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STX Shield Therapeutics Plc

2.025
0.025 (1.25%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Shield Therapeutics Plc LSE:STX London Ordinary Share GB00BYV81293 ORD 1.5P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.025 1.25% 2.025 1.95 2.10 2.025 1.975 2.00 632,383 16:11:13
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Pharmaceutical Preparations 4.47M -40.44M -0.0522 -0.39 15.66M

Shield Therapeutics PLC Interim Results for six months ended 30 June 2016 (2570K)

20/09/2016 7:01am

UK Regulatory


Shield Therapeutics (LSE:STX)
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RNS Number : 2570K

Shield Therapeutics PLC

20 September 2016

Shield Therapeutics plc

("Shield" or the "Company" or the "Group")

Interim Results for the six months ended 30 June 2016

Feraccru delivers first revenues and its Intellectual Property receives a significant boost

London, UK, 20(th) September 2016. Shield Therapeutics plc (LSE:STX), a specialty pharmaceutical company focused on secondary care, today announces its preliminary Group results for the six months ended 30 June 2016.

Highlights (including post period end)

Operational and commercial

-- Achievement of first revenues of GBP240k from sales of Feraccru, Shield Therapeutics' first prescription medicine which was approved in February 2016

-- Initial stages of Feraccru's European commercial launch progressing in line with expectations:

o UK commercial activities accelerating, post- June 2016 launch, as per plan

o >10 members of Shield Therapeutics' team interacting with UK customers on a daily basis

o Access to Formularies and approvals by Clinical Commissioning Groups in the UK being achieved to cover an increasing number of prescribers

o Feraccru pricing of GBP47.60 per 28-day treatment pack agreed with the UK NHS

o Higher pricing of EUR64.00 per 28-day treatment pack agreed and published in Germany, with sales operations to commence in October 2016

-- Key Composition of Matter patent granted, significantly increasing the level and duration of exclusive intellectual property protection afforded to Feraccru from 2023 to at least 2034

   --     AEGIS-H2H and AEGIS-CKD Phase 3 studies of Feraccru progressing on track 

-- Discussions progressing well with potential licensing partners in a selection of non-core markets

   --     PT20 and PT40 activities continue in-line with plan 

Financial(1)

-- Successful completion of an Initial Public Offering (IPO) on AIM raising GBP32.5m (gross) and further potential gross proceeds of GBP17.5m, subject to the full exercise of Warrants

   --     First reported UK revenues of GBP240k 
   --     Net loss for period of GBP8.9m on an IFRS basis. Adjusted net loss for period of GBP5.1m(1) 
   --     Period end cash balance of GBP28.4m 

Commenting on the interim results, Carl Sterritt, Chief Executive Officer of Shield Therapeutics plc, said: "The period covering the first half of 2016 and particularly since the Company's IPO in February has been one of foundation building, implementation of the first stages of Feraccru's commercial launch and resource growth for Shield Therapeutics; as well as receipt of our first commercial revenues. During this time the Company has successfully achieved attractive pricing agreements in the UK and Germany, and has been accelerating our commercial activities for Feraccru in the UK, whilst laying the foundations for launch in Germany in October 2016. Alongside this we have made solid progress with our two Phase 3 clinical trials that will further enhance the commercial opportunity available to Feraccru by broadening the prescribing label and the geographies the product can be prescribed in; as well as fundamentally improving the intellectual property rights of Feraccru with a series of significant enhancements.

"Oral ferrous treatments are poorly tolerated meaning patients frequently don't adhere to treatment, resulting in a real unmet need for a well-tolerated oral iron replacement like Feraccru for IBD patients with IDA. The availability of Feraccru is an important step in helping to fulfil this unmet need and may help reduce the need to progress to IV iron treatments. With our now-expanded team of industry-leading professionals we look forward to building on these activities and further executing our plans through the remainder of 2016 and beyond so that more patients can benefit from Feraccru."

Conference call for analysts

A briefing for analysts will be held at 11.00am BST on 20 September 2016 in the Guildhall Room at 85 Gresham Street, London, EC2V 7NQ. There will be a simultaneous live conference call with Q&A and the presentation will be available on Shield's website at www.shieldtx.com.

Dial-in details:

   Participant dial-in:          0800 279 5982 
   International dial-in:     +44 (0)1452 557851 
   Participant code:             71772565 

An audio replay file will be made available shortly afterwards via the Company website: www.shieldtx.com.

- Ends -

For further information please contact:

 
 Shield Therapeutics plc                +44 (0)207 186 8500 
 Carl Sterritt, Chief Executive 
  Officer 
  Richard Jones, Chief Financial 
  Officer 
 Nominated Adviser and Broker 
  Liberum Capital Limited 
  Christopher Britton/Steve 
  Pearce                                +44 (0)20 3100 2222 
 Financial PR Advisor                   +44 (0)203 709 5700 
  Consilium Strategic Communications     shieldtherapeutics@consilium-comms.com 
 Mary-Jane Elliott/Matthew 
  Neal/Lindsey Neville/Hendrik 
  Thys 
 

References

(1) : Adjusted net loss excludes IFRS financing costs in respect of pre-IPO structure, one-off costs and share-based payments

(2) : GfK report from 2015 as included in IPO Admission Document

(3) : IPO Admission Document

Note

This announcement contains inside information for the purposes of the Market Abuse Regulation.

