Announcement PDF RNS Number : 5477N Shield Therapeutics PLC 21 May 2020 Shield Therapeutics plc ("Shield" or the "Company" or the "Group") Preliminary Results for the Year Ended 31 December 2019 London, UK, 21 May 2020: Shield Therapeutics plc (LSE: STX), a commercial stage, pharmaceutical company with a focus on addressing iron deficiency with its lead product Feraccru®/Accrufer® (ferric maltol), announces its preliminary Group results for the year ended 31 December 2019. Operational highlights · FDA approved Accrufer® with a broad label for treating iron deficiency in adults · Positive long term data from AEGIS-H2H (head-to-head) clinical study comparing Feraccru®/Accrufer® to IV iron although the study did not meet its primary end point at 12 weeks · The H2H study demonstrated that Feraccru®/Accrufer® offers a simple, well tolerated and efficacious oral treatment alternative to IV iron therapy, without the need for hospital-based administration · Long term phase of AEGIS-CKD study shows haemoglobin levels increased and maintained across 52 weeks of Feraccru® therapy in patients with chronic iron deficiency anaemia (IDA) · Swissmedic approved Feraccru® to treat iron deficiency with or without anaemia in adults Financial highlights · Revenues of £0.7 million (2018: £11.9 million) · Loss for the year of £8.8 million (2018: £1.8 million) · Net cash of £4.1 million (2018: £9.8 million) Post-period highlights · Exclusive licence agreement with Beijing Aosaikang Pharmaceutical Co. Ltd ("ASK Pharm") for the development and commercialisation of Feraccru®/Accrufer® in China · Deal highlights: o US$11.4 million upfront licence payment to Shield o Up to US$51.4 million in development and sales milestones o Ongoing tiered double-digit royalties on net sales payable to Shield o ASK Pharm to be responsible for, and cover costs of, all development and regulatory activity · Agreed to repay €2.5 million milestone to Norgine, originally received in respect of AEGIS-H2H clinical study in the first half of 2019 Commenting on the preliminary results, Tim Watts, CEO of Shield Therapeutics plc, said: "I am honoured to have been appointed as CEO at this important time for Shield. 2019 was a very successful year for Shield with the approval of Accrufer® by the FDA for marketing in the USA and the positive long-term results from the AEGIS-H2H clinical study, and the conclusion in January 2020 of the licence agreement with ASK Pharm in China. Our top priority is now to conclude a partnering agreement in the USA during 2020." For further information please contact: Shield Therapeutics plc Tim Watts, Chief Executive Officer Nominated Adviser and Joint Broker Peel Hunt LLP James Steel/Dr Christopher Golden Joint Broker finnCap Ltd Geoff Nash/Matt Radley/Alice Lane Financial PR & IR Advisor Walbrook PR Paul McManus/Lianne Cawthorne www.shieldtherapeutics.com +44 (0)20 7186 8500 +44 (0)20 7418 8900 +44 (0)20 7220 0500 +44 (0)20 7933 8780 or shield@walbrookpr.com +44 (0)7980 541 893 / +44 (0)7584 391 303 About Shield Therapeutics plc Shield is a de-risked, commercial stage, specialty pharmaceutical company delivering innovative pharmaceuticals to address patients' unmet medical needs. The Company's clear purpose is to develop products that help patients become people again, enabling them to enjoy the things that make a difference in their everyday lives. The Group's lead product, Feraccru®/ Accrufer® has exclusive IP rights until the mid-2030s and is approved for the treatment of iron deficiency with or without anaemia in adults in the European Union, the United States and Switzerland. In Europe it is marketed as Feraccru® with commercialisation led by Norgine BV and in the USA the product will be marketed as Accrufer® with Shield currently in the process of selecting a commercialisation partner. Shield also has an exclusive licence agreement with Beijing Aosaikang Pharmaceutical Co. Ltd for the development and commercialisation of Feraccru®/Accrufer® in China, Hong Kong, Macau and Taiwan. For more information please visit www.shieldtherapeutics.com About Feraccru®/Accrufer® Feraccru®/Accrufer® is a novel, stable, non-salt based oral therapy for adults with iron deficiency with or without anaemia that has been shown to be an efficacious and well-tolerated therapy in a range of controlled phase 3 trials, including positive results from the Phase IIIb AEGIS-H2H study in which Feraccru®/Accrufer® demonstrated it was non-inferior in delivering improvements in haemoglobin levels compared to intravenously-administered (IV) Ferinject®/Injectafer® (ferric carboxymaltose). Feraccru®/Accrufer® therefore offers a compelling alternative to IV iron for those patients unable to tolerate salt-based oral iron therapies and wish to avoid the complexities of infusion-based iron therapies. When salt-based oral iron therapies are ingested they can cause a range of mild-to-severe gastrointestinal tract (GI) adverse events, including nausea, bloating