Thank you all for joining us, and good afternoon, and welcome to the Shield Therapeutics webinar, where the team will be presenting their Q3 trading update. Throughout the presentation, attendees will be on listening mode. However, questions are encouraged throughout today's webinar. These can be submitted via the chat function in the right-hand corner. Simply type in your question and press send. The company might not be in a position to answer every question submitted today. However, we will review all of those questions, and where appropriate, we will share those responses following today's presentation. The webinar today is also being recorded, and we will add this to the Shield Therapeutics website after today. I'd now like to hand over to Shield Therapeutics CEO, Anders Lundstrom, CCO, Andy Hurley, and CFO, Michael Jensen.
Thank you, Polly. This is Anders speaking. We can take the next slide, please. This is our disclaimer, but I'll use this to just make a small introduction to the quarter and to this call. No, keep it, just go back one, please, Polly, so we can stay where we are. Thank you. Q3 is another quarter where we see increased ACCRUFeR net revenue per prescription and ACCRUFeR total revenues. The strategy we put in place post-New York Medicaid to focus on commercially insured patients is working well with an increased number of commercial prescriptions and an increased ratio of commercial prescription in relation to Medicaid prescription.
The big change for us, where we now are fully responsible for ACCRUFeR in the U.S., will be visible in the next quarter, or this quarter, we are now quarter four, as that change went into effect on October 1st. Later in this presentation, you will hear more details about, of course, quarter three, and when Andy talks more in detail about the U.S. performance, and Michael will present the quarter three finances. But first then, maybe take the next slide, please. First then, just a little bit of background about Shield, if there are people who haven't joined us before. We have one product. It's called ACCRUFeR in North America, and it's called FeRACCRU in Europe and in the U.K. It's for iron deficiency, with or without anemia. In the U.S. alone, this is a very, very large market.
We estimate it's about 14 million patients diagnosed with iron deficiency every year. The challenge for these patients is that the traditional oral irons, which are oral salts, many times irritate the gastrointestinal system and leads to tolerability problems and side effects, and they have to discontinue. We are different in the way we formulate it, because we're not a salt, we have a MALTOL SHIELD, and I have a couple of slides to further explain why we are different and why our formulation is more effective because of that. We are today the number one prescribed oral iron in the U.S. market, and our aim is to make ACCRUFeR the prescribed oral iron treatment of choice here in the U.S. We still estimate the peak potential revenues for ACCRUFeR to be around $450 million, and we have strong IPs through 2035.
So we have another nine years to go. The most important thing during this third quarter was that we took back full responsibility of ACCRUFeR in the U.S. So we have terminated our collaboration with Viatris, and by that, also, we took over the Viatris part of the sales force, and that sales force have only been selling ACCRUFeR as long as we have been selling ACCRUFeR in the U.S. So we are very, very happy we now have the entire sales force covering 80 territories from October 1st. In the rest of the world, we work via commercial partners, and I will make some comments about that on the subsequent slide. Can I have the next slide, please? So this is our executive team. Now I would like to welcome Michael Jensen, our CFO, who joined us September 1st. This is Michael's first quarterly update.
Michael, Lucy, Andy, and I are in our Boston office, and David and Elizabeth you will find in our Newcastle office. Next slide, please. So the problem for patients many times who suffer from iron deficiency, with or without anemia, is that the formulation they are taking is an oral iron salt. These products, they dissociate, they break apart in the stomach, and free iron irritates the intestinal lining, not only in the stomach, but all the way through the GI system. That leads to gastrointestinal-related side effects, including bloating, dark stool, nausea, distension. Many times, the side effects unfortunately leads to the patients have to stop therapy. So we know that up to 60% of patients will discontinue treatment with ferrous iron salts due to these side effects. Next slide, please. To be different, first of all, we are not a salt.
