Shield Therapeutics (LSE:STX) — Company update

0:01 Good afternoon, and welcome to the SHIELD THERAPEUTICS PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the q and a tab situated in the right corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company will review your questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Greg Madison, CEO. Good afternoon to you, sir.

0:31 Great, great. Thank you, everybody, and thanks for taking the time to join us here this morning here in The US and afternoon over there in The UK. So excited to talk to you. We've had a couple of big announcements here over the past twenty four to thirty six hours. I'm joined here by Doctor. Jose Manoio, our Chief Medical Officer here in Boston. Hans Peter Rudolf, our Chief Financial Officer, also is joining, and he's currently in Switzerland, but will be over here in The U. S. With us next week. So we're excited for his arrival. Again, we're really thankful for you to take the time to listen and engage with us here in the presentation. And we're very, very excited about a couple of news releases that just went out over the past twenty four hours. First, announcing our collaborative sales agreement with Viatris, a new commercial partnership there, which can really expand our commercial resources for AcroFur here in The U. S. And has a number of different impacts on our business. We're very, very excited to work with a new partner there. We also announced just yesterday the completion of an $18,500,000 equity raise in gross proceeds.

1:32 So that layer on top of an extension of the debt deal and the upfront from Beatrice. We collectively have a new roughly 33,500,000 in new capital to go after and really expand our presence here in The U. S. And we'll make the most of this active opportunity. So we'll go through that in detail, but very, very excited to discuss this with you, and we feel very good about our current business and probably where we're going to be going in the future. So first and foremost, as noted, we signed a collaborative sales agreement with Viatris, and that was announced yesterday. We couldn't be more excited to work with this new commercial partner in Viatris. And collectively, our mission here is to make Aquifer the oral iron of choice here in The United States. I'm going to talk about the marketplace.

2:19 It's important to remind everybody just how big this market is and what that opportunity looks like overall. I think collectively, between us and our team over at Beatrice, we're very, very excited. And importantly, there are millions of patients out there suffering from iron deficiency with or without anemia, and it's critical that they get the treatment they needed, right? Iron deficiency is not something to belittle, very severe symptoms associated with that. So I think collectively, our thinking is, let's get as many patients as possible onto our product, Aquifer, that are in need of a treatment like that overall. And then everything kind of falls off that. Back in the day, somebody used to work for us and good medicine is good business. We think we've got a great medicine, a great opportunity.

3:04 And with that comes nice results on the back end. And collectively, again, we're excited to work with a new partnership at V interest to go after that. We'll talk more in detail what that looks like. So this is collectively now expansion commercial resources between us and Beatrice. For us, specifically more at SHIELD, what that does for us overall. Number one, I think this validates the whole iron market and our opportunity with AcroFair. I'm going to talk a little bit more about that in detail. But the work the team here has been doing at SHIELD with our small commercial team, a relatively small footprint to really establish this market overall, think we've established a very, very solid foundation, and we are very much looking forward to accelerating that. So between us and our partner, this also has the benefit to increase that aquifer awareness and adoption. Obviously, with that comes increase in revenues.

3:55 For us at SHIELD, this also allows us to decrease the time it would take to reach positive cash flow. And importantly, it also decreases our raw capital needs. And we certainly evaluated a couple of different pathways here. There's certainly a pathway where we looked at, you know, can SHIELD, can we do this, you know, by ourselves and do this alone? Right? And the answer to that is yes. However, you know, it takes a lot of time, a lot of resources, and things like that. And in this current market environment, it's just a it would be a more difficult and challenging path that require an extensive amount of capital to get us there overall. So the agreement that we've signed here, it certainly checks a lot of boxes for us, but allows us to do it in with a really strong partner that has a lot of resources that we can be able to tap into collectively.

4:40 But importantly, it accelerates revenues, decreases time to cash flow and obviously is a much more efficient use of capital with the way that we've structured this this deal across the board. So again, for us here at SHIELD, we think this is a very, very good deal across the board. The other thing to add into this as well is it's not just the resources and the collective resources we can bring to to bear as both organizations here. But the team there, I just can't tell you how motivated they are about the opportunity. They went out and did extensive amount of market research on the oral iron market. They talked to physicians here in The U. S. About the market, the treatment paradigm, what the OTCs look like overall and really spent a good amount of time to understand the marketplace.

5:27 And their collective view is very aligned with ours that this is a market PLC. That is absolutely ripe for innovation here, ripe for somebody to come in. It's a very promotion sensitive market, and they believe we can help. So they spent a lot of time there, which really helps validate, I think, the work that we've been doing here at SHIELD So really, what does this pathway to drive AgroFERAPEUTICS growth look like in collaboration with our new partner here overall? So I think folks understand Beatrice is a large global organization, 37,000 employees across the globe here, very well established infrastructure here in The U. S, which is excellent across the board. We've signed this agreement with them overall. And as part of the agreement, the way this works, so we'll receive a $5,000,000 upfront upon signing.