Chief Executive Officer's statement

The period under review has been a transformational time for Shield Therapeutics. Following the significant achievement of our successful IPO onto the AIM market of the London Stock Exchange in February 2016 to raise GBP32.5 million of growth capital and receiving the pan-European Marketing Authorisation Approval of our first product, Feraccru, the period has since been characterised by the growth of Shield Therapeutics and operational implementation of our commercial plans, focused on the launch of Feraccru in the key first two markets of the UK and Germany. The immediate impact of this has been to deliver our first product-related revenues and by the end of 2016 approximately 60% of the IDA in IBD EU-5 commercial opportunity for Feraccru should be available to us.

Feraccru

Feraccru launch

Tellingly, without requiring Health Technology Assessments, Feraccru has achieved attractive price points in both the UK and Germany, with a published price of GBP47.60 and EUR64.00 per 28-day treatment pack, respectively. Such achievements in two strategically important - and often referenced - markets give a clear indication of the value that Feraccru can deliver to integrated healthcare systems and we expect they will support our pricing and reimbursement activities across a broader basket of countries throughout the pan-European launch of Feraccru.

Feraccru is estimated to have an achievable peak annual sales opportunity in excess of GBP500 million in more than 4 million patients in Europe and the USA that make up its two core markets of IDA in IBD and IDA in chronic kidney disease (CKD) (2) . The Company believes the overall market has more than 33 million patients suffering with IDA who could be effectively treated with Feraccru(3) .

Following the pricing agreement with the NHS and Department of Health in the UK, our field-based team of Key Account Managers and Medical Science Liaisons has been focused on three core activities: (i) introducing commercially available Feraccru to the initial target prescriber base of UK gastroenterologists; (ii) educating Clinical Commissioning Groups (CCGs) on the health economic benefits of Feraccru; and (iii) critically, with the agreement and support of prescribers, submitting applications to and achieving access for Feraccru from hospital formularies. Steady progress is being made across this triumvirate of key stakeholders in an IDA patient's journey in the UK, as with their support and approvals we will deliver commercial success for Feraccru. Widening the audience of potential patients and prescribers as quickly as possible is an important target and this has been aided by the fact that, at the time of Feraccru's UK launch, the British Society of Gastroenterology (BSG) was holding its main annual scientific and commercial meeting. We ensured maximum coverage at this key event for the UK's leading gastroenterologists.

We are pleased to report our first commercial revenues from Feraccru in this interim results statement. These first revenues represent stock sold to our two UK wholesalers in preparation for the commencement of commercial prescribing of Feraccru as our in-house team of Key Account Managers and Medical Science Liaisons commenced work. We look forward to updating the market on Feraccru's in-market demand in early 2017.

Whilst we have employed our own sales team of Key Account Managers in the UK we have chosen to utilise a slightly different field-based model via a Contract Commercial Organisation in Germany to minimise time to commercial launch. As such, in Germany, we are employing our own central team of commercial and medical professionals, and have initially contracted the resources of the highly regarded inVentiv Health to provide our field-based team of eight Key Account Managers initially and a National Sales Manager. This has significantly streamlined the otherwise complicated logistics of identifying and recruiting our own field-based sales team in this, our first overseas market, whilst giving us the ability to have a lower risk 'try before we buy' period with each Key Account Manager. Product training is scheduled for early October, after which the team will be out in the market actively implementing our commercial strategy in Germany.

As with the UK launch, we have an early, pan-German opportunity to raise awareness of Feraccru at Deutsche Gesellschaft für Gastroenterologie, Verdauungs und Stoffwechselkrankheiten (DGVS), the annual scientific congress of the German gastroenterology society, which is taking place just as Feraccru becomes commercially available in Germany. The commercial launch and prescriber/payor approval process in Germany is more streamlined than in the UK and we also have the advantage of starting our commercial operations with a broader prescriber experience of Feraccru due to the clinical trials we have run and are running in multiple key institutions in Germany. As a result of this existing experience with Feraccru, it is hoped that these key institutions will transition into important commercial customers.

Over the period, we have also made significant progress in refining our launch strategies in the other member countries of the EU-5. In France, we have taken the commercial decision to include data from the AEGIS H2H clinical study in our Pricing and Reimbursement submission, as specialist research conducted post Feraccru's marketing authorisation approval has provided a strong signal that this will facilitate optimum pricing in this market. This has become even more relevant following the recently announced news on Shield receiving the composition of matter patent grant for Feraccru that will see protection extended through at least 2034, versus the previously estimated 2023 before approval-related term extensions. Similar specialist research is ongoing in Spain and Italy and is currently expected to result in the same decisions on the timing of Pricing and Reimbursement submissions.

