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 September 30, 2000
  
                           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.)
  
  East Anton, Andover, Hampshire SP10 5RG England
      (Address of principal executive offices)              (Zip Code)
  
                                   44 1264 333 455
                (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 October 31, 2000
  
  Common Stock: Ordinary Shares                         256,134,685
  
  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 commercialisation, the impact of competitive products,
  patents, and other risks and uncertainties, including those detailed from time
  to time in periodic reports, including the Annual Report filed on Form 10-K by
  Shire with the 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)
  
                                                                                     September 30,          December 31,
                                                                                              2000                  1999
                                                                                       (Unaudited)
  ASSETS                                                                               -----------           -----------
  <S>                                                                                      <C>                    <C>
  Current assets:
  Cash and cash equivalents                                                                160,524                54,082
  Marketable securities and other current asset investments                                  9,139                84,344
  Accounts receivable, net                                                                  89,630                59,018
  Inventories, net                                                                          38,665                39,538
  Deferred tax asset                                                                        11,618                 5,312
  Prepaid expenses and other current assets                                                 10,622                 9,012
                                                                                      ------------          ------------
  Total current assets                                                                     320,198               251,306
  
  Investments                                                                                5,412                 2,604
  Property, plant and equipment, net                                                        28,649                37,484
  Intangible assets, net                                                                   538,255               557,934
  Deferred tax asset                                                                        17,451                31,799
  Other assets                                                                               6,319                 6,636
                                                                                      ------------          ------------
  Total assets                                                                             916,284               887,763
                                                                                      ------------          ------------
  LIABILITIES AND SHAREHOLDERS' EQUITY
  Current liabilities:
  Current instalments of long-term debt                                                      1,412                 9,608
  Accounts and notes payable                                                                77,828               114,509
  Other current liabilities                                                                 29,075                48,703
                                                                                      ------------          ------------
  Total current liabilities                                                                108,315               172,820
  
  Long-term debt, excluding current instalments                                            126,413               126,314
  Other long-term liabilities                                                                  422                 1,345
                                                                                      ------------          ------------
  Total liabilities                                                                        235,150               300,479
                                                                                      ------------          ------------
  Shareholders' equity:
  Common stock, 5p par value; 400,000,000 shares authorised; and
  255,563,638 shares issued and outstanding (1999: 244,519,024)                             20,926                20,063
  Additional paid-in capital                                                               912,281               832,650
  Accumulated other comprehensive losses                                                  (35,265)              (10,303)
  Accumulated deficit                                                                    (216,808)             (255,126)
                                                                                      ------------          ------------
  Total shareholders' equity                                                               681,134               587,284
                                                                                      ------------          ------------
  Total liabilities and shareholders' equity                                               916,284               887,763
                                                                                      ------------          ------------
  </TABLE>
  
  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     9 months to          9 months to
                                                          September      September       September            September
                                                           30, 2000       30, 1999        30, 2000             30, 1999
                                                       ------------     ------------    ------------      ------------
  <S>                                                       <C>              <C>             <C>               <C>
  Product sales                                             131,810          102,491         362,921           283,346
  Licensing and development                                   5,063            2,024          14,344             9,771
  Royalties                                                     685              548           2,608             2,318
  Other revenues                                                257              721             732             1,708
                                                       ------------     ------------    ------------      ------------
  Total revenues                                            137,815          105,784         380,605           297,143
  
  Costs and expenses:
  Cost of sales                                              25,811           26,403          67,396            69,143
  Research and development                                   31,659           19,868          86,333            51,516
  Selling, general and administrative (inclusive             45,595           41,847         159,080           124,896
  of stock option compensation charge of $206
  $3,285, $23,688 and $10,343 respectively)
                                                       ------------     ------------    ------------      ------------
  Total operating expenses                                  103,065           88,118         312,809           245,555
                                                       ------------     ------------    ------------      ------------
  Operating income                                           34,750           17,666          67,796            51,588
  
  
  Interest income                                             1,126            1,761           4,264             5,375
  Interest expense                                          (2,230)          (2,397)         (8,563)           (7,290)
  Other income/(expense), net                                 (334)            (224)             113              (96)
                                                       ------------     ------------    ------------      ------------
  Total other expenses                                      (1,438)            (860)         (4,186)           (2,011)
                                                        -----------      -----------    ------------      ------------
  Income before income taxes                                 33,312           16,806          63,610            49,577
  
  Income taxes                                             (10,099)          (7,513)        (25,292)          (20,609)
                                                       ------------     ------------    ------------      ------------
  Net income                                                 23,213            9,293          38,318            28,968
                                                       ------------     ------------    ------------      ------------
  
  Net income per share:
  Basic                                                       $0.09            $0.04           $0.15             $0.12
  Diluted                                                     $0.09            $0.04           $0.15             $0.12
  
  Weighted average number of shares:
  Basic                                                 254,965,642      243,312,483     251,191,036       241,977,657
  Diluted                                               263,664,249      251,446,294     259,639,689       249,505,550
  </TABLE>
  
  The results for the three months and nine months ended September 30, 1999 have
  been restated to include the results of Roberts Pharmaceutical Corporation which
  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
  
                                              CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
  
                                                      (In thousands of U.S. dollars)
                                                                (Unaudited)
  
                                                                                        9 months to       9 months to
                                                                                      September 30,     September 30,
                                                                                               2000              1999
                                                                                         ----------        ----------
  <S>                                                                                        <C>                <C>
  Net cash provided by operating activities                                                   9,817            62,653
                                                                                         ----------        ----------
  Cash flows from investing activities:
  Redemption of marketable securities, net                                                   75,205             4,165
  Increase in cash placed on short-term deposit                                                   -          (45,477)
  Purchase of long term investment                                                          (2,843)                 -
  Expenses of acquisition of subsidiaries                                                     (657)                 -
  Purchase of intangible assets                                                            (16,029)          (40,299)
  Purchase of fixed assets                                                                  (6,646)           (4,311)
  Proceeds from sale of fixed assets                                                         12,039             1,407
  Collection on notes receivable                                                                766             5,536
                                                                                         ----------        ----------
  Net cash provided by/(used in) investing activities                                        61,835          (78,979)
                                                                                         ----------        ----------
  
  Cash flows from financing activities:
  Payments on long term debt, capital leases and notes                                      (8,097)           (8,241)
  Proceeds from issue of common stock                                                         2,783             4,834
  Proceeds from exercise of options                                                          43,047             3,295
                                                                                         ----------        ----------
  Net cash provided by/(used in) financing activities                                        37,733             (112)
                                                                                         ----------        ----------
  Effect of foreign exchange rate changes on cash and cash equivalents                      (2,943)                68
                                                                                         ----------        ----------
  Net increase/(decrease) in cash and cash equivalents                                      106,442          (16,370)
  Cash and cash equivalents at beginning of period                                           54,082            52,973
                                                                                         ----------        ----------
  Cash and cash equivalents at end of period                                                160,524            36,603
                                                                                         ----------        ----------
  </TABLE>
  
  The cash flows for the nine months ended September 30, 1999 have been restated
  to include the results of Roberts Pharmaceutical Corporation which 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 STATEMENT OF COMPREHENSIVE INCOME
  
                                                      (In thousands of U.S. dollars)
                                                                (Unaudited)
  
  
                                                                  3 months to   3 months to   9 months to     9 months to
                                                                    September     September     September       September
                                                                     30, 2000      30, 1999      30, 2000        30, 1999
                                                                 ------------  ------------  ------------  ------------
  <S>                                                                  <C>            <C>          <C>          <C>
  Net income                                                           23,213         9,293        38,318       28,968
  Foreign currency translation adjustments                            (7,463)       (1,871)      (24,962)     (15,698)
                                                                 ------------  ------------  ------------  ------------
  Comprehensive income                                                 15,750         7,422        13,356       13,270
                                                                 ------------  ------------  ------------  ------------
  </TABLE>
  There are no tax effects related to the items included above.
  
  The results for the three months and nine months ended September 30, 1999 have
  been restated to include the results of Roberts Pharmaceutical Corporation which
  was accounted for as a pooling of interests in accordance with APB 16,
  Accounting for Business Combinations.
  
  <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 Pharmaceuticals Group plc is an international specialty pharmaceutical
  company with a strategic focus on four therapeutic areas: central nervous system
  disorders, metabolic diseases, oncology and gastroenterology. The Company's
  principal products include Adderall, for the treatment of Attention Deficit
  Hyperactivity Disorder, Agrylin, for the treatment of thrombocythemia, and
  Pentasa, for the treatment of ulcerative colitis.
  
  The Group has operations in the United States, Europe and the rest of the world.
  Within these geographic operating segments, revenues are derived from three
  sources: sales of products by the Company's own sales and marketing operations,
  licensing and development fees, and royalties.
  
  The accompanying consolidated financial statements include the accounts of Shire
  Pharmaceuticals Group plc and all its subsidiary undertakings after elimination
  of intercompany accounts and transactions.
  
  b) New Accounting Pronouncements
  
  In June 1998, the FASB issued Statement No. 133, "Accounting for Derivative
  Instruments and Hedging Activities". This Statement requires that all
  derivatives be recorded in the balance sheet as either an asset or liability
  measured at its fair value and that changes in the derivative's fair value be
  recognized currently in earnings unless specific hedge accounting criteria are
  met. In June 1999, the FASB issued SFAS No. 137, "Accounting for Derivative
  Instruments and Hedging Activities - Deferral of the Effective Date of FASB
  Statement No. 133". This Statement defers for one year the effective date of
  SFAS 133 to all fiscal quarters of all fiscal years beginning after June 15,
  2000.
  
  In June 2000, the FASB issued Statement No. 138, "Accounting for Certain
  Derivative Instruments and Certain Hedging Activities - an Amendment of FASB
  Statement No. 133". SFAS 138 amends SFAS 133 to (a) exclude from the scope of
  SFAS No. 133 nonfinancial assets that will be delivered in quantities expected
  to be used or sold by the company over a reasonable period in the normal course
  of business and for which physical delivery is probable, (b) permit hedging of a
  benchmark interest rate, (c) allow hedging of foreign-currency-denominated
  assets and liabilities and (d) allow for limited hedging of net foreign currency
  exposures.
  
  In December 1999, the Securities and Exchange Commission (SEC) issued Staff
  Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" (SAB
  101). SAB 101 outlines the SEC's views on applying generally accepted accounting
  principles to revenue recognition in financial statements. Specifically, the
  bulletin provides both general and specific guidance as to the periods in which
  companies should recognize revenues. In addition, SAB 101 also highlights
  factors to be considered when determining whether to recognize revenues on a
  gross or net basis. SAB 101, as amended by SAB 101/A and SAB101/B, is effective
  beginning no later than their fourth fiscal quarter of the fiscal year beginning
  after December 15, 1999; as the Group is a calendar year-end company, this would
  be the quarter ending December 31, 2000.
  
