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
Shield Therapeutics PLC (LON:STX) is a specialty pharmaceutical company focused on the development and commercialisation of late-stage pharmaceuticals. 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.
READ: Emma's full note
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.
Inflexion Points
Shield is currently talking to potential US commercial partners with an investment bank overseeing the process.
“We have had plenty of interest and the news [the US approval] will have generated more,” said chief executive Carl Sterritt in a recent interview with Proactive.
On timing he added: “I would hope we have something done by the end of the year; but obviously, the sooner the better.”
About Ferracru
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 broker says
In a note immediately following the release of its FDA approval, broker finnCap placed a value of 350p a share on Shield. Analyst Mark Brewer told clients: “Thee FDA granted a broader than expected label, given Feraccru’s tolerability profile and efficacy – the treatment of iron deficiency with or without anaemia – with the label indicating its use for as long as necessary to restore iron levels, implying a chronic therapy.
“This at least doubles the potential addressable market for Accrufer. Together with the non-inferiority data versus intravenous iron, announced in March, this offers the potential for Accrufer to remove the need for patients to progress to intravenous therapy.”