Feraccru Intellectual Property Rights

2016 has seen very significant intellectual property progress on a number of fronts that protect, facilitate and enhance Feraccru's exclusive commercial opportunity. In particular, since Admission:

i. The European approval of Feraccru has provided the product with 10 years of data and marketing exclusivity in the countries covered by the approval, giving protection to February 2026.

ii. The approval in Europe has also allowed Shield to apply for a supplementary protection certificate to be applied to one of the core patents protecting Feraccru. We have requested this be issued against the core manufacturing patent that protects Feraccru and upon issuance this will extend that patent out to August 2028 in a number of core markets.

iii. In addition to this increased coverage, our patent protecting Feraccru's use in achlorhydric patients was granted in the USA in February, having already been granted in other major territories. This patent covers an important feature of Feraccru's mode of action by demonstrating a unique ability as an oral iron to remain in solution and be available for absorption, even if a patient's gastrointestinal pH has been artificially increased. In many patients with diseases concomitant to their IDA, the use of pH raising pharmacotherapies like the proton pump inhibitors omeprazole or lansoprazole is very common and in such patients ferrous-based oral iron therapies simply precipitate out of solution and are unabsorbable. In such patients, prior to the availability of Feraccru, parenteral iron therapy was the only realistic option.

iv. However, the most significant progress we have made with Feraccru's IPR is the granting of UK Patent GB2531742, entitled 'Polymorphs of Ferric Maltol', a composition of matter patent that significantly expands Feraccru's intellectual property portfolio by protecting the active substance of Feraccru through to at least 2034, as announced on 7 September 2016. We are delighted that such a highly regarded body as the UKIPO has granted Shield a composition of matter patent to the active substance in Feraccru and in doing so has significantly added to the breadth of the IP for Feraccru(R) as well as providing a lengthy extension to that protection. Allowance at the UKIPO is an indicator of the protection that we are anticipating in other territories when the national phase is entered in April 2017. We will now seek protection across a broad range of geographies and such composition of matter protection should enable Shield to prevent third parties from manufacturing or selling the product for any use until at least 2034.

Feraccru clinical development progress

Shield's two ongoing Phase 3 clinical trials are moving forward as planned, with AEGIS H2H recruiting in Europe and preparing to commence recruitment in the USA - an important expansion as positive data from this study will now allow an earlier filing of the NDA for Feraccru with the US FDA. Meanwhile AEGIS CKD set-up is approaching finalisation and we remain expectant of first patients being enrolled during Q4-16. Together with existing data on Feraccru, these studies are designed to further increase the product's commercial opportunity by achieving a broader label in Europe and giving access to the USA.

Other products in development

PT20

As previously advised, an end of Phase 2 meeting with the FDA is due to take place in Q4-16. The outcome of such a meeting is expected to allow us to finalise what additional clinical and non-clinical work is required for us to be able to submit an NDA. Our search for a commercial/co-development partner for PT20 has begun with meaningful discussions with potential development partners not expected to occur until after the FDA meeting. Work on the development of a suitable formulation of the drug product for use in a second pivotal study is also ongoing.

PT40

Following receipt of guidance from FDA on how to most efficiently develop PT40 through to submitting the supplemental New Drug Application (sNDA) that would be required, activities have commenced to identify both a suitable scale-up contract manufacturer and commercial partners who would license this technology from Shield.

Financial review

We are delighted to report our first Group revenues of GBP240k for the period, which relate entirely to sales of Feraccru into the UK distribution channel. Operating loss for the period was GBP5.6 million after R&D costs of GBP0.8 million, which excludes GBP0.9 million of R&D that was capitalised following a review of our R&D capitalisation policy in respect of Feraccru post-marketing approval.

Our accounts for the period were again impacted by various IFRS adjustments in respect of our pre-IPO corporate structure. Phosphate Therapeutics Ltd (PTL) has been consolidated into the results from the IPO. Reported net loss was GBP8.9 million. On an adjusted basis net loss, after taking account of these non-cash IFRS adjustments, one-off costs of GBP170k and non-cash share based payments of GBP143k was GBP5.1 million and adjusted loss per share was GBP0.05 per share.

Net cash at the period end was GBP28.4 million after taking account of the non-cash IFRS adjustments, the positive impact of the net IPO funds raised and funds raised immediately prior to the IPO from pre-existing share options. Net assets of GBP54.3 million include the GBP27 million acquisition of PTL capitalised under intangible assets.

Referendum vote to leave the EU

Shield does not anticipate any direct regulatory or commercial impact from Brexit and there has been no immediate impact on the Company's operations following the UK's referendum vote to leave the European Union. Considering foreign exchange rates, in the short term we are both naturally hedged to Euro costs due to investments made into the company prior to the IPO and have had no significant expenditure in the USA in the period. Going forward, we actively update our currency plans and keep a conservative outlook on FX movements and, in addition, where appropriate, we maintain healthy cash reserves to protect the Company against large fluctuations in individual currencies.

Corporate development and licensing

Since Feraccru's European approval we have had an encouraging level of inbound interest from potential partners in a wide range of non-core territories. We remain confident in our ability to convert this interest into licensing agreements in the near term and thereby expand the commercial opportunity for Feraccru. Thinking more strategically, to supplement the organic growth that Feraccru's commercialisation will finance, we are actively considering a narrow selection of both portfolio and infrastructure enhancing opportunities in the specialty pharmaceuticals arena, as we recognise that such expansion has the potential to accelerate our growth and diversify our opportunities.

