Shield Therapeutics plc (STX) Earnings Call Transcript & Summary

Good afternoon, and welcome to Shield Therapeutics plc investor presentation. [Operator Instructions] The company may not be in a position to answer every question received in the meeting itself, but the company can review all the questions submitted today, and they'll 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 CEO, Greg Madison. Good afternoon, sir.

Great. And good afternoon, everybody. Thank you for taking the time to join us. I'm joined here today by my Chief Financial Officer, Santosh Shanbhag, who joins us and will take part in the presentation along with the Q&A. And our colleagues from Walbrook will be managing the Q&A today. We'll do our best to get to all the questions that are being submitted across the board, and I look forward to receiving those going forward from there. So thank you for taking the time today. I think it's really a very -- it's a very good time for us to kind of have a discussion overall and a reminder for what we're trying to do here at Shield Therapeutics with our product, Accrufer, right? And it's put on the title right here where we are really focused on changing the way that patients with iron deficiency, with or without anemia, are being treated today, both in the U.S. and globally. And that is our mission. It's like how do we make Accrufer the oral iron treatment of choice for patients suffering from iron deficiency with or without anemia. That is our mission. We remain steadfast in that mission across the board, and we're very focused on accomplishing that goal, both ourselves and our current partners across the globe. And we'll go through that across -- throughout the presentation today. So we will be making forward-looking statements, so make sure that you read appropriately all of the disclaimers here as well. So what are we doing here at Shield, right? So on the left-hand side, we've got our product Accrufer and Feraccru. We've got a significant market opportunity that we can kind of compete against these OTC irons that are just very challenging for patients and physicians alike. We got an experienced team here in the U.S. that has extensive commercial experience and knows how to launch drugs and build brands. And we've got exactly exciting, compelling ex U.S. partnerships across the globe that are really starting to see some important milestones that we'll talk about here as well. One of the things that was really nice is that I recently returned from a National Sales Meeting here in the U.S. with all the Shield organization as well as all the Viatris sales organization. So our 100-person sales team, our 12 frontline managers, all the associated people that go alongside that, it was an amazing meeting. One of the things that really caught me or maybe 2 or 3 points here is, one, just the energy, the enthusiasm and the motivation to make this work and really achieve that goal that I outlined before, which is we see patients, we see physicians day after day struggling to get these patients treated with iron deficiency anemia. We believe we have an excellent product. And the focus and the goal on how to achieve that, it was palpable during that meeting as well. Number two is the collaboration between the 2 organizations was just outstanding across the board. And last but not least, we actually had the benefit of having a couple of physicians come in and speak to the sales organization. One was in OB/GYN. The other was a primary care nurse practitioner. And it just reinforced, just over and over again, how clinically important it is for what Accrufer can do for these patients as compared to these OTCs. It just really struck home just how big the opportunity is, how challenging it is for patients, how good our drug is and how much it can fill a need, but I'd also emphasize just how much more work we need to do to drive that awareness and really start to build that. So we've made tremendous progress. We have to keep working at it. We firmly believe that if we achieve this goal, it can provide tremendous shareholder value. And we're excited about the work that we're doing day in and day out. So let's just dive into a little bit, as I reflected, on the physicians and some of the comments that they made here. So iron deficiency with or without anemia, it is a super prevalent disease. We've commented before that there's up to 20 million U.S. -- Americans that suffer from both iron deficiency with or without anemia. It's caused by malnutrition, malabsorption, bleeding, very prevalent, especially across women's health, IBD and CKD are the 3 main areas that we tend to focus on within our target audiences. This disease is actively diagnosed and it's actively treated. The challenge that we get into here is just the options that they have to treat this disease are fairly limited. So what that looks like, and this is consistent that we see across the globe here, physicians really had 2 choices. One is oral iron replacement therapy and the second is IV iron. So the vast, vast majority of guidelines out there recommend first-line treatment as oral iron replacement therapy for obvious reasons. IV iron has to be done in a hospital infusion center or hematology clinic offered here in the U.S. It's just not a first-line option for the vast majority of patients. So we focus our attention on the left-hand side here. When physicians reach for an oral iron, it has predominantly been OTC irons, over-the-counter irons, mostly ferrous salts, right? So ferrous fumarate, ferrous gluconate, ferrous sulfate are the common ones you see here overall. 93% of the prescriptions that flow through on that side are for these ferrous salts, right? That has been decades and decades in the making. It's just habit, it's reflective, that's what they have. They know they're not great, but that's the only option they really have across the board here. So what is the challenge? What is the need that's out there in the marketplace? And you hear this over and over again from both physicians and patients that the universal problem is that patients are struggling to treat this disease because they cannot tolerate the GI side effects of these oral iron salts, right? They disassociate in the stomach. They irritate the lining of the gastric mucosa. They create reactive oxygen species, and this whole cascade of GI-related events ensues. Up to 60% of patients are going to discontinue to treat with ferrous salts. And if it's left untreated, which physicians do not want to do, ultimately, the patients may have to end up on IV iron, but there's a big, big gap that sits there in between both of those areas. So this is what happens. Patients get put on an oral iron replacement therapy, these ferrous salts. You get this kind of period of switches and discontinuations while they're still suffering with the disease. You've got untreated iron deficiency anemia, which has documented side effects that if the treatments -- if iron deficiency is not treated, bad things will happen down the road. And ultimately, patients may get put on an IV iron. So this is exactly where we are positioning Accrufer, right? Accrufer is finally, it's a tolerable oral iron that normalizes both the hemoglobin, ferritins, TSAT levels and also avoids the patient's need and requirement for IV iron. So the prevalence of people that get started and discontinue OTC irons is very, very significant. Accrufer occupies a very, very unique spot, and we've got a formulation we think that can solve this need. We've talked before about Accrufer's ability and its unique MOA. So Accrufer is a ferric iron surrounded by a maltol structure, which basically creates a complex which shields the iron, which allows the iron to get down to the duodenum where iron is absorbed by the body, right? So it bypasses that dissociation of the stomach. It doesn't break down. It doesn't oxidize. It gets delivered to where the iron is absorbed. And in our clinical trials, very profound increases in hemoglobin and very profound and low discontinuation rate in adverse reactions. So we heard from physicians that, presented to us at the National Sales Meeting, that this profile and their clinical experience mirrors exactly what we saw in these Phase III studies. So we've got a product here that we believe really fits a nice, nice need. It's very effective, very tolerable, and we're super excited about the work that we continue to do here. Important to recognize, as we step back, it's a big, big market. As I mentioned before, 20 million patients here in the U.S. suffer from iron deficiency with or without anemia. There's over 13 million prescriptions written every single year, again, for most of these OTC irons. We know where those irons or probably those prescriptions are written. Vast majority comes out of general practitioners and OB/GYNs, which is exactly where we have our sales force deployed. It's a very unsatisfied market. And then lastly, there's been little to no innovation for many, many years. So on one hand is you've got this really big market, you've got a clear unmet need. On the other hand, you've got no real innovation, and we got to kind of raise awareness and get this work done. And this is what kind of gets us out of bed every single day is to drive that awareness, get in front of physicians, talk to them about our product Accrufer and really ultimately help benefit patients on the back end. So clearly, as we kind of undertook this mission starting last year, we identified a really great partner in Viatris. I commented before about just the energy and enthusiasm that I saw from both teams at the National Sales Meeting, both the Shield team and the Viatris team. Honestly, for most of the work there, you couldn't tell who was Shield and who was Viatris. You just had a very, very focused group there on accomplishing what we need to do. I can't speak highly enough about the partnership that we have with our core team there as well. So before we dive into details on the first quarter update and some of the financing opportunities that we undertook, I want to talk about our ex U.S. partnerships, and our global partnerships continue to progress. We've got some really important partnerships. And what's really nice is in 2024, some really important milestones are going to be starting to achieve here as well. So starting with Norgine, our partner in Europe. They sold over 90,000 packs last year in 2023. That's a year-over-year increase of 10%. So Norgine continues to perform over -- year-over-year on a very consistent basis. And obviously, we at Shield capture royalties and milestones associated with that as well. The 3 remaining are our 3 development partners in Canada, Korea and China. KYE has submitted their application for approval to Health Canada. We do expect an approval on that sometime in 2024. And with that, we get an approval milestone and double-digit royalties on net sales. And we'd be very, very excited to get a partner to the North, as I sit here in Boston, to get the approval there and get that out in the hands of patients as well. In Korea, we made nice progress. We've completed our pharmacokinetic or PK study. As a reminder, that was the sole study that was needed in order to file for approval. That study has been completed. We expect our partner in Canada (sic) [ Korea ], KP, to file for approval here in mid-2024 with time line for potential approval and launch in that marketplace sometime in 2025. And then last but certainly not least, China, their Phase III study continues to progress. We expect that the last patient into that study should be accomplished here in 2024, and the time line for approval on that is second half of 2026. We have a nice milestone there of $11.4 million upon approval there. So that's certainly one we keep a close eye on here as well. So net-net, across the board, all of our global partnerships continue to progress. And we'll certainly keep an eye out for other opportunities to expand the opportunity for patients to get access to ferric maltol, whether it be Accrufer or Feraccru across selected geographies. Right. So one of the things that we highlighted in the results today was kind of trying to close the book on 2023 and some of the numbers there. Let me turn it over to Santosh Shanbhag, Shield's CFO, to walk through this slide.

