(Alliance News) - Redx Pharma PLC on Friday said it will receive a GBP26.3 million cash injection through a subscription and two loan arrangements.
Redx earlier said that discussions with Yesod Bio-Sciences Ltd, which mulled a takeover of the drug discovery firm, had stalled.
US investors Redmile Group LLC, alongside Paris-based Sofinnova Partners, will provide the investment over several tranches, Redx said.
Redmile has agreed to subscribe to 11.5 million shares at 11.2 pence each, raising GBP1.3 million.
Redmile will also provide GBP5 million to Redx through a loan, the terms of which have "been agreed in principle" though it is yet to get over the line.
Redx said: "It is the board's intention to finalise this loan as soon as practicable."
Redmile and Sofinnova intend to commit to a further investment of about GBP20 million through a convertible loan.
"As with the loan, the board has agreed the outline terms and will progress this as quickly as possible and will, where applicable, seek the requisite shareholder and regulatory approvals," Redx said.
Earlier Friday, Yesod said it "does not intend to make an offer" for Redx. Earlier in February, Redx said the UK Panel on Takeovers & Mergers had agreed to extend the deadline for a possible cash offer to February 24.
Redx on Friday explained: "The board of Redx decided, after careful consideration, including extensive discussion with Moulton Goodies Ltd, the company's largest shareholder, that the possible offer from Yesod substantially undervalued the company and its assets."
Shares in the company closed 12% lower at 7.25 pence each in London on Friday.
By Eric Cunha; ericcunha@alliancenews.com
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