Summary and outlook

Shield has now transformed itself from wholly development-focused into a commercially-focused and customer-facing organisation that is selling its innovative and value-added lead product, whilst continuing its development to enable the commercial opportunity to be maximised throughout the lengthy period of intellectual property protection that is available to and has recently been extended for Feraccru.

Looking forward we are excited that, over the course of the next few months, increasing numbers of patients will have the chance to benefit from Feraccru therapy, as it is launched in Germany and commercial progress continues to be made in the UK. With detailed out-licensing discussions ongoing in a number of non-core territories, we look forward to being in a position to report positive news in this regard in the near term. Finally, we also look forward to agreeing development plans for PT20 with FDA and then identifying suitable co-development and licensing partners for this attractive product, so it can be moved into the final stage of development prior to MAA & NDA filings.

Carl Sterritt

Chief Executive Officer

Consolidated statement of profit and loss and other comprehensive income

for the six months ended 30 June 2016

 
 
                                 Note                  Six months      Six months           Year ended 
                                                            ended           ended 
                                                          30 June         30 June          31 December 
                                                             2016            2015                 2015 
                                                      (unaudited)     (unaudited)            (audited) 
                                                           GBP000          GBP000               GBP000 
Revenue                                                       240               -                    - 
Cost of sales                                                (54)               -                    - 
 
Gross profit                                                  186               -                    - 
Operating costs (selling, 
 marketing, general 
 and administrative 
 expenses)                                                (5,004)           (574)              (1,371) 
Other operating income                                         40             120                  221 
 
Operating loss before 
 research and development 
 expenditure                                              (4,778)           (454)              (1,150) 
Research and development 
 expenditure                            9                   (787)         (1,215)              (5,284) 
 
Operating loss                                            (5,565)         (1,669)              (6,434) 
Financial income                                               27               -                    - 
Net foreign exchange 
 gains                                                        151           1,890                1,941 
Foreign exchange losses 
 on financial instruments               2                 (1,059)               -                    - 
Net loss on financial instruments 
 designated as 
 fair value through profit or                       (2,398) 
 loss                                   2            (28,949)                                     (18,123) 
Financial expense                                             (7)         (1,299)              (1,872) 
 
Loss before tax                                           (8,851)        (30,027)             (24,488) 
Taxation                                                        -               -                    - 
 
Loss for the period                                       (8,851)        (30,027)             (24,488) 
 
Attributable to: 
Equity holders of the 
 parent                                                   (8,851)        (29,611)             (23,627) 
Non-controlling interests                                       -           (416)                (861) 
 
Other comprehensive 
 income 
Items that are or may 
 be reclassified subsequently 
 to profit or loss: 
Foreign currency translation 
 differences - foreign 
 operations                                                  (30)           (295)                (257) 
 
Total comprehensive 
 income for the period                                    (8,881)        (30,322)             (24,745) 
 
Attributable to: 
Equity holders of the 
 parent                                                   (8,881)        (29,906)             (23,884) 
Non-controlling interests                                       -           (416)                (861) 
 
Earnings per share 
Basic and diluted loss                  8               GBP(0.09)       GBP(0.93)            GBP(0.57) 
 per share 
 
Non-GAAP measure                        8               GBP(0.05)       GBP(0.03)            GBP(0.13) 
 Adjusted loss per share 
 
 
 

Consolidated balance sheet

at 30 June 2016

 
                                 Note               30 June       30 June  31 December 
                                                       2016          2015         2015 
                                                (unaudited)   (unaudited)    (audited) 
                                                     GBP000        GBP000       GBP000 
Non-current assets 
Intangible assets                   9                27,527           494          513 
Property, plant and 
 equipment                         10                    23            20           17 
 
                                                     27,550           514          530 
 
Current assets 
Inventories                                             246             -            - 
 Trade and other receivables                          1,182           140        1,605 
Cash and cash equivalents           2                28,455         3,663          725 
 
                                                     29,883         3,803        2,330 
 
Total assets                                         57,433         4,317        2,860 
 
Current liabilities 
Trade and other payables                            (2,978)       (1,023)      (3,502) 
Interest bearing loans 
 and borrowings                     2                     -      (12,107)            - 
Other liabilities                                     (181)          (41)         (73) 
 
                                                    (3,159)      (13,171)      (3,575) 
 
Non-current liabilities 
Interest bearing loans 
 and borrowings                     2                     -         (891)            - 
Other financial liabilities         2                     -      (38,728)     (17,928) 
 
                                                          -      (39,619)     (17,928) 
 
Total liabilities                                   (3,159)      (52,790)     (21,503) 
 
Net assets/(liabilities)                             54,274      (48,473)     (18,643) 
 
Equity 
Share capital                      12                 1,622           365          690 
Share premium                                        77,963         2,393            - 
Warrants reserve                                      2,760             -            - 
Merger reserve                                       28,358             -       28,358 
Currency translation 
 reserve                                               (69)          (77)         (39) 
Retained earnings                                  (56,360)      (52,484)     (47,652) 
 
Equity attributable 
 to owners of the parent                             54,274      (49,803)     (18,643) 
Non-controlling interest                                  -         1,330            - 
 