Perfect. Thanks, Greg. Hello, everyone. Let me briefly go through the financial highlights for 2023. Now these are consistent with the trading update we had previously provided on the 21st of February. We are reporting $17.5 million in total revenue and other income. Now this includes $11.6 million of Accrufer revenues, that's a 3x increase over 2022; it also includes the $1.5 million in royalty revenues from product sales in Europe, that's by our partner, Norgine; and also the $4.4 million from other income, including the recognition of the Viatris initial milestone payment. You'll see in the middle of the slide, we have reduced our operating loss from $49.8 million in 2022 down to $31.1 million in 2023. Last but not least, we ended the year with $13.9 million of cash on hand and, again, are reiterating our guidance that we will be able to turn cash flow positive in the second half of 2025 with our current resources. I will get more -- I'll get into more details on this in the upcoming slides. A very quick note about our year-end audited financials. Our year-end audit is almost complete, and these numbers that I just talked about will remain unchanged. We are working with our auditors, Mazars, to finalize the translation of the group's presentational currency from GBP to USD. Now this is the first year we will be using USD as our presentation currency in our audited financials and, hence, expect to issue our fully audited results for full year 2023 before May 10, that is in the next week. With that, I'll hand it back to Greg and take questions at the end.

Thanks, Santosh. I appreciate that. All right. So let's shift into our current business and how we look at things going forward here. So our 2024 business priorities are listed in the colored circles on the top here. So across the board, we're focused on really 3 things, right? One, grow Accrufer prescriptions and improve our gross to net, particularly here in the U.S. That's more of a U.S.-focused goal. Santosh just alluded to, we firmly want to get on that cash -- pardon me, that pathway to cash flow positive in the second half of 2025. We'll speak more about some of the strengthening of our financials to the work that Santosh and team have done during the first quarter here. And then last but certainly not least, going back to the previous slide, is expanding our global patient access to ferric maltol. That's working alongside our partners across the globe to expand that, but also completing our pediatric study, which is ongoing right now. So going left to right as we kind of talk about some of the highlights of the first quarter, and then we'll dive into details on each one of these areas. During the first quarter, we had $4 million in net revenues for U.S. Accrufer. We achieved just about 28,800 prescriptions. We had $140 net sales per prescription across the board, and we saw an increase in our prior authorization submission rates. So we'll go through each one of those in detail. I think from a macro perspective, we observed several really encouraging growth signals during the quarter. Some of these or many of these were dampened by the issue that we encountered in Texas, which we'll cover off in detail. But we feel very good about some of the underlying things that we've seen there, and we'll walk through each one of those here as well. Santosh, do you want to just give a highlight on the pathway to cash flow positive and a couple of pieces there as well?

Yes, sure. As I had mentioned before, we are reiterating our guidance that we will be able to turn cash flow positive in the second half of 2025 with our current resources. Now this is supported by a new $10 million accounts receivable financing that we secured in Q1 and a really tight cash burn. We are exiting Q1 with about $10.4 million cash on hand. And additionally, we have also favorably revised our revenue covenant associated with the SWK loan. I'll get into more details on an upcoming slide, but those were the key highlights from a Q1 perspective in terms of strengthening our balance sheet and our cash projections.