  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. 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. It is suggested that these consolidated financial
  statements be read in conjunction with the Company's audited consolidated
  financial statements for the three years ended December 31, 1999 and notes
  thereto.
  
  
  <PAGE>
  
  2.       Inventory
  
  Inventory consists of:
  
                                    September 30,         December 31,
                                             2000                 1999
                                   --------------       --------------
  Finished goods                           20,591               26,573
  Work-in-process                           9,021                6,389
  Raw materials                             9,053                6,576
                                   --------------       --------------
                                           38,665               39,538
                                   --------------       --------------
  
  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 geographic, each being
  managed and monitored separately and serving different markets. The Company
  evaluates performance based on operating income.
  
  <TABLE>
  <CAPTION>
  Three months ended September 30, 2000                                                        Rest of
                                                                U.S.           Europe            World              Total
                                                               $'000            $'000            $'000              $'000
                                                          ----------       ----------       ----------         ----------
  <S>                                                        <C>               <C>               <C>              <C>
  Product sales                                              111,069           14,939            5,802            131,810
  Licensing and development                                      884            4,179                -              5,063
  Royalties                                                       92              568               25                685
  Other revenues                                                   3                -              254                257
                                                          ----------       ----------       ----------         ----------
  Total revenues                                             112,048           19,686            6,081            137,815
                                                          ----------       ----------       ----------         ----------
  
  Cost of revenues                                            17,357            5,848            2,606             25,811
  Research and development                                    20,396           11,263                -             31,659
  Selling, general and administrative                         29,162           14,616            1,817             45,595
                                                          ----------       ----------       ----------         ----------
  Total operating expenses                                    66,915           31,727            4,423            103,065
                                                          ----------       ----------       ----------         ----------
  Operating income/(loss)                                     45,133         (12,041)            1,658             34,750
                                                          ----------       ----------       ----------         ----------
  
  Three months ended September 30, 1999                                                        Rest of
                                                                U.S.           Europe            World              Total
                                                               $'000            $'000            $'000              $'000
                                                          ----------       ----------       ----------         ----------
  Product sales                                               84,369           14,057            4,065            102,491
  Licensing and development                                        -            2,024                -              2,024
  Royalties                                                        -              548                -                548
  Other revenues                                                 329                -              392                721
                                                          ----------       ----------       ----------         ----------
  Total revenues                                              84,698           16,629            4,457            105,784
                                                          ----------       ----------       ----------         ----------
  Cost of revenues                                            18,640            5,214            2,549             26,403
  Research and development                                    14,361            5,495               12             19,868
  Selling, general and administrative                         26,667           13,698            1,482             41,847
                                                          ----------       ----------       ----------         ----------
  Total operating expenses                                    59,668           24,407            4,043             88,118
                                                          ----------       ----------       ----------         ----------
  Operating income/(loss)                                     25,030          (7,778)              414             17,666
                                                          ----------       ----------       ----------         ----------
  
  <PAGE>
  
  Nine months ended September 30, 2000                                                         Rest of
                                                                U.S.           Europe            World              Total
                                                               $'000            $'000            $'000              $'000
                                                          ----------       ----------       ----------         ----------
  Product sales                                              300,619           45,290           17,012            362,921
  Licensing and development                                    2,874           11,470                -             14,344
  Royalties                                                      221            2,362               25              2,608
  Other revenues                                                  16                -              716                732
                                                          ----------       ----------       ----------         ----------
  Total revenues                                             303,730           59,122           17,753            380,605
                                                          ----------       ----------       ----------         ----------
  
  Cost of revenues                                            42,794           17,241            7,361             67,396
  Research and development                                    57,180           29,110               43             86,333
  Selling, general and administrative                         88,020           65,565            5,495            159,080
                                                          ----------       ----------       ----------         ----------
  Total operating expenses                                   187,994          111,916           12,899            312,809
                                                          ----------       ----------       ----------         ----------
  Operating income/(loss)                                    115,736         (52,794)            4,854             67,796
                                                          ----------       ----------       ----------         ----------
  
  Nine months ended September 30, 1999                                                         Rest of
                                                                U.S.           Europe            World              Total
                                                               $'000            $'000            $'000              $'000
                                                          ----------       ----------       ----------         ----------
  Product sales                                              232,413           39,204           11,729            283,346
  Licensing and development                                    1,097            8,674                -              9,771
  Royalties                                                        -            2,318                -              2,318
  Other revenues                                                 517                -            1,191              1,708
                                                          ----------       ----------       ----------         ----------
  Total revenues                                             234,027           50,196           12,920            297,143
                                                          ----------       ----------       ----------         ----------
  Cost of revenues                                            42,541           15,165           11,437             69,143
  Research and development                                    31,152           20,330               34             51,516
  Selling, general and administrative                         82,044           38,398            4,454            124,896
                                                          ----------       ----------       ----------         ----------
  Total operating expenses                                   155,737           73,893           15,925            245,555
                                                          ----------       ----------       ----------         ----------
  Operating income/(loss)                                     78,290         (23,697)          (3,005)             51,588
                                                          ----------       ----------       ----------         ----------
  </TABLE>
  
  4.  Net income per share
  
  Basic net income per share is based upon the net income available to common
  stockholders divided by the weighted-average number of common shares outstanding
  during the period. Diluted net income per share is based upon net 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 income
  per share:
  
  <TABLE>
  <CAPTION>
                                                               3 months to       3 months to       9 months to      9 months to
                                                             September 30,     September 30,     September 30,    September 30,
                                                                      2000              1999              2000             1999
                                                          ----------------  ----------------  ----------------  ----------------
  
  <S>                                                               <C>                <C>              <C>              <C>
  Numerator for basic net income per share                          23,213             9,293            38,318           28,968
  Interest charged on convertible debt, net of tax                      73                 -                 -                -
                                                          ----------------  ----------------  ----------------  ----------------
  Numerator for diluted net income per share                        23,286             9,293            38,318           28,968
                                                          ----------------  ----------------  ----------------  ----------------
  
  Weighted average shares:                                   No. of shares     No. of shares     No. of shares    No. of shares
  
  Basic  - weighted average shares                             254,965,642       243,312,483       251,191,036      241,977,657
  Effect of dilutive stock options                               7,598,216         8,133,811         8,448,653        7,527,893
  Convertible debt                                               1,100,391                 -                 -                -
                                                          ----------------  ----------------  ----------------  ----------------
  Diluted - weighted average shares                            263,664,249       251,446,294       259,639,689      249,505,550
                                                          ----------------  ----------------  ----------------  ----------------
  
  Basic net income per share                                         $0.09             $0.04             $0.15            $0.12
                                                          ----------------  ----------------  ----------------  ----------------
  Diluted net income per share                                       $0.09             $0.04             $0.15            $0.12
                                                          ----------------  ----------------  ----------------  ----------------
  </TABLE>
  
  The calculation of diluted net income per share for the nine months ended
  September 30, 2000 excludes the effects of convertible debt securities issued by
  the Company. These securities have been excluded from the diluted net income per
  share because they have an antidilutive effect on the calculation, resulting
  from the inclusion of the assumed interest savings associated with the repayment
  of the related debt as a component of net income available for common
  shareholders. These securities convert into 1,100,391 shares of common stock.
  
  5.   Restructuring
  
  As a result of the merger with Roberts Pharmaceutical Corporation, the Company
  recorded pre-tax charges in the fourth quarter of 1999 totalling $75.9 million
  comprising restructuring costs ($43.6 million) and merger related transaction
  expenses ($32.3 million). The restructuring costs included $37.9 million for
  employee termination and $5.7 million of property related expenses. The
  termination costs consisted of payments for severance, medical and other
  benefits, outplacement counselling, pension contributions and excise taxes.
  
  In December 1999, the decision was made to close the Roberts' office facility in
  Eatontown, New Jersey and consolidate the sales and marketing operations into
  the existing Shire facility in Florence, Kentucky and to transfer the research
  and development activities to Shire's facility in Rockville, Maryland.
  Similarly, Roberts' sales and marketing operations in the U.K. were combined
  with Shire's established operation in Andover, Hampshire.
  
  As part of the restructuring and elimination of duplicate facilities, the
  Company identified a total of 147 employees to be terminated. All of the planned
  terminations were completed during the second quarter of 2000. The office
  facility in Eatontown was closed as of April 28, 2000 whilst the U.K. duplicate
  facility was closed on March 10, 2000. During the third quarter of 2000, the
  Company completed the sale of the Eatontown facility.
  
  During the first quarter of 2000, the Company utilized $32.8 million of the
  restructuring reserve. This was primarily related to payments for severance as a
  result of the closure of the duplicate facilities and pension contributions.
  
  <PAGE>
  
  During the second quarter of 2000, the Company utilized a further $2.8 million
  of the restructuring reserve. This was in respect of employee termination costs
  and property related expenses.
  
  The Company utilized $6.5 million of the remaining restructuring reserve in the
  third quarter of 2000. This was primarily in respect of excise taxes. As of
  September 30, 2000 the Company had a combined reserve balance of $1.5 million.
  
  6.   Consolidated statement of changes in shareholders' equity
  
  Movements in shareholders' equity for the nine months ended September 30, 2000
  are as follows:
  
  <TABLE>
  <CAPTION>
                                                                                              Accumu-
                                         Common        Common      Additional   Accumu-     lated other         Total
                                          Stock        Stock        paid-in      lated      comprehen-        sharehold-
                                         Amount      No. Shares     capital      deficit    sive losses      ers' equity
                                       ----------  -------------  ------------ ----------   -----------     -------------
  
  <S>                                    <C>          <C>           <C>         <C>            <C>            <C>
  As at January 1, 2000                  20,063       244,519       832,650     (255,126)      (10,303)       587,284
  Net income                                  -             -             -        38,318             -        38,318
  Foreign currency translation                -             -             -             -      (24,962)      (24,962)
  Issuance of new shares                    155           703         5,372             -             -         5,527
  Options exercised                         708        10,342        42,980             -             -        43,688
  Issuance costs                              -             -       (3,385)             -             -       (3,385)
  Stock option compensation                   -             -        23,688             -             -        23,688
  Tax benefit associated with
  exercise of stock options                   -             -        10,976             -             -        10,976
                                    -------------------------- ------------- ------------- ------------- -------------
  As at September 30, 2000               20,926       255,564       912,281     (216,808)      (35,265)       681,134
                                    -------------------------- ------------- ------------- ------------- -------------
  </TABLE>
  
  ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
          of Operations
  
  Results of operations for the three months ended September 30, 2000, as compared
  with those for the three months ended September 30, 1999
  
  Overview of financial results
  Group revenues for the three months ended September 30, 2000 increased by 30 per
  cent to $137.8 million as compared to the three months ended September 30, 1999,
  primarily the result of a $29.3 million increase in product sales. The Group
  recorded third quarter net income of $23.2 million (Q3 1999: $9.3 million).
  
