Shield Therapeutics (LSE:STX) — Interim results

0:01 Good afternoon and welcome to the SHIELD THERAPEUTICS PLC interim 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 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 it receives in the meeting itself. However, the company will review all questions submitted today and publish responses as appropriate to do so. Before Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Greg Madison,

0:32 CEO. Good afternoon, sir. Great. Thank you very much, and good afternoon, everybody. Thank you for joining us on the call today. Greg Madison here. I'm the CEO here at SHIELD THERAPEUTICS and joined by my colleague Hans Peter Rudolph, our chief financial officer. Again, pleasure to speak with all of you about a busy day we had today in terms of putting out some announcements. We're gonna cover off on each one of those, but obviously put an announcement today announcing our half one financial results, update on the really nice pickup in demand we're seeing on the third quarter prescriptions and market assets expansion as well as we raised some additional growth capital today coming in at just over 26,000,000 with a $20,000,000 credit facility with SWK Holdings as well as an equity raise on top of that as well to fortify our balance sheet and ensure that we can drive to cash flow positive here by 2024.

1:24 So, lot to cover here. We're very happy to speak with you, and we're making some really nice progress. So just over two years ago, we launched AcreFur here in The United States. And I think the team at that point had a mission and a vision that we wanna make AcreFur the oral iron of choice here in United States for physicians that are treating patients iron deficiency whether without anemia. That steadfast belief and that vision really stemmed from the fact that as we looked at the marketplace today and patients being treated for their iron deficiency anemia with OTC irons, we saw. Right? Just a very, very unsatisfied market with up to 70 of GI related adverse events, high discontinuation rates, low, effectiveness across the board. And we talked to physicians, we talked to patients, and just universally heard over and over again, patients just can't tolerate this. It doesn't work that well. And there was a clear, clear potential need for a product like ours with Acrover.

2:26 We believe we have a great product. That's one of the reasons why I came here. The product is phenomenal. Phase three studies showed not only profound effectiveness at treating the iron deficient anemia, getting patients back into normal range in a hemoglobin, but also the ability to maintain their mirror as well, but do it in a way that has unprecedented tolerability with less than five percent adverse reactions and less than five percent discontinuation rates. This is what keeps us steadfast in our mission to get this product out there, make it aware and available to as many patients as possible here in The US as well as around the globe, and we're very, you know, pleased with a lot of the progress we're taking. Some really good steps along the way to get ourselves out there and make sure that we can make this the oral line of choice. Along that journey, a major, major milestone here for us here at SHIELD, where we're launching this on our own, is having great partner alongside us with the interest. Right? We spoke all during 2022 of how important it was with a market like this, the size of it, the vastness of it overall that we find a way to kinda scale up our commercial operations, and we found that in a partner with Viatris. I can't speak enough about how just a good partner they have been over the first, you know, nine months since this agreement got signed and really about four months in the since the commercial, expansion get done. Just a great, great partner across a number of different areas, collaborative communication.

3:50 We run the business together. I can't speak highly enough. But importantly, what for us was they wanted to join us on this mission to get this product out there to as many patients in need as possible and really make Aquifer the oral line of choice in this marketplace today. So I wanna talk a lot about the momentum that we're seeing build here. There's a lot of things that are going very, very well for us. Some things, like gross to net, they take time to mature. Right? And we'll be improving that as we go into the fourth quarter and certainly in 2024, and we'll talk about what that looks like. You know, other things like prescriptions and things like that, yeah, we're maybe just a smidge off in some of our timing overall. However, our results suggest now as we step back and look at this, you know, four months post expansion, our results clearly suggest that we can build a team that delivers, that product responds to our team's efforts, and that the rebranding of this campaign has got the attention of health care professionals as well.

4:45 So with that as a springboard, we've updated. We refined our Rx guidance, you know, to match the timing. We're redoubling our efforts to improve gross to net, but all against the backdrop of just outstanding market adoption. It is really, really clear that what we envisioned back in December of building up this commercial organization, adding more resources with a need that's out there in the marketplace and a really promotionally sensitive drug, we're really starting to see the results of those efforts come through. You can see some of the highlights here that we'll discuss, 50% increase in AcreFire prescriptions in the second quarter as compared to the first and 80% projected increase here coming into the third quarter as that demand is just accelerating. All of our key performance indicators from the physician perspective moving in a very good direction here. We had a nice market access expansion, recently.