6:12 We have eligibility to achieve sales milestones totaling about $30,000,000 based on achievement in net revenues. This is a revenue and cost sharing model. Right? So what I mean by that is, you know, we'll we'll share net revenues. SHIELD will retain a slightly higher percentage of the net revenues overall. And then we also will share marketing costs, right? And SHIELD will contribute a slightly higher percentage of the overall marketing costs as we go out there and promote AgriFER. So the beauty of this structure overall, and there's a number of different ways you can structure these deals. But the way this is the beauty of this is both organizations are very much aligned on, let's get awareness driven for Aquifer. Let's get as many patients as possible on the medicine that need it. We're going to drive net revenues with that. We both benefit from growing those net revenues. We're also going to be very thoughtful about the cost structure that goes with that, right? How do we deploy the costs that are appropriate to drive those for the net revenues? Let's share collectively where those costs go, how much it is, but also where that assets are deployed. So very much looking at this as you would expect across both companies of running this business and being a careful thought process on that. We've had very nice results with our small 30 person sales team in 2022.

7:29 We'll talk about that in just a few minutes here. But this solid foundation of prescription growth really now can get accelerated. So we're going to go from a 30 person contract sales team, trying to get out there in front of physicians and talk about Aquifer to now collectively a 100 person combined sales team, 50 from the SHIELD organization, 50 from Viatris, which the ability to call on over 12,000 healthcare professionals. And we're going to focus exclusively on women's health and primary care, which drives the bulk of the oral line market. 80% of the prescriptions come out of those two specialties. And just for clarity, when I see women's health, that's OBGYNs as well as nurse practitioners and physician assistants here in The U. S. That specialize in that area. So this dramatic expansion of commercial resources on the field sales side is significant, and we'll talk about some other opportunities here as well. So with all that, we expect that your revenue generation can accelerate significantly.

8:25 We're targeting $150,000,000 by year end 2025. And then for SHIELD as an organization, that allows us to get to be a cash flow positive by the end of twenty twenty four. So in addition to the announcement of the Viatra side, which we'll talk a little bit more about in detail, we also have been very busy on the fundraising side. Collectively, as noted earlier, we've now got additional $33,500,000 to work with here, made up of the $5,000,000 upfront payment from Beatrice, the $10,000,000 extension of the convertible debt deal with our largest shareholder, AOP. And then we raised announced just yesterday, 18,500,000 in gross proceeds in equity overall that bears you obviously require shareholder approval, which will come up here in a couple of weeks. But we're really, really pleased, especially in this type of market with the results that we have.

9:17 We had very strong support on the equity side with our existing shareholders, but we're also going to attract a lot of really new and important investors into the story here as well. They just looked at where SHIELD is, what we've done and what that future can look like. So we're really, really pleased with the results, particularly again in a very difficult market environment to have that kind of support from our both existing and new investors. So a really, really good start for us. This bears in mind repeating, right? And at the risk of sounding like a broken record, but every time I get on the phone with you, I want to talk about this market. I think this is the view of something that we've had from the beginning. And putting words in our partners' mouth, I think this is the view that they have as well based on their market research that you've got a very, very large market here. You've got twenty million patients suffering from anemia.

10:09 There are over 13,000,000 prescriptions written every single year for oral iron here in The U. S. And all of that is OTC iron, right? It's all this over the counter iron, ferrous based products overall, and there's a plethora of choices out there. So there's a lot of prescriptions. And when you total all up, this is a $2,300,000,000 market, right? This is not a small market. So the nice thing is we know where these prescriptions are coming from. As noted before, eighty percent get rid by women's health and general practitioners overall. And you dive into this, and we've talked about this before, it's an incredibly unsatisfied market, right? These poor patients that are just suffering from extreme fatigue, mental confusion, exhaustion that just can't even do normal everyday tasks, They're just cycling around these OTC irons, looking for the right one that is going to deliver what they need, right? And it's these OTCs are plagued with poor efficacy, a lot of GI related adverse events, a lot of discontinuation rates, and physicians are super frustrated and the patients are too. Lastly, there's been little to no innovation in this market over the past decade, right? So Aquifer is the first and only FDA approved oral iron to treat iron deficiency with or without anemia regardless of the etiology, right? So you've got a wide open market here. Now the challenge that comes with that, this is the work that we've been doing, is you got to kind of wake the market up.

11:33 It's dormant market in many regards, meaning that physicians have been so beaten down by poor expectations of oral irons that they kind of lump all those irons together in class. It's the first line therapy, ninety percent of prescriptions here in The U. S. Are written for oral iron first overall, but their expectation level is really, really low. It's kind of what physician referred to it as the hope and pray strategy, meaning that they're gonna write an ORION. They hope and pray that, number one, the patient tolerated. Number two, they actually can get the iron stores up to where it needs to be. Number three, they actually stand up long enough to get the success overall. So it's a frustrating market overall for sure, but we can wake it up, right? Meaning that we need to educate physicians that you should expect more from an oral iron, but you've got to have a product that can deliver that promise as well.

12:21 So waking up this market, that's the work we've been doing. A lot of that is just driving awareness, understanding and getting that first prescription initiated as well. So now as a small 30 person team growing to over 100 with other resources, this is what really excites, I think, all of us across the organization. I know that you've got to have a product to deliver on that promise that you should expect more from an oral iron to treat these patients. We deliver on that promise, right, in our clinical trials with our unique formulation, the mechanism of action we have that is just very, very different than these ferrous based compounds where we do not dissociate in the stomach and have free high end circulating in the gut causing all these GI related distress and adverse events, our product stays intact all the way down to the site where it actually gets absorbed overall. Right? So that allows us to use a low dose of iron but be very, very effective on the side.