  Sales and marketing
  Product sales represented 96 per cent of total revenues at $131.8 million, an
  increase of 29 per cent over third quarter 1999 product sales of $102.5 million.
  Product sales in the U.S. continue to represent a significant percentage of our
  worldwide sales, 84% in the three months ended September 30, 2000.
  
  Product sales by segment      3 months to     3 months to
                              September 30,   September 30,        % change
                                       2000            1999
                                      $'000           $'000
  
  United States                     111,069          84,369            31.6
  Europe                             14,939          14,057             6.3
  Rest of World                       5,802           4,065            42.7
                               ------------    ------------    ------------
  Total product sales               131,810         102,491            28.6
                               ------------    ------------    ------------
  
  <PAGE>
  
  
  Third quarter sales of Adderall and DextroStat, products marketed in the U.S.
  for the treatment of Attention Deficit Hyperactivity Disorder (ADHD), were
  $62.1million, representing growth of 63 per cent over the third quarter of 1999.
  Shire gained 36.0 per cent of prescriptions written for ADHD in the U.S. in
  September 2000 compared to 27.3 per cent in September 1999. Adderall is now 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 $13.7 million, a 242 per cent increase over quarter three
  1999 sales of $4.0 million. Sales in quarter three 1999 were exceptionally low
  following a price increase on July 1, 1999. Shire achieved a script share of
  17.4 per cent of the total U.S. Agrylin market, including Hydrea and generic
  hydroxyurea, in September 2000 compared to 12.2 per cent in September 1999.
  
  Sales of Pentasa, licensed for the treatment of ulcerative colitis, at $14.4
  million, were 29 per cent lower than the comparable period last year, when sales
  were exceptionally high due to wholesaler stockbuilding in anticipation of an
  October 1999 price increase. Pentasa had a 17.9 per cent share of the oral
  mesalamine/obsalazine market in September 2000 compared to 17.6 per cent in
  September 1999.
  
  Carbatrol recorded sales growth of 63 per cent from sales of $4.3 million in the
  three months ended September 30, 1999 to $6.9 million in the three months ended
  September 30, 2000. This translates to 30.1 per cent of the U.S. extended
  release carbamazepine prescription market in September 2000, compared to 20.0
  per cent in September 1999.
  
  Licensing
  Licensing and development fees in the three months ended September 30, 2000
  increased by 150 per cent to $5.1 million compared to $2.0 million in the three
  months ended September 30, 1999. These results reflect the variability of this
  income quarter on quarter, based substantially as it is on the reimbursement of
  bulb related costs incurred in connection with Reminyl. Royalties increased by
  $0.2 million to $0.7 million.
  
  Cost of sales and operating expenses
  Gross margin on product sales increased from 74 per cent in the three months
  ended September 30, 1999 to 80 per cent in the three months ended September 30,
  2000. This is due to the faster growth rate of the higher margin products,
  particularly Adderall and Agrylin which together contributed 56 per cent of
  total product sales compared to 39 per cent in quarter three 1999.
  
  R&D expenditure increased 59 per cent to $31.7 million (Q3 1999: $19.9 million).
  This rise reflects the increased costs associated with the significant
  proportion of projects at Phase II or later where development costs tend to be
  higher. R&D expenditure in third quarter 2000 represents 23 per cent of revenues
  compared to 19 per cent in third quarter 1999.
  
  Selling, general and administrative expenses, excluding the effects of a minor
  APB25 charge of $0.2 million (Q3 1999: $3.3 million), increased by 18 per cent
  to $45.3 million (Q3 1999: $38.6 million). This increase reflects growth in the
  US sales force and is partly offset by merger cost savings of around $7 million
  for the third quarter 2000.
  
  Depreciation and amortisation increased by 8 per cent to $7.5 million (Q3 1999:
  $7.0 million).
  
  Income taxes
  For the three months ended September 30, 2000 income taxes increased $2.6
  million from $7.5 million to $10.1 million. The Company's effective tax rate
  before the stock compensation charge was 30 per cent for the three months ended
  September 30, 2000 (Q3 1999: 37 per cent). The Company has recorded net deferred
  tax assets of $29.1 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 nine months ended September 30, 2000, as compared
  with those for the nine months ended September 30, 1999
  
  
  <PAGE>
  
  Overview of financial results
  Group revenues for the nine months ended September 30, 2000 were $380.6 million,
  an increase of $83.5 million or 28 per cent over the nine months ended September
  30, 1999. The Group recorded net income of $38.3 million (1999: $29.0 million).
  Net income in the nine months to September 30, 2000 includes an APB 25 charge of
  $23.7 million compared to $10.3 million in the comparative period last year.
  
  Sales and marketing
  Product sales were $362.9 million in the nine months to September 30, 2000
  (1999: $283.3 million), representing an increase of 28 per cent. Of particular
  note, Adderall sales at $158.8 million were 64 per cent higher than in the nine
  months to September 1999.
  
  Other products contributing to the overall 28 per cent increase are Agrylin
  (increase of $14.9 million or 52 per cent) and Carbatrol (increase of $7.1
  million or 67 per cent).
  
  U.S. product sales for the nine months ended September 30, 2000 represented 83
  per cent of the group's total sales revenue.
  
  Product sales by segment      9 months to     9 months to
                              September 30,   September 30,        % change
                                       2000            1999
                                      $'000           $'000
  
  United States                     300,619         232,413            29.3
  Europe                             45,290          39,204            15.5
  Rest of World                      17,012          11,729            45.0
                               ------------    ------------    ------------
  Total product sales               362,921         283,346            28.1
                               ------------    ------------    ------------
  
  Licensing
  Licensing and development fees in the nine months ended September 30, 2000
  increased by 47 per cent to $14.3 million compared to $9.8 million in the nine
  months ended September 30, 1999.
  
  Royalties increased by $0.3 million to $2.6 million.
  
  Cost of sales and operating expenses
  Gross margin on product sales increased from 76 per cent in the nine months
  ended September 30, 1999 to 81 per cent in the nine months ended September 30,
  2000. This is due to the faster growth rate of the higher margin products,
  particularly Adderall and Agrylin, which contributed 56 per cent of total
  product sales compared to 44 per cent in the nine months ended September 30,
  1999.
  
  R&D expenditure increased 68 per cent to $86.3 million (1999: $51.5 million).
  This rise reflects the increased costs associated with the significant
  proportion of projects at Phase II or later where development costs tend to be
  higher. R&D expenditure in the nine months ended September 30, 2000 represents
  23 per cent of revenues compared to 17 per cent in the comparative period last
  year.
  
  Selling, general and administrative expenses increased by 27 per cent to $159.1
  million (1999: $124.9 million). A significant factor is the APB25 charge for the
  nine months to September 30, 2000 of $23.7 million (1999: $10.3 million). In
  2000, $23.3 million of this charge was recorded during the first fiscal quarter.
  The executive share option scheme was amended effective from March 1, 2000 to
  allow for compensation for this arrangement to be recorded based upon the share
  price at that date, rather than being based on the share price at each reporting
  date.
  
  Depreciation and amortisation included in selling, general and administrative
  expenses, increased by 17 per cent to $22.8 million (1999: $19.5 million). This
  increase reflects the amortisation charge on those intangible assets acquired
  since the third quarter of 1999.
  
  
  <PAGE>
  
  Income taxes
  For the nine months ended September 30, 2000 income taxes were $25.3 million,
  representing an effective rate of tax on income pre APB 25 charge of 29 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 September 30, 2000, the Company had net cash funds available as follows:
  
  Selected data:                          September 30,         December 31,
                                                   2000                 1999
                                                  $'000                $'000
                                         --------------       --------------
  Cash and cash equivalents                     160,524               54,082
  Marketable securities and other
  current asset investments                       9,139               84,344
  Debt                                        (127,825)            (135,922)
                                         --------------       --------------
  Net cash                                       41,838                2,504
                                         --------------       --------------
  
  Net cash provided by operating activities in the nine months ended September 30,
  2000 was $9.8 million compared to $62.7 million provided by operating activities
  in the nine months to September 30, 1999. Cash payments in respect of
  restructuring and merger related expenses following the acquisition of Roberts
  Pharmaceutical Corporation in December 1999 are a major contributor to the
  outflow in 2000.
  
  Investing activities provided $61.8 million, which mainly comprised $75.2
  million on redemption of marketable securities, $12.0 million of proceeds from
  the sale of fixed assets offset by new capital expenditure of $26.2 million and
  collection on notes receivable of $0.8 million. The fixed assets proceeds relate
  to the sale of the Eatontown site in New Jersey.
  
  Financing activities provided $37.7 million, which mainly comprised proceeds
  from the exercise of stock options.
  
  Capital expenditure
  Capital expenditure in the nine months to September 30, 2000 included $6.6
  million for tangible fixed assets and $16.0 million for intangible assets
  comprising the purchase of the exclusive rights in certain European countries of
  Balsalazide, a treatment for ulcerative colitis.
  
  Other matters
  
  Restructuring
  As a result of the merger with Roberts Pharmaceutical Corporation, the Company
  recorded pre-tax charges in the fourth quarter of 1999 totalling $75.9 million
  comprising restructuring costs ($43.6 million) and merger related transaction
  expenses ($32.3 million). The restructuring costs included $37.9 million for
  employee termination and $5.7 million of property related expenses. The
  termination costs consisted of payments for severance, medical and other
  benefits, outplacement counselling, pension contributions and excise taxes.
  
  In December 1999, the decision was made to close the Roberts' office facility in
  Eatontown, New Jersey and consolidate the sales and marketing operations into
  the existing Shire facility in Florence, Kentucky and to transfer the research
  and development activities to Shire's facility in Rockville, Maryland.
  Similarly, Roberts' sales and marketing operations in the U.K. were combined
  with Shire's established operation in Andover, Hampshire.
  
  
  <PAGE>
  
  As part of the restructuring and elimination of duplicate facilities, the
  Company identified a total of 147 employees to be terminated. All of the planned
  terminations were completed during the second quarter of 2000. The office
  facility in Eatontown was closed as of April 28, 2000 whilst the U.K. duplicate
  facility was closed on March 10, 2000. During the third quarter of 2000, the
  Company completed the sale of the Eatontown facility.
  
  During the first quarter of 2000, the Company utilized $32.8 million of the
  restructuring reserve. This was primarily related to payments for severance as a
  result of the closure of the duplicate facilities and pension contributions.
  
