Shield Therapeutics P&R agreements slower than expected

Shield Therapeutics reported that pricing and reimbursement (P&R) agreements were slower than expected for its oral iron product Feraccru, although these approvals are now coming through.

The company said it is seeing encouraging signals of demand after only six months since commercial launch of Feraccru in England and less than three months since launch in Germany.

Management remained positive about the broader commercial opportunity for Feraccru.

Since raising funds in its IPO in February 2016, as well as commercially launching Feraccru, Shield also undertook steps to further its transition from a research and development focused business into a commercial pharmaceutical company.

Shield continued to build out the appropriate central resources to support the group and build a commercial product distribution function, as well as starting a European sales and marketing infrastructure.

Commercially, the company reported it was focusing on building solid foundations from which it can scale and maximise the Feraccru business.

Management said it made positive progress against various strategic goals including achieving attractive pricing for Feraccru in England and Germany, as well as seeing increasing numbers of regional and local formulary and pricing and reimbursement (P&R) approvals in England.

With positive pricing entrenched in these key markets and an extended patent life position, Shield said it is considering the best regulatory strategy to provide early access to the wider commercial opportunity that a broader label would provide to Feraccru.

Management made its first commercial sales to AOP, its Central and Eastern European partner, as it commenced its commercial activities related to Feraccru.

At the end of 2016, Shield filed a new drug approval application with the Swiss authorities, which should result commercialisation in Switzerland during 2018.

UK LAUNCH

Feraccru became available to the UK market in June 2016, with an initital focon on achieving formulary access with hospitals and P&R agreements with the budget-holding clinical commissioning groups (CCGs).

Whilst substantial resource was deployed as quickly as possible after the IPO, review processes within hospital formularies and budget-holding CCGs were slower than initially hoped over summer immediately after the product became available commercially.

In the early stages of commercialisation, the company strategically focused its P&R activities on achieving successful access at the key prescriber locations.

Shield announced that formulary and P&R approvals and demand are coming, as well as the sales team not encountering any significant push back from patient stakeholders.

Management said it is beginning to see an increasing number of prescribers being able to make use of the product in their adult inflammatory bowel disease patient population suffering from IDA.

LAUNCH IN GERMANY

Shield reported that Germany is the most important pharmaceutical market opportunity in Europe for Feraccru and it achieved more attractive pricing in this key market compared to the UK.

Management said it is still at a very early stage in the commercial launch as first sales only occurred as planned towards the end of October 2016, once the product became commercially available.

However, in the German market, clinician demand for Feraccru became visible much more rapidly because with a national P&R system as there is no need to gain approvals via local P&R processes.

The group benefitted from a bigger pre-launch footprint for Feraccru due to its close involvement with approximately 20 trial centres during Feraccru's development over the past few years.

OUT LICENSING STRATEGY

Shield continued to make progress in pursuing an out-licensing strategy with licensing partners in several relevant and non-core territories.

The firm reported that it is confident that these negotiations will translate into meaningful validations of the technology of, and opportunity for, Feraccru to yield significant additional revenue.

Georg Buchner (formerly of Amgen) was recruited as Senior Director of Business Development and Licensing to expand licensing opportunities for Feraccru in additional non-core markets.

CLINICAL TRIAL UPDATE

Together with existing data on Feraccru, the two Phase III studies are designed to further increase the product's commercial opportunity by achieving a broader label in Europe and giving access to the US market via an NDA from the US Food and Drug Administration (FDA).

AEGIS-CKD PHASE III STUDY

Progress continued to be made with this important trial of Feraccru that is being conducted exclusively with approximately 30 US-based expert nephrology centres.

Initial feedback on the product from the involved centres was positive and, as forecast, the first patients were randomised to treatment during the fourth quarter of 2016.

Management said it anticipates that top line data will be available towards the end of 2017 and, if positive, will facilitate an NDA submission of Feraccru.

AEGIS-H2H PHASE III STUDY

Due to the complex nature of the head to head study, recruitment was slower than initially expected.

To expedite the process, centres were opened in the US and the progress this study expansion was anticipated to create started to be seen with the first US subjects now randomised to treatment.

Shield reported that it expects these newly initiated US centres to provide a material boost to the recruitment process.

However, at the historic recruitment rate, the company said it anticipates data from this study will be available later than expected in the second half of 2017.

PT20

Good progress was made with PT20. Following a recent Phase II meeting with the FDA, the key work streams towards a potential NDA approval was understood.

FINANCIAL UPDATE

Shield continued to maintain tight control of its finances, selectively investing in the broadening out of the Group's operational capabilities whilst directly supporting the commercial launch of Feraccru and ongoing product development activities.

It said booked revenue in 2016 is expected to be in line with market expectations and costs will be below market expectations, reflecting a lower level of activity during the period in the AEGIS-H2H study.

At 11:28am: (LON:STX) Shield Therapeutics Plc share price was -7p at 166p