Shield Therapeutics : 2023 Annual Report and Accounts

Gaining

significant momentum

Why invest?

We deliver innovative and differentiated specialty pharmaceuticals that address a significant unmet need for patients suffering from iron deficiency, with or without anaemia.

Our lead product Accrufer®/Feraccru® (ferric maltol) is broadly indicated for use in adults across multiple therapeutic categories.

1	Large US defined market	•	~20 million individuals with
		or without anaemia
	•	Large defined, and penetrable,
			iron deficiency market in the US
			ripe for disruption
2	FDA-approved potential	•	Shield filling unmet need, with
best-in-class solution		proprietary FDA approved oral
		iron solution Accrufer® with highly
		tolerable, low side effect solution,
3			in contrast to conventional irons
Established commercial	•	Collaborative Sales Agreement
	infrastructure		with Viatris, driving strong
			prescription growth
		•	Accrufer® is set to become the
			leading oral iron prescription medicine
			in the US market share by 2027
4	Strong Capital Management	•	Cash flow positive with existing
		resources by H2 2025
	•	Growth capital of c.$26 million+
		•	$20 million credit facility
			with SWK Holdings, Inc
		•	$6.4 million in equity raise and warrant
			conversion
		•	$1.3 million in equity available
			for retail take up
		•	$10 million accounts receivable financing
5			with Sallyport Commercial Finance
Strong Management Team	•	Poised to build the business and drive

market adoption and revenue growth in the US & Rest of World

• Senior leadership team has extensive US commercial experience in building brands and launching new products

Shield Therapeutics plc Annual report and accounts 2023

Strategic report

01

About us

Business highlights

The operational progress made by Shield and its partnership with Viatris to create a new 100-person sales team, increase payer coverage, launch new brand campaigns, and ultimately deliver a tripling of US Accrufer® prescriptions and revenues in 2023 - has been notable. In addition, recent market research reaffirms the unmet need in Accrufer's® target patient population, as healthcare professionals and patients continue to seek a well-tolerated and effective oral iron. During the fourth quarter of 2023, Shield strengthened its sales leadership and marketing organisations which will help drive more focused execution and prescription growth. The Company has also seen positive improvements in its gross-to-net in 2023 and expects that to accelerate further in 2024.

Total revenue growth Total revenues and other income

$17.5m

($6.2m in 2022)

• $11.6m Accrufer® revenue 3.1 x over 2022
• $1.5m Ex-US Royalty Revenue
• $4.4m other income revenue including Viatris upfront payments

Improve Accrufer®	Accrufer® prescriptions
gross to net	77k
	(25.2k in 2022)

• 21% increase in average net sales per prescription in H2 2024 vs H1 2025
• >3x growth in TRX in 2023 vs 2022
• $145 - average net sales per prescription in H2 2023 ($119 in H1 2023)

Capital management	Cash and cash equivalent for
	year-end 2023
	$13.9m
	($3.5m at year-end 2022)

• Fully repaid convertible shareholder loan from AOP Health
• Added $20m, long-term-loan from SWK Holdings
• Added $29m from equity raises

Contents

Strategic report

IFC Why invest?

1. About us
2. At a glance

03 Chairman and Chief Executive Officer's joint statement

1. Strategy
2. Markets
3. Strategy in action: Global partnerships
4. Business model

1. Key performance indicators
2. Stakeholder engagement
3. Chief Financial Officer's review

15 Principal risks and uncertainties and risk management

Corporate governance

18 Board of Directors

20 Senior Executive Team

1. Corporate governance report

1. Audit and risk report

1. Directors' remuneration report

1. Directors' report

1. Statement of Directors' responsibilities

• For more information on our business and all our latest news and press releases, visit us at: www.shieldtherapeutics.com.
  Follow Shield on X @ShieldTx

Financial statements

37 Independent auditor's report

1. Consolidated statement
   of profit and loss and other comprehensive income
2. Group balance sheet
3. Company balance sheet
4. Group statement of changes in equity
5. Company statement of changes in equity
6. Group statement of cash flows
7. Company statement of cash flows
8. Notes (forming part of the financial statements)

1. Glossary
2. Advisors

02

Strategic report

Shield Therapeutics plc Annual report and accounts 2023

At a glance

Delivering innovation

Shield is a commercial stage pharmaceutical company with a focus on addressing iron deficiency with its lead product Accrufer®/ Feraccru® (ferric maltol), a novel, stable, non-salt-based oral therapy for adults with iron deficiency, with or without anaemia.