5:35 We've jumped from a 100 to a 123,000,000 covered lives, so that's moving in good direction. And you see some of the milestones that we're projecting going forward here as well. So as part of our release today, I'm gonna turn it over to Hans Peter just to give you some of the financial highlights from the first half of twenty twenty three. Hans Peter, please take it away. Yes. Thank you, Greg, and good afternoon, everyone. The financial highlights for the first half of twenty twenty three, there's really three areas I'd like to cover here on this slide. First of all, revenues and other income, we reported US8.6 million dollars for the first half of twenty twenty three compared with 2,800,000 for the previous first half year. The two main components of that number are number one, a 118% increase of net product revenue from our U.

6:23 S. Aquifer sales, which now amounts to $3,700,000 doubling the number that we had reported in the first half of twenty twenty two. And then secondly, other income of $4,300,000 which represents the remainder previously deferred portion of the $5,000,000 upfront payment from Viatris, which we received back in December 2022. We'll report a loss of US12.6 million dollars for the first half of 'twenty two. That's down from US15.1 million in the comparative period in the previous year. And really, the largest driver of that loss is SG and A expenses of US17.7 million dollars slightly higher than in the previous year.

7:08 But obviously, the largest driver within that is selling costs, which is closely linked to the increase in our operations and our commercialization activities in The U. S. That selling cost is CHF12 million. Cash and cash equivalents amount to CHF13.6 million at the 06/30/2023. Important to recognize in this context is that our main shareholder, AOP, they converted roughly CHF12 million from debt to equity during the first half of twenty twenty three, reducing the remaining outstanding loan balance of their of their loan to 5,700,000 at 06/30/2023, and that amount includes some accrued interest as well. Back to you, Greg.

7:54 Great. Thanks, Hans Peter. So as we join forces with Beatrice, it bears reminding just how significant this market opportunity is. There's approximately twenty million patients here in The US suffering from deficiency with or without anemia, 13,000,000 prescriptions written every single year for OTC irons to try to help these patients and treat this disease. So between us and VHS, we've got our 100 person Salesforce deployed primarily against the area that has the biggest opportunity, which is women's health, specifically OBGYNs, as well as general practitioners. Again, very unsatisfied market. We hear a lot about discontinuations, etcetera. When we get the chance to chat with a physician about AccraFer and display, you know, our differentiated mechanism of action, our clinical trial results, we get a nice kinda lean forward here to understand what that interest may look like as well. And understand that there's been little to no innovation in this oral iron therapies in the last decade. So we are the first and only FDA approved oral iron to treat iron deficiency whether without anemia, regardless the etiology.

8:59 You know, with that comes a very significant opportunity that we are just literally starting to scratch the surface on, but we also need to really wake this market up, right, and let physicians know that they should expect different expectations for an oral iron. You asked them today about an oral iron, you know, tolerability, discontinuations,

9:18 poor effectiveness are the three things you kinda commonly hear back. We gotta change our expectations what an oral iron can do, and we certainly have a product that, we can believe deliver. So very, very big unmet need. And despite some of the numbers that we're starting to generate here, there's so much more opportunity that we can, go after here. So as a reminder, to set the stage for, the first half results, we signed the, exclusive multiyear co commercialization agreement with the Atris at the end of last year. Obviously, we had to build up our sales teams. In the bubbles here, you see that we communicated that we build up the 100 person sales force, 12 frontline managers. We have them recruited, hired, trained, and out there in the field. By May, we accomplished that goal, did the national sales meeting together. Middle of May, that team was out there deployed against roughly 12,000, health care professionals that are the largest oral iron writers across The United States.

10:14 By expanding the Salesforce, we dramatically increase our reach and and efficiency. Right? As you can see from the map on the left hand side, we have very little, what they call white space or uncovered geographies now here in The US. But the other big thing is that a lot of these sales territories are much, much smaller in geography. So what we have learned, you know, through, you know, our efforts prior to Beatrice coming on board is we always suspected we know there's a need out there in the marketplace. We know physicians, you know, are dissatisfied with what's out there as well, and this is what they would call a very promotionally sensitive product. So the more physicians that we can reach and the more often we can reach them through Salesforce deployment, marketing programs, presence at different congresses around there as well, this is very, very promotion sensitive. So our belief when we signed the deal with Beatrice and we looked at the market and had the ability to kinda expand that is that, you know, you put more resources to it, you're gonna get, the results that you start to engage on here. So, very pleased with what the Salesforce is doing right now. In addition to that, I mentioned the importance of, you know, marketing campaign. I think this is a really good example of the collaboration between SHIELD and Beatrice that goes beyond just the Salesforce deployment.