and constipation through the release and subsequent reactivity of free iron in the GI tract, leading to poor tolerability, reduced patient compliance and ultimately treatment failure. Feraccru®/Accrufer® is not an iron salt and, as a result, it does not routinely cause the same treatment-limiting intolerance issues of saltbased iron therapies, whilst the iron from the ferric maltol molecule can be readily absorbed. Prior to Feraccru®/Accrufer®, IV iron therapies were the only realistic alternative treatment option for iron deficient patients with or without anaemia intolerant of or unwilling to be treated salt-based oral iron therapies. However, use of such an invasive, costly, inconvenient and complex to administer treatment option, which is associated with potentially life-threatening and spontaneous hypersensitivity reactions, means there remains a clear unmet medical need for these patients to have access to an effective therapy that is well tolerated, convenient and does not require hospital-based administration. Feraccru®/Accrufer® meets those requirements. About Iron Deficiency The WHO states that iron deficiency is the most common and widespread nutritional disorder in the world. As well as affecting a large number of women and children in non-industrialized countries, it is the only nutrient deficiency which is also significantly prevalent in virtually all industrialised nations. There are no current global figures for iron deficiency but, using anaemia as an indirect indicator, it can be estimated that most preschool children and pregnant women in non-industrialised countries, together with at least 30-40% in industrialized countries, are iron deficient. Forward-Looking Statements This press release contains forward-looking statements. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements. These forward-looking statements are based on management's current expectations and include statements related to the commercial strategy for Feraccru®/ Accrufer® These statements are neither promises nor guarantees, but involve known and unknown risks and uncertainties, many of which are beyond our control, that may cause actual results, performance or achievements to be materially different from management's expectations expressed or implied by the forward-looking statements, including, but not limited to, risks associated with, the Group's business and results of operations, competition and other market factors. The forwardlooking statements made in this press release represent management's expectations as of the date of this press release, and except as required by law, the Group disclaims any obligation to update any forward-looking statements contained in this release, even if subsequent events cause our views to change. Chairman's statement I am delighted to report in my second statement as Chairman that 2019 has been a successful year for Shield Therapeutics during which we have started to repay the faith investors have shown in the Group and its lead product. 2018 was a challenging year but, by the end of that year, the Group was poised for success. Feraccru had been out-licensed in September 2018 to Norgine for commercialisation in Europe and the £11 million upfront license payment received from that deal gave the Group the cash runway needed for the next phase of the business development. Also by the end of 2018, the FDA had accepted the filing of Feraccru®/Accrufer® for marketing approval in the United States. The most significant achievement in 2019 was the approval of Accrufer® in July by the USA's FDA. The marketing approval in the USA is for the broad label for the treatment of iron deficiency in adults, the same as in Europe, and this opens up the potential for Accrufer® to access a substantial patient population in the world's most valuable pharmaceutical market. We also received the results of the AEGIS-H2H (head-to-head) clinical study in which we compared Feraccru®/Accrufer® with the leading IV iron therapy. Although the study did not, as originally thought, statistically demonstrate non-inferiority at twelve weeks and, as a result we have agreed to repay the €2.5 million milestone received from Norgine, it did generate substantial data that should be very helpful in support of pricing and reimbursement initiatives. I explained in my statement in the 2018 Annual Report how the Group's commercialisation strategy had been changed to focus on out-licensing the product. This was first demonstrated by the Norgine license announced in 2018. During 2019 the Group has continued to follow that strategy and we were delighted to announce in early January 2020 that we have out-licensed Feraccru® in China to Beijing Aosaikang Pharmaceutical Co. Ltd ("ASK Pharm"). ASK Pharm has an excellent track record of product development and commercialisation in China and they will be an ideal partner to secure the marketing approval of Feraccru® in China and then to exploit it. Having