Total equity                                         54,274      (48,473)     (18,643) 
 
 
 

Consolidated statement of changes in equity

for the six months ended 30 June 2016

 
                          Issued      Share   Warrants     Merger      Currency    Retained  Non-controlling     Total 
                         capital    premium    reserve    reserve   translation    earnings         interest 
                                                                        reserve 
                          GBP000     GBP000     GBP000     GBP000        GBP000      GBP000           GBP000    GBP000 
 
Balance at 1 
 January 2015                365      2,393          -          -           218    (23,006)            1,746  (18,284) 
 
Loss for the 
 period                        -          -          -          -             -    (23,627)            (861)  (24,488) 
Other comprehensive 
 income                        -          -          -          -         (257)           -                -     (257) 
 
Total comprehensive 
 income for the 
 period                        -          -          -          -         (257)    (23,627)            (861)  (24,745) 
Group reorganisation         325    (2,393)          -     28,358             -     (1,901)            (885)    23,504 
Equity-settled 
 share based 
 payment transactions          -          -          -          -             -         882                -       882 
 
Balance at 31 
 December 2015               690          -          -     28,358          (39)    (47,652)                -  (18,643) 
 
 
Loss for the 
 period                        -          -          -          -             -     (8,851)                -   (8,851) 
Other comprehensive 
 income                        -          -          -          -          (30)           -                -      (30) 
 
Total comprehensive 
 income for the 
 period                        -          -          -          -          (30)     (8,851)                -   (8,881) 
Share issue 
 - IPO                       325     26,487      2,760          -             -           -                -    29,572 
Share options 
 exercised                   309     25,011          -          -             -           -                -    25,320 
Phosphate 
 Therapeutics 
 Ltd acquisition             298     26,465          -          -             -           -                -    26,763 
Equity-settled 
 share based 
 payment 
 transactions                  -          -          -          -             -         143                -       143 
 
Balance at 30 
 June 2016                 1,622     77,963      2,760     28,358          (69)    (56,360)                -    54,274 
 
 

Consolidated statement of cash flows

for the six months ended 30 June 2016

 
                                               Six months         Six months           Year 
                                                    ended              ended          ended 
                                                  30 June            30 June    31 December 
                                                     2016               2015           2015 
                                              (unaudited)        (unaudited)      (audited) 
                                                   GBP000             GBP000         GBP000 
 
Cash flows from operating 
 activities 
Loss for the period                               (8,851)           (30,027)       (24,488) 
 
Adjustments for : 
Depreciation and 
 amortisation                                       1,372                 27             50 
Loss on derivative 
 financial instruments                              2,398             28,949         18,123 
Equity-settled share 
 based payment expenses                               143                133            882 
Financial (income)/expense                          (155)              1,299          1,872 
Unrealised foreign 
 exchange losses/(gains)                            1,105            (1,923)        (1,927) 
 
                                                  (3,988)            (1,542)        (5,488) 
(Increase)/decrease 
 in inventories                                     (246)                  -              - 
Decrease/(increase) 
 in trade and other 
 receivables                                          427               (61)        (1,526) 
(Decrease)/increase: 
 Trade and other 
  payables                                          (988)                329          2,808 
 Other liabilities                                    108                (9)             23 
 
Net cash flow from 
 operating activities                             (4,687)            (1,283)        (4,183) 
 
Cash flows from investing 
 activities 
Acquisitions of intangible 
 assets                                             (378)               (84)          (123) 
Capitalised development 
 expenditure                                        (879)                  -              - 
Acquisition of property, 
 plant and equipment                                 (10)               (10)            (9) 
Cash acquired with 
 Phosphate Therapeutics 
 Ltd                                                  177                  -              - 
 
Net cash flow from 
 investing activities                             (1,090)               (94)          (132) 
 
Cash flows from financing 
 activities 
Proceeds of IPO (Note 
 2)                                                32,500                  -              - 
IPO costs (Note 2)                                (2,427)                  -              - 
Other costs                                         (501)                  -              - 
Share options exercised 
 (Note 3)                                           3,935                  -              - 
Issuance of convertible 
 bonds                                                  -              1,062          1,062 
Issuance of preference 
 shares                                                 -              3,501          3,501 
 
Net cash flow from 
 financing activities                              33,507              4,563          4,563 
 
Net increase in cash                               27,730              3,186            248 
Cash and cash equivalents 
 at 1 January                                         725                477            477 
 
Cash and cash equivalents 
 at period end                                     28,455              3,663            725 
 
 

Notes

for the six months ended 30 June 2016

   1              General information 

Shield Therapeutics plc (the "Company") was incorporated in England and Wales as a public limited company on 3 September 2015. The Company was admitted to the London Stock Exchange's AIM market on 26 February 2016. The Company's Ordinary Shares and Warrants commenced trading on 26 February 2016.

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 has not been 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 2015. This financial information does not constitute statutory financial statements as defined in Section 435 of the Companies Act 2006. 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 19 September 2016.