13:15 And then importantly, do it in such a way that it's just well tolerated. In the clinical studies, you should see average reaction is less than five percent, discontinuation rate rate is less than five percent. So when we get the opportunity to actually get in front of a physician and have this discussion. Right? Meaning, tell me about, you know, your your your work with, you know, previous oral lines, what's your experience, and you get that, you know, deep sigh and just an eye roll. Like, right. Let me tell you all that stuff that's wrong. And then we understand and show them, well, here's Aquifer. Here's how it works. Here's why it's different. Here's the clinical results. You get that leaning in aspect, right? There's interest and they wanna prescribe, right? So this is a very, very promotionally sensitive product, right? The more physicians we can reach, either with representatives or other means, the more often we can see them, has a huge impact on our ability to drive not just awareness, but adoption and prescription growth as well.

14:11 All of that, as noted, very, very big market, dollars 2,300,000,000 market opportunity there, limited competition, but the challenge is obviously to wait that market out for sure. So let's talk a little bit about what we at SHIELD have done alone in 2022 and talk about some of our achievements here, then we can talk about how that's now gonna get leveraged with the new collaboration agreement we just signed. So we're very pleased. These are numbers all the way through the third quarter two thousand twenty two. We've generated a total of just under 16,000 total prescriptions. We've had a nice increase in first time prescribers of Aquifer with over 1,600 new first time prescribers of Aquifer. As noted, women's health continues to be a very big area for us. Fifty percent of our prescriptions coming out of the women's health specialty. So whether or not it's women with just heavy menstrual bleeding, pregnancy, iron deficiency associated with uterine fibroids, There's one in five women here in The US that suffer from iron deficiency, so that continues to be a very big market segment for us to go after.

15:17 We established payer coverage early last year. We've maintained that level of a 100,000,000 lives across commercial Medicaid organizations right now. And, also, we generated total $2,400,000 in net revenues for the first three quarters in 2022. So very pleased with the achievements. This chart, you know, obviously, is something that you always like to see. Right? It's just it talks about these are dispensed prescriptions here in The U. S. From physicians to patients overall, starting from our launch in July 2021 when nobody in The U. S. Had ever heard of AcroFirm, right? We've talked about that before, where for a variety of reasons, SHIELD didn't do any of the premarket development, but we came in and launched, and there was zero awareness. No one ever heard of ACRAVERS. From that small beginning to where we stand now, and we fully expect in the fourth quarter, will come in, in a range of 9,000 to 10,000 prescriptions overall.

16:10 Very, very nice quarterly growth. And to emphasize again, this is being done with a 30 person contract sales team. In the fourth quarter, as we're working on this deal, we actually have 22 reps in the field, right? So we had a much smaller footprint out there overall, but they've done a really, really nice job, and we have a nice opportunity to build upon this as well. And as noted, you see half of those prescriptions come from Women's Health. On the payer access side, we established payer access just about this time last year, late December last year, so we signed our first commercial agreements. Overall, we've got to about forty percent of eligible lives, about 100,000,000 altogether in about April and May timeframe. We've kind of helped maintain that level throughout this year. We continue to kinda pull that through from prescription level. And this is one of those areas in addition to the, you know, expanded commercial presence in the field sales side that we're talking about. We're very much in sync with our partner VHS in terms of, how do we expand this payer access overall, is there opportunities, and they get some nice resources that we can tap into that we'll talk

17:10 about in just a second. And last but not least, you've got a team here in The US that knows how to execute and is so eager to get going with this partnership. I I can't even describe it overall. As noted earlier, when I joined as CEO, I inherited a small commercial team the previous CEO had hired. Within the first six months, I've kinda moved all of them out and replaced them with really high capable and super, super motivated people here. All these folks joined us in 2022 with Chrissy joining us in just May of this year. I will tell you that even ahead of this deal, the commercial teams on both sides, both Beatrice and SHIELD, have been working very hard behind the scenes so that we hit the ground running. Right? So we've got a lot of work that's already been done right now. We've got territories mapped out. We got all the alignments done. We got the recruiters hired. They're starting to recruit literally right now as we speak. There's been a lot of work on the the data side and, you know, how we view the the whole piece.

18:07 We've got training programs already lined up. So the team has been very, very hard at work with the Beatrice team again so that nobody's waiting for the the to officially be signed. We're gonna hit the ground running in this, and I think both teams are really, really motivated. So I think we've been really clear with all that we've done at SHIELD. As happy as I am to go after really go after that $2,300,000,000 market, we had to scale our business. Right? Just doing it with 30 you know, 22 or 30 people, whatever you wanna call it, in the field. We've had limited resources to deploy on the marketing side. We're happy with the results so far, but, man, there's just so much more we can and should do. And I think collectively, this is what excites us overall that beyond shadow of a doubt, we've established, you'll call it proof of concept, solid foundation, whatever you may be, and we can build off this, and it's exactly what we intend to do.

18:58 So the three key areas we identified as the big levers, you know, to really accelerate this and make this the product we all believe it could be, is field force expansion, amplifying up our digital strategy and our marketing initiatives, and expanding market access in the distribution side. And as we'll go through this here, know, Beatrice certainly checks, you know, a lot of the the boxes here potentially for us. So this is a slide to try to depict it in a little bit more granularity of where we are today at SHIELD, what the SHIELD and Viatris organization could look like collectively overall, and some potential benefits that can come as a result of this overall that we go forward. This is really important to spend a few minutes here. So SHIELD today, as noted, we're a 30 person contract sales organization, 3,500 physicians out there in the field.