secured the approval of Accrufer® in the USA, the Company is in the process of identifying a suitable licence partner capable of optimising the commercial prospects for the product in that market. Commercialisation in Europe is still in its early stages as, in the major European markets, the product is still only marketed in Germany and England with pricing and reimbursement applications currently being prepared for France, Italy and Spain, and the other countries in the UK. However, Norgine's sales progress in these two markets is good with 2019 sales volumes almost 70% greater than those in 2018. The achievements over the last eighteen months have been a vindication of the Group's strategy. The identification of Feraccru®'s potential over ten years' ago, followed by the clinical study programme in challenging patient populations in inflammatory bowel disease, chronic kidney disease and the head-to-head study have resulted in an effective product with a good side-effect profile for use in a broad range of patients, which is now approved in Europe, where it is already marketed, the USA and with excellent prospects of approval in China and elsewhere. Based on current cash flow forecasts, the Board believes the cash runway extends into the first quarter of 2021 and there is therefore a material uncertainty which may cast significant doubt on the Group's ability to continue as a going concern. However we are confident that further financing will be secured, either from future out-licensing opportunities in the US and elsewhere or from other forms of finance such as royalty financing. None of this can happen without the commitment and expertise of the Group's employees. As I write this, the world is struggling with the coronavirus emergency. Although Shield has not been affected as badly as many businesses, the lockdown in the UK has inevitably made life more difficult for our employees and I thank them sincerely for their willing perseverance and continuing contribution to the Group's activities and objectives. In April 2020 Carl Sterritt announced his decision to resign as Chief Executive Officer. I would like to reiterate my thanks to Mr Sterritt for the substantial contributions that he made to Shield since he founded the Company and I wish him and his family all the best for the future. I am very pleased that Tim Watts, formerly Chief Financial Officer, has been appointed as the new CEO and I wish him every success in the role. Finally, I have notified the Board that I will be standing down from the Board and not seeking reelection as a Director at the 2020 Annual General Meeting. I am proud to have been able to work with the Company over the last four years during a time when it has been transformed from a development company into a full commercial company with Feraccru®/Accrufer® approved in both Europe and the United States. I wish the Company every success in the future. James Karis, Non-Executive Chairman Chief Executive Officer's statement and financial review This is my first statement as Shield's CEO and I am pleased to report that 2019 was a very successful year for the Group and its potential has begun to be realised. The most significant event during the year was the approval of Accrufer® by the US FDA for marketing in the USA but we also received positive long term results from the head-to-head clinical study which compared Feraccru®/Accrufer® with the leading intravenous (IV) iron therapy. By the end of 2018 we had laid the foundations for success in 2019. In Europe, the European Medicines Agency had expanded the label for Feraccru® to encompass the treatment of iron deficiency in adults, with or without anaemia, and we subsequently out-licensed Feraccru® to Norgine for commercialisation in Europe, Australia and New Zealand. In the USA, towards the end of the year the FDA had accepted our filing of the US New Drug Application (NDA) for the marketing approval of Accrufer® (the brand name in the USA). Regulatory and clinical studies In the first half of 2019 much of our efforts were targeted at supporting the NDA process and responding as necessary to questions arising from the FDA. We were delighted in July 2019 when we received confirmation from the FDA that it had approved Accrufer® with the same broad label as in Europe, namely the treatment of iron deficiency in adults. With the approval of this broad label Accrufer® has taken a big step towards exploiting the very large commercial opportunity in the USA, the world's largest and most attractively reimbursed pharmaceutical market. Market research suggests that the prescription market for iron replacement therapy in the USA is worth over $1.0bn annually. There are between 9 million and 10 million patients in the USA who suffer from iron deficiency anaemia and we estimate that potentially two to three times this number require treatment for iron deficiency. In April 2019 the Swiss Agency for Therapeutic Products (Swissmedic) approved