Shield Therapeutics plc
("Shield"
or the "Company" or the "Group")
Interim results for the six
months ended 30 June 2024
More than threefold increase
in Total Revenues compared to H1 2023
c. 65,200 ACCRUFeR®
prescriptions sold, up 161% compared to H1 2023
Net average sales price
increase of 33% from H1 2023
London, UK, September 4, 2024: Shield Therapeutics plc (LSE: STX), a commercial stage
pharmaceutical company that delivers ACCRUFeR®/FeRACCRU® (ferric
maltol), an innovative and differentiated specialty pharmaceutical
product, to address a significant unmet need for patients suffering
from iron deficiency (with or without anemia) announces its
unaudited interim results for the six months ended 30 June 2024,
reporting a substantial increase in revenues, ACCRUFeR®
prescription sales and net average sales price.
Financial Highlights H1 2024
· Total Revenues:
$12.1 million, a 3.2x increase over H1 2023 ($3.7
million)
o ACCRUFeR®
revenue: $11.0 million, a 3.5x
increase over H1 2023 ($3.1 million)
o Ex-US revenue: $1.1
million from global partners for product sales in Europe (H1 2023:
$0.6 million)
· Operating
Loss: $15.5 million compared to
$12.6 million in H1 2023 driven primarily by the expansion of US
field force supporting the launch of ACCRUFeR®, partially offset by
higher ACCRUFER® revenues
· Cash and cash
equivalents: $8.1 million (31 December 2023:
$13.9 million). Post-Period End the Company completed a $5.7
million monetisation agreement with AOP Health International
Management AG (July 2024). Based on our internal assumptions we
remain funded to deliver on our growth plans and look forward to
further progress in the second half of the year and
beyond.
Operational Highlights H1 2024
· Commercialization of
ACCRUFeR®
in the US: Continued growth
and strong market results with our partner, Viatris Inc.
o ACCRUFeR® total
prescriptions grew to c.65,200 with
an average quarterly growth of 25% following field expansions with
Viatris in Q2 2023. The growth was primarily driven in large States
such as California, Florida, New York, and Texas.
o ACCRUFeR® net price per
prescription steadily increased to
$171 per prescription in Q2 2024 driven by successful execution of
our market access strategies. H1 2024 was $158 per prescription, a
33% increase from $119 per prescription in H1 2023.
· Global ACCRUFeR®/FeRACCRU® development
programs: Continued progress in development
stage partnerships in Canada, Republic of Korea, and
China.
o Kye Pharmaceuticals ("Kye") in
Canada: ACCRUFeR® recently approved by Health
Canada, the only oral iron therapy approved as a prescription drug
in Canada. The team at Kye has been preparing for launch in late
2024 pending this approval. In accordance with the collaborative
agreement with Kye, Shield is now due to receive a £250,000
milestone payment. For the remaining term of the agreement, Shield
will receive additional revenue-based milestone payments along with
double-digit royalties on net sales of ACCRUFeR®.
o Korea Pharma ("KP") in
Korea: KP filed a New Drug Application for
ACCRUFeR® in the Republic of Korea (South Korea) following the
successful completion of a pharmacokinetic (PK) study.
o ASK Pharma ("ASK") in
China: Enrolling patients into a Phase 3 study
that is similar in design to the previous studies conducted by
Shield which led to European Medicines Agency (EMA) and US Food
& Drug approval (FDA). The study is targeted to complete
enrolment in late 2024.
o Paediatric study:
Phase 3 paediatric clinical trial (FORTIS/ST10-01-305)
comparing the safety, tolerability and effectiveness
of an oral liquid suspension of ferric maltol with oral ferrous
sulphate liquid in children with iron deficiency anaemia (IDA)
expected to be completed in 2024. The trial is the final study in
the comprehensive paediatric development program that Shield
committed to implement with both the European EMA and the US FDA.
Anders Lundstrom,
Interim CEO of Shield Therapeutics, commented: "H1 2024 has been another strong period of growth for Shield which is
demonstrated through the significant increase in sales
figures, net selling price
and number of
prescriptions for ACCRUFeR® in the US. We continue to focus on
building momentum through creating greater awareness of ACCRUFeR®
among health care professionals in the US as well as expanding our
geographic reach with our international partners.
We have also
continued to manage our cash burn during launch and scale of
ACCRUFeR® while strengthening our balance sheet by implementing
innovative financing solutions like the working capital financing
with Sallyport in April and adding $5.7 million through the
milestone monetization agreement with AOP Health International
Management AG post period end. It is a very exciting time for
Shield, and we look forward to providing updates for shareholders
on our path to making ACCRUFeR® the oral iron of choice for
patients with iron deficiency, with or without anemia"
Investor
presentation
Interim CEO, Anders Lundstrom, and CFO, Santosh
Shanbhag, will be hosting a live online presentation relating to
the interim results via the Investor Meet Company platform
at 4.30pm (BST) today, Wednesday 4 September
2024.
The presentation is open to all existing and
potential investors. Questions can be submitted at any time during
the live presentation.
