TIDMSTX
RNS Number : 8107I
Shield Therapeutics PLC
17 August 2021
Shield Therapeutics plc
("Shield" or the "Company" or the "Group")
Half-year Report
Interim Report for the six months ended 30 June 2021
Six month period dominated by preparation for launch of
Accrufer(R) in US
London, UK, 17 August 2021: Shield Therapeutics plc (LSE: STX),
a commercial stage pharmaceutical company with a focus on
addressing iron deficiency with its lead product Feraccru (R)
/Accrufer (R) (ferric maltol) , announces its unaudited interim
results for the six months ended 30 June 2021.
Operational Highlights (including post-period end)
-- Accrufer (R) launched in US on 1 July 2021
-- 51% growth in Feraccru(R) sales volumes in Europe compared with H2 2020
-- Chinese authorities confirm regulatory approval pathway for Feraccru(R) in China
-- First stage of Feraccru(R)/Accrufer(R) paediatric study completed
-- License deal for development and commercialisation of
Accrufer(R) in Republic of Korea secured (August 2021)
Financial Highlights
-- Revenues of GBP0.5 million (H1 2020: GBP8.9 million)
-- Loss for the period of GBP7.3 million (H1 2020 profit: GBP3.1 million)
-- Net cash outflow from operating activities of GBP8.0 million
(H1 2020: GBP2.0 million inflow)
-- GBP27.7 million net proceeds from placing, subscription and open offer in March 2021
-- Cash balance at 30 June 2021 GBP22.6 million (31 December 2020: GBP2.9 million)
Commenting on the interim results, Greg Madison, CEO of Shield,
said "The first six months of 2021 have been a truly pivotal and
exciting period for Shield which opens up the prospect of
substantially greater shareholder value for investors. During the
first quarter the Group's US strategy transitioned from an
out-licence approach to one of launching Accrufer (R) ourselves in
the US, and the successful fundraise in March 2021 provided the
financial resources for the launch. In the second quarter a huge
amount of planning and implementation was completed which allowed
us to launch Accrufer (R) on 1 July 2021 and I am pleased with
progress to date. With Accrufer (R) now available in the US, and
Feraccru(R) available in Europe, I am excited about the long-term
prospects for our product(s) and Shield."
Analyst briefing
A briefing open to analysts will take place remotely via video
conference call today, Tuesday, 17 August 2021 at 2.00pm BST/9.00am
EST. If you would like the details of this call please contact
Walbrook PR on shield@walbrookpr.com.
For further information please contact:
Shield Therapeutics plc www.shieldtherapeutics.com
Greg Madison, CEO +44 (0) 191 511 8500
Hans-Peter Rudolf, CFO
Nominated Adviser and Joint Broker
Peel Hunt LLP
James Steel/Christopher Golden +44 (0)20 7418 8900
Joint Broker
finnCap Ltd
Geoff Nash/Alice Lane/George Dollemore +44 (0)20 7220 0500
Financial PR & IR Advisor
Walbrook PR +44 (0)20 7933 8780 or shield@walbrookpr.com
Paul McManus/ Lianne Cawthorne /
Alice Woodings
About Shield Therapeutics plc
Shield is a commercial stage, pharmaceutical company with a
focus on addressing iron deficiency with its lead product
Feraccru(R)/Accrufer(R) (ferric maltol), a novel, stable, non-salt
based oral therapy for adults with iron deficiency with or without
anaemia.
Shield's lead product, Feraccru(R)/Accrufer(R), has been
approved for use in the United States, European Union, UK,
Switzerland and Australia and has exclusive IP rights until the
mid-2030s. Accrufer(R) has been launched in the US in 2021 through
a highly experienced sales and marketing team. Feraccru(R) is being
commercialised in the UK and European Union by Norgine B.V., who
also have the marketing rights in Australia and New Zealand. Shield
also has exclusive licence agreements with Beijing Aosaikang
Pharmaceutical Co., Ltd., for the development and commercialisation
of Feraccru(R)/Accrufer(R) in China, Hong Kong, Macau and Taiwan;
and with KOREA PHARMA CO.,LTD for development and commercialisation
in the Republic of Korea.
