content: FORM 10-Q
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549
  
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                    ACT OF 1934
  
  For the Quarter Ended June 30, 2001
  
                           Commission File Number: 0-29630
  
                           SHIRE PHARMACEUTICALS GROUP PLC
               (Exact name of registrant as specified in its charter)
  
            England and Wales                                 N.A.
      (State or other jurisdiction                      (I.R.S. Employer
    of incorporation or organization)                 Identification No.)
  
      Hampshire International Business Park,
    Chineham, Basingstoke, Hampshire, England              RG24 8EP
    (Address of principal executive offices)              (Zip Code)
  
                                   44 1256 894 000
                (Registrant's telephone number, including area code)
  
  Indicate by check mark whether the registrant (1) has filed all reports required
  to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
  the preceding 12 months, and (2) has been subject to such filing requirements
  for the past 90 days.
                                                            Yes  X    No  _
  
  Indicate the number of shares outstanding of each of the issuer's classes of
  Common Stock, as of the latest practical date.
  
              Class                         Outstanding at July 31, 2001
  
  Common Stock: Ordinary Shares                     473,372,437
  
  
  <PAGE>
  
  
  
  
  
  THE "SAFE HARBOR" STATEMENT UNDER SECTION 21E OF THE SECURITIES EXCHANGE ACT OF
  1934 (AMENDED) AND SECTION 27A OF THE SECURITIES ACT OF 1933 (AMENDED). The
  statements in this Form 10-Q that are not historical facts are forward-looking
  statements that involve risks and uncertainties, including but not limited to,
  risks associated with the inherent uncertainty of pharmaceutical research,
  product development and commercialization, the impact of competitive products,
  patents, and other risks and uncertainties, including those detailed from time
  to time in periodic reports, including the Annual Report filed on Form 10-K by
  Shire with the Securities and Exchange Commission.
  
  
  
  
  
  
  <PAGE>
  
  
  PART I.  FINANCIAL INFORMATION
  
  ITEM 1.  Financial Statements
  
  <TABLE>
  <CAPTION>
                           SHIRE PHARMACEUTICALS GROUP PLC
                             CONSOLIDATED BALANCE SHEETS
           (In thousands of U.S. dollars, except share and per share data)
                                     (Unaudited)
  
                                                                                          June 30,          December 31,
                                                                                              2001                  2000
  ASSETS                                                                               -----------           -----------
  Current assets:
  <S>                                                                                       <C>                   <C>
  Cash and cash equivalents                                                                 72,988                93,266
  Marketable securities and other current asset investments                                230,337               370,425
  Accounts receivable, net                                                                 124,981               144,175
  Inventories, net                                                                          48,104                49,612
  Deferred tax asset                                                                         6,641                26,990
  Prepaid expenses and other current assets                                                 26,639                11,385
                                                                                      ------------          ------------
  Total current assets                                                                     509,690               695,853
  
  Investments                                                                               60,307                74,314
  Property, plant and equipment, net                                                       114,495               131,224
  Intangible assets, net                                                                   560,691               578,436
  Net assets of business transferred under contractual arrangements                          3,934                35,850
  Deferred tax asset                                                                        12,860                 6,543
  Other assets                                                                              24,109                26,275
                                                                                      ------------          ------------
  Total assets                                                                           1,286,086             1,548,495
                                                                                      ------------          ------------
  LIABILITIES AND SHAREHOLDERS' EQUITY
  Current liabilities:
  Current instalments of long-term debt                                                      4,518                81,811
  Accounts and notes payable                                                               170,985               113,446
  Other current liabilities                                                                  3,342                32,593
                                                                                      ------------          ------------
  Total current liabilities                                                                178,845               227,850
  
  Long-term debt, excluding current instalments                                              4,057               132,063
  Other long-term liabilities                                                               12,439                14,196
                                                                                      ------------          ------------
  Total liabilities                                                                        195,341               374,109
                                                                                      ------------          ------------
  Shareholders' equity:
  Common stock, 5p par value: 800,000,000 shares authorized; and
  461,391,822 shares issued and outstanding (2000: 257,088,451)                             35,518                21,035
  Exchangeable shares: 10,038,008 shares issued and outstanding (2000:
  nil)                                                                                     459,880                     -
  Additional paid-in capital                                                               783,185             1,228,705
  Accumulated other comprehensive losses                                                  (90,307)              (60,550)
  Accumulated deficit                                                                     (97,531)              (14,804)
                                                                                      ------------          ------------
  Total shareholders' equity                                                             1,090,745             1,174,386
                                                                                      ------------          ------------
  Total liabilities and shareholders' equity                                             1,286,086             1,548,495
                                                                                      ------------          ------------
  </TABLE>
  
  The balance sheet as at December 31, 2000 has been restated to include the
  results of BioChem Pharma Inc., the merger with whom was accounted for as a
  pooling of interests in accordance with APB 16, Accounting for Business
  Combinations. The accompanying notes are an integral part of these financial
  statements.
  
  <PAGE>
  
  
  
  <TABLE>
  <CAPTION>
                           SHIRE PHARMACEUTICALS GROUP PLC
                          CONSOLIDATED STATEMENTS OF INCOME
           (In thousands of U.S. dollars, except share and per share data)
                                     (Unaudited)
  
  
                                                    3 months to      3 months to       6 months to     6 months to
                                                  June 30, 2001         June 30,              June            June
                                                                            2000               30,              30,
                                                                                              2001             2000
                                                   ------------     ------------      ------------     ------------
  <S>                                                   <C>              <C>               <C>              <C>
  Product sales                                         171,705          121,363           325,871          237,240
  Licensing and development                                 244            4,371             3,286            9,281
  Royalties                                              38,429           33,653            70,690           63,663
  Other revenues                                            471              176               746              474
                                                   ------------     ------------      ------------     ------------
  Total revenues                                        210,849          159,563           400,593          310,658
  
  Costs and expenses:
  Cost of revenues                                     (27,709)         (22,640)          (56,985)         (45,097)
  Research and development                             (41,827)         (39,253)          (79,511)         (77,482)
  Selling, general and administrative
  (inclusive of stock option compensation
  charge of  $232,000, $236,000, $2,352,000
  and $23,482,000 respectively)
                                                       (76,006)         (56,284)         (145,791)        (129,296)
  Asset impairments and restructuring charges
                                                       (85,447)                -          (85,447)                -
  Merger transaction expenses                          (83,470)                -          (83,470)                -
  (Losses)/gains on dispositions of assets              (8,098)              265           (8,098)              265
                                                   ------------     ------------      ------------     ------------
  Total operating expenses                            (322,557)        (117,912)         (459,302)        (251,610)
                                                   ------------     ------------      ------------     ------------
  Operating (loss)/income                             (111,708)           41,651          (58,709)           59,048
  
  Interest income                                         4,485            4,724             9,635            8,195
  Interest expense                                      (1,684)          (3,974)           (4,682)          (8,388)
  Other income                                            2,401           95,057             2,653          102,453
                                                   ------------     ------------      ------------     ------------
  Total other income, net                                 5,202           95,807             7,606          102,260
                                                    -----------      -----------      ------------     ------------
  (Loss)/income before income taxes                   (106,506)          137,458          (51,103)          161,308
  
  Income taxes                                         (17,685)          (9,192)          (31,624)         (20,082)
                                                   ------------     ------------      ------------     ------------
  Net (loss)/income                                   (124,191)          128,266          (82,727)          141,226
                                                   ------------     ------------      ------------     ------------
  
  Net (loss)/income per share:
  Basic                                                 (25.3c)            26.6c           (16.9c)            29.5c
  Diluted                                               (25.3c)            25.9c           (16.9c)            28.8c
  
  Weighted average number of shares:
  Basic                                             489,977,184      482,234,443       489,205,296      479,509,446
  Diluted                                           489,977,184      496,376,062       489,205,296      492,146,693
  </TABLE>
  
  The results for the three and six months ended June 30, 2000 have been restated
  to include the results of BioChem Pharma Inc., the merger with whom was
  accounted for as a pooling of interests in accordance with APB 16, Accounting
  for Business Combinations.
  
  <PAGE>
  
  
  <TABLE>
  <CAPTION>
                           SHIRE PHARMACEUTICALS GROUP PLC
                   CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                           (In thousands of U.S. dollars)
                                     (Unaudited)
  
                                                                                 6 months to   6 months to
                                                                                    June 30,      June 30,
                                                                                        2001          2000
                                                                              --------------- -------------
  Cash flows from operating activities:
  <S>                                                                               <C>            <C>
  Net (loss)/income                                                                 (82,727)       141,226
  Adjustments to reconcile net (loss)/income to net cash provided by
  operating activities:
  Depreciation and amortization                                                       22,027        18,670
  Stock option compensation                                                            2,352        23,482
  Tax benefit of stock option compensation charged directly to equity                  3,307         9,829
  Non cash exchange gains and losses                                                 (5,030)       (1,656)
  Write-down of long term investments                                                 24,937             -
  Write-down of intangible assets                                                     20,890             -
  Write-down of net assets of business transferred under contractual
  arrangements                                                                        30,811             -
  Gain on sale of long term investments                                                    -     (100,516)
  Loss/(gain) on sale of fixed assets                                                  8,098         (265)
  Decrease/(increase) in accounts receivable                                          17,735      (29,287)
  Decrease/(increase) in inventory                                                     1,671       (3,344)
  Decrease in deferred tax asset                                                      13,768         1,535
  Increase in prepayments and other current asset investments                       (13,414)       (6,642)
  Decrease in other assets                                                             2,228        10,435
  Increase/(decrease) in accounts and notes payable                                   34,957      (21,596)
  Decrease in other current liabilities                                              (7,186)      (29,862)
  Decrease in other long term liabilities                                            (1,757)         (823)
                                                                              --------------- ---------------
  Net cash provided by operating activities                                           72,667        11,186
                                                                              --------------- ---------------
  Cash flows from investing activities:
  Sale of marketable securities                                                       38,754        43,970
  Decrease/(increase) in cash placed on short-term deposit                            98,342      (22,029)
  Purchase of temporary investments                                                        -      (10,954)
  Maturity of long term investments                                                        -       114,006
  Purchase of long term investments                                                 (11,107)       (7,985)
  Expenses of acquisition of subsidiaries                                                  -         (657)
  Purchase of intangible assets                                                     (32,035)      (15,283)
  Purchase of fixed assets                                                           (6,044)      (15,897)
  Purchase of other assets                                                               547         (543)
  Proceeds from sale of long term investments                                              -        72,593
  Proceeds from sale of fixed assets                                                   1,200        10,265
  Collection on notes receivable                                                           -           748
                                                                              --------------- ---------------
  Net cash provided by investing activities                                           89,657       168,234
                                                                              --------------- ---------------
  
  Cash flows from financing activities:
  Movements on long term debt, capital leases and notes                            (201,876)       (2,826)
  Proceeds from issue of common stock, net of expenses                                  (17)         5,101
  Proceeds from exercise of options                                                   23,201        38,178
                                                                              --------------- --------------
  Net cash (used in)/provided by financing activities                              (178,692)        40,453
                                                                              --------------- --------------
  <PAGE>
  
  
  Effect of foreign exchange rate changes on cash and cash equivalents               (3,910)       (4,416)
  Cash flows used in discontinued operations                                               -       (1,728)
                                                                              --------------- --------------
  Net (decrease)/increase in cash and cash equivalents                              (20,278)       213,729
  Cash and cash equivalents at beginning of period                                    93,266       102,503
                                                                              --------------- --------------
  Cash and cash equivalents at end of period                                          72,988       316,232
                                                                              --------------- --------------
  </TABLE>
  
  The cash flows for the six months ended June 30, 2000 have been restated to
  include the cash flows of BioChem Pharma Inc., the merger with whom was
  accounted for as a pooling of interests in accordance with APB 16, Accounting
  for Business Combinations.
  
  
  
  
  <TABLE>
  <CAPTION>
                CONSOLIDATED STATEMENT OF COMPREHENSIVE (LOSS)/INCOME
                           (In thousands of U.S. dollars)
                                     (Unaudited)
  
  
                                                     3 months to       3 months to      6 months to     6 months to
                                                   June 30, 2001     June 30, 2000    June 30, 2001   June 30, 2000
                                                    ------------      ------------     ------------    ------------
  <S>                                                  <C>                 <C>             <C>              <C>
  Net (loss)/income                                    (124,191)           128,266         (82,727)         141,226
  Foreign currency translation adjustments                 2,609          (22,677)         (29,563)        (25,788)
  Unrealized holding gains/(losses) on
  marketable securities and non-current
  investments                                                 14             2,618            (196)           4,047
                                                    ------------      ------------     ------------    ------------
  Comprehensive (loss)/income                          (121,568)           108,207        (112,486)         119,485
                                                    ------------      ------------     ------------    ------------
  </TABLE>
  
  There are no tax effects related to the items included above.
  
  
  
  <PAGE>
  
  
                           SHIRE PHARMACEUTICALS GROUP PLC
                   NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
  
  1.   Summary of Significant Accounting Policies
  
  a) Description of Operations and Principles of Consolidation
  
  Shire is a fast growing international specialty pharmaceutical company with a
  strategic focus on three therapeutic areas, central nervous system disorders,
  oncology and antivirals, and on vaccines.
  
