Shares in Shield Therapeutics PLC (AIM:STX, OTCQX:SHIEF) rose as much as 6% on Tuesday morning after the company announced a licensing agreement that will see its iron deficiency treatment ACCRUFeR brought to the Japanese market.
The deal, signed with Tokyo-based VITAL-NET, gives the Japanese group exclusive rights to develop and commercialise the drug in Japan.
Shield will receive an upfront payment of around $665,000, with further payments tied to regulatory approvals and sales milestones. The company is also set to earn double-digit royalties on future net sales.
For investors, the attraction is clear: The UK drug developer avoids the cost and complexity of entering a new market while securing a fresh revenue stream in one of the world’s largest pharmaceutical markets.
Peel Hunt said: "Shield continues to expand its global footprint with this deal, demonstrating the relevance of the Accrufer offering in all markets. Japan is the third-largest pharmaceutical market in the world."
Under the terms of the deal, VITAL-NET will shoulder all costs associated with clinical trials, regulatory approval, and commercial rollout in Japan.
The agreement marks a small but important step forward for Shield as it continues to expand ACCRUFeR globally.
Mid-morning, the shares were up 0.098p at 2.45p, off their session high.
Peel Hunt thinks they could be worth as much as 15p.