For more information, please visit www.shieldtherapeutics.com.
Follow Shield on Twitter @ShieldTx
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(R)/ Accrufer(R) 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
forward-looking 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.
Operational Review
Commercialisation of Feraccru(R)/Accrufer(R)
USA
Accrufer(R) was launched in the US on 1 July 2021 in line with
prior guidance. During the second quarter of 2021, a sales force
including 30 sales representatives was recruited and trained and
started to contact key prescribers. Due to the ongoing impact of
the COVID pandemic and the emergence of the delta variant in the
US, face-to-face contact with clinicians has been limited in the
initial phase of launch. Discussions are ongoing with payers
regarding formulary placement of Accrufer(R) and will continue over
the next several months.
Europe/Australia
Norgine BV is our license partner for commercialisation of
Feraccru(R) in most of Europe, Australia and New Zealand. Having
initially been focused on Germany and the UK, Norgine took on
responsibility for selling in the Nordic markets during the second
half of 2020 (previously undertaken by AOP Orphan) and also
launched the product in Belgium and Luxembourg in early 2021. The
number of Feraccru(R) packs sold by Norgine in Europe increased by
51% in H1 2021 compared with H2 2020 and by 57% compared with H1
2020.
Norgine continues to focus on driving commercial adoption in
countries where Feraccru (R) has already gained reimbursement while
looking to obtain reimbursement in further countries, with a
particular focus on the major European markets of France, Italy and
Spain.
In March 2021, the Australian Therapeutics Goods Administration
(the local regulatory authority for medicinal products) registered
Feraccru(R) in the Australian Register of Therapeutic Goods to
treat iron deficiency with or without anaemia in adults.
China
Feraccru(R) is not yet approved in China. The Chinese regulatory
authority (CDE) has approved an Investigational New Drug (IND)
application for Feraccru(R) which was submitted by our Chinese
licence partner, ASK Pharm, to conduct two studies which CDE has
confirmed are sufficient to support a New Drug Application: a
12-week Phase III study in 120 Inflammatory Bowel Disease (IBD)
patients and a pharmacokinetic/pharmacodynamic study to be
conducted in parallel. Clinical supplies have been manufactured and
released for the study, and ASK Pharm has started screening
patients. The study could be completed by the end of 2022 and
marketing approval and product launch could follow by late 2023. On
approval, Shield is due to receive an $11.4 million milestone
payment from ASK Pharm and tiered royalties of 10% or 15% depending
on the level 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 all clinical and
regulatory costs and activities as well as all manufacturing and
distribution costs of goods sold in the territory.
Other markets
We announced a licence deal on 12 August 2021 with KOREA PHARMA
CO. LTD to develop and commercialise Accrufer(R) in South Korea.
The terms of the deal includes an upfront payment of GBP500,000 and
will be entitled to a further GBP1.5 million on first sale in
Korea, 15% royalties and up to GBP4 million in potential sales
milestones. We are also in early discussions with potential
partners in several other countries.
Product development
Shield has agreed a Feraccru (R) /Accrufer (R) Paediatric
Investigational Plan (PIP)/Pediatric Development Plan (PDP) with
the EMA/FDA, respectively, both culminating in the conduct of a
study to evaluate the safety, tolerability and efficacy of the
product in infants, children and adolescents. The first stages were
to develop an age-appropriate formulation suitable for small
children and infants and to demonstrate therapeutic equivalence
with the adult capsule formulation. Both these stages were
completed satisfactorily in the first half of 2021 and the main
study is expected to start recruiting subjects in September
2021.
We have also started work on the development of a new
formulation of PT20, our development stage phosphate binder.
Outlook
The outlook for the second six months of 2021 is dominated by
the launch of Accrufer(R) in the US. The focus will be on building
awareness among healthcare providers, initiating prescriptions for
appropriate patients to generate clinical experience, and extending
patient access through negotiations with payer groups. In Europe,
Feraccru(R) sales are expected to continue to grow steadily in
Germany, the UK, Scandinavia and Belgium whilst progress is made on
pricing and reimbursement in other countries. In China ASK Pharm
will start the Phase III study required for approval while Shield
will start recruiting patients into the paediatric study.