Shield's proprietary lead product, Accrufer®/Feraccru®, has been approved for use in the US, the EU, the UK, Australia and Switzerland. The product has patent coverage until the mid-2030s. The Group launched Accrufer® in the US with an exclusive, multi-year collaboration agreement with Viatris Inc. Feraccru® is commercialised in the UK and European Union by Norgine B.V., that also have the marketing rights in Australia and New Zealand. Shield also has an exclusive licence agreement with Beijing Aosaikang Pharmaceutical Co., Ltd., for the development and commercialisation

of Accrufer®/Feraccru® in China, Hong Kong, Macau and Taiwan, with Korea Pharma Co., Ltd. for the Republic of Korea, and with KYE Pharmaceuticals Inc. for Canada.

Corporate history and milestones	2024

2024

• Secured a $10m accounts receivable financing with Sallyport Commercial Finance
• Signed an amendment to improve the revenue covenants associated with the existing SWK $20m debt financing

2022

• Licence Agreement in Canada for Accrufer® with KYE Pharmaceuticals
• Execution of convertible shareholder loan of $10m from AOP Health
• Execution of Collaborative Sales Agreement for Accrufer® in US with Viatris

2020

• Licence Agreement in China for Feraccru® with ASK Pharma

2018

• Licence Agreement in Europe, Australia
  and New Zealand for Feraccru® with Norgine
• Completion of Phase III study in CKD (US NDA enabling)

2013

• Completion of Phase III study in IBD (EU MAA-enabling)

2010

• Commitment by first corporate investor (AOP Health)
• Acquisition of ST10 asset from Vitra Pharma

2023

• Growth capital of c.$49m+
• $20m credit facility with SWK Holdings, Inc
• $29m in equity raises and warrant conversion

2021

• Completion of $38m ($27m) equity raise
• US Launch of Accrufer®
• Licence Agreement in Korea for Accrufer® with Korea Pharma

2019

• FDA approves Accrufer® for treatment of iron deficiency in adults

2016

• Issuance of marketing authorisation for Feraccru® by EMA
• Admission to London Stock Exchange's AIM Market

2011

• VC funding with investment from W Health (Inventages)

2008

2008	• Shield Therapeutics Limited formed
and registered in the UK

Shield Therapeutics plc Annual report and accounts 2023

Strategic report

03

Chairman and Chief Executive Officer's joint statement

Major step forward in 2023

Our growth journey for Shield Therapeutics took a major step forward in 2023 following a successful organisational expansion and new launch of Accrufer® in the US."

Hans Peter Hasler	Greg Madison
Chairman	Chief Executive Officer

Our growth journey for Shield Therapeutics took a major step forward in 2023 following a successful organisational expansion and new launch of Accrufer® in the US with our partner Viatris Inc. This expanded reach and access to additional resources provides a strong opportunity to continue our mission for making Accrufer® the oral iron of choice for patients with iron deficiency, with or without anaemia (ID/IDA). On the clinical side, we expect to complete enrolment of our paediatric study in 2024, and subject to regulatory approval this would open up additional opportunities in patients under 18 years of age. On the ex-US partnering front, we expect to achieve key milestones in the coming year in Canada, Korea and China as we seek to make ferric maltol available across the globe.

Like a lot of growing businesses, we have encountered a number of challenges through the year including a tighter financing environment, a volatile stock price and some variability in the speed of growth of our US business following the full sales force launch in May 2023.  One of the things I am proud of is the Shield team's resilience and our focus on what it takes to achieve our mission to make Accrufer® the oral iron of choice for patients with ID/IDA.

In the US, the Company went through a significant commercial expansion in the first half of 2023, hiring our first direct sales team of 50 sales professionals along with six regional sales managers, all of whom are promoting Accrufer® to healthcare professionals. Our partner Viatris did the same, and by May we had the full team of 100 sales professionals promoting Accrufer® to approximately

12,000-13,000 HCPs. Awareness about Accrufer® as an option to treat ID/IDA among the vast majority of these HCPs remains quite low, and the objective of this expanded team is simple: increase awareness of Accrufer®, generate prescriptions from these HCPs, and allow patients to experience the benefits we believe Accrufer® can provide.