Investors can sign up to Investor Meet Company for
free and add to meet Shield Therapeutics plc via:
https://www.investormeetcompany.com/shield-therapeutics-plc/register-investor
For further
information please contact:
Shield Therapeutics plc
|
www.shieldtherapeutics.com
|
Anders Lundstrom, CEO
Santosh Shanbhag, CFO
|
+44 (0)
191 511 8500
|
Nominated Adviser and Joint Broker
|
|
Peel Hunt LLP
|
|
James Steel/Patrick
Birkholm
|
+44 (0)20
7418 8900
|
|
|
Joint Broker
Cavendish Ltd
Geoff Nash/ Rory Sale/Nigel
Birks/Harriet Ward
|
+44 (0)20
7220 0500
|
|
|
Financial PR & IR Advisor
|
|
Walbrook PR
|
|
Charlotte Edgar / Alice
Woodings
|
+44 (0)20
7933 8780 or shield@walbrookpr.com
|
|
|
About Iron Deficiency and
ACCRUFeR®/FeRACCRU®
Clinically low iron levels (aka iron
deficiency, ID) can cause serious health problems for adults of all
ages, across multiple therapeutic areas. Together, ID and ID with
anemia (IDA) affect about 20 million people in the US and represent
a $2.3B market opportunity. As the first and only FDA approved oral
iron to treat ID/IDA, ACCRUFeR® has the potential to meet an
important unmet medical need for both physicians and
patients.
ACCRUFeR®/FeRACCRU® (ferric maltol)
is a novel, stable, non-salt-based oral therapy for adults with
ID/IDA. The drug has a novel mechanism of absorption compared to other oral
iron therapies and has been shown to be an efficacious and
well-tolerated therapy in a range of clinical trials. More
information about ACCRUFeR®/FeRACCRU®, including the product
label, can be found at: www.accrufer.com and www.feraccru.com.
​
About Shield Therapeutics plc
Shield is a commercial stage
specialty pharmaceutical company that delivers ACCRUFeR®/FeRACCRU®
(ferric maltol), an innovative and differentiated pharmaceutical
product, to address a significant unmet need for patients suffering
from iron deficiency, with or without anemia. The Company has launched ACCRUFeR® in the U.S. with an
exclusive, multi-year collaboration agreement with Viatris. Outside
of the U.S., the Company has licensed the rights to four specialty
pharmaceutical companies. FeRACCRU® is commercialized in the UK and
European Union by Norgine B.V., which also has marketing rights in
Australia and New Zealand. Shield also has an exclusive license
agreement with Beijing Aosaikang Pharmaceutical Co., Ltd., for the
development and commercialization of ACCRUFeR®/ FeRACCRU® in China,
Hong Kong, Macau and Taiwan, with Korea Pharma Co., Ltd. for the
Republic of Korea, and with KYE Pharmaceuticals Inc. for
Canada.
ACCRUFeR®/FeRACCRU® has patent
coverage until the mid-2030s.
ACCRUFeR®/FeRACCRU® are registered
trademarks of Shield Therapeutics.
Forward-Looking Statements
This press release contains
forward-looking statements. All statements contained in this press
release that do not relate to matters of historical fact should be
considered forward-looking statements. These forward-looking
statements are based on management's current expectations and
include statements related to the commercial strategy for
ACCRUFeR®/FeRACCRU®. These statements are neither promises nor
guarantees, but involve known and unknown risks and uncertainties,
many of which are beyond our control, that may cause actual results
and performance or achievements to be materially different from
management's expectations expressed or implied by the
forward-looking statements, including, but not limited to, risks
associated with the Company's business and results of operations,
competition and other market factors. The forward-looking
statements made in this press release represent management's
expectations as of the date of this press release, and except as
required by law, the Company disclaims any obligation to update any
forward-looking statements contained in this release, even if
subsequent events cause its views to change.
Operational Review
Commercialisation of
ACCRUFeR® in the US
Shield continues to see the positive impact of the
successful organisational expansion and launch of ACCRUFeR®
in the US with our partner, Viatris Inc. Over the first half of
2024, we generated approximately $11 million in ACCRUFeR® net
revenues which is broadly on par with ACCRUFeR® net
revenues generated in the prior entire financial year (2023: $11.6
million) and a 3.5x increase compared to H1 2023.
ACCRUFeR® net price has steadily increased to $158
per prescription in H1 2024, a 33% increase on the same period last
year (H1 2023: $119 per prescription), driven by successful
execution of our market access strategies. Prescriptions grew to c.
65,200 in the first half of 2024 demonstrating an average quarterly
growth of 25% following field expansions with Viatris in Q2 2023.
The growth was primarily driven by large States such as California,
New York, and Florida. Following the challenges we experienced with
the transition and lack of a Texas State Medicaid Pharmacy Benefit
Manager (PBM) during Q1 2024, we continue to see a rebound in the
Texas prescription volume.
Overall, our sales team continues to receive very
positive feedback on the product from physicians. We continue to
believe this provides additional confirmation in two key areas.
First, that there is a need from health care professionals (HCPs)
and patients for an effective and well tolerated oral iron. Second,
ACCRUFeR® is highly promotionally sensitive, so the more HCPs we
can reach with sales and marketing efforts, the faster we can
increase awareness and the opportunity to grow our prescriber base.
Awareness about ACCRUFeR® as an option to treat iron deficiency,
with or without anaemia (ID/IDA) among many of these HCPs remains
quite low, and our objective is simple: increase awareness of
ACCRUFeR®, generate prescriptions from HCPs, and allow patients to
experience the benefits we believe ACCRUFeR® can provide. While we
have made continued progress over the first six months of this
year, there is much opportunity still ahead of us to make ACCRUFeR®
the oral iron of choice for patients with iron ID/IDA.