Financial Review
Revenue
Revenue in the first six months of 2021 (H1 2021) was GBP0.5
million (H1 20120: GBP8.9 million). The GBP0.5 million revenue
arises entirely from royalties from Norgine in respect of sales of
Feraccru(R) in Europe. In H1 2020, GBP8.7 million came from the
upfront payment received from ASK Pharm on entering into the
license agreement for the development and commercialisation of
Feraccru(R) in China. The remaining GBP0.2 million arose from
royalties under the Norgine agreement.
Cost of sales
Cost of sales in H1 2021 amounted to GBP0.4 million (H1 2020:
GBP1.0 million). The H1 2021 cost of sales comprises manufacturing
costs of the packs sold in Europe and the 5% royalty on Norgine's
net sales which is payable to Vitra Pharmaceuticals Ltd (Vitra)
under the 2010 Asset Purchase Agreement. In H1 2020 the cost of
sales of GBP1.0 million was predominantly a payment to Vitra of 10%
of the licence upfront received from ASK Pharm. Vitra was the
original owner of the intellectual property underpinning
Feraccru(R) and, under the terms of the 2010 Asset Purchase
Agreement, is entitled to receive either a 5% royalty on net sales
or 10% of any licence upfront and sales milestones. For the Norgine
licence agreement Vitra chose to receive a royalty of 5% of net
sales; for the ASK Pharm agreement Vitra opted to receive 10% of
the upfront receipt and any subsequent milestones.
Selling, general and administrative expenses
Selling, general and administrative expenses were GBP6.1 million
in H1 2020 (H1 2020: GBP4.8 million) of which GBP1.3 million (H1
2020 GBP1.3 million) is the amortisation of intangible assets.
Excluding amortisation, the underlying costs increased from GBP3.5
million in H1 2020 to GBP4.8 million in H1 2021 but the H1 2020
expenses included significant one-off costs related to the China
licence transaction and to the resolution of the issues which arose
on the AEGIS-H2H study in March 2020. The underlying increase from
H1 2020 to H1 2021 is largely due to the pre-launch costs in the
US.
Research and development
In H1 2021, GBP1.6 million (H1 2020: GBP0.7 million) development
costs were incurred. The increase in H1 2021 is predominantly due
the paediatric study. Stage 1 of the paediatric study, during which
the child-appropriate suspension formulation was tested for
equivalence with the adult capsule was started in H2 2020 and
completed in H1 2021. H1 2021 also saw expenditure on the set up of
Stage 2 during which subjects will be dosed with the new suspension
formulation. The bulk of the H1 2020 costs were incurred on
employee and contractor costs, with relatively little external
spend.
Tax
The tax credit of GBP0.3 million (H1 2020: GBP0.4 million)
comprises the anticipated UK R&D tax credit in respect of the
first half of 2021. The H1 2020 tax credit included GBP0.2 million
UK R&D tax credit in respect of the first half of 2020 and a
reduction in the prior-year tax charge for Shield TX (Switzerland)
AG as a result of the final tax returns being completed (GBP0.2
million).
Loss for the period
The loss for H1 2021 was GBP7.3 million. In H1 2020 a profit of
GBP3.1 million was recorded as a result of the GBP8.7 million
upfront received from ASK Pharm on the signing of the Chinese
licence transaction in January 2020.
Balance sheet
Intangible assets at 30 June 2021 were GBP26.0 million (31
December 2020: GBP27.3 million). The components of this are GBP16.5
million (31 December 2020: GBP17.4 million) relating to the
acquisition costs of PT20, the phosphate binder product in our
development portfolio; GBP8.1 million (31 December 2020: GBP8.4
million) relating to capitalised Feraccru(R) development
expenditure, and GBP1.3 million (31 December 2020: GBP1.4 million)
expenditure on strengthening the Group's intellectual property. The
reductions in the balances all relate to amortization charged in
the period.
