The following discussion should be read in conjunction with the Company's unaudited consolidated financial statements and related notes appearing elsewhere in this report.

Overview

Shire's strategic goal is to become the leading specialty biopharmaceutical company that focuses on meeting the needs of the specialist physician. Shire focuses its business on attention deficit and hyperactivity disorder (ADHD), human genetic therapies (HGT), gastrointestinal (GI) diseases as well as opportunities in other therapeutic areas to the extent they arise through acquisitions. Shire's in-licensing, merger and acquisition efforts are focused on products in specialist markets with strong intellectual property protection and global rights. Shire believes that a carefully selected and balanced portfolio of products with relatively small-scale sales forces will deliver strong results.

Recent developments

Acquisition of Jerini AG

On July 3, 2008 Shire announced that it was launching a voluntary public takeover offer for all shares in Jerini AG, (see ITEM 1, Note 20 for further details).

DYNEPO

On July 31, 2008 Shire announced that it had decided to stop the commercialization of DYNEPO. Changes in the external environment including the launch of several bio-similars at lower prices have proved challenging for DYNEPO, a gene-activated erythropoietin indicated for use in treating anemia associated with kidney disease, making it an uneconomic product for Shire. Product sales will wind down over the second half of 2008 as all patients are transferred off DYNEPO by the end of the year.

Shire has recorded charges of $150.3 million in the quarter ended June 30, 2008 to cover intangible asset impairment, inventory write-down and other exit costs. The cash effect of these exit costs is approximately $20 million.

Board changes

On June 18, 2008 Shire's former Chief Financial Officer, Angus Russell became Chief Executive Officer and Shire's former Chief Executive Officer Matthew Emmens became Chairman and Non-Executive Director. Shire's former Chairman, Dr James Cavanaugh retired from the Shire Board and David Kappler became Deputy Chairman.

On July 1, 2008 Graham Hetherington joined Shire as Chief Financial Officer and Executive Board Director. Graham Hetherington has a broad range of experience in senior financial roles having most recently held positions as Chief Financial Officer of Bacardi (2007) and Allied Domecq plc (1999-2005).

On April 24, 2008 Shire announced that Michael Rosenblatt M.D. joined the Shire Board as a Non-Executive Director.

On July 29, 2008 Robin Buchanan due to his other commitments stepped down from the Shire Board, on completion of his term of office.

Significant events in the three months to June 30, 2008

Product highlights

VYVANSETM (lisdexamfetamine dimesylate) - Attention Deficit and Hyperactivity Disorder ("ADHD")

On April 23, 2008 Shire announced that the Food and Drug Administration ("FDA") had approved the adult indication for VYVANSE, making it the first and only once-daily prodrug stimulant approved to treat adults with ADHD. Shire launched VYVANSE for adult ADHD in June 2008.

On May 8, 2008 Shire announced the results of a Phase 3 pivotal study in which VYVANSE demonstrated significant improvements in ADHD symptoms in adults and met all safety and efficacy endpoints.

By June 30, 2008 Shire had agreements with nine of its top eleven managed care organizations for VYVANSE.

On July 2, 2008 Shire shipped to wholesalers stocks of three additional dosage strengths (20mg, 40mg and 60mg) for VYVANSE representing product sales of approximately $24 million. These product sales will be recognized into revenue in Q3 2008.

LIALDAŽ/MEZAVANT - Ulcerative Colitis

On April 1, 2008 the product was launched in Ireland as MEZAVANT XL and, following approval in Luxembourg on June 26, 2008, is now approved in 15 countries. Further launches are planned in certain other EU countries during 2008, subject to the successful conclusion of pricing and reimbursement negotiations.

During April 2008, TAP Pharmaceutical Products Inc. ("TAP") commenced co-promotion of LIALDA in the US in accordance with the co-promotion agreement entered into on March 26, 2008. This agreement adds more than 500 additional sales representatives from TAP which will increase the reach and frequency of sales calls covering an additional 22,000 doctors.

FOSRENOL - Hyperphosphatemia

Following the launch of the product in Slovenia and Switzerland during the second quarter of 2008 and in Malta and Malaysia in July 2008, FOSRENOL is now available in 29 countries.

ELAPRASEŽ - Hunter syndrome

During the three months to June 30, 2008 ELAPRASE was approved for commercial sale in Brazil. ELAPRASE is now approved in 40 countries worldwide.