So we have a MALTOL SHIELD around the iron molecule, and that protects it from breaking apart, dissociating in the stomach, so that the irritation doesn't happen. It only breaks apart when ACCRUFeR is absorbed in the small intestine. So for the proportion not being absorbed, it goes through the GI system still covered by the MALTOL SHIELD. That in itself then decreases the risk of having tolerability problems with ACCRUFeR, and this is the biggest differentiating factor we have. We also have another factor that differentiates that we can, via this also, then deliver a lower iron dose compared to oral iron salts. Next slide, please. Changing gears, so this is what our global footprint looks like. I said a few words about the U.S., and Andy will say more about the U.S. when he comes into his presentation.
In Canada, KYE is selling also under the brand name ACCRUFeR, and we see they have a very, very nice uptake, and the level of royalties we are collecting have doubled Q3 over compared to Q4, and they keep being ahead of their forecast. In Europe and the U.K., Norgine is our partner, and there we have seen very nice progress in the U.K., where we have seen about a 20% increase in volume. So, in the few markets they are selling the product, it continues to grow nicely. In Korea, the product is approved, and as of last week, they have filed the price and reimbursement application. So we will see an approval of that if it is approved, of course, at the price level they are asking for in the first half of next year, and hope to see a launch in 2027.
In China, we filed a regulatory submission in the first quarter of this year. Again, expect to see an approval sometime in the first half of next year. Depending on the timing of the approval, they also need to submit the price and reimbursement application. If the approval comes early in the first half of next year, there is time to get that application in for a potential launch in 2027. If the approval comes later and they cannot submit the price and reimbursement application before the first half of the year, then the big launch will be in 2028. We also have now an indication in adolescents, so in the U.S. from 10 years and up, and in U.K. and Europe from 12 years and up. These adolescent patients or children, they can use the capsule, as we already have available on the market.
The work with the suspension is still ongoing, and there we are moving that ahead, and the next time point will be stability data. Then in Japan, finally. Japan, we are doing something completely different. They are doing a phase II study, which is ongoing, in pulmonary arterial hypertension, which is an orphan market. It is a relatively large market in Japan. If this phase II study is successful, they can start studies in 2027. We can have the next slide, please. Polly, can you put up the next slide, please? Thank you. What are the highlights there for No, go back one, please. The highlights for the quarter is that the commercial U.S. business continues to grow quarter-over-quarter. As I mentioned initially, we see an increase in ACCRUFeR net selling price per prescription and in total revenues for ACCRUFeR.
The strategy we put in place post the change for New York Medicaid is paying off, as we see an increased number in the total number of prescriptions and the proportion of commercial prescription in relation to Medicaid prescriptions. As I mentioned, we have continued progress in our international markets, with good growth in Canada, U.K., and potential 2027 launches in Korea and China. The big news for us during the quarter is that we successfully completed the transition to full control of ACCRUFeR in the U.S. So, we have integrated the salespeople that came over from Viatris, and we were done with that on September 30th. So, from October 1st, we have all the sales force is now under control.
We now have a fully owned commercial platform, which is ready for expansion, and we are looking for additional products to put into the bags of our salespeople. We are experiencing increased transition costs from taking full U.S. ACCRUFeR control, and as we have mentioned in the RNS, we do not expect to be operationally profitable in 2026. Going forward, though, starting in Q4, we are positioned to realize the full economic benefit of the U.S. ACCRUFeR transition, as that will be the first quarter with the lowering of the royalty rate to Viatris, so that will lead to improved economics. We expect to see continued growth in the commercial segment and ongoing cost discipline, which we believe will support long-term shareholder value creation. By that, I invite Andy to continue with the review of the U.S. commercial business. Andy?
Great. Thanks, Anders, and thank you all for joining our update call today. I am going to start out with the next slide, talking about total prescription volume. If you can see this, you can see that we have had modest growth for the past four months since the impact, excuse me, since the impact of the decisions made by New York Medicaid in April of this year for many branded drugs. When you look at year-over-year, we saw a decrease of 9% in overall volume in looking at Q3 for this year versus Q3 for last year. Once again, this is largely due to the impact of the Medicaid business decreasing significantly year-over-year, even though we saw our commercial volume grow year-over-year. Next slide.