Global partnerships
and development
We have a number of global partnerships, and our
objective is to expand this, identifying further opportunities to
bring ACCRUFeR®/FeRACCRU® to patients with iron deficiency in as
many markets as possible. We have a long-standing relationship with
Norgine for the distribution of FeRACCRU® in Europe; their efforts
are primarily concentrated in those countries where we have
positive reimbursement, specifically Germany, UK and the Nordics.
During H1 2024, we received $1.1 million in revenues from our
global partners including royalties from Norgine in respect of
sales of FeRACCRU® in Europe.
We continue to make excellent progress in our
development stage partnerships in Canada, Republic of Korea, and
China. Health Canada has recently approved ACCRUFeR® (ferric
maltol) as a prescription drug for the treatment of adults with
iron deficiency anemia (IDA). This development allows
Shield's partner, Kye, to launch ACCRUFeR® in Canada. In accordance
with the collaborative agreement, Shield is now due to receive a
£250,000 milestone payment. For the remaining term of the
agreement, Shield will receive additional revenue--based milestone
payments along with double-digit royalties on net sales of
ACCRUFeR®.
In the Republic of Korea, our partner, Korea Pharma,
filed a New Drug Application for ACCRUFeR® following the successful
completion of a pharmacokinetic (PK) study.
Lastly, our partner in China, ASK Pharma, is
enrolling patients into a Phase 3 study that is similar in design
to the previous studies conducted by Shield which led to European
Medicines Agency (EMA) and US Food & Drug Administration
approval (FDA). The study is targeted to complete enrolment in late
2024. Each of these markets represent a growth opportunity with
many patients challenged in treating their iron deficiency today.
Shield receives various milestones and royalties on net sales
across each of these geographies.
Paediatric
study
Our paediatric study could lead to an expansion of
the indication and uses for ACCRUFeR®/FeRACCRU® in both US and EU
markets. The study, a requirement of both the FDA and EMA, is
enrolling patients with iron deficiency ranging from 12 months to
17 years of age. This is another population where iron deficiency
is prevalent and similar challenges to over-the-counter irons
exist. As part of this study, Shield is using a new liquid
formulation, which, if approved, may offer an alternative approach
for those who can't swallow our current capsule formulation. We
expect to complete enrolment of our paediatric study in 2024.
Outlook
The Group continued to execute the expansion and
growth of ACCRUFeR® in the first half of 2024. We have
substantially increased revenues, the net selling price and the
number of prescriptions for ACCRUFeR® in the US as we continue to
build awareness of the product and fine tune our commercial
efforts. Based on our internal assumptions we remain funded to
deliver on our growth plans. We see an oral iron market which
has clear unmet needs, based on physician and patient feedback, for
a product that delivers both effectiveness and tolerability. As we
move into the second half of 2024 and 2025, Shield and our partner
Viatris expect to achieve continued growth in ACCRUFeR®
prescriptions in the US along with further improvement of other
financial metrics. Additionally, we should complete our paediatric
study during 2024, increasing expansion opportunities in both the
US and EU in future years. Lastly, our ex-US partnerships continue
to progress not only making ACCRUFeR® /FeRACCRU® available around
the globe, but also adding to our revenues through both milestones
and royalties.
​
Financial Review
Revenue
Revenue in the first six months of 2024 (H1 2024)
amounted to $12.1 million (H1 2023: $3.7 million), of which $11.0
million (H1 2023: $3.1 million) was derived from ACCRUFeR® sales in
the US. The 2023 year-end audit process identified a change in the
accounting treatment of commercial rebates resulting in a reduction
in both, revenues as well as selling, general and administrative
expenses by $0.6 million compared to the H1 2023 Interim Financials
reported in September 2023. There was no impact on the loss for the
period, the balance sheet, or the cash flow. The balance of $1.1
million (H1 2023: $0.6 million) represents revenues from our global
partners including royalties from Norgine in respect of sales of
FeRACCRU® in Europe.
Approximately 65,200 prescriptions of ACCRUFeR® were
sold in the US in H1 2024 and that yielded net revenue of $11.0
million (H1 2023: $3.1 million from approximately 25,000
prescriptions). Additionally, the net average sales price per
prescription was $158 in H1 2024 an increase of 33% compared to
$119 per prescription in H1 2023.
In addition, the Group reports $0.1 million (H1 2023:
$4.3 million) of other operating income. Most of the other
operating income in H1 2023 was related to the deferred portion of
the upfront payment from Viatris Inc., Shield's co-promote partner
in the US, received at the end of 2022.
Cost of
sales
Cost of sales in H1 2024 amounted to $6.7 million (H1
2023: $2.1 million). The H1 2024 cost of sales comprises
manufacturing costs of the prescriptions sold in the US and in
Europe, plus the 45% share of the US net product revenues payable
to Viatris and 5% royalty on net sales, payable to Vitra
Pharmaceuticals Ltd (Vitra).
Selling,
general and administrative expenses
Selling, general and administrative expenses were
$18.8 million in H1 2024 (H1 2023: $17.0 million). The increase is
directly attributable to the expansion of the US commercial
business in connection with the implementation and commencement of
the co-promote partnership with Viatris. As indicated above, H1
2023 expenses reflects a change in the accounting treatment of
commercial rebates that were identified during the year end audit
process.
