Shield Therapeutics (STX): Possible Turnaround?

24th Jan '21 by Andy Sav

12 comments 1449 reads

I recently attended a Shares Investors Evening where the presentation from CEO Tim Watts (Shield Therapeutics (LON:STX)) caught my eye. Slides here

I admit, I have a tendency to like a turnaround stories as the potential upside could be large, but equally there is risk here, especially in Shield Therapeutics (LON:STX) case where its product has been in development for a number of years and it has no marketable revenues from any products to date. However, the product it does have has been through medical approval and is now fit for market release.

So, what is the product and what's its niche?

From their website

Feraccru® / Accrufer® Our lead product is approved for the treatment of iron deficiency with or without anaemia in adults in the United States, European Union, UK and Switzerland and has exclusive IP rights until the mid 2030s.
In Europe the product is marketed as Feraccru® with commercialisation led by Norgine BV. In the USA – where the product also benefits from NCE exclusivity until 2020 – it will be marketed as Accrufer®. We also have an exclusive licence agreement with ASK Pharm, who will lead the development and commercialisation in China.
Feraccru®/Accrufer® is a stable, non-salt based oral therapy for adults with iron deficiency with or without anaemia. It has a novel mechanism of absorption compared to other oral iron therapies and has been shown to be an efficacious and well-tolerated therapy in a range of placebo-controlled and active comparator phase 3 clinical trials.
Its niche / competitive advantage is the effectiveness of the product. Feraccru / Accrufer is more effective than competitor intravenous products and given the fact is an Oral medicinal, its potentially more freeing. However, I’m not sure how many patients would need to take the medicine intravenously just for iron deficiency or whether this is normally given as part of other hospitalised treatments

Out of Favour

Shield Therapeutics (LON:STX) was IPO in 2016 for a price of £1.50 (Market Cap @ 162m)

Since its IPO, the price has been on a bit of a roller-coaster ride.

Covid had an impact to Market Sentiment in 2020. Prior to that, there was an issue with the product trial, which lead to it having…

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BouncingBack

28th Jan '21

Insider buys as follows

Valuation

More at https://simplywall.st/stocks/g...

I'm going to buy a small amount of shares today

Andy Sav

11th Feb '21

Thanks for sharing :)

Mr.Corbett

17th May '21

Andy,

Thanks for sharing, Shield does looks interesting. I too like turnaround stories and I also like to see directors buying their company shares. I will have a more detailed look at it. Cheers

20th May '21

Tipped as a buy in today's Shares Magazine

carmensfella

Shield will be one of the companies featured in the Healthcare show on Tuesday

https://melloevents.com/investingoodhealth/

oooh, I'll look forward to that, thanks

johnmhughes

21st May '21

I have bought in to this again today.

Maddox

23rd May '21

Nice write-up Andy, looks like it's getting some favourable coverage and followers.

29th May '21

Thank you :) I would add that, at this point, the situation is looking positive. We now have the decision that Shield Therapeutics (LON:STX) will handle their own sales in America. This resulted in a successful fund raising, which, unfortunately pushed the price to a low of 30p (but has since rebounded to 60p). However, funding has meant they are able to recruit a knowledge sales team in the US. This week also saw the announcement that Tim Wells is stepping down and will be replaced by a US based CEO who has a wealth of experience in this market. Tim was the CFO and stepped up when the former CEO left in 2020. Rightly or wrong Tim has come under criticism for indecision around US release and a failed trial that had to be repeated (adding delay and expense). Sales in Europe and China are underway but are handled by third party sales force. Whilst the 3rd party sellers have good connections, they will result in lower achieved margins, whereas, direct sales in the US carry the expense of an internal sales force, but should lead to better margins being achieved. Exciting times! This is now a top 5 holding for me :)

6th Jun '21

David, as an Annual Pass holder (its a bargain at £95 btw!!!), I have now listened back to some of the healthcare show from the 25th of May 2021. I was expecting Shield to be presenting, but they weren't. However, more impressive was that Shield Therapeutics (LON:STX) had backing from both Melwin Mehta (Managing Partner at Sterling Investment Management) and Edmund Shing (Global Chief Investment Officer at BNP Paribas Wealth) both whom wanted to present Shield Therapeutics (LON:STX) as their Mello charity pledge! I respect both of these fund managers, after listening to them speak either at events or online blogs. As a relatively new investor (since Sept 2018), myself, its always good too get further reassurance on what you think is a good investment. Thank you!

PS: Mello has been a fantastic experience for me and I am thankful I plunged straight in for a years membership. Base page is here: https://melloevents.com/

Revs8

24th Nov '21

Does anyone have any recent intelligence regarding Shield Therapeutics (LON:STX) ? I held these shares until my stop loss rules kicked in. In theory they have a viable product but will they reach break even without another funding round?

I recently spoke to a doctor (in UK) who is going to have iron infusion due to not being able to tolerate the iron salts. She has not heard of the alternative treatment from Shield (is it available in the UK?)

illiswilgig

25th Nov '21

Shield Therapeutics (LON:STX) (I hold)

I believe that in the UK it's marketed and sold by Norgine ltd as Ferracru (Ferric Maltol).

Availability will depend upon whether its recommended for the particular treatment in each area. Unfortunately that seems to be quite negative at the moment.

Also marketed and sold throughout Europe by Norgine.

Shield have just launched in the US where they are marketing and selling themselves. Latest view is that initial sales growth will be held back by the need to get the treatment approved for payment by the insurance companies as well as prescribed by the medics - in my view this does raise the risk that a further fundraising is required - very hard to determine the level of risk of that with no sales figures. Probably why the share price is bombed out. Even so I think it represents good value on a medium term view - given that the treatment is already approved in both the EU and US and the sales campaign is underway albeit from a slow start,

cheers

Shield Therapeutics (STX): Possible Turnaround?

So, what is the product and what's its niche?

Out of Favour

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Andy Sav

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