To expand on this slide shows ACCRUFeR's TRx volume and growth by quarter since January of 2025. The blue line is total volume, the green line is commercial volume, and the red line represents Medicaid volume. Looking at the three lines for Q3 of this year, you can see that the total volume was slightly decreased in comparison to Q2, but for the last two quarters, the commercial book of business grew 8% for the most recent two quarters. If you compare the commercial book of business this year to date through September, and the same timeframe for last year, our commercial business grew by a big number at 19%. Conversely, our Medicaid channel for ACCRUFeR has declined for three quarters, almost exclusively due to the changes in New York and California.
Both states have gotten to a point of stable volume, so we should not be seeing these types of major dips in volume moving forward. The big takeaways that our business strategy has evolved to focusing on the commercial channel, and there is a lot of opportunity to seize big volume growth in commercial to offset what was previously seen in Medicaid. Next slide. To realize big growth in the commercial channel, we have an even heightened focus on targets with the most commercial patients in their practices. This slide shows a year-to-date view of January through September for 2025 in blue, compared to same timeframe for this year in orange, for both TRx and new prescriptions for targeted doctors. For TRx, we saw growth of 19% year-over-year, as I stated on the last slide.
For new prescriptions, ACCRUFeR grew 13% 2026 year to date versus prior year. Total NRxs and TRx were blunted in growth year-over-year, as I mentioned before, due to those offset issues that we had in both New York and California with respect to the Medicaid channels. When we look at the commercial growth of target providers year to date versus same time last year, TRx grew 32% and new prescriptions grew 26%, which shows two important things. One, how much growth potential is within our commercial channel. Secondly, how well we do in focusing on our most valuable sales targets. We have got the opportunity, we just need to seize it, and with more focus on our targeted doctors, which we have a very heightened focus on right now, we expect these types of results to continue and even grow. Next slide.
I wanted to share this slide as it breaks out our top eight commercial states for ACCRUFeR volume, and these states collectively account for 72% of ACCRUFeR's overall commercial volume. A few things jump out on this slide. First, we had an average of 18% growth across these states in comparing 2026 year-to-date commercial TRXs to the same timeframe last year. Secondly, Texas, our highest volume state for ACCRUFeR, grew 26%, and New York grew 18% within commercial channels, despite the setback with New York Medicaid. Third, California saw the highest growth with 50% more commercial volume this year versus last year, and that was also despite the changes seen within Medicaid at the start of this year.
This slide ultimately shows that we have strong momentum across the vast majority of our top eight states, and we have plans in place to drive growth further and increase pull-through where it's needed. Next slide. Shifting gears to marketing, we continue to pulse our digital marketing spend in ways to get the most value for every dollar spent. This slide shows rolling three months new prescription growth, represented by the black line, and the bars show digital impressions to the healthcare providers in purple, and to the consumers are in the yellow bars. Purple is the HCPs, yellow is our consumers. We have a very heavy focus on DTC, meaning advertising and marketing to consumers. We saw ACCRUFeR's new prescription growth for the commercial channel this year, and specifically in Q3, correlated to the volume of digital impressions during particularly heavy marketing months. Next slide.
With each year that we've done digital marketing, we've learned where to put more focus as it relates to which counties our physicians are most highly concentrated. Doing this type of geotargeting with digital marketing allows us to create awareness of ACCRUFeR in states and even counties where we see the highest yield of prescribing. This allows our marketing efforts to overlap where our sales team is focusing, and this is the best way to get the most uptake for ACCRUFeR. This has translated directly with the growth seen specifically in our high-volume states that I mentioned, which are eight of those on the previous slide. Next slide. This will be my last slide, but this one shows the highlights of what we've done within our social media channels of digital marketing.
We've seen consumers showing a tremendous interest in talking about their challenges with iron deficiency, specifically talking about their challenges in taking other oral iron medications that cause a high rate of stomach issues. We are working with several people that have a high following on social media channels to engage consumers in conversations and create awareness of options for them, such as ACCRUFeR. This has done a lot to extend our reach to over 1.7 consumers who follow these digital opinion leaders. I will pause there, and I will hand it over to Michael.