Business highlights in the three months to June 30, 2008

A new listed holding company for the Shire group

On May 23, 2008 Shire Limited, a public company with its primary listing on the London Stock Exchange (secondary listing on NASDAQ), incorporated in Jersey and tax resident in the Republic of Ireland, became the holding company of the Shire group, pursuant to a scheme of arrangement under Sections 895 to 899 of the United Kingdom Companies Act 2006 (the "Scheme"). The Scheme was approved by the High Court of England and Wales and the shareholders of Shire plc, the former holding company of the Shire group. The introduction of a new holding company tax-resident in Ireland, is designed to help protect Shire's tax position.

Immediately prior to the Scheme becoming effective, Shire Limited was substituted for Shire plc as principal obligor under Shire's $1.1 billion 2.75 per cent convertible bond due 2014 originally issued by Shire plc (and the terms and conditions of such bonds were accordingly amended).

Shire incurred costs associated with the introduction of the new holding company of $12.2 million in the six months to June 30, 2008.

See ITEM 1, Note 2 and Note 17 for further details.

Completion of acquisition of METAZYM

On June 4, 2008 Shire completed the acquisition of the global rights to the clinical candidate arylsulfatase-A, currently known as METAZYM, from Zymenex A/S ("Zymenex") for $135 million in cash (see Research and development below). This acquisition is expected to bring forward Shire's entry into the Metachromatic Leukodystrophy ("MLD") market.

Sale of non-core assets

Following the transfer of the relevant marketing consents in the three months to June 30, 2008 Shire recognised previously deferred gains of $9.1 million arising from product divestments in 2007, including $8.6 million from the sale of non-core products to Laboratorios Almirall S.A ("Almirall") in 2007.

Share purchases

In the three months to June 30, 2008 1.4 million American Depositary Shares ("ADSs") were acquired by the Employee Share Ownership Trust ("ESOT") for a cash consideration of $71.0 million (2007: $55.5 million) at an average ADS price of $50.12.

Research and development

Products in registration June 30, 2008

FOSRENOL for the treatment of pre-dialysis chronic kidney disease ("CKD") Following the FDA Cardiovascular and Renal Drugs Advisory Committee recommendation in the fourth quarter of 2007 on the use of phosphate binders, including FOSRENOL, to treat hyperphosphatemia in pre-dialysis CKD patients, Shire worked with the FDA to agree to a regulatory pathway for approval for use in pre-dialysis patients.

VYVANSE for ADHD in Canada
In March 2008 the Canadian new drug submission was accepted for filing for the treatment of ADHD in children. Review is ongoing.

INTUNIV
On June 21, 2007 Shire received an approvable letter from the FDA for INTUNIV. Shire is conducting additional clinical work which is designed to enhance the label.

On May 8, 2008 Shire announced pivotal trial results for INTUNIV. The data demonstrated that INTUNIV has significant efficacy in reducing ADHD symptoms for patients taking the medication when compared to patients taking placebo at all measured time points up to 24 hours after dosing. While the precise timing for the approval of INTUNIV is unknown, it is anticipated that launch for use in children and adolescents will occur in the second half of 2009.

DAYTRANA for ADHD in EU & Canada
Regulatory submissions were filed for approval of the product with Health Canada on November 29, 2007 and in the EU via the decentralized procedure with the Netherlands as the reference member state on December 12, 2007. Reviews are ongoing.

Products in clinical development as at June 30, 2008

Phase 3

VYVANSE for ADHD in Europe
Shire plans to submit the regulatory filing for VYVANSE in Europe for the treatment of ADHD in children aged 6 to 17 in 2010.

LIALDA/MEZAVANT for the maintenance of remission in ulcerative colitis Worldwide Phase 3 trials investigating the use of the product to maintain remission in patients who have ulcerative colitis were initiated in 2006 and are continuing.

LIALDA/MEZAVANT for the treatment of diverticulitis Phase 3 worldwide clinical trials investigating the use of the product for the treatment of diverticulitis were initiated in 2007 and are continuing.

SEASONIQUE
Shire is evaluating the scientific advice received following meetings in 2007 with the regulatory authorities in Europe in order to formulate the regulatory filing strategy.

Velaglucerase alfa
Shire has completed enrolment in a worldwide Phase 3 clinical program for velaglucerase alfa, an enzyme replacement therapy being developed for the treatment of Gaucher disease. This comprehensive development program includes the evaluation of velaglucerase alfa in naīve patients and patients previously treated with imiglucerase across three clinical studies. It is anticipated that this development program will support global filings in the second half of 2009.

