Shield Therapeutics: Focused on US market penetration

Hardman & Co

Shield Therapeutics plc (LON:STX) is a commercial-stage pharmaceutical company delivering specialty products that address patients’ unmet medical needs, with an initial focus on treating iron deficiency (ID). Accrufer® has just been launched in the US by Shield, where the initial aim is to greatly improve market awareness of its differentiating characteristics as an oral ID drug. In other territories, Feraccru® is being commercialised through licensing and partnerships. The US market has enormous potential, but, even on conservative forecasts with respect to market penetration, Shield is forecast to become profitable and cash-generative in 2023.

Strategy: Outside the US, Shield’s strategy is to out-license commercialisation rights to partners with appropriate expertise in target markets, which has been successfully achieved in Europe and China. In the US, Shield has decided to sell Accrufer itself, thus retaining a greater share of profits for shareholders.

Accrufer launch: Accrufer was launched in the US on 1 July, with the strapline “Discover the legend of tolerable oral iron”. New market research has indicated that Shield Therapeutics needs to raise awareness of Acrrufer’s clinical profile and positioning with the key prescribers responsible for 60% of oral iron Rx.

Valuation: DCF-modelling each of the three main income streams – the US, Europe and China – generates an NPV, which, summed together, gives an EV for the group of $852m/£608m, or 281p per share. The current share price clearly applies a hefty discount for the execution risk associated with Accrufer.

Risks: While there remains regulatory risk in China and Korea, Feraccru/ Accrufer has been de-risked by regulatory approvals in Europe and the US. There is execution risk associated with Shield’s go-it-alone strategy in the US, with a 12-month goal to increase awareness and establish payor coverage.

Investment summary: The Shield Therapeutics-led launch of Accrufer was always the best option, in our opinion. Now that the period of commercial uncertainty in the US is over, the near-term target is to raise awareness, promote patient access programmes and establish payor coverage. The market seems overly worried about the “apparent” slow start, but any news on sales traction and/or the signing-up of payors should act as a catalyst to narrow the valuation disconnect.

DOWNLOAD THE FULL REPORT

Share on:
Find more news, interviews, share price & company profile here for:

    Volta Finance: Strong 2024, Positive 2025 outlook (LON:VTA)

    Discover insights from Mark Thomas of Hardman & Co on Volta Finance Ltd (LON:VTA), exploring its impressive performance and outlook for 2025.

    Real Estate Credit Investments: Opportunities, risks and market trends

    In an exclusive interview, analyst Mark Thomas discusses Hardman & Co’s latest report on Real Estate Credit Investments, exploring the rise of private credit and its implications.

    Real Estate Credit Investments – Private credit momentum in the RECI context (Video)

    Hardman & Co’s Mark Thomas breaks down the opportunities and risks, from the competitive edge RECI holds over banks and private credit funds

    Apax Global Alpha’s Rising Deal Activity and Investment Outlook (LON:APAX)

    Apax Global Alpha Ltd, discussed with Hardman & Co's Analyst Mark Thomas, is witnessing rising deal activity and impressive exit performance in 2024.

    ICG Enterprise Trust: Capital allocation, returns and buybacks (LON:ICGT)

    Explore ICG Enterprise Trust's strategic capital allocation and its impact on returns with Hardman & Co's Mark Thomas in DirectorsTalk's exclusive interview.

      Search

      Search