On Thursday, Shield Therapeutics (LON:STXS) PLC (STX:LN) faced a downgrade in its stock rating from Buy to Hold by Stifel, with a revised price target set at GBP0.02, a significant reduction from the previous GBP0.15. The adjustment follows a recognition of stalled growth in US prescriptions for Shield's product Accrufer since the beginning of the year.
The analyst from Stifel noted that the updated forecasts were influenced by Shield Therapeutics' trading update in February 2024, which has implications for Accrufer sales due to recent prescription trends. According to data from IQVIA, the growth in prescriptions for Accrufer has not met expectations, prompting a reassessment of the company's financial outlook.
The revised projections by Stifel now anticipate that Shield Therapeutics will reach EBITDA positivity in 2027, a delay from the previously expected year of 2025. The change in the forecast is also accompanied by the anticipation of a funding gap of at least $25 million that the company will need to bridge before it can achieve positive EBITDA.
Stifel's report expresses concerns regarding Shield Therapeutics' ability to meet its target of becoming cash flow positive in the second half of 2025. The downgraded recommendation to Hold reflects the firm's view on the stock in light of the weaker performance of Accrufer and the challenges ahead for Shield Therapeutics.
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