11:28 Both, organizations, you know, the head of marketing on both sides have run this product, work together, and launch a brand new marketing campaign. So it'll be from January until May. They created, developed, and launched a brand new marketing campaign. This is designed to hit what I said earlier. It's designed to be edgy, provocative, have good stopping power, and get physicians to rethink about what they're doing out there for patients with iron deficiency anemia and importantly introduce the product Aquifer. Beautiful play on the word iron here with the irony and what we heard from patients is oftentimes the physician trying to do the right thing with these OTC irons and giving them, to patients, but it actually makes them feel worse when they're trying to feel better. Right? So that irony that we talk about here, it's been very, very effective, and the field force has, you know, all the materials. There's a lot of digital, assets out there as well, and, we're just starting to get going with this here.

12:22 So let's talk about performance. The performance has been just excellent, and I can't emphasize enough. We're just starting to get going here. On the right hand side, you see our quarterly prescriptions, on a quarterly basis. So in q two, the team delivered a 50% increase in total prescriptions for Aquifer. Q three is trending at 80% right now. That's based on July and August actuals. We don't have September numbers just yet. We feel really good about where this direction of the business is going. We're gonna do just under 30,000 prescriptions in the third quarter. That is more than the first two quarters combined this year. It gives an idea how fast this is starting to accelerate overall. So we're very, very pleased with the demand that's out there. It just reinforces to us what we started with.

13:08 There's a big need out there, and it's this field force, you know, now is getting in front of more physicians. And there's still thousands of physicians who have not heard of the product, Aquifer. The more they get aware of it, the more they understand what that can do, more interest there is. And, we're pleased with what we're seeing from acceleration of these prescriptions across the board. If we look across at all of our key performance indicators from a pardon me. From the field launch in May, the 100 people getting out there through August, we have four months of data. That team is generating 26% month over month increase in prescriptions. That is just excellent. Outstanding. I couldn't be more pleased. That's right on track to where we thought we might be post expansion, overall, and, the team is performing well. And we think there's still a lot of room to run. Bear in mind that the numbers we're thinking about for 2023, we're still at about 1% or just less than 1% of the total potential business out there. So much, much, much more opportunity out there as well.

14:11 All of our KPIs, whether it be first time writers, new prescriptions, repeat writers of the product overall from q one to q two, all moving in a very, very positive direction. So, again, we're very enthused by the the early response we're seeing out there, and it just reinforces the amount of demand that's there as well. So as we step back, we are, call it, four months into the full expansion. We've had May, June, July, and August. And I mentioned, you know, how Beatrice and us are kind of running the business together. And, again, I can't speak highly enough of them. We're really running this business as if it's one company, which is really, really challenging to do, these type of, you know, co commercialization, co promotes, but we are doing it really well. That's what we wanted to do from the outset, and I think the teams are executing that really well. So we communicate with them, you know, every single day. Right?

15:01 The field mansion teams are on the phone with each other every single week talking about, you know, what's working, what's not working, how we prove this, you know, what's that look like overall, sharing best practices across the board. And we work together to step back and say, okay. A couple months in, what's working, you know, where areas you need to focus on, and that's where we land here. Right? So I think there's a lot of things going well. Areas that we need to work focus on, we wanna accelerate. So, clearly, we need to work on the gross to net. Right? Our average net selling price right now is at a $119 per prescription. You know, that's relatively flat throughout this year. So everything else is kinda moving in the right direction. We gotta put a little more time and attention to the gross to net. We're very confident on what we need to do to fix that, and we'll talk about that here in just a second. The other thing we're exploring is how do we accelerate more direct to patient type of strategies. Right?

15:50 So we're very focused right now on the health care professionals and driving that awareness. We always had an idea in our mind that direct to patient, you know, in certain segments of our business such as women's health might make a lot of sense. Kinda have that in the back half of '24. We're thinking about, alright, how do we accelerate that with the demand increase we're seeing? How do we think about accelerating that as well? Then last, so not least, is just how do we systematically continue to work on market access. Right? How do we build up our market access? I will say, as we get into the next couple slides, market access, really, the way that you successfully continue to expand your market access is directly linked to demand. Right? So the higher the demand jumps up overall, the more physicians that are writing the product, the easier it is on our side to kinda work with the payers. They start paying attention to it, and we can have a good discussion on how we systematically improve our gross to net. We're already starting to see some results of that.

16:44 So one of the nice wins we had recently was that, there are two big segments of the business here in The US. There are commercial plans and PBMs or pharmacy benefit managers, then there are state run programs. So collectively, both those two drive a lot of the reimbursement, here in The US for our product, Acrefer. We've made some very good progress in a lot of commercial plans and PBMs, and then we had a nice, expansion recently on the Medicaid side here where, the state of New York, and the state of California, the two biggest Medicaid programs here in The US overall have recently made AcreFur available for their patients. So, whereas before, your physician may not have been successful if they wrote the product to get the patient on the medicine, they now have access to that as well. So our lives have jumped from we're hovering around a 100,000,000 lives from last report to now we're up to a 123,000,000 lives. Great progress across the board. So demands moving in a good direction, and you're gonna continue to see as demand kinda increases, we'll see also increases on the market access side. So a really nice opportunity, also a good, you know, reason why we forecast continued growth here. Right? It's like opportunities like this that all of sudden open up, and we can take full advantage of those as well.

