Shield Therapeutics (LSE:STX) — Final results for the year ended 31 December 2022

0:00 Good afternoon, and welcome to the SHIELD THERAPEUTICS PLC final results 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 hand 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 in the meeting itself. However, the company will review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to submit the following poll. And I'd now like to hand you over to Craig Madison, CEO. Good afternoon, sir.

0:35 Great. And thank you everybody for joining us today. We're very happy to discuss our 2022 financial results and first quarter two thousand and twenty three update. Joining me in the call today is my chief financial officer, Hans Peter Rudolph, and we will be going through our presentation, and then we'll be responding to some questions that are submitted on the platform here at the end of the discussion. So let's kinda pop right into it, if you will. We will be making forward looking statements, so please go back and review all of our financials and disclosures carefully as we go through the presentation. So, look, we are really, really happy with where we're at as of right now. There's been a lot of work that's had to been done here, particularly in the first, you know, several months of 2023, and we're very pleased to kinda provide you with some updates here and some context to where things stand right now.

1:26 But, obviously, as we kinda close the final chapter in 2022, we'll get to that in just a minute, and then shift our attention here to 2023. Some quick highlights that we're able to achieve, you know, nice rapid growth in prescriptions last year, achieving over 25,000 prescriptions of Acrefer here in The US, which is up 12 fold year over year. Then we started the year in '23 with a strong 12% sequential increase in growth off of that q four platform. Very impressive, particularly when you think about some of the behind the scenes things going on here as we kind of expand our commercial operation and look to hire a whole bunch of people, which we've done a really nice job of. Speaking of that

2:08 of that process here, we signed the VHS agreement as a collaborative sales agreement at the end of December last year. We have made tremendous progress with that partnership overall. I'm gonna be happy to talk about our goal that we had of getting to a 100 people out there in the field by early May, and we're very much on track to achieve that goal. And, obviously, the end of last year, we raised funds to support our operations to cash flow part breakeven by the year end 2024. And down below, you see some of the milestones that we have line of sight that we are setting our eyes on for the next couple of years. So before we get into a lot of the forward looking kinda 2023 performance, you know, as noted earlier, I think this is our opportunity to kinda put final closure for 2022, with our updates we provided today. With that, Hans Peter, let me turn it over to you for the next couple of slides to, walk everybody through, what we announced today related to 2022.

3:06 Yes. Thank you, Greg, and good afternoon, everyone. In terms of financial highlights, I'd like to focus on on three areas. First and foremost, revenues reported £4,500,000, about $5,400,000 in total revenues for 2022. That is comprised of net product revenue from Aquifer sales of £2,900,000, royalty revenue from product sales in Europe by our partner, Nordgene, of 1,400,000, an upfront payment of £200,000 from CHI Pharmaceuticals on the signing of the license agreement, with this partner in Canada in the early part of twenty twenty two. Important that in this number, we have not included total revenue from the upfront payment received from Viatris upon execution of the co promote arrangement.

3:57 That payment of £4,200,000 was received in December. However, unlike normal traditional license agreements, we we needed to record that differently, and we effectively needed to align the recognition of that in line with the spends that we have to undertake to to to to prepare the commercial operations for the co promo partnership, which means in the 2022 income statement, you'll find £700,000 in other income, which is a portion a small portion of that upfront. The balance of £3,500,000 will be recognized in 2023, when we actually will expense the related costs.

4:39 Operating loss before impairment and research and development expenditures amounted to 24,600,000. That is roughly £5,000,000 more than in the last year. That increase is primarily attributable to additional selling costs in The US as we now had a full year of US commercial operations in '21 in comparison. As you recall, we only launched a product effective July, and as a result, we had only had a half year of of effective selling activities. Cash and cash equivalents amounted to £2,800,000 at 12/31/2022. However, that amount does not not yet include the net proceeds from the equity fundraise, which we collected in the very early part of January that amounted to £16,200,000 as well as the drawdown on the second tranche after the amendment of the shareholder loan, the convertible shareholder loan, which added another £8,200,000 and was also added in January '23.

5:38 At the end of March, 03/31/2023, we had cash on hand of just under £20,000,000. Greg?

5:53 Yes. And then then here, a recap. I think this is important that, we could show you all that what we have we effectively done and completed in terms of funding transactions over the last six to eight months. It's been four separate transactions that have contributed to the cash balance that we have on hand right now. And in August, very early August of twenty two, we executed the initial tranche of the convertible shareholder loan with AOP Health International Management that yielded net proceeds of £8,000,000. Then in in December, as previously mentioned, we collected the upfront payment from the Viatris co promote partnership of £4,200,000. And then in January, we follow through with the net proceeds from the equity placing an open offer as well as the amendments, the second tranche of the convertible shareholder loan of 16.2 and £8,200,000 respectively.

6:46 In total, over a six months period, we were able to raise additional funds in a very, very difficult environment of £36,600,000 or nearly 45,000,000 US dollars. That results in the cash on hand balance that I just introduced before, just under £20,000,000. And perhaps importantly as well, after a couple of conversions of partial conversions of the shareholder loan by AOP, we have a debt balance of £12,400,000 as of the end of March. That's $15,000,000. And we only pay interest on about one third of that for '23. As you may recall from the announcement that we made at the time when we signed the amendment to the the loan loan agreement, the second tranche of 10,000,000 is, got an interest holiday for all of 2023.

