unless such a transfer is made for a consideration in money or
      money's worth, in which case a liability to SDRT (usually at a
       rate of 0.5 per cent) will arise. Paperless transfers of shares
        within CREST will be liable to SDRT rather than stamp duty, also
   at a rate of 0.5 per cent and SDRT on relevant transactions
       settled within the system or reported through it for regulatory
purposes will be collected by CREST.                    

         A charge to stamp duty or SDRT may arise on the issue or transfer
      of Ordinary Shares to an issuer of depositary receipts, to its
       nominee or agent or to particular persons providing a clearance
          service, their nominees or their agents. The rate of stamp duty or
        SDRT will generally be 1.5 per cent of either (a) in the case of
    an issue of Ordinary Shares, the issue price of the Ordinary
      Shares concerned, or (b) in the case of a transfer of Ordinary
         Shares, the value of the consideration or, in some circumstances,
        the value of the Ordinary Shares concerned, in the case of stamp
     duty rounded up if necessary to the nearest multiple of (L)5.

(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.

15. Miscellaneous                                                               

(a)   The total expenses of, and incidental to, the Merger which are payable    
 by the Company (including SDRT, professional fees and printing costs)
  are estimated to be approximately (L)55 million (excluding value added
tax).                                                               

(b)   The average monthly number of people employed by Shire during 2000, 1999  
and 1998 was as follows:                                            

                                                                [Download Table]

                                        Years ending 31 December            
                                     2000              1999             1998
                                                                            
Manufacturing                         154                50               52
Distribution                          552               254              210
General and                                                                 
  administrative                      119                63               57
Research and                                                                
  development                         143               112               98
                            -------------     -------------    -------------
                                      968               479              417
                            =============     =============    =============

(c)   The New Ordinary Shares will be issued fully paid in registered form.     
None of the New Ordinary 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 to be
admitted to trading on the London Stock Exchange.                   

(d)   The Company's registrars are Lloyds TSB Registrars, The Causeway,         
Worthing, West Sussex BN99 6DA, England.                            

(e)   The Company has received financial advice from 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 therein of the
references to its name in the form and context in which they appear.

(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 three years ended 31 December 2000.                 

(h)   Arthur Andersen have given and not withdrawn their written consent to     
the inclusion in Parts IV 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.   

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(i)   Each of the New Ordinary 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 the Closing (the "Average Shire ADS Price")
being less than or equal to $47.20 and a maximum possible number of 
BioChem Shares of 108,188,225 at the Effective Time (excluding any  
   BioChem Shares to be issued following the exercise of dissent rights as
referred to in Part I of this document), the aggregate consideration
 represented by the number of Consideration Shares to be issued in the
Merger would be (L)3,346 million based on the Company share price of
    (L)13.15 as at 27 February 2001 (being the latest practicable date prior
   to the publication of this document). This would represent a premium of
1310p per Ordinary Share over the nominal value of 5p. Based on the 
Average Shire ADS Price being equal to or greater than $70.80, the  
aggregate consideration represented by the number of Consideration  
    Shares to be issued in the Merger would be (L)2,230 million based on the
    Company share price of (L)13.15 as at 27 February 2001 (being the latest
   practicable date prior to the publication of this document). This would
  represent a premium of 1310p per Ordinary Share over the nominal value
of 5p.                                                              

16. 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 Merger Agreement and other 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 15(e) and 15(h)
above;                                                  

    (vii) the audited financial statements of BioChem for the years ended 31
December 1999 and 31 December 2000;                     

 (viii)the unaudited pro forma statements of combined net assets under
US/UK GAAP referred to in Part VII;                     

    (ix)  the reconciliations of BioChem's figures to US/UK GAAP referred to
in Part IV; and                                         

(x)   this document.                                                

                                                                  1 March 2001

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Definitions 

In this document, the following expressions have the following meanings,        
unless the context requires otherwise:                                          

