Evidence from clinical studies shows it provides long-term treatment for maintaining the body’s iron stores. In our view, these factors provide a solid support for negotiating attractive deal terms.
Emma Ulker, Proactive Research
What Shield does
Its lead asset, Feraccru (Accrufer in the States), is an oral treatment for iron deficiency with or without anaemia, which is approved in Europe and the US.
On July 26 the Food & Drug Administration (FDA) awarded the treatment a broad label to treat iron deficiency in adults, addressing a population many times wider than the iron-deficiency anaemia indications included in the submission data.
There are around three times as many patients with iron deficiency than with iron deficiency anaemia. That means the total addressable population could reach up to 40mln in the US, according to Proactive Research’s Emma Ulker.
The announced label also took off the table the prospective limitation to just chronic kidney disease and inflammatory bowel disease patients as per the studies included in the FDA approval submission, the analyst added in a recent note.
It is also now positioned to directly challenge the market-leading intravenous (IV) iron therapy following a study that showed Feraccru was at least as efficacious as the standard IV treatment.
“Shield is therefore clearly on a very strong footing to advance its discussions with commercial partners for Accrufer based on this broad approval as well as a very sound data package,” said Ulker in a recent research note.
“Evidence from clinical studies shows it provides long-term treatment for maintaining the body’s iron stores. In our view, these factors provide a solid support for negotiating attractive deal terms.”
The US opportunity alone could be worth in excess of US$1bn, analysts reckon.
In January, Shield signed an exclusive agreement worth up to US$63mln for Feraccru to be sold in China.
The deal with ASK Pharm (Beijing Aosaikang Pharmaceutical), covers China, Hong Kong, Macau and Taiwan and will involve an upfront payment of US$11.4mln and up to US$51.4mln in milestone and royalties.
ASK Pharm will also pay for the marketing authorisation process and commercialising of Feraccru, which is branded as Accrufer in the US.
The drug has a range of features that help differentiate it from the more established iron treatments including:
• Twice-daily dosing without food providing high iron availability
• Raises haemoglobin and iron levels effectively
• Prolonged therapy maintains Hb levels
• Well tolerated
• Non-inferior to IV iron
What the boss says: Carl Sterrit, chief executive
"ASK Pharm describing it is an ambitious and successful pharmaceutical company with an excellent track record of product development and commercial success.
“Their established product development and commercial infrastructure and expertise in China should speed the regulatory approval and drive subsequent sales of Feraccru/Accrufer”
What the broker says
House broker finncap said it was a good deal in China especially as ASK has to fund a clinical trial there.
“It removes any vestiges of financing risk (2020 year-end cash of c.£7.5m) and with the prospect of a much larger US licence deal, given that Feraccru/Accrufer is approved by the FDA, there is substantial upside to the current share price in our opinion.”
Finncap’s price target is 350p.