Cash management is key

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 and its partner, Viatris, have increased physician awareness of the differentiating characteristics of Accrufer® as an oral ID drug, in order to ramp up prescriptions (Rxs) and generate sales traction. Positive Rx momentum in 2022 and 2023, is expected to accelerate in 2024 and 2025 with the revised aim of becoming cashflow positive in 2H’25. This, coupled with extended financing options has obviated any requirement for a capital increase.

• Strategy: Shield is commercialising Accrufer alongside its co-marketing partner, Viatris, in the US. 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 Rx: Despite a lower-than-expected outcome in 4Q’23, Accrufer Rx growth was 206% in 2023 to 77,012. Even though 1Q’24 growth was just 1% due to a specific event, 2024 Rx are still expected to grow 125% to 173k. With an ever-improving net Rx price, this should equate to US sales of $27.5m.
• Cash position: Gross cash at the end of 1Q’24 was significantly better than expected at $10.4m, with cash management heavily influenced by the new CFO. This, coupled with a new $10m accounts receivable and revised covenants on its existing debt facility, has obviated any need for an equity raise.
• Risks: Commercial execution remains the main risk. Rx targets for Accrufer are more realistic now, but still dependent on the absence of events beyond management’s control, such as the change of PBM in Texas in 1Q’24. On current forecasts, debt peaks near $30m before Shield becomes cash generative in 2H’25.
• Investment summary: Management is confident that events beyond its control that beset 4Q’23 and 1Q’24 are now history. The focus is very much on delivering more realistic Rx and sales targets for 2024 and 2025 and flexibility in marketing costs for enhanced cash management, such that Shield becomes cash generative in 2H’25 and has no requirement for a cash injection.