   2              AIM listing 

Shield Therapeutics plc was admitted to AIM on 26 February 2016 with a placing price of GBP1.50 per share for the additional 21.7 million new shares to be issued pursuant to the placing. The Company's Shares and Warrants commenced trading on 26 February 2016. GBP32.5 million gross was raised through the listing process and GBP2.4 million of issue costs were incurred in the process.

As part of the listing process Warrants with a subscription price of GBP1.50 were issued to participants in the placing, providing an opportunity for the Company to raise up to GBP17.5 million by 30 June 2017 when the Warrants expire. The Warrants trade under the ticker STXW.

On 26 February 2016 debt with a fair value of GBP21.4 million was converted to equity and this included certain options converted to equity at an exercise price of GBP3.9 million. As a consequence of this transaction, reserves have increased by GBP25.3 million and the Group is now debt free. Fair value costs of GBP2.4 million and foreign exchange translation costs of GBP1.1 million were charged to the profit and loss account during the period as a consequence of the fair value remeasurement of the debt prior to its conversion.

   3              Acquisition of Phosphate Therapeutics Limited 

On 26 February 2016 Shield Therapeutics plc acquired 100% of the share capital of Phosphate Therapeutics Limited in consideration for 19,887,791 shares in the Company with a fair value of GBP27 million. As this does not meet the definition of a business combination this has been accounted for as an asset acquisition of the intellectual property of Phosphate Therapeutics Limited.

   4             Selected relevant accounting policies 

The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in this financial information. The financial information is prepared on the historical cost basis except for derivative financial instruments that are stated at their fair value. The functional currency of the Company is GBP. The consolidated financial information is presented in GBP and all values are rounded to the nearest thousand (GBP000), except as otherwise indicated.

Notes (continued)

for the six months ended 30 June 2016

   4              Selected relevant accounting policies (continued) 

Basis of consolidation

The consolidated interim financial information comprises the financial information of the Group and its subsidiaries as at 30 June 2016.

Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date when such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. All intra-group balances and transactions, unrealised gains and losses resulting from intra-group transactions and dividends are eliminated in full.

Losses within a subsidiary are attributed to the non-controlling interest even if that results in a deficit balance. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.

Group reorganisations in the prior period are accounted for as a continuation of the existing Shield Group. Accordingly, the consolidated financial information of Shield Therapeutics plc has been prepared as a continuation of the existing Group. Shield Holdings AG in effect remains the accounting parent entity. The consolidated financial information reflects any difference in share capital between Shield Therapeutics plc and Shield Holdings AG as an adjustment to equity.

Foreign currency

Transactions in foreign currencies are translated to the Group's functional currency at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated to the functional currency at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the income statement. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are retranslated to the functional currency at foreign exchange rates ruling at the dates the fair value was determined.

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated to the Group's presentation currency, Sterling, at foreign exchange rates ruling at the balance sheet date. The revenues and expenses of foreign operations are translated at an average rate for the year where this rate approximates to the foreign exchange rates ruling at the dates of the transactions.

Exchange differences arising from this translation of foreign operations are reported as an item of other comprehensive income and accumulated in the translation reserve or non-controlling interest, as the case may be.

Intangible assets

Research and development

Expenditure on research activities is recognised as an expense in the statement of profit and loss.

During the period the Group met the criteria to capitalise development expenditure for the first time due to the progression of certain projects beyond the research phase. Consequently the policy on research and development costs has been expanded to include the capitalisation criteria for and composition of development costs. No previously reported balances have been restated as a consequence of this change.

Notes (continued)

for the six months ended 30 June 2016

   4              Selected relevant accounting policies (continued) 

Intangible assets (continued)

Expenditure on development activities directly attributable to an intangible asset is capitalised when the following conditions are met:

   --      it is technically feasible to complete the product so that it will be available for use; 
   --      management intends to complete the product and use or sell it; 
   --      there is an ability to use or sell the product; 
   --      it can be demonstrated how the product will generate probable future economic benefits; 

-- adequate technical, financial and other resources to complete the development and to use or sell the product are available; and

-- the expenditure attributable to the product during its development can be reliably measured.

The Group considers that Marketing Authorisation Approval "MAA" regulatory approval in the relevant jurisdiction confirms these criteria.

Internally developed intangible assets are recorded at cost and subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Capitalised directly attributable development costs include clinical trial costs, Chemistry Manufacturing and Controls "CMC" costs and contractor costs. Internal salary costs have not been capitalised as they are not considered to directly relate to bringing the asset to its working condition and employee costs are not allocated by project.

Expenditure in relation to patent registration and renewal of current patents is capitalised and recorded as an intangible asset. Registration costs are continually incurred as the Group registers these patents in different countries. Patent assets are stated at cost less accumulated amortisation and accumulated impairment losses.

Amortisation is charged to the statement of profit and loss on the straight line basis. Amortisation commences when patents are issued, or in the case of other capitalised development expenditure when substantive revenue is being generated from products. Amortisation is charged as follows.

Patents - over the term of the patents

CMC costs - over five years

Intellectual property purchase costs - over the term of the patents

Impairment of assets

An impairment review is carried out annually for assets not yet in use. An impairment review is carried out for assets being amortised or depreciated when a change in market conditions and other circumstances indicates that the carrying value may not be recoverable. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows.