Thank you, Andy. Let me go straight to the numbers. Polly, if you could do the next slide. These are unaudited financial figures for Q3. Group net revenue was $11.5 million. This compares to $11.9 million that we had in Q2, but Q2 included a $0.6 million milestone. If you strip that out, we grew 2% quarter-over-quarter. The engine of the business in the U.S., ACCRUFeR, delivered $10.8 million, which is up 5% from the $10.3 million of prior quarter. This was driven by an increase in net revenue per prescription, which rose 4% from $208- $217. When all was said and done, we closed the quarter with $6.8 million in cash, which is down $8.3 million from the end of June. Three things that really drove the quarter. The price obviously made a big difference.
We had a fairly stable volume, so the 5% improvement helped us. We see a shift in the commercial, which is offsetting Medicaid, so that split from going, which is now about 80% commercial versus 20% Medicaid. That is a significant uptick in what we have seen in the past. The last quarter is really the first quarter where we can soon say that we had no more of the New York Medicaid drag. Next slide. If we looked at the U.S. revenue on a bridge, as mentioned, it grew from $13.3 million- $10.8 million. The OUS revenue grew from one or fell from $1 million- $0.7 million. That is really mostly driven by partner ordering patterns. In Q2, we had the $0.6 million milestone, which unfortunately we do not have every quarter.
Exclude the milestones, the group revenue went from $11.3 million- $11.5 million, or up 2%. I think I would point out that 94% of our group revenue now comes from the U.S., which is up compared to Q2. In next slides for a look at cash, as mentioned, we ended September with $6.8 million in cash. This is compared to $8.3 million at the end of June. So, used about $1.5 million for the quarter. I should mention that we did not draw on our credit facility in Q3, so this was mainly done by working capital, which we, as always, are offsetting with continued cost discipline. Next slide, please. If we go a little bit into the trends that drive the top line, if you put it over a three-year, I think that is the best way to put Q3 in context.
On the left, you see the quarterly ACCRUFeR net revenue. As you can see, strong growth through 2025, peaking at $13.5 million in Q4, then a step down in Q1 this year to $9.9 million. That is the New York Medicaid prior auth change that has an impact. Since then, we have rebuilt two quarters in a row, $10.3 million in Q2 and $10.8 million in Q3. In the middle, we see the net price per script following the same shape. It dipped to $190 in Q1 as payer mix shifted, and now it has recovered to $217. That is back towards the levels that we saw in 2025. On the right, we have total prescriptions. Q3 held about 49,000 scripts. Retail scripts were about 34,000, and consignment about 15,000. Volume is lower than what we had in 2025, as we deliberately walk away from the lower value Medicaid business.
So, really for me, the takeaway is that the reset is behind us. Revenue is growing again, and it is based on growing price and mix, not just volume. Next slide, please. Just to highlight the Viatris deal, as we have showed this slide before, but this is a pivotal moment in Shield's time. This agreement closed on September 30, so from the 1st of October, we have full commercial responsibility for ACCRUFeR in the U.S., and so that includes the entire sales force. What is really important here is it is a five-year royalty term. Gross margin will see a significant improvement and be in that 75%-80%. Some of that is going to be offset by an increase in operating costs. And I should say that while we certainly expect to see that lift, and we have had improvement from day one, not all that cost is improvement.
It is going to materialize on the first day. It takes a little bit to achieve all these synergies. But still, longer term, we see that almost a 2x improvement in EBITDA over this five-year deal. Next slide, please. Just to finish off on our 2026 priorities, this is just a quick update so that you can see where we are at year-to-date. Total revenue, $41.9 million, which includes the milestone. We generally see that we can hit most of the other goals that we set out for 2026. I do not think there is anything new on that. And with that, I will hand it over to Anders.
