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| <NonNumbericText> <div style="font-size:12pt"><p>4. Termination of Duramed Pharmaceuticals, Inc. (“Duramed”) collaboration agreement<br /><br />In August 2006, Shire and Duramed, a subsidiary of Teva Pharmaceutical Industries Ltd, (“Teva”) entered into an agreement related to SEASONIQUE, a number of products using Duramed’s transvaginal ring technology and other oral products (the “Collaboration Products”). Under this agreement, Shire was required to reimburse Duramed for US development expenses incurred on Collaboration Products up to a maximum of $140 million over eight years from September 2006, and Shire had the right to commercialize these products in a number of markets outside of North America, including the larger European markets.<br /><br />On February 24, 2009 Shire and Duramed amended this agreement such that it terminated on December 31, 2009. Pursuant to this amendment, Shire agreed to return to Duramed its rights under the agreement effective February 24, 2009. Shire also agreed to reimburse Duramed for incurred US development expenditures in 2009 up to a maximum of $30.0 million. Shire has no rights with respect to the products on which such development expenditures are incurred. In addition, Shire agreed to a one-time payment to Duramed of $10.0 million, (which was paid during the first quarter of 2009), and to forego royalties receivable from Barr Laboratories, Inc. (“Barr”) (a subsidiary of Teva) and cost of goods otherwise payable by Barr to Shire in 2009 under the License Agreement between the parties for the supply of authorized generic ADDERALL XR, up to a maximum of $25.0 million. During the year to December 31, 2009 the Company recorded a charge of $62.9 million to research and development to reflect the cash payment made in the first quarter of 2009 and other termination related costs. <br /><br />A reconciliation of the contract termination liability is presented below: </p><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="34" width="187" align="left">Year to December 31, 2009</td><td height="34" width="120" align="right">Amount charged to R&D </td><td height="34" width="96" align="right">Amount paid </td><td height="34" width="131" align="right">Utilization of reserve</td><td height="34" width="131" align="right">Closing liability</td></tr><tr><td height="17" width="187" align="left"> </td><td height="17" width="120" align="right">$’M</td><td height="17" width="96" align="right">$’M</td><td height="17" width="131" align="right">$’M</td><td height="17" width="131" align="right">$’M</td></tr><tr><td height="11" width="187" align="left"> </td><td height="11" width="120" align="right">______________________</td><td height="11" width="96" align="right">_________________</td><td height="11" width="131" align="right">_____________________</td><td height="11" width="131" align="right">_______________</td></tr><tr><td height="11" width="187" align="left"> </td><td height="11" width="120" align="right"> </td><td height="11" width="96" align="right"> </td><td height="11" width="131" align="right"> </td><td height="11" width="131" align="right"> </td></tr><tr><td height="17" width="187" align="left">Contract termination costs</td><td height="17" width="120" align="right">62.9 </td><td height="17" width="96" align="right">(27.9)</td><td height="17" width="131" align="right">(25.0)</td><td height="17" width="131" align="right">10.0 </td></tr><tr><td height="11" width="187" align="left"> </td><td height="11" width="120" align="right">______________________</td><td height="11" width="96" align="right">_________________</td><td height="11" width="131" align="right">_____________________</td><td height="11" width="131" align="right">_______________</td></tr></table><p>The charge of $62.9 million has been included within the Specialty Pharmaceuticals segment in the Company’s segmental analysis, see Note 26.</p></div> </NonNumbericText> |
| <NonNumericTextHeader> 4. Termination of Duramed Pharmaceuticals, Inc. (“Duramed”) collaboration agreementIn August 2006, </NonNumericTextHeader> |
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