17:59 So we wanna improve our gross to net. Right? That net selling price is one that we've looked at. Like, alright. What do we need to do? How do we fix that? Bear in mind that our goal is to hit around 220, $240 per prescription in 2025. Right? So, you know, it's like, are we sitting at $1.19? How do we get to $222.40 in a couple of years? There's a number of different ways that we can do this. There's a pretty well established pathway here at The US of, you know, different leverage you can pull on this stuff. As noted in my opening, oftentimes, does take gross to net a little bit more time to mature versus your demand. So we're right on track for, you know, what we need to be doing, and this is obviously, taking up a lot of, time and attention for us as well. So the biggest thing we need to do overall, and you see three things here. Right? So one is we're gonna modify our patient access program.

18:45 We're gonna build out a new field access team. Then, obviously, we talked about continue to expand that market access, and they all really do kinda connect together. But the real thing we need to focus on is just increasing the number of what they call prior authorization submissions from health care professionals into payers. Right? So bear in mind, when we did our contracts with all of our payers here in The US, you know, for the most part, patients to get access to Aquifer, they have to try and fail in over the counter. Right? And that's exactly what we expected. We designed it that way. It's very common here in The US that, you know, anytime you're competing, against any type of, you know, generic category OTCs, you're gonna get prior authorizations as part of that overall. It's just a fact of life, and almost every single company deals with this.

19:30 So this is not something new to AccraFord nor is this a surprise. You always knew that, this would the case. Now to the demand we're seeing, clearly, the the unmet need is out there. However, what we need to do is increase the number of prioritizations. Why this is important in very simple terms? If we have a patient who is covered by insurance today and the physician writes prescription of AcroFer, you know, generally speaking, we net about $250 per in revenue for SHIELD per prescription. Right? Pretty much right where we wanna be. Right? That's that is perfect. Right? That's what we wanna see. However, if the patient is not covered by insurance, we do offer a cash pay option. It's important for us early in this launch that physicians don't have to think about writing the drug. We just want them to write the drug, and we'll work with them in the back end to get the patient on the medicine, for the most affordable cost possible right now.

20:19 So what the challenge is, what we need to address is the balance between those patients who are, you know, kinda covered by insurance versus cash pay, it's it's too equal right now. Right? It's too balanced right now, and, clearly, we need to kinda increase the percentage of patients that have reimbursement overall and decrease the number of patients that are cash pay. Your mind, right, might immediately think to, well, it's a market access issue. It's actually not. It's a little bit even more simple than that. We just need to increase the amount of prioritizations that go into payers right now. The way we designed our patient access program, it's a little bit too easy for physicians to decide not to submit a prioritization for patients, and they can still get access to that $25 cash pay when we know a lot of those patients who are in that cash pay category likely have coverage and do have coverage, but the paperwork's not being submitted. So a simple way that we're gonna fix that is through our patient access program, just making a subtle tweak where in order for patient or physician to access that preferred cash price of $25, they've got to submit a prior authorization. Right?

21:24 That way it allows us, you know, as both SHIELD and VIATRS to determine, does the patient have coverage? If they do, the benefit for the patient is, it's a $0 co pay. If they're not covered, we'll still offer that $25 cash pay option, but we have to get the prioritization submitted first. So we're gonna just kinda make sure all of our incentives align. That's gonna have a pretty dramatic effect, not just with number of PAs being submitted, but with more patients being identified that actually have coverage that we don't see today, that's gonna increase our reimbursed patient population and start driving us gross to net higher as well. The second piece of that is deploying a field access team. Now this, again, very, you see a lot of companies do this, you know, here in The US in the field access side. I've built these up programs myself, and our commercial team has done this a number of times. But think of this as a team that kinda complements the Salesforce.

22:15 They are not a selling team. They literally are a a group of individuals, and, you know, a lot of times, you might see, like, one per sales region through group that only the only thing they do is help provide support to the physician offices with, you know, support education around these prior authorizations. So for example, you know, we can see if a certain group of physicians perhaps is having challenges submitting prior authorizations, this team would be deployed, you know, or, you know, available, if you will, to be able to answer questions that that office may have around PA support. Right? So this is allows our field team to do what they do best, which is get out there and, you know, promote the drug and have physicians write it, but now we provide support on the back end to the staff around this PA submission. So two of these levers here both have the same effect. It's all designed.