Research
and development
In H1 2024, $0.8 million in development costs were
expensed in the statement of profit and loss (H1 2023: $0.4
million). In addition, $1.5 million (H1 2023: $1.5 million) of
development expenditure was recorded directly to the balance sheet
in accordance with the underlying conditions for capitalization
(disclosed in the detail in the notes of the Company's 2023 annual
report). These development costs and expenditure have been spent in
connection with the ongoing pediatric study.
Loss for
the period
The loss for H1 2024 was $15.5 million (H1 2023:
$12.6 million) which includes financial income of $0.2 million (H1
2023: $0.3 million), financial expense of $1.6 million (H1 2023:
$0.6 million) and taxation of $0.0 million (H1 2023: $0.8
million).
Balance
sheet
Effective 30 April 2024, the Group strengthened its
balance sheet through a $10.0 million accounts receivable financing
with Sallyport Commercial Finance (Sallyport). The accounts
receivable financing is secured by ACCRUFeR® accounts receivables
in the US and bears an interest rate of WSJ Prime + 3.0% on funds
deployed. Additionally, the Group also amended its existing $20.0
million debt facility agreement with SWK Funding LLC (SWK), with
more favorable loan covenant terms.
Intangible assets on 30 June 2024 were $17.4 million
(31 December 2023: $16.9 million), comprised of $16.2 million of
capitalized ACCRUFeR®/FeRACCRU® development expenditure (31
December 2023: $15.7 million) and $1.2 million expenditure related
patents and trademarks (31 December 2023: $1.2 million) to
strengthen the Group's intellectual property.
Inventory on 30 June 2024 amounted to $4.0 million
(31 December 2023: $3.2 million), which comprises work in progress
and finished product available for sale.
Trade and other receivables increased to $15.4
million on 30 June 2024 from $13.5 million on 31 December 2023.
This change is driven by the higher sales volume in the
US.
The current tax asset of $0.3 million (31 December
2023: $0.6 million) represents anticipated R&D tax credits.
Cash and cash equivalents on 30 June 2024 amounted to
$8.1 million (31 December 2023: $13.9 million).
Trade and other payables increased from $12.7 million
on 31 December 2023 to $19.4 million on 30 June 2024. The increase
is largely attributed to the revenue share payment due to Viatris
on growing ACCRUFeR® sales, and the usage of the accounts
receivable financing mentioned above.
Cash
flow
Net cash outflow from operations in H1 2024 was $3.6
million (H1 2023: $19.9 million). The H1 2024 loss for the period
was $15.5 million but, after adjusting for various non-cash items,
the actual cash outflow from this loss was $12.9 million (H1 2023:
$10.8 million). Working capital cash outflows were $9.1 million in
H1 2023 turning to a working capital inflow of $9.3 million in H1
2024, mainly due to the growing sales of ACCRUFeR® in the US, the
usage of the accounts receivable financing (see note 11) mentioned
above, and the benefit of the R&D tax credits received in the
UK.
Net cash outflow from investing activities in H1 2024
was $0.8 million (H1 2023: $1.3 million) driven primarily by the
capitalized development expenditure of $1.0 million in H1 2024 (H1
2023: $1.5 million) partially offset by financial income.
The net cash outflow from financing activities in H1
2024 was $1.9 million (H1 2023: inflow $30.1 million) primarily
attributable to the interest paid on the Group long-term loan
financing. H1 2023 included $10 million proceeds from convertible
shareholder loan and $20 million cash raised from an equity
placing.
Going
concern
For the reasons set out in detail under Note 2 of the
attached condensed interim financial statements as of and for the
six months ended 30 June 2024, the Directors believe that it
remains appropriate to prepare the financial statements on a going
concern basis.
Consolidated statement of profit and
loss and other comprehensive income
for
the six months ended 30 June 2024
|
Note
|
Six months
ended
30 June
2024
(unaudited)
$000
|
Six months
ended
30
June
2023
(unaudited)
$000
|
Year
ended
31
December
2023
(audited)
$000
|
Revenue
|
4
|
12,132
|
3,743
|
13,085
|
Cost of sales
|
|
(6,675)
|
(2,085)
|
(9,058)
|
Gross profit
|
|
5,457
|
1,658
|
4,027
|
Other operating income
|
|
52
|
4,298
|
4,412
|
Operating costs - selling, general
and administrative expenses
|
5
|
(18,815)
|
(17,063)
|
(37,960)
|
Operating loss before impairment and research and development
expenditure
|
|
(13,306)
|
(11,107)
|
(29,521)
|
Impairment of intangible
assets
|
|
-
|
-
|
-
|
Research and development
expenditure
|
|
(752)
|
(434)
|
(1,810)
|
Operating loss