a major extension of the approved indication for Feraccru® to include treatment of all adults with ID with or without anaemia, effectively aligning the label with that in the European Union and expanding the commercial opportunity for Feraccru®. This extension triggered the payment to Shield of a one-off £0.1 million milestone from our Swiss commercialisation partner, Ewopharma AG (EWO). EWO are currently negotiating pricing and reimbursement with the Swiss authorities. During 2019 the results of the AEGIS-H2H clinical study became available although the Group announced in March 2020 that it had initiated a review of the analysis of the data which is currently ongoing. This study compared Feraccru® to Ferinject®, the market-leading intravenously-delivered iron replacement therapy. The AEGIS-H2H study was a multi-national Phase IIIb randomised, active-controlled trial in inflammatory bowel disease (IBD) patients with iron deficiency anaemia (IDA) and whose haemoglobin (Hb) measurements were as low as 8.0g/dL. The objective of the study was to assess whether the effect of Feraccru® on Hb response (defined by the protocol as normalisation of Hb or a >2g/dL rise in Hb from baseline) was comparable to the effect seen with IV treatment at 12 weeks. This was followed by a 40-week extension phase, during which eligible subjects continued treatment with Feraccru® or received IV therapy in line with clinical need. The key findings of the study were: · · · The study did not meet its overall primary end point of non-inferiority at twelve weeks because this was clearly not achieved in the "intention to treat" (ITT) population, although there was a high response rate; IDA re-occurred at least once in approximately 39% (49) of the subjects in the IV arm of the study following the initial treatment with IV therapy, requiring a total of 69 additional IV iron infusions to be administered; and Feraccru®/Accrufer® was effective and generally well tolerated over 52 weeks of treatment with a side effect profile consistent to that seen in previous placebo-controlled studies. The positive long term data provides further evidence to support results of earlier clinical studies that Feraccru® is effective and well tolerated over 52 weeks, even in patients who have been unable to tolerate oral iron salts previously. It also shows that Feraccru® is a real oral alternative to IV iron for patients with IDA and it can prevent the need for repeated IV infusions. The outcome of this study is therefore very helpful for health economics evaluations and will also be beneficial in pricing and reimbursement negotiations in countries around the world as it will help to justify attractive pricing. The results of the ongoing review of the data analysis will be announced when completed. Early in 2019 we announced positive results from the from the open-label extension phase of the AEGIS-CKD (chronic kidney disease) clinical study of Feraccru®. The AEGIS-CKD study was a pivotal phase III randomized, placebo-controlled, double-blind trial in CKD patients with IDA, which demonstrated superiority of Feraccru® when the change in haemoglobin (Hb) from baseline after 16 weeks of treatment with oral Feraccru® (30mg twice daily) was compared to placebo. This was followed by a 36-week open-label extension phase during which all subjects were treated with Feraccru®. For those patients initially treated with Feraccru®, Hb levels were maintained over this 36-week follow-up period and the treatment continued to be well tolerated. In addition, subjects who switched to Feraccru® for the open-label phase showed a similar mean rise in Hb over their first 16 weeks of Feraccru® treatment when compared to those initially treated with Feraccru® (0.79g/dl v 0.57g/dl). These data further support our hypotheses that Feraccru® is consistently well absorbed and that chronic treatment with Feraccru® can maintain Hb levels. As previously shown in patients with IDA associated with IBD, this study in CKD patients demonstrates that Feraccru® is also well tolerated in a group of patients whose IDA is caused by a very different primary disease. Both the European and US regulatory authorities require that the Group conduct a paediatric clinical study in children up to 18 years old. For small children and infants a liquid formulation is required rather than the capsule which is the formulation used in the adult patient population. A crucial first step is therefore to formulate a suitable liquid formulation and then to prove its equivalence to the capsule. We have been working on developing this formulation during 2019 but the process has taken somewhat longer than we originally envisaged. However, we now have a formulation and, subject to the coronavirus pandemic situation, the equivalence study will be conducted towards the end of 2020. Commercialisation In Europe we licensed Feraccru® to Norgine for commercialisation in September 2018. The first few months after