Reassuring 1Q’23 Accrufer prescriptions

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 generating prescription (Rx) growth and sales traction. Positive Rx momentum in 2022 started to accelerate at the end of 1Q’23, following recruitment and training of the expanded 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: Shield continued to build awareness QoQ throughout 2022 with a small sales team (average 22). The positive momentum is expected to accelerate, with a combined Shield-Viatris sales team of 100. Shield has recently updated its three-year targets for Accrufer, which suggest US sales of >$150m in 2025.
• Valuation: Despite the positive Rx signals and strengthened balance sheet, the share price has been volatile in 2023. AOP has just signalled its confidence by converting two-thirds of its loans into shares. While not affecting the overall valuation, the enlarged capital has reduced the per share DCF from 64p to 50p.
• Risks: As before, the main risk is execution. However, the QoQ momentum in Rx growth, with a small sales team, together with boosted confidence from the well-established network provided within the Viatris partnership, to generate a 100-strong sales team effective in 4Q’23, has greatly reduced this risk.
• Investment summary: Despite the positive Accrufer momentum generated in 2022 and the strengthened balance sheet, the market has continued to fret about whether the acceleration in Rx needed to hit targets in 2023 will be achieved. 1Q’23 data were good, with early benefits of the enlarged sales team visible in March. AOP has signalled its confidence, with the recent large debt to equity conversion. The next update is likely to come with the AGM statement.