7:33 Thank you. John, it's Peter. Great. So let's go into, what we, are excited about here. And I think, honestly, as we think about where we are not only ending 2022, but as we enter 2023, I think ourselves and our new partner, Vutris, we we share the same viewpoint of where we can take this product overall, and that's one of the reasons both companies have come together. So we talked about this, you know, large defined market, what we believe that we have in an FDA approved potential best in class solution. You will see over and over again this unmet need is real out there. We've got the commercial partnership agreement that we'll talk about in detail. In addition, we've, made some nice additions to our team here, as a senior leadership team, but we've got a very, very experienced team here that knows how to launch brands and build drugs, and we got a strong reimbursement base on which to be able to build here, as well.

8:25 One of the things that we share the common view at is this market being very, very ripe for what we call innovative disruption. So you got this very large market of 20,000,000 patients out there suffering from anemia. We've got 13,000,000 prescriptions written every single year for OTC iron, creating a market opportunity of $2,300,000,000. We know where these prescriptions are written. 80% are written by women's health and general practitioners, which is exactly where we've kind of concentrated our our selling efforts. And we've got this incredibly unsatisfied market driven by GI related adverse events and minimal minimal efficacy. So over and over and over again, you will hear from physicians and patients alike that this tolerability, this GI related adverse events comes front and center when they're treated with these OTC irons.

9:12 And the challenge here is that there's been little to no innovation in the oral iron therapies in the past decade. So what this creates is a bit of a dormant market. Right? This market has been operating the same way for the past five to ten years, meaning that physicians see a patient with iron deficiency with or without anemia. They write in OTCI as their first prescription. They don't expect it's going to work, but they'll hope that will work and be effective and be tolerated. But generally speaking, patients are going to cycle over and over again back to these therapies, and we need to wake this market up. This is a very, very dormant market. We believe we have a best in class type of solution. But if they don't know about it, they can't change their behavior, and that's collectively the work that all of us are out there trying to do. Importantly, from a a a basic standpoint, iron deficiency, it is actively treated by physicians. There is no question. This is not an issue where we need to educate them on the need to treat. It is very well established that iron deficiency and iron deficiencymia is a source of morbidity and mortality. So when physicians see these patients, they do actively treat. On the right hand side, the challenge that noted is you just get into this unsatisfactory cycle of switches and discontinuations from the patient perspective.

10:29 It frustrates patients, and it frustrates physicians to be perfectly candid out there as well. We've developed our product to deliver both effectiveness and tolerability, right? We get a proprietary formulation with our Moltol complex as compared to traditional oral lines, which mostly these ferrous based irons overall. What this allows us to do, as you see on the right hand side, this Moltol complex basically acts like a shield. So it enables the iron to pass through the stomach, get down to the duodenum where the iron is absorbed. We use a very low dose of iron because it's delivered directly to the site where the body is gonna absorb that iron. That contrast significantly what you see with ferrous based irons, which dissociate as soon as it hits the stomach. That free iron that's now circulating the gut leads to a lot of those discontinuation rates and a lot of those GI related adverse events. So, you know, our molecule that we designed was very, very specific here. And when we get a chance to talk to physicians about this particular aspect of what their experience is like with traditional irons, you know, what our product is like, what our MOA is like, how we designed it to be different, and then backing up with our clinical trials as shown here, you know, the reaction is quite positive. But the the the challenge is we gotta get out there to more physicians, which, again, is what we're gonna talk about just a minute. But our product is very elegant, very simple overall in order to how we designed it. But the results of the trials, there were three phase three trials that showed across the board significant increases in hemoglobin to treat the iron deficiency,

11:59 but doing in a way that's well tolerated with a less than five percent adverse reaction and discontinuation rate. So for us at SHIELD, we've got a great leadership team here and a great commercial team that has highly, highly experienced. I would draw attention to Andy Hurley, who's in the middle of that box here as well. We just hired Andy as our chief commercial officer. We announced that just a couple of weeks ago. He is off to a very, very good start. Andy stands out here. He has extensive commercialization experience across a number of different roles throughout his career as he's built up his experience both from a leadership perspective, but understands how to execute and drive drug launches. He is off to an excellent start. He's already done his first day in the field with one of our reps. He's down in Pittsburgh this week with the rest of the training class, get to know them as well, and I think he's gonna be a great addition to our team here as well.

12:49 So let's kinda move forward into '23 and talk about our our partnership mission, you know, between us and Beatrice. And, obviously, I think our our universal goal here is to make ACRA for the oral line of choice in The US market, and we have the opportunity to do that. As a reminder on some of the details of that agreement that we signed at the end of December last year, there was an upfront payment of $5,000,000 on signing. The start date of this agreement was just a short four months ago. So January 1 was the official start of this this overall agreement. This is a revenue and cost sharing model. We share net revenues and marketing costs with SHIELD taking a slightly higher share. Collectively, the biggest focus here is building up that 100 person Salesforce. We'll talk about that in some detail. Each company pays for its own Salesforce related selling costs, then we have, certainly sales milestones that are out there, as well.

13:41 One of the things that attracted us to Beatrice in addition to our universal view of the market and the potential here is just the commercial depth and breadth that they think that they bring to the table that can we believe can help accelerate Acrefer and drive us to what we believe this can get to across the board. So they've got a well established commercial infrastructure and relationships. They are, just like us, hiring a dedicated 50 person sales team that's promoting only Acrefer. They bring to the table best in class digital marketing as well as direct to patient capabilities. You're already gonna see that the marketing teams, while I've been focused on expanding the field force right now, the marketing teams have already off and running. We're launching a brand new, brand campaign here next month. So those teams have already been working very hard and have, produced some really, really nice things that we've been able to talk about. Then last but certainly not least is they've got a very large experienced market access team with extensive relationships.

