Shield Therapeutics PLC (AIM:STX, OTCQX:SHIEF) is to raise up to US$27.5 million of new funds to support its development of Accrufer, its iron deficiency treatment, with proceeds earmarked to accelerate commercial progress and to support working capital.
The company, in a statement, said it intends to invest in US commercial activities with the goal of accelerating the launch curve and increasing the net sales price for Accrufer.
It will receive US$20 million through a new senior debt facility whilst an equity fundraise (split between a share placing, a subscription and an offering to retail investors) seeks to bring in up to US$7.5 million of additional funds, US$6.1m of which was confirmed later in the day.
New shares were sold at a price of 8p, a discount of around 18% to Wednesday’s closing price.
It also expects to repay an existing US$5.7 million loan with the proceeds.
Shield told investors it remains highly confident in Accrufer's potential and highlighted that it could generate significant free cash flow – with net product revenue in the US alone estimated by management to have the potential of exceeding US$120 million by 2025, plus further upside from royalty and milestone revenue.
The company noted that 20 million people are estimated to have anaemia in the US and 13.4 million prescriptions are written every year (most of which, it says, are for over-the-counter iron therapies).
It represents a total market opportunity of some US$2.3 billion, the company said.
Looking ahead, Shield estimates its market share can grow from 1.0% in 2023 to 4.3% by 2025, which would translate to over 500,000 annual prescriptions in the US by 2025 and potentially exceeding US$120 million in sales.
The company anticipates a gross margin on Accrufer net revenues of over 45% by 2025, factoring in various costs and a 5% royalty due to Vitra Pharmaceuticals. The company expects to become cash flow positive by Q4 2024.
Additionally, Shield expects to see a steady increase in its own royalties coming from the Feraccru product sales by Norgine in 2023, and it is exploring more partnerships in specific regions.
Shield also reported its interim results today for the six months ended 30 June 2023.
It generated US$8.6 million of revenue and other income, driven by a 118% increase in Accrufer sales in the US to total US$3.7 million – with around US$4.3 million being received as upfront payment from Viatris as part of a commercial collaboration deal.
Accrufer’s net average sales price was US$119 in the first half, compared to US$124 in the preceding six-month period. The growth company reported a US$12.6 million loss for the period, narrowing from US$15.1 million in the same period a year ago.
The company ended the period with US$13.6 million of net cash, whilst its cash burn was reported at US$3.3 million in the half.
Chief executive Greg Madison described it as an excellent half.
“We successfully initiated the Accrufer commercial partnership with Viatris, completed the build-out of the combined team and effectively implemented our new commercial growth strategy and marketing campaign.
“Our strong performance, following the completion of the commercial expansion in May, is evidenced by the momentum achieved across each of our KPIs and consistent, significant prescription growth.
“These results reflect the unwavering dedication and deep experience of our outstanding team and our commitment to make Accrufer the oral iron of choice.”
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