this were taken up with the transfer to Norgine of knowledge, technical information and the Marketing Authorisation (MA), as well as a full suite of educational and marketing materials. During this period Norgine's own sales representatives were also trained on the product, resulting in commercial activities in Germany and England commencing in earnest in the first quarter of 2019. In Europe products are often commercialised first in these two markets as companies are able to set the selling prices and Feraccru® has been able to achieve attractive pricing levels in both markets. In most other European markets, and in particular the large markets of France, Italy and Spain, as well as the remaining countries in the UK, it is necessary to submit pricing and reimbursement applications to the relevant authorities and for these to be agreed before the product receives reimbursement and therefore can be commercialised effectively. With the positive long term results from the AEGIS-H2H study comparing Feraccru® with Ferinject®, the market leading IV iron therapy, these pricing applications are now being prepared for filing with the authorities in France, Italy and Spain by Norgine using the AEGIS-H2H results to support the applications for reimbursement. These pricing and reimbursement processes do take time however, so we do not expect launches to occur in these markets before 2021. In both Germany and England, in order to establish the product before broadening promotion to other indications, the initial promotional focus by Norgine has been on IDA in IBD, targeting gastroenterology specialists working in hospitals and office clinics. Norgine has a significant number of sales representatives and key account managers promoting Feraccru® in Germany and England and these teams are supported by medical and reimbursement specialists. Progress to date has been encouraging with combined in-market pack sales in these two markets in 2019 already being almost 70% higher than 2018. As is usual with prescription pharmaceutical commercialisation in Europe, early growth in Germany has been stronger than that in England as Feraccru® benefits from nationwide reimbursement in Germany, whereas in England each of the nearly 200 Clinical Commissioning Groups (CCGs) has its own formulary, with each requiring new products to be reviewed before reimbursement is approved. This involves the submission of formulary applications for approval by each CCG, inevitably slowing down the initial uptake of a product across England. To date around one-third of the hospital trusts in England have approved reimbursement of Feraccru®. Norgine is continuing to work on persuading the remaining hospital trusts to place Feraccru® on their formularies. Scotland, Wales and Northern Ireland have their own procedures and, with the AEGIS-H2H data available, Norgine is in the process of submitting applications to these authorities. Norgine has also begun the regulatory approval process in Australia where the product could be approved towards the end of 2020. During 2019 we started a process to identify a commercialisation partner for Accrufer® in the US market. Having appointed a sector-specific adviser to assist with the process, we started by identifying and contacting a long list of potential partners who might be considered appropriate for the commercialisation of Accrufer® in the USA. We have had considerable interest in Accrufer® from a range of US-based companies, ranging from relatively small companies which focus on single therapeutic areas to larger organisations which span several of the therapeutic areas in which Accrufer® is relevant. We are continuing to work hard to identify the optimal combination of partner, from a capability perspective, and financial terms. I look forward to being able to update the market in the coming months. Also during 2019 we were working on finding a partner for China and were able to announce in early January 2020 that we have has entered into an exclusive licence agreement for Feraccru®/Accrufer® with Beijing Aosaikang Pharmaceutical Co. Ltd ("ASK Pharm") in China, Hong Kong, Macau and Taiwan. Shield received an upfront payment of US$11.4 million and is eligible to receive a further US$11.4 million upon regulatory approval of Feraccru®/Accrufer® in China. It is probable that a further clinical study in Chinese patients will be required before the authorities approve the product. ASK Pharm will be responsible for the design, conduct and costs of this study. Once the product is on the market Shield will receive tiered ongoing royalties of 10% or 15% of net sales and up to US$40 million in milestone payments upon the achievement of specified cumulative sales targets. ASK Pharm will be responsible for the costs of manufacturing and distribution. Based in Nanjing, Jiangsu Province, ASK Pharm was founded in 2003 and is listed on the Shenzhen stock exchange. ASK Pharm is an integrated pharmaceutical enterprise