Over the course of the year, we tripled total prescriptions to over 77,000, an increase of 3.1x as compared to all of 2022. Shield announced a prescription reporting issue from our third party data provider earlier in the year, but we have worked closely with our third-party data provider to rectify this and also implemented an enhanced multi-source system. First time writers of Accrufer® saw a dramatic increase with 167% writing for the product for the first time in 2023. The feedback on the product we hear from physicians through our sales team continues to be very positive. All of these metrics provide us additional confirmation in two key areas. First, that there is a need from HCPs and patients for an effective and well tolerated oral iron. Second, Accrufer® is highly promotionally sensitive, so the more HCPs we can reach with sales and marketing efforts, the faster awareness can increase and the opportunity increases to grow our prescriber base. While we have made progress over the first 6+ months of this new commercial launch, there is much opportunity still ahead of us.

On the financial side, we generated a total of $11.6 million in US net revenues for Accrufer® with the bulk of those net sales coming in the second half of the year following the commercial expansion. We also set out to increase our net revenue per prescription, and saw that increase to $145/Rx in the second half of the year vs $119/Rx in the first half of the year. We have a number of initiatives directed to this goal coming in 2024, and expect this to continue to increase while we grow our total prescriptions.

Our partnership with Viatris in the US was initiated in 2023 and has progressed positively throughout the course of 2023. Both organisations are focused on strategic alignment, excellent communication, strong collaboration and focused execution. Together, we remain steadfast in our commitment to making Accrufer® the oral iron of choice in the US.

04

Strategic report

Shield Therapeutics plc Annual report and accounts 2023

Chairman and Chief Executive Officer's joint statement continued

All of the accomplishments and growth we experienced during 2023 would not be possible without a strong team here at Shield. As we scaled up our sales organisation significantly in the first half of 2023, we added additional talent across human resources, information technology and sales operations to help support our expanded team. Andy Hurley joined us as our Chief Commercial Officer in April of last year to lead both Shield's commercial team and the partnership with Viatris. We have a team of dedicated, smart and passionate individuals who not only share in our Company vision for Accrufer®, but also consistently display our values of agility, empowerment, collaboration and the will to succeed.

Global partnerships and development

We have a number of partnerships across the globe and our objective is to identify opportunities to bring Accrufer®/Feraccru® to patients with iron deficiency in as many markets as possible.

In Europe, where Feraccru® is commercially available to patients through our partnership with Norgine. We have a long standing relationship with Norgine, and their efforts are primarily concentrated in those countries where we have positive reimbursement, specifically Germany, UK and the Nordics. During 2023, we saw 10% growth in packs sold, and a corresponding increase of 33% in our royalty revenue. For several years, the focus of the marketing and sales efforts for Feraccru® has been toward the gastrointestinal specialty. More recently, it has become clear that the oral iron market in many countries is similar to that of the US, with women' health "OB/GYN" and General Practitioner representing the bulk of oral iron prescriptions written. The Norgine team in Germany has already begun their pivot towards a more focused selling and marketing approach to OB/GYNs with some success. We continue to work with our partner to drive further depth into these specialties not only in Germany but in other markets as well.

Excellent progress continues to be made in our development stage partnerships in Canada, Republic of Korea and China. In Canada, our partner KYE Pharmaceuticals filed for regulatory approval with Health Canada, and we expect a decision in 2024. The team at KYE has been preparing for launch pending approval and will be ready to go in 2024. Korea Pharma, our partner in South Korea, completed the pharmacokinetic (PK) study last year, and we are awaiting results of that study in H1 2024. This is the only study that is required for a regulatory filing, and if successful, would lead to a filing for approval in the second half of 2024. Lastly, our partner in China, ASK Pharma, is enrolling patients into a Phase 3 study that is similar in design to the studies conducted by Shield leading to EMA and FDA approval. The study picked up momentum in the second half of 2023 and is targeted to complete enrolment in late 2024. Each of these markets represent a growth opportunity with many patients challenged in treating their iron deficiency. Shield receives various milestones and royalties on net sales across each of these geographies.

Paediatric study

Shield is enrolling patients in a paediatric study, which if successful, could lead to an expansion of the indication and uses for Accrufer®/Feraccru® in both US and EU markets. The study, a requirement of both FDA and EMA, is enrolling patients with iron deficiency ranging from 12 months to 17 years of age. This is another population where iron deficiency is prevalent and similar challenges to OTC irons exist. As part of this study, Shield is using a new liquid formulation, which, if approved may offer an alternative approach for those who can't swallow our current capsule formulation.

