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Shield Therapeutics has announced a co-commercialisation deal for Accrufer in the US with Nasdaq-listed Viatris, which will involve an expanded salesforce and a 55%/45% revenue/cost split between the two companies. Although this is a clear departure from Shield’s stated self-commercialisation strategy in the US, we see merits in the deal, with the combined resources allowing Shield a faster sales ramp-up and quicker time to profitability. The decision coincides with a US$18.5m (£15.1m) equity raise and an additional $10m in funding from its largest shareholder, AOP Heath. We estimate that this raise should be sufficient to take the company to break-even, provided revenue targets are achieved. We have updated our estimates to incorporate the deal economics and fund-raise. Our overall valuation increases to £403.4m (versus £377.0m previously), but our implied per-share valuation declines to 79p/share (versus 146p/share previously) due to the higher post-equity raise share count.

Shield Therapeutics has announced a co-commercialisation deal for Accrufer in the US with Nasdaq-listed Viatris, which will involve an expanded salesforce and a 55%/45% revenue/cost split between the two companies. Although this is a clear departure from Shield’s stated self-commercialisation strategy in the US, we see merits in the deal, with the combined resources allowing Shield a faster sales ramp-up and quicker time to profitability. The decision coincides with a US$18.5m (£15.1m) equity raise and an additional $10m in funding from its largest shareholder, AOP Heath. We estimate that this raise should be sufficient to take the company to break-even, provided revenue targets are achieved. We have updated our estimates to incorporate the deal economics and fund-raise. Our overall valuation increases to £403.4m (versus £377.0m previously), but our implied per-share valuation declines to 79p/share (versus 146p/share previously) due to the higher post-equity raise share count.

Shield Therapeutics - Viatris strategic partnership to expedite scale-up

Shield Therapeutics reported H122 results reflecting the fact that its commercial activities for Accrufer are bearing fruit. US total prescriptions soared fourfold to 11,223 compared to H221, including an 87% q-o-q increase in Q222. This compares well with our existing and unchanged forecast for 26,700 prescriptions for 2022. We maintain our long-term Accrufer growth assumptions, and continued successful execution could lead to material upside in the shares, in our view, but we reiterate that Shield will need additional capital to execute its growth plans.

Shield Therapeutics reported H122 results reflecting the fact that its commercial activities for Accrufer are bearing fruit. US total prescriptions soared fourfold to 11,223 compared to H221, including an 87% q-o-q increase in Q222. This compares well with our existing and unchanged forecast for 26,700 prescriptions for 2022. We maintain our long-term Accrufer growth assumptions, and continued successful execution could lead to material upside in the shares, in our view, but we reiterate that Shield will need additional capital to execute its growth plans.

Shield Therapeutics - Tangible progress in US Accrufer launch

Shield Therapeutics’ (STX) value stems from Accrufer’s US market opportunity as the company seeks to maximise returns through self-commercialisation. Recent progress on payer coverage and prescription uplift bodes well for future US expansion, although we expect a more modest growth trajectory than previously as STX focuses on expanding market outreach. The successful execution of its commercial plans relies on adequate fund-raising, which remains challenging in the current macro environment. The recent $10m convertible shareholder loan extends the cash runway into early FY23, but a further £25m would be required to break even, according to our estimates. We have introduced more conservatism in our estimates and as a result our valuation resets to £371.0m or 172p/share (previously £631.3m or 293p/share).

Shield Therapeutics’ (STX) value stems from Accrufer’s US market opportunity as the company seeks to maximise returns through self-commercialisation. Recent progress on payer coverage and prescription uplift bodes well for future US expansion, although we expect a more modest growth trajectory than previously as STX focuses on expanding market outreach. The successful execution of its commercial plans relies on adequate fund-raising, which remains challenging in the current macro environment. The recent $10m convertible shareholder loan extends the cash runway into early FY23, but a further £25m would be required to break even, according to our estimates. We have introduced more conservatism in our estimates and as a result our valuation resets to £371.0m or 172p/share (previously £631.3m or 293p/share).