"1993 Plan"                       the Richwood 1993 Stock Option Plan           

"1995 Plan"                       the Richwood 1995 Stock Option Plan           

"2000 ESO Scheme"                 the Shire Pharmaceuticals Group plc 2000      
                                 Executive Share Option Scheme (parts A and B)

"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
                        Shire or any purchase or sale of the
                               consolidated assets of BioChem or Shire and
                                 its subsidiaries, taken as a whole, having an
                                 aggregate value of 50 per cent or more of the
                                 market capitalisation of BioChem or Shire, or
                         any purchase or sale of, or tender or
                              exchange offer for, 50 per cent or more of
                              the equity securities of BioChem or Shire,
             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 15(i) of 
            Part IX of this document

"BioChem"                         BioChem Pharma Inc.                           

"BioChem Optionholders"           holders of BioChem Options                    

"BioChem Options"                 options to acquire BioChem Shares granted     
                       under the BioChem Stock Option Plan

"BioChem Optionholders"           collectively the holders of BioChem Options   
        and BioChem Warrants

"BioChem Securityholders"         collectively the BioChem Shareholders and the 
         BioChem Optionholders

"BioChem Shareholders"            holders of BioChem Shares                     

"BioChem Shares"                  the outstanding common shares in the capital  
of BioChem  

"BioChem Stock Option Plan"       BioChem's Directors, Officers, Employees and  
                                 Consultants Stock Option Plan as amended on 1
March 1999  

"BioChem Stock Option Plans"      the Biochem Stock Option Plan, the BioChem    
                            Warrants and a memorandum of undertaking
                          dated September 1997 pursuant to which
                           BioChem granted two senior employees of
                             BioChem options to acquire 40,000 BioChem
Shares      

"BioChem Warrants"                right to receive warrants in certain          
                             circumstances 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        

"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              

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"Chase H&Q"                       Chase H&Q, a division of Chase Securities     

"Cliff Vesting"                   a provision in a performance based stock      
                               option scheme that allows vesting of option
                                 awards at a defined point in time even if the
                            performance target has not been achieved

"CliniChem"                       CliniChem Development Inc., a company         
                               incorporated under the laws of Canada and a
                      wholly-owned subsidiary of BioChem

"Closing"                         the closing of the Arrangement, which will    
                              take place on the first business day after
                          the satisfaction or waiver (subject to
                               applicable law) of the conditions set forth
                             in the Merger Agreement unless the Merger
                                 Agreement has been terminated pursuant to its
                               terms or unless another time or date agreed
                              to in writing by the parties thereto; such
                               Closing is expected to occur on or about 30
March 2001  

"Companies Act" or the "Act"      the Companies Act 1985 (as amended)           

"Deutsche Bank"                   Deutsche Bank AG, London                      

"Directors" or "Board"            the directors of the Company, whose names are 
                                set out in paragraph 2(a) of Part IX of this
document    

"DLJ"                             DLJ Capital Funding, Inc.                     

"Effective Date"                  the date shown on the certificate of          
                                 arrangement issued by the director (appointed
                               from time to time under section 260, or any
                             successor section, of the CBCA) under the
                             CBCA giving effect to the Arrangement and
                                which is expected to be on or about 30 March
2001        

"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"                  the Shire Group as enlarged by the Merger     
with BioChem

"Exchangeco 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 Share Voting Event"   means any matter in respect of which holders  
                              of Shire Exchangeco Shares are entitled to
                                 vote as shareholders of the Exchangeco, other
                                 than an Exempt Exchangeco Share Voting Event,
                             and, for greater certainty, excluding any
                               matter in respect of which holders of Shire
                              Exchangeco Shares are entitled to vote (or
                          instruct the Trustee to vote) in their
                                capacity as Beneficiaries under (and as that
                               term is defined in) the Voting and Exchange
   Trust Agreement