Sorry, I was on mute. Thank you, Michael. And we can go to the summary slide, the last slide then, please, in the presentation. Yep. As we showed you, U.S. ACCRUFeR results continue to grow, and we are especially happy as it is. We see our strategies working as to what Andy alluded to, the shift to commercially insured patients in showing an increase in commercial prescription and also showing an increase in net selling price. Our global partnerships continue to progress at a steady pace, those in the existing markets in Canada, in Europe, and the U.K., and with potential new launches in Korea and China next year. I will introduce Michael, who started on September 1st. We are very happy for that. We have a full executive team again.
And the big thing for us during the quarter is, of course, that we have full commercial control in the U.S. of ACCRUFeR, and that has really started, now it is a month ago, and this quarter will be the first quarter that really will highlight what the new financial profile of the company will look like. And the other thing with having full control of our U.S. operation and organization is that we have been and we still are actively looking for product or other partnerships so we can expand the product portfolio. And we are a much better place as a company to do that with full control of the U.S. commercial organization. That concludes our presentation part of this Q3 update, and we can now move on to questions. Polly?
Yes, perfect. Thank you very much all for the presentation today. We will start with some of the pre-submitted questions from investors, and do continue to ask questions within the chat functionality in the corner. So the first question, does the $6.8 million Q3 cash figure include any additional direct drawdowns, and how does the Q2- Q3 movement split between underlying operating cash flow and working capital timing?
What I will comment on is that we did not draw additionally in Q3 on our facility with Runway. Runway has been a great partner so far, and we certainly appreciate all the flexibility they provided us, but we did not have to utilize them in Q3. I think the second part of the question is more operational, so I won't really comment on that in these meetings.
Great. Thank you. The next question. In August, the Viatris transaction was said to enhance Shield's expectation of being operating profitable in 2026. What has changed, and how much of the shortfall is down to weaker sales versus additional costs?
Well, I can comment on the cost side of things, and I'll let Andy comment on the sales side. As normal with any type of these transactions, it does take a little bit of time before you realize all the synergies. So as of October 1st, we now had certain areas where we had doubled up in cost, if you will, and it takes a little bit of time to cancel the contracts and to realize all these savings that we expect to be seeing from this folding it all under one roof. While we still, from day one, it did have an improvement, it was not materialized at 100% just yet.
Thank you, Michael. Sorry, were you going to comment on that as well, Andy, or is that everything?
Yeah, I can just provide a little color beyond that. The fact is, I mentioned throughout my presentation the impact of New York and California Medicaid. With a pivot that goes back to commercial business, you are not going to see an immediate uptick. We have to now revamp our positions. We have to call on new targets. Ultimately, we have done a lot of work to find out exactly where we should be going and have done this in the past. I mentioned where we have done this in previous calls. We have done this with Texas. Texas has become our number one commercial state, and that happened because we had a very similar situation. We are definitely aware of how to do this.
We have been successful in the past in doing this, and I expect that we are going to be able to see the commercial business offset what we have lost with the New York and California Medicaid. It is just the fact that you are not going to see it. We just had this happen in Q2, and we are reporting on Q3. We are seeing that commercial business starting to really have upticks. New York is one of those growth states that we are seeing it in, being our second-biggest commercial state. We have a lot of plans, and I will speak to those in one of the questions, more so what we are going to do in Q4 to keep that going.
Great. Thank you, Andy. The next question, probably again for you, Andy. What is the plan to grow retail prescriptions in Q4 and through 2027, and when do you expect to reach the roughly 20,000 Rx per month needed for breakeven?
Okay. I was just mentioning, I wanted to touch on this even further, and the fact that we are doing a number of initiatives in Q4 that will continue into 2027. The first thing we're doing is we're in the process of reshaping sales territories. What that means is, with our big eight states, we're having a bigger focus on them, and we put even more reps in areas that we know we can get a higher yield. We're looking at that. We're targeting new providers that have the highest volume of commercial potential, not just in our big eight states, but across the whole country. That's a big, big part of where our operational shift is occurring and will continue to as we go on in the quarters.