23:05 Let's increase the percentage of pardon me, let's increase the number of PAs that are going to the payers. This allows us to identify more patients that actually have reimbursement today overall versus just deploying them to the cash option. So all these initiatives, the patient access programs will be deployed here in Q4, the field access team will have that up and running at some point in the first part of next year, probably later part of Q1 and all these pieces start to drive us where we need to be. The last piece is that expanded market access. I mentioned before, demand is a really critical component of that. As these prioritizations increase, that's how physician pardon me, the payers look at demand overall. Right? So as demand increases, the market access increases, and back to the PA submission, the more PAs who submit as market access expands, the more patients that have reimbursement.

23:53 So it really helps us get on the way where we need to be from a gross to net perspective. So very, very confident that the team we got the right ideas, the right levers to pull, and we'll see some improvement on that certainly going forward here. So where does this all line up for us? Right? So right now, you see on the right hand side, we're targeting about a 100, a 130 prescriptions for 2023 with some of the levers we'll deploy on the gross to net side. We'll see a modest increase by year end, right? It's September right now. The first level is going be deployed in October. So we'll see some modest increase by year end. But more importantly, what it does do, it drives that acceleration as we get into 2024 and '25, right, both from a physician adoption perspective as well as the net selling price perspective as well. What's really interesting, we hone in on 2025 just simply because that's the first time that as a full year basis, we expect to turn cash flow positive.

24:46 We can see some of the market shares here on the left hand side. Right? It just gives you an idea just how profound and deep this market is. Know, we're still talking about less than 5% market share by 2025. Bear in mind, our IP for the product extends all the way up to 2035, so we fully expect that, you know, we kinda get that adoption, that momentum continues to build. We've got a very nice long runway sitting here in front of us. I noted earlier that we did raise some funds today, overall, circa call about '26, you know, million dollars, 20 of which was a new credit facility with SWK Holdings, a group out of Dallas, Texas. They do a lot of work with small to medium sized biotech pharmaceutical companies. Great on the operation side with very good feedback feedback on the strategic sides. We're very pleased to be working with them as well.

25:36 But where that money is gonna be deployed to, you see listed here. So 5,700,000 of that goes immediately to repay the shareholder loan we had existing on the balance sheet right now. And then the remaining part gets split up pretty effectively between commercial investments, a lot of initiatives that I just spoke about on improving the gross to net as well as some of the direct to patient opportunities, and then the remaining 10,000,000 really is to on the working capital side. As that hockey stick starts to accelerate, things like prefinancing, inventory buildup, some of managing the cash flow and both in and out on the receivable side, all that will go to good use. Lastly, you put all together significant significant potential when we turn cash flow positive for free cash flow going forward. Right now, we expect by 2025 for a US business will exceed $120,000,000 You see some assumptions listed down below. Bear in mind, we have upside as well from some of our ex US business that we'll talk about here in just a minute. Gross profit margin remains the same at 45%.

26:41 Bear in mind, that's 90% really, but we pay Viatris their 45% share out of the cost of sales. So, that's where you reflect on the 45. Then you see, s g and a expenses running around 42 to $50,000,000, and then the debt service we factored in here as well.

26:59 Stepping back from The US for just a second and think about some of our global partnerships. We have four of them currently. Nordgene is our commercial partner in Europe. They continue to make steady progress along here. They're reporting 11% increase in total sales volume from half one of twenty three versus half one of twenty two. Again, we continue to work with Nordgene on you know, we're starting to see some movement in the direction we wanna see, which is more towards women health and general practitioners. Still work to be done there across the board, but I'm confident that we're gonna get them there where they need to be. Then we've got three development stage opportunities. CHI has finaled pardon me, filed their application with Health Canada late last year. We do expect a decision on that at some point before the end of this year. We'll keep you posted on that. Korea is currently enrolling their pharmacokinetic study. This is the only study they need for approval. We expect that that study will be complete by the end of this year and they're on track to file for approval sometime next year. China has definitely had a lot of challenges on ASK in their phase three enrollment.

28:05 A lot of it co related. It does appear we're coming out of that, which is excellent. The team is in meeting with that group next week to get a better line of sight of current enrollment as well as projected timelines for filing an approval. So that's good news that we're coming out of a couple years here where it's been a little bit hit or miss across the board.

28:26 So my last slide, then we can kinda step back. I I know there's a bunch of questions coming in. I haven't had a chance to glance at them all since I've been talking, but know Hans Peter has taken a look at those as well. You step so I always, you know, kind of step back and look at it. We signed the fee interest agreement in December. We're nine months into it and really about four months into the business since the commercial expansion has been finalized in May. There's a lot of things moving in a really nice direction and areas that we obviously are gonna focus on and get improved, and we expect to be able to do that. But we step back, we look at this iron market, what we suspected was out there around, you know, the need, the promotion sensitivity, and deploying more resources. It's absolutely starting to take off really, really nicely. Right? We got accelerating growth in prescriptions.