  The Company has a global sales and marketing infastructure with its own direct
  marketing capability in the U.S., Canada, the U.K. and the Republic of Ireland,
  France, Germany, Italy and Spain. Shire also covers the other significant
  pharmaceutical markets indirectly through distributors. The business is managed
  within three operating segments: U.S., International and Global Research and
  Development. Within these 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.
  
  In the U.S., the Company's principal products include Adderall for the treatment
  of Attention Deficit Hyperactivity Disorder, Agrylin for the treatment of
  elevated blood platelets, Pentasa for the treatment of ulcerative colitis,
  Carbatrol for the treatment of epilepsy and ProAmatine for the treatment of
  orthostatic hypotension. In addition, the Company receives royalties on sales of
  Reminyl for the treatment of Alzheimer's disease marketed by Johnson & Johnson,
  and Epivir, Combivir and Trizivir for the treatment of HIV/AIDS and Epivir-HBV
  for the treatment of hepatitis B marketed by GlaxoSmithKline.
  
  Within the International segment, the Company's principal products include:
  
       in the U.K., the Calcichew range, used primarily as adjuncts in the
       treatment of osteoporosis and Reminyl.
  
       in Canada, 3TC, Combivir and Heptovir marketed in partnership with
       GlaxoSmithKline, Amatine, Second Look, a breast cancer diagnostics product
       for which the Company hopes to receive FDA approval in 2001, and Fluviral
       S/F, a vaccine for the prevention of influenza.
  
  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) New Accounting Pronouncements
  
  In July 2001, the FASB issued Statement No. 141 "Business Combinations" and
  Statement No. 142 "Goodwill and Other Intangible Assets". SFAS No. 141 requires
  the use of the purchase method of accounting for all business combinations
  initiated after June 30, 2001. Had the BioChem transaction been initiated after
  this date, it would have been required to be accounted for under the purchase
  method rather than the pooling of interests method. SFAS No. 141 requires
  intangible assets to be recognized if they arise from contractual or legal
  rights or are "separable", i.e., it is feasible that they may be sold,
  transferred, licensed, rented, exchanged or pledged. As a result, it is likely
  that more intangibles will be recognized under SFAS No. 141 than its
  predecessor, APB Opinion No. 16, although in some instances previously
  recognized intangibles will be subsumed into goodwill.
  
  Under SFAS No. 142, goodwill will no longer be amortized on a straight line
  basis over its estimated useful life, but will be tested for impairment on an
  annual basis and whenever indicators of impairment arise. The goodwill
  impairment test, which is based on fair value, is to be preformed on a reporting
  unit level. A reporting unit is defined as a SFAS No. 131 operating segment or
  one level lower. Goodwill will no longer be allocated to other long-lived assets
  for impairment testing under SFAS No 121, "Accounting for the Impairment of
  Long-Lived Assets to be Disposed of". Additionally, goodwill on equity method
  investments will no longer be amortized; however, it will continue to be tested
  for impairment in accordance with Accounting Principles Board Opinion No. 18,
  "The Equity Method of Accounting for Investments in Common Stock". Under SFAS
  No. 142 intangible assets with indefinite lives will not be amortized. Instead
  they will be carried at the lower of cost or market value and tested for
  impairment at least annually. All other recognized intangible assets will
  continue to be amortized over their estimated useful lives.
  
  
  <PAGE>
  
  SFAS No. 142 is effective for fiscal years beginning after December 15, 2001
  although goodwill on business combinations consummated after July 1, 2001 will
  not be amortized. On adoption the Company may need to record a cumulative effect
  adjustment to reflect the impairment of previously recognized intangible assets.
  In addition, goodwill recognized on prior business combinations will cease to be
  amortized. Had the Company adopted SFAS No. 142 at January 1, 2001 the Company
  would not have recorded a goodwill amortization charge of $5,373,000. The
  Company has not determined the impact that these statements will have on
  intangible assets or whether a cumulative effect adjustment will be required
  upon adoption.
  
  c) Basis of Presentation
  
  The accompanying consolidated financial statements, which include the operations
  of the Company and its wholly owned subsidiaries and the financial information
  included herein, are unaudited. They have been prepared in accordance with
  generally accepted accounting principles in the United States and Securities and
  Exchange Commission regulations for interim reporting. Certain information and
  footnote disclosures normally included in financial statements prepared in
  accordance with generally accepted accounting principles in the United States
  have been condensed or omitted pursuant to such rules and regulations. However,
  such information includes all adjustments (consisting solely of normal recurring
  adjustments), which are, in the opinion of management, necessary to fairly state
  the results of the interim periods. Interim results are not necessarily
  indicative of results to be expected for the full year. These consolidated
  financial statements should be read in conjunction with the Company's audited
  consolidated financial statements for the three years ended December 31, 2000
  and notes thereto. The results for the period ended June 30, 2001 are not
  necessarily indicative of the results that may be expected for the year ending
  December 31, 2001.
  
  
  2.   Inventory
  
                                      June 30,2001         June 30,2000
                                             $'000                $'000
                                    --------------       --------------
  Finished goods                            18,775               22,648
  Work-in-process                           21,410               10,708
  Raw materials                              7,919               11,768
                                    --------------       --------------
                                            48,104               45,124
                                    --------------       --------------
  
  
  
  <PAGE>
  
  3.   Analysis of revenue, operating income 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 U.S., International and
  Global Research and Development, each being managed and monitored separately.
  The Company evaluates performance based on operating income.
  
  
  <TABLE>
  <CAPTION>
  Three months ended June 30, 2001                          U.S.   International              R&D           Total
                                                           $'000           $'000            $'000           $'000
                                                      ----------      ----------       ----------      ----------
  <S>                                                    <C>              <C>          <C>               <C>
  Product sales                                          141,648          30,057                -         171,705
  Licensing and development                                  244               -                -             244
  Royalties                                                  120          38,309                -          38,429
  Other revenues                                               -             471                -             471
                                                      ----------      ----------       ----------      ----------
  Total revenues                                         142,012          68,837                -         210,849
                                                      ----------      ----------       ----------      ----------
  
  Cost of revenues                                        17,616          10,093                -          27,709
  Research and development                                     -               -           41,827          41,827
  Selling, general and administrative                     50,222          25,784                -          76,006
  Asset impairments and restructuring charges
                                                               -          85,447                -          85,447
  Merger transaction expenses                                  -          83,470                -          83,470
  Losses on dispositions of assets                             -           8,098                -           8,098
                                                      ----------      ----------       ----------      ----------
  Total operating expenses                                67,838         212,892           41,827         322,557
                                                      ----------      ----------       ----------      ----------
  Operating income/(loss)                                 74,174       (144,055)         (41,827)       (111,708)
                                                      ----------      ----------       ----------      ----------
  
  Three months ended June 30, 2000                          U.S.   International              R&D           Total
                                                           $'000           $'000            $'000           $'000
                                                      ----------      ----------       ----------      ----------
  Product sales                                           96,449          24,914                -         121,363
  Licensing and development                                  614           3,757                -           4,371
  Royalties                                                   85          33,568                -          33,653
  Other revenues                                               9             167                -             176
                                                      ----------      ----------       ----------      ----------
  Total revenues                                          97,157          62,406                -         159,563
                                                      ----------      ----------       ----------      ----------
  
  Cost of revenues                                        12,483          10,157                -          22,640
  Research and development                                     -               -           39,253          39,253
  Selling, general and administrative                     33,466          22,818                -          56,284
  (Gains)/losses on dispositions of assets                 (282)              17                -           (265)
                                                      ----------      ----------       ----------      ----------
  Total operating expenses                                45,667          32,992           39,253         117,912
                                                      ----------      ----------       ----------      ----------
  Operating income/(loss)                                 51,490          29,414         (39,253)          41,651
                                                      ----------      ----------       ----------      ----------
  <PAGE>
  
  Six months ended June 30, 2001                            U.S.    International             R&D             Total
                                                           $'000            $'000           $'000             $'000
                                                      ----------       ----------      ----------        ----------
  Product sales                                          268,452           57,419               -           325,871
  Licensing and development                                2,329              957               -             3,286
  Royalties                                                  180           70,510               -            70,690
  Other revenues                                               -              746               -               746
                                                      ----------       ----------      ----------        ----------
  Total revenues                                         270,961          129,632               -           400,593
                                                      ----------       ----------      ----------        ----------
  
  Cost of revenues                                        35,492           21,493               -            56,985
  Research and development                                     -                -          79,511            79,511
  Selling, general and administrative                     91,853           53,938               -           145,791
  Asset impairments and restructuring charges
                                                               -           85,447               -            85,447
  Merger transaction expenses                                  -           83,470               -            83,470
  Losses on dispositions of assets                             -            8,098               -             8,098
                                                      ----------       ----------      ----------        ----------
  Total operating expenses                               127,345          252,446          79,511           459,302
                                                      ----------       ----------      ----------        ----------
  Operating income/(loss)                                143,616        (122,814)        (79,511)          (58,709)
                                                      ----------       ----------      ----------        ----------
  
  
  Six months ended June 30, 2000                            U.S.    International             R&D             Total
                                                           $'000            $'000           $'000             $'000
                                                      ----------       ----------      ----------        ----------
  Product sales                                          189,550           47,690               -           237,240
  Licensing and development                                1,990            7,291               -             9,281
  Royalties                                                  129           63,534               -            63,663
  Other revenues                                              13              461               -               474
                                                      ----------       ----------      ----------        ----------
  Total revenues                                         191,682          118,976               -           310,658
                                                      ----------       ----------      ----------        ----------
  
  Cost of revenues                                        25,437           19,660               -            45,097
  Research and development                                     -                -          77,482            77,482
  Selling, general and administrative                     60,018           69,278               -           129,296
  (Gains)/losses on dispositions of assets                 (282)               17               -             (265)
                                                      ----------       ----------      ----------        ----------
  Total operating expenses                                85,173           88,955          77,482           251,610
                                                      ----------       ----------      ----------        ----------
  Operating income/(loss)                                106,509           30,021        (77,482)            59,048
                                                      ----------       ----------      ----------        ----------
  </TABLE>
  
  4.  Net (loss)/income per share
  
  Basic net (loss)/income per share is based upon the net (loss)/income available
  to common stockholders divided by the weighted-average number of common shares
  outstanding during the period. Diluted net (loss)/income per share is based upon
  net (loss)/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.
  
  
  <PAGE>
  
  
  
  The following table sets forth the computation of basic and diluted net
  (loss)/income per share:
  
  <TABLE>
  <CAPTION>
                                                            3 months to      3 months to      6 months to     6 months to
                                                          June 30, 2001    June 30, 2000    June 30, 2001   June 30, 2000
                                                                  $'000            $'000            $'000           $'000
                                                        ---------------- ---------------- ---------------- ----------------
  <S>                                                         <C>                <C>             <C>              <C>
  Numerator for basic net (loss)/income per share             (124,191)          128,266         (82,727)         141,226
  Interest charged on convertible debt, net of tax                    -              102                -             438
                                                        ---------------- ---------------- ---------------- ----------------
  Numerator for diluted net (loss)/income per share           (124,191)          128,368         (82,727)         141,664
                                                        ---------------- ---------------- ---------------- ----------------
  
  Weighted average number of shares:                      No. of shares    No. of shares    No. of shares   No. of shares
                                                        ---------------- ---------------- ---------------- ----------------
  Basic  - weighted average number of shares                489,977,184      482,234,443      489,205,296     479,509,446
  Effect of dilutive stock options                                    -       12,511,100                -      11,006,728
  Convertible debt                                                    -        1,630,519                -       1,630,519
                                                        ---------------- ---------------- ---------------- ----------------
  Diluted - weighted average number of shares               489,977,184      496,376,062      489,205,296     492,146,693
                                                        ---------------- ---------------- ---------------- ----------------
  Basic net (loss)/income per share                             (25.3c)            26.6c          (16.9c)           29.5c
                                                        ---------------- ---------------- ---------------- ----------------
  Diluted net (loss)/income per share                           (25.3c)            25.9c          (16.9c)           28.8c
                                                        ---------------- ---------------- ---------------- ----------------
  </TABLE>
  
  The calculation of the diluted weighted average number of shares for the three
  and six months ended June 30, 2001 excludes the effects of dilutive stock
  options and convertible debt securities issued by the Company because these have
  an antidilutive effect on the calculation in a loss making period.
  
  5.   Restructuring
  
  In May 2001, the Company completed a merger with BioChem Pharma Inc.
  ("BioChem"), an international specialty pharmaceutical company based in
  Montreal, Canada. As a result of the merger, the Company recorded pre tax
  charges in the second quarter of 2001 totalling $177.0 million, comprising asset
  impairment and restructuring costs ($85.4 million), merger related transaction
  expenses ($83.5 million) and a loss from the disposal of a duplicated facility
  in Toronto, Canada ($8.1 million).
  
  The restructuring costs included an impairment charge of $20.9 million to adjust
  intangible asset values, primarily trademark and patent costs but also an
  element of product rights, to their estimated fair value. These charges are
  consistent with the Company's accounting policy to review periodically the
  carrying value of intangible assets and evaluate whether there has been any
  impairment in the carrying value of those intangibles as compared with estimated
  undiscounted future cash flows relating to those intangibles. Other asset
  impairment charges included the write down of long term unquoted investments
  ($24.9 million) and a write down of $30.8 million to a debenture held by
  BioChem, which was received on divestiture of its diagnostics subsidiary. These
  charges are consistent with the Company's policy to provide for other than
  temporary impairments in investment by reference to the fair value of the
  investment using established financial methodologies. There was also a total of
  $8.8 million recorded in respect of employee related costs.
  