Excellent. And as I noted, we got some really exciting global partnerships with our third party. One thing I didn't touch on is the pediatric study. That's an ongoing study that we're running both for the FDA and the EMA, that pediatric study. We should complete enrollment in that study mid part of this year and hopefully have top line results in the second half of this year. So that would, in essence, if approved, can get an expanded indication, open up an additional growth opportunity both in the U.S. and in the U.K. -- pardon me, the EU. And so a very exciting ongoing study here, and we look forward to getting those results out in the second half of 2024. All right. So let's dive into a little bit of details here, right? So as noted in the release today, you can see our overall Accrufer prescriptions and what we accomplished during the first quarter. Since the partnership with Viatris back in Q2 of 2023, we continue to see a very nice acceleration in our growth. Q1 came in at 28,800 prescriptions. That was a growth of 1% versus Q4, obviously, year-over-year growth of 174%. As noted, we saw some really encouraging growth signals here that, unfortunately, were a bit offset by a decline in Texas that we'll go through. But the point out here, really strong growth in 2 key states. So we had highlighted back in September of last year, once we've got Medicaid access in both California and New York, which, by the way, are the #1 and #2 populous states in the U.S. and also the 2 largest state Medicaid programs, we focus on those as a potential growth opportunity. We're seeing those deliver, which is great. Now that was offset by a 28% decline in Texas due to a change in the Medicaid pharmacy benefit manager, and we're going to talk about that right now. So certainly encouraging signs I will walk through right now, but certainly faced a challenge here with Texas. Let's walk through this. So on this slide, there's a lot of numbers and graphs and things like that. So we'll kind of walk through this in a little bit of detail. So this gets in a little bit of a zoom look to Texas, which is a bit unusual for us, but there was enough that warrants here kind of going into a bit more detail. So first and foremost, folks should recognize Texas as a state, for us, represented about 35% of all Accrufer prescriptions written in the second half 2023. So it is a very big and very important state for us. Also, as you'll see, growing -- probably on the graph on the left-hand side, over the past 4 quarters and if I actually extended this back all the way to the launch, Texas has been on a very, very big growth trajectory. So you can see by the graph, we've been averaging about 20 -- almost 25% quarter-over-quarter growth in Texas, driven both by Medicaid business, highlighted in blue; and non-Medicaid business or commercial business, for the most part, are highlighted in orange. So physicians, very early on, started writing the drug, see the clinical benefits of the drug, patients have been benefiting as well. It's been a really important growth state for us across the board. So Medicaid, you can see, on average, has been running roughly about 40% of our [ quarter ] business. So if Texas is 35% of our business as a whole, Medicaid has been running at about 40% of that overall business. So what happened? So the PBM or pharmacy benefit manager, which basically oversees Texas Medicaid to ensure you've got kind of consistency and approach, you've got consistency in terms of the way that PAs are kind of submitted and approved across the board, the PBM that was in place all through 2023 left at the end of the year. So as of December, they exited. The new PBM did not start until April 1. So during this quarter, a period of both transition and a gap, what happened across the board was all of a sudden, PAs that were being submitted by physicians for Accrufer to get approved, we started -- or they started getting back a lot of inconsistencies on extra data that's being required, right, where they had never seen that before. So these physician offices, in essence, started to get flooded with requests around PA submissions, different data points folks wanted to see, and there was no consistency whatsoever. So we at Shield, sorry to hear about that, very quickly from our physicians across the state of Texas, our challenge was there was no PBM in place during the first quarter in order to engage with them. So we're a bit firefighting on the fly here. And our teams in Texas did a very, very good job of trying to stay close to the issue, work with their physicians and realized what was happening across the board. But as folks can imagine, you start getting into data with requests. It's putting a burden on the office staff or putting a burden on physicians. They, in essence, said, you know what, for now, we like the drug. Until we get this kind of clarified, we're basically going to diminish or stop writing for Medicaid patients and we'll focus on other areas of business. So we saw a 28% decline just in the state of Texas during that first quarter across the board. So frustrating for us, candidly, because you had patients that were already on the drug, even refills got caught up in this effect and new prescriptions. So it had a very large effect on our overall business, you can imagine. Now the new PBM stepped into place as of April 1. We are already engaging with them. And our goal here is basically to get back where we were before, which is we need consistency. We need consistency that when a physician submits a PA, we know exactly what is going to be required of them and you don't get multiple requests back and forth and reduce the burden on the staff, but also ensure the patients have access to the drug. So that's what we're focused on right now. But in that first quarter, this had a very, very big effect on our overall business, just considering the importance and size of Texas overall. So flipping on the other side, I mentioned we're seeing some encouraging signals. So what do those look like? I highlighted New York and California, primarily because back in September, when we get access to these 2 very big states, we highlighted them as potential growth opportunities that we're going to continue to accelerate our growth across the board and bottom line of their delivery. So on the left-hand side, you can see California, New York prescription volume, since we got access to the Medicaid programs there, is really starting to take off, right? We're seeing average quarterly growth of 40% in each one of those states. And I put Texas up on the right-hand side, just as a reminder of a similar situation, what did Texas and what were they able to do. We fully expect that the quarterly growth we see both in New York and California portends very, very nicely to continue our growth acceleration. We'll work through the Texas issue. But really, we're