14:35 We think there's significant opportunity here, especially in the back half of this year as we continue to drive that forward. So one of the things that we have been communicating throughout last year is how do we drive and accelerate accurate growth. Right? And there are three key areas we're gonna talk about. One is the field force expansion. The second was amplifying up our digital strategy or marketing initiatives, and the third was expanding our market access and distribution. In many ways, our partnership with V interest checks a lot of these boxes, which is why we executed that as well. I'll just give you a little bit more detail on just where we stand right now. So first and foremost, the the field force expansion. Right? So, on the left hand side here, you saw where SHIELD had launched initially with our contract Salesforce and the coverage we had from a geographic perspective.

15:22 This new 100 person combined Salesforce, you'd see on the right hand side, it's very obvious. We get a lot more reach and a lot more efficiency on this. Right? So of the 100 people that we have out there, they're gonna collectively be calling on over 12,000 high prescribing health care professionals. So not only will we be covering a lot more geography and reaching a lot more physicians, the sales team's territories are much, much smaller, which drives that efficiency. Right? One of the things you'll hear me say a lot is this is a very promotionally sensitive product. Right? The more physicians hear about it, the more often they hear about it, the different ways that they hear about it drives that adoption on a faster perspective. So, obviously, we're gonna have a much bigger reach and efficiency and frequency from our expanded field force with their target physicians, which is a huge bonus.

16:11 I'm gonna spend a couple of minutes on this slide because I think this is critically important here. So as we as we kicked off the New Year, the Salesforce expansion, growing the team to 100 collectively, 50 from SHIELD, 50 from Beatrice, that is in many ways as priority a, b, and c. Right? This had to happen, and we wanted to make sure that we had a line of sight. We communicated that our goal collectively was to have all those people out in the field speaking to physicians and trained by May. And I'm pleased to say we are very much on track to achieve that goal. In many ways, this can be incredibly disruptive to a lot of organizations. Right? You know, you think about we're gonna go through where we were in December. We had to basically tear up all those territory maps, all new maps, all new territories.

16:58 Then you gotta get out there and recruit, hire, and train a whole bunch of people in a very, very short period of time. Right? And meanwhile, you gotta keep growing your business. Right? And for us at SHIELD, we don't have we're not a huge team. We're a very lean team overall. So the same people that are out there trying to coach our reps are the same people that have to undertake, you know, this entire operation, and I couldn't be more pleased with where we ended up overall. So let's go through this in a little bit of detail. As a reminder, in the fourth quarter of two thousand and twenty two, for SHIELD, we had an average of 25 contract sales reps out in the field talking to physicians. So the first thing we did is once we announced the deal, we took a look at those 25 contract sales reps. We interviewed each and every one of them. We hired 16 of that 25.

17:46 Right? And those were now DirectShield employees. Right? So we've moved away from the contract sales model. These are now DirectShield employees. So we had 16 reps promoting Aquafer in the field during the month of January. That is the lowest number of reps we had in any month since launch. Right? So we hired the right people there. At the end of January, we then trained the first 14 Viatris reps. Right? So got them trained. They went out in the field February 1. So as we get into the month of February, we now have the 16 SHIELD reps, the 14 Viatris reps. So in essence, 30 reps collectively promoting to their physicians for the month of February and March. April 1, we have the next wave that were trained that came through. That number collectively jumped from 30 to 66 combined.

18:33 And then in May, we have a training class that's going on as we speak. In May, that number will jump from 66 to 98. So still two vacant territories to finish off, but we'll have 98 sales reps out in the field collectively between the two organizations in May. We are both coming together for a national sales meeting, you know, in the first week of May to kinda get that last level of training up and running. By mid May, you will have the 98 out there in the field promoting to their doctors as well. So very, very impressive to have this level of recruitment, hiring, and training to be done in a very short period of time, and, again, with a very lean team that's been doing a lot of work behind the scenes here as well. What I'm also pleased to see is it's one thing to hit the number. You know? So, you know, there's a you know, we could hire, you know, a average person, if you will, to kinda achieve the goal of the number, but we haven't hired what we believe are the average type of people. We've got a very highly credentialed team. So from the SHIELD perspective, as we looked at, we had 34 vacancies.

19:32 We had over 4,000 candidates looking at those vacancies overall. Right? So, you know, from 4,000, we hired 34. What that allowed us to do is be very selective and identify people that not only brought good, strong experience in the pharmaceutical selling model, but also women's health experience, which is an area that, as you've heard me say, we've seen really good uptake right now for ACRA for half of our prescriptions come out of women's health. So on average, those new waves of reps that have come in bring over eight years of average sales experience and four years of average women's health experience, all of which we think can help, continue to accelerate that as well. I will say as the reps come on board here, from an industry, average perspective, it takes on average three to five months for a brand new rep and it didn't matter, you what the disease state, what the territory, three to five months to kinda get up to a productive level across the board. You know, obviously, collectively, we wanna try to accelerate that. We'd rather be on the more of the three month side versus the five month side, overall.

20:32 But on average, that's, you know, how it kinda plays out. So, again, very, very good work both in the SHIELD side, but also with our partners who couldn't be more pleased to have the reps on board as well. So while I noted earlier that, you know, that type of work that we just went through can be incredibly disruptive to an organization.