|
|
(14,058)
|
(11,541)
|
(31,331)
|
Financial income
|
|
203
|
326
|
518
|
Financial expense
|
|
(1,625)
|
(578)
|
(1,562)
|
Loss before tax
|
|
(15,480)
|
(11,793)
|
(32,375)
|
Taxation
|
|
2
|
(812)
|
(918)
|
Loss for the period
|
|
(15,478)
|
(12,605)
|
(33,293)
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income
|
|
|
|
|
Items that are or may be reclassified subsequently to profit
or loss:
|
|
|
|
|
Foreign currency translation
differences - foreign operations
|
|
(402)
|
894
|
(1,890)
|
Total comprehensive expenditure for the
period
|
|
(15,880)
|
(11,711)
|
(35,183)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share
|
|
|
|
|
Basic and diluted loss per share (in
US cents)
|
7
|
$(0.02)
|
$(0.02)
|
$(0.05)
|
Group balance sheet
at
30 June 2024
|
Note
|
|
|
30 June
2024
(unaudited)
$000
|
30
June
2023
(unaudited)
$000
|
31
December
2023
(audited)
$000
|
Non-current assets
|
|
|
|
|
Intangible assets
|
7
|
17,401
|
15,239
|
16,863
|
Property, plant and
equipment
|
|
524
|
327
|
673
|
Restricted cash
|
8
|
1,000
|
-
|
-
|
|
|
18,925
|
15,566
|
17,536
|
Current assets
|
|
|
|
|
Inventories
|
9
|
4,035
|
2,695
|
3,203
|
Trade and other
receivables
|
|
15,406
|
9,262
|
13,498
|
Current tax asset
|
|
296
|
550
|
614
|
Cash and cash equivalents
|
|
8,099
|
13,594
|
13,948
|
|
|
27,836
|
26,101
|
31,263
|
|
|
|
|
|
Total assets
|
|
46,761
|
41,667
|
48,799
|
Non-current liabilities
|
|
|
|
|
Convertible shareholder
loan
|
|
-
|
(5,705)
|
-
|
Long-term loan
|
|
(19,679)
|
-
|
(19,836)
|
Lease liabilities
|
|
-
|
-
|
(195)
|
Fair value of loan conversion
feature
|
|
-
|
-
|
-
|
|
|
(19,679)
|
(5,705)
|
(20,031)
|
Current liabilities
|
|
|
|
|
Trade and other payables
|
10
|
(19,364)
|
(8,080)
|
(12,721)
|
Lease liabilities
|
|
(292)
|
(67)
|
(214)
|
Other liabilities
|
11
|
(6,885)
|
(713)
|
(800)
|
|
|
(26,541)
|
(8,860)
|
(13,735)
|
|
|
|
|
|
Total liabilities
|
|
(46,220)
|
(14,565)
|
(33,766)
|
|
|
|
|
|
Net
assets
|
|
541
|
27,102
|
15,033
|
Equity
|
|
|
|
|
Share capital
|
12
|
(15,011)
|
(13,734)
|
(15,011)
|
Share premium
|
|
(198,759)
|
(173,087)
|
(198,759)
|
Merger reserve
|
|
(43,240)
|
(42,966)
|
(43,240)
|
Currency translation
reserve
|
|
8,050
|
(10,603)
|
(8,452)
|
Deposit for shares
|
|
-
|
-
|
-
|
Accumulated deficit
|
|
248,419
|
213,288
|
233,525
|
Total equity
|
|
(541)
|
(27,102)
|
(15,033)
|
|
|
|
|
|
|
Group statement of changes in
equity
for
the six months ended 30 June 2024
|
Share
capital
$000
|
Deposit
For shares
$000
|
Share
premium
$000
|
Merger
reserve
$000
|
Currency
translation
reserve
$000
|
Retained
earnings
$000
|
Total
$000
|
Balance at 1 January 2023 (audited)
|
5,371
|
(100)
|
169,482
|
43,240
|
(10,342)
|
(201,107)
|
6,544
|
Loss for the year
|
-
|
-
|
-
|
-
|
-
|
(33,293)
|
(33,293)
|
Other comprehensive
income:
|
|
|
|
|
|
|
|
Foreign currency translation differences
|
-
|
-
|
-
|
-
|
1,890
|
-
|
1,890
|
Total comprehensive expense for the year
|
-
|
-
|
-
|
-
|
1,890
|
(33,293)
|
(31,403)
|
Transactions with owners, recorded directly in
equity
|
|
|
|
|
|
|
|
Equity placing
|
6,556
|
100
|
19,819
|
-
|
-
|
-
|
26,475
|
Warrants exercised
|
98
|
-
|
345
|
|
|
|
443
|
Loan conversion
|
2,986
|
-
|
9,113
|
-
|
-
|
-
|
12,099
|
Equity-settled share-based payment
transactions
|
-
|
-
|
-
|
-
|
-
|
875
|
875
|
Balance at 31 December 2023 (audited)
|
15,011
|
-
|
198,759
|
43,240
|
(8,452)
|
(233,525)
|
15,033
|
Loss for the period
|
-
|
|
-
|
-
|
-
|
(15,478)
|
(15,478)
|
Other comprehensive
income:
|
|
|
|
|
|
|
|
Foreign currency translation differences
|
-
|
|
-
|
-
|
402
|
-
|
402
|
Total comprehensive expense for the period
|
-
|
-
|
-
|
-
|
402
|
(15,478)
|
(15,076)
|
Transactions with owners, recorded directly in
equity
|
|
|
|
|
|
|
|
Equity placing
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Loan conversion
|
-
|
|
-
|
-
|
-
|
-
|
-
|
Equity-settled share-based payment
transactions
|
-
|
|
-
|
-
|
-
|
584
|
584
|
Balance at 30 June 2024 (unaudited)
|
15,011
|
-
|
198,759
|
43,240
|
(8,050)
|
(248,419)
|
541
|
|
|
|
|
|
|
|
|
|
Group statement of cash
flows
for
the six months ended 30 June 2024
|
Six months
ended
30 June
2024
(unaudited)
$000
|
Six
months
ended
30
June
2023
(unaudited)
$000
|
Year
ended
31
December
2023
(audited)
$000
|
Cash flows from operating activities
|
|
|
|
Loss for the period
|
(15,478)
|
(12,605)
|
(33,293)
|
Adjustments for:
|
|
|
|
Depreciation and
amortization
|
601
|
524
|
1,071
|
Equity-settled share-based payment
expenses
|
584
|
176
|
875
|
Financial income
|
(203)
|
(326)
|
(518)
|
Financial expense
|
1,625
|
578
|
1,562
|
Impairment of intangible
assets
|
-
|
-
|
-
|