  The employee terminations related to the closure of the Toronto facility and the
  elimination of duplicate positions across the combined organization. Shire's
  existing Canadian based sales and marketing operations in Toronto have been
  combined with those of BioChem in Laval. A total of 57 employees were identified
  to be terminated. As of June 30, 2001 virtually all of the planned terminations
  were completed.
  
  6. Debt
  
  During the six months ended June 30, 2001, the Company made repayments of debt
  totaling $201.9 million. These repayments were in respect of a $125.0 million
  term loan owing to Credit Suisse First Boston and $76.9 million repaid to Glaxo
  SmithKline.
  <PAGE>
  
  7. Consolidated statement of changes in shareholders' equity
  
  <TABLE>
  <CAPTION>
                                                                                                Accumu-
                                                           Exchange-                             lated
                                      Common    Exchange-    able                                other        Total
                          Common      Stock       able      shares       Additional   Accumu-   compre-     sharehold-
                          Stock         No.      shares       No.          paid-in     lated    hensive       er's
                          Amount      Shares     Amount     shares         capital    deficit    losses      equity
                          $'000        000's     $'000      $'000           $'000      $'000     $'000       $'000
                        ----------- ----------- ------------------------------------------------------------------------
  <S>                       <C>        <C>       <C>          <C>         <C>         <C>         <C>        <C>
  As at January 1,
  2001                      21,035     257,088          -           -     1,228,705   (14,804)    (60,550)   1,174,386
  Net loss                       -           -          -           -             -   (82,727)           -    (82,727)
  Foreign currency
  translation                    -           -          -           -             -          -    (29,561)    (29,561)
  Unrealized holding
  loss on non-current
  investments                    -           -          -           -             -          -       (196)       (196)
  Issue of shares for
  acquisitions              12,735     179,449    792,220      17,292     (804,955)          -           -           -
  Exchange of
  exchangeable shares        1,529      21,762  (332,340)     (7,254)       330,811          -           -           -
  Options exercised            219       3,093          -           -        22,982          -           -      23,201
  Issuance costs                 -           -          -           -          (17)          -           -        (17)
  Stock option
  compensation                   -           -          -           -         2,352          -           -       2,352
  Tax benefit
  associated with
  exercise of stock
  options                        -           -          -           -         3,307          -           -       3,307
                        ----------- ----------- ------------------------------------------------------------------------
  
  As at June 30, 2001       35,518     461,392    459,880      10,038       783,185   (97,531)    (90,307)   1,090,745
                        ----------- ----------- ------------------------------------------------------------------------
  </TABLE>
  
  Each exchangeable share is exchangeable into 3 ordinary shares.
  
  8. Contingent liabilities
  
  (i) Phentermine
  
  Until April 1998, Shire Richwood Inc. ("SRI") distributed products containing
  phentermine, a prescription drug approved in the U.S. as a single agent for
  short term use in obesity. Contrary to the approved labeling of these products,
  physicians in the U.S. 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 U.S. market. Although SRI has ceased to distribute phentermine, the
  drug remains both approved and available in the U.S. 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 June 30, 2001, SRI was named as a defendant in approximately 3,781
  lawsuits and had been dismissed from approximately 3,463 of these cases. There
  were approximately 150 additional cases pending dismissal as of June 30, 2001.
  In only 42 cases in which SRI has been named as a defendant, has it been alleged
  in the complaint or subsequent discovery that the plaintiff had used SRI's
  particular product. 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.
  
  
  <PAGE>
  
  Accordingly, Shire intends to defend vigorously any and all claims made against
  the Company in respect of phentermine and believes that a liability is neither
  probable nor quantifiable at this stage of litigation.
  
  On August 31, 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.
  
  Legal expenses have been paid by Eon Labs Manufacturing Inc. ("Eon"), the
  suppliers 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 November 30, 2000 between Eon and SRI.
  
  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.
  
  (ii) Emory
  
  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. The Company is aggressively
  defending these patents.
  
  On July 23, 1996, Emory University filed a complaint in the U.S. alleging
  infringement from the commercialisation of Epivir by BioChem and
  GlaxoSmithKline, BioChem's exclusive licensee in the U.S., of an Emory
  University U.S. patent granted that same day. The Company considers this patent
  infringement suit to be without merit and has successfully challenged the
  validity of Emory University's patent.
  
  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 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 November 10, 1999. The
  Board of Patent Appeals and Interferences issued a decision on December 21, 2000
  invalidating Emory's patent. Emory University has appealed the decision. There
  can be no assurance 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 and Norway. 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. The Company
  
  
  <PAGE>
  
  is aware that Emory University has filed patent applications in other countries,
  which it believes may claim similar subject matter. The Company intends to
  challenge vigorously such patent applications.
  
  
  (iii) Yale
  
  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.
  The Company believes that this application is licensed to Vion Pharmaceuticals,
  Inc. ("Vion"), formerly known as OncoRx, Inc., a New Haven, Connecticut-based
  company. The Company believes that its patent is valid and intends to vigorously
  defend the patent. The Company is not aware of corresponding patent applications
  by Yale University or Vion in countries other than the U.S. 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.
  
  (iv) Adderall
  
  On September 22, 2000, a lawsuit was filed against Shire 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. Shire filed its answer to the complaint on November 24, 2000
  and discovery related to the litigation is ongoing.
  
  (v) Interests in companies and partnerships
  
  BioChem has undertaken to subscribe to an interest in companies and partnerships
  for amounts totaling $51,624,000. As at June 30, 2001 an amount of $31,823,000
  (December 31, 2000: $25,709,000) has been subscribed. In addition, BioChem has
  undertaken to subscribe to additional amounts and pay royalties on certain
  future sales upon realization of certain conditions.
  
  <PAGE>
  
  ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
          of Operations
  
  The results for the three months and six months ended June 30, 2000 have been
  restated from prior periods to reflect the merger of Shire and BioChem, which
  became effective on May 11, 2001, as if the merger had occurred at the beginning
  of the periods described.
  
  Results of operations for the three months ended June 30, 2001, as compared with
  those for the three months ended June 30, 2000
  
  Overview of financial results
  Total revenues for the three months ended June 30, 2001 increased by 32 per cent
  to $210.8 million as compared to the three months ended June 30, 2000, primarily
  the result of a $50.3 million increase in product sales. After one time merger
  related expenses and restructuring charges of $177.0 million, the Company
  recorded a second quarter net loss of $124.2 million (2000: net income $128.3
  million).
  
  Sales and marketing
  Product sales of $171.7 million represented 81 per cent of total revenues, an
  increase of 41 per cent over second quarter 2000 product sales of $121.4
  million. Product sales in the U.S. continue to represent a significant
  percentage of our worldwide sales, 82 per cent in the three months ended June
  30, 2001 (2000: 79 per cent).
  
  The Company manages and controls the sales and marketing operations on
  geographic lines. The following table presents the Company's net product sales
  by operating segment:
  
                                3 months to     3 months to
  Product sales by segment          June 30,       June 30,
                                       2001            2000
                                      $'000           $'000        % change
  
  United States                     141,648          96,449            46.9
  International                      30,057          24,914            20.6
                               ------------    ------------    ------------
  Total product sales               171,705         121,363            41.5
                               ------------    ------------    ------------
  
  
  Second quarter sales of Adderall, marketed in the U.S. for the treatment of
  Attention Deficit Hyperactivity Disorder (ADHD), were $69.4 million,
  representing growth of 56 per cent over the second quarter of 2000. Adderall had
  a 32.7 per cent share of the prescription market for ADHD in the U.S. in June
  2001 compared to 32.1 per cent in June 2000. Adderall continues to be the brand
  leader in the U.S. market for ADHD.
  
  Sales of Agrylin, the only U.S. product licensed for the treatment of essential
  thrombocythemia were $25.8 million, a 39 per cent increase over second quarter
  2000 sales of $18.5 million. Shire achieved a prescription share of 21.3 per
  cent of the total U.S. Agrylin market, including Hydrea and generic hydroxyurea,
  in June 2001 compared to 16.7 per cent in June 2000.
  
  Sales of Pentasa, licensed for the treatment of ulcerative colitis, at $19.1
  million, were 45 per cent higher than the comparable period last year. Pentasa
  had a 17.8 per cent share of the oral mesalamine/obsalazine market in June 2001
  compared to 18.0 per cent in June 2000.
  
  Carbatrol, one of the most widely used first line treatments for epilepsy,
  recorded sales growth of 87 per cent from sales of $5.3 million in the three
  months ended June 30, 2000 to $9.9 million in the three months ended June 30,
  2001. This translates to 33.8 per cent of the U.S. extended release
  carbamazepine prescription market in June 2001, compared to 28.1 per cent in
  June 2000.
  
  
  <PAGE>
  
  Licensing
  Licensing and development fees in the three months ended June 30, 2001 fell by
  94 per cent to $0.2 million compared to $4.4 million in the three months ended
  June 30, 2000. The decrease is mainly due to the reduction in recovery of
  development costs for Reminyl, an Alzheimer's drug, launched by Janssen ("J&J")
  in the US market in May 2001.
  
  Royalties
  Royalties increased by $4.8 million, up 14 per cent to $38.4 million. The
  Company receives royalties from GlaxoSmithKline on the worldwide sales of 3TC,
  for the treatment of HIV infection / AIDS, and Zeffix, an oral treatment for
  chronic hepatitis B. Additionally, the Company receives royalties from J&J for
  Reminyl.
  
  Cost of sales and operating expenses
  Gross margin on product sales increased from 81 per cent for the three months
  ended June 30, 2000 to 84 per cent for the three months ended June 30, 2001.
  This is a reflection of the product mix as the higher margin products, Adderall
  and Agrylin, represented approximately 55 per cent of total product sales in the
  three months ended June 30, 2001 compared to 52 per cent in the three months
  ended June 30, 2000. Pre announced pricing changes in respect of Adderall have
  also benefited the gross margin in three months ended June 30, 2001.
  
  R&D expenditure increased 7 per cent to $41.8 million for the three months ended
  June 30, 2001 (Q2 2000: $39.3 million). R&D expenditure in second quarter 2001
  represented 20 per cent of revenues compared to 25 per cent in second quarter
  2000 and 23 per cent for full year 2000.
  
  Selling, general and administrative expenses, excluding the effects of a stock
  option compensation charge of $0.2 million (Q2 2000: $0.2 million) and
  depreciation and amortization of $11.2 million (Q2 2000: $9.4 million),
  increased by 38 per cent to $64.6 million for the three months ended June 30,
  2001 (Q2 2000: $46.6 million). As a percentage of product sales, selling,
  general and administrative costs represented 38 per cent for the second quarter
  2001, consistent with second quarter 2000.
  
  The 19 per cent increase in depreciation and amortization for the three months
  ended June 30, 2001 is attributable to the purchase of several new products in
  Europe since June last year.
  
  Restructuring
  In May 2001, the Company completed a merger with BioChem, an international
  specialty pharmaceutical company based in Montreal, Canada. As a result of the
  merger, the Company recorded pre-tax charges in the second quarter of 2001
  totalling $177.0 million, comprising asset impairment and restructuring costs
  ($85.4 million), merger related transaction expenses ($83.5 million), and a loss
  from the disposal of a duplicated facility in Toronto, Canada ($8.1 million).
  
  The restructuring costs included an impairment charge of $20.9 million to adjust
  intangible asset values, primarily trademark and patent costs but also an
  element of product rights, to their estimated fair value. These charges are
  consistent with the Company's accounting policy to review periodically the
  carrying value of intangible assets and evaluate whether there has been any
  impairment in the carrying value of those intangibles as compared with estimated
  undiscounted future cash flows relating to those intangibles. Other asset
  impairment charges included the write down of long term unquoted investments
  ($24.9 million) and a write down of $30.8 million to a debenture held by
  BioChem, which was received on divestiture of its diagnostics subsidiary. These
  charges are consistent with the Company's policy to provide for other than
  temporary impairments in investment by reference to the fair value of the
  investment using established financial methodologies. There was also a total of
  $8.8 million recorded in respect of employee related costs.
  
  The employee terminations related to the closure of the Toronto facility and the
  elimination of duplicate positions across the combined organization. Shire's
  existing Canadian based sales and marketing operations in Toronto have been
  combined with those of BioChem in Laval. A total of 57 employees were identified
  to be terminated. As of June 30, 2001 virtually all of the planned terminations
  were completed.
  
  The Company anticipates realizing annual savings resulting from post merger
  operating synergies in the range of $10 - 15 million per annum.
  <PAGE>
  
  
  Income taxes
  For the three months ended June 30, 2001 income taxes increased $8.5 million to
  $17.7 million from $9.2 million for the three months ended June 30, 2000. The
  Company's effective tax rate before the stock compensation charge and
  exceptional items was 25 per cent for the three months ended June 30, 2001 (Q2
  2000: 22 per cent). The Company has recorded net deferred tax assets of $19.5
  million. Realization is dependent upon generating sufficient taxable income to
  utilize such assets. Although realization on these assets is not assured,
  management believes it is more likely than not that the deferred tax assets will
  be realized.
  