Shield Therapeutics - Focus on increasing US market access

Shield Therapeutics reported FY21 results in line with market expectations, recording revenue of £1.5m, including a maiden £0.1m contribution from the United States after the July 2021 US launch of Accrufer. Early indications from sales outreach efforts are encouraging, with Shield reporting improved payor coverage and 100% quarter-on-quarter growth in US prescription volumes in Q122. The out-licensing agreement signed with KYE Pharmaceuticals in Canada (in Q122) could expand this market opportunity further. The company also announced a $10m convertible shareholder loan intended to extend its cash runway to end FY22 but comes as Shield was unable to complete a planned $30m equity issue, which would have provided access to a larger, non-dilutive debt facility. Shield will continue to examine other financing opportunities, but may reassess how best to allocate its available resources to its ongoing US sales initiatives, creating a possible overhang for its near-term growth prospects. Our estimates and valuation are under review.

Shield Therapeutics reported FY21 results in line with market expectations, recording revenue of £1.5m, including a maiden £0.1m contribution from the United States after the July 2021 US launch of Accrufer. Early indications from sales outreach efforts are encouraging, with Shield reporting improved payor coverage and 100% quarter-on-quarter growth in US prescription volumes in Q122. The out-licensing agreement signed with KYE Pharmaceuticals in Canada (in Q122) could expand this market opportunity further. The company also announced a $10m convertible shareholder loan intended to extend its cash runway to end FY22 but comes as Shield was unable to complete a planned $30m equity issue, which would have provided access to a larger, non-dilutive debt facility. Shield will continue to examine other financing opportunities, but may reassess how best to allocate its available resources to its ongoing US sales initiatives, creating a possible overhang for its near-term growth prospects. Our estimates and valuation are under review.

Shield Therapeutics - Operating results eclipsed by financing difficulties

Shield Therapeutics (STX) successfully launched its key asset, Accrufer (oral ferric maltol for iron deficiency), in the US market on 1 July, in line with previous guidance. The US commercialisation of Accrufer is key to unlocking value (the US iron market is a huge market at ~10 million patients per year and is the key value driver) and FDA approval in 2019 led to the broadest possible label, which encompasses iron deficiency from any cause. The H121 results reported total revenue of £0.5m entirely from royalties on Feraccru sales from European partner Norgine (versus £8.9m in H120, of which £8.7m related to a milestone payment from ASK Pharm for China rights). We value STX at £631.3m or 293p/share.

Shield Therapeutics (STX) successfully launched its key asset, Accrufer (oral ferric maltol for iron deficiency), in the US market on 1 July, in line with previous guidance. The US commercialisation of Accrufer is key to unlocking value (the US iron market is a huge market at ~10 million patients per year and is the key value driver) and FDA approval in 2019 led to the broadest possible label, which encompasses iron deficiency from any cause. The H121 results reported total revenue of £0.5m entirely from royalties on Feraccru sales from European partner Norgine (versus £8.9m in H120, of which £8.7m related to a milestone payment from ASK Pharm for China rights). We value STX at £631.3m or 293p/share.

Shield Therapeutics - 2021 focus on Accrufer

United Kingdom

ImmuPharma plc, a pharmaceutical company, develops drug candidates based on peptide therapeutics to treat serious medical conditions. The company?s lead product candidates include the Lupuzor, which is in Phase III clinical trials for the treatment of lupus, a chronic, autoimmune, and inflammatory disease; IPP-204106, an anti-cancer nucleolin antagonis peptide program that has completed Phase I/IIa clinical trials to treat cancer; IPP-201007, which is in pre-clinical development stage for the treatment of inflammatory/allergic conditions, such as asthma and rheumatoid arthritis; IPP-102199 that is in pre-clinical development stage to treat moderate and severe pain; and IPP-203101, a peptide-based antibiotic, which is in pre-clinical development stage for the treatment of lethal infections, such as methicillin-resistant staphylococcus aureus and other hospital acquired infections. Its discovery pipeline includes heterocyclic ureas scaffolds; and peptide to drug converting technology, which enhances a peptide?s plasma half-life and efficacy. ImmuPharma plc has collaboration arrangements with the Centre National de la Recherch� Scientifique; and the Institut National de la Sante et de la Recherche Medicale. The company was founded in 1999 and is headquartered in London, the United Kingdom.