We're doing, as I mentioned, that geotargeting, that we are getting, we're just getting a smarter spend of our digital marketing dollars. We know where the concentration of both patients and providers are, right down to a ZIP code level, and so we're really taking advantage of the data that's showing where that concentration of providers and patients are. Third thing is, we have a new market access team. One of the things that changed when we brought the Viatris team over was we had arranged for them in the past to be helping us with market access. We have a new team. Now we're in the process of looking at our contracting strategy and identifying payers that may be open to a deeper partnership with Shield and ACCRUFeR. That's currently ongoing.
As I mentioned, we launched six new social media influencers that got us 1.7 million more patients that we're able to go and reach, which is great. With respect to the crossover from Viatris to Shield with our sales team, any time that you're getting one company and you get the benefits of a co-promote, of course, that's why we did it, but one of the benefits of having everybody under one roof is the execution will be focused, and you know full well that everybody's going to be focused on the same business drivers. That's what we had. We had sales meetings to make sure everybody was aware of what we're focusing on and how they're going to pull through individually at their territory level.
That, I believe, with the really talented group of individuals that we've got and everyone really operating off of the same strategies and tactics that we have in place for the original Shield team, now expanded Shield team, I think there's going to be even better execution that comes from that. Lastly, I'll say that we're exploring partnerships with health technology companies, and what these companies can do is provide physicians and staff a deeper understanding of what's needed by each payer in terms of prior authorization information, all the way down to a patient level. We're looking at different companies that can help us and how we can help providers in the process of doing these prior authorizations that happen across most branded products. This is something we're looking into.
To the back half of the question, I cannot say exactly when we are going to get to volumes that are breakeven, but what I am able to say is I am confident in our sales and marketing strategies to see commercial growth get back to the growth numbers that we have seen in the past for ACCRUFeR.
Thank you, Andy. Excluding the lost New York Medicaid volume, why are retail prescriptions still below Q4 2025 levels. Is the market smaller than anticipated, and how is the sales force performing.
I will start there, I think, Andy. Also, I think, for those who follow us and also looked at Michael's slide that showed prescriptions and sales over the last three years, there is a seasonality. There is always a seasonality, as we have. The fourth quarter is always the highest quarter, and the first quarter is always the lowest quarter, and this sort of becomes a reset. So, it still follows that seasonality. We had more of an impact on the second quarter and third quarter this year following New York Medicaid, because not only did we lose a large portion of the Medicaid business, but those same providers who prescribe for Medicaid also used to prescribe for commercial. They stopped, actually. So we had to refocus, and we went to new targets, and that is the growth we see now. So, that is basically the gist of it.
I just wanted to comment on that. Sorry, Andy. Yeah, no, go ahead.
No, I think you hit a lot of the points I was going to mention, is that the large drop that you saw in the Medicaid channel was due to New York and represented about 85% of the drop, right? It was a very concentrated hit. Ultimately, I mentioned already, is that we- You know, especially with the federal landscape being what it is, that federal subsidized way that they were going about helping states, that that was not that it wasn't anticipated. We didn't know exactly when it was going to happen, but ultimately it did. We've made a pivot like we've done in the past with states like Texas. I'll stress again that New York is our second-biggest commercial state, right? There is opportunity there.
Ultimately, we see real opportunity with now a 100% focus on commercial book of business for us to pull that through. All the plans that we're playing off of right now come from experience in doing this and having good success in doing this. I am anticipating that, yes, we still saw a bit of the bleed out in Q3 from the impact of New York Medicaid, but I think we're at a stable point where we can say we've hit the bottom of where we are with that, and now everything is going to be focused on growth.
Great. Thank you. The next question. Following the move to full U.S. control on the 1st of October, having invoicing, collections, and customer payments arrangements move from Viatris to Shield, do you expect any temporary disruptions to cash receipts or higher working capital needs?
We do not. In fact, we were actually responsible for invoicing and receiving cash even under the prior arrangement. So there will be no disruption, and we don't expect there to be any cash impact as a result of this transaction.
Great. Thank you. Can you give us an update on China and Korea, including whether ASK Pharma's 2027 milestone payments could be brought forward, and are you considering monetizing any royalty streams?
