Yahoo News Shield Therapeutics strikes £4.4m advance deal with investors AOP
Pharma company Shield Therapeutics says it has struck a deal with shareholder AOP to secure a $5.7m (£4.4m) cash sum that will "fortify" its balance sheet.
The Newcastle-based business says the "monetisation" deal with its largest investor will also bring AOP's founder, Rudolf Widmann to its board as a non-executive director. Shield told the London Stock Exchange the sum is in exchange for right to receive the $11.4m (£8.9m) China approval milestone payment that may be paid to Shield by ASK Pharma, the firm's commercial partner in China for its Accrufer iron deficiency tablets.
ASK is enrolling patients onto a study and subject to its success and approval by the Chinese regulator, Shield is in line for a milestone payment. The firm thinks that is likely to come in 2026 but if it does not, Shield will need to repay the advance plus interest.
Read more: Two global media giants set to launch North East bases after Quorum Park office deal
Read more: North East deals of the week: key contracts, acquisitions and investments
Greg Madison, Shield CEO, said: "We are pleased to work with AOP on this milestone monetization agreement to bring in additional capital to support our growing business. We are encouraged by the recent Accrufer commercial trends in the US and will continue to be opportunistic to further support our growing business. This agreement, following our recently announced Sallyport deal, provides us with additional operational and financial flexibility. The $5.7m, along with approximately $8m cash on hand at the end of May 2024 allows us to further fortify our balance sheet and expand our working capital.
"It is also a pleasure to welcome AOP's founder, Dr. Rudolf Widmann, to the Shield board of directors. I believe that Rudi's strong track record of building a successful pharmaceutical business and strategic perspective will complement Shield 's current board of directors."
Dr. Widmann, founder of AOP, is said to be an experienced pharmaceutical scientist and entrepreneur who has focused on treatment of patients with rare diseases. He started AOP in 1996, first serving as the company's chief executive officer and chief therapeutics development officer and then being elected to the board of AOP Health Group.
He said: "I have long believed in Accrufer's global growth potential and what it could do for patients worldwide suffering from iron deficiency, with or without anaemia. We are pleased to expand our stake in the company's success through the agreement announced today. I am delighted to join the board of directors and look forward to working closely with Shield's leadership team and the board to achieve the company's mission of making Accrufer/Feraccru the oral iron of choice."
