RE: The more i think about it5 Apr 2021 01:12
"Reasons for the Fundraising
In recent months, and as outlined in the announcement of 10 December 2020, Shield has developed a comprehensive plan for the self-commercialisation of Accrufer(R) in the US and the Placing and Subscription will provide significant funding to execute this plan. Sales estimates generated by management consultants and other third parties support the potential for sales of Accrufer(R) in the US to exceed $100 million from the third year following launch and to reach $300 million-$400 million by years five to six.
The Group's cash flow forecasts, including the costs of the US launch of Accrufer(R) and the paediatric study, indicate that the Group should start to breakeven on a monthly basis within 15-18 months after launch of the drug in the US provided sales and costs are within the range anticipated by the Directors . As previously announced, Shield believes that around $30 million to $40 million (c GBP21 million to GBP29 million) should provide the finance necessary to reach the breakeven point.
The net proceeds of the Subscription and the Placing will finance the launch costs of Accrufer(R). The bulk of the net proceeds received will be converted into US dollars promptly in order to avoid currency risk. US launch costs will include sales representatives, ongoing market research and data analysis, marketing spend and other US operational costs. The paediatric study and other non-US expenditure is expected to be partly funded out of gross margin generated by Shield in the US and Norgine BV royalty revenues.
The Group has assessed a range of other options to fund the US launch of Accrufer(R), including several debt and equity based financing solutions. However the Board believes that the funding requirements are best suited to an equity based financing solution which the Fundraising will provide. Further, the Directors believe that selling Accrufer(R) directly in the US has the potential to generate significant returns for Shareholders."