19:44 And with that comes, a, a lot of uncovered areas here in The US, right, or white spaces it's referred to. So we have a lot of areas that are not being covered. And secondly, their territories are huge. Right? These are big geographic areas. You got reps driving four or five hours across their territory to try to see their physicians overall. So on a SHIELD and Viatris perspective, as noted, we're now bringing a 100 representatives overall, you know, 50 from the SHIELD organization, 50 from the Viatris organization. One important note here, we use SHIELD. We're gonna hire this now as a SHIELD field force. Right? So we're moving away from the contract sales model. Early last year in January, I hired a new VP of sales, three new regional sales directors. We hired them at SHIELD versus the contract model that was here when I got here. That has paid immense benefits. So to bring the field force into SHIELD and SHIELD employees who will be, you know, equity holders, align completely on the strategy. Again, one of those intangibles, but it pays off, importantly here as well. So, you know, both of us will have, you know, our own sales forces out there.

20:48 Importantly, that 100 person sales force now, we have the capability to call in over 12,000 targeted healthcare professionals in The U. S, which is great. But also importantly, number one, there's much less uncovered area in The U. S, right? So we're going to be able to reach more doctors. But really, really important for this particular product, the geographies get much, much, much smaller, right? So the benefit here, this is a exponential benefit versus kind of a scaling benefit,

21:16 if you will. And what I mean by that is, I noted earlier, this is a very, very promotionally sensitive product, right? So the more physicians you can reach and the more often or more frequently you can get in front of them, particularly with that field force, that pays off immensely overall, right? This is a a reach and frequency model if there ever was because of the promotion sensitivity. So the ability for our reps now able to get out there in front of more physicians, but to see them on a much more frequent basis, we fully believe that will have a very, very important impact on the acceleration in the launch as well. Going down the list here, you know, we have the capabilities internally, meaning the people to deploy the right marketing strategy, especially on the digital marketing side and the direct to patient side, but we've been very limited on the resources that we can actually tap into overall. You know, Viatris, they're very that's one of their core strengths is on the marketing side, very strong digital marketing capabilities, very strong direct to patient capabilities.

22:13 They support very large billion dollar brands exclusively on a non personal way, meaning no salespeople go in there, all through digital marketing direct to patient. So collectively, we're going to look at and say, okay, they have the resources available, then sorry, how do we deploy those resources? So I don't want to skip the expectation that next month, you're to see an accurate ad on TV. That's not what we're doing. We're both going be very mindful of where we deploy the capital, how do we deploy it, how do we scale this overall. But importantly, we don't necessarily have to build all that same capability here at SHIELD. We can kind of leverage that collectively across the board. So that is a very important impact for us, not just to support the current 100 person field sales team when they can't get in front of the doctors, but also expand much beyond the 12,000 that are out there as well. So very excited that we've been,

23:00 you know, SHIELD, probably a little overly reliant on the ability of our reps to drive this awareness and haven't done a ton on the marketing side to support them, but that's certainly going to change. Equally important, his presence at congresses and medical meetings. Again, we've had very limited presence there as a SHIELD organization, but we've already got a first commercial booth scheduled here at the largest women's health care conference here in The US, which is ACOG, that's taking place in May 2023. And we expand to between, you know, ourselves and our partner, you'll figure out how we have attendance at those congresses overall. But I noted earlier, women's health is just a very big area for us, right for additional growth there. So again, expanded presence at some of the medical congresses, you know, has, you know, obvious benefits as well.

23:47 And then last but not least, on the payer side, we talked about the importance of, you know, payer access and how that can really drive, you know, overall prescription growth and net revenues. We, SHIELD, we have a small, you know, contract sale contract market access team that we deployed. I'd say they did a good job. Right? They get some initial contracts established. They have a 100,000,000 covered lives overall. But I think between collectively us and Beatrice, again, this is one of their core areas. They have a number of different people out there in the field talking to payers every day, you know, talking to the Medicaid organization. So I think collectively between the two organizations, we're gonna figure out the right way that, hey. How do we expand access importantly so that when a prescription is written, a patient get on the medicine, and that brings net revenues to us as well. So it's a nice opportunity there. And somewhere on the distribution side, right? Just they have extensive networks and relationships here as well. We're So going to explore different ways. And if there's an opportunity that can benefit us to SHIELD and ultimately benefit our patients, we will certainly look to go ahead and do that as well.

24:49 Let me try this at this point over to Hans Peter. Rudolf, Hans Peter, if you want to walk through maybe a little bit of, like, a, how we plan to scale, and importantly, you know, how how all this kinda starts to translates into, you know, estimated market shares, what we can do from a revenue side. Yes. Thank you, Greg. Yeah. First of all, let's let's talk about market share. I think this is one of the key drivers, obviously, for us to reach the potential for for Acrefor adoption going forward. On the right hand side of this slide, you do have our estimated market shares for the next three years starting with fiscal twenty three and going all the way to fiscal twenty five. Market share, just for information, the way it's, you know, calculated here is the number of prescriptions we plan to sell for each of the forthcoming years divided by the total oral iron market, which which we said was $13,400,000 13,400,000 prescriptions in 2021.