  Results of operations for the six months ended June 30, 2001, as compared with
  those for the six months ended June 30, 2000
  
  Overview of financial results
  Total revenues for the six months ended June 30, 2001 were $400.6 million, an
  increase of $89.9 million or 29 per cent over the six months ended June 30,
  2000. After one time merger related expenses and restructuring charges of $177.0
  million, the Company recorded a net loss of $82.7 million (2000: $141.2 million
  net income). Net income for the six months to June 30, 2001 includes an APB 25
  charge of $2.4 million compared to $23.5 million for the six months ended June
  30, 2000.
  
  Sales and marketing
  Product sales were $325.9 million in the six months ended June 30, 2001 (2000:
  $237.2 million), representing an increase of 37 per cent. Of particular note,
  Adderall sales at $139.6 million were 41 per cent higher than in the first half
  of 2000.
  
  Other products contributing to the overall 37 per cent increase were Agrylin
  (increase of $13.4 million or 45 per cent), Carbatrol (increase of $8.6 million
  or 79 per cent) and ProAmatine (increase of $8.6 million or 92 per cent).
  
  U.S. product sales for the six months ended June 30, 2001 represented 82 per
  cent of the Company's total sales revenues (2000: 80 per cent).
  
  Product sales by segment      6 months to     6 months to
                                   June 30,        June 30,        % change
                                       2001            2000
                                      $'000           $'000
  
  United States                     268,452         189,550            41.6
  International                      57,419          47,690            20.4
                               ------------    ------------    ------------
  Total product sales               325,871         237,240            37.4
                               ------------    ------------    ------------
  
  Licensing
  Licensing and development fees for the six months ended June 30, 2001 decreased
  by 65 per cent to $3.3 million compared to $9.3 million for the six months ended
  June 30, 2000.
  
  Royalties increased by $7.0 million to $70.7 million for the six months ended
  June 30, 2001.
  
  Cost of sales and operating expenses
  Gross margin on product sales increased to 83 per cent for the six months ended
  June 30, 2001 compared to 81 per cent for the six months ended June 30, 2000.
  
  R&D expenditure increased by 3 per cent to $79.5 million for the six months
  ended June 30, 2001 (2000: $77.5 million). R&D expenditure for the six months
  ended June 30, 2001 represents 20 per cent of revenues compared to 25 per cent
  for the six months ended June 30, 2000.
  
  Excluding the effects of the APB25 charge, depreciation and amortization
  charges, the underlying selling, general and administrative expenses increased
  by 39 per cent to $121.4 million for the six months ended June 30, 2001 (2000:
  $87.1 million) in line with the expansion of the business.
  
  
  <PAGE>
  
  Depreciation and amortization increased by 18 per cent to $22.0 million (2000:
  $18.7 million). As noted above, this increase reflects the amortization charge
  on those intangible assets acquired since the second quarter of 2000.
  
  Income taxes
  For the six months ended June 30, 2001 income taxes were $31.6 million,
  representing an effective rate of tax on income pre APB 25 charge of 25 per cent
  (2000: 24 per cent).
  
  
  Liquidity and Financial Condition
  The Company's funding requirements depend on a number of factors, including the
  Company's product development programs, business and product acquisitions, the
  level of resources required for the expansion of marketing capabilities as the
  product base expands, increased investment in accounts receivable and inventory
  which may arise as sales levels increase, competitive and technological
  developments, the timing and cost of obtaining required regulatory approvals for
  new products and the continuing revenues generated from sales of its key
  products.
  
  At June 30, 2001, the Company had net cash funds available as follows:
  
                                                       June 30,     December 31,
                                                           2001             2000
                                                          $'000            $'000
                                                 --------------   --------------
  Cash and cash equivalents                              72,988           93,266
  Marketable securities and other current
    asset investments                                   230,337          370,425
  Debt                                                  (8,575)        (213,874)
                                                 --------------   --------------
  Net cash                                              294,750          249,817
                                                 --------------   --------------
  
  Net cash provided by operating activities for the six months ended June 30, 2001
  was $72.7 million compared to $11.2 million for the six months ended June 30,
  2000.
  
  Investing activities provided $89.7 million for the six months ended June 30,
  2001 (2000: $168.2 million). A reduction in cash placed on short term deposit
  and redemption of marketable securities of $137.1 million was offset by net
  capital expenditure on long term investments, intangible assets and fixed assets
  of $47.4 million.
  
  Financing activities utilized $178.7 million for the six months ended June 30,
  2001 (2000: generation of $40.5 million). Repayments of long term debt totalling
  $201.9 million were offset by $23.2 million received from exercises of employee
  stock options. The repayments of debt were in respect of a $125.0 million term
  loan owing to Credit Suisse First Boston and $76.9 million repaid to Glaxo
  SmithKline. In part, cash funds released from short term investments, as noted
  above, were used to settle the long term debts outstanding.
  
  Capital expenditure
  Capital expenditure on tangible fixed assets for the six months ended June 30,
  2001 was $6.0 million, which included $1.7 million of equipment related to the
  Company's new head office facility occupied from March 2001. Expenditure was
  offset by $1.2 million in proceeds received on the disposal of the Toronto
  facility. Other capital expenditure related to the purchase of long term
  investments ($11.1 million) and $31.5 million for new products, including
  Monocid and Indurgan marketed by the Company's Spanish and Italian operations.
  
  <PAGE>
  
  ITEM 3.  Qualitative and Quantitative Disclosures about Market Risk
  
  Shire's principal treasury operations are managed by the Company's treasury
  function based in the U.K. in accordance with the Company's treasury policies
  and procedures which are approved by Shire's Board of Directors. As a matter of
  policy, Shire does not undertake speculative transactions that would increase
  its currency or interest rate exposure.
  
  The Company is subject to market risk exposure in the following areas:
  
  Interest rate market risk
  
  The Company has cash and cash equivalents on which interest is earned at
  variable rates.
  
  Since December 31, 2000 the Company has repaid in full a long term loan
  outstanding to Credit Suisse First Boston and amounts due to Glaxo SmithKline
  under a promissory note. Thus, as at June 30, 2001 the Company's exposure to
  interest rate market risk on debts outstanding is much reduced.
  
  The Company has short term and long term debt liabilities denominated in foreign
  currencies. As at June 30, 2001, a total of $5.6 million was outstanding
  (December 31, 2000: $6.0 million). The underlying currency was Canadian dollars.
  
  Foreign exchange market risk
  
  The Company and a number of subsidiary operations are located outside the U.S.
  As such, the consolidated financial results are subject to fluctuations in
  exchange rates, particularly between the British pound, Canadian dollar and the
  U.S. dollar. The financial statements of foreign entities are translated using
  the accounting policies described in Note 1 of the Notes to the consolidated
  financial statements filed on Form 10K. The exposure to foreign exchange market
  risk is managed by the Company's treasury function, using forecasts provided by
  the operating units.
  
  
  <PAGE>
  
  
  PART II.   OTHER INFORMATION
  
  ITEM 1. LEGAL PROCEEDINGS
  
  (i) Phentermine
  
  Until April 1998, Shire Richwood Inc. ("SRI") distributed products containing
  phentermine, a prescription drug approved in the U.S. as a single agent for
  short term use in obesity. Contrary to the approved labeling of these products,
  physicians in the U.S. 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 U.S. market. Although SRI has ceased to distribute phentermine, the
  drug remains both approved and available in the U.S. 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 June 30, 2001, SRI was named as a defendant in approximately 3,781
  lawsuits and had been dismissed from approximately 3,463 of these cases. There
  were approximately 150 additional cases pending dismissal as of June 30, 2001.
  In only 42 cases in which SRI has been named as a defendant, has it been alleged
  in the complaint or subsequent discovery that the plaintiff had used SRI's
  particular product. 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 Company in respect of phentermine
  and believes that a liability is neither probable nor quantifiable at this stage
  of litigation.
  
  On August 31, 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.
  
  Legal expenses have been paid by Eon Labs Manufacturing Inc. ("Eon"), the
  suppliers 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 November 30, 2000 between Eon and SRI.
  
  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.
  
  (ii) Emory
  
  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. The Company is aggressively
  defending these patents.
  
  
  <PAGE>
  
  On July 23, 1996, Emory University filed a complaint in the U.S. alleging
  infringement from the commercialisation of Epivir by BioChem and
  GlaxoSmithKline, BioChem's exclusive licensee in the U.S., of an Emory
  University U.S. patent granted that same day. The Company considers this patent
  infringement suit to be without merit and has successfully challenged the
  validity of Emory University's patent.
  
  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 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 November 10, 1999. The
  Board of Patent Appeals and Interferences issued a decision on December 21, 2000
  invalidating Emory's patent. Emory University has appealed the decision. There
  can be no assurance 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 and Norway. 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. The Company is aware that Emory University
  has filed patent applications in other countries, which it believes may claim
  similar subject matter. The Company intends to challenge vigorously such patent
  applications.
  
  (iii) Yale
  
  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.
  The Company believes that this application is licensed to Vion Pharmaceuticals,
  Inc. ("Vion"), formerly known as OncoRx, Inc., a New Haven, Connecticut-based
  company. The Company believes that its patent is valid and intends to vigorously
  defend the patent. The Company is not aware of corresponding patent applications
  by Yale University or Vion in countries other than the U.S. 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.
  
  (iv) Adderall
  
  On September 22, 2000, a lawsuit was filed against Shire 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. Shire filed its answer to the complaint on November 24, 2000
  and discovery related to the litigation is ongoing.
  
  
  <PAGE>
  
  ITEM 2. CHANGES IN SECURITIES
  
  None
  
  
  ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
  None
  
  
  ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
  An Annual General Meeting of Shareholders was held on June 5, 2001. The
  following resolutions were adopted by the margins indicated:
  
  Ordinary resolution to receive and consider the Directors' Report and Accounts
  for the year ended December 31, 2000.
  
               For            Against             Open           Abstentions
           129,067,094         57,781          1,835,007          1,622,643
  
  Ordinary resolution to re-appoint Arthur Andersen as Auditors and authorize the
  Directors to fix their remuneration.
  
               For             Against            Open           Abstentions
           125,947,052        3,361,017        1,836,479          1,437,977
  
  Ordinary resolution to re-elect Mr Angus Russell as Director.
  
               For            Against             Open           Abstentions
           128,804,462        330,209          1,840,232          1,607,622
  
  Ordinary resolution to re-elect Dr Wilson Totten as Director.
  
               For            Against             Open           Abstentions
           128,922,428        212,048          1,840,442          1,607,607
  
  Ordinary resolution to re-elect Dr Bernard Canavan as Director.
  
               For             Against            Open           Abstentions
           125,153,717        3,450,868        1,840,442          2,137,498
  
  Ordinary resolution, conditional on completion of the Company's merger with
  BioChem Pharma Inc., to elect Dr Francesco Bellini as Director.
  
               For            Against             Open           Abstentions
           128,944,337        176,765          1,840,442          1,620,981
  
  Ordinary resolution, conditional on completion of the Company's merger with
  BioChem Pharma Inc., to elect the Hon James Andrews Grant as Director.
  
               For            Against             Open           Abstentions
           128,974,746        146,909          1,840,442          1,620,428
  
  
  
  <PAGE>
  
  Ordinary resolution, conditional on completion of the Company's merger with
  BioChem Pharma Inc., to elect Mr Gerard Veilleux as Director.
  
               For         Against             Open         Abstentions
           128,971,382     149,295          1,840,442        1,621,406
  
  Special resolution that options may be granted under the Shire Pharmaceuticals
  Group plc 2000 Executive Share Option Scheme subject to satisfaction of
  performance conditions prior to and not subsequent to grant as more particularly
  described in the Chairman's letter to shareholders dated April 27, 2001.
  
               For          Against           Open          Abstentions
           114,896,437     10,492,038      1,849,642         5,344,408
  
  
  ITEM 5. OTHER INFORMATION
  
  Adderall XR
  
  On August 3, 2001, Shire announced that Adderall XR, a once daily treatment
  under review for Attention Deficit Hyperactivity Disorder ("ADHD"), had received
  an `approvable letter' from the U.S. Food and Drug Administration ("FDA"). An
  approvable letter is an official communication from the FDA indicating that the
  agency is prepared to approve the new drug application upon the finalization of
  the labelling and satisfaction of any outstanding issues specified in that
  letter. The New Drug Application ("NDA"), which was submitted to the FDA on
  October 3, 2000, was based on studies involving over 600 patients and was one of
  the largest ever medication trials in ADHD research. The positive results from
  these studies have been presented at various scientific meetings throughout the
  past year. Adderall XR is a once daily formulation containing the same active
  ingredients as Adderall (mixed salts of a single entity amphetamine product),
  which was developed by Shire's drug delivery division, Shire Laboratories Inc.
  using the Microtrol oral controlled release technology.
  
  
  ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
  
  (a)  Reports on Form 8-K
  
       During the second quarter ended June 30, 2001, the following reports on
       Form 8-K were filed by the Company with the Securities and Exchange
       Commission:
  
       Form 8-K (Item 5 - Other Events), date of earliest event reported April 26,
       2001, with respect to press release announcement of first quarter results.
  
       Form 8-K (Item 7 - Financial Statements and Exhibits), date of earliest
       event reported May 9, 2001, with respect to presentation relating to first
       quarter results and BioChem Pharma Inc. merger.
  
       Form 8-K (Item 7 - Financial Statements and Exhibits), date of earliest
       event reported May 15, 2001, with respect to description of Shire share
       capital.
  
  
       During the period between June 30, 2001 and the filing of this Form 10-Q,
       the following reports on Form 8-K were filed by the Company with the
       Securities and Exchange Commission:
  
       Form 8-K (Item 5 - Other Events), date of earliest event reported July 17,
       2001, with respect to press release of historical financial data in US GAAP
       format.
  