20:50 Right? Particularly on the, you know, both sides. From the SHIELD side, I know how many people I have on my commercial team, and the same people that are driving the business are the same ones that had to pivot as an organization and focus on that first quarter of getting that expansion done. What we're pleased to see is that despite all that, we had an increase of 12%, prescriptions in the first quarter as compared to that fourth quarter two thousand twenty two. We also saw continuing that that 50% of our business is coming out of the women's health segment, another 43% out of the GPs. And collectively, with that 100 person Salesforce, that's where they're focused. Women's health and general practitioners, that's what their target list is built off of. So where people are calling in the right areas to be able to hit that. So importantly and we won't do this on a regular basis, but I think in this particular circumstance, it warranted diving a little bit deeper into that 12% sequential growth. Right? So if you think about now the overlay of timing of reps coming on board and training and what they kinda look like and then

21:51 starting to think about that from a broader perspective overall, we wanted to highlight kind of month over month growth. And what we started to see here, is in the March time frame, significant upticks in a couple of the key performance indicators that we wanna look at. Right? So for example, you'd see on the arrows here, you know, 21% growth in the month of March on total prescriptions overall. In fact, 38% of the total prescriptions for the first quarter came out of that March time frame overall. A couple other key performance indicators, one of which I think is is probably really important, you know, as we look at the lower right hand box, first time prescribers, you saw a 24% increase in the first quarter. We can look at the sequence here. Right? Down 9% in January, up 41% in February, and then up another 71% in March. Same thing on the new prescription side. Right? So, you know, what we're seeing is as that, you know, kinda newly trained team gets out there and starts getting on the field, we're starting to see little indicators of what this might be able to look like, and it matches exactly what we wanted to see, which is, hey. As we get a larger team out there, drive that awareness, get in front of more physicians, we should be seeing, you know, increases on the, the first time prescribers and other metrics as well.

23:03 So it's early. You know, I would kinda you know, we're not declaring victory by any stretch of imagination, but I think it's a really good sign for what we'll able to see, across the board. We're really proud of the accomplishments across the board and the team. The second piece that kinda layer into that that the team behind the scenes have been hard to work at is the second initiative around amplifying the digital strategy and the marketing initiatives. I will tell you from experience, you know, redoing an entire brand campaign and getting a new collateral out there, etcetera, that is a very big undertaking. The teams jumped in together very, very quickly here, matching the brainpower and the expertise we bring to the SHIELD side, in the Viatra side, in the resources behind each organization to be able to do this. So we've got a brand new brand campaign that's launching next month. The setup here, as we've talked about earlier, is that the unmet needs of these patients are absolutely real. Right? So we've talked about seventy percent of patients reporting GI issues, lot of discontinuation rates. So the real concept here that we kinda crystallize is so the teams crystallize is patients are sick. They're trying to get treatment for the iron deficiency anemia, and in fact, the treatment they're getting to treat this is making them feel worse. Right?

24:13 So this whole new brain campaign is built on the irony of that effect. Right? So interesting that the irony it's a very interesting twist on the word iron here as well. This is edgy. It's designed to kinda wake up and stand out in that dormant marker we talked about. But, look, life is full of irony, and the patients don't need it in their iron. Right? So rather than giving them a product that potentially make them feel worse, we think we got a product in Aquifer that can give both effectiveness but tolerability as well. So we've got a number of different things that the teams have worked on here on disruptive tactics. So from a personal promotion, all the representatives in the field are gonna have brand new materials out there to get in front of their physicians with from the print side, the digital side, etcetera. So that team is getting trained at this, at this time point, at the main national meeting. In addition to that, a bunch of the tactics on the nonpromotional promotional side, brand new patient and HCP websites, marketing automation to help expand that broad reach, targeted media tactics, and then certainly not last but not least is patient and social activation as well. So a very much, you know, common omnichannel type of approach where in addition to that field force expansion, coming right behind them is that air cover, right, in a number of different ways. And we've never had that before, so we're thrilled about the ability of those teams to kinda work together on this. And then, really, the I don't recall the the coup de grace, but the last piece of this as well is that the largest women's health care conference here in The US, the American College of Obstetrics and Gynecology, is taking place in the

25:44 second weekend of May in Baltimore. There's over 4,000 women's health care professionals in attendance there as well, and we're launching this new campaign there as well with a really creative and innovative booth that is gonna have tremendous stopping power and memory on this is a booth you can't visit, the irony behind that. So, again, the goal here is disrupt the current thinking, get that stopping power, have them pause and reflect on what they're doing in the past and how it's really not been working, and get them to introduce to Acrofor as well. So a lot of nice pieces of the puzzle really starting to come in together.

26:16 The last piece that we talked about is really how do we expand our market access and distribution. And, you know, right now, we're standing at that 100,000,000 covered lives. 40 of the total lives that are, eligible to have coverage for Acrefer, we've got that as well. We've spent a lot of time working collaboratively with the Viatris sale, pardon me, the Viatris market access team. Level of engagement is extremely high. We've been doing a lot of data analysis, looking at areas of opportunity. I think this will be getting into the second half of twenty two now that the we can turn our time and attention that the sales team has done, the marketing team has done. This is the next one on the list, and, really, it comes into two different areas. One is how do we take better advantage of the access that we currently have? How do we drive that through, particularly with now the 100 people out there we're gonna have in the field in mid May? The second piece is where areas of opportunity that we do not have coverage? You know, where are PBMs that maybe we don't have access to? Now a lot of that does get driven by volume. Right?