29:14 Payer coverage is starting to increase for us as well. KPIs moving in a great direction here as well. As noted, that gross to net or net selling price clearly on our line of sights here, we're going to redouble our efforts there and we I think we have the right levers and plans in place and we'll get that where it needs to be. All that leads us to being cash flow positive price slip at the very end of 2024 with full year '25 expected to be profitable with revenues exceeding a $120,000,000 by 2025. And, obviously, we raised some funds here to fortify the balance sheet, really put that money to good work, you know, around a rapidly growing business with working capital needs and initiatives on improvement in gross to net. So, again, we're off to a you know, we've made I step back from twelve months ago, we made really significant progress. There's always, always, always more work to do. We get the right team in place internally here at SHIELD. We have a great, great partner with Viatris. We are uniform and unified in our approach to really drive and make the or a lot of choice out there in the marketplace today, and we're on our way. Right? More work to be done, but we are absolutely on our way.

30:21 So let me pause there. Give me a few minutes. I know, Hans Peter, you've been monitoring some of the questions here as well, and we'll try to get to, as many as these as possible. But, yeah, I doubt we'll get to all of them, but we'll try to answer as many as we possibly can. Thank you, everybody. Yeah. Sure, Greg. I'll start off with a couple of finance related questions to give you a briefer here. First of all, there's been a number of questions related to the new loan facility, and I can kind of read this question right here, which is probably encompassing the questions around most of these related questions. Can you provide some details on the new loan facility and how the terms compared to the previous shareholder loan? Also, why did you decide to repay that shareholder loan? Well, when we determined that it would be ideal to get some additional flexibility and seek additional capital, we started to meet with a number of prospective lenders.

31:12 And during those discussions, we were quickly drawn to SWK Holdings. They offered us very reasonable terms, competitive terms, in fact, but also engaged in a very professional understanding matter. They showed us that they were highly interested in working with us. That was very refreshing. They did their due diligence on SHIELD and was quite a bit of extensive due diligence, but we, on the same term, did our own due diligence on them. And, we realized that they are really well known in the small biotech industry and that they had an excellent reputation. In fact, Greg and I talked to at least a couple of CFOs who had previously dealt with SWK, and they spoke very highly of dealing with them not just in the negotiation process leading up to a facility, but even later on as a partner over the following years.

31:59 So the loan that we negotiated with SWK Holding is a five year term loan for 20,000,000 US dollars with an interest only period of eight quarters. Thereafter, the facility is amortizing at the rate of $1,000,000 per quarter. That means at the end of the five year term, SHIELD will owe a balloon payment of $8,000,000 to SWK.

32:23 Interest is fixed at 9.25% above the sulfur rate with a 5% floor, which is very comparable to the previous shareholder loan. Recall, we had a 9.1% rate above the SOFR rate. However, that shareholder loan was convertible, which is not the case here with SWK. The new loan facility with SWK carries both minimum liquidity and minimum revenue covenants. We obviously analyze those covenants very closely and feel comfortable to meet them during the duration of the loan. The repayment of the remaining balance of the AOP shareholder loan, which was also a question, was a precondition of the new loan facility so that we could offer the IP rights, which were tied to the AOP loan previously as security than a new lender. So we obviously were forced to do that, but I think it's going to help to kind of clarify and clean up our balance sheet a little bit as well.

33:17 Just as a reminder, of the original $20,000,000 that were extended by AOP, all except for $5,700,000 were converted, and the remaining $5,700,000 by default became a term loan since all of the previously allotted shares were already used for conversion. So essentially, that was a term loan with a smaller balance. This allows us, based in repayment, to get an additional $14,000,000 into the bank. There was also a second question, summarized that as follows. Do the estimated annual SG and A expenses of between $42,000,000 to $50,000,000 for 2023 to 2025 per year guidance makes sense, considering you were reporting SG and A costs of only $17,700,000 for the first half of twenty twenty three.

34:09 They actually do. You have to keep in mind that the first half of twenty twenty three was very heavily impacted by a period of growing the business still. We started in January and into February with essentially a sales team of 15 people that we took over from the contracted sales force. We then gradually built up the commercial organization, and only by mid May, we really reached full capacity. So what you see in terms of the first half operating costs is really not reflective of what we see going forward, where we're going to have a team of 50 sales reps on our on our payroll along with six sales managers and, obviously, the support staff in the commercial support team. So going forward, I think we're gonna see a more stable cost basis, and we would estimate that to be somewhere in the range of 42,000,000 to 50,000,000 on an annual basis.