       Form 8-K as amended (Item 5 - Other Events, and Item 7 - Financial
       Statements and Exhibits), date of earliest event reported July 23, 2001,
       with respect to press release announcement of second quarter results.
  
       Form 8-K (Item 7 - Financial Statements and Exhibits), date of earliest
       event reported July 23, 2001, with respect to presentation relating to
       second quarter results.
  
  
  
  <PAGE>
  
  SIGNATURES
  
  Pursuant to the requirements of the Securities Exchange Act of 1934, the
  Registrant has duly caused this Report to be signed on its behalf by the
  undersigned thereunto duly authorized.
  
  SHIRE PHARMACEUTICALS GROUP PLC
  (Registrant)
  
  
  
  
  Date:    August 13, 2001            By:     Angus C Russell
                                              Group Finance Director
  
  
  
  Date:    August 13, 2001            By:     Rolf Stahel
                                              Chief Executive
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text: FORM 10-Q
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549
  
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                    ACT OF 1934
  
  For the Quarter Ended June 30, 2001
  
                           Commission File Number: 0-29630
  
                           SHIRE PHARMACEUTICALS GROUP PLC
               (Exact name of registrant as specified in its charter)
  
            England and Wales                                 N.A.
      (State or other jurisdiction                      (I.R.S. Employer
    of incorporation or organization)                 Identification No.)
  
      Hampshire International Business Park,
    Chineham, Basingstoke, Hampshire, England              RG24 8EP
    (Address of principal executive offices)              (Zip Code)
  
                                   44 1256 894 000
                (Registrant's telephone number, including area code)
  
  Indicate by check mark whether the registrant (1) has filed all reports required
  to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
  the preceding 12 months, and (2) has been subject to such filing requirements
  for the past 90 days.
                                                            Yes  X    No  _
  
  Indicate the number of shares outstanding of each of the issuer's classes of
  Common Stock, as of the latest practical date.
  
              Class                         Outstanding at July 31, 2001
  
  Common Stock: Ordinary Shares                     473,372,437
  THE "SAFE HARBOR" STATEMENT UNDER SECTION 21E OF THE SECURITIES EXCHANGE ACT OF
  1934 (AMENDED) AND SECTION 27A OF THE SECURITIES ACT OF 1933 (AMENDED). The
  statements in this Form 10-Q that are not historical facts are forward-looking
  statements that involve risks and uncertainties, including but not limited to,
  risks associated with the inherent uncertainty of pharmaceutical research,
  product development and commercialization, the impact of competitive products,
  patents, and other risks and uncertainties, including those detailed from time
  to time in periodic reports, including the Annual Report filed on Form 10-K by
  Shire with the Securities and Exchange Commission.
  PART I.  FINANCIAL INFORMATION
  
  ITEM 1.  Financial Statements
  SHIRE PHARMACEUTICALS GROUP PLC
                             CONSOLIDATED BALANCE SHEETS
           (In thousands of U.S. dollars, except share and per share data)
                                     (Unaudited)
  
                                                                                          June 30,          December 31,
                                                                                              2001                  2000
  ASSETS                                                                               -----------           -----------
  Current assets:
  Cash and cash equivalents                                                                 72,988                93,266
  Marketable securities and other current asset investments                                230,337               370,425
  Accounts receivable, net                                                                 124,981               144,175
  Inventories, net                                                                          48,104                49,612
  Deferred tax asset                                                                         6,641                26,990
  Prepaid expenses and other current assets                                                 26,639                11,385
                                                                                      ------------          ------------
  Total current assets                                                                     509,690               695,853
  
  Investments                                                                               60,307                74,314
  Property, plant and equipment, net                                                       114,495               131,224
  Intangible assets, net                                                                   560,691               578,436
  Net assets of business transferred under contractual arrangements                          3,934                35,850
  Deferred tax asset                                                                        12,860                 6,543
  Other assets                                                                              24,109                26,275
                                                                                      ------------          ------------
  Total assets                                                                           1,286,086             1,548,495
                                                                                      ------------          ------------
  LIABILITIES AND SHAREHOLDERS' EQUITY
  Current liabilities:
  Current instalments of long-term debt                                                      4,518                81,811
  Accounts and notes payable                                                               170,985               113,446
  Other current liabilities                                                                  3,342                32,593
                                                                                      ------------          ------------
  Total current liabilities                                                                178,845               227,850
  
  Long-term debt, excluding current instalments                                              4,057               132,063
  Other long-term liabilities                                                               12,439                14,196
                                                                                      ------------          ------------
  Total liabilities                                                                        195,341               374,109
                                                                                      ------------          ------------
  Shareholders' equity:
  Common stock, 5p par value: 800,000,000 shares authorized; and
  461,391,822 shares issued and outstanding (2000: 257,088,451)                             35,518                21,035
  Exchangeable shares: 10,038,008 shares issued and outstanding (2000:
  nil)                                                                                     459,880                     -
  Additional paid-in capital                                                               783,185             1,228,705
  Accumulated other comprehensive losses                                                  (90,307)              (60,550)
  Accumulated deficit                                                                     (97,531)              (14,804)
                                                                                      ------------          ------------
  Total shareholders' equity                                                             1,090,745             1,174,386
                                                                                      ------------          ------------
  Total liabilities and shareholders' equity                                             1,286,086             1,548,495
                                                                                      ------------          ------------
  The balance sheet as at December 31, 2000 has been restated to include the
  results of BioChem Pharma Inc., the merger with whom was accounted for as a
  pooling of interests in accordance with APB 16, Accounting for Business
  Combinations. The accompanying notes are an integral part of these financial
  statements.
  SHIRE PHARMACEUTICALS GROUP PLC
                          CONSOLIDATED STATEMENTS OF INCOME
           (In thousands of U.S. dollars, except share and per share data)
                                     (Unaudited)
  
                                                    3 months to      3 months to       6 months to     6 months to
                                                  June 30, 2001         June 30,              June            June
                                                                            2000               30,              30,
                                                                                              2001             2000
                                                   ------------     ------------      ------------     ------------
  Product sales                                         171,705          121,363           325,871          237,240
  Licensing and development                                 244            4,371             3,286            9,281
  Royalties                                              38,429           33,653            70,690           63,663
  Other revenues                                            471              176               746              474
                                                   ------------     ------------      ------------     ------------
  Total revenues                                        210,849          159,563           400,593          310,658
  
  Costs and expenses:
  Cost of revenues                                     (27,709)         (22,640)          (56,985)         (45,097)
  Research and development                             (41,827)         (39,253)          (79,511)         (77,482)
  Selling, general and administrative
  (inclusive of stock option compensation
  charge of  $232,000, $236,000, $2,352,000
  and $23,482,000 respectively)
                                                       (76,006)         (56,284)         (145,791)        (129,296)
  Asset impairments and restructuring charges
                                                       (85,447)                -          (85,447)                -
  Merger transaction expenses                          (83,470)                -          (83,470)                -
  (Losses)/gains on dispositions of assets              (8,098)              265           (8,098)              265
                                                   ------------     ------------      ------------     ------------
  Total operating expenses                            (322,557)        (117,912)         (459,302)        (251,610)
                                                   ------------     ------------      ------------     ------------
  Operating (loss)/income                             (111,708)           41,651          (58,709)           59,048
  
  Interest income                                         4,485            4,724             9,635            8,195
  Interest expense                                      (1,684)          (3,974)           (4,682)          (8,388)
  Other income                                            2,401           95,057             2,653          102,453
                                                   ------------     ------------      ------------     ------------
  Total other income, net                                 5,202           95,807             7,606          102,260
                                                    -----------      -----------      ------------     ------------
  (Loss)/income before income taxes                   (106,506)          137,458          (51,103)          161,308
  
  Income taxes                                         (17,685)          (9,192)          (31,624)         (20,082)
                                                   ------------     ------------      ------------     ------------
  Net (loss)/income                                   (124,191)          128,266          (82,727)          141,226
                                                   ------------     ------------      ------------     ------------
  
  Net (loss)/income per share:
  Basic                                                 (25.3c)            26.6c           (16.9c)            29.5c
  Diluted                                               (25.3c)            25.9c           (16.9c)            28.8c
  
  Weighted average number of shares:
  Basic                                             489,977,184      482,234,443       489,205,296      479,509,446
  Diluted                                           489,977,184      496,376,062       489,205,296      492,146,693
  The results for the three and six months ended June 30, 2000 have been restated
  to include the results of BioChem Pharma Inc., the merger with whom was
  accounted for as a pooling of interests in accordance with APB 16, Accounting
  for Business Combinations.
  SHIRE PHARMACEUTICALS GROUP PLC
                   CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                           (In thousands of U.S. dollars)
                                     (Unaudited)
  
                                                                                 6 months to   6 months to
                                                                                    June 30,      June 30,
                                                                                        2001          2000
                                                                              --------------- -------------
  Cash flows from operating activities:
  Net (loss)/income                                                                 (82,727)       141,226
  Adjustments to reconcile net (loss)/income to net cash provided by
  operating activities:
  Depreciation and amortization                                                       22,027        18,670
  Stock option compensation                                                            2,352        23,482
  Tax benefit of stock option compensation charged directly to equity                  3,307         9,829
  Non cash exchange gains and losses                                                 (5,030)       (1,656)
  Write-down of long term investments                                                 24,937             -
  Write-down of intangible assets                                                     20,890             -
  Write-down of net assets of business transferred under contractual
  arrangements                                                                        30,811             -
  Gain on sale of long term investments                                                    -     (100,516)
  Loss/(gain) on sale of fixed assets                                                  8,098         (265)
  Decrease/(increase) in accounts receivable                                          17,735      (29,287)
  Decrease/(increase) in inventory                                                     1,671       (3,344)
  Decrease in deferred tax asset                                                      13,768         1,535
  Increase in prepayments and other current asset investments                       (13,414)       (6,642)
  Decrease in other assets                                                             2,228        10,435
  Increase/(decrease) in accounts and notes payable                                   34,957      (21,596)
  Decrease in other current liabilities                                              (7,186)      (29,862)
  Decrease in other long term liabilities                                            (1,757)         (823)
                                                                              --------------- ---------------
  Net cash provided by operating activities                                           72,667        11,186
                                                                              --------------- ---------------
  Cash flows from investing activities:
  Sale of marketable securities                                                       38,754        43,970
  Decrease/(increase) in cash placed on short-term deposit                            98,342      (22,029)
  Purchase of temporary investments                                                        -      (10,954)
  Maturity of long term investments                                                        -       114,006
  Purchase of long term investments                                                 (11,107)       (7,985)
  Expenses of acquisition of subsidiaries                                                  -         (657)
  Purchase of intangible assets                                                     (32,035)      (15,283)
  Purchase of fixed assets                                                           (6,044)      (15,897)
  Purchase of other assets                                                               547         (543)
  Proceeds from sale of long term investments                                              -        72,593
  Proceeds from sale of fixed assets                                                   1,200        10,265
  Collection on notes receivable                                                           -           748
                                                                              --------------- ---------------
  Net cash provided by investing activities                                           89,657       168,234
                                                                              --------------- ---------------
  
  Cash flows from financing activities:
  Movements on long term debt, capital leases and notes                            (201,876)       (2,826)
  Proceeds from issue of common stock, net of expenses                                  (17)         5,101
  Proceeds from exercise of options                                                   23,201        38,178
                                                                              --------------- --------------
  Net cash (used in)/provided by financing activities                              (178,692)        40,453
                                                                              --------------- --------------
  Effect of foreign exchange rate changes on cash and cash equivalents               (3,910)       (4,416)
  Cash flows used in discontinued operations                                               -       (1,728)
                                                                              --------------- --------------
  Net (decrease)/increase in cash and cash equivalents                              (20,278)       213,729
  Cash and cash equivalents at beginning of period                                    93,266       102,503
                                                                              --------------- --------------
  Cash and cash equivalents at end of period                                          72,988       316,232
                                                                              --------------- --------------
  The cash flows for the six months ended June 30, 2000 have been restated to
  include the cash flows of BioChem Pharma Inc., the merger with whom was
  accounted for as a pooling of interests in accordance with APB 16, Accounting
  for Business Combinations.
  CONSOLIDATED STATEMENT OF COMPREHENSIVE (LOSS)/INCOME
                           (In thousands of U.S. dollars)
                                     (Unaudited)
  
                                                     3 months to       3 months to      6 months to     6 months to
                                                   June 30, 2001     June 30, 2000    June 30, 2001   June 30, 2000
                                                    ------------      ------------     ------------    ------------
  Net (loss)/income                                    (124,191)           128,266         (82,727)         141,226
  Foreign currency translation adjustments                 2,609          (22,677)         (29,563)        (25,788)
  Unrealized holding gains/(losses) on
  marketable securities and non-current
  investments                                                 14             2,618            (196)           4,047
                                                    ------------      ------------     ------------    ------------
  Comprehensive (loss)/income                          (121,568)           108,207        (112,486)         119,485
                                                    ------------      ------------     ------------    ------------
  There are no tax effects related to the items included above.
  SHIRE PHARMACEUTICALS GROUP PLC
                   NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
  
  1.   Summary of Significant Accounting Policies
  
  a) Description of Operations and Principles of Consolidation
  
  Shire is a fast growing international specialty pharmaceutical company with a
  strategic focus on three therapeutic areas, central nervous system disorders,
  oncology and antivirals, and on vaccines.
  