27:14 So these two go hand in hand. Right? You're have your 98 or a 100 sales reps out there in May driving that larger volume. That's gonna create opportunities for us to work on together. So very optimistic of what we're gonna be able to do there as well. And there's certainly this, you know, kind of full, what I call, commercial deployment, if you will, across the board. It's sales. It's marketing. It's access drives its potential for market for aquifer adoption. Right? So you could see our targets here from a market share perspective for the next couple of years across the board. Certainly, reasonable market shares to attain. But, again, we've gotta kinda get out there, wake this market up. I think, you know, the performance that we saw in the early part of q one, you start to think about having the full Salesforce out there, calling their physicians, marketing support behind it, the potential of market access expansion. I think it drives a lot of optimism here, both internally, at us as well as our partners as well.

28:06 We spent a minute on the international, opportunity. All of our partnerships continue to progress. We got four different areas to kinda touch base on here. The one area that we have that is commercial right now is Norgeen in Europe. Then we got three kind of development or, yeah, development stage areas, Kai being the most up to pardon me, the closest for approval, and then Korea and China. On the Nordgene perspective, they increased their sales volume in 2022 by six and a half percent. You know, we're still working with Nordgene. We're certainly not satisfied by any stretch by that level of performance, and we think we can do better. We continue to work with them on focusing their attention to the right, call points in the right markets, right, particularly Germany and The UK. I'd say Germany is doing probably a better job than The UK is at this point in time. We're gonna continue to work with them to drive that because we believe there's a lot more upside here. This is not a product potential opportunity.

29:03 We believe this is an execution pieces that we can, potentially do a little bit better

29:07 here. On the CHI pharmaceutical side, in Canada's noted, they submitted their regulatory package last year. That timeline for potential approval is expected in the middle part of this year. That gives us a small milestone payment. Obviously, on the back end once they launch, you know, tier royalties on net sales. Republic Of Korea is in process right now of enrolling their, PK study. That is the one study that, they need to submit, for regulatory approval. We expect that study should be complete by the end of two thousand twenty three. They'll apply for approval, early part of next year. And then last but not least, China. China is continuing enrollment with the phase three study. This study definitely was impacted the last twelve to eighteen months due to COVID, in China. In some ways, while, you know, the rest of the world had, you know, kind of moved past the COVID piece, you know, COVID obviously impacted China, quite a bit during the latter part of of 2022 and continue to be an impact.

30:03 So we're working very closely with them to kinda figure out, alright, how do we get this study kinda back on track? But, you

30:08 know, right now, that study is probably out in the 2025 time frame. There is an important milestone payment for us upon approval there. And, obviously, we wanna work very close with them if the communication is strong across the board. Great. Hans, Peter, anything to to highlight here?

30:30 Yeah. Just very quickly here, obviously, we already highlighted the cash balance as of the end of March, £19,200,000. That's corresponding to $23,000,000. US aquifer revenue of £2,900,000, royalty milestone revenues of £1,600,000, plus the upfront we collected from Viatris, our co promo partner of £4,200,000, whereas most of that will be recognized in 2023. At the bottom, you see our current market capitalization as well as our total number of shares outstanding, which is 586,000,000 approximately. And just to keep Deborah's mind, we're obviously listed on the London Stock Exchange, the A market under the ticker symbol STX, but we're also cross traded at the OTCQX market in The US in New York under the ticker symbol SHIELD THERAPEUTICS.

31:24 Very good. Thank you.

31:26 Alright. So upcoming milestones to kind of, you know, keep an eye on here. Obviously, in The US, we're gonna continue. Now we've got the field force fully trained and deployed. Mid May, they'll be out there ready to go. We have the commercial booth at ACOG, and, you know, we've got a goal for prescriptions. We'll continue to keep the market updated on where we stand as well. On the Ex US side, talked about CHI Pharmaceuticals we're at. Korea Pharma on track to kinda get their study done by the end of the year, and we're now we're continuing to enroll in our pediatric study as well. I'd say that's still probably a couple of years away from actually potential approval time frame. However, that gives potentially another opportunity for another important market segment here to expand and grow from as well. And then last not least, on an ongoing communication perspective, we'll have our AGM in June. Half your trading update will be probably around the August time frame and half your financial results in September time frame as well.

32:17 So in summary, we're very pleased with not only what we're able to accomplish as we kind of close the chapter in 2022, but '23 is off to a great start. Right? Got a very focused, dedicated, team here.

32:29 The amount of work that had to be done here to kinda get this thing up and running and particularly on the Salesforce side, was incredible, and the team did an excellent job there. And I think we are very, very optimistic of what this could look like. Last but not least, I would say the level of communication and collaboration with our partners at Beatrice, far, far, far exceeds my expectations. It is a phenomenal group of people, and what I'm really pleased about as well is that the level of engagement between the two field sales forces as they get out there, whether it be the managers, the reps, There's there's just just wide open communication around your sharing of experience, what's working, what's not working. We're very much managing this. In some ways, it's almost one kinda unified organization, which is what we envision, but that's really hard to accomplish, in a lot of these types of deals.

33:19 But we've done a really, really nice job here. So, couldn't be more pleased, and we think this portends to a very, very, you know, be a very fun and interesting second half of the year. I think we're, very optimistic of where we go here. Alright. So with that, give us just a brief moment, and we can kinda look through some of these questions. We'll start to, between Hans, Peter, and myself, start to answer some of these questions that are coming through. Just bear with us for just a minute. There are quite a number of questions here. We're definitely not gonna be able to get to all of these, but we'll do our best to try to hit the the key themes. Perfect. Greg, Hans Peter, thank you very much for your presentation. What I'll do now is I'll just bring your cameras back up. 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 be accessed via your investor dashboard.