very, very encouraged by some of these big states. And the more physicians that now write the product, get clinical experience with it, we can start to drive depth across each of those areas. So I think this portends very well for our business as we continue to move through 2024. On the access side, our access is excellent, both on the commercial plans and the PBMs as well as state Medicaid programs across the U.S. In fact, you can see there's only really 2 states in the U.S. that don't have Accrufer available in some way, shape or form across their state Medicaid programs. And then we also offer a very comprehensive patient access program available for commercial patients where if the PA is submitted and it's not approved, we'll still get the patient on the medicine for $25 per month on Accrufer. So a bit of a safety net underneath. And our goal from our sales team perspective is, let's educate the physicians on the benefits of Accrufer, let's walk into the clinical profile, why it's different than these OTC irons out there and write the drug, and we're going to do our very best to get them on the medicine, right, whether or not it's a paid prescription optimally for us through commercial or Medicaid. And if not, we'll get them on the medicine through our patient access program to really start to build that clinical experience. So we've got virtually kind of a best-in-class type of setup here across the board, which is very encouraging for us. So let me shift now to the second priority. We talked about prescriptions, and then it's how do we improve our net selling price or improve our gross to net. And this is our -- where we landed in Q1 in terms of the net selling price that you see listed on the chart here. So as a reminder, back in the first half of '23, we're roughly about $119 net revenue per prescription. Second half of last year, that accelerated to $145. We're coming in the first quarter at $140 per prescription. And again, this is heavily impacted by Texas, unfortunately. So I'm going to walk you through the improvements that we see in key indicators like PA submission rates are moving very nicely. We renegotiated some very aggressive contracts last year on the payer side to kind of reset our Medicaid best price. Both of those portend very, very well to achieving our goal, where we want to be in 2025 on our gross to net. Unfortunately, those are dampened right now with the loss in Texas, right? And the Texas issue hits where we lost a lot of paid prescriptions, not really kind of mitigating the effect that we want to see underneath on the improvements in the gross to net side during the first quarter, but we're very encouraged with some of these underlying signals that will actually start to be more apparent as we move throughout the year. Speaking first of the PA submission rates, again, back in September, in addition to highlighting opportunities in California and New York, we're very deliberate to say we need to improve our net selling price. And one of the key, key, key things for us is how do we improve our prior authorization submission rates by physicians, right? So physicians, we'll help them with the form, but they ultimately need to submit this PA into the plans. We made a very specific change to our patient access program where our physicians had to submit a prior authorization before patients can actually qualify for that $25 cash price. And you can see some of the effects listed on the graph here as well. We jumped from just under 40% in the third quarter of last year. We're up to almost the mid-50s at this point in the first quarter of 2024. That's a very significant increase in a very short period of time, all tied to that deliberate change in our patient access program. In addition to that, what we're very, very excited about is in September, we also highlighted that we plan to hire and deploy a field access team. That team is now hired. They're deployed as of April 1. And the goal of this group is -- they are not salespeople. Their primary goal is to help educate and support office staff on prior authorization submissions, right? So oftentimes, there may be confusion or they maybe not be filling the form out correctly. This team is out there to provide support and education with the explicit goal to increase that PA submission rate across the board. So between changes to our patient access program, the deployment of the field access team that's been out there for now a couple of weeks, we feel very confident that we're going to continue to see the growth in this area that, again, this plays very well for our achievement of improvement of our gross to net or improvement in our net selling price. So very, very excited about some of the underlying issues, part of the underlying leading indicators that we see there. And obviously, we'll work through the Texas piece to mitigate that as well. So I'm going to turn it over to Santosh. I think there was a lot of work done by he and his team here to get to strengthen our financial situation, to improve our flexibility, and let him walk you through some of the accomplishments that we achieved during the first quarter. Santosh, I'll turn it to you.

Cool. Thank you, Greg. As I've mentioned a few times before now, we expect to turn cash flow positive in the second half of 2025 with our current and existing resources. A tight control on cash burn has enabled us to exit Q1 with about $10.4 million cash on hand. Now our ability to turn cash flow positive is also now supported by a new $10 million accounts receivable financing that we secured in April with Sallyport Commercial Finance. It is a non-dilutive working cap financing and actually helps us to proactively manage our working capital by accelerating cash collection on Accrufer sales in the United States. The facility is securitized by Accrufer accounts receivable and has pretty business-friendly terms. Interest rate is at prime plus 3%, and the facility is available for a minimum of 12 months, and it can actually be extended at current terms for an additional 12 months. In the middle of the slide, you can see we have also favorably amended the financial covenant of a rolling 12-month minimum revenue target that is associated with the existing $20 million debt that we have with SWK. The details of the change of the minimum revenue targets have been provided in the release this morning. The amendment also came with a small change to the final payment fees. The fee changed from 6% to 6.5%. All other financial terms remain the same. So in summary on this slide, you can see we have strengthened our balance sheet through the accounts receivable financing. Number two, we have favorably amended our existing debt facility agreement with SWK. And number three, we expect to turn cash flow positive in the second half of 2025 with our current and existing resources. I'll pass it back to you, Greg.

