Shield Therapeutics PLC (LON:STX) has signed an exclusive agreement worth up to US$63mln for its iron deficiency treatment 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.
Carl Sterritt, Shield’s chief executive, said he was delighted to partner with 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.”
Sterrit noted that Shield is continuing discussions with potential partners in the US but the priority is to secure a highly motivated partner on attractive commercial terms rather than completing the process to a particular deadline.
House broker finncap said it was a good deal especially considering that ASK has to fund a clinical trial in China.
“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.”
Shares rose 8% to 186.5p against finncap’s price target of 350p.