"Exchangeco"                      Shire Acquisition Inc., a company             
                               incorporated under the laws of Canada and a
                    wholly-owned subsidiary of Shire

"Exchangeco Insolvency Event"     (i) the institution by Exchangeco of any      
                              proceeding to be adjudicated a bankrupt or
                               insolvent or to be wound up, or the consent
                       of Exchangeco to the institution of
                        bankruptcy, insolvency or winding-up
                                 proceedings against it, or (ii) the filing of
                             a petition, answer or consent seeking the
                                 dissolution or winding-up of Exchangeco under
                                 any bankruptcy, insolvency or analogous laws,
                          including without limitation under the
                                 Company's Creditors' Arrangement Act (Canada)
                         and the Bankruptcy and Insolvency Act
                             (Canada) and the failure by Exchangeco to
contest in  

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                                good faith any such proceedings commenced in
                           respect of Exchangeco within 30 days of
                             becoming aware thereof, or the consent by
                                 Exchangeco to the filing of any such petition
                          or to the appointment of a receiver in
                                 respect of Exchangeco, or (iii) the making by
                              Exchangeco of a general assignment for the
                             benefit of creditors, or the admission in
                                 writing by Exchangeco of its inability to pay
                              its debts generally as they become due, or
                                 (iv) Exchangeco not being permitted, pursuant
                               to solvency requirements of applicable law,
                  to redeem any Retracted Shares
"Executive Scheme"                the Shire Pharmaceuticals Executive Share     
                 Option Scheme (parts A and B)
                                means any matter in respect of which holders
                              of Shire Exchangeco Shares are entitled to
"Exempt Exchangeco Share          vote as shareholders of Exchangeco, in order  
Voting Event"                    to approve or disapprove, as applicable, any 
                              change to, or in the rights of the holders
                              of, the Shire Exchangeco Shares, where the
                              approval or disapproval, as applicable, of
                                 such change would be required to maintain the
                              equivalence of the Shire Exchangeco Shares
       and Ordinary Shares

"Extraordinary General Meeting" orthe extraordinary general meeting to approve, 
"EGM"                             inter alia, 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         

"HPB"                             Health Protection Branch of the Canadian      
      Ministry of Health

"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

"Interim Order"                   means the interim order of the Superior Court 
                                 of Quebec in respect of the Arrangement dated
    20 February 2001

"IPC"                             The Investment Performance Council            

"London Stock Exchange" or "LSE"  the 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 the Merger Agreement; all
                            references to Material Adverse Effect on
                               Shire being deemed to refer solely to Shire
                              and its subsidiaries without including its
                             ownership of BioChem and its subsidiaries
         after the Arrangement

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"Merger"                          the proposed merger of Shire with BioChem     
                                 pursuant to the terms of the Merger Agreement
       and the Arrangement

"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, as restated and amended on 21
 February 2001

"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"             up to 260,621,527 new Ordinary Shares to be   
                      issued pursuant to the Arrangement

"Official List"                   the Official List of the UK Listing Authority 

"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
         VIII of this document

"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
       IX of this document

"Retracted Shares"                the Shire Exchangeco Shares in respect of     
                            which a holder thereof has exercised the
                          right under the Arrangement to require
                              Exchangeco to redeem such Shire Exchangeco
Shares      

"Roberts"                         Roberts Pharmaceutical Corporation, a wholly- 
             owned subsidiary of Shire

"Roberts Stock Option Plans"      Roberts' Incentive Stock Option Plan,         
                           Roberts' 1996 Equity Incentive Plan and
                         Roberts' Restricted Stock 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, 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 "Consideration Shares"                                                     

                             the New Ordinary Shares, new ADSs and new
                                 Shire Exchangeco Shares to be issued pursuant
                               to the Merger Agreement and the Arrangement

"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" or "Group"          Shire and its subsidiaries and subsidiary     
undertakings

"Shire Laboratories" or "SLI"     Shire Laboratories Inc., a wholly-owned       
             subsidiary of the Company

