Accrufer Rx momentum gathering

Shield is a commercial-stage pharma company delivering specialty products that address patients’ unmet medical needs, with an initial focus on iron deficiency (ID). Since its US launch in July 2021, Shield has been increasing physician awareness of the differentiating characteristics of Accrufer® as an oral ID drug, with the aim of ramping up prescription (Rx) growth and sales traction. Positive Rx momentum in 2022 started to accelerate at the end of 1Q’23 and has continued into 2Q’23, following expansion of the Shield-Viatris commercial team. In the event that the US goals are achieved, there would be considerable upside potential to the valuation.

• Strategy: In the US, Shield is commercialising Accrufer alongside its co-marketing partner, Viatris. Outside the US, Shield’s strategy is to out-license commercial rights to partners with appropriate expertise in target markets, which has been achieved so far in Europe, China, Republic of Korea and Canada.
• Accrufer: Early momentum in Accrufer Rx, seen from the enlarged sales team at the end of 1Q’23, has continued through 2Q’23, with 50% QoQ growth, even though the full benefits from the sales training are not expected until 4Q’23. This augurs well for the longer term, with US Accrufer sales forecast >$150m in 2025.
• Valuation: The market is finally starting to wake up to the positive Rx signals and strengthened balance sheet, with the share price hitting its highest level since November 2022. Confidence has also been boosted by AOP converting two-thirds of its loans into shares. Our DCF valuation is 48p per share.
• Risks: The main risk remains execution. However, the QoQ momentum in Rx growth, still with a small “effective” sales team, has greatly reduced this risk. By 4Q’23, the 100-strong sales team, together with Viatris’s well-established network, should boost both Rxs and confidence further.
• Investment summary: During 1H’23, the market has continued to fret about whether the acceleration in Rx needed to hit targets in 2023 will be achieved. Early benefits to Accrufer Rxs from the enlarged and trained Shield-Viatris sales team were further evident in 2Q’23, which augurs well for the future and the achievement of sales forecasts. The next update is likely to come with the interim statement in September, followed by 3Q’23 Rx data in November.