Revenue

Revenue is net invoice value after the deduction of value added tax and other sales taxes. Deductions are made for product returns based on historical experience.

Revenue is recognised in the consolidated statement of profit and loss and other comprehensive income when the risks and rewards associated with the ownership of goods are transferred to the customer. This is deemed to occur when the customer collects and loads the product, resulting in the legal transfer of title.

Notes (continued)

for the six months ended 30 June 2016

   4              Selected relevant accounting policies (continued) 

Operating income

Other operating income is measured at the fair value of consideration received or receivable for management services supplied to related parties. Income is recognised when the service has been delivered.

Expenses

Financing income and expenses

Financing expenses comprise interest payable, finance charges on shares classified as liabilities and net foreign exchange losses that are recognised in the income statement (see foreign currency accounting policy). Financing income comprises interest receivable on funds invested, dividend income and net foreign exchange gains.

Interest income and interest payable is recognised in profit or loss as it accrues, using the effective interest method. Dividend income is recognised in the income statement on the date the entity's right to receive payments is established. Foreign currency gains and losses are reported on a net basis.

Taxation

Tax on the profit or loss for the period comprises current and deferred tax. Tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous periods.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised.

Share-based payments

The Group operates equity-settled, share-based compensation plans, under which the entity receives services from employees as consideration for equity instruments (options) of the Group. The fair value of the employee services received in exchange for the grant of the options is recognised as an expense. The total amount to be expensed is determined by reference to the fair value of the options granted:

   --      including any market performance conditions; 
   --      excluding the impact of any service and non-market performance vesting conditions; and 
   --      including the impact of any non-vesting conditions. 

Non-market performance and service conditions are included in assumptions about the number of options that are expected to vest. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied.

In addition, in some circumstances employees may provide services in advance of the grant date and therefore the grant date fair value is estimated for the purposes of recognising the expense during the period between the service commencement period and the grant date.

The grant by the Company of options over its equity instruments to the employees of subsidiary undertakings in the Group is treated as a capital contribution. The fair value of employee services received, measured by reference to the grant date fair value, is recognised over the vesting period as an increase to investment in subsidiary undertakings, with a corresponding credit to equity in the parent entity accounts.

   5             Critical accounting judgments and key sources of estimation uncertainty 

In the application of the Group's accounting policies, which are described in Note 4, 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.

Notes (continued)

for the six months ended 30 June 2016

   5              Critical accounting judgments and key sources of estimation uncertainty (continued) 

The 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.

Share-based payment transactions

The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. Estimating fair value for share-based payment transactions requires determining the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires the determination of the most appropriate inputs to the valuation model including the expected life of the share options and volatility and making assumptions about them.

Fair value of derivative instruments

Where the fair value of derivative instruments recorded in the statement of financial position cannot be derived from active markets, their fair value is determined using valuation techniques. The inputs to these models are taken from observable markets where possible. Where this is not feasible, a degree of judgment is required in establishing fair values. The judgments include considerations of inputs such as entity value and volatility.

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.

Development expenditure

Development expenditure is capitalised when the conditions referred to in Note 4 are met.

Valuation of intellectual property acquired with Phosphate Therapeutics Limited

The valuation of intellectual property acquired with Phosphate Therapeutics Limited during the period 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 regulatory approval and successful commercialisation of the asset. In the event that commercial returns are lower than current expectations this may lead to an impairment.

   6              New standards and interpretations 

The Group has adopted the following new standards in these financial statements for the first time. The adoption of these pronouncements has not had a material impact on the Group's accounting policies, financial position or performance.

   --      Amendment to IFRS 11 Joint arrangements. 
   --      Amendment to IAS 1 Presentation of financial statements. 
   --      Amendment to IAS 16 Property, plant and equipment. 
   --      Amendment to IAS 27 Separate financial statements. 
   --      Amendment to IAS 38 Intangible assets. 
   --      Amendment to IAS 41 Agriculture. 
   --      Annual improvements to IFRSs - 2012-2014 cycle. 
   7             Segmental reporting 

The Board regularly reviews the Group's performance and balance sheet position for its operations and receives financial information for the Group as a whole. As a consequence the Group has one reportable segment whose revenue, expenses, assets, liabilities and cash flows are measured and reported on a basis consistent with the financial information. All revenue reported in the period relates to the UK market and originated in the UK. No additional numerical disclosures are necessary.

Notes (continued)

for the six months ended 30 June 2016

   8              Loss per share 
   Six months ended                                 Year ended 31 
   30 June 2016                                          December 2015 
 
                               Loss   Weighted   Loss per      Loss   Weighted         Loss 
                             GBP000     shares     share     GBP000     shares    per share 
                                           000      GBP                    000          GBP 
IFRS - basic and 
 diluted                    (8,851)     94,107     (0.09)  (23,627)     41,507       (0.57) 
Adjusted - basic 
 and diluted                (5,081)     94,107     (0.05)   (5,279)     41,507       (0.13) 
Proforma adjusted 
 - basic and diluted        (5,081)    108,135     (0.05)       n/a        n/a          n/a 
 

The diluted loss per share is identical to the basic loss per share in both periods, as potential dilutive shares are not treated as dilutive since they would reduce the loss per share. Warrants issued as part of the IPO process would potentially provide an additional 11,666,658 shares (approximately 10.8% of the current share capital) if exercised between the period end and 30 June 2017 (8,012,815 on a weighted basis), which are considered to be non-dilutive as they would increase the loss per share.