Inventory at 30 June 2021 amounted to GBP1.4 million which
mainly comprises GBP1.1 million of raw materials and GBP0.3 million
finished product. The GBP1.4 million inventory balance at 31
December 2020 was entirely raw materials.
Trade and other receivables increased to GBP2.0 million at 30
June 2021 compared with GBP0.6 million at 31 December 2020. A
substantial part of the increase relates to prepaid expenses in the
US operation.
The current tax asset of GBP0.3 million (31 December 2020:
GBP0.3 million) represents anticipated R&D tax credits.
Following the equity fundraise completed in March 2021, which
raised GBP27.7 million net of expenses, cash at 30 June 2021 was
GBP22.6 million (31 December 2020: GBP2.9 million).
Trade and other payables at 30 June 2021 were GBP1.3 million,
slightly lower than the GBP1.5 million at 31 December 2020.
Other liabilities reduced from GBP0.8 million at 31 December
2020 to GBP0.1 million at 30 June 2021. The balance at 31 December
2020 included a tax liability of GBP0.5 million in respect of
Shield TX (Switzerland) AG which was paid during the period.
Cash flow
The net cash outflow from operations in H1 2021 was GBP8.0
million, compared with an inflow of GBP2.0 million in H1 2020 which
was attributable to the upfront received in January 2020 from ASK
Pharm. The H1 2021 loss for the period was GBP7.3 million but,
after adjusting for non-cash items, the actual cash outflow from
this loss was GBP5.4 million. Working capital cash outflows
amounted to GBP2.6 million caused mainly by prepaid expenses in the
US operations and the reduction in trade payables and other
liabilities.
Following the receipt of GBP27.7 million from the March 2021
fundraise and including GBP0.1 million of other minor movements,
the cash inflow for the period was GBP19.6 million.
Going concern
For the reasons set out in Note 3 below, the Directors believe
that it remains appropriate to prepare the financial statements on
a going concern basis.
Financial outlook
As explained above the focus in the US will be on building
awareness among healthcare providers, initiating prescriptions for
appropriate patients to generate clinical experience, and extending
patient access through negotiations with payer groups. Over the
course of the next six to twelve months, we expect to increase
payer coverage of Accrufer(R) by signing reimbursement agreements
with various providers. As we increase payer coverage, we will be
able to accelerate revenue growth beyond the increases in sales
volumes, which will then determine the extent of further
investments in related commercial activities. We expect steady
growth in European royalties from Norgine. Expenditure is expected
to increase significantly as the US launch gathers momentum and
recruitment in the paediatric study gets under way. Having signed
the Korea licence transaction, we expect to recognise the GBP500k
upfront as revenue in the second half of 2021.
Consolidated statement of profit and loss and other
comprehensive income
for the six months ended 30 June 2021
Six months
ended Year
30 June Six months
ended ended
2021 30 June 31 December
(unaudited) 2020 2020
GBP000 (unaudited) (audited)
Note GBP000 GBP000
------------------------------------------ ----- -------------- -------------- -------------
Revenue 4 481 8,919 10,387
Cost of sales (411) (1,011) (1,354)
------------------------------------------ ----- -------------- -------------- -------------
Gross profit 70 7,908 9,033
Operating costs - selling, general
and administrative expenses 5 (6,121) (4,834) (8,608)
Operating (loss)/profit before
research and development expenditure (6,051) 3,074 425
Research and development expenditure (1,592) (681) (2,579)
Operating (loss)/profit (7,643) 2,393 (2,154)
Financial income 63 358 269
Financial expense (3) (3) (1)
------------------------------------------ ----- -------------- -------------- -------------
Profit/(loss) before tax (7,583) 2,748 (1,886)
Taxation 6 300 376 (744)
------------------------------------------ ----- -------------- -------------- -------------
(Loss)/profit for the period (7,283) 3,124 (2,630)
------------------------------------------ ----- -------------- -------------- -------------
Attributable to:
Equity holders of the parent (7,283) 3,124 (2,630)
Other comprehensive income
Items that are or may be reclassified
subsequently to profit or loss:
Foreign currency translation differences
- foreign operations 58 (29) (16)
------------------------------------------ ----- -------------- -------------- -------------