Great. Thanks, Santosh. All right. So in summary, as we look at our key milestones in 2024, to reiterate, our key focus areas for us internally: we're focused on growing Accrufer prescriptions and improving our gross to net; we're focused on achieving that pathway to cash flow positive in the second half of 2025; and last and certainly not least, expand our global patient access to ferric maltol. We've got a lot of exciting milestones here, growing Accrufer prescriptions here in the U.S. along with our revenues; continued improvement in the gross to net, driven primarily by that increase in PA submission rates. Santosh just walked you through a lot of the accomplishments we did in the first quarter to strengthen and give ourselves flexibility on the financial side in order to hit that cash flow positive by second half of 2025. And then we've noted a lot of the milestones that are coming up in 2024 alone between our partners in Korea, Canada, China. And we expect to complete enrollment of that pediatric study, which would lead to a potential filing for approval in both the U.S. and in Europe as well. So prior to taking any questions here, I think in summary, as we look at the quarter, to reiterate, we saw some very encouraging growth signals across the board. New York and California, primarily excellent growth that we see there as well following the expansion of the Medicaid access; good indicators on our gross to net improvement, particularly with the PA submission rates. We're really happy with the results we saw following the change in the patient access program. We're excited to get the field access team out there as well and start providing that support to physician offices. Our ex U.S. business continues to progress along here as well. Obviously, we had an issue in Texas, which we're on top of. We need to get that rectified. And rest assured, the team is very much hard at work here in trying to get that turned around and addressed, primarily to the benefit of our patients and our health care providers as well. So we remain very, very focused on our long-term goal of what we're trying to accomplish here and changing the way that these patients are treated for iron deficiency with or without anemia. We think we have an excellent product, and we're going to stay focused on execution of what we need to do and how we can control that. And with that, we believe we can drive ultimately a very, very successful product and ultimately shareholder value here as well. And so with that, let me pause. I think we've got a number of questions. I'm going to ask my team at Walbrook here to help, Santosh and I, help and read off the questions. And we'll, again, we'll take as many questions as we possibly can with the time we have allotted here as well. So thank you for submitting those. And Walbrook, let's take that away.

Perfect. Greg, Santosh, thank you very much for your presentation. [Operator Instructions] As you can see, we have received a number of questions throughout today's presentation. And at this point, if I can hand over to the team at Walbrook who's going to manage the Q&A. I'll pick up with you at the end.

Thank you. So we've had a number of questions. A few of them along similar themes. So trying to group these as best we can. First one is on sales. How will you guarantee that your sales targets are met this year? U.S. was missed. Is there any risk assessment and risk mitigation for the coming years?

Yes, I'll take that one. Look, so coming off of the National Sales Meeting, like I said, a couple of weeks ago, we spent a lot of time with our teams overall, just the things we want to do to, to be able to control, what's in our control is like let's make sure that clinically, we're up to speed on what we need to do clinically, how do we differentiate our drug, how is it different than some of these OTC irons as well. Let's focus on calling on the right physicians with the right amount of frequency and the right message. So some very kind of basic blocking and tackling, that's how you can execute here as well. Complement that with some of the additional marketing resources we brought to the team. We updated the new sales aid for them, which makes this whole messaging much more clear, much more specific and ideally should result in more impactful presentations across the board. But I think for us, it's really just good, strong, focused execution of right customer, right message, right frequency and then follow through, follow through, follow through. As we heard from physicians at the National Sales Meeting, we've got a great product. I think all of us fully believe that there is a need out there. And a lot of this is just really good solid execution. I will say awareness is still lower than we'd like to see it. So we've got to continue to find ways to increase that across the board through not just sales efforts, but with marketing efforts as well. But we remain confident in the product, the market, the opportunity. And in order to achieve our goals, we just have to really dig down and execute as best that we possibly can. And that's what I walked away from that National Sales Meeting with is everyone very much locked in on what needs to be done and the opportunity that really sits here in front of us.

Great. Thanks, Greg. While we're on sales, just moving to ex U.S., can you provide any update on Norgine sales figures? Perhaps give a flavor if it's already in the market, expectation around ex U.S. income for the rest of the year.

Yes. I'm not going to comment on ex U.S. income for the rest of the year. But I will say, as noted in the presentation, that Norgine increased their pack sales 10.5% year-over-year, so continued, good, steady growth. We continue to work with them on making sure that we're calling on the right audience. It's not dissimilar to what I just stated. It's -- we've got a great product. There's a great opportunity. It's right customer, right message and right frequency, right? So similar kind of blocking and tackling on sales execution, marry that with some good marketing strategies to try to provide both air support to your sales team, but also how do we expand that reach and that awareness level as well.

Great. Thank you. And while we're on ex U.S., there's a few questions around where you'll act with China, also what's happening with Canadian approval and do you have any other target markets on your road map, maybe India? There's a few questions there.