25:43 Important to understand when you look at fiscal twenty three numbers specifically, obviously, we're not gonna be starting with this commercial partnership and they have a 100 person sales teams out in the field on January 1. So there's gonna be a certain ramp up here, which is built into the market share estimate for fiscal twenty three. And to that, to explain that a little bit more, you may wanna turn to the left side of the slide. Obviously, both teams have a current Salesforce that they're going through and introduce right now, making sure they're also the right the right people to continue to drive and sell, Acrofor in the marketplace, and the sales team will be coming on board, effective January. In parallel to that, there's gonna be a lot of recruitment going on. So everybody in both sides is gonna have to recruit additional salespeople to get to the targeted 50 reps or a 100 on a combined basis.

26:31 And then there's gonna be onboarding training, recruitment for all these people, which is all gonna happen on a staggered basis. But all in all, we look to have fully ramped up to a 100 person sales team sometime toward the end of April twenty twenty three, and that's built into the model here at the market share expectation that you have on the right hand side. It's also important to understand when you look at market shares, number two, that, you know, how achievable are these market shares, these these underlying prescription sales that we have modeled here. And if you look at our q four estimates that we have laid out there, we're looking to to to sell probably somewhere in the range of of nine to 10,000 prescriptions in q four of twenty of twenty two.

27:13 And currently, we even though we have a 30 person contracted Salesforce, we're a little below that number. We've obviously stopped to to backfill some of the the levers here along the way. So we're currently probably averaging around 22 for q four, '22 reps. If you look at that number of estimated prescriptions for q four and then look at the 22 reps, that gives you an average prescription volume of 450 per yeah. 450 prescriptions per rep. You multiply that for a full year, you get to 1,800. And assuming you would have a full 100 person sales team, you get to eight a 180,000 per year, 180,000 prescriptions. So if you look at these market shares here, just where does the 180,000 match in comparison to that, the the number behind the 1.1 market share is probably somewhere in the range of 140 to 150,000 prescriptions, taking into account the ramp up that they just explained before.

28:12 But then in fiscal twenty five, we're looking at the range of 550 to 600,000 prescriptions. That's a multiplier of probably three, three point two of the current average performance by by rep. We feel within a two, three year time period that we're looking at and some of the benefits that we hope to get a partnership with our commercial partner here, we certainly believe those are very achievable numbers. And, obviously, last but not least, you also should be considering the growth rates that we've already achieved, not alone in the past. So whereas we don't expect the same growth rate going forward, and certainly, we believe a multiplier of three, three point two is very achievable, within the next few years. Next slide, please. Little bit more background to the underlying model and assumptions here. As I just alluded to, we're looking to achieve between five hundred fifty and six hundred thousand prescriptions during fiscal twenty twenty five with the full complement of a 100 person sales team.

29:12 That would net a a US net product revenue of about $150,000, just above that. And it's important to understand that from an accounting reporting perspective, we're looking at a principal agent model. What that means that SHIELD, as the asset owner on a continued basis, will take credit for the full 100% of the net product revenue, meaning we will record all of the net product revenue achieved by the full 100 person sales team.

29:41 We then pay the net revenue share to our commercial partner out of cost of sales, which effectively is gonna reduce our gross profit margin going forward to 50% approximately. But keep in mind, as we have already reported in previous events like this, this is a high profitability margin product, meaning that without a a commercial partnership, the gross profit margin would be 90%, which is substantially higher percentage basis. But keep in mind, with the ramp up the additional ramp up in in in prescription sales and revenue on on a net basis in terms of numbers, the gross profit due to SHIELD is still going to be bigger. Last but not least, also a point in terms of annual expenses and debt service, particularly debt service.

30:29 What is what I'll point out here is specifically the $10,000,000 extension to the existing shareholder loan that we have from our partner, AOP, is gonna be interest free all of fiscal twenty three. So that's a substantial benefit to us, it's and certainly gonna help us to preserve cash going forward. Next slide. And perhaps back to Greg.

30:53 Sure. So thank you, Hans here, for walking through that as well. And, so we've we've emphasized the opportunity here with AquaVerb, right? Like we've been very clear from the beginning about what this large market can be, this real unmet need that exists out there, our FDA approved product, AquaVerb provides a really elegant solution here to a significant issue for these patients. You've got not just experienced team here on the SHIELD side that can really execute on this, and we've been doing a very nice job of that. But I think now you layer on top of that this collaborative sales agreement that we just signed with Beatrice and the motivation and the expertise they can bring to help us along this journey. This obviously ties directly into the significant revenue potential in a market there. It's just looking for an optimal product here in Aquifer and the work that we have that. And as a reminder, our IP runs all the way through 2035.

31:43 So we are very, very excited. I can tell you, as noted earlier, that the commercial teams have been working kind of behind the scenes ahead of the announcement here on this deal to get ourselves ready. And what stands out is, I think, we know the capabilities on our team and the motivation, and I think we see a very, very similar capability and motivation on our partner side. We couldn't be more pleased with the work that we've done thus far. And the more opportunity we have to work together on a consistent basis, I think we're more and more impressed with the team there, the people there, but also their vision of what this product can be. And both teams are excited, as noted in the very beginning, to get as many patients on this medicine as possible, right? At the end of the day, it's about the patients, what they need overall, and that is our collective mission. And we're

32:33 excited to take advantage of that opportunity. So I think for SHIELD, as we exit 'twenty two with a really great partner onboard as well as fresh new capital to deploy as well. We feel I think there are many of us here that we are in a very, very good position overall. There's been a lot of work to get us to this point for sure. And that continued work to drive awareness of the market, get this product out there as much as possible. I think we're in a very, very good spot there and really looking forward to see how things progress in 'twenty three and beyond as well. So let's stop there, and I think we'll start trying to field some of the the questions that come through here. So bear with us as we kind of cycle through these as well. Greg yep. Greg, Jose, Hans Peter, thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions just by using the Q and A tab, which is situated on the top right hand corner of your screen. But just while the company take a few moments to review those questions submitted today, I'd like to remind you that recording of this presentation along with a copy of the slides and the published q and a can

