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Shield Therapeutics - Viatris strategic partnership to expedite scale-up

Shield Therapeutics has announced a co-commercialisation deal for Accrufer in the US with Nasdaq-listed Viatris, which will involve an expanded salesforce and a 55%/45% revenue/cost split between the two companies. Although this is a clear departure from Shield’s stated self-commercialisation strategy in the US, we see merits in the deal, with the combined resources allowing Shield a faster sales ramp-up and quicker time to profitability. The decision coincides with a US$18.5m (£15.1m) equity raise and an additional $10m in funding from its largest shareholder, AOP Heath. We estimate that this raise should be sufficient to take the company to break-even, provided revenue targets are achieved. We have updated our estimates to incorporate the deal economics and fund-raise. Our overall valuation increases to £403.4m (versus £377.0m previously), but our implied per-share valuation declines to 79p/share (versus 146p/share previously) due to the higher post-equity raise share count.