35:02 Graham? Thanks, Santiago. Yep. I was reading a couple while you were doing that as well. So let me kinda jump in here as well. So as a question came in, you know, if you could provide insight on how q three and or end of year looking in terms of sales growth, etcetera. Yes. No. I think we expect q three to come in, approximately 80% growth over q two. Bear in mind, we get about a month lag of data. So we've got for July and August, so we have a pretty good line of sight, to what that expects to

35:33 be. So, perhaps we can beat 80%, but that's I feel pretty good about that number right now. And we've noted that since the Salesforce expansion from May through August, we got four months of actual data now to help us understand how the business is progressing. We're seeing about 26% on average month over month prescription growth. So we feel good about the trend that we're seeing there that helps us, you know, kinda project out where we think we'll end out in 2023. As noted here, we're just, you know, barely scratching the surface in terms of the overall potential. So it's not like we're, you know, at risk of tapping out from the marketplace anytime soon. And as you get expanded market access, that also opens up other avenues for, for growth here as well. So, we feel very good about the trends the teams are, working on right now. Clearly, there's a response to our reps getting out from the doctors there as well, and they're doing a good job, but we always say, you know what?

36:28 What can we do better? And that's how the teams are motivated as well. It's like, you know, we're doing good, but, like, let's, you know, strive to be excellent across the board, and we're making some good progress here for sure. And I think we can add also that the KPIs that we have reported both in terms of refills, but also new writers for us provides a very strong indicator that that global will continue here in the near future. Good point. There's another question on market access. There's a question on it's recently increased to a 123,000,000 overall. What percentage of total market access does this represent, and what do you expect to reach a 100%? Oh, good question. So right now, I'd say we are running it's right about the 123,000,000, probably about 50% of all the lives that we could get, covered for Acrefer.

37:15 At least here in The US, you never

37:17 most companies, you never reach a 100. You just you're never gonna always get there. That's the wrong metric to choose, across the board. What is critically important for us is that demand. Right? Demand and market access, they literally go hand in hand. The higher levels demand you can generate, that gets on the radar screen of the payers and allows you to have good constructive conversations about opening up access to plans where, you know, there may be pinch points where despite writing a prioritization, we just can't get the product through. Right? So those they they literally go hand in hand there. We fully expect as we see demand continue to accelerate, we'll continue to see continuous expansion on the market access side. That's the focus from us and Beatrice. We also always wanna balance, you know, what's the level of rebate, how do you run the business that ties into gross to net. So there's a little bit of, you know, thought process here that you're rather just trying to sign as many contracts we can and not worrying about the what the effects are. You really wanna build up that demand to allow you to have that good balanced conversation, across the board.

38:20 Okay. There's another question here on more just on the patient side around what's this characterized here? Just insights on how long the patient typically stays in the product and how is it performing in the marketplace. So we don't get we don't get patient level data per se. We get, you know, prescription data from the physicians. What we can see, however, is the the durability, meaning, like, how long the patient stays in the medicine looks really good and very much in line with our expectations right now. On average, you're getting that first monthly prescription

38:52 and then either two or three refills. So on average, patients run the medicine about three or four months. That's pretty consistent with the guidelines here in The US. When a physician sees a patient with iron deficient anemia, the typical recommended course of therapy is three to four months of an oral iron to get the iron levels back up to where they need to be and get their hemoglobin back into the normal range. Now many of these patients do have chronic underlying diseases, which unfortunately lead to the iron deficiency or iron deficiency anemia. So, realistically, they should stay on it for the long term. Physicians here in The US, I think, have been a little hesitant on that mostly because of their experience with OTC irons where most of those patients don't even make it to three months. Right? So we've got our models three or four months right on track for me to be, but we do believe there's potential upside that is as physicians get more comfortable with the medicine, to see how well patients respond, that that confidence to keep them on it for the long term and maintain patients in that normal range, that's exactly what we wanna be able to get to.

39:53 I could chime in here in between here was another question that came in. When you say you plan to reach 5% market share by 2025, how did you find this market, and how big is it? Is it all targetable? Well, we did some market research prior to the launch, and we determined to find out that there was about 13,400,000 prescriptions written for these OTC irons per year in The US alone. And that's basically the basis of how we determine the market share. Is it all, targetable? A big portion of that, obviously, not a 100%. There's gonna be some payers we can't reach. There's also gonna be some cash payers that always going to be going with those OTC items that will not be able to convert to us. But at the end of the day, that's the basis for the 5% is the 13,400,000 that we saw of of actual prescriptions being written on an annual basis.