India, yes, interesting. So as we noted in the presentation, so China, they continue to enroll their Phase III study. That's picked up nicely over the past, call it, several months versus where it was before. According to our partner, they're expected to finish last, at least, last patient into the study before the end of this year, which would be great. The time line for approval there will be the second half of 2026. So encouraged by some of the progress that we're seeing there. And as noted, that's a pretty important marketplace for us, particularly with the approval milestone sitting out there. Canada, been in active dialogue with our partner, KYE Pharmaceuticals. As folks remember, KYE last year submitted to Health Canada. And first, we were told it might be midyear, then by the end of the year. And here we are in '24, we still don't have any decision just yet. What I can share is that we've got no clinical questions or CMC questions, so there doesn't appear to be any underlying issues in terms of the data package. KYE is engaged with Health Canada. What we've been told is that we should expect a decision here in 2024, which right now is relatively broad. But until I narrow that time line based on feedback from KYE, we'll stick with the decision in '24. Very, very excited about, as I see here in Boston, potentially getting our partner to the North here approval for that product and really start letting patients benefit from the benefits of Accrufer.

And just a slight extension on that question, someone has asked, with approvals in Canada and South Korea, how much would that add to expected sales market size? Are they actually of any relevance?

So I think -- I mean, look, clearly, the U.S. is the big focus, right? That's where the vast majority of my time is being spent. That's where the vast majority of the team's time is being spent. That is not only one of the bigger markets, but with our partnership with Viatris, that's going to really drive the revenues to the organization. Every other partnership we do is great aim for the fact that we want to get ferric maltol out to as many patients and physicians as possible around the globe. So that's important from a strategic perspective to have that available overall. But any of the milestones, royalties and things, they all add to it, but it's not going to overtake by any stretch of imagination what we can do here in the U.S. That is going to drive the vast, vast majority. There are some great milestones, royalties. We want to go like -- take the benefit of those. But again, the real focus for us right now, while those continue to advance, is on the U.S. to get that business up and running the way we expect it to be.

Great. Thanks, Greg. Just a quick question, sort of extending on China, and you might not be able to add any more, but someone has asked, why is the China study taking so long to complete with over 1 billion people to recruit from? I'm not sure if you can add any more, but closing it anyway.

It's a great question. All I know is that they definitely got caught up a little bit in terms of the COVID situation there. And I'm not going to pretend to speak down to the local level there, but things in China definitely lingered a lot longer than perhaps other parts of the world in terms of that overall impact. I do know that our team is actively engaged with ASK over there in terms of like how they're progressing with that study and the time line with that as well. As noted, we should be finishing enrollment in that study by the end of 2024, which is great just to get to that milestone because then everything else after that is finalization filing, et cetera. We can finally start to get on a clock where, candidly, that enrollment has been definitely stretched out beyond what I would like to see, but we have a line of sight here to the light at the end of the tunnel, which is great.

Right. Moving on to prescriptions, I've got a few questions here. How are you getting on track with prescriptions? And numbers are cited in research notes. I think someone -- one research note cited 65,000 Q1, 330,000 for the whole of 2024.

Yes. I can't really comment on the analyst notes, obviously, right? The analysts will do their projections on an independent perspective. But what I can comment on is just internally like what are we trying to accomplish, right? And obviously, we want to continue to grow our prescriptions and get this product out to as many patients and turn this into the oral line of choice, right? So as noted, if you look at -- well, if I step back and where we were a year ago today versus where we are now, obviously, a magnitude jump, right? We did the partnership with our partner, Viatris. We had, I guess, like a [ 3.1% ] increase over Q1 of last year in terms of prescription. So we've grown the marketplace. Now none of us internally sit here and say, are we satisfied of what we've done, right? There's just so much more that we can do. There's so many more physicians out there that still haven't written a product like Accrufer, so many patients that could benefit. So by no means of the imagination we're satisfied, right? We're pleased with the progress, but we're not satisfied. Q1, as noted during the presentation today, some really good signals offset by Texas, right? And Texas is unforeseen issue that popped up on us all of a sudden in the January time frame where we're in a bit of a firefight in our biggest state and a very big segment of the population. There's a lot of frustration that we encountered here, particularly for patients, right, the patients who are on the medicine that even refills get kind of caught up in the wash of the Texas issue here. So that's kind of an isolated Q1 issue that we're obviously dealing with right now. But if I look underneath the hood, we're seeing good signs, right? Texas, New York, we're seeing good signs of PA submission rates. Like all those things will start to flow through and it just -- we try our best to work on what's tackled in front of us. Sometimes obstacles come up, we've got to deal with it. We're working on that right now, but we're not losing sight of what our long-term goal is. And if we can execute, and I expect we will based on the product, the opportunity and our team, then we'll turn this product into the success we believe it can be and, with that, will bring along shareholder value, which is important to us as well.

Okay. Just extending on that. I don't think this is in the market, but correct me if I'm wrong. Someone has asked, what is the estimated U.S. prescriptions for 2024? Again, I'm not sure if this is something you can answer or if it's out there.

Yes. We've not put out any official guidance to the marketplace in terms of prescriptions and things like that. Obviously, we got a -- as the year progresses, we'll consider if we choose to do that or not. As we just noted here in the first quarter, we got growth in certain areas. We got a Texas issue we need to address. We are engaged with that PBM. Physicians would like to write the drug and get their patients back from the medicine. That's our goal is to try to allow them to do that. The question is like how quick can we kind of fix this issue, how quickly does that business come back. So as we kind of go throughout the year, we'll consider if we provide official guidance. But right now, we're just focused on kind of solid execution day by day, week by week and driving that growth that we need to see.

Great. Thanks, Greg. Staying on prescriptions, is the prescription data issue completely resolved? How can you assure this will not happen again? You mentioned an enhanced multi-source system in the RNS. What does this actually mean?

Yes. Let me speak to it from just a macro level. I don't know, Santosh, if you could comment on this as well since both of us have been -- joined on behalf across our organization. So the short answer is yes, we're very confident in the numbers we put out today of the 28,800 prescriptions. We're working very closely with our third-party data provider. We get customized data from them on a monthly basis to make sure that whatever their projection methodology that they had identified is fully accurate. So we're working extremely close with them from that perspective. And then maybe, Santosh, you can comment on some of the internal systems we've put in place from a check as well.