33:34 be accessed via investor dashboard. As you can see, we received a large number of questions throughout today's presentation. But if I could just ask you to read out those questions and give response to it appropriate to do so, I'll pick up from you at the end. That would be great. It's one question and thank you for submitting a lot of questions. We've got there's a lot of questions, which is really great. So just to set expectations, there's no way we're going to get through all these, I really appreciate everybody taking the initiative to get that as well. One question came in, in terms of the equity raise, in terms of director and management participation. Yes. So great question there. And I can assure you that you had extensive participation. Like five of our six directors came into the or probably four out of five of our directors. They had extensive participation on the management team as well. So rest assured that both the board as well as the management team were all in, right, in terms of where we stand and where we believe in this, and we put our money behind that as well. So we're excited to participate.

34:40 There's a couple questions in here just around, you know, overall, how things run-in terms of between us and our commercial partner, you know, who has, you know, ultimate responsibility versus not and how territories get deployed, etcetera. Just let me try to give a little bit of color and context of how we've set this agreement up. So we're going to run this business together. I think the best way to do it. And through our discussions overall, we share a very common view of the overall market. Like other agreements that you may have, you'll have a joint steering committee made up of people from the SHIELD organization as well as the Beatrice organization. And collectively, we're going to align on overall forecasts, budgets on a yearly basis so that every team everybody is accountable for the same goal.

35:26 Right? We know what our goal is on the revenue side. We know what the spend allocates is. And then on a regular basis, we're gonna monitor the key performance indicators as you would if we're running the business by ourselves. Right? And we're gonna make sure that we hold each other accountable in terms of how we're doing towards those KPIs, how our revenue is projecting here, how our cost structure looks like overall. And just like any other business, the ability to we see something that's really working well and we can add more cost to that and take away from somewhere else, we'll deploy the cost appropriately. They'll save for things aren't going well, that's okay. What do we need to do to rejigger here? And if we need to adjust the cost structure based on what we see, we'll do that as well. So it's very much the way that the business overall will get run across the board. We have 100 independent sales territories out in the field.

36:16 Right? So 50 of them will be occupied by SHIELD employees, 50 of them will be occupied by, you know, Beatrice employees. But collectively, we're gonna have the same strategy, same action, actions, same KPIs that we're focused on. So as much as possible without running into, you know, any, you know,

36:33 legal issues, etcetera, we wanna approach this as almost one collective 100 person team. What's really important here to understand as well is that 100% of the time and attention is to aquifer. Right? So for SHIELD employees, there is another product in the bag. For the VHS employees currently, there is another product in the bag either. So 100% of that 100 person sales team's focus is on Acrefer. Okay? So that's a very, very important piece for us overall. So I think structurally, we feel really, really good about the team we're working with, the alignment overall, and how we're operate the business on a go forward basis as well. Let's see. And Hans Peter, as you scroll through these while I'm talking, if there's another one that you have here you wanna jump in on, feel free.

37:20 Yeah. That was actually one related to to payer coverage and and specifically on whether we're still confident to get to an eventual 50% payer coverage and whether the the sort of, like, the lack of new payer coverage over the last few months is an indication that maybe there is resistance to the price point. And maybe just a word to that on how payer coverage works in The US, and then maybe I can answer that question, hopefully, so that satisfactorily. Sure. But in The US, the payer market is pretty the commercial payer market is pretty much driven by four large PBMs, and we've sick successfully negotiated discounts with three of the four already. And when I say negotiated discounts, that's how the process works. You basically approach them and need to negotiate a proper discount off your list price with them. Ideally, you have a certain dis you know, discount in mind. You sometimes get that and sometimes you don't. In one particular instance, we didn't quite get what we were hoping for. And whereas we could probably get payer coverage with that fourth large PBM tomorrow, it it would not be at a satisfactory price. And so it's it's all a matter of of getting penetration in the market, getting the demands generated, and then revisit that that commercial payer again to see if potentially you could do better the next time around.

38:35 So it's a matter of time. And if you do see a certain time lags of of when payer coverage has not significantly changed, then that's not a result of of a resistance to the price point per se. It's more a matter of of of getting the awareness to help yourself in the negotiation process. So we're still very confident that down the road, we do get to a much improved payer coverage, and we certainly hope to increase the 40% of the total patient market that we have currently in terms of insured market. Yes. Just to echo that comment there, so much of that is you need to generate demand, right? You generate demand, you get yourself in a better position to have a reasonable discussion with payers, I think Hans Peter alluded to. I mean, first off, the payers overall, right, there are some requests, if you want to call it that, of certain rebate levels that we're just not going to do, right?

39:25 We're to run a business. We're to make sure we do it in a sequential manner, and this is just exactly the way that it works in The US. You got to be patient, you got to be smart, you got to be strategic of how you deploy that. And again, this is a real strength that our new commercial partner can help bring to the table here, both in terms of just extensive relationships. A lot of this is knowing who we get in front of and when and how to do it overall. I think collectively, we feel really confident that there's a nice opportunity. Now we have not factored really a lot of expanded market access or coverage into our 23 projections at all. I think collectively between the two of us, we feel very good about the opportunity to expand that coverage overall. So question in the mix here just for on this topic around some of the IV irons and some of them go in generic and will that have an impact on pricing and things like that? It really won't. Right?