Total comprehensive income/(expenditure)
for the period (7,225) 3,095 (2,646)
------------------------------------------ ----- -------------- -------------- -------------
Attributable to:
Equity holders of the parent (7,225) 3,095 (2,646)
Total comprehensive income/(expenditure)
for the period (7,225) 3,095 (2,646)
------------------------------------------ ----- -------------- -------------- -------------
Earnings per share
Basic and diluted (loss)/profit GBP(0.04) GBP0.03
per share 7 GBP(0.02)
------------------------------------------ ----- -------------- -------------- -------------
Group balance sheet
at 30 June 2021
30 June 30 June 31 December
2021 2020 2020
(unaudited) (unaudited) (audited)
Note GBP000 GBP000 GBP000
------------------------------- ----- -------------- -------------- -------------
Non-current assets
Intangible assets 8 26,016 28,641 27,266
Property, plant and equipment 59 5 32
------------------------------- ----- -------------- -------------- -------------
26,075 28,646 27,298
------------------------------- ----- -------------- -------------- -------------
Current assets
Inventories 9 1,435 1,385 1,379
Trade and other receivables 1,996 543 619
Current tax asset 300 1,152 292
Cash and cash equivalents 22,602 6,515 2,940
------------------------------- ----- -------------- -------------- -------------
26,333 9,595 5,230
------------------------------- ----- -------------- -------------- -------------
Total assets 52,408 38,241 32,528
------------------------------- ----- -------------- -------------- -------------
Current liabilities
Trade and other payables (1,281) (2,320) (1,471)
Lease liabilities - - (28)
Other liabilities (113) (454) (753)
------------------------------- ----- -------------- -------------- -------------
(1,394) (2,774) (2,252)
------------------------------- ----- -------------- -------------- -------------
Total liabilities (1,394) (2,774) (2,252)
------------------------------- ----- -------------- -------------- -------------
Net assets 51,014 35,467 30,276
------------------------------- ----- -------------- -------------- -------------
Equity
Share capital 10 3,238 1,758 1,764
Share premium 114,583 88,352 88,352
Merger reserve 28,358 28,358 28,358
Currency translation reserve 111 40 53
Retained earnings (95,276) (83,041) (88,251)
------------------------------- ----- -------------- -------------- -------------
Total equity 51,014 35,467 30,276
------------------------------- ----- -------------- -------------- -------------
Group statement of changes in equity
for the six months ended 30 June 2021
Currency
Share Share Merger translation Retained
capital premium reserve reserve earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------------- --------- --------- --------- ------------- ---------- --------
Balance at 1 January 2020 (audited) 1,758 88,352 28,358 69 (86,392) 32,145
------------------------------------- --------- --------- --------- ------------- ---------- --------
Loss for the year - - - - (2,630) (2,630)
Other comprehensive income:
Foreign currency translation
differences - - - (16) - (16)
------------------------------------- --------- --------- --------- ------------- ---------- --------
Total comprehensive expense
for the year - - - (16) (2,630) (2,646)
Transactions with owners, recorded
directly in equity
Equity-settled share-based payment
transactions 6 - - - 771 777
------------------------------------- --------- --------- --------- ------------- ---------- --------
Balance at 31 December 2020
(audited) 1,764 88,352 28,358 53 (88,251) 30,276
------------------------------------- --------- --------- --------- ------------- ---------- --------
Loss for the period - - - - (7,283) (7,283)
Other comprehensive income:
Foreign currency translation
differences - - - 58 - 58
------------------------------------- --------- --------- --------- ------------- ---------- --------
Total comprehensive expense
for the period - - - 58 (7,283) (7,225)
Transactions with owners, recorded
directly in equity
Share options exercised 15 11 - - - 26
Equity placing - new shares
issued 1,459 26,220 27,679
Equity-settled share-based payment
transactions - - - - 258 258
------------------------------------- --------- --------- --------- ------------- ---------- --------
Balance at 30 June 2021 (unaudited) 3,238 114,583 28,358 111 (95,276) 51,014
------------------------------------- --------- --------- --------- ------------- ---------- --------
Group statement of cash flows
for the six months ended 30 June 2021