"Shire Liquidation Event"         (i) any determination by the Board to         
                                institute voluntary liquidation, dissolution
                             or winding-up proceedings with respect to
                                Shire or to effect any other distribution of
                              assets of Shire among its shareholders for
                             the purpose of winding-up its affairs, or
                                (ii) receipt by Shire of notice of, or (iii)
                          Shire otherwise becoming aware of, any
                             instituted claim, suit, petition or other
                               proceedings with respect to the involuntary
                             liquidation, dissolution or winding-up of
                                Shire or to effect any other distribution of

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                                assets of Shire amongst shareholders for the
                              purpose of winding-up its affairs, in each
                             case where Shire has failed to contest in
                               good faith any such proceeding commenced in
                               respect of Shire within 30 days of becoming
 aware thereof

"Shire Shareholders"              the holders of Ordinary Shares                

"SHL"                             Shire Holdings Limited, a wholly-owned        
             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 in the capital of   
                               the Company to be issued, credited as fully
                                 paid, pursuant to the Merger and Arrangement,
                                as more fully described in Part VIII of this
                     document and in the notice of the
                                Extraordinary General Meeting set out at the
        end of this document

"SPL"                             Shire Pharmaceuticals Limited, a wholly owned 
             subsidiary of the Company

"SRI Plan"                        the 1993 Plan and the 1995 Plan               

"SRI"                             Shire Richwood Inc., a wholly-owned           
             subsidiary of the Company

"Stock Purchase Plan"             the Shire Pharmaceuticals Group plc Employee  
       Stock Purchase Plan

"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     

"WestLB Panmure"                  WestLB 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 (L)1: US$1.44.            

Where translations are stated with reference to a specific date, the exchange   
rates used are those prevailing on those dates.                                 

Unless stated otherwise, "US$" or "$" refers to the currency of the United      
States of America, "CAN$" refers to the currency of Canada and "(L)" refers to  
the currency of the United Kingdom.                                             

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Glossary

Product, compound or              Description and/or use                        
technical term                                                                  

Acute Myelogenous Leukemia (AML)  Progressive malignant disease of the non-     
                           lymphocyte groups of white blood cells.

ADHD                              Attention Deficit Hyperactivity Disorder, a   
                              CNS disorder characterised by inattention,
                        implusivity and hyperactivity. It is
                    primarily diagnosed in children.

m opioid receptor                 a particular type of receptor. Each type of   
                             receptor reacts to different opioids in a
  different way.

Adjuvant                          A substance that, when added to a medicine,   
                  speeds or improves its action.

Agonist                           A drug that has affinity for and stimulates   
               activity at cell receptors.

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.

ALT                               Alanine aminotransferase. An enzyme that      
                          catalyses the transfer of nitrogen for
excretion.  

Analgesic                         A medicine which relieves pain.               

Antiemetic                        A medicine that alleviates nausea and         
vomiting.   

Antigen                           Any substance which causes an immune system   
response.   

Anti-infective                    Designed to combat infectious diseases caused 
                                by micro organisms such as bacteria, viruses
and fungi.  

Antiretroviral                    Designed to combat the development of HIV/    
                     AIDS after exposure to the virus.

Antiviral                         Stimulates cellular defences against viruses  

AZT                               An antibiotic used to treat infection by HIV. 

Bacteremia                        The presence of viable bacteria circulating   
       in the bloodstream.

Bioavailability                   The degree to which a drug or other substance 
                                becomes available to the target tissue after
   administration.

Bi-polar disease                  A manic depressive disorder.                  

Carbatrol                         Shire's patented formulation of the compound  
                                carbamazepine, for the treatment of epilepsy
             and trigeminal neuralgia.

Carcinoma                         A tumour that develops from internal and      
                                 external surface cells, such as the inside of
                             the cheek or the lining of the intestine.

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Central Nervous System Disorders                                                
("CNS")                           Disorders of the brain and spinal cord.       