40:16 So on the IV iron side, it's a different patient population, right, to be clear. Right? The patient population for IV iron is more the acute patient. You're get iron stores up really, really rapidly. For example, if someone's got surgery here in three weeks and they get a hemoglobin of 8.5, you're not going to go on that, right? That's on an acrome patient. They're going to go on IV iron and get that iron stores up very, very quickly here as well. So on payer side and the cost side for IV iron, there's like six or seven IV irons all fighting out for market share there overall, right? So that's a pretty competitively intense market, right? A lot of innovation there. They're going to fight those out. The payers are going to play one of those off against each other. On the oral market iron market side, if you kind of pivot, preferably to the left, the patient population is much, much bigger. They're classically not IV iron patients.

41:09 Now, if somebody eventually doesn't get the treatment they need, they'll they'll know, their hemoglobin will decrease eventually, they'll get on IV iron. But we're not sitting there from the payer side of, you know, worried about this. The last thing they wanna do is send every patient to go get IV iron. That is super expensive. It's not that's the cost of the iron. It's an infusion suite. It's you're going to an infusion center, whether it be in a hematology clinic or hospital based infusion center. So they don't want patients to be going in there, particularly in this environment right now. And patients don't wanna be going in there either. Right? No one wants to take time at work and get multiple infusions to go into a hematology clinic where you got really sick and severe patients overall to get their dose of IV iron. So we believe we've got a really elegant solution here. We're fully contracting where right now patients can try and fail on OTC iron before they get access to Aquifer. We're very confident in that ability there. So from a IV iron side and products going generic on that side, is a high level concern here. We're not we're focused on what we need to execute. We think there's a big market there as well.

42:15 Yeah. Maybe a couple other questions here. According to what the additional $10,000,000 convertible loan from our shareholder, AOP, and I can probably get write some additional explanations here just to put some clarity about this arrangement. First of all, it's not a new loan facility. It's actually an amendment to the previously existing loan facility that we agreed with AOP back in August of this year. You may recall we AOP actually provided us a convertible shareholder loan for $10,000,000. $2,800,000 of that was immediately converted to shares, leaving us a balance of 7,200,000 of convertible debt on the balance sheet. AOP aggressively agreed to to extend and amend that that convertible shareholder loan and then increased the balance to buy another $10,000,000.

43:04 In addition to that, we made some changes made some changes to the existing terms. Very important, as I already alluded to before, the 10,000,000 of new funds is going to be interest free for all of 2023. But equally important for us is the repayment term has been extended from originally at the end of December twenty twenty three to the end of December twenty twenty six. So a three year extension, which is gonna help us tremendously, obviously, as we go and and and achieve cash flow positive, obviously, over the next eighteen months or so. So we feel that this is is obviously a very fair type of terms that we received here. We've looked at other loan opportunities as well in parallel compared to with other loan offers, and we felt these these are more than fair terms. We're tremendously great to to AOP to continue supporting SHIELD in many different ways. And and quite frankly, obviously, we would have not been able to get that kind of funding and secured that we did now without the help of of these important shareholders of us.

44:08 Good. Alright. I'm gonna paraphrase a question that came in here well around you know, we talked about the the market and the opportunity and, you know, the the unrest with the physicians and patients about the product overall. There's a, you know, question and paraphrasing here, of course, that, you know, jeez, why why can't the product just sell itself? Right? It just feels like you got a great product. You know, this you know, why did spend capital and deploy resources here? Can't the product just sell itself? And I'm gonna kinda flip that on its head. It's a it's a it's a it's a bit of a question here where in the pharmaceutical world, there is no such thing as a product that sells itself. Right? You could have the greatest product in the world, but nobody knows about it, then it ain't gonna sell. Right? And in very simple terms, that's what needs to happen. Right? If remember, we launched in The US, not one physician and not one patient in The US knew about Afrefer. Nobody. Right? So you have the best product in the world, best you know, it doesn't matter what industry you're in. If they don't know about it, they're not gonna use it. Right? So that's in a very simplistic term.

45:16 It takes resources to drive awareness. Like, it just doesn't happen overnight. You need to get in front of physicians, you need to make them aware of the product. You can do that through personal promotion, nonpersonal promotions we talked about for the the marketing side, but you need to establish like anything else, they're in the habit of writing product x for a number of years. You gotta break that out. Right? So collectively now, like, we've done a really nice job at SHIELD in terms of taking that awareness level from zero to where it is today. You can see that as people become aware, they will write prescriptions. But, man, like, we're still scratching the surface. By no way, shape, or form are the majority of physicians even aware of back of that point. Physicians we've been calling on are getting awareness, but there's a whole bunch more out there. So I mean, collectively between now a 100 person sales force that dramatically expands the number of physicians that we can touch with a field team, plus now you layer on the marketing capabilities between us and our new partner on the digital side, opportunities to direct to patient, attendance at medical conferences, that's the beauty. This is how it all kind of fits together. And there is a cascade effect, right? Once you get awareness and start driving that, you will start to get a better word-of-mouth, but you're at such a small point right now, you got to kind of get that flame really kind of generated up there. And believe me, we are looking collectively at physician focuses first to make sure that they understand what the product is. But there's a nice opportunity, we believe, in the

