With the growth in popularity of Shield Therapeutics PLC's (AIM:STX, OTCQX:SHIEF) Accrufer prescription iron medicine, Stifel has initiated coverage with a 'buy' rating on the company.
Accrufer, which is prescribed treats iron deficiency and anaemia, has seen a "dramatic" acceleration in prescription and sales growth since being launched in mid-2021 and following last December's co-promotion agreement with Viatris that increased the promotional field force in the US from 22 reps to 100 now.
With the product growing rapidly, Shield is targeting breakeven by the end of 2024, guiding to Accrufer sales of around US$120 million in 2025.
Based on a US iron deficiency market estimated to be worth circa $2.3 billion, with roughly around 13 million prescriptions dispensed annually and Accrufer currently has just over 0.5% share of this market.
But Stifel expects Accrufer to become "the oral iron of choice in the US" and forecasts US sales of the product of US$215 million by 2027.
In contrast, in Europe, where Accrufer is sold by marketing partner Norgine as Feraccru, only "modest" sales are currently expected by the investment bank.
Further approvals of the drug are expected in Canada, South Korea and China in the coming months and years.
Stifel set an initial 15p target price on the shares, around 150% upside to the last close price just above 6p per share, based on a hybrid of its discounted cash flow analysis and peer comparison valuations using a ratio of enterprise value (EV) over price.