  The Company has a global sales and marketing infastructure with its own direct
  marketing capability in the U.S., Canada, the U.K. and the Republic of Ireland,
  France, Germany, Italy and Spain. Shire also covers the other significant
  pharmaceutical markets indirectly through distributors. The business is managed
  within three operating segments: U.S., International and Global Research and
  Development. Within these 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.
  
  In the U.S., the Company's principal products include Adderall for the treatment
  of Attention Deficit Hyperactivity Disorder, Agrylin for the treatment of
  elevated blood platelets, Pentasa for the treatment of ulcerative colitis,
  Carbatrol for the treatment of epilepsy and ProAmatine for the treatment of
  orthostatic hypotension. In addition, the Company receives royalties on sales of
  Reminyl for the treatment of Alzheimer's disease marketed by Johnson & Johnson,
  and Epivir, Combivir and Trizivir for the treatment of HIV/AIDS and Epivir-HBV
  for the treatment of hepatitis B marketed by GlaxoSmithKline.
  
  Within the International segment, the Company's principal products include:
  
       in the U.K., the Calcichew range, used primarily as adjuncts in the
       treatment of osteoporosis and Reminyl.
  
       in Canada, 3TC, Combivir and Heptovir marketed in partnership with
       GlaxoSmithKline, Amatine, Second Look, a breast cancer diagnostics product
       for which the Company hopes to receive FDA approval in 2001, and Fluviral
       S/F, a vaccine for the prevention of influenza.
  
  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) New Accounting Pronouncements
  
  In July 2001, the FASB issued Statement No. 141 "Business Combinations" and
  Statement No. 142 "Goodwill and Other Intangible Assets". SFAS No. 141 requires
  the use of the purchase method of accounting for all business combinations
  initiated after June 30, 2001. Had the BioChem transaction been initiated after
  this date, it would have been required to be accounted for under the purchase
  method rather than the pooling of interests method. SFAS No. 141 requires
  intangible assets to be recognized if they arise from contractual or legal
  rights or are "separable", i.e., it is feasible that they may be sold,
  transferred, licensed, rented, exchanged or pledged. As a result, it is likely
  that more intangibles will be recognized under SFAS No. 141 than its
  predecessor, APB Opinion No. 16, although in some instances previously
  recognized intangibles will be subsumed into goodwill.
  
  Under SFAS No. 142, goodwill will no longer be amortized on a straight line
  basis over its estimated useful life, but will be tested for impairment on an
  annual basis and whenever indicators of impairment arise. The goodwill
  impairment test, which is based on fair value, is to be preformed on a reporting
  unit level. A reporting unit is defined as a SFAS No. 131 operating segment or
  one level lower. Goodwill will no longer be allocated to other long-lived assets
  for impairment testing under SFAS No 121, "Accounting for the Impairment of
  Long-Lived Assets to be Disposed of". Additionally, goodwill on equity method
  investments will no longer be amortized; however, it will continue to be tested
  for impairment in accordance with Accounting Principles Board Opinion No. 18,
  "The Equity Method of Accounting for Investments in Common Stock". Under SFAS
  No. 142 intangible assets with indefinite lives will not be amortized. Instead
  they will be carried at the lower of cost or market value and tested for
  impairment at least annually. All other recognized intangible assets will
  continue to be amortized over their estimated useful lives.
  SFAS No. 142 is effective for fiscal years beginning after December 15, 2001
  although goodwill on business combinations consummated after July 1, 2001 will
  not be amortized. On adoption the Company may need to record a cumulative effect
  adjustment to reflect the impairment of previously recognized intangible assets.
  In addition, goodwill recognized on prior business combinations will cease to be
  amortized. Had the Company adopted SFAS No. 142 at January 1, 2001 the Company
  would not have recorded a goodwill amortization charge of $5,373,000. The
  Company has not determined the impact that these statements will have on
  intangible assets or whether a cumulative effect adjustment will be required
  upon adoption.
  
  c) Basis of Presentation
  
  The accompanying consolidated financial statements, which include the operations
  of the Company and its wholly owned subsidiaries and the financial information
  included herein, are unaudited. They have been prepared in accordance with
  generally accepted accounting principles in the United States and Securities and
  Exchange Commission regulations for interim reporting. Certain information and
  footnote disclosures normally included in financial statements prepared in
  accordance with generally accepted accounting principles in the United States
  have been condensed or omitted pursuant to such rules and regulations. However,
  such information includes all adjustments (consisting solely of normal recurring
  adjustments), which are, in the opinion of management, necessary to fairly state
  the results of the interim periods. Interim results are not necessarily
  indicative of results to be expected for the full year. These consolidated
  financial statements should be read in conjunction with the Company's audited
  consolidated financial statements for the three years ended December 31, 2000
  and notes thereto. The results for the period ended June 30, 2001 are not
  necessarily indicative of the results that may be expected for the year ending
  December 31, 2001.
  
  2.   Inventory
  
                                      June 30,2001         June 30,2000
                                             $'000                $'000
                                    --------------       --------------
  Finished goods                            18,775               22,648
  Work-in-process                           21,410               10,708
  Raw materials                              7,919               11,768
                                    --------------       --------------
                                            48,104               45,124
                                    --------------       --------------
  3.   Analysis of revenue, operating income 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 U.S., International and
  Global Research and Development, each being managed and monitored separately.
  The Company evaluates performance based on operating income.
  Three months ended June 30, 2001                          U.S.   International              R&D           Total
                                                           $'000           $'000            $'000           $'000
                                                      ----------      ----------       ----------      ----------
  Product sales                                          141,648          30,057                -         171,705
  Licensing and development                                  244               -                -             244
  Royalties                                                  120          38,309                -          38,429
  Other revenues                                               -             471                -             471
                                                      ----------      ----------       ----------      ----------
  Total revenues                                         142,012          68,837                -         210,849
                                                      ----------      ----------       ----------      ----------
  
  Cost of revenues                                        17,616          10,093                -          27,709
  Research and development                                     -               -           41,827          41,827
  Selling, general and administrative                     50,222          25,784                -          76,006
  Asset impairments and restructuring charges
                                                               -          85,447                -          85,447
  Merger transaction expenses                                  -          83,470                -          83,470
  Losses on dispositions of assets                             -           8,098                -           8,098
                                                      ----------      ----------       ----------      ----------
  Total operating expenses                                67,838         212,892           41,827         322,557
                                                      ----------      ----------       ----------      ----------
  Operating income/(loss)                                 74,174       (144,055)         (41,827)       (111,708)
                                                      ----------      ----------       ----------      ----------
  
  Three months ended June 30, 2000                          U.S.   International              R&D           Total
                                                           $'000           $'000            $'000           $'000
                                                      ----------      ----------       ----------      ----------
  Product sales                                           96,449          24,914                -         121,363
  Licensing and development                                  614           3,757                -           4,371
  Royalties                                                   85          33,568                -          33,653
  Other revenues                                               9             167                -             176
                                                      ----------      ----------       ----------      ----------
  Total revenues                                          97,157          62,406                -         159,563
                                                      ----------      ----------       ----------      ----------
  
  Cost of revenues                                        12,483          10,157                -          22,640
  Research and development                                     -               -           39,253          39,253
  Selling, general and administrative                     33,466          22,818                -          56,284
  (Gains)/losses on dispositions of assets                 (282)              17                -           (265)
                                                      ----------      ----------       ----------      ----------
  Total operating expenses                                45,667          32,992           39,253         117,912
                                                      ----------      ----------       ----------      ----------
  Operating income/(loss)                                 51,490          29,414         (39,253)          41,651
                                                      ----------      ----------       ----------      ----------
  Six months ended June 30, 2001                            U.S.    International             R&D             Total
                                                           $'000            $'000           $'000             $'000
                                                      ----------       ----------      ----------        ----------
  Product sales                                          268,452           57,419               -           325,871
  Licensing and development                                2,329              957               -             3,286
  Royalties                                                  180           70,510               -            70,690
  Other revenues                                               -              746               -               746
                                                      ----------       ----------      ----------        ----------
  Total revenues                                         270,961          129,632               -           400,593
                                                      ----------       ----------      ----------        ----------
  
  Cost of revenues                                        35,492           21,493               -            56,985
  Research and development                                     -                -          79,511            79,511
  Selling, general and administrative                     91,853           53,938               -           145,791
  Asset impairments and restructuring charges
                                                               -           85,447               -            85,447
  Merger transaction expenses                                  -           83,470               -            83,470
  Losses on dispositions of assets                             -            8,098               -             8,098
                                                      ----------       ----------      ----------        ----------
  Total operating expenses                               127,345          252,446          79,511           459,302
                                                      ----------       ----------      ----------        ----------
  Operating income/(loss)                                143,616        (122,814)        (79,511)          (58,709)
                                                      ----------       ----------      ----------        ----------
  
  Six months ended June 30, 2000                            U.S.    International             R&D             Total
                                                           $'000            $'000           $'000             $'000
                                                      ----------       ----------      ----------        ----------
  Product sales                                          189,550           47,690               -           237,240
  Licensing and development                                1,990            7,291               -             9,281
  Royalties                                                  129           63,534               -            63,663
  Other revenues                                              13              461               -               474
                                                      ----------       ----------      ----------        ----------
  Total revenues                                         191,682          118,976               -           310,658
                                                      ----------       ----------      ----------        ----------
  
  Cost of revenues                                        25,437           19,660               -            45,097
  Research and development                                     -                -          77,482            77,482
  Selling, general and administrative                     60,018           69,278               -           129,296
  (Gains)/losses on dispositions of assets                 (282)               17               -             (265)
                                                      ----------       ----------      ----------        ----------
  Total operating expenses                                85,173           88,955          77,482           251,610
                                                      ----------       ----------      ----------        ----------
  Operating income/(loss)                                106,509           30,021        (77,482)            59,048
                                                      ----------       ----------      ----------        ----------
  4.  Net (loss)/income per share
  
  Basic net (loss)/income per share is based upon the net (loss)/income available
  to common stockholders divided by the weighted-average number of common shares
  outstanding during the period. Diluted net (loss)/income per share is based upon
  net (loss)/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 of basic and diluted net
  (loss)/income per share:
  3 months to      3 months to      6 months to     6 months to
                                                          June 30, 2001    June 30, 2000    June 30, 2001   June 30, 2000
                                                                  $'000            $'000            $'000           $'000
                                                        ---------------- ---------------- ---------------- ----------------
  Numerator for basic net (loss)/income per share             (124,191)          128,266         (82,727)         141,226
  Interest charged on convertible debt, net of tax                    -              102                -             438
                                                        ---------------- ---------------- ---------------- ----------------
  Numerator for diluted net (loss)/income per share           (124,191)          128,368         (82,727)         141,664
                                                        ---------------- ---------------- ---------------- ----------------
  
  Weighted average number of shares:                      No. of shares    No. of shares    No. of shares   No. of shares
                                                        ---------------- ---------------- ---------------- ----------------
  Basic  - weighted average number of shares                489,977,184      482,234,443      489,205,296     479,509,446
  Effect of dilutive stock options                                    -       12,511,100                -      11,006,728
  Convertible debt                                                    -        1,630,519                -       1,630,519
                                                        ---------------- ---------------- ---------------- ----------------
  Diluted - weighted average number of shares               489,977,184      496,376,062      489,205,296     492,146,693
                                                        ---------------- ---------------- ---------------- ----------------
  Basic net (loss)/income per share                             (25.3c)            26.6c          (16.9c)           29.5c
                                                        ---------------- ---------------- ---------------- ----------------
  Diluted net (loss)/income per share                           (25.3c)            25.9c          (16.9c)           28.8c
                                                        ---------------- ---------------- ---------------- ----------------
  The calculation of the diluted weighted average number of shares for the three
  and six months ended June 30, 2001 excludes the effects of dilutive stock
  options and convertible debt securities issued by the Company because these have
  an antidilutive effect on the calculation in a loss making period.
  
  5.   Restructuring
  
  In May 2001, the Company completed a merger with BioChem Pharma Inc.
  ("BioChem"), an international specialty pharmaceutical company based in
  Montreal, Canada. As a result of the merger, the Company recorded pre tax
  charges in the second quarter of 2001 totalling $177.0 million, comprising asset
  impairment and restructuring costs ($85.4 million), merger related transaction
  expenses ($83.5 million) and a loss from the disposal of a duplicated facility
  in Toronto, Canada ($8.1 million).
  
  The restructuring costs included an impairment charge of $20.9 million to adjust
  intangible asset values, primarily trademark and patent costs but also an
  element of product rights, to their estimated fair value. These charges are
  consistent with the Company's accounting policy to review periodically the
  carrying value of intangible assets and evaluate whether there has been any
  impairment in the carrying value of those intangibles as compared with estimated
  undiscounted future cash flows relating to those intangibles. Other asset
  impairment charges included the write down of long term unquoted investments
  ($24.9 million) and a write down of $30.8 million to a debenture held by
  BioChem, which was received on divestiture of its diagnostics subsidiary. These
  charges are consistent with the Company's policy to provide for other than
  temporary impairments in investment by reference to the fair value of the
  investment using established financial methodologies. There was also a total of
  $8.8 million recorded in respect of employee related costs.
  
  The employee terminations related to the closure of the Toronto facility and the
  elimination of duplicate positions across the combined organization. Shire's
  existing Canadian based sales and marketing operations in Toronto have been
  combined with those of BioChem in Laval. A total of 57 employees were identified
  to be terminated. As of June 30, 2001 virtually all of the planned terminations
  were completed.
  