40:43 Yeah. And the question I think of, is it is it targetable? It really depends on what we're actually talking about. Right? So our 100 person Salesforce, you know, no way this I mean, thou literally thousands and thousands physicians out there that write products for treating iron and deficiency in iron deficiency. Yeah. So our 100 person Salesforce is targeting the top writers. Right? They're, you know, twelve, thirteen thousand physicians overall. There's a lot more physicians than that that actually write, iron prescriptions across, and that becomes the importance of not only just driving momentum with the Salesforce. This is very much a, you know, as a promotion sensitive, but momentum type of drug where the more people that get writing it, the more patients that see success, the more physicians that see success overall, you start expanding yourself out beyond just who the reps are calling on. Right? Word starts to spread here. That's the importance of congress presence.

41:35 That's the importance of some of the medical affairs activities. That's the importance of the marketing programs to really drive that awareness on a broad level. So as this market builds and word starts getting out around this product, both from the health care professional side, and I mentioned the potential option we have of activating the patient side, that's where that thing really explodes. Right? So, know, they are all addressable patients, meaning that for those patients who are on an OTC and can't tolerate it or can't get the effectiveness they need, ACREVER, our goal is to make it available to as many of those patients as possible, and it's noted we're just getting started here. That's, I think, what excites all of us around this vision about that as well. Building a brand new market, it's not easy. Right? You gotta you know, like, there's a lot of hard work that goes into that. The teams are doing a really, really good job there.

42:25 Obviously, you're gonna encounter things along the way that, like, alright. You know, this is what we're gonna fix. We're gonna address. This is going well. Let's do that further. Yeah. We're right on track on many of those things as well. I think we've acknowledged where we're doing well, what we need to get addressed here, and I'm very confident in the teams on both sides, honestly, to get this product where it needs to be. There's an interesting follow-up question here that actually ties into the the previous question that you just answered. Are you seeing positive comments about AccraFord benefits from patient groups? So, again, we don't get patient level data, and there's really not, a patient group. Like, it's not a easy, like, hey. There's a big patient group of patients with iron deficiency anemia, probably because it cuts across so many different disease states.

43:11 That being said, though, it does lead us to why we're so intrigued about this direct to patient opportunity and protecting certain segments overall that would make sense to drive awareness in that group of a product like Acrefer. You know, there are so many patients there, again, that may be unaware of product like this, you know, exists. So, you know, how do we activate that patient group through, you know, social media and doing things in the appropriate manner, but just to further drive that awareness. At that stage, then you can start to really monitor, you know, any feedback you're getting from these groups overall. But I think it opens up a really nice growth opportunity that we really haven't touched at all just yet. Yeah. Where we serve certainly see positive feedback is from the writers itself. Evidence lot deals are due to the to the writers that write the product again and following periods thereafter.

43:57 Yeah. Great. It's a question here on the VHS partnership. You know, do you see one company outperforming, quote, unquote, the other, and so I I spoke a little bit about it. The partnership is excellent. Again, we have full transparency. We share the same data source. So, you know, we see exactly how they are performing. They see exactly how, we're performing. So we have full transparency and full accountability with each other. And at this stage, I can't say, you know, one is outdoing the other one. Like, we're we're just we're they're they're doing a really good job, and we watch that business, like, literally each week. Right? So there's not a big distinguishing factor between the teams that have maybe the s on the front of the jersey versus the v, very much operating as almost one company as much as as we can do that.

44:51 But, no, I think the teams are doing a good job. And, like always, right, part of the field management team and their responsibility is, you know, hey. We got a whole bunch of reps that came on board in April or May. They're still learning. Right? They're still learning. They still get up in front of their physicians. So our collective goal is we want commercial excellence across everything we do. That's the bar that we have, and we're always working to help with our representatives, managers, teams to kinda get them up to that high performance level. They're doing a good job, but there's you know, like, every one of us can always do a better job at and no matter what we're doing, and that's the same mantra we have here. Right. I think we got time for one. I'm just going to the clock here. We got time for one more question. Peter, anything you saw out there that, we should be hitting?

45:40 I did see a couple of questions about the pediatric study. I think important to recognize is that ongoing pediatric study, it's still ongoing, and we have not modeled that into our models in our revenue figures. So if we do achieve regulatory approval for for the extension into young adolescents, for instance, that would be an additional upside to the product that that we expect to materialize in a few years down the road. But we have not done any market research and can't really assess the impact of extending the label potentially here. It's something that's ongoing and something we'll be monitoring and obviously get dive into a little bit deeper in the next year or so. Good. Okay. I think with that, let's, we can work to close it up there. We really appreciate all the the questions and comments that came in here as well.

46:28 Perfect, Greg, Hans Peter. Thank you for updating investors today. Could I please ask investors not to close the session as you 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. Some should 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.