34:14 As you've mentioned, we have received a number of questions throughout today's presentation. And Hans Peter or Greg, if I could just ask you to read out those questions and give responses where it's appropriate to do so, I'll pick up from you both at the end. Yeah. Yeah. I think there's one here. So, again, bear with us as we're trying to read through some of these and, you know, answer them as well as a lot. So we appreciate all the questions that come in. One one that just popped in here. So there's a question on, you know, kinda q one sales. How many were so reading this here. How many are prescriber driven versus a result of a salesperson interaction? And I think this is getting to maybe a push pull type of type of question, if you will. Right? You know, how much is a a push, you know, from a Salesforce perspective versus, you know, how many are being written without the the level of a salesperson there? So it's a it's a great question. And early on, it's very much a push, much, much more a push than a pull at this point in time. Right? So as you think about the map that we put up there overall where, you know, we were as a SHIELD contract sales organization where the new field organization is gonna be, there are so many physicians across The US that have never heard of the product that I prefer. Right? Just by ways of just we've never been able to get to them with either a field person or really a lot of, you know, the marketing materials. So right now, it is much, much more a push of driving awareness, introducing the Aquifer, getting those first time prescribers,

35:46 and really getting the the office up and running. Right? So the physician piece that you wanna get educate them, get to write the prescription, then the staff does a lot of the work on the payer side to ensure, you know, prior authorizations are submitted, etcetera, etcetera. So there are two kind of levers here to kind of think about as we drive the push. You then know, how do you kind of then turn it into a a more of a pull? Right? And try to estimate a time point that is always challenging. You as you can see it in retrospect, but not, you know, at the point, but there are two maybe levers to think about here. What we have seen in the early experiences, once you get a physician that goes from a first time prescriber to an adopter, right, meaning that, hey. Acrofor is my first choice. I got the office staff up and running of how to handle whatever paperwork needs to get done as well that once you get that moving, it does kind of run, I will say, by itself, but it allows the representative to spend less time with that office. Right? So early on, from a frequency perspective, your rep would definitely wanna spend time that they've got a first time prescriber.

36:47 There's an intensive kind of buildup to kinda get them up and running. Every physician moves differently in time, but there's an intensive buildup, a lot of frequency and follow-up, etcetera. Once you've got up and running, the rep can definitely kinda pull back and spend that same time somewhere else. Right? So that's, you know, part of how they route their territories and how they design that as well. And, you know, they can just pull back. It doesn't mean they disappear, but their frequency can kinda drop down compared to where it was before. The other lever here is on that marketing side, the marketing campaign side. This is the importance of, you know, the digital piece, getting ourselves out at at congresses like ACOG. We've never been to a an a congress like that before. So how do you continue to drive that awareness on multiple different tactics beyond just the representatives?

37:33 And, obviously, that's gonna get up and running here, so it'll provide a certain boost there for them, as well, not just support to the reps, doctors that they're calling on, but also beyond that 12,000. I guess the last, you know, lever to think about here is that patient. Right? How do you activate the patient? You know, how do you get them? You're becoming aware of this type of product overall, but if you walk into a physician's office and asking for a prescription of Acrefer. So that usually kinda lags the physician approach a little bit here. But as you saw with the marketing hit the hand that we're launching, we definitely have that on the radar screen. How do we start to, you know, activate the patient? How do we get involved in the social media side in the appropriate way here as well? Truly think about activating that patient. So, you know, once you kinda get you you eventually get to a certain tipping point where you'll always have some promotional effort from your reps, but you build momentum where it's less, you know, push and a lot more pull that you see coming in.

38:27 And that's that's the that's the beauty where we think we can get this as well. Right? So very, very good question there. Peter, any ones that you've picked up on? Yeah. There was a number of finance related questions, and maybe I'll I'll pick up on those, give you a minute here to take a breather as well. Sure. There there's several questions really that were related and asked about the cash burn in quarter one twenty twenty three. And I just just wanna wanna correct maybe a a slight misunderstanding of the four elements that brought cash into the organization to that were already 2022 events, meaning that that cash was actually collected in '22 and as such incorporated in the year end cash balance of 2.8. We obviously use those or a majority of those funds to run operations in q four twenty two. So what really was cash that came into the organization in q one was was two elements. One, the 16,200,000 net from the equity raise and open offer, and secondly, the draw of the second tranche after the amendment of the convertible shareholder loan. So if you report or we report 2,800,000 at 12/31/2022, at the 16.2, at the 8.2, you get to 27.2 and then subtract the March end of March cash balance of 19.2, that leads to a cash burn a net of £8,000,000 for the first quarter.

39:50 Now, obviously, it's important to recognize that we don't expect that same net cash burn for each of the quarters in the remainder of the year. That'll be unrealistic. But as we had to start building up this this new reality, mister new commercial operation and the co promote partner, we had to preinvest significantly, and that starts obviously investing in the recruitment process, training process, sure the organization is ready. That's just on the front end. On the back end, you need to invest into processes, systems, and also get a few other people in house that can actually support a sales staff of of roughly 50 without the sales management team. So quite significant pre investment that needed to be undertaken. And quite frankly, the 8,000,000 net cash burn is not something that surprised us or is outside of our expectations.