Yes, absolutely. Absolutely. And like Greg said, we have clearly improved the proprietary and customized reporting that we have from our third-party provider. Now in addition to that, we have implemented several internal controls as well. Some of them are automated and some of them are manual. We are working with our auditors and our Audit Committee to make sure that we enhance our controls. A couple of things that we have done is we've got different sources of data, whether it is our 3PL provider, whether it is our warehouses or it's the supply chain in the market. So we take a look at all of this data and compare it to the data that we get from the third-party provider and do a quality check of the numbers on a high frequency basis. So given all of this, we feel pretty confident that not only has the third-party supplier provided us with the proprietary and customized data, but our internal controls has also helped ensure that we have checks and balances to make sure that the data is accurate.

Great. While we're with you, Santosh, a question around -- and I think you said it, but perhaps to reiterate. So with the new financing, cash on hand, expecting revenues, this gets you to cash flow positive in the second half of 2025. Is that without raising more capital?

That is absolutely right. So like I said in our prepared remarks here, we have truly strengthened our balance sheet and made our cash projections and reliance on existing resources much more flexible. So by inclusion of the new working cap financing where we're actually able to accelerate our cash collection on Accrufer sales in the United States, that's a $10 million line, as well as the revenue projections. And don't forget, we have also strengthened our cash burn in Q1, and we'll continue to have a hyper focus on that. So all of that put together definitely puts us on a path to being cash flow positive in the second half of 2025 with our current and existing resources.

Okay. Great. And does this include milestone payments? And in fact, are you expecting milestone payments this financial year?

Very minimal contributions from milestone payments. I think Greg alluded, too, the big milestone payment is actually from ASK in China. And that, given the time lines and anticipations of the process with -- of the NDA in China, I think it will end up being in 2026. So if that gets accelerated, then that only improves our chances of getting cash flow positive in the second half of 2025.

Right. Moving to Texas, we've got a few questions here. Did the Texas issue adversely impact other companies? If not, why not? And how can one PBM create such issues? I'll park it there. There's a couple more, but I think [ I'll let you answer ] those 2 first.

No, it's fine. I am actually just going through some of the questions here as well. I noted a few of those, so thanks for pulling those out here as well. So yes, look, the Texas issue, first and foremost, this was not a foreseeable issue, right? So we knew that the PBM is going to change, right? So that much, we had indication of. What we didn't know is [ aimed ] to be a gap between the new one coming in and the old one leaving, which obviously was news to us. The more important issue is even with the PBM leaving, our understanding based on communications was you wouldn't have a change in the overall criteria as it looked for managing prior authorizations, right? So that was definitely a surprise both to us and to physicians. So we had to react pretty quickly where all of a sudden, every prescription going through, whether it be a refill or a new prescription, physicians were just getting flooded with requests. So you can imagine, as we're trying to react real time here, you don't have a PBM in place to kind of get clarity across the board. So it created a lot of confusion, a lot of frustration. And that's really what the issue was in Texas. For us overall, if you can imagine, from a physician standpoint, we're trying to balance working with them, making sure the patients can get on the medicine they want them to get on. But at some point, it gets to a point where you're like, you know what, let's just pause on the Medicaid side, we got to get this figured out here as well. Let's think about focusing on not Medicaid, but a non-Medicaid business. We did actually see an increase in March of 6.5% in our Texas business that was non-Medicaid as we kind of position physicians to say, you know what, we understand where you're at, we got to get this thing figured out, but let's figure out what other patients can benefit from Accrufer. For the meantime, this is not your Medicaid patients. So we are absolutely kind of on top of that 100% to see where it goes. As far as other products, I haven't had time to dig in to figure out how this may have affected other areas. I know what affected us, and that's where my focus has been across the board. So every product might get affected differently depending on exactly the product, the PA, whatever it may be. I know it hit us. We got caught up in the wash here. We intend to fix it. What I take note of is physicians -- and this is a bit of a -- I guess, if it wasn't clear, there's a bit of a double whammy to us or a triple whammy, both in terms of -- you remember the chart I showed. Prescription growth overall have been averaging very good, strong growth in Texas. So not only in the first quarter did we not get that growth, but we had a decrease. So the magnitude of effect is actually pretty big across the board, both in terms of missing out on growth, but also having a decrease. And as noted, it had a real effect on our average gross to net or net selling price, all driven by the state of Texas. So rest assured, our mission is we get patients there, they want to get on the drug, physicians want to write the drug. We've got to get this logistical stuff kind of figured out and get the consistency back to where it was before that can allow that to happen. We're engaged on that. It's a big focus area for us, and we're doing everything we can to do that as quickly as possible.

Thanks, Greg. Just a slight extension on that question. So do you think Texas is a risk looking forward? And do you think it will come back to prior levels?

Look, I mean, ultimately, I'd love to get it back to where we were before, right? Physicians want the drug, right? They like the drug. They've got tons of clinical experience. So that part is great. It's not like they -- something happened where they don't like the drug anymore and all of a sudden, they stopped writing it. That would be a whole different kettle of fish. This is a logistical issue that we've got to get figured out to make sure that for them, when they write it, they just want to make sure they understand when I write it, what do I need to do, how do I get it approved and just be consistent, right? That will make their job easier, they're staff's job easier. And as long as we know that, we can execute against that. Right now, we do not have that. That's the biggest challenge right now. So number one, you see our Medicaid business already decreased pretty dramatically in Texas, if you will. As noted, we pivoted them to writing for commercial patients in the meantime while we're engaging here. We're seeing some positive green shoots, still in the March time frame on that. And our ultimate goal would be to let them get back to where they were before, which is you want to write it for patients that are suffering from iron deficiency with these OTC failures. We want to get back to allow them to do that and reaccelerate that growth.