Income tax
|
-
|
813
|
918
|
|
(12,871)
|
(10,840)
|
(29,385)
|
Increase in inventories
|
(832)
|
(938)
|
(1,446)
|
Increase in trade and other
receivables
|
(1,908)
|
(3,612)
|
(7,007)
|
|
|
|
|
Increase in restricted
cash
|
(1,000)
|
-
|
-
|
Increase/(decrease) in trade and
other payables
|
6,643
|
(3,364)
|
1,907
|
Increase/(decrease) in other
liabilities
|
5,212
|
(1,142)
|
(478)
|
Income tax
received/(paid)
|
1,191
|
-
|
(717)
|
Net
cash flows from operating activities
|
(3,565)
|
(19,896)
|
(37,126)
|
Cash flows from investing activities
|
|
|
|
Financial income
|
203
|
326
|
518
|
Acquisition of tangible
assets
|
(34)
|
(178)
|
(239)
|
Capitalised development
expenditure
|
(978)
|
(1,466)
|
(2,709)
|
Net
cash flows from investing activities
|
(809)
|
(1,318)
|
(2,430)
|
Cash flows from financing activities
|
|
|
|
Cash raised from equity
placing
|
-
|
20,170
|
26,375
|
Interest paid
|
(1,782)
|
-
|
(613)
|
Warrants exercised
|
-
|
-
|
442
|
Proceeds from convertible
shareholder loan
|
-
|
10,000
|
10,000
|
Proceeds from long-term
loan
|
-
|
-
|
19,446
|
Total cash outflow from
leases
|
(117)
|
(40)
|
(546)
|
Net
cash flows from financing activities
|
(1,899)
|
30,130
|
49,656
|
Net increase/(reduction) in
cash
|
(6,273)
|
8,916
|
10,100
|
Effect of exchange rate fluctuations
on cash held
|
424
|
1,276
|
446
|
Cash and cash equivalents at
beginning period
|
13,948
|
3,402
|
3,402
|
Cash and cash equivalents at period end
|
8,099
|
13,594
|
13,948
|
Notes
for
the six months ended 30 June 2024
1.
General information
Shield Therapeutics plc (the
"Company") is incorporated in England and Wales as a public limited
company. The Company trades on the London Stock Exchange's AIM
market, having been admitted on 26 February 2016.
The Company is domiciled in England
and the registered office of the Company is at Northern Design
Centre, Baltic Business Quarter, Gateshead Quays NE8
3DF.
The financial statements in this
interim report comprise the Company and its subsidiaries (together
referred to as the 'Group'). The Group is engaged in the late-stage
development and commercialization of clinical stage pharmaceuticals
to treat unmet medical needs.
This interim report, which is not
audited, has been prepared in accordance with the measurement and
recognition criteria of EU Adopted International Financial
Reporting Standards. It does not include all the information
required for full annual financial statements and should be read in
conjunction with the consolidated financial statements of the Group
as at and for the year ended 31 December 2023. This financial
information does not constitute statutory financial statements as
defined in Section 435 of the Companies Act 2006. The comparative
figures for the year ended 31 December 2023 are not the Company's
statutory accounts for that financial year. Those accounts have
been reported on by the Company's auditor and delivered to the
Registrar of Companies. The report of the auditors was unqualified.
The auditor has reported on those accounts; their report was
unqualified and did not contain a statement under Section 498 (2)
or (3) of the Companies Act 2006.
The interim report was approved by
the board of directors on 4 September 2024.
2.
Accounting policies
The accounting policies applied in
these interim financial statements are consistent with those of the
annual financial statements for the year ended 31 December 2023, as
described in those annual financial statements.
Going concern
At 30 June 2024, the Group held $8.1
million in cash. On 3 July 2024, the Group announced a $5.7 million
milestone monetization agreement with AOP.
The Directors have considered the
funding requirements of the Group through the preparation of
detailed cash flow forecasts for the period to December 2025,
including the prospective ACCRUFeR® sales revenues and the related
commercial operating costs. These forecasts show that the Group's
monthly cash flows start to turn positive in H2 2025 and that the
funding detailed above should provide sufficient cash to allow the
business to continue in operations for at least twelve months from
the date of this report. The Directors have considered scenarios in
which sales revenues fall below forecasts. In these circumstances
mitigating actions such as reduction of discretionary selling and
marketing expenditure could be taken to preserve cash. The
Directors also believe that other forms of finance, such as debt
finance or royalty finance are likely to be available to the
Group.
Based on the above factors, the
Directors believe that it remains appropriate to prepare the
financial statements on a going concern basis.
3.