40:42 But, likewise, we expect, obviously, the net cash burn to decrease over the next few months months and the next few quarters just as we start increasing sales revenues. And perhaps as an additional element to consider here as well, we had marketing initiatives that needed to be some some some money spent on that Greg just alluded to. And there is also a a delay in terms of cash collection. So even some of these sales that we've seen in in in March, we only expect to collect those in a couple months down the road in terms of cash coming into our our bank account. So all that said, it seems a very, very large amount, quite obviously, but it's also obviously expected by us that we had to undertake this type of investment, and we are right on track with where we want to be. That leads me to the second question that came, and and that was, you know, is is the cash sufficient to get us to to cash flow breakeven?

41:32 And we we basically stated that very clearly during the roadshow back in December. The connection is the last equity raise, and and we don't see anything that would stagger us from that view back then. So in other words, we believe by the end of twenty four, somewhere in the last couple months, we actually make the turn and get to cash flow breakeven, and and we certainly expect that today still. Here. Let's see. I'll give you a a breather there for a second if that's good. There's a question. I think this is an important one of how do you know, I think we both can probably chime in on this one. You know, how do you take you know, with the cadence of the reps and then the first quarter performance, you know, how do we kind of reconcile that a little bit? Right? How do we, think about that for the you know, how much is that, you know, a predictor of what can happen, you know, down the road?

42:21 And I think, you you know, know, from a from my perspective, I think, Hans Peter, you know, feel free to to chime in here. We can ying and yang on this a little bit. It's really important one. Right? That's why I think for us, we spent a lot of time making sure like I said, job one here, a must do was getting that sales team recruited, hired, and trained. Absolute must do. All the work that the marketing teams, you know, are doing, the work we'll do on the payer side, that's not gonna matter unless we get that team up and running, higher trained, and out there actually calling on physicians and organization for SHIELD. We absolutely pivoted, and that was the big focus. Right? It's like, it had to be done, and we got it done. And not only do we get it done, we've got a great team. I I just I couldn't be more pleased with the level of experience I've seen. Obviously, we gotta turn around now and have that execution focus, but, that was a massive, massive undertaking with the organization to be able to come out of that where we are as well. The other nice thing is, you know, if you think about where we were in the fourth quarter, the number of reps, you know, how many reps we had committed at the first quarter, the timing of training, I think that 12% really stands out, not just the March number overall, really the the, you know, the overall first quarter stands out that, you know, we had a significant amount of disruption in the first quarter. We continue to grow. We continue to execute, and I think that bodes very, very well. So this is not a, by any stretch of imagination, I'm gonna take what you did in q one, multiply it by three roughly overall to try to get an idea. We're just getting

43:53 them going on this whole thing as hopefully you've heard throughout this presentation. But, Yohans, Peter, maybe another comment here to think through that. Yeah. I think that's important to recognize. Even so, the the growth rate stated from quarter over quarter was 12%. Really, there's another story behind that that tagline, and the story is as follows. In q four twenty two, we had an average 22 reps in the field. They generated, as we reported, about 9,400 prescriptions, which makes an average prescription volume in the quarter per rep of 425. Look into q one, you almost need to kind of separate the Salesforce in two because we took on 16 reps that had previous experience and work with us as part of the contracted Salesforce. So those 16 basically already knew the product.

44:39 They knew the territories. And then we had 14 newly trained reps, newly hired reps, essentially joined the team effective February 1. And they obviously need time to to kind of ramp up their knowledge, get to know the product, the territories. As Greg alluded to, in average, in the industry takes three to five months until the rep really gets up to speed and can expect to produce fully. So if you look at those two elements, we actually looked at how many prescriptions were generated in q one of the from the 16 reps that had the previous experience. And of the 10,500 total prescriptions, it was about 8,500, and and that would average to roughly I've written it down, 530 prescriptions.

45:26 So if you look at the 530 average in q one twenty three and compare that to the four twenty five in q four twenty two, is an increase of nearly 25%. It's quite substantial and quite a different story than the 12% tagline really tell you. And for me, that is really the the under the underlying story of what the product potential is going forward, particularly in the near term in 2023. If you then extrapolate that over to a 100 reps that we expect to have in the field sometime in May, there is huge potential here. And we believe that the numbers that we have, you know, come out with with the the year prescription volume ex expectation of anywhere from a 125,000 to a 160,000 is still very much within, within our sweet spot.

46:13 Yeah. I think that's a great way to look at overall. And and without any disrespect to our our colleagues here, those 14 newly hired reps as well, I think your 8,500 target put in there is probably low. Right? I think, you know, we probably drove most of those prescriptions. Again, they're coming up and running. They're definitely contributing. But I think that coloring context, Mohit's Peter there, gives us really confidence of what that now 98, soon to be a 100 sales reps will look like once they're out there up and running, full marketing campaign behind it. So you can feel, like, you know, the level of excitement I think both organizations have, which is great. There's a question on Nordene, just kind of key focus areas as well. Yeah. And, look, Nordene, think, to be frank, we're disappointed with the performance thus far that we've seen. There's been a number of different, you know, conversations and focus areas, particularly focused on the areas where we have kind of commercial organizations on the ground through, particularly Germany and The UK where we have, you good know, sized markets, you know, good opportunities there, and, you know, the ability to have, you know, pricing reimbursement established as well. We've kinda talked about the need for the potential to call on the market where it looks like there's a greatest opportunity, which is women's health.