Cirrhosis                         A liver disease leading to fibrosis and       
 inflammation.

Cisplatin                         A chemical that prevents the development of   
                                 abnormal tissue growth and may enhance immune
responses.  

Clinical isolate                  A pure culture of a micro-organism.           

CML-BP                            Chronic Myelogenous Leukemia in blastic phase 
                             - the later stage of a slowly progressing
     myeloid leukemia.

Conjugate vaccine                 A combination of two or more vaccines in a    
   single vaccine.

CPMP                              The Committee on Proprietary Medicinal        
Products.   

Cytology                          The study of cells.                           

Cytotoxicity                      A toxic or poisonous effect on cells.         

Diagnostics                       The identification of distinctive symptoms or 
                 characteristics of a disease.

Dioxolane nucleoside              A particular form of nucleoside using the     
                         organic chemistry compound dioxolane.

EMEA                              European Agency for the evaluation of         
        healthcare products.

Epilepsy                          An episodic disturbance of consciousness      
                            during which generalised convulsions may
occur.      

FDA                               US Food and Drug Administration.              

Fibrosis                          The creation of dense, firm scar tissue in    
                         response to previous tissue damage or
disease.    

Galantamine                       One of Shire's drug candidates; a             
                            cholinesterase inhibitor for Alzheimer's
                             disease which has been for marketing in a
                             number of countries under the proprietary
 name Reminyl.

Gastroenterology                  The diagnosis and treatment of diseases and   
                               disorders affecting the stomach, intestines
          and associated organs.

Generic drug                      A non-branded prescription medicine.          

Haematology/Haematologic          The branch of physiology which relates to     
blood.      

Hepatitis B                       A disease which results from the hepatitis B  
                               virus infection and which attacks the liver
                         often causing cirrhosis of the liver.

Heptavalent                       A chemistry term for a substance having seven 
                          units of attractive force or affinity.

Histology                         The science of organic tissues; that brand of 
                                 anatomy or of biology which is concerned with
                                 the minute structure of the tissues of living
                                 species. In the context of liver histology it
                                refers to the tissue structure of the liver.

HIV/AIDS                          Human Immune deficiency Virus/Acquired Immune 
                              Deficiency Syndrome. A virus which attacks
                         the immune system leaving the patient
                               vulnerable to other diseases and infections
     (e.g. pneumonia).

HPB                               Canadian Health Protection Branch.            

Hypernephroma                     A common form of kidney cancer.               

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Hyperphosphataemia                An excess of phosphates in the blood.         

Hypotension                       Blood pressure below the expected normal      
range.      

IND                               Investigational New Drug. An IND application  
                                 is submitted to the FDA to request permission
                 to conduct studies in humans.

Indication                        A disease or system target for a drug.        

Inflammatory bowel disease        Ulcerative colitis and Crohn's disease.       

In vitro                          In vitro means, literally, "in glass"; a      
                               biological or biochemical process occurring
              outside a living organism.

Immunogenicity                    Describes the quality of a substance which is 
                              able to provoke an immune response against
                            the substance. A measure of how able the
                                substance is at provoking an immune response
against it. 

Immunostimulant                   Any drug or chemical which increases the      
                       body's immune response to antigens.

Immunotherapeutic                 A form of therapy that treats disease by      
                             stimulating the body's own immune system.

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.

Lead optimisation                 The process by which the main active compound 
                              in a drug is developed or enhanced to meet
                          the required criteria for development.

Leukemia                          A cancer-like disease of the white blood      
cells.      

Log unit                          A unit on a logarithmic scale.                

Marketing authorisation           A grant of licence by a governmental          
                             regulatory authority giving permission to
                    market a pharmaceutical product.

Melanoma                          A type of skin cancer that develops from the  
                                 cells in the skin which produce melanin (skin
pigment).   

Meningococcal                     Pertaining to a particular genus of bacteria  
                          that are a common cause of meningitis.

