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One thing I like about penny stocks is how they sometimes offer a sneak peek into the future. Many of these small start-ups are at the cutting edge of technology, working on projects that have yet to gain mainstream media attention.
From groundbreaking new AI implementations to life-saving medications, they’re paving the way for how our future might look. At the same time, many aren’t yet profitable, relying on funding to keep going until they make it.
Naturally, this adds an extra level of risk to any penny stock investment. When assessing penny stocks, a key consideration is whether or not the company’s product (or service) has long-term viability.
With that in mind, I think Shield Therapeutics (LSE: STX) is onto something big — and I like the direction it’s headed. After years of share price declines, it’s been making impressive strides in 2025.
Yes, substantial risks remain. But looking at the numbers, I think it has significant growth potential.
Impressive growth
Currently trading at just 6.6p per share, Shield Therapeutics is a commercial-stage pharmaceutical company that specialises in iron deficiency treatment. Its flagship product, Accrufer, is used to treat Pulmonary Arterial Hypertension (PAH) — a rare disease that causes high blood pressure in the lungs.
In H1 2025, revenue increased by 72.4% year-on-year to £16.5m, with Accufer accounting for £14.6m. In Q2 2025, revenue doubled from the previous quarter, with 47,000 new prescriptions selling at an average price of £175.
For the year, revenues are up 93.5% while earnings improved 51.2% year-on-year, boosted by accelerating commercial traction in the US. Cash and equivalents stood at around £7.89m as of June, the majority of which came from equity funding.
The business is reportedly on track to achieve cash flow positivity by the end of 2025. But that target could easily derail if things don’t work out as planned.
A strong roadmap… with risks
A recently-formed partnership with US pharma giant Viatris has proved highly successful, giving it access to a 100-person sales team. Prescription volumes reached around 84,000 for the first half, with the average net selling price increasing 1.4 times from H1 2024. This pricing power, alongside volume growth, is a strong indication of strengthening market acceptance.
In my opinion, it demonstrates the hallmarks of a potential millionaire-maker penny stock: strong revenue acceleration, expanding market opportunities, and a path to profitability.
Still, the risks can’t be ignored. It has a severely strained balance sheet with significant debt and negative equity, which is concerning. The company’s survival depends largely on achieving cash flow positivity by year-end and sustaining commercial momentum. Any setback — whether regulatory delays, competitive pressures or execution missteps — could prove catastrophic given the weak financial foundation.
My verdict
As a risk-averse investor, I don’t often consider penny stocks, but Shield Therapeutics is compelling. With a product that’s already flying off shelves amid rapid expansion, I see a bright future ahead for the company.
At the same time, the risks are equally pertinent — as much as it could skyrocket, it could also go to zero. Overall, I still think it’s one worth considering for speculative investors with high risk tolerance, albeit as a small portfolio position.
This story originally appeared on Motley Fool