The adjusted loss is calculated after adding back non-recurring items as illustrated in the table below.

The adjusted loss per share is calculated using the weighted average number of Ordinary Shares in issue during the period.

The adjusted proforma loss per share is calculated using the number of Ordinary Shares in issue following the IPO.

The table below reflects the loss used in the basic and diluted adjusted (non-GAAP) EPS computations:

 
                                                       Six months     Year ended 
                                                            ended 
                                                          30 June    31 December 
                                                             2016           2015 
                                                      (unaudited)      (audited) 
                                                           GBP000         GBP000 
 
Loss for the period                                       (8,851)       (23,627) 
Interest on preference 
 shares                                                         -          1,761 
FX movement on preference 
 shares                                                         -          (259) 
Fair value remeasurement 
 of preference share embedded 
 derivative                                                     -         15,610 
Interest on convertible 
 bonds                                                          -            139 
FX movement on convertible 
 bonds                                                          -             10 
Fair value remeasurement 
 of convertible bond embedded 
 derivative                                                     -          1,146 
Fair value remeasurement 
 of share options                                           2,398           (59) 
FX movement on share options                                1,059              - 
Non-recurring legal and 
 professional fees                                            170              - 
Share based payments charge                                   143              - 
 
Adjusted loss                                             (5,081)        (5,279) 
 
 
 

Notes (continued)

for the six months ended 30 June 2016

 
 9 Intangible 
  assets 
                                                    Patents     Development       Phosphate     Total 
                                                        and           costs    Therapeutics    GBP000 
                                                 trademarks          GBP000        licences 
                                                     GBP000                          GBP000 
Cost 
Balance at 1 January 
 2015                                                   566               -               -       566 
Additions - externally 
 purchased                                              104               -               -       104 
Effect of movements 
 in foreign exchange                                     19               -               -        19 
 
Balance at 31 December 
 2015                                                   689               -               -       689 
 
 
Additions - externally 
 purchased                                              378               -               -       378 
Additions - internally 
 developed                                                -             879               -       879 
Acquisition with Phosphate 
 Therapeutics Limited                                     -               -          27,047    27,047 
Effect of movements 
 in foreign exchange                                    104               -               -       104 
 
Balance at 30 June 
 2016                                                 1,171             879          27,047    29,097 
 
 
Amortisation 
Balance at 1 January 
 2015                                                 (130)               -               -     (130) 
Charge for the period                                  (46)               -               -      (46) 
 
Balance at 31 December 
 2015                                                 (176)               -               -     (176) 
 
 
Charge for the period                                  (42)            (84)         (1,242)   (1,368) 
Effect of movements 
 in foreign exchange                                   (26)               -               -      (26) 
 
Balance at 30 June 
 2016                                                 (244)            (84)         (1,242)   (1,570) 
 
Net book amount 
 
At 30 June 2016                                         927             795          25,805    27,527 
 
 
At 31 December 2015                                     513               -               -       513 
 
 
 

GBP27 million of additions during the period to 30 June 2016 relate to the acquisition of intellectual property with Phosphate Therapeutics Limited (see Note 3).

GBP1.7 million was spent on development expenditure during the period, with GBP0.9 million capitalised above and GBP0.8 million charged to the profit and loss account.

Notes (continued)

for the six months ended 30 June 2016

   10           Tangible assets 
 
                               Total 
                              GBP000 
Cost 
At 1 January 2015                 12 
Additions                          9 
 
At 31 December 2015               21 
 
Additions                         10 
 
At 30 June 2016                   31 
 
 
Amortisation 
At 1 January 2015                  - 
Charge for the period            (4) 
 
At 31December 2015               (4) 
 
 
Charge for the period            (4) 
 
At 30 June 2016                  (8) 
 
Net book amount 
 
At 30 June 2016                   23 
 
 
At 31 December 2015               17 
 
 
   11           Related party transactions - Phosphate Therapeutics Limited 

During the period the Company acquired the share capital of Phosphate Therapeutics Limited, as described in Note 3.

Phosphate Therapeutics Limited is considered to be a related party of the Company by virture of its linked key management personnel.

   12           Called up share capital 
 
 
                                  Number   GBP000 
At 31 December 
 2015 (audited)                    69.0m      690 
 
2 for 3 share consolidation      (23.0)m        - 
Issuance of shares 
 pursuant to listing               21.7m      325 
Exercise of share 
 options                           20.5m      309 
Acquisition of 
 Phosphate Therapeutics 
 Limited intellectual 
 property                          19.9m      298 
 
At 30 June 2016 
 (unaudited)                      108.1m    1,622 
 
 
 

Details of the reasons for the movements in share capital are provided in Notes 2 and 3.

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR GGUQCBUPQGRB

(END) Dow Jones Newswires

September 20, 2016 02:01 ET (06:01 GMT)

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