  During the second quarter of 2000, the Company utilized a further $2.8 million
  of the restructuring reserve. This was in respect of employee termination costs
  and property related expenses.
  
  The Company utilized $6.5 million of the restructuring reserve in the third
  quarter of 2000. This was primarily in respect of excise taxes. As of September
  30, 2000 the Company had a combined reserve balance of $1.5 million. Management
  is satisfied that the restructure programme is progressing as planned. Cost
  savings of approximately $17.0 million have arisen in the nine months to
  September 2000, and it is anticipated that further benefits will arise in the
  remaining quarter of the year.
  
  Purchase of new office facility
  On October 17, 2000 the Company completed the purchase of a new office facility
  in Basingstoke, Hampshire, U.K., which will replace the group's existing leased
  offices in Andover, Hampshire. The purchase price was approximately $15 million.
  
  
  ITEM 3.  Qualitative and Quantitative Disclosures about Market Risk
  
  There have been no material changes in the Company's market risk exposure since
  December 31, 1999. The Company's Annual Report on Form 10-K for the year ended
  December 31, 1999 contains a detailed discussion of the Company's market risk
  exposure in relation to interest rate market risk and foreign exchange market
  risk.
  
  
  
  <PAGE>
  
  
  PART II.   OTHER INFORMATION
  
  ITEM 1. LEGAL PROCEEDINGS
  
  We are currently a defendant in approximately 2,300 lawsuits, in both federal
  and state courts, which seek damages for, among other things, personal injury
  arising from phentermine products supplied for the treatment of obesity by us
  and several other pharmaceutical companies. We have been sued as a manufacturer
  and distributor of phentermine, an anorectic used in the short-term treatment of
  obesity and one of the products addressed by the lawsuits. If we are found
  liable in some or all of these lawsuits for damages in excess of our assets, we
  would be required to consider reorganizing and seeking protection in bankruptcy
  or initiating insolvency proceedings. The suits relate to phentermine either
  alone or together with fenfluramine or dexfenfluramine. In 111 of these pending
  suits, the plaintiffs have specifically alleged in the complaint or subsequent
  discovery that they used Oby-Cap or Oby-Trim, phentermine products produced by
  us. The lawsuits generally allege the following claims:
  
  o    the defendants marketed phentermine and the other products for the
       treatment of obesity and misled users about the products and the dangers
       associated with them;
  
  o    the defendants failed to adequately test phentermine individually and when
       taken in combination with the other drugs; and
  
  o    the defendants knew or should have known about the negative effects of the
       drug and should have informed the public about such risks and/or failed to
       provide appropriate warning labels.
  
  We became involved with phentermine through the acquisition of certain assets of
  Rexar Pharmaceutical Corp. in January 1994. In addition to liability as a result
  of our own production of Oby-Cap, plaintiffs may seek to impose liability on us
  as a successor to Rexar. Class certification has been sought for certain of the
  claims made against us and the other defendants. In addition, pending federal
  lawsuits have been consolidated as a multidistrict litigation in the Eastern
  District of Pennysylvania.
  
  We intend to vigorously defend all lawsuits and pursue all available reasonable
  defenses. Legal expenses have thus far been paid by the insurers of our
  supplier, Eon Labs Manufacturing Inc. ("Eon") or directly by Eon itself. Through
  approximately October 2000, Eon and its distributors, including us, had
  exhausted approximately $50 million in insurance proceeds defending the
  lawsuits. We have our own insurance up to a maximum of $3 million for lawsuits
  filed in the period to April 28, 1998, an additional $80 million of coverage put
  in place during 2000, and an unlimited indemnity given by Eon for phentermine it
  manufactured for us. We have already spent a substantial amount of resources in
  managing these lawsuits and will continue to do so.
  
  On August 31, 2000, we entered into an agreement (the "Termination Agreement")
  with the former shareholders of Shire Richwood Inc. ("SRI"), pursuant to which
  the ordinary shares placed into escrow at the time of the purchase of SRI by
  Shire were released and the escrow agreement and the escrow fund were terminated
   . 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.
  
  Through October 26, 2000 we were named as a defendant in approximately 3,725
  lawsuits and had been dismissed from approximately 1,447 of these cases. There
  are approximately 1,816 additional cases pending dismissal as of October 26,
  2000.
  
  Reference is hereby made to the Company's Annual Report on Form 10-K for the
  fiscal year ended December 31, 1999, for a description of certain other legal
  proceedings to which the Company is a party.
  
  
  <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
  
  At the Annual Meeting of Shareholders held on July 7, 2000, the following
  proposals were adopted by the margins indicated:
  
  1.   To elect a Board of Directors to hold office until their successors are
       elected and qualified.
  
  <TABLE>
  <CAPTION>
                                                            Number of votes
                                 For            Against           Open           Abstention     No instruction
  
  <S>                           <C>                 <C>           <C>                  <C>           <C>
  Rolf Stahel                   99,175,321          158,157       48,800,953           127,456       43,561,519
  Dr Barry Price                99,175,321          157,957       48,801,153           127,456       43,561,519
  Dr James Cavanaugh            96,831,863          540,717       48,838,100         2,051,207       43,561,519
  Angus Russell                 99,136,288          163,157       48,852,636           109,806       43,561,519
  Dr Zola Horovitz              98,477,736          724,995       48,803,100           256,056       43,561,519
  Ronald Nordman                93,924,565        5,271,511       48,803,500           262,311       43,561,519
  Joseph Smith                  98,429,543          771,788       48,804,500           256,056       43,561,519
  John Spitznagel               93,821,219        5,375,232       48,803,125           262,311       43,561,519
  
  </TABLE>
  2.   To adopt and establish the Shire Pharmaceuticals Group plc 2000 Executive
       Share Option Scheme.
  
  <TABLE>
  <CAPTION>
                                                            Number of votes
                                 For            Against           Open           Abstention     No instruction
  
  <S>                           <C>              <C>              <C>                <C>             <C>
                                58,270,695       32,915,580       48,798,501         8,277,111       43,561,519
  </TABLE>
  
  
  3.   To approve the amendments to the Shire Pharmaceuticals Sharesave Scheme.
  
  <TABLE>
  <CAPTION>
                                                            Number of votes
                                 For            Against           Open           Abstention     No instruction
  
  <S>                           <C>              <C>              <C>                <C>             <C>
                                80,446,847       14,385,337       48,799,510         4,630,193       43,561,519
  </TABLE>
  
  
  4.   To approve the amendments to the Shire Pharmaceuticals Group plc Employee
       Stock Purchase Plan.
  
  <TABLE>
  <CAPTION>
                                                            Number of votes
                                 For            Against           Open           Abstention     No instruction
  
  <S>                           <C>              <C>              <C>                  <C>           <C>
                                84,840,326       14,002,416       48,799,210           619,935       43,561,519
  </TABLE>
  
  
  5.   To approve the amendments to the Shire Pharmaceuticals Group plc Long Term
       Incentive Plan.
  
  <TABLE>
  <CAPTION>
                                                            Number of votes
                                 For            Against           Open           Abstention     No instruction
  
  <S>                           <C>              <C>              <C>                  <C>           <C>
                                84,124,391       14,697,900       48,799,870           639,726       43,561,519
  </TABLE>
  
  <PAGE>
  
  6.   To authorise the directors to establish supplements or appendices to the
       four schemes mentioned in points two to five above to take account of legal
       or accounting changes in overseas territories as they consider appropriate.
  
  <TABLE>
  <CAPTION>
                                                            Number of votes
                                 For            Against           Open           Abstention     No instruction
  
  <S>                           <C>              <C>              <C>                  <C>           <C>
                                81,018,400       17,807,446       48,800,882           635,159       43,561,519
  </TABLE>
  
  
  7.   To authorise the directors pursuant to Section 80 of the Companies Act 1985
       to exercise all or any of the powers of the company to allot relevant
       securities up to a nominal amount equal to 33 1/3 per cent of the total
       share capital of the Company in issue on 17 May 2000 and for a period
       expiring five years after the date of the passing of this Resolution.
  
  <TABLE>
  <CAPTION>
                                                            Number of votes
                                 For            Against           Open           Abstention     No instruction
  
  <S>                           <C>                 <C>           <C>                   <C>          <C>
                                99,116,620          256,203       48,804,131            84,933       43,561,519
  </TABLE>
  
  
  8.   To empower the directors pursuant to Section 95 of the Companies Act 1985
       and subject to the passing of the resolution detailed in point seven above,
       to allot equity securities of the Company pursuant to the authority
       conferred by the passing of that resolution, as if Section 89(1) of the
       Companies Act 1985 did not apply to such allotments, provided that this
       power shall expire five years after the date of passing of this Resolution
       and that it is limited to certain equity securities and that it is limited
       to the equivalent of 5 per cent of the issued ordinary share capital at the
       date of the last published accounts of the Company.
  
  <TABLE>
  <CAPTION>
                                                            Number of votes
                                 For            Against           Open           Abstention     No instruction
  
  <S>                           <C>                 <C>           <C>                  <C>           <C>
                                99,052,213          271,713       48,804,260           133,701       43,561,519
  </TABLE>
  
  
  
  9.   To empower the directors pursuant to Section 95 of the Companies Act 1985
       and subject to the passing of the Resolution detailed in point seven above,
       including any authority conferred by the passing of the Resolution detailed
       in point eight above, to allot equity securities of the Company as if
       Section 89(1) of the Companies Act 1985 did not apply to such allotment,
       provided that this power shall expire five years after the date of passing
       of this Resolution and that it is limited to the allotment of equity
       securities to raise funds solely for the purpose of repaying any
       outstanding amount under the facility agreement where DLJ Capital Funding,
       Inc is agent and that it shall have a maximum nominal value of equity
       securities.
  
  <TABLE>
  <CAPTION>
                                                            Number of votes
                                 For            Against           Open           Abstention     No instruction
  
  <S>                           <C>               <C>             <C>                  <C>           <C>
                                94,242,644        5,059,502       48,804,260           155,481       43,561,519
  </TABLE>
  
  
  10.  That the Company adopt new Articles of Association in the form produced to
       the meeting, as initialled for the purposes of identification only by the
       Chairman.
  
  <TABLE>
  <CAPTION>
                                                            Number of votes
                                 For            Against           Open           Abstention     No instruction
  
  <S>                           <C>                 <C>           <C>                  <C>           <C>
                                98,478,979          854,638       48,804,082           124,188       43,561,519
  </TABLE>
  
  <PAGE>
  
  ITEM 5. OTHER INFORMATION
  
  None
  
  
  ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
  
  (a)      Exhibits
  
           (27)     Financial Data Schedule - September 30, 2000
  
  (b)      Reports on Form 8-K
  
           During the third quarter ended September 30, 2000, 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
           August 31, 2000, with respect to the Termination Agreement with the
           former shareholders of Shire Richwood Inc.
  
