Shield Therapeutics PLC (LSE:STX, FRA:1JS) shares surged on Thursday as it said it has secured a licence agreement in South Korea for its Accrufer iron deficiency therapy.
Under the deal with Korea Pharma Co Ltd, the company said it will receive an upfront payment of £0.5mln and is also eligible to receive a further £1.5mln upon the first commercial sale of Accrufer in Korea.
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Shield said it will also receive up to £4mln in milestone payments upon the achievement of specified cumulative sales targets, as well as royalties of 15% on net sales of Accrufer for the duration of the intellectual property in Korea.
The firm added that Korea Pharma will cover all clinical and regulatory costs and activities as well as all manufacturing and distribution costs of goods sold in Korea.
"I am delighted to be entering into this agreement with Korea Pharma, who have been determined to succeed throughout a competitive licensing process for Accrufer® in Korea. They are a successful pharmaceutical company with an excellent track record of product development and commercial success,” Shield chief executive Greg Madison said in a statement.
“This is a first step in broadening our geographical reach outside the US, Europe and China. Iron deficiency is a prevalent issue globally, and this agreement will make our novel oral iron, Accrufer®, available, pending approval, to more patients with iron deficiency in Korea. We very much look forward to working with Korea Pharma and supporting them as they advance forward," the CEO added.
In a note, analysts at finnCap said the deal was "further evidence of the interest in Accrufer and the opportunity to monetise this asset outside the core trading blocks of US, Europe and China, which Shield has already addressed".
Shares in the firm jumped 6.1% to 50.4p in late morning trading.
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