47:28 I will say Germany is a little bit ahead of where The UK, you know, is right now, and that's a continued area of focus for us as well. But we're not we're not satisfied. We're not thrilled that and, you know, they're not either. Right? So we need to work to figure out how to get them, up and running, you know, in a way that we think reflects the full value of that product across the board. And that full value of the product, clearly, in a lot of those markets, you know, potentially is in that women's health segment across the board there. I will say, organizationally, obviously, they have undergone a lot of changes. They had some ownership, changes across the board last year as well. There's been a decent amount of turnover in different people there. All that, you know, doesn't really look that's not my challenge, if you will. Our challenge has been a little bit of different on the personnel side, but at the end of the day, you know, that that's great for them, but I care about our product and getting the most value out of that product.

48:21 And that's really, you know, my goal there is to make sure we maximize that value. And I think that's their goal as well, but we just need to move a little bit faster, smarter, more efficiently to kinda get that thing up and running here for sure. Hans Peter, any other financial questions you did hit? Yeah. Actually, there's one more here that might be interesting. And, again, similar to before, maybe we can both chime in a little bit on that one. But there were some questions about the the average net sales price of $135, in 2022 that we disclosed and number of questions on how we expect to increase that potentially and then how that's priced off. But, you know, important to recognize, again, that's an average net sales price. And this average net sales price is really dependent on a number of factors. But there's two key elements here that I'd like to introduce just to make sure people properly value that number, that that that amount.

49:10 Number one, we're still fairly early into the launch, not even two years since the launch. So it is very important for us that both for for writers and patients, it's very easy to get access to the product, which means we continue to make the product available for people that do not have insurance coverage that's currently carrying Acrefor, our our product. And that's just to create awareness, number one, but also making sure that writers, physicians have it as easy as possible to prescribe the product, which is important to create the awareness. We don't want the bother physicians to have to look up first. Does this patient have coverage? Yes or no? And then basically use a lot of time. That is detrimental to to a launch when you're trying to create that awareness. So we are still subsidizing a pretty significant portion of of the of the prescriptions that go out the door, which obviously has an impact on the net average sales price. Eventually, that will change.

50:04 The second element and and, you know, we alluded that in the market access piece with the slide that showed that we have a 100,000,000 covered patients. Obviously, there is room to improve here. We're working very closely with our new partner, Beatrice, on that. They have a a very experienced large market access team, and there's two elements that we can do to improve the insurance coverage as it stands right now. For one, we can revisit the contracts with our current payers, part payer partners, and see if we can potentially better the the pricing arrangement, and that's one element. That takes time, and and we're certainly looking to do that in certain instances. And the other element is to see if we can get additional insurance companies onto the list of of covered payers. And that's another one important one that we look to improve. That does take time. Right now, obviously, they're focused on getting into commercial sales operations up and running, get the team recruited, trained in the field.

50:58 I would expect that more toward the second half of this year, we're trying to make some push there. The success of that is greatly dependent, obviously, on the other side, on the negotiation table on how they're gonna react and how receptive they're going to be to potentially help us out here. I would add, Hans Peter, that that's the push pull in essence as well. Right? The push here becomes driving volume of prescriptions. Right? That gets people's attention more than anything else, which then makes it much more manageable on the pull side to negotiate the right level of rebate agreement to manage the business, but also open up access. So these things go hand in hand. Right? As we've talked to the the the interest team, it's like, look. Job one, you gotta get that that purse that Salesforce out there trained, out there driving volume, driving awareness. You know, the physicians, when they demand the product and that demand starts to build, it absolutely helps from a payer perspective. So you outlined that extremely well.

51:50 But to back that kinda push pull who's involved in doing what. It's a highly integrated, you know, kinda approach here that we need to think through, and we got the right team and the right expertise in place to manage that as well. But we're running up against, time here. I've got, one last question here that, just popped in around, just how the two organizations kinda working together. I think as noted earlier and probably a good way to conclude on this, look, we we we we were working together as we negotiated this agreement with our, you know, partner, Beatrice, you know, towards the end of last year. You know, upon announcing that agreement, there's been a lot of work that's had to be done across both organizations. Right? Recruiting, hiring, training, planning for a national meeting, engagement on the payer side, brand new marketing campaign that's getting launched out there, preparation for ACOG.

52:43 It's really you know, we're four months in, and the amount of work that has been accomplished here, you know, certainly for us on our side, but, you know, for, them on their side is just outstanding. And the level of consistency, communication, collaboration, you know, know, somebody was just down at one of the recent training classes, and you can't tell a SHIELD rep from a VITRIS rep everything we are doing to get us together to promote that level of collaboration and communication, and importantly, sharing of experiences. We can help accelerate the entirety of the, two organizations up to get to that three to five month productivity as fast as humanly possible. That's part of why we're doing a national meeting together as well. You don't see that too often with these types of agreements where both companies come together in one national meeting and go out and execute that. So, it just it's been excellent.

53:33 You know, we're excited. You know, the heavy lift is kinda I wanna say I wanna say behind us, but one of the big lifts is behind us. We are now very much shifting to execution. Right? Good field coaching, you know, support for our reps, getting them up to speed as fast as possible, launching new campaigns. So all that execution takes place now, and, we're very, very pleased with where we are to date. Now we execute, and now we look forward to where we can kinda get this product to. And this is the way we always thought we should, launch this product, so I'm actually excited to be at this, you know, kinda point in time with all those resources coming behind. So thank you again for all of your time, your interest, your attention. I apologize we couldn't get to a number of the different questions there, but we appreciate everybody's interest. And, we look forward to keeping you up to date on our progress throughout the throughout the year.

54:22 Greg, Hans 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 feedback in order that the management team can better understand your views and expectations? 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.