I gave you an update that we, in best case, see a launch in both markets in 2027. Korea is further ahead because they already submitted their price and reimbursement application in this month, and China is still waiting for approval and will also submit the price and reimbursement application. The milestone from China was renegotiated, and part of that commercial milestone became a development milestone, and we received part of that in the beginning of this year. There are further milestones to be had in China. It's all dependent on price, what price level they will achieve. That could happen next year, but we don't know to what magnitude that can happen.
Great. Thank you, Anders. Given the challenges of bedding in the sales team, have your plans to acquire a second product changed, and what is the current thinking on the liquid formulation?
No. As I said in my presentation, it hasn't changed. This rather is reinforced. I think it's much easier for anyone who'd like to partner with us that we now own our whole organization in the U.S. We're not sharing it with anyone else, so we become sort of a much more obvious partner for the right products. That's that, and I did already comment on the liquid formulation. It's still ongoing stability data, and that's the next time point. That's where we're at with the suspension.
Perfect. Cavendish is forecasting operating profit of around $100,000 for 2027. Given the improved U.S. gross margins, do you think this forecast is fair?
We generally don't comment on the analyst's forecast. What I can say is that 2027 is a full year with improved U.S. economics of the Viatris deal. A full year of gross profit improvement, which is sort of offset by that high single-digit royalty and some additional costs. We look forward to seeing that unfold, but as I said, we don't comment on the analyst forecasts.
Thank you. Next question. With high-margin royalties growing from Norgine and other partners, and Korea and China to follow, have you considered replacing the 80-strong U.S. sales force with a digital-only marketing model to improve results?
Have we, Andy? Have we thought about replacing the entire sales force, or?
I can say.
What do you say?
Yeah, I can say that that would not be a prudent move. We are really looking at how do we make synergy happen between sales and marketing more than anything. I mentioned that is, we get our best yields in terms of uptake is when we have digital marketing that is either going in first or coming in after a sales presentation. That's really what we've gotten more and more data on how we can perfect that. But we're not able to run off of just one of those two strategic efforts that we put towards the marketplace. You do need both.
Perfect. Thank you. Does the company need further funding?
It's a fair question. I think it's one that we always think about. What I would point to is really what's changed. We ended Q3 with $6.8 million in cash. More importantly, from the 1st of October, we have full commercial control of ACCRUFeR in the U.S. with now an 80-territory strong sales force. With that, we keep more of every net dollar that we sell. Gross margin moved up. We expect a stronger cash generation, as we alluded to earlier. For us, really, the priority is to deliver on this improvement and drive the business towards profitability. I can't really speculate beyond what we already announced. What I can say is the economics of the business has changed as of October 1st, and that's really where our focus is.
Great. Thank you. Next question. Can you measure the effectiveness of your U.S. sales force? What are your early impressions of the sales per head following the changeover?
Yeah, I'll take that one. Well, I can say that in any commercial organization, you have to be measuring the effectiveness of every member of the sales force, and we're no different. Every sales representative has a sales goal to meet each quarter, and we measure their execution against that goal on a weekly basis. We have established coaching plans for every sales rep for them to reach their highest potential. So that's always going to be ongoing, and that's what was happening pre the Viatris deal and will continue after. So that's all there. We just concluded sales meetings with both the management team and the sales reps, just to get a heightened focus on what's needed by everyone in Q4. Those just got completed.
I mentioned that we're optimizing all sales territories right now to ensure that each sales rep has the most potential to grow across the entire country. So our early impressions are that we have inherited a very talented sales team from Viatris. As I mentioned, we're looking to be even more aligned on our focused sales execution as it ties back to our sales and marketing strategies.
Yeah, Andy, just to add, I mean, we've always had full view into the performance of every sales territory. It wasn't like, "Oh, now we got to see how the Viatris reps performed individually." We've seen that all along. We have had and still, of course, have all the data from since we started. I just wanted to add that, if that was the type of question. Yeah.
Thank you both. Revenue per prescription rose to $217. How much of that comes from the better payer mix, and should it keep rising as commercial prescriptions grow?
I can take that one.
Yeah.