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2021 2020 2020
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
---------------------------------------------------- -------------- -------------- --------------
Cash flows from operating activities
(Loss)/profit for the period (7,283) 3,124 (2,630)
Adjustments for:
Depreciation and amortization 1,290 1,281 2,705
Equity-settled share-based payment expenses 257 227 771
Financial income (63) (358) (269)
Financial expense 3 3 1
Unrealised foreign exchange losses 58 (29) (11)
Income tax 300 (376) 744
---------------------------------------------------- -------------- -------------- --------------
(5,438) 3,872 1,311
(Increase)/decrease in inventories (56) (437) (431)
(Increase)/decrease in trade and other receivables (1,685) (14) (264)
(Decrease)/increase in trade and other payables (190) (1,227) (2,075)
(Decrease)/increase in other liabilities (640) (153) 140
Change in lease assets and liabilities (28) - 8
Income tax (paid)/received - - (89)
Net cash flows from operating activities (8,037) 2,041 (1,400)
---------------------------------------------------- -------------- -------------- --------------
Cash flows from investing activities
Financial income 2 358 3
Acquisitions of intangible assets (66) (2) (23)
Net cash flows from investing activities (64) 356 (20)
---------------------------------------------------- -------------- -------------- --------------
Cash flows from financing activities
Financial expense (3) (3) (1)
Finance leases - interest payment - - (4)
Proceeds of share options exercise 26 - 6
Net proceeds from equity share placing 27,679 - -
Finance leases - capital payment - (20) (48)
---------------------------------------------------- -------------- -------------- --------------
Net cash flows from financing activities 27,702 (23) (47)
---------------------------------------------------- -------------- -------------- --------------
Net increase/(reduction) in cash 19,601 2,374 (1,467)
Effect of exchange rate fluctuations on cash
held 61 - 266
Cash and cash equivalents at beginning period 2,940 4,141 4,141
Cash and cash equivalents at period end 22,602 6,515 2,940
---------------------------------------------------- -------------- -------------- --------------
Notes
for the six months ended 30 June 2021
1. General information
Shield Therapeutics plc (the "Company") is incorporated in
England and Wales as a public limited company. The Company trades
on the London Stock Exchange's AIM market.
The Company is domiciled in England and the registered office of
the Company is at Northern Design Centre, Baltic Business Quarter,
Gateshead Quays NE8 3DF.
This interim report, which is not audited, has been prepared in
accordance with the measurement and recognition criteria of EU
Adopted International Financial Reporting Standards. It does not
include all the information required for full annual financial
statements and should be read in conjunction with the financial
statements of the Company and its subsidiaries (the "Group") as at
and for the year ended 31 December 2020. This financial information
does not constitute statutory financial statements as defined in
Section 435 of the Companies Act 2006. The comparative figures for
the year ended 31 December 2020 are not the Company's statutory
accounts for that financial year. Those accounts have been reported
on by the Company's auditor and delivered to the Registrar of
Companies. The report of the auditors was unqualified. The auditor
has reported on those accounts; their report was unqualified and
did not contain a statement under Section 498 (2) or (3) of the
Companies Act 2006; though it did include a reference to a matter
to which the auditor drew attention by way of emphasis without
qualifying their report in relation to going concern. It does not
comply with IAS 34 Interim financial reporting, as is permissible
under the rules of AIM.
The interim report was approved by the board of directors on 16
August 2021.
2. Accounting policies
The accounting policies applied in these interim financial
statements are consistent with those of the annual financial
statements for the year ended 31 December 2020, as described in
those annual financial statements.
3. Critical accounting judgments and key sources of estimation
uncertainty
In the application of the Group's accounting policies,
management is required to make judgments, estimates and assumptions
about the carrying amounts of assets and liabilities that are not
readily apparent from other sources.