  6. Debt
  
  During the six months ended June 30, 2001, the Company made repayments of debt
  totaling $201.9 million. These repayments were in respect of a $125.0 million
  term loan owing to Credit Suisse First Boston and $76.9 million repaid to Glaxo
  SmithKline.
  7. Consolidated statement of changes in shareholders' equity
  Accumu-
                                                           Exchange-                             lated
                                      Common    Exchange-    able                                other        Total
                          Common      Stock       able      shares       Additional   Accumu-   compre-     sharehold-
                          Stock         No.      shares       No.          paid-in     lated    hensive       er's
                          Amount      Shares     Amount     shares         capital    deficit    losses      equity
                          $'000        000's     $'000      $'000           $'000      $'000     $'000       $'000
                        ----------- ----------- ------------------------------------------------------------------------
  As at January 1,
  2001                      21,035     257,088          -           -     1,228,705   (14,804)    (60,550)   1,174,386
  Net loss                       -           -          -           -             -   (82,727)           -    (82,727)
  Foreign currency
  translation                    -           -          -           -             -          -    (29,561)    (29,561)
  Unrealized holding
  loss on non-current
  investments                    -           -          -           -             -          -       (196)       (196)
  Issue of shares for
  acquisitions              12,735     179,449    792,220      17,292     (804,955)          -           -           -
  Exchange of
  exchangeable shares        1,529      21,762  (332,340)     (7,254)       330,811          -           -           -
  Options exercised            219       3,093          -           -        22,982          -           -      23,201
  Issuance costs                 -           -          -           -          (17)          -           -        (17)
  Stock option
  compensation                   -           -          -           -         2,352          -           -       2,352
  Tax benefit
  associated with
  exercise of stock
  options                        -           -          -           -         3,307          -           -       3,307
                        ----------- ----------- ------------------------------------------------------------------------
  
  As at June 30, 2001       35,518     461,392    459,880      10,038       783,185   (97,531)    (90,307)   1,090,745
                        ----------- ----------- ------------------------------------------------------------------------
  Each exchangeable share is exchangeable into 3 ordinary shares.
  
  8. Contingent liabilities
  
  (i) Phentermine
  
  Until April 1998, Shire Richwood Inc. ("SRI") distributed products containing
  phentermine, a prescription drug approved in the U.S. as a single agent for
  short term use in obesity. Contrary to the approved labeling of these products,
  physicians in the U.S. 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 U.S. market. Although SRI has ceased to distribute phentermine, the
  drug remains both approved and available in the U.S. 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 June 30, 2001, SRI was named as a defendant in approximately 3,781
  lawsuits and had been dismissed from approximately 3,463 of these cases. There
  were approximately 150 additional cases pending dismissal as of June 30, 2001.
  In only 42 cases in which SRI has been named as a defendant, has it been alleged
  in the complaint or subsequent discovery that the plaintiff had used SRI's
  particular product. 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 Company in respect of phentermine and believes that a liability is neither
  probable nor quantifiable at this stage of litigation.
  
  On August 31, 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.
  
  Legal expenses have been paid by Eon Labs Manufacturing Inc. ("Eon"), the
  suppliers 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 November 30, 2000 between Eon and SRI.
  
  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.
  
  (ii) Emory
  
  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. The Company is aggressively
  defending these patents.
  
  On July 23, 1996, Emory University filed a complaint in the U.S. alleging
  infringement from the commercialisation of Epivir by BioChem and
  GlaxoSmithKline, BioChem's exclusive licensee in the U.S., of an Emory
  University U.S. patent granted that same day. The Company considers this patent
  infringement suit to be without merit and has successfully challenged the
  validity of Emory University's patent.
  
  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 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 November 10, 1999. The
  Board of Patent Appeals and Interferences issued a decision on December 21, 2000
  invalidating Emory's patent. Emory University has appealed the decision. There
  can be no assurance 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 and Norway. 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. The Company
  is aware that Emory University has filed patent applications in other countries,
  which it believes may claim similar subject matter. The Company intends to
  challenge vigorously such patent applications.
  
  (iii) Yale
  
  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.
  The Company believes that this application is licensed to Vion Pharmaceuticals,
  Inc. ("Vion"), formerly known as OncoRx, Inc., a New Haven, Connecticut-based
  company. The Company believes that its patent is valid and intends to vigorously
  defend the patent. The Company is not aware of corresponding patent applications
  by Yale University or Vion in countries other than the U.S. 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.
  
  (iv) Adderall
  
  On September 22, 2000, a lawsuit was filed against Shire 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. Shire filed its answer to the complaint on November 24, 2000
  and discovery related to the litigation is ongoing.
  
  (v) Interests in companies and partnerships
  
  BioChem has undertaken to subscribe to an interest in companies and partnerships
  for amounts totaling $51,624,000. As at June 30, 2001 an amount of $31,823,000
  (December 31, 2000: $25,709,000) has been subscribed. In addition, BioChem has
  undertaken to subscribe to additional amounts and pay royalties on certain
  future sales upon realization of certain conditions.
  ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
          of Operations
  
  The results for the three months and six months ended June 30, 2000 have been
  restated from prior periods to reflect the merger of Shire and BioChem, which
  became effective on May 11, 2001, as if the merger had occurred at the beginning
  of the periods described.
  
  Results of operations for the three months ended June 30, 2001, as compared with
  those for the three months ended June 30, 2000
  
  Overview of financial results
  Total revenues for the three months ended June 30, 2001 increased by 32 per cent
  to $210.8 million as compared to the three months ended June 30, 2000, primarily
  the result of a $50.3 million increase in product sales. After one time merger
  related expenses and restructuring charges of $177.0 million, the Company
  recorded a second quarter net loss of $124.2 million (2000: net income $128.3
  million).
  
  Sales and marketing
  Product sales of $171.7 million represented 81 per cent of total revenues, an
  increase of 41 per cent over second quarter 2000 product sales of $121.4
  million. Product sales in the U.S. continue to represent a significant
  percentage of our worldwide sales, 82 per cent in the three months ended June
  30, 2001 (2000: 79 per cent).
  
  The Company manages and controls the sales and marketing operations on
  geographic lines. The following table presents the Company's net product sales
  by operating segment:
  
                                3 months to     3 months to
  Product sales by segment          June 30,       June 30,
                                       2001            2000
                                      $'000           $'000        % change
  
  United States                     141,648          96,449            46.9
  International                      30,057          24,914            20.6
                               ------------    ------------    ------------
  Total product sales               171,705         121,363            41.5
                               ------------    ------------    ------------
  
  Second quarter sales of Adderall, marketed in the U.S. for the treatment of
  Attention Deficit Hyperactivity Disorder (ADHD), were $69.4 million,
  representing growth of 56 per cent over the second quarter of 2000. Adderall had
  a 32.7 per cent share of the prescription market for ADHD in the U.S. in June
  2001 compared to 32.1 per cent in June 2000. Adderall continues to be the brand
  leader in the U.S. market for ADHD.
  
  Sales of Agrylin, the only U.S. product licensed for the treatment of essential
  thrombocythemia were $25.8 million, a 39 per cent increase over second quarter
  2000 sales of $18.5 million. Shire achieved a prescription share of 21.3 per
  cent of the total U.S. Agrylin market, including Hydrea and generic hydroxyurea,
  in June 2001 compared to 16.7 per cent in June 2000.
  
  Sales of Pentasa, licensed for the treatment of ulcerative colitis, at $19.1
  million, were 45 per cent higher than the comparable period last year. Pentasa
  had a 17.8 per cent share of the oral mesalamine/obsalazine market in June 2001
  compared to 18.0 per cent in June 2000.
  
  Carbatrol, one of the most widely used first line treatments for epilepsy,
  recorded sales growth of 87 per cent from sales of $5.3 million in the three
  months ended June 30, 2000 to $9.9 million in the three months ended June 30,
  2001. This translates to 33.8 per cent of the U.S. extended release
  carbamazepine prescription market in June 2001, compared to 28.1 per cent in
  June 2000.
  Licensing
  Licensing and development fees in the three months ended June 30, 2001 fell by
  94 per cent to $0.2 million compared to $4.4 million in the three months ended
  June 30, 2000. The decrease is mainly due to the reduction in recovery of
  development costs for Reminyl, an Alzheimer's drug, launched by Janssen ("J&J")
  in the US market in May 2001.
  
  Royalties
  Royalties increased by $4.8 million, up 14 per cent to $38.4 million. The
  Company receives royalties from GlaxoSmithKline on the worldwide sales of 3TC,
  for the treatment of HIV infection / AIDS, and Zeffix, an oral treatment for
  chronic hepatitis B. Additionally, the Company receives royalties from J&J for
  Reminyl.
  
  Cost of sales and operating expenses
  Gross margin on product sales increased from 81 per cent for the three months
  ended June 30, 2000 to 84 per cent for the three months ended June 30, 2001.
  This is a reflection of the product mix as the higher margin products, Adderall
  and Agrylin, represented approximately 55 per cent of total product sales in the
  three months ended June 30, 2001 compared to 52 per cent in the three months
  ended June 30, 2000. Pre announced pricing changes in respect of Adderall have
  also benefited the gross margin in three months ended June 30, 2001.
  
  R&D expenditure increased 7 per cent to $41.8 million for the three months ended
  June 30, 2001 (Q2 2000: $39.3 million). R&D expenditure in second quarter 2001
  represented 20 per cent of revenues compared to 25 per cent in second quarter
  2000 and 23 per cent for full year 2000.
  
  Selling, general and administrative expenses, excluding the effects of a stock
  option compensation charge of $0.2 million (Q2 2000: $0.2 million) and
  depreciation and amortization of $11.2 million (Q2 2000: $9.4 million),
  increased by 38 per cent to $64.6 million for the three months ended June 30,
  2001 (Q2 2000: $46.6 million). As a percentage of product sales, selling,
  general and administrative costs represented 38 per cent for the second quarter
  2001, consistent with second quarter 2000.
  
  The 19 per cent increase in depreciation and amortization for the three months
  ended June 30, 2001 is attributable to the purchase of several new products in
  Europe since June last year.
  
  Restructuring
  In May 2001, the Company completed a merger with BioChem, an international
  specialty pharmaceutical company based in Montreal, Canada. As a result of the
  merger, the Company recorded pre-tax charges in the second quarter of 2001
  totalling $177.0 million, comprising asset impairment and restructuring costs
  ($85.4 million), merger related transaction expenses ($83.5 million), and a loss
  from the disposal of a duplicated facility in Toronto, Canada ($8.1 million).
  
  The restructuring costs included an impairment charge of $20.9 million to adjust
  intangible asset values, primarily trademark and patent costs but also an
  element of product rights, to their estimated fair value. These charges are
  consistent with the Company's accounting policy to review periodically the
  carrying value of intangible assets and evaluate whether there has been any
  impairment in the carrying value of those intangibles as compared with estimated
  undiscounted future cash flows relating to those intangibles. Other asset
  impairment charges included the write down of long term unquoted investments
  ($24.9 million) and a write down of $30.8 million to a debenture held by
  BioChem, which was received on divestiture of its diagnostics subsidiary. These
  charges are consistent with the Company's policy to provide for other than
  temporary impairments in investment by reference to the fair value of the
  investment using established financial methodologies. There was also a total of
  $8.8 million recorded in respect of employee related costs.
  
  The employee terminations related to the closure of the Toronto facility and the
  elimination of duplicate positions across the combined organization. Shire's
  existing Canadian based sales and marketing operations in Toronto have been
  combined with those of BioChem in Laval. A total of 57 employees were identified
  to be terminated. As of June 30, 2001 virtually all of the planned terminations
  were completed.
  
  The Company anticipates realizing annual savings resulting from post merger
  operating synergies in the range of $10 - 15 million per annum.
  Income taxes
  For the three months ended June 30, 2001 income taxes increased $8.5 million to
  $17.7 million from $9.2 million for the three months ended June 30, 2000. The
  Company's effective tax rate before the stock compensation charge and
  exceptional items was 25 per cent for the three months ended June 30, 2001 (Q2
  2000: 22 per cent). The Company has recorded net deferred tax assets of $19.5
  million. Realization is dependent upon generating sufficient taxable income to
  utilize such assets. Although realization on these assets is not assured,
  management believes it is more likely than not that the deferred tax assets will
  be realized.
  
  Results of operations for the six months ended June 30, 2001, as compared with
  those for the six months ended June 30, 2000
  
  Overview of financial results
  Total revenues for the six months ended June 30, 2001 were $400.6 million, an
  increase of $89.9 million or 29 per cent over the six months ended June 30,
  2000. After one time merger related expenses and restructuring charges of $177.0
  million, the Company recorded a net loss of $82.7 million (2000: $141.2 million
  net income). Net income for the six months to June 30, 2001 includes an APB 25
  charge of $2.4 million compared to $23.5 million for the six months ended June
  30, 2000.
  
  Sales and marketing
  Product sales were $325.9 million in the six months ended June 30, 2001 (2000:
  $237.2 million), representing an increase of 37 per cent. Of particular note,
  Adderall sales at $139.6 million were 41 per cent higher than in the first half
  of 2000.
  
  Other products contributing to the overall 37 per cent increase were Agrylin
  (increase of $13.4 million or 45 per cent), Carbatrol (increase of $8.6 million
  or 79 per cent) and ProAmatine (increase of $8.6 million or 92 per cent).
  