Critical accounting judgments and key sources of estimation
uncertainty
In the application of the Group's
accounting policies, management is required to make judgments,
estimates and assumptions about the carrying amounts of assets and
liabilities that are not readily apparent from other
sources.
The significant judgments made in
relation to the financial statements are:
Development expenditure
Development expenditure is
capitalized when the conditions referred to in Note 2 of the
Company's annual report are met.
Estimates and underlying assumptions
are reviewed on an ongoing basis. Revisions to accounting estimates
are recognized in the period in which the estimate is revised if
the revision affects only that period or in the period of the
revision and future periods if the revision affects both current
and future periods. The significant estimates which may lead
to material adjustment in the next accounting period
are:
Valuation of intellectual
property associated with ACCRUFeR®/FeRACCRU®
The valuation of intellectual
property associated with ACCRUFeR®/FeRACCRU® (including patents,
development costs and the Company's investment in Shield TX
(Switzerland) AG) is based on cash flow forecasts for the
underlying business and an assumed appropriate cost of capital and
other inputs in order to arrive at a fair value for the asset. The
realization of its value is ultimately dependent on the successful
commercialization of the asset. In the event that commercial
returns are lower than current expectations this may lead to an
impairment. No impairment has been recognized to date.
Deferred tax
assets
Estimates of future profitability
are required for the decision whether to create a deferred tax
asset. To date no deferred tax assets have been
recognized.
4.
Segmental reporting
The following analysis by segment is
presented in accordance with IFRS 8 on the basis of those segments
whose operating results are regularly reviewed by the Chief
Operating Decision Maker (considered to be the Board of Directors)
to assess performance and make strategic decisions about the
allocation of resources. Segmental results are calculated on an
IFRS basis.
A brief description of the segments
of the business is as follows:
·
ACCRUFeR®/FeRACCRU® - development and
commercialization of the Group's lead ACCRUFeR®/FeRACCRU®
product
·
PT20 - development of the Group's secondary asset
(all related assets were written off effective 31 December
2022)
Operating results which cannot be
allocated to an individual segment are recorded as central and
unallocated overheads.
|
|
Six months ended 30 June 2024
(unaudited)
|
|
|
|
Six months
ended 30 June
2023
(unaudited)
|
|
|
|
ACCRUFeR®/
FeRACCRU®
$000
|
PT20
$000
|
Central and unallocated
$000
|
Total
$000
|
ACCRUFeR®/
FeRACCRU®
$000
|
PT20
$000
|
Central
and unallocated $000
|
Total
$000
|
Revenue
|
12,132
|
-
|
-
|
12,132
|
3,743
|
-
|
-
|
3,743
|
Operating loss
|
(12,412)
|
-
|
(1,652)
|
(14,058)
|
(865)
|
-
|
(10,676)
|
(11,541)
|
Financial income
|
|
|
|
203
|
|
|
326
|
326
|
Financial expense
|
|
|
|
(1,625)
|
|
|
(578)
|
(578)
|
Tax
|
|
|
|
2
|
|
|
|
(812)
|
Loss for the period
|
|
|
|
(15,478)
|
|
|
|
(12,605)
|
|
|
Year ended
31 December
2023
(audited)
|
|
|
|
ACCRUFeR®/
FeRACCRU®
$000
|
PT20
$000
|
Central
and unallocated $000
|
Total
$000
|
Revenue
|
13,085
|
-
|
-
|
13,085
|
Operating loss
|
(26,649)
|
858
|
(5,540)
|
(31,331)
|
Financial income
|
|
|
518
|
518
|
Financial expense
|
|
|
(1,562)
|
(1,562)
|
Tax
|
|
|
|
(918)
|
Loss for the period
|
|
|
|
(33,293)
|
The revenue analysis in the table
below is based on the country of registration of the fee-paying
party. $11.0 million revenue (H1 2023: $3.1 million) was derived
from ACCRUFeR® sales in the US and $1.1 million (H1 2023: $0.6
million).
|
|
Six months
ended
30 June
2024
(unaudited)
$000
|
Six
months
ended
30
June
2023
(unaudited)
$000
|
Year
ended
31
December
2023
(audited)
$£000
|
USA
|
10,955
|
3,151
|
11,570
|
The Netherlands
|
1,067
|
592
|
1,495
|
Canada
|
-
|
-
|
-
|
South Korea
|
110
|
-
|
20
|
|
12,132
|
3,743
|
13,085
|
5.
Operating costs - selling, general and administrative
expenses
Operating costs are comprised
of:
|
Six months ended 30 June
2024
(unaudited)
$000
|
Six months
ended 30 June 2023
(unaudited)
$000
|
Year ended
31 December 2022
(audited)
$000
|
Selling costs
|
12,341
|
11,202
|
21,717
|
General and administrative
expenses
|
5,703
|
5,366
|
15,172
|
Depreciation and
amortization
|
771
|
495
|
1,071
|
|
18,815
|
17,063
|
37,960
|
6.
Loss per share
The basic loss per share of $0.02
(H1 2023: $0.02) has been calculated by dividing the loss for the
period by the weighted average number of shares of 782,056,367 in
issue during the six months ended 30 June 2024 (six months ended 30
June 2023: 702,902,306).
Although there are potentially
dilutive ordinary shares these would not serve to increase or
reduce the loss per ordinary share, as the Group is loss-making.
There is therefore no difference between the loss per ordinary
share and the diluted loss per ordinary share.