that focuses on the GI and oncology therapeutic areas, being one of China's leading manufacturers of proton pump inhibitor and oncology medications. With a market capitalisation of approximately CNY15 billion (US$2.2 billion), 2018 sales revenues in China equivalent to more than US$560 million and over 1,000 sales representatives, ASK Pharm is both well-resourced and very well positioned to capitalise on the Feraccru®/Accrufer® opportunity in China, one of the world's largest and fastest growing prescription pharmaceutical markets. I am delighted that we have been able to partner with ASK Pharm in China. It is an ambitious and successful pharmaceutical company with an excellent track record of product development and commercial success. Its established product development and commercial infrastructure and expertise in China should speed the regulatory approval and drive subsequent sales of Feraccru®/Accrufer®. The market in China for novel prescription pharmaceuticals continues to grow rapidly and this agreement will mean more patients with iron deficiency will benefit from Feraccru®/Accrufer® therapy. We very much look forward to working with ASK Pharm and supporting them as it advances the Feraccru®/Accrufer® franchise in China. Intellectual Property (IP) We continue to work on strengthening our intellectual property, including patents. During 2019, both the US and Japanese patent offices have allowed a "treatment use" patent protecting Feraccru® until January 2035. This application (entitled "Dosage regimen of ferric trimaltol") allowed claims relating to the administration of Feraccru® twice-daily on an empty stomach, where the percentage of ferric trimaltol is at least 60% of the combined weight of ferric trimaltol and excipients. More recently, in April 2020, the Chinese Patent Office has allowed our composition of matter patent. We also continue to defend our patents robustly. As previously reported Teva has raised objections with the European Patent Office (EPO) to the Group's patents (#2 668 175 and # 3 160 951) which cover "Process for preparing an iron hydroxypyrone" and "Crystalline forms of ferric maltol" respectively. On 14 March 2019 the Opposition Division of the European Patent Office (EPO) decided in favour of Shield in respect of the former patent as amended. However, as anticipated, in June 2019 Shield received notice that Teva has filed a notice of appeal to the EPO's decision. Currently no date has been set for the appeal hearing. The EPO had set a date of 23 June 2020 for the oral hearing in respect of patent # 3 160 951951 but this has now been postponed due to the coronavirus pandemic. Pipeline - PT20 (phosphate binder) Although we were not able to prioritise PT20 for development during 2018 and 2019, we plan to re-start this programme. We continue to believe that PT20 has the potential to be a significant product in the phosphate binder market. This market continues to grow and, within it, the new iron-based phosphate binders are growing particularly rapidly. PT20, which is iron-based, has characteristics which could give it competitive advantages over existing iron-based products. PT20 has already completed one pivotal clinical study giving us significant confidence in the potential of the product. One further pivotal Phase III study is required to be carried out. Initially we will develop a new formulation of PT20 which will allow the next Phase III study to be carried out and which would be suitable for commercial use. We anticipate that the formulation development work and manufacturing clinical study material could start in the second half of 2020 and should take around 15-18 months, meaning that the Phase III study could potentially start in 2022, subject to finance being available. Brexit After the 2016 Brexit referendum result we decided to de-risk the Feraccru® supply chain by outsourcing the manufacture of the finished packs to Patheon in France. The bulk drug/active ingredient is manufactured in the UK but it has a long shelf life and we are able to store sufficient quantities in France to avoid any risk of running out of bulk drug needed during finished goods production as a result of potential supply chain disruption at the UK or French borders. In the event that WTO tariffs are imposed, we do not believe that this would have a material impact as such tariffs would only apply to the export of our bulk drug from the UK to France. Coronavirus The business has continued to operate effectively since the introduction of the lockdown in the UK. Whilst we have closed both our London and Newcastle offices, all of our employees are able to continue working from home successfully. Generally, we are finding that the businesses with which we have close relationships are also operating effectively and so we have seen minimal disruption to our commercial progress. Outlook Having secured FDA approval of Accrufer®, and with Feraccru® sales in Germany and the UK beginni