Outlook

Our Company went through a period of significant expansion and growth over the past twelve months, and we have dramatically increased the number of prescriptions for Accrufer® in the US as we continue to build out awareness of the product and fine-tune our commercial efforts. We see an oral iron market which has clear needs based on physician and patient feedback for a product that delivers both effectiveness and tolerability. As we move into 2024, we will come up on the one-year anniversary of our full commercial launch alongside Viatris, and expect our commercial execution to continue to improve. We have exciting plans to add additional resources in the areas of marketing and patient access programmes, which we believe will help achieve continued growth in prescriptions along with our continued improvement in financial metrics. We should complete our paediatric study during 2024, opening up expansion opportunities in both the US and EU in future years. Lastly, our ex-US partnerships continue to progress not only making Accrufer®/Feraccru® available around the globe, but also adding to our revenues through both milestones and royalties.

Hans Peter Hasler

Chairman

10 May 2024

Greg Madison

Chief Executive Officer

10 May 2024

Shield Therapeutics plc Annual report and accounts 2023

Strategy

Progressing with our strategy

Strategic report 05

Our strategic pillars

1

Make Accrufer® the brand leader in oral iron therapy in the US

• Redefine expectations of oral iron therapy
• Increase brand awareness
• Build Accrufer® advocates
• Raise patient awareness
• Minimise patient barriers to access

2

Accelerate global adoption of Accrufer®/Feraccru®

• Increase adoption and payer reimbursement in Europe
• Assist current licence partner in obtaining regulatory approvals
• Identify potential partners in new markets and territories

3

Identify expansion opportunities for our business

• Seek to expand indication to include paediatric patients
• Explore alternative dosing regimens and other life cycle management opportunities
• Identify in-licensing opportunities that leverage our infrastructure and fit strategically to grow
  our business

Achievements

• 3x growth on annual US Accrufer® sales volumes of +70 thousand prescriptions
• Expanded reimbursement coverage with +120 million patients in the US via commercial and Medicaid
• Strong partnership with Viatris Inc. in scaling Accrufer® launch via a 100-person dedicated US sales force

Achievements

• Continued execution of Feraccru® in Europe
• Completion of PK study in Korea and awaiting results
• Completion of out-licensing agreement in Canada and acceptance of New Drug Submission (NDS) by Health Canada paving way for future approval

Achievements

• Expect to report the results of the paediatric study in iron deficiency, with or without anaemia, in the second half of 2024
• FDA approval of increase in shelf life of Accrufer® from 48-60 months

06

Strategic report

Shield Therapeutics plc Annual report and accounts 2023

Markets

The Accrufer® opportunity: to become the oral iron treatment of choice

The iron deficiency, with or without anaemia, market, is a large, diverse and highly fragmented market driven by multiple underlying conditions of ID/IDA. Over 500 thousand HCPs prescribe more than 10 million oral IRT TRXs per year. Most of this market is flooded with oral ferrous salt products that comprise 90% of the prescriptions written for this condition in the US. Over 90% of the prescriptions written for the oral iron salt market are prescribed by primary care and OB/GYN physicians. The conventional or traditional oral iron salt, mostly ferrous-based products, are known for their poor adherence and tolerability based on the gastrointestinal adverse effects.

These ferrous salts dissociate prior to intestinal uptake and the inefficient absorption of iron results in residual free iron in the gastrointestinal tract causing a high level of adverse events to oral iron treatments. These gastrointestinal adverse effects and lack of tolerability of the conventional or traditional iron products create an unsatisfactory cycle of switches and discontinuations that ranges from 40-60%.

Accrufer® (ferric maltol) is a novel formulation of oral iron designed to treat iron deficiency with minimal gastrointestinal adverse reactions, as demonstrated during clinical trials. Unlike ferrous salts, which disassociate in the gut, Accrufer® dissociates upon uptake in the GI tract, allowing it to deliver a low dose of elemental iron to prevent and even reverse IDA (for short and long-term management), without the intolerable GI side effects. Specifically, Accrufer® was well tolerated with a less than 5% discontinuation rate, within the clinical trials that supported its regulatory approvals. As a result, Accrufer® has the potential to play a major role in this undertreated high growth iron deficiency market.

We believe Accrufer® has the potential to be the oral iron treatment of choice for patients with ID/IDA. Over the last year, we set out to substantially increase product adoption, sales growth, physician awareness and generate positive clinical experience and expand payer coverage."

Greg Madison

Chief Executive Officer

Iron deficiency prevalence in the US

In the US, ~20 million patients are at risk of iron deficiency, with or without anaemia, across multiple therapeutic areas. These include:

Women's health

One in five US women of childbearing age are at risk

of iron deficiency, with many experiencing heavy uterine or post-partum bleeding.

