# Shield Therapeutics: Optimism over US deal

- Link: https://www.directorstalkinterviews.com/shield-therapeutics-optimism-over-us-deal/412860104
- Published: 2020-09-21T15:15:43+01:00
- Author: Amilia Stone

**Shield Therapeutics plc** (LON:STX) is a commercial-stage company delivering specialty
products that address patients’ unmet medical needs, with an initial focus on treating
iron deficiency (ID). Feraccru/Accrufer has been approved by the regulators in both
Europe and the US. The company has an established commercial relationship with Norgine
for Europe and signed a licensing deal with ASK Pharm for the Chinese market in 
1H’20. Management has indicated that several discussions are ongoing to secure an
optimal commercial deal for the US, which reassured the market. Meanwhile, on current
assumptions, STX has a cash runway into 1Q’21.

 * **Strategy:** STX’s strategy is to out-license the commercial rights to its products
   to partners with marketing and distribution expertise in target markets. These
   deals allow STX to retain its intellectual property (IP) and to keep investing
   in its R&D pipeline, while benefiting from immediate and long-term value.
 * **Interims:** STX indicated that there remains a positive trend in Feraccru use
   in Europe with packs sold by Norgine up 50% over the previous six-month period.
   Both COGS and SG&A costs were higher than expected for specific reasons, yet 
   STX still recorded an underlying profit of £2.8m (-£3.7m) for 1H’20.
 * **Deal update:** Discussions between ASK and the regulator in China have indicated
   that the development programme for Feraccru might be less onerous than anticipated,
   making a launch in 2023 possible. Discussions with multiple interested parties
   in the US continue, suggesting that a deal is not too far away.
 * **Risks:** 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.
 * **Investment summary:** Interim results confirmed the market’s expectations and
   reiterated the length of Shield Therapeutics’ 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.

[DOWNLOAD THE FULL REPORT](https://www.hardmanandco.com/wp-content/uploads/2020/09/200918-Hardman-STX-interim-results-update.pdf)

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