When a pharmaceutical company announces unexpected data from a clinical trial, investors tend to panic. Such was the case in early February 2018 when Shield Therapeutics’ (STX) iron deficiency treatment Feraccru produced a surprisingly disappointing result in a final phase US trial. Having sifted through the data and found that the problems were isolated to a handful of patients who had violated the study’s protocol, Shield had gained permission from US regulators to proceed with a new drug application by the end of February. But the damage was done. Shield had lost 84 per cent of its value in one month.
It’s not all bad news. The initial anomalous result and subsequent share sell-off forced Shield to hunt for a partner through which to sell Feraccru in Europe, where it has been approved for many years. The consequent partnership with Norgine gave the group an £11m upfront licence payment, €54.5m (£50.2m) in development milestones and royalty revenues of up to 40 per cent of Feraccru’s sales. Norgine’s strong promotional activities sent sales up strongly in the first half of 2019, with particular success in the UK and Germany.
More importantly, Feraccru has now been approved in the US, where there are between 8m and 9m iron deficiency patients. Through a commercial partner, Shield now has access to the $1bn (£0.82bn) iron deficiency market.
| SHIELD THERAPEUTICS (STX) | ||||
| ORD PRICE: | 155p | MARKET VALUE: | £182m | |
| TOUCH: | 155-156p | 12-MONTH HIGH: | 27p | 202p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 33.1p* | NET CASH: | £6.6m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 0.5 | -8.0 | -7.0 | nil |
| 2019 | 2.6 | -2.5 | -2.0 | nil |
| % change | +428 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £30.7m, or 26p a share | ||||