7.
Intangible assets
|
ACCRUFeR®/
FeRACCRU®
patents and
trademarks
$000
|
ACCRUFeR®/
FeRACCRU®
development
costs
$000
|
Total
$000
|
Cost
|
|
|
|
Balance at 1 January 2023
(audited)
|
2,284
|
16,245
|
18,529
|
Additions - externally
purchased
|
|
2,709
|
2,709
|
Effect of change in foreign
currency
|
126
|
878
|
1,004
|
Balance at 31 December 2023
(audited)
|
2,410
|
19,832
|
22,242
|
Additions - externally
purchased
|
-
|
1,466
|
1,466
|
Effect of change in foreign
currency
|
(29)
|
(203)
|
(232)
|
Balance at 30 June 2024 (unaudited)
|
2,381
|
20,607
|
22,988
|
Accumulated amortization
|
|
|
|
Balance at 1 January 2023
(audited)
|
1,054
|
3,267
|
4,321
|
Charge for the period
|
121
|
705
|
826
|
Effect of change in foreign
currency
|
52
|
180
|
232
|
Balance at 31 December 2023
(audited)
|
1,227
|
4,152
|
5,379
|
Charge for the period
|
47
|
388
|
435
|
Effect of change in foreign
currency
|
(26)
|
(184)
|
(210)
|
Balance at 30 June 2024 (unaudited)
|
1,262
|
4,325
|
5,587
|
Net
book values
|
|
|
|
30
June 2024 (unaudited)
|
1,119
|
16,282
|
17,401
|
31 December 2023
(audited)
|
1,183
|
15,680
|
16,863
|
8.
Restricted cash
The Group has $1.0 million (H1 2023:
$Nil) of restricted cash held within an escrow account in relation
to the accounts receivable financing with Sallyport Commercial
Finance, LLC.
9.
Inventories
|
|
Six months ended 30 June
2024
(unaudited)
$000
|
Six months
ended 30 June 2023
(unaudited)
$000
|
Year ended
31 December 2023
(audited)
$000
|
Work in progress
|
|
1,284
|
-
|
1,098
|
Finished goods
|
|
2,751
|
2,695
|
2,105
|
|
|
4,035
|
2,695
|
3,203
|
10.
Trade and other payables
|
|
Six months ended 30 June
2024
(unaudited)
$000
|
Six months
ended 30 June 2023
(unaudited)
$000
|
Year ended
31 December 2023
(audited)
$000
|
Taxation payables
|
|
3,674
|
2,835
|
4,049
|
Accruals
|
|
15,690
|
5,245
|
8,672
|
|
|
19,364
|
8,080
|
12,721
|
11. Other
liabilities
|
|
Six months ended 30 June
2024
(unaudited)
$000
|
Six months
ended 30 June 2023
(unaudited)
$000
|
Year ended
31 December 2023
(audited)
$000
|
Taxation and social
security
|
|
33
|
63
|
96
|
Accounts receivable
financing
|
|
6,835
|
-
|
-
|
Other payables
|
|
17
|
650
|
704
|
|
|
6,885
|
713
|
800
|
12. Share capital
|
Six months ended 30 June
2024
Number
000
|
Six months ended 30 June
2024
$000
|
Six months
ended 30 June 2023 Number
000
|
Six months
ended 30 June 2023
$000
|
Year
ended
31
December 2023
Number
000
|
Year ended
31 December 2023
$000
|
At beginning of period
|
782,056
|
15,011
|
259,388
|
5,371
|
259,388
|
5,371
|
Exercise of share options
|
-
|
-
|
|
|
-
|
-
|
Conversion of loan
|
-
|
-
|
158,805
|
2,941
|
158,805
|
2,986
|
Warrants exercised
|
|
|
|
|
5148
|
98
|
Equity placing
|
-
|
-
|
294,844
|
5,422
|
358,715
|
6,556
|
Total shares authorized and in issue at end of period - fully
paid
|
782,056
|
15,011
|
713,037
|
13,734
|
782,056
|
15,011
|
No share options were exercised
during the six months ended 30 June 2024 (six months ended 30 June
2023: Nil)
13. Subsequent events
On 3 July 2024 the Group
announced a $5.7 million milestone
monetization agreement with AOP. Under the
terms of the Agreement, AOP provided Shield with $5.7 million in
cash, in exchange for the right to receive the $11.4 million China
approval milestone payment that may be paid to Shield by Jiangsu
Aosaikang Pharmaceutical Co., Ltd. ASK Pharma continues to enroll
patients into a Phase 3 study and enrollment is expected to
complete late in 2024. Subject to the Phase 3 reading out
successfully and regulatory approval by the Chinese regulator
Shield believes the Approval Milestone may be payable by the year
ending 2026. Under the terms of the Agreement, if the
Approval Milestone falls due Shield is required to pay its full
value to AOP 30 days after the Approval Milestone has been
achieved. Further, if the Approval Milestone has not been triggered
by 31 December 2026, or in the event the Agreement is terminated,
including at Shield's election or due to a breach by Shield of its
terms, the Advance plus accrued interest and fees at the interest
rate of SOFR+9.25% (calculated from the date of the Advance until
the day of payment) and an exit fee of 6.5% of the Advance will be
payable by Shield to AOP. The Advance will be secured inter alia by
AOP's right to receive the ASK Approval Milestone.