  U.S. product sales for the six months ended June 30, 2001 represented 82 per
  cent of the Company's total sales revenues (2000: 80 per cent).
  
  Product sales by segment      6 months to     6 months to
                                   June 30,        June 30,        % change
                                       2001            2000
                                      $'000           $'000
  
  United States                     268,452         189,550            41.6
  International                      57,419          47,690            20.4
                               ------------    ------------    ------------
  Total product sales               325,871         237,240            37.4
                               ------------    ------------    ------------
  
  Licensing
  Licensing and development fees for the six months ended June 30, 2001 decreased
  by 65 per cent to $3.3 million compared to $9.3 million for the six months ended
  June 30, 2000.
  
  Royalties increased by $7.0 million to $70.7 million for the six months ended
  June 30, 2001.
  
  Cost of sales and operating expenses
  Gross margin on product sales increased to 83 per cent for the six months ended
  June 30, 2001 compared to 81 per cent for the six months ended June 30, 2000.
  
  R&D expenditure increased by 3 per cent to $79.5 million for the six months
  ended June 30, 2001 (2000: $77.5 million). R&D expenditure for the six months
  ended June 30, 2001 represents 20 per cent of revenues compared to 25 per cent
  for the six months ended June 30, 2000.
  
  Excluding the effects of the APB25 charge, depreciation and amortization
  charges, the underlying selling, general and administrative expenses increased
  by 39 per cent to $121.4 million for the six months ended June 30, 2001 (2000:
  $87.1 million) in line with the expansion of the business.
  Depreciation and amortization increased by 18 per cent to $22.0 million (2000:
  $18.7 million). As noted above, this increase reflects the amortization charge
  on those intangible assets acquired since the second quarter of 2000.
  
  Income taxes
  For the six months ended June 30, 2001 income taxes were $31.6 million,
  representing an effective rate of tax on income pre APB 25 charge of 25 per cent
  (2000: 24 per cent).
  
  Liquidity and Financial Condition
  The Company's funding requirements depend on a number of factors, including the
  Company's product development programs, business and product acquisitions, the
  level of resources required for the expansion of marketing capabilities as the
  product base expands, increased investment in accounts receivable and inventory
  which may arise as sales levels increase, competitive and technological
  developments, the timing and cost of obtaining required regulatory approvals for
  new products and the continuing revenues generated from sales of its key
  products.
  
  At June 30, 2001, the Company had net cash funds available as follows:
  
                                                       June 30,     December 31,
                                                           2001             2000
                                                          $'000            $'000
                                                 --------------   --------------
  Cash and cash equivalents                              72,988           93,266
  Marketable securities and other current
    asset investments                                   230,337          370,425
  Debt                                                  (8,575)        (213,874)
                                                 --------------   --------------
  Net cash                                              294,750          249,817
                                                 --------------   --------------
  
  Net cash provided by operating activities for the six months ended June 30, 2001
  was $72.7 million compared to $11.2 million for the six months ended June 30,
  2000.
  
  Investing activities provided $89.7 million for the six months ended June 30,
  2001 (2000: $168.2 million). A reduction in cash placed on short term deposit
  and redemption of marketable securities of $137.1 million was offset by net
  capital expenditure on long term investments, intangible assets and fixed assets
  of $47.4 million.
  
  Financing activities utilized $178.7 million for the six months ended June 30,
  2001 (2000: generation of $40.5 million). Repayments of long term debt totalling
  $201.9 million were offset by $23.2 million received from exercises of employee
  stock options. The repayments of debt were in respect of a $125.0 million term
  loan owing to Credit Suisse First Boston and $76.9 million repaid to Glaxo
  SmithKline. In part, cash funds released from short term investments, as noted
  above, were used to settle the long term debts outstanding.
  
  Capital expenditure
  Capital expenditure on tangible fixed assets for the six months ended June 30,
  2001 was $6.0 million, which included $1.7 million of equipment related to the
  Company's new head office facility occupied from March 2001. Expenditure was
  offset by $1.2 million in proceeds received on the disposal of the Toronto
  facility. Other capital expenditure related to the purchase of long term
  investments ($11.1 million) and $31.5 million for new products, including
  Monocid and Indurgan marketed by the Company's Spanish and Italian operations.
  ITEM 3.  Qualitative and Quantitative Disclosures about Market Risk
  
  Shire's principal treasury operations are managed by the Company's treasury
  function based in the U.K. in accordance with the Company's treasury policies
  and procedures which are approved by Shire's Board of Directors. As a matter of
  policy, Shire does not undertake speculative transactions that would increase
  its currency or interest rate exposure.
  
  The Company is subject to market risk exposure in the following areas:
  
  Interest rate market risk
  
  The Company has cash and cash equivalents on which interest is earned at
  variable rates.
  
  Since December 31, 2000 the Company has repaid in full a long term loan
  outstanding to Credit Suisse First Boston and amounts due to Glaxo SmithKline
  under a promissory note. Thus, as at June 30, 2001 the Company's exposure to
  interest rate market risk on debts outstanding is much reduced.
  
  The Company has short term and long term debt liabilities denominated in foreign
  currencies. As at June 30, 2001, a total of $5.6 million was outstanding
  (December 31, 2000: $6.0 million). The underlying currency was Canadian dollars.
  
  Foreign exchange market risk
  
  The Company and a number of subsidiary operations are located outside the U.S.
  As such, the consolidated financial results are subject to fluctuations in
  exchange rates, particularly between the British pound, Canadian dollar and the
  U.S. dollar. The financial statements of foreign entities are translated using
  the accounting policies described in Note 1 of the Notes to the consolidated
  financial statements filed on Form 10K. The exposure to foreign exchange market
  risk is managed by the Company's treasury function, using forecasts provided by
  the operating units.
  PART II.   OTHER INFORMATION
  
  ITEM 1. LEGAL PROCEEDINGS
  
  (i) Phentermine
  
  Until April 1998, Shire Richwood Inc. ("SRI") distributed products containing
  phentermine, a prescription drug approved in the U.S. as a single agent for
  short term use in obesity. Contrary to the approved labeling of these products,
  physicians in the U.S. 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 U.S. market. Although SRI has ceased to distribute phentermine, the
  drug remains both approved and available in the U.S. 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 June 30, 2001, SRI was named as a defendant in approximately 3,781
  lawsuits and had been dismissed from approximately 3,463 of these cases. There
  were approximately 150 additional cases pending dismissal as of June 30, 2001.
  In only 42 cases in which SRI has been named as a defendant, has it been alleged
  in the complaint or subsequent discovery that the plaintiff had used SRI's
  particular product. 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 Company in respect of phentermine
  and believes that a liability is neither probable nor quantifiable at this stage
  of litigation.
  
  On August 31, 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.
  
  Legal expenses have been paid by Eon Labs Manufacturing Inc. ("Eon"), the
  suppliers 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 November 30, 2000 between Eon and SRI.
  
  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.
  
  (ii) Emory
  
  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. The Company is aggressively
  defending these patents.
  On July 23, 1996, Emory University filed a complaint in the U.S. alleging
  infringement from the commercialisation of Epivir by BioChem and
  GlaxoSmithKline, BioChem's exclusive licensee in the U.S., of an Emory
  University U.S. patent granted that same day. The Company considers this patent
  infringement suit to be without merit and has successfully challenged the
  validity of Emory University's patent.
  
  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 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 November 10, 1999. The
  Board of Patent Appeals and Interferences issued a decision on December 21, 2000
  invalidating Emory's patent. Emory University has appealed the decision. There
  can be no assurance 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 and Norway. 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. The Company is aware that Emory University
  has filed patent applications in other countries, which it believes may claim
  similar subject matter. The Company intends to challenge vigorously such patent
  applications.
  
  (iii) Yale
  
  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.
  The Company believes that this application is licensed to Vion Pharmaceuticals,
  Inc. ("Vion"), formerly known as OncoRx, Inc., a New Haven, Connecticut-based
  company. The Company believes that its patent is valid and intends to vigorously
  defend the patent. The Company is not aware of corresponding patent applications
  by Yale University or Vion in countries other than the U.S. 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.
  
  (iv) Adderall
  
  On September 22, 2000, a lawsuit was filed against Shire 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. Shire filed its answer to the complaint on November 24, 2000
  and discovery related to the litigation is ongoing.
  ITEM 2. CHANGES IN SECURITIES
  
  None
  
  ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
  None
  
  ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
  An Annual General Meeting of Shareholders was held on June 5, 2001. The
  following resolutions were adopted by the margins indicated:
  
  Ordinary resolution to receive and consider the Directors' Report and Accounts
  for the year ended December 31, 2000.
  
               For            Against             Open           Abstentions
           129,067,094         57,781          1,835,007          1,622,643
  
  Ordinary resolution to re-appoint Arthur Andersen as Auditors and authorize the
  Directors to fix their remuneration.
  
               For             Against            Open           Abstentions
           125,947,052        3,361,017        1,836,479          1,437,977
  
  Ordinary resolution to re-elect Mr Angus Russell as Director.
  
               For            Against             Open           Abstentions
           128,804,462        330,209          1,840,232          1,607,622
  
  Ordinary resolution to re-elect Dr Wilson Totten as Director.
  
               For            Against             Open           Abstentions
           128,922,428        212,048          1,840,442          1,607,607
  
  Ordinary resolution to re-elect Dr Bernard Canavan as Director.
  
               For             Against            Open           Abstentions
           125,153,717        3,450,868        1,840,442          2,137,498
  
  Ordinary resolution, conditional on completion of the Company's merger with
  BioChem Pharma Inc., to elect Dr Francesco Bellini as Director.
  
               For            Against             Open           Abstentions
           128,944,337        176,765          1,840,442          1,620,981
  
  Ordinary resolution, conditional on completion of the Company's merger with
  BioChem Pharma Inc., to elect the Hon James Andrews Grant as Director.
  
               For            Against             Open           Abstentions
           128,974,746        146,909          1,840,442          1,620,428
  Ordinary resolution, conditional on completion of the Company's merger with
  BioChem Pharma Inc., to elect Mr Gerard Veilleux as Director.
  
               For         Against             Open         Abstentions
           128,971,382     149,295          1,840,442        1,621,406
  
  Special resolution that options may be granted under the Shire Pharmaceuticals
  Group plc 2000 Executive Share Option Scheme subject to satisfaction of
  performance conditions prior to and not subsequent to grant as more particularly
  described in the Chairman's letter to shareholders dated April 27, 2001.
  
               For          Against           Open          Abstentions
           114,896,437     10,492,038      1,849,642         5,344,408
  
  ITEM 5. OTHER INFORMATION
  
  Adderall XR
  
  On August 3, 2001, Shire announced that Adderall XR, a once daily treatment
  under review for Attention Deficit Hyperactivity Disorder ("ADHD"), had received
  an `approvable letter' from the U.S. Food and Drug Administration ("FDA"). An
  approvable letter is an official communication from the FDA indicating that the
  agency is prepared to approve the new drug application upon the finalization of
  the labelling and satisfaction of any outstanding issues specified in that
  letter. The New Drug Application ("NDA"), which was submitted to the FDA on
  October 3, 2000, was based on studies involving over 600 patients and was one of
  the largest ever medication trials in ADHD research. The positive results from
  these studies have been presented at various scientific meetings throughout the
  past year. Adderall XR is a once daily formulation containing the same active
  ingredients as Adderall (mixed salts of a single entity amphetamine product),
  which was developed by Shire's drug delivery division, Shire Laboratories Inc.
  using the Microtrol oral controlled release technology.
  
  ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
  
  (a)  Reports on Form 8-K
  
       During the second quarter ended June 30, 2001, the following reports on
       Form 8-K were filed by the Company with the Securities and Exchange
       Commission:
  
       Form 8-K (Item 5 - Other Events), date of earliest event reported April 26,
       2001, with respect to press release announcement of first quarter results.
  
       Form 8-K (Item 7 - Financial Statements and Exhibits), date of earliest
       event reported May 9, 2001, with respect to presentation relating to first
       quarter results and BioChem Pharma Inc. merger.
  
       Form 8-K (Item 7 - Financial Statements and Exhibits), date of earliest
       event reported May 15, 2001, with respect to description of Shire share
       capital.
  
       During the period between June 30, 2001 and the filing of this Form 10-Q,
       the following reports on Form 8-K were filed by the Company with the
       Securities and Exchange Commission:
  
       Form 8-K (Item 5 - Other Events), date of earliest event reported July 17,
       2001, with respect to press release of historical financial data in US GAAP
       format.
  
       Form 8-K as amended (Item 5 - Other Events, and Item 7 - Financial
       Statements and Exhibits), date of earliest event reported July 23, 2001,
       with respect to press release announcement of second quarter results.
  
       Form 8-K (Item 7 - Financial Statements and Exhibits), date of earliest
       event reported July 23, 2001, with respect to presentation relating to
       second quarter results.
  SIGNATURES
  
  Pursuant to the requirements of the Securities Exchange Act of 1934, the
  Registrant has duly caused this Report to be signed on its behalf by the
  undersigned thereunto duly authorized.
  
  SHIRE PHARMACEUTICALS GROUP PLC
  (Registrant)
  
  Date:    August 13, 2001            By:     Angus C Russell
                                              Group Finance Director
  
  Date:    August 13, 2001            By:     Rolf Stahel
                                              Chief Executive