Shield Therapeutics plc (LON:STX) is a commercial-stage pharma company delivering specialty products that address patients’ unmet medical needs, with an initial focus on iron deficiency (ID). Following launch of Accrufer® in the US in July 2021, the initial challenge was to greatly improve market awareness of its differentiating features as an oral ID drug. The US market offers enormous potential, but the uptake has been slower than the market had anticipated. While considerable progress has been made, in order to accelerate prescription (Rx) growth and obtain sales traction, more capital will be required by the end of 2022.
- Strategy: In the US, Shield Therapeutics is commercialising Accrufer itself, thus retaining a greater share of profits for shareholders. Outside the US, Shield’s strategy is to out-license commercial rights to partners with appropriate expertise in target markets, which has been achieved in Europe, China, Republic of Korea and Canada.
- US penetration: With its 2021 results release, Shield indicated that physician awareness of Accrufer had improved greatly, and payors covering >100m lives have now been contracted. This has resulted in a 100% increase in Rxs in 1Q’22 vs. 4Q’21. The aim now is to increase the sales team to accelerate Rx growth.
- Financing update: Shield has taken on a $10m shareholder loan to extend its cash runway into 4Q’22. Meanwhile, it is looking at all possible approaches to raise additional working capital to expand the sales team and accelerate the rate of progress, with the aim of achieving peak sales at the earliest possible time point.
- Risks: With a completely new commercial team, the key risk was in the execution of its commercial strategy for Accrufer in the US. Taking longer than expected to achieve sales traction, Shield Therapeutics will require more capital at a time when investors have become increasingly risk-averse.
- Investment summary: Earlier in 2022, the market reacted badly to news that the initial uptake of Accrufer in the first six months from US launch had been slow. Now it has reacted again to news that the company will require more capital by the end of 2022. However, all the signals are that Accrufer is moving in the right direction. Additionally, the market is ignoring the fact that iron replacement is a hot area, as evidenced by recent M&A activity.