Pharmaceuticals firm Shield Therapeutics has recommended its shareholders reject a £46.1m offer for the company from an existing investor and lender.
The iron deficiency drugs specialist, which has its base in Gateshead, is subject to a cash offer from long-time shareholder and global operator AOP Health, which provided Shield with a $10m (£7.9m) convertible loan note facility in summer of 2022. Under that agreement, AOP secured the right to convert outstanding loan balances into shares in Shield.
Vienna-based AOP, which specialises in therapies for rare diseases and critical care, has requested a conversion which gives it about 41.9% of voting rights in Shield. UK company law dictates that AOP must make an offer for the firm, and in this case an offer of 6.2p in cash for each share is on the table.
Read more: Zytronic rocked by unexpected problems in gaming market after bankruptcy of key sector player
A note to Shield investors on the London Stock Exchange recommends the proposal is rejected on the grounds that it is a technical consequence of the conversion and that Shield has successfully raised about £63m to fuel its move into the potentially lucrative US market. The firm also pointed to £19.2m of unaudited cash balances which it believes is adequate to get it to cashflow breakeven at the end of next year.
Shield is in the midst of a push to scoop up a 4.3% share of the US iron deficiency market - which it believes is underserved by existing drugs. Together with US partner Viatris, the firm has hired a team of field salespeople and devised a marketing campaign to get its flagship Accrufer product in front of clinicians who can write prescriptions for the pills.
Last week Shield told BusinessLive it was considering a listing in the US, with CEO Greg Madison saying it would make sense for the firm to open itself up to investors stateside. At the time he said: "There's nothing imminently in our plans that we want to get off the London Stock Exchange actively. We want to think about how we do this the right way that also takes into account the investors that came in at the fundraising deal at the end of December."
Mr Madisons comments followed 2022 results in which Shield reported widening losses of £24.6m on increased revenues of £4.5m. The business said the results were to be expected as it made it executed its US plan.
READ NEXT:
Virgin Money profits fall amid higher provisions for customer arrears
Recharge Industries highlights financial muscle available for Britishvolt plans
Vianet warms investors up to significant jump in turnover and profits
- Tyneside satellite communications firm secures multimillion-pound finance package to back international growth
- Read more North East business news here