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.

Mitochondrial toxicity            A toxic or poisonous effect on the part of a  
                         cell responsible for respiration (the
          production of energy).

Mucosal immunity                  An immunity in the mucous membrane.           

Mucositis                         Inflammation of a mucous membrane. Oral       
                         mucositis is a common complication of
                       chemotherapy and radiation therapy.

Mutant virus                      A virus which differs from the wild-type      
virus.      

Myelosuppression                  Depression of the bone marrow functions (such 
                           as the formation of red blood cells and
                                 platelets), usually as a complication of drug
therapy.    

Myelotoxicity                     Toxicity or destruction of the bone marrow.   

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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.

Neuralgia                         Neuralgia is the sudden and recurrent attacks 
                      of pain, of short duration, in the
                     distribution of the nerve fibres.

Neuropathy                        Disease of the nervous system.                

NNRTI                             Non-Nucleoside Analogue Reverse Transcriptase 
Inhibitors. 

NRTI                              Nucleoside Analogue Reverse Transcriptase     
                         Inhibitors. A synthetic molecule that
                             suppresses the ability of a retrovirus to
            make DNA from viral RNA.

Nucleoside                        A molecule in which a purine or pyrimidine    
                     base is bound to a pentose sugar.

Nucleoside analogue               A synthetic molecule that resembles a         
                            naturally occurring nucleoside, but that
                             lacks a bond site needed to link it to an
        adjacent nucleotide.

Oncology                          The branch of medical science relating to     
tumours.    

Opioid                            Opioids are a group of drug that have         
                             molecular structures close to those drugs
                              derived from opium. As such they have many
                         similar properties, e.g. they provide
                                 analgesia (pain relief) and cause respiratory
                            depression as one of their side effects.
                         Opioids include morphine and codeine.

Opioid receptor agonist           A compound that elicits a response from an    
    opioid receptor.

Orthostatic hypotension           A drop in blood pressure precipitated by      
                                changes in body position (e.g. rising from a
bed).       

Osteoarthritis                    Non-inflammatory degenerative joint disease   
                             occurring chiefly in older persons. It is
                      accompanied by pain and stiffness,
                          particularly after prolonged activity.

Osteoporosis                      A disease in which calcium and protein are    
                            progressively lost from bones until they
                          become brittle and liable to fracture.

Otitis media                      Infection and inflammation of the middle ear  
 and ear drum.

Paclitaxel                        A drug used as a chemotherapy agent.          

Parkinson's disease               A progressive neurological disease leading to 
                        movement difficulties and eventually
dementia.   

Peptide                           A compound of two or more amino acids with    
                       particular bonding characteristics.

Pharmacokinetics                  This is the science which describes           
                             quantitatively the uptake of drugs by the
                        body, their biotransformation, their
                             distribution, metabolism, and elimination
  from the body.

Pharmacological                   The branch of medical science relating to     
                                 studies of drugs and their uses in animals or
humans.     

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.

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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 monitor drug use in
         the clinical setting.

Phenotype                         The physical appearance/observable            
                   characteristics of an organism.

Pili                              Thread-like structures present on some        
                                 bacteria used to adhere bodies to one another
       or to animal cells.

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.         

Polymerase                        An enzyme which acts as a catalyst for        
replication.

Pneumococcal                      Pertaining to a particular genus of bacteria  
                         that are a common cause of pneumonia.

Pre-clinical trials phase         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.                 

Protease inhibitors               A protease is an enzyme that catalyses the    
                               break down of proteins. Protease inhibitors
                               suppress this effect. They are used in this
                                context to prevent HIV protease from working
                            thereby preventing the production of new
              infectious viral articles.

Receptor                          Either a nerve-ending or, the site in a cell  
                               that combines with a chemical to alter cell
functions.  

Recombinant                       A cell or an individual with a new            
                              combination of genes not found together in
  either parent.

