Research and development (R&D)
R&D expenditure increased from $150.0 million in the six months to June 30, 2006 to $277.1 million in the six months to June 30, 2007.
The increase in R&D expenditure during the six months to June 2007 primarily results from a non-cash charge of $100.0 million recognized on the effective settlement of Shire's pre-existing relationship with New River. This charge represents the write-off of capitalized up-front and milestone payments made by Shire prior to the acquisition of New River. This charge is presented within R&D as at the time of the New River acquisition VYVANSE, although approved by the FDA, had not yet received the final scheduling classification from the Drug Enforcement Agency ("DEA") and was therefore not available for commercial sale. Further details in respect of this charge are included in Note 3 to these IFRS interim financial statements.
Excluding this charge of $100 million on the effective settlement of the pre-existing relationship with New River, R&D expenditure in the six months to June 30, 2007 was $177.1 million, (2006: $150.0 million), an increase of $27.1 million, (18%). In 2007, R&D expenditure includes costs associated with Phase 3(b) and Phase 4 studies to support new product launches and the continuation of Phase 3 trials on GA-GCB, the development of the Women's Health and the New River franchises, pre-clinical development of three HGT projects, two new Phase 1 projects and two further pre-clinical projects.
For the six months to June 30, 2007 R&D expenditure included a charge of $5.4 million (2006: $2.8 million) in respect of share based compensation.
Selling, general and administrative (SG&A) expenses
SG&A expenses increased from $435.2 million in the six months to June
30, 2006 to $633.6 million in the six months to June 30, 2007, an increase
of 46%. As
|SOURCE Shire plc|
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