Shield Therapeutics (LON:STX) is a commercial-stage company delivering specialty products that address unmet medical needs, with an initial focus on treating iron deficiency (ID) with Feraccru®/Accrufer®. FDA approval of Accrufer with a broad label in the US opens up a market currently worth over $1bn in intravenous (IV) iron alone. Commercialisation of Feraccru is well under way in Europe, where it was approved in 2016; in the US, it is dependent on an upcoming licensing deal. Additional data released from the AEGIS head-to-head (H2H) study demonstrate favourable patient outcomes from Feraccru vs. IV iron treatment.
- 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 keep investing in its R&D pipeline, to benefit from both immediate and long-term value.
- H2H data: Top-line results demonstrating the non-inferiority of Feraccru to IV iron therapy were released in Mar’19. Additional information presented at a conference this week included the response rate for Feraccru, and its effectiveness in the maintenance of haemoglobin (Hb) levels.
- More choice: This is significant for patients and clinicians in providing an alternative option for treatment of IDA, particularly as an alternative to IV therapy in patients intolerant of other oral therapies. For payers like the NHS, Feraccru has cost-effectiveness benefits in preventing recurrence of IDA.
- Risks: All drug companies carry development risk. However, the risks with STX are limited because of Feraccru/Accrufer’s simplicity and clinical profile. Given the FDA approval, the main risk is achieving the most appropriate commercial partner and executing on its global commercialisation strategy.
- Investment summary: The approval of Accrufer reinforces our view that STX is at an exciting juncture. It has delivered on all goals set at the time of its IPO in 2016. Feraccru/Accrufer has been validated by regulatory approval in both the EU and the US, and the commercial deal in Europe looks set to be repeated in the US. Announcement of its commercial partner, together with the terms of any deal, represent the next valuation inflection point.