46:46 direct to patient side as well, maybe particularly in like the women's health segment overall. But again, that's something that we're going lay around at the appropriate time here. You know, fortunately or unfortunately, this is the world of pharmaceutical selling in The US, especially in a market like this. You gotta put up in upfront investment to kinda get that payoff on the back end. We feel really, really good about the opportunity here, particularly with what we've seen over the course of the eighteen months with our team and the limited resources, we feel really like that opportunity sitting right there. Yeah. I've also seen a couple questions, you know, asking and one else to reaffirm that we have sufficient cash to get us to cash flow positive. And I'd like to answer this question as follows. Obviously, we do have estimates, company estimates, which we looked at very carefully, and they're all based on current understanding and and what we believe is is the the most likely course of action going forward.

47:38 But the only thing that we really know for sure is that the actuals will be different than estimates. That's just by default. That's how it's going to be. We believe that our estimates are quite conservative, and we believe, in fact, that with the money that we were able to secure now through these different sources, the upfront from the commercial agreement here, the the the shareholder loan and the equity raise plus the open offer, which is still forthcoming, we believe that we have sufficient cash to get us to cash flow positive. That's again under the caveat, obviously, that nothing unforeseen is going to happen going forward and that we can execute as planned. But right now, that's our best estimate, and we firmly believe that it is quite possible. One last question here as we're ready to wrap up. There's a question here just in terms of, like, the ramp up and the scaling and things like that. Let me just take a minute to to reemphasize that. I think Hans Peter covered it about that. Just make sure it's explicitly clear. So know, we signed this agreement overall. Right? We, SHIELD, we have 22 contract reps that work for IQVIA right now. We're already in the process of interviewing those 22, right, to see who we wanna bring on board as our own field force in SHIELD. And bear in mind here, you know, we're very happy with a lot of their performance. But number one, we wanna make sure that we get the right talent into the organization here, and we want a level talent. Right? This is a great opportunity.

49:03 This will not be a challenge to necessarily recruit because particularly on the backing of a nice partnership with this, an FDA approved product, there's already, you know, certain things established. So we've derisked this in a number of different ways, particularly if you're a rep in the field looking at, hey, what's a fast growing organization and where can I, you know, come in and make an impact? So we want the best talent in the industry right now in terms of our frontline managers and our reps. So we're gonna interview our contract team. We'll decide quickly here who we wanna bring on board. We'll have offers up to them before the end of the year. And, you know, not to speak for, you know, the partnership on the major side, but they're doing a similar type of of of work there as well, you know, with their existing team to determine, alright, you know, who's the the best team to kinda bring forward. So we'll have a certain level of representatives collectively out in the field, you know, starting in January. We're gonna train the the V interest team in the January time frame. And then onboarding and recruiting is key for the first quarter. Right? So you've already got the recruiter identified. They're going to start reaching out to prospective candidates, literally they already have. We got the territories mapped out. So as we go through the first quarter, it's a heavy recruiting, onboarding, training, right, to get to that point where by the end of April, we expect that we'll be at that 100 person sales force collectively out in the field and start a call position. So obviously, as we go through the first quarter here, a lot of work that's going to get done. I think we both feel very good about the possibility to attract the right level of talent here. Again, in our industry, there's

50:33 been a lot of challenges over the course of last year, right? So we've got a great product, a great market, it's FDA approved, it's already a payer coverage. There's a lot of boxes checked that we can really take on fourth year and accelerate. So I think that's important just to think through as we sequence this, that will have the 100 person team out there. They'll really call it in the the May time frame is when they'll actually be at that full force ready to go. So, again, we're very, very excited about that opportunity. And with that, I just have this vision of the 100 team out there calling on these 12,000 positions and just very, very excited and opportunistic about where we expect it to go. Greg, Jose, Hans, Peter. I think you've addressed those questions you can from investors.

51:18 And, of course, the company will review all the questions submitted today, and we'll publish those responses on the Investors Company platform. But just before redirecting investors to provide you with their feedback, which I know is particularly important to the company, Greg, could I just ask you for a few closing comments? Yes. And thank you. I appreciate everybody's time and questions. We'll try to get back to it with many answers as we possibly can as well. But look, a big couple of days here for us. Right? So as noted, we've been working really hard. We've established a really good foundation. We're super, super excited to work with a new commercial partner, Beatrice, and just excited about what that future can bring, especially for patients out there suffering from iron deficiency anemia. But the ability to drive dramatically increased awareness behind this expanded commercial resources is absolutely critical for our success.

52:04 Equally excited in a very, very challenging market conditions right now. I don't need to speak to everybody about just how hard on a macro level the pharma and biotech industry has been hit this year in terms of price and valuations, etcetera, but very, very excited that we've got the support of our existing shareholders, particularly AOP, as well as the ability to attract new investors into the story here, which are really good and thankful about the capital we've raised to really go out to this market opportunity. And I think, you know, we are very, very optimistic about where we're gonna go here in 2023, '24, and beyond. So thank you everybody for taking your time and for the questions submitted, and I look forward to keeping you updated along the way. Greg, Jose, my hands, Peter. Thank you very much for updating investors today. Could I please ask investors not to close the session as you'll now be automatically redirected to provide your foot feedback in order that the management team can better understand your views and expectations?

52:58 This will only take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of SHIELD THERAPEUTICS PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.