Shield Therapeutics secures $62.8m licence deal for Feraccru®
The deal will focus on the development and commercialisation of Feraccru®, marketed as Accrufer® in the US, to cover China, Hong Kong, Macau and Taiwan, altogether known as ‘The Territory’.
Shield will receive an initial $11.4m upfront payment with up to $51.4m in future development and sales milestones and tiered double-digit royalties, the statement detailed.
ASK Pharm (Beijing Aosaikang Pharmaceutical), will cover the costs of all activities to oversee marketing authorisation and commercialisation of the iron deficiency treatment across The Territory.
As one of China’s leading manufacturers in oncology, holding a market capitalisation of around $2.2 billion, ASK Pharma is viewed by Shield as ‘well positioned’ to commercialise Feraccru® in China.
“Their established product development and commercial infrastructure and expertise in China should speed the regulatory approval and drive subsequent sales of Feraccru®,” said Carl Sterritt, Chief Executive of Shield Therapeutics.
Shares in Shield Therapeutics were trading 8% higher at 186.5p on Wednesday morning.
“The market in China for novel prescription pharmaceuticals continues to grow rapidly and this agreement will mean more patients with iron deficiency will benefit from Feraccru® therapy,” added Sterritt.
“This co-operation will expand our company's therapeutic area experience and improve our competitiveness, whilst also creating a new development and commercialisation opportunity for ASK Pharm,” reflected Qingcai Chen, Chairman of ASK Pharma.
Broker finnCap said the licence agreement was “a good deal” considering that ASK Pharm has to fund a clinical trial in China.
In a research note immediately following the release of the deal, finnCap reiterated a value of 350p a share on Shield.
“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,” the broker detailed.
Separately, Shield noted that they would update the market regarding ongoing discussions relating to the commercialisation of the iron deficiency drug in the US.
Shield emphasised that their priority is to secure a highly motivated partner on “attractive commercial terms” rather than completing the process to a particular deadline.
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