Phase 2

JUVISTA

Nine Phase 2 efficacy trials for JUVISTA have now been reported of which seven demonstrated statistically significant efficacy. Further Phase 2 clinical trials in other surgery types are ongoing and are expected to report during 2008 and 2009. Renovo Limited ("Renovo") is also intending to initiate a Phase 3 trial in the second half of 2008 in support of Renovo's filing of a European regulatory dossier and has recently announced that the European Medicines Agency ("EMEA") has given clearance to commence Phase 3 trials. Shire is considering the EMEA advice to Renovo and Renovo's EU Phase 3 plans and will give guidance on the US development plan in due course.

SPD550 for the treatment of Celiac disease On December 14, 2007 Shire acquired the worldwide rights to SPD550 (Larazotide Acetate) (also known as AT-1001) in markets outside of the US and Japan from Alba Therapeutics Corporation ("Alba"). The two parties have established Joint Committees which will guide the development, manufacture, and commercialization of the product. Alba has initiated and is responsible for executing the agreed upon ongoing Phase 2 program and certain non-clinical studies for the treatment of Celiac disease. Additional development studies may be conducted jointly or by the individual companies prior to or after initiation of Phase 3.

Transvaginal Ring ("TVR") technology
The TVR technology products are in various stages of development.

MLD program
Shire has an ongoing enzyme replacement therapy program for the treatment of MLD, which is a lysosomal storage disorder that results from a deficiency in the enzyme arylsulfatase-A ("ASA"). On June 4, 2008 Shire completed its acquisition from Zymenex A/S ("Zymenex") of the global rights to a clinical candidate ASA, currently known as METAZYM. METAZYM has completed a Phase 1b clinical trial in 12 MLD patients in Europe and an extension to this study is ongoing. The product has been granted orphan drug designation in the US and in the EU. The current plan is to initiate a Phase 2/3 clinical trial by the end of 2008.This product will now be referred to as HGT-1111.

HGT-1110 was in development at Shire for the treatment of MLD following successful pre-clinical proof of concept studies. The HGT-1110 program was replaced with the HGT-1111 development program upon completion of the acquisition.

AMIGAL (HGT-3310 for the treatment Fabry disease) Amicus Therapeutics Inc. ("Amicus") met with the FDA to discuss the AMIGAL development program in June 2008. Protocol Assistance with EMEA is planned during the final quarter of 2008. A final decision on the global development strategy will follow the conclusion of the discussions with both agencies. Shire has rights to AMIGAL in markets outside the US.

PLICERA (HGT-3410 for the treatment of Gaucher disease) In March 2008 Amicus Therapeutics Inc. ("Amicus") announced positive data from its Phase 2 clinical trial. Results from the Phase 2 trial support the previously reported interim findings that PLICERA was generally safe and well tolerated at all doses and increased target enzyme activity levels in a majority of patients. Shire has rights to PLICERA in markets outside the US.

HGT-3510 for the treatment of Pompe disease In June 2008 Amicus initiated Phase 2 clinical trials of HGT-3510, an orally administered, small molecule pharmacological chaperone being jointly developed for the treatment of Pompe disease by Shire and Amicus. Shire has rights to HGT-3510 in markets outside the US.

Phase 1

SPD487 (Amphetamine transdermal system ("ATS")) Shire is currently reviewing formulation data provided by Noven Pharmaceuticals Inc.

HGT-2310 - Hunter syndrome with significant central nervous system symptoms Following the acceptance by the FDA in January 2008 of Shire's IND application for idursulfase-IT (HGT-2310 -formerly referred to as ELAPRASE for Hunter syndrome patients with significant central nervous system symptoms - "Hunter CNS") the Company is now in the process of planning clinical trials.

Products in pre-clinical development as at June 30, 2008

HGT-1410 for Sanfilippo Syndrome (Mucopolysaccharidosis IIIA) On May 22, 2008 orphan drug designation was granted by the FDA for HGT-1410, an enzyme replacement therapy being developed for the treatment of Sanfilippo Syndrome, a lysosomal storage disorder. Pre-clinical development for this product is continuing.

A number of projects are underway in the early stages of development (pre-clinical) for the Specialty Pharmaceutical and HGT businesses.