The significant judgments made in relation to the financial
statements are:
Going concern
At 30 June 2021 the Group held GBP22.6 million in cash. The
Directors have considered the funding requirements of the Group
through the preparation of detailed cash flow forecasts for the
period to 31 December 2022 including the Accrufer(R) US launch
costs and prospective sales revenues and the costs of the
paediatric study. These forecasts show that the Group has
sufficient funds to allow the business to continue in operations
for at least 12 months from the date of approval of these financial
statements. The Directors have considered severe but plausible
scenarios in which sales revenues fall below base case forecasts.
In these circumstances mitigating actions such as reduction of
discretionary selling and marketing expenditure could be taken to
preserve cash. The Directors also believe that other forms of
finance, such as debt finance or royalty finance are likely to be
available to the Group.
Based on the above factors the Directors believe that it remains
appropriate to prepare the financial statements on a going concern
basis.
Development expenditure
Development expenditure is capitalised when the conditions
referred to in Note 2 of the Company's annual report are met.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised if the revision affects
only that period or in the period of the revision and future
periods if the revision affects both current and future periods.
The significant estimates which may lead to material adjustment in
the next accounting period are:
Valuation of intellectual property acquired with Phosphate
Therapeutics Limited - GBP16.5 million
The valuation of intellectual property acquired with Phosphate
Therapeutics Limited in 2016 is based on cash flow forecasts for
the underlying product, PT20, and an assumed appropriate cost of
capital and other inputs, such as the size of the market in major
markets, in order to arrive at a value in use for the asset. The
realisation of its value is ultimately dependent on the positive
outcome of a PT20 Phase III clinical study followed by regulatory
approval and successful commercialisation of the asset. Whilst
earlier PT20 clinical studies provide grounds for confidence that
the Phase III study would be successful, this cannot be guaranteed.
Work on the development of a suitable commercial formulation of the
drug product is ongoing. In the event that commercial returns are
lower than current expectations this may lead to an impairment.
Valuation of intellectual property associated with Feraccru(R)
/Accrufer(R) - GBP9.5 million
The valuation of intellectual property associated with
Feraccru(R) /Accrufer(R) (including patents, development costs and
the Company's investment in Shield TX (Switzerland) AG)) is based
on cash flow forecasts for the underlying business and an assumed
appropriate cost of capital and other inputs in order to arrive at
a fair value for the asset. The realisation of its value is
ultimately dependent on the successful commercialisation of the
asset. In the event that commercial returns are lower than current
expectations this may lead to an impairment. No impairment has been
recognised to date.
Deferred tax assets
Estimates of future profitability are required for the decision
whether or not to create a deferred tax asset. To date no deferred
tax assets have been recognised.
4. Segmental reporting
The following analysis by segment is presented in accordance
with IFRS 8 on the basis of those segments whose operating results
are regularly reviewed by the Chief Operating Decision Maker
(considered to be the Board of Directors) to assess performance and
make strategic decisions about the allocation of resources.
Segmental results are calculated on an IFRS basis.
A brief description of the segments of the business is as
follows:
-- Feraccru(R)/Accrufer(R) - development and commercialisation
of the Group's lead Feraccru(R)/Accrufer(R) product
-- PT20 - development of the Group's secondary asset
Operating results which cannot be allocated to an individual
segment are recorded as central and unallocated overheads.
Year
Six months ended
ended 31
30 June December
2021 2020
(unaudited) (audited)
------------- ------------- ------------- -------- -------------- ----------- ------------- --------
Central Central
Feraccru PT20 and Total Feraccru(R)/ PT20 and Total
(R)/ GBP000 unallocated GBP000 Accrufer(R) GBP000 unallocated GBP000
Accrufer(R) GBP000 GBP000 GBP000
GBP000
------------- ------------- ------------- -------- -------------- ----------- ------------- --------
Revenue 481 - - 481 10,387 - - 10,387
------------- ------------- ------------- -------- -------------- ----------- ------------- --------
Operating
loss (4,315) (61) (3,267) (7,643) 424 (2,047) (531) (2,154)
Financial
income 63 269
Financial
expense (3) (1)
Tax 300 (744)
------------- ------------- ------------- -------- -------------- ----------- ------------- --------
Loss for
the
period (7,283) (2,630)
------------- ------------- ------------- -------- -------------- ----------- ------------- --------
The revenue analysis in the table below is based on the country
of registration of the fee paying party. GBPNil revenue (year ended
31 December 2020: GBP9.7 million) was derived from licence upfront
and milestone payments from commercial partners. The remainder of
revenue is derived from the sale of goods.
