Shield Therapeutics PLC on Tuesday said it has strengthened its financial foundation in the hope of becoming cash flow positive by the end of 2025.
In its third-quarter update the Newcastle-based commercial stage pharmaceutical company revealed a decline in its cash and equivalents of 4.9% on-quarter from $8.1 million to $7.7 million.
The AIM-listed firm decided in response to the third-quarter performance of its flagship medication ACCRUFeR, ‘additional capital’ was required along with measures to reduce its operating cost base.
Shield has agreed to expand its existing working capital arrangement with Sallyport Commercial Finance by 50% to $15 million from $10 million.
The firm is also reducing its operating cost base by 10% to extend its runway and has entered a non-binding term sheet for $10 million of new equity with its largest shareholder AOP Health.
Under this arrangement AOP would purchase ordinary shares at a price of 4.0 pence a share and upon completion of the subscription, would own 50% of Shield’s voting rights.
The subscription is subject to approval by Shield shareholders.
Net sales of ACCRUFeR grew 4.3% to $7.2 million from $6.9 million on-quarter, with it recording a 20% increase in prescriptions for the iron replacement therapy over the same period.
Revenue for the nine months to September was $20 million, with $8.0 million in the third quarter.
Shares in Shield are down 13% at 3.33p on Tuesday afternoon in London.
Shield Interim Chief Executive Anders Lundstrom said: ‘It has been another successful quarter for Shield as we work towards becoming cash flow positive by the end of financial year 2025. We continue to see increased demand for ACCRUFeR in the US and across all our territories.
‘Net sales, total prescriptions and the net selling price of ACCRUFeR are all showing positive trends, and with a strengthened balance sheet and tight control of our cost base we will continue to build momentum behind ACCRUFeR and make the steps required to transition to cash flow positive by the end of 2025.’
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