Gastrointestinal disorders

Iron deficiency affects up to three-quarters of patients with inflammatory bowel disease (IBD).

Chronic kidney disease (CKD)

There are 37 million CKD patients (dialysis and non-dialysis) in the US. Around 50% of these patients are at risk, while roughly 2.5 million patients have Stage 3 or Stage 4 CKD with iron deficiency anaemia.

Oncology

Between 32-60% of cancer patients are at risk; those with solid tumours and haematological malignancies are particularly susceptible.

Cardiology

Iron deficiency may also affect around 17% of Chronic Heart Failure (CHF) patients.

Prescriptions by specialty*

Women's Health - 46%

General Practitioners - 45%

Other - 9%

Sources: Global Data, European Medical Journal, Daiichi Sankyo annual report, LEK Consulting, CDC, EVOLUTION research and assumptions.

A market ripe for disruption

Patients with anaemia	Prescriptions per year
(actively diagnosed	(majority OTC iron)
and treated)	13.4m
~20m
US market opportunity	Patent protection
for iron deficiency	in US until
$2.3bn	mid-2030s

Shield Therapeutics plc Annual report and accounts 2023

Strategic report

07

Strategy in action: Global partnerships

Global partnerships continue to progress

Deals include upfronts, milestones and double-digit royalties

	Call points re-focused to women's health/GPs
Approval expected mid-2023
Regulatory decision H1 2024	Final regulatory study underway

Co-commercial agreement, Dec 2022

Enrolling Phase 3

Global partners and pipeline update

Viatris (USA)

The Shield/Viatris commercial team has been fully operational since May 2023 and is well poised to target the 12,000+ highest prescribers. Early results, marked by strong Accrufer® growth, indicate the partnership is working extremely well. We have a 100-person combined sales team in place and are looking forward to our joint National Sales Meeting being held in 2024.

Korea Pharma (Republic of Korea)

Korea Pharma has completed enrolment into the pharmacokinetic study, which is the only study required to support approval and we are awaiting confirmation of the results. Korea Pharma are expected to file for approval in H2 2024.

Norgine (EU+ rights)

Norgine are focused on Germany, UK and the Nordic areas with specific call points being re-focused to women's health/GPs. Data received from Norgine indicate that in 2023, the number of Feraccru® sales packs sold in Europe increased by 10.5% vs 2022.

KYE Pharmaceuticals (Canada)

KYE filed a New Drug Submission for Accrufer® with Health Canada in Q1 2022 and a regulatory decision is expected in H1 2024.

Beijing Aosaikang Pharmaceutical Co. Ltd.

(China, ASK Pharma) - Patients are currently being enrolled in the pivotal Phase 3 study. It is expected that the last patient will be enrolled by the end of 2024 with NMPA decision expected in H2 2026.

08

Strategic report

Shield Therapeutics plc Annual report and accounts 2023

Business model

How we create value

To make Accrufer® the oral iron of choice

Why patients and writers choose Accrufer®

Unmet need and unsatisfied market:

Other available oral iron treatments have a high degree of gastrointestinal- related adverse events that compromise the patient's ability to stay on these medications, resulting in a highly unsatisfied market with little to no innovation among oral iron therapies over the past two decades.

Effectiveness with tolerability:

Due to its unique maltol formulation and mechanism of action, delivering elemental iron to the small intestine, Accrufer® effectively treats iron deficiency with a lower dose of iron and results in <5% individual adverse reactions and treatment discontinuations.

Acceptable cost to patients:

Through agreements with most of the Pharmacy Benefit Management (PBM) companies and large commercial payer organisations and State-run and Managed Medicaid plans, 100M or ~40% of Eligible Lives Now have coverage for Accrufer®.

Our resources

A. FDA and EMA-approved potential best-in-class therapy

Accrufer®, an FDA-approved therapy, oral iron solution with minimal (<5%) individual gastrointestinal adverse reactions and discontinuations.

B. Collaborative commercial partnership in the US

Commercial partnership with Viatris expands commercial footprint and resources for Accrufer® in the US with a 100-person combined sales team, calling on 12,000+ HCPs, as well as marketing and managed care teams focused on expanding awareness and patient access to Accrufer®.

C. Dedicated and committed global licence partners

Dedicated global licence partners work with local regulatory authorities in various jurisdictions to make our product available to even more patients around the world.

1. Experienced and solution-driven team of professionals
   Team of highly skilled, deeply experienced and diverse employees drives the overall performance of the business. We continue to invest into our people by hiring new talent that can lend leadership and support to our mission.