Refractory acute                  A disease of short, severe duration that does 
             not respond to treatment.

Registration                      The legal process by which a drug is approved 
                               by governmental agencies for marketing in a
                        given country or group of countries.

Reverse cirrhosis                 The opposite of cirrhosis namely the          
                                 contraction or shrinking of an organ (usually
         refers to the liver).

Reverse transcriptase inhibitors  A drug that suppresses the enzyme which can   
                          synthesise DNA on an RNA template (the
                      process of reverse transcription).

Septicemia                        Blood poisoning.                              

Seroconversion rates              The rate of development of antibodies in      
                          response to infection or immunisation.

Serotype                          A grouping of micro-organisms into a type     
                             based on serological criteria, namely the
          antigens they contain.

Solid Tumour                      A cancer that originates in organ or tissue   
                               other than bone marrow or the lymph system.

Stroke                            The term denoting the sudden development of   
                                 focal neurological defects usually related to
                 impaired cerebral blood flow.

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Systemic immunity                 An immunity not confined to a particular      
              organ or part of the body.

Thrombocythemia                   A condition of overproduction of blood        
                               platelet cells without a recognisable cause
                               often leading to the formation of dangerous
                 blood clots or haemorrhaging.

Thrombolytic agent                A drug used to dissolve blood clots.          

Transcriptase inhibitors          A drug which suppresses the first step in     
    gene expression.

Ulcerative colitis                An inflamation of the colon and the rectum.   

WHO                               World Health Organisation                     

Wild-type virus                   The naturally-occurring, normal, non-mutated  
       version of a virus.

YMDD                              A variant (mutation) of the Hepatitis B       
virus.      

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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 35 New Broad Street,  
London EC2M 1SQ, England on 29 March 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             
(L)20,000,000 to (L)40,000,000 by the creation of 400,000,000 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
1 March 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 (or any duly authorised Committee thereof) be and are hereby
 authorised to take all necessary or appropriate steps to complete the
same and give effect thereto with such modifications, variations,   
  revisions, waivers or amendments (not being modifications, variations,
revisions, waivers or amendments which are in the opinion of the    
   Directors or any such Committee, of a material nature) as the Directors
or any such Committee may deem necessary, expedient or appropriate; 

(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)17,221,000 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)   such existing authorised but unissued ordinary shares of 5p each in the   
capital of the Company be and are hereby divided into shares of a   
nominal value of 0.00001p each (such shares being designated the    
"Special Voting Shares") as will 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 shares;               

(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 higher of
1p and 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;                                                               

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(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

    (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 the articles of association of the Company
    as in force at the date of this resolution which shall be a variation of
    the rights of the Special Voting Shares shall 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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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, 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 as if section 89(1) of the Companies Act 1985 did not apply to      
such allotment provided that this power:                                        

(A)   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         

(B)   shall be limited to:                                          

       (i)   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:                

                 (a)    to deal with equity securities representing fractional
entitlements;                 

                 (b)    to deal with ordinary shares represented by depositary
receipts; and                 

             (c)    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)  allotments of equity securities for cash otherwise than
               pursuant to paragraph (a) up to an aggregate nominal amount
of (L)1,279,868.                            

Dated: 1 March 2001                                                             

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) Pursuant to Regulation 34 of the Uncertificated Securities Regulations      
1995, the time by which a person must be entered on the register of     
  members of the Company in order to have the right to attend or vote at the
Extraordinary General Meeting is 6.00pm on 27 March 2001. If the        
Extraordinary General Meeting is adjourned, the time by which a person  
  must be entered on the register of members of the Company in order to have
 the right to attend or vote at the adjourned meeting is 6.00pm on the day
prior to the day preceding the date fixed for the adjourned meeting.    
 Changes to entries on the register of members of the Company after 6.00pm
on 27 March 2001 will be disregarded in determining the rights of any   
person to attend or vote at the meeting.                                

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