Yeah, there's definitely an improvement in mix that impacts that. As we see this, it's a little more complex than just the private insurance. There's different levels within the private insurance plans. That's what's driving most of it, is the mix within those plans. Then, of course, there is the continued focus from Andy's team on going to the right prescribers that provides the right mix.
Great. Thank you. With Medicaid now about 20% of the retail mix, is that a stable base from here, and will the Medicaid drag effectively fall away from Q4?
Yeah, I can take that. I think, as I mentioned, we had basically a 93% loss of the Medicaid business as a once plus, right? So that's as big a hit as you can possibly take. We're monitoring every state, so we know really where the leveling off points are. I believe we got to that point for the most part in Q3. So, you know, we look at our business as now we understand where we are, all the inherent risk of these really large states that occupy double-digit parts of our total volume. That's now pivoted to a commercial focus, and we're doing just that. So there is a full understanding on where our business needs to come from and where we're focusing our efforts as we move into and have moved into Q4 and into next year.
Yeah, I don't want to give percentages because percentages are, by definition, are going to be something that I would estimate right here. But I can say that we are at a point where we expect to be able to rebound off of where we are from a stable volume in Medicaid.
Great. Thank you, Andy. Are there any other major sales states that still allow Medicaid without prior authorizations?
Yeah, we have a couple of states that are in that situation. One that we classify as one of our bigger states in our top eight, and that's North Carolina. North Carolina has no prior authorization, and ultimately, it's relative to the opportunity. It's a smaller state than California and New York, but by definition, it opens up the opportunity for just greater patient access to ACCRUFeR by definition of not having a prior authorization. That's in talking about our big eight states. That's really the only one that has that distinction.
Ultimately, we're, because we've seen a pattern, you know, ultimately, and not knowing exactly what will happen in the future and can't predict it, we're just always ready for and preparing for what do we do if we do have any changes in the managed care landscape as it would pertain to a state like North Carolina. No, we're not seeing any other major high-volume states that could be impacted by a PA, other than the North Carolina that emerged.
Great. Thank you. This might be another one for you. What are the current headwinds or difficulties that the sales team are potentially facing?
Well, I think the situation of headwinds, I think we've talked about it pretty extensively. When you have to convert over to a new book of business and having new providers that are falling within that, I wouldn't call them headwinds per se. It's a shift. They have to shift their focus. But we have a really talented sales team. They are able to make that shift happen. They're understanding the why behind it. We give a lot of training so that they're focused and ready to do that. So, there's no greater headwinds that they're facing now than they ever have. It's just more of what's the support that we're able to provide them so that they can continue the focus of just driving as much business as possible for ACCRUFeR, and that's what we're focused on.
Great. Thank you. I think we are probably nearing the last of the questions now, as some of them have already all been covered, really. A question that has just come in, do you expect the Medicaid volume to fall further in Q4?
I think we have covered that.
Fair enough. I think that is pretty much all of the questions that we have covered off now. To kind of close off today, before we finish, have you got any last kind of comments, Anders, Andy, and Michael, before we finish for today?
No. First of all, thank you for taking time to listen in to our Q3 update and for all the questions. I think the questions gave us an additional opportunity to put further light on what we are doing. As we said initially, and you heard from all three of us, the strategy we have gone into, focusing on the commercial insured patient, is really working. As we said also as well, Q3 is the last quarter where we have any impact of New York Medicaid. To Anders' point, the Medicaid volumes are stable. Q4 will have a whole new financial profile. We look forward to sharing that with all of you when that time comes, which typically is more or less a month after when the quarter ends. We typically do not say when, but somebody asked why we were late with this quarter.
We're not. This is typically the timing we have. It will take a few days. Anyway, thanks all. Thank you all so much for taking the time, and have a good rest of your day.
Yeah. Thanks again for the Shield team for joining us today. On behalf of Shield Therapeutics, thanks for joining, and the recording will be available on the website shortly after this. If there are any other questions that you have after the presentation, feel free to post those on our website, and we'll get back to you. Thanks again, and have a great afternoon.