ECO Animal Health Group plc manufactures, supplies, and markets pharmaceutical products for the animal health markets worldwide. The company offers Aivlosin, a macrolide antibiotic for the treatment of respiratory and enteric diseases in pigs and poultry. It also provides generic drugs, such as Ecomectin, Ecoheart, Ecotraz, and Ecomintic, which are endectocides and other antiparasitics for the treatment and prevention of parasites in cattle, sheep, pigs, horses, and dogs; and Chlortet and Oxytet for the treatment of bacterial infections in pigs, poultry, and cattle. The company was founded in 1972 and is headquartered in New Malden, the United Kingdom.

4d Pharma PLC operates as a pharmaceutical company. The Company develops therapeutic drugs that target auto-immune diseases. 4D Pharma offers its products to the medical and healthcare industries.

Alliance Pharma plc, a specialty pharmaceutical company, engages in the acquisition, marketing, and distribution of pharmaceutical products in the United Kingdom, Ireland, and internationally. The company provides prescription only medicines, over the counter medications, cosmetics, and nutritional supplements, as well as medical devices. It offers products for use in various therapy areas, including acquired healthcare, cardiovascular, central nervous system, child health, consumer health, dermatology, endocrinology, gastroenterology, obstetrics and gynaecology, oral health, oncology, stoma care, toxicology, travel health, urology, vitamins and minerals, and others. The company distributes its products through pharmacies, supermarkets, healthcare distributors, and retailers, as well as online retailers. Alliance Pharma plc was founded in 1996 and is headquartered in Chippenham, the United Kingdom.

Benchmark Holdings Plc is an animal health, technical publishing and sustainability business. The Company's activities include the development, manufacture and commercialisation of animal health products with a key focus on aquaculture. Benchmark also provides consulting services.

Allergy Therapeutics plc, a specialty pharmaceutical company, focusing on allergy vaccination primarily in Europe. The company?s primary flagship product consists of the Pollinex Quattro for the treatment of allergic conditions; and monophosphoryl-lipid A, a substance that enhances the immune response to an antigen or allergen. It offers sublingual product, including Oralvac Compact; Venomil product, which is used for the wasp and bee treatment; probiotic products, such as Kallergen-Th, ATI Prob, and Pollagen; a novel tyrosine-adsorbed, modified-allergen product developed for treatment of perennial mite allergy; and DAP, a product for use in the diagnosis of type I or immediate hypersensitivity to benzylpenicillin and related antibiotics (betalactams) by means of cutaneous tests (prick and intradermal). The company markets its products in injectable and sublingual formats under various brands. Allergy Therapeutics plc was founded in 1934 and is based in Worthing, the United Kingdom.

Oncimmune Limited develops and commercializes products for the detection of cancerous. It develops autoantibody assay technologies that have the potential to early detection a range of solid cancer tumor types. It offers EarlyCDT-Lung, a blood test that is ordered by a doctor to aid in the risk assessment and early detection of lung cancer in high-risk patients and to stratify indeterminate pulmonary nodules for the risk of malignancy. The company is based in Nottingham, the United Kingdom.

Genedrive PLC operates as a biotechnology company. The Company offers diagnostic platform to offer quick and sensitive molecular analysis within an ultra compact unit. Genedrive provides its services in the United Kingdom and United States.

Akari Therapeutics PLC manufactures and develops anti-inflammatory drugs. The Company provides treatments for a wide range of autoimmune and inflammatory diseases. Akari Therapeutics markets it products in the United States and United Kingdom.

