Evidence from clinical studies shows it provides long-term treatment for maintaining the body’s iron stores. In our view, these factors provide a solid support for negotiating attractive deal terms.
Emma Ulker, Proactive Research
What Shield does
Its lead asset, Feraccru (Accrufer in the States), is an oral treatment for iron deficiency with or without anaemia, which is approved in Europe and the US.
The US opportunity alone could be worth in excess of US$1bn, analysts reckon.
A deal with ASK Pharm (Beijing Aosaikang Pharmaceutical), covers China, Hong Kong, Macau and Taiwan to market Ferracru.
The drug has a range of features that help differentiate it from the more established iron treatments including:
o Twice-daily dosing without food providing high iron availability
o Raises haemoglobin and iron levels effectively
o Prolonged therapy maintains Hb levels
o Well tolerated
o Non-inferior to IV iron
How it is doing
Shield swung strongly into profit in its first half following an US$11.4mln upfront payment from ASK Pharm, its partner in China.
Revenues for the half-year to June jumped to GBP8.9mln (2019: GBP430,000) with net sales in Europe of Feraccru rising by 50%.
Shield posted a profit for the six month period of GBP3.1mln against a loss of GBP4.2mln over the same period a year earlier.
Tim Watts, Shield’s chief executive said it was making ‘excellent’ progress in China with ASK in reaching agreement on a development plan for Feraccru with the regulatory authorities.
In Europe, Watts said sales of Feraccru in the first half matched the whole of 2019 even with disruption from the coronavirus pandemic.
Shield’s priority for the rest of the year is to find a US partner, he added.
What the boss says: Tim Watts, chief executive
“Several of these have [ US parties] signed confidentiality agreements, several have submitted non-binding offers and more detailed negotiations have been undertaken with a number of parties,” he noted.
“We remain confident of securing a partner in 2020 and have recently ordered launch stocks of US packs of Accrufer which should be available for sale by around the end of 2020.”
What the research house says: Hardman
“All drug companies carry development risk, but STX’s has been limited by regulatory approvals in the EU and the US. The biggest risk now is commercial execution. Having achieved deals in Europe and China, securing a partner for Accrufer in the US remains the top priority for 2020.
“Interim results confirmed the market’s expectations and reiterated the length of STX’s current cash runway in the absence of a US licensing deal. In these uncertain times, Feraccru provides a really good option to physicians seeking alternative therapies for ID patients reluctant to attend hospitals/clinics for intravenous (iv) iron therapy. Meanwhile, management reassured the market that progress is being made towards closing a US commercial deal in the near future.”
What the analyst says: Emma Uiker
“The outcomes of the analysis are strongly supportive of ongoing discussions for the global commercialisation, pricing and reimbursement of Feraccru. This includes supporting STX’s partner Norgine to negotiate on pricing and coverage decisions in the broader European markets as well for ASK Pharm, the company’s partner in China,” said Proactive’s analyst Emma Ulker.
“A licensing deal in the US for Accrufer can start to unlock the world’s largest iron replacement market which represents c70% of the estimated US$3bn value of the global market.”