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Shield Therapeutics rebounds

From the lows of a disappointing clinical trial result, the pharma company has built an exciting platform for growth
Shield Therapeutics rebounds

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.

IC TIP: Hold at 155p

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:155pMARKET VALUE:£182m
TOUCH:155-156p12-MONTH HIGH:27p202p
DIVIDEND YIELD:nilPE RATIO:na
NET ASSET VALUE:33.1p*NET CASH:£6.6m
Half-year to 30 JunTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20180.5-8.0-7.0nil
20192.6-2.5-2.0nil
% change+428---
Ex-div:na   
Payment:na   
*Includes intangible assets of £30.7m, or 26p a share