Results of operations for the three months to June 30, 2008 and 2007

Total revenues

The following table provides an analysis of the Company's total revenues by source:

                  3 months to       3 months to
                     June 30,          June 30,
                         2008              2007       change
                           $M                $M            %
Product sales           705.7             504.2          +40
Royalties                64.8              64.0           +1
Other                     5.1               6.7          -24
Total                   775.6             574.9          +35

Product sales

The following table provides an analysis of the Company's key product sales:

                                                 3 months to       3 months to
                                                    June 30,          June 30,       Product sales       US prescription
                                                        2008              2007              growth                growth
                                                          $M                $M                   %                     %
Specialty Pharmaceuticals
ADHD
ADDERALL XR                                            296.4             255.1                  16                    -6 %
VYVANSE                                                 65.2                 -                 n/a                   n/a
DAYTRANA                                                22.6              19.9                  14                   -11 %

GI
PENTASA                                                 44.8              40.2                  11                    -2 %
LIALDA / MEZAVANT                                       32.0               5.0                 n/a                   n/a

GP
FOSRENOL (1)                                            42.4              24.5                  73                    -4 %
DYNEPO(1)                                                7.0               1.9                 n/a                   n/a
CALCICHEW                                               13.9              13.5                   3                   n/a
CARBATROL                                               16.2              17.9                  -9                    -4 %
REMINYL/REMINYL XL                                       8.7               7.6                  14                   n/a
XAGRID                                                  20.6              17.1                  20                   n/a

Other product sales                                     10.4              26.9                 -61
                                                       580.2             429.6                  35
Human Genetic Therapies
ELAPRASE                                                80.8              42.7                  89                   n/a
REPLAGAL                                                44.7              31.9                  40                   n/a
                                                       125.5              74.6                  68
Total product sales                                    705.7             504.2                  40

(1) Reclassified to GP following Shire's decision to stop the commercialization of DYNEPO.

The following discussion includes references to prescription and market share data for the Company's key products. The source of this data is IMS Health, June 2008. IMS Health is a leading global provider of business intelligence for the pharmaceutical and healthcare industries.

Specialty Pharmaceuticals

US ADHD market share

Shire's average quarterly market share of the US ADHD market rose to 32.3% in the three months to June 30, 2008 (2007: 28.6%), driven by the introduction of VYVANSE in July 2007. The overall US ADHD market grew by 7% in the same period. Shire has the leading portfolio of products in the US ADHD market.

ADDERALL XR - ADHD

As a result of the launch of VYVANSE in July 2007, ADDERALL XR's average quarterly market share of the US ADHD market for Q2 2008 fell to 23.1% (2007:
26.3%), a decrease of 12% compared to Q2 07. US prescriptions for ADDERALL XR for the period to June 30, 2008 decreased by 6% compared to the same period in 2007 due to the 12% decrease in average market share offset by 7% growth in the US ADHD market.

Sales of ADDERALL XR for the three months to June 30, 2008 were $296.4 million, an increase of 16% compared to the same period in 2007 (2007: $255.1 million). Product sales grew despite the decline in US prescriptions primarily due to price increases in October 2007 and April 2008.

Litigation proceedings concerning Shire's ADDERALL XR patents are ongoing. Further information on this litigation can be found in ITEM 1 of Part I of this Form 10-Q.

VYVANSE - ADHD

VYVANSE was launched in the US market in July 2007. Product sales for the three months to June 30, 2008 were $65.2 million (2007: $nil) representing a 20% increase compared to sales of $54.4 million in Q1 2008.

Product sales growth was driven by a 15% increase in prescription demand compared to Q1 2008 together with a price increase in May 2008. For the three months to June 30, 2008 VYVANSE's average quarterly market share was 7.4% (Q1 08: 6.1%) of the US ADHD market.

By July 18, 2008 VYVANSE had achieved a US ADHD average weekly market share of 8.2% based on weekly prescription volumes.

DAYTRANA - ADHD

Product sales for the three months to June 30, 2008 were $22.6 million (2007:
$19.9 million). Prescriptions declined by 11% from the same period last year due to a reduction in DAYTRANA's average quarterly market share of the US ADHD market to 1.8% (2007: 2.2%).

Despite the decrease in prescriptions compared to 2007, sales of DAYTRANA grew 14% due to higher market growth, lower sales deductions and a price increase in January 2008.

On June 9, 2008 Shire announced a voluntary recall of a limited portion of DAYTRANA patches because certain patches did not meet their release liner removal specifications which may have resulted in some patients and caregivers having difficulties removing the liners. The voluntary recall was not due to safety issues. Shire and Noven Pharmaceuticals Inc. (the manufacturer of DAYTRANA) continue to pursue enhancements to the product and to work closely with the FDA to implement changes that may improve the usability of DAYTRANA. No interruption in the production of DAYTRANA is anticipated.

US oral mesalamine market share

Shire's average quarterly market share of the US oral mesalamine market rose to 27.6% in the three months to June 30, 2008 (2007: 19.9%), driven by the introduction of LIALDA in March 2007. The overall US oral mesalamine market grew by 1% in the same period.