And do you have a time line for Texas to come back?

It would be premature right now to comment on the time line. Just note that we're actively engaged. We're working on it right now. And when and if that kind of gets clarified or when that gets clarified overall, we'll certainly update the market, but it would be premature right now to comment on the time line.

Are you seeing other areas of sales slowing outside of Texas?

No. I mean, as noted, I mean, particularly in like big-volume states like California and New York and recognize in the U.S., you're never going to have like even distribution across all states, right? So California and New York are 2 of the biggest populations in the country. Texas, I think, is like #5. So you're always going to have a larger proportion of your sales in your prescriptions coming from these larger kind of populous states. We're seeing really nice growth. Yes, we saw, on average, 40% quarter-over-quarter growth coming out of California and New York. That portends very, very nicely for us. And we're just getting started there, right? So by no means are we done or satisfied with the progress. I think it's moving in the right direction. But man, we're just getting started, and that ball is just starting to roll here as well. And then certainly, as we look across the country, again, just focus on what I said before, good solid sales execution, drive awareness, we continue to expect to see growth in all parts of the country here.

Okay. Moving on, we've only got a few minutes left. This has been a recurring theme in terms of share price. And a question, do the directors plan to buy more shares in the company? I suppose it's probably a question you can't answer, but do you have any comments on that?

No. I mean the only thing I can say is, look, I mean we're very -- look, we're cognizant of where things sit right now. We're not tone-deaf at all on any of that. But what we focus on is our day-to-day business and how do we just continue to grow this market, grow Accrufer, all the things we talk about, prescriptions, gross to net. There's some really good things there. And just rest assured, the dedication, the focus, the motivation, the passion, it's all there, right? We are very, very driven to do that. We always want to move faster than we're currently moving here as well. But we firmly, firmly believe, based on everything we have seen, recent market research, I can't tell you just how enthused I was by hearing from these physicians at the national meeting about their perspectives and like how their journey was to like introduction of Accrufer to now adopting it fully. It just shows us over and over again how much this marketplace is needing a product like Accrufer and our desire to kind of fill that void, right? So if we can execute on that, execute the way we expect to across the board, then with that, we'll come to shareholder value. But rest assured, the team is fully hard at work, fully engaged and we're very motivated to make this a success and bringing all of you, shareholders, along with us and get our shareholder value where it needs to be.

Great. That's great. I mean there's a question, I think you just answered it. Investor confidence is low, what else can you do to improve this? If there's anything else, you would just answer that, but I think you just answered the question, really.

Yes, no, it isn't. I mean our goal is to make sure that communication is strong, right, keep you updated on the different parts of the business. But rest assured, again, that the team is fully hard at work and fully motivated to make this a success. And all of us in the company, our shareholders as well, so we share the interest to try to drive this and make this a success that we expect it can be, and we're excited to do it.

Great. Just a final question, I think, here. Is your sales team of 100 enough?

Yes. So if you're asking a guy from a commercial side, right, I'd say it's hard enough. I'd love to have more than that, of course, right? But I think it's enough for now, right? I think the marketplace, the way it's set up right now, you can certainly always use more salespeople than you currently have. I don't think the sales team -- I mean the 100 is great. We're focused on that 13,000 positions that we have out there. There's a lot more that we can and expect to do. And again, we're starting to see some really positive signs underneath that. So love, love, love the team. The area that we'd love to do more of is on the marketing side, right, just to provide that air support, that I call it air support for our kind of troops on the ground, for lack of an expression. Just there's a lot more we can do on the marketing side that we'd love to be able to accomplish here as we go forward, just to continue to drive that awareness, provide better support, expand beyond that 12,000 to 13,000. We've not just -- we're kind of dipping our toe in it a little bit here as we kind of manage all the moving parts of our business. But if there's an area that I would like to do a lot more of, it will probably be more on there. And then eventually, if that warrants it, add more sales force in due time.

Perfect. Greg, I might just jump in there. I think we're coming up to the hour now, and you have answered a lot of questions today. Thanks to Walbrook for chairing the Q&A as well. But just before redirecting investors to provide you with their feedback, which I know is particularly important to the company, Greg, could I just ask you maybe for a few closing comments?

Yes, absolutely. First off, thank you for your time today. Thank you for all the questions that came in. Hopefully, we've got a chance to address, I think, the vast majority of those as well. So really appreciate folks' time, your interest and the questions you submitted here as well. We also appreciate you coming on this journey with us, right? Again, I go back to where I started where we have a firm line of sight to our mission, which is to change the way these patients have been treated for decades for iron deficiency with or without anemia. We've got a great asset. We've got a lot of physicians out there that are looking for an asset like ours. We need to kind of connect those dots together to make this a success. We're very, very encouraged by, again, some of the underlying things we see during the first quarter here that did just get dampen, unfortunately, by Texas. So we've got to deal with that, but we are encouraged by some of the underlying signals that we're seeing here that we talked about here as well today. And long term, look, our goal is to make this product a success, get to be the oral iron of choice. We've got a great partner in the U.S. with Viatris, very exciting ex U.S. progression as well. And if we execute on those, which we intend to do, the shareholder value will come as well. So we appreciate everybody's work with us, their patience, they're joining us on this mission, and we're excited about the work that we are doing on a day-to-day basis.

Perfect. Greg, Santosh, thank you once again 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 at Shield Therapeutics plc, we'd like to thank you all for attending today's presentation, and good afternoon.

Thank you.

Thank you.