OptiBiotix Health plc, a life sciences company, engages in the research and development of microbiome modulators in the United Kingdom. The company has a pipeline of microbiome modulators that can impact on lipid and cholesterol management, energy harvest, and appetite suppression. Its products under development include novel microbial strains for cholesterol and lipid management; an ingredient formulation, which is scientifically formulated to support and maintain weight loss; and microbiome modulators that enhance the growth of specific microbial species in the human microbiome. The company is based in York, the United Kingdom.

Bal Pharma Limited researches and develops bulk drugs and intermediates.

Peterlabs Holdings Berhad manufactures, distributes and trades animal health and nutrition products for livestock and companion animals. The Company markets its products primarily to farmers and livestock breeders.

BLIS Technologies Limited activities include the commercialization of Bacteriocin-Like Inhibitory Substances.  The Company develops products used for the prevention of bacterial throat infections.

Agile Therapeutics, Inc. develops women's healthcare products. The Company provides contraceptive patch containing the active ingredients levonorgestrel and ethinyl estradiol, as well as progestin-only birth control patch. Agile Therapeutics discovers a pipeline of investigational contraceptive products in the United States.

Extrawell Pharmaceutical Holdings Limited, through its subsidiaries, markets and distributes imported pharmaceutical products, healthcare, and nutritional products.  The Company also develops, manufactures, and sells pharmaceutical products in China.  In addition, Extrawell exploits gene inventions, researches genome technology, and develops and manufactures genechips.

China Health Group Inc. researches, develops, and commercializes drug products.

AusCann Group Holdings Ltd operates as a holding company. The Company, through its subsidiaries, develops cannabis based medical products. AusCann Group Holdings produces and sells cannabinoid medicines for application in anti-convulsion, neuroprotectant, anti-inflammatory, anti-nausea, glaucoma, pain management, and appetite stimulation areas.

Invion Limited develops pharmaceutical products for the treatment of asthma and smoking cessation.  The Company also is involved in the treatment autoimmune and inflammatory diseases, such as rheumatoid arthritis.

KYUNG NAM PHARM CO., LTD. manufactures and research in the development of pharmaceutical ingredients. The Company provides human placenta ingredients to pharmaceutical manufacturers. It also provides vitamin and cosmetic products through its subsidiaries.

Woogene B&G Co., Ltd manufactures animal health products and veterinary medicines such as anti-infectives, pesticide, and antibiotics.  The Company also produces nutraceutical such as enzyme, and probiotics, feed supplement.

Shield Therapeutics plc, a specialty pharmaceutical company, focuses on the development and commercialization of secondary care-focused pharmaceuticals. Its lead product is Feraccru, a novel therapy for the treatment of iron deficiency anaemia (IDA) in patients with inflammatory bowel disease. Its products pipeline includes PT20, a novel iron-based phosphate binder for the treatment of hyperphosphatemia related to chronic kidney disease (CKD); PT30 and PT40 that are intravenous iron formulations; and Feraccru to treat patients with IDA related to CKD and other indications. The company was founded in 2008 and is based in Gateshead Quays, the United Kingdom.

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Shield Therapeutics (STX LN)

Shield Therapeutics - Viatris strategic partnership to expedite scale-up

Shield Therapeutics has announced a co-commercialisation deal for Accrufer in the US with Nasdaq-listed Viatris, which will involve an expanded...

Edison Investment Research

Shield Therapeutics - Tangible progress in US Accrufer launch

Shield Therapeutics reported H122 results reflecting the fact that its commercial activities for Accrufer are bearing fruit. US total prescriptions...

Edison Investment Research

Shield Therapeutics - Focus on increasing US market access

Shield Therapeutics’ (STX) value stems from Accrufer’s US market opportunity as the company seeks to maximise returns through...

Edison Investment Research

Shield Therapeutics - Operating results eclipsed by financing difficulties

Shield Therapeutics reported FY21 results in line with market expectations, recording revenue of £1.5m, including a maiden £0.1m contribution from...

Edison Investment Research

Shield Therapeutics - 2021 focus on Accrufer

Shield Therapeutics (STX) successfully launched its key asset, Accrufer (oral ferric maltol for iron deficiency), in the US market on 1 July, in...

Edison Investment Research

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