LIALDA/MEZAVANT - Ulcerative colitis

Shire launched LIALDA in the US oral mesalamine market in March 2007, and during the three months to June 30, 2008 LIALDA had reached an average quarterly market share of 10.8%. LIALDA's product sales in the US for the three months to June 30, 2008 were $30.9 million (2007: $5.0 million). This compares to sales of $26.7 million and an average quarterly market share of 9.1% in Q1 2008.

Sales of MEZAVANT outside the US for the three months ended June 30, 2008 were $1.1 million (2007: $nil). The product was launched as MEZAVANT XL in the UK in November 2007 and as MEZAVANT in Canada and Germany in January and February 2008 respectively. Shire launched MEZAVANT XL in Ireland in April 2008 and further launches are planned in certain other EU countries during 2008, subject to the successful conclusion of pricing and reimbursement negotiations.

PENTASA - Ulcerative colitis

Sales of PENTASA for the three months to June 30, 2008 were $44.8 million, an increase of 11% compared to the same period in 2007 (2007: $40.2 million). Sales grew despite a decrease in prescriptions due to the impact of price increases in August 2007 and April 2008.

US prescriptions for the three months to June 30, 2008 were down 2% compared to the same period in 2007 primarily due to a 3% decrease in PENTASA's US average quarterly market share from 17.3% in 2007 to 16.8% in 2008, offset by a 1% increase in the US oral mesalamine market.

FOSRENOL - Hyperphosphatemia

FOSRENOL has been launched in 29 countries and global sales totaled $42.4 million for the three months to June 30, 2008 (2007: $24.5 million). Sales of FOSRENOL outside the US for the three months ended June 30, 2008 were $19.3 million (2007: $9.0 million).

US sales of FOSRENOL for the three months to June 30, 2008 were up 49% to $23.1 million compared to the same period in 2007 (2007: $15.5 million).

FOSRENOL's average quarterly prescription share of the US phosphate binder retail market decreased to 8.2% for the three months to June 30, 2008 (2007:
8.5%). Contributing to product sales increase were price increases in October 2007 and February 2008. As a consequence of focusing on specialist physicians, clinics and dialysis centers, FOSRENOL's dollar share of the non-retail market has increased to 17.2% in June 2008 compared to 12.3% in June 2007.

Effective April 16, 2008 Shire and Abbott Laboratories Inc. mutually agreed to terminate their Co-Promotion Agreement for FOSRENOL in the United States. Shire will continue to promote FOSRENOL on its own in the United States and throughout Europe.

XAGRID - Thrombocythemia

Sales for the three months to June 30, 2008 were $20.6 million, an increase of 20% compared to the same period in 2007 (2007: $17.1 million). Expressed in transaction currencies (XAGRID is primarily sold in Euros and Pounds Sterling), sales increased by 10% due to growth in many of Shire's existing markets, with exchange rate movements against the US dollar accounting for the remaining 10% increase.

Human Genetic Therapies

ELAPRASE - Hunter syndrome

Sales for the three months to June 30, 2008 were $80.8 million, an increase of 89% compared to the same period in 2007 (2007: $42.7 million). The sales growth was primarily driven by increased unit sales in North America, EU, Latin America, and Asia Pacific. The product is now approved for marketing and commercial distribution in 40 countries. Exchange rate movements against the US dollar contributed 12% to the growth compared to the prior year.

REPLAGAL - Fabry disease

Sales for the three months to June 30, 2008 were $44.7 million, an increase of 40% compared to the same period in 2007 (2007: $31.9 million). The sales growth was primarily driven by increased unit sales in the EU and Latin America. The product is now approved for marketing and commercial distribution in 42 countries. Exchange rate movements against the US dollar contributed 11% to the growth compared to the prior year.

Foreign exchange effect

As many of the Company's sales revenues are earned in currencies other than US dollars (primarily Euros and Pounds sterling), revenue growth reported in US dollars includes the impact of translating the sales made in a local currency, into US dollars. The table below shows the effect of foreign exchange translations on the revenue growth of the key affected products as well as the underlying performance of key products in their local currency:

                                                                          3 months to       3 months to
                                                                             June 30,          June 30,
                                                    3 months to            2008 sales        2008 sales
                                                       June 30,             growth in         growth in             Impact of
                                                     2008 sales        local currency        US dollars        translation to
                                                             $M                     %                 %          US dollars %
XAGRID sales in Euros                                      13.5                    +4               +21                   +17
REPLAGAL sales in Euros                                    26.3                   +21               +40                   +19
ELAPRASE sales in Euros                                    37.4                   +50               +74                   +24
XAGRID sales in Pounds Sterling                             7.1                   +20               +19                    -1
. . .