Gateshead pharma firm Shield Therapeutics has successfully raised around £25m from investors to drive forward its lead drug in the US market.
The Design Centre based business confirmed on Friday plans to raise funds from shareholders for the launch of its iron deficieny treatment Accrufer in the US, which its believes has the potential to produce significant returns for shareholders.
Management consultants and others in the industry predict Accrufer could bring in sales of more than $100m three years after launching in the US, potentially reaching as much as $300m to $400 million by years five to six.
The company said it has raised proceeds of up to £25m for the company through a subscription and placing of 83.3m shares.
The fundraising’s issue price of 30p a share represented a discount of around 43.7% to the company’s closing price last Thursday, February 25.
The placing involved 66,398,720 shares. The subscription saw AOP Orphan – an Austrian film with which Shield has a licensing agreement – CEO Tim Watts, and Dr Christian Schweiger, the firm’s co-founder who was brought back onto the board last year as a non executive director, indicating they would subscribe for an aggregate of 16,634,613 subscription shares.
Participating directors collectively agreed to invest £690,384 in the subscription, with CEO Mr Watts taking 1m shares and Dr Schweiger taking 1.3m shares.
Certain employees of the company who are existing shareholders also indicated that would subscribe for 300,000 subscription shares at the issue price pursuant to the subscription.
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The company also announced details of an open offer to be made to qualifying shareholders to raise up to an additional £4.2m.
The net proceeds of the fundraising are subject to the passing of the fundraising resolutions at the company’s general meeting, to be held around March 18.
So long as it gets agreement, the firm will use the proceeds to advance the self-commercialisation of the iron deficiency oral therapy treatment, which was approved in July 2019 by the United States FDA.
The company had spent some time seeking a commercial partner for the US market but, after getting several proposals from potential commercialisation partners, the company decided the best way forward was to launch the product itself.
A finnCapp note published on Monday, details how the US commercial team, which has been working in a consultancy capacity for around six months or so, were previously with Acasti Pharma and have been preparing plans for a Shield-led launch in the US, in the event that a suitable licensing deal was not sealed.
Shield intends to launch Accrufer with 30 sales reps and support staff, increasing this to 60 reps by the end of this financial year and around 90 by 2023.
That should reach around 80% of its target list of 14,000 prescribers - and almost 100 write 1,000 prescriptions a year.
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In the stock market update to announce the successful fundraise, Shield added: “The group has assessed a range of other options to fund the US launch of Accrufer, including several debt and equity based financing solutions. However the board believes that the funding requirements are best suited to an equity based financing solution which the fundraising will provide.
“Further, the directors believe that selling Accrufer directly in the US has the potential to generate significant returns for shareholders.”