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2021 2020 2020
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
------------------- -------------- -------------- --------------
UK - 23 -
Europe 463 203 729
Rest of the World 18 8,692 9,658
481 8,919 10,387
------------------- -------------- -------------- --------------
5. Operating costs - selling, general and administrative
expenses
Operating costs are comprised of:
Six months Six Year
ended months ended
30 June ended 31 December
2021 30 June 2020
2020
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
------------------------------------- -------------- -------------- --------------
Selling costs 2,245 137 281
General and administrative expenses 2,586 3,417 5,622
Depreciation and amortisation 1,290 1,281 2,705
6,121 4,834 8,608
------------------------------------- -------------- -------------- --------------
6. Taxation
The Group's tax credit in the 6 months ended 30 June 2021 was
GBP300,000 (H1 2020: GBP376,000), comprising anticipated R&D
tax credits in respect of claims not yet submitted for the 2021
financial year.
7. Loss per share
The basic loss per share of GBP0.04 (H1 2020 (restated): profit
per share GBP0.03) has been calculated by dividing the loss for the
period by the weighted average number of shares of 182,955,436 in
issue during the six months ended 30 June 2021 (six months ended 30
June 2020: 117,088,657).
Although there are potentially-dilutive ordinary shares these
would not serve to increase or reduce the loss per ordinary share,
as the Group is loss-making. There is therefore no difference
between the loss per ordinary share and the diluted loss per
ordinary share.
8. Intangible assets
Phosphate
Patents Development Therapeutics
Group and trademarks costs licences Total
GBP000 GBP000 GBP000 GBP000
--------------------------------------- ----------------- -------------- --------------- ---------
Cost
Balance at 1 January 2020 (audited) 2,055 9,943 27,047 39,045
Additions - externally purchased - - 23 23
Balance at 31 December 2020 (audited) 2,055 9,943 27,070 39,068
Additions - externally purchased - - 9 9
Balance at 30 June 2021 (unaudited) 2,055 9,943 27,079 39,077
--------------------------------------- ----------------- -------------- --------------- ---------
Accumulated amortisation
Balance at 1 January 2020 (audited) 574 982 7,591 9,147
Charge for the period 94 527 2,034 2,655
Balance at 31 December 2020 (audited) 668 1,509 9,625 11,802
Charge for the period 47 302 910 1,259
Disposals - - - -
Balance at 30 June 2021 (unaudited) 715 1,811 10,535 13,061
--------------------------------------- ----------------- -------------- --------------- ---------
Net book values
30 June 2021 (unaudited) 1,340 8,132 16,544 26,016
--------------------------------------- ----------------- -------------- --------------- ---------
31 December 2020 (audited) 1,387 8,434 17,445 27,266
--------------------------------------- ----------------- -------------- --------------- ---------
9. Inventories
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2021 2020 2020
(unaudited) (unaudited) (audited)
Group GBP000 GBP000 GBP000
------------------- ---- -------------- -------------- --------------
Raw materials 1,079 524 1,379
Work in progress - 861 -
Finished goods 356 - -
1,435 1,385 1,379
------------------------ -------------- -------------- --------------
10. Share capital
Six months Six months Year Year
ended ended ended ended
30 June 30 June 31 December 31 December
2021 2021 2020 2020
Number Number
000 GBP000 000 GBP000
At beginning of period 117,189 1,758 117,189 1,758
--------------------------- ------------- ------------- -------------- --------------
Equity placing 97,700 1,465 - -
Exercise of share options 985 15 431 6
At end of period 215,874 3,238 117,620 1,764
--------------------------- ------------- ------------- -------------- --------------
985,067 share options were exercised during the 6 months ended
30 June 2021 (6 months ended 30 June 2020: Nil)
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END
IR QQLFFFVLLBBQ
(END) Dow Jones Newswires
August 17, 2021 02:00 ET (06:00 GMT)
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