           Form 8-K (Item 5 - Other Events), date of earliest event reported
           September 25,2000, with respect to Underwriting Agreement in connection
           with the offering of American Depositary Shares by Yamanouchi Group
           Holdings, Inc.
  
  
  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:     November 13, 2000         By:     /s/ Angus C. Russell
                                              -------------------------------
                                              Angus C. Russell
                                              Group Finance Director
  
  
  Date:    November 13, 2000          By:     /s/ Rolf Stahel
                                              -------------------------------
                                              Rolf Stahel
                                              Chief Executive
  
  
  
  <PAGE>
  
  
  
  EXHIBIT INDEX
  
  Exhibit No.       Exhibit
  
  (27)     Financial Data Schedule - September 30, 2000
metadata_documents: [{"type": "10-Q", "sequence": "1", "filename": "0001.txt", "description": "FORM 10-Q", "secsgml_size_bytes": 69934}]
metadata_filer: {"company-data": {"conformed-name": "SHIRE PHARMACEUTICALS GROUP PLC", "cik": "0000936402", "assigned-sic": "2834", "irs-number": "000000000", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "000-29630", "film-number": "759043"}, "business-address": {"street1": "EAST ANTON ANDOVER", "street2": "HAMPSHIRE ENGLAND", "city": "ENGLAND SP10 5RG", "state": "X0", "phone": "1264333455"}, "mail-address": {"street1": "EAST ANTON ANDOVER", "street2": "HAMPSHIRE ENGLAND", "city": "ENGLAND SP10 5RG"}}
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 September 30, 2000
  
                           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.)
  
  East Anton, Andover, Hampshire SP10 5RG England
      (Address of principal executive offices)              (Zip Code)
  
                                   44 1264 333 455
                (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 October 31, 2000
  
  Common Stock: Ordinary Shares                         256,134,685
  
  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 commercialisation, the impact of competitive products,
  patents, and other risks and uncertainties, including those detailed from time
  to time in periodic reports, including the Annual Report filed on Form 10-K by
  Shire with the 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)
  
                                                                                     September 30,          December 31,
                                                                                              2000                  1999
                                                                                       (Unaudited)
  ASSETS                                                                               -----------           -----------
  Current assets:
  Cash and cash equivalents                                                                160,524                54,082
  Marketable securities and other current asset investments                                  9,139                84,344
  Accounts receivable, net                                                                  89,630                59,018
  Inventories, net                                                                          38,665                39,538
  Deferred tax asset                                                                        11,618                 5,312
  Prepaid expenses and other current assets                                                 10,622                 9,012
                                                                                      ------------          ------------
  Total current assets                                                                     320,198               251,306
  
  Investments                                                                                5,412                 2,604
  Property, plant and equipment, net                                                        28,649                37,484
  Intangible assets, net                                                                   538,255               557,934
  Deferred tax asset                                                                        17,451                31,799
  Other assets                                                                               6,319                 6,636
                                                                                      ------------          ------------
  Total assets                                                                             916,284               887,763
                                                                                      ------------          ------------
  LIABILITIES AND SHAREHOLDERS' EQUITY
  Current liabilities:
  Current instalments of long-term debt                                                      1,412                 9,608
  Accounts and notes payable                                                                77,828               114,509
  Other current liabilities                                                                 29,075                48,703
                                                                                      ------------          ------------
  Total current liabilities                                                                108,315               172,820
  
  Long-term debt, excluding current instalments                                            126,413               126,314
  Other long-term liabilities                                                                  422                 1,345
                                                                                      ------------          ------------
  Total liabilities                                                                        235,150               300,479
                                                                                      ------------          ------------
  Shareholders' equity:
  Common stock, 5p par value; 400,000,000 shares authorised; and
  255,563,638 shares issued and outstanding (1999: 244,519,024)                             20,926                20,063
  Additional paid-in capital                                                               912,281               832,650
  Accumulated other comprehensive losses                                                  (35,265)              (10,303)
  Accumulated deficit                                                                    (216,808)             (255,126)
                                                                                      ------------          ------------
  Total shareholders' equity                                                               681,134               587,284
                                                                                      ------------          ------------
  Total liabilities and shareholders' equity                                               916,284               887,763
                                                                                      ------------          ------------
  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     9 months to          9 months to
                                                          September      September       September            September
                                                           30, 2000       30, 1999        30, 2000             30, 1999
                                                       ------------     ------------    ------------      ------------
  Product sales                                             131,810          102,491         362,921           283,346
  Licensing and development                                   5,063            2,024          14,344             9,771
  Royalties                                                     685              548           2,608             2,318
  Other revenues                                                257              721             732             1,708
                                                       ------------     ------------    ------------      ------------
  Total revenues                                            137,815          105,784         380,605           297,143
  
  Costs and expenses:
  Cost of sales                                              25,811           26,403          67,396            69,143
  Research and development                                   31,659           19,868          86,333            51,516
  Selling, general and administrative (inclusive             45,595           41,847         159,080           124,896
  of stock option compensation charge of $206
  $3,285, $23,688 and $10,343 respectively)
                                                       ------------     ------------    ------------      ------------
  Total operating expenses                                  103,065           88,118         312,809           245,555
                                                       ------------     ------------    ------------      ------------
  Operating income                                           34,750           17,666          67,796            51,588
  
  Interest income                                             1,126            1,761           4,264             5,375
  Interest expense                                          (2,230)          (2,397)         (8,563)           (7,290)
  Other income/(expense), net                                 (334)            (224)             113              (96)
                                                       ------------     ------------    ------------      ------------
  Total other expenses                                      (1,438)            (860)         (4,186)           (2,011)
                                                        -----------      -----------    ------------      ------------
  Income before income taxes                                 33,312           16,806          63,610            49,577
  
  Income taxes                                             (10,099)          (7,513)        (25,292)          (20,609)
                                                       ------------     ------------    ------------      ------------
  Net income                                                 23,213            9,293          38,318            28,968
                                                       ------------     ------------    ------------      ------------
  
  Net income per share:
  Basic                                                       $0.09            $0.04           $0.15             $0.12
  Diluted                                                     $0.09            $0.04           $0.15             $0.12
  
  Weighted average number of shares:
  Basic                                                 254,965,642      243,312,483     251,191,036       241,977,657
  Diluted                                               263,664,249      251,446,294     259,639,689       249,505,550
  The results for the three months and nine months ended September 30, 1999 have
  been restated to include the results of Roberts Pharmaceutical Corporation which
  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
  
                                              CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
  
                                                      (In thousands of U.S. dollars)
                                                                (Unaudited)
  
                                                                                        9 months to       9 months to
                                                                                      September 30,     September 30,
                                                                                               2000              1999
                                                                                         ----------        ----------
  Net cash provided by operating activities                                                   9,817            62,653
                                                                                         ----------        ----------
  Cash flows from investing activities:
  Redemption of marketable securities, net                                                   75,205             4,165
  Increase in cash placed on short-term deposit                                                   -          (45,477)
  Purchase of long term investment                                                          (2,843)                 -
  Expenses of acquisition of subsidiaries                                                     (657)                 -
  Purchase of intangible assets                                                            (16,029)          (40,299)
  Purchase of fixed assets                                                                  (6,646)           (4,311)
  Proceeds from sale of fixed assets                                                         12,039             1,407
  Collection on notes receivable                                                                766             5,536
                                                                                         ----------        ----------
  Net cash provided by/(used in) investing activities                                        61,835          (78,979)
                                                                                         ----------        ----------
  
  Cash flows from financing activities:
  Payments on long term debt, capital leases and notes                                      (8,097)           (8,241)
  Proceeds from issue of common stock                                                         2,783             4,834
  Proceeds from exercise of options                                                          43,047             3,295
                                                                                         ----------        ----------
  Net cash provided by/(used in) financing activities                                        37,733             (112)
                                                                                         ----------        ----------
  Effect of foreign exchange rate changes on cash and cash equivalents                      (2,943)                68
                                                                                         ----------        ----------
  Net increase/(decrease) in cash and cash equivalents                                      106,442          (16,370)
  Cash and cash equivalents at beginning of period                                           54,082            52,973
                                                                                         ----------        ----------
  Cash and cash equivalents at end of period                                                160,524            36,603
                                                                                         ----------        ----------
  The cash flows for the nine months ended September 30, 1999 have been restated
  to include the results of Roberts Pharmaceutical Corporation which 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 STATEMENT OF COMPREHENSIVE INCOME
  
                                                      (In thousands of U.S. dollars)
                                                                (Unaudited)
  
                                                                  3 months to   3 months to   9 months to     9 months to
                                                                    September     September     September       September
                                                                     30, 2000      30, 1999      30, 2000        30, 1999
                                                                 ------------  ------------  ------------  ------------
  Net income                                                           23,213         9,293        38,318       28,968
  Foreign currency translation adjustments                            (7,463)       (1,871)      (24,962)     (15,698)
                                                                 ------------  ------------  ------------  ------------
  Comprehensive income                                                 15,750         7,422        13,356       13,270
                                                                 ------------  ------------  ------------  ------------
  There are no tax effects related to the items included above.
  
  The results for the three months and nine months ended September 30, 1999 have
  been restated to include the results of Roberts Pharmaceutical Corporation which
  was accounted for as a pooling of interests in accordance with APB 16,
  Accounting for Business Combinations.
  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 Pharmaceuticals Group plc is an international specialty pharmaceutical
  company with a strategic focus on four therapeutic areas: central nervous system
  disorders, metabolic diseases, oncology and gastroenterology. The Company's
  principal products include Adderall, for the treatment of Attention Deficit
  Hyperactivity Disorder, Agrylin, for the treatment of thrombocythemia, and
  Pentasa, for the treatment of ulcerative colitis.
  
  The Group has operations in the United States, Europe and the rest of the world.
  Within these geographic operating segments, revenues are derived from three
  sources: sales of products by the Company's own sales and marketing operations,
  licensing and development fees, and royalties.
  
  The accompanying consolidated financial statements include the accounts of Shire
  Pharmaceuticals Group plc and all its subsidiary undertakings after elimination
  of intercompany accounts and transactions.
  
  b) New Accounting Pronouncements
  
  In June 1998, the FASB issued Statement No. 133, "Accounting for Derivative
  Instruments and Hedging Activities". This Statement requires that all
  derivatives be recorded in the balance sheet as either an asset or liability
  measured at its fair value and that changes in the derivative's fair value be
  recognized currently in earnings unless specific hedge accounting criteria are
  met. In June 1999, the FASB issued SFAS No. 137, "Accounting for Derivative
  Instruments and Hedging Activities - Deferral of the Effective Date of FASB
  Statement No. 133". This Statement defers for one year the effective date of
  SFAS 133 to all fiscal quarters of all fiscal years beginning after June 15,
  2000.
  
