This excerpt taken from the SHPGY 10-K filed Mar 1, 2006.
Aggregate Contractual Obligations.
As at December 31, 2005, the Companys contractual obligations were as follows:
(iii) TKT shareholders asserting appraisal rights
As at December 31, 2005, appraisal rights had been asserted in respect of approximately 11.3 million shares of TKT common stock. For further information see ITEM 3: Legal proceedings. As at December 31, 2005, the Company recorded a liability of $419.9 million based on the merger consideration of $37 per share for the 11.3 million shares outstanding at that time plus a provision for interest of $7.7 million that may be awarded by the Court (see Note 26 to the Companys consolidated financial statements contained in Part IV of this Annual Report).
Until such time as the appraisal process is complete the Company is unable to determine the extent of its liability. For every $1 increase/decrease in the merger consideration applicable to those TKT shareholders who have asserted appraisal rights, the total estimated purchase price would increase/decrease by approximately $11.3 million.
The contractual obligations table above does not include payments yet to fall due upon the occurrence of certain milestones and other contractual commitments. The most significant payments are as follows:
In connection with the Companys acquisition in 2003 from Noven of the worldwide sales and marketing rights to DAYTRANA, Shire has an obligation to make certain payments on the achievement of the following milestones: $50 million upon FDA approval of the product, which will be capitalized and amortized over its useful economic life; and up to $75 million, linked to future sales performance. An approvable letter was received from the FDA on December 23, 2005. Final regulatory approval is currently expected to be in 2006.
In connection with the Companys collaboration with New River to commercialize NRP104, the Company has an obligation to make certain payments on the achievement of the following milestones: $50 million upon the FDAs acceptance of filing of the NDA; up to $300 million following the first commercial sale of the product, depending on the characteristics of the approved product labeling; $100 million on achieving a significant sales target; and $5 million following the first commercial sale in certain specified EU markets. An upfront payment of $50 million was expensed as an R&D cost during the first quarter of 2005. The NDA for NRP104 was filed on December 6, 2005 and accepted for review by the FDA on January 26, 2006, triggering the $50 million milestone payment, which has now been paid.
FOSRENOL patent rights
In connection with the Companys purchase of the global patents for FOSRENOL from AnorMed Inc. in 2004, the Company has outstanding commitments to pay AnorMED Inc. $6 million when FOSRENOL is approved in certain European countries and $6 million upon receipt of regulatory approval in Japan.
Other R&D commitments
As at December 31, 2005, the Company had commitments of $18.0 million on achievement of specified milestones from products under development in licensed from third parties of which $6.6 million is committed to be paid in 2006.
This excerpt taken from the SHPGY 10-K filed Mar 15, 2005.
Aggregate Contractual Obligations.
As of December 31, 2004 the Companys contractual obligations were as follows:
(i) During the year to December 31, 2004 the Company repurchased $370.1 million of the $370.2 million outstanding convertible loan notes at par. The repayment was made out of available funds, and the balance of outstanding notes is shown as long-term debt.
(ii) The Company leases certain properties, motor vehicles and equipment under operating leases expiring through 2015. During the year to December 31, 2004 the Company signed an eleven-year operating lease on a property in Wayne, Pennsylvania, and terminated certain operating leases relating to its manufacturing facility in Owings Mills, Maryland.
(iii) Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding and that specify all significant terms, including open purchase orders. Shire expects to fund the following commitments with cash flows from operations:
Wayne, Pennsylvania fit out
The Company is in the process of fitting out its new US headquarters at Wayne, Pennsylvania. At December 31, 2004 the Company had an outstanding commitment of $20.4 million relating to this refurbishment, which is expected to be incurred in 2005.
The Company has committed to the expansion and modification of its manufacturing facility at Owings Mills, Maryland to facilitate the production of FOSRENOL. The Company has committed to spend a further $5.1 million by the end of 2005 and has an additional commitment of $4.4 million for the design and construction of a technology center at Owings Mills, Maryland which is expected to be incurred in 2004.
Interests in companies and partnerships
As of December 31, 2004, the Company had outstanding commitments to subscribe for interests in companies and partnerships for amounts totaling $22.0 million (2003: $8.0 million) of which $4.2 million is committed to in 2005 and a further $13.7 million could be payable in 2005, depending on the timing of capital calls.
(iv) Included in other long-term liabilities recognized on the balance sheet are the following liabilities:
In March 2004, the Company terminated its co-promotion arrangement for the UK and Ireland with Janssen-Cilag Limited and acquired the exclusive commercialization rights to REMINYL in those markets. In connection with this agreement the Company paid $11 million in the year to December 31, 2004 and a further $19 million will be paid in 2005.IDB
As part of the sale of the vaccines business on September 9, 2004, Shire entered into an agreement to provide IDB with a loan facility of up to $100 million, which can be drawn down over the four years following completion. As of December 31, 2004 IDB had drawn down $56.8 million under the facility leaving an outstanding commitment of $43.2 million, included in other current liabilities on the balance sheet. The Company expects to meet further draw-downs with cash from operations during 2005.Other
The Company has assumed that other long-term liabilities, which comprise primarily insurance provisions ($9.2 million), SERP liabilities ($5.3 million) and long-term bonuses ($4.4 million), are due before 2008.
(v) The total does not include payments due on certain milestones and other commitments. The most significant payments are as follows:
In connection with the Companys purchase of MTS/METHYPATCH in 2003, the Company has an obligation to make certain payments on the achievement of milestones. This will require $50 million upon regulatory approval of the product and up to $75 million linked to the future sales performance. The Company expects to meet these payments with cash from operations. The Company expects to resubmit MTS/METHYPATCH for approval in 2005.
FOSRENOL patent rights
In connection with the Companys purchase of the global patents for FOSRENOL, Shire will pay AnorMED Inc. $6 million when it is approved in the relevant European countries and $6 million upon receipt of regulatory approval in Japan. The Company expects to meet these payments with cash from operations.
As previously disclosed, Shire is implementing a new business model. The cost of the reorganization in 2004 was $48.5 million and is estimated to be approximately $12 million in 2005. The Company expects to meet these payments with cash from operations. The cost of the reorganization is shown in more detail in Note 3 to the Companys consolidated financial statements contained in Part IV of this Annual Report.