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A Tyneside pharmaceutical company has seen its shares fall in value after a negative clinical study meant it had to return most of its 2019 income to a commercial partner.

Shield Therapeutics revealed in a trading update that a clinical study on its Ferracru product – which treats iron deficiency – had “not met its primary endpoint.”

Shield has a licencing agreement with Dutch firm Norgine to sell the drug in a number of countries. The agreement included a payment of €2.5m that was dependent on the study being successful, and Shield has now had to re-pay the amount, meaning its revenues for 2019 fell from £2.9m to £700,000.

Shield – whose founder and chief executive Carl Sterritt resigned last week – stressed that Norgine remained committed to the drug and added that it was also seeing a lot of interest in licencing the drug in America.

The company added that it had been able to operate effectively since the start of the coronavirus lockdown, and though it had closed offices on Tyneside and in London, all of its staff were able to work from home.

It said too that most of its customers and suppliers were operating normally and it had seen “minimal disruption to our commercial progress”.

Tim Watts, who took over as Shield’s chief executive officer when Mr Sterritt stepped down, said: “I am reassured that despite the current challenges presented by the global pandemic we continue to operate effectively and there has been little disruption to our commercialisation plans.

“We are encouraged by the continued interest from potential US partners during uncertain times, confident of the pressing need for our product as an effective alternative treatment for iron deficiency, and remain committed to advancing commercial discussions to secure the best deal for shareholders.”