  In June 2000, the FASB issued Statement No. 138, "Accounting for Certain
  Derivative Instruments and Certain Hedging Activities - an Amendment of FASB
  Statement No. 133". SFAS 138 amends SFAS 133 to (a) exclude from the scope of
  SFAS No. 133 nonfinancial assets that will be delivered in quantities expected
  to be used or sold by the company over a reasonable period in the normal course
  of business and for which physical delivery is probable, (b) permit hedging of a
  benchmark interest rate, (c) allow hedging of foreign-currency-denominated
  assets and liabilities and (d) allow for limited hedging of net foreign currency
  exposures.
  
  In December 1999, the Securities and Exchange Commission (SEC) issued Staff
  Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" (SAB
  101). SAB 101 outlines the SEC's views on applying generally accepted accounting
  principles to revenue recognition in financial statements. Specifically, the
  bulletin provides both general and specific guidance as to the periods in which
  companies should recognize revenues. In addition, SAB 101 also highlights
  factors to be considered when determining whether to recognize revenues on a
  gross or net basis. SAB 101, as amended by SAB 101/A and SAB101/B, is effective
  beginning no later than their fourth fiscal quarter of the fiscal year beginning
  after December 15, 1999; as the Group is a calendar year-end company, this would
  be the quarter ending December 31, 2000.
  
  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. 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. It is suggested that these consolidated financial
  statements be read in conjunction with the Company's audited consolidated
  financial statements for the three years ended December 31, 1999 and notes
  thereto.
  2.       Inventory
  
  Inventory consists of:
  
                                    September 30,         December 31,
                                             2000                 1999
                                   --------------       --------------
  Finished goods                           20,591               26,573
  Work-in-process                           9,021                6,389
  Raw materials                             9,053                6,576
                                   --------------       --------------
                                           38,665               39,538
                                   --------------       --------------
  
  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 geographic, each being
  managed and monitored separately and serving different markets. The Company
  evaluates performance based on operating income.
  Three months ended September 30, 2000                                                        Rest of
                                                                U.S.           Europe            World              Total
                                                               $'000            $'000            $'000              $'000
                                                          ----------       ----------       ----------         ----------
  Product sales                                              111,069           14,939            5,802            131,810
  Licensing and development                                      884            4,179                -              5,063
  Royalties                                                       92              568               25                685
  Other revenues                                                   3                -              254                257
                                                          ----------       ----------       ----------         ----------
  Total revenues                                             112,048           19,686            6,081            137,815
                                                          ----------       ----------       ----------         ----------
  
  Cost of revenues                                            17,357            5,848            2,606             25,811
  Research and development                                    20,396           11,263                -             31,659
  Selling, general and administrative                         29,162           14,616            1,817             45,595
                                                          ----------       ----------       ----------         ----------
  Total operating expenses                                    66,915           31,727            4,423            103,065
                                                          ----------       ----------       ----------         ----------
  Operating income/(loss)                                     45,133         (12,041)            1,658             34,750
                                                          ----------       ----------       ----------         ----------
  
  Three months ended September 30, 1999                                                        Rest of
                                                                U.S.           Europe            World              Total
                                                               $'000            $'000            $'000              $'000
                                                          ----------       ----------       ----------         ----------
  Product sales                                               84,369           14,057            4,065            102,491
  Licensing and development                                        -            2,024                -              2,024
  Royalties                                                        -              548                -                548
  Other revenues                                                 329                -              392                721
                                                          ----------       ----------       ----------         ----------
  Total revenues                                              84,698           16,629            4,457            105,784
                                                          ----------       ----------       ----------         ----------
  Cost of revenues                                            18,640            5,214            2,549             26,403
  Research and development                                    14,361            5,495               12             19,868
  Selling, general and administrative                         26,667           13,698            1,482             41,847
                                                          ----------       ----------       ----------         ----------
  Total operating expenses                                    59,668           24,407            4,043             88,118
                                                          ----------       ----------       ----------         ----------
  Operating income/(loss)                                     25,030          (7,778)              414             17,666
                                                          ----------       ----------       ----------         ----------
  Nine months ended September 30, 2000                                                         Rest of
                                                                U.S.           Europe            World              Total
                                                               $'000            $'000            $'000              $'000
                                                          ----------       ----------       ----------         ----------
  Product sales                                              300,619           45,290           17,012            362,921
  Licensing and development                                    2,874           11,470                -             14,344
  Royalties                                                      221            2,362               25              2,608
  Other revenues                                                  16                -              716                732
                                                          ----------       ----------       ----------         ----------
  Total revenues                                             303,730           59,122           17,753            380,605
                                                          ----------       ----------       ----------         ----------
  
  Cost of revenues                                            42,794           17,241            7,361             67,396
  Research and development                                    57,180           29,110               43             86,333
  Selling, general and administrative                         88,020           65,565            5,495            159,080
                                                          ----------       ----------       ----------         ----------
  Total operating expenses                                   187,994          111,916           12,899            312,809
                                                          ----------       ----------       ----------         ----------
  Operating income/(loss)                                    115,736         (52,794)            4,854             67,796
                                                          ----------       ----------       ----------         ----------
  
  Nine months ended September 30, 1999                                                         Rest of
                                                                U.S.           Europe            World              Total
                                                               $'000            $'000            $'000              $'000
                                                          ----------       ----------       ----------         ----------
  Product sales                                              232,413           39,204           11,729            283,346
  Licensing and development                                    1,097            8,674                -              9,771
  Royalties                                                        -            2,318                -              2,318
  Other revenues                                                 517                -            1,191              1,708
                                                          ----------       ----------       ----------         ----------
  Total revenues                                             234,027           50,196           12,920            297,143
                                                          ----------       ----------       ----------         ----------
  Cost of revenues                                            42,541           15,165           11,437             69,143
  Research and development                                    31,152           20,330               34             51,516
  Selling, general and administrative                         82,044           38,398            4,454            124,896
                                                          ----------       ----------       ----------         ----------
  Total operating expenses                                   155,737           73,893           15,925            245,555
                                                          ----------       ----------       ----------         ----------
  Operating income/(loss)                                     78,290         (23,697)          (3,005)             51,588
                                                          ----------       ----------       ----------         ----------
  4.  Net income per share
  
  Basic net income per share is based upon the net income available to common
  stockholders divided by the weighted-average number of common shares outstanding
  during the period. Diluted net income per share is based upon net 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 income
  per share:
  3 months to       3 months to       9 months to      9 months to
                                                             September 30,     September 30,     September 30,    September 30,
                                                                      2000              1999              2000             1999
                                                          ----------------  ----------------  ----------------  ----------------
  Numerator for basic net income per share                          23,213             9,293            38,318           28,968
  Interest charged on convertible debt, net of tax                      73                 -                 -                -
                                                          ----------------  ----------------  ----------------  ----------------
  Numerator for diluted net income per share                        23,286             9,293            38,318           28,968
                                                          ----------------  ----------------  ----------------  ----------------
  
  Weighted average shares:                                   No. of shares     No. of shares     No. of shares    No. of shares
  
  Basic  - weighted average shares                             254,965,642       243,312,483       251,191,036      241,977,657
  Effect of dilutive stock options                               7,598,216         8,133,811         8,448,653        7,527,893
  Convertible debt                                               1,100,391                 -                 -                -
                                                          ----------------  ----------------  ----------------  ----------------
  Diluted - weighted average shares                            263,664,249       251,446,294       259,639,689      249,505,550
                                                          ----------------  ----------------  ----------------  ----------------
  
  Basic net income per share                                         $0.09             $0.04             $0.15            $0.12
                                                          ----------------  ----------------  ----------------  ----------------
  Diluted net income per share                                       $0.09             $0.04             $0.15            $0.12
                                                          ----------------  ----------------  ----------------  ----------------
  The calculation of diluted net income per share for the nine months ended
  September 30, 2000 excludes the effects of convertible debt securities issued by
  the Company. These securities have been excluded from the diluted net income per
  share because they have an antidilutive effect on the calculation, resulting
  from the inclusion of the assumed interest savings associated with the repayment
  of the related debt as a component of net income available for common
  shareholders. These securities convert into 1,100,391 shares of common stock.
  
  5.   Restructuring
  
  As a result of the merger with Roberts Pharmaceutical Corporation, the Company
  recorded pre-tax charges in the fourth quarter of 1999 totalling $75.9 million
  comprising restructuring costs ($43.6 million) and merger related transaction
  expenses ($32.3 million). The restructuring costs included $37.9 million for
  employee termination and $5.7 million of property related expenses. The
  termination costs consisted of payments for severance, medical and other
  benefits, outplacement counselling, pension contributions and excise taxes.
  
  In December 1999, the decision was made to close the Roberts' office facility in
  Eatontown, New Jersey and consolidate the sales and marketing operations into
  the existing Shire facility in Florence, Kentucky and to transfer the research
  and development activities to Shire's facility in Rockville, Maryland.
  Similarly, Roberts' sales and marketing operations in the U.K. were combined
  with Shire's established operation in Andover, Hampshire.
  
  As part of the restructuring and elimination of duplicate facilities, the
  Company identified a total of 147 employees to be terminated. All of the planned
  terminations were completed during the second quarter of 2000. The office
  facility in Eatontown was closed as of April 28, 2000 whilst the U.K. duplicate
  facility was closed on March 10, 2000. During the third quarter of 2000, the
  Company completed the sale of the Eatontown facility.
  
  During the first quarter of 2000, the Company utilized $32.8 million of the
  restructuring reserve. This was primarily related to payments for severance as a
  result of the closure of the duplicate facilities and pension contributions.
  During the second quarter of 2000, the Company utilized a further $2.8 million
  of the restructuring reserve. This was in respect of employee termination costs
  and property related expenses.
  
  The Company utilized $6.5 million of the remaining restructuring reserve in the
  third quarter of 2000. This was primarily in respect of excise taxes. As of
  September 30, 2000 the Company had a combined reserve balance of $1.5 million.
  
  6.   Consolidated statement of changes in shareholders' equity
  
  Movements in shareholders' equity for the nine months ended September 30, 2000
  are as follows:
  Accumu-
                                         Common        Common      Additional   Accumu-     lated other         Total
                                          Stock        Stock        paid-in      lated      comprehen-        sharehold-
                                         Amount      No. Shares     capital      deficit    sive losses      ers' equity
                                       ----------  -------------  ------------ ----------   -----------     -------------
  As at January 1, 2000                  20,063       244,519       832,650     (255,126)      (10,303)       587,284
  Net income                                  -             -             -        38,318             -        38,318
  Foreign currency translation                -             -             -             -      (24,962)      (24,962)
  Issuance of new shares                    155           703         5,372             -             -         5,527
  Options exercised                         708        10,342        42,980             -             -        43,688
  Issuance costs                              -             -       (3,385)             -             -       (3,385)
  Stock option compensation                   -             -        23,688             -             -        23,688
  Tax benefit associated with
  exercise of stock options                   -             -        10,976             -             -        10,976
                                    -------------------------- ------------- ------------- ------------- -------------
  As at September 30, 2000               20,926       255,564       912,281     (216,808)      (35,265)       681,134
                                    -------------------------- ------------- ------------- ------------- -------------
  ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
          of Operations
  
  Results of operations for the three months ended September 30, 2000, as compared
  with those for the three months ended September 30, 1999
  
  Overview of financial results
  Group revenues for the three months ended September 30, 2000 increased by 30 per
  cent to $137.8 million as compared to the three months ended September 30, 1999,
  primarily the result of a $29.3 million increase in product sales. The Group
  recorded third quarter net income of $23.2 million (Q3 1999: $9.3 million).
  
  Sales and marketing
  Product sales represented 96 per cent of total revenues at $131.8 million, an
  increase of 29 per cent over third quarter 1999 product sales of $102.5 million.
  Product sales in the U.S. continue to represent a significant percentage of our
  worldwide sales, 84% in the three months ended September 30, 2000.
  
  Product sales by segment      3 months to     3 months to
                              September 30,   September 30,        % change
                                       2000            1999
                                      $'000           $'000
  
  United States                     111,069          84,369            31.6
  Europe                             14,939          14,057             6.3
  Rest of World                       5,802           4,065            42.7
                               ------------    ------------    ------------
  Total product sales               131,810         102,491            28.6
                               ------------    ------------    ------------
  Third quarter sales of Adderall and DextroStat, products marketed in the U.S.
  for the treatment of Attention Deficit Hyperactivity Disorder (ADHD), were
  $62.1million, representing growth of 63 per cent over the third quarter of 1999.
  Shire gained 36.0 per cent of prescriptions written for ADHD in the U.S. in
  September 2000 compared to 27.3 per cent in September 1999. Adderall is now 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 $13.7 million, a 242 per cent increase over quarter three
  1999 sales of $4.0 million. Sales in quarter three 1999 were exceptionally low
  following a price increase on July 1, 1999. Shire achieved a script share of
  17.4 per cent of the total U.S. Agrylin market, including Hydrea and generic
  hydroxyurea, in September 2000 compared to 12.2 per cent in September 1999.
  
  Sales of Pentasa, licensed for the treatment of ulcerative colitis, at $14.4
  million, were 29 per cent lower than the comparable period last year, when sales
  were exceptionally high due to wholesaler stockbuilding in anticipation of an
  October 1999 price increase. Pentasa had a 17.9 per cent share of the oral
  mesalamine/obsalazine market in September 2000 compared to 17.6 per cent in
  September 1999.
  
  Carbatrol recorded sales growth of 63 per cent from sales of $4.3 million in the
  three months ended September 30, 1999 to $6.9 million in the three months ended
  September 30, 2000. This translates to 30.1 per cent of the U.S. extended
  release carbamazepine prescription market in September 2000, compared to 20.0
  per cent in September 1999.
  
  Licensing
  Licensing and development fees in the three months ended September 30, 2000
  increased by 150 per cent to $5.1 million compared to $2.0 million in the three
  months ended September 30, 1999. These results reflect the variability of this
  income quarter on quarter, based substantially as it is on the reimbursement of
  bulb related costs incurred in connection with Reminyl. Royalties increased by
  $0.2 million to $0.7 million.
  
  Cost of sales and operating expenses
  Gross margin on product sales increased from 74 per cent in the three months
  ended September 30, 1999 to 80 per cent in the three months ended September 30,
  2000. This is due to the faster growth rate of the higher margin products,
  particularly Adderall and Agrylin which together contributed 56 per cent of
  total product sales compared to 39 per cent in quarter three 1999.
  
  R&D expenditure increased 59 per cent to $31.7 million (Q3 1999: $19.9 million).
  This rise reflects the increased costs associated with the significant
  proportion of projects at Phase II or later where development costs tend to be
  higher. R&D expenditure in third quarter 2000 represents 23 per cent of revenues
  compared to 19 per cent in third quarter 1999.
  
  Selling, general and administrative expenses, excluding the effects of a minor
  APB25 charge of $0.2 million (Q3 1999: $3.3 million), increased by 18 per cent
  to $45.3 million (Q3 1999: $38.6 million). This increase reflects growth in the
  US sales force and is partly offset by merger cost savings of around $7 million
  for the third quarter 2000.
  
  Depreciation and amortisation increased by 8 per cent to $7.5 million (Q3 1999:
  $7.0 million).
  
  Income taxes
  For the three months ended September 30, 2000 income taxes increased $2.6
  million from $7.5 million to $10.1 million. The Company's effective tax rate
  before the stock compensation charge was 30 per cent for the three months ended
  September 30, 2000 (Q3 1999: 37 per cent). The Company has recorded net deferred
  tax assets of $29.1 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 nine months ended September 30, 2000, as compared
  with those for the nine months ended September 30, 1999
  Overview of financial results
  Group revenues for the nine months ended September 30, 2000 were $380.6 million,
  an increase of $83.5 million or 28 per cent over the nine months ended September
  30, 1999. The Group recorded net income of $38.3 million (1999: $29.0 million).
  Net income in the nine months to September 30, 2000 includes an APB 25 charge of
  $23.7 million compared to $10.3 million in the comparative period last year.
  
  Sales and marketing
  Product sales were $362.9 million in the nine months to September 30, 2000
  (1999: $283.3 million), representing an increase of 28 per cent. Of particular
  note, Adderall sales at $158.8 million were 64 per cent higher than in the nine
  months to September 1999.
  
  Other products contributing to the overall 28 per cent increase are Agrylin
  (increase of $14.9 million or 52 per cent) and Carbatrol (increase of $7.1
  million or 67 per cent).
  
  U.S. product sales for the nine months ended September 30, 2000 represented 83
  per cent of the group's total sales revenue.
  
  Product sales by segment      9 months to     9 months to
                              September 30,   September 30,        % change
                                       2000            1999
                                      $'000           $'000
  
  United States                     300,619         232,413            29.3
  Europe                             45,290          39,204            15.5
  Rest of World                      17,012          11,729            45.0
                               ------------    ------------    ------------
  Total product sales               362,921         283,346            28.1
                               ------------    ------------    ------------
  
  Licensing
  Licensing and development fees in the nine months ended September 30, 2000
  increased by 47 per cent to $14.3 million compared to $9.8 million in the nine
  months ended September 30, 1999.
  
  Royalties increased by $0.3 million to $2.6 million.
  
  Cost of sales and operating expenses
  Gross margin on product sales increased from 76 per cent in the nine months
  ended September 30, 1999 to 81 per cent in the nine months ended September 30,
  2000. This is due to the faster growth rate of the higher margin products,
  particularly Adderall and Agrylin, which contributed 56 per cent of total
  product sales compared to 44 per cent in the nine months ended September 30,
  1999.
  
  R&D expenditure increased 68 per cent to $86.3 million (1999: $51.5 million).
  This rise reflects the increased costs associated with the significant
  proportion of projects at Phase II or later where development costs tend to be
  higher. R&D expenditure in the nine months ended September 30, 2000 represents
  23 per cent of revenues compared to 17 per cent in the comparative period last
  year.
  
  Selling, general and administrative expenses increased by 27 per cent to $159.1
  million (1999: $124.9 million). A significant factor is the APB25 charge for the
  nine months to September 30, 2000 of $23.7 million (1999: $10.3 million). In
  2000, $23.3 million of this charge was recorded during the first fiscal quarter.
  The executive share option scheme was amended effective from March 1, 2000 to
  allow for compensation for this arrangement to be recorded based upon the share
  price at that date, rather than being based on the share price at each reporting
  date.
  
  Depreciation and amortisation included in selling, general and administrative
  expenses, increased by 17 per cent to $22.8 million (1999: $19.5 million). This
  increase reflects the amortisation charge on those intangible assets acquired
  since the third quarter of 1999.
  Income taxes
  For the nine months ended September 30, 2000 income taxes were $25.3 million,
  representing an effective rate of tax on income pre APB 25 charge of 29 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 September 30, 2000, the Company had net cash funds available as follows:
  
  Selected data:                          September 30,         December 31,
                                                   2000                 1999
                                                  $'000                $'000
                                         --------------       --------------
  Cash and cash equivalents                     160,524               54,082
  Marketable securities and other
  current asset investments                       9,139               84,344
  Debt                                        (127,825)            (135,922)
                                         --------------       --------------
  Net cash                                       41,838                2,504
                                         --------------       --------------
  
  Net cash provided by operating activities in the nine months ended September 30,
  2000 was $9.8 million compared to $62.7 million provided by operating activities
  in the nine months to September 30, 1999. Cash payments in respect of
  restructuring and merger related expenses following the acquisition of Roberts
  Pharmaceutical Corporation in December 1999 are a major contributor to the
  outflow in 2000.
  
  Investing activities provided $61.8 million, which mainly comprised $75.2
  million on redemption of marketable securities, $12.0 million of proceeds from
  the sale of fixed assets offset by new capital expenditure of $26.2 million and
  collection on notes receivable of $0.8 million. The fixed assets proceeds relate
  to the sale of the Eatontown site in New Jersey.
  
  Financing activities provided $37.7 million, which mainly comprised proceeds
  from the exercise of stock options.
  
  Capital expenditure
  Capital expenditure in the nine months to September 30, 2000 included $6.6
  million for tangible fixed assets and $16.0 million for intangible assets
  comprising the purchase of the exclusive rights in certain European countries of
  Balsalazide, a treatment for ulcerative colitis.
  
  Other matters
  
  Restructuring
  As a result of the merger with Roberts Pharmaceutical Corporation, the Company
  recorded pre-tax charges in the fourth quarter of 1999 totalling $75.9 million
  comprising restructuring costs ($43.6 million) and merger related transaction
  expenses ($32.3 million). The restructuring costs included $37.9 million for
  employee termination and $5.7 million of property related expenses. The
  termination costs consisted of payments for severance, medical and other
  benefits, outplacement counselling, pension contributions and excise taxes.
  
  In December 1999, the decision was made to close the Roberts' office facility in
  Eatontown, New Jersey and consolidate the sales and marketing operations into
  the existing Shire facility in Florence, Kentucky and to transfer the research
  and development activities to Shire's facility in Rockville, Maryland.
  Similarly, Roberts' sales and marketing operations in the U.K. were combined
  with Shire's established operation in Andover, Hampshire.
  As part of the restructuring and elimination of duplicate facilities, the
  Company identified a total of 147 employees to be terminated. All of the planned
  terminations were completed during the second quarter of 2000. The office
  facility in Eatontown was closed as of April 28, 2000 whilst the U.K. duplicate
  facility was closed on March 10, 2000. During the third quarter of 2000, the
  Company completed the sale of the Eatontown facility.
  
  During the first quarter of 2000, the Company utilized $32.8 million of the
  restructuring reserve. This was primarily related to payments for severance as a
  result of the closure of the duplicate facilities and pension contributions.
  
  During the second quarter of 2000, the Company utilized a further $2.8 million
  of the restructuring reserve. This was in respect of employee termination costs
  and property related expenses.
  
  The Company utilized $6.5 million of the restructuring reserve in the third
  quarter of 2000. This was primarily in respect of excise taxes. As of September
  30, 2000 the Company had a combined reserve balance of $1.5 million. Management
  is satisfied that the restructure programme is progressing as planned. Cost
  savings of approximately $17.0 million have arisen in the nine months to
  September 2000, and it is anticipated that further benefits will arise in the
  remaining quarter of the year.
  
  Purchase of new office facility
  On October 17, 2000 the Company completed the purchase of a new office facility
  in Basingstoke, Hampshire, U.K., which will replace the group's existing leased
  offices in Andover, Hampshire. The purchase price was approximately $15 million.
  
  ITEM 3.  Qualitative and Quantitative Disclosures about Market Risk
  
  There have been no material changes in the Company's market risk exposure since
  December 31, 1999. The Company's Annual Report on Form 10-K for the year ended
  December 31, 1999 contains a detailed discussion of the Company's market risk
  exposure in relation to interest rate market risk and foreign exchange market
  risk.
  PART II.   OTHER INFORMATION
  
  ITEM 1. LEGAL PROCEEDINGS
  
  We are currently a defendant in approximately 2,300 lawsuits, in both federal
  and state courts, which seek damages for, among other things, personal injury
  arising from phentermine products supplied for the treatment of obesity by us
  and several other pharmaceutical companies. We have been sued as a manufacturer
  and distributor of phentermine, an anorectic used in the short-term treatment of
  obesity and one of the products addressed by the lawsuits. If we are found
  liable in some or all of these lawsuits for damages in excess of our assets, we
  would be required to consider reorganizing and seeking protection in bankruptcy
  or initiating insolvency proceedings. The suits relate to phentermine either
  alone or together with fenfluramine or dexfenfluramine. In 111 of these pending
  suits, the plaintiffs have specifically alleged in the complaint or subsequent
  discovery that they used Oby-Cap or Oby-Trim, phentermine products produced by
  us. The lawsuits generally allege the following claims:
  
  o    the defendants marketed phentermine and the other products for the
       treatment of obesity and misled users about the products and the dangers
       associated with them;
  
  o    the defendants failed to adequately test phentermine individually and when
       taken in combination with the other drugs; and
  
  o    the defendants knew or should have known about the negative effects of the
       drug and should have informed the public about such risks and/or failed to
       provide appropriate warning labels.
  
  We became involved with phentermine through the acquisition of certain assets of
  Rexar Pharmaceutical Corp. in January 1994. In addition to liability as a result
  of our own production of Oby-Cap, plaintiffs may seek to impose liability on us
  as a successor to Rexar. Class certification has been sought for certain of the
  claims made against us and the other defendants. In addition, pending federal
  lawsuits have been consolidated as a multidistrict litigation in the Eastern
  District of Pennysylvania.
  
  We intend to vigorously defend all lawsuits and pursue all available reasonable
  defenses. Legal expenses have thus far been paid by the insurers of our
  supplier, Eon Labs Manufacturing Inc. ("Eon") or directly by Eon itself. Through
  approximately October 2000, Eon and its distributors, including us, had
  exhausted approximately $50 million in insurance proceeds defending the
  lawsuits. We have our own insurance up to a maximum of $3 million for lawsuits
  filed in the period to April 28, 1998, an additional $80 million of coverage put
  in place during 2000, and an unlimited indemnity given by Eon for phentermine it
  manufactured for us. We have already spent a substantial amount of resources in
  managing these lawsuits and will continue to do so.
  
  On August 31, 2000, we entered into an agreement (the "Termination Agreement")
  with the former shareholders of Shire Richwood Inc. ("SRI"), pursuant to which
  the ordinary shares placed into escrow at the time of the purchase of SRI by
  Shire were released and the escrow agreement and the escrow fund were terminated
   . 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.
  
  Through October 26, 2000 we were named as a defendant in approximately 3,725
  lawsuits and had been dismissed from approximately 1,447 of these cases. There
  are approximately 1,816 additional cases pending dismissal as of October 26,
  2000.
  
  Reference is hereby made to the Company's Annual Report on Form 10-K for the
  fiscal year ended December 31, 1999, for a description of certain other legal
  proceedings to which the Company is a party.
  ITEM 2. CHANGES IN SECURITIES
  
  None
  
  ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
  None
  
  ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
  At the Annual Meeting of Shareholders held on July 7, 2000, the following
  proposals were adopted by the margins indicated:
  
  1.   To elect a Board of Directors to hold office until their successors are
       elected and qualified.
  Number of votes
                                 For            Against           Open           Abstention     No instruction
  Rolf Stahel                   99,175,321          158,157       48,800,953           127,456       43,561,519
  Dr Barry Price                99,175,321          157,957       48,801,153           127,456       43,561,519
  Dr James Cavanaugh            96,831,863          540,717       48,838,100         2,051,207       43,561,519
  Angus Russell                 99,136,288          163,157       48,852,636           109,806       43,561,519
  Dr Zola Horovitz              98,477,736          724,995       48,803,100           256,056       43,561,519
  Ronald Nordman                93,924,565        5,271,511       48,803,500           262,311       43,561,519
  Joseph Smith                  98,429,543          771,788       48,804,500           256,056       43,561,519
  John Spitznagel               93,821,219        5,375,232       48,803,125           262,311       43,561,519
  2.   To adopt and establish the Shire Pharmaceuticals Group plc 2000 Executive
       Share Option Scheme.
  Number of votes
                                 For            Against           Open           Abstention     No instruction
  58,270,695       32,915,580       48,798,501         8,277,111       43,561,519
  3.   To approve the amendments to the Shire Pharmaceuticals Sharesave Scheme.
  Number of votes
                                 For            Against           Open           Abstention     No instruction
  80,446,847       14,385,337       48,799,510         4,630,193       43,561,519
  4.   To approve the amendments to the Shire Pharmaceuticals Group plc Employee
       Stock Purchase Plan.
  Number of votes
                                 For            Against           Open           Abstention     No instruction
  84,840,326       14,002,416       48,799,210           619,935       43,561,519
  5.   To approve the amendments to the Shire Pharmaceuticals Group plc Long Term
       Incentive Plan.
  Number of votes
                                 For            Against           Open           Abstention     No instruction
  84,124,391       14,697,900       48,799,870           639,726       43,561,519
  6.   To authorise the directors to establish supplements or appendices to the
       four schemes mentioned in points two to five above to take account of legal
       or accounting changes in overseas territories as they consider appropriate.
  Number of votes
                                 For            Against           Open           Abstention     No instruction
  81,018,400       17,807,446       48,800,882           635,159       43,561,519
  7.   To authorise the directors pursuant to Section 80 of the Companies Act 1985
       to exercise all or any of the powers of the company to allot relevant
       securities up to a nominal amount equal to 33 1/3 per cent of the total
       share capital of the Company in issue on 17 May 2000 and for a period
       expiring five years after the date of the passing of this Resolution.
  Number of votes
                                 For            Against           Open           Abstention     No instruction
  99,116,620          256,203       48,804,131            84,933       43,561,519
  8.   To empower the directors pursuant to Section 95 of the Companies Act 1985
       and subject to the passing of the resolution detailed in point seven above,
       to allot equity securities of the Company pursuant to the authority
       conferred by the passing of that resolution, as if Section 89(1) of the
       Companies Act 1985 did not apply to such allotments, provided that this
       power shall expire five years after the date of passing of this Resolution
       and that it is limited to certain equity securities and that it is limited
       to the equivalent of 5 per cent of the issued ordinary share capital at the
       date of the last published accounts of the Company.
  Number of votes
                                 For            Against           Open           Abstention     No instruction
  99,052,213          271,713       48,804,260           133,701       43,561,519
  9.   To empower the directors pursuant to Section 95 of the Companies Act 1985
       and subject to the passing of the Resolution detailed in point seven above,
       including any authority conferred by the passing of the Resolution detailed
       in point eight above, to allot equity securities of the Company as if
       Section 89(1) of the Companies Act 1985 did not apply to such allotment,
       provided that this power shall expire five years after the date of passing
       of this Resolution and that it is limited to the allotment of equity
       securities to raise funds solely for the purpose of repaying any
       outstanding amount under the facility agreement where DLJ Capital Funding,
       Inc is agent and that it shall have a maximum nominal value of equity
       securities.
  Number of votes
                                 For            Against           Open           Abstention     No instruction
  94,242,644        5,059,502       48,804,260           155,481       43,561,519
  10.  That the Company adopt new Articles of Association in the form produced to
       the meeting, as initialled for the purposes of identification only by the
       Chairman.
  Number of votes
                                 For            Against           Open           Abstention     No instruction
  98,478,979          854,638       48,804,082           124,188       43,561,519
  ITEM 5. OTHER INFORMATION
  
  None
  
  ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
  
  (a)      Exhibits
  
           (27)     Financial Data Schedule - September 30, 2000
  
  (b)      Reports on Form 8-K
  
           During the third quarter ended September 30, 2000, 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
           August 31, 2000, with respect to the Termination Agreement with the
           former shareholders of Shire Richwood Inc.
  
           Form 8-K (Item 5 - Other Events), date of earliest event reported
           September 25,2000, with respect to Underwriting Agreement in connection
           with the offering of American Depositary Shares by Yamanouchi Group
           Holdings, Inc.
  
  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:     November 13, 2000         By:     /s/ Angus C. Russell
                                              -------------------------------
                                              Angus C. Russell
                                              Group Finance Director
  
  Date:    November 13, 2000          By:     /s/ Rolf Stahel
                                              -------------------------------
                                              Rolf Stahel
                                              Chief Executive
  EXHIBIT INDEX
  
  Exhibit